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Gabriella Stratford

Professor Fred Wilson

May 7, 2014

Franklin D. Roosevelts New Deal

The years 1929-1940 were monumental to the United States. A series of
important events took place during this time that shaped America into what it is today.
The well-known era of the Roaring Twenties was a time of 'Enlightenment' for many
Americans. With the end of WWI behind it, the United States economy was at an all time
high. The Roaring Twenties and all the feel-good vibes that came with American
prosperity seemed to vanish exponentially when the stock market crashed on Tuesday,
October 1, 1929 (Safarian, 2). This day marked the beginning of the Great Depression;
the worst economic situation the U.S. has ever faced. With a nation facing economic
collapse, new elected Franklin D. Roosevelt's presidency was a beacon that would lead
America to the light at the end of the tunnel. In 1933, Roosevelt's presidency became
known as the 'New Deal'. The New Deal was designed to give America and her people
relief, reform, and recovery during a time of great hardship and had a big part in shaping
America into what it is today. FDRs New Deal policies created many opportunities for
economic stimulation in the United States, as well as altered standards in American
The origins of the economic crisis that eventually lead to the Great Depression is
still debatable, but the results of such a crisis is obvious. From 1929 to 1933 American
manufacturing output decreased by a third (Safarian, 93). Unemployment in the U.S.
dropped to 25%, and almost half of the nation's manpower was going unused (Kennedy,
87). Before the New Deal, there was no such thing as bank insurance, leaving peoples
saving accounts deprived. There was also no social safety net or Social Security program.
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American citizens were left to fend for themselves as their well-being became the
responsibility of their family or themselves. The Great Depression had devastated the
nation, and the American people turned to freshly elected President Franklin Delano
Roosevelt to fix the problem. Upon taking office, Pres. Roosevelt addressed the broken
nation with this statement:
Throughout the nation men and women, forgotten in the political philosophy of
the Government, look to us here for guidance and for more equitable opportunity to share
in the distribution of national wealth... I pledge myself to a new deal for the American
people. This is more than a political campaign. It is a call to arms (Roosevelt).
Roosevelts first 100 days in office proved to be very important. During this time
period, Congress passed bills to help Roosevelt with his New Deal. The New Deal
encompassed a wide variety of programs designed to promote economic and political
reforms, recovery, and relief during the Great Depression (Atler, 16). As such, FDR
promoted economic relief to unemployed Americans, national economic recovery, and
nationwide banking and business reform as three goals to attribute to his New Deal
dream. These goals are often referred to as the 3 Rs: Relief, Reform, and Recovery.
Relief: to stop economic deterioration. Recovery: to motivate programs to increase
consumer demand, and Reform: avoid other depressions and to create economic growth
and stability (Social Studies Help).
FDR took many steps to provide relief to America. His first matter of buisness
after taking his oath in office was declare a Bank Holiday. From March 6 to March 10,
banking transactions were suspended across the nation except for making change
( Roosevelt met with Congress and finally passed the Emergency Banking
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Act which helped ease the public fears and gain control of the bank failures. Roosevelt
wanted to re-establish investor confidence and stability in the banking system. This law
helped reopen banks that were able and assist those that weren't. The government was
able to help those that were close to collapse and make them fit for the public to use. The
President addressed the American people using his fireside chats and assured them that
everything will be alright and that the banks were secure. After the first day, deposits to
banks exceeded withdrawals. After a month, a billion dollars were returned to the
banking system (
Another policy that was very important in providing relief to the American
economy was the Federal Deposit Insurance Corporation (FDIC). During the Great
Depression, banks failed and the New Deal was a set of federal programs that had five
major goals: economic recovery, investments in public works, promote education, and to
expand federal government (The Living New Deal). To help with the economic recovery,
Roosevelt set up many agencies and programs to help the American people. Social
Security, monetary assistance to people with an inadequate or no income, was given to
most Americans (National Academy of Social Science).
Now that the banking system was back to normal, the most pressing task was to
get people back to work. Three job-creating programs were created during the First
Hundred Days: Civilian Conservation Corps, Federal Emergency Relief Act, and Public
Works Administration. The Civilian Conservation Corps basically paid young men
without means or ambitions minimum wage to help with reforestation and park
improvements. FERA was a way to relieve unemployment y opening unskilled job in
local and state government. FERA provided work for over 20 million people and
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developed facilities on public lands across the country. In 1933 FERA included adult
education classes which opened two thousand jobs for teachers (University Library).
