APUSH Chapter 25 - The New Deal

Response to the Great Depression

• Franklin Roosevelt Personality: Promised to take drastic action and was optimistic to encourage the people

  • Radio and “Fireside Chats”

  • Built Public Confidence

Economy

• “Bank Holiday” - closed all banks until Congress could meet to consider the banking-reform legislation

  • Emergency Banking Act - protect larger banks from being dragged down by smaller ones

  • Treasury Department would inspect all banks before reopening

  • Federal assistance and reorganization

  • Banks reopened and the immediate baking crisis was over

• The Economy Act - convince conservatives that the federal government was in safe hands

  • Balance federal budget - cut salaries of government employees and reduced pensions

• Repealed Prohibition

• 1933- shifted off the gold standard —> manipulate the value of the dollar

  • New, fixed standard (reduced gold content)

  • Government-managed currency - government poly could raise or lower the dollar value according to economic circumstances

• Glass-Steagall Act (1933) - government can curb irresponsible speculation by banks

  • Federal authority over previously unregulated areas

  • Established the Federal Deposit Insurance Corporation - guaranteed all bank deposits up to 2500

• 1935 Act - transferred authority of banks to Federal Reserve Board

• 1933 Truth in Securities Act - corporations must provide full and accurate information about them to the public

• 1934 Securities and Exchange Commission (SEC) - regulate stock market

Agriculture

• Agricultural Adjustment Act - reduced crop production and end agricultural surpluses (stop the decrease in farm prices)

  • Farmers Decide production limits - the Agricultural Adjustment Administration (AAA) decides how much they should produce and would pay subsidies (Parity)

  • Tax on food processing

• Rise in prices and stabilizing of the agricultural economy

• Soil Conservation and Domestic Allotment Act - reduce production to conserve soil

• Assist poor farmers - Resettlement Administration/Farm Security Administration

  • Provided loans to help farmers move to better lands

  • Rural Electrification Administration - made electric power available

Industry

• Relaxed antitrust laws (stabilize prices) but businesses had to make concessions (recognizing unions)

• National Industrial Recovery Act - National Recovery Administration

  • Set a minimum wage and max workweek, abolished child labor

  • No company could lower prices or wages

  • Problems - poorly written, unenforced, etc

  • Section 7(a) - workers had the right to form unions, collective bargaining

    • Not enforced - no recognition of unions

  • Public Works Administration - spending programs, not enough money

  • Industrial production declined

  • Court intervened - said that the NRA was unconstitutional

Regional Planning

• Tennessee Valley Authority (TVA)

  • Completed the unfinished dam at Muscle Shoals (Began in WWI)

  • Sold electricity at reasonable rates

  • Redevelopment of the entire regions - improved water transportation, eliminated flooding, etc

Federal Relief

• Established the Federal Emergency Relief Administration (FERA) - cash grants to states to help bankrupt relief agencies

• Civil Works Administration (CWA) - put people to work on temporary projects - money into the economy and helping people

• Civilian Conservation Corps (CCC) - provide employment to young men

  • Worked on projects in national parks and forests

• Farm Credit Administration - refinanced farm mortgages (mortgage relief)

  • Frazier-Lemke Farm Bankruptcy Act - enabled farmers who couldn’t pay their mortgage to regain their land

• Home Owners Loan Corporation - refinanced mortgages of householders

  • Federal Housing Administration - mortgages for new construction and home repairs

Critics of the New Deal

• Mostly came from the right - conservatives and business leaders

• American Liberty League - Opposition to the policies and “attacks on free enterprise”

  • Other critical groups - Communist Party and Socialist Party

• Townsend Plan - all Americans over 60 would receive monthly government pensions (must be retired)

  • Not passed but did pass a Social Security system

• Father Coughlin - fascism and antisemitism

  • Monetary reforms -remonitization of silver, greenbacks, nationalization of banking system, etc

  • Established the National Union for Social Justice

• Senator Huey Long - rising popularity and attacks on companies, banks, etc

  • Wealth redistribution - “Share-Our-Wealth Plan”

    • The government could end the Depression by using the tax system to confiscate surplus riches of the wealth and distribute that money to the rest of the population

The “Second New Deal”

• Now directly attacking corporate interests and started a series of tax reforms (“Soak-the-rich” scheme)

