1. CHAPTER 19 SECTION 1

2.  Distant relative of TR Started in the NY state senate Started in the NY state senate Served Asst. Sec of Navy under Wilson Served Asst. Sec of Navy under Wilson Ran for VP in 1920, lost badly! Ran for VP in 1920, lost badly! Took a year off; contracted polio Took a year off; contracted polio Elected governor of NY in 1928, and again in 1930 Elected governor of NY in 1928, and again in 1930 Ran for president in 1932 against Hoover Ran for president in 1932 against Hoover Roosevelt’s confidence was a sharp contrast to Hoover’s apparent failure Roosevelt’s confidence was a sharp contrast to Hoover’s apparent failure Because of his upbeat confidence (and with a little help from the Depression) he won in a landslide – promised America a “new deal” Because of his upbeat confidence (and with a little help from the Depression) he won in a landslide – promised America a “new deal”

3.  Roosevelt won in Nov. 1928, but didn’t take office until Mar. 1929 During the winter unemployment and bank runs increased During the winter unemployment and bank runs increased  Abandoning the gold standard made many Americans and foreign investors pull money from U.S. banks  By March 1933 4000 banks collapsed; $9 million lost  38 states declared bank holidays  By Roosevelt’s inauguration most banks were closed  Unemployment 25% and rising; economy paralyzed “let me assert my firm belief that the only thing we have to fear is fear itself”

4.  FDR’s advisers fell into 3 camps One favored the “New Nationalism” of TR One favored the “New Nationalism” of TR  Work with business to regulate wages, prices, production Second group blamed business for the depression Second group blamed business for the depression  Wanted government planners to run parts of economy Third group favored Wilson’s “New Freedom” Third group favored Wilson’s “New Freedom”  Wanted to break up large companies to enhance competition and regulate to ensure competition remained fair

5.  FDR’s first priority was to get an emergency banking bill through Congress Declared a national “bank holiday” Declared a national “bank holiday” Called Congress into special session on Mar 9 th Called Congress into special session on Mar 9 th Passed the Emergency Banking Relief Act in one day! Passed the Emergency Banking Relief Act in one day!  New law allowed Treasury Dept. to certify that banks were fiscally solvent prior to reopening  In his first “fireside chat” FDR let citizens know their money would be safe in American banks  When banks opened the next day deposits far outweighed withdrawals – the banking crisis was over!

6.  FDIC and SEC His advisers wanted further regulations on banks and on the stock market His advisers wanted further regulations on banks and on the stock market Securities Act of 1933 Securities Act of 1933  Ended manipulation of stock prices  Companies had to provide complete and truthful information to investors  Created Securities & Exchange Commission Glass-Steagall Act Glass-Steagall Act  Banks could not risk depositors money in stock market  Also created FDIC to insure money deposited in banks

7.  Mortgage and Debt Relief Many believed that paying off debt kept people from spending money Many believed that paying off debt kept people from spending money Others thought that fear of losing their homes kept people from spending money Others thought that fear of losing their homes kept people from spending money Home Owners Loan Corporation Home Owners Loan Corporation  Restructured mortgages with longer terms and lower rates  Covered a million mortgages in3 years  Didn’t help everyone – farmers and the unemployed who couldn’t make payments

8.  Mortgage and Debt Relief The Farm Credit Administration (FCA) The Farm Credit Administration (FCA)  Helped farmers refinance their mortgages  Pushed interest rates lower; saved many farms  FCA may have slowed the economy (money loaned to poor farmers wasn’t available for more efficient businesses)  But it did help impoverished people keep their land

9.  Agricultural Adjustment Act To correct overproduction, government would pay farmers not to raise certain livestock or certain crops To correct overproduction, government would pay farmers not to raise certain livestock or certain crops  Also asked not to produce dairy products  6 million piglets, 200,000 sows and 10 million acres of cotton were destroyed  Program was administered by the Agricultural Adjustment Administration (AAA)  Program worked – surplus dropped, prices rose  Higher farm prices not good news for everyone!  Small farmers often hurt by larger farms  Thousands of tenant farmers lost land when landlords took fields out of production

10.  The NRA National Industrial Recovery Act of 1933 National Industrial Recovery Act of 1933  Suspended anti-trust laws;  Allowed business, labor and government cooperation to set up new rules (codes) for each industry  Prices, minimum wages, limiting shifts to spread production over several firms, reduced workers hours  Allowed workers to unionize  National Recovery Administration (NRA) ran it all

11.  The NRA NRA revived some industries, but gains were short lived NRA revived some industries, but gains were short lived  Small companies complained that codes favored big companies  Employers still opposed unionization  They did not like paying minimum wages  Codes were difficult to administer and were optional  By the time the NRA was declared unconstitutional in 1935, it had lost much of its political support

12.  The Civilian Conservation Corps (CCC) Gave 18-25 year old men the chance to work for the forestry service planting trees Gave 18-25 year old men the chance to work for the forestry service planting trees  Planted 200 million trees in the Dust Bowl to prevent a recurrence  Earned $30 per month, $25 was sent home  Average CCC worker only worked a year  Went home better nourished and with greater self- respect  By the time it closed down in 1942, over 3 million had been given work, including 80,000 Native Americans and 250,000 veterans

13.  Federal Emergency Relief Administration (FERA) Established a few weeks after the CCC Established a few weeks after the CCC Channeled money to state and local agencies to fund relief projects Channeled money to state and local agencies to fund relief projects  The Public Works Administration (PWA) Built highways, dams, sewer systems, schools and other government facilities Built highways, dams, sewer systems, schools and other government facilities PWA didn’t hire directly, but awarded contracts to construction companies who hired workers PWA didn’t hire directly, but awarded contracts to construction companies who hired workers Insisted on non-discrimination breaking down racial barriers in the construction industry Insisted on non-discrimination breaking down racial barriers in the construction industry

14.  The CWA By the fall of 1933 FERA and CWA hadn’t reduced unemployment significantly By the fall of 1933 FERA and CWA hadn’t reduced unemployment significantly  To avoid the severe distress of another winter with very high unemployment FDR authorized the Civil Works Administration (CWA)  CWA hired directly  That winter it employed 4 million people including 300,000 women  The CWA built 1000 airports, 500,000 miles of roads, 40,000 school buildings

15.  The CWA  The CWA employed great numbers, but spent a lot of money  FDR not want Americans to become dependent on government jobs, shut the program down the next spring  Success of the First New Deal Amazing amount of legislation passed Amazing amount of legislation passed Did not restore prosperity, but showed FDR’s willingness to try any good idea to help Did not restore prosperity, but showed FDR’s willingness to try any good idea to help Banks reopened, people kept their homes and farms, and many were working Banks reopened, people kept their homes and farms, and many were working Most importantly FDR had restored American’s faith in their country Most importantly FDR had restored American’s faith in their country