USHH New Deal
US History Honors
The New Deal
Unit Overview
Essential Questions
Who has gained and who has lost from economic transformation in the U.S.? Why?
What role should the government play in the economy?
Unit Focus Question: How did the New Deal change the relationship between Americans and the federal government?
Unit Skills:
By the end of this unit you should be able to:
Describe key programs and agencies of the New Deal
Explain how the programs of the Hundred Days were intended to help end the Great Depression
Analyze the pressures behind the adoption of the so-called Second New Deal
The effects of both the Court-packing scheme and the recession of 1937 on the New Deal
Evaluate the effectiveness of the New Deal
Analyze how the New Deal changed the relationship between Americans and the federal government
Analyze the relationship between the economic programs of the New Deal, and the political programs and ideologies of preceding eras
Analyze the lasting significance of the New Deal to the American economy and political system.
Key terms:
credit
Pre-Depression
A loan. Before the Depression, many Americans were considerably indebted because they purchased appliances and other consumer goods on credit.
“American Plan”
1920s
The basis of this plan for dealing with unions that was adopted by employers was the “open shop”: a workplace free of government regulations and unions. Employers argued that collective bargaining infringed on the liberties of management.
1929
By 1929, the national share of income of the wealthiest 5 percent exceeded that of the bottom 60 percent. Meanwhile, 40 percent of Americans lived in poverty.
Black Tuesday
October 29, 1929
Massive debt, low prices and wages for farmers, and rampant speculation in the stock market caused the market to crash. This is regarded as the first sign of the onset of the Great Depression.
Herbert Hoover
President during the Great Depression
President Hoover did not provide direct aid to the unemployed. Instead, his strategies for remedying the Depression included: promoting individual “belt-tightening,” encouraging businessmen to take voluntary action toward maintaining workers’ salary, and encouraging charity. He signed the Hawly-Smoot Tariff into law. In the final year of his presidency, President Hoover conceded that voluntary action would not be sufficient to curb the Depression. Instead, he created the Reconstruction Finance Corporation, which loaned money to failing banks, railroads and other businesses. In addition, President Hoover established the Federal Home Loan Bank System, which aided home owners who were on the verge of foreclosure. Finally, President Hoover approved $2 billion in aid to provide employment through public works projects.
Hoovervilles
During the Depression
Homeless Americans established these shanty towns within cities.
Hawley-Smoot Tariff
1930
This policy raised taxes on imported goods and thus reduced international trade. Moreover, other nations retaliated with their own tariffs, worsening the Depression.
Dust Bowl
1930s
Unusually dry weather worsened the impact of the Depression on rural America. Mechanized agriculture had pulverized the topsoil and killed native grasses that prevented erosion. Winds blew away the soil and caused the Dust Bowl and its dust storms, displacing more than 1 million farmers.
Bonus Army
Early 1932
A group of 20 thousand unemployed World War I veterans marched on Washington, demanding the early payment of a bonus due to them in 1945.
The First New Deal
1933-1934
This series of policies constructed by the Roosevelt administration in their first few years transformed the role of the federal government, began to relieve the impacts of the Depression, and constructed many public facilities.
Hundred Days
1932
The first hundred days of Presidnet Roosevelt’s administration. Roosevelt had immense momentum following his electoral victory, and during this period, he persuaded Congress to create the National Recovery Administration (NRA), Civilian Conservation Corps (CCC), and Agricultural Adjustment Act (AAA).
“brains trust”
This term refers to a group of academic who informed the First New Deal. The group advocated for the regulation of corporations rather than breaking them up, because they believed large corporations were an inevitability in a large economy. As a result of their advice, the First New Deal took on a philosophy of regulating large corporations.
Congress of Industrial Organizations (CIO)
Formed in 1935
This organization of labor unions attempted to mobilize all workers in a given industry, where previous labor organizations organized workers by trade. The United Auto Workers (UAW) were a crucially import CIO union, and both organizations were led by John L. Lewis. The CIO aimed to secure “economic freedom nd industrial democracy.”
industrial democracy
A form of employment in which workers maintain agency in negotiating with employers and dictating certain aspects of their work.
sit-down strike
December 1936
This strategy was unveiled by United Auto Workers (UAW) during strikes at the Fisher Auto Body plant in Cleveland. Instead of walking out of the plant, the workers halted production but remained inside. As a result, management was unable to bring in strikebreakers.
