The New Deal
Hoover's Policies
- Hawley-Smoot Tariff (1930): In June 1930, the president signed into law schedule of tariff rates that was the highest in history. The Hawley-Smoot tariff passed by the Republican Congress set tax increases ranging from 31 percent to 49 percent on foreign imports. Its political purpose was to satisfy U.S. business leader who thought a higher tariff would protect their markets from foreign competition. In retaliation of the U.S. tariff however, European countries enacted higher tariffs of their own against U.S. goods. The effect was to reduce trade for all nations, meaning that both the national and international economies sank further into depression.
- Federal Farm Board: This board was authorized to help farmers stabilize prices by temporarily holding surplus grain and cotton in storage. The program however, was too much too modest to handle the continued overproduction of farm goods.
- Unrest on the farms: In many communities farmers banded together to stop banks from foreclosing on their farms and evicting them from their homes. Farmers in the Midwest formed the farm Holiday Association, which attempted to reverse the drop in prices by stopping the entire crop of grain harvested in 1932 from reaching the market. The effort collapsed after some violence.
- Bonus March: A thousand underemployed World War I veterans marched to Washington D. C. to demand immediate payment of the bonuses promised them at a later date. They were eventually joined by thousands of other veterans who brought their wives and children and camped in impoverished shacks near the Capital. Hover ordered the army to break up the encampment. General Douglas MacArthur, the army's chief of staff used tanks and tear gas to destroy the shantytown and drive the veterans form Washington.
- The three R's: Stand for relief, recovery, and reform, Roosevelt's programs to help the people
- The First Hundred Days: With the nation desperate and close to the brink of panic, the Democratic Congress looked to the new president for leadership, which Roosevelt was eager to provide. Immediately after being sworn into office on March 4, 1933, Roosevelt called Congress into a hundred-day-long special session. during this brief period, Congress passed into law every request of President Roosevelt including
- Bank Holiday: To restore confidence in the banks that were still solvent, the president ordered banks closed for a bank holiday on March 6, 1933.
- Repeal of Prohibition: The new president kept a campaign promise to enact repeal of prohibition and also raised needed tax money by having Congress pass the Beer-Wine Revenue Act, which legalized the sale of beer and wine. Later in 1933, the ratification of the Twenty-first Amendment repealed the Eighteenth Amendment bringing Prohibition to an end.
- Fireside Chats: Roosevelt went on the radio on March 12, 1933, to present the first of many fireside chats to the American people. He assured his listeners that the banks which reopened after the bank holiday were now safe. The public responded by depositing their money in the re-opened banks
- FDIC: The Federal Deposit Insurance Corporation guaranteed individual bank deposits up to $5,000
- FERA: The Federal Emergency relief administration which offered outright grants of federal money to states and local governments that were operating soup kitchens and other forms of relief for the jobless and homeless. The director was Harry Hopkins.
- PWA: Public Works Administration direct by Secretary of Interior Harold Ickes, allotted money to state ad local government for building roads, bridges, dams, and other public works.
- CCC: The Civilian Conservation Corps employed young men on projects on federal lands and paid their families small monthly sums.
- TVA: The Tennessee Valley Authority was a huge experiment in regional development and public planning. As a government corporation it hired thousands of people in one of the nation's poorest regions, the Tennessee Valley, to build dams, operate electric power plants, control flooding and erosion and manufacture fertilizer.
- NRA: The National Recovery administration directed by Hugh Johnson, the NRA was an attempt to guarantee reasonable profits for business and fair wages and hours of labor. With the antitrust laws temporarily suspended the NRA could help each industry set codes for wages, hours of work, levels of production, and prices of finished goods. The law creating the NRA also gave workers the right to organize and bargain collectively. The complex program operated with limited success for two years before the Supreme Court declared the NRA unconstitutional, (Schecter v. U.S.)
- AAA: The Agricultural Adjustment administration encourage farmers to reduce production and thereby boost prices by offering to pay government subsidies for every acre they plowed under. The AAA met the same fate as the NRA. it was declared unconstitutional in a 1935 Supreme Court decision.
- CWA: The Civil Works Administration which was added to the PWA and other New Deal programs for creating jobs. This agency hired laborers for temporary construction projects sponsored by the federal government.
- SEC: The Securities and exchange Commission was created to regulate the stock market and to place strict limits on the kind of speculative practices that had led to the Wall Street crash in 1929
- Relief Programs:
- WPA: The Works Progress Administration much larger than the relief agencies of the first New deal. It employed 3.4 million men and women who had formerly been on the relief rolls of state and local governments. It paid them double to the relief rate but less than the going wage for regular workers.
