View of New Deal, a Work Relief Shack Town

Photograph

By: Margaret Bourke-White

Date: January 1, 1936

Source: Photo by Margaret Bourke-White/Time & Life Pictures/Getty Images.

About the Photographer: Margaret Bourke-White opened a studio in Cleveland in the late 1920s after graduating from Columbia University and joined Fortune as a staff photographer in 1929. She was recruited in 1936 by Life magazine and did much of her most notable work as a war correspondent during World War II and the Korean conflict. Bourke-White died from Parkinson's disease in August 1971.

INTRODUCTION

On "Black Tuesday," October 29, 1929, the U.S. stock market crashed, triggering the Great Depression—the worst economic collapse in modern history. Banks failed and many companies all over the country went out of business, causing more than fifteen million workers to lose their jobs.

Franklin Delano Roosevelt (1882–1945) was elected president of the United States in 1932, following a campaign centered around his pledge to restore the confidence of the American people and bring the United States out of the Depression. Soon after he assumed office in 1933—considered by many the worst year of the Great Depresion—FDR formulated several economic and relief policies. During the first hundred days of his administration, Congress passed fifteen major pieces of legislation. These initiatives, known collectively as the "New Deal," had three fundamental goals: relief for the deprived, economic recovery, and financial reform.

New Deal financial recovery programs included the Emergency Banking Relief Act, the Federal Deposit Insurance Corporation, the Home Owners Loan Corporation, and Farm Credit Administration. Prominent initiatives to provide relief for the millions of unemployed were the Federal Emergency Relief Administration (FERA), the Civilian Conservation Corps (CCC), and the Tennessee Valley Authority (TVA). The New Deal also developed highly controversial industrial programs such as the National Recovery Administration (NRA), and farm production control programs, such as the Agricultural Adjustment Administration (AAA). These were, however, invalidated after being declared unconstitutional.

The New Deal also spawned several economic programs, including the Securities and Exchange Commission (SEC) and the Federal Housing Administration (FHA). The Public Works Administration (PWA) was part of the National Industrial Recovery Act of 1933; its purpose was to provide employment in various public works projects. Although the PWA did not significantly improve the economy or lessen unemployment, between July 1933 and March 1939 it funded more than $6 billion to build more than 34,000 projects, including airports, electricity-generating dams, aircraft carriers, seventy percent of new schools and one-third of the hospitals built during that time, tunnels, and highways—the Lincoln Tunnel between New York City and New Jersey, and the Key West Highway in Florida being the most prominent.

Workers from all over the country who came to work on PWA projects stayed in makeshift communities popularly known as shack towns or boomtowns. The primary source is a photograph of one such shack town in Fort Peck, Montana, where the Fort Peck Dam project was undertaken by the PWA.

PRIMARY SOURCE

VIEW OF NEW DEAL, A WORK RELIEF SHACK TOWN

See primary source image.

SIGNIFICANCE

Franklin Roosevelt's very first directive as president was to declare a four-day bank holiday, during which congress drafted the Emergency Banking Bill of 1933, giving the federal government authority over banks. This move stabilized the banking system and restored the public's faith in the industry.

Other New Deal initiatives, such as those mentioned above, helped improve the economy. Although most programs yielded immediate results, a few were criticized and subsequently discontinued. One such program was the National Recovery Administration (NRA), of which the PWA was a part. Established on June 16, 1933, the NRA set a minimum wages and work hours for nonunion workers and allowed trade associations to engage in collective bargaining. The NRA was declared unconstitutional by the Supreme Court in 1935. For its part, the PWA was criticized because its workers were housed in low-quality shack towns.

Critics state that New Deal programs did not strengthen the American economy. They point out that the country's 1928 gross national product (in simple terms, total output of the economy) was $100 billion; it had recovered only to $85 billion by 1939, toward the end of the New Deal programs. Similarly, the number of unemployed in 1929 was 2.6 million; by 1940 it was to 8 million. However, the economy was at its peak in 1928 and 1929. New Deal proponents maintain that comparison should begin with the New Deal in 1933, when the GNP was $55 billion and 15 million were unemployed.

Moreover, advocates of the New Deal highlight significant gains made by some of the programs. For instance, between 1935 and 1943 the PWA provided nearly 8 million jobs at a cost of more than $11 billion. In addition, it sponsored the New Deal Cultural Programs, including the Federal Theater Project, Federal Art Project, and Federal Writers' Project. The Social Security Act provided a pension system for senior citizens. The Tennessee Valley Authority (TVA) and the Bonneville Power Authority brought electricity and flood control to the Tennessee and Columbia River Valleys—some of the worst affected regions during the Depression. These also established a permanent federal presence in the generation of electrical power and offered subsidized electricity to farmers in the region.

Nevertheless, criticism of New Deal programs continued, especially after a second wave of legislative reforms in 1935. In 1937, Roosevelt introduced a plan that would have granted him the right to appoint additional justices to the Supreme Court. Opponents argued that such policies were intended to pack the court with friendly judges and overturn previous decisions that had declared New Deal programs unconstitutional. The bill did not get through Congress.

The Great Depression was followed by a recession in 1937, and unemployment rose again. By late 1938, the New Deal had lost momentum both politically and economically. Before the U.S. economy fully recovered from the recession, the country entered World War II, when increased wartime spending and production made most programs unnecessary.

Experts assert that although the New Deal did not fundamentally turn around the U.S. economy, it addressed key issues such as unemployment, the banking system, and the stock market. Many New Deal programs, like Social Security, have become an accepted part of American life.

FURTHER RESOURCES

Books

Badger, Anthony J. The New Deal: The Depression Years, 1933–1940. Chicago: Ivan R. Dee, 2002.

Web sites

American Heritage Center, Inc. "About FDR." <http://www.fdrheritage.org/fdrbio.htm> (accessed May 20, 2006).

Busch, Andrew E. Ashbrook Center for Public Affairs at Ashland University. "The New Deal Comes to a Screeching Halt in 1938." <http://www.ashbrook.org/publicat/oped/busch/06/1938.html> (accessed May 20, 2006).

Eleanor Roosevelt National Historic Site. "Public Works Administration." <http://www.nps.gov/elro/glossary/pwa.htm> (accessed May 20, 2006).

Library of Congress. "Great Depression and World War II, 1929–1945." February 2, 2004 <http://memory.loc. gov/learn/features/timeline/depwwii/newdeal/newdeal.html> (accessed May 20, 2006).

Maryland Center for Civic Education. "The Stock Market Crash and the Great Depression, 1929–1941." <http://www.marylandciviceducation.org/lessons/depression.htm> (accessed May 20, 2006).