During the economic boom of the 1920’s, American industry was considered the most technologically advanced and efficient in the world. However, this soon led to over-production on a catastrophic scale. They could not sell their products overseas due to the tariffs imposed upon American goods and thus, industries began to lose profits, being one of the causes resulting in the Wall Street Crash. This was therefore yet another aspect Roosevelt aimed to tackle by the introduction of his New Deal; helping the countries industry back on its feet again. He needed to act, or else soon, the few companies that did not become insolvent would find themselves no longer being able to keep themselves running in turn, bringing the unemployment rate even higher. Roosevelt wanted to introduce rights for the workers in such industries so that they could feel secure within their jobs, restoring their confidence and work rates. To tackle this problem he set up the National Industrial Recovery Act (NIRA), who within themselves brought about two agencies: the National Recovery Administration (NRA) and the PWA. The NRA set about ridding industries of child labour and improved working conditions for employees in large industries by allowing Trade Unions to be established. Furthermore, they pioneered a minimum wage that all industries had to abide by until the NRA was also banned. But in time, it too was replaced by the introduction of the Wagner Act in 1935, which actually forbade employers from preventing the organisation of such unions. These unions held strikes and demonstrations when their members weren’t happy with pay or working conditions. On the vast majority of occasions the workers had been recorded to be victorious as the employers were normally forced to give in to their demands.
If it was not for Roosevelt’s bold actions, it goes without saying that the New Deal would never have been brought about. He used his initiative in introducing his many ‘alphabet’ agencies and for the most part, achieved what he set out to do. Although at the time, many would have written off his behaviour as unconstitutional, when they reflected back upon it, they must have seen what a stroke of genius he pulled off in bringing aid to so many aspects of life in America. It was his strength of character that in my opinion that allowed him to ignore the criticism he received from his opponents, actively becoming involved in sorting out America’s problems. At the time people may have said that a child could take uncalculated guesses at what step to take next in bringing America out of depression, but now few people would still choose to criticise him or his actions after looking at what he did for his country. I feel that if it was not for the President himself, then the New Deal would never have happened, or at least not to the same extent, and through this perspective it was the form of governing that Roosevelt chose to adopt, that of active government that eventually proved to be the most important feature of the New Deal.
2. Explain Why Roosevelt Introduced the New Deal (8)
America in the 1920’s was undoubtedly a rich and prosperous country. Living standards were by far the highest in the world and so too were both the country’s economy and industries. The population believed it was their birthright, as citizens of America to become rich, if they were not already so and lead a lavish lifestyle as long as they worked hard enough for it. These ideas of the ‘American Dream’ were supported by government propaganda with Herbert Hoover, the President at the time, broadcasting things to the nation such as, “Prosperity is just around the corner.” The public listened to him buying every luxury item that they thought they might have some use for, even if they could not afford it. At the time it seemed like the best thing to do, it looked as if people were only going to get richer after all so what would be the harm in buying on credit and paying back later. The government religiously followed the ideas of the Laissez-Faire, not bothering with getting involved with business and the economy as they assumed that those ‘on the ground,’ directly involved with it, knew what was best for their own good. The stock market took of, and people started to see it as an easy way to make money. It was simple; you bought shares, kept them for a while, then sold them for a profit. However, rumours began to spread that it was soon going to collapse and people wanted out. Very soon there was a panic as the population began to withdraw their money from the stock market, only for many to discover that they had been conned. During less than a week in October 1929, the whole countries economy seemed to disintegrate through what later became known as the Wall Street Crash.
People lost fortunes as banks began to go bust and they suddenly found that they could no longer pay back all the debts they owed for those expensive luxury items that they had bought on credit. The shockwaves of the most dramatic event in economic history were felt worldwide as the Great Depression took a hold on the planet. The American economy was in turmoil and so up until 1932 no one had found an answer to it. Hoover simply blamed the public for not working hard enough, saying that they got themselves into this mess so they should have to sort it out or it would do so itself. Yet the population no longer heeded his advice but instead decided that it was time for a change. So by the time of the next Presidential Election in 1932, Roosevelt was voted in and it was the worst defeat the Republicans had ever suffered.
