THE NEW DEAL
FDR’s Answer to the Great Depression
“THE ONLY THING WE
HAVE TO FEAR, IS
FEAR ITSELF”
– FRANKLIN DELANO ROOSEVELT, 1933 -
The New Deal
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1933 – 1938
FDR was willing to
experiment – it was
better to try something
and have it fail, than to
sit and do nothing at all
Focus on relief,
recovery, and
reform
Deficit Spending

Roosevelt’s plans would
require the government to
spend more than it took in
in taxes, creating a
national deficit

Roosevelt assured Congress
that the deficit was an
emergency measure which
would be temporary (it wasn’t)
John Maynard Keynes
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1883 – 1946
British economist who
argued that the best
way to end an economic
recession was through
government spending
programs which create
a national debt
The First Hundred Days

Between March 9 &
June 16, 1933 (FDR’s
first 100 days in office)
he got Congress to pass
15 major acts which
launched his New
Deal reforms
Emergency Banking Relief Act
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Upon assuming office, FDR declared a
federal banking holiday and closed all
banks and called Congress into a
special session
Both houses of Congress passed the
Emergency Banking Relief Act in a single
afternoon
The act called for all banks to be
assessed for credit-worthiness by the US
government and banks found to be
stable enough were issued special
federal licenses to operate
Fireside Chats
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Roosevelt then went on the radio
and assured Americans that it
was safe to put their money back
in these newly licensed banks
Americans believed him and
stopped withdrawing their money
from the banking system and
began resuming deposits
Throughout his presidency, FDR
would keep America informed of
his intentions and progress through
these radio-broadcast “fireside
chats”
Securities Act
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1933
Required all securities sold in
the US to be registered with
the US government
Required companies which
sold stocks and bonds to
provide complete and truthful
information to investors
Securities and Exchange Commission

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
Created in 1934
Government agency which
enforces the Securities Act
Responsible for supervising
companies in US which deal
in securities (stocks, bonds,
and other financial
investments)
Glass-Steagall Act
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1933
Separated commercial banking
(everyday banks that accept
deposits, make mortgage loans,
etc.) from investment banking by
banning commercial banks from
risking customers deposits with
investments in the stock market
Established the FDIC
Federal Deposit Insurance Company
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FDIC
Designed to boost Americans’
confidence in banks
Government program which
insures bank deposits up to
$250,000 per person per bank
Also supervises all banks in the
US to ensure that they are stable
and manages the assets of any
banks which fail
Civilian Conservation Corps

1933 - 1942

Government agency which offered
work to unemployed men
between 17 and 25 in the
forestry service
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Workers planted trees, fought forest
fires, and built drinking water
reservoirs
Workers lived in special camps and
earned $30 per month
Over 3 million men worked for the
CCC over its 9 years
Federal Emergency Relief Administration
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1933
Created by the Federal Emergency
Relief Act
Provided work for over 20 million
by giving over $3 billion to state
and local governments so they could
create jobs for unskilled labor
Many of these jobs were in
manufacturing consumer goods for the
needy – canning fruits & vegetables,
making mattresses and bedding,
distributing surplus food to the hungry
Replaced by the WPA in 1935
Civil Works Administration
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1933 – 34
Part of FERA
Provided short-term work
to 4 million
Built sewers and other
sanitation systems, roads,
airports, and over 40,000
schools
Spent over $1 billion in
just over 5 months
Works Progress Administration
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1935 – 1943
Largest New Deal organization,
at one time it was the largest
single employer in the US
Spent over $11 billion
Government program designed
to provide jobs to unskilled
laborers
Constructed many government
buildings
Also hired artists, writers, and
others who were paid to expand
US cultural arts
National Recovery Administration
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1933 - 1935
Created by the National Industrial
Recovery Act (NIRA)
Mission was to stabilize prices for
manufactured goods and prevent
any more businesses from failing
Helped create codes of fair
competition and reductions in
competition
Struck down as unconstitutional
by the Supreme Court in case of
Schechter v. US in 1935
Public Works Administration
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1933 - 1939
Created by the NIRA
Government agency which
created jobs for skilled workers
through large-scale public
works projects, such as the
construction of dams, bridges,
and highways
Spent over $6 billion
PWA = Power to the people
Tennessee Valley Authority
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1933 - Today
Built dams in the South to
create jobs, bring electric
power, and provide flood
control to some of the poorest
and most rural parts of the
nation (Appalachian
Mountains)
National Labor Relations Board
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1935 - Today
Created by the National Labor
Relations Act (also called the
Wagner Act)
Designed to monitor unfair
management practices, monitor
labor unions, and act as an
arbitrator between
management and unions
Social Security Administration
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1935 - Today
Provides retirement income for all
workers once they reach age 65;
also provides payments to needy
children and people with
permanent disabilities
Also included the first form of
unemployment insurance
All of this is paid for through a
payroll tax which every worker in
America pays
Fair Labor Standards Act

