Roosevelt and the New Dealimages.pcmac.org/SiSFiles/Schools/AL/SaralandCity...1905 Franklin...

1931• German unemployment

reaches 5.6 million

• Surrealist artist SalvadorDali paints Persistenceof Memory

1933• Adolf Hitler appointed

German chancellor

• Japan withdraws fromLeague of Nations

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Roosevelt and the New Deal

1928• Franklin Delano

Roosevelt electedgovernor of New York

1929• Great Depression begins

1933• Gold standard abandoned

• Federal Emergency ReliefAct and AgriculturalAdjustment Act passed

1928• Alexander Fleming

discovers penicillin

1930• Germany’s Nazi Party wins

107 seats in Reichstag

Why It MattersUnlike Herbert Hoover, Franklin Delano Roosevelt was willing to employ deficit spending andgreater federal regulation to revive the depressed economy. In response to his requests, Congresspassed a host of new programs. Millions of people received relief to alleviate their suffering, butthe New Deal did not really end the Depression. It did, however, permanently expand the federalgovernment’s role in providing basic security for citizens.

The Impact TodayCertain New Deal legislation still carries great importance in American social policy.• The Social Security Act still provides retirement benefits, aid to needy groups, and

unemployment and disability insurance. • The National Labor Relations Act still protects the right of workers to unionize.• Safeguards were instituted to help prevent another devastating stock market crash.• The Federal Deposit Insurance Corporation still protects bank deposits.

The American Vision Video The Chapter 23 video, “Franklin Roosevelt and the New Deal,” describes the personal and political challenges Franklin Roosevelt faced as president.

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1931• The Empire State Building

opens for business

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1928 1931 1934

F. Roosevelt1933–1945

1933–1939

Hoover1929–1933

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1937• Court-packing bill defeated

• “Roosevelt recession” begins

1938• Fair Labor

Standards Actpassed

1936• Civil War erupts

in Spain

HISTORY

Chapter OverviewVisit the American VisionWeb site at tav.glencoe.comand click on ChapterOverviews—Chapter 23 topreview chapter information.

In this Ben Shahn mural detail, New Deal planners (at right) design thetown of Jersey Homesteads as a home for impoverished immigrants.

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1938• Hitler annexes

Austria

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1939• World War II begins

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1935• Supreme Court strikes

down NIRA

• Social Security Act passed

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1937 1940

http://tav.glencoe.com

1905Franklin Roosevelt andEleanor Roosevelt marry

678 CHAPTER 23 Roosevelt and the New Deal

✦ 1915 ✦ 1935

Roosevelt’s Rise to PowerIn mid-June 1932, with the country deep in the Depression, Republicans gathered in

Chicago and nominated Herbert Hoover to run for a second term as president. Themood at the convention was somber. Delegates knew the Depression had turned manyvoters against Hoover.

When Louis Howe was a child in Saratoga Springs, New York, a bicycle accident left hisface scarred. As an adult and a reporter for his father’s newspaper, he cheerfully describedhimself as “one of the four ugliest men in the state of New York.” Howe dressed sloppily, per-haps to demonstrate how little importance he attached to appearance. He worked hard, how-ever, and was respected for his reporting.

In the winter of 1911, Howe traveled to Albany to interview a Democratic state senator,Franklin Delano Roosevelt—or FDR, as he was called. Howe found himself fascinated by thetall, intense young man with the gold-rimmed glasses who paced back and forth in front ofhim, earnestly answering his questions. He admired the dashing appearance Roosevelt made.

During the interview Roosevelt declared his intention to challenge the party bosses. Theusually skeptical Howe found himself believing the young legislator. “I made up my mind,” Howe later recalled, “that nothing but an accident could keep him from becoming president.”

—adapted from The Crisis of the Old Order

Roosevelt Takes Office

Main IdeaFranklin Delano Roosevelt’s character and experiences prepared him for thepresidency of a nation in crisis.

Key Terms and NamesNew Deal, polio, gold standard, bank holiday

Reading StrategyOrganizing As you read about FranklinRoosevelt’s background, complete agraphic organizer similar to the onebelow by listing the early influences andexperiences that helped shape Rooseveltas a politician.

Reading Objectives• Discuss Franklin Roosevelt’s early

political career.• Explain the worsening situation in the

U.S. banking system in the early 1930s.

Section ThemeIndividual Action Franklin Roosevelt’soptimism, determination, and outgoingpersonality shaped his approach to politics.

Influences andExperiences

✦ 1925

1910Roosevelt elected toNew York State Senate

1921 Roosevelt strickenwith polio

1928Roosevelt elected governor of New York

✦ 1905

Franklin D. Rooseveltas a young man

Later that month, the Democrats also met inChicago to choose their own candidate for president.It took four ballots and a great deal of negotiating,but the party eventually chose the popular governorof New York, Franklin Delano Roosevelt. When hewon the nomination, Roosevelt broke with traditionby flying to Chicago to deliver the first acceptancespeech ever made to a nominating convention.Roosevelt’s speech set the tone for his campaign:

“The appearance before a National Convention ofits nominee for President . . . is unprecedented andunusual, but these are unprecedented and unusualtimes. . . . Let it also be symbolic that in so doing Ibroke traditions. Let it be from now on the task of ourParty to break foolish traditions. . . . It is inevitablethat the main issue of this campaign should revolveabout . . . a depression so deep that it is withoutprecedent. . . . Republican leaders not only havefailed in material things, they have failed in nationalvision, because in disaster they have held out nohope. . . . I pledge you, I pledge myself, to a newdeal for the American people.”

—quoted in The Public Papers and Addresses of Franklin D. Roosevelt

The next day, a cartoonist used thewords “new deal” to stand forRoosevelt’s program. From that pointforward, Roosevelt’s policies for end-ing the Depression became known asthe New Deal. Roosevelt’s confi-dence that he could make things bet-ter contrasted sharply with Hoover’sapparent failure to do anything effec-tive. On Election Day, Roosevelt wonthe Electoral College in a landslide,472 votes to 59, and he receivednearly 23 million votes to slightly lessthan 16 million for Hoover in thegeneral election.

Roosevelt’s Background Franklin Roosevelt—adistant cousin of President Theodore Roosevelt—wasborn in 1882 to a wealthy New York family. Rooseveltgrew up on his family’s estate at Hyde Park on theHudson River. There, Roosevelt learned to hunt, fish,ride horses, and sail, and he developed his lifelongcommitment to conservation and a love of ruralAmerica. Roosevelt was educated at Harvard andColumbia Law School. While at Harvard, he becamefriends with Theodore Roosevelt’s niece, Eleanor.Soon afterward, they were married.

Roosevelt was intensely competitive. He enjoyedwinning and liked to be in control. He also likedbeing around people. His charming personality, deeprich voice, and wide smile expressed confidence andoptimism. He could also be very persuasive. Overall,FDR’s personality seemed made for a life in politics.

FDR’s Early Political Career Shortly after leavinglaw school, Roosevelt plunged into politics. In 1910he won a seat in the New York State Senate, where heearned a reputation as a progressive reformer willingto stand up to the party bosses. Roosevelt stronglysupported Woodrow Wilson’s presidential campaignin 1912. After winning the election, Wilson rewardedRoosevelt by appointing him assistant secretary ofthe navy, a position he held through World War I.

The Young Roosevelts Franklin Roosevelt andEleanor Roosevelt were married in 1905. They weredistantly related through former president TheodoreRoosevelt—her uncle and his cousin. What sort ofchildhood did Franklin Roosevelt have growing upin Hyde Park, New York?

History

In 1920, hoping his name would win votes, theDemocrats nominated Roosevelt as their candidatefor vice president. After losing the election,Roosevelt temporarily withdrew from politics. Thenext year he came down with a fever and soon feltnumbness in both legs. He had caught the dreadedand paralyzing disease known as polio. Althoughthere was no cure, Roosevelt refused to give in. Hebegan a vigorous exercise program to restore muscle control. Eventually, by wearing heavy steelbraces on his legs, he was able to appear to walk byleaning on a cane and someone’s arm and swinginghis legs forward by moving his hips.

While recovering from polio, Roosevelt dependedon his wife to keep his name prominent in the NewYork Democratic Party. Although shy, EleanorRoosevelt became an effective public speaker. Herefforts during this time kept her husband’s politicalcareer alive.

Governor of New York By the mid-1920s, Roo-sevelt was again active in the Democratic Party. Hebecame a strong supporter of New York’s governor,Alfred E. Smith. When the Democratic Party nomi-nated Smith for president in 1928, Smith urgedRoosevelt to run for governor of New York.Roosevelt campaigned hard to demonstrate that hisillness had not slowed him down, and he narrowlywon the election.

Roosevelt’s policies as governor made him verypopular. He cut taxes for farmers and worked toreduce the rates charged by public utilities. In 1931,as the Depression worsened, Roosevelt convincedthe New York legislature to set up a new stateagency to help unemployed New Yorkers. Theagency distributed over $25 million in aid that pro-vided relief to about 10 percent of New York’s families.

Roosevelt’s popularity in New York paved theway for his presidential nomination in 1932. ManyAmericans applauded his use of the government’spower to help people in economic distress. Othersbelieved that his struggle against polio had givenhim a better understanding of their hardships.

Perhaps most important, Americans saw inRoosevelt an energy and optimism that gave themhope despite the tough economic times. AfterRoosevelt became president, his serenity and confi-dence amazed many people. When one aide com-mented on his attitude, Roosevelt replied, “If youhad spent two years in bed, trying to wiggle your bigtoe, after that anything else would seem easy.”

Interpreting What events inRoosevelt’s life shaped his ideas and character?

Roosevelt Is InauguratedAlthough Roosevelt won the presidency in

November 1932, the country’s unemployed andhomeless had to endure one more winter as theywaited for his inauguration on March 4, 1933. Allthrough the winter, unemployment continued to rise.Theater director Harold Clurman later wrote aboutthe fear:

“Yes, we could smell the depression in the air, thathistorically cruel winter of 1932–33, which chilled somany of us like a world’s end. . . . It was like a rawwind; the very houses we lived in seemed to beshrinking, hopeless of real comfort.”

