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... refully prepared plans were ready to be implemented almost at once. Huge public buildings, great dams, and irrigation and flood-control projects are part of PWAs legacy. The most spectacular agency designed to promote general economic improvement was the National Recovery Administration (NRA), an organization set up (along with the PWA) by the National Industrial Recovery Act (NIRA), which was passed by Congress in June 1933. The NRA was designed to help business help itself. Unfair competition was supposed to be eliminated through the establishment of codes of fair competition; in effect, laws against combinations of large businesses were to be suspended in exchange for guarantees to workers.
These guarantees specifically included minimum wages, maximum hours, and the right to bargain as a group. Unfortunately, the NRA did not work as its supporters had hoped. The administrator, the colorful former army officer Hugh S. Johnson, let the code-making get out of hand. Eventually there were hundreds of codes for different industrial groups. Johnsons patriotic speeches, with which he sought to sell the NRA to the American people, began to wear thin after a while. Johnson resigned in 1934, and the NRA was unanimously declared unconstitutional by the Supreme Court of the United States in 1935.
A special recovery agency for one major segment of the economy was the Agricultural Adjustment Administration (AAA), set up in the Department of Agriculture and supervised by Secretary Henry A. Wallace, a farm editor, scientist, and son of a former Republican secretary of agriculture. The AAA sought to eliminate overproduction of basic crops and thus to bring prices back to the average prices of the period from 1909 to 1914, a time of agricultural prosperity. The AAA had authority to buy surplus crops and to make payments to producers to restrict production. It concentrated at first on cotton, wheat, corn, and hogs, the most important products of the Midwest and the South. The plans of the AAA to restrict production and to raise prices were aided by a series of droughts and windstorms on the Great Plains, and farm prices rose steadily during Roosevelts first term.
The AAA was declared unconstitutional by the Supreme Court in 1936, but a so-called voluntary system was established by Congress in 1936 for the same purposes as the AAA. In 1938 the second AAA was created by Congress. This AAA was more complex and did not rely on a special tax, and it survived. The laws that later generations tended to think of as the New Deal were mainly reform laws. Franklin Roosevelt had been a reformer, a believer in progress and in government-sponsored social and economic change, from the time he first took public office in 1911. The reform impulse in America had been frustrated since the 1918 election victories by conservative politicians, who believed that government should not be involved in social reform. Now that impulse was revived in the Great Depression by President Roosevelt, often under pressure from congressional liberals, who were concerned with the development of personal freedom and social progress, and from reform movements outside the government.
Between 1933 and 1938, major legislation passed by Congress constituted the most sweeping reform program since the progressive period of 1901 to 1907. In general, these reforms increased the existing regulatory activities of the federal government. After Roosevelts administrations the government was involved in regulating many more areas of economic activity. Banking and currency were in obvious need of attention, since the banking system had virtually collapsed by March 1933 and the drain of gold had placed a great strain on the dollar. Banking legislation passed in the first Roosevelt term created insurance for small savings depositors, separated commercial and investment banking, and greatly increased the authority of the Federal Reserve Board, the government agency that oversees banking activity. In order to protect the currency, Roosevelt secured authority from Congress to take the United States off the gold standard and to devalue the dollar. However, once he discovered that devaluing the dollar did not in itself help to bring about economic recovery, he was unenthusiastic about tinkering with the currency.
Related to these reforms was the establishment of the Securities and Exchange Commission, an independent agency empowered to regulate the sale of stocks and bonds. The first chairman of the commission was Joseph P. Kennedy, an early Roosevelt supporter who was himself a wealthy speculator. In the campaign of 1932 Roosevelt had strongly criticized the tariff, or import tax, policies of the Harding, Coolidge, and Hoover administrations, blaming the decline of world trade on those Republican presidents. He appointed Senator Cordell Hull of Tennessee as secretary of state. A fervent free trader, Hull felt that his main duty should be to eliminate trade barriers by lowering import tariffs.
