roosevelt and the new deal

• victory in the 1932 election begain the longest presidency in the history of the usa
• he won 3 more elections in 1936, 1940 and 1944 before his death in 1945
• from 1933-1941 his main achievement was to carry through the domestic policies known as the new deal to cope with the crisis of the great depression
• from 1941 - 1945 he led the usa through to victory in ww2.
• at the beginning of 1933 - nobody knew how roosevelts presidency would work out or even what policies he would pursue
• 1928 - overcame serious disability because of the effects of polio
• roosevelt's beginning principles:

1. government intervention was urgently needed, the new administration would have to start with a bang

2. attitudes had to change, the people and the businesses had to be given hope and enthusiasm and persuaded to believe that the situation was not as desperate as it seemed

3. extreme socialist ideas should be rejected -business should be reformed and regulated, not torn apart

4. the usa would have to come off the gold standard

the transition from herbert hoover to franklin roosevelt

• november 1932 - roosevelt and the democrats won a decisive victory - also winning strong majorities in the house of representatives and the senate - he did not become president until the inauguration in march, 1933.
• in the meantime - awkward interregnum - a vacuum of power - at a time when urgent action was needed to deal with the economic crisis
• the outgoing president could not take any strong action - the incoming president did not want to do anything too soon
• hoover was keen to meet roosevelt to discuss what needed to be done
• a meeting took place but relations between the two were stiff with no real cooperation forthcoming
• hoover bombarded roosevelt with advice and policy suggestions but roosevelt was unwilling

• roosevelt did not want to be tarnished by hoover's image as a failure and preferred to save himself for a dramatic impact when his presidency began
• roosevelt was not yet sure what his policies would be
• opinions within the democratic party were divided and roosevelt was a politician who always avoided committing himself
• the 1930s in the usa was defined by the new deal
• roosevelt won the re-election in 1936 and again in 1940 as the new deal president - the leader who had rescued the country from the great depression and got the american people back to work

the success and opposition to the new deal

the 'hundred days'

• he planned on making a psychological impact as soon as possible to convince the american people that things were going to be different
• most important reason was the urgency of the banking crisis
• thousands of banks had failed in the weeks before
• roosevelt rushed into action, calling a special session of congress
• the emergency banking act - passed on 9th march - enforced a banking holiday that lasted 4 days
• the government and the federal reserve  were given the power to issue currency and organise the reopening of banks under strict supervision
• roosevelt gave his 'fireside chats' on radio, telling the people that their money would be safe in the banks - the tactics worked
• people started depositing money in the banks again, the long banking crisis was over and roosevelt was an instant hero
• this was the start of the hundred days - a rush of action designed to make the maximum impact in the shortest possible time

• in reality - roosevelt's policies were not as new or as radical as they seemed - many of them were policies that hoover had planned - like the banking holiday

The First New Deal

• the new deal had two broad aims
• the first was relief and recovery - helping victims of the depression and trying to get the economy going again
• the second was reform and refulation
• government departments known as alphabet agencies were set up to implement roosevelt's policies

alphabet agencies : relief and recovery

designed to channel subsidies to people in need, create work for the unemployed and stimulate economic recovery

• agricultural adjustment administration (AAA) 1993 - provided farmers with federal subsidies to compensate them for cutting back the production of basic commodities such as pork, wheat, cotton and dairy products. the AAA aimed to bring farm prices back up to profitable levels by eliminating the problem of overproduction
• civilian conservation corps (CCC) 1933 - provided work camps for young men working on conservation projects such as planting trees for windbreaks and improving national parks
• farm credit administration (FCA) 1933 - helped farmers to manage their debts by making loans available from federal funds to pay for seed, machinery and marketing
• federal emergency relief administration (FERA) 1933 - provided $500 million to State and local agencies that had run out of money so they they could keep making relief payments to the unemployed
• federal housing administration (FHA) 1934 - provided government funding to enable people to keep up their mortgage payments
• national industrial recovery act (NIRA) 1933 - promoted both recovery and reform by setting up the PWA and the NRA

• public works administration (PWA) 1933 - provided more than $3 billion for work-creation projects such as roads and electrification
• tennessee valley authority (TVA) 1934 - a huge federal government agency providing major conservation and regeneration schemes across the entire tennessee river valley, covering seven states. the TVA built dams to provide hydroelectric power, flood control, irrigation and allocated federal money to other social projects including education

alphabet agencies : reform and regulation

roosevelt's administration wanted to protect the rights of unions and workers, and to use government intervention to impose reforms on private companies - some people saw this as an attack on the capatilist system

• banking act - 1933 - regulated banking and credit, it insured all bank deposits up to $5,000