In almost all aspects of American life, the period of the Great Depression was a time of hardship and poverty. Roosevelt needed to act quickly to improve the state of affairs in the country as for the moment people could see no light at the end of the tunnel. One of his first and possibly most important agendas of the New Deal was to sort out the banks and get them back on to their feet again. During the period of economic boom in the 1920’s a lot of people had borrowed money from the bank in order buy things they could not afford with simply their savings. As share prices began to drop and the Wall Street Crash occurred many people who had taken loans from the bank had lost money and were therefore unable to pay these loans back. As a result, when people began to withdraw their money from the banks in a panic, they found that they were unable too, as the banks simply no longer had that money to give out. Inevitably, the banks began to become unable to function, as they were being starved of money and therefore either temporarily shut themselves down or collapsed altogether. Without banks, the country would have been unable to function properly and so as Roosevelt came into power he needed to respond immediately to ensure their survival.
Arguably one of the most important reasons for the New Deal being introduced was to restore the confidence of the American people in their own economy. After the Wall Street Crash, many Americans felt that they could not risk spending the money they had earned unless there was another such economic disaster and they did not posses enough money in order simply to survive. The public had to be reassured that such a catastrophe would under no circumstances occur again, or the economy would never get going, as money wouldn’t circulate properly. If people aren’t willing to spend money, there is next to no money to be earned and if little money were being earned, there would be none to spend. Roosevelt could only really begin to rebuild the economy once the confidence had been restored and people had once again begun to spend their money. He therefore needed to introduce the New Deal to become actively involved in attempting to lift the country’s confidence and morale. He used such techniques as his infamous ‘fireside chats’ in order to reassure his country that everything was going to work out in the end, convincing the public to once again start spending their money. This direct involvement made the public feel cared for and secure, not like Hoover under whose governing they clearly felt neglected.
Another great worry caused by the Wall Street Crash for the people of America was that their future home ownership was suddenly plunged into jeopardy. Many homeowners across the country found themselves suddenly in danger of being evicted from their houses as they began to struggle to pay back their mortgage after the economy collapsed. Many of these people played no part in the stock market dealings and simply found that their bank had collapsed along with all their savings and they could therefore no longer handle the mortgages of the house they felt they were secure in, as their long-term homes. Others found themselves being kicked out of their jobs as companies became bankrupt and employers could no longer employ such a large workforce, if any at all. Unless Roosevelt had acted quickly, so many Americans would have found themselves living on the streets, after being unable to keep up with their mortgage payments. By introducing the New Deal he gave these people a lifeline, allowing them to rearrange their mortgages in order to cope with their temporary unemployment or financial crises.
After share prices collapsed, the money that had been supporting some of the USA’s biggest industries simply disappeared. Stocks in these industries sunk to an insignificant low and could no longer provide the financial backing that these companies needed in order to keep operating in the same manner. This meant that employers had to start cutting the spending budget in order to keep making a profit and therefore were forced to start sacking their workers. Many companies were forced to shut down altogether resulting in a great loss of jobs. This sudden boom in unemployment had to be dealt with and is in turn part of the reason behind the introduction of the New Deal.
Yet another thing that Roosevelt wanted to ensure when he was in office, was the security of workers rights so this could not happen on such a vast scale again. When the workers eventually went back to work they wanted to feel protected so that they could work without fear of being sacked. They also wanted the rights that nowadays most employees take for granted and to give them all this, they needed Trade Unions to be set up. Up until 1935 and the introduction of the Wagner Act employers could simply say that they didn’t want for any of their workers to be members of such unions and could sack them if they joined. But with the ‘Second New Deal,’ came their rights to become members without the worry of expulsion or such like.
Probably the worst hit industry in America as a result of the Wall Street Crash was agriculture. Throughout the 1920’s American farming methods were considered the most efficient and technologically advanced in the world. However, they actually started to become too capable at producing huge quantities with only small inputs that over-production began to occur all over the USA. Crop prices fell and very soon farmers, especially those working on a small scale could no longer make any profit. They found that the excess of food meant that vast measures were left unsold which left farmers unable to get any money for what they produced. Farm labourers especially, started realising that with the introduction of modern machinery, for those not working on the massive commercial farms, it was no longer a profitable business. They were therefore forced to pack up and leave on their way to the cities where they believed the money was to be made. The government had to put an end to this mass migration of farmers to the cities, as there were certainly not enough jobs for those already living there, let alone the ever-increasing population of ex-farmers. Roosevelt realised that farmers therefore had to be encouraged to go back from where they had come and this can be seen from the introduction of such agencies as the AAA.
