Relief and Jobs
To meet the immediate crisis of starvation and the dire needs of the nation's unemployed, FDR established several public relief programs in 1933. The Federal Emergency Relief Administration (FERA) made direct cash allocations available to states for immediate payments to the unemployed.
The Civilian Conservation Corps (CCC) put 300,000 young men to work in 1,200 camps planting trees, building bridges, and cleaning beaches. Finally, the Civil Works Administration (CWA) spent almost $1 billion on public works projects, including airports and roads. Roosevelt shut the CWA after only four months, however, because it was so costly.
The benefits of these three programs were obvious: they provided relief for millions of Americans on the verge of outright starvation and gave unemployed Americans jobs. Conservative attacked relieve programs as handouts to the undeserving poor and derided the CCC and CWA as "make work" projects that added little to American society. In fact, Americans in the twenty-first century continue to enjoy the picnic tables, the cabins, and the forest roads built by FDR's "tree army."
Banking and Finance
FDR's immediate task upon his inauguration was to stabilize the nation's banking system. On March 6, Roosevelt declared a national "bank holiday" to end a run by depositors seeking to withdraw their money from faltering banks. FDR also called Congress into emergency session where the legislature enacted, nearly sight unseen, the President's banking proposal. Under this plan, the federal government would inspect all banks, re-open those that were sufficiently solvent, re-organize those that could be saved, and close those that were beyond repair. On March 12, FDR went on the radio—giving the first of many "fireside chats"—to explain his plan to Americans and to assure them that their money would be safe in the re-opened banks. During the following weeks, Americans returned nearly $1 billion dollars to bank vaults.
FDR then won a significant number of other reforms related to the nation's financial sector. In May 1933, he signed the Securities Act, which required corporations and stockbrokers to release accurate information about stocks to investors. In June 1933, he signed the Glass-Steagall Act, which created the Federal Deposit Insurance Corporation, guaranteeing the savings of average citizens, and prevented commercial banks from engaging in investment banking, which they had been carrying on in scandalous fashion. In 1934, the Securities and Exchange Act created the Securities and Exchange Commission (SEC), which was charged with regulating financial markets.
Roosevelt in 1933 took America off the gold standard, and the Banking Act of 1935 gave the country a central banking mechanism for the first time. A reorganized Reconstruction Finance Corporation (RFC) spun off subsidiaries such as the Federal National Mortgage Association ("Fannie Mae") that, along with the Federal Housing Administration (FHA) made it possible for millions of Americans to buy or renovate homes. Taken together, these innovations, one write has said, marked the beginning of the end of Wall Street's domination of finance capitalism" and "represented the shift of economic power form the lower part of Manhattan, where it had been for over a century, to Washington."
Agricultural and Rural America
In the hope of spurring the recovery of American agriculture, Roosevelt asked Congress to pass the Agricultural Adjustment Act (AAA), which it did in May 1933. FDR and his advisers believed that overproduction had caused gluts in the farm market, dropping prices, and, in turn, sending farmers' incomes plummeting. The AAA aimed to inflate farmers' incomes by offering cash incentives to farmers who agreed cut production. The AAA originally covered wheat, corn, cotton, hogs, milk, rice, and tobacco, but Congress added new commodities to the program in the ensuing years.
More than three million farmers joined the AAA program in its first year, and farm income did increase by more than fifty percent between 1932 and 1935. Despite these impressive gains, the benefits of the AAA too often accrued to large farm-owners rather than the millions of poor white and African American tenant farmers and sharecroppers who lived in abject poverty. Moreover, AAA policies stressed the lowering of production—which in a few cases in 1933 meant that crops were plowed under and livestock killed. With many Americans hungry and ill-clothed, critics labeled such policies "utterly idiotic."Roosevelt also believed it imperative to reduce poverty in rural areas. The Farm Credit Association, another offshoot of the RFC, lent more than a billion dollars to families to save their farms from foreclosure. The Federal Emergency Relief Administration and the Resettlement Administration sponsored experimental rural communities and greenbelt towns. The Farm Security Administration (FSA) enabled tenant farmers to buy farms and built modern labor camps for migrants like John Steinbeck's fictional Joads. Perhaps nothing did more to rescue the farm family from isolation than the Rural Electrification Administration (REA) which brought electricity for the first time to millions of rural homes and with it such conveniences as radios and washing machines.
