Innovation & Wealth › Mass production & the consumer age › Crash of 1929 and the Great Depression
The New Deal
1933–1939· Law or policy· Laws, labor & antitrust
Well documentedSolid records, texts or physical evidence.
Franklin Roosevelt's 1933–1939 programs for relief, recovery and reform that rewrote the rules of American capitalism.
See it on the Innovation & Wealth map →What happened
Taking office in March 1933 with banks collapsing, Roosevelt closed every bank for a week, then reopened the sound ones. Congress passed deposit insurance, securities laws (creating the SEC in 1934), farm supports, the Tennessee Valley Authority and work programs; the WPA employed about 8.5 million people over its life. The 1935 'Second New Deal' added Social Security and union rights. Unemployment fell from about 25% to about 14% by 1937, then rose again in the 1937–38 recession. The Supreme Court struck down some programs.
Impact on society and the economy
It made Washington responsible for the economy. Workers, farmers, depositors and the elderly gained protections; many farm and domestic workers, disproportionately Black, were left out; business faced regulation and higher taxes.
How we know
The statutes, agency records, Roosevelt's papers at the FDR Library in Hyde Park, New York, government economic data, and histories such as David Kennedy's Freedom from Fear (1999).
Still debated
Did the New Deal speed recovery or prolong the Depression? Economists still disagree; leaving the gold standard and stabilizing banks usually get the most credit.
Inside this (4)
Connections (7)
▸Progressive Era reform and trust-busting paved the way for The New DealMostly agreed
The connection
Many New Dealers came up as Progressives: Franklin Roosevelt served in Wilson's Navy Department, while Frances Perkins, Robert Wagner and Harold Ickes were veterans of earlier reform fights. Theodore Roosevelt's 1912 Progressive Party platform had called for social insurance, minimum wages for women and an eight-hour day; the New Deal enacted versions of all three.
When and how
From the 1912 Progressive Party campaign to 1938, with state experiments such as Wisconsin's 1932 unemployment insurance; Franklin Roosevelt, Perkins, Wagner and Ickes.
How sure are we?
Their careers link the eras directly, and planks of the 1912 platform closely match later New Deal laws.
Debates
Historian Richard Hofstadter argued the New Deal was a sharp break from Progressivism, more pragmatic and welfare-minded; others stress continuity.
▸IBM under Thomas J. Watson won the Social Security records contract of The New DealWell documented
The connection
The 1935 Social Security Act required tracking the earnings of about 26 million workers, a vast record-keeping job. Watson had kept IBM's factories building tabulators through the Depression, so IBM alone had enough machines ready. It won the contract in 1936. New Deal agencies became major customers, and IBM's revenue roughly doubled by 1940.
When and how
Washington and Baltimore, 1935–1937; Thomas J. Watson, the Social Security Board, and the punch-card records operation in Baltimore's Candler Building.
How we know
Social Security Administration histories and IBM's corporate records describe the contract, the machines and the scale of the operation.
Debates
Was Watson's Depression gamble foresight or luck? Historians also note that leasing machines and selling cards to government deepened IBM's dominance, inviting later antitrust suits.
▸Crash of 1929 and the Great Depression led to The New DealWell documented
The connection
Three years of slump made Herbert Hoover's cautious approach politically untenable. Franklin Roosevelt, promising 'a new deal for the American people,' won 42 of 48 states in 1932. He took office on March 4, 1933, as banks failed across the country, declared a national bank holiday two days later, and launched the Hundred Days of emergency laws.
When and how
Washington, 1932–1933; Franklin Roosevelt, his 'Brain Trust' of advisers such as Raymond Moley, Rexford Tugwell and Adolf Berle, and a Democratic Congress.
How we know
Election returns, Roosevelt's speeches and fireside chats, and the laws passed in spring 1933 show the direct response to the crisis.
Debates
Hoover had begun some interventions, such as the 1932 Reconstruction Finance Corporation, so historians debate how sharp a break the New Deal really was.
▸The New Deal included Glass–Steagall Act (bank separation and FDIC)Well documented
The connection
The Senate's Pecora hearings showed banks such as National City selling risky securities to their own depositors. In the Hundred Days, Congress responded by separating commercial from investment banking and creating federal deposit insurance. Roosevelt doubted insurance, fearing it would prop up bad banks, but Steagall and public pressure prevailed.
When and how
Washington, spring 1933; Senator Carter Glass, Representative Henry Steagall, Senate counsel Ferdinand Pecora, and President Roosevelt, who signed it June 16, 1933.
How we know
The Banking Act of 1933, the Pecora hearing transcripts, congressional debates and the FDIC's own published history.
Debates
Most failed banks were small rural lenders without securities arms, so whether separation addressed the real causes is debated; the argument revived after 2008.
▸The New Deal included Wagner Act: legal right to unionizeWell documented
The connection
The 1933 recovery law had promised workers bargaining rights, but it was weakly enforced, and the Supreme Court struck the law down in May 1935. Within weeks Congress passed Senator Wagner's stronger, enforceable bill, a centerpiece of the 'Second New Deal' alongside Social Security. Roosevelt, initially lukewarm, signed it July 5, 1935.
When and how
Washington, 1935; Senator Robert F. Wagner, President Roosevelt and Labor Secretary Frances Perkins. The Supreme Court upheld it in April 1937.
How we know
The statute, congressional records and the Supreme Court's 1937 decision in NLRB v. Jones & Laughlin Steel.
Debates
Historians debate whether the law came from the administration's plans or from pressure by strikers and Congress; Roosevelt endorsed it late.
▸The New Deal included Fair Labor Standards Act (minimum wage, child labor ban)Well documented
The connection
After his 1936 landslide, Roosevelt pushed for national wage and hour standards, the last major New Deal law. Southern Democrats resisted, fearing loss of their low-wage advantage, and won exemptions for farm and domestic work, jobs held by many Black workers. After a year of fights, Congress passed it in June 1938.
When and how
Washington, 1937–1938; Labor Secretary Frances Perkins, Senator Hugo Black, Representative Mary Norton, who steered it through the House, and President Roosevelt.
How we know
Legislative history, the law's text and exemptions, and the Supreme Court's 1941 ruling upholding it.
Debates
How far the exemptions were racially motivated versus driven by regional economics is debated; most historians see both at work.
▸The New Deal set up housing programs that enabled Redlining and federal mortgage exclusionWell documented
The connection
The New Deal rescued housing: the Home Owners' Loan Corporation refinanced about a million mortgages, and the FHA insured a new kind of loan, long-term, low-down-payment and fully paid off by monthly installments. But both agencies' appraisal rules treated Black and mixed neighborhoods as high risk, so programs that created mass homeownership excluded most Black families.
When and how
US cities, 1933–1968; the HOLC (1933), the FHA (1934), their appraisers, and local real-estate brokers who helped grade neighborhoods.
How we know
The FHA's Underwriting Manual (1936 and 1938 editions), the HOLC maps, and later federal civil-rights reports document the policies.
Debates
Scholars debate whether federal officials invented these racial rules or adopted the real-estate industry's existing standards; Richard Rothstein's The Color of Law (2017) argues the segregation was deliberate government policy.