FDR implemented sweeping changes through government programs aimed at alleviating the misery of the Great Depression. On inauguration day, many states had declared bank holidays in order to keep the remaining banks solvent. They feared the runs on the banking system that had already occurred with depositors lining up to withdraw their money.

Two days later, on March 6, President Roosevelt called a halt to banking operations, and three days later Congress, which had been called to special session, passed the Emergency Banking Act. Federal auditors examined bankbooks, and the president's first “fireside chat” renewed trust in the banking system. As the president explained, unsound banks would be closed. Approximately 12,000 banks were back in business.

Roosevelt followed up with massive reform as Congress established the Federal Deposit Insurance Corporation (FDIC) in 1933, which guaranteed individual deposits up to $5,000 (that amount has increased over time). The new law, just as the president had intended, gave investors the confidence that if the bank failed, they wouldn't lose all their funds. Two acts, one in 1933 and another the following year, brought forth detailed regulations for the securities market, enforced by the newly created Securities and Exchange Commission (SEC). Joseph P. Kennedy became the commission's first chairman.

Acronyms for the People

As the administration unveiled its New Deal programs, it appeared as an alphabet soup of projects, for many of the initiatives were identified by acronyms. For instance, the Federal Housing Administration (FHA) offered loan guarantees for home purchases. The Civilian Conservation Corps (CCC) aided the unemployed by giving jobs to men between eighteen and twenty-five and putting them to work in rural camps built by the War Department (today's Department of Defense). These young men planted trees, built dams, and provided other services that conserved the environment. The Federal Emergency Relief Administration (FERA) was created in 1933 and led by Roosevelt's trusted advisor Harry Hopkins. The FERA made initial cash payments to the unemployed, but also put people to work in jobs that didn't compete with private enterprise. The Agricultural Adjustment Act was a complex farm bill that paid farmers to take land out of cultivation. At a time when the needy often lacked food, this bill invited intense criticism. It had been intended to raise agricultural prices, and in 1936 it was declared unconstitutional by the U.S. Supreme Court.

Social Security

One of the most profound New Deal programs stemmed from passage of the Social Security Act of August 1935. This legislation consisted of three core components — a retirement fund for the elderly, unemployment insurance, and welfare grants for local distribution (which included aid for dependent children). Social Security was developed in the United States later than in several European countries, which had instituted such programs before World War I. Two years after the Social Security program was passed into law, 21 million workers were covered by unemployment insurance and 36 million were entitled to old-age pensions.

The TVA and the NRA

The Tennessee Valley Authority (TVA) was particularly innovative, building dams in seven southeastern states to generate electricity and manage flood control programs. Power came to thousands in rural regions where electricity had not previously been delivered.

Perhaps the cornerstone of the New Deal was the National Industrial Recovery Act passed in 1933 to establish the National Recovery Administration (NRA). It was supposed to encourage good business by establishing codes of fair competition. Workers were to be guaranteed such things as minimum wages, maximum hours, and the right to collective bargaining.

Unfortunately, the NRA didn't work as its supporters had anticipated. Code making got way out of hand, resulting in hundreds of codes for various industries. In 1935, the Supreme Court declared the NRA unconstitutional.

The New Deal and the Nation

The New Deal seemed to be off to a rousing start, for in the first hundred days of the new administration there was a flurry of legislation to get the country moving forward again. Public works projects put thousands on the job, creating infrastructure such as the Lincoln Tunnel as well as the Golden Gate Bridge in San Francisco. Whatever political opposition the president faced was taken care of in 1934 when Democrats swept the midterm elections, increasing their majorities in both the Senate and the House.

Even with this progress, the work of restoring the economy was by no means finished. Other New Deal measures included the Wealth Tax, which raised individual income tax rates for some, as well as the federal Fair Labor Standards Act of 1938, mandating maximum hours and minimum wages for most workers. In addition, the Works Progress Administration (WPA) provided government funding not only for building construction, but also for artists and writers. As a result, murals were painted, plays performed, photographs taken, and folk music sung. Through the Federal Writers Project, state-by-state guidebooks were created, while the Federal Theater Project staged free performances.

Though the New Deal failed to stimulate comprehensive economic recovery, it set the nation on its course with increased controls over the money supply and Federal Reserve policies. Even more importantly, it gave everyone a better understanding of the economic consequences of taxation, debt, and spending. This knowledge helped the federal government to limit the impact of later recessions. A number of the agencies created then still exist today, and the New Deal no doubt brought many more members into the Democratic Party.