Download American History – A Survey

American History – A Survey
By Alan Brinkley
Chapter 26
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The New Deal
o Launching the New Deal
 Restoring Confidence
 On March 6th, FDR issued a proclamation closing all American banks
for four days until Congress could meet in special session to consider
banking-reform legislation
 Roosevelt sent to Congress the Emergency Banking Act
o A generally conservative bill designed primarily to protect the
larger banks from being dragged down by the weakness of
smaller ones
o Provided for Treasury Department inspection of all banks
before they would be allowed to reopen, for federal assistance
to some troubled institutions, and for a thorough
reorganization of those n the greatest difficulty
o The immediate banking crisis was over
 The Economy Act
o Designed to convince fiscally conservative Americans that the
federal government was in safe, responsible hands
o The act proposed to balance the federal budget by cutting the
salaries of government employees and reducing pensions to
veterans by as much as 15%
 He supported and then signed a bill to legalize the manufacture and sale
of beer with a 3.2% alcohol content
o The 21st Amendment was ratified in 1933
 Agricultural Adjustment
 Agricultural Adjustment Act
o 1933
o Its provision for reducing crop production to end agricultural
surpluses and halt the downward spiral of farm prices
o Under the “domestic allotment” system of the act, producers
of seven basic commodities would decide on production limits
for their crops
 The government would then tell individual farmers
how much they should plant and pay them subsidies
for leaving some of their land idle
 Farm prices did go up after 1933 and farm income increased by half
 In January 1936, the Supreme Court struck down the crucial provisions
of the Agricultural Adjustment Act
o Arguing that the government had no constitutional authority to
require farmers to limit production
 The Soil Conservation and Domestic Allotment Act
o It permitted the government to pay farmers to reduce
production so as to “conserve soil”, prevent erosion, and
accomplish other secondary goals
o It also attempted to protect sharecroppers and tenant farmers
 Now landlords were required to share the payments
they received for cutting back production with those
who worked their land
 The Resettlement Administration
o 1935
The Farm Security Administration
o 1937
o Both provided loans to help farmers cultivating submarginal
soil to relocate on better lands
 Rural Electrification Administration
o 1935
o Worked to make electric power available for the first time to
thousands of farmers through utility cooperatives
Industrial Recovery
 National Industrial Recovery Act
o 1933
o “The most important and far-reaching legislation ever enacted
by the American Congress”
o The National Recovery Administration
 Hugh S. Johnson
 Called on every business establishment in
the nation to accept a temporary “blanket
code”
o A minimum wage of between 30
and 40 cents an hour, a maximum
work week of 35 to 40 hours, and
the abolition of child labor
 Set of industrial codes
o These industrial codes set floors
below which no company would
lower prices or wages in its search
for a competitive advantage, and
they included agreements on
maintaining employment and
production
The Troubled NRA
 Section 7(a) of the National Industrial Recovery Act promised workers
the right to form unions and engage in collective bargaining and
encouraged many workers to join unions for the first time
o But Section 7(a) contained no enforcement mechanisms
 The Public Works Administration
o Established by the bill to administer spending programs only
gradually allowed the $3.3 billion in public works funds to
trickle out
 Perhaps the clearest evidence of the NRA’s failure was that industrial
production actually declined in the months after it establishment
 Reformers were complaining that the NRA was encouraging economic
concentration and monopoly
o A national Recovery Review Board reported that the NRA
was excessively dominated by big business and unduly
encouraging monopoly
The Schechter Decision
 The constitutional basis for the NRA had been Congress’s power to
regulate commerce among the states
 The case before the Court involved alleged NRA code violations by the
Schechter brothers
o The Court ruled unanimously that the Schechters were not
engaged in interstate commerce and that Congress had
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unconstitutionally delegated legislative power to the president
to draft the NRA codes
It nullified the legislation establishing the agency
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The TVA
 Tennessee Valley Authority
o The TVA was intended not only to complete a damn at Muscle
Shoals and build others in the region, and not only to generate
and sell electricity from them to the public at reasonable rates
