Use the attached pages to do research and answer questions!!! ppt has requirements, word docs are questions and useful info to answer questions…use text pages too!
1.)Using you knowledge AND the documents provided, write a well-reasoned essay on the following prompt:
How did the New Deal of the Great Depression create a lasting impact on the role of government and the lives of the American People
2.
Task: Research the New Deal
3.
Analyze the documents in the packets( pages from packet andtext attached) and answer the attached 13questions under the posters on the pdfs.
4.
Assessment: Create a complex-split thesis and find 3 documents to support your thesis and 3 items of content from the text.
Write a paragraph of analysis and support for your documents and content (pp 694).
…use attached text pages
You must follow above directs exactly
The American Character
The New Deal
How did the New Deal of the Great Depression create a lasting impact on the role of government and the lives of the American People?
Task: Research the New Deal
Analyze the documents in the packets and answer the attached questions.
Chapter 23-1 and 23-2 will have a great detail of content for research to help with your response.
Assessment: Create a complex-split thesis and find 3 documents to support your thesis and 3 items of content from the text. Write a paragraph of analysis and support for your documents and content (pp 694).
New Deal DBQ
Using you knowledge AND the documents provided, write a well-reasoned essay on the following prompt:
1.) How did the New Deal of the Great Depression create a lasting impact on the role of government in business and the lives o the American people?
Document 1
Source: America 1900-1999: Letters of the Century, Grunwald, Lisa and Adler, Stephen.
Troy, NY Jan. 2, 1935
Dear Mrs. Roosevelt,
About a month ago I wrote you asking if you would buy some baby clothes for me with the understanding that I was to repay you as soon as my husband got a enough work. Several weeks later, I received a reply to apply to a Welfare Association so I might receive the aid I needed. Do you remember?
Please Mrs. Roosevelt, I do not want charity, only a chance from someone who will trust me until we can get enough money to repay the amount spent for the things I need. As a proof that I really am sincere, I am sending you 2 of my dearest possessions to keep as security, a ring my husband gave me before we were married, and a ring my mother used to wear. Perhaps the actual value of them is not high, but they are worth a lot to me. If you would consider buying the baby clothes, please keep them (rings) until I send you the money you spent. It is very hard to face bearing a baby we cannot afford to have, and the fact that it is due to arrive soon, and still there is no money for the hospital or clothing, does not make it any easier. I have decided to stay home, keeping my seven year old daughter from school to help with smaller children when my husband has work. The oldest girl is sick now, and has never been strong, so I would not depend on her. The seven year old is a good willing little worker and somehow we must manage-but without charity.
If you still feel you cannot trust me, it is all right and I can only say I do not blame you, but if you decide my word id worth anything with so small a security, here is a list of what I will need- but I will need it very soon.
· 2 shirts, silk and wool size 2
· 3 pr. Stockings, silk and wool, 4 ½ or 4
· 3 straight flannel bands
· 2 slips-outing flannel
· 2 muslim dresses
· 1 sweater
· 1 wool bonnet
· 2 pr. Wool booties
· 2 doz. Diapers 30×30 or 27×27
· 1 large blanket
· 3 outing flannel nightgowns
If you will get these things for me I would rather no one else knew about it. I promise to repay the cost of the layette as soon as possible. We will be very grateful to you, and I will be more than happy.
Sincerely yours,
Mrs. H.E.C
1. Why might this woman not want to turn to a charity for help?
2. Why could she not afford to get the items herself?
3. Who might help this woman if she were in this position today?
Document 2
Source:
http://www.pbs.org/wnet/blueprintamerica/blog/384/384
1. What is the WPA?
2. What was the goal of programs like the WPA, and what were at least 2 other alphabet soup programs with the same goal?
Document 3
Source: Excerpts from FDR’s Fireside Chat: 8/30/1934
http://amfwotr.com/2010/06/fdrs-fireside-chat-8301934-on-government-and-capitalism.html
I am happy to report that after years of uncertainty, culminating in the collapse of the spring of 1933, we are bringing order out of the old chaos with a greater certainty of the employment of labor at a reasonable wage and of more business at a fair profit. These governmental and industrial developments hold promise of new achievements for the nation.
Men may differ as to the particular form of governmental activity with respect to industry and business, but nearly all are agreed that private enterprise in times such as these cannot be left without assistance and without reasonable safeguards lest it destroy not only itself but also our processes of civilization.
It was in this spirit … that we approached our task of reviving private enterprise in March, 1933. Our first problem was, of course, the banking situation because, as you know, the banks had collapsed. Some banks could not be saved but the great majority of them, either through their own resources or with government aid, have been restored to complete public confidence. This has given safety to millions of depositors in these banks. Closely following this great constructive effort we have, through various Federal agencies, saved debtors and creditors alike in many other fields of enterprise, such as loans on farm mortgages and home mortgages; loans to the railroads and insurance companies and, finally, help for home owners and industry itself…
The second step we have taken in the restoration of normal business enterprise has been to clean up thoroughly unwholesome conditions in the field of investment…The country now enjoys the safety of bank savings under the new banking laws, the careful checking of new securities under the Securities Act and the curtailment of rank stock speculation through the Securities Exchange Act…
The emergency purpose of the N. R. A. was to put men to work and since its creation more than four million persons have been re-employed, in great part through the cooperation of American business brought about under the codes.
Benefits of the Industrial Recovery Program have come, not only to labor in the form of new jobs, in relief from over-work and in relief from under-pay, but also to the owners and managers of industry because, together with a great increase in the payrolls, there has come a substantial rise in the total of industrial profits – a rise from a deficit figure in the first quarter of 1933 to a level of sustained profits within one year from the inauguration of N. R. A.
1. From the first 3 paragraphs of the speech, why did FDR feel the government
needed to fix the banks?
2. From the last 3 paragraphs of the speech, what does FDR credit the National
Recovery Act (NRA) with accomplishing?
Document 4
Source: New Deal Remedies
http://www.shmoop.com/fdr-new-deal/political-cartoons-activity.html
1. What do each of the bottles on the table represent?
2. Why does FDR need to convince Congress that the plan will work?
Document 5
Source: Poster from FDR library
http://www.fdrlibrary.marist.edu/museum/spexhibitduty.html
1. What program is the poster advertising?
2. Who is the programmed designed for and how is it funded?
Document 6
Source: Political Cartoon
http://0.tqn.com/d/politicalhumor/1/0/U/c/2/fdr-obama-jsh022509dAPC
1. What comparison is being made by the image?
2. What point is the author trying to make?
The New Deal
New Deal Programs
With unemployment the highest it had ever been in the nation’s history, the most pressing problem facing Roosevelt when he took office was to get people back to work. His first request to Congress was for the Unemployment Relief Act, which created the Civilian Conservation Corps (CCC). Over the course of its existence, the CCC employed some three million young men on conservation projects such as flood control, draining swamps, and planting trees. The CCC did more than just provide jobs—it kept many young men off the streets and gave them hope and dignity. CCC employees were not only able to earn money for themselves, but part of their pay was sent to their parents, so the benefit was spread to their families and ultimately to the economy. CCC workers were given uniforms, housed in barracks, and fed regular meals. Critics complained about the militarization of America’s youth, but many CCC workers would have gone without the basic necessities of food, shelter, and clothing without this program.
To assist families and adult unemployed workers, Congress passed the Federal Emergency Relief Act (FERA), which gave $3 billion to states to be used as welfare and to supplement work projects. Harry L. Hopkins, a New York social worker, was put in charge of the agency. Roosevelt also ordered the Civil Works Administration (CWA) as a sub-agency of FERA. The CWA provided strictly temporary jobs, many of them inconsequential in nature, in order to help people through the winter of 1933 to 1934. While the CCC and FERA had both relief and recovery aims, the CWA was designed solely for relief.
