Another man who inspired the life of Roosevelt was John Maynard Keynes. Keynes was a British economist who greatly believed in Deficit Budgeting, which is the over spending of Government funds (e.g. Taxes) over a particular period of time to greatly improve that area ultimately reclaiming the money in the future. For example it could be put in to industry to provide more jobs for people, increasing the amount of tax payers and the money coming back to the Government. This method was used as a way of getting people back in to work, and it captivated Roosevelt, and he felt inclined to use it in American economics. It was called the Reflationary Circle and Roosevelt was clever at how he used it. Keynes is incredibly famous in the world of economics and actually sparked Keynesian Economics – a macroeconomic theory based on his work.
All these of Roosevelt’s dreams brought him to create a major action plan. He created a barrage of laws in the tiny time scale stretching between March 9th 1933 – June 16th 1933. This huge drive was appropriately nicknamed ‘The Hundred Days’.
In these Hundred Days, Congress granted every request that Roosevelt asked for. These comprised with lots of various different reforms. He introduced 13 new laws in these hundred days, and introduced his infamous ‘Alphabet Agencies’.
Bank and monetary reforms were first on the list. On the 4th March almost every bank in America had been closed by its senate, and Roosevelt used this to his advantage, keeping them all closed until he could pass his new law. On the 9th March (The day of his inauguration) he passed a law called the Emergency Banking Act. This meant that a system for the reopening of secure banks could happen under the supervision of the Treasury and within 3 days, 3 quarters of all banks in the central banking system of America were re-opened. Smaller banks were shut down to be merged with larger corporations to create coalition companies. To lock the security of the new up and running bank system, Roosevelt then installed the Federal Deposit Insurance Corporation (FDIC) (one of his alphabet agencies) which enabled America to insure deposits of up to $5,000. This meant American trust in the banking system was greatly restored and intensely helped Roosevelt’s aim of recovery.
Roosevelt also passed the Economy Act, which was an act to basically pump more money in to the government. It abolished the isolationist views of America and also allowed federal governments to trade with one another.
It also split the budget of the Government into two parts. The Emergency Budget – needed to bring America out of the depression and had to be demanding on an impermanent basis, and the Regular Budget - for normal government needs. The act cut the non emergency central budget by doing things like cutting the salary of government employees and reducing the pensions of veterans by up to 15%. It saved $500million per year and also proved to America that Roosevelt was monetarily cautious.
Tied into the Economy Act was the Beer Act. It stopped the prohibition of alcoholic beverages in 1933, raising spirits of Americans and boosting patriotism that extra bit where it was crucial. The end to prohibition meant the government could now tax the beverages they were now allowing; beer, wine and spirits could earn the Government money, and pubs could also pay money to require a license to sell these kinds of drinks. It also meant the end to the underground crime of bootlegging where gangsters created moonshine and therefore stopped the distraction of the government, allowing them to focus more attention on turning America around.
Another one of Roosevelt’s main aims for the New Deal also turned his attention to Farm and Rural programmes. He was greatly concerned and believed that true reform could not be found until the agricultural market was back to normal. Roosevelt brought change to the way farms were being run, seeing as many farms were now completely penniless and their farms had been swept away by the great droughts which started in 1930. In The first Hundred Days Roosevelt greatly helped farmers by increasing the sale prices of their produce by simply limiting the amount they were allowed to engender! Roosevelt aimed many of his Alphabet Agencies at cultivation and greatly helped direct the right prices for the amount of conscientiousness the farmers were putting into their business.
I will now look at how Roosevelt’s Alphabet Agencies outlined the main aims of the New Deal. Certain groups that Roosevelt wanted to help were aided by specific clusters of agencies. The agencies were all government controlled and dealt with the certain issues of that chosen group.
Farmers as we have seen were helped by FDRs Farm and Rural act. Under this act he created various agencies to get agriculture flourishing again.
The FCA or the Farm Credit Administration leant out loans to farmers who were destitute and it controlled and analyzed the banks, links, and related bodies of the , a complex of borrower-owned fiscal establishments that provide loans to ranchers, farmers, and agricultural service organizations.
