Chapter 33 The New Deal and Its Legacy

Understanding FDR• FDR came from a wealthy New York family; attended

exclusive private schools.• Married Eleanor Roosevelt• Eleanor had been taught that the wealthy have a duty

to help the poor.• He pushed for economic and social reforms.• Vowed to defeat the Depression from the bottom up

and not from the top down.• Fireside chats were a series of radio addresses FDR

gave to the country so the populous understood what he was trying to accomplish to beat the Depression.

The First New Deal• FDR recognized his top priority was

getting people back to work.• Restructuring the Financial Sector

– Ordered all banks to close temporarily

– This allowed Congress to pass the Emergency Banking Act – gave the federal government more power to supervise bank activities.

– Banking Act – created the Federal Deposit Insurance Corporation (FDIC). • Limited the freedom of banks to trade

in stocks and bonds.– Securities and Exchange

Commission – required companies to publish the important facts about their business. • Regulated the activities of

stockbrokers and others in the investment business.

The Business Sector• National Industrial Recovery Act (NIRA) –

designed to increase production while boosting wages and prices. – Goals: Make more goods available and to give

consumers more money with which to buy them.– Set aside $3.3 Billion for various public works.

Established the Public Works Administration.– Set up the National Recovery Administration (NRA).

• This Government Agency worked with business leaders to create codes of fair competition in various industries. – Required each industry to standardize products, set minimum

prices, and announce any expected price increases.– Guaranteed workers the right to organize and bargain

collectively.

Help to Farmers• Agricultural Adjustment Administration

(AAA) - Tried to aid farmers by reducing crop production and raising prices. – Raise crop prices to reach parity - price that gives

farmers the same purchasing power they had during an earlier more prosperous time

– Paid farmers to plant fewer crops.– Provided loans to farmers so they could pay their

mortgages and stay on their land rather than join the unemployed ranks.

Infrastructure / Homeownership• Congress passed a bill creating the Tennessee Valley

Authority (TVA).– TVA promoted economic development in one of the

poorest regions of the country. – Independent Government Agency that built a series of

dams on the Tennessee River and its tributaries to provide flood control and hydroelectric power.

• Home Owners’ Loan Corporations – provided loans to help people meet their mortgage payments.

• Federal Housing Administration (FHA) – gave a boost to the banking and construction industries by insuring mortgage loans.

Helping the Environment • Civilian Conservation Corps (CCC) - gave

young men jobs planting trees and working on other conservation projects.

• Federal Emergency Relief Administration (FERA) – sent funds to state governments, which then distributed the cash to the needy. – First time in American history, a federal agency

provided direct relief to the unemployed.

Other Ideas

• Republican Robert La Follette wanted larger public work programs.

• Dr. Francis Townsend devised a plan calling for a monthly payment of $200 to everyone over the age of 60.

The Second New Deal• Emergency Relief Appropriations Bill - created several new agencies and

called for nearly $5 billion in new spending.– Rural Electrification Administration (REA) – established hundreds of publicly

owned electrical cooperatives, built generating plant, and strung power lines.– Works Progress Administration (WPA) – build hundreds of thousands of

bridges, public building, and parks.• Hired unemployed artists to paint murals in public buildings.

• Wagner Act – guaranteed workers the right to self organize, to form, join, or assist labor organizations, and to bargain collectively through representatives of their own choosing.– National Labor Relations Board (NLRB) – protect rights of the Wagner Act;

supervise union elections to ensure that they were free and democratic; punish employers for “unfair labor practices.”

• Fair Labor Standards – regulated conditions in the workplace ***set a minimum wage and maximum workweek hours

• Social Security Act – created a social insurance program that provides two main types of benefits: retirement and disability. – Set up unemployment insurance program.

Problems with the Courts• Schechter Poultry

Corp v United States struck down the NIRA as unconstitutional.

• The court also struck down the Agricultural Adjustment Act (AAA).

• Roosevelt proposed radical changes to the court.

QUESTIONS???