The New Deal

A Significance of The Great Depression

Sarah Hyden, Sierra Latshaw, Martha Vertti

Significance: The New Deal improved the lives of many Americans, as it reformed several aspects in society while working to improve the economy through the sponsorship of public projects and the protection of workers.

The New Deal: Crash Course US History #34

Definition

FDR's response to this unprecedented crisis was to initiate the "New Deal" — a series of economic measures designed to alleviate the worst effects of the depression, reinvigorate the economy, and restore the confidence of the American people in their banks and other key institutions. The New Deal was orchestrated by a core group of FDR advisors brought in from academia and industry known as the "Brains Trust" who, in their first "hundred days" in office, helped FDR enact fifteen major laws. The measures were, in essence, a series of domestic programs enacted in the United States between 1933 and 1938, and a few that came later. The programs were in response to the Great Depression, and focused on what historians call the "3 Rs": Relief, Recovery, and Reform. That is, 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 Great Depression Brings about the New Deal

Detail

  • The New Deal included both laws, passed by Congress, as well as presidential executive orders during the first term (1933–37) of President Franklin D. Roosevelt. The New Deal itself created millions of jobs and sponsored public works projects that reached most every state in the nation. Also, in addition to setting a minimum wage and the maximum hours a person could work in a week, the National Recovery Administration outlawed child labor. The Social Security act was implemented to aid healthcare especially of the elderly and disabled. The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers.


  • During the Great Depression Franklin Delano Roosevelt was the US President. On March 5, 1933, he proclaimed Bank Holiday, which shut down the banking system for a period of four days (5th-8th). During this period, he sought to identify the banks people should be confident using. Then he put money from the government into the banks and when banks reopened, people were standing in line to put their hoarded money in.

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The Emergency Banking Act was introduced on March 9, 1933, to a joint session of Congress and was passed the same evening amid an atmosphere of chaos and uncertainty as over 100 new Democratic members of Congress swept into power determined to take radical steps to address banking failures and other economic malaise. The EBA was one of Mr. Roosevelt's first projects in the 100 days. The sense of urgency was such that the act was passed with only a single copy available on the floor and most legislators voted on it without reading it. Within two weeks, Americans had redeposited more than half of the currency that they had stored away before the bank suspension.The stock market followed suit as well. On March 15, 1933, the first day of trading after the extended closure, the New York Stock Exchange recorded the largest one-day percentage price increase ever. The nationwide Bank Holiday and the Emergency Banking Act of March, 1933, ended the bank runs that had plagued the Great Depression. This act was a temporary response to a major problem. The 1933 Banking Act passed later that year presented elements of longer-term response, including formation of the Federal Deposit Insurance Corporation (FDIC).
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Indeed, one of the most significant of these was the Banking Act of 1933, which finally brought an end to the panic that gripped the nation's banking system. The success of the Banking Act, depended in large measure on the willingness of the American people to once again place their faith—and money—in their local banks. To ensure this, FDR turned to the radio, and in the first of his many "fireside chats," convinced the American people the crisis was over and that their deposits—backed by the newly established the Federal Deposit Insurance Corporation (FDIC) — were safe.
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  • In a measure that garnered substantial popular support for his New Deal, Roosevelt moved to put to rest one of the most divisive cultural issues of the 1920s. He signed the bill to legalize the manufacture and sale of alcohol, an interim measure pending the repeal of Prohibition, for which a constitutional amendment of repeal was already in process. The repeal amendment was ratified later in 1933. States and cities gained additional new revenue, and Roosevelt secured his popularity especially in the cities and ethnic areas by helping the beer start flowing.

  • Additional relief was felt due to other components of the New Deal. For example, a bill was passed to pay commodity warmers, those who produced wheat, dairy, tobacco, and corn, to produce less food in order to get rid of agricultural surplus and increase prices. The Tennessee Valley Act brought about government-build dams in the Tennessee river, which provided cheap hydroelectric power and controlled flooding

  • Roosevelt created the Works Progress Administration in order to give jobs to the massive amount of unemployed Americans. This allowed for people to earn wages and pay for goods which would stimulate the economy. The WPA also gave work to directors, artists, and actors in order to stimulate American culture.
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Public Works- To further cut unemployment, the NIRA created the Public Works Administration (PWA), a major program of public works, which organized and provided funds for the building of useful works such as government buildings, airports, hospitals, schools, roads, bridges, and dams. From 1933 to 1935 PWA spent $3.3 billion with private companies to build 34,599 projects, many of them quite large. Under Roosevelt, many unemployed people were put to work on a wide range of government financed public works projects, building bridges, airports, dams, post offices, courthouses, and thousands of miles of road. Through reforestation and flood control, they reclaimed millions of hectares of soil from erosion and devastation. As noted by one authority, Roosevelt's New Deal "was literally stamped on the American landscape"

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The New Deal for Dummies: FDR's Alphabet Agencies -- US History Review