Upton Sinclair and EPIC
Nominated in 1934
This former muckraker won the Democratic nomination for governor in 1934. Sinclair was the head of the End Poverty in California (EPIC) movement. He called for the state to utilize currently unused factors and land to form cooperative ventures that would provide jobs. He was subjected to one of the first “negative” media campaigns—which associated him with the Communist Party—and lost the elections.
Huey Long and the Share Our Wealth Movement
Governor from 1928-1935
The governor of Louisiana who attained dictatorial power over his state. Long used his power over all the branches of the state government to build roads, schools, and hospitals, while increasing the taxation of Louisiana’s oil companies. In 1934, Long launched the Share our Wealth movement, which had the slogan, “Every Man a King.” Long then called for the confiscation of most of the richest Americans’ wealth. He intended to use those funds to grant $5 thousand and a guaranteed job to all citizens. Long was about to launch a presidential campaign before he was assassinated in 1935.
Dr. Francis Townsend
This California physician proposed that the government would make a monthly payment of $2 hundred to older Americans while requiring that they spend it immediately. Townsend’s aim was to boost the economy.
Father Coughlin
Relevant mid-1930s
Known as the “radio priest,” Father Charles Coughlin attacked Wall Street bankers and greedy capitalists on his show. Choughlin called for government ownership of key industries to combat the Dpression. He initially supported President Roosevelt but became increasingly critical of him because Coughlin believed the New Deal failed to promote social justice. Coughlin later turned to antisemitism and support for European fascism.
The Second New Deal
1935-1938
This event was launched by Democratic gains in the midterm elections of 1934 alongside increasing popular discontent, which was voiced by the alternative opinions of Long, Townsend, and Coughlin. The philosophy of the Second New Deal emphasized economic security, which is the idea that Americans would be guaranteed protection against unemployment and poverty. This event ended when southern Democrats increasingly opposed President Roosevelt’s economic and social policies. Moreover, the Roosevelt administration shifted their focus away from the New Deal to winning World War II.
welfare state
The term that originated in Britain during World War II to refer to a system of income assistance, health coverage, and social services for all citizens. The American welfare state was launched in 1935 by the Social Security Act.
Court-packing
1936
Emboldened by his landslide electoral victory in the presidential election of 1936, President Roosevelt proposed that the president should be able to appoint a new justice to the Supreme Court for each justice who remained past age seventy. Roosevelt hoped to outnumber the justices who might invalidate the economic policies of the Second New Deal. Congress rejected the Court packing plan, but Roosevelt was successful because his threat scared the justices away from challenging New Deal policy. Where previously the Supreme Court had invalidated the economic policies through which Roosevelt towed the constitutional line, the Court now fell into line.
Fair Labor Standards Act
Passed in 1938
The Act banned goods produced by child labor from interstate commerce and established the houly minimum wage at forty cents. The Act also required overtime pay for hours above forty per week. The Act continued the the New Deal’s deviation from the preeminent pre-Depression federal government philosophy by regulating wages and working conditions.
The “Roosevelt recession”
1937
Economic conditions improved in 1936, but the following year, Roosevelt reduced federal funding for farm subsidies and the work relief of the Work Progress Administration (WPA). As a result, unemployment rose.
Keynesian economics
Published 1936; adopted by FDR 1938
This economic theory began with The General Theory of Employment, Interest, and Money by John Maynard Keynes. The theory urged the government to engage in large-scale spending to avoid inflation and stimulate economic activity. Keynes challenged the traditional belief among economists that a balanced budget was more important by insisting that large-scale spending should take place even amidst a budget deficit. President Roosevelt began practicing Keynesian economics at the end of the Second New Deal.
welfare
The stigmatized term for relianze on handouts from the government. Many recipients of welfare were minorities, and they often received low aid packages. This was because of the “southern veto,” in which Democratic, southern congressmen voted to exclude agricultural and domestic workers from generous Social Security programs. Welfare gained a reputation as a program for minorities and a syteroetype that Black Americans recieved unearned government assistance emerged.
