The First New Deal

Learning Objectives

  • Describe key pieces of legislation included in Roosevelt’s “First New Deal”
  • Describe Roosevelt’s fireside chats

The First Hundred Days

In his first hundred days in office, the new president pushed forward an unprecedented number of new bills, all geared towards stabilizing the economy, providing relief to individuals, creating jobs, and helping businesses. As one historian noted, the president “directed the entire operation like a seasoned field general.” [1] And despite some questions over the constitutionality of many of his actions, Americans and their congressional representatives conceded that the crisis demanded swift and immediate action. A sympathetic Democrat-controlled Congress helped propel his agenda forward.

Watch It

This video highlights Roosevelt’s significant actions and programs in his first 100 days in office.

Roosevelt began his administration with a broad strategy: a combination of relief and recovery programs designed first to save the patient (in this case, the American people) and then to find a long-term cure (reform through federal regulation of the economy). What later became known as the “First New Deal” ushered in a wave of legislative activity seldom seen in the country’s history. By the close of 1933, to stem the crisis, Congress had passed over fifteen significant pieces of legislation—many of the circulated bills allegedly still wet with ink from the printing presses as members voted upon them. Most bills could be grouped around relief, recovery, and reform issues.

Key Programs from the First New Deal

At the outset of the First New Deal, specific goals included the following:

  1. Bank reform
  2. Job creation
  3. Economic regulation
  4. Regional planning

The programs that made up the First New Deal are listed in the table below.

Key Programs from the First New Deal
New Deal Legislation Years Enacted Brief Description
Agricultural Adjustment Administration 1933–1935 Farm program designed to reduce surpluses and increase prices/profits
Civil Works Administration 1933–1934 Temporary job relief program
Civilian Conservation Corps 1933–1942 Employed young men to work in rural areas
Farm Credit Administration 1933-today Low-interest mortgages for farm owners
Federal Deposit Insurance Corporation 1933–today Insure private bank deposits
Federal Emergency Relief Act 1933 Direct monetary relief to poor, unemployed Americans
Glass-Steagall Act 1933 Regulate investment banking
Homeowners Loan Corporation 1933–1951 Government mortgages that allowed people to keep their homes
Indian Reorganization Act 1934 Decreased federal involvement with indigenous groups and increased their self-government autonomy
National Recovery Administration 1933–1935 Industries agree to codes of fair practice to set prices, wages, and production levels.
Public Works Administration 1933–1938 Large public works projects
Resettlement Administration 1933–1935 Resettled poor tenant farmers
Securities Act of 1933 1933–today Created SEC; regulates stock transactions
Tennessee Valley Authority 1933–today Regional development program; brought electricity to the valley

Interactive: The New Deal Legacy

Bank Reform

When Roosevelt took office, he faced one of the worst moments in the country’s banking history. States were in disarray. New York and Illinois had ordered the closure of their banks in the hopes of avoiding further “bank runs,” which occurred when hundreds (if not thousands) of individuals ran to their banks to withdraw all of their savings. Two of every five banks open in 1929 had been shuttered, and some Federal Reserve banks were on the verge of insolvency.[2] 

A sculpture shows a man sitting in a chair beside a radio.

Figure 1. Roosevelt’s “fireside chats” allowed him to speak directly to the American people, and the people were happy to listen. These radio addresses, commemorated at the Franklin D. Roosevelt Memorial in Washington, DC, with this bronze sculpture by George Segal, contributed to Roosevelt’s tremendous popularity. (credit: Koshy Koshy)

Within forty-eight hours of his inauguration, Roosevelt proclaimed an official bank holiday and called Congress into a special session to address the crisis. The resulting Emergency Banking Act of 1933 was signed into law on March 9, 1933, approximately eight hours after Congress first saw it. The law officially took the country off the gold standard, a restrictive practice that, although conservative and traditionally viewed as safe, severely limited the circulation of paper money. Those holding gold were told to sell it to the U.S. Treasury for a discounted rate of over twenty dollars per ounce. Furthermore, dollar bills were no longer redeemable in gold. The law also gave the comptroller of currency the power to reorganize all national banks faced with insolvency, a level of federal oversight seldom seen before the Great Depression. Between March 11 and March 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies swept through the country, examining each bank. By March 15, 70 percent of the banks were declared solvent and allowed to reopen.

Roosevelt’s Fireside Chats

On March 12, the night before select banks reopened under stricter federal guidelines, Roosevelt appeared on the radio in his first Fireside Chats. The addresses, which the president continued delivering through four terms, were informal and personal. Roosevelt used his airtime to explain New Deal legislation, encourage confidence in government action, and mobilize the American people’s support. In the first chat, Roosevelt described the new banking safeguards and asked the public to place their trust and savings in banks. Americans responded, and deposits outpaced withdrawals across the country. While a panic culture had contributed to the country’s downward spiral after the crash, these confidence-inducing Fireside Chats helped build it back up. Consumer confidence returned, and within weeks, close to $1 billion in cash and gold had been brought out from under mattresses and hidden bookshelves and re-deposited in the nation’s banks. The immediate crisis had been quelled, and the public was ready to believe in their new president.

The Power of Hearth and Home

Fireside chats—Roosevelt’s weekly radio addresses—highlighted Roosevelt’s savvy in understanding how best to reach people. Using simple terms and a reassuring tone, he invoked a family patriarch sitting by the fire, explaining to those who trusted him how he was working to help them. It is worth noting how he explained complex financial concepts quite simply but, at the same time, complimented the American people on their “intelligent support.” One of his fireside chats is provided below:

I recognize that the many proclamations from State capitols and from Washington, the legislation, the Treasury regulations, etc., couched for the most part in banking and legal terms, should be explained for the benefit of the average citizen. I owe this in particular because of the fortitude and good temper with which everybody has accepted the inconvenience and hardships of the banking holiday. I know that when you understand what we in Washington have been about I shall continue to have your cooperation as fully as I have had your sympathy and help during the past week. . . .

