A. IntroductionOn July 2, 1932, at the Democratic National Convention, the crowd listened intently to the phrase:” I pledge you, I pledge myself to a new deal for the American people.” This was the first time when the term” New Deal” was mentioned by Franklin Delano Roosevelt, the 32nd president of the United States. Since then, the New Deal name was soon applied to the programs instituted by Roosevelt from 1933 to 1939 with the goal of relief, recovery and reform of the United States economy, in order to solve the economic problems created by the depression of the 1930’s.
The New Deal legislation was enacted mainly in the first three months of 1933 (Roosevelt’s “hundred days”) and dozens of alphabet agencies were created as a result. The New Deal is generally considered to have consisted of two phases. The first phase (1933-34) attempted to provide recovery and relief from the Great Depression through programs of agricultural and business regulation, inflation, price stabilization, and public works. The second phase of the New Deal (1935-39), while continuing with relief and recovery measures, provided for social and economic legislation to benefit the mass of working people.
After 1937 the New Deal met with increasing criticism and the speed of reform slackened, and there was growing Republican opposition to the huge public spending, high taxes, and centralization of power in the executive branch of government; within the Democratic Party itself there was strong disapproval from the “old guard” and from disgruntled members of the Brain Trust. As the prospect of war in Europe increased, the emphasis of government shifted to foreign affairs. There was little retreat from reform, however; at the end of World War II, most of the New Deal legislation was still intact, and it remains the foundation for American social policy.
The New Deal remains controversial from its birth to the present days, some have insisted that the New Deal was an appropriate response to desperate conditions and produced programs of continuing value; others have criticized it because it prolonged and worsened the Great Depression instead of saving the country from it and have called it an inadvisable expansion of federal control over the American economy. Then what specific measures that Roosevelt took as the “New Deal”? Was the New Deal more of a success or a failure? In what way should we evaluate the New Deal?B. The Great Depression and the New Deala. The Great Depression and the Hoover ResponseWhen Herbert Hoover was inaugurated as the thirty-first President of the United States early in 1929, the nation was enjoying unprecedented prosperity. But by the end of the year, the stock market had crashed and the country was headed for the Great Depression, which was a watershed in American history.
The roaring twenties came to a screeching halt and many Americans faced absolute poverty. Human suffering was widespread, and it affected all aspects of the economy. Shopkeepers lost their stores and farmers lost their farms. Banks failed and savings accounts were wiped out. Investors lost their stock market investments. At one point nearly half of American home mortgages were in default. Little was being done about this issue, especially by Herbert Hoover, the current president, whose “hands -off” approach to government did little to fix the dire situation Americans found themselves in.
Although at end Hoover did realized the seriousness of the situation and did take some action to try and end the depression. But as he neared the end of his term, the American economy was in its worst state yet, and many fearful citizens wanted a leader who would do more to alleviate the crisis. They found that leader in Franklin D. Roosevelt, who promised the nation a “New Deal” and with that promise won the election of 1932.
b. The New Deal: Measures of Relief, Recovery, and ReformWe often say that the New Deal had three components: direct relief, economic recovery, and financial reform. These were also called the ‘Three Rs’. Via these three Rs, Roosevelt targeted many aspects of the economy from banks to the living conditions of the people.
Relief was the immediate actions taken to halt the economies deterioration. Roosevelt’s administration’s relief policies led to the formation of many “alphabetical” agencies between 1933 and 1935. For example, the Federal Emergency Relief Act (FERA) aimed to give money to state and local governments for relief efforts; the Civilian Conservation Corps (CCC) aimed to create jobs for young men to work in parks, forests, and farms; the Civil Works Administration (CWA) aimed to provide jobs on public works projects such as roads, buildings, and parks.
Recovery was the effort in numerous programs to restore the economy to normal health. It was focused on longer-term stability in employment, agriculture and businesses. For instance, the Agricultural Adjustment Act (AAA) tried to raise farm prices by inducing shortages; the National Industrial Recovery Act tried to stimulate business and offer rights and security to the laborer; the Federal Housing Administration (FHA) was created to help prospective homeowners and builders; the Public Works Administration (PWA) was established to simulate jobs by building new public buildings; the Tennessee Valley Authority (TVA) was created to provide jobs, cheap electricity, and flood control in the South. And prohibition repealed by the Twenty-First Amendment. By most economic indicators this was achieved by 1937–except for unemployment, which remained stubbornly high until World War II began.
