The First 100 Days of President Franklin Delano Roosevelt

 

During the past few years there has been a lot written comparing the first hundred days of the FDR Administration with the first hundred days of the Obama Administration.

Since many of us were not even alive during the dark days of the Great Depression, I think that it is appropriate to examine exactly what federal legislation was passed during those scary dark days.

I think that I will list each one passed and elaborate on them individually.

Here is the list:

March 9, 1933: Emergency Banking Relief Act

March 20, 1933: Economy Act of 1933

March 31, 1933: Civilian Conservation Corps Reforestation Relief Act

May 12, 1933: Federal Emergency Relief Act

May 12, 1933: Agricultural Adjustment Act

May 18, 1933: Tennessee Valley Authority Act

May 27, 1933: Securities Act

June 13, 1933: Home Owners’ Loan Act

June 16, 1933: Glass-Steagall Act (Banking Act of 1933)

June 16, 1933: National Industrial Recovery Act

June 16, 1933: Farm Credit Act of 1933

It should be noted that the President was not sworn into office until March 4, 1933. This was the last time that this would happen. The 20th Amendment changed the date to January 20th but it wouldn’t take effect until 1937.

It should also be noted that Congress was not in session on Inauguration Day. President Roosevelt after he was sworn in called a special session of Congress from March 4, 1933 to March 6, 1933 to address the crisis. The regular session of Congress was due to begin on March 9th so basically the President was starting their session early.

Let’s discuss the Emergency Banking Relief Act. Here are its provisions:

Title I, Section 1. To affirm any orders or regulations the President or Secretary of the Treasury had given since March 4, 1933.

Title I, Section 2. To give the President the ability to declare a national emergency and have absolute control over the national finances and foreign exchange of the United States in the event of such an emergency.

Title I, Section 3. To authorize the Secretary of the Treasury to order any individual or organization in the United States to deliver any gold that they possess or have custody of to the Treasury in return for “any other form of coin or currency coined or issued under the laws of the United States”.

Title I, Section 4. To make it illegal for a bank to do business during a national emergency (per section 2) without the approval of the President.

Title II. To enable the Comptroller of the Currency (a post in the US Treasury) to take complete control of and operate any bank in the United States or its territories and to establish the terms and conditions under which bank is administered.

Title III. To allow banks to disown their debts with the permission of the Comptroller of the Currency and a majority vote of their stockholders.

Title IV, Section 401. To allow Federal Reserve banks to convert any US debt obligation (such as a bond) into cash at par value and any check, draft, banker acceptance, etc, into cash at 90% of its apparent value.

Title IV, Section 402. To allow the Federal Reserve banks to make unsecured loans to any member bank at an interest rate of 1% over the prevailing discount rate.

Title IV, Section 403. To allow Federal Reserve banks to make loans to anyone for up to 90 days if the loan is secured by a general obligation of the United States (such as a Treasury bond, for example).

Title V, Section 501. Appropriation of $2,000,000 to the President for carrying out this legislation.

Title V, Section 502. (a severability clause)

 

This was introduced to a joint session of Congress and was passed the same evening amid a lot of chaos and confusion. There was only one copy of the bill and most members of Congress voted on it without even reading the provisions of the bill. The Clerk had the only viable copy of it.

On March 5th, the President had declared a “Bank Holiday” and all banks were required to close. The Federal Reserve had assured that all re-opened banks would have an unlimited supply of cash to guarantee deposits.

Prior to the Bank Holiday there were several runs on banks and many people were hoarding their money no longer trusting banks and there was a real concern that the public would no longer trust banks.

On March 12, 1933, President Roosevelt conducted his first Fireside Chat. He explained this new law to the public and assured them that the newly re-opened banks would be safer than stuffing your money in a mattress.

On March 13, 1933, the banks re-opened. People stood in line to return their cash that they had stashed. Within two weeks, Americans had returned more than half the cash that they had hoarded.

This law was only a temporary measure. The Banking Act of 1933 replaced this temporary measure and it also set up the Federal Depository Insurance Corporation (FDIC) which guaranteed deposits up to a certain amount. This law ended the bank runs that were so prevalent during the Great Depression.

Next is the Economy Act of 1933. This act was fairly controversial due to the fact that it reduced the benefits of veterans from World War I and the Spanish-American War. As a result, many veterans lost disability pensions or they were greatly reduced. This measure also substantially cut the salaries of federal employees. This was an attempt to cut the federal budget deficit.

This law had little effect on the economy or the budget and was short lived.

The next measure was the Civilian Conservation Corps Reforestation Relief Act (CCC). This measure became law on March 31, 1933. This act was a public work relief program for unemployed men age 18-25, providing unskilled manual labor related to the conservation and development of natural resources in rural areas of the U.S. from 1933 until 1942. Each enrollee was trained at an army camp and once work began they were paid $1 a day plus room and board. Over three million men worked for the CCC and it was one of the most popular programs of the New Deal.

All 48 states had CCC projects including the territories of Alaska and Hawaii as well as the Commonwealth of Puerto Rico.

It was only considered a temporary program and Congress ended its funding on June 30, 1942 during World War II.

