Chapter 10 Notes McGraw Hill-Smith
I.
THE ELECTION OF 1932
Roosevelt’s Rise to Power
What qualities make an effective leader?
Franklin D. Roosevelt

Early Life: Franklin Delano Roosevelt came from a privileged background and he worked hard to fight for what
he believed in. He attended Harvard and Columbia Law School.

Politics: In 1910 he decided to enter politics and was elected to the New York Senate. There he earned a
reputation as a progressive reformer. In 1920, he won the vice-presidential nomination for the Democratic Party.
However, he and presidential candidate James M. Cox were defeated in the election by Warren G. Harding. After
the loss, Roosevelt withdrew from politics.

Polio: A year later, he was stricken with polio. Roosevelt fought against the disease by maintaining a vigorous
exercise program. By 1928, he reentered politics. Roosevelt ran for governor of New York and narrowly won.
When he ran for re-election two years later, he won in a landslide.
A. The Republicans nominated Herbert Hoover to run for a second term as president. The Democrats
selected New York Governor, Franklin Delano Roosevelt. Roosevelt became the first to deliver an
acceptance speech to a nominating campaign.
B. Roosevelt’s policies to end the depression became known as the New Deal. Roosevelt won the
election in a landslide.
C. Roosevelt came from a wealthy New York family and was educated at Harvard and Columbia Law
School. He was a distant cousin of President Theodore Roosevelt. Franklin married Theodore’s niece,
Eleanor.
D. Roosevelt’s political career began in 1910, with a seat in the New York State Senate where he
supported progressive reform and opposed party bosses. He was appointed assistant secretary of the navy
by Woodrow Wilson. In 1920 he caught polio, a paralyzing disease with no cure. Roosevelt did not give
in to the crippling disease. He relied on his wife, Eleanor, to keep his name prominent in politics.
E. Roosevelt narrowly won the race for New York governor. During his term as governor, Roosevelt used
government power to help people deal with the economic challenges of the time. His struggle with polio
made people feel he could somehow understand their hardships. His popularity in New York paved the
way for his run for president.
Discussion Question
What did Americans see in Roosevelt?
How do you think contracting polio changed Roosevelt? It made him more determined. Having to fight against
something as difficult as polio, he may have found other tasks much easier and more manageable.
How do you think a progressive reformer might respond to an economic crisis? Since progressives believed in
assisting the disaffected and in government accountability to the people, a progressive reformer would most likely believe
in relief programs for those hardest hit by the Depression.
Election of 1932

The Opponents The Republican Party nominated Herbert Hoover for a second term as president. The
Democratic Party turned to Franklin Roosevelt, who pledged a “new deal for the American people.” His policies for
dealing with the Depression from then on were known as the New Deal.

Hoover’s Platform Hoover supported dramatic cutbacks in federal spending. He promoted high tariffs such as
the Hawley-Smoot Tariff, thinking foreign competition would hurt American sales. He thought too much
government aid or assistance would make the people dependent on it.

Roosevelt’s Platform Roosevelt promoted a competitive tariff that raised revenue. He pushed for reform in both
the financial and the banking industries. He favored programs for farmers and saw a necessity for immediate
government assistance.

The Results Roosevelt won in a landslide. The American people voted for a change in direction from the policies
of Hoover. They wanted the New Deal.
Chapter 10 Notes McGraw Hill-Smith
Roosevelt stated that the Republicans had not only failed in policy but had also failed in “national vision.”
What did he mean by this? He meant that the Republicans offered no optimism and no hope for the American people.
Roosevelt received almost 58 percent of the popular vote. Why do you think most people voted for him rather
than Hoover? People may have been disenchanted with Hoover and felt that the country needed a change. People may
have thought Roosevelt offered hope and was willing to take direct action to address the nation’s economic problems.
The Hundred Days
Roosevelt Is Inaugurated:
A. Franklin Roosevelt won the November 1932 presidential election, but his inauguration would not
occur until March 1933. During this time, unemployment continued to rise, bank runs increased, and
people began converting their money into gold.
B. Some bank runs occurred out of fear that Roosevelt would end the gold standard, which would
reduce the value of the dollar. At that time, an ounce of gold equaled a set number of dollars. To reduce
the value of the dollar, the United States would have to stop exchanging dollars for gold.
C. People began taking gold and currency out of banks, resulting in over 4,000 banks collapsing by
March 1933. Many governors declared bank holidays, which closed the remaining banks before bank
runs could put them out of business.
Discussion Question
A. Why did bank runs occur before Roosevelt’s inauguration?
REFORM AND RECOVERY
First Hundred Days
A. Between March 9 and June 16, 1933, referred to as the Hundred Days, Roosevelt sent many bills to
Congress. Congress passed 15 major acts to help the economic crisis. These programs made up the First
New Deal.
B. To generate new ideas and New Deal programs, Roosevelt put together a group of advisers in the
fields of academia, business, agriculture, government, law, and social work.
C. Roosevelt’s advisers were divided into three main groups. The first group supported the “New
Nationalism” of Theodore Roosevelt and believed government and business should work together to
manage the economy. The second group distrusted big business and wanted government planners to run
key parts of the economy. The third group supported the “New Freedom” of Woodrow Wilson and felt it
was the government’s responsibility to restore competition to the economy.
Discussion Question
Why did Roosevelt choose advisers with differing views?

