Mr. O’Brien Warren Hills Regional HS FDR’s First 100 Days: The “First New Deal” Mr. O’Brien Warren Hills Regional HS

Franklin Roosevelt – 1st 100 Days Democrats also won two-thirds of the seats in the Senate and three-fourths of the seats in the House Roosevelt chose brilliant advisers; they were professors, lawyers, and journalists They were called the Brain Trust They created programs, policies, and agencies to alleviate the problems of the Great Depression These programs became known as the New Deal To carry out these programs Roosevelt created his own “Alphabet Soup”

The Hundred Days When FDR took over in 1933, the U.S. economy was on the brink of collapse: Unemployment was at 25% 38 states had total bank failure FDR requested from Congress broad executive power to begin his “New Deal” program of economic relief, recovery & reform FDR asked for “broad executive power that would be given to me if we were in fact invaded by a foreign foe.”

“Let me assert my firm belief that the only thing we have to fear is fear itself; nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

The 1st Hundred Days (reform) In his 1st hundred days, FDR began his 1st New Deal (1933-35) FDR’s 1st order of business was to restore confidence in banking: Declared a 4-day bank holiday: closed or funded weak banks & opened new gov’t-aided banks Glass-Steagall Act created the FDIC which guaranteed all bank deposits up to $5,000 Banks were regulated (not nationalized); the economic system was reformed (not drastically changed) Now, the FDIC insures deposits up to $250,000 Emergency Banking Act of 1933 The First Hundred Days Americans voted for Franklin Delano Roosevelt in 1932 on the assumption that the Democrats would dole out more federal assistance than Hoover and the Republicans had. Indeed, immediately after taking the oath of office, FDR set out to provide relief, recovery, and reform in his bundle of programs known as the New Deal. Roosevelt drew much of his inspiration for the New Deal from the writings of British economist John Maynard Keynes, who believed that a government’s deficit spending could prime the economic pump and jump-start the economy. With the support of a panicked Democratic Congress, Roosevelt created most of the “alphabet agencies” of the First New Deal within his landmark First Hundred Days in office. The Banking Acts On March 6, 1933, two days after becoming president, Roosevelt declared a five-day national bank holiday to close banks temporarily. During Hoover’s presidency, roughly 1,500 banks had closed each year, and FDR hoped that a short break would give the surviving banks time to reopen on more solid footing. Several days later, Congress passed the Emergency Banking Relief Act, which gave Roosevelt the power to regulate banking transactions and foreign exchange. ESSENTIALLY, SINCE THIS INVOLVED LOANS, THIS WAS A BAILOUT OF THE BANKS!!!!!! Several months later, Congress passed the Glass-Steagall Banking Reform Act to protect savings deposits. The act, in turn, created the Federal Deposit Insurance Corporation (FDIC), which insured an individual’s savings of up to $5,000 (today, it insures deposits of up to $250,000). The act also regulated lending policies and forbade banks from investing in the stock market. After the banking crisis was resolved, Roosevelt aired the first of his “fireside chats” to over 50 million radio listeners, encouraging Americans to redeposit their money in the newly opened banks. THIS ACT WAS REPEALED BY PRESIDENT BILL CLINTON IN THE 1990S – THIS HELPED CAUSE THE CRASH OF 2007 AND THE GREAT RECESSION!!!!! REMEMBER THE BANKS NEEDING BAILOUTS IN 2008? The president quickly pushed ahead on other fronts. The Federal Emergency Relief Act pumped $500 million into state-run welfare programs. This is direct relief to the people – otherwise known as the “dole.” -- it was not much, but a VERY CLEAR difference between Hoover and FDR. It must be remember, FDR, like Hoover, was afraid of helping too much, worried that this would create a dependent masses with low self esteem.

