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By: History.com Editors

Updated: March 28, 2023 | Original: October 29, 2009

The New Deal was a series of programs and projects instituted during the Great Depression by President Franklin D. Roosevelt that aimed to restore prosperity to Americans. When Roosevelt took office in 1933, he acted swiftly to stabilize the economy and provide jobs and relief to those who were suffering. Over the next eight years, the government instituted a series of experimental New Deal projects and programs, such as the CCC , the WPA , the TVA, the SEC and others. Roosevelt’s New Deal fundamentally and permanently changed the U.S. federal government by expanding its size and scope—especially its role in the economy.

New Deal for the American People

On March 4, 1933, during the bleakest days of the Great Depression , newly elected President Franklin D. Roosevelt delivered his first inaugural address before 100,000 people on Washington’s Capitol Plaza.

“First of all,” he said, “let me assert my firm belief that the only thing we have to fear is fear itself.”

He promised that he would act swiftly to face the “dark realities of the moment” and assured Americans that he would “wage a war against the emergency” just as though “we were in fact invaded by a foreign foe.” His speech gave many people confidence that they’d elected a man who was not afraid to take bold steps to solve the nation’s problems.

Did you know? Unemployment levels in some cities reached staggering levels during the Great Depression: By 1933, Toledo, Ohio's had reached 80 percent, and nearly 90 percent of Lowell, Massachusetts, was unemployed.

The next day, Roosevelt declared a four-day bank holiday to stop people from withdrawing their money from shaky banks. On March 9, Congress passed Roosevelt’s Emergency Banking Act, which reorganized the banks and closed the ones that were insolvent.

In his first “ fireside chat ” three days later, the president urged Americans to put their savings back in the banks, and by the end of the month almost three quarters of them had reopened.

The First Hundred Days

Roosevelt’s quest to end the Great Depression was just beginning, and would ramp up in what came to be known as “ The First 100 Days .” Roosevelt kicked things off by asking Congress to take the first step toward ending Prohibition —one of the more divisive issues of the 1920s—by making it legal once again for Americans to buy beer. (At the end of the year, Congress ratified the 21st Amendment and ended Prohibition for good.)

In May, he signed the Tennessee Valley Authority Act into law, creating the TVA and enabling the federal government to build dams along the Tennessee River that controlled flooding and generated inexpensive hydroelectric power for the people in the region.

That same month, Congress passed a bill that paid commodity farmers (farmers who produced things like wheat, dairy products, tobacco and corn) to leave their fields fallow in order to end agricultural surpluses and boost prices.

June’s National Industrial Recovery Act guaranteed that workers would have the right to unionize and bargain collectively for higher wages and better working conditions; it also suspended some antitrust laws and established a federally funded Public Works Administration.

In addition to the Agricultural Adjustment Act, the Tennessee Valley Authority Act and the National Industrial Recovery Act, Roosevelt had won passage of 12 other major laws, including the Glass-Steagall Act (an important banking bill) and the Home Owners’ Loan Act, in his first 100 days in office.

Almost every American found something to be pleased about and something to complain about in this motley collection of bills, but it was clear to all that FDR was taking the “direct, vigorous” action that he’d promised in his inaugural address.

Second New Deal

Despite the best efforts of President Roosevelt and his cabinet, however, the Great Depression continued. Unemployment persisted, the economy remained unstable, farmers continued to struggle in the Dust Bowl and people grew angrier and more desperate.

So, in the spring of 1935, Roosevelt launched a second, more aggressive series of federal programs, sometimes called the Second New Deal.

In April, he created the Works Progress Administration (WPA) to provide jobs for unemployed people. WPA projects weren’t allowed to compete with private industry, so they focused on building things like post offices, bridges, schools, highways and parks. The WPA also gave work to artists, writers, theater directors and musicians.

In July 1935, the National Labor Relations Act , also known as the Wagner Act, created the National Labor Relations Board to supervise union elections and prevent businesses from treating their workers unfairly. In August, FDR signed the Social Security Act of 1935, which guaranteed pensions to millions of Americans, set up a system of unemployment insurance and stipulated that the federal government would help care for dependent children and the disabled.

In 1936, while campaigning for a second term, FDR told a roaring crowd at Madison Square Garden that “The forces of ‘organized money’ are unanimous in their hate for me—and I welcome their hatred.”

He went on: “I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match, [and] I should like to have it said of my second Administration that in it these forces have met their master.”

This FDR had come a long way from his earlier repudiation of class-based politics and was promising a much more aggressive fight against the people who were profiting from the Depression-era troubles of ordinary Americans. He won the election by a landslide.

Still, the Great Depression dragged on. Workers grew more militant: In December 1936, for example, the United Auto Workers strike at a GM plant in Flint, Michigan lasted for 44 days and spread to some 150,000 autoworkers in 35 cities.

By 1937, to the dismay of most corporate leaders, some 8 million workers had joined unions and were loudly demanding their rights.

The End of the New Deal?

Meanwhile, the New Deal itself confronted one political setback after another. Arguing that they represented an unconstitutional extension of federal authority, the conservative majority on the Supreme Court had already invalidated reform initiatives like the National Recovery Administration and the Agricultural Adjustment Administration.

In order to protect his programs from further meddling, in 1937 President Roosevelt announced a plan to add enough liberal justices to the Court to neutralize the “obstructionist” conservatives.

This “ Court-packing ” turned out to be unnecessary—soon after they caught wind of the plan, the conservative justices started voting to uphold New Deal projects—but the episode did a good deal of public-relations damage to the administration and gave ammunition to many of the president’s Congressional opponents.

That same year, the economy slipped back into a recession when the government reduced its stimulus spending. Despite this seeming vindication of New Deal policies, increasing anti-Roosevelt sentiment made it difficult for him to enact any new programs.

On December 7, 1941, the Japanese bombed Pearl Harbor and the United States entered World War II . The war effort stimulated American industry and, as a result, effectively ended the Great Depression .

The New Deal and American Politics

From 1933 until 1941, President Roosevelt’s New Deal programs and policies did more than just adjust interest rates, tinker with farm subsidies and create short-term make-work programs.

They created a brand-new, if tenuous, political coalition that included white working people, African Americans and left-wing intellectuals. More women entered the workforce as Roosevelt expanded the number of secretarial roles in government. These groups rarely shared the same interests—at least, they rarely thought they did— but they did share a powerful belief that an interventionist government was good for their families, the economy and the nation.

Their coalition has splintered over time, but many of the New Deal programs that bound them together—Social Security, unemployment insurance and federal agricultural subsidies, for instance—are still with us today.

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The New Deal — A Guide to FDR’s Plan for Relief, Recovery, and Reform

The New Deal was a series of programs and policies implemented in the 1930s by President Franklin Delano Roosevelt in response to severe economic and social issues in the United States.

President Franklin D. Roosevelt in 1944. Image Source: FDR Presidential Library & Museum on Flickr .

New Deal Summary

The New Deal was a series of programs and policies implemented in the 1930s by President Franklin Delano Roosevelt — commonly referred to as FDR — in response to severe economic and social issues in the United States. Each New Deal program and policy fell into one or more of three areas, known as the “Three Rs” — Relief, Recovery, and Reform.

At the end of the Roaring Twenties, the 1929 Stock Market Crash triggered the Great Depression started when the stock market crashed in 1929. Starting in 1931, the southwestern Great Plains suffered from a severe drought, which led to massive dust storms. The area was called “The Dust Bowl” and thousands of people were forced to abandon their homes and move west. In the wake of these events, Roosevelt ran for President in 1932, promising a “New Deal” for Americans, and defeated incumbent Herbert Hoover.

Roosevelt was inaugurated on March 4, 1933. In his First Inaugural Address, he delivered the famous line, “The only thing we have to fear is fear itself.” FDR moved quickly to ease the effects of the Depression on Americans by passing New Deal legislation during “The First Hundred Days” of his Presidency.

FDR started by restoring faith in banks, which had suffered due to the stock market crash of 1929. A Bank Holiday was declared and Congress followed by passing the Emergency Banking Relief Act, which allowed the government to inspect the financial health of banks before allowing them to reopen.

The New Deal aimed to tackle unemployment by creating programs that provided job opportunities. The Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC) employed millions of Americans to work on infrastructure projects, such as building roads, bridges, and schools. Other programs, like the Tennessee Valley Authority (TVA), developed hydroelectric power plants to bring electricity to communities where none existed.

The New Deal also addressed labor relations by passing the National Labor Relations Act — also known as the (Wagner Act). It protected the rights of workers, allowing them to join unions and engage in collective bargaining. The act also established the Fair Labor Standards Act, which set a minimum wage for workers.

The New Deal programs and policies created a significant expansion of the Federal government. They also redefined the government’s role in dealing with economic and social issues. The New Deal was controversial when it was implemented, and its legacy continues to be debated by historians, economists, and others. However, the significance of the New Deal and its impact on the United States during the era leading up to World War II cannot be denied.

What did the New Deal do?

This video from the Daily Bellringer provides an overview of the New Deal and its programs. It also touches on the controversy caused by the New Deal which was caused by the expansion of the Federal Government.

New Deal Facts

• The name “New Deal” came from Franklin D. Roosevelt’s 1932 acceptance speech for the Democratic Party’s presidential nomination. In the speech, he said, “I pledge you, I pledge myself, to a new deal for the American people.”
• The New Deal was designed to deal with the economic and social issues created by the 1929 Stock Market Crash, the Great Depression, and the Dust Bow.
• On March 4, 1933, Franklin D. Roosevelt was elected President. He gave a speech on Capitol Plaza in Washington DC to 100,000 people. He said the “only thing we should be afraid of is fear itself.”
• He took action right away by calling Congress into a special session known as “The Hundred Days,” during which legislation was passed to deal with the Depression and provide economic aid to struggling Americans.
• In an effort to restore the public’s confidence in banks, FDR declared a Bank Holiday and Congress passed the Emergency Banking Relief Act.
• The New Deal dealt with unemployment by creating programs like the Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC), providing jobs for millions of Americans and improving the nation’s infrastructure.
• The New Deal was followed by the Second New Deal, which included the National Labor Relations Act, the  Works Progress Administration, and the Social Security Act.
• The New Deal also included labor-related legislation, such as the National Labor Relations Act (Wagner Act) and the Fair Labor Standards Act, which gave workers the right to join unions, negotiate collectively, and established a minimum wage.
• The New Deal paved the way for the repeal of the 18th Amendment, which established Prohibition. The Beer-Wine Revenue Act of 1933 amended the Volstead Act by raising the amount of alcohol allowed to 3.2 percent and also levied a tax.
• Social programs established by the New Deal are still in effect today, including Social Security and the “Food Stamp Plan.”

New Deal AP US History (APUSH) Terms, Definitions, and FAQs

This section provides terms, definitions, and Frequently Asked Questions about the New Deal and the Second New Deal, including people, events, and programs. Also, be sure to look at our Guide to the AP US History Exam .

The New Deal was a series of policies and programs implemented by President Franklin D. Roosevelt during the 1930s in response to the Great Depression. The New Deal aimed to provide relief to the unemployed and poor, promote economic recovery, and reform the financial system. The New Deal included programs such as the Civilian Conservation Corps (CCC), the Federal Emergency Relief Administration (FERA), and the National Recovery Administration (NRA). It also created numerous agencies and programs such as the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Social Security Administration.

The second phase of the New Deal, which was enacted in 1935. The Second New Deal focused on providing economic security to Americans through the creation of Social Security and other welfare programs. It also included measures to stimulate the economy, such as the Works Progress Administration (WPA) and the National Labor Relations Act (NLRA). The Second New Deal was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

FDR’s Alphabet Soup refers to the numerous programs and agencies created during Franklin D. Roosevelt’s presidency as part of the New Deal. These initiatives, often known by their acronyms, aimed to provide relief, recovery, and reform during the Great Depression. Examples include the CCC (Civilian Conservation Corps), the TVA (Tennessee Valley Authority), and the WPA (Works Progress Administration).

The New Deal was a series of economic programs and reforms enacted by President Franklin D. Roosevelt during the Great Depression. The New Deal sought to provide relief, recovery, and reform to the American economy. It included programs such as Social Security, the National Labor Relations Act (NLRA), and the Fair Labor Standards Act (FLSA). These programs were instrumental in helping to protect workers’ rights and providing employment opportunities during the Great Depression. However, the New Deal was controversial, with some arguing it was a “raw deal” for workers and others arguing that it helped to alleviate the suffering of millions of Americans.

The three Rs of the New Deal were 1) Relief for the needy, 2) Recovery of the economy, and 3) Reform of the financial system. Each of the New Deal Programs generally fell into one of these areas. The goal of the three Rs was to keep the United States from falling into another Economic Depression.

New Deal People and Groups

Herbert Hoover — Herbert Hoover served as the 31st President of the United States from 1929 to 1933. He faced the immense challenges of the Great Depression and was criticized for his belief in limited government intervention. Despite his efforts to address the crisis, Hoover’s presidency is often associated with economic hardships and the initial response to the Depression.

John L. Lewis — An American labor leader who was instrumental in the formation of the Congress of Industrial Organizations (CIO) in 1935. He was a key figure in the Second New Deal and helped to pass the National Labor Relations Act (NLRA). He was also responsible for leading several major strikes during the Great Depression, including the United Mine Workers strike of 1934. Lewis worked to protect workers’ rights and provide employment opportunities during the Great Depression.

Franklin D. Roosevelt — Franklin D. Roosevelt was the 32nd President of the United States, serving from 1933 to 1945. He was elected to the presidency during the Great Depression, and his presidency is closely associated with the New Deal, a series of policies and programs aimed at addressing the economic crisis and promoting economic recovery. He was re-elected for an unprecedented four terms and his leadership during the Great Depression and World War II solidified the role of the Federal government in the American economy and society.

Eleanor Roosevelt — The wife of Franklin D. Roosevelt and one of the most influential First Ladies in American history. She was an advocate for civil rights and women’s rights, and she used her position to promote social reform.

FDR’s Brain Trust — A group of advisors to President Franklin D. Roosevelt who helped him develop the New Deal. They included prominent academics and intellectuals such as Raymond Moley, Rexford Tugwell, and Adolf Berle.

New Deal Democrats —  New Deal Democrats were a faction within the Democratic Party during the 1930s and 1940s that supported Franklin D. Roosevelt’s New Deal policies. These Democrats supported increasing government intervention in the economy and expanding social welfare programs.

United Mine Workers — A labor union that was formed in 1890. The union was instrumental in the formation of the Congress of Industrial Organizations (CIO) in 1935 and led several major strikes during the Great Depression, including the United Mine Workers strike of 1934.

Hundred Days Congress — The Hundred Days Congress was a special session of the United States Congress that ran from March 9 to June 16, 1933. It was called in response to the economic crisis of the Great Depression and was used to pass a number of laws known as the New Deal. During this period, President Franklin D. Roosevelt proposed a series of sweeping reforms designed to provide relief for those affected by the depression, as well as to stimulate the economy. The Hundred Days Congress passed a number of laws, including the Emergency Banking Relief Act, the Glass-Steagall Act, and the National Industrial Recovery Act.

New Deal Events

1932 Presidential Election — The 1932 Presidential Election marked a pivotal moment in American history as the nation grappled with the Great Depression. It was primarily a contest between Republican incumbent Herbert Hoover and Democratic candidate Franklin D. Roosevelt (FDR). FDR emerged victorious, promising a “New Deal” to combat the Depression and implementing a series of reforms that fundamentally reshaped the role of the federal government.

Bank Holiday — A bank holiday is a period of time during which banks are closed, usually by government order. In 1933, President Franklin D. Roosevelt declared a national bank holiday in order to address the banking crisis caused by the Great Depression. During the holiday, which lasted four days, the government examined the books of all banks and only those that were found to be sound were allowed to reopen. This action helped stabilize the banking system and restore public confidence in banks.

Fireside Chats — The Fireside Chats were a series of radio addresses given by President Franklin D. Roosevelt during his presidency. The chats were designed to provide the American people with information about the government’s policies and actions and to explain the reasoning behind them in plain language. The chats were informal and conversational in tone, and they were delivered from the White House, often in the evening, giving the impression that Roosevelt was speaking directly to the American people from the warmth and comfort of their own homes. The Fireside Chats were a powerful tool for Roosevelt to communicate with the American people, build public support for his policies and maintain public confidence during a time of economic crisis.

Great Depression — The Great Depression refers to the severe economic downturn that occurred in the United States and other countries during the 1930s. It was characterized by widespread unemployment, poverty, and a sharp decline in industrial production and trade—ultimately leading to a fundamental restructuring of the American economy and significant social and political changes.

Roosevelt Recession — A period of economic contraction that occurred during the Great Depression, starting in 1937 and lasting until 1938. It was caused by a combination of factors, including President Franklin D. Roosevelt’s decision to reduce government spending, an increase in taxes, and the Federal Reserve’s decision to raise interest rates. This resulted in a decrease in consumer spending and investment, leading to a decrease in economic activity. The Roosevelt Recession was a major setback for the New Deal and led to increased unemployment and poverty.

United Mine Workers Strike of 1934 — A major strike led by the United Mine Workers Union during the Great Depression. The strike was in response to wage cuts and other grievances. It lasted for several months and resulted in a victory for the miners, who were able to secure higher wages and better working conditions.

New Deal Programs

Agricultural Adjustment Act (1933) — A law passed by Congress in 1933 as part of the New Deal. The AAA was designed to help farmers by providing subsidies for reducing crop production and encouraging soil conservation. It also established the Agricultural Adjustment Administration (AAA), which was responsible for implementing the provisions of the act. The AAA was instrumental in helping to stabilize agricultural prices and providing economic relief to farmers during the Great Depression.

Civilian Conservation Corps (CCC) — The CCC provided employment for young men between the ages of 18 and 25, who were paid to work on conservation projects such as planting trees, building roads, and constructing dams. The CCC also provided educational opportunities for its workers, including classes in literacy, math, and vocational skills. The CCC was instrumental in helping to restore the environment and providing employment opportunities during the Great Depression.

Civil Works Administration (CWA) — An agency created by the Federal Emergency Relief Act of 1933 as part of the New Deal. The CWA was responsible for providing jobs to millions of Americans during the Great Depression. It provided employment in construction, repair, and maintenance projects such as building roads, bridges, and public buildings. The CWA was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

Emergency Banking Relief Act (1933) — A law passed by Congress in 1933 which allowed the federal government to provide emergency loans to banks in order to stabilize the banking system. The act was part of President Franklin D. Roosevelt’s New Deal and was designed to restore public confidence in the banking system. It provided for the reopening of solvent banks, the reorganization of insolvent banks, and the establishment of a Federal Deposit Insurance Corporation (FDIC) to insure deposits up to $2,500. The act was instrumental in helping to stabilize the banking system during the Great Depression and restoring public confidence in banks.

Federal Deposit Insurance Corporation (FDIC) — An independent agency of the United States government created in 1933 as part of the New Deal. The FDIC provides insurance for deposits up to a certain amount in member banks, protecting depositors from losses due to bank failures. The FDIC also regulates and supervises financial institutions to ensure that they are operating safely and soundly. It is one of the most important financial regulatory agencies in the United States and has helped to restore public confidence in the banking system.

Federal Emergency Relief Act (1933) — A law passed by Congress in 1933 as part of the New Deal. The FERA provided federal funds to states and local governments to create relief programs for the unemployed. It also established the Civil Works Administration (CWA), which was responsible for providing jobs to millions of Americans during the Great Depression. The FERA was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

Federal Housing Administration (FHA) — An agency created by the National Housing Act of 1934 as part of the New Deal. The FHA was responsible for providing mortgage insurance to lenders, which allowed them to make home loans with lower down payments and easier credit requirements. This helped to increase homeownership and provided jobs to thousands of Americans during the Great Depression. The FHA helped stabilize the housing market and provide employment opportunities during the Great Depression.

Glass-Steagall Act (1933) — The Glass-Steagall Act was a law passed by Congress in 1933 as part of the New Deal. It was designed to separate commercial and investment banking, and it prohibited banks from engaging in certain types of speculative investments. The act also established the Federal Deposit Insurance Corporation (FDIC), which provided insurance for bank deposits up to a certain amount. The Glass-Steagall Act helped restore public confidence in the banking system and prevent another financial crisis.

National Industrial Recovery Act (1933) —  The National Industrial Recovery Act (NIRA) was a law passed by Congress in 1933 as part of the New Deal. It was designed to stimulate economic growth by providing government assistance to businesses, setting minimum wages and maximum hours for workers, and establishing codes of fair competition. The NIRA also established the National Recovery Administration (NRA), which was responsible for enforcing the provisions of the act. The NIRA was eventually declared unconstitutional by the Supreme Court in 1935.

The Public Works Administration (PWA) — An agency created by the National Recovery Administration of 1933 as part of the New Deal. The PWA was responsible for providing jobs to millions of Americans during the Great Depression. It provided employment in construction, repair, and maintenance projects such as building roads, bridges, and public buildings. The PWA played an important role in helping to alleviate poverty and providing employment opportunities during the Great Depression.

The Tennessee Valley Authority (TVA) — An agency created by the Tennessee Valley Authority Act of 1933 as part of the New Deal. The TVA was responsible for developing the infrastructure and resources of the Tennessee Valley region, including hydroelectric power, flood control, navigation, reforestation, and soil conservation. It also provided jobs to thousands of Americans during the Great Depression. The TVA played an important role in helping modernize the region and providing employment opportunities during the Great Depression.

Second New Deal Programs

Committee for Industrial Organizations (CIO) — An organization formed in 1935 as part of the Second New Deal. The CIO was responsible for organizing workers into unions and bargaining collectively with employers.

Fair Labor Standards Act (1938) — An act passed in 1938 as part of the Second New Deal. The Fair Labor Standards Act was responsible for establishing a minimum wage, overtime pay, and other labor standards.

National Labor Relations Act (1935) — An act passed in 1935 as part of the Second New Deal. The NLRA was responsible for protecting the rights of workers to organize and bargain collectively with their employers. It also established the National Labor Relations Board (NLRB), which was responsible for enforcing the provisions of the act.

Social Security Act (1935) — An act passed as part of the Second New Deal. The Social Security Act was responsible for providing economic security to Americans through the establishment of a federal retirement program and other welfare programs. It also provided unemployment insurance and disability benefits.

Wagner Act — Also known as the National Labor Relations Act (NLRA), it was passed in 1935 as part of the Second New Deal. The Wagner Act was responsible for protecting the rights of workers to organize and bargain collectively with their employers. It also established the National Labor Relations Board (NLRB), which was responsible for enforcing the provisions of the act.

Works Progress Administration (WPA) — An agency created by the Emergency Relief Appropriation Act of 1935 as part of the Second New Deal. The WPA was responsible for providing jobs to millions of Americans during the Great Depression. It funded a variety of projects, including construction, infrastructure development, and arts and culture programs. The WPA was instrumental in helping to stimulate the economy and providing employment opportunities during the Great Depression.

More New Deal Terms and Definitions

21st Amendment — The amendment to the U.S. Constitution that repealed the 18th Amendment and ended Prohibition. The 21st Amendment was ratified in 1933 as part of the New Deal and allowed states to regulate the sale and consumption of alcohol within their borders. It also gave states the power to collect taxes on alcohol sales, which provided a much-needed source of revenue during the Great Depression.

Boondoggling — A term coined by President Franklin D. Roosevelt to describe wasteful government spending on public works projects. The term was used to criticize the New Deal programs, which were seen as a form of government waste and corruption. Boondoggling became a popular term during the Great Depression and is still used today to refer to any wasteful or unnecessary government spending.

Tennessee River Valley — The Tennessee River Valley refers to the region in the southeastern United States encompassing parts of Tennessee, Alabama, and Kentucky. It gained prominence during the New Deal era due to the establishment of the Tennessee Valley Authority (TVA), a federal agency tasked with developing the area’s water resources, controlling flooding, and promoting economic development through hydroelectric power generation and irrigation projects.

National Parks — National Parks are protected areas designated by the federal government to preserve and showcase the country’s natural, historical, and cultural heritage. These areas, managed by the National Park Service, offer opportunities for recreation, conservation, and education. Notable examples include Yellowstone, Yosemite, and the Grand Canyon. National Parks serve as significant landmarks and contribute to the nation’s tourism industry and environmental conservation efforts.

Why is the New Deal important?

The New Deal is important to United States history for several reasons:

1. Response to the Great Depression: The New Deal was a direct response to the economic crisis of the Great Depression, which was one of the most challenging periods in American history. It represented a major shift in the role of the federal government in addressing economic issues and providing relief to citizens.

2. Economic Recovery and Relief: The New Deal implemented a range of programs and policies aimed at stabilizing the economy, creating jobs, and providing relief to those affected by the Great Depression. It helped alleviate immediate suffering and provided assistance to millions of Americans through employment, financial aid, and social welfare programs.

3. Expansion of Federal Government Power: The New Deal marked a significant expansion of the federal government’s role in regulating the economy and addressing social issues. It introduced new agencies and programs, such as the Works Progress Administration (WPA) and Social Security, that had long-lasting impacts on American society and established a precedent for increased government intervention in the economy.

4. Transformation of American Society: The New Deal’s programs had a transformative effect on American society. It brought about improvements in infrastructure, public works, and conservation projects, enhancing the nation’s physical landscape. It also introduced labor reforms, such as the right to unionize and the establishment of minimum wage standards, which aimed to improve working conditions and workers’ rights.

5. Legacy and Long-Term Impacts: Many of the programs and policies initiated during the New Deal era had lasting impacts on American society. Social Security, for example, continues to provide financial security to elderly and disabled Americans. The New Deal also shaped the political landscape, as the Democratic Party under FDR gained support from various social groups and established a coalition that would dominate American politics for decades.

• Written by Randal Rust

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Article contents

The new deal.

• Wendy L. Wall Wendy L. Wall Department of History, SUNY Binghamton
• https://doi.org/10.1093/acrefore/9780199329175.013.87
• Published online: 22 December 2016

The New Deal generally refers to a set of domestic policies implemented by the administration of Franklin Delano Roosevelt in response to the crisis of the Great Depression. Propelled by that economic cataclysm, Roosevelt and his New Dealers pushed through legislation that regulated the banking and securities industries, provided relief for the unemployed, aided farmers, electrified rural areas, promoted conservation, built national infrastructure, regulated wages and hours, and bolstered the power of unions. The Tennessee Valley Authority prevented floods and brought electricity and economic progress to seven states in one of the most impoverished parts of the nation. The Works Progress Administration offered jobs to millions of unemployed Americans and launched an unprecedented federal venture into the arena of culture. By providing social insurance to the elderly and unemployed, the Social Security Act laid the foundation for the U.S. welfare state.

The benefits of the New Deal were not equitably distributed. Many New Deal programs—farm subsidies, work relief projects, social insurance, and labor protection programs—discriminated against racial minorities and women, while profiting white men disproportionately. Nevertheless, women achieved symbolic breakthroughs, and African Americans benefited more from Roosevelt’s policies than they had from any past administration since Abraham Lincoln’s. The New Deal did not end the Depression—only World War II did that—but it did spur economic recovery. It also helped to make American capitalism less volatile by extending federal regulation into new areas of the economy.

Although the New Deal most often refers to policies and programs put in place between 1933 and 1938, some scholars have used the term more expansively to encompass later domestic legislation or U.S. actions abroad that seemed animated by the same values and impulses—above all, a desire to make individuals more secure and a belief in institutional solutions to long-standing problems. In order to pass his legislative agenda, Roosevelt drew many Catholic and Jewish immigrants, industrial workers, and African Americans into the Democratic Party. Together with white Southerners, these groups formed what became known as the “New Deal coalition.” This unlikely political alliance endured long after Roosevelt’s death, supporting the Democratic Party and a “liberal” agenda for nearly half a century. When the coalition finally cracked in 1980, historians looked back on this extended epoch as reflecting a “New Deal order.”

• Franklin Delano Roosevelt
• Great Depression
• Hundred Days
• work relief
• industrial unionism
• Tennessee Valley Authority
• Works Progress Administration
• Social Security

Defining the “New Deal”

On July 2, 1932 , Franklin Delano Roosevelt (FDR) accepted the Democratic Party’s nomination for president and pledged himself to a “new deal for the American people.” 1 In so doing, he gave a name not only to a set of domestic policies implemented by his administration in response to the crisis of the Great Depression but also to an era, a political coalition, and a vision of government’s role in society. The New Deal has been described as a “potpourri” of sometimes-conflicting policy initiatives, and scholars and popular commentators have long debated its ideological sources, beneficiaries, and legacy. 2 Nevertheless, most agree that it marked “a pivotal moment in the making of modern American liberalism.” 3 As this suggests, the New Deal cast a long shadow over the remainder of the 20th century, and it remains a touchstone for contemporary political debate.

