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In 1933 the new president, Franklin Roosevelt, brought an air of confidence and optimism that quickly rallied the people to the banner of his program, known as the New Deal. "The only thing we have to fear is fear itself, " the president declared in his inaugural address to the nation. Perhaps he should have said the only thing we have to fear is complacency. What was truly unique about the New Deal was the speed with which it accomplished what previously had taken generations. However, many of the reforms were created in haste and weakly executed. And during the New Deal, public reproach and contention were never interrupted or suspended. When Roosevelt took the presidential oath, the banking and credit system of the nation was in a state of collapse.
With astonishing speed the nation's banks were first closed and then reopened only if they were solvent. The administration adopted a policy of moderate currency inflation to start an upward movement in commodity prices and to afford some relief to debtors. New governmental agencies brought generous credit facilities to industry and agriculture. The Federal Deposit Insurance Corporation (FDIC) insured savings-bank deposits up to $ 5, 000, and severe regulations were imposed upon the sale of securities on the stock exchange. In addition to aggressive legislation to corral the failing bank system FDR vigorously attacked unfair business practices. The National Recovery Administration (NRA), established in 1933 with the National Industrial Recovery Act (NIRA), attempted to end cut-throat competition by setting codes of fair competitive practice to generate more jobs and thus more buying.
Although the NRA was welcomed initially, business complained bitterly of over-regulation as recovery began to take hold. The NRA was declared unconstitutional in 1935. By this time other policies were fostering recovery, and the government soon took the position that administered prices in certain lines of business were a severe drain on the national economy and a barrier to recovery. It was also during the New Deal that organized labor made greater gains than at any previous time in American history.
NIRA had guaranteed to labor the right of collective bargaining (bargaining as a unit representing individual workers with industry), while not a new concept it was quite radical. Then in 1935 Congress passed the National Labor Relations Act, which defined unfair labor practices, gave workers the right to bargain through unions of their own choice and prohibited employers from interfering with union activities. It also created the National Labor Relations Board to supervise collective bargaining, administer elections and ensure workers the right to choose the organization that should represent them in dealing with employers. The great progress made in labor organization brought working people a growing sense of common interests, and labor's power increased not only in industry but also in politics.
This power was utilized largely within the framework of the two major parties, however, and the Democratic Party generally received more union support than the Republicans did. In addition to the creation of financial relief FDR sought to create jobs for the millions of unemployed workers. Work relief came in the form of the Civil Works Administration. Although criticized as "make work, " the jobs ranged from ditch digging to highway repairs to teaching.
Created in November 1933, it was abandoned in the spring of 1934. Roosevelt and his key officials, however, continued to favor unemployment programs based on work relief rather than fostering a burgeoning welfare system. One work relief program for the unemployed came in the form of the Civilian Conservation Corps (CCC), a program enacted by Congress to bring relief to young men between the ages of 18 and 25. Run like a military camp, the CCC enrolled jobless young men in work camps across the country paying them about $ 30 per month.
About 2 million young men signed up in six-month increments over a two-year period. They participated in a variety of conservation projects like planting trees to combat soil erosion and maintain national forests, eliminating stream pollution and creating fish and game sanctuaries. The New Deal's revolutionary cornerstone was the Social Security Act of 1935. Social Security created a system of insurance for the aged, unemployed and disabled based on employer and employee contributions.
Social Security was funded in large part by taxes on the earnings of current workers, with a single fixed rate for all regardless of income. To Roosevelt, these limitations on the programs were compromises to ensure passage. Although its origins were initially quite modest, Social Security today is one of the largest domestic programs administered by the U. S. government. In its early years, the New Deal sponsored a remarkable series of legislative initiatives and achieved significant increases in production and prosperity.
While these initiatives did not end the Depression, FDR motivated American workers to take pride in going to work while re-establishing the American economy. FDR addressed these issues in his fireside chat, June 28, 1934 But the simplest way for each of you to judge recovery lies in the plain facts of your own individual situation. Are you better off than you were last year? Are your debts less burdensome? Is your bank account more secure?
Are your working conditions better? Is your faith in your own individual future more firmly grounded? The ideas behind the New Deal were not new, most were simply adaptations of old ideas and long held beliefs. However for the most part, they were effective and did have a direct and significant impact on our lives. The only truly original idea involving the New Deal was the reinvention of American pride. The birth of The United States as a world super-power was the most significant of any action taken during the New Deal years.
Although profound and historical the New Deal can be summed up in one American adage, There are no new ideas. Bibliography:
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