How Successful was the New Deal 1933-1941 in Pulling America Out of the Economic Depression

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Last updated: November 11, 2019

In this essay I shall be exploring how successful the New Deal was and whether or not it managed to pull America out of depression. I feel that the New Deal did solve many of America’s problems and did bring prosperity. However, it also had other factors that surrounded it which also contributed strongly to clearing up America. The Second World War certified America’s stability in the future because it meant that other countries were suddenly in just as bad a position as the USA.

Therefore, the USA saw an opportunity to build off this and, in a sense, invest in the war.It is this view that I shall be exploring by looking at his opponents views. By doing this I will be able to see all the different opinions on the New Deal and come to a conclusion. In 1933 more and more people were beginning to lose their jobs and 24 percent were unemployed or part of an unemployed family. This was all due to a combination of overproduction and under-consumption.

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During the twenties the American public were investing heavily in the stock market. People saw it as an opportunity to make quick and easy money. The problem was that share prices can go up and down so it was an unsteady business.It relied on a company doing well for share prices to stay high which meant that as long as wages were high and the economy was booming then you would be fine.

It was like a time bomb waiting to explode and it did in 1929 when 16 million shares were sold in one day. America was now in depression. Herbert Hoover was the president at the time; he was a Republican and a strong believer in coolidge’s policy of keeping the government out of business. This attitude meant that the seriousness of the depression was not recognised soon enough by Hoover.From his election in 1929 Hoover encouraged people to get a head for business so that every American could enjoy a high standard of living. The problem with everyone going into business for themselves is the market will undoubtedly be flooded and not be able to handle the extreme influx of buyers.

Most of the events in this period were blamed on Hoover. It is true that when the country desperately needed government action, Hoover did not provide it. After all, according to him Americans were all “Rugged individuals” and therefore could fight their way out of anything.

Of course this was not entirely true and America needed some sort of aid from the government. The American Historian G B Tindall criticised the attempts made by Hoover to tackle the Depression: “Not only did the policies of public officials help bring an economic collapse, but few public leaders acknowledged the crisis. They thought that the economy would cure itself. These ideas set limits to government action” I agree with Tindall when he says that the American government thought that the economy would cure itself.Hoover disregarded the situation and thought that America could and would dig itself out but he could not have been more wrong because unemployment was rising rapidly and by Roosevelt’s election it had reached its highest level. Roosevelt became president in 1933 and promised a fresh approach to the problem. He had three main aims: to help industry, business and farming recover from the depression, to cut unemployment and provide jobs for people and to provide relief for those who had been hardest hit by the depression.

This was called “The New Deal” and historians believe that it changed the USA for the better and increased peoples respect for the government. Roosevelt was known for his enthusiasm and I feel that it played a major part in boosting the countries moral during the Depression period. The word “Depression” suggests an emotional problem which is often caused by some sort of financial problem. Therefore, by giving a fresh, positive approach to the financial difficulties America faced it gave people, or at least helped people feel better.It means that if people feel positive they will be willing to pull themselves out of depression and into repair.

Before Roosevelt’s election he gave a speech where he said: “Give us your help” This shows me the way that Roosevelt urged the people to join him in tackling the economic crisis. That statement creates an image of cooperation and equality. The fact that there was a sense of equality between the government and general public meant that there was a greater chance of solving the situation.Hoover was nothing in comparison as far as positive thinking went and I think people saw this and realised that there was light at the end of the tunnel when it came to Roosevelt. The main thing that Roosevelt managed to do was put people to work in any way possible. In his famous speech where he said: “The only thing we have to fear is fear itself” He goes on to say that action is needed in order to pull America out of the economic depression. At first this sounded to me like an obvious thing to be putting forward but I realised that Hoover did everything but take action against it.

In 1933 Roosevelt began his first hundred days in office. He closed all the banks for four days to allow emergency legislation to happen. Only stronger banks were allowed to stay open and Roosevelt went on to urge people to put their money back into the banks instead of withdrawing all the time.

Because of the direct and open approach Roosevelt used in his fireside chats people began to put their money back into the banks and as a result 75% of banks re-opened. This was a triumph but it had to be short lived because there was still much more to do.The tactics that I think made a real difference were the Alphabet Agencies. These were set up to give jobs to as many people as possible and to stop the despair that was setting in. The Public Works Act (PWA) organised building projects such as tearing down slum housing and replacing them with new blocks of flats. A man called Harold Ikes was in charge of the project and as a result over a third of America’s Hospitals were built.

His next move was the Civilian Conservation Corps (CCC). This employed people to do such jobs as planting trees and introducing more fish into rivers this employed over two million.Roosevelt was trying but I think that even with his positive and enthusiastic attitude he was struggling.

The introduction of the AAA was a success for farmers because it cut the amount of food produced so that the prices of food coming from farms rose. However, this meant that the poor who lived in the city could not afford good food. The Tennessee Valley Authority (TVA) was the next step and supervised the building of dams which helped stop floods and soil erosion. This meant that the percentage of people in with electricity rose from 3% to 75% in the poorest parts of America.Therefore, two years had passed since the introduction of the New Deal and Roosevelt had managed to achieve much but he had only saved two million out of the eleven million unemployed people still left in America.

