Finally, the fourth of Roosevelt’s main targets was to protect the citizens’ savings & properties which they had amassed over their lifetimes. The major agencies/acts which were established in order to achieve this aim would be the Emergency Banking Act, & the Security Exchange Commission. The Emergency Banking Act was, in my opinion, the major pinnacle which triggered the restoration of America’s failing economy & stature. This act entailed that; all banks would temporarily adjourn from service until an inspection had been conducted by the government. The Security Exchange Commission was the commission who were given the specific responsibility to ensure that the banks were trustworthy - & suitable to handle money. As we know, many banks speculated there savers money, & this caused the investors to lose the most influential factor which affects the economy of any country – confidence. After the Security Exchange Commission had inspected the banks & reopened them, the confidence which had been dissipated by the foolhardy, reckless antics of the banks suddenly returned to the American citizens – the had regained the confidence which was so desperately required in order to stabilize America’s fluctuating economy, & because of the rules & regulations which were introduced to prevent this from happening again, citizens returned to their confident saving.
To conclude, there were many alternating features of the New Deal, which all helped to contribute to the revitalisation of the USA’s economy. With many agencies such as the PWA & CCC providing a gateway to the flourishing, yet economically stable America of yesteryear.
b. There were many reasons why President Roosevelt introduced the New Deal. Despite the fact that many industries (such as car manufacturing, fridges, etc) prospered in the 1920’s – the period which we call ‘the Boom’, there were also many industries which did not experience the benevolence of this period – they were left to struggle on their own, due to the previous government (the Republicans) adopting a policy of Laissez Faire.
One of the reasons that the New Deal was introduced would be in order to assist the many failing agricultural farms. During & after the boom, they found themselves spiralling downwards into the depths of bankruptcy. There were many reasons why this period had the inverse effects on the farming industry, however, one of the most important would be the fact that most farmers were overproducing – they were producing too many crops due to the introduction of new machinery & fertilisers; they were desperate to sell, constantly lowering their prices in order to undercut other farmers whom they were competing with. In 1921 alone, the prices of crops produced by these farmers fell by around 50% - eventually it became so disastrous that it became more expensive for farmer’s to ship their livestock to the markets than it was to slaughter them by hand & dispose of them. Millions of Americans were starving, however huge amounts of food was left to decompose in fields as it was simply too expensive to sell. In addition to this, due to the fact that America had put tariffs on exports to Europe (in an effort to protect the local industry), coupled with the fact that Europe was facing immense bankruptcy due to the war, the exports of food decreased. The farmers had a drastic loss of business - henceforth a drastic loss of income. Furthermore, adjoined with the previous problems, the American farmers were also facing competition from the highly efficient Canadians, who did not have tariffs of their own & so many of the customers chose to purchase foodstuffs from the Canadians over the Americans. Whilst seemingly every business was prospering from the boom, the problems in the agricultural industries were amassing beyond control – the income from farming had dropped from $22billion to $13billion between 1919 & 1928, & nothing was done to assist due to the Republicans lack of intervention (Laissez Faire).
Furthermore, another contributing factor to the introduction of the New Deal would be the fact that there were mammoth weaknesses in the US economy. Traditional companies such as the construction, coal & textile industries encountered various problem – the earliest failure being the construction industry, which commenced in 1926. Thousands of banks were failing in the late 1920’s & early 1930’s –
- In 1929, 659 banks failed due to the Wall Street Crash. They themselves had speculated their customer’s money in order to accumulate more for themselves.
- In 1930 a further 1352 banks were deemed bankrupt, the largest of these being the Bank of the US – situated in New York. It has almost 400,000 depositors, all of which found their money gone once the bank failed.
- In 1931, another 2294 banks went bankrupt – the numbers of failing banks were becoming larger & larger each year.
- In the decade before the Wall Street Crash had even occurred, around 500 banks failed each year, however these were mainly miniature banks who merely lent too much.
