Analyze the responses of Franklin D.
Roosevelt's administration to the problems of
the Great Depression, including how effective
were the responses of both the New Deal and
the second New Deal? How did they change
the role of the federal government?
13. The First New Deal
Main Idea A. First 100 Days – Restoring
Confidence
 Govt. programs which provided direct relief
to suffering Americans through govt.
spending
1. Roosevelt’s First 100 days was very
successful FDR and Congress went to work
providing for direct relief, recovery and
reform.
 Relief: ease suffering of the needy
 Recovery: begin economic growth
 Reform: help prevent future economic crises
 From March of 1933 to June of 1933,
Roosevelt sent 15 proposals to Congress
and all 15 were adopted
 Congress and President tried anything
reasonable to overcome the Great
Depression.
 “Take a method and try it. If it fails, admit it
frankly and try another.”
13. The First New Deal
2. Restoring Confidence - Banking

what has become blatantly clear is that the
American people have lost faith in the country’s
economic system.

It is critical for the president to address the fear that
many Americans have with banks and their possible
failure.

This fear has lead to many formerly healthy banks
failing due to peoples’ fear and rapid withdrawal of
savings.

Two days after taking office issued “Bank Holiday”
closing all banks for four days to give Congress time
to discuss reforms

Emergency Banking Act required


Treasury Dept inspection of banks

assistance to troubled institutions

sound banks to reopen under Treasury Dept

restored ¾ of closed banks
Economy Act passed a few days later

forced balanced fed budget thru cutting govt salaries +
veterans pensions
13. The First New Deal
3. Restoring Confidence - Fireside chat
– safe to put $ in a reopened bank
 FDIC – guaranteed bank deposits up
to $5k
4. 1933 Abandoned the gold standard
to help raise stock and commodity
prices and ease debt burden of
farmers and investors
 government began manipulating value of
dollar by buying/selling large amounts of
silver and accumulating gold in reserve
 According to Keynesian economic theory,
one of the best ways to fight off an
economic downturn is to inflate the money
supply
FDR got Congress to pass the 21st
Amendment
13. The First New Deal
Main Idea B. RELIEF:
Ease Suffering of the Needy
FERA / 1933
1. Federal Emergency Relief Act
•
•
•
•
•
Distributed $500 million of direct aid to unemployed workers
such as food, clothing and grants of money to cities.
Administration saw need to help impoverished until economy
improved – FER Administration
• gave cash to state relief groups
To aid in mortgage relief created Farm Credit Administration
to help farmers refinance
1933 Frazier-Lemke Farm Bankruptcy Act aided foreclosed
farmers
1933 Home Owners’ Loan Corporation refinanced households
13. The First New Deal
RELIEF:
Ease Suffering of the Needy
WPA / 1933 to 1943
2. Works Progress Administration
•
Employed 8.5 million workers in construction and other jobs, but
more importantly provided work in arts, theater, and literary
projects
•
2,500 hospitals
•
5,900 schools
•
13,000 playgrounds
•
125,000 public buildings
Federal Writers Project of WPA –
1935
• (Music Proj, Theater Proj,
ect.)
• provided govt salary to those
ppl to continue work
• historians, teachers, writers,
librarians, and other whitecollar workers
13. The First New Deal
RELIEF: Ease Suffering of the Needy
CCC / 1933 to 1942
3. Civilian Conservation Corps
•
•
•
Sent young men (teens) to work camps to build bridges, replant
forests and other conservation tasks.
Develop job skills and improve environment.
Removed surplus of workers from cities, provided healthy
conditions for boys, provided money for families.
• Within 4 months, 1300 CCC camps
were in operation.
• 300,000 men in 1933 between ages
18 and 25
• Signed up for 6 months and made
$30.00 a month.
• 1933 and 1941 over 3,000,000 men
served in the CCC .
13. The First New Deal
RECOVERY:
Begin Economic Growth
NIRA / 1933
4. National Industrial Recovery Act
•Called the National Recovery Act…..
•Created NRA to enforce codes of
fair competition, minimum wages,
and to permit collective bargaining of
workers.
•Put people back to work at decent
jobs, wages and working conditions.
•Businesses were not forced to join
this.
•Declared unconstitutional by the
Supreme Court in 1935 because it
violated laissez faire.
alphabet
13. The First New Deal
 Congressional opposition was beginning to
grow
 many of his laws, including the WPA, were
taking a long time to get passed and met
resistance.
4. Schechter v. United States 1935 – aka- “sick
chicken case.”
 The Schechter brothers had a poultry
business in Brooklyn.
 They had been convicted in 1933 of violating
the NIRA’s Live Poultry Code


