A.The Agricultural Adjustment Act was developed by Henry Wallace, Rexford Tugwell, and MLWilson in close conjunction with the leaders of major farmers’ organizations.B.The AAA established a domestic allotment system for 7 commodities with cash subsidies tofarmers who cut production—a pattern of federal subsidies that continues to the present. Those benefits were financed by a tax on processing, which was passed on to consumers.C.New Deal planners hoped that prices would rise in response to the federally subsidized scarcity,halting the steep deflation and thus spurring a more general recovery.II.The AAA stabilized the agricultural situation, but its benefits were distributed unevenly.
Subsidies for reducing production went primarily to the owners of large and medium-sized farms,who often cut production by reducing their renters’ and sharecroppers’ acreage rather than their own. In the south, this strategy had racial overtones, displacing black tenet farmers from their land.B.New Deal agricultural policies thus fostered the migration of small farmers in the South andMidwest to northern cities and CA, and consolidated the economic and political clout of larger landholders.The National Recovery AdministrationI.The New Deal attacked the problem of economic recovery with the National Industry Recovery Act,which created the National Recovery Administration.A.The NRA, which drew on the WWI experience of Bernard Baruch’s War Industries Board, set up asystem of individual self-government to handle the problems of overproduction, cutthroatcompetition, and price instability. For each industry a code of prices and production quotas wasestablished. In effect, those legally enforceable agreements suspended the antitrust laws.B.The codes also established minimum wages and maximum hours and outlawed child labor.C.One of the most far-reaching provisions, Section 7(a), guaranteed workers the right to organizeand bargain collectively. These union rights dramatically spurred the growth of the labor movement in the 1930s.II.The negotiating process theoretically took into account equal input from management, labor, andconsumers; but trade associations, controlled by large companies, tended to dominate the code-drafting process, thereby solidifying the power of large businesses at the expense of smaller enterprises.A.Labor had little input, and consumer interests had almost none.B.To sell the program to skeptical consumers and businesspeople, the NRA launched an extensive public relations campaign.Unemployment Legislation
The early New Deal also addressed the critical problem of unemployment. In the 4
year of thedepression, the total exhaustion of private and local sources of charity made it essential to providesome form of federal relief.A.Roosevelt was a fiscal conservative, fearful of large federal deficits, and he moved reluctantlytoward federal responsibility for the unemployed.B.The Federal Emergency Relief Administration offered federal money to the states for relief programs. FERA was designed to keep people from starving until other recovery measures took hold.
Roosevelt always maintained a strong distaste for the dole. Wherever possible, New Dealadministrators promoted work relief over cash subsidies; they also consistently favored relief jobs thatdid not compete directly with the private sector.A.The Civil Works Administration constructed highways and public buildings and set up community projects. It was regarded as a stopgap measure to get the country through the winter of 1933-34.III.Many early emergency measures were deliberately inflationary, they were designed to trigger pricesrises that were thought necessary to halt the steep deflation and thus stimulate recovery.