In this video adapted from American Experience, archival photos, newsreel footage, and interviews describe the conditions facing the country during the Great Depression and the policy responses of Franklin D. Roosevelt during his first term in office (1933–1936). Among the initiatives he championed were those that addressed farming, banking, labor/management issues, housing, and public welfare. This array of initiatives, which was named the New Deal, transformed government’s relationship to the economy.
When Franklin D. Roosevelt took office in March 1933, the United States was in the fourth year of the Great Depression. Since the stock market crash of October 1929, unemployment had risen from around 4 percent to 25 percent, affecting 14 million Americans. Bank failures increased tenfold, leading to a loss of $140 billion in deposits. President Herbert Hoover had attempted some federal initiatives to address the situation at the end of his term, including an increase in upper-level tax rates and the creation of the Reconstruction Finance Corporation. Hoover was a fervent believer in volunteerism, however, and the optional government/business partnerships he advocated, like the National Credit Corporation, had little effect.
Roosevelt responded immediately. His first act in office was to declare a bank holiday, a three-day cooling-off period that was followed by the Emergency Banking Relief Act, which provided a federal guarantee of loans and savings accounts. Roosevelt also called for a special 100-day session of Congress to address a variety of emergency measures. During this period, known as FDR’s Hundred Days, over a dozen pieces of major legislation were enacted that put tens of thousands of citizens back to work. Among the initiatives were the Farm Security and Agricultural Adjustment Acts directed at farmers, the creation of the Tennessee Valley Authority to provide power to rural sections of the country, the introduction of federal economic planning via the National Industrial Recovery Act, and the centerpiece of Roosevelt’s initiatives, the omnibus National Recovery Administration (NRA).
Roosevelt had originally favored minimal government intrusion in economic matters and a reliance on charitable organizations to provide needed relief. Given the gravity of the situation, however, he was willing to experiment with new ideas in order to put the country back to work and assist the growing ranks of needy citizens. His efforts drew severe criticism, especially after $2 billion in federal expenditures in the first year of his administration failed to halt the Depression. In addition to resistance from business leaders and Republican politicians, Roosevelt had to confront the objections of the Supreme Court, which held in May 1935 that the NRA and other New Deal programs were unconstitutional because they gave powers to the federal government that the U.S. Constitution had reserved for the states.
Undeterred by his opponents, Roosevelt concluded his first term with the enactment of the Works Progress Administration, a massive jobs bill that represented the largest peacetime appropriation of funds by any government in history. Included within the WPA was the Wagner Act, which guaranteed the right of workers to unionize and to bargain collectively; the Social Security Act, a social insurance policy for all citizens; and the Federal Housing Authority, designed to protect homeowners and encourage new construction. Collectively, these initiatives represented a historic shift in the balance of power in both the political and business spheres, and permanently altered the way in which the US economy was managed.
NARRATOR: March 4, 1933, Roosevelt's first day in office. 14 million Americans were out of work. Nine million had lost their life savings. The economy had collapsed. Americans everywhere waited for the president to tell them what he was going to do. Roosevelt could hope that the economy would repair itself, or he could try something that had never been done before in America-- intervene on a massive scale with the power of the federal government. In his first 100 days in office, Roosevelt managed to put tens of thousands of people back to work. He pledged billions to save their farms and their homes from foreclosure. He provided relief to the unemployed. He restored confidence in the banks, and guaranteed the savings of millions of Americans. And to sell the centerpiece of his program, the National Recovery Administration, he orchestrated an extraordinary publicity campaign. When the hundred days were over, Roosevelt had signed 15 major bills into law and created an alphabet soup of new government agencies. "We have had our revolution," one magazine reported, "and we like it." By 1934, Roosevelt had been president for a year. Yet in spite of all his New Deal programs, hard times persisted. The government had spent over $2 billion for relief, but thousands of new people were forced on the welfare rolls each day. Despair turned to anger. Violent protests and strikes swept across the country. Roosevelt's consensus was beginning to unravel. During the euphoria of his first hundred days in office, even Republicans had supported him. Now they turned against him.
HENRY B. FLETCHER: The New Deal is government from above. It is based on the proposition that the people cannot manage their own affairs...
NARRATOR: Republicans charged that government was becoming too big and too intrusive.
FLETCHER: We do not want to see these alphabetical bureaucratic agencies become permanent fixtures in our national political life.
NARRATOR: Roosevelt grew increasingly frustrated as business began to accuse him of meddling with free enterprise. When he regulated the stock exchange and the banks, the captains of American industry were outraged. Angry businessmen founded the Liberty League, dedicated to stopping further New Deal legislation. Then, on May 27, 1935, a day New Dealers would remember as Black Monday, the Supreme Court struck at the very heart of Roosevelt's hope to stimulate the economy. They declared the NRA-- the National Recovery Act-- unconstitutional. And it was just the first blow. The court was moving against Roosevelt's efforts to abolish child labor, establish a minimum wage, boost farm prices. Law by law, the court would attempt to dismantle the work of the first 100 days. But with millions still unemployed, Roosevelt continued to use the power of the federal government to relieve the suffering caused by the Great Depression.
WILLIAM LEUCHTENBURG: Congress, at Roosevelt's request, enacts the largest single peacetime appropriation in the history of this country or any country in the history of the world.
NEWSREEL NARRATOR: Federal jobs for thousands at the rate of a hundred a minute.
NARRATOR: Men and women hired by the government worked on more than 5,000 schools, 1,000 landing fields, 13,000 playgrounds. Even artists went to work for the WPA. But for Roosevelt, this was just the beginning. For millions of Americans-- impoverished children, the unemployed, the elderly with no savings, the disabled-- he offered the Social Security Act. He sold it as an insurance policy for everyone, but the poor, Roosevelt was saying, had rights too.
DAVID GINSBURG: The great tradition in the United States had been private charity, community charity. Families take care of their own. And so the notion that somehow the government would take care of the poor or the unemployed or the old-- this is something that was just not part of our tradition. We didn't know of it.
NARRATOR: In his first term, he had restored hope to a people who had lost hope, used the power of the presidency to ensure that the Great Depression could never happen again. Roosevelt had begun to shift the balance of power in America and forced government to accept the responsibility for the well-being of America's poorest citizens.
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