they had sold diseased chickens
violated the code’s wage-and-hour provisions.
1.
the executive branch had in fact assumed
legislative powers under the act – regulation of
interstate commerce
and that certain codes created by the act
didn’t involve inter-state commerce therefore
the federal government does not have
regulatory power
 The Supreme Court deemed the NIRA was
unconstitutional
2.
 This suggested that the Supreme Court
would make similar decisions in regards to
the New Deal.
13. The First New Deal
Main Idea C. RECOVERY:
Begin Economic Growth
AAA / 1933
1. Agricultural Adjustment Act
•
Protected farmers from price drops and overproduction
•
US Govt. Paid farmers (subsidies) to reduce production
•
•
not to grow crops, produce dairy products such as milk and butter or
raise pigs and lambs.
Prevent another Dust Bowl, teach farmers methods of preventing soil erosion.
1936 AAA declared unconstitutional b/c it required farmers to limit
production
2. Soil Conservation and Domestic Allotment Act passed to pay farmers to
reduce production in order to “conserve soil” – prevent another Dust Bowl –
recovery and reform
3. Resettlement Administration and later Farm Security Administration gave
loans to small farmers to help relocate to better lands - reform
• Rural Electrification Administration attempted to make power more available
to farmers – recovery and reform
•
13. The First
New
Deal
Rural Reality:
•65 percent of property owners and 78
percent of tenants had to travel at least
300 yards to get their household water.
•8 percent of property owners and 3
percent of tenants owned radios
(usually battery operated).
•39 percent of property owners and 23
percent of tenants had phonographs
(including record players that were
operated with a hand crank). 50 percent
of property owners and 25 percent of
tenants read newspapers.
•26 percent of property owners and 16
percent of tenants owned automobiles.
•7 percent of property owners and 4
percent of tenants owned trucks.
13. The First New Deal
RECOVERY:
Begin Economic Growth
TVA / 1933
4. Tennessee Valley Authority
• Federal government built a series of dams in Tennessee Valley
region to prevent flooding and sold electricity at reasonable rates.
•
•
•
•
•
•
•
First public competition with private power industries
created after failure of electric utility companies to develop water
resources for cheap power
TVA revitalized region by improving transport, limiting flooding,
making electricity more available, and lowered power rates
nationwide
• 94 percent of property owners and 98 percent of tenants did not
have electricity.
• 30 percent of property owners and 41 percent of tenants had no
toilet facilities whatsoever
Develop a poor section of the Southeast U.S.
Stimulate the economy and produce cheap electricity.
Control floods, planting new forests.
Bring this section into the 20th century.
13. The First New Deal
13. The First New Deal
Main Idea D. REFORM: Prevent Another
Depression
FDIC / 1933
1. Federal Deposit Insurance Corporation - GlassSteagall Act created federally insured bank deposits
to prevent bank failures. Increased government
regulation
SEC / 1934
2. Securities and Exchange Commission - Regulated
stock market and restricted margin buying, and
frauds
1933
3. Truth in Securities Act -required corporations to
give truthful disclosures
14. The Second New Deal
Main Idea A. Criticisms of the New Deal Critics
on the Right
1. Violated laissez faire
• US government and President too
powerful
2. 1934 formed American Liberty League
crying “attacks” on free enterprise
• Conservatives and businesses leaders
main opponents to New Deal
3. Supreme Court declared NIRA and AAA
unconstitutional
•
FDR proposes Court Packing - would
have increased the number of justices
from 9 to 15, giving FDR a majority of
his own appointees on the court and
change ideological balance.
4. Deficit spending: Govt. spends $$$ to
stimulate the economy and help people
even if it means US Govt. goes into debt.
5. Welfare state - Created a population of
Americans who relied on the US Govt. to
live
14. The Second New Deal
TVA CRITICISM
Main Idea B. Criticisms of the
New Deal Critics on the Left
1. FDR did not go far enough
2. Dr. Francis Townsend
3. Father Charles Coughlin
4. Huey Long
14. The Second New Deal
