Chapter 26 The New Deal 1) Launching the New Deal Roosevelts first task was to alleviate the panic

c a) Restoring Confidencepartly helped by his ebullient personality (1) Roosevelts Personality: projected an infectious optimism that alleviated growing despair // friendly chats over the radio (first president to do so) explained his programs and plans to the peoplebuilt public confidence in administration won respect and friendship of many reporters, who never disclosed that he was completely paralyzed from leg down (2) Bank Holiday: closing of all American banks for four days until Congress considered banking-reform legislation Emergency Banking Act: conservative bill designed to protect larger banks from being dragged down by weakness of smaller ones // called for thorough reorganization for those in greatest troublepassed immediately **helped to dispel the panicmoney flowed back in when bank re-opened resulted in end of banking crisis (3) Economy Act: designed to convince conservative Americans that federal government was in safe, responsible hands proposed balancing federal budget by cutting government employee salaries and reducing pensions to veteranspassed immediately (4) Prohibition Repealed: Roosevelt legalized manufacture and sale of beer b) Agricultural AdjustmentAgricultural Adjustment Act was the first more comprehensive programreduced cop production to end agricultural surpluses and halt decreasing farm prices (1) AAA: Agricultural Adjustment Administration, told individual farmers how much they should produce // farmers subsidized up to point of parity limits set by producers of seven basic commodities helped bring rise in prices for farm commoditiesagricultural economy emerged more stable and prosperous Congress at first struck down limitations, but passed the Soil Conservation and Domestic Allotment Act, which allowed government to pay farmers to reduce production to conserve soil, etc. (2) Rural Electrification: Resettlement Administration and Farm Security Administration provided loans to help farmers relocate to better lands Rural Electrification Administration: worked to make electric power available to farmers through utility cooperatives c) Industrial RecoveryRoosevelt accepted an anti-deflation scheme that permitted trade associations to cooperate in stabilizing prices within their industries IF business leaders recognized workers rights and that income would rise (1) National Recovery Administration (NRA): upheld the National Industrial Recovery Actcreate jobs and add major program of public works spending under direction of Hugh Johnson, who called for businesses to accept a blanket code: minimum wage and maximum work hours and abolition of child labor also created codes that set flows below which no company could lower prices in search for competitive edge (a) Difficulties: codes were written poorly // administration of codes was difficult // large businesses made sure new regulations worked to their advantage codes sometimes actively and artificially raised floors for prices

most obvious of failure: industrial production declined after establishmentby 1934 was besieged by criticism (2) Section 7 (a): promised workers the right to form unions and engage in collective bargaining and encouraged many workers to join unions however contained no enforcement mechanisms Supreme Court ruled that Congress had unconstitutionally delegated legislation power to draft NRA codesstruck down the legislationRoosevelt denounced justicesbut it gave Roosevelt an excuse to end a failed experiment d) Regional Planningsome New Dealers wanted private interests to dominate planning process, but others believed government itself should be the chief planning agent (1) Tennessee Valley Authority (TVA): one of most celebrate accomplishments of New Deal progressive reformers had urged creation of dam for electricity on Tennessee River that was begun before WWI but left unfinished, opposition from utilities company too strong to overcome hostile to utilities increasedTVAauthorized to complete dam and build others in the region **generated and sold electricity to public at reasonable rates and redeveloped the area revitalized the region in many ways: improved water transportation, eliminated flooding, and provided electricity to thousands still made no serious efforts to challenge local customs and racial prejudices e) Currency, Banks, and the Stock MarketRoosevelt saw gold standard a major obstacleadministration manipulated value of dollar by establishing new, fixed standard for dollaraltered relationship btw public and private sectors, but didnt help economy much (1) Glass-Steagall Act: gave government authority to curb irresponsible speculation by banks, and established Federal Deposit Insurance Corporation Truth in Securities Act of 1933 passed to protect investors in stock marketrequired corporations issuing new securities to provide full and accurate information (2) SEC: Securities and Exchange Commission // police the stock market indication of how far financial establishment had fallen in public estimation (important financiers did not have the influence they had before) criminal trials of Wall Street figures further eroded public stature of financial community f) The Growth of Federal Reliefone of his first acts was establishment of Federal Emergency Relief Administration (FERA)provided cash grants to states to prop up bankrupt relief agencies (1) Civil Works Administration (CWA): put millions of people to work on temporary projectspumped money into an economy badly in need of it (2) Civilian Conservation Corps (CCC): designed to provide employment to millions of young men who could find no jobs in the cities largely restricted to white males but also had some for minorities and women (3) Mortgage Relief Responses: Farm Credit Administration: within two years refinanced 1/5 of all farm mortgages // Frazier-Lemke Farm Bankruptcy Act enabled some farmers to regain land // Home Owners Loan Corporation refinanced mortgages of over 1 million // Federal Housing Administration insured mortgages for new construction and home repairs 2) The New Deal in Transition by 1935 New Deal was target of fierce public criticismnot much improvementRoosevelt launched new program called Second New Deal a) Critics of New DealAmerica in general and corporate world had become irreconcilably hostile to the New Deal