When Roosevelt took office in March 1933 , the nation was more than three years into the greatest economic cataclysm that either the United States or global capitalism had ever experienced. The stock market crash in October 1929 had led to a financial meltdown, prompting a collapse in industrial production that began in the United States but soon spread to other countries. A rise in prices for raw materials—commodities ranging from cotton and wheat to tea, silk, lumber, and steel—soon followed. This prostrated farmers, miners, and loggers, not only in the United States but also around the globe. By the spring of 1933 , the U.S. gross national product had fallen to just half of its 1929 level. More than five thousand U.S. banks had failed, and thousands of families across the country had already lost farms and homes to foreclosure. On the day Roosevelt was inaugurated, roughly one-quarter of the American workforce was unemployed. In cities like Chicago and Detroit, home to hard-hit industries like automobiles and steel, the unemployment rate approached 50 percent. 4

On the campaign trail, Roosevelt had been vague about precisely how he planned to grapple with the economic crisis: He famously recommended “bold, persistent experimentation.” 5 Once in office, the president turned his abundant energy to implementing this pragmatic philosophy. He surrounded himself with advisors who had strikingly different viewpoints and agendas, and set them to work tackling a troika of problems: relief, recovery, and reform. 6 The result was one of the greatest outpourings of legislation ever seen in American history. Between 1933 and 1938 , Roosevelt and his New Dealers pushed through legislation that, among other things, regulated the banking and securities industries, shored up agricultural prices, established vast public works projects, repealed Prohibition, created new mortgage markets, managed watersheds, reversed a half century of American Indian policy, bolstered the power of unions, and provided social insurance to millions of elderly, unemployed, and disabled Americans. As historian David M. Kennedy has written, “Into the five years of the New Deal was crowded more social and institutional change than into virtually any comparable compass of time in the nation’s past.” 7

As Kennedy suggests, the term New Deal is most often used to refer to the set of domestic policies implemented by the Roosevelt administration in the 1930s in response to the Great Depression. In this narrow sense, the “New Deal” might be seen as paralleling Teddy Roosevelt’s “Square Deal,” Harry Truman’s “Fair Deal,” or Lyndon B. Johnson’s “Great Society.” Scholars have also used the term more expansively to encompass later domestic legislation that seemed to be animated by the same values and impulses. Glenn Altschuler and Stuart Blumin, for instance, argue that the 1944 GI Bill built on specific New Deal policies, while reflecting FDR’s broader desire to use the power of the federal government to extend a safety net to American citizens. For this reason, they dub the GI bill “a New Deal for veterans.” 8 Ira Katznelson goes even further, redefining the New Deal as “the full period of Democratic rule” that stretched from Roosevelt’s election in 1932 to the election of Dwight Eisenhower two decades later. Only by looking at this longer time span, he suggests, can historians understand how the New Deal “reconsidered and rebuilt the country’s long-established political order.” 9

If some historians have extended the chronology of the New Deal, others have expanded its geographic scope. Scholars have most often applied the term to FDR’s domestic agenda, but Elizabeth Borgwardt argues that there was also a “New Deal for the world.” As World War II drew to a close, she suggests, Roosevelt administration planners translated “the New Deal’s sweeping institutional approaches to intractable problems” to the international arena, establishing a framework of multilateral institutions designed to stabilize the global system and advance human rights. The International Monetary Fund, the World Bank, the United Nations, and the charter that set the parameters for the Nuremberg Trials were designed to extend economic and political security to people around the globe, she writes, “much as New Deal programs had redefined security domestically for individual American citizens.” 10 In a similar vein, Kiran Klaus Patel argues that the United States “played a major role in redefining the international order by trying to project the principles of the New Deal regulatory state onto the world.” 11 Sarah Phillips suggests that the success of New Deal programs like the Tennessee Valley Authority (TVA) convinced many liberals that they had “found the tools for conquering the problem of rural poverty.” The postwar Point Four program of foreign assistance, she argues, drew on these lessons and attempted to “export the New Deal.” 12

Neither the domestic nor the global New Deal would have been possible had FDR not mobilized a new political coalition. From 1896 until 1932 , the Republican Party dominated national politics; only in the “Solid South,” which had opposed Republicans since the Civil War, did the Democratic Party consistently win elections. In 1932 , Roosevelt swept into office largely because of widespread animosity toward President Herbert Hoover, who had failed to end the Depression or significantly ameliorate suffering. Over the next four years, however, Roosevelt won over Catholic and Jewish immigrants and their voting-age children, industrial workers, African Americans, and large segments of the so-called chattering classes. Together with white Southerners, these groups formed what became known as the “New Deal coalition.”

The New Deal coalition brought together unlikely bedfellows—for instance, African Americans and union members with conservative white Southerners who opposed racial equality and organized labor. Nevertheless, this unwieldy political alliance endured long after Roosevelt’s death, supporting the Democratic Party and a “liberal” agenda for nearly half a century. Every president elected between 1932 and 1980 was a Democrat, with the exceptions of Dwight Eisenhower and Richard Nixon. The Democratic Party also controlled both houses of Congress for all but four of those 48 years. When the coalition finally cracked in 1980 , historians looked back on this extended epoch as reflecting a “New Deal order” with “an ideological character, a moral perspective, and a set of political relationships among policy elites, interest groups, and electoral constituencies.” 13

Battling the Great Depression

Before scholars could reflect on a New Deal “order,” there was what FDR and his contemporaries called simply the New Deal: the set of policies put in place during Roosevelt’s first two presidential terms in direct response to the ravages of the Great Depression. Most of that legislation came in one of two great bursts. The first followed Roosevelt’s inauguration on March 4, 1933 . 14 Within days of taking office, the new president called Congress into special session. By the time Congress adjourned precisely one hundred days later, Roosevelt had signed fifteen bills into law. Taken together, they restructured vast swaths of the American economy and authorized billions of dollars in federal spending for everything from dam construction and crop subsidies to unemployment relief. Roosevelt proposed—and Congress passed—so much legislation during this first “Hundred Days” that the time frame became a benchmark for all subsequent U.S. political leaders.

The second burst of legislation came in the first nine months of 1935 . The previous November, the president’s party had bucked historical trends by winning, rather than losing, seats in the midterm election. The victory was a landslide: When the new Congress convened in January 1935 , Democrats held two-thirds of the seats in both the House and the Senate. The election signaled the political realignment that created the New Deal coalition, and it gave Roosevelt a mandate. This second legislative burst enabled some of the best-remembered policies of the New Deal, including the Works Progress Administration, federal support for organized labor, and the Social Security program.

Contemporary journalists called these two torrents of legislation the First and Second New Deal, and historians have generally followed their lead. For decades, both scholars and popular writers argued that the two phases of the New Deal were ideologically distinct, although they often disagreed on the precise nature of that difference. 15 In recent years, historians have suggested that any ideological shift between 1933 and 1935 was exaggerated. Many have embraced the argument made by David Kennedy that New Deal policies were designed, above all, to provide security—security not only for “vulnerable individuals” but also for capitalists, consumers, workers, farmers, homeowners, bankers, and builders. “Job security, life-cycle security, financial security, market security—however it might be defined, achieving security was the leitmotif of virtually everything the New Deal attempted,” Kennedy writes. 16

Stabilizing the Financial System

The most urgent matter that Roosevelt confronted when he took office in March 1933 was the banking crisis. The nation’s banking system had been teetering on the edge of collapse since the end of 1930 as fearful domestic and foreign investors scrambled to pull their gold and currency deposits out of U.S. institutions. A new round of panic the month before the inauguration prompted governors in state after state to close their banks to prevent runs. On the morning FDR became president, such “bank holidays” had closed all banks in 32 states. In six more, the vast majority of banks were closed. In the remainder, depositors could withdraw only 5 percent of their funds. 17

Some politicians and political observers urged Roosevelt to nationalize the banking system. 18 Instead, the new president declared a national bank holiday, called Congress into emergency session, and persuaded them to pass the Emergency Banking Act. That act affirmed the temporary bank closure, authorized the Federal Reserve to issue more currency, and took other steps designed to restore the system’s liquidity. With banks set to reopen on March 13, Roosevelt took to the airwaves, delivering the first of the radio addresses that would become known as “fireside chats.” Using simple language and speaking in an authoritative yet avuncular voice, Roosevelt explained both the workings of the banking system and the steps that the federal government had just taken to preserve it. “I can assure you,” the president told his 60 million listeners, “that it is safer to keep your money in a reopened bank than under the mattress.” 19 Roosevelt’s combination of quick action and calming explanation worked. As his advisor Raymond Moley later wrote, “Capitalism was saved in eight days.” 20

New Deal efforts to shore up the banking system did not end with these emergency measures. A few months later, Congress passed the Glass-Steagall Act, which separated investment from commercial banking in an effort to insure that banks did not speculate with depositors’ savings. The act also established the Federal Deposit Insurance Corporation, which guaranteed bank deposits up to an initial level of $2,500. (That figure has been raised many times since.) Although FDR initially opposed deposit insurance, it almost immediately halted bank runs. These two moves dramatically stabilized the banking system. Even during the prosperous 1920s, more than six hundred U.S. banks had failed each year. In the early 1930s, that number climbed into the thousands. Beginning in 1934 , fewer than a hundred U.S. banks failed annually; by 1943 , the number had dropped to under ten. 21

Other New Deal financial measures were aimed at steadying the securities markets or strengthening the economy more generally. In the spring of 1933 , FDR followed Britain’s lead and took the United States off the gold standard, allowing the exchange value of the dollar to fall. One of the president’s advisors warned that the move would spell “the end of Western civilization,” but it gave New Dealers more flexibility to combat low prices by trying to stimulate inflation. Coupled with political instability in Europe, the end of the gold standard also prompted overseas investors to begin exchanging gold for dollars, further increasing the U.S. money supply and bolstering the banks. 22 The Securities Act of 1933 sought to end insider trading in the stock market by requiring publically traded companies to disclose financial information. The following year, Congress created the Securities and Exchange Commission to guard against market manipulation. Finally, the Banking Act of 1935 put the Federal Reserve’s Open Market Committee—the body that influenced the nation’s money supply and thus the availability of credit—under the direct control of a Board of Governors appointed by the president. This move helped centralize the nation’s banking system, and improved the Federal Reserve’s ability to shape the business cycle.

Relief for the Unemployed

Having stabilized the banking system, FDR turned quickly to the problem of unemployment relief. In the spring of 1933 , some 12.4 million men and 400,000 women—roughly one-quarter of the national workforce—were unemployed. Most were their families’ principal breadwinners. 23 The collective need of these American families had already overwhelmed the resources of local governments and private charities, as well as family and community support networks. With millions unable to pay rent or buy food, men, women, and children lined up at soup kitchens, grubbed for scraps in garbage cans, hopped freight trains, or moved into makeshift shantytowns that sprang up in parks and open spaces on the edges of American cities.

FDR first focused on the problem posed by young men—a problem captured in a 1933 film entitled The Wild Boys of the Road . Teenagers and men in their twenties had fewer skills and less experience than their older counterparts; thus, they were more likely to be unemployed, to leave home, and to become hobos and vagrants. Events in Europe suggested the threat that such footloose young men might pose to the social order. Roosevelt believed that sending them to work in the countryside would not only improve the nation’s rural infrastructure but also transform the young men into upstanding future citizens. He proposed a Civilian Conservation Corps (CCC) to employ those between the ages of 18 and 35 on a variety of forestry, flood control, and beautification projects. To be selected for the program, men had to be single, healthy, and U.S. citizens and to come from families on relief. Living in military-style camps operated by the War Department, they built roads, firebreaks, trails, and campgrounds. They also planted trees, fought fires, and drained swamps. CCC workers served stints of less than two years and were required to send home $25 of the $30 they earned each month to their families. Between the program’s establishment in 1933 and its expiration nine years later, the CCC put three million young men to work. It quickly became one of the New Deal’s most popular initiatives, and remained popular even in conservative areas. 24

Although the CCC kept many young men from taking to the road, it was hardly enough to relieve the distress of American families. Thus, Roosevelt urged establishment of a new agency, the Federal Emergency Relief Administration (FERA). He persuaded Congress to appropriate $500 million to FERA, and used it to provide direct relief to needy Americans who were able to pass a means test. Some FERA funds were funneled through the states. Others were passed out by Harry Hopkins, the former social worker whom FDR tapped to run the agency. Hopkins had held a similar position in New York State when Roosevelt was governor there. Both men felt great sympathy for the poor, and both also knew how to use FERA to political advantage. By enlarging the federal role in awarding relief, they helped to transfer the political allegiance of America’s unemployed from local officials and political machines to Washington, D.C.

FERA made life marginally easier for many, but it never had sufficient funds. As the United States headed into the fifth winter of the Depression, unemployment remained high. In November 1933 , Hopkins persuaded Roosevelt to establish yet another agency to employ people directly. Drawing tools and materials from army warehouses, the Civil Works Administration (CWA) put Americans to work fixing roads, docks, and schools; laying sewer pipe; and installing outhouses for farm families. The CWA paid far more than FERA and did not subject all workers to a means test; it was soon employing more than 4 million men and women. By February 1934 , the CCC, FERA, and CWA together were reaching 22 percent of the U.S. population, an all-time high for public welfare in the United States. The president, however, worried both about the escalating costs of such programs and about relief becoming “a habit with the country.” He ordered the CWA to close down at the end of March, noting that nobody would starve when the weather was warm. 25

Americans made it through the rest of 1934 , but as the new Congress convened in early 1935 , the unemployment rate still hovered near 20 percent. Moreover, some 5 million Americans remained on relief. FDR and many of his advisors continued to worry about deficit spending, but they also believed that something had to be done and that only the federal government had “sufficient power and credit” to do it. Work relief cost more than direct payments, but the latter, as FDR declared in his annual message to Congress, was “a narcotic.” “The lessons of history, confirmed by the evidence immediately before me,” he added, “show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre.” FDR proposed a massive public employment program to get 3.5 million abled-bodied but jobless Americans off the relief rolls. 26

The result was the Works Progress Administration (WPA), one of the most ambitious and best-remembered New Deal programs. Headed by Hopkins, the WPA put more than 3 million people to work in its first year. Roosevelt wanted all projects to be labor intensive and useful, and when possible to come to a natural end. He also wanted WPA to pay more than relief but less than market rates so as not to compete with private enterprise. WPA workers built highways, schools, airports, parks, and bridges. They bound books, supervised recreation areas, ran school lunch programs, and sewed garments for the needy. WPA workers even entered the arena of public health, building hospitals and clinics, conducting mass immunization campaigns, and churning out posters that promoted nutrition and warned against the dangers of tuberculosis and syphilis.

Many of those posters were produced by employees of the Federal Arts Project, part of a massive and unprecedented federal venture into the arena of culture. Both Hopkins and First Lady Eleanor Roosevelt believed that the New Deal should provide work for unemployed artists, musicians, actors, and writers, and so the WPA set up a series of cultural programs known collectively as “Federal One.” The Federal Writers’ Project produced dozens of state and city guidebooks, and conducted thousands of oral histories with former slaves, immigrants, stonecutters, packinghouse workers, Oklahoma pioneers, and others. It also sent folklorists to record the music and stories of Appalachian banjo pickers, southern bluesmen, Mexican American balladeers, and Okies in resettlement camps in the West. The Federal Music Project sponsored symphony orchestras and jazz groups, while the Federal Arts Project commissioned muralists and graphic artists. Both hired individuals to teach music, painting, and sculpture to schoolchildren.

If New Dealers wanted to aid unemployed artists, they also hoped to democratize culture and to generate support for New Deal programs and political values. No New Deal initiative better illustrates this goal—or the controversy it generated—than the Federal Theatre Project, which brought plays, vaudeville acts, and puppet shows to small towns across the country. It also staged controversial shows like Orson Welles’s production of Macbeth , which featured an all-black cast. Finally, the Federal Theatre Project developed a new theatrical genre, the Living Newspaper, to dramatize current events and expose social issues. One Living Newspaper, Power , traced the development of the electrical power industry and urged greater support for public ownership of utilities. Other Living Newspapers dealt with agricultural policy, the shortage of affordable housing, the labor movement, and syphilis.

Not surprisingly, Federal One drew intense criticism from critics on the right: In June 1939 , a more conservative Congress dissolved the Federal Theatre Project, charging that it spread New Deal propaganda and encouraged racial mixing in stage productions. Budget cuts to the other cultural programs soon followed. Conservatives warned that all WPA programs were endangering the American way of life by providing jobs for the undeserving. They also complained that the WPA was simply a Democratic Party patronage machine. (FDR did use the program to reward local power brokers who supported the New Deal, although these included progressive Republicans like New York City’s Mayor Fiorello La Guardia, as well as Democratic political bosses in cities like Chicago and Memphis.) 27

Not all criticism of the WPA came from the right. Leftist critics noted that the WPA was chronically underfunded; despite its size, it could provide jobs for only a third of those who needed them in the United States. 28 To avoid competing with the private sector, WPA jobs always paid less than the “prevailing wage” in a given community. Since that standard differed by region, gender, and race, it reinforced existing patterns of discrimination. The editors of The Nation complained that the program required workers to toil “at depressed wages in a federal work gang” and was “a morbid substitute for relief.” 29 Nevertheless, between 1935 and its dismantling in 1943 , the WPA employed some 8.5 million Americans, roughly one-fifth of the nation’s workforce, at a total cost of roughly $11 billion. Many were grateful to have a job rather than a handout. “We aren’t on relief anymore,” the wife of one WPA worker reportedly said. “My husband is working for the Government.” 30

Aiding Farmers

Both the crisis in the banking system and the spike in unemployment were problems brought on by the Great Depression. The plight of America’s farmers had deeper roots, however. Rural America had been mired in depression since shortly after the end of World War I, a situation that farmers found particularly vexing given the general economic prosperity of the 1920s. 31 The deflationary spiral of the early 1930s pushed farm income down an additional 60 percent. 32 Across the country, crops rotted in the field because prices were so low that farmers could not justify harvesting them. Western ranchers slit the throats of livestock they could afford neither to feed nor to market. Dairymen in upstate New York dumped milk into ditches, while growers in California lit mountains of oranges on fire. 33 Since taxes and mortgage payments did not fall, farmers across the country lost homes, land, and equipment to foreclosure. Many rebelled, joining “farm strikes,” disrupting auctions, and nearly lynching an Iowa judge who refused to suspend foreclosure proceedings.

New Dealers believed that boosting farm incomes would help not only rural Americans but also the entire U.S. economy. In 1933 , farmers still made up roughly one-third of the nation’s workforce, and their purchasing power dramatically lagged that of residents in urban areas. By restoring prosperity to the farm economy, New Dealers argued, they would increase farmers’ ability to buy nonfarm goods, in turn contributing to a more general economic recovery. Such reasoning reflected not only the thought of many in the Roosevelt administration regarding the economy, but also their tendency to romanticize the nation’s pastoral past and their awareness of the continuing political power of rural America. 34

The centerpiece of the New Deal’s efforts to raise farm incomes was the Agricultural Adjustment Act (AAA), passed in May 1933 . The act charged the federal government with raising the price for key farm commodities in order to bring the prices that farmers received for their products into balance or “parity” with their production and living costs. It pointed to the years just before World War I as the ideal of parity. While the act was vague about the exact mechanism the government should use to achieve this end, it established a new agency and sanctioned a variety of remedies that farm advocates had been battling over for years. To prevent farmers from planting surplus crops, the AAA levied a tax on flour millers and other crop processors and used the proceeds to pay farmers for taking land out of production. At the same time, the agency tried to maintain a floor under prices by keeping harvested crops off the market when prices were low. It did this by offering farmers loans secured by their crops at above-market rates, then storing the surplus. If crop prices rose, farmers could repay the loans, redeem their crops, and sell at the higher prices. Finally, the act established a Farm Credit Administration (FCA) to provide mortgage relief to farmers.

From the beginning, the New Deal’s farm policy proved controversial. Cotton and wheat farmers had already planted their crops by the time the farm bill passed. A severe drought on the plains constrained the wheat supply naturally, but AAA officials paid farmers to plow up 10 million acres of cotton. The agency also bought and slaughtered some 6 million piglets and 200,000 sows to prevent a future glut of hogs. 35 While much of this pork eventually fed hungry people, the destruction of crops and livestock angered many Americans. When journalist Lorena Hickok went on a fact-finding tour for the administration in the fall of 1933 , people in Minnesota and Nebraska complained to her about the New Dealers’ methods. 36 “As long as there are 25 million hungry people in this country, there’s no overproduction,” one Iowa farm leader declared. “For the government to destroy food and reduce crops at such a time is wicked.” 37

Considered in the aggregate, rural America benefited from New Deal farm policies. Within 18 months of its establishment, the FCA had refinanced one-fifth of all farm mortgages. 38 Prices for crops like corn, wheat, and cotton surged, and net farm income rose by 50 percent between 1932 and 1936 . 39 Yet these benefits were not evenly distributed, and AAA policies often exacerbated the plight of tenant farmers and sharecroppers. New Deal officials relied heavily on county-level committees to set production quotas, monitor acreage-reduction contracts, and dispense federal payments. Agricultural Secretary Henry Wallace considered this decentralized approach to be “economic democracy in action,” but local committees were often dominated by the largest growers. 40 Large planters and landowners frequently pocketed checks for keeping acreage fallow, then pushed out the tenants and sharecroppers who were actually farming the land. In the South, many of these sharecroppers were African Americans, and so they bore the brunt of such policies. In California, where “factory farms” used migratory laborers, growers rarely restored wages to pre-Depression levels, even after prosperity returned. Tenants, sharecroppers, and farmworkers sometimes fought back—joining groups like the Southern Tenant Farmers Union and the Cannery and Agricultural Workers Industrial Union—but such efforts often provoked violent reprisals. Liberals within the Department of Agriculture who pleaded the case of the disempowered were purged. 41

Although the Roosevelt administration did little to keep tenants and sharecroppers on their land, it did establish two agencies ostensibly designed to give impoverished farmers a fresh start. The Resettlement Administration (RA), set up in 1935 , built three “greenbelt” towns, which were close to big cities and surrounded by countryside. In 1937 , it was absorbed into a new agency, the Farm Security Administration (FSA), which established a chain of migrant labor camps and granted low-interest loans to enable some tenants to buy farms. Both agencies, however, faced opposition from farm corporations and southern landlords who wanted to keep their cheap labor. The RA had hoped to move half a million farm families, but ultimately resettled fewer than 5,000. 42 Photographers hired by the FSA to document America and build support for New Deal programs provided many of the most iconic pictures of the Great Depression, and the agency’s migrant camps came to public attention when John Steinbeck depicted one in his epic novel The Grapes of Wrath in 1939 . Nevertheless, the FSA’s congressional opponents kept its appropriations low, limiting its ability to make a real dent in rural poverty.

Conservation and Regional Change

As FSA photographs and books like The Grapes of Wrath attested, the problems plaguing rural America were not limited to low commodity prices. Across the nation, uncontrolled lumbering had scarred and depleted forests, while intensive farming had ravaged the land. Meanwhile, droughts, wind, and floods depleted the soil. A massive flood on the Mississippi River in 1927 inundated thousands of square miles and displaced some 700,000 people. 43 A single dust storm on the Great Plains in May 1934 sucked 350 million tons of topsoil into the air and deposited it as fair east as New York City and Boston. 44 New Dealers believed that only by developing more sustainable agriculture—and by distributing natural resources more equitably—could the living standards of Americans in rural areas be brought up to the same level as those of their urban counterparts.

To achieve this, New Dealers undertook a variety of initiatives. They retired land, sought to restore forests and soil, engaged in flood control and irrigation projects, and produced cheap hydropower to fuel farms and new industries. Historian Sarah Phillips has suggested that these projects reflected a “New Conservation,” focused less on the preservation of wild areas or the efficient use of natural resources than on the welfare of rural residents. 45 Since the South and West were the most rural parts of the nation, those regions benefited disproportionately. In fact, New Deal land use and energy policies contributed to the emergence of what would eventually become known as the “Sunbelt.” 46

The first, most ambitious, and ultimately most successful of these New Deal projects was the Tennessee Valley Authority (TVA), established by Roosevelt during his first Hundred Days. Cutting across seven states in one of the most impoverished parts of the nation, the TVA brought economic progress and hope to a region that had seen little of either since the end of the Civil War. In addition to most of Tennessee, the TVA covered swaths of Kentucky, Mississippi, Alabama, Virginia, North Carolina, and Georgia. TVA dams prevented spring floods from displacing residents and washing away topsoil. They also provided ample cheap electricity, which the agency sold to rural co-ops and municipal power systems. TVA experts developed fertilizer, built model towns, upgraded schools and health facilities, planted trees, and restored fish and wildlife habitats. In 1933 , 2 percent of farms in this region had electricity; by 1945 , 75 percent were electrified. Cheap electricity also attracted new industries to the region, including such corporate behemoths as Monsanto and the Aluminum Company of America (ALCOA). 47 Through its generation of power, not only did the TVA help to modernize the upper South, but it also inserted the federal government more fully and permanently into the private economy than did any other New Deal agency.

The success of the TVA prompted New Dealers to dive more fully into rural electrification. Private power companies had long argued that they could not afford to provide electricity to isolated farms and small, rural communities. As a result, many Americans were still living without the benefits of running water, indoor toilets, lights, refrigeration, or labor-saving devices. In 1935 , over the protests of private utilities, New Dealers convinced Congress to establish the Rural Electrification Administration (REA), a move that profoundly changed rural lives. The REA sponsored the creation of hundreds of nonprofit electric cooperatives and offered them low-cost loans for generating plants and power lines. In the early 1930s, fewer than one in ten American farms had electricity. By 1941 , the number had risen to four in ten. By 1950 , 90 percent of U.S. farms were electrified. 48

Industrial Policy

If rural electrification was one of the New Deal’s greatest successes, industrial policy was one of its biggest failures. When FDR took office, both he and his advisors were convinced that the economy needed a major stimulus, but few agreed on what form that should take. Some businessmen and New Dealers considered the Depression the result of destructive competition. They argued for suspending antitrust laws and forging industry-wide agreements that would allow businesses to stabilize prices, end overproduction, and ultimately raise wages. Others, more distrustful of the business community, argued either for stimulating competition or for engaging in national economic planning. Many advocated federal spending on public-works projects to “prime” the economic pump; yet the president and most around him still hoped to avoid running federal deficits. This policy discord prevented FDR from taking any action until near the end of his first Hundred Days. When the Senate passed a work-sharing bill that the president opposed, he ordered staffers who favored differing plans to shut themselves in a room and develop a compromise. 49

The resulting bill, which Roosevelt proposed in May 1933 , contained what one of his advisors later called “a thorough hodge-podge of provisions.” 50 Declaring a state of industrial emergency, it largely suspended antitrust laws and created the National Recovery Administration (NRA) to oversee the development of codes to regulate prices, wages, hours, and working conditions for hundreds of industries. Section 7a of the bill gave industrial workers the right “to organize and bargain collectively through representatives of their own choosing,” marking a historic reversal of the federal government’s traditional refusal to back unionization. Finally, the bill appropriated $3.3 billion to be spent by a new Public Works Administration (PWA). New Dealers hoped that the public works spending would jump-start the economy, buying time for the industrial codes to take effect.

This unwieldy industrial policy foundered from the start. Interior Secretary Harold Ickes, who had been charged with overseeing the PWA, moved with great caution in order to avoid accusations of misusing funds. In the agency’s first six months, he spent only $110 million of the billions allocated. 51 As a result, the PWA failed to provide any short-term economic stimulus. The cotton textile millers quickly drafted an industrial code, but other industries were slow to follow. Hugh Johnson, the colorful former general appointed to head the NRA, tried to compensate for this sluggish pace by resorting to the tactics of propaganda and community pressure that had been used successfully by the United States during World War I. Employers who agreed to sign a blanket wage-and-hour code were allowed to display NRA signs picturing a stylized Blue Eagle and the slogan “We Do Our Part.” The NRA’s Blue Eagle soon landed in store windows and on delivery trucks, and cities across the nation held “Blue Eagle” rallies and parades. This campaign made the NRA one of the most recognized aspects of the New Deal, but it did little to boost employment or improve incomes.

The code-writing process slowly moved forward. Although Johnson and the NRA had been given formal authority over the enterprise, they had no means to enforce compliance. Thus, the largest producers in each industry tended to dominate the proceedings. Mechanisms to fix prices and control production often hurt smaller operators. Code-making panels were supposed to include labor and consumer representatives, but they rarely did. As a result, price rises tended to outpace wage increases. The law eventually produced so many overlapping industrial codes—more than five hundred—that even businessmen complained about NRA bureaucracy. 52 In October 1934 , FDR finally secured Johnson’s resignation. The following May a unanimous Supreme Court declared the NRA unconstitutional.

Although slow to get started, the PWA ultimately proved more successful. In contrast to other jobs programs launched by the New Deal, the PWA embodied a “trickle-down” approach. The agency paid higher wages than did other work-relief projects, hired more skilled workers, and drew fewer employees from relief rolls. By focusing on large-scale construction projects, Ickes hoped to stimulate industries that provided materials and components, thus creating jobs indirectly. Between 1933 and 1939 , PWA workers built schools, courthouses, city halls, hospitals, and sewage plants. They built the port of Brownsville, Texas; the LaGuardia and Los Angeles Airports; two aircraft carriers; and numerous cruisers, destroyers, gunboats, and planes. The PWA constructed New York City’s Lincoln Tunnel, Virginia’s Skyline Drive, the San Francisco–Oakland Bay Bridge, the Bonneville and Grand Coulee dams in the Pacific Northwest, and the highway that links Key West to the Florida mainland. Surveying this legacy, one scholar compared Ickes to the Egyptian pharaoh who oversaw construction of the Great Pyramid of Giza. 53

Crafting Social Security

The PWA and the WPA both provided jobs for able-bodied Americans. They did little, however, for the sick, the disabled, or the elderly—those whom one sympathetic House member called “America’s untouchables.” 54 Few workers had pensions, and so most worked as long as they were able. Those considered unemployable because of age or health were forced to rely on their families or on local welfare agencies. To help these citizens, to ensure that the elderly did not take jobs away from younger compatriots, and to give all Americans the promise of future “security,” the president proposed a sweeping program of unemployment and old-age insurance. The Social Security Act, which FDR signed into law in August 1935 , laid the foundation for the U.S. welfare state, reshaping the lives and futures of Americans for generations to come. One Roosevelt biographer called it “the most important single piece of social legislation in all American history, if importance be measured in terms of … direct influence upon the lives of individual Americans.” 55

Historians have argued that the Social Security Act in some ways marked a historic reversal of American political values. Politicians and political commentators had long celebrated individualism and self-help, and for most of the nation’s history, the federal government provided little in the way of pensions or insurance to citizens who were not veterans of war. By contrast, the Social Security Act created a national system of old-age insurance, while using federal tax incentives to encourage states to set up their own unemployment insurance plans. The act also provided federal matching funds to states for aid to dependent mothers and children, the blind and the physically disabled. The Social Security Act marked “a tremendous break with the inhibitions of the past,” Arthur M. Schlesinger Jr., wrote in 1958 . “The federal government was at last charged with the obligation to provide its citizens a measure of protection from the hazards and vicissitudes of life.” 56

If the Social Security Act was revolutionary in some respects, however, it was deeply conservative in others. New Dealers had hoped to include national health insurance in the bill, but dropped these plans in the face of intense opposition from doctors. Southern Democrats, who were key to FDR’s political coalition, worried that giving African Americans too much aid would prompt them to reject backbreaking work at low wages. As a result, the bill’s drafters excluded both domestic workers and agricultural laborers from old-age insurance. They also exempted both groups, plus employees of small firms, from unemployment compensation. The cost of these exclusions fell disproportionately on women and racial minorities. Administration of unemployment insurance was also left up to the states, a move that multiplied the possibilities for discriminatory treatment.

