introduction for new deal essay

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Course: US history   >   Unit 7

• The presidency of Herbert Hoover
• The Great Depression
• FDR and the Great Depression

The New Deal

• The New Deal was a set of domestic policies enacted under President Franklin D. Roosevelt that dramatically expanded the federal government’s role in the economy in response to the Great Depression.
• Historians commonly speak of a First New Deal (1933-1934), with the “alphabet soup” of relief, recovery, and reform agencies it created, and a Second New Deal (1935-1938) that offered further legislative reforms and created the groundwork for today’s modern social welfare system.
• It was the massive military expenditures of World War II , not the New Deal, that eventually pulled the United States out of the Great Depression.

Origins of the New Deal

• relief (for the unemployed)
• recovery (of the economy through federal spending and job creation), and
• reform (of capitalism, by means of regulatory legislation and the creation of new social welfare programs). 2 ‍  

The First New Deal (1933-1934)

The second new deal (1935-1938), the legacy of the new deal, what do you think.

• Franklin Roosevelt, " Address Accepting the Presidential Nomination at the Democratic National Convention in Chicago ," July 2, 1932. Full text courtesy The American Presidency Project, University of California, Santa Barbara.
• See David M. Kennedy and Lizabeth Cohen, The American Pageant: A History of the American People , 15th ed. (Boston: Wadsworth, 2013), 754-277.
• Eric Foner, Give Me Liberty: An American History (New York: Norton, 2005), 829. Emphasis added.
• On industrial output, see Akira Iriye, American Foreign Policy Relations (1913), 119.
• On Keynes, see Robert Skidelsky, John Maynard Keynes: 1883–1946: Economist, Philosopher, Statesman (New York: MacMillan, 2003.)
• On Roosevelt's court-packing plan, see Burt Solomon, FDR v. The Constitution: The Court-Packing Fight and the Triumph of Democracy (New York: Walker & Co., 2003).
• See David M. Kennedy, Freedom from Fear: The American People in Depression and War (New York: Oxford University Press, 1999), 131-287.

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The New Deal — A Guide to FDR’s Plan for Relief, Recovery, and Reform

The New Deal was a series of programs and policies implemented in the 1930s by President Franklin Delano Roosevelt in response to severe economic and social issues in the United States.

President Franklin D. Roosevelt in 1944. Image Source: FDR Presidential Library & Museum on Flickr .

New Deal Summary

The New Deal was a series of programs and policies implemented in the 1930s by President Franklin Delano Roosevelt — commonly referred to as FDR — in response to severe economic and social issues in the United States. Each New Deal program and policy fell into one or more of three areas, known as the “Three Rs” — Relief, Recovery, and Reform.

At the end of the Roaring Twenties, the 1929 Stock Market Crash triggered the Great Depression started when the stock market crashed in 1929. Starting in 1931, the southwestern Great Plains suffered from a severe drought, which led to massive dust storms. The area was called “The Dust Bowl” and thousands of people were forced to abandon their homes and move west. In the wake of these events, Roosevelt ran for President in 1932, promising a “New Deal” for Americans, and defeated incumbent Herbert Hoover.

Roosevelt was inaugurated on March 4, 1933. In his First Inaugural Address, he delivered the famous line, “The only thing we have to fear is fear itself.” FDR moved quickly to ease the effects of the Depression on Americans by passing New Deal legislation during “The First Hundred Days” of his Presidency.

FDR started by restoring faith in banks, which had suffered due to the stock market crash of 1929. A Bank Holiday was declared and Congress followed by passing the Emergency Banking Relief Act, which allowed the government to inspect the financial health of banks before allowing them to reopen.

The New Deal aimed to tackle unemployment by creating programs that provided job opportunities. The Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC) employed millions of Americans to work on infrastructure projects, such as building roads, bridges, and schools. Other programs, like the Tennessee Valley Authority (TVA), developed hydroelectric power plants to bring electricity to communities where none existed.

The New Deal also addressed labor relations by passing the National Labor Relations Act — also known as the (Wagner Act). It protected the rights of workers, allowing them to join unions and engage in collective bargaining. The act also established the Fair Labor Standards Act, which set a minimum wage for workers.

The New Deal programs and policies created a significant expansion of the Federal government. They also redefined the government’s role in dealing with economic and social issues. The New Deal was controversial when it was implemented, and its legacy continues to be debated by historians, economists, and others. However, the significance of the New Deal and its impact on the United States during the era leading up to World War II cannot be denied.

What did the New Deal do?

This video from the Daily Bellringer provides an overview of the New Deal and its programs. It also touches on the controversy caused by the New Deal which was caused by the expansion of the Federal Government.

New Deal Facts

• The name “New Deal” came from Franklin D. Roosevelt’s 1932 acceptance speech for the Democratic Party’s presidential nomination. In the speech, he said, “I pledge you, I pledge myself, to a new deal for the American people.”
• The New Deal was designed to deal with the economic and social issues created by the 1929 Stock Market Crash, the Great Depression, and the Dust Bow.
• On March 4, 1933, Franklin D. Roosevelt was elected President. He gave a speech on Capitol Plaza in Washington DC to 100,000 people. He said the “only thing we should be afraid of is fear itself.”
• He took action right away by calling Congress into a special session known as “The Hundred Days,” during which legislation was passed to deal with the Depression and provide economic aid to struggling Americans.
• In an effort to restore the public’s confidence in banks, FDR declared a Bank Holiday and Congress passed the Emergency Banking Relief Act.
• The New Deal dealt with unemployment by creating programs like the Civil Works Administration (CWA) and the Civilian Conservation Corps (CCC), providing jobs for millions of Americans and improving the nation’s infrastructure.
• The New Deal was followed by the Second New Deal, which included the National Labor Relations Act, the  Works Progress Administration, and the Social Security Act.
• The New Deal also included labor-related legislation, such as the National Labor Relations Act (Wagner Act) and the Fair Labor Standards Act, which gave workers the right to join unions, negotiate collectively, and established a minimum wage.
• The New Deal paved the way for the repeal of the 18th Amendment, which established Prohibition. The Beer-Wine Revenue Act of 1933 amended the Volstead Act by raising the amount of alcohol allowed to 3.2 percent and also levied a tax.
• Social programs established by the New Deal are still in effect today, including Social Security and the “Food Stamp Plan.”

New Deal AP US History (APUSH) Terms, Definitions, and FAQs

This section provides terms, definitions, and Frequently Asked Questions about the New Deal and the Second New Deal, including people, events, and programs. Also, be sure to look at our Guide to the AP US History Exam .

The New Deal was a series of policies and programs implemented by President Franklin D. Roosevelt during the 1930s in response to the Great Depression. The New Deal aimed to provide relief to the unemployed and poor, promote economic recovery, and reform the financial system. The New Deal included programs such as the Civilian Conservation Corps (CCC), the Federal Emergency Relief Administration (FERA), and the National Recovery Administration (NRA). It also created numerous agencies and programs such as the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Social Security Administration.

The second phase of the New Deal, which was enacted in 1935. The Second New Deal focused on providing economic security to Americans through the creation of Social Security and other welfare programs. It also included measures to stimulate the economy, such as the Works Progress Administration (WPA) and the National Labor Relations Act (NLRA). The Second New Deal was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

FDR’s Alphabet Soup refers to the numerous programs and agencies created during Franklin D. Roosevelt’s presidency as part of the New Deal. These initiatives, often known by their acronyms, aimed to provide relief, recovery, and reform during the Great Depression. Examples include the CCC (Civilian Conservation Corps), the TVA (Tennessee Valley Authority), and the WPA (Works Progress Administration).

The New Deal was a series of economic programs and reforms enacted by President Franklin D. Roosevelt during the Great Depression. The New Deal sought to provide relief, recovery, and reform to the American economy. It included programs such as Social Security, the National Labor Relations Act (NLRA), and the Fair Labor Standards Act (FLSA). These programs were instrumental in helping to protect workers’ rights and providing employment opportunities during the Great Depression. However, the New Deal was controversial, with some arguing it was a “raw deal” for workers and others arguing that it helped to alleviate the suffering of millions of Americans.

The three Rs of the New Deal were 1) Relief for the needy, 2) Recovery of the economy, and 3) Reform of the financial system. Each of the New Deal Programs generally fell into one of these areas. The goal of the three Rs was to keep the United States from falling into another Economic Depression.

New Deal People and Groups

Herbert Hoover — Herbert Hoover served as the 31st President of the United States from 1929 to 1933. He faced the immense challenges of the Great Depression and was criticized for his belief in limited government intervention. Despite his efforts to address the crisis, Hoover’s presidency is often associated with economic hardships and the initial response to the Depression.

John L. Lewis — An American labor leader who was instrumental in the formation of the Congress of Industrial Organizations (CIO) in 1935. He was a key figure in the Second New Deal and helped to pass the National Labor Relations Act (NLRA). He was also responsible for leading several major strikes during the Great Depression, including the United Mine Workers strike of 1934. Lewis worked to protect workers’ rights and provide employment opportunities during the Great Depression.

Franklin D. Roosevelt — Franklin D. Roosevelt was the 32nd President of the United States, serving from 1933 to 1945. He was elected to the presidency during the Great Depression, and his presidency is closely associated with the New Deal, a series of policies and programs aimed at addressing the economic crisis and promoting economic recovery. He was re-elected for an unprecedented four terms and his leadership during the Great Depression and World War II solidified the role of the Federal government in the American economy and society.

Eleanor Roosevelt — The wife of Franklin D. Roosevelt and one of the most influential First Ladies in American history. She was an advocate for civil rights and women’s rights, and she used her position to promote social reform.

FDR’s Brain Trust — A group of advisors to President Franklin D. Roosevelt who helped him develop the New Deal. They included prominent academics and intellectuals such as Raymond Moley, Rexford Tugwell, and Adolf Berle.

New Deal Democrats —  New Deal Democrats were a faction within the Democratic Party during the 1930s and 1940s that supported Franklin D. Roosevelt’s New Deal policies. These Democrats supported increasing government intervention in the economy and expanding social welfare programs.

United Mine Workers — A labor union that was formed in 1890. The union was instrumental in the formation of the Congress of Industrial Organizations (CIO) in 1935 and led several major strikes during the Great Depression, including the United Mine Workers strike of 1934.

Hundred Days Congress — The Hundred Days Congress was a special session of the United States Congress that ran from March 9 to June 16, 1933. It was called in response to the economic crisis of the Great Depression and was used to pass a number of laws known as the New Deal. During this period, President Franklin D. Roosevelt proposed a series of sweeping reforms designed to provide relief for those affected by the depression, as well as to stimulate the economy. The Hundred Days Congress passed a number of laws, including the Emergency Banking Relief Act, the Glass-Steagall Act, and the National Industrial Recovery Act.

New Deal Events

1932 Presidential Election — The 1932 Presidential Election marked a pivotal moment in American history as the nation grappled with the Great Depression. It was primarily a contest between Republican incumbent Herbert Hoover and Democratic candidate Franklin D. Roosevelt (FDR). FDR emerged victorious, promising a “New Deal” to combat the Depression and implementing a series of reforms that fundamentally reshaped the role of the federal government.

