The New Deal

By early 1933 unemployment had peaked at about 25 percent, two of every five banks open in 1929 had closed, and private charities were overwhelmed. Roosevelt had promised bold experimentation. In his inaugural address on March 4, 1933, he declared that “the only thing we have to fear is fear itself.”

Roosevelt drew on Progressive traditions and on his experience as governor of New York, where his relief agency had provided work and aid to one in ten families. He assembled a “Brain Trust” of academic advisers and recruited reformers such as Frances Perkins, who became the first woman cabinet secretary.

The First Hundred Days (1933). Roosevelt declared a national bank holiday and pushed the Emergency Banking Act through Congress. On March 12 he gave the first of his radio “fireside chats,” and when banks reopened, deposits outpaced withdrawals. The Glass-Steagall Act created federal deposit insurance (the FDIC) and separated commercial from investment banking. The Civilian Conservation Corps put young men to work on conservation projects; the Federal Emergency Relief Administration funded state relief; the Tennessee Valley Authority built dams to control floods and generate cheap electricity; the Agricultural Adjustment Administration paid farmers to limit production and raise prices; and the National Industrial Recovery Act created the National Recovery Administration, which supervised more than 500 industry codes of fair competition.

The Second New Deal (1935–1936). After the Supreme Court struck down the NRA’s code system in Schechter Poultry Corp. v. United States (1935), and facing critics like Senator Huey Long, who demanded “Share the Wealth,” Roosevelt pushed further. The Works Progress Administration employed millions building roads, bridges, schools, and post offices — and painting murals and recording oral histories. The Wagner Act protected workers’ right to organize unions, and the Social Security Act created old-age pensions and unemployment insurance.

The end of the New Deal (1937–1939). After a landslide reelection in 1936, Roosevelt proposed adding a justice to the Supreme Court for each sitting justice over seventy. The “court-packing” plan failed, though the Court thereafter upheld New Deal laws. Spending cuts triggered a sharp recession in 1937, and a conservative coalition of Southern Democrats and Republicans gained strength in the 1938 elections. The Fair Labor Standards Act of 1938, creating the minimum wage, is often considered the last major New Deal law.

The New Deal brought relief to millions and stabilized banking, but it did not end the Depression: unemployment was still in double digits in 1940. Its benefits were unequally shared. To keep the support of Southern Democrats, Roosevelt refused to back anti-lynching legislation, and many programs excluded farm and domestic workers — the jobs held by most Black Southerners. AAA payments led landowners to push Black tenants and sharecroppers off the land. Many programs assumed that men were breadwinners, steering women into lesser, means-tested relief.

After the New Deal, Americans came to see the federal government as an ally in finding work, earning a fair wage, and organizing a union. Voter turnout jumped in 1932 and 1936, and the newly mobilized voters, together with the New Deal coalition of liberals, urban workers, farmers, and white Southerners, kept Democrats dominant into the 1960s. Programs such as Social Security, deposit insurance, the minimum wage, and federal protection for unions remain part of American life, and the New Deal’s battle lines still shape debates about the role of government.