Herbert Hoover

Election of 1928:
- Al Smith (Democratic) vs. Herbert Hoover (Democratic)
- Al Smith:
o Catholic (lots of anti-Catholic prejudice)
o Did well among hard-pressed Midwestern farmers
o Supported by Catholic + Jewish wards
- Herbert Hoover:
o Victory came with evidence of political realignment, as urban voters
went heavily for Smith
Herbert Hoovers Social Thought:
- Opposed uncontrolled free-market competitions
- Demanded corporate cooperation in resource allocation and product
standardization
- Advocated voluntarism
o Economic order must arise from voluntary action of capitalist leaders,
not government coercion
- A conservationist & pushed for environmental laws (Hoover Dam)
- Created Federal Farm Board to promote cooperative marketing
- Believed in welfare capitalism & urged higher wages
- Ideas were limited by his opposition to direct government economic
intervention
Summary of Roosevelt:
- New Deal: emphasized relief and recovery through united national effort
- Second New Deal: placed less emphasis on unity and more on business
regulation and on policies benefitting workers, small farmers, sharecrops, and
migrant laborers
Great Depression
Black Thursday
- Stocks prices had risen through the 1920s b/c credit or margin buying
spread
- Income tax cuts also increased flow of money into market
- Federal Reserve Board tried to dampen speculation by increasing interest
rates
- Causes:
o Structural weaknesses
Agriculture was depressed throughout decade
Wage increases lagged behind output, reducing purchasing
power
Assembly-line methods led to overproduction
Global economic crisis (Europe)
Hoovers Response
- Urged business leaders to maintain wages + employment and advised city +
state officials to create public-works projects

1930: Emergency Committee for Employment coordinated volunteer efforts

1931: Persuaded large banks to create private lending agency to help small
banks make loans
Called for tax increase to prevent budget deficit angered Americans
Reconstruction finance Corporation: provided funds/loans to banks and
insurance companies
o Created to funnel money to banks + railroads, not directly to people

Mounting Discontent + Protest

- Farmers lost land b/c of tax delinquency
- Midwestern farmers organized Farmers Holiday Association: force prices up
by withholding grain + livestock from market
- WWI Veteran Protest (Bonus Marchers)
o Congress promised veterans a bonus and many veterans went to D.C.
for immediate payment
o Hoover called the army administrations heartlessness
Election of 1932
- Herbert Hoover (Republican) vs. F.D. Roosevelt (Democrat)
- Americans were angry at Hoovers failure to respond to their plight
Roosevelts Goals:
1. Initial recovery through business-government cooperation and pump-priming
federal spending
2. Agricultural recovery through crop reduction
3. Short-term emergency relief distributed through state and local agencies
when possible, but directly by the federal government when necessary
Roosevelt and His Circle:
- Eleanor Roosevelt: wife of FDR; redefined role of First Lady and influenced
social policy during the New Deal
- Frances Perkins: former Progressive reformer and first women cabinet
member; led committee that wrote the Social Security Act; Secretary of Labor
The Hundred Days (March June 1933)
- Expanded Washingtons involvement in Americans economic life
- Emergency Banking Relief Act
o Permitted healthy banks to reopen
o Set up procedures to manage failed banks
o Increased government oversight
o Required that banks separate savings deposits from their investment
funds
- Federal Deposit Insurance Corporation (FDIC)
o Insures bank deposits up to $5,000
o In fireside chats, FDR assured Americans to trust banks
- Home Owners Loan Corporation
o Helped city-dwellers refinance mortgages (helped those who were
losing homes)
- Farm Credit Administration
o Provided loans to rural Americans to meet their farm payments

Civilian Conservation Corps

o Employed millions of jobless young men in environmentally friendly
government projects: reforestation, park maintenance, and erosion
control
Federal Emergency Relief Act (principle relief measure of 100 days +
keystone of New Deal)
o Provided $500 million to fill the empty relief fund coffers of cities and
states
o Headed by Harry Hopkins

