What measures did Roosevelt introduce in his ‘New Deal’ to bring recovery in banking, agriculture and industry? How successful were they by 1939? Roosevelt promised ‘Action, and action now’. However, he did not have a clear idea what exactly should be done or how much it was going to cost. He worked intimately with a panel of experts called the ‘Brain Trust’, to put together a programme of new laws, which would help America out of its depression. He called it the ‘New deal’. This new deal programme had three main aims: Relief, recovery and reform.
Relief was to relieve extreme poverty, feed the starving and stop people losing their homes or farms. Recovery was to revive the economy by getting industry going and people working again; and Reform was to make the USA a better place for ordinary people by bringing in measures such as unemployment insurance and old-age pensions, and help for the sick, disabled and needy. Roosevelt realised how important it was to gain the trust of the American people and arouse their confidence.
Therefore, just eight days after his inauguration, he gave the first of his famous radio broadcasts, which became known as ‘fireside chats’. He explained his actions in a simple and direct way, and asked Americans to work with him. Roosevelt’s broadcasts were astoundingly successful, none more so than the first one, which dealt with the important issue of the banks. In becoming President, Roosevelt’s most urgent problem was to rescue the banks. Since 1930, over 5000 banks had been forced to close down, and the banking system was on the point of collapse.
This is because savers had withdrawn their money and businesses had not been able to repay bank loans. Therefore immediately FDR, ordered all of America’s banks to close and remain closed until they had been checked fully. This closure was known as a “four day holiday”. After this break 5000 banks, which were thought to be honest and trustworthy were re-opened. If needed, the banks would be supported by the government loans to help them continue operating and to reassure people that their money would be safe. Roosevelt had achieved his first aim in the New Deal.
He did this by reassuring the public’s confidence in the banking system, therefore they would deposit more money in banks because it was in “safe hands”. To make sure everything went to plan, FDR and his advisers came up with a set of rules, which would prevent the reckless speculation, which contributed to the Wall Street crash. The emergency Banking Act and Securities Exchange Commission gave the American people a taste of what the New Deal was going to consist of. They started to feel more secure under FDR’s presidency.
The reform method was a long-term solution, the depression shaved up shortfall in the way society was organised. Two examples of relief alphabet agencies were the Federal Emergency Relief Administration and the Civilian Conservation Corps. The FERA helped thousands of Americans who were homeless, penniless and on the brink starvation. More soup kitchens were introduced. Also with $500m employment schemes were set up therefore trying to give more people jobs and money. If people got money they would spend it in shops, then the shops would make a healthy profit and an end to the depression would be in sight.
The American people, with this agency could now trust FDR because he said he would use government money and he was delivering with the $500. The CCC agency took young men under the age of 25 out of the cities and into the countryside where they were put in camps. In these camps they were made to do hard work such as cleaning land and planting trees. For this the young men got food and clothes and some money. Many of the young men would have sent much of this money to their families back in the city. This would provide relief for the family back home because extra income would be coming into the house.
Also the family in the city would have one less mouth to feed therefore they would be saving money, which once again would provide relief. In my view FDR did well to set up these two agencies, but they were not solving the problem of the depression, but anyhow it was a start and I am sure the American people would have welcomed the reform. The AAA paid farmers to produce less food, by taking land out of the production or reducing their livestock. FDR’s idea was that if there was less produce this would mean the prices would have to go up. So between 1933 and 1939 farmer’s income doubled.
By introducing this agency FDR helped farmers but did not help the sharecroppers and tenants who worked on the land. Many of them were evicted because of lack of work and they were replaced with machinery that the government funded, yet another example of FDR fulfilling his promises. If the farmers were earning twice as much money they would start to buy more things, then other shops and businesses would get a healthy increase in takings; hence the economy gets working again. The NRA simply made people to promise to act fairly and responsibly.
This was a very popular agency and was similar to the Wagner Act in my opinion, which was set up to improve the conditions of workers. The bad side to the NRA was that its schemes were voluntary; employers could ignore them and this is where the Wagner Act was brought in. There were also other factors such as the war, trade unionists and the cinema, which helped improve the lives of ordinary Americans. World War 2 helped to revive the sloping economy of America because when certain European countries were running short of tanks and weaponry they would turn to the USA and buy what they needed from them.
This led to a healthy amount of income, which did the US economy no harm at all. The demand for American manufactured goods increased dramatically during the war, hence more money was being pumped into the economy and there were more jobs in the factories where the goods were being manufactured. If more people are getting employed and they have money, they are going to spend it in shops and then business picks up for the shops and it starts to do well. The point I am making is there is an upward spiral of getting out of the depression because of World War Two.
This factor had nothing to do with Roosevelt because it was not something that he caused. From the outset the workers staged demonstrations but it was clear from the start they needed government support. This is where FDR was partly responsible for helping the trade unionists. One might wonder, would Roosevelt have introduced the act if the workers had not staged demonstrations? The Wagner Act showed employers that employees had government support. In my opinion Roosevelt took a back seat and the workers took the front one because they staged demonstrations.
FDR was like a silent partner. He did not do enough but the workers took control and decided to take a stand for themselves and it paid off. The employers had to treat and pay more attention to the workers. After the struggle with the Supreme Court, the New Deal appeared to be running out of steam, especially when a second wave of depression hit America in 1937. The reforming days were largely over and in January 1939 Roosevelt acknowledged that the New Deal had come to an end. There is no doubt that the first phase of the New Deal from 1933 to 1936 brought about a degree of recovery.
However, in 1936 there were still around 9 million unemployed in the USA. Although this was a reduction of over 4 million since Roosevelt became president in 1932, it was seen as a failure, by critics who wanted the government to take even more radical action. Some groups who had been badly affected by the depression had still not received any help by 1936. For example, the old did not receive pensions until 1940 and the plight of many agricultural workers remained desperate, despite the work of the Resettlement Administration.
Then in 1937, the government started to spend less money on its schemes, production fell again and a second wave of depression hit the country. Roosevelt pumped billions of dollars into the economy to prevent the situation getting worse. However, it was clear that continual injections of government money were needed. It was only after 1941, when the USA became involved in the Second World War and the demand for American manufactured goods and food increased dramatically, that the economy was lifted out of depression.