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1938
Raised minimum wage to
$.40/hour

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Set maximum number of
work hours at 44
hours/week
Required payment of
overtime wages
Banned child labor for those
under 16 years of age
Agricultural Adjustment Administration
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1933
Provided government loans
to farmers
Paid farmers to not grow
crops in order to reduce
supply and push up crop
prices
Program saved American
farmers from ruin, but
angered consumers because
it increased the price of
food
Home Owners’ Loan Corporation
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1933 – 1935
Created to save homeowners
from eviction
US government bought mortgages
from banks and then restructured
them with lower interest rates and
longer terms
About 10% of home owners in the
US had mortgages with the HOLC
Still, thousands could not make
even the adjusted payments and
the HOLC foreclosed on many
homes
Farm Credit Administration
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Farmers’ version of the
HOLC
Helped farmers
refinance the
mortgages on their
farms
Saved thousands of
family farms
FDR Faces Opposition…
Huey Long
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1893 – 1935
Very popular Democratic
Senator from Louisiana
Head of a powerful (and
corrupt) political machine
Ran a “Share Our Wealth”
campaign which called for taxes
on the rich to pay for programs
to help the poor
Assassinated in 1935
Father Charles Coughlin
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1891 – 1979
Catholic priest who used his weekly
radio show to call on FDR to do
more to help the poor, such as
raising taxes on the wealthy and
nationalization of the banking
industry
During WWII, he was arrested for
violation of the Espionage Act for
his continued criticisms of FDR and
the Catholic Church ordered him to
end his radio program
Dr. Francis Townsend
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1867 – 1960
Proposed in his Townsend Plan
that the government provide all
citizens over 60 with a
$200/month pension with the
requirements that they must retire
(creating jobs for young people)
and must spend the entire $200
each month (which would boost
the economy)
Townsend Plan gained
widespread support among the
elderly and increased political
activism among seniors
The Supreme Court

Starting in 1935, the
Supreme Court began
attacking Roosevelt’s New
Deal programs, striking
down several as
unconstitutional
Agricultural Adjustment Act
 National Industrial Recovery
Act
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These attacks worried
Roosevelt, prompting him to
take action to swing the
Court in his favor
FDR’s Court Packing Scheme
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FDR proposed a bill to Congress which
would allow the President to appoint
extra Justices to the Supreme Court
anytime a Justice had served 10 years or
had passed the age of 70
This would have allowed FDR to appoint 6
new justices almost immediately, ones who
would have supported his New Deal
programs
Congress refused to expand the Court,
but the Supreme Court sensed the danger
and did not attack any more New Deal
programs
The Legacy of the New Deal

The New Deal did not end the Depression
 BUT,
the New Deal did give many Americans a stronger
sense of security and stability during the Depression
 Business
leaders, farmers, laborers, consumers and
homeowners looked to the government to protect their
interests.
 Broker
state- the federal govt assumed a new role of
balancing and mediating the competing economic interests
of businesses, farmers, workers, and consumers
 The broker role has continued ever since the New Deal
policies of the 1930s
US as a “Welfare State”
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
FDR’s New Deal programs also
began to shift spending
priorities in the budget
As Americans became used to
the idea of government
assistance for the needy, more
and more of the federal budget
was spent on public welfare
programs