—quoted in Franklin Roosevelt and the New Deal

Reading Check

Roosevelt DimePast: Search for a CureIn 1921 Franklin Roosevelt con-tracted polio, a disease that par-alyzed his legs. Few people knewof his physical limitations whenhe became president. His only free-dom from braces came when he swam.After Roosevelt established a foundation for polio victims atWarm Springs, Georgia, entertainer Eddie Cantor suggestedthat everyone in the country send a dime for polio research tothe president. This campaign, which became known as theMarch of Dimes, produced 150,000 letters a day. In 1945Congress voted to honor Roosevelt by placing his image onthe dime.

Present: A ThreatEliminatedIn the early 1950s, Dr. JonasSalk discovered the poliovaccine. Today polio is nolonger the threat to healththat it once was.

680

Meanwhile, bank runs greatly increased, furtherthreatening the nation’s banking system. Some of thebank runs occurred because people feared Rooseveltwould abandon the gold standard and reduce thevalue of the dollar in order to fight the Depression.Under the gold standard, one ounce of gold equaleda set number of dollars. To reduce the value of thedollar, the United States would have to stop exchang-ing dollars for gold. Many Americans, and many for-eign investors with deposits in American banks,decided to take their money out of the banks andconvert it to gold before it lost its value.

Across the nation, people stood in long lines withpaper bags and suitcases, waiting to withdraw theirmoney from banks. By March 1933, over 4,000 banks

had collapsed, wiping out 9 million savings accounts.In 38 states, governors declared bank holidays—closing the remaining banks before bank runs couldput them out of business.

By the day of Roosevelt’s inauguration, most ofthe nation’s banks were closed. One in four workerswas unemployed. The economy seemed paralyzed.Roosevelt knew he had to restore the nation’s confi-dence. “First of all,” the president declared in hisInaugural Address, “let me assert my firm belief thatthe only thing we have to fear is fear itself. . . . Thisnation asks for action, and action now!”

Summarizing What was thenation’s condition when Roosevelt took office?

Reading Check

Writing About History

CHAPTER 23 Roosevelt and the New Deal 681

Checking for Understanding1. Define: gold standard.2. Identify: New Deal, polio, bank

holiday.3. Describe the ways in which early

influences and experiences shapedRoosevelt as a politician.

Reviewing Themes4. Individual Action Why did Roosevelt’s

election lead to an increase in bankruns?

Critical Thinking5. Explaining How did FDR’s experiences

as governor of New York prepare himfor the presidency?

6. Organizing Use a graphic organizer likethe one below to list early influences onRoosevelt’s political career.

Analyzing Visuals7. Analyzing Photographs Study the

photograph on this page. What did thepresident mean when he said “the onlything we have to fear is fear itself”?

Early Political

Influences

“. . . the only thing we haveto fear is fear itself . . .”

—Franklin D. Roosevelt

Inspiring Words President Roosevelt usedhis first Inaugural Address of March 1933 torally the nation’s spirits. What problems had

made the nation anxious and fearful?

History

8. Persuasive Writing Imagine you areliving during the Depression. In yourhometown, there has been a bank run.Write a letter to the president describ-ing this event. Ask him to take steps tocure the bank crisis.

Meanwhile, bank runs greatly increased, furtherthreatening the nation’s banking system. Some of thebank runs occurred because people feared Rooseveltwould abandon the gold standard and reduce thevalue of the dollar in order to fight the Depression.Under the gold standard, one ounce of gold equaleda set number of dollars. To reduce the value of thedollar, the United States would have to stop exchang-ing dollars for gold. Many Americans, and many for-eign investors with deposits in American banks,decided to take their money out of the banks andconvert it to gold before it lost its value.

Across the nation, people stood in long lines withpaper bags and suitcases, waiting to withdraw theirmoney from banks. By March 1933, over 4,000 banks

had collapsed, wiping out 9 million savings accounts.In 38 states, governors declared bank holidays—closing the remaining banks before bank runs couldput them out of business.

By the day of Roosevelt’s inauguration, most ofthe nation’s banks were closed. One in four workerswas unemployed. The economy seemed paralyzed.Roosevelt knew he had to restore the nation’s confi-dence. “First of all,” the president declared in hisInaugural Address, “let me assert my firm belief thatthe only thing we have to fear is fear itself. . . . Thisnation asks for action, and action now!”

Summarizing What was thenation’s condition when Roosevelt took office?

Reading Check



Checking for Understanding1. Define: gold standard.2. Identify: New Deal, polio, bank

holiday.3. Describe the ways in which early

influences and experiences shapedRoosevelt as a politician.

Reviewing Themes4. Individual Action Why did Roosevelt’s

election lead to an increase in bankruns?

Critical Thinking5. Explaining How did FDR’s experiences

as governor of New York prepare himfor the presidency?

6. Organizing Use a graphic organizer likethe one below to list early influences onRoosevelt’s political career.


photograph on this page. What did thepresident mean when he said “the onlything we have to fear is fear itself”?

Early Political

Influences

“. . . the only thing we haveto fear is fear itself . . .”

—Franklin D. Roosevelt

Inspiring Words President Roosevelt usedhis first Inaugural Address of March 1933 torally the nation’s spirits. What problems had

made the nation anxious and fearful?

History

8. Persuasive Writing Imagine you areliving during the Depression. In yourhometown, there has been a bank run.Write a letter to the president describ-ing this event. Ask him to take steps tocure the bank crisis.


The Hundred Days Begins Roosevelt and his advisers, sometimes called the Brain Trust, came into office burst-

ing with ideas for recovery from the Depression. Roosevelt had no clear agenda. Theprevious spring, during his campaign for the presidential nomination, Roosevelt hadrevealed the approach he would take as president. “The country needs,” Rooseveltexplained, “bold, persistent experimentation. . . . Above all, try something.”

The new president began to send bill after bill to Congress. Between March 9 and June16, 1933—which came to be called the Hundred Days—Congress passed 15 major acts to

In the 1920s, cowboy and comedian Will Rogers said that his life’s work was “to rescue the country

from the hands of the politicians.” He used his sharp wit to go after these public figures. A friend of

presidents and politicians of both parties, Rogers nevertheless satirized them mercilessly in public

appearances and on the radio.

With FDR, however, Rogers changed his tune: “President Roosevelt closed the banks before lunch

and called Congress into session while he was having dessert. . . . The whole country is with him. . . .

Even if he does what is wrong they are with him, just so he does something. . . . If he burned down

the Capitol, we would cheer and say, ‘Well, we at least got a fire started anyhow.’ ”

As Roosevelt’s New Deal gained momentum, Rogers praised the resulting flurry of legislation:

“Mr. Roosevelt just makes out a little list of things every morning that he wants [Congress] to do . . .

and the whole country is better off.”

—adapted from Will Rogers: A Biography

The First New Deal

Main IdeaIn the first 100 days of Roosevelt’s presi-dency, his team initiated a series of lawsthat transformed the United States.

Key Terms and NamesHundred Days, fireside chats, Securitiesand Exchange Commission, FederalDeposit Insurance Corporation,Agricultural Adjustment Administration,Civilian Conservation Corps

Reading StrategySequencing As you read about PresidentRoosevelt’s first three months in office,complete a time line similar to the onebelow to record the major problems headdressed during this time.

Reading Objectives• List three programs of the First New

Deal that provided jobs for the unemployed.

• Discuss why New Dealers believed thatsometimes the government needs toregulate industry and labor.

Section ThemeGroups and Institutions FDR’s attemptsto end the Depression resulted in manynew government agencies.

March 5, 1933

June 16, 1933

March 4, 1933FDR inaugurated

✦July 1933

March 31, 1933Civilian ConservationCorps created

May 12, 1933Federal Emergency Relief Act;Agricultural Adjustment Act

June 16, 1933National Industrial Recovery Act; Glass-Steagall Banking Act; Farm Credit Act

✦May 1933✦March 1933


The Hundred Days Begins Roosevelt and his advisers, sometimes called the Brain Trust, came into office burst-

ing with ideas for recovery from the Depression. Roosevelt had no clear agenda. Theprevious spring, during his campaign for the presidential nomination, Roosevelt hadrevealed the approach he would take as president. “The country needs,” Rooseveltexplained, “bold, persistent experimentation. . . . Above all, try something.”

The new president began to send bill after bill to Congress. Between March 9 and June16, 1933—which came to be called the Hundred Days—Congress passed 15 major acts to

In the 1920s, cowboy and comedian Will Rogers said that his life’s work was “to rescue the country

from the hands of the politicians.” He used his sharp wit to go after these public figures. A friend of

presidents and politicians of both parties, Rogers nevertheless satirized them mercilessly in public

appearances and on the radio.

With FDR, however, Rogers changed his tune: “President Roosevelt closed the banks before lunch

and called Congress into session while he was having dessert. . . . The whole country is with him. . . .

Even if he does what is wrong they are with him, just so he does something. . . . If he burned down

the Capitol, we would cheer and say, ‘Well, we at least got a fire started anyhow.’ ”

As Roosevelt’s New Deal gained momentum, Rogers praised the resulting flurry of legislation:

“Mr. Roosevelt just makes out a little list of things every morning that he wants [Congress] to do . . .

and the whole country is better off.”

—adapted from Will Rogers: A Biography

The First New Deal

Main IdeaIn the first 100 days of Roosevelt’s presi-dency, his team initiated a series of lawsthat transformed the United States.

Key Terms and NamesHundred Days, fireside chats, Securitiesand Exchange Commission, FederalDeposit Insurance Corporation,Agricultural Adjustment Administration,Civilian Conservation Corps

Reading StrategySequencing As you read about PresidentRoosevelt’s first three months in office,complete a time line similar to the onebelow to record the major problems headdressed during this time.

Reading Objectives• List three programs of the First New

Deal that provided jobs for the unemployed.

• Discuss why New Dealers believed thatsometimes the government needs toregulate industry and labor.

Section ThemeGroups and Institutions FDR’s attemptsto end the Depression resulted in manynew government agencies.

March 5, 1933

June 16, 1933

March 4, 1933FDR inaugurated

✦July 1933

March 31, 1933Civilian ConservationCorps created

May 12, 1933Federal Emergency Relief Act;Agricultural Adjustment Act

June 16, 1933National Industrial Recovery Act; Glass-Steagall Banking Act; Farm Credit Act

✦May 1933✦March 1933

meet the economic crisis, setting a pace for new legis-lation that has never been equaled. Together, theseprograms made up what would later be called theFirst New Deal.

Origins of the New Deal The New Deal was notbased on a clear strategy shaped by a single philoso-phy. Roosevelt was not an intellectual, nor did he havea strong political ideology. He was a practical politi-cian. FDR was willing to try a variety of approachesboth to see whether they worked and whether theywere helping or hurting him politically.

