The New DealThe New Deal

An Effective Response to the An Effective Response to the Great Depression?Great Depression?

But First…But First…

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What was the New Deal?What was the New Deal?

Campaign Slogan in 1932Campaign Slogan in 1932 No Ideology at first: ExperimentationNo Ideology at first: Experimentation

““This nation asks for action and action now.”This nation asks for action and action now.”

Becomes synonymous with American Becomes synonymous with American “liberalism”“liberalism” Assistance to poor and unemployedAssistance to poor and unemployed Protect rights of organized laborProtect rights of organized labor Public housingPublic housing Subsidized agricultureSubsidized agriculture Regulation of the economyRegulation of the economy

Origin of the New DealOrigin of the New Deal

FDR had no clear philosophy: FDR had no clear philosophy: experimentation – the experimentation – the “quarterback analogy”“quarterback analogy” ““The New Deal will never be The New Deal will never be

understood by anyone who looks for a understood by anyone who looks for a single thread of policy, a far-reaching, single thread of policy, a far-reaching, far-seeing plan. It was a series of far-seeing plan. It was a series of improvisationsimprovisations…”…”

Richard HofstadterRichard Hofstadter(p. 431 for those interested!)(p. 431 for those interested!)

Origins of the New DealOrigins of the New Deal

European ModelsEuropean Models Progressive Era ReformsProgressive Era Reforms

Poverty not a moral failurePoverty not a moral failure Government regulationGovernment regulation

Mobilization for WWIMobilization for WWI Cooperation between public and privateCooperation between public and private War BoardsWar Boards

Two “New Deals”Two “New Deals”

The First New DealThe First New Deal 1933-341933-34 Stop the panicStop the panic The 100 DaysThe 100 Days

The First New DealThe First New Deal

Unemployed in line at a soup kitchen

The 100 DaysThe 100 Days

National Bank National Bank HolidayHoliday

A “run” on the bank

“100 DAYS” OF ACTIONMarch 9—June 16, 1933

FINANCIAL REFORMS March 9 Emergency

Banking Act March 20 Government

Economy Act April 19 Abandonment

of the Gold Standard May 27 Securities Act June 5 Abrogation of

Gold Payment Clause June 13 Home Owners

Loan Act June 16 Glass-Steagall

Banking Act (F.D.I.C.) March 22 Beer-Wine

Revenue Act

JOBS AND RELIEF March 31 Creation of

Civilian Conservation Corps May 12 Federal Emergency

Relief Act June 16 National Industrial

Recovery Act June 16 Emergency

Railroad Transportation Act Agr. REFORMS

May 12 Agricultural Adjustment Act

May 12 Emergency Farm Mortgage Act

May 18 Tennessee Valley Authority Act

June 16 Farm Credit Act

The First New DealThe First New Deal

Two Two CornerstonesCornerstones First First

Agricultural Agricultural Adjustment Adjustment ActAct

National National Industrial Industrial Recovery ActRecovery Act

First Agricultural Adjustment ActFirst Agricultural Adjustment Act

Raise farm prices Raise farm prices by reducing supplyby reducing supply

Farmers paid “not Farmers paid “not to farm”to farm” ¼ of cotton crop ¼ of cotton crop

plowed underplowed under 6 million pigs 6 million pigs

slaughteredslaughtered $100,000,000 paid $100,000,000 paid

out first yearout first year

National Industrial Recovery ActNational Industrial Recovery Act

Replace competition with Replace competition with cooperationcooperation

Industry-wide “codes of Industry-wide “codes of fair competition”fair competition”

Reduce hours of workReduce hours of work Minimum wage (.40)Minimum wage (.40) Collective bargaining Collective bargaining

guaranteedguaranteed No “yellow dog” contractsNo “yellow dog” contracts Established PWA: $4 Established PWA: $4

Billion on 34,000 Billion on 34,000 construction projectsconstruction projects

First New DealFirst New Deal

Stopped the panic, especially in Stopped the panic, especially in financial community, “runs” on banksfinancial community, “runs” on banks

Created support for FDRCreated support for FDR Didn’t end or even put a dent in the Didn’t end or even put a dent in the

depressiondepression UnemploymentUnemployment

1933: 12,830,0001933: 12,830,000 24.9%24.9% 1934: 11,340,0001934: 11,340,000 21.7%21.7%

The Second New DealThe Second New Deal

Cornerstones of first Cornerstones of first New Deal declared New Deal declared unconstitutionalunconstitutional Butler v. U.S. strikes Butler v. U.S. strikes

down NIRAdown NIRA Schecter v. U.S. Schecter v. U.S.

strikes down AAAstrikes down AAA

Critics from right Critics from right and leftand left

Father Coughlin

Huey Long

The Second New DealThe Second New Deal

Second AAASecond AAA Wagner Labor Relations ActWagner Labor Relations Act Social Security Social Security Works Progress Administration (WPA)Works Progress Administration (WPA) Keynesian EconomicsKeynesian Economics

Second AAASecond AAA

Replace first AAAReplace first AAA Introduced “parity” price subsidies Introduced “parity” price subsidies

for farm goodsfor farm goods Farm subsidies become permanentFarm subsidies become permanent

Fulton CountyFulton County GeorgiaGeorgia

Wagner Labor Relations ActWagner Labor Relations Act

Restored section 7a of the Restored section 7a of the NIRA on laborNIRA on labor

Known as the “Magna Known as the “Magna Carta” of organized labor.Carta” of organized labor. Legalized collective bargainingLegalized collective bargaining Prohibited “yellow dog” Prohibited “yellow dog”

contracts, blacklists, contracts, blacklists, “company unions”“company unions”

Established the NLRB – Established the NLRB – National Labor Relations Board National Labor Relations Board – to supervise and oversee– to supervise and oversee

Social SecuritySocial Security

Monthly payroll Monthly payroll deductiondeduction

Federal Old-Age, Federal Old-Age, Survivors, and Disability Survivors, and Disability Insurance Insurance

Unemployment benefits Unemployment benefits Temporary Assistance for Temporary Assistance for

Needy Families Needy Families One generation pays for One generation pays for

the nextthe next

Works Progress Administration Works Progress Administration (WPA)(WPA)

Largest public works program in historyLargest public works program in history $11 billion to employ 7 million, 1935-1942$11 billion to employ 7 million, 1935-1942

What cost $What cost $11,000,000,00011,000,000,000 in 1936 would cost in 1936 would cost $$168,473,306,927.94168,473,306,927.94 in 2009 in 2009. .

Jobs for nearly all kinds of peopleJobs for nearly all kinds of people Highway (651,087 miles; 124,031 bridges) Highway (651,087 miles; 124,031 bridges) Building construction (125,110 public buildings, 8,192 Building construction (125,110 public buildings, 8,192

parksparks 853 airports including LaGuardia in NYC and National in 853 airports including LaGuardia in NYC and National in

D.C. D.C. Slum clearance, reforestation, and rural rehabilitationSlum clearance, reforestation, and rural rehabilitation The Federal Arts Project The Federal Arts Project The Federal Theatre Project The Federal Theatre Project The Federal Writers' ProjectThe Federal Writers' Project The Federal Music Project The Federal Music Project

New Deal ImagesNew Deal Images

Was the New Deal Was the New Deal Effective?Effective?

19371937 7,700,0007,700,000 14.3%14.3% 19381938 10,390,00010,390,000 19.0%19.0% 19391939 9,480,0009,480,000 17.2%17.2% 19401940 8,120,0008,120,000 14.6%14.6% 19411941 5,560,0005,560,000 9.9%9.9%