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The New Deal measures involved government directly in economic areas that had never before been contemplated. The National Recovery Act involved steps toward a planned economy. The Works Progress Act involved the Government into virtuly every area of the economy. Jobs were found for virtually every area of employment. There was also major steps made in Government social programs. The Tenessee Valley Authority sought to remake the physical and social envirmoent of an entire area. These and other New Deal programs resulted in greatly increased spending and unbalanced budgets. This led to increasingly criticisms of Roosevelt's programs. He became, as a result, one ofthe most contriversial president's in American history. Before the New Deal, the American people had very very limited expectations. After the New Deal, Americans began expecting much more from the Federal Government. Each of the New Deal programs need to be evaluated on their own merits. Some such as the REA and CCC were clearly beneficial. Other agencies are more controversial. Many social reforms such as Social Security were clearly needed. Few will deny that greatly required relief programs were needed for those in need. And Government refulation of banks and the security indistry was clearly involved. But one question is to often ignored by liberal historians for which the New Deal is a virtual icon. Did the New Deal help end the Depression or did it actually prolong it. Often ignored is the fact that the Depression in other countries such as England and France, although the continuing Depression in Aneruca was a drag on other economies. New Deal defenders might argue that conservative and business interests were oposed to basic changes and unsettled by the more invasive government role. Support for labor in particular required adjustment on the part of industry. Some may argue that the oponets of the New Deal attempted to sabatoge it. This is rather a streach because it would mean financial costs to themselves. But it surely would have affected the invesrment climate. New Deal critics argue that Government spending and defecit spending absorbed available credit and thus crowded out or made it more difficult for the private sector to recover. This is a very difficult issue which is still a matter of economic discussion. While President Roosevelt's motives were questioned at the time, I think it is clear that his goal and that of New Deal figures were humanitarian. But the question of whether they helped end or prolonged the Depression is a very important question.
Many new agencies were created by the New Deal to pursue the expanding government role. As they became known by acroinyms created from their names, they became known as the alphasbet agencies. Many were creatures of the New Deal and were closed during the New Deal, in some cases because of Supreme Court decesions. Others lasted until the Depression abted. Other are still active toiday. Each of the New Deal programs need to be evaluated on their own merits. Some such as the REA and CCC were clearly beneficial. Other agencies are more controversial. Many social reforms such as Social Security were clearly needed. Few will deny that greatly required relief programs were needed for those in need. And Government regulation of banks and the security indistry was clearly involved.
President Roosevely within days of his inauguration (March 1933) called the new Congress into special session and introduced a stunning 15 major pieces of legislation. Just ine of these would have been considered a major program by precious administrations. This was called the First Hundred Days. The measures in mny cases were major departures in government policy. They were passed with little amendment or debate by Congress. Agriculture had been in Depression a decade before the Great Depression. The Depression only exacerbated the farm problem which was further impaited by the Dust Bowl storms. The new Administration was thus anxious to address the farm problem. Farming was still a substantial sector in the United States. One of the first New Deal measure to be introduced and enacted by Congress was the Agricultural Adjustment Act (AAA). It was one of the greatest departures from American free market policies. Congress declared that is was now 'the policy of Congress' to balance supply and demand for farm commodities so that prices would support a decent purchasing power for farmers. This established the policy of 'parity'. The AAA attempted to control the supply of seven 'basic crops' (corn, cotton, milk, peanuts, rice, and wheat. The AAA offered payments to farmers (meaning land owners) if they would take some of their land out of production. Some farmers refused to particioate in the AAA program, but most appeared to have particvipated. Even many who participated did not like the Government controling their operatrions, but given the condituions they had little choice. There were unintended consequences of the AAA farm support payments. Many farmers, especially in the South, turned some oor most of their land over to tennant farmers and share croppers. Thus these farmers when they cut back production forced tennants and share croppers off their land. The AAA at a time of high unemployment added to the unemployment roles. Farmers also modernized their operations (mechnization, insceticides, herbicides, fertilizer, ect.). Here the farmers were assisted by the Rural Electrification Administration (REA) which brought electricity from the cities into rural areas. The AAA program did not succeed in increasing farm prices significantly because the improving yield because of increasing effivcency meant larger crops, albeit land was taken out of pfoduction.
