FDR's New Deal

The Great Depression hit the United States hard, and it suffered the most from unemployment. By 1933, roughly one quarter of Americans were out of work. Many panicked and took their money out of the bank, leaving banks without enough reserve cash. 9,000 banks failed, taking the savings of many Americans with them at a time when there was no FDIC to insure people's deposits. Environmental conditions in the American West only exacerbated the Depression. Years of drought and unsustainable farming practices caused severe dust storms known as the Dust Bowl, displacing millions of farmers and crippling the agricultural sector.

When the Depression first started, President Herbert Hoover implemented some measures to try to halt the crisis; but this was a time when people, including Hoover, believed local and state governments were largely responsible for providing relief. In this context, Franklin Delano Roosevelt challenged Hoover in the 1932 Election, promising a New Deal for the American people that would expand the powers of the federal government to combat the economic crisis. Like Stalin, FDR often spoke of these efforts in military terms, likening strategies to combat the Depression to military plans before a major battle and using propaganda to gain support for his New Deal programs.

As homelessness increased, shanty towns called "Hoovervilles" (like this one in Seattle) popped up across the country. They were named after President Hoover, as many Americans blamed him for failing to address the Depression.

During the Depression, many Americans struggled to put food on the table, relying on soup kitchens and long bread lines. In Chicago, famous gangster Al Capone opened soup kitchens and donated to charities.

A poster for the Social Security Administration

Eleanor Roosevelt (who was instrumental in supporting many of FDR's projects) talking with a project superintendent in Des Moines, Iowa, 1936. This project, sponsored by the Works Progress Administration, planned to convert a city dump into a waterfront park.

Below: A poster for the Civilian Conservation Corp

The New Deal

FDR's New Deal focused on the three R's: Relief for the unemployed, Recovery of the economy, and Reform to prevent future economic disasters. The New Deal is sometimes referred to as Roosevelt's "alphabet soup," referring to the various acronyms for the programs and agencies. The Works Progress Administration (WPA), Public Works Administration (PWA), Tennessee Valley Authority (TVA), and the Civilian Conservation Corp (CCC) provided jobs and also implemented public works projects such as building bridges, damsm and schools and enacting environmental improvement programs. The Agricultural Adjustment Act (AAA) sought to stabilize agricultural prices; the Farm Security Administration provided aid to poor and displaced farmers; and the Home Owner's Loan Act helped Americans refinance their homes to avoid becoming homeless.

Like his cousin Teddy Roosevelt, FDR felt the federal government should have the authority to reign in corporations and monopolies. The National Recovery Act and Wagner Act gave rights to unions to collectively bargain for better wages and working conditions; and in 1938 FDR signed the first federal minimum wage law. Perhaps one of the New Deal's most lasting legacies was the Social Security Act, which provided pensions and unemployment insurance to millions of Americans and created programs to care for dependent children and the disabled. And to reform the banking sector, FDR signed the Emergency Banking Act to help banks reopen on sound footing and created the Federal Deposit Insurance Corporation (FDIC) to insure deposits and restore trust in banking. Meanwhile, Congress created the Security and Exchange Commission (SEC) to oversee and regulate the stock market and investing.

Thus, through the New Deal and Second New Deal, FDR sought to stimulate the economy, address inequality, and restore public faith in the economy through a wide variety of programs and laws. These programs included laws passed by Congress as well as executive orders signed by FRD.

Mexican and Mexican-American families wait to board Mexico-bound trains in Los Angeles on March 8, 1932. County officials arranged these mass departures as part of "repatriation campaigns," fueled by fears that Mexicans and Mexican-Americans were taking scarce jobs and government assistance during the Great Depression.

Some of FDR's critics charged him with taking powers reserved for Congress.

Outcomes

The Great Depression fundamentally changed the role of the federal government in America. It created the modern "welfare state," vastly increasing the government's role in overseeing the nation's economy, safeguarding the welfare of its citizens, and providing a social safety net for those who fall on hard times.

FDR and his first and second New Deals programs were popular, but they also drew heavy criticism. The New Deal greatly increased government spending and taxation of the wealthy, and critics accused FDR of creating a socialist state. Some accused him of acting "dictatorial," increasing the power of the federal government beyond what it should be, while others charged that he did not go far enough to bring an end to the Depression. Several laws and agencies, like the National Recovery Administration, were deemed unconstitutional by the Supreme Court, but many of his reforms endured well beyond the Great Depression. And today, some of these programs continue to cause debate: experts project that the Social Security Administration will not be able to continue funding its programs, and there have been many debates regarding raising the federal minimum wage, with some states raising wages above the federal rate.

Ultimately, it was not the New Deal that ended the Depression. Instead, America's preparation for WWII helped pull the country into a new era of prosperity. However, the New Deal was not for nothing. Unemployment remained high at 11%, but it was a big improvement from its previous rate of 25%. Many other sectors of the economy began to return to pre-Depression levels, and Americans mostly had more confidence in the economy. By 1938, the government concluded it was no longer necessary to continue expanding New Deal programs. Unfortunately, everyone did not benefit evenly from the New Deal. Conservatives tended to charge that New Deal programs were hostile to business. And while more women and African Americans entered the workforce, they continued to face discrimination and lower wages. In addition, approximately 1.8 of people of Mexican descent (many who were American born citizens) were deported to Mexico by local governments in an effort to preserve resources and jobs for white Americans.

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