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History Grade 11 - Topic 2 Essay Questions

Essay Question:

To what extent did Roosevelt’s New Deal succeed in mitigating the negative effects of the Great Depression in USA in the 1930’s?  Present an argument in support of your answer using relevant historical evidence. [1]

Introduction:

On 29 October 1929 (also known as “Black Tuesday”), the United States (US) stock market crashed which initiated the Great Depression. [2]   After winning the US elections and taking office in 1933, President Franklin D. Roosevelt sought to bring economic relief to the US during the 1930’s by implementing a series of reforms and restructures in what he called the ‘New Deal’. [3]   Although the ‘New Deal’ succeeded somewhat in relieving economic situations on a macro-level, the “New Deal”, in the long run, is considered a failure as it did not ultimately succeed in what it was set out to do, which was to recover the economy from its “depressed state”. [4]   This statement will be discussed by analyzing the two phases of the “New Deal”, as well as discussing the effects of some of the relief, recovery and reform programs implemented.

The First Hundred Days

When analyzing the legacy of the “New Deal”, it is important to understand that there were two phases of the deal, namely the “First New Deal” and the “Second New Deal”.  The First New Deal consisted mainly of the first three months of Roosevelt’s presidency and is referred to as the “hundred days”. [5]   Within the first hundred days, various relief programs such as the “Federal Emergency Relief Administration” (FRA), the “Civilian Conservation Corps” and the “Agricultural Adjustment Act” were implemented in order to create employment opportunities for Americans as well as providing some extent of economic relief for struggling citizens. [6]

Another significant program that was implemented during the hundred days, was the “National Industrial Recovery Act” (NIRA).  This recovery act allowed working Americans to unionize and in a sense bargain for better working conditions, as well as wages. [7]   Roosevelt felt that a significant part of the recovery process will come from decreasing competition through using set prices, wages and commodities. [8]   Mixed reviews came from the implementation of these recovery acts, as many felt that corporate heads were being disadvantaged by the state, and in some instance some corporations felt as though their competition became the US government itself. [9]   However, on the larger part, many felt that the hundred days and the “First New Deal” was relatively successful as it was marked by a decrease in unemployment and the stabilization of US banks.

The Second New Deal

In 1935, Roosevelt decided that the New Deal should take a more aggressive approach in the attempt to diminish the Great Depression. [10]   This phase is known as the Second New Deal.  One of the more prominent acts implemented was the “Social Security” Act which provided the elderly and widowed people with some financial support, allowed some unemployment and disability compensation and set a framework or minimum wages and maximum work hours. [11]   Furthermore, the “Works Progress Administration” (WPA) was implemented to provide the unemployed with opportunities in the public sector.  These opportunities included building bridges, schools and roads. [12]   To some extent, the Great Deal built a platform for more financial security and opportunity for the American citizens during the onslaught of the Great Depression with its housing, employment and financial interventions. [13]

Criticism of the New Deal

When analyzing some of the programs and acts implemented by the Great Deal, one also has to mention points of criticism.  One of the more popular points of criticism stems from the “interventionalist” and anti-competitive nature of the New Deal. [14]   Larger companies and the Supreme Court also felt that some of the reform initiatives were unconstitutional and did not go through the right channels to implement reform acts. [15]   However, with this criticism in mind, the main reason why the New Deal was deemed unsuccessful, is simply because it did not achieve what it set out to do.  The American economy and employment rates did not recover enough for the New Deal to have remedied the effects of the Great Depression.  Rather, American entrance into the Second World War stimulated more economic growth than the New Deal. [16]

Therefore, one could say that the New Deal mitigated the effects of the Great Depression to an extent where it improved the employment rate from 25% of 1933 to 17% in 1939. [17]   One could also say that some of the relief and reform acts were deemed successful as some of them, such as the Social Security Act, still remains today. [18]   The New Deal also led to a, albeit short-lived, coalition between “white working people, African Americans and left-wing intellectuals”. [19]   Many also argue that the New Deal built a surface for the future economy of America post-World War Two. [20]   However, with regards to the mitigation of the Great Depression itself, the New Deal ultimately did not succeed in ending the Great Depression and its effects.

This content was originally produced for the SAHO classroom by Sebastian Moronell, Ayabulela Ntwakumba, Simone van der Colff & Thandile Xesi.

[1] National Senior Certificate.: “Grade 11 November 2017 History Paper 1 Exam,” National Senior Certificate, November 2017.

[2] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[3] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[4] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[5] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[6] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[7] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[8] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[9] J. Green.: “The New Deal:  crash Course US History #34,” Crash Course [YouTube Online].  Accessed on 23 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=380s ).

[10] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[11] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[12] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[13] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, pp. 265-267.

[14] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[15] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[16] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[17] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[18] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[19] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[20] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, p. 267.

• Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online], January 2021.  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).
• Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ). 
• Green, J.: “The New Deal:  Crash Course US History #34,” Crash Course [online].  Accessed on 24 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=391s ).
• History.  Editors of History.: “New Deal,” History [online], November 2021.  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).
• Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online], January 2021.  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).
• Kennedy, D.M.: “What the New Deal Did,” Political Science Quarterly, (124),(2), 2009, pp. 251-268.

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By: History.com Editors

Updated: March 28, 2023 | Original: October 29, 2009

The New Deal was a series of programs and projects instituted during the Great Depression by President Franklin D. Roosevelt that aimed to restore prosperity to Americans. When Roosevelt took office in 1933, he acted swiftly to stabilize the economy and provide jobs and relief to those who were suffering. Over the next eight years, the government instituted a series of experimental New Deal projects and programs, such as the CCC , the WPA , the TVA, the SEC and others. Roosevelt’s New Deal fundamentally and permanently changed the U.S. federal government by expanding its size and scope—especially its role in the economy.

New Deal for the American People

On March 4, 1933, during the bleakest days of the Great Depression , newly elected President Franklin D. Roosevelt delivered his first inaugural address before 100,000 people on Washington’s Capitol Plaza.

“First of all,” he said, “let me assert my firm belief that the only thing we have to fear is fear itself.”

He promised that he would act swiftly to face the “dark realities of the moment” and assured Americans that he would “wage a war against the emergency” just as though “we were in fact invaded by a foreign foe.” His speech gave many people confidence that they’d elected a man who was not afraid to take bold steps to solve the nation’s problems.

Did you know? Unemployment levels in some cities reached staggering levels during the Great Depression: By 1933, Toledo, Ohio's had reached 80 percent, and nearly 90 percent of Lowell, Massachusetts, was unemployed.

The next day, Roosevelt declared a four-day bank holiday to stop people from withdrawing their money from shaky banks. On March 9, Congress passed Roosevelt’s Emergency Banking Act, which reorganized the banks and closed the ones that were insolvent.

In his first “ fireside chat ” three days later, the president urged Americans to put their savings back in the banks, and by the end of the month almost three quarters of them had reopened.

The First Hundred Days

Roosevelt’s quest to end the Great Depression was just beginning, and would ramp up in what came to be known as “ The First 100 Days .” Roosevelt kicked things off by asking Congress to take the first step toward ending Prohibition —one of the more divisive issues of the 1920s—by making it legal once again for Americans to buy beer. (At the end of the year, Congress ratified the 21st Amendment and ended Prohibition for good.)

In May, he signed the Tennessee Valley Authority Act into law, creating the TVA and enabling the federal government to build dams along the Tennessee River that controlled flooding and generated inexpensive hydroelectric power for the people in the region.

That same month, Congress passed a bill that paid commodity farmers (farmers who produced things like wheat, dairy products, tobacco and corn) to leave their fields fallow in order to end agricultural surpluses and boost prices.

June’s National Industrial Recovery Act guaranteed that workers would have the right to unionize and bargain collectively for higher wages and better working conditions; it also suspended some antitrust laws and established a federally funded Public Works Administration.

In addition to the Agricultural Adjustment Act, the Tennessee Valley Authority Act and the National Industrial Recovery Act, Roosevelt had won passage of 12 other major laws, including the Glass-Steagall Act (an important banking bill) and the Home Owners’ Loan Act, in his first 100 days in office.

Almost every American found something to be pleased about and something to complain about in this motley collection of bills, but it was clear to all that FDR was taking the “direct, vigorous” action that he’d promised in his inaugural address.

Second New Deal

Despite the best efforts of President Roosevelt and his cabinet, however, the Great Depression continued. Unemployment persisted, the economy remained unstable, farmers continued to struggle in the Dust Bowl and people grew angrier and more desperate.