Tthe Supreme Court ruled that the AAA was unconstitutional (1937). This was one of the rulings which set the President on his court packing effot. The idea of farm supports and parity were subsequently reenacyed by CVongress and remained the foundation of Federal farm policy for decades. The AAA did suceed in ending farm tenency and sharecropping in America. This may not be considered a bad thing, but it created a good deal of pain for the individual displaced because there were no jobs available for them in other sectors. As a result, another New Deal agency was created, the Farm Security Administration (FSA), in part to deal with the thousands of individuals duispossed by the AAA.
Business Advisory Council was not aan agency, but an advisory board that lasted long after the New Deal. Secretary of Commerce, Daniel C. Roper, formed the Business Advisory Council (BAS) (June 26, 1933). The purpose was to create a panel of big businessmen to provide unofficial advise to the President on economic/business matters. Many of the most important businessmen participated, but few were Democrats or would support New Deal programs. The panel was thus a disappointment to Roper who had expeced to cultivate support for the New Deal probably more than seeking business guidance. Even so, the Council came to be known as Roosevelt's tame millionaires. Sidney J. Weinberg, Senior Partner of the New York investment house of Goldman, Sachs & Co. came to be a leading figure on the Board.
Roper and the President largely ignored the Council's advise which almost unanimously provided advise that varied from the New Deal's orientation of blaming the Deopression on business and ignoring the Government's role. This is one reason the Depression was more severe and lasted longer in America than many other countries. The BAC became more important as Europe moved toward war (1938). At this time it becanme increasingly obvious that business would be necessary to create the all-important Arsenl of Democracy. The BAC was helpful in coordinating the huge increases in defense spending. One of the appointees was Averell Harriman who the Presudent would appoint as the Lend Lease coordinatior in Britain.
Youth benefitted from the Civilian Conservation Corps (CCC). President Franklin Roosevelt established the CCC, only a month after taking the oath of office in 1933. It was one of the first alpahbet soup agencies the President established under his New Deal. The CCC was created for boys who had finished school and couldn't find jobs. They worked in national parks and forests throughout the country, earning the nick name of the Tree Army. It is estimated that the CCC youths planted 200 million trees among their many projects. It was the largest program of reforestation and conservation in American history. This environmental program provided employment for 2.5 million youth and young unmarried men from age 17 to 25. The maintained and restored forests, beaches, and parks. The CCC built numerous forest roads, campgrounds, ranger stations and trails, many still used by park visitors and campers today. The stipend was only $1 a day for regular enrolless, but included received free board and job training. Assistant Leaders got $36 and leaders $45. Each month, $25 of their $30 salary was sent home to their families, many of whom were on relief. The money not only fed the families, but put money into local economies. This was pump-priming in New Deal terms. The CCC also provided their clothes, items similar to what the army wore. Youths who joined up were issued clothes for work and dress uniforms of spruce green in the winter and khaki for summer wear. They wore stripes on their uniforms. Two stripes were Assistant Leader, three strips for the Leader. I believe they were also provided work clothes. The CCC youths were lodged in camps and provided good food and medical care. The camp facilities varied. Many were made up of barracks-like building, often of wood and tar paper. Other worked from tent camps (figure 1). There were about 1,300 camps. During World War II, some of the camps were turned into prisoner of war (POW) camps. The program operated 1934-43. There was also a similar, but much small program for young women. About 8,500 women participated. Many New Deal agencies were sharply criticised, usually by business groups with the recurring charge of socialism. The CCC was one of the most popular and least criticised of all the New Deal programs.
The Farm Security Administration (FSA) was one of several New Deal agencies designed to assist rural America. A small effort conducted by the FSA was to document Americans living in poverty in rural areas by creating a photographic record. The result is a remarkable set of photigraphs of great historical significance. One of the small group of photographers was Dorothea Lange who took the moving photograph here. These images appeared in magazines and newspapers as Americans debated the Depression and how to address it. The program drew the ire of Congrsssional Republicans who attempted to restrict the finding and eventually kill the program. This became a real problem after the Comgressional byelection in 1938 returned many Republicans and conservative Democrats to Congress. The collection might well have been lost, but the program afministers managed to transfer the archive to the Library of Congress. Dorothea Lange went on to become one of the most significant American photographers. She later worked for the War Relocation Authority (WRA). She is particularly know for her photographs of the Japanese Americans intened during World War II.
