New Deals 1933-1945 Flashcards
Agriculture - Overproduction
• Agricultural Adjustment Act 1933
The government would subsidise farmers to reduce their acreage and production voluntarily. This is because by producing less, the cost of food would increase, so would farmers’ incomes.
Success in agriculture
• Agricultural Adjustment Administration 1933
Total farm income rose from $4.5 billion in 1932 to $6.9 billion in 1935.
Why was agriculture recovery important?
30% of the labour force worked in agriculture.
If agricultural workers could afford to buy more, industry would be stimulated.
How did the Agricultural Adjustment Administration 1933 help with overproduction?
It would pay farmers to reduce their production, such as corn and cotton. The programme was to be self-financing through tax placed on companies that processed food.
The problem of overproduction
At the beginning of 1933, unsold cotton in the USA already exceeded the total average annual world consumption of American cotton.
Impact of Roosevelt’s fireside chats
The reassuring voice of Roosevelt restored confidence and helped people to believe that everything was going to be alright.
His explained in a language that all could understand.
Banking and finance - The collapse of American banking system
• Emergency Banking Relief Act 1933
It aimed to restore confidence in the American banking system by giving the Treasury power to investigate all banks threatened with collapse.
Banking and finance
• The Glass-Steagall Act 1933
Bank officials were not allowed to take personal loans from their own banks.
Banking and finance
• The Truth-in-Securities Act 1933
Required brokers to offer clients realistic information about the securities they were selling.
To solve unemployment
How it works?
• The Public Works Administration 1933
It was funded with $3.3 billion, hoping that expenditure on public works such as roads and schools would stimulate the economy. This is because road building would lead to increase demand for concrete, which meant that concrete companies would employ more workers.
To solve unemployment
Success
• The Public Work Administration 1933
It put hundreds of thousands of people to work, building nearly 13,000 schools and 50,000 miles of roads.
Unemployment by 1936
Unemployment remained at 14% by 1936
Although the economy grew 10% during Roosevelt’s first term from 1933 to 1936, output had fallen so low since 1929.
Success in restoring the banking system by 1933
By the beginning of April 1933, $1 billion in currency had been returned to banks deposits and the crisis was over.
Solving youth unemployment
How it works
• Civilian Conservation Corps 1933
Unemployed young men between the ages of 17 and 24 were recruited by the Department of Labour to work in the CCC in national forests and public lands.
Solving youth unemployment
Success
• Civilian Conservation Corps 1933
It gave young men a new self-respect and valuable experience of comradeship.
BY 1935, the CCC installed 61, 100 miles of telephone lines in inaccessible ares.
