During Roosevelt’s Presidency his main aims was to bring relief, recovery and reform to America. Roosevelt done this by setting up a number of Alphabet Agencies to tackle the problems America had faced during the Depression from 1933-35, these were unemployment, industry, and farming etc. In this essay I aim to explore how effective Roosevelt was in bringing relief and recovery to America during the period 1933 and 1945.
Roosevelt’s aims of relief, recovery and reform can all be used to access the New Deal. However they are not completely separate; the measures can overlap in many different areas this can be explained by the ‘priming the pump effect’ this is where agencies were giving workers jobs which meant wages, which meant money to spend, by spending this money the demand for goods from factories would increase which, in turn would create more jobs. This one example of where relief and recovery overlap.
Roosevelt’s biggest concern was the collapse of the American banking system; he had to ensure that the banks were secure and that the people of America had confidence in the banking system to enable relief and recovery to begin; if the banking system is unreliable then people will not put their money into the banks so therefore America will not be able to recover. Roosevelt closed all the banks down in order to look at the books’, only the banks that were properly managed accounts could reopen. Roosevelt spoke for the first time directly to the American people on the 12th March 1933, he ensured them that the banks were now safe and that there was no longer any reason for them to withdraw money, the American people put their trust in them and give him a chance, therefore the banking crises was. For Roosevelt to achieve this he introduced two Act’s the Emergency Banking Relief Act and the Glass-Steagall Act. One of Roosevelt’s ‘Brains’ Trusters’ felt that the ‘American capitalism was saved in eight days’ because of Roosevelt’s actions.
However there were many critics of the banking legislation; Hoover’s supporters felt that all these measures could have been applied before the inauguration and that Roosevelt had therefore taken all the credit that should have been due to his predecessor. Some critics failed to acknowledge was that this was specifically Roosevelt’s intention. He saw his task as the saving of, rather than the destruction of, American capitalism. Roosevelt was also criticised because many people thought that it was all in the favour of the rich and powerful; the larger banks were given more control over the smaller ones.
Unemployment was the main consequence of the Depression; with 12 830 000 million Americans out of work in 1933. To resolve this problem Roosevelt set up a number of Alphabet Agencies.
Federal Emergency Relief Agency was one of the first agencies set up during the New Deal, FERA was set up to help the unemployed, relief benefits were given to families who took work organised by the government, with $500 million given to states and local governments. FERA’s effectiveness was limited, some workers were refused office space in some states and its funds were inadequate for the number of unemployed in America.
Despite the fact that the effectiveness of FERA was disappointing it set the sights of the federal government into giving direct funds for relief. The Civilian Conservation Corps was set up to try and conquer the unemployment crises; especially to try and relive the young unemployed men between 18 and 25 years. Between 1933 and 1941, over 3million men had severed in the CCC, these men received food, clothing and shelter
The CCC to a certain extent was effective in bringing relief to America; for example some men after they had left the managed to find work and earn a wage, another positive factor the CCC had was that it paid their workers $30 per month, $22 of this money was being sent home to families to help them survive the Depression. The CCC was successful in bringing relief to the unemployed because it gave jobs to these young men and allowed them to send money back home to their suffering families to help them recover from the Depression.
In another attempt to lower unemployment Roosevelt in 1933 created the Civil Works Administration (CWA). Within two months of its creation the CWA had found work for 4million Americans. These men built or improved thousands of kilometres of roads, thousands of public buildings and hundreds of local airports. Hopkins was criticised by people doubting whether some of the jobs actually existed and laughed at reports of the jobs the workers had to; these jobs were labelled ‘boondoggles’. Others claimed that he was wasting millions of dollars of public money; however Hopkins view was that as long as money was circulating around the economy it must be doing some good. The CWA was disbanded in 1934, therefore 4million Americans found themselves unemployed yet again. Despite the fact that these men built and improved roads, public buildings and airports the CWA did not have any real impact in helping the unemployment crisis to which it was initially set up for, so therefore the CWA did not have any effect in bringing relief or recovery to the USA.
