Chapter 24

Big Picture

• The Great Depression reshaped Americans’ expectations of government responsibility

• Franklin D. Roosevelt’s New Deal expanded the federal government’s role in the economy and social welfare

• Redefined liberty as including economic security, not just political rights

I. The Depression and the Election of 1932

Economic Crisis

• By 1932:

  • 25% unemployment

  • Thousands of banks collapsed

  • Massive homelessness (“Hoovervilles”)

• Farmers faced foreclosures and falling crop prices

Hoover’s Response

• Believed in limited government intervention

• Favored voluntary cooperation over direct aid

• Created the Reconstruction Finance Corporation, but aid largely helped businesses, not individuals

Election of 1932

• Franklin D. Roosevelt (Democrat) vs. Hoover

• Roosevelt promised a “New Deal”—vague but hopeful

• FDR won in a landslide

II. The First New Deal (1933–1934)

The Hundred Days

• Rapid passage of legislation to stabilize economy

Key Programs

• Emergency Banking Act: stabilized banks

• Glass-Steagall Act:

  • Created FDIC (bank deposit insurance)

  • Separated commercial and investment banking

• Agricultural Adjustment Act (AAA):

  • Paid farmers to reduce production

  • Raised farm prices but hurt tenant farmers

Relief and Recovery

• Civilian Conservation Corps (CCC):

  • Jobs for young men in conservation work

• Tennessee Valley Authority (TVA):

  • Hydroelectric power and economic development

• National Industrial Recovery Act (NIRA):

  • Industry codes, minimum wages, union rights

  • Declared unconstitutional in 1935

III. The New Deal and Liberty

• Expanded idea of liberty:

  • From freedom from government

  • To freedom from economic insecurity

• Government accepted responsibility for:

  • Employment

  • Wages

  • Welfare

IV. The Second New Deal (1935–1938)

Why a Second New Deal?

• Continued unemployment

• Pressure from labor unions and populist critics

• Supreme Court struck down earlier programs

Major Legislation

• Social Security Act (1935):

  • Old-age pensions

  • Unemployment insurance

  • Excluded many Black workers and women

• Wagner Act (National Labor Relations Act):

  • Protected workers’ right to unionize

  • Created NLRB

• Works Progress Administration (WPA):

  • Jobs in construction, education, arts

• Wealth Tax Act:

  • Higher taxes on richest Americans

V. Labor and the Rise of Unions

• Formation of CIO (Congress of Industrial Organizations)

• Organized unskilled and industrial workers

• Sit-down strikes (e.g., Flint auto strike)

• Union membership dramatically increased

VI. Limits of the New Deal

Racial Inequality

• Segregation persisted

• New Deal often excluded African Americans

• Discriminatory local administration in the South

Women

• Some gained government jobs

• Still expected to prioritize home life

• Social Security excluded many women workers

Native Americans

• Indian Reorganization Act (1934):

  • Ended forced assimilation

  • Encouraged tribal self-government

VII. Opposition to the New Deal

From the Right

• Conservatives argued it threatened capitalism and individual freedom

From the Left

• Huey Long: “Share Our Wealth”

• Francis Townsend: pensions for elderly

• Father Charles Coughlin: anti-bank rhetoric

Supreme Court

• Declared AAA and NIRA unconstitutional

• Roosevelt’s Court-Packing Plan (1937) failed politically

VIII. The New Deal’s Legacy

• Did not end the Great Depression alone

• World War II fully revived the economy

• Established:

  • Permanent federal welfare state

  • Labor protections

  • New definition of American freedom and citizenship

Key Terms & People to Know

• Franklin D. Roosevelt

• New Deal

• Social Security Act

• Wagner Act

• WPA

• CCC

• TVA

• CIO

• AAA

• Court-Packing Plan