The New Deal

In October of 1929, the crash of the Wall Street stock market marked the beginning of the Great Depression. For the next decade, the people of the United States would suffer from poverty, extremely high rates of unemployment, low income for farmers, prices dropping (deflation) and major declines in economic growth and opportunities. Banks would close and people were starving. There seemed to be little hope of recovery and very little belief in a prosperous future. Then in 1932 Franklin D. Roosevelt was elected president and he immediately set out to lead the U.S. out of this depression by devising a plan called the New Deal. It was to be implemented between 1933 and 1936 and its main focus was on, what historians called, the 3 R’s: Relief, Recovery and Reform. In short, Relief was intended to help the poor and unemployed, Recovery was to return the economy to normal levels and Reform was intended to structure the financial systems so that a depression would be prevented in the future. One of the significant outcomes of the New Deal was a shifting of political control and influence from Republican (conservative) to Democratic (liberal) which would last until the late 1960’s. Another was an increase in the government’s involvement in regulating the economy. The New Deal would create a long list of social programs, some of which would be eliminated while others would remain until today. The “First” New Deal in 1933 focused mainly on economic relief by creating jobs and increasing government spending. It concentrated its efforts on many different industries such as banking, railroads and farming. FDR had a great interest in the agricultural industry and wanted to strengthen it and prevent farmers from losing their farms. The “Second New Deal” (1934-1936) promoted labor unions, Works Program Administration relief program, the Social Security Act and programs to help tenant farmers and migrant workers. The final phase created the United States Housing Authority, the Farm Security Administration (1937) and the Fair Labors Standards Act of 1938. This was important because it set minimum wages and maximum hours of work for employees. Many believed that FDR’s Relief programs were successful. Millions of Americans