Run on Banks Roosevelt’s inauguration started a run on banks by depositors who feared their savings would
lose value. By March of 1933, more than 4,000 banks had collapsed. Roosevelt pushed the Emergency Banking
Relief Act through Congress, which helped establish financially sound banks.

The Securities Act Roosevelt supported the Securities Act, which required investment companies to provide
truthful and complete information to their investors.

Glass-Steagall Act Roosevelt also supported the Glass-Steagall Act to prohibit commercial banks from operating
as investment banks, one of the causes of financial crises that led to the stock market collapse. Glass-Steagall
also created the Federal Deposit Insurance Corporation (FDIC), which insured bank deposits.

Hundred Days Benchmark On March 12, 1933, Roosevelt gave his first “fireside chat” to reassure the public
that banks were the safest place to keep their money. From that point until June 1933, Roosevelt continued to
push act after act through Congress while continuing to communicate with Americans. His accomplishments in his
first hundred days in office, which came to be called the First New Deal, became a benchmark for subsequent
administrations.
Why do you think Roosevelt’s radio addresses to the American people were called “fireside chats”? Were
designed for people to listen to in their homes, gathered around their radios. The name conjures an image of comfort and
home.
Chapter 10 Notes McGraw Hill-Smith
Why did President Roosevelt take his message about the banks directly to the people that Roosevelt knew that
fear fueled the banking crisis. He wanted to reassure the people
How did the separation of commercial and investment banks protect depositors? It kept commercial banks from
being able to risk depositors’ money in the stock market. Previously, if that money were lost, it was the depositor who was
forced to deal with it. The separation of the two banks prohibited these risks
Why was the establishment of the FDIC reassuring to the American people? That by insuring the deposits of a
bank, the FDIC ensured that Americans would not lose their savings even if a bank did fail
Banks and Debt Relief
Fixing the Banks and the Stock Market (pages 683–685)
A. When Roosevelt took office, he knew the first thing he needed to do was to restore confidence in the
banking system. He called a national bank holiday and called Congress into special session.
B. Congress passed the Emergency Banking Relief Act, which required federal examiners to survey the
nation’s banks and issue Treasury Department licenses to financially sound banks. In Roosevelt’s first
“fireside chat,” where he spoke on the radio directly to the people, he assured Americans that the banks
were now secure. The following day deposits in every city outweighed withdrawals, ending the banking
crisis.
C. New regulations for banks and the stock market were implemented with the Securities Act of 1933 and
the Glass-Steagall Banking Act. Under the Securities Act of 1933, companies that sold stocks and bonds
had to provide complete and truthful information to investors.
D. The Securities and Exchange Commission (SEC) was created to regulate the stock market and
prevent fraud.
E. The Glass-Steagall Act separated commercial banking from investment banking. It no longer allowed
depositors’ money to be risked by speculating on the stock market. The act created the Federal Deposit
Insurance Corporation (FDIC) that provided government insurance for bank deposits up to a certain
amount.
Discussion Question
How did the FDIC change public opinion of the banking system?
Debt Relief


FDIC Glass-Steagall also created the Federal Deposit Insurance Corporation (FDIC), which insured bank deposits.

HOLC After addressing banking problems, Roosevelt supported programs to help citizens address debt problems.
Congress established the Home Owners’ Loan Corporation (HOLC) to help home owners facing foreclosure.
Government-backed mortgages with lower interest rates and better terms became available to employed home
owners.

