chapter 23 study guide

Lucero Castaneda AP US History Ms.Lampley

Chapter 23

The Great Depression and the New Deal, 1929-1939

I. The Early Years of the Depression, 1929-1932A. Down and Out: Life in the Great DepressionB. Herbert Hoover RespondsC. Rising discontentD. The 1932 Election

II. The New Deal Arrives, 1933-1935A. Roosevelt’s and the First Hundred Days

1. Banking Reform2. Agriculture and Manufacturing3. Unemployment Relief4. Housing Crisis

B. The New Deal under Attack1. Critics in the Right2. Critics on the Populist Left

III. The Second New Deal and the Redefining of Liberalism, 1935- 1938

A. The Welfare State Comes into being1. The Wagner Act and Social Security2. New Deal Liberalism

B. From Reform to Stalemate1. The 1936 Election2. Court Battle and Economic Recession

IV. The New Deal’s Impact on SocietyA. A Peoples Democracy

1. Organization Labor2. Women and the New Deal3. African Americans under the New Deal4. Indian Policy5. Struggles in the West

B. Reshaping the Environment1. The Dust Bowl2. Tennessee Valley Authority3. Grand Coulee

C. The New Deal and the ArtsD. The Legacies of the New Deal

I. The Early Years of the Depression, 1929-1932

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The United States suffered economic downhill between 1929 and 1932 and unemployment rose to 25%.

A. Down and Out: Life in the Great Depressiona) In September 1931, with unemployment hovering around 17%, Salt Lake City ran out

of money.

b) Despite many restrictions that females faced, their employment increased during the decade if the 1930s, as women expanded their financial contributions to their families in the face of hard times

c) Germany had preceded the United States into depression in 1928, and its economy, loaded by World War I reparation payments, had brought to its knees by 1929.

B. Herbert Hoover Respondsa) President Hoover responded to the downturn by drawing on two powerful American

traditions: the first was to relief that economic outcomes were the product of individual character and second was that through voluntary action, the business community would regulate itself.

b) Hoover’s most innovative program was the Reconstruction Finance Corporation (RFC), which stimulated economic activity by providing federal loan to railroads, banks, and other businesses. The RFC was not aggressive enough given the severity of the depression.

c) By 1932, Americans saw Hoover as insensitive to the depth of the country’s economic miseries even though he also accomplished many things.

C. Rising discontenta) On protest low prices for their goods, thousands of farmers joined the Farm Holiday

Association, which cut off supplies to urban areas by barricading roads and dumping milk, vegetables, and other foodstuff onto the roadways.

D. The 1932 Electiona) The national mood was mixed as the 1932 election approached: Republicans

unenthusiastically renominated Hoover and the Democrats turned to New York governor Franklin Delano Roosevelt.

b) Franklin Delano Roosevelt was a distant cousin to former president Theodore Roosevelt. F.D. Roosevelt served as assistant secretary of the navy during World War I. he was elected in November easily, but did not begin his presidency until March 1933.

c) By March 1933, the nation had hit rock bottom

II. The New Deal Arrives, 1933-1935Most Americans felt a kinship with their new president, calling him simply FDR. His New Deal programs put people to work and restored hope for the nation’s future.

A. Roosevelt’s and the First Hundred DaysF.D. Roosevelt’s charisma allowed him to broaden further the presidential powers that Teddy Roosevelt and Woodrow Wilson had expanded previously. Furthermore, in a legendary session, known as the “Hundred Days”, Congress enacted fifteen major bills that focused primarily on four problems: banking failures, agricultural overproduction, the business slump, and soaring unemployment.

1. Banking Reforma) Congress passed the Emergency Banking Act, which permitted banks to reopen in a

Treasury Department inspection showed that they had sufficient cash reserves.

b) A second banking law, the Glass-Steagall Act, further restored public confidence by creating the Federal Deposit Insurance Corporation (FDIC), which insured deposits up to $2,500(and now insures them up to $250,000) and prohibited banks from making risky, unsecured investments.

c) F.D. Roosevelt removed the U.S. Treasury from the gold standard, which allowed the Federal Reserve to lower interest rates.

