New Deal

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The New Deal was the name that United States President Franklin D. Roosevelt gave to a complex package of economic programs he initiated between 1933 and 1935 with the goal of giving relief to the unemployed, reform of business and financial practices, and promoting recovery of the economy during the Great Depression.

When Roosevelt took office on March 4, 1933, the nation was deeply troubled. All banks were closed and no checks could be cashed. The unemployment rate was 25% and higher in major industrial and mining centers. Farm prices had fallen in half. Overall prices had plunged by over 20%, making debts harder to bear and making planning difficult. Mortgages were being foreclosed by tens of thousands. Unemployment was still high in 1939, with the normal levels reached in 1941.

Historians distinguish a "First New Deal" (1933) and a "Second New Deal" (1934-36). Some programs were declared unconstitutional, and others were repealed during World War II; beginning in early 1937 almost no new programs were initiated because of the opposition of the new Conservative Coalition.

The "First New Deal" of 1933 was aimed at meeting the needs of practically all major groups, from banking and railroads to industry and farming. The New Deal innovated with banking reform laws, work relief programs, agricultural programs, and industrial reform (the National Recovery Administration, NRA), and the end of the gold standard.

A "Second New Deal" (1935–1938) included labor union support, the Works Progress Administration (WPA) relief program, the Social Security Act, and programs to aid the agricultural sector, including tenant farmers and migrant workers. The Supreme Court ruled several programs unconstitutional; however, most were soon replaced, with the exception of the NRA. The Fair Labor Standards Act of 1938 was the last major program launched, which set maximum hours and minimum wages for most categories of workers.

Most of the relief programs were shut down during World War II by the Conservative Coalition (i.e., the opponents of the New Deal in Congress). Many regulations were ended during the wave of deregulation in the late 1970s and early 1980s. Several New Deal programs remain active, with some still operating under the original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System, Securities and Exchange Commission (SEC), and Fannie Mae.