Some of the early New Dealers did not share Hulls enthusiasm. For more than a year they were able to block his program, while Roosevelt concerned himself with purely domestic efforts. However, Hull stubbornly persisted in his course, eventually winning the presidents support and the passage of the Reciprocal Trade Agreements Act, one of the most ingenious of the New Deal measures. This act did not attempt to alter existing import taxes by law. Hull and others knew very well how difficult it was to achieve tariff reform this way. Instead, the act authorized the president to negotiate agreements with other nations for a mutual lowering of import taxes. Such agreements did not have to be ratified by the Senate, and they could cut existing tariffs by 50 percent.
The most-favored-nation clause promised that the United States would offer the same tariff rates to all countries with which it had signed a commercial treaty. If the United States lowered tariffs further in a treaty with another nation, it would have to lower tariffs for all nations with most-favored-nation status. By this method benefits from these agreements were slowly extended uniformly to all nations with whom such agreements had been made. Although Hull did not secure free trade, he did significantly lower tariff barriers. At the same time, he provided a method for taking tariff making out of the hands of Congress. The federal government also became involved with housing.
In the depths of the depression many people lost their homes because they were unable to make payments on their housing loans, called mortgages. Lending institutions then seized these homes but were often unable to resell them or even rent them. Two of the most popular of the early New Deal agencies were the Home Owners Loan Corporation, which helped individuals by refinancing their home loans so that banks did not seize the homes, and the Federal Housing Administration, which helped banks by taking most of the risk out of home loans by insuring loans up to 80 percent of the value of the property. In his second term, President Roosevelt secured the passage of legislation that allowed him to set up the U.S. Housing Authority. This agency helped to rebuild slums and encouraged low-cost housing construction, of major importance because it was the first direct involvement of the federal government in building houses.
One of the most sweeping and imaginative New Deal reforms was the Tennessee Valley Authority (TVA), an independent federal corporation set up to improve conditions in a depressed area of 103,600 sq km (40,000 sq mi) in seven states. Chiefly responsible for this scheme was Senator George W. Norris of Nebraska, a progressive Republican who had almost single-handedly blocked the sale of government-owned power sites on the Tennessee River during the 1920s and who was a firm believer in government ownership and operation of public utilities such as power and water companies. Roosevelt was a widely known advocate of publicly owned power, which he saw as a yardstick with which to measure the real costs of private power companies. He was greatly attracted to the TVA because of its possibilities for the conservation of natural and human resources. The TVA built a series of dams for power production, flood control, and navigation improvement. It distributed its own water-generated, or hydroelectric, power to many who never before had enjoyed the benefits of electricity.
The TVA also produced cheap fertilizers. As a result, the standard of living of the people in its area steadily improved. The TVA was seen as a direct threat to the countrys private-power companies, and it was not imitated elsewhere, although the Roosevelt administration did build dams and power plants in the West. The most far-reaching of the New Deal reform measures was the Social Security Act of 1935. During the first two years of Roosevelts presidency a commission studied the problems caused by unemployment, old age, and physical disability and sought to determine the part that should be played by the federal government in alleviating these problems. Unemployment insurance, financed by a federal payroll tax paid in equal parts by employers and employees, was established as a joint federal-state program. An old-age pension system was set up to be administered by the federal government and financed by taxes on both employers and employees.
Other provisions of the Social Security Act provided federal money to encourage the states to care for dependent children and the blind. The Social Security Act did not include health insurance because the commission and the president considered that its inclusion would jeopardize the passage of the act (see Social Security). After the National Industrial Recovery Act was declared unconstitutional, Congress passed the National Labor Relations Act, which guaranteed to workers the right to organize and bargain collectively, free from interference by employers. The act set up the National Labor Relations Board as an independent agency. The board was a major force assisting the rapid growth of trade unions in the New Deal era. By statute it was required to be in favor of labor, and it played its role with enthusiasm. The Fair Labor Standards Act of 1938 was the last important act of the New Deal.
This measure set a minimum wage and a limit to the hours worked. It was moderate in its provisions, gradual in its application, and limited in its scope, but it established an important precedent. The New Deal programs were closely associated with the personality of President Roosevelt, about whom the politics of the 1930s revolved. His skill at clarifying problems and in explaining the solutions he and his associates had devised made him almost an intimate friend of the American people. For almost six years his popularity with the majority of the people grew. In 1934 the already huge Democratic majorities in Congress were increased, a rare thing for a party in power in non-presidential, or off-year, elections. In 1936 these majorities were raised even higher.