So, in the spring of 1935, Roosevelt launched a second, more aggressive series of federal programs, sometimes called the Second New Deal.

In April, he created the Works Progress Administration (WPA) to provide jobs for unemployed people. WPA projects weren’t allowed to compete with private industry, so they focused on building things like post offices, bridges, schools, highways and parks. The WPA also gave work to artists, writers, theater directors and musicians.

In July 1935, the National Labor Relations Act , also known as the Wagner Act, created the National Labor Relations Board to supervise union elections and prevent businesses from treating their workers unfairly. In August, FDR signed the Social Security Act of 1935, which guaranteed pensions to millions of Americans, set up a system of unemployment insurance and stipulated that the federal government would help care for dependent children and the disabled.

In 1936, while campaigning for a second term, FDR told a roaring crowd at Madison Square Garden that “The forces of ‘organized money’ are unanimous in their hate for me—and I welcome their hatred.”

He went on: “I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match, [and] I should like to have it said of my second Administration that in it these forces have met their master.”

This FDR had come a long way from his earlier repudiation of class-based politics and was promising a much more aggressive fight against the people who were profiting from the Depression-era troubles of ordinary Americans. He won the election by a landslide.

Still, the Great Depression dragged on. Workers grew more militant: In December 1936, for example, the United Auto Workers strike at a GM plant in Flint, Michigan lasted for 44 days and spread to some 150,000 autoworkers in 35 cities.

By 1937, to the dismay of most corporate leaders, some 8 million workers had joined unions and were loudly demanding their rights.

The End of the New Deal?

Meanwhile, the New Deal itself confronted one political setback after another. Arguing that they represented an unconstitutional extension of federal authority, the conservative majority on the Supreme Court had already invalidated reform initiatives like the National Recovery Administration and the Agricultural Adjustment Administration.

In order to protect his programs from further meddling, in 1937 President Roosevelt announced a plan to add enough liberal justices to the Court to neutralize the “obstructionist” conservatives.

This “ Court-packing ” turned out to be unnecessary—soon after they caught wind of the plan, the conservative justices started voting to uphold New Deal projects—but the episode did a good deal of public-relations damage to the administration and gave ammunition to many of the president’s Congressional opponents.

That same year, the economy slipped back into a recession when the government reduced its stimulus spending. Despite this seeming vindication of New Deal policies, increasing anti-Roosevelt sentiment made it difficult for him to enact any new programs.

On December 7, 1941, the Japanese bombed Pearl Harbor and the United States entered World War II . The war effort stimulated American industry and, as a result, effectively ended the Great Depression .

The New Deal and American Politics

From 1933 until 1941, President Roosevelt’s New Deal programs and policies did more than just adjust interest rates, tinker with farm subsidies and create short-term make-work programs.

They created a brand-new, if tenuous, political coalition that included white working people, African Americans and left-wing intellectuals. More women entered the workforce as Roosevelt expanded the number of secretarial roles in government. These groups rarely shared the same interests—at least, they rarely thought they did— but they did share a powerful belief that an interventionist government was good for their families, the economy and the nation.

Their coalition has splintered over time, but many of the New Deal programs that bound them together—Social Security, unemployment insurance and federal agricultural subsidies, for instance—are still with us today.

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The New Deal — A Guide to FDR’s Plan for Relief, Recovery, and Reform

The New Deal was a series of programs and policies implemented in the 1930s by President Franklin Delano Roosevelt in response to severe economic and social issues in the United States.

President Franklin D. Roosevelt in 1944. Image Source: FDR Presidential Library & Museum on Flickr .

New Deal Summary

The New Deal was a series of programs and policies implemented in the 1930s by President Franklin Delano Roosevelt — commonly referred to as FDR — in response to severe economic and social issues in the United States. Each New Deal program and policy fell into one or more of three areas, known as the “Three Rs” — Relief, Recovery, and Reform.

At the end of the Roaring Twenties, the 1929 Stock Market Crash triggered the Great Depression started when the stock market crashed in 1929. Starting in 1931, the southwestern Great Plains suffered from a severe drought, which led to massive dust storms. The area was called “The Dust Bowl” and thousands of people were forced to abandon their homes and move west. In the wake of these events, Roosevelt ran for President in 1932, promising a “New Deal” for Americans, and defeated incumbent Herbert Hoover.

Roosevelt was inaugurated on March 4, 1933. In his First Inaugural Address, he delivered the famous line, “The only thing we have to fear is fear itself.” FDR moved quickly to ease the effects of the Depression on Americans by passing New Deal legislation during “The First Hundred Days” of his Presidency.

FDR started by restoring faith in banks, which had suffered due to the stock market crash of 1929. A Bank Holiday was declared and Congress followed by passing the Emergency Banking Relief Act, which allowed the government to inspect the financial health of banks before allowing them to reopen.

The New Deal aimed to tackle unemployment by creating programs that provided job opportunities. The Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC) employed millions of Americans to work on infrastructure projects, such as building roads, bridges, and schools. Other programs, like the Tennessee Valley Authority (TVA), developed hydroelectric power plants to bring electricity to communities where none existed.

The New Deal also addressed labor relations by passing the National Labor Relations Act — also known as the (Wagner Act). It protected the rights of workers, allowing them to join unions and engage in collective bargaining. The act also established the Fair Labor Standards Act, which set a minimum wage for workers.

The New Deal programs and policies created a significant expansion of the Federal government. They also redefined the government’s role in dealing with economic and social issues. The New Deal was controversial when it was implemented, and its legacy continues to be debated by historians, economists, and others. However, the significance of the New Deal and its impact on the United States during the era leading up to World War II cannot be denied.

What did the New Deal do?

This video from the Daily Bellringer provides an overview of the New Deal and its programs. It also touches on the controversy caused by the New Deal which was caused by the expansion of the Federal Government.

New Deal Facts

• The name “New Deal” came from Franklin D. Roosevelt’s 1932 acceptance speech for the Democratic Party’s presidential nomination. In the speech, he said, “I pledge you, I pledge myself, to a new deal for the American people.”
• The New Deal was designed to deal with the economic and social issues created by the 1929 Stock Market Crash, the Great Depression, and the Dust Bow.
• On March 4, 1933, Franklin D. Roosevelt was elected President. He gave a speech on Capitol Plaza in Washington DC to 100,000 people. He said the “only thing we should be afraid of is fear itself.”
• He took action right away by calling Congress into a special session known as “The Hundred Days,” during which legislation was passed to deal with the Depression and provide economic aid to struggling Americans.
• In an effort to restore the public’s confidence in banks, FDR declared a Bank Holiday and Congress passed the Emergency Banking Relief Act.
• The New Deal dealt with unemployment by creating programs like the Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC), providing jobs for millions of Americans and improving the nation’s infrastructure.
• The New Deal was followed by the Second New Deal, which included the National Labor Relations Act, the  Works Progress Administration, and the Social Security Act.
• The New Deal also included labor-related legislation, such as the National Labor Relations Act (Wagner Act) and the Fair Labor Standards Act, which gave workers the right to join unions, negotiate collectively, and established a minimum wage.
• The New Deal paved the way for the repeal of the 18th Amendment, which established Prohibition. The Beer-Wine Revenue Act of 1933 amended the Volstead Act by raising the amount of alcohol allowed to 3.2 percent and also levied a tax.
• Social programs established by the New Deal are still in effect today, including Social Security and the “Food Stamp Plan.”

New Deal AP US History (APUSH) Terms, Definitions, and FAQs

This section provides terms, definitions, and Frequently Asked Questions about the New Deal and the Second New Deal, including people, events, and programs. Also, be sure to look at our Guide to the AP US History Exam .

The New Deal was a series of policies and programs implemented by President Franklin D. Roosevelt during the 1930s in response to the Great Depression. The New Deal aimed to provide relief to the unemployed and poor, promote economic recovery, and reform the financial system. The New Deal included programs such as the Civilian Conservation Corps (CCC), the Federal Emergency Relief Administration (FERA), and the National Recovery Administration (NRA). It also created numerous agencies and programs such as the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Social Security Administration.

The second phase of the New Deal, which was enacted in 1935. The Second New Deal focused on providing economic security to Americans through the creation of Social Security and other welfare programs. It also included measures to stimulate the economy, such as the Works Progress Administration (WPA) and the National Labor Relations Act (NLRA). The Second New Deal was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

FDR’s Alphabet Soup refers to the numerous programs and agencies created during Franklin D. Roosevelt’s presidency as part of the New Deal. These initiatives, often known by their acronyms, aimed to provide relief, recovery, and reform during the Great Depression. Examples include the CCC (Civilian Conservation Corps), the TVA (Tennessee Valley Authority), and the WPA (Works Progress Administration).

