new deal essay conclusion

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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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History Grade 11 - Topic 2 Essay Questions

Essay Question:

To what extent did Roosevelt’s New Deal succeed in mitigating the negative effects of the Great Depression in USA in the 1930’s?  Present an argument in support of your answer using relevant historical evidence. [1]

Introduction:

On 29 October 1929 (also known as “Black Tuesday”), the United States (US) stock market crashed which initiated the Great Depression. [2]   After winning the US elections and taking office in 1933, President Franklin D. Roosevelt sought to bring economic relief to the US during the 1930’s by implementing a series of reforms and restructures in what he called the ‘New Deal’. [3]   Although the ‘New Deal’ succeeded somewhat in relieving economic situations on a macro-level, the “New Deal”, in the long run, is considered a failure as it did not ultimately succeed in what it was set out to do, which was to recover the economy from its “depressed state”. [4]   This statement will be discussed by analyzing the two phases of the “New Deal”, as well as discussing the effects of some of the relief, recovery and reform programs implemented.

The First Hundred Days

When analyzing the legacy of the “New Deal”, it is important to understand that there were two phases of the deal, namely the “First New Deal” and the “Second New Deal”.  The First New Deal consisted mainly of the first three months of Roosevelt’s presidency and is referred to as the “hundred days”. [5]   Within the first hundred days, various relief programs such as the “Federal Emergency Relief Administration” (FRA), the “Civilian Conservation Corps” and the “Agricultural Adjustment Act” were implemented in order to create employment opportunities for Americans as well as providing some extent of economic relief for struggling citizens. [6]

Another significant program that was implemented during the hundred days, was the “National Industrial Recovery Act” (NIRA).  This recovery act allowed working Americans to unionize and in a sense bargain for better working conditions, as well as wages. [7]   Roosevelt felt that a significant part of the recovery process will come from decreasing competition through using set prices, wages and commodities. [8]   Mixed reviews came from the implementation of these recovery acts, as many felt that corporate heads were being disadvantaged by the state, and in some instance some corporations felt as though their competition became the US government itself. [9]   However, on the larger part, many felt that the hundred days and the “First New Deal” was relatively successful as it was marked by a decrease in unemployment and the stabilization of US banks.

The Second New Deal

In 1935, Roosevelt decided that the New Deal should take a more aggressive approach in the attempt to diminish the Great Depression. [10]   This phase is known as the Second New Deal.  One of the more prominent acts implemented was the “Social Security” Act which provided the elderly and widowed people with some financial support, allowed some unemployment and disability compensation and set a framework or minimum wages and maximum work hours. [11]   Furthermore, the “Works Progress Administration” (WPA) was implemented to provide the unemployed with opportunities in the public sector.  These opportunities included building bridges, schools and roads. [12]   To some extent, the Great Deal built a platform for more financial security and opportunity for the American citizens during the onslaught of the Great Depression with its housing, employment and financial interventions. [13]

Criticism of the New Deal

When analyzing some of the programs and acts implemented by the Great Deal, one also has to mention points of criticism.  One of the more popular points of criticism stems from the “interventionalist” and anti-competitive nature of the New Deal. [14]   Larger companies and the Supreme Court also felt that some of the reform initiatives were unconstitutional and did not go through the right channels to implement reform acts. [15]   However, with this criticism in mind, the main reason why the New Deal was deemed unsuccessful, is simply because it did not achieve what it set out to do.  The American economy and employment rates did not recover enough for the New Deal to have remedied the effects of the Great Depression.  Rather, American entrance into the Second World War stimulated more economic growth than the New Deal. [16]

Therefore, one could say that the New Deal mitigated the effects of the Great Depression to an extent where it improved the employment rate from 25% of 1933 to 17% in 1939. [17]   One could also say that some of the relief and reform acts were deemed successful as some of them, such as the Social Security Act, still remains today. [18]   The New Deal also led to a, albeit short-lived, coalition between “white working people, African Americans and left-wing intellectuals”. [19]   Many also argue that the New Deal built a surface for the future economy of America post-World War Two. [20]   However, with regards to the mitigation of the Great Depression itself, the New Deal ultimately did not succeed in ending the Great Depression and its effects.

