The Great Depression, an era of great poverty, misery, and hopelessness, proved to be one of the most dreadful time periods in all of America’s history. During the Great Depression, dreams were lost and having a moderate amount of food everyday became a difficult challenge for many. Nonetheless, through the dark clouds, appeared the next president of the United States: Franklin Delano Roosevelt. By offering hope in his inaugural address, Roosevelt boosted morale and despair from the country for he had developed 15 methods to help the American people in this time period of melancholy.
Congress approved all 15 procedures, which were part of the president’s New Deal program. Regardless of it’s potential to change America completely; many criticized the New Deal for being unconstitutional. However, during the New Deal reign, it stood strong and helped the country of America, more than it didn’t. When Roosevelt became president, it was quite clear that banks were no longer trusted and that many banks were financially in trouble. As a consequence, Roosevelt decided to create a bank holiday, meaning that all banks were to be closed for a few days.
On March 9, it took only Congress a few hours to pass the Emergency Banking Act. This act gave permission to the government to examine all banks and allow those that were financially performing well, to reopen. Roosevelt then told the American people to reinvest and trust the banks once more. When the banks reopened, $1 billion in deposits flowed in the system. In later days, Congress created the Federal Deposit Insurance Corporation in June1933. This reform insured each bank deposited up to $2,500 a day and consequently, banks gained more trust from their investors.
As money once again started to flow, it helped stabilize the financial situation of the country. After achieving this goal without difficulty, Roosevelt issued an executive order to create the Farm Credit Administration. The purpose of this was to provide low interest, long-term loans to farmers. Farmers then paid off mortgages and overdue taxes, bought back-lost farms, and purchased the needed seed, fertilizer, and equipment. The outcome of this program was quite obvious; farming would once again flourish and thus, more food available for the American people.
In April, Roosevelt asked Congress to create a similar program expect for non-farming personal. Congress without hesitation passed the Home Owners Loan Corporation. It addressed the problem to those who could not pay off their mortgage. By 1936 it saved at least a million American families by granting them low interest, long-term mortgage loans. Other programs established because of the New Deal, were aimed for many unemployed Americans. Roosevelt in May of 1933 encouraged Congress to establish the Federal Emergency Relief Administration, with half a billion dollars for relief aid to be given directly to state and local agencies.
Nearly 8 billion people were surviving on public assistance. However, many disliked the idea of aid. Seeing this, Harry L. Hopkins organized the Civil Works Administration. This organization provided jobs to many. Jobs included, raking leaves, and picking up litter. To aid unemployed men between the ages of 18-25, Congress established the Conservation Corps in 1933. Many men left their homes to be trained at these army camps. Once they were trained, they planted trees, cleared underbrush, created park trials, and made campgrounds and beaches. Their wage was a dollar a day.
Although the diverse jobs were not suited for many, but at least now people were earning their money and helping the nation, instead of just watching the days pass by. Although to an extent, some of the ideas that were proposed to improve the nation were indeed excellent. However, some, unfortunately, turned out to be unconstitutional. For example, the National Industrial Recovery Act. Passed by Congress in June 1933, its purpose was to thrust the economy. It was designed to stimulate industrial and business activity and reduce unemployment by stabilizing prices, raising wages, limiting workers’ hours and providing jobs.
Two new federal agencies, the Public Works Administration and the National Recovery Administration were created. The Public Works Administration, supplied jobs, and dealt with private businesses to construct roads and public buildings. On the other hand, National Recovery Administration, encouraged businesses to have fair competition between their rivals. In other words, businesses would agree to work together to stabilize prices, wages, and hours. The thought of fair competition grew immensely popular amongst many. But enthusiasm soon faded, because businesses would not obey the various rules.
Workers complained the codes held their wages down while consumers complained that the codes pushed prices up. People soon began to mock the National Recovery Administration by calling it ‘National Run Around’. Pretty soon a question arose, whether or not the National Industrial Recovery Act was reasonable. In 1935, this question reached the Supreme Court and the National Industrial Recovery Act was found unconstitutional. Another issue that the New Deal tired to improve during the Great Depression but turned out to be unconstitutional was agricultural.
To raise farm prices and thus increase farmer’s purchasing power, Roosevelt proposed that farmers cut production. This idea or Agricultural Adjustment Act was approved and passed by Congress in May 1933. The Agricultural Adjustment Administration was established and they paid farmers to reduce their output of cotton, wheat, corn, hogs, rice, tobacco, dairy products, and other substances. The money for these payments came from taxes on food processors that included meat packers, canners, and flour millers.
In about a year, the production of many agricultural products reduced and thus the price for each item increased. Agricultural growers now had more money to spend and because of this, economy recovery occurred. Critics however, saw the negative side of this program. They pointed out that the taxes on food processors were passed along to consumers, in the form of higher prices. While farmers’ income rose, the purchasing powers of city dwellers declined. Critics also pointed out that a farmer with large land holding benefited from the Agricultural Adjustment Administration more than small farmers.
When large landowners cut production, sharecroppers were forced off their land and kept all of the government payments for themselves. As a consequence, poorest farmers were pushed deeper into poverty. In 1936, the Supreme Court stopped Agricultural Adjustment Administration taxes’ and stated that it was unconstitutional to process tax. All in all, the numerous aspects of the New Deal impacted various features of the United States. Some had a positive whereas some had a negative impact upon the country. However, the overall theory of the New Deal met the challenges of the Great Depression.
Firstly, the New Deal brought the Emergency Banking Act and for that reason, people embraced banks with trust once again. Secondly, through the New Deal, Federal Emergency Relief Administration, Civil Works Administration, and Conservation Corps provided the unemployed with some sort of occupation. Regardless of its pay, the job helped not only a particular individual, but it also helped the country. Although, some branches of the New Deal may have been unconstitutional, it is clear that they still helped the country.
Given, the current situation, some sacrifices were needed in order to thrive the country once more. Paying cotton growers to not produce surplus amounts of cotton was unconstitutional. However, the economy was boosted greatly, because of this. Also unconstitutional was the National Industrial Recovery Act. Its purpose was to boost industrial and business activity and reduce unemployment by stabilizing prices, raising wages, limiting workers’ hours and providing jobs. However, it proved to be unconstitutional for asking companies to not compete was out of the question.
But, when the idea of having no competition was functioning, the reasons behind the formation of the National Industrial Recovery Act could be seen. Generally speaking, the creation of the New Deal was to salvage the country from completely declining. Ideas of the Constitution that are so greatly protected needed to be ignored to a certain extent for the benefit of the country. Therefore, the New Deal, regardless of the fact that some characteristics of the theory were unjust and unconstitutional, it faced the challenges of the Great Depression and facilitated the rise of the country.