The First New Deal

The Great Depression

What was the New Deal?

The New Deal was a series of domestic programs enacted in the United States between 1933 and 1938. The program focused on three fundamental factors: Relief, Recovery, and Reform. Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression.

The first 100 days

The american people were extremely dissatisfied with the crumbling economy, mass unemployment, declining wages, profit rates, and Hoover's policies such as the Tariff Act and the Revenue Act. Americans of all political persuasions were demanding immediate action, and Roosevelt responded with a remarkable series of new programs in the "first hundred days" of the administration, in which he met with Congress for 100 days. During those 100 days of lawmaking, Congress granted every request Roosevelt asked, and passed a few programs (such as the FDIC to insure bank accounts) that he opposed. Ever since, presidents have been judged against FDR for what they accomplished in their first 100 days.

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Causes:

From 1929 to 1933 manufacturing output decreased by one third. Prices fell by 20%, causing a deflation which made the repayments of debts much harder. Unemployment in the U.S. increased from 4% to 25%. Additionally, one-third of all employed persons were downgraded to working part-time on much smaller paychecks. In the aggregate, almost 50% of the nation's human work-power was going unused.


Characteristics:


The basic assumption of the New Deal was that the federal government would need to use all of its power to get the country out of the depression. The three basics of the New Deal were the three R's--relief, recovery, and reform. The immediate concern was to relieve the suffering, then help with recovery of business and industry by enacting new legislation and reform legislation to solve the economic problems that had caused the depression.



Significance:


The new deal expanded government intervention into new areas of social and economic affairs and the creation of more social assistance agencies at the national level. The relationship between the national government and the people changed drastically. The government took on a greater role in the everyday social and economic lives of the people.