How successful was the New Deal?
The New Deal changed many aspects of government, the economy and the relationship between Industry and the state. The policies within the New Deal were aimed at tackling the Great Depression, by reducing unemployment and raising investment in industry and the economy. It’s success, or otherwise, can be measured against a variety of criteria. FDR’s New Deal has drawn both criticism and praise, making an evaluation of the policies quite demanding.
There has been much debate about whether the New Deal was a success. At the time Roosevelt’s policies attracted a lot of opposition and criticism.The Republicans thought the New Deal was too costly and a waste of tax payers money. Huey Long and his supporters thought the New Deal did not do enough for the poor and wanted higher taxes on the rich and a massive redistribution of wealth. Father Coughlin opposed the New Deal and wanted the USA to adopt a fascist type government. Some people opposed the New Deal because they believed it threatened the Constitution. The Republican dominated Supreme Court declared parts of the New Deal (AAA and NIRA) unconstitutional. Business leaders opposed government interference and the new rights given to workers and unions. Black Americans complained that the New Deal did not do enough to end discrimination. There were 15 million unemployed when Roosevelt became President in 1932, by 1939 there were still around 10 million. Many historians believe this shows that the New Deal did not end the depression. However, it gave people confidence and hope that things could get better.
• The Emergency Banking Act made the financial system more open and honest and helped restore confidence.
• Agencies such as the Home Owners Loan Corporation provided immediate help for people who were facing homelessness.
• The Agricultural Adjustment Act reduced production in order to end ‘overproduction’, increased prices and provided subsidies to farmers. After it was declared illegal by the Supreme Court it was replaced by the Soil Conservation Act which gave subsidies and trained farmers in soil conservation, new farming methods and marketing.
• The Tennessee Valley crossed several states and the region’s problems were too big for any one state to deal with. The TVA built dams to stop the flooding in winter and the droughts in the summer. The cheap hydroelectricity these dams produced attracted new industries to the area, improved transport and helped farmers. These people could then use their new found prosperity to buy the electrical goods mass produced in the cities this helping to reverse the Spiral of Depression by kick starting the Cycle of Prosperity.
Norris Dam, built as part of the TVA.
• A national welfare system was established to provide social security (unemployment benefit) and pensions.
• Industry was helped by the National Recovery Administration through the ‘Blue Eagle scheme’. Trade Union power increased and workers were given improved rights and minimum wages were introduced.
• Without the New Deal unemployment would have been worse. It provided temporary work for millions of unemployed. The public works, roads, dams, schools, airports and ports, helped the USA become a Superpower during the Second World War.
• The New Deal had faults and failures but it avoided helped to preserve freedom and democracy during the depression. Roosevelt was elected President three times and this demonstrated huge popular support for the new Deal
• When the USA went to war in 1942, conscription greatly reduced unemployment. The military forces of America and her allies provided massive orders for American businesses. By 1944 unemployment was replaced by labour shortages and large numbers of women had to enter the workforce.