History 13-2
The Supreme Court Opposes the New Deal:
A year before the 1936 election, the Supreme Court had overturned one of the key laws of Roosevelt's first hundred days. The Supreme Court unanimously ruled that since the President has no power.
John Maynard Keynes: Pump Priming:
British economist John Maynard Keynes argued that deficit spending was needed to end the depression. According to Keynes, putting people to work on public projects put money into the hands of consumers who would buy more goods, stimulating the economy.
Social Security Eases the Burden on Older Americans: Social Security Act:
Established unemployment insurance for workers who lost their jobs. The law also created insurance for victims work-related accidents and provided aid for poverty-stricken mothers and children, the blind, and the disabled. The Social Security Act had many flaws. At first, it did not apply to domestics or farmworkers. Since African-Americans were disproportionately employed in these fields, they were not eligible for many of the benefits of Social Security.
FDR Proposes "Packing" the Court: Court Packing:
FDR unveiled a plan that would dilute the power of the sitting nine-member Court. He justified his proposal by noting that the Constitution did not specify the number of judges on the Court.
New Programs Provide Jobs: Works Progress
In the spring of 1935, Congress appropriated $5 billion for new jobs and created the Works Progress Administration (WPA). By 1943, the WPA had employed more than 8 million people and spent about $11 billion. Its workers built more than 650,000 miles of highways and 125,000 public buildings. All of these programs were expensive, and the government paid for them by spending money they didn't have. The federal deficit was $461 million in 1932.
Water Projects Change the Face of the West:
Many of the New Deal public works water projects had an enormous impact on the development of the American West. The government funded the complex Central Valley irrigation system in California. The massive Bonneville Dam in the Pacific Northwest controlled flooding and provided electricity to a vast number of citizens.
Granting New Rights to Workers: Wagner Act: Collective Bargaining:
Roosevelt believed that the success of the New Deal depended on raising the standard of living for American industrial workers. The Wagner Act recognized the right employees to join labor unions and gave workers the collective bargaining.
(1938) Fair Labor Standards Act
The Fair Labor Standards Act of 1938 provided workers with additional rights. It established minimum wage, initially at 25 cents per hour, and a maximum worksheet of 44 hours. It also outlawed child labor. The minimum wage remains one of the New Deal's most controversial legacies.
A New Downturn Spurs Conservative Gains:
The turmoil over the Supreme Court had barely faded when the Roosevelt administration faced another crisis. During 1935 and 1936, economic conditions had begun to improve. Unemployment had fallen 10 percent in four years. With the economy doing better, FDR cut back on federal spending in order to reduce the rising deficit.
Workers Use Their Newfound Rights: Congress of Industrial Organizations (CIO): Sit-down Strike:
The upsurge in union activity came at the same time as a bitter feud within the major labor federation, the American federation of Labor (AFL). Congress of Industrial Organizations: Mine Workers and a number of other labor leaders.
More Aid Goes to Farmers: The Rural Electrification Administration (REA):
When the depression began, only 10 percent of farmers had electricity, largely because utility companies did not find it profitable to run electric lines to communities with small populations. To bring farmers into the light, Congress established the Rural Electrification Administration (REA). The REA loaned money to electric utilities to build power lines, bringing electricity to isolated rural areas.
