THE NEW DEAL 1933 1940 IB History of

THE NEW DEAL 1933 -1940 IB History of the Americas

GUIDING QUESTIONS How successful was the Roosevelt Administration’s “New Deal” in solving the problems of the Great Depression? (Consider: relief, Recovery, Reform; e. g. Agricultural Adjustment Act; Securities and Exchange Commission; Wagner National Labor Relations Act; Social Security Act) How did it change the role of the federal government? How did it fashion a more stable economy and a more equitable society?

FDR: A “NEW DEAL” “A New Deal for the American People” "The only thing we have to fear is fear itself. “ confidence, optimism, public relations “Fireside chats” Eleanor Roosevelt “Brain Trusts” Goals: “Three R’s” relief, recovery, reform Roosevelt Delivering a Fireside Chat, 1935

“Brain Trusts” FDR wanted to gather around him all the knowledgeable people he could to help him solve the problems associated with the Depression. So, the group of academics, or “Brain Trust” developed FDR's economic policy and developed programs that became the backbone of the New

Roosevelt’s Management Style New Congress willing to pass almost anything Roosevelt asked for Much legislation was written by the “Brain Trust” Led by intuition; didn’t know exactly where he was going He was a quarterback – next play depends on outcome of previous play Public was willing to support any action (even wrong) over doing nothing

FDR Holding a Press Conference, 1939

Outline of the New Deal Hundred Days focused on short-term problems; long-term reforms came later Passed many essential reforms that industrialized Europe had for years Unemployment insurance, old-age insurance, minimum-wage regulations, conservation and development of natural resources, restrictions on child labor

Eleanor Roosevelt visits West Virginia Coal Mine, 1933 Eleanor Roosevelt visiting a West Virginia

First Hundred Days Roosevelt acts decisively March 6 – 10 – nationwide banking holiday declared Overwhelmingly Democratic Congress called into special session March 9 – June 16, 1933 – Hundred Days Congress cranked out laws to deal with Depression

Alphabet Agencies In total, at least 100 offices were created during Roosevelt's terms of office as part of the New Deal, many known by their acronyms.

FIRST HUNDRED DAYS “Bank holiday” Emergency Banking Relief Act (Mar. 9) Beer-Wine Revenue Act (Mar. 22) Twenty-First Amendment (Nov. 1933)(repealed 18 th Amendment of Prohibition) Civilian Conservation Corps (CCC) (Mar. 31) Public Works Administration Tennessee Valley Authority (TVA) (May 18) Civilian Conservation Corps workers plant seedlings to reforest a section of forest

FIRST HUNDRED DAYS Agricultural Adjustment Act (AAA) (May 12) National Recovery Administration (NRA) The National Industrial Recovery Act (June 16) Schechter v. U. S. (1935) Federal Emergency Relief Act (FERA) Glass-Steagall Act (Banking Act of 1933) (June 16) Federal Deposit Insurance Corporation (FDIC)

Emergency Banking Relief Act Gave president power to regulate banking transactions and foreign exchange and reopen solvent banks

Beer-Wine Revenue Act March 1933 – Beer Act Light wine and beer with alcoholic content of 3. 2% legalized $5 tax on every barrel Would provide employment and raise money for government “drys” labeled Roosevelt a “ 3. 2 percent American” Late 1933 – Prohibition repealed by the 21 st Amendment

The Problem of Unemployment 1 of every 4 workers unemployed in 1933 FDR used federal money to assist unemployed and “prime the pump” (start the flow) of industrial recovery

Civilian Conservation Corps (CCC) Employment for 3 million young men Reforestation firefighting, Flood control swamp drainage Recruits sent home $25 of their $30 monthly pay to parents

Roosevelt visits a Civilian Conservation Corps camp 1933

Public Works Administration (PWA) Long-range recovery through industrial recovery and unemployment relief $4 billion spent on 34, 000 projects Public buildings, highways, parks

