‘The only thing we have to fear is fear itself’’?
This quote from his inaugural speech, sums up the mood of the American people as Roosevelt was elected to be President of the United States in the deepest part of the depression. He faced numerous challenges as a result of the mismanagement of the previous successive Republicans governments such as a large proportion of the American population were out of work and the banking crisis. Roosevelt had promised the American people a ‘new deal’ at his acceptance of the democratic nomination for president in 1932, however, his campaign only offered vague hints of what it would entail. He put the question of economic security on the agenda. President Roosevelt explicitly and consciously defined the New Deal as the embodiment of freedom, but of freedom of economic security rather than freedom of contract, or freedom of every man for himself.
Roosevelt enacted the first New Deal, also called the ‘Hundred Days’ to deal with the urgent situation that the country found itself in?. He confronted a banking system on the verge of collapse, as over five thousand banks were already closed, including all of those in New York and Illinois, as they had been shut down by their respective state governors earlier that day. Roosevelt declared a ‘bank holiday’ in March 1933, as by this time, banking had been suspended in over thirty-eight states, and he temporally halted all bank operations and held a special session in Congress. On the 9th of March, Congress rushed through a bill called the Emergency Banking Act, which provided funds to shore up threatened banks.
He continued trying to protect the economy by introducing the Glass-Stegall Act, which barred commercial banks, from becoming involved in the buying, and selling of stocks, in the same act he established the Federal Deposit Insurance Corporation (FDIR), a government system that insured the accounts of individual depositors. He also took the United States off the Gold Standard , which meant that he severed the link between the gold’s reserves and the country’s currency to attempt stimulating business activity, which succeeded as by 1936, no bank failed in the country.
Roosevelt’s grand plan in combating the depression was a piece of legislation that had largely been based on the government-business partnership established by the War Industries Board of WWI, he called it ‘the most important and far-reaching legislation ever enacted by the American congress’. The National Recovery Act established the National Recovery Administration (NRA), which worked with business owners to establish industry codes that set the standard for prices, output and working conditions in textile, steel and auto industries. However, the NRA soon become involved in controversy as large companies dominated the code writing process ad it was concluded by an investigation that was headed a labour lawyer that business leaders used the NRA to drive up prices, lay off workers,...