Bank Holiday — A bank holiday is a period of time during which banks are closed, usually by government order. In 1933, President Franklin D. Roosevelt declared a national bank holiday in order to address the banking crisis caused by the Great Depression. During the holiday, which lasted four days, the government examined the books of all banks and only those that were found to be sound were allowed to reopen. This action helped stabilize the banking system and restore public confidence in banks.

Fireside Chats — The Fireside Chats were a series of radio addresses given by President Franklin D. Roosevelt during his presidency. The chats were designed to provide the American people with information about the government’s policies and actions and to explain the reasoning behind them in plain language. The chats were informal and conversational in tone, and they were delivered from the White House, often in the evening, giving the impression that Roosevelt was speaking directly to the American people from the warmth and comfort of their own homes. The Fireside Chats were a powerful tool for Roosevelt to communicate with the American people, build public support for his policies and maintain public confidence during a time of economic crisis.

Great Depression — The Great Depression refers to the severe economic downturn that occurred in the United States and other countries during the 1930s. It was characterized by widespread unemployment, poverty, and a sharp decline in industrial production and trade—ultimately leading to a fundamental restructuring of the American economy and significant social and political changes.

Roosevelt Recession — A period of economic contraction that occurred during the Great Depression, starting in 1937 and lasting until 1938. It was caused by a combination of factors, including President Franklin D. Roosevelt’s decision to reduce government spending, an increase in taxes, and the Federal Reserve’s decision to raise interest rates. This resulted in a decrease in consumer spending and investment, leading to a decrease in economic activity. The Roosevelt Recession was a major setback for the New Deal and led to increased unemployment and poverty.

United Mine Workers Strike of 1934 — A major strike led by the United Mine Workers Union during the Great Depression. The strike was in response to wage cuts and other grievances. It lasted for several months and resulted in a victory for the miners, who were able to secure higher wages and better working conditions.

New Deal Programs

Agricultural Adjustment Act (1933) — A law passed by Congress in 1933 as part of the New Deal. The AAA was designed to help farmers by providing subsidies for reducing crop production and encouraging soil conservation. It also established the Agricultural Adjustment Administration (AAA), which was responsible for implementing the provisions of the act. The AAA was instrumental in helping to stabilize agricultural prices and providing economic relief to farmers during the Great Depression.

Civilian Conservation Corps (CCC) — The CCC provided employment for young men between the ages of 18 and 25, who were paid to work on conservation projects such as planting trees, building roads, and constructing dams. The CCC also provided educational opportunities for its workers, including classes in literacy, math, and vocational skills. The CCC was instrumental in helping to restore the environment and providing employment opportunities during the Great Depression.

Civil Works Administration (CWA) — An agency created by the Federal Emergency Relief Act of 1933 as part of the New Deal. The CWA was responsible for providing jobs to millions of Americans during the Great Depression. It provided employment in construction, repair, and maintenance projects such as building roads, bridges, and public buildings. The CWA was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

Emergency Banking Relief Act (1933) — A law passed by Congress in 1933 which allowed the federal government to provide emergency loans to banks in order to stabilize the banking system. The act was part of President Franklin D. Roosevelt’s New Deal and was designed to restore public confidence in the banking system. It provided for the reopening of solvent banks, the reorganization of insolvent banks, and the establishment of a Federal Deposit Insurance Corporation (FDIC) to insure deposits up to $2,500. The act was instrumental in helping to stabilize the banking system during the Great Depression and restoring public confidence in banks.

Federal Deposit Insurance Corporation (FDIC) — An independent agency of the United States government created in 1933 as part of the New Deal. The FDIC provides insurance for deposits up to a certain amount in member banks, protecting depositors from losses due to bank failures. The FDIC also regulates and supervises financial institutions to ensure that they are operating safely and soundly. It is one of the most important financial regulatory agencies in the United States and has helped to restore public confidence in the banking system.

Federal Emergency Relief Act (1933) — A law passed by Congress in 1933 as part of the New Deal. The FERA provided federal funds to states and local governments to create relief programs for the unemployed. It also established the Civil Works Administration (CWA), which was responsible for providing jobs to millions of Americans during the Great Depression. The FERA was instrumental in helping to alleviate poverty and providing employment opportunities during the Great Depression.

Federal Housing Administration (FHA) — An agency created by the National Housing Act of 1934 as part of the New Deal. The FHA was responsible for providing mortgage insurance to lenders, which allowed them to make home loans with lower down payments and easier credit requirements. This helped to increase homeownership and provided jobs to thousands of Americans during the Great Depression. The FHA helped stabilize the housing market and provide employment opportunities during the Great Depression.

Glass-Steagall Act (1933) — The Glass-Steagall Act was a law passed by Congress in 1933 as part of the New Deal. It was designed to separate commercial and investment banking, and it prohibited banks from engaging in certain types of speculative investments. The act also established the Federal Deposit Insurance Corporation (FDIC), which provided insurance for bank deposits up to a certain amount. The Glass-Steagall Act helped restore public confidence in the banking system and prevent another financial crisis.

National Industrial Recovery Act (1933) —  The National Industrial Recovery Act (NIRA) was a law passed by Congress in 1933 as part of the New Deal. It was designed to stimulate economic growth by providing government assistance to businesses, setting minimum wages and maximum hours for workers, and establishing codes of fair competition. The NIRA also established the National Recovery Administration (NRA), which was responsible for enforcing the provisions of the act. The NIRA was eventually declared unconstitutional by the Supreme Court in 1935.

The Public Works Administration (PWA) — An agency created by the National Recovery Administration of 1933 as part of the New Deal. The PWA was responsible for providing jobs to millions of Americans during the Great Depression. It provided employment in construction, repair, and maintenance projects such as building roads, bridges, and public buildings. The PWA played an important role in helping to alleviate poverty and providing employment opportunities during the Great Depression.

The Tennessee Valley Authority (TVA) — An agency created by the Tennessee Valley Authority Act of 1933 as part of the New Deal. The TVA was responsible for developing the infrastructure and resources of the Tennessee Valley region, including hydroelectric power, flood control, navigation, reforestation, and soil conservation. It also provided jobs to thousands of Americans during the Great Depression. The TVA played an important role in helping modernize the region and providing employment opportunities during the Great Depression.

Second New Deal Programs

Committee for Industrial Organizations (CIO) — An organization formed in 1935 as part of the Second New Deal. The CIO was responsible for organizing workers into unions and bargaining collectively with employers.

Fair Labor Standards Act (1938) — An act passed in 1938 as part of the Second New Deal. The Fair Labor Standards Act was responsible for establishing a minimum wage, overtime pay, and other labor standards.

National Labor Relations Act (1935) — An act passed in 1935 as part of the Second New Deal. The NLRA was responsible for protecting the rights of workers to organize and bargain collectively with their employers. It also established the National Labor Relations Board (NLRB), which was responsible for enforcing the provisions of the act.

Social Security Act (1935) — An act passed as part of the Second New Deal. The Social Security Act was responsible for providing economic security to Americans through the establishment of a federal retirement program and other welfare programs. It also provided unemployment insurance and disability benefits.

Wagner Act — Also known as the National Labor Relations Act (NLRA), it was passed in 1935 as part of the Second New Deal. The Wagner Act was responsible for protecting the rights of workers to organize and bargain collectively with their employers. It also established the National Labor Relations Board (NLRB), which was responsible for enforcing the provisions of the act.

Works Progress Administration (WPA) — An agency created by the Emergency Relief Appropriation Act of 1935 as part of the Second New Deal. The WPA was responsible for providing jobs to millions of Americans during the Great Depression. It funded a variety of projects, including construction, infrastructure development, and arts and culture programs. The WPA was instrumental in helping to stimulate the economy and providing employment opportunities during the Great Depression.

More New Deal Terms and Definitions

21st Amendment — The amendment to the U.S. Constitution that repealed the 18th Amendment and ended Prohibition. The 21st Amendment was ratified in 1933 as part of the New Deal and allowed states to regulate the sale and consumption of alcohol within their borders. It also gave states the power to collect taxes on alcohol sales, which provided a much-needed source of revenue during the Great Depression.

Boondoggling — A term coined by President Franklin D. Roosevelt to describe wasteful government spending on public works projects. The term was used to criticize the New Deal programs, which were seen as a form of government waste and corruption. Boondoggling became a popular term during the Great Depression and is still used today to refer to any wasteful or unnecessary government spending.

Tennessee River Valley — The Tennessee River Valley refers to the region in the southeastern United States encompassing parts of Tennessee, Alabama, and Kentucky. It gained prominence during the New Deal era due to the establishment of the Tennessee Valley Authority (TVA), a federal agency tasked with developing the area’s water resources, controlling flooding, and promoting economic development through hydroelectric power generation and irrigation projects.

National Parks — National Parks are protected areas designated by the federal government to preserve and showcase the country’s natural, historical, and cultural heritage. These areas, managed by the National Park Service, offer opportunities for recreation, conservation, and education. Notable examples include Yellowstone, Yosemite, and the Grand Canyon. National Parks serve as significant landmarks and contribute to the nation’s tourism industry and environmental conservation efforts.

Why is the New Deal important?

The New Deal is important to United States history for several reasons:

1. Response to the Great Depression: The New Deal was a direct response to the economic crisis of the Great Depression, which was one of the most challenging periods in American history. It represented a major shift in the role of the federal government in addressing economic issues and providing relief to citizens.

2. Economic Recovery and Relief: The New Deal implemented a range of programs and policies aimed at stabilizing the economy, creating jobs, and providing relief to those affected by the Great Depression. It helped alleviate immediate suffering and provided assistance to millions of Americans through employment, financial aid, and social welfare programs.

3. Expansion of Federal Government Power: The New Deal marked a significant expansion of the federal government’s role in regulating the economy and addressing social issues. It introduced new agencies and programs, such as the Works Progress Administration (WPA) and Social Security, that had long-lasting impacts on American society and established a precedent for increased government intervention in the economy.

4. Transformation of American Society: The New Deal’s programs had a transformative effect on American society. It brought about improvements in infrastructure, public works, and conservation projects, enhancing the nation’s physical landscape. It also introduced labor reforms, such as the right to unionize and the establishment of minimum wage standards, which aimed to improve working conditions and workers’ rights.

5. Legacy and Long-Term Impacts: Many of the programs and policies initiated during the New Deal era had lasting impacts on American society. Social Security, for example, continues to provide financial security to elderly and disabled Americans. The New Deal also shaped the political landscape, as the Democratic Party under FDR gained support from various social groups and established a coalition that would dominate American politics for decades.

