Spurred by the stock market crash in 1929, the Great Depression began the same year and persisted for a decade. When the Depression slipped to its lowest point, roughly 15 million Americans were unemployed and watched as half of the country’s banks failed in what historians recognize as the worst economic crisis to befall the United States. In an effort to restore the nation’s prosperity, President Franklin D. Roosevelt—inaugurated in 1933—responded to the depression by initiating a series of projects, programs, and regulations, which became known as the New Deal.
Roosevelt, the day after his inauguration, barred people from rapidly withdrawing their money from struggling banks by imposing a four-day bank holiday. On March 9, five days after Roosevelt stepped into his role as president, Congress passed Roosevelt’s Emergency Banking Act, which reorganized banking facilities and closed banks that were heading toward bankruptcy or were already bankrupt. This form of practical intervention began to gradually restore trust in the government.
The New Deal came in two waves: the First New Deal lasted from 1933 until 1934, and Second lasted from 1935 until a year later. With the First New Deal, Roosevelt passed various laws to improve quality of life. He signed the Tennessee Valley Authority Act in May, which enabled the federal government to build dams to control flooding and generate hydroelectric power for people along the Tennessee River. Later that same month, Congress passed a bill that combated agricultural surpluses and raised prices by paying commodity farms to leave their fields unsown.
In addition to rural and agricultural projects, Roosevelt implemented the Civilian Conservation Corps in 1933. The work relief program lasted nearly a decade, providing young, unmarried men who had become a financial burden on their families during the Great Depression an opportunity to pursue unskilled manual labor jobs that furthered the conservation and development of national resources in federal, state, and local government-owned lands. Throughout its operation, the CCC provided 3 million young men with food, clothing, shelter, and wages each month.
Along with the aforementioned acts, Roosevelt also passed the National Industrial Recovery Act (NIRA) in June. This act guaranteed workers the right to unionize and bargain for better working conditions and higher wages, spurring a significant jump in labor union membership. (As a result of this act, more than 12 million workers belonged to unions at the end of World War II.) In addition to suspending antitrust laws, NIRA also established the Public Works Administration, which funded the construction of more than 34,000 public projects.
During this first wave, Roosevelt passed more than 12 major laws within his first 100 days in office.
In 1935, the Great Depression continued to persist with a feeble economy and unremitting unemployment. Roosevelt launched the Second New Deal, a more aggressive series of programs, to provide relief to economic problems in America. Roosevelt created the Works Progress Administration (WPA)—renamed the Works Projects Administration in 1939—which, unlike the Public Works Administration, provided jobs and income by directly hiring unemployed Americans. By employing unskilled men to carry out public infrastructure projects, WPA not only erected fundamental facilities such as hospitals, sewer lines, and bridges, but it also combatted unemployment. In addition to its public projects, the WPA also initiated projects in the arts, employing actors, writers, musicians, and other arts professionals. By 1938, at the height of its implementation, more than 3.3 million Americans worked for the WPA.
Later in 1935, Roosevelt introduced the National Labor Relations Act, which created a National Labor Relations Board to oversee union elections and supervise businesses’ treatment of their workers. The following month, he signed the Social Security Act of 1935, which implemented payroll tax deductions as a means of providing a financial safety net for elderly, disabled, and unemployed Americans.
As a result of pursuing the aggressive approach, the Fair Labor Standards Act was passed in 1938, which supplemented and safeguarded workers’ rights. The act established minimum wages and maximum work hours for most workers, affecting more than 700,000 workers.
The policies of the New Deal actively worked to restore America, responding to economic and political setbacks and assuring the people of the benefits of an interventionist government. While these programs were implemented as a means of relieving the Great Depression, many of them, including social security, for example, are still in place today.