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Chapter Menu
Chapter Introduction
Section 1: The First New Deal
Section 2: The Second New Deal
Section 3: The New Deal Coalition
Visual Summary
Chapter Intro
Can Government Fix the Economy?
During the 1930s, New Deal programs increased government regulation of banking, industry, and farming; gave greater rights to workers; and provided government aid to the unemployed and senior citizens.
• What kind of problems do you think government can solve?
• What difficulties can result when the government tries to regulate the economy?
Chapter Timeline
Chapter Intro 1
The First New Deal
In what areas did the New Deal attempt to make major economic improvements?
Chapter Intro 2
The Second New Deal
How did the Second New Deal assist unions, the elderly, and the unemployed?
Section 1
Roosevelt’s Rise to Power
Franklin D. Roosevelt was governor of New York when he was elected president in 1932, promising a New Deal for the American people.
Section 1
• After losing the 1920 election as the Democratic vice presidential candidate, Franklin Delano Roosevelt temporarily withdrew from politics.
– The next year he caught polio, but refused to give in.
– In 1928, Roosevelt ran for governor of New York.
– He won the election and oversaw the creation of the first state relief agency to aid the unemployed.
Roosevelt’s Rise to Power (cont.)
Section 1
• Roosevelt’s popularity in New York paved the way for his presidential nomination in 1932.
– His policies for ending the Depression became known as the New Deal.
– On election day, Roosevelt beat Herbert Hoover in a landslide.
Roosevelt’s Rise to Power (cont.)
Section 1
The Hundred Days
Upon taking office, FDR launched the New Deal by sending 15 major pieces of legislation to Congress.
Section 1
• Although Roosevelt won the presidency in November 1932, the country’s unemployed and homeless had to endure another winter as they waited for his inauguration.
– Some of the bank runs occurred because people feared that Roosevelt would abandon the gold standard and reduce the value of the dollar in order to fight the Depression.
– In 38 states, governors declared bank holidays to save the remaining banks.
The Hundred Days (cont.)
Section 1
• By the day of Roosevelt’s inauguration, most of the nation’s banks were closed.
– One in four workers was unemployed.
The Hundred Days (cont.)
• Between March 9 and June 16, 1933—which came to be called the Hundred Days—Congress passed 15 major acts to resolve the economic crisis.
– These programs made up what would later be called the First New Deal.
Section 1
• To generate new ideas and programs, Roosevelt deliberately chose advisers who disagreed with each other.
– One group during the early years of his administration supported the “New Nationalism” of Theodore Roosevelt.
– A second group wanted government planners to run key parts of the economy.
– A third group supported the “New Freedom” of Woodrow Wilson.
The Hundred Days (cont.)
Section 1
Banks and Debt Relief
President Roosevelt took steps to strengthen banks and the stock market and to help farmers and homeowners keep their property.
Section 1
• Roosevelt knew the first thing he had to do was restore confidence in the banking system.
– The House of Representatives unanimously passed the Emergency Banking Relief Act after only 38 minutes of debate.
– On March 12, sixty million people listened to the first of many of Roosevelt’s “fireside chats.”
Banks and Debt Relief (cont.)
Section 1
– He assured people that their money was safe in banks, and the next day, deposits far outweighed withdrawals.
• Roosevelt listened to his advisers and supported the Securities Act of 1933 and the Glass-Steagall Banking Act.
Banks and Debt Relief (cont.)
– Congress also created the Securities and Exchange Commission (SEC) to regulate the stock market and prevent fraud.
The First Hundred Days
Section 1
– The Glass-Steagall Act created the Federal Deposit Insurance Corporation (FDIC) to provide government insurance for bank deposits up to a certain amount.
• To help homeowners make their mortgage payments, Roosevelt asked Congress to establish the Home Owners’ Loan Corporation (HOLC).
Banks and Debt Relief (cont.)
