The New Deal

In October of 1929 the stock market crashed. Forty percent of the value of stocks was lost. Although this happened politicians and many big wigs in the industry stayed faithful in the fact that economy would move forward. They could not have been more wrong. Many Americans ended up losing their life savings. Stocks in New York were worth one-fifth of what they were worth just four years before. Factories, banks and even farms began to shut down. It got so bad that by 1932, one out of every four Americans was unemployed.

The Great Depression had a bad effect on family structure in the United States. Poor families were faced with the task of a lifetime, trying to survive. They were almost no jobs for the man of the house to find to support his family. Many fathers who were the primary provider of income in the household went into a mental depression. Some even went as far committing suicide. Children at this time were forced to assume more responsibilities. At one time only concerned with going to school and getting their education, now many young people felt compelled to take on the responsibility of financially supporting their family by getting jobs and in effect dropped out of school. Lower class, middle class and upper class families were all in the same boat; and the upper class got a taste of how the poor people lived. In losing everything many families also lost their homes. This caused a lot of migration. With the constant migration and people settling from place to place came the construction of “Hoovervilles”; which were little communities made up of families on the move with little houses and huts made up of boxes, crates and any other scrap material that could be found.

With the country at its knees hope came in the form of a new president. President Roosevelt had simple philosophies; he thought just like the common citizen. As a result of his illness he kept the feeling of being a common man, in a way you can say it kept him grounded. In 1921 Roosevelt was diagnosed with Polio which is a disease of the nerve cells of the brain, this crippled him. At first he had no optimism in ever getting to live a regular life but he had that drive in his heart and he took the fact that he felt nothing could hold him back and applied it to politics. If he could overcome he felt he could will the country to overcome anything. He bridged the gap between the rich and the poor. He was ready to try anything that was needed to improve the economy of the country. He knew Americans were anxious for change and he wanted to be the man to bring that change. President Roosevelt was a very inspiring orator, his speeches uplifted Americans and gave them hope that their lives would improve. This improvement would come in the form of The New Deal.

Immediately after Roosevelt accepted the Democratic nomination for president in 1932, he made his eminent announcement of his promise of a “New Deal”. “Let us?.highly resolve to resume the country’s interrupted march along the path of real progress, of real justice, of real equality for all our citizens, great and small??There are two ways of viewing the government’s duty in matters affecting economic and social life. The first sees to it that some of their prosperity will leak through?..to labor, to farmer, to the small businessman. That theory belongs to the party of Toryism?. But it is not, and never will be the theory of the Democratic Party.”[1] As soon as FDR took office in March of 1933, the country took notice and labeled this new phase in American chronology the “Roosevelt Revolution”. He would speak very strongly of moving forward. “I believe, that our industrial and economic system is made for individual men and women, and not individual men and women for the benefit of the system”, “I believe, that the individual should have full liberty of action to make the most of himself; but I do not believe, that in the name of that sacred word, a few powerful interests should be permitted to make industrial cannon fodder of the lives of half of the population of the United States.”[2] Roosevelt felt very strongly about the intensity of the sinking economy. The banking system was going downhill and property was being lost. Roosevelt believed that the American way was that every man has the right to own his own property. Throughout his campaign while pushing the New Deal he used his powerful speeches to encourage the unemployed and homeless, the farmers and also America’s African American population. He applauded their achievements in industry and agriculture and especially how they excelled in the field of education.

With talk of the New Deal many questions arose. Will these new programs and policies have a positive or negative affect on the country? Will they work out long term or will they fizzle out? The whole idea of the New Deal was too set up the country so that it would be prepared and be able to better combat any kind of economic fiasco. The first hundred days which Roosevelt used to try propose his ideas and attempt to find citizens jobs and restoring nuclear family life back to the nation.

With the country in a bind the New Deal had to get put into action. The biggest problem in the country at the time though was undoubtedly the banking system. Bank activity in the United States came to a halt. He put the idea in the nations head, “there is nothing to fear but fear itself.” During his Inauguration in said this,” This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first let me assert my firm belief that the only thing we have to fear is fear itself?nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”[3] Roosevelt’s first plan was to deal with the situation of the banks. The day of his inauguration he proposed a plan to make a bank holiday. The biggest problem with the banks was that people ran to the banks to withdraw all their money which left the banks dry. The banks in effect had no money to handle all its withdrawals and all the deposits it had taken in causing a problem with the patrons of the banks and detracting the credibility of the bank. The Emergency Banking Relief Act (EBRA) was then put into play in March of 1933. This provided banks with a four day holiday to be able to regroup and become financially prepared to reopen for business. The banks were inspected and then given the go ahead. This lead to the Glass-Steagall banking act which started the organization known as the Federal Deposit Insurance Corporation (FDIC) which is still going strong to this day.

