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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.

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The New Deal 1932-41

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the only thing we have to fear
“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
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.

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
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
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
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
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
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.


    • 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
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.