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494 Roosevelt and the New Deal 1933–1939 . The Big Ideas , SECTION 1: The First New Deal Social and economic crises lead to new roles for government. In the first 100 days of Roosevelt’s presidency, his team initiated a series of laws that transformed the United States. SECTION 2: The Second New Deal Social and economic crises lead to new roles for government. In 1935 Roosevelt introduced new programs to help unions, the elderly, and the unemployed. SECTION 3: The New Deal Coalition Social and economic crises lead to new roles for government. Backed by a new coalition of vot- ers, Roosevelt easily won a second term, but the opposition of conservatives weakened his ability to achieve additional reforms. The American Vision: Modern Times Video The Chapter 10 video, “Franklin D. Roosevelt and the New Deal,” describes the personal and political challenges Franklin Roosevelt faced as president. 1931 German unemployment reaches 5.6 million Surrealist artist Salvador Dali paints Persistence of Memory 1933 Adolf Hitler appointed German chancellor Japan withdraws from League of Nations 1928 Franklin Delano Roosevelt elected governor of New York 1929 Great Depression begins 1933 Gold standard abandoned Federal Emergency Relief Act and Agricultural Adjustment Act passed 1931 The Empire State Building opens for business 1928 1931 1934 F. Roosevelt 1933–1945 Hoover 1929–1933 1930 Germany’s Nazi Party wins 107 seats in Reichstag 1928 Alexander Fleming discovers penicillin

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  • 494 CHAPTER 12 Becoming a World Power494

    Roosevelt and the New Deal


    . The Big Ideas,SECTION 1: The First New Deal

    Social and economic crises lead to new roles for government. In the first 100 days of Roosevelt’spresidency, his team initiated a series of laws that transformed the United States.

    SECTION 2: The Second New DealSocial and economic crises lead to new roles for government. In 1935 Roosevelt introduced new

    programs to help unions, the elderly, and the unemployed.

    SECTION 3: The New Deal CoalitionSocial and economic crises lead to new roles for government. Backed by a new coalition of vot-

    ers, Roosevelt easily won a second term, but the opposition of conservatives weakened his ability toachieve additional reforms.

    The American Vision: Modern Times Video The Chapter 10 video,“Franklin D. Roosevelt and the New Deal,” describes the personal and political challenges FranklinRoosevelt faced as president.

    1931• German unemployment

    reaches 5.6 million

    • Surrealist artist SalvadorDali paints Persistenceof Memory

    1933• Adolf Hitler appointed

    German chancellor

    • Japan withdraws fromLeague of Nations

    1928• Franklin Delano

    Roosevelt electedgovernor of New York

    1929• Great Depression begins

    1933• Gold standard abandoned

    • Federal Emergency ReliefAct and AgriculturalAdjustment Act passed

    1931• The Empire State Building

    opens for business

    ▼ ▼

    1928 1931 1934

    F. Roosevelt1933–1945


    1930• Germany’s Nazi Party wins

    107 seats in Reichstag1928• Alexander Fleming

    discovers penicillin

  • 495

    In this Ben Shahn mural detail, New Deal planners (at right) design thetown of Jersey Homesteads as a home for impoverished immigrants.

    1937• Court-packing bill defeated

    • “Roosevelt recession” begins

    1938• Fair Labor Standards

    Act passed

    1936• Civil War erupts

    in Spain

    ▲ ▲

    1938• Hitler annexes


    1939• World War II begins

    1935• Supreme Court strikes

    down NIRA

    • Social Security Act passed

    1937 1940


    Chapter OverviewVisit the American Vision:Modern Times Web site at

    andclick on Chapter Overviews—Chapter 10 to preview chapterinformation.

  • 496

    Recognizing Time and Sequence

    Time is the basis for studying history. Since historians describe andexplain change over time, they must first know the order of events ordevelopments. They cannot talk about cause and effect or problems andsolutions if they don’t know what happened first. This means thathistorians describe a series of actions from beginning to end. Such an orderis called chronological order. Chronological order helps readers understanda process over time. Graphs and time lines also help convey the time andsequence of events in history.

    Authors often use signal words to let their reader know that they will dis-cuss information in the order of occurrence. You know an author is callingattention to time and sequence when you see words and phrases such asfirst, second, last, finally, next, then, since, soon, previously, before, after, mean-while, at the same time, and at last. The most obvious signals, of course, aredays, dates, and times.

    Read the following paragraph and notice how signal words help you anticipate atime-ordered explanation.

    On his very first night in office, Roosevelttold Secretary of the Treasury William H.Woodin he wanted an emergency banking billready for Congress in less than five days. Thefollowing afternoon, Roosevelt declared anational bank holiday, temporarily closing allbanks. . . .

    On the day Congress convened, the House of Representatives unanimously passed theEmergency Banking Relief Act after only 38minutes of debate. . . .

    On March 12, President Roosevelt addressedthe nation by radio. . . . When banks opened theday after the speech, deposits far outweighedwithdrawals. The banking crisis was over. (page 502)

    Read through the text under the headings“FDR’s Early Political Career” and“Governor of New York.” As you read, lookfor words that signal chronological order tohelp you understand the sequence of eventsand the time that elapsed. This will helpwhen you take notes because you will learnto place events in the correct order.


    Make a time connection—imagine how much timeelapses during the eventdescribed. Hours? A day?Months or years?

  • 497

    Historical Interpretation As you study history, you should analyze human modificationsof landscapes and examine the resulting environmental policy issues.

    Analyzing Environmental Issues

    It is important for us to realize that our actions impact Earth and the landscapethe planet provides. Humans have modified the environment in which they livefor millennia with various results. How has the landscape in your communitybeen altered by construction of roads, bridges, or buildings? In order to ensurethat the environment continues to sustain life on this planet, we must continuallyassess the impact of our actions.

    Read these passages about two New Deal programs—the Civilian Conservation Corps(CCC) and the Tennessee Valley Authority (TVA)—that had a great impact on theenvironment.

    Beginning in March 1933, the CCC offered unemployed young men 18 to 25 years oldthe opportunity to work under the direction of the national forestry service plantingtrees, fighting forest fires, and building reservoirs. (page 505)

    The TVA erected 20 dams, employing up to 40,000 workers at a time. The agency alsoreforested millions of acres, built fertilizer factories and power plants, and strung thou-sands of miles of wire to bring electricity to rural families for the first time. (page 508)

    While the CCC and the TVA did much to help unemployed workers and boostthe economy, they also made changes in the nation’s landscape. How would thebuilding of reservoirs change the environment? What impact did planting thou-sands of trees have on the landscape? What effects do you think the damming ofmajor rivers had on the environment? What sort of changes in the environment doyou think happened when these dams slowed the movement of billions of gallonsof water in the rivers?

    As you read the chapter, make a list of theprograms created under the New Deal thatchanged the landscape. Write down the indi-vidual projects, and note your ideas on howthese projects changed the environment.

    Analysis Skill Standard H15

  • Guide to Reading

    ConnectionIn the previous chapter, you learned howPresident Hoover tried to ease the diffi-culties of the early years of the GreatDepression. In this section, you will dis-cover how President Roosevelt intro-duced the First New Deal.

    • After serving as governor of New York,Franklin D. Roosevelt was elected president in 1932. (p. 499)

    • During his first 100 days in office,President Roosevelt sent 15 major acts aimed at financial recovery toCongress. (p. 501)

    • President Roosevelt took steps tostrengthen the banks and the stockmarket. (p. 502)

    • New legislation tried to address theeconomic problems of farms andindustry. (p. 503)

    • Congress created two new programs tohelp homeowners and farmers whohad difficulty paying their mortgages. (p. 504)

    • Unemployed people found workthrough several government programs,such as the Public Works Administrationand the Civil Works Administration. (p. 505)

    Content Vocabularyfireside chat

    Academic Vocabularyapparent, ideology, fundamental

    People and Terms to IdentifyNew Deal, gold standard, bank holiday,Hundred Days, Securities and ExchangeCommission, Federal Deposit InsuranceCorporation, Agricultural AdjustmentAdministration, Civilian ConservationCorps

    Reading Objectives• Discuss Franklin Roosevelt’s early

    political career.• Explain the worsening situation in the

    U.S. banking system in the early 1930s.• List three programs of the First New

    Deal that provided jobs for theunemployed.

    Reading StrategySequencing As you read aboutPresident Roosevelt’s first three monthsin office, complete a time line similar tothe one below to record the major prob-lems he addressed during this time.

    Preview of Events

    The First New Deal

    1905Franklin Roosevelt andEleanor Roosevelt marry

    ✦1915 ✦1935✦1925

    1910Roosevelt elected toNew York State Senate

    1921 Roosevelt strickenwith polio

    1928Roosevelt elected governor of New York


    March 5, 1933

    June 16, 1933

    498 CHAPTER 10 Roosevelt and the New Deal

    . The Big Idea ,Social and economic crises lead to new roles for government. After win-ning the 1932 election, President Roosevelt surrounded himself with a diversegroup of advisers who helped him create programs to pull the country out of theDepression. Based on these ideas, during the Hundred Days, Congress passed 15major acts that later became known as the First New Deal. These acts focused onbanking and stock market regulation and plans for managing farms and industry.For the first time, the government also implemented relief programs that directlyhelped the unemployed. While the programs did not end the Depression, theygave many people hope for the future.

    The following are the mainHistory–Social Science Standardscovered in this section.