FCA The Farm Credit Association was similar to HOLC and put the government in the role of lending banks, which
had been reluctant to lend money to farmers over preceding years. Helping farmers refinance their mortgages
saved many farms from foreclosure.
SEC The Securities and Exchange Commission (SEC) was established to monitor stock market investments and
protect against illegal actions by investment banks.
Did getting a HOLC loan ensure a home owner would keep his or her home? Explain. HOLC loan restructured
home loans, making them easier to pay on time.
Why do you think banks had been reluctant to lend money to farmers? Surplus crops had lowered income for
many farmers. That coupled with the extended drought in the Midwest made lending money to farmers a poor risk for
banks.
Farms and Industry
Managing Farms and Industry
A. Roosevelt asked Congress to pass the Agricultural Adjustment Act—a plan that paid farmers not to
raise certain crops to lower crop production. The act was administered by the Agricultural Adjustment
Administration (AAA). While the plan reduced production, increased prices, and helped some farmers,
thousands of tenant farmers were unemployed and homeless. Large commercial farmers who raised one
crop profited more than small farmers who raised several products.
Chapter 10 Notes McGraw Hill-Smith
B. The National Industrial Recovery Act (NIRA) suspended antitrust laws and allowed business, labor,
and government to cooperate in setting up voluntary rules, known as codes of fair competition, for each
industry. The program was run by the National
Recovery Administration (NRA), and it urged consumers to buy only from companies who signed
agreements with the NRA. The gains of the NRA were short-lived and actually caused industrial
production to fall. It was declared unconstitutional by the Supreme Court in 1935.
Discussion Question
What were codes of fair competition?
Providing Debt Relief
A. Several policies were introduced by Roosevelt to help Americans deal with their debt.
B. The Home Owners’ Loan Corporation (HOLC) bought the mortgages of homeowners behind on
payments and restructured them with longer terms of repayment and lower interest rates. The HOLC gave
loans only to those employed. It foreclosed on property if payment could not be made. The result was
100,000 foreclosures. However, the HOLC refinanced 1 out of every 5 mortgages in the United States.
C. The Farm Credit Administration (FCA) was established to help farmers refinance their mortgages.
While the FCA loans helped many farmers in the short term, the loans may have slowed overall economic
recovery by giving money to poor inefficient farmers instead of to businesses.
Discussion Question
How did the HOLC and the FCA help provide debt relief?
Recovery

Farming Recovery Roosevelt also pushed for legislation aimed at overall economic recovery in agriculture and
industry. The Agricultural Adjustment Act (AAA) addressed the oversupply problem among farmers by giving
government funds to farmers who did not grow certain crops or raise certain livestock. Farmers were also paid to
leave acres of land fallow. Over time, farm surpluses dropped and prices rose, which increased farmers’ income.

Industrial Recovery The government also passed the National Industrial Recovery Act (NIRA) to help both labor
and management. The NIRA set prices and wages, and limited workers’ hours. It also allowed unions into
workplaces. NIRA was unpopular with employers. Industrial production actually fell during the NIRA.
Who might have suffered as a result of the AAA? Consumers who were struggling to make ends meet were now
forced to pay higher prices for basic food staples
Why would NIRA have been unpopular with employers? They were obligated to pay certain wages and to allow
unions to bargain for employees; thus they felt the legislation favored labor and not management
Relief Programs
Spending and Relief Programs
A. Roosevelt supported a series of government agencies to begin work programs for the unemployed.
B. The Civilian Conservation Corps (CCC) gave unemployed men aged 18 to 25 the opportunity to
work with the national forestry service planting trees, fighting forest fires, and building reservoirs. By the
time it closed in 1942, the CCC had employed three million men.
C. The Federal Emergency Relief Administration (FERA) was created to channel money to help state and
local agencies fund relief projects.
D. In 1933 Congress authorized the Public Works Administration to begin a series of construction
projects, creating additional jobs.
E. Harry Hopkins, the head of FERA, set up the Civil Works Administration (CWA), which hired
workers directly and put them on the government’s payroll. It was shut down when Roosevelt became
fearful of the amount of money spent on the program.
F. The most important aspect of Roosevelt’s New Deal was the change in the spirit of the American
people. People became hopeful and optimistic, and their faith in America was restored.
Why did Roosevelt want Congress to establish work programs for the unemployed?
Chapter 10 Notes McGraw Hill-Smith
Unemployment Relief

CCC The Civilian Conservation Corps (CCC) paid young men $30 a month to plant trees, fight fires, and build
reservoirs. The CCC also offered literacy programs.

FERA The Federal Emergency Relief Administration (FERA) provided federal funds for job creation projects at
state and local levels.