Farmers and homeowners were also in desperate need of assistance. The Agricultural Adjustment Act (AAA) and the Home Owners’ Loan Corporation (HOLC) provided millions of dollars in mortgage assistance so families could keep their homes and farms. Secondarily, mortgage-holding banks were saved from huge losses and in some cases even collapse with mortgage holders once again being able to make their payments. As with the CCC and FERA, these mortgage assistance agencies were for both immediate relief and longer-term recovery.
In addition, the Agricultural Adjustment Administration was created to maintain farm income. The agency’s strategy was to reduce the supply in the market by paying farmers to decrease their acreage under production. The government also bought surpluses and destroyed them, to the chagrin of people who could not afford food. The scheme was to be paid for by taxes on food processors such as grain mills and slaughterhouses, who would pass on the increases to the public.
In Butler v. U.S. in 1935, the Supreme Court ruled the government’s method of taxation unconstitutional and the AAA program was scrapped. In its place, the government created the Soil Conservation and Domestic Allotment Act of 1936 where the government paid farmers to allow some of their land to lie fallow or to plant part of their acreage in soil-conserving crops such as beans or buckwheat. In 1938, it followed up with the Second Agricultural Adjustment Act with the goal to support farm prices and restore farm income to be on a par with the incomes of other segments of society.
As if nature had joined in a conspiracy against the American economy, the 1930s witnessed a devastating drought in the region drained by the Mississippi River. Conditions were so dry that the especially hard-hit areas of eastern Colorado and western Texas, Oklahoma, Kansas, and Nebraska were called the Dust Bowl. Farming there became virtually impossible as the land turned to desert. Most of the region’s farming population headed west in the great migration memorialized by John Steinbeck in his 1939 classic, Grapes of Wrath.
The Roosevelt administration endeavored to deal with in the problems caused by the Dust Bowl by sending to Congress the Frazier-Lemke Farm Bankruptcy Act of 1934, which mandated a suspension of mortgage foreclosures for five years. The Supreme Court struck down the Frazier-Lemke Act, but Congress passed an amended act that forestalled foreclosures for three years. In 1935, the government created the Resettlement Administration to assist Dust Bowl farmers with relocating to better land. Meanwhile, CCC workers planted 200 million seedling trees in the Dust Bowl region as windbreaks. The rains began to fall again by the 1940s, but after the 50-year experiment in farming this fragile area, much of it was returned to grazing because the tough prairie grasses hold the soil during the cyclical droughts that plague the region.
Along with banking and unemployment, the Roosevelt administration was committed to repealing prohibition. In practical terms, prohibiting alcohol had simply not been successful. Those who wanted a drink were seldom prevented from getting one. In fact, alcohol consumption had increased in the 1920s. From a sociological standpoint, prohibition was a disaster because the illicit market for alcohol was so lucrative that it fostered the growth of criminal organizations such as that of Al Capone in Chicago. When alcohol became legal, these organizations did not disappear but turned to making a profit in other criminal arenas, notably drugs and prostitution.
On March 22, 1933, just 18 days after Roosevelt took office, Congress legalized light (3.2% alcohol) beer and wine. This did more than end prohibition; it spurred employment in a domestic industry that had been suppressed for a decade. Even more important, perhaps, a tax of $5 was levied on each barrel of wine and beer, which provided needed revenue to the Treasury. Later in 1933, prohibition was abolished altogether with the Twenty-first Amendment.
Another institution in desperate need of reform was the stock market. Small margin requirements and insider trading had allowed swindlers to manipulate the market and make fortunes at the expense of investors. During the first hundred days of the emergency session, Congress passed the Truth in Securities Act that called for complete disclosure concerning a stock before it was sold. In 1934, Congress solidified its fair trading policy by creating the Securities and Exchange Commission (SEC). This agency set rules and regulations concerning trading that put all investors on a level playing field.
In 1935, Congress passed the Public Utility Holding Company Act to address the huge utility conglomerates that had swallowed up hundreds of local utility companies under the umbrella of a holding company that was held by a parent holding company, and so on. As an example of the dangers of this pyramiding, Samuel Insull’s utility behemoth had failed in 1932 sending shocks throughout the business world and creating distress for the company’s tens of thousands of customers. The Insull failure had an immediate response from the first emergency Congress. Roosevelt’s New Deal cabinet and Congress wanted to counter the monopolistic utility companies, especially the electric power companies, with a model government program that could be used as a gauge for fair prices and practices. Senator George W. Norris of Nebraska was a particular champion of this idea.
The Tennessee River valley, which was badly eroded from incessant flooding and whose population had been especially hard hit by the depression, was the ideal location for a pilot project of impressive proportions. The president promoted and Congress passed the Tennessee Valley Authority (TVA) legislation that mandated the project. More than 20 dams on the river and its tributaries were constructed to prevent flooding and provide power to generate electricity for the entire region. Building this flood control and power generating system employed thousands of workers, which helped bring needed dollars to the local populace. Erosion was all but eliminated, and CCC workers restored much of the land to forest.
The TVA was a notable success, in spite of efforts by privately owned utility companies to discredit the achievement. Initiating similar large-scale projects on other river systems met with resistance, however, as conservatives and even moderate Democrats became concerned over the dangers of slipping into a socialistic, managed economy. But smaller projects and individual dams built to provide both water and power in the driest areas of the West proved great boons to those areas in the years to come.
Housing was another critical area addressed by the New Deal. In 1934, Roosevelt inaugurated the Federal Housing Administration (FHA) to make small loans to homeowners for home improvements or completing construction on a home. The project was extremely well received, and in 1937 Roosevelt supplemented it with the United States Housing Authority (USHA) aimed at sponsoring new home construction. Housing funds were allocated for over a half million low income families, but the initiative was obstructed by entrenched interests in real estate and construction who felt that government-sponsored, low-income housing would interfere with their livelihood. Enough housing was built to get many families out of the worst of the urban slums, however, and housing assistance through the FHA continues to this day.
A far-reaching program called the National Recovery Administration (NRA) attempted in 1933 to coordinate business and labor and to address unemployment both for the short and long term. The NRA called for self-restraint on the parts of both business and labor. Businesses were to abide by codes of fair competition. Minimum wages and maximum work hours were established for workers in order to employ a greater number of people. Labor was encouraged to use collective bargaining.
The National Recovery Administration program was expensive for industries, and workers who already had a job found their net pay reduced because they were restricted in the number of hours they could work. In addition, labor felt its bargaining impact blunted in not being able to threaten a strike. After a warm reception, the plan began to founder as each group felt it was being asked to sacrifice too much. The NRA’s semi-voluntary nature made it easy for individuals to cheat on the rules when they felt unfairly burdened. Finally, in the Schechter case, the Supreme Court ruled that not only had Congress overstepped its bounds by delegating its legislative authority to the executive branch, but also that the federal government did not have jurisdiction for regulating local businesses that were not engaged in interstate activity.
A companion to the ill-fated NRA was the Public Works Administration (PWA) that was also aimed at unemployment relief and economic recovery. Headed by Secretary of the Interior Harold L. Ickes, the PWA pursued tens of thousands of public works projects, including the Grand Coulee Dam on the Columbia River, which provided water for irrigation and hydroelectric power for the region. The success of the PWA and later the Works Progress Administration (WPA) lay in the fact that government was much more successful as a contractor for work than as a mediator between business and labor, as it tried to be with the NRA.
