FDR’s New Deal 1933

• in America a more aggressive attempt to lessen the impact of the Depression was under way
• newly elected President Roosevelt promises change and implements the revolutionary
ideas of British economist John Maynard Keynes
• America faced a problem: the economy had stalled, people not only could not buy things,
they would not (opting instead to save what little they had, often in their homes not in banks )
• many banks had failed and those that survived would not take risks: curtailing the
loaning of money to people or businesses
• desperate find a solution and to stop the destructive bank runs, Washington decided to
play an active role to bring economic stability
• FDR closed the banks (putting in place a “Bank Holiday”) and started to “print money”, which
enabled him to pump money into the system, prop up the banks, and stop the economy’s
downward deflationary cycle… the banks reopened with unlimited amounts of currency
• FDR’s government will implement programs designed to stimulate the economy and
provide work, all while running a budgetary deficit
• the government began massive public works projects to provide employment: it was
called the “New Deal” “I will directly
finance budget
“Happy “We have nothing to deficits, and build a
days are fear but fear itself” few dams”
here again,
just give me “Deficit
a chance” spending
is needed”

Roosevelt Keynes
 No regulation
The economic spectrum 1933
Balanced budgets
Government regulation of business Self correcting market
Stimulus spending Free market

Socialist Liberal Conservative

Deficit Spending Laissez-faire

Interventionist / active Government Unfettered Business

John Maynard
Keynes
Adam
“Me too”
Smith

• more government control / ownership

• less government control / ownership
• governments responsible for health of
• individuals responsible for their own
economy
• predominant economic theory starting welfare
• predominant economic theory prior to
with and after the New Deal
the New Deal
After Before
 Impressed by the neighbours 1933-35
• Americans will be kept up-to-date of FDR’s initiatives via radio broadcasts known as
“fireside chats”
• perhaps Canada’s leader, RB Bennett, heard one or two of them, for America’s
innovative leader caught Bennett’s attention
• the impressed prime minister rushed to visit him in Washington
• the Depression, and political developments provincially, had by now taken their toll on
a beleaguered Bennett, who was by now a somewhat more receptive leader
• FDR pushed for a free trade agreement with Canada
• he convinced Bennett to accept a trade treaty agreement in principle
• for Bennett this marked a significant shift on the political spectrum… but it was just the
beginning
• facing in 1935 both an election and an unremitting Depression, Bennett changed his
approach

“Darn
“Our unions”
“So delighted
“Odd Conservative
to have my win in Ontario
thing to
photo taken sends a clear
say”
with you sir” message to Mr.
Bennett”
 Copy cat PM 1935
• it was then that Bennett too (like FDR) hit the airwaves, declaring that the free market
system had failed
• indeed, inspired by Roosevelt’s New Deal, he proposed his own reform measures to the
shock of wealthy Canadian businessmen
• these included: health and unemployment insurance, maximum hours of work, a
minimum wage, and aid for farmers
• the Employment and Social Insurance Act was passed
• these measures, however, did little to help the thousands already unemployed
• with his embrace of a (seemingly) radical reform platform, Bennett was clearly also
influenced by the policies of Canada’s new left
• the policies of Woodsworth and the (recently created) CCF became those of Bennett…
and so too in time his successor, King
• the question was, could Bennett pull it off?
“Capitalism creates inequality and
“Selfish men will whisper greed, it has given us the Great
against us [but these Depression and it seems a
reforms are a necessary deathbed conversion”
response to the] crash and
thunder of toppling “I am for reform and to my
capitalism” mind, reform means
government intervention, it
means government control
and regulation, and it means
the end of laissez-faire”
 The end for one, rebirth for another 1935
• it was too little too late for Bennett, he went down with his ship, losing the election
• King, the victor in a majority, interestingly won only the same percentage of the popular
vote as he did in his 1930 electoral loss
• many votes that Bennett needed went to the new parties (CCF and the Socreds)
• King referred his predecessor’s New Deal legislation to the Supreme Court and as a
result many of its important provisions were declared unconstitutional
• back in power once again, Mackenzie King was no reformer… the cautious Liberal PM
does not undertake any new social policy initiatives until economy dips again in 1937
• within a year his government is financing a variety of work projects
• King will finally, and cautiously, embrace a Keynesian (deficit financing) budgetary
approach in 1939... bringing in national social policies “through the back door”
• it is only the start of World War Two that truly brings an end to Depression-era
hardships
“A house is not built from the top
down… to seek to erect an ambitious 1
program of social services upon a
“We never stationary or diminishing national
“l can
believed him” income is like building a house upon
do this”
the sands”
2
“It’s clearly “This war will permit
unconstitutional” unprecedented increases in
government activities and
expenditures needed to break the
Depression’s hold”
 Internal tensions 1937-40
• the Great Depression brought heightened tensions between the federal and provincial
governments
• each sought to pass costly responsibilities onto the other
• after his return to power King attempted to address the issue by creating a Royal
Commission to delve into these shared responsibilities and economic turmoil
• eventually the Rowell-Sirois Report made a number of recommendations, including
equalization payments between the provinces
• the provinces feared losing powers to Ottawa, but nevertheless wanted federal
assistance to deal with the economic crisis
• to King’s chagrin, it also recommended Ottawa pay for unemployment insurance
• yet even the suggested payments sparked controversy: the wealthier provinces did not
want to support their less affluent neighbours
• the advent of World War Two quickly eased the economic hardship and with it the sense of
urgency attached to the recommendations… as a result little actually happened at the time

