In 1933 when Franklin D. Roosevelt had become president, the United States had been at its lowest point of the Depression. Twenty-five percent of the workforce was unemployed, half of the citizens who had home mortgages had failed to pay back their loans, Americans had lost nearly $2.5 billion in bank failures, and the entire banking system had appeared to be on the verge of collapse (Keene, p.662, 666). Roosevelt had empathy for the common people, and he devoted massive legislation to fix the economy and better the lives of these people. He was quoted as saying “I pledge you, I pledge myself, to a new deal for the American people,” during his campaign (662). In the end, the New Deal and its programs were a success in helping promote economic recovery and lift the weight of the Great Depression from its victims.
The New Deal was the bold action that the United States needed so badly during this time, right in the midst of the Depression when Roosevelt took office. There were eleven key parts of the New Deal legislation, and all of these acts and programs had been established to solve the economic problems which members of Roosevelt’s Brain Trust had believed were caused by underconsumption, unequal distribution of income, the farm crisis, the rigidity of prices, and low wages (Keene, p.662).
In order to resolve the many economic issues, confidence in the banking system must be restored, people had to be put to work and maintain their jobs, and businesses had to be kept afloat. Roosevelt knew he was capable of achieving this because he was willing to provide jobs through widespread public work programs and fund temporary relief to average citizens, things Hoover would not guarantee. Roosevelt also encouraged Americans to write to him so he could better understand the true problems of the common folk. He connected well with the public, most likely due to his polio, and infused hope into a time of trouble and confusion.
Roosevelt told his radio listeners that it was the government’s job to straighten out the economic situation, and he attempted to use the government’s power through the New Deal to achieve this. On March 6, 1933, he declared a bank holiday in which the nation’s banks were closed for a week straight. To make up for the stock market crash of 1929, a series of laws were created to establish the Securities and Exchange Commission (SEC) and reform the practices of buying and selling stocks. The Gladd-Steagall Act of 1933 created the Federal Deposit Insurance Corporation (FDIC) which insures the accounts of small accountholders in member banks, and the FDIC still exists today. The Federal Housing Authority (FHA) was founded in 1934 and offered insurance to private lenders who financed home mortgages for newly purchased houses. These government-supported programs helped to form the modern mortgage lending practices that enabled the percentage of American citizens that owned their own homes to increase by one-third over the next forty years (Keene, p.666).
Another major goal of the New Deal was to help reform the workforce and get people jobs. The National Recovery Administration (NRA) was established by the 1933 National Industrial Recovery Act, and was the foundation of Roosevelt’s efforts to devise a Hoover-like cooperative resolution to the crisis. The NRA also established industrial boards for each subdivision of the economy that brought competitors together to set prices, production quotas, and salaries. Supporters of the NRA believed this would stop manufacturers from cutting wages to subsidize lower prices. However, the NRA quickly became unfavorable to many Americans, and was declared unconstitutional by the Supreme Court in 1935 (Keene, p.667). Even though it was short-lived, it showed that improving the workplace was an objective of Roosevelt’s and showed that there were efforts being made to achieve this goal.
The Civil Works Administration (CWA) provided jobs that...