The Great Depression and the New Deal (Pt 2) APUSH Mrs. Housenick 2/25/13

Paying Farmers NOT to Farm Agricultural Adjustment Administration (AAA) Created “artificial scarcity” by paying farmers to reduce the crops they produced Would lead to rising prices and price stability Much criticism: “Sinful destruction of food,” increased unemployment Declared unconstitutional in 1936, changed 2nd AAA—gave farmers a fairer price, more of a share of national income.

Rural areas Crop prices kept falling and farmers were quickly losing their farms. In addition a drought began in the 1930s and destroyed farms on the Great Plains. Farmers in the Dust Bowl were hit hard. Many left the area and came to California. They were known as Okies.

“Okies” on the road

Other aid to farmers and Native Americans Resettlement Administration: helped near-farmless farmers get better land “Indian New Deal” John Collier Indian Reorganization Act of 1934—encouraged tribes to set up own self-government and preserve native crafts and traditions.

Providing Electricity to Rural Areas Tennessee Valley Authority—federal government built dams to provide cheap, efficient energy to thousands of Dust Bowl families. Improved land, provided jobs and low-cost housing, flood control.

Cleaning up finance and investments Federal Securities Act: Promoters had to be honest about stocks they were selling. Securities and Exchange Commission—polices buying and selling of stocks “Watchdog agency”

Housing and Social Security Federal Housing Administration (FHA)—small loans for people to improve homes or buy new ones. US Housing Authority (USHA)—lent money to states or communities for low cost construction. SOCIAL SECURITY ACT (1935)—most important New Deal legislation!!! Federal-state unemployment insurance Pensions to retired workers, blind, disabled, dependent children

Victories for Labor National Labor Relations Act (Wagner Act—1935) Response to end of NRA Reasserted right of labor to organize and bargain collectively Est. National Labor Relations Board Workers more aggressive in fighting for rights CIO and sit-down strike Other reforms: Minimum and maximum wage levels, labor by children under 16 prohibited.

Roosevelt’s Supreme Court Battles Court had blocked or killed a lot of New Deal legislation Roosevelt had “court-packing” plan—said Court needed “new blood” and was behind in its work Plan opposed by majority (esp. Republicans), made Roosevelt look bad. Still, court became more friendly to New Deal reforms. Still, New Deal slowed down after 1937.

Roosevelt Recession New Deal did not cure economic woes of Depression, unemployment still high, lots of homelessness 1937—economy took another downturn Caused by premature cutbacks on spending As a response, FDR finally began deficit spending INFLUENCE OF KEYNESIAN ECONOMICS 1938—New Deal lost most of momentum NOT UNTIL WWII THAT THE DEPRESSION FINALLY ENDS!

Legacies of the New Deal Built up government bureaucracy Rise of national debt Principle that federal government is responsible to help the people and manage the economy Saved American capitalism(?) Reform without a revolution