The First New Deal: Hundred Days and the Alphabet Agencies
A Country in Free Fall
When Franklin Roosevelt was sworn in on 4 March 1933, around 13 million Americans were unemployed — about a quarter of the workforce. Thousands of banks had collapsed since 1929, wiping out the savings of millions of depositors. Industrial production had halved. Hoover’s belief in ‘rugged individualism’ and minimal federal action had been overtaken by events. Roosevelt’s inaugural address declared, “the only thing we have to fear is fear itself,” and promised ‘action, and action now’. The next three months — the Hundred Days — produced the most active legislative period in American peacetime history.
Roosevelt took office on 4 March 1933 with around 13 million Americans unemployed and a banking system in collapse. In his first hundred days Congress passed 15 major laws and created the alphabet agencies that defined the First New Deal.
Banking First: The Emergency Banking Act
Roosevelt’s first move was to stop the bleeding. On 6 March he declared a four-day ‘bank holiday’ and closed every bank in the country. On 9 March Congress passed the Emergency Banking Act in just eight hours. Treasury inspectors examined the books of every bank and reopened only those judged sound. On 12 March Roosevelt gave the first of his famous radio ‘fireside chats’ explaining what had been done in plain language. When banks reopened the following Monday, deposits flooded back in. Within a fortnight roughly $1 billion of cash had been redeposited. The panic was over.
In June 1933 the Glass-Steagall Act went further: it created the Federal Deposit Insurance Corporation (FDIC), which insured personal deposits — $2,500 at first, raised to $5,000 in 1935 and separated commercial from investment banking. Together these measures restored confidence that money put in a bank would still be there in the morning — the foundation on which everything else depended.
The Alphabet Agencies
Confidence restored, Roosevelt then attacked unemployment. Congress created a flurry of new federal agencies, each known by its initials. Together they became the alphabet agencies.
The Civilian Conservation Corps (CCC), created in March 1933, gave young unmarried men aged 18–25 work in national forests, parks and on flood-control schemes. Recruits earned $30 a month, of which $25 was sent home to their families. Around 2.5 million young men passed through the CCC by 1942, planting roughly three billion trees and building 800 state parks. It was the most popular New Deal agency and became a symbol of recovery on the ground.
Farmers were saved by the Agricultural Adjustment Act (AAA) of May 1933, which paid farmers to reduce production, lifted prices and refinanced farm mortgages. Some six million pigs were slaughtered to cut surpluses — controversial at a time when families were going hungry, but farm income rose by around 50% within two years. The Federal Emergency Relief Administration (FERA), led by Roosevelt’s adviser Harry Hopkins, distributed $500 million in direct grants to states for poor relief — a federal commitment to relief that had no precedent.
The TVA, NRA and PWA
The most ambitious project was the Tennessee Valley Authority. The Tennessee Valley covered seven southern states and was one of the poorest regions in America: soil exhausted by cotton farming, no electricity, regular flooding. The TVA built 20 dams, brought electricity to over half the valley’s homes by 1940, controlled floods and replanted forests. It was federal economic planning on a scale critics called socialist — and a transformation supporters called miraculous.
The National Recovery Administration (NRA), launched in June 1933, set codes of fair competition for industry covering wages, hours and prices. Businesses that signed up displayed the NRA’s blue eagle symbol. Roughly 2.5 million employers signed. The Public Works Administration (PWA), with a $3.3 billion budget, funded large infrastructure projects — the Grand Coulee Dam, the Lincoln Tunnel, the Triborough Bridge in New York, schools, hospitals and aircraft carriers. Together NRA and PWA aimed to lift wages, employ men on big projects and prime the pump of the wider economy.
CCC — relief: jobs for young unmarried men in conservation, $30 a month with $25 sent home. AAA — recovery: paid farmers to cut production to lift prices. CCC and AAA were the headline relief and farm measures. TVA — reform: federal regional planning, dams and hydroelectricity for the Tennessee Valley. NRA — recovery: industry codes on wages, hours and prices, blue eagle symbol. PWA — recovery: $3.3 billion for large public works. FERA — relief: federal grants to states for direct poor relief. The agencies are commonly grouped under Roosevelt’s ‘three Rs’: Relief, Recovery and Reform.
A New Federal Government
The Hundred Days did more than create agencies. They redrew the relationship between Washington and ordinary American life. For the first time in peacetime, the federal government employed people directly, regulated wages and prices, paid farmers, insured deposits and built infrastructure on a national scale. Roosevelt’s fireside chats — intimate radio addresses delivered in clear language — turned the presidency into a daily presence in the millions of homes that owned a radio. By the end of June 1933, unemployment had fallen modestly and confidence had risen sharply. The First New Deal had not ended the Depression. It had, however, prevented collapse and given Americans the sense that someone was in charge.
The First New Deal is often summarised by Roosevelt’s ‘three Rs’: Relief (FERA, CCC), Recovery (AAA, NRA, PWA) and Reform (TVA, FDIC under Glass-Steagall). It did not end the Depression, but stopped the collapse and rebuilt confidence.