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The New Deal: Alphabet Soup. Relief for the needy Economic Recovery Financial Reform. Liberal, More Gov’t, “Democrat”. Conservative, Less Gov’t, “Republican ”. Getting Started.
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The New Deal: Alphabet Soup Relief for the needy Economic Recovery Financial Reform Liberal, More Gov’t, “Democrat” Conservative, Less Gov’t, “Republican”
Getting Started • 1932 Election – FDR presented a "can-do" attitude and projected an air of friendliness and confidence that attracted voters (ready for a change). • Many Americans blamed Hoover for doing too little about the depression • Democrats claimed a nearly two-thirds majority in the Senate and almost three-fourths of the seats in the House. • Greatest Democratic victory since the Civil War • Hundred Days – period where Congress passed more than 15 pieces of New Deal legislation. • Significantly expanded the government’s role in the nation’ economy. • Fireside Chats – radio talks about the issues of public concern, explaining in clear, simple language his New Deal measures. • Emergency Banking Relief Act - authorized the Treasury Department to inspect the country's banks. • Bank holiday – closed all banks to prevent further withdrawals. • Those that were insolvent – unable to pay their debts – would remain closed until they were sound (some could receive loans). • Revived public confidence in banks.
Business assistance and reform • Glass-Steagall Act – established the FDIC, which would insure individual bank accounts up to $5,000 (now it is $100,000) • Reassured millions of bank customers that their money was safe. • Banking Act of 1935 – seven-member board to regulate the nation’s money supply and the interest rates on loans. • Federal Securities Act – required corporations to provide complete information on all stock offerings and made them liable for any misrepresentations. • Securities and Exchange Commission (SEC) – supervised the stock market and eliminated dishonest practices (cannot rig it for individual gain). • The 21st Amendment allowed for the manufacture and sale of alcoholic beverages – raised government revenues by taxing alcohol. • National Recovery Administration (NRA) – interrupted the trend of wage cuts, falling prices, and layoffs • Set prices of many products and established standards/codes for fair competition. • National Industrial Recovery Act (NIRA) –authorized the President to regulate industry in an attempt to raise prices and to stimulate economic recovery. • One section guaranteed workers’ rights to unionize and bargain collectively.
Employment Projects • Civilian Conservation Corps (CCC) – provided jobs for single males on conservation projects. • Each man earned $30/week - $25 was immediately sent home to their family. • Supplied free food and lodging in work camps. • Federal Emergency Relief Administration (FERA) – helped states to provide aid for the unemployed. • Gave loans and grants to states to operate relief programs (food and clothing for the unemployed). • Alleviated household unemployment by creating new unskilled jobs in local and state government (meaningful work that enabled people gain confidence and self-respect). • Public Works Administration (PWA) – created jobs on government projects. • Civil Works Administration (CWA) – provided work in federal jobs. • Works Progress Administration (WPA) – created as many jobs as possible (construction jobs to positions in symphony orchestras) • Urged by Eleanor Roosevelt and made special efforts to help women, minorities, and young people. • National Youth Administration (NYA) – provided job training for unemployed young people and part-time jobs for needy students.
