American History The Great Depression

The Great Depression ~ Lesson 3 The New Deal

In 1932 Franklin D. Roosevelt was elected President.  He received 23 million votes while Hoover got fifteen million. When Roosevelt took office on March 4, 1933 he said, "The only thing we have to fear is fear itself."

Roosevelt felt the government should have a say in how business is carried on. He wanted laws to control business and help the people. He called it social legislation. Others called it the New Deal.

The first set of laws was to declare a Bank Holiday. Banks were closed for a short time to recover. Roosevelt went on the radio in what he called a Fireside Chat. He told people he had closed the banks to help them. He asked people to leave their money in the banks as long as possible. People listened to Roosevelt. The bank panic ended.

Roosevelt had three goals for his New Deal.

  1. Help the people hurt by the Depression

  2. Bring the U.S. out of the Depression

  3. Make changes for the better

In the first 100 days after Roosevelt was in office Congress passed many laws needed to get this done. They were:

  1. The government lent banks money.

  2. Money in banks was insured.

  3. The government helped the farmers by lending them money.

  4. The government controlled the prices of farm products.

Not everything Roosevelt tried worked. The National Recovery Act (NRA) was passed in June of 1933. This was to help people by cutting down the number of hours a person could work, so more could be hired. The law set a minimum wage. The NRA tried to bring the prices of goods down. The NRA  did not work because there was no way to set limits for production in every business. In 1935 the Supreme Court found the NRA unconstitutional.

The Agricultural Adjustment Act of 1933 paid farmers to not plant certain crops including corn, wheat, cotton, rice, peanuts, and tobacco on part of their land and to kill off excess livestock. The purpose was to reduce crop surplus, thereby raising the value of crops. This act was declared unconstitutional in 1936.

CCC Men at Work Building a Road

CCC Men at Work Building a Road

The Civilian Conservation Corps (CCC) began in 1933. The CCC offered outdoor work to unemployed men between the ages of 18 to 25. They planted trees, cleared brush, and made reservoirs. They were given rooms, food, and a salary of $30 a month.

The Works Progress Administration (WPA) was an agency that tried to put out-of-work people back to work. They built roads, schools, wrote books, painted pictures and worked in hospitals and libraries. From 1935 to 1943 the WPA built 651,087 miles of road; and constructed, repaired, or improved 124,031 bridges, 125,110 public buildings, 8,192 parks, and 853 airport landing fields.

1942 photograph of carpenter at work on Douglas Dam, Tennessee

1942 photograph of carpenter at work on Douglas Dam, Tennessee (TVA)

The Tennessee Valley Authority (TVA) was set up in 1933. The TVA built dams to supply electricity and water and to stop floods.
The Federal Deposit Insurance Corporation (FDIC) is a U.S. government corporation created by the Banking Act of 1933. The FDIC provides deposit insurance up to a set amount. 

Insurance Limits

  • 1934 – $2,500
  • 1935 – $5,000
  • 1950 – $10,000
  • 1966 – $15,000
  • 1969 – $20,000
  • 1974 – $40,000
  • 1980 – $100,000
  • 2008 – $250,000

 

The Social Security Actwas passed in 1935. This took care of the sick and the old.
The Social Security Act

 

The Unemployment Insurance Act in 1935 made it possible for states to give money to the people who were out of work.

The Subsistence Homesteads Division (DSH or SHD) was a New Deal agency designed to help the urban poor. Families were given a homestead with a house, outbuildings, and a small plot of land.  To get the homestead a family member must have a part-time job. The plot of land was to be used to grow food for the family.

Subsistence Homesteads Division

Cumberland Homesteads in Tennessee is one of the communities developed by the SHD. It was to help farmers, coal miners, and factory workers in the area. After World War II, the government  no longer supported this project. 

Several hundred of the sandstone buildings were added to the National Register of Historic Places in 1988.

Roosevelt's New Deal programs built or renovated 13,000 parks.  The Great Smoky Mountains National Park between Tennessee and North Carolina was chartered by the United States Congress in 1934 and dedicated by President Roosevelt in 1940. It was the first national park whose land was paid for in part by federal funds. Other parks were funded by state money and private funds.

By 1937 the U. S. Economy was almost back to where it had been. The Depression ended with the Second World War in 1939 - 1940.

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