Long Term Challenges: agricultural + industrial recovery

- New Dealers advocated reduced production to raise farm prices
o Government paid planters to plow under their crops & slaughter piglets
(PR nightmare)
- Agriculture Adjustment Act
o Gave payments, called subsidies, to producers of the major farm
commodities (hogs, wheat, corn, cotton, and dairy products) in return
for cutting production
o A tax on food processors financed subsidies
- Agricultural Adjustment Administration (AAA)
o Oversaw Agriculture Adjustment Act and the effort to help farmers by
reducing production and raising prices
- National Industrial Recovery Act
o Appropriated $3.3 billion for heavy-duty government public-works
programs to provide jobs and stimulate economy
o Program was ran by the Public Works Administration (PWA), which was
headed by Harold Ickes
o Also set up the National Recovery Administration (NRA)
Attempt to gain cooperation in recovery efforts among
government, business, and labor leaders
Brought business leaders to draft codes of fair competition
Codes set production limits, wages, and working
conditions, and forbade price cutting and unfair
competitive practices
Aimed to promote recovery by breaking cycle of wage
cuts, falling prices, and layoffs
Textile-industry code banned child labor
Affirmed workers rights to organize unions and bargain
collectively
- Reconstruction Finance Corporation (RFC) from Hoover years remained active
o Lent billions of dollars to banks, insurance companies, and new
business ventures
- Early New Deal had strong pro-business flavor
- Federal Securities Act
o Required corporations to inform the government fully on stock
offerings
o Made executives personally liable for any misrepresentation for
securities their companies issued

Congress created the Securities and Exchanges Commission (SEC) to

enforce regulations
Tennessee Valley Authority (TWA)
o Ambitious plant of economic development; centered on dam building
for poor Appalachian area
o Advanced economic + social development of the Tennessee River
valley
o Brought electricity to region, provided rec. facilities, and reduced
flooding + erosion
o Under David Lilienthal, TVA = New Deals/ most popular + enduring
achievements
o

Problems + Controversies Plague Early New Deal

- NRA + AAA faltered
o Corporate America resisted NRA regulation & code violations increased
o Supreme Court declared NRA unconstitutional
Ruled act gave president regulatory powers that belonged to
Congress
Regulated commerce w/in states violated the Constitutions
limitation of federal regulation to commerce between or among
states
o AAAs crop reduction payments hurt southern tenants and
sharecroppers who faced eviction as cotton planters removed acreage
from production
- Dust Bowl Okies
- Rivalries + policy differences plagued New Deal relief
o Hopkins convinced Roosevelt to support direct federal relief programs
rather than channeling fund through state and local agencies
- Hopkins headed Civil Works Administration (CWA)
o Expended nearly 1 billion dollars on short-term work projects for the
jobless
o FDR abolished CWA when things became better; feared creating a
permanent underclass living on relief
Challenges from Right and Left
- Despite the New Deal, the depression persisted
- Rising frustration 2,000 strikes in 1934 (some communist-lea)
- Conservatives attacked New Deal as socialistic
- Roosevelt pursued national-unity theme:
o Exhorted Americans to join battle for economic recovery like they
united for war
- Mastery of radio = model for his successors
- 1934 midterm election ratified New Deals popularity
o Democrats increased majority in House and Senate
- Critics on the left attacked if for not going far enough
o Ridiculed Roosevelts efforts to include bid business in his AllAmerican Team
- Demagogues:
o Charles Coughlin

Made anti-Semitic allusions & called for nationalization of the

banks
Attracted some support from the lower middle class
Francis E. Townsend
Proposed that government pay $200 monthly to all retired
citizens, requiring them to spend it w/in 30 days
Plan would help elderly Americans, stimulate economy, and
create jobs by encouraging retirement
Scheme would have bankrupted nation
Huey Long
Share Our Wealth program:
100% tax on annual incomes exceeding $1 million
Appropriation of all fortunes over $5 million
Every family would have comfortable home when money
was redistributed
Assassin killed him