The First New Deal Flashcards
Alphabet Agencies
TVA
May 1933
The Tennessee River Valley was an area notorious for flooding, poor infrastructure and a low standard of living
Area comprised 7 states: Tennessee, North Carolina, Georgia, Alabama, Mississippi, Virginia and Kentucky
Population of approximately 2 million people
Covered 40,000 square miles
Area of strong loyalty to Democratic Party
TVA established a network of dams to control the flow of the river and create hydro-electric power.
1933 only 2% of Tennessee Valley farms had electricity, by 1945 this increased to 75%
Flooding and erosion were prevented, increasing the agricultural yield of the area
Model of federal-state government co-operation
National Recovery Administration
June 1933
Led by General Hugh Johnson
NRA was to issue codes of practice for each industry
Codes aimed to ensure fair competition, fair wages and hours of work
Under NRA child labour was banned below the ages of 16
Section 7(a) allowed unions to collectively bargain for wage rates for their members.
NRA had $3.3 billion to spend
If a company or industry adopted NRA codes, it received the NRA Blue Eagle sign
NRA issued 557 codes of practice
Many of the codes proved unworkable
Some large companies such as Ford Motor Company refused to participate
NRA’s activities were declared unconstitutional by US Supreme Court in 1935
Hugh Johnson’s enthusiasm alienated as many people as it pleased
Johnson claimed the NRA put 2 million people back in work, the wages under NRA codes were low and most workers did not experience any improvement in working conditions
Regimentation of business by the NRA was not leading to economic recovery, which was evident even before the Supreme Court intervened
Civilian Conservation Corps
March 1933
It was an inter-departmental agency involving the Labour Department, Interior Department and Forest Service of the Department of Agriculture
Supervised by army
Offered work, mainly manual labour, to young men aged 18 to 25 years old, for a minimum of 6 months, up to 2 years
Involved taking 250,000 off the unemployment lists in cities and rural areas
Employees lived on-site in camps, which were segregated between blacks and whites
Pay was set at $1 a day plus lodging and food
$25 a month was sent home to families
Lasted until 1942
3 million young men took part in the programme
Built 125,000 miles of road, 46,854 bridges and planted 3 billion trees
Federal Emergency Relief Administration
May 1933
First attempt to aid unemployed directly
Put under control of former social worker, Harry Hopkins
Hopkins believed work would give the unemployed self-respect
$500 million budget
Provided work which resulted in building of over 5,000 public buildings
FERA oversaw state-organised relief for unemployed
Hopkins used threat of withdrawal of federal funding to force reluctant states like Georgia and Oregon to take part in the scheme
Civil Work Administration
November 1933
Onset of winter meant millions of unemployed faced severe hardship
CWA was a temporary administration created to meet the problems caused by the winter of 1933-34
With a budget of $400 million, Hopkins hired over 4.2 million workers in 4 months
Workers built over 200 airports and 255,000 miles of road
Although emergency relief was the main reason for the creation of the CWA, it did provide valuable infrastructure for the US economy, which encouraged future economic growth
Public Works Administration
June 1933
Created as part of the National Industrial Recovery Act
Placed under Harold Ickes, head of Department of Interior
PWA aimed at a more long-term programme of stimulating economic growth
Budget of $3.3 billion
Hopkins was accused of providing jobs aimed merely to give the unemployed emergency work (boondoggle jobs that had no real purpose) whereas Ickes aimed to provide real, long term jobs
PWA was responsible for building 13,000 schools and 50,000 miles of road
Ickes accused of spending money too slowly
Hopkins’ aim was to reduce unemployment as quickly as possible and spent $5 million in a few hours whereas the PWA spent $110 million of its whole $3.3 billion budget in 6 months
Agricultural Adjustment Administration to help farmers
June 1933
nationwide plan to assist farmers and improve agriculture came with the passage of the Agricultural Adjustment Act in May 1933
AAA was under leadership of Agriculture Secretary, Henry Wallace
introduced allotment plan whereby to prevent agricultural surpluses, farmers would reduce the acreage under cultivation or reduce their production
By 1935, 35 million acres had been removed from cultivation but farm incomes rose in the same period from $4.5 billion to $6.9 billion
not all farmers benefited - black American sharecroppers still lived in poverty
1935, most rural areas were still without electricity
Climatic changes and poor agricultural methods resulted in the Dustbowl
By 1930s thousands of poor farmers fled the area along Route 66 for work in southern California
The Emergency Banking Act
March 1933
Two days after FDR’s inauguration he order a national bank holiday from 6th to 9th March - in that period he persuaded Congress to pass EBA in a record 7 hours
during holiday US Treasury investigated all banks threatened with collapse and only those approved by Treasury could reopen on 10th
Monies from Reconstruction Finance Corporation were used to prevent banking collapse
Within 1 week FDR effectively restored confidence in banking industry
Glass-Steagall Banking Act
June 1933
separated commercial from investment banking
created the Federal Deposit Insurance Corporation which guaranteed all bank deposits to the value of $5000
in 1936 for the first time in 60 years, no US bank closed for business
The Federal Securities Act
May 1933
regulate whole system of buying and selling shares
All new share purchases had to be registered with Federal Trade Commission
1934: FDR created Securities and Trade Commission which regulated all share transactions and stock exchanges across the US
Joseph Kennedy was in charge
Frenzied speculation in shares came to an end
Gold Reserve Act and Silver Purchase Act
GRA: January 1934
SPA: June 1934
GRA devalued US dollar against rate of gold - FDR hoped this would make US exports cheaper
SPA hoped to raise prices by increasing amount of silver in US coinage - aim was to increase money supply in order to encourage economic activity
neither Act revived US trade - FDR’s belief that causes of the economic crisis were domestic and not international
London Economic Conference
July 1933
other nations wanted to stabilise value of currencies to stimulate international trade
FDR wanted to work alone
By hindering international co-operation, FDR may have harmed US economy - prevented foreign economies growing sufficiently to start importing US-made goods
The Indian Reorganisation Act
1934
The Act recognised and encouraged Native American culture
Tribes were recognised into self-governing bodies that could vote to adopt constitutions and have their own police and legal systems
They could control land sales on reservations, while new tribal corporations were established to manage tribal resources
Many felt return to tribal traditions was a backward move and they need assimilation to prosper in society
Collier was accused of encouraging Native Americans to “go back to the blanket” and seemed indifferent to Native American resistance to the efforts of big corporations to exploit natural resources on reservation land
Collier did his best to ensure Native Americans could take advantage of the CCC and the PWA - due to amount of poverty, these agencies offered little relief
Collier’s work was important in affording a new respect for Native Americans
They remained the poorest people in the USA
The Home Owners Refinancing Corporation
This agency helped homeowners by offering new mortgages at low interest rates over longer periods
The Federal Housing Administration
June 1934
Aim was to offer federal insurance to protect the ability to repay low-interest, long-term mortgages taken out by those buying new homes
This was an attempt to stimulate the building industry
The loans were solely for newly purchased single-family homes; they could not be used to renovate existing properties or for buildings set out as apartments where several people lived
FHA therefore did nothing to help increasingly poverty-stricken inner cities
One of the agencies effects was to encourage movement to suburbs
65% of new houses costing over $4,000 meant it was estimated less than 25% of urban families could afford to take out any kind of mortgage on them
Act mainly benefited white, middle-class families
inner-city areas tended to be run down and left poorer ethnic minorities who were forced to rent squalid properties
