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.