    11.6.2 Understand the explanationsof the principal causes of the GreatDepression and the steps taken by the Federal Reserve, Congress andPresidents Herbert Hoover and FranklinDelano Roosevelt to combat the economic crisis.

    11.6.4 Analyze the effects of and thecontroversies arising from New Deal eco-nomic policies and the expanded role ofthe federal government in society and theeconomy since the 1930s (e.g., WorksProgress Administration, Social Security,National Labor Relations Board, farm pro-grams, regional development policies, andenergy development projects such as theTennessee Valley Authority, California CentralValley Project, and Bonneville Dam).

  • Roosevelt Takes Office

    After serving as governor of New York,Franklin D. Roosevelt was elected president in 1932.

    Reading Connection Do you believe family connectionsare helpful or necessary to participate in politics? Read on tolearn about one man whose family connections may havehelped him become president.

    When Franklin Delano Roosevelt came into office,he was bursting with ideas to help the United Statesrecover from the Depression. The president, how-ever, had no clear agenda. The previous spring, dur-ing his campaign for the presidential nomination,Roosevelt revealed the approach he would take aspresident. “The country needs,” Roosevelt explained,“bold, persistent experimentation. . . . Above all, trysomething.”

    In the 1920s, cowboy and comedian Will Rogerssaid that his life’s work was “to rescue the countryfrom the hands of the politicians.” He used his sharpwit to go after these public figures. A friend of presi-dents and politicians of both parties, Rogers neverthe-less satirized them mercilessly in public appearancesand on the radio.

    With FDR, however, Rogers changed his tune:“President Roosevelt closed the banks before lunchand called Congress into session while he was havingdessert. . . .The whole country is with him. . . .Even ifhe does what is wrong they are with him, just so hedoes something. . . .If he burned down the Capitol, we would cheer and say, ‘Well, we at least got a firestarted anyhow.’”

    As Roosevelt’s New Deal gained momentum, Rogerspraised the resulting flurry of legislation: “Mr. Rooseveltjust makes out a little list of things every morning thathe wants [Congress] to do . . .and the whole country isbetter off.”

    —adapted from Will Rogers: A Biography

    In mid-June 1932, with the country deep in theDepression, Republicans had nominated HerbertHoover to run for a second term as president. Laterthat month, the Democrats, after four ballots and agreat deal of negotiating, chose Roosevelt, the popu-lar governor of New York. When he won the nomina-

    tion, Roosevelt broke with tradition by flying toChicago to deliver the first acceptance speech evermade to a nominating convention. Roosevelt’sspeech set the tone for his campaign:

    “The appearance before a National Convention of its nominee for President . . . is unprecedented andunusual, but these are unprecedented and unusualtimes. . . . Let it also be symbolic that in so doing Ibroke traditions. Let it be from now on the task of ourParty to break foolish traditions. . . . It is inevitable that the main issue of this campaign should revolveabout . . . a depression so deep that it is without precedent. . . . Republican leaders not only have failedin material things, they have failed in national vision,because in disaster they have held out no hope. . . . I pledge you, I pledge myself, to a new deal for theAmerican people.”

    —quoted in The Public Papers and Addresses ofFranklin D. Roosevelt

    The next day, a cartoonist used the words “newdeal” to stand for Roosevelt’s program. From thatpoint forward, Roosevelt’s policies for ending theDepression became known as the New Deal.Roosevelt’s confidence that he could make things bet-ter contrasted sharply with Hoover’s apparent failureto do anything effective. On Election Day, Rooseveltwon the Electoral College in a landslide, 472 votes to59, and he received nearly 23 million votes to slightlyless than 16 million for Hoover in the general election.

    CHAPTER 10 Roosevelt and the New Deal 499

    Franklin Delano Roosevelt and Will Rogers

  • “. . . the only thing we haveto fear is fear itself . . .”

    —Franklin D. Roosevelt

    Inspiring Words President Roosevelt usedhis first Inaugural Address of March 1933 torally the nation’s spirits. What problems hadmade the nation anxious and fearful?


    500 CHAPTER 10 Roosevelt and the New Deal

    Roosevelt’s Early Political Career FranklinRoosevelt, born in 1882 to a wealthy New York fam-ily, married Eleanor Roosevelt in 1905. They weredistantly related through former president TheodoreRoosevelt—her uncle and his cousin. Likable, opti-mistic, and intensely competitive, FDR seemed madefor a life in politics. Shortly after graduating fromColumbia Law School, Roosevelt won a seat in theNew York State Senate, where he earned a reputationas a progressive reformer willing to stand up to theparty bosses. Under Woodrow Wilson, he becameassistant secretary of the navy, a position he heldthrough World War I.

    In 1920 Roosevelt temporarily withdrew frompolitics. The next year he caught the paralyzing dis-ease known as polio. Undaunted, Roosevelt began avigorous exercise program, while Eleanor kept hisname prominent in the New York Democratic Party.In 1928 he was rewarded by being elected governorNew York. His policies as governor made him verypopular. He cut taxes for farmers, worked to reducethe rates charged by public utilities, and in 1931pushed through the New York legislature a newstate agency to help unemployed New Yorkers.

    Roosevelt’s popularity in New York paved the wayfor his presidential nomination in 1932. ManyAmericans applauded his use of the government’spower to help people in economic distress. Othersbelieved that his struggle against polio had given hima better understanding of their hardships. Perhapsmost important, Americans saw in Roosevelt anenergy and optimism that gave them hope despite thetough economic times. After Roosevelt became presi-dent, his serenity and confidence amazed many peo-ple. When one aide commented on his attitude,Roosevelt replied, “If you had spent two years in bed,trying to wiggle your big toe, after that anything elsewould seem easy.”

    Roosevelt Is Inaugurated Although Rooseveltwon the presidency in November 1932, the country’sunemployed and homeless had to endure one morewinter as they waited for his inauguration on March4, 1933. All through the winter, unemployment con-tinued to rise. Meanwhile, bank runs greatlyincreased, further threatening the nation’s bankingsystem. Some of the bank runs occurred because peoplefeared Roosevelt would abandon the gold standard

  • and reduce the value of the dollar in orderto fight the Depression. Under the goldstandard, one ounce of gold equaled a setnumber of dollars. To reduce the value ofthe dollar, the United States would have tostop exchanging dollars for gold. ManyAmericans, and foreign investors, decidedto take their money out of the banks andconvert it to gold before it lost its value.

    Across the nation, people stood in longlines with paper bags and suitcases, wait-ing to withdraw their money from banks.By March 1933, over 4,000 banks had col-lapsed, wiping out 9 million savingsaccounts. In 38 states, governors declaredbank holidays—closing the remainingbanks before bank runs could put themout of business.

    By the day of Roosevelt’s inauguration,most of the nation’s banks were closed.One in four workers was unemployed.The economy seemed paralyzed.Roosevelt knew he had to restore the nation’s confi-dence. “First of all,” the president declared in hisInaugural Address, “let me assert my firm belief thatthe only thing we have to fear is fear itself. . . . Thisnation asks for action, and action now!”

    Interpreting What events inRoosevelt’s life shaped his ideas and character?

    The Hundred Days Begins

    During his first 100 days in office, PresidentRoosevelt sent 15 major acts aimed at financial recoveryto Congress.

    Reading Connection Do you think it is wise for anational leader to be surrounded with people who agree withall of the leader’s ideas? Why do you think as you do? Read on to learn about Roosevelt’s choices for advisers.

    Roosevelt assembled a team of advisers, whichsometimes was called the Brain Trust. With the helpof this team, the new president began to send billafter bill to Congress. Between March 9 and June 16,1933—which came to be called the Hundred Days—Congress passed 15 major acts to meet the economiccrisis, setting a pace for new legislation that hasnever been equaled. Together, these programs madeup what would later be called the First New Deal.

    Reading Check

    Origins of the New Deal The New Deal was notbased on a clear strategy shaped by a single philoso-phy. Roosevelt was not an intellectual, nor did hehave a strong political ideology. He was a practicalpolitician. FDR was willing to try a variety ofapproaches both to see whether they worked andwhether they were helping or hurting him politically.

    To generate new ideas and programs, Rooseveltsought advice from a wide range of advisers withexperience in academia, business, agriculture, gov-ernment, law, and social work. The presidentdeliberately chose advisers who disagreed with eachother. He wanted to hear many different points ofview, and by setting his advisers against one another,Roosevelt ensured that he alone made the final deci-sion on what policies to pursue.

    A Divided Administration Roosevelt’s adviserswere divided roughly into three main groups.Despite their disagreements, most of the advisershad grown up in the Progressive Era, and theirapproaches reflected progressive ideas. They gener-ally favored some form of government interventionin the economy—although they disagreed over whatthe government’s role should be.

    One group that was very influential during theearly years of Roosevelt’s administration supported

    CHAPTER 10 Roosevelt and the New Deal 501

    People rush to California bank to withdraw their money➤

  • the “New Nationalism” of Theodore Roosevelt. Theseadvisers believed that business and governmentshould work together to manage the economy. Theyhad been very impressed by business–governmentcooperation on the War Industries Board duringWorld War I. They believed that if government agen-cies worked with businesses to regulate wages,prices, and production, they could lift the economyout of the Depression.

    A second group of advisers in the Rooseveltadministration went even further. They distrustedbig business and blamed business leaders for causingthe Depression. These advisers wanted governmentplanners to run key parts of the economy.