The reforms of the New Deal placed a value on heritage as well as progress. Concerned that Indians under the Dawes Act, which had called for assimilation, were losing their native identity, the Roosevelt administration sponsored the Indian Reorganization Act of 1934, which provided for tribal self-government and the means to preserve native traditions. Of nearly 300 tribes, 200 participated in the reorganization. The remainder balked due to concerns that reviving Indian culture could lead to further marginalization of Native Americans in the predominantly white American culture.
In spite of pump priming, jobs programs, and outright welfare, unemployment was still high in 1935, and many people had exhausted every resource. The mood of the country was desperate. Roosevelt decided that all of the previous programs had not gone far enough to keep people employed, and he began another round of reforms sometimes called the Second New Deal. At his request, Congress created the Works Progress Administration (WPA) as a large-scale remedy. Harry Hopkins headed the WPA, which over time spent approximately $11 billion on public works projects, education, and the arts.
WPA workers constructed bridges, paved roads, and built public buildings. Many of the brick roads laid down by WPA workers are still in use today. Workers also assisted all levels of education as graders and teaching assistants. They wrote histories and produced art for government buildings. Wages were $.25 to $.35 an hour, but people who had been earning nothing were thrilled to get any sort of pay, and WPA jobs helped people keep their self-respect.
In an effort to help organized labor after the demise of the NRA, in 1935 Congress wrote the National Labor Relations Act, sometimes known as the Wagner Act, which created the National Labor Relations Board. This agency fostered the organization of unions and protected their right to bargain collectively.
Perhaps the most revolutionary New Deal reform for America was the Social Security Act of 1935. This law provided government-sponsored insurance for the unemployed, dependent children, retirees, and the handicapped. The plan was funded by mandated contributions from both workers and employers. Social Security payments were from $10 to $85 a month, but have regularly increased to keep pace with inflation. Originally the plan did not cover self-employed persons, though that provision soon changed.
Conservatives bitterly opposed Social Security as pernicious socialism that celebrated leisure and denigrated work. They also charged that the plan was a “ponzi scheme,” an illegal form of investment where the incoming funds of people investing in the scheme are used to pay off those collecting their returns, but no principal is actually generating a dividend income. Mathematically, ponzi schemes always fail because at some point those who are receiving exceed in number those who are paying in.
Liberal theorists have maintained that if there should be shortfalls in the Social Security System, the federal government is large enough to absorb them. With the Baby Boom bulge in the population now approaching retirement, politicians and economists are scrambling to plan ways to keep Social Security afloat while shielding the working generation from a crushing tax burden. Time will tell how the story of Social Security plays out, but for the 70-some years of its existence it has provided necessary and humane retirement support for millions of Americans at a reasonable cost to those in the workforce.
Copyright © 2004 The Regents Of The University Of California
694 CHAPTER 23
Terms & NamesTerms & NamesMAIN IDEAMAIN IDEA
A New Deal Fights
the Depression
After becoming president,
Franklin Delano Roosevelt
used government programs
to combat the Depression.
Americans still benefit from
programs begun in the New
Deal, such as bank and stock
market regulations and the
Tennessee Valley Authority.
WHY IT MATTERS NOWWHY IT MATTERS NOW
Hank Oettinger was working as a printing press operator in
a small town in Wisconsin when the Great Depression
began. He lost his job in 1931 and was unemployed for the
next two years. In 1933, however, President Roosevelt
began creating work programs. Through one of these pro-
grams, the Civil Works Administration (CWA), Oettinger
went back to work in 1933. As he later recalled, the CWA
was cause for great celebration in his town.
A PERSONAL VOICE HANK OETTINGER
“ I can remember the first week of the CWA checks. It
was on a Friday. That night everybody had gotten his
check. The first check a lot of them had in three years. . . .
I never saw such a change of attitude. Instead of walking
around feeling dreary and looking sorrowful, everybody was
joyous. Like a feast day. They were toasting each other.
They had money in their pockets for the first time.”
—quoted in Hard Times
Programs like the CWA raised the hopes of the American people and sparked
great enthusiasm for the new president. To many Americans, it appeared as if the
country had turned a corner and was beginning to emerge from the nightmare of
the Great Depression.
Americans Get a New Deal
The 1932 presidential election showed that Americans were clearly ready for a
change. Because of the depression, people were suffering from a lack of work,
food, and hope.
▼
The Civil Works
Administration
enabled these
men to get jobs
repairing
typewriters and
sewing machines.
•Franklin Delano
Roosevelt
•New Deal
•Glass-Steagall Act
•Federal Securities
Act
•Agricultural Adjust-
ment Act (AAA)
•Civilian Conser-
vation Corps
(CCC)
•National Industrial
Recovery Act
(NIRA)
•deficit spending
•Huey Long
One American’s Story
ELECTING FRANKLIN DELANO ROOSEVELT Although the Republicans renom-
inated President Hoover as their candidate, they recognized he had little chance
of winning. Too many Americans blamed Hoover for doing too little about the
depression and wanted a new president. The Democrats pinned their hopes on
Franklin Delano Roosevelt, known popularly as FDR, the two-term governor
of New York and a distant cousin of former president Theodore Roosevelt.
As governor, FDR had proved to be an effective, reform-minded leader, work-
ing to combat the problems of unemployment and poverty. Unlike Hoover,
Roosevelt possessed a “can-do” attitude and projected an air of friendliness and
confidence that attracted voters.
Indeed, Roosevelt won an overwhelming victory, capturing nearly 23 million
votes to Hoover’s nearly 16 million. In the Senate, Democrats claimed a nearly
two-thirds majority. In the House, they won almost three-fourths of the seats,
their greatest victory since before the Civil War.
WAITING FOR ROOSEVELT TO TAKE OVER Four months would elapse between
Roosevelt’s victory in the November election and his inauguration as president in
March 1933. The 20th Amendment, which moved presidential inaugurations to
January, was not ratified until
February 1933 and did not apply
to the 1932 election.
FDR was not idle during
this waiting period, however. He
worked with his team of care-
fully picked advisers—a select
group of professors, lawyers,
and journalists that came to be
known as the “Brain Trust.”
Roosevelt began to formulate a
set of policies for his new
administration. This program,
designed to alleviate the prob-
lems of the Great Depression,
became known as the New
Deal, a phrase taken from a
campaign speech in which
Roosevelt had promised “a new
deal for the American people.”
New Deal policies focused on
three general goals: relief for the
needy, economic recovery, and
financial reform.
THE HUNDRED DAYS On tak-
ing office, the Roosevelt admin-
istration launched a period of
intense activity known as the
Hundred Days, lasting from
March 9 to June 16, 1933.
During this period, Congress
passed more than 15 major
pieces of New Deal legislation.
These laws, and others that fol-
lowed, significantly expanded
the federal government’s role in
the nation’s economy.
FRANKLIN D. ROOSEVELT
1882–1945
Born into an old, wealthy New
York family, Franklin Delano
Roosevelt entered politics as
a state senator in 1910 and
later became assistant secre-
tar y of the navy. In 1921, he
was stricken with polio and
became partially paralyzed
from the waist down. He
struggled to regain the use of
his legs, and he eventually
learned to stand with the help
of leg braces.
Roosevelt became governor
of New York in 1928, and
because he “would not allow
bodily disability to defeat his
will,” he went on to the White
House in 1933. Always inter-
ested in people, Roosevelt
gained greater compassion
for others as a result of his
own physical disability.
