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The New Deal
Transcript of The New Deal
Leading up to the New Deal
2 days after Franklin D. Roosevelt was in office, he declared a national bank holiday.
All banks closed down. People could not deposit money, take out money, transfer money, etc.
Banks were divided into four categories.
1- Fit to reopen (about 50%)
2- A percentage of deposits could be withdrawn
3- Banks close to closing - after the bank holiday they could only accept deposits.
4- Unfit to continue business (5%)
FDR began giving fireside chats at the beginning of his presidency. He was (and still is) famous for this! He gave a fireside chat the night before the banks reopened reassuring Americans that their money would be safe kept in a bank.
The new deal came about during FDR's famous first one hundred days in office. This was his plan to fight the great depression, and included many different programs that would help alleviate the pressure of the depression. There were three main goals of the New Deal... "the three R's."
Goal #1 - Relief
Relief: FDR wanted to give immediate aid to the needy. He did this by establishing:
The national bank holiday
Emergency Banking Act (which tied in with the national bank holiday.. it closed banks that needed to be closed and helped keep others open).
Federal Emergency Relief Act (FERA) - Gave immediate help to those in need through cash payments.
Civil Works Administration - gave temporary jobs to people by helping rebuild roads, bridges, etc.
Goal #2 - Recovery
Recovery: FDR wanted to boost industry and farming by providing temporary jobs, controlling production and keeping workers on the job.
Agricultural Adjustment Act - issued a tax to food processors which went straight to farmers to help pay for their lack of crops.
Home Owners Loan Corporation - gave loans to homeowners so they could pay their mortgage.
Works Progress Administration (WPA) - provided government jobs building schools and other public works projects.
Tennessee Valley Authority (TVA) - Created to build dams in the Tennessee river valley.
The Second New Deal
Unfortunately, the depression continued, so FDR came up with a Second New Deal which called for more aggressive action. Still, things did not improve as much as needed, and their became a big "anti-Roosevelt sentiment" in America.
Goal #3 - Reform
Reform: FDR wanted to bring things back to normal with lasting conditions and change for the better.
Securities and Exchange Commission (SEC) - established to monitor the stock market
Federal Deposit Insurance Corporation (FDIC) - established to insure people's money would be safe in savings banks.
Social Security Administration - set up to make sure that the elderly always had money to survive
National Labor Relations Act and National Labor Relations Board - helped and unions and enforced labor laws