APUSH Unit 7: The New Deal

Outline
General Timelines
 

Timeline #1: The 1st New Deal (1933-1934)

Timeline #2: The 2nd New Deal (1935-1938)

General Map
 

Map # 1: The US

Course Content

The New Deal:

The 3 R's of the New Deal

Relief

Recovery

Reform

 
 

The 1st New Deal (1933-34)

Overview of the 1st New Deal

  • Mostly a short-term top-down approach

    • Wanted to fix everything at the top: banking, industry, corporations, gov agencies, etc.​

    • Its legislative actions & reform agencies allowed it to focus more on social welfare for the unemployed later on (in 2nd New Deal, 1935-36)

  • The beginning of the program was known as "The First Hundred Days"

    • From Mar - Jun 1933, Congress passed legislation to combat banking crisis, industrial downfall, etc.

    • Franklin D Roosevelt (FDR) created many agencies to carry out this reform​​

  • 5 main aspects: Banking & monetary reform, agricultural reform, industrial recovery, public works, federal relief

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Banking Reform

  • 1st step to solving Great Depression was fixing the banking crisis

    • FDR closed all banks for 4 days in March ("Banking Holiday") to give Congress time to pass banking reform legislation​

  • Emergency Banking Act (1933): Meant to restore confidence in national banking system & make the banking system more stable​

    • Treasury Department would inspect each bank for financial stability before allowing it to reopen

      • Would provide assistance & money to banks in financial trouble​

    • Within 3 days, about 75% of Federal Reserve banks reopened

    • FDR encouraged the American people to deposit their money into these banks​

  • Economy Act (1933): Cut salaries of federal employees & reduced benefits to veterans to lower the federal budget​

  • 21st Amendment (1933): Repealed alcohol prohibition​

    • Meant to restore faith in national gov for the Americans

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Agricultural Adjustment Acts

  • Agricultural Adjustment Act (1933): Gives subsidies to farmers to limit their production

    • Sought to end agricultural surpluses by limiting production, to prevent fall of crop prices

    • Agricultural Adjustment Administration (AAA) would tell farmers how much to produce

    • Gave some money to farmers in exchange for keeping part of their land idle

  • Supreme Court declared the AAA unconstitutional →  Soil Conservation & Domestic Allotment Act (1936) replaced it​

    • Basically the same thing

    • It would pay farmers to keep their land idle to conserve the soil & prevent land erosion

  • Resettlement Administration (1935-37) & Farm Security Administration (est. 1937): Gave loans to help relocate farmers to better lands

  • Rural Electrification Administration (1936): Created projects to give electric supply to the rural south

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Industrial Recovery

National Industrial Recovery Act (NIRA)

 

  • Sought to boost industry by regulating prices of industrial goods & workers' wages

  • Allowed workers to organize into labor unions

  • Created the NRA & PWA (described to the right)

National Recovery Administration (NRA)

 

  • An agency created by the NIRA to establish law codes to regulate industry

  • "Blanket Codes": Set minimum wage, maximum workweek, abolished child labor

  • Other codes regulated minimum prices to prevent monopolies

Public Works Administration (PWA)

 

  • Large-scale public works agency to bring jobs to revive the economy

  • By giving people jobs, it allowed those people to buy industrial goods, which helped the industrial economy as well

  • In 1935, Supreme Court ruled against the NRA codes

    • This was the Schechter Case (1935)

    • It was unconstitutional to give legislative power to the president to draft NRA codes

    • It was also illegal for NRA codes to regulate non-interstate commerce

  • In the end, NRA codes failed in the short-term, but led to the 2nd New Deal

Tennessee Valley Authority (TVA)

  • FDR signed Tennessee Valley Authority (TVA) Act (May 1933) to create the TVA

    • A regional agency overseen by federal gov​

    • Sought to build dams in the Tennessee Valley to prevent flooding & provide electricity

      • Also helped rebuild the local economy​

  • TVA built a dam at Muscle Shoals (AL) in 1918, and was officially incorporated in 1933

    • Brought cheap electricity to thousands of people in rural areas

  • TVA did more projects to bring electricity to rural areas, while helping rebuild the local economy

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Monetary Reform

Gold Standard Abolition (Apr 1933)

 

  • FDR abolished the gold standard

  • Finally defeated the biggest obstacle to economic recovery

  • Money was now set to a government-manipulated value

Glass-Steagall Act (Jun 1933)

 

  • Created separate rules for commercial & investment banks, preventing commercial banks from investing in stocks

  • Boosted confidence in the banking system

  • Established the FDIC

Federal Deposit Insurance Corporation (FDIC) (Jun 1933)

 

  • Created insurance to compensate people who lose their deposits if their bank collapses

  • Made people less hesitant to invest in banks

Banking Act of 1935 (Aug 1935)

  • Reorganized Federal Reserve leadership structure

  • Gave more authority of banks to Federal Reserve Board in DC

Truth in Securities Act (May 1933)

