In his first inaugural address, United States President Franklin D. Roosevelt, made some attempt to assess the enormous damage: "The withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return." He was speaking of the Great Depression of 1929 to 1940, which began and centered in the United States but spread quickly throughout the industrial world. Despite describing the Great Depression with grim words, this economic catastrophe and its impact defied description. The United States had never felt such a severe blow to its economy. President Roosevelt's New Deal reshaped the economy and structure of the United States, however, in order to end the poverty during the crisis. The New Deal programs would employ and give financial security to millions of Americans. These programs would prove to be effective and extremely beneficial to the American society as some still provide the economic security and benefits today.

The Great Depression began by the complete collapse of the stock market on October 24th, 1929 when about 13 million shares of stock were sold. The damage was extended on Tuesday, October 29 when more than 16 million shares were sold making the day forever known as Black Tuesday. The value of most shares fell sharply, leaving financial ruin and panic in its wake. There has never been a collapse in the market that has had such a devastating and long-term effect on the economy. Businesses closed and banks failed by the hundreds due to the collapse, putting millions out of work. Wages for those still fortunate enough to have work fell sharply. The value of money decreased as the demand for goods declined. In Franklin Roosevelt and the New Deal by William E. Leuchtenburg, the economic plight of the Depression is seen. "In the three years of Herbert Hoover's Presidency, the bottom had dropped out of the stock market and industrial production had been cut more than half.. By 1932, the unemployed numbered upward of thirteen million. Many lived in the primitive conditions of a preindustrial society stricken by famine."1

Most of the agricultural segment of the economy had been in serious trouble for years. The arrival of the depression nearly eliminated it altogether, and the drought that created the 1930s Great Plains Dust Bowl greatened the damage. The government itself was sorely pressed for income at all levels as tax revenues fell; and the government during this period was more limited in its ability to respond to economic crises than it is today. The international structure of world trade also collapsed, and each nation sought to protect its own industrial base by imposing high tariffs on imported goods. This only made matters worse.

By 1932 United States industrial output had been cut in half. One fourth of the labor force--about 15 million people--was out of work, and there was no such thing as unemployment insurance. Hourly wages had dropped by about 50 percent. Hundreds of banks had failed. Prices for agricultural products dropped to their lowest level since the Civil War. There were more than 90,000 businesses that failed completely.

Statistics, however, can only partially give an account of the extraordinary hardships that millions of United States citizens endured For nearly every unemployed person, there were dependents who needed to be fed and housed Such massive poverty and hunger had never been known in the United States before. Former millionaires stood on street corners trying to sell apples at 5 cents apiece. Hundreds of pitiful shantytowns--called Hoovervilles in honor of the unfortunate Republican president who presided over the disaster--sprang up all over the country to shelter the homeless People slept under "Hoover blankets" --old newspapers--in the out-of-doors. People waited in bread lines in every city, hoping for something to eat In 1931 alone more than 20,000 Americans committed suicide.

Anyone who had even a little money was extremely lucky. A new home could be bought for less than $3,000. A man's suit cost about $10, a shirt less than 50 cents, and a pair of shoes about $4. Milk was 10 cents a quart, a pound of steak only 29 cents, and a loaf of bread a nickel. For a dime one could go to the movies, buy a nickel bag of popcorn, and even win prizes given away by the theater. Not many lucky enough to be working had much change to spend after paying rent and buying food. To turn to the government, at least during the Hoover years, was useless. There was no federally financed "safety net" of welfare programs to keep the working class from falling into poverty.

In 1931 the new president, Franklin Roosevelt, brought an air of confidence and optimism that quickly rallied the people to the banner of his program, known as the New Deal "The only thing we have to fear is fear itself," the president declared in his inaugural address to the nation. He was determined to make effective changes during his presidency. "Roosevelt moved swiftly to deal with the financial illness that paralyzed the nation. On his very first night in office, he directed Secretary of the Treasury William Woodin to draft an emergency banking bill, and gave hi less than five days to get it ready."2

The New Deal, in a certain sense, merely introduced types of social and economic reform familiar to many Europeans for more than a generation. Moreover, the New Deal represented the culmination of a 1ong-range trend toward abandonment of "laissez-faire" capitalism, going back to the regulation of the railroads in the 1880s, and the flood of state and national reform legislation introduced in the Progressive era of Theodore Roosevelt and Woodrow Wilson.

What was truly novel about the New Deal, however, was the speed with which it accomplished what previously had taken generations. Many of the reforms were hastily drawn and weakly administered with some actually contradicting others. During the entire New Deal era, public criticism and debate were never interrupted or suspended; in fact, the New Deal brought to the individual citizen a sharp of interest in government..

