“Roosevelt’s first New Deal favored business, while his second New Deal favored labor.” Assess the validity of this statement.
Roosevelt’s first New Deal favored business, while his second New Deal favored labor: his first one led to the revival of numerous industries, which have crashed during the Great Depression, while the latter improved the laborers’ conditions by providing numerous reforms, which have been desperately demanded for in the past.
Roosevelt’s first New Deal helped revive numerous industries, which have crashed during the Great Depression. Firstly, he provided numerous jobs to the laborers. For example, the Public Works Administration (PWA) of 1933 and the Civilian Conservation Corps (CCC) of 1933 employed hundreds of thousands for public projects, such as the construction of bridge and buildings; the Tennessee Valley Authority (TVA) provided jobs while constructing series of hydroelectric dams on the Tennessee River; and the Civil Works Administration (CWA) provided temporary jobs to the unemployed, which numbered millions in that time period. This sudden increase of jobs, though may seem only as a benefit to the unemployed, actually revived numerous industries because with new jobs came salary. The source of money provided millions with the previously deprived purchasing power, and they began to purchase the products of many businesses. This increased income for the businesses, and gradually businesses opened its factories again, and started to recover from its crash. Secondly, Roosevelt sought to help the banking system regain the confidence of the people. With the Bank Holiday of 1933, Roosevelt closed down all banks, so that the government could reorganize them, which it did with the Emergency Banking Relief Act (authorized government to monitor the banks’ finances to determine its condition) and the Federal Deposit Insurance Corporation (FDIC) of 1933 (provided an insurance of deposits in banks to a maximum of $100,000 per depositor, which meant that if the banks crashed, the government would compensate for the individuals’ deposited money). This boosted the public’s confidence and bank deposits, which restored the bank’s ability to invest in other businesses with its new monetary source. With the bank’s investment, many new businesses formed and developed while old ones reopened and began to recover from the Great Depression. Not only that, the Home Owners Loan Corporation and the Farm Credit Administration, by providing refinancing, low interests, and mortgages, the two encouraged people to borrow money from the banks, which increased the source of income for the banks to flourish and invest in other businesses. In addition, the Securities Act of 1933, which created the Securities and Exchange Commission, ensured the soundness of stocks and bonds by forbidding the speculative business practices (for example, stock-watering) that led to the Wall Street’s crash, further hindering the possibility of another crash of businesses. Finally, the National Recovery Administration guaranteed profits to businesses by setting minimum prices on certain goods. Indeed, Roosevelt’s first New Deal was composed of numerous legislatives that helped businesses revive.