The New Deal was a series of economic programs and reforms enacted by President Franklin D. Roosevelt during the Great Depression. The New Deal sought to provide relief, recovery, and reform to the American economy. It included programs such as Social Security, the National Labor Relations Act (NLRA), and the Fair Labor Standards Act (FLSA). These programs were instrumental in helping to protect workers’ rights and providing employment opportunities during the Great Depression. However, the New Deal was controversial, with some arguing it was a “raw deal” for workers and others arguing that it helped to alleviate the suffering of millions of Americans.

The three Rs of the New Deal were 1) Relief for the needy, 2) Recovery of the economy, and 3) Reform of the financial system. Each of the New Deal Programs generally fell into one of these areas. The goal of the three Rs was to keep the United States from falling into another Economic Depression.

New Deal People and Groups

Herbert Hoover — Herbert Hoover served as the 31st President of the United States from 1929 to 1933. He faced the immense challenges of the Great Depression and was criticized for his belief in limited government intervention. Despite his efforts to address the crisis, Hoover’s presidency is often associated with economic hardships and the initial response to the Depression.

John L. Lewis — An American labor leader who was instrumental in the formation of the Congress of Industrial Organizations (CIO) in 1935. He was a key figure in the Second New Deal and helped to pass the National Labor Relations Act (NLRA). He was also responsible for leading several major strikes during the Great Depression, including the United Mine Workers strike of 1934. Lewis worked to protect workers’ rights and provide employment opportunities during the Great Depression.

Franklin D. Roosevelt — Franklin D. Roosevelt was the 32nd President of the United States, serving from 1933 to 1945. He was elected to the presidency during the Great Depression, and his presidency is closely associated with the New Deal, a series of policies and programs aimed at addressing the economic crisis and promoting economic recovery. He was re-elected for an unprecedented four terms and his leadership during the Great Depression and World War II solidified the role of the Federal government in the American economy and society.

Eleanor Roosevelt — The wife of Franklin D. Roosevelt and one of the most influential First Ladies in American history. She was an advocate for civil rights and women’s rights, and she used her position to promote social reform.

FDR’s Brain Trust — A group of advisors to President Franklin D. Roosevelt who helped him develop the New Deal. They included prominent academics and intellectuals such as Raymond Moley, Rexford Tugwell, and Adolf Berle.

New Deal Democrats —  New Deal Democrats were a faction within the Democratic Party during the 1930s and 1940s that supported Franklin D. Roosevelt’s New Deal policies. These Democrats supported increasing government intervention in the economy and expanding social welfare programs.

United Mine Workers — A labor union that was formed in 1890. The union was instrumental in the formation of the Congress of Industrial Organizations (CIO) in 1935 and led several major strikes during the Great Depression, including the United Mine Workers strike of 1934.

Hundred Days Congress — The Hundred Days Congress was a special session of the United States Congress that ran from March 9 to June 16, 1933. It was called in response to the economic crisis of the Great Depression and was used to pass a number of laws known as the New Deal. During this period, President Franklin D. Roosevelt proposed a series of sweeping reforms designed to provide relief for those affected by the depression, as well as to stimulate the economy. The Hundred Days Congress passed a number of laws, including the Emergency Banking Relief Act, the Glass-Steagall Act, and the National Industrial Recovery Act.

New Deal Events

1932 Presidential Election — The 1932 Presidential Election marked a pivotal moment in American history as the nation grappled with the Great Depression. It was primarily a contest between Republican incumbent Herbert Hoover and Democratic candidate Franklin D. Roosevelt (FDR). FDR emerged victorious, promising a “New Deal” to combat the Depression and implementing a series of reforms that fundamentally reshaped the role of the federal government.

Bank Holiday — A bank holiday is a period of time during which banks are closed, usually by government order. In 1933, President Franklin D. Roosevelt declared a national bank holiday in order to address the banking crisis caused by the Great Depression. During the holiday, which lasted four days, the government examined the books of all banks and only those that were found to be sound were allowed to reopen. This action helped stabilize the banking system and restore public confidence in banks.

Fireside Chats — The Fireside Chats were a series of radio addresses given by President Franklin D. Roosevelt during his presidency. The chats were designed to provide the American people with information about the government’s policies and actions and to explain the reasoning behind them in plain language. The chats were informal and conversational in tone, and they were delivered from the White House, often in the evening, giving the impression that Roosevelt was speaking directly to the American people from the warmth and comfort of their own homes. The Fireside Chats were a powerful tool for Roosevelt to communicate with the American people, build public support for his policies and maintain public confidence during a time of economic crisis.

Great Depression — The Great Depression refers to the severe economic downturn that occurred in the United States and other countries during the 1930s. It was characterized by widespread unemployment, poverty, and a sharp decline in industrial production and trade—ultimately leading to a fundamental restructuring of the American economy and significant social and political changes.

Roosevelt Recession — A period of economic contraction that occurred during the Great Depression, starting in 1937 and lasting until 1938. It was caused by a combination of factors, including President Franklin D. Roosevelt’s decision to reduce government spending, an increase in taxes, and the Federal Reserve’s decision to raise interest rates. This resulted in a decrease in consumer spending and investment, leading to a decrease in economic activity. The Roosevelt Recession was a major setback for the New Deal and led to increased unemployment and poverty.

United Mine Workers Strike of 1934 — A major strike led by the United Mine Workers Union during the Great Depression. The strike was in response to wage cuts and other grievances. It lasted for several months and resulted in a victory for the miners, who were able to secure higher wages and better working conditions.

New Deal Programs

Agricultural Adjustment Act (1933) — A law passed by Congress in 1933 as part of the New Deal. The AAA was designed to help farmers by providing subsidies for reducing crop production and encouraging soil conservation. It also established the Agricultural Adjustment Administration (AAA), which was responsible for implementing the provisions of the act. The AAA was instrumental in helping to stabilize agricultural prices and providing economic relief to farmers during the Great Depression.

Civilian Conservation Corps (CCC) — The CCC provided employment for young men between the ages of 18 and 25, who were paid to work on conservation projects such as planting trees, building roads, and constructing dams. The CCC also provided educational opportunities for its workers, including classes in literacy, math, and vocational skills. The CCC was instrumental in helping to restore the environment and providing employment opportunities during the Great Depression.

Civil Works Administration (CWA) — An agency created by the Federal Emergency Relief Act of 1933 as part of the New Deal. The CWA was responsible for providing jobs to millions of Americans during the Great Depression. It provided employment in construction, repair, and maintenance projects such as building roads, bridges, and public buildings. The CWA was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

Emergency Banking Relief Act (1933) — A law passed by Congress in 1933 which allowed the federal government to provide emergency loans to banks in order to stabilize the banking system. The act was part of President Franklin D. Roosevelt’s New Deal and was designed to restore public confidence in the banking system. It provided for the reopening of solvent banks, the reorganization of insolvent banks, and the establishment of a Federal Deposit Insurance Corporation (FDIC) to insure deposits up to $2,500. The act was instrumental in helping to stabilize the banking system during the Great Depression and restoring public confidence in banks.

Federal Deposit Insurance Corporation (FDIC) — An independent agency of the United States government created in 1933 as part of the New Deal. The FDIC provides insurance for deposits up to a certain amount in member banks, protecting depositors from losses due to bank failures. The FDIC also regulates and supervises financial institutions to ensure that they are operating safely and soundly. It is one of the most important financial regulatory agencies in the United States and has helped to restore public confidence in the banking system.

Federal Emergency Relief Act (1933) — A law passed by Congress in 1933 as part of the New Deal. The FERA provided federal funds to states and local governments to create relief programs for the unemployed. It also established the Civil Works Administration (CWA), which was responsible for providing jobs to millions of Americans during the Great Depression. The FERA was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

Federal Housing Administration (FHA) — An agency created by the National Housing Act of 1934 as part of the New Deal. The FHA was responsible for providing mortgage insurance to lenders, which allowed them to make home loans with lower down payments and easier credit requirements. This helped to increase homeownership and provided jobs to thousands of Americans during the Great Depression. The FHA helped stabilize the housing market and provide employment opportunities during the Great Depression.

