Roosevelt and the First New Deal, including the Hundred Days, banking reform, relief programs, and the recovery agencies

What this dot point is asking

NESA expects you to give an integrated account of the First Hundred Days of the Roosevelt administration and to weigh the economic and political achievements of the First New Deal. Strong answers integrate the banking emergency, the relief programs, the recovery agencies (AAA, NRA), the structural reforms (FDIC, SEC, TVA), and the historiographical debate over coherence and effectiveness.

The answer

The inauguration

Roosevelt was inaugurated on 4 March 1933. (The Twentieth Amendment, ratified 23 January 1933, moved the inauguration to 20 January from 1937 onwards.) The economy was at the bottom. Unemployment was around 25 per cent. Banks in every state had been closed by emergency proclamation. Industrial production was around 54 per cent below its 1929 peak.

The inaugural address asserted that "the only thing we have to fear is fear itself" and signalled that "broad executive power to wage a war against the emergency" would be requested.

Congress was overwhelmingly Democratic (59 to 36 in the Senate, 313 to 117 in the House) and willing to delegate. The First Hundred Days (9 March to 16 June 1933) saw 15 major Acts passed in 100 days, the most concentrated burst of legislation in American history.

Banking and finance

The Emergency Banking Act (9 March 1933). Passed in eight hours, it authorised the Treasury to inspect banks and reopen sound ones, made hoarding of gold illegal, and gave the Federal Reserve power to issue currency on bank assets.

The first fireside chat (12 March 1933, "On the Banking Crisis"). Roosevelt explained on radio (around 60 million listeners) what depositors should expect. Banks reopened on 13 March; by 15 March around 75 per cent of Federal Reserve member banks were operating with public confidence restored.

The Securities Act (27 May 1933). Imposed federal disclosure on new securities issues. The Securities Exchange Act (6 June 1934) created the Securities and Exchange Commission and regulated trading.

The Glass-Steagall Banking Act (16 June 1933). Separated commercial banking from investment banking and created the Federal Deposit Insurance Corporation, insuring deposits up to 2,500 dollars (raised to 5,000 in 1934).

Going off gold. Executive Order 6102 (5 April 1933) banned private holding of gold above 100 dollars in value. The Gold Reserve Act (30 January 1934) devalued the dollar to 35 dollars per ounce, from 20.67. The devaluation increased the dollar value of the gold stock and gave the Treasury room to expand the money supply.

Relief

The Federal Emergency Relief Administration (12 May 1933). Granted 500 million dollars to states under Harry Hopkins (a former social worker from Iowa). FERA worked through state and local agencies, the constraint that had hobbled Hoover.

The Civilian Conservation Corps (31 March 1933). Employed young unmarried men (initially 18 to 25) on reforestation, parks, soil conservation, and flood control. The men lived in army camps, received 30 dollars a month (25 sent home to families), and worked under the Army's logistics direction. Around 3 million served over the CCC's life (1933 to 1942); they planted around 3 billion trees.

The Civil Works Administration (8 November 1933). Hopkins's emergency winter program employed around 4 million Americans on short-term public projects between November 1933 and March 1934. Schools, airports, and roads were built.

Recovery

The Agricultural Adjustment Act (12 May 1933). Paid farmers to reduce production of seven major commodities (wheat, corn, cotton, rice, tobacco, hogs, dairy). The payments were funded by a processing tax on the same commodities. Crop destruction in 1933 (around 10 million acres of cotton, around 6 million piglets) was politically toxic but raised farm prices around 50 per cent by 1936. The Supreme Court struck down the AAA in United States v. Butler (6 January 1936) on the ground that the processing tax was unconstitutional; the Soil Conservation and Domestic Allotment Act (1936) and the second AAA (1938) replaced it.

The National Industrial Recovery Act (16 June 1933). Created the National Recovery Administration under General Hugh Johnson. Industries drew up codes of fair competition setting minimum wages, maximum hours, and price stabilisation. Around 22 million workers were covered by 1934. The Blue Eagle ("we do our part") symbolised participating businesses. Section 7(a) guaranteed collective bargaining, the New Deal's first opening to unions.

