HIST 2057 Chapter : FDR And New Deal Relief
HIST 2057 Notes
FDR and New Deal Relief
March 8, 2017
I. Relief and The First Hundred Days
A. Banking
-The first act of the New Deal that Roosevelt did was closing all of the banks. All of
the cash ended up being taken out. This meant that if someone still had money into
the bank before the banks were closed, they lost their money. This led to new
banking policies such as the Emergency Banking Act and the Security Exchange
Commission.
1. Emergency Banking Act
-This act was written by Roosevelt’s advisors and went through Congress in one day.
The vast majority of senators and legislators did not read this act entirely and had
no idea what it actually did. Roosevelt explained the act on national radio and told
them the Banking System could only work if people put their money into banks. It
would not only benefit them by protecting their money but also benefit the economy
for allowing the money to be used for business purposes, loans, etc. The Emergency
Baking Act would help to guarantee the citizen’s money in the bank by creating the
FDIC (Federal Deposit Insurance Corporation that guarantees money in banks in
case the bank goes under).
-He explained in a way that was very clear to the people and the Monday after this
talk (The Fireside Chat), the banks were reopened and more money was deposited
in the bank than drawn from the bank. Note that Hoover had the same idea but
could not convince the American people to put their money in banks. As well,
Hoover had a very cold demeanor to him that scared the public whereas Roosevelt
had a calming soothing tone.
-This act allowed the banking industry to start stabilizing.
2. Security Exchange Commission
-At the same time, Congress created the Security Exchange Commission. Before, an
issue with the economy was that people were paying too much money for stock.
This act made it illegal to lie about the worth of one’s company. Business owners
had to be truthful, state their earnings and incomes, their costs, and more. The
Commission oversaw this legislation and prosecuted companies that lied about their
information or did not provide information. This was trying to ensure that people
had good information on which to base their investments. This prevented people
paying too much when the stock was not worth that much.
-Roosevelt’s supporters, especially the Left, thought that Roosevelt should have
nationalized the banks and made them a utility or service that the government
provided. Instead, Roosevelt did something relatively similar to what Hoover had
done. He loaned money to banks but in a greater amount and was able to sell his
programs to the public in a way Hoover never could.
B. Agriculture
1. Agricultural Adjustment Act (AAA)
-Next, Roosevelt tackled problems facing farmers. These problems such as
overproduction, credit, low prices, and more have been an issue since the early
1900s. This Agricultural Adjustment Act (AAA) was to raise the price of farm goods.
To do so, farmers were paid not to grow as much as before. By restricting supply,
the prices would rise. They had to be paid because you could not just ask farmers
not to grow crops because they would fear getting less money. This subsidy would
come from a tax on food and agricultural processing. Companies that processed
sugar, tobacco, wheat, rice, etc. would pay a small tax and that money would go into
the amount the farmers received for not growing.
-This was a problem because it only benefitted farmers that owned their own land.
It hurt significantly sharecroppers and tenant farmers that did not own their own
land. Because the farmers could not grow as many crops, sharecroppers and tenant
farmers would not only lose their livelihoods but they would also lose the housing
they had on the land. This benefited landowners because they would get more
money from the government and the products they sold.
-In the long run, the agricultural economy was benefited because they were no
longer dependent on sharecroppers and tenant farmers. However, it led to lots of
unemployment and homelessness for them. The New Deal finally took the concerns
of farmers into consideration after being ignored for the longest.
C. Unemployment
1. Federal Emergency Relief Administration (FERA)
-When Roosevelt took office, 25% of the population was unemployed. Roosevelt
created the Federal Emergency Relief Administration that gave money to states to
fund relief projects. The states could open soup kitchens, homeless shelters, and pay
money to unemployed directly, etc. There were no stipulations for how the money
was managed. It was designed in this way to quell criticism that the federal
government was becoming too big and taking over state governments (something
the Right often complained about).
Document Summary
March 8, 2017: banking, relief and the first hundred days. The first act of the new deal that roosevelt did was closing all of the banks. All of the cash ended up being taken out. This meant that if someone still had money into the bank before the banks were closed, they lost their money. This led to new banking policies such as the emergency banking act and the security exchange. This act was written by roosevelt"s advisors and went through congress in one day. Baking act would help to guarantee the citizen"s money in the bank by creating the. The vast majority of senators and legislators did not read this act entirely and had no idea what it actually did. Roosevelt explained the act on national radio and told them the banking system could only work if people put their money into banks.
