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Give Me Liberty Chapter 21 – The New Deal - 1932-1940

AP U.S. History (Studocu University - USA)

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Chapter 21 – The New Deal: 1932-1940

AP United States History

The First New Deal

Franklin D. Rosevelt (FDR) and the Election of 1932
● Roosevelt was the symbolic representation of ordinary citizens
○ “Throw off the dogmas of the quiet past” (Lincoln) and
confront national crisis
○ Contracted polio 1921 – Hid paralyzed legs from public
for an image of vigor
● Roosevelt promised a “new deal” (vagueness) – Believed it
was gov’s duty to ensure everyone has a comfortable living
● Election of 1932: FDR (D) verus Hoover (R) – Roosevelt won
by majority congressional vote and popular vote
○ Roosevelt wanted balanced federal budget and called for Prohibition repeal
The Coming of the New Deal
● International responses limited – Other countries were focusing on themselves
○ EXs: France/Britain (conservative public order), Germany (Hitler dictatorship),
Soviet Union (Stalin and industrialization), Japan (invasions of China)
● Roosevelt wanted to reconcile democracy/individual liberty/economic planning
○ He knew that if he failed, it would result in either orthodoxy or revolution
● FDR drew on reform traditions of the Progressive Era in relying on other people’s advice
○ EX: Louis Brandeis, who had advised Woodrow Wilson during 1912 campaign
and now offered political advice to FDR while serving on the Supreme Court
● Brandeis believed large corporations had excessive power and contributed to depression
○ They had artificially high prices and failure to increase worker purchasing power
■ Wanted corporations broken up, rather than regulated by government
○ Brains Trust: Group of academics, including Columbia University professors, saw
bigness as inevitable in modern economy and said large firms must be managed
● The FIrst New Deal included the Brains Trust’s idea regarding gov management
The Banking Crisis
● Bank Holiday: Called by Roosevelt to temporarily halt all bank operations
○ Cause: March 1933 – Many banks suspended, so people couldn’t access their $
○ Result: Emergency Banking Act: Provided funds to protect threatened institutions
● Glass-Steagall Act: Barred commercial banks from becoming involved in the buying and
selling of stocks – Prevented many irresponsible practices that caused depression
● Federal Deposit Insurance Corporation (FDIC): Established by Glass-Steagall as a gov
system that insured the accounts of individual depositors and rid of the gold reserve
○ Results: Stimulate business activity and increased gov power of financial system
● Contrast: 1929-33, ⅓ of nation’s banks failed, but in 1936, not a single bank had failed

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The National Recovery Administration (NRA)

● National Industrial Recovery Act established the NRA, headed by Hugh S. Johnson
● Business-gov cooperation & industry codes for output/prices/working conditions
○ Cutthroat Competition was ended – No more driving out competitors
○ Industry-wide agreements exempt from antitrust laws
● Recognize labor’s right to organize (7a) = Support from laborers
● Set standards for production, prices, and wages in the textile, steel, mining, and
auto industries – Used the Blue Eagle as a symbol for the NRA’s publicity
● Hysteria from large companies dominating code-writing process
○ Believed they use NRA to drive up prices, limit production, divide
markets, lay off workers, etc
○ Many anti-union employers ignored section 7a – Government couldn’t
police ALL 750 codes in effect by 1935
○ Outcomes resulted in an inability to make econ recovery or industrial peace
Government Jobs
● Fear that directgov payment to unemployed would undermine self-reliance
● Economy Act: Reduced federal spending – Try to win confidence of business community
● Federal Emergency Relief Admin: Grants to local agencies that relieve the impoverished
○ FDR preferred temporary jobs to improve nation’s infrastructure
● Civilian Conservation Corps (CCC): Set unemployed young men to work on projects like
forest preservation, flood control, and improvement of national parks/wildlife preserves
○ 1942: 3 million ppl passed through and received gov wages of $30 per month
Public-Works Projects
● Public Works Administration (PWA): $3.3 billion, directed by Harold Ickes
○ Built roads, schools, hospitals, bridges, etc.
● Civil Works Administration (CWA): Employed >4 million for types of construction
○ Dissolved by Roosevelt after complaints of a new class dependent on gov
● Tennessee Valley Authority (TVA) built dams for flood prevention and electric power
○ Put government in competition with companies and spurred west econ develop
The New Deal and Agriculture
● Agricultural Adjustment Act (AAA): Authorized fed gov
to try to raise farm prices by setting production quotas for
major crops and paying farmers not to plant more
○ Succeeded in raising prices, but not all farmered
reaped the benefits
■ Property-owning farmers benefited, not
those who worked on the land
● 1930s drought worsened depression and extreme winds
created the Dust Bowl

