New Deal "Alphabet Agencies"

© 2001 by David C. Hanson, Virginia Western Community College

Accepting the Democratic nomination for

President in 1932, Franklin Delano
Roosevelt promised the American people a
"new deal." Once elected, he delivered on
his promise.

In his inaugural address on March 4, 1933, he declared: "This nation asks for action and action now."
With the famous phrase, "the only thing we have to fear is fear itself," he promised to exercise "broad
executive power to wage war against [the Depression]." What followed was a dizzying array of
initiatives. Roosevelt immediately gathered a "Brain Trust" of economic advisors and instructed his staff
to "take a method and try it. If it fails, try another. But above all try something."

In his first hundred days in office, Roosevelt called Congress into emergency session and launched a
record fifteen major pieces of legislation. Between 1933 and 1938 the administration and Congress
created dozens of federal programs collectively known as the New Deal, and often referred to as the
"Alphabet Agencies."

The Three R's: Relief, Recovery, Reform

Briefly stated, the New Deal sought relief for the needy, economic recovery, and reform of American
capitalism. The three-R objectives often overlapped and sometimes conflicted with one another. (For
example, the Agricultural Adjustment Act was primarily a relief measure for farmers, but it also aided
recovery, and it had the unintended consequence of exacerbating the unemployment problem.) In the first
two years, relief and immediate recovery were the primary goals. Most of the bolder relief and reform
programs emerged in the Second New Deal (1935-1936).

Some programs worked better than others; most were designed to last no longer than the crisis; but the
legacy of the New Deal is a lasting one. "The many programs of the New Deal--home loans, farm
subsidies, bank deposit insurance, relief payments and jobs, pension programs, unemployment insurance,
aid to mothers with dependent children, rural electrification, western water management--touched the
lives of ordinary Americans, made them more secure, and formed the outlines of the new welfare state"
(Davidson, Lytle, et al., Nation of Nations: A Narrative History of the American Republic).

Below is a partial list of New Deal "alphabet agencies" and their primary function (relief, recovery, or
reform).

Created in 1933, he AAA paid farmers for not

AGRICULTURAL ADJUSTMENT ACT
planting crops in order to reduce surpluses,
(Recovery)
increase demand for seven major farm
commodities, and raise prices. Farm income rose,
but many tenants and share-croppers were pushed
into the ranks of the unemployed. In 1936 the
Supreme Court voided the AAA.

Created in 1933, the CCC took unmarried men

CIVILIAN CONSERVATION CORPS aged 18-25 from relief rolls and sent them into the
(Relief) woods and fields to plant trees, build parks, roads,
and fight soil erosion on federal lands. Young
men sent their $30 a month home to their families
and left a legacy of outdoor recreation areas
(including the Blue Ridge Parkway). The CCC
provided jobs for 2.5 million young men during
its ten years.
 Created in 1933, the CWA employed four million
CIVIL WORKS ADMINISTRATION
people--paid an average of $15 a week--many in
(Relief)
useful construction jobs such as repairing schools,
laying sewer pipes, building roads. Some CWA
jobs, however, were criticized as useless (e.g.,
leaf raking). Roosevelt disbanded the program
after less than a year.

FAIR LABOR STANDARDS ACT The last major piece of New Deal legislation
(Reform) (1938), this important labor law set minimum
wage (25 cents and hour) and maximum hour
standards (establishing the 40-hour work week).
It also severely curbed the use of child labor.

The FSA was created in 1937 (formerly called the

FARM SECURITY ADMINISTRATION
Resettlement Administration in 1935) to aid
(Relief)
sharecroppers. The FSA set up temporary
housing for "Okies" and "Arkies" (Dust Bowl
refugees from Oklahoma and Arkansas) who
migrated to California in hope of finding work.

To restore confidence in banks and encourage

FEDERAL DEPOSIT INSURANCE CORP.
savings, Congress created the FDIC to insure
(Reform)
bank customers against the loss of up to $5,000
their deposits if their bank should fail. Created by
the Glass-Steagall Banking Reform Act of 1933,
the FDIC is still in existence.

FEDERAL EMERGENCY RELIEF ADMIN. Created in 1933, FERA supported nearly five
(Relief) million households each month and funded
thousands of work projects for the unemployed.
It also provided vaccinations and literacy classes
for millions of poor people.

