Chapter 18 The New Deal Democratic candidateFranklin D. Roosevelt easily defeated Hoover in the election of 1932. FDR promised a “ New Deal”
“First of all, let me assert my firm belief thatthe only thing we have to fear is fear itself”
The New Deal• The New Deal was not based on a clear strategy shaped by a single philosophy. He was not an intellectual—he was just a practical politician. FDR was willing to try a variety of approaches to see what worked.• But the New Deal did change the role of government. It made the government responsible for managing the economy.• This was the beginning of Big Government
First Hundred Days• He pushed through Congress legislation in his first hundred days that would try and solve the depression--setting a precedent for all other presidents to follow.
Fire-side Chats• Within the first week of being in office he called for a Bank Holiday—closed all banks. He then ordered the National Treasury Department print millions of dollars to be sent to the banks. He spoke to the American people via the radio and assured them that it was now safe to put their money back into the banks. When the banks opened the day after the speech, deposits far out weighed withdrawals. The banking crisis was over.
The New Deal can be classified into 3 categories:• Relief—short term action to help people right immediately• Recovery—measures designed to restore the economy• Reform—measures aimed at remedying or fixing defects
Relief• Works Progress Administration (WPA)—paid men to build highways, public building, parks, bridges and airports. Also, artist, musicians and actors were hired.• Tennessee Valley Authority (TVA)—built dams in the Tennessee Valley to control flooding and provide electric power
Civil Conservation Corps (CCC)—paidyoung men to plant trees, build roads, clear forests.
Recovery• National Recovery Act (NRA) –asked businesses to set prices, production limits and wages.
• Agricultural Adjustment Act (AAA)-passed to help farmers, raised prices, the government bought surplus crops.
Reform• Federal Deposit Insurance Corporation (FDIC)- insured bank deposits—restored confidence
• Securities and Exchange Commission (SEC)- created to oversee the stock market and prevent another collapse
• Social Security Act—provided workers unemployment insurance, old age pensions, and death benefits. It was the most important act of the New Deal.