(1) American Liberty League: formed by wealthiest Republican opponents who aroused public opposition to New Deals dictatorial policiesnot very effective more menacing opposition was group of dissident political movements that defied easy ideological classification three men succeeded in arousing national following: Dr. Francis Townshend rose from obscurity to lead more than 5 million members for plan for federal pensions for elderly (2) Townshend Plan: all Americans over 60 received monthly pensions of $200 that they must spendpumped money into economy attracted support of older men and women **public sentiment for it built support for Social Security system approved in 1935 (3) Charles E. Coughlin: achieved even greater renown for weekly sermons // later became known for sympathy for fascism and outspoken anti-semitism known primarily as the one who changed banking and currency systems through monetary reforms established his own political organization, the National Union for Social Justice (4) Huey Long: his popularity was the most alarming // rose through attacks on banks, oil companies, and utilities // had solid record of conventional progressive accomplishments, but also seen as a dictator after splitting with Roosevelt, advocated the Share-Our-Wealth Plan, which redistributed wealth by taking from rich and giving to poor (5) Share-Our-Wealth Society: attracted a large following, Long had chance for presidency through the third party Roosevelt had to do something dramatic to counter their strength b) The Second New Dealresponse to growing political pressure and continued economic crisis **most conspicuous change was presidency willing to attack corporate interestsHolding Company Act broke up the great utility holding companies tax reforms proposed by president established highest and most progressive peacetime tax rates in history (1) National Labor Relations Board: Supreme Court struck down National Industrial Recovery Act and invalidated Section 7(a)National Labor Relations Act of 1935 introduced (Wagner Act)provided with crucial enforcement mechanism, the National Labor Relations Board (NLRB) Wagner Act signed because president realized that workers were becoming a very important force c) Labor Militancyled to a powerful trade union movement because the factors previously impeding militancy vanished or grew weaker first became obvious in 1934, when they realized that without strong legal protection, most organizing drives would end in frustration was able to pick up speed after passing of Wagner Act (1) Industrial Unionism: a newer concept of labor organization that challenged the previous craft union (which was based on skilled workers) because it helped unskilled (the majority of workers now) all workers in a particular industry should be organized in single uniongreat increase in power attracted support of John L. Lewis, the leader of United Mine Workerstension btw Lewis and AFLLewis walks out of AFLcreated Committee on Industrial Organizations (2) CIO: Congress of Industrial Organizations, an organization directly rivaling AFL

d)

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f)

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expanded constituency of labor movement, more receptive to women and blacks, a more militant organization than AFL Organizing BattlesUnited Auto Workers (UAW), a preeminent auto union, employed a controversial and effective new technique for challenging corporate organization (1) Sit-Down Strike: employees simply sat down in plants without working or leaving males remained in factories while women provided support for them auto corporation relented when federal and state governments refused to call in guards to clear the strikers its apparent illegality aroused a lot of public opposition (2) Organized Labors Rapid Growth: corporations were beginning to lose power in putting a stop to strikesby 1941 10 million Americans were in unions and were beginning to be recognized by corporations Social Securitya system of federally sponsored social insurance for elderly and unemployed Social Security Act: provided assistance to elderly, or pension system: an income on retirement **crucial first step in building nations most important social program for elderly (1) Unemployment Insurance: made it possible for workers laid off from jobs to receive temporary government assistance // established limited system of federal aid to people with disabilities and program of aid to dependent children provided direct assistance based on need New Directions in Reliefsought to relieve immediate needs (1) WPA: Works Progress Administration // established system of work relief for unemployed larger in size and energy and imagination of its operationspumped needed money into the economy also gave relief to those whose occupations did not fit into traditional category, such as writers, painters, sculptors, and others (2) NYA: National Youth Administration provided work and scholarship assistance to high school and college-age men and women (3) Gender Influenced: welfare system helped men by concentrating mainly on work relief and pensions and unemployment insurance // for women was mainly cash assistance reflected assumption that men constituted bulk of paid work force and that women needed to be treated within context of family 1936 Referendumby mid-1936 economy was visibly revivingRoosevelt would win again (1) Alf Landon: the Republican candidate who had a pallid campaign // because Huey Long was assassinated in 1935 resulted in the greatest landslide in American history to that point (2) Electoral realignment: Democrats now controlled broad coalition of western and southern farmers, urban working class, poor and unemployed, black communities, traditional progressives, committed new liberalsmajority of electorate