The First Hundred Days
Section 1
– Congress also authorized the Farm Credit Administration (FCA) to help farmers refinance their mortgages.
Banks and Debt Relief (cont.)
The First Hundred Days
Section 1
Farms and Industry
New Deal legislation tried to raise crop prices and stabilize industry.
Section 1
• To further help the nation’s farmers, Secretary of Agriculture Henry Wallace drafted the Agricultural Adjustment Act.
– Administered by the Agricultural Adjustment Administration (AAA), the government paid farmers not to raise certain livestock, not to grow certain crops, and not to produce dairy products.
– The plan worked, but did not benefit everyone, especially tenant farmers.
Farms and Industry (cont.)
The TVA, 1940
Section 1
• The government turned its attention to manufacturing in June 1933, when Roosevelt and Congress enacted the National Industrial Recovery Act (NIRA).
– Under the leadership of Hugh Johnson, the National Recovery Administration (NRA) ran the entire program.
– By the time the Supreme Court declared the NRA unconstitutional in 1935, it had already lost much of its political support.
Farms and Industry (cont.)
The TVA, 1940
Section 1
Relief Programs
Programs such as the CCC, the PWA, and the WPA provided jobs for some unemployed workers.
Section 1
• The most highly praised New Deal work relief program was the Civilian Conservation Corps (CCC).
– The CCC offered unemployed young men 18 to 25 years old the opportunity to work under the direction of the forestry service planting trees, fighting forest fires, and building reservoirs.
Relief Programs (cont.)
Section 1
• Congress also established the Federal Emergency Relief Administration (FERA), led by Harry Hopkins.
– In June 1933 Congress authorized another relief agency, the Public Works Administration (PWA) which put civilians to work on government-funded construction projects.
Relief Programs (cont.)
Section 1
• Roosevelt authorized Hopkins to set up the Civil Works Administration (CWA), since FERA and the PWA weren’t reducing unemployment significantly.
– The agency did provide jobs through the winter, but Roosevelt insisted that it be shut down the following spring due to the large amount of money the agency spent.
Relief Programs (cont.)
Section 1
• Perhaps the most important result of the first New Deal was a noticeable change in the spirit of the American people.
Relief Programs (cont.)
– Roosevelt’s actions had inspired hope and restored Americans’ faith in their nation.
A. A
B. B
C. C
D. D
E. E
Section 1
Which of the following did the Civil Works Administration build or improve?
A. Airports
B. Roads
C. Playgrounds
D. Schools
E. All of the above 0% 0% 0%0%0%
Section 2
Launching the Second New Deal
By 1935, the New Deal faced political and legal challenges, as well as growing concern that it was not ending the Depression.
Section 2
• Although New Deal programs had created more than 2 million new jobs, more than 10 million workers remained unemployed, and the nation’s total income was about half of what it had been in 1929.
• Hostility toward Roosevelt came from both the political right and the left.
• To pay for his programs, Roosevelt had started deficit spending, and many business leaders became greatly alarmed at the government’s growing deficit.
Launching the Second New Deal (cont.)
Section 2
• In August 1934 business leaders and anti-New Deal politicians from both parties joined together to create the American Liberty League.
• Three people who challenged Roosevelt were:
Launching the Second New Deal (cont.)
– Huey Long
– Father Coughlin
– Francis Townsend
Section 2
• In 1935 Roosevelt launched a series of programs now known as the Second New Deal.
– Among these new programs was the Works Progress Administration (WPA), headed by Harry Hopkins.
– The WPA’s most controversial program was Federal Number One, a program for artists, musicians, theater people, and writers.
Launching the Second New Deal (cont.)
Section 2
• In May 1935, in Schechter Poultry Company v. United States, the Supreme Court unanimously struck down the authority of the NRA.
– Roosevelt feared that the Court would strike down the rest of the New Deal and told Congress that they could not go home until they passed his new bills.
Launching the Second New Deal (cont.)
