The Second New Deal

Chapter 13 Section 2

Angela Brown

New Deal Falters

Criticism mounted when New Deal programs failed to bring significant economic improvement

Many worried about increasing power New Deal agencies gave government

Supreme Court attacked programs

1935 Court declared the NIRA unconstitutional because it gave the President lawmaking power and regulated local, rather than interstate commerce

1936 the court ruled that the tax funding AAA subsidies to farmers unconstitutional

Time to reassess

A Second New Deal

Despite problems – midterm elections 1934 showed overwhelming nationwide support for FDR’s administration

1935 launched Second New Deal with even bolder burst of legislation

New and Expanded Agencies

Works Progress Administration (WPA) – 1935 – lasted 8 years, work for 8 million, constructed 20,000 playgrounds, schools, hospitals, airfields, supported creative work of artists and writers

Original AAA ignored farm workers that did not own land

1935 Resettlement Administration – loaned money to owners of small farms and helped resettle tenants and sharecroppers on productive land

1937 Farm Security Administration (FSA) – replaced resettlement administration – loaned more than $1 billion to farmers and set up camps for migrant workers

New Labor Legislation

1935 Congress passed National Labor Relations Act called Wagner Act

Legalized practices including collective bargaining and closed shops (workplaces open only to union members), outlawed spying on union members and blacklisting, set up National Labor Relations Board (NLRB) to enforce provisions

1938 Fair Labor Standards Act banned child labor and established minimum wage

Social Legislation

1935 Social Security Act established Social Security System – provided regular payments to people who could not support themselves

3 types of Insurance:1.Old Age Pensions and Survivors’ Benefits –

(workers and employers paid equally) – eligible for benefits at age 65 – farm and domestic workers not covered until 1954

2. Unemployment Insurance – funded by tax from employers with more than 8 employees – government distributed money to workers who lost jobs – states administered programs with federal guidance and financial support

3. Aid for Dependent Children, the Blind, and Physically Disabled – federal money grants

*John Maynard Keynes

These Programs were expensive. Government paid through deficit spending. 1932 federal deficit was $461 million 1936 = $4.4 billion British economist John Maynard Keynes

argued that deficit spending was needed to end the depression.

Keynes stated putting people to work on public projects put money into the hands of consumers who would buy more goods, stimulating the economy.

Keynes called this theory pump priming.

1936 Election

FDR won every state except Maine and Vermont (523 – 8 electoral votes)

Against Kansas Governor Alfred Landon Showed support for New Deal although it

still had many critics

The Court-Packing Scheme

1937 proposed major court reform bill add 6 new judges to lighten the load one for every judge over 70 really wanted to pack court with judges favorable to

New Deal Critics from all sides – would undermine separation

of power – create dictatorship in U.S.

Court-Packing

Forced to withdraw bill = political damage for years to come

The court however became more favorable to FDRs ideas

Court began to uphold Second New Deal – whether due to public opinion or it being better drafted?

Some older judges retired FDR appointed those favorable to New Deal

http://www.law.umkc.edu/faculty/projects/ftrials/conlaw/courtpacking.jpg

http://www.nisk.k12.ny.us/fdr/ideas/portfolio/vandersee/gifs/37081803.GIF