Roosevelt gave high priority to creating jobs. He planned to help the unemployed with work relief programs, giving needy people government jobs. During his first month in office, FDR asked Congress to create the Civilian Conservation Corps (CCC). Over the next 10 years, the CCC employed about 3 million young men to work on projects that benefited the public, planting trees to reforest areas, building levees for flood control, and improving national parks.
Roosevelt made aid to the poor and suffering another priority. FDR established the Federal Emergency Relief Administration (FERA) to give money to the states for use in helping people in need. Roosevelt appointed Harry Hopkins, a New York social worker, to lead the FERA. Hopkins became one of FDR’s closest advisers and got involved in several other New Deal programs. Roosevelt did not forget agriculture. On May 12, Congress passed the Agricultural Adjustment Act (AAA). The act had two goals: to raise farm prices quickly and to control production so that farm prices would stay up over the long term.
In the AAA’s first year, though, the supply of food outstripped demand. The AAA could raise prices only by paying farmers to destroy crops, milk, and livestock. To many it seemed shocking to throw food away when millions of people went hungry. The New Dealers claimed the action was necessary to bring prices up. To control production and farm prices, the AAA paid farmers to leave some of their land uncultivated. If market prices of key farm products such as wheat and cotton fell below a certain level, the AAA would pay farmers subsidies, grants of money, to make up the difference. In the first three years of the New Deal, farmers’ incomes rose by about 50 percent. The Supreme Court ruled that the AAA was unconstitutional in United States v. Butler (1936) for invading the reserved powers of the states.
One of the boldest programs launched during the Hundred Days was the Tennessee Valley Authority (TVA). The TVA aimed to control flooding, promote conservation and development, and bring electricity to rural areas along the Tennessee River. By building new dams and improving others, the TVA ended the region’s disastrous floods. Also, with hydroelectric power generating affordable electricity, thousands of farms and homes in some Southern states were wired for electricity for the first time.
Some critics charged that funds for the TVA should be used to support programs nationwide. Power companies also attacked the program as unfair and communistic. When the spring rains came in 1937, however, the system worked, and the dams prevented the Tennessee River from flooding. In the end, most observers agreed that the TVA was an example of successful social and economic planning.
On the last day of the Hundred Days, Congress passed the National Industrial Recovery Act (NIRA), which Roosevelt called “the most important and far-reaching legislation” ever passed in the United States. The NIRA aimed to boost the economy by helping business regulate itself. The NIRA created the National Recovery Administration (NRA), which encouraged businesses to set a minimum wage and abolish child labor. In addition, the NRA tried to set up codes governing pricing and other practices for every industry. Hugh Johnson, a former general named to head the NRA, launched a campaign to promote the agency. Before long, the agency’s blue eagle symbol and slogan, “We Do Our Part”, appeared everywhere. Another program that the NIRA launched was the Public Works Administration (PWA). Its goal was to stimulate the economy through the building of huge public works projects that needed large numbers of workers. The agency employed people to work on the construction of roads, shipyards, hospitals, city halls, and schools. Many PWA projects, such as New York City’s Lincoln Tunnel and Kentucky’s Fort Knox, still stand. The PWA spent its funds slowly, though, and did not have much immediate impact on unemployment.
To avoid future banking crises, Roosevelt called for reform of the nation’s financial system. Congress established the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits. The government guaranteed that money placed in a bank insured by the FDIC would not be lost if the bank failed. Congress also passed a law regulating the sale of stocks and bonds and created the Securities and Exchange Commission (SEC). This 1934 law gave the SEC the power to punish dishonest stockbrokers and speculators.
The New Deal did not cure the nation’s ills. The Depression dragged on, bringing continued hardship. Farmers continued to lose their land. Unemployment remained at high levels. Many people still struggled to survive and to make ends meet. Yet, the darkest days had passed. The panic of 1932 and 1933 had receded, and the flurry of activity from the nation’s capital had restored some measure of confidence.
