<P> In 1934--36 came the much more controversial "Second New Deal ." It featured social security; the Works Progress Administration (WPA), a Very large relief agency for the unemployed run by the federal government; the National Labor Relations Board, Which operated as a strong stimulus to the growth of labor unions . Unemployment fell by 2⁄3 in Roosevelt's first term (from 25% to 9%, 1933--1937). The second set of reforms launched by the Roosevelt Administration during the same period, which is a responsibility for social welfare with the main legislation---- Social Security Act in 1935 . Insurance and poor relief ("public assistance" or "welfare") are constituent parts of the legislation that provided pensions to the aged, benefit payments to dependent mothers, crippled children and blind people, and unemployment insurance . The Social Security Act still plays a significant role of the American health and human service system so far . Much of the economy had recovered by 1936, but persistent, long - term unemployment lasted until rearmament began for World War II in 1940 . </P> <P> The New Deal was, and still is, sharply debated . The business community, with considerable support from such conservative Democrats as Al Smith, launched a crusade against the New Deal, warning that a dangerous man had seized control of the economy and threatened America's conservative traditions . Scholars remain divided as well . When asked whether "as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression," 74% of American university professors specializing in economic history disagreed, 21% agreed with provisos, and 6% fully agreed . Among respondents who taught or studied economic theory, 51% disagreed, 22% agreed with provisos, and 22% fully agreed . </P> <P> By 1936, all the main economic indicators had regained the levels of the late 1920s, except for unemployment, which remained high . In 1937, the American economy unexpectedly fell, lasting through most of 1938 . Production declined sharply, as did profits and employment . Unemployment jumped from 14.3% in 1937 to 19.0% in 1938 . A contributing factor to the Recession of 1937 was a tightening of monetary policy by the Federal Reserve . The Federal Reserve doubled reserve requirements between August 1936 and May 1937 leading to a contraction in the money supply . </P> <P> The Roosevelt Administration reacted by launching a rhetorical campaign against monopoly power, which was cast as the cause of the depression, and appointing Thurman Arnold to break up large trusts; Arnold was not effective, and the campaign ended once World War II began and corporate energies had to be directed to winning the war . By 1939, the effects of the 1937 recession had disappeared . Employment in the private sector recovered to the level of the 1936 and continued to increase until the war came and manufacturing employment leaped from 11 million in 1940 to 18 million in 1943 . </P>

How did u.s. banks help to create the great depression