This helped the EFMA - Emergency Farm Mortgage Act by allowing banks to lend out money to those in danger of losing their property and possessions. This movement is said to have refinanced up to 20% of farmers loans.
Again another tie in was the AAA or the Agricultural Adjustment Act which paid farmers to produce less food, creating a profit uprise. Larger farms benefited greatly from the AAA policy as it meant they could do less work and earn more money, where as some smaller farms were still persuaded to get rid of produce to make way for the larger agricultural firms, and this uinfortuantely had an effect on the public. They hated the fact that agricultural prices for crops had been greatly increased, and some people even saw the tax prices the Government were placing on crops as ‘immoral and wrong’ however, they were also earning more money at the same time!
Industry and industrial workers were covered by FDR’s agencies. The NRA or National Recovery System allowed businesses to generate ‘codes of fair competition’. This system got rid of ‘destructive rivalry’ and helped workers by setting minimum wages and maximum working hours and also increase industrial prices, thus creating a fairer deal for all people in the same line of work and industry on a national scale! However, In 1936, the collectively affirmed the NRA as unlawful in the court case of ‘’, on the grounds that it violated the Constitution's separation of powers and so the NRA quickly stopped operations.
The needy and poor were also supported by the alphabet groups. Many agencies were created to lift the deprived to a positive state of mind.
The Federal Emergency Relief System (FERA) was given a budget of $500million to help get American citizens above the breadline. This money was pushed onto the unemployed and their families through local council plans such as local work projects and transient programmes.
The Home Owners Loan Corporation also helped the needy and poor. It helped to refinance households to stop foreclosure. It was done by extending loans to more amortized, cash flowing, long term financial agreements. It helped over a million people to keep their homes and restored prosperity in unhappy homeowners.
The unemployed were pushed along greatly by Roosevelt. He created many different agencies to get people back in to work. The CCC (Commodity Credit Corporation) helped to give work to men under 25. Roosevelt created government camps to house them in the countryside and they carried out manual work like clearing land, planting trees and strengthening river banks. The men involved didn’t mind doing hard work as they were given food and clothes and ultimately a sense of belonging, but more importantly they were given a wage. From the start in 1933 to the end in 1942 nearly 3 million people took part in the CCC scheme.
The CWA (Civilian Works Administration) was created only as a short method to give out as many jobs as the government could. 4 million jobs were given out in the winter of 1933-34 both in useful work like building roads and in small jobs like cleaning leaves from parks. Moreover these factors it just gave people a feeling of something to do!
The Public Works Administration (PWA) had aims to create public facilities that would last a long time. $7billion was spent on employing experts in fields such as construction and building to create dams, sewage systems, houses, schools and hospitals.
After Roosevelt’s Hundred Days had passed most of his agencies had been set up, however there was still a lot of change to happen. This period of post 1935 America was the period of Roosevelt’s ‘Second New Deal’
During the second new deal many important changes were made… These were mainly aimed at improving the living conditions of America, rather than changing the different industries of the country and focused on reform. Arguably some of these changes were as important as the transformations of 1933 such as the Social Security Act. The Social Security Act helped the old, sick and unemployed, it was set up in 1935 which gave a state pension to everyone over 65 and supported disabled people and single mothers with responsibilities for children. It also started unemployment benefits provided by separate states with aid from the central government.
As a follow on from various other agencies, the Workers Progress Administration (WPA) was set up, giving work to a further two million people a year. Again the work was varied in productiveness but overall was very helpful to America including the planting of tree’s stretching 1600km to try and regenerate soil losses from the Dust Bowl.
Another important change in the Second New Deal was the Wagner Act, which supported workers who wanted to form an alliance to stop employers sacking members of the union. These trade unions began to grow, meaning that employers had to listen to their wants and needs.
All in all, Roosevelt completely altered the American lifestyle. His main aim was simply to drag America out of the depression and turn it into a more prosperous land, which he did by creating his alphabet agencies, and changing American ways in his first hundred days – then emphasized in the second New Deal. He helped this main aim with the alphabet agencies through aiding the poor, needy and unemployed and also by pumping money back into agriculture and farming and revolutionizing the way that industry was being run, righting the wrongs that became apparent to him on his path to American transformation.
