How successful was the new deal?

• New Deal

  Program introduced in 1933 by President Roosevelt with 3 main aims: relief for the unemployed/poor, rebuilding the American economy, and reforms to create a fair and just society
• First Hundred Days

  1. Between March and June 1933

  2. Roosevelt made a deal for 100 days, known as the 100-day deal

  3. Marked a change from the laissez-faire attitude the govt had previously taken toward the economy

  4. Established the idea that the govt was responsible

  5. Permanently increased the size and power of the federal government
• 3 main aims of the New Deal

  • Relief or assistance for the unemployed or poor
  • Rebuilding the American economy
  • Reforms to create a fair and just society
• New deal legislation followed the order: Relief, recovery, reform
• FDR: '"We have nothing to fear but fear itself"'
• In the first hundred days of office, FDR got Congress to pass many proposed laws
• Alphabet agencies

  The program of New Deal legislation would become known as
• FDR's approach to recovery

  Stimulate demand for goods by putting money into consumers' hands, hoping to increase their spending and thereby increase demand
• Reforms of the New Deal


  • Aimed at fixing the defects in the American economy so the depression wouldn't happen again
  • Based on the belief that the government should protect individuals against risks that they could not handle on their own
  • Increased the power and presence of the national govt in the lives of all Americans into the future
• Banks

  1. Shut down all banks and give a bank holiday for 4 days

  2. Bank closings soon decreased as he gave the people time to process and have faith, restoring public confidence

  3. FDR explained what he was doing through national radio broadcasts

  4. Federal Deposit Insurance Corporation - insured banks so people would not lose any savings in the event of a bank failure

  5. Emergency Banking Act - 5% of banks shut down completely, the rest helped with grants and advice
• Civilian Conservation Corporation (CCC)


  • Gave young men voluntary employment in jobs like planting trees, cleaning up parks, and living in government camps
  • Provided 2 million men with low-wage paying jobs
• Public Works Administration (PWA)


  • Created jobs initiating major public construction projects like building schools, roads, and bridges
  • Spent $7 billion creating jobs
• Civil Works Administration (CWA)


  • Provided temporary work in the winters of 1933-4
  • 4 million jobs were created, but the scheme ended in April 1934
• National Labour Relation Act gave employees permission from trade unions
• Norris-la Guardia Act prohibited courts or the govt from stopping peaceful union strikes
• Agricultural Adjustment Act


  1. Paid farmers to plant less to increase crop prices

  2. Million acres of sown land ploughed and 6 million piglets slaughtered

  3. Prices rose, and farmers' incomes doubled

  4. However, many farm labourers ended up unemployed
• National Industrial Recovery Act

  1. National recovery administration (NRA) set business codes to stabilize production and price and improve working conditions and pay

  2. Voluntary codes for each industry for regulation of prices, output, hours, and wages

  3. The public was encouraged to buy from businesses that implemented these codes

  4. Led to improvement in working conditions and reduced child labour

  5. However, favoured large firms and forced smaller firms out of business

  6. Supreme Court ruled the scheme unconstitutional and wasn't revived again
• Federal Emergency Relief Administration (FERA)


  • Gave money for emergency relief to those in need
  • Budget - $500 million
  • Funded soup kitchens and set up work schemes and nursery schools
• Tennessee Valley Authority (TVA)


  • Aimed to restore the prosperity of the Tennesee Valley area by planting forests, building dams, and introducing flood prevention schemes
  • Attracted new industries and became a showcase for the New Deal
• Reasons for opposition to the New Deal

  • Did not seek communist and socialist solutions
  • No nationalization and major redistribution of wealth
  • Some thought FDR did not go far enough
  • Conservative Americans thought FDR was too radical
• "Radio Priest" and the National Union for Social Justice

  • Father Coughlin from Detroit broadcasted his ideas on the radio every Sunday evening to an audience of 40 million Americans
  • Was originally a supporter of the New Deal but then felt it was doing enough for the poor
• Townsend Clubs


