Believed in finding ways to help people help themselves => Cooperation and voluntary action
Until in 1932 he created:
Reconstruction finance corporation
Federal Home Loan Bank
=> This was a change in the role of government
Hoover was criticized for not giving direct beliefs to people. He gave money to banks and not directly to the people who were hungry
Franklin Delano Roosevelt
Democrat from NY elected president : 1932; 1936; 1940; 1944
Died from Polio (he had Polio, and was concerned about it) in his office in 1945
He fought for the new Deal, and launched it
Gave a famous speech that includes :
We have nothing to fear but fear itself
The New Deal in 3 words
Relief Growth in government responsibility for less fortunate members of society
Recovery Recovery of the depressed economy, saved the capitalist economic system
Reform Programs that would regulate economy and avoid another crash Growth in government
Effects
Started a revolution
The entire concept of the state underwent change => the state was becoming interventionnist
How did it begin?
Stated through The Hundred Days, from March to June 1933
Banking reform:
Closing all banks
People couldn’t take their money out of the banks, so they couldn’t loose it
Emergency banking act
Reform that gave the government power to investigate and fix any bank
Plans worked, little by little banks reopened
Glass-Steagall Act
Encourage people to leave their money in Banks
Forced weak banks out of buisness & encourage stronger ones
Set up the Federal Deposit Insurance Corporation (FDIC)
Assure people that if they loose their money through banks, the FDIC would issue a refund
Set up a whole bunch of agencies
Called the alphabet agencies due to their fun acronyms
Social Recovery
Civilian Conservation Corps (CCC)
Recovery Agency that address the unemployment issue amoung young men
They create useful jobs for young men to help the country
Agricultural Adjustment Act (AAA)
Attempt to recover agriculture
Helps farmers to produce less (due to overproduction) and earn more
National Industrial Recovery Act (NIRA)
National Recovery Administration (NRA)
Role is to stabilize the market (prices)
Industries should cooperate with each other
A stabilized market would create more jobs
Public Works Administration (PWA)
Government’s spending to create jobs
Includes housing programs
Includes public works such as bridges, roads, houses…
Tenessee Valley Agency
Created jobs by building dams
Creates jobs and electricty : Double Impact
Security & Exchange Commission (SEC)
Agency that sets up government regulations on trading and stock exchanges
Social Security Act
Make sure that retired people and disabled people have a paycheck
Fair Labor Standards Act
Sets up a minimum wage
Sets up maximum work hours
Where is the money coming from?
Governments create money
B. New Deal Impact
Millions of people found a job following the new deal, sometimes for a short time but they got a job. By 1939, they were 9 million of unemployed people, compared to 18M before the new deal.
The economy rapidly improved before diving again, it wasn’t stable.
The New Deal transformed the role of the government, no previous government was so dynamic in a peace period. It transformed political, social, and economic structures of the United States.
It was criticized by both the liberal and conservatives. The liberal said it wasn’t good enough, where the conservative criticized the excessive amount of government interventions.
C. New Deal Limits
The economy was rescued and started to go again… the recovery was up and down, some people said that there were too many drops. There were limits for all sorts of people, specially for African-Americans due to segregation and racism. Some African-American were paid less than others. Unequal wages between women and men.
For many, the New Deal was a disaster…
Some would say that the New Deal was favoring poor people, at the exprense of the rich.
Social Security Act
Expension of Welfare
Before 1930, there was practically no money for relief
1930: 9M$
1940: 479M$ + 480M$ on unemployment
Legacy of the WPA (roadways, bridges, dams, public buildings, schools, hospitals…)
Changes in the political system
Growth of Executive over other branches such as legislature & Judiciary
Federal government grew - Americans began to look at federal government rather than the states for action to meet problems
D. End of the New Deal
The New Deal ended with a lot of criticism. Roosevelt didn’t have a lot of support to continue the changes. The New Deal really ended with the World War II. Millions of American people ended up in the factory lines (thanks to) World War II.
The WWII created a lot of migration, including intra-national migration. The Great Depression really ended due to the increased efforts of citizens, forced by WWII. The war economy, helped by the New Deal, triggered the economic to get back.
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