These factors were in basic, the main reasons for the introduction of the New Deal. Had the Wall Street Crash never occurred, it goes without saying really that, the New Deal would never have been called for. But the Great Depression that followed the crash was a period that has gone down in history as one of mass deprivation. Roosevelt needed to introduce the New Deal to counteract with the dramatic events of October 1929, in order to bring America out of poverty and back into its former state of prosperity. Probably the main problem that most of his New Deal was aimed at tackling was the unemployment crisis, as this, in itself a spin-off affect of the Wall Street Crash, created so many other problems within the American economy. Roosevelt obviously felt that once he had got people back to work again, the other crises that followed would sooner or later sort themselves out.
3. “The New Deal was not a complete success,” How Far do you Agree with this Statement? (10)
The numerous different groups of people in American society all felt very differently about what Roosevelt was doing with his power as the President of America. The New Deal meant going against the grain of American politics, as up to the 1930’s, the tradition was for the government not to get involved with the everyday life of American citizens. Republicans for example, felt that Roosevelt was trying to gain too much control over America and it was therefore, gradually turning into a dictatorship. On the other hand were the more radical opponents such as Huey Long who felt that Roosevelt’s New Deal did simply not go far enough in ending poverty.
However, nobody would have argued that the Great Depression did not need dealing with and whatever your view on the subject it is clear to see that Roosevelt was in the least, trying to help. After the Wall Street Crash the Republican president put the blame upon the people of America for not working hard enough. The Republican beliefs of ‘Self-Help’ and ‘Laissez-Faire’ certainly were not going to do the American economy any good and so the public obviously felt that it was time for a change. Herbert Hoover accepted no responsibility for the crash and therefore felt no need to play any part in helping the economy back on its feet again. He believed that it would, given time sort itself out and if he tried to get involved, he would only make matters worse. Hoover decided there was no need to therefore to take action yet by the time of the 1932 elections, three years had passed since the Wall Street Crash and the situation had only deteriorated. The public obviously thought that if Hoover was unwilling to sort his country out, it was time to elect somebody who cared and who wanted to make everything right again. Then there came along Roosevelt, promising to make America great again and improve the quality of life for every American.
Roosevelt promised a ‘New Deal’ for Americans in which he would work hard and play an active role in putting forward measures to help ease the suffering and put an end to the depression. He announced that the first hundred days of his Presidency would be a period of intense activity by both himself and the government. The first thing that Roosevelt did when he came into power was to ensure the depression got no worse. He did this by introducing the Banking Act, which stopped the slumping American economy in its tracks. If it were not for his quick thinking, almost every bank in the USA would have gone bankrupt, taking millions of people’s savings from all over America with them. It gave the economy a lifeline allowing it to drag itself back on its feet and only then could it begin to recover.
To reassure the public that a repeat of the Wall Street Crash was off the cards he introduced the Securities Exchange Commission. This put an end to any dodgy dealings that had taken place in such abundance during the 1920’s when the government would not get involved and was a step to secure such catastrophes a thing of the past. It forced companies issuing shares to provide full public information about the company so that potential buyers would no exactly where their money was going. It meant that the collection of illegal companies who had sprung up with the sudden boom and confusion of the stock market were forced into submission, as no one any longer was ignorant enough to invest their money in a firm that was obviously not trustworthy.
Roosevelt also succeeded in preventing the death of thousands of people who had been kicked out of their homes after losing their jobs and were instead having to live rough on the streets. He set up FERA, which gave money to both state and local governments to provide relief for such people. Soup kitchens were set up, and emergency supplies were handed out such as food and blankets. Americans were starving to death and had Hoover still been in power he would have claimed that they clearly did not work hard enough. Roosevelt could see that this was both not the case and that it didn’t matter. If there were thousands of his people at risk from dying, as President of the USA, he believed it his duty to do something and to prevent this from happening.