3) The New Deal in Disarray after the election, the New Deal was in serious new difficulties a) The Court FightRoosevelt believed that the justices were too conservative and therefore would not approve of any program or reform (1) Court Packing: Roosevelt proposed general overhaul of federal court system and adding new justicesRoosevelt wanted to appoint new, liberal justices Conservatives were enraged, and his supporters were disturbed by his hunger for power

Supreme Court passed series of reformsCourt-packing seemed unnecessaryCongress defeated it **victory in making sure Court was not an obstacle to reforms, but also drove conservative Republican support from his measures b) Retrenchment and Recessionnational economy was slowly improvingRoosevelt wanted to cut WPAfragile boom collapsedconditions almost as bad as worst days in Great Depression (1) Roosevelt Recession: the recession of 1937 seemed direct result of administrations unwise decisiongovernment funds began pouring into economy once againeconomy improved (2) Temporary National Economic Committee (TNEC): commission that examined the concentration of economic power in Congress (3) Fair Labor Standards Act: established national minimum wage and 40 hour work week culmination of years of effort by women progressives (4) End of New Deal: came to an end in 1938 // Roosevelt was becoming more concerned with persuading nation to prepare for war 4) Limits and Legacies of the New Deal a) The Idea of the Broker StateNew Dealers had unintentionally created a broker state (1) Establishment of Broker State: elevated and strengthened new interest groups so they competed more effectively in national marketplace made federal government a supervisor in business competition by end of 1930s corporate businesses found themselves competing with increasingly powerful labor movementfederal government became protector of interest groups government assistance in broker state went to groups able to exercise enough power to demand itfarmers and workers won important protection b) African Americans and the New DealNew Deal did not assist African Americans much, but was fairly sympathetic to them Eleanor Roosevelt was responsible for one of first modern civil rights demonstrations (1) Black Cabinet: blacks were appointed to second-level positions by President Eleanor Roosevelt and others worked to include blacks1/4 of all blacks received government assistancemore than 90% were voting Democratic blacks saw that Roosevelt was not an enemy, but neither was he a champion of equality (2) Existing Discrimination Reinforced: certain acts did not aid the blacks, making it more discriminatory refused to make issue of race a significant part of its agenda c) The New Deal and the Indian Problemcontinued to have Indians assimilate into larger society and culture (1) John Collier: social worker who believed that Indians were not savages and whites were not superior promoted legislation that allow Indians the right to live in traditional ways (2) Indian Reorganization Act: restored to tribes right to own land, but most times Indians still possessed unwanted land and constituted poorest segment of population d) Women and the New Dealnot hostile but not helpful either (1) Symbolic Gains for Women: attaining positions in cabinet and federal government // partly because of Eleanor Roosevelt, a committed advocate of womens rights women limited in gainsmost emphasized on special protections for women instead of sexual equality, created womens special place in a male-dominated economy

(2) Prevailing Gender Norms Buttressed: New Deal relief agencies offered little employment for women e) The New Deal in the West and SouthWest and South received special attention and received more federal funds b/c the government programs created greatest impact there (1) Failure to Challenge Jim Crow: New Deal programs simply accepted existing racial and ethnic prejudices (2) New Deals Legacy in the West: federal government maintained greater and more visible bureaucratic presence in the West after Great Depression because South was least economically developed, it received a disproportional amount of economic development efforts **directed attention to economic condition of SouthNorth always saw South as backward and the nations number one economic problemsome wanted to modernize and develop the region f) The New Deal and National Economylargest criticism was failure to really revive economy and end the Great Depression (1) Lasting Effects: elevated workers to positions of more powerchallenge corporations // contributed to economic development of West and South (2) Federal Welfare State Established: new system marked historic break from governments reluctance to offer public assistance to needy citizens g) The New Deal and American PoliticsRoosevelt enhanced power of federal government over state government (1) New Expectations of Government: awakened in people more interest in economic matters and created increased expectations of government for the future