Section 2
Reforms for Workers and the Elderly
Roosevelt asked Congress to pass the Wagner Act and Social Security to build support among workers and older Americans.
Section 2
• In July 1935 Congress passed the National Labor Relations Act (also called the Wagner Act), which guaranteed workers the right to organize unions and to bargain collectively.
– Congress also set up the National Labor Relations Board (NLRB).
– The Wagner Act set up a process called binding arbitration.
Reforms for Workers and the Elderly (cont.)
Section 2
• The Committee for Industrial Organization (CIO) set out to organize unions that included all workers, skilled and unskilled, in a particular industry.
– Union organizers used new tactics, such as the sit-down strike.
– By using a sit-down strike, the United Auto Workers (UAW) became one of the most powerful unions in the U.S.
Reforms for Workers and the Elderly (cont.)
Union Membership, 1933–1940
Section 2
• In 1938 the CIO changed its name to the Congress of Industrial Organizations and became a federation of industrial unions.
• After passing the Wagner Act, Congress began work on one of America’s most important pieces of legislation—the Social Security Act.
Reforms for Workers and the Elderly (cont.)
– Although Social Security helped many people, it initially left out many of the neediest—farm and domestic workers.
Section 2
– Social Security did establish the principle that the federal government should be responsible for those who, through no fault of their own, were unable to work.
Reforms for Workers and the Elderly (cont.)
Section 3
Roosevelt’s Second Term
Roosevelt was easily reelected, but the New Deal lost momentum during his second term due to his court-packing plan and a new recession.
Section 3
• Since the Civil War, African Americans had been reliable Republican voters.
– However, in the 1930s, they became just one part of a new Democratic coalition that included farmers, industrial workers, African Americans, new immigrants, ethnic minorities, women, progressives, and intellectuals.
Roosevelt’s Second Term (cont.)
Section 3
• African Americans and women made some modest gains during the New Deal.
– The president appointed several African Americans to positions in his administration, where they informally became known as the Black Cabinet.
– FDR appointed the first woman to a cabinet post, Secretary of Labor Frances Perkins, and appointed many other women to lower-level posts.
Roosevelt’s Second Term (cont.)
Section 3
• In the election of 1936 the Republicans nominated Alfred Landon.
– Roosevelt swept to victory in one of the largest landslides in American history
Roosevelt’s Second Term (cont.)
• Although many people supported the New Deal, the Supreme Court saw things differently.
– In March 1937 Roosevelt sent Congress a bill to increase the number of justices.
Section 3
– The court-packing plan, as the press called it, was FDR’s first serious political mistake.
– The Senate quietly killed the bill without bringing it to a vote.
– Roosevelt still achieved his goal of changing the Court’s view of the New Deal.
Roosevelt’s Second Term (cont.)
Section 3
• In 1937 Roosevelt’s reputation again suffered when unemployment suddenly surged.
– The recession of 1937 led to a debate inside Roosevelt’s administration.
– Treasury Secretary Henry Morgenthau favored balancing the budget and cutting spending.
Roosevelt’s Second Term (cont.)
Section 3
• Harry Hopkins, head of the WPA, and Harold Ickes, head of the PWA, pushed for more government spending using a new theory called Keynesianism to support their arguments.
– Keynesianism was based on the theories of an influential British economist named John Maynard Keynes.
Roosevelt’s Second Term (cont.)
Section 3
• According to Keynesian economics, FDR had done the wrong thing when he cut back programs in 1937.
– Finally, in the spring of 1938, with no recovery in sight, Roosevelt asked Congress for money for the PWA, the WPA, and other programs.
Roosevelt’s Second Term (cont.)
A. A
B. B
C. C
D. D
Section 3
A B C D
0% 0%0%0%
First Lady Eleanor Roosevelt demonstrated strong sympathies toward which group?
