The New Deal: Part I
By John E. Hansan, Ph.D.
Editor’s Note: The New Deal was a comprehensive series of social and economic programs enacted by the Franklin D. Roosevelt Administration during the Great Depression that began on October 29, 1929. A number of the New Deal programs have proved to be so significant they became part of our everyday lives. Part I describes several of the most important initiatives of the New Deal. The New Deal Part II entry includes information about the Social Security Act and several of the opponents of the New Deal.
Introduction: October 29, 1929, a day known forever after as “Black Tuesday,” was the date when the American stock market–-which had been roaring steadily upward for almost a decade–-crashed, plunging the country into its most severe economic downturn. Speculators lost huge amounts of wealth; banks failed; the nation’s money supply diminished; and companies went bankrupt and began to fire their workers in droves. Meanwhile, President Herbert Hoover urged patience and self-reliance: He thought the crisis was just “a passing incident in our national lives” that it wasn’t the federal government’s job to try and resolve the matter. By 1932, one of the darkest years of the Great Depression, at least one-quarter of the American workforce was unemployed. President Franklin Roosevelt was elected in 1932 and took office in 1933. The new President acted swiftly to try and stabilize the economy, provide jobs and some form of relief to those who were suffering. Over the next eight years, the Roosevelt Administration initiated a series of projects and programs, known collectively as the New Deal, which aimed to restore some measure of dignity and prosperity to millions of Americans who were unable to find work and earn wages necessary to support and protect their families. Below are brief descriptions of some the major legislative accomplishments and the programs they created.
The First Term (1932-1936): President Roosevelt worked quickly upon his election to deliver an unprecedented number of social and economic reforms intended to address some aspect of the catastrophic effects of the Great Depression. Together with his “brain trust,” a group of university scholars and trusted policy experts, many of whom had served with him as Governor of New York, Roosevelt sought the best course of action for the struggling nation. Supporting the President was a Democratic Congress, eager and prepared to enact the measures recommended by his closest advisers. One recurring theme in the recovery plan was Roosevelt’s pledge to help the “forgotten man at the bottom of the economic pyramid.”
The Bank Holiday: An Emergency Banking Act (EBA) was introduced on March 9, 1933, to a joint session of Congress and was passed the same evening amid an atmosphere of chaos and uncertainty as over 100 new Democratic members of Congress determined to take radical steps to address banking failures and other economic malaise. The EBA was one of Mr. Roosevelt’s first projects in the first 100 days. The sense of urgency was such that the act was passed with only a single copy of it available on the floor and most legislators voted on it without reading it. The legislation stabilized the banking system and restored the public’s faith in the banking industry by putting the federal government behind it. The Act reorganized the banks and closed the ones that were insolvent. In his first “fireside chat” three days later, the president urged Americans to put their savings back in the banks, and by the end of the month almost three quarters of them had reopened. Three months later, he signed the Glass-Steagall Act, legislation that created the Federal Deposit Insurance Corporation (FDIC), federally insuring bank deposits.
The Civilian Conservation Corps (CCC): Operating from 1933 to 1941, the Emergency Conservation Work Act (ECW), better known as the Civilian Conservation Corps (CCC) was one of the New Deal’s most successful programs. With that legislation, the CCC brought together the nation’s young men and the land in an effort to save them both. Roosevelt proposed to recruit thousands of unemployed young men, enlist them in a peacetime army, and send them to battle the erosion and destruction of the nation’s natural resources. More than any other New Deal agency, the CCC is considered to have been an extension of Roosevelt’s personal philosophy. The speed with which the plan moved through proposal status, authorization, implementation, and operation was certainly a miracle of cooperation among all the agencies and branches of the federal government. From FDR’s inauguration on March 4, 1933, to the induction of the first CCC enrollee, only 37 days had elapsed.
The CCC, also known as Roosevelt’s Tree Army, was credited with renewing the nation’s decimated forests by planting an estimated three billion trees from 1933 to
1942. This was crucial, especially in states affected by the effects of the “Dust Bowl” where reforestation was needed to help break the wind, hold water in the soil, and help hold the soil in place. So far-reaching was the CCC’s reforestation program that it was responsible for more than half the reforestation, public and private, accomplished in the nation’s history.