Redlining
The practice of excluding Black Americans from federally insured mortgages by marking minority neighborhoods as “undesireable” with regard to credit. Redlining limited Black Americans’ opportunities to accumulate home equity and finanincial wealth.
Key Acts/Programs (First New Deal):
Emergency Banking Act
Passed March 9, 1933
This Act provided funds to bail out banks which neared collapse during the Depression. The Act was passed after President Roosevelt declared a “bank holiday,” temporarily halting all bank operations.
Glass-Steagall Act
Passed 1933
This Act barred commercial banks from buying and selling stocks while also establishing the Federal Deposit Insurance Corporation (FDIC).
Federal Deposit Insurance Corporation (FDIC)
Established 1933
This government system insured the accounts of individual depositors. Combined with the Glass-Steagall Act, these provisions during the Hundred Days returned the American banking system to safety.
National Industrial Recovery Act (NIRA)
Passed 1933
Established the National Recovery Administration (NRA) and the Public Works Administration (PWA).
National Recovery Administration (NRA)
Established 1933
The Administration worked with groups of business leaders to establish industry codes that set standards for output, prices, and working conditions. The NRA was plunged into controversy when large companies dominated the process of setting industry codes. As a result, these large companies could used the NRA to drive up prices, limit production, lay off workers, and divide markets among themselves at the expense of their smaller competitors.
Civilian Conservation Corps (CCC)
Established March 1933
This government organization created temporary jobs with the goal of combating unemployment while also improving infrastructure. The CCC employed young men to work on project like forest preservation, flood control, and the improvement of national parks and wildlife preserves. Before the program ended, more than 3 million people had lived in CCC camps, and the organization made a major contribution to the environment in America.
Public Works Administration (PWA)
Established 1933
Established by Congress through the National Industrial Recovery Act (NIRA) created this organization with a $3.3 billion budget. The Administration built roads, schools, hospitals and other public facilities.
Tennessee Valley Authority (TVA)
Established 1933
This organization built a series of dams to prevent floods and deforestation along the Tennesee River. The organization also provided cheap electricity for homes and factories, and for the first time, the federal government competed in the business of selling electricity with private companies.
Agricultural Adjustment Act (AAA)
Passed 1933
This Act gave the federal government the authority to set production quotas for major crops and to pay farmers to reduce their supply of crops with the intent of raising prices. Moreover, many crops were destroyed and livestock were killed (including 6 million pigs). As a result, farm prices rose and so did the incomes of property-owning farmers. However, the policy of the AAA to incentivize landowning farmers to grow fewer ccrops caused the eviction of thousands of poor tenant farmers and sharecroppers.
Home Owners Loan Corporation (HOLC)
Associated with the practice of the Federal Housing Administration (FHA) to insure millions of long-term mortgages that were issued by private banks.
Federal Housing Administration (FHA)
Established 1934
This organization insured millions of long-term mortgages issued by private banks in order to protect home owners from foreclosure and to encourage the construction of new homes. Moreover, the federal government itself built thousands of units of low-rent housing. It is important to note that the FHA insured mortgages which stipulated that the property could not be sold to non-white buyers, thus disadvantaging Black Americans.
Federal Communications Commission (FCC)
Established 1934
This organization oversaw the American broadcasting and telephone communications.
Securities and Exchange Commission (SEC)
Established 1934
This organization regulated the stock and bond markets.
Key Acts/Programs (Second New Deal):
Rural Electrification Agency (REA)
Created by Congress to bring electric power to homes that lacked it. Around this time, 80 percent of farms were still without electricity. One reason Congress created the REA was to enable more Americans to purchase household appliances, which would therefore stimulate the economy.
Works Progress Administration (WPA)
Signed into law 1935
This government body, established by President Roosevelt, hired around 3 million Americans during the Depression. These workers constructed thousands of public buildings and bridges, more than 500 thousand miles of roads, and 600 airports. The WPA was unique among work relief programs because it employed many out-of-work white collor workers and professionals.
Wagner Act
Signed into law 1935
This Act empowered the National Labor Relations Board (NLRB) to supervise elections in which employees voted on union representation. The Act also outlawed “unfair labor practices,” which included firing or blacklisting union organizers. Essentially, the Act guaranteed workers’ right to unionize.
National Labor Relations Board (NLRB)
Created 1935
The organization established by the Wagner Act.
