What was the New Deal?

The New Deal was a series of federal programs, public works projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt and Congress between 1933 and 1939 to address the Great Depression. Roosevelt took office on March 4, 1933, when American unemployment stood at about 25 percent and roughly 4,000 banks had failed in the previous twelve weeks. In his inaugural address he declared that the only thing the country had to fear was fear itself. He acted within hours, declaring a four-day national bank holiday and calling Congress into a special session that produced the famous First Hundred Days of legislation.

Historians often describe the New Deal as having three goals, summarized as the Three R's: relief for the unemployed and poor, recovery of the economy, and reform of the financial system to prevent future disasters. Major relief programs included the Federal Emergency Relief Administration, the Civilian Conservation Corps which gave young men work planting trees and building parks, and later the Works Progress Administration, which employed about 8.5 million Americans on roads, bridges, schools, post offices, and public art between 1935 and 1943. Recovery measures included the National Industrial Recovery Act of 1933 and the Agricultural Adjustment Act of 1933, which paid farmers to reduce production and raise crop prices. The Tennessee Valley Authority, also created in 1933, built dams and hydroelectric plants that brought electricity, flood control, and economic development to seven southern states.

Reform measures permanently changed American government. The Glass-Steagall Act of 1933 separated commercial and investment banking and created the Federal Deposit Insurance Corporation, which insures bank deposits to this day. The Securities Exchange Act of 1934 created the Securities and Exchange Commission to regulate Wall Street. The Social Security Act of 1935 created old-age insurance, unemployment insurance, and aid to dependent children. The National Labor Relations Act of 1935, also called the Wagner Act, guaranteed workers the right to organize unions and bargain collectively. The Fair Labor Standards Act of 1938 set a national minimum wage and a 40-hour workweek.

The Supreme Court initially struck down some New Deal programs, prompting Roosevelt's controversial 1937 court-packing plan. Although unemployment did not return to pre-Depression levels until World War II spending began in 1941, the New Deal permanently expanded the federal government's role in American life.