Sampling of Key New Deal Legislation

franklin d. roosevelt …71

frances perkins …77

franklin d. roosevelt …87

Upon his first inauguration in March 1933, President Franklin D. Roosevelt (1882–1945) and his close advisers and cabinet members immediately began to develop and write legislation designed to help bring the United States out of the Great Depression, the worst economic crisis ever experienced by the nation. The legislation and the relief and recovery programs it created became known as the New Deal. Once the most urgent needs of hunger and unemployment were addressed, the president turned his attention to establishing permanent programs of recovery, reform, and rebuilding. Included among these programs were the National Housing Act of 1934, the Social Security Act of 1935, and the Fair Labor Standards Act of 1938.

The Great Depression dealt blows to both the home owner and the construction industry. In 1932 between 250,000 and 275,000 homes were lost to foreclosure. (In comparison, 68,000 homes were foreclosed in 1926.) Foreclo-sure is a legal proceeding in which a bank that has loaned money for the purchase of a home takes the home back because the borrower has not kept up with payments on the loan. By 1933 foreclosures reached a dismaying rate of a thousand per day. Between 1929 and 1933 construction of residential property fell 95 percent, and expenditures on repairs decreased from fifty million to one-half million dollars. Roosevelt knew that home loss and the construction downturn needed to be dealt with quickly if the U.S. economy was to be turned around. As a result, Congress passed the Home Owners' Refinancing Act of 1933 and the National Housing Act of 1934 to deal with these issues.

Electricity and the New Deal

Franklin D. Roosevelt supported electrical modernization of America on a broad basis. He believed that inexpensive electricity could greatly improve the quality of life for American families, especially in rural areas. To achieve the goal of affordable and plentiful electricity for all, Roosevelt sought to apply broad governmental planning to various regions of the nation. During Roosevelt's first one hundred days in office, Congress passed legislation establishing the Tennessee Valley Authority (TVA) on May 18, 1933. The TVA was an experiment in regional economic planning involving a large area that included portions of seven Southeastern states (Tennessee, Kentucky, Virginia, Mississippi, Alabama, Georgia, and North Carolina). The TVA built a series of dams and power plants to provide inexpensive electricity to farms and industry in the broad region. TVA also provided much more, including flood control, improvement of river navigability, and even reforesting nearby hills.

Associated with the TVA, the Rural Electrification Administration (REA) was created in May 1935. The REA provided loansto local electrical cooperatives to build electrical transmission systems and purchase electricity from power companies. Originally focused on the TVA region, the REA eventually extended its activity nationwide. By 1939 the REA had assisted more than 400 cooperatives and 268,000 households.

By the end of the 1930s the TVA was generating and distributing large amounts of electric power for a huge territory. Ship traffic increased as new dams and navigation locks were completed. The New Deal experiment had a lasting effect on the economy and the lives of the people in the TVA region by providing power and navigatible waterways. Both of these measures provided for substantial industrial growth and linked agriculture to more distant markets. The TVA was the model of efficiency Roosevelt was seeking. In addition to providing electricity, massive dams served many purposes, including flood control, navigation, irrigation, and recreation. It was extremely popular with the public, employing many thousands of people and bringing electricity to the countryside. The TVA was one of the crowning achievements of the New Deal.

Roosevelt and Secretary of Labor Frances Perkins (1880–1965) considered the Social Security Act of 1935 a cornerstone of New Deal legislation. In the 1930s it was estimated that approximately 50 percent of the elderly lived in poverty. Anyone who was injured in an industrial accident, and who could no longer work, fell quickly into debt; injured workers' families became poverty-stricken. Those who were laid off because business was slow had the same difficulties. Roosevelt realized he could not protect all Americans from all hardships in life, but he wanted to institute some measure of social insurance or social security protection for U.S. citizens. He had hoped to have everyone covered by the Social Security Act, but only about 50 percent of citizens ended up being covered through the act. Nevertheless, it was a start, a foundation to build upon. The act provided cash payments to those hurt on the job and to the unemployed. It also provided old-age retirement benefits and increased health services for children, mothers, and some disabled persons. The Social Security Act of 1935 was amended many times throughout the twentieth century to further improve social insurance programs for individuals and families.

The Fair Labor Standards Act, passed on June 25, 1938, proved to be the last New Deal measure. The act addressed vital issues such as minimum wage, maximum hours, overtime pay, and child labor. Like the Social Security Act, the Fair Labor Standards Act underwent numerous amendments during the twentieth century, and it remains a fundamental piece of labor legislation in the twenty-first century.

The first of the following excerpts is taken from "Recommendation for Legislation to Provide Assistance for Repairing and Construction of Homes, May 14, 1934," published in The Public Papers and Addresses of Franklin D. Roosevelt: Volume Three, 1934. In this excerpt Roosevelt explains to Congress the need for action to aid the home construction industry. Then in his notes he describes the function of the Federal Housing Administration (FHA), which was established by the National Housing Act of 1934. The second excerpt is from The Roosevelt I Knew, a book published by Frances Perkins in 1946. Perkins gives an insider's view of the creation of the Social Security Act. The third excerpt is from Roosevelt's "Annual Message to the Congress, January 3, 1938," published in The Public Papers and Addresses of Franklin D. Roosevelt: 1938 Volume. In this speech Roosevelt argues for a legal minimum wage to increase Americans' ability to purchase goods.