The First New Deal (1933-1935)

Scholars typically identify two distinct phases of the New Deal.  The First New Deal programs were generally passed in the first two years of FDR’s first term, many of them during the so-called Hundred Days from March through June of 1933.  The administration primarily focused on immediate relief for obvious symptoms of the Depression—unemployment, low agricultural prices, lack of confidence in banks, and stagnant industry.  None of these programs was ever intended to be permanent, and –before New Dealers fully grasped the Depression’s depths—they were thought to be adequate responses. 

“Relief” best describes these measures.  As an example, the national bank holiday and bailout of insolvent financial institutions passed within hours of Roosevelt becoming president.  So did direct aid to the urban poor, usually in the form of unskilled, sometimes made-work jobs, put into effect by the Federal Emergency Relief Agency (FERA).  Some relief measures were much more complex and represented more carefully thought-out responses.  Rather than exhaustively list and describe each program of the New Deal, this unit will instead focus on a few programs as examples.  Choose a card from the “It’s a New Deal interaction” to learn more about the New Deal programs. 

CCC workers build a road in Ohio.

CCC workers build a road in Ohio.

Civilian Conservation Corps

Cabins at Bastrop State Park in Texas built of native stone by the CCC. 

Cabins at Bastrop State Park in Texas built of native stone by the CCC. 

With nearly one-third of the workforce idle, unemployment was a major and complex issue facing the nation.  Different elements of the workforce faced different issues standing between them and work.  The Civilian Conservation Corps focused on the unique problems faced by young men, aged 18-25.  Many young men in this age group lacked the work experience, skills, and self-discipline needed to hold a job.  The CCC took on this problem.  It also became a favorite program of the president’s and a popular one with the public.

The Corps enrolled young men and provided them with housing, food, and clothing.  Military drill instructors trained them at special encampments.  Once their training ended, CCC detachments decamped to job sites, sometimes quite distant from their origins.  Young men found themselves traveling across the country and interacting with people from around the nation.  CCC employees worked on conservation projects, roads, and access improvements in national parks, and built parks for states and municipalities.  Roosevelt cared deeply about the conservation of the natural environment, and he also believed strongly that outdoor work built character in young men. 

CCC workers at an experimental farm in Beltsville, Maryland, 1933. 

CCC workers at an experimental farm in Beltsville, Maryland, 1933. 

In the CCC, young men received a wage of thirty-five dollars per month, and they were required to send thirty dollars home to their families.  They also gained job experience and skills that could later be moved into the general workforce.  The public approved of the CCC, and though it was intended to be temporary, it continued into early 1942.  By that point three million young men had found work with the CCC.  Roll over the CCC Today interaction to learn more about Corps-like programs today.

Norris Dam, one of the many dams built by the TVA.

Norris Dam, one of the many dams built by the TVA.

Tennessee Valley Authority

A worker inside Norris Dam.

A worker inside Norris Dam.

New Deal planners recognized the special intensity of the Depression in the South.  While New Deal agricultural programs generally emphasized the narrow goal of increasing commodity prices, the Tennessee Valley Authority (TVA) focused on the economic modernization of a whole region.  Parts of seven states along the nearly 800 mile watershed of the Tennessee River languished in poverty simply made worse by the Depression.

During World War I, the federal government built the Wilson Dam at Muscle Shoals, Alabama.  The hydroelectric power it produced powered the manufacture of nitrates for the production of explosives.  At the war’s end, the demand for nitrates fell off.  Progressives in Congress, led by Republican Nebraska Senator George Norris, pressed for federally run transmission of Wilson Dam power to the surrounding area.  Throughout the 1920s, Republican congressional leaders and presidents Coolidge and Hoover prevented this, allying themselves with private power producers.  Power companies opposed public power, though they were willing to admit that private power for the region was cost effective.  At night, the Tennessee Valley fell dark except for kerosene lamps; each day’s chores were a grind of physical or animal powered labor.  People lived much as had their ancestors a century earlier.

Web Field Trip

Find out more about what the Tennessee Valley Authority does today.  (link www.tva.gov with “Tennessee Valley Authority.”

Approved by Congress in May of 1933, the TVA exceeded Norris’s original vision and became another favorite project of the president’s.  Not only did it allow for public ownership and distribution of the power from Muscle Shoals, but it proposed still more dams to produce more power up and down the valley.  Dams would control flooding and create lakes, parks, and recreation areas.  Cheaply produced power would attract industry, produce better jobs, and help break the cycle of poverty for the region.  Conservation projects addressing erosion and deforestation also sprouted from the TVA.

Roosevelt saw the TVA as a model for future projects and as it developed, the TVA became ever wider in its scope of operations.  Initially, it attracted little controversy beyond the complaints of private power providers.  As its operations expanded, and as other federal regional development projects emerged, TVA became a target of conservative critics who felt it displayed too much government power.  Despite the dissent, the TVA exists today, as do similar government projects.

NRA Eagle. Posters like this one would be displayed in the windows of businesses that had agreed to participate in the NRA. 

NRA Eagle.  Posters like this one would be displayed in the windows of businesses that had agreed to participate in the NRA. 

