History essay on the new deal

How successful was the new deal?

The new deal of the 1930s was seen as the radical action needed during the depression to help American people and the American economy. However, some people criticised it for not being radical enough as it didn’t help all Americans. Roosevelt started off by introducing 15 acts in his first 100 days including the alphabet agencies and the beer act. These acts and agencies were designed to help certain groups of people but this meant that some were left out. This meant that Roosevelt was forced into producing the second new deal which helped Americans in the late 1930s.

The first couple of acts were very important, first there was the emergency banking act which closed all banks for several days in which time they were inspected and only those that were properly managed were allowed to open again. He then introduced the economy act which meant that the pay of everyone in the government was slashed by 15% and budgets were cut by 25% which altogether saved $1 billion. In addition to this he added the beer act which legalised the manufacture and selling of alcohol, therefore prohibition was ended. Roosevelt then goes on to introduce the 13 acts that make up the alphabet agencies.

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The alphabet agencies were a fundamental part of the first new deal as they helped more people than any other acts. One of the main agencies was the PWA which was a long term agency that lasted until 1939 and provided jobs for millions of people. It also created public works of lasting value for example it created 70% of the nation’s schools a third of its hospitals and 50 airports. Although it didn’t employ any unskilled workers and Ikes was slow to put the money back into the economy. The CCC and the CWA also provided jobs for millions of people. The CCC employed more than 3 million people but they were all men so women didn’t benefit. The CWA were just a short term agency that was very successful as it employed 4.2 million people over the winter of 1933/34 but it was very expensive.

FDR also created two agencies to help the farmers as they were one of the heaviest hit by the depression. First he created the AAA who bought surplus crops and destroyed them or shipped them overseas. It also paid farmers compensation to reduce production or remove land from farming. But wasted crops and livestock resulted in huge moral outcry because there were millions of people starving and small time farmers did not benefit. System was voluntary and financial compensation was provided on the basis of number of acres not farmed rather than individual needs. He then created the FCA which provided credit at low interest rates for farmers so they could keep their farms. This meant that the farmers could keep their farms and could afford to work or expand.

In addition to this Roosevelt introduced the NRA which was designed to help workers. They made a limit of a 40 hour week for clerical workers and a 36 hour week for industrial workers. They also set a minimum wage of 40 cents an hour and abolished child labour. It also gave workers the right to join trade unions that had been previously discriminated against which allowed for collective bargaining. 23 million people ended up working under the NRA and those companies who didn’t join were seen as selfish and unpatriotic.

Finally Roosevelt created the TVA that was introduced to develop the Tennessee Valley which cut through 7 states and was poverty stricken. They built 33 dams to control flooding of the river and produce electricity. There were also measures taken to improve the quality of the soil so that it could be used for farming again and a 650 mile waterway to link the river systems. Thousands of jobs were created with the building if the dams and the TVA became the biggest producer of electricity in America meaning many industries moved into that area creating jobs for the unemployed. The dams still provide some of America with electricity today which shows they were a success.

There was then a second new deal which was introduced to silence FDR’s critics and to make sure that he got re-elected. This second new deal was more radical than the first and helped many people that really needed it. Firstly he launched the Wagner act which helped workers by giving them legal rights to join unions. He then introduced the social security act which helped the elderly, disabled and unemployed due to sickness. This introduced state pensions, and disability benefit was paid by federal and state governments. But the pensions weren’t started until 1940 and the funding came from increased taxing. He also introduced the rural electrification administration and the re-settlement administration which were introduced to help farmers. It helped them by building systems transmission lines to enable all farms to have electricity. But the re-settlement administration only relocated 4,441 people instead of its aim of 500,000. In addition to this he introduced the works progress administration which employed 8.5 million people and provided many people with entertainment through theatres and circuses.

Overall the new deal was partly successful as there were many Americans that didn’t benefit from the new deal but there are also many Americans that did benefit from the changes and agencies. The new deal is especially successful if you compare it to what Hoover did for the American people. However there were still many people that were unemployed and by 1937 industrial production was down 33%, wages were down 35% and national income was down 13%. This shows that the new deal didn’t help many people although a large part of this is due to cut in public spending.

Ross Goodman-Brown