HIST 1312 1st Edition Lecture 11Outline of Last Lecture I. The Diplomacy of Prosperitya. Foreign Affairsb. The United States and Latin Americac. America and the European Economyd. Origins of the Depressione. The Stock Market PlungeII. Hoover’s Final EffortsIII. Depression in the U.S.a. Families in the Depressionb. Discrimination in the Depression c. Franklin D. RooseveltOutline of Current Lecture I. A New President, A New Deala. A Bank Holidayb. Seeking Agricultural Recoveryc. Seeking Industrial Recoveryd. Remembering the “Forgotten Man”II. The Second Hundred Daysa. Populist VoicesThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.b. A Shift in FocusIII. The New Deal and Societya. Urban Americab. Popular Culturec. Minorities and WomenIV. The New Deal Winds Downa. Roosevelt and the Supreme Courtb. Resurgence of LaborCurrent Lecture: The New Deal, 1933-1940I. A New President, A New Deal a. Bank Holiday - As Roosevelt’s inauguration approached, the nation faced a severe banking crisisfor several reasons. o Unable to collect debts owed and drained by too many investments in the sinking stock market, many banks had gone out of business since thecrash, which had left depositors penniless.  When the stock market goes under then the banks crash and then people’s money crasheso In 1932, 1,456 banks failed and the entire banking system seemed readyto collapse by March 1933. o The public’s dwindling confidence in banks caused a growing number of runs on banks (people pulling money out) as depositors demanded theirmoney, and since most banks did not have this money, they were forced to close their doors. - On March 6, Roosevelt announced a Bank Holiday that closed all the country’s banks, and he called a special session of Congress to pass an Emergency BankingBill. o Democrats and Republicans responded almost immediately and drafted the Emergency Banking Act, which allowed the Federal Reserve to examine banks and certify those that were sound. If they were deemed unsalvageable then the bank was forced to close.o The act also allowed the Federal Reserve and the Reconstruction Finance Corporation to support the nation’s banks by providing funds and buying stocks of preferred banks. This helped to save banks going under.- In the first of his Fireside Chats on March 12, Roosevelt told Americans that theyhad nothing to fear and that the federal government was solving the banking crisis.o When banks in the twelve Federal Reserve cities reopened the next day,customers appeared to deposit rather than withdraw money. - The Banking Act of 1933 reorganized the banking and financial system, gave new powers and responsibilities to the Federal Reserve System, and created theFederal Deposit Insurance Corporation (FDIC). o The FDIC insured bank accounts up to a certain amount. This was done to try to get people’s faith back into the banks- The Federal Security Act created the Securities and Exchange Commission, which regulated stock market activities, including the setting of margin rates. o This worked to get people’s trust back into the stock market; also stopped insider trading - The Twenty-First Amendment repealed Prohibition, and the Beer and Wine Act provided a small amount of revenue but greatly boosted public morale. b. Seeking Agricultural Recovery - The plight of farmers appeared near disaster as Roosevelt assumed office, and politically, the president was aware that a successful farm program would help tie the Farm Bloc to him and the Democratic Party. o The goal was to raise farm prices through national planning to a point of parity with prices received prior to World War I, and reducing rural poverty would be a by-product. - The Agricultural Adjustment Act (AAA) contained the Domestic Allotment Plan,which encouraged farmers to reduce production by paying them not to plant. o Although large amounts of land were removed from production, in many cases production did not drop since farmers took their least productive land out of cultivation. o The Commodity Credit Corporation provided money to farmers participating in the domestic allocation program based on the price of their crop. o By 1935, recovery in the agricultural sector had clearly started. o Butler v. United States declared the AAA unconstitutional; since the federal government could not set production quotas and the special tax on food processing was illegal. - Congress approved a second AAA that reestablished the principle of federally set commodity quotas, acreage reductions, and parity payments. o The combination of drought and governmental policies took sizable amounts of land out of production, stabilized farm prices, and saved farms. c. Seeking Industrial Recovery - The National Industrial Recovery Act (NIRA) offered something for everyone and quickly earned widespread support from business, labor, the unemployed, and community leaders. o The Public Works Administration (PWA) put people to work immediately, while the National Recovery Administration (NRA)provided programs to restart the nation’s industrial engine and create permanent jobs. o Business supported the NRA because it allowed price fixing, which raised prices and profits, while labor was attracted by codes that gave workers the right to organize (unions) and bargain collectively, outlawed child labor, and established minimum wages and maximum hours of work. o Schechter Poultry Corporation v. United States declared the NRA unconstitutional because the government was not permitted to set national codes or set wages and hours in local plants. d. TVA and REA - Controlled flooding though dams and provided electricity through hydroelectric powero Lynden B Johnson helped the hill country people (south of Austin, TX) byusing Brown and Root dams to get them electricity. Both in turn supported him in elections. - The Tennessee Valley Authority (TVA) showcased federally directed regional planning and development of a rural and impoverished region. o The project brought seasonal flooding more under control and made hundreds of miles of rivers and lakes more navigable. o The TVA’s electrification program became a precedent for a nationwide effort. - The Rural Electrification Administration (REA) had brought electricity to 45 percent of rural homes and farms by 1945 and had increased that to 90 percent by 1951. e.