Roosevelt's Alphabet Soup Agricultural Adjustment Administration (AAA) Civil Works Administration (CWA) Civilian Conservation Corps (CCC) Farm Security Administration (FSA) Federal Emergency Relief Administration (FERA) Home Owners Loan Corporation (HOLC) National Recovery Administration (NRA) National Youth Administration (NYA) Public Works Administration (PWA) Rural Electrification Administration (REA) Securities and Exchange Commission (SEC) Social Security Administration (SSA) Tennessee Valley Authority (TVA) Work Progress Administration (WPA) Federal Deposit Insurance Corporation (FDIC)

Roosevelt's First 100 Days – i.e. the “First New Deal” The Homeowners Loan Act provided the first federal mortgage financing and loan guarantees. This was the beginning of the modern day 30 year mortgage. By the end of Roosevelt's first term, the Homeowners Loan Act provided more than 1 million loans totaling $3 billion. In addition, Roosevelt took the nation off the gold standard, devalued the dollar, and ordered the Federal Reserve System to ease credit. Tennessee Valley Authority Act--the first direct government involvement in energy production.

The Hundred Days – 1st New Deal Modest relief checks were doled to 15% of Americans, but there was also a social stigma attached to being on the “dole” Federal Emergency Relief Act (FERA) pumped $500 million into state welfare programs The Federal Emergency Relief Administration The “Hundred Days Congress” also created the Federal Emergency Relief Administration (FERA), in May 1933, to dole out roughly $500 million to the states. About half of this money was earmarked to bail out bankrupt state and local governments. States matched the other half (three state dollars for every one federal dollar) and distributed it directly to the people. FERA also created the Civil Works Administration (CWA), which helped generate temporary labor for those most in need. 1st New Deal - limited dole (i.e. welfare) (by social stigma and FDR’s fear to create dependents)

The Hundred Days Some of FDR’s First New Deal focused on long-term reforms Securities & Exchange Commission (SEC) to regulate the stock market & prevent another stock market crash Tennessee Valley Authority (TVA) created dams in 7 states to provide cheap hydroelectric power & create jobs The Tennessee Valley Authority Congress also created the Tennessee Valley Authority (TVA), whose goal was to modernize and reduce unemployment in the Tennessee River valley, one of the poorest and hardest-hit regions in the country. The agency hired local workers to construct a series of dams and hydroelectric power plants, which brought cheap electricity to thousands of people. The public corporation also created affordable employee housing, manufactured cheap fertilizer, and drained thousands of acres for farming. The TVA, like the AAA, was highly controversial. Many conservatives claimed that government production of electricity was a mild form of socialism and that it disrupted market prices too much. Competing electric companies also attacked the TVA for selling cheaper electricity and lowering their profits. Still, the TVA had such a profound impact on the economy and quality of life in the Tennessee River valley region that the federal government initiated similar projects throughout the West and South. Within a decade, many major U.S. rivers were set up to produce hydroelectric power that provided both electricity and jobs.

The Tennessee Valley Authority Critics claimed the TVA was too socialistic; Competing electric companies attacked the TVA for selling cheaper electricity & eliminating competition

stock market reform- Security Exchange Commission More from the 1st 100 Days: stock market reform- Security Exchange Commission to regulate the stock market- practice of buying on margin was regulated to put more $ in circulation, FDR went off the GOLD STANDARD (gov't could print more $ than Fort Knox gold reserves would allow)- w/ more $ in circulation, wages and prices increased Restructuring American Finance Finally, Roosevelt also lobbied Congress to establish new regulations on the financial sector of the economy. After taking office, he took the country off the gold standard, which allowed citizens and foreign countries to exchange paper money for gold. To prevent people from hoarding the precious metal, the president also ordered all private gold stocks to be turned over to the U.S. Treasury in exchange for paper dollars. Congress also created the Securities and Exchange Commission (SEC) to regulate trading on Wall Street and curb the out-of-control speculation that had led to the Crash of 1929.