• Written by Randal Rust

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History Grade 11 - Topic 2 Contextual Overview

Introduction

Like communism in Russia, American capitalism was an ideological and policy framework that was varied in both approach and application. Capitalism first started taking root as an economic system during the industrial revolution beginning in England at the end of the 18th century. Industrial techniques and machinery spread from the textile mills in Lancashire to the European continent and across the Atlantic to independent America. In the last decades of the 18th century textiles mills were set up in New England, which in turn produced the first large-scale industrial techniques on the continent.

Throughout the 19th century along the north east coast of the United States, as it was expanding territorially to the west, more and more industries were set up along with new industrial techniques (one of the most famous being the Waltham-Lowell system). [1] The new industrial capitalists became incredibly powerful figures within American society, and from the 1880s to the 1920s developed a political system that relied on the close interaction between big corporations and the state. Reminiscent of the Military-Industrial Complex (coined in 1961 in by President Dwight Eisenhower), Meyer Weinberg suggests that during the half century or so precluding the ‘Roaring Twenties’, industrialists and bankers consolidated monopolies in selected – usually heavy – industries that relied on a political patronage network to function efficiently. [2] The onset of WWI further developed this relationship, where Allied purchase of American military supplies, along with the sale of Allied bonds in America, spurred on heavy industries.

In 1917, as the USA entered the war, Weinberg notes how “Major industrial interests profited greatly. Sitting at the lever of the political economy of war, industrialists learned the potentials of capitalism when it was integrated into the governmental system.” [3] It was this early, powerful relationship that set the groundwork for industrial capitalism in the first half of the 20th century.

This article brings into view the development of capitalism in the United States of America. We pay detailed attention to the crisis of capitalism that happened as a consequence of the Great Depression. From its inception, Roosevelt’s New Deal met strong criticism as it was assumed to install a “socialist” discourse and practice. To this end, we pose a question to ask whether Roosevelt’s form of state intervention to create job opportunities, as well as the social welfare system he set could be considered socialist in its orientation, and thereby undermined the capitalist system in the USA? There are no clear-cut answers to these questions, and this forces to ask a series of questions that considers the nature and significance of capitalism in the USA.

The Nature of Capitalism in the USA

It is an age-old adage that history is written by the victors. That Western capitalist countries such as USA, Britain and France  ‘defeated’ communism of the  East which was represented by the USSR Eastern Bloc with the collapse of the Berlin Wall and the dissolution of the Soviet Union is one such example – in this we hear echoes of the ideological battle that raged during the cold war between the communist east and capitalist west [4] . This ideological positioning, however, stretches further back than the post-WWII era; since the early 20th century, the American political culture has defined itself as capitalist. Whilst, as we have seen, WWI brought government control of important sectors of the American economy, the post-WWI political culture wished for a return of the industrial powerhouse to an unregulated economy.

As President Warren Harding, elected in 1920, said soon after his election, “I have said to the people we meant to have less of government in business as well as more business in government.” [5] The post-WWI era represented a wish to return to ‘normalcy’ in American economic and political life. The result was a retreat into isolationism after the founding of the League of Nations at the Paris Peace Conference in 1920. Harding’s death in 1923 brought to power his vice-president, Calvin Coolidge, who would share similar sentiments to his predecessor, proclaiming that “the chief business of the American people is business.” [6] Like Harding, Coolidge was opposed to entering the League of Nations, and a number of isolationist policies came into effect during his tenure, such as the 1924 Immigration Act. During this period, then, capitalism in the USA resembled classical liberal economics – relying on a small government where the market would regulate itself, and where social wellbeing would increase accordingly.

The American Dream

The Immigration Act of 1924, which capped the number of immigrants into the USA to 165 000 a year (and further restricted immigration from non-Western European countries), represented a reversal on the promises of the ‘American Dream’. The notion of the American Dream during the beginning of the 20th century meant, as Sarah Churchwell explains, “the opposite of what it does today.” [7] The original American Dream was “not a dream of individual wealth; it was a dream of equality, justice and democracy for the nation.” [8] During the Cold War, this egalitarian democracy was then repurposed to become “an argument for a consumer capitalist version of democracy.” This, Churchwell notes, is where it has been frozen. [9] The American Dream of democratic equality – of racial and economic opportunities – drove the migrants during the early 20th century to the sprawling American empire. It was supported by the histories of the first migrants in the 1600s, who escaped religious persecution in Europe.

More modern myths surrounding the American Dream were driven by stories of individual success amongst migrants such as Andrew Carnegie, spurning an entire literature of ‘rags-to-riches’ stories etched into popular memory by writers such as Horacio Alger. [10] These stories emphasised that entrepreneurship and hard work could lift one out of poverty into a comfortable, middle-class existence. Thus, the American Dream was a more just, and equal society that everyone could obtain. During the 1920s, this was articulated as a function of democratic capitalism – that wealth would bring more freedom and justice to everyone. However, in practice, there were stark racial inequalities, religious intolerance and class divisions.

The 1920s Boom

The pro-business policies of the Republican presidents in the 1920s (which included removing labour laws and reducing business taxes and tariffs) provided a boom for manufacturing and consumerism in the United States. During the 1920s low taxes for the rich allowed for the investment, and subsequent boom, in manufacturing, helped by the increasingly easy credit extended to businesses and entrepreneurs. Easy credit was not only extended to businesses, but also consumers, in the form of higher purchase arrangements. By the end of the 1920s, vacuum cleaners, refrigerators and washing machines became “everyday household items” to an increasingly urbanised American consumer class. [11] However, these gains made by the consumer class were unstable – by the end of the 1920s, the high tariffs imposed on foreign imports – a part of its isolationist policies and desire to protect American industries - meant that every day Americans were paying high prices for their new goods. Furthermore, in response to these tariffs, European states also begun placing tariffs on American goods. Thus, with the shrinking buying power of American consumers, and limited opportunity to export American industrial goods, American industries began to suffer. [12]

The previous gains made by the American labour movement also suffered. The pro-business policies of the decade were a reaction to the progressive labour policies that characterised the early 20th century. Labour strikes and unions were dealt with more harshly, and wages were kept low. Wages did not increase along with productivity (add stat here), which in the long run meant that workers were unable to buy the goods they were producing. [13] The low tax rate for the rich, and the lowering of corporate taxes, meant that the wealthy, without enough investment opportunities in industries) would use their money for prospecting, the effects of which caused the Wall Street (which we shall come to soon).

USA Society in the 1920s

The 1920s, also known as the ‘Roaring Twenties,’ was a socially significant era in American, and Western, history. The increased urbanisation of the American population, coupled with the expansion of consumer goods, brought large parts of the country into contact with a range of new goods and ideas for the first time. The 1920s began with the 19th Amendment of the United States, which extended the voting franchise to all females (although it would take over 40 years for that to be extended to black females in the South).  During the First World War, as men were sent overseas to fight, women began to increasingly work in blue and white-collar jobs. With their new political and economic freedoms, they began to increasingly exhibit social freedoms. Symbolic of this freedom were the emergence of ‘flappers’ – women who “smoked in public, drank alcohol, danced at jazz clubs and practiced a sexual freedom” that “shocked the Victorian morality of their parents.” [14] This generation was chronicled by writers such as F. Scott Fitzgerald, whose novel The Side of Paradise was instrumental in describing – and in some ways spurring on – the ‘Jazz Age’, a term that Fitzgerald popularised. 

Jazz was actually an important social contribution to the 1920s. The rapid migration to the cities – and the meshing of cultures (think of black Southern rural folk mixing with immigrants from Europe) that emerged with it – created new cultural hybrids, of which the free movement that jazz took was and is symbolic of. The new upbeat music in the city was also sent out across the country via radio, which had become an increasingly common commodity in households across the USA (the first commercial radio station - Pittsburgh’s KDKA - began in 1920; three years later there were more than 500 stations in the USA. By the end of the 1920s, more than 12 million households had radios). [15] However, whilst there were many aspects of the 1920s that spoke to a freeing of society, this decade also brought some of the worst racial violence of the century (think of the Tulsa Race Riots of 1921).  The Roaring Twenties saw a return of the Klu Klux Klan, which had two million members by the middle of the 1920s. [16] The Klan symbolised the friction that developed in the post-WWI era: between the urban and rural areas, between Catholics and Protestants, and between whites and blacks. This friction would continue to  dominate cultural discourse in the 20th, and 21st centuries

The Wall Street Crash of 1929

On October 28th 1929, also known as Black Monday, the Wall Street Crash began. Over the next few days, stock prices crashed to a point that would take ‘another 20 years’ before ‘the Dow regained enough momentum to surpass the 200-point level.’ Everyone was affected, from stockbrokers to farmers to blue-collar workers; many people, with the new wealth that the 1920s brought, invested in stocks. They lost most of their wealth. The reasons for the Wall Street Crash have been a point of debate for almost a century. Initially, it was thought to be simply the result of speculation: that a panic arose amongst shareholders and as they sold, share prices crashed and investors subsequently lost their wealth. [17] Thus, the immediate concerns were towards the banking industry: savings that the public kept at banks was invested by these institutions in the stock market, which meant they were all lost when the stocks crashed. In this situation, both the banks and the public lost money. Furthermore, the public could not repay the easy loans they were given by the banks, at which point they repossessed homes. With the economic decline, most people having lost large amounts of wealth, the banks could not sell repossessed homes, and so they lost money. [18]

However, these were only symptoms of deeper problems within the American economy and society at large. One was the imbalance of wealth that came to increasingly describe the nation. During the 1920s, the gap between the wealthy and the rest continued to widen and was the result of the various ‘pro-business’ policies already outlined above. In particular, the low taxes placed on the wealthy led them to speculation, whilst a lack of government intervention in large industries led to monopolies and high prices for consumers. Furthermore, the harsh attitude towards organised labour meant that wages were kept low, which further exacerbated the wealth gap. But inequality was also felt across geographic localities: overall, urban centres were better off than rural centres, and the North more prosperous than the South. Here again government policies were partly to blame – the various administrations of the 1920s failed to support agriculture in any serious way. [19]

What followed after the crash was the Great Depression. The American government was unprepared for an economic recession, and the lack of state intervention in the following years only made the situation worse. In 1930 there were four million unemployed Americans; by 1931 this was 6 million. In 1933, the worst year of the Great Depression, 24.9% of the American public was unemployed, and that rate continued to hover above 14% until 1940. [20] Between 1923 and 1930, 5,000 banks collapsed. This had major political consequences. In a complete reversal of the policies of the previous decade, Franklin Roosevelt won the 1932 election, defeating the incumbent Republican President Hoover. [21]

The Election of Roosevelt

Democrat Franklin D. Roosevelt came into power on the back of promises of a ‘new deal’ that would address the problems brought about by the Great Depression. He has worked with a small group of advisors, called the Brain Trust, to achieve this end. The New Deal focussed on relief for the needy, recovery of the economy and reform of the economic system, specifically focusing on banks and the stock market. [22] The New Deal overtly rejected socialism but promoted government intervention to restore prosperity and reduce inequality. Roosevelt adopted 15 pieces of New Deal legislation in the first 100 days of office. [23] .

