3.3 The New Deal Policies Flashcards
What are the three main aims of the New Deal?
- Relief
- Recovery
- Reform
Relief focuses on immediate aid, Recovery aims for economic stability, and Reform seeks to change systems.
What does the term ‘The 100 Days’ refer to?
A way of measuring the success of presidents in their first 3 months
This period is characterized by significant legislative activity.
What significant action did Roosevelt take on March 9 during the 100 Days?
Passed the Emergency Banking Act
This act enforced a ‘bank holiday’ lasting four days.
What was the purpose of the Emergency Banking Act?
Closed all banks for 4 days to allow the Federal Reserve to issue currency and decide which banks would be saved
This act was crucial in restoring public confidence in the banking system.
What was the outcome of Roosevelt’s first ‘fireside chat’?
People began to deposit their money again
By early April, $1 billion in currency had returned to bank deposits.
What legislation did Roosevelt create to stabilize the banking system?
The Glass-Steagall Act
This act aimed to separate commercial banking from investment banking.
What did the Glass-Steagall Act prohibit for commercial banks?
Involvement in investment banking
This was to prevent the type of speculation that contributed to the 1920s financial crisis.
What restriction did the Glass-Steagall Act place on bank officials?
They were not allowed to take personal loans from their own banks
This measure aimed to prevent conflicts of interest.
What change did the Glass-Steagall Act make regarding authority over open-market operations?
Authority was centralized by transferring it to the Federal Reserve Board
This shift aimed to create more consistent regulatory oversight.
What insurance did the Glass-Steagall Act provide for individual bank deposits?
Insurance against bank failure up to $2,500
The insurance fund was to be administered by the Federal Deposit Insurance Corporation (FDIC).
What was agricultural policy given a higher priority than industrial recovery?
30% of the labour force worked in agriculture. If agricultural workers could afford to buy more, industry would be stimulated
What was the Agricultural Adjustment Act 1933?
- Paid farmers to reduce production of ‘staple’ items
- Self financing through a tax placed on companies that processed food
What problems were there in Agriculture before the New Deal?
The overproduction of agricultural goods such as cotton and piglets
How did the Agricultural Adjustment Act succeed?
Total farm income rose from $4.5 billion in 1932 to $6.9 billion in 1935
What opposition was there to the Agricultural Adjustment Act?
- Six million piglets were bought and slaughtered. They were then processed and fed to the unemployed. This led to public outcry.
- Supreme Court ruled it as unconstitutional in 1936
- Led to the end of sharecropping which increased poverty
What were the 3 phases of the New Deal?
1st 1933-35: Focused on relief and recovery, particularly in industry, agriculture, and finance
2nd 1935-37: Focused on social security, labour rights, and the redistribution of wealth
3rd 1938-40: Focused on fiscal policy and deficit spending to stimulate the economy (Keynesian economics)
5 acts
What New Deal measures were there for agriculture?
- Agricultural Adjustment Act 1933
- Farm Credit Act 1933
- Rural Electrification Administration 1935
- Farm Security Administration 1937
- Tennessee Valley Authority 1933
What was the Farm Credit Act 1933?
Helped farmers manage their debts by loans from federal funds to pay for seed, machinery, and marketing
What was the Rural Electrification Administration 1935?
Brought electricity to rural areas - by 1940 40% of farms had electricity compared to 10% in 1935
What was the Farm Security Administration of 1937?
Gave guaranteed loans to small farmers to buy property or to improve farmers
What was the Tennessee Valley Authority 1933?
- Built dams to provide hydroelectric power, flood control, and irrigation
- allocated federal money to other social projects, including education
What was a problem with the Tennessee Valley Authority 1933?
Some communities were displaced by TVA projects. 3,500 families in eastern Tennessee lost their homes when Norris Dam was built
How successful was the New Deal for Agriculture?
- Did little to help those struggling due to dust bowl
- 80,000 migrates from states like Oklahoma (Okies) moved West and had poor working and living conditions - over 1/3 returned East
7 acts
What did the New Deal introduce for Banking and Finance?
- Emergency Banking Relief Act 1933
- Reconstruction Finance Corporation 1933
- Fireside chats
- Glass-Steagall Act 1933
- Truth in Securities Act 1933
- Securities Act 1934
- Banking Act 1935
What was the Truth in Securities Act 1933?
Required brokers to offer clients realistic information about the securities they were selling
What was the Securities Act 1934?
Set up a new agency, the Securities Exchange Commission to oversee stock market activities and prevent fraudulent activities
What was the Banking Act 1935?
Centralised the banking system so it was in the hands of the central government
What was introduced in the New Deal to tackle unemployment?
- Federal Emergency Relief Administration (FERA) 1933
- Civilian Conservation Corps (CCC) 1933
- Public Works Administration (PWA) 1933
What was the Federal Emergency Relief Administration 1933?
Provided $500 million to state and local agencies for relief payments to the unemployed. But many states did not believe in relief
What was the Civilian Conservation Corps 1933?
Provided work for young men working on conservation projects, such as planting trees for windbreaks and improving national parks
What was the Public Works Administration 1933?
Provided more than $3 billion for work creation projects, such as roads, schools, and hospitals. Discontinued in 1939
What did the New Deal introduce for Reform?
- National Recovery Agency (NRA) 1933
- Wagner Act 1935
- Social Security Act (SSA) 1935
- Fair Labour Standards Act (FLSA) 1937
What was the National Recovery Agency 1933?
- Set wage and price controls. Management, labour, and government met to agree cods for each industry including a 40hr working week, minimum weekly wage, and a ban on under 16s working
- Scrapped in 1935 when Supreme Court deemed in unconstitutional
What was the Wagner Act 1935?
Set up National Labour Board and strengthened powers of unions
What was the Social Security Act 1935?
Established pensions and unemployment benefits but didn’t cover farmers or domestic servants
What was the Fair Labour Standards Act 1937?
Minimum wage of 40c an hour. Raised wages of 12m workers by 1940 and a shorting working week by statute.
