The Great Depression and Franklin D. Roosevelt’s New Deal
The Great Depression and Franklin D. Roosevelt’s New Deal
Franklin D. Roosevelt’s New Deal and the depression relief scheme of Brazil’s Getulio Vargas were in some ways similar, but also in some ways different. Vargas’s and Roosevelt’s measures imparted to ordinary citizens, in most cases for the first time, the premise that government cared about them and would defend their interests. They were both created to try to get their country out of the depression and satisfy the needs of the ordinary citizen. However, these two leaders had some different ideas on how to do this.
Franklin Roosevelt’s New Deal consisted of essentially two types of reforms; social and economic. One of the most important of his economic reforms was the National Industrial Recovery Act of 1933. The purpose of this act was to get people back permanently so they would be able to buy more goods which would simulate industry and help the economy to function normally again. Included in this act was the introduction of the Public Works Administration which provided money for the building of useful public works including dams, bridges, hospitals, roads, schools, and government buildings. The most important part of building all these things was it created several million extra jobs.
Another important part of the National Industrial Recovery Act of 1933 was it set up the National Recovery Administration which abolished child labor, introduced a minimum wage and an eight-hour working day, and helped to create more employment. These rules were not mandatory, but employers were pressured to accept them and those who did were allowed to put an official sticker on their goods showing a blue eagle and the letters NRA which showed consumers they complied with these new rules. Even though they weren’t mandatory, the response was outstanding, with well over two-million employers accepting these new standards.
Another very important economic reform included in Roosevelt’s New Deal was the Farmers’ Relief Act. This act tried to help farmers whose main problem was that goods were still being over-produced which in turn was keeping prices and profits low. “Under this act, the government paid compensation to farmers who reduced output, thereby raising prices.” (Lowe, 390). This act was very successful and by 1937 the average income of farmers had almost doubled.
Roosevelt knew that it was very important to get the banking and financial systems back up and working properly. To do this, the government temporarily took over the banks with the guarantee that depositors would not lose all their money if there was another financial crisis. By doing this confidence was restored and money began to flow through the banks again. The Securities Exchange Commission of 1934 was given the job of reforming the stock exchange. It insisted that people buying shares on credit must make a down-payment of at least 50 per cent instead of the meager 10 per cent it was before the depression.
The Federal Emergency Relief Administration was another very important part of Roosevelt’s New Deal. This administration helped to provide further relief and recovery. One of its biggest contributions was it provided $500 million for dole money and soup kitchens. The Works Progress Administration, which was founded in 1935, funded a variety of public projects such as schools, hospitals, and roads. It was a lot like the Public Works Administration, however its projects were on a much smaller scale. Also, relief came for many playwrights, artists, actors, musicians, and circus performers in the form of the Federal Theater Project, which created jobs for them. In addition to giving many jobs, the Federal Theater Project helped to increase public appreciation of the arts.
Another economic reform that was included in Roosevelt’s New Deal was the creation of the Tennessee Valley Authority. This new authority helped to revitalize a huge area or rural America that had been ruined by soil erosion and careless farming. It also built dams in order to provide cheap electricity, and also organized conservation, irrigation, and afforestation to help to prevent the harmful soil erosion. Another thing they did was give loans to house owners in danger of losing their homes because they couldn’t afford mortgage repayments. Some more things the Authority were involved with were slum clearances with replacement of new houses and flats and increased taxes on the incomes of the wealthy.
Next are the social reforms that Roosevelt included in his New Deal. One of these social reforms was the Civilian Conservation Corps. This was a popular Roosevelt idea to provide jobs for young men in conservation projects in the countryside. Taking part in the Civilian Conservation Corps was not only a good opportunity for work, but also even enjoyable, especially when taking some of the other harsh jobs of the time into consideration. By 1940 around 2.5 million men had taken part in a six-month stay with the CCC, which paid them a small wage of about thirty dollars a month of which twenty- five was required to be sent home to the family. However the best part of the Civilian Conservation Corps was along with the wags they received, the workers were also given food, clothing, and shelter which alone was a good reason to join.
Perhaps one of the most important social reforms included in the New Deal was the bettering of working conditions. Two acts were passed which encouraged trade unions and helped to improve working conditions altogether. The first of these two acts was the Wagner Act of 1935, written by Senator Robert F. Wagner of New York. This act gave unions a proper legal foundation and also gave them the right to bargain for their members in any dispute with management. Another thing it did was set up the National Labor Relations Board to which workers could appeal to unfair practices by management. The next of these two acts was the Fair Labor Standards act of 1938, which introduced a minimum wage in low-paid professions and a maximum 45-hour working week, and also made most child labor illegal.
Another important social reform included in Roosevelt’s New Deal was the Social Security Act of 1935. This act introduced payments for people of old age and also unemployment insurance schemes, which were to be financed jointly by federal and state governments, employers and workers. However this turned out to be for the most part unsuccessful at the time, because payments were generally not very large nor were there any provision made for sickness insurance.
Those were most of the important social and economic reforms included in United States President Franklin D. Roosevelt’s New Deal. Next are the ideas of Brazilian leader, Getulio Vargas. Like Franklin D. Roosevelt, Vargas was an astute and dexterous political operator.
Franklin D. Roosevelt’s New Deal and Getulio Vargas’s Estado Novo had many differences. One of these was Vargas’s Estado Novo did not appeal to Brazil’s social conscience, whereas the New Deal included many important social reforms such as the ones mentioned earlier. Another one of these differences was Roosevelt attacked greedy business owners and “economic royalists” whereas the Vargas regime stayed silent. Nevertheless, these are just two of the many differences between Roosevelt’s and Vargas’s depression relief scheme.
Vargas was pressured by the working class to improve working conditions, establish a minimum wage and mandatory vacations, organize consumer cooperatives, and regulate labor relations. He was also pressured greatly by women’s groups in search of freedom from the tyranny of market forces. Some of these groups of women also lobbied the anti-oligarchial movement. Berta Lutz and the Brazilian Federation for Feminine Progress announced their “Thirteen Principles” which advocated women’s suffrage, civil equality, equal pay for equal work, paid maternity leave for working women, affirmative action in government employment, a minimum wage, the eight-hour day, paid vacations, and medical disability and retirement insurance. All these provisions would eventually be incorporated into the 1934 constitution.
In 1931, the Brazilian Black Front organized massive protests against racial discrimination. They also advocated laws to require racial integration of all public places and educated Afro-Brazilians about Pan-Africanist political movements. One of their biggest goals was to get some black representation in the National Congress. However, the Brazilian Black Front was not very successful because most of their demands went unanswered by the Constitution of 1934.
Even though it didn’t really help Afro-Brazilians, the constitution of 1934 included many important reforms that were being demanded by citizens throughout Brazil. It included a labor tribunal system, gave the government power to fix minimum wages throughout the country, and created an elaborate social security system that provided for pensions, paid vacations, safety and health standards, and employment security. In exchange for these reforms, the working class lost its freedom of action. This was because trade unions became official agencies controlled by the ministry of labor.
In reality, all these great improvements that were included in Brazil’s Constitution of 1934 were too good to be true. This new labor and social legislation was not well-enforced and was evaded by many employers. Also, these new rules and regulations did not apply to the great majority of agricultural laborers, which made up about 85% of the labor force.
These are most of the major differences between Vargas’s depression-relief scheme, the Estado Novo, and Roosevelt’s depression relief scheme, the New Deal. As you can see there were many similarities between them, but also many differences.
Levine, Robert M. Vargas’s Incomplete Revolution: Part I. www.brazilmax.com, 2001.
Lowe, Norman. The USA Before The Second War.