Those who opposed the New Deal challenged many of its laws in the courts, claiming that they were unconstitutional. Several important cases reached the Supreme Court. In May 1935, the Supreme Court ruled that the National Industrial Recovery Act was unconstitutional. In the opinion of the Court, Congress had exceeded its lawful power to regulate interstate commerce. In January 1936, the Supreme Court struck down the Agricultural Adjustment Act. Cases were also pending against the Wagner Act, the Social Security Act, and the Tennessee Valley Authority. It appears the Supreme Court might destroy the New Deal.
The presidential campaign of 1936 was based on a single issue: Did the American people support FDR and the New Deal? To run against Roosevelt, the Republicans nominated Alfred M. Landon, governor of Kansas. Landon attracted dissatisfied Democrats as well as Republicans. FDR campaigned as the champion of the average American. He denounced big business and the rich. On Election Day, FDR received 61 percent of the popular vote, the biggest landslide in an American presidential election to that time. Roosevelt’s support came from progressives and liberals, the poor and unemployed, urban workers, and African Americans. These groups would form the core of the Democratic Party for decades to come.
Soon after his reelection, FDR took action to prevent the Supreme Court from undoing the New Deal. He asked Congress to increase the number of justices on the Court from 9 to 15, saying that the 9 justices were overworked and needed additional help. FDR would appoint the 6 new justices—selecting, of course, justices who would uphold the New Deal. The proposal aroused bitter opposition. Critics accused the president of trying to “pack” the Court and ruin the system of checks and balances set up in the Constitution. The issue died when the Court ruled in favor of the Wagner Act and the Social Security Act. The New Deal was no longer in danger from the Court. The unpopularity of the court-packing plan, however, cost Roosevelt a great deal of support and triggered a split in the Democratic Party.
By the summer of 1937, the national income had nearly returned to its 1929 level. Believing that the Depression was finally over, Roosevelt tried to reduce the government’s debt by cutting spending on relief and job programs. The economy faltered immediately. Farm prices dropped. Four million people lost their jobs. Times nearly as hard as 1932-1933 returned. The new economic downturn, known to some as the Roosevelt Recession, lasted into 1938. Roosevelt helped to reverse it with a flood of government spending on public works.
The court-packing fight and the Roosevelt Recession cost FDR support in Congress. The economy had not fully recovered, despite the wide-ranging New Deal programs. As the 1930s ended, however, world events caused Americans to turn their attention from domestic to foreign affairs. Dangerous forces were on the rise in Asia and Europe.
Complete the chart below to review the programs established during President Franklin Roosevelt’s New Deal. For each abbreviation listed in the chart, write the full name of the program and its purpose.
The New Deal | ||
Program Initials | Full Name | Aims/Purposes |
CCC | ||
FERA | ||
AAA | ||
TVA | ||
NIRA | ||
NRA | ||
PWA | ||
FDIC | ||
SEC |
Click the button below to reveal the answers.
The New Deal | ||
Program Initials | Full Name | Aims/Purposes |
CCC | Civilian Conservation Corps | Provided jobs for young men to work on projects to benefit the public, such as planting trees, building levees for flood control, and improving national parks |
FERA | Federal Emergency Relief Administration | Gave money to the states for use in helping people in need |
AAA | Agricultural Adjustment Act | Raised farm prices quickly and controlled production so that farm prices would stay up over the long term |
TVA | Tennessee Valley Authority | Controlled flooding, promoted conservation and development, and brought electricity to rural areas along the Tennessee River |
NIRA | National Industrial Recovery Act | Boosted the economy by helping business regulate itself |
NRA | National Recovery Administration | Encouraged businesses to set a minimum wage and abolish child labor; also set up codes governing pricing and other practices of industry |
PWA | Public Works Administration | Stimulated the economy through the building of huge public works projects that needed large numbers of workers |
FDIC | Federal Deposit Insurance Corporation | Insured bank deposits |
SEC | Securities and Exchange Commission | Regulated the sale of stocks and bonds and punished dishonest stockbrokers and speculators |