The Great Depression and the New Deal (1933-1939) Chapter 33

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The Great Depression and the New Deal

Chapter 33
1. Election of 1932: What did the Democrats (FDR) promise in the election?

- repeal of prohibition; balanced budget, sweeping social and economic reform

2. Brains Trust – who were they? young, reform minded intellectuals that generated

ideas for FDR – like Kitchen Cabinet

**3. How did FDR revolutionize the Democractic party (aka. which groups were to

become main supporters of the party because of the New Deal)?

- African-Americans, labor, reform minded

4. What was the Banking Holiday of March, 1933?

- FDR closed all of the banks from March 6-10, 1933; restored confidence in the

banks when they reopened.
5. What was the Hundred Days Congress?

- Congress passed remedial legislation to do something about the Great Depression

Banking Reform Act, FERA, Homeowner Loan Corp. Critics believed that

Congress was handing over legislative powers to the executive branch (which it

was to some degree)
6. Define the Three R’s of Roosevelt’s New Deal: Recovery, Relief, Reform

- Recovery – stabilize the economy in the short-term and long-term

Relief – bring relief to the people

Reform – correct the abuses that had caused it.
7. What does the phrase – “prime the pump” mean in terms of the economics

associated with the New Deal? need to put money into the system and into

people’s hands so that they can spend it and stimulate the economy
8. What programs implemented under the New Deal were actually dreams of

the Progressive Era that now saw reality?

- unemployment insurance, old-age insurance, minimum-wage laws, conservation

and development of natural resources, restrictions on child labor.

9. Why were “fireside chats” so significant?

- They restored hope to millions of Americans.

** 10. What does the “dole payment” mean? Why was this considered bad?

- Straight payments to people. Would make them dependent on the gov’t.

For every program mentioned below – define what it did and give a benefit and/or criticism of it.

Banking and Financial Sector (Reform)

Federal Emergency Banking Relief Act (FERA) (1933) – Pres. had the power to regulate banking transactions, and reopen solvent banks.

Glass-Steegal Banking Reform Act (FDIC) – gov’t ensured deposits up to $5000

Managed Currency” concept – Treasury baught gold and raised its purchasing price from $21 to $35 an ounce to try to bring about inflation and pull the US off the gold standard (US will pay foreign debt in gold if requested) but the minting of gold no longer

would take place. FDR believed that it would inflate prices and relieve the depression.

Truth in Securities Act (p. 784) – Sworn information on the soundness of stocks (no watering or false reports)

Securities and Exchange Commission (SEC) – (p. 785) watchdog agency over market

Public Utility Holding Company Act of 1935 – (p. 785)outlaws supercorporations in

public holding companies.

Civil Works Administration (CWA) – provide temporary jobs in the winter of ’33-34. Goals was to get people money. ** Critics believed it was a boondoggle and just another form of the dole.

Civilian Conservation Corps (CCC)- reforestation, conservation, flood control, fire prevention prevention of youth crime, sent money back home and spread the wealth – kept youth from becoming radicals. Most popular.

Works Progress Administration (WPA) – 1935: put people to work in the jobs of their fields (musicians to play, artists to paint) / built bridges, roads - $11 billion (Hopkins)

Grand Coulee Dam, on the Columbia R.

National Recovery Administration (NRA) – (pp. 781-782)

What was it? Why was the NRA program so revolutionary? Why didn’t it work?

Outline the verdict in the Scheckter “sick chicken” decision.

- A voluntary organization of businesses that wished to establish “codes of fair

competiton” This would help labor and spread jobs.

- Codes of Fair Competition – business, labor and management all created an

atmosphere of cooperation : regulations related to min. wage, max. hours

collective bargaining, no yellow dog contracts, child labor restrictions. (labor

gains that unions were wishing for decades for. “new model of business

organization” – voluntary cooperation

- Too much self-sacrifice – too many chiselers

- S.C. declared it unconstitutional – given legislative power to the executive branch

the Congress cannot regulate an intrastate fowl business
Tennessee Valley Authority (TVA) – (** pp. 785-786)

What was it? Why was it so revolutionary?

What did critics say about it? Was it successful?

- Created a series of dams along the Tenn. River that provided employment, cheap

electricity and irrigated millions of acres of lands (controlled flooding)

- Would bring the government into a private sector and provide employment to

an entire region

- Critics believed that it was socialism and that it was unfair competition to the

private electric companies already in business.

- Very successful

11. Opposition Elements – Define these “radicals” and their plans that were more

revolutionary than the New Deal.

