The New Deal

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The New Deal

• The Three Rs
• Relief To help people cope with the
  depression
• Recovery To help end the
  depression.
• Reform To prevent future
  economic problems

Franklin D. Roosevelt
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1935 Supreme Court Decision

• Ended the first New Deal by declaring the
  Agricultural Adjustment Act and the National
  Recovery Act unconstitutional.

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Did New Deal Prolong Depression?

• Yes- Folsom
• Anti-Free Market program of high taxes and
  special interest spending to certain banks,
  railroads, farmers and veterans created an
  antibusiness environment.

• No- Biles
• In spite of minimal reforms and non-revolutionary
  programs, the New Deal created a limited welfare
  state that implemented economics stabilizers to
  avert another depression.

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Keynesian Policy (Canenesian)

• Argues that when the economy stalls and falls
  into recession/depression, Congress should lower
  taxes and create jobs.
• When the economy overheats and suffers from
  inflation, Congress should raise taxes and create
  jobs.
• Safety nets and safe banks that are closely
  regulated are key policies.

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Problem
Solution
Federal Securities Act
The Stock Market Crash

• Buying on Margin
• Insider Trading
• Over-valuing of stock

Securities and Exchange Commission set up to
enforce new government regulations of stock
market.
Reform
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Solution
Problem
Bank Runs
Emergency Banking Relief Act Bank Holiday
Relief
Federal Deposit Insurance Corp.
Lack of Consumer Confidence in Banking System
Reform
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Solution
Problems
Hoovervilles People Cant Afford Housing
Low demand for goods services
Federal Housing Administration
Relief/Recovery
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Problem
Solution
Farm Security Administration
Dust Bowl
Camp for Dust Bowl Refugees
Droughts in Mid-West cause storms and ruin crops.
Relief
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Problem
Solution
Agricultural Adjustment Act
Overproduction
Farmers received subsidies in exchange for
limiting production.
Overproduction of farm goods led to low prices.
Some farmers protested by dumping crops or
burning them for fuel.
Recovery
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Problems
Massive Unemployment
Extreme Poverty

• 1/3 of population unemployed
• Families cant pay rent
• Thousands migrate in search of better conditions
• Hunger even starvation

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Solutions Unemployment
Works Progress Administration (WPA)
Recovery
WPA Artist Sketches WPA Workers

• Puts people to work on government projects.
• Both manual and intellectual projects.
• Federal Writers Project (Including Historians!)
• Artists Paint Post Office Murals

Federal Theater Project
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Solutions
Civilian Conservation Corps (CCC)
CCC Workers Build Fence in Greene, NY
Young people were given jobs doing conservation
recreation related projects. Local examples
include some of the pavilions at Chenango Valley
State Park.
Recovery
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Problems
Solution

• Underdevelopment of South
• High Unemployment

Tennessee Valley Authority (TVA)
TVA builds damns to provide electricity to rural
South. Construction and operation also provides
work for unemployed.
Recovery
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Problem
Solution
Factory Closings Cause Unemployment
National Industrial Recovery Act
Required industries to create codes regulating
wages, hours, working conditions, prices. It
was designed to promote recovery by ending wage
price deflation.
Recovery
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Problem
Solution
Labor Disputes
National Labor Relations Act (Wagner Act)
A Sit-down Strike
Guaranteed workers the right to bargain
collectively and form unions w/out fear of
punishment from management.
Reform
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Problems
Solution
Social Security Act
Poverty among elderly disabled.
Relief

• Old Age Pensions
• Aid to Disabled
• Encouraged states to provide matching benefits.

Men signing up for social security.