Emergency Bank Relief Act

One day after taking office, Roosevelt declared a national bank holiday and closed all banks to prevent further withdrawals. Then he persuaded Congress to pass the Emergency Bank Relief Act (EBRA), which authorized the Treasury Department to inspect the country’s banks. Those that were deemed sound were allowed to reopen at once; those that were unable to pay their debts remained closed. Those that needed help could receive loans. This measure revived public confidence in banks, since customers now had greater faith that the open banks had been approved and were in good financial shape.

On your own paper, answer the following: 1. Write the full name of the program and the abbreviation (for example, AAA) 2. Which of the 3 R’s is it and why? 3. What problem is this program addressing? 4. How is this program addressing that problem?

The Glass-Steagall Banking Act & The FDIC

Within a few weeks of taking office, Roosevelt had restored the people’s confidence in banks. After people began to put their savings back into the banks, Congress took a step to reorganize the banking system by passing the Glass-Steagall Banking Act. Among other things, this law established the Federal Deposit Insurance Corporation (FDIC), which provided federal insurance for all individual banks accounts. This meant that in the future, if many people wanted to withdraw their money at the same time and the bank did not have all of the money on hand, they could get the money from their insurer. The FDIC still exists today, and the Glass-Steagall Banking Act reassured millions of Americans that their hard-earned money was safe.

The Agricultural Adjustment Act

The AAA sought to raise crop prices by lowering production, which the government achieved by paying farmers to leave a certain amount of every acre of land unseeded. Essentially, the government, for the first time ever, was paying farmers not to plant. The theory behind it was that reduced supply of crops would create a higher demand for those crops, therefor boosting prices. In some cases crops were too far advanced for the acreage reduction to take effect. As a result, the government paid cotton growers $200 million to plow under 10 million acres of their crop. It also paid hog farmers to slaughter 6 million pigs. This policy upset many Americans, who protested the destruction of food when many people were going hungry. It did, however, help raise farm prices and put more money in farmer’s pockets.

The Roosevelt established many programs to provide help through government works projects and cash payments. One important program was the CCC, which put young men, age 18-25, to work building roads, developing parks, planting trees, and helping in soil erosion and flood-control projects. The CCC paid a small wage, $30 a month, of which $25 was automatically sent home to workers’ families. It also supplied free food and uniforms. By the time the program ended in 1942, almost 3 million young men passed through the CCC. Many of the camps were located on the Great Plains, where within a period of eight years, over 200 million trees were planted. This tremendous reforestation program was aimed at preventing another Dust Bowl.

The Civil Works Administration & The Public Works Administration

The PWA, created in 1933, provided money to states to create jobs. Harry Hopkins, the head of the program, thought that giving people money was helpful for buying food, but giving people a job enables people to gain confidence and self-respect. These jobs were chiefly the construction of schools and other community buildings. When these programs failed to make a sufficient dent in unemployment, President Roosevelt established the Civil Works Administration. This provided 4 million immediate jobs. Some critics of the CWA claimed that these work programs cost too much money, but the CWA built over 40,000 schools and paid the salaries of over 50,00 teachers in rural America.

The National Industrial Recovery Act

The NIRA sought to promote industrial growth by establishing codes of fair practice for individual industries. It created the National Recovery Administration (NRA), which set prices of many products to ensure fair competition, and established standards for working hours and a ban on child labor. The aim of the NRA was to promote recovery by interrupting the trend of wage cuts, falling prices, and layoffs. Competing businesses would meet with representatives of workers and consumers to draft the codes of fair competition. These codes both limited production and established prices. Because businesses were given new concessions, workers made demands. Congress met their demands by passing a section for the NIRA guaranteeing workers’ rights to unionize and bargain collectively.

*Note: This NRA is not related to the modern-day NRA, which is the National Rifle Association

The Work Progress Administration

The WPA set out to create as many jobs as possible as quickly as possible. It received a budget of $5 billion, the largest sum any nation had ever spent for public welfare at one time. Between 1935 and 1943, it employed more than 8 million people. WPA workers, most of them unskilled, built 850 airports throughout the country. They constructed or repaired roads and streets, put up libraries, schools, and hospitals. Sewing groups, employed by women, sewed garments for the needy. The WPA employed many professionals as well – writers, teachers, artists, musicians, and actors. These professionals were hired to create art, music, and scholarly studies. They wrote guides to cities, collected historical slave narratives, painted murals on the walls of public buildings, and performed in theater troupes around the country. At the urging of Eleanor Roosevelt, the WPA made special efforts to help women, minorities, and young people.

The Fair Labor Standards Act

Congress passed the Fair Labor Standards Act of 1938 to establish maximum hours an minimum wages. The FLSA , for the first time, set a national minimum hourly rate for wages; 25 cents an hour at first, 40 cents an hour by 1945. It has also established a national maximum workweek; 44 hours to begin, followed by 40 hours in two years. In addition, the act banned factory labor for workers under the age of 16, and provided mandatory overtime pay for workers working over the maximum number of hours per week. Hour, wage, and workforce restrictions set by this act are still in place today.

National Youth Administration

Created to specifically provide education, jobs, counseling, and recreation for young people, the NYA provide student aid to high school, college, and graduate students. In exchange, students worked full or part time positions at their schools. This work program gave young people a chance to work for themselves, to earn money to pay for clothes, school supplies, food, and other essentials. For graduates unable to find jobs or youths who had dropped out of school, the NYA offered part-time jobs working on highways, parks, and the maintaining public grounds.

The Social Security Act

One of the most significant policies of the New Deal was the creation of the Social Security system through the Social Security Act (SSA). The act had three major parts. The first was old-age insurance for retired individuals over the age of 65 which was a supplemental retirement plan. Half of the funds came from the worker and half came from the employer. Although some groups were excluded from the system, it helped make retirement possible for millions of people. The second provision was unemployment compensation for those who had been fired, funded by a federal tax on employers which was administered at the state level. The third provision was aid to families with dependent children and those who are disabled. This welfare system is still in effect today, in three separate entitlement programs (Social Security, unemployment, and Medicaid).