The New Deal's Success

The New Deal's Success

As the days approached for Roosevelt’s inauguration in March 1933, the national banking system was reaching its breaking point. Numerous states across the country and even the New York Stock Exchange were completely shut down, causing a near collapse of the American capitalist system. But as soon as Roosevelt was sworn into office, he immediately enacted the Emergency Banking Act, closing all banks for one week. During this week, the Treasury Department would determine which banks were safe to reopen and which needed to be reorganized. The night before the banks reopened, only one short week after taking office, Roosevelt delivered the first of many fireside chats on the radio. He spoke to Americans across the country in a calm, fatherly voice, reassuring them that the banks were now safe and encouraging them to put their deposits back in. This alleviated both their panic and their distrust of banks to some extent. The following day, deposits flooded back into banks again. These two relief measures successfully lessened the banking crisis and reassured Americans.
Immediately following the banking crisis, Roosevelt sponsored reform bills to ensure that a disaster like that would never happen again. The Glass-Steagall Banking Act created the Federal Deposit Insurance Corporation (FDIC). It protected the deposits of individuals by insuring those deposits to a certain point. As reforms were soothing the banking system, the volatile stock market continued to go unregulated. That is, until the Truth in Securities Act required all companies issuing stock to provide detailed financial reports to the public. The next year, Congress passed the Securities and Exchange Act to put a stop to insider trading. These reform measures began to finally regulate the once combustible fiscal system in America.
The banking crisis was not the only issue that needed immediate relief measures. With millions of Americans out of work, Roosevelt needed to deal with rising...

Similar Essays