In solving the problems of the Great Depression, the New Deal had clear successes but also major failures. Although there were clear failures in relief and reform, the success of unemployment relief and the reform of banking, labor laws, and the standard of living partially solved problems of the Great Depression.
The failures that occurred within the New Deal were early policies that attempted to relieve unemployment and reform labor laws. One of the policies enacted by the Emergency Congress in order to relieve unemployment and foreclosures of farms was the Agricultural Adjustment Act (AAA). This agency was to establish parity prices for basic commodities. The AAA planned to eliminate price-depressing surpluses of farm goods by paying farmers to reduce what they grew. These payments would come from raised taxes. However, this agency got off to a terrible start and never really recovered. Farmers, food processors, consumers, and tax-payers were all extremely unhappy. The AAA actually increased unemployment while other agencies of the New Deal were striving to decrease it. The failed agency of the AAA was finally killed by the Supreme Court in 1936 by declaring its taxation provisions unconstitutional. In addition to the failure of the AAA, the National Recovery Administration also failed. This agency was extremely complex and strived to assist industry, labor, and the unemployed.
It attempted to both relieve and reform the problems of the Great Depression. Individual industries were to reduce hours of labor in order to allow employment to be spread to more people. A limit was put on the maximum hours of labor and a minimum was placed on wages. Workers were guaranteed the right to organize, the yellow-dog contracts were forbidden, and restrictions were placed on child labor. Although this agency had early success, it quickly collapsed in 1935. The agency gained many critics and business people publicly displayed the blue bird, which symbolized the NRA, but secretly violated the codes. The Supreme Court then unanimously held that Congress could not delegate legislative powers to the executive and declared that congressional control of interstate commerce could not apply to a local business. This finally shot down the dying eagle. Although the intentions were to solve the problems of the Great Depression, the AAA made unemployment worse and the NRA flat out failed.
In contrast to the failures of early New Deal policies, there was some success in unemployment relief. The same action of Congress that created the NRA also created the Public Works Administration which was also intended for industrial recovery and unemployment relief. Under this agency, $4 billion was spent on thirty-four thousand projects in infrastructure. It resulted in the spectacular achievement of the Grand Coulee Dam which provided irrigation for millions of acres of new farmland. It also created a surplus of electrical power, something that would be beneficial during World War II.
The thousands of projects created by this agency and the creation of the Grand Coulee Dam show the success of this agency to employ numerous workers for the benefit of the country. The New Deal also had success in unemployment insurance through enactment of the Social Security Act in 1935. The measure provided for federal-state unemployment insurance and specified categories of retired workers were to receive regular payments from Washington. Provisions were also created for the blind, handicapped, delinquent children, and other dependents. Although many were excluded from Social Security, it showed the governments’ recognition that it has a responsibility for the welfare and relief of its citizens.
The New Deal additionally had success in reform, specifically banking reform. President Roosevelt’s first action to attack the problems of the Great Depression was to restore confidence in the nation’s banks. The creation of the Emergency Banking Relief Bill placed poorly managed banks under the control of the Treasury Department and granted government licenses to those who were successful. The following week, millions of Americans re-deposited their savings, allowing banks to contribute to the country’s economic recovery. The government then later passed the Banking Act of 1933 which created the Federal Deposit Insurance Corporation to guarantee bank deposits. Roosevelt also instituted a number of inflationary measures in order to raise prices. Roosevelt’s immediate actions to reform the banking system of the United States were extremely successful and restored American confidence in the banks. Confidence in the banks was the first step that allowed even more problems of the Great Depression to be solved.
Not only was there successful reform in banking, but there was eventually successful labor reform. After the failure of the NRA to reform labor laws, Congress created the Wagner Act in 1935. This act reasserted the right of labor to organize and bargain through representatives of its own choice. In response to this act, a number of unskilled workers began to organize themselves into unions, such as the Committee for Industrial Organization. After a successful sit-in strike, the CIO was recognized by General Motors as the bargaining agency for its employees. The ability for unions to organize and successfully strike showed the success of this labor reform.
Another successful reform under the New Deal was the reform of housing. To create a quick recovery and to increase the standard of living, Roosevelt set up the Federal Housing Administration in 1934. The building industry that was in charge of housing construction was to be stimulated by small loans to householders. The goal was to improve homes and to complete new ones. This New Deal reform was so successful that Congress bolstered the program in 1937 by creating the United States Housing Authority. Although there were some conflicts in completely reaching the goals of the USHA, slums in America shrank for the first time in a century, showing the success of this program.
It is true that not every problem of the Great Depression was solved through the New Deal. There were definitely setbacks in the process of reforming and relieving the country, but many of the successful agencies New Deal were able to at least ease many of the problems of the Great Depression. The New Deal, although not completely, provided a step in the right direction for healing the United States.