Judged by international standards, one of the most conservative aspects of the Social Security program was its funding mechanism. By the 1930s, most modern industrial nations offered some form of social insurance for the elderly that was funded out of general coffers. 57 FDR, however, insisted that the federal pension plan work like private insurance: Workers would contribute to their old-age pension accounts through payroll taxes, and benefits would be tied to the amount that workers paid in. This regressive tax system prevented Social Security from redistributing income, leading to greater levels of income inequality among the U.S. elderly than among the aged in other industrialized nations. FDR, however, insisted that the decision to fund the program this way was political: “We put these payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits,” he declared. “With those taxes in there, no damn politician can ever scrap my social security program.” 58 In this assessment, Roosevelt proved prescient.

A New Deal for Labor

When Congress passed the National Industrial Recovery Act, United Mine Workers president John L. Lewis likened Section 7a—the section requiring management to engage in good-faith collective bargaining with workers—to Lincoln’s Emancipation Proclamation. For decades, American workers had been divided along skill, race, and ethnic lines, and government at all levels had generally sided with corporations rather than unions. The 1920s had been a particularly difficult decade for organized labor as unfavorable court rulings, cautious union leadership, corporate use of welfare capitalism and government attacks on those perceived as radical all eroded union ranks. Section 7a appeared to reverse the tide, and Lewis jumped to take advantage of the new legislation. Gambling much of the mineworkers’ treasury on a bold campaign, he sent organizers into the coalfields in the summer of 1933 with instructions to invoke the authority of the New Deal: “The President wants you to unionize,” organizers told miners, adding that not doing so was “unpatriotic.” Within months, the union’s membership quadrupled. 59

It soon became clear, however, that Section 7a was not the labor cure-all for which Lewis had hoped. Employers in many industries continued to defy the new law or to evade its requirements by installing company unions that they controlled. The act contained few real enforcement mechanisms, and NRA head Hugh Johnson seemed disinclined to use those that existed. As workers grew increasingly frustrated, industry after industry erupted in strikes. In 1934 , a walkout by textile workers stretched across twenty states. In Toledo, Ohio, striking employees of an auto-parts company battled National Guardsmen in the streets. Strikes by Minneapolis teamsters and San Francisco longshoremen touched off general strikes in both cities.

These strikes, in and of themselves, produced only limited gains for labor, but they signaled a new militancy—and unity—on the part of America’s workers. These changes in part reflected the economic strains of the Depression, but as Lizabeth Cohen has shown, they also reflected important shifts in the orientation of working-class Americans during the 1920s and 1930s. Restrictive legislation passed in the early 1920s curbed the flow of new immigrants into the United States, contributing to the maturation of ethnic communities. Mass consumption and mass culture gradually gave workers of different ethnic backgrounds common ground, creating a more unified working-class culture. Meanwhile, employers’ use of welfare capitalism during the 1920s raised workers’ expectations. The Depression destroyed two safety nets that workers had relied on: the wages and benefits once offered by employers, and the webs of assistance rooted in ethnic and religious institutions. 60

The labor unrest of late 1933 and 1934 helped persuade FDR to throw his support very belatedly behind a new labor law crafted largely by New York Senator Robert Wagner. Roosevelt and his Labor Secretary Frances Perkins hoped to boost workers’ purchasing power through wage-and-hour legislation and laws affecting pensions and unemployment. They were less concerned about extending workers’ political power by guaranteeing their collective-bargaining rights. 61 As a result, Roosevelt initially showed little interest in closing the loopholes that weakened Section 7a. In late May 1935 , however, the Supreme Court nullified the National Industrial Recovery Act, thus limiting FDR’s options. With Congress poised to pass the new labor law in any case, the president finally declared it a high priority.

Passage of the National Labor Relations Act (more commonly known as the Wagner Act) in the summer of 1935 helped set the stage for an historic organizing drive. The economy had begun to recover, making companies more vulnerable to shutdowns. Liberal Democrats allied with the New Deal and sympathetic to labor won the governorships of such key industrial states as New York, Pennsylvania, and Michigan. Lewis decided that the time was ripe to organize mass-production workers in industrial unions. In November 1935 , he and a handful of allies formed what would become the Congress of Industrial Organizations (CIO). 62 In the first four months of 1937 , CIO unions “conquered the two most significant outposts of the open shop in mass-production industry”: General Motors and U.S. Steel. By the end of the year, organized labor had recruited some 3 million new members and unions represented almost 23 percent of the nonagricultural workforce, the largest proportion to that point in U.S. history. 63

Such victories were short-lived. By late 1937 , the CIO’s successes had sparked fierce attacks from corporate adversaries, Southern congressmen, craft unionists in the American Federation of Labor (AFL), and some New Dealers. 64 It would take World War II to again reinvigorate the labor movement. The Wagner Act did, however, help solidify labor support for the Democratic Party. Worker support, in turn, prompted New Dealers to push through the Fair Labor Standards Act (FLSA), which banned child labor and set minimum wage and maximum hour laws. (Agricultural laborers and domestic workers were exempted from the act, just as they had been from Social Security.) “For generations to come,” one historian has written, “the FLSA would stand as the backbone of U.S. employment law.” 65

The Legacies and Limits of the New Deal

Passage of the FLSA in June 1938 marked the end of New Deal reform. Roosevelt won a landslide reelection in 1936 , but his second term proved rocky from the start. Some of the wounds were self-inflicted. Unhappy with Supreme Court decisions overturning key pieces of New Deal legislation, FDR proposed a bill allowing the president to appoint one new justice for every justice over the age of 70 who refused to retire; if passed, the bill would have enabled Roosevelt immediately to appoint six additional justices. This transparently political move drew wrath from New Deal opponents and criticism even from many of FDR’s allies. Before Congress could act, the swing justice switched sides and began voting to uphold New Deal laws. His shift, together with the retirement of another justice, ushered in a new, more liberal Supreme Court era, and effectively killed the Court reform bill. Nevertheless, the backlash associated with FDR’s “court-packing” scheme sapped much of the New Deal’s political momentum. 66

The president’s political problems were soon compounded by an economic downturn that became known as the “Roosevelt Recession.” For most of FDR’s presidency, the economy had improved steadily, in part because of ample government spending. Roosevelt, however, had never abandoned his belief in a balanced budget, and in early 1937 he decided the time had come for federal belt tightening. He ordered dramatic cutbacks in both the WPA and the PWA, even as the first Social Security taxes pulled $2 billion out of the U.S. economy. All this sent the economy into a tailspin. Stock prices began falling in October 1937 and dropped nearly 50 percent in just seven months. Industrial production cratered, and some 4 million workers lost their jobs. 67 Unemployment, which had fallen sharply throughout July 1937 , moved upwards until the following June. 68

FDR’s court-packing scheme, economic duress, and a wave of sit-down strikes by industrial unionists all weakened support for the New Deal in some quarters. In the latter half of 1937 , a group of conservative Democrats, mostly Southerners, joined forces with Republicans to stymie any further New Deal legislation. The FLSA squeaked through, but in the 1938 midterm elections, Republicans made big gains in both houses. In 1939 , Congress began scaling back or killing off federal projects, beginning with the WPA’s Federal Theater and Federal Art projects. By the end of 1943 , Congress had eliminated the CCC, the WPA, the Home Owners’ Loan Corporation (HOLC), and numerous other New Deal programs. 69

So what did the New Deal do and whom did it benefit? New Deal policies did not restore the economy to pre-Depression levels—only World War II did that—but between 1933 and 1937 , the nation’s real gross national product grew at an annual rate of over 8 percent a year. Growth slowed during the Roosevelt Recession, but averaged over 10 percent a year between 1938 and 1941 . As economist Christina Romer has written, these rates are “spectacular, even for an economy pulling out of a severe depression.” 70 By strengthening the power of the federal government and extending federal regulation into entirely new areas of the economy, the New Deal helped to “devolatilize” American capitalism. 71 It stabilized the farm economy after two decades of depression, and introduced programs like crop subsidies and soil conservation that became staples of federal farm policy for decades to come. New Deal work-relief programs like the CCC, the PWA, and the WPA relieved the misery of millions of Americans, while building a vast public infrastructure that permanently changed the American landscape. Over time, Social Security dramatically reduced the number of elderly poor.

America’s industrial workers helped to “make” the New Deal, and white male workers were among its prime beneficiaries. In earlier decades, many members of the working class—particularly those who were foreign born—had not bothered to vote, and their party loyalties were fickle. Many simply found national party politics irrelevant to their lives. By the end of the 1930s, all this had changed. Many workers had received federal relief checks and jobs. Even more benefited from federal bank deposit and unemployment insurance, long-term low-interest mortgages offered by the HOLC, a nationally set minimum wage, and the promise of Social Security benefits in old age. In return, millions of working-class voters became loyal Democrats, ensuring the dominance of the Democratic Party for decades to come. 72

Not all Americans benefited equally from the New Deal, however. Women achieved important symbolic breakthroughs: FDR appointed the first female Cabinet member, Labor Secretary Frances Perkins, as well as the first woman to serve on the U.S. Court of Appeals. Women also played an increasingly important role in the machinery of the Democratic Party. Overall, however, New Deal programs discriminated against women. Most New Dealers, including Perkins and First Lady Eleanor Roosevelt, saw men as heads of households, who were thus in greater need of work. As a result, federal work-relief programs employed women at a far lower rate than men. Of 1.6 million public-works jobs given out in 1934 , only 11 percent went to women. Women held about 12 percent of WPA jobs, even though they made up at least 25 percent of the unemployed. 73 New Deal programs generally assigned women to gender-specific jobs—for instance, sewing and canning projects—and paid them a fraction of the wages given to their male counterparts. (Professional women, particularly those employed in the WPA’s arts programs, fared somewhat better.)

If gender inequity was built into most New Deal programs, so too was racial inequality. White Southern Democrats played a key role in the New Deal coalition, and “Dixiecrat” politicians exercised inordinate power in both the House and the Senate. 74 As a result, FDR and his advisors went to great lengths to appease them. The CCC established segregated camps for African Americans, often far from population centers. NRA wage codes generally prescribed lower wages for blacks than for whites, while work-relief programs like the WPA often relegated African Americans to the lowest-paying jobs. Federal efforts to promote “grassroots democracy” gave control of the AAA and other New Deal programs to local authorities, who administered them in accordance with local (often racist) mores. Afraid of alienating his southern supporters, FDR refused to support antilynching legislation or a ban on the poll tax.

The New Deal’s social insurance and labor protection programs also discriminated against women and racial minorities. The Social Security Act exempted domestics and agricultural laborers, as well as individuals who worked intermittently and were employed in fields like education and nursing that were heavily female. As a result, more than three-quarters of all female wage earners and at least 65 percent of African Americans were initially denied coverage. 75 These rules—together with similar exclusions in the FLSA—also hurt many other racial minorities, as well as poor, rural whites. The Wagner Act helped workers in organized industries like steel, rubber, and automobiles, which were heavily dominated by white men. It did little for agricultural laborers, those in the largely unorganized service sector, or most workers in the South—in other words, for most employed white women and racial minorities.

Despite such rampant inequities, the New Deal did more for African Americans than had any past administration since Abraham Lincoln’s. As a result, African Americans switched parties en masse, setting the stage for a broader party realignment in the 1960s and beyond. African American voters put civil rights on the Democratic Party’s agenda after World War II, ultimately leading to a widespread defection by white Southerners. The New Deal drew millions of immigrants from Southern and Eastern Europe into national politics for the first time, but many of these working-class ethnics eventually became “Reagan Republicans.” The industrial labor movement proved to be what Robert Zieger has called a “fragile juggernaut”: Unions gained members and contract rights through the 1950s, but the CIO’s militancy was quickly curbed and union membership as a percentage of the American workforce fell sharply beginning in the 1970s. 76

While many New Deal programs and institutions were killed off, others—federal deposit insurance, the Securities and Exchange Commission, the Tennessee Valley Authority, and the Fair Labor Standards Act, among them—continue to the present day. Social Security gradually expanded to include domestic workers, agricultural laborers, and other excluded groups, making it more nearly universal. All this has left scholars, politicians, and pundits arguing over how to understand the New Deal’s legacy for the 20th century and beyond.

Discussion of the Literature

Few eras in modern American history have been the subject of more sustained scholarship or intense debate among both academics and popular commentators than the New Deal. Most agree that the policies of the Roosevelt administration brought new groups into the political process, laid the foundation for the welfare state, and greatly expanded both the power of the presidency and the reach of the federal government. Beyond this, however, historical judgments have differed markedly. For years, most scholars lauded President Roosevelt and cast the New Deal as a watershed in American history, albeit one consistent with American values and the nation’s reform tradition. Critics on the right and left, however, portrayed Roosevelt as a political opportunist who used the New Deal either to subvert or to preserve the nation’s capitalist system. In recent years, most scholars have acknowledged the New Deal’s achievements, but also stressed its limitations. Many have also deemphasized the role played by Roosevelt, and some have questioned the New Deal’s long-term impact.

Most New Deal scholarship has revolved around a handful of questions: How radical or conservative were Roosevelt’s domestic policies? What or whom did they benefit? When and why did the political “order” created by the New Deal come to an end? And what has been the New Deal’s lasting legacy for American politics, society, and culture? How historians and political scientists have answered these questions has depended on their ideological outlooks, the temper of their times, and their assessment of the possibilities and limits of American political culture. Since the New Deal itself was not always ideologically coherent and it evolved over time, historical assessments have also depended on the aspects of the New Deal that scholars have chosen to emphasize.

The first scholars to offer sustained accounts of the New Deal were those who came of age during the Great Depression. Most were liberals whose political outlooks were shaped by their own experiences during the 1930s and 1940s and by the politics of the Cold War and of McCarthyism that followed. Arthur M. Schlesinger Jr., Frank Freidel, Eric Goldman, and others focused on the commanding figure of President Franklin Delano Roosevelt, celebrating the dramatic transformation that he and his New Dealers wrought in both American policies and political culture. 77 These liberals portrayed the New Deal as a moment of democratic renewal, when the federal government intervened in the nation’s political economy to protect the marginal and exploited from powerful and privileged “interests.” Richard Hofstadter considered the New Deal to be “a drastic new departure.” 78 Carl Degler went even further, calling it the “Third American Revolution,” after the War of Independence and the Civil War. 79

Even as these liberal historians emphasized the revolutionary nature of the New Deal, most also rooted it in a tradition of American reform. This was partly to blunt the attack of a handful of conservative commentators and scholars who argued that Roosevelt had weakened “the Constitutional system” and hurt the economy by exercising dictatorial powers on behalf of “Socialistic” and un-American objectives. 80 Such arguments originated with contemporary critics of the New Deal like Raymond Moley, a member of FDR’s “Brain Trust” who eventually broke with the president and became a conservative Republican. 81 For decades, conservative critics of the New Deal were few and far between, but in recent years a new group of right-wing journalists and think-tank scholars have resurrected such arguments. 82

By the late 1960s, the classic “liberal” interpretation of the New Deal was also drawing fire from critics in the “New Left.” Scholars like Barton Bernstein, Paul Conkin, and Howard Zinn argued that the New Deal had not transformed corporate capitalism so much as “conserved and protected” it. Bernstein summarized this viewpoint in a widely read essay subtitled “The Conservative Achievements of Liberal Reform.” He acknowledged that New Deal policies had helped some downtrodden Americans, but argued that Roosevelt and his advisors had spurned more substantive change. They did not question private enterprise or nationalize the banking system. They did not undertake massive public housing construction or use the tax system to fundamentally redistribute income or wealth. They failed to challenge both the southern “race system” and the power of the business class. By co-opting and incorporating the discontented, Bernstein and his allies charged, FDR and his New Dealers had blunted the possibility of more revolutionary change. 83

Reassessing the New Deal in the Face of Conservative Resurgence

Both classic liberals and New Leftists wrote during the decades of Democratic Party dominance; thus, they assumed that “the political era ushered in by the New Deal would go on forever.” 84 By the 1970s, however, that assumption seemed increasingly untenable. Richard Nixon’s election to the presidency in 1968 signaled the fraying of the New Deal coalition. In 1980 , Ronald Reagan swept to victory on the Republican ticket, bringing a Republican House and Senate with him. Reagan’s victory ushered in a period of conservative resurgence, which prompted scholars to conclude that the “New Deal order” had come to an end. 85 This realization helped catalyze a shift in both the dominant tone of New Deal scholarship and in the questions asked by historians. Most scholars writing in recent decades have followed the lead of William Leuchtenburg, who declared in a pioneering 1963 work that the New Deal was only a “half-way Revolution.” 86 Historians have differed primarily on the relative weights they have assigned to the New Deal’s achievements and limitations, and on how they have explained the demise of the “New Deal order.”

No single book better exemplified this shift in tone and emphasis than the 1989 essay collection entitled The Rise and Fall of the New Deal Order . As editors Gary Gerstle and Steve Fraser wrote in their introduction, “The witnessing of a political era’s eclipse has imparted to many of these essays a sober and ironic tone, appropriate to political analyses that stress missed opportunities, unintended consequences, and dangerous but inescapable compromises.” 87 Many of those who contributed to the volume developed their arguments further in subsequent books. Steve Fraser and Nelson Lichtenstein, for instance, both argued that labor leaders entered the Depression decade with dreams of institutionalizing industrial or social democracy. They gradually gave up on this public-policy vision, however, settling instead for more generous benefits and greater job security gleaned through contracts negotiated with management. 88 In a similar vein, Alan Brinkley suggested that between 1937 and 1945 , the dominant ideology among New Dealers shifted from an emphasis on regulation in the public interest to a faith in Keynesianism and economic growth as “the surest route to social progress.” The result, he declared, was “the end of reform.” 89

While these historians focused broadly on issues of political economy, scholars of race and gender highlighted the limits of New Deal egalitarianism. Ira Katznelson and Mary Poole showed that many New Deal programs discriminated against African Americans, resulting in what Katznelson dubbed “affirmative action for whites.” 90 The sociologist Cybelle Fox argued that European immigrants received more generous access to social welfare programs than did African Americans, and Mexican immigrants. 91 Linda Gordon, Gwendolyn Mink, Suzanne Mettler, and Alice Kessler-Harris explored what Kessler-Harris called “the gendered limits of social citizenship.” They pointed out that many New Deal programs, including such landmark initiatives as Social Security and the Fair Labor Standards Act, treated men and women quite differently. 92

Still other authors emphasized the contributions of the New Deal, even as they acknowledged its limitations. In his magisterial Freedom from Fear , David M. Kennedy argued that the New Deal not only provided relief and social insurance to many “vulnerable individuals,” but also “erected an institutional scaffolding designed to provide unprecedented stability and predictability” to large segments of the American economy. In doing so, he suggested, the New Deal helped to catalyze postwar prosperity, while giving “countless Americans” a new “sense of security, and with it a sense of having a stake in their country.” 93 Ira Katznelson struck a note of both tragedy and triumph in his monumental 2013 book, Fear Itself . Elaborating on a theme he had explored in earlier works, Katznelson described the way that Southern Democrats in Congress built racial inequality into the very foundation of the New Deal. This “Faustian terrible compromise” on the domestic front was the price that FDR had to pay for what Katznelson saw as the New Deal’s most important achievement: its “demonstration that liberal democracy, a political system with a legislature at its heart, could govern effectively in the face of great danger.” At a time when the Depression was destabilizing societies around the globe—a time when fascists and communists were on the march—the New Deal reinvigorated democratic institutions and redefined the role of government, giving liberal democracy renewed and lasting “legitimacy and prestige” around the world. 94

Katznelson measured the New Deal’s achievements against the successes of fascism and communism abroad. I have suggested that this same context helped to derail the drive for economic justice that animated industrial unionists and their New Deal allies during the 1930s. Alarmed by the chaos of the Depression years and convinced that internal disunity had undermined democracies abroad, Americans with divergent political outlooks and agendas increasingly emphasized Americans’ common ground. Against the backdrop of war and Cold War, businessmen alarmed by what they saw as the New Deal’s class-based resentments sometimes made common cause with liberals eager to contain religious and ethnic hostilities. In an effort to succor social harmony, both groups sought to define a unifying and distinctive “American Way.” They helped to shape a consensus ethos that privileged civility over equality, delegitimized many forms of dissent, and constrained American politics into the 1960s. 95

Most of the authors discussed to this point either imply or explicitly argue that the ultimate demise of the “New Deal order” resulted from flaws in the New Deal’s architecture or from fractures in the Democratic coalition. To paraphrase James T. Kloppenberg, they would say that the New Deal order was not pushed, but rather jumped. 96 Recently, however, several historians have focused on those who sought to speed the New Deal order on its way. Kim Phillips-Fein has shown how right-wing businessmen waged continuous and often covert war on New Deal legislation and values from the 1930s through the ascendancy of Ronald Reagan in 1980 . By funding think tanks and foundations—and recruiting politicians, intellectuals, ministers, and others to their cause—these men worked “to undo the system of labor unions, federal social welfare programs, and government regulation of the economy that came into existence during and after the Great Depression of the 1930s.” 97 In One Nation Under God , Kevin M. Kruse elaborates on the coalition of conservative businessmen and religious leaders who united to oppose the New Deal and who helped to transform both American religious and political culture. 98

The books of both Phillips-Fein and Kruse reflect a shift in the focus of political history since the turn of the 21st century—a renewed interest in the type of conservatives that the first New Deal historians would have considered “fringe.” Both books call into question the power and legacy of postwar liberalism. Recently, Jefferson Cowie has gone even further, questioning the assumption made by most prior historians that the New Deal marked a turning point in American political culture, even if only a “halfway Revolution.” The New Deal was a “triumph of redistributive policy,” Cowie affirms, at least for “the white, male industrial working class.” Its reform of capitalism, however, could not last. Between the 1930s and the 1970s, a rare convergence of historical circumstances—“changes in the state, immigration, culture and race”—briefly enabled “a limited but powerful sense of working-class unity” that triumphed over America’s long-standing ideology of individualism. When those historical factors subsided, however, the nation’s commitment to overcoming economic inequality frayed. The New Deal order, Cowie argues, “marks what might be called a ‘great exception’—a sustained deviation, an extended detour—from some of the main contours of American political practice, economic structure, and cultural outlook.” 99

Primary Sources

Few eras in American history have been as well documented in words and film as the 1930s. Thus the New Deal offers scholars and students a wealth of available published and online primary sources. A number of books capture the human toll taken by the Depression, as well as the response of diverse Americans to the policies proposed by their leaders. In 1933, Harry Hopkins, who headed first the Federal Emergency Relief Administration and then the Works Progress Administration, dispatched the journalist Lorena Hickok to gather information about the day-to-day toll that the Depression was exacting on ordinary citizens. Over the course of two years, Hickok traversed 32 states. The reports she sent back are compiled by Richard Lowitt and Maurine Beasley in One Third of a Nation: Lorena Hickok Reports on the Great Depression . 100 Robert S. McElvaine’s Down and Out in the Great Depression: Letters from the Forgotten Man collects nearly 200 letters written by ordinary men, women, and children to those who occupied or worked in the White House during the Great Depression. The letters show the personal connection many Americans felt with FDR, and they display a wide range of emotions toward both the economic cataclysm and government relief. 101 Between 1938 and 1942, the Federal Writers Project sent writers across the country to interview individuals of diverse backgrounds, occupations, and circumstances. In First Person America , Ann Banks offers eighty of these life stories, including those of a Polish immigrant, a Chicago jazzman, a retired Oregon prospector, a North Carolina tobacco farmer, and a Bahamian midwife living in Florida. 102 Decades after the Depression, the journalist Studs Terkel interviewed dozens of Americans who lived through the 1930s. He recorded their words in Hard Times: An Oral History of the Great Depression . 103

New Dealers had a sense that they were living through and shaping history, and many produced memoirs recording their experiences. One of the first to appear was Harry Hopkins’s Spending to Save . 104 Raymond Moley, an original member of FDR’s Brain Trust who eventually became one of the New Deal’s harshest critics, published After Seven Years . 105 The many other accounts by New Dealers include these by the only two members of Roosevelt’s Cabinet who served throughout his entire presidency: Frances Perkins’s The Roosevelt I Knew and Harold L. Ickes’s The Secret Diary of Harold L. Ickes 106

Many archives have made extensive collections of New Deal materials available online and can be found in “ Links to Digital Materials .” The Franklin D. Roosevelt Presidential Library and Museum has digitized major collections of FDR’s papers, selected correspondence of First Lady Eleanor Roosevelt; the complete diaries of Treasury Secretary Henry Morgenthau Jr.; and other New Deal documents deemed particularly significant. The Library also provides links to videos of FDR and to online versions of two documentary films produced by the government and designed to build support for New Deal programs: Pare Lorentz’s The Plow That Broke the Plains and The River . The Library of Congress has also digitized numerous collections relating to the New Deal, including photographs taken by Farm Security Administration photographers; life histories collected by members of the Federal Writers Project; ethnographic materials documenting the lives of migrants living in California work camps run by the FSA; images, posters, and scripts produced by the Federal Theatre Project; and posters designed by graphic artists working for the WPA.

Links to Digital Materials

Franklin D. Roosevelt Presidential Library and Museum —This link offers access to the digitized collections of the Franklin D. Roosevelt Presidential Library and Museum.

The American Presidency Project —This searchable document archive contains the addresses, proclamations, news conferences, executive orders, and fireside chats of Franklin Delano Roosevelt, as well as those of the presidents who preceded and followed him.

The Living New Deal —The Living New Deal, developed in part by the Department of Geography at the University of California at Berkeley, is a national database of thousands of documents, photographs, and personal stories about public works made possible by the New Deal. The site contains a map, continually under construction, indicating thousands of projects undertaken by the Civilian Conservation Corps, Public Works Administration, Works Progress Administration, Tennessee Valley Authority, and other New Deal agencies. Projects are searchable by location, New Deal agency, category and artist.

The Library of Congress hosts numerous collections of primary sources related to the New Deal, including:

The New Deal Stage: Selections from the Federal Theatre Project, 1935–1939 —This collection contains more than 13,000 images of stage and costume designs, still photographs, posters, scripts for productions, and other materials from the Federal Theatre Project.

Works Progress Administration Posters —This collection consists of 907 digitized posters created from 1936 to 1943 by various branches of the WPA. The posters were designed to publicize health and safety programs, art exhibitions, theatrical and musical performances, travel and tourism, and educational programs in seventeen states and the District of Columbia. The states most frequently represented in the collection are California, Illinois, New York, Ohio, and Pennsylvania.

Documenting America, 1935–1943: The Farm Security Administration/Office of War Information Photo Collection —This site contains two videos introducing users to the vast collection of images taken by photographers for the FSA (and later the Office of War Information). Many of these pictures—taken by such photographers as Dorothea Lange, Walker Evans, Arthur Rothstein, and Gordon Parks—are some of the most iconic images of the Depression Era. The Website also includes links to collections of these photographs digitized by the Library of Congress and to other relevant materials.

American Life Histories: Manuscripts from the Federal Writers’ Project, 1936–1940 —This collection of life histories consists of about 2,900 documents compiled by some three hundred employees of the Federal Writers’ Project working in twenty-four states. The documents include narratives, dialogues, reports, and case histories. Those interviewed recounted immigrating, undertaking grueling factory work, farming tobacco, and journeying west, among other things. The documents also include tales of meeting Billy the Kid and surviving the 1871 Chicago fire.

Voices from the Dust Bowl: The Charles L. Todd and Robert Sonkin Migrant Worker Collection, 1940 to 1941 —This Website presents materials from an ethnographic field collection documenting the everyday life of residents of ten Farm Security Administration migrant work camps in central California in 1940 and 1941. Charles Todd and Robert Sonkin documented dance tunes, cowboy songs, traditional ballads, play party and square dance calls, camp council meetings, camp court proceedings, conversations, storytelling sessions, and personal experience narratives of the Dust Bowl refugees who inhabited the camps. The digitized collection includes audio recordings, graphic images, and print materials.

