Chapter Introduction
Section 1: The First New Deal
Section 2: The Second New
Deal
Section 3: The New Deal
Coalition
Visual Summary
Can Government Fix
the Economy?
During the 1930s, New Deal
programs increased government
regulation of banking, industry,
and farming; gave greater rights
to workers; and provided
government aid to the
unemployed and senior citizens.
• What kind of problems do you
think government can solve?
• What difficulties can result
when the government tries to
regulate the economy?
The First New Deal
In what areas did the New
Deal attempt to make major
economic improvements?
The Second New Deal
How did the Second New
Deal assist unions, the
elderly, and the
unemployed?
The New Deal Coalition
What was the legacy of the
New Deal?
Roosevelt’s Rise to Power
Franklin D. Roosevelt was governor of
New York when he was elected
president in 1932, promising a New
Deal for the American people.
Roosevelt’s Rise to Power (cont.)
• After losing the 1920 election as the Democratic
vice presidential candidate, Franklin Delano
Roosevelt temporarily withdrew from politics.
– The next year he caught polio, but refused
to give in.
– In 1928, Roosevelt ran for governor of New
York.
– He won the election and oversaw the
creation of the first state relief agency to aid
the unemployed.
Roosevelt’s Rise to Power (cont.)
• Roosevelt’s popularity in New York paved the
way for his presidential nomination in 1932.
– His policies for ending the Depression
became known as the New Deal.
– On election day, Roosevelt beat Herbert
Hoover in a landslide.
The Hundred Days
Upon taking office, FDR launched the
New Deal by sending 15 major pieces
of legislation to Congress.
The Hundred Days (cont.)
• Although Roosevelt won the presidency in
November 1932, the country’s unemployed and
homeless had to endure another winter as they
waited for his inauguration.
– Some of the bank runs occurred because
people feared that Roosevelt would abandon
the gold standard and reduce the value of
the dollar in order to fight the Depression.
– In 38 states, governors declared bank
holidays to save the remaining banks.
The Hundred Days (cont.)
• By the day of Roosevelt’s inauguration, most
of the nation’s banks were closed.
– One in four workers was unemployed.
• Between March 9 and June 16, 1933—which
came to be called the Hundred Days—
Congress passed 15 major acts to resolve
the economic crisis.
– These programs made up what would later
be called the First New Deal.
The Hundred Days (cont.)
• To generate new ideas and programs,
Roosevelt deliberately chose advisers who
disagreed with each other.
– One group during the early years of his
administration supported the “New
Nationalism” of Theodore Roosevelt.
– A second group wanted government
planners to run key parts of the economy.
– A third group supported the “New Freedom”
of Woodrow Wilson.
Banks and Debt Relief
President Roosevelt took steps to
strengthen banks and the stock market
and to help farmers and homeowners
keep their property.
Banks and Debt Relief (cont.)
• Roosevelt knew the first thing he had to do
was restore confidence in the banking
system.
– The House of Representatives
unanimously passed the Emergency
Banking Relief Act after only 38 minutes of
debate.
– On March 12, sixty million people listened
to the first of many of Roosevelt’s “fireside
chats.”
Banks and Debt Relief (cont.)
– He assured people that their money was
safe in banks, and the next day, deposits
far outweighed withdrawals.
• Roosevelt listened to his advisers and
supported the Securities Act of 1933 and the
Glass-Steagall Banking Act.
– Congress also created the Securities and
Exchange Commission (SEC) to regulate
the stock market and
prevent fraud.
The First Hundred Days
Banks and Debt Relief (cont.)
– The Glass-Steagall Act created the Federal
Deposit Insurance Corporation (FDIC) to
provide government insurance for bank
deposits up to a certain amount.
• To help homeowners make their mortgage
payments, Roosevelt asked Congress to
establish the Home Owners’ Loan Corporation
(HOLC).
The First Hundred Days
Banks and Debt Relief (cont.)
– Congress also authorized the Farm Credit
Administration (FCA) to help farmers
refinance their mortgages.
The First Hundred Days
Farms and Industry
New Deal legislation tried to raise crop
prices and stabilize industry.
Farms and Industry (cont.)
• To further help the nation’s farmers, Secretary
of Agriculture Henry Wallace drafted the
Agricultural Adjustment Act.
– Administered by the Agricultural Adjustment
Administration (AAA), the government paid
farmers not to raise certain livestock, not to
grow certain crops, and not to produce dairy
products.
– The plan worked, but did not benefit
everyone, especially tenant farmers.
The TVA, 1940
Farms and Industry (cont.)
• The government turned its attention to
manufacturing in June 1933, when Roosevelt
and Congress enacted the National Industrial
Recovery Act (NIRA).
– Under the leadership of Hugh Johnson, the
National Recovery Administration (NRA) ran
the entire program.
– By the time the Supreme Court
declared the NRA unconstitutional
in 1935, it had already lost much
of its political support.
The TVA, 1940
Relief Programs
Programs such as the CCC, the PWA,
and the WPA provided jobs for some
unemployed workers.
Relief Programs (cont.)
