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How successful was the new deal? Explain why Roosevelt Introduced the New Deal?

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How successful was the new deal? Explain why Roosevelt Introduced the New Deal? After the Wall Street crash of 1929 America was left at the mercy of an economic depression. At first, it wasn't clear how big the impact of the crash would be. Large speculators were ruined in the short term. The rich lost vast amounts of money and were hit the hardest as they had invested the most. There was an immediate down turn in spending, as the main buyers of American goods could no longer afford to spend their money. Many speculators had borrowed money so that they could buy shares, which were now worthless. In 1929, 659 banks went bankrupt. As the banks began to fail people withdrew their trust in the banks along with their savings from them. In 1930 another 1352 banks went bankrupt. To add to the USA's already quickly escalating problems 1931 saw problems in European banks, which had a knock on effect in the USA. People began to feel that currency was the only security. 1931 also saw another 2294 banks go bankrupt. As all this was taking place President Hoover did very little to help his country as he believed in Laissez-faire (leave well alone). Along with this Hoover reassured the country that prosperity was 'just around the corner'. As Hoover was talking optimistically on the return of prosperity, Americans were becoming a lot less reluctant to part with their hard earned money in return for consumer goods or shares. Businesses were forced to cut production and lay off workers. They (businesses) were also forced to lower the wages of those left working for them. As the workers became unemployed or less well paid they started to buy less, therefore establishing the downward spiral. By 1933, 14 million were unemployed and 5000 banks had gone bankrupt. People in agricultural areas were hit very hard by the depression; this was mainly because the roaring twenties had not been kind to them any way. ...read more.


FDR and the Congress set up the Civil Works Administration (CWA) in November 1933. FDR put an ex-social worker Harry Hopkins in charge of this agency. Hopkins had originally been in charge of FERA but Hopkins believed it was wrong to just hand out money because a worker on dole lost pride and moral. Many of CWA projects were similar to PWA however Hopkins was prepared to pay workers for almost anything. So as well as building roads and schools the CWA paid actors to perform in plays, people to sweep up leaves, historians to write books etc. Hopkins also went on to create the Workers Progress Administration (WPA) in 1935. The WPA was created by Hopkins to fill in the gaps left by the PWA. It employed unskilled labour, building roads and again gave work to people like actors, photographers and librarians. Together these agencies provided jobs and dignity for millions. Unemployment dropped from 13 million in 1933 to 7 million in 1937. FDR set out to combat the huge farming problems. FDR set up the Agricultural Adjustment Administration (AAA) in may 1933. This set quotas to reduce farm production in order to force prices gradually upwards. At the same time the AAA helped farmers to modernise and to use farming methods that would conserve and protect soil. In cases of extreme hardship farmers could also receive help with their mortgages. It was a huge success at first but the modernisation put a lot of farm labours out of work. FDR also set up the Homeowners Loan Corporation (known as HOLC) to help the homeless. This loaned money to people at very low interest rates so that they could keep up their mortgage payments and not lose their house. This was very successful because the savings people were making from the low interest rate could be spent essentials like food and clothing. FDR recognized that the Tennessee valley Authority had problems that needed targeting specifically. ...read more.


However with all this many black Americans benefited form the new deal. Around 200,000 black Americans gained benefits form the Civilian Conservation Corps and other New Deal agencies. Also many black Americans benefited from New Deal slum clearance and housing projects. As with the Black Americans FDR did something for them but not enough. The New Deal benefited the Native Americans by providing them with money to help them buy and improve land and helped Native Americans to preserve and practise their traditions, laws and culture. The New Deal failed in that the Native Americans remained a poor and excluded section of society. "The New Deal was not a complete success" in conclusion I agree with this statement. The reason's why I have come to this conclusion is by looking at Franklin Delano Roosevelt aims and seeing if he achieved them. Now FDR's first aim was to get American's back to work and stamp out unemployment. FDR was very successful in doing this as with his agencies he lowered the unemployment level from 15 million in 1933 to 7 million in 1937. All though FDR had viably lowered unemployment he wasn't completely successful. There fore of FDR's aims was not completely fulfilled either. His forth aim was to get American industry and agriculture back on their feet. The first aspect of this aim was getting industry back it's feet, which he managed to do. However the second aspect of this was not completely successful. The Agricultural Adjustment Act was FDR's attempt to try and boast agriculture it failed miserably. There fore making his forth aim not a complete success. To conclude I agree with the statement because the New Deal wasn't a complete success. It was a success in all it's right's as it lowered unemployment, homelessness and most importantly it gave the American public faith and confidence in their government. However although the New Deal was a success it didn't completely hit the grade. For the New deal to be a complete success FDR would have done everything he set out to do and he didn't. Andrew Simpson 11rr ...read more.

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