Volume 16 , Issue 9

The New Deal (3/4/1933)

ay some will remember back to 1933, March 4, when President Franklin Roosevelt took the oath of office to become the 32nd president of the United States of America. The country was in the midst of the worst economic crisis in its history, with the onset of the Great depression initiated by the crash of the stock market in the Fall of 1929, and over $75 billion in equity capital had been lost on Wall Street. FDR's Inaugural Address, 4 March 1933





It was also a time when over 13 million people (nearly 25% of the workforce) were unemployed. The job rate in Chicago had climbed to 40%. In Detroit they saw a staggering 50%.

In rural America thousands of tons of unmarketable crops sat rotting in grain storage bins, while farm income plummeted and thousands of families were forced to abandon their homesteads. More than 11,000 banks had closed their doors, and the U.S. banking system had all but ceased to function.

FDR's response to this crisis was to inflate 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 grip of FDR advisors brought in from academia and industry known as the "Brains Trust." In their first hundred days in office, they helped FDR enact fifteen major laws. 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 on the willingness of the American people to once again place their faith, and money, in their local banks. FDR gave many "fireside chats" on the radio to convoke the American people the crisis was over and that their deposits, backed by the newly established FDIC (Federal Deposit Insurance Corporation) were safe.

Some might remember the CCC (Civilian Conservation Corps), and the Agricultural Adjustment Administration (AAA), along with the WPA (Works Progress Administration). The most famous measure of the New Deal was the 1935 Social Security Act, which led to the establishment of the Social Security Administration and the creation of a national system of old age pensions and unemployment compensation.

Social Security also granted federal financial support to dependent children, the handicapped, and the blind. The New Deal also saw to the establishment of a number of significant regulatory agencies, Securities and Exchange Commission (SEC), which was set up to stave off a further crash of the Stock Market. The Federal Housing Administration (FHA) ultimately made home ownership affordable for millions of average Americans. The National Labor Relations Board, the Civil Aeronautics Authority, and the Federal Communications Commission were also established.

New Deal Legislation

March 9 - Emergency Banking Act
March 20 - Government Economy Act
March 22 - Beer-Wine Revenue Act
March 31 - Creation of Civilian Conservation Corps
April 19 - Abandonment of Gold Standard
May 12 - Federal Emergency Relief Act
May 12 - Agricultural Adjustment Act
May 12 - Emergency Farm Mortgage Act
May 18 - Tennessee Valley Authority Act
May 27 - Securities Act
June 5 - Abrogation of Gold Payment Clause
June 13 - Home Owners Loan Act
June 16 - Glass-Steagall Banking Act
June 16 - National Industrial Recovery Act
June 16 - Emergency Railroad Transportation Act
June 16 - Farm Credit Act

The New Deal did much to lessen the worst affects of the Great Depression. Its measures were not sweeping enough to restore the nation to full employment, though. Critics of FDR's policies, on both the right and left, used this fact as reason to condemn it. Conservatives argued that it went too far, and brought too much government intervention in the economy. Those on the left argued that it did not go far enough, and that in order to be truly effective, the Roosevelt Administration should have engaged in a far more comprehensive program of direct federal aid to the poor and unemployed.

The New Deal's greatest achievements transcended mere economic statistics. The New Deal offered hope and restored the faith of the American people in their representative institutions. It also transformed the federal government into an active instrument of social justice and established a network of laws and institutions designed to protect the American economy from the worst excesses of liberal capitalism.

It restored the confidence of a deeply discouraged population. FDR used the media, particularly the radio communication with the American people through his Fireside chats, while restoring the spirit of the nation as he worked to lift the economy out of the Great Depression.   |  View or Add Comments (0 Comments)   |   Receive updates ( subscribers)  |   Unsubscribe

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