Topic 2.3 - Roosevelt and the first New Deal 1933-35 Flashcards
(90 cards)
1
Q
- Following Roosevelts inauguration, what did he call for?
- What did it result in?
- What have historians categorised the measures into?
A
- He called Congress into a special session which was to last for 100 days and saw the development of the First New Deal.
- Resulted in a considerable amount of emergency legislation and the setting up of many ‘alphabet agencies’
- Relief, recovery, reform.
2
Q
- What was the aim of the legislation of 100 days?
- How were agricultural problems tackled?
- How was the banking system reformed?
- How was industry helped?
A
- Largely to restore faith in the US economy.
- Agricultural Adjustment Act.
- Banking system- Emergency Banking Relief and Glass-Steagall Acts.
- Industry- National Industry Recovery Act.
3
Q
The 100 days
What was Roosevelts priority?
What was this to ensure?
A
- Priority was to create economic improvement, which he attempted not merely through measures to effect recovery but to improve the infrastructure- e.g. banking and finance.
- Was to ensure that the system would be modern and sophisticated enough to promote and stimulate a modern economy and if necessary, able to address any downturn in the future.
4
Q
What was Roosevelts personality like and how did he use this to his advantage?
What helped to restore confidence and make people feel recovery was on the way?
A
- He was very charismatic and used his persoanlity to great effect.
- He spoke directly to the electorate via the radio and in his ‘fireside chats’ in which he explained his policies.
His reassuring voice!!
5
Q
Agricultural recovery was given a higher priority than what recovery?
A
Industrial recovery!
6
Q
Why was agricultural recovery a higher priority than industrial recovery?
A
- 30% of the labour workforce worked in Agriculture.
- If agricultural workers could afford to buy more, industry would be stimulated.
- If agriculture became more profitable, there would be a reduction in farms being repossessed by banks.
7
Q
In the long run, what was the aim of agricultural policies?
How would this be achieved?
A
To make farming more efficient by ending overproduction.
- Done by taking the most uneconomic land out of production so less would be produced- thereby raising prices.
- Agricultural workers who may have been displaced by this process would move to other jobs- perhaps in more urban areas- which would be created by other New Deal measures.
8
Q
When was the Agricultural Adjustment Act?
A
May 1933
9
Q
The Agricultural Adjustement Act, May 1933
What had been the greatest problem of American Agriculture?
What had not previosuly addressed this problem?
A
OVERPRODUCTION!
Neither the McNary-Haugen proposals of the 1920s nor Hoovers Federal Farm Board.
10
Q
The Agricultural Adjustement Act, May 1933
- What had industrial production declined by in the years (1929-1933)?
- What had agriculture fallen by?
A
Industrial production- Declined by 42%.
Agriculture- fallen only by 6%.
11
Q
What was the main principle behind the Agricultural Adjustment Act?
A
- The government would subsidise farmers to reduce their acreage and production voluntarily.
- By producing less- the price of food would increase, and so would farmers incomes!
12
Q
The Agricultural Adjustement Act, May 1933
What was the new agency set up called?
A
The Agricultural Adjustment Administration (AAA)
13
Q
What would the Agricultural Adjustment Administration do?
How was the programme to be financed?
A
- Pay farmers to reduce their production of ‘staple’ items, initially corn, cotton, milk, pork, rice, tobacco and wheat.
- It was to be self-financing through a tax placed on companies that processed food. It was assumed that these companies in turn would pass on the increased cost to the consumer.
14
Q
The Agricultural Adjustement Act, May 1933
The reduction of what was the most pressing need?
A
Reduction of cotton!
15
Q
The Agricultural Adjustement Act, May 1933
- At the beginning of 1933, unsold cotton in the USA exceeded what?
- How many acres had farmers planted more than in 1932?
- What did they need to do to much of this?
A
- Exceeded the total average annual world consumption of American cotton.
- 400,000 acres!
- They were simply paid to destroy much of this!
16
Q
The Agricultural Adjustement Act, May 1933
How many acres of cotton were ploughed under?
A
10.5 million acres!
17
Q
The Agricultural Adjustement Act, May 1933
What happened to the price of cotton from 1932- 1933?
A
It rose from 6.5 cents per pound in (1932) to 10 cents per pound in (1933.)