2. Dr. Francis Townsend
• He wanted the government to help
older citizens.
Townsend Plan
• Suggested a $200 per month pension
for people over 60
• Spending all $200 would also be
required to boost economic
demand
• Open jobs for the younger
unemployed
• idea gained much support older ppl,
forerunner to Soc Sec
• Townsend Clubs created all over
the nation
• Influenced FDR’s creation of Social
Security
14. The Second New Deal
3. Father Charles Coughlin
•
•
•
A Roman Catholic priest.
•
Radio Priest in Detroit Michigan.
•
Criticized FDR in weekly radio
program.
•
10 million listeners.
•
Believed an international
conspiracy of bankers existed and
FDR was influenced by them.
He called for
•
the nationalization of banks and utilities - socialism
•
currency reform (recoining of silver) to restore economic justice
•
felt admin unresponsive so founded National Union for Social
Justice
Fascist; Anti-Semitic overtones.
14. The Second New Deal
Growing dissident
 Critics movements threat
to president
 Roosevelt began to
consider measures to
counter their growing
popularity
4. Huey P. Long
 Most alarming to all in the
administration was the growing
national popularity of Senator Huey
P. Long of LA
 Long gained popularity for attacks on
banks, oil companies, utilities and
b/c of progressive voting record
 like Coughlin felt administration not
acting strongly enough so proposed
Share-Our-Wealth Plan to redistribute
wealth (and created Share-OurWealth Society)
 Use the tax system to confiscate the
surplus riches of the wealthy to the
rest of the population
 Polls show that he could win 10% of
popular vote as a third party
candidate
14. The Second New Deal
Main Idea C. Second New Deal of
1935 marked beginning of open
critique of big business
 Launched in response to the
political pressures (Long) and
continuing economic crisis
1. Holding Company Act of 1935 busting monopolies in utility
industry
2. 1935 tax reforms - established
progressive tax w/ very high
rate for wealthy
 labeled “soak-the-rich”
schemes by affluent
Americans (rival Share-theWealth)
14. The Second New Deal
REFORM: Prevent
Another Depression
SSA / 1935
3. Social Security Act
•
•
Lobbying for social insurance for elderly and unemployed led
to 1935 Social Security Act
A. payroll tax created to create pension system for
workers upon retirement
B. unemployment insurance paid by employers gave laid
off workers temporary govt assistance
C. disability + dependent children aid created
Seen as insurance in which participants contributed and
benefits for all
14. The Second New Deal
REFORM: Prevent Another Depression
Wagner Act / 1935
4. National Labor Relations Act
•
It guaranteed workers the right to organize unions without
interference from employers and to bargain collectively.
•
The National Labor Relations Board (NLRB)
• organized factory elections by secret to determine whether
workers wanted a union.
• The NLRB then certified successful unions.
•
The new law also set up a process whereby dissatisfied
union members could take their complaints to binding
arbitration, in which neutral party would listen to both
sides and decide issues.
•
The NLRB was authorized to investigate the actions of
employers and had the power to issue “cease and desist”
orders against unfair practices.
14. The Second New Deal
Main Idea D. Labor Unions
 Labor Militancy - Became
increasingly more militant
 WHY? The power of the big
business (employers) was
diminishing as government gained
more and more control.
 With the passage of the Wagner
Act, this strengthened union
resolve.
1. Formation of industrial unionism –
 unskilled labor union – majority
of laborers: auto workers, steel
workers
 all workers in industry
organized regardless of role
 American Federation of Labor
still committed to organizing
workers -on skill
 but b/c mass of labor force
unskilled industrial unionism
gained popularity
14. The Second New Deal
2. AFL hesitancy to adopt industrial
unionism led John L Lewis in 1936 to
create independent Congress of
Industrial Organizations (CIO)- grew into
new areas
 Accepted women and African
Americans
 More militant in organizing and
engaged in organizing battles with
the auto and steel industries
 Sit-down strikes – employees in GM
plants in Detroit simply sat down in