ELEANOR ROOSEVELT
1884–1962
A niece of Theodore Roosevelt
and a distant cousin of her
husband, Franklin, Eleanor
Roosevelt lost her parents at
an early age. She was raised
by a strict grandmother.
As first lady, she often urged
the president to take stands
on controversial issues. A pop-
ular public speaker, Eleanor
was particularly interested in
child welfare, housing reform,
and equal rights for women
and minorities. In presenting a
booklet on human rights to the
United Nations in 1958, she
said, “Where, after all, do
human rights begin? . . . [In]
the world of the individual per-
son: the neighborhood . . . the
school . . . the factory, farm or
office where he works.”
MAIN IDEAMAIN IDE
A
A
Summarizing
What plans
did Roosevelt
make in the four
months while he
waited to take
office?
KEY PLAYERSKEY PLAYERS
A
The New Deal 695
696 CHAPTER 23
Roosevelt’s first step as president was to carry out reforms in banking and
finance. By 1933, widespread bank failures had caused most Americans to lose
faith in the banking system. On March 5, one day after taking office, Roosevelt
declared a bank holiday and closed all banks to prevent further withdrawals. He
persuaded Congress to pass the Emergency Banking Relief Act, which authorized
the Treasury Department to inspect the country’s banks. Those that were sound
could reopen at once; those that were insolvent—unable to pay their debts—
would remain closed. Those that needed help could receive loans. This measure
revived public confidence in banks, since customers now had greater faith that
the open banks were in good financial shape.
AN IMPORTANT FIRESIDE CHAT On March 12, the day before the first banks
were to reopen, President Roosevelt gave the first of his many fireside chats—
radio talks about issues of public concern, explaining in clear, simple lan-
guage his New Deal measures. These informal talks made Americans feel
as if the president were talking directly to them. In his first chat, President
Roosevelt explained why the nation’s welfare depended on public sup-
port of the government and the banking system. “We have provided the
machinery to restore our financial system,” he said, “and it is up to you to sup-
port and make it work.” He explained the banking system to listeners.
A PERSONAL VOICE FRANKLIN DELANO ROOSEVELT
“ When you deposit money in a bank the bank does not put the money into a safe
deposit vault. It invests your money. . . . A comparatively small part of the money
that you put into the bank is kept in currency—an amount which in normal times
is wholly sufficient to cover the cash needs of the average citizen.”
The president then explained that when too many people demanded their sav-
ings in cash, banks would fail. This was not because banks were weak but because
even strong banks could not meet such heavy demands. Over the next few weeks,
many Americans returned their savings to banks.
REGULATING BANKING AND FINANCE Congress took
another step to reorganize the banking system by pass-
ing the Glass-Steagall Act of 1933, which established
the Federal Deposit Insurance Corporation (FDIC). The
FDIC provided federal insurance for individual bank
accounts of up to $5,000, reassuring millions of bank
customers that their money was safe. It also required
banks to act cautiously with their customers’ money.
Congress and the president also worked to regulate the
stock market, in which people had lost faith because of the
crash of 1929. The Federal Securities Act, passed in May
1933, required corporations to provide complete informa-
tion on all stock offerings and made them liable for any
misrepresentations. In June of 1934, Congress created the
Securities and Exchange Commission (SEC) to regulate the
stock market. One goal of this commission was to prevent
people with inside information about companies from
“rigging” the stock market for their own profit.
In addition, Roosevelt persuaded Congress to approve
a bill allowing the manufacture and sale of some alco-
holic beverages. The bill’s main purpose was to raise gov-
ernment revenues by taxing alcohol. By the end of 1933,
the passage of the 21st Amendment had repealed
prohibition altogether.
“ The only thing
we have to fear
is fear itself.”
FRANKLIN DELANO ROOSEVELT
Franklin D.
Roosevelt holds
his dog Fala and
talks to a young
family friend.
B▼
MAIN IDEAMAIN IDEA
B
Evaluating
Leadership
How
successful was
FDR’s fireside
chat?
The New Deal 697
Background
See supply and
demand on
page R46 in
the Economics
Handbook.
MAIN IDEAMAIN IDEA
C
Analyzing
Effects
How did New
Deal programs
affect various
regions of the
United States?
Helping the American People
While working on banking and financial matters, the Roosevelt administration
also implemented programs to provide relief to farmers, perhaps the hardest hit
by the depression. It also aided other workers and attempted to stimulate eco-
nomic recovery.
RURAL ASSISTANCE The Agricultural Adjustment Act (AAA) sought to
raise crop prices by lowering production, which the government achieved by pay-
ing farmers to leave a certain amount of every acre of land unseeded. The theory
was that reduced supply would boost prices. In some cases, crops were too far
advanced for the acreage reduction to take effect. As a result, the government paid
cotton growers $200 million to plow under 10 million acres of their crop. It also
paid hog farmers to slaughter 6 million pigs. This policy upset many Americans,
who protested the destruction of food when many people were going hungry. It
did, however, help raise farm prices and put more money in farmers’ pockets.
An especially ambitious program of regional development was the Tennessee
Valley Authority (TVA), established on May 18, 1933. (See Geography Spotlight
on page 726.) Focusing on the badly depressed Tennessee River Valley, the TVA
renovated five existing dams and constructed 20 new ones, created thousands of
jobs, and provided flood control, hydroelectric power, and other benefits to an
impoverished region.
PROVIDING WORK PROJECTS The administration also established programs to
provide relief through work projects and cash payments. One important program,
the Civilian Conservation Corps (CCC), put young
men aged 18 to 25 to work building roads, developing
parks, planting trees, and helping in soil-erosion and
flood-control projects. By the time the program ended
in 1942, almost 3 million young men had passed
through the CCC. The CCC paid a small wage, $30 a
month, of which $25 was automatically sent home to
the worker’s family. It also supplied free food and uni-
forms and lodging in work camps. Many of the camps
were located on the Great Plains, where, within a period
of eight years, the men of the CCC planted more than
200 million trees. This tremendous reforestation pro-
gram was aimed at preventing another Dust Bowl.
The Public Works Administration (PWA), created in
June 1933 as part of the National Industrial
Recovery Act (NIRA), provided money to states to
create jobs chiefly in the construction of schools and
other community buildings. When these programs
failed to make a sufficient dent in unemploy-
ment, President Roosevelt established the
Civil Works Administration in November
1933. It provided 4 million immediate
jobs during the winter of 1933–1934.
Although some critics of the CWA
claimed that the programs were
“make-work” projects and a waste
of money, the CWA built 40,000
schools and paid the salaries of more
than 50,000 schoolteachers in America’s
rural areas. It also built more than half
a million miles of roads. C
Civilian Conservation Corps
• The CCC provided almost 3 million men
aged 18–25 with work and wages between
1933 and 1942.
• The men lived in work camps under a strict
regime. The majority of the camps were
racially segregated.
• By 1938, the CCC had an 11 percent
African-American enrollment.
• Accomplishments of the CCC include
planting over 3 billion trees, developing
over 800 state parks, and building more
than 46,000 bridges.
698 CHAPTER 23
PROMOTING FAIR PRACTICES The NIRA also sought to promote industrial
growth by establishing codes of fair practice for individual industries. It
created the National Recovery Administration (NRA), which set prices of many
products and established standards. The aim of the NRA was to promote recovery
by interrupting the trend of wage cuts, falling prices, and layoffs. The economist
Gardiner C. Means attempted to justify the NRA by stating the goal of industrial
planning.
A PERSONAL VOICE GARDINER C. MEANS
“ The National Recovery Administration [was] created in response to an overwhelm-
ing demand from many quarters that certain elements in the making of industrial
policy . . . should no longer be left to the market place and the price mechanism but
should be placed in the hands of administrative bodies.”