Further Reading

• Badger, Anthony J. The New Deal: The Depression Years, 1933–40. New York: Hill and Wang, 1989.
• Bernstein, Barton J. “The New Deal: The Conservative Achievements of Liberal Reform.” In Towards a New Past: Dissenting Essays in American History . Edited by Barton J. Bernstein , 263–288. New York: Pantheon Books, 1968.
• Borgwardt, Elizabeth . A New Deal for the World: America’s Vision for Human Rights . Cambridge, MA: Harvard University Press, 2005.
• Brinkley, Alan . The End of Reform: New Deal Liberalism in Recession and War. New York: Knopf, 1995.
• Cohen, Lizabeth . Making a New Deal: Industrial Workers in Chicago, 1919–1939. New York: Cambridge University Press, 1990.
• Cowie, Jefferson , and Nick Salvatore . “The Long Exception: Rethinking the Place of the New Deal in American History.” International Labor and Working-Class History 74 (Fall 2008): 3–32.
• Denning, Michael . The Cultural Front: The Laboring of American Culture. New York: Verso, 1997.
• Fraser, Steve , and Gary Gerstle , eds. The Rise and Fall of the New Deal Order, 1930–1980. Princeton, NJ: Princeton University Press, 1989.
• Hawley, Ellis W. The New Deal and the Problem of Monopoly: A Study in Economic Ambivalence . Princeton, NJ: Princeton University Press, 1966.
• Jacobs, Meg . Pocketbook Politics: Economic Citizenship in Twentieth Century America . Princeton, NJ: Princeton University Press, 2005.
• Katznelson, Ira . Fear Itself: The New Deal and the Origins of Our Time. New York: Liveright, 2013.
• Kennedy, David M. Freedom from Fear: The American People in Depression and War, 1929–1945. New York: Oxford University Press, 1999.
• Kessler-Harris, Alice . “In the Nation’s Image: The Gendered Limits of Social Citizenship in the Depression Era.” Journal of American History 86 (December 1999): 1251–1279.
• Leff, Mark . The Limits of Symbolic Reform: The New Deal and Taxation, 1933–1939. New York: Cambridge University Press, 1984.
• Leuchtenburg, William E. Franklin D. Roosevelt and the New Deal, 1932–1940. New York: Harper & Row, 1963.
• Maher, Neil M. Nature’s New Deal: The Civilian Conservation Corps and the Roots of the American Environmental Movement. New York: Oxford University Press, 2008.
• Mettler, Suzanne . Dividing Citizens: Gender and Federalism in New Deal Public Policy . Ithaca, NY: Cornell University Press, 1998.
• Patel, Kiran Klaus . The New Deal: A Global History . Princeton, NJ: Princeton University Press, 2016.
• Phillips, Sarah T. This Land, This Nation: Conservation, Rural America, and the New Deal . New York: Cambridge University Press, 2007.
• Phillips-Fein, Kim . Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan . New York: W. W. Norton, 2009.
• Poole, Mary . The Segregated Origins of Social Security: African Americans and the Welfare State. Chapel Hill: University of North Carolina Press, 2006.
• Schlesinger, Arthur M., Jr. The Age of Roosevelt . 3 vols. Boston: Houghton Mifflin, 1957–1960.
• Wall, Wendy . Inventing the “American Way”: The Politics of Consensus from the New Deal to the Civil Rights Movement . New York: Oxford University Press, 2008.
• Zieger, Robert H. The CIO, 1935–1955. Chapel Hill: University of North Carolina Press, 1995.

1. Franklin D. Roosevelt , “Address Accepting the Presidential Nomination at the Democratic National Convention in Chicago,” July 2, 1932; available online at The American Presidency Project , hosted by John T. Woolley and Gerhard Peters.

2. William H. Chafe , ed., The Achievement of American Liberalism: The New Deal and Its Legacies (New York: Columbia University Press, 2002), xiii.

3. Robert Westbrook , “Tragic Deal,” Reviews in American History 43 (March 2015): 1.

4. David M. Kennedy , Freedom from Fear: The American People in Depression and War, 1929–1945 (New York: Oxford University Press, 1999), 87 , 133, 162–163. For the global causes and reach of the Great Depression, see Eric Hobsbawm , The Age of Extremes: A History of the World, 1914–1991 (New York: Vintage Books, 1994), 85–108 and Kiran Klaus Patel , The New Deal: A Global History (Princeton, NJ: Princeton University Press, 2016), 10–44.

5. Franklin D. Roosevelt , “ Address at Oglethorpe University in Atlanta, Georgia ,” May 22, 1932; available online at The American Presidency Project .

6. Roosevelt famously articulated this “ 3R ” formula in his fireside chat of June 28, 1934, available online at The American Presidency Project .

7. Kennedy, Freedom from Fear , 363.

8. Glenn C. Altschuler and Stuart M. Blumin , The GI Bill: A New Deal for Veterans (New York: Oxford University Press, 2009) . Altschuler and Blumin argue, for instance, that the GI Bill’s provision extending low-interest home loans to veterans was built on New Deal policies that restructured the home mortgage market.

9. Ira Katznelson , Fear Itself: The New Deal and the Origins of Our Time (New York: Liveright, 2013), 4–5.

10. Elizabeth Borgwardt , A New Deal for the World: America’s Vision for Human Rights (Cambridge, MA.: Harvard University Press, 2005), 7–8.

11. Patel, The New Deal , 274.

12. Sarah T. Phillips , This Land, This Nation: Conservation, Rural America, and the New Deal (New York: Cambridge University Press, 2007), 18 , 242–283.

13. Steve Fraser and Gary Gerstle , “Introduction,” in Steve Fraser and Gary Gerstle , eds., The Rise and Fall of the New Deal Order, 1930–1980 (Princeton, NJ: Princeton University Press, 1989), ix–xxv , xi.

14. The Twentieth Amendment to the Constitution, which took effect in 1937, moved the presidential inauguration to January 20 of the year following the election.

15. For brief summaries of this ongoing debate from different perspectives, see William E. Leuchtenburg , Franklin D. Roosevelt and the New Deal, 1932–1940 (New York: Harper & Row, 1963), 162–163 ; Morton Keller , “The New Deal: A New Look,” Polity 31.4 (1999): 657–663 ; Kennedy, Freedom from Fear , 248, n 54.

16. Kennedy, Freedom from Fear , 365.

17. Ibid. , 132–133.

18. Arthur M. Schlesinger Jr. , The Coming of the New Deal , vol. 2 in The Age of Roosevelt (Boston: Houghton Mifflin Co., 1958), 5.

19. Franklin D. Roosevelt , “ Fireside Chat on Banking ,” March 12, 1933. Available online at The American Presidency Project .

20. Raymond Moley , After Seven Years (New York: Harper, 1939), 155.

21. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 60; Milton Friedman and Anna Jacobson Schwartz , From New Deal Banking Reform to World War II Inflation (Princeton, NJ: Princeton University Press, 2014), 21.

22. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 50–51; Eric Rauchway , The Great Depression and The New Deal: A Very Short Introduction (New York: Oxford University Press, 2008), 60–63.

23. Kennedy, Freedom from Fear , 163–164.

24. The best account of the CCC to date is Neil M. Maher’s Nature’s New Deal: The Civilian Conservation Corps and the Roots of the American Environmental Movement (New York: Oxford University Press, 2008).

25. James T. Patterson , America’s Struggle Against Poverty in the 20th Century , enlarged ed. (Cambridge, MA: Harvard University Press, 2000), 56–58.

26. Franklin D. Roosevelt , “ Annual Message to Congress ,” January 4, 1935. Available online at The American Presidency Project .

27. Kennedy, Freedom from Fear , 253–255.

28. Anthony J. Badger , The New Deal: The Depression Years, 1933–40 (New York: Hill and Wang, 1989), 212.

29. Kennedy, Freedom from Fear , 253–254.

30. Harry L. Hopkins , Spending to Save: The Complete Story of Relief (New York: W. W. Norton, 1936), 114.

31. During World War I, crop production fell in many of the warring European powers. U.S. farmers dramatically expanded production to meet this demand, often borrowing to buy more land and equipment. When the war ended and the demand for exported crops declined, farm production outran demand, pushing prices down.

32. Kennedy, Freedom from Fear , 141.

33. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 23; “Milk Is Dumped in Rochester War,” New York Times , March 30, 1933. John Steinbeck famously decried the burning of oranges and other crops when migrant families went hungry, see the reissue edition of The Grapes of Wrath (New York: Penguin Classics, 2006), 348–349.

34. Senate seats are allocated on a state-by-state basis, a method that overrepresents rural areas. Moreover, as Eric Rauchway has noted, Congress failed to adopt a redistricting scheme after the 1920 Census, the first census to show a majority of Americans living in urban areas. Rauchway, The Great Depression and the New Deal , 74–75.

35. Janet Poppendieck , Breadlines Knee-Deep in Wheat: Food Assistance in the Great Depression , updated and expanded ed. (Berkeley: University of California Press, 2014), 112.

36. Richard Lowitt and Maurine Beasley , eds., One Third of a Nation: Lorena Hickok Reports on the Great Depression , (Urbana: University of Illinois Press, 1981), 54 , 106.

37. Schlesinger, The Coming of the New Deal , 65–66.

38. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 52.

39. Kennedy , Freedom from Fear , 207.

40. Jess Gilbert , “Agrarian Intellectuals in an Industrializing State,” in The Countryside in the Age of the Modern State: Political Histories of Rural America , edited by Catherine McNicol Stock and Robert D. Johnston , 213–239, 231 (Ithaca, NY: Cornell University Press, 2001).

41. Badger, The New Deal , 184.

42. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 140.

43. John M. Barry , Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America (New York: Simon & Schuster, 1997), 357.

44. Donald Worster , Dust Bowl: The Southern Plains in the 1930s , 25th anniversary ed. (New York: Oxford University Press, 2004), 13.

45. Sarah Philips, This Land, This Nation .

46. For an exploration of these issues focused on the South, see Bruce J. Schulman , From Cotton Belt to Sunbelt: Federal Policy, Economic Development and the Transformation of the South, 1938–1980 (New York: Oxford University Press, 1991).

47. Badger, The New Deal , 175–176.

48. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 157–158.

49. Kennedy, Freedom from Fear , 150–151.

50. Moley, After Seven Years , 190.

51. Badger, The New Deal , 73.

52. Ibid. , 90.

53. Leuchtenburg, Franklin D. Roosevelt and the New Deal , 133.

54. Ibid. , 131.

55. Kenneth S. Davis , FDR: The New Deal Years, 1933–1937 (New York: Random House, 1986), 437.

56. Schlesinger , The Coming of the New Deal , 315.

57. Kennedy, Freedom from Fear , 260.

58. Schlesinger, The Coming of the New Deal , 308–309.

59. Ibid. , 138–140.

60. Lizabeth Cohen , Making a New Deal: Industrial Workers in Chicago, 1919–1939 (New York: Cambridge University Press, 1990).

61. Kennedy, Freedom from Fear , 297.

62. Lewis initially founded the Committee for Industrial Organizations within the much older American Federation of Labor. Within a year, however, ideological differences split the two groups and the CIO unions soon formed the Congress of Industrial Organizations. The two labor federations remained bitter rivals until the 1950s. They finally merged in 1955 as the AFL-CIO.

63. Melvyn Dubofsky , The State and Labor in Modern America (Chapel Hill: University of North Carolina Press, 2000), 137.

64. Nelson Lichtenstein , State of the Union: A Century of American Labor (Princeton, NJ: Princeton University Press, 2002), 34.

65. Jefferson Cowie , The Great Exception: The New Deal and the Limits of American Politics (Princeton, NJ: Princeton University Press, 2016), 109.

66. Leuchtenburg, Franklin Roosevelt and the New Deal , 231–239.

67. Alan Brinkley , The End of Reform: New Deal Liberalism in Recession and War (New York: Knopf, 1995), 19 , 28–29.

68. Although the Bureau of Labor Statistics collected some data on employment in the 1930s, the federal government did not track the unemployment rate as it does today. As a result, scholars have had to reconstruct unemployment rates retrospectively, a process that has been the subject of both methodological and political debate. For a brief introduction to the issues involved, see Eric Rauchway , “New Deal Denialism,” Dissent (Winter 2010): 68–72.

69. Brinkley, The End of Reform , 141.

70. Christina D. Romer , “What Ended the Great Depression?” Journal of Economic History 52 (December 1992): 757.

71. Kennedy, Freedom from Fear , 372.

72. Cohen, Making a New Deal , 252–289.

73. Linda Gordon , “The New Deal Was a Good Idea, We Should Try It This Time,” Dissent (Fall 2009): 33.

74. Because the white South had been “solidly” Democratic since the Civil War and most blacks were disenfranchised, the region’s Democratic politicians had little competition. As a result, they achieved a seniority that gave them powerful control over many House and Senate committees. Ira Katznelson explores the racial repercussions of this Southern committee control on New Deal policy at length in When Affirmative Action Was White: An Untold History of Racial Inequality in 20th-Century America (New York: W. W. Norton, 2005), and in Fear Itself: The New Deal and the Origins of Our Time .

75. Alice Kessler-Harris , “In the Nation’s Image: The Gendered Limits of Social Citizenship in the Depression Era,” Journal of American History 86 (December 1999): 1262 ; Katznelson, When Affirmative Action Was White , 43.

76. Robert H. Zieger , The CIO, 1935–1955 (Chapel Hill: University of North Carolina Press, 1995), 1.

77. Arthur M. Schlesinger Jr. , The Age of Roosevelt , 3 vols. (Boston: Houghton Mifflin, 1957–1960) ; Frank Freidel , Franklin D. Roosevelt , 4 vols. (Boston: Little, Brown, 1952–1973) ; Eric Frederick Goldman , Rendezvous with Destiny: A History of Modern American Reform (New York: Knopf, 1952).

78. Richard Hofstadter , The Age of Reform: From Bryan to FDR (New York: Knopf, 1955), 303.

79. Carl Degler , Out of Our Past: The Forces That Shaped Modern America (New York: Harper, 1959), 379.

80. Edgar E. Robinson , The Roosevelt Leadership, 1933–1945 (Philadelphia: Lippincott, 1955), 14 , 263, 374, 404. See also John T. Flynn , The Roosevelt Myth (New York: Devin Adair, 1948).

81. Moley, After Seven Years .

82. The best recent example is journalist Amity Shlaes’s bestseller, The Forgotten Man: A New History of the Great Depression (New York: HarperCollins, 2007) . Shlaes argues that the policies of both Hoover and Roosevelt prolonged the Depression and that even World War II did not lead to economic recovery. Whereas most historians use the nation’s gross domestic product as a measure of the economy, Shlaes bases her case on the lackluster performance of the Dow Jones Industrial Average. For a powerful critique of Shlaes’s argument, see Eric Rauchway, “New Deal Denialism,” 68–72.

83. Barton J. Bernstein , “The New Deal: The Conservative Achievements of Liberal Reform,” in Towards a New Past: Dissenting Essays in American History , edited by Barton J. Bernstein , 263–288 (New York: Pantheon Books, 1968) ,. See also Howard Zinn , ed., New Deal Thought (Indianapolis: Bobbs-Merrill, 1966) , and Paul K. Conkin , The New Deal (London: Routledge & Kegan Paul, 1968).

84. Fraser and Gerstle, eds., The Rise and Fall of the New Deal Order , ix.

86. Leuchtenberg, Franklin D. Roosevelt and the New Deal , 347.

87. Fraser and Gerstle, eds., The Rise and Fall of the New Deal Order , ix–x.

88. While they agreed on much, Fraser and Lichtenstein differed on whether the 1930s or the 1940s were the key conservatizing decade. In addition to Fraser and Lichtenstein’s contributions to The Rise and Fall of the New Deal Order , see Steve Fraser , Labor Will Rule: Sidney Hillman and the Rise of American Labor (New York: Free Press, 1991) ; Nelson Lichtenstein , The Most Dangerous Man in Detroit: Walter Reuther and the Fate of American Labor (New York: Basic Books, 1995) ; and Nelson Lichtenstein , State of the Union: A Century of American Labor (Princeton, NJ: Princeton University Press, 2002).

89. Alan Brinkley , “The New Deal and the Idea of the State,” in The Rise and Fall of the New Deal Order: 1930–1980 , edited by Steve Fraser and Gary Gerstle , 85–121 (Princeton, NJ: Princeton University Press, 1989) . See also Alan Brinkley, The End of Reform: New Deal Liberalism in Recession and War .

90. Katznelson, When Affirmative Action Was White ; Mary Poole , The Segregated Origins of Social Security: African Americans and the Welfare State (Chapel Hill: University of North Carolina Press, 2006).

91. Cybelle Fox , Three Worlds of Relief: Race, Immigration and the American Welfare State from the Progressive Era to the New Deal (Princeton, NJ: Princeton University Press, 2012).

92. Alice Kessler-Harris , “In the Nation’s Image: The Gendered Limits of Social Citizenship in the Depression Era” ; Linda Gordon , Pitied but Not Entitled: Single Mothers and the History of Welfare, 1890–1935 (New York: Free Press, 1994) ; Gwendolyn Mink , The Wages of Motherhood: Inequality in the Welfare State, 1917–1942 (Ithaca, NY: Cornell University Press, 1995) ; Suzanne Mettler , Dividing Citizens: Gender and Federalism in New Deal Public Policy (Ithaca, NY: Cornell University Press, 1998) ; Alice Kessler-Harris , In Pursuit of Equity: Women, Men, and the Quest for Economic Citizenship in 20th Century America (New York: Oxford University Press, 2001).

93. Kennedy, Freedom from Fear , 365, 376, 379.

94. Katznelson, Fear Itself , 486, 6–7.

95. Wendy L. Wall , Inventing the “American Way”: The Politics of Consensus from the New Deal to the Civil Rights Movement (New York: Oxford University Press, 2008).

96. James T. Kloppenberg , “Who’s Afraid of the Welfare State,” Reviews in American History 18 (1990): 398.

97. Kim Phillips-Fein , Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009), xi–xii.

98. Kevin Kruse , One Nation Under God: How Corporate America Invented Christian America (New York: Basic Books, 2015).

99. Jefferson Cowie , The Great Exception: The New Deal and the Limits of American Politics (Princeton, NJ: Princeton University Press, 2016), 15 , 24–25, 9. This book expands on an argument that Cowie and Nick Salvatore first made in “The Long Exception: Rethinking the Place of the New Deal in American History,” International Labor and Working-Class History 74 (Fall 2008): 3–32.

100. Richard Lowitt and Maurine Beasley , eds., One Third of a Nation: Lorena Hickok Reports on the Great Depression (Urbana: University of Illinois Press, 1981).

101. Robert S. McElvaine , Down and Out in the Great Depression: Letters from the Forgotten Man , 25th anniversary ed. (Chapel Hill: University of North Carolina Press, 2008).

102. Ann Banks , First Person America (New York: W. W. Norton, 1991).

103. Studs Terkel , Hard Times: An Oral History of the Great Depression (New York: The New Press, 2005).

104. Harry Hopkins , Spending to Save (New York: Norton, 1936).

105. Raymond Moley , After Seven Years (New York: Harper, 1939).

106. Frances Perkins , The Roosevelt I Knew (New York: Viking, 1946) ; and Harold L. Ickes , The Secret Diary of Harold L. Ickes , 2 vols. (New York: Simon and Schuster, 1953–1954).

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Franklin Roosevelt and the New Deal, 1932-1941

The First New Deal

OpenStaxCollege

[latexpage]

Learning Objectives

By the end of this section, you should be able to:

• Identify the key pieces of legislation included in Roosevelt’s “First New Deal”
• Assess the strengths, weaknesses, and general effectiveness of the First New Deal
• Explain Roosevelt’s overall vision for addressing the structural problems in the U.S. economy

Much like a surgeon assessing the condition of an emergency room patient, Roosevelt began his administration with a broad, if not specific, strategy in mind: a combination of relief and recovery programs designed to first save the patient (in this case, the American people), and then to find a long-term cure (reform through federal regulation of the economy). What later became known as the “First New Deal” ushered in a wave of legislative activity seldom before seen in the history of the country. By the close of 1933, in an effort to stem the crisis, Congress had passed over fifteen significant pieces of legislation—many of the circulated bills allegedly still wet with ink from the printing presses as members voted upon them. Most bills could be grouped around issues of relief, recovery, and reform. At the outset of the First New Deal, specific goals included 1) bank reform; 2) job creation; 3) economic regulation; and 4) regional planning.

REFORM: THE BANKING CRISIS

When Roosevelt took office, he faced one of the worst moments in the country’s banking history. States were in disarray. New York and Illinois had ordered the closure of their banks in the hopes of avoiding further “bank runs,” which occurred when hundreds (if not thousands) of individuals ran to their banks to withdraw all of their savings. In all, over five thousand banks had been shuttered. Within forty-eight hours of his inauguration, Roosevelt proclaimed an official bank holiday and called Congress into a special session to address the crisis. The resulting Emergency Banking Act of 1933 was signed into law on March 9, 1933, a scant eight hours after Congress first saw it. The law officially took the country off the gold standard, a restrictive practice that, although conservative and traditionally viewed as safe, severely limited the circulation of paper money. Those who held gold were told to sell it to the U.S. Treasury for a discounted rate of a little over twenty dollars per ounce. Furthermore, dollar bills were no longer redeemable in gold. The law also gave the comptroller of currency the power to reorganize all national banks faced with insolvency, a level of federal oversight seldom seen prior to the Great Depression. Between March 11 and March 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies swept through the country, examining each bank. By March 15, 70 percent of the banks were declared solvent and allowed to reopen.

On March 12, the day before the banks were set to reopen, Roosevelt held his first “ fireside chat ” ( [link] ). In this initial radio address to the American people, he explained what the bank examiners had been doing over the previous week. He assured people that any bank open the next day had the federal government’s stamp of approval. The combination of his reassuring manner and the promise that the government was addressing the problems worked wonders in changing the popular mindset. Just as the culture of panic had contributed to the country’s downward spiral after the crash, so did this confidence-inducing move help to build it back up. Consumer confidence returned, and within weeks, close to $1 billion in cash and gold had been brought out from under mattresses and hidden bookshelves, and re-deposited in the nation’s banks. The immediate crisis had been quelled, and the public was ready to believe in their new president.

Fireside chats—Roosevelt’s weekly radio addresses—underscored Roosevelt’s savvy in understanding how best to reach people. Using simple terms and a reassuring tone, he invoked a family patriarch sitting by the fire, explaining to those who trusted him how he was working to help them. It is worth noting how he explained complex financial concepts quite simply, but at the same time, complimented the American people on their “intelligent support.” One of his fireside chats is provided below:

I recognize that the many proclamations from State capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms, should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week. . . .

The success of our whole great national program depends, of course, upon the cooperation of the public—on its intelligent support and use of a reliable system. . . . After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail.

—Franklin D. Roosevelt, March 12, 1933

A huge part of Roosevelt’s success in turning around the country can be seen in his addresses like these: He built support and galvanized the public. Ironically, Roosevelt, the man who famously said we have nothing to fear but fear itself, had a significant fear: fire. Being paralyzed with polio, he was very afraid of being left near a fireplace. But he knew the power of the hearth and home, and drew on this mental image to help the public view him the way that he hoped to be seen.

Listen to one of Roosevelt’s fireside chat speeches. What kind of feeling does his language and demeanor evoke?

In June 1933, Roosevelt replaced the Emergency Banking Act with the more permanent Glass-Steagall Banking Act . This law prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits. This law also created the Federal Deposit Insurance Corporation, or FDIC, which insured personal bank deposits up to $2,500. Other measures designed to boost confidence in the overall economy beyond the banking system included passage of the Economy Act, which fulfilled Roosevelt’s campaign pledge to reduce government spending by reducing salaries, including his own and those of the Congress. He also signed into law the Securities Act, which required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds. Roosevelt also sought new revenue through the Beer Tax. As the Twenty-First Amendment, which would repeal the Eighteenth Amendment establishing Prohibition, moved towards ratification, this law authorized the manufacture of 3.2 percent beer and levied a tax on it.

THE FIRST HUNDRED DAYS

In his first hundred days in office, the new president pushed forward an unprecedented number of new bills, all geared towards stabilizing the economy, providing relief to individuals, creating jobs, and helping businesses. A sympathetic Democrat-controlled Congress helped propel his agenda forward.

Relief: Employment for the Masses

Even as he worked to rebuild the economy, Roosevelt recognized that the unemployed millions required jobs more quickly than the economy could provide. In a push to create new jobs, Roosevelt signed the Wagner-Peyser Act, creating the United States Employment Service, which promised states matching funds if they created local employment opportunities. He also authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA). This money went directly to states to infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed. These two bills illustrate Roosevelt’s dual purposes of providing short-term emergency help and building employment opportunities that would strengthen the economy in the long term.

Roosevelt was aware of the need for immediate help, but he mostly wanted to create more jobs. FERA overseer Harry Hopkins, who later was in charge of the Civil Works Administration (CWA), shared this sentiment. With Hopkins at its helm, the CWA, founded in early 1933, went on to put millions of men and women to work. At its peak, there were some four million Americans repairing bridges, building roads and airports, and undertaking other public projects. Another work program was the Civilian Conservation Corps Relief Act (CCC). The CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families. They would earn thirty dollars per month planting trees, fighting forest fires, and refurbishing historic sites and parks, building an infrastructure that families would continue to enjoy for generations to come. Within the first two months, the CCC employed its first 250,000 men and eventually established about twenty-five hundred camps ( [link] ).

The various programs that made up the First New Deal are listed in the table below ( [link] ).

The final element of Roosevelt’s efforts to provide relief to those in desperate straits was the Home Owners’ Refinancing Act. Created by the Home Owners’ Loan Corporation (HOLC), the program rescued homeowners from foreclosure by refinancing their mortgages. Not only did this save the homes of countless homeowners, but it also saved many of the small banks who owned the original mortgages by relieving them of that responsibility. Later New Deal legislation created the Federal Housing Authority, which eventually standardized the thirty-year mortgage and promoted the housing boom of the post-World War II era. A similar program, created through the Emergency Farm Mortgage Act and Farm Credit Act, provided the same service for farm mortgages.

In this American Experience interview, Neil Maher, author of Nature’s New Deal: The Civilian Conservation Corps and Roots of the Modern Environmental Movement , provides a comprehensive look into what the CCC offered the country—and the president—on issues as diverse as economics, race, and recreation.

Rescuing Farms and Factories

While much of the legislation of the first hundred days focused on immediate relief and job creation through federal programs, Roosevelt was committed to addressing the underlying problems inherent in the American economy. In his efforts to do so, he created two of the most significant pieces of New Deal legislation: the Agricultural Adjustment Act (AAA) and the National Industry Recovery Act (NIRA).

Farms around the country were suffering, but from different causes. In the Great Plains, drought conditions meant that little was growing at all, while in the South, bumper crops and low prices meant that farmers could not sell their goods at prices that could sustain them. The AAA offered some direct relief: Farmers received $4.5 million through relief payments. But the larger part of the program paid southern farmers to reduce their production: Wheat, cotton, corn, hogs, tobacco, rice, and milk farmers were all eligible. Passed into law on May 12, 1933, it was designed to boost prices to a level that would alleviate rural poverty and restore profitability to American agriculture. These price increases would be achieved by encouraging farmers to limit production in order to increase demand while receiving cash payments in return. Corn producers would receive thirty cents per bushel for corn they did not grow. Hog farmers would get five dollars per head for hogs not raised. The program would be financed by a tax on processing plants, passed on to consumers in the form of higher prices.

This was a bold attempt to help farmers address the systemic problems of overproduction and lower commodity prices. Despite previous efforts to regulate farming through subsidies, never before had the federal government intervened on this scale; the notion of paying farmers not to produce crops was unheard of. One significant problem, however, was that, in some cases, there was already an excess of crops, in particular, cotton and hogs, which clogged the marketplace. A bumper crop in 1933, combined with the slow implementation of the AAA, led the government to order the plowing under of ten million acres of cotton, and the butchering of six million baby pigs and 200,000 sows. Although it worked to some degree—the price of cotton increased from six to twelve cents per pound—this move was deeply problematic. Critics saw it as the ultimate example of corrupt capitalism: a government destroying food, while its citizens were starving, in order to drive up prices.

Another problem plaguing this relief effort was the disparity between large commercial farms, which received the largest payments and set the quotas, and the small family farms that felt no relief. Large farms often cut production by laying off sharecroppers or evicting tenant farmers, making the program even worse for them than for small farm owners. Their frustration led to the creation of the Southern Tenant Farmers Union (STFU), an interracial organization that sought to gain government relief for these most disenfranchised of farmers. The STFU organized, protested, and won its members some wage increases through the mid-1930s, but the overall plight of these workers remained dismal. As a result, many of them followed the thousands of Dust Bowl refugees to California ( [link] ).

And if the growers get in the way, we’re gonna roll right over them We’re gonna roll right over them, we’re gonna roll right over them And if the growers get in the way, we’re gonna roll right over them We’re gonna roll this union on —John Handcox, “Roll the Union On”

“Mean Things Happening in This Land,” “Roll the Union On,” and “Strike in Arkansas” are just a few of the folk songs written by John Handcox. A union organizer and STFU member, Handcox became the voice of the worker’s struggle, writing dozens of songs that have continued to be sung by labor activists and folk singers over the years. Handcox joined the STFU in 1935, and used his songs to rally others, stating, “I found out singing was more inspiring than talking . . . to get the attention of the people.”

Racially integrated and with active women members, the STFU was ahead of its time. Although criticized by other union leaders for its relationship with the Communist Party in creating the “Popular Front” for labor activism in 1934, the STFU succeeded in organizing strikes and bringing national attention to the issues that tenant farmers faced. While the programs Roosevelt put in place did not do enough to help these farmers, the STFU—and Handcox’s music—remains a relevant part of the country’s labor movement.

The AAA did succeed on some fronts. By the spring of 1934, farmers had formed over four thousand local committees, with more than three million farmers agreeing to participate. They signed individual contracts agreeing to take land out of production in return for government payments, and checks began to arrive by the end of 1934. For some farmers, especially those with large farms, the program spelled relief.

While Roosevelt hoped the AAA would help farms and farmers, he also sought aid for the beleaguered manufacturing sector. The Emergency Railroad Transportation Act created a national railroad office to encourage cooperation among different railroad companies, hoping to shore up an industry essential to the stability of the manufacturing sector, but one that had been devastated by mismanagement. More importantly, the NIRA suspended antitrust laws and allowed businesses and industries to work together in order to establish codes of fair competition, including issues of price setting and minimum wages. New Deal officials believed that allowing these collaborations would help industries stabilize prices and production levels in the face of competitive overproduction and declining profits; however, at the same time, many felt it important to protect workers from potentially unfair agreements.

