New Deal

Quick Facts: Who was New Deal?

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New Deal

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A series of economic and social reforms enacted by FDR to combat the Great Depression.

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Origins & Early Life

The New Deal was a series of economic, social, and political reforms in response to the Great Depression in the United States under the first and second administrations of President Franklin D. Roosevelt. Following a demand-side economic theory, Roosevelt sought to utilize the authority of the federal government to increase spending and introduce programs to spur growth and combat issues specific to the depression, such as unemployment, labor relations, financial reform, and social welfare. Roosevelt introduced the phrase when accepting the Democratic Party presidential nomination in the 1932 United States presidential election, winning in a landslide over incumbent Herbert Hoover, whose administration was widely viewed as ineffective. Roosevelt attributed the Depression to inherent market instability and inadequate aggregate demand (based on the Keynesian economic model), and argued that stabilizing and rationalizing the economy required massive government intervention. During Roosevelt's first hundred days in office in 1933 until 1935, Roosevelt introduced what historians refer to as the "First New Deal", which focused on the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reforms of the financial system to prevent a repeat depression.

Career & Major Achievements

Roosevelt signed the Emergency Banking Act, which authorized the Federal Reserve to insure deposits to restore confidence, and the 1933 Banking Act made this permanent with the Federal Deposit Insurance Corporation (FDIC). Other laws created the National Recovery Administration (NRA), which allowed industries to create "codes of fair competition"; the Securities and Exchange Commission (SEC), which protected investors from abusive stock market practices; and the Agricultural Adjustment Administration (AAA), which raised rural incomes by controlling production. Public works were undertaken in order to find jobs for the unemployed (25 percent of the workforce when Roosevelt took office): the Civilian Conservation Corps (CCC) enlisted young men for manual labor on government land, and the Tennessee Valley Authority (TVA) promoted electricity generation and other forms of economic development in the drainage basin of the Tennessee River. Although the First New Deal helped many find work and restored confidence in the financial system, by 1935 stock prices were still below pre-Depression levels and unemployment still exceeded 20 percent. From 1935 to 1938, the "Second New Deal" introduced further legislation and additional agencies which focused on job creation and on improving the conditions of the elderly, workers, and the poor.

Enduring Legacy & Impact

The Works Progress Administration (WPA) supervised the construction of bridges, libraries, parks, and other facilities, while also investing in the arts; the National Labor Relations Act guaranteed employees the right to organize trade unions; and the Social Security Act introduced pensions for senior citizens and benefits for the disabled, mothers with dependent children, and the unemployed. The Fair Labor Standards Act prohibited child labor, and enshrined a 40-hour work week and national minimum wage. In 1938, the Republican Party gained seats in Congress and joined with conservative Democrats to block further New Deal legislation, and some of it was declared unconstitutional by the Supreme Court. The New Deal produced a political realignment, reorienting the Democratic Party's base to the New Deal coalition of labor unions, blue-collar workers, big city machines, racial minorities (most importantly African-Americans), white Southerners, and intellectuals. The realignment crystallized into a powerful liberal coalition which dominated presidential elections into the 1960s, as an opposing conservative coalition largely controlled Congress in domestic affairs from 1939 onwards.

Chronological Milestones & Life Events

1. 1932: 1932 Milestone — Roosevelt introduced the phrase when accepting the Democratic Party presidential nomination in the 1932 United States presidential election, winning in a landslide over incumbent Herbert Hoover, whose administration was widely viewed as ineffective.
2. 1933: 1933 Milestone — During Roosevelt's first hundred days in office in 1933 until 1935, Roosevelt introduced what historians refer to as the "First New Deal", which focused on the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reforms of the financial system to prevent a repeat depression.
3. 1935: 1935 Milestone — Although the First New Deal helped many find work and restored confidence in the financial system, by 1935 stock prices were still below pre-Depression levels and unemployment still exceeded 20 percent.
4. 1938: 1938 Milestone — In 1938, the Republican Party gained seats in Congress and joined with conservative Democrats to block further New Deal legislation, and some of it was declared unconstitutional by the Supreme Court.
5. 1939: 1939 Milestone — The realignment crystallized into a powerful liberal coalition which dominated presidential elections into the 1960s, as an opposing conservative coalition largely controlled Congress in domestic affairs from 1939 onwards.

Notable Quotes by New Deal

“The only thing we have to fear is fear itself.” (1933)

Historical Fact-Check Quiz: New Deal

True or False: “The New Deal immediately achieved full employment across the United States in 1933.”

Answer (FALSE ❌): Full employment was not achieved until the United States' entry into World War II in 1941.

Contemporary Figures & Related Historical Timelines

• Abebe Bikila — Historical peer (Born in 1932) (1932): Ethiopian Olympic marathon champion, known for his barefoot victories in Rome and Tokyo.
• Adolfo Suárez — Historical peer (Born in 1932) (1932): Key architect of Spain's transition to democracy, serving as Prime Minister 1976-1981.
• 13th Dalai Lama — Historical peer (Died in 1933) (1933): Spiritual leader of Tibet who championed national independence and modernization.
• Abolhassan Banisadr — Historical peer (Born in 1933) (1933): Iranian politician who served as the first president following the Islamic Revolution.
• 14th Dalai Lama — Historical peer (Born in 1935) (1935): Spiritual leader of Tibet and head of Tibetan Buddhism since 1940.
• Abdou Diouf — Historical peer (Born in 1935) (1935): Senegalese politician who served as President of Senegal from 1981 to 2000.
• Ahmed Mohamed Mohamoud — Historical peer (Born in 1938) (1938): Somaliland politician, served as President from 2010 to 2017.
• Ahn Chang Ho — Historical peer (Died in 1938) (1938): Pioneering Korean independence activist and leader of the Korean-American community.
• Ada Yonath — Historical peer (Born in 1939) (1939): Pioneering crystallographer known for elucidating the structure and function of the ribosome.
• Alan Ayckbourn — Historical peer (Born in 1939) (1939): Prolific British playwright and director known for domestic farce and ensemble pieces.

Frequently Asked Questions about New Deal