—The Making of Industrial Policy
The codes of fair practice had been drafted in joint meetings of businesses and
representatives of workers and consumers. These codes both limited production
and established prices. Because businesses were given new concessions, workers
made demands. Congress met their demands by passing a section of the NIRA
guaranteeing workers’ right to unionize and to bargain collectively.
Many businesses and politicians were critical of the NRA. Charges arose that
the codes served large business interests. There were also charges of increasing
code violations.
FOOD, CLOTHING, AND SHELTER A number of New Deal
programs concerned housing and home mortgage problems.
The Home Owners Loan Corporation (HOLC) provided gov-
ernment loans to homeowners who faced foreclosure because
they couldn’t meet their loan payments. In addition, the
1934 National Housing Act created the Federal Housing
Administration (FHA). This agency continues to furnish
loans for home mortgages and repairs today.
Another program, the Federal Emergency Relief
Administration (FERA), was funded with $500 million to pro-
vide direct relief for the needy. Half of the money was given
to the states as direct grants-in-aid to help furnish food and
clothing to the unemployed, the aged, and the ill. The rest
was distributed to states to support work relief programs—for
every $3 within the state program, FERA donated $1. Harry
Hopkins, who headed this program, believed that, whereas
money helped people buy food, it was meaningful work that
enabled them to gain confidence and self-respect.
The New Deal Comes Under Attack
By the end of the Hundred Days, millions of Americans had
benefited from the New Deal programs. As well, the public’s
confidence in the nation’s future had rebounded. Although
President Roosevelt agreed to a policy of deficit spending—
spending more money than the government receives in rev-
enue—he did so with great reluctance. He regarded deficit
spending as a necessary evil to be used only at a time of great
economic crisis. Nevertheless, the New Deal did not end the
depression, and opposition grew among some parts of the
population.
D
MAIN IDEAMAIN IDEA
D
Evaluating
How did
the New Deal
support labor
organizations?
DEFICIT SPENDING
John Maynard Keynes, an influen-
tial British economist, promoted
the idea of deficit spending to
stimulate economic recovery. In
his view, a country should spend
its way out of a depression by
putting money into the hands of
consumers. This would make it
possible for them to buy goods
and services and thus fuel eco-
nomic growth. Therefore, even if a
government has to go deeply into
debt, it should spend great
amounts of money to help get
the economy growing again.
(See deficit spending on page R39
and Keynesian economics on page
R42 in the Economics Handbook.)
ECONOMICECONOMIC
Liberal critics argued that the New Deal did not go far enough to help the
poor and to reform the nation’s economic system. Conservative critics argued
that Roosevelt spent too much on direct relief and used New Deal policies to con-
trol business and socialize the economy. Conservatives were particularly angered
by laws such as the Agricultural Adjustment Act and the National Industrial
Recovery Act, which they believed gave the federal government too much control
over agriculture and industry. Many critics believed the New Deal interfered with
the workings of a free-market economy.
THE SUPREME COURT REACTS By the mid-1930s, conservative opposition to
the New Deal had received a boost from two Supreme Court decisions. In 1935, the
Court struck down the NIRA as unconstitutional. It declared that the law gave leg-
islative powers to the executive branch and that the enforcement of industry codes
within states went beyond the federal government’s constitutional powers to reg-
ulate interstate commerce. The next year, the Supreme Court struck down the AAA
on the grounds that agriculture is a local matter and should be regulated by the
states rather than by the federal government.
Fearing that further Court decisions might dismantle the New Deal, President
Roosevelt proposed in February 1937 that Congress enact a court-reform bill to
reorganize the federal judiciary and allow him to appoint six new Supreme Court
justices. This “Court-packing bill” aroused a storm of protest in Congress and the
press. Many people believed that the president was violating principles of judicial
independence and the separation of powers. As it turned out, the president got his
way without reorganizing the judiciary. In 1937, an elderly justice retired, and
Roosevelt appointed the liberal Hugo S. Black, shifting the balance of the
Court. Rulings of the Court began to favor the New Deal. (See NLRB v. Jones
and Laughlin Steel Corp. on page 502.) Over the next four years, because of
further resignations, Roosevelt was able to appoint seven new justices.
THREE FIERY CRITICS In 1934, some of the strongest conservative
opponents of the New Deal banded together to form an organiza-
tion called the American Liberty League. The American
Liberty League opposed New Deal measures that it believed
violated respect for the rights of individuals and property.
Three of the toughest critics the president faced, however,
were three men who expressed views that appealed to poor
Americans: Charles Coughlin, Dr. Francis Townsend, and Huey Long.
E
699
MAIN IDEAMAIN IDEA
E
Contrasting
How did
liberal and
conservative
critics differ in
their opposition to
the New Deal?
AnalyzingAnalyzing
CHANGING COURSE
With hopes of lessening opposition to his programs, Roosevelt
proposed a court reform bill that would essentially have
allowed him to “pack” the Court with judges supportive of the
New Deal. This cartoon shows Roosevelt as a sea captain
ordering a shocked Congress to change course.
SKILLBUILDER Analyzing Political Cartoons
1. What “compass” did Roosevelt want to change? Explain.
2. How does the cartoonist portray FDR’s attitude regarding
his power as president?
SEE SKILLBUILDER HANDBOOK, PAGE R24.
Father Charles
Coughlin speaks
to a radio
audience in 1935.
▼
700 CHAPTER 23
MAIN IDEA
2. TAKING NOTES
In a two-column chart, list problems
that President Roosevelt confronted
and how he tried to solve them.
Write a paragraph telling which
solution had the greatest impact,
and why.
CRITICAL THINKING
3. EVALUATING
Of the New Deal programs
discussed in this section, which do
you consider the most important?
Explain your choice. Think About:
• the type of assistance offered by
each program
• the scope of each program
• the impact of each program
4. EVALUATING LEADERSHIP
Do you think Roosevelt was wrong
to try to “pack” the Supreme Court
with those in favor of the New Deal?
Explain your answer.
5. DEVELOPING HISTORICAL
PERSPECTIVE
The New Deal has often been
referred to as a turning point in
American history. Cite examples
to explain why.
Solutions
•Franklin Delano Roosevelt
•New Deal
•Glass-Steagall Act
•Federal Securities Act
•Agricultural Adjustment
Act (AAA)
•Civilian Conservation
Corps (CCC)
•National Industrial
Recovery Act (NIRA)
•deficit spending
•
Huey Long
1. TERMS & NAMES For each of the terms and names below, write a sentence explaining its significance.
Every Sunday, Father Charles Coughlin, a Roman Catholic priest from a suburb of
Detroit, broadcast radio sermons that combined economic, political, and religious
ideas. Initially a supporter of the New Deal, Coughlin soon turned against
Roosevelt. He favored a guaranteed annual income and the nationalization of
banks. At the height of his popularity, Father Coughlin claimed a radio audience
of as many as 40–45 million people, but his increasingly anti-Semitic (anti-Jewish)
views eventually cost him support.
Another critic of New Deal policies was Dr. Francis Townsend, a physician and
health officer in Long Beach, California. He believed that Roosevelt wasn’t doing
enough to help the poor and elderly, so he devised a pension plan that
would provide monthly benefits to the aged. The plan found strong back-
ing among the elderly, thus undermining their support for Roosevelt.
Perhaps the most serious challenge to the New Deal came
from Senator Huey Long of Louisiana. Like Coughlin, Long was an
early supporter of the New Deal, but he, too, turned against Roosevelt.
