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. In the early 1930s, America was in distress and needed urgent help. The Republican Presidents had presided over the boom of the 1920's and believed in "laissez-faire" capitalism.

The presidential campaign of 1932 was chiefly a debate over the causes and possible remedies of the great depression. Herbert Hoover, unlucky in entering the White House only eight months before the stock market crash, had struggled tirelessly to set the wheels of industry in motion again, but constrained by a traditional conception of the federal government's proper role, he could take no drastic action. His Democratic opponent, Franklin D. Roosevelt, already popular as governor of New York State during the developing crisis, argued that the depression stemmed from the American economy's underlying flaws, which had been aggravated by Republican policies during the 1920s. President Hoover replied that the American economy was fundamentally sound but had been shaken by the repercussions of a worldwide depression, whose causes could be traced back to the world war. Behind this argument lay a clear implication: Hoover preferred largely to depend on natural processes of recovery, while Roosevelt was prepared to use the federal government's authority for bold experimental remedies. The election resulted in a smashing victory for Roosevelt, who won 22,800,000 votes to Hoover's 15,700,000. In 1933 the new president Franklin Roosevelt, brought an air of confidence and optimism that quickly rallied the people to the banner of his program, known as the New Deal. "The only thing we have to fear is fear itself," the president declared in his inaugural address to the nation.

President Roosevelt tackled each of the problems through the first and second New Deals. The New Deals were a series of Acts and schemes, which Roosevelt hoped, would pull America out of the depression. Roosevelt decided to tackle the economic problems before he did anything else because he knew that a strong and reliable money system would build up confidence in the Americans, which would act as a foundation for the American economy. The main aims of Roosevelt's New Deal were firstly to revive businesses, industry and farming. Secondly to help the unemployed find jobs and in the meantime provide them with food and money.
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In 1933 Roosevelt proved to the Americans that the promises he made before he was president were not just 'vote winners' because he started to help straight away. The first of Roosevelt's schemes was the '100 days'. The '100 Days' was a relief program in which Roosevelt passed 15 laws which tackled some of America's biggest problems, all within 100 days. First of all, Roosevelt introduced the Emergency Banking Act (EBA). The EBA was designed to end the banking crisis in America. All banks were closed for ten days and only those solvent were approved by the federal ...

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