The USA and The New Deal

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1st January 2003

James Roberts

The USA and The New Deal

Question A

Accepting the Democratic nomination for President in 1932, Franklin Delano Roosevelt promised the American people a "new deal."  In his inaugural address on March 4, 1933, he declared: "This nation asks for action and action now."  With the famous phrase, "the only thing we have to fear is fear itself," he promised to exercise "broad executive power to wage war against the Depression."  What followed was a dizzying array of initiatives.  Roosevelt immediately gathered a "Brain Trust" of economic advisors and instructed his staff to "take a method and try it.  If it fails, try another.  But above all try something."

In his first hundred days in office, Roosevelt called Congress into emergency session and launched a record fifteen major pieces of legislation.  Between 1933 and 1938 the administration and Congress created dozens of federal programs collectively known as the New Deal, and often referred to as the "Alphabet Agencies." 

The Three R's: Relief, Recovery, Reform briefly stated, the New Deal sought relief for the needy, economic recovery, and reform of American capitalism.  The three-R objectives often overlapped and sometimes conflicted with one another.  (For example, the Agricultural Adjustment Act was primarily a relief measure for farmers, but it also aided recovery, and it had the unintended consequence of exacerbating the unemployment problem.)  In the first two years, relief and immediate recovery were the primary goals.  Most of the bolder relief and reform programs emerged in the Second New Deal (1935-1936).  

Some programs worked better than others; most were designed to last no longer than the crisis; but the legacy of the New Deal is a lasting one. The Alphabet agencies were the main contents of the New Deal, and consisted of:

The Farm Credit Administration (FAC); this agency made loans to farmers so they were finically secure. The Agricultural Adjustment Agency (AAA); this agency paid farmers to produce less food, so prices went up. Civilian Conservation Corps (CCC); this gave conservation work to young men. This took them out of the job market and gave them worthwhile jobs to do: planting trees to anchor soil and provide flood control, and other jobs reminiscent of that. The Civilian Works Administration (CWA); this was an emergency measure to get through the first winter. The agency tried to employ as many as possible, clearing leaves, building roads, and other jobs similar to that. The Public Works Administration (PDA); this agency spent $7 billion on lasting public works including; building bridges, sewerage , dams and similar projects to this. The Federal Emergency Relief Administration (FERA); this agency spent $500 million on soup kitchens, clothing, schools and employment schemes. The Home Owners’ Loan Corporation (HOLC); this agency lent money to stop people losing their homes. The National Recovery Administration (NRA); aimed to increase wages and prices and give workers a fairer deal. Employers had to sign a code for their own industry and were then allowed to display the NRA Blue Eagle. The Tennessee Valley Authority (TCA); this agency aimed to improve the vast Tennessee Valley; by building thirty-three dams, improving the soil, planting forests and improving river communications. As a by-product it provided hydro-electricity.

        There were different reasons for setting up these acts, all based around recovery, reform and relief. The main part of the New Deal consisted of:

The Federal Emergency Relief Administration set about meeting the urgent needs of the poor. A sum 500 million dollars was spent on soup kitchens, blankets, employment schemes and nursery schools.

        The Civilian Conservation Corps was aimed at unemployed young men in particular. They could sign on for periods of six months which could be rewarded if they could still not find work. Most if the done by the CCC was on environmental projects in national parks. The money earned generally went back to the men’s families. Around 2.5 million young men were helped by this scheme.

        The Agricultural Adjustment Administration tried to take a long-term view of the problems facing farmers. It set quotas to reduce farm production in order to force process gradually upwards. A t the same time the AAA helped farmers to modernise and to use farming methods which would conserve and protect the soil. In cases of extreme hardship farmers could also receive help with their mortgages. The AAA certainly helped farmers although modernisation had the unfortunate effect of putting more farm labourers out of work.

        The National Industrial Recovery Act set up two important organisations:

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  • The Public Works Administration which used government money to build schools, roads, dams, bridges and airports. These would be vital once America had recovered but in the short term they created millions of jobs.
  • The National Recovery Administration which improved working conditions in the industry and outlawed child labour. It was voluntary, but firms which joined use the blue eagles as a symbol of presidential approval. Over two million employers joined the scheme.

The Tennessee Valley Authority: The Tennessee V alley was a huge area which cut across states. The area had great physical problems. In the wet ...

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