Glass-Steagall Act (1933) — The Glass-Steagall Act was a law passed by Congress in 1933 as part of the New Deal. It was designed to separate commercial and investment banking, and it prohibited banks from engaging in certain types of speculative investments. The act also established the Federal Deposit Insurance Corporation (FDIC), which provided insurance for bank deposits up to a certain amount. The Glass-Steagall Act helped restore public confidence in the banking system and prevent another financial crisis.

National Industrial Recovery Act (1933) —  The National Industrial Recovery Act (NIRA) was a law passed by Congress in 1933 as part of the New Deal. It was designed to stimulate economic growth by providing government assistance to businesses, setting minimum wages and maximum hours for workers, and establishing codes of fair competition. The NIRA also established the National Recovery Administration (NRA), which was responsible for enforcing the provisions of the act. The NIRA was eventually declared unconstitutional by the Supreme Court in 1935.

The Public Works Administration (PWA) — An agency created by the National Recovery Administration of 1933 as part of the New Deal. The PWA was responsible for providing jobs to millions of Americans during the Great Depression. It provided employment in construction, repair, and maintenance projects such as building roads, bridges, and public buildings. The PWA played an important role in helping to alleviate poverty and providing employment opportunities during the Great Depression.

The Tennessee Valley Authority (TVA) — An agency created by the Tennessee Valley Authority Act of 1933 as part of the New Deal. The TVA was responsible for developing the infrastructure and resources of the Tennessee Valley region, including hydroelectric power, flood control, navigation, reforestation, and soil conservation. It also provided jobs to thousands of Americans during the Great Depression. The TVA played an important role in helping modernize the region and providing employment opportunities during the Great Depression.

Second New Deal Programs

Committee for Industrial Organizations (CIO) — An organization formed in 1935 as part of the Second New Deal. The CIO was responsible for organizing workers into unions and bargaining collectively with employers.

Fair Labor Standards Act (1938) — An act passed in 1938 as part of the Second New Deal. The Fair Labor Standards Act was responsible for establishing a minimum wage, overtime pay, and other labor standards.

National Labor Relations Act (1935) — An act passed in 1935 as part of the Second New Deal. The NLRA was responsible for protecting the rights of workers to organize and bargain collectively with their employers. It also established the National Labor Relations Board (NLRB), which was responsible for enforcing the provisions of the act.

Social Security Act (1935) — An act passed as part of the Second New Deal. The Social Security Act was responsible for providing economic security to Americans through the establishment of a federal retirement program and other welfare programs. It also provided unemployment insurance and disability benefits.

Wagner Act — Also known as the National Labor Relations Act (NLRA), it was passed in 1935 as part of the Second New Deal. The Wagner Act was responsible for protecting the rights of workers to organize and bargain collectively with their employers. It also established the National Labor Relations Board (NLRB), which was responsible for enforcing the provisions of the act.

Works Progress Administration (WPA) — An agency created by the Emergency Relief Appropriation Act of 1935 as part of the Second New Deal. The WPA was responsible for providing jobs to millions of Americans during the Great Depression. It funded a variety of projects, including construction, infrastructure development, and arts and culture programs. The WPA was instrumental in helping to stimulate the economy and providing employment opportunities during the Great Depression.

More New Deal Terms and Definitions

21st Amendment — The amendment to the U.S. Constitution that repealed the 18th Amendment and ended Prohibition. The 21st Amendment was ratified in 1933 as part of the New Deal and allowed states to regulate the sale and consumption of alcohol within their borders. It also gave states the power to collect taxes on alcohol sales, which provided a much-needed source of revenue during the Great Depression.

Boondoggling — A term coined by President Franklin D. Roosevelt to describe wasteful government spending on public works projects. The term was used to criticize the New Deal programs, which were seen as a form of government waste and corruption. Boondoggling became a popular term during the Great Depression and is still used today to refer to any wasteful or unnecessary government spending.

Tennessee River Valley — The Tennessee River Valley refers to the region in the southeastern United States encompassing parts of Tennessee, Alabama, and Kentucky. It gained prominence during the New Deal era due to the establishment of the Tennessee Valley Authority (TVA), a federal agency tasked with developing the area’s water resources, controlling flooding, and promoting economic development through hydroelectric power generation and irrigation projects.

National Parks — National Parks are protected areas designated by the federal government to preserve and showcase the country’s natural, historical, and cultural heritage. These areas, managed by the National Park Service, offer opportunities for recreation, conservation, and education. Notable examples include Yellowstone, Yosemite, and the Grand Canyon. National Parks serve as significant landmarks and contribute to the nation’s tourism industry and environmental conservation efforts.

Why is the New Deal important?

The New Deal is important to United States history for several reasons:

1. Response to the Great Depression: The New Deal was a direct response to the economic crisis of the Great Depression, which was one of the most challenging periods in American history. It represented a major shift in the role of the federal government in addressing economic issues and providing relief to citizens.

2. Economic Recovery and Relief: The New Deal implemented a range of programs and policies aimed at stabilizing the economy, creating jobs, and providing relief to those affected by the Great Depression. It helped alleviate immediate suffering and provided assistance to millions of Americans through employment, financial aid, and social welfare programs.

3. Expansion of Federal Government Power: The New Deal marked a significant expansion of the federal government’s role in regulating the economy and addressing social issues. It introduced new agencies and programs, such as the Works Progress Administration (WPA) and Social Security, that had long-lasting impacts on American society and established a precedent for increased government intervention in the economy.

4. Transformation of American Society: The New Deal’s programs had a transformative effect on American society. It brought about improvements in infrastructure, public works, and conservation projects, enhancing the nation’s physical landscape. It also introduced labor reforms, such as the right to unionize and the establishment of minimum wage standards, which aimed to improve working conditions and workers’ rights.

5. Legacy and Long-Term Impacts: Many of the programs and policies initiated during the New Deal era had lasting impacts on American society. Social Security, for example, continues to provide financial security to elderly and disabled Americans. The New Deal also shaped the political landscape, as the Democratic Party under FDR gained support from various social groups and established a coalition that would dominate American politics for decades.

• Written by Randal Rust

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Course: US history   >   Unit 7

• The presidency of Herbert Hoover
• The Great Depression
• FDR and the Great Depression

The New Deal

• The New Deal was a set of domestic policies enacted under President Franklin D. Roosevelt that dramatically expanded the federal government’s role in the economy in response to the Great Depression.
• Historians commonly speak of a First New Deal (1933-1934), with the “alphabet soup” of relief, recovery, and reform agencies it created, and a Second New Deal (1935-1938) that offered further legislative reforms and created the groundwork for today’s modern social welfare system.
• It was the massive military expenditures of World War II , not the New Deal, that eventually pulled the United States out of the Great Depression.

Origins of the New Deal

• relief (for the unemployed)
• recovery (of the economy through federal spending and job creation), and
• reform (of capitalism, by means of regulatory legislation and the creation of new social welfare programs). 2 ‍  

The First New Deal (1933-1934)

The second new deal (1935-1938), the legacy of the new deal, what do you think.

• Franklin Roosevelt, " Address Accepting the Presidential Nomination at the Democratic National Convention in Chicago ," July 2, 1932. Full text courtesy The American Presidency Project, University of California, Santa Barbara.
• See David M. Kennedy and Lizabeth Cohen, The American Pageant: A History of the American People , 15th ed. (Boston: Wadsworth, 2013), 754-277.
• Eric Foner, Give Me Liberty: An American History (New York: Norton, 2005), 829. Emphasis added.
• On industrial output, see Akira Iriye, American Foreign Policy Relations (1913), 119.
• On Keynes, see Robert Skidelsky, John Maynard Keynes: 1883–1946: Economist, Philosopher, Statesman (New York: MacMillan, 2003.)
• On Roosevelt's court-packing plan, see Burt Solomon, FDR v. The Constitution: The Court-Packing Fight and the Triumph of Democracy (New York: Walker & Co., 2003).
• See David M. Kennedy, Freedom from Fear: The American People in Depression and War (New York: Oxford University Press, 1999), 131-287.

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New deal opposition & fdr’s response, introduction.

The New Deal, introduced by President Franklin D. Roosevelt, stands as one of the most ambitious and transformative policy endeavors in American history. Designed to alleviate the crushing impact of the Great Depression , it represented a seismic shift in the role of the federal government in economic and social life. Despite its sweeping impact and the immediate relief it brought to many, the New Deal was met with staunch opposition from a variety of sectors. This essay sets out to explore the myriad challenges to the New Deal, ranging from political and economic to social and cultural dissent, and examines the strategies Roosevelt employed to navigate and counteract this opposition.

