1st New Deal Flashcards
HH was keen to work with FDR during the ‘lame duck’ period, but why did FDR resist?
He didn’t want to be tarnished by HH’s unpopularity and he was still unsure what his policies would be
What were the three general principles of the first New Deal?
Relief from the effects of the Depression
Recovery from the colonic Depression
Reform of the economic system to prevent further depressions in the future
What did FDR believe the Federal Government had to do to achieve the three general principles?
Play a greater role
What percentage of banks were shut when FDR became president and how many states had proclaimed indefinite bank holidays?
75% and 38 states
What did FDR announce on the 6th March 1933?
Nationwide bank holiday for 6 days, in which a special session of Congress passed the Emergency Banking Relief Act
What did the Emergency Banking Relief Act do?
Placed all banks under federal control and arranged for solvent banks to re-open
What did FDR tell Americans to do during his first ‘fireside chat’ on the 12th March 1933?
Put their savings back into the bank as it was safe to do so - this resulted in deposits flowing into the system
What did the Glass-Steagall Act do?
Prevented ‘high-street’ banks from taking part in investment banking, which had been one of the main causes of the collapse following Wall St Crash
What did the Federal Deposit Insurance Corporation do?
Guaranteed all bank deposits up to $5,000
The number of bank failures between 11933 and 1941 were fewer than in any…
… previous American administration
The Democrats won the November 1932 election, but in what month did FDR come into power?
March 1933
What were the limitations of FDR’s banking measures?
Hoover had considered all measures before, so they were not regarded as radical
Some wanted even greater gov’t control over banks, possibly through nationalisation
Roosevelt had preserved rather than replaced capitalism
Why was agricultural recovery a high priority?
Over 30% of the labour force worked in agriculture - if agricultural workers could afford more economy would be stimulated
FDR regarded farmers as the backbone of US society
What did the Farm Credit Administration of March 1933 do?
Co-ordinated agricultural issues
April - Emergency Farm Mortgage Act - loaned funds to farmers in danger of losing their properties
June - extended to farmers who had already lost their properties so they could recover them
What did the Agricultural Adjustment Administration of May 1933 do?
Gov’t subsidised farmers to reduce their acreage & prod.
Ploughed up a quarter or the 1933 cotton crop & slaughtered 6mn piglets
Farm incomes doubled 1933-6
What were the limitations of the AAA?
Much of the increase in incomes was actually accounted for by drought & dust storms and this further reduced prod & raised prices
What did the Tennessee Valley Authority of May 1933 do?
River Tennessee ran through 7 of the poorest states in the USA
Built 20 huge fans to control flooding & give cheap electricity
Tree planting to stop soil erosion
Develop welfare and educational programmes
Increased electricity supply from 2% of farms to 75%
Increased average income by 200%
Realising cheap electricity was available, industrialists built new factories creating more jobs
What were the limitations of the TVA?
Gov’t agencies manufacturing and selling electricity at a cheaper rate than private companies criticised
What did the National Recovery Administration do?
Drew up 557 diff. codes of practice - big step away from laissez-faire
Intended to ensure fair working conditions
TU’s given right of collective bargaining for wages
Anti-trust legislation suspended for 2yrs to promo industrial expansion
Economy grew by 10% 1933-6
What were the limitations of the NRA?
Codes were unworkable as they were intro’d too quickly without being thought through
Many felt the codes favoured big businesses
There was too much bureaucracy
Codes excluded agricultural workers & domestic servants - both areas w/ large amounts of African-Americans
SC declared NRA unconstitutional May 1935
What did the Civilian Conservation Corps of March 1933 do?
Employed 3mn men, aged 18-25, for public works
Improved the literacy of 100,000
Installed 65,100 miles of telephone line
Planted 1.3bn trees
What were the limitations of the CCC?
Primarily benefitted young white men
No guarantee of employment once men left the scheme
What was the Federal Emergency Relief Administration of May 1933?
Headed by Harry Hopkins, aimed to provide relief for the unemployed, which would be given through the individual states
Set a precedent for gov’t intervention
What were the limitations of the FERA?
Worked better in some states than others - Georgia & Oregon prided themselves on not providing federal relief - Hopkins had to threaten to cut off aid
In 6 cases, Hopkins had to take control of relief funding due to local resistance
Added only an average of $25 to a family’s monthly income
What did the Civil Works Administration do?
By Xmas 1933 the CWA employed 3mn & by mid-jan 1934 it employed 4.2mn
Built/improved thousands of km of roads & public buildings
What were the limitations of the CWA?
Ended by FDR in March 1934 due to cost concerns - cost $200mn per month compared to FERA $60mn per month
Criticised for creating ‘boondoggle’ jobs
What did the Public Works Administration do?
$3.3bn to ‘prime the pump’ - eg. Expenditure on roads led to demand for concrete led to jobs led to more spending etc
Headed by Harold Ickes who insisted that is only engaged in ‘worthwhile’ projects
What were the limitations of the PWA?
Didn’t reduce unemployment as much as the CWA
Ickes accused of being overly cautious - only spent $110mn in its first 6 months
Only provided jobs for skilled workers
