Analyze the key elements of Franklin D. Roosevelt's First New Deal.
The classic analysis of Roosevelt's various New Deal programs has grouped them into one of three categories: relief, recovery, and reform. Most of the initial programs in the first New Deal (1933-34) fell into the first two categories, with a few notable exceptions. Relief measures included the following:
- Federal Emergency Relief Administration, which issued grants to cash-strapped states to use in providing assistance to people who had been affected by the depression.
- Agricultural Adjustment Act, which took drastic steps to help struggling farmers by stablizing agricultural prices.
- Civilian Conservation Corps, which put thousands of unemployed young men to work in conservation projects.
- Public Works Administration, which created large public works projects (such as highways, bridges, and dams) that created jobs for thousands of Americans.
Recovery measures included some programs intended to simply restore the economy to its former footing, but others aimed at permanently improving the lives of Americans while stimulating the economy (the PWA could fall in this category as well). They included:
- National Industrial Recovery Act, which was intended to stimulate industrial production through a series of price controls and incentives. This led to the creation of the NRA (National Recovery Administration) which created a massive bureaucracy for regulating industry.
- Tennessee Valley Authority, which built dams through the impoverished Tennessee River Valley to control flooding and to provide electricity.
Reform measures included permanent attempts to regulate the banking and financial systems of the United States. They included:
- Federal Deposit Insurance Corporation, which insured investors against bank collapse with federal funds.
- Glass-Steagall Act, which regulated the relationship between investment banking and commercial banking, limiting the amount of speculative investment that banks could engage in.
These are only a small sampling of the dozens of laws and executive actions of the First New Deal. Additionally, many of the other major New Deal reforms, such as the Wagner Act and the Social Security Act, are generally considered part of the so-called Second New Deal. But thinking of Roosevelt's aims in terms of the "three R's" can help make sense of what the New Deal was intended to do.
New Deal had 3 aims :
- Relief - helping poor and unemployed to overcome starvation and homelessness
- Recovery - getting the economy and industries going again
- Reform - measures such as unemployment insurance, old age pensions and help for sick and disabled
- Prohibition Abolished - 1933
Roosevelt said, “I think this would be a good time for a beer”
This turned millions of criminals into loyal citizens
- Alphabet Agencies
National Recovery Administration (NRA)
- Formed by National Industrial Recovery Act (NIRA)
- Codes were drawn up which industry owners and businessmen were encouraged to sign and follow
- Fixed a minimum wage for workers
- Limited working hours
- Abolished child labor
- Right to join trade unions
- Strike-breaking practices were outlawed
- Fixed prices of goods
- 2.5 million firms joined
- They were allowed to use NRA’s sign - The Blue Eagle
- Such publicity campaigns encouraged public to buy from these firms
- These firms were favored when contracts were awarded
Agricultural Adjustment Agency (AAA)
- Paid farmers to produce less
- By taking lands out of production
- By reducing livestock
- Farmers’ incomes doubled from 1933 to 1939
- AAA caused tenants and sharecroppers to lose work since cultivating land was reduced and machinery was used
Civilian Conservation Corps (CCC)
- Gave jobs to single men under 25
- They cleared land
- Planted trees to stop erosion
- Strengthened river banks for flood control
- Lived in government camps in countryside
- Got food and clothing
- Earned dollar 1 a day which was sent home to parents
- It was voluntary and 3 million men took part by 1942
Tennessee Valley Authority (TVA) - Most impressive scheme
- Set up to develop Tennessee Valley, an area cutting through six states
- Poverty stricken area with soil erosion
- 650 mile waterway linking major river systems gave easy access to area
- 33 dams built to control Tennessee River
- Power stations on dams provided cheap electricity
- TVA became biggest producer of electricity in USA
- Hence, industries like light engineering moved to this area
- Thousands of jobs were created
- Quality of soil improved to facilitate farming
- River and dams provided water for irrigation to prevent Dust Bowl
- Forests were planted
- Health and welfare facilities were provided
- Revived both agriculture and industry in the same scheme