Chapter 25:
The New Deal
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Upon election in 1932, FDR promised the
American people a “New Deal” to help the
nation’s economy recover
He took several actions in his first 100 days to
alleviate the crisis
Bank Holiday: closed all banks to assess the health of the
banks, reopening those that were good
 FDIC: Federal Deposit Insurance Corporation, created in
June 1933, to protect people’s deposits up to $5000
 HOLC: Home Owners Loan Corporation helped those
struggling with their mortgages to stay in their homes
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Many other programs addressed the needy and job
creation
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FERA: Federal Emergency Relief Administration,
designed to give aid to state and local agencies in
help with the unemployed
CWA: Civil Works Administration created jobs
such as cleaning of parks
CCC: Civilian Conservation Corps, Roosevelt’s
favorite program
Sent young men to Army camps for training
 Provided housing and jobs to millions of men building
roads, parks, planting trees, etc.
 Earned $30/month, most of which was sent back to
families
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Roosevelt pushed to reform the economy so that a
large scale depression could be lessened or prevented
in the future
SEC: Securities and Exchange Commission regulates
the trade of stocks and bonds
NIRA: National Industrial Recovery Act, designed to
stimulate industrial growth
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Created the Public Works Administration (PWA) and National
Recovery Administration (NRA) to oversee the program
NRA found unconstitutional in 1935
Roosevelt based his thinking on the ideas of John
Maynard Keynes, a British economist
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Keynesian economic theory states that to lessen the shock of a
downturn, the government must spend money to stimulate the
economy
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AAA: Agricultural Adjustment Administration
created to help farmers
Paid farmers to REDUCE output, which lessened supply,
causing prices to rise
 As prices were raised, farmers made more money
 Also struck down by the Supreme Court in 1936
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TVA: Tennessee Valley Authority, created to
control flooding and build power plants
Built dams on rivers throughout the South (TN, AL, GA,
KY, and MS)
 Created large man-made lakes for recreation, powered
the rural areas of the South, and controlled flooding
 Overall, created to improve the low standards of
Southern living of the time
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Not everybody benefitted from the New Deal
Racial tensions were made worse by the Great Depression
Roosevelt did not endorse civil rights legislation, most notably, an
anti-lynching law proposed by NAACP
 However, FDR did appoint many blacks to government positions,
known as the “Black Cabinet”
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Eleanor Roosevelt resigned her position in the Daughters of
the American Revolution after black singer Marian
Anderson was denied performance at DAR’s music hall
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Mrs. Roosevelt arranged for Anderson to perform a free concert at
the Lincoln Memorial, which 75,000 attended, in 1939
Native Americans suffered greatly, but Roosevelt addressed
concerns
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Indian Reorganization Act of 1934 reversed the Dawes Act and
returned tribal rule, encouraged education, and preservation of
Native culture
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Many were opposed to FDR’s New Deal programs
Some of the more prominent ones were Dr. Francis
Townsend, Charles Coughlin and Huey Long
Townsend called for a $200/month pension to all seniors,
requiring it to be spent in 30 days
 Coughlin, a radio priest, wanted the government to take
over all banks and return to the silver standard
 Long’s ideas were the most radical
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 Proposed the Share-Our-Wealth program
 High taxes on the rich would guarantee a minimum income
for all people and a home
 Gained popular support, but many saw him as trying to
become a dictator
 Killed by an assassin in 1935, ending the idea
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Elections in 1934 gave Democrats more power and the
ability to pass more reform programs
These programs became known as the Second New Deal
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WPA: Works Progress Administration created public sector jobs,
such as building streets, airports, bridges, etc.
NYA: National Youth Administration granted part time jobs to
high school and college students
Social Security Act: provided unemployment insurance, retired
pensions, and assistance people with disabilities and to families
where male workers had died
Revenue Act of 1935: raised taxes on the rich
Many other acts were passed as well
The Second New Deal helped catapult FDR to a second term
in the election of 1936
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Democrats also made gains in both houses of Congress
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Because the Court had struck down so many laws
passed by FDR and Democrats, he set out to
“reform” the court
He asked Congress to allow him to appoint 6 more
justices, on top of the 9 already in place
Many, Republicans and Democrats, accused FDR
of trying to “pack” the courts with justices
favorable to his views
Some even felt FDR was acting like a dictator
 This would upset the balance of powers in the gov’t
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However, by 1945, enough justices died or retired
that FDR was able to nominate 8 new justices
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Many laws, including the NIRA were ruled unconstitutional
Other laws were passed to counteract
Wagner-Connery Act: guaranteed the right to unionize and
collectively bargain
AFL still fought for workers, but a new union, the Congress of
Industrial Organizations (CIO) formed as well
 Led to many strikes, such as the GM strike of 1936-37
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 Workers held a sit down strike, where they didn’t leave the plant
 Stayed on strike for 6 weeks before GM gave in to demands and
allowed workers to organize
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Farmers continued to limit production and were also
granted various types of aid
However, a recession hit in 1937 and FDR lost a great deal of
support for his programs, to the point that he do not
propose any more major programs
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Many people migrated to California during the
Depression looking for work
This mass migration was caused by the Dust Bowl
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A severe drought in the Great Plains occurred during the 1930s
Winds picked up the topsoil and blew it away
It was so severe that ships hundreds of miles away at sea
reported seeing dust clouds
Many packed up their belongings and headed west on
Route 66
Competition for jobs in CA was fierce, and people,
especially Mexicans and Filipinos, struggled mightily
This life has been preserved in thousands of pictures
from the time period, most famously by Dorothea
Lange
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Hired by the government to document the life
of migrant workers in California
Published thousands of photographs that
revealed to the world the suffering of people
during the Depression
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The New Deal provided millions of jobs to people
It also helped keep kids in school, improving
education of the nation
However, critics say that it created a welfare state
that exists today and severe deficit spending
Critics also say that the president has too much
power because of the New Deal
Supporters say that it was necessary to expand
government to prevent another Great Depression
Many aspects exist today, such as the FDIC, SEC,
TVA and Social Security
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Part of the Works Progress administration was to put artists,
authors, actors, etc. to work
Throughout the Depression and New Deal, the WPA helped
produce thousands of works of writing, music, art, and
theatre
Several famous authors depicted Depression life in their
works
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John Steinbeck’s The Grapes of Wrath
Zora Neale Hurston’s Their Eyes Were Watching God
Margaret Mitchell’s Gone with the Wind
Movie studios were also hard at work, creating masterpieces
loved to this day
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The Wizard of Oz
Gone with the Wind
Mr. Smith Goes to Washington
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Different types of music gained popularity in the 1930s
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Country: borrowed from southern folk music
Gospel: cross of jazz and spiritual
Swing: jazz played by big bands, smoother and easier to dance
to
Painters created dozens of masterpieces during the
Depression, none more well known, however, than
Grant Wood’s American Gothic
The decade closed out with the United States still not
fully recovered from the Depression, but that would all
change with the outbreak of World War II in 1939 and
the American entry to the war in 1941