A new government agency, the National Recovery Administration (NRA), was central to this plan, and mandated that businesses accept a code that included minimum wages and maximum work hours. In order to protect workers from potentially unfair agreements among factory owners, every industry had its own “code of fair practice” that included workers’ rights to organize and use collective bargaining to ensure that wages rose with prices ( [link] ). Headed by General Hugh S. Johnson, the NRA worked to create over five hundred different codes for different industries. The administration of such a complex plan naturally created its own problems. While codes for key industries such as automotive and steel made sense, Johnson pushed to create similar codes for dog food manufacturers, those who made shoulder pads for women’s clothing, and even burlesque shows (regulating the number of strippers in any one show).

The NIRA also created the Public Works Administration (PWA). The PWA set aside $3.3 billion to build public projects such as highways, federal buildings, and military bases. Although this program suffered from political squabbles over appropriations for projects in various congressional districts, as well as significant underfunding of public housing projects, it ultimately offered some of the most lasting benefits of the NIRA. Secretary of the Interior Harold Ickes ran the program, which completed over thirty-four thousand projects, including the Golden Gate Bridge in San Francisco and the Queens-Midtown Tunnel in New York. Between 1933 and 1939, the PWA accounted for the construction of over one-third of all new hospitals and 70 percent of all new public schools in the country.

Another challenge faced by the NRA was that the provision granting workers the right to organize appeared to others as a mandate to do so. In previously unorganized industries, such as oil and gas, rubber, and service occupations, workers now sought groups that would assist in their organization, bolstered by the encouragement they now felt from the government. The Communist Party took advantage of the opportunity to assist in the hope of creating widespread protests against the American industrial structure. The number of strikes nationwide doubled between 1932 and 1934, with over 1.5 million workers going on strike in 1934 alone, often in protests that culminated in bloodshed. A strike at the Auto-Lite plant in Toledo, Ohio, that summer resulted in ten thousand workers from other factories joining in sympathy with their fellow workers to attack potential strike-breakers with stones and bricks. Simultaneously in Minneapolis, a teamsters strike resulted in frequent, bloody confrontations between workers and police, leading the governor to contemplate declaring martial law before the companies agreed to negotiate better wages and conditions for the workers. Finally, a San Francisco strike among 14,000 longshoremen closed the city’s waterfront and eventually led to a city-wide general strike of over 130,000 workers, essentially paralyzing the city. Clashes between workers, and police and National Guardsmen left many strikers bloodied, and at least two dead.

Although Roosevelt’s relief efforts provided jobs to many and benefitted communities with the construction of several essential building projects, the violence that erupted amid clashes between organized labor and factories backed by police and the authorities exposed a fundamental flaw in the president’s approach. Immediate relief did not address long-existing, inherent class inequities that left workers exposed to poor working conditions, low wages, long hours, and little protection. For many workers, life on the job was not much better than life as an unemployed American. Employment programs may have put men back to work and provided much needed relief, but the fundamental flaws in the system required additional attention—attention that Roosevelt was unable to pay in the early days of the New Deal. Critics were plentiful, and the president would be forced to address them in the years ahead.

Regional Planning

Regionally, Roosevelt’s work was most famously seen in the Tennessee Valley Authority (TVA) ( [link] ), a federal agency tasked with the job of planning and developing the area through flood control, reforestation, and hydroelectric power. Employing several thousand Americans on a project that Roosevelt envisioned as a template for future regional redevelopment, the TVA revitalized a river valley that landowners had badly over-farmed, leaving behind eroded soil that lacked essential nutrients for future farming. Under the direction of David Lilienthal, beginning in 1933, the TVA workers erected a series of dams to harness the Tennessee River in the creation of much-needed hydroelectric power . The arrival of both electric lighting and machinery to the region eased the lives of the people who lived there, as well as encouraged industrial growth. The TVA also included an educational component, teaching farmers important lessons about crop rotation, soil replenishment, fertilizing, and reforestation.

The TVA was not without its critics, however, most notably among the fifteen thousand families who were displaced due to the massive construction projects. Although eventually the project benefited farmers with the introduction of new farming and fertilizing techniques, as well as the added benefit of electric power, many local citizens were initially mistrustful of the TVA and the federal government’s agenda. Likewise, as with several other New Deal programs, women did not directly benefit from these employment opportunities, as they were explicitly excluded for the benefit of men who most Americans still considered the family’s primary breadwinner. However, with the arrival of electricity came new industrial ventures, including several textile mills up and down the valley, several of which offered employment to women. Throughout his presidency, Roosevelt frequently pointed to the TVA as one of the glowing accomplishments of the New Deal and its ability to bring together the machinery of the federal government along with private interests to revitalize a regional economy. Just months before his death in 1945, he continued to speak of the possibility of creating other regional authorities throughout the country.

ASSESSING THE FIRST NEW DEAL

While many were pleased with the president’s bold plans, there were numerous critics of the New Deal, discussed in the following section. The New Deal was far from perfect, but Roosevelt’s quickly implemented policies reversed the economy’s long slide. It put new capital into ailing banks. It rescued homeowners and farmers from foreclosure and helped people keep their homes. It offered some direct relief to the unemployed poor. It gave new incentives to farmers and industry alike, and put people back to work in an effort to both create jobs and boost consumer spending. The total number of working Americans rose from twenty-four to twenty-seven million between 1933 and 1935, in contrast to the seven-million-worker decline during the Hoover administration. Perhaps most importantly, the First New Deal changed the pervasive pessimism that had held the country in its grip since the end of 1929. For the first time in years, people had hope.

It was the hard work of Roosevelt’s advisors—the “Brains Trust” of scholars and thinkers from leading universities—as well as Congress and the American public who helped the New Deal succeed as well as it did. Ironically, it was the American people’s volunteer spirit, so extolled by Hoover, that Roosevelt was able to harness. The first hundred days of his administration was not a master plan that Roosevelt dreamed up and executed on his own. In fact, it was not a master plan at all, but rather a series of, at times, disjointed efforts made from different assumptions. But after taking office and analyzing the crisis, Roosevelt and his advisors did feel that they had a larger sense of what had caused the Great Depression and thus attempted a variety of solutions to fix it. They believed that it was caused by abuses on the part of a small group of bankers and businessmen, aided by Republican policies that built wealth for a few at the expense of many. The answer, they felt, was to root out these abuses through banking reform, as well as adjust production and consumption of both farm and industrial goods. This adjustment would come about by increasing the purchasing power of everyday people, as well as through regulatory policies like the NRA and AAA. While it may seem counterintuitive to raise crop prices and set prices on industrial goods, Roosevelt’s advisors sought to halt the deflationary spiral and economic uncertainty that had prevented businesses from committing to investments and consumers from parting with their money.

Section Summary

After assuming the presidency, Roosevelt lost no time in taking bold steps to fight back against the poverty and unemployment plaguing the country. He immediately created a bank holiday and used the time to bring before Congress legislation known as the Emergency Banking Act, which allowed federal agencies to examine all banks before they reopened, thus restoring consumer confidence. He then went on, in his historic first hundred days, to sign numerous other significant pieces of legislation that were geared towards creating jobs, shoring up industry and agriculture, and providing relief to individuals through both refinancing options and direct handouts. Not all of his programs were effective, and many generated significant criticism. Overall, however, these programs helped to stabilize the economy, restore confidence, and change the pessimistic mindset that had overrun the country.

Review Questions

Which of the following was not a policy undertaken by the NIRA?

What type of help did the CWA provide?

In what ways did the New Deal both provide direct relief and create new jobs? Which programs served each of these goals?

The most prominent of Roosevelt’s job-creation programs included the Civilian Conservation Corps and the Public Works Administration (the latter under the auspices of the National Industrial Recovery Act). Both employed millions of Americans to work on thousands of projects. While programs such as the Tennessee Valley Authority were not incepted solely for the purpose of generating jobs, they nevertheless created thousands of employment opportunities in service of their greater goals. Direct relief came primarily in the form of the Federal Emergency Relief Administration, which lent over $3 billion to states to operate direct relief programs from 1933 to 1935, as well as undertook several employment projects.

How did the NRA seek to protect workers? What difficulties did this agency face?

The National Recovery Administration (NRA) established a “code of fair practice” for every industry. Business owners were made to accept a set minimum wage and maximum number of work hours, as well as to recognize workers’ rights to organize and use collective bargaining. While the NRA established over five hundred different codes, it proved difficult to adapt this plan successfully for diverse industries with very different characteristics and practices.

The First New Deal Copyright © 2014 by OpenStaxCollege is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

• History of the New...
• What Was the New...

What Was the New Deal?

The New Deal was the effort by President Franklin D. Roosevelt, who took office in 1933, to respond to the calamity of the Great Depression and alleviate the despair besetting America.  FDR and the New Dealers launched scores of new programs to respond to a wide range of problems facing the country: stabilizing the banks and stimulating the economy, creating jobs and raising wages, investing in public works and modernizing lagging regions, and giving ordinary Americans a new sense of security and hope.  The New Deal lasted until American entry into the Second World War at the end of 1942.  In ten years it transformed the country and restored our faith in the ability of government to serve the people.

Economic Recovery

National output had fallen by one-third from 1929 to 1933 and thousands of banks had collapsed, taking households savings with them.  The New Deal stabilized the banks and cleaned up the financial mess left over from the Stock Market crash, allowing credit to flow again.  It stabilized farm prices, aided state and local governments, and injected a surge of federal spending into the economy that bolstered household incomes and business revenues. Growth rebounded to annual rates hitting 10% and by 1939 national income was back to the level of 1929.

Jobs, Wages and Income Security

By 1933, one in four Americans was out of work by 1933 (one in three in the private sector) – roughly 15 million workers. The New Deal created a multitude of agencies that provided over 10 million jobs for the unemployed, whose wages saved millions of families from destitution. Unemployment was reduced to 10%  by 1942.  The rights of workers to organize was recognized, leading to a huge surge in union membership and rising wages, and a federal minimum wage was introduced.  The Social Security system was begun to support pensions for seniors, along with support for mothers with children.

Public Works and Modernization

The New Deal used an array of federal agencies, local governments, and private contractors to upgrade and expand the nation’s infrastructure.  It built hundreds of thousands of new roads, bridges, and tunnels; city halls, libraries and post offices; hospitals, schools and auditoriums; dams, water works and sewage systems; and airports, parks and military installations. It spread these improvements across the country, bringing lagging regions into the 20th century with paved roads, electric wires and telephone lines.  These massive waves of public investment helped to underwrite the war effort and postwar prosperity.  Because it was well built, most New Deal infrastructure is still in use today.

Civic Uplift

The New Deal touched every state, city, and town, improving the lives of ordinary people and reshaping the public sphere.  New Dealers and the men and women who worked on New Deal programs believed they were not only serving their families and communities, but building the foundation for a great and caring society.

In less than a decade, the New Deal changed the face of America and laid the foundation for success in World War II and the prosperity of the postwar era – the greatest and fairest epoch in American history.  Most of all, the New Deal inspired a civic, cultural, and economic renaissance.

Unfortunately, the New Deal is fading from the collective memory of Americans — a casualty of time, neglect, and politics.  The Living New Deal is making visible that enduring legacy.

To find out more, click below for briefs on New Deal programs, New Deal leaders, New Deal Inclusion and The New Deal Worked, as well as a timeline of the New Deal. You can also use the pull down menu under “History” on any page .

New Deal Programs

New Deal Timeline

New Dealers

New Deal Inclusion

The New Deal Worked

For a further introduction, see:

The First New Deal    – a lecture powerpoint by Richard A Walker (2019)

New Deal in Brief  by Richard A Walker (2011)

R. Walker & G. Brechin, The Living New Deal: the Unsung Benefits of the New Deal for the United States and California (2010)

Living New Deal. Still Working for America.

And the winners are . . ..

The 2023 New Deal Book Award

The winning titles and authors have been announced. The 2023 Award, with a prize of $1,000, will be presented at the Franklin D. Roosevelt Presidential Library June 22, 2024.

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The New Deal: Meaning, Overview, History

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

What Was the New Deal?

The New Deal was a comprehensive and broad set of government-directed projects introduced by President Franklin Delano Roosevelt in an attempt to help the United States economy emerge from the Great Depression . It launched in the early 1930s and was designed to bolster the United States economy, reduce unemployment, provide a social safety net, and instill confidence in the government’s ability to protect its citizens.

Key Takeaways

• The New Deal was a series of domestic programs introduced by President Franklin D. Roosevelt in an attempt to end the economic ravages of the Great Depression.
• The New Deal also attempted to curb the excesses of untrammeled capitalism through such policies as setting minimum wages, regulating working conditions, promoting labor unions, and bolstering retirement security.
• The New Deal made the government’s role in steering the economy more important.

Understanding the New Deal

The stock market crash of 1929 began on October 24—a day known as Black Thursday . It brought a period of roaring growth to a sudden halt.   Companies and banks across the United States started failing, and the unemployment rate skyrocketed to the point that nearly a quarter of the workforce was unemployed.

President Franklin Roosevelt launched the New Deal after taking office in 1933.   It consisted of a variety of government-funded programs aimed at getting people back to work, as well as legislation and executive orders that propped up farmers and stimulated business activity.

The New Deal engendered controversy by introducing a number of radical reforms and increasing the government’s role in guiding the economy. Several of its programs were ultimately declared unconstitutional by the U.S. Supreme Court, including two major pillars: the National Recovery Administration (NRA)—which set working conditions, minimum wages, and maximum hours, while guaranteeing the right of labor to bargain collectively —and the Agricultural Adjustment Administration (AAA), which intended to stabilize farm prices.    

Public opinion was for the New Deal, though, and, as a result, in February of 1937 Roosevelt tried to increase the number of Supreme Court justices in order to prevent future programs from being shuttered.   Though he failed in this court-packing attempt, he succeeded in his objective. In May 1937, the Supreme Court declared the Social Security Act to be constitutional by a five-to-four vote after one of its justices changed his anti–New Deal stance. No other New Deal program was ever again judicially invalidated by the court.  

The New Deal was enacted in two parts: the first in 1933 and the second in 1935.  

History of the New Deal

The New Deal is often broken into two segments. The “first” New Deal was launched in 1933 during the initial two years of the Roosevelt presidency. In addition to the NRA and AAA, it consisted of measures to stabilize the banking system ( Emergency Banking Act ), ensure bank deposit security (Banking Act of 1933, known as the Glass-Steagall Act ), and increase confidence in the stock market ( Securities Act of 1933 ).

The “second” New Deal, in 1935, introduced perhaps the program’s greatest and most enduring legacy : government-sponsored retirement plans in the form of Social Security. It also increased government employment ( Works Progress Administration ) and minimum wages ( Fair Labor Standards Act ).

Was the New Deal a Success?

Historians credit the New Deal with some success in reviving the country’s fortunes . The economy did slowly recover during the 1930s, confidence was restored to the banking system through federal deposit insurance, working conditions were improved, and labor unions strengthened the hand of workers.

It was World War II, however, that ultimately provided the impetus to get America fully back to work. The unprecedented spending worldwide on ships, arms, and planes propelled the country into full employment —a feat that the New Deal programs, despite their best efforts, were unable to achieve on their own.

Economic History Association. " The 1929 Stock Market Crash ." Accessed Feb. 11, 2021.

Library of Congress. " President Franklin Delano Roosevelt and the New Deal ." Accessed Feb. 11, 2021.

National Archives Catalog. " Department of Agriculture. Agricultural Adjustment Administration. (1933 - 2/23/1942) Organization Authority Record ." Accessed Feb. 11, 2021.

Library of Congress. " National Recovery Administration (NRA) and the New Deal: A Resource Guide ." Accessed Feb. 11, 2021.

Federal Judicial Center. " FDR's "Court-Packing" Plan ." Accessed Feb 11, 2021.

Social Security Administration. " Constitutionality of Social Security Act ." Accessed Feb 11, 2021.

Library of Congress. " New Deal Programs: Selected Library of Congress Resources ." Accessed Dec. 27, 2020.

• Depression in the Economy: Definition and Example 1 of 14
• What Is Economic Collapse? Definition and How It Can Occur 2 of 14
• Business Cycle: What It Is, How to Measure It, the 4 Phases 3 of 14
• Boom And Bust Cycle: Definition, How It Works, and History 4 of 14
• Negative Growth: Definition and Economic Impact 5 of 14
• The Great Depression: Overview, Causes, and Effects 6 of 14
• Were There Any Periods of Major Deflation in U.S. History? 7 of 14
• The Greatest Generation: Definition and Characteristics 8 of 14
• A History of U.S. Government Financial Bailouts 9 of 14
• Understanding Austerity, Types of Austerity Measures, and Examples 10 of 14
• The New Deal: Meaning, Overview, History 11 of 14
• The Economic Effects of the New Deal 12 of 14
• Gold Reserve Act of 1934: Meaning, History 13 of 14
• Emergency Banking Act of 1933: Definition, Purpose, Importance 14 of 14

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New Deal Summary, Programs, Policies, and Its Success

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The New Deal is an economic policy launched by Franklin D. Roosevelt to end the  Great Depression . Americans were battered by 25% unemployment, Dust Bowl droughts, and four waves of bank failures. They welcomed the government's rescue.

FDR proposed the New Deal to reverse the downward economic spiral. The goals were relief, recovery, and reform for those who were hardest hit. 

Key Takeaways

• The New Deal was a series of large-scale relief programs and reforms that FDR implemented to counteract the economic effects of the Great Depression.
• The New Deal advocated government spending as a key economic driver boosting consumer demand.
• The New Deal played a significant role in countering the Great Depression and revitalizing the U.S. economy.
• FDR’s plan revealed just how vital the government’s role is in the management of the nation’s economy.

FDR launched the New Deal in three waves from 1933 to 1939. Congress passed dozens of programs to stabilize the U.S. financial system. They provided relief to farmers, and jobs to the unemployed. They also built private-public partnerships to boost manufacturing.

FDR's New Deal policies introduced Keynesian economic theory . It said government spending could end the Depression by stimulating consumer demand. The New Deal was a far cry from President Herbert Hoover's "...hear-nothing, see-nothing, do-nothing Government," derided by FDR in his 1936 campaign speech.

Hoover believed a free-market economy would self-correct. Government revenue fell as the Depression wore on, so Hoover cut spending. He signed the Smoot-Hawley tariff to protect U.S. industries. He believed that business prosperity would trickle down to the average person. The Depression worsened instead.

Roosevelt was inaugurated on March 4, 1933. FDR pushed Congress to pass 15 new agencies and laws in his first 100 days in office. Together, they created "capitalism with safety nets and subsidies," according to historian Lawrence Davidson.  

• Emergency Banking Act - March 9: FDR had proclaimed a four-day nationwide "banking holiday" 36 hours after he was inaugurated, to stop bank runs. On the fourth day of the bank closures, a special session of Congress passed a bill in seven and a half hours. This Act allowed banks to reopen once examiners found them to be financially secure. By March 15, banks controlling 90% of banking resources had reopened, and deposits far exceeded withdrawals.  
• Government Economy Act - March 20: The act permitted Roosevelt to cut the pay of government and military employees by 15%. The $243 million saved went to finance New Deal programs.
• Beer-Wine Revenue Act - March 22: This Act legalized the sale of low-alcohol beer and wine and taxed alcohol sales, raising federal revenue. The Beer-Wine Revenue Act was followed by the passage of the 21st Amendment, which effectively ended Prohibition.
• Civilian Conservation Corps - March 31: The program hired three million workers over nine years to conserve public land. They planted forests, built flood barriers, and maintained roads and trails.
• Abandonment of Gold Standard - April 5: FDR stopped a run on the precious metal. He ordered everyone to exchange all gold for dollars.  
• Federal Emergency Relief Act - May 12: This program funded a wide variety of jobs in agriculture, the arts, construction, and education.
• Agricultural Adjustment Act - May 12: This legislation subsidized farmers to reduce crops. It doubled crop prices by 1937. It was overturned by the Supreme Court in 1936 because it taxed processors but gave funds to farmers. That was remedied in 1938.
• Emergency Farm Mortgage Act - May 12: This act provided loans to save farms from foreclosure.
• Tennessee Valley Authority Act - May 18: The program established a federal corporation that built power stations in the Tennessee Valley, the poorest area in the nation.
• Securities Act - May 27: This act required corporations to provide information to investors before issuing stock.
• Abrogation of Gold Payment Clause - June 5: The government no longer had to repay dollars with gold.
• Home Owners' Loan Act - June 13: This act established the Home Owners Loan Corporation that refinanced mortgages to prevent foreclosures. It also provided additional capital to mortgage lenders. It had refinanced 1 million homes when lending activities closed in 1936, which was the equivalent of 20% of all urban mortgages.
• Glass-Steagall Banking Act - June 16: This law separated investment banking from retail banking. It prevented retail banks from using depositors' funds for risky investments. It gave the regulation of retail banks to the Federal Reserve, prohibited bank sales of securities, and created the Federal Deposit Insurance Corporation (FDIC). The act was repealed in 1999 by the Gramm-Leach-Bliley Act .
• National Industrial Recovery Act - June 16: This labor and consumer law set up the Public Works Administration to create public works jobs, like the Hoover Dam, Route 66, and New York City's Triborough Bridge. This law also created the National Recovery Administration. It outlawed child labor, established minimum wage rates, and limited the workday to eight hours. It gave trade unions the legal right to bargain with employers. It was declared unconstitutional in 1935.
• Emergency Railroad Transportation Act - June 16: This piece of legislation attempted to coordinate the national railway systems.
• Civil Works Administration - November 9: Created thousands of construction jobs to put people to work. Congress allowed this temporary organization to expire on March 31, 1934.  

Conservative businessmen criticized the New Deal for being too socialistic in 1934. Others, like Louisiana politician Huey Long, said it didn't do enough for the poor. FDR pushed for these additional programs despite their criticisms:

• Gold Reserve Act - Jan. 30: FDR prohibited private gold ownership. He increased the price of gold to $35 per ounce, up from $20.67 per ounce where it had been for 100 years. That doubled the value of the gold held in U.S. Federal Reserve Banks from $3.56 billion in January 1934 to $7.57 billion by December 1935, making the United States the world's largest owner of gold.
• National Housing Act - June 27: This law established the Federal Housing Administration, which provides federal insurance for mortgages.
• Securities Exchange Act – June 6: The law created the Securities and Exchange Commission, which regulates stocks and the stock market.
• Federal Communications Act – June 19: The act consolidated all federal regulations of telephone, telegraph, and radio communications under the Federal Communications Commission.

The Supreme Court struck down the National Industrial Recovery Act in 1935. Concerned that other programs would also be eliminated, FDR launched the second round of New Deal programs.

These focused on providing more services for the poor, the unemployed, and farmers. FDR spoke about helping the "...millions who never had a chance—men at starvation wages, women in sweatshops, children at looms."

• Soil Conservation and Domestic Allotment Act - February 29:  This program paid farmers to plant soil-building crops, like beans and grasses, to counteract the Dust Bowl.
• Emergency Relief Appropriation of 1935 - April 8: The program replaced Federal Emergency Relief Act of 1933 and funded the new Works Progress Administration with $4.8 million. It employed 8.5 million people to build bridges, roads, public buildings, public parks, and airports. It paid artists to create 2,566 murals and 17,744 pieces of sculpture to decorate the public works.
• Rural Electrification Act - May 20, 1936: The law provided loans to farming cooperatives to generate electricity for their rural areas.
• National Labor Relations Act / Wagner Act - July 5, 1935: This law protected the rights of employees to organize and address working conditions, with or without a union, and created the National Labor Relations Board.
• Emergency Relief Appropriation Act - April 8, 1935:  It created the Resettlement Administration that trained farmers and administered farm debt adjustment activities. It bought 10 million acres of submarginal farmland and paid farmers to convert it to pasture, preserves, or parks. It resettled farmers onto better land and taught them modern conservation and farming techniques.
• Social Security Act - August 14, 1935: This law created the Administration and the predecessor of the  Social Security Trust Fund to provide income to the elderly, the blind, the disabled, and children in low-income households.

FDR rolled out the Third New Deal in 1937. Concerned about budget deficits, he did not fund it as much as the previous two. 

• United States Housing Act: Also called the Wagner-Steagall Act, it funded state-run public housing projects.
• Bonneville Power Administration: Congress created a federal agency that delivered and sold power from the Bonneville Dam near Portland, Oregon, which had been built by the PWA.
• Farm Tenancy Act: Called the Bankhead-Jones Farm Tenant Act, it created the Farmers’ Home Corporation to provide loans for tenant farmers to buy their farms.
• Farm Security Administration: This replaced the Resettlement Administration to provide loans and training for farmers.

The cutback in New Deal spending pushed the economy back into the Depression. FDR urged Congress to enact a $5 billion relief program that consisted of:

• Federal National Mortgage Association : This organization resells mortgages on the secondary market to provide more funds for banks to lend.
• New Agricultural Adjustment Act: The law remedied the AAA of 1933.
• Fair Labor Standards Act: This labor law established a U.S. minimum wage, overtime pay, record keeping, and youth employment standards.

FDR abolished mark-to-market accounting in 1938. Some experts believed that it forced many banks out of business. The rule forced banks to write down their real estate as values fell. FDR's new rule allowed them to keep these assets on their books at historical prices.

FDR launched the Federal Security Agency in 1939. It administered Social Security, federal education funding, and food and drug safety. Congress abolished it in 1953.  

The New Deal worked. The economy grew 10.8% in 1934 after FDR had launched the first New Deal. The economy increased by 8.9% in 1935 and 12.9% in 1936 when the second New Deal rolled out. The economy contracted 3.3% after FDR cut government spending in 1937.

The debt only grew by approximately $3 billion a year from 1932, the year before the New Deal, to 1941, when the United States entered the war. Defense spending added $23 billion to the debt in 1942. The amount added tripled to $64 billion in 1943. It would have ended the Depression right there and then if that much had been spent in the first year of the New Deal.

Some say that the New Deal didn't work, because the Depression lasted for 10 years. They point out that defense spending on World War II was the only thing that ended the Depression, but it would have ended the Depression if FDR had spent the same amount on the New Deal as he did on the war.

New Deal programs softened the extremes of the business cycle . There were 33 major economic downturns, 22 recessions, four depressions, and seven bank runs and panics before the New Deal, from 1797 through 1932, according to Lawrence Davidson of West Chester University. They impacted 60 of the 132 years covered.  Recessions were more severe than they are in the millennium because there weren't New Deal federal agencies in place to control corruption, fraud, and exploitation. 

There have been 11 recessions that impacted just 10 out of 60 years since WWII. They were milder than those before, thanks to the safety nets of the New Deal.

How the New Deal Could Have Prevented World War II

FDR spent 30 times more in 1943 on the war than he did in 1933 on the New Deal. There was no resistance to war spending as there was to domestic spending. No one was concerned about the budget deficit when the world was worried about Hitler's military dominance.

But concerns about the budget deficit sabotaged the New Deal from ending the Depression's global economic catastrophe . It would have ended the Depression if FDR had spent as much on the New Deal in 1933 as he did in the war in 1943, by creating jobs, demand, and economic growth. The Depression's misery helped propel the German people to put the Nazis and Hitler in power.

The United States could have turned its resources to helping its allies, Great Britain and France, sooner if FDR and the New Deal had ended the Depression in the early 1930s. It would have at least shortened, if not prevented, World War II.

• 1929: Hoover became president. The  stock market crash  in October kicked off the Depression. There was a $1 billion surplus. Unemployment was at 3.2%. 
• 1930: Congress passed the Smoot-Hawley tariff to protect jobs. Trading partners retaliated, driving world trade down by 66%. The economy contracted 8.5%, and unemployment rose to 8.7%. Another $1 billion surplus resulted.
• 1931: The Fed raised rates to defend the gold standard, worsening the depression. The economy contracted 6.4%, unemployment rose to 15.9%, and debt increased by $1 billion. 
• 1932: FDR campaigned on New Deal promises. The economy contracted 12.9%, and unemployment rose to 23.6%. Lower revenues added $3 billion to debt.  
• 1933: FDR took office. He immediately launched 15 programs under the First New Deal. This added $3 billion to debt. Depression started to lift as the economy only contracted 1.2%. Unemployment rose to 24.9%. 
• 1934: The economy grew by 10.8%, and unemployment fell to 21.7%. Five billion dollars was added to the debt. 
• 1935: FDR launched the Second New Deal, adding $2 billion to debt. The economy grew 8.9%, and unemployment fell to 20.1%. 
• 1936: The economy grew 12.9%, reducing unemployment to 16.9%. Five billion dollars was added to the debt. 
• 1937: FDR started his second term. Fearing a budget deficit, he cut spending, only adding $3 billion to debt despite rolling out the Third New Deal. The economy grew 5.1%, and unemployment fell to 14.3%. 
• 1938: No more New Deal legislation was passed. Spending was cut, so only $1 billion was added to the debt. Unemployment rose to 19%. The economy shrank 3.3%. 
• 1939: The Dust Bowl drought ended. The United States spent to build up the military as Europe entered WWII. The expenditures added $3 billion to debt. The economy grew 8%, and unemployment fell to 17.2%. 
• 1940: The unemployment rate fell to 14.6% as the United States began the draft. FDR won reelection. America assisted Great Britain by sending weapons. This added $3 billion to debt. The economy grew by 8.8%. 
• 1941: FDR began his third term. Japan attacked Pearl Harbor in December. The United States entered WWII. Spending eliminated the Depression and added $6 billion to debt. The economy grew 17.7%, and unemployment fell to 9.9%.  
• 1942: Unemployment fell to 4.7% while the economy grew 18.9%. War spending added $23 billion to debt. 
• 1943: The war added $64 billion to debt. Gross domestic product growth was 17% and unemployment fell to 1.9%. Italy surrendered. 
• 1944: GDP growth was 8%, while unemployment was 1.2%. The Bretton-Woods Agreement made the dollar the global currency.  
• 1945: FDR died in April. Truman became president. Truman added $58 billion to debt. Germany surrendered in May. Truman dropped a nuclear bomb in August. Japan surrendered in September, ending WWII. The economy contracted 1%. Unemployment edged up to 1.9% as soldiers returned home.

