4.7 The First 100 Days

The early New Deal unfolded in the spring of 1933 with a chaotic 100 day burst of legislation. Backing up his assurances in his inaugural speech – “let me assert my firm belief that the only thing we have to fear is fear itself . . .” – the legislation of the first 100 days stressed recovery through planning and cooperation with business, as well as aiding the unemployed and reforming the economic system.¹

On March 5, the day after his inauguration, Roosevelt ordered every bank in the country closed for four days. He shrewdly called it a “bank holiday.” Instead of panicking, Americans acted as if it were a holiday, using homemade currencies called “scrip” and trading services. On March 9, the president introduced emergency banking legislation. The House passed the measure, written largely by the Brain Trust, sight unseen, and the Senate endorsed it the same day. Roosevelt signed it that night.

The Emergency Banking Act extended federal assistance to banks. Sound banks would reopen immediately with government support. Troubled banks would be handed over to federal “conservators,” who would guide them to solvency. The night before the banks were set to reopen, on Sunday, March 12, Roosevelt appear on the first of his fireside chats and explained to the American people the new banking safeguards. He asked the people to place their trust in the banks. When the banks reopened the next day, deposits exceeded withdrawals.

Reform

To guard against another stock crash, financial reforms gave government greater authority to manage currency and regulate stock transactions. In April 1933, Roosevelt dropped the gold standard and began experimenting with the value of the dollar to boost prices. In June, Congress passed the Glass-Steagall Banking Act, which created federal insurance for bank deposits up to $2500, restricted speculation by banks, and separated commercial and investment banking. Under the Federal Deposit Insurance Corporation (FDIC), fewer banks failed for the rest of the decade than in the best year of the 1920s. The FDIC still protects bank deposits today. Later the Securities Exchange Act of 1934 would establish the Securities Exchange Commission (SEC), to oversee and regulate the stock market.

Relief

The Federal Emergency Relief Administration (FERA) was also created during the first 100 days. FERA opened its door in May 1933. In its two-year existence, FERA furnished more than $1 billion in grants to states, local areas, and private charities. As the winter of 1933 – 1934 approached, Roosevelt expanded relief with an innovative shift from government handouts to a work program meant to preserve morale.

The Civil Works Administration (CWA) provided jobs in government work. The CWA employed four million Americans. Many had useful jobs repairing schools, laying sewer pipes, and building roads. The program was very costly though, and Roosevelt disbanded it in the spring of 1934.

Another work relief program established in 1933 proved even more creative. The Civilian Conservation Corps (CCC) provided jobs for young men in parks and forests. It took unmarried, 18 to 25-year-olds from relief rolls and sent them into the woods and fields to plant trees, build parks, and fight soil erosion. The CCC existed for 10 years, providing 25 million young men with jobs.

The original intent was for relief programs to only last until the crisis was over, but the Tennessee Valley Authority (TVA), a massive public works project created in 1933, continued to make contributions to regional planning beyond the crisis. For a decade, planners had dreamed of transforming the flood-ridden basin of the Tennessee River, one of the poorest areas of the country, with a program of regional development and social engineering. The TVA constructed a series of dams along the seven-state basin to control flooding, improve navigation, and generate cheap electric power. In cooperation with state and local officials, it also launched social programs to stamp out malaria, provide library bookmobiles, and create recreational lakes.

Notes

1. Franklin Roosevelt, “ “Only Thing We Have to Fear is Fear Itself:” FDR’s First Inaugural Speech,” March 4, 1933, at History Matters, George Mason University, http://historymatters.gmu.edu/d/5057/.