A. Native Americans
B. Unskilled workers
C. African Americans
D. Immigrants
Section 3
The New Deal Ends
The New Deal expanded federal power over the economy and established a social safety net.
Section 3
• One of the president’s goals for his second term was to provide better housing for the nation’s poor.
– He responded with the National Housing Act, establishing the United States Housing Authority.
The New Deal Ends (cont.)
• He also sought to help the nation’s tenant farmers.
What New Deal Programs Still Exist Today?
Section 3
– Congress created the Farm Security Administration to give loans to tenants so they could purchase farms.
• The Fair Labor Standards Act was the last major piece of New Deal legislation.
The New Deal Ends (cont.)
– By 1939, the New Deal era had come to an end.
What New Deal Programs Still Exist Today?
Section 3
• The New Deal had only limited success in ending the Depression.
– As a whole, the New Deal tended to balance competing economic interests.
The New Deal Ends (cont.)
• In taking on a mediating role, the New Deal established what some have called the broker state.
– This role has continued under the administrations of both parties ever since.
What New Deal Programs Still Exist Today?
Section 3
• FDR’s programs also succeeded in creating a safety net for Americans.
– By the end of the 1930s, many Americans felt that the government had a duty to maintain this safety net, even though doing so required a larger, more expensive federal government.
The New Deal Ends (cont.)
What New Deal Programs Still Exist Today?
VS 1
Banking and Finances
• Emergency Banking Relief Act regulated banks.
• Federal Deposit Insurance Corporation insured bank deposits.
• Farm Credit Administration refinanced farm mortgages.
• Home Owners’ Loan Corporation financed homeowners’ mortgages.
VS 2
Agriculture and Industry
• Agricultural Adjustment Administration paid farmers to limit surplus production.
• National Industrial Recovery Act limited industrial production and set prices.
• National Labor Relations Act gave workers the right to organize unions and bargain collectively.
• Tennessee Valley Authority financed rural electrification and helped develop the economy of a seven-state region.
VS 3
Work and Relief
• Civilian Conservation Corps created forestry jobs for young men.
• Federal Emergency Relief Administration funded city and state relief programs.
• Public Works Administration created work programs to build public projects, such as roads, bridges, and schools.
VS 4
Social “Safety Net”
• Social Security Act provided
– income for senior citizens, handicapped, and unemployed
– monthly retirement benefit for people over 65
Figure 1A
Figure 1B
Figure 2
Figure 3
Figure 4
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Vocab1
polio
abbreviated form of poliomyelitis, an acute infectious disease affecting the skeletal muscles, often resulting in permanent disability and deformity
Vocab2
gold standard
a monetary standard in which one ounce of gold equals a set number of dollars
Vocab3
bank holiday
closing of banks during the Great Depression to avoid bank runs
Vocab4
fireside chats
radio broadcasts made by FDR to the American people to explain his initiatives
Vocab5
apparent
appearing to be fact as far as can be understood
Vocab6
ideology
a system of thought that is held by an individual, group, or culture
Vocab7
fundamental
being of central importance
Vocab8
deficit spending
government practice of spending borrowed money rather than raising taxes, usually in an attempt to boost the economy
Vocab9
binding arbitration
process whereby a neutral party hears arguments from two opposing sides and makes a decision that both must accept
Vocab10
sit-down strike
method of boycotting work by sitting down at work and refusing to leave the establishment
Vocab11
benefit
to be useful or profitable
Vocab12
finance
to provide money for a project
Vocab13
thereby
by that means
Vocab14
court-packing
the act of changing the political balance of power in a nation’s judiciary system whereby a national leader, such as the American president, appoints judges who will rule in favor of his or her policies
Vocab15
broker state
role of the government to work out conflicts among competing interest groups
Vocab16
safety net
something that provides security against misfortune; specifically, government relief programs intended to protect against economic disaster
Vocab17
recovery
an economic upturn, as after a depression
Vocab18
mediate
an attempt to resolve conflict between hostile people or groups
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