How successful was the new deal?
How successful was the new deal?
America's "Great Depression" began with the dramatic crash of the stock market on "Black Thursday", October 24, 1929 when 16 million shares of stock were quickly sold by panicking investors who had lost faith in the American economy. At the height of the Depression in 1933, 24.9% of the Nation's total work force, 12,830,000 people, were unemployed. Wage income for workers who were lucky enough to have kept their jobs fell 42.5% between 1929 and 1933. It was the worst economic disaster in American history. Farm prices fell so drastically that many farmers lost their homes and land. Many went hungry.
President Franklin Delano Roosevelt took office in March 1933. He had promised the American people a New Deal and immediately set to work to create jobs for the unemployed. People had different opinions of the New Deal. There were many who opposed his policies. They did not believe that the government should be spending taxpayer's money to find jobs for the unemployed. Roosevelt felt differently to these people. He was prepared to use this money to get the American economy back on track. Between 1932 and 1936 Federal Government spending increased by nearly 80% - most of it on Roosevelt's job creation schemes. The voters supported what Roosevelt was trying to do and re-elected him in 1936, 1940 and 1944.
The job creating schemes that Roosevelt created were successful and unsuccessful. There were some that worked well and there were some that made more problems. Different sections of the American society had different views on certain schemes.
The first alphabet agency to be set up was the Civilian Conservation Corps (CCC). The CCC gave work to unmarried men aged 18 to 25 whose parents were out of work. The agency was run by the army and the US Forestry Service, which set up camps in America's woods and forests. The CCC became very popular. More and more people joined. By July 1933, 300 000 young men were living in 13000 camps all over America. By 1938 almost two million had served in the CCC. Most of the young men had served the CCC for a period of 6 months to a year.
The men in the CCC camps were given food, clothing and shelter - either in huts or tents - in return for their work. They also got pocket money of one dollar a day, but camp rules said that they had to send $25 home to their parents each month.
The CCC worked mainly to improve and conserve the country's forests. In the Midwest it planted more than 200 million trees in a 17 million acre "shelter belt" to stop soil erosion. As well as planting the tree, the CCC also did other things such as:
* Made reservoirs and fishponds
* Built fire look-out posts in forests
* Treated tree diseases like Dutch Elm disease
* Cleared up beaches and camping grounds
* Restored historic battlefields
The CCC was a great success in the views of many people. The young people that came out of the CCC said that it taught them things such as lorry driving and how to pour concrete. They also said that being in the CCC prepared them for work. It also made young men stronger and more healthy. The CCC was definitely a success. President Roosevelt said in 1934 "The CCC activity has probably been the most successful of anything we have done. There is not a word of complaint."
Another agency ...
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* Restored historic battlefields
The CCC was a great success in the views of many people. The young people that came out of the CCC said that it taught them things such as lorry driving and how to pour concrete. They also said that being in the CCC prepared them for work. It also made young men stronger and more healthy. The CCC was definitely a success. President Roosevelt said in 1934 "The CCC activity has probably been the most successful of anything we have done. There is not a word of complaint."
Another agency was the Agricultural Adjustment Administration (AAA). This came into being on 12 May 1933. Roosevelt had instructed the secretary of Agriculture; Henry Wallace for immediate aid to farmers and this is what he came up with. His aim in setting up the AAA was to reduce the size of farmer's crops by 'adjusting' them. His idea was that if smaller amounts of farm produce were sold at market, the price would rise, giving the farmers bigger profits.
The AAA set to work straight away. The first thing they did was give money to farmers to destroy their crops. Many thousands of cotton farmers received over $100 million for ploughing that summers cotton crop into the ground. Many Americans hated the idea of destroying the crops. They were even angrier when the AAA bought six million baby pigs from the farmers and slaughtered them all. Even though the meat was canned and given away free to the unemployed, it seemed crazy for the government to pay farmers not to produce food. It was probably the farmers who were the only people that were happy about the decision to do this. The AAA's adjustment of farm prices worked. The prices of farm produce quickly rose and so to did the farmers incomes.
Although the AAA seemed to look very successful, there were some people that lost out because of this. These people were the sharecroppers. Over half the three million sharecroppers in America were black, and most lived in slum conditions. The AAA policy of destroying crops made conditions ever worse for the sharecroppers. Once they had helped the farm-owner destroy the year's crop, there was no more work for them to do. Thousands of sharecroppers had to pack their belongings and look for work elsewhere in the country. So the AAA was a success for the farmers but a failure for the sharecroppers.
America's biggest environmental problem when Roosevelt took over as president was in the Tennessee Valley. The Tennessee at the time was a dangerous river. Every spring, the river flooded and washed away millions of tonnes of topsoil and destroyed the farms in the area. In the summer it often dried up so much, that it parched the farmland. Each year the eroded land of the Tennessee Valley produced fewer crops. The people that lived near here grew hungrier and poorer until, by 1933, half the state were living on dole money paid by the state.
This problem was far too big a problem for the CCC to handle. So in May 1933 Roosevelt set up a Tennessee Valley Authority (TVA).
The TVA began by building dams on the Tennessee River. At the touch of a button, the dam controllers could close the massive gates to hold back the river when it threatened to flood. In all, the TVA built twenty-one massive dams over the next ten years.
The TVA dams brought many benefits to the region. First, they were used to make cheap electricity. Powerful turbines built into the walls of the dams were driven by jets of water released from the lakes behind them. By 1940 the twenty-one dams were producing 3.2 billion kilowatts of electricity each year. A second benefit of the dams came from the lakes that built up behind them. The lakes were long, wide and deep - ideal for water transport. Locks built into the sides of the dams meant that ships could now travel 1000km up the river, carrying coal, steel and other products to the regions factories. The factories could also now transport their products to distant areas for sale, and this increased their profits.