The number of Republicans left in the House was less than 100; only 17 Republicans remained in the Senate, and about half of them supported the New Deal. Not until the off-year election of 1938 did the Republican Party show any signs of renewed vigor. Leftists felt that he was missing a priceless opportunity to move toward socialism, or the direct involvement of government in the economy. From 1935 on, however, his principal opposition came from conservatives, especially the reviving business community. These elements had been so stunned by the depression and so grateful at first to Roosevelt for his efforts to promote recovery within the framework of the capitalist system that they scarcely opposed him. However, beginning in 1935, the economy began to recover and the labor movement, encouraged by New Deal legislation, began to be effective.
In addition the Supreme Court began to declare New Deal legislation unconstitutional. These developments encouraged conservatives to oppose the administration. The 1936 Election In 1936 Roosevelt won his greatest victory when he received more than 60 percent of the popular vote and won every state except Maine and Vermont. The Republican candidate, Governor Alfred M. Landon of Kansas, was a progressive himself and accepted much of the New Deal program while deploring how it was being administered. However, Landon was a dull campaigner.
His advisers pushed him to the right during the campaign, and he ended with very little support. Careful students of politics saw in the 1936 election a considerable amount of voting by social or economic class, with workers and those who lived in the cities voting overwhelmingly for the Democratic Party. Decline in Popularity Middle-class support for the New Deal began to slip away in 1937 and 1938, and the Democratic Party became more than ever the party of urban labor. Three major events seem to have contributed to this change. First was a series of sit-down strikes, in which the militant new unions of the Committee for Industrial Organization, later known as the Congress of Industrial Organizations (CIO), kept their men inside plants during strikes. This technique, used by the new unions in the automobile industry, violated property rights.
Many middle-class Americans were antagonized by this, as they were by the labor war between the CIO and the more traditional American Federation of Labor (AFL). The movement to enlarge the Supreme Court that he suddenly presented to Congress in 1937. Roosevelt argued that the court was behind in its work, partly due to the advanced age of many members. However, it was clear that what really irritated him was a series of decisions that had declared much of his program unconstitutional. A group of Democratic senators, including several former New Deal supporters, deserted the administration on this issue, and the president suffered his first major defeat in Congress. However, the court reversed the trend of its decisions after the court plan, and most New Deal legislation was allowed to stand.
The third event was probably the most damaging of all. It was the so-called Roosevelt recession that began in the fall of 1937 with another stock market crash. The recession lasted until after the resumption of large-scale government spending the following spring. This recession had been preceded by more efficiency in government and a balanced budget, courses promoted by conservative secretary of the treasury, Henry Morgenthau, Jr. The effect of the Roosevelt recession was to convince many people that the administration did not have any magic formula for prosperity and that the earlier recovery had been based on the government spending more money than it collected. In the elections of 1938 the Republicans made a comeback in several key industrial states and substantially increased their congressional representation.
It was freely predicted that the Republicans would regain the presidency in 1940. Many felt that Roosevelt would not run for president again, thanks to the tradition that no candidate ran for more than two terms. However, by the time the Democratic National Convention met in the summer of 1940, a grave international crisis was at its height, and Roosevelt was given his third nomination for president. Roosevelt defeated the Republican candidate, the lawyer and businessman Wendell L. Willkie, but he won by a much narrower margin than he had in 1936. Whether Roosevelt would have been renominated, and whether he would have accepted if nominated, in the absence of the world crisis will never be known. However, it is clear that his experience in foreign affairs had much to do with his winning an unprecedented third term.
Although in 1932, Roosevelt denied that he believed the United States should become a member of the League of Nations, he seems never to have given up the faith in collective security he had developed under Wilson. He was disappointed in the accomplishments of the league, but like many of the leagues supporters he blamed many of its troubles on the failure of the United States to join. After his election in 1932, but before his inauguration, he conferred with Hoovers secretary of state, Henry L. Stimson, and accepted the so-called Stimson Doctrine of refusing to recognize the recent conquest of Manchuria by Japan. Thus, before he had become president, one of the cardinal principles of Roosevelts foreign policy, opposition to Japanese efforts to dominate East Asia, had been established. Another basic Roosevelt foreign policy was the Good Neighbor Policy toward Latin America.