To generate new ideas and programs, Rooseveltsought advice from a wide range of advisers withexperience in academia, business, agriculture, gov-ernment, law, and social work. The president deliber-ately chose advisers who disagreed with each other.He wanted to hear many different points of view, andby setting his advisers against one another, Rooseveltensured that he alone made the final decision onwhat policies to pursue.

A Divided Administration Roosevelt’s adviserswere divided roughly into three main groups. Despitetheir disagreements, most of the advisers had grownup in the Progressive Era, and their approachesreflected progressive ideas. They generally favoredsome form of government intervention in the econ-omy—although they disagreed over what the govern-ment’s role should be.

One group that was very influential during the earlyyears of Roosevelt’s administration supported the“New Nationalism” of Theodore Roosevelt. Theseadvisers believed that business andgovernment should work together to manage the economy. They hadbeen very impressed by business-government cooperation on the WarIndustries Board during World War I.They believed that if governmentagencies worked with businesses toregulate wages, prices, and produc-tion, they could lift the economy outof the Depression.

A second group of advisers in theRoosevelt administration went evenfurther. They distrusted big businessand blamed business leaders forcausing the Depression. These advis-ers wanted government planners torun key parts of the economy.

A third group in Roosevelt’sadministration supported the “New

Freedom” of Woodrow Wilson. They too blamed largetrusts for the Depression, but they believed the govern-ment had to restore competition to the economy. Theseadvisers wanted Roosevelt to support “trust busting”by breaking up big companies and allowing competi-tion to set wages, prices, and production levels. Theyalso thought the government should impose regula-tions on the economy to keep competition fair.

Summarizing What ideas didRoosevelt’s advisers support?

Fixing the Banks and the Stock Market

As the debate over policies and programs swirledaround him, President Roosevelt took office withone thing clear in his mind. Very few of the pro-posed solutions would work as long as the nation’sbanks remained closed. The first thing he had to dowas restore confidence in the banking system.

The Emergency Banking Relief Act On his veryfirst night in office, Roosevelt told Secretary of theTreasury William H. Woodin he wanted an emergencybanking bill ready for Congress in less than five days.The following afternoon, Roosevelt declared anational bank holiday, temporarily closing all banks,and called Congress into a special session scheduled tobegin on March 9, 1933.

On the day Congress convened, the House ofRepresentatives unanimously passed the EmergencyBanking Relief Act after only 38 minutes of debate.

Reading Check

Presidential Assurances PresidentRoosevelt often used radio addresses to calmthe public’s fears during the Great Depression.At the beginning of his first term, he encour-aged Americans to put their money back in federally inspected banks. Why do you thinkthe president declared a bank holiday?

History

The Senate approved the bill that evening, andRoosevelt signed it into law shortly afterward. Thenew law required federal examiners to survey thenation’s banks and issue Treasury Departmentlicenses to those that were financially sound.

On March 12, President Roosevelt addressed thenation by radio. Sixty million people listened to thisfirst of many “fireside chats,” direct talks FDR heldwith the American people to let them know what hewas trying to accomplish. He told the people thattheir money would now be secure if they put it backinto the banks. “I assure you that it is safer to keepyour money in a reopened bank than under the mat-tress.” When banks opened the day after the speech,deposits far outweighed withdrawals. The bankingcrisis was over.

Regulating Banks and Brokers Although PresidentRoosevelt had restored confidence in the banking sys-tem, many of his advisers who favored trust-bustingand fair competition urged him to go further. They

pushed for new regulations for both banks and thestock market. Roosevelt agreed with their ideas andthrew his support behind the Securities Act of 1933and the Glass-Steagall Banking Act.

The Securities Act required companies that soldstocks and bonds to provide complete and truthfulinformation to investors. The following year Congresscreated an independent agency, the Securities andExchange Commission (SEC), to regulate the stockmarket and prevent fraud.

The Glass-Steagall Act separated commercial bank-ing from investment banking. Commercial banks handle everyday transactions. They take deposits,pay interest, cash checks, and loan money for mort-gages and other business activities. Under the Glass-Steagall Act, these banks were no longer permitted torisk depositors’ money by using it to speculate on thestock market.

To further protect depositors, the Glass-Steagall Actalso created the Federal Deposit InsuranceCorporation (FDIC) to provide government insurance


The TVAPerhaps no New Deal program produced as many visible

benefits as the Tennessee Valley Authority (TVA). This dam-building project was a bold venture to control floods, con-serve forestlands, and bringelectricity to rural America. TheTVA created a comprehensiveplan for developing a vastseven-state region drained bythe Tennessee and Cumber-land Rivers and populatedmainly by poor farmers work-ing worn-out land. The TVAerected 20 dams, employing upto 40,000 workers at a time.The agency also reforested mil-lions of acres, built fertilizerfactories and power plants, andstrung thousands of miles ofwire to bring electricity to ruralfamilies for the first time.

RecreationMillions of people eachyear fish, swim, ski, white-water raft, or go boating onthe reservoirs. Sometimesthe reservoir system isreferred to as the “GreatLakes of the South.”

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Norris DamCherokeeDam

DouglasDam

Watts BarDam

ChickamaugaDam

GuntersvilleDam

ALABAMA

GEORGIA

TENNESSEE

ILLINOIS

KENTUCKY

MISSISSIPPI

ARKANSAS

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Asheville

Bristol

Oak Ridge

Knoxville

Nashville

BowlingGreenCairo

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Memphis

Corinth HuntsvilleChattanooga

The TVA, 1940

Area supplied withpower from the TVADamSteam power plant

for bank deposits up to a certain amount. By protect-ing depositors in this way, the FDIC greatly increasedpublic confidence in the banking system.

Explaining How did the govern-ment restore confidence in the banking system?

Managing Farms and IndustryMany of Roosevelt’s advisers believed that both

farmers and businesses were suffering because priceswere too low and production too high. Several advis-ers believed competition was inefficient and bad forthe economy. They wanted business and governmentto work together and favored the creation of federalagencies to manage the economy.

The Agricultural Adjustment AdministrationThe nation’s farmers had been hit hard by theDepression. One week after calling Congress intospecial session, Roosevelt announced plans for a newfarm program. Working closely with the leaders ofthe nation’s farm organizations, Secretary ofAgriculture Henry Wallace raced to complete a newfarm bill before planting season began.

The Agricultural Adjustment Act that Rooseveltasked Congress to pass was based on a simple idea—that prices for farm goods were low because farmersgrew too much food. Under Roosevelt’s program, thegovernment would pay farmers not to raise certainlivestock, such as hogs, and not to grow certain crops,such as cotton, corn, wheat, and tobacco. The farmprogram was administered by the AgriculturalAdjustment Administration (AAA).

By the time the AAA was organized, however,farmers had already planted their crops for the yearand begun raising the season’s livestock. To preventcotton—which was already at a very low price—fromreaching the market, the AAA paid cotton farmersabout $100 million to plow under about 25 percent oftheir crop. Similarly, hog producers slaughtered 6 million piglets instead of fattening them for market.

Over the next two years, farmers withdrew mil-lions of acres from production and received morethan $1 billion in support payments. The programaccomplished its goal: The farm surplus fell greatlyby 1936. Food prices then rose, as did total farmincome, which quickly increased by more than 50percent.

In a nation caught in a Depression, however, raisingfood prices drew harsh criticism. Furthermore, not allfarmers benefited. Large commercial farmers, whoconcentrated on one crop, profited more than smallerfarmers who raised several products. Worse, thou-sands of poor tenant farmers—many of them AfricanAmericans—became homeless and jobless when land-lords chose their fields to be taken out of production.

A Blueprint for Industrial Recovery The govern-ment turned its attention from farming to manufac-turing in June 1933, when Roosevelt and Congressenacted the National Industrial Recovery Act(NIRA). The NIRA suspended the antitrust laws andallowed business, labor, and government to cooper-ate in setting up voluntary rules for each industry.

These rules were known as codes of fair competi-tion. Some codes set prices, established minimumwages, and limited factories to two shifts per day soproduction could be spread to as many firms as pos-sible. Other codes shortened workers’ hours with thegoal of creating additional jobs. Another provision inthe law guaranteed workers the right to form unions.

Under the leadership of Hugh Johnson, theNational Recovery Administration (NRA) ran theentire program. Business owners who signed codeagreements received signs displaying the NRA’ssymbol—a blue eagle—and the slogan, “We do ourpart.” Since the NRA had limited power to enforce the

Reading Check


Flood ControlIn spring 1984, torrentialrains would have broughtthe Tennessee River crest toalmost 20 feet (6 m) aboveflood level. However, bystoring water in reservoirsbehind dams such asDawson Dam and releasingit slowly, the TVA preventedmost potential flooding.

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The TVA’s power facilities include 29 hydroelectric dams,11 fossil-fuel plants, 3 nuclear power plants, 4 combustion-turbine plants, a pumped-storage facility, and 17,000 milesof transmission lines. These facilities provide power tonearly 8 million people in the seven-state region.

codes, it used public opinion to pressure companiesinto going along. It urged consumers to buy goodsonly from companies that displayed the blue eagle.

The NRA did produce a revival of a few industries,but the gains proved short-lived. Small companiescomplained, justifiably, that large corporations wrotethe codes to favor themselves. More efficient compa-nies disliked price fixing, which limited competitionand made it hard for them to increase their marketshare by cutting prices. Employers disliked codes thatgave workers the right to form unions and bargaincollectively over wages and hours. They also arguedthat paying high minimum wages forced them tocharge higher prices to cover their costs.

The codes were also very difficult to administer,and business leaders often ignored them. It becameobvious that the NRA was failing when industrial pro-duction actually fell after the organization was estab-lished. By the time the Supreme Court declared theNRA to be unconstitutional in 1935, it had already lostmuch of its political support.

Examining What were the provi-sions of the Agricultural Adjustment Act and the NationalIndustrial Recovery Act?

Providing Debt ReliefWhile some of Roosevelt’s advisers believed low

prices had caused the Depression, others believedthat debt was the main obstacle to economic recov-ery. With incomes falling, people had to use most oftheir money to pay their debts and had little left overto buy goods or pay for services. Many Americans,terrified of losing their homes and farms, deliberatelycut back on their spending to make sure they couldpay their mortgages. President Roosevelt respondedto the crisis by introducing several policies intendedto assist Americans with their debts.