The REA is only one example of FDR's interest in public power, which he had sponsored as governor of New York. Huge dams—Grand Coulee and Bonneville—transformed the economy of the Pacific Northwest. Still more important was the Tennessee Valley Authority (TVA). The Tennessee Valley stretched some 40,000 square miles from Virginia to Mississippi and was the poorest region in the nation. The TVA aimed to marshal the area's natural resources into an engine of economic uplift by building dams and power plants that would bring jobs, electricity, and flood control to the Valley. A number of Tennessee Valley natives criticized the TVA for displacing thousands of people—usually poor farmers—to make way for power plants and dams. But by the end of the 1930s, the TVA had brought millions of southern Americans electric power, roads, and jobs in regions that previously had no phones, electric lights, or stable employment. In later years, the TVA's dams and power plants wreaked havoc on the environment by spewing pollution. The TVA however, also did a great deal to restore badly eroded hillsides, and another New Deal agency, the Soil Conservation Service, trained farmers in the proper methods of cultivation. As Theodore Roosevelt is the father of forest conservation, Franklin Roosevelt is the father of soil conservation.
Finally, in some of the most controversial legislation of his administration, Roosevelt set out to help American industry get back onto its feet. The centerpiece of his industrial recovery program was the National Industrial Recovery Act (NIRA) that Congress passed in June 1933. Drawing its inspiration from the federal government's efforts at economic planning during World War I and the voluntary trade associations of the 1920s, the NIRA provided for national economic planning as opposed to individualistic and competitive, laissez-faire capitalism.
The NIRA created two new agencies, the Public Works Administration (PWA) and the National Recovery Administration (NRA). The PWA, run by Secretary of the Interior Harold Ickes, had a budget of over $3 billion. Overseeing the construction of large-scale public works (including such landmarks San Francisco's Golden Gate Bridge and New York City's Triborough Bridge), it hoped to stimulate the economy by creating jobs and, more important, by generating orders for materials that American industry produced. To some degree, the PWA accomplished this mission, although Ickes was such a scrupulous administrator—sometimes scrutinizing contracts line by line—that he failed to spend all the money available to him.
The NRA, however, was the cornerstone of FDR's plan for industry. It proposed a business-government partnership in which business leaders, under the watchful eye of the NRA, would draft fair codes of competition regulating prices and wages. The codes would also outlaw cutthroat practices, such as below-cost sales and child labor. Unhealthy competition between businesses would thus become a thing of the past, spurring job creation and economic growth. Additionally, section 7a of the NIRA guaranteed labor the right to organize and bargain collectively. As an enticement to business, the NIRA suspended antitrust laws that had been reviled by business leaders since the beginning of the twentieth century.
Under the leadership of General Hugh Johnson, the NRA attempted to rally public support to its program, hoping that public pressure, rather than federal government power, would compel American industry to support the NRA. Johnson held rallies and parades and urged businesses which had agreed to the codes to put the NRA's symbol, the Blue Eagle, in their store fronts. In sum, the NRA signified FDR's belief that business, with a little push from government, could regulate itself.
This strategy proved inadequate, and perhaps naive. Businesses heeded the codes when they saw fit, and ignored them when it served their purposes. Small business owners complained, with good reason, that big businesses dominated the code-drafting process and looked to drive their smaller competitors out of the market. Labor unions enjoyed a new-found legitimacy—symbolized by the millions of workers who joined—but found that businesses ignored provisions that guaranteed worker's wages and hours. By the end of 1933, it was clear that the NRA was anything but a success.