the plants refusing to either work or
leave.
14. The Second New Deal
3a. United Auto
Workers – GM SitDown Strike
CIO began with automobile and steel
industries—two of the largest
industries
 In late December 1936, auto labor
union launched a strike against
General Motors.
 Workers staged a sit-down strike
due to the demotion of two
workers and occupied 17 plants
refusing to leave
 Violence broke out in Flint when
police launched a tear gas assault
on one of the smaller plants.
 Governor of Michigan refused to
call the national guard to clear
strikers and feds also refused to
intervene
 Afterward, GM broke down and
recognized the CIO union
 United Auto Workers as its
employees sole bargaining
organization.
 This led to others using the sitdown strike as a method in other
industries.
14. The Second New Deal
3b. Steel Worker’s Organizing
Committee – Memorial Day
Massacre
SWOC was recognized by US Steel
(“Big Steel”) in 1937 to prevent
costly strike
 “Little Steel” was less
accommodating
 On Memorial Day 1937
 striking workers from Republic
Steel gathered to strike in South
Chicago.
 The marchers were gunned down
by police and 10 demonstrators
were killed with 90 others injured
 Known as “Memorial Day
Massacre” – strikers’ attempted
protest failed
 SWOC not recognized for years by
Little Steel
 EFFECT - Period saw union
membership increase by
millions, growing recognition
14. The Second New Deal
4. 1938 Fair Labor
Standards Act
• established national
minimum wage
• 40 hour work week
• child labor limits
5. By end of 1938 New
Deal largely over b/c of
• Congressional
opposition
• growing global crisis
• Roosevelt’s
concentration on war
preparation
14. The Second New Deal
Main Idea D. Legacy of the New Deal
1. US Govt’s. role changes and became directly involved in
helping people – people’s expectation of government changes
• Stimulated the economy and put people back to work
• change drastically the maldistribution of wealth
• Improved morale and self-confidence of the people
2. Economic system based on cooperation rather than
competition
• Believes in government ownership of business and capital
• Government controls production and distribution of goods
- increased govt regulation
• Opposite of laissez faire and capitalism
• Critics would claim it was unconstitutional, socialism,
anti-laissez faire and went too far to the left.
• WWII ended the Great Depression not FDR’s New Deal
AMERICANS IN 1939 WHO WANTED THE NEW DEAL TO
CONTINUE WAS 55%….. 37% REGARDED IT AS A BAD
INFLUENCE AND WANTED A NEW PRESIDENT
14. The Second New Deal
3. Democratic Party
realignment - coalition of
 western and southern
farmers
 urban working class
 unemployed and poor
 progressive liberals
 Black communities
 1936 Referendum - The • West and South given special
Election of 1936 - FDR
attention by New Deal relief
wins with 61% of the
and public works programs
vote
• New Deal didn’t challenge
racial and ethnic prejudices
 Increased majority in
such as Jim Crow
both houses
• New Deal did allow new
 Election largest
groups previously without
landslide to date
powers (labor, farmers)
14. The Second New Deal
4. The Idea of the “Broker State”
• New Deal backers originally sought to remake
American capitalism and create new controls to
make “new economic order”.
• Instead, transformation of government as “broker
state” in which government was a mediator in
competition between interest groups rather than
force to create universal harmony
• Before 1930s main interest group were
corporations, but by end of 1930s
• business interests competing with labor
• agricultural interest groups
• Consumers groups
• Created welfare state thru relief and Social
Security that broke w/ tradition of providing little
public help to citizens deeply in need
14. The Second New Deal
 ROOSEVELT’s RECESSION
 By 1937 the national income
began rising and showed great
promise to stabilize
 FDR seized the opportunity to
try and balance the budget by
cutting government spending
 He feared that the real threat
now was inflation and no
longer depression
 FDR cut WPA in half
 A few weeks later the fragile
economy collapsed
 Confirmed that government
spending and other
government initiatives were
directly affecting the economy
 FDR asked congress for $5B
and the economy picked back
up