Reform was permanent programs to avoid another depression and insure citizens against economic disasters, which was based on the assumption that the depression was caused by the inherent instability of the market and that government intervention was necessary to rationalize and stabilize the economy, and to balance the interests of farmers, business and labor. It included the National Recovery Administration (1933), regulation of Wall Street (SEC, 1933), the Agricultural Adjustment Act farm programs (1933 and later), insurance of bank deposits (Federal Deposit Insurance Corporation 1933) and the Wagner Act encouraging labor unions (1935).
The New Deal measures included almost every aspect of the society: relief programs for the unemployed, the expanded regulation of agriculture, industry, finance, the establishment of a legal minimum wage, creation of Social Security, unemployment insurance, and income supplements for dependent children in single-parent families, the aged poor, the physically handicapped, and the blind. By 1939 public attention focused increasingly on foreign policy and national defense. The New Deal was over, but it had permanently expanded the role of the federal government, particularly in economic regulation, resource development, and income maintenance.
C. The Debate over the New Deal: Success or Failure?The argument that began in the 1930s about whether the New Deal was a success is as hot today as it was seven decades ago. A 1995 survey of economic historians and economists asked “Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression.” Of the economists 27% agreed and 51% disagreed. Of the economic historians, only 6% agreed and 74% disagreed. (The rest were in the partly agree/disagree group). Some people still consider Franklin D. Roosevelt a personal hero for trying to soften the blows of the Great Depression.
They argue that although the New Deal did not end the depression, all in all it helped to prevent the economy from decaying further by increasing the regulatory functions of the federal government in ways that helped stabilize previous trouble areas of the economy: the stock market, the banking system, and others. Others today, however, consider Roosevelt the president who steered the nation toward socialism, or they argue that the New Deal worsened and prolonged the depression. Although the people who hold the view that the New Deal was a failure are minority, their views are strong enough to influence millions of people.
a. The Significance of the New DealSupport for the New Deal and Roosevelt came from almost all walks of life. One representative is William Leuchtenberg. In his essay, “The achievement of the New Deal,” Leuchtenberg argues that the New Deal, though not effectively ending the Depression, helped millions of American survive the brutal poverty, economic hardship, and loss of hope that the Depression created. People who support Leuchtenberg do realize that the New Deal had its shortcomings and it had not brought the country back to full employment nor really restored prosperity. However, on balance, it should be considered a success. They agree that the New Deal was a defining moment in American history comparable in impact to the Civil War. Never before had so much change in legislation and policy emanated from the federal government, which, in the process, became the center of American political authority.
The significance of the New Deal was mainly showed in the following three aspects:First, the New Deal had an immense constructive impact on the nation. At the very outset, it brought the country through the crisis that Roosevelt had inherited, and it did a whole lot to ameliorate the worst hardships of the depression. Because of New Deal decisions, many areas of American life formerly left unregulated became henceforth subject to federal authority: the stock exchange; agricultural prices and production; labor relations; relief of the needy. By encouraging the growth of labor unions the New Deal probably helped workers obtain a larger share of the profits of industry.
By putting a floor under the income of many farmers it checked the decline of the agricultural classes. As a result of the legislation of the Hundred Days, debt-ridden city families were safeguarded from dispossession of their homes. Throughout the 1930’s, work was found for millions of unemployed in a series of projects from the FERA to the WPA. The social security program, with all its inadequacies, also lessened the impact of bad times on an increasingly large proportion of the population and provided immense psychological benefits to all the people. In general, after the New Deal years the government accepted its obligation to try to provide all the people with a decent standard of living and to pay some attention to achieving the Jeffersonian goal of happiness for all as well.
Secondly, the New Deal hastened several major changes in the United States. One of the most dramatic shifts of the era was the movement of Negro voters from the Republican to the Democratic Party.
And among other important social changes, the New Deal rural electrification program made farm life literally more civilized. All in all, the spirit of the new Deal heightened the people’s sense of community, revitalized national energies, and stimulated the imagination and creative instincts of countless citizens.
Many achievements were made by the New Deal for America; not only bringing the United States out of the depression, but bringing positive changes for racial equality and opening doors for farmers and blue-collar workers as well. Roosevelt helped the American people regain faith in themselves while at the same time bringing hope as he promised prompt and vigorous action while asserting in his Inaugural Address that “the only thing we have to fear is fear itself.” As a result of Roosevelt’s efforts and with a shift of the government in the people’s lives from being passive to active, America was able to walk on more stable ground, even with a few stumbles here and there.
b. Was the New Deal a Failure?However, not all Americans supported President Roosevelt or embraced New Deal programs and policies. The debate over the New Deal’s role in the Great Depression is still alive today. One representative is Gary Best who argues in his essay, “Pride, Prejudice, and Politics: Roosevelt versus Recovery, 1933-1938,” that the very New Deal programs Roosevelt created to help Americans overcome the Depression actually made it worse and increased suffering. And some others felt that Roosevelt was taking the nation down the road to socialism or even communism with his works programs and with the Social Security Act. These people could also have many reasonable arguments sometimes about the negative economic consequences of the New Deal and their connection to the magnitude and length of the Great Depression. Although the criticisms included many aspects, the dominating point of the criticisms against the New Deal is that it prolonged and worsened the Great Depression. Some even use the word “disaster” in describing the New Deal.
