Franklin D. RooseveltFranklin D. Rooseveltand the New Dealand the New Deal““Redefined” Democracy:Redefined” Democracy:Political Rights Political Rights EconomicEconomicSecurity Security Social JusticeSocial Justice
Economic Collapse and Hoover’s ResponseList and describe three major causes of the economic collapse of 1929, which led to the Great Depression of the 1930’s.Explain the initial response by the President Herbert Hoover to the economic collapse. How did that policy change during the course of his administration.
Causes of the Great DepressionAgricultural overproductionIndustrial overproductionUnequal distribution of wealthOver-extension of creditMargin and the Stock MarketInternational economic situationTariff Policy (Smoot-Hawley)Natural Free Market Cycle
How Herbert Hoover Dealt with the CrisisConservative Republican that believed in private enterprise and “rugged individualism.” Role of government is NOT to interfere with the free market.Believed a natural cycle and will take time and patience.“Prosperity is right around the corner.”
Voluntary MeasuresHoover eventually established two privately-funded organizations:The National Credit Association provided $1/2 billion to businesses for emergency loans, but it was too under-funded to do much good.The Organization for Unemployment Relief was a clearing house for relief agencies. However, state and local governments were already in too much debt to benefit from it.
Limited Government InterventionIn the end, Hoover resorted to government intervention:The Reconstruction Finance Corp gave $1-1/2 billion in federal loans to banks, insurance companies, and industry to prevent bankruptcies, but it was too little, too late.The Home Loan Bank Act provided federal loans to homeowners to prevent foreclosures, but got bogged down in red tape.
“Rugged Individualism” and the Election of 1932Hooverthought business should be self-regulating. “Laissez-Faire”He had a mania for a balanced budget.He lacked political finesse.Hoover becomes the scapegoat for the country. “Hoovervilles” to the “Bonus Army”
Franklin D. Roosevelt’s AppealIn 1932 presidential election, FDR was perceived as a man of action. Gov. of NYHoover was viewed as a “do-nothing president.” Norman Thomas, the Socialist candidate, was viewed as a radical. Results: a landslide for Democrats and a mandate to use government as an agency for human welfare.
Situation When FDR Entered OfficeIn March 1933, the country was virtually leaderless and the banking system had collapsed.
FDR Restored ConfidenceIn his inaugural address, he said “The only thing we have to fear is fear itself….” He promised vigorous leadership and bold action, called for discipline and cooperation, expressed his faith in democracy, and asked for divine protection and guidance.
FDR’s Personal QualitiesHe was a practical politician who practiced the art of the possible.