The Great Depression (1929–1939) for AP U.S. History (page 3)

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Updated on Mar 3, 2011

The First Hundred Days

Franklin Roosevelt's inauguration speech in 1933 was one of optimism; the most quoted line of this speech is "… so first of all let me assert my firm belief that the only thing we have to fear is fear itself." Within a week of taking office, Roosevelt gave the first of his many fireside chats. During these radio addresses, Roosevelt spoke to the listening audience as if they were part of his family; Roosevelt would usually explain the immediate problems facing the country in these speeches and outline the reasons for his decided solution.

Roosevelt surrounded himself with an able cabinet, as well as a group of unofficial advisors called Roosevelt's "brain trust." In dealing with the problems of the Depression, Roosevelt urged his advisors to experiment. Some programs thus failed, some were continually reformed, and several conflicted with each other. The key, insisted Roosevelt, was to "do something."

During the first Hundred Days of the Roosevelt administration, countless programs were proposed by the administration and passed by Congress that attempted to stimulate the American economy and provide relief and jobs. A very popular act, for psychological reasons if nothing else, was the repeal of Prohibition, which was actually voted on by Congress in February 1933.

Roosevelt's economic advisor told him that his first priority should be the banking system. On March 5, 1933, he officially closed all banks for four days and had the federal government oversee the inspection of all banks. By March 15, most banks were reopened; this cooling-off period gave people a renewed confidence in the banks, and slowly people started putting back into banks instead of taking out. The Banking Act of 1933 created the Federal Deposit Insurance Corporation (FDIC), which insured the bank deposits of individual citizens.

During the hundred days, large amounts of federal money were handed down to local relief agencies, and a Federal Emergency Relief Administration (led by Harry Hopkins) was also established. Efforts were also made to help people find work. Thousands were hired from funds distributed to states by the Public Works Administration; many schools, highways, and hospitals were built under this program.

The Civilian Conservation Corps (CCC) was founded during this period and would eventually employ over 2.5 million young men. Under this program, forest and conservation programs were undertaken. CCC workers were only paid a small amount (this money was actually sent to their families), but in a period where little work was available, many veterans of CCC programs later perceived the program as a godsend.

Roosevelt considered the bolstering of the industrial sector of the American economy to be a top priority. Falling prices had caused layoffs and the failure of many businesses. The National Industry Recovery Act (NIRA) was established to try to stop falling prices in industry. Under this act, committees of both owners and union leaders in each industry would meet to set commonly agreed on prices, wages, working hours, and working expectations. Unions and collective bargaining were accepted in industry as a result of the NIRA. Wages in many industries rose as a result of this; the thinking in the creation of the NIRA was that as wages rose, workers would then buy more, stimulating the economy and stopping the fall of industrial prices. The goals of this program were largely not met; as wages rose so did prices. As a result, many workers did not buy more, negating any benefit that rising wages were supposed to have.

Another body created by the NIRA was the National Recovery Administration (NRA), which was supposed to enforce the decisions of the NIRA. The entire process of the NIRA was declared unconstitutional in the 1935 Supreme Court case Schechter v. United States, although the agency had largely lost its effectiveness by then.

Two other important programs developed during the first hundred days. The Agricultural Adjustment Administration (AAA) attempted to stop the sharp decline in farm prices by paying farmers not to produce certain crops and livestock. It was hoped that this would cause the prices of these goods to rise. The Tennessee Valley Authority authorized the construction of a series of dams that would ultimately provide electricity and flood control to those living in the Tennessee River Valley. Thousands who had not had electricity in their homes now did.

The hundred days and the months that followed it provided some relief to those affected by the Depression, but by no means solved the basic economic problems facing the United States. The 1934 midterm congressional elections showed that most Americans favored FDRs policies, yet even in 1935 some 20 percent of all Americans were still out of work.