Eligibility requirements for the CCC carried several simple stipulations. Congress required only U.S. citizenship. Other standards were set by the ECW’s regulations. Sound physical fitness was
mandatory because of the hard physical labor required. Men had to be unemployed, unmarried, and between the ages of 18 and 26, although the rules were eventually relaxed for war veterans. Enlistment was for six months, although many participants reenlisted after their allotted time was up.
Problems that arose were confronted quickly. For example, the bulk of the nation’s young and unemployed youth were concentrated in the East, while most of the work projects were in the western parts of the country. To help with this, the War Department mobilized the nation’s transportation system to move thousands of young men from their induction centers to work camps. The Agriculture and Interior departments were responsible for planning and organizing work to be performed in every state. The Department of Labor was responsible for the selection and enrollment of applicants. The National Director of the ECW was Robert Fechner, a union vice-president chosen personally by President Roosevelt.
Young men flocked to enroll. Many politicians believed that the CCC was largely responsible for a 55 percent reduction in crimes committed by the young men of that day. The young men were paid $30 a month, with a mandatory $25 allotment check sent to the families of the men, which made life a little easier for people at home.
Camps were set up in all states, as well as in Hawaii, Alaska, Puerto Rico, and the Virgin Islands. Enrollment peaked at the end of 1935, when there were 500,000 young men located in 2,600 camps in operation in all states. California alone had more than 150 camps. The greatest concentration of CCC personnel was in the Sixth Civilian Conservation Corps District of the First Corps Area, in the Winooski River Valley of Vermont, in December 1933. Enlisted personnel and supervisors totaled more than 5,300 and occupied four large camps.
The program enjoyed great public support. Once the first camps were established and the CCC became better known, they became accepted and even sought after. The CCC camps stimulated the economy of regions and provided local communities with improvements in forest activity, flood control, fire protection, and overall community safety.
Works Progress Administration (WPA). Of all of Roosevelt’s New Deal programs, the Works Progress Administration (WPA) is the most famous, because it affected so many people’s lives. Roosevelt’s vision of a work-relief program employed more than 8.5 million people. For an average salary of $41.57 a month, WPA employees built bridges, roads, public buildings, public parks and airports.
Under the direction of Harry Hopkins, an enthusiastic social worker who had come from modest means, the WPA would spend more than $11 million in employment relief before it was canceled in 1943. The work relief program was more expensive than direct relief payments, but worth the added cost, Hopkins believed. “Give a man a dole,” he observed, “and you save his body and destroy his spirit. Give him a job and you save both body and spirit.”
Both Roosevelt and Hopkins believed that direct relief was inappropriate for most Americans. They believed
able-bodied unemployed should be given the opportunity to earn wages that would provide security for the family and stimulate the economy through consumer spending. If all workers could be guaranteed a job, either through private enterprise or through government projects, the economic health of the nation would be assured.
Hopkins’ work programs became the centerpiece of his plan for economic security. He first expressed this preference for work over relief in 1915 when he helped administer the Bronx Zoo project, which can be seen as a pilot program for New Deal work relief.
The WPA employed far many more men than women, with only 13.5 percent of WPA employees being women in the peak year of 1938. Although the decision had been made early on to pay women the same wages as men, in practice they were consigned to the lower-paying activities of sewing, bookbinding, caring for the elderly, school lunch programs, nursery school, and recreational work. Ellen Woodward, director of the women’s programs at the WPA, successfully pushed for women’s inclusion in the Professional Projects Division. In this division, professional women were treated more equally to men, especially in the federal art, music, theater, and writers’ projects.
When federal support of artists was questioned, Hopkins answered, “Hell! They’ve got to eat just like other people.” The WPA supported tens of thousands of artists, by funding creation of 2,566 murals and 17,744 pieces of sculpture that decorate public buildings nationwide. The federal art, theater, music, and writing programs, while not changing American culture as much as their adherents had hoped, did bring more art to more Americans than ever before or since. The WPA program in the arts led to the creation of the National Foundation for the Arts and the National Endowment for the Humanities. The WPA paid low wages and it was not able to employ everyone — some five million were left to seek assistance from state relief programs, which provided families with $10 per week. However, the WPA went a long way toward bolstering the self-esteem of workers.
