New Deal
The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938 to rescue the U.S. from the Great Depression. It was widely believed that the depression was caused by the inherent market instability and that government intervention was necessary to rationalize and stabilize the economy.
This article is about the United States economic program and public services program. For other uses, see New Deal (disambiguation).Location
United States
Reform of Wall Street; relief for farmers and unemployed; social security; political power shifts to Democratic New Deal Coalition
Major federal programs and agencies, including the Civilian Conservation Corps (CCC), the Works Progress Administration (WPA), the Civil Works Administration (CWA), the Farm Security Administration (FSA), the National Industrial Recovery Act of 1933 (NIRA) and the Social Security Administration (SSA), provided support for farmers, the unemployed, youth, and the elderly. The New Deal included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. New Deal programs included both laws passed by Congress as well as presidential executive orders during the first term of the presidency of Franklin D. Roosevelt.
The programs focused on what historians refer to as the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reform of the financial system to prevent a repeat depression.[1] The New Deal produced a political realignment, making the Democratic Party the majority (as well as the party that held the White House for seven out of the nine presidential terms from 1933 to 1969) with its base in progressive ideas, the South, big city machines and the newly empowered labor unions, and various ethnic groups. The Republicans were split, with progressive Republicans in support but conservatives opposing the entire New Deal as hostile to business and economic growth. The realignment crystallized into the New Deal coalition that dominated presidential elections into the 1960s and the opposing conservative coalition largely controlled Congress in domestic affairs from 1937 to 1964.
Political alignment[edit]
By 1936, the term "progressive" was typically used for supporters of the New Deal[149] and "conservative" for its opponents.[150] Roosevelt was assisted in his endeavors by the election of a liberal Congress in 1932. According to one source "We recognize that the best liberal legislation in American history was enacted following the election of President Roosevelt and a liberal Congress in 1932. After the midterm congressional election setbacks in 1938, labor was faced with a hostile congress until 1946. Only the presidential veto prevented the enactment of reactionary anti-labor laws."[151] In noting the composition of the Seventy-Third Congress, one study has stated: "Though much of the Democratic congressional leadership remained old-guard, southern, agrarian, and conservative, the rank-and-file Democratic majorities in both houses were largely made up of fresh, northern, urban-industrial representatives of at least potentially liberal bent. At a minimum they were impatient with inaction, and not likely to be silenced by appeals to tradition. They were, as yet, an unformed and reckoned force, one that Roosevelt might mould to his purposes of remaking his party – or one whose very strength and impetuosity might force the president's hand."[152] As stated by another study, in regards to the gains the Democrats made in the 1932 midterm elections, "The party gained ninety seats in the house and thirteen in the Senate. Even more significant, from the standpoint of potential support for urban programs, was that non-Southern Democrats represented a working majority in the House for the first of what would be only a few times in the twentieth century. Roosevelt's political instincts mood paralleled the mood of Congress, and he sought policies to tie the party's new urban supporters into a permanent majority coalition behind the Democratic Party."[153] As noted by another study, "President Roosevelt's extraordinary legislative accomplishments between 1933 and 1938 owed much to his personal political qualities, but ideologically favourable large partisan majorities in the House and the Senate were a prerequisite of success."[154]
As one journal reflected in 1950: "Look back to the 1930's and you can see how winning in mid-terms years affects the kind of laws that are passed. A tremendous liberal majority was swept in with Franklin Roosevelt in 1932. In the 1934 mid-term races that liberal majority was increased. After 1936 it went even higher."[155]
From 1934 to 1938, there existed a "pro-spender" majority in Congress (drawn from two-party, competitive, non-machine, progressive and left party districts). In the 1938 midterm election, Roosevelt and his progressive supporters lost control of Congress to the bipartisan conservative coalition.[156] Many historians distinguish between the First New Deal (1933–1934) and a Second New Deal (1935–1936), with the second one more progressive and more controversial.
The New Deal had many programs and new agencies, most of which were universally known by their initials. Most were abolished during World War II while others remain in operation or formed into different programs. They included the following:
Statistics[edit]
Depression statistics[edit]
"Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically".[298] Economic indicators show the American economy reached nadir in summer 1932 to February 1933, then began recovering until the recession of 1937–1938. Thus the Federal Reserve Industrial Production Index hit its low of 52.8 on July 1, 1932, and was practically unchanged at 54.3 on March 1, 1933, but by July 1, 1933, it reached 85.5 (with 1935–39 = 100 and for comparison 2005 = 1,342).[299] In Roosevelt's 12 years in office, the economy had an 8.5% compound annual growth of GDP,[300] the highest growth rate in the history of any industrial country,[301] but recovery was slow and by 1939 the gross domestic product (GDP) per adult was still 27% below trend.[253]