Method

I- Purpose and Background

II- What is the New Deal?

a. Regulations and Acts. (Chronology) ChartI
b. New Deals:
c. Key Areas:

III- The Increasing Role of the State

IV- Impact of the New Deal.

V- Student/Learning/Written Assignments

VI-Reading and Documentation List

1. Conventional Sources
2. Electronic Sources

The Lesson Unit is to be divided into two sessions each consisting of 1:30 minutes.

Session One: I, II, III and IV
Session Two: V and VI

THE NEW DEAL

The Great Depression influenced the lives of all Americans. It dominated the decade of the 1930s, and had a national and pervasive scope. It blighted both urban and rural areas. Inner-city and suburbs, new and old industries, blue-collar and white-collar workers-none were spared. This economic disaster brought the question of welfare state into full scale discussion. Therefore it is important to examine the New Deal and FDR's program to bring relief, recovery and reform to the American nation.

Farmers had not participated in the prosperity of the 1920s. They made up more than 30 percent of the workforce, but the per capita farm income was one third the national average.

The rural poor were a significant sector of the pre-Depression poor in America. They could be divided into 3 groups:

1. Subsistence farmers on submarginal land (as in the Appalachians)

2. Migratory farm laborers (as in California)

3. Tenant and share-cropping families (as in the South)

-Three million of them were African-Americans

The dimensions of their poverty had remained unchanged since the end of Reconstruction.

The industrial sector witnessed long term unemployment; and those who were employed suffered wage cuts. The 'sick' industries of the 1920s-coal and textiles-were the first to suffer because of over production and failing demand. Between 1929-32 the automobile and electrical manufacturing industries had their sales shrink by over two-thirds. Construction workers suffered while iron and steel production fell by 59 per cent in 1929-32.

In October-November 1929 the Great Crash wiped $ 26 billion off the value of shares on the New York Stock Exchange. What caused this dramatic collapse? Economists have highlighted the structural weaknesses of the 1920s American economy. The maldistribution of income and flaws in the banking system and the stock market led to an insufficient demand, which in turn could not sustain the great leaps in productivity made by American industry and agriculture. To Milton Friedman, the Depression was caused by the fall of the money supply by a third, the body responsible for this being the Federal Reserve Board.

The New Deal cannot only be regarded as an effort to solve the problems of the 1930s; it was a process of building government institutions which had been absent before. The New Deal established a Welfare State, as the government accepted limited responsibility to manage the economy, subsidize farmers, and promote social insurance and minimum wage laws. Roosevelt was the dominant personality of the 1930s and an immensely popular President. He strengthened the role of the executive branch of the government, influenced political alignments, and defined the agenda for the political debate for future generations.

Since the New Deal was a process of building up of government institutions it is appropriate to examine the regulations and acts introduced during the New Deal era.

1932 Reconstruction Finance Corporation Granted emergency loans to banks, life (RFC) insurance companies, and railroads. (Passed during Hoover administration)

1933 Civilian Conservation Corps Employed young men (and a few women) in (CCC) reforestation, road construction and flood control projects.

1933 Agricultural Adjustment Act Granted farmers direct payments for reducing (AAA) production of certain products. Funds for payments provided by a processing tax, which was later declared unconstitutional.

1933 Tennessee Valley Authority Created independent public corporations to construct dams and power projects and to (TVA) develop the economy of a nine-state area in the Tennessee River Valley.

1933 National Recovery Industry Act Sought to revive business through a series of (NIRA) fair-competition codes. Section 7a guaranteed labor's right to organize. (Later declared unconstitutional.)

1933 Public Works Administration Sought to increase employment and business (PWA) activity through construction of roads, buildings, and other projects.

1934 National Housing Act--created Insured loans made by banks for construction of Federal Housing Administration new homes and repair of old homes.

(FHA)

1935 Emergency Relief Appropriation Act-- Employed over 8 million people to repair roads, created Work Progress Administration build bridges, and work on other projects; also (WPA) hired artists and writers.

1935 Social Security Act Established unemployment compensation and old-age and survivor's insurance paid for by a joint tax on employers and employees.

1935 National Labor Relations Act Recognized the right of employees to join labor (Wagner-Connery Act) unions and to bargain collectively; created a new National Labor Relations Board to supervise elections and to prevent unfair labor practices.

1935 Public Utility Holding Company Act Outlawed pyramiding of gas and electricity companies through the use of holding companies and restricted these companies to activity in one area; a "death sentence" clause gave companies five years to prove local, useful and efficient operation or be dissolved.