Eager to win the presidency for himself, Long proposed a nationwide
social program called Share-Our-Wealth. Under the banner “Every
Man a King,” he promised something for everyone.
A PERSONAL VOICE HUEY LONG
“ We owe debts in America today, public and private, amounting to
$252 billion. That means that every child is born with a $2,000 debt
tied around his neck. . . . We propose that children shall be born in a
land of opportunity, guaranteed a home, food, clothes, and the other
things that make for living, including the right to education.”
—Record, 74 Congress, Session 1
Long’s program was so popular that by 1935 he boasted of having perhaps as
many as 27,000 Share-Our-Wealth clubs and 7.5 million members. That same year,
however, at the height of his popularity, Long was assassinated by a lone gunman.
As the initial impetus of the New Deal began to wane, President Roosevelt
started to look ahead. He knew that much more needed to be done to help the
people and to solve the nation’s economic problems.
Huey Long
Vocabulary
nationalization:
conversion from
private to
governmental
ownership
Problems
Terms & NamesTerms & NamesMAIN IDEAMAIN IDEA WHY IT MATTERS NOWWHY IT MATTERS NOW
•Eleanor Roosevelt
•Works Progress
Administration
(WPA)
•National Youth
Administration
•Wagner Act
•Social Security Act
The Second New Deal
included new programs
to extend federal aid and
stimulate the nation’s
economy.
Second New Deal programs
continue to assist homebuyers,
farmers, workers, and the elderly
in the 2000s.
The New Deal 701
One American’s Story
The Second New
Deal Takes Hold
Dorothea Lange was a photographer who documented American
life during the Great Depression and the era of the New Deal. Lange
spent considerable time getting to know her subjects—destitute
migrant workers—before she and her assistant set up their cameras.
A PERSONAL VOICE DOROTHEA LANGE
“ So often it’s just sticking around and remaining
there, not swooping in and swooping out in a cloud
of dust. . . . We found our way in . . . not too far
away from the people we were working with. . . .
The people who are garrulous and wear their heart
on their sleeve and tell you everything, that’s one
kind of person. But the fellow who’s hiding behind
a tree and hoping you don’t see him, is the fellow
that you’d better find out why.”
—quoted in Restless Spirit: The Life and Work of Dorothea Lange
Lange also believed that her distinct limp, the result of a childhood case of
polio, worked to her advantage. Seeing that Lange, too, had suffered, people were
kind to her and more at ease.
Much of Lange’s work was funded by federal agencies, such as the Farm
Security Administration, which was established to alleviate rural poverty. Her
photographs of migrant workers helped draw attention to the desperate condi-
tions in rural America and helped to underscore the need for direct relief.
The Second Hundred Days
By 1935, the Roosevelt administration was seeking ways to build on the programs
established during the Hundred Days. Although the economy had improved dur-
ing FDR’s first two years in office, the gains were not as great as he had expected.
Unemployment remained high despite government work programs, and produc-
tion still lagged behind the levels of the 1920s.
▼
Dorothea Lange
taking photo-
graphs on the
Texas plains
in 1934.
Nevertheless, the New Deal enjoyed widespread
popularity, and President Roosevelt launched a second
burst of activity, often called the Second New Deal or
the Second Hundred Days. During this phase, the pres-
ident called on Congress to provide more extensive
relief for both farmers and workers.
The president was prodded in this direction by his
wife, Eleanor Roosevelt, a social reformer who com-
bined her deep humanitarian impulses with great politi-
cal skills. Eleanor Roosevelt traveled the country, observ-
ing social conditions and reminding the president about
the suffering of the nation’s people. She also urged him
to appoint women to government positions.
REELECTING FDR The Second New Deal was under
way by the time of the 1936 presidential election. The
Republicans nominated Alfred Landon, the governor of
Kansas, while the Democrats, of course, nominated
President Roosevelt for a second term. The election
resulted in an overwhelming victory for the Democrats,
who won the presidency and large majorities in both
houses. The election marked the first time that most
African Americans had voted Democratic rather than Republican, and the first
time that labor unions gave united support to a presidential candidate. The 1936
election was a vote of confidence in FDR and the New Deal.
Helping Farmers
In the mid-1930s, two of every five farms in the United States were mortgaged,
and thousands of small farmers lost their farms. The novelist John Steinbeck
described the experience of one tenant farmer and his family.
A PERSONAL VOICE JOHN STEINBECK
“ Across the dooryard the tractor cut, and the
hard, foot-beaten ground was seeded field, and
the tractor cut through again; the uncut space
was ten feet wide. And back he came. The iron
guard bit into the house-corner, crumbled the
wall, and wrenched the little house from its foun-
dation so that it fell sideways, crushed like a bug.
. . . The tractor cut a straight line on, and the air
and the ground vibrated with its thunder. The ten-
ant man stared after it, his rifle in his hand. His
wife was beside him, and the quiet children
behind. And all of them stared after the tractor.”
—The Grapes of Wrath
FOCUSING ON FARMS When the Supreme Court struck down the AAA early in
1936, Congress passed another law to replace it: the Soil Conservation and
Domestic Allotment Act. This act paid farmers for cutting production of soil-
depleting crops and rewarded farmers for practicing good soil conservation meth-
ods. Two years later, in 1938, Congress approved a second Agricultural
Adjustment Act that brought back many features of the first AAA. The second
AAA did not include a processing tax to pay for farm subsidies, a provision of the
first AAA that the Supreme Court had declared unconstitutional.
702 CHAPTER 23
▼
Eleanor Roosevelt
visits a children’s
hospital in 1937.
A
MAIN IDEAMAIN IDEA
A
Summarizing
Why did
Roosevelt launch
the Second
Hundred Days?
▼
A poster
promotes the
movie adaption of
John Steinbeck’s
novel The Grapes
of Wrath.
The New Deal 703
History ThroughHistory Through
“Migrant Mother” became one of the
most recognizable symbols of the
Depression and perhaps the strongest
argument in support of New Deal
relief programs. Roy Stryker, who
hired Lange to document the harsh
living conditions of the time,
described the mother: “She has all
the suffering of mankind in her, but
all the perseverance too. A restraint
and a strange courage.”
▼
“MIGRANT MOTHER” (1936),
DOROTHEA LANGE
In Februar y 1936, Dorothea Lange
visited a camp in Nipomo, California,
where some 2,500 destitute pea
pickers lived in tents or, like this
mother of seven children, in lean-tos.
Lange talked briefly to the woman and
then took five pictures, successively
moving closer to her subjects and
directing more emphasis on the
mother. The last photo, “Migrant
Mother” (at right), was published in the
San Francisco News March 10, 1936.
Lange reflected upon her assignment. “I saw and approached
the hungry and desperate mother, as if drawn by a magnet. . . .
She said that they had been living on frozen vegetables from
the surrounding fields, and birds that the children killed. She
had just sold the tires from her car to buy food.”
▼
SKILLBUILDER Interpreting Visual Sources
1. What might the woman be thinking about?
Why do you think so?
2. Why do you think “Migrant Mother” was effective in
persuading people to support FDR’s relief programs?
SEE SKILLBUILDER HANDBOOK, PAGE R23.
The Second New Deal also attempted to help sharecroppers, migrant workers,
and many other poor farmers. The Resettlement Administration, created by exec-
utive order in 1935, provided monetary loans to small farmers to buy land. In
1937, the agency was replaced by the Farm Security Administration (FSA), which
loaned more than $1 billion to help tenant farmers become landholders and
established camps for migrant farm workers, who had traditionally lived in
squalid housing.
