Analysis of Roosevelt's "New Deal"


During the 1930's, America witnessed a breakdown of the 
Democratic and free enterprise system as the US fell into the worst 
depression in history. The economic depression that beset the United States and other countries was unique in its severity and its 
consequences. At the depth of the depression, in 1933, one American 
worker in every four was out of a job. The great industrial slump 
continued throughout the 1930's, shaking the foundations of Western 
 The New Deal describes the program of US president Franklin D. 
Roosevelt from 1933 to 1939 of relief, recovery, and reform. These new 
policies aimed to solve the economic problems created by the 
depression of the 1930's. When Roosevelt was nominated, he said, "I 
pledge you, I pledge myself, to a new deal for the American people." 
The New Deal included federal action of unprecedented scope to 
stimulate industrial recovery, assist victims of the Depression, 
guarantee minimum living standards, and prevent future economic 
crises. Many economic, political, and social factors lead up to the 
New Deal. Staggering statistics, like a 25% unemployment rate, and the 
fact that 20% of NYC school children were under weight and 
malnourished, made it clear immediate action was necessary.
 In the first two years, the New Deal was concerned mainly with 
relief, setting up shelters and soup kitchens to feed the millions of 
unemployed. However as time progressed, the focus shifted towards 
recovery. In order to accomplish this monumental task, several 
agencies were created. The National Recovery Administration (NRA) was 
the keystone of the early new deal program launched by Roosevelt. It 
was created in June 1933 under the terms of the National Industrial 
Recovery Act. The NRA permitted businesses to draft "codes of fair 
competition," with presidential approval, that regulated prices, 
wages, working conditions, and credit terms. Businesses that complied 
with the codes were exempted from antitrust laws, and workers were 
given the right to organize unions and bargain collectively. After 
that, the government set up long-range goals which included permanent 
recovery, and a reform of current abuses. Particularly those that 
produced the boom-or-bust catastrophe. The NRA gave the President 
power to regulate interstate commerce. This power was originally given 
to Congress. While the NRA was effective, it was bringing America 
closer to socialism by giving the President unconstitutional powers. 
In May 1935 the US Supreme Court, in Schechter Poultry Corporation 
V. United States, unanimously declared the NRA unconstitutional on the 
grounds that the code-drafting process was unconstitutional.
 Another New Deal measure under Title II of the National 
Industrial Recovery Act of June 1933, the Public Works Administration 
(PWA), was designed to stimulate US industrial recovery by pumping 
federal funds into large-scale construction projects. The head of the 
PWA exercised extreme caution in allocating funds, and this did not 
stimulate the rapid revival of US industry that New Dealers had hoped 
for. The PWA spent $6 billion enabling building contractors to employ 
approximately 650,000 workers who might otherwise have been jobless. 
The PWA built everything from schools and libraries to roads and 
highways. The agency also financed the construction of cruisers, 
aircraft carriers, and destroyers for the navy.
 In addition, the New Deal program founded the Works Projects 
Administration in 1939. It was the most important New Deal work-relief 
agency. The WPA developed relief programs to preserve peoples skills 
and self-respect by providing useful work during a period of massive 
unemployment. From 1935 to 1943 the WPA provided approximately 8 
million jobs at a cost of more than $11 billion. This funded the 
construction of thousands of public buildings and facilities. In 
addition, the WPA sponsored the Federal Theater Project, Federal Art 
Project, and Federal Writers' Project providing work for people in the 
arts. In 1943, after the onset of wartime prosperity, Roosevelt 
terminated the WPA. One of the most well known, The Social Security 
Act, created a system of old-age pensions and unemployment insurance, 
which is still around today. Social security consists of public 
programs to protect workers and their families from income losses 
associated with old age, illness, unemployment, or death. 
 The Fair Labor Standards Act (1938) established a federal 
Minimum Wage and maximum-hours policy. The minimum wage, 25 cents per 
hour, applied to many workers engaged in interstate commerce. The law 
was intended to prevent competitive wage cutting by employers during 
the Depression. After the law was passed, wages began to rise as the 
economy turned to war production. Wages and prices continued to rise, 
and the original minimum wage ceased to be relevant. However, this new 
law still excluded millions of working people, as did social security.
However, a severe recession led many people to turn against New Deal 
policies. In addition, World War II erupted in September 1939. Causing 
an enormous growth in the economy as war goods were once again in 
great demand. No major New Deal legislation was enacted after 1938.
The Depression was a devastating event in America, and by regulating 
banks and the stock market the New Deal eliminated the dubious 
financial practices that had helped precipitate the Great Depression. 
However, Roosevelt's chief fiscal tool, deficit spending, proved to be 
ineffective in averting downturns in the economy.


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