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New Deal

The New Deal was President Franklin D. Roosevelt’s (FDR) response to the Great Depression, aiming to provide relief, recovery, and reform. It dramatically expanded the role of the federal government in the economy. The New Deal can be divided into two phases:

• First New Deal (1933–1935): Focused on immediate economic relief and recovery through programs like the CCC, AAA, and TVA.

• Second New Deal (1935–1939): Focused on long-term economic reform and social welfare, creating the Social Security Act and Wagner Act.

The New Deal did not fully end the Depression, but it restored public confidence and reshaped the federal government’s role in the economy.

Hundred Days

The Hundred Days (March–June 1933) refers to the first three months of FDR’s presidency, during which Congress passed a historic wave of legislation to tackle the Great Depression. Key laws included:

• Emergency Banking Relief Act – Reopened stable banks after a national "bank holiday."

• Glass-Steagall Banking Reform Act – Created FDIC to insure bank deposits.

• Civilian Conservation Corps (CCC) – Employed young men in conservation projects.

• Agricultural Adjustment Administration (AAA) – Reduced farm overproduction to raise prices.

• Tennessee Valley Authority (TVA) – Built dams and power plants to provide electricity and jobs.

This period set the tone for FDR’s presidency and established a new level of federal government intervention in the economy.

Glass-Steagall Banking Reform Act (1933)

• Established the Federal Deposit Insurance Corporation (FDIC), which insured bank deposits up to $5,000 (later increased).

• Separated commercial and investment banking, preventing banks from risky stock market speculation.

• Helped restore confidence in the banking system after the bank failures of the Great Depression.

• Partially repealed in 1999, leading to concerns about financial deregulation.

Civilian Conservation Corps (CCC) (1933)

• A work relief program employing young men (ages 18–25) in reforestation, national park maintenance, and flood control.

• Paid $30 per month, with $25 sent home to support families.

• Provided food, shelter, and basic education to workers.

• One of the most popular and successful New Deal programs, though it was only for men and excluded many minorities.

• Ended in 1942 as the U.S. entered World War II.

National Recovery Administration (NRA) (1933)

• Aimed to stimulate industry through codes of fair competition, including minimum wages, maximum work hours, and price regulations.

• Encouraged businesses to display the blue eagle symbol with the slogan "We Do Our Part."

• Gave workers the right to unionize under Section 7(a) of the National Industrial Recovery Act (NIRA).

• Criticized for favoring big businesses and failing to effectively reduce unemployment.

• Declared unconstitutional in 1935 in Schechter Poultry Corp. v. United States, as it gave too much power to the executive branch.

Agricultural Adjustment Administration (AAA) (1933)

• Aimed to reduce crop overproduction by paying farmers to cut back on production.

• Helped raise farm prices, but was controversial because food was destroyed while people were starving.

• Hurt tenant farmers and sharecroppers, many of whom were evicted as landowners reduced farmland.

• Declared unconstitutional in 1936 (United States v. Butler).

• A second AAA was passed in 1938, shifting to conservation subsidies rather than direct price controls.

Dust Bowl (1930s)

• Severe drought and soil erosion in the Great Plains (Kansas, Oklahoma, Texas, Colorado, and New Mexico).

• Overfarming and mechanized agriculture caused the land to become vulnerable to dust storms ("black blizzards").

• Forced thousands of "Okies" and "Arkies" to migrate westward to California, as famously depicted in John Steinbeck’s The Grapes of Wrath.

• Led to federal efforts to conserve soil and regulate farming practices.

Indian Reorganization Act (1934)

• Also called the "Indian New Deal", aimed to reverse forced assimilation policies from the Dawes Act of 1887.

• Restored tribal self-government and promoted preservation of Native American culture.

• Allowed tribes to own land collectively rather than through individual allotments.

• Mixed reception: Some tribes embraced self-rule, while others saw it as continued government interference.

Tennessee Valley Authority (TVA) (1933)

• Government-run power company that built dams, hydroelectric plants, and flood control systems in the Tennessee Valley.

• Provided cheap electricity to rural areas, spurring industrial growth.

• Created thousands of jobs and improved soil conservation.

• Criticized as socialistic, as the government competed with private utilities.

Social Security Act (1935)

• Established a pension system for retired workers.

• Created unemployment insurance and aid for the disabled and poor families with dependent children.

• Funded through payroll taxes paid by employers and employees.

• A cornerstone of the modern welfare state.

Wagner Act (1935)

• Also called the National Labor Relations Act (NLRA).

• Guaranteed workers the right to unionize and bargain collectively.

• Created the National Labor Relations Board (NLRB) to protect workers from unfair labor practices.

• Strengthened labor unions, leading to a surge in membership.

Fair Labor Standards Act (1938)

• Established minimum wage (initially 40 cents per hour).

• Set maximum work hours (40 hours per week).

• Banned child labor for workers under 16 years old.

Congress of Industrial Organizations (CIO) (1935)

• Labor union founded by John L. Lewis to organize industrial (unskilled) workers.

• Broke away from the AFL (which focused on skilled workers).

• Led successful strikes, including the 1936–1937 General Motors sit-down strike.

• Later merged with the AFL in 1955 to form the AFL-CIO.

Court-Packing Plan (1937)

• FDR’s controversial plan to expand the Supreme Court by adding up to six new justices.

• Proposed after the Supreme Court struck down several New Deal programs.

• Seen as an attempt to overpower the judiciary, facing major backlash from Congress and the public.

• Failed, but the Court later became more favorable toward New Deal policies.

Keynesianism

• Economic theory by John Maynard Keynes advocating government deficit spending to stimulate the economy.

• Encouraged public works projects and social programs during economic downturns.

• FDR adopted Keynesian policies in 1937–1938 after a recession hit when New Deal spending was reduced.

• Influenced modern economic policies, including post-WWII recovery programs.