Grand Coulee Dam PWA built Grand Coulee Dam on Columbia River (Washington) Made possible irrigation of millions of acres of farmland After WWII, dam transformed entire region Provided abundant water and power

Tennessee Valley Authority (TVA) Background New Dealers accused utilities of overcharging consumers TVA was a federally owned corporation in the United States created to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley 2. 5 million very poor people lived in area

TVA Short-term – put people to work Long-term – reformed the power monopoly Most revolutionary (anti-capitalist) reform of the New Deal Critics charged TVA was “creeping socialism”

Benefits of the TVA – Full employment – Cheap electricity – Low-cost housing – Cheap nitrates (fertilizers) – Restoration of eroded soil – Reforestation – Improved navigation and flood control

TVA

The Problem with Farming Farmers had historically suffered from low prices and overproduction, made worse by WWI boom years Conditions desperate during Depression Mortgages foreclosed, corn burned for fuel

Agricultural Adjustment Act (AAA) Farmers were to receive “parity [equal] prices” with those received during 1909 – 1914 AAA would create “artificial scarcity” by paying farmers to reduce crop acreage Money to pay farmers raised by taxing processors of farm products (like flour mills) This cost would be passed on to consumers, another way of raising farm prices

Waste in 1933 because of AAA Passed after cotton crop had already been planted; farmers forced to plow much of the crop Several million pigs slaughtered; much of the meat went to poor families, but some used as fertilizer Led leftists (like John Steinbeck) to criticize the US economic system because of this waste, when so many people were hungry Grapes of Wrath

Other Problems with AAA All groups (farmers, food processors, consumers, taxpayers) unhappy because of sacrifice required Paying farmers not to farm increased unemployment Field hands let go; sharecroppers removed from land

National Recovery Administration (NRA) Passed under the National Industrial Recovery Act (NIRA) Individual industries (over 200) were to work out codes of “fair competition” Hours of workers reduced to provide more jobs to more people Minimum levels of wages established Labor given additional rights Organize and bargain collectively through representatives that they chose “yellow-dog” contract forbidden: as a condition of being hired, agreeing to not be in a union Restrictions placed on child labor

Patriotism and the NRA Patriotism and public pressure to achieve compliance with NRA Mass meetings and marches Blue eagle symbol with slogan “We Do Our Part” that merchants displayed in window

Glass-Steagall Act June 1933 Created the Federal Deposit Insurance Corporation (FDIC) Insured individual deposits up to $5, 000 (now $100, 000) Ended bank failures in US

Failures before and after the Glass-Steagall Act

Federal Emergency Relief Act (FERA) Headed by New York social worker Harry L. Hopkins, friend of FDR $3 billion granted to states for dole (welfare) payments or wages on work projects

“THE NEW DEAL IN TRANSITION”: A “SECOND” NEW DEAL “Second New Deal” (1935 onward) First New Deal focused on 1 of the 3 R’s, Recovery. Second New Deal focused on the other 2 R’s, Relief and Reform WPA Artist Sketching WPA Construction Workers

Works Progress Administration (WPA) Passed party to stop criticism from demagogues $11 billion spent on public buildings, bridges, roads, and public art 9 million people given jobs, not handouts

National Labor Relations Act (Wagner Act) Replaced NRA (declared unconstitutional in 1935) Created National Labor Relations Board Guaranteed workers’ right to join a union and a union’s right to bargain collectively

Social Security Act Federal-state unemployment insurance Specific categories of retirees received monthly payments ($10 to $85) $138 to $1173 in 2005 dollars Payments later raised Financed by payroll taxes on employers and employees Help for blind, handicapped, delinquent children and other dependents

Social Security reflected big change in philosophy of government Rural family farms had provided chores for all ages Families took care of their own dependents Government recognized responsibility for welfare of its citizens Modeled on social programs from industrialized countries in Europe In contrast to Europe, people had to be employed to get benefits in US