    A third group in Roosevelt’s administration sup-ported the “New Freedom” of Woodrow Wilson.They too blamed large trusts for the Depression, butthey believed the government had to restore compe-tition to the economy. These advisers wantedRoosevelt to support “trust busting” by breaking upbig companies and allowing competition to setwages, prices, and production levels. They alsothought the government should impose regulationson the economy to keep competition fair.

    Summarizing What ideas didRoosevelt’s advisers support?

    Reading Check

    Fixing the Banks and the Stock Market

    President Roosevelt took steps to strengthenthe banks and the stock market.

    Reading Connection Describe a time you listened to orwatched a presidential address. Read on to discover howPresident Roosevelt and his cabinet restored confidence inAmerica’s financial institutions.

    As the debate over policies and programs swirledaround him, President Roosevelt took office with onething clear in his mind. Very few of the proposedsolutions would work as long as the nation’s banksremained closed. President Roosevelt knew the firstthing he had to do was restore the American people’sconfidence in the banking system. He immediatelybegan to work on his plan.

    The Emergency Banking Relief Act On his veryfirst night in office, Roosevelt told Secretary of theTreasury William H. Woodin he wanted an emergencybanking bill ready for Congress in less than five days.The following afternoon, Roosevelt declared anational bank holiday, temporarily closing all banks,

    and called Congress into a special sessionscheduled to begin on March 9, 1933.

    On the day Congress convened, theHouse of Representatives unanimouslypassed the Emergency Banking ReliefAct after only 38 minutes of debate. TheSenate approved the bill that evening,and Roosevelt signed it into law shortlyafterward. The new law required federalexaminers to survey the nation’s banksand issue Treasury Department licensesto those that were financially sound.

    On March 12, President Rooseveltaddressed the nation by radio. Sixty mil-lion people listened to this first of many“fireside chats,” direct talks FDR heldwith the American people to let themknow what he was trying to accomplish.He told the people that their moneywould now be secure if they put it backinto the banks. “I assure you that it issafer to keep your money in a reopenedbank than under the mattress.” Whenbanks opened the day after the speech,deposits far outweighed withdrawals.The banking crisis was over.

    502 CHAPTER 10 Roosevelt and the New Deal

    Presidential Assurances PresidentRoosevelt often used radio addresses to calmthe public’s fears during the Great Depression.At the beginning of his first term, he encour-aged Americans to put their money back infederally inspected banks. Why do you thinkthe president declared a bank holiday?



  • Regulating Banks and Brokers AlthoughPresident Roosevelt had restored confidence in thebanking system, many of his advisers who favoredtrust-busting and fair competition urged him to gofurther. They pushed for new regulations for bothbanks and the stock market. Roosevelt agreed withtheir ideas and threw his support behind the SecuritiesAct of 1933 and the Glass-Steagall Banking Act.

    The Securities Act required companies that soldstocks and bonds to provide complete and truthfulinformation to investors. The following yearCongress created an independent agency, theSecurities and Exchange Commission (SEC), to reg-ulate the stock market and prevent fraud.

    The Glass-Steagall Act separated commercialbanking from investment banking. Commercialbanks handle everyday transactions. They takedeposits, pay interest, cash checks, and loan moneyfor mortgages and other business activities. Underthe Glass-Steagall Act, these banks were no longerpermitted to risk depositors’ money by using it tospeculate on the stock market. To further protectdepositors, the Glass-Steagall Act also created theFederal Deposit Insurance Corporation (FDIC) toprovide government insurance for bank deposits upto a certain amount. By protecting depositors in thisway, the FDIC greatly increased public confidence inthe banking system.

    Explaining How did the govern-ment restore confidence in the banking system?

    Managing Farms and Industry

    New legislation tried to address the economicproblems of farms and industry.

    Reading Connection Do you believe federal agenciesshould help manage the economy? Read on to learn about thefarm programs created during the First New Deal.

    Many of Roosevelt’s advisers believed that bothfarmers and businesses were suffering because priceswere too low and production too high. Severaladvisers believed competition was inefficient andbad for the economy. They wanted business and gov-ernment to work together and favored the creation offederal agencies to manage the economy.

    The Agricultural Adjustment AdministrationThe nation’s farmers had been hit hard by theDepression. One week after calling Congress into

    Reading Check

    special session, Roosevelt announced plans for a newfarm program. Working closely with the leaders of thenation’s farm organizations, Secretary of AgricultureHenry Wallace raced to complete a new farm billbefore planting season began.

    The Agricultural Adjustment Act that Rooseveltasked Congress to pass was based on a simple idea—that prices for farm goods were low because farmersgrew too much food. Under Roosevelt’s program, thegovernment would pay farmers not to raise certainlivestock, such as hogs, and not to grow certaincrops, such as cotton, corn, wheat, and tobacco. Thefarm program was administered by the AgriculturalAdjustment Administration (AAA).

    By the time the AAA was organized, however,farmers had already planted their crops for the yearand begun raising the season’s livestock. To preventcotton—which was already at a very low price—from reaching the market, the AAA paid cottonfarmers about $100 million to plow under about 25 percent of their crop. Similarly, hog producersslaughtered 6 million piglets instead of fatteningthem for market.

    Over the next two years, farmers withdrew millionsof acres from production and received more than $1billion in support payments. The program accom-plished its goal: The farm surplus fell greatly by 1936.Food prices then rose, as did total farm income, whichquickly increased by more than 50 percent.

    In a nation caught in a Depression, however, rais-ing food prices drew harsh criticism. Furthermore,not all farmers benefited. Large commercial farm-ers, who concentrated on one crop, profited morethan smaller farmers who raised several products.Worse, thousands of poor tenant farmers—many ofthem African Americans—became homeless andjobless when landlords chose their fields to be takenout of production.

    A Blueprint for Industrial Recovery The gov-ernment turned its attention from farming to manu-facturing in June 1933, when Roosevelt and Congressenacted the National Industrial Recovery Act(NIRA). The NIRA suspended the antitrust laws andallowed business, labor, and government to cooper-ate in setting up voluntary rules for each industry.

    These rules were known as codes of fair competi-tion. Some codes set prices, established minimumwages, and limited factories to two shifts per day soproduction could be spread to as many firms as pos-sible. Other codes shortened workers’ hours with thegoal of creating additional jobs. Another provision inthe law guaranteed workers the right to form unions.

    CHAPTER 10 Roosevelt and the New Deal 503

  • Under the leadership of Hugh Johnson, theNational Recovery Administration (NRA) ran theentire program. Business owners who signed codeagreements received signs displaying the NRA’s sym-bol—a blue eagle—and the slogan, “We do our part.”Since the NRA had limited power to enforce thecodes, it used public opinion to pressure companiesinto going along. It urged consumers to buy goodsonly from companies that displayed the blue eagle.

    The NRA did produce a revival of a few indus-tries, but the gains proved short-lived. Small compa-nies complained, justifiably, that large corporationswrote the codes to favor themselves. More efficientcompanies disliked price fixing, which limited com-petition and made it hard for them to increase theirmarket share by cutting prices. Employers dislikedcodes that gave workers the right to form unions andbargain collectively over wages and hours. They alsoargued that paying high minimum wages forcedthem to charge higher prices to cover their costs.

    The codes were also very difficult to administer,and business leaders often ignored them. It becameobvious that the NRA was failing when industrialproduction actually fell after the organization wasestablished. By the time the Supreme Court declaredthe NRA to be unconstitutional in 1935, it hadalready lost much of its political support.

    Examining What were the provi-sions of the Agricultural Adjustment Act and the NationalIndustrial Recovery Act?

    Reading Check

    Providing Debt Relief

    Congress created two new programs to helphomeowners and farmers who had difficulty payingtheir mortgages.

    Reading Connection Do you think governments shouldhelp people keep their own homes or farms? Why or why not?Read on to find out about the help offered during Roosevelt’sfirst term in office.

    While some of Roosevelt’s advisers believed lowprices had caused the Depression, others believedthat debt was the main obstacle to economic recov-ery. With incomes falling, people had to use most oftheir money to pay their debts and had little left overto buy goods or pay for services. Many Americans,terrified of losing their homes and farms, deliberatelycut back on their spending to make sure they couldpay their mortgages. President Roosevelt respondedto the crisis by introducing several policies intendedto assist Americans with their debts.

    The Home Owners’ Loan Corporation To helphomeowners pay their mortgages, Roosevelt askedCongress to establish the Home Owners’ LoanCorporation (HOLC). The HOLC bought the mort-gages of many homeowners who were behind in theirpayments. It then restructured them with longerterms of repayment and lower interest rates. Roughly10 percent of the nation’s homeowners received aHOLC loan.

    The HOLC did not help everyone. It only madeloans to homeowners who were still employed.When people lost their jobs and could no longer paytheir mortgages, the HOLC foreclosed on their prop-erty, just as a bank would have done. By 1938 theHOLC had foreclosed on more than 100,000 mort-gages. Despite these failures, the HOLC helped refi-nance one out of every five mortgages on privatehomes in the United States.

    The Farm Credit Administration Three daysafter Congress authorized the creation of the HOLC,it authorized the Farm Credit Administration (FCA)to begin helping farmers refinance their mortgages.Over the next seven months, the FCA lent four timesas much money to farmers as the entire banking sys-tem had done the year before. It was also able to pushinterest rates substantially lower. “I would be with-out a roof over my head if it hadn’t been for the gov-ernment loan,” wrote one of the millions of farmerswho were saved by FCA loans.