The Home Owners’ Loan Corporation To helphomeowners pay their mortgages, Roosevelt askedCongress to establish the Home Owners’ LoanCorporation (HOLC). The HOLC bought the mort-gages of many homeowners who were behind intheir payments. It then restructured them with longerterms of repayment and lower interest rates. Roughly10 percent of the nation’s homeowners receivedHOLC loans.

The HOLC did not help everyone. It only madeloans to homeowners who were still employed.When people lost their jobs and could no longer paytheir mortgages, the HOLC foreclosed on theirproperty, just as a bank would have done. By 1938

the HOLC had foreclosed on more than 100,000mortgages. Despite these failures, the HOLC helpedrefinance one out of every five mortgages on privatehomes in the United States.

The Farm Credit Administration Three days afterCongress authorized the creation of the HOLC, itauthorized the Farm Credit Administration (FCA) tobegin helping farmers refinance their mortgages.Over the next seven months, the FCA lent four timesas much money to farmers as the entire banking sys-tem had done the year before. It was also able to pushinterest rates substantially lower. “I would be with-out a roof over my head if it hadn’t been for the gov-ernment loan,” wrote one of the millions of farmerswho were saved by FCA loans.

Although FCA loans helped many farmers in theshort term, their long-term value can be questioned.FCA loans helped less efficient farmers keep their land,but giving loans to poor farmers meant that the moneywas not available to loan to more efficient businesses inthe economy. Although FCA loans may have slowedthe overall economic recovery, they did help many des-perate and impoverished people hold onto their land.

Identifying What New Deal programs helped farmers and homeowners?

Spending and Relief ProgramsWhile many of Roosevelt’s advisers emphasized tin-

kering with prices and providing debt relief in order tocure the Depression, others maintained that the funda-mental cause of the Depression was low consumption.People were simply not buying enough products tokeep the economy going. The fastest way out of theDepression, these advisers asserted, was to get moneydirectly into the hands of needy individuals.

Neither President Roosevelt nor his adviserswanted simply to give money to the unemployed.They argued that recipientswere more likely to main-tain work skills and self-respect if they earned their

Reading Check

Reading Check

The NRA Eagle As a symbolof the National RecoveryAdministration, this eagleinformed consumers aboutindustries that were meeting thestandards of the NationalIndustrial Recovery Act. Howsuccessful was the NRA?

History


money. As a result, Roosevelt urged Congress toestablish a series of government agencies that wouldorganize work programs for the unemployed.

The CCC The most highly praised New Deal workrelief program was the Civilian Conservation Corps(CCC), which combined Roosevelt’s love of natureand commitment to conservation with the need tohelp the unemployed. Beginning in March 1933, theCCC offered unemployed young men 18 to 25 yearsold the opportunity to work under the direction ofthe national forestry service planting trees, fightingforest fires, and building reservoirs.

The young men lived in camps near their workareas and earned $30 a month. By midsummer theCCC had created some 1,500 camps. The averageCCC worker returned home after six months to ayear of service better nourished than before and withgreater self-respect. “I weighed about 160 poundswhen I went there, and when I left, I was 190,” saidone. “It made a man of me, all right.” By the time itclosed down in 1942, the CCC had put 3 millionyoung men to work outdoors.

Public Works and Emergency Relief A few weeksafter authorizing the CCC, Congress established theFederal Emergency Relief Administration (FERA).FERA did not initially create projects for the unem-ployed. Instead, it channeled money—a half-billiondollars in all—to state and local agencies to fund

their relief projects. The leader of FERA was HarryHopkins, whose nervous energy and sarcastic man-ner put off many people. Despite his personality,Hopkins became one of the most influential people inRoosevelt’s administration.

Half an hour after meeting with Roosevelt todiscuss his new job, Hopkins set up a desk in thehallway of his new office. In the next two hours, hespent $5 million on relief projects. When criticscharged that some of the projects did not make sensein the long run, Hopkins replied, “People don’t eat inthe long run—they eat every day.”

In June 1933, Congress authorized the creation ofanother federal relief agency—the Public WorksAdministration (PWA). Roosevelt knew that nearlyone-third of the nation’s unemployed were in theconstruction industry. To put them back to work, thePWA began a series of construction projects to buildand improve highways, dams, sewer systems, water-works, schools, and other government facilities.

In most cases, the PWA did not hire workersdirectly, but instead awarded contracts to constructioncompanies. By insisting that contractors hire AfricanAmericans, the agency broke down some of the long-standing racial barriers in the construction trades.

Agency

Civilian Conservation Corps (CCC)

Tennessee Valley Authority (TVA)

Agricultural Adjustment Act (AAA)

Federal(FERA)

Emergency Relief Agency

National(NRA)

Recovery Administration

Federal(FDIC)

Deposit Insurance Corporation

Public Works Administration (PWA)

Civil Works Administration (CWA)

Securities and Exchange Commission (SEC)

Established

March 1933

May 1933

May 1933

May 1933

June 1933

June 1933

June 1933

November 1933 (cancelled 1934)

June 1934

Function

Employed single men, ages 18–25, for natural resource conservation

Built hydroelectric plants and dams aimed at improvingseven Southern states and attracting industry to the South

Reduced agricultural surplus and raised prices for struggling farmers

Granted federal money to state and local governments tobe used to help the unemployed

Controlled industrial production and prices with industry-created codes of fair competition

Guaranteed bank deposits up to $2,500

Provided employment in construction of airports, parks,schools, and roads

Regulated the stock market to avoid dishonest practices

The First New Deal, 1933–1935


1. Interpreting Charts Which of the programs listedwas cancelled the year after it was established?

2. Examining What steps did the AAA take toensure its listed function?

The CWA By the fall of 1933, neither FERA nor thePWA had reduced unemployment significantly.Hopkins realized that unless the federal governmentacted quickly, a huge number of unemployed wouldbe in severe distress once winter began. AfterHopkins explained the situation, President Rooseveltauthorized him to set up the Civil WorksAdministration (CWA).

Unlike the PWA, the CWA hired workers directlyand put them on the federal government’s payroll.That winter the CWA employed 4 million people,300,000 of them women. Under Hopkins’s direc-tion, the agency built or improved 1,000 airports,

500,000 miles of roads, 40,000 school buildings, and3,500 playgrounds, parks, and playing fields.

The cost of the CWA was huge—the programspent nearly $1 billion in just five months. A formercolleague remembered Hopkins as “the kind of guythat seldom wrote a letter. He’d just call and say,‘Send a million dollars to Arkansas, and five millionto New York. People are in need.’”

Although the CWA helped many people getthrough the winter, President Roosevelt was alarmedat how quickly the agency was spending money. Hedid not want Americans to get used to the federalgovernment providing them with jobs. Warning thatthe CWA would “become a habit with the country,”Roosevelt insisted that it be shut down. “We must nottake the position,” the president explained, “that weare going to have a permanent depression in thiscountry.” By early April 1934, Hopkins had shutdown the CWA and fired the 4 million workers theagency had hired.

By the end of his first year in office, PresidentRoosevelt had convinced Congress to pass an aston-ishing array of programs and policies. The programspassed during the first New Deal did not restoreprosperity, but they all reflected Roosevelt’s zeal foraction, his willingness to experiment, and his open-ness to new ideas. Perhaps the most important resultof the first New Deal was a noticeable change in thespirit of the American people. Roosevelt’s actionshad inspired hope and optimism, and Americans’faith in their nation had been restored.

Identifying What three New Dealprograms provided work relief to the unemployed?

Reading Check


Checking for Understanding1. Define: fireside chats.2. Identify: Hundred Days, Securities and

Exchange Commission, Federal DepositInsurance Corporation, AgriculturalAdjustment Administration, CivilianConservation Corps.

3. Summarize the different viewpoints ofRoosevelt’s advisers.

Reviewing Themes4. Groups and Institutions How did the

Glass-Steagall Act and the FederalDeposit Insurance Corporation helpmake the banking industry safer?

Critical Thinking5. Interpreting Did the CCC, CWA, and

PWA achieve their goals? Explain youranswer.

6. Organizing Use a graphic organizerlike the one below to list the majoragencies of the First New Deal.

Analyzing Visuals7. Analyzing Charts Examine the chart

on page 687. How did the various agen-cies listed change the historical role ofthe federal government?

Roosevelt’sNew

Agencies

8. Expository Writing Research theAgricultural Adjustment Act by reread-ing the text on page 685. Use libraryresources and the Internet to completeyour research. Then write an articleexplaining the benefits and drawbacksof this piece of legislation.


The Civilian Conservation Corps FDR satisfied both the nation’s need foremployment and his love of nature with the CCC. Workers planted forests, builtreservoirs, and received a monthly salary. In what year did the CCC halt operations?

History

April 1935Works ProgressAdministration founded

✦ June 1935 ✦ October 1935

Challenges to the New DealPresident Roosevelt appreciated Harry Hopkins’s feistiness. He needed effective

speakers who were willing to contend with his adversaries. Although Roosevelt hadbeen tremendously popular during his first two years in office, opposition to his poli-cies had begun to grow.

The New Deal had been in effect for two years, yet the economy had shown only aslight improvement. Although more than 2 million new jobs had been created, morethan 10 million workers remained unemployed, and the nation’s total income remainedabout half of what it had been in 1929. As one of Harry Hopkins’s aides reported on a

The Second New Deal

Main IdeaIn 1935 Roosevelt introduced new pro-grams to help unions, the elderly, and theunemployed.

Key Terms and Namesdeficit spending, American LibertyLeague, Works Progress Administration,National Labor Relations Board, bindingarbitration, sit-down strike, Social Security Act

Reading StrategyOrganizing As you read about PresidentRoosevelt’s Second New Deal, complete agraphic organizer similar to the onebelow by filling in his main legislative successes during this period.

Reading Objectives• Describe the political challenges

Roosevelt faced in the mid-1930s.• Explain why the Social Security Act is

still regarded as an important piece oflegislation.

Section ThemeGovernment and Democracy TheSecond New Deal was a politicalresponse to growing criticism from boththe left and the right.

