Lesson 2: Reform, Relief, and Recovery

Lesson Focus

Explore Roosevelt's New Deal programs, an “alphabet soup” of agencies like the AAA and CCC. We'll examine how these ambitious relief and recovery efforts provided hope and reshaped America's economy, with effects still felt today.

People to Know

Franklin D. Roosevelt

Learning Objectives

• Analyze the positive and negative impacts of Roosevelt's New Deal policies on the rural poor, including farmers and tenants.
• Compare the effectiveness of New Deal measures for agricultural recovery versus those aimed at helping city workers and industry.

To restore faith in the shattered financial system, the government took decisive action.
The Glass-Steagall Act of June 1933 created the FDIC to insure bank deposits, ending the fear of losing savings.
To prevent stock market fraud, the Federal Securities Act and later the SEC required companies to be truthful. Note that these reforms made people feel confident their money was safe, creating stability for economic recovery.

To fight unemployment, Roosevelt used pump priming and deficit spending.
The FERA first provided a dole, or direct relief, but this was seen as a temporary fix.
Therefore, programs like the PWA and the CCC were created to offer jobs instead of handouts. The CCC was especially admired for employing young men in conservation projects, building both infrastructure and self-respect among workers.

The Tennessee Valley was a severely impoverished region suffering from erosion and flooding.
In May 1933, Congress created the Tennessee Valley Authority (TVA), a massive project to build dams, generate cheap power, and reforest the land.
The TVA successfully modernized the seven-state region, bringing electricity and jobs. Pay special attention to how it was also controversial, as private power companies called it an unfair, government-funded competitor.

Farmers were devastated by overproduction, low prices, and bank foreclosures.
In response, the Agricultural Adjustment Act (AAA) of 1933 paid farmers to reduce their crops, while a moratorium paused foreclosures.
This policy raised farm income but hurt tenant farmers and sharecroppers who lost their jobs. During this time, the Dust Bowl disaster also forced hundreds of thousands of farm families to leave their land.

To fix failing industries, the National Industrial Recovery Act (NIRA) was passed in June 1933.
It created the NRA to establish industry-wide codes for prices and wages, and its Section 7a guaranteed workers the right to form unions.
However, the NRA largely failed because prices rose faster than wages and big business dominated. This led to a wave of violent strikes in 1934 as workers demanded better conditions and stronger protections.

Despite Roosevelt's efforts, by 1935 the Depression was far from over.
The initial relief programs provided hope but did not achieve full economic recovery, as industrial wages and farm prices remained low.
Public frustration grew, and the failures of agencies like the NRA showed that the first emergency measures were not enough. This realization forced Roosevelt to seek new, longer-term solutions to solve the nation's problems.