FDR's New Deal Flashcards
What did the New Deal do overall?
The New Deal created a broad range of federal government programs that sought to offer economic relief to the suffering, regulate private industry, and grow the economy.
What are the 3 R’s and what did they do in the New Deal?
- Relief (for the unemployed)
- Recovery (of the economy through federal spending and job creation)
- Reform (of capitalism, by means of regulatory legislation and the creation of new social welfare programs).
How did the deal impact the position of government regarding American citizens?
It fundamentally reshaped American political culture around the principle that the government is responsible for the welfare of its citizens.
What was Roosevelt’s first project and why was it made?
Roosevelt’s first project upon taking office was to address the banking crisis (known as the bank holiday). It was made to restore confidence in banks.
What did a national bank holiday do and what was it’s purpose?
A bank holiday is where banks close for a day that was enforced in order to stop the runs on banks (everyone withdrawing their money at the same time).
What was the Emergency Banking Relief Act and how did it help?
This act allowed financially stable, or solvent (able to pay one’s debts), banks to reopen under government supervision. The government would ensure that these banks remained solvent and avoided risky practices.
What resulted after the banking holiday regarding the stability of banks?
Two-thirds of all banks had been declared solvent and were reopened.
How were accounts in these banks run?
Accounts in these banks were now insured by a new government agency, the Federal Deposit Insurance Corporation, or FDIC.
What did the FDIC do in order to protect customers’ deposits from bank failures?
The FDIC provided up to $5,000 in insurance for all banking deposits. If an FDIC-insured bank failed, the FDIC would refund the customers’ deposits.
What corporation would buy out banks in financial trouble, and what would they do with these banks?
The Reconstruction Finance Corporation (RFC), a government agency it would and be in charge of keeping these banks open while sorting out issues and reorganizing them.
How did the RFC exactly help banks in financial trouble?
The RFC calculated the actual value of a bank’s assets, such as stocks it had purchased, deposits, and loans it had financed as well as its debts. (The RFC had to decide whether to sell at a loss or to hold as an investment, hoping that the value would rise again.) The RFC also made certain to return deposits to any customers who asked for their money back.
How was the government involve in the RFC.
Congress funded the RFC with large amounts of cash, so it could refund customer deposits without selling off its assets at huge losses.
What was a popular way Roosevelt would communicate to Americans? What was an example relating to the banks?
The president’s radio addresses came to be known as “fireside chats”. On March 12, 1933, Roosevelt explained the new banking insurance, reassured the public that their money was now safe in America’s banks, and asked Americans to help one another by supporting the banks and showing their faith in the nation.
What was the public’s response to the March 12 address?
The response was overwhelmingly positive. Rather than another bank run, March 13 saw depositors across the country standing in line at their banks to return the cash they had withdrawn.
During the special session Roosevelt called for Congress (lasting from March to June, 1933), what was passed and what did they do?
Multiple bills were passed during the session that provided relief for Americans on multiple levels, from employment and social welfare, to banking and agricultural aid.
