The regulation of banks and the stock exchange did not mean that Roosevelt was antibusiness. He affirmed his belief in a balanced budget and sought to avoid a $1 billion deficit by cutting government workers’ salaries and lower-ing veterans’ pensions. Roosevelt also tried to keep the budget under control by ending prohibition, which would allow the government to tax alcohol sales and eliminate the cost of enforcement. The Twenty-first Amendment, ratified in 1933, ended the more than decade-long experiment with temperance.

These initial measures restored confidence in the presidency and in the federal government’s willingness and ability to redress some of the problems responsible for the economic crisis. Yet the Roosevelt administration had much more to accomplish before those hardest hit by the depression felt some relief. Roosevelt viewed the Great Depression as a crisis analogous to war and adapted many of the bureaus and commissions used during World War I to ensure productivity and mobilize popular support to fit the current economic emergency. Many former progressives lined up behind Roosevelt, including women reformers and social workers who had worked in government and private agencies during the 1920s to develop programs for mothers, children, and the poor. At his wife Eleanor’s urging, Roosevelt appointed one of them, Frances Perkins, as the first woman to head a cabinet agency—the Department of Labor.

Rehabilitating agriculture and industry stood at the top of the New Deal’s priority list. Farmers came first. In May 1933, Congress passed the Agricultural Adjustment Act, aimed at raising prices by reducing production. The Agricultural Adjustment Administration (AAA) paid farmers subsidies to produce less in the future, and for farmers who had already planted their crops (including corn, cotton, rice, tobacco, and wheat) and raised livestock, the agency paid them to plow under a portion of their harvest, slaughter hogs, and destroy dairy products. By 1935 the program succeeded in raising farm income by 50 percent. Large farmers remained the chief beneficiaries of the AAA because they could afford to cut back production. In doing so, especially in the South, they forced off the land sharecroppers who no longer had plots to farm. Even when sharecroppers managed to retain a parcel of their acreage, AAA subsidies went to the landowners, who did not always distribute the designated funds owed to the sharecroppers. Though poor white farmers felt the sting of this injustice, the system of white supremacy existing in the South guaranteed that blacks suffered most.

After the Supreme Court voided the AAA in 1936 for imposing an unlawful tax on food processors in order to fund the subsidies, Congress enacted several pieces of legislation designed to limit production and provide aid to small farmers. The second AAA, passed in 1938, offered agricultural subsidies to reduce cultivation on the basis of conservation and soil erosion prevention, which overcame judicial objections. To deal with continuing rural poverty among sharecroppers and tenant farmers, Congress provided loans for displaced farmers.

The Roosevelt administration exhibited its boldest initiative in creating the Tennessee Valley Authority (TVA) in 1933 to bring low-cost electric power to rural areas and help redevelop the entire Tennessee River valley region through flood-control projects. In contrast to the AAA and other farm programs in which control stayed in private hands, the TVA owned and supervised the building and operation of public power plants, starting with the Muscle Shoals Dam in Alabama, which progressives had lobbied for since the 1920s. For farmers outside the Tennessee River valley, the Rural Electrification Administration helped them obtain cheap electric power starting in 1935, and for the first time tens of thousands of farmers experienced the modern conveniences that electricity brought (though most farmers would not get electric power until after World War II).

Roosevelt and Congress also acted to deal with the soil erosion problem behind the dust storms. In 1933, the Department of Interior established a Soil Erosion Service, and two years later Congress created a permanent Soil Conservation Service in the Department of Agriculture. Although these measures would prove beneficial in the long run, they did nothing to prevent even more severe storms from rolling through the Dust Bowl, as it was now known, in 1935 and 1936.

At the same time, Roosevelt concentrated on industrial recovery. He kept Hoover’s RFC intact, but he went far beyond his predecessor in sanctioning government participation in the economy. In 1933 Congress passed the National Industrial Recovery Act, which established the National Recovery Administration (NRA). This agency allowed business, labor, and the public (represented by government officials) to create codes to regulate production, prices, wages, hours, and collective bargaining. Designers of the NRA expected that if wages rose and prices remained stable, consumer purchasing power would climb, demand would grow, and businesses would put people back to work. For this plan to work, business people needed to keep prices steady by absorbing some of the costs of higher wages. The head of the `NRA, Hugh S. Johnson, a veteran of the War Industries Board during World War I, engaged in a highly visible public relations campaign. Johnson argued that regulatory codes were good for everyone. Like rules for a fair fight, they would “eliminate eye-gouging and knee-groining and ear-chewing in business,” Johnson proclaimed. Businesses and industries that joined the NRA displayed the symbol of a blue eagle to signal their participation, and officials whipped up patriotic fervor on its behalf.

However, the NRA did not function as planned, nor did it bring the desired recovery. Businesses did not exercise the necessary restraint to keep prices steady. Large manufacturers dominated the code-making committees, and because Roosevelt had suspended enforcement of the antitrust law, they could not resist taking collective action to force smaller firms out of business. The NRA legislation guaranteed labor the right to unionize, but the agency did not vigorously enforce collective bargaining. The government failed to intervene to redress the imbalance of power between labor and management because Roosevelt depended primarily on big business to generate economic improvement. Moreover, the NRA had created codes for too many businesses, and government officials could not properly oversee them all. In 1935 the Supreme Court delivered the final blow to the NRA by declaring it an unconstitutional delegation of legislative power to the president.