Analysis of the New Deal

The first New Deal occurred from 1993 to 1935. In an effort to provide relief for the most needy, soup kitchens were established along with temporary housing. Funding was given by the Federal Emergency Relief Administration. In an effort to spur on economic recovery, several recovery programmes were implemented, amongst them the Civil Works Administration (CWA) - a job creation program. In addition, the Civilian Conservation Corps (CCC) provided thousands of men with jobs at national parks, public lands and other conservation projects. Within the recovery programmes there was the Agricultural Adjustment Act (AAA) which subsidized farmers to reduce their production and destroy their crops and livestock, so that supply could be reduced to increase the lowering demand in an effort to have better prices. In the reforming the economic system, Roosevelt implemented an emergency Banking Relief Act which stipulated that only banks deemed to be financially sound would be permitted to reopen their doors. To increase confidence, the government secured guaranteed deposits of investors in an effort to curb hoarding. [24]

The New Deal brought criticism from different parts of society, especially the wealthy and conservatives who were opposed to high taxes and the nascent social security network just being set up. [25] Furthermore, Republicans feared that the government was spending more money than it could afford, which would result in even higher taxes and a bloated bureaucracy. On the other hand, some left-wing groups criticised the New Deal for not being radical, arguing for the redistribution of wealth and the setting of a national minimum wage [26] . In addition, communists in America perceived Roosevelt as an autocratic leader. Within the Democratic Party there was also opposition, particularly from  representatives of Southern States who refused to see African Americans as political and social equals.

Assessment of the New Deal

For some, the advent of the New Deal threatened the cherished free market. However, one could argue that it prevented a potential revolution, driven by the unemployed and hungry. President Roosevelt restored confidence in liberal democracy. The New Deal removed the dangers of an unregulated economy without abandoning capitalism in America. [27] While the New Deal did not end the Great Depression, it brought back dignity to the American people.  However, the massive intervention of the state in the economy contradicted the belief of many capitalists. The corporatist state that the New Deal created (and which, to be accurate, was the state of capitalism during the late 19th and early 20th century) a new relationship between labour and business. [28] Labour provided a stable workforce whereas the government made sure to regulate markets when they became unstable. Conservative capitalists viewed this as socialism.

Outbreak of the World War II and the economic recovery of the USA

In 1937 there was a recession, which came to be known as the Roosevelt Recession. It was caused by cut backs on the New Deal reforms. During the mid-1930s, Hitler was on an aggressive path which eventually caused World War II. During this time, Roosevelt saw that the USSR was hoping to open up trade. In recognition of this, the USA employed three Acts so they would remain neutral. The first Act was stopping any shipment of US weapons to any countries who were involved in the war. The second Act was US loans to any countries who were involved in the war. [29] Lastly, the USA forbid any US citizen to travel on ships which belonged to any country which was at war. However, the US allowed food sales to countries at war on a ‘cash and carry’ basis. Due to improved economic conditions caused by an increase in industrial production, the USA was prepared for possible involvement in WW2. The US did this by providing their allies with war materials. In addition, the USA started drafting men into the army. In 1941, the USA officially entered WW2 where they fought Japan and Germany. This was a time where there was more prosperity in the US as government increased their spending.  The economic recovery of the USA was aided by the demand of weapons and in turn of raw materials to revitalise industry in the States. [30] By being involved in the war, the United States government invested significant capital into industries and men for the War. This was the beginning of the military-industrial complex which describes the close relationship between a nations military and its defines industry which supply it which together have a vested interest in influencing public policy. [31]

Impacts of and responses to the crises of capitalism in the USA in other parts of the world, such as Germany and Japan

The Great Depression spread throughout the world. When the USA recalled their loans, bank failures occurred across Europe. [32] Japan and Germany responded to this with militarist governments. Germany suffered more than any other nation as a result of the recall of US loans, which caused its economy to collapse. Unemployment rocketed, poverty soared and Germans became desperate. [33] Hitler quickly set about dismantling German democracy. The American and British governments developed welfare systems to aid their public. The 1929 New York Stock Exchange crash and the failure of important European banks plunged the entire world into an economic depression. Japan was hit especially hard. With practically no natural resources, the nation had to import oil, iron, steel, and other commodities to keep its industry and military forces alive. [34] The USSR survived and escaped the depression because of the Stalinist ‘Socialism in One Country,’ which favoured independent industrialisation, not reliant on the industries of other nations. Countries that exported raw products to the USA – such as Latin American countries, which exported farm produce - were affected the most.

Conclusion: The cyclical nature of capitalism

Capitalism typically displays a boom and bust cycle. Booms are defined as periods of economic growth categorized by increased spending through credit. Increased spending also encourages economic growth though raising stock market indexes [35] . However, in turn, increased price indexes lead to reduced investment and consumption spending due to high prices. Reduced investment spending and consumption are components of the bust part of the economic cycle as economic activity declines. The cycle reinforces itself as the government intervenes with fiscal policies that are meant to promote economic growth again. [36] In the context of the US, the 1920 economic boom followed directly by the Wall Street Crash of 1929 shows an example of this boom-bust cycle.

This content was originally produced for the SAHO classroom by Sebastian Moronell, Ayabulela Ntwakumba, Simone van der Colff & Thandile Xesi

[1] Allan MacDonald. "Lowell: A Commercial Utopia." The New England Quarterly 10, no. 1 (1937): 37-62.

[2] Meyer Weinberg. A Short History of American Capitalism. Amherst, MA: New History Press, 2003.

[4] Ost, David. The defeat of solidarity. Cornell University Press, 2018.

[5] Encyclopaedia Britannica. Warren G. Harding | Facts, Accomplishments, & Biography. [online] Available at: < https://www.britannica.com/biography/Warren-G-Harding&gt ; [Accessed 30 March 2021].

[6] Encyclopaedia Britannica. Calvin Coolidge | Biography, Facts, & Quotes. [online] Available at: < https://www.britannica.com/biography/Calvin-Coolidge&gt ; [Accessed 30 March 2021].

[7] Diamond, A. The Original Meanings of the “American Dream” and “America First” Were Starkly Different from How We Use Them Today. [online] Smithsonian Magazine. Available at: < https://www.smithsonianmag.com/history/behold-america-american-dream-sl… ; [Accessed 30 March 2021].

[10] Wills, Matthew, 2020. The Creepy Backstory to Horatio Alger's Bootstrap Capitalism | JSTOR Daily. [online] JSTOR Daily. Available at: < https://daily.jstor.org/the-creepy-backstory-to-horatio-algers-bootstra… ; [Accessed 31 March 2021].

[11] The Balance. n.d. The Economy in the 1920s and What Caused the Great Depression. [online] Available at: < https://www.thebalance.com/roaring-twenties-4060511&gt ; [Accessed 31 March 2021].

[12] Pettinger, T., n.d. What caused the Wall Street Crash of 1929? - Economics Help. [online] Economics Help. Available at: < https://www.economicshelp.org/blog/76/economics/wall-street-crash-1929/… ; [Accessed 6 April 2021].

[14] HISTORY. n.d. Flappers. [online] Available at: < https://www.history.com/topics/roaring-twenties/flappers&gt ; [Accessed 31 March 2021].

[15] HISTORY. n.d. The Roaring Twenties. [online] Available at: < https://www.history.com/topics/roaring-twenties/roaring-twenties-histor… ; [Accessed 1 April 2021].

[17]   Pettinger, T., n.d. What caused the Wall Street Crash of 1929? - Economics Help. [online] Economics Help. Available at: < https://www.economicshelp.org/blog/76/economics/wall-street-crash-1929/… ; [Accessed 6 April 2021].

[19] The Balance. n.d. The Economy in the 1920s and What Caused the Great Depression. [online] Available at: < https://www.thebalance.com/roaring-twenties-4060511&gt ; [Accessed 31 March 2021].

[20] The Balance. 2021. Compare Today's Unemployment with the Past. [online] Available at: < https://www.thebalance.com/unemployment-rate-by-year-3305506#:~:text=Th… ; [Accessed 1 April 2021].

[21] Douglas F. Dowd, "A Comparative Analysis of Economic Development in the American West and South," Journal of Economic History, 16 (December 1956), p. 569

[22] Schlesiinger, Arthur M. The Coming of the New Deal: The Age of Roosevelt, 1933-1935. Vol. 2. Houghton Mifflin Harcourt, 2003.

[23] Wallis, John Joseph, Price V. Fishback, and Shawn Kantor. “11. Politics, Relief, and Reform: Roosevelt’s Efforts to Control Corruption and Political Manipulation during the New Deal.” In Corruption and Reform, pp. 343-372. University of Chicago Press, 2007.

[24] Terms 1 and 2 Grade 11 Topic 2 “Capitalism in the US 1900 to 1940” – Study Notes. This can be found at  www.e-classroom.co.za . (Accessed 30 March 2021). 

[25] Zelizer, Julian E. “The Forgotten Legacy of the New Deal: Fiscal Conservatism and the Roosevelt Administration, 11933-1938” Presidential Studies Quartely 30, no. 2 (2000): 332-359.

[26] Bellus, Jewel. “Old and New Left Reappraisals of the New Deal  and Roosevelts Presidency.” Presidential Studies Quarterly 9, no. 3 (1979): 243-266.

[27]   Olson, James Stuart. Saving Capitalism, The Reconstruction Finance Corporation and the New Deal, 1933-1940. Princeton University Press, 2017.

[28] Stors, Landon RY. Civilizing Capitalism: The National Consumers’ League, Women’s Activism, and Labor Standards in the New Deal Era. University of North Carolina Press, 2003.

[29] Heinrichs, Waldo H. Threshold of War: Franklin D. Roosevelt and American Entry into World War II. Oxford University Press on Demand, 1988.

[30] Tassava, Christopher. “The American Economy during World War II”. EH.Net Encyclopedia

[32]   Moessner, Richhild, and William A. Allen. Banking crises and the international monetary system in the Great Depression and now.”  (2010)

[33] http://teacher.scholastic.com/pearl/timeline/time4.htm#:~:text=The%2019… .