Historical Context of the New Deal

To understand the magnitude of the New Deal, one must first consider the dire circumstances of the 1930s. The Great Depression had left the American economy in ruins, with widespread unemployment, failing banks, and deflated industries. The public, reeling from the economic shockwaves, was desperate for relief and stability. In response, Roosevelt’s New Deal, with its series of programs, projects, and reforms, sought to provide immediate economic relief, recovery, and reform to a beleaguered nation. It was against the backdrop of this unprecedented economic disaster that the New Deal emerged, aiming not only to revive the economy but also to reinvent the social contract between the government and its citizens.

Political Opposition to the New Deal

The New Deal, while innovative and bold, did not pass through the American political landscape without significant resistance. The first wave of opposition came from conservative circles, who viewed the New Deal’s expansive federal programs and regulatory overhauls as a threat to the capitalist system and the American way of life. Proponents of laissez-faire economics contended that Roosevelt’s policies were moving the nation towards socialism, encroaching upon the liberties and freedoms of individuals and businesses alike.

Perhaps the most formidable political challenge arose from the Supreme Court, which, in the early years of the New Deal, struck down several key pieces of legislation. This judicial resistance culminated in Roosevelt’s controversial Judiciary Reorganization Bill of 1937, often dubbed the “court-packing plan,” which aimed to expand the number of Supreme Court justices and thereby change the balance of the Court in favor of the New Deal. The bill faced strong opposition and ultimately failed, but the political showdown led to a shift in the Court that resulted in more favorable rulings for New Deal legislation thereafter.

Opposition also existed within Roosevelt’s own Democratic Party. A coalition of conservative Democrats was deeply worried about the long-term implications of the New Deal, particularly regarding the expansion of federal power and the burgeoning national deficit. To address these intra-party divisions, Roosevelt engaged in a delicate balancing act, sometimes compromising with dissenting Democrats while at other times seeking to replace them with more supportive candidates during elections.

Economic Opposition and Critiques

Alongside the political obstacles, the New Deal also encountered fierce opposition from the economic sphere. Influential business leaders and industry groups organized against what they perceived as Roosevelt’s intrusive policies that, in their view, undermined free enterprise and inhibited economic recovery. The American Liberty League, comprising prominent business figures and conservative Democrats, emerged as a vocal critic, asserting that the New Deal infringed on property rights and personal freedoms.

The Liberty League was adept at rallying support, leveraging media and public relations to sway popular opinion against the New Deal. Their campaign highlighted the potential dangers of excessive government control and the risks of a planned economy. In addition to ideological arguments, they contended that New Deal policies, such as the National Industrial Recovery Act (NIRA) and the Agricultural Adjustment Act (AAA), were ineffective at best and harmful at worst, impeding natural economic recovery by imposing burdensome regulations and taxes.

In response to such economic critiques, Roosevelt initiated the Second New Deal, which included more aggressive reforms such as the Social Security Act and the Works Progress Administration (WPA). These measures aimed to further alleviate poverty and unemployment, while also attempting to quell the concerns of business leaders through regulatory adjustments. The establishment of the Securities and Exchange Commission (SEC) and the passage of the Banking Act of 1935 were part of Roosevelt’s strategy to stabilize financial systems and reassure industry stakeholders that the economy was on a path to recovery under the government’s watchful eye.

Opposition from the Far Left

While the New Deal was criticized for being too interventionist by conservative factions, it faced an entirely different set of critiques from the far left. Socialists, communists, and other left-wing groups argued that the New Deal’s reforms were too tepid and did not go far enough to address the fundamental inequalities and capitalist flaws exposed by the Great Depression . They advocated for more radical changes that would restructure the economic foundations of the nation towards a more egalitarian society.

Among the most charismatic of these left-wing critics was Huey Long, a Senator from Louisiana, who proposed a “Share Our Wealth” program. Long’s plan promised to cap personal fortunes and provide a guaranteed income to all Americans, garnering significant public support. His proposals, echoing broader leftist discontent, pushed Roosevelt to incorporate more progressive policies into the New Deal framework, exemplified by the introduction of the Wealth Tax Act of 1935 that aimed to redistribute wealth more fairly.

Social and Cultural Opposition

The social and cultural fabric of America also presented resistance to the New Deal. Traditionalists and social conservatives feared that the New Deal, by promoting government aid and intervention, was undermining the traditional family structure and self-reliance. The increased role of women and minorities in the workforce and in New Deal programs was viewed by some as a departure from conventional societal roles.

In the American South, opposition took on a racial dimension. Many Southern Democrats, who held significant power in Congress, were supportive of New Deal economics but wary of any changes that might affect the racial status quo. They feared that federal programs that helped African Americans could undermine racial segregation and empower the black population. Consequently, many New Deal programs were administered in a racially discriminatory manner in the South, effectively maintaining the established order while still providing economic relief.

How Roosevelt Handled the Opposition

President Franklin D. Roosevelt faced the multifaceted opposition to his New Deal policies with a combination of political savvy, persuasive communication, and policy adaptation. He utilized the emerging power of the mass media, particularly through his Fireside Chats, to speak directly to the American people, explaining his policies and countering the narratives of his opponents. This direct engagement helped to bolster public support and undermine the credibility of his critics.

Politically, Roosevelt was a master of maneuvering and compromise. He was often willing to adjust his policies to placate certain groups or to ensure the passage of critical legislation. At other times, he took a more combative stance, particularly when campaigning for re-election, by openly challenging the entities that stood against his vision for America. This approach included supporting like-minded candidates to replace oppositional figures within Congress.

Despite these efforts, some opposition remained insurmountable, and Roosevelt was forced to retreat on certain issues. However, by strategically shifting policies and making calculated political moves, he succeeded in implementing the core of his New Deal agenda, fundamentally reshaping the American governmental landscape in the process.

The New Deal was a watershed moment in American history, marking a profound change in the relationship between the government and its citizens. It faced severe opposition from a wide array of political, economic, social, and cultural sources. These challenges were met by President Roosevelt with a mixture of direct communication, political strategy, and policy modification. The opposition to the New Deal ultimately played a crucial role in shaping the final form of Roosevelt’s policies and programs.

The legacy of the New Deal, despite the opposition it encountered, is evident in the modern American state, with its continued commitment to social security, workers’ rights, and economic regulation. Roosevelt’s handling of the opposition offers enduring lessons in political leadership, showing the importance of resilience, adaptability, and direct engagement with the electorate. It underscores how a leader can steer a nation through crisis and transform its political landscape, even in the face of formidable resistance.

• Alter, J. (2006). The Defining Moment: FDR’s Hundred Days and the Triumph of Hope . New York, NY: Simon & Schuster.
• Leuchtenburg, W. E. (1963). Franklin D. Roosevelt and the New Deal, 1932-1940 . New York, NY: Harper & Row.
• Kennedy, D. M. (1999). Freedom From Fear: The American People in Depression and War, 1929-1945 . New York, NY: Oxford University Press.
• Rauchway, E. (2008). The Great Depression and the New Deal: A Very Short Introduction . New York, NY: Oxford University Press.
• Badger, A. (1989). The New Deal: The Depression Years, 1933-1940 . New York, NY: Macmillan.

Class Outline – What was the opposition to the New Deal and how did Roosevelt deal with it?

While the New Deal helped millions of American’s, it was not without challenge. In this lesson we will discuss those challenges and FDR’s reactions.

I. Challenges to the New Deal

A. What were some of the reasons the New Deal was challenged? 1. Created a very powerful president that led Congress, this was a violation of checks and balances. 2. It was a radical departure from Laissez Faire ideals. Created “big government” – bureaucracy . 3. Some acts appeared interfering and at worst unconstitutional. 4. Heavy debt burden – the United States was engaged in deficit spending and this was unhealthy for the economy in the long run.

