The ‘New Deal’ - the start of Franklin D Roosevelt’s presidency
Franklin D Roosevelt became president in March 1933. He used his first major speech to begin to restore the confidence of Americans in the economy and government. At his inaugurationIn politics, an inauguration is the ceremony when someone is sworn in to take over a role, for example the President of the United States.as president, he told the American people, “The only thing we have to fear, is fear itself.” The first 100 days of his presidency signalled the end of the Republican PartyOne of the two major American political parties. Republicans tend to hold a more conservative viewpoint on politics and society. laissez faireWhen a government doesn't believe in interfering in the lives of individuals and businesses. For the Republicans, liberty or freedom to live your life and run your business was one of the most important roles of government. approach to helping the economy. The government began to lay out and set in action plans to aid the economy.
The New Deal
Roosevelt was proactive in dealing with the effects of the Great Depression. He came up with a new set of policies known as the New DealThe name of the policies put in place from 1933 to 1945 under the Democratic Party President Franklin Roosevelt. His plan intended to solve the problems caused by the Great Depression.
The main aim of the New Deal was to save American capitalismAn economic system based on privately owned, as opposed to state-controlled, businesses and the creation of profit. To do this, Roosevelt created a series of policies that saw the federalPart of the government of the USA as a whole rather than relating to an individual state. government intervene in the economy more than ever before.
The New Deal enabled CongressThe legislative body of the US government, made up of the Senate and the House of Representatives. to pass 15 major new bills addressing a range of problems. The first acts of Roosevelt’s presidency were as follows:
| Problem | Measure | Action | Impact |
| Americans had lost confidence in the banking system. | 1933 Emergency Banking Act | Roosevelt temporarily closed all banks to inspect them, and only the well-managed and stable banks were allowed to reopen. | People’s confidence in the banking system was restored. People began putting their money back in banks. Banks could lend money to businesses again. |
| The government needed money to fund the New Deal. | 1933 Economy Act | All government employees’ pay was cut by 15 per cent. | Almost $1 billion was saved. |
| Prohibition was unpopular and fuelling organised crime. | 1933 Beer and Wine Revenue Act | Prohibition was ended. | Organised crime began to decline. Selling alcohol meant it could be taxed to raise money. |
| Problem | Americans had lost confidence in the banking system. |
|---|---|
| Measure | 1933 Emergency Banking Act |
| Action | Roosevelt temporarily closed all banks to inspect them, and only the well-managed and stable banks were allowed to reopen. |
| Impact | People’s confidence in the banking system was restored. People began putting their money back in banks. Banks could lend money to businesses again. |
| Problem | The government needed money to fund the New Deal. |
|---|---|
| Measure | 1933 Economy Act |
| Action | All government employees’ pay was cut by 15 per cent. |
| Impact | Almost $1 billion was saved. |
| Problem | Prohibition was unpopular and fuelling organised crime. |
|---|---|
| Measure | 1933 Beer and Wine Revenue Act |
| Action | Prohibition was ended. |
| Impact | Organised crime began to decline. Selling alcohol meant it could be taxed to raise money. |