• Diamond, A. The Original Meanings of the “American Dream” and “America First” Were Starkly Different from How We Use Them Today. [online] Smithsonian Magazine. Available at: < https://www.smithsonianmag.com/history/behold-america-american-dream-slogan-book-sarah-churchwell-180970311/ > [Accessed 30 March 2021].
• Encyclopaedia Britannica. Warren G. Harding | Facts, Accomplishments, & Biography. [online] Available at: <https://www.britannica.com/biography/Warren-G-Harding> [Accessed 30 March 2021].
• Encyclopaedia Britannica. Calvin Coolidge | Biography, Facts, & Quotes. [online] Available at: <https://www.britannica.com/biography/Calvin-Coolidge> [Accessed 30 March 2021].
• Gertner, N. and Heriot, G., n.d. Interpretation: The Nineteenth Amendment | The National Constitution Center. [online] constitutioncenter.org. Available at: <https://constitutioncenter.org/interactive-constitution/interpretation/amendment-xix/interps/145> [Accessed 31 March 2021].
• HISTORY. n.d. The Roaring Twenties. [online] Available at: <https://www.history.com/topics/roaring-twenties/roaring-twenties-history> [Accessed 1 April 2021].
• HISTORY. n.d. Flappers. [online] Available at: <https://www.history.com/topics/roaring-twenties/flappers> [Accessed 31 March 2021].
• http://teacher.scholastic.com/pearl/timeline/time4.htm#:~:text=The%201929%20New%20York%20Stock,industry%20and%20military%20forces%20alive.
• MacDonald, Allan. "Lowell: A Commercial Utopia." The New England Quarterly 10, no. 1 (1937): 37-62.
• Ost, David. The defeat of solidarity. Cornell University Press, 2018.
• Pettinger, T., n.d. What caused the Wall Street Crash of 1929? - Economics Help. [online] Economics Help. Available at: <https://www.economicshelp.org/blog/76/economics/wall-street-crash-1929/> [Accessed 6 April 2021].
• Tassava, Christopher. “The American Economy during World War II”. EH.Net Encyclopedia, edited by Robert Whaples. February 10, 2008. URL http://eh.net/encyclopedia/the-american-economy-during-world-war-ii/ [Accessed on 30 March 2021]
• Terms 1 and 2 Grade 11 Topic 2 “Capitalism in the US 1900 to 1940” – Study Notes. This can be found at  www.e-classroom.co.za . (Accessed 30 March 2021). 
• The Balance. n.d. The Economy in the 1920s and What Caused the Great Depression. [online] Available at: <https://www.thebalance.com/roaring-twenties-4060511> [Accessed 31 March 2021].
• The Balance. 2021. Compare Today's Unemployment with the Past. [online] Available at: <https://www.thebalance.com/unemployment-rate-by-year-3305506#:~:text=The%20highest%20rate%20of%20U.S.,1982%20when%20it%20reached%2010.1%25.&text=The%20lowest%20unemployment%20rate%20was%201.2%25%20in%201944.> [Accessed 1 April 2021].
• Tulsa Historical Society & Museum. n.d. 1921 Tulsa Race Massacre - Tulsa Historical Society & Museum. [online] Available at: <https://www.tulsahistory.org/exhibit/1921-tulsa-race-massacre/> [Accessed 1 April 2021].
• Weinberg, Meyer. A Short History of American Capitalism. Amherst, MA: New History Press, 2003.
• Wills, Matthew, 2020. The Creepy Backstory to Horatio Alger's Bootstrap Capitalism | JSTOR Daily. [online] JSTOR Daily. Available at: <https://daily.jstor.org/the-creepy-backstory-to-horatio-algers-bootstrap-capitalism/> [Accessed 31 March 2021].

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Franklin D. Roosevelt and the New Deal

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A watershed moment in American history

New Deal is the name given to the policies of the American president Franklin D. Roosevelt during the 1930s. Elected in 1932, at a time of great economic depression, he sought to alleviate distress by using the inherent powers of government, and the New Deal era come to be seen as a one of the classic watersheds in United States history.

Historians and commentators, like Roosevelt's contemporaries, have been preoccupied with problems of definition presented by complex and varied policies. The present essay focuses on the mind of Roosevelt, and suggests that a key to his political philosophy may be found in the pragmatic and progressive traditions. Its findings may be controversial, but the New Deal is capable of widely differing interpretations. This pamphlet represents one stage in what is still an active debate.

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Roosevelt’s New Deal, Essay Example

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President Franklin Delano Roosevelt implemented a series of economic reforms between 1933 and 1936 that are collectively known as the New Deal Some historians identify the New Deal as having two distinct stages with the first addressing major industry and the latter dealing with society as a whole. These changes were made in direct response to the hardships endured during the Great Depression and were developed to spearhead the recovery of the American people with various forms of financial relief. A limited welfare state was thus created in the United States with protective measures like work hour restrictions, child labor laws, and the promotion of worker unions. These and other aspects of the movement remain useful today as the problems encountered without such protective measures are easily observable in other countries like Bangladesh where even textile workers may risk their lives on a daily basis.

While the New Deal may not have produced immediate economic benefits, as is demonstrated by the immediate downturn in 1937-38, it did result in many important developments within the American political landscape. The Democratic Party rallied around Roosevelt’s liberal motivations while the Republicans focused on conservative perspectives that opposed such widespread government interference, setting the basis for party lines that is still apparent in virtually all political dealings within the country. The New Deal also acted as an inspiration for Johnson’s Great Society, which would address many important issues regarding equality. Roosevelt’s programs were accused of radicalism by conservatives, but could only be identified as being radical when contrasted with the equally extreme views that arose within Republican groups. The New Deal may have been an example of partisan politics, but it was not radical.

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History essay on the new deal

How successful was the new deal?

The new deal of the 1930s was seen as the radical action needed during the depression to help American people and the American economy. However, some people criticised it for not being radical enough as it didn’t help all Americans. Roosevelt started off by introducing 15 acts in his first 100 days including the alphabet agencies and the beer act. These acts and agencies were designed to help certain groups of people but this meant that some were left out. This meant that Roosevelt was forced into producing the second new deal which helped Americans in the late 1930s.

The first couple of acts were very important, first there was the emergency banking act which closed all banks for several days in which time they were inspected and only those that were properly managed were allowed to open again. He then introduced the economy act which meant that the pay of everyone in the government was slashed by 15% and budgets were cut by 25% which altogether saved $1 billion. In addition to this he added the beer act which legalised the manufacture and selling of alcohol, therefore prohibition was ended. Roosevelt then goes on to introduce the 13 acts that make up the alphabet agencies.

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The alphabet agencies were a fundamental part of the first new deal as they helped more people than any other acts. One of the main agencies was the PWA which was a long term agency that lasted until 1939 and provided jobs for millions of people. It also created public works of lasting value for example it created 70% of the nation’s schools a third of its hospitals and 50 airports. Although it didn’t employ any unskilled workers and Ikes was slow to put the money back into the economy. The CCC and the CWA also provided jobs for millions of people. The CCC employed more than 3 million people but they were all men so women didn’t benefit. The CWA were just a short term agency that was very successful as it employed 4.2 million people over the winter of 1933/34 but it was very expensive.

FDR also created two agencies to help the farmers as they were one of the heaviest hit by the depression. First he created the AAA who bought surplus crops and destroyed them or shipped them overseas. It also paid farmers compensation to reduce production or remove land from farming. But wasted crops and livestock resulted in huge moral outcry because there were millions of people starving and small time farmers did not benefit. System was voluntary and financial compensation was provided on the basis of number of acres not farmed rather than individual needs. He then created the FCA which provided credit at low interest rates for farmers so they could keep their farms. This meant that the farmers could keep their farms and could afford to work or expand.

In addition to this Roosevelt introduced the NRA which was designed to help workers. They made a limit of a 40 hour week for clerical workers and a 36 hour week for industrial workers. They also set a minimum wage of 40 cents an hour and abolished child labour. It also gave workers the right to join trade unions that had been previously discriminated against which allowed for collective bargaining. 23 million people ended up working under the NRA and those companies who didn’t join were seen as selfish and unpatriotic.

Finally Roosevelt created the TVA that was introduced to develop the Tennessee Valley which cut through 7 states and was poverty stricken. They built 33 dams to control flooding of the river and produce electricity. There were also measures taken to improve the quality of the soil so that it could be used for farming again and a 650 mile waterway to link the river systems. Thousands of jobs were created with the building if the dams and the TVA became the biggest producer of electricity in America meaning many industries moved into that area creating jobs for the unemployed. The dams still provide some of America with electricity today which shows they were a success.

There was then a second new deal which was introduced to silence FDR’s critics and to make sure that he got re-elected. This second new deal was more radical than the first and helped many people that really needed it. Firstly he launched the Wagner act which helped workers by giving them legal rights to join unions. He then introduced the social security act which helped the elderly, disabled and unemployed due to sickness. This introduced state pensions, and disability benefit was paid by federal and state governments. But the pensions weren’t started until 1940 and the funding came from increased taxing. He also introduced the rural electrification administration and the re-settlement administration which were introduced to help farmers. It helped them by building systems transmission lines to enable all farms to have electricity. But the re-settlement administration only relocated 4,441 people instead of its aim of 500,000. In addition to this he introduced the works progress administration which employed 8.5 million people and provided many people with entertainment through theatres and circuses.

Overall the new deal was partly successful as there were many Americans that didn’t benefit from the new deal but there are also many Americans that did benefit from the changes and agencies. The new deal is especially successful if you compare it to what Hoover did for the American people. However there were still many people that were unemployed and by 1937 industrial production was down 33%, wages were down 35% and national income was down 13%. This shows that the new deal didn’t help many people although a large part of this is due to cut in public spending.

Ross Goodman-Brown                      

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• Subject History

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(page 1) p. 1 Introduction

• Published: April 2008
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The Great Depression caused a profound crisis in the US. The world that broke down in 1929 broke down for reasons that had been predicted before. The Introduction gives a brief analysis of why the Great Depression occurred. The failure to prepare the damage of the initial crisis in 1929 owed to errors of judgement and action, and the misery that followed could have been lessened. Roosevelt and the Democratic Congress of the New Deal era succeeded by correcting these errors (they also added errors of their own). This heralded an era of pragmatic experimentation, which became the basis for a generation's faith in the new American way, in both the United States and beyond.

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Home — Essay Samples — History — The New Deal — The Great Depression and the New Deal: An Analysis

The Great Depression and The New Deal: an Analysis

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Anthem, CommonSpirit reach new five-year deal

COLORADO SPRINGS, Colo. (KKTV) - One of the largest health insurance companies has entered a new five-year agreement with CommonSpirit Health, giving thousands of local patients renewed, in-network access to doctors and hospitals across Colorado.

Anthem Blue Cross Blue Shield terminated its agreement with Common Spirit on May 1, 2024. Anthem told 11 News it’s about affordability. CommonSpirit said it’s all about preserving their level of care.

Many Coloradans were left in limbo waiting to see if the two companies would reach a new deal. It’s something the two have been discussing for months.

In a joint news release Friday night, CommonSpirit Health and Anthem announced customers will now have in-network access to providers and care sites through April 2029. CommonSpirit owns multiple hospitals across Colorado, including St. Francis and Penrose in Colorado Springs.

Both companies said the new agreement also means that any health care services that patients received at CommonSpirit facilities since May 1 will be covered at in-network benefit levels.

These quotes from leaders at each organization were provided as part of the joint announcement:

“I’m proud that both organizations stayed at the negotiating table, working hard to reach an agreement to provide Coloradans’ access to affordable health care at CommonSpirit,” said Anthem Colorado President Matt Pickett. “Importantly, the long-term nature of our agreement ensures care provider network stability for our members and cost-predictability for Colorado employers for years to come.”