1937 National Housing Act Authorized low-rent public housing projects

(Wagner-Steagall Act)

1938 Agricultural Adjustment Act Continued price supports and payments to (AAA) farmers to limit production, as in 1933 act, but replaced processing tax with direct federal payment.

1938 Fair Labor Standard Act Established minimum wage of 40 cents an hour and maximum workweek of 40 hours in enterprises engaged in interstate commerce.

[Nash & Jeffrey, The American People: 842]

This lasted from 1933 to early 1935, and focused mainly on recovery from the Depression and relief for the poor and unemployed. Some of the programs had overtones from the Hoover administration, and some had their origins in the Progressive Era. Others were taken from the experiences of World War I mobilization. No single ideological position united all programs, as Roosevelt was a pragmatist ready to try a variety of programs.

One Hundred Days:

In mid-crisis, a co-operative Congress was willing to pass almost any legislation that Roosevelt put before it. In 3 months, a great number of bills were rushed through. The furious legislative activity in the 100 Days of the New Deal helped alleviate the pessimism and despondency hanging over the country.

The Second New Deal:

Responding to the discontent of the lower middle-class, Roosevelt moved his programs in 1935 towards the goals of social reform and social justice. It can also be seen that Roosevelt departed from attempts to cooperate with the business community.

The Third New Deal:

Congress passed a number of important bills in 1937 and 1938 that completed the New Deal legislation. A new Agricultural Adjustment Act was passed in 1938 that tried to solve the problem of farm surpluses which still persisted. The National Housing Act of 1937 developed a comprehensive housing policy for the poor.

1. LABOR

Roosevelt saw labor as an important balance to the power of industry. Advisors like Frances Perkins and Robert Wagner persistently brought up the needs of organized labor.

-Section 7a of NIRA (National Industrial Recovery Act) gave workers the right of collective bargaining.

-Wagner National Labor Relations Act of 1935 gave statutory authority to enforce Labor Board decisions.

-CIO (Congress of Industrial Organizations) formed in 1935 unionized the US manufacturing industry-including automobile, steel, rubber and electrical goods. In the 1930s, trade union membership trebled.

The New Deal may have failed to disturb the basic structure of American business, but it helped the formation of a countervailing force--the trade union movement.

2. AGRICULTURE

The plight of farmers was an immediate one for the New Deal policy-makers. Foreign markets had disappeared in the world depression, and urban demand in the US had collapsed. Drought affected almost every farm state in 1930-38. The New Deal responded with a combination of production controls, government payments and price-support loans. These policy tools were consolidated in the Second Farm Act of 1938 (served as the basis of US agricultural policy until 1970s).

But success was modest, as there were limitations to a program of planned scarcity. Also, reform of land use was piecemeal and fragmentary. It is more important to look at the long term goal of modernizing rural America, and the governments changed relations to grass roots.

Tennessee Valley Authority: (Suggested Project Work for Students)

-Largest federal construction project ever launched.

-Authorized by Congress as an independent public corporation with the power to sell electricity and fertilizer, and to promote flood control and land reclamation.

-9 major dams and many minor ones built in 1933-44.

-The main purpose-agricultural regeneration and cheap power.

3. WELFARE

[Discussion Questions:

1. To what extent did the New Deal help the jobless?

2. Was this help long-term?

3. Was a 'cradle to grave' society provided?

4. What is your analysis of positive State intervention?]

-FERA (Federal Emergency Relief Administration) of 1933 granted approx. $ 500 million directly to states for unemployment relief. By 1941 approx. 8 million people were employed (one-fifth of nation's workforce).

-CWA (Civil Works Administration) of 1933 put approx. $ 400 million towards work relief programs.

-National Housing Act of 1934-FHA(Federal Housing Administration)-adequate shelter.

-Works Progress Administration of 1935.

-Social Security Act of 1935-insurance against old-age and unemployment-federal matching grants to state assistance programs to the indigent.

Some obstacles:

1. Conservative business interests were hostile to social insurance.

2. Congressional conservatism.

3. Local constraints.

Criticism:

-The programs did not eliminate slums, or rejuvenate the inner city, but fostered middle class urban sprawl.

-The random combination of federal and state programs handed down by the New Deal is to an extent responsible for the confused nature of current welfare provisions in the US.

However imperfect, the New Deal gave the US a Welfare State and revolutionized the concept of welfare. Over 46 million people (approx. 35 % of the population) at one time or another received public assistance or social insurance. In the 1930s, the loyalty of lower income voters and disadvantaged minorities went to FDR and the Democratic Party.