The success of our whole great national program depends, of course, upon the cooperation of the public—on its intelligent support and use of a reliable system. . . . After all, there is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith; you must not be stampeded by rumors or guesses. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work. It is your problem no less than it is mine. Together we cannot fail.

—Franklin D. Roosevelt, March 12, 1933

A considerable part of Roosevelt’s success in turning around the country can be seen in his addresses like these: He built support and motivated the public. Ironically, Roosevelt, the man who famously said we have nothing to fear but fear itself, had a significant fear: fire. Due to his paralysis, Roosevelt had a fear of being left too close to a fireplace. But he knew the powerful symbolism of the hearth and home and drew on this mental image to help the public view him how he hoped to be seen.

Link to Learning

Visit the American Presidency Project to listen to one of Roosevelt’s fireside chats. What kind of feelings do his language and demeanor evoke?

Try It

In June 1933, Roosevelt replaced the Emergency Banking Act with the more permanent Glass-Steagall Banking Act. This law prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits. This law also created the Federal Deposit Insurance Corporation, or FDIC, which insured personal bank deposits up to $2,500 and is still a functioning agency today. Other measures designed to boost confidence in the overall economy beyond the banking system included the passage of the Economy Act, which fulfilled Roosevelt’s campaign pledge to reduce government spending by reducing salaries, including his own and members of Congress. He also signed into law the Securities Act, which required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds. Roosevelt also sought new revenue through the Beer Tax. As the Twenty-First Amendment, which would repeal the Eighteenth Amendment establishing Prohibition, moved towards ratification, this law authorized the manufacture of 3.2 percent beer and levied a tax on it.

Job Creation

Immediate Relief: Employment for the Masses

Even as he worked to rebuild the economy, Roosevelt recognized that the unemployed millions required jobs more quickly than the economy could provide. In a push to create new jobs, Roosevelt signed the Wagner-Peyser Act, creating the United States Employment Service, which promised states matching funds if they created local employment opportunities. He also authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA). This money went directly to states to infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed. These two bills illustrate Roosevelt’s dual purposes of providing short-term emergency help and building employment opportunities that would strengthen the economy in the long term.

A photograph shows a group of CCC workers building a canal.

Figure 2. The CCC put hundreds of thousands of men to work on environmental projects around the country. Some call it the beginning of the modern environmentalist movement in the United States.

Long Term Work Solutions

Roosevelt was aware of the need for immediate help, but he knew job creation would provide a long-term solution. FERA overseer Harry Hopkins, who later was in charge of the Civil Works Administration (CWA), shared this sentiment. The CWA, founded in early 1933, put millions of men and women to work. At its peak, some four million Americans were repairing bridges, building roads and airports, and undertaking other public projects. Another work program was the Civilian Conservation Corps Relief Act (CCC). The CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families. They would earn thirty dollars per month planting trees, fighting forest fires, and refurbishing historic sites and parks, building an infrastructure that families would continue to enjoy for generations to come. Within the first two months, the CCC employed its first 250,000 men and eventually established about twenty-five hundred camps.

Economic Help for Homeowners

The final element of Roosevelt’s efforts to provide relief to those in desperate straits was the Home Owners’ Refinancing Act. Created by the Home Owners’ Loan Corporation (HOLC), the program rescued homeowners from foreclosure by refinancing their mortgages. Not only did this save the homes of countless homeowners, but it also saved many of the small banks that owned the original mortgages by relieving them of that responsibility. Later, New Deal legislation created the Federal Housing Authority, which eventually standardized the thirty-year mortgage and promoted the housing boom of the post-World War II era. A similar program, designed through the Emergency Farm Mortgage Act and Farm Credit Act, provided the same service for farm mortgages.

This American Experience

In this American Experience interview, Neil Maher, author of Nature’s New Deal: The Civilian Conservation Corps and Roots of the Modern Environmental Movement, provides a comprehensive look into what the CCC offered the country—and the president—on issues as diverse as economics, race, and recreation.

Watch It

The following clip is from President FDR’s fourth Fireside Chat, in which he describes his plans to bring relief to homeowners and mortgage payments and stabilize the currency.

Try It

Glossary

Civilian Conservation Corps: a public program for unemployed young men from relief families who were put to work on conservation and land management projects around the country

Civil Works Administration: a temporary job relief program

Civilian Conservation Corps Relief Act: the CCC provided government jobs for young men aged fourteen to twenty-four who came from relief families

Emergency Banking Act of 1933: in response to the banking crisis, this law officially took the country off the gold standard and gave the comptroller of currency the power to reorganize all national banks faced with insolvency.

Federal Deposit Insurance Corporation: the FDIC was created by the Glass-Steagall Banking Act and insured personal bank deposits up to $2,500 and is still a functioning agency today

Federal Emergency Relief Act: Roosevelt authorized $500 million in direct grants through the Federal Emergency Relief Act (FERA).

Glass-Steagall Banking Act: legislation that prohibited commercial banks from engaging in investment banking, therefore stopping the practice of banks speculating in the stock market with deposits

Home Owners’ Refinancing Act: this program rescued homeowners from foreclosure by refinancing their mortgages

The Securities Act: required full disclosure to the federal government from all corporations and investment banks that wanted to market stocks and bonds

United States Employment Service: promised states matching funds if they created local employment opportunities

  1. Leuchtenburg, Franklin D. Roosevelt and the New Deal ↵
  2. Eric Rauchway, Winter War: Hoover, Roosevelt, and the First Clash over the New Deal (New York: Basic Books, 2018), 140. ↵