The Second New Deal

Many wealthy members of American society were appalled by the actions that Roosevelt took during his first year in office; he was called a traitor to his class, a communist, and far worse. Other elements of Roosevelt's brain trust (as well as his wife Eleanor) were advising Roosevelt to do even more to help the unemployed of America. As a result, the Second New Deal, beginning in 1935, included another flurry of legislation.

It was obvious that even more dramatic measures were needed to help farmers; many farms were still being foreclosed on because farmers could not make necessary payments on their land. The Resettlement Administration, established in May of 1935, offered loans to small farmers who faced foreclosure. In addition, migrant farmers had not been affected by previous New Deal measures dealing with agriculture; funds to help them find work were included under the Resettlement Administration.

One of the outstanding achievements of the Second New Deal was the creation of the Works Progress Administration (WPA). The WPA took people that were on relief and employed them for 30 or 35 hours a week. On average, 2 million people per month were employed by the WPA; by 1941, well over 8 million people had worked for the WPA. WPA workers were usually engaged in construction projects, building schools, hospitals, and roads across the country. In addition, unemployed musicians, artists, and actors were all employed by the WPA. WPA artists painted many of the murals found in public buildings, concerts were given for both urban and rural audiences, and plays were performed for audiences who had never seen one before.

Another important piece of legislation from this period was the Wagner Act, which reaffirmed the right of workers to organize and to utilize collective bargaining. These rights had been guaranteed by provision 7a of the NIRA guidelines, but when the NIRA was declared to be unconstitutional, additional legislation protecting workers was needed. The Wagner Act also listed unfair labor practices that were outlawed and established the National Labor Relations Board (NLRB) to enforce its provisions.

The most important legislation passed during the Second New Deal was the 1935 Social Security Act. The critical provision of this act was the creation of a retirement plan for workers over 65 years old. Both workers and employers paid into this retirement fund; the first payments were scheduled to be made in January 1942. It should be noted that the initial social security legislation did not cover agricultural and domestic workers.

Other provisions of this act established a program that provided unemployment insurance for workers who had lost their jobs; this was paid for by a payroll tax that was imposed on all employers with more than eight workers. The federal government also provided financial support to programs at the state level that provided unemployment insurance. The federal government also gave money to the states to provide aid programs for dependent children, for the blind, and for the physically challenged.

As stated previously, some Americans were exempt from the provisions of the Social Security Act. Nevertheless, this act fundamentally changed the relationship of the federal government with American citizens. At the root of the Social Security Act was the concept that it was the job of the federal government to take care of those who couldn't take care of themselves. This was a fundamentally new role for the federal government to have, and it justified the worst fears of many opponents of the Roosevelt administration.

The Presidential Election of 1936

The 1936 election was the first true national referendum on the presidency of Franklin Roosevelt. In his campaign speeches, Roosevelt often railed against the business class; according to Roosevelt, they opposed many of his policies only so they could continue to get rich. The Republicans nominated Governor Alfred Landon of Kansas as their presidential candidate. Landon never actually repudiated the programs of the New Deal, but he stated that a balanced budget and less expensive government programs should be top priorities.

The election was one of the most one-sided in American history. Roosevelt won the electoral college 523 to 8, with Landon only winning the states of Maine and Vermont. Roosevelt was able to craft a New Deal Coalition, which made the Democrats the majority party in America throughout the rest of the 1930s and all the way into the 1980s. The fact that white urban dwellers supported the Democrats in large numbers was noted during the 1928 defeat of Smith; whites in the Solid South had largely voted Democratic since the nineteenth century. The two groups that joined the Democratic coalition in this era were labor unions and blacks (this was a dramatic shift, as most blacks had voted Republican since the period of Emancipation). Roosevelt enjoyed support in the agricultural community as well.

Opponents of Franklin Roosevelt and the New Deal

Despite the overwhelming electoral success of Franklin Roosevelt, many Americans vehemently disagreed with his programs. Some wealthy Americans called him a traitor to his class, while some businessmen called him a socialist or a communist. To others, the programs of Roosevelt were perceived as being designed to benefit the business interests of America and never truly addressed the human suffering of the country. Some of these Americans felt that neither the Democratic nor the Republican parties were really concerned with helping the average American, and perceived socialism as the only viable solution. Many idealistic Americans dabbled with socialism in the 1930s; for some the one or two party meetings they attended became career-threatening during the McCarthy era of the 1950s.