• The most highly praised New Deal work
relief program was the Civilian
Conservation Corps (CCC).
– The CCC offered unemployed young men
18 to 25 years old the opportunity to work
under the direction of the forestry service
planting trees, fighting forest fires, and
building reservoirs.
Relief Programs (cont.)
• Congress also established the Federal
Emergency Relief Administration (FERA), led
by Harry Hopkins.
– In June 1933 Congress authorized another
relief agency, the Public Works
Administration (PWA) which put civilians to
work on government-funded construction
projects.
Relief Programs (cont.)
• Roosevelt authorized Hopkins to set up the
Civil Works Administration (CWA), since
FERA and the PWA weren’t reducing
unemployment significantly.
– The agency did provide jobs through the
winter, but Roosevelt insisted that it be
shut down the following spring due to the
large amount of money the agency spent.
Relief Programs (cont.)
• Perhaps the most important result of the first
New Deal was a noticeable change in the
spirit of the American people.
– Roosevelt’s actions had inspired hope and
restored Americans’ faith in their nation.
Which of the following did the Civil Works
Administration build or improve?
A. Airports
D. Schools
B
E. All of the above
A
0%
0%
E
C. Playgrounds
D
B. Roads
C
A. A
B. B
C. C
D. D
0%
E.0% E0%
Launching the Second New Deal
By 1935, the New Deal faced political
and legal challenges, as well as
growing concern that it was not ending
the Depression.
Launching the Second New Deal (cont.)
• Although New Deal programs had created
more than 2 million new jobs, more than 10
million workers remained unemployed, and the
nation’s total income was about half of what it
had been in 1929.
• Hostility toward Roosevelt came from both the
political right and the left.
• To pay for his programs, Roosevelt had started
deficit spending, and many business leaders
became greatly alarmed at the government’s
growing deficit.
Launching the Second New Deal (cont.)
• In August 1934 business leaders and antiNew Deal politicians from both parties joined
together to create the American Liberty
League.
• Three people who challenged Roosevelt were:
– Huey Long
– Father Coughlin
– Francis Townsend
Launching the Second New Deal (cont.)
• In 1935 Roosevelt launched a series of
programs now known as the Second
New Deal.
– Among these new programs was the
Works Progress Administration (WPA),
headed by Harry Hopkins.
– The WPA’s most controversial program
was Federal Number One, a program for
artists, musicians, theater people, and
writers.
Launching the Second New Deal (cont.)
• In May 1935, in Schechter Poultry Company
v. United States, the Supreme Court
unanimously struck down the authority of
the NRA.
– Roosevelt feared that the Court would
strike down the rest of the New Deal and
told Congress that they could not go home
until they passed his new bills.
Reforms for Workers and the Elderly
Roosevelt asked Congress to pass the
Wagner Act and Social Security to build
support among workers and older
Americans.
Reforms for Workers and the Elderly (cont.)
• In July 1935 Congress passed the National
Labor Relations Act (also called the Wagner
Act), which guaranteed workers the right to
organize unions and to bargain collectively.
– Congress also set up the National Labor
Relations Board (NLRB).
– The Wagner Act set up a process called
binding arbitration.
Reforms for Workers and the Elderly (cont.)
• The Committee for Industrial Organization
(CIO) set out to organize unions that
included all workers, skilled and unskilled, in
a particular industry.
– Union organizers used new tactics, such
as the sit-down strike.
– By using a sit-down strike, the United Auto
Workers (UAW) became one of the most
powerful unions in the U.S.
Union Membership, 1933–1940
Reforms for Workers and the Elderly (cont.)
• In 1938 the CIO changed its name to the
Congress of Industrial Organizations and
became a federation of industrial unions.
• After passing the Wagner Act, Congress
began work on one of America’s most
important pieces of legislation—the Social
Security Act.
– Although Social Security helped many
people, it initially left out many of the
neediest—farm and domestic workers.
Reforms for Workers and the Elderly (cont.)
– Social Security did establish the principle
that the federal government should be
responsible for those who, through no fault
of their own, were unable to work.
Roosevelt’s Second Term
Roosevelt was easily reelected, but the
New Deal lost momentum during his
second term due to his court-packing
plan and a new recession.
Roosevelt’s Second Term (cont.)
• Since the Civil War, African Americans had
been reliable Republican voters.
– However, in the 1930s, they became just
one part of a new Democratic coalition that
included farmers, industrial workers,
African Americans, new immigrants, ethnic
minorities, women, progressives, and
intellectuals.
Roosevelt’s Second Term (cont.)
• African Americans and women made some
modest gains during the New Deal.
– The president appointed several African
Americans to positions in his
administration, where they informally
became known as the Black Cabinet.
– FDR appointed the first woman to a
cabinet post, Secretary of Labor Frances
Perkins, and appointed many other
women to lower-level posts.
Roosevelt’s Second Term (cont.)
• In the election of 1936 the Republicans
nominated Alfred Landon.
– Roosevelt swept to victory in one of the
largest landslides in American history
• Although many people supported the New
Deal, the Supreme Court saw things
differently.
– In March 1937 Roosevelt sent Congress a
bill to increase the number of justices.
