1. The American Promise: A History of the United States Fourth Edition
CHAPTER 24
The New Deal Experiment
1932–1939

2. Franklin D. Roosevelt: A Patrician in Government
The Making of a Politician
Born in 1882, Franklin Delano Roosevelt - public service and Christian duty to help the poor and weak.
New York legislature - Woodrow Wilson appointed him assistant secretary of the navy.
Summer of 1921 infected with the polio virus, paralyzing both his legs - Polio therapy in Warm Springs, Georgia - courted southern Democrats.
Governor of New York.
Government should intervene to protect citizens from economic hardships.
In 1931, created Temporary Emergency Relief Administration (TERA) to relieve the economic hardships of New Yorkers.
Determined to use government resources to attack economic crisis without deviating from democracy or from capitalism.
The Election of 1932
Democrats convened in Chicago in July 1932 to nominate their presidential candidate – FDR – pledged “a new deal for the American people” – landslide victory.

3. Launching the New Deal The New Dealers Banking and Finance Reform
Activists from social gospel tradition - Harry Hopkins and Frances Perkins - watchwords were action, experiment, and improvise - Capitalist solutions to the economic crisis.
Under consumption – root cause - immense size and economic power of American corporations to be counterbalanced by government and organization among workers and small producers - Government to moderate imbalance of wealth - working people to share more fully in the fruits of the economy.
Banking and Finance Reform
Emergency Banking Act - funds from Reconstruction Finance Corporation to bolster bank assets.
“Fireside chats” - to reassure about the safety of money in banks.
Banks reopened, remained solvent - federal regulation, oversight.
To prevent fraud, corruption, insider trading, and other abuses in Wall Street - Congress to regulate stock market - Securities and Exchange Commission (SEC).

4. Relief and Conservation Programs
Harry Hopkins investigated plight of impoverished Americans.
Federal Emergency Relief Administration (FERA) - $500 million to feed the hungry and create jobs.
Civilian Conservation Corps - unemployed young men - conserve natural resources; women were excluded until Eleanor Roosevelt demanded token number of them be hired.
Harness natural resources for hydroelectric power - Tennessee Valley Authority (TVA) in dams along the Tennessee River - electricity to impoverished rural communities - electricity to country folk.
Agricultural Initiatives
Overproduction and under consumption - cut agricultural production - Agricultural Adjustment Act (AAA) - pay farmers not to grow some crops.
Commodity Credit Corporation - farmers to hold harvested crops off the market for higher prices - Farm Credit Act (FCA) - long-term credit on mortgaged farm property and helped avoid foreclosure.
Crop allotments, commodity loans, and mortgage credit – Southern landowners rewarded themselves - denied funds to sharecroppers and tenant farmers - their privation worsened.

5. Challenges to New Deal Industrial Recovery
Industrialists cut production - unemployment turn, their ability to buy consumer goods - National Industrial Recovery Act (NIRA) - National Recovery Administration (NRA) in June 1933.
NRA codes - fair working conditions, set prices, and minimize competition in order to stabilize existing industries and maintain their workforces - recognize workers’ right to organize and engage in collective bargaining - strengthen conventional business practices
Challenges to New Deal
Resistance to Business Reform
New Deal programs rescued capitalism.
By 1935 National Association of Manufacturers and the Chamber of Commerce openly anti–New Deal.
Economic planners (rational planning in the public interest) and labor leaders (influence wages and working conditions) attacked the New Deal from the left.
In May 1935, Supreme Court declared NRA unconstitutional.
Casualties in the Countryside
The Agricultural Adjustment Act (AAA) weathered harsh criticism – Supreme Court struck down taxes on processed food.

6. Politics on the Fringes
Displaced tenants joined the army of migrant workers
Politics on the Fringes
New Deal’s staunchest opponents - Republican Party—organized, well-heeled, mainstream, and determined to challenge Roosevelt at every turn.
Socialists and Communists – save capitalism
Intellectuals – radical change.
Charles Coughlin, Catholic priest from Detroit - weekly radio broadcasts - espoused virulent anti- Semitism.
Dr. Francis Townsend - Old Age Revolving Pension to pay every American over sixty a pension of $200 a month to be spent within thirty days.
Caughlin and Townsend merged forces in Union Party for 1936 election.
Louisiana senator Huey Long - “soak the rich” tax bill to outlaw personal incomes of more than $1 million and inheritances of more than $5 million - Senate rejected his proposal - ran for president on “Share Our Wealth” platform - assassinated in 1935.
Challenges to the New Deal from Republicans and radical groups stirred Democrats to solidify their winning coalition and in the midterm elections of 1934, New Dealers won a landslide victory.

