The Second New Deal

(c. 1935-1938)

The Second New Deal

Reasons for the Second New Deal:​​ Despite the first New Deal, by 1935 national income was still low and unemployment high. The Supreme Court had begun declaring first New Deal agencies unconstitutional. The November 1934 elections brought in a Congress more favorable to reform, creating an opportunity for Roosevelt.

​Aims:​​ Provide more work relief, support workers' rights, help the rural poor acquire land, and provide for the elderly.

WPA

Works Progress Administration

• Established:​​ May 1935 by the Emergency Relief Appropriation Act.

• ​Head:​​ Harry Hopkins (former head of the CWA).

• ​Data:​​ Employed ​~8 million​ Americans. Spent ​​$11 billion​ over its lifetime.

• ​Projects:​​ Short-term work relief projects for diverse groups:

  • ​Manual laborers:​​ Road and park construction.

  • ​Young people:​​ Helping students stay in college or join training programs.

  • ​Women:​​ Sewing and teaching programs.

  • ​Writers/Performers:​​ Guidebook writing, traveling theater groups.

  • ​Musicians:​​ The Federal Music Project employed ​15,000 musicians.

• Healthcare:​​ The WPA maintained clinics, sent nurses to homes, and built hospitals. A National Health Survey it sponsored found ​2 million​ serious illness cases went untreated annually.

Evolution of Agricultural Aid (RA & FSA)

• Resettlement Administration (RA):​​ Aimed to rehouse urban and rural poor. Built only three new suburban towns. Resettled only a few thousand families.

• ​Farm Security Administration (FSA):​​ Replaced the RA in 1937 (established by Farm Tenancy Act). It helped the rural poor buy farms and equipment. By 1941, it had offered ​​$1 billion in loans. It also established camps with amenities (e.g., libraries run by WPA staff) for migrant workers.

Banking Act of 1935

• ​Reforms:​​ Created a president-appointed Board of Governors for the Federal Reserve, shifting power away from large private banks.

• ​Impact:​​ By 1936, no national banks closed, and little deposit insurance was paid out. Modernized the banking system.

Wagner Act

• Provisions:​​ Legally entitled workers to join unions, allowed Closed shops (where all employees had to join the union chosen by the majority), banned Company unions and firing union members.

• ​National Labor Relations Board (NLRB):​​ Established to supervise union negotiations and defend workers. Grew from ​14 lawyers (1935)​​ to ​226 lawyers (1939)​.

• ​Context:​​ The Memorial Day Massacre of 1937 (10 strikers killed) highlighted the violent resistance from some employers, like Chicago's "Little Steel."

• ​Fair Labor Standards Act (1938):​​ Established a national minimum wage and maximum working hours.

Social Security Act (1935)

It created the first national system for:

• ​Federal Pensions:​​ Funded by a 1% tax on employee income (rising to 3%), matched by an employer tax.

• ​Unemployment Insurance:​​ Funded by a tax on employers of more than 8 people. Provided up to 16 weeks of pay at half the normal rate.

• ​Support for Disadvantaged Groups:​​ Used federal Matching grants to help very poor elderly, families with dependent children, and the disabled. By 1939, grants had helped ​7,000 children.

• ​Limitations:​​ Excluded domestic servants and agricultural laborers. Pay-outs varied by state.