18
Q
The Agricultural Adjustement Act, May 1933
Why was it so contentious to destroy food?
How many piglets were bought and slaughtered?
A
So many Americans were hungry!
6 Million!! ;((
19
Q
The Agricultural Adjustement Act, May 1933
What did the AAA only destroy?
A
Cotton and piglets!
20
Q
The Agricultural Adjustement Act, May 1933
What did the drought do to the 1933 wheat crop?
What agreements were reached?
A
It helped to make it the poorest since 1896.
Agreements were reached to limit acreage in other crops in subsequent years.
21
Q
The Agricultural Adjustement Act, May 1933
What did farm income rise from and to between 1932-1935?
A
Rose from $4.5 billion (1932) to $6.9 billion (1935).
22
Q
The Agricultural Adjustement Act, May 1933
Who was the Act very popular with, give an example!
A
It was very popular with farmers. The percentage of farmers signing up for AAA agreements was high at first, 95% of tobacco growers.
23
Q
The Agricultural Adjustement Act, May 1933
Faced by drought, what did western ranchers sought to bring under the protection of the AAA in 1934?
By January 1935 what had the government purchased and what did the ranchers have to do in return?
A
Beef cattle!
Purchased 8.3 million head of cattle, in return for ranchers to reduce breeding cows by 20% in 1937.
24
Q
The Tennessee Valley Authority, May 1933
What was the problem the Tennessee Valley Authority was set up to deal with in the Tennessee Valley?
A
Deal with the underdevelopment and poverty!
25
**The Tennessee Valley Authority, May 1933**
It was created to harness the power of what?
What did it hope by doing so?
* Harness the power of the River Tennessee, which ran through **7** of the **poorest states** in the USA.
* It hoped by doing so, this region of **80,000 square miles** with a **population of 2 million people** would become more prosperous.
26
**The Tennessee Valley Authority, May 1933**
What major tasks did the TVA have?
(6)
* To construct **20 huge dams** to control the floods that periodically affected the region.
* To develop **ecological schemes** such as tree planting to stop soil erosion.
* To encourage farmers to use **more efficient means of cultivation** such as contour ploughing.
* To **provide jobs** by setting up fertiliser manufacture factories.
* To develop **welfare and educational programmes**.
* Most significantly- to **produce hydro-electric power** for an area whose existing supplies of electricity were limtied to two out of every 100 farms.
27
**The Tennessee Valley Authority, May 1933**
What did TVA effectively become and what was it largely responsible for?
* Became a **central planning authority** for the region.
* Responsible for the **modernisation** and **improved living standards** that saw its residents **increase** their **average income** by **200%** in the period from **1929- 1949.**
28
**Banking and finance**
By 1932, banks were closing at a rate of what per day?
**40** per day!
29
**Banking and finance**
In **October 1932**, what did the Governor of Nevada do and why?
What had happened by the time of **Roosevelts inauguration?**
* He declared a **bank holiday** and **closed every bank in the state**- fearing the **imminent collapse** of an **important banking chain.**
* **Banks** were **closed** in many states!
30
**The Emergency Banking Relief Act**
On March 6th 1933, what did Roosevelt do?
He closed all the banks in the country for four days to give Treasury officials time to draft emergency legislation.
31
**The Emergency Banking Relief Act**
* What was the **aim** of it?
* What did it give the **Treasury power to investigate**?
* To **restore confidence** in the **American banking system.**
* Gave them power to **investigate all banks threatened with collapse!**
32
**The Emergency Banking Relief Act**
What were the Reconstruction Finance Corporation authorised to do and what happened as a result?
* They were authorised to buy their stock to support them and to take on many of their debts.
* In doing so, the RFC became in effect the largest bank in the world!
33
**The Emergency Banking Relief Act**
What did Roosevelt do on the radio with the first of his fireside chats?
What was his message?
Did it work? What happened as a result?
* He explained to listeners, in a language they could all understand, the nature of the crisis and how they could help.
* Message- place your money in the bank rather than under your mattress.
* **Yes it worked!** Solvent banks - allowed to reopen, others were reorganised by government officials to put them on a sounder footing. By the **beginning** of **April**, **$1 billion in currency** had been returned to bank deposits and the crisis was over!
34
**The Emergency Banking Relief Act**
By the beginning of April, how much in currency had been returned to banks deposits ?
$1 billion!!!
