The Second New Deal

• The Need for more help

  After two years of New Deals, national income was still low.

  • Workers strike over poor conditions and unemployment remained high.

  Congress elections of 1934 led to more reforms being introduced.

  FDR set out more reforms to...

  1. Provide work
  2. Support workers
  3. Help rural poor
  4. Provide for retired OAPs (Old Aged Pensioners)
• Bank & Impact of the Banking Act

  • Roosevelt had managed to rescue banks in 1933, but there had been no major reforms to their organisation.

  Banking act of 1935

  1. Created a board of governors for Federal Reserves System.
  2. Gave various financial powers to the board

  • Strengthened the central banking system.

  In 1936, no banks closed and very little had to be paid out in DI (tax) - banking system modernised
• Help for Old and Disadvantaged:

  • Before 1935, the USA had no national system for pensions or unemployment insurance.

  Social Security Act

  1. Federal Pension System: Employees paid into pension scheme + 1% to 3% of their income.
  2. Federal Unemployment insurance: Employers of more than eight people paid tax to the federal government (used to provide unemployment pay for 16 weeks)
  3. Federal support for disadvantaged people: Support funded by federal matching grants, provided money for poor and old people, families with dependent children, disabled groups and blind people.