'As a response to the causes and effects of the Great Depression, the New Deal was a total failure.' Discuss this view.

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‘As a response to the causes and effects of the Great Depression, the New Deal was a total failure.’ Discuss this view.

The Great Depression during the interwar years had disastrous effects on American society and the economy. In the United States and many nations, mass unemployment and poverty, bank and business failures were a major problem. In 1933, President Franklin Delano Roosevelt attempted to improve the situation by introduced his ‘New Deal’ programme that was to provide economic relief and reform. The main aims were to reduce the mass unemployment and improve the American economic situation with the introduction of new government policies and agencies. This essay will discuss the policies that were introduced and the impact that these had within the areas that they were applied. There were positive and negative responses to the New Deal legislation and has been defended and criticised for the effects on American society. Therefore, it will consider the view that despite the achievements of the New Deal, it was unsuccessful as resulted in less personal gain and encouraged a state economy.

During the interwar years, there was a demand for consumer goods such as domestic appliances and automobiles. America experienced an increase in production, providing employment for the masses. The introduction of credit facilities, whereby money was not necessary to possess these luxuries, the opportunity to acquire such items increased. Despite the growth in new industry, traditional forms of employment, including that of agriculture, declined and resulted in a weakness in the economy. The boom in the new industrial sector was not to continue, consumption reduced, and the growth in the market was not sustainable, resulting in a slump. During a time when Communism and Fascism were at large throughout the world, Capitalism was pushed to limits that had never been experienced before. 

 

The market could have been stabilised by wage increases that were already ‘below what was deemed necessary for a decent standard of living’, and lower prices that would have improved purchasing power, however, this did not happen. In addition to this, there was increased participation in the stock market as those with excess capital invested in shares. Disaster struck when the market crashed in 1929 as the result of panic selling and stock values declined up to forty percent. Banks and businesses failed, industries closed or reduced their labour force. Despite the Hoover administration pleading with the business owners to reduce their profits rather than their labour, unemployment figures soared. Many found themselves with huge personal debts including those who were better off. The poor were dependent on voluntary organisations and local authorities that were to provide the basic requirements to live, however, these provisions were drained as the conditions worsened. 

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In 1932, as nominated leader of the Democratic Party, Roosevelt told his supporters, ‘I pledge you, I pledge myself to a New Deal for the American people’. He took over the administration, becoming President in 1933. He was confronted by a serious situation that Herbert Hoover, at the end of his Presidency admitted, the Republicans had failed to improve stating, ‘We are at the end of our rope. There is nothing more we can do’. Depending on the voluntary services to provide for those in greatest need, Hoover was unsuccessful with dealing with the escalating problems. With one fourth of ...

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