Changes to the New Deal After 1933 (Cambridge (CIE) IGCSE History): Revision Note

How Far Did the Character of the New Deal Change After 1933?

Summary 

In 1935, Franklin D. Roosevelt (FDR) introduced the Second New Deal. This was necessary for a number of reasons. First, the Supreme Court had blocked some aspects of the First New Deal by ruling that FDR had overreached his powers. Second, he was being criticised by wealthy businessmen who believed the First New Deal was too expensive. Finally, there was to be a presidential election in 1936, and FDR wanted to ensure he won it.

The Second New Deal strengthened workers’ rights, created a national welfare state and enforced a national minimum wage, which raised the earnings of hundreds of thousands of Americans.

Why did the New Deal change?

The ruling of the Supreme Court

• The Supreme Court ruled that FDR had done things that he had no right to do as president

• It ruled that: 

  • The National Recovery Administration (NRA) had tried to set prices and wages that only Congress, not the president, could do

  • The Agricultural Adjustment Association (AAA) had paid farmers to not grow food, which the Supreme Court ruled was the role of the state governments — not the president

Unemployment

• There were still 11 million unemployed Americans in 1935

• Many workers continued to strike and be in dispute with their employers

Business leaders

• Many business leaders felt the New Deal was too expensive and was interfering with their ability to do business

The 1936 election

• 1936 was an election year, and the American people would get to decide whether to keep FDR as president or replace him

Features of the Second New Deal

National Labor Relations Act of 1935

• The National Labor Relations Act (NLRA) of 1935 replaced the NRA and encouraged workers to join a trade union:

  • The NLRA increased union membership — by the end of the 1930s, over eight million people belonged to unions

• It created the National Labor Relations Board (NLRB) to protect the rights of workers

• The Republican Party and businessmen opposed the NLRA:

  • Some employers refused to let their workers join unions

Soil Conservation Act of 1935

• The Soil Conservation Act of 1935 replaced the AAA:

  • It encouraged the planting of grasses, trees or vegetables by subsidising farmers not to grow crops

  • It helped to resolve issues of soil erosion caused by the Dust Bowl

• By 1939, soil erosion had been reduced by 65%

• Farmers used more sustainable farming practices

• This helped farmers and the environment

Social Security Act of 1935

• The Social Security Act of 1935 created a national social welfare system, which included:

  • Old-age pensions

  • Disability payments 

  • Unemployment payments (dole money)

• It also supported widows and orphans

• The Second New Deal meant that the US had a welfare system:

  • This brought the US in line with other Western countries in looking after their citizens

• The welfare system was an improvement, but:

  • Pension payments were low at $85 a month

  • The system only covered a third of workers

  • The system did not support farmers or workers in private households

Works Progress Administration

• The Works Progress Administration (WPA) employed 2 million workers a year

• The WPA became the US’s biggest employer, and it created jobs in many professions, including acting, writing and photography

• Some of this work was only temporary

United States Housing Act of 1937

• The United States Housing Act of 1937:

  • Provided loans to encourage people to buy houses

  • Reduced rent prices

  • Improved living conditions for low-income families 

  • Gave money to local housing agencies to destroy or improve unsafe housing

• Banks offered more generous mortgage deals:

  • This meant low- and middle-income families could own houses

• The federal government let the local governments decide where and how to use the funding:

  • As a result, Black American housing remained substandard, as local governments were predominantly run by White Americans

Fair Labor Standards Act of 1938

• The Fair Labor Standards Act of 1938:

  • Enforced a minimum wage

  • Limited working hours

  • Improved working conditions

• More than 700,000 workers achieved higher pay

• More than 1.5 million people worked fewer hours in a week than before the Act

The Resettlement Administration (1935)

• The Resettlement Administration of 1935 aimed to move 500,000 families to areas of better land

• It only managed to resettle about 5,000 families

• Many families did not want to move or were unhappy with where they were being told to go