When the Stock Market crashed in 1929 and
plummeted America into an economic depression, many Americans lost all hope (Britannica,
The New Deal was the plan to bring America out of the Great Depression in the
form of many federal agencies and programs under Franklin D. Roosevelt’s
presidency during the 1930’s. Its main goals were “relief, recovery, and reform”.
Although it did not succeed in delivering the nation from the Depression, there
were many reforms that reconstructed how the federal government interacted with
state and local ones. Other reforms, such as banking and social security, are
still in use today.
Throughout the 1930’s, the United States
(U.S) experienced an economic downfall known as the Great Depression. During
this time, businesses and banks went bankrupt and unemployment was at an
all-time high. To combat the nationwide poverty, newly elected president
Franklin D. Roosevelt(FDR) developed his “New Deal” (Staff,
This New Deal was designed to reinforce the economy and increase employment by
implementing various government programs. Encyclopaedia Britannica (2017)
states that the New Deal also introduced “reforms in industry, agriculture,
finance, waterpower, labour, and housing” (The Editors of Encyclopaedia Britannica, 2017). These changes, with
the intent of improving of the nation’s economic status forced the federal
government to be involved in the government of individual states.
New Deal was a series of federal programs that had the intent of eventually drawing
America out of the Depression. These
programs enabled the government to get involved with state affairs by sending them
money and providing jobs. This made some people uneasy, but most citizens were
grateful for the relief and hope that they would emerge from this economic
The objectives for Franklin D.
Roosevelt’s New Deal were the 3 R’s- relief, recovery, and reform. FDR’s
immediate focus was giving temporary relief to U.S. Citizens. He initiated this
by creating agencies such as the Federal Emergency Relief Administration(FERA)
and the Public Works Administration(PWA) (The Editors of Encyclopaedia
FERA dispersed about half a billion dollars to state governments and local agencies.
PWA created jobs in construction that built roads, bridges, schools, and other
public structures throughout the nation.
To recover the nation from its
economic downfall, FDR outlined the National Industrial Recovery Act in 1933 (The Editors
of Encyclopaedia Britannica, 2017). This act created
the National Recovery Administration (NRA) in June of 1933. The NRA, “regulated
prices, wages, working conditions, and credit-terms” with approval from the
president ( Schoolworkhelper Editorial Team,
This administration became too complex to manage and gave the president legislative
power, which the Supreme Court declared unconstitutional. In May of 1935,
almost two years after its founding, the Supreme Court, almost two years after
its founding, the Supreme Court shut down the organization. Although the New
Deal was not responsible for delivering the U.S. from the Great Depression, as
was the outcome of World War II, it did set the stage for many reforms in the
United States Government.
The reforms that Roosevelt
established during his time as president under the New Deal’s legacy affected the
United States’ capitalist economy and its relationship between the government
and its citizens. During his first one hundred days as president, Roosevelt restructured
the American banking system. They created the Federal Deposit Insurance Corporation,
“which insured individual deposits up to $5,000” for each citizen in case of
another banking disaster (History on the Net Editors, 2012). This renewed
Americans’ faith in the banking system.
Roosevelt’s time as president, he established many federal programs as a part
of his New Deal. These federal programs were often referred to as “Alphabet
Agencies”. This is because each agency was called by its acronym rather than
its full name.
The Civilian Conservation Corps
(CCC) was created in 1933 and lasted until 1942. This agency hired about 2.5
million unmarried men from ages 18-25 to work on environmental projects around
the nation. These projects ranged from planting trees to fighting soil erosion (the Editors
of Publications International, Ltd. , 2007). Each participant
earned $30 a month, and many the men sent a large portion of their income home
to their families.
Likewise, the Civil Works
Administration (CWA) was also established in 1933 and provided jobs to unemployed
Americans. Although it was only operational for one year, it gave over four
million construction jobs (the Editors of Publications
International, Ltd. , 2007). These workers built
schools, roads, and even raked leaves for a salary of $15 a week. The steady
supply of labor boosted morale for the devastated Americans during the
The Social Security Administration
(SSA) was implemented in August of 1935 and was created under the Social
Security Act (the Editors of Publications International, Ltd. ,
This dispensed steady income for retired citizens as well as an insurance
system for the unemployed. The SSA is “the nation’s most important and expensive
domestic program” and currently covers nearly 49 million citizens, which is
about 20% of the federal budget (the Editors of Publications
International, Ltd. , 2007).
The Works Progress Administration
(WPA) operated from 1935 until 1943. This program is labeled “the largest and
most comprehensive New Deal agency” (the Editors of Publications International, Ltd. ,
As another relief oriented administration, WPA provided over eight million workers
to build public work projects. This agency is responsible for 650,000 miles of
roads, 78,000 bridges, 125,000 buildings, and 700 miles of airport runways (the Editors of Publications International, Ltd. ,
WPA also had an arts program that hired artists, photographers, actors, and
writers as government employees to complete public projects like making guidebooks
or painting murals.
The Fair Labor Standard Act (FLSA)
was created in 1938 and is still in use with our modern government. This law reformed
the economy and introduced a standard minimum wage, which at the time was $.25
an hour (the Editors of Publications International, Ltd. ,
FSLA also outlawed child labor and established the average forty-hour work week
that we use today.
Although the New Deal had many
positive outcomes, there were many negative ones as well. According to Jim Powell
(2003), a senior fellow at the Cato Institute, FDR’s New Deal prolonged the
Great Depression rather than shortening it (Powell, How FDR’s New Deal Harmed
Millions of Poor People, 2003). The New Deal agencies
were funded by raising federal taxes exponentially tripled, “from $1.6 billion
in 1933 to $5.3 billion in 1940” (Powell, 2003). Taxes were raised
on goods such as cigarettes, candy, alcohol, movie tickets, and other commodities
that were purchased primarily by middle and lower class citizens. These increased
prices made items even more unaffordable for poor citizens.
Other than poor citizens, the New
Deal was detrimental for African Americans in some respects. The Agricultural Adjustment
Act (AAA), whose goal was to increase food prices by increasing food production
on farms, depleted the jobs of black sharecroppers throughout the South (Powell, Why Did FDR’s New Deal Harm Blacks?, 2003). Racism against
African Americans was very strong at that time, so blacks would be the first
ones fired and the last ones hired, especially in the cutthroat economy with
limited jobs that was the Great Depression.
The New Deal was Franklin D.
Roosevelt’s attempt at curing America’s depression by creating federal agencies
to play an intrusive part in state and local governments. Through relief,
recovery, and reform, the nation worked toward economic reclamation, though not
achieving it using the New Deal’s methods alone. Many of the reforms generated during
this time, such as the Social Security Act and the Fair Labor Standard Act, are
still in use with the modern-day American government. The many building, roads,
bridges, and parks that were built during that time are also currently used by
the nation’s public. Although the New Deal had varying effects on the country,
both good and bad, it impacted America’s present government greatly.