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The New Deal and Housing

● Depression devastated housing; No construction and home ownership banks collapsed
● Home Owners Loan Corporation and Federal Housing Administration (FHA) provided
millions of long-term mortgages and constructed thousands of low-rent housing units
● 21st Amendment: Repealed prohibition, established the Federal
Communications Commission to oversee the nation’s broadcast
airwaves and telephone communications, and created Securities and
Exchange Commission to regulate the stock and bond markets
The Court and the New Deal
● 1935: Supreme Court mostly (R) invalidated key New Deal laws
(helt to 19th century)
○ NRA declared unconstitutional due to codes delegated
legislative powers to president and attempted to regulate
local businesses not engaged in interstate
■ Super Red when Schechter Poultry Company sued
for violating code
● 1936: AAA fell in US v. Butler declared it an unconstitutional
exercise of congressional power over local economic activities
● 1936: 5-4 vote, Justices ruled NY couldn’t establish minimum wage
for women/children

The Grassroots Revolt

● CIO and signs of popular discontent helped to spark the rise of the Second New Deal
● Grassroot movements use community as a basis for political/economic movement
Labor’s Great Upheaval
● Wagner Act (1935): Granted workers legal right to form unions – Gov on laborers’ side
○ Decreased European immigration – Immigrants’ children dominated workforce
● American factories were mini dictatorships – Management determined everything
○ “Industrial despotism” prompted workers to unionize and demand betterness
● 1934 held more than 2,000 strikes – EX: 400,000 textile workers demanding recognition
○ Many walkouts won some demands, however, textile strike failed

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The Rise of the Congress of Industrial Organizations (CIO)

● CIO wanted econ freedom (share wealth) & industrial democracy (voice opinions)
● 1936: United Auto Workers (UAW) created sit-down, halting production
○ Tactic then used nationwide (spirit of unity) - UAW got 40,000 members in 1 year
○ 1937: US Steel recognized unions in fear of sit-downs
● Union membership doubles from 1930-40 – CIO created sense of dignity and freedom
Labor and Politics
● Altered balance of econ power – CIO made program for federal action for insecurities
○ Public housing, universal health care, and unemployment and old age insurance
● Rhetoric in History: CIO explained depression as result of imbalance of wealth/income
○ “Underconsumptionist” new dealers wanted the government to raise wages
Voices of Protest
● Upton Sinclair (CA): (D) nominated for governor 1934 & wanted lower unemployment
○ Started the End Poverty in California movement
○ Subjected to first negative media campaign – Opponents used false newsreels
● Huey Long: Embodied populism/socialism – Wanted to uplift Louisiana’s common ppl
○ Governor in 1928, Senator in 1930 – Used dictatorial power to up taxes by
increasing the amount of public works projects, such as hospital buildings
○ 1934: Launched the Share Our Wealth movement, calling for confiscation of
wealth from richest to grant $5,000 and a job for all citizens
○ “Kingfish” (Long) was assassinated in 1935 by the son of a defeated political
rival
● Father Charles E. Coughlin: “Radio priest” who attacked Wall Street bankers and greedy
capitalists, calling for gov ownership of kep industries to battle depression
○ Critical of FDR due to new deal failure to promote social justice
■ Shifted to anti-Semitism and pro European fascism
● Dr. Francis Townsend: CA doctor won support for plan for gov to make monthly
payment of $200 to older Americans for immediate spending
○ Townsend Clubs gained more than 2 million members

The Second New Deal

● 1935: FDR launched Second New Deal (2ND) with emphasis on economic SECURITY
○ Guarantee that Americans would be protected from unemployment/poverty
● Long and Townsend popularized idea that lack consumer demand caused Depression
● 2ND redistribute national income for mass purchasing power – Large tax on corporations
● Rural Electrification Agency (REA): Bring electric power to homes that lacked it
○ 1950: 90 percent of nation’s farms wired for electricity with radios, fridges, etc
● Fed gov under 2ND promoted soil conservation/family farming - Leads to a poor view of
farmers for the economy, so god gave farmers assistance and purchased/improved land
● 2ND failed to arrest the trend toward larger farms and fewer farmers

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The Works Progress Administration (WPA) and the Wagner Act