PWA was a grand-scale construction company that built dams, bridges, schools, and
hospitals. These programs drawn by FDR and passed by Congress's had the desired effect
and was successful by working for these agencies and obtaining federal checks from the
One of Roosevelt's goals for the New Deal was to help America recover from the
Great Depression by restarting the demand of consumers. Two programs Roosevelt
proposed was the Agriculture Adjustment Act and the National Industry Recovery Act.
AAA was passed by congress in May 1933 to increase the income of farmers and to
restore agriculture prosperity. Farmers were told to stop growing food and food
processors were taxed, then the farmers were given the tax money as payment
(Encyclopedia Britannica). A month later, the National Industry Recovery Act was
passed and created the National Recovery Administration which has the power to set
rules for the economy. The administration was empowered to make voluntary agreements
dealing with hours of work, rates of pay, and the fixing of prices (Our Documents). These
recoveries were successful because the interaction between the market and people
The 1935 Social Security Act was a method of reformation to improve the
economic status. Social Security, which provided a government-backed system of
pension for the elderly, unemployment insurance, and welfare benefits for the physically
and mentally disabled (Shmoop). To this day, it remains the most visible legacy for
Roosevelts New Deal policy ( With peoples savings completely gone,
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Roosevelt envisioned this policy as a means to provide assistance to the poor that they
would be able to have throughout their lifetime if needed.
President Roosevelts strive for a better America through his New Deal plan also
created new power and ability to the executive branch. This greatly affected American
society and its political system. Much of the legislature FDR proposed throughout the
New Deal gave an additional benefit of expanding presidential power. This was possible
thanks to the public opinions of the president. Roosevelt had all the aspiring qualities of a
game changer, and the American people looked up to that. His persistent optimism and
activism contributed to a renewal of the national spirit (FDR Presidential Library). In
order to implement his New Deal plans into action, FDR used his increasing popularity to
gain substantial power from Congress. By the time Roosevelts term was over, the
president replaced Congress as the chief policy-maker within the federal government
(Greenstein, 13).
While Roosevelt uses this power temporarily, his successors continued to use and
exercise that power; thereby institutionalizing this new authority in the executive branch.
To this day Americans look to the president as commander-in-chief to provide and watch
over the nation. This form of superiority did not exist until FDR. The New Deal policies
not only impacted the situation of America in the 1930s, but also influenced the future of
American society by giving more power to the President and the executive branch.
The legacy of FDRs New Deal is disputed. It was not until President Roosevelts
third term when World War II demanded the U.S. to mobilize that the nation finally
returned to full employment (Shmoop). Richard Hofstader, a writer for the New York
Times says describing the unpredictability of Roosevelts plans, FDR threw a bunch of
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policies against the wall, and what stuck became the New Deal. Despite the possibility
that the New Deal may not have been a complete success, it is certain that it forever
changed the United States. Perhaps one of historys greatest public experiments, the New
Deal lead millions of American citizens back on their feet. Roosevelts policies passed
many historical milestones. Federal protection was extended to all bank deposits. Social
security systems were established, and social welfare was created to financially protect
labor unions (Leuchtenburg, 23). And for the first time ever, women and African
Americans became eligible for financial aid benefits that has been previously
denied (Leuchtenburg, 23). Public works programs were initiated such as the FDIC, the
FERA, and the PWA that provided much needed assistance to the relief of millions of
Americans. So many are the positive effects that the New Deal had to reconvene
economic stimulation after the Great Depression in the United States.
Having mentioned the benefits of the New Deal, its important to note that some
beleive that Roosevelts plan prolonged the Great Depression. Dr. Harold L. Cole, a
professor at the University of Pennsylvania and Mr. Lee E. Ohanian also a professor of
economics at UCLA stated:
Some New Deal policies certainly benefited the economy by establishing Social
Security and unemployment benefits, and by stabilizing the financial system through
deposit insurance and the SEC [Security Exchange Commission]. but others violate the
most basic economic principles by suppressing competition, and setting prices and wages
well above their normal levels.
The professors are unanimous in concluding that these policies adopted by
Roosevelts New Deal were anti-market and became an impediment for the economy to
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bounce back. According to them, if these policies had not been adopted, the American
economy could have gotten better by the mid-1930s (Cole and Ohanian).
Despite the many different opinions in regards to President Roosevelts New Deal
plan, it is an undisputable fact that this ingenious hard working man provided a strategy
during a time in American history when hope and direction was much needed.

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