May 1935Supreme Courtstrikes down NIRA

July 1935National Labor RelationsAct becomes law

August 1935Social Security Actadopted


Legislation Provisions

November 1935John L. Lewis forms Committeefor Industrial Organization

✦ April 1935 ✦ August 1935

Harry Hopkins, head of the Federal Emergency Relief Administration, worked long hoursin his Washington office, a bare, dingy room with exposed water pipes. He preferred thisspace to the grandeur of the more conventional offices of high-ranking officials. Here he oftendefended the New Deal’s work relief programs when reporters dropped by, and he lashedout at New Deal critics with headline-making phrases. “Some people just can’t stand to seeothers make a decent living,” he said, or, “Hunger is not debatable.”

Sometimes Hopkins went on the road to talk about his job. Once, on a trip to his homestate of Iowa, Hopkins was extolling New Deal policies to a sympathetic audience when avoice from the crowd shouted, “Who’s going to pay for it?” Without a word Hopkins peeledoff his jacket, loosened his tie, and rolled up his sleeves. Then his voice ripped through theutter stillness, “You are!”

—adapted from The Politics of Upheaval

Harry Hopkins

visit to Houston, Texas, “Nobody seems to think anymore that the thing [the New Deal] is going to work.”

Criticism From Left and Right Hostility towardRoosevelt came from both the right wing and the leftwing of the political spectrum. People on the rightgenerally believed the New Deal had imposed toomany regulations on business. The right wing alsoincluded many Southern Democrats who believedthe New Deal had expanded the federal govern-ment’s power at the expense of states’ rights.

The right wing had opposed the New Deal fromthe beginning, but by late 1934, the opposition beganto increase. To pay for his programs, Roosevelt hadbegun deficit spending. He had abandoned a bal-anced budget and begun borrowing money to payfor his programs. Many business leaders becamegreatly alarmed at the government’s growing deficit.

In August 1934, businessleaders and anti–New Dealpoliticians from both partiesjoined together to create theAmerican Liberty League.Its purpose was to organizeopposition to the New Dealand “teach the necessity ofrespect for the rights of per-son and property.”

While criticisms from theright threatened to split theDemocratic Party and reducebusiness support for

Roosevelt, another serious chal-lenge to the New Deal came fromthe left. People on the left believedRoosevelt had not gone far enough.They wanted the government tointervene even more dramatically inthe economy to shift wealth from therich to middle-income and poorAmericans.

Huey Long Perhaps the most seriousthreat from the left came fromDemocratic senator Huey Long ofLouisiana. Long captivated audienceswith folksy humor and fiery oratory. Asgovernor of Louisiana, Long had cham-pioned the downtrodden. He had

improved schools, colleges, and hospitals, and hadbuilt roads and bridges. These benefits made Longvery popular and enabled him to build a powerfuland corrupt political machine.

Long’s attacks on the rich gave him a national fol-lowing, too. His supporters organized some 27,000“Share Our Wealth” clubs across the country.Pollsters estimated that if he ran against Roosevelt asa third-party candidate in 1936, Long would take 10percent of Roosevelt’s vote—enough, they believed,to ensure a Republican victory.

Father Coughlin Huey Long’s challenge to Roo-sevelt became even more credible when his sup-porters were combined with those of FatherCharles Coughlin, a Catholic priest in Detroit.Coughlin had a popular radio show that attracted aweekly audience of about 30 to 45 millionAmericans.

Originally a New Deal supporter, Coughlin hadbecome impatient with its moderate reforms. Hecalled instead for heavy taxes on the wealthy andnationalization of the banking system. In the springof 1935, Coughlin organized the National Union forSocial Justice, which some Democrats feared was thefirst step to creating a new political party.

The Townsend Plan A third left-wing challenge toRoosevelt came from Dr. Francis Townsend, a formerpublic health official. Townsend proposed that thefederal government pay citizens over age 60 a pen-sion of $200 a month. Recipients would have to retireand spend their entire pension check each month. Hebelieved the plan would increase spending andremove people from the labor force, freeing up jobsfor the unemployed.


Critics From the Left Huey Long and Father Charles Coughlin claimed theNew Deal did not do enough to help the poor.

Student WebActivity Visit theAmerican Vision Website at tav.glencoe.comand click on StudentWeb Activities—Chapter 23 for anactivity on the NewDeal.

HISTORY


Townsend’s proposal attracted millions of support-ers, especially among the elderly, who mobilized as apolitical force for the first time in American history.Townsend’s program was particularly popular in theWest. When combined with Long’s support in theMidwest and South and Coughlin’s support amongurban Catholics in the Northeast, there was a real pos-sibility of a coalition that would draw enough votesaway from Roosevelt to prevent his re-election in 1936.

Examining What groups of peoplechallenged Roosevelt and the New Deal? What concerns didthey have?

Launching the Second New DealAlthough he remained tremendously popular

with the American people, Roosevelt realized that hispolitical support could be undermined by the attacksfrom left and right. He was also disturbed by the fail-ure of the New Deal to generate a rapid economicrecovery. In 1935 he launched what came to be calledthe Second New Deal—another series of programsand reforms that he hoped would speed up the

nation’s recovery, provide economic security to everyAmerican, and ensure his re-election in 1936.

The WPA In January 1935, Roosevelt began by askingCongress for nearly $5 billion “for work relief and toincrease employment by providing useful projects.”Much of the money would be given to the WorksProgress Administration (WPA), a new federal agencyheaded by Harry Hopkins. “The big boss is ready to goplaces in a big way,” Hopkins told a colleague.

Over the next several years, the WPA spent $11billion. Its 8.5 million workers constructed about650,000 miles of highways, roads, and streets,125,000 public buildings, and more than 8,000 parks.It built or improved more than 124,000 bridges and853 airports.

The WPA’s most controversial program was“Federal Number One,” a section of the ProfessionalProjects Division that offered work to artists, musi-cians, theater people, and writers. “They’ve got to eatjust like other people,” Hopkins commented to criticsof the program. The artists created thousands ofmurals and sculptural works to beautify the wallsand halls of public buildings. Musicians established

Reading Check

BRIEF RESPITE FOR FDREnjoying a short break fromthe pressures of dealing withthe country’s economic woes,President Franklin D. Rooseveltholds his beloved dog Falawhile chatting with the grand-daughter of the family garden-er at his Hyde Park, New York,estate.The president and hisstaff, with the help of the press,took great pains to conceal hispolio-induced paralysis. He wasnever filmed or photographedbeing wheeled or carried fromplace to place.This rare snap-shot is one of the few known toexist that shows Rooseveltseated in his wheelchair.

MOMENTinHISTORY

30 city symphony orchestras, as well as hundreds ofsmaller musical groups. The Federal Theater Projectfinanced playwrights, actors, and directors. The pro-gram also funded historians who interviewed formerslaves to document American history.

The Supreme Court’s Role When Roosevelt askedCongress to fund the WPA in January 1935, he hadexpected quick action on the bill. He quickly discov-ered that opposition to his programs was growing inCongress. The bill creating the WPA did not passuntil April 1935. By late May, Congress was prepar-ing to adjourn for the summer, leaving Rooseveltwith very few accomplishments.

Suddenly, the political situation shifted. On May27, 1935, the Supreme Court unanimously struckdown the National Industrial Recovery Act inSchechter v. United States. The Schechter brothers,who had a poultry business in Brooklyn, New York,had been convicted in 1933 of violating the NIRA’s Live Poultry Code. They had sold diseased chickensand violated the code’s wage-and-hour provisions.; (See page 1082 for more about Schechter v. United States.)

In what became known as the “sick chicken case,”the Court ruled that the Constitution did not allowCongress to delegate its powers to the executivebranch. Thus it considered the NIRA codes unconsti-tutional. The decision worried Roosevelt. The rulingsuggested that the Court could soon strike down therest of the New Deal as well.

Shortly after the Schechterdecision, Roosevelt sprang intoaction. With the Court threat-ening to strike down the NewDeal and with growing chal-lenges from the left and right,the president knew he neededa new series of programs tokeep voters’ support. He calledcongressional leaders to aWhite House conference.Pounding his desk, he thun-dered that Congress could notgo home until it passed his newbills. That summer, Congressbegan what the press nick-named the “second hundreddays” and worked feverishly topass Roosevelt’s programs.

Examining How did the SupremeCourt’s ruling affect the New Deal?

The Rise of Industrial UnionsWhen the Supreme Court ruled against the NIRA, it

also struck down the section of the law that establishedlabor’s right to organize. President Roosevelt and theDemocrats in Congress knew that the working-classvote was very important in winning re-election in 1936.They also believed that unions could help end theDepression. They thought that high union wageswould let workers spend more money, thereby boost-ing the economy. Opponents disagreed, arguing thathigh wages forced companies to charge higher pricesand to hire fewer people. Despite these concerns,Congress pushed ahead with new labor legislation.

The National Labor Relations Act In July 1935,Congress passed the National Labor Relations Act,also called the Wagner Act after its author, Democraticsenator Robert Wagner of New York. The act guaran-teed workers the right to organize unions withoutinterference from employers and to bargain collec-tively. The law set up the National Labor RelationsBoard (NLRB), which organized factory elections bysecret ballot to determine whether workers wanted aunion. The NLRB then certified the successful unions.

The new law also set up a process whereby dis-satisfied union members could take their com-plaints to binding arbitration, in which a neutralparty would listen to both sides and decide theissues. The NLRB was authorized to investigate the

Reading Check


Function

Combated unemployment; created jobs throughout economy

Brought electricity to isolated agricultural areas

Created unemployment system, disability insurance, old-age pension, and child wel-fare benefits

Eliminated unfair practices and abuses of utility companies

Strengthened the Federal Reserve

Assisted poor families and sharecroppers in beginning new farms or purchasing land

Agency/Legislation

Works Progress Administration (WPA)

Rural Electrification Administration (REA)

Social Security Act

Public Utility Holding Company Act

Banking Act

Resettlement Act

The Second New Deal, 1935

1. Interpreting Charts What did the Resettlement Acttry to accomplish?

2. Understanding Cause and Effect How did these actscreate a safety net for American citizens?

actions of employers and had the power to issue“cease and desist” orders against unfair practices.

The CIO The Wagner Act stimulated a burst of laboractivity. In the mid-1930s, the United Mine Workersunion, led by John L. Lewis, began working with sev-eral other unions to organize workers in industrieswhere unions did not yet exist. To coordinate theirefforts, they formed the Committee for IndustrialOrganization (CIO) in 1935.

The CIO set out to organize industrial unions, orunions that included all workers in a particularindustry, skilled and unskilled. The CIO began byfocusing on the automobile and steel industries—two of the largest industries in America where work-ers were not yet organized into unions.

