The New Deal

Jana Brunner - 5th hour


After the American stock market crashed on October 29, 1929, an era known as the Great Depression began. Many people had lost a lot of money. Banks as well as lots of companies went bankrupt and people lost their jobs. Meanwhile, President Herbert Hoover thought the crisis would be over soon and thought it was not the federal government's duty to resolve it. As a presidential candidate, Franklin Roosevelt promised to act instantly in order to solve the problems of the Great Depression era. When he took office in 1933, he immediately took action. Over the next eight years, the government came up with projects and programs which are collectively known as the New Deal.

Franklin D. Roosevelt
crowd in front of a bank in New York during the Great Depression

Roosevelt's first actions:

March 5, 1933: Roosevelt declared a four-day bank holiday to stop people from taking their money out of their savings accounts and therefore weakening the weak banks even more.

March 9, 1933: The Emergency Banking Act was passed. Banks were reorganized and insolvent banks were closed.

May 1933: Roosevelt signed the Tennessee Valley Authority Act in order to enable the federal government to build dams along the Tennessee River to control flooding and provide inexpensive power for the people.

May 1933: A bill was passed by Congress that would give money to commodity farmers when they left their fields fallow in order to boost prices.

June 1933: The National Industrial Recovery Act was passed. It said that workers would have the right to form unions and bargain for higher wages and better working conditions and established a Public Works Administration.

also in 1933: The Agricultural Adjustment Act, the Glass-Steagall Banking Bill, the Home Owners' Loan Act and 10 other major laws were passed.

The Second New Deal:

As the first laws did not help enough and the problems of the Great Depression could not be completely solved, Roosevelt launched more federal programs in 1935.

April 1935: The Works Progress Administration was created to provide jobs for unemployed people.

July 1935: The National Labor Relations Act which created the National Labor Relations Board was passed. The Board supervised union elections and prevented businesses from treating their workers unfairly.

August 1935: The Social Security Act was passed. It guaranteed pensions, established an unemployment insurance and said that the federal government would support dependent children and the disabled.

Major goals and achievements:

- Economic Recovery

- Job Creation

- Investment in Public Works

- Civic Uplift

total employment in the USA from 1920-1940, excluding farms and WPA


Especially Conservatives criticized that the New Deal was an unconstitutional extension of the federal government. They also criticized the high costs of the programs.

End of the New Deal:

Eventually, rulings of conservative justices as well as anti-Roosevelt sentiments made it hard for the president to enact any more programs. Furthermore, when the USA entered World War II in 1941, the American industry was stimulated and the Great Depression came to an end.

Aftermath of the New Deal:

The New Deal changed the relationships between the federal government and the people. Furthermore some programs like Social Security, unemployment insurance, or agricultural subsidies still exist.


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