The New Deal

The New Deal (s)
Chapter 18
Major Themes
• Expansion of the Federal Government's power
• The New Deal: Relief, Reform, Recovery
• Changes in the relationship/roles between the
Federal Government and the People.
Franklin Delano Roosevelt
• Grew up very privileged
– “Traitor to His Class” H.W.
• Graduated from
Harvard/Columbia Law
• Contracted Polio at 39
– Helped found the March of
• Governor of New York 19291932
Election of 1932
 Americans view FDR as
energetic, optimist, and a
 Franklin Delano Roosevelt
(FDR) elected president
on his promises of a more
proactive federal
 FDR Win’s 88.8% of
electoral vote 57.42% of
popular vote (Hoover
11.1% electoral, 39.64%
The first 100 Days
“The country needs bold persistence and
experimentation. Above all else…try something”
• The New Deal: FDR’s program for combating the
– Relief, Recovery, Reform
• immediately starts sending bill after bill to
– Congress passes 15 major pieces of legislation
 Emergency Banking Relief Act – closed all banks
for investigation. Allowed honest ones to reopen
 Fireside Chats – radio broadcasts where FDR talks
directly Americans; explains his initiatives
 “The only thing we have to fear, is fear itself.”
 Security and Exchange Commission (SEC) –
regulated stock exchange and prevented fraud
 Glass-Steagall Act – separated commercial
banking from investment banking
 Federal Deposit Insurance Corporation (FDIC)
– provided government insurance for bank
deposits up to a certain amount
• Economic conditions prompted government intervention to create
jobs by instituting new programs
• Tenessee Valley Authority (TVA)
– brings electrical power to poverty-stricken rural areas of Tennessee,
Mississippi, Alabama and other states; also provided jobs to the area.
• Civilian Conservation Corps(CCC)
– Offered young men jobs in national forestry services
Public Works Administration (PWA)
– Federal relief agency, which initiated construction projects to build
highways, dams, sewer systems, and other gov. facilities.
• Civil Works Administration (CWA) & Works Progress Administration
– Hired workers directly and put them on gov payroll
 Agricultural Adjustment
Administration (AAA):
paid farmers not to grow
food to raise crop prices
 Killed livestock to raise
meat prices
 Large commercial farmers
mostly benefitted
 Small farmers, many poor
black and white
sharecroppers hurt by
• Industry
 National Industrial
Recovery Act (NIRA)
 suspended anti-trust laws
 businesses, labor, and
government set rules
 National Recovery
Administration (NRA)
 ran the program set up by
the NIRA
 Businesses that agreed to
rules were given the Blue
Eagle to show participation
Opposition from Right
• Unemployment still
• FDR gaining
especially b/c of his
deficit spending
– Keynesian
Opposition from the left
• Huey Long
 (D) LA Senator Populist / Boss of political machine
 Most serious threat; believed New Deal hadn’t gone
far enough
 Attacked the rich
 Established 27,000 “Share Our Wealth” clubs
 Harms” American Dream”
 Assassinated 1935
Father Coughlin
 Populist; Popular radio show
 Called for heavy taxes on wealthy and nationalization
of banking system
Dr. Francis Townsend
• The Townsend Plan
 Proposed federal government pay pension of $200 to
every citizen over age 60
 Free up jobs
 Elderly rallied to Townsends side
 Both men were threatening as a possible 3rd
party, which would assure a Republican victory
The Second New Deal
• Second New Deal launched to speed up recovery
• Works Progress Administration (WPA)
 Employed workers in public works projects (roads,
dams, airports, etc.)
 Artists, Actors & musicians employed
 Social Security Act
 Provided financial security for older Americans,
unemployed workers, modest welfare payments
 Workers earned right to receive benefits through
payroll tax
• 1935 Congress passes the Wagner Act
– Guarantees workers the right to bargain and organize
– Binding arbitration: dissatisfied union members could
take their complaints to a neutral 3rd party
• The Committee for Industrial Organization (CIO) –
organized labor where it did not yet exist
especially in auto and steel industries
• Sit-Down Strikes – workers stop working but
refuse to leave the factory
Constitutional Issues
• Butler v US
– Ruled unconstitutional because it “…is a statutory plan
to regulate and control agriculture production, a
matter beyond the powers delegated to the federal
• Schechter v US
– “sick chicken case”
– Schechter brothers violated NIRA’s Live Poultry Code
– Court ruled the Constitution did not allow Congress to
delegate its powers to the executive branch; ruled
NIRA codes unconstitutional
Constitutional Issues
• Court-Packing!
– FDR upset that courts keep shooting down
New Deal legislation
– FDR sends Congress a bill that would
increase the number of justices, and allow
the president to appoint an additional
Justice, up to a maximum of six, for every
member of the court over the age of 70
years and 6 months
– Hilarity ensued
• Roosevelt Recession
 Output levels rose to pre-Depression highs,
everyone thought the Depression was coming to
an end
 1937 Roosevelt makes slight cuts to some New
Deal Programs
 Unemployment surged
 Proof that New Deal Legislation was beneficial?
 Late 1930’s saw more resistance to FDR from
Republicans and Southern Democrats
 New Deals had limited success in dealing with
 Federal government's powers expanded
 Broker State – US government working out
conflicts between different groups
 Safety Net – safeguards and programs that
protected Americans from economic disaster

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