The New deal Flashcards
Changing from Hoover to Roosevelt
While roosevelt was waiting to be officially in office the depression was getting worse. Hoover couldn’t make changes either, Hoover want to include FDR in making a smooth change over but FDR didn’t want anything to do with Hoover and his policies.
overview of the first 100 days
FDR got congress to grant him great power, in the First 100 days FDR did emergency legalisation and many alphabet agencies.
FDR presidential style
‘bought about the mode president.’ Was full of confidence and optimism. He uses the media and he uses his appointment of personnel.
FDR using the Media
understood the power of the media. Developed the time weekly press conferences, to talk to the press, explain polices carefully and welcoming questions. Press on FDRs side, he could control most of what newspapers wrote about him.
Fireside chat
FDR had the first great read voice. He spoke directly to the electorate on the fireside chats. (became so popular that people would find radios so not to miss the president.) Mass Media was now so importance because people hadn’t really ever had any connection with the president, now they can hear his reassuring voice every week.
FDR appointment of personnel
(normally presidents would appoint member of there parties to help govern) However FDR appointed the person who could do the job best. He appointed Henry A. Wallace, faming expert, secretary of agriculture.
The first 100 days the measures taken
Banking and finance Regulation of the stock exchange Economies in government Agriculture Industrial recovery Relief Native Americans Housing issues
Banking - the first 100 days
Main concern was the collapse of the backing system, 1932 banks shutting at 40 per day. FDR did a bank holiday were all banks were shut for 4 days. The aim of the emergency banking relief act was of give he American people confidence in the banking system and gave the treasury secretary the power to investigate all banks.
Emergency Banking Relief act
March 1933
Glass-Steagall Act
1933 - keep the banks on a sounder longterm footing:
-Small banks that relied on small deposited where banned from investment banking.
-Bank officials where no longer allowed to take personal loans from eh banks.
ECTTTTT
Glass-Steagall Act negatives
Many Hoover followers believes that this could have been done when both Hoover and FDR were in power, many said it was just FDR trying the steal all the attention. However many said he adopted Hoover policies and wasn’t radical enough.
Finance
FDR wanted to stop gold flowing out the country and to increase the amount of money in circulation.
Finance - gold flow
effectively took the US off the gold standard by banning the export of gold unless said ok but the treaty secretary. Those with gold were asked to return it to the bank for $20.67 an once.
This would bring down the value of the dollar abroad. Once the dollar was no longer tired to the value of the gold. It would mean to dollar could find its own international market, making it easier for other countries to buy abroad.
Problems with FDRs financial measures
Bitian and other European counties wanted economic stability, however FDR believed the dollar falling was recovering the econmcic problems in the US and therefore wouldn’t make any agreements.
In October 1933 FDR said that they would buy gold at $31.36 an once, As gold rose the dollar fell.
The gold reserve act
1934 made gold $35 per once and the dollar had been nearly devalued by %60 since March.
The silver Purchase act
1934 - the treasury would buy the silver until in 33% of the price of gold.
Regulation of the stock exchange
Truth securities Act 1933 and the Securities act 1934.
Truth securities Act
1933 - brokers have to offer realistic info about what they are selling.
Securities act
1934 - setting up a new agency, the securities exchange commission (the head Joseph Kennedy). To over see stock market activities, and inside activities were brokers agree to raise price before selling like a Bull pool.
Economies in government
Made all his recovery programs self-financying and they often began with loans rather than grants. And like Hoover wouldn’t give ex-army their onus.
The Economy act
1933 - cutting government salaries and cutting ex-solders pensions.
Agriculture
higher priority than industrially recovery because:
-30% of labour force were in agriculture.
-agriculture became more profitable there would be less farms being repossessed by the banks.
-FDR had personal interest in agriculture and saw the farming industry as the back bone to the USA.
- Famers’ holiday association in the mid west threatened farmers strikes if effective legislation was not forth coming.
Overall the aim was to make farmers productive by not over-producing.
The extension of farm credit
1933 bought all the varies agency dealing with agriculture credits. in April the emergency faming Mortgage act loaned funds to farmers in danger of losing their properties.
Agricultural adjustment act
1933 - agricultures problems between 1929-1933 had only fallen by 6%.
Overall aim was to increase farmer income.
AAA stands for?
Agriculture adjustment administration
Agriculture adjustment administration
agreed to pay farmer to reduce what they produced. The scheme was self-funding by the tax on companies that process food. Cotton was the biggest problem of not getting sold
The program was self financing due to taxs payed on companies that produced food.
Tennessee Valley Authority
1933 - (TVA) Help the valley that ran through 7 of the poorest states in US and employed 100,000. It aimed to:
- dams to control the floods
- encourage farmers to uses effective means of faming
- provided jobs by setting up fertiliser manufacture factories.