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

[1] National Senior Certificate.: “Grade 11 November 2017 History Paper 1 Exam,” National Senior Certificate, November 2017.

[2] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[3] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[4] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[5] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[6] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[7] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[8] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[9] J. Green.: “The New Deal:  crash Course US History #34,” Crash Course [YouTube Online].  Accessed on 23 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=380s ).

[10] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[11] Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online].  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).

[12] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[13] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, pp. 265-267.

[14] M, Johnston.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[15] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[16] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[17] Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online].  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).

[18] Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ).

[19] History.  Editors of History.: “New Deal,” History [online].  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).

[20] D.M. Kennedy.: “What the New Deal Did,” Political Science Quarterly, (124), (2), 2009, p. 267.

• Britannica, T. Editors of Encyclopaedia.: “New Deal,” Encyclopedia Britannica [online], January 2021.  Accessed on 20 March 2021 ( https://www.britannica.com/event/New-Deal ).
• Fiorillo, S.: “What were the New Deal Programs and what did they do?” The Street [online].  Accessed on 24 March 2021 ( https://www.thestreet.com/politics/new-deal-programs-14861940 ). 
• Green, J.: “The New Deal:  Crash Course US History #34,” Crash Course [online].  Accessed on 24 March 2021 ( https://www.youtube.com/watch?v=6bMq9Ek6jnA&t=391s ).
• History.  Editors of History.: “New Deal,” History [online], November 2021.  Accessed 20 March 2021 ( https://www.history.com/topics/great-depression/new-deal ).
• Johnston, M.: “The Economic Effects of the New Deal,” Investopedia [online], January 2021.  Accessed 20 March 2021 ( https://www.investopedia.com/articles/investing/011116/economic-effects-new-deal.asp ).
• Kennedy, D.M.: “What the New Deal Did,” Political Science Quarterly, (124),(2), 2009, pp. 251-268.

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The New Deal

The election of Franklin D. Roosevelt in 1932 resulted in the New Deal he proposed, a fundamental shift in the American political economy and a new conception of the relationship between the government and the governed.

Though less overtly critical of the Constitution than the early progressives, FDR largely ignored it, saying only that it was “so simple and practical that it is possible always to meet extraordinary needs by change in emphasis and arrangement without loss of essential form” (Franklin D. Roosevelt, “First Inaugural Address, March 4, 1932).

The New Deal redefined the purpose of government. No longer was it enough for the government to protect the rights of individuals. The Founders’ regime of limited government, Roosevelt believed, had created a new class of industrial titans, “malefactors of great wealth,” who had acquired tyrannical power over farmers, small businessmen, consumers, and workers. It was now necessary for the government to redress this imbalance of power, to redistribute income and wealth, and to provide economic security for the victims of the old system. In the 1932 campaign he called for “an economic declaration of rights,” a new Bill of Rights that would provide citizens with such goods as jobs, housing, education, recreation, and health care.

In the 1932 campaign Franklin D. Roosevelt called for “an economic declaration of rights,” a new Bill of Rights that would provide citizens with such goods as jobs, housing, education, recreation, and health care.

Roosevelt’s initial strategy was to promote a system of industrial and agricultural cartels created by government.

The Agricultural Adjustment Act would enable farmers to limit crop production in order to increase the prices they got, with government subsidies if those prices were not reached, paid for by taxes on processors of farm commodities. The National Industrial Recovery Act invited industries to devise “codes of fair competition”—to limit production, raise prices, and agree to bargain with labor unions. The New Dealers hoped that these schemes would produce reliable profits for businessmen and farmers, who would then increase their own spending and hiring, and thus facilitate economic recovery. They had, however, clearly failed by the time the Supreme Court declared them unconstitutional in 1935 and 1936.

