The New Deal and The Great Depression

Overview of The New Deal

Purpose: Franklin Roosevelt's New Deal addressed the Great Depression through extensive federal programs focusing on relief, recovery, and reform.

I. Franklin Roosevelt (1882-1945)

A. Background

• Born in Hyde Park, NY, into a wealthy family.

• Served as Undersecretary of the Navy during WWI.

• Nominated as the Democratic vice presidential candidate in 1920.

• Contracted polio in 1921, leading to physical disability.

• Elected governor of NY in 1928, gaining national attention through depression-era initiatives.

• Noted for his political mastery and willingness to compromise.

B. Eleanor Roosevelt (1884-1962)

• Niece of Theodore Roosevelt and FDR's distant cousin.

• Supported FDR's career during his polio struggle in the 1920s.

• Became a leading figure in the Democratic party's female wing.

• Actively advocated for women, children, the poor, and African Americans.

• Recognized as the most engaged first lady in U.S. history.

II. Election of 1932

A. Candidate Nomination

• Democrats: Nominated Roosevelt with the promise of a "new deal."

  • Campaign platform included a balanced budget, cuts in government spending, government aid for the unemployed, and repeal of prohibition.

• Republicans: Nominated Hoover, supporting high tariffs and free enterprise, contrasting with Roosevelt's optimism.

B. Election Results

• Roosevelt won decisively: 472 Electoral Votes to Hoover's 59.

• Shift of African American support from the Republican to the Democratic party began.

• Marked a 20-year era of Democratic control.

III. The New Deal Programs

A. Relief Programs

• Federal Emergency Relief Administration (FERA)

• Civilian Conservation Corps (CCC)

• Public Works Administration (PWA)

B. Recovery Programs

• National Industrial Recovery Act (NIRA)

• Agricultural Adjustment Act (AAA)

C. Reform Programs

• Social Security Act (SSA)

• Securities Exchange Act (1934)

D. The Lasting Impact

• Of New Deal initiatives on American society and governance.

IV. Notes from Chapter 31 - The American Pageant, 17th Edition: The New Deal and The Great Depression

A. Economic Context

• Discussed the collapse of the 1929 stock market and the subsequent economic turmoil that led to widespread unemployment.

B. The New Deal's Philosophy

• Contrasted with the Hoover administration's approach, highlighting Roosevelt's more optimistic view that government intervention was necessary to rescue the economy.

C. Major New Deal Legislation

• Expanded on key programs initiated under the New Deal, including the Works Progress Administration (WPA) and the Tennessee Valley Authority (TVA).

D. Criticism and Opposition

• Mentioned critiques from both the left and right, illustrating that the New Deal faced opposition from figures like Huey Long and the American Liberty League.

E. The New Deal's Legacy

• Emphasized the lasting changes to American economic policy and the role of government, shaping long-term expectations for federal involvement in economic security and welfare.

The First New Deal (1933-1934)

The First New Deal was a set of federal programs and policies enacted by President Franklin D. Roosevelt in response to the Great Depression. It was aimed at providing immediate relief to the unemployed and struggling Americans, stimulating economic recovery, and implementing reforms to prevent future economic crises. The First New Deal focused on three main pillars: relief, recovery, and reform.

I. Relief

Relief programs were designed to provide immediate assistance to those suffering the effects of the Great Depression.

A. Federal Emergency Relief Administration (FERA)

• Established in 1933 to distribute federal funds to state and local agencies intended for direct relief.

• Provided cash grants to the needy, helping to alleviate hunger and poverty.

B. Civilian Conservation Corps (CCC)

• Launched in 1933, the CCC provided jobs for young men aged 18 to 25 years.

• Participants engaged in conservation projects such as planting trees, building dams, and improving state and national parks, while also sending a portion of their earnings back home.

C. Public Works Administration (PWA)

• Created as part of the National Industrial Recovery Act (NIRA) in 1933, the PWA focused on large-scale public works construction projects.

• Funded the building of infrastructure such as bridges, schools, and hospitals, aimed at creating jobs and stimulating the economy.

II. Recovery

Recovery initiatives focused on revitalizing the American economy and promoting industrial growth.

A. National Industrial Recovery Act (NIRA)

• Enacted in 1933, the NIRA sought to boost industrial production by establishing codes of fair competition.

• It aimed to raise wages and prices, encouraging consumer spending and economic growth.

B. Agricultural Adjustment Act (AAA)

• Established in 1933, the AAA aimed to boost agricultural prices by reducing surpluses.

• It paid farmers to cut back on crop production, thus raising prices and ensuring farmers a better income.

III. Reform

Reform programs were aimed at overhauling the financial system to prevent future economic crises and protect consumers.

A. Glass-Steagall Act

• Passed in 1933, this legislation separated commercial banking from investment banking.

• Established the Federal Deposit Insurance Corporation (FDIC), which insured bank deposits to restore public confidence in the banking system.

B. Securities Exchange Act (1934)

• This act aimed at regulating the stock market, requiring companies to provide truthful information to investors and establish the Securities and Exchange Commission (SEC) to enforce the rules.

C. Social Security Act (1935) (Although it is primarily associated with the Second New Deal, it stemmed from the reforms initiated during the First New Deal)

• Established a system of old-age benefits and unemployment insurance, laying the groundwork for the modern welfare state.

The Second New Deal

The Second New Deal refers to a series of programs and reforms launched by President Franklin D. Roosevelt between 1935 and 1936 to address the ongoing economic challenges of the Great Depression and build upon the initial policies of the First New Deal. The Second New Deal aimed to provide further relief, promote economic recovery, and implement significant social reforms.

I. Key Features of the Second New Deal

A. Social Security Act (1935)

• Established a system of old-age benefits for retirees, unemployment insurance, and aid for dependent children and the disabled.

• Laid the foundation for the modern welfare state, significantly changing the government's role in providing social safety nets.

B. Works Progress Administration (WPA) (1935)

• Created to provide jobs for the unemployed, the WPA employed millions in various public works projects.

• Funded infrastructure improvements, including roads, bridges, schools, and parks, while also supporting the arts through programs for musicians, writers, and artists.

C. National Labor Relations Act (Wagner Act) (1935)

• Strengthened labor rights by allowing workers the right to join unions and engage in collective bargaining.

• Established the National Labor Relations Board (NLRB) to oversee labor relations and protect workers' rights.

D. Rural Electrification Administration (REA) (1935)

• Aimed to bring electricity to rural areas of the United States.

• Improved the quality of life and economic prospects for rural Americans, enhancing agricultural productivity and household convenience.

E. Revenue Act of 1935

• Increased taxes on higher income brackets and corporations, aimed at reducing income inequality and funding New Deal initiatives.

• Implemented new taxes on inherited wealth to redistribute wealth more effectively.

II. Goals of the Second New Deal

• The Second New Deal sought to address the limitations and criticisms of the First New Deal by:

  • Providing more direct relief to the poor and unemployed.

  • Strengthening workers' rights and labor protections.

  • Expanding social welfare programs to create a safety net for vulnerable populations.

  • Promoting economic recovery through public works and job creation.

III. Legacy of the Second New Deal

• The Second New Deal had a profound impact on American society, creating lasting social and economic reforms that reshaped the role of the federal government in providing support and protection for its citizens.

• It strengthened the social safety net, established labor rights, and laid the groundwork for future welfare and employment programs.

• The Second New Deal also increased the political power of labor unions and solidified the Democratic Party's coalition among various social groups, including workers, farmers, and the urban middle class.