U.S. History

Franklin D. Roosevelt and the New Deal

Under the leadership of Pres. Franklin D. Roosevelt, the American people and the U.S. economy gradually rebounded from the Great Depression. Roosevelt’s calm, confident demeanor had much to do with restoring Americans’ faith that better days would be coming. The New Deal policies of the Roosevelt administration brought immediate economic relief as well as reforms in industry, agriculture, finance, and labour, vastly increasing the scope of the federal government’s activities. Although the programs initiated by the New Deal had little direct expansionary effect on the economy, it remains an open question whether they may nevertheless have had positive effects on consumer and business sentiment. By 1941 real GDP in the United States had recovered to within about 10 percent of its long-run trend path. Therefore, the United States had largely recovered from the Great Depression even before World War II-related military spending accelerated.

The Franklin D. Roosevelt administration

Having defeated incumbent Herbert Hoover in the 1932 presidential election, Democrat Franklin D. Roosevelt took office amid a terrifying bank crisis in early 1933. Declaring a bank holiday was just one of the dramatic steps taken in “The Hundred Days” (March 9–June 16, 1933) early in his administration during which a major portion of First New Deal legislation was enacted. In 1935 Roosevelt asked Congress to pass additional legislation, sometimes called the “Second New Deal.” Roosevelt also provided a source of hope and security through his “fireside chats” radio broadcasts. He was ably assisted by the popular first lady, Eleanor Roosevelt, and a cabinet full of skillful, committed New Dealers.

Video: Franklin D. Roosevelt

Meet the New Deal president, who piloted the United States through the Great Depression and World War II

Franklin D. Roosevelt

The only president elected four times, FDR led the U.S. through two great crises: the Great Depression and World War II. He was both one of the most loved and most hated men in American history. His supporters hailed him as the saviour of his country; opponents claimed that he undermined free-market capitalism and unconstitutionally expanded the powers of the federal government.

U.S. Presidential Election of 1932

The 1932 election represented a dramatic shift in the political alignment of the U.S. Not only did FDR receive more than 57 percent of the popular vote and 472 electoral votes, compared with about 40 percent of the popular vote and 59 electoral votes for Republican incumbent Herbert Hoover, but substantial Democratic majorities were elected in both houses of Congress.

Eleanor Roosevelt

One of the world’s most widely admired and powerful women, Eleanor Roosevelt, wife of Franklin D. Roosevelt and first lady during the Great Depression, served as FDR’s eyes and ears throughout the nation, embarking on extensive tours and reporting to him on conditions, programs, and public opinion. Her advocacy of liberal causes made her nearly as controversial a figure as FDR.

Fireside chats

A series of radio addresses delivered by Pres. Franklin D. Roosevelt from 1933 to 1944, the fireside chats were initially meant to gain support for Roosevelt’s New Deal policies. Roosevelt, who understood the importance of radio as a medium, used common language to construct the radio address as an informal conversation between himself and the American public.

bank holiday

On March 6, 1933, Pres. Franklin D. Roosevelt responded to a wave of banking panics (in which depositors lost confidence in the solvency of banks and demanded that their bank deposits be paid to them in cash) by closing all banks in the country and permitting their reopening only after their solvency was verified by government inspectors.

Harry L. Hopkins

New Deal administrator Harry L. Hopkins personified the ideology of vast federal work programs to relieve unemployment in the 1930s; he continued as Pres. Franklin D. Roosevelt’s emissary and closest personal adviser during World War II. By 1938 he had directed the spending of more than $8.5 billion for unemployment relief, aiding some 15 million people.

The New Deal

The New Deal (1933–39) aimed to provide immediate economic relief and to bring about reforms to stabilize the U.S. economy during the Great Depression. The New Deal’s first objective was to alleviate the suffering of the huge number of unemployed workers. It also tried to regulate the country’s financial hierarchy so as to avoid a repetition of the stock market crash of 1929 and the bank failures that followed. In 1935 the New Deal’s emphasis shifted to measures designed to assist labour and other urban groups. Its programs, then, fell into three principal categories–relief, recovery, and reform—though several programs provided both relief and recovery.

