Introduction
During the 1932 summer, Franklin Roosevelt was a New York governor before he was voted as a Democratic Party candidate. In Roosevelt’s acceptance speech, he addressed various challenges caused by depression and offered to formulate a New Deal for Americans. As a result, in the 1932 fall, Roosevelt encountered a landslide victory. The New Deal refers to domestic policies created during Roosevelt’s reign that significantly expanded the role of the federal government in responding to the Great Depression. The New Deal promised to U.S. citizens by Roosevelt began taking shape after his 1933 inauguration. It is divided into two phases: The First New Deal and the Second New Deal. The First New Deal took place between 1933 and 1935 and focused on reform, recovery, and relief agencies. In contrast, the Second New Deal offered further legal reforms on social welfare. The idea of the two phases of the New Deal reflects important shifts in Roosevelt’s approach to the country’s social and economic problems.
The First New Deal
Generally, the First New Deal aimed to stabilize the United States financial system, offer jobs and relief to the suffering, and reenergize U.S.’s capitalist economy. Roosevelt sought to fulfill the latter by forging partnerships between the government and businesses to revive industrial production. The First New Deal was born out of desperation to remedy the U.S.’s worst economic crisis. Unemployment had reached 25 percent and the stock market had crashed, causing a frail industrial performance (Brinkley 27). Therefore, it is essential to review some of the sectors in how the First New Deal affected the U.S. economy.
Finance And Banking
Roosevelt’s immediate plan after his inauguration was to steady the U.S. banking system. He declared a national banking holiday on March 6 to prevent depositors from withdrawing all their money from failing banks. A legislation known as the Emergency Banking Act was enacted and a banking proposal came into effect. Under the strategy, the federal government would inspect all banks and determine which to close, save, or reopen (Brinkley 56). After reassurance, Americans deposited about $1 billion to bank vaults. Roosevelt’s work in banking and finance did not end there.
Roosevelt implemented other legislation related to the financial sector to restore confidence in the industry. He approved the Securities Act in May 1933, which required stockbrokers and corporations to release precise information regarding stocks to all investors. In addition, Roosevelt implemented the Glass-Steagall Act responsible for the creation of the Federal Deposit Insurance Corporation (FDIC), ensuring the safety of average citizens’ savings and restricting the engagement of commercial investment banking. The Securities and Exchange Commission (SEC) was created under the Securities and Exchange Act to regulate financial markets. Furthermore, Roosevelt abolished the gold standard in 1933 and implemented the 1935 Banking Act gave the U.S. a mechanism for central banking. The restructured Reconstruction Finance Corporation and the Federal Housing Administration enabled millions of U.S. citizens to renovate or buy homes easily (Polenberg 52). The reforms allowed most citizens to increase faith in the country’s financial sector.
Jobs And Relief
The First New Deal aimed to solve the starvation crisis and meet the dire needs of the unemployed people. Thus, Roosevelt established various relief programs for the public in 1933. For example, the Federal Emergency Relief Administration (FERA) transferred cash allocations to jobless persons as immediate payments. In addition, the Civilian Conservation Corps (CCC) gave 300,000 jobs to young men in 1200 cleaning beaches, building bridges, and planting trees. The Civil Works Administration spent about $1 billion on infrastructure, including roads and airports but was later discontinued due to capital problems. The three programs provided relief to multitudes of people experiencing outright starvation and offered jobs to Americans not working (Brinkley 113). Roosevelt’s government also made contributions to rural America and agriculture.
Rural America and Agriculture
Roosevelt spearheaded the passage of the Agricultural Adjustment Act (AAA) in 1933 to reduce imperfections in agriculture and rural America. Overproduction led to gluts in the market, causing a drop in prices which resulted in reduced farmers’ incomes. The AAA was to inflate the incomes of the farmers through cash incentives to cut production. The crops covered were tobacco, rice, hogs, cotton, wheat, corn, and other commodities. Although farm income increased, large-scale plantation owners benefited the most. Roosevelt wanted to decrease poverty in rural places and as a result, he instructed the Farm Credit Association to lent more than $1 billion to avoid farm foreclosure. The Farm Security Administration allowed tenant farmers to purchase farms and build contemporary labor camps. On the other hand, the Rural Electrification Administration (REA) supplied electricity to millions of Americans in rural homes. Through the initiative, the Tennessee Valley Authority (TVA) provided electricity, roads, and stable employment to millions of rural homes (Brinkley 97). TVA restored the hillsides eroded by human activities and collaborated with the Soil Conservation Service to train farmers on the proper cultivation methods.