The phrase good neighbor, used by the president in his first inaugural address, meant in practice that the United States would no longer intervene in Latin America to protect private American property interests. American support for the savage Cuban dictatorship of Gerardo Machado was withdrawn, and a revolution soon turned him out. The removal of the last U.S. Marines from Haiti in 1934 ended direct financial control by the United States. Secretary of State Hulls reciprocal trade program, which resulted in several agreements with Latin American republics, lowered trade barriers on some goods and was thus popular in many Central and South American nations. Hull went to the Pan American Conference at Montevideo, Uruguay, in 1933 to give full support to the important principle that no state has the right to intervene in the internal or external affairs of another. The administration acted in accordance with this principle when Mexico seized foreign-owned oil properties. Unlike Great Britain, the United States did not break off diplomatic relations with Mexico.
Eventually the American companies worked out their own settlement with the Mexican government. The ambassador to Mexico, Josephus Daniels, was Roosevelts old chief in the Navy Department. The actions of these two men did more than anything else to convince most of the Latin American governments that the United States could be a good neighbor. Toward Europe, President Roosevelts policies seemed at first to be almost isolationist, in spite of his background. He did agree to go ahead with U.S. participation in the World Economic Conference, scheduled to take place in London in the summer of 1933.
President Hoover had promised U.S. attendance. However, Roosevelt did not have much faith in the ability of the conference to agree on measures to stabilize the value of the dollar. Except for Hull, most of the U.S. delegates were of minor importance. Roosevelt eventually undercut the conference by saying that he had little interest in currency stabilization and by announcing that he would work for economic recovery in other ways.
He was strongly influenced by advisers, who had no faith in European central bankers and felt that there was nothing to be gained by tying the U.S. economy to a hazardous international agreement. Unquestionably, Roosevelts action was made easy by the prevailing isolationism in the United States. Some said the distress of these years was because of disillusionment caused by U.S. participation in World War I. Encouraged by congressional investigations and the works of a number of writers and politicians, many Americans felt that the United States should have stayed out of that conflict.
This feeling was so strong that Congress passed a number of neutrality acts, which among other things forbade private American loans to nations that werent paying their debts to the United States. Other acts required the president to place an embargo on the shipment of arms to nations at war, authorized him to keep U.S. citizens from sailing on the ships of those nations, and forbade the carrying by American ships of guns or ammunition to countries at war. Roosevelt sought but was denied the right to discriminate between aggressors and their victims. A majority in Congress believed that trading arms with countries that were at war was a dangerous activity. Some belligerent country, isolationists argued, would inevitably attack some of the shipments and draw the United States into another European war. However, the balance of power in Europe was already shifting, and President Roosevelt was unable to pursue his domestic program without paying some attention to the international situation. During his first term, Italy, led by the dictator Benito Mussolini, conquered the eastern African empire of Ethiopia, in spite of mild economic punishment imposed on Italy as an aggressor by the League of Nations. Soon afterward, Germany, headed by the dictator Adolf Hitler, placed troops and weapons in the Rhineland in violation of the Treaty of Versailles, which had been signed at the end of World War I. In the summer of 1936, Italy and Germany gave vital assistance to the military forces leading a revolution against the Spanish republic.
Not only did Britain and France do nothing, but the United States put its own unofficial embargo on the shipment of weapons to Spain, a course legalized by Congress when it convened in 1937. The U.S. policy toward Spain was isolationism carried as far as it could be carried, since under international law the government of Spain had the right to carry on trade, and the rebels were without legal status. One of the most significant evidences of Roosevelts growing concern with the precarious state of world peace came soon after his reelection in 1936. He journeyed by sea to Buenos Aires, Argentina, to attend a special Inter-American Conference for Peace, where he warned that non-American nations proposing to commit acts of aggression against us will find a hemisphere wholly prepared to consult together for our mutual safety and our mutual good. Less than a year later, following the renewal of Japanese attacks on China, Roosevelt in a dramatic speech in Chicago proposed that a quarantine be placed on aggressor nations. Chiefly because of the lack of enthusiasm of Secretary Hull and the British, nothing came directly out of this proposal. However, it was a significant speech because it displayed Roosevelts long-held belief in a system of collective security.