o It was also to be the agent for a comprehensive redevelopment
of the entire region
 Currency, Banks, and the Stock Market
 On April 18, 1933 the president made the shift off the gold standard
official with an executive order
 Glass-Steagall Act
o 1933
o Gave the government authority to curb irresponsible
speculation by banks
o Established the Federal Deposit Insurance corporation, which
guaranteed all bank deposits up to $2,500
 Truth in Securities Act
o 1933
o Required corporations issuing new securities to provide full
and accurate information about them to the public
 Securities and Exchange Commission
o 1934
o To police the stock market
 The Growth of Federal Relief
 Federal Emergency Relief Administration
o Provided cash grants to states to prop up bankrupt relief
agencies
 Civil Works Administration
o It put more than 4 million people to work on temporary
projects
 This use of government spending to stimulate the economy was one of
the New Deal’s most important contributions to public policy
o Pump priming
 Civilian Conservation Corps
o The CCC was designed to provide employment to the millions
of urban young men who could find no jobs in the cities and
who were raising fears of urban violence
o The CCC created a series of camps in national parks and
forests and in other rural and wilderness settings
 The Farm Credit Administration
o Was a response to the problem of mortgage relief
 The Frazier-Lemke Farm Bankruptcy Act
o 1933
o Another answer
 Home Owners’ Loan Corporation
 Federal Housing Administration
o To insure mortgages for new construction and home repairs
The New Deal in Transition
 Attacks from the Right and the Left
 Some of the most strident attacks on the New Deal came from critics on
the right
o In August 1934, the American Liberty League was formed
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Designed specifically to arouse public opposition to
the New Deal’s “dictorial” policies and its supposed
attacks on free enterprise
 Roosevelt’s critics on the left also managed to produce alarm among
some supporters of the administration
o The Communist Party and The Socialist Party
Popular Protest
 More menacing to the New Deal was a group of dissident political
movements that defied easy ideological classification
o Francis E. Townsend
 Townsend plan
 All Americans over the age of sixty would
receive monthly government pensions of
$200, provided they retired and spent the
money in full each month
o Charles E. Coughlin
 Proposed the remonetization of silver, issuing of
greenbacks, and nationalization of the banking
system
 Established the National union for Social Justice in
1935
o Huey P. Long
 He had become a “dictator” in Louisiana
 He advocated a drastic program of wealth
redistribution
 Share-Our-Wealth Plan
 Established the Share-Our-Wealth Society in 1934
The “Second New Deal”
 In the spring of 1935, Roosevelt launched a series of important new
programs in response both to the growing political pressures and to the
continuing economic crisis
o The Second New Deal
 The president was now willing openly to attack corporate interests
o He asked Congress for a law to break up the great utility
holding companies
 Holding Company Act
o 1935
 A series of tax reforms put forth by the president gave great alarm to
Americans
o Soak the rich scheme
o The new tax laws were more important symbolically than they
were economically
The Wagner Act
 The Supreme court decision in 1935 to invalidate the National
Industrial Recovery Act solved some problems for the Roosevelt
administration, but it also created others
 Section 7(a) was now a defunct act
 National Labor Relations Act
o 1935
o Wagner Act
o Provided workers with more federal protection than Section
7(a) of the National Industrial Recovery Act had offered
o It provided a crucial enforcement mechanism
 The National Labor Relations Board
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Labor Militancy
 The emergence of a powerful American trade union movement in the
1930s was one of the most important social and political developments
of the decade
 New and more militant labor organizations emerged to challenge the
established, conservative unions
 The growing militancy first became obvious in 1934, when newly
organized workers demonstrated a determination and radicalism not
seen since 1919 and became involved in militant, occasionally violent,
confrontations with employers and local authorities
The Labor Schism
 During the 1930s another concept of labor organization challenged the
craft union ideal
o Industrial unionism
 Advocates argued that all the workers in a particular
industry should be organized in a single union
 John L. Lewis
o Created the Congress of Industrial Organizations in 1936 after
fights with the American Federation of Labor
 The schism clearly weakened the labor movement in many ways
Organizing Battles
 Major battles were under way in the automobile and steel industrials in
the Unions
