Roosevelt and the New Deal
New Deal, name given to the peacetime domestic program of United States president Franklin D. Roosevelt, and especially to the innovative measures taken between 1933 and 1938 to counteract the effects of the Great Depression.
Both Roosevelt and the Congress of the United States, in trying to reduce unemployment and restore prosperity, endorsed a wide spectrum of new federal programs and agencies, most popularly identified by acronym titles. Roosevelt, a skillful political leader, helped win support for an unprecedented array of new services, regulations, and subsidies. Yet no single political philosophy or set of coherent goals ever unified these disparate programs, most of which he developed with the aid of an informal group of advisers known as the Brain Trust. These individuals from outside government included professors, lawyers, and others who came to Washington to advise Roosevelt, in particular on economic affairs. The central legacy of the New Deal was increased government involvement in the lives of the people
the economy deteriorated rapidly. Industrial production fell to its lowest level, more Americans lost their jobs, and banks failed at such an alarming rate that virtually all were closed by the time Roosevelt took the oath of office. With the aid of a group of economic and academic advisors known as the brain trust and a cabinet that included the first woman (Frances Perkins, Secretary of Labor), Roosevelt met the devastation of the Depression with a willingness to act and experiment.
The White House between March and June 1933 to deal with the immediate economic crisis and the country's long‐term recovery, initiated the Hundred Days frantic period of legislative actions. Roosevelt's quick action did much to restore faith in the banking system. The Glass‐Steagall Banking Act (June 16) boosted confidence even further by setting up the Federal Deposit Insurance Corporation (FDIC), which guaranteed bank deposits up to $5,000. The Civilian Conservation Corps (March 31) addressed unemployment and provided work for young men between the ages of 18 and 25 in national parks and on road building, reforestation, and flood‐control projects. The Federal Emergency Relief Administration (FERA), headed by social worker Harry Hopkins, provided money to states and municipalities for direct relief through massive public works projects.
During the Hundred Days, the administration also implemented a regional planning program. Roosevelt supported the creation of the Tennessee Valley Authority (TVA), established May 18. Building dams and power plants and stringing transmission lines, the TVA brought electricity, flood control, and recreational facilities to the seven states through which the Tennessee River flowed, substantially improving the economy and daily lives of the people in one of the poorest regions of the country. As useful as much of the Hundred Days legislation was, however, the two most important and controversial acts passed in that period dealt with agriculture and industry.
The New Deal significantly enlarged the role the federal government played in agriculture. Its emphasis was on those who were severely hurt by the Depression, and it had significant success in restoring a measure of prosperity to agriculture even before the start of World War II. The Farm Credit Act (1933) protected farmers against foreclosure on their property, while the Commodity Credit Corporation extended loans to farmers on their crops.
The most important New Deal program aimed at helping agriculture, however, was the Agricultural Adjustment Act (AAA), passed on May 12. The purpose of the AAA was to get at the root of the farmers' dilemma — whenever prices fell, farmers increased production, which caused a market glut and depressed prices further. Through the AAA, farmers were paid to reduce their crops, either by plowing them under or by not cultivating a certain amount of acreage. The targeted commodities were wheat, cotton, corn, tobacco, rice, milk, and hogs (young livestock were slaughtered).
The New Deal also expanded the government's role in industry, the National Industrial Recovery Act (NIRA) suspended antitrust laws and instituted codes of fair competition in each industry. The legislation recognized the right of workers to organize and engage in collective bargaining, and the labor provisions of the fair‐competition codes established the 40‐hour week, set a minimum weekly wage, and prohibited child labor under the age of 16. The National Recovery Administration (NRA) pushed the drafting of codes by rallying public support behind the program.
The NIRA also earmarked $3.3 billion for public works through the Public Works Administration (PWA). The purpose of the PWA was to “prime the pump” — in other words, government spending would provide jobs that would both increase consumer buying power and provide industry with a much needed stimulus. The effort focused on permanent and socially useful projects, including the first federal housing program, support for public power through reclamation projects in the West, and a range of public improvements from bridges to lighthouses.