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2. Agriculture and Manufacturinga) The Agricultural Adjustment Act (AAA) began directing governmental regulations of

the farm economy, to solve the problems of overproduction, the AAA provided cash subsidies to famers who cut production of seven major commodities: wheat, cotton, hogs, rice, tobacco, and dairy products.

b) In manufacturing, the New Deal attacked declining production with the National Industrial Recovery Act. The National Recovery Administration (NRA) set up separate self-governing private association in six hundred industries. Each industry regulated itself by agreeing on a code of prices and production quotas

3. Unemployment Reliefa) In May, Congress established the Federal Emergency Relief Administration (FERA).

Directed by Harry Hopkins, hard-driving social workers from New York, the FERA provided federal funds for state relief programs.

b) Early in 1933, Congress established the Public Works Administration (PWA), a construction program, and several months later, Roosevelt created the Civil Works Administration (CWA) and named Hopkins its head. It worked at first but then it stopped by spring (1933-1934).

c) A more long-term program, the Civilian Conservation Corps (CCC), mobilized 250,000 young men to do reforestation and conservation work.

4. Housing Crisisa) Congress created the Home Owners Loan Corporation (HOLC) to refinance home

mortgages. In just two years of operation, the HOTC helped more than a million Americans retain their homes. The Federal Housing ACT of 1934 would extend this program under a new agency, the Federal Housing Administration (FHA). Together, the HOTC, FHA, and later the Housing Act of 1937 permanently changed the mortgages system and set the foundation for the broad expansion of homeownership in the post-World War II decades.

B. The New Deal under AttackIn 1934, Congress established the Securities and Exchange Commission (SEC) to regulate the stock market. The Banking Act of 1935 authorized the president to appoint a new Board of Governors of the Federal Reserve System, placing control of the interest rated and other money-making policies in federal agency rather than in the hands of private bankers

1. Critics in the Righta) More important than the Liberty League in opposing the New Deal, because its

influence would stretch far into the post-World War II decades, was the National Association of Manufacturers (NAM). The NAM was producing radio programs, motion pictures, billboards, and direct mail by the late 1930s.

b) The NAM promoted free enterprise and unfettered capitalism, after World War II, the NAM would emerge as one of the staunchest critics of liberalism and would forge alliances with influential postwar conservative politicians.

c) In May 1935, in Schechter V. United States, the Court unanimously ruled the National Industrial Recovery Act unconstitutional because it delegated Congress’s power to make laws to the executive branch and extended federal authority to intrastate (in contrast to interstate) commerce.

d) F.D. Roosevelt protested but watched helplessly as the Court struck down more New Deal legislation: the Agricultural Adjustment Act, the Railroad Retirement Act, and the Frazier-Lemke Act (intended to provide debt relief)

2. Critics on the Populist Lefta) In 1933, Francis Townsend proposed the Old Age Revolving Pension Plan, which

would give the considerable sum of $200 (`$3,300 today) to citizens over the age of sixty.

b) Father Charles Coughlin , to promote his own idea of money and banking organized the National Union for Social Justice.

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c) Huey Long broke with the New Deal in 1934 and, like Townsend and Coughlin, established a national movement. His Share Wealth Society maintained that because wealth was so unequally distributed millions of ordinary families lacked the funds to buy goods and thereby keep the factories humming.

d) F.D. Roosevelt feared that Townsend, Coughlin, and Long might join forces to form a third party.

III. The Second New Deal and the Redefining of Liberalism, 1935-1938Roosevelt and his advisors moved to the left, which historians have called the Second New Deal. The administration’s Revenue Act of 1935 proposed a substantial tax increase on corporate profits and higher income and state taxes on the wealthy.

A. The Welfare State Comes into beingThe Second New Deal emphasized social justice and the creation of a safety net: the use of the federal government to enhance the power of working people and to guarantee the economic security and welfare of the old, the disabled, and the unemployed.

