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Was the New Deal a Failure?

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Was The New Deal a Failure? After the Wall Street Crash in 1933 the American economy collapsed and fell into a state of depression. There were a number of problems in 1933 - all of which stemmed from the slump, which followed the Wall Street Crash. Firstly, there was no confidence in the money system, or in the banks. In total 1500 banks had been closed and 9'000'000 men and women lost their savings because the banks had collapsed. The people in America needed immediate relief. A once strong and prosperous country had been reduced to a country living in poverty and grief. The Americans were not used to this type of life style and they were not prepared for it either. The Americans needed to be rescued from the depression and they needed it immediately. Also because of the depression, millions had lost their jobs and could not find work anywhere else. In1933 there were over 12'000'000 unemployed and more than 30'000 firms had gone bankrupt. At this time, not only were the workers not doing too well; farmers were also being destroyed because the prices for products such as wheat and corn were far too low. It didn't even pay off for the farmers to shift the harvest from the fields because of the low prices. A solution was needed which would help both workingmen and farmers. Because of the disastrous consequences that the depression had, welfare schemes were needed as a backup, which would prevent and 'cushion' the effects of future depressions. ...read more.


Roosevelt introduced Acts, which would protect workers' rights. The people were desperate for work and Roosevelt knew that some employers might try to take advantage of them. In 1933 Roosevelt introduced the N.I.R.A. (National Industrial Recovery Act). The main function for this act was to create purchasing power, which would help industry recover and stimulate employment. Within this Act the N.R.A (Nation Recovery Administration) was set up. The N.R.A. was aimed at employers and encouraged them to cut out unnecessary competition, to lay down minimum wages and maximum hours and to allow formation of unions. Employers who did follow these guidelines were awarded with a Blue Eagle Badge, which showed that they were participants. The N.I.R.A also set up the P.W.A (Progress Works Administration), which created employment in heavy construction such as dams etc. However, some employers failed to implement the N.R.A. guidelines and disappointed workers went on strikes. In 1935, the Supreme Court declared N.I.R.A. unconstitutional. However, in the same year, the government then introduced the Wagner Act, which safeguarded the right of workers to join unions. By 1939, 9 million people had joined a union. In 1933, Roosevelt introduced the A.A.A. (Agricultural Adjustment Act). This Act was aimed to increase farmers' incomes. The A.A.A. was one of the most controversial Acts, which Roosevelt had introduced. In order to increase farmers' incomes, animals had to be killed and crops had to be ploughed and destroyed. The reason why this Act had so much opposition was because farmers had started to put the prices of food up at a time when thousands of people were starving. ...read more.


economy came with the Second World War. Because of war production, unemployment was at it's lowest ever. I believe that the New Deal was one of the greatest economically feats in American History and in almost no ways was it a failure. What was truly novel about the New Deal was the speed with which it accomplished what elsewhere had taken whole generations. Many of the reforms were hastily drawn and weakly administered; some actually contradicted others. During the entire New Deal period, despite its speed in decision and execution, public criticism and discussion were never interrupted or suspended; in fact, the New Deal brought to the individual citizen a sharp revival of interest in government. The New Deal established federal responsibility for the welfare of the economy and the American people. In its early stages, the New Deal began where progressivism left off and built upon the Hoover program for fighting the depression. But Roosevelt soon took the New Deal well beyond Hoover and progressivism, establishing large-scale social programs and government participation in economic activities. Despite the importance of this growth of federal responsibility, the New Deal's greatest achievement was to restore faith in American democracy at a time when many people believed that the only choice left was between communism and fascism. Its greatest failure was its inability to bring about complete economic recovery. Some economists were calling for massive deficit spending to promote recovery; and by 1937 the New Deals own experience proved that pump priming worked, whereas spending cutbacks only hurt the economy. Roosevelt remained unpersuaded and the depression lingered on until U.S. entry into World War II, which finally brought full employment. ?? ?? ?? ?? Jonathan Baker Page 1 ...read more.

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