Concept in Definition ABC

In October 1929 there was an unexpected episode that had consequences on the whole of the economy worldwide, the collapse of the New York Stock Exchange, also known as the Crack of 29 (the collapse of the system occurred on a Thursday and that is why the term "The Black Thursday" was coined). Before long the American economy began to falter and in 1932 Franklin was elected president. Delano Rooselvelt, a Democratic president who occupied the White House after a Republican term of twelve years.

The name New Deal comes from Rooselvet's presentation at the July 1932 Democratic convention that took place in Chicago. His speech as presidential candidate had a suggestive title: "A New Deal", in Spanish "a new deal."

Roosevelt's proposals were intended to restore the nation's confidence and give the economy a boost

The New Deal consisted, first, of correcting the financial system. In this way, measures were adopted to regulate banking operations, investments and the granting of credits. To achieve this objective, bankers were obliged to guarantee bank deposits and, on the other hand, laws for bankers to act under government supervision and a commission was established to regulate the values. All this had a primary objective: to avoid the speculation that the crash of 29 had caused. In plain words we could say that Roosevelt cleaned up Wall Street.

To win the confidence of the Rooselvelt citizens leaned on the radio. His messages detailed the New Deal measures and harangued the population for him to have an active attitude towards financial reforms.

His words had an effect, since after his first radio speech there was a notable increase in income banking (for the first time since the Crack of 29 the banks had sufficient funds).

One of the first decisions that were adopted was the legalization of alcohol consumption and with this measure the prohibition established during the law dry. With the legalization they also acted against the mafias.

The social dimension

To control the prices of basic agricultural products, the law of the three A's (Agricultural Adjustement Act or law of agricultural adjustment in Spanish) was approved. In a complementary manner, the peasants received facilities to access bank loans.

In order to support uprooted young people, a plan of conservation of nature (CCC, Civilian Conservative Corps).

Homeowners received facilities so that they could apply for bank loans (this law also promoted the building).

Citizens played an important role

Not all the measures were legislative in nature and, in fact, the civil society was actively organized. Thus, to combat the despair of the unemployed in some cities, Unemployed Councils were formed that facilitated food, food and clothing (these organizations had a socialist inspiration and also organized citizen actions to stop the evictions).

Fotolia photos: Oxana Stepanova / Agor2012