Sit-Down Strikes In late December 1936, officialsat the General Motors auto-body plant in Cleveland,Ohio, demoted two union men. In an unplannedprotest, a shift of 135 workers sat down andlaunched an unprecedented kind of strike. Theystopped working but refused to leave the factory. Afew days later, the workers at the company’s plant inFlint, Michigan, launched their own sit-down strike,

as the press quickly dubbed it. Workers at otherplants followed suit or carried out traditional strikes.

Bruce Bliven, editor of The New Republic magazine,was among the few journalists allowed into the plant.Regarding the condition of the strike, he reported:

“The place was remarkably neat and tidy, at leastas clean as it is under normal conditions. Beds weremade up on the floor of each car, the seats beingremoved if necessary. . . . I could not see—and Ilooked for it carefully—the slightest damage doneanywhere to the General Motors Corporation. Thenearly completed car bodies, for example, were asclean as they would be in the salesroom, their glassand metal shining.”

—quoted in The Great Depression

Violence broke out in Flint when police launched atear gas assault on one of the smaller plants. The strik-ers turned back the attack with whatever was athand—door hinges, bottles, stones, and balls of ice.The police wounded 13 strikers and two bystanderswith gunfire, but the strike held. On February 11,1937, the company gave in and recognized the CIO’s

Trying to Improve Working Conditions

Autoworkers stage a sit-down strikein 1937 in Flint, Michigan.

Source: Historical Statistics of the United States: Colonial Times to 1970.

Mem

bers

(in

mill

ions

)

1933

1934

1935

1936

1937

1938

1939

1940

1941

1942

1943

14

12

10

8

6

4

2

0

Year

Union Membership, 1933–1943

1. Interpreting Graphs Approximately how manypeople were union members in 1936?

2. Understanding Cause and Effect Why did unionmembership increase steadily after 1936?

United Auto Workers (UAW) as its employees’ solebargaining agent. The UAW quickly became one ofthe most powerful unions in the United States.

The United States Steel Corporation, the nation’slargest steel producer, decided it did not want torepeat the General Motors experience. The companyrecognized the CIO’s United Steelworkers ofAmerica, which won a 40-hour workweek and a 10-percent pay raise. Smaller steel producers did notinitially recognize unions, and strikes broke outaround the country. By 1941, however, the steelwork-ers’ union had contracts with the entire industry.

In the late 1930s, workers in other industries alsosat down at their jobs to gain union recognition. Inonly six years, total union membership tripled fromroughly 3 million in 1933 to about 9 million in 1939.In 1938 the CIO changed its name to the Congress ofIndustrial Organizations and became a federation ofindustrial unions.

Examining What provisions did theNational Labor Relations Act establish?

The Social Security Act After passing the Wagner Act, Congress began

work on a bill that ranks as one of the most importantpieces of legislation in American history. This was theSocial Security Act, which became law in August1935. Its major goal was to provide some security forthe elderly and for unemployed workers.

With the support of Secretary of Labor FrancesPerkins, Roosevelt and his team spent monthspreparing the bill. The framers viewed it primarily as

an insurance bill. Workers earned the right to receivebenefits because they paid premiums. The legislationalso provided modest welfare payments to otherneedy people, including those with disabilities andpoor families with young dependent children.

The core of Social Security was the monthly retire-ment benefit, which people could collect when theystopped working at age 65. Another important bene-fit, unemployment insurance, supplied a temporaryincome to unemployed workers looking for new jobs.Some critics did not like the fact that the money camefrom payroll taxes imposed on workers and employ-ers, but to Roosevelt these taxes were crucial: “Weput those payroll contributions there so as to give thecontributors a legal, moral, and political right to col-lect their pensions and the unemployment benefits.”

Since the people receiving benefits had alreadypaid for them, he explained, “no politician can everscrap my social security program.” What Rooseveltdid not anticipate was that in the future, Congresswould borrow money from the Social Security fundto pay for other programs while failing to raise pay-roll deductions enough to pay for the benefits.

Social Security helped many people, but initially itleft out many of the neediest members of society—farm and domestic workers. Some 65 percent of allAfrican American workers in the 1930s fell into thesetwo categories. Nevertheless, Social Security estab-lished the principle that the federal governmentshould be responsible for those who, through nofault of their own, were unable to work.

Explaining How did the SocialSecurity Act protect workers?

Reading Check

Reading Check


Checking for Understanding1. Define: deficit spending, binding

arbitration, sit-down strike, SocialSecurity Act.

2. Identify: American Liberty League,Works Progress Administration,National Labor Relations Board.

3. Contrast the ideas of Father CharlesCoughlin, Senator Huey Long, and Dr. Francis Townsend.

Reviewing Themes4. Government and Democracy How did

the New Deal contribute to the growthof industrial unions?

Critical Thinking5. Analyzing Why is the Social Security

Act an important piece of legislation?6. Organizing Use a graphic organizer

similar to the one below to list the polit-ical challenges Roosevelt faced in hisfirst term.

Analyzing Visuals7. Analyzing Graphs Examine the photo

and graph on page 693. How did suc-cessful strikes such as the sit-downstrike shown in the photograph lead toa rise in union membership?

Political Challenges 8. Descriptive Writing Imagine you areeither a General Motors worker or amember of management during the sit-down strike in Flint, Michigan. Writea letter to your local newspaperdescribing the strike and explainingyour actions during it.


1936FDR reelected

Roosevelt’s Second TermThe dramatic shift in party allegiance by African Americans was part of a historic

political realignment triggered by FDR’s New Deal. As the election of 1936 approached,millions of voters owed their jobs, mortgages, or salvaged bank accounts to the NewDeal, and they knew it.

One day in 1932, Emma Guffey Miller, the sister of Democratic senator Joseph Guffey, washaving her nails done at a salon in Pittsburgh. Her manicurist mentioned that Robert Vann,publisher of the Pittsburgh Courier, a leading African American newspaper, wanted to see thesenator. When Senator Guffey met Vann, Vann told him that the Democrats could win mostof the 280,000 African American votes in Pennsylvania if they made the effort.

Since the Civil War, most African Americans had voted for the Republicans. Now times hadchanged. The Depression had hit the African American community very hard, andRepublicans had done little to help. In talks to African American voters, Vann often said, “Myfriends, go home and turn Lincoln’s picture to the wall. That debt has been paid in full.”

Guffey was impressed. He persuaded party leaders to appoint Vann to lead “the first reallyeffective Negro division a Democratic campaign committee ever had.” By 1936 the majorityof African American voters had switched their support to the Democratic Party.

—adapted from The Politics of Upheaval

The New DealCoalition

Main IdeaBacked by a new coalition of voters,Roosevelt easily won a second term, butthe opposition of conservatives weakenedhis ability to achieve additional reforms.

Key Terms and NamesFrances Perkins, court-packing, HenryMorgenthau, John Maynard Keynes, broker state, safety net

Reading StrategyTaking Notes As you read about theNew Deal coalition, use the major head-ings of the section to create an outlinesimilar to the one below.

Reading Objectives• Explain the achievements and the

defeats of Roosevelt’s second term.• Analyze how the New Deal affected

Americans’ sense of security and theirattitude toward the role of government.

Section ThemeGroups and Institutions The DemocraticParty’s victory in 1936 resulted from anew alignment in politics that lasted forseveral decades.

1937Court-packing bill defeated; FarmTenant Act; National Housing Act

1937RooseveltRecession begins

1938Fair Labor StandardsAct passed


The New Deal CoalitionI. Roosevelt’s Second Term

A.B.C.

II.A.B.

✦ 1938✦ 1936 ✦ 1937

Robert Vann

The white South, which had been the core of theDemocratic Party, now became just one part of a newcoalition that included farmers, laborers, AfricanAmericans, new immigrants, ethnic minorities,women, progressives, and intellectuals. First LadyEleanor Roosevelt helped bring about the change inthe African American and women’s vote. She haddemonstrated strong sympathies toward thesegroups, with whom she spoke in her many tours ofthe country. She recounted her experiences to herhusband and persuaded him to address at least someof their problems in his New Deal programs.

African Americans and women made some mod-est gains during the New Deal. For example, thepresident appointed a number of African Americansto positions in his administration; informally, theybecame known as the Black Cabinet. Roosevelt alsotried to see that New Deal relief programs did notexclude African Americans.

A similar approach guided New Deal policiestoward women. Roosevelt appointed the first womanto a cabinet post, Secretary of Labor Frances Perkins,and assigned many women to lower-level jobs in the

federal bureaucracy. Even so, the general view wasthat women did not need federal government actionto ensure equal treatment, but rather to provide cer-tain protections for them.

The Election of 1936 To oppose Roosevelt, theRepublicans nominated Kansas Governor AlfredLandon. Although Landon favored some New Dealpolicies, he declared it was time “to unshackle initia-tive and free the spirit of American enterprise.” Asthe election neared, Landon became more aggressive.The New Deal “violates the basic ideals of theAmerican system,” he declared. “If we are to pre-serve our American form of government, this admin-istration must be defeated.”

Despite Landon’s attacks, Roosevelt and the NewDeal remained overwhelmingly popular with theAmerican people. The challenge from left-wing rad-icals also proved much weaker than expected—pri-marily because Huey Long had been assassinated inLouisiana in September of 1935. Long’s supportersjoined with those of Father Coughlin and FrancisTownsend in the summer of 1936 to form a new


i n H i s t o r y

Frances Perkins1882–1965

From the moment she became FDR’ssecretary of labor at the age of 50,Frances Perkins confronted the chal-lenge of being the first female cabinetmember in the nation’s history.

Perkins studied social work atColumbia University. Early in her career, she assisted Jane Addams at Hull House and worked withFlorence Kelley of the Consumers’ League. From her lobbyingefforts there, Perkins learned how to deal with politicians.

Perkins first met Roosevelt when she worked for the New YorkCommittee on Safety, lobbying state legislators to limit the work-week for women to 54 hours. When Roosevelt became governor in1928, he appointed Perkins state industrial commissioner.

After Roosevelt won the presidency in 1932, he asked Perkins tohead the Department of Labor. Upon taking the job, Perkins foundmany areas that needed improvement: offices that were run down,disorganized files, and lax work schedules, conditions she quicklyremedied.