Social Security Act
Signed into law 1935
This Act launched the American welfare state as President Roosevelt, on behalf of the government, assumed a responsibility to ensure the material well-being of Americans. The Act created unemployment insurance, old age pensions and aid for the disabled, elderly poor, and families with dependent children. Many of these ideas reflected proposals of Progressive platforms.
Impacts of the New Deal on:
Women
The New Deal brought more women into government than ever before in American history. The Secretary of Labor Frances Perkins was among the female experts who advised President Roosevelt. The most prominent woman in politics was Eleanor Roosevelt, who pioneered the role of the First Lady by speaking on issues such as civil rights and labor, travelling across the country, and writing a newspaper column. Crucially, the New Deal increased the visibility of women in national politics.
However, organized feminism dwindled during the New Deal. As industrial jobs that weretypically were held by men disappeared during the Depression, movements emerged to push women out of the work force to make way for men. For example, the Hoover administration prohibited both members of a married couple from holding federal jobs, and as a result, many female civil servants were fired. Other employers, such as public schools and banks, banned married women from jobs. In addition, the key employment opportunity provided through the Civilian Conservation Corps (CCC) was only available to men. Moreover, Social Security programs left women working in the home uninsured because they did not earn wages.
Black Americans
Important to note is that Black Americans in the South had lost the ability to vote around the turn of the century, and this led to Democrat political superpower in southern governments. When Democrats took control of Congress in 1933, and senior, southerner Democrats took leadership positions, they insisted that Social Security programs exclude agricultural and domestic workers, which were the largest categories of employment among Black Americans. Thus, because of the “sotuhern veto,” many Black Americans were excluded from Social Security programs and limited to the least generous program. Moreover, public assistance programs allowed for discrimination by local authorities who determined and evaluated “moral” eligibility standards. Low-level benefits recieved by Black Americans stigmatized “welfare” as a humiliating dependency on government handouts largelt for minorities.
Black Americans were the “last hired and first fired” as employers retained white workers over them. As a result, unemployment was double among Black Americans than whites. Overall, Black Americans recieved disproportionately little government relief and jobs on New Deal public works projects. Moreover, Black Americans were excluded from housing as the Federal Housing Administration did not hesitate to insure mortgages that contained clauses barring the house’s sale to non-white buyers. Meanwhile, Black Americans were excluded from fedrally back morgage insurance as minority neighborhoods were marked “undesireable” for credit purposes. Also, federal employment practices discriminated based on race, while many New Deal construction projects completely refused to hire Black Americans. Sharecroppers, many of whom were Black, were driven off land as a result of the Agricultural Adjustment Act (AAA) policy that raised crop prices by paying landowners to reduce cotton acreage.
During the New Deal, President Roosevelt appointed Mary McLeod Bethune, a prominent Black educator, as an advisor on minority affairs. Moreover, Eleanor Roosevelt directed national attention to the injustices of segregation, disenfranchisement, and lynching.
The voting patterns of Black Americans changed drastically during the New Deal. Where they had the right to vote in the North and West, Black Americans began voting for Democrats because of New Deal policy.
Native Americans
During the New Deal, Native Americans suffered impovershment and poor health conditions. In 1934, the Commisisoner of Indian Affairs John Collier launched an “Indian New Deal” by securing the passage of the Indian Reorganization Act. The Act abolished the government’s campaign that began under the Dawes Act of 1877, which was to force Native Americans into small plots of land and sell the rest. Moreover, the Act recognized the right of Native American nations to self-governance. However, during this period, federal agents supported by Collier seized Navajo animals that had been contributing to soil erosion and drought. Sheepherding was very important to the Navajo, and because of this, the Navajo rejected the Indian Reorganization Act.
Mexican Americans
During the Depression, 400 thousand Mexican American immigrants were deported. Many of the Mexican immigrants who remained in American worked under the grim conditions of California’s vegetable and fruit fields. Moreover, these workers did not receive benefits from the Wagner Act and the Social Security Act, because they did not apply to agricultural laborers.
Mexican American leaders took a confused strategy during this period: they attempted to gain greater rights by claiming to be white, but they also sought backing from the Mexican government and promoted a mystical sense of pride in their Mexican heritage which came to be known as la raza.