Many of the New Deal's programs are still safeguarding your finances. The four most significant are Social Security, the minimum wage, the  Securities and Exchange Commission , and the FDIC.

Social Security

The Social Security program provides a guaranteed income for workers who have paid into the system. Most people are familiar with the retirement benefits which can also be extended to the retiree's spouse.

Social Security also pays disability benefits to eligible beneficiaries who become disabled before reaching retirement age. It pays children, surviving spouses, and dependent parents of eligible beneficiaries who die or become disabled. It will even pay benefits to divorced spouses in some cases.

There's also a Supplemental Security Income program that pays benefits to disabled children and adults with limited income. A Special Benefits program provides for qualified World War II veterans.

Minimum Wage

The minimum wage is the lowest legal wage that companies can pay workers. Its purpose is to prevent employers from exploiting desperate workers. The U.S. federal minimum wage was $7.25 per hour as of January 2022, although President Joe Biden signed an executive order on April 27, 2021, requiring all federal contractors to pay a minimum wage of $15 to workers on federal contracts beginning on Jan. 30, 2022.

The minimum wage should provide enough income to afford a living wage. That's the amount needed to provide sufficient food, clothing, and shelter. 

Unfortunately, Congress hasn't raised the minimum wage enough to keep pace with inflation.

The minimum wage translates to $15,080 a year at 40 hours per week for 52 weeks. That's more than the  federal poverty level  for a single person, but it's lower than the poverty level for a couple. Someone trying to support a family by earning minimum wage would qualify for federal poverty assistance.

The SEC regulates stocks, bonds, and mutual funds, making investing safer. The SEC also provides information through Investor.gov that can help you invest. It provides basic education, such as how the markets work, asset allocation, and a review of the different retirement plans. It has a section on " Selecting Your Broker ." It provides financial planning tools, such as how much money you'll need to retire.

The FDIC insures savings, checking, and other deposit accounts up to $250,000 for each account ownership category at each bank. It insures $250,000 per owner for some joint accounts. The FDIC also examined and supervised more than 5,000 banks and savings associations as of 2020.

The FDIC steps in when a bank fails. It sells the bank to another bank and transfers the depositors to the purchasing bank. The transition is seamless from the customer's point of view.

When was the New Deal passed?

The New Deal wasn't passed on a single date. FDR's New Deal ideas were rolled out in a series of laws passed throughout the 1930s. The first piece of the New Deal, the Emergency Banking Act, was passed on March 9, 1933.

What was the basic idea of the New Deal?

The central goals of the New Deal were to stabilize the financial system , provide relief to farmers, find jobs for the unemployed, and boost manufacturing. Historians have described it as "capitalism with safety nets and subsidies."

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27 Franklin Roosevelt And The New Deal

Franklin roosevelt and the new deal, introduction.

The election of President Franklin Delano Roosevelt signaled both immediate relief for the American public as well as a permanent shift in the role of the federal government in guiding the economy and providing direct assistance to the people, albeit through expensive programs that made extensive budget deficits commonplace. For many, the immediate relief was, at a minimum, psychological: Herbert Hoover was gone, and the situation could not grow worse under Roosevelt. But as his New Deal unfolded, Americans learned more about the fundamental changes their new president brought with him to the Oval Office. In the span of little more than one hundred days, the country witnessed a wave of legislation never seen before or since.

Roosevelt understood the need to “save the patient,” to borrow a medical phrase he often employed, as well as to “cure the ill.” This meant both creating jobs, through such programs as the Works Progress Administration, which provided employment to over eight million Americans, as well as reconfiguring the structure of the American economy. In pursuit of these two goals, Americans re-elected Roosevelt for three additional terms in the White House and became full partners in the reshaping of their country.  (2)

The Rise of Franklin Roosevelt

Franklin Roosevelt was part of the political establishment and the wealthy elite, but in the 1932 presidential campaign, he did not want to be perceived that way. Roosevelt felt that the country needed sweeping change, and he ran a campaign intended to convince the American people that he could deliver that change. It was not the specifics of his campaign promises that were different; in fact, he gave very few details and likely did not yet have a clear idea of how he would raise the country out of the Great Depression. But he campaigned tirelessly, talking to thousands of people, appearing at his party’s national convention, and striving to show the public that he was a different breed of politician. As Hoover grew more morose and physically unwell in the face of the campaign, Roosevelt thrived. He was elected in a landslide by a country ready for the change he had promised.

The Election of Franklin Roosevelt

By the 1932 presidential election, Hoover’s popularity was at an all-time low. Despite his efforts to address the hardships that many Americans faced, his ineffectual response to the Great Depression left Americans angry and ready for change. Franklin Roosevelt, though born to wealth and educated at the best schools, offered the change people sought. His experience in politics had previously included a seat in the New York State legislature, a vice-presidential nomination, and a stint as governor of New York. During the latter, he introduced many state-level reforms that later formed the basis of his New Deal as well as worked with several advisors who later formed the Brains Trust that advised his federal agenda.

Roosevelt exuded confidence, which the American public desperately wished to see in their leader. And, despite his affluence, Americans felt that he could relate to their suffering due to his own physical hardships; he had been struck with polio a decade earlier and was essentially paralyzed from the waist down for the remainder of his life. Roosevelt understood that the public sympathized with his ailment; he likewise developed a genuine empathy for public suffering as a result of his illness. However, he never wanted to be photographed in his wheelchair or appear infirm in any way, for fear that the public’s sympathy would transform into concern over his physical ability to discharge the duties of the Oval Office.

Roosevelt also recognized the need to convey to the voting public that he was not simply another member of the political aristocracy. At a time when the country not only faced its most severe economic challenges to date, but Americans began to question some of the fundamental principles of capitalism and democracy, Roosevelt sought to show that he was different—that he could defy expectations—and through his actions could find creative solutions to address the nation’s problems while restoring public confidence in fundamental American values. As a result, he not only was the first presidential candidate to appear in person at a national political convention to accept his party’s nomination but also flew there through terrible weather from New York to Chicago in order to do so—a risky venture in what was still the early stages of flight as public transportation. At the Democratic National Convention in 1932, he coined the famous phrase: “I pledge myself to a new deal for the American people.” The New Deal did not yet exist, but to the American people, any positive and optimistic response to the Great Depression was a welcome one.

Hoover assumed at first that Roosevelt would be easy to defeat, confident that he could never carry the eastern states and the business vote. He was sorely mistaken.

Everywhere he went, Hoover was met with antagonism; anti-Hoover signs and protests were the norm. Hoover’s public persona declined rapidly. Many news accounts reported that he seemed physically unwell, with an ashen face and shaking hands. Often, he seemed as though he would faint, and an aide constantly remained nearby with a chair in case he fell. In contrast, Roosevelt thrived on the campaign. He commented, “I have looked into the faces of thousands of Americans, and they have the frightened look of lost children.”

The election results that November were never really in question: With three million more people voting than in 1928, Roosevelt won by a popular count of twenty-three million to fifteen million. He carried all but six states while winning over 57 percent of the popular vote. Whether they voted due to animosity towards Hoover for his relative inactivity, or out of hope for what Roosevelt would accomplish, the American public committed themselves to a new vision. Historians identify this election as the beginning of a new Democratic coalition, bringing together African Americans, other ethnic minorities, and organized labor as a voting bloc upon whom the party would rely for many of its electoral victories over the next fifty years. Unlike some European nations where similar challenges caused democratic constitutions to crumble and give way to radical ideologies and authoritarian governments, the Roosevelt administration changed the nation’s economic fortunes with reforms, preserved the constitution, and expanded rather than limited the reach of democratic principles into the market economy. As a result, radical alternatives, such as the Fascist movement or Communist Party, remained on the margins of the nation’s political culture.

The Interregnum

After the landslide election, the country—and Hoover—had to endure the interregnum, the difficult four months between the election and President Roosevelt’s inauguration in March 1933. Congress did not pass a single significant piece of legislation during this period, although Hoover spent much of the time trying to get Roosevelt to commit publicly to a legislative agenda of Hoover’s choosing. Roosevelt remained gracious but refused to begin his administration as the incumbent’s advisor without any legal authority necessary to change policy. Unwilling to tie himself to Hoover’s legacy of failed policies, Roosevelt kept quiet when Hoover supported the passage of a national sales tax. Meanwhile, the country suffered from Hoover’s inability to further drive a legislative agenda through Congress. It was the worst winter since the beginning of the Great Depression, and the banking sector once again suffered another round of panics. While Roosevelt kept his distance from the final tremors of the Hoover administration, the country continued to suffer in wait. In part as a response to the challenges of this time, the U.S. Constitution was subsequently amended to reduce the period from election to inauguration to the now-commonplace two months.

Any ideas that Roosevelt held almost did not come to fruition, thanks to a would-be assassin’s bullet. On February 15, 1933, after delivering a speech from his open car in Miami’s Bayfront Park, local Italian bricklayer Giuseppe Zangara emerged from a crowd of well-wishers to fire six shots from his revolver. Although Roosevelt emerged from the assassination attempt unscathed, Zangara wounded five individuals that day, including Chicago Mayor Tony Cermak, who attended the speech in the hopes of resolving any long-standing differences with the president-elect. Roosevelt and his driver immediately rushed Cermak to the hospital where he died 19 days later. Roosevelt’s calm and collected response to the event reassured many Americans of his ability to lead the nation through the challenges they faced. All that awaited was Roosevelt’s inauguration before his ideas would unfold to the expectant public.

So what was Roosevelt’s plan? Before he took office, it seems likely that he was not entirely sure. Certain elements were known: He believed in positive government action to solve the Depression; he believed in federal relief, public works, social security, and unemployment insurance; he wanted to restore public confidence in banks; he wanted stronger government regulation of the economy; and he wanted to directly help farmers. But how to take action on these beliefs was more in question. A month before his inauguration, he said to his advisors, “Let’s concentrate upon one thing: Save the people and the nation, and if we have to change our minds twice every day to accomplish that end, we should do it.”

Unlike Hoover, who professed an ideology of “American individualism,” an adherence that rendered him largely incapable of widespread action, Roosevelt remained pragmatic and open-minded to possible solutions. To assist in formulating a variety of relief and recovery programs, Roosevelt turned to a group of men who had previously orchestrated his election campaign and victory. Collectively known as the “Brains Trust” (a phrase coined by a New York Times reporter to describe the multiple “brains” on Roosevelt’s advisory team), the group most notably included Rexford Tugwell, Raymond Moley, and Adolph Berle. Moley, credited with bringing the group into existence, was a government professor who advocated for a new national tax policy to help the nation recover from its economic woes. Tugwell, who eventually focused his energy on the country’s agricultural problems, saw an increased role for the federal government in setting wages and prices across the economy. Berle was a mediating influence, who often advised against a centrally controlled economy, but did see the role that the federal government could play in mediating the stark cycles of prosperity and depression that, if left unchecked, could result in the very situation in which the country presently found itself. Together, these men, along with others, advised Roosevelt through the earliest days of the New Deal and helped to craft significant legislative programs for congressional review and approval.

Inauguration Day: A New Beginning

March 4, 1933, dawned gray and rainy. Roosevelt rode in an open car along with outgoing president Hoover, facing the public, as he made his way to the U.S. Capitol. Hoover’s mood was somber, still personally angry over his defeat in the general election the previous November; he refused to crack a smile at all during the ride among the crowd, despite Roosevelt’s urging to the contrary. At the ceremony, Roosevelt rose with the aid of leg braces equipped under his specially tailored trousers and placed his hand on a Dutch family Bible as he took his solemn oath. At that very moment, the rain stopped and the sun began to shine directly on the platform, and those present would later claim that it was as though God himself was shining down on Roosevelt and the American people in that moment.

Bathed in the sunlight, Roosevelt delivered one of the most famous and oft-quoted inaugural addresses in history. He encouraged Americans to work with him to find solutions to the nation’s problems and not to be paralyzed by fear into inaction. Borrowing a wartime analogy provided by Moley, who served as his speechwriter at the time, Roosevelt called upon all Americans to assemble and fight an essential battle against the forces of economic depression. He famously stated, “The only thing we have to fear is fear itself.” Upon hearing his inaugural address, one observer in the crowd later commented, “Any man who can talk like that in times like these is worth every ounce of support a true American has.” To borrow the popular song title of the day, “happy days were here again.” Foregoing the traditional inaugural parties, the new president immediately returned to the White House to begin his work to save the nation.  (2)

The First New Deal

Much like a surgeon assessing the condition of an emergency room patient, Roosevelt began his administration with a broad, if not specific, strategy in mind: a combination of relief and recovery programs designed to first save the patient (in this case, the American people), and then to find a long-term cure (reform through federal regulation of the economy). What later became known as the “First New Deal” ushered in a wave of legislative activity seldom before seen in the history of the country. By the close of 1933, in an effort to stem the crisis, Congress had passed over fifteen significant pieces of legislation—many of the circulated bills allegedly still wet with ink from the printing presses as members voted upon them. Most bills could be grouped around issues of relief, recovery, and reform. At the outset of the First New Deal, specific goals included 1) bank reform; 2) job creation; 3) economic regulation; and 4) regional planning.

Reform: The Banking Crisis

When Roosevelt took office, he faced one of the worst moments in the country’s banking history. States were in disarray. New York and Illinois had ordered the closure of their banks in the hopes of avoiding further “bank runs,” which occurred when hundreds (if not thousands) of individuals ran to their banks to withdraw all of their savings. In all, over five thousand banks had been shuttered. Within forty-eight hours of his inauguration, Roosevelt proclaimed an official bank holiday and called Congress into a special session to address the crisis. The resulting Emergency Banking Act of 1933 was signed into law on March 9, 1933, a scant eight hours after Congress first saw it. The law officially took the country off the gold standard, a restrictive practice that, although conservative and traditionally viewed as safe, severely limited the circulation of paper money. Those who held gold were told to sell it to the U.S. Treasury for a discounted rate of a little over twenty dollars per ounce. Furthermore, dollar bills were no longer redeemable in gold. The law also gave the comptroller of currency the power to reorganize all national banks faced with insolvency, a level of federal oversight seldom seen prior to the Great Depression. Between March 11 and March 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies swept through the country, examining each bank. By March 15, 70 percent of the banks were declared solvent and allowed to reopen.

On March 12, the day before the banks were set to reopen, Roosevelt held his first “fireside chat”. In this initial radio address to the American people, he explained what the bank examiners had been doing over the previous week. He assured people that any bank open the next day had the federal government’s stamp of approval. The combination of his reassuring manner and the promise that the government was addressing the problems worked wonders in changing the popular mindset. Just as the culture of panic had contributed to the country’s downward spiral after the crash, so did this confidence-inducing move help to build it back up. Consumer confidence returned, and within weeks, close to $1 billion in cash and gold had been brought out from under mattresses and hidden bookshelves, and re-deposited in the nation’s banks. The immediate crisis had been quelled, and the public was ready to believe in their new president.

The Power of Hearth and Home

Fireside chats—Roosevelt’s weekly radio addresses—underscored Roosevelt’s savvy in understanding how best to reach people. Using simple terms and a reassuring tone, he invoked a family patriarch sitting by the fire, explaining to those who trusted him how he was working to help them. It is worth noting how he explained complex financial concepts quite simply, but at the same time, complimented the American people on their “intelligent support.” One of his fireside chats is provided below:

I recognize that the many proclamations from State capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms, should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week… The success of our whole great national program depends, of course, upon the cooperation of the public—on its intelligent support and use of a reliable system… After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail. —Franklin D. Roosevelt, March 12, 1933

A huge part of Roosevelt’s success in turning around the country can be seen in his addresses like these: He built support and galvanized the public. Ironically, Roosevelt, the man who famously said we have nothing to fear but fear itself, had a significant fear: fire. Being paralyzed with polio, he was very afraid of being left near a fireplace. But he knew the power of the hearth and home, and drew on this mental image to help the public view him the way that he hoped to be seen.

In June 1933, Roosevelt replaced the Emergency Banking Act with the more permanent Glass-Steagall Banking Act. This law prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits. This law also created the Federal Deposit Insurance Corporation, or FDIC, which insured personal bank deposits up to $2,500. Other measures designed to boost confidence in the overall economy beyond the banking system included passage of the Economy Act, which fulfilled Roosevelt’s campaign pledge to reduce government spending by reducing salaries, including his own and those of the Congress. He also signed into law the Securities Act, which required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds. Roosevelt also sought new revenue through the Beer Tax. As the Twenty-First Amendment, which would repeal the Eighteenth Amendment establishing Prohibition, moved towards ratification, this law authorized the manufacture of 3.2 percent beer and levied a tax on it.  (2)

The First Hundred Days

In his first hundred days in office, the new president pushed forward an unprecedented number of new bills, all geared towards stabilizing the economy, providing relief to individuals, creating jobs, and helping businesses. A sympathetic Democrat-controlled Congress helped propel his agenda forward.

Relief: Employment for the Masses

Even as he worked to rebuild the economy, Roosevelt recognized that the unemployed millions required jobs more quickly than the economy could provide. In a push to create new jobs, Roosevelt signed the Wagner-Peyser Act, creating the United States Employment Service, which promised states matching funds if they created local employment opportunities. He also authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA). This money went directly to states to infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed. These two bills illustrate Roosevelt’s dual purposes of providing short-term emergency help and building employment opportunities that would strengthen the economy in the long term.

Roosevelt was aware of the need for immediate help, but he mostly wanted to create more jobs. FERA overseer Harry Hopkins, who later was in charge of the Civil Works Administration (CWA), shared this sentiment. With Hopkins at its helm, the CWA, founded in early 1933, went on to put millions of men and women to work.

At its peak, there were some four million Americans repairing bridges, building roads and airports, and undertaking other public projects. Another work program was the Civilian Conservation Corps Relief Act (CCC). The CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families. They would earn thirty dollars per month planting trees, fighting forest fires, and refurbishing historic sites and parks, building an infrastructure that families would continue to enjoy for generations to come. Within the first two months, the CCC employed its first 250,000 men and eventually established about twenty-five hundred camps.

The various programs that made up the First New Deal are listed in the table below (Table 9-1).

Table 9-1: Key Programs from the First New Deal

The final element of Roosevelt’s efforts to provide relief to those in desperate straits was the Home Owners’ Refinancing Act. Created by the Home Owners’ Loan Corporation (HOLC), the program rescued homeowners from foreclosure by refinancing their mortgages. Not only did this save the homes of countless homeowners, but it also saved many of the small banks who owned the original mortgages by relieving them of the refinancing responsibility. Later New Deal legislation created the Federal Housing Authority, which eventually standardized the thirty-year mortgage and promoted the housing boom of the post-World War II era. A similar program, created through the Emergency Farm Mortgage Act and Farm Credit Act, provided the same service for farm mortgages.

Rescuing Farms and Factories

While much of the legislation of the first hundred days focused on immediate relief and job creation through federal programs, Roosevelt was committed to addressing the underlying problems inherent in the American economy. In his efforts to do so, he created two of the most significant pieces of New Deal legislation: The Agricultural Adjustment Act (AAA) and the National Industry Recovery Act (NIRA).

Farms around the country were suffering, but from different causes. In the Great Plains, drought conditions meant that little was growing at all, while in the South, bumper crops and low prices meant that farmers could not sell their goods at prices that could sustain them. The AAA offered some direct relief: Farmers received $4.5 million through relief payments. But the larger part of the program paid southern farmers to reduce their production: Wheat, cotton, corn, hogs, tobacco, rice, and milk farmers were all eligible. Passed into law on May 12, 1933, it was designed to boost prices to a level that would alleviate rural poverty and restore profitability to American agriculture. These price increases would be achieved by encouraging farmers to limit production in order to increase demand while receiving cash payments in return. Corn producers would receive thirty cents per bushel for corn they did not grow. Hog farmers would get five dollars per head for hogs not raised. The program would be financed by a tax on processing plants, passed on to consumers in the form of higher prices.

This was a bold attempt to help farmers address the systemic problems of overproduction and lower commodity prices. Despite previous efforts to regulate farming through subsidies, never before had the federal government intervened on this scale; the notion of paying farmers not to produce crops was unheard of. One significant problem, however, was that, in some cases, there was already an excess of crops, in particular, cotton and hogs, which clogged the marketplace. A bumper crop in 1933, combined with the slow implementation of the AAA, led the government to order the plowing under of ten million acres of cotton, and the butchering of six million baby pigs and 200,000 sows. Although it worked to some degree—the price of cotton increased from six to twelve cents per pound—this move was deeply problematic. Critics saw it as the ultimate example of corrupt capitalism: a government destroying food, while its citizens were starving, in order to drive up prices.

Another problem plaguing this relief effort was the disparity between large commercial farms, which received the largest payments and set the quotas, and the small family farms that felt no relief. Large farms often cut production by laying off sharecroppers or evicting tenant farmers, making the program even worse for them than for small farm owners. Their frustration led to the creation of the Southern Tenant Farmers Union (STFU), an interracial organization that sought to gain government relief for these most disenfranchised of farmers. The STFU organized, protested, and won its members some wage increases through the mid-1930s, but the overall plight of these workers remained dismal. As a result, many of them followed the thousands of Dust Bowl refugees to California.

The AAA did succeed on some fronts. By the spring of 1934, farmers had formed over four thousand local committees, with more than three million farmers agreeing to participate. They signed individual contracts agreeing to take land out of production in return for government payments, and checks began to arrive by the end of 1934. For some farmers, especially those with large farms, the program spelled relief.

While Roosevelt hoped the AAA would help farms and farmers, he also sought aid for the beleaguered manufacturing sector. The Emergency Railroad Transportation Act created a national railroad office to encourage cooperation among different railroad companies, hoping to shore up an industry essential to the stability of the manufacturing sector, but one that had been devastated by mismanagement. More importantly, the NIRA suspended antitrust laws and allowed businesses and industries to work together in order to establish codes of fair competition, including issues of price setting and minimum wages.

New Deal officials believed that allowing these collaborations would help industries stabilize prices and production levels in the face of competitive overproduction and declining profits; however, at the same time, many felt it important to protect workers from potentially unfair agreements.

A new government agency, the National Recovery Administration (NRA), was central to this plan, and mandated that businesses accept a code that included minimum wages and maximum work hours. In order to protect workers from potentially unfair agreements among factory owners, every industry had its own “code of fair practice” that included workers’ rights to organize and use collective bargaining to ensure that wages rose with prices. Headed by General Hugh S. Johnson, the NRA worked to create over five hundred different codes for different industries. The administration of such a complex plan naturally created its own problems. While codes for key industries such as automotive and steel made sense, Johnson pushed to create similar codes for dog food manufacturers, those who made shoulder pads for women’s clothing, and even burlesque shows (regulating the number of strippers in any one show).

The NIRA also created the Public Works Administration (PWA). The PWA set aside $3.3 billion to build public projects such as highways, federal buildings, and military bases. Although this program suffered from political squabbles over appropriations for projects in various congressional districts, as well as significant underfunding of public housing projects, it ultimately offered some of the most lasting benefits of the NIRA. Secretary of the Interior Harold Ickes ran the program, which completed over thirty-four thousand projects, including the Golden Gate Bridge in San Francisco and the Queens-Midtown Tunnel in New York. Between 1933 and 1939, the PWA accounted for the construction of over one-third of all new hospitals and 70 percent of all new public schools in the country.

Another challenge faced by the NRA was that the provision granting workers the right to organize appeared to others as a mandate to do so. In previously unorganized industries, such as oil and gas, rubber, and service occupations, workers now sought groups that would assist in their organization, bolstered by the encouragement they now felt from the government. The Communist Party took advantage of the opportunity to assist in the hope of creating widespread protests against the American industrial structure. The number of strikes nationwide doubled between 1932 and 1934, with over 1.5 million workers going on strike in 1934 alone, often in protests that culminated in bloodshed. A strike at the Auto-Lite plant in Toledo, Ohio, that summer resulted in ten thousand workers from other factories joining in sympathy with their fellow workers to attack potential strike-breakers with stones and bricks. Simultaneously in Minneapolis, a teamster’s strike resulted in frequent, bloody confrontations between workers and police, leading the governor to contemplate declaring martial law before the companies agreed to negotiate better wages and conditions for the workers. Finally, a San Francisco strike among 14,000 longshoremen closed the city’s waterfront and eventually led to a city-wide general strike of over 130,000 workers, essentially paralyzing the city. Clashes between workers, and police and National Guardsmen left many strikers bloodied, and at least two dead.

Although Roosevelt’s relief efforts provided jobs to many and benefitted communities with the construction of several essential building projects, the violence that erupted amid clashes between organized labor and factories backed by police and the authorities exposed a fundamental flaw in the president’s approach. Immediate relief did not address long-existing, inherent class inequities that left workers exposed to poor working conditions, low wages, long hours, and little protection. For many workers, life on the job was not much better than life as an unemployed American. Employment programs may have put men back to work and provided much needed relief, but the fundamental flaws in the system required additional attention—attention that Roosevelt was unable to pay in the early days of the New Deal. Critics were plentiful, and the president would be forced to address them in the years ahead.

Regional Planning

Regionally, Roosevelt’s work was most famously seen in the Tennessee Valley Authority (TVA), a federal agency tasked with the job of planning and developing the area through flood control, reforestation, and hydroelectric power. Employing several thousand Americans on a project that Roosevelt envisioned as a template for future regional redevelopment, the TVA revitalized a river valley that landowners had badly over-farmed, leaving behind eroded soil that lacked essential nutrients for future farming. Under the direction of David Lilienthal, beginning in 1933, the TVA workers erected a series of dams to harness the Tennessee River in the creation of much-needed hydroelectric power. The arrival of both electric lighting and machinery to the region eased the lives of the people who lived there, as well as encouraged industrial growth. The TVA also included an educational component, teaching farmers important lessons about crop rotation, soil replenishment, fertilizing, and reforestation.

The TVA was not without its critics, however, most notably among the fifteen thousand families who were displaced due to the massive construction projects. Although eventually the project benefited farmers with the introduction of new farming and fertilizing techniques, as well as the added benefit of electric power, many local citizens were initially mistrustful of the TVA and the federal government’s agenda. Likewise, as with several other New Deal programs, women did not directly benefit from these employment opportunities, as they were explicitly excluded for the benefit of men who most Americans still considered the family’s primary breadwinner. However, with the arrival of electricity came new industrial ventures, including several textile mills up and down the valley, several of which offered employment to women. Throughout his presidency, Roosevelt frequently pointed to the TVA as one of the glowing accomplishments of the New Deal and its ability to bring together the machinery of the federal government along with private interests to revitalize a regional economy. Just months before his death in 1945, he continued to speak of the possibility of creating other regional authorities throughout the country.  (2)

Assessing the First New Deal

While many were pleased with the president’s bold plans, there were numerous critics of the New Deal, discussed in the following section. The New Deal was far from perfect, but Roosevelt’s quickly implemented policies reversed the economy’s long slide. It put new capital into ailing banks. It rescued homeowners and farmers from foreclosure and helped people keep their homes. It offered some direct relief to the unemployed poor. It gave new incentives to farmers and industry alike, and put people back to work in an effort to both create jobs and boost consumer spending. The total number of working Americans rose from twenty-four to twenty-seven million between 1933 and 1935, in contrast to the seven-million-worker decline during the Hoover administration. Perhaps most importantly, the First New Deal changed the pervasive pessimism that had held the country in its grip since the end of 1929. For the first time in years, people had hope.

It was the hard work of Roosevelt’s advisors—the “Brains Trust” of scholars and thinkers from leading universities—as well as Congress and the American public who helped the New Deal succeed as well as it did. Ironically, it was the American people’s volunteer spirit, so extolled by Hoover, that Roosevelt was able to harness. The first hundred days of his administration was not a master plan that Roosevelt dreamed up and executed on his own. In fact, it was not a master plan at all, but rather a series of, at times, disjointed efforts made from different assumptions. But after taking office and analyzing the crisis, Roosevelt and his advisors did feel that they had a larger sense of what had caused the Great Depression and thus attempted a variety of solutions to fix it. They believed that it was caused by abuses on the part of a small group of bankers and businessmen, aided by Republican policies that built wealth for a few at the expense of many. The answer, they felt, was to root out these abuses through banking reform, as well as adjust production and consumption of both farm and industrial goods. This adjustment would come about by increasing the purchasing power of everyday people, as well as through regulatory policies like the NRA and AAA. While it may seem counterintuitive to raise crop prices and set prices on industrial goods, Roosevelt’s advisors sought to halt the deflationary spiral and economic uncertainty that had prevented businesses from committing to investments and consumers from parting with their money.  (2)

U.S. History II: 1877 to Present Copyright © by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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National Archives at Seattle

• The Great Depression and the New Deal

Picturing the Century

• Introduction
• A New Century
• The Great War and the New Era
• A World in Flames
• Post-War America
• Century's End

As the Great Depression ended the prosperity of the 1920s, the Pacific Northwest suffered economic catastrophe like the rest of the country. Businesses and banks failed and by 1933 only about half as many people were working as had been in 1926. The population in the Pacific Northwest continued to grow but more slowly, as many left the Dust Bowl states of the Midwest and Plains.