The FSA hired photographers such as Dorothea Lange, Ben Shahn, Walker
Evans, Arthur Rothstein, and Carl Mydans to take many pictures of rural towns
and farms and their inhabitants. The agency used their photographs to create a
pictorial record of the difficult situation in rural America.
Roosevelt Extends Relief
As part of the Second New Deal, the Roosevelt administration and Congress set
up a series of programs to help youths, professionals, and other workers. One of
the largest was the Works Progress Administration (WPA), headed by Harry
Hopkins, the former chief of the Federal Emergency Relief Administration.
The WPA set out to create as many jobs as possible as quickly as possible.
Between 1935 and 1943, it spent $11 billion to give jobs to more than 8 million
workers, most of them unskilled. These workers built 850 airports throughout the
country, constructed or repaired 651,000 miles of roads and streets, and put up
more than 125,000 public buildings. Women workers in sewing groups made 300
million garments for the needy. Although criticized by some as a make-work pro-
ject, the WPA produced public works of lasting value to the nation and gave work-
ing people a sense of hope and purpose. As one man recalled, “It was really great.
You worked, you got a paycheck and you had some dignity. Even when a man
raked leaves, he got paid, he had some dignity.”
In addition, the WPA employed many professionals who wrote guides to
cities, collected historical slave narratives, painted murals on the walls of schools
This photograph
by Margaret
Bourke-White
shows people
waiting for food in
a Kentucky bread
line in 1937.
704
▼
C
and other public buildings, and performed
in theater troupes around the country. At
the urging of Eleanor Roosevelt, the WPA
made special efforts to help women, minori-
ties, and young people.
Another program, the National Youth
Administration (NYA), was created specif-
ically to provide education, jobs, counseling,
and recreation for young people. The NYA
provided student aid to high school, college,
and graduate students. In exchange, stu-
dents worked in part-time positions at their
schools. One participant later described her
experience.
A PERSONAL VOICE HELEN FARMER
“ I lugged . . . drafts and reams of paper
home, night after night. . . . Sometimes I
typed almost all night and had to deliver it
to school the next morning. . . . This was a
good program. It got necessary work done. It gave teenagers a chance to work for
pay. Mine bought me clothes and shoes, school supplies, some movies and mad
money. Candy bars, and big pickles out of a barrel. It gave my mother relief from my
necessary demands for money.”
—quoted in The Great Depression
For graduates unable to find jobs, or youth who had dropped out of school,
the NYA provided part-time jobs, such as working on highways, parks, and the
grounds of public buildings.
Improving Labor and Other Reforms
In a speech to Congress in January 1935, the president declared, “When a man is
convalescing from an illness, wisdom dictates not only cure of the symptoms but
also removal of their cause.” During the Second New Deal, Roosevelt, with the
help of Congress, brought about important reforms in the areas of labor relations
and economic security for retired workers. (See the chart on page 706.)
IMPROVING LABOR CONDITIONS In 1935, the Supreme Court declared the
NIRA unconstitutional, citing that the federal government had violated legislative
authority reserved for individual states. One of the first reforms of the Second New
Deal was passage of the National Labor Relations Act. More commonly called the
Wagner Act, after its sponsor, Senator Robert F. Wagner of New York, the act
reestablished the NIRA provision of collective bargaining. The federal government
again protected the right of workers to join unions and engage in collective bar-
gaining with employers.
The Wagner Act also prohibited unfair labor practices such as threatening work-
ers, firing union members, and interfering with union organizing. The act set up the
National Labor Relations Board (NLRB) to hear testimony about unfair practices and
to hold elections to find out if workers wanted union representation.
In 1938, Congress passed the Fair Labor Standards Act, which set maximum
hours at 44 hours per week, decreasing to 40 hours after two years. It also set min-
imum wages at 25 cents an hour, increasing to 40 cents an hour by 1945. In addi-
tion, the act set rules for the employment of workers under 16 and banned haz-
ardous work for those under 18.
The New Deal 705
B
▼
The NYA helped
young people,
such as this
dental assistant
(third from left),
receive training
and job
opportunities.
MAIN IDEAMAIN IDEA
B
Evaluating
Do you think
work programs like
the WPA were a
valid use of
federal money?
Why or why not?
MAIN IDEAMAIN IDEA
C
Analyzing
Issues
Why was the
Wagner Act
significant?
706 CHAPTER 23
EMPLOYMENT PROJECTS PURPOSE
1933 Civilian Conservation Corps (CCC) Provided jobs for single males on
conservation projects.
1933 Federal Emergency Relief Administration Helped states to provide aid for the
(FERA) unemployed.
1933 Public Works Administration (PWA) Created jobs on government projects.
1933 Civil Works Administration (CWA) Provided work in federal jobs.
1935 Works Progress Administration (WPA) Quickly created as many jobs as
possible—from construction jobs to
positions in symphony orchestras.
1935 National Youth Administration (NYA) Provided job training for unemployed
young people and part-time jobs for
needy students.
BUSINESS ASSISTANCE AND REFORM
1933 Emergency Banking Relief Act (EBRA) Banks were inspected by Treasury Department
and those stable could reopen.
1933 Federal Deposit Insurance Corporation Protected bank deposits up to $5,000. (Today,
(FDIC) accounts are protected up to $100,000.)
1933 National Recovery Administration (NRA) Established codes of fair competition.
1934 Securities and Exchange Commission Supervised the stock market and eliminated
(SEC) dishonest practices.
1935 Banking Act of 1935 Created seven-member board to regulate the nation’s
money supply and the interest rates on loans.
1938 Food, Drug and Cosmetic Act (FDC) Required manufacturers to list ingredients in foods,
drugs, and cosmetic products.
FARM RELIEF AND RURAL DEVELOPMENT
1933 Agricultural Adjustment Administration Aided farmers and regulated crop
(AAA) production.
1933 Tennessee Valley Authority (TVA) Developed the resources of the
Tennessee Valley.
1935 Rural Electrification Administration (REA) Provided affordable electricity for
isolated rural areas.
HOUSING
1933 Home Owners Loan Corporation (HOLC) Loaned money at low interest to
homeowners who could not meet
mortgage payments.
1934 Federal Housing Administration (FHA) Insured loans for building and
repairing homes.
1937 United States Housing Authority (USHA) Provided federal loans for low-cost public housing.
LABOR RELATIONS
1935 National Labor Relations Board Defined unfair labor practices and established the
(Wagner Act) National Labor Relations Board (NLRB) to settle
disputes between employers and employees.
1938 Fair Labor Standards Act Established a minimum hourly wage and a maximum
number of hours in the workweek for the entire country.
Set rules for the employment of workers under 16 and
banned hazardous factory work for those under 18.
RETIREMENT
1935 Social Security Administration Provided a pension for retired workers and their
spouses and aided people with disabilities.
New Deal Programs
The New Deal 707
THE SOCIAL SECURITY ACT One of the most important achievements of the
New Deal was creating the Social Security system. The Social Security Act,
passed in 1935, was created by a committee chaired by Secretary of Labor Frances
Perkins. The act had three major parts:
• Old-age insurance for retirees 65 or older and their spouses. The insurance was a
supplemental retirement plan. Half of the funds came from the worker and
half from the employer. Although some groups were excluded from the sys-
tem, it helped to make retirement comfortable for millions of people.
• Unemployment compensation system. The unemployment system was funded
by a federal tax on employers. It was administered at the state level. The ini-
tial payments ranged from $15 to $18 per week.
• Aid to families with dependent children and the disabled. The aid was paid for
by federal funds made available to the states.