In June 1933 the Public Works Administration (PWA) was set up, the main aim was to create work for skilled workers, Ickes believed that the schemes set up by the PWA should have lasting value for the nation. Between 1933 and 1939 it managed to build 70% of the nation’s schools and 35% of its hospitals. Despite of all this the PWA’s successes were limited, one problem was that it was only set up to create jobs for the skilled workers which still left the problem of the millions of unskilled workers.
The PWA offered relief and recovery to Americans because it lowered unemployment and got industry going again; created more jobs for further skilled workers. It was hoped that the expenditure on public works such as roads, dams, hospitals and schools would stimulate the economy. The PWA pumped billions of dollars into the economy and was responsible for massive public works schemes.
The PWA only provided jobs for the skilled workers, which still meant that there were millions of unskilled workers unemployed the Works Progress Administration was set up especially for unskilled workers. Between 1935 and 1939 it became the country’s biggest employer, giving work to an average of 2million people each year. The WPA set up many projects some of these were the Federal Writers Project and the Federal Art Project, all these projects were part of the scheme to get unskilled workers back to work.
In conclusion Roosevelt was moderately effective in bringing relief and recovery to the unemployed in America, the PWA and WPA for example created new and lasting jobs for the millions of unemployed in America. Even though there are many criticisms towards the agencies set up for the unemployed they all created employment opportunities this further helped the levels of unemployment rise for example these agencies were giving workers jobs which meant wages, which meant money to spend, by spending this money the demand for goods from factories would increase which, in turn would create more jobs. This was especially important in bringing recovery to America. However there are some criticisms for the unemployment agencies for example the CCC which did not really give any lasting jobs to the young men and the CWA did not have any lasing value for the economy.
However unemployment was only one problem that Roosevelt faced during his Presidency, Roosevelt also needed to tackle the problems in the industry, however there is a cross over with some of the agencies set up for the unemployed which in turn help to get the industry going again; schemes like the PWA for example helped get the industry going again as well as tackling unemployment.
The demand for good dropped massively after 1929 so therefore employers had to cut their production and sack many of its workers; which led to unemployment rising. Industrial recovery was a priority for the New Deal, for Roosevelt to achieve this he would need the support of businessmen; however some businessmen still supported the laissez-faire policies
In 1933 the National Recovery Administration was set up, its aim was to improve the relationships between the employers and workers. All employers and firms were encouraged to agree to these codes such as production limits, wage levels, working hours, prices and trade union rights. For these codes to work Congress passed laws which introduced a minimum working week, established a minimum wage, abolished child labour and gave workers the right to organise trade unions and take part in collective bargaining. The success of the NRA could be because it had such an enthusiastic leader; Hugh Samuel Johnson. The NRA was voluntary but those that joined the NRA could place the NRA blue eagle symbol in their factories and on their packaging. By early 1934 over 557 codes had been drawn up and accepted and around 23million people were working under these codes.
Despite all the achievements of the NRA there were many drawbacks for example many of the codes turned out to be unworkable; this was mainly because they were adopted so quickly without any proper thought or planning, also the NRA favoured big businesses rather than small business. Small businesses found it difficult to pay the minimum wage of $11. Even though the NRA codes look impressive they did nothing to help economic recovery, many critics argued that the NRA did little expect give large firms the opportunity to indulge in unfair practices.
Regardless of the attempts to bring about industrial recovery to the USA the codes that were set up to deal with these problems did little to help the industry recover.
It is said that Roosevelt was uncertain about the effectiveness of the public works programmes, the British economist J. M. Keynes once said that he doubted that the president really understood what he was saying. This shows that Roosevelt did not really understand what was going on in the economy. So therefore the NRA was effective in providing jobs for the unemployed and getting better working conditions for its workers.
Agricultural recovery was given a higher priority that industrial recovery mainly because 30% of the labour force worked in agriculture so therefore if the agricultural workers could afford to buy more then this would mean the industry would be stimulated. Farmers suffered the most during the Depression; they had enjoyed a considerable amount of prosperity during the ‘Boom years’. The problems that agriculture faced were most probably down to the lack of regulations in agriculture until the New Deal. The prices of farm products fell dramatically, wiping out any profits that remained. It was clear that there needed to be a massive change in agriculture so therefore Roosevelt appointed Henry A. Wallace as Secretary of Agriculture.