The administration did not abandon its initial strategy. A “second New Deal” followed further Democratic victories in 1934 and adjusted to the Court’s constitutional objections—for example, by providing benefits to farmers from general revenue and promoting crop reduction as “soil conservation.” It enacted more specific price- and production-fixing measures for particular industries like coal, oil, and motor transportation. It promoted labor unions with the National Labor Relations (Wagner) Act, which compelled employers to bargain exclusively with whatever organization a majority of its workers chose to represent them. It regulated capital markets by the Securities and Exchange Commission and passed legislation strengthening the power of the Federal Reserve Board. It also embarked on massive public works spending and government employment programs, adopting and gradually applying the economic philosophy of John Maynard Keynes that government spending was the cure for depression and unemployment. Congress also provided long-term policies for old-age pensions, unemployment insurance, and insurance for widows and orphans in the Social Security Act of 1935. This was said to be insurance paid for by one’s earnings, rather than a welfare payment.

Large Democratic majorities in Congress accepted the proposals of the president, but the Supreme Court remained an obstacle. Roosevelt said nothing about the Court when he ran for re-election in 1936, winning a landslide victory that increased Democratic congressional majorities still further. A month after his second inauguration, he asked Congress to increase the size of the Supreme Court so that he could appoint six new justices. This “Court-packing plan” shocked the country, split the Democratic party, and went down to defeat. Except for the Fair Labor Standards Act of 1938, which established a national minimum wage and abolished child labor, Congress did not enact any further New Deal legislation. But the Court responded to the threat by abandoning its objections to New Deal programs, so Roosevelt was able to claim that he had “lost the battle but won the war.”

Upholding the Wagner Act and Social Security Act, as well as state economic regulations, the Court no longer used the due process clause of the Fourteenth and Fifth Amendments or the dual federalism of the Tenth Amendment, to protect property rights.

Charles Evans Hughes was Chief Justice of the Supreme Court from 1930-1941

After 1937, the Court stepped aside when it came to economic regulations. The states were free to exercise their police powers to legislate for the safety, health, welfare and morals of the people, unrestrained by the Fourteenth Amendment, the due process clause of which had been held to protect fundamental economic freedoms such as the “liberty of contract.” Congress could do [virtually anything] under the interstate commerce power and its power to tax and spend. The Court declared in the 1938 case of  U.S. v. Carolene Products  that it would apply a stricter standard of constitutional protection to non-economic rights and the rights of minority groups especially.

The Second World War had many of the same effects as the First, establishing a wartime economy in which the government controlled prices and rationed scarce goods in the Office of Price Administration, one of many new agencies. Government control of the wartime economy included extraordinarily high rates of taxation, inflation, the promotion of labor unions, wage and price controls, and outright rationing. The Second World War, like the First, produced a public reaction against these economic controls after the war ended. But the most important New Deal programs survived the postwar readjustment and many of them, like Social Security, expanded. Liberals were disappointed that they were unable to bring the New Deal to completion, as President Harry Truman proposed in his “Fair Deal” campaign. Conservatives were disappointed that the Republican Eisenhower administration did not roll back the New Deal. Labor unions continued to grow, but their powers were limited by the Taft-Hartley Act of 1947, whose most important provision permitted states to prohibit agreements that compelled workers to join unions. Over time, more capital would be invested and economic growth would occur in these “right to work” states of the South and West.

The New Deal and the war had produced a myriad of administrative agencies that combining legislative, executive and judicial functions.

These powers were largely confirmed in the Administrative Procedure Act of 1946, which attempt to guarantee due process to persons and companies who were accused to violating administrative regulations. As the Cold War settled in, especially with the outbreak of the Korean War in 1950, many elements of the wartime economy in both world wars, such as conscription, continued after World War II. President Dwight D. Eisenhower warned about an excessively militarized economy—what he called the “military-industrial complex”—in his 1961 farewell address (Dwight D. Eisenhower, “Farewell Address,” January 17, 1961). At the height of the Cold War the U.S. spent 10 percent of its gross domestic product on defense.