- National Labor Relations (Wagner) Act 1935: This major labor law of 1935 replaced the labor previsions of the National Industrial Recovery act after that law was declared unconstitutional. the Wagner act guaranteed a worker's right to join a union and a union's right to bargain collectively. it also outlawed business practices that were unfair to labor. A new agency, the National Labor Relations Board, (NLRB) was empowered to enforce the law and made sure that workers' rights were protected
- It created a federal insurance program based upon the automatic collection of taxes from employees and employers throughout people's working careers
- The Social Security trust fund would then be used to make monthly payments to retired persons over the age of 65.
- Also receiving benefits under this new law were workers who lost their jobs , persons who were blind or otherwise disabled and dependent children and their mothers.
- Liberal Critics: Socialists and extreme liberals in the democratic party criticized the New Deal for doing too much for business and too little for the unemployed and the working poor.
- Conservative Critics: more numerous were those on the right who attacked the New Deal for giving the federal government too much power. These critics charged that relief programs such as the WPA and labor laws such as the Wagner Act bordered on socialism and or even communism.
- Father Charles E. Coughlin: Was an Catholic priest attracted a huge popular following in tech early 1930s through his weekly radio broadcasts. His attacks on the New Deal became increasingly anti-Semitic and Fascist until his superiors in the Catholic Church ordered him to stop his broadcasts.
- Dr. Francis E. Townsend: As a retired physician from Long Beach, California who became an instant hero to millions of senior citizens by proposing a simple plan for guaranteeing a secure income. Dr. Francis E. Townsend proposed that a 2 percent federal sales tax be used to create a special fund, from which every retired person over 60 years old who'll receive $200 a month. by spending their money promptly Townsend argued, recipients would stimulate the economy and soon bring the depression to an end. This plan became the Social Security system.
- Huey Long: The most dangerous of the depressions demagogues who became a prominent national figure by proposing a "Share Our Wealth" program that promised a minimum annual income of $5,000 for every american family, to be paid for by taxing the wealthy. In 1935, Huey Long challenged Roosevelt's leadership of Democratic party by announcing his candidacy for president but was assassinated not long after.
- Of all the challenges to Roosevelt's leadership in his first term in office, the conservative decisions of the U.S. Supreme court proved the most frustrating
- In two cases in 1935, the supreme Court effectively killed both the NRA for business recovery and the AAA for agricultural recovery by deciding that the laws creating them were unconstitutional
- Roosevelt interpreted his landslide reelection in 1936 as a popular mandate to end the obstacles posed by the court
- he proposed a "Court-packing" bill which proposed that the president be authorized to appoint to the Supreme Court an additional justice for each current justice who was older than a certain age (70.5 years)
- Republicans and many Democrats were outraged by this law and while Roosevelt was trying to "pack the court", the justices were already backing of their former resistance to his program
- A group of unions within the AFL wanted union membership to be extended to all workers in an industry regardless of their race and sex, including those who were unskilled
- In 1935, the industrial unions joined together as the Committee of Industrial Organization (C.I.O.)
- their leader was John L. Lewis
- Renamed the Congress of Industrial Organizations, the CI.O. broke away form the AFL and became its chief rival
- It concentrated on organizing unskilled workers in the automobile, steel,and southern textile industries
- From 1933 to 1937 the economy showed signs of gradually pulling out of its nosedive
- In the winter of 1937, however, the economy once again had a backward slide and entered into a recessionary period
- Causes: Government policy was at least partly to blame. the new Social Security tax reduced consumer spending at the same time that Roosevelt was curtailing expenditures for relief and public works
- Keynesian economics: the writings of the British economist John Maynard Keynes taught Roosevelt that he had made a mistake in attempting to balance the budget. According to Keynesian theory, deficit spending was acceptable because in difficult times the government needed to spend well above its tax revenues in order to initiate economic growth. As federal spending on public works and relief went up so too did employment and industrial production
- An executive order in 1941 set up a committee to assist minorities in gaining jobs in defense industries
- President Roosevelt took this action only after A. Philip Randolph, head of the Railroad Porters Union, threatened a march on Washington to demand equal job opportunities for African Americans
- John Collier, appointed commissioner of the Bureau of Indian Affairs succeeded in winning Roosevelt's support for a major change in policy.
- The Dawes Act of 1887, which had encouraged Native Americans to be independent farmers, as repealed in 1934 with the passage of the Indian Reorganization act
- This measure returned lands to the control of tribes and supported the preservation of Native American cultures
- Despite this major reform, critics later accused the New Deal of being paternalistic and withholding control form Native Americans