    The NRA Eagle As a symbol of the National Recovery Administration, thiseagle informed consumers about industries that were meeting the standards of the National Industrial Recovery Act. How successful was the NRA?


    504 CHAPTER 10 Roosevelt and the New DealFranklin D. Roosevelt Library

  • Although FCA loans helped many farmers in theshort term, their long-term value can be questioned.FCA loans helped less efficient farmers keep theirland, but giving loans to poor farmers meant that themoney was not available to loan to more efficientbusinesses in the economy. Although FCA loans mayhave slowed the overall economic recovery, they didhelp many desperate and impoverished people holdonto their land.

    Identifying What New Deal pro-grams helped farmers and homeowners?

    Spending and Relief Programs

    Unemployed people found work throughseveral government programs, such as the Public WorksAdministration and the Civil Works Administration.

    Reading Connection Are there projects in your commu-nity that could be completed with the help of federal programs?Read on to learn about new programs that Roosevelt andCongress created for people in need of jobs.

    While many of Roosevelt’s advisers emphasizedtinkering with prices and providing debt relief inorder to cure the Depression, others maintained thatthe fundamental cause of the Depression was lowconsumption. People were simply not buyingenough products to keep the economy going. Thefastest way out of the Depression, these advisersasserted, was to get money directly into the hands ofneedy individuals.

    Neither President Roosevelt nor his adviserswanted simply to give money to the unemployed.They argued that recipients were more likely tomaintain work skills and self-respect if they earnedtheir money. As a result, Roosevelt urged Congress toestablish a series of government agencies that wouldorganize work programs for the unemployed.

    The CCC The most highly praised New Deal workrelief program was the Civilian Conservation Corps(CCC), which combined Roosevelt’s love of natureand commitment to conservation with the need tohelp the unemployed. Beginning in March 1933, theCCC offered unemployed young men 18 to 25 yearsold the opportunity to work under the direction ofthe national forestry service planting trees, fightingforest fires, and building reservoirs.

    The young men lived in camps near their workareas and earned $30 a month. By midsummer theCCC had created some 1,500 camps. The average

    Reading Check

    The Civilian Conservation Corps FDR satisfied both the nation’sneed for employment and his love of nature with the CCC. Workersplanted forests, built reservoirs, and received a monthly salary. Inwhat year did the CCC halt operations?


    CHAPTER 10 Roosevelt and the New Deal 505

    CCC worker returned home after six months to ayear of service better nourished than before and withgreater self-respect. “I weighed about 160 poundswhen I went there, and when I left, I was 190,” saidone. “It made a man of me, all right.” By the time itclosed down in 1942, the CCC had put 3 millionyoung men to work outdoors.

    Public Works and Emergency Relief A fewweeks after authorizing the CCC, Congress estab-lished the Federal Emergency Relief Administration(FERA). FERA did not initially create projects for theunemployed. Instead, it channeled money—a half-billion dollars in all—to state and local agencies tofund their relief projects. The leader of FERA wasHarry Hopkins, whose nervous energy and sarcasticmanner put off many people. Despite his personality,Hopkins became one of the most influential people inRoosevelt’s administration.

    Half an hour after meeting with Roosevelt to dis-cuss his new job, Hopkins set up a desk in the hall-way of his new office. In the next two hours, he spent$5 million on relief projects. When critics chargedthat some of the projects did not make sense in thelong run, Hopkins replied, “People don’t eat in thelong run—they eat every day.”

    U.S. Forest Service

  • In June 1933, Congress authorized the creation ofanother federal relief agency—the Public WorksAdministration (PWA). Roosevelt knew that nearlyone-third of the nation’s unemployed were in theconstruction industry. To put them back to work, thePWA began a series of construction projects.

    Unlike other relief efforts, these projects focusedon economic investment. Workers built andimproved highways, dams, sewer systems, water-works, schools, and other government facilities.Among others, the PWA authorized dams in the Westto provide needed water and electricity for economicdevelopment. The largest project was the GrandCoulee Dam in Washington, which brought cheapelectricity to the Pacific Northwest. Other majordams included the Bonneville and Boulder (now theHoover Dam).

    In most cases, the PWA did not hire workersdirectly, but instead awarded contracts to construc-tion companies. By insisting that contractors hire African Americans, the agency broke downsome of the longstanding racial barriers in the construction trades.

    The Central Valley Project (CVP), funded in 1935by the Emergency Relief Construction Act, providedfor the construction of the Contra Costa Canal, ShastaDam, and Folsom Dam. These components of theCVP help prevent water shortages, flooding, andgenerate electrical power for California’s CentralValley and much of the San Francisco Bay area.

    The CWA By the fall of 1933, neither FERA nor thePWA had reduced unemployment significantly.Hopkins realized that unless the federal governmentacted quickly, a huge number of unemployed wouldbe in severe distress once winter began. AfterHopkins explained the situation, President Rooseveltauthorized him to set up the Civil WorksAdministration (CWA).

    Unlike the PWA, the CWA hired workers directlyand put them on the federal government’s payroll.That winter the CWA employed 4 million people,300,000 of them women. Under Hopkins’s direction,the agency built or improved 1,000 airports, 500,000miles of roads, 40,000 school buildings, and 3,500playgrounds, parks, and playing fields.

    506 CHAPTER 10 Roosevelt and the New Deal


    Civilian Conservation Corps (CCC)

    Tennessee Valley Authority (TVA)

    Agricultural Adjustment Act (AAA)


    Emergency Relief Agency


    Recovery Administration


    Deposit Insurance Corporation

    Public Works Administration (PWA)

    Civil Works Administration (CWA)

    Securities and Exchange Commission (SEC)


    March 1933

    May 1933

    May 1933

    May 1933

    June 1933

    June 1933

    June 1933

    November 1933 (cancelled 1934)

    June 1934


    Employed single men, ages 18–25, for natural resource conservation

    Built hydroelectric plants and dams aimed at improvingseven Southern states and attracting industry to the South

    Reduced agricultural surplus and raised prices for struggling farmers

    Granted federal money to state and local governments tobe used to help the unemployed

    Controlled industrial production and prices with industry-created codes of fair competition

    Guaranteed bank deposits up to $2,500

    Provided employment in construction of airports, parks,schools, and roads

    Regulated the stock market to avoid dishonest practices

    The First New Deal, 1933–1935

    1. Interpreting Charts Which of the programs listedwas cancelled the year after it was established?

    2. Examining What steps did the AAA take toensure its listed function?

  • The cost of the CWA was huge—the programspent nearly $1 billion in just five months. A formercolleague remembered Hopkins as “the kind of guythat seldom wrote a letter. He’d just call and say,‘Send a million dollars to Arkansas, and five millionto New York. People are in need.’”

    Although the CWA helped many people getthrough the winter, the program would not last muchlonger. President Roosevelt was alarmed at howquickly the agency was spending money. He did notwant Americans to get used to the federal govern-ment providing them with jobs. Warning that theCWA would “become a habit with the country,”Roosevelt insisted that it be shut down. “We must nottake the position,” the president explained, “that weare going to have a permanent depression in thiscountry.” By early April 1934, just over 5 months afterit was created, Hopkins had shut down the CWA andfired the 4 million workers the agency had hired.

    By the end of his first year in office, PresidentRoosevelt had convinced Congress to pass an aston-ishing array of programs and policies. The programspassed during the First New Deal did not restoreprosperity, but they all reflected Roosevelt’s zeal foraction, his willingness to experiment, and his open-ness to new ideas. Perhaps the most important resultof the First New Deal was a noticeable change in thespirit of the American people. Roosevelt’s actionshad inspired hope and optimism when it wasneeded most, and Americans’ faith in their nationhad been restored.

    Identifying What three New Dealprograms provided work relief to the unemployed?

    Reading Check

    CHAPTER 10 Roosevelt and the New Deal 507

    Checking for Understanding1. Vocabulary Define: apparent, ideol-

    ogy, fireside chat, fundamental.2. People and Terms Identify: New Deal,

    gold standard, bank holiday, HundredDays, Securities and Exchange Com-mission, Federal Deposit InsuranceCorporation, Agricultural AdjustmentAdministration, Civilian ConservationCorps.

    3. Summarize the different viewpoints of Roosevelt’s advisers.

    Reviewing Big Ideas4. Reviewing How did the Glass-Steagall

    Act and the FDIC help make the bank-ing industry safer?

    Critical Thinking5. Interpreting Did the CCC, CWA, and

    PWA achieve their goals? Explain your answer.

    6. Organizing Use a graphic organizerlike the one below to list the majoragencies of the First New Deal.

    Analyzing Visuals7. Analyzing Charts Examine the chart

    on page 506. How did the various agen-cies listed change the historical role ofthe federal government?

    Writing About History8. Expository Writing Research the

    Agricultural Adjustment Act by rereadingthe text on page 503. Use libraryresources and the Internet to completeyour research. Then write an articleexplaining the benefits and drawbacks of this piece of legislation. CA 11WA2.2c



    CWA Man works on a building as part of the CWA program

    For help with the concepts in this section of AmericanVision: Modern Times go to andclick on Study Central.