The Federal Emergency Relief Agency (FERA) was one of the first New Deal Agencies to be established by President Roosevelt after assumed office (March 1933). It was just as its name applied--emrrgency relief. There was no time to conduct aetailed pln and assessment. What was needed to get money to desperate people. The Presuident placed one of his closest advisers in charge--Harry Hopkins. This was a sign of the importance given to the agency. (Hopkins woukd also be put in charge of the Works Progress Administration (WPA) and Lend Lease), the two most imprtant programs of the Roosevelt Administration. One to fight the Depression, the other to win World War II. FERA would eventually be assumed in the WPA (1935). Under the Hoover Administration (1929-31), the Fedral Government began offering loans to the states to finance relief programs. Not all states applied. One of the states most active in efforts to fight the Depression was New York led by Governor Franklin D. Roossevelt. His leadership and efforts to fight the Deoression as it worsened was largely why he won the Dempcratic nomination for presuident in 1928. Roosevelt had set up a New York state agency--the Temporary Emergency Relief Administration - TERA (1931). ) TERA was managed by Harry Hopkins, a close adviser to Governor Franklin D. Roosevelt. More Federal funds became available with the passage of the Emergency Relief and Construction Act (1932). Roosevelt immeduately upon assuming office asked Congress to set up FERA -- which gave grants to the states to finance relief efforts (May 1933). He appointed Hopkins to head it. Along with the Civilian Conservation Corps (CCC) it was the first of the many New eal relief operations. FERA's main focus was unemployment and it attemopted to create unskilled that anyone could fill in local and state government. This proved more expoensive than just making direct cash payments, at the time referred ton as 'the dole'. Many of the unemployed, hoever, prefered a job, ny job, to acceping the dole, as a matter of self-esteem. FERA during it short life span issued states and localities $3.1 billion in funding (May 1933-December 1935). 【Trowbridge】 Thst of course would be much more today--over $70 billion in 2023 dollars. This provided jobs for over 20 million unemployed people who worked on public facilies thrioughout the ciountry. As unemployment increased, and fearful of the the danger od what might iccur during the winter of 1933–34, FERA established the Civil Works Administration (CWA). Some $0.4 billion was used as a short-term measure to create jobs. FERA was shut down and its operations assumed by two major new Federal agencies -- the Works Progress Administration and the Social Security Administration. Some small programs were assumed by the Resettlement Administration
The New Deal measures involved government directly in economic areas that had never before been contemplated. The National Industrial Recovery Act (NIRA) involved steps in the direction of a planned economy and was the initial center piece of the New Deal. It notably suspended anti-trust laws and authorized an alliance of industries. The NIRA required corporations to create industriale codes of fair practices. This included most notably fixing wages and prices. These codes also include production quotas, restricted other companies from emtering into the various industrial alliances. The idea was to restrict competition which of course a key ingredient in the success of capitalism. A major idea in Marxist thinking is to improve effecencies by eliminating competition. The NIRA industral codes were an attempt at industrial self-regulation, an attempt to plan the economy. It was believed that this would return the economy to stable growth and prevent any further depression. Employees were given the right to organize unions, something orgnized labor was fighting for, but not yet an established legal right.
The NIRA created the National Recovery Administration (NRA) to oversee compliance. The NRA worked with coroorations in creading the industry-wide codes. It had the authority to make voluntary agreements with companies on such matters as hours of work, pay rates, and prices. The NIRA oversaw the creation of more thn 500 of these codes. Corporations that voluntarily complied displayed the NRA Blue Eagle emblem in their factories and stors, identifying NRA participation. In a landmark decision, the U.S. Supreme Court declared the NIRA unconstitutional (May 1935). A unanimous decision in the 'Schechter Poultry Corp. v. United States' ruled that the NIRA authorized legislative powers to the NRA. a violation of the Constitution's allocation of all such powers to Congress. Many of NIRA provisions concerning organized labor would be eenacted in subsequent legislation.
The Public Works Administration (PWA) was a New Deal agency yhat lasted throughout the New Deal (1933–39). It was creted primarily to crete jobs by funding public work, meaning the construction of highways, public buildings, and imoprtant infrstructurr projcts. It was authorized by the National Industrial Recovery Act (June 1933). This created the National Recovery Administrstion (NRA). The Supreme Court struck down the NRA, but not all the NRA projcts. The PWA operted under the direction of the Secretary of the interior, Harold L. Ickes. PWA spending totaled about $4 billion, roughly 10 percent of New Deal spending. Unlike many New Deal agencies, the PWA left a huge physical imprint. This included new school/educational buildings (70 percent); new courthouses, city halls, and sewage-disposal plants -- an interesting combinastion (65 percenO); new public health facilities (35 percenty); and new roads, bridges, and subways (10 percent). THe PWA was ended as the economy began to recover and the country began to preosre for war (1939).
