New Deal Documents

Background on the Federal Deposit Insurance Corporation (FDIC)

& The Securities and Exchange Commission (SEC)

One of FDR's major accomplishments during his first 100 days in office was a program that revolutionized the financial industry. The Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation, FDIC (FDIC) were established by the New Deal. Because of these institutions, for the first time, the business of buying and selling stock in companies was regulated through the SEC, and the bank accounts of ordinary people were insured through the FDIC.

FDR said the following at his inaugural address. “ The rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure…Practices of the unscrupulous money changers stand rejected by the heart and minds of men… there must be strict supervision of all banking and credits: and investments, so that there will be an end to speculation with other people's money."

Banks could no longer buy stocks with depositors' money. Companies that wanted to sell shares to the public to raise money had to share a lot of financial information with potential investors. For the first time, investors could find out if a company was worth the stock price it was asking. The SEC also regulated the major stock exchanges, the brokers and dealers, mutual funds and investment advisors.

The FDIC helped citizens because for the first time they knew that their money in the bank was insured. If the bank went out of business, the FDIC would pay back depositors up to certain limits. FDIC helped convince people that keeping their money in banks was safe, and this helped the economy overall.

The Social Security Act

President Franklin D. Roosevelt gave this speech on August 14, 1935

when he signed the Social Security Act.

Today a long-held hope is largely fulfilled. The civilization of the past 100 years, with its startling industrial changes, has made life insecure. Young people have come to wonder what would happen to them in old age. The man with a job has wondered how long the job would last.

This social security measure gives some protection to 30 million of our citizens who will receive direct benefits through unemployment compensation (benefits), through old-age pensions, and through increased services for the protection of children and the prevention of ill health.

We can never insure 100 percent of the population against 100 percent of the ups and downs of life, but we have tried to pass a law which will give some protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.

This law, too, represents a cornerstone in a structure intended to lessen the force of possible future depressions. It will act as a protection to future Administrations against the necessity of going deeply into debt to help the needy. It is, in short, a law that will take care of human needs and at the same time provide the United States a sound economic structure.

Vocabulary Pension: a regular payment made to someone in retirement Cornerstone: a stone that lies at the foundation of a building

Source: August 14, 1935, excerpt from President Franklin D. Roosevelt’s speech, Washington, D.C.

History of the Civilian Conservation Corp (CCC)

The purpose of the CCC was to create work opportunities…directed toward conservation of natural resources.

…by July 1933, 250,000 boys were enrolled. The Army had successfully undertaken the largest peacetime mobilization of men the United States had ever seen and had built more than 1,300 camps and had installed recruits in all of them.

Funding for the program was spent primarily on labor costs rather than equipment or

machinery. This was one of its strong points and also a weak point, as critics of the program derided the use of 100 men shoveling dirt to create a road rather than using a road grader. Yet, by the later years of the CCC, heavy equipment was being used and operating the machinery became an important learning opportunity for the young recruits. The men were expected to complete a duty period of six months, and could re-apply for six  month stints, for up to two years.

History of the Works Progress Administration (WPA)

The Works Progress Administration was designed to increase the purchasing power of persons on relief by employing them on useful projects….The WPA philosophy was to put the unemployed back to work in jobs which would serve the public good and conserve the skills and the self-esteem of workers throughout the U.S. The WPA employed out of work laborers, along with artists, writers, and musicians…

The WPA program usually selected men from the local community who were on county relief rolls. The WPA paid workers to labor on a variety of tasks including: building fences, cleaning up and salvaging materials from abandoned farms, building roads, digging ditches, building water control structures, and constructing administration buildings. The number of men working on a WPA projects varied widely.

The labor force of the WPA was primarily middle-aged to elderly men who were without a means of supporting their families.

Congress began cutting appropriations for WPA activities in 1939. By 1941 the private sector job market was improving substantially, and with World War II looming, the need for the agency was questioned. In June, 1943, the agency officially went out of existence.

Source: United States Fish and Wild Life Service, Region 6, Historical and Architectural Assessment of the Depression Era Work Projects, prepared by Lou Ann Speulda.