  • Break up utility holding companies/monopolies - The Holding Company Act

• National Labor Relations Act/Wagner Act - enforcement of the 1933 National Industrial Recovery Act

  • National Labor Relations Board

  • Guaranteed workers the right to form unions and engage in collective bargaining

Labor

• Trade union movement

• Unskilled workers = majority of the work-force —> Industrial unionism

  • All workers in a particular industry should be organized in a single union

  • Congress of Industrial Organizations (CIO) - John Lewis

    • More receptive to AAs and women than the AFL, more militant

• Sit-Down Strike - autoworkers challenged corporate opposition, strikebreakers could not be used

  • General Motors company formally recognized the United Auto Workers

• Others were not so lucky - Memorial Day Massacre. Police opened fire on Steel workers

Social Security

• Social Security Act - assistance for the elderly, pension system (provide workers income on retirement)

  • Unemployment Insurance - laid off workers could receive temporary government assistance

  • Federal aid to the disable and dependent children

• Long term relief

Immediate Relief

• Works and Progress Administration (WPA) - work relief for the unemployed

  • Renovated and built public buildings, airports, roads, etc —> kept people employed and pumped money into the economy

  • Flexible - Federal Writers’ Project, Arts Project, etc

• Men - government used work relief

• Women - not work relief, but cash assistance —> Aid to Dependent Children (assist single mothers)

1936 Referendum

• Roosevelt vs. Landon —> overwhelming victory for Roosevelt

• Party realignment - Democrats now controlled farmers, urban working class, poor and unemployed, black communities, traditional progressives, and new liberals

Trouble for the New Deal

• Roosevelt wanted to overhaul the federal court system

  • Add 6 new justices - wanted to appoint new, liberal justices

  • However, the Court was shown to have a new moderate position so the Court-packing bill was rejected (unnecessary)

    • Not an obstacle to the New Deal anymore

• Gross national product rose -Roosevelt decided that the problem was no longer depression, but inflation

  • Cut the WPA and laid off relief workers, other cuts in spending —> economic conditions soon turned similar to those in 1932-33

• This caused another recession (Recession of 1937/Roosevelt’s Recession)

  • Thought that it was because of the decision to reduce spending —> increased spending on public works and relief programs

• Temporary National Economic Committee - representatives of both house to consider major reforms in antitrust laws

• Fair Labor Standards Act - established a national minimum wage and 40 hour workweek, restrictions on child labor

• 1938 = end of the New Deal -Congressional opposition, threat of world crisis

Broker State

• Remake American capitalism

• Did not combine all elements of society into a single unit, but elevated and strengthened new interest groups so they could compete more effectively in the national market

  • Interest group: Corporate world

  • Competition from labor movement, agriculture, consumers

• Federal government = mediator

• ***Federal government as a protector of interest groups and supervisor of competition, rather than something that creates universal harmony

  • Many groups received government assistance, except for African Americans

African Americans

• Appointed black officials - “Black Cabinet”

  • Used to vote Democratic, now voted Republican

• Reinforced patterns of discrimination - separate black camps (CCC), paid them less, excluded from employment, etc

• Not much done to really help them

Native Americans

• Assimilate Native Americans into white society

• John Collier - Indian Reorganization Act

  • Gave back the right to own land collectively, reverse the attempt to force Native Americans to assimilate

Women

• Similar to African Americans - did not really advance them much

• Frances Perkins - first female cabinet member

  • Eleanor Roosevelt

• Social Security Act of 1935

• Many of the organizations discriminated against women

West and South

• Benefited disproportionately - received more federal funds

• New Deal Programs accepted existing racial and ethnic prejudices

• Programs had significant impact on the West

  • Agricultural programs had more impact (West = primarily farming), best locations for dams and power stations (sources of water)

• However, federal government had a much greater presences in the West

• Benefit to the South = least economically developed region

National Economy

• Unable to actually revive or reform the American economy

  • The New Deal did not end the depression, WWII did

  • No alteration of the distribution of power

• Federal welfare state - Social Security System —> changed the government’s traditional reluctance to offer public assistance

• Changes in politics: enhanced power of the federal government - state and local governments were second

  • Presidency = center of authority

• Changed the Democratic Party