Roosevelt persuaded Congress to give him
emergency powers from 9 March to 16 June 1933 (the 'Hundred
Days'). Although many of Roosevelt's ideas were not
new (some just copied Hoover's), 1933 - especially the 100 days
- saw a burst of legislation to tackle the Depression like never
Roosevelt undertook a series of measures to keep
the American people on his side.
a. Abolished Prohibition
- He said: ‘I think this would be a
good time for a beer”. This restored faith in the government
because it stopped the humiliation of the government’s laws
being openly ignored.
- (It also increased the government’s
b. Fireside Chats
- FDR made sure that everyone who
sent him a letter got a reply (he got up to 8,000 letters a
day), and that everyone who telephoned the White House was never
- FDR described his policies in radio
broadcasts called ‘fireside chats’.
c. Bank holiday
- The Emergency Banking Act closed
the banks for four days. The government checked that all were
financially sound, and when they reopened, they reopened with
the backing of the Federal Reserve.
- This restored confidence in the
banks, and people deposited their money there again.
d. Stock Exchange
- The Securities and Exchange
Commission introduced rules for the Stock Exchange to prevent
another Crash like 1929.
2. Finance and
Roosevelt believed that he had to make sure that
the economy was ‘sound’.
- He did not run deficit budgets
(i.e. it did not spend more than it gathered in taxes).
- He CUT the pay of government
employees by 15%.
(These measures actually made the depression
- The government borrowed huge
amounts of money to finance the New Deal, but it spent it on
projects that were planned to pay back eventually.
- The Farm Loan Act and the
Bankruptcy Act prevented banks from foreclosing on solvent
businesses until they had had a chance to borrow from the
- The Home Loan Act and the Home
Owners Loan Corporation did the same for ordinary home owners.
c. Prices and Wages
- The Agricultural Adjustment Act
(AAA) paid farmers to take fields out of production; the idea of this
was to stop over-production and to drive up prices.
- The NRA (National Recovery
Administration) was set up, where businessmen joined a ‘Roll of
Honour’ (and were allowed to show a blue eagle symbol) where
they promised to cut production and pay good wages – 2.5 million
firms, employing 22 million people, joined the scheme.
- FDR also abolished Child Labour –
this put more adults into work.
You will read in some books
that FDR abolished the gold standard (linking the value of the
dollar to a certain weight of gold). This is not true. He
- stop people owning gold (they had
to deposit it in banks)
- make the banks give all the gold to
- increase the price of gold from $20
to £35 an ounce.
This stopped people
hoarding/saving their money, and increased the amount of
government reserves. Since the dollar was still linked to gold,
moreover, many foreign investors bought American dollars for
gold, which increased the amount of government reserves.
FDR set up what came to be called the ‘alphabet
agencies’ because their names were reduced to acronyms. The
main ones were:
a. CCC (Civilian
provided paid conservation work to give
unemployed young men jobs – by 1941, 2.5 million had taken part
PLUS millions of trees panted/ parks and forest areas developed
b. FERA (Federal
Emergency Relief Administration): provided matched funding to
help states organise payments to the unemployed and homeless.
c. WPA (Works
ran projects which provided work for the
unemployed, e.g. building airports, schools, hospitals or
bridges – millions earned a small wage and felt valuable.
d. TVA (Tennessee
built 21 dams in ten years – stopped flooding,
provided cheap electricity and provided work.