1) food production down when millions were starving AGRUCULTURAL ADJUSTMENT ACT (AAA) - passed in 1933 to aid farmers- its objective was to restore the prices of crops. by paying them equivalent SUBSIDIES (paid not to produce) – bad side: 1) food production down when millions were starving 2) Black sharecroppers were hurt: white landowners paid not to farm so they got rid of Black tenant formers Created in 1933 in FDR’s 1st 100 Days in office, largely as a result of the protest movements quickly spreading throughout the country, and because restoring the purchasing power of farmers might help boost demand for manufactured goods, the AAA paid farmers to restrict the acreage (land) they used – in other words, they were paid for not planting crops in order to reduce surpluses, increase demand for major farm products, and to raise agricultural prices overall.  This was to be funded through taxing those businesses that processed the crops and made a profit off of these crops (e.g. those who milled the grain that farmers grew). Farm income did rise (a little), but many fields remained fallow (unfarmed) while people, and it was an insult to the starving – i.e. land went unused while some starved!!!!! Got a new AAA during 2 New Deal  

UNEMPLOYMENT - still a major problem FDR, like Hoover, was wary of offering too much assistance to the masses- he wanted people to earn their keep so gov't agencies were created - temporarily - to address the unemployment problem CIVILIAN CONSERVATION CORPS (CCC) - in 1933 - set to establish work for young men (18-25) in areas of reforestation, soil conservation, flood control, road construction - also took them out of urban labour markets - but Blacks not permitted to enrol Because of his fear of offering too much help (which was/is a belief of both parties – i.e. that if you offer too much help, you will create a dependent class of peoples with no self worth) – FDR created programs that paid very little, and were designed to be very temporary (i.e. not “career” type jobs)

CCC workers paved roads, planted trees, built bridges Civilian Conservation Corps (CCC) employed urban men CCC workers paved roads, planted trees, built bridges

The 1st 100 Hundred Days The National Industrial Recovery Act (NIRA) was the 1st attempt at economic recovery: Created the National Recovery Admin (NRA) set max hours & minimum wages for workers & stimulated industry by fixing prices & setting production limits Agricultural Adjustment Admin (AAA) subsidized farmers The National Industrial Recovery Act The 1933 National Industrial Recovery Act was the federal government’s first attempt to revive the economy as a whole. It was also the first attempt by national government to legalize unions – i.e. force employers to negotiate with them (in other words, the employer couldn’t ignore the union). (corporation got around this by forming “company unions” and outright resisting it!). The bill created the National Recovery Administration (NRA) to stimulate industrial production and improve competition by drafting corporate codes of conduct (i.e. rules they had to follow). The NRA also sought to limit production of consumer goods to drive up prices. NRA - first attempt by national government to legalize unions – i.e. Section (7) a of NIRA - forced employers to negotiate with them (in other words, the employer couldn’t ignore the union). (IT WAS EVENTUALLY DECLARED UNCONSTITUTIONAL – REMEMBER THAT WHEN WE GET TO THE WAGNER ACT!!!!!!) Additional attempts to stimulate the economy include taking the U.S. off the gold standard & ending prohibition (21st amendment)

National Recovery Administration The NRA ended up being too bureaucratic; business cooperation gave way to self-interest & greed

The “Sick Chicken” Case A.L.A. Schechter Poultry Co. v. U.S. (1935) Supreme Court unanimously struck down the NIRA Decided that Congress had given the president too much lawmaking power Also ruled that NIRA violated the Constitution’s commerce clause In 1935, the U.S. Supreme Court dealt a major blow to Roosevelt and the New Deal in the A.L.A. Schechter Poultry Co. v. U.S. decision, also known as the “Sick Chicken” case. In this decision, the Court declared the NIRA—one of the most important New Deal programs—unconstitutional. In the case, the federal government accused the Schechter Brothers, poultry merchants in New York City, of violating the NIRA codes, specifically by selling diseased (or sick) chicken. The Schechters were prosecuted and found guilty, but appealed the verdict. In the Court’s unanimous decision, Chief Justice Charles Evans Hughes determined that the Congress had relinquished too much of its lawmaking power to the Executive Branch through the NIRA codes. The codes were laws, the Court said, and therefore violators could be punished for not following them. Chief Justice Hughes noted, “Congress is not permitted by the Constitution to abdicate, or to transfer to others, the essential legislative functions with which it is vested… The delegation of legislative power sought to be made to the President by Section 3 of the National Industrial Recovery Act of June 16, 1933, is unconstitutional, and the Act is also unconstitutional, as applied in this case, because it exceeds the power of Congress to regulate interstate commerce and invades the power reserved exclusively to the States.” In his view, Congress had allowed the New Deal to not only enforce but to make law. The Court also noted that the federal government had unconstitutionally attempted to regulate intrastate commerce (commerce within a state). It wrote, “When the poultry had reached the defendants' slaughterhouses, the interstate commerce had ended, and subsequent transactions in their business, including the matters charged in the indictment, were transactions in intrastate commerce.” In essence, the Court ruled that the chicken had “come to roost” in New York. Once that had occurred, the Schechter Brothers were engaged in intrastate—rather than interstate—commerce. The Constitution stipulates that the federal government can only regulate interstate commerce. Supreme Court Chief Justice Charles Evans Hughes

