Topic 7.10 Notes – The New Deal

What the New Deal Was

Roosevelt took office with banks failing, unemployment near 25 percent, farm prices collapsing, weak consumer demand, and local charities and state governments overwhelmed. He did not arrive with one master plan. He experimented.

The best way to organize it is the Three Rs:

• Relief gave immediate help to unemployed and poor Americans.
• Recovery tried to restart production, raise prices, and create jobs.
• Reform changed banking, labor, and markets to prevent another disaster.

This created New Deal liberalism. The federal government should regulate capitalism, protect labor, and provide some economic security. It still kept private property and private business. That’s a favorite AP distinction. The New Deal expanded capitalism’s safety rails. It did not create socialism.

Roosevelt’s style

1. First Hundred Days from March to June 1933 brought a flood of emergency laws.
2. Roosevelt closed banks in a bank holiday to stop panicked withdrawals.
3. Congress passed major recovery and relief laws fast because the crisis was severe.
4. Roosevelt used fireside chats on radio to explain policy in plain language and rebuild trust.

People call many programs alphabet agencies because of initials like CCC, AAA, TVA, and WPA.

The Twenty-First Amendment repealed Prohibition in 1933. It mattered as an early break from the 1920s and brought back tax revenue from legal alcohol.

Major New Deal Programs and What They Did

Many programs fit more than one R.

Relief and public jobs

• FERA gave federal money to states for direct relief.
• CCC hired young men for conservation work like planting trees and fighting erosion.
• CWA created short-term emergency winter jobs.
• PWA funded large public construction like schools, dams, and bridges.
• WPA became the biggest work program. It built roads, schools, airports, and parks.
  • It also funded the Federal Writers’ Project, Federal Theatre Project, public murals, and oral histories of formerly enslaved people.

Banking and financial reform

• Emergency Banking Relief Act reopened only sound banks after inspection.
• Glass-Steagall Banking Act separated commercial and investment banking.
• FDIC insured deposits, which restored confidence.
• Securities Act of 1933 required honest financial disclosure.
• SEC regulated the stock market.
• Leaving the gold standard and the Gold Reserve Act gave the government more flexibility to fight deflation.

Agriculture and rural recovery

Farmers were already struggling before 1929, and the Dust Bowl made things worse. Migrant families and poor farmworkers became some of the clearest symbols of Depression hardship.

• AAA paid farmers to reduce production so prices would rise.
• Farm Credit Administration helped refinance farm debt.
• Resettlement Administration and Farm Security Administration aided poor farmers and migrants.

Dorothea Lange, Migrant Mother

Industry, labor, and regional development

• NIRA tried to restart industry.
• Its NRA used the Blue Eagle and codes for wages, hours, and prices. Section 7(a) supported workers’ right to organize.
• TVA built dams, controlled floods, and brought cheap electricity to the Tennessee Valley.
• REA extended electricity to rural areas.

Housing and home finance

• HOLC refinanced mortgages to prevent foreclosure.
• FHA insured mortgages and expanded home loans.
• Redlining was a major limit. Federal housing policy often denied loans in Black neighborhoods and reinforced segregation.

The Second New Deal and the Fight Over Its Limits

By 1935, recovery was incomplete, labor unrest was growing, and the Supreme Court had struck down early programs.

• Wagner Act protected unions and created the NLRB.
• CIO organized whole industries, not just skilled trades.
• The Flint sit-down strike helped the United Auto Workers win recognition.
• Social Security Act created old-age pensions and unemployment insurance.
• Fair Labor Standards Act set a minimum wage, maximum hours, and child labor restrictions.

Pressure came from the left too:

• Huey Long pushed Share Our Wealth
• Francis Townsend demanded old-age pensions
• Charles Coughlin attacked banks and the New Deal
• Socialists, communists, and militant unions pushed stronger action

Conservatives pushed back through the American Liberty League and the courts. Schechter Poultry v. United States killed the NRA. United States v. Butler struck down the AAA. Roosevelt answered with the court-packing plan, which failed politically, but later West Coast Hotel v. Parrish and NLRB v. Jones & Laughlin Steel upheld key New Deal measures.

The 1937-1938 recession showed the core limit. The New Deal helped a lot, but World War II finally ended the Depression.

Who Benefited, Who Was Left Out, and How the Country Changed

The New Deal helped millions, but access was unequal.

• African Americans
  • The Black Cabinet, including Mary McLeod Bethune, increased access to federal power.
  • Eleanor Roosevelt backed civil rights publicly, including support for Marian Anderson.
  • Many Black workers were excluded from Social Security, the Wagner Act, and FLSA because farm and domestic labor were left out.
  • The AAA displaced Black sharecroppers, and CCC camps were segregated.
• Women
  • Frances Perkins became the first female cabinet member.
  • Women got relief jobs, but often lower pay and fewer opportunities because policy assumed a male breadwinner.
• Native Americans
  • John Collier backed the Indian Reorganization Act, which ended allotment and encouraged tribal self-government.
• Migration and geography
  • Dust Bowl migrants called Okies moved west, especially to California.
  • Many Americans also moved to cities looking for work and relief.

The lasting political result was the New Deal coalition of workers, unions, immigrants, Catholics, Jews, white southerners, many farmers, and African Americans in northern cities. Many Black voters and working-class ethnic voters shifted toward the Democratic Party.