The New Deal Roosevelt's Program During The Great Depression
In 1929, the stock market crashed, interest rates grew, and tariffs hurt the economy. Because of this, the United States began to enter into the Great Depression. This was the longest and worst depression the United States has ever seen. People couldn’t get loans, banks were closing with peoples’ money being lost, and families were struggling to support themselves. However, it affected more than just the United States. The deflation of the Great Depression took a drastic toll on the entire world.
The Economic Depression did not happen immediately after the stock market crash. There was actually time between the two events. Many people still had their money even though things were going downhill, but this changed as even those who had money started to refuse to spend it. Businesses were closing everywhere, farms were losing money, and people were losing jobs. In the spring of 1930 there was a surge in stock prices, and it was believed that we were out of this depression. President Hoover even stated, “We have now passed the worst, and we shall rapidly recover.” However, in only a few weeks, this recovery collapsed, and the Great Depression was in full swing.
In the midst of these dark times, everyone was looking for a leader who would be able to help them out of the situation and revive the economy. In 1932, Franklin D. Roosevelt, governor of New York, was nominated to be the presidential candidate for the Democratic Party. Roosevelt won the election by a landslide and promised the people that he would make the necessary changes for the country to prevail. He came up with the “New Deal” which was a series of programs where the government could support the people more than they had previously. This plan’s main points were called “alphabet agencies”. These were programs to create jobs and give people their needs. The most successful systems were the Civilian Conservation Corps, the Works Progress Administration, the Tennessee Valley Authority, and the Securities and Exchange Commission.
President Roosevelt started the Civilian Conservation Corps, known as the CCC, with an executive order April 5, 1933. This was a work relief program that gave men jobs on environmental conservation projects so that they could work and support their families. This plan was a great use of peoples’ need to work. During its nine years, the project planted over three billion trees, and it also made paths and shelters in national parks. CCC employees also fought forest fires, planted trees, cleared and repaired roads, seeded grass, implemented soil-erosion controls.
Most men in the CCC were younger and healthier men who were getting paid around thirty dollars a month. On top of this, they also were given housing and some education as well. It is estimated that around 57,000 men were taught to read and write when they were with the CCC. Even though the CCC helped so many people and is arguably the best relief program made by Roosevelt, there were also critics of the program. Many union labor workers did not like the idea of the government stepping in and training the unskilled workers. They believed that this would lead to too much power in the government. To solve this issue, President Roosevelt made the leader of the American union the first director of the CCC.
The Works Progress Administration is another extremely impactful program that was part of the New Deal. The WPA was an employment program created in 1935 during the depths of the depression. The unemployment rate was around 20%, and something had to be done. The WPA gave people jobs and income so that the economy could heal. In 1939 the WPA was renamed as the Works Projects Administration. They named the program this because it was giving young men jobs working on infrastructure projects. They built schools, hospitals, drainage systems, bridges, and more. The WPA was an extremely successful program that provided many jobs, however, it was shut down in 1943 because WWII was elevating. People were switching to work for armed forces and creating weapons and military equipment to support the rising tensions in the world.
In the Tennessee River Valley in 1933, President Roosevelt developed the Tennessee Valley Authority. This was a program designed to give men jobs and electricity to their homes. They started a federally owned electric utility for the seven southern states in this area. The electricity came from a hydroelectric dam that President Wilson started as a project to power the munitions factory to produce more supplies for WWI. The war ended before the dam was finished, so it lost its purpose. President Roosevelt gave an order that this dam should be finished and power the peoples’ homes in this valley. Although people trusted the government to do this when they felt that businesses were charging too much for their electricity, these private businesses advocated against the TVA because it was stealing their business by selling cheaper power. They felt that this was giving the government too much power and was a threat to free enterprise.
In 1934 the Securities and Exchange Commission, known as the SEC, was created to protect investors in the stock market. Before the SEC, there was almost no oversight of stocks and bonds. A prime example of this is after WWI when the stocks were soaring. People were investing lots of money into risky stocks with no federal oversight. On Black Tuesday in 1929, the market crashed, and investors and banks lost billions of dollars. In 1932 the U.S. Senate Banking Committee held the “Pecora Hearings”. In these hearings they determined that many influences were misleading investors, so they developed the SEC.
Before the SEC came about, there was a plan that did not work out. This plan was called the Securities Act of 1933. This act was aimed to protect investors from fraudulent activity. The Securities Act stated that investors must be given honest financial data about public security sales. Shortly after, in 1933, the Glass-Steagall Act was passed which helped rebuild the economy by separating investment banking from commercial banking. Finally, in 1934, President Roosevelt signed the Securities Exchange Act, which created the SEC. This gave the SEC more power and allowed them to raise charges against people who violate security laws.
One of the biggest and most revolutionary things that the New deal brought into place is Social Security. Before the depression, taking care of people in need was relied on by their families. These families had to make sacrifices and spend lots of time and money to help those that they love. This was always a minor issue as people were able to provide for their families without too much struggle, however this changed during the depression. Everyone was struggling with money, and they were not able to provide for these specific groups of people. Roosevelt made a proposal to congress for social security, and in 1935, the Social Security act created a system that would give benefits to the retired, accident victims, the unemployed, financially unstable people, blind people, and the handicapped. This took the financial burden off of families struggling to care for the less fortunate.
There were many who did not support what Roosevelt was doing. Big businessmen and the wealthy said that his ideas and actions were those of a dictator. They said that he is trying to make the government too big and that it should not have the power it is being given. The small average workers and the poor farmers would vote for him and the wealthy would vote against him in the election of 1936. The poor needed him, and the wealthy felt he was stealing from them. A big factor as to why the businesses opposed him is that the New Deal greatly encouraged growth of the labor movement. With these labor unions put into place, the big business owners would not have as much control over their employees as they once had. Whenever the employers would ignore these groups and not give them what they want, the employees would refuse to work. Strikes were taking place all over, and people were associating unions with violence. These businesses were blaming FDR and the New Deal for these strikes, and they claimed that it was a threat to democracy and the free market.
Though the claims of these businesses hurt Roosevelt’s reputation, he still ended up winning the 1936 election by even more of a landslide than when he was first elected. The people liked what he was doing, and they wanted more of it. After the election was over, the strikes continued, but now they had a new strategy. Not only were they refusing to work, but they also refused to leave the factories. This was known as the “Sit Down” strategy, and many legal issues arose with it as well. The factories were saying that it was illegal because they are occupying property that they do not own. These strikes continued to happen until the US was entering WWII .
Concern began to switch from the Great Depression onto foreign affairs as the economy was stable, and WWII was surfacing. The New Deal was ending. Before the New Deal was shut down, Roosevelt made a final attempt to preserve these ideas in the government. He got rid of political leaders in the Democratic party who opposed the New Deal and its philosophy. This was similar to packing the supreme court before leaving office, but it was unsuccessful. All this did was harm FDR’s reputation and political image. People liked diversity, but FDR believed that the Democratic party should be liberal, and the Republican party should be conservative. Regardless, he saved us from the depression and got the US back on its feet, and everyone can agree that the things done needed to happen whether they stayed around after the depression or not.
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