APUSH: great depression new deal laws

Bank Holiday/Banking Act

Relief

Problem

Banking Crisis - Mass bank runs and failures threatened to collapse the entire financial system

Solution

Emergency Banking Act: FDR declared a 4-day bank holiday, closing all banks. Treasury officials inspected banks; only solvent institutions could reopen. Combined with fireside chats to restore confidence.

Impact

Restored public confidence in banking system; stopped the panic. 75% of banks reopened within 3 days.

Federal Deposit Insurance Corporation (FDIC)

Reform

Problem

Bank failures wiped out life savings; people hoarded cash rather than using banks

Solution

Glass-Steagall Act created FDIC to insure deposits up to $5,000 (now $250,000). Separated commercial and investment banking.

Impact

Virtually eliminated bank runs; fundamentally changed banking regulation. Still operates today.

Securities and Exchange Commission (SEC)

Reform

Problem

Stock market manipulation, insider trading, and fraud contributed to 1929 crash; investors lost confidence

Solution

Created independent regulatory agency to oversee stock exchanges, require corporate financial disclosure, prevent fraud and manipulation. Truth in Securities Act.

Impact

Restored investor confidence; established federal oversight of securities markets. Still regulates Wall Street today.

Agriculture Adjustment Act (AAA)

Recovery

Problem

Farm prices collapsed 60% due to overproduction; massive foreclosures

Solution

Paid farmers subsidies to reduce acreage and destroy surplus crops/livestock. Funded by processing tax on food manufacturers.

Impact

Raised farm prices 50% but controversial. Declared unconstitutional in U.S. v. Butler (1936) - processing tax violated 10th Amendment.

Civilian Conservation Corps (CCC)

Relief

Problem

Mass unemployment among young men (ages 18-25); environmental degradation from overfarming

Solution

Quasi-military camps employed young men in conservation: reforestation, soil erosion prevention, park development. Sent $25/month home to families.

Impact

Employed 3 million men; planted 3 billion trees; built 800 parks; reduced crime. Most popular New Deal program.

Public Works Administration (PWA)

Recovery

Problem

Crumbling infrastructure; need for long-term construction jobs

Solution

Large-scale public works: dams (Grand Coulee, Hoover), bridges (Triborough), schools, hospitals, aircraft carriers. Focused on "heavy" construction.

Impact

Built infrastructure worth billions still in use. Employed skilled workers. Slower job creation than WPA due to careful planning.

Works Progress Administration (WPA)

Relief

Problem

Continued mass unemployment; psychological toll of joblessness

Solution

Massive jobs program: construction, arts projects, Federal Theatre/Writers/Art projects. Hired artists, actors, writers for cultural programs.

Impact

Employed 8.5 million (largest New Deal agency); built 650,000 miles of roads, 125,000 buildings; created lasting art/literature.

Social Security Act

Reform

Problem

No safety net for elderly, disabled, or unemployed; elderly poverty epidemic

Solution

Created old-age insurance (payroll tax-funded pensions at 65), unemployment insurance (federal-state), aid to dependent children, aid to disabled.

Impact

Created modern American welfare state; most enduring and expensive New Deal program. Fundamentally changed federal-citizen relationship.

Tennessee Valley Authority (TVA)

Recovery

Problem

Tennessee Valley was poorest region in US: frequent flooding, soil erosion, no electricity, economic underdevelopment

Solution

Federal government built series of dams for flood control, hydroelectric power, navigation, and regional development. Sold cheap electricity to bring modernization.

Impact

Transformed 7-state region; provided electricity to rural areas; still operates today as largest public power company. Model for regional planning.

National Recovery Administration (NRA)

Recovery

Problem

Cutthroat competition led to falling prices, wages, and "race to the bottom" in working conditions

Solution

Industry codes set minimum wages, maximum hours, prices, production quotas. Blue Eagle symbol for compliant businesses. Section 7(a) guaranteed collective bargaining rights.

Impact

Briefly stabilized some industries but unpopular and ineffective. Declared unconstitutional in Schechter v. U.S. (1935) - "sick chicken case."

Fair Labor Standards Act (FLSA)

Reform

Problem

Exploitative working conditions: child labor, no minimum wage, excessive hours, no overtime

Solution

Established federal minimum wage ($0.25/hr), maximum 44-hour work week (later 40), time-and-a-half overtime, banned oppressive child labor under 16.

Impact

Set baseline labor standards; ended most child labor; established federal role in workplace regulation.