When Roosevelt took the presidential oath, the banking and credit system of the nation was in a state of paralysis. With astonishing rapidity the nation's banks were first closed -- and then reopened only if they were solvent. The administration adopted a policy of moderate currency inflation to start an upward movement in commodity prices and to afford some relief to debtors. New governmental agencies brought generous credit facilities to industry and agriculture. The Federal Deposit Insurance Corporation (EDIC) insured sayings-bank deposits up to $5,000, and severe regulations were imposed upon the sale of securities on the stock exchange.

By 1933 millions of Americans were out of work Bread lines were a common sight in most cities. Hundreds of thousands roamed the country in search of food, work and shelter. "Brother, can you spare a dime?" went the refrain of a popular song.

Ah early step for the unemployed came in the form of the Civilian Conservation Corps (CCC), a program enacted by Congress to bring relief to young men between 18 and 25 years of age. The CCC was run in a semi-military style and enrolled jobless young men in work camps across the country for about $30 per month. About 2 million young men took part in this program during the 193Os. During their time in the CCC, they participated in a variety of conservation projects such as "planting trees to combat soil erosion and maintain national forests; eliminating stream pollution; creating fish, game and bird sanctuaries; and conserving coal, petroleum, shale, gas, sodium and helium deposits."3

The Civil Works Administration was a work relief program that gave jobs to many unemployed people. Although this program was criticized as "make work," the jobs funded ranged from ditch digging to highway repairs to teaching. It was Created in November 1933,and was abandoned only a few months later in the spring of 1934. Roosevelt and his key officials, however, continued to favor unemployment programs based on work relief rather than welfare.

The New Deal years were characterized by a belief that greater regulation would solve many of the country’s problems. In 1933 Congress passed the Agricultural Adjustment Act (AAA) to provide economic relief to farmers. The AAA had a core to plan to raise crop prices by paying farmers a subsidy to compensate for voluntary cutbacks in production. The funds for the payments would be generated by a tax levied on industries that processed crops. By the time the act had become law, however, the growing season was well underway, and the AAA encouraged farmers to plow under their abundant crops Secretary of Agriculture Henry A. Wallace called this activity a "shocking commentary on our civilization." Nevertheless, through the AAA and the Commodity Credit Corporation, a program which extended loans for crops kept in storage and off the market, output dropped.

Between 1932 and 1935, farm income increased by more than 50 percent, but only partly because of federal programs. During the same years that farmers were being encouraged to take land out of production, which would displace tenants and sharecroppers, the farm production was significantly reduced due to a severe drought hit the Great Plains states. Violent wind and dust storms ravaged the southern Great Plains in what is known as the "Dust Bowl," throughout the 193Os, but particularly from 1935 to 1938 The damages were immense People and animals were harmed, crops were destroyed, cars and machinery were ruined. Approximately 800,000 people; often called "Okies," left Arkansas, Texas, Missouri and Oklahoma during the 1930s and 1940s Most of these travelers headed further west to California, the land of myth and promise. The migrants were not only farmers, but also professionals, retailers and others whose livelihoods were connected to the health of the farm communities. California didn't live up to their expectations, however, as conditions in the sunny state were just as bad as those in the places from which the migrants fled. Most migrants ended up competing for seasonal jobs picking crops at extremely low wages.

Although the AAA had been mostly successful, it was abandoned in 1936; when the tax on food processors was ruled unconstitutional. Six weeks later Congress passed a more effective farm-relief act, which authorized the government to make payments to farmers who reduced plantings of soil-depleting crops -- thereby achieving crop reduction through soil conservation practices.

By 1940 nearly 6 million farmers were receiving federal subsidies under the farm relief act. The new act likewise provided loans on surplus crops, insurance for wheat and a system of planned storage to ensure a stable food supply. The prices of agricultural commodities rose, leaving the farmer's with a sense of economic stability.

The Great Depression of the 1930s worsened the already black economic situation of black Americans. African Americans were the first people to be fired from their jobs as they suffered from an unemployment rate two to three times that of whites. In early public assistance programs blacks often received substantially less aid than whites, and some charitable organizations even excluded blacks from their soup kitchens. It was an extremely poor and desperate time for most African Americans.

The black American's economic struggles sparked major political developments among the blacks. Beginning in 1929, the St. Louis Urban League launched a national "jobs for Negroes" movement by boycotting chain stores that had mostly black customers but hired only white employees. Efforts to unify black organizations and youth groups later led to the founding of the National Negro Congress in 1936 and the Southern Negro Youth Congress in 1937.

