The first phase (1933–34) attempted to provide recovery and relief from the Great Depression through programs of agricultural and business regulation, inflation, price stabilization, and public works. Meeting (1933) in special session, Congress established numerous emergency organizations, notably the National Recovery Administration (NRA), the Federal Deposit Insurance Corporation (FDIC), the Agricultural Adjustment Administration (AAA), the Civilian Conservation Corps, and the Public Works Administration. Congress also instituted farm relief, tightened banking and finance regulations, and founded the Tennessee Valley Authority. Later Democratic Congresses devoted themselves to expanding and modifying these laws. In 1934, Congress founded the Securities and Exchange Commission and the Federal Communications Commission and passed the Trade Agreements Act, the National Housing Act, and various currency acts.
The second phase of the New Deal (1935–41), while continuing with relief and recovery measures, provided for social and economic legislation to benefit the mass of working people. The social security system was established in 1935, the year the National Youth Administration and Work Projects Administration were set up. The Fair Labor Standards Act was passed in 1938. The Revenue Acts of 1935, 1936, and 1937 provided measures to democratize the federal tax structure. A number of New Deal measures were invalidated by the Supreme Court, however; in 1935 the NRA was struck down and the following year the AAA was invalidated. The President unsuccessfully sought to reorganize the Supreme Court. Meanwhile, other laws were substituted for legislation that had been declared unconstitutional.
The New Deal, which had received the endorsement of agrarian, liberal, and labor groups, met with increasing criticism. The speed of reform slackened after 1937, and there was growing Republican opposition to the huge public spending, high taxes, and centralization of power in the executive branch of government; within the Democratic party itself there was strong disapproval from the “old guard” and from disgruntled members of the Brain Trust. As the prospect of war in Europe increased, the emphasis of government shifted to foreign affairs. There was little retreat from reform, however; at the end of World War II, most of the New Deal legislation was still intact, and it remains the foundation for American social policy.
See B. Rauch,
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