Although the Social Security Act was not a total pension system or a complete
welfare system, it did provide substantial benefits to millions of Americans.
EXPANDING AND REGULATING UTILITIES The Second New Deal also includ-
ed laws to promote rural electrification and to regulate public utilities. In 1935,
only 12.6 percent of American farms had electricity. Roosevelt established under
executive order the Rural Electrification Administration (REA), which financed and
worked with electrical cooperatives to bring electricity to isolated areas. By 1945,
48 percent of America’s farms and rural homes had electricity. That figure rose to
90 percent by 1949.
The Public Utility Holding Company Act of 1935 took aim at financial cor-
ruption in the public utility industry. It outlawed the ownership of utilities by
multiple holding companies—a practice known as the pyramiding of holding
companies. Lobbyists for the holding companies fought the law fiercely, and it
proved extremely difficult to enforce.
As the New Deal struggled to help farmers and other workers overcome the
Great Depression, it assisted many different groups in the nation, including
women, African Americans, and Native Americans.
D
Second New Deal
Group How Helped
MAIN IDEAMAIN IDEA
D
Drawing
Conclusions
Whom did
Social Security
help?
MAIN IDEA
2. TAKING NOTES
Create a chart similar to the one
below to show how groups such as
farmers, the unemployed, youth,
and retirees were helped by Second
New Deal programs.
Which group do you think benefited
the most from the Second New
Deal? Explain.
CRITICAL THINKING
3. EVALUATING DECISIONS
Why might the Social Security Act
be considered the most important
achievement of the New Deal?
Think About:
• the types of relief needed in the
1930s
• alternatives to government
assistance to the elderly, the
unemployed, and the disabled
• the scope of the act
4. INTERPRETING VISUAL SOURCES
Many WPA posters were created to
promote New Deal programs—in
this case the Rural Electrification
Administration. How does this
poster’s simplistic design convey
the program’s goal?
•Eleanor Roosevelt
•Works Progress
Administration (WPA)
•National Youth
Administration
•Wagner Act
•Social Security Act
1. TERMS & NAMES For each term or name, write a sentence explaining its significance.
708 CHAPTER 23
NLRB v. JONES AND LAUGHLIN
STEEL CORP. (1937)
ORIGINS OF THE CASE In 1936, the Jones and Laughlin Steel Corporation was charged
with intimidating union organizers and firing several union members. The National
Labor Relations Board (NLRB) found the company guilty of “unfair labor practices” and
ordered it to rehire the workers with back pay.
THE RULING The Supreme Court ruled that Congress had the power to regulate labor rela-
tions and confirmed the authority of the NLRB.
LEGAL REASONING
In the 1935 National Labor Relations Act, or Wagner Act, Congress claimed
that its authority to regulate labor relations came from the commerce clause
of the Constitution. Jones and Laughlin Steel argued that its manufacturing
business did not involve interstate commerce—it operated a plant and hired
people locally.
The Court disagreed. Although production itself may occur within one
state, it said, production is a part of the interstate “flow of commerce.” If
labor unrest at a steel mill would create “burdens and obstructions” to inter-
state commerce, then Congress has the power to prevent
labor unrest at the steel mill.
The Court also explained that the act went “no further
than to safeguard the right of employees to self-organization
and to select representatives . . . for collective bargaining.”
Departing from earlier decisions, the Court affirmed that
these are “fundamental” rights.
“ Long ago we . . . said . . . that a single employee
was helpless in dealing with an employer; that he was
dependent . . . on his daily wage for the maintenance of
himself and family; that, if the employer refused to pay
him the wages that he thought fair,
he was . . . unable to leave the
employ and resist arbitrary and
unfair treatment; that union was
essential to give laborers opportu-
nity to deal on an equality with
their employer.’’
As a result, the Wagner Act
was allowed to stand.
Chief Justice Charles
Evans Hughes
SCHECHTER POULTRY CORP. v.
UNITED STATES (1935)
The Court struck down the National Industrial
Recover y Act, a key piece of New Deal legislation.
RELATED CASES
U.S. CONSTITUTION, ARTICLE 1, SECTION 8
(COMMERCE CLAUSE)
“The Congress shall have Power . . . To regulate
Commerce with foreign Nations and among the sever-
al States.”
NATIONAL LABOR RELATIONS ACT (1935)
“The term ‘affecting commerce’ means . . . tending to
lead to a labor dispute burdening or obstructing com-
merce or the free flow of commerce.”
“It shall be an unfair labor practice for an employer . . .
to interfere with, restrain, or coerce employees in the
exercise of the rights [to organize unions].”
LEGISLATION
LEGAL SOURCES
▼
WHY IT MATTERED
The 1935 Wagner Act was one of the most important
pieces of New Deal legislation. Conservative justices
on the Supreme Court, however, thought New Deal
legislation increased the power of the federal govern-
ment beyond what the Constitution allowed. By the
time the Jones and Laughlin case reached the Court in
1937, the Court had already struck down numerous
New Deal laws. It appeared to many as if the Wagner
Act was doomed.
In February 1937, Roosevelt announced a plan to
appoint enough justices to build a Court majority in
favor of the New Deal. Critics immediately accused
Roosevelt of trying to pack the Supreme Court, thus
crippling the Constitution’s system of checks and bal-
ances.
Two months later, the Court delivered its opinion
in Jones and Laughlin and at about the same time
upheld other New Deal legislation as well. Most histo-
rians agree that the Court’s switch was not a response
to Roosevelt’s “Court-packing” plan, which already
seemed destined for failure. Nevertheless, the decision
resolved a potential crisis.
HISTORICAL IMPACT
The protection that labor unions gained by the
Wagner Act helped them to grow quickly. Union mem-
bership among non-farm workers grew from around
12 percent in 1930 to around 31 percent by 1950. This
increase helped improve the economic standing of
many working-class Americans in the years following
World War II.
Most significantly, Jones and Laughlin greatly broad-
ened Congress’s power. Previously, neither the federal
nor the state governments were thought to have suffi-
cient power to control the large corporations and hold-
ing companies doing business in many states. Now, far
beyond the power to regulate interstate commerce,
Congress had the power to regulate anything “essential
or appropriate” to that function. For example, federal
laws barring discrimination in hotels and restaurants
rest on the Court’s allowing Congress to decide what is
an “essential or appropriate” subject of regulation.
More recently, the Court has placed tighter limits
on Congress’s power to regulate interstate commerce.
In United States v. Lopez (1995), the Court struck
down a law that banned people from having hand-
guns near a school. The Court said Congress was not
justified in basing this law on its power to regulate
interstate commerce.
The New Deal 709
Choosing to work despite
the strike, a storekeeper
at the Jones and Laughlin
Steel Corporation tries to
pass through picket lines.
THINKING CRITICALLYTHINKING CRITICALLY
CONNECT TO HISTORY
1. Developing Historical Perspective Lawyers for Jones
and Laughlin said that the Wagner Act violated the Tenth
Amendment. Chief Justice Hughes said that since the act
fell within the scope of the commerce clause, the Tenth
Amendment did not apply. Read the Tenth Amendment
and then write a paragraph defending Hughes’s position.
SEE SKILLBUILDER HANDBOOK, PAGE R11.
CONNECT TO TODAY
2.
Visit the links for Historic Decisions of the Supreme Court
and read the opening sections of United States v. Lopez.
There, Chief Justice Rehnquist offers a summary of the
Court’s interpretation of the commerce clause over the
years. Summarize in your own words Rehnquist’s descrip-
tion of the current meaning of the commerce clause.
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