How Successful Was Roosevelt’s New Deal?

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How Successful Was Roosevelt’s New Deal?

        Roosevelt set out with clear views on what the New Deal was to do, but not so sure as to what measures this would involve. During the time in which he was campaigning for the election, it became clear the Franklin D. Roosevelt wanted to use the full power of the United States’ Government to relieve Americans from the great depression. His main priorities and characteristics are listed below:

  • Getting Americans back to work
  • Protecting their savings and property
  • Providing relief for the sick, old and unemployed
  • He believed strongly in an ‘active Government’ to improve the lives of ordinary Americans
  • He had plans to spend vast quantities of public money on getting people back to work. As Governor of New York he had already started doing this in his own state
  • He was not afraid to ask for advice on important issues from a wide variety f experts such as factory owners, union leaders or economists

He succeeded to some extent in each of these tasks, but getting the American population back to work was a constant headache for him.

When Franklin D. Roosevelt came to power the country was in the worst depression that America had ever had. The lack of confidence, by the American public, caused 659 banks to fail in 1929. AS the banks began closing, the people’s confidence plummeted and in 1930, another 1352 banks were forced to close. Even the biggest banks suffered heavily. In December 930 The Bank of the United States, in New York, went bankrupt. It had 400,000 depositors, the majority of whom were recent immigrants. Almost 1/3 of the population of New York saved with it. To make matters worse, 1931 saw many European banks close their doors to customers. A billion dollars of hard cash were withdrawn from banks and put into deposit boxes, or stored at home, as panic set in. People felt that hard cash was the only security that they had against the depression. In 1931, 2294 banks went bust.

Americans then, instead of buying new gods or shares, kept their money to themselves, and President Hoover did little to relieve the misery of the population. As businesses cut production, lay off workers and reduced the wages of those still in work, industrial production slumped by 40% between 1928 and 1933. Wages fell by around 60%. The unemployed workers had no money to spend and so demand for new goods fell rapidly. In 1933, there were almost 14 million unemployed and 5000 banks had gone bust. Farm prices fell so low the cost of transporting the animals was higher than the price of the animals themselves. Total farm income fell to $5 billion. International trade was also in tatters, after falling from $10 billion in 1929 to $3 billion in 1932.

        From his first day in the office of the Whitehouse, Roosevelt took action. One of the many problems affecting America was the huge loss of confidence in the banks. He tackled the problem by ordering all America’s banks to close and to remain closed until government officials had inspected them. Within a few days, 5000 banks that were deemed trustworthy were allowed to re-open. If necessary, they were given Government money to help them. At the same time, Roosevelt’s advisers had come up with a series of rules and regulations which would prevent the reckless speculation which contributed to the Wall Street Crash.

The immediate action which Franklin D. Roosevelt took astounded most Americans and they began to think that Franklin D. Roosevelt was going to see them through the depression. One of Roosevelt’s advisers at this time said “During the whole Hundred Days Congress, people didn’t know what was going on, but they knew something was happening, something good for them.” In the Hundred Days, Roosevelt sent fifteen proposals to Congress and not one was refused.

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

The Civilian Conservation Corps (CCC) was aimed at unemployed young men in particular. They could sign on for periods of six months, which could be renewed if they could still not find work. Most of the work done by the CCC was on environmental projects in national parks and the money earned (about $1 a day) generally went back to the men’s families. The scheme employed around 2.5 million young Americans.

The Agricultural Adjustment Administration (AAA) tried to create long-term solutions for American’s farmers, who were struggling to compete with their Canadian counterparts. It set quotas to reduce farm production in order to force prices gradually upwards. At the same time the act allowed farmers to modernise and to use farming methods which would conserve and protect the soil. Farmers also received help with mortgages if they were in extreme hardship. Although the act helped to modernise farms and raise prices, it put many farm labourers out of work.

One of Franklin D. Roosevelt’s other ‘Alphabet Agencies’ was The National Industrial Recovery Act (NIRA), which set up two important organisations. The first was the Public Works Administration (PWA), which used government money to build structures that would be vital once America had recovered and also created millions of jobs. Some examples of projects included building new schools, airports, bridges and roads. The other agency was the National Recovery Administration (NRA) which improved working conditions in industry and outlawed child labour. Although it was voluntary, firms who joined could use the Blue Eagle as a symbol of presidential approval. This scheme encouraged over two million employers to create better working conditions for workers.