“Our patients are at the heart of all we do, and through our partnership with Anthem, we will ensure our patients continue to receive compassionate care from the doctors and nurses they know and trust,” said Andrew Gaasch, Executive Vice President & Chief Financial Officer of the CommonSpirit Mountain Region. “Our goal has always been to ensure we can meet the needs of our patients while continuing to provide essential services to our communities today and into the future.”

Copyright 2024 KKTV. All rights reserved.

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Guest Essay

The West Doesn’t Understand How Much Russia Has Changed

By Alexander Gabuev

Mr. Gabuev, the director of the Carnegie Russia Eurasia Center, wrote from Berlin.

Vladimir Putin’s trip to Beijing this week, where he will meet with Xi Jinping and top Chinese officials, is another clear demonstration of the current closeness between Russia and China.

Yet many in the West still want to believe that their alliance is an aberration, driven by Mr. Putin’s emotional anti-Americanism and his toxic fixation on Ukraine. Once Mr. Putin and his dark obsessions are out of the picture, the thinking goes , Moscow will seek to rebuild ties with the West — not least because the bonds between Russia and China are shallow, while the country has centuries of economic and cultural dependence on Europe.

This wishful view, however appealing, overlooks the transformation of Russia’s economy and society. Never since the fall of the Soviet Union has Russia been so distant from Europe, and never in its entire history has it been so entwined with China. The truth is that after two years of war in Ukraine and painful Western sanctions, it’s not just Mr. Putin who needs China — Russia does, too.

China has emerged as Russia’s single most important partner, providing a lifeline not only for Mr. Putin’s war machine but also for the entire embattled economy. In 2023, Russia’s trade with China hit a record $240.1 billion, up by more than 60 percent from prewar levels, as China accounted for 30 percent of Russia’s exports and nearly 40 percent of its imports.

Before the war, Russia’s trade with the European Union was double that with China; now it’s less than half. The Chinese yuan, not the dollar or the euro, is now the main currency used for trade between the two countries, making it the most traded currency on the Moscow stock exchange and the go-to instrument for savings.

This economic dependence is filtering into everyday life. Chinese products are ubiquitous and over half of the million cars sold in Russia last year were made in China. Tellingly, the top six foreign car brands in Russia are now all Chinese, thanks to the exodus of once dominant Western companies. It’s a similar story in the smartphone market, where China’s Xiaomi and Tecno have eclipsed Apple and Samsung, and with home appliances and many other everyday items.

These shifts are tectonic. Even in czarist times, Russia shipped its commodities to Europe and relied on imports from the West of manufactured goods. Russia’s oligarchs, blacklisted by most Western countries, have had to adapt to the new reality. Last month, the businessman Vladimir Potanin, whose fortune is estimated at $23.7 billion, announced that his copper and nickel empire would reorient toward China, including by moving production facilities into the country. “If we’re more integrated into the Chinese economy,” he said, “we’ll be more protected.”

From the economy, education follows. Members of the Russian elite are scrambling to find Mandarin tutors for their kids, and some of my Russian contacts are thinking about sending their children to universities in Hong Kong or mainland China now that Western universities are much harder to reach. This development is more than anecdotal. Last year, as China opened up after the pandemic, 12,000 Russian students went to study there — nearly four times as many than to the United States.

This reorientation from West to East is also visible among the middle class, most notably in travel. There are now, for example, five flights a day connecting Moscow and Beijing in under eight hours, with a return ticket costing about $500. By contrast, getting to Berlin — one of many frequent European weekend destinations for middle-class Russians before the war — can now take an entire day and cost up to twice as much.

What’s more, European cities are being replaced as Russian tourist destinations by Dubai, Baku in Azerbaijan and Istanbul, while business trips are increasingly to China, Central Asia or the Gulf . Locked out of much of the West, which scrapped direct flights to Russia and significantly reduced the availability of visas for Russians, middle-class Russians are going elsewhere.

Intellectuals are turning toward China, too. Russian scientists are beginning to work with and for Chinese companies, especially in fields such as space exploration, artificial intelligence and biotech . Chinese cultural influence is also growing inside Russia. With Western writers like Stephen King and Neil Gaiman withdrawing the rights to publish their work in Russia, publishers are expanding their rosters of Chinese works. Supported by lavish grants for translators from the Chinese government, this effort is set to bring about a boom in Chinese books.

Chinese culture will not replace Western culture as Russians’ main reference point any time soon. But a profound change has taken place. From the other side of the Iron Curtain, Europe was seen as a beacon of human rights, prosperity and technological development, a space that many Soviet citizens aspired to be part of.

Now a growing number of educated Russians, on top of feeling bitterness toward Europe for its punitive sanctions, see China as a technologically advanced and economically superior power to which Russia is ever more connected. With no easy way back to normal ties with the West, that’s unlikely to change anytime soon.

In his dystopian novel “ Day of the Oprichnik ,” Vladimir Sorokin describes a deeply anti-Western Russia of 2028 that survives on Chinese technology while cosplaying the medieval brutality of Ivan the Terrible’s era. With every passing day, this unsettling and foresighted novel — published in 2006 as a warning to Russia about the direction of travel under Mr. Putin — reads more and more like the news.

Alexander Gabuev ( @AlexGabuev ) is the director of the Carnegie Russia Eurasia Center in Berlin.

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Roosevelt’s New Deal and the Great Depression Research Paper

Introduction, prerequisites of the new deal implementation, the essence of the new deal, new deal analysis, the new deal in the context of the great depression.

After the inauguration in 1933, Franklin D. Roosevelt urgently took the course for the new deal, that was aimed to overcome the consequences of the Great Depression. It was the series of economic and social programs that were planned for the period 1933 to 1936. The First New Deal, which took place in 1933, included the banking reforms (including the reformation of the Banking Law), the emergency relief programs, work relief plans, agricultural reforms, and industrial reform. The plan also included the refuse from the gold standard.

A “Second New Deal”, that took place in 1935-1936 included labor union maintenance. The necessity to support the society, and expand the Security reasoned the issuing of the Social Security act, the promotion of the programs for farmers, including migrant workers. The New Deal ended with the beginning of World War Two when the other national priorities appeared.

It should be emphasized, that the New Deal provided the essential shift in external and internal politics in the US. The changes also touched upon the price regulation and the control of agricultural production. The New Deal is regarded to be the beginning of the further complex social programs and wider acceptance of trade unions.

The crash of the stock market in 1929 first was regarded as the beginning of the end, as it provided complex problems in the economy of the United States but it is not considered as the only cause of the Great Depression. The stock market crash just made the holes in the superficial prosperity of the United States more obvious. As the causes of the downfall in the economy were complicated, the solution to the multifaceted scenario confronted by the Americans was also complex enough. (Barnanke 2004).

American people sought to search for the reasons and responsible elements for the economic collapse. While one part of the American citizens regarded President Hoover as the major player in economic downfall, others blamed bankers, businesspersons, and brokers- “the three B’s”- as responsible for the collapse. However, a group of people or a single individual cannot be accused of the reasons for the Great Depression. To understand the mechanism of the New Deal by President Roosevelt and its impact on the economy, it is pertinent to highlight the circumstances prevailing at that time as well as the economic conditions of that era.

A major phenomenon existing at that time was the unequal distribution of income. Despite the continuous rise in wages, there was an inequality in income. The incredible accumulation of wealth in the hands of just a few individuals eventually meant that sustained economic prosperity was much reliant upon lavish expenditures and the high investment of the wealthy group. As such, during economic downfall and the market crash resulted in a fall in investment and spending.

On average two banks closed every day during 1923 1929. Still, up to the crash of the stock market in 1929, the country’s inevitable affluence supported and covered the potentially destructive flaws in the banking system of the United States of America. (Barnanke 2004).

The nation was transformed into a creditor nation from a debtor nation as a consequence of World War I. The victorious Allies as well as the defeated Powers, in the outcomes of the war, owed more money to the United States as compared to foreign countries. The Republican government during the 1920s persisted on gold bullion payments but the supply of gold in the world was limited. Moreover, at the end of the 1920s, most of the gold supply in the world was controlled by the United States. However, high tariffs along with protectionism resulted in keeping foreign goods away from U.S.

The unemployment rate increased from 4% to 25% from 1929 – 1933. The manufacturing and production rates were reduced by approximately a third. The falling of the prices caused the deflation of the currency rates that complicated the repayments of debts. The crisis mainly touched the farming, agriculture, and industry, while the white-collar service sectors were not so severely touched.

The New Deal approach essentially increased the involvement of the government in economic affairs. The Depression aggravated during the months before Roosevelt’s inauguration. Farm foreclosures, bank failures, and factory closings increased. Moreover, the level of unemployment soared. As such President, Roosevelt confronted the greatest economic crisis in the history of the United States since the Civil War.

A ‘New Deal’, pledged by Franklin D. Roosevelt in his election campaign and the inaugural address, focused on alleviating emergencies and supporting the recovery of the economy. Roosevelt provided swift actions to implement his New Deal. He closed banks for some time to end panic in the depositors. He collaborated with a special Congress session in the phase of the first 100 days. The purpose was to pass recovery legislation for establishing alphabet agencies like ‘Agricultural Adjustment Administration (AAA) and ‘Civilian Conservation Corps (CCC). The main intention was to create employment opportunities, especially for the younger generation. Different other agencies supported labor and businesses. Moreover, they also provided security to depositors of banks, subsidized payments of a farm as well as home mortgages, and ensured regulation of the stock market. That was aimed to support and increase the overall employment level. The measures adopted and policies implemented under the New Deal approach revived the confidence in the nation’s economy. Direct relief saved people from starvation. However, the measures in New Deal involved government heavily in a direct way especially in the domain of economic and social life. The minimum working time standards were established, and the minimum wage was fixed. (Smilely, 2003).

Most of the significant institutions and laws that shape the basis of the U.S. contemporary financial system take their origin in the period of the New Deal. Legislation of the New Deal extended the authority of the Federal government in agriculture, public welfare, and banking.

During the 1930s, the American economy reached its bottom and experienced the stage of depression with unemployment soaring. A common fear existed that the economic and social basis of American society was facing a breakdown. Belief in the capitalist market was shattered as millions of unemployed people search for desperate ways to ensure their families’ subsistence.

President Roosevelt, as per his pledge to restore economic activities and transform the economy from Depression to prosperity embarked on a variety of exceptional experiments in the year 1933. These exclusive experiments in the cover of the ‘New Deal’ altered the relationships between the economy, businesses, banks, and the government. It also changed the nature of coordination among local, state, and federal governments.

The focus of the New Deal was the payment of billions of dollars for the funds for supporting work relief jobs. Moreover, it is also intended to provide relief to American citizens throughout the nation without any discrimination. For the first time in the history of the United States, the Federal government intervened in the economic activities by assuming the responsibilities of supporting the poor and unemployed. The New Deal by President Roosevelt revolutionized the economy. It also supported welfare spending in the short term as well as long term. At the most fundamental level, the relief programs of the New Deal accomplished the basic aim of providing seriously-needed income to individuals with no apparent prospects and opportunities for private employment.

