The New Deal: FDR's Economic Reforms and Programs

Franklin D. Roosevelt

Born in New York in 1882. Member of the Democratic Party. Married to Eleanor Roosevelt. Elected 32nd President of the United States in a landslide over Hoover in 1932.

New Deal

A series of programs and legislation aimed at providing relief, recovery, and reform during the Great Depression.

Keynesian Economics

An economic theory advocating for government intervention to manage economic cycles and promote full employment.

Bank Holiday and Emergency Banking Act

Legislation enacted to stabilize the banking system during the Great Depression.

Agricultural Adjustment Act

A law aimed at boosting agricultural prices by reducing surpluses.

Civilian Conservation Corps

A public work relief program that provided jobs for young men during the Great Depression.

Tennessee Valley Authority

A federally owned corporation created to provide navigation, flood control, electricity generation, and economic development in the Tennessee Valley.

Conditions in 1933

25% (1/4) of U.S. population was unemployed, with 50 million in poverty and many banks closed.

Main Goals of the New Deal

Relief, Recovery, Reform.

The First New Deal 1933-1935

Passed 15 major pieces of legislation to provide relief, recovery, and reform to individuals and businesses.

The "Second New Deal" - 1935-1936

A period marked by a drop in unemployment to about 20% and the passing of major legislation like the Social Security Act.

Social Security Act

A law that established a system of old-age benefits and unemployment insurance.

Wagner Act

A law that established the right of workers to organize and bargain collectively.

Banking Act

Legislation aimed at reforming the banking system and protecting depositors.

Rural Electrification Act

A law aimed at providing electricity to rural areas.

FDR's Approach

FDR uses the power of government to save the free market without eliminating it or nationalizing banks or industries.

Economic Spectrum

A range of economic theories from Adam Smith's laissez-faire to Karl Marx's communism, with Keynesian economics as a managed approach.

John Maynard Keynes

A British economist known for advocating Keynesian economics.

Keynesian Economics

Relies on government stimulation of demand to spur economic recovery.

Overproduction and Excess Supply

Factories not producing because inventories already too high - too much stuff sitting around.

Economic Depression

A situation where lots of people are out of work, leading to decreased purchasing power and further economic decline.

Massive government spending

Solution in Keynesian Economics, mostly on public works and relief efforts.

CCC

Civilian Conservation Corps, a New Deal program that provided work for young men in conservation projects.

AAA

Agricultural Adjustment Act, aimed to raise prices by reducing production.

TVA

Tennessee Valley Authority, a New Deal program focused on regional development.

Fiscal Deficit

Expenditures greater than income.

Short-term deficits

Deficits that are not considered bad in Keynesian economics because they are expected to be temporary.

FDR

Franklin D. Roosevelt, who practiced Keynesian Economics.

Bank Holiday

A national closure of all banks for 4 days ordered by FDR to address a banking crisis.

Emergency Banking Act

Legislation passed to allow only sound banks to reopen after the Bank Holiday.

Fireside Chat

A radio address by FDR reassuring the nation about the safety of their money.

FDIC

Federal Deposit Insurance Corporation, created by the Glass-Steagall Act to protect bank deposits.

Relief Programs

Immediate assistance for those that were unemployed.

Works Progress Administration (WPA)

A New Deal program that employed people through creative jobs and infrastructure projects.

National Youth Administration (NYA)

Found part-time jobs for young people who were students or unemployed.

Shenandoah National Park

Location where the CCC worked on planting trees and building forest trails.

Gold reserves

Fell below legal limit by 1933, contributing to the banking crisis.

Panic averted

Result of the Bank Holiday and subsequent actions taken by FDR to stabilize the banking system.

New Deal Programs

A series of programs and policies designed to provide relief and recovery during the Great Depression.

Agricultural Adjustment Act (AAA)

Raise prices by reducing production. Gave subsidies to farmers who agreed to leave their land idle. Called a "price-support system."

Federal Emergency Relief Administration (FERA)

Worked to feed the hungry.

Civil Works Administration

Aimed at winter months and providing relief for the needy.

Emergency Banking Act

Attempted to put confidence back into banks. Signed 5 days after FDR took office and only took 8 hours to reach his desk.

National Industrial Recovery Act/National Recovery Administration (NRA)

Allowed industry owners to work together to set prices, wages, and production quotas. Also had provision to allow for Collective Bargaining for workers.

Tennessee Valley Authority (TVA)

Wanted to develop one of the poorest regions in the U.S. that spanned seven states. Highly successful program, but it was never replicated in other parts of the nation ; government in direct competition with private businesses

Public Works Administration

Public projects.

Rural Electrification Administration

1935: 10% of farms had electricity. 1941: 40% of farms had electricity.

Glass-Steagall Act

Separated commercial banks and investment banks. Commercial banks cannot invest in securities; investment banks cannot take deposits or make commercial/personal loans.

Federal Deposit Insurance Corporation

Deposits insured by federal govt. If bank fails, people can still get their money.

Securities Exchange Act

Created the Securities Exchange Commission which regulated the Stock Market to prevent the abuses that occurred in the 1920s which led to the Crash.

Wagner Act

Created the National Labor Relations Board - regulated relations between employers and workers. Guaranteed collective bargaining - required employers to recognize and bargain with legitimate unions.

Social Security Act

First step toward the 'welfare state' in the United States. Financed through worker and employer contributions.

Contributory insurance

Old-age pensions and unemployment benefits financed through worker and employer contributions.

Categorical Assistance

Relief (welfare) to groups unable to support themselves, such as mothers and children and the physically handicapped.