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The New Deal, 1932-1939 Enacted in 1933, the New Deal was a series of government programs instituted by President Franklin D. Roosevelt in response to the Great Depression. Focused on the three "Rs" of relief, recovery, and reform, the New Deal sought to alleviate unemployment and poverty, restore the shattered economy, and institute changes to the �nancial system to prevent another economic disaster from happening. Even though the New Deal did not completely undo the e�ects of the Great Depression, it greatly impacted the relationship between Americans and the federal government, which took on an unprecedented role in guiding the economy and providing for citizens.

A Change in Course

By the election of 1932, the United States was deeply mired in the Great Depression, and people had lost con�dence in President Herbert Hoover's ability to steer the country out of crisis. Unhappy and impatient with Hoover's conservative approach, voters swept a new president into the White House: Franklin D. Roosevelt, who campaigned on a promise of direct federal aid to ease the su�ering brought on by the Depression. In his inaugural address, Roosevelt assured the nation that he would take bold action to restore prosperity, declaring "the only thing we have to fear is fear itself."

During a period now known as the "First Hundred Days" of his presidency, Roosevelt set into motion a massive �urry of legislation that formed the basis for the New Deal. For example, Congress passed �nancial laws like the Glass-Stegall Act to regulate and stabilize the banking industry. A number of relief measures were enacted, like the Agricultural Adjustment Act (AAA), which paid farmers to reduce their crop production. Additionally, to address the issue of unemployment, the government created programs like the Civilian Conservation Corps (CCC), which provided jobs in the nation's forests and parks.

Expanding the New Deal

While Roosevelt's initial e�orts gave Americans hope and started putting people back to work, the economy continued to sputter, and high levels of unemployment persisted. The president faced opposition from a spectrum of critics, like the populist politician Huey Long, who pushed for wealth redistribution from the rich to the poor. Additionally, many businesses complained that Roosevelt was interfering too much in their a�airs. To make matters worse for the president, the Supreme Court declared key New Deal legislation unconstitutional.

In response to these challenges to his policies, Roosevelt moved quickly and decisively to extend the New Deal's programs. A second wave of legislation included the creation of Social Security, which was designed to provide money to the elderly and unemployed. Also, the government created the Works Progress Administration (WPA), which not only hired people to build public facilities but also invested in artistic and cultural projects.

End of the New Deal

After winning reelection, Roosevelt made moves to protect his New Deal legislation from what he saw as further interference from the Supreme Court. To that end, he unveiled a controversial "court packing" plan that would give him the power to add more justices to the bench—for the purpose, critics charged, of neutralizing

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conservative opposition to the New Deal. The plan proved to be unnecessary when the Court began to uphold New Deal policies, but it damaged Roosevelt politically.

By 1938, the New Deal was drawing to a close. In addition to the e�ects of anti-Roosevelt sentiment in Congress, the economy had dipped back into a recession, further slowing down momentum for new programs. Additionally, growing tensions abroad and the threat of another world war forced Roosevelt to shift his focus from domestic to international a�airs.

Impact and Legacy

It would take massive government spending during World War II to lift the United States out of the Great Depression. Although the New Deal ultimately failed in this regard, it did pull the United States from the brink of economic and social disaster, while laying the foundation for economic stability in the future. It left behind physical legacies such as the Hoover Dam, as well as enduring political legacies like food stamps and Social Security.

Perhaps the New Deal's greatest e�ect, however, was a drastic and permanent change in the relationship between Americans and the federal government. Before the New Deal, the government essentially had no involvement in people's everyday economic or social lives. But under Roosevelt, the government took on a new role in shaping the economy, as well as a more active interest in the well-being of the American people.

Lauren Thomas

First Hundred Days President Franklin D. Roosevelt was inaugurated at the beginning of March 1933 as the nation su�ered during the long, cold winter of the Great Depression. Nearly 15% of Americans depended on some kind of government relief. Failed banks, closed factories, and hungry people waited to see what the new president could do. In the First Hundred Days of his �rst term, Roosevelt proactively pushed policies to stabilize the fragile economy and address the concerns average people had regarding the Great Depression. These reforms would initiate a larger set of policies collectively known as the New Deal.