The National Industrial Recovery Act (NIRA) and the National Recovery Administration (NRA) were designed to address unemployment by regulating the number of hours worked per week and banning child labor. In this way, the New Deal greatly influenced the growth and strengthening of the labor movement. Through the NIRA of 1933 the National Recovery Administration (NRA) came into being. The NRA attempted to revive industry by raising wages, reducing work hours and reining in unbridled competition. Portions of the NRA were ruled unconstitutional by the Supreme Court in 1935; however, the Works Progress Administration (WPA), which was the second part of the NRA, was allowed to stand. The majority of its collective bargaining stipulations survived in two subsequent bills.
- By the Wagner Act of 1935, employees were guaranteed the right to negotiate with employers through unions of their choosing, and it established a Labor Relations Board as a forum for dispute resolution. The act bolstered the position of the American Federation of Labor (A.F. of L.) and the newly created Congress of Industrial Organizations (C.I.O.), another labor movement.
- Workers were given the right to bargain collectively by the National Labor Relations Act of 1935.
- In 1938 the Fair Labor Standards Act promulgated a 44-hour work week with time-and-a-half for overtime and pegged a minimum wage of 25 cents an hour. The act also provided that the hours worked would drop to 40 and the wage would incrementally rise to 40 cents. In addition, the bill made child labor under the age of 16 illegal.
Other Legislation: The Federal Emergency Relief Administration (FERA), created in 1933, gave $3 billion to states for work relief programs. The Agricultural Adjustment Act subsidized farmers for reducing crops and provided loans for farmers facing bankruptcy. The Home Owners’ Loan Corporation (HOLC) helped people save their homes from foreclosure.
The End of Prohibition: The movement for the prohibition of alcohol began in the early 19th century, when Americans concerned about the adverse effects of drinking began forming temperance societies. By the late 19th century, these groups had become a powerful political force, campaigning on the state level and calling for national liquor abstinence. Several states outlawed the manufacture or sale of alcohol within their own borders. In December 1917, the 18th Amendment, prohibiting the “manufacture, sale, or transportation of intoxicating liquors for beverage purposes,” was passed by Congress and sent to the states for ratification. On January 29, 1919, the 18th Amendment achieved the necessary three-fourths majority of state ratification. Prohibition essentially began in June of that year, but the amendment did not officially take effect until January 29, 1920.
The President also asked Congress to take the first step toward ending Prohibition by making it legal once again for Americans to buy beer. On March 22, 1933, Congress passed the Cullen-Harrison Act legalizing beers and wine. Later, on December 5, 1933 the Congress ratified the 21st Amendment to the Constitution and ended Prohibition for good.
The Tennessee Valley Authority (TVA): In May of 1933, the President signed into law the Tennessee Valley Authority Act, enabling the federal government to build dams along the Tennessee River that controlled flooding and generated inexpensive hydroelectric power for the people in the region. The TVA story begins at Muscle Shoals, Alabama, where the Tennessee River drops 140 feet in thirty miles. This drop in elevation created the rapids or “shoals” that the area is named for, and made it all but impossible for ships to travel further up the Tennessee River. In 1916 the federal government acquired the site and began plans to construct a dam there. The dam was meant to generate electricity that was needed to produce explosives for the war effort, but World War I ended before the facilities could be used. During the 1920s Congress debated over what was to be done with the property. Some members of Congress wanted to sell the dam to private interests. At one time Henry Ford offered to purchase the site and develop a nitrate plant in the area.
For several years, efforts had been made to allow federal development of the site but they were defeated by Republicans who supported letting private interests develop the site. With the coming of the Depression, Americans looked more favorably to government economic intervention in the public interest. President Roosevelt–who had a personal interest in regional planning, conservation, the utilities question, and planning–backed a plan to develop the Tennessee River Valley.
Sources: Wikipedia – the Free Encyclopedia — http://en.wikipedia.org
The American Experience — www.pbs.org/wgbh/americanexperience
The New Deal Network – http://newdeal.feri.org/
How to Cite this Article (APA Format): Hansan. J.E. (2012). The New Deal: Part I. Retrieved [date accessed] from /?p=8018.