B. How did the Supreme Court respond to New Deal legislation?

1. Schecter Poultry Corp. Vs The United States (The Sick Chicken Case) a) Schecter Poultry was alleged to have sold unfit chicken to a butcher. Schecter and the butcher are both based in Brooklyn New York. Schecter did no out of state business. Schecter Poultry Co. was charged by the federal government which argued that under the National Industrial Recovery Act Schecter Poultry can be regulated by the federal government which under the NRA set up codes in cooperation with various industries that: (1) set prices ranges. (2) set up minimum wages and maximum hours. (3) abolished child labor (4) recognized the rights of unions to organize

b) Schecter Poultry argued that the NIRA was unconstitutional because the federal government had no right to regulate intrastate trade.

c) The Supreme Court citing Gibbons v Ogden as the precedent reversed the lower courts decision in Schecter and struck down the NIRA as unconstitutional. The Supreme Court thus said reaffirmed the fact that the federal government may not regulate intrastate trade only interstate trade.

d) NIRA replaced with National Labor Relations Act, NLRA, which created the NLRB, set fair work standards and with the Fair Labor Standards Act, passing the first minimum wage per hour, 20 cents, maximum work week, 44 then 40 hours, and banned 16 year olds and younger from factory jobs.

2. United States v Butler

a) Suit is brought in attempt to have the Agricultural Adjustment Act declared unconstitutional. The federal government, which had done little in the 1920s to help farmers, initiated remedial programs with the passage of the Agricultural Adjustment Act of 1933 which provided payments to farmers in return for agreements to curtail their acreage or their production of wheat, cotton, rice, tobacco, corn, hogs, and dairy products. Payments were financed from taxes imposed on processors and these taxes were then sent directly to farmers as reimbursement NOT to grow food. Butler, a processor, refused to pay the tax and the Federal government brought suit against him. In his defense Butler claimed that tax may not be used to transfer wealth directly from one person to another. b) The Supreme Court agreed with Butler and struck down the Agricultural Adjustment Act of 1933. The next year Congress passed the Agricultural Adjustment Act of 1934 which taxed processors and then placed the money into the governments general fund. Then farmers were paid out of the general fund not to grow food. The laws had the same effect, its just that the later version was done legally.

D. How did Roosevelt respond to the Courts attack on the New Deal?

1. Introduced Constitutional Amendment to enlarge the size of the court. This is referred to as his “Court packing” scheme. 2. Congress did not pass the amendment. It is regarded as a dark spot on FDR’s record because it represented an attempt to subvert the process and alter the system of checks and balances.

II. How did Radicals Oppose the New Deal?

A. What about the Communist Party appealed to many Americans during the Depression? 1. Earl Browder and William Foster 2. Preached equal division of wealth, all would be equal. 3. Attracted union leaders, intellectuals, entertainment stars.

B. Why did Sen. Huey Long of Louisiana appeal to many during the Depression?

1. Share Our Wealth crusade. 2. Tax rich, guaranteed $2500 dollar a year income, housing, college education. 3. Long was assassinated while running for nomination to run on the Dem. Line.

C. What was the message of Father Charles Coughlin?

1. Michigan radio priest. 2. Called for a mix of socialist and populist programs. Coughlin often argued in favor of a benevolent dictator to run the government without opposition. He felt unions should be destroyed as they would be a threat to this national power. 3. Later, when ignored by Roosevelt, denounced New Deal as communistic. 4. Coughlin, despite great support from his radio listeners eventually appeared more and more radical as he opposed Roosevelt.

D. What was the message of Francis Townsend?

1. Concocted a pension plan that would appeal to older Americans. Under this plan older Americans would receive a set monthly pension, approximately $200 a month. 2. Those receiving the pension would be forced to spend all or some of the money. 3. Townsend believed that this would help all Americans by helping older Americans to survive and by creating spending to speed up the economy. 4. Townsend eventually joined forces with Father Coughlin and formed the Union Party. The put up a candidate named Earl Lemke. Lemke never gained much support despite Coughlin’s promise of 9 million votes. Lemke, Coughlin and Townsend at that point were considered fringe element right wingers.

E. Why did Norman Thomas oppose Roosevelt.

1. Thomas was the socialist candidate and had run for office several times. 2. He was more committed to world socialism then to eliminating Roosevelt. He was considered a left wing radical.

F. Why didn’t these radical ever gain power?

1. While reactionary leaders took power in Germany, Italy and Japan, America has a stronger history of democracy. These radicals all appeared to be part of the lunatic fringe and were eventually dismissed by the American people. 2. Roosevelt was a strong democratic leader whop inspired confidence and trust.

Home — Essay Samples — History — The New Deal — The Great Depression And The New Deal

The Great Depression and The New Deal

• Categories: American History Great Depression The New Deal

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Words: 1240 |

Published: Feb 8, 2022

Words: 1240 | Pages: 3 | 7 min read

Works Cited

• The American Yawp: A Free and Online, Collaboratively Built American History Textbook. Edited by Joseph Locke and Ben Wright (Stanford: Stanford University Press, 2019). [License: CC BY-SA 4.0]. (accessed 10 November 2019).
• Herbert Hoover. “On the New Deal and Liberty”, Official Report of the Proceedings of the 21st Republican National Convention, 1936, pp. 115-19, 122-24. (accessed 10 November 2019).
• Fireside Chat 6: On Government and Capitalism (September 30, 1934) . Authored by: Franklin D. Roosevelt. Provided by: The American Presidency Project. Located at: http://www.presidency.ucsb.edu/ws/?pid=14759. License: Public Domain: No Known Copyright. (accessed 10 November 2019).

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Roosevelt’s New Deal and the Great Depression Research Paper

Introduction, prerequisites of the new deal implementation, the essence of the new deal, new deal analysis, the new deal in the context of the great depression.

After the inauguration in 1933, Franklin D. Roosevelt urgently took the course for the new deal, that was aimed to overcome the consequences of the Great Depression. It was the series of economic and social programs that were planned for the period 1933 to 1936. The First New Deal, which took place in 1933, included the banking reforms (including the reformation of the Banking Law), the emergency relief programs, work relief plans, agricultural reforms, and industrial reform. The plan also included the refuse from the gold standard.

A “Second New Deal”, that took place in 1935-1936 included labor union maintenance. The necessity to support the society, and expand the Security reasoned the issuing of the Social Security act, the promotion of the programs for farmers, including migrant workers. The New Deal ended with the beginning of World War Two when the other national priorities appeared.

It should be emphasized, that the New Deal provided the essential shift in external and internal politics in the US. The changes also touched upon the price regulation and the control of agricultural production. The New Deal is regarded to be the beginning of the further complex social programs and wider acceptance of trade unions.

The crash of the stock market in 1929 first was regarded as the beginning of the end, as it provided complex problems in the economy of the United States but it is not considered as the only cause of the Great Depression. The stock market crash just made the holes in the superficial prosperity of the United States more obvious. As the causes of the downfall in the economy were complicated, the solution to the multifaceted scenario confronted by the Americans was also complex enough. (Barnanke 2004).

American people sought to search for the reasons and responsible elements for the economic collapse. While one part of the American citizens regarded President Hoover as the major player in economic downfall, others blamed bankers, businesspersons, and brokers- “the three B’s”- as responsible for the collapse. However, a group of people or a single individual cannot be accused of the reasons for the Great Depression. To understand the mechanism of the New Deal by President Roosevelt and its impact on the economy, it is pertinent to highlight the circumstances prevailing at that time as well as the economic conditions of that era.

A major phenomenon existing at that time was the unequal distribution of income. Despite the continuous rise in wages, there was an inequality in income. The incredible accumulation of wealth in the hands of just a few individuals eventually meant that sustained economic prosperity was much reliant upon lavish expenditures and the high investment of the wealthy group. As such, during economic downfall and the market crash resulted in a fall in investment and spending.

On average two banks closed every day during 1923 1929. Still, up to the crash of the stock market in 1929, the country’s inevitable affluence supported and covered the potentially destructive flaws in the banking system of the United States of America. (Barnanke 2004).

The nation was transformed into a creditor nation from a debtor nation as a consequence of World War I. The victorious Allies as well as the defeated Powers, in the outcomes of the war, owed more money to the United States as compared to foreign countries. The Republican government during the 1920s persisted on gold bullion payments but the supply of gold in the world was limited. Moreover, at the end of the 1920s, most of the gold supply in the world was controlled by the United States. However, high tariffs along with protectionism resulted in keeping foreign goods away from U.S.

The unemployment rate increased from 4% to 25% from 1929 – 1933. The manufacturing and production rates were reduced by approximately a third. The falling of the prices caused the deflation of the currency rates that complicated the repayments of debts. The crisis mainly touched the farming, agriculture, and industry, while the white-collar service sectors were not so severely touched.

The New Deal approach essentially increased the involvement of the government in economic affairs. The Depression aggravated during the months before Roosevelt’s inauguration. Farm foreclosures, bank failures, and factory closings increased. Moreover, the level of unemployment soared. As such President, Roosevelt confronted the greatest economic crisis in the history of the United States since the Civil War.