- develop welfare and education programs
- produce electricity
Industrial recovery
Priority for the new deal. only limited success due to the scale of the industrial crash.
FDR wanted to get people to work and create demand. He needed the business men on his side, however they still believed in the lassie faire attitude.
Growth of the economy in the 1933-1936?
The economy grew 10% in FDRs ruling between 1933-1936.
NIRA
When congress wanted to reduce the working week on 30hours, FDR had to act quick to change this policy, so in june he replace it with the National industry recovery act. (NIRA)
Public work administration
PWA - funded $3.3billion and its purpose of leading the money was to lead to economic growth. The public work scheme such as roads, dams , hospitals and schools would stimulate economic growth. E.g. road building would lead to want for concrete.
PWA
Public work administration
First new deal dates
1933 - 1935
RFC
The roconstruction finance corporation (RFC) would them buy the banks shares. In doing so the RFC became the largest bank in the world.
fireside chat and banking
FDR then went on the fireside chat and talked about the nature of the crisis and tell the public what they can do to help (Place your money in banks rather than under the mattress.) By April $1billion had be returned back to the banking deposits.
FDR said banks are safe trust them and those not safe have been shut down. People start putting there money back into banks = Recapitulation.
Emergency banking relief act
govt could close down banks, orbit banks (check their data) and force all banks to come part of a national net work.
CCC
open to 18-28 yr old recruited by departments of labour. Estimate 1/4 million joined first year and cost around $5500million. Payed $30 amount and $25 was sent home to the families.(not paired much because they didn’t want people to rely on the CCC.)
Given education in the evening, improving literacy skills for 100,00 people. Was only meant to last for 2years but congress extended it for 7yrs.
CWA
Civil works administration: 1933 with a $400million grant for the PWA. It put 4million people to work on public work projects.
NRA
National recovery administration
PWA employed skilled workers to build govt. buildings, schools, hospitals, airports ect, with a budget of $3.3billion.
Federal emergence relief act
allow govt. to set up central release fund, allows to give each state $ for every $3 they spend on refile.
Did the New Deal solve the problems of the depression? Banking and finances Yes:
FDR immediately dressed the problems of the banks:
-closes banks 6day, no withdrawals.
-Emergency banking relief act gave govt. power to investigate banks.
-firesidechat explained the need to return money into banks.
-Glass-Steagall act insured banks deposits up to a value of $2,500
-By the beginning April , $1 billion had been returned to the banks.
-removing the Us gold standard encourage trade from forgiven countires.
Economy act - cut government salaries increasing support from the new deal.
-The truth-in-securites act (1933) and the securitites act (1933) were successful in preventing fraud in the stock exchange - Richard Whitney ( head of the stock exchange) was changed with fraud.
Did the New Deal solve the problems of the depression? Banking and finances No:
- FDR was cresting for bailing out the banks with goverment money- many said it was rewarding the banks for incompetence.
- The review act increased taxes on incomes over $50,000 to finance the new deal reforms but was not successful because only 1% of the population earned over $10,000, so it only raised $250,000.
Farming credit act
1933
Did the New Deal solve the problem of the depression?
Agriculture Yes:
-The New deal improved farms income rates and prevented them from getting worse:
2933- $6billion
1938- $10billion
-Individuals measures had a significant impact on agriculture:
Farm Credit act 1933 gave loans to farmers to allow them to keep their properties.
AAA 1933 removed 10,500,000 acres of cotton from production and killed 6,000,000 piglets. : increasing farm income by 1932 $4,5billion to 1935 $6.9billion.
-TVA 1933 had a significant effect for the Tennessee valley:
1929 only 2/100 farms in the area had electricity. The TVA built 20 dams to provide hydroelectrics.
1929-1949 the average income rose by 200%.
-Rural electrification administration 1935 provided electro for rural areas.
1936- 13% of farms had electricity
1941 - 35% of farms now had electricity.
-Bankhead-Jones farmsTenants act 1937 provided loans to farmers to keep and restock their farms.
Did the New Deal solve the problem of the depression?
Agriculture No:
-The new deal did return farms income to the pre depression leave:
1929- $14billion
1933- $6bill
-WOrion
1938- $10billion
-The new deal have improved farms income by 1936 but the recession meant that farms income fell 20%.
-There is evidence to suggest that the dust bowl in 1933-1934 had a more significant impact on the overproduction than the AAA: destroyed 35million acres of arable land.
-Impact of the AA was limited by the action of the landowners and the supreme court:
Landowners received money for taking land our of production, but instead of giving the money to the workers the landowners fired the worker and kept the money for themselves.
Butler Case 1936 declared the AAA unconstitutional.
