New DealDid these actions help or hinder the United

States in its Efforts to Rise From the Depression?

“The Only Thing We Have to Fear is Fear Itself” Franklin D. RooseveltThe Roosevelt Administration initiated

policies that supported and regulated agriculture and industry

Legislation improved labor conditions and increased power of the unions

Programs of the New Deal: CWA, TVA, FDIC, SEC, Social Security

New Deal created new opportunities for women and minority groups

Roosevelt Takes Office in 1932

Roosevelt knew that he had to act with a nation in the midst of a Depression, some people had not worked in three years or more

Formed “Brain Trust,” a group of advisers made up of professors, lawyers, and journalists

Worked to formulate set of policies to relieve the problems plaguing many Americans

New Deal, phrase from a campaign speech in which Roosevelt had promised, “a new deal for the American people.”

Focus of New DealThree general goals: a. Relief for the needy b. Economic Recovery c. Financial Reform

Roosevelt launched a period of intense activity, known as the Hundred Days, from march 9-June 16, 1933.

During this period Congress passed more than 15 major pieces of New Deal legislation, expanding the federal government’s role in the nation’s econom

Banking and Financial Reform

March 5 when Roosevelt took office, declared a bank holiday

Roosevelt persuaded Congress to pass Emergency Banking Relief Act

Emergency Banking Relief Act: authorized US Treasury to inspect banks, those unable to pay debts remained closed

Americans began to regain confidence in banks

Roosevelt’s Fireside ChatsStarted March 12, 1933, when solvent banks

were allowed to reopenUsed these radio programs to discuss his

concerns and detail policies on the New DealFirst chat centered on restoring financial

system“We have provided the machinery to restore

our financial system. It is up to you to support and make it work.”

He explained that banks invests your deposit. People demanding cash for savings cause banks to fail

Glass-Steagall Banking Act of 1933Established Federal Deposit Insurance

Corporation (FDIC), which provided federal insurance for individual bank account of less than $5,000. The FDIC is still in use today.

Regulated Stock Market with the Federal Securities Act, required corporations to provide complete information on all stock offerings and made corporations responsible

Securities and Exchange Commission (SEC) created in 1934 to regulate stock market to prevent people from rigging the market with inside information

Alcohol BillsAllowed manufacturing and sale of some

alcoholic beveragesAlcohol tax to raise government revenues21st Amendment: 1933, repealed the

prohibition amendment

Agricultural Adjustment Act (AAA)Purpose to raise crop prices by lowering

productionGovernment paid farmers to leave a certain

amount of every acre unseededReduction of supply, cost would riseGovernment paid cotton workers $200

million to plow under 10 million acres of their crop

Hog farmers paid to slaughter 6 million pigsThis act was controversial because so many

were hungry

Civilian Conservation Corps (CCC)1933, Men 18-25 given jobs, $30/month with

$25 of it sent home to families, given free food and uniforms

Built roads, developed parks, planted trees and helped soil erosion and flood-controlled projects

Ended in 1942: 3 million men had worked with CCC and planted in 8 years over 200 million trees

Many of these jobs were in the Great Plains to prevent another Dust Bowl

Federal Emergency Relief Administration (FERA)1933, funded with $500 million to provide

direct relief for the needyHalf of the money went to the states as direct

grants-in-aid to help furnish food and clothing to the unemployed, the aged, and the ill

Additional $250 million distributed on the basis of one federal dollar for every three state dollars

Harry Hopkins headed the program, believed that money helped people buy food, but work gave them confidence and self-respect

Public Works Administration (PWA)1933, provided money to states to create jobsMostly in construction of schools and other

community buildingsWhen these programs failed, Roosevelt

created the CWA

Civil Works Administration (CWA)1933 after PWA failed Provided 4 million jobsCriticized by many because the jobs were

viewed as busy work and wasting moneyCWA built over 40,000 schools and paid the

salaries of 50,000 school teachersHalf a million miles of roads were built

National Industrial Recovery Act (NIRA)1933, Promoted industrial growth by establishing

codes of fair practice for individual industriesCreated National Recovery Administration (NRA)

to set prices of products to ensure fair competitionNRA established standards for working hours and

a ban on child laborNRA promoted recovery by interrupting wages

cuts, falling prices and layoffsEstablished workers’ rights to unionize and

bargain collectivelyMany felt this act served large businesses

Tennessee Valley Authority (TVA)1933, focused on Tennessee River valleyCreated thousands of jobs and provided flood

control, hydroelectric power, and other benefits to the region

Home Owners Loan Corporation (HOLC)1933 provided government loans to

homeowners who faced foreclosure because they could not make their loan payments

National Housing Act (NHA)1933, created the Federal Housing

Administration (FHA), which continues today providing loans for home mortgages and repairs