o The United Auto Workers was gradually emerging preeminent
in the early and mid-1930s
 Auto workers employed a controversial and effective
new technique for challenging corporate opposition
 The sit-down strike
 Starting in 1936 the sit down strike spread to other
plants by 1937
 The strikers ignored court orders and local police
efforts to force them to vacate the buildings
 Employers were forced to recognize the UAW
 The sit-down strike proved effective for rubber works
and others as well
 In the steel industry, the battle for unionization was more difficult
o In 1936, the Steel Workers’ Organization Committee began a
major organizing drive involving thousands of works and
frequent strikes
o In 1937 United States Steel recognized the union rather than
risk a costly strike at a time when it sensed itself on the verge
of recovery from the Depression
Social Security
 From the first moments of the New Deal important members of the
administration had been lobbying for a system of federally sponsored
social insurance for the elderly and the unemployed
 Social Security Act
o 1935
o For the elderly there were two types of assistance
 Those who were destitute at the the time the bill
passed could begin receiving up to $15 a month in
federal assistance
 Many Americans presently working were
incorporated into a pension system
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Pension payments would not begin until
1940 and the recipients would receive
between $10 and $85 a month
 The Social Security Act created a system of unemployment insurance
 It also provided aid to blind and otherwise handicapped people and to
dependent children
 The distinction built into the social Security Act between “insurance”
and “public assistance” institutionalized a set of cultural biases that
would continue to influence the policies of welfare for the rest of the
twentieth century
 The 1935 act was the most important single piece of social welfare
legislation in American history
 New Directions in Relief
 Works Progress Administration
o 1935
o Established a system of work relief for the unemployed
o Kept an average of 2.1 million workers employed between
1935 and 1941
 The WPA also displayed remarkable flexibility and imagination in
offering assistance to those whose occupations fid not fit into any
traditional category of relief
o The Federal Writers Project gave unemployed writers a
chance to do their work and receive a government salary
o The Federal Arts Project helped painters, sculptors, and others
to continue their careers
o The Federal Music Project and the Federal Theater Project
over saw the production of concerts and plays
o The National Youth Administration provided work and
scholarship assistance to high-school and college-age men and
women
o The Emergency Housing Division of the Public Works
Administration began federal sponsorship of public housing
 For men, the government concentrated mainly on work relief
 The principal government aid to women was not work relief, but cash
assistance
o Aid to Dependent Children program of Social Security
 The 1936 “Referendum”
 The Presidential Election
 Republicans – Alf M. Landon
 Democrats – FDR
 Union Party – William Lemke
 The greatest landslide in American history to that point
 The election displayed the party realignment that the new Deal had
produced
 Farmers, industrial workers, women, blacks
 It would be decades before the Republican Party could again produce a
majority coalition of its own
The New Deal in Disarray
 The Court Fight
 Without informing congressional leaders in advance, FDR sent a
surprise message to Capitol Hill proposing a general overhaul of the
federal court system and including, among many provision, one to add
up to six new justice to the supreme Court
 Roosevelt said that eh Court needed new and younger blood
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His real purpose was to give himself the opportunity to appoint new,
liberal justices and change the ideological balance of the court
o Court-packing
 West Coast Hotel v. Parrish (1937)
o To uphold a state minimum wage law
 Congress ultimately defeated the president’s plan
 He never had the same political motivation again
 Other Setbacks
 One causality of this newly powerful conservative coalition was an
ambitious plan to reorganize the executive branch of government
o Executive reorganization, like Court packing, reinforced
conservative arguments that the president was aspiring to
become a “dictator”
 The greatest blow to the administration as it began its second terms was
an economic one
o A serious new recession that threatened to discredit everything
the New Deal had done
 Retrenchment and Recession
 There was a boom in 1937
o FDR started cutting back on his relief plans to try and balance
the budget
 By 1938 economic conditions were soon almost as bad as in the bleak
days of 1932 and 1933
 The recession of 1937 was a shock to many