As it was emphasized, Roosevelt’s New Deal may be segregated into two parts; the ‘First’ New Deal; and the ‘Second’ New Deal. The key aim of the ‘First’ New Deal was restoring the economy from the top. In 1933 ‘The Agricultural Adjustment Act’ entered its first phase, which acknowledged the long-sustained principle that low level of prices in the farm was the consequence of overproduction. Therefore, the government searched for ways to stimulate high prices by making payments to produce at low level.

The period of the Second New Deal ranges from 1935 to 1940 and focused to restore the economy at the bottom line. It endeavored to end the Depression through distinctive ways including spending at the base of the economy where funding by the government attempts for transforming non-consumers to become consumers again. ‘The Works Progress Administration’ was an enormous program of federal jobs aimed to employ unemployed breadwinners to strengthen the comfort and welfare of their families along with stimulating consumer demand. (Powell, 2004).

The Social Security Act in 1935 established and ensured a moderate worker-funded pension system guaranteed by the Federal government. Social Security proved to be successful in performing as a safety net for elderly workers and stimulating consumer demand. The impact of the National Labor Relations Act in the year 1935 was massive as it guaranteed the collective negotiation rights for American workers. A significant instance of the ‘Second’ New Deal was its endeavor to restore and reinstate the economy of the United States from the bottom up.

Roosevelt is regarded by most historians and experts as a pragmatic politician but not as an idealist or intellectual. New Deal served as a precedent for the Federal government to assume a primary role in the social and economic affairs of the nation. (Sowell, 2007) The New Deal catalyzed the extension of activities by trade unions in different industries including rubber, automobiles, and steel. Comprehensive programs and institutions that seem indispensable in the modern economy were established.

The Agriculture Adjustment Act was created to support American farmers by sustaining prices and restricting overproduction. ‘Civilian Conservation Corps’ was designed and operated under the supervision and control of the army. The Securities and Exchange Commission was aimed to supervise the affairs related to the stock market. The Federal Deposit Insurance Corporation’s major objective was to guarantee to pay out the deposits at banks. The Social Security System was established to provide pensions to old-age citizens based on their prior contributions.

FDR’s New Deal had practically supported improving the general standards of lives suffered from the disastrous effects of the Great Depression. Further the programs of the New Deal served as a precedent, particularly for the federal government to assume a primary role in the social and economic affairs of the nation.

The New Deal regulations and principles took their origin from the ideas, offered only in the 20th century. All these ideas and the entire program were innovative. However, some historians consider6, that some principles (like Antimonopoly traditions) were innovated by Thomas Jefferson and Andrew Jackson. It is argued, that monopolies were a negative financial impact, as they produced waste and undermined competence. However, the anti-monopoly commission never had essential power during the implementation of the New Deal course. The National Recovery administration took the ideas from Woodrow Wilson’s administration policies. This agency advocated the techniques, that were used during World War I. Nevertheless, the rest (and the most) of the ideas were first originated in the 1920s: these are the efforts to harmonize the financial system by creating cooperative relations, and the principles of banking system regulation.

Roosevelt created the system that is currently called the Brain Trust: it is a group of advisers that are claimed to assist in the recovery efforts. The solutions, taken by these advisers are generally more extensive for the economic regulation.

It is necessary to emphasize, that the New Deal also faced some conservative opposition. The opposition groups were predominantly formed by the democrats and called the Old Right. Though, there were also the Republicans.

As it has been emphasized, the starting point of the Great Depression was the Stock Market crash, which led to the financial crisis, the increase of the unemployment rates, and, consequently to the bankruptcy of farmers and industrialists. Soon, after the inauguration, Franklin Roosevelt proclaimed the implementation of the New Deal and started regulating the consequences of the crisis. The fact is that he killed two birds with a single stone: to restore and expand the infrastructure on the continent he claimed, that all unemployed agreed to work on the buildings of roads, connecting Eastern and Western parts of the USA. This decision was backed by the setting of the standards of minimal working days and minimal salary. Originally, the necessity to restore the infrastructure was not the highest, however, this decision may be regarded as rather rational, taking into account the increasing bankruptcy rates.

The farmers were granted the receiving of long-term credits in the order they could restore their farms and buy the necessary equipment. The fact is that the restoration of the banking system did not take much time, as only the hugest and the most stable banks left working after Roosevelt decided to close all the banks for some time: this looked like the natural selection, as most banks could not bear the inactivity period. The farmers got their credits and started restoring the agricultural sector.

It is stated, that the white-collar service sector was not severely hurt by the Depression, and the financial crisis, however, it also experienced essential troubles. To grant work for the white-collars, Franklin Roosevelt started creating different committees, and every committee was devoted to some particular problem or sphere. However, the committees also required financial support. Thus, the Work-Relief Agency got up to $11 billion for the period 1935-1943, and WPA provided up to 8 million jobs for this period.

As for the effectiveness of the New Deal, it should be mentioned, that historians express no doubt, that it helped to overcome the Great Depression. The economists, in their turn, are not so certain, and some of them argue, that it only worsened the Depression. Thus, the survey showed, that 51% of the economists agreed on the effectiveness of the New Deal. As for historians, 73% agreed.

The creation of the New Deal Coalition was the necessary step for overcoming the Depression crisis. It consisted of poor labor people, mainly the white southerners. They perfectly knew what people wanted from the presidential administration, and were able to formulate these requirements for the following law projects. The fact is that the people that entered this coalition were not professional financial experts, law experts, or even social workers. They were just the representatives of the masses, that is why this coalition is the subject of numerous arguments.

The New Deal promised by Roosevelt to the Americans was aimed at ending depression. In the early days of his presidency, the administration of Roosevelt initiated a passage of different laws related to banking reforms, relief programs for lifting emergencies along different other agricultural and work relief programs. (Mcelvaine, 1993) FDR’s New Deal practically supported improving the general standards of lives suffered from the disastrous effects of the Great Depression.

Moreover, in the long run, the programs of the New Deal served as a precedent, particularly for the federal government to assume a primary role in the social and economic affairs of the nation. (Sowell, 2007) It could be concluded, based on arguments presented in the paper, that FDR’s New Deal was successful in pulling the economy from Great Depression and has a perpetual impact on the economy of the United States.

Barnanke, B (2004) Essays on the Great Depression. Princeton University Press.

Bernanke has included a collection of essays in his book. He is a scrupulous and careful econometrician in his argumentative discussion about the decline of the economy after the Great Depression. He has provided a complete overview of the macroeconomics of the Great Depression.

McEclvaine, R (1993) The Great Depression: American 1929-1941. Three Rivers Press.

Robert McEclvaine’s description of the cultural shock and economic collapse brought by the Great Depression is presented in the book. The author has stated the responses of Roosevelt and Hoover that shaped the modern-day anticipations of the role played by the federal government in the daily routine lives of people. The book specifically deals with the events after World War I and events involving U.S in World War II.

Powell, J (2004) FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great” Depression Three Rivers Press.

Jim Powell focuses on the effects of major policies implemented by Roosevelt. Powell has portrayed the sketches of the major players also. He has discussed the Social Security System about unemployment and the phenomenon of higher taxes as well as new labor laws along with their impact.

Smilely, G (2003) Rethinking the Great Depression. Ivan R. Dee, Publisher.

Gene Smiley has endeavored to link the events of the Great Depression with overproduction, inequality of wealth, and speculation in the stock market. These along with some other causes led to the New Deal implementation. These events have been investigated and their effects have been presented in the book.

Smith, Jean (2008) FDR. Random House Trade Paperbacks.

Smith is a renowned and independent biographer. He has magnificently presented a biography of one of the significant Presidents of the United States. Scores of articles and books have already been written about Roosevelt but the expressive blend of the complex life of FDR has been presented in an elaborative way

Sowell, T (2007) Economic Facts and Fallacies. Basic Books.

Thomas Sowell in economic Facts and Fallacies has attempted to expose some of the famous fallacies regarding economic issues and has included many beliefs disseminated in the mass media by politicians. Sowell has published popular and scholarly articles on economics and some interesting facts and figures about Great Depression.

Zelizer, J. E. (2000). The Forgotten Legacy of the New Deal: Fiscal Conservatism and the Roosevelt Administration, 1933-1938. Presidential Studies Quarterly, 30 (2), 331.

Julian Zelizer aimed to analyze the New Deal Approaches from the viewpoint of the current economic affairs and difficulties. The book entails the analysis of the origins of the New Deal approaches, studies the innovations, and offers the comparison with the contemporary approaches.

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IvyPanda. (2021, October 4). Roosevelt's New Deal and the Great Depression. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/

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IvyPanda . 2021. "Roosevelt's New Deal and the Great Depression." October 4, 2021. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/.

1. IvyPanda . "Roosevelt's New Deal and the Great Depression." October 4, 2021. https://ivypanda.com/essays/roosevelts-new-deal-and-the-great-depression/.

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• The Actions of Roosevelt During the New Deal
• Roosevelt’s Plan to End the Great Depression
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TikTok challenges U.S. ban in court, calling it unconstitutional

Bobby Allyn

TikTok's suit is in response to a law passed by Congress giving ByteDance up to a year to divest from TikTok and find a new buyer, or face a nationwide ban. Kiichiro Sato/AP hide caption

TikTok's suit is in response to a law passed by Congress giving ByteDance up to a year to divest from TikTok and find a new buyer, or face a nationwide ban.

TikTok and its parent company on Tuesday filed a legal challenge against the United States over a law that President Biden signed last month outlawing the app nationwide unless it finds a buyer within a year.

In the petition filed in the Court of Appeals for the District of Columbia Circuit, the company said the legislation exceeds the bounds of the constitution and suppresses the speech of millions of Americans.

"Banning TikTok is so obviously unconstitutional, in fact, that even the Act's sponsors recognized that reality, and therefore have tried mightily to depict the law not as a ban at all, but merely a regulation of TikTok's ownership," according to the filing.

The law, passed through Congress at lightning speed, which caught many inside TikTok off guard, is intended to force TikTok to be sold to a non-Chinese company in nine months, with the possibility of a three month extension if a possible sale is in play.

Yet lawyers for TikTok say the law offers the company a false choice, since fully divesting from its parent company, ByteDance, is "simply not possible: not commercially, not technologically, not legally," the challenge states. "And certainly not on the 270-day timeline required by the Act."

Anupam Chander, a law professor at Georgetown University who specializes in technology regulations, said if TikTok loses this legal fight, it will likely shut down in the U.S.

"The problem for TikTok is that they have a parent company that has these obligation in China, but they're trying to live by free speech rules by the United States," Chander said in an interview. "The question is whether American courts will believe that that's even possible."

TikTok says law based on "speculative and analytically flawed concerns"

Lawmakers in Washington have long been suspicious of TikTok, fearing its Chinese owner could use the popular app to spy on Americans or spread dangerous disinformation.

But in the company's legal petition, lawyers for TikTok say invoking "national security" does not give the government a free pass to violate the First Amendment, especially, TikTok, argues, when no public evidence has been presented of the Chinese government using the app as a weapon against Americans.

