The New Deal 1932-41

1. The New Deal 1932-41 Ch 16

2. “The only thing we have to fear…” • “…is fear itself.” – FDR’s First Inaugural Address. • Promised “bold experimentation”. • Did not know what to do, so would try anything to ease Depression. • USA was very ready for a change from Hoover’s policies. • Happily went along with most of FDR’s plans.

4. The First Hundred Days • Refers to first 100 days of new president’s term. • First step-restore confidence in banks. • Declared 4-day “bank holiday”. • Passed Emergency Banking Act-Gov’t would inspect financial health of all banks. • Passed Glass-Steagall Banking Act-Established Federal Deposit Insurance Corporation (FDIC)-insured bank deposits. • These acts caused people to begin to trust banks and deposit again. • Meant bank loans available again.

7. Second step-fix stock market. • Federal Securities Act-required companies to provide financial info if they sold stocks. • Creation of Securities and Exchange Commission (SEC)-regulated stock market, set up rules for trading stock. • Third step-stimulate economy. • Took USA off gold standard-devalues currency in hopes of raising prices, stimulating exports. • Passed National Industrial Recovery Act-created National Recovery Administration (NRA). • Controlled production, prices, set wages, regulated unions. • Helped at first, but higher wages drove prices up, hurt economy.

11. Fourth step-provide relief & create jobs. • Created Federal Emergency Relief Administration (FERA)-provided funds to local relief agencies. • Civil Works Administration (CWA)-built & improved roads, parks, airports, etc; employed 4 million unemployed workers. • Civilian Conservation Corps (CCC)-Built, maintained beaches, parks, forests; employed 2.5 million young men. • Paid $30/month, got room, food, job training. • Public Works Administration (PWA)-Built dams & bridges across USA. • Tennessee Valley Authority (TVA)-built hydroelectric dams in Tennessee River valley.

12. Civil Works Administration

14. Civilian Conservation Corps

16. Public Works Administration

18. Tennessee Valley Authority

20. Fifth step-help homeowners & farmers. • Home Owners’ Loan Corporation-Restructured loans for lower payments. • Federal Housing Administration (FHA)-Improved housing standards, insured mortgages to stabilize mortgage market. • Agricultural Adjustment Administration (AAA)- Paid farmers to plow under crops to make prices rise. • Most of these programs were passed in the first hundred days. • Big start for the New Deal.

23. Even with all of the new programs, New Deal had very little success; economy was still in poor shape, unemployment high. • Supreme Court declared AAA and other programs unconstitutional. • 1935-FDR began Second New Deal, aka Second Hundred Days. • More social welfare, more control over business, higher taxes on rich.

24. Second New Deal • Works Progress Administration (WPA)-provided 8 million jobs. • Built/improved playgrounds, schools, hospitals, supported work of artists/writers. • Resettlement Administration & Farm Security Administration. • Loaned $$ to small farmers, set up camps for migrant workers. • Rural Electrification Administration. • Loaned $$ to electric companies to extend power grid to rural areas. • Increased demand for electric appliances stimulated economy.

30. Passed Wagner Act-legalized collective bargaining for unions, legalized closed shops. • Only union members could work in closed shops. • Passed Fair Labor Standards Act. • Outlawed child labor, established minimum wage. • Passed Social Security Act. • Provided monthly payments to those who could not support themselves. • Old-age pensions, survivor’s benefits-You paid in with each paycheck, got money back at age 65. • Unemployment insurance-Business owners financed it with a tax, if you lost your job, you got a check. • Aid for dependent children, blind, disabled-gave $$ to states to help these people.

33. Criticisms of New Deal • Less helpful to women. • Allowed lower wages, men had first preference for jobs. • Offered no help to domestic services (maids, etc). • People of color helped less. • Only offered non-skilled labor, less pay than whites, still suffered discrimination.

34. Political Criticisms: • Republicans-New Deal made gov’t too big, intrusive, & controlling. • Wealthy-Taxes too high, shouldn’t have to pay into Social Security. • Some felt Social Security numbers, limiting freedoms led to Communism. • Progressives/Socialists-New Deal did not do enough. • Wanted gov’t takeover of factories/businesses. • Wanted pure socialism in USA.

36. From today, New Deal is receiving more & more criticism. • Many oppose deficit spending-spending more money than gov’t takes in. • Led to debts that still aren’t paid off. • Opposed gov’t intrusion into free market. • By adjusting supply, created false demands, messed up prices. • Gov’t spending uses tax money, which citizens could have spent to improve economy. • Gov’t grew too large, took power from state gov’ts and citizens.

37. Court-Packing Plan • During early New Deal, Supreme Court struck down many of FDR’s programs. • FDR introduced court-reform bill allowing him to appoint up to six new justices. • Wanted judges who liked New Deal programs. • FDR slammed from all sides for court-packing plan. • Quickly backed off, but many legislators & citizens who had supported FDR now began to oppose him. • Court-packing plan destroyed much of FDR’s credibility with USA, was watched much closer.

40. Last years of the New Deal • August 1937-production & employment levels dropped. • US entered recession-period of slow business activity. • Recession hurt, as FDR had cut back gov’t spending due to growing national debt. • Total amount of $$ gov’t borrows & has to pay back. • Happens when spending exceeds revenue (income). • Recession forced FDR to increase spending. • Spending lasted until early 1942.

42. Cultural effects of New Deal • WPA, other programs funded arts during Depression. • Had a lasting effect on US culture. • Literature: • Let Us Now Praise Famous Men-2 men live with Alabama sharecroppers, pictures & stories of sharecroppers’ lives. • Grapes of Wrath-Oklahoma family in Dust Bowl, migrate to California.

47. Radio/Movies. • Main sources of entertainment. • Radio-George Burns, Gracie Allen, Jack Benny, first soap operas. • Movies-1931-1st double feature-25 cents; 1933-first drive-in. • New Deal Documentaries shown. • Movies showed good beating evil-Mr. Smith Goes to Washington. • Comedies-Marx Brothers-Monkey Business, Duck Soup. • Most popular were movies that allowed viewers to escape Depression-The Wizard of Oz, Snow White and the Seven Dwarfs.