The New Deal
On March 4, 1933, when FDR took the oath of office to become the 32nd President of the United States, America was a country in the midst of the worst economic crisis in its history. Since the onset of the Great Depression—initiated by the crash of the stock market in the fall of 1929—over $75 billion in equity capital had been lost on Wall Street, the gross national product had plunged from a high of $104 billion to a mere $74 billion, and U.S. exports had fallen by 62 percent. Over thirteen million people, nearly 25 percent of the workforce, were now unemployed. In some cities, the jobless rate was even higher. In Chicago it had climbed to 40 percent, in Detroit, a staggering 50 percent. Caught in a web of despair, thousands of shabbily dressed men and women walked the streets in search of work, or a bit of food, doled out from one of the hundreds of soup kitchens set up by private charities to keep the wage-less from starvation. In rural America, meanwhile, thousands of tons of unmarketable crops sat rotting in gain storage bins, while farm income plummeted and thousands of families were forced to abandon their homesteads. Reeling from the pressures of such a massive economic downturn, more than 11,000 banks had closed their doors, and the U.S. banking system had all but ceased to function. The nation, in short, appeared to be falling into an economic abyss that might well result in the total breakdown of order. Some observers even feared that without immediate and dramatic action, the country might well slip into revolution.
FDR's response to this unprecedented crisis was to initiate 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 group of FDR advisors brought in from academia and industry known as the "Brains Trust" who, in their first "hundred days" in office, 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 in large measure on the willingness of the American people to once again place their faith—and money—in their local banks. To ensure this, FDR turned to the radio, and in the first of his many "fireside chats," convinced the American people the crisis was over and that their deposits—backed by the newly established the Federal Deposit Insurance Corporation (FDIC) — were safe.
Other significant New Deal measures included the establishment of the Works Progress Administration (WPA), the Civilian Conservation Corps (CCC), and the Agricultural Adjustment Administration (AAA). 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 dependant children, the handicapped, and the blind. The New Deal also led to the establishment of a number of significant regulatory agencies, such as the Securities and Exchange Commission (SEC), set up to stave off a further crash of the Stock Market, the Federal Housing Administration (FHA), which ultimately made home ownership affordable for millions of average Americans, as well as the National Labor Relations Board, the Civil Aeronautics Authority, and the Federal Communications Commission.
While 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. Critics of FDR's policies, on both the right and the left, use this fact as a reason to condemn it. Conservatives argue, for example, that it went too far, and brought too much government intervention in the economy, while those on the left argue 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. But the New Deal's greatest achievements transcend mere economic statistics, for in a world where democracy was under siege, and the exponents of fascism and communism flourished, 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.
One of the most striking benefits of the New Deal was that it restored the confidence of a deeply discouraged population. FDR's use of the media, particularly his mastery of radio communication with the American people through his "Fireside Chats," restored the spirit of the nation as he worked to lift the economy out of the Great Depression.
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