ROOSEVELT AND THE NEW DEAL - (THE FIRST NEW DEAL) - 1933-35
Introduction: Whilst Hoover was President, the depression kept getting worse. By 1933 some cities were without power as the power companies went bankrupt. Virtually every bank had closed. America was in chaos.
Roosevelt had won the election of 1932 but he actually became President in 1933. He said that the only thing ‘to fear is fear itself’. By this he meant that things would get better if people took positive action and did not let their fears hold them back by causing panic and chaos (e.g. in the banking system). Roosevelt thought that the fight against the depression was like fighting a war. Consequently, he used the Trading with the Enemy Act (passed during World War 1) which allowed him to change the law without asking Congress. Roosevelt was determined to take positive action to restore peoples’ confidence in the economy - this was the New Deal.
Aims of the New Deal: Roosevelt took positive action by establishing the Federal Government Alphabet Agencies. Unlike Hoover, Roosevelt thought that the Federal Government had a responsibility to help. The Alphabet Agencies were designed to:
*End the depression by increasing demand and raising confidence. This was primarily to be done by creating new jobs and protecting old ones.