Successes and Failures of the New Deal

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The New Deal

Write your own balanced account of the successes and failures of the New Deal, reaching your own conclusion as to whether it was a success or not.

Roosevelt was faced with many problems, all of them vitally needed to be addressed. First of all, the stock market had ruined millions of investors who had paid high prices for their shares and had been forced to sell them for next to nothing. Millions of investors had bought shares with money borrowed from creditors, and the latter had no hope of receiving payment and so lost heavily as well. Secondly, banks were also in a shaky position, due to the fact that they had speculated unsuccessfully. Plus the fact that many of the banks were overwhelmed by the millions who tried to withdraw their savings thinking they would be safer at home. Many of these banks were forced to close down, and out of the 25 000 banks in the country in 1929, 10 000 had closed down by 1933. This meant that lots of ordinary people who had had nothing to do with the speculation had been ruined when their life savings literally vanished. Thirdly, demand for goods of all types disappeared, and a lot of people were laid off and many factories had to close. Industrial production of 1933 was half of that in 1929, and unemployment stood at approximately 14 million people, about a quarter of the total workforce. One in eight farmers lost all their property, and living standards fell, with bread queues, charity soup kitchens, evictions when tenants could not afford the rent and near starvation for many. The ‘great American dream’ of prosperity that millions believed in had practically turned into a nightmare. As Mr. McCoy put it, ‘the American people were affected as though a war had been fought from coast to coast.’ Not to mention the absence of unemployment and sickness benefits to help people out. There were large camps, nicknamed Hoovervilles (after president Hoover, who was blamed for the Depression) outside every major city.

To counter these problems, Franklin Roosevelt took several actions: From his first day in office (March 4 1932), he set to the task of tackling the banking crisis. He ordered all bank to close until government officials had checked them over. This was to make sure only secure banks would be open. After a few days (March 9 1932), 5000 trustworthy banks opened up again, and they were additionally supported by government money should it become necessary. Meanwhile, Roosevelt had his advisers come up with a set of regulations and rules to prevent the reckless speculation which had led to the Wall Street Crash. These rules and regulations resulted in the Emergency Banking Act, and also the Security Exchange Commission. These gave the Americans a bit of a taste of what the New Deal was going to be like, and one of Roosevelt’s adviser’s said ‘During the while Hundred Days Congress, people didn’t know what was going on, but they knew something was happening , something good for them.’ In these Hundred Days, Congress adopted all 15 proposals that Roosevelt sent. He added something new to American politics by broadcasting on the radio to the nation every Sunday to explain what he was doing and why. About 60 million Americans tuned in to these ‘fireside chats’ as Franklin liked to call them. The Federal Emergency Relief Administration was given the task of meeting the urgent needs of the poor. A sum of 500 million dollars was spent on soup kitchens, blankets, employment schemes and nursery schools. The Civilian Conservation Corps was aimed at young men who were unemployed in particular. The Corps mostly did environmental projects in national parks. They could sign on for six months, and if they failed to find work at the end of their contract they could renew it. Around two and a half million men were helped by this scheme, and the money generally went back to their families. The Agricultural Adjustment Administration took a longer term view of the problems facing...
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