Possible TikTok ban could be 'an extinction-level event' for the creator economy

According to the filing, the law is based on "speculative and analytically flawed concerns about data security and content manipulation — concerns that, even if grounded in fact, could be addressed through far less restrictive and more narrowly tailored means."

New DOJ Filing: TikTok's Owner Is 'A Mouthpiece' Of Chinese Communist Party

Constitutional scholars say there are few ways for the government to restrict speech in a way that would survive a legal challenge. One of those ways is if the government can demonstrate a national security risk. Also key, legal experts say, is the government showing the speech suppression was the least restrictive option on the table.

TikTok said Congress ignored less restrictive ways of addressing the government's national security concerns.

"If Congress can do this, it can circumvent the First Amendment by invoking national security and ordering the publisher of any individual newspaper or website to sell to avoid being shut down," the filing states. "And for TikTok, any such divestiture would disconnect Americans from the rest of the global community."

Since more than 90% of TikTok's users are outside of America, Georgetown's Chander said selling the U.S.-based app to a different owner would cannibalize its own business.

"You can't really create a TikTok U.S., while having a different company manage TikTok Canada," Chander said in an interview. "What you're doing essentially is creating a rival between two TikToks," he said. " It may be better to take your marbles out of the United States and hope to make money outside of the U.S., rather than sell it at a fire-sale price."

TikTok critics call app a 'spy balloon on your phone'

The filing sets off what could be the most important battle for TikTok. It has been fending off legal challenges to its existence since former President Trump first sought to ban the app through an executive order in the summer of 2020. That effort was blocked by federal courts.

Since then, Democrats and Republicans have shown a rare moment of unity around calls to pressure TikTok to sever its ties with ByteDance, the Beijing-based tech giant that owns the video-streaming app.

Trump's Ban On TikTok Suffers Another Legal Setback

Congress has never before passed legislation that could outright ban a wildly popular social media app, a gesture the U.S. government has criticized authoritarian nations for doing.

In the case of TikTok, however, lawmakers have called the app a "spy balloon on your phone," emphasizing how the Chinese government could gain access to the personal data of U.S. citizens.

Worries also persist in Washington that Beijing could influence the views of Americans by dictating what videos are boosted on the platform. That concern has only become heightened seven months before a presidential election.

Yet the fears so far indeed remain hypothetical.

There is no publicly available example of the Chinese government attempting to use TikTok as an espionage or data collection tool. And no proof that the Chinese government has ever had a hand over what TikTok's 170 million American users see every day on the app.

TikTok says it offers U.S. a plan that would shut app down if it violated agreement

TikTok, for its part, says it has invested $2 billion on a plan, dubbed Project Texas, to separate its U.S. operation from its Chinese parent company. It deleted all of Americans' data from foreign servers and relocated all of the data to servers on U.S. soil overseen by the Austin-based tech company Oracle.

While the plan was intended to build trust with U.S. lawmakers and users, reports surfaced showing that data was still moving between staff in California and Beijing.

In the filing on Tuesday, TikTok said it submitted an agreement to the Committee on Foreign Investment in the United States, which has been probing the app for five years, that would allow the U.S. to suspend TikTok if it violated terms set forth in a national security plan.

But, lawyers for TikTok say, the deal was swept aside, "in favor of the politically expedient and punitive approach," the petition states.

Mnuchin claims he will place a bid to buy TikTok, even though app is not for sale

Despite the new law giving TikTok the ultimatum of selling or being shut down, there are many questions around how the app could even be bought by another company or group of investors.

Former Treasury Secretary Steven Mnuchin told NPR on Monday, he is planning to assemble a group of investors to try to purchase TikTok without the app's algorithm.

Mnuchin, who declined to answer additional questions, said in between sessions at the Milken Institute Global Conference in Los Angeles that the proposal to buy the app is still in the works, but he would not say when it would be formally submitted.

One major obstacle in any possible sale of TikTok is a glaring problem: The app is not for sale.

TikTok Ban Averted: Trump Gives Oracle-Walmart Deal His 'Blessing'

Despite the new law in the U.S., ByteDance says it does not intend to let go of the service. Furthermore, winning the support of China would be necessary, and officials in Beijing are adamantly against any forced sale.

In 2020, amid the Trump administration's clamp down on the app, China added "content-recommendation algorithms" to its export-control list, effectively adding new regulations over how TikTok's all-powerful algorithm could ever be sold.

ByteDance, not TikTok, developed and controls the algorithm that determines what millions see on the app every day. The technology has become the envy of Silicon Valley, and no U.S. tech company has been able dislodge TikTok's firm hold on the short-form video market. Experts say key to its success is its highly engaging and hyper-personalized video-ranking algorithm.

The algorithm, which involves millions of lines of software code developed by thousands of engineers over many years, cannot be easily transferred to the U.S., even if China did allow it, TikTok's challenge states.

Lawyers for TikTok argue that "any severance [of the algorithm] would leave TikTok without access to the recommendation engine that has created a unique style and community that cannot be replicated on any other platform today."

Apple introduces M4 chip

New Technologies Enabling the New iPad Pro

New 10-core CPU

GPU Brings New Capabilities to iPad Pro

The Most Powerful Neural Engine Ever

Advanced Media Engine for Smooth, Efficient Streaming

Better for the Environment

Text of this article

May 7, 2024

PRESS RELEASE

M4 enables the breakthrough design and stunning display of the new iPad Pro, while delivering a giant leap in performance

CUPERTINO, CALIFORNIA Apple today announced M4, the latest chip delivering phenomenal performance to the all-new iPad Pro . Built using second-generation 3-nanometer technology, M4 is a system on a chip (SoC) that advances the industry-leading power efficiency of Apple silicon and enables the incredibly thin design of iPad Pro. It also features an entirely new display engine to drive the stunning precision, color, and brightness of the breakthrough Ultra Retina XDR display on iPad Pro. A new CPU has up to 10 cores, while the new 10-core GPU builds on the next-generation GPU architecture introduced in M3, and brings Dynamic Caching, hardware-accelerated ray tracing, and hardware-accelerated mesh shading to iPad for the first time. M4 has Apple’s fastest Neural Engine ever, capable of up to 38 trillion operations per second, which is faster than the neural processing unit of any AI PC today. Combined with faster memory bandwidth, along with next-generation machine learning (ML) accelerators in the CPU, and a high-performance GPU, M4 makes the new iPad Pro an outrageously powerful device for artificial intelligence.

“The new iPad Pro with M4 is a great example of how building best-in-class custom silicon enables breakthrough products,” said Johny Srouji, Apple’s senior vice president of Hardware Technologies. “The power-efficient performance of M4, along with its new display engine, makes the thin design and game-changing display of iPad Pro possible, while fundamental improvements to the CPU, GPU, Neural Engine, and memory system make M4 extremely well suited for the latest applications leveraging AI. Altogether, this new chip makes iPad Pro the most powerful device of its kind.”

Delivering a giant leap in performance over the previous iPad Pro with M2, M4 consists of 28 billion transistors built using a second-generation 3-nanometer technology that further advances the power efficiency of Apple silicon. M4 also features an entirely new display engine designed with pioneering technologies, enabling the stunning precision, color accuracy, and brightness uniformity of the Ultra Retina XDR display, a state-of-the-art display created by combining the light of two OLED panels.

M4 has a new up-to-10-core CPU consisting of up to four performance cores and now six efficiency cores. The next-generation cores feature improved branch prediction, with wider decode and execution engines for the performance cores, and a deeper execution engine for the efficiency cores. And both types of cores also feature enhanced, next-generation ML accelerators.

M4 delivers up to 1.5x faster CPU performance over the powerful M2 in the previous iPad Pro. 1 Whether working with complex orchestral music files in Logic Pro or adding highly demanding effects to 4K video in LumaFusion, M4 boosts performance across pro workflows.

The new 10-core GPU of M4 builds upon the next-generation graphics architecture of the M3 family of chips. It features Dynamic Caching, an Apple innovation that allocates local memory dynamically in hardware and in real time to dramatically increase the average utilization of the GPU. This significantly increases performance for the most demanding pro apps and games.

Hardware-accelerated ray tracing comes to iPad for the first time, and enables even more realistic shadows and reflections in games and other graphically rich experiences. Hardware-accelerated mesh shading is also built into the GPU, and delivers greater capability and efficiency in geometry processing, enabling more visually complex scenes in games and graphics-intensive apps. Pro rendering performance in apps like Octane gets a huge boost with M4, and is now up to four times faster than on M2. 1 With these improvements to the CPU and GPU, M4 maintains Apple silicon’s industry-leading performance per watt. M4 can deliver the same performance as M2 using just half the power. And compared with the latest PC chip in a thin and light laptop, M4 can deliver the same performance using just a fourth of the power. 2

M4 has a blazing-fast Neural Engine — an IP block in the chip dedicated to the acceleration of AI workloads. This is Apple’s most powerful Neural Engine ever, capable of an astounding 38 trillion operations per second — a breathtaking 60x faster than the first Neural Engine in A11 Bionic. Together with next-generation ML accelerators in the CPU, the high-performance GPU, and higher-bandwidth unified memory, the Neural Engine makes M4 an outrageously powerful chip for AI. And with AI features in iPadOS like Live Captions for real-time audio captions, and Visual Look Up, which identifies objects in video and photos, the new iPad Pro allows users to accomplish amazing AI tasks quickly and on device.

iPad Pro with M4 can easily isolate a subject from its background throughout a 4K video in Final Cut Pro with just a tap, and can automatically create musical notation in real time in StaffPad by simply listening to someone play the piano. And inference workloads can be done efficiently and privately while minimizing the impact on app memory, app responsiveness, and battery life. The Neural Engine in M4 is Apple’s most capable yet, and is more powerful than any neural processing unit in any AI PC today.

The Media Engine of M4 is the most advanced to come to iPad. In addition to supporting the most popular video codecs, like H.264, HEVC, and ProRes, it brings hardware acceleration for AV1 to iPad for the first time. This provides more power-efficient playback of high-resolution video experiences from streaming services.

The power-efficient performance of M4 helps the all-new iPad Pro meet Apple’s high standards for energy efficiency and deliver all-day battery life. This results in less time needing to be plugged in and less energy consumed over its lifetime.

Today, Apple is carbon neutral for global corporate operations, and by 2030, plans to be carbon neutral across the entire manufacturing supply chain and life cycle of every product.

• Testing was conducted by Apple in March and April 2024. See apple.com/ipad-pro for more information.
• Testing was conducted by Apple in March and April 2024 using preproduction 13-inch iPad Pro (M4) units with a 10-core CPU and 16GB of RAM. Performance was measured using select industry‑standard benchmarks. PC laptop chip performance data is from testing ASUS Zenbook 14 OLED (UX3405MA) with Core Ultra 7 155H and 32GB of RAM. Performance tests are conducted using specific computer systems and reflect the approximate performance of iPad Pro.

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