The twenty years following World War II were prosperous. Economic growth was slow but widely shared; this period saw less income inequality (measured by the share of national income going to the top and bottom quintiles of the population) than any before or since.

American producers were temporarily ahead of foreign competition, and American workers similarly benefited from laws that severely limited immigration until 1965. These were the years of the “big-unit economy,” in which a small number of firms dominated their markets, and the country valued stability and equality above entrepreneurial risk-taking. Policymakers believed that modern, Keynesian economics, by which government fiscal powers could prevent depressions and inflation, now enabled the government to ensure growth and full employment without excessive inflation. In the generation after the Second World War, the American people had great confidence in the government. This fed another great expansion of progressivism, now called liberalism, in the “Great Society” of the 1960s.

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By: History.com Editors

Updated: March 28, 2023 | Original: October 29, 2009

The New Deal was a series of programs and projects instituted during the Great Depression by President Franklin D. Roosevelt that aimed to restore prosperity to Americans. When Roosevelt took office in 1933, he acted swiftly to stabilize the economy and provide jobs and relief to those who were suffering. Over the next eight years, the government instituted a series of experimental New Deal projects and programs, such as the CCC , the WPA , the TVA, the SEC and others. Roosevelt’s New Deal fundamentally and permanently changed the U.S. federal government by expanding its size and scope—especially its role in the economy.

New Deal for the American People

On March 4, 1933, during the bleakest days of the Great Depression , newly elected President Franklin D. Roosevelt delivered his first inaugural address before 100,000 people on Washington’s Capitol Plaza.

“First of all,” he said, “let me assert my firm belief that the only thing we have to fear is fear itself.”

He promised that he would act swiftly to face the “dark realities of the moment” and assured Americans that he would “wage a war against the emergency” just as though “we were in fact invaded by a foreign foe.” His speech gave many people confidence that they’d elected a man who was not afraid to take bold steps to solve the nation’s problems.

Did you know? Unemployment levels in some cities reached staggering levels during the Great Depression: By 1933, Toledo, Ohio's had reached 80 percent, and nearly 90 percent of Lowell, Massachusetts, was unemployed.

The next day, Roosevelt declared a four-day bank holiday to stop people from withdrawing their money from shaky banks. On March 9, Congress passed Roosevelt’s Emergency Banking Act, which reorganized the banks and closed the ones that were insolvent.

In his first “ fireside chat ” three days later, the president urged Americans to put their savings back in the banks, and by the end of the month almost three quarters of them had reopened.

The First Hundred Days

Roosevelt’s quest to end the Great Depression was just beginning, and would ramp up in what came to be known as “ The First 100 Days .” Roosevelt kicked things off by asking Congress to take the first step toward ending Prohibition —one of the more divisive issues of the 1920s—by making it legal once again for Americans to buy beer. (At the end of the year, Congress ratified the 21st Amendment and ended Prohibition for good.)

In May, he signed the Tennessee Valley Authority Act into law, creating the TVA and enabling the federal government to build dams along the Tennessee River that controlled flooding and generated inexpensive hydroelectric power for the people in the region.

That same month, Congress passed a bill that paid commodity farmers (farmers who produced things like wheat, dairy products, tobacco and corn) to leave their fields fallow in order to end agricultural surpluses and boost prices.

June’s National Industrial Recovery Act guaranteed that workers would have the right to unionize and bargain collectively for higher wages and better working conditions; it also suspended some antitrust laws and established a federally funded Public Works Administration.

In addition to the Agricultural Adjustment Act, the Tennessee Valley Authority Act and the National Industrial Recovery Act, Roosevelt had won passage of 12 other major laws, including the Glass-Steagall Act (an important banking bill) and the Home Owners’ Loan Act, in his first 100 days in office.

Almost every American found something to be pleased about and something to complain about in this motley collection of bills, but it was clear to all that FDR was taking the “direct, vigorous” action that he’d promised in his inaugural address.