“It all can’t come “I can’t stand “Oh I’ve told the
from the top you either” PM on numerous
down, Ottawa occasions that
cannot afford all we need money”
these costs”
Hepburn Aberhart
 Totalitarianism 1930s
• democracies typically see voters elect centrist parties, or just to the left or right of centre
• these parties accept a balance between private and state ownership of services
• yet in times of great upheaval, like the Great Depression, political parties from the Left or
Right wing are often elected, offering as they do radical solutions to big problems
• take for example the Social Credit in Alberta, a party both new and radical
• in times of deep political crisis, extreme parties often seize control of countries
• this occurred in Europe in the 1930s, as communist and fascist governments appeared
• these were highly nationalistic totalitarian governments, in which the state controls all
aspects of life
• laws and controls (censorship) were strict in these military states (with dreaded police
forces) and conformity essential
• a charismatic and dictatorial ruler was standard fare, so too terror and fear

“Neither the
Liberals or the
Conservatives will
get my vote this
time around”
The two extremes have similarities; the spectrum is not
strictly linear
 On the far Left: communism 1930s
• in a leftist state, the economy is controlled by the government
• when left-wing ideology is taken to extremes, it can lead to a communist state
• the first nation to succeed with a communist experiment was the Soviet Union
• there, the communist state eliminated private ownership of property, controlling the
means of production and distribution
• the idea of collective well being was stressed in the Soviet Union, the rights and desires
of the individual being secondary to those of the state in a ‘classless society’
• blended with communist ideology was nationalism, the state controlled the media and
restricted movement within the country
• the supreme leader in the Soviet Russia was Joseph Stalin
• under his rule Soviet Communism translated into a totalitarian military state (with
elements of communism thrown in for good measure)

“Everything bought or “Some call it

sold here is controlled by Stalinism, that suits
me” me just fine”
“We are united
in our hatred
of capitalism”
 Stalinism in action 1930s
• after the death of the Soviet Union’s founder, Lenin, Stalin – a violent, professional
revolutionary – took power through the party apparatus
• the means of production came under government control (central planning)
• a series of five-year plans were implemented to industrialize the economy
• those opposed to Stalin’s changes (and the need to make personal sacrifices for the
state) were dealt with ruthlessly
• millions sent to forced labour camps – the Gulag
• when capitalist Ukrainian farmers (kulaks) resisted agricultural collectivization
they were crushed, with seven million dying in “terror famine”
• during the Great Terror (1933-1938) millions suspected of opposition to Stalin’s
regime were eliminated (this included purges of the army’s officer class)
• Stalin’s regime was also infamous for relocations (transplanting out-of-favour
peoples within the USSR to new locations)
“Work harder comrades, we
“Keep out the
must finish this ‘hero project’ for
Kulak traitors”
Stalin”
“The needs of
the state
outweigh the
needs of the few
or the one”
 On the far Right: fascism 1930s
• in a capitalist state, the economy is controlled by private individuals and corporations
• right-wing ideology, when taken to extremes, can be transformed into a fascist state
• fascist states require blind allegiance to a dictator (one-man or one-party rule)
• these states typically are based on military power, with power maintained by the leader
inventing (adopting) a mythology that justifies the dictatorship’s every move
• public displays of symbolism and pageantry also help maintain a hold on the state
• individual rights are limited and minorities marginalized
• the fascist party stresses collective national goals
• external and internal enemies must be overcome
• the earliest fascist state was that of Mussolini’s Italy
• its leader was a WW1 hero, who abandoned socialism for an expansionist revolutionary
nationalism

