The Great Depression, the New Deal, and World War II 223obligations payable in legal tender; authorized a national employment
system; set up the Federal Deposit Insurance Corporation to guarantee
individual bank deposits under $ 5 , 000 (FDIC); created the Home
Owners Loan Corporation to refinance home mortgages for owners
who were not farmers (HOLC); refinanced farm mortgages for long
terms at low interest; and instituted a better rule of rate-making to
improve the operation of railroads. The NIRA established the Public
Works Administration to stimulate the economy by constructing huge
public works, and it guaranteed the right of workers to organize and
bargain collectively through representatives of their own choosing.
By the time this Hundred Day Special Session of Congress ended,
an extraordinary variety of economic reforms had been enacted. Farm-
ers, laborers, and industrialists were affected. By this legislation the
nation had committed itself to assist the unemployed, guarantee bank
deposits, protect individual homeowners and farmers, and undertake
vast public works projects.
Still, the depression persisted. By the end of 1933 the income of most
Americans had declined by half. A million or more individuals had
been evicted from their homes when they could not pay the rent or
meet their mortgage payments. Some 9 , 000 banks and 86 , 000 busi-
nesses had failed. A farmer received ten cents for a bushel of oats, sev-
eral pennies below what it had cost him to raise the crop. Approximately
20 million Americans during this awful time needed some form of
federal relief to stay alive.
The growing reliance by Congress on the chief executive to move
the country out of the depression was demonstrated most forcefully
when the administration proposed a Reciprocal Trade Agreement Act
that permitted the President to raise or lower existing tariff rates up to
fifty percent for countries that would reciprocate with similar conces-
sions. Republicans in the House of Representatives strongly objected to
the proposal, claiming that it violated the Constitution because all bills
raising revenue must originate in the lower house. So the Democrats
amended the bill to limit the President’s negotiating power to three
years and to terminate any agreement after three years. The measure
then passed, and Roo sevelt signed it on June 12 , 1934. By this action
Congress surrendered to the executive a power it had jealously guarded
for more than 150 years.