New Deal, the name that was given to the reform program of President Franklin D. Roosevelt from 1933 to 1939. He originated the term in his 1932 Democratic Presidential nomination acceptance speech when he said: "I pledge you, I pledge myself, to a new deal for the American people." The phrase combined Theodore Roosevelt's "square deal" and Woodrow Wilson's "new freedom."
The New Deal attempted to provide relief to the unemployed; promote recovery from the economic depression; and carry out a program of political, economic, and social reforms. These goals were pursued by greatly expanding the functions of the federal government.
At the time of Roosevelt's inauguration on March 4, 1933, the depression had dropped economic activity to a new low. Roosevelt immediately closed all banks as an emergency measure and summoned Congress into special session. Within a hundred days Congress had adopted a drastic program of reforms and innovations. In order to raise farm income, the Agricultural Adjustment Act (AAA) established subsidy payments for farmers who would limit production. The National Industrial Recovery Act was typical of this "first new deal" in seeking economic recovery by planning that involved cooperation between government, business, and labor, while suspending the anti-trust laws.
Other acts established the Tennessee Valley Authority; regulated stock exchange and banking activities; employed millions of adults and youths on public works programs; established new federal responsibility for relief; and pledged huge sums to save farms and homes from foreclosure. The economy experienced an upturn and national morale rose.
After the Supreme Court in 1935 declared the National Industrial Recovery Act unconstitutional, President Roosevelt turned to a new program of anti-trust legislation and expanded public works. In addition, the National Labor Relations Act threw the weight of government behind labor unions and collective bargaining. Social Security was also established in 1935. This "second-new deal" restored the dynamism of the Roosevelt program. The popularity of the New Deal was proved by Roosevelt's landslide 1936 reelection victory.
Despite the New Deal, unemployment remained high and national output did not pass the 1929 level until the spring of 1937. Roosevelt then cut government spending, and the economy suffered a sharp recession until well into 1938. The last major piece of New Deal legislation established minimum wages and maximum hours of labor, in 1938. (A 1939 law created several new agencies, but they merely took over functions previously handled by other agencies.) In the election of 1938 Republicans and conservative Democrats won additional Congressional seats, dimming chances for further New Deal legislation. In addition, it was increasingly clear that there would soon be a European war and the administration began to concentrate most of its attention on foreign affairs and national defense.