National Industrial Recovery Act

Some within the Brains Trust called for a form of government-corporate partnership to plan production and control markets.  These analysts saw the trust-busting efforts of the Wilson years and the laissez-faire attitude of the 1920s as having fostered an imbalance between consumption and production.  They reasoned that this imbalance helped cause the Great Depression.  For many New Dealers, Wilson-era trust-busting failed to appreciate the efficiency and effectiveness of big business.  Laissez-faire Republicans in the 1920s placed too much faith in markets and the business cycle with the result of cutthroat competition.  The resulting boom-bust roller coaster hurt corporations, their employees, and consumers.

The administration envisioned a situation where agencies would plan and help the private sector manage industrial and agricultural production, and managed production would boost prices.  Higher prices would improve hiring, justify higher wages, and boost buying power.  Buying power would increase both consumption and the standard of living.  The administration proposed the National Industrial Recovery Act (NIRA) in May 1932, and Congress approved it a month later.  Under the NIRA’s Section 7a, the federal government would regulate maximum hours and minimum wages.  Additionally, workers received the right to unionize and collectively bargain.  The act also created two agencies—the National Recovery Administration (NRA) and Public Works Administration (PWA)—that would jointly fuel recovery.

National Recovery Administration

Planners envisioned the National Recovery Administration as a government-business partnership fighting overproduction and easing competitive pressures upon prices and wages.  Roosevelt appointed Hugh Johnson to head the agency.  Johnson approached his job with great energy and creativity, launching a costly and flashy publicity campaign to encourage business to sign on and consumers to demand they do so.  Participants in NRA adorned their products and places of business with the agency’s symbol—a blue eagle with the motto: “We do our part.”

The NRA helped improve stability in certain “sick” industries, such as oil, textile, and coal.  But it soon became entangled in red tape with a proliferation of codes and regulations.  By 1935, the agency had produced 13,000 pages of code and almost as many pages of administrative interpretations of those rules.  Eventually, criticism mounted, and Hugh Johnson’s reaction to critics only intensified scrutiny.  In October 1934, Johnson quit as the NRA shuddered under its own weight.

PWA dam on the Columbia River in Oregon.

PWA dam on the Columbia River in Oregon.

Public Works Administration

PWA project in Washington, D.C. 

PWA project in Washington, D.C.   

The other agency created by the NIRA proved much more successful, though slow out of the gate.  New Deal planners proposed the Public Works Administration (PWA) to work alongside the NRA to jump-start the economy.  With a $3.3 billion appropriation, the NRA’s public works and construction projects promised to funnel cash into the economy.  PWA’s administrator, Secretary of the Interior Harold Ickes, presided with intensive attention to detail, effectively preventing fraud and waste.  Secretary Ickes’s vigilance meant that the agency spent only $110 million in 1933, barely a trickle of its budget and not enough to help NRA lift the economy.  Eventually, despite his prudence, the PWA became an engine of recovery, employing hundreds of thousands and building schools, hospitals, roads, and public buildings.  PWA built a number of high profile projects, including New York’s LaGuardia Airport, the long highway connecting Key West with mainland Florida, and San Francisco’s Bay Bridge.

 

Agricultural Adjustment Administration 

County agents office in San Augustine, Texas. Farmer is receiving his AAA check, 1939. 

County agents office in San Augustine, Texas.  Farmer is receiving his AAA check, 1939. 

The Great Depression arrived for American farmers well in advance of the 1929 stock market crash.  Low agricultural prices and decreased demand followed the end of World War I.  But farmers continued to overproduce, tenancy rates rose, and prices spiraled downward.  Increasing farm prices became a critical priority for the administration.  Twelve days after taking office, Roosevelt proposed the Agricultural Adjustment Act, creating a bureaucracy known as the Agricultural Adjustment Administration (AAA) within the Department of Agriculture.  The government, working together with farmers, created higher prices through a policy of planned scarcity.

Did you know?

Dust storm

iDust storm

In addition to the many other problems facing the nation in general and farmers in particular, farmers faced the ecological disaster of the “dust bowl” during the 1930s.  Harsh farming practices coupled with severe drought caused extreme dust storms throughout the Great Plains.  The dust bowl, combined with other effects of the Great Depression, forced a huge exodus of people out of the Great Plains looking for work.

The AAA proposed deliberate reductions in agricultural production, planned and managed by the government.  These increased prices would improve the agriculture sector’s buying power, leading to more mechanization and greater efficiency.  That buying power would help reinvigorate industry, employ workers and strengthen the economy. 

The AAA took acreage out of production by paying participating farmers a direct subsidy to do so.  Cash for these payments came from a tax on agricultural processing concerns, which were, in turn, passed on to consumers.  By the time the bill had passed in the late spring of 1933 most crops had sprouted, livestock had already bred, and another year’s overproduction was already well underway.  In response, AAA ordered the planned destruction of crops growing in the fields and the slaughter of livestock.  While limited in scope, destroying farm produce defied the logic of farming and even raised serious moral concerns for many producers.  It also generated controversy.  After all, many citizens in urban areas lacked enough food.  However, AAA’s focus remained on improving farm prices, which did began to climb upward after 1933.