Second New Deal

Despite the best efforts of President Roosevelt and his cabinet, however, the Great Depression continued. Unemployment persisted, the economy remained unstable, farmers continued to struggle in the Dust Bowl and people grew angrier and more desperate.

So, in the spring of 1935, Roosevelt launched a second, more aggressive series of federal programs, sometimes called the Second New Deal.

In April, he created the Works Progress Administration (WPA) to provide jobs for unemployed people. WPA projects weren’t allowed to compete with private industry, so they focused on building things like post offices, bridges, schools, highways and parks. The WPA also gave work to artists, writers, theater directors and musicians.

In July 1935, the National Labor Relations Act , also known as the Wagner Act, created the National Labor Relations Board to supervise union elections and prevent businesses from treating their workers unfairly. In August, FDR signed the Social Security Act of 1935, which guaranteed pensions to millions of Americans, set up a system of unemployment insurance and stipulated that the federal government would help care for dependent children and the disabled.

In 1936, while campaigning for a second term, FDR told a roaring crowd at Madison Square Garden that “The forces of ‘organized money’ are unanimous in their hate for me—and I welcome their hatred.”

He went on: “I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match, [and] I should like to have it said of my second Administration that in it these forces have met their master.”

This FDR had come a long way from his earlier repudiation of class-based politics and was promising a much more aggressive fight against the people who were profiting from the Depression-era troubles of ordinary Americans. He won the election by a landslide.

Still, the Great Depression dragged on. Workers grew more militant: In December 1936, for example, the United Auto Workers strike at a GM plant in Flint, Michigan lasted for 44 days and spread to some 150,000 autoworkers in 35 cities.

By 1937, to the dismay of most corporate leaders, some 8 million workers had joined unions and were loudly demanding their rights.

The End of the New Deal?

Meanwhile, the New Deal itself confronted one political setback after another. Arguing that they represented an unconstitutional extension of federal authority, the conservative majority on the Supreme Court had already invalidated reform initiatives like the National Recovery Administration and the Agricultural Adjustment Administration.

In order to protect his programs from further meddling, in 1937 President Roosevelt announced a plan to add enough liberal justices to the Court to neutralize the “obstructionist” conservatives.

This “ Court-packing ” turned out to be unnecessary—soon after they caught wind of the plan, the conservative justices started voting to uphold New Deal projects—but the episode did a good deal of public-relations damage to the administration and gave ammunition to many of the president’s Congressional opponents.

That same year, the economy slipped back into a recession when the government reduced its stimulus spending. Despite this seeming vindication of New Deal policies, increasing anti-Roosevelt sentiment made it difficult for him to enact any new programs.

On December 7, 1941, the Japanese bombed Pearl Harbor and the United States entered World War II . The war effort stimulated American industry and, as a result, effectively ended the Great Depression .

The New Deal and American Politics

From 1933 until 1941, President Roosevelt’s New Deal programs and policies did more than just adjust interest rates, tinker with farm subsidies and create short-term make-work programs.

They created a brand-new, if tenuous, political coalition that included white working people, African Americans and left-wing intellectuals. More women entered the workforce as Roosevelt expanded the number of secretarial roles in government. These groups rarely shared the same interests—at least, they rarely thought they did— but they did share a powerful belief that an interventionist government was good for their families, the economy and the nation.

Their coalition has splintered over time, but many of the New Deal programs that bound them together—Social Security, unemployment insurance and federal agricultural subsidies, for instance—are still with us today.

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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.

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The New Deal, Essay Example

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When a national economy is shattered, as was the case in the Great Depression in the United States, it is inevitable that those lower on the socio-economic scale bear a greater brunt of the impact. The Depression vastly influenced all working people in the nation, of course, and its effects have been well-documented. More than half of all American families in the 1930s lived on annual incomes of between $500 and $1,500, and the lowest amount considered necessary for an average standard of living was $2,500 (Cravens 46). This was a devastating and widespread crisis affecting virtually all. Nonetheless, as such a crisis demands from a society a paring down of opportunities, those on the lower ends of employment and status were the hardest hit. African Americans had not enjoyed anything like equal employment status during the prosperous 1920s, and the same bias became more pronounced when the Depression struck. Black workers were dismissed immediately and in vast numbers, as the severe conditions enabled discrimination to become overt. If, in good times, it was acceptable to hire blacks, it was seen as necessary to sacrifice them in order to promote better chances of white survival. The numbers are striking; in Detroit, for example, blacks made up four percent of the population but accounted for over 25 percent of relief cases (Cravens 106).

