As we have seen the Great Depression had a devastating impact on
the American economy and the American people. President Hoover
believed, basically, in waiting things out. As result of Hoovers
inactivity America turned to a new, dynamic leader: Franklin Delano
Roosevelt. Today we will discuss his basic strategy for improving the
I. Franklin Delano Roosevelt
A. Early Years
1. Raised in upper class family in Hyde Park N.Y.
2. Attended Harvard and Colombia
3. Lawyer then active in NY politics
4. 1912 - Assistant Sec. Of Navy
5. 1918 Narrowly won Governorship of NY,
6. 1920 - VP Candidate with James A. Cox
7. 1921 - Contracted Polio, lost use of legs. This deeply effected
Roosevelt. Now he truly knew what human suffering was all about. He
could identify. He was also a fighter and a winner. He overcame his
handicap and this later would inspire Americans during the
8. 1930 Reelected Governor of New York State - His innovative
programs gained national attention and were eventually called the
Little New Deal - NY Model
9. Ran for Pres. In 1932 - Used song: "Happy Day's Are
Here Again." Pledged to America; "I Pledge
to you, I pledge myself, to a new deal for the American people!"
B. What did Roosevelt do when he got elected?
1. Inauguration Speech: Told America "We have nothing
to fear but fear itself!" He wanted to inspire optimism and hope. He
did not want America paralyzed by fear. He was a man of action.
2. Appointed the "Brain Trust" - These were a group of brilliant
social, economic and political thinkers who comprised Roosevelt's
cabinet. He surrounded himself with the best, not just political
allies and supporters.
-Harry Hopkins - Social Worker and the architect of
much of the New Deal.
-Frances Perkins - Sec. of Labor and first female in the cabinet.
3. First Hundred Days - For the first
hundred days of his administration Roosevelt and his Brain Trust
where a whirlwind of activity. Legislation was introduced and passed
at a furious pace as Congress mostly acted as a rubber stamp.
Roosevelt called Congress into session and asked for executive power
to wage war against poverty and pessimism. He said he wanted a power
"as great as the power that would be given me if we were in fact
invaded by a foreign foe."
At first he ordered a bank
holiday, which closed every bank in the nation and stopped people
from withdrawing all of their money. This ended the panic. He then
signed legislation called the Emergency Banking Act. This closed all
of the insolvent lending institution and only reopened the solvent
ones. While many lost money at least the panic was eased.
B. What was Roosevelt's underlying philosophy?
1. Keynesian or "pump priming" economics. Based on the
beliefs of economist John Maynard Keynes it held that money should be
invested in the people, the working class. Then spending would
increase with new money in circulation. As spending increased it was
expected that businesses would expand to meet the new demand and hire
new workers. This would spur on more spending and more growth. This
plan was the opposite of the Republican plan ascribed to by Hoover
and earlier leaders. They had believed in supply side or "trickle
down" economics. In this philosophy money was to be invested at top,
in business. Then businesses would expand, hire new workers and this
in turn would spur on spending and further economic growth.
D. What did Roosevelt mean by relief, recovery and reform?
1. Relief - Immediate action taken to halt the
2. Recovery - "Pump - Priming" Temporary programs to restart the
flow of consumer demand.
3. Reform - Permanent programs to avoid another depression and
insure citizens against economic disasters.
EARLY NEW DEAL MEASURES
Immediate action taken to halt the economies
"Pump - Priming" Temporary programs to restart
the flow of consumer demand.
Permanent programs to avoid another depression
and insure citizens against economic disasters.
Declared so that the panic would be stopped.
Agricultural Adjustment Act
Taxed food processors and gave the money directly
to farmers as a payment for not growing food. This decreased
supply so price would go up.
Securities & Exchange Commission
Permanent Agency set up to monitor stock market
activity and ensure that no fraud or insider trading was
Closed the insolvent banks and only reopened the
National Industrial Recovery Act
Created the NRA (National Recovery
Administration) a consortium of businesses organized by the
government and given the power to set rules and regulations
for the economy. Members of the NRA displayed a blue eagle.
Federal Deposit Insurance Corporation
Permanent Agency designed to insure depositors
money in savings banks. Originally insured up to $5,000 per
depositor today it has increased to $100,000.
Federal Emergency Relief Act (FERA)
Gave immediate help to those that needed it in
the form of cash payments.
Home Owners Loan Corp.
Gave loans to home owners so they could pay their
mortgages. This prevented people from going homeless and
prevented banks from going under.
Permanent agency designed to ensure that the
older segment of society always would have enough money to
survive. The key here is that they would then also be able
to spend throughout their lives.
Civil Works Administration (CWA)
Provided temporary jobs repairing roads and
Works Progress Administration
Provided long term government jobs building
schools and other public works projects.
National Labor Relations Act and National
Labor Relations Board (NLRA/NLRB)
Otherwise known as the Wagner Act it helped
unions and thus helped workers. This acted created the NLRB
(National Labor Relations Board) which enforced labor law
and made sure that fair business practices where upheld.
Civilian Conservation Corps (CCC)
Temporary jobs to unmarried single adults filling
sand bags and helping out at disaster type situations.
Participants lived in barracks type housing.
Tennessee Valley Authority (TVA)
Agency created to build dams in the Tennessee
river valley. These dams provided more stable irrigation and
cheap hydroelectric power.
Soil Conservation Act
Laws mandating proper soil maintenance to make
sure that another dust bowl was avoided.
FAIR LABOR STANDARDS ACT -- provided minimum wage for workers.
CIVILIAN CONSERVATION CORPS -- provided work for jobless males
between 18 & 25 in reforestation, road construction, prevention
of forest erosion. Ended in 1941.
AGRICULTURAL ADJUSTMENT ACT -- established principle of government
price support for farmers and guaranteed farm purchasing power.
TENNESSEE VALLEY AUTHORITY ACT -- federal construction and
ownership of power plants regional development of Tennessee Valley (7
FEDERAL SECURITIES ACT -- required full disclosure of information
related to new stock issues.
NATIONAL EMPLOYMENT SYSTEM ACT -- created US employment service.
HOME OWNERS REFINANCING ACT -- use of government bonds to
BANKING ACT OF 1933 -- created Federal Deposit Insurance Corp.,
guaranteeing the safety of bank deposits.
NATIONAL INDUSTRIAL RECOVERY ACT -- minimum wages and self
regulation of industry --- ended in 1935.
PUBLIC WORKS ADMINISTRATION -- appropriated funds to construct
roads and other federal projects.
SECURITY AND EXCHANGE ACT -- federal regulation of the operation
of stock exchange.
NATIONAL HOUSING ACT -- federal housing administration insured
loans of private banks and trust companies for construction of homes.
COMMUNICATIONS ACT -- federal housing administration insured loans
of private banks and trust companies for construction of homes.
HOME OWNERS LOAN ACT -- government financing of home mortgages.
NATIONAL HOUSING ACT -- construction of low cost public housing
and slum clearance.
SOIL CONSERVATION ACT -- established federal soil conservation
RESETTLEMENT ADMINISTRATION -- built new model communities for low
income city workers
RURAL ELECTRIFICATION ADMINISTRATION -- created and administered
program of bringing electricity to rural areas.
NATIONAL YOUTH ADMINISTRATION -- federal work relief and
employment for young people.
NATIONAL LABOR RELATIONS ACT -- encouraged collective bargaining
and formation of unions to be supervised by the National Labor
SOCIAL SECURITY ACT -- created Social Security System -- old age
and survivors insurance; aid to dependent children etc.
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