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New Deal

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The New Deal was a massive series of reforms in the United States. It took place between 1933 and 1938. These reforms addressed the Great Depression. This was a period of severe economic collapse.

Real GDP of the United States from 1910-1960
Real GDP of the United States from 1910-1960

President Franklin D. Roosevelt led this effort. He believed the government must intervene to stabilize the economy. He argued that market instability and low demand caused the crisis. His plan changed the relationship between the government and its citizens.

Before the New Deal, the United States lacked a national safety net. There was no public unemployment insurance or Social Security.

US Unemployment from 1910-1960
US Unemployment from 1910-1960

Between 1929 and 1933, manufacturing output dropped by one third. Prices fell by 20 percent, causing deflation. This made it very hard for people to repay debts. Unemployment rose from 4 percent to 25 percent. Many people also lost their bank savings when banks failed.

American union bank
American union bank

Without government guarantees, many depositors lost access to their money.

The First New Deal focused on the "3 R's." These were relief, recovery, and reform. Relief provided immediate aid to the poor and unemployed. Recovery aimed to bring the economy back to normal levels. Reform sought to fix the financial system to prevent future depressions.

Franklin-roosevelt
Franklin-roosevelt

Roosevelt signed the Emergency Banking Act to restore confidence. This led to the 1933 Banking Act. This act created the Federal Deposit Insurance Corporation, or FDIC. The FDIC was designed to insure bank deposits permanently.

During this first stage, the government created several "alphabet agencies." The National Recovery Administration, or NRA, helped industries create fair competition codes. The Securities and Exchange Commission, or SEC, protected investors from abusive stock practices.

NewDealNRA
NewDealNRA

The Agricultural Adjustment Administration, or AAA, helped raise rural incomes by controlling production. To provide jobs, the government started public works projects. The Civilian Conservation Corps, or CCC, hired young men for manual labor. The Tennessee Valley Authority, or TVA, promoted electricity in the Tennessee River basin.

TVA water supply Wilder
TVA water supply Wilder

The Second New Deal began in 1935. It focused more on job creation and protecting vulnerable groups. The Works Progress Administration, or WPA, became a massive employer. It supervised the construction of bridges, libraries, and parks.

Wpa1
Wpa1

The WPA also invested in the arts. The National Labor Relations Act guaranteed the right of employees to organize unions. The Social Security Act was also introduced during this time. It provided pensions for seniors and benefits for the disabled and unemployed.

SocialSecurityposter1
SocialSecurityposter1

New laws also addressed working conditions. The Fair Labor Standards Act of 1938 was a major piece of legislation. It prohibited oppressive child labor. It also established a national minimum wage. Additionally, it created a 40-hour work week for most workers.

New York City municipal airports, WPA poster, ca. 1937
New York City municipal airports, WPA poster, ca. 1937

However, the New Deal faced significant political opposition. The Supreme Court declared the NRA and parts of the AAA unconstitutional. By 1938, a conservative coalition in Congress began blocking new legislation. This coalition included Republicans and conservative Democrats.

The New Deal caused a major political realignment. It created the "New Deal coalition" for the Democratic Party. This group included labor unions and blue-collar workers. It also included racial minorities, such as African Americans. It included white Southerners and intellectuals. This coalition dominated many presidential elections until the 1960s. While historians debate its total effectiveness, most agree full employment required World War II.

US Manufacturing Employment Graph - 1920 to 1940
US Manufacturing Employment Graph - 1920 to 1940

Many New Deal agencies remain active today. The SEC and the Social Security System are still vital parts of American life.

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🖼️ Images & Media (23)
File:Real GDP of the United States from 1910-1960.svg
Real GDP of the United States from 1910-1960.svg
File:US Unemployment from 1910-1960.svg
US Unemployment from 1910-1960.svg
File:Editorial cartoon mocking FDR's "Alphabet agencies".jpg
Editorial cartoon mocking FDR's "Alphabet...
File:American union bank.gif
American union bank.gif
File:Franklin-roosevelt.JPG
Franklin-roosevelt.JPG
File:PWAPBD restored.jpg
PWAPBD restored.jpg
File:TVA water supply Wilder.gif
TVA water supply Wilder.gif
File:NewDealNRA.jpg
NewDealNRA.jpg
File:US Manufacturing Employment Graph - 1920 to 1940.svg
US Manufacturing Employment Graph - 1920...
File:Roanoke,_Virginia_HOLC_Redlining_Map.jpg
Roanoke,_Virginia_HOLC_Redlining_Map.jpg
File:SocialSecurityposter1.gif
SocialSecurityposter1.gif
File:New York City municipal airports, WPA poster, ca. 1937.jpg
New York City municipal airports, WPA...

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