The New Deal was a comprehensive suite of government initiatives introduced by President Franklin Delano Roosevelt, designed to accelerate the recovery of the United States economy from the Great Depression. Initiated in the early 1930s, it aimed to stimulate economic growth, reduce unemployment, establish a social safety net, and restore confidence in the government’s capacity to safeguard its citizens.
Key Takeaways
- The New Deal was a collection of domestic programs launched by President Franklin D. Roosevelt, intended to curb the economic devastation of the Great Depression.
- It also sought to rein in the excesses of unchecked capitalism through policies like setting minimum wages, regulating working conditions, promoting labor unions, and fortifying retirement security.
- The New Deal magnified the government’s role in navigating and stabilizing economic conditions.
Understanding the New Deal
The Stock Market Crash of 1929 began on October 24, a day infamously known as Black Thursday. This event abruptly ended a period of economic growth and led to a domino effect of corporate and bank failures across the United States, propelling the unemployment rate to alarming levels, with nearly a quarter of the workforce jobless.
President Franklin Roosevelt initiated the New Deal upon taking office in 1933, featuring a range of government-funded programs devised to generate employment along with legislation and executive orders supporting farmers and boosting business activity.
The New Deal sparked controversy due to its sweeping reforms and the expanding governmental role in the economy. Significant pieces of the plan, such as the National Recovery Administration (NRA) which set labor conditions and ensured collective bargaining rights, and the Agricultural Adjustment Administration (AAA) aimed at stabilizing farm prices, faced judicial setbacks when declared unconstitutional by the U.S. Supreme Court.
Despite facing opposition, public sentiment largely supported the New Deal, prompting Roosevelt in February 1937 to attempt increasing the number of Supreme Court justices, aiming to safeguard future programs from judicial nullification. Though he failed in ‘court-packing,’ his agenda found success when, in May 1937, the Supreme Court upheld the Social Security Act as constitutional. Thereafter, no other New Deal program faced judicial invalidation.
The New Deal was executed in two waves, the first in 1933 and the second in 1935.
History of the New Deal
The New Deal is traditionally divided into two phases. The initial phase, the
Related Terms: Economy, Great Depression, Stock Market Crash, Social Security Act, Full Employment.
References
- Economic History Association. “The 1929 Stock Market Crash”.
- Library of Congress. “President Franklin Delano Roosevelt and the New Deal”.
- National Archives Catalog. “Department of Agriculture. Agricultural Adjustment Administration. (1933 - 2/23/1942) Organization Authority Record”.
- Library of Congress. “National Recovery Administration (NRA) and the New Deal: A Resource Guide”.
- Federal Judicial Center. “FDR’s Court-Packing Plan”.
- Social Security Administration. “Constitutionality of Social Security Act”.
- Library of Congress. “New Deal Programs: Selected Library of Congress Resources”.