For Mexicans and Latin American, it was worse. Only a decade earlier, the U.S. had actively encouraged Hispanic immigration, chiefly to meet the labor needs of the new industries. With the Depression, new laws were enacted and there began a widespread deportation process, and hundreds of thousands of Mexicans were sent back to their native country (Cafferty, Engstrom 38). The circumstances were different for women. For most, the Depression translated into something of an elevation in status; the homemaker, wife, and mother was now critically important in keeping the family together through economizing (Cravens 47). The government greatly reinforced the role of women in domestic life as crucial to seeing the nation through. At the same time, women fared as badly as blacks and Hispanics in terms of securing work outside the home. They were, like the blacks, immediately dismissed from jobs because it was felt that the few available rightly belonged to men. There was as well another backlash; as jobs were scarce, it was believed that women should be legally banned from working in cases where the husband had a job (Craven 46). Not unexpectedly, minority women were less able to find work, as those few jobs offered to women were given to whites.

The New Deal would radically change a variety of all these circumstances, and perhaps the most notable was in regard to Native Americans. Like other minorities, they were generally discarded when the Depression struck. However, and largely due to the efforts of Secretary of the Interior John Collier, Native Americans were addressed constructively by the New Deal. Collier promoted the culture and worked to destroy the reservation system, and give to the population sovereignty taken from them. His aims were defeated by Congress, however, and the result was that, while greater attention was given to tribal life, conditions for Native Americans worsened with the New Deal (Miller, Cherny, & Gormly 646). Essentially, segregation would continue to deny Native Americans opportunities.

For others, however, there were great improvements. The Roosevelt government, and particularly through the presence of Eleanor Roosevelt, made great efforts to create jobs for women, even as the administration of the New Deal agencies supplied women with clerical work. There was bias and women still received less pay, but they were now accepted as a significant part of the workforce (Miller, Cherny, & Gormly 643). In his 1936 address to the nation, Roosevelt made it clear that his administration would be devoted to providing opportunity equally as the New Deal continued to unfold (Ourdocuments.gov). As women were increasingly acknowledged and provided with work, government agencies carefully ensured that blacks, Hispanics, and other minorities would not be overlooked. Most significantly, the Works Progress Administration (WPA), funded by the federal government, created jobs for minorities, and the numbers of blacks who switched from the Republican to the Democratic Party attests to the support perceived (Miller, Cherny, & Gormly 646). Certainly, life remained hard as the Depression went on, but the New Deal appears to have “leveled” the opportunity bases and promoted the interests of women and minorities.

This as the legacy of the New Deal is, however, disputed. Historians have been widely divided as to the lasting good of it, or even its efficacy at the time, in all the decades since. Even those who defend the New Deal’s policies point out important failings of it, as in its lack of concern for rural poverty and issues. Industrialization and modernization were central to WPA efforts, and large areas of the nation were, it is felt, ignored. Rural poverty increased, in fact, as agricultural business grew (Cravens 116). It has also been observed that the tensions between the Roosevelt administration and the business community exacerbated issues; government-funded operations succeeded, but resistance from the private sector illustrates how the government failed to bring business in line with its own agendas (Cravens 151). There is, in a word, no shortage of criticism as to the effects and legacy of the New Deal. At the same time, it must be remembered that this was a drastic era in American life, and only drastic measures could begin to address the conditions created by the Great Depression. It is likely that no government initiative at this time could have addressed so many, enormous problems. Then, and states of discrimination in place then and lingering afterward, the New Deal and the Roosevelt administration did make important strides in promoting equality. To assert that these strides were not wholly effective is to ignore the times and conditions in which they were made. It is regrettable that there were significant failures, as in the intentions to create independent Native American communities. What is equally important, however, is that the New Deal broke new ground, and made overt and consistent efforts to supply opportunity to all Americans in a time when another government might well have ignored women and minority populations.

