This action was a tremendous success as it did a good deal to end the nation's panic over the downfall of the country's banks, as it improved is situation within the American economy, and helped it slowly rise again. This in itself was a great success and one of the main aims had been achieved.
After the banking crisis was over, there were still many other problems left to tackle. To help to deal with some of these problems, Roosevelt began to set up various different government agencies to help to try and deal with them. These agencies helped mainly in the unemployment factor and also in farming and for better conditions for those who actually were employed.
Of all the groups hit by the great depression, the farmers were most probably the worst off. The price of food was so low that they could not make profit when they sold their crop at market. As a result their incomes dropped. Many farmers tried growing more crops, hoping to make a profit through bigger sales, but this simply made prices drop even lower.
By 1933, one farm-owner in twenty had been evicted from his land because he could not keep up with the mortgage repayments. In this desperate situation, many farm-owners took matters into their own hands. An example of this was that in April 1933, 500 farmers in the state of Iowa, broke into a courthouse where Judge Charles Bradley was signing orders for the eviction of farmers from their land. They dragged Judge Bradley from his courthouse, smeared him with tractor-grease and then tried to hang him. It seemed as if law and order were breaking down in the countryside, and the Governor of Iowa put much of the state under martial law.
They, along with other factors, helped substantially in restoring farmers income, as they reduced the amount of crops farmers were harvesting, which helped the surplus of food go down, but also farmers were gaining profit out of it. The first action which he took, was that he instructed Henry Wallace, the Secretary of Agriculture, to make plans for immediate aid to farmers.
On 12 May 1933, the ‘Agricultural Adjustment Administration (AAA)’ came into being. Henry Wallace’s aim in setting up the AAA was to reduce the size of farmers’ crops by ‘adjusting’ them. His idea was that if smaller amounts of farm produce were sold at market, the price would rise, giving the farmers bigger profits. The AAA set to work immediately, by giving farmers money to destroy their crops! Many thousands of cotton farmers received over $100 million for ploughing that summer’s cotton crop into the ground. Many Americans were horrified by this policy of the AAA. They were even more angry when the AAA bought six million baby pigs from hog farmers and slaughtered them all. Even though the meat was canned and given away free to the unemployed, it seemed crazy for the government to pay farmers not to produce food. Despite all the objections, the AAA’s adjustment of farm prices worked. Prices quickly rose, and with them, rose farmers’ incomes.
Another agency which helped in this situation, was the ‘Home Owners Loan corporation (HOLC)’. Its aim was to help homeowners keep up their mortgage repayments by lending them money at low interest rates. This helped those farmers with mortgage difficulties, as the lower interest rate, meant they were enabled to keep up with their payments which meant that fewer and fewer were evicted from their lands.
The setup of the Tennessee Valley Authority (TVA) also helped out farmers and the unemployed in America. The TVA was to build sixteen dams on rivers in and around the Tennessee Valley. This would provide work for thousands of construction workers, and once the dams were built, they would provide cheap hydroelectric power for industry. The dams would also help to control the frequent floods that wrecked the Tennessee Valley.
The Tennessee Valley was one of America’s biggest environmental problems when Roosevelt became President. The Tennessee at that time was a dangerous river. Every spring it flooded, washing away millions of tonnes of topsoil and destroying the farms in the area. In the summer, it often dried to a trickle, parching the farmlands. Each year the eroded land of the Tennessee Valley produce fewer and fewer crops. The people living there grew poorer and hungrier until, by 1933, half were living on dole money paid by the state. The Tennessee Valley, an area as large as England and Wales put together, had become what Roosevelt called ‘the nation’s number one economic problem’.
The TVA began building dams on the Tennessee river and its tributaries. At the touch of a button, the dam controllers could close massive sluice-gates to hold back the river when it threatened to flood. In all, the TVA built twenty-one massive dams over the next ten years.
The TVA dams bought many benefits to the region. Firstly, they were used to make cheap electricity. Powerful turbines built into the walls of the dams were driven by jets of water released from the lakes behind them. By 1940, the twenty-one dams were producing 3.2 billion kilowatts of electricity each year.
A second benefit of the dams came from the lakes that built up behind them. The lakes were long, wide and deep, ideal for water transport. Locks built into the sides of the dams, meant that ships could also now transport their products to different areas for sale, and this increased their profits.
Gradually, the poverty of the Tennessee Valley disappeared. By 1940 is was a prosperous area, the pride of Roosevelt’s New Deal. It is obvious that the problem of the Tennessee Valley was solved extremely efficiently, and was most probably on of the New Deal’s greatest achievements.
Overall, the way in which the farming industry was helped by the New Deal, was successful in a way, as the action taken by the AAA, stabilized production and prices onto an even keel helping the economy in America. But in truth, it probably had more of an effect for the big farmers and farm owners rather than farm workers, as it brought them out of debt and suchlike, and it overcame the agricultural problem which faced the USA, but it didn’t help others that were involved in the farming industry such as farm laborers and sharecroppers.
