By 1934, the United States, along with the rest of the world, had been experiencing severe economic depression for almost five years. In the United States, the Great Depression seemed to many to signify the failure of capitalism. In response to the economic devastation, political economic platforms based on theories as diverse as Herbert Hoover's relatively laissez-faire economic handling to extreme Utopian schemes to achieve total economic equality amongst the citizens of the nation began to emerge. .
Two of these ideas, Franklin D. Roosevelt's "New Deal," and Huey P. Long's "Share Our Wealth" clubs gained significant popular support in the 1930s. While the philosophy and mechanics of each of the concepts were different, both approaches would have led to an unprecedented level of involvement of the government in the every day lives of American citizens.
Franklin D. Roosevelt campaigned for the presidency and on a proposal for solving the economic problems of the Great Depression called the "New Deal." While FDR did not have a specific plan during the campaign itself, his directional philosophy was that federal government had a responsibility to ensure social justice and the welfare of its citizens. After winning the election and as FDR's presidency began, the New Deal began to flesh itself out through a collection of legislation and actions that would initiate the concept of America as a welfare state and establish the role of federal government in guaranteeing individual welfare.
Seeding the idea of government as guarantor, the New Deal established a collection of agencies to focus on various economic and social issues. These agencies, amongst other things, mandated the regulation banking, investments, and industry, created jobs, and established government funded relief programs. .
After the collapse of the banking industry and the failure of more than 7,000 banks, FDR instituted actions to enable the banks to recover from collapse.