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Chapter 21

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HIST 221
Gil Troy

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Introduction Columbia River project: Grand Coulee Dam ―publics works revolution‖  Project begun in 1930s, went into operation in 1941  Created thousands of jobs for unemployed  Produced abundant cheap power, eventually 40% of nation‘s hydroelectric power THE FIRST NEW DEAL: focus: economic recovery FDR & The Election of 1932  Campaigned on promise of a ―new deal‖ for the American people o Govt‘s responsibility to provide every man a right to make a comfortable living o Advocated a balanced federal budget o Criticized Hoover (opponent) for excessive govt spending o Called for repeal of Prohibition- major difference btwn parties  FDR won 57% of popular vote & democratsmajority in congress The Coming of the New Deal: 1930‘s, political responses to depression  Conservative govts in power in Britain & France  Concern over public order rather than suffering/policy innovations  Tyrants in Germany (Hitler) and USSR (Stalin)  Militarist govt in Japan, invaded China in 1937, hoped to expand rule throughout Asia  FDR‘s New Deal: alternative to socialism (left) and Nazism (right) o hoped to reconcile democracy, individual liberty, and economic planning  appointed administration of intellectuals and social workers…symbolic of progressive reform o ex. Frances Perkins, Harry Hopkins, Louis Brandeis, Harold Ickes (see pg. 862) o Brandeis: Corporations have too much power, should be broken up (not regulated), helped Depression, kept prices up. o Others claimed large firms: inevitable but should be managed/directed by the govt **1 stNew Deal view** ―the only thing we have to fear is fear itself‖ –FDR ‘33 inaugural address first three months of FDR‘s presidency: ―the hundred days‖ spirit of crisis/momentum of electoral victory helped the rapid passage of laws expanding federal govt’s role in people‘s lives.. ex. NRA, AAA, CCC FDR shifted idea of liberty—challenged idea that best way to encourage economic activity/fair distribution of wealth= allowing market competition to operate unrestrained by govt The Banking Crisis…banks on verge of collapse early 1933  Funds invested in stock market lost value, depositors withdrew savings. Banks suspended in majority of states- people couldn‘t access money in their account  ―bank holiday‖ called by FDR- halted all bank operations, congress entered Special session, increased govt power over financial system in order to save it  3/9: Emergency Banking Act- provided funds to shore up threatened institutions  Glass-Steagall Act: barred commercial banks from buying/selling stocks and established FDIC (Federal Deposit Insurance Corp)  FDIC: insured accounts of individual depositors  FDR took US off gold standard, made issuing money easier to stimulate business activity  29-33: ½ of banks failed, 1936: not one bank failed The NRA: National Recovery Administration, established by the National Industrial Recovery Act, modeled after War Industries Board of WWI  Worked with business leaders to create industry codes setting standards for output, prices, and working conditions  Ended cut throat competition  section7a: worker‘s right to organize unions (industrial freedom)  Head: Hugh S. Johnson retired general and businessman o Established codes that set standards for production, prices, and wages in textile/steel/mining/auto industrial o Publicity campaign to promote NRA & Blue Eagle symbol  Initial public enthusiasm turned to controversy/failure o Code writing dominated by large companies (used NRA to drive up prices, limit production, lay of workers, and divided markets among themselves at price of smaller competitors) o Sec7a ignored by anti-union employers o manpower needed to police the 750 codes was missing o NRA produced neither economic recovery nor peace between employers and workers 1 thought- Economy Act: reduced federal spending, worried about undermining idea of individual self-reliance wake of depression- relief was unavoidable, ¼ labor force unemployed ! Government Jobs: goal: combat unemployment while improving national infrastructure  May 33: Federal Emergency Relief Administration offered grants to local aid agencies  Civilian Conservation Corps (CCC): hired unemployed young men to work on projects ex. flood control, forest preservation, improvement of parks/wildlife preserves. Ended in 1942-over 3 million had participated and received govt wages of $30 a month Public Works Projects  Public Works Administration (PWA)-created by national industrial recovery act, given $3.3 billion to build roads, schools, hospitals, and other public facilities (ex. NY Triborough bridge, overseas highway between Miami & Key West)  Civil Works Administration (CWA): launched nov‘33, employed more than 4 million in construction of highways, tunnels, courthouses, and airports. Costs were expensive & many complained that the new deal was creating a civilian class dependent on govt jobs so FDR dissolved the CWA.  