7. Toward a Welfare State Relief for the Unemployed Empowering Labor
By 1935, 8 million jobless - Works Progress Administration (WPA) - By 1936, jobs for 7 percent of the nation’s labor force – white men against women and racial minorities - three out of four WPA jobs in construction and renovation of the nation’s physical infrastructure; other WPA jobs employed artists, musicians, actors, journalists, poets, and novelists.
Empowering Labor
Wave of union organizing - determination of militant labor leaders.
Wagner Act (1935) created the National Labor Relations Board - guaranteed workers right to organize unions, along with renewed labor militancy, great strides for labor unions - most of them unskilled laborers, immigrants, and African Americans.
Unskilled workers formed the Committee for Industrial Organization (CIO) - CIO-affiliated United Auto Workers (UAW) to organize workers at General Motors.

8. Social Security and Tax Reform
UAW - sole bargaining agent for all the company’s workers and agreeing to refrain from interfering with union activity.
CIO not successful in steel mills.
Social Security and Tax Reform
Single most important feature of the New Deal’s emerging welfare state was Social Security - large majority carried the Social Security Act through Congress in August, pensions for the elderly funded by workers and their employers, and unemployment insurance funded by employers’ contributions.
The Social Security Act excluded domestic and agricultural workers – many African Americans and half of all employed women ineligible for benefits.
Multi-million dollar grants to the states to use to support dependent children, public health services, and the blind.
Strong objections to federal involvement in matters - an awkward balance among federal, state, and personal responsibility - Fervent opposition - rich had learned little from the depression.

9. Neglected Americans and the New Deal
Average unemployment rate in the 1930s - 17 percent - women—and agricultural workers—African, Hispanic, or Asian Americans—remained largely untouched by New Deal benefits.
Millions of women, children, old folks, the unorganized, unskilled, uneducated, and unemployed, often fell through the New Deal safety net, but the New Deal neglected few citizens more than it did African Americans.
Disfranchisement prevented southern blacks from protesting - lynching increased during the 1930s.
Eleanor Roosevelt sponsored appointment of Mary McLeod Bethune, cofounder of the National Council on Negro Women—as head of the Division of Negro Affairs in the National Youth Administration.
Few gains - African Americans still suffered severe disadvantages, as did Hispanic Americans and Asian Americans - Native Americans also suffered neglect - Indian Reorganization Act of 1934 restored Indians’ right to own land communally, to have greater control over their own affairs, and provided an important foundation for Indians’ economic, cultural, and political resurgence a generation later.

10. The New Deal from Victory to Deadlock
The Election of 1936
Roosevelt - test of leadership and progressive ideals - New Deal was the nation’s liberator from a long era of privilege and wealth for a few and “economic slavery” for the rest.
Republican candidate - Alfred Landon - achieve a balanced federal budget.
Roosevelt triumphed percent of popular vote.
Court Packing
Remove obstacles to New Deal reforms - appoint six New Dealers to the Supreme Court and remove conservatives – challenge to independent authority of the Supreme Court - court-packing bill failed - Supreme Court justices upheld New Deal legislation in subsequent cases.
Reaction and Recession
Emboldened by their defeat of the court-packing plan, Republicans and southern Democrats rallied around their common conservatism to obstruct additional reforms.
Roosevelt believed additional deficit spending by the federal government was no longer necessary.

11. The Last of the New Deal Reforms
Roosevelt’s retrenchment backfired - national income and production slipped steeply backward.
Revive federal spending – used ideas of British economist John Maynard Keynes - economic growth had to be carefully nurtured.
The Last of the New Deal Reforms
Administrative Reorganization Act - Farm Security Administration (FSA) in second Agricultural Adjustment Act in 1938 moderated price swings by regulating supply.
National Housing Act - affordable housing in urban areas.
Fair Labor Standards Act of June provide workers with decent standard of living through the regulation of wages and hours, standards that also curbed child labor.

12. The Election of 1932

13. Electoral Shift, 1928–1932

14. The Tennessee Valley Authority