● WPA: Hired 3 million each year until 1943, constructed thousands of buildings, 500,000
miles of roads, and 600 airports, and employed white-collar workers/professionals
● WPA set artists to work decorating buildings with murals – Increase national spirit
○ EX: Federal Theater Project and all-black Macbeth
● WPA established National Youth Administration to provide relief to teens/young adults
● Wagner Act: “Labor’s Magna Carta” – Empowered National Labor Relations to supervise
elections for employees to vote on union representation – Increase workplace democracy
○ Outlawed unfair labor practices – Believed unionization/high wage = recovery
The American Welfare State
● 1935: Social Security Act (2ND) established to ensure material well-being of Americans
● SSA creates system of unemployment insurance, old age pensions, aid to disables
● Contrasting History: Progressive platform 1912 called for same thing (and Europe)
● SSA marked radical departure from previous policies – More decentralized
The Social Security System
● FDR wanted fed taxes for social security – Believed it gave people right to old age
pension
● Social Security emerged as hybrid of national/local funding, but states had most control
● Social Security at first excluded large numbers of Americans (women and non-whites)
● Represented departure from traditional gov functions – “Laissez-faire is dead,” Lippmann

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A Reckoning with Liberty

● FDR delivered “fireside chats”, utilizing the radio in order to promote his policies
○ He did this because most of his opponents controlled the newspapers
● New Deal recast the idea of freedom by linking it to the expanding power of government
FDR and the Idea of Freedom
● FDR appealed to traditional values for new politics – Liberalism as large/social state
○ Made “freedom” a rally cry for ND and “liberty” a security for the average man
■ Linked freedom w/ economic security – Econ inequality is greatest enemy
● Opposition: Critique of ND was “reckless spending” that undermined fiscal responsibility
○ American Liberty League: Conservative businessmen/politicians in 1934
organized to mobilize opposition to Roosevelt’s policies
○ Robert Taft of Ohio, leader of the (R) in Congress, accused FDR of sacrificing
“individual freedom” in an effort to “improve the conditions of the poor”
○ US Chamber of Commerce charged FDR with attempting to “Sovetize” America
● Hoover launched attacks on FDR – Claimed FDR endangered “fundamental liberties”

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The Election of 1936

● Democrats received major support from working-class voters – Politics = class divisions
● Two Liberties: One was the idea of “freedom for private enterprise,” the other “socialized
liberty” based on “an equitably shared abundance”
● (D) platform (FDR) insisted gov interference in economy for a “democracy for all”
○ FDR attacked economic royalists who he thought wanted economic tyranny
■ “Poor men are not free men” – Threat of econ. freedom was despotism
● Alfred Landon (Kansas/R): Denounced social security and anti government conservatism
● FDR won reelection (60% popular vote) – Success from backing organized labor
○ Ability to unite south white and north black voters, protestant farmers, and urban
catholic and jewish ethics, industrial workers, etc = New Deal Coalition!!!
The Court Fight
● FDR removed Sup. Court justices due to old age - Congress rejected = Dictator rumors
○ He wanted to change Sup Court power balance to favor him and New Deal
● Packing the courts is the idea of adding justices to the Supreme Court or lower courts to
shift the balance in a liberal, conservative or other direction – Posed as a threat
● 1937: Court suddenly revealed a new willingness to support economic regulation by both
the federal government and the states – Min wage law, supported Wagner Act, etc
● Court’s new willingness to accept the ND marked a permanent change in judicial policy
The End of the Second New Deal
● US Housing Act (1937): Initiated first national effort to build homes for poor Americans
● Fair Labor Standards: Banned goods produced by child labor from interstate commerce,
set forty cents as the minimum hourly wage, and required overtime pay for hours of work
exceeding forty per week – Established federal regulation of wages/working conditions
● FDR reduced federal funding for farm subsidies and WPA in 1936 = Gov spending falls
= Business investment falls = Industrial production and stock market falls
○ Unemployment raised from 14 to 20 percent in the year 1937
● Econ planning (1933-34) or econ redistribution (1935-36) replaced by public spending

The Limits of Change

● Roosevelt wanted to expand the meaning of freedom visa extended assistance
● Political realities, such as gender and race, powerfully affected the drafting of legislation
The New Deal and American Women
● More women entered government roles – Eleanor Roosevelt transformed role of first lady
● During the depression, women were forced to leave the workforce to make room for men
● Economy Act of 1932: Prohibited both both members of a married couple from holding
federal jobs – Ambiguous interpretation led to sexist hiring prohibition
● Most New Deal programs did not exclude women from benefits – Most women were
uncovered from social security benefits, since they did not work outside the home