  • Required companies to give truthful info to investors about their stocks

  • Meant to boost confidence in investing in stocks

Securities & Exchange Commission (SEC) (Jun 1934)

 

  • Sought to regulate the stock market for any fraud or unlawful actions

  • Meant to boost confidence in investing in stocks

Federal Relief

Federal Emergency Relief Administration (FERA) (May 1933)

 

  • Gave money to states to create relief agencies

  • Funded salaries for gov workers

  • Funded relief programs (such as soup kitchens)

Farm Credit Administration (Mar 1933)

 

  • Provided safe sources to credit to farmers & people in rural areas

  • Mostly meant to help farmers pay off mortgages

Home Owners' Loan Corporation (HOLC) (Jun 1933)

  • Refinanced mortgages of urban homes

  • Federal Housing Administration (Jun 1934) provided insurance for mortgages to protect the money lenders

Civilian Conservation Corps (CCC)

  • Civilian Conservation Corps (Est. Apr 1933): Provided unemployed young men w/ public works projects in rural areas

    • Created camps in rural areas for people to work

    • People worked on planting trees, building reservoirs, creating parks, making irrigation, etc.

  • This is different from the PWA & WPA

    • Public Works Agency (PWA) & Works Progress Administration (WPA) are mostly urban projects​, while CCC is rural

      • PWA is large-scale projects, while WPA is small-scale unskilled projects

      • PWA was also sometimes managed by private firms, while WPA was all public

      • [WPA is described in a section below]

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Opposition to the 1st New Deal

  • Many people opposed the 1st New Deal, both on the right & the left

    • Far-right conservatives hated FDR's dictatorial policies

    • Far-left communists believed FDR wasn't doing enough to help the unemployed people

  • Dr. Francis E Townsend was one critic & created the Townsend Plan

    • Believed all Americans over age 60 should get monthly pensions to spend in the economy

  • Father Charles E Coughlin believed in monetary reform

    • Wanted to remonetize silver & bring more prosperity in the banking system

    • He had one of the widest radio audiences in US

  • Sen. Huey Long (D-LA) promoted the Share-Our-Wealth Plan

    • Believed in taxing the rich & redistributing the money to the poor

    • Wanted to guarantee each family a minimum homestead & annual wage

  • These critical ideas led to the ideas in the 2nd New Deal

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The 2nd New Deal (1935-38)

Overview of the 2nd New Deal

  • Mostly along-term bottom-up approach

    • Dealt most closely with the unemployed people to help bring them back into the economy

  • Focused mostly on social justice & social welfare

    • Established the social security system to provide benefits to retirees​

    • Provided temporary public works jobs to millions of unemployed people to rebuild the economy

    • Also gave workers more rights by allowing them to form labor unions & giving them good wages

      • This was a legacy of the NIRA from the 1st New Deal

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National Labor Relations Act (1935)

Supreme Court declared the National Industrial Recovery Act (NIRA) unconstitutional in the Schechter Poultry Case (1935)

Sen. Robert F Wagner (D-NY) created National Labor Relations Act (Wagner Act) (1935). Meant to replace Section 7a of the NIRA, giving workers the right to form unions

The Wagner Act led to the creation of the National Labor Relations Board (est. 1935) to enforce the right for workers to form unions

Legacy of National Labor Relations Act

  • Many labor unions gained power as the National Labor Relations Act gave them a legal basis to exist

    • Most labor unions initially (like the AFL) were for skilled or craft-based workers

    • The idea of industrial unionism emerged: People were organized based on their industry, rather than their specific craft within the industry

      • Helped organize unskilled workers

    • John L Lewis founded the Congress of Industrial Organizations (CIO), a group of industrial unions

      • Was more open to women & minorities than other craft unions

      • This became more a militant union, which had to fight & campaign w/ employers to gain recognition

  • United Auto Workers (UAW) organized a 2-month sit-down strike at the GM plant to gain recognition

    • Dec 1936 - Feb 1937

    • Eventually, GM was forced to recognize UAW

  • US Steel was forced to recognize the Steel Workers' Organizing Committee (SWOC) after a strike in 1936

  • On Memorial Day 1937, SWOC went on strike to try to gain recognition from Little Steel (which refers to all of the smaller steel companies besides US Steel)

    • Police opened fire & killed 10 strikers

    • Memorial Day Massacre (May 1937)

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Social Security Act

  • Social Security Act (Aug 1935) created the system of social security

  • 1st part of social security was pensions for the elderly
    • The poor elderly would get $15 a month
    • Other Americans would have a payroll tax which would be paid to them after their retirement
      • Retirement benefits​
  • 2nd part were unemployment benefits
    • People laid off from jobs could get temporary wages​
    • People w/ disabilities or dependent children could also get some benefits
  • One of the most important parts of the New Deal as it has a long-lasting effect & still in use today
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Works Progress Administration (WPA)

  • The biggest problem was unemployment

    • Millions were unemployed & needed a temporary job to get back on their feet​

  • FDR established the Works Progress Administration (WPA) to provide temporary employment

    • A public works agency for unskilled workers

    • Different from CCC & PWA as the WPA was more small-scale & for unskilled workers

  • WPA was a huge project

    • $5 billion budget

    • Built/renovated 110k public buildings, 600 airpots, 500k miles of roads, 100k bridges, etc.

