The New Deal

What was the New Deal? A promise made by Franklin D. Roosevelt to the American people, that he would bring change to the depression of America, as a result of economic collapse. The laissez-faire days were over. “I pledge you, I pledge myself, to a new deal for the American people”

Did all Americans benefit from the New Deal?

The First New Deal

The Banks The Emergency Banking Relief Act immediately tackled the banking crisis by closing the banks for 4 days. This restored the faith in the banks.

The Desperate Introduced the Federal Emergency Relief Administration. It provided urgent shelter, food and clothing that was needed. $500million was spent to help the American people

Farmers Agricultural Adjustment Agency was introduced Farmers were paid to not produce any food, so the prices would go up. Between 1933 and 1939, the farmers income doubled.

The Unskilled Unemployed The Civilian Conservation Cooperation put unskilled youth to work, mostly in the environment. As a result, they were given food and clothing, and a small wage of $1 a day. Most importantly, they were taught skills they could use in the future Between 1933 and 1942, 3 million men took part in the scheme.

The Skilled Unemployed Public Works Administration put the skilled individuals to work to build schools, bridges and roads. It created millions of jobs. 70% of America’s schools were built by the PWA.

Sharecroppers and tenants Sharecroppers and tenants did not benefit from the First New Deal. Many were evicted from their homes because there was less work for them to do. This was both due to the introduction of the AAA and new machinery which was bought by farmers with the Government money.

Black People Black people were often sharecroppers or tenants on other farms. The NRA (National Recovery Administration) was later known as the “Negro Removal Act” as many black people found themselves out of work as a consequence of “improving working conditions” and “fair” wages- who wanted to treat black people equally?

The Second New Deal

Creators The Works Progress Administration (1935) continued to give work to 2 millions people a year. However, 7% of the budget was now used to create projects for creators: artists, writers, actors and musicians.

The Dependent The Social Security Act (1935) proposed a state pension to the over 65s It also offered support to handicapped people and mothers with dependent children. It provided security for those in work, where unemployment insurance was provided by individual states. It was (and still is) funded through payroll taxes.

The Employed The Social Security Act = unemployment insurance. The Wagner Act supported workers who wanted to form a union and prevent employers from sacking workers. Unions gained a lot more power.

Sharecroppers, Tenants and Farm Workers The Resettlement Act (1935) was set up by Roosevelt and aimed to move 500,000 families to better land to help their crops. The Farm Security Administration (1937) set up labour camps to help migrant workers.

Conclusion Not everyone benefited from the New Deal. Although there were many attempts to end unemployment, in 1938 unemployment increased again to more than 10 million. This was due to a reduction in government spending. It only began to fall steeply again in 1939 when the USA began to build up its armaments in case of war. This led to huge increases in jobs in industry.