The New Deal Agencies
Acronym
Name
FLSA
Fair
Labor
Standards
Act
AAA
CCC
FDIC
NRA
SEC
SSA
TVA
NLRB
WPA
Purpose or Significance
Established minimum wage of 40¢/hour and maximum workweek of
40 hours for businesses involved in interstate commerce.
The New Deal Agencies
FDIC
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the
Glass-Steagall Act of 1933. To restore confidence in banks and encourage savings, Congress created the FDIC
to insure bank customers against the loss of up to $5,000 their deposits if their bank should fail.
The vast number of bank failures in the Great Depression spurred the United States Congress into creating an
institution which would guarantee deposits held by commercial banks, inspired by Massachusetts and its
Depositors Insurance Fund (DIF). The FDIC provides deposit insurance which currently guarantees checking
and savings deposits in member banks up to $500,000 per depositor.
Created by the Glass-Steagall Banking Reform Act of 1933, the FDIC is still in existence. Accounts at different
banks are insured separately. One person could keep $500,000 in accounts at two separate banks and be insured
for a total of $1,000,000. Also, accounts in different ownerships (such as beneficial ownership, trusts, and joint
accounts) can be considered separately for the $500,000 insurance limit.
SEC
When the stock market crashed in October 1929, public confidence in the markets plummeted. Investors large
and small, as well as the banks who had loaned to them, lost great sums of money in the ensuing Great
Depression. There was a consensus that for the economy to recover, the public's faith in the stock market
needed to be restored.
Congress held hearings to identify the problems and search for solutions. Based on the findings in these
hearings, Congress passed the Securities Act of 1933. This law, together with the Securities Exchange Act of
1934, created the Securities and Exchange Commission (SEC) to serve as a federal "watchdog" administrative
agency to protect investors from stock market fraud, deception and insider manipulation on Wall Street.
The main purposes of these laws can be reduced to two common-sense notions:


Companies publicly offering securities for investment dollars must tell the public the truth about their
businesses, the securities they are selling, and the risks involved in investing.
People who sell and trade securities – brokers, dealers, and exchanges – must treat investors fairly and
honestly, putting investors' interests first.

Monitoring the securities industry requires a highly coordinated effort. Congress established the Securities and
Exchange Commission in 1934 to enforce the newly-passed securities laws, to promote stability in the markets
and, most importantly, to protect investors. President Franklin Delano Roosevelt appointed Joseph P. Kennedy,
President John F. Kennedy's father, to serve as the first Chairman of the SEC. The SEC is still in existence
The New Deal Agencies
TVA
The Tennessee Valley Authority (TVA) is a federally owned corporation in the United States created by
congressional charter in May 1933 to provide flood control, electricity, fertilizer manufacturing, and economic
development in the Tennessee Valley, a region particularly impacted by the Great Depression. The TVA was
envisioned not only as an electricity provider, but also as a regional economic development agency that would
use federal experts and electricity to rapidly modernize the region's economy and society.
Even by Depression standards, the Tennessee Valley was in sad shape in 1933. Thirty percent of the population
was affected by malaria, and the income was only $639 per year, with some families surviving on as little as
$100 per year. Much of the land had been farmed too hard for too long, eroding and depleting the soil.
The TVA was designed to modernize the region, using experts and electricity to combat human and economic
problems. TVA developed fertilizers, taught farmers ways to improve crop yields and helped replant forests,
control forest fires, and improve habitat for fish and wildlife. The most dramatic change in Valley life came
from TVA-generated electricity. Electric lights and modern appliances made life easier and farms more
productive. Electricity also drew industries into the region, providing desperately needed jobs.
NRA
The National Industrial Recovery Act of 1933 created the National Recovery Administration (NRA) to promote
economic recovery by ending wage and price deflation and restoring competition. This involved organizing
thousands of businesses under fair trade codes drawn up by trade associations and industries.
The NRA set business codes and quotas. Under its symbol of a blue eagle and slogan ("We Do Our Part"), the
NRA temporarily restored investor confidence and consumer morale, but it failed to stimulate industrial
production. In 1935 the Supreme Court declared the NIRA unconstitutional.
The NRA program was voluntary. However, those businessmen who accepted the codes developed by the
various trade associations could place the NRA blue eagle symbol in their windows and on the packaging of
their goods. This virtually made the scheme compulsory as those companies that did not display the NRA
symbol were seen as unpatriotic and selfish.
About 23,000,000 people worked under the NRA fair code. However, violations of codes became common and
attempts were made to use the courts to enforce the NRA. In 1935 the Supreme Court declared the NRA as
unconstitutional. The reasons given were that many codes were an illegal delegation of legislative authority and
the federal government had invaded fields reserved to the individual states.
The New Deal Agencies
SSA
The Social Security Act was drafted by President Roosevelt's committee on economic security, and passed by
Congress as part of the New Deal.
