Topic 6, Lesson 2: How successful was the First New Deal?

Topic 6, Lesson 2: How successful was the First New Deal?

Emergency Banking Relief Act

• March 1933

• Roosevelt closed all the banks in the country for 4 days

• aim was to restore confidence in the banking system

• gave the Treasury the power to investigate all banks threatened with collapse

• By the beginning of April, $1 billion in currency had been returned to bank deposits.

Topic 6, Lesson 2: How successful was the First New Deal?

The Glass-Steagall Act

• June 1933

• aim was to put the banking system on a sounder long-term footing

• bank officials were not allowed to take personal loans from their own banks

• individual bank deposits were to be insured against bank failure up to the figure of $2,500 (imposed by the Federal Deposit Insurance Corportation)

• FDIC still insures American’s money today

Topic 6, Lesson 2: How successful was the First New Deal?

Stock Exchange Regulation

The Truth-in-Securities Act (1933)

The Security Act (1934)

Regulation of the Stock Exchange was part of Roosevelt’s ‘recovery’ measures to ensure the excesses of the 1920s, which had caused the Wall Street Crash, were not repeated.

The Truth-in-Securities Act (1933)

required brokers to offer clients realistic information about the securities they were selling

The Securities Act (1934)

set up a new agency, the Securities Exchange Commission (SEC)

The tasks of the SEC was to oversee stock market activities and prevent fraudulent activities such as insider dealing

Topic 6, Lesson 2: How successful was the First New Deal?

The Federal Emergency Relief Act

FERA - Federal Emergency Relief Administration

• created in May 1933 by the Federal Emergency Relief Act

• the administration was given $500 million which was to be divided equally among the states to help provide for the unemployed

• Act said that each state should set up a FERA office and organise relief programmes

• often their caseloads were numbered in the thousands

• funds were limited

• In 1935, it was paying $25 per month to an average family. Estimated minimum living costs were $100.

Topic 6, Lesson 2: How successful was the First New Deal?

The Civilian Conservation Corps (CCC)

• 1933

• aimed to tackle unemployment among young people

• the Department of Labour recruited unemployed men between the ages of 17 and 24 to work in the CCC in national forests, parks and public lands

• The corps was organised along military lines

• In total, the CCC planted 1.3 billion trees

Topic 6, Lesson 2: How successful was the First New Deal?

The Agricultural Adjustment Act (AAA)

• May 1933

• overproduction was the greatest problem for farmers

• AAA would pay farmers to reduce their production of ‘staple’ items such as corn, cotton, milk, pork, rice, tobacco and wheat

• a total of 10.5 million acres were ploughed under

• the price of cotton rose from 6.5 cents in 1932 to 10 cents in 1933

Topic 6, Lesson 2: How successful was the First New Deal?

The Tennessee Valley Authority (TVA)

• May 1933

• set up to deal with the underdevelopment and poverty in the Tennessee Valley

• created to harness the power of the River Tennessee

• largely responsible for the modernisation and improved living standards that saw its residents increase their average income by 200% in the period from 1929 to 1949.

Topic 6, Lesson 2: How successful was the First New Deal?

The National Recovery Administration (NRA)

• June 1933

• set up to oversee industrial recovery

• powerful businessmen benefitted from the suspension of anti-trust legislation for two years

• advocated for an overall 10% wage increase and ten-hour cut in the working week. Neither was successful

• Many critics argued that in practise they did little except give large firms the opportunity to indulge in unfair practices

• The Supreme Court declared the NRA unconstitutional in May 1935

Topic 6, Lesson 2: How successful was the First New Deal?

The Public Works Administration (PWA)

• June 1933

• purpose was ‘pump priming’ → hoped that expenditure on public works such as roads, dams, hospitals and schools would stimulate the economy

• was responsible for massive public work schemes

Topic 6, Lesson 2: How successful was the First New Deal?

The Civilian Works Administration (CWA)

• November 1933

• set up with a $400 million grant from the PWA

• Primarily to provide emergency relief to the unemployed during the hard winter of 1933 - 34