The Third New Deal

• What sets the Third New Deal apart is permanent government spending to solve economic problems
• The July 1937 Bankhead-Jones Farm Tenant Act created a Farm Security Administration (FSA) to replace the RA to give tenants low-interest loans to restock or buy their farms
• The FSA was contrary to the RA and to address the problems of the AAA
• The FSA established 30 camps to provide temporary housing for families
• The FSA provided medical centres and loans to allow farm owners to buy heavy machinery
• By 1947, 40 000 farmers had bought their farms
• By 1947, 900 000 families had borrowed $800 million from the FSA
• Most FSA loans were repaid after WW2
• The February 1938 Second Agricultural Adjustment Act established that farmers could vote on quotas for rice, tobacco, wheat, corn and cotton. Votes needed a 66% majority and farms who stuck to the quotas were given subsidies
• A Commodity Credit Corporation could give loans to farmers in cases of overproduction to store produce
• Farm surplus could be distributed to people on relief through the Food Stamp Plan
• The AAA's complexity caused mistrust and unfairness and it came into effect too late, after there had already been much overproduction
• The September 1937 Wagner-Steagall National Housing Act established the US Housing Authority (USHA) to help with slum clearance and the need for public housing
• The Wagner-Steagall National Housing Act was the brainchild of Senator Wagner of New York because Roosevelt didn't understand the problem
• The USHA could provide up to 100% loans at low-interest rates to build new homes
• Congress allocated the USHA $500 million, of which no more than 10% could be spent on one state. This was difficult for the most impacted cities, concentrated in the North-East
• By 1941, only 100 000 homes had been built. They had rents of $12-15 per month
• The relief was inadequate and millions remained in poor housing
• The June 1938 Fair Labour Standards Act fixed minimum wage at $0.25 per hour and maximum hours at 44 per week
• In 1938, 300 000 people received an instant raise
• In 1938, 1.3 million people had their hours reduced
• A wages and hours division was set up to supervise the regulations under the Department of Labour
• Farm workers and domestic servants were exempt from the Fair Labour Standards Act