The New Deal:  I
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Election of 1932

With many Americans blaming President Hoover and the Republicans for the Depression, the Democrats appeared certain of regaining the White House in 1932.  At their Chicago convention, they nominated the governor of New York, Franklin Delano Roosevelt, to run against Hoover in the presidential race.   In his acceptance speech, Roosevelt promised Americans a “new deal” in government.  However, he purposely remained vague about the details of his “new deal”—in part, because he was not certain himself of what he planned to do, and because he didn’t want President Hoover stealing any Democratic ideas.

The "Brains Trust"--the Men Who Gave Roosevelt the Ideas for his New Deal

Left:  FDR giving his acceptance speech at Chicago, 1932.	Above, clockwise:  The "Brains Trust": FDR and Rexford Tugwell; Louis Brandeis; Harry Hopkins.

Franklin Delano Roosevelt (1933-1945)

On March 4, 1933, Franklin Delano Roosevelt delivered his inaugural address. Displaying his characteristic buoyant optimism, Roosevelt assured the nation:  “We have nothing to fear but fear itself.” He announced an end to the bureaucratic stagnation that had plagued the administration of his predecessor.  “The Nation asks for action, and action now.”

When FDR spoke of "fear," he did not speak in the abstract.  Americans were in the grip of a real panic, so one of the first actions FDR took as president--and therefore, the act that established Americans' "first impression" of him as their new leader--was directed at ending this panic.

The Emergency Banking Act of 1933

In the weeks preceding Roosevelt’s inauguration, panicked depositors made a “run” on the nation’s banks.  Fearing the banks would close, they wanted to get their money while they could.  Most banks, however, did not have sufficient cash on hand to cover all deposits.  The result was a panic.  On March 5, Roosevelt declared a three-day “banking holiday.”  Three days later, Congress passed the Emergency Banking Act.  The Act closed insolvent banks and reopened sound ones.  On March 12, the “Roosevelt” banks reopened, and deposits  exceeded withdrawals.  The nation’s banking system had been saved.
    With his actions in ending the bank crisis, FDR created an enormously positive "first impression" with the American people.  He had taken direct, decisive, and effective action.  Thus, before Congress ever convened in its special session, the people were primed to support FDR and his "new deal."


The Economy Act

The second emergency measure FDR took in his first days in office was to ask Congress to pass the Economy in Government Act, which cut $400,000,000 from the federal budget, much of it from the salaries of federal employees.  He did this primarily to fulfill a campaign promise to "economize" in government spending.  However, the bill actually did more harm than good because it withdrew money from the economy, furthering the economic recession.  This measure reflected the haste and lack of planning characteristic of the early New Deal.

The First Hundred Days

Roosevelt’s promise of "action and action now" signaled the beginning of an incredibly productive period of legislative and administrative action known as “The First Hundred Days.”  Congress immediately passed a number of bills addressing the nation’s economic problems, including the Emergency Banking Bill and the Economy in Government Act mentioned above.   In all, the programs passed by this special session of Congress, which lasted from March until early July, are referred to as the "first" New Deal.  

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