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FDR’s “New Deal”
Libertyville HS
FDR and Eleanor,1936
“The First Hundred Days”• FDR’s emergency plan,
approved by Congress• Based on “3 Rs”
– Relief (for banks & unemployed)– Recovery (for agr, industry,
commerce, labor)– Reform (of economy)
• Relief– Emergency Bank Relief Act
• Bank holiday” closed all banks for four days
• Inspectors reopened only fi-nancially secure banks
• Restored confidence in banks
Relief
• Federal Emergency Relief Admin. (FERA) (1933): $3 billion in grants to states, for relief of destitute
• Public Works Admin(PWA) (1933): Ks to private firms to build public works
• Works Progress Admin (WPA) (1935): $6.3 billion to create (public) jobs (largest New Deal agency)
Relief
• Civil Conservation Corps (CCC)(1933): jobs for unemployed, focused on natural resource conservation
• National Youth Admin (NYA) (1935): part time jobs for HS, college men & women
Recovery• Farm Credit Admin.
(FCA) (1933): farmers refinanced mortgages
• Agricultural Adjustment Admin (AAA) (1933): created higher food prices through restrictions & subsidies– AAA Problem: favored
farmers (1/4 of population)– Farmers purchase power up– Large farms = most benefit
Relief
Recovery• National Industrial Recovery
Act (1933) (NRA)– Cooperation, not competition– Developed “code of practice”
• Pro NRA– Labor’s right to organize– Ended child labor– Ended unfair trade practices
• Anti NRA– Big business made codes– Codes enforced against small
businesses – Costs passed on in higher
prices– Stimulation of unionization
• Ruled unconstitutional, 1935
Recovery• US and the gold standard
– FDR ordered citizens to turn in all gold to Fed Reserve bank
– Paid $20.67 / oz– Hoarding gold made a crime =
ten years in prison– After confiscation of gold, gov’t
set price of gold at $35 / oz– Effect = Dollar devalued by
40%– Gov’t also got gold from Eu-
rope
Reform• Federal Deposit Insurance
Corporation (FDIC)(1933): Insured bank deposits
• Fed. Savings & Loan Ins. Corp.: insured S&L acc’ts
• Securities & Exchange Commission (SEC): supervises securities, stock exchanges
• Home Owners Loan Corp. (HOLC)(1933): lent $ to people facing foreclosure
Reform• Federal Housing Admin.
(FHA) (1934): housing loans to middle inc. families
• Tennessee Valley Authority (TVA) (1933): provided power, flood control, conservation, employment in seven southern states– Objections: tax free
monopoly, gov’t interfering in private sector
1934 Congressional Elections• First opportunity to test popularity of New Deal
• Critics of FDR, from the Right– Cons. opposed to public relief,
gov’t interference, financial in-terference
• Critics of FDR, from the Left– Senator Huey Long (LA):
Populist: “Share the wealth” (100% tax over $1 million inc.)
– Dr. Francis Townsend: radio personality; called for $200 / month pension for elderly (founded Union Party)
– Al Smith, NY gov. & the Liberty League – pro bus, anti New Deal (former ally of FDR)
“Second New Deal”
• Tax changes– 1935 Revenue Act created
graduated tax system– $50k-$1 million = 31%– Over $1 million = 75%
• Public Utility Holding Co. Act (1935): regulated gas, electric companies
“Second New Deal”• Social Security Act of
1935– Tax to pay for direct aid
(Unemployment, old age pensions, subsidies to cer-tain groups)
• National Labor Relations Act (“Wagner Act”) (1935)– Guaranteed right to union or-
ganizing– Right to collective bargain
agreements– Est. National Labor Re-
lations Board
“Second New Deal”
• Impact of NLRA on Unions– AFL organized trade unions– New group, Committee of
Industrial Organizations (CIO) formed to unionize industrial labor
• Competition between AFL, CIO– Jurisdictional strikes– NLRB mediated differences
• AFL & CIO merged, 1955