35
What **effects** did the **Glass-Steagall Act** have?
(4)
* **Commercial banks** that relied on **small-scale depositors** were banned from involvement in the type of investment banking that had fuelled some of the 1920s speculation.
* **Bank officials** were **not** allowed to take **personal loans** from their own banks.
* **Authority over open-market operations** such as **buying** and **selling** government securities was **centralised** by being transferred from the **Federal Reserve Banks** to the **Federal Reserve Board** in Washington.
* Individual bank deposits were to be insured against bank failure up to the figure of **$2,500** with the insurance fund to be administered by a new agency, the **Federal Deposit Insurance Corporation (FDIC).**
36
**Regulation of the stock exchange**
What did The **Truth-in-Securities Act, 1933** require?
Required **brokers** to offer clients **realistic information** about the **securities** they were selling.
37
**Regulation of the stock exchange**
What did **The Securities Act, 1934,** set up?
What was its task?
* Set up a new agency, the **Securities Exchange Commission (SEC).**
* Task- to **oversee stock market activities** and prevent **fraudulent activities** such as **insider dealing**, as in the bull pool.
38
**Economics in government**
What was Roosevelt in terms of financial matters and what did he believe strongly in?
Care was taken to distinguish....
* **Conservative** in financial matters.
* Believed strongly in a **balanced budget.**
...distinguish between the budget for **normal government business** and that for **emergency relief** to deal with the Depression.
39
**Economics in government**
What did he expect the **budget for normal business** to do?
What did he ***sought*** to make all his **recovery programmes?**
* Balance!
* **Self- financing** and often they began with **loans** rather than **grants**. It was hoped that as **money began to made** from the programmes, these **loans would be repaid.**
40
**Economics in government- The Economy Act, 1933**
What did it do to government salaries and pensions?
What did Hoover refuse to give the veterans?
It **slashed government salaries** and **cut ex-soldiers pensions.**
Refused to give them their **bonus**!
41
**Economics in government**
What happened when a second 'Bonus army' arrived in Washington?
* Roosevelt **greeted them** with refreshments and entertainment.
* His wife was sent to charm them without giving in to any of their demands.
* As a result of the charm offensive, they **departed peacefully.**
42
**Industrial recovery**
How much did the **economy grow by** during Roosevelts first term (1933-1936)?
What happened to **output**?
* Grew by **10%.**
* Output had fallen so low since 1929 that this still left unemployment at **14%**.
43
**Industrial recovery**
What was the problem?
There was **no consensus** on how to go about ensuring industrial recovery.
44
**Industrial recovery**
What did some businessmen support and want?
Roosevelt was in the business of saving what?
* Supported policies of 'laissez faire'.
* Others wanted massive government intervention.
* Some felt competition should be ended- whereas others believed it to be the keynote to recovery.
**Saving** the **American system of Capitalism**- not replacing it!
45
**Industrial Recovery**
* What did Roosevelt want to achieve and why did he need to act under pressure?
* Why Did he oppose that scheme?
* What did he replace it with?
* Primary aims- get people back to work and to increase consumer demand.
* Congress- about to pass a measure to **restrict the working week** to 30 hours- with the hope of sharing out the existing jobs.
* Opposed scheme- he feared that rather than raise the overall purchasing power-it would simply share out what already existed.
* Replaced it with **National Industry Recovery Act (NIRA) of June 1933.**
46
**Industrial Recovery**
When was the **National Industry Recovery Act-** put in place?
June 1933
47
**Industrial Recovery**
What ***two parts*** did the National Industry Recovery Act - June 1933 come in?
* the National Recovery Administration (NRA)
* the Public Works Administration (PWA)
48
**The National Recovery Administration**
Why was it set up?
What did it offer?
What was the argument behind this?
What were firms encouraged to do?
* Set up- oversee **industrial recovery.**
* It offered something- all parts of industry- (powerful business men benefitted from the suspension of antitrust legislation for 2 years.)
* Argument- if industrial expansion=promoted- its crazy to maintain laws that restrict it.
* Firms- encouraged -**agree to codes of practise** to **regulate unfair competition** *(price cutting)* & agree on matters e.g. **working conditions** and **minimum wages** in their industry.
49
**Problems with the codes**
What were the problems with most of the operations of the NRA?
Why was this?
