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Roosevelt and the New Deal, 1933-41 » The Second New Deal: Unions, Banks and Farmers

What you'll learn this session

Study time: 30 minutes

Edexcel spec: Paper 2 Section A, Investigation A3, Key topic 4

What the Wagner Act of 1935 did for workers and trade unions
How the Banking Act of 1935 changed the way the banks were run
How the Resettlement Administration, the Farm Security Administration and the Rural Electrification Administration helped farmers
How to answer a 6-mark “Describe two features” question

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The Wagner Act, 1935

Many American employers had long refused to deal with trade unions. They sacked workers who joined one, or set up their own “unions” that the bosses controlled. The National Labour Relations Act, often called the Wagner Act after Senator Robert Wagner who pushed it through Congress, was signed by Roosevelt on 5 July 1935. It was one of the main laws of the second New Deal.

Key terms:

Trade union: an organisation of workers that works together to win better pay and conditions.
Collective bargaining: workers negotiating with their employer as a group, through their union, rather than one by one.
National Labour Relations Board (NLRB): the independent body set up by the Act to enforce workers' rights.

The Act did three main things:

It gave workers the legal right to join a union and to bargain collectively.
It banned unfair practices by employers, such as sacking people for joining a union or running a union controlled by the company.
It set up the NLRB, which held fair elections so that workers could choose their union, and which could hear complaints against employers.

✅ Impact

Unions grew quickly after 1935. The Committee for Industrial Organisation (CIO), led by John L. Lewis, signed up workers in mass-production industries. In 1937 General Motors and US Steel agreed to deal with unions, and the Supreme Court ruled that the Act was lawful.

⚠️ Limits

Many employers fought the Act and strikes went on. The Act did not cover farm workers or domestic servants. It also protected workers' rights but did not set wages.

The Banking Act of 1935

The Emergency Banking Act of 1933 had reopened the banks, but the way the banking system was run still needed reform. The Banking Act of 1935, signed in August 1935, aimed to give the government more control over it.

Key term:

Federal Reserve: the central banking system of the USA, which influences how much money is available and how much it costs to borrow (interest rates).

It gave the Federal Reserve Board in Washington more power over the banking system and over interest rates, so that fewer decisions were left to the separate regional banks.
It made the government insurance of bank deposits (the Federal Deposit Insurance Corporation) permanent, so ordinary savers could trust that their money was safe.

The Act was less famous than the Wagner Act, but it helped to make the banking system steadier and more under public control.

Help for farmers

Farmers were still struggling in 1935. Tenant farmers and sharecroppers (poor farmers who worked someone else's land and paid with part of the crop) were hit hardest, and many had been pushed off the land. Two new agencies tried to help them.

🌾 Resettlement Administration, 1935

Led by Rexford Tugwell, it lent money to poor farmers and moved families from land that could not support them to better land. It also built camps for migrant farm workers.

🏡 Farm Security Administration, 1937

It took over from the Resettlement Administration. It gave low-cost loans to tenant farmers and sharecroppers so that they could buy land of their own, and it went on running the camps for migrant workers.

Rural electrification

In 1935 about nine out of ten farm homes in the USA had no electricity. Private power companies would not pay to run lines to farms far apart, because there were too few customers to make a profit. Farm families worked by oil lamp and by hand.

The Rural Electrification Administration (REA) was set up in 1935 to change this. It lent money to farmers' co-operatives and local groups so that they could build power lines themselves. Over the years that followed, electricity reached more and more farms. Families gained electric light and radios, and farmers could use electric pumps and milking machines, which saved time and hard work.

✅ Achievements

Farm life became easier, safer and less isolated, and many farms were connected that private companies would never have reached.

❌ Shortcomings

Connection took years, and poorer farmers still had to pay for wiring and for the electricity itself.

Common mistakes

Saying the Wagner Act made employers pay higher wages. It protected the right to join a union and bargain.
Mixing up the Banking Act of 1935 with the Emergency Banking Act of 1933. They were different laws, two years apart.
Mixing up the Resettlement Administration (1935) with the Farm Security Administration (1937), which replaced it.
Forgetting the limits: farm workers were left out of the Wagner Act, and many employers resisted it.

Exam-style question

Describe TWO features of EITHER the Wagner Act of 1935 OR the Rural Electrification Administration. [6 marks]

Model answer

I will answer on the Wagner Act. One feature was that it gave workers the legal right to join a union and bargain collectively. Employers could no longer sack people for joining a union or run a company-controlled union in its place, so workers could negotiate as a group.

A second feature was that it set up the National Labour Relations Board. This independent body held elections so that workers could choose their union, and it could hear complaints against employers who broke the law.

What lifts it to the top level: two separate features, each explained with accurate supporting detail.

Exam tip

Pick the option you know best. For each feature, name it in one sentence, then add one or two facts, such as who it helped or what the body could do.

Recap

The Wagner Act (5 July 1935) gave workers the right to join unions and bargain collectively, and set up the NLRB.
The Banking Act of 1935 gave the Federal Reserve Board more control and made deposit insurance permanent.
The Resettlement Administration (1935) and then the Farm Security Administration (1937) helped poor farmers with loans and land.
The Rural Electrification Administration (1935) lent money to bring electricity to farms.

Exam tip

For each law or agency, learn what it did, who it helped and one limit. That gives you two features for a “Describe” question.

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