Tennessee Valley Authority (TWA): also created during Hundred Days, built dams to prevent floods & deforestation along TN River and provided cheap electro power for homes/factories in 7 states New Deal & Agriculture  Agricultural Adjustment Act (AAA): govt set production quotas for major crops/paid farmers not plant more in an effort to raise farm prices. Many crops already in field destroyed and 6million pigs ordered to be slaughtered due to policy (during time of hunger!) o (+) Significantly raised farm prices/incomes, property owning farmers benefitted o (-) the large # who worked on land owned by others not benefitted, many tenants and sharecroppers evicted due to production quotas. Led to greater rural exodus to cities and migration to West Coast farms  Weather in 30‘s worsened depression‘s impact on rural America, unusually dry weather, most severe drought of 1800s  Mechanized agriculture in region killed topsoil/native grasses that prevented erosion. Now, wind blew soil away creating Dust Bowl in OK, TX, KS, Colorado  Drought and dust storm displaced 1million + farmers  Steinbeck re. this struggle in The Grapes of Wrath (1939) The New Deal & Housing  Housing: mark of respectability for middle class and economic security for workers  Housing industry devastated by Depression… 250,000 homes foreclosed in 1932, millions living in overcrowded unhealthy urban slums or rural dwellings  Before New Deal, govt did not penetrate housing market.. Hoover: established federally sponsored bank to issue home loans  FDR declared: security of home=fundamental right akin to security of livelihood & security of social insurance  Home Owners Loan Corporation & Federal Housing Administration (FHA) insured millions of long term mortgages issued by private banks  Federal govt built thousands of units of low rent housing  Ratification of 21 amendment ending Prohibition  Creation of Federal Communications Commission (FCC) to oversee nation‘s broadcast airwaves/telephone communications  Securities & Exchange Commission to regulate stock/bond markets The Court & the New Deal  Court: majority still conservative in 1935, began striking down New Deal Laws  NRA declared unconstitutional in case by Schechter Poultry Company of Brooklyn…court declared NRA unlawful for giving legislative powers to president & attempting to regulate local business that did not engage in interstate commerce  Jan 36: AAA fell in US v. Butler…declared unconstitutional exercise of congressional power over local economic activity  June 36, 5-4 court ruled NY could not establish min. wage for women and children GRASSROOTS REVOLT Labor‘s Great Upheaval  Mobilization of millions of workers in mass-production industries previously resisting unionization  Ethnic diversity diminishing due to reduction of immigration  American born children of new immigrants dominated industrial labor force  Many leaders of labor movement: socialist and communist  Factories were mini dictatorships—unions rare, workers could be beaten/fired at will, management determined length of day and speed of assembly line  Workers demands expanded from just better wages, to an end to employers’ arbitrary power in work place, civil liberties for workers ex. right to picket, distribute literature, and discuss grievance… union recognition was a must.  Great upheaval exploded in ’34..2000 strikes, violent confrontations between workers/police  Toledo, Ohio: 10,000 autoworkers strike at Electric Auto-lite factory…escalated into 7 hour fight with police and national guard  Minneapolis: Citizens Alliance (org. of businessmen) controlled city‘s govt. Truck drivers went on 4 month strike, pitched battles in street, governor declared martial law  SF: first general strike since 1919 beginning with communist Harry Bridges: demanded recognition of International Longshoremen‘s Association and end to ―shape up‖ system where they had to gather en masse each day and wait for work assignments  400,000 textile workers in New England and deep south demanded recognition of United Textile Workers  won some workers demands but textile strike failed Rise of CIO—Congress of Industrial Organizations, umbrella organization of new industrial workers unions  John L. Lewis -head of United Mine Workers  Goals for workers: fair share in wealth & voice in determining working conditions  United Auto Workers (UAW)- 400,000 members end of ‗37 o used sit down strategy used by IWW- instead of walking out of plant they stayed inside and halted production… in their first strike: 7000 general motors workers gained control of Fisher Body Plant in Cleveland…strikes spread to Flint, MI (center of auto production). Local police tried to storm plants, fought off by workers. Governor Murphy (elected with strong support of CIO) declared unwillingness to use force on strikers. Unity of workers was striking—cleaned plant, oiled idle machinery, prepared meals, held concerts of labor songs, wives shuttled food into plant. Feb 11: GM agreed to negotiate with UAW o 1941 antiunion Henry Ford signed labor contract  Steel industry: March ‘37: company (feared sit down campaign and aware they could no longer rely on aid from state/fed govt)and agreed to recognize Steel Workers Organizing Committee  1940: union memberships : 9mil. (more than 2x # in 1930)  union successes: right to contest amount/pace of work, new grievance produces, seniority systems governing hiring/firing/promotions  CIO unions helped stabilize chaotic employment situation, members offered sense of dignity/freedom Labor and Politics  CIO: ambitious program for fed. action to shield Americans from economic/social insecurity (ex. public housing, universal health care, unemployment/old age insurance)  CIO explained Depression as result of imbalance of wealth and income…underconsumptionist explanation- accepted by new dealers  