The AAA policy of crop adjustment helped farmers who owned their own land, but it did nothing for the people who worked for them, the sharecroppers. Over half the three million sharecroppers in America were black, and most lived in slum conditions. The AAA policy of destroying crops made conditions even worse for the sharecroppers. Once they had helped the farm-owner destroy the last year’s crop, there was no work left for them to do, and no crop for them to share. Thousands had to pack their belongings and leave their slum home to look for work in other parts of the country.
This wasn’t as successful as it may have seemed overall, as even though it solved the agricultural economic problem facing America, it never provided for the farm laborers or share croppers, even though Roosevelt claimed to be including ‘the forgotten man’ which mean the less fortunate in society. There was often no work for these people, and the new deal didn’t provide work for all of these people seeking it.
Saying that, it showed one of the areas, which indicated that the way in which the problem of employment was dealt with, was clearly not one of the major successes of the New Deal. When Franklin D. Roosevelt made his New Deal speech in June 1932, America was in a severe economic depression. Of all the problems facing the Americans in the Depression, unemployment was one of the worst. Over twelve million Americans were unemployed, and the number of people out of work was going up by 12,000 every day. There was no government system of unemployment pay in America, so most people had to rely on charity to stay alive. In the countryside, people ate wild berries and roots. Some actually starved to death. The aim of the New Deal, to try and overcome this problem, was to create jobs for the unemployed. He attempted this by the use of two of the ‘alphabet agencies’ which he had set up. One was the Federal Emergency Relief Administration (FERA) which was setup on 12th May by the Congress, to help the rest of the fifteen million unemployed. The FERA had $500 million to give to the hungry and homeless. It gave one dollar of this money to the state governments for every three dollars they spent helping the unemployed.
Another set up, was the Publics Works Administration (PWA). The job of the PWA was to create work for the unemployed industrial workers by starting big work schemes of public benefit: building bridges, new houses and roads for example. The other part of the act was the National Recovery Administration. The aim of the NRA was to persuade employers in industry to pay their workers fare wages and to charge fair prices to their goods. Between 1933 and 1939, the PWA did all of the following:
built 70% of America’s schools
built 35% of America’s hospitals
built four big river dams
electrified the New York-Washington railway
built two aircraft carriers, four cruisers and four destroyers for the US navy
built 50 military airports
built a new sewage system in Chicago.
Many people admired the achievements of the PWA, but there was an important downside to it. The PWA provided work, only for skilled and able-bodied workers. It did nothing for the millions who lacked a skill or a trade.
To help the unskilled, a new work relief agency was set up in 1935 called the ‘Works Progress Administration (WPA)’. The WPA soon became the country’s biggest employer, giving work to an average two million people a year.
These agencies helped to provide work for millions of people. The wages they earned, allowed them to buy food, clothing and other goods. As people began to buy again, farmers, shopkeepers, businessmen and factory owners began to make profits again. The more profits made, the more they were able to expand their businesses, and that meant even more jobs for the unemployed.
This was a fairly successful problem overcome as a wide range of jobs were provided for both skilled and unskilled workers. The work created though, sometimes only provided short term relief for people who worked in them, as often jobs were short.
Everything seemed to be going well in this area, but in 1938-0, the unemployment figures rose to almost 11 million. It was only the second world war that finally put Americans back to work.
There was opposition to the New Deal which meant that it couldn’t work as well as it could have. Business men and press barons criticized Roosevelt for interfering with the freedom of business and industry. The rich and privileged saw President Roosevelt as a threat to their position and wealth, and disliked the higher taxes imposed on them. Socialists and communists complained the Roosevelt’s government had not changed the basic structure of society, the owners of industry still had all the power and wages were still low. The Supreme Court ruled that several Alphabet.
The New Deal was a success bit it also had many weaknesses. The strengths of it were that the economy began to recover after the depression. Unemployment was reduced from the 1932 level which was better than no change at all. Workers were given protection through trade unions and the principle of welfare and social security was established. The American people were given renewed faith and hope in their country. The New Deal saved the USA from the threat of revolution and dictatorship. There was some distribution of wealth and power throughout the American society. Many problems were tacked effectively and extremely successfully such as the banking problem, and the Tennessee Valley problem which were both handled well and gained recognition.
The few weaknesses were the in 1938-9, the unemployment figures rose to almost 11 million. It was the Second World War that finally put Americans back to work. There was great opposition to the principle of Federal government interference. Many businesses would not cooperate. Many huge corporations still had immense power despite the New Deal. Support for trade unions caused great industrial unrest.
Noting all of the above, my belief is that the New Deal did not end the depression. But it relieved much economic hardship and gave Americans faith in the democratic system at a time when other nations hit by the depression turned to dictators. It was a great success, in some areas, but the opposition facing it, made it less powerful and gave it less influence than it could have had. Great unrest was caused as a result of it and all of its aims had not been met thoroughly. The new Deal Was successful, but not totally and as much as it aimed to be. It didn’t consider some of the effects of the decisions involved in it, such as the sharecroppers dilemma. Each resolution made within the new deal needed all the consequences gone through thoroughly to see if the would create the total desired outcome wanted from it.