Video: Works Progress Administration

Overview of the Works Progress Administration

Relief

The masses of unemployed and their families who soon overwhelmed the miserably underfinanced bodies that provided direct relief required urgent attention. In May 1933 Congress established a Federal Emergency Relief Administration to distribute half a billion dollars to state and local agencies. The Civil Works Administration provided temporary work for four million individuals but was dismantled in 1934 because of its rising costs. However, the New Deal established a range of other programs to provide a livelihood to the unemployed that had more lasting effects.

Civilian Conservation Corps (CCC)

The Civilian Conservation Corps provided national conservation work primarily for young unmarried men. Projects included planting trees, building flood barriers, fighting forest fires, and maintaining forest roads and trails. The CCC, which at its largest employed 500,000 men, provided work for a total of 3 million during its existence.

Public Works Administration (PWA)

Authorized by the National Industrial Recovery Act, the PWA spent some $4 billion on the construction of educational buildings, courts, city halls, sewage-disposal plants, public health facilities, roads, bridges, and subways.

Work Progress Administration (WPA)

Created to provide useful work to preserve the skills and self-respect of victims of the Great Depression, the WPA gave some 8.5 million people jobs. Its construction projects, which tended to employ more unskilled workers than those of the PWA, produced more than 650,000 miles of roads, 125,000 public buildings, 75,000 bridges, and 8,000 parks. Also under its aegis were the Federal Art Project, Federal Writers’ Project, and Federal Theatre Project.

WPA Federal Art Project (WPA/FAP)

Under the WPA Federal Art Project, a range of creative, educational, research, and service projects was organized to preserve the skills of professional artists in mural, easel, sculpture, and graphic art divisions, of commercial artists in the poster and Index of American Design divisions, and of the less experienced in art education and technical jobs.

WPA Federal Writers’ Project

The WPA Federal Writers’ Project provided jobs for unemployed writers, editors, and research workers. The American Guide series, the project’s most important achievement, included guides for every state and territory (except Hawaii), several cities, and a number of highways. Among the writers who worked on the project were Nelson Algren, Ralph Ellison, and Saul Bellow.

WPA Federal Theatre Project

The WPA Federal Theatre Project was established to create jobs for unemployed theatrical people. It oversaw about 1,000 productions that were mounted in four years in 40 states, often presented free to the public. Other projects included producing plays by young, unknown American playwrights, establishing Black American theatre, and presenting radio broadcasts of dramatic works. Orson Welles, John Houseman, and Elmer Rice were all associated with the Federal Theatre Project.

Video: The WPA and museums

A discussion concerning why American museums flourished in the 1930s

Recovery

New Deal recovery programs were intended to help stabilize and rebuild the economy, especially its nonbanking sectors. Among other objectives, they sought to increase agricultural prices by holding down supply, to help people remain in their homes, and to foster long-term employment.

National Industrial Recovery Act (NIRA)

The NIRA established industry-wide codes intended to eliminate unfair trade practices, reduce unemployment, establish minimum wages and maximum hours, and guarantee the right of labour to bargain collectively. The Supreme Court invalidated it in 1935, but many of its provisions were included in subsequent legislation.

Agricultural Adjustment Administration (AAA)

Established in May 1933 by the Agricultural Adjustment Act, an omnibus farm-relief bill, and overseen by Secretary of Agriculture Henry Wallace, the Agricultural Adjustment Administration sought to restore agricultural property by curtailing farm production, reducing export surpluses, and raising prices.

Tennessee Valley Authority (TVA)

Established in 1933, the Tennessee Valley Authority sought to control floods, improve navigation, improve the living standards of farmers, and produce electrical power along the Tennessee River and its tributaries. It undertook a massive program of building dams, hydroelectric generating stations, and flood-control projects.

Reform

New Deal reform programs involved legislation that was intended to guard against an economic disaster like Great Depression ever recurring. In particular they targeted banking, the stock market, labour, and labour unions.

