US History
Chapter 16
The New Deal
Section 1
Forging a New Deal
How did Franklin and Eleanor Roosevelt work to restore the nation’s hope?
A 2nd Bonus Army marched on Washington
White House provided campsites
Eleanor visited the campsites
Demonstrated compassion and soothed fears
FDR had promised a new deal for the American people
New Deal - relief, recovery, and reform programs of FDR’s administration
The First Hundred Days
Pushed programs through Congress to provide relief, create jobs, and stimulate economic recovery
Stabilizing financial institutions
Restore public confidence in financial institutions
Instituted a “bank holiday”
Emergency Banking Act
Authorized government inspection of the financial health of all banks
2/3 of banks reopened by March 15
Glass-Steagall Banking Act of 1933
Created (FDIC) Federal Deposit Insurance Corporation
Insures bank deposits
Federal Securities Act of 1933
Disclosure of financial statements for companies who offered stock for sale
Securities and Exchange Commission (SEC)
Regulates the stock market
Providing relief and creating jobs
Federal Emergency Relief Administration (FERA)
Sent funds to local relief agencies
Public works programs - government-funded projects to build public facilities
Civil Works Administration (CWA)
4 million employees
Worked to build or improve roads, parks, airports, and other facilities
Civilian Conservation Corps (CCC)
2.5 young, unmarried men employed
Maintained forests, beaches, and parks
Paid $30 per month - place to live, food, medical care, and job training was free
Indian Reorganization Act of 1934
Built schools, hospitals, and irrigation systems
Ended the sale of tribal lands and returned some land to Indians
Regulating the economy
National Industrial Recovery Act (NIRA) established the (NRA)
National Recovery Administration (NRA)
Attempted to stabilize the economy by regulation business practices
Regulated wages, set minimum wages, controlled working conditions, production,
Prices, gave organized labor collective bargaining rights
Helped for a while until the cycle of rising production and falling purchasing returned
Public Works Administration (PWA)
Completed massive public works projects
Grand Coulee Dam of the Columbia River in Washington State
Triborough Bridge in NYC
Causeway connective Florida to Key West
Assisting homeowners and farmers
Home Owners’ Loan Corporation (HOLC)
Refinanced mortgages
National Housing Act of 1934 established the (FHA)
Federal Housing Administration still exists today
Improves housing standards and conditions, insures mortgages, stabilizes the mortgage
market
Agricultural Adjustment Administration (AAA)
Paid subsidies (government financial assistance) to farmers who cut production
Hoped that reducing production would cause prices to rise
New taxes on companies that process farm produce paid for the subsidies
Tennessee Valley Authority (TVA)
Reactivated hydroelectric power facility
Helped farmers and created jobs in the Tennessee Valley
Provided cheap electricity, with the Rural Electrification Administration,
flood control, and recreational opportunities
The Supreme Court struck down the NIRA and the AAA tax
NIRA was unconstitutional because it gave the President lawmaking powers and regulated
local, rather than interstate, commerce
Tax that funded the farm subsides
The Second Hundred Days (Second New Deal)
Included social welfare benefits, stricter controls over business, stronger support for unions, and
higher taxes on the rich
Works Progress Administration (WPA)
Work for over 8 million
Built or improved playgrounds, schools, hospitals, and airfields
Supported the creative work of artists and writers
National Youth Administration
Education, jobs, recreation, and counseling for young men and women
Resettlement Administration
Loaned money to owners of small farms and helped resettle tenants and sharecroppers
onto productive farm land
Farm Security Administration (FSA) replaced the Resettlement Administration
Loaned over $1 billion to farmers and set up camps for migrant workers
Rural Electrification Administration (REA)
Offered loans to farm cooperatives and electric companies to build electric power plants
and extend power lines, loaned money to rural residents to wire homes and barns
National Labor Relations Act called the Wagner Act
Legalized the union practices of collective bargaining and closed shops
Closed shops - workplaces open only to union members
Outlawed spying on union activities and blacklisting
Blacklisting - a practice where employers agreed not to hire union leaders
Enforcement was by the National Labor Relations Board (NLRB)
Fair Labor Standards Act of 1938
Banned child labor and established a minimum wage for all workers covered under the act
Social Security Act of 1935
Established a Social Security system to provide financial security in the form of regular
payments, to people whom could not support themselves
Three types of insurance
Old-age pensions and survivors’ benefits
Workers and employers paid an equal amount into the fund
