The New Deal: Evidence of Government Intervention and Reforms

As first evidence, the government put into work the Emergency Banking Relief Act. It assigned government agents to examine and survey the bank’s financial conditions. Furthermore, it issued certificates to those who were safe for the people to put their money in. In that way, the program as a product of the New Deal came to restore confidence in the people.

As second evidence, in addition to banks, the government passed regulations for the stock market through the Securities Act. It prevented stock selling companies from mishandling the truth by requiring them to provide accurate information to their clientele. Soon after, the government created the regulating Securities and Exchange Commission in order to prevent stock markets from committing fraud.

As third evidence, the government also protected depositors through the Federal Deposit Insurance Corporation. It offered money insurance up to a certain amount; meaning, if people were to lose their money, the government was to cover them eventually.

Even though the New Deal forced the banks to be accountable to its clientele—taking into account the definition of socialism—there is no evidence of the government implementing socialistic measures; that is, owning the means of production or distribution through any of the New Deal programs. In fact, if the New Deal was as socialistic as the American Liberty League accused it of being, there wouldn’t be any private companies today.

Ultimately, what the New Deal meant to change is the way the banking system and the stock market were operated. And the government had to be involved because otherwise, there wouldn’t be any changes in the banks today. Before the New Deal, no company had to report anything about itself or how it used the customer’s money. Now, all companies have to furnish reports. With that being said, these were necessary reforms.