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What was Franklin Delano Roosevelt's plan to end the Great Depression?

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 economy.


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 depression.

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.

-Henry Morgenthau

-Louis Lowe

-Cordell Hull

-Frances Perkins - Sec. of Labor and first female in the cabinet.

-Sam Rosenman

-Raymond Moley

-Rexford Tugwell

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 economies deterioration.

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.

 

Relief

Immediate action taken to halt the economies deterioration.

Recovery

"Pump - Priming" Temporary programs to restart the flow of consumer demand.

Reform

Permanent programs to avoid another depression and insure citizens against economic disasters.

Bank Holiday

Declared so that the panic would be stopped.

Agricultural Adjustment Act (AAA)

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 (SEC)

Permanent Agency set up to monitor stock market activity and ensure that no fraud or insider trading was taking place.

Emergency Banking Act

Closed the insolvent banks and only reopened the solvent ones.

National Industrial Recovery Act (NIRA)

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 (FDIC)

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.

Social Security Administration

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 bridges.

Works Progress Administration (WPA)

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.

EARLY NEW DEAL MEASURES

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 State Area)

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 guarantee mortgages.

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 services.

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 Relations Board.

SOCIAL SECURITY ACT -- created Social Security System -- old age and survivors insurance; aid to dependent children etc.


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