Give an example of what large business didn't subscribe to them?
* Many codes turned out to be **unworkable**.
* They were **adopted so quickly**, often **without** proper **thought/ planning** and often because they were contientous.
* Henry Ford didn't- however small businesses complained that they favoured big businesses.
50
**Problems with the codes**
What firms found it difficult to comply with all the regulations?
Give an example of which one and why?
* Small firms!
* **Minimum wage clauses**- it hoped that the firms signing the codes would introduce a **minimum wage of $11 for a 40-hour week**. Few small firms could afford this.
51
**Problems with the codes**
What did Congress set up in March 1934 and what did they investigate?
What were the findings?
**National Recovery Review Board**- investigate whether small firms were disadvantaged by the codes.
* Reported at **severe disadvantage.**
* Codes- **favoured large companies-** take **advantage** of them to **restrict competition** and **increase their profits**.
* E.g. could work together - draw up codes in which agreed to **raise prices &** keep wages low.
* Some agreed to limit output to raise prices & could afford to cut back on their workforce or pay lower wages.
52
**Problems with the codes**
Did the codes help economic recovery?
Who were the codes largely drawn up by?
What did it lead Johnson to do?
Did **not help economic recovery!**
* Representatives- big businesses- often with assistance of inexperienced White House officials.
* Johnson **"Buy Now" campaign, October 1933**- encourage spending- to stimulate production.
* Advocated **10% wage increase** & **10 hour cut -working week**- neither= successful!
53
Problems with the codes
What was the reality of the codes?
* Reality- NRA codes looked impressive- could not bring about an economic recovery.
* Critics argued- in practise, did little except give large firms, opportunity to indulge in unfair prices- the opposite of what had been intended.
54
**The Public Works Administration**
Who was it headed by?
What was it funded with and what was its purpose?
Secretary of the interior, **Harold Ickes.**
Funded with **$3.3 billion**- purpose was 'pump priming'.
55
**The Public Works Administration**
What did it hope to do/achieve?
* Hoped the expenditure on public works such as **roads, dams, hospitals** and **schools** would **stimulate the economy.**
* Road building- lead to increased demand for e.g. concrete- lead to the concrete companies employing more workers- then have more money to spend etc...
56
**The Public Works Administration**
What did it achieve?
How many schools and miles of roads were built?
PWA- Put hundreds of thousands of people to work, building nearly **13,000 schools** and **50,000 miles of roads.**
Pumped billions of dollars into economy, was responsible for massive public works schemes- particularly West- enabled dams to be built to help irrigate former semi-desert land, electricity to be produced and four vast National Parks to be created.
57
**The Civil Works Administration**
When was it created?
November 1933
58
***The Civil Works Administration***
* It was set up with a **grant** of **how much** from the PWA?
* What was it meant to **provide**?
* **How many** people did it put to work?
* **When** did it close down?
* **$400 million** grant.
* Provide **emergency relief** to the **unemployed** during the hard **winter** of **1933-34.**
* It put **4 million people** to work on public works projects.
* Closed- **March** when the winter was over. However the FERA agreed to fund more public works projects itself.
59
**The Federal Emergency Relief Act, May 1933**
* What administration did the Act establish?
* How much was it given and how was it to be shared?
* How much would the government pay each state for every $3 it spent on relief?
**Federal Emergency Relief Administration (FERA).**
* **$500 million**- **divided equally** among **states** - help provide for **unemployed**.
* **Half money** to be **granted to states** for **outright relief**- remainder- gov would pay each state **$1** for every **$3** it spent on relief.
60
**The Federal Emergency Relief Act, May 1933**
* Who did Roosevelt choose to run this programme?
* What did the Act say that each state should set up and organise?
* How would it raise money?
* **Harry Hopkins.**
* Set up a **FERA office** and organise **relief programmes**.
* Raise money through borrowing, tax rises or any other means.
61
**The Federal Emergency Relief Act, May 1933**
* What were many states attitude to the idea of a balanced budget?
* What idea was still very relevent?
* How were those requiring relief treated?
* Wedded to idea of a **balanced budget.**
* Found expenditure on relief- distasteful.
* Felt by many- being poor- **own fault.**
* Treated abominably!
62
**The Federal Emergency Relief Act, May 1933**
How were those requring relief often treated?
Give an example(s)...
