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The New Deal 1932-41. Ch 16. “The only thing we have to fear…”. “…is fear itself.” – FDR’s First Inaugural Address. Promised “bold experimentation”. Did not know what to do, so would try anything to ease Depression. USA was very ready for a change from Hoover’s policies.

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The New Deal 1932-41

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The New Deal 1932-41

Ch 16


“The only thing we have to fear…”

  • “…is fear itself.” – FDR’s First Inaugural Address.

  • Promised “bold experimentation”.

    • Did not know what to do, so would try anything to ease Depression.

  • USA was very ready for a change from Hoover’s policies.

    • Happily went along with most of FDR’s plans.


The First Hundred Days

  • Refers to first 100 days of new president’s term.

  • First step-restore confidence in banks.

    • Declared 4-day “bank holiday”.

    • Passed Emergency Banking Act-Gov’t would inspect financial health of all banks.

    • Passed Glass-Steagall Banking Act-Established Federal Deposit Insurance Corporation (FDIC)-insured bank deposits.

  • These acts caused people to begin to trust banks and deposit again.

    • Meant bank loans available again.


    • Second step-fix stock market.

      • Federal Securities Act-required companies to provide financial info if they sold stocks.

      • Creation of Securities and Exchange Commission (SEC)-regulated stock market, set up rules for trading stock.

    • Third step-stimulate economy.

      • Took USA off gold standard-devalues currency in hopes of raising prices, stimulating exports.

      • Passed National Industrial Recovery Act-created National Recovery Administration (NRA).

        • Controlled production, prices, set wages, regulated unions.

        • Helped at first, but higher wages drove prices up, hurt economy.


    • Fourth step-provide relief & create jobs.

      • Created Federal Emergency Relief Administration (FERA)-provided funds to local relief agencies.

      • Civil Works Administration (CWA)-built & improved roads, parks, airports, etc; employed 4 million unemployed workers.

      • Civilian Conservation Corps (CCC)-Built, maintained beaches, parks, forests; employed 2.5 million young men.

        • Paid $30/month, got room, food, job training.

      • Public Works Administration (PWA)-Built dams & bridges across USA.

      • Tennessee Valley Authority (TVA)-built hydroelectric dams in Tennessee River valley.


    Civil Works Administration


    Civilian Conservation Corps


    Public Works Administration


    Tennessee Valley Authority


    • Fifth step-help homeowners & farmers.

      • Home Owners’ Loan Corporation-Restructured loans for lower payments.

      • Federal Housing Administration (FHA)-Improved housing standards, insured mortgages to stabilize mortgage market.

      • Agricultural Adjustment Administration (AAA)- Paid farmers to plow under crops to make prices rise.

    • Most of these programs were passed in the first hundred days.

      • Big start for the New Deal.


    • Even with all of the new programs, New Deal had very little success; economy was still in poor shape, unemployment high.

    • Supreme Court declared AAA and other programs unconstitutional.

    • 1935-FDR began Second New Deal, aka Second Hundred Days.

      • More social welfare, more control over business, higher taxes on rich.


    Second New Deal

    • Works Progress Administration (WPA)-provided 8 million jobs.

      • Built/improved playgrounds, schools, hospitals, supported work of artists/writers.

    • Resettlement Administration & Farm Security Administration.

      • Loaned $$ to small farmers, set up camps for migrant workers.

    • Rural Electrification Administration.

      • Loaned $$ to electric companies to extend power grid to rural areas.

        • Increased demand for electric appliances stimulated economy.


    • Passed Wagner Act-legalized collective bargaining for unions, legalized closed shops.

      • Only union members could work in closed shops.

    • Passed Fair Labor Standards Act.

      • Outlawed child labor, established minimum wage.

    • Passed Social Security Act.

      • Provided monthly payments to those who could not support themselves.

      • Old-age pensions, survivor’s benefits-You paid in with each paycheck, got money back at age 65.

      • Unemployment insurance-Business owners financed it with a tax, if you lost your job, you got a check.

      • Aid for dependent children, blind, disabled-gave $$ to states to help these people.


    Criticisms of New Deal

    • Less helpful to women.

      • Allowed lower wages, men had first preference for jobs.

      • Offered no help to domestic services (maids, etc).

    • People of color helped less.

      • Only offered non-skilled labor, less pay than whites, still suffered discrimination.


    • Political Criticisms:

      • Republicans-New Deal made gov’t too big, intrusive, & controlling.

      • Wealthy-Taxes too high, shouldn’t have to pay into Social Security.

      • Some felt Social Security numbers, limiting freedoms led to Communism.

      • Progressives/Socialists-New Deal did not do enough.

        • Wanted gov’t takeover of factories/businesses.

        • Wanted pure socialism in USA.


    • From today, New Deal is receiving more & more criticism.

    • Many oppose deficit spending-spending more money than gov’t takes in.

      • Led to debts that still aren’t paid off.

    • Opposed gov’t intrusion into free market.

      • By adjusting supply, created false demands, messed up prices.

    • Gov’t spending uses tax money, which citizens could have spent to improve economy.

    • Gov’t grew too large, took power from state gov’ts and citizens.


    Court-Packing Plan

    • During early New Deal, Supreme Court struck down many of FDR’s programs.

    • FDR introduced court-reform bill allowing him to appoint up to six new justices.

      • Wanted judges who liked New Deal programs.

    • FDR slammed from all sides for court-packing plan.

      • Quickly backed off, but many legislators & citizens who had supported FDR now began to oppose him.

    • Court-packing plan destroyed much of FDR’s credibility with USA, was watched much closer.


    Last years of the New Deal

    • August 1937-production & employment levels dropped.

      • US entered recession-period of slow business activity.

    • Recession hurt, as FDR had cut back gov’t spending due to growing national debt.

      • Total amount of $$ gov’t borrows & has to pay back.

      • Happens when spending exceeds revenue (income).

    • Recession forced FDR to increase spending.

      • Spending lasted until early 1942.


    Cultural effects of New Deal

    • WPA, other programs funded arts during Depression.

      • Had a lasting effect on US culture.

    • Literature:

      • Let Us Now Praise Famous Men-2 men live with Alabama sharecroppers, pictures & stories of sharecroppers’ lives.

      • Grapes of Wrath-Oklahoma family in Dust Bowl, migrate to California.


    • Radio/Movies.

      • Main sources of entertainment.

      • Radio-George Burns, Gracie Allen, Jack Benny, first soap operas.

      • Movies-1931-1st double feature-25 cents; 1933-first drive-in.

      • New Deal Documentaries shown.

      • Movies showed good beating evil-Mr. Smith Goes to Washington.

      • Comedies-Marx Brothers-Monkey Business, Duck Soup.

      • Most popular were movies that allowed viewers to escape Depression-The Wizard of Oz, Snow White and the Seven Dwarfs.


    • The Arts.

      • Federal Writers’ Project-took oral histories, wrote state guidebooks, etc.

      • Federal Music Project-recorded folk music, created community symphonies, gave free lessons.

      • Federal Art Project-Painted murals, created sculptures, public art, about 119,000 pieces total.

      • Federal Theatre Project-Used plays to create awareness of social problems.

        • Accused of Communist propaganda, defunded in 1939.


    New Deal Achievements

    • Public Works-Dams, bridges, roads, tunnels.

    • Federal Agencies-FDIC, TVA, SEC still active.

    • Social Security-Still in effect for disabled, handicapped, retirees.

    • Hope-New Deal programs gave many a feeling that times would get better.


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