He also realised that more people were still losing their homes and a greater number still, their jobs. He therefore set up the HOLC in order to provide such people who had lost their job and were at risk from loosing their home too, with the chance to resettle their mortgage payments whilst in temporary unemployment. He also introduced various schemes to bring down the unemployment rate, which had shot up after the Wall Street Crash. Agencies such as the CCC provided work for the unemployed on environmental projects such as fighting forest fires and strengthening riverbanks. These soon began to take affect as the unemployment rate dropped once again, steadying the decline of the American economy. Other such agencies including the PWA created jobs I a similar manner but this time on large-scale construction projects such as schools, hospitals and road networking. Such projects not only created jobs but also provided better facilities for the country to benefit form on a whole.
Along with the PWA came the NRA whose aim it was to improve working conditions and introduce certain standards into the work place. Although this was ruled unconstitutional by the Supreme Court and therefore had to shut down, it was replaced with the Wagner Act in 1935. This confirmed workers rights to join trade unions and in turn give employees such power that they could only dream of before. A minimum wage was introduced throughout the country and child labour was quickly stamped out. The Social Security Act was also set up at the same time, which brought about a national insurance scheme, providing benefits for old age pensioners, unemployed and the disabled. Such rights, American citizens had never been given anything of the sort before, and they clearly made everyone feel much more confident and secure.
Probably the worst hit area of industry after the Wall Street Crash was agriculture. Throughout the 1920’s, the American farm industry had been the most efficient and productive in the world. However, this soon came crashing down around them when over production began to occur. The fact was that American agriculture was simply too productive for any one country to handle and as they could not sell their goods in foreign markets due to the measures Hoover had introduced, the American market became flooded and prices dropped to an unprofitable level. Farmers could no longer make any money out of the business and so many became unemployed. Roosevelt therefore introduced the AAA who soon sorted the industry out. They destroyed surplus produce, giving farmers compensation for lost crops and bought then slaughtered millions of livestock in order to increase the prices again. The agency set farmers quotas for production and helped those in danger of losing their homes. The Dustbowl, which had created havoc in central-America during the early 1930’s, was put to an end by the CCC, who planted millions of trees in order to prevent soil erosion and make the land, once more farmable. The poverty stricken regions of the Tennessee Valley were dealt with by the introduction of a new agency to bring the area back to life by rebuilding the area. As the areas main industry was agriculture, the measures introduced by the AAA and the prevention of the Dustbowl by the CCC meant that the area’s economy soon began improve and sort itself out.
From the introduction of the New Deal, hope sprang back to the American people, in the midst of the gloomy atmosphere created by the Great Depression. Since the Wall Street Crash, citizens of America had been in a cloud of despair, which had only now been lifted with the introduction of the New Deal. Roosevelt had seemingly conjured a shortcut for America, when the end of the road seemed distant and tiresome. It meant that there was now no need to look to the drastic measures of extremist parties that Germany had fallen to such as Hitler and Nazism. Roosevelt served three terms as President of America, being re-elected back into his position twice, which ended only when he died in 1945. This goes to show that he must have been an extremely popular President and therefore obviously did the country a world of good. This can be seen in the way he is ranked as one of the top three best US presidents of all time, along with the likes of George Washington and Abraham Lincoln, as voted every year by American historians.
However, the New Deal certainly did not put an end to racial discrimination and did in fact, for many black Americans, make their situation even worse. Roosevelt was only interested in his power of Presidency and therefore did not want to lose the support he had gained from white southerners by introducing any measures, which would make black people, in any respect more equal to whites than they already were. The position of black people in America had not improved much since the days of slavery and they were (with the exception of Native Americans) considered the lowest of the low in American society. They had next to no rights and the New Deal did certainly not change this. With the introduction of the AAA, came loans to farmers allowing them to purchase machinery that before, they could definitely not have afforded. This meant that there was now, little need for farm labourers or sharecroppers (the majority of which were black) and so farm owners could see fit to get rid of them, thereby making them unemployed. In total, 200,000 black sharecroppers lost their jobs leaving them with nowhere to turn, forcing them to rely on government relief in order to stay alive. When the minimum wage was introduced, blacks were openly ignored, allowing employers to pay black employees almost as little as they wanted. It was hard for them to find any sort of job as not many white employees were willing to take them on purely due to the colour of their skin. There was no law to prevent this discrimination and house clearance schemes often ended with the expulsion of black people who were living in such houses.
