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--Roots of 
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Teddy Gleason

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THE NEW DEAL

To counteract the effects of the Great Depression in the early 1930's, President Franklin D. Roosevelt passed a series of legislation that re-established government involvement in the welfare of the nation's citizens. The many resolutions outlined in the legislation were suggested and designed by the president and an advisory council of businessmen, lawyers, professors and politicians collectively referred to as the "Brain Trust."

Beginning on March 6, 1933 the government embarked on its New Deal. With the financial crisis of the Great Depression, many Americans were pulling their savings from the banks and closing their accounts. As banks went out of business the public's trust in the banks dropped quickly. President Roosevelt called for a Bank Holiday on March 6, 1933. The purpose of closing the banks was to cease transactions that would further hurt the banking industry. The Emergency Banking Act was adopted three days later on March 9, 1933 requiring in-depth inspections of all financial institutions to assure their stability before re-opening. In May, the Securities and Exchange Commission (SEC) was founded to regulate the sales of securities through the Securities Act of 1933. Finally, the following summer, the Glass- Steagall Act established even more static rules for banks to follow and created the Federal Deposit Insurance Corporation (FDIC), an organization guaranteeing financial coverage for all members of a bank in case the institution were to go out of business.

To help the troubled agricultural industry, Roosevelt's administration created the Agricultural Adjustment Administration to give funds to farmers who limited the production of their crops, in effect increasing the value of the remaining crops.

The following are brief descriptions of major legislation passed during the New Deal.

The National Industrial Recovery Act - Passed in June 1933, this Act created the National Recovery Administration (NRA), an agency establishing an American minimum wage and a maximum amount of work hours for the first time. It also drafted a clear outline of the rights of labor unions.

The National Labor Relations Act - Passed in June 1933, this Act guaranteed the rights of workers to join labor unions.

The Fair Labor Standards Act - Passed in 1938, this Act officially set limits on a minimum wage and maximum number of work hours. To further the recovery of American industry, the Civilian Conservation Corps (CCC), the Public Works Administration (PWA), the Works Progress Administration (WPA), and the Tennessee Valley Authority (TVA) were all created to provide jobs for the unemployed. Restoration of dams, reforestation projects, the building of new schools and courthouses and the construction of highways and roads were the majority of the projects these workers completed. For those who were still unable to find work, the government set up the Federal Emergency Relief Administration who distributed welfare money to each state who in turn provided it for the needy. The Home Owners Loan Corporation (HOLC) was another organization that came about in 1933. This program was designed to offer homeowners low interest loans to help make their mortgage payments until the economy picked up. 1937 witnessed the United States Housing Act to build federal housing projects for those who were not homeowners.

The Social Security Act provided long term benefits for American workers by ensuring pension plans for retirement, insurance against unemployment, and providing disability payments to those who could not work to support their families.

The legislation that was passed during what is now referred to as the "Hundred Days" for its short session and efficient politics, helped the social welfare of the United States by pouring money into the economy through employment projects and welfare disbursement programs. And while it was successful in helping millions of Americans regain financial stability, Roosevelt began to lose support toward the end of his term. He was accused of trying to "pack the courts" with supporters of his New Deal and many of the Acts passed during his term were later found unconstitutional. His opposition naturally used this against him. Contrary to the administration's hopes, the implications of the New Deal only grazed the surface of the economic troubles of the US.

Ultimately, it was not the New Deal that brought prosperity back to the American economy, but massive military spending by the United States government during WWII. Nevertheless, the achievements of the New Deal are still very much a part of the culture and government of the United States, and have played an integral part in preserving the essentials of free enterprise and social welfare throughout the years. Some elements of the New Deal are still in force today. Two notable examples are the Federal Deposit Insurance Corporation (FDIC), which continues to protect banks and depositors against financial crises, and the Social Security Administration, which provides retirement funds and disability insurance to non-working Americans.

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