Protests Against New DealAfter first 100 days, many felt that the New

Deal interfered with the workings of a free market economy

1935, Supreme Court struck down the NIRA as unconstitutional, declaring that the law gave legislative power to the executive branch

Enforcement of industry codes within stats went beyond federal government’s constitutional powers

1936, AAA was struck down due to agriculture being a local matter and should be regulated by the states

Roosevelt’s Response to Supreme Court1937, proposed that Congress enact a court-

reform bill that would reorganize the federal judiciary and allow him to appoint six new Supreme Court justices

Seen as “court packing” and Roosevelt was criticized for violating separation of powers

Rulings in the Supreme Court began to be more in Roosevelt’s favor without this action because of resignations

Roosevelt was able to appoint 7 new justices in the next 4 years

American Liberty League1934, made up of wealthy business leaders such as Al

Smith, John W. DavisOpposed New Deal because it was believed that it

violated respect for the rights of individuals and propertyCharles Coughlin, Francis Townsend and Huey Long felt

the poor suffered more with the New DealFather Coughlin favored a guaranteed annual income

and nationalization of banksDr. Townsend devised a pension plan to provide monthly

benefits, but this was too expensiveSenator Long proposed a nationwide social program,

Share Our Wealth

Second New DealAlso known as the Second Hundred DaysFocus on farmers, workers and poor, the

“forgotten man”Eleanor Roosevelt played a role in social

reform aspects of the New Deal

Soil Conservation and Domestic Allotment Act1936, to replace AAA, which was struck downPaid farmers for cutting production of soil-

depleting crops like cotton and wheatRewarded farmers for practicing good soil

conservation methodsSecond Agricultural Act 1938 passed with out

the unconstitutional processing tax to pay for farm subsidies

“Grapes of Wrath” by John Steinbeck illustrated the struggling farmers

Resettlement Administration1935, to help sharecroppers, migrant

workers and poor farmersDesigned to loan money to small farmers to

buy land1937, replaced by the Farm Security

Administration (FSA), loaned more than $1 billion to help tenant farmers by forming a network of migrant farmer camps

FSA sent photographers such as Dorothea Lange, Ben Shaun, Walker Evans to take pictures of rural towns and farms

Works Progress Administration (WPA)Created jobs on largest public works budget

($5 billion)1935-1943 employed over 8 million peopleBuilt 850 airportsConstructed or repaired 651,000 miles of

roads and streetsBuilt 110,000 libraries, schools and hospitalsSewed over 300 million garments for the

needyGave a sense of hope and purpose to many

workers

National Youth Administration (NYA)More than 2 million high school and college

students worked part-time clerical positions at their schools

1936, more than 200,000 students received aid and assistance through NYA

Wagner ActReestablished NIRA provision of collective bargainingListed unfair labor practices that companies could not use

such as threatening workers, firing union members, and interfering with unions

Set up National Labor Relations Board (NLRB) to hear testimony and unfair practices and hold elections to find out if they wanted union representation

Fair Labor Standards Act 1938 to establish maximum hours and minimum wages

FLSA set minimum hourly rate at 25 cents/hour then by 1940, it was 40 cents. National maximum work week of 44 hours and in 2 years 40 hours. Banned factory labor workers under 16 years old (18 yrs if work hazardous)

Social Security Act1935 by Secretary of Labor Frances Perkins3 Parts: a) old age insurance for retirees 65

or older and their spouses ($10-85/month) Groups excluded: domestic servants, farm workers, many hospital and restaurant workers, b) Unemployed compensation system ($15-18/week), c) Aid to families with dependent children and the disabled

Rural Electrification Act (REA)Created, financed and worked with rural and

farm electrical cooperatives to bring electric to rural areas

1935 30% of American farms had electricity, 1945 45%, 1951 90%

Public Utilities Holding Company Act1935 aim to fight financial corruption in the

public utility industryOutlawed ownership of utilities by multiple

holding companies

New DealHelped different minority groups as well such

as women, African Americans, Latinos and Native Americans

Eleanor Roosevelt opened many doors for African Americans, particularly the performance of Marian Anderson in front of the Lincoln Memorial in 1939

Indian Reorganization Act of 1934 to strengthen Native American land claims by prohibiting the government from taking unclaimed reservation lands and selling them to people other than Native Americans

New Deal CoalitionAn alignment of diverse groups dedicated to

supporting the Democratic PartyEnabled Democrats to dominate politics in

the 1930s and 1940s

Impact of New DealTo avoid deficit spending, President

Roosevelt did not launch a Third New DealConservatives felt that Roosevelt made the

federal government too large and it had stifled free enterprise and individual initiative

Liberals felt that Roosevelt did not do enough to socialize the economy and eliminate social and economic inequalities

Sources

The Americans: Reconstruction through the 2oth Century, McDougal Littell, Inc, Evanston, IL, 2002.