The New Deal And The Great Depression
|Subject:||🗽 American History|
|Type:||Compare and Contrast Essay|
|Topics:||💲 The Great Depression, The New Deal, 💱 Macroeconomics|
Table of Contents
The Great Depression was a period from 1929 to 1941, during which a significant part of the US economy crashed, and many of the wealthiest people lost their money. Millions of workers became jobless, thousands of enterprises went bankrupt, and more and more people were out of work with lesser wages. During the initial week of the stock market collapse, shares dropped a total of $30 billion, which is about $406 billion at present-day prices. The majority of financial institutions shuttered their doors and other banks struggled to stay open. The Federal Reserve increased interest rates, further deterring additional lending. Many Americans dropped their stocks regardless of how much money they received and declined to re-invest while the market was going down.
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The New Deal And The Great Depression
In 1933, Roosevelt’s New Deal was launched, which was a significant historical event. Roosevelt proclaimed a national bank holiday to have all banks closed during that day. Three days after this announcement, the president introduced to freshmen congressmen the Emergency Bank Relief Act, which was Congressional authorization to restore the operation of banks and provide government funds to support some of them. With no written version of the bill, in less than 4 hours, Democrats and Republicans gave Roosevelt what he required. This represented a major shift for the banking section of the New Deal.
For the Job Creation part of the New Deals Agencies the first relief program called Civilian Conservation Corps (CCC) was introduced on March 31 the same year that the bank holiday was announced, as a first move to provide people with employment and housing. By 1941, over 3 million people were employed under the Civilian Conservation Corps. The CCC covered only a minor fraction of those who required help, so the Roosevelt administration established a second law recognized as the Federal Emergency Relief Administration (FERA) to expand the scope of help. During the first year of this legislation, up to 5 million people across the country were provided with shelter, food and medical care. A provisional law called the Civil Work Administration (CWA) was similarly created to provide emergency unemployment assistance over the winter of 1933-34. It employed 4 million jobless people on federal state and municipal work programs that took place during the winter.
To restore agriculture, the Roosevelt administration passed the Agricultural Adjustment Act (AAA), under which farmers were paid to decrease the large-scale production of excessive output, which could result in lower prices for agricultural products. After addressing the farmers’ issue with the Agricultural Adjustment Act, the Roosevelt administration turned to the other part of the New Deal, the Industry and Labor, to rebuild the manufacturing. In June 1933, the National Industry Recovery Act (NIRA) was passed, a compromise between Roosevelt’s advisers who espoused two alternative visions. To unite both approaches, two new departments were established — the National Recovery Administration (NRA) and the Public Works Administration (PWA).
The National Recovery Administration (NRA), headed by former army General Hugh Johnson, relaunched national economic programming by instituting industrial codes that prescribed prices, output and wages for every industry. In 1935, there were several hundred manufacturing industries with 2.5 million people employed that had a blue eagle placard, which indicated that they were under the coverage of the National Recovery Administration’s codes. The Public Works Administration (PWA), on the other hand, took a completely opposite direction — it gave jobs directly to the builders and offered employment to people who were engaged in the industries that furnished the construction materials. The PWA grew to become the biggest federal public works program, spending nearly $6 million over the course of six years to collaborate with states and local governments on thirty-four thousand projects, including roads, bridges, massive electric dams, new schools, hospitals, two aircraft carriers, and more. It is worth mentioning the most publicized program, which is the Tennessee Valley Authority (TVA) program, which established a regional vision for the development of rural and impoverished regions covering forty thousand square miles, which involved repairing dams and better flood control.
The New Deal Roosevelt administration proclaimed not only the development of such substantial sectors in the state as banking, industry and farming, but also the provision of income and jobs to large numbers of people who desperately needed it. This was valuable, on the one hand, for the mutual development of citizens and the country, and, on the other hand, for establishing a stable salary so that people did not have to cope with the consequences of unemployment solely. The New Deal undoubtedly left a legacy of a more dynamic federal government through strengthened business regulation, Social Security, the Wagner Act, and much more. The New Deal reformed the way Americans viewed themselves and their expectations of government, as the state prevented depression, reduced unemployment, and assisted those in need. After Roosevelt’s term of office, Americans began to wish the president, not the Congress, to be in charge of the state.
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