The FHA was created in 1934 to stimulate the

FEDERAL HOUSING ADMINISTRATION
building industry by providing small loans for
(Recovery)
home construction. A related program, also
created in 1934, was the Home Owners' Loan
Corporation (HOLC).

The Indian Removal Act of 1934 (called the

INDIAN REORGANIZATION ACT
"Indian New Deal, reversed the forced-
(Reform)
assimilation policies in effect since the Dawes
Act of 1887. The IRA tried to stop the loss of
Indian lands and encouraged Native American
tribes to establish local self-government and to
preserve their native crafts and traditions.

NATIONAL LABOR RELATIONS ACT The NLRA (also called the Wagner Act) of 1935
(Reform) created the National Labor Relations Board to
protect the rights or organized labor to organize
and collectively bargain with employers.

The National Industrial Recovery Act of 1933

NATIONAL RECOVERY ADMINISTRATION created the NRA to promote economic recovery
(Recovery) by ending wage and price deflation and restoring
competition. The NRA set business codes and
quotas. Under its symbol of a blue eagle and
slogan ("We Do Our Part"), the NRA temporarily
restored investor confidence and consumer
morale, but it failed to stimulate industrial
production. In 1935 the Supreme Court declared
the NIRA unconstitutional.

NATIONAL YOUTH ADMINISTRATION Created under the Emergency Relief Act of 1935,
(Relief) the NYA provided more than 4.5 million jobs for
 young people.

Established by the NIRA in 1933, the PWA was

PUBLIC WORKS ADMINISTRATION intended both for industrial recovery and
(Relief/Recovery) unemployment relief. Eventually over $4 billion
was spent on 34,000 construction projects
including public buildings, highways, bridges
(e.g., San Francisco's Golden Gate Bridge), and
dams for water and power.

RURAL ELECTRIFICATION Before the New Deal, only 10 percent of the

ADMINISTRATION country outside cities and towns had electricity.
(Reform) The REA (1935) gave low-cost loans to farm
cooperatives to bring power into their
communities. By 1941, the REA succeeded in
raising to 40 percent the number of farms with
electricity.

SECURITIES AND EXCHANGE The SEC was created in 1934 to serve as a federal
COMMISSION "watchdog" administrative agency to protect
(Reform) public and private investors from stock market
fraud, deception and insider manipulation on Wall
Street. The SEC is still in existence [its
reputation was tarnished a bit by the Enron
collapse in 2001-02].

The Social Security Act of 1935 established the

SSA to administer a national pension fund for
SOCIAL SECURITY ADMINISTRATION retired persons, an unemployment insurance
(Reform) system, and public assistance programs for
dependent mothers, children, and the physically
disabled. The pension was financed by a payroll
tax to begin in 1937. It exists to this day as the
nation's most important and expensive domestic
program, covering over 40 million Americans and
accounting for about one-fourth of the federal
budget.

Perhaps the most ambitious undertaking of the

TENNESSEE VALLEY AUTHORITY New Deal, the TVA was a comprehensive federal
(Reform) agency created in 1933 for the economic
development of the Tennessee River watershed.
The TVA built twenty dams to control flooding,
generate hydroelectrical power, increase
agricultural production, and revitalize the
Tennessee Valley region. The TVA also
provided jobs, low-cost housing, reforestation and
other services.

Established under the $4.8 billion Emergency

WORKS PROGRESS ADMINISTRATION Relief Appropriation Act of 1935, the WPA
(Relief) lasted until 1943 and employed at least 8.5
million people at an average of $2 a day. They
built thousands of roads, bridges, schools, post
offices and other public construction projects. In
addition, under the WPA's Arts Program,
thousands of unemployed writers, musicians,
artists, actors, and photographers temporarily
went on the federal payroll, producing public
projects ranging from murals to national park
guidebooks.*
*The WPA's Arts Program included the Federal Writers Project (FWP), which produced nearly a
thousand publications; the Federal Music Project (FMP) commissioned musical compositions and
funded touring orchestras; the Federal Art Project (FAP) funded sculptures, illustrations, and
paintings--most notably murals on the walls and ceilings of thousands of post offices and other
public buildings; the Federal Theater Project (FTP) funded plays [many of which were so
controversial that the House Un-American Activities Committee and Congress shut down the project
in 1939].
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