One group that thought the New Deal had gone too far was the American Liberty League. This group was led by former presidential candidate Al Smith and several very influential business figures, including prominent members of the Du Pont family. The membership of this organization was largely relatively wealthy Republicans; they were particularly incensed by the Revenue Act of 1935, which considerably increased the tax rate for those making over $50,000. The American Liberty League equated the New Deal with "Bolshevism" in much of their literature.

The majority of those opposing the New Deal felt that it didn't go far enough. Dr. Francis Townsend of California proposed an Old Age Revolving Pension Plan; under this plan, a national sales tax would pay for a pension of $200 per month for all retired Americans. Townsend maintained that the benefit would be that more and more money would be put into circulation. In 1934, Upton Sinclair, author of The Jungle, ran for governor of California on the Democratic ticket and announced his "End Poverty in California" (EPIC) plan. Under this plan, California factories and farms would be under state control. Sinclair was defeated by the Republican candidate and was also sabotaged by members of his own party; the Democratic smear campaign against Sinclair was approved of by Franklin Roosevelt.

The two most vicious opponents of the New Deal were Father Charles Coughlin and Louisiana Senator Huey Long. Millions of people listened to Coughlin on the radio. Originally a supporter of Roosevelt, by the mid-1930s he told his listeners that Roosevelt was a "liar" and "the great betrayer." By the late 1930s, Coughlin was praising Mussolini and Hitler on his broadcasts, and making increasingly anti-Semitic statements. By order of the church, Coughlin was pulled off the air during World War II.

As Governor and later senator from Louisiana, Huey Long instituted many New-Dealtype programs in Louisiana, and also developed the most effective and ruthless political machine in the entire South. By 1934, Long felt that Franklin Roosevelt was not committed to doing enough to end the Depression. Long called for a true redistribution of wealth in his "Share the Wealth" program, which would have allowed no American to make over a million dollars a year (the rest would be taken in taxes). From these taxes, Long proposed to give every American family $5000 immediately and an annual income of $2000. Long talked of running against Roosevelt in 1936, but was assassinated by the relative of a Louisiana political enemy in 1935.

The Last Years of the New Deal

Franklin Roosevelt was frustrated that the United States Supreme Court had struck down several New Deal programs. In early 1937, he proposed the Justice Reorganization Bill, which would have allowed him to appoint an additional Supreme Court justice for every justice over 70 years old (nothing in the Constitution stated that there had to be only nine Supreme Court justices). Roosevelt would have been able to appoint six new judges under this scheme. Roosevelt claimed that the purpose of this plan was to help the older judges with their workload, but many Republicans and Democrats in Congress believed that Roosevelt was altering the balance of power between branches of government just to get his ideas enacted into law. Newspaper editorial writers and cartoonists compared Roosevelt to the dictators of Europe, Hitler and Mussolini. Many Southern Democrats joined with the Republicans to defeat this bill; the aftereffects seriously damaged Roosevelt's relationship with Congress. Ironically, without the bill, several justices retired in the next two years, allowing Roosevelt to appoint justices who would approve his programs anyway.

Any hopes that the New Deal was actually ending the Depression were dashed by a fairly large recession that occurred in mid-1937. Once again, factories began major layoffs. Critics of the New Deal blamed Roosevelt's programs for this recession. Many in the administration were worried that the national debt was too high, and urged Roosevelt to cut programs. The WPA was drastically scaled back, putting some that had worked for it out of work. In addition, a part of every worker's salary was now deducted to be put into the Social Security fund; critics charged that this money would have been better utilized if it was actually being spent on goods and services. By 1940, the administration restored some of the cutbacks made to government programs, slightly improving the economy again.

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