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The Southern Veto

● The federal government became the symbolic representation of the people
● After the South’s blacks lost the right to vote around the turn of the century, Democrats
enjoyed a political monopoly in the south – Blacks excluded from labor systems
● Urban League and NAACP (Black Organizations) supported Lunded Bill that, in 1935,
called for establishing a federally controlled system of old age, unemployment, and
health benefits for all wage workers, plus support for female heads of households with
dependents, but the Social Security Act became law rather than Lundeen’s Bill
The Stigma of Welfare
● The southern veto led to most southern whites not voting
● Increase in public assistance programs and welfare = Discrimination of benefits =
Dependency on government handouts – Blacks became dependent, so stigmas rose
The Indian New Deal
● Collier ended the policy of forced assimilation and allowed Indians unprecedented
cultural autonomy – Navajos still refused to go with federal government
● Indian Reorganization Act (1934): Ended the Dawes Act of 1877 which
divided Indian lands into small plots for individual families and selling
off the rest
The New Deal and Mexican Americans
● ⅕ of the Mexican population returned to Mexico due to bad work/farm
conditions
● Migrant laborers suffered low wages and inadequate housing
● La Raza: Mexicans sought the backing of the Mexican government and
promoted a mystical sense of pride and identification with Mexican
heritage
Last Hired, First Fried
● The black population was hit the hardest – They wanted their own separate economy
○ W.E.B. Dubois: “Don’t Buy Where You Can’t Work.”
A New Deal for Blacks
● FDR did not prioritize civil rights, but he appointed Mary McLeod Bethune, a prominent
black educator, as a special adviser on minority affairs and a number of other blacks to
important federal positions – Other key leaders directed attention to segregation injustices
● Eleanor resigned from DAR when they didn’t allow a black singer to present a concert
● Hopes for changes in race system disappointed – Segregation increased in work areas
○ EX: Southern congressmen prevented passage of federal antilynching law
Federal Discrimination
● Residential (real estate) and private banking segregation all rapidly increased
● The New deal fed the already-existing racial boundaries, especially with housing
○ EX: New Deal projects refused to hire blacks

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A New Conception of America

● New Deal made ethnic pluralism a reality – Italian immigrant governor of NYC Fiorello
● 1930s witnessed an acceleration of cultural assimilation due to low immigration rates
○ Labor and political activism became agents of a new kind of Americanization
The Heyday of American Communism
● Communism shaped the influence on politics and culture – CIO and Communist Party
became focal points for a broad social page and intellectual impulse that helped to redraw
the boundaries of American freedom – Party increases and allies with socialists
● Communists’ commitment to socialism resonated with a widespread belief that the
Depression had demonstrated the bankruptcy of capitalism – AND liberalism ideals

Redefining the People (Popular Front)

● Social/economic radicalism defined Americanization – Ethnic/racial diversity glorified
● FDR: Common-man was seen as the heart of the country – Artists depict daily lives
Promoting Diversity
● Democratic party avoided cultural issues, fearful of the decisive battles in the 20s
● Popular Front forthrightly sought to promote the idea that the country’s strength lay in
diversity, tolerance, and the rejection of ethnic prejudice and class privilege
○ CIO avidly promoted racial/ethnic inclusiveness, unlike AFL’s exclusionism
Challenging the Color Line
● Popular Front cultural groups promoted religious tolerance and pluralism
● Scottsbro Case: Nine black youths were convicted of raping two whites in 1932
○ Landmark Supreme Court decisions overturned the first two verdicts and
established legal principles that greatly expanded the definition of civil
liberties—that defendants have a constitutional right to effective legal

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representation, and that states cannot systematically exclude

blacks from juries
● CIO welcomed black members, advocated for anti-lynching laws,
enfranchised blacks, and broughts blacks back into the industrial
workforce
Labor and Civil Liberties
● Mobilization for civil liberties – Right of labor to organize –
Publicity over violence against unions placed rights of laborers at the
center of attention
● Robert M. La Follette Jr. exposed the methods employers used to
combat unionization, including spies and private police forces
● Labor militancy shifted understanding of civil liberties – Fed gov
becomes protector of freedom of expression and justices on SP
insisted constitutional guarantees
● 1938: House of Representatives established an Un-American
Activities Committee to investigate subversive activities in government of holders with
radical ideas
The End of the New Deal
● Reasons for the End: Mounting opposition of southern Democrats, consolidation of
southern Democrat-northern Republican coalition, exhaustion of New Deal momentum,
shifting focus from domestic to foreign affairs
● Southers business/political leaders feared that the federal intervention encourage unions
● 1938: A period of political stalemate – Southers D and Northern R dominated congress
○ Further reform became impossible and congress abolished current reform efforts
The New Deal in American History
● ND expanded control over the economy – Independent force between industry and labor
● Government influenced farmers planting, required employers to deal with unions, insured
bank deposits, loaned to homeowners, and provided payment to unemployed/elderly
● ND also transformed the environment, rewrote US politics, restored faith in democracy,
made the government a part of American lives, and recast idea of freedom to the public

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Timeline

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