PWA The Public Works Administration (PWA) provided funds to construction companies for large-scale projects
from highways to dams to government facilities. Companies hired workers and were prohibited from
discriminating against minorities.

CWA The Civil Works Administration (CWA) hired workers to build or improve roads, schools, airports, and parks.
However, Roosevelt eventually shut down the CWA because he did not want people to become accustomed to the
federal government providing jobs.

New Deal Successes New Deal legislation did not solve the economic problems, but they reflected Roosevelt’s
progressive beliefs that government should play a role in helping individuals. The New Deal helped restore faith in
government.
How did the literacy programs of the CCC help in the overall job creating area? Young men who were able to read
and write would be eligible for a wider range of jobs once the economy recovered
Why do you think Roosevelt was concerned about people relying on the government to create jobs? It is not the
job of the government in a capitalistic economy to supply jobs. It is the job of industry. Once people grew accustomed to
these jobs, they might permanently expect the government to provide them and this would harm the industrial growth of
the nation.
Launching the Second New Deal
Challenges to the New Deal
A. Support of Roosevelt and his New Deal began to fade in 1935. The effectiveness of the New Deal was
questioned by right and left wing politicians.
B. Roosevelt used deficit spending to pay for his programs. He abandoned a balanced budget and
borrowed money to pay for his programs.
C. The American Liberty League was created as business leaders and anti-New Deal politicians from
both parties organized to oppose the New Deal.
D. Left wing Democratic senator Huey Long proposed taking property from the rich and dividing it up
amongst the poor. It was believed that if he ran as a third party candidate, he would take 10 percent of
Roosevelt’s vote, possibly enough for a Republican victory.
E. Father Charles Coughlin, a Catholic priest in Detroit, gave further support to Huey Long through his
popular radio broadcast.
F. Dr. Francis Townsend, a former public health official, proposed that the federal government pay
citizens over the age of 60 a pension of $200 a month. This would increase spending and create additional
jobs for younger people.
Discussion Question
How did the right wing and left wing politicians feel about Roosevelt’s New Deal?
Background Criticisms of the New Deal

Criticism from the Right Conservatives criticized Roosevelt for abandoning a balanced budget and borrowing
money. Many business leaders were concerned by the growing deficit. Concerns about federal interference in
local matters also animated the right, as did complaints that businesses were burdened by too many regulations.

Criticism from the Left Liberals criticized Roosevelt for not doing enough to help Americans. Among these
critics were:
o Huey Long Long’s “Share Our Wealth” plan proposed guaranteed incomes, pensions to people aged 60
and older, veterans’ benefits, and large increases in taxes.
o Father Coughlin A popular radio personality, he blamed the greed of bankers for causing the
Depression. He criticized Roosevelt’s oversight of banks, despite the regulations passed on the first
hundred days.
o Dr. Francis Townsend Townsend criticized Social Security benefits as insufficient and complained that it
excluded people who had not worked and paid taxes under the Social Security program.
Chapter 10 Notes McGraw Hill-Smith

Roosevelt’s Response Roosevelt did not try to please most conservatives, since they were not usually part of
his voting base. To please liberals, he created a jobs program, the Works Progress Administration (WPA), to
improve public works. This began the Second New Deal.
How could the criticisms of Roosevelt from the right be stated? Roosevelt’s policies resulted in too much spending
and too much control at the federal level
How could the criticisms of Roosevelt from the left be stated? Roosevelt spent too little federal money and did not
do enough to rein in big business and the banks.
Launching the Second New Deal
A. In 1935 Roosevelt’s second New Deal began with a series of programs and reforms to speed up
recovery and provide economic security to every American. Roosevelt hoped the plan would increase his
chances of being re-elected in 1936.
B. The Works Progress Administration (WPA) was a federal agency headed by Harry Hopkins. It
spent $11 billion over several years, creating jobs for workers. It’s most controversial aspect was offering
work to artists, musicians, theater people, and writers.
C. In the Supreme Court case Schechter v. United States, the court struck down the National Industrial
Recovery Act. The Court ruled that the Constitution did not allow Congress to delegate its powers to the
executive branch. It ruled the NIRA codes unconstitutional.
D. Roosevelt feared that the Court would strike down the New Deal. He ordered Congress to remain in
session until his new bills were passed. This was nicknamed the “second hundred days” by the press.
Discussion Question
Why did Roosevelt plan a Second New Deal?
Reforms for Workers and Senior Citizens
Second New Deal Programs

WPA The Works Progress Administration (WPA) was the largest public works program of the New Deal. Among
the jobs created were positions for writers, artists, and musicians.