Soon afterward, the president requested a billion-dollar appropriation for naval expansion, and then almost at once he asked for even more. Congress obliged, and the defense build-up was under way. The amount of money spent on defense grew enormously. The United States under Roosevelt was quickly preparing for a new war, which seemed close at hand. In March 1938 Germany annexed Austria and in 1939, it took over the remainder of Czechoslovakia. Large parts of Czechoslovakia had already been lost when Britain and France agreed to allow Germany to absorb German-speaking areas of Czechoslovakia under the Munich Pact in 1938.
At the end of August 1939 the Germans concluded a nonaggression pact with the Union of Soviet Socialist Republics (USSR), which ensured that, if Germany went to war with France and Britain on one front, the Germans would not have to face the USSR on a second front. When the Germans invaded Poland on September 1, 1939, the Poles appealed to France and Britain for help. There was little that the Western powers could do to prevent the rapid occupation of Poland by the Germans, and, in the east, by the Soviets, except to declare war on Germany, which they did on September 3, 1939. Defense Buildup Roosevelt at once convened a special session of Congress and asked it to lift the embargo on the sale of munitions (weapons), a provision that chiefly hurt the Western countries opposed to Hitler and Germany, known as the Allies. After a sharp debate, Congress complied with the request. It passed the so-called cash-and-carry act, which permitted Americans to sell munitions to nations able to pay for them in cash and able to carry them away in ships registered abroad. Congress did not change any other provision of the neutrality acts, however (see World War II).
Unlike President Wilson in 1914, Roosevelt made no secret of his partiality for Britain and France. He loathed Hitler and his National Socialism, or Nazi, Party and considered them a threat to U.S. security. When the Germans quickly defeated Denmark, Norway, the Netherlands, Belgium, and France in the spring of 1940, Roosevelt came quickly to the aid of the British, now carrying on alone against Germany. Not only did he ask Congress for more defense money, but he took steps to establish a kind of coalition government. He brought into the two key military posts in the U.S. Cabinet distinguished Republicans who shared his alarm at the Nazi threat. Henry L.
Stimson became Roosevelts secretary of war, and Frank Knox, a Chicago newspaper publisher and Republican candidate for vice president in 1936, was made secretary of the navy. Roosevelt also appointed leaders of the business community to a defense advisory commission. In September 1940 Roosevelt secured the passage of the United States first peacetime conscription measure, the Selective Training and Service Act (see Selective Service). Under it, men between 21 and 35 were required to register for a year of military training. Roosevelt was also impressed with the great danger to the survival of Britain caused by German planes and submarines. Thus, in September he also transferred 50 U.S. destroyers to Britain in exchange for eight naval bases in the western hemisphere. Fortunately for the success of the destroyers-bases arrangement, the 1940 Republican candidate for president, Wendell Willkie, endorsed it.
Isolationists and others who disliked Roosevelts policy of aid to Britain thus had no major party alternative in the election. Lend-Lease Following his reelection in 1940, President Roosevelt moved ahead with the dual policy of building up U.S. defenses while giving assistance to those countries resisting the aggression of Germany, Italy, and Japan. The major legislation was the Lend-Lease Act of March 1941, passed over the bitter opposition of the isolationists in Congress and their national organization, the America First Committee. The Lend-Lease Act authorized the president to transfer to victims of aggression such military equipment (a term interpreted to include food and clothing) as could be produced in the United States and acquired by the government. This act, which was destined to be extended for the length of World War II, began with an appropriation of $7 billion.
It was an emphatic announcement of support for the hard-pressed British. When Germany attacked the USSR in June 1941 and British Prime Minister Winston Churchill welcomed the Soviets as allies, Roosevelt extended the privileges of lend-lease to the USSR. Thus, the United States was virtually at war in the spring and summer of 1941, sending aid to Britain and the USSR and even patrolling the Atlantic Ocean with the U.S. Navy. Roosevelt officially became wartime president after Japan attacked the United States on December 7, 1941. Although he had opposed Japanese expansion in Asia from the time he took office, Roosevelt was kept from assisting China to any extent by the difficulties of geographical distance and by American isolationism. When the Japanese attacked China again in 1937 without a declaration of war, terming the hostilities a mere incident, Roosevelt refused to recognize the existence of a state of war and thus avoided the application of the neutrality laws.