“Hans in row 2, take

“A spectacle to “Just like the Teutonic “Looking back, I’m so
one tiny step to your
cherish” knights of old” glad I switched sides”
right”
 Fascism’s first state leads the way 1922-39
• feeding off his nation’s disappointments after the war’s end, Mussolini and his “Black
Shirts” take power in 1922
• Italy under Mussolini’s lead will seek to emulate the past glories of Ancient Rome
• his Fascist party represented a revolt against democratic values, including equality and
individual liberty
• the state was all important and controlled and monitored all aspects of life
• Mussolini’s fascist state preached ultra‑nationalist beliefs
• the individual was only important in their ability to serve the state
• Il Duce uses fear (of communist revolution) to seize and maintain his hold on power
• the family was promoted, and backed by a “celibacy tax”
• fascist Italy will be characterized by: banned political parties and labour unions,
censored newspapers, widespread propaganda, and a secret police force
• despite this, his corporatist state is not entirely unpopular

“I don’t know about “Outside the state

the whole uniform ‘no human or
“Yes I am Il Duce” thing, but ‘that spiritual values exist’
“Watch and see how a admirable Italian ”
real, well-dressed fascist gentleman’ impresses
dictator comports me”
himself”
 Fascism’s Nazi state
1933…
• the German version of fascism, Nazism, offered more of the same, only on a grander
scale (with Mussolini serving as a trailblazing role model for Hitler for a short time)
• Hitler tried, and failed, to seize power in the early 1920s a year after Mussolini’s success
• Hitler’s fascist regime shared many characteristics with Il Duce’s totalitarian state
(corporatist, heavily-censored police state)
• a great orator, Hitler too sought to restore past glories (and establish a Third Reich)
• his nationalistic state, however, had superimposed upon it the unique belief system of
the Fuhrer (Aryan superiority and an intense hatred of Jews)
• more specifically, Hitler will win over Germans (his ‘master race’) by blaming the Jews,
Communists and Versailles for the nation’s ills
• in the Nazi Germany a totalitarian state was buttressed by mass rallies, a secret police (with
sweeping powers to protect the state and ensure the people’s loyalty) and propaganda
• as in fascist Italy, in Hitler’s realm the nation (Volk) was more important than the individual
• youth groups were crucial: boys joined the ‘Young Volk’ at 10 years, the ‘Hitler Youth’ at 14
• girls became ‘Young Maidens’ at age 10 and entered the ‘League of German Maidens’ at 14
“As minister of propaganda I remind
you of our past glories: the Holy “You’re a chip off the old “Beware of
“Nice day for a “You’ll make a
Roman Empire and Imperial block” Jews and
party, isn’t it” fine soldier lad”
Germany” Reds”
 A Nazi storm engulfs the world 1933-39
• Hitler’s Nazi state rose to prominence in 1933 and soon the world learned of his hated-
filled racist ideology, witnessing book burnings and anti-Semitic laws and much more
• they also watched Hitler’s claims of Aryan racial superiority fall flat in the sporting realm
• Nazi champion in the boxing ring, Max Schmeling, lost to Black American boxer Joe Louis
• when Germany hosted the Olympic Games it went all out to put on quite a show,
constructing magnificent stadia (at a time when it was also building concentration camps)
• America considered boycotting the Nazi games but in the end its athletes went to Berlin
• there to Hitler’s chagrin, a Black American sprinter named Jesse Owens stole the show,
winning gold and dispelling before the world Hitler’s warped racial theories
• but sadly such sporting setbacks did not divert Hitler from his chosen path of conquest
• as the Nazis built a formidable military machine and took control of Austria and part of
Czechoslovakia toward the decade’s end, Canada found itself in a difficult position
• all roads seemed to be leading to war, but this was the last thing Canada’s leader
wanted

“Read it “Don’t read “This time, he “See it and “Believe

“Support it”
and weep” it, burn it” can’t take it” be amazed” it”
 Ignoring the gathering storm clouds 1931-39
• as Nazi (not to mention Italian and Japanese) aggression intensified during the decade
Canada found itself joining the ranks of the appeasers seeking to avoid a conflict
• PM Mackenzie King, who had not forgotten the turmoil that came with World War One,
counseled restraint (and non-intervention) in the decade’s earliest flashpoints: the
Japanese invasion of Manchuria and Italy’s invasion of Ethiopia
• when an ugly civil war broke out in Spain, and the Germans and Italians got involved,
Ottawa remained on the sidelines (standing with those who didn’t)
• when German aggression became the world’s focus, Canada still hoped that a policy of
appeasement would satisfy Hitler and prevent a war from starting
• the Nazi invasion of Czechoslovakia in 1939, however, marked the end of the road for
those deluding themselves that Hitler’s claims had reasonable limits
• the prime minister at this point had to face the inevitable, war would come if Hitler took
but one more aggressive step… and this of course he did (invading Poland later that year)
• Canada would enter the war in support of Britain, but comforted in the knowledge that
our neighbour America – for the moment not involved – would let no harm come to us
“The Canadians and the “It’s best to do
“My country choses to “Mackenzie, have no fear,
rest of them will do nothing I tell
bury its head in the sand” America has your back”
nothing” you”