The Roosevelt Administration’s accessibility to black leaders and the New Deal reforms strengthened black support for the Democratic party Roosevelt bad many black leaders, members of a so-called "black Cabinet," were served as advisers to him. Among them were the educator Mary McLeod Bethune, who served as the National Youth Administration’s director of Negro affairs; William H. Hastie, who in l937 became the first black federal judge; Eugene K. Jones, executive secretary of the National Urban League; Robert Vann, editor of the Pittsburgh Courier; and the economist Robert C Weaver.4

Blacks benefited greatly from New Deal programs though discrimination by local administrators was common. Low-cost public housing was made available to black families. The National Youth Administration and the Civilian Conservation Corps enabled black youths to continue their education. The Work Projects Administration gave jobs to many blacks, and its Federal Writers Project supported the work of many authors, among them Zora Neale Hurston, Arna Bontemps, Waters Turpin, and Melvin B. Tolson.

The Congress of industrial Organizations (CIO); established in the mid-1930s, organized large numbers of black workers into labor unions for the first time. By 1940, there were more than 200,000 blacks in the CIO, many of them officers of union locals.

The increasing pressures of the Great Depression caused President Roosevelt to back a new set of economic and social measures Prominent among these were measures to fight poverty, to counter unemployment with work and to provide a social safety net.

The Works Progress Administration (WPA), the principal relief agency of the second New Deal, was an attempt to provide work rather than welfare. Under the WPA, buildings, roads, airports and schools were constructed. Actors, painters, musicians and writers were employed through the Federal Theater Project, the Federal Art Project and the Federal Writers Project. In addition, the National Youth Administration gave part-time employment to students, established training programs and provided aid to unemployed youth. Although the WPA only included about three million jobless at a time, it had helped a total of 9 million people when it was abandoned in 1943.

The New Deal's cornerstone according to Roosevelt, was the Social Security Act of 1935. It "reversed historic assumptions about the nature of social responsibility, and it established the proposition that the individual has clear-cut social rights."5 The Social Security Act was signed into law by President Roosevelt on August 14, 1935. "In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement. Social Security created a system of insurance for the aged, unemployed and disabled based on employer and employee contributions. Social Security was funded in large part by taxes on the earnings of current workers, with a single fixed rate for ail regardless of income To Roosevelt, these limitations on the programs were compromises to ensure that the Act was passed President Roosevelt stated upon signing Social Security Act:

When congress passed the Social Security Act, the most pressing problems were double-digit unemployment and pervasive poverty. "Most families were struggling just to put food on the table and pay the rent; retirement saving was an unaffordable luxury."6 While the Social Security Act slightly affected most of the population in 1935, it began a program that has lasted for 64 years. Although its origins were initially quite modest, Social Security today is one of the largest domestic programs administered by the U.S. government. Millions of people depend on Social Security to protect them in their old age. "Without Social Security, the incomes of approximately 16 million people - about half of the retirees - would fall below official poverty thresholds."7

While the Social Security program is very complex and deals with more than 6 million employers, tens of millions of beneficiaries, and over 100 million taxpayers, its administrative costs are very low - roughly 1 percent of retirement and survivor pension payments - well below those of private pension and insurance plans. The average earnings of Social Security in 1998 were just under $28,000. The benefit that was paid to a worker who retired at the age of 62 whose earnings placed him at the same relative position in the earnings distribution in every year of a thirty-five year career would by $780 per month.8

From its modest beginnings, Social Security has grown to become an essential aspect of modern life. One in seven Americans receives a Social Security benefit, and more than 90 percent of all workers are in jobs covered by Social Security. From 1940, when slightly more than 222,000 people received monthly Social Security benefits, until today, when over 42 million people receive such benefits; Social Security has grown steadily. These graph's show the growth of Social Security in the United States from 1937, two years after the Social Security Act was created, to 1998. They also show the Supplemental Security Income (SSI) which was created in the 1972 Social Security Amendments. The SSI program combined three previous programs that gave need to the needy aged, blind and disabled individuals.

Under Franklin Roosevelt, and his New Deal; the government’s role in America grew more than in any era before. During this time between 1932-1940 there were numerous examples of growth of the government About thirty-two new government agencies were created during the eight-year period While many of the agencies formed have been abolished or replaced by another, some agencies still stand today. Leuchtenberg sums up the degree of change that occurred during the New Deal. "The six years from 1933 through 1938 marked a greater upheaval in American institutions than in any similar period in our history'." The programs and institutions that were created prove to be invaluable to the success and growth of the most powerful nation in the world.

Compton’s Interactive Encyclopedia, 1996.

Leuchtenburg, William E. Franklin D. Roosevelt and the New Deal. Harper and Row. New York, 1963.

Reischauer, Robert D., Countdown to Reform. The Century Foundation Press. New York, 1998.

Patterson, James T. Grand Expectations. Oxford University Press. New York, 1996.

Roosevelt's first and second inaugural addresses