Besides the banking acts there other programs that Roosevelt put into action, one of the most significant being the Civilian Conservation Corp (CCC). This was the first New deal program that was put into play after the EBRA. This program was started on March 21, 1933. At this point in time the unemployment rate in the United States was 24.9 percent [4] the highest it had ever been. Thomas Thurston was the director of this program and could sense the urgency of the American people waiting for a change. Over the course of the CCC program over 2.5 million young men ages 18-25 were hired to do work. The work done by these young men provided help to the environment as well as the economy and themselves and their families. They did jobs like planting trees, the pruned and harvested trees for the state, municipal, and private forests. They basically worked on making the national parks a nice place to visit and made them enjoyable. Workers for the CCC also did construction work. They worked on roads, highways, and bridges and built buildings. This in turn helped the economy because these men were getting and there were more buildings, highways and bridges put to use for travel. The workers of the CCC received a salary of 30 dollars per week; of which 25 dollars was automatically sent to the family of the worker for support.

The Federal Emergency Relief Administration (FERA) was a program that supported the unemployed financially. Many of the individual relief programs around the United States were failing. Harry Hopkins, who was in charge of relief programs in New York City, was appointed to head this program. It seems to me that this was one of the earliest forms of welfare. 5 million dollars in federal grants was distributed throughout the country through state agencies and over the next 2 years two million was raised. The money for the program was raised through programs that put unemployed citizens to work. They killed two birds with one stone. Even people who were receiving aid were eventually able to get back on their feet and find work. They main objective of the program was realized and 15 million jobs were created for the unemployed. With this plan working and money being filtered to many states the relief efforts in those states were able to get back on the ground. The Civil Works Administration (CWA) was another program that created government jobs for the unemployed.

The Agricultural Adjustment Administration (AAA) was a program developed in 1933 that was developed for farmers who were doing badly financially since certain crops were not being sold. The AAA program basically paid farmers for reducing the amount of land that they used and limiting the kind of crops they grew. They were then told to raise the prices of these crops. The program gave farmers the opportunity to refinance the mortgages on their farms in order to receive extra funds; this was called the Farm Credit Act, also established in 1933. This act was similar to the Home Owners Loan Corporation (HOLC) this helped middle class citizens keep their homes by refinancing the mortgages just like with the farms. This helped people have one less thing to think about when it came to their financial future.

The National Industrial Recovery Act (NIRA) or also called the NRA was a program developed to improve the prices in industry that were dropping, it was put into place to help business get their policies and workers under control. The program made it possible for different unions to develop collective bargaining agreements; it set a minimum wage and dropped the legal work day from 16 to 9 hours. Under the NIRA child labor was wiped out. This Act helped for a while in the economy but a short time later the prices of merchandise went back up because of the fact that wages went up. Some industries were suffering great losses. When more work was getting done and more products were being produced and consumers buying decreased the industry fell apart once again. The policies of NIRA were not far after deemed unconstitutional. The Fair Labor Standards Act of 1938 also had a hand in child labor but it came much later. Although NIRA tried to stop child labor it still went on. The FLSA banned child labor and also reinstated a minimum wage.

The Tennessee Valley Authority (TVA) was the program that was created by congress and was part of the new deal. They helped the citizens of the United States by giving them electricity. They compared themselves to the rates that other companies charged for electricity. They built dams and power plants to produce and distribute their electricity. The power plants produced electric power while the dams which were obviously built on the river produced hydroelectric power. This power was provided cheap. Not to mention that there was flood control because of the dams, and there were also recreational opportunities proved for the whole Tennessee River Valley. [5]

The Social Security Act confirmed a way for people to feel more secure especially people in old age. This program provided pension for workers in old-age; it also provided funds for mothers with children with no father to support them, benefits for people who were injured on the job, and people that were blind and or disabled. The only problem with this act I that social security didn’t cover farmers or people that did domestic jobs.

The Works Progress Administration (WPA) came later than all the other programs. This program was also to help create jobs but the other reasons for it were deeper rooted. FDR adapted this program to help to keep up the moral of the country because not only did it give Americans jobs it helped to preserve their artistic talents which is always a booster in a time of depression. There were three projects that were started; the Federal Theater Project, the Federal Writers Project, and the Federal Art Project. People were employed to use their talents. The FTP was the biggest success; they hired over 10,000 actors who performed in an array of plays of all kinds. The FWP employed 4,000 writers who helped to write maps, encyclopedias and many other literary works. The WAP was responsible for over 100,000 paintings, 2,566 murals, and 17,700 sculptures and they even stemmed to photography. Many people agreed with the WPA and many didn’t. Some said it interfered with regular big business and it wasn’t taken seriously. Others said it was very positive and like Roosevelt said helped keep up the moral of the country. The WPA was eventually terminated when the country went into World War 2 since the job market was doing fine and there was no need for people to be paid by the government for the arts.

Overall the New Deal helped America more than it hurt it. The banking system was rejuvenated; it was left very secure in that if the situation of a depression were to happen again they would be much better prepared. The stock market ended up less vulnerable to funny practices that could cause it to crash again. The government since then has been more prepared for a situation like that to arise. The political and social changes of the have taken place in America since the New Deal have been seen as nothing short of positive. Although FDR did not realize his goal which was to revamp the capitalist economy of the United States he did in effect make it better. The only difference is that the country went through a drastic alteration which also found success.

Share the joy
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •