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24 a -- Launching the New Deal (Restoring Confidence (bank holiday (Two…
24 a -- Launching the New Deal
Restoring Confidence
As a result of the perceived success of the New Deal, the Democratic party became far stronger.
WWII ended the depression not the New Deal
Roosevelt as a person
He promised a war like firm initiative that comforted the people in a stage of crisis
First president to speak the the American public over the radio to explain his plans -- also built the confidence of the American people
Was friendly with journalists -- they agreed never to take a picture of FDR's legs
bank holiday
Two days after FDR was elected he shut down all banks around the country for 4 days while he and Congress passed some bank reforms -- this made everyone happier
After this "bank holiday" he passed the Emergency Banking act which was a bill designed to protect larger banks from being dragged down by the weaknesses of small ones
He then allowed the Treasury Department to inspect all of the banks before they were allowed to reopen
Lastly, he assured the American peoples that having their money in the bank was safer than having it at home. -- helped dispel panic
Economy Act
Was meant to assure businessmen that the government was in good hands
Proposed a balancing of the federal budget by cutting the salaries of Congressmen and reducing pensions for veterans
FDR also supported the repealing of Prohibition which was carried out in 1933
Agricultural Adjustment and Industrial Recovery
Agricultural adjustment act
Measure to reduce over surplus of agricultural goods. The government would pay farmers of commodities such as (wheat, cotton, corn, hogs, rice, tobacco, and dairy products) to limit their crops and keep some of their land idle.
The government produced this money by taxing food processing
In the early 30s, the agricultural community was able to become more stable and hold higher prices
The program, run by the AAA (Agricultural Adjustment Administration) favored large farms because it was run by local officials and therefore was biased to those with more money and power
In 1936, the Supreme Court shut the program down because they thought it was unconstitutional for the government to pay farmers to limit their production
The program was replaced by the Soil Conservation and Domestic Allotment Act that asked citizens to "conserve soil" for environmental reasons. The court did not intervene.
Other Agricultural programs
Resettlement Administration and its successor the Farm Security Administration were initiated to move farmers (particularly in the Dust Bowl areas) to places with more suitable soil. -- It was not very effective
the Rural Electrification Administration helped electricity become available to many rural farmers in the Tennessee Valley by harnessing the Tennessee River
Business leaders were urging the government to control deflation by allowing large cooperation to settle prices within their industries -- to do so would involve by passing existing anti-trust laws
As a result the government appealed to the labor force by federally demanding that corporations recognize and obey to the power of unions, forcing companies to increase wages as profits increased. and created more jobs by funding public works spending and infrastructure projects.
All of these concessions were described in the National Recovery Act of 1933
The National Recovery Act and its programs were run by the NRA under the direction of Hugh S. Johnson. He worked to establish a minimum wage of 30-40 cents per hour, a maximum workweek of 35-40 hours -- these were called the blanket codes
The NRA set up specific codes with all of the major industries as well. These codes were controlled by large companies at the disadvantage of others and were generally poorly made. Sometimes they also artificially raised prices so the market couldn't take it.
Section 7a of the codes allowed workers to join unions and to bargain for better working conditions, but it contained no enforcement and thus it was ineffective
Flaws -- the PWA (Public Works Administration) did not let their funding of the Recovery Act go by quickly. Furthermore the industrial index actually fell while the plan was in place
The NRA ended when the Supreme Court deemed in unconstitutional in the Schechter brothers' case
Currency, Banks, and the Stock Market; The Growth of Federal Relief
In 1933 the government readjusted the gold standard by buying a lot of precious metals and creating a fixed standard for the dollar that could by controlled by the government. This did not have any immediate impact on the economy
Glass-Steagall Act allowed the government to: curb irresponsible inspections of banks, establish a wall between commercial and investment banking, and to create the Federal Deposit Insurance Corporation. This program guaranteed all deposits up to $2500 dollars.
Congress established the Truth in Securities Act of 1933 which forced businessmen to disclose all information fairly to potential stock investors. the Securities and Exchange Commission (SEC) was the organization that was created to police the stock market. Criminal trials were held for many Wall Street Figures.
Federal Emergency Relief Administration was created to give cash grants to prop up bankrupt relief agencies, but that wasn't doing a lot so they created the CWA which provided work relief
Some of the jobs it created had lasting value such as the construction of roads, schools, and parks -- others were more make work.
The Civilian Conservation Corps was another organization designed to create jobs by paying people to plant trees and develop parks. The project was segregated by race.
Regional Planning
One of the most celebrated organizations of the New Deal era was the TVA -- Tennessee Valley Administration that worked to turn the Tennessee River into a cheap source of electrical power for that impoverished region
Came out of the crash of the Samuel Insull electric company
It would also stop flooding that had plagued the Valley for centuries and encouraged reforestation