The New Deal was comprised of a multitude of initiatives. Started by Franklin D. Roosevelt upon his entry into office in 1932. FDR took office in midst of the Great Depression he won the campaign by promising a “new deal” for the American people (Foner, 810). The first of many initiatives started was the Emergency Banking Act which promoted economic recovery to the people by providing funds to threatened institutions, led to secured deposits, and the preventing of banks from failing.
Following the market crash, the American people withdrew their money fearful that they would not be able to count on the gold standard of redeeming paper money in gold. The transformation of the American financial system was now underway with funds being provided to threatened institutions by the Emergency Banking Act. This in turn lead to businesses being able to provide employment to a much needed nation as well as the availability of government jobs.
The provided security of deposits via the establishment of the Federal Deposit Insurance Corporation (FDIC) also paved the way for a recovery of the economic system. Although people were still hesitant to place their trust in a system that had drastically failed previously.
Franklin D Roosevelt also took the United States off the gold standard- thus making possible the issuance of more money in the hope of stimulating business activity. Together, these measures rescued the financial system and greatly increased the government’s power over it (Foner, 813). This resulted in not a single bank failure during 1936 showing the recovery of not only the banks but the economy as a whole.
Americans shared mixed feelings in regards to the New Deal. Fred Thompson said, “Here was an economic system that had quit work.” “But certain adjustments were made that allowed people to eat” in describing his personal feelings toward the New Deal (Terkel, 309).Ultimately the Emergency Banking Act allowed for the occurrence of the economic recovery even if at a slow pace disliked by the people.
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