Works Cited

Cafferty, P. S. J., & Engstrom, D. W. Hispanics in the United States: An Agenda for the Twenty- First Century. New Brunswick: Transaction Publishers, 2002. Print.

Cravens, H. Great Depression: People and Perspectives . Santa Barbara: ABC-CLIO, 2009. Print.

Miller, C. L., Cherny, R. W., & Gormly, J. L. Making America: A History of the United States: Since 1865, Volume 2 . Belmont: Cengage Learning, 2011. Print.

Ourdocuments.gov. Transcript of President Franklin Roosevelt’s Radio Address Unveiling the Second Half of the New Deal (1936). N/D. Web.

<http://www.ourdocuments.gov/doc.php?flash=true&doc=69&page=transcript

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Home — Essay Samples — History — The New Deal — The New Deal Relief Programs

The New Deal Relief Programs

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Published: Jan 30, 2024

Words: 660 | Page: 1 | 4 min read

Table of contents

Relief programs, recovery initiatives, reform measures, evaluation of the new deal's successes, criticisms and limitations of the new deal.

• "New Deal," The Eleanor Roosevelt Papers Project, accessed November 10, 2021, https://www2.gwu.edu/~erpapers/teachinger/glossary/new-deal.cfm.
• "Emergency Banking Relief Act: Definition and Facts," Encyclopedia Britannica, accessed November 10, 2021, https://www.britannica.com/event/Emergency-Banking-Relief-Act.
• "Tennessee Valley Authority," History.com, accessed November 10, 2021, https://www.history.com/topics/great-depression/tennessee-valley-authority.

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The Great Depression and the New Deal Research Paper

Introduction, the cause of the great depression, effects of the great depression, reactions to the great depression, the new deal (nd).

The Great Depression (GD) of 1929-40s refers to the collapse of the world economy. It was normally caused by the collapse of the stock market. During this epoch high levels of unemployment dominated the world thus the closure of a myriad of businesses (Rauchway 105) .

Although it had no significant impact in some countries around the globe, cases of countries such as the US was severe (Hillstrom 11). This left a large proportion of individuals jobless. In addition, the majority of them lost high valued properties and became homeless. It was therefore, necessary that, the government to compensate the affected individuals.

The government accomplished this by devising a strategy aimed at averting the situation. A number of prominent members in the government devised numerous new deals. This was the turning point as the Americans became awake and sought for the strategies of ending the depression (Edsforth 262).

A number of interested individuals brought their opinions. For instance, a democrat entitled as Glass believed in the dominance of the white, budget devoid of deficits, the statutory rights, as well as the controlled power accorded to the president. Therefore, this document will discuss the cause, effects, as well as the reactions to the great depression.

Before the economy collapsed, Americans experienced some problems, which later became the cause of the great the GD (Murphy 17). For instance, there was poor distribution of wealth resulting to the increased gap between the affluent and the poor. The poor banking system among the banks was an additional challenge. This is because banks were in favor of some sectors.

Unfavorable balance of payments deficits dominated the entire economy, resulting to more imports than exports hence the US turned into a creditor nation. There was also the general increase of the price of commodities in the stock exchange market. This culminated into a vast wealth accumulation among the capital class (Murphy 112). There also existed some ignorance of the less speculative economic indicators leading to high investments among the capitalists (Hillstromn 109).

The gambling of commodities created a high inflation and this weakened the economy expansively. Financial institutions such as banks started numerous loan facilities in favor of stock- buyers. This was because stocks were selling at a good price than the other commodities in the market. In addition, the banks allowed capitalists to use stock as security for loans. In case the value of stock goes down, the financial institutions have less value security of loans taken by capitalists.