Unions/govt should create consumer‘s demand by raising wages/redistributing wealth  UAW/GM spoke of ―rate of pay commensurate with an American standard of living‖  Govt must act to raise wage earners share of national income Voices of Protest- dissatisfaction with slow pace of economic recovery  Upton Sinclair in CA: won democratic nomination for governor in 1934 (but lost election) as head of End Poverty in CA movement o Called on state to use idle factories and land in cooperative ventures that would provide jobs for unemployed  Huey Long: LA populist & socialist traditions, o wanted to help state‘s ―common people‖ governor 1928 o senate in ‘30: built schools, roads, and hospitals, increased tax burden on LA oil companies o known as ―Kingfish‖ o Share Our Wealth Movement, slogan: Every Man a King  Called for confiscation of most of wealth of richest Americans in order to finance immediate grant of 5000 and guaranteed job and annual income for all citizens o Wanted to run for president but assassinated in 1935  Charles E. Coughlin: radio priest, mid 1930s…criticized Wall Street bankers and capitalist, called for govt ownership of key industries to combat Depression. Considered first new deal a failure. Had millions of followers. Eventually shifted to anti- Semitism and supported european fascism  Dr. Francis Townsend: CA physician, plan: govt would make monthly payment of $200 to older Americans with requirement they spend it immediately to boost economy. Townshend clubs earned 2 million members by end of ‗34 THE SECOND NEW DEAL launched in 1935, focus: economic security, Americans would be protected against unemployment & poverty New strategy: govt abandons efforts to plan business recovery but instead redistributes national income to maintain mass purchasing power in consumer economy (influence of Long, Townshend, and CIO) Govt levied highly publicized tax on large fortunes/corporate profits (response to Share Our Wealth) Govt believed that nation would never achieve prosperity while farmers‘ standard of living lagged behind city dwellers—led to series of programs  Rural Electrification Agency (REA) to bring electric power to homes lacking it (ex. 80% of farms in 1934) & hoped to enable more Americans to purchase household appliances o One of more successful 2 ndnew deal programs o By 1950: 90% of farms had electricity and almost all had radios, electric stoves, fridges, and mechanical equipment to milk cows  Federal govt promoted soil conservation & family farming  Purchased significant amounts of marginal and eroded land and converted these into national grasslands and parked  Encouraged more environmentally conscious agricultural techniques  Benefitted landowners—not sharecroppers tenants and migrant workers WPA: Works Progress Administration (1934)  hired 3 million Americans a year until 1943  head: Harry Hopkins  constructed thousands of public buildings and bridges, 500,000+ miles of roads, 600 airports, stadiums, pools, sewage treatment plants  employed many out of work white collar workers & professionals- even doctors and dentists (dif. than previous work-relief programs)  assigned artists to paint public buildings with murals, writers to produce local histories & guidebooks  Federal Theater Project- put on all-black production of Macbeth  Federal Music Project, Federal Dance Project  Created National Youth Administration in ‘35 to provide relief to American teenagers and young adults Wagner Act or ―Labor‘s Magna Carta‖  Empowered National Labor Relations Board to supervise elections in which employees voted on union representation  Outlawed unfair labor practices ex. firing/blacklisting of union organizers  Main sponsor: Robert Wagner of NY promised unionization & higher wages would aid economic recovery by boosting purchasing power of ordinary Americans AMERICAN WELFARE STATE: system of income assistance health coverage, and social services for all citizens Social Security Act of 1935: created system of unemployment insurance, old age pensions, and aid to disabled, elderly poor, and families with dependent children. Idea that govt had responsibility to ensure material well-being of ordinary Americans  Origins: Progressive platform 1912 included old age pensions  Assistance to poor families w/ dependent children— maternalist reformers vouched for mothers‘ pensions  Many European nations had unemployment insurance Social Security System  Hybrid of national & local funding, control, & eligibility standards  Ex. Old age pensions: administered nationally, paid for by taxes on employers & employees.  These taxes also paid for payments to unemployed- decentralized program, states had control over level of benefits  Aid to Dependent Children- where states paid most of cost of direct poor relief Before 1930s: Should federal government play role in economy? After New Deal: how should the federal government intervene? Concept of laissez-faire is over. RECKONING WITH LIBERTY Effects of Depression: for too many Americans, life was no longer free; liberty no longer real; men could no longer follow pursuit of happiness –FDR Lots of essays/books on freedom..ex. Land of Free ‘38 by Archibald MacLeish New Deal: freedom linked to expanding power of nation state (like Civil War) Majority: govt should guarantee that every man who wants work has a job FDR & THE IDEA OF FREEDOM  Used radio to spread message to peoples‘ homes  Roose
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