* One FERA Worker reported- Pheonix, Arizona- over **100 claimants**- jammed into **small room**- temps over **100 degrees**.
* Many places- interminable **waits** and **delays.**
* Hostile policemen- often guarded long queues of claimants- while uncaring officials completed endless forms.
* Usually long delays before any relief given.
63
**Federal Emergency Relief Act, May 1933**
In 1935- how much was it paying per month to an average family on relief?
What was this compared to the average monthly minimum wage for subsistence?
**$25** per month.
Estimated at **$100** per month.
64
**The Civilian Conservation Corps, 1933**
What was a huge problem for young people and what did Roosevelt think needed to be put in place to tackle this?
* Unemployment!
* Special programme- afford them **experience of work**, useful **training in community service**, **co-operation** & other **skills essential to growth** as useful citizens.
65
**The Civilian Conservation Corps, 1933**
Unemployed men between the ages of 17& 24 (later 28) were recruited by what and where did they go?
* Recruited by **Department of Labor.**
* Work in **Civilian Conservation Corps** (CCC).
* In national forests, parks and public lands.
66
**The Civilian Conservation Corps, 1933**
How were the corps organised?
Who were the tasks set out by?
How long was it originally set up for and did this change?
* Organised along **military lines**.
* Tasks- **Departments of the Interior and Agriculture.**
* Originally **2 years**- congress extended it for a **further 7 in 1935.**
67
**The Civilian Conservation Corps, 1933**
* In the period of its life, what did it achieve?
* Why was it good for young men?
* Installed **65,100 miles of telephone line** in inaccessible areas.
* Spent **4.1 million man-hours** fighting forest fires - planted **1.3 billion** trees.
* Gave young men new self respect- valuable experience of comradeship in life and the 'great outdoors'.
68
**The Indian Reorganisation Act**
When was this introduced?
What was the purpose of it?
1934.
* Reorganised & encouraged Native American culture.
* Tribes- reorganised into self- governing bodies- could vote to adopt constitutions and have own police & legal systems.
* Could control land sales on the reservations- while new tribal corporations- established- to manage tribal resources.
69
**The Indian Reorganisation Act**
What were peoples reactions to government policy of reorganising Native American culture?
What was collier accused of and what were peoples reactions?
Collier-accused of encouraging Native Americans to ' go back to the blanket'.
Many felt- return to tribal traditions = backward move.
70
**The Indian Reorganisation Act**
What did collier do his best to do and what did he achieve?
* Ensure Native Americans - take advantage of New Deal agencies e.g. CCC & PWA- although scale of poverty = relief agencies could afford- limited
* Work- importance- affording new respect for Native American culture.
71
What **two measures** did the **government introduce** to try to help the **housing issue**?
* The Home Owners Refinancing Corporation (HORC) ~ June 1933.
* The Federal Housing Administration (FHA)
72
**The Home Owners Refinancing Corporation - June 1933**
What was this agency set up to do?
Helped **homeowners in difficulties**- by offering **new mortgages** at **low rates of interest** over long periods.
73
**The Federal Housing Administration**
When was this established?
What was it set out to offer?
Established- June 1934.
* Offer federal insurance to protect the ability to repay low-interest, long-term mortgages taken out by those buying new homes.
74
**The Federal Housing Administration**
What was it clearly an attempt to do?
However what were the loans solely for & what couldn't they be used for?
* Attempt- **stimulate** the **building industry.**
* Loans- solely for **newly purchased single- family homes.**
* Not used- **renovate existing properties** or for buildings set out as apartments where several people lived.
75
**The Federal Housing Administration**
* Who didn't the act help?
* What percentage of urban families couldn't afford to take out a mortgage on them & why?
* Who did the Act mainly benefit?
* What did inner cities tend to be?
* Nothing to help **poverty stricken inner cities**.
* **25%** of families- due to **65%** new houses costing over **$4000.**
* Benefitted **white, middle class** families.
* Inner cities- **run down** & left to **poorer ethnic minorities**- forced to rent squalid properties.
76
**Overview**
* Why did the New Deal attract opposition from the political right?
* Why from the political left?
Right (Republicans) - it was too radical!
Left (Democrats) - Was not radical enough!
77
**The Right**
Who had supported Roosevelt in the darkest days of the Depression and why?
Why had they now turned against him?
