page 1 of 2
Roosevelt and Hoover had deep personal resentment between them. FDR was reluctant to take responsibility for any actions that he himself did not take, and refused to cooperate with Hoover's plans. Although some say that Roosevelt did not take the banking crisis of the last days of the Hoover administration as seriously as he should have, there are signs that he thought the American banking system would actually collapse before the Hoover administration left the White House. Roosevelt was reluctant to play any part in such a folly. Such a lack of cooperation on FDR's part make some critics suspect that he came to the Presidency without a clear plan. Yet as speeches made before his Presidency show, he was committed to progressive ideas and social welfare. He often feigned conservatism in private conversation with advisors and comrades, especially in the days before his Presidency, so that moderate progressives would be forced to be more extreme in their arguments with Roosevelt, and would therefore be manipulated into pledging their support for Roosevelt's liberal agenda. When FDR announced his Cabinet, a seemingly random mix of progressive and conservative Democrats, politicians and the press were even more befuddled as to the direction in which his Presidency would lead. Yet the Cabinet was made up of people who had been FDR's loyal supporters long before Chicago. They were familiar with the way he worked. Roosevelt seemed, therefore, to be preparing for drastic action by assembling a group of advisers around him who would support him without question.
FDR's inaugural address promised a war against the Great Depression, and he indeed moved quickly upon entering office. As any action was welcome after the inaction of the Hoover administration, Roosevelt received the absolute support of Congress and of the people. He declared a nationwide banking holiday from March 6–10, 1933, and halted all gold transactions in order to open the banks on a sounder basis. He also called a Democrat-dominated and very green Congress into special session. Congress members stayed at their task from March 9 through June 16 in a session dubbed "the Hundred Days" and passed much of the legislation that formed the New Deal. Legislation passed during the New Deal era had three often conflicting or obstructing goals: Relief, Recovery, and Reform to prevent the recurrence of the boom and bust cycle that had caused the depression in the first place. Roosevelt called this first round of legislation "must legislation." Congressmen, infused with the panic that had grasped the country, passed every bill that came their way.
FDR was excited to be in the executive role. He was constantly active, and the panic-stricken Congress was always ready to follow. Comparing himself to a quarterback whose next play depended on the success of the previous one, he crafted bills and strategies by intuition, always moving confidently even when it turned out to be in the wrong direction. The President's first order of duty was to end the banking crisis, which had forced many of the banks in the country to close and the rest to face severe bank runs. Congress prepared the Emergency Banking Relief Act of 1933 in eight hours, giving the president the authority to regulate banking transactions and reopen solvent banks. FDR then turned to the power of the radio to deliver the first of his famous fireside chats. He assured an audience of over thirty-five million Americans in the weekend before the banks were to reopen that it was safer to keep their money in a bank rather than in their homes. Confidence in the banks ebbed back into the country. On the Monday when banks reopened their doors, deposits outranked withdrawals for the first time in months, thanks to the contagious optimism of the President. The Hundred Days Congress also later created the Federal Deposit Insurance Corporation to insure individual deposits up to $5,000, a sum which was later raised. This legislation prevented a recurrence of the bank failure epidemic. FDR also acted decisively on other financial issues. He ordered all private gold to be surrendered to the Treasury for paper, and took the nation off the gold standard. Roosevelt also reduced the value of the gold content of the dollar to sixty cents, theorizing, with the help of various economic advisers, that changing the value of the currency would stimulate business through controlled inflation. Although prices did rise a little, they did not reflect the change that FDR had made in the value of gold, and the purchasing power of the dollar went down, especially on imports.
Roosevelt's success at stemming the tide of the banking crisis by infusing the country with his unceasing optimism prompted him to go further. His next round of proposed legislation put into action his willingness to spend federal money in order to jumpstart the economy. Other bills passed by the Emergency or Hundred Days Congress began with the Agricultural Adjustment Act on March 16. The measure was aimed at restoring farm income and reducing surpluses by using a tax on processors to fund subsidies for farmers who limited their acreage. On March 21, the Civilian Conservation Corps was created, putting over 250,000 young men to work on conservation projects under the guidance of the Army. Also on March 21, the Federal Emergency Relief Administration was created and put under the able leadership of Harry Hopkins, the former social worker who had been one of Roosevelt's most trusted advisors since his time as governor of New York. Hopkins allotted over three billion dollars in direct dole payments or wages for work to the States.
April 10, 1933, saw the creation of the Tennessee Valley Authority, probably the most visionary of the planned economy schemes of the New Deal. Senator Norris of Nebraska had long sought a public power project on the Tennessee River, which mushroomed in Congress into a development project for the entire watershed of 640,000 square miles. The project brought low-cost electric power, along with employment, housing, restoration of eroded soil, and reforestation, to a desperately poverty-stricken area. Though the TVA was a hugely successful project, its socialist overtones prevented conservatives from ever allowing its expansion beyond the Tennessee River.
The most complex product of the Hundred Days Congress was the National Industry Recovery Act, which was meant to help labor, industry, and the unemployed. Although Roosevelt insisted in his second fireside chat that the Act was only a partnership between business and industry and the national government, this legislation intruded into business far more than ever before. The bill was finally passed on June 16, 1933, after objections from the Senate, which insisted that the bill would only promote the concentration of wealth and power. Hugh Johnson was chosen to run the National Recovery Administration, or NRA, which was to administer the Act. The bill called for individual industries to write up codes of fair competition, decided maximum hours of labor per person, and introduced minimum wages in order to spread work among the greatest number of people. Labor was granted the right to collectively bargain and the right to choose its representatives for bargaining. The NRA was supported with much hoopla, with its blue eagle symbol cheered all over the country at factories and schools. However, the NRA called for both labor and industry to give up too much in order to guarantee their success, and businesses that placed the blue eagle in their windows would often secretly violate the codes. The Supreme Court later declared the codes unconstitutional in the Schecter decision.
Take a Study Break!