• beer-wine revenue act 1933 - legalised some mild alcoholic beverages and paved the way for the end of prohibition
• economy act 1933 - made a commitment to cut the federal budget
• emergency railroad transportation act 1934 - regulated the railroad companies
• federal communications commission (FCC) 1934 - set up the federal government regulation of radio and telegraph services
• national recovery administration (NRA) 1933 - encouraged voluntary support for businesses and the public, and aimed to improve cooperation between businesses and the government to stop price cutting, wage cuts and job losses. it regulated 'fair competition' to avoid too much competition with eachother and by slackening anti-trust laws. NRA code banned child labour and supported the rights of workers to organise trade unions. NRA used advertising campaigns to persuade people to buy from companies who had signed up to the code
• securities and exchange commission (SEC) 1934 - extended the powers under the banking act. it set up federal government regulation of trading in stocks and shares and strengthened the powers of the federal reserve. it was now illegal to buy stocks on credit

successes and failures of the first new deal

• successes - usa taken off the gold standard - financial markets became much more stable, protection of home owners and farmers by giving help to refinance their loans to make them easier to repay, many public work schemes provided much-needed employment rather than just giving relief payments, changed the national mood from hopelessness to optimism.
• failures - AAA never achieved what it hoped to - wheat production did fall but wasnt due to federal policies to cut overproduction but due to the drought, AAA had a terrible impact on rural poverty, especially in the south - sharecroppers there suffered and AAA made their problems worse by reducing the amount of land used to grow cotton, little direct action to help the african-american poor, roosevelt was afraid of antagonising southern politicians and business leaders who might have obstructed new deal policies overall

lessened the impact of the depression, did not bring real recovery in either industry or agriculture.

opposition to the first new deal

• strong majority in congress, did not need to worry about the republicans in congress
• a lot of success in changing the national mood and gaining popular support for the new deal
• roosevelt wanted to keep in with business leaders, bankers and the conservative elements in the democratic party.
• first new deal was full of compromises and disappointment at the limited results of the early new deal initiatives - led to opposition and protest from the left - from people who had originally supported the new deal
• roosevelt was not so good at raising hopes and expectations
• new deal was blamed for not doing enough - pressure on president to go further and faster
• opposition - farmers, labour unions and old-style progressives.
• oppostion - 1934 and 1935 - conservatives increasing. they gave support to the american liberty league - from financiers and business leaders who claimed that roosevelt was 'sovietising america' - a number of conservative judges past injunctions to block new deal measures

the second new deal

• pushed into second new deal - roosevelt's determination to override the obstructive decisions being made by the courts - when the supreme courrt ruled against the NIRA in 1935
• 1935 - america might face serious problems unless something was done to accelerate reform and recovery. new deal policies became more radical and took state intervention much further
• roosevelt was looking for new political coalition in 1935 - no longer concerned with building a consesus by making compromises
• the result was a second new deal and a second 'hundred days' starting in june, 1935
• roosevelt pushed through congress a wave of radical new reforms. he took on the banking system and then the public utility companies, he taxed the rich, he vastly expanded relief schemes through the WPA
• he brought in federal social security benefits, he reformed labour relations through the wagner act. many of these measures caused protests, but all were passed. roosevelt won the 1936 election.

• second new deal was taken further in 1937-8 by legislation that helped farmers keep more secure possession of their farms, helped poorer pepole with housing and gave industrial workers a minimum wage and a 40 hour working week
• between 1935 and 1938 - the second new deal made a massive impact on the usa
• nevertheless the ultimate aim of economic recovery was not achieved and roosevelt faced a dangerous backlash from the conservatives

successes and failures of the second new deal

• successes - long term: labour rights and industrial relations were much improved by government intervention and membership of trade unions more than doubled between 1935 and 1940. lasting improvements to infrastructure such as rural electrification - there was no real economic recovery and the economic situation went backwards bettwen 1937 and 1939
• failures - unemployment went up to 10 million in 1938. the situation facing farmers was still desperate. drought years came to an end in 1938 but there was no stopping the long-term decline of agriculture. roosevelt made the mistake of provoking dicisions and opposition, especially from the supreme court.

opposition to the second new deal

• even before 1936, roosevelt was already in conflict with the courts.
• several lefal decisions had gone against the new deal legislation before
• 1935 - supreme court struck down the form mortgage act and ruled that aspects of the national recovery administration were unconstitutional. supreme court contained several conservative justices appointed in the republican-dominated 1920s
• after his election victory - roosevelt decided to make a direct attack against the powers of the supreme court
• 1937 - announced plans for new laws allowing him to appoint up to 6 additional judges to the supreme court
• this bill caused outrage amongst the republicans and conservative newspapers
• more economy trouble - 1937-8 - increased opposition to him from people who blamed him for the 'roosevelt recesson'
• mounting pressure from isolationists - over foreign policy issues

impact of the new deal by 1941

• great depression didnt end until the mobilisation of the american economy for war
• in 1939-40 industry was boosted by the needs of britain's war effort and because the usa committed itself to rapid rearmament
• from december 1941 - direct involvement in the war brought full employment and maximum industrial production - the beneficial effects of this lasted beyond the end of the war in 1945 - raises questions about the effectiveness of the new deal before the war
• many people attacked roosevelt for increasing state intervention