One of the other, numerous, agencies that Franklin D. Roosevelt set up in the ‘hundred days’ was the Tennessee Valley Authority (TVA). The Tennessee Valley was a huge area of land which cut across seven states, In the wet season, the Tennessee Valley would flood while in the summer, it would be little more than a trickle. It was a huge dust bowl. There were social problems also. Most people within the Tennessee Valley lived in poverty and had no electricity. IT was difficult to states to co-operate and the Tennessee Valley was too large for one single state to handle. To combat this problem, Franklin D. Roosevelt set up the TVA, which could cut across the powers of local governments. This authority built six major dams and, as well as producing cheap electricity, made it possible to irrigate the dried-out lands. It also created thousands of jobs in an area of great poverty.

Despite all of the schemes to alleviate unemployment, Franklin D. Roosevelt still struggled to keep unemployment down. The New Deal and Franklin D. Roosevelt’s ‘fireside chats’ had not restored America’s confidence. By 1937, Americans were only spending about 75% of what they had in 1929. This meant that the money spent by Franklin D. Roosevelt’ government was not circulating as intended as the Government were not receiving the money back in taxes and therefore, industry was not stimulated as intended. It wasn’t until war broke out in 1939 that the problem of unemployment was finally solved.

Although Franklin D. Roosevelt did not alleviate unemployment, it does not mean that the New Deal wasn’t a success. Franklin D. Roosevelt built many public buildings and helped a great deal of Americans. Many black Americans and immigrants struggled to find jobs, as they were not rated very highly by most employers.

A programme like Roosevelt’s New Deal was unheard of in American history. It was bound to attract opposition. His Republican opponents particularly objected to the immense cost of the New Deal, which had to be paid for by the American taxpayers. This was a concern even for some more cautious members of Roosevelt’s own Democratic Party. The Governments of individual states also expressed anxiety about the way in which the Federal Government was meddling their own affairs, and in the life and work of Americans. This was very much against the recent trends of government in America.

Many Republicans thought the New Deal was dangerous. The US Government was now intervening in everyday life in a way it had never done before. Some feared that this could bring about a dictatorship in America. Many businessmen believed that the government should keep out of business affairs, as the Republicans had done in ‘the roaring twenties’. They saw government-run projects such as the Tennessee Valley Authority as the ‘thin end of the wedge’, leading to increasingly government-run industries. Some people thought that if Roosevelt was not stopped, America would end up with a socialist or communist system like that of the USSR, where all businesses were run by the government. Many businessmen agreed with leading Republican Frank Knox when he said:

“The New Deal candidate has been leading us toward Moscow.”

Many other Republicans feared that The New Deal acts had given American workers too much power. Other Republicans pointed to the fact that under Roosevelt the size of the Government was growing at a tremendous rate. In 1932, there were 500,000 US civil servants. By 1939 there was be 920,000.

Franklin D. Roosevelt’s enemies also argued that parts of the New Deal were morally wrong. For instance the Agricultural Adjustment Administration’s policies meant that thousands of farmers were paid to destroy their crops and plough them back into the ground as a means of keeping up prices. Republicans said this was an inhumane thing, especially at a time when many Americans were going hungry. The Supreme Court agreed with the Republicans and declared the AAA ‘unconstitutional’ in 1935. Some of Roosevelt’s opponents were also against social security for the unemployed, and against old age pensions. They felt that these measures could lead to Americans ‘going soft’ or being less keen to work hard.

Others did not like the way the President’s wife, Eleanor, did a great deal for the poor and unemployed. These people said that she should not take part in political affairs but simply remain at her husband’s side. Conservative Republicans and Democrats attacked Roosevelt for going too far and by liberal Democrats for not going far enough. The Old South seemed to be getting little from the New Deal, southern blacks least of all.

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Franklin D. Roosevelt even had opponents from within his own party. His main opponent in the Democratic Party was Senator Huey Long of Louisiana. Alden P Hatch tells us:

“Long was a shameless politician who played on people’s prejudices. He was a creature without morals or honour. He was building a political empire in the South by methods, which even the most ruthless politicians would think twice about. He appealed to the wild, unthinking fringe and was just the type to make himself a dictator if he could. He was making alarming progress, even among the sanest members of ...

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