Not only did the New Deal do little to help out blacks, it also ignored America’s poorest citizens, almost as if Roosevelt did not know they existed. The groups who were looked down upon as the bottom of society such as migrants and unskilled workers, simply did not get their fair share out of the New Deal. An example of this can be seen in the way Native Americans were treated. The land that had been previously allocated to them was extremely poor and infertile making it difficult to grow anything in order to survive. Roosevelt did nothing to change this and as a race it became extremely tough for them to coexist with the developing world. It seemed Roosevelt felt they made up a small minority of the American population and therefore it didn’t really matter if he brought about no benefits for them, as long as he kept everyone else happy then he would still get re-elected.
Yet he clearly didn’t even manage to do this. Republicans and businessmen felt that he was interfering far too much with the everyday lives of the American public. The New Deal was very expensive to keep going and it meant that taxes therefore had to be increased to support it. The upper classes didn’t want to pay these taxes, when the Republicans were in power they didn’t have to, so why should they now. They were perfectly well off and needed none of the support Roosevelt was offering, so through their eyes it seemed there was no point in giving their money away to people who obviously hadn’t worked hard enough. They had preferred things the way they were before Roosevelt came into power, when the government wouldn’t keep pestering them about their everyday lives. On top of that, the introduction of the minimum wage meant that business was now less profitable for employers and they had started to get hassle from the Trade Unions that had formed to improve working conditions. The number of strikes and demonstrations rose dramatically as the ever-increasing number of workers realised the benefits they could obtain from joining these newly formed Trade Unions. The Republicans however, had a point that even the Supreme Court could see. A number of the agencies Roosevelt had set up had been banned after the Court began to rule that he had exceeded his presidential powers and that some of the codes he had introduced, infringed on the rights of individual states. Republicans also argued that the jobs he was providing were only temporary he had given no real long-term solution to the unemployment problems. This theory was actually proven to be correct, as in 1937, the year he cut government spending on employment schemes; the unemployment rate began to rise once again. They said with all the help Roosevelt was dishing out, workers were becoming lazy and felt they didn’t really need to look for work, it would find them.
On the other side however, many people felt that he had still not done enough. Opposition from the left wanted him the split the wealth even further, as the majority still considered themselves to be in a period of poverty in comparison to the prosperous 1920’s. The spending levels in 1937 were still much lower than they were in 1929; leaving many feeling that confidence was not yet properly restored. Millions supported the radical, Huey Long’s, ‘Share Our Wealth’ scheme, which went to show that people were still feeling that Roosevelt had still not done enough to bring America completely free from the Depression.
In reality, Roosevelt would have started to find himself in difficulties if it were not for the outbreak of another world war. This provided millions of jobs for the unemployed and is why many people believe it was the war, and not Roosevelt who ultimately solved America’s unemployment problem. Roosevelt could not have afforded to keep agencies such as the CCC going, on such a large scale for a much longer period of time and yet as soon as he stopped spending, unemployment levels would have shot straight back up.
Nevertheless, I feel that to say the New Deal was a failure would certainly be an unjust statement. Of course it was not a complete success, but then again not much in life is. Had Hoover stated in power, America’s road to recovery would have taken a much longer route, full of twists and turns. Roosevelt offered a shortcut, and although there may have opposition to it at the time, I feel that not many people now would choose to criticize it. By actively getting involved with the economy, he rescued it from the brink of disaster, and whilst he did not manage to lift it back onto the plateau of prosperity, it would have taken superhuman strength to do so. This is portrayed by the fact that he served three Presidential terms, with each election winning by an overwhelming majority and so was clearly held in high esteem by the people of America. That is why I do not deny the fact that the New Deal was not a complete success and yet I feel I would struggle to find anyone who would not say it was successful in comparison to what Hoover would have done (bearing in mind this would have been nothing) had he stayed in power.