Federal Deposit Insurance Corporation (FDIC)

Created by the Banking Act of 1933 (the Glass-Steagall Act), the FDIC is responsible for insuring bank deposits against loss in the event of a bank failure and regulating certain banking practices.

Federal Housing Administration (FHA)

The FHA was established in 1934 to facilitate home financing, improve housing standards, and increase employment in the home-construction industry. By insuring home mortgage loans, it encouraged banks to make more loans to prospective home buyers.

Federal National Mortgage Association (Fannie Mae)

Established in 1938 as a federally chartered private corporation, Fannie Mae was designed to guarantee the availability of affordable housing by ensuring that mortgage bankers and other lenders possessed sufficient funds to lend to home buyers at low rates.

Securities and Exchange Commission (SEC)

The Securities and Exchange Commission was established in 1934 to restore investor confidence in the stock market by ending the misleading sales practices and stock manipulations that led to the stock market crash of 1929.

National Labor Relations Act (Wagner Act)

The National Labor Relations Act (1935), or Wagner Act, was the most important U.S labour legislation of the 20th century. Its main purpose was to establish the legal right of most workers to organize or join labour unions and to bargain collectively with their employers.

Social Security Act (1935)

The Social Security Act established a permanent national old-age pension system through employer and employee contributions. It was later extended to include dependents, the disabled, and other groups.

Fair Labor Standards Act (1938)

The Fair Labor Standards Act, also called Wages and Hours Act, was the first U.S. legislation to prescribe nationwide compulsory federal regulation of wages and hours.

Political movements and challenges to Roosevelt

Those on the political right criticized the New Deal for undermining capitalism and creating a welfare state, but, at the same time, Roosevelt’s efforts to stabilize the American economy also faced challenges from the left and from populists. During the Great Depression a significant number of Americans flirted with Marxist movements and ideas—which seemed to explain the causes of capitalism’s collapse—as well as with the notion that the model for a more humane society could be found in the Soviet Union.

Communist Party of the United States (CPUSA)

After feeling like solitary individuals suffering from the failures of capitalism, many American intellectuals and middle-class professionals were attracted to American Communist Party, which they saw as a community of like-minded souls. Other Americans, who embraced Marxist-inspired ideas but stopped short of joining the Communist Party became known as “Fellow Travelers.”

Huey P. Long

As the demagogic governor of Louisiana and then as a U.S. senator, Huey P. Long built a national following with his “Share the Wealth” program. Promising more than Roosevelt did, Long threatened to pull sufficient votes from FDR in the 1936 election to bring Republican victory, but he was assassinated in 1935.

Father Coughlin

The poor in Northern cities responded to the Roman Catholic “radio priest” Charles E. Coughlin, who initially supported the New Deal, nationalization, and currency inflation but switched to a reactionary antidemocratic, anti-Semitic emphasis.

Townsend clubs

In the early 1930s some five million older Americans joined nationwide Townsend clubs, promoted by Francis E. Townsend to support his program demanding a $200 monthly pension for everyone over the age of 60.

U.S. Presidential Election of 1936

Although the New Deal had alienated conservatives, including many businessmen, most Americans supported Roosevelt’s programs, and in the 1936 election FDR handily defeated his Republican challenger, Alf Landon, the governor of Kansas, carrying every state except Maine and Vermont.

Court-packing scheme

During FDR’s first term, the Supreme Court (all pre-Roosevelt appointees) had invalidated several key New Deal measures. To make the court more supportive of reform legislation, Roosevelt proposed a reorganization plan that would have allowed him to appoint one new justice for every sitting justice age 70 or older. Widely viewed as a court-packing scheme (even by FDR’s supporters), the reorganization bill was voted down.

U.S. Presidential Election of 1940

Roosevelt’s Republican opponent in the 1940 election, Wendell Willkie, a one-time Democrat, declared himself in favour of retaining the main features of the New Deal legislation, promising only that he would execute it more efficiently. FDR won in a landslide, capturing 449 electoral votes to 82 for Willkie to become the first three-time U.S. president.