FDR’s NEW DEAL

• The New Deal refers to the relief, recovery, and reform programs of FDR’s administration that were aimed at combating the Great Depression.

Key Goals of the New Deal

• The First Hundred Days1. Restore the nation’s hope2. Stabilize financial institutions3. Provide jobs and relief to the poor4. Plan and regulate the economy

New Deal

The Second Hundred Days1. Pass new labor laws2. Create and expand New Deal agencies3. Establish Social Security to provide old-age

pensions and unemployment insurance

Widespread bank closings

FDR Addresses Major Issues• Lack of Confidence in Banks, people will not

put money back in• By 1933 USA experiences widespread bank

failures• Loss of savings, overextended on loans, etc.• FDR’s first step of New Deal

Response to Bank Failures• Emergency Banking Relief Act (EBRA) 1933:• Allowed a plan to close down insolvent banks and

reorganize and reopen those banks strong enough to survive.

• Only banks declared to be financially secure would be allowed to reopen after federal inspectors investigated. Bank Holiday

• Within 3 days 5,000 banks passed and reopened• 2/3 of Banks were given loans and would reopen

under this act and faith in banking institutions was somewhat restored

• Glass-Steagall Act 1933: Created the FDIC (Federal Deposit Insurance Corp.)

• Insurance for individual accounts up to $5,000• Now $250,000

Little Confidence in the Stock Market

• Crash of 1929 “Black Tuesday”• Speculation, buying on margin,

misrepresentations by business publically traded

Response to Lack of Confidence in Stock Market

• Federal Securities Act (FSA) 1933:• Complete info on all stock offerings • Liability for any misrepresentations • Securities and Exchange Commission (SEC)

1934:• Power to license and regulate stock exchanges,

the companies whose securities traded on them, and brokers and dealers who conducted trading

Low Farm Prices

• Crop prices to low, large surplus, massive debt• Response:• Agricultural Adjustment Act (AAA) 1936:• Lowered production, reduced surpluses,

reduced competition in order to increase demand and prices

• Government payments for not farming land

Massive Unemployment

Solutions to Unemployment

• Goal: provide relief through public work projects and cash payments

• Civilian Conservation Corp. (CCC) 1933:• Employ poor to work on natural resource

conservation and public works• Paid $30/ month• Run quasi-military style

CCC

CCC

CCC

Solutions to Massive Unemployment

• Federal Emergency Relief Admin. (FERA) 1933• Goal: Alleviate adult unemployment • Fed. Gov.t gave $3.1 Billion to state Gov.t to

operate local work projects• Provided work for over 20 million people

Massive Unemployment

• Public Works Administration (PWA) 1933:• Allowed $3.3 Billion to be spent on

construction of public works to provide employment, stabilize purchasing power, provide public welfare, and contribute to a revival of American industry

• Page 535 shows a map of PWA programs across the United States

PWA

PWA

Massive Unemployment

• Civil Works Administration (CWA) 1933:• Created 4 million temporary jobs between

’33-’34• Laid 12 million feet of sewer pipe• Made improvements to 255,000 miles of road,

40,000 schools, 3,700 playgrounds, 1,000 airports

Poverty in TN River Valley

• Area greatly depressed and destroyed by floods

• Solution: TN Valley Authority (TVA) 1933:• Renovate damns and construct new ones• Provide 1,000s of jobs in flood control• Today is nation’s largest public power

company, providing electric power to nearly 8.5 million customers in the TN Valley

TVA

TVA

TVA

Mortgage Foreclosures

• Many people lost their homes, could not afford to pay mortgages

• Solutions: • Home Owners Loan Corp. (HOLC) 1933:• Refinance homes, provide loans to

homeowners who were about to forclose• Only applicable to nonfarm homes worth less

than $20,000

Mortgage Foreclosures

• Federal Housing Administration (FHA) 1934:• Goals: Improve housing standards and

conditions• Provide adequate home financing system

through mortgage loans and to stabilize the mortgage market

Economic Effects of New Deal

• Relieved poverty in some segments of society• Created large deficits; raised the national debt• Strengthened unions – Wagner Act 1935• Created big public works projects• Strengthened banks, stock market

Political effects of the New Deal

• Changed people’s view of the role of government

• Expanded the federal government• Produced much political controversey

Social effects of the New Deal

• Excluded help for tenant farmers• Discriminated against women & minorities • Provided hope to many Americans

Social Security

“Fast Forward to Today” on page 557

Why do you think the Federal Government has kept enlarging the Social Security system and extending its benefits?

Cultural effects of New Deal• Encouraged popular and fine arts with WPA• Created Federal Writer’s Project, 1935 – 6,000

writers to work• Created Federal Music Project, 1935 – community

symphonies and free music lessons• Create Federal Theatre Project, 1935 • Federal Art Project, 1935 – put thousands of artists

to work (murals, paintings, sculptures in public areas)• FDR believed that the arts were not a luxury that was

expendable.

Criticisms of the New Deal

• The New Deal Goes Too Far:– Overtaxes the rich– Is Socialistic – Social Security penalizes successful people– Put unconstitutional limits on individual freedom– Deficit spending and debt– American Liberty League – argued it was “un-

American” in manner.

Deficit and Debt

“Focus on Economics” Page 550Graphs on page 550

*This will appear on your test tomorrow.

Criticisms of the New Deal

• The New Deal does not go far enough:– Should create a new economic system– Government should take over factories, farms– Government should redistribute wealth– Does not do enough to help women and

minorities

Critics of New DealThese leaders were early supporters, but over time

believe that the New Deal did not go far enoughDemagogues (Leaders who manipulate people with

half truths, deceptive promises, and scare tactics) such as…

Father Coughlin on page 548 – supported nationalization of banks and redistribution of wealth. Supported Socialism

Senator Huey Long on page 549 – “Share our Wealth” Program. Supported Socialism, with limits on wealth and Heavy taxes on rich.