[A survey of different interpretations]

Political scientists and historians, more than explaining the New Deal, have concentrated on either praising it or criticizing it. In the 1940s to 1960s, conservatives denounced Roosevelt for supporting socialism. Liberals celebrated the New Deal for extending federal government responsibility to cover the economic security of individual citizens. They felt that expert management of the economy had produced unprecedented prosperity; and that FDR had struck the right balance between government and private enterprise. In the face of fascism and communism, the non-ideological bent of the New Deal was very attractive.

In the background of the racism and poverty of the 1960s, radical historians lamented that the New Deal had sustained the hegemony of corporate capitalism. They argued that the New Deal was not a popular movement, but a tool of the sophisticated leaders of American corporations and financial institutions. Hoover's reluctance to expand state and bureaucratic power won the favor of the New Left historians. (In current years, there has been a New Left revival in the writings of Colin Gordon).

This view is an interesting contrast to that of the New Right in the 1970s. Right wing intellectuals argued that the New Deal had set the American political economy on the wrong course. Government had increased social problems, and government spending had fueled inflation. Individual freedom was curtailed. These critics were convinced that the Reagan victory of 1980 was the point when half a century's drift towards collectivism finally stopped.

The period of 1980s to 1990s sees a strong Liberal reaffirmation of the New Deal by scholars such as Anthony Badger, Alan Brinkley and Jordan Schwarz. Schwarz, writing in 1993, stresses that the New Dealers believed in expanding liberalism and in creating broader economic opportunities. In the world of 1940, the New Dealers affirmed that liberal capitalism was not statism but a democratic community at work.

According to Badger, the New Deal represented activism in contrast to the inaction of the federal government under Hoover. Real benefits came to lower income voters who then gave their loyalty to FDR. Insurance was provided for the old and unemployed. The alleviation of urban poverty was part of the liberal Democratic agenda. African-Americans received assistance, and civil rights coalitions developed which included New Deal liberals. The New Deal was not static. It improved over time as deficiencies in existing programs emerged and new problems were identified.

CHART II

DIFFERENT INTERPRETATIONS OF THE NEW DEAL

1940s Liberal Celebration

| Schlesinger-Leuchtenberg Conservative Denunciation

| E. E. Robinson

|

1960s New Left Lament

B. Bernstein

__________________________________________________________________

1970s New Right Criticism

Friedman-Higgs

__________________________________________________________________

1980s Liberal Reaffirmation

| Badger-Brinkley-Schwartz

|

1990s New Left Revival

C. Gordon

______________________________________________________________________________

Although the New Deal was a sharp break with the past, its impact was curtailed by forces over which the New Dealers had little control. The New Deal was a 'holding operation' for American society--the decisive change to come with World War II. The Great War shaped the political economy of industrial and financial America. Massive government spending stimulated economic growth, and the position of large corporations in the economy was finally and firmly established.

1. The banking system and stock market in the 1920s.

2. Coping with the Depression.

(Experiences of a: women

b: the elderly

c: the unemployed

d: rural poor

e: African-Americans

f: American-Indians

3. The concept and tradition of Individualism.

4. Grass-roots radical protest in the 1930s by a: rank and file labor militants

b: tenant farmers' unions

c: unemployed Councils

5. Transition from the First New Deal to the Second New Deal

(New Deal's rhetoric and politics were more aggressively radical from 1935)

6. The position of film artists during the Depression and their stand towards the New Deal.

7. The critical role of a regulated federal government in the development of a modern Welfare State in the US.

8. A critique of the New Deal.

VI-READING AND DOCUMENTATION LIST

Badger, Anthony J. Prosperity Road: The New Deal, Tobacco, and North Carolina. (Chapel Hill: University of North Carolina Press, 1980).

Badger, Anthony J. The New Deal: The Depression Years, 1933-1940. (New York: Hill; Wang, 1988).

Bernstein, Barton J. "The New Deal: The Conservative Achievements of Liberal Reform." In Barton J. Bernstein, ed., Towards a New Past: Dissenting Essays in American History, pp. 263-88. (New York: Knopf, 1968).

Bremer, William W. Depression Winters: New York Social Workers and the New Deal. (Philadelphia: Temple University Press, 1984).

Brinkley, Alan. "The New Deal and Southern Politics." In James C. Cobb and Michael V. Namarato, eds., The New Deal and the South, pp. 97-116. (Oxford: University of Mississippi Press, 1984).

Brinkley, Alan. "The New Deal and the Idea of the State." In Steve Fraser and Gary Gerstle, eds., The Rise and Fall of the New Deal Order, pp. 85-121. (Princeton, N.J.: Princeton University Press, 1989).