I feel that the first New Deal was not effective enough in pulling America out of the economic depression. When you look at how much Roosevelt did, compared to how much he actually achieved I begin to see that the problem had been left to bury its roots deep into American society for a long time.I believe Hoover had not addressed the problem properly and had let it become entrenched to the extent that serious work needed to be done to pull America out of depression. However, in all fairness Roosevelt had increased respect for the government and passed many new laws, which put people back to work. By doing this, the taxes for the wealthy were steadily increasing due to the money being spent on the New Deal. This meant that Roosevelt began to get many opponents, which was the last thing he needed while trying to help his country walk on its own two feet again.Roosevelt was accused by the Republicans of trying to bribe the American people into voting for him by offering all the job creation schemes.

He was spending much money on all the acts and his opponents did not think America could afford it. Big businesses opposed the New Deal as well because they felt it offered too much power to the workers. The reason this was such a problem was because if you give the people more power they are less easy to control and this angered the businessmen. Also, the New Deal interfered with their business.Their were many more unions being put into progress and child labour had been stopped so it was seeming to be less and less like the businessman’s world they had been used to. America was definitely making subtle moves into Socialism at this point and I feel this was a good thing but Roosevelt needed to be careful to keep some supporters on the government. The Supreme Court decided that the Agricultural Adjustment Administration and the National Industrial Recovery Act were unconstitutional. As a result Roosevelt was forced to drop the two acts.

The reasons for the opposition from the Supreme Court were thought by some to be because of Republican influence. This cannot be proven but Roosevelt did try to bring in new members claiming that the rest were too old. Congress frowned upon this idea and accused FDR of trying to “Dictate” the system. Roosevelt had been shouted down from all angles and it seems to me that if he wanted to find support, he need look no further than the people. 1936 arrived and Roosevelt won the election with 61% of the votes on his side.

He set about creating the second New Deal which was going to cure America of its economic disability. Also, the rich community in America was strongly opposed to the higher tax schemes that Roosevelt had inflicted on them. Historians argue over the reasons as to why the second New Deal began.

Some think that he needed to respond to his opponents and prove them wrong. Others take the view that the supreme courts crack down on Roosevelt (NRA which had been said by the Supreme court to be unconstitutional) made his outlook on things much more radical hence pushing him towards the second New Deal.Either way, Roosevelt was responding to critics and, in a way, trying to improve in the eyes of others in order to keep America in a good frame of mind. The first act in the second New Deal was the Works Progress Administration (WPA), which had the same ideas behind it as the other Alphabet Agencies except this involved 8 million which was a good number of people. The act was wide-ranging involving everyone from builders to musicians and artists. There were jobs for everyone like building roads and painting murals on the side of motorways.

Once again Roosevelt came under attack from the conservatives who said that the jobs involved with the WPA were pointless and dubious in value. It got to the extent that a federal theatre that was sponsored by the WPA was accused of being a Communist organisation. This just shows how Roosevelt was up against more than just the depression. In 1940 Germanys Blitzkrieg on Western Europe meant that the isolationist view that America had was put aside after being deemed to strict by Roosevelt. Weapons were now being shipped out to other countries fighting in the war.I feel that this was a good move for Roosevelt because it meant America could gain from Europe’s misfortunes. By selling weapons Roosevelt was ensuring America’s financial stability and after all, they could only gain from the situation. This “war spending” is an important point to take into consideration because it meant that Roosevelt was opening up jobs while at the same time investing in America’s financial future.

Therefore, in conclusion I feel that the First New Deal managed to boost the moral of the people.As I said earlier for the depression to have been cured you need to make sure the people are prepared to work hard instead of thinking of it as a problem made by the government and therefore should be dealt with by the government. Roosevelt achieved this positive attitude by being completely honest and engaging with the people in a way that Hoover never did. This meant that public began to dig themselves out of poverty and try to get their lives back. A British Historian called N Smith writes: “Unemployment was far lower by 1939 than it had been in 1932, and America survived the Depression without the threat of dictatorship.

This is an important point because America did not have to deal with the war to the same extent as Europe. This meant that Roosevelt chose to use the war to gain as well as to help You could argue that he used the war to open up job opportunities and bring prosperity to America. This was a serious advantage for Roosevelt which is why I have come to the conclusion that the New Deal itself was successful but only to a certain extent.

If you look at the statistics it is obvious that Roosevelt did the best he could because by 1940 the income of the USA had doubled since 1933.It provided jobs and money and, in general made people feel positive. As it says in a textbook called “America: Past and Present”, “The moderate nature of his programmes, especially the NRA led to slow and halting industrial recovery” I think that the key words here are slow and halting. It took time but Roosevelt managed to put America on the path to financial recovery despite opposition from the Republicans, the Supreme Court and even certain members of the Democratic Party like Huey Long who disagreed with big businesses having too much power.My view is that World War II was the main reason for ending both the New Deal and the Depression.

Responding to the external threats posed by the Powers of the time (Germany, Japan and Italy) Roosevelt and the Congress spent what was necessary to win the war and as a result they also achieved much higher levels of employment and prosperity. Also, if you look at World War Two as part of the New Deal I think that it was a success. It was the deciding factor in the problem and I feel it saved America to a certain extent.

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