Such enforcement would have discriminated against the Chinese, and Roosevelt was as openly pro-Chinese in Asia as he was openly pro-British in Europe. In 1940 the administration notified Japan that the existing commercial treaty between the two countries would be ended. The administration increased U.S. aid to China and placed an embargo on the export of iron and steel scrap, an important part of U.S. trade with Japan. In Japan, militarists took complete control of the government in 1941 and prepared for a showdown. The carrier-based airplane attack upon the U.S. naval base at Pearl Harbor, Hawaii, caught the U.S.
garrison by surprise and resulted in the sinking or damaging of a large number of ships. The Japanese did not succeed in destroying any aircraft carriers, however, and they were unable or unwilling to follow through with an invasion of Hawaii. At the request of Roosevelt, who called December 7 a day which will live in infamy, Congress declared war on Japan. When Germany and Italy came to the assistance of their Japanese allies by declaring war on the United States, Roosevelt and Congress reciprocated by declaring war on them. Roosevelt threw himself into the role of wartime leader with determination and enthusiasm. He was convinced that the security of the United States depended on the defeat of Germany, Italy, and Japan. He was also certain that the greatest threat came from Germany.
Even before Pearl Harbor he had spoken with Prime Minister Churchill in a naval vessel off Newfoundland, Canada, and had joined in issuing the Atlantic Charter on August 14, 1941. This document denied any desire for any territorial changes not desired by the peoples concerned. It also stressed the goals of improved economic conditions, freedom from fear, and the disarmament of aggressors. This document reflected many of Woodrow Wilsons ideas that had so strongly influenced Roosevelt, but it is significant that it is much more general than Wilsons Fourteen Points, a program to establish a basis for lasting peace following World War I; it included a proposal for the League of Nations. Roosevelt was determined not to repeat what he considered Wilsons mistakes: the announcement of specific objectives, the refusal to bring Republicans into the Cabinet, and the failure to involve Republicans in diplomatic negotiations in preparation for peace. Roosevelts leadership included a number of activities.
He had to decide, in consultation with Churchill and the Soviets, upon basic military strategy. He had to promote defense production without creating inflation, and he had to determine the allocation of the goods among the several theaters of war and the various Allied powers. In these activities he had the tireless assistance of his former relief administrator, Harry Hopkins, who became his principal diplomat. The president also had to oversee the buildup of an enormous army and navy. By the end of the war more than 15 million people had served in the armed forces of the United States. Finally, Roosevelt had to explain war developments to the American people to maintain their support, which was essential to victory. In that year four major events took place: the defeat of the Japanese navy at the Battle of Midway in the mid-Pacific; the containment of the Japanese southern thrust at Guadalcanal, in the Solomon Islands; the successful Allied invasion of French North Africa; and the Battle of Stalingrad, the beginning of the end for the Germans in the USSR (see Volgograd).
In January 1943 Roosevelt and Churchill met at Casablanca, Morocco, to make further plans and to confer with French leaders. At Casablanca Roosevelt announced the policy of insisting upon unconditional surrender by the enemy. In November 1943 the president met with Churchill and the Chinese leader, Chiang Kai-shek, at Cairo, Egypt. There a number of plans for the war against Japan were worked out. Roosevelt also conferred twice with Soviet leader Joseph Stalin. Following the Cairo conference, he and Churchill journeyed to Tehrn, Iran, to meet Stalin. The Chinese were not invited, since the USSR was not at war with Japan. At Tehrn the leaders agreed upon an invasion of France by U.S.
and British forces in the spring of 1944, to take some of the pressure off the Soviets. Finally, the Big Three, as they were called, conferred again in February 1945 at Yalta, in Crimea. The Yalta Conference, occurring as the European war seemed about to end, resulted in several agreements, including: the nature of the postwar international organization (later called the United Nations); the military occupation and free elections in eastern Europe; the postwar division and occupation of Germany; and the entry of the USSR into the war against Japan following the end of the European war (see Cold War). In the early spring of 1945 he went to Warm Springs, Georgia, in an effort to recapture his flagging energy. There.
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