1. The Wagner Act and Social Securitya) Section 7(a) of the National Industrial Recovery Act (NIRA) had given workers the

right to organize unions, producing a dramatic growth in rank-and-file militancy and leading to a strike wave in 1934.

b) The Wagner Act of 1935, named after Senator Robert F. Wagner of New York, upheld the right of industrial workers to join unions. The act outlawed many practices that employers had used to suppress unions, such as firing workers for organizing activities. It established the National Labor Relation Board (NLRB), a federal agency with the authority to protect workers from employer coercion and to guarantee collective bargaining.

c) The Social Security Act of 1935 had a greater impact. The resulting Social Security Act had three main provisions: old-aged pensions for workers; a joint federal-state system of compensation for unemployed workers; and a program of payments to widowed mothers and the blind, deaf, and disabled.

d) The assistance program for widows and children known as Aid to Dependent Children (ADC) became one of its most controversial measures.

e) By 1994, Aid to Families with Dependent Children (AFDC) enrolled 14.1 million Americans.

2. New Deal Liberalisma. John Dewey and economist John Maynard Keynes countered that, to preserve

individual liberty, government must assist the needy and guarantee the basic welfare of citizens.

b. Many Democrats in the North and West opposed racial discrimination since they were centers of New Deal liberalism.

B. From Reform to StalemateF.D. Roosevelt’s first term had seen extraordinary expansion of the federal state and on his second term it was characterized by a series of political entanglement and economic bad news that stifled further reform.

1. The 1936 Electiona) FDR won founding for the Works Progress Administration (WPA). Harry Hopkins led

it to success. Although the WPA was an extravagant operation by 1930s standards, it reached only about one-third of the nation’s unemployment.

b) The assassination of Huey Long by a Louisiana political rival in September 1935 had eliminated the threat of a serious third party challenge.

2. Court Battle and Economic Recessiona. With the Wagner Act, the Tennessee Valley Authority, and Social Security all coming

up on appeal with the Court, the future of the New Deal slate of programs rested in the hands of a few elderly, conservative-minded judges.

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b. From 1933 to 1937, gross domestic product had grown at a yearly rate of about 10%, bringing industrial output and real income back to 1929 levels.

c. John Maynard Keynes transformed economic policymaking in capitalism societies by arguing that government intervention could smooth out the highs and lows of the business cycle through deficit spending and the manipulation of interest rates, which determined the money supply.

d. Keynesian Economics gradually won wider acceptance as defense during World War II finally ended the Great Depression.

IV. The New Deal’s Impact on SocietyA. A Peoples Democracy

1. Organization Labora) A new union government, led by the Congress of Industrial Organization (CIO),

promoted “industrial unionism”-organizing all the workers in an industry, from skilled machinists to unskilled janitors, into a single union. American Federation of Labor (AFL), representing the other major group of union, favored organizing workers on a craft-by-craft basis.

b) The CIO helped fund Democratic campaigns in 1936, and its political committee became a major Democratic contributor during the 1940s.

c) Employer groups such as the National Association of Manufacturers and the Chamber of Commerce, passionately anti-union, remained powerful forces in American business life.

2. Women and the New Deala) Frances Perkins, the first woman named to a cabinet post, served as secretary of labor

throughout Roosevelt’s presidency.

b) Eleanor Roosevelt in the 1920s worked to expand positions for women in political parties, labor unions, and education. She emerged as an independent public figure and the most influential First Lady in the nation’s history.

c) A fourth of the National Recovery Act codes set a lower minimum wage for women than for men performing the same jobs, and only 7% of the workers hired by the Civil Works Administration were female.

3. African Americans under the New Deala) The Resettlement Administration, established in 1935 to help small farmers and tenants

buy land, actively protected the rights of black tenant farmers.

b) Mary McLeod Bethune founded Bethune-Cookman College and served during the 1920s as president of the National Association of Colored Women and joined the New Deal in 1935.

c) Civilian Conservation Corps camps segregated blacks, and most NRA codes didn’t protect black workers from discrimination. Both Social Security and the Wagner Act explicitly excluded domestic and agricultural workers, which were mostly African Americans in the1930s.

d) In Southern agriculture, the Agricultural Adjustment Act hurt rather than helped the poorest African Americans.

e) Some black farmers tried to protect themselves by joining the Southern Tenant Farmers Union (STFU), a biracial organization founded in 1934

4. Indian Policya) The plight of Native Americans won the attention of the commissioner of the Bureau of

Indian Affairs (BIA), John Collier, a progressive intellectual and staunch critic of the past practices of the BIA.

b) John Collier helped to write and push through the Congress the Indian Reorganization Act of 1934, sometimes called the Indian New Deal.