Reviving American Industry
Due to the depression, Roosevelt wanted to help revive the American industry. The National Industrial Recovery Act was passed in 1933 to facilitate economic planning. It was made up of two agencies: The National Recovery Administration (NRA) and the Public Works Administration (PWA). PWA had $3 billion to spend on public works such as Triborough Bridge and Golden Gate Bridge (Brinkley 317). Such activities would stimulate the economy, create jobs, and generate profits from different orders.
The Second New Deal
Roosevelt realized that the First New Deal was not perfect in terms of social welfare; thus, he sought to refine existing policies. The Second New Deal builds on the First New Deal but its programs and reforms deviate from the early emergency mode to reflect bolder attitudes. The Supreme Court had ruled most of the programs in the First New Deal unconstitutional forcing Roosevelt to focus more on social justice. Thus, pro-labor reforms were promoted to increase worker protections and build lasting financial security for U.S. citizens (Polenberg 15). Ultimately, the Second New Deal aimed to provide the minimum economic and social protection for every American.
Primary initiatives that highlighted the Second New Deal include the Social Security Act, the Wagner-Connery National Labor Relations Act, Fair Labor Standards Act, and the Works Progress Administration (WPA). Congress finalized the approval of the Emergency Relief Appropriation Act, which created the WPA. The WPA’s sole focus was giving jobless Americans employment opportunities. Three million U.S. citizens were receiving checks to build airports, hospitals, and schools. Furthermore, WPA money was provided to pursue cultural projects in history, literature, music, and theater. In collaboration with PWA, WPA transformed lands into meaningful sceneries such as the La Guardia Airport and the Miami Orange Bowl. The National Youth Organization also helped train and employ thousands of young men, enabling them to attend college. The Wagner-Connery Labor Relations Act gave labor unions the right to bargain and organize themselves collectively. The legislation curbed the use of unfair working practices by employers such as denying unionized workers jobs (Brinkley 200). Due to the Wagner-Connery Labor Relations Act, union membership had increased to multitudes of people in the second world war.
Finally, Roosevelt approved the 1935 Social Security Act, which shows the singular focus of the Second New Deal to improve citizens’ social welfare. Congress had stalled the bill but passed upon Roosevelt’s insistence. After it passed, multiple programs came into existence, including employment insurance and financial support for the elderly, disabled, and dependent minors. In addition, the 1938 Fair Labor Standards Act established minimum wage and restricted the hours workers could perform their job duties before they get paid overtime (Brinkley 217). Collectively, the programs show commitment to enhancing the social welfare in the U.S.
Conclusion
In conclusion, the phases of the New Deal show evolving ideologies in Roosevelt’s government. The First New Deal focuses on addressing plummeting industrial performance, unemployment, and banking crisis. It allowed Roosevelt to restore consumer confidence in financial markets. Furthermore, the First New Deal handled finance and banking, jobs and relief, rural America and Agriculture, and the resuscitation of the American industry. The major legislations of the First New Deal are AAA, TVA, and the Emergency Banking Act. In contrast, the Second New Deal aimed to increase the protection of workers and create a lasting financial refuge for U.S. citizens. Notable legislation in the Second New Deal includes WPA, the Social Security Act, and the Wagner-Connery National Labor Relations Act. The boundaries between the Second and the First New Deal should be considered porous since significant continuities exist between the First and Second New Deal.
Works Cited
Brinkley, Alan. The Endof Reform: New Deal Liberalism in Recession and War. Vintage, 1996.
Polenberg, Richard D. The Era of Franklin D. Roosevelt, 1933-1945: A Brief History with Documents. Macmillan, 2000.