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The New Deal

The New Deal. 1933-1939. Key Facts About the New Deal. Relief, Recovery, and Reform When FDR took the oath of office on March 4, 1933 the country had just endured a bleak winter of rising unemployment, failing banks, and closing businesses

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The New Deal

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  1. The New Deal 1933-1939

  2. Key Facts About the New Deal • Relief, Recovery, and Reform • When FDR took the oath of office on March 4, 1933 the country had just endured a bleak winter of rising unemployment, failing banks, and closing businesses • People called for immediate action to keep the nation from slipping into econ chaos • FDR understood the gravity of the crisis • FDR and his “brain trust” of advisors used gov’t to address the econ crisis • Proposed a series of programs that had 3 goals • Adopt measures to restore public confidence and achieve immediate relief • Adopt measures to help promote industrial and agricultural recovery • Implement long-term measures to reform business practices

  3. Key Facts About the New Deal • The Hundred Days, March 9-June 16, 1933 • The Emergency Banking Relief Act: On March 5th, FDR proclaimed a 4-day holiday • The EBRA provided for the reopening of the banks under the supervision of the Secretary of the Treasury • A few days later, FDR addressed the nation by radio in the first of his “fireside chats” • He emphasized that most of the banks would reopen in a few days • The next day people making deposits far outnumbered those making withdrawals • As a result, the immediate banking crisis subsided

  4. Key Facts About the New Deal • The Civilian Conservation Corp (CCC): Created a jobs program for unemployed young men, 18-25 • The men lived in camps and worked on a variety of conservation projects in the nation’s parks and recreation areas • CCC: Sections 4, 5, 6, and 7

  5. Key Facts About the New Deal • The Tennessee Valley Authority (TVA): Authorized the construction of a system of dams and hydroelectric plants to provide inexpensive electricity and prevent devastating floods • The TVA provided an important experiment in regional planning and rehabilitation

  6. Key Facts About the New Deal • The Agricultural Adjustment Act (AAA) • Attempted to increase farm income by paying farmers to leave acres unplanted • The hope was this action would reduce farm surpluses and thus raise prices • The National Banking Recovery Act (NBRA) • Attempted to combat the Depression by reducing competition • It created a National Recovery Administration to work with business and labor to write codes regulating production, wages, and hours • The Glass-Steagall Banking Act • Separated commercial and investment banking to prevent speculative abuses • It also established the Federal Deposit Insurance Corporation (FDIC) to guarantee bank deposits up to $5,000

  7. Key Facts About the New Deal • The Second New Deal, 1934-1935 • Works Project Administration (WPA): Funded a massive program of public projects ranging from building bridges to painting murals in post offices • Securities and Exchange Commission (SEC): Regulated the stock market • Social Security Act • Guaranteed retirement payments for enrolled workers beginning at the age of 65 • This act proved to be the most far-reaching New Deal program • Wagner Labor Relations Act • Recognized labor’s right to bargain collectively • It created the National Labor Relations Board (NLRB) to protect workers from unfair practices and to arbitrate labor-management disputes

  8. The New Deal Under Attack • Opposition to the New Deal • The New Deal helped pull America out of the depths of the GD • Industrial production slowly rose and unemployment fell from about 13 million in 1933 to 9 million in 1936 • Despite these gains full recovery still seemed elusive • A small but contentious group of critics attacked the New Deal and offered radical plans to revive the economy • At the same time, the New Deal faced an even greater challenge from the SC

  9. The New Deal Under Attack • Father Charles Coughlin • MI-based priest whose popular Sunday radio program reached 40 million listeners • Opposed the ND and supported nationalizing the banks and coining more silver dollars • Dr. Francis E. Townsend • CA physician who argued that the ND did not do enough for older Americans • Wanted every person over the age of 60 to receive a monthly gov’t check for $200.00 • The recipient had to promise to spend all the $ each month • The movement led by Townsend contributed to congressional approval for the Social Security Act • Huey Long • LA gov and U.S. senator • Long wanted to take money from the wealthy and distribute $5,000 checks to needy people • His “Share Our Wealth” program attracted widespread support prompting Long to plan a pres campaign for 1936 • In Sep 1935, an assassin shot and killed Long

  10. The New Deal Under Attack • The Supreme Court packing fight • In the summer of 1935 the SC began to deliver a series of decisions overturning key ND programs • In Schechter v. United States the Court unanimously struck down the NIRA because it gave the fed gov’t powers of econ regulation that could not be justified under the Interstate Commerce Clause • A few months later the Court also invalidated the AAA • FDR feared that the Court would soon strike down both the Wagner Act and the Social Security Act • In 1937, FDR sent Congress the Court Reform Bill • The Pres surprised Congress by asking for authority to appoint a new SC justice for every member older than 70 • This would allow FDR to appoint 6 new justices more receptive to the ND