Two days after his inauguration, Roosevelt closed all the banks in the country and summoned Congress to a special session. Congress passed the Emergency Banking Act of 1933, which regulated banks and restored public con�dence. Banks reopened within days. Soon Congress passed legislation establishing the Federal Deposit Insurance Corporation, which forever transformed the banking system by guaranteeing the deposits of ordinary people.

Fireside Chats

In his �reside chats, Roosevelt spoke directly from the White House to the people of the United States on the radio. He promised a New Deal and told them that his administration would change things fast. His plain speaking reassured the people who had voted him into o�ce and kept them solidly behind their president and his programs. Through this new venue of mass communication, Roosevelt spoke directly with the U.S. public. In this manner, he explained many of this policies to the layman calming fears and apprehensions regarding the economic collapse. He reassured them that someone in Washington, D.C., spoke for them and attempted to raise their spirits through this direct line of communication. These weekly radio announcements were remembered fondly by many people after the Depression as a testament to Roosevelt's e�orts.

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Banking Reforms

Among the �rst reforms espoused by Roosevelt were those directly related to the abuses by investors and bankers that had contributed directly to the collapse. The banking system had failed under the weight of debt as many banks became insolvent when people withdrew their funds. Roosevelt restored faith in the banking system by instituting a bank holiday that closed all banks to prevent further collapse. A week later, solvent banks were reopened to the public, thus restoring a sense of faith in the system. Roosevelt also took the dollar o� the gold standard allowing it to "�oat" and thus putting control of its value in the U.S. government. In this manner, more money could be pumped into the economy to stimulate growth.

Other economic reforms in the First Hundred Days included the Glass-Steagall Act (1933), which imposed regulations on the banking industry to prevent further speculative abuses that had led to the 1929 crash. Later reforms would follow that would curtail abuses by irresponsible speculators and corporations.

Alphabet Soup

Roosevelt sent an avalanche of legislation to Congress, which passed it more quickly than anyone believed possible. Within the �rst 100 days of the new administration, Congress had passed the Agricultural Administration Act, established the Federal Emergency Relief Administration (FERA), voted in the Civilian Conservation Corps (CCC), approved the National Industrial Recovery Act, and enacted the Emergency Unemployment Relief Act. These policies initiated

direct federal intervention in the economy as a way to create employment and thus stablize the economy.

With the Agricultural Adjustment Act, commodity prices rose immediately. Stocks and industrial production also began to recover. FERA began distributing relief funds to states and cities, which were nearly bankrupt, to continue relief programs for people in need. The CCC o�ered immediate employment to young men by giving them conservation work in national parks and forests.

Continuing the Work

After the First Hundred Days, programs were improved and expanded. The Civil Works Administration was established in November 1933 and employed 4.2 million people by January 1934. Workers built projects ranging from airports to outdoor privies as well as highways, bridges, courthouses, and police stations. In 1935, many of the New Deal programs were consolidated into the Works Progress Administration (WPA).

New Programs, Old Prejudices

Problems remained, however. The new relief and employment programs were ordered not to discriminate on the basis of race. Yet they were run by people who brought with them their own prejudices, and that meant that African Americans were excluded from many bene�ts.

Many of the programs also excluded women. According to the culture of the times, men were supposed to work, and women were supposed to stay home and take care of families. The CCC speci�cally excluded women, and the WPA did not o�er jobs to many. The National Youth Administration (NYA), established under the WPA, �nally admitted women on an equal basis. A special NYA Division of Negro A�airs, headed by Mary McLeod Bethune, also ensured that this agency was non-racist.

Despite the bold moves of the First Hundred Days and Roosevelt's New Deal, the depression lingered. Although it would not truly end until World War II began, the New Deal programs gave Americans work and hope.

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Dawn of the New Deal The stock market hit bottom in 1932, and so did the lives of many people in the United States. They were ready for Franklin D. Roosevelt's New Deal and for a new beginning. With unemployment running as high as 50% in some parts of the country, workers had no bargaining power. They had to accept whatever wage cuts, speed- ups, and long hours were given to them. Then came the New Deal.

