The New Deal

● Restoring confidence
○ “Fireside Chats”
■ projected optimism to the American public through the radio
○ “Bank Holidays”
■ On March 6, 1933 he closed all banks for four days to stop the bleeding
and review before opening
○ Emergency Banking Act
■ protected large banks from being dragged down by smaller ones; funneled
1 billion into banks from the federal reserve
○ Economy act
■ worked to balance the federal budget (and restore confidence for business
community in govt) by cutting salaries of federal employees and reducing
pensions for veterans
● New Deal
○ Goal was: relief, reform, and recovery
○ it encompassed a series of laws and “Alphabet Agencies” to achieve those goals
○ the belief was that the govt should engage in economic planing, but wanted
private interests to dominate the planning process
■ ex. Tennessee Valley Authority (TVA) was govt funded dam project that
helped mitigate flooding in the valley and also sell electricity to the public
at reasonable rates
● New Deal for Farmers
○ Agricultural Adjustment Act (1933) or AAA reduced crop production to end
surpluses. Producers of the seven basic commodities would decline limits by
telling individual farmers how much to produce. The govt would then subsidize
them leaving land idle. This was struck down by the Supreme Court in 1936
○ Soil Conservation and Domestic Allotment Act (1936) replaced it and paid all
farmers to reduce production by claiming it was for “soil conservation”
○ Farm Security Administration (1937) provided loans to farmers so they could
relocate to better land (not many moved)
○ Rural electrification Administration (1935) brought electricity to rural areas
○ Farm Credit Administration: Refinanced 20% of all farm mortgages
○ Frazier-Lemke Farm Bankruptcy Act (1933) enable some farmers to regain
foreclosed land
● New Deal for Industry
○ National Industrial Recovery Act (1933) helped to create jobs and increase
public spending
 ○ National Recovery Administration (NRA) Federal agency that called for a
minimum wage, and max workweek— however large producers crafted the
standards and served their own wants
○ Section 7(a) of NIRA promised right to formations and engage in collective
bargaining— but govt didn’t enforce employees that didn’t follow
○ Public Works Administration (1933) administered the NIRA spending program,
but it was too little
■ in the end the NIRA was a failure because production declined and no one
followed the rules
■ Schecter case in 1935 declared it unconstitutional
● New Deal Currency, Banks, and Stock Market
○ in 1933, FDR removed the Gold Standard through executive order. The dollar
value could now rated or lowered by govt policy according to Econ circumstances
○ Glass-Steagall Act (1933) gave up the govt authority to stop irresponsible
investments by banks
○ Federal Deposit Insurance Corporation (FDIC) guaranteed all bank deposits
up to $2500
○ Banking act of 1935: transferred power to federal reserve in DC rather than
regional boards included creation of FDIC
○ Securities and exchange commission (1934) created to police the stock market
● New deal for jobs and housing
○ Civil Works administration (CWA) put more than 4 million people to work on
temporary projects--more wages equals more spending in American economy
○ Civilian conservation Corps (CCC) employment to millions of young men that
could not find jobs in the cities; they created parks, reservoirs, etc.
○ Homeowners loan corporation: refinance the mortgage is of more than 1 million
households
● Critics on the right
○ Conservatives in business leader saw the new deal as an attack on free enterprise
and laissez-faire capitalism
○ Central planning was a kin to communism
● Critics on the left
○ Communist and socialist party members on the far left felt the new deal did not go
far enough to solve the economic woes and protect the working class
○ FDR was too soft on corporate leaders
● Critics
○ Dr. Francis Townsend
■ Called for a plane for federal pensions to the elderly--which pressured
FDR to create Social Security
○ Father Charles Coughlin
 ■ Clean the new deal with soft on the “money powers“ and pushed for
change on the banking and currency system
○ Huey P Long
■ Called for a drastic redistribution of wealth and his share our wealth plan
■ Was assassinated at the state house in Louisiana when he was US US
senator