By the time President Roosevelt was elected in 1933, he had seen from Hoover that inaction would get him nowhere in solving the problem or earning the respect of the American public. His hands-on attitude to politics was displayed during his period as Governor of New York State when he spent $20 million of tax money on helping the unemployed. This was the first time tax money had been used in this way and it showed people that he had the right idea about how to deal with the situation. As a reform governor, he established a number of new social programs in New York and the support he received there made him an obvious candidate for the presidential election. Especially considering Hoover’s shortcomings. By the time he came to power, following the ‘lame duck months’ between his election and inauguration, the US economy had hit its lowest point in the Depression.
- Explain The Main Features Of the New Deal
Most of the work put in place to re-animate the economic climate was begun during FDR’s first 100 days as president. For Roosevelt to be able to effect such drastic change in such a short period of time, he needed to be able to bypass Congress in order to change the law quickly and effectively. To achieve this, the ‘Trading with the Enemy Act’ - set up during the first world war - was reinstated and gave FDR the power to change the law without consent from Congress. This gave him the ability to set up several agencies to provide long-term and short-term solutions. The economy could not rebuild itself until the banking system was strengthened and, more importantly, trusted. In 1933 the Emergency Banking Act was passed. All banks were closed for eight days whilst the government attempted to re-open those banks which were deemed stable enough to survive. To deal with homelessness, the Federal Emergency Relief Administration (FERA) made $500 million dollars available to state governments to provide relief for the homeless such as shelters and soup kitchens as a short term solution. As a long term solution to prevent homelessness, a Home Owners Loan Corporation (HOLC) was agreed to, which lent money to home-owners at low interest to help them keep up on their mortgage payments.
Several agencies were created whose main aim was to create jobs for the unemployed. The Civil Works Administration (CWA) and Works Progress Administration were created to provide jobs for unskilled workers and the Public Works Administration (PWA) was created to provide jobs for skilled employees. These agencies embarked on projects such as building roads, schools and hospitals. The Civilian Conservation Corps (CCC) was also created to provide employment for young men. The Tennessee Valley Authority (TVA) built dams all around the valley which provided work for thousands of men, as well as a solution to the constant flooding that was destroying the Tennessee valley. Farmers were one of the groups worst affected by the Depression as lowering food prices made it hard for them to retain any profit. The Agricultural Adjustment Administration (AAA) was set up to compensate farmers for producing less food so that food prices could be raised.
Whilst they were not all perfect, these main features of the New Deal did go some way towards helping to subdue the core social problems brought about by the Great Depression.
- To What Extent Can The New Deal Be Considered a Success?
The New Deal was generally well received by the american people and has to be credited to have had some success in reviving the state of America’s economy and the quality of life of its citizens. After having coped with Hoover’s inaction, it was a huge relief to the people that something positive was being done to actively create change. The fact that Roosevelt was elected 4 times shows that he was clearly doing something right in the eyes of the public.
The solution provided by the New Deal for unemployment was fairly successful considering the enormity of the issue. Thanks to the jobs created by agencies like the WPA, CWA, PWA, TVA and CCC the number of unemployed Americans dropped from 15 million to 8.3 million between 1933 and 1937. On the other hand, this is still a high unemployment rate, and the number of unemployed went back up to 10.5 million in 1938 which shows that the jobs created by the New Deal were not sustainable enough and perhaps only a short-term solution. A lot of criticism fell on the Civil Work Administration (CWA) for providing people with jobs that had no purpose, such as frightening pigeons from public buildings and sweeping leaves. These jobs were called boondoggles and were deemed by many to be a waste of time and tax payers’ money. This mixed reception to the solution of unemployment shows that for a short while it provided relief for millions of people who needed it, however it wasn’t enough to last or effectively change the futures of American people.
As well as creating jobs, the Tennessee Valley Authority (TVA) was regarded as a success in solving the issues that had become such a burden on the Tennessee valley. Before the TVA was set up, FDR called it ‘the nation’s number one economic problem’. In contrast, by 1940 the Tennessee valley was a wealthy area and the pride of Roosevelt’s new deal. The dams, built to control flooding, brought money to the area by creating hydro-electric power, which amounted to 3.2 billion kilowatts of electricity a year. The lakes built up behind the dams could also be used as canals, which helped factories transport their products further afield and in turn generate more profits, however it solved nothing outside of the Tennessee Valley area.
The National Recovery Administration (NRA) was the agency set up to revitalize the state of American industry and bring rights back to American employees. The decrease in demand for goods dropped significantly with the beginning of the Great Depression, which led factory owners to cut workers wages and make them work long hours. The NRA combatted this with codes of fair competition that business owners were encouraged to sign. These codes dealt with under-paying and over-working of employees along with abolishing child labour and allowing workers to join trade unions. At first, the NRA was viewed by the people as a great success, with a parade held in New York to celebrate it. On the other hand there were employers who ignored or refused to sign the codes, which only led those who followed the codes to resent them for giving their competitors an advantage. The encouragement of trade unions also led workers to strike which only caused further problems. Overall, the NRA had good aims and had the right idea about improving the situation for workers, however it didn’t do a good enough job of enforcing these aims, and therefore ended up causing problems.
One of the biggest problems FDR and the New Deal faced was the opposition he encountered from the Supreme Court. They disagreed with the amount of federal power he was using, accusing him of acting like a dictator. The NRA’s fair labour and fair wage codes were made illegal along with the AAA, claiming it went against the constitution. This was a heavy blow as the AAA had been previously successful in stopping farms from overproducing, although this did lead to poor farm workers losing their jobs, which contradicted the idea that the ‘forgotten man’ would be looked after. All in all there were several aspects of the New Deal that had a positive effect on the state of the country, however none of the solutions were perfect and none of them provided any long-term security or promise. I don’t think the New Deal could have turned the economic situation around if it hadn’t been for the outbreak of the second world war, which raised the demand for labour enough to revive the economy and end the Depression. Therefore FDR’s New Deal cannot be seen as a complete success.