The Wagner Act This 1935 legislation allowed workers to vote by secret ballot to determine whether they
wanted to unionize. It also established an arbitration process to judge employee-employer disputes and
investigate unfair practices.

The Social Security Act This legislation allowed retired or unemployed workers to receive benefits from a tax
paid to the federal government. It affirmed the longstanding progressive principle that the federal government
was responsible for the welfare of all citizens.
Why did the Social Security program require workers and employers to pay into the program before they
qualified for payments? This was required to fund it and to give recipients the sense they had earned the benefits.
Why do you think the programs of the First New Deal dealt mainly with institutions rather than
individuals? The economy was so badly damaged by the Great Depression that only large programs dealing with banking,
agriculture, and industry could save it from complete collapse
What was the difference between the Public Works Administration in the First New Deal and the Works
Progress Administration in the Second New Deal? Both were projects focused on improving public works, but the
PWA awarded money to construction companies to hire workers and the WPA hired workers directly.
III. The Rise of Industrial Unions
A. New labor legislation was created because Roosevelt believed in high union wages to allow more
spending power to boost the economy.
B. In July of 1935, the National Labor Relations Act (Wagner Act) was passed, guaranteeing workers the
right to organize unions without employer interference. The law set up the National Labor Relations
Board (NLRB), which organized factory elections by secret ballot to determine if workers wanted to
form a union. Binding arbitration was also set up, in which a neutral party would listen to both sides and
decide the issue. This gave dissatisfied union members a process to voice their complaints.
C. In 1935 the Committee for Industrial Organization (CIO) was formed to organize industrial unions.
Chapter 10 Notes McGraw Hill-Smith
D. After two union men were demoted at the General Motors auto-body plant in Cleveland, Ohio,
workers protested with a sit-down strike where they stopped working but refused to leave the plant.
Workers at the company’s plant in Flint, Michigan, did the same. Violence broke out, and finally the
company gave in. The United Auto Workers (UAW) was formed and quickly became one of the most
powerful unions in the United States.
Why did President Roosevelt and other Democrats push new labor legislation?
IV. The Social Security Act
A. The Social Security Act became law in 1935, providing security for the elderly, unemployed workers,
and other needy people. The bill would provide a monthly retirement benefit and unemployment
insurance. Workers earned the right to receive the benefits by paying premiums.
B. Social Security helped many people, but initially it left out many of the neediest members of society,
such as farmers and domestic workers.
Discussion Question
What was the purpose of the Social Security Act?
Roosevelt’s Second Term
A. Millions of voters owed their jobs, homes, and bank accounts to the New Deal. By the election of
1936, Democratic Party membership shifted from mainly white Southerners to include farmers, laborers,
African Americans, new immigrants, ethnic minorities, women, progressives, and intellectuals. First lady
Eleanor Roosevelt spoke with many people from these various groups, and she persuaded her husband to
address some of their concerns in his New Deal programs.
B. Roosevelt’s Secretary of Labor, Frances Perkins, was the first woman appointed to a cabinet post.
C. Roosevelt won the 1936 election in one of the biggest landslides in American history.
D. The Supreme Court did not support the president’s New Deal programs. In January
1936, the Court declared the Agricultural Adjustment Act unconstitutional. After the election, Roosevelt
attempted to change the political balance of the Supreme Court with the court-packing plan. Roosevelt
sent Congress a bill to increase the number of justices on the Supreme Court. It was a political mistake
and split the Democratic Party. Americans felt it would give the president too much power.
E. In 1937 a sudden rise in unemployment further hurt Roosevelt’s popularity. When he cut spending just
as the first Social Security payroll taxes decreased paychecks, the economy plummeted and two million
people were out of work. This recession led to a debate about how to handle the situation. Treasury
Secretary Henry Morgenthau wanted to balance the budget and cut spending. The opposition pushed for
more government spending. They supported “Keynesianism,” the theories of British economist
John Maynard Keynes. In his book, he argued that the government needed to spend heavily during a
recession to jump-start the economy.
F. In 1938 Roosevelt asked Congress for $3.75 billion for the PWA, WPA, and other programs.
How did Eleanor Roosevelt help bring change to the Democratic Party?
A New Democratic Party

African Americans Although African Americans had traditionally supported the Republican Party, FDR’s New
Deal and the work of Eleanor Roosevelt attracted them to the Democratic Party.

Women Women had had the right to vote for less than 15 years when FDR was elected. They also began
supporting Roosevelt and the Democrats during the New Deal era.