  11. The New Deal Under Attack • The Supreme Court packing fight • Both the public and members of Congress opposed FDR’s “court-packing” bill as a violation of the judicial independence and the separation of powers • Although the Dems enjoyed large majorities in both houses, Congress refused to approve the Court Reform Bill • The rejection marked FDR’s first major legislative defeat • Aroused conservatives in both parties made it difficult for FDR to pass additional ND reforms • Ironically, the SC proved to be more sympathetic to the ND after FDR’s court-packing fiasco • The Court upheld both the Wagner Act and the Social Security Act • In addition, several justices retired and FDR ultimately appointed 9 new members of the Court

  12. The Impact of the New Deal • The New Deal and the economy • As 1937 opened, FDR optimistically pointed to several promising indicators of econ success • Unemployment fell to 14% and industrial output returned to pre-Crash levels • Confident that the crisis was receding, FDR reduced funding for ND programs • These cuts triggered a sudden econ downturn known as the “Roosevelt Recession” of 1937-1938 • Without the fed spending, unemployment jumped to 19% • The Roosevelt Recession forced many New Dealers to turn to the unorthodox theories of the British economist John Maynard Keynes • Traditional economists had always argued that gov’ts should strive to balance their budgets but Keynes disagreed • He recommended that gov’ts use deficit spending – spending money beyond that which was raised by taxes – to stimulate the economy • Although FDR did not fully embrace Keynesian econ, he did resume funding the ND programs • The ND did not bring about the full econ recovery FDR had promised • The U.S. finally emerged from the GD when the fed gov’t sharply increased military spending at the start of WWII

  13. The Impact of the New Deal • The New Deal and the role of the federal government • The ND accelerated the process first begun during the Progressive Era of expanding the role of the fed gov’t • Under the ND the fed gov’t assumed responsibility for the collective welfare of the American people • Social Security payments, farm loans, and relief projects all provided tangible examples of how the fed gov’t became a growing part of everyday life • As the fed gov’ts role expanded, so did the size of the fed bureaucracy • The ND created a number of fed agencies • By the end of the 1930s, the fed gov’t became the largest single employer in the country

  14. The Impact of the New Deal • The New Deal and labor • When the GD began, trade unions represented only about 3 million workers • Most were skilled workers organized by the AFL • The Wagner Act (National Labor Relations Act) guaranteed every laborer the right to join a union and to bargain collectively with management • John L. Lewis, the leader of the United Mine Workers, took the lead in forming the Congress of Industrial Organizations (CIO) to unionize workers at all levels within an industry • The AFL and the CIO split apart at their nat’l convention in 1935 because the AFL refused to grant charters to new unions organized on an industry-wide basis • Undaunted by the split with the AFL, Lewis led a series of strikes in the automobile and steel industries • Workers walked off their jobs or in many cases staged sit-ins inside their plants • Eventually workers won new contracts guaranteeing better wages, hours, and safety measures • By the end of the decade, unions represented 9 million workers or 28% of the nonfarm workforce

  15. The Impact of the New Deal • The New Deal and African Americans • The ND did not directly confront racial issues • For example, CCC camps were often segregated • AA, nonetheless benefitted from ND relief programs that attempted to alleviate poverty regardless of racial background • The ND caused a dramatic change in how AAs viewed the Rep and Dem parties • In 1932, 75% of AA voters supported Hoover as the candidate of the party of Lincoln • Even though the ND did not oppose Jim Crow, it did help AA survive the GD • In the 1936 presidential election 95% of black voters switched their allegiance to FDR and the Dems • AAs formed an important part of the ND coalition that formed during the 1930 • The coalition also included labor unions, ethnic minorities, and white southerners

  16. The Impact of the New Deal • The New Deal and women • Many observers noted that women seemed invisible during the GD • The PWA and other ND agencies almost exclusively hired men • The CCC excluded women entirely, prompting critics to ask, “Where is the she-she-she?” • Although the New Deal did not directly challenge gender inequality, First Lady Eleanor Roosevelt did play an important role in promoting equal treatment for women and AA • In one highly publicized incident, Eleanor Roosevelt resigned from the Daughters of the American Revolution to protest the organization’s decision to bar Marion Anderson, a world-renowned AA singer, from performing at their Constitution Hall in D.C

  17. Prompt #6 • FDR’s New Deal was successful. Assess the validity of this statement.

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