    • Kept 8.5 million people employed, allowing them to earn money & spend it on goods, which also boosted the industrial sector

  • WPA was mostly helping men, not women

    • The main aid women received was the social security pensions for single mothers

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End of the New Deal

Situation in Court

  • To make his plans successful, FDR needed to eliminate all conservative judges from court

    • Court had previously struck down many of his acts in the 1st New Deal, and he didn't want the same situation in 2nd New Deal​

  • In Feb 1937, FDR proposed the Judicial Procedures Reform Bill of 1937

    • Sought to replace all Supreme Court justices over age of 70​

      • Claimed he was adding fresh ideas to Court, but he was actually replacing conservative justices w/ liberal ones​

    • Managed to replace 6 justices

    • This actually led to a 5-4 vote in court for many of FDR's legislation​

  • Although FDR was successful, public opinion largely opposed FDR's moves

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Recession of 1937-1938

In 1937, FDR wanted to lower the federal budget as the economy was improving

FDR cut the budget if the WPA in half, laying off 1.5 million workers

This caused a huge recession, similar to the Great Depression. 4 million workers lost their jobs

  • Many call this recession "Roosevelt's Recession" as FDR's decision to cut the budget caused this

Resolving the Recession of 1937-1938

  • FDR gave $5 billion to the economy, causing economic recovery to begin again

  • FDR created Temporary National Economic Committee (TNEC) (est. 1938) to promote antitrust laws

    • Meant to stop monopolies from dominating the economy

  • FDR passed Fair Labor Standards Act (1938)

    • Established national minimum wage, created overtime pay, and limited child labor

  • At the end of 1938, the New Deal basically ended

    • Congressional opposition made it difficult for FDR to pass any legislation

    • FDR was more concerned w/ the upcoming World War 2 then with the New Deal

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Legacy of the New Deal

African-Americans in the New Deal

  • New Deal did little to help African-Americans although FDR did more to help Blacks than other presidents

    • FDR put some African-Americans in the "Black Cabinet," a group of informal advisors to the president​

  • In mid 1930s, most African-Americans switched political parties (Rep to Dem)

    • In 1932, most Blacks voted Republican

    • In 1936, >90% of Black electorate voted Democratic

    • This political shift was significant & helped Democrats gain significant power later on

  • Still, FDR did little to change race relations

    • All New Deal programs still had racial segregation & discriminated toward Blacks​

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Indian Reorganization Act (1934)

  • New Deal initially sought to suppress the Indians

  • John Collier, a social worker who worked w/ Indians in New Mexico sought to promote Native American culture

  • Collier promoted & got Congress to pass Indian Reorganization Act (1934)

    • Allowed Indians to own land collectively

    • Increased Indian self-government & responsibility for themselves

    • Somewhat replaced the Dawes Act (1887)

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Women in the New Deal

  • New Deal did very little to help women

  • Women actually held some government positions

    • FDR appointed Frances Perkins as Sec of Labor in 1933

    • Many other women had lower-level positions

  • Many disagreed on the proper role of women: Some believed women should be equal to men, others believed women should have special place in society

  • Social Security Act gave aid to dependent children to help single mothers

  • New Deal generally believed women should free up the workplace for men

    • New Deal relief agencies had little employment opportunities for women

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Economic Development in West & South

  • West & South received a lot more funds from the New Deal than other regions

  • The West had many public works projects

    • Agricultural projects were done b/c agriculture was important to the Western economy​

    • Dams, power plants, etc. were built in the West

      • Grand Coulee Dam (WA) was largest public works project at the time​

    • Allowed the West's economy to develop & gave the federal gov a strong presence in the West

  • Some projects were also in the South

    • South was least economically developed, so it needed more help​

      • However, it was less important to the US's economy than the West, so it was given less help​

    • Rural electrification projects were really helpful & provided electricity to the Southern countryside

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Overall Legacy of the New Deal on the US

  • The US economy only fully recovered after WW2

    • New Deal led to economic development of the South & West​

    • Increased control of federal gov over the stock market & banking system

  • New Deal established the welfare system (Social Security), which is still in use today

  • New Deal ended the gov's traditional reluctance to help its poorest & lowest-ranking citizens

    • I.e. the farmers & unskilled workers

  • The New Deal gave the federal gov more power than it had before

    • Federal gov now had more authority over states & local govs than they did before
    • Established the president as the main power within the federal government
  • New Deal allowed the Democratic Party to gain lots of power
    • Most African-Americans switched from Republican to Democratic​
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