Relief, Reform, and Recovery

The New Deal policies were put together by Roosevelt's "Brain Trust," a group of leaders at the executive level set on developing plans for the administration with three goals in mind, the "three R's" or relief, recovery, and reform. Relief policies were mostly successful in that they stopped the worst consequences of the depression for many Americans. The banking holidays closed banks to stop panics and bank runs and allowed for the reform of the banking system. The Emergency Banking Act required solvency for banks to reorganize and reopen for business. The Federal Emergency Relief Act provided immediate cash to help citizens. The Civil Works Administration (CWA), particularly through its Civilian Conservation Corps (CCC) program, created jobs for unemployed young men.

Policies aimed at recovery were a bit more problematic for the Roosevelt administration. These temporary programs were aimed at creating jobs and stimulating consumer spending. The Agricultural Adjustment Administration (AAA) subsidized farming to reduce supply and increase demand of crops. The National Industrial Recovery Act (NRA) set wages, prices, and production quotas across various industries. The Blue Eagle of the National Recovery Administration (NRA) symbolized freedom for workers. The NRA law said that employees had "the right to organize and bargain collectively through representatives of their own choosing." Never before had labor unions had such strong protection. New unions sprang up in other industries—more than 3,500 new unions by the summer of 1934. The NRA was struck down by the U.S. Supreme Court in 1935 followed by the AAA in 1936.

New Deal policies of reform were designed to protect against abuses that had led to the economic collapse. The Security and Exchange Commission (SEC) was established to monitor the stock market and regulate the practices of buying and trading stocks. The Federal Deposit Insurance Corporation (FDIC) insured the bank deposits of consumers, ensuring their trust in banking practices and preventing bank runs. Social Security, a central scheme where taxpayers would pay into a system to ensure economic security for themselves when elderly or in�rm, ensured the �nancial security of the populace beyond their productive years.

The New Deal and Minorities

The New Deal also sought to alleviate the condition of the "Forgotten Man," a group that encapsulated taxpayers, women, and people of color. Despite federal e�orts, African Americans, Latinos, and Native Americans received low levels of assistance and aid due to discrimination at the state and local levels.

Policies directed at assisting women were de�ned by their inadequacy. The NRA set a lower minimum wage for female laborers and women working for the WPA earned lower wages than men. However, at the executive level, the inclusion of Frances Perkins as the U.S. secretary of labor, set a precedent for the growing role of women in government. This was also the case for African American women as Mary McLeod Bethune a National Youth Administration adviser was part of the "Black Cabinet" in the Roosevelt administration, a group of black leaders advising the president on better assisting the black community.

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Last hired and �rst �red, African Americans bore the brunt of the Great Depression. African American unemployment rates were four to six times higher than white unemployment rates. Even when relief programs began, African Americans were usually left out and left behind. The Civilian Conservation Corps (CCC), despite a legal guarantee of nondiscrimination, did not hire many African Americans. White supervisors, especially in the South, simply refused to hire them. When some African Americans were hired, they lived in segregated camps commanded by whites. The Works Progress Administration (WPA) did a better job of hiring African Americans.

For Native Americans, the Indian New Deal, which consisted of a series of policies related to assisting the American Indian community, expanded land rights and gave a great degree of tribal authority. The Indian Reorganization Act (IRA) stressed the recognition of tribal governments, cancelled tribal debts owed to the federal government, and repealed the Dawes Act and its land policies.

New Deal, New Hope

For all its shortcomings, the New Deal inspired hope in people who had little until that time. Working men and women felt that they were valued by the government. African Americans saw a beacon of hope in Bethune's prominence in the administration. The road to a better life might be long, but at least the country was on that road.

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Opposing the New Deal Opposition to the New Deal began even before Franklin D. Roosevelt was elected president. Incumbent president Herbert Hoover, a Republican, maintained that Roosevelt's political philosophies de�ed traditional American values. During the 1932 campaign, Hoover argued that Roosevelt's plans would be detrimental to business and free enterprise. However, Roosevelt easily won the election of 1932 and set his New Deal into motion, encountering a variety of challenges along the way.