Father Coughlin – “Social Justice” – assailed the New Deal for not going far

enough. He became too ant-semitic and fascist

Huey “Kingfish” Long – “Share Our Wealth” program – Gov. of Louisiana that

promised $5000 to every family (somehow)

Charles Townshend – Elderly movement - $200 / elderly over 60 each month

12. Women in the New Deal : Why were these women significant?

Eleanor Roosevelt – first lady that threw her weight behind social improvement

projects / advocate for the poor

Francis Perkins – First Lady Cabinet member – Sect. of Labor

Mary Bethune – First African American in the Cabinet.

Pearl Buck – Third Pulitzer Prize winner in American History for The Good

Earth (1931)

Agriculture (Relief)

Agricultural Adjustment Administration (AAA) – (p. 783)

What was it and why did critics dislike it? Why was it found unconstitutional?

- millions of dollars to help farmers meet their mortgages/ paid farmers not to plant

in order to increase the prices of crops.

- government pays farmers not to plant to create artificial scarcity and thus prices

will go up

- Effective to a degree, but critics pounced for millions starving and farmers are

plowing under

- Executive branch is regulating through taxation – this is a congressional power
Soil Conservation Act of 1936 (p. 783)

- Soil Act paid them to plant soil conserving plants on fallow ground and thus

paid them for planting and so there was still scarcity
Second Agricultural Adjustment Act (p. 783)

- 2nd AAA – continued Conservation payments but also reintroduced parity

prices in specific areas (wheat, cotton) without the tax

Frazier-Lemke Farm Bankruptcy Act (p. 784)

- 5-year moratorium on banks taking farmers lands because of foreclosure

due to inability to pay mortgages.

Federal Housing Administration (FHA) – (p. 788)

- loans to improve dwellings or build new public housing– opposition by landlord

and real estate promoters. competition with private sector

Social Security Act (1935) (p.789)

- $10-$85 – per month depending on the worker; payroll tax on employers and

employees. following the lead of advanced industrial European societies

- Critics – cult of work, not leisure

Wagner Act (National Labor Relations Act) 1935 –

- Created powerful Ntional Labor Relations Board

- right of labor to collectively bargain and self-organization
Fair Labor Standards Act - 1938 (p.790)

Set min. wage (.40/hr,) max. hours (40 hours/week) ; No child labor under 16

– Agriculture, Service and domestic workers exempted.
Congress of Industrial Organizations (CIO)

Why was it unique? Who was its leader? What successes did it achieve?

- Organized unskilled labor; John L. Lewis; organized the auto industry and tried

the steel industry. Successes with General Motors and US Steel, but some violent

strikes in the late 1930’s.
Election of 1936: Who was the Republican candidate? What was the outcome of the election? Why were the results so lopsided? What new “Democrat Coalition” had Roosevelt forged?

- Alfred Landon

- Landslide for FDR – 523 electoral votes to 8 for Landon

- Roosevelt had played to the “forgotten man” and they voted

- South, blacks, urbanites and the poor, New Immigrant groups
FDR’s Court Packing Scheme (1937) How did FDR view the Supreme Court and the need for revision? What were the provisions of the Court Bill he requested of Congress? How did many Republicans, some Democrats and the majority of American view his plan?

- The were conservative obstructionists (against the New Deal 7 of 9 times) who

were thwarting the “will of the people” for more New Deal legislation (elections

of 1932,34,36) showed it.

- Pres. can appoint another justice for every justice over 70 up to 15

- Thought he had overstepped his executive authority and the fine balance of

checks and balances. Appeared to be nearing dictatorial tendencies. They

rejected the scheme.

Roosevelt Recession (1937) What was it and why did it occur?

- Economy took a nosedive – depression within the depression.

- S.S. taxes cut into payrolls and gov’t had decreased spending considerably
Keynesian Economics: Define this economic philosophy. This philosophy was used in support of the Second New Deal. How was it different than the method used for earlier funding of the New Deal?

- Deficit spending (debt) to put people to work.

- earlier it was funded through taxes principally.
Balance Sheet of the New Deal
List at least four major criticisms of opponents of the New Deal. Which were the most warranted and justified? Why?

- Socialistic – “dictatorship of do-gooders”- taking away private enterprise/ initiative

- Too much waste – (Yes)

- too much money – planned bankruptcy

- Failed to cure the depression too little money – didn’t go far enough, thus the

results were not effective (Yes)

- FDR leaped and expiramented without any thought – “jolly improviser”
Characterize two major accomplishments of the New Deal.

- Government accepting the principle that the federal government was

morally bound to prevent mass starvation by “managing” the economy.

- It purged American capitalism of some of its worst abuses to save itself.

- Prevented revolution

- Fairer distribution of the national income

- By adopting some socialistic principles, it prevented Socialism from taking over

- Reinstilled faith in people’s minds – the government had not forgotten the

“forgotten man”

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