New Deal Reforms

(adapted from Challenge of Freedom, Glencoe: 1990)


Overview   The New Deal promised many reform programs. One program was begun to improve an entire region. Other programs were geared to help the economy and to help minority groups.


Objectives   After reading this section, you should be able to:

The TVA. One of the broadest reforms of the New Deal was the Tennessee Valley Authority (TVA). Even before the depression, the people of the Tennessee Valley had lived in terrible poverty. The valley was rich in natural resources. However, much of this wealth was lost because of floods, erosion, or poor farming methods. The TV A was aimed at end­ing these problems. Its major goal, however, was to provide electricity at low rates to the people of the Tennessee Valley.

One of the main backers of the TVA was Senator George Norris of Nebraska. For many years he had been asking the federal government to build a power plant on the Tennessee River in Muscle Shoals, Alabama. Senator Norris believed that the government should also undertake similar projects in other parts of the country.

During the 1920's, Senator Norris's plan for the Tennessee Valley was passed twice by the Congress. The first time the plan was passed, it was vetoed by President Coolidge. After its second passage, it was vetoed by President Hoover. Neither President wanted the government to enter into the electric-power business.

Senator Norris finally received approval for his plan from President Roosevelt. Roosevelt had a strong interest in the TVA. He saw it as a means of conserving and developing the natural resources of the Tennessee Valley.

Congress created the TVA in May 1933. For the first time in American history, a region extending into several states was brought under the power of one government office. Headquarters for the TVA was set up in the Tennessee Valley, not in Washington, D.C. From this location, the TVA could better make its decisions in cooperation with people from the area and with local governments.

The TVA built dams and power plants on the Tennessee River and on its branches. This provided electric power for the residents. This electricity also attracted more busi­nesses to the valley. In addition, the TV A provided the area with flood control and other conservation projects.

The TVA undertook many other tasks as well. For example, TVA workers improved riv­ers for navigation. They also taught the people of the area better ways of farming. The TVA has been very important in bringing long-lasting improvements to the Tennessee River valley area .

Think about it...What was the main goal of the TVA?


Other Reforms. Several New Deal laws were aimed at correcting shortcomings in the economy. As you have read, President Roosevelt took steps to aid the country's banks during his first days in office. In the following months, Congress passed laws to change banking practices. Through the Glass-Steagall Banking Reform Act of June 1933, the government took greater control over the country's banks. This law also pro­vided savers with federal insurance on their savings accounts. This insurance was to be handled by the Federal Deposit Insurance Corporation (FDIC). Because of the FDIC, savings could never again be completely wiped out, as they were in the early years of the depression.

New laws were also passed that regulated the sales of stocks and bonds. Other New Deal laws were aimed at helping minority groups.

Think about it...What was the purpose of the FDIC?


Reforms for Minorities. The New Deal made it possible for some disadvantaged Americans to gain fairer treatment. In part, this was be­cause President Roosevelt chose for his advisers many persons who were aware of the hardships faced by minority groups.

The President's wife, Eleanor, was concerned with the hardships some Americans faced because of discrimination. She made a special effort to advance equal rights for blacks.

President Roosevelt brought several blacks into the government to take part in shap­ing the New Deal. President Roosevelt also opened the way for women to take a greater part in government. He appointed Frances Perkins as Secretary of Labor - the first woman cabinet member.

American Indians were also among those who made some gains from the New Deal. President Roosevelt named two persons to office who were sensitive to the problems faced by American Indians. One of them was Secretary of Interior Harold Ickes. The other was John Collier, the Commissioner of Indian Affairs.

Collier and Ickes worked for the passage of the Indian Reorganization Act of 1934. Before this law, the government had taken steps to break up Indian tribes and to distribute land owned by the tribes. The 1934 law changed this by reorganizing and encouraging tribal unity. It also protected tribal ownership of lands.

Despite these efforts, the hard times seemed to fall most heavily on minority groups. Discrimination, even by the federal government, continued. For example, black youths in the CCC worked in all-black camps. In the Southwest, several states tried to cut down on the number of jobless by returning illegal Mexican aliens to Mexico. Large numbers of persons of Mexican descent, including many American citizens, were forced to leave the United States.

Therefore, for many Americans, the New Deal did not go far enough in ending hardships. However, some other Americans held a different view of the New Deal. They felt that the New Deal had already made too many changes in government and in business.

Think about it...Who was Frances Perkins?


Pressures on the President. By 1935 there was growing pressure on the President to change the New Deal. Part of this pressure was brought on by business owners. Many of them felt that the New Deal was harming the American economy. They claimed that President Roosevelt was using the government to change the free enterprise system. They called for lower government spending and for lower taxes. These business leaders also wanted the President to keep the government out of business matters.

President Roosevelt answered these attacks by saying that a main goal of the New Deal was to maintain the American business system. Because of this, he would not accept these ideas for changing the New Deal.

Some other Americans with more radical ideas charged that the New Deal did not do enough for workers or for the jobless. Three popular leaders with this viewpoint were Senator Huey Long, Francis Townsend, and Father Charles E. Coughlin. By early 1935, each of these men had built up a large following. These followers held views that were very different from those held by business leaders. These Americans wanted the New Deal to go even further in providing Americans with money to live on.

A ruling from the Supreme Court also served to put pressure on the New Deal. In May 1935, the Court struck down the National Recovery Administration (NRA). In the ruling, the Court said that Congress could not give its lawmaking powers to the President. Then, in January 1936, the Court ruled that the Agri­cultural Adjustment Act (AAA) was unconstitutional. Thus, while a growing number of Americans were asking more from the New Deal, the Court was acting to limit President Roosevelt's actions. As hard times continued and the election of 1936 neared, President Roosevelt had to choose a course for the future.

Think about it...What two New Deal programs did the Supreme Court declare to be unconstitutional?


REVIEW…At the onset of the depression, President Hoover believed that business would soon recover. The President used his office to speed this recovery. Despite these efforts, conditions became worse. As unemployment skyrocketed, Americans began to blame the President for the continuing hardships. Because of this, President Hoover was defeated in the election of 1932. Franklin Delano Roosevelt was elected President.

President Roosevelt promised to undertake bold steps to end the depression. His plans for relief, recovery, and reform became known as the New Deal. The New Deal was, in many ways, an experiment. It included a wide range of programs aimed at meeting many different goals.

Some parts of the New Deal succeeded, while others failed. By 1935, there was growing criticism of the New Deal. Also, the Supreme Court made two decisions that forced the President to change his program.