Business Leaders and the Wealthy

The New Deal appealed to the poor and to working men and women who bene�ted from new government programs and new government spending. The wealthy, on the other hand, had a lot to lose. Taxes could cut into their incomes and inheritances. Unions could cut into the pro�t margins of their companies. Roosevelt's Revenue Act, passed in 1935, brought higher estate and gift taxes, higher income taxes for the wealthiest, and a graduated corporate tax. Many rich people felt that Roosevelt, who had been born into a wealthy family, was a traitor to the upper class.

Roosevelt and the Supreme Court

Roosevelt soon found that one of the biggest challenges to New Deal legislation would come from another branch of the federal government. In Schechter Poultry Corp. v. United States (1935), the U.S. Supreme Court declared the National Industrial Recovery Act unconstitutional and invalidated the National Recovery Administration (NRA). The Court stated the act was unlawful because it delegated legislative power to the executive branch and sought to regulate businesses that were entirely within state jurisdiction. In 1936, the Court declared the Agricultural Adjustment Administration (AAA) unconstitutional, maintaining that e�orts to help farmers should be made at the state level and that such federal programs as the AAA violated states' rights. Eleven of the 16 laws passed within the First Hundred Days of the New Deal were also later found to be unconstitutional by the Supreme Court.

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In 1937, Roosevelt sent a plan to Congress to reorganize the federal courts. His plan would have given the president the power to increase the number of justices from nine to 15 if the justices refused to retire by the age of 70. Roosevelt's "court-packing " plan was aimed at coercing the Court to approve his New Deal legislation. The Senate rejected the plan, which left much of Congress embittered with the president and his demands.

Radical Opposition

Among the most fervent enemies of the New Deal were some who began as its friends. Huey Long, a popular senator and former governor of Louisiana, supported Roosevelt in the election of 1932. However, Long soon became convinced that New Deal legislation did not go far enough in redistributing the nation's wealth. Long proposed to limit fortunes to no more than $3 million and to limit incomes to no more than $1 million annually with his "Share the Wealth" program. The taxes his proposed system imposed on the rich would be distributed to build schools, pay old-age pensions, and guarantee wages for the working class.

Father Coughlin, a priest and radio personality, told the American public in 1932 that their choice was "Roosevelt or Ruin." By 1936, he had changed his tune. Then, he said the slogan was "Roosevelt and Ruin." Coughlin maintained that Roosevelt had not done enough to take money from the bankers and give it to the people.

Coughlin joined forces with Gerald L.K. Smith, a supporter of Long and �erce opponent of Roosevelt, and with Dr. Francis Townsend. Townsend advocated a $200 pension each month to everyone over 60 years old with the stipulation that they had to spend it within the month. The Townsend Plan, he argued, would take care of the elderly while stimulating the economy. Townsend did not like the Social Security Act that Roosevelt signed in 1935.

Reelection in 1936

In 1936, Coughlin, Smith, and Townsend agreed on a third-party candidate for president—North Dakota congressional representative William Lemke. The Republican Party nominated Governor Alf Landon of Kansas and outspent the Democratic Party by $14 million to $9 million during the campaign. Nonetheless, the three- way race ended with a resounding victory for Roosevelt. Roosevelt won 61% of the popular vote and all of the electoral votes except Maine and Vermont.

By 1938, the New Deal was coming to an end. Roosevelt turned toward foreign a�airs as a second world war was brewing abroad. Massive government spending during World War II would ultimately bring an end to the Great Depression. However, Roosevelt's New Deal would leave a legacy of federal control over the economy, along with an assortment of opponents, in its wake.

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Franklin D. Roosevelt and Eleanor: Franklin D. Roosevelt Library

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Thomas, L. (2024). The New Deal, 1932–1939. American History. Retrieved July 14, 2024, from https://americanhistory2.abc-clio.com/Topics/Display/19 First Hundred Days. (2024). American History. Retrieved July 14, 2024, from https://americanhistory2.abc- clio.com/Topics/Display/19#1187213 Dawn of the New Deal. (2024). American History. Retrieved July 14, 2024, from https://americanhistory2.abc- clio.com/Topics/Display/19#1187219 Opposing the New Deal. (2024). American History. Retrieved July 14, 2024, from https://americanhistory2.abc- clio.com/Topics/Display/19#1187212   Entry ID: 1993810

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