Franklin D. Roosevelt and the New Deal
Franklin D. Roosevelt and the New Deal
Franklin Delano Roosevelt is indisputably the greatest President of the United States of America in the 20th century. Ascending to the highest office despite his crippling poliomyelitis condition, he epitomized transformation never before seen in American soil (Cashman 1989).
Identifying himself with the multitudes forgotten at the base of the base of the economic pyramid, he inspired and led the New Deal; a complex and comprehensive legislation program designed to raise all Americans from the Great Depression and serve as a remedy to the inequalities inherent in the American social structure. Under the same deal, the United States military and domestic strategies were directed to the World War II, the victories thereof brought the United States to the pinnacle of global economic and unchallenged military superiority.
The United States, his country over which he presided, in unmatched adoration elected him four times: a feat unmatched in the history of the American presidency. For the twelve years in White House, he was the personification of the response of all Americans to the Great Depression. As the World War II drew on he never failed the American populace.
For the twelve years, unparalleled crisis tormented the United States and not a single citizen was spared. Never, in the history of the Presidency had a president identified with each and every citizen, bearing even greater responsibility as he pushed his metal capacities to the limit to save Americans from the bites of the Great Depression. Sitting on a wheel chair in the Oval office he witnessed and participated in greater changes not only in his country but the world over.
His administration remains a major watershed in the history of the United States. In 1933 when he took the oath of office, America was no more than a land of small town values with small government and completely isolated from global affairs. This was the America he was handed at the inauguration; an America still presided over by the Protestant and the Anglo-Saxon elites, an America of economic laissez-faire, of Prohibition, and a country of the Model T Ford (Heale 1999).
Twelve years later, a different America had emerged. An America characterized by pervasive government bureaucracy, metropolitan values, assertive ethnic minorities, a nuclear power and an America whose political power was centred in Washington. More than any other president before him he directed the fundamental transformation of America’s political society. His influence was so powerful that subsequent occupants of the White House had to operate in his shadow.
When FDR assumed office, the economic situation was so devastating that the country was almost on its knees. The gross national product plummeted from $103.1 billion to $ 58 billion (in current dollars) between 1929 and 1932. In the same period the level of industrial production had almost halved. The unemployment rate was at 25%, thousands of farmers and businesses went bankrupt, and millions and millions of investors lost life savings.
The New Deal brought into life by FDR could not have been more welcome. The Deal broke novel federal regulatory ground. For the fast time in the political and economic history of the United States, the federal government assumed the responsibility of stimulating investments. The federal government strove to correct the abuses in the national economic machinery. By amassing far more reaching goals, the government became responsible for the relief of distress among workers, homeowners, businesses, farmers, consumers and investors (Steiner 2005). Urgent action had to be taken.
The election of Franklin Delano Roosevelt in 1932 marked the terminus of the roaring twenties corporate regime paving the way for the New Deal regime, a regime that would reshape the balance of power in Washington and the way of life of American for almost half of the 20th century. The hope that he brought to the nation was so palpable.
With the New Deal FDR “made his greatest single contribution to the politics of the 1930s: the instillation of hope and courage in the people” (Derber 2004, 60). Just a day after the inauguration, the president summoned an extraordinary session of Congress and with the first sitting fresh energies was directed towards the challenge of the time: the Great Depression.
The term “Hundred Days” became descriptive of the special sessions of the 73rd Congress that launched the New Deal to fight the Great Depression. Between March 9 1933 and June 16, 1933, more major legislations were passed by Congress than at any other time in the history of the United States. The major legislations passed during these one hundred days include; the Emergency Banking Act, the Civilian Conservation Act, the Economy Act, the Reforestation Relief Act, the Economy Act, the Federal Emergency Relief Act, the Securities Act, the Tennessee Valley Authority, the Agricultural Adjustment Act, the Home Owners’ Refinancing Act, the National Employment System Act, the Banking Act, the Emergency Railroad Transportation Act, the Farm Act and the National Industrial Recovery Act. The one hundred days as the most dramatic duration in the United States’ public policy history (Olson 2001).
In the early months of 1933, the Great Depression continued biting along its relentless path. Unemployment mounted, industrial production foundered, mortgage foreclosures became commonplace and the banking sector failed and not even the state authorities could afford to meet their relief obligations (Cashman 1989).
Coupled to this inaction, the country had to wait for four months before any positive executive action could come into play. From the presidential date of November 8 to the inauguration date on March 4, this quadrennial problem in American politics persisted and its ramifications with regard to the Great Depression were not friendly either.
To remedy the situation, the Twentieth Amendment did away with the Congress meeting on January 3 and brought forward the presidential inauguration to January 20 from March 4. However, the ratification of this Amendment did not take place until February 1933. To try and heal the stultifying loss of confidence occasioned by the four months of unnecessary wait, Herbert Hoover attempted a smooth transition by pursuing dialogue with FDR, trying to extract assurances that FDR would comply with his positions on taxes and tariffs, the budget and the currency even if such a move was only focussed on maintaining public confidence but FDR would not promise commitment (Cashman 1989).
In February 1933, a series of bank failures led to the complete collapse Herbert Hoover’s intended dialogue. Historically, the weakness of the American banking system had led to so many bank failures, but in 1932-1933, the condition was reminiscent of an acute crisis. In October 1932, the crisis deepened further. In anticipation of the collapse of a crucial banking chain in Nevada, the governor ordered a bank holiday. On the midnight of February 14 1932, William A. Comstock, the Governor of Michigan issued a proclamation leading to the closure of five hundred and fifty banks for eight days. The Michigan bank holiday precipitated the panic that spread to other states and subsequent declarations of bank holidays (Cashman 1989).
As banks closed for holidays, the gold reserves flowed from the Federal Reserve System and the New Yolk banks to keep banks across the country afloat and to satisfy the demands of the panic stricken foreign investors. In slightly more than two months, Americas gold reserves had fallen from more that $ 1.3 billion to just $ 400 million. By 1933, 18,569 banks had a total deposit of about $ 6 billion in cash against the demand of $ 41 billion by depositors. Two days before the inauguration of FDR, $ 500 was withdrawn from banks across the country making the situation worse (Cashman 1989).
It is therefore no surprising that all Americans were united in the demand of a decisive executive action even if such an imperative could only be met by a modified dictatorship.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 29 September 2016
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