THEME 2: d - the Second New Deal Flashcards
How was the second New Deal different from the first?
- reintroduced competition but with regulations on fair play
* Much more radical - some say he clearly favoured the poor at expense of the rich
Why was the second New Deal more radical?
- Responding to the opposition
- Congress demanded more, and Roosevelt didn’t want them to set the agenda
- Increasingly frustrated by the wealthy classes and big business who opposed him
- desire to appeal to the disadvantaged who he felt were often ignored
What did the Emergency Relief Appropriation Act do? 1935
It set up the Works Progress Admin
- largest appropriation for relief
- ERAA allocated it $45.5
What did the WPA do?
- recruited people for public work projects (by 1941, 2 mil employees at any one time)
- wages approx $52 per month - greater than any relief but less than the going rate in the industry
- built 8,000 schools & hospitals
What was the WPA not allowed to do?
- compete for contracts w/ private firms or build private houses
- not supposed to engage in large scale projects - but it did
What did the Resettlement Administration do? 1935
- merged all rural rehabilitation projects into one new agency - the resettlement admin
- aimed to move 500,000 families from overworked land to more promising areas - only resettled 4,441 families
- taught them how to farm effectively using modern machinery & efficient techniques
Why was the Revenue (Wealth Tax) Act established? (1935)
To pay for New Deal reforms - it seemed logical to raise more revenue by taxing those who could afford it
What were the attitudes towards to Revenue (Wealth Tax) Act?
The rich (those affected) saw it be an attack on the fundamental right of Americans to become rich
What did the the Revenue (Wealth Tax) Act do?
- created a graduated tax on corporate income & profits tax on corporations
- max. tax on incomes >$50,000 raised from 59% to 75%
- However, this raised little money due to loopholes in legislation & the fact that only 1% of the pop earnt over $10,000
- set a precedent for higher taxation during WW2
Why was the ‘Wagner Act’ not initiated by Roosevelt?
He was reluctant to get involved in labour relations…why?
- there was a mistrust of labour unions - esp among Southern Democrats, whose support R needed
- supporting unions would further aggravate big businesses
What did the ‘Wagner Act’ do?
- guaranteed workers the rights to collective bargaining through the unions they choose
- they could choose their union through a secret ballot
- created a new 3 man National Labour Relations Board - to ensure fair play
- employers forbidden from unfair practices & dis
What did the Public Utility Holding Company Act do? (1935)
- ordered the breaking up of all companies more than twice removed from the operating company - destroyed the pyramid structure
- did this by making all holding companies register with the SEC (securities exchange commission)
- any company twice removed from utility & couldn’t justify there existence was the be eliminated
What did the Social Securities Act, 1935 do?
- first federal measure of direct help
- provided for old-age pensions (funded my employer & employee, self financing) FEDERAL
- unemployment insurance for up to 16 weeks - paid for by payroll taxes (employer & employee) STATE
What were the limitations of the Social Securities Act?
- inadequate to meet the needs of the poor
- amount on pension ranged from $10 - $85 per month because it relied on employee & employer contributions
- states received the same amount per child but the amounts paid varied widely - some $61 per months others $8
- those who needed the most help: farmers, domestic servants & those working for small scale workers were EXCLUDED from the act - jobs mostly performed by African Americans
Why was the Social Security Act important?
- signified a major break in American tradition
- Never had there been a direct system of national benefits
- transformed the role of the federal government
- sent a loud message that the federal gov cared about it’s people
What did the Banking Act do? (1935)
- repealed the 1913 Federal Reserve Act - which governed America’s banking system
- control of banking was removed from private banks to central gov
- the centre of financial management shifted from NY to Washington
Why was the 1939 presidential election important?
If Roosevelt was voted in for a second term, it would show the populations support for the changes in the role of the government - made over the 1st & 2nd new deal
What opposition did Roosevelt face in his second term?
- The supreme court
- big businesses & wealthy people
- Republican congressmen
What conflict did Roosevelt face with the Supreme Court?
- They began to declare legislation unconstitutional towards the end of R’s term
- In 140 years before 1935 it only found 60 federal laws unconstitutional, but found 11 in 18 months (1935 - 36)
What was ‘Black Monday’ 27th May, 1935?
The Supreme Court attacked the new deal in several ways:
- found the Farm Mortgage Act unconstitutional
- argued for the removal of a trade commissioner (R thought this was his job not theirs)
- found the NIRA unconstitutional through the ‘sick chicken’ case
What was the ‘sick chicken’ case?
- Schechter Brothers - a firm of butchers in NY
- selling chickens unfit for human consumption
- prosecuted by the NIRA for breaking codes of practise
- they appealed to the Supreme Court & declared the poultry code illegal
What was the impact of the ‘sick chicken’ case?
- the decision meant that the federal gov. had no right to interfere in internal state issues
- if the federal gov. couldn’t prosecute individual firms for breaking NIRA codes, it meant all codes were unconstitutional
- the codes were the heart of the NIRA, it couldn’t survive without them
- the ruling implied that the gov. had no powers to oversee nationwide economic affairs (unless they affect interstate commerce)
What did Roosevelt believe about the Supreme Court?
- they were old & out of touch
- they were blocking him as a democratically elected government from doing his work
- He needed to put in one of his own appointments & reform the Supreme Court
What was the Judiciary Reform bill?
- proposed that the president could appoint a new justice whenever an existing judge reached the age of 70 & failed to retire within 6 months
- also that he could appoint 6 new justices, increasing the possible total to 15
- drawn up in secret & proposed to Congress Feb 1936
- REASONING = the Supreme Court couldn’t keep up with the volume of work - more justices would help
Why did the Judiciary Reform Bill fail?
- after discussion, they found more justices would make work more difficult
- Congressmen began to fear he might make then retire at 70
- underestimated the popularity & respect people had for the court
- In proposing this measure he was seen as a DICTATOR
The Senate rejected the bill in July 1936 by 70 votes to 20
What one win did Roosevelt have in the Supreme Court?
- Once judge became ill & announced his retirement
- The court recognised the support R. had so upheld legislation like the Social Security Act
- As more justices began to retire, R could appoint his supporters & did not again attempt to reform the Supreme Court
How did the Roosevelt’s Republican opposition impact him?
- they teamed up with conservative democrats - all believed the ND had gone too far
- No one passed his anti lynching bill
- Both houses on Congress issued a ‘Conservative Manifesto’ (1937) calling for lower taxes & anti strike legislation
What was the ‘Roosevelt Recession’? (1937-38)
- Federal expenditure cut ‘37 to meet R’s balanced budget
- although he hoped businesses had sufficiently recovered by then - they hadn’t
- The cutbacks led to what became known as the ‘Roosevelt Recession’
What are the key aspects of the Roosevelt Recession?
- unemployment increased and social security payments consumed $2 BIL on nation’s wealth
- production of motor cars fell by approx. 50%
- national income fell by 13%
- 66% of gains made during ND years were lost
What was the nations mood towards Roosevelt in 1938 - the end of his second term?
- seen as a ‘lame duck’ president whose policies had failed to deliver recovery
- no more ND measures passed after Jan 1939
- post 1939 foreign affairs dominated