The main issue facing Wallace was that farmers were producing far too much and then resulting in low prices made it impossible for most farmers to survive. On 12th May 1933 the Agricultural Adjustment Administration was created. The main aim of the AAA was to increase farmers’ income. The AAA also paid farmers to reduce their production of ‘staple’ items such as cotton, corn, milk, pigs, rice, tobacco and wheat. The programme was to be self-financing through the tax placed on companies that processed food. The AAA did reach their goal of increasing farmers’ income because it rose from $4.5billion in 1932 to $6.9billion in 1935.
The decision to slaughter 6 million piglets to boost pork prices promoted a public outcry. The cost of all the doings of the AAA meant that there were higher taxes on food, the AAA did little or nothing to improve the lives of millions of farm workers and farmers with more land received more compensation; it wasn’t based of farmers needs.
The achievements of the AAA can be widely discussed the system was voluntary and depended on farmers themselves meeting together and making the decisions, farmers also supervised each other to ensure that promised reductions in production actually occurred. The AAA did not have that much success in dealing with the problems of the American farmers, expect from the rise in farm incomes. It is clear to see that the farmers who owned large, well-established farms gained more form the AAA than smaller farmers. The AAA seemed to have limited success in dealing with the problems faced by the American farmers. It was only those who owned large, well-established farms gained a considerable amount of compensation. So therefore it is evident that the AAA did nothing to improve the lives of millions of farm workers; many of whom were black and continued to live in conditions of poverty and starvation.
The Tennessee Valley Authority (TVA) was one of the most important schemes of the New Deal; it was created to harness the power of the River Tennessee. Every spring the River Tennessee flooded, washing away millions of tones of top soil and destroying farms, during the summer there was no water in the river and all the land became parched, this created problems such as poor-quality farming; the 2.5million people lived within its boundaries were living in poverty. Roosevelt described the valley as ‘the nation’s number one economic problem’.
The munitions factory was converted to a chemical plant manufacturing fertilisers and the hydro-electric plant produced power seven states. The TVA produced many benefits for the people living in its area and for the country as a whole. The TVA built a series of dams, one of the many successes of the scheme was the building and maintaining the dams created thousands of jobs, this also help Roosevelt sort out his unemployment worries. These dams also produced cheap electricity; which reached thousands of families; by 1945 75% of families in the Tennessee Valley had electricity, where as before it was only 2% of families. The dams also played a role in creating more employment and getting the industry going again because realising that cheep electricity was available they were encouraged to build more factories.
The TVA was one of the most successful agencies of the New Deal it was highly effective in bringing relief and recovery to the USA because it did not only sorted out the problems in the Tennessee Valley it also helped many of the other problems that Roosevelt faced like the unemployment crises and the industry, it created thousands of jobs and stimulated the recovery of the whole region, it was largely responsible for the modernisation and improved living standards.
Roosevelt felt that by 1937 business had recovered sufficiently from the Depression, so therefore he felt that he could cutback on the government spending. However these cutbacks led to what become known as the ‘Roosevelt Recession’. As a consequence unemployment rose during the years of 1937-38; the same problem that had occurred earlier in the decade had returned in full force. For example in the manufacturing industries employment fell by 23% and the production of the motor car and such items fell by nearly 50%. Recovery seemed as far away as ever. In an attempt to end the recession Roosevelt asked Congress to vote him a $3.8billion relief budget with most of it going to the PWA and WPA. However this was a slow process and in 1939 unemployment still stood at 9million.
Nearing the end on the 1930’s the European war began to dominate Roosevelt’s policies. War contracts and the opening of markets unable to be met by those at war brought about recovery. It is nearly unquestionable that the involvement in the Second World War rather than the New Deal brought prosperity back to the USA.
In conclusion the effectiveness of the New Deal can be assessed in many different ways. Among many historians the view is clear that the New Deal only brought about partial recovery. It could be said that the agencies set up by Roosevelt had not been thought out properly to tackle the problems America faced. However the New Deal brought about the idea that the government had responsibilities to look after the welfare of its citizens, it gave workers right and brought about social security payments did contribute to the recovery of America. However it was not until 1941 that full prosperity returned, only as a result of America’s involvement in the Second World War.