The Public Works Administration under Interior Secretary Harold Ickes was funded by Title II of the NIRA with 3.3 billion dollars (about 6 per cent of GDP), eventually building around 34,000 projects including Grand Coulee Dam, the Triborough Bridge, and the aircraft carrier USS Yorktown.

The NRA was found unconstitutional in Schechter Poultry Corp. v. United States (27 May 1935) for excessive delegation of legislative power and for federal regulation of intrastate commerce.

Reform

The Tennessee Valley Authority (18 May 1933). A federal corporation building dams, generating power, controlling floods, and electrifying rural homes across seven states (Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee, Virginia) in the Tennessee River basin. By 1945 it operated around 16 dams and generated more electricity than any private utility. It was the New Deal's clearest regional planning success.

The Home Owners' Loan Corporation (13 June 1933). Refinanced around 1 million home mortgages between 1933 and 1936, with around 3 billion dollars in loans, preventing mass foreclosure. The HOLC also originated the practice of "redlining" Black neighbourhoods.

The Twenty-first Amendment (5 December 1933). Repealed Prohibition. The Cullen-Harrison Act (22 March 1933, in effect 7 April 1933) had re-legalised 3.2 per cent beer.

The brain trust

Roosevelt drew on a cabinet of academics and lawyers without precedent in American government. The "Brains Trust" included Columbia University law professor Raymond Moley, agricultural economist Rexford Tugwell, and lawyer Adolf Berle. Key administrators included:

• Harry Hopkins (FERA, CWA, WPA, eventually Secretary of Commerce).
• Frances Perkins, Secretary of Labor, the first woman in a Presidential cabinet.
• Harold Ickes, Secretary of the Interior and head of the PWA.
• Henry Morgenthau, Secretary of the Treasury from January 1934.
• Henry Wallace, Secretary of Agriculture.

The economic record

Unemployment fell from around 25 per cent (1933) to around 14 per cent (1937). Real GDP rose around 36 per cent from 1933 to 1937. Industrial production regained its 1929 level by 1937. Farm prices rose around 50 per cent from 1933 to 1936.

The recovery was incomplete (unemployment never fell below 14 per cent in the 1930s) and was partly reversed by the "Roosevelt recession" of 1937 to 1938, when Roosevelt and Morgenthau cut spending and the Federal Reserve doubled reserve requirements in an attempt to return to budget balance.

Historiography

Arthur M. Schlesinger Jr. (The Age of Roosevelt, 3 vols, 1957 to 1960) is the founding liberal interpretation; treats the Hundred Days as the birth of modern American government.

Anthony Badger (The New Deal, 1989) is the standard British synthesis.

David Kennedy (Freedom from Fear, 1999) is the Pulitzer-winning narrative.

Alan Brinkley (The End of Reform, 1995) divides the First and Second New Deals and tracks the move from planning to compensation.

Jim Powell (FDR's Folly, 2003) is the major libertarian critique, arguing the New Deal prolonged the slump.

Common exam traps

Treating the New Deal as a single program. The First New Deal (1933) emphasised cooperation and price stabilisation; the Second (1935) emphasised labour, welfare, and progressive taxation.

Forgetting the unconstitutional rulings. The NRA fell in May 1935 and the AAA in January 1936; both were New Deal centrepieces.

Confusing the two FERA / WPA programs. FERA (1933 to 1935) gave grants; the WPA (from 1935) was direct federal employment.

In one sentence

Roosevelt's First Hundred Days (4 March to 16 June 1933) restored banking confidence (Emergency Banking Act of 9 March, first fireside chat of 12 March, Glass-Steagall and the FDIC of 16 June), launched relief (FERA, CCC, and from November 1933 the CWA under Harry Hopkins), attempted recovery through the AAA (12 May 1933) and the NRA (16 June 1933, struck down in May 1935), and built structural reform through the TVA (18 May 1933), the SEC (1934), and the HOLC, achieving a substantial psychological recovery and unemployment back to around 14 per cent by 1937 while leaving the deeper economic problem only partly solved.