New Deal

When President Franklin D. Roosevelt (1882–1945; served 1933–45) took office in March 1933, the nation was in the depths of the Great Depression (1929–41). Beginning with the stock market crash of October 1929, it was the worst economic distress the country had ever experienced. Millions of people struggled to survive every day, and as the nation's economy weakened, many lost their jobs, their savings, and their homes. Efforts by the previous president, Herbert Hoover (1874–1964; served 1929–33), had failed to improve economic conditions.

In the election of 1932, the nation elected Roosevelt with hopes that he would bring great changes. Within the first hundred days of being in office, Roosevelt sent Congress a flurry of legislation aimed at solving the nation's problems. The legislative plan was known as the New Deal.

Roosevelt's New Deal was initially effective. In 1937, however, the economy experienced another recession, and Roosevelt was moved to introduce more legislation. This is sometimes called his Second New Deal. The most influential pieces of legislation from both waves of the New Deal were aimed at providing relief, recovery, and reform to the United States.

Relief measures

Relief measures included programs designed by the president to assist farmers and unemployed workers who faced impossible financial challenges. They included the following legislation:

Federal Emergency Relief Administration (FERA, 1933): Provided grants to states in which relief agencies had run out of money. The Civil Works Administration (CWA) was later added to the program to provide temporary work relief.

Agricultural Adjustment Act (May 1933): Established programs, including the Agricultural Adjustment Administration, to stabilize and raise prices for farm products. It provided subsidies to farmers who were told to reduce crop production by leaving part of their land idle. Money to pay the farmers was raised by a tax on companies that purchased farm products to further process into food and clothing. The Supreme Court ruled that this aspect was unconstitutional in 1936. The majority of judges ruled that it was illegal to levy a tax on one group in order to pay another. Congress therefore passed further legislation that restored some of the act's provisions to encourage soil conservation, balanced prices, and food reserves. Among them was the Soil Conservation and Domestic Allotment Act (1936). It allowed the government to pay benefits to farmers who planted soil-building crops rather than staple crops.

Civilian Conservation Corps (CCC, 1934): Employed millions of young men to work in camps at federal lands. “Roosevelt's Tree Army” restored historic sites, built park facilities, cleaned reservoirs, and planted trees.

Works Progress Administration (WPA, 1935): Established a work relief program that employed millions of people. Men built and renovated bridges, public buildings, and roads. Women were generally employed in child-care or handicrafts, such as sewing. Art, theater, and writers projects employed artists for preserving the cultural uniqueness of the United States. The WPA was dismantled in 1941 at the start of World War II (1939–45).

Recovery measures

Roosevelt designed recovery measures to normalize economic activity and to restore faith in the banking system. They included the following legislation:

Emergency Banking Act (1933): Required banks to pass a Treasury Department inspection before reopening. In response to the nation's banking crisis, Roosevelt had declared a mandatory bank holiday until this first piece of New Deal legislation could be passed. It was successful in restoring confidence in the banking system.

National Industrial Recovery Act (1933): Established the Public Works Administration (PWA), which paid private firms to construct major public works, including airports, dams, bridges, warships, schools, and hospitals.

Tennessee Valley Authority (TVA, 1933): An ambitious project that built a series of dams at the Tennessee River. The dams served to revitalize a broad region of the Southeast by generating electricity and controlling flooding in the valley. Success of the TVA led to a similar project in the Pacific Northwest, the Rural Electrification Administration (1935).

Resettlement Administration (1935) and Farm Security Administration (1937): Provided loans to help farmers relocate to better land.

Reform measures

Reform measures were designed by the president to protect consumers by regulating businesses and providing assistance to the elderly and unemployed. They included the following legislation:

Truth in Securities Act (1933): Required corporations to provide the public with accurate and complete information concerning corporate securities, or shares of stock in corporations.

Glass-Steagall Act (1933): Enabled the government to regulate irresponsible speculation by banks. It established the Federal Deposit Insurance Corporation (FDIC), which guarantees all bank deposits up to a certain amount of money.

National Industrial Recovery Act (1933): Established the National Recovery Administration (NRA). It called for every business to abide by a temporary code that provided a minimum wage, a maximum workweek, and no child labor . Those who chose to follow the code displayed the symbol of the Blue Eagle in their windows. It also gave workers the right to form unions, but had no mechanism for enforcement of the right. The U.S. Supreme Court eventually nullified NRA legislation, and the program, which was failing anyway, was abolished.

Securities and Exchange Commission (SEC, 1934): Established the SEC as a stock market watchdog.

National Labor Relations Act (Wagner Act, 1935): Established the National Labor Relations Board . It gave workers federal protection for organizing unions and required employers to recognize unions.

Social Security Act (SSA, 1935): Established several social welfare programs to assist the elderly, unemployed, and handicapped citizens. It established a pension for those over sixty-five, funded through an employment tax. It also provided unemployment compensation and governmental support for the handicapped and for single mothers with dependent children.

Fair Labor Standards Act (1938): Established the minimum wage and maximum work week and abolished child labor.

Legacy of the New Deal

President Roosevelt's New Deal allowed the federal government to assume new responsibility for the welfare of the people. In some cases, the Supreme Court decided New Deal programs were unlawful. Other programs were meant to provide just temporary relief in the midst of the Great Depression.

The New Deal helped alleviate problems caused by the Great Depression. The depression did not end, however, until the American economy recovered by providing equipment and supplies for World War II. Though many parts of New Deal legislation did not last beyond the war, several New Deal programs, including the Social Security Act and the National Labor Relations Board, survived into the twenty-first century.