The next act was the Federal Emergency Relief Act (FERA). This became law on May 12, 1933. It replaced the Emergency Relief Administration which was passed under the Hoover Administration to provide loans to the states in order to operate state relief operations.

The main difference between the two was that Hoovers provided loans and Roosevelt’s provided grants to the states to provide emergency relief to the citizens.

FERA’s main goal was to alleviate unemployment by creating unskilled jobs in the state and local government. The theory was that even though it was more expensive to hire someone then to simply hand out the money, it was considered better for the individuals self worth if they actually worked for the money. Between May of 1933 and December of 1935 FERA gave states and localities $3.1 billion. FERA provided work for over 20 million people and developed facilities on public lands across the country.

Faced with continued high unemployment and concerns for public welfare during the coming winter of 1933-34, FERA instituted the Civil Works Administration (CWA) as a $400 million short-term measure to get people to work.

FERA utilized quite a few diverse projects including construction, projects for writers, artists and musicians as well as the production of consumer goods.

FERA also instituted adult education programs as well and FERA employed over 2,000 teachers nation wide.

FERA was terminated in 1935 and many of its projects were taken over by the newly formed agencies of the Works Progress Administration (WPA) and the Social Security Administration.

The Agricultural Adjustment Act (AAA) was passed on May 12, 1933. This measure was passed to restrict agricultural production nation wide by paying farmers for reducing crop area thus enabling crop prices to rise. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. It was considered the first modern farm bill. In 1936, the Supreme Court case United States v. Butler declared the Act unconstitutional for levying this tax on the processors only to have it paid back to the farmers. Regulation of agriculture was deemed a state power. However, the Agricultural Adjustment Act of 1938 remedied these issues.

On May 18, 1933 the Tennessee Valley Authority Act became law. This act set up the first government run public utility. It provides electricity to the states of Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina, South Carolina, West Virginia, Indiana and Virginia.

Previously, many of these areas were without electricity and extremely poor. This measure is still in force today and has been highly successful.

On May 27, 1933 the Securities Act of 1933 was passed. It requires that any offer or sale of securities using the means and instrumentalities of interstate commerce be registered pursuant to the 1933 Act, unless an exemption from registration exists under the law.

This was the first federal legislation to regulate the offer and sale of securities. Prior to this act, states regulated securities.

The reason this act was passed because it was felt that more regulation was needed in this area and abuses in the way securities were bought and sold was one of the primary contributors to the Stock Market Crash of 1929On June 13, 1933 the Home Owners’ Loan Corporation Act was passed. This act set up the Home Owners’ Loan Corporation (HOLC) whose purpose was to refinance home mortgages currently in default to prevent foreclosure. This was accomplished by selling bonds to lenders in exchange for the home mortgages. Through its work the HOLC prevented over a million homes from being foreclosed.

When the HOLC ended its operations in 1951 and liquidated its assets, it actually turned a small profit.

The Glass-Steagall Act (Banking Act of 1933) became law on June 16, 1933. This act set up the Federal Deposit Insurance Corporation (FDIC) and it instituted some banking reforms as well. It also separated investment banking from depository banking.

This act was repealed in 1999 and many believe that as a result the financial crisis of 2007-2010 was actually made worse.

The FDIC is still in force by its own act, the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA).

On June 16, 1933 the National Industrial Recovery Act was adopted. This authorized the President to regulate industry and permit cartels and monopolies in an attempt to stimulate economic recovery, and established a national public works program.

Section 7 (a) guaranteed the bargaining rights of employees and it is considered the first law which guaranteed the workers right to organize.

This act set up various public works projects nationwide and by permitting some monopolies it was hoped that between the two it would stimulate the economy.

It was run by two agencies, the National Recovery Administration (NRA) for the business and industry part and the Public Works Administration (PWA) for the public works end.

On May 27, 1935 the Supreme Court declared the NRA unconstitutional under the grounds that the Executive Branch had exceeded its authority in writing codes without the consent of the Legislative Branch.

On the same day, June 16, 1933, the Farm Credit Act of 1933 was enacted creating the Farm Credit Administration (FCA).

The FCA regulates and examines banks and associations of the Farm Credit System. It helped farmers to refinance mortgages over a longer period of time at below market interest rates. Many farmers who were affected by the Dust Bowl were able to save their farms because of this act.

This one hundred day marathon was the most productive Presidency in American history. Not every measure that President Roosevelt tried worked. Many feel that the WPA was a complete failure. At least he tried to make conditions better for Americans.

Many of his measures helped pull the US out of the dark days of the Great Depression.

Many people believe that World War II actually ended the Great Depression. That may be the case but I believe that the measures tried by the Roosevelt Administration would have eventually done the trick; it just would’ve taken longer.

There were more things that the President did by executive order; I’m just listing the statutes here.

Much of the opposition to the New Deal are the same worn out arguments that we hear from Republicans in 2010. As usual, no new ideas. They merely want to return to the laisse faire mentality of the Harding, Coolidge, Hoover years.

In my next installment, we will examine the accomplishments of President Barack Obama. Although they are not as profound as President Roosevelt’s, they are pretty amazing in their own right.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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