New Deal

• Relief - Programs to help immediately. Attempted to employ people
• Recovery - Programs to help rebuild, especially in non-bank sectors (agricultural and housing)
• Reform - Prevent disaster from reoccurring, legislation focused on banks, labour and labour unions.
• Roosevelts New Deal -

  • Set about offering relief and trying to get the economy to recover. However, the economy declined further =banking crisis
  • Beginning of March, millions demanded money back from banks
  • Banks in 34 states closed and padlocked doors
  • Entire financial system was on verge of collapse
• The First New Deal -

  • Persuaded congress to give him ' emergency powers' from 9 March to 16 June 1933 ('hundred days') - similar to dictatorship
  • Many of Roosevelts ideas were not new but there was a burst in legislation to tackle the depression.
• TVA (Tennessee Valley Authority) - Built 21 dams in ten years, stopped flooding, provided cheap electricity and provided work.
• WPA (Works Progress Administration) - ran projects which provided work for the unemployed, e.g. building airports, schools, hospitals or bridges. Millions earnt a small wage and felt valuable
• FERA (Federal Emergency Relief Administration) - Provided matched funding to help states organise payments to the unemployed and homeless.
• CCC (Civilian Conservation Camps) - Provided paid conservation work to give unemployed young men jobs. By 1941, 2.5 million had taken part and millions of trees planted/ parks and forest areas developed.
• Stock Exchange -

  • The Securities and Exchange Commission introduced rules for the stock exchange to prevent another crash like 1929
• Bank Holiday -

  • Emergency Banking Act closed banks for 4 days. Government checked that all were financially sound, and when reopened, they had the backing of the Federal Reserve.
  • Restored Confidence in banks
• Fireside Chats -

  • FDR made sure that everyone who sent him a letter got a reply (8000 letters a day), and that anyone who phoned the Whitehouse never got cut off.
  • FDR described his policies in radio broadcasts (simplified for the public)
• Abolished Prohibition -

  • 'I think this would be a good time for a beer'. FDR - Restored faith in Government. Stopped humiliation due to laws being openly ignored.
  • Increased Government revenue
• Budget -

  • Did not run deficit budgets
  • Cut the pay of government employees by 15% (made depression worse)
  • Borrowed huge sums of money to finance New Deal. Money was spent on projects to be paid back later.
• Bankruptcies -

  • Farm Loan Act and Bankruptcy Act - prevented banks from foreclosing on businesses until they could borrow from federal reserve.
  • Home Loan Act +Home Owners Loan Corporation - did the same for general public.
• Prices and Wages -

  • Agricultural Adjustment Act (AAA) - paid farmers to take fields out of production = stop over-production + increase prices.
  • National Recovery Administration (NRA) - Businesses men joined a 'Roll of Honour'. Promised to cut production and pay good wages. 2.5 mil firms, employing 22 mil people, joined scheme.
  • FDR abolished Child Labour - more adults working
• Currency -

  • Stop people owning gold (deposit in banks)
  • All gold given to Government
  • Increase price of gold from $20 to $35 an ounce = increased government reserves and stopped people hoarding money.