GDND - New Deal Programs (Lesson)

New Deal Programs

Question Mark Icon President Franklin Delano Roosevelt increased the size of the government exponentially with his New Deal programs. As you work through the content, think about which New Deal programs still exist today and which programs no longer exist. Should the President of the United States have so much power to expand the government?

 

Hoover's Failures

Photograph of Herbert Hoover by The Library of Congress, Public Domain Unemployment reached the highest recorded rate in American history during Herbert Hoover’s administration. Many Americans blamed Hoover for the condition of the nation’s economy and for their personal conditions. American males left their homes to seek jobs in other towns. Children lacked necessities of life, including food. Many Americans became homeless. Many of these homeless, jobless Americans found themselves living in haphazardly built “shantytowns.” These shantytown “homes” were constructed of scraps, cardboard and even paper. Connecting their blight to the current leadership, such shantytowns became known as “Hoovervilles.”

Hoover did try to correct the nation’s economy through public infrastructure projects such as the construction of the Golden Gate Bridge and the Boulder Dam. While these projects were on the right track and provided a precursor to President Roosevelt’s plan, they were not enough to reverse the rapidly declining economy and increasingly dire situation. Today the Golden Gate Bridge is a lasting national monument and the Boulder Dam is a great achievement of engineering. The Boulder Dam was later renamed the Hoover Dam in honor of the president’s efforts.

Photograph of Manhattan Shantytown by New York Public Library Public Domain

Roosevelt's First 100 Days

Portrait of Franklin Delano Roosevelt, Public Domain Franklin Delano Roosevelt pledged to take steps to turn around the nation’s crippled economy within his first 100 days in office as a part of his presidential campaign. After taking the office of President, Roosevelt immediately created an executive order to close all banks for a four-day “bank holiday.” This step helped banks to reorganize their methods and to prevent further “runs” on the banks. Roosevelt also called Congress into special sessions so that he could introduce new legislation to jumpstart the economy and create jobs. These ideas proposed to Congress became the basis of the New Deal. Today every newly elected American president is measured upon their accomplishments in their “First 100 Days” in office. This standard is historically tied to the efforts Roosevelt made and his campaign promise.

Creating Jobs

The United States had the highest unemployment rate in its history when Roosevelt took office. Millions of Americans were homeless. Businesses and farms were bankrupt or in economic disarray. Under President Hoover, the government took a lassiez-faire approach, meaning the government should allow the economy to correct itself naturally. The thought, which has some merit, is that the economy is built on cycles. Hoover and his advisors believed this economic downturn was simply a part of an economic cycle and the market would naturally correct itself once businesses grew. Unfortunately for Hoover, the economic situation was far worse than he or his advisors imagined.

President Hoover made no effort for “direct relief.” Direct relief is when the government directly helps American citizens financially. Direct relief can occur in any number of ways. The government could directly provide funding or payment to citizens, farms or businesses. In direct relief the government can create jobs or projects that create jobs. Also the government can directly provide necessities such as housing, clothing or food. President Roosevelt’s plan was to provide such direct relief to Americans to ease their suffering while helping the economy recover. The programs created under this concept were part of Roosevelt’s New Deal.

Roosevelt Signs TVA Act. By Tennessee Valley Authority, Public Domain

Many of the New Deal programs sought to create jobs or establish projects which would, in turn, create jobs. Some of the most famous programs include the Public Works Administration, the Civilian Conservation Corps and the Tennessee Valley Authority. The Public Works Administration or PWA provided funding to the states and local municipalities to create infrastructure projects such as building roads or bridges or repairing existing structures. These projects hired many people who were then able to provide for themselves and their families and create taxable expenditures. The Civilian Conservation Corps or CCC was a federal program that hired mainly young men to work on rural roads, in national parks or on projects that benefited the environment, such as planting trees to prevent soil erosion. Finally, the Tennessee Valley Authority or TVA built dams in the South to prevent flooding and provide electricity. The TVA did create jobs, provide for flood control and established electrical networks still in existence today. However, the TVA was also controversial for relocating individuals and entire towns as well as causing suspected environmental damages. 