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c) The BIA and Congress didn’t stop interfering in internal Indian affairs and retained financial control of reservation governments.

5. Struggles in the Westa) Between 1929 and 1937, approximately half a million people of Mexican descent were

deported. Despite the deportation, many Mexican Americans benefited from the New Deal and generally held Roosevelt and the Democratic Party in high regard.

b) The National Youth Administration (NYA), which employed young people from families on relief and sponsored a variety of school programs, was especially important in Southwestern cities. In California, the Mexican American Movement (MAM), a youth-focused organization, received assistance from liberal New Dealers.

c) Until the repeal of the Exclusion Act of 1943, Chinese immigrants were classified as “aliens ineligible for citizenship” and therefore were excluded from most federal programs.

d) As the depression cut wages, Filipino immigrants slowed to a trickle, and it was virtually cut off by the Tydings-McDuffie Act of 1934. The act granted independence to the Philippines (since 1898 was an American colony), classified all Filipinos in the United States as aliens, and restricted immigration from the Philippines to fifty people per year.

B. Reshaping the EnvironmentFDR and Interior Secretary Harold Ickes saw themselves as conservationists in the tradition of FDR’s cousin, Teddy Roosevelt.

1. The Dust Bowla) Tons of topsoil were blown off barren fields and carried in storm clouds for hundreds

of miles. Between 1930 and 1941, as severe drought afflicted the semiarid states of Oklahoma, Texas, New Mexico, Colorado, Arkansas, and Kansas.

b) Agents from the newly created Soil Conservation Service taught farmers to prevent soil erosion by tilling hillside along the contours of the land. Many other groups emerged to help farmers and people about conserving soil.

c) One of the U.S. Forest Service’s most widely publicized programs was the Shelterbelts, the planting of 220 million trees running North along the 99th meridian from Abilene, Texas, to the Canadian border.

2. Tennessee Valley Authoritya) Tennessee valley Authority (TVA) , sounded by Congress in 1933, integrated flood

control, reforestation, inexpensive, electricity generation, and agricultural and industrial development, including the production of chemical fertilizer.

b) The TVA was an integral part of the Roosevelt administration’s effort to keep farmers on the land by enhancing the quality of rural life.

c) The Rural Electrification Administration (REA), established in 1935, was also a central goal. The REA addressed this problem by promoting nonprofit farm cooperative that offered loans to farmers to install power lines.

3. Grand Couleea) In Washington State, the PWA and the Bureau of Reclamation built the Grand Coulee

Dam on the Columbian River. When it was completed in 1941, Grand Coulee was the largest electricity-producing structure in the world, and its 150-mile lake provided irrigation for the state’s major crops: apples, cherries, pears, potatoes, and wheat.

b) The Civilian Conservation Corps helped to complete the East Coast’s Appalachian Trail and the West Coast’s Pacific Crest Trail through the Sierra Nevada.

C. The New Deal and the Artsa) The Federal Act Project, an arm of the WPA, gave work to many young artists who

would become the 20th century leading painters, muralists, and sculptors.

b) The Federal Music Project and Federal Writer’s Project (FWP) employed 15,000 musicians and 5,000 writers.

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c) The Federal Theatre Project (FTP) nurtured talented directors, actors, and playwrights.

D. The Legacies of the New Deala) FDR and Congress created a powerful social-welfare state that took unprecedented

responsibility for the well-being of American citizens.

b) There is no question that the New Deal transformed the American political landscape. This New Deal coalition of ethnic groups, city dwellers, organized labor, blacks, and cross-section of the middle class formed the nucleus of the Northern Democratic Party and supported additional liberal reforms in the future.

1. Reconstruction Finance Corporation (RFC): an independent agency of the United States government established and chartered by the US Congress in 1932, Act of January 22, 1932 during the administration of President Herbert Hoover, to help the economy.

2. Farm Holiday Association: a movement of Midwestern United States farmers who, during the Great Depression, endorsed the withholding of farm products from the market, in essence creating a farmers' holiday from work. The Farmers' Holiday Association was organized in May 1932 by Milo Reno

3. Emergency Banking Act: an act spearheaded by President Franklin D. Roosevelt during the Great Depression. It was passed on March 9, 1933 to allow only Federal Reserve-approved banks to operate in the United States of America.

