The 1929 stock-market crash and the ensuing Great Depression exposed major weaknesses in the U. S. and world economies. These ranged from chronically low farm prices and uneven income distribution to trade barriers, a surplus of consumer goods, and a constricted money supply. As the crisis deepened, President Hoover struggled to respond.
In 1932, with Hoover’s reputation in tatters, FDR and his promised “New Deal” brought a surge of hope. Although FDR’s New Deal did not end the Great Depression it eased the people’s suffering and reformed many of the problems that contributed to the depression by providing relief, recovery, and reform while fundamentally changing the role of the federal government towards the people.
Bucket 1 Relief Bank Holiday/Emergency Banking Relief Act- Closed all banks; government then investigated banks and only those that were solvent ones were allowed to reopener–Sent millions of dollars to states to use in DIRECT RELIEF payments and food for the unemployed CCC-Created jobs for over two million young unmarried men in conservation work and parks HOLC- Lowered mortgages to stop foreclosures. Bucket 2 Recovery AAA- Paid farmers to reduce the amount of crops they planted, in order to cut excess production NRA-Set up voluntary agreements among businesses to cut excess production. prices, wages, and hours of work) SETRULES AND REGULATIONS FOR THE ECONOMY( created NIRA)NIRA- Authorized the President to regulate industry and permit cartels and monopolies in attempt to stimulate economic recovery. WPA- Created jobs for millions of unemployed people construction roads, hospitals, post offices, parks, and many other projects. The WPA also included a program that hired out-of-work artists, photographers, actors, and writers for aide range of artistic and educational projects.
TVA- Built hydroelectric power plants and flood control dams in seven states in the Tennessee River region Bucket 3 Reform FDIC- Protected people’s bank deposits, thus eliminating the problem of “bank runs” that were a serious problem in the early 1930’s. SEC-Created to supervise the stock market and protect investors from dishonest practices. National Labor Relations Act (Wagner act) – Gave labor unions the right to organize and represent the workers in collective Bargaining.
Social Security Act- Created a federal system of old-age pensions and assistance for orphans and the disabled, It also created an unemployment insurance system. Fair Labor Standards Act- Set up the first national minimum wage law and abolished child labor. Soil Conservation Act- To make sure that another dust bowl was avoided. Initially focusing on immediate economic relief and recovery, Roosevelt welcomed big business in his depression-fighting coalition.
By 1935, however, the New Deal adopted a more class-based approach, FDR now addressed the plight of the poor, including sharecroppers and migrants; pursued tougher business regulation and higher taxes for the wealthy. The New Deal had its downside. Some programs failed, and recovery proved elusive. But the New Deal’s achievements remain noteworthy, reflection an unprecedented level of engagement with social and economic issues. The New Dealers radically reshaped the nature of the presidency, the nation’s political agenda, and citizens’ understanding of the role of government.