THE NEW DEAL it was a watershed moment in American society - changed completely the way the gov't functions the first phase of the New Deal dealt exclusively w/ eco. reform – FDR believed gov't legislation/involvement was crucial to stimulate the economy (more so than Hoover – FDR was willing to FORCE business to do things such as follow rules, etc.) But it needs to be remembered that FDR and Hoover were not all that much different. Hoover and FDR were both afraid of ‘giving’ too much. They were both afraid of creating dependents if they helped too much. The difference is FDR was NOT an ideologue. That means that FDR was more willing to bend his beliefs (i.e. his ideology).

The Hundred Days The 1st hundred days of FDR’s administration were temporary solutions to solve problems, focused more on fixing the business world -- and remember, the help was limited by FDRs fear of helping too much lest he create a dependent masses with low self esteem, but… …still, many Americans believed that FDR was very actively responding to the Great Depression (he was using the radio, doing more than Hoover, and at least trying to help) (in other words, he was a master at using words, and making himself appear to be doing more than he really was) Still ---- he did actually help….a lot………….just not as much as his own rhetoric (words, speeches) made it appear, or as much as our hazy memories recall. In other words, he wasn’t the savior of the masses, nor was he Hoover. For example – the rich hated FDR. The more the rich hated FDR, the more popular he was with the masses. The rich called FDR a class traitor, but FDR believed his reforms were essentially saving the rich from themselves. In other words, their unwillingness to share the wealth caused capitalism to collapse. FDR saw himself as saving capitalism by making it softer, or nicer, to the common folk. After all, the rise of big business (i.e. corporations…this is known as “corporate capitalism”) had resulted in the top 1% amassing immense wealth and power. Because the common folk were not able to consume, the Depression happened. Another example – FDR is famous for saying about the rich --- “I welcome their hatred.” – that was during his campaign for his second term in 1936 – those were very strong words……..very very strong ---------FDR did not enact one new relief or employment program after that statement!!!! His words did not match his rhetoric.

FDR addresses the nation during a 1935 fireside chat Fireside Chats Radio “talks” FDR spoke plainly with audience about issues and concerns Usually conducted in an informal manner FDR gave 30 chats while in office Many view FDR as a master at informing the American people about his programs and gaining support for his New Deal legislation. Using a tactic from his years as New York governor, Roosevelt held regular “fireside chats” in which he discussed issues and concerns with the public via the relatively new medium of radio. FDR held 30 such chats during his term, discussing subjects ranging from solutions for the banking crisis to war policy. Roosevelt tended to use down-to-earth, easily understandable language in his chats, frequently calling his listeners “my friends” rather than using more formal language. Many radio listeners felt that FDR was specifically speaking to them, and the chats did much to allay fears and restore confidence, as well as to gain support for New Deal programs. FDR addresses the nation during a 1935 fireside chat

The Second New Deal Roosevelt launched a second burst of activity in his second 100 Days in which he called on Congress to provide more relief for farmers and workers This was due to the shortcomings of his first 100 Days programs, many New Deal programs delcared unconstitutional by Supreme Court, and pressure from political movements (i.e. THE PEOPLE!!!) to do more