4. Glass-Steagall Act: An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment banking business. The Glass-Steagall Act was sponsored by Senator Carter Glass, a former Treasury secretary, and Senator Henry Steagall, a member of the House of Representatives and chairman of the House Banking and Currency Committee.

5. Federal Deposit Insurance Corporation (FDIC): the U.S. Corporation insuring deposits in the U.S. against bank failure. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

6. Agricultural Adjustment Act (AAA): federal law of the New Deal era which reduced agricultural production by paying farmers subsidies not to plant on part of their land and to kill off excess livestock. Its purpose was to reduce crop surplus and therefore effectively raise the value of crops.

7. National Industrial Recovery Act (NIRA): enacted during the famous First Hundred Days of Roosevelt's first term in office and was the centerpiece of his initial efforts to reverse the economic collapse of the Great Depression. NIRA was signed into law on June 16, 1933, and was to remain in effect for two years. It attempted to make structural changes in the industrial sector of the economy and to alleviate unemployment with a public works program.

8. National Recovery Administration (NRA): The NRA was an essential element in the National Industrial Recovery Act (June 1933), which authorized the president to institute industry-wide codes intended to eliminate unfair trade practices, reduce unemployment, establish minimum wages and maximum hours, and guarantee the right of labor to bargain collectively.

9. Federal Emergency Relief Administration (FERA): This agency was set up to provide direct federal grants to the states for assisting the unemployed during the Great Depression.

10. Public Works Administration (PWA): a large-scale public works construction agency in the United States headed by Secretary of the Interior Harold L. Ickes. It was created by the National Industrial Recovery Act in June 1933 in response to the Great Depression. It built large-scale public works such as dams, bridges, hospitals, and schools.

11. Civil Works Administration (CWA): a short-lived U.S. job creation program established by the New Deal during the Great Depression to rapidly create manual labor jobs for millions of unemployed workers. The jobs were merely temporary, for the duration of the hard winter of 1933–34.

12. Civilian Conservation Corps (CCC): a public works project intended to promote environmental conservation and to build good citizens through vigorous, disciplined outdoor labor. Close to the heart of President Franklin D. Roosevelt, the CCC combined his interests in conservation and universal service for youth. He believed that this civilian “tree army” would relieve the rural unemployed and keep youth “off the city street corners.”

13. Home Owners Loan Corporation (HOLC): Its purpose was to refinance home mortgages currently in default to prevent foreclosure.

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14. The Federal Housing Act of 1934: insured loans made by banks and other private lenders for home building. The goals of this organization are to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgage loans, and to stabilize the mortgage market.

15. Housing Act of 1937: provided for subsidies to be paid from the U.S. government to local public housing agencies to improve living conditions for low-income families.

16. Social Security Act of 1935: a law providing old-age retirement insurance, a federal-state program of unemployment compensation, and federal grants for state welfare programs.

17. Civilian Conservation Corps: a public work relief program that operated from 1933 to 1942 in the United States for unemployed, unmarried men from relief families, ages 18–25 as part of Roosevelt's New Deal. Robert Fechner was the head of the agency. A part of the New Deal of President Franklin D. Roosevelt, who provided unskilled manual labor jobs related to the conservation and development of natural resources in rural lands owned by federal, state and local governments.

18. Agricultural Adjustment Act: a United States federal law of the New Deal era which reduced agricultural production by paying farmers subsidies not to plant on part of their land and to kill off excess livestock. Its purpose was to reduce crop surplus and therefore effectively raise the value of crops.

19. Bureau of Indian Affairs (BIA): is responsible for the administration and management of land held in trust by the United States for Native Americans in the United States, Native American Tribes and Alaska Natives.

20. Indian Reorganization Act of 1934: known as the Indian New Deal, was U.S. federal legislation that secured certain rights to Native Americans (known in law as American Indians or Indians), including Alaska Natives. These include actions that contributed to the reversal of the Dawes Act's privatization of communal holdings of American Indian tribes and a return to local self-government on a tribal basis. The Act also restored to Indians the management of their assets (being mainly land) and included provisions intended to create a sound economic foundation for the inhabitants of Indian reservations.

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