Other Groups Farmers, workers, immigrants, progressives, and intellectuals also supported the Democratic
Party.
What were some of the main reasons that the Democratic Party attracted new supporters? The New Deal helped
many people across the country. Voters concerned about their mortgages and wallets began to attribute their modest
financial recovery to the Democrats and their New Deal policies.
Chapter 10 Notes McGraw Hill-Smith
I. THE COURT-PACKING PLAN
Packing the Courts

Court-Packing Plan The U.S. Supreme Court did not always support the New Deal. An angry Roosevelt tried to
increase the total number of justices in a way that would have allowed him to appoint six new justices.

Political Opposition The plan met significant opposition. Southern Democrats feared new judges would ban
segregation. African Americans feared new judges would not support civil rights.

Citizen Opposition Many believed the plan granted the president too much power. Roosevelt eventually backed
down.
Why might Roosevelt have wanted to pack the courts? The U.S. Supreme Court had deemed some parts of the New
Deal unconstitutional, and Roosevelt wanted to install justices who were supportive of his programs
Why might the court-packing plan be considered Roosevelt’s first major mistake? Much of the New Deal had
been politically popular with voters, as evidenced by Roosevelt’s landslide re-election in 1936. The court-packing plan,
however, was opposed by many members of the Democratic coalition and unpopular with the public
II. A SECOND DECLINE
Recession of 1937

Economic Decline Despite economic growth through much of the mid-1930s, a decline in government spending
combined with the beginning of payroll taxes caused a second economic downturn.

Political Effects This downturn damaged the Democrats and paved the way for the Republicans to gain
Congressional seats during the 1938 midterm elections.
How do Keynesian economics continue to influence the United States today? The United States has relied heavily
on deficit spending through much of the late twentieth and early twenty-first centuries for various reasons in a reflection of
Keynesian economic thought.
II.
LEGACY OF THE NEW DEAL
The Last New Deal Reforms
A. Roosevelt’s successes were limited in his second term in office.
B. The 1937 National Housing Act, promoted by Eleanor Roosevelt, created the United
States Housing Authority to subsidize loans for builders willing to buy blocks of slums and build low-cost
housing.
C. The Farm Security Administration gave loans to tenant farmers to purchase farms.
Congress kept appropriations low, believing that the plan made agricultural problems worse.
D. The Fair Labor Standards Act of 1938 gave protection to workers, abolished child labor, and created a
40-hour workweek for workers.
E. New Deal legislation began to get blocked as Congress began to turn against the New Deal. The New
Deal era ended by 1939.
Discussion Question
Why was Roosevelt’s second term of office less successful than the first term?
Final New Deal Reforms

National Housing Act Roosevelt called for the National Housing Act to create the United States Housing
Authority. This agency subsidized loans to those building low-income housing.

Farm Security Administration The Farm Security Administration gave loans to Southern tenant farmers who
had been expelled from their land.

Fair Labor Standards Act This act abolished child labor, set the workweek at 44 hours for most people, and
established the first federal minimum wage.

End of the New Deal Republicans gained many Congressional seats in the elections of 1938. They worked with
conservative Southern Democrats to block additional New Deal legislation.
Chapter 10 Notes McGraw Hill-Smith
Why did Republicans make gains in the 1938 midterm elections? The recession of 1937 damaged the economy and
weakened voters’ faith in the Democratic Party
How did the Republican victories in 1938 contribute to the end of the New Deal? Republican lawmakers did not
support New Deal programs. As their numbers swelled, they joined with conservative Democrats to halt New Deal
legislation.
The Legacy of the New Deal
A. The New Deal had limited success, but gave Americans a stronger sense of security and stability.
B. The New Deal operated to balance competing economic interests. The New Deal’s mediating role
established the broker state, which helped work out conflicts among different interests.
C. The New Deal brought a new public attitude regarding the government. The program gave Americans
a safety net that provided safeguards and relief programs to protect them from economic disaster.
What two Supreme Court decisions gave federal government a new role as mediator between
competing groups?
Legacy of the New Deal

Increased Federal Power The New Deal saw a great expansion of the federal government and increased
federal power over the economy.

Government Mediation New Deal reforms established the broker state, in which the federal government helps
work out disagreements among competing interests.

Safety Net New Deal programs created a social safety net to see people through difficult economic times. The
modern safety net includes Social Security and unemployment insurance, two programs instituted during the New
Deal.

How Much Is Too Much? Americans continue to debate how much power the government should have to
control the economy.