A ‘New Deal’, pledged by Franklin D. Roosevelt in his election campaign and the inaugural address, focused on alleviating emergencies and supporting the recovery of the economy. Roosevelt provided swift actions to implement his New Deal. He closed banks for some time to end panic in the depositors. He collaborated with a special Congress session in the phase of the first 100 days. The purpose was to pass recovery legislation for establishing alphabet agencies like ‘Agricultural Adjustment Administration (AAA) and ‘Civilian Conservation Corps (CCC). The main intention was to create employment opportunities, especially for the younger generation. Different other agencies supported labor and businesses. Moreover, they also provided security to depositors of banks, subsidized payments of a farm as well as home mortgages, and ensured regulation of the stock market. That was aimed to support and increase the overall employment level. The measures adopted and policies implemented under the New Deal approach revived the confidence in the nation’s economy. Direct relief saved people from starvation. However, the measures in New Deal involved government heavily in a direct way especially in the domain of economic and social life. The minimum working time standards were established, and the minimum wage was fixed. (Smilely, 2003).

Most of the significant institutions and laws that shape the basis of the U.S. contemporary financial system take their origin in the period of the New Deal. Legislation of the New Deal extended the authority of the Federal government in agriculture, public welfare, and banking.

During the 1930s, the American economy reached its bottom and experienced the stage of depression with unemployment soaring. A common fear existed that the economic and social basis of American society was facing a breakdown. Belief in the capitalist market was shattered as millions of unemployed people search for desperate ways to ensure their families’ subsistence.

President Roosevelt, as per his pledge to restore economic activities and transform the economy from Depression to prosperity embarked on a variety of exceptional experiments in the year 1933. These exclusive experiments in the cover of the ‘New Deal’ altered the relationships between the economy, businesses, banks, and the government. It also changed the nature of coordination among local, state, and federal governments.

The focus of the New Deal was the payment of billions of dollars for the funds for supporting work relief jobs. Moreover, it is also intended to provide relief to American citizens throughout the nation without any discrimination. For the first time in the history of the United States, the Federal government intervened in the economic activities by assuming the responsibilities of supporting the poor and unemployed. The New Deal by President Roosevelt revolutionized the economy. It also supported welfare spending in the short term as well as long term. At the most fundamental level, the relief programs of the New Deal accomplished the basic aim of providing seriously-needed income to individuals with no apparent prospects and opportunities for private employment.

As it was emphasized, Roosevelt’s New Deal may be segregated into two parts; the ‘First’ New Deal; and the ‘Second’ New Deal. The key aim of the ‘First’ New Deal was restoring the economy from the top. In 1933 ‘The Agricultural Adjustment Act’ entered its first phase, which acknowledged the long-sustained principle that low level of prices in the farm was the consequence of overproduction. Therefore, the government searched for ways to stimulate high prices by making payments to produce at low level.

The period of the Second New Deal ranges from 1935 to 1940 and focused to restore the economy at the bottom line. It endeavored to end the Depression through distinctive ways including spending at the base of the economy where funding by the government attempts for transforming non-consumers to become consumers again. ‘The Works Progress Administration’ was an enormous program of federal jobs aimed to employ unemployed breadwinners to strengthen the comfort and welfare of their families along with stimulating consumer demand. (Powell, 2004).

The Social Security Act in 1935 established and ensured a moderate worker-funded pension system guaranteed by the Federal government. Social Security proved to be successful in performing as a safety net for elderly workers and stimulating consumer demand. The impact of the National Labor Relations Act in the year 1935 was massive as it guaranteed the collective negotiation rights for American workers. A significant instance of the ‘Second’ New Deal was its endeavor to restore and reinstate the economy of the United States from the bottom up.

Roosevelt is regarded by most historians and experts as a pragmatic politician but not as an idealist or intellectual. New Deal served as a precedent for the Federal government to assume a primary role in the social and economic affairs of the nation. (Sowell, 2007) The New Deal catalyzed the extension of activities by trade unions in different industries including rubber, automobiles, and steel. Comprehensive programs and institutions that seem indispensable in the modern economy were established.

The Agriculture Adjustment Act was created to support American farmers by sustaining prices and restricting overproduction. ‘Civilian Conservation Corps’ was designed and operated under the supervision and control of the army. The Securities and Exchange Commission was aimed to supervise the affairs related to the stock market. The Federal Deposit Insurance Corporation’s major objective was to guarantee to pay out the deposits at banks. The Social Security System was established to provide pensions to old-age citizens based on their prior contributions.

FDR’s New Deal had practically supported improving the general standards of lives suffered from the disastrous effects of the Great Depression. Further the programs of the New Deal served as a precedent, particularly for the federal government to assume a primary role in the social and economic affairs of the nation.

The New Deal regulations and principles took their origin from the ideas, offered only in the 20th century. All these ideas and the entire program were innovative. However, some historians consider6, that some principles (like Antimonopoly traditions) were innovated by Thomas Jefferson and Andrew Jackson. It is argued, that monopolies were a negative financial impact, as they produced waste and undermined competence. However, the anti-monopoly commission never had essential power during the implementation of the New Deal course. The National Recovery administration took the ideas from Woodrow Wilson’s administration policies. This agency advocated the techniques, that were used during World War I. Nevertheless, the rest (and the most) of the ideas were first originated in the 1920s: these are the efforts to harmonize the financial system by creating cooperative relations, and the principles of banking system regulation.

Roosevelt created the system that is currently called the Brain Trust: it is a group of advisers that are claimed to assist in the recovery efforts. The solutions, taken by these advisers are generally more extensive for the economic regulation.

It is necessary to emphasize, that the New Deal also faced some conservative opposition. The opposition groups were predominantly formed by the democrats and called the Old Right. Though, there were also the Republicans.

As it has been emphasized, the starting point of the Great Depression was the Stock Market crash, which led to the financial crisis, the increase of the unemployment rates, and, consequently to the bankruptcy of farmers and industrialists. Soon, after the inauguration, Franklin Roosevelt proclaimed the implementation of the New Deal and started regulating the consequences of the crisis. The fact is that he killed two birds with a single stone: to restore and expand the infrastructure on the continent he claimed, that all unemployed agreed to work on the buildings of roads, connecting Eastern and Western parts of the USA. This decision was backed by the setting of the standards of minimal working days and minimal salary. Originally, the necessity to restore the infrastructure was not the highest, however, this decision may be regarded as rather rational, taking into account the increasing bankruptcy rates.

The farmers were granted the receiving of long-term credits in the order they could restore their farms and buy the necessary equipment. The fact is that the restoration of the banking system did not take much time, as only the hugest and the most stable banks left working after Roosevelt decided to close all the banks for some time: this looked like the natural selection, as most banks could not bear the inactivity period. The farmers got their credits and started restoring the agricultural sector.

It is stated, that the white-collar service sector was not severely hurt by the Depression, and the financial crisis, however, it also experienced essential troubles. To grant work for the white-collars, Franklin Roosevelt started creating different committees, and every committee was devoted to some particular problem or sphere. However, the committees also required financial support. Thus, the Work-Relief Agency got up to $11 billion for the period 1935-1943, and WPA provided up to 8 million jobs for this period.

As for the effectiveness of the New Deal, it should be mentioned, that historians express no doubt, that it helped to overcome the Great Depression. The economists, in their turn, are not so certain, and some of them argue, that it only worsened the Depression. Thus, the survey showed, that 51% of the economists agreed on the effectiveness of the New Deal. As for historians, 73% agreed.

The creation of the New Deal Coalition was the necessary step for overcoming the Depression crisis. It consisted of poor labor people, mainly the white southerners. They perfectly knew what people wanted from the presidential administration, and were able to formulate these requirements for the following law projects. The fact is that the people that entered this coalition were not professional financial experts, law experts, or even social workers. They were just the representatives of the masses, that is why this coalition is the subject of numerous arguments.

The New Deal promised by Roosevelt to the Americans was aimed at ending depression. In the early days of his presidency, the administration of Roosevelt initiated a passage of different laws related to banking reforms, relief programs for lifting emergencies along different other agricultural and work relief programs. (Mcelvaine, 1993) FDR’s New Deal practically supported improving the general standards of lives suffered from the disastrous effects of the Great Depression.

Moreover, in the long run, the programs of the New Deal served as a precedent, particularly for the federal government to assume a primary role in the social and economic affairs of the nation. (Sowell, 2007) It could be concluded, based on arguments presented in the paper, that FDR’s New Deal was successful in pulling the economy from Great Depression and has a perpetual impact on the economy of the United States.

