What were the two most important laws passed during the First New Deal? How did these laws seek to combat the Depression?

Franklin Delano Roosevelt (commonly referred to as FDR) was born to a wealthy New York family, and grew up in the family's estate along the Hudson River in Hyde Park, north of New York City. Roosevelt had worked in the Department of the Navy during the Progressive Era. So he had come to believe that government programs could improve Americans' lives. In the 1920s, Roosevelt was stricken by polio, which left him confined to a wheelchair. In 1928, he was elected governor of New York. Although he believed in using the power of government, Roosevelt did not have a particular political philosophy. Although he promised to give the American people a "new deal" in his speech to the 1932 Democratic Convention, he did not specify exactly what sort of policies he had in mind. Instead, he was pragmatic, to the extent that he believed in experimenting and noting the results. As he instructed his aides in how to attack the Depression after becoming president, "Try something. If it fails, admit its failure and try something else. But above all else try something."

Study question: Herbert Hoover and Franklin D. Roosevelt had different personalities and different philosophies about government. How were these presidents different? How did their differences affect the way they responded to the Great Depression?

As president, FDR tried many new policies to fight the Depression. During his first three months in office, he persuaded Congress to pass several important laws. This flurry of activity became known as the Hundred Days. (Journalists still assess the performance of new presidents after their first hundred days in office, a practice that began with FDR's first term.)

In his inaugural address, FDR tried to soothe Americans' worries. He declared that "We have nothing to fear but fear itself." A few days after his inauguration, Roosevelt delivered the first of his "Fireside Chats," which were radio addresses to convey his policies and his concerns to the American public. His wife, Eleanor Roosevelt, was also widely considered to be especially sensitive to the problems of poor Americans, women, and African-Americans.

Roosevelt's administration immediately announced a Bank Holiday, which closed the nation's banks for a few days while auditors and accountants examined banks' finances. Congress then passed the Emergency Banking Relief Act, which permitted only those banks considered financially sound to reopen. The government also created the Federal Deposit Insurance Corporation (FDIC) to insure that, in the future, depositors would be able to withdraw the money they had in their bank account, even if a bank did go broke. Prior to the creation of the FDIC, depositors could lose their savings if a bank failed. The FDIC still insures bank deposits today. The following year, the administration created the Securities and Exchange Commission (SEC), to oversee and regulate the stock market.

FDR also signed a bill allowing the manufacture and sale of beer, which had been illegal under the Eighteenth Amendment to the Constitution since 1919. Later in 1933, the Eighteenth Amendment was repealed, ending the Prohibition of alcohol.

The New Deal included the Unemployment Relief Act and the Federal Emergency Relief Administration (FERA) which granted federal aid to states and communities to provide relief to poor Americans. Many of these jobs were created in the Civil Works Administration (CWA) and Civilian Conservation Corps (CCC), which employed many American men in jobs building roads, parks, and other public facilities. Because many economists and government officials believed that underconsumption had been one of the causes of the Depression, they sought ways to provide Americans with higher wages. They knew that increased wages would lead to higher consumer spending that would help restore prosperity. Some people referred to these efforts to stimulate spending as pump-priming.

The most important policies of the first New Deal were the Agricultural Adjustment Act (AAA), and the National Industrial Recovery Act (NIRA). The AAA raised crop prices and farmers' incomes by paying farmers to reduce their production. This helped farmers both directly by paying them and indirectly by reducing production and raising crop prices.

The NIRA created the National Recovery Administration (NRA), which sought to devise policies to make American industries prosperous again by encouraging industries to write production codes. These codes set out fair wages and working conditions for all companies in a particular industry. The NRA's logo, a blue eagle, became for many Americans the very symbol of the New Deal. The NIRA also created the Public Works Administration (PWA), which made some federal money available to provide jobs for unemployed workers. Also, section 7a of NIRA guaranteed that American workers had the right to join unions and engage in collective bargaining with their employers to gain higher wages and other benefits. Union membership rose greatly after the NIRA became law.

The beginnings of the New Deal also created one of the largest and most innovative federal projects, the Tennessee Valley Authority (TVA). This project created dams and hydroelectric plants along the Tennessee River, which flows through several Southern states. The TVA brought electricity and flood control to many poor areas in the South. It remains one of the largest, most influential examples of the federal government's efforts to manage an entire region for maximum economic and social benefit.