Farm Relief and Rural Development • Agricultural Adjustment Administration (AAA) – aided farmers and regulated crop production. • Leave certain amount of every acre of land unseeded, which would reduce the supply to ultimately boost prices. • Upset many because there was a destruction of food when many people were going hungry. • Soil Conservation and Domestic Allotment Act – paid farmers for cutting production of soil-depleting crops and rewarded farmers for practicing good soil conservation. • Resettlement Administration provided monetary loans to small farmers to buy land • Farm Security Administration (FSA) – loaned more than $1 billion to help tenant farmers become landholders and to establish camps for migrant farm workers. • Tennessee Valley Authority (TVA) – developed resources of the TN Valley (badly depressed) • Created thousands of jobs, and provided flood control, hydroelectric power, and other benefits to an impoverished region. • Rural Electrification Administration (REA) – provided affordable electricity for isolated rural areas (farms). • Public Utility Holding Company Act – aim at financial corruption in the public utility industry. • Outlawed the ownership of utilities by multiple holding companies (known as “pyramiding”
Labor Relations/Retirement • Wagner Act (National Labor Relations Act) – reestablished the NIRA provision of collective bargaining and protected the right of workers to join unions. • Prohibited unfair labor practices like threatening workers, firing union members, and interfering with union organizing. • National Labor Relations Board (NLRB) – defined unfair labor practices and settled disputes between employers and employees. • Heard testimony about unfair practices and held elections to find out if workers wanted union representation. • Fair Labor Standards Act – established a minimum hourly wage ($.25/hour) and maximum number of hours (40-44 hours/week) in the workweek for the entire country. • Set rules for the employment of workers under 16 and banned hazardous factory work for those under 18. • Social Security Administration – provided a pension for retired workers and their spouses and aided people with disabilities. • Unemployment compensation system
Housing • Home Owners Loan Corporation (HOLC) – loaned money at low interest to homeowners who could not meet mortgage payments. • Government loans to homeowners who faced foreclosure • Federal Housing Administration (FHA) – insured loans for building and repairing homes. • United States Housing Authority (USHA) – provided loans for low-cost public housing.
New Deal Under Attack • Deficit Spending – spending more money than the government receives in revenue. • FDR was reluctant to use • Necessary evil to be used only at a time of great economic crisis. • John Maynard Keynes (British economist) thought a country should spend its way out of a depression by putting money into the hands of consumers. • Buy goods and services and thus fuel economic growth. • NIRA = unconstitutional • Gave legislative powers to the executive branch and enforcement of industry codes within the states went beyond the federal government’s constitutional powers to regulate interstate commerce. • AAA struck down • Agriculture is a local matter and should be regulated by the states rather than by the federal government. • Court-Packing Bill – reorganize the federal judiciary and allow FDR to appoint six new Supreme Court justices • Feared further Court decisions might dismantle the New Deal • Separation of powers/Judiciary Independence? • Got his way without the bill, through retirements, so rulings of the Court began to favor the New Deal
Under attack continued • American Liberty League – opposed New Deal measures, believing it violated respect for the rights of individuals and property. • Three toughest critics expressed views that appealed to the poor Americans: • Father Charles Coughlin – radio sermons that combined economic, political, and religious ideas • Favored a guaranteed annual income and the nationalization of banks • Dr. Francis Townsend – believed FDR wasn’t doing enough to help the poor and the elderly. • Devised a pension plan that would provide monthly benefits to the aged. • Huey Long – proposed a nationwide social program called Share-Our-Wealth where he promised something for everyone. • Eager to win the presidency himself.
Most Common FDR AND new deal criticisms • President was plunging ahead recklessly without knowing where he was going. • WPA – “boondoggling”: make-work projects that were a waste of money. • It would be better to create productive jobs than to hand out relief payments. • AAA – benefits went mainly to big landowners; consumers complained about high food prices; end the want in the midst of plenty (poor went hungry while farmers plowed under crops and let land stand idle). • NRA – codes favored big corporations and encouraged monopoly. • Biased in favor of employers and offered unions little protection • TVA – reckless adventure in socialism (however it was welcomed by the people) • Strangling free enterprise and turning the country into a welfare state • Denounced government interference with business • Too much power given to labor unions • Growing national debt ($36 billion in 1936) caused by the government’s relief programs • 1935 tax bill raising taxes for big corporations and wealthy individuals • “Destroyer of the Constitution” – ignored the Constitution and created a huge federal bureaucracy at the expense of freedom. • Federal government invaded the rights of the states and interfered illegally in the nation’s social and economic life (ruled against many New Deal programs – NRA, AAA) • Not doing enough to change the economic system that had brought misery to so many. • Should have nationalized the banks, railroads, and public utilities • He was just trying to prop up a failed system that needed total reform.