-Resettlement administration 1935 was a failure: planned to move 500.00 families to better land, but moved only 4,441 families.
-Second AAA 1938 planned to stock surplus produce to keep for years of harvests, but was too hard to organise.
-World Was Two increased the farm income to pre-depression levels.
Did the New Deal solve the problem of the depression?
Industry Yes:
New deal returned industrial production to pre-deprssion leaves:
1929; 56
1938:56
-The NRA tried to improve condition for workers by insisting its members adhered to 557 code:
minimum wage of $12 for a 40 hour week.
Maximum working week of 35-40 hours.
abolition of child labour
unions permitted.
-The national Labur Relation act 1935guaranteed all workers the right to join a union:
unions went from 1936–4million
1937–7million
-The public Utilities holding company act 1935 broke up all big holding companies within three years of preventing price fixing.
-The fair labor standards act 1938 fixed wages and working hours in all industries involved in inter-state commerce:
increased wages of 300,000 people
reduced the working hours of 1.3 million people.
Did the New Deal solve the problem of the depression?
Industry No:
The new deal had increased industrial production to pre-depression leaves, how ever the recession decreased them again:
during the recession the production of moot cars fall 13%.
The NRA had limited impact:
companies didn’t have to sign up - Henry ford refused.
Large firms could work together to exploit the codes by limiting output - allows them to reduces their work force and put up prices.
Sick chickens cases declared the NRA unconstitutional.
NRA was discriminated against small firms:
the national recovery review board acknowledge that small firms were disadvantaged by the code.
Domestic servants and farms labourers were exempt from the terms of the fair labor standards act (1938). consequently, their wages and working hours remained unrelated.
World was two had a significant impact on industrial production leaves:
1938 : 56
1945 : 100
Did the New Deal solve the problem of the depression?
Employment Yes:
ND improved employment rates and stopped them getting worse:
1933 - 24.9% 1938 - 19%
Individual measures had a significant impact on unemployment:
CCC employed 250,000 men in the first year, and 500,000 a year from 1935.
CWA (1933) employed 4million people for the winter of 1933-1934.
WPA (1935) employed 2million at any one time and by 1941 it had provided employment for 20% of the workforce.
The WPA (1935) showed some consideration for the needs of minorities - Had a division of Black american affairs to support African-Americans employment.
Did the New Deal solve the problem of the depression?
Employment No:
ND did not retuned employment to pre-depresssion rates:
1929 - 3.2%
1933 - 24.9%
1938 - 19%
The ND had improved unemployment leaves but the recession increased them again:
1936 - 14.3%
1938 - 19%
Individual measure were limited in scope:
CWA - only employed people for the winter.
CCC - only employed men ages 17-24.
PWA - only employed skilled workers.
PWA did not make best uses of its funds:
budget was $3.3billion but spent $110million after 6 months.
WW2 reduced unemployment to pre-depression leaves:
unemployed at 2%.
60% of women employed.
Did the New Deal solve the problem of the depression?
Housing No:
Federal housing administration (1933) offered low-interest mortgages on new homes but the impacts were limited:
65% of new houses cost over $4,000 and fewer than %25 could afford them.
Wagner-Steagall National Housing act (1937) provide loans to companies to build new homes, but effectiveness was limited:
Budget of $500million - double was needed.
The biggest housing problem was in the NE cities, but only 10% on the budget could be spent in one states.
1941 only 160,000 homes had been built.
Did the New Deal solve the problem of the depression?
Relief Yes:
The federal emergence relief act (1933) provided government funded relief:
budget of $500million
Encouraged states to support relief, would give each state 1$ for every $3 provided from state budget.
SoCial security act (1935) provided supports from unemployed and elderly:
gave pensions.
provided unemployment benefits.
Did the New Deal solve the problem of the depression?
Relief No:
FERA (federal emergency relief act) failed to change the attitude many had toward relief.
Funds provided by the FERA were too limited:
Provided $25 per week per family.
Subsistence level was calculated to be $100.
Social Security act (1935) was limited:
Pensions not paid until 1940.
unemployment benefits was capped ay $18 per week for 16 weeks.
Opposition to the social security act (1935) increased economic problems:
Employers put up prices to cover the cost of their contributions.
States funded their contributions by cutting back on relief.
The Sick Chickens case
The Schechter brothers were butchers in NYC and selling chicken unfit to eat, so were prosecuted by the NIRA fro breaking the code of practice. However it was taken to the supreme court, then decided it should be a matter of the New York courts not the federal courts. The poultry code was declared illegal.
The federal government had no right to interfere in internal state issues.
The federal government could not prosecute individuals firms for breaking the NIRA ( only firms across the whole on american like hollister)