President Franklin D. Roosevelt's "New Deal" aimed at promoting economic recovery and putting Americans back to work through Federal activism. New Federal agencies attempted to control agricultural production, stabilize wages and prices, and create a vast public works program for the unemployed. The West saw the heavy use of Works Progress Administration and Civilian Conservation Corps workers in National Forests and National Parks, and on Indian reservations for work on natural resource related projects and a legacy of buildings, roads, bridges, and trails remains in the Pacific Northwest as a result of these many projects.

Built in the 1930s and 1940s, Bonneville and Grand Coulee Dams brought electricity to rural areas that were not served by existing utilities. The economy of the Pacific Northwest was strengthened as manufacturing opportunities grew.

Many New Deal-era government agencies sponsored photography projects. Additionally, many agencies were tasked with verbally and photographically documenting projects they undertook. For the most part, these projects used a "documentary" approach that emphasized straightforward scenes of everyday life or the environment. Found attached to the written reports submitted by the various agencies, the images from these projects make for a detailed portrait of America during the 1930s and early 1940s.

Top 10 New Deal Programs of the 1930s

FPG / Archive Photos / Getty Images

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The New Deal was a sweeping package of public works projects, federal regulations , and financial system reforms enacted by the United States federal government in an effort to help the nation survive and recover from the Great Depression of the 1930s. The New Deal programs created jobs and provided financial support for the unemployed, the young, and the elderly, and added safeguards and constraints to the banking industry and monetary system.

Purposes of the New Deal Programs

Mostly enacted during the first term of President Franklin D. Roosevelt  between 1933 and 1938, the New Deal was implemented through legislation enacted by Congress and presidential executive orders . The programs addressed what historians call the “3 Rs” of dealing with the depression, Relief, Recovery, and Reform— relief for the poor and jobless, recovery of the economy, and reform of the nation’s financial system to safeguard against future depressions.

The Great Depression, which lasted from 1929 to 1939, was the largest and most significant economic depression to affect both the United States and all Western countries. The stock market crash on Oct. 29, 1929, is infamously known as Black Tuesday, when stocks fell 13.5%. The next day's drop of 11.7% and a total decline of 55% between 1929 and 1933 made it the worst stock market decline in the history of the United States. Heavy speculation during the rising economy of the 1920s combined with widespread buying on margin (borrowing a large percentage of the cost of investment) were factors in the crash. It marked the beginning of the Great Depression.

To Act or Not to Act

Herbert Hoover was the sitting U.S. president when the stock market crash occurred in 1929, but he felt that the government should not take stringent action to deal with heavy losses by investors and the subsequent effects that rippled throughout the economy.

Franklin D. Roosevelt was elected in 1932, and he had other ideas. He worked to create numerous federal programs through his New Deal to help those who were suffering the most from the Depression. Besides programs built to directly help those affected by the Great Depression, the New Deal included legislation intended to correct the situations that led to the stock market crash of 1929. Two prominent actions were the Glass-Steagall Act of 1933, which created the Federal Deposit Insurance Corporation (FDIC), and the creation of the Securities and Exchange Commission (SEC) in 1934 to be a watchdog over the stock market and police dishonest practices. The following are the top 10 programs of the New Deal.

Civilian Conservation Corps (CCC)

The Civilian Conservation Corps was created in 1933 by FDR to combat unemployment. This work relief program had the desired effect, providing jobs for many thousands of Americans during the Great Depression. The CCC was responsible for building many public works projects and created structures and trails in parks across the nation that are still in use today.

Civil Works Administration (CWA)

New York Times Co. / Hulton Archive / Getty Images

The Civil Works Administration was also formed in 1933 to create jobs for the unemployed. Its focus on high-paying jobs in the construction sector resulted in a much greater expense to the federal government than originally anticipated. The CWA ended in 1934 in large part because of opposition to its cost.

Federal Housing Administration (FHA)

Federal Housing Administration / Library of Congress / Corbis / VCG via Getty Images

The Federal Housing Administration is a government agency that FDR established in 1934 to combat the housing crisis of the Great Depression. A large number of unemployed workers combined with the banking crisis resulted in a situation in which banks recalled loans and people lost their houses. The FHA was designed to regulate mortgages and housing conditions; today, it still plays a major role in the financing of houses for Americans.

Federal Security Agency (FSA)

Photo by Roger Smith / PhotoQuest / Getty Images

The Federal Security Agency, established in 1939, was responsible for oversight of several important government entities. Until it was abolished in 1953, it oversaw Social Security, federal education funding, and the Food and Drug Administration, which was created in 1938 with the Food, Drug and Cosmetic Act.

Home Owners' Loan Corporation (HOLC)

The Home Owners' Loan Corporation was created in 1933 to assist in the refinancing of homes. The housing crisis created a great many foreclosures, and FDR hoped this new agency would stem the tide. In fact, between 1933 and 1935, 1 million people received long-term, low-interest loans through the agency, which saved their homes from foreclosure.

National Industrial Recovery Act (NIRA)

Harris & Ewing Collection / Library of Congress

The National Industrial Recovery Act was designed to bring together the interests of working-class Americans and businesses. Through hearings and government intervention, the hope was to balance the needs of all involved in the economy. However, the NIRA was declared unconstitutional in the landmark Supreme Court case Schechter Poultry Corp. v. the United State. The court ruled that the NIRA violated the separation of powers .

Public Works Administration (PWA)

The Public Works Administration was a program created to provide economic stimulus and jobs during the Great Depression. The PWA was designed to create public works projects and continued until the U.S. ramped up wartime production for ​ World War II . It ended in 1941.

Social Security Act (SSA)

The Social Security Act of 1935 was designed to combat widespread poverty among senior citizens and to aid the disabled. The government program, one of the few parts of the New Deal still in existence, provides income to retired wage earners and the disabled who have paid into the program throughout their working lives via a payroll deduction. The program has become one of the most popular government programs ever and is funded by current wage earners and their employers. The Social Security Act evolved from the Townsend Plan, an effort to establish government-funded pensions for the elderly led by Dr. Francis Townsend .

Tennessee Valley Authority (TVA)

The Tennessee Valley Authority was established in 1933 to develop the economy in the Tennessee Valley region, which had been hit extremely hard by the Great Depression. The TVA was and is a federally owned corporation that still works in this region. It is the largest public provider of electricity in the United States.

Works Progress Administration (WPA)

The Works Progress Administration was created in 1935. As the largest New Deal agency , the WPA affected millions of Americans and provided jobs across the nation. Because of it, numerous roads, buildings, and other projects were built. It was renamed the Works Projects Administration in 1939, and it officially ended in 1943.

Updated by Robert Longley

Sources and Further Information

• Barro, Robert J. and José F. Ursúa. " Stock-Market Crashes and Depressions ." Research in Economics , vol. 71, no. 3, 2017, pp. 384-398, doi:10.1016/j.rie.2017.04.001.
• Fishback, Price V. " New Deal ." Banking Crises: Perspectives from the New Palgrave Dictionary , edited by Garett Jones, Palgrave Macmillan UK, 2016, pp. 241-250, doi:10.1057/9781137553799_26.
• Mitchell, Broadus. "The Depression Decade: From New Era through New Deal, 1929-1941." vol. 9, Routledge, 2015. The Economic History of the United States.
• Siokis, Fotios M. " Stock Market Dynamics: Before and after Stock Market Crashes ." Physica A: Statistical Mechanics and its Applications , vol. 391, no. 4, 2012, pp. 1315-1322, doi:10.1016/j.physa.2011.08.068.
• Skocpol, Theda and Kenneth Finegold. " State Capacity and Economic Intervention in the Early New Deal ." Political Science Quarterly , vol. 97, no. 2, 1982, pp. 255-278, JSTOR, doi:10.2307/2149478.
• Tridico, Pasquale. " Financial Crisis and Global Imbalances: Its Labour Market Origins and the Aftermath ." Cambridge Journal of Economics , vol. 36, no. 1, 2012, pp. 17-42, doi:10.1093/cje/ber031.
• 7 New Deal Programs Still in Effect Today
• A Short History of the Great Depression
• Top 5 Causes of the Great Depression
• Great Depression Pictures
• What Caused the Great Depression?
• History of Government Involvement in the American Economy
• Reconstruction Finance Corporation: Definition and Legacy
• What Is Fiscal Policy? Definition and Examples
• The Great Depression, World War II, and the 1930s
• The Story of the Great Depression in Photos
• How the Great Depression Altered US Foreign Policy
• A Brief Look at the U.S. Department of Labor
• Dr. Francis Townsend, Old Age Public Pension Organizer
• Hoovervilles: Homeless Camps of the Great Depression
• The 1930s: Women’s Shifting Rights and Roles in United States
• The History of Redlining

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The Great Depression and New Deal: A Very Short Introduction

Professor of History

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The Great Depression and the New Deal: A Very Short Introduction explores the roots, events, and legacy of the Great Depression and Roosevelt's New Deal. America's post-war laissez-faire economic policies resulted in an economic upheaval of unprecedented severity, to which President Roosevelt responded with a vigorous (and sometimes unconstitutional) set of Depression-fighting economic measures, which were only justifiable in the face of such a global economic disaster. Key New Deal programmes are examined, such as the National Recovery Agency, Public Works Administration, and Social Security, revealing why some worked and others did not.

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Chapter 26: Franklin Roosevelt and the New Deal 1932-1941

The First New Deal

Learning objectives.

By the end of this section, you should be able to:

• Identify the key pieces of legislation included in Roosevelt’s “First New Deal”
• Assess the strengths, weaknesses, and general effectiveness of the First New Deal
• Explain Roosevelt’s overall vision for addressing the structural problems in the U.S. economy

Much like a surgeon assessing the condition of an emergency room patient, Roosevelt began his administration with a broad, if not specific, strategy in mind: a combination of relief and recovery programs designed to first save the patient (in this case, the American people), and then to find a long-term cure (reform through federal regulation of the economy). What later became known as the “First New Deal” ushered in a wave of legislative activity seldom before seen in the history of the country. By the close of 1933, in an effort to stem the crisis, Congress had passed over fifteen significant pieces of legislation–many of the circulated bills allegedly still wet with ink from the printing presses as members voted upon them. Most bills could be grouped around issues of relief, recovery, and reform. At the outset of the First New Deal, specific goals included 1) bank reform; 2) job creation; 3) economic regulation; and 4) regional planning.

REFORM: THE BANKING CRISIS

When Roosevelt took office, he faced one of the worst moments in the country’s banking-history. States were in disarray. New York and Illinois had ordered the closure of their banks in the hopes of avoiding further “bank runs,” which occurred when hundreds (if not thousands) of individuals ran to their banks to withdraw all of their savings. In all, over five thousand banks had been shuttered. Within forty-eight hours of his inauguration, Roosevelt proclaimed an official bank holiday and called Congress into a special session to address the crisis. The resulting Emergency Banking Act of 1933 was signed into law on March 9, 1933, a scant eight hours after Congress first saw it. The law officially took the country off the gold standard, a restrictive practice that, although conservative and traditionally viewed as safe, severely limited the circulation of paper money. Those who held gold were told to sell it to the U.S. Treasury for a discounted rate of a little over twenty dollars per ounce. Furthermore, dollar bills were no longer redeemable in gold. The law also gave the comptroller of currency the power to reorganize all national banks faced with insolvency, a level of federal oversight seldom seen prior to the Great Depression. Between March 11 and March 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies swept through the country, examining each bank. By March 15, 70 percent of the banks were declared solvent and allowed to reopen.

On March 12, the day before the banks were set to reopen, Roosevelt held his first “fireside chat” (Figure 26.5). In this initial radio address to the American people, he explained what the bank examiners had been doing over the previous week. He assured people that any bank open the next day had the federal government’s stamp of approval. The combination of his reassuring manner and the promise that the government was addressing the problems worked wonders in changing the popular mindset. Just as the culture of panic had contributed to the country’s downward spiral after the crash, so did this confidence-inducing move help to build it back up. Consumer confidence returned, and within weeks, close to $1 billion in cash and gold had been brought out from under mattresses and hidden bookshelves, and re-deposited in the nation’s banks. The immediate crisis had been quelled, and the public was ready to believe in their new president.

The Power of Hearth and Home

Fireside chats–Roosevelt’s weekly radio addresses–underscored Roosevelt’s savvy in understanding how best to reach people. Using simple terms and a reassuring tone, he invoked a family patriarch sitting by the fire, explaining to those who trusted him how he was working to help them. It is worth noting how he explained complex financial concepts quite simply, but at the same time, complimented the American people on their “intelligent support.” One of his fireside chats is provided below:

I recognize that the many proclamations from State capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms, should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week….

The success of our whole great national program depends, of course, upon the cooperation of the public–on its intelligent support and use of a reliable system…. After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail. –Franklin D. Roosevelt, March 12, 1933

A huge part of Roosevelt’s success in turning around the country can be seen in his addresses like these: He built support and galvanized the public. Ironically, Roosevelt, the man who famously said we have nothing to fear but fear itself, had a significant fear: fire. Being paralyzed with polio, he was very afraid of being left near a fireplace. But he knew the power of the hearth and home, and drew on this mental image to help the public view him the way that he hoped to be seen.

Click and Explore

Visit the American Presidency Project to listen to one of Roosevelt’s fireside chats. What kind of feeling does his language and demeanor evoke?

In June 1933, Roosevelt replaced the Emergency Banking Act with the more permanent Glass-Steagall Banking Act. This law prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits. This law also created the Federal Deposit Insurance Corporation, or FDIC, which insured personal bank deposits up to $2,500. Other measures designed to boost confidence in the overall economy beyond the banking system included passage of the Economy Act, which fulfilled Roosevelt’s campaign pledge to reduce government spending by reducing salaries, including his own and those of the Congress. He also signed into law the Securities Act, which required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds. Roosevelt also sought new revenue through the Beer Tax. As the Twenty-First Amendment, which would repeal the Eighteenth Amendment establishing Prohibition, moved towards ratification, this law authorized the manufacture of 3.2 percent beer and levied a tax on it.

THE FIRST HUNDRED DAYS

In his first hundred days in office, the new president pushed forward an unprecedented number of new bills, all geared towards stabilizing the economy, providing relief to individuals, creating jobs, and helping businesses. A sympathetic Democrat-controlled Congress helped propel his agenda forward.

Relief: Employment for the Masses

Even as he worked to rebuild the economy, Roosevelt recognized that the unemployed millions required jobs more quickly than the economy could provide. In a push to create new jobs, Roosevelt signed the Wagner-Peyser Act, creating the United States Employment Service, which promised states matching funds if they created local employment opportunities. He also authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA). This money went directly to states to infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed. These two bills illustrate Roosevelt’s dual purposes of providing short-term emergency help and building employment opportunities that would strengthen the economy in the long term.

Roosevelt was aware of the need for immediate help, but he mostly wanted to create more jobs. FERA overseer Harry Hopkins, who later was in charge of the Civil Works Administration (CWA), shared this sentiment. With Hopkins at its helm, the CWA, founded in early 1933, went on to put millions of men and women to work. At its peak, there were some four million Americans repairing bridges, building roads and airports, and undertaking other public projects. Another work program was the Civilian Conservation Corps Relief Act (CCC). The CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families. They would earn thirty dollars per month planting trees, fighting forest fires, and refurbishing historic sites and parks, building an infrastructure that families would continue to enjoy for generations to come. Within the first two months, the CCC employed its first 250,000 men and eventually established about twenty-five hundred camps (Figure 26.6).

The various programs that made up the First New Deal are listed in the table below (Table 26.1).

The final element of Roosevelt’s efforts to provide relief to those in desperate straits was the Home Owners’ Refinancing Act. Created by the Home Owners’ Loan Corporation (HOLC), the program rescued homeowners from foreclosure by refinancing their mortgages. Not only did this save the homes of countless homeowners, but it also saved many of the small banks who owned the original mortgages by relieving them of that responsibility. Later New Deal legislation created the Federal Housing Authority, which eventually standardized the thirty-year mortgage and promoted the housing boom of the post-World War II era. A similar program, created through the Emergency Farm Mortgage Act and Farm Credit Act, provided the same service for farm mortgages.

Rescuing Farms and Factories

While much of the legislation of the first hundred days focused on immediate relief and job creation through federal programs, Roosevelt was committed to addressing the underlying problems inherent in the American economy. In his efforts to do so, he created two of the most significant pieces of New Deal legislation: the Agricultural Adjustment Act (AAA) and the National Industry Recovery Act (NIRA).

Farms around the country were suffering, but from different causes. In the Great Plains, drought conditions meant that little was growing at all, while in the South, bumper crops and low prices meant that farmers could not sell their goods at prices that could sustain them. The AAA offered some direct relief: Farmers received $4.5 million through relief payments. But the larger part of the program paid southern farmers to reduce their production: Wheat, cotton, corn, hogs, tobacco, rice, and milk farmers were all eligible. Passed into law on May 12, 1933, it was designed to boost prices to a level that would alleviate rural poverty and restore profitability to American agriculture. These price increases would be achieved by encouraging farmers to limit production in order to increase demand while receiving cash payments in return. Corn producers would receive thirty cents per bushel for corn they did not grow. Hog farmers would get five dollars per head for hogs not raised. The program would be financed by a tax on processing plants, passed on to consumers in the form of higher prices.

This was a bold attempt to help farmers address the systemic problems of overproduction and lower commodity prices. Despite previous efforts to regulate farming through subsidies, never before had the federal government intervened on this scale; the notion of paying farmers not to produce crops was unheard of. One significant problem, however, was that, in some cases, there was already an excess of crops, in particular, cotton and hogs, which clogged the marketplace. A bumper crop in 1933, combined with the slow implementation of the AAA, led the government to order the plowing under of ten million acres of cotton, and the butchering of six million baby pigs and 200,000 sows. Although it worked to some degree–the price of cotton increased from six to twelve cents per pound–this move was deeply problematic. Critics saw it as the ultimate example of corrupt capitalism: a government destroying food, while its citizens were starving, in order to drive up prices.

Another problem plaguing this relief effort was the disparity between large commercial farms, which received the largest payments and set the quotas, and the small family farms that felt no relief. Large farms often cut production by laying off sharecroppers or evicting tenant farmers, making the program even worse for them than for small farm owners. Their frustration led to the creation of the Southern Tenant Farmers Union (STFU), an interracial organization that sought to gain government relief for these most disenfranchised of farmers. The STFU organized, protested, and won its members some wage increases through the mid-1930s, but the overall plight of these workers remained dismal. As a result, many of them followed the thousands of Dust Bowl refugees to California (Figure 26.7).

Labor Songs and the Southern Tenant Farmers Union

And if the growers get in the way, we’re gonna roll right over them We’re gonna roll right over them, we’re gonna roll right over them And if the growers get in the way, we’re gonna roll right over them We’re gonna roll this union on –John Handcox, “Roll the Union On”

“Mean Things Happening in This Land,” “Roll the Union On,” and “Strike in Arkansas” are just a few of the folk songs written by John Handcox. A union organizer and STFU member, Handcox became the voice of the worker’s struggle, writing dozens of songs that have continued to be sung by labor activists and folk singers over the years. Handcox joined the STFU in 1935, and used his songs to rally others, stating, “I found out singing was more inspiring than talking … to get the attention of the people.”

Racially integrated and with active women members, the STFU was ahead of its time. Although criticized by other union leaders for its relationship with the Communist Party in creating the “Popular Front” for labor activism in 1934, the STFU succeeded in organizing strikes and bringing national attention to the issues that tenant farmers faced. While the programs Roosevelt put in place did not do enough to help these farmers, the STFU–and Handcox’s music–remains a relevant part of the country’s labor movement.

The AAA did succeed on some fronts. By the spring of 1934, farmers had formed over four thousand local committees, with more than three million farmers agreeing to participate. They signed individual contracts agreeing to take land out of production in return for government payments, and checks began to arrive by the end of 1934. For some farmers, especially those with large farms, the program spelled relief.

While Roosevelt hoped the AAA would help farms and farmers, he also sought aid for the beleaguered manufacturing sector. The Emergency Railroad Transportation Act created a national railroad office to encourage cooperation among different railroad companies, hoping to shore up an industry essential to the stability of the manufacturing sector, but one that had been devastated by mismanagement. More importantly, the NIRA suspended antitrust laws and allowed businesses and industries to work together in order to establish codes of fair competition, including issues of price setting and minimum wages. New Deal officials believed that allowing these collaborations would help industries stabilize prices and production levels in the face of competitive overproduction and declining profits; however, at the same time, many felt it important to protect workers from potentially unfair agreements.

A new government agency, the National Recovery Administration (NRA), was central to this plan, and mandated that businesses accept a code that included minimum wages and maximum work hours. In order to protect workers from potentially unfair agreements among factory owners, every industry had its own “code of fair practice” that included workers’ rights to organize and use collective bargaining to ensure that wages rose with prices (Figure 26.8). Headed by General Hugh S. Johnson, the NRA worked to create over five hundred different codes for different industries. The administration of such a complex plan naturally created its own problems. While codes for key industries such as automotive and steel made sense, Johnson pushed to create similar codes for dog food manufacturers, those who made shoulder pads for women’s clothing, and even burlesque shows (regulating the number of strippers in any one show).

The NIRA also created the Public Works Administration (PWA). The PWA set aside $3.3 billion to build public projects such as highways, federal buildings, and military bases. Although this program suffered from political squabbles over appropriations for projects in various congressional districts, as well as significant underfunding of public housing projects, it ultimately offered some of the most lasting benefits of the NIRA. Secretary of the Interior Harold Ickes ran the program, which completed over thirty-four thousand projects, including the Golden Gate Bridge in San Francisco and the Queens-Midtown Tunnel in New York. Between 1933 and 1939, the PWA accounted for the construction of over one-third of all new hospitals and 70 percent of all new public schools in the country.

Figure 26.8 Consumers were encouraged to buy from companies displaying the Blue Eagle (a), the logo signifying compliance with the new NRA regulations. With talons gripping a gear, representing industry, and lightning bolts, representing power, the eagle (b) was intended to be a symbol of economic recovery.] Another challenge faced by the NRA was that the provision granting workers the right to organize appeared to others as a mandate to do so. In previously unorganized industries, such as oil and gas, rubber, and service occupations, workers now sought groups that would assist in their organization, bolstered by the encouragement they now felt from the government. The Communist Party took advantage of the opportunity to assist in the hope of creating widespread protests against the American industrial structure. The number of strikes nationwide doubled between 1932 and 1934, with over 1.5 million workers going on strike in 1934 alone, often in protests that culminated in bloodshed. A strike at the Auto-Lite plant in Toledo, Ohio, that summer resulted in ten thousand workers from other factories joining in sympathy with their fellow workers to attack potential strike-breakers with stones and bricks. Simultaneously in Minneapolis, a teamsters strike resulted in frequent, bloody confrontations between workers and police, leading the governor to contemplate declaring martial law before the companies agreed to negotiate better wages and conditions for the workers. Finally, a San Francisco strike among 14,000 longshoremen closed the city’s waterfront and eventually led to a city-wide general strike of over 130,000 workers, essentially paralyzing the city. Clashes between workers, and police and National Guardsmen left many strikers bloodied, and at least two dead.

Although Roosevelt’s relief efforts provided jobs to many and benefitted communities with the construction of several essential building projects, the violence that erupted amid clashes between organized labor and factories backed by police and the authorities exposed a fundamental flaw in the president’s approach. Immediate relief did not address long-existing, inherent class inequities that left workers exposed to poor working conditions, low wages, long hours, and little protection. For many workers, life on the job was not much better than life as an unemployed American. Employment programs may have put men back to work and provided much needed relief, but the fundamental flaws in the system required additional attention–attention that Roosevelt was unable to pay in the early days of the New Deal. Critics were plentiful, and the president would be forced to address them in the years ahead.

Regional Planning

Regionally, Roosevelt’s work was most famously seen in the Tennessee Valley Authority (TVA) (Figure 26.9), a federal agency tasked with the job of planning and developing the area through flood control, reforestation, and hydroelectric power. Employing several thousand Americans on a project that Roosevelt envisioned as a template for future regional redevelopment, the TVA revitalized a river valley that landowners had badly over-farmed, leaving behind eroded soil that lacked essential nutrients for future farming. Under the direction of David Lilienthal, beginning in 1933, the TVA workers erected a series of dams to harness the Tennessee River in the creation of much-needed hydroelectric power. The arrival of both electric lighting and machinery to the region eased the lives of the people who lived there, as well as encouraged industrial growth. The TVA also included an educational component, teaching farmers important lessons about crop rotation, soil replenishment, fertilizing, and reforestation.

The TVA was not without its critics, however, most notably among the fifteen thousand families who were displaced due to the massive construction projects. Although eventually the project benefited farmers with the introduction of new farming and fertilizing techniques, as well as the added benefit of electric power, many local citizens were initially mistrustful of the TVA and the federal government’s agenda. Likewise, as with several other New Deal programs, women did not directly benefit from these employment opportunities, as they were explicitly excluded for the benefit of men who most Americans still considered the family’s primary breadwinner. However, with the arrival of electricity came new industrial ventures, including several textile mills up and down the valley, several of which offered employment to women. Throughout his presidency, Roosevelt frequently pointed to the TVA as one of the glowing accomplishments of the New Deal and its ability to bring together the machinery of the federal government along with private interests to revitalize a regional economy. Just months before his death in 1945, he continued to speak of the possibility of creating other regional authorities throughout the country.

ASSESSING THE FIRST NEW DEAL

While many were pleased with the president’s bold plans, there were numerous critics of the New Deal, discussed in the following section. The New Deal was far from perfect, but Roosevelt’s quickly implemented policies reversed the economy’s long slide. It put new capital into ailing banks. It rescued homeowners and farmers from foreclosure and helped people keep their homes. It offered some direct relief to the unemployed poor. It gave new incentives to farmers and industry alike, and put people back to work in an effort to both create jobs and boost consumer spending. The total number of working Americans rose from twenty-four to twenty-seven million between 1933 and 1935, in contrast to the seven-million-worker decline during the Hoover administration. Perhaps most importantly, the First New Deal changed the pervasive pessimism that had held the country in its grip since the end of 1929. For the first time in years, people had hope.

It was the hard work of Roosevelt’s advisors–the “Brains Trust” of scholars and thinkers from leading universities–as well as Congress and the American public who helped the New Deal succeed as well as it did. Ironically, it was the American people’s volunteer spirit, so extolled by Hoover, that Roosevelt was able to harness. The first hundred days of his administration was not a master plan that Roosevelt dreamed up and executed on his own. In fact, it was not a master plan at all, but rather a series of, at times, disjointed efforts made from different assumptions. But after taking office and analyzing the crisis, Roosevelt and his advisors did feel that they had a larger sense of what had caused the Great Depression and thus attempted a variety of solutions to fix it. They believed that it was caused by abuses on the part of a small group of bankers and businessmen, aided by Republican policies that built wealth for a few at the expense of many. The answer, they felt, was to root out these abuses through banking reform, as well as adjust production and consumption of both farm and industrial goods. This adjustment would come about by increasing the purchasing power of everyday people, as well as through regulatory policies like the NRA and AAA. While it may seem counterintuitive to raise crop prices and set prices on industrial goods, Roosevelt’s advisors sought to halt the deflationary spiral and economic uncertainty that had prevented businesses from committing to investments and consumers from parting with their money.

U.S. History Copyright © 2014 by OpenStax is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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History Grade 11 - Topic 2 Essay Questions

Essay Question:

To what extent did Roosevelt’s New Deal succeed in mitigating the negative effects of the Great Depression in USA in the 1930’s?  Present an argument in support of your answer using relevant historical evidence. [1]

Introduction:

On 29 October 1929 (also known as “Black Tuesday”), the United States (US) stock market crashed which initiated the Great Depression. [2]   After winning the US elections and taking office in 1933, President Franklin D. Roosevelt sought to bring economic relief to the US during the 1930’s by implementing a series of reforms and restructures in what he called the ‘New Deal’. [3]   Although the ‘New Deal’ succeeded somewhat in relieving economic situations on a macro-level, the “New Deal”, in the long run, is considered a failure as it did not ultimately succeed in what it was set out to do, which was to recover the economy from its “depressed state”. [4]   This statement will be discussed by analyzing the two phases of the “New Deal”, as well as discussing the effects of some of the relief, recovery and reform programs implemented.

The First Hundred Days

When analyzing the legacy of the “New Deal”, it is important to understand that there were two phases of the deal, namely the “First New Deal” and the “Second New Deal”.  The First New Deal consisted mainly of the first three months of Roosevelt’s presidency and is referred to as the “hundred days”. [5]   Within the first hundred days, various relief programs such as the “Federal Emergency Relief Administration” (FRA), the “Civilian Conservation Corps” and the “Agricultural Adjustment Act” were implemented in order to create employment opportunities for Americans as well as providing some extent of economic relief for struggling citizens. [6]

Another significant program that was implemented during the hundred days, was the “National Industrial Recovery Act” (NIRA).  This recovery act allowed working Americans to unionize and in a sense bargain for better working conditions, as well as wages. [7]   Roosevelt felt that a significant part of the recovery process will come from decreasing competition through using set prices, wages and commodities. [8]   Mixed reviews came from the implementation of these recovery acts, as many felt that corporate heads were being disadvantaged by the state, and in some instance some corporations felt as though their competition became the US government itself. [9]   However, on the larger part, many felt that the hundred days and the “First New Deal” was relatively successful as it was marked by a decrease in unemployment and the stabilization of US banks.