  • Dr. Francis Townsend - author of Townsend Plan
  • People over 60 receive a pension of $200 a month given they spent the money within the month, funded by taxation
  • Created to help older people, create jobs for the young, and inject money into the economy
• Huey Long's "Share our Wealth" scheme


  • Senator Huey Long planned the redistribution of wealth to stimulate the economy
  • Included confiscation of large fortunes, lump sums for families, pensions, minimum wages, and free education
  • Had 7.5 million supporters in 1935
  • Assassinated in September 1935
• Republican opposition

  • Believed in minimal govt intervention, low taxes, love govt expenditure, self-help, and individual responsibility
  • Saw the New Deal as undermining core American values
  • Compared TVA and NRA to Stalinist economic planning
  • Claimed Roosevelt became too powerful and was acting like a dictator
• Liberty League, 1934


  • Created by business leaders to unite opposition to the New Deal
  • FDR was accused of becoming socialist and destroying the free enterprise spirit of America
  • Businessmen disliked his support for trade unions and the various codes of NIRA
• States' rights campaigners


  • State governors argued that the new deal rules conflicted with the state govt rights to manage their own affairs
  • Objected to the TVA as it compelled state govts to cooperate with federal govt
• Supreme Court opposition

  • Most of the nine judges were old, conservative, and Republican
  • Declared NRA and AAA unconstitutional
  • FDR tried appointing 6 judges who would agree with his policies in 1936 but was accused of trying to pack the court and overthrow the Constitution
  • Supreme Court began to drop its opposition and supported two key measures in 1937, one of them being the pensions section of the Social Security Act
• Arguments that the New Deal was a failure


  • Unemployment never fell lower than 14% of the workforce in the 1930s
  • Businessmen and industrialists weren't happy with the encouragement of trade unions under the Wagner Act, leading to violence
  • Tenant farmers, labourers, and sharecroppers were forced off the land by government plans to reduce agricultural production
  • Didn't end racial discrimination, as support of the Democrats in the south was needed
  • Recovery was held back due to an increase in rules and regulations, taxation, and the formation of trade unions
  • Economic revival of 1940 and 1941 was arguably due to defence spending and supplying armaments to Britain and France rather than the New Deal
• Arguments that the New Deal was a success

  • Unemployment fell by over 30% between 1933 and 1939
  • Trade union memberships increased to 7 million following the Wagner Act, with disputes settled in workers' favour and working conditions and pay improving
  • Large-scale farmers benefited from the Agricultural Adjustment Act
  • Welfare payments and other emergency benefits helped millions of Americans, making America seem more compassionate
  • Roosevelt's policies gave people hope, confidence, and a sense of purpose, ensuring the survival of America without resorting to extreme measures
• Second New Deal, 1935-1937

  1. Emphasis on victims of depression and creating a fairer American society

  2. Wagner Act replaced the NRA and supported the rights of employees to form trade unions

  3. Social Security Act provided unemployment insurance, old age pensions, and help for the sick and disabled

  4. Work Progress Administration (WPA) addressed unemployment through a range of work projects

  5. Resettlement Administration focused on the plight of farm labourers, sharecroppers, and tenant farmers
• When Roosevelt became president, unemployment was at 12.8 million, 25% of the workforce. By 1941, unemployment was down by 5.6 million.
• Reasons why unemployment persisted despite the New Deal

  • Low incomes during the 1930s meant less money was spent on American goods
  • Overseas customers also suffered from the depression, limiting expansion of exporting industries
  • Improved production methods like more machinery reduced labour needs in agriculture
  • The world economy went back into recession in 1938 after improving between 1933 and 1937
  • Businesses had to reduce production capacity to survive the recession, leading to job losses
  • Roosevelt couldn't take complete control of the economy as Congress wouldn't allow it, so the economy recovered at a very slow pace