The New Deal Flashcards
Change of Government
President Hoover did little to help the American people
* Believed the American Government shouldn’t interfere in the economy
* American people shouldn’t rely on Government handouts
* Showed very little sympathy for the American people
Franklin D. Roosevelt elected President in 1932
* Promised American’s a ‘New Deal’
* Fight and recover from the Great Depression
Aims
The New Deal
- Relief: immediate relief for those worst affected
- Recovery: promote recovery of the economy by getting people jobs
- Reform: reform economic policies to avoid a similar event
Methods
The New Deal
- ‘Fireside chats’, used radio to **address the American people **
- ‘Brains trust’ – educated specialists to aid him
- ‘Alphabet Agencies’ – New Government Agencies
First 100 days
* Initially focused on Relief and Recovery - First New Deal
* Then Reform – Second New Deal
The First New Deal
Main Focus was Relief and Recovery
- The Financial Crisis
- Unemployment
- Agriculture
- Industrial Collapse
Financial
The First New Deal
EMERGENCY BANKING RELIEF ACT
* Only allowed financially sound banks (banks that had capital) to re-open with Federal support
* First “fireside chat” broadcast on radio reassuring the American people that all reopened banks were safe
The Economy Act 15 March 1933
* Cut wages - money saved for the New Deal
The Federal Emergency Relief Administration (FERA)
* Relief given to states to help** unemployed and homeless people**
Unemployemnt
The First New Deal
Various projects to employ people – built schools, flood control projects, built bridges, hospitals, etc.
* The Public Works Administration (PWA)
* The Civil Works Administration (CWA)
Agriculture
The First New Deal
The Agricultural Adjustment Administration (AAA)
* Paid farmers subsidies to reduce production and destroy crops and livestock
* AIM: Reduce surpluses and stabilise prices
The Tennessee Valley Authority (TVA)
* Built dams - cheaper hydroelectricity
* Planted trees to stop erosion
* Creates jobs
Industrial Collapse
Promote RECOVERY by increasing wages – making it possible for workers to buy more
National Recovery Administration (NRA)
- set minimum wage, limit working hours and ban child labour
- Federal government controlled industry and stabilised production - move away from laissez fair
Second New Deal
Social Security Act
- Old-age pensions, health benefits, unemployment insurance, child welfare, and poor relief
Works Progress Administration (WPA)
- construction and conservation programmes
- gave work to unemployed actors, writers, musicians, teachers, artists etc.
New Deal Opposition
- Capitalists saw the New Deal as a move to Communism
- Republicans thought FDR was too revolutionary and a dictator who was taking power from individual states
- Factory owners resented the new minimum wages and maximum working hours – affected their profits
- Resented having to pay social security contributions for their employees
- Wealthy didn’t like being taxed more
- Blamed FDR for ignoring the concerns of the rich
- Conservative Supreme Court Judges declared many New Deal acts unconstitutional
New Deal Support
- Subsidies and pensions helped the poor
- 1933-1939 the National Income increased by 65% and unemployment decreased by 60%
- Changed the idea that** govt doesn’t have to look after the old, sick or unemployed**
- ‘Reversing the Spiral of Depression’ helped to get businesses back on track
- Newly built roads and dams helped develop future industry
- Working conditions improved
How did the New Deal
challenge Capitalism?
- Government intervention in the economy challenged freemarket capitalism
- Government challenged the power of private companies and their employment policies
- Social Security challenged the capitalist belief that** government shouldn’t help the old, sick or unemployed**
- New Deal was very socialist in its approach (temporary socialism to make capitalism work in the long run)
- Historians argue the New Deal restored the economy and maintained democracy
The outbreak of WWII
- American economy went into war production
- Became the** largest manufacturer of arms and ammunition**
- More jobs, higher wages
