the new deal - measures

• In his Fourth Fireside Chat (June 1934), Roosevelt said that his ‘New Deal’ had three related steps:

  •   Relief (helping the poor and unemployed to survive)

  •   Recovery (getting the economy going again) and

  •   Reform (changing things so a depression could never happen like that again).
• the first new deal - confidence - abolished prohibition

  -   He said: ‘I think this would be a good time for a beer”. This restored faith in the government because it stopped the humiliation of the government’s laws being openly ignored.  

  -   It also increased the government’s revenues.
• the first new deal - confidence - fireside chats

  -   FDR made sure that everyone who sent him a letter got a reply (he got up to 8,000 letters a day), and that everyone who telephoned the White House was never cut off.

  -   FDR described his policies in radio broadcasts called ‘fireside chats’.  
• the first new deal - confidence - bank holiday

  -   The Emergency Banking Act closed the banks for four days.   The government checked that all were financially sound, and when they reopened, they reopened with the backing of the Federal Reserve.   

  -   This restored confidence in the banks, and people deposited their money there again.  
• the first new deal - confidence - stock exchange

  -   The Securities and Exchange Commission introduced rules for the Stock Exchange to prevent another Crash like 1929.
• the first new deal - finance & economy - budget

  -   He did not run deficit budgets (i.e. it did not spend more than it gathered in taxes).   

  -   He CUT the pay of government employees by 15%.

  (These measures actually made the depression worse.)

  -   The government borrowed huge amounts of money to finance the New Deal, but it spent it on projects that were planned to pay back eventually.
• the first new deal - finance & economy - bankruptcies

  -   The Farm Loan Act and the Bankruptcy Act prevented banks from foreclosing on solvent businesses until they had had a chance to borrow from the Federal Reserve.

  -   The Home Loan Act and the Home Owners Loan Corporation did the same for ordinary home owners.
• the first new deal - finance & economy - prices & wages

  -   The Agricultural Adjustment Act (AAA) paid farmers to take fields out of production; the idea of this was to stop over-production and to drive up prices.  

  -   The NRA (National Recovery Administration) was set up, where businessmen joined a ‘Roll of Honour’ (and were allowed to show a blue eagle symbol) where they promised to cut production and pay good wages – 2.5 million firms, employing 22 million people, joined the scheme.  

  -   FDR also abolished Child Labour – this put more adults into work.
• the first new deal - finance & economy - currency

  -   stop people owning gold (they had to deposit it in banks)

  -   make the banks give all the gold to the government

  -   increase the price of gold from $20 to £35 an ounce.

      This stopped people hoarding/saving their money, and increased the amount of government reserves.  Since the dollar was still linked to gold, moreover, many foreign investors bought American dollars for gold, which increased the amount of government reserves. 
• the first new deal - alphabet agencies - CCC

  (Civilian Conservation Corps):

  provided paid conservation work to give unemployed young men jobs – by 1941, 2.5 million had taken part PLUS millions of trees panted/ parks and forest areas developed
• the first new deal - alphabet agencies - FERA

  (Federal Emergency Relief Administration): provided matched funding to help states organise payments to the unemployed and homeless.
• the first new deal - alphabet agencies - WPA

  (Works Progress Administration):

  ran projects which provided work for the unemployed, e.g. building airports, schools, hospitals or bridges – millions earned a small wage and felt valuable.
• the first new deal - alphabet agences - TVA

  (Tennessee Valley Authority):

  built 21 dams in ten years – stopped flooding, provided cheap electricity and provided work.
• the second new deal - in 1935

  1.   The Supreme Court, which ruled the NRA and the AAA illegal, because they took away the right of states to run their own affairs.

  2.   Some businessmen, who attacked and ignored the NRA saying that it was expensive and wasteful.
• the second new deal - National Labour Relations Act (1935):

  ●   Also known as the Wagner Act.

  ●   To replace the banned NRA.

  ●   Protected workers' right to join a trade union/ .

  ●   Set up the National Labour Relations Board (NLRB) to prevent employers from victimising workers.
• the second new deal - soil conservation act 1935

  ●   To replace the banned AAA.

  ●   Allowed the government to continue subsidising farmers. 
• the second new deal - social security act 1935

  ●   Provided America's first system of social welfare.

  ●   set up a national system of old-age pensions

  ●   gave help to people with physical disabilities

  ●   gave help to children in need

  ●   set up a national system of unemployment insurance.
• the second new deal - national housing act 1937

  ●   Provided loans to buy houses

  ●   Reduced excessive rents.
• the second new deal -  Fair Labour Standards Act (1938):

  ●   Set hours and conditions of work

  ●   Fixed a minimum wage.