The Second New Deal

In 1935, Roosevelt decided that the New Deal should take a more aggressive approach in the attempt to diminish the Great Depression. [10]   This phase is known as the Second New Deal.  One of the more prominent acts implemented was the “Social Security” Act which provided the elderly and widowed people with some financial support, allowed some unemployment and disability compensation and set a framework or minimum wages and maximum work hours. [11]   Furthermore, the “Works Progress Administration” (WPA) was implemented to provide the unemployed with opportunities in the public sector.  These opportunities included building bridges, schools and roads. [12]   To some extent, the Great Deal built a platform for more financial security and opportunity for the American citizens during the onslaught of the Great Depression with its housing, employment and financial interventions. [13]

Criticism of the New Deal

When analyzing some of the programs and acts implemented by the Great Deal, one also has to mention points of criticism.  One of the more popular points of criticism stems from the “interventionalist” and anti-competitive nature of the New Deal. [14]   Larger companies and the Supreme Court also felt that some of the reform initiatives were unconstitutional and did not go through the right channels to implement reform acts. [15]   However, with this criticism in mind, the main reason why the New Deal was deemed unsuccessful, is simply because it did not achieve what it set out to do.  The American economy and employment rates did not recover enough for the New Deal to have remedied the effects of the Great Depression.  Rather, American entrance into the Second World War stimulated more economic growth than the New Deal. [16]

Therefore, one could say that the New Deal mitigated the effects of the Great Depression to an extent where it improved the employment rate from 25% of 1933 to 17% in 1939. [17]   One could also say that some of the relief and reform acts were deemed successful as some of them, such as the Social Security Act, still remains today. [18]   The New Deal also led to a, albeit short-lived, coalition between “white working people, African Americans and left-wing intellectuals”. [19]   Many also argue that the New Deal built a surface for the future economy of America post-World War Two. [20]   However, with regards to the mitigation of the Great Depression itself, the New Deal ultimately did not succeed in ending the Great Depression and its effects.

This content was originally produced for the SAHO classroom by Sebastian Moronell, Ayabulela Ntwakumba, Simone van der Colff & Thandile Xesi.

[1] National Senior Certificate.: “Grade 11 November 2017 History Paper 1 Exam,” National Senior Certificate, November 2017.

[2] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[3] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[4] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[5] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[6] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[7] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[8] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[9] J. Green.: “The New Deal:  crash Course US History #34,” Crash Course [YouTube Online].  Accessed on 23 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=380s ).

[10] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[11] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[12] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[13] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, pp. 265-267.

[14] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[15] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[16] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[17] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[18] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[19] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[20] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, p. 267.

• Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online], January 2021.  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).
• Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ). 
• Green, J.: “The New Deal:  Crash Course US History #34,” Crash Course [online].  Accessed on 24 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=391s ).
• History.  Editors of History.: “New Deal,” History [online], November 2021.  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).
• Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online], January 2021.  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).
• Kennedy, D.M.: “What the New Deal Did,” Political Science Quarterly, (124),(2), 2009, pp. 251-268.

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McDonald’s Game-Changing $5 Meal Deal Revolutionizes Fast-Food Value Landscape

I n an era where every dollar counts, McDonald’s is setting a new benchmark for value with its planned introduction of a $5 meal deal. This strategic move is designed to attract a broader consumer base by offering a substantial meal at an affordable price. As economic challenges mount, the fast-food giant aims to maintain its competitive edge by adapting its offerings to meet the changing needs of its customers.

A Closer Look at McDonald’s $5 Value Meal

McDonald’s, a long-standing icon in the fast-food industry, is in the process of rolling out a value meal aimed at providing cost-effective dining options to its customers across the United States. This new offering includes a choice between a McChicken or McDouble, accompanied by a four-piece serving of chicken nuggets, fries, and a drink—all for just $5.

The introduction of this meal option comes at a critical time when low-income consumers are notably reducing their expenditures, particularly within the fast-food sector. This trend has been underscored by an increase in mentions of low-income demographics during company earnings calls, reaching the highest levels in nearly two years, a statistic highlighted by Bank of America.

Economic Insights and Consumer Behavior

The push towards more affordable meal options is not just a response to consumer demand but a strategic move observed across the industry. From Wendy’s to Dave and Buster’s, major players in the quick-service restaurant (QSR) industry are witnessing a tightening of consumer spending. McDonald’s itself reported a mixed first quarter, with U.S. same-store sales slightly below expectations. Despite higher prices boosting average checks, the increased cost has led some consumers to cut back.

“Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry,” McDonald’s CEO Chris Kempczinski remarked during the company’s earnings call on April 30. He emphasized the need for McDonald’s to remain “laser-focused” on affordability to stay appealing to diners.

Behind the Scenes of the Value Meal Initiative

The road to launching the $5 value meal has not been without its hurdles. Initial proposals faced challenges in gaining the necessary approval, prompting further discussions on the details of the offer . A collaborative effort is critical, as McDonald’s U.S. leadership team works closely with owner-operators who run 95% of McDonald’s locations. These franchisees play a significant role in such decisions, especially when promotions might impact their profits.

Adding an interesting twist to the narrative, Coca-Cola has stepped in with additional marketing funds to enhance the attractiveness of the deal, although both McDonald’s and Coca-Cola have opted not to comment on these developments.

Conclusion: A Strategic Move in Challenging Times

As McDonald’s navigates through these economically challenging times, its focus on affordability through the introduction of the $5 value meal reflects a strategic alignment with consumer needs. This initiative not only aims to drive traffic and boost sales but also solidifies McDonald’s commitment to providing value to its customers. With careful consideration of the economic landscape and consumer expectations, McDonald’s is poised to continue its legacy as a leader in the fast-food industry, adapting innovatively to the evolving market demands.

Howard Hughes starts Houston metro’s first mass-timber office project

Will be first office building in town center of Bridgeland master-planned community; inventory and occupancy relatively low in submarket

Howard Hughes is off and running with the office portion of its master-planned community in Cypress, introducing an eco-friendly design to the submarket.

The Houston-based real estate giant started construction on the 49,000-square-foot One Bridgeland Green, a mass-timber office building within the 70-acre Village Green at Bridgeland Central, the Houston Business Journal reported . 

The office building, at 20203 Bridgeland Creek Parkway, is within the “Northwest outlier” submarket, according to Colliers. That submarket has under 7.5 million square feet of inventory, less than 4 percent of the metro’s overall 205 million square feet, and its vacancy sits at about 20 percent. That’s lower than the Greater Houston office vacancy of 27.5 percent.

Village Green will serve as the town center development of Bridgeland , an 11,500-acre community in the northwest suburb, and its first office building. That and a 100,000-square-foot H-E-B grocery store will anchor the town center, which could include restaurants, hotels, retail and entertainment. 

Mass timber has become increasingly popular as more developers take an environmentally focused approach. Mass timber construction involves the assembly of large pre-manufactured, multilayered solid wood panels, enhancing efficiency and sustainability.

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One Bridgeland Green will be built with 1,700 cubic meters of spruce-pine-fir, showcasing dowel-laminated timber decking and cross-laminated timber shear walls. Complementing these materials are low-carbon concrete and zinc cladding, creating a building with renewable-energy and high-performance systems aimed at reducing overall carbon emissions.

Howard Hughes is pursuing LEED Gold and Fitwel green building certifications for One Bridgeland Green, with anticipation of 25 percent less annual energy usage and an 80 percent  less municipal water consumption.

“Sustainability, nature — these are all aspects of master-planned community development that we take very seriously, both in The Woodlands and in Bridgeland,” Howard Hughes’ Jim Carman told the outlet. “And so it was natural for us to look at mass timber for this very first office building in Bridgeland.”

The building’s eco-friendly features extend to a 10,000-gallon rainwater-harvesting cistern for recycling rainwater and HVAC condensation, along with native plants and water-efficient fixtures. The project will also incorporate electric vehicle charging stations and photovoltaic rooftop panels.

Construction of One Bridgeland Green is expected to be completed by summer 2025. The majority of the building has been pre-leased, with additional leases set to be announced this summer.

—Quinn Donoghue 

Companies and People

Money blog: 600 new skyscrapers 'on way' for London, report finds

A reader seeks help as her employer of 24 years is bringing in a new clock-in system to pay her by the minute. Read this and all the latest personal finance and consumer news in the Money blog - and share your own problem or dispute below.

Monday 13 May 2024 19:57, UK

• Gen Z would rather deliver parcels than work in restaurants, Michel Roux Jr claims
• 600 new skyscrapers on way for London, report finds
• Money Problem: My workplace is bringing in new clock-in system to pay us by the minute - is this allowed?
• Free childcare applications open for new age band

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Young homebuyers are being forced to gamble with their retirement prospects by taking on ultra-long mortgages, according to a former pensions minister.

Sir Steve Webb described data - supplied by the Financial Conduct Authority to the Bank of England - as "shocking".

It suggests that more than one million new mortgages have been issued over the past three years with end dates beyond the state pension age.

The ex-Liberal Democrat MP, who is now a partner at the consultancy firm LCP, voiced fears that borrowers could be forced to raid their pension savings to clear their mortgage in a worst-case scenario.

Sir Steve saw the potential for harm in any case, as longer-term mortgages deprive people of a period running up to retirement when they could be mortgage-free and boosting their pension.

What does the data say? 

• 42% of new mortgages in the fourth quarter of 2023 - or 91,394 - had terms going beyond the state pension age;
• In the final quarter of last year, people aged 30 to 39 accounted for 30,943 new mortgages lasting beyond state pension age;
• People aged 40 to 49 accounted for 32,305;
• Under-30s made up 3,676 of these mortgages;
• People aged 50 to 59 accounted for 18,854, and there were 661 who were over 70.

Mortgage rates have been rising since the end of 2021 when the Bank of England began action to tackle rising inflation.

Taking home loans with longer maturity dates tends to be more attractive when interest rates are high, as monthly repayments are lower.

You can read more on this story below...

Waitrose has become the only supermarket to receive a royal warrant from the King. 

The recognition means the company has regularly provided the royal household with products for at least five years. 

It also means it can use the King's coat of arms on packaging, as part of advertising or on any stationary it creates. 

Waitrose was first granted a royal warrant in 1928 for supplying King George V with groceries and cleaning materials.

"We are honoured and proud that His Majesty has granted us his warrant," James Bailey, executive director of Waitrose, said. 

"It means the world to all of us, and our farmers and suppliers. There couldn’t be a more powerful symbol of our commitment to service and quality, and our determination to have the highest environmental and animal welfare standards." 

Waitrose was previously granted a royal warrant by the late Queen in 2002 and the King when he was Prince of Wales in 2010.

The Queen has also granted her first royal warrants, picking seven companies, including luxury department store Fortnum & Mason and the florist that supplied her coronation flowers, Shane Connolly & Company. 

The royal nod could be bad news for customers, however, with a brand finance expert telling Sky News that having a royal warrant allows firms to charge a price premium.

David Haigh said his company's research estimated this to be "between 10% and 25%".

A royal warrant says a company or a product is luxurious, high quality and sustainable, he explained. 

He estimates the scheme is "worth billions to UK companies and… therefore it's a very high value to the UK economy".

"And one of the reasons for that is that a lot of foreign tourists and buyers have a preference for royal warrant holder products. We found that 100% of Chinese buyers would pay in excess of 10% for a royal warrant holder product."

Read more on the Queen's choices here :

Gordon Ramsay's restaurants tripled losses to £3.4m last year, as the chef warned businesses in the industry were facing a "challenging" climate. 

The chef's group spent millions opening five new restaurants in 2023, including a Lucky Cat in Manchester, a Bread Street Kitchen in Battersea Power Station and a Street Pizza in Edinburgh. 

Sales at his wide-ranging establishments rose, however, by 21% to £95.6m in the year to August, according to The Telegraph. 

"It's been a really hard-fought year, but at the same time an exciting year, and in tough times it amazes me how strong and vibrant our industry is," Ramsay told the news outlet. 

"It's challenging out there and businesses are battling to stay afloat, rising costs, rent and food costs, multiple strikes. It's a battle" 

He was optimistic, however, saying there hasn't been "so much passion and vibrancy" in the industry since he opened his first restaurant in 1998.

"We've still got something wonderful to celebrate, and I truly believe the industry has never been so exciting."

Once the UK's favourite alcoholic beverage, beer's popularity seems to be fading among the younger drinking generation... 

In fact, only 30% of people aged 18 to 24 ever drink it, according to a study commissioned by the Society of Independent Brewers. 

Instead, younger drinkers say they prefer drinking spirits, wine and cider. 

Pub visits appear to be suffering as well, with almost a quarter of the 2,000 people surveyed saying they have never visited their local. 

SIBA's 2024 Craft Beer Report paints a more positive picture for small and independent brewers, however, with more than 55% of beer consumers saying they now drink "local craft beer". 

It also found average beer production volumes among independent breweries has risen by 14% since last year - a return to pre-pandemic levels for the first time in 4 years. 

"Demand for local, independently brewed beer in the UK is strong, with independent brewers reporting production volumes up by 14%, meaning they have returned to 2019 volumes again," Andy Slee, SIBA's chief executive, said. 

But, he said, it's time for "cautious optimism" only, with the industry still plagued with a number of issues. 

"The short-term issue for small independent breweries isn't demand; it's profitability, rising costs and financial pressures such as lingering COVID debt," he said. 

"Far too many breweries are simply trying to survive rather than thrive, so while there are many positives signs highlighted in the report, for now it's cautious optimism."

Earlier this year, our Money reporter Emily Mee explored whether the UK's big night out culture was dying out. 

Nightlife experts warned we're losing one club every two days at the moment - and if we stay on this trajectory, we will have none left by 2030.

You can read more about her findings here...

A total of 583 skyscrapers are "queuing up in the pipeline" to be built across central London, a development thinktank has said. 

That is more than double the 270 built in the past decade. 

In the eastern borough of Tower Hamlets alone, 71 tall buildings were completed in that time that time, the report by New London Architecture found. 

A further 24 were in the City of London and 27 in Canary Wharf and Isle of Dogs. 

The report said the rapid change has been fuelled by a "burgeoning demand" for office and residential space, overseas investment and a supporting planning environment. 

"Tall buildings have changed the face of London substantially over the last 20 years and will continue to do so - the pipeline that NLA has tracked means there is at least 10 years' supply that has already been defined," Peter Murray, the organisation's co-founder, said. 

"London's population continues to grow, passing the 10 million mark at the end of this decade.

"We'll still need tall buildings; and NLA will continue to keep a close watch on what's going on." 

Restaurants might only be able to open three or four days a week due to staffing problems, Michel Roux Jr has warned. 

Speaking to The Telegraph as he gears up to open his new restaurant Chez Rouz, the Michelin starred chef admitted the industry needs to change to accommodate flexible working hours. 

"Just because I worked 80 hours a week or more doesn't mean the next generation should," he said. 

"Quite the contrary. That is something that we have to address in our industry."

But, he warned that the move will come at a cost... 

"It will mean ultimately that going out is going to be more expensive, and that maybe your favourite restaurant is no longer open seven days a week - it's only open three or four days a week," he said. 

The industry is known for its long, unsociable working hours, and Roux Jr explained that the real issue hit after the pandemic, with people no longer wanting to work weekends. 

"People don't want to work unsociable hours and would rather work delivering parcels as and when they want to. It's as simple as that," he added. 

Earlier this year, Roux Jr said goodbye to his famous restaurant Le Gavroche in London. 

It had been opened by his father Albert Roux and uncle Michel Roux in 1967. 

Now, he said it's "brave" to open a new restaurant, with the market "very, very tough". 

"I really feel for anyone that is brave enough to open up a restaurant now. It's incredibly difficult," he added. 

Chez Rouz at The Langham in Marylebone, central London, is due to open on 22 May. 

By James Sillars , business news reporter

A pause for breath on the FTSE 100 after a 3% gain over the course of past week that took the index to a fresh record closing high.

The rally of recent weeks - significant for London's standing and pension pots alike - has been broad based and reflects several factors.

A major driver has been sterling's weakness versus the US dollar.

The US currency has been strong as the Federal Reserve, its central bank, has hinted it will be some time yet before it begins to cut interest rates.

Language out of the Bank of England last week sparked a flurry of bets that UK rates could be cut as early as next month.

A weaker pound boosts dollar-earning constituents on the FTSE 100 because they get more for their money when dollars are converted to pounds.

Also at play is the view that UK stocks represent good value, as they are cheaper compared to many of their international peers.

A few moments ago, the FTSE 100 was trading 6 points lower at 8,423.

A major talking point is the possibility of the Chinese fast fashion firm Shein listing in London.

According to Reuters, the company has shifted its focus to the UK after receiving a lukewarm reception in the United States.

The news agency, citing two sources, reported that Shein was stepping up its preparations for an initial public offering in London that would be expected to be one of the biggest carried out globally this year.

By Emily Mee , Money team

No one likes the date in their calendar when their MOT rolls around. 

But to make things a little less stressful, consumer expert Scott Dixon - known as The Complaints Resolver - has given us some tips on what to look out for to help your vehicle pass with flying colours. 

Some of the most common failures are faulty steering, brakes, suspension, worn or damaged tyres, cracked windscreens and faulty lights. 

Mr Dixon recommends you get your car serviced a couple of weeks before your MOT, in case there are any complex or costly issues. 

This will give you time to get them fixed and get your car through first time without any advisories. 

Aside from taking your car for a service, there are also some easy checks you can run yourself... 

Listen for unusual clunks while you're driving - this could be a sign of a damaged suspension. 

You could also check by pushing the car down on each corner. It should return to normal without bouncing a few times. 

Another option is to look with a torch under the wheel arch, as this should reveal any obvious defects. 

Blown bulbs are a common MOT failure, but they're cheap to fix. 

Walk around your car and check all the bulbs are working - this includes the headlights, sidelights, brake lights, indicators and the number plate bulb.

Mr Dixon says it's "not an easy job" to change the lightbulbs yourself on most modern cars, as the MOT will also check the positioning of the light. Therefore he recommends getting this done professionally. 

Squealing or grinding noises may be a sign your brake pads need replacing. 

You should also check whether your car stops in a straight line, or whether it pulls in different directions. 

Don't forget about the handbrake, too. Test it out on a slope and see if it securely holds the car. If it doesn't, you should get it adjusted. 

It's easy to check if your wipers work okay, but you should also make sure to inspect the blades for tears and rips. 

They should be able to clean the windows with no smears. 

Mr Dixon says you don't need to pay Halfords to change your wiper blade as you can "do it yourself in seconds". All you need to do is look for a YouTube tutorial. 

He also recommends buying the Bosch wiper blades, as he says these are good quality and will also be a sign you've looked after your car well when you come to sell it. 

One thing to look out for is tread depth. You can do this by looking for the "wear bar" that sits between the tread. 

If it's close to 1.6mm and is low, you should get the tyre replaced so it's not flagged as an advisory. 

Also check for perished tyre walls, which can happen when a vehicle is standing for any length of time. 

Uneven tyre wear is another potential issue, and if there are signs of this you should get the tyre replaced and tracking and suspension checked. 

These must be in good condition and working order, with no tears or knots. 

Registration plates

Your number plates should be clean and visible with a working light bulb at the rear. You may need to give them a wipe and replace the bulb if necessary. 

This should be in good condition, without damage such as loose bumpers or sharp edges. 

Mr Dixon advises against using automatic car washes during your car's lifetime, saying they "wreck your car". 

"It's not just your paintwork but they can also damage the wiper blades and the bodywork," he says. 

Check for warning lights

You'll need to take your vehicle to a trusted garage or mechanic for this. 

Exhaust emissions

Some diesel vehicles can fail their MOTs based on emissions. To avoid this, you can buy a fuel treatment pack and take your car for a good run to clear the fuel lines and tank.

Driving for at least 30 to 50 minutes at a sustained speed on a motorway or A-road should help to clear the filter. 

You should make sure the driver's view of the road isn't obstructed, so check for stone chips at eye level and remove any obstructions such as air fresheners and mobile phone cradles. 

What else should you think about? 

Make sure your car is clean beforehand, as a tester can refuse to do your MOT if the vehicle is filthy and full of rubbish. 

Giving your car a clean can also give you a chance to inspect it, Mr Dixon says. 

Another thing to do is to check last year's MOT for any advisories that might crop up this time. 

These potential issues will still be there - so it's best not to ignore them. 

You can check your vehicle's MOT history using  https://car-check.co.uk . 

Every Monday we get an expert to answer your money problems or consumer disputes. Find out how to submit yours at the bottom of this post. Today's question is...

I have worked at a bank for 24 years - the facilities are outsourced. This new company is bringing in a system where the staff have to click in and out and are then paid by the minute? Is this allowed? Amber

Ian Jones, director and principal solicitor at Spencer Shaw Solicitors, has picked this one up...

Your rights depend on your contract and what it says about payment. Does it specify an annual salary, or payment by time? Does it allow for changes to how payment is calculated?

If the contract does not allow for this type of payment, your employer may be trying to vary the contract of employment unlawfully.

If you're directly employed by the bank, and your pay arrangements are changing because of a new monitoring system, this would be an internal contract variation. If you work in the facilities department and the new contractor is taking over as your employer, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 may apply. 

In this case, your current terms, conditions and previous service will transfer to the new employer.

TUPE may make the issue sound more complicated but, in practice, either way the changes will be valid only if the employee agrees to them.

If you have not agreed to the change, then this could be a breach of contract. This could give rise to a successful claim in the civil courts or the employment tribunal. 

If the breach is serious (for example, you're paid less than agreed in the original contract) and you resign in response, this could amount to constructive dismissal for which a claim can be made in the employment tribunal. 

It would be sensible to get the contract reviewed by a solicitor for advice. But act swiftly - if you continue working for the employer, you are effectively waiving the breach and accepting the change to your contract.

To make it possible to pay by the minute, employees may be monitored while at work. When collecting and processing data and using it to make a decision, the employer must comply with data protection laws. If not, the employee could be entitled to compensation, depending on the breach, or the employer could be at risk of a sanction by the regulator the Information Commissioner's Office.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about.  Submit your dilemma or consumer dispute via:

• The form above - make sure you leave a phone number or email address
• Email [email protected] with the subject line "Money blog"
• WhatsApp us  here .

Please make sure you leave your contact details as we cannot follow up consumer disputes without them.

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May 8, 2024

Written by Amazon Staff

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Apple Will Revamp Siri to Catch Up to Its Chatbot Competitors

Apple plans to announce that it will bring generative A.I. to iPhones after the company’s most significant reorganization in a decade.

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By Tripp Mickle ,  Brian X. Chen and Cade Metz

Tripp Mickle, Brian X. Chen and Cade Metz have been reporting on Apple’s plans for generative A.I. for this article since the fall of 2023.

Apple’s top software executives decided early last year that Siri, the company’s virtual assistant, needed a brain transplant.

The decision came after the executives Craig Federighi and John Giannandrea spent weeks testing OpenAI’s new chatbot, ChatGPT . The product’s use of generative artificial intelligence , which can write poetry, create computer code and answer complex questions, made Siri look antiquated, said two people familiar with the company’s work, who didn’t have permission to speak publicly.

Introduced in 2011 as the original virtual assistant in every iPhone, Siri had been limited for years to individual requests and had never been able to follow a conversation. It often misunderstood questions. ChatGPT, on the other hand, knew that if someone asked for the weather in San Francisco and then said, “What about New York?” that user wanted another forecast.

The realization that new technology had leapfrogged Siri set in motion the tech giant’s most significant reorganization in more than a decade. Determined to catch up in the tech industry’s A.I. race, Apple has made generative A.I. a tent pole project — the company’s special, internal label that it uses to organize employees around once-in-a-decade initiatives.

Apple is expected to show off its A.I. work at its annual developers conference on June 10 when it releases an improved Siri that is more conversational and versatile, according to three people familiar with the company’s work, who didn’t have permission to speak publicly. Siri’s underlying technology will include a new generative A.I. system that will allow it to chat rather than respond to questions one at a time.

The update to Siri is at the forefront of a broader effort to embrace generative A.I. across Apple’s business. The company is also increasing the memory in this year’s iPhones to support its new Siri capabilities. And it has discussed licensing complementary A.I. models that power chatbots from several companies, including Google, Cohere and OpenAI.

An Apple spokeswoman declined to comment.

Apple executives worry that new A.I. technology threatens the company’s dominance of the global smartphone market because it has the potential to become the primary operating system, displacing the iPhone’s iOS software, said two people familiar with the thinking of Apple’s leadership, who didn’t have permission to speak publicly. This new technology could also create an ecosystem of A.I. apps, known as agents, that can order Ubers or make calendar appointments, undermining Apple’s App Store, which generates about $24 billion in annual sales.

Apple also fears that if it fails to develop its own A.I. system, the iPhone could become a “dumb brick” compared with other technology. While it is unclear how many people regularly use Siri, the iPhone currently takes 85 percent of global smartphone profits and generates more than $200 billion in sales.

That sense of urgency contributed to Apple’s decision to cancel its other big bet — a $10 billion project to develop a self-driving car — and reassign hundreds of engineers to work on A.I.

Apple has also explored creating servers that are powered by its iPhone and Mac processors, two of these people said. Doing so could help Apple save money and create consistency between the tools used for processes in the cloud and on its devices.

Rather than compete directly with ChatGPT by releasing a chatbot that does things like write poetry, the three people familiar with its work said, Apple has focused on making Siri better at handling tasks that it already does, including setting timers, creating calendar appointments and adding items to a grocery list. It also would be able to summarize text messages.

Apple plans to bill the improved Siri as more private than rival A.I. services because it will process requests on iPhones rather than remotely in data centers. The strategy will also save money. OpenAI spends about 12 cents for about 1,000 words that ChatGPT generates because of cloud computing costs.

(The New York Times sued OpenAI and its partner, Microsoft, in December for copyright infringement of news content related to A.I. systems.)

But Apple faces risks by relying on a smaller A.I. system housed on iPhones rather than a larger one stored in a data center. Research has found that smaller A.I. systems could be more likely to make errors, known as hallucinations, than larger ones.

“It’s always been the Siri vision to have a conversational interface that understands language and context, but it’s a hard problem,” said Tom Gruber, a co-founder of Siri who worked at Apple until 2018. “Now that the technology has changed, it should be possible to do a much better job of that. So long as it’s not a one-size-fits-all effort to answer anything, then they should be able to avoid trouble.”

Apple has several advantages in the A.I. race, including more than two billion devices in use around the world where it can distribute A.I. products. It also has a leading semiconductor team that has been making sophisticated chips capable of powering A.I. tasks like facial recognition.

But for the past decade, Apple has struggled to develop a comprehensive A.I. strategy, and Siri has not had major improvements since its introduction. The assistant’s struggles blunted the appeal of the company’s HomePod smart speaker because it couldn’t consistently perform simple tasks like fulfilling a song request.

The Siri team has failed to get the kind of attention and resources that went to other groups inside Apple, said John Burkey, who worked on Siri for two years before founding a generative A.I. platform, Brighten.ai. The company’s divisions, such as software and hardware, operate independently of one another and share limited information. But A.I. needs to be threaded through products to succeed.

“It’s not in Apple’s DNA,” Mr. Burkey said. “It’s a blind spot.”

Apple has also struggled to recruit and retain leading A.I. researchers. Over the years, it has acquired A.I. companies led by leaders in the field, but they all left after a few years.

The reasons for their departures vary, but one factor is Apple’s secrecy. The company publishes fewer papers on its A.I. work than Google, Meta and Microsoft, and it doesn’t participate in conferences in the same way that its rivals do.

“Research scientists say: ‘What are my other options? Can I go back into academia? Can I go to a research institute, some place where I can work a bit more in the open?’” said Ruslan Salakhutdinov, a leading A.I. researcher, who left Apple in 2020 to return to Carnegie Mellon University.

In recent months, Apple has increased the number of A.I. papers it has published. But prominent A.I. researchers have questioned the value of the papers, saying they are more about creating the impression of meaningful work than providing examples of what Apple may bring to market.

Tsu-Jui Fu, an Apple intern and A.I. doctoral student at the University of California, Santa Barbara, wrote one of Apple’s recent A.I. papers . He spent last summer developing a system for editing photos with written commands rather than Photoshop tools. He said that Apple supported the project by providing him with the necessary G.P.U.s to train the system, but that he had no interaction with the A.I. team working on Apple products.

Though he said he had interviewed for full-time jobs at Adobe and Nvidia, he plans to return to Apple after he graduates because he thinks he can make a bigger difference there.

“A.I. product and research is emerging in Apple, but most companies are very mature,” Mr. Fu said in an interview with The Times. “At Apple, I can have more room to lead a project instead of just being a member of a team doing something.”

Tell us how your law firm is using A.I.

We’d like to hear from lawyers working with generative A.I., including contract lawyers who have been brought on for assignments related to A.I. We won’t publish your name or any part of your submission without contacting you first.

Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis. More about Tripp Mickle

Brian X. Chen is the lead consumer technology writer for The Times. He reviews products and writes Tech Fix , a column about the social implications of the tech we use. More about Brian X. Chen

Cade Metz writes about artificial intelligence, driverless cars, robotics, virtual reality and other emerging areas of technology. More about Cade Metz

Explore Our Coverage of Artificial Intelligence

News  and Analysis

As experts warn that A.I.-generated images, audio and video could influence the 2024 elections, OpenAI is releasing a tool designed to detect content created by DALL-E , its popular image generator.

American and Chinese diplomats plan to meet in Geneva to begin what amounts to the first, tentative arms control talks  over the use of A.I.

Wayve, a London maker of A.I. systems for autonomous vehicles, said that it had raised $1 billion , an illustration of investor optimism about A.I.’s ability to reshape industries.

The Age of A.I.

A new category of apps promises to relieve parents of drudgery, with an assist from A.I.  But a family’s grunt work is more human, and valuable, than it seems.

Despite Mark Zuckerberg’s hope for Meta’s A.I. assistant to be the smartest , it struggles with facts, numbers and web search.

Much as ChatGPT generates poetry, a new A.I. system devises blueprints for microscopic mechanisms  that can edit your DNA.

Which A.I. system writes the best computer code or generates the most realistic image? Right now, there’s no easy way to answer those questions, our technology columnist writes .