CHAPTER 16 SECTION 2
NEW CHALLENGES
CRITICS OF THE NEW DEAL
 Both Conservatives and liberals criticized New Deal
o Republican business leaders form American Liberty League
o Democrat Al Smith calls New Deal “irresponsible ravings against
millionaires and big business”
 Frances Townsend—California
o $200 a month to every American 60 years old
o Spend within 30 days
 Father Charles Coughlin of Michigan
o Nationalize all banks and return to silver standard
 Huey Long Senator and Ex-Governor Louisiana
o Share our wealth plan
o Seize wealth from rich through taxes
o Guarantee minimum income and home to every American family
o Received a lot of support
o Intended run for presidency in 1936 but was assassinated in 1935
SECOND NEW DEAL
 Democrats gain more votes in Congress in 1934
o More public-works programs, social security plan and labor issues planned
 Emphasized long term recovery
 Works Progress Administration-1935 (WPA)
o Led by Harry Hopkins
 Help Americans find work
 Budget of $5 billion for job creation
o January 1935 feds return responsibility of direct relief to state and local
government.
o 8.5 million people employed over next 8 years- 2 million at a given time
o Blue collar workers built or rebuilt 350 airports
 100,000 public buildings
 78,000 bridges
 500,000 miles of road
o White collar workers took on research projects and teaching jobs
 Established National Youth Administration (NYA)—help people between ages of
16-25
o Part time jobs—allowed them to stay in school
o Gave aid to 500,000 people
o Mary McLeod Bethune was appointed Director of Division of Negro
Affairs in NYA
 Social Security Act of 1935
o Passed in August
o 3 major provisions
 Provide unemployment insurance
 Payroll taxes on business
 Provide pensions to retired workers older than 65
 Funds from 2 sources—payroll tax on employers and
employees
 Provide payment to people with disabilities, the elderly, and
families of male workers who had died
OTHER PROGRAMS
 May 1935 Rural Electrification Administration (REA) provided electricity to
isolated areas
o Government regulates interstate production, transmission and sale of gas
and electricity
o Done to keep utility costs low
 Revenue Act of 1935—“Wealth Tax Act”
o Sharply raised taxes for rich
ELECTION OF 1936
 Labor unions, farmers and many republicans endorse FDR
 Republicans nominate Alfred Landon from Kansas
 FDR wins easily
o 28 million popular votes to 17 million
o Carried every state but Maine and Vermont
o Democrats increase majorities in Congress
ROOSEVELT AND THE SUPREME COURT
 After victory FDR moved to reform the Supreme Court
o Angry over rulings that some New Deal programs were unconstitutional
 Called justices “nine old men”—six were 70 or older
 February 1937 FDR asks congress to grant him power to appoint 1 justice for
each justice over 70 years old
o Congress protested calling it “court packing” that tampered with balance
of power
o Congress rejected idea
 Courts upheld Social Security Act and National Labor Relations Act
o More tolerant of New Deal programs
 Over next 4 years several justices died or retired
 By 1945 8 of 9 justices were appointed by FDR
EFFECTS OF 2ND NEW DEAL
 New Deal programs were formed to fit Supreme Court rulings
 May 1935 provisions of NIRA was ruled unconstitutional
 Weeks later Congress passes Wagner-Connery Act—guaranteeing right to
organize unions and bargain collectively for better wages and working conditions
LABOR
 American Federation of Labor (AFL) was organizing skilled laborers
 John Lewis leader of United Mine Workers organized Congress of Industrial
Organizations—to unite all industrial workers skilled and unskilled
o Wave of strikes against big business
 United Auto Workers struck against General Motors in Winter of 1936-37
o UAW had tried to unionize but GM resisted
 December 31, 1936 workers staged a sit down strike—occupying
the factories
 After 6 weeks GM granted UAW right to organize workers
o Within 8 months membership rose to 400,000 members in UAW
 From 1936 to 1939 number of union members rose from 4 million to 9 million
FARMERS
 After AAA ruled unconstitutional Congress passes other legislation to replace it
 Keep prices high by cutting production—to protect legislation Congress tied crop
reduction to a soil conservation plan
 Passed a 2nd AAA in 1938—authorized payments to farmers who withdrew land
from production
o Also authorized Department of Agriculture to limit amounts of product
brought to market each year
 If more brought to market, government stored surpluses until
prices rose
 Farmers got government loans if they participated
o Also brought aid to migrant farm workers, sharecroppers and tenant
farmers
o In 1937 created Farm Security Administration (FSA)
 Provided low interest, long term loans to help tenant farmers and
sharecroppers buy land
 FSA also established camps where migrant farmers could seek
shelter and medical care
ROOSEVELT’S RECESSION
 In 1936 FDR cut back relief and public works projects in response to criticism of
spending plan
o Private industry was not ready to provide more jobs
o By fall of 1937 factories were closing and unemployment as rising again
 FDR responded by approving $3 billion to expand WPA, restart PWA and fund
other agencies
o This reduced some unemployment prevented recession from worsening
 In 1938 election FDR opposed Democrats who did not support 2nd New Deal
o All but one congressman FDR opposed was elected in 1938
o Several other Democratic critics were elected
o Republicans gained 7 votes in Senate and 75 in House
o Faced with criticism, FDR did not propose new reforms in 1939