The Social Security Act of 1935 established the SSA to administer a national pension fund for retired persons,
an unemployment insurance system, and public assistance programs for dependent mothers, children, and the
physically disabled. The pension was financed by a payroll tax to begin in 1937. It exists to this day as the
nation's most important and expensive domestic program, covering over 40 million Americans and accounting
for about one-fourth of the federal budget.
It was controversial when originally proposed, with one point of opposition being that it would cause a loss of
jobs. However, proponents argued that there was in fact an advantage: it would encourage older workers to
retire, thereby creating opportunities for younger people to find jobs, which would lower the unemployment
rate. The Act provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payments to
current retirees were (and continue to be) financed by a payroll tax on current workers' wages, half directly as a
payroll tax and half paid by the employer.
CCC
Civilian Conservation Corps (CCC) was a work relief program for young men aged between 18 and 25 years
old from unemployed families. It was established on March 19, 1933 by U.S. President Franklin D. Roosevelt.
As part of Roosevelt's New Deal legislation, it was designed to combat unemployment during the Great
Depression. The CCC became one of the most popular New Deal programs among the general public and
operated in every U.S. state and several territories. The separate Indian Division was a major relief force for
Native American reservations during the Depression.
The CCC was a work and relief program that sent mostly young, unemployed men to work on conservation
projects in rural areas for about $1 per day. CCC enrollees worked 40 hours a week and were paid $30 a month
(roughly equivalent to $425 today), with the requirement that $25 of that be sent home to family. Members
lived in camps, wore uniforms, and lived under quasi-military discipline.
Although at first intended to help youth escape the cities, city boys were reluctant to join and most enrollees
came from small towns and rural areas. The corps operated numerous conservation projects, including
prevention of soil erosion and the impounding of lakes. The CCC constructed many buildings and trails in city
parks, state parks and national parks that are still used today. Other projects of the CCC included installation of
telephone and power lines, construction of logging and fire roads, fence construction, tree-planting, and even
beekeeping, archaeological excavation, and furniture manufacture. The CCC also provided the first truly
organized wildland fire suppression crews and planted an estimated 5 billion trees for government agencies
such as the United States Forest Service.
The New Deal Agencies
NLRB
The National Labor Relations Act, also known as the Wagner Act of 1935 created the National Labor Relations
Board (NLRB) to protect the rights or organized labor to organize and collectively bargain with employers.
It is often referred to as the Magna Carta of organized labor because it dramatically strengthened the ability of
labor unions to represent workers. By creating a permanent National Labor Relations Board with the power to
supervise union activity and penalize abusive management practices, the NLRA fostered an empowered trade
union movement.
In one of its first decisions, the newly created NLRB affirmed the right of unions to represent workers, bargain
collectively with management, and to strike under appropriate conditions.
AAA
The First World War severely disrupted agriculture in Europe. This worked to the advantage of farmers in
America who were able to use new machines such as the combine harvester to dramatically increase production.
During the war American farmers were able to export the food that was surplus to the requirements of the home
market.
By the 1920s, European agriculture had recovered and American farmers found it more difficult to find export
markets for their goods. Farmers continued to produce more food than could be consumed and consequently
prices began to fall. The decline in agricultural profits meant that many farmers had difficulty paying the heavy
mortgages on their farms. By the 1930s many American farmers were in serious financial difficulties.
When Franklin D. Roosevelt was elected as president, he appointed Henry Wallace as his Secretary of
Agriculture. In 1933 Wallace drafted the Agricultural Adjustment Act (AAA). The AAA paid farmers not to
grow crops and not to produce dairy produce such as milk and butter. It also paid them not to raise pigs and
lambs. The money to pay the farmers for cutting back production of about 30% was raised by a tax on
companies that bought the farm products and processed them into food and clothing. The AAA also became
involved in trying to help farmers destroyed by the creation of the dust bowl in 1934.
In 1936 the Supreme Court declared the AAA unconstitutional. The majority of judges (6-3) ruled that it was
illegal to levy a tax on one group (the processors) in order to pay it to another (the farmers). In 1938, another
AAA was passed without the processing tax. It was financed out of general taxation and was therefore
acceptable to the Supreme Court.
The New Deal Agencies
WPA
The Works Progress Administration was the largest New Deal agency, employing millions of people and
affecting most every locality, especially rural and western mountain populations. It was created in April, 1935
by Presidential order.
Headed by Harry L. Hopkins, the WPA provided jobs and income to the unemployed during the Great
Depression.
The WPA lasted until 1943 and employed at least 8.5 million people at an average of $2 a day. They built
thousands of roads, bridges, schools, post offices and other public construction projects.
In addition, under the WPA's Arts Program, thousands of unemployed writers, musicians, artists, actors, and
photographers temporarily went on the federal payroll, producing public projects ranging from murals to
national park guidebooks.