Notes: The New Deal
Chapter 22 Summary

1. A New Deal Fights The Depression

FDR is overwhelmingly elected president against incumbent Herbert Hoover: 23 million vs. 16 million votes

Reform oriented governor of New York, distant cousin of TR (his wife Eleanor was a niece of TR)

Did not take office until March 1933 (20th amendment would beginning in 1936 provide for January inauguration ), economic crisis worsened

He put together a "brain trust," many from Columbia University

His program, a New Deal, had three goals: relief, recovery and reform

First Hundred Days: March 9 to June 16--15 major pieces of legislation are passed

Banking crisis took his immediate attention: he declares a bank holiday one day after taking office which closed the banks for four days

Used fireside chats overt the radio to communicate with the public

Emergency Banking Relief Act, Glass-Steagall Act: restored confidence in system, established FDIC to insure deposits

Federal Securities Act--required corporations to provide complete information on all stock offerings, Securities & Exchange Commission would provide for regulation of stock market

Assisting farmers: AAA raised crop prices, farmers are paid to limit production

Providing work projects: CCC took young urban men and assigned them to rural conservation projects; nearly 3 million men were active in a massive reforestation program to prevent future Dust Bowls

Public Works Admin: construction jobs

Civil Works Admin: paid for school and road constructions, salaries for teachers; 4 million jobs in the winter of 1933-1934

Federal Emergency Relief Admin.: $500 million to states for direct relief

National Industrial Recovery Act established NRA: set prices, banned child labor, established labor standards (including the right to organize unions)

TVA: built and renovated dams, controlled floods, hydroelectric power for depressed region in the south, an economic development program that is still in place today

FHA: federal loans for home mortgages and home repairs

Critics on the left and right attacked the New Deal: Liberals attacked it for being insufficient, Conservatives believed it intervened excessively in the economy and illegally superseded state responsibilities

US Supreme Court ruled AAA and NIRA as unconstitutional in 1935

FDR proposed a "court packing" plan--he wanted to add six additional justices--it is rejected by Congress and the public is also critical

American Liberty League attacks FDR from the Right, Business leaders are very unhappy with the New Deal; it included former Democratic presidential candidates John Davis and Al Smith

Charles Coughlin-- Detroit priest; he reached millions over the radio; called for a guaranteed annual income and nationalization of the banks, he lost support due to his anti-Semitism

Huey Long--leftist politician from Louisiana; his "Share the Wealth" clubs included nearly 8 million members; he would be gunned down on the steps of the Louisiana capitol in 1935

Francis Townsend--proposed pension plan for elderly--all people over 60 would receive $200/month and would be required to spend it within 30 days--considered unrealistic due to its cost, Social Security would provide a scaled down pension plan for the elderly

21st amendment ratified in 1933 ended Prohibition

2. The Second New Deal Takes Hold

The 1934 midterm elections demonstrate support for New Deal programs: the Republicans would have only 103 House seats and 25 Senate seats

Second Hundred Days: more assistance to workers and farmers; help for the "forgotten man"

Role of Eleanor Roosevelt: FDR's link to labor, women and people of color

1936 Election: FDR wins every state except Maine and Vermont, defeating Gov. Alf Landon of Kansas

Second AAA to assist farmers

Resettlement Admin. (later Farm Security Admin.) lent funds to small farmers to buy land instead of renting or sharecropping

Works Progress Admin.: led by Harry Hopkins, constructed roads, schools, hospitals, libraries, airports, etc.; also employed teachers, writers, artists, actors, and musicians: between 1935 and 1943 over 8 million people were employed, building 850 airports, 110,000 public buildings including schools (including Grady's gym), hospitals, and libraries

National Youth Admin: employed 2 million young people, working in high schools and colleges

National Labor Relations Act--Wagner Act: provided for collective bargaining and union organizing; if a majority of workers at a work site designated they wanted a union to represent them with an election then the employer was required to negotiate a contract to include wages, benefits and working conditions; unfair labor practices could be fined if the employer failed to comply

Fair Labor Standards Act: provided for minimum wage (originally $.25/hour) and maximum work week (originally 44 hours/week), restrictions on child labor in 1938

Social Security Act (OASDI)--old age insurance, unemployment compensation, and aid to families with dependent children (and people unable to work); paid for by payroll taxes and employer contributions, many workers excluded

Rural electrification: only 30% of farmers had electric power in 1930s; even by 1945 only 45% of farms would have electricity

3. The New Deal Affects Many Groups

Frances Perkins--Sec. Of Labor and first female cabinet officer

Women faced discrimination in federal jobs programs; were paid lower wages than men

Mary McCleod Bethune: leader of the "Black Cabinet" and a NYA administrator

FDR appointed significant numbers of blacks into federal positions

He refused to support anti-lynching and anti-poll tax legislation because he was afraid of losing white southern voters and opposing white Congressional leadership

Hispanics were largely ignored by the New Deal, farm workers were paid as little as $.09/hour and received no federal protection

Native Americans fared better: note that full citizenship had only been awarded in 1924; Indian Reorganization Act of 1934 restored much of reservation lands to tribal ownership

A "New Deal Coalition" would develop: southern whites, urban groups, unionized industrial workers, and African-Americans

AFL was reluctant to aggressively organize workers: John Lewis and Walter Reuther organized the CIO, Committee (Congress) of Industrial Organizations to take advantage of NLRA, increased organized labor from 3 million to 8 million members by 1941, new tactics: sit down strikes, flying squadrons, etc, violent confrontations due to employer resistance and use of police, strikebreakers and National Guard

4. Society And Culture

1930s were a golden age for radio and movies

Nearly 2/3 of people attended movies each week

90% of families would have a radio

"Gone with the Wind," "War of the Worlds"

"Grapes of Wrath," "Native Son," "USA Trilogy"

5. The Impact Of The New Deal

Reluctance by Congress and FDR to depend upon on deficit spending (as urged by economist John Maynard Keynes)

By 1937 unemployment had fallen to 14%

Pressure to scale back New Deal programs in 1937 led to increased unemployment

Conservatives criticized the massive size of government and federal debt

Only the threat of WW2 would lead the government to borrow the funds necessary to truly end the Depression, with deficit spending reaching almost $55 billion in 1943 (over ten times the level of most New Deal years)

Social Security is firmly entrenched though privatization proposals are increasingly voiced

The labor movement is today at a low ebb in its significance: less than 1 of 10 private sector workers are members of a labor union as opposed to nearly 1/3 of workers at labor's peak

The NLRB today is viewed by many union leaders as ineffective in protecting union activists

Tennessee Valley Authority has been under fire for pollution, strip mining of coal, using nuclear power plants

Many banking regulations, welfare programs, and stock market rules were repealed by Republican Congressional actions in the 1990s as confidence in the free market and hostility to government increased