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The Great Depression

Alphabet Soup II - Roosevelt's New Deal

Alphabet Soup II - Roosevelt's New Deal
Reading Level
     edHelper's suggested reading level:   grades 5 to 7
     Flesch-Kincaid grade level:   4.78

     challenging words:    burdened, nitrate, tariff, speculation, recovery, launched, investors, gamble, based, further, dealt, region, fraud, european, sales, banned
     content words:    New Deal, Hundred Days, Emergency Banking Act, Glass-Steagall Banking Act, Glass-Steagall Act, Federal Deposit Insurance Corporation, Securities Exchange Act, Exchange Commission, Trade Agreements Act, During World War

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Alphabet Soup II - Roosevelt's New Deal
By Toni Lee Robinson

1     President Roosevelt's first three months in office were busy. Things had to be done quickly to help needy people. The president had called Congress to special session. The leaders worked together on the New Deal. Laws were passed to bring healing to an ailing nation. This time was later called the "Hundred Days."
2     The Emergency Banking Act had ended the banking crisis. But there was more work to be done. The next step in Roosevelt's plan was reform. Laws were needed to change parts of the U.S. system.
3     People had thought banks a safe place to put their money. But the Depression had made it clear that some things were badly wrong with banks. Thousands had lost all they had when banks failed. The system on which banks were based needed to be fixed.
4     Congress passed the Glass-Steagall Banking Act. Under this law, banks were divided into types. Regular banks were separated from banks that dealt with stocks and bonds. That meant that the money of regular bank patrons would not be used for big gambles in the stock market. The Glass-Steagall Act also limited speculation. In other words, banks couldn't gamble with money entrusted to them. Their investments had to be safe.
5     The law went on to make banking even safer. The Federal Deposit Insurance Corporation (FDIC) was set up to back deposits with federal funds. The FDIC would pay back at least some of patrons' money if a bank closed. In 1933, up to $5,000 would be paid back. The amount has been changed several times. Today the FDIC promises to repay up to $250,000. The GSBA made banks a safer place for money.

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