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FDR's New Deal

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New Deal Coursework � Why Did Roosevelt Introduce The New Deal? The Wall Street crash of 1929 started the devastating economic downturn in the United States that was to become the Great Depression. It escalated when people began to panic and pull all their money out of the banks. Due to this, by 1933, 11,000 of the US' 25,000 banks had failed. This widespread loss of confidence in the economy made people reluctant to spend their money, which caused businesses to either fail or cut back on their workforce. The decline in demand for labour was the initial cause of high unemployment, which reached unprecedented heights throughout the decade with 13 million people becoming unemployed. In 1933, 25% of all workers were unemployed. Homelessness also increased vastly due to unemployment, which led to the coining of the term 'Hoovervilles' as a name for the towns of cardboard boxes built and inhabited by homeless men, named after president Herbert Hoover. It had been made clear that the downward economical spiral was not going to resolve itself, and would only get worse if something wasn't done to combat it. President Hoover had previously held a 'Laissez Faire' attitude, meaning that he believed too much government coercion would have negative effects on the state of things and they should be therefore left alone. ...read more.


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. ...read more.


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. Steve Hajiyianni pg 1 Sunday, 6 September 2009 Steve Hajiyianni pg 1 Sunday, 6 September 2009 ...read more.

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