Was the New Deal really such a disaster as they described? Was the New Deal a failure? No doubt, despite all that the New Deal had accomplished, the New Deal experienced some failure with its success and there were still obstacles facing Roosevelt. Some of the programs and legislation were struck down and deemed unconstitutional by the Supreme Court. Because of the situation Roosevelt found himself in he attempted to increase the size of the Supreme Court with his court packing scandal which was his attempt, which proved unsuccessful, to increase the number of justices and appoint his own justices that supported the New Deal.
The final nail in the coffin for The New Deal was the recession that Roosevelt faced from 1937 to 1938. With the economy recovering nicely Roosevelt listened to his secretary of the treasury and decided to cut relief programs and shut down federal job programs. However, this proved disastrous and unemployment went up to 19 percent. Because of this, what economic recovery we were experiencing fell through. Despite the attempts to revive what he had destroyed, it was too late since a conservative congress prevented Roosevelt from doing so.
Another thing that the critics mention against the New Deal is that the unemployment stayed high throughout the 1930’s. The employment schemes did not provide work for everyone. The black people in America were still in a bad state. There were a number of improvements such as 200,000 black people were helped by the CCC and other alphabet agencies, but they also had a major burden that no laws were passed to stop the Ku Klux Klan or anyone else lynching them for sometimes no apparent reason because Roosevelt feared that the Democrats in the southern states wouldn’t support him. The poorest people in America often didn’t get help during these years of benefit, and stayed as poor as they were. And the role of women was often ignored during the New Deal; though it benefited many Americans. Federal job programs permitted only one person per family to hold a job in the program; this excluded women because the men would take the job.
Critics of the New Deal have always argued that it should have done more, that it should have done less, and that it should have done things differently. Yet some of these may be criticisms after the fact, they ignore the complexities of the pressures of those years. Roosevelt’s willingness to experiment with different means of combating the depression made sense because no one really knew what to do. No doubt that the New Deal was deficient in a number of respects. Nevertheless, compared with its achievements, the shortcomings of the New Deal seem less impressive.
D. ConclusionSince the day of its birth, the New Deal received millions of contradictory ideas: Roosevelt’s ideas of a big government were opposed by conservatives and businesses, which had enjoyed years of laissez-faire practices. However, most Americans gladly embraced the New Deal as saving the country despite its relatively small accomplishments. Roosevelt was criticized for spending too much on his programs, but some economists believe that he should have spent even much more.
Except for its failures and many criticisms, the New Deal can be considered of mostly a success. Overall the New Deal was the change that was needed to bring the United States out of the Depression and improve the lives of Americans. It accomplished exactly what was necessary to keep America afloat: the new deal programs aided and preserved different businesses and established future economic practices without radically changing the previous Business policies; it met the needs of the millions of penniless people who needed the support immediately; it ultimately served its purpose of protecting the economy from complete collapse and preserving the economic structure of the previous generation; it changed the role of government in the lives of Americans and increased the government’s sense of social responsibility for its citizens; and some of its programs and legislation the American people still benefit today, such as the Social Security and the Wagner Act.
Roosevelt’s New Deal was a brand new approach to government that greatly limited states rights, strongly favored workers and unions, and formed programs that for many critics were borderline socialist. It was the enthusiasm and optimism that President Roosevelt held for his New Deal made it a key factor for holding the country together through one of its most tumultuous periods. After all is said and done, Roosevelt’s Administration and New Deal were in a way a break with the old America and an entry in the new America.
Badger, Anthony J. The New Deal. The Depression Years, 1933-40. New York: Hill and Wang, 1989.
Garraty, John, A. The American Nation. New York: American Heritage Publishing Co., Inc, 1971.
Hermann, William. “Debate Over New Deal’s Role in Great Depression Still Alive .” 13 Jan.2007.
Morrison, Samuel, E., Commager, Henry, S. and Leuchtenburg, William, E., The Growth of American Republic, New York: Oxford University Press, 1983.
Schultz, Stanley, K. and Tishler, William, P. “”Dr. New Deal” Becomes “Dr. Win-the-War”” 13 Jan, 2007
http://us.history.wisc.edu/hist102/lectures/lecture20.html>••. . :1997.