    Study CentralHISTORY

  • 508 CHAPTER 10 Roosevelt and the New Deal

    The TVAPerhaps no New Deal program produced as many visible benefits

    as the Tennessee Valley Authority (TVA). This dam-building project wasa bold venture to control floods, conserve forestlands, and bring elec-tricity to rural America. The TVA created a comprehensive plan fordeveloping a vast seven-state region drained by the Tennessee andCumberland Rivers and populated mainly by poor farmers workingworn-out land. The TVA erected 20 dams, employing up to 40,000workers at a time. The agency also reforested millions of acres, builtfertilizer factories and power plants, and strung thousands of miles ofwire to bring electricity to rural families for the first time.

    Flood ControlIn spring 1984, torrential rains would havebrought the Tennessee River crest to almost 20feet (6 m) above flood level. However, by stor-ing water in reservoirs behind dams such asDawson Dam and releasing it slowly, the TVAprevented most potential flooding.

    RecreationMillions of people each year fish, swim, ski,white-water raft, or go boating on the reser-voirs. Sometimes the reservoir system isreferred to as the “Great Lakes of the South.”

  • CHAPTER 10 Roosevelt and the New Deal 509

    85°W 83°W89°W 87°W91°W



    EW100 kilometers0

    Albers Conic Equal-Area projection

    100 miles0



    d R.






    ar C r.

    LittleTennessee R.


    o R.









    Norris DamCherokeeDam


    Watts BarDam




















    Oak Ridge






    Corinth HuntsvilleChattanooga

    Area supplied withpower from the TVADamSteam power plant

    The TVA’s power facilities include 29 hydroelectric dams,11 fossil-fuel plants, 3 nuclear power plants, 4 combustion-turbine plants, a pumped-storage facility, and 17,000 milesof transmission lines. These facilities provide power tonearly 8 million people in the seven-state region.

    ANALYZING THE IMPACTChecking for Understanding1. Identify In addition to creating jobs, what was the

    purpose of the TVA?

    Critical Thinking2. Evaluate Explain the importance of the TVA projects

    to people living in the region drained by theTennessee and Cumberland Rivers.

    The TVA, 1940

  • 510 CHAPTER 10 Roosevelt and the New Deal

    Guide to Reading

    ConnectionIn the previous section, you learned aboutPresident Roosevelt’s early efforts to endthe Great Depression. In this section, youwill discover how the president initiated anew series of laws as an answer to criticsand to help the economy.

    • With improvement in the economyslower than expected, Roosevelt facedopposition from several different peo-ple and groups. (p. 511)

    • In 1935 Roosevelt began the SecondNew Deal, which included the WorksProgress Administration and severalother programs. (p. 513)

    • Aided by the Wagner Act, workers usedsit-down strikes to protect their right toorganize, and union membershipincreased rapidly. (p. 514)

    • The Social Security Act guaranteedbenefits for the elderly and theunemployed. (p. 516)

    Content Vocabularydeficit spending, binding arbitration, sit-down strike

    Academic Vocabularyfinance, thereby, crucial

    People and Terms to IdentifyAmerican Liberty League, WorksProgress Administration, National LaborRelations Board, Social Security Act

    Reading ObjectivesDescribe the political challengesRoosevelt faced in the mid-1930s. Explain why the Social Security Act is still regarded as an important piece oflegislation.

    Reading StrategyOrganizing As you read about PresidentRoosevelt’s Second New Deal, completea graphic organizer like the one below byfilling in his main legislative successesduring this period.

    Preview of Events

    The Second New Deal

    April 1935Works ProgressAdministration founded

    ✦June 1935 ✦October 1935

    May 1935Supreme Courtstrikes down NIRA

    July 1935National Labor RelationsAct becomes law

    August 1935Social Security Actadopted

    November 1935John L. Lewis forms Committeefor Industrial Organization

    ✦August 1935

    Legislation Provisions

    ✦April 1935

    . The Big Idea ,Social and economic crises lead to new roles for government. Both theright and the left criticized the First New Deal. The right disliked Roosevelt’sdeficit spending. The left thought the president did not go far enough in helpingAmericans and suggested higher taxes for the wealthy, nationalization of banks,and a national pension plan. At the same time, the Supreme Court struck downparts of the First New Deal as unconstitutional. The president responded with anew set of legislative acts called the Second New Deal. The Works ProgressAdministration had already begun employing millions of Americans. Now work-ers gained more rights, including the right to form unions. The Social Security Actalso provided the nation’s first old-age and unemployment benefits.

    The following are the mainHistory–Social Science Standardscovered in this section.

    11.6.4 Analyze the effects of and thecontroversies arising from New Dealeconomic policies and the expandedrole of the federal government in soci-ety and the economy since the 1930s(e.g., Works Progress Administration,Social Security, National Labor RelationsBoard, farm programs, regional develop-ment policies, and energy developmentprojects such as the Tennessee ValleyAuthority, California Central Valley Project,and Bonneville Dam).

    11.6.5 Trace the advances and retreats oforganized labor, from the creation of theAmerican Federation of Labor and theCongress of Industrial Organizations to currentissues of a postindustrial multinational econ-omy, including the United Farm Workers inCalifornia.

  • Challenges to the New Deal

    With improvement in the economy slowerthan expected, Roosevelt faced opposition from severaldifferent people and groups.

    Reading Connection Do you know anyone who is eas-ily able to convince others to follow his or her ideas? Read onto learn about several people who used this power againstRoosevelt and his New Deal policies.

    The New Deal had been in effect for two years, yetthe economy had shown only a slight improvement.Although more than 2 million new jobs had been cre-ated, more than 10 million workers remained unem-ployed, and the nation’s total income remained abouthalf of what it had been in 1929. As one of HarryHopkins’s aides reported on a visit to Houston,Texas, “Nobody seems to think any more that thething [the New Deal] is going to work.”

    Harry Hopkins, head of the Federal EmergencyRelief Administration, worked long hours in hisWashington office, a bare, dingy room with exposedwater pipes. He preferred this space to the grandeurof the more conventional offices of high-ranking offi-cials. Here he often defended the New Deal’s workrelief programs when reporters dropped by, and helashed out at New Deal critics with headline-makingphrases. “Some people just can’t stand to see othersmake a decent living,” he said, or, “Hunger is notdebatable.”

    Sometimes Hopkins went on the road to talk abouthis job. Once, on a trip to his home state of Iowa,Hopkins was extolling New Deal policies to a sympa-thetic audience when a voice from the crowd shouted,“Who’s going to pay for it?” Without a word Hopkinspeeled off his jacket, loosened his tie, and rolled uphis sleeves. Then his voice ripped through the utterstillness, “You are!”

    —adapted from The Politics of Upheaval

    President Roosevelt appreciated Harry Hopkins’sfeistiness. He needed effective speakers who werewilling to contend with his adversaries. AlthoughRoosevelt had been tremendously popular duringhis first two years in office, opposition to his policieshad begun to grow.

    Criticism From Left and Right Hostility towardRoosevelt came from both the right wing and the leftwing of the political spectrum. People on the rightgenerally believed the New Deal had imposed toomany regulations on business.

    The right wing also included many SouthernDemocrats who believed the New Deal hadexpanded the federal government’s power at theexpense of states’ rights.

    The right wing had opposed the New Deal fromthe beginning, but by late 1934, the opposition beganto increase. To pay for his programs, Roosevelt hadbegun deficit spending. He had abandoned a bal-anced budget and begun borrowing money to payfor his programs. Many business leaders becamegreatly alarmed at the government’s growing deficit.

    In August 1934, business leaders and anti-NewDeal politicians from both parties joined together tocreate the American Liberty League. Its purpose wasto organize opposition to the New Deal and “teachthe necessity of respect for the rights of person andproperty.”

    While criticisms from the right threatened to splitthe Democratic Party and reduce business supportfor Roosevelt, another serious challenge to the NewDeal came from the left. People on the left believedRoosevelt had not gone far enough. They wanted thegovernment to intervene even more dramatically inthe economy to shift wealth from the rich to middle-income and poor Americans.

    CHAPTER 10 Roosevelt and the New Deal 511

    Harry Hopkins

  • Huey Long Perhaps the most serious threat fromthe left came from Democratic senator Huey Long ofLouisiana. Long captivated audiences with folksyhumor and fiery oratory. As governor of Louisiana,Long had championed the downtrodden. He hadimproved schools, colleges, and hospitals, and hadbuilt roads and bridges. These benefits made Longvery popular and enabled him to build a powerfuland corrupt political machine.

    Long’s attacks on the rich gave him a national fol-lowing, too. His supporters organized some 27,000“Share Our Wealth” clubs across the country.Pollsters estimated that if he ran against Roosevelt asa third-party candidate in 1936, Long would win sev-eral million votes—enough, they believed, to ensurea Republican victory.

    Father Coughlin Huey Long’s challenge to Rooseveltbecame even more credible when his supporters werecombined with those of Father Charles Coughlin, aCatholic priest in Detroit. Coughlin had a popularradio show that attracted a weekly audience of about30 to 45 million Americans.

    Originally a New Deal supporter, Coughlin hadbecome impatient with its moderate reforms. Hecalled instead for heavy taxes on the wealthy andnationalization of the banking system. In the spring

    of 1935, Coughlin organized the National Union forSocial Justice, which some Democrats feared was thefirst step to creating a new political party. By the late1930s, Coughlin began to lose influence by praisingfascism and making comments many consideredanti-Semitic.

    The Townsend Plan A third left-wing challenge toRoosevelt came from Dr. Francis Townsend, a formerpublic health official. Townsend proposed that thefederal government pay citizens over age 60 a pen-sion of $200 a month. Recipients would have to retireand spend their entire pension check each month. Hebelieved the plan would increase spending andremove people from the labor force, freeing up jobsfor the unemployed.

