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ROOSEVELT AND THE NEW DEAL - (THE FIRST NEW DEAL) - 1933-35 Introduction: Whilst Hoover was President, the depression kept getting worse. By 1933 some cities were without power as the power companies went bankrupt. Virtually every bank had closed. America was in chaos. Roosevelt had won the election of 1932 but he actually became President in 1933. He said that the only thing 'to fear is fear itself'. By this he meant that things would get better if people took positive action and did not let their fears hold them back by causing panic and chaos (e.g. in the banking system). Roosevelt thought that the fight against the depression was like fighting a war. Consequently, he used the Trading with the Enemy Act (passed during World War 1) which allowed him to change the law without asking Congress. Roosevelt was determined to take positive action to restore peoples' confidence in the economy - this was the New Deal. Aims of the New Deal: Roosevelt took positive action by establishing the Federal Government Alphabet Agencies. ...read more.


The creation of new jobs meant more people had more money. They would spend this money and so demand would increase. Consequently, businesses needed to employ more people and so even more people would have more money - demand would increase again etc......! Alphabet Agencies Helping the Unemployed Roosevelt set up FERA and the PWA. FERA had $500 million dollars to give aid to the hungry and homeless. The PWA was designed to create work for skilled unemployed industrial workers by starting public works schemes such as building roads and bridges. FERA - FERA was meant to give the unemployed aid but the official in charge, Harry Hopkins, believed that people should not receive free benefit as it took their pride away, stopped them practicing their skills, and prevented them from doing socially useful things. Therefore, Hopkins used FERA money to set up the CWA. CWA Good Points: The CWA found work for 4 million people paying them up to $1 an hour for skilled jobs (40cents for unskilled workers). These jobs meant more people had more money and so demand increased. ...read more.


Millions of trees were planted, fire look-out posts were built, and trees were treated for disease. The young men were paid $1 a day and had to send $25 of their earnings back to their families each month so they could spend it. This, in turn, would increase demand. The CCC, therefore, was both good for the environment and the economy. It was also good as it taught the young men skills. TVA Good Points: The TVA successfully solved America's biggest environmental problem and created thousands of long-term jobs at the same time. The Tennessee river often flooded and so was gradually eroding the usually dry land. This made the land unfertile and farmers suffered as less food was produced. This was a major problem as such a large area was affected. The TVA built 21 dams to stop the flooding and in so doing created thousands of jobs. Many other jobs were then created as the new reservoirs behind the dams provided work (e.g. Hydro-electric plants were built to make cheap electricity - they needed workers - see your separate sheet for other details). By 1940 the Tennessee Valley was a prosperous area as so many people were in work all businesses benefited. ...read more.

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