What was the Republican Party still associated with and what were they finding it difficult to field?
* Many of the wealthy- in favour of **Capitalism.**
* Increases in taxes fell heavily upon them.
* Tended to oppose what they percieved as too much government involvement- in economy.
* Associated- failures during the early 1930s, was rebuilding and preparing for the 1936 election- but finding it difficult to field a strong candidate.
78
**The Left**
Why was Roosevelt more concerned about threats from the left?
What did the threats vary from?
* **Left-wing** groups might join together to form **third party** to **challenge** him in next presidential election.
* Varied from those **advocating radical schemes e.g. Old Age Revolving Pensions**, Inc. to popular leaders - **Huey Long** and **Father Charles Coughlin**.
79
**Liberty Leaguers**
* When was the Liberty League organised?
* Who by and what did it promote?
* What did they do to Roosevelt throughout the New Deal Years?
* By July 1936, how many members did it have?
* **April 1934.**
* Conservative Democrats & Republicans- promote **private property** and **private enterprise** unregulated by law.
* Attacked him and formed basis of right- wing opposition to him.
* 125,000 members.
80
**End poverty in California (EPIC)**
What scheme did novelist Upton Sinclair come up with?
What were peoples response to his ideas?
* Scheme- unemployed put to work in state-run co-operatives.
* Paid in currency- with could only spend in other co-operatives.
* Ideas- gained credibility and proved useful recruits for more serious alternative movements.
81
Who came up with the idea of 'Share our wealth' and when was this introduced?
February 1934
Senator **Huey Long**, from Louisiana.
82
***'Share Our Wealth'***
What did it advocate and include?
* Advocate- all private fortunes over **$3 million** should be **confiscated.**
* Every family should be given enough money to buy a **house, a car & radio.**
* Should be **old age pensions.**
* **Minimum wages**- so every family guaranteed **$2000-3000 per year.**
* **Free college education**- for all suitable candidates.
83
What were peoples responses to Longs 'Share Our Wealth' ?
What happened to memberships of clubs?
* Longs ideas= very popular!
* **Clubs** grew to around **27,500** with **4.6 million** members **spread across the states.**
84
**Huey Long Background info**
Who was he?
What had he ordered between 1928-1933?
How did he govern and how were opponents treated?
* Governor of Louisiana.
* Ordered massive public works programmes- over 3000 miles of paved highways were built, new public buildings, airport- New Orleans and adult literacy schemes.
* Governed as dictator- opponents treated brutally by his bully boys.
85
Old Age Revolving Pensions
Who was Francis Townsend and what did he want to achieve?
* Retired doctor- advocated old-age pensions with a difference.
* Everyone over 60 who was not in paid employment should be given $200 per month- on understanding that every cent was spent & none saved.
86
Old Age Revolving Pensions
What was the idea behind Francis Townsends scheme?
How many members did Townsend clubs recieve?
* **Boost consumption** & thereby **production**- so pull USA out of Depression!
* Encouraging people to retire at **60** would provide **more jobs** for the **young.**
* Clubs had **500,000 members** and Congress was lobbied to put plan into operation.
87
**Old Age Revolving Pensions**
Was it practical/ impractical and why?
**Impractical!**
* **Payments to recipients** would have amounted to **50% of national income** & army of bureaucrats ( an official in gov) would have been necessary to ensure pensioners were spending their **$200.**
88
**Father Charles Coughlin**
Who was he and what did he do?
Was he influential or not, how many listners did he get?
What did he found in 1934 & what was its aim?
* **Priest.**
* Radio Programme- ***"The Golden Hour of the Little Flower"*** = enormously influential, first half of 1930s.
* Regularly commanded audience of **30-40 million people.**
* 1934- Founded the **National Union for Social Justice**- aim of monetary reform and redistribution of wealth.
89
Who became worried of Coughlins influence and why?
What happened however and how did his support change?
**Roosevelt.**
* Afraid- there was a **possible alliance** with **Huey Long.**
HOWEVER
* **Long = assassinated** and **Coughlin** became increasingly **anti- Semitic**, blaming Jews for New Deal & control of Wall Street. This lost him support!!
90
The Impact of the Opposition
What was the influence behind Roosevelts Second New Deal?
Demands of radical politicians.
Increasing opposition of big businesses to his measures.