1935 CCC Poster by Works Progress Administration, Federal Art Project; Albert M. Bender, designer

Regulating Banking and Trade

The likely most famous programs of the New Deal and programs that still exist today were the SEC and FDIC. The Securities and Exchange Commission or SEC was established to regulate the stock market to prevent another crash. The SEC calls for transparency of publicly traded business and prohibits actions such as insider trading which can benefit some and damage many investors.

President Roosevelt helped to establish the Federal Deposit and Insurance Corporation or FDIC to assuage the American public’s distrust of banks as a result of the Great Depression. Roosevelt wanted Americans to trust the banking industry and to encourage them to deposit their money in these institutions. The FDIC is a government agency that guarantees cash deposits in banks to a limit of $300,000 per account. Should a bank fail for any reason, the United States government essentially refunds the funds lost to each individual invested in such a failed bank. Both the FDIC and SEC still exist today and serve in much the same capacity as they did when they were created as part of the New Deal.

FDIC Sign by 'Matthew G. Bisanz, CC BY-SA 3.0

The Second New Deal

Going into his second term as president, Franklin Delano Roosevelt believed the policies of the New Deal should be extended. As such, he proposed a Second New Deal. This Second New Deal was focused on reaching those groups that did not benefit as much as others from the original New Deal Programs.

Roosevelt, though largely supported by most Americans, did have his opponents. Senator Huey Long of Louisiana proposed that the New Deal did not do enough to help all Americans. He even ran for president on a platform of “Share Our Wealth” which was a socialist ideal of equalization. Father Charles Coughlin, a Catholic priest and prominent radio personality, originally supported the New Deal, but ultimately he became a vocal opponent of Roosevelt’s policies using his platform as a radio personality. Finally, Dr. Francis Townsend believed the New Deal did not help the elderly. Townsend proposed a pension plan provided by the government for elderly Americans.

The Second New Deal was a response to these critics and some policies were directly influenced by the criticism. The Social Security Act was the most famous policy of the Second New Deal. As Dr. Francis Townsend desired, the Social Security Act provided a government funded pension plan for the elderly. The Social Security Act also provided benefits for disabled and unemployed Americans. The act was and is funded through collected taxes from employers and employees today.

Consider this

Paul Matthews was a member of the CCC. Read his reflection on daily life at the camp.

Reveille at 6:00AM, the camp leader blew a whistle as he strolled through each of the four (4) barracks to awaken the men. 6:30AM, we fell out doors, and stood at attention in front of the flag pole for roll call, and the daily ritual of raising the American flag. We returned to the barracks to make-up our bunk-beds, also "wash-up". Monday to Friday was the work week - we dressed in our work clothes of denim. At 7:00AM we marched to the mess hall for our morning breakfast - at 7:45AM a daily inspection of the barracks by a camp officer - we had to have our bunks, foot lockers and clothing gear in a military precision form. At 8:00AM a whistle gave notice to report to our work assignment. This was handled by the U.S. Grazing Service, with a foreman in charge of a 30 man crew. As we boarded the stake-body trucks for our job site, we were given brown paper lunch bags - the lunch never varied, the same old: 1 Baloney sandwich, 1 Peanut-butter and jam sandwich, with a piece of fruit. I remember a certain group of Western Pennsylvania boys preferred, especially in the spring time, to make a hot tea at lunch time, from a sassafras root bark which we were able to obtain from the town druggist in Aztec, NM. The boys had a one hour lunch break. Our project of work was building an earth dam for cattle. We completed our days work at 4:00PM. Returning back to camp, we changed our clothing after a shower to ODs. At 6:00PM we "lined-up" outside the barracks, facing the flag pole for RETREAT. With the lowering of the American flag, we then marched to the mess hall for dinner. Each man ate at his assigned table. Waiters served the food to the tables by the boys who were on a rotated K.P. list. The Post Exchange was opened to the boys from 7:30PM-9:00PM. Available was soda, candy, etc. We were permitted to buy a $2.00 book of tickets stubs on credit. It was later deducted from our pay on payday which came at the end of the month. Our salary was $30.00 a month, $8.00 in cash to each boy and the remainder of $22.00 was sent home by the government. It wasn't such a bad deal to receive clothing, bed and board and health welfare in the difficult depression years of our time. I lived and enjoyed everyday of my life in the C.C.C. Camp at Bloomfield, NM.