    Townsend’s proposal attracted millions of sup-porters, especially among the elderly, who mobilizedas a political force for the first time in American his-tory. Townsend’s program was particularly popularin the West. When combined with Long’s support inthe Midwest and South and Coughlin’s supportamong urban Catholics in the Northeast, there was areal possibility of a coalition that would drawenough votes away from Roosevelt to prevent his reelection in 1936.

    Examining What groups of peoplechallenged Roosevelt and the New Deal? What concerns didthey have?

    Reading Check

    512 CHAPTER 10 Roosevelt and the New Deal

    Critics From the Left Huey Long and Father Charles Coughlin claimedthe New Deal did not do enough to help the poor.


  • Launching the Second New Deal

    In 1935 Roosevelt began the Second NewDeal, which included the Works Progress Administrationand several other programs.

    Reading Connection What role do you think art and lit-erature should play in public life? Read on to find out about afederal program designed to employ artists, actors, andmusicians.

    Although he remained tremendously popularwith the American people, Roosevelt realized that hispolitical support could be undermined by the attacksfrom his opponents on the left and right. He was alsodisturbed by the failure of the New Deal to generatea rapid economic recovery. In 1935 he launched whatcame to be called the Second New Deal—anotherseries of programs and reforms that he hoped wouldspeed up the nation’s recovery, provide economicsecurity to every American, and ensure his re-election in 1936.

    The WPA In January 1935, Roosevelt began by ask-ing Congress for nearly $5 billion “for work reliefand to increase employment by providing usefulprojects.” Much of the money would be given to theWorks Progress Administration (WPA), a new fed-eral agency headed by Harry Hopkins. “The big bossis ready to go places in a big way,” Hopkins told acolleague.

    Over the next several years, the WPA spent $11 bil-lion. Its 8.5 million workers constructed about 650,000miles of highways, roads, and streets, 125,000 publicbuildings, and more than 8,000 parks. It built orimproved more than 124,000 bridges and 853 airports.

    The WPA’s most controversial program was“Federal Number One,” a section of the ProfessionalProjects Division that offered work to artists, musi-cians, theater people, and writers. “They’ve got to eatjust like other people,” Hopkins commented to criticsof the program. The artists created thousands ofmurals and sculptural works to beautify the wallsand halls of public buildings. Musicians established30 city symphony orchestras, as well as hundreds ofsmaller musical groups. The Federal Theater Projectfinanced playwrights, actors, and directors. The pro-gram also funded historians who interviewed formerslaves to document American history. The programhelped record important information about the his-tory of the United States, as well as improve the aes-thetic quality of many public buildings.

    The Supreme Court’s Role When Roosevelt askedCongress to fund the WPA in January 1935, he hadexpected quick action on the bill. He quickly discov-ered that opposition to hisprograms was growing inCongress. The bill creatingthe WPA did not pass untilApril 1935. By late May,Congress was preparing toadjourn for the summer,leaving Roosevelt withvery few accomplishments.

    Suddenly, the politicalsituation shifted. On May27, 1935, the Supreme Courtunanimously struck downthe National IndustrialRecovery Act in Schechter v.United States. The Schechterbrothers, who had a poultry business in Brooklyn,New York, had been convicted in 1933 of violating theNIRA’s Live Poultry Code. They had sold diseasedchickens and violated the code’s wage-and-hourprovisions. ; (See page 1006 for more about Schechter v. United States.)

    In what became known as the “sick chicken case,”the Court ruled that employees of a slaughterhousewere only involved in the slaughtering and sale ofchickens in a local area. Because employees were notinvolved in interstate commerce, their wages andhours could not be regulated by the NIRA’s code forwage-and-hour provisions. More importantly, how-ever, the court ruled that the Constitution did notallow Congress to delegate its powers to the execu-tive branch. Thus it considered the NIRA codesunconstitutional. The decision worried Roosevelt.The ruling suggested that the Court could soon strikedown the rest of the New Deal as well.

    Shortly after the Schechter decision, Rooseveltsprang into action. With the Court threatening tostrike down the New Deal and with growing chal-lenges from the left and right, the president knew heneeded a new series of programs to keep voters’ sup-port. He called congressional leaders to a WhiteHouse conference. Pounding his desk, he thunderedthat Congress could not go home until it passed hisnew bills. That summer, Congress began what thepress nicknamed the “second hundred days” andworked feverishly to pass Roosevelt’s programs.

    Examining How did the SupremeCourt’s ruling affect the New Deal?

    Reading Check

    CHAPTER 10 Roosevelt and the New Deal 513

    Student WebActivity Visit theAmerican Vision:Modern Times Web siteatand click on StudentWeb Activities—Chapter 10 for anactivity on the NewDeal.


  • The Rise of Industrial Unions

    Aided by the Wagner Act, workers used sit-down strikes to protect their right to organize, andunion membership increased rapidly.

    Reading Connection How did leaders respond tomajor railroad strikes in the late 1800s? How would yourespond to a strike if you were in a leadership position? Readon to learn about a new, effective method of striking and itsresults.

    When the Supreme Court ruled against the NIRA,it also struck down the section of the law that estab-lished labor’s right to organize. President Rooseveltand the Democrats in Congress knew that theworking-class vote was very important in winningreelection in 1936. They also believed that unionscould help end the Depression. They thought thathigh union wages would let workers spend moremoney, thereby boosting the economy. Opponents

    disagreed, arguing that high wages forced companiesto charge higher prices and to hire fewer people.Despite these concerns, Congress pushed ahead withnew labor legislation.

    The National Labor Relations Act In July 1935,Congress passed the National Labor Relations Act,also called the Wagner Act after its author,Democratic senator Robert Wagner of New York. Theact guaranteed workers the right to organize unionswithout interference from employers and to bargaincollectively. The law set up the National LaborRelations Board (NLRB), which consists of fivemembers appointed by the United States Presidentand approved by the Senate. Members serve five-year terms and receive assistance from 33 regionaldirectors. The NLRB organized factory elections bysecret ballot to determine whether workers wanted aunion. The NLRB then certified the successfulunions.

    The new law also set up a process whereby dissat-isfied union members could take their complaints to

    514 CHAPTER 10 Roosevelt and the New Deal

    BRIEF RESPITE FOR FDREnjoying a short break fromthe pressures of dealing withthe country’s economic woes,President Franklin D. Rooseveltholds his beloved dog Falawhile chatting with the grand-daughter of the family garden-er at his Hyde Park, New York,estate.The president and hisstaff, with the help of the press,took great pains to conceal hispolio-induced paralysis. He wasnever filmed or photographedbeing wheeled or carried fromplace to place.This rare snap-shot is one of the few known toexist that shows Rooseveltseated in his wheelchair.


  • Trying to Improve Working Conditions

    Autoworkers stage a sit-down strikein 1937 in Flint, Michigan.

    Source: Historical Statistics of the United States: Colonial Times to 1970.



























    Union Membership, 1933–1943

    1. Interpreting Graphs Approximately how manypeople were union members in 1936?

    2. Understanding Cause and Effect Why did unionmembership increase steadily after 1936?

    ing but refused to leave the factory. This stopped thework flow and also prevented the factories frombringing in replacement workers. A few days later,the workers at the company’s plant in Flint,Michigan, launched their own sit-down strike, as thepress quickly dubbed it. Workers at other plants fol-lowed suit or carried out traditional strikes. BruceBliven, editor of The New Republic magazine, wasamong the few journalists allowed into the plant.Regarding the condition of the strike, he reported:

    “The place was remarkably neat and tidy, at leastas clean as it is under normal conditions. Beds weremade up on the floor of each car, the seats beingremoved if necessary. . . . I could not see—and Ilooked for it carefully—the slightest damage doneanywhere to the General Motors Corporation. Thenearly completed car bodies, for example, were asclean as they would be in the salesroom, their glassand metal shining.”

    —quoted in The Great Depression

    Violence broke out in Flint when police launched atear gas assault on one of the smaller plants. The

    binding arbitration, in which a neutral party wouldlisten to both sides and decide the issues. The NLRBwas authorized to investigate the actions of employ-ers and had the power to issue “cease and desist”orders against unfair practices.

    The CIO The Wagner Act stimulated a burst oflabor activity. In the mid-1930s, the United MineWorkers union, led by John L. Lewis, began workingwith several other unions to organize workers inindustries where unions did not yet exist. Theyformed the Committee for Industrial Organization(CIO) in 1935.

    The CIO set out to organize industrial unions, orunions that included all workers in a particularindustry, skilled and unskilled. The CIO began byfocusing on the automobile and steel industries—two of the largest industries in America where work-ers were not yet organized into unions.

    Sit-Down Strikes In late December 1936, officialsat the General Motors auto-body plant in Cleveland,Ohio, demoted two union men. In an unplannedprotest, a shift of 135 workers sat down and launchedan unprecedented kind of strike. They stopped work-


  • strikers turned back the attack with whatever was athand—door hinges, bottles, stones, and balls of ice.The police wounded more than a dozen strikers withgunfire, but the strike held. On February 11, 1937, thecompany gave in and recognized the CIO’s UnitedAuto Workers (UAW) as its employees’ sole bargain-ing agent. The UAW quickly became one of the mostpowerful unions in the United States.