Retired workers or their survivors were eligible to receive benefits at 65
The act did not cover farm and domestic workers until 1954
Unemployment insurance
Employers, with more than 80 employees, funded this program
Through tax paid by employers
Aid for dependent children, the blind, and the disabled
Federal government gave grants to states to pay this benefit
FDR easily won reelection in 1936, winning every state except Vermont and Maine
Section 2
The New Deal’s Critics
Criticisms concerning the New Deal
Fair Labor Standards Act
Covered less than one quarter of all employed workers
Minimum wage requirement was lower than what most employed workers were paid
National Recovery Administration
Permitted lower wages for women
Preference in hiring for men and boys
Domestic workers were not covered (predominantly women)
African Americans were not offered jobs at professional level
Received lower pay then whites
Kept out of skilled jobs
African Americans petitioned Roosevelt for help
Roosevelt responded that key congressional seats were held by Southern and he needed
Their help to get New Deal legislation passed
Political Critics
New Deal went too far
American Liberty League spearheaded much of the opposition
Considered some programs socialistic
TVA and rural electrification
Higher taxes on the rich
Social Security Act
Issuing of social security numbers
All workers required paying into the system
New Deal did not go far enough
Lead by Progressives and Socialist
Called for an new economic order
Government takeover of farms and factories
Redistribution of wealth
Father Coughlin and Senator Huey Long - Louisiana were critics of the New Deal
They were considered demagogues
Demagogues - leaders who manipulate through half-truths, deceptive promises, and
scare tactics
Coughlin often contradicted himself calling for nationalism and they touting the importance
of private ownership
Nationalism - government takeover and ownership, of banks and the redistribution of
their wealth
Huey Long developed a program called Share-Our-Wealth
Called for a steep tax on the wealth with the funds being paid to the poor
Modern Criticism of the New Deal
Hindered economic progress
Threatened free enterprise
Inefficient use of resources
Created a too powerful federal government
Deficit spending - annual spending above annual revenue received
To cover the deficit the government sales government bonds
Federal debt - money the Federal government owes to bondholders
FDR’s Supreme Court reform proposal
The Supreme Court had struck down several New Deal programs as unconstitutional
FDR wanted to expand the court from 9 to 15
This proposal was seen as court packing - an attempt to have justices who would favor
FDR’s programs
FDR’s proposal failed
Section 3
Last Days of the New Deal
Despite FDR’s New Deal the country entered a recession in 1937.
Recession - a period of slow business activity
FDR wanted to balance the federal budget
Spending on New Deal programs slowed
Taxes were increased
FDR was concerned with the national debt and revenue
Revenue - income
National debt - total amount of money the federal government borrows and must pay back
Because of the Wagner Act union membership was more attractive to workers
Legalized the union practices of collective bargaining and closed shops
Closed shops - workplaces open only to union members
Outlawed spying on union activities and blacklisting
Blacklisting - a practice where employers agreed not to hire union leaders
American Federation of Labor (AFL) craft-based union
Committee for Industrial Organization (CIO) formed within the AFL
Under union leader John L. Lewis the CIO became the Congress of Industrial Organizations
Sought to organize unskilled workers in mass-production industries
Steel plants, auto plants, southern textile mills
Main tool to challenge conditions in industry was the strike
Sit-down strike - laborers stop working but refuse to leave the building
Others form picket lines to keep replacement workers from entering
During the Great Depression federal funds were allocated to support the popular and fine arts
Literature
Pearl Buck - The Good Earth
Zora Neale Hurston - Their Eyes Were Watching God
John Steinbeck - The Grapes of Wrath
Radio and Movies
George and Gracie Allen
Soap Operas
Marx Brothers comedies - Duck Soup and Monkey Business
Walt Disney - Snow White and the Seven Dwarfs
WPA and the Arts
Federal Writers’ Project
Collected life stories from former slaves
Wrote state guidebooks
Federal Music Project
Started community symphonies
Collected folk music heritage
Free music lessons
Federal Art Project
Painted murals in public buildings (example page 558)
Sculptures
The New Deal led to profound changes in American life
Expectation that the President forms programs and solves problems
Acceptance of government intervention in lives
Larger government
Changes in the workplace
Examples
Tennessee Valley Authority - TVA
Federal Deposit Insurance Corporation - FDIC
Securities and Exchange Commission - SEC
Social Security Administration - SSA
The New Deal did not end the Great Depression -- WWII did