The New Deal

America was suffering in the Great Depression, and it seemed that there would never be a solution. Businesses and banks failed and by 1933 only about half as many people were working as had been in 1926. There was a major economic catastrophe.  In 1933, there came a solution, known as the New Deal.

The New Deal was a series of economic programs implemented in the country which lasted until 1936. They were passed by the US Congress during the term of President Roosevelt. Roosevelt wanted to transform America’s economy which had been shattered by the crash.

These programs were responses to the Great Depression, and focused on the “3Rs”; relief, recovery and reform. That is, Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression.

Historians distinguish a "First New Deal" (1933) and a "Second New Deal" (1934–36). The "First New Deal" dealt with diverse groups, from banking and railroads to industry and farming, all of which demanded help for economic recovery. A "Second New Deal" in 1934-36 included the Wagner Act to promote labor unions, the Works Progress Administration (WPA) relief program, the Social Security Act, and new programs to aid tenant farmers and migrant workers.

Roosevelt started gaining money. On March 15^th, 1933 he asked the congress to pas the Economy Act. This cut the pay of everybody who worked for the government and the armed forces by 15 per cent. Government departmental spending was also cut by 25 per cent. The saved money, which was about 1 billion dollars, was to go towards financing the New Deal. On March 20th 1933, Roosevelt asked Congress to pass the Beer Act. The sold beer would raise income for the government by tax and it would also introduce a fee-good factor in that perfectly normal people who wanted an alcoholic drink would no longer be criminalized simply because they wanted a drink.

The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, then the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers and the Agricultural Adjustment Act of 1938.

The New Deal did not end with the Depression, but it did preserve the people’s confidence in America’s institutions and government. The relief measures of the New Deal were considered a success, although not everyone supported it. There was not an actually economic recovery. Many businessmen and financiers did not support the economic measures of the New Deal. The attempt to maintain prosperity during peacetime was not successful at all.

Many Americans however in both rural and urban areas of the nation did support the efforts of the New Deal. Rural electrification, Social Security, insurance of bank accounts, protection for labor unions, and federal controls over the economy gave many a sense of security in the future and in the government.