The New Deal The Three "R"s Relief In his nomination acceptance speech, Roosevelt had promised Americans a New Deal. He had declared: "I pledge you, I pledge myself, to a new deal for the American people." By inauguration day, on March 4, 1933, the U.S. economy was in pretty sad shape. Most banks had closed, approximately 13 million Americans were out of work, salaries had fallen by 40% and industrial wages by 60%, industrial production had fallen to just 56% of its 1929 level, and American farmers were desperate. Once in office, Roosevelt and a heavily Democratic Congress acted on this promise by implementing a program designed to spur the economy and end the depression. This program was known as the New Deal. The Three "R"s At the heart of the New Deal were three "R"s: relief, recovery, and reform. Relief would provide immediate assistance to suffering Americans. Recovery programs would help strengthen the economy. Reform efforts were designed to reduce the likelihood of another economic calamity. Historians have divided the New Deal itself into two periods -- although there was a substantial degree of overlap. The First New Deal emphasized recovery and relief. It was legislation that was passed and programs that were put into effect from 1933 through early 1935. The Second New Deal tended to focus on reform. It was legislation that was passed and programs that were put into effect after early 1935. After Roosevelt's inauguration on March 4, 1933, he and Congress immediately went to work. Roosevelt's first action was to strengthen the nation's fragile banking structure, which was in crisis because most banks had closed. Therefore, he declared a "bank holiday" from March 6th to March 9th, which closed all banks in the U.S. On March 9th, he sent to Congress the Emergency Banking Act, which allowed the federal government to strengthen, reorganize, and reopen solvent banks. Those that did not have sufficient funds would remain closed. Congress passed the act the same day. On March 13th, many banks reopened and deposits exceeded withdrawals. The Emergency Banking Act was the first law Congress passed during the "Hundred Days" that lasted from March 9th to June 16th. During this time period, Congress passed a wide variety of legislation to provide relief for struggling Americans. Relief In March 1933, the Civilian Conservation Corps (CCC) was established. While it existed, it employed a total of almost three million needy young men in national parks and forests. The young men planted trees, fought forest fires, and maintained park roads. The Civil Works Administration was also established to provide jobs for the unemployed. By January 1934, it employed over four million men and women. In May 1933, Congress established the Federal Emergency Relief Administration (FERA), which provided money to state and local agencies for work programs and direct aid to the poor. To reduce the number of foreclosures on homes, the Home Owners Loan Corporation provided funds to refinance the loans of the unemployed who were in danger of losing their homes. The need for relief did not end with the Hundred Days -- the depression proved long-lived. The Works Progress Administration (WPA) was established in 1935 and was in existence eight years. It spent about $11 billion on public construction projects, which provided jobs for about 8.5 million unemployed people. The WPA produced more than 650,000 miles of roads, 125,000 public buildings, 75,000 bridges, 8,000 parks, and 800 airports. It also provided work for thousands of unemployed artists, writers, and actors. They were employed to create art for public buildings, document local life, and organize community theaters.

Word Definition Recovery Reform Roosevelt realized that relief without recovery measures would be insufficient to revive the economy. Thus, the Hundred Days included three very important recovery measures. The Agricultural Adjustment Act (AAA) paid farmers to reduce the amount of land they cultivated. This was to reduce the surplus and raise prices for agricultural products. This act was very controversial at the time. However, it did raise farmers' incomes over time, although it was not until 1941 that farm income reached its 1929 level. Unfortunately, it aided farmers with large farms more than it assisted those with smaller farms. To assist industrial workers, the unemployed, and industry, Congress passed the National Industrial Recovery Act (NIRA) in June 1933. There were two major parts to the NIRA. The first part involved encouraging industries to agree on codes of conduct that were to guarantee fair competition. The codes included price and production controls, allowed workers to bargain with management represented by a union (collective bargaining), and established minimum hours and wages for workers. National Recovery Administration (NRA) was set up to administer this part of the NIRA. Pressure was put on businesses to cooperate -- those that did were allowed to display the Blue Eagle symbol of the NRA. The second major part of the NIRA established the Public Works Administration (PWA), which spent $4 million on public construction projects. Over time, the PWA contributed significantly to construction. It constructed more than 70% of new education buildings; 65% of new courthouses, city halls, and sewage-disposal plants; 35% of new public-health facilities; and 10% of all new roads, bridges, and subways. The PWA was intended for recovery, not relief (like the WPA), however, and its effects were slow to be felt in the economy. The third important recovery measure passed during the Hundred Days was the Tennessee Valley Authority Act of 1933. This act created the Tennessee Valley Authority (TVA), a public corporation that was authorized to harness and conserve the potential of the Tennessee River. The TVA built dams and electrical generating plants to produce electrical power and reduce flooding, while also beginning forest and land conservation programs. Once implemented, the TVA's dams provided cheap electricity to impoverished areas in seven states served by the river, encouraging industrial development. The lakes created by the dams created recreation and tourist industries in the area. Word Definition Reform The last aspect of the New Deal was reform. Congress improved government regulation of banks and the stock market. The Glass-Steagall Act of 1933 strengthened the banks by creating the Federal Deposit Insurance Corporation (FDIC). The act guaranteed individual bank deposits up to $5,000. It also dealt with one of the underlying causes of bank instability by dividing bank functions among different types of banks. The functions of commercial banking (that is, handling checking and savings accounts) were ordered to be separate from those of investment banking (that is, issuing and distributing stock). This act made the banking system more secure. There were other wide-ranging reforms. The Securities and Exchange Commission, established in June 1934, regulated the stock market. Congress passed the Social Security Act in 1935. This act created a permanent old-age pension and also provided benefits to dependent children, the disabled, and other deserving groups of people. The 1935 National Labor Relations Act (also known as the Wagner Act) granted labor the right to organize and bargain collectively. The 1938 Fair Labor Standards Act regulated the number of work hours and established a minimum wage for workers involved in interstate commerce.