TOEFL Reading Practice #035 — One Name, Two New Deals

One Name, Two New Deals

¶1 Between 1933 and 1938, President Franklin D. Roosevelt's administration pushed through dozens of programs meant to pull the United States out of the Great Depression, a prolonged economic collapse that had left roughly a quarter of American workers without jobs. All of it is usually grouped under a single name, the New Deal, as though it had been one continuous plan. That label hides a real split. Historians generally divide the effort into two distinct phases, separated by a legal crisis in 1935. Each phase had its own target and its own idea of how government should fight economic hardship. The first phase worked mainly through emergency measures built in cooperation with existing businesses. The second, launched only after that approach ran into serious trouble, aimed instead at guarantees meant to outlast any single crisis.

¶2 The first phase, often called the First New Deal, began within days of Roosevelt's March 1933 inauguration. Banks across the country had failed or closed their doors, so Congress first passed the Emergency Banking Act, which allowed regulators to inspect banks and reopen only the ones judged sound, restoring enough public confidence that deposits soon exceeded withdrawals. Relief programs followed quickly. The Civilian Conservation Corps eventually employed roughly three million unemployed young men. They planted trees and built trails in national parks, earning a wage that most sent home to their families. The Agricultural Adjustment Act paid farmers to grow less, aiming to raise crop prices that had collapsed under oversupply. The National Industrial Recovery Act, often shortened to the Recovery Act, went further still. It invited entire industries to write shared codes setting minimum wages and prices, in exchange for temporary freedom from certain antitrust laws. Each program treated the emergency as something to be managed alongside business, not against it.

¶3 That approach did not survive contact with the courts. In 1935, the Supreme Court ruled that the Recovery Act had handed the president more regulatory power than the Constitution allowed. Within a year, it also struck down the Agricultural Adjustment Act on similar grounds. Roosevelt responded with a new set of programs, often called the Second New Deal, that avoided writing codes with industry and instead built guarantees outside business control entirely. The Social Security Act of 1935, shaped in large part by Labor Secretary Frances Perkins, created a fund, paid into by workers and employers during their working years, that guaranteed a pension after retirement and a benefit for the unemployed. This system asked nothing of private industry beyond payroll contributions, a sharp break from the earlier system of industry-written codes. The National Labor Relations Act, also known as the Wagner Act, guaranteed workers the right to collective bargaining, the practice of negotiating pay and working conditions through a union rather than as individual employees. The Works Progress Administration hired millions directly onto the government payroll to build roads, bridges, and schools.

¶4 The contrast between the two phases runs deeper than the calendar. The First New Deal treated recovery as something achieved through cooperation, asking businesses to accept government guidance in exchange for stability. The Second New Deal treated security as something owed directly to individual citizens, largely bypassing business as a partner. Not every program fits neatly into one phase or the other, and emergency relief spending continued well after 1935. But the shift in method was real: fewer programs asking industry to cooperate voluntarily, more programs creating payments and rights that no future administration could easily take back.

¶5 The division between emergency management and permanent guarantee mattered well beyond Roosevelt's presidency. [A] Programs built during the Second New Deal, especially Social Security, became a fixed part of American government that later administrations expanded rather than dismantled. [B] Programs built during the First New Deal mostly did not survive in their original form. [C] The Recovery Act's system of industry codes was never revived after the Supreme Court struck it down, and the Agricultural Adjustment Act was rewritten to survive judicial review rather than restored as it had been. [D] Historians still argue over which phase did more to end the Depression, since full economic recovery did not arrive until wartime government spending began in the early 1940s. What is not disputed is that the New Deal changed what American citizens expected their government to guarantee them, regardless of which phase a given program belonged to.