Given her background, it was fitting that one of Perkins’s majortasks was to head the team that designed the Social Security pro-gram. She also supervised implementation of the Fair LaborStandards Act and built up the Bureau of Labor Statistics.

Mary McLeod Bethune1875–1955

Mary McLeod Bethune was borninto a poor South Carolina family, the15th of 17 children. Although sheworked from a young age picking cot-ton and washing clothes, Bethune wasdetermined to get an education. Shewon a scholarship to a seminary inNorth Carolina and later graduatedfrom the Moody Bible Institute inChicago. Bethune then began teaching at the Haines Institute. In1904 she founded a school in Florida for the children of AfricanAmerican railroad workers. “I rang doorbells,” she later recalled. “I wrote articles . . . distributed leaflets, [and] invaded churches,clubs, lodges, [and] chambers of commerce.” Gradually she raisedenough money to found the Daytona Normal and IndustrialSchool, later known as Bethune College.

Bethune’s efforts gained her a national reputation. In the 1920s,she visited the White House to discuss African American affairs.She also became a good friend of Eleanor Roosevelt. In 1936 FDRappointed her director of the Negro Division of the National YouthAdministration (NYA), which provided job training for young people. Bethune also founded the National Council of NegroWomen to support civil rights. In later years, she advisedPresidents Truman and Eisenhower.

political movement called the Union Party, butwithout a strong leader, the party had no chance.On Election Day, Roosevelt swept to victory in oneof the largest landslides in American history. Hewon more than 60 percent of the popular vote andcarried every state except Maine and Vermont.

The Court-Packing Plan Although popular opin-ion supported most of the president’s programs, theSupreme Court saw things differently. In January1936, the Court declared the Agricultural AdjustmentAct to be unconstitutional. With cases pending onSocial Security and the Wagner Act, it seemed likelythe Court would strike down nearly all of the majorNew Deal programs.

Roosevelt was furious that a handful of jurists,“nine old men” as he called them, were blocking thewishes of a majority of the people. After winning re-election, he decided to try to change the political bal-ance on the Supreme Court. Claiming that the Courtwas overburdened with work, Roosevelt sentCongress a bill to increase the number of justices: Ifany justice had served for 10 years and did not retirewithin six months after reaching the age of 70, thepresident could appoint an additional justice to theCourt. Since four justices were in their 70s and twomore were in their late 60s, the bill, if passed, wouldallow Roosevelt to quickly appoint as many as sixnew justices.

The court-packing plan, as the press called it, wasRoosevelt’s first serious political mistake as presi-dent. Although Congress had the power to changethe size of the Court, the scheme created the impres-sion that the president was trying to interfere withthe Constitution’s separation of powers and under-mine the Court’s independence.

The issue split the Democratic Party. ManySouthern Democrats feared Roosevelt’s plan wouldput justices on the Court who would overturn segre-gation. At the same time, African American leadersworried that once Roosevelt set the precedent ofchanging the Court’s makeup, a future presidentmight pack the Court with justices opposed to civilrights. Many Americans believed the plan wouldgive the president too much power.

Despite the uproar over the scheme, Roosevelt’sactions appeared to force the Supreme Court to backdown. In April 1937, the Court upheld theWagner Act, and in Mayit declared the SocialSecurity Act to be consti-tutional. Shortly after-ward, one of the more

conservative judges resigned, enabling Roosevelt toappoint a supporter of the New Deal to the Court.

In mid-July, the Senate quietly killed the court-packing bill without bringing it to a vote. AlthoughRoosevelt had achieved his goal of changing theCourt’s view of the New Deal, the fight over the planhad hurt his reputation with the American peopleand encouraged conservative Democrats in Congressto work with Republicans to oppose further NewDeal proposals.

ECONOMICS

The Roosevelt Recession In late 1937, Roosevelt’sreputation suffered another blow when unemploy-ment suddenly surged. Earlier in the year, the econ-omy had seemed to be on the verge of full recovery.Industrial output was almost back to the level it hadreached before the Depression began, and many people believed the worst was over.

Although unemployment remained high, Rooseveltdecided it was time to balance the budget. Concernedabout the dangers of too much debt, Roosevelt orderedthe WPA and the PWA to be cut significantly. Un-fortunately, Roosevelt cut spending just as the firstSocial Security payroll taxes removed $2 billion fromthe economy. Almost immediately the economy plum-meted. By the end of 1937, about two million peoplehad been thrown out of work.

The recession of 1937 led to a debate insideRoosevelt’s administration over what to do. TreasurySecretary Henry Morgenthau favored balancing the

Campaigning in 1936 During the 1936 election, FDR’s Democratic Partybrought together farmers, like this North Dakotan, and many other groups ofAmericans to form a new coalition of political supporters. This coalition helpedgive Roosevelt a strong re-election victory. What different groups made upthis coalition?

History

budget and cutting spending. This would reassurebusiness leaders and encourage them to invest in theeconomy. Harry Hopkins, head of the WPA, andHarold Ickes, head of the PWA, both disagreed withMorgenthau and pushed for more governmentspending. They pointed to a new theory called“Keynesianism” to support their arguments.

Keynesianism was based on the theories of aninfluential British economist named John MaynardKeynes. In 1936 Keynes published a book that dis-cussed the causes of recessions. He argued that thegovernment should spend heavily during a reces-sion, even if it had to run a deficit, in order to jump-start the economy.

According to Keynesian economics, Roosevelt haddone exactly the wrong thing when he cut back pro-grams in 1937. At first Roosevelt was reluctant tobegin deficit spending again. Many critics of his poli-cies had argued that the recession proved theAmerican people were becoming too dependent ongovernment spending, and Roosevelt worried theymight be right. Finally, in the spring of 1938, with norecovery in sight, he asked Congress for $3.75 billionfor the PWA, the WPA, and other programs.

Summarizing What events weak-ened Roosevelt’s reputation in 1937?

The Last New Deal ReformsIn his second inaugural speech, Roosevelt had

pointed out that despite the nation’s progress inclimbing out of the Depression, many Americans stillendured crippling poverty:

“In this nation I see tens of millions of its citi-zens—a substantial part of its whole population—who at this very moment are denied the greater partof what the very lowest standards of today call thenecessities of life. . . . I see one-third of a nation ill-housed, ill-clad, ill-nourished. . . . The test of ourprogress is not whether we add more to the abun-dance of those who have much; it is whether we pro-vide enough for those who have too little.”

—quoted in Public Papers and Addresses of Franklin D. Roosevelt

Despite the president’s idealistic goals, the fightover the court-packing scheme and the recession of1937 had weakened Roosevelt politically. Althoughhe pushed ahead with a new series of New Deal pro-grams, his successes were far more limited than theyhad been in previous years.

Reading Check


• Dance CrazeDance marathons got their start in the manic1920s, but they gained wide popularity in the1930s. Couples might dance hundreds of hours,until they were exhausted. The last couplestanding could win substantial prize money.

1930sEntertainment

During the Depression, people neededentertainment more than ever. Moviestopped the list of ways to escape everydayhardship, but music and dance were popu-lar as well. For really cheap entertain-ment, one could stay at home and playcards or board games.

• Movie EscapismMovies cost less than 25¢ in many places,so children could afford to go, too. Thesechildren display door prizes handed outduring a matinee in California.

The National Housing Act One of the president’sgoals for his second term was to provide better hous-ing for the nation’s poor. The Home Owners LoanCorporation had helped many middle-class citizens,but it had not provided housing for those who couldnot afford a mortgage. Eleanor Roosevelt, who hadtoured poverty-stricken regions of Appalachia andthe Deep South, was among those urging the presi-dent to do something.

Senator Wagner, who shared the First Lady’s con-cerns, prepared a new housing bill with Roosevelt’sfull support. The 1937 National Housing Act estab-lished the United States Housing Authority, whichreceived $500 million to subsidize loans for builderswilling to buy blocks of slums and build low-costhousing.

The Farm Security Administration Before theSupreme Court struck it down, the AgriculturalAdjustment Administration had paid many farmersto take land out of production to force food prices torise. The price-support program raised farm income,but it badly hurt tenant farmers. Landowners oftenexpelled tenants from the land in order to take it outof production. About 150,000 white and 195,000African American tenants left farming during the1930s for this reason.

To stop this trend, the Farm Security Admin-istration was created in 1937 to give loans to ten-

ants so they could purchase farms. Over the nextfour years it extended loans of about $1 billion.Members of Congress, many of whom believed theprogram made agricultural problems worse byincreasing farm production and driving down prices,kept its appropriations at a low level.

The Fair Labor Standards Act In 1938 NewDealers were still trying to reinstate important pro-labor regulations to make up for the Supreme Court’sdismantling of the NIRA in 1935. The Fair LaborStandards Act of 1938 provided more protection forworkers, abolished child labor, and established a 40-hour workweek for many workers to come into effectwithin three years.

Congress, however, was beginning to turn againstthe New Deal. The recession of 1937 enabled theRepublicans to win many seats in Congress in themidterm elections of 1938. Together with conserva-tive Southern Democrats, they began blocking fur-ther New Deal legislation. Roosevelt, meanwhile,became increasingly preoccupied with the growinginternational threat posed by Germany and Japan.By 1939 the New Deal era had come to an end.

Examining What groups didRoosevelt’s last New Deal programs try to help?

The Legacy of the New DealIn terms of its main goal of ending the Depression,

the New Deal was only a limited success. Unemploy-ment remained high, and economic recovery was notcomplete until after World War II. Even so, the NewDeal gave many Americans a stronger sense of secu-rity and stability.

The Broker State As a whole, the New Deal tendedto operate so that it balanced competing economicinterests. Business leaders, farmers, workers, con-sumers, homeowners, and others now looked to gov-ernment to protect their interests.

The federal government’s ability to take on thisnew role was enhanced by two important SupremeCourt decisions. In 1937, in NLRB v. Jones andLaughlin Steel, the Court ruled that the federal gov-ernment had the constitutional authority, under theinterstate commerce clause, to regulate productionwithin a state. In 1942, in Wickard v. Filburn, the Courtused a similar argument to allow the federal govern-ment to regulate consumption in the states. These

Reading Check


• Music and MonopolyThe legendary Jimmie Lunceford Orchestra was one ofmany big band orchestras of the 1930s. Whether touringthe country in one-night gigs or playing on the radio,they drew a huge following. Monopoly was a major1930s fad. Players of this board game moved piecesaround, buying and developing“property” in arace to amassa fortune infake money.

decisions increased federal power over the economyand allowed it to mediate between competinggroups. ; (See page 1082 and 1083 for more information onthese Supreme Court cases.)