Brinkley, Alan. Voices of Protest: Huey Long, Father Coughlin, and the Great Depression. (New York:Knopf, 1982

Cohen, Lizabeth. Making a New Deal: Industrial Workers in Chicago, 1919-1939. (Cambridge University Press, 1991).

Collins, Robert M. "Positive Business Responses to the New Deal: The Roots of the Committee for Economic Development, 1933-1942." Business History Review 52 (1978): 369-91

Collins, Robert M. The Business Response to Keynes, 1929-1964. (New York: Columbia University Press, 1981).

Conkin, Paul K. The New Deal. (Arlington Heights, Ill.: AHM, 1967).

Ferguson, Thomas. "From Normalcy to New Deal: Industrial Structure, Party Competition, and American Public Policy in the Great Depression." International Organization 38 (1984): 41-94.

Filene, Peter G. "An Obituary for The Progressive Movement."' American Quarterly 22 (Spring 1970): 20-34.

Fraser, Steve Gerstle, Gary., eds. The Rise & Fall of the New Deal Order, 1930-1980. (Princeton University Press, 1990).

Frazier, E. Franklin. Black Bourgeoisie: The Rise of a New Middle Class in the United States. (Macmillan Publishing Company, Incorporated, 1962).

Freidel, Frank. Franklin D. Roosevelt: Launching the New Deal (1973).

Freidel, Frank. Franklin D. Roosevelt: Rendezvous with Destiny. (Boston: Little, Brown; Company, 1991).

Freidel, Frank. Franklin D. Roosevelt: The Apprenticeship (1952).

Freidel, Frank. Franklin D. Roosevelt: The Ordeal (1954).

Freidel, Frank. Franklin D. Roosevelt: The Triumph (1956).

Hamby, Alonzo. Beyond the New Deal: Harry S Truman and American Liberalism. (New York: Columbia University Press, 1973).

Hawley, Ellis W. The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence. (Princeton, N.J.: Princeton University Press, 1966).

Karl, Barry D. Executive Reorganization and Reform in the New Deal: The Genesis of Administrative Management, 1900-1939. (Chicago: University of Chicago Press, 1963).

Karl, Barry D. The Uneasy State: The United States from 1915 to 1945. (Chicago: University of Chicago Press, 1983).

Ladd, Everett, Jr., with Charles D. Hadley. Transformations of the American Party System: Political Coalitions from the New Deal to the 1970s. 2d ed. (New York: Norton, 1978).

Leff, Mark. The Limits of Symbolic Reform: The New Deal and Taxation, 1933-1939. (New York: Cambridge University Press, 1984).

Leffler, Melvyn P. The Elusive Quest: America's Pursuit of European Stability and French Security, 1919-1933. (Chapel Hill: University of North Carolina Press, 1979).

Lehr, Harvey K. Heyday of American Communism: The Depression Decade. (Basic Books, 1985). [Lehr or Klehr? Books In Print lists it both ways.]

Lekachman, Robert. The Age of Keynes. (New York: Random House, 1966).

Leuchtenberg, William E. Franklin D. Roosevelt and the New Deal, 1932-1940. (Harper & Row: New York, 1963)

May, Dean L. From New Deal to New Economics: The American Liberal Response to the Recession of 1937. (New York: Garland, 1981).

Patterson, James T. Congressional Conservatism and the New Deal: The Growth of the Conservative Coalition in Congress, 1933-1939. (Lexington: University Press of Kentucky, 1967).

Patterson, James T. The New Deal and the States: Federalism in Transition. (Princeton, N.J.: Princeton University Press, 1969).

Radosh, Ronald. "The Myth of the New Deal." in Ronald Radosh and Murray Rothbard, eds., A New History of Leviathan, pp. 146-87. (New York: Dutton, 1972).

Robinson, Edgard E. The Roosevelt Leadership, 1933-1945. (J.B. Lippincott: Philadelphia, 1955)

Schlesinger, Arthur M., Jr. The Age of Roosevelt: The Coming of the New Deal (1959).

Schlesinger, Arthur M., Jr. The Age of Roosevelt: The Politics of Upheaval (1960).

Schwartz, Bonnie Fox. The Civil Works Administration, 1933~1934: The Business of Emergency Employment in the New Deal. (Princeton, N.J.: Princeton University Press, 1984).

Sitkoff, Harvard. A New Deal for Blacks: The Emergence of Civil Rights as a National Issue-The Depression Decade. (New York: Oxford University Press, 1978

Sitkoff, Harvard. Fifty Years Later: The New Deal Evaluated. (New York: Knopf, 1985).

Skocpol, Theda, and Kenneth Finegold. "State Capacity and Economic Intervention in the Early New Deal." Political Science Quarterly 97 (1982): 255-78.