Roosevelt’s Second Term (cont.)
– The court-packing plan, as the press
called it, was FDR’s first serious political
mistake.
– The Senate quietly killed the bill without
bringing it to a vote.
– Roosevelt still achieved his goal of changing
the Court’s view of the New Deal.
Roosevelt’s Second Term (cont.)
• In 1937 Roosevelt’s reputation again
suffered when unemployment suddenly
surged.
– The recession of 1937 led to a debate
inside Roosevelt’s administration.
– Treasury Secretary Henry Morgenthau
favored balancing the budget and cutting
spending.
Roosevelt’s Second Term (cont.)
• Harry Hopkins, head of the WPA, and Harold
Ickes, head of the PWA, pushed for more
government spending using a new theory
called Keynesianism to support their
arguments.
– Keynesianism was based on the theories
of an influential British economist named
John Maynard Keynes.
Roosevelt’s Second Term (cont.)
• According to Keynesian economics, FDR
had done the wrong thing when he cut back
programs in 1937.
– Finally, in the spring of 1938, with no
recovery in sight, Roosevelt asked
Congress for money for the PWA, the
WPA, and other programs.
First Lady Eleanor Roosevelt demonstrated
strong sympathies toward which group?
A. Native Americans
B. Unskilled workers
C. African Americans
D. Immigrants
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
D
The New Deal Ends
The New Deal expanded federal power
over the economy and established a
social safety net.
The New Deal Ends (cont.)
• One of the president’s goals for his second
term was to provide better housing for the
nation’s poor.
– He responded with the National Housing
Act, establishing the United States
Housing Authority.
• He also sought to help the nation’s tenant
farmers.
What New Deal Programs Still Exist Today?
The New Deal Ends (cont.)
– Congress created the Farm Security
Administration to give loans to tenants so
they could purchase farms.
• The Fair Labor Standards Act was the last
major piece of New Deal legislation.
– By 1939, the New Deal era had come to
an end.
What New Deal Programs Still Exist Today?
The New Deal Ends (cont.)
• The New Deal had only limited success in
ending the Depression.
– As a whole, the New Deal tended to balance
competing economic interests.
• In taking on a mediating role, the New Deal
established what some have called the broker
state.
– This role has continued under the
administrations of both parties ever
since.
What New Deal Programs Still Exist Today?
The New Deal Ends (cont.)
• FDR’s programs also succeeded in creating
a safety net for Americans.
– By the end of the 1930s, many Americans
felt that the government had a duty to
maintain this safety net, even though
doing so required a larger, more expensive
federal government.
What New Deal Programs Still Exist Today?
Banking and Finances
• Emergency Banking Relief Act
regulated banks.
• Federal Deposit Insurance
Corporation insured bank
deposits.
• Farm Credit Administration
refinanced farm mortgages.
• Home Owners’ Loan Corporation financed
homeowners’ mortgages.
Agriculture and Industry
• Agricultural Adjustment
Administration paid farmers
to limit surplus production.
• National Industrial Recovery
Act limited industrial production
and set prices.
• National Labor Relations Act gave
workers the right to organize
unions and bargain collectively.
• Tennessee Valley Authority financed rural electrification
and helped develop the economy of a seven-state
region.
Work and Relief
• Civilian Conservation Corps
created forestry jobs for
young men.
• Federal Emergency Relief
Administration funded city
and state relief programs.
• Public Works Administration
created work programs to build public projects, such as
roads, bridges, and schools.
Social “Safety Net”
• Social Security Act provided
– income for senior citizens,
handicapped, and
unemployed
– monthly retirement benefit
for people over 65
Chapter Transparencies Menu
Why It Matters
Cause-and-Effect Transparency
Unit Time Line Transparency
Select a transparency to view.
polio
abbreviated form of poliomyelitis, an
acute infectious disease affecting the
skeletal muscles, often resulting in
permanent disability and deformity
gold standard
a monetary standard in which one
ounce of gold equals a set number of
dollars
bank holiday
closing of banks during the Great
Depression to avoid bank runs
fireside chats
radio broadcasts made by FDR to the
American people to explain his
initiatives
apparent
appearing to be fact as far as can be
understood
ideology
a system of thought that is held by an
individual, group, or culture
fundamental
being of central importance
deficit spending
government practice of spending
borrowed money rather than raising
taxes, usually in an attempt to boost
the economy
binding arbitration
process whereby a neutral party
hears arguments from two opposing
sides and makes a decision that both
must accept
sit-down strike
method of boycotting work by sitting
down at work and refusing to leave
the establishment
benefit
to be useful or profitable
finance
to provide money for a project
thereby
by that means
court-packing
the act of changing the political
balance of power in a nation’s
judiciary system whereby a national
leader, such as the American
president, appoints judges who will
rule in favor of his or her policies
broker state
role of the government to work out
conflicts among competing interest
groups
safety net
something that provides security
against misfortune; specifically,
government relief programs intended
to protect against economic disaster
recovery
an economic upturn, as after a
depression
mediate
an attempt to resolve conflict between
hostile people or groups
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