In taking on this mediating role, the New Dealestablished what some have called the broker state,working out conflicts among different interests. Thisbroker role has continued under the administrationsof both parties ever since.

Government’s New Role Probably the biggestchange the New Deal brought about was the newpublic attitude toward government. Roosevelt’s pro-grams had succeeded in creating something of asafety net for average Americans—safeguards andrelief programs that protected them against economicdisaster. By the time the Roosevelt years were over,the American people felt that the government had aduty to maintain this safety net even though itrequired a larger, more expensive federal govern-ment than at any time in American history.

Critics continued to argue that the New Dealmade the government too powerful. Another legacyof the New Deal, therefore, is a debate that has con-tinued to the present over how much the govern-ment should intervene in the economy or supportthe disadvantaged.

Throughout the hard times of the Depression,most Americans maintained a surprising degree ofconfidence in the American system. JournalistDorothy Thompson expressed this feeling in 1940:

“We have behind us eight terrible years of acrisis. . . . Here we are, and our basic institutions are still intact, our people relatively prosperous and most important of all, our society relatively affection-ate. . . . No country is so well off.”

Summarizing What was the legacyof Roosevelt’s New Deal?

Reading Check


Checking for Understanding1. Define: broker state, safety net.2. Identify: Frances Perkins,

court-packing, Henry Morgenthau, John Maynard Keynes.

3. Explain Roosevelt’s court-packing planand how it was received.

Reviewing Themes4. Groups and Institutions What groups

made up the New Deal coalition?

Critical Thinking5. Interpreting How did the New Deal

change attitudes toward government?6. Categorizing Use a chart like the one

below to list the achievements anddefeats of Roosevelt’s second term.


photograph on page 697. What does itsuggest about Roosevelt’s method ofcampaigning?

8. Persuasive Writing Write an essayevaluating the effectiveness of NewDeal measures in ending theDepression.


Achievements Defeats

Traitor to His Class By 1936 many wealthy Americans believed that FDR had turned his back on his own upbringing, and they actively worked to preventhis re-election. How did the New Deal change the way many people viewgovernment?

Analyzing Political Cartoons

Study and Writing

Outlining

Applying the SkillOutlining Write a formal or informal outline forSection 4 of this chapter.

Glencoe’s Skillbuilder Interactive WorkbookCD-ROM, Level 2, provides instruction andpractice in key social studies skills.

701

Why Learn This Skill?To draw a scene, first you would sketch the rough

shape, or outline, of the picture. Then you would fill inthis rough shape with details. Outlining written mate-rial is a similar process. You begin with the roughshape of the material and gradually fill in the details.

Learning the Skill When studying written material, outlining helps

you identify main ideas and group together relatedfacts. In writing, it helps you put information in alogical order.

There are two kinds of outlines—formal andinformal. An informal outline is similar to takingnotes. You write only words and phrases needed toremember ideas. Under the main ideas, jot downrelated but less important details. This kind of out-line is useful for reviewing material before a test.

A formal outline has a standard format. In a formaloutline, label main heads with Roman numerals,subheads with capital letters, and details with Arabicnumerals. Each level must have at least two entriesand should be indented from the previous level. Allentries use the same grammatical form. For example,if one entry is a complete sentence, all other entries atthat level must also be complete sentences.

When outlining written material, first read thematerial to identify the main ideas. In textbooks, sec-tion heads provide clues to main topics. Next, iden-tify the subheads. List details that support or explainsubheads underneath the appropriate subhead.

Practicing the SkillStudy the outline on this page on Roosevelt’s

New Deal. Then answer the following questions.

1 Is this an example of a formal or an informal outline?

2 What are the main headings?

3 How do the subheads under “Managing Farmand Industry” relate to the main idea?

4 Give two examples of grammatical inconsis-tency in this outline:

I. The Hundred Days BeginsA. Origins of the New DealB. A Divided Administration

1. Some advisers wanted government and business cooperation.

2. Others wanted government to run theeconomy or regulate competition.

II. Fixing the Banks and Stock MarketA. The Emergency Banking Relief Act

1. All banks closed temporarily.2. The banks reopened and were monitored

by federal examiners.B. Regulating Banks and Brokers

1. The Securities Act ensured complete andtruthful investment information.

2. The Glass-Steagall Act separated commer-cial banking from investment banking.

III. Managing Farms and IndustryA. The Agricultural Adjustment Administration

1. Addressed the oversupply of farm products

2. Increased farm incomeB. A Blueprint for Industrial Recovery

1. The National Recovery Administrationestablished “fair competition” for industry.

2. Set minimum wages for employees3. The codes were difficult to administer

and gains were short-lived.

Skills AssessmentComplete the Practicing Skills questions on page

703 and the Chapter 23 Skill ReinforcementActivity to assess your mastery of this skill.

Reviewing Key Facts9. Identify: New Deal, bank holiday, Hundred Days, Securities

and Exchange Commission, Federal Deposit InsuranceCorporation, Agricultural Adjustment Administration, WorksProgress Administration, National Labor Relations Board,Frances Perkins, court-packing, John Maynard Keynes.

10. Why was President Roosevelt reluctant to use deficit spend-ing to help the American economy recover from the GreatDepression?

11. Why did the federal government create work programs dur-ing the Depression?

12. How did the Supreme Court challenge the New Deal?

13. How did the Wagner Act contribute to the growth of unions?

14. Why did President Roosevelt devise the court-packing plan?

15. What impact did New Deal legislation have on the role of thefederal government in state commerce?

Critical Thinking16. Analyzing Themes: Economic Factors What caused the

recession in 1937, and how did Keynesian economics explainthis recession?

17. Analyzing Choose one of the New Deal programs. Describeits goals and evaluate its success.

18. Forming an Opinion Which method should be used to settle differences between unions and companies—bindingarbitration or sit-down strikes? Explain your answer.

19. Interpreting Primary Sources In her autobiography,Eleanor Roosevelt wrote about discussions she had with people across the country. Read the excerpt and answer thequestions that follow.

“This trip to the mining areas was my first contactwith the work being done by the Quakers. I liked theidea of trying to put people to work to help themselves.The men were started on projects and taught to usetheir abilities to develop new skills. The women wereencouraged to revive any household arts they mightonce have known but which they had neglected in thedrab life of the mining village.

This was only the first of many trips into the miningdistricts but it was the one that started the homestead

1. gold standard

2. fireside chats

3. deficit spending

4. binding arbitration

5. sit-down strike

6. Social Security Act

7. broker state

8. safety net

Reviewing Key TermsOn a sheet of paper, use each of these terms in a sentence.

• Emergency Banking Relief Act regulated banks.• Federal Deposit Insurance Corporation insured

bank deposits.• Farm Credit Administration refinanced farm mortgages.• Home Owners’ Loan Corporation financed

homeowners’ mortgages.

Financial and Debt

• Civilian Conservation Corps created forestry jobs foryoung men.

• Federal Emergency Relief Administration funded cityand state relief programs.

• Public Works Administration created work programs tobuild public projects, such as roads, bridges, and schools.

Work and Relief

• Agricultural Adjustment Administration paid farmersto limit surplus production.

• National Industrial Recovery Act limited industrialproduction and set prices.

• National Labor Relations Act gave workers the right toorganize unions and bargain collectively.

• Tennessee Valley Authority financed rural electrificationand helped develop the economy of a seven-state region.

Agriculture and Industry

Major New Deal Programs

• Social Security Act provided:– income for elderly, handicapped, and unemployed.– monthly retirement benefit for people over 65

Social “Safety Net”


idea [placing people in planned communities withhomes, farms, and jobs]. . . . It was all experimentalwork, but it was designed to get people off relief, to putthem to work building their own homes and to givethem enough land to start growing food.”a. Why did Eleanor Roosevelt like the Quaker project?

b. Based on this excerpt, do you think that Eleanor Rooseveltsupported her husband’s New Deal programs? Explainyour answer.

20. Categorizing Use a graphic organizer like the one below tolist groups of people helped by each program.

Practicing Skills 21. Outlining Study the subheads of Section 3, “The Second

New Deal,” and Section 4, “The New Deal Coalition,” toreview the sections. Then do the following exercises.a. Make a formal outline of Section 3. Pay special attention

to forming complete sentences.

b. Make an informal outline of Section 4.

Writing Activity22. Expository Writing Under Economic Crisis and the New

Deal on the American History Primary Source DocumentLibrary CD-ROM, read Roosevelt’s First Inaugural Address.Work with another student to write a commentary on theaddress and then present it as a radio broadcast to the class.Your commentary should include opinions about Roosevelt’seconomic ideas.

Chapter Activity23. Technology Activity: Researching the Internet Use the

Internet to research two New Deal agencies: the FDIC and

the SEC. Write a short report explaining how they continue toaffect the lives of U.S. citizens and the U.S. economy today.

Economics and History24. Examine the graph above showing unemployment figures,

and then answer the questions below.a. Interpreting Graphs What was the difference in unem-

ployment between 1937 and 1938?

b. Analyzing Why did unemployment decline between1933 and 1937? Why did it increase in 1938?

New DealAgencies

Whom ItHelped

NRA

AAA

FDIC

HOLC

CCC


Self-Check QuizVisit the American Vision Web site at tav.glencoe.comand click on Self-Check Quizzes—Chapter 23 toassess your knowledge of chapter content.

HISTORY

StandardizedTest Practice

Directions: Choose the best answer to thefollowing question.

Each of the following is true of the bills passed during thefirst Hundred Days of Roosevelt’s presidency EXCEPT:

F They were intended to provide immediate relief toAmerican citizens.

G They were known as the New Deal.

H They were designed as temporary measures to restartthe economy.

J They were the subject of divisive and protracted debatein Congress.

Test-Taking Tip: Remember, this question asks for theexception. Read through each answer carefully to see if it istrue of FDR’s first Hundred Days. You are looking for theanswer that is false. For example, you probably rememberthat these bills were intended to combat the effects of theGreat Depression. Therefore, answer F is true, so it is not thecorrect answer.

Unem

ploy

ed (i

n m

illio

ns)

1936193519341933 1937 1938 1939 1940

15

12

9

6

3

0

YearSource: Historical Statistics of the United States: Colonial Times to 1970.

Unemployment, 1933–1940


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