Also, the boom increased the sale of consumer goods, however, most of the upper & middle class citizens who could actually afford these goods already had them – resulting in a lack of business for America’s seemingly flourishing industry. Even the most thriving companies were staring to decline, & yet the government still refused to intervene. Furthermore, the surplus goods which weren’t affordable enough for the lower classes could not be exported to Europe – they were still experiencing the aftermath of the war, & had mimicked America by introducing tariffs of their own in order to protect their own businesses. In 1929, efforts were made to combat these problems - $3billion was spent on advertising industry. However, this could have been spent on a variety of more meaningful things – such as methods of decreasing unemployment, charitable organisations, etc. However, as America was a self help state, in which the government did not assist in the solving of any problems, they adopted a, ‘You got yourself into this mess, you get yourselves out’ policy (Laissez Faire), & so they believed that this would go against their policies & refused to spend money on these various methods of assistance.
Another reason would be the fact that there was a colossal amount of Americans who were unemployed – a knock on effect from the collapse of the farming industry, as many of the workers on the farms & the farmers themselves escaped to the city in false hope that they would find employment – somewhere. However, due to the lack of proper accommodation, many slum towns were formed. These were dubbed ‘Hoovervilles’ after the stationary President Hoover – many thought that the collapse of the farming industry & subsequent influx of largely Hispanic & black migrant workers who used to work on the farms being his mistake. There were almost 750,000 unemployed citizens was only came from the farms – coupled with the fact that the failing industries (construction, textiles, etc) cut production & made redundant many workers, resulted in around 14 million people unemployed. However, even those who actually had a job weren’t as fortuitous as first believed – between 1928 & 1933, industrial & agricultural production fell by 40% - resulting in wages failing by 60% in the same period. Many of the workers who helped contribute to the boom were left starving; having to queue up in the streets for charity & food. This was seen as an enormous blow to the pride of the ordinary citizen, as they were largely accustomed to getting themselves out of the messes which they found themselves in. This sort of charity would have felt alien to the proud American citizens.
To conclude, there were many various reasons, which were all somewhat linked to each other, which contributed to the introduction of the New Deal in their own way. However, the lack of involvement of the republican government could potentially be seen as the ones at fault, as they had to power to prevent this period, which we now call ‘the Depression’ from occurring.
c. ‘’The New Deal was not a complete success’’ – I somewhat agree with this statement, as there were some aspects of the New Deal which could be perceived as successes, whilst others could also be perceived as failures.
Firstly, an example of an aspect of the New Deal which could be alleged a success would be the Tennessee Valley Authority, or the TVA. Due to the fact that many Americans in the 7 states which the Tennessee Valley occupied were unemployed and without electricity in their homes, an administration which solved both problems seemed a certain success. Not only did the various dams constructed across the river provide electricity for the local residents, it created hundreds of thousands of jobs for citizens who were willing to erect the dams – providing salvation and wages for many Americans who were locked in a constant struggle which was subsequent to the Wall Street Crash. In addition to this, it prevented many natural disasters which, before the dams’ construction, constantly destroyed valuable agricultural land – the likes of floods and droughts were prevented, and the excess water which previously had been so drastically damaging was after that, used to irrigate the land. The catered for one of the most basic, yet essential, human needs – sustenance. Many Americans were trapped in perpetual starvation in the aftermath of the Wall Street Crash, and the assembly of these dams subsequently removed many obstacles facing the ordinary citizen.
However, the TVA could also be distinguished as a failure – it undermined the local governments of the several states which the Tennessee Valley traversed – in the same method that a parent would sort out a dispute between children. Roosevelt believed that the independent states could not resolve the argument by themselves, and so intervention was the only option. This would have been fairly damaging to the respect and pride of these states, as they had been accustomed to independently resolving situations such as this, due to the fact that the previous government, the Republicans, adopted a policy of Laissez Faire. Some influential democrats also argued that scheme such as this were not dissimilar to the USSR’s methods of dealing which situations such as this – it was extremely unlike the self-help America of yesteryear to become involved in the lives of the ordinary citizen, and subsequently the similarities between the actions of America and the USSR were not taken with any great appreciation. Despite the obvious benefits of the TVA, this is why some democrats refused to show any admiration for the actions of Roosevelt, constantly challenging his judgment towards circumstances such as this.
