The New Deal Franklin D. Roosevelt & The First New Deal

The New Deal A relief and recovery program instituted by FDR to confront the emergency of the depression = Numerous programs and legislation to achieve recovery

The New Deal & Banking

The Bank Holiday Temporary closure of all banks –March 6-12, 1933 Designed to stop the massive withdrawals from banks

1. Emergency Banking Act Authorized the fed. government to examine all banks Only banks that were financially sound could reopen Goal: restore public confidence in the banking system

2. FDIC Federal Deposit Insurance Corp. Created by Congress to insure bank deposits –Insured deposits up to $5000

FDIC Today Increased its amount of protection for depositors to $250,000

3. Home Owners Loan Corporation (HOLC) Created to assist homeowners who couldn’t pay their mortgage Granting low-interest, long-term loans

4. Farm Credit Administration (FCA) Provided low-interest, long-term loans to farmers Allowed farmers to keep their farms, buy them back, or purchase equipment & supplies

The New Deal & Poverty Relief

5. Federal Emergency Relief Admin. (FERA) Distributed money for relief to state & local governments Over ½ of money was distributed to families in need Other ½ went to work-relief projects (raking leaves, litter)

6. Civilian Conservation Corps (CCC) Provided jobs for unemployed young men 18 – 25 Planted trees, cleared brush, created park trails, and developed campgrounds in national parks

The New Deal & Economic Recovery

7. Securities & Exchange Commission (SEC) Created to protect investors from stock fraud Regulated companies that sold stocks & bonds Goal: restore faith in the stock market

SEC Today Continues to regulate companies selling stocks & bonds

8. National Industrial Recovery Act (NIRA) Stimulate industrial & business activity and to reduce unemployment Goal: stabilize prices, raise wages, limit hours, and create jobs

9. Public Works Administration (PWA) NIRA agency created to make jobs Built roads, public buildings, and other public projects

10. National Recovery Administration (NRA) stabilize prices, raise wages, & reduce work hours Encouraged companies to create codes of fair competition Eventually ruled unconstitutional

The New Deal & Farmers

11. Agricultural Adjustment Admin. (AAA) Paid farmers to reduce the output of crops Output reduction led to higher prices Farmer’s income increased Critics argued it came at the expense of consumers

12. Tennessee Valley Authority Largest of New Deal Programs Aided a rural seven-state region that was economically distressed Built new dams, flood control stations, and recreational facilities

The New Deal Franklin D. Roosevelt & The Second New Deal

1934 Congressional Elections: –Democrats gain more seats With support Roosevelt initiates more New Deal programs

1. The Works Progress Administration (WPA) Designed to help Americans find work Budget: over $5 billion for job creation programs Employed 8.5 million people over the next 8 years

WPA: Types of Work Blue-Collar Workers: –Built public buildings & roads White-collar Workers: –Research & teaching jobs Artists: –Given work through the government & encouraged to develop pride in American Culture

2. Contained Three Major Provisions:

Unemployment Insurance Provided to workers who lost their jobs Funds came from a payroll tax on employers

Pensions Provided to retired workers over the age of 65 Funds came from: –Payroll tax on employers –Tax on employees’ wages

Disability A shared federal-state program Provided payments to people with disabilities, the elderly, and wives & children of deceased male workers

Result: Social Security Has been expanded to cover 95% of American workers

3. Rural Electrification Administration (REA) Designed to aid Americans Provided electricity to isolated rural areas of the country Also allowed regulation of gas & electricity to keep prices low

Result: REA Modernized the isolated parts of the region Finally diversified the South’s economy

4. Revenue Act of 1935 Developed to prevent an unjust concentration of wealth & economic power Sharply raised taxes on the nation’s richest citizens