This would therefore, mean that financial institutions remain with less monetary items. This is indicative that productive businesses would not thrive, and mortgages would foreclose. As a result, bankruptcy among the business people heightened due to the collapse of the stock exchange used by a large proportion of individuals as short cut to becoming wealthy.

There was an immense panic among people since they had lost confidence in their savings. The panic resulted from the investment of client’s savings on the stocks. The closure of the stock exchange market meant that banks experienced a high level of withdrawals thus their closure. A great market crash was therefore, experienced in late October 1920.

The collapse of the stock market had a profound impact on the industries. For instance, numerous industries lost their capital in the market crash. Moreover, some industries lost their capital due to bank’s closures. Consequently, capitalists had to reduce the working duration sometimes, as well as the worker’s wage bill. This resulted to low purchasing among the customers, as well as a reduced spending on luxurious commodities.

Conversely, the reduced spending among the customers meant low demand of workforce. This further led to a reduction of the number of workers, and their wage bill. Drastically after the cost reduction measures, a myriad of businesses could not thrive leading their eventual closure. Lastly, the workers lost their jobs. Consequently, the unemployment rate escalated the ratio of dependency.

After the collapse of the economy, Americans sought a solution for the economic crash. Some Americans blamed President Hoover while others targeted the financial institutions and businesspersons. The collapse of the economy was not only attributed to one side, but to all structures of the American’s economy (Marsh 25).

The government responded in several ways. First, President Herbert, the President of the time in the US refused to intervene on the people’s behalf. He regarded the government intervention as a moral decay of the American person. He further argued that, during such a difficult situation in a country, proper strategic measures are crucial in curbing the situation.

Though forced by the congress to show his concern on the crash, he remained reluctant. This was due to his concern of balancing the national budget. More importantly, he was against violating his principles. He conducted spending in order to stabilize the business sector.

He was encouraged by the fact that regained prosperity calm the poor majority, who in turn they behaved unwillingly in waiting. Consequently, due to his uncaring nature, he was later defeated in a preceding elections of 1932 by Franklin D. Roosevelt. During the campaigns, Franklin had promised to respond appropriately in order to mitigate the depression.

While in office, he carefully followed his advisors instructions and developed programmes aimed at recovering the economy. He later launched the politics of the New Deal, which was a measure of essential conservation. The New Deal was to redeem capitalism and the key economic institutions of US from the dangerous depression.

In the first deal, the Tennessee valley Authority (TVA) of 1933 reflected on the incoming liberal means of the second ND. The TVA provided the required funds to transform the economies of seven depressed states a together with the Tennessee River. This entailed the construction of dams, power making, as well as the flood and soil erosion control.

The above construction activities were relatively high wage jobs (Edsfoth 264). Sources have shown that this is a socialism ideology. Other sources have regarded them as a proper way of solving social and economic problems. The second ND (1935-40S), aimed at ending the depression by spending in all economic activities. This increased the number of consumers, hence a higher demand for commodities. The resultant effect is a high spending hence economic growth.

Since economic depression, results from preventable factors, there, therefore, need to find appropriate prevention measures. First low spending by both consumers and the government demands improvement. The government, therefore, should use its huge financial power; inform of taxation and spending, as a precautionary measure to stabilize the economy. The increased spending needs emphasis in order to deal with depression adequately. This is crucial in the prevention of cases allied with the economic crash.

Edsforth, Ronald . The New deal: America’s response to the great depression .Malden, MA: Wiley-Blackwell, 2000. Print.

Marsh, Carole. The great depression and the new deal. Peachtree, GA: Gallopade International. Peachtree, 2005. Print.

Murphy, Robert. The politically incorrect guide to the great depression and the new deal. New York, NY: Regnery publishing, 2009. Print.

Rauchway, Eric. The great depression: A very short introduction . New York, NY: Oxford University press, 2008. Print.

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Bibliography

IvyPanda . "The Great Depression and the New Deal." September 11, 2019. https://ivypanda.com/essays/the-great-depression-and-the-new-deal/.

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