The First New Deal
The First One Hundred Days
Relief, Recovery and Reform
"More history had been made during these 15 weeks than in any other comparable peace time period." This comment in a
magazine on the "New Deal" was not an exaggeration. In one hundred days, from March 9 to June 16, 1933, Roosevelt
prompted Congress to pass fifteen major pieces of legislation. In addition, a number of programs were started with executive
orders. Read the following and look for answers to these questions: How did Roosevelt try to combat the Depression? How did
his measures differ from those of President Hoover? How was the power of the federal government being used?
Emergency Banking Act - After the President's temporary closing of the banks, the Treasury Department was given the power to
decide when a bank could reopen. The movement of gold was put under the President's control. The banking act was prepared,
by Hoovers advisors. On Sunday following passage of the act, the President made a speech on the radio, the first series of
"fireside chats," telling people that it was safe for them to put their money back in approved banks. They did. Deposits were
greater than withdraws in every city.
Economy Act- To fulfill a campaign promise that called for a cut in federal spending, veterans' pensions were cut in half to save
400 million dollars. Salaries of federal government employees were also cut by 100 million dollars. This was one of the few New
Deal laws that decreased spending.
Beer Act- This popular law made the sale of beer and wine legal. This law was a step toward the end of Prohibition. The 18th
Amendment was repealed on December 5, 1933.
Agricultural Adjustment Act (AAA)- The act set up a system whereby the government paid farmers not to grow crops, thus
raising farm prices and reducing surpluses. With the related Emergency Mortgage Act, the government was authorized to
refinance farm mortgages, preventing foreclosures. An amendment to the act gave the President the power to print more paper
money in the hopes that inflation (more money circulating and rising prices) might help end the Depression.
Civilian Conservation Corps (CCC)- The CCC initially gave jobs to 250,000, and eventually to 2.5 million unemployed single men
between the ages of 18 and 25. Living in camps set up in parks and forests, the young men planted trees, built dams and
bridges, restored historic sites, cleared beaches, and in many more ways improved and reclaimed natural resources.
Federal Emergency Relief Act- Five hundred million dollars in loans and grants were given to the states to use in providing
emergency relief payments to the unemployed. Many men and women were able to move from direct relief to the work relief
programs of the Civil Works Administration (CWA) and to the Public Works Administration (PWA). These programs used federal
funds to hire unemployed people for public works projects. Under these work programs, 250,000 miles of roads and streets
were repaired, over 1000 airfields were built or improved, and millions of public records were saved.
Farm Credit Act - This law created an agency to centralize all farm credit services. The Farm Credit Administration refinanced
one-fifth of all farm mortgages.
"Truth in Securities" Act- This law required sellers of securities (stocks and bonds) to make public important information about
the nature of these securities. It also gave power to the Federal Trade Commission to block the sale of misrepresented
securities and imposed stiff civil and criminal penalties for violators.
Tennessee Valley Authority (TVA)- The TVA was a public corporation created to operate a power plant in Muscle Shoals,
Alabama, on the Tennessee River. It also was supposed to determine the fairness of power rates and to develop the Tennessee
Valley area through flood control and conservation and by generating and selling electricity. The TVA received much criticism
over the years because the government was actively competing with private industry.
Home Owners' Loan Act- Modeled on the Farm Credit Act, this law formed the Home Owners' Loan Corporation (HOLC) to
refinance individual home mortgages at low interest for up to fifteen years. Thousands of home owners threatened with
foreclosure or eviction were saved by HOLC loans. The HOLC eventually helped refinance one-fifth of all mortgaged urban
homes.
Railroad Coordination Act- This act attempted to rescue the depressed railroad industry by enforcing consolidation, rate-making
reforms, and other economy measures. The goal, never realized, was a coordinated transportation system.
National Industrial Recovery Act (NIRA)- In perhaps the most far reaching of all the laws, Congress gave the President power to
manage the nation's business life. To stimulate the recovery of private business and to spread work among as many men and
women as possible, Roosevelt established the National Recovery Administration (NRA). Businesses were to plan together,
without fear of anti-trust suits, to set up codes for making, marketing and pricing goods and to work with the unions to
determine minimum wages and maximum hours. The act also established a 3.3 billion dollar public works programs. The NRA
was supposed to regulate wages, working hours, and prices, as well as established recognition of trade unions. The act was
declared unconstitutional in 1935 on the grounds that Congress did not have the right to delegate its lawmaking privileges to the
President.
Glass-Steagall Banking Act- The law forced commercial banks out of the investment business. The Federal Deposit Insurance
Corporation (FDIC) insured bank deposits up to $5,000.
The Second New Deal
Some historians label Roosevelt's legislative program in 1935 the "Second New Deal". The President's State of the Union
Address in January of 1935 foreshadowed what was to come. In his message Roosevelt said, "In spite of our efforts and in spite
of our talk, we have not weeded out the over privileged and have not effectively lifted up the underprivileged." As you read the
following, look for answers to these questions: How did the Second New Deal differ from the first? What specific factors
seemed to motivate Roosevelt to make these proposals?
Works Progress Administration (WPA) – 1935 The WPA was organized to provide jobs for the unemployed on public projects of
many sorts. Included were the National Youth Administration, which employed needy young people, and the Federal Arts,
Theater and Writers' Projects. These last three projects gave a boost to creative ventures by having artists decorate public
buildings, by bringing experimental theater to small towns and by paying local writers to compile local histories.
Resettlement Administration - 1935 (Name later changed to the Farm Security Administration) The Resettlement
Administration aided some farmers and sharecroppers by buying their worthless land relocating them on richer soil. In addition
loans, farm equipment, and expert advice were provided.
Wagner Act – 1935 The Wagner Act replaced the labor protection provision of the NRA, which had been declared
unconstitutional. The act guaranteed the right of unions to organize and to bargain collectively for their members and outlawed
unfair labor practices. The National Labor Relations Board was set up to help settle disputes between unions and employers.
Social Security Act – 1935 This act established a national program of old-age, survivors, and unemployment insurance. Persons
over 65 would get between $10.00 and 85.00 monthly. A payroll tax would pay for these programs, with individuals also
contributing while they were employed.
Banking Act -1935 The act reduced the power of private bankers in the money market by giving the Federal Reserve Board the
power to control the sale of government bonds.
Public Utility Holding Act – 1935 In order to protect consumers, various federal commissions were given power to supervise
electric and gas companies.
Revenue Act of 1936 or Wealth Tax Act The Wealth Tax Act increased income tax rates in high income brackets for both
individuals and corporations. Incomes over $1 million were taxed up to 75 percent. Gift and inheritance taxes were raised so
that huge fortunes could be less easily passed on from generation to generation.
Fair Labor Standards Act – 1936 Affecting businesses in interstate commerce, the law outlawed child labor and provided a
minimum wage of 40 cents an hour, a maximum work week of 40 hours, and time- and-a-half for overtime. Although many
workers were exempt from its provisions, the law set the pattern for federal laws regulating wages and hours.