History- The New Deal

• Franklin D Roosevelt became president

  March 1933
• Franklin D Roosevelt: '"The only thing we have to fear, is fear itself."'
• The first 100 days of Roosevelt's presidency signalled the end of the Republican Party's laissez-faire approach to helping the economy
• New Deal


  A new set of policies created by Roosevelt to deal with the effects of the Great Depression
• Aim of the New Deal

  • To save American capitalism
• The New Deal enabled Congress to pass 15 major new bills addressing a range of problems
• 1933 Emergency Banking Act


  Temporarily closed all banks to inspect them, and only the well-managed and stable banks were allowed to reopen
• People's confidence in the banking system was restored


  People began putting their money back in banks. Banks could lend money to businesses again
• 1933 Economy Act


  All government employees' pay was cut by 15 per cent
• 1933 Beer and Wine Revenue Act


  Prohibition was ended
• Organised crime began to decline

  Selling alcohol meant it could be taxed to raise money
• 'Priming the pump'


  The idea behind the New Deal was for the government to stimulate the economy
• Alphabet agencies


  • FCA (Farm Credit Administration)
  • AAA (Agricultural Adjustment Agency)
  • CCC (Civilian Conservation Corps)
  • PWA (Public Works Administration)
  • WPA (Works Progress Administration)
  • NRA (National Recovery Administration)
  • TVA (Tennessee Valley Authority)
• The FCA gave money to farmers who were struggling to pay their debts. Around 20 per cent of farmers benefitted from this scheme
• The AAA paid farmers to produce less so prices could rise and farmers could make more profits. This was criticised as farmers were paid to destroy food
• The CCC gave around 3 million unemployed men aged 18-25 jobs on conservation projects
• The PWA created jobs by paying unemployed people to build schools, bridges and dams
• The WPA replaced the PWA in 1935. It created millions of jobs in construction and public buildings
• The NRA set fair prices, wages and working conditions. Businesses that chose to participate displayed a blue eagle logo. In total, around 2.5 million firms employing roughly 22 million workers joined the scheme
• The TVA redeveloped a huge area that covered several states known as the Dust Bowl. This had suffered from soil erosion and flooding, and the people who lived there were generally poor. The TVA created dams to improve soil quality and generate electricity
• Groups who thought the New Deal had gone too far

  • Republicans
  • The wealthy
  • Businesses
• Groups who thought the New Deal had not gone far enough

  • Huey Long
  • Dr Francis Townsend
  • Father Charles Coughlin
• The Supreme Court declared some New Deal agencies such as the NRA and AAA as unconstitutional
• 1937 Supreme Court controversy


  Roosevelt tried to enlarge the court by 'packing' it with six new justices who might be more supportive
• Roosevelt's plan backfired


  He was criticised by members of his own party, his supporters, Republicans and his opponents and was accused of acting like a tyrant
• It was ultimately not until 1941, once the US economy geared up for World War Two, that full employment and prosperity returned to the levels seen before the 1929 Wall Street Crash
• Achievements of the New Deal

  • Restored confidence and improved the stability of the banking and financial sector
  • Rebuilt trust between the government and the people
  • Provided support to millions of Americans when they faced unemployment, homelessness and hunger
  • Created jobs and 'primed the pump' when the economy needed intervention to help it recover
  • Introduced a national system of pensions and insurance against unemployment
• The New Deal did not support women directly initially, but later agencies such as the WPA did employ women, though mainly in unskilled jobs
• Most help from the New Deal went to large-scale farmers. Small farmers and farm workers did not see much benefit
• The AAA helped as prices began to rise, incomes increased and evictions from farmland dropped, but it also displaced many sharecroppers
• The New Deal alphabet agencies provided relief and jobs for skilled and unskilled workers
• The 1935 National Labor Relations Act (Wagner Act) gave workers the right to join trade unions and stopped employers from using many unfair working practices
• Approximately 10 per cent of the budgets for New Deal relief programmes were targeted to African Americans, but there was discrimination and segregation
• The Indian New Deal policies were partially successful, restoring self-government to some Native American nations, providing loans for businesses and creating more educational opportunities
• Native American communities continued to experience high levels of poverty