    The United States Steel Corporation, the nation’slargest steel producer, decided it did not want torepeat the General Motors experience with strikingworkers. The company recognized the CIO’s UnitedSteelworkers of America, which won a 40-hour work-week and a 10-percent pay raise. Smaller steel pro-ducers did not initially recognize unions, and strikesbroke out around the country. By 1941, however, thesteelworkers’ union had contracts with the entireindustry.

    In the late 1930s, workers in other industries alsosat down at their jobs to gain union recognition. Inonly six years, total union membership tripled fromroughly 3 million in 1933 to about 9 million in 1939.In 1938 the CIO changed its name to the Congress ofIndustrial Organizations and became a federation ofindustrial unions.

    Examining What provisions did theNational Labor Relations Act establish?

    Reading Check

    The Social Security Act

    The Social Security Act guaranteed benefitsfor the elderly and the unemployed.

    Reading Connection Do you think that the elderly andothers in need receive enough government assistance? Read onto find out about a program to help the elderly and people withdisabilities.

    After passing the Wagner Act, Congress beganwork on a bill that ranks as one of the most importantpieces of legislation in American history. This was theSocial Security Act, which became law in August1935. Its major goal was to provide some security forthe elderly and for unemployed workers.

    With the support of Secretary of Labor FrancesPerkins, Roosevelt and his team spent monthspreparing the bill. The framers viewed it primarily asan insurance bill. Workers earned the right to receivebenefits because they paid premiums. The SocialSecurity Act provided two social insurance pro-grams. A federal program provided retirement insur-ance. The individual states administered a programfor unemployment compensation that used federalfunds. The legislation also provided modest welfarepayments to other needy people, including those

    with disabilities and poorfamilies with young depend-ent children.

    The core of Social Securitywas the monthly retirementbenefit, which people couldcollect when they stoppedworking at age 65. Anotherimportant benefit––unem-ployment insurance––sup-plied a temporary income tounemployed workers lookingfor new jobs. Some critics didnot like the fact that themoney came from payrolltaxes imposed on workersand employers, but toRoosevelt these taxes werecrucial: “We put those payrollcontributions there so as togive the contributors a legal,moral, and political right tocollect their pensions and theunemployment benefits.”


    Combated unemployment; created jobs throughout economy

    Brought electricity to isolated agricultural areas

    Created unemployment system, disability insurance, old-age pension, and child wel-fare benefits

    Eliminated unfair practices and abuses of utility companies

    Strengthened the Federal Reserve

    Assisted poor families and sharecroppers in beginning new farms or purchasing land


    Works Progress Administration (WPA)

    Rural Electrification Administration (REA)

    Social Security Act

    Public Utility Holding Company Act

    Banking Act

    Resettlement Act

    The Second New Deal, 1935

    1. Interpreting Charts What did the Resettlement Acttry to accomplish?

    2. Understanding Cause and Effect How did these actscreate a safety net for American citizens?

    516 CHAPTER 10 Roosevelt and the New Deal

  • Social Security President Roosevelt signs theSocial Security Act of 1935 among supporters of theact. While critics did not like that contributions werepayroll deducted, Roosevelt argued that this was vitalto the social security program. Why did Rooseveltbelieve it was so important for contributions to bepayroll deducted?

    Since the people receiving benefitshad already paid for them, heexplained, “no politician can everscrap my social security program.”What Roosevelt did not anticipatewas that in the future, Congresswould borrow money from the SocialSecurity fund to pay for other pro-grams while failing to raise payrolldeductions enough to pay for thebenefits.

    The Social Security Act created a Social SecurityBoard (SSB) to oversee the administration of the newprogram. In 1939 the SSB became part of the newFederal Security Agency. Six years later, in 1946, theSSB was reorganized and renamed the SocialSecurity Administration, a designation it has keptuntil today.

    Social Security helped many people, but initially itleft out many of the neediest members of society—farm and domestic workers. Some 65 percent of allAfrican American workers in the 1930s fell into thesetwo categories. In 1939 the act was expanded to alsoinclude dependents and survivors of workers. It wasnot until 1950 that the coverage was again expanded,

    this time to include full-time farm and domesticworkers. Nevertheless, Social Security establishedthe principle that the federal government should beresponsible for those who, through no fault of theirown, are unable to work.

    Explaining How did the SocialSecurity Act protect workers?

    Reading Check

    CHAPTER 10 Roosevelt and the New Deal 517

    Checking for Understanding1. Vocabulary Define: deficit spending,

    financed, thereby, binding arbitration,sit-down strike, Social Security Act,crucial.

    2. People and Terms Identify: AmericanLiberty League, Works ProgressAdministration, National LaborRelations Board.

    3. Contrast the ideas of Father CharlesCoughlin, Senator Huey Long, and Dr. Francis Townsend.

    Reviewing Big Ideas4. Explaining How did the New Deal

    contribute to the growth of industrialunions?

    Critical Thinking5. Analyzing Why

    is the Social Security Act an importantpiece of legislation?

    6. Organizing Use a graphic organizersimilar to the one below to list the polit-ical challenges Roosevelt faced in hisfirst term.

    Analyzing Visuals7. Analyzing Graphs Examine the photo

    and graph on page 515. How did suc-cessful strikes such as the sit-downstrike shown in the photograph lead toa rise in union membership?

    CA CS1; HI1

    Writing About History8. Descriptive Writing Imagine you are

    either a General Motors worker or amember of management during the sit-down strike in Flint, Michigan. Write aletter to your local newspaper describ-ing the strike and explaining youractions during it. CA 11WA2.1c

    Political Challenges


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    Study CentralHISTORY

  • Steps To . . . a Strong Federal Government

    The growth of federal power began with thewriting of the Constitution itself. When theAmerican Revolution began, the individual stategovernments were very suspicious of centralizedpower. They did not want to create a strong nationalgovernment that might endanger their liberties.

    Federalism In drafting the new Constitution in1787, the Founders adopted the idea of federalism.Federalism refers to a system under which power isshared between the national or federal governmentand the state governments. The Constitution

    divides government authority. It givesthe national government specific

    powers but reserves all other pow-ers to the states or to the people.

    The Founders saw federalism as a way to forge astrong union while preserving the states as a checkon federal power.

    Necessary and Proper Clause The Constitutionalso gives the federal government implied powers.These are powers that the government has, eventhough they are not written down, because withoutthem the government could not carry out the powersit has been expressly given.

    The basis for implied powers is theConstitution’s necessary and proper clause (art. 1,sec. 8). This clause gives Congress the power tomake laws that are “necessary and proper” for it toexecute its powers under the Constitution. The nec-essary and proper clause has been used many timesto expand the federal government’s power.

    The debate over implied powers began in GeorgeWashington’s administration in a dispute about the

    Why It Matters The New Deal dramatically expanded the federal government’s role. Toaddress the Depression, federal programs were directed at everything from the economy to caring for thecountry’s unemployed, aged, and sick. Many critics opposed this new federal activity, and the SupremeCourt struck down several New Deal programs as unconstitutional. At the same time, the Court also issueddecisions that dramatically increased the federal government’s role. The debate over the power and role ofthe federal government echoed debates from earlier times in the nation’s history.

    The Role of the FederalGovernment

    “The government of the United States, then, thoughlimited in its powers is supreme; and its laws, whenmade in pursuance of the Constitution, form thesupreme law of the land . . . ”

    —U.S. Supreme Court Chief Justice John Marshall, 1819


  • creation of a national bank. Alexander Hamiltonbelieved a bank was convenient and not prohibitedin carrying out the government’s treasury func-tions, while Thomas Jefferson believed the federalgovernment could not create a bank since it was not absolutely necessary. Washington sided withHamilton, and the bank was created.

    The Supreme Court, under the leadership ofChief Justice John Marshall, strongly defended theidea that the necessary and proper clause gave thefederal government wide-ranging powers. In 1819,in McCulloch v. Maryland, the Court ruled that thenecessary and proper clause allowed the federalgovernment to use any method that was convenientfor carrying out its express powers, as long as it wasnot specifically forbidden in the Constitution.

    The Commerce Clause Another clause in theConstitution that has been used to expand the fed-eral government’s power is the commerce clause.The Constitution gives the federal government thepower to regulate commerce with foreign nationsand between the states. Over time, the definition ofthe word commerce has played an important role indetermining the powers of the federal government.

    In 1824 the Supreme Court ruled in Gibbons v.Ogden that the commerce clause meant that any-thing crossing state lines could be regulated by thefederal government. In the late 1800s and early1900s, however, the Court ruled that federal lawsregulating industry, agriculture, child labor, and

    unions were unconstitutional because such activi-ties took place within states, not across state lines.During the New Deal, however, the SupremeCourt’s opinion shifted. In 1937 it ruled in NLRB v.Jones and Laughlin Steel that the commerce clauseallowed the federal government to regulate indus-try within states.

    The Fourteenth Amendment Perhaps themost dramatic increase in federal power took placefollowing the Civil War. The new FourteenthAmendment banned states from depriving peopleof their life, liberty, or property “without dueprocess of law” and prohibited states from denyingpeople the “equal protection of the laws.” Both thedue process clause and the equal protection clausehave been used repeatedly by the Supreme Court toextend the Bill of Rights to the states and to end seg-regation of African Americans. As a result, by thelate twentieth century, the federal government hadacquired powers far beyond those envisioned in1787.

    Checking for Understanding1. What is the necessary and proper clause in the Constitution?2. In what ways did the Supreme Court use the commerce


    Critical Thinking1. Do you agree with Jefferson’s or Hamilton’s view of implied

    powers? Explain. 2. How did the Fourteenth Amendment increase federal power?

