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New Deal

New Deal was a national program issued by Franklin Roosevelt that lasted between 1933 and 1938. Its purpose was to offset the effects of the Depression by establishing federal programs of recovery, relief, and reform, or the three R’s, using government intervention and federal money. The idea was to lower unemployment, which had reached an all-time high, restore prosperity and reinstate some of the Progressive ideas that had faded away. The central legacy of the New Deal was increased government involvement in the lives of the American people.

Several government-funded programs were created in the early thirties to aid economic and social dilemmas. The first of these acts was the Emergency Banking Act, which provided for federal bank inspections, and the Glass-Steagall Act provided insurance for depositors through the newly formed Federal Deposit Insurance Corporation, which restored confidence in the banks. Two acts, one in 1933 and one in 1934, ordered detailed regulations for the securities market, enforced by the new Securities and Exchange Commission (SEC). Several bills were passed that provided mortgage relief for farmers and homeowners, such as the Home Owners’ Loan Corporation (HOLC.) which not only bailed out mort


gage-holding banks, it also enhanced the loyalties of the middle class to the Democratic party. The Agricultural Adjustment Act (AAA) provided several means to help raise agricultural prices, but the one most extensively used provided for government payments to farmers who destroyed or did not grow surplus crops. In 1933 the Federal Emergency Relief Administration was established and headed by Harry Hopkins. Its purpose was to expand existing relief grants to the states. The Civilian Conservation Corps (CCC), which proved to be the most popular of all the New Deal agencies, provided work relief for thousands of young men in government camps. The CCC emphasized reforestation, fire fighting, flood control, and swamp drainage thereby conserving human and natural resources.

At the start of Roosevelt’s second term in 1937, some progress had been made against the depression. But there were difficulties for the New Deal. Republicans resented the administration's efforts to control the economy. Unemployment was still high and income was low. The economy plunged again in the Roosevelt recession of 1937, caused by reduced government spending and the new social security taxes. To battle the recession and to stimulate the economy, Roosevelt initiated a spending program. In 1938 New Dealers passed a Second Agricultural Adjustment Act to replace the first one that the Supreme Court had overturned. The president continually fought with the Supreme Court, which had upset several New Deal measures. Roosevelt asked Congress for power to appoint an additional justice for each sitting justice over the age of 70. The proposal threatened the Court's conservative majority.

New Dealers also enacted a series of measures to regulate utilities, to increase taxes on corporations

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