Vittoz, Stanley. New Deal Labor Policy and the American Industrial Economy. (Chapel Hill: University of North Carolina Press, 1987).

Zinn, Howard, ed. New Deal Thought. (Indianapolis, Ind.: Bobbs-Merrill, 1966).

WEB SITES AND RELATED MATERIALS ON THE NEW DEAL,(INCLUDING FARM POLICY RELATED)

COLLECTION OF CARTOONS CONCERNING FDR AND NEW DEAL

[FDR INAUGURAL AND OTHER SPEECHES]

http://www.socialstudies.com/NYE140V.html

http://www.ids.net/history/Multied6.html [fdr photos]

[SPEECHHESD/DOC FOR FORMER PRESIDENTS]

[FARM SECURITY administration photos]

BIBLIOGRAPHY ON FARM SECURITY ADMINITRATION PHOTOS

Dixon, Penelope. Photographers of the Farm Security Administration: An Annotated

Bibliography, 1930-1980. New York, Garland Publishing, 1983.

Fleischhauer, Carl and Beverly Brannan. Documenting America, 1935-1943. Berkeley:

University of California Press, 1988.

Hurley, F. Jack. Portrait of a Decade: Roy Stryker and the Development of

Documentary Photography in the Thirties. Baton Rouge: Louisiana State University Press,

1972.

Winkler, Allan M. The Politics of Propaganda: The Office of War Information,

1942-1945. New Haven: Yale University Press, 1978.

Waiting For the New Deal

The cartoons in this section, Waiting For the New Deal, are from the period January 5, 1933 to March 15, 1933. Roosevelt had been overwhelmingly elected but the nation would have to wait

until March Fourth for FDR to take office. An advisor once told FDR that if he solved the nation's

problems he would be remembered as a great president. But if he failed he would be remembered

as the last president. The cartoons from January 1933 to March of 1933 reflect the nation's

anxious feelings during that period. An additional cartoon, NRA and The Future Generations, is

included in this section to recognize the work of the AP United States History Class, The Jedi

(94-95) who pioneered this project of preservation and computerized indexing.

The Farms Issue

Sense Of The Times

FDR projected confidence. The nation sensed the new President had faith in the future and knew how to lead the nation out of hard times. As you look at the cartoons of the first 100 days the sense that FDR was a strong, competent and confident leader is a common theme. Barryman sees the energetic FDR in Jus' Mindin' His Business And Goin' Along! exhausting Congress with needed policies for farm and forest. The technique of the New Deal was improvisation and experiment. "It is common sense to take a method and try it," FDR said in the 1932 campaign:

"If it fails, admit it frankly and try another. But above all, try something." Talburt in Farm Relief shows that, especially for the farmer, it was a relief to have someone trying!

The Farm Problem

Farmers had not shared in the economic prosperity of the 1920's. Cartoonist Carlisle advocates the need for a New Deal in agriculture in a March 20, 1933 cartoon entitled, The New Trend In Easter Fashions.

In April of 1933 farmers in LeMars, Iowa took the law into their own hands to try to stop the foreclosure of farm mortgages. Farmers dragged Judge Charles Bradley from his bench, took the judge out of town and stopped just short of lynching him. Clubb in Good News captures the mood of many American farmers and their sense of hope for the future.

Farm Strategy And The Agricultural Adjustment Act of 1936

The Agricultural Act of May 1933 set up a program by which producers of agricultural commodities such as wheat, cotton, hogs, corn, and dairy products received payments, called subsidies. The goal was parity: a restoration of farmers' purchasing power to what it had been in 1909-1914, a time of prosperity in rural America. In return for producing less a tax on food processors financed price subsidies. Ultimately it was the consumer of cereals made from wheat, cloth made from cotton and cigarettes made from tobacco that financed the New Deal's farm program by paying higher prices. A new federal agency, the Agricultural Adjustment Administration (AAA), administered the program. After the AAA American agriculture would never be the same.

Farm Credit Administration

The Farm Credit Administration was created by executive order to bring under one umbrella the farm services of several agencies. Congress passed legislation on June 16 completing the merger and providing for easier refinancing of farm mortgages. The Farm Credit Act of June 16 addressed the heartbreak of mortgage foreclosure. It helped to keep the sheriff and the mortgage company from the farmers' front door. Talburt's Foiled! demonstrates a cartoon is worth a thousand words.

Labor

*FDR condemns both labor and management (sit-down strikes).

*Steel strike leaders and radical operators cause FDR fireworks.

*Secretary of Labor Perkins arrives after strike losses.