Secondly, another feature of the New Deal which could fairly easily be analysed as a success would be the National Recovery Administration, the NRA. This resulted in many distinctive modifications such as the outlawing of child labour, as well as championing fair wages for the ordinary factory workers. This was greeted with an incredibly positive reception by many of the workers, and rightly so. It prevented many super-corporations from exploiting their workers’ desperation for capital, and ensured that the requirements of the workers could no longer be neglected. Due to the fact that a mammoth increase in the profits of companies was not reflected in the wages of workers during the boom period, many workers would have felt fairly distressed. This administration removed this distress which they had previously been forced to experience. In addition to this, the NRA ameliorated the position of labour unions – they became influential enough to confront the gargantuan super corporations, challenging them for more acceptable working conditions, and negotiating for elevated wages. Due to the support of the president, many labour unions such as the NRA became recognised and accepted by corporate giants such as Ford, and General Motors and they were regarded as fairly important aspects of industrial companies.
However, despite the NRA campaigning for superior wages and working conditions, many large businesses were still incredibly untouchable – they continued to dominate the industrial scene, without regard for the common worker, despite pressures from Roosevelt and challenges from various labour unions. This could be regarded as quite a substantial failure, as Roosevelt publicly expressed his desire to make it easier for workers to confront these large companies by means of labour unions in an effort to ensure higher quality conditions in which they would find it easier to work. In addition to this, the various methods of campaigning for improvements for workers in the workplace were, quite commonly, illegally policed by brutes employed by these larger companies in order to ensure that their exploitive methods of practice remained unchanged – various companies designated as perpetrators of this were Ford, Republic Steel and Chrysler. Furthermore, many of the workers strikes, which were completely legal in terms of their rights, were regulated by means of, quite intense violence. This implied that despite the labour unions, some of these large super-corporations still believed that they were, in effect, above the law, and did not have to obey newly instated regulations regarding workers. This is another example of why some aspects of the New Deal were not a complete success.
Finally, a huge obstacle which appeared in the aftermath of the Wall Street Crash would be the fact that, many everyday Americans had lost the little confidence which had remained for their Government after the various failures in the late 1910’s regarding World War 1. The New Deal was incredibly effective in proceeding to combat this - it restored the reliance of the citizens of the United States in their government, and, after much drudgery the Government had regained the confidence of these citizens. In addition to this, an aspect of the New Deal relating to this which could also be perceive as a success would be the fact that, despite the fact that this was an operation of such magnitude, which had never before been witnessed in the United States, it remained remarkably free of corruption. For instance, despite the Civil Works Administration, distributing around $10 billion worth into various schemes required to revolutionize the United States, the chief of the whole organisation did not indulge himself in luxuries – in actual fact, he never received more than his designated salary of $15,000; truly a tribute to the natural hardworking spirit in which the citizens of America prided themselves on. For there to be organisations on a scale such as this, which virtually restructured the United States, and for them to remain free of corruption is an example of an unarguable success regarding the New Deal?
On the other hand, despite organisations such as this showing immense dedication to the cause of revitalising the confidence of the everyday American Citizen in government, the confidence which had been present in the ‘Boom’ years of the 20’s was never again witnessed in the United States, throughout the 1930’s, investment in the stock market was only around 75% of that which had previously been speculated/invested. The untouchable highs which were witnessed in the 1920’s were not relived due to the terms of the New Deal and so it was somewhat unsuccessful in it’s’ attempt the restore the astonishing affluence which had previously been so common. In addition to this, despite the fact that the New Deal strived in its efforts to conquer the significant dilemma of unemployment, there were still 6, 000, 000 American citizens who remained unemployed. This predicament was only overcome because of America’s involvement in another war – many Americans could subsequently locate employment in munitions factories and other, military related occupations. However, this became an even larger problem than the threat of unemployment first posed, as it was the First World War which was the prequel to the crises which were present during the 1920’s, and the 1930’s.
In conclusion, I do believe that some aspects of the New Deal could be regarded as quite a significant success – such as women finally achieving prominent position in government, such as Mary Macleod Bethune, a black woman who was in charge of the National Youth Administration. However, it goes without saying that nothing could ever be a complete success – and the New Deal further proves this as it failed to tackle problems such the discrimination against black Americans with any great conviction or effectiveness.