The TVA was definitely another success for Roosevelt. It helped provide profits for some companies because of the transport links it provided and it also protected many of the homes and farms around the Tennessee area.
In June 1933, the National Recovery Administration (NRA) was set up. Roosevelt said in a speech that the aim of the NRA was 'the assurance of a reasonable profit to industry and living wages to labour'. This meant that factories should try and make profits but without using child labour.
The official in charge of the NRA was General Hugh Johnson, who was an ex soldier. He helped run American industry during the Great War. Johnson drew up codes of fair competition, which he asked businessmen and factory owners to sign. The codes fixed fair prices on goods that were sold and they also made sure that there was a minimum wage.
When a company signed a NRA code it was allowed to use the symbol of the NRA to help advertise its products. By September 1933 over 500 industries, ranging from things like boiler making to laundering, had signed NRA codes. They covered two million employers and 22 million workers. In New York they held a parade to show how successful the NRA had become. Over 250 000 people attended the parade.
Although the NRA was looking like a success, it soon ran into difficulties. Employers who hated trade unions refused to sign the codes because they wanted to prevent their workers from unionizing. Other people signed the codes but ignored parts that they didn't like. Also complaints were being made about the NRA, particularly by small laundries. The small laundries were in competition with each other and often accused one another of breaking the code on minimum wages. The NRA took legal action but the laundries complained to the government that the NRA were bullying small businesses. But if the NRA took no action then other businesses would complain that the codes meant nothing because small businesses were breaking them.
So what started off as a success for Roosevelt, the NRA soon turned unsuccessful and businesses began to break the codes.
Harold Ickes the secretary of the interior organized the Public Works Administration (PWA). Ickes was very careful with the government's money and believed that he should organize schemes that would last a long time and be of great use to America. He also did not like the idea of paying money to waste time. Between 1933 and 1939 the PWA did all of the following things:
* Built 70% of America's schools
* Built 35% of America's hospitals
* Built four big river dams
* Electrified the New York-Washington railway
* Built two aircraft carriers, four cruisers and four destroyers for the US navy
* Built 50 military airports
* Built a new sewage system in Chicago
Many people admired the way that the PWA did not waste time in doing all of their projects but the PWA only provided work for skilled and able-bodied people. It did nothing for the millions of people that were unskilled. So the PWA was a success for skilled people and in building so many things but was unsuccessful in providing work for the millions of people that were unskilled.
The new deal had much opposition. I will now look at some of the people that opposed it.
Senator Huey Long from the state of Louisiana was the best-known opponent to the new deal. When the depression hit Louisiana, he did as much as he could to help the poor by spending public money on building roads and new hospitals, and by providing free schoolbooks. Although many people disagreed with Long's ideas, he had a gang of armed men to make sure no one stepped out of line or tried to stop him.
In 1932 Huey Long became senator of Louisiana. In his speeches for the senate he criticized Roosevelt for doing too little to help the poor. He put forward an alternative new deal, which he called the 'Share our wealth' movement. He promised that if he were president, all fortunes over $3million would be confiscated. This money would be given to American families to buy things like cars and radios. He also proposed things like free education, old age pensions and a national minimum wage.
Huey Long put many of his ideas into practice but also used his power to rig elections and to bribe police. He was doing what he liked. However his power came to an end when his bodyguards shot 61 bullets into a doctor who tried to oppose him but 1 ricocheted into Long and he was killed by it.
Another opponent to Roosevelt was Father Charles Coughlin, a Roman Catholic priest. Coughlin claimed that Roosevelt that was 'anti-god' and he decided to fight him in the 1936 elections. To improve his chances of winning the election, Coughlin joined forces with another opponent to the new deal. Frances Townsend, a retired doctor from California. Doctor Townsend wanted the government to give $200 to every citizen over 60. The money from this would come from a 2% sales tax.
Townsend and Coughlin had millions of supporters. When the two of them joined forces with Gerald Smith, Huey Long's successor, their chances of victory in the coming election looked very good indeed.
Roosevelt's answer to these problems was to begin all over again. In 1935 he began a 'second New Deal' to replace the agencies that the Supreme Court had declared illegal.
The agencies that got shut down by the Supreme Court were because of 'Sick Chickens' case. This was a group of brothers that owned a chicken corporation. In 1933 along with other firms in New York, they signed the NRA code agreeing to the NRA rules of fair prices, fair wages and fair competition.
In 1935 the Schechter brothers broke one of the NRA codes by selling diseased chicken to people. The NRA took the Schechter brothers to court. When the brothers were found guilty by the court of breaking a NRA code, they appealed against the verdict. This then went to the Supreme Court who declared that the NRA had no right to meddle in the New York poultry trade. The Schechter brothers were acquitted and the code was declared illegal. This case destroyed the NRA. Overnight 750 codes had to be scrapped by the NRA.
The New Deal was a success in some ways and unsuccessful in some ways. There were some agencies that did work such as the CCC, TVA and the AAA and there were some that didn't work like the PWA and the NRA, which worked for a while. Most of the agencies that Roosevelt and others set up worked for some people but didn't work for others. Roosevelt was definitely a success in the way that he gave so many people jobs. There were many people that opposed Roosevelt but were not able to stop him from being re-elected in 1936. I think is because the people had faith in Roosevelt and when he proposed the second new deal, they wanted to see whether or not he could make it work. Most people like Roosevelt as the president of their country although there were people that opposed him.
I think Roosevelt's new deal had successes and failures but in the whole I would say it was a success.
Chris Pounder