    Powers of theNational Government

    Powers Shared by Nationaland State Governments

    Powers Reserved forState Governments

    • Regulate interstate and foreign trade

    • Raise/support armed forces

    • Declare war/make peace

    • Coin and print money

    • Grant patents/copyrights

    • Establish federal courts

    • Govern territories and admit new states

    • Set weights/measures

    • Establish a postal system

    • Regulate immigration

    • Collect taxes

    • Borrow money

    • Make and enforce laws

    • Establish and maintain courts

    • Charter banks

    • Provide for public welfare

    • Regulate trade within the state

    • Write business/corporate laws

    • Establish and maintain public


    • Set up local governments

    • Pass marriage/divorce laws

    • Conduct elections

    • Ratify constitutional


    The Federal System

  • Guide to Reading

    ConnectionIn the previous section, you learned aboutthe Second New Deal. In this section, youwill discover how President Rooseveltfaced the problems brought by SupremeCourt decisions and a new recession.

    • After winning reelection in 1936,Roosevelt faced controversies over theplan to increase the size of theSupreme Court and over a recessioncaused by his desire to stop deficitspending. (p. 521)

    • Roosevelt and his colleagues continuedto push for reforms in housing, farm-ing, and labor. (p. 523)

    • The New Deal expanded the role of thefederal government in society and theeconomy by providing a safety net formany people. (p. 525)

    Content Vocabularybroker state, safety net

    Academic Vocabularydemonstrate, enhance, mediate

    Names and TermsFrances Perkins, court-packing, HenryMorgenthau, John Maynard Keynes

    Reading Objectives• Explain the achievements and the

    defeats of Roosevelt’s second term.

    • Analyze how the New Deal affectedAmericans’ sense of security and theirattitude toward the role of government.

    Reading StrategyTaking Notes As you read about theNew Deal Coalition, use the major head-ings of the section to create an outlinesimilar to the one below.

    Preview of Events

    The New DealCoalition

    520 CHAPTER 10 Roosevelt and the New Deal

    1936FDR reelected

    1937Court-packing bill defeated; FarmTenant Act; National Housing Act

    1937RooseveltRecession begins

    1938Fair Labor StandardsAct passed

    ✦1938✦1936 ✦1937

    . The Big Idea ,Social and economic crises lead to new roles for government. PresidentRoosevelt won overwhelmingly in the 1936 election, but he lost support with hiscourt-packing plan and a recession that hit the following year. ConservativeDemocrats now began to work with Republicans to oppose new legislation. Thepresident tried to push ahead with more New Deal programs to strengthen theeconomy and aid Americans. He was able to get a housing bill, a loan programfor farmers, and a revised labor law approved, but Congress balked at most ofhis bills. Still, the role of the federal government had increased considerably, andthe nation began to expect the government to provide a safety net for averageAmericans.

    The following are the mainHistory–Social Science Standardscovered in this section.

    11.6.4 Analyze the effects of and thecontroversies arising from New Dealeconomic policies and the expandedrole of the federal government in soci-ety and the economy since the 1930s(e.g., Works Progress Administration,Social Security, National Labor RelationsBoard, farm programs, regional develop-ment policies, and energy developmentprojects such as the Tennessee ValleyAuthority, California Central Valley Project,and Bonneville Dam).

    11.6.5 Trace the advances and retreats oforganized labor, from the creation of theAmerican Federation of Labor and theCongress of Industrial Organizations to currentissues of a postindustrial multinational econ-omy, including the United Farm Workers inCalifornia.

    The New Deal Coalition

    I. Roosevelt’s Second TermA.B.C.


  • “.. . go homeand turnLincoln’s

    picture to the wall.”

    —Robert Vann

    Roosevelt’s Second Term

    After winning reelection in 1936, Rooseveltfaced controversies over the plan to increase the size ofthe Supreme Court and over a recession caused by hisdesire to stop deficit spending.

    Reading Connection Describe a time you had to reacha consensus within a group. Read on to learn how Roosevelttried to gain Supreme Court approval for his programs.

    A dramatic shift in party allegiance by AfricanAmericans was part of a historic political realign-ment triggered by FDR’s New Deal. As the election of1936 approached, millions of voters believed theyowed their jobs, mortgages, or salvaged bankaccounts to the New Deal.

    One day in 1932, Emma Guffey Miller, the sister ofDemocratic senator Joseph Guffey, was having hernails done at a salon in Pittsburgh. Her manicuristmentioned that Robert Vann, publisher of thePittsburgh Courier, a leading African American news-paper, wanted to see the senator. When SenatorGuffey met Vann, Vann told him that the Democratscould win most of the 280,000 African American votesin Pennsylvania if they made the effort.

    Since the Civil War, most African Americans hadvoted for the Republicans. Now times had changed.The Depression had hit the African American commu-nity very hard, and Republicans had done little to help.In talks to African American voters, Vann often said,“My friends, go home and turn Lincoln’s picture to thewall. That debt has been paid in full.”

    Guffey was impressed. He persuaded party leadersto appoint Vann to lead “the first really effective Negrodivision a Democratic campaign committee ever had.”By 1936 the majority of African American voters hadswitched their support to the Democratic Party.

    —adapted from The Politics of Upheaval

    The white South, which had been the core of theDemocratic Party, now became just one part of a newcoalition that included farmers, laborers, AfricanAmericans, new immigrants, ethnic minorities,women, progressives, and intellectuals. First LadyEleanor Roosevelt helped bring about the change inthe African American and women’s vote. She had

    demonstrated strong sympathies toward thesegroups, with whom she spoke in her many tours ofthe country. She recounted her experiences to herhusband and persuaded him to address at least someof their problems in his New Deal programs.

    African Americans and women made some mod-est gains during the New Deal. For example, thepresident appointed a number of African Americansto positions in his administration; informally, theybecame known as the Black Cabinet. Roosevelt alsotried to ensure that New Deal relief programs did notexclude African Americans.

    A similar approach guided New Deal policiestoward women. Roosevelt appointed the first womanto a cabinet post, Secretary of Labor Frances Perkins,and assigned many women to lower-level jobs in thefederal bureaucracy. Even so, the general view wasthat women did not need federal government actionto ensure equal treatment, but rather to provide cer-tain protections for them.

    The Election of 1936 To oppose Roosevelt, theRepublicans nominated Kansas Governor AlfredLandon. Although Landon favored some New Dealpolicies, he declared it was time “to unshackle initia-tive and free the spirit of American enterprise.” Asthe election neared, Landon became more aggressive.The New Deal “violates the basic ideals of theAmerican system,” he declared. “If we are to pre-serve our American form of government, this admin-istration must be defeated.”

    Despite Landon’s attacks, Roosevelt and the NewDeal remained overwhelmingly popular with theAmerican people. The challenge from left-wing radi-cals also proved much weaker than expected—pri-marily because Huey Long had been assassinated inLouisiana in September of 1935. Long’s supporters

    CHAPTER 10 Roosevelt and the New Deal 521

  • joined with those of Father Coughlin and FrancisTownsend in the summer of 1936 to form a new polit-ical movement called the Union Party, but without astrong leader, the party had no chance.

    On Election Day, Roosevelt swept to victory in oneof the largest landslides in American history. He wonmore than 60 percent of the popular vote and carriedevery state except Maine and Vermont.

    The Court-Packing Plan Although popular opin-ion supported most of the president’s programs, theSupreme Court saw things differently. In January1936, the Court declared the Agricultural AdjustmentAct to be unconstitutional. With cases pending onSocial Security and the Wagner Act, it seemed likelythe Court would strike down nearly all of the majorNew Deal programs.

    Roosevelt was furious that a handful of jurists,“nine old men” as he called them, were blocking thewishes of a majority of the people. After winningreelection, he decided to try to change the politicalbalance on the Supreme Court. Claiming that theCourt was overburdened with work, Roosevelt sentCongress a bill to increase the number of justices: Ifany justice had served for 10 years and did not retirewithin six months after reaching the age of 70, thepresident could appoint an additional justice to theCourt. Since four justices were in their 70s and twomore were in their late 60s, the bill, if passed, would

    allow Roosevelt to quickly appoint as many as sixnew justices.

    The court-packing plan, as the press called it, wasRoosevelt’s first serious political mistake as presi-dent. Although Congress had the power to changethe size of the Court, the scheme created the impres-sion that the president was trying to interfere withthe Constitution’s separation of powers and under-mine the Court’s independence.

    The issue split the Democratic Party. ManySouthern Democrats feared Roosevelt’s plan wouldput justices on the Court who would overturn segre-gation. At the same time, African American leadersworried that once Roosevelt set the precedent ofchanging the Court’s makeup, a future presidentmight pack the Court with justices opposed to civilrights. Many Americans believed the plan wouldgive the president too much power.

    Despite the uproar over the scheme, Roosevelt’sactions appeared to force the Supreme Court to backdown. In April 1937, the Court upheld the WagnerAct, and in May it declared the Social Security Act tobe constitutional. Shortly afterward, one of the moreconservative judges resigned, enabling Roosevelt toappoint a supporter of the New Deal to the Court.

    In mid-July, the Senate quietly killed the court-packing bill without bringing it to a vote. AlthoughRoosevelt had achieved his goal of changing theCourt’s view of the New Deal, the fight over the planhad hurt his reputation with the American peopleand encouraged conservative Democrats in