o It was a result of many factors
 The new crisis forced a revaluation of policies within the
administration
 In April 1938, the president asked Congress for an emergency
appropriation of $5 billion for public works and relief programs, and
government funds soon began pouring into the economy once again
o Within a few months, another tentative recovery seemed to be
under way, and the advocates of spending pointed to it as
proof of the validity of their approach
 In April 1938, Roosevelt sent a stinging message to Congress,
vehemently denouncing what he called an unjustifiable concentration
of economic power and asking for the creation of a commission to
examine the problem
o Congress established the Temporary National Economic
Committee
 To investigate the impact of monopoly on the
economy
 Fair Labor Standards Act
o Created a national minimum wage and a mandated forty-hour
work week
Limits and Legacies of the New Deal
 The Idea of the “Broker State”
 Instead of gorging all elements of society into a single, harmonious unit
the real achievement of the New Deal was to elevate and strengthen
new interest groups so as to allow them to compete more effectively in
the national marketplace
 The New Deal made the federal government a mediator in that
continuous competition
 One of the enduring legacies of the new Deal was to make the federal
government a protector of interest groups and a supervisor of the
competition among them
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One of the important limits of the new Deal was its very modest record
on behalf of several important social groups
African Americans and the New Deal
 One group the New Deal did relatively little to assist was African
Americas
 Marian Anderson was not permitted to sing in D. C.
o Eleanor Roosevelt found a way for her to sing on the steps of
the Lincoln Memorial
 One of the first modern civil rights demonstrations
 “Black Cabinet”
o The black members of FDR’s administration
 By 1936, more than 90% of blacks were voting Democratic
 New Deal relief agencies did not challenge, and indeed reinforced,
existing patterns of discrimination
 But it refused to make the issue of race a significant part of its agenda
The New Deal and the “Indian Problem”
 In many respects, government polices toward the Indian tribes in the
1930s were simply a continuation of the long-established effort to
encourage Native Americans to assimilate
 Commissioner of Indian Affairs – John Collier
o Collier promoted legislation that would reverse the pressures
on Native Americans to assimilate and would allow them the
right to live in traditional Indian ways
 Indian Reorganization Act of 1934
 It restored to the tribes the right to own land
collectively
 The efforts of the 1930s did not solve what some called the “Indian
Problem”
 They did provide Indians with some tools for rebuilding the viability of
the tribes
Women and the New Deal
 The New Deal was not hostile to feminist aspirations, but neither did it
do a great deal to advance them
 Roosevelt appointed the first female cabinet member in the nation’s
history, Secretary of Labor Frances Perkins
 Such things were in part a response to pressure from Eleanor Roosevelt
 Hattie Caraway of AK became in 1934 the first woman ever elected to
a full term in the U. S. Senate
The New Deal in the West and the South
 The two regions of the United States that did receive special attention
from the New Deal were the West and the South
o Most westerners were eager for the assistance New Deal
agencies provided, but their political leaders were not always
as supportive
 The main reason for the New Deal’s particular impact on the West was
that conditions in the region made the government’s programs
especially important
o Farming
o But the region pad a price for the government’s beneficence
 For generations after the Great Depression, the
federal government maintained a much greater and
more visible bureaucratic presence in the West than
in any other region
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The New Deal also directed national attention toward the economic
condition of the South in a way that no previous administration had
done
The New Deal and the National Economy
 The most frequent criticisms of the New Deal involve its failure
genuinely to revive or reform the American economy
 The New Deal substantially did not alter the distribution of power
within American capitalism
o Only a small impact on the distribution of wealth
 The New Deal did have a number of important and lasting effects on
both the behavior and the structure of the American economy
 The New Deal also created the basis of the federal welfare state
The New Deal and American Politics
 Perhaps the most dramatic effect of the New Deal was on the structure
and behavior of American government itself and on the character of
American politics
 The New Deal had a profound impact on how the American people
defined themselves politically