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The New Deal

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NEW DEAL New Deal, the phrase, never exactly defined, that became the label for the antidepression measures of Franklin D. ROOSEVELT's first two terms as president. In accepting the DEMOCRATIC presidential nomination in 1932, Gov. Roosevelt of New York told the cheering delegates, "I pledge you, I pledge myself, to a new deal for the American people." To Roosevelt's admirers the New Deal signified the most imaginative burst of federal domestic legislation in U.S. history. To his critics it was a miscellany of alphabetical agencies that failed to end the Great Depression. When Roosevelt took office in March 1933, the nation faced an economic crisis. Most of the country's banks, weakened by withdrawals of funds by frightened depositors, were closed. Between 13 and 15 million people were unemployed. To attack this crisis, Roosevelt thought, he would have to experiment in order to find the most practical approaches. For this reason his New Deal program lacked a consistent economic philosophy. It was opportunistic rather than theoretical in its approach to problems. But it was consistent in some ways. It possessed humanitarian goals, openness to new ideas, and a willingness to expand federal powers to achieve its ends. It proposed to provide relief for the needy, recovery for the nation at large, and long-range reform of some economic institutions. Relief Policies The relief policies of the New Deal led to the establishment of a host of administrative agencies between 1933 and 1935. ...read more.


These set guidelines for pricing and production and guaranteed labor the rights of collective bargaining, minimum wages, and maximum hours. After a quick start, the NRA lost its effectiveness. Union spokesmen complained that the courts negated the labor guarantees. Progressives protested that monopolies were exempted from antitrust prosecution. Small businessmen asserted that the codes favored large corporations. By 1934 evasion of the codes was widespread, and industrial recovery was sluggish. In 1935 the U.S. Supreme Court declared the NRA unconstitutional, holding that the code-making provisions constituted an unwarranted transfer of legislative authority to the president. The PWA, which had an initial appropriation of $3.3 billion, helped build scores of courthouses, sewage plants, bridges, hospitals, and city halls in the 1930s. In a limited fashion it constructed public housing for the poor. Secretary of the Interior Harold Ickes, its director, disbursed huge sums of money without causing a breath of scandal. Yet Ickes' caution in spending funds made the PWA a poor engine for recovery. Instead of pumping money quickly into the economy, he held it back until he was certain that it would be wisely used. Increased purchasing power, essential for prosperity, was therefore slow to develop. Limited Gains for the New Deal Despite the limitations of the New Deal relief and recovery programs, the economy recovered slightly between 1933 and 1936. Expecting further progress, the voters returned Roosevelt to office in 1936. ...read more.


This was the most important social change of the decade. Another lasting accomplishment of the New Deal was the Social Security Act of 1935. This law, long sought by reformers, involved the federal government in programs of old-age pensions, unemployment insurance, and assistance to needy blind and disabled persons, and to dependent children. The law was conservative in many ways: regressive payroll taxes paid for old-age pensions; many workers were not covered; and states were expected to provide most of the money for the blind, disabled, and dependent. Nonetheless, the Social Security Act became a basis for later expansion of federally assisted social services. Legacies of the New Deal The New Deal also helped to change politics and political institutions. Democrats, previously an awkward coalition of disparate elements, became the proponents of urban liberalism and swept to power in much of the North and Midwest. Afterward, the Democratic Party enjoyed majority status in the United States. Under the New Deal the executive branch, and the presidency in particular, also became much more activist and innovative than before. The states and localities themselves grew in the course of administering federal programs and appropriating funds for matching-grant programs. Interest groups, which were already strong before 1933, broadened their lines of contact with these expanding governmental entities. In these ways the New Deal, though of dubious value economically, set in motion long-range trends toward governmental expansion and modernization. ...read more.

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