In 1932, when Franklin Roosevelt made his ‘New Deal’ speech America was in severe economic depression. This is why it was welcomed, because America was in need of help and restoration.
The New Deal offered relief, recovery and reform, its main new policies being directly associated with unemployment, agriculture, land, and the American industry and economy. To deal with these issues, Roosevelt set up a number of agencies that dealt with them. They became known as the alphabet agencies because they were known with their initials. I will be discussing the main features of the New Deal in more detail in this question.
During the depression, farmers had suffered greatly. With over a million people unemployed, and an equal proportion homeless, the cities could not afford to buy all of the food the farmers’ were producing. Therefore, their income dropped dramatically, and by 1932, one in twenty of all farm owners had been evicted from their homes for failure to pay mortgage repayments. Roosevelt felt that the best thing to do would be to persuade the farmers to cut their production. In March 1933 the Agriculture Adjustment Administration (AAA) was set up.
This provided a system to persuade farmers not to grow as many crops, thus raising farm prices and values and reducing surplus. Cash payments were rewarded to farmers who did this, and it was made easier for farmers to borrow money from the government funds. A new system was set up to aid people keep their farms by means of cheap mortgages. This system was successful, as its long term aim was to gradually increase the value of farmers’ produce.
One of the most significant effects of the depression had on America was the colossal numbers of unemployment it caused. Bank failures and industry problems caused massive unemployment. Over 12 million Americans were unemployed, and the number was increasing every single day. The government provided no kind of support for the unemployed. Millions were evicted from their homes for not paying their mortgages. Only charity organisations, like the Salvation Army, set up breadlines so that people could eat to live. ‘Hoovervilles’ grew up, names after the famous president who believed that in not helping his people, he was encouraging the Americans to sort out their own problems in ‘true American fashion’. Hoovervilles were homes built from rubbish and scraps on waste ground in the cities.
President Roosevelt set up the Civilian Conservation Corps (CCC), which gave jobs to single men under 25. They resided in camps in the countryside and did hard labour, such as clearing the land, planting trees and strengthening riverbanks. This was not compulsory – but its aim was to give these young men a sense of purpose, to give them an option. Many men went, and sent their wages home to their parents. The Civilian Works Administration was also set up. It was intended to give as many people jobs as possible. Work, such as road building was carried out, and smaller jobs occupied people within cities. This scheme was only a short-term scheme organised to occupy people and give some stability. The Public Works Administration was set up next, (PWA). This was to create public works of real and lasting value. Seven billion dollars was spent on employing skilled men to build dams, bridges, sewage systems and houses. Hospitals and schools were constructed and a lot of people were given jobs.
These agencies intended to give work and produce money were not the only features that the New Deal contained. As many Americans were struggling with poverty and homelessness, Roosevelt set up some schemes to help the needy. The Federal Emergency relief Administration was put into action. It was know as the FERA. This administration was given five hundred million dollars to help the thousands of Americans who were homeless, in desperate poverty, without education and without a lot of nourishment or clothing.
Most of the money was used to set up more soup kitchens and breadlines, to provide clothing, schools and employment schemes. The Home Owners Loan Corporation (HOLC) loaned money to over a million people to prevent them from loosing their homes, so they could continue to pay off their mortgages, until they got back onto their feet. These brought up people’s living standards and helped them to become more focused again.
As for getting America’s industry back on to its feet, a number of actions were taken. Another alphabet agency, the NRA (National Recovery Administration) was set up by the National Industrial Recovery Act (NIRA). The aims of the NRA were to increase workers; wages so that they would have more money to spend on goods, to increase the prices of factory goods, to help the factory owners make profits and increase their employment, to give workers a fairer deal in the work place, including better working conditions and shorter hours.
Codes were drawn up for each industry that owners signed, these fixed prices for the goods, limited workers’ hours, set minimum wags and forbade child labour. Workers were granted the right to join trade unions and brutal strikebreaking practises were outlawed. Industries and companies that signed the codes were allowed to show the symbol of the NRA, a blue eagle. This symbol encouraged employment in these places.
Next came the Tennessee Valley Authority (TVA). Set up to develop the Tennessee Valley, a vast area that cut through seven states. It was a poverty stricken area with soil erosion and flooding. The planning of three dams to be built was organised. Measures were taken to improve the soil, and start farming on it, and new forests were planted. A new 650-mile waterway linking major river systems gave easy access to the area. Power stations were built at the dams to provide cheap electricity and domestic consumers. The TVA became the biggest producer of electricity in the United States of America. New industries such as light engineering moved into the area to take advantage of the cheap power. The TVA’s aim was to provide jobs, improve health and quality of life, welfare, wealth and a recovery for many people. This is what it came to do.
The majority of the alphabet agencies were set up by 1935, but there was still more work to be done to reform America and further important new measures were introduced between 1935 and 1938. They became known as the second New Deal. Senator Robert Wagner set up the Wagner Act, in 1955. This act supported workers who wanted to form a union and to prevent employees from sacking workers who were union members. Trade unions gradually began to gain more power and employers had to listen to them. The long-term aim of this was to improve the confidence of workers and to encourage them to speak out about issues within companies. With these gradually increasing, workers and employment would rise, as they were being given equal say and fair rights.
The Social Security Act was set up in 1935. Many European countries had set up social security to help the old, the sick and the unemployed. America had held back on this, because President Hoover believed that good Americans would provide for they’re own future. In 1935 Roosevelt introduced the act, which proposed to give state pension to everyone over 65 years old, to support the handicapped, and support for mothers with dependant children. It also proposed an unemployment insurance scheme to be provided by the individual states, with aid from the federal government.
In conclusion, the New Deal and the Second New Deal had main features that all had long term aims to improve America, and to help bring it out of the depth of the depression. There were other smaller acts introduced, but these were all contained in the main features of the New Deal. Roosevelt came to the American people just in time, and they believed that he would help them. There was opposition to the New Deal, but the many numbers of people who needed serious help overcame this, and though the New Deal was not a one hundred percent success, it did improve the lives of millions of Americans.