Barnanke, B (2004) Essays on the Great Depression. Princeton University Press.

Bernanke has included a collection of essays in his book. He is a scrupulous and careful econometrician in his argumentative discussion about the decline of the economy after the Great Depression. He has provided a complete overview of the macroeconomics of the Great Depression.

McEclvaine, R (1993) The Great Depression: American 1929-1941. Three Rivers Press.

Robert McEclvaine’s description of the cultural shock and economic collapse brought by the Great Depression is presented in the book. The author has stated the responses of Roosevelt and Hoover that shaped the modern-day anticipations of the role played by the federal government in the daily routine lives of people. The book specifically deals with the events after World War I and events involving U.S in World War II.

Powell, J (2004) FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great” Depression Three Rivers Press.

Jim Powell focuses on the effects of major policies implemented by Roosevelt. Powell has portrayed the sketches of the major players also. He has discussed the Social Security System about unemployment and the phenomenon of higher taxes as well as new labor laws along with their impact.

Smilely, G (2003) Rethinking the Great Depression. Ivan R. Dee, Publisher.

Gene Smiley has endeavored to link the events of the Great Depression with overproduction, inequality of wealth, and speculation in the stock market. These along with some other causes led to the New Deal implementation. These events have been investigated and their effects have been presented in the book.

Smith, Jean (2008) FDR. Random House Trade Paperbacks.

Smith is a renowned and independent biographer. He has magnificently presented a biography of one of the significant Presidents of the United States. Scores of articles and books have already been written about Roosevelt but the expressive blend of the complex life of FDR has been presented in an elaborative way

Sowell, T (2007) Economic Facts and Fallacies. Basic Books.

Thomas Sowell in economic Facts and Fallacies has attempted to expose some of the famous fallacies regarding economic issues and has included many beliefs disseminated in the mass media by politicians. Sowell has published popular and scholarly articles on economics and some interesting facts and figures about Great Depression.

Zelizer, J. E. (2000). The Forgotten Legacy of the New Deal: Fiscal Conservatism and the Roosevelt Administration, 1933-1938. Presidential Studies Quarterly, 30 (2), 331.

Julian Zelizer aimed to analyze the New Deal Approaches from the viewpoint of the current economic affairs and difficulties. The book entails the analysis of the origins of the New Deal approaches, studies the innovations, and offers the comparison with the contemporary approaches.

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IvyPanda. (2021, October 4). Roosevelt's New Deal and the Great Depression. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/

"Roosevelt's New Deal and the Great Depression." IvyPanda , 4 Oct. 2021, ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/.

IvyPanda . (2021) 'Roosevelt's New Deal and the Great Depression'. 4 October.

IvyPanda . 2021. "Roosevelt's New Deal and the Great Depression." October 4, 2021. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/.

1. IvyPanda . "Roosevelt's New Deal and the Great Depression." October 4, 2021. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/.

Bibliography

IvyPanda . "Roosevelt's New Deal and the Great Depression." October 4, 2021. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/.

• Franklin Roosevelt and The New Deal
• Franklin Delano Roosevelt's Era
• Franklin Roosevelt's Presidency and Its Influences
• Roosevelt’s First New Deal and the Second New Deal
• Franklin Delano Roosevelt’s Plans to Combat the Great Depression
• The Social Welfare Act of 1935
• The Era of Franklin D. Roosevelt
• Roosevelt’s New Deal and Its Influence on the Society
• The Actions of Roosevelt During the New Deal
• Roosevelt’s Plan to End the Great Depression
• Most Influential Politicians in American History
• “A Shopkeeper’s Millennium” by Paul Johnson
• Black Code: Term Definition
• FDR and the New Deal
• How the Great Depression Changed Americans

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Paul Krugman

Stuck ships and supply-chain inflation.

By Paul Krugman

Opinion Columnist

It has been a week since the Dali, a container ship, struck the Francis Scott Key Bridge in Baltimore. It’s still stuck there, and the images remain amazing, in part because the vessel is so huge compared with what’s left of the bridge. How could planners not have realized that operating superships in the harbor’s confined waters posed a risk?

And with the ship and pieces of the bridge blocking the harbor entry, the Port of Baltimore remains closed. How big a deal is that for the economy?

Well, it would have been quite a big deal if it had happened in late 2021 or early 2022, when global supply chains were under a lot of pressure. Remember when all those ships were steaming back and forth in front of Los Angeles, waiting for a berth?

It’s less important now: Pre-Dali Baltimore was only the 17th busiest U.S. port , and there’s apparently enough spare capacity that most of the cargoes that would normally have passed through Baltimore can be diverted to other East Coast ports. The Dali is no Ever Given , the ship that blocked the Suez Canal when it ran aground in 2021.

Still, global supply chains don’t have as much slack as they did, say, last summer, after the pandemic disruptions were mostly a thing of the past, because Baltimore isn’t the only problem. The Panama Canal is operating at reduced capacity because a historic drought , probably in part a consequence of climate change, has limited the supply of water to fill the canal’s locks.

Elsewhere, the Houthis have been firing missiles at ships entering or leaving the Red Sea, that is, heading to or from the Suez Canal. Presumably as a result of these and other problems, the New York Fed’s widely cited index of global supply chain pressure, while still not flashing the red lights it was showing in the winter of 2021-22, has worsened significantly since last August:

And given what we know about the causes of the inflation surge of 2021-22, this worsening makes me a bit nervous.

I think it’s fair to say that a great majority of economists were caught flat-footed one way or another by inflation developments over the past three years. Along with many others, I failed to predict the big initial run-up in inflation. But even most economists who got that part right appear in retrospect to have been right for the wrong reasons, because they failed to anticipate the “immaculate disinflation” of 2023: Inflation plunged, even though there was no recession, and the high unemployment some claimed would be necessary to get inflation down never materialized.

A side remark: Official measures of inflation were somewhat hot in the first two months of 2024. But much of this probably reflects the so-called January effect (which is actually spread out over January and February), in which many companies raise their prices with the coming of a new year. The Federal Reserve and many independent economists expect disinflation to resume in the months ahead.

So what explains the swift rise and fall of inflation? Way back in July 2021, White House economists argued that we were in a situation resembling the surge in inflation that began in 1946 — that recovery from Covid had created conditions similar to the early postwar period of pent-up demand and disrupted supply chains. The postwar inflation surge ended relatively quickly — after two years — without an extended period of high unemployment.

In retrospect, that analysis looks spot on, since pretty much the same thing seems to have happened in the latest inflation cycle. Following Mike Konczal of the Roosevelt Institute, who has just joined the Biden administration, here’s a plot of annual changes in core inflation — measured as consumer prices excluding food, which is the best number available back to the 1940s — against the unemployment rate:

As you can see, 2023 looks like the late 1940s, not, as inflation pessimists predicted, like the Volcker disinflation of the early 1980s.

A more recent White House analysis puts additional numbers to this diagnosis, estimating a Phillips curve — an equation that is supposed to track inflation — that includes the effects of supply-chain pressure, using the New York Fed measure. According to this model, supply chain pressures (plus the interaction of these pressures with demand) accounted for most of the rise in inflation above the Fed’s 2 percent target during the past several years:

Conversely, the model says that the easing of supply-chain problems as businesses adapted to economic change accounts for most of the disinflation since 2022.

This all makes a lot of sense, and until recently made me feel rather comfortable about the prospects for a soft landing — inflation falling to an acceptable level with unemployment staying low.

But if you think supply-chain disruptions were the main driver of inflation and the easing of these disruptions the main driver of disinflation, you have to be worried about the effects of a renewed worsening of the supply-chain situation.

Now, supply chain problems today aren’t remotely as bad as they were in 2021-22; if the Dali disaster had occurred back then, it really would have been a collapsed bridge too far. At least according to the New York Fed measure, we’ve actually been experiencing a stretch of below-normal supply pressure, and all that has happened is a return to normal. This might not have much adverse effect on inflation.

But I’m not as sure about this as I’d like. Supply chains are making me nervous again.

One difference from the 1940s: Price controls were never a serious prospect.

Immigration and the U.S. post-Covid boom.

Surprise: “ Italy has weathered recent crises well .”

Inflation expectations are down.

Facing the Music

Creating the score for “Dune .”

Paul Krugman has been an Opinion columnist since 2000 and is also a distinguished professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @ PaulKrugman