ranklin Delano Roosevelt was born on January 1882.

The New Deal Report

EC301 Macroeconomics
Dominique Jordan

Prepared By
Dans Vahrovs VADA220792
Grigory Shmavts SHGR170492
Ryan Trinh TRTH180690
Zhenru Lin 24971
5

Introduction
As a result of the Great Depression, until 1932, 13 millions people had been out of work, their livings depended on private charities while the president Herbert Hoover advocated ‘laisez-fair’ policy, which means people should self-help without any support from the government. And he also declared that nobody was starving. This situation made people hopeless and lose confidence, it seemed like urgent for somebody in the government to make some changes.

Here comes the most important character, Franklin Delano Roosevelt. He was born in January 1882, as the 32nd president of USA, he is a very powerful leader of democracy party. He is the man who made a huge influence and improvement impact on the economy as well as human life conditions of the United States. And what made him famous was his great economic improvement plan called “The New Deal”.

His administration cabinet includes Frances Perkins, who was a brilliant assistant of Mr. Roosevelt. She worked as a secretary of labor department and she was famous for promoting workers’ compensation. What’s more, the wife of Mr. Roosevelt also had a huge impact on him, she brought him back to politics after a serious health incident which had made him disabled, and that’s from where the new deal started.

Main body
To achieve the goal of ‘Relief, Recovery, Reform’, in the first 100 days of the new deal, the congress had passed 15 new laws to defend emergency, which are known as alphabetic laws, and as followed will be a list of some actions.
1. FDIC(federal insurance corporation)
2. FERA (federal emergency relief administration)
3. CWA(civil work administration)
4. CCC(civil conservation corps)
5. NIRA (National Industrial Act)
6. PWA(Public Work Association)
7. SEC(Security and Exchange Commissions
8. HOLC(Home Owners Loan Corporation)
9. AAA(Agriculture Adjustment Administration)
10. TVA(Tennessee Valley Authority)
11. WPA(Works Progress Administration
12. FSA(Farm Security Administration )
13. Fair Labor Standards Act of 1938
14. Social Security Act.
15. The Indian Reorganization Act of 1934
16. National Labor Relations Actions

1. FDIC Federal deposit Insurance Corporation.

When Roosevelt became a president , the first thing that he did was shut down all the banks in USA for 4 days, also it called bank holiday. At the same time the congress made a new act, which gave a legal right to inspect banks for their state. Furthermore Federal insurance corporation was created by the Congress to offer insurance for deposits up to 5000$.
These act attracted attention of American people and restore their trust in banks. Only two-thirds of the banks were allowed to continue their operations. Afterwards deposits exceeded withdrawals.

2. FERA Federal Emergency Relief Administration.

This program provided 500 millions for relief operating states and cities. The head of this program was Harry Hopkins and he believed that charity is not the way out, on the other hand it means that man should work for money.
It revived many flailing relief programs.

3. CWA Civil Works Administration.

It is public work program, which provided unemployed people with jobs in constructions of new buildings, roads, parks, airports and other infrastructure.
This Initiative provided 4millions working places.

4. CCC Civilian Conservation Corps.

In some parts of America, as a result of heavy rains brought flood to wash away soil, farmers’ livelihood has been destroyed. This program aims to plant billions of trees to prevent soil from being washed away, and at the same time, it also saved 2.5 million young men from unemployment, and from 1934 to 1937, it created similar programs for 8500 women. This way, American men and women learnt how to live by their own, which surely increased their self-esteem as well.

5. National Industrial Recovery Act (NIRA) June 1933

In 1930’s the price for industrial goods had a large decline. Causing businesses to close. The Objective of one of the most popular acts called NIRA, was to increase the prices for industrial goods to make it possible to run industrial business again. Setting a minimum wage was one of the first steps. During NIRA trade associations ware allowed to regulate wages, working conditions, production and prices.
The falling prices ware stopped, but not for long. After a while, higher wages started to increase the price too much. Consumer demand decreased as well. This caused over production together with under consumption.
In the end the act was considered unconstitutional.

6. Public Works Association PWA

Started a new project, the construction of the Grand Coulee Dam on the Columbian River.
Jobs provided for the unemployed.

7. Securities and Exchange Commission.

After the act took place, all the information regarding stock sales had to be uncovered. The SEC controlled the stock market. Federal Reserve Board was allowed to control the stock purchase on margin.

8. Home Owners Loan Corporation HOLC

HOLC functioned by helping with the mortgages of middle class owners.
The aim was to help people avoid living on the street.

9. Agriculture Adjustment Administration AAA

The AAA had an aim of increasing the price for farmer products that were dramatically falling down. The administration would pay farmers for limiting the growth of certain crops and limiting the population of their life stock.
These drastic measures ware considered bad, because of many starving Americans. Later the act was considered unconstitutional.

10. Tennessee Valley Authority TVA

It aims to build dams to control flooding and at the same time to create cheap electricity, which also provided jobs in the least modernized areas in America. 11. Work Progress Administration WPA

Provided 8 millions job positions in construction and repaired schools, hospitals and airfields.
Slightly reduce unemployment.

12. Farm Security Administration FSA

More than 1 billion dollars were loaned to farmers as well as set up camps for migrant workers.

13. Fair Labor Standards Actions of 1938

Prohibited child labor and detailed a minimum wage. It opened a new advanced era by social reformers.

14. Social Security Actions

This established a system to offer pensions for old-age workers, victims get benefits from industrial accidents, unemployment insurance, help for single mothers with children and the handicapped people.
Even though this policy didn’t cover farm and domestic workers, it helped numbers of Americans build the feeling of secure.

15. The Indian Reorganization Act of 1934

After this act the sales of tribal lands have stopped, also the ownership of the lands not belonging to any one ware given to Native American groups.
Native Americans greatly benefited from this act.

16. National Labor Relations Actions

Practices allowed only unevenly in the past were legalized, like shuttled-down shops where only union members are able to work as well as collective bargain. It also regulated the National Labor Relations Board(NLRB) to conduct its regulations.
(FDR Heritage, 2007)

Conclusion
It started with regaining trust in banks and by regulating the stock market it stopped stock abuse. The whole program brought more economic activity to the nation. It brought up numbers of public projects like to build dams, roads, houses, schools, hospitals and public buildings. Increasing the available jobs for the unemployed. It created the most popular security system of the century and in the first time of peacetime history, the federal government managed the economy.

However, the new deal failed to achieve its mail goal—to end the Depression. The unemployment rate never got below 16% and until 1939, it’s still 19%. Up to 1943, it finally reached its pre-Depression levels. Some people complained that Roosevelt had doubled the national debt in two short terms which some of them has been lost by waste. On the other hand, some people were unhappy that the gap between rich and poor were dented in the end. Regardless of these shortcomings brought up during the years, the new deal did help America survive from the dark impact of the Depression, it saved millions of people’s life and finally in benefits of offering American weapons for European wars, the happy time before the Depression came back.

Reference

FDR Heritage, 2007, [Internet], available from: http://www.fdrheritage.org/new_deal.htm.
[accessed 24 september 2013].