President Roosevelt established the Resettlement Administration (RA) by an executive order (May 1, 1935). The RA consolidated a variety of programs relating to land use planning and rural relief from several Federal departments. The RA became an important part of the New Deal's plan to assist rural America which had been a state of depression since the early-1920s, well before the rest of the country was hit by the Depression. The Presuident chose Brain Truster and undersecretary of agriculture, Rexford G. Tugwell, a New Deal stalwart to Lead the agency. Tugwell found Will W. Alexander of the Commission on Interracial Cooperation to be ghe assistant administrator. The RA included a variety of programs to address the problems of rural America. It became the New Deal's comprehensive agency addressing rural issues. Some of these prograns canme from FERA, but unlike FERA, the RA had time to study the issues an iniitiatre more comprehensive efforts. This is not to say that gthey were all the right effirts. Many in the agency including Tugwell and Aklexander believed that there was siomething fundanmentally wring with capitalism and that major reforms were needed. Given the demensions of the problem, they can niot be faulted for this line of thinking. Unbeknownst to the New Dealers like Tugwell and even President Roosevelt himself, is that it was not businees that caused the Depression and turned an ordinary market decline into an economic catastrophe, it was Government, especially the Federal Reserve.
One program which undeniably improved farm life and productivity was the Rural Elecrification Administration (REA). This made farm life not only easier and safer, but American farmers vastly more productive. Utilities becuse of the small number of customers per mile of line were unwilling to run lines into rural areas. REA helped finance cooperatives organized by the farmers. The result was the ekectrifiction of rural areas. Which revolutionized rural life. It was probably more significant than all the other New Deal efforts to aid farmers, except perhps croop supports. And in this case it was not grant, but loans that got paid back. There was criticsm promoted by the utilities that cooperatives were not as American as corporations. They had a Soviet sound to them. Of course volutary cooperatives were far different thn the collectives forced upon Soviet farmers. The issues became less clear cut after World War II when the suburbs began expanding into rural areas and from use of electricity increased to the point that utilities became more inteesested in serving rural areas.
One of the New Deal's touchstone achievements was Social Security. One of the groups most adversely affected by the Depression was the elderly. And the New Deal fially deltwith the long festering problems faced by elderly Americans. Congress passed the Social Security Act creating the Social Security Board (1935). To get the new agency in opertion as soon as possible, personnel were provided by existing Federal agencies. And two lions of the New Deal were at the forefront. Temporary funding was obtained from Harry Hopkins' Federal Emergency Relief Administration (FERA). Frances Perkins, Roosevelt's long serving Secretary of Labor, was a key founder, offering one of her Assistant Secretaries, Arthur Altmeyer, to be an initial Board member. She even dinated her high-backed red-leather executive chair to Altmeyer since the SSB began witth no furniture. The Board began with three presidentially appointed executives. Social Security was created as an old-age opension system. Something tht major European countries had long administered. It was a federal safety net for the elderly, but wouls eventually be expanded tomassisstb the unemployed and disadvantaged. The principal achievement of the Act was to create a retirement system based on payroll tax contributions. Corporations might offer retirement benefits, but many Americans wirked into their 60s without any retirement system in place. Retirement was based on personal savings and family support. The Social Security Board became the Social Security Administration which implemented the Social Security Act. It was not meant to be the sole means of retirement, but to suplement savings and retirement benefits which has led to issues the program fasces today.
The Tenessee Valley Authority (TVA) sought to remake the physical and social envirmoent of an entire area. TVA, was created (1933) as one of President Roosevelt' first New Deal agencies. It was an epansion of a dam projrct began by President Wilson at Muscle Shoals, Alabama (1916). TVA was based on building dams on the Tennesse River to cintrol periodic flooding and generate electrical power. This created jobs in the region and provided electricity to many rural communities for the first time. Urban America by the 1930s was electrified. This was done by private utilities. These utilities hesitated to extend service into rural areas because the number of consumers along a mile of line was only a fraction of that in the cities. This was an issue also addressed by the Rural Electrification Administration (REA). The Tennesse Valley comprised areas not only in Tennesse, but also six other southern states. TVA was envisioned as not only a federally-owned electric utility, but a regional economic development agency. It continues today as the the largest public power provider in the United States. .
The Works Progress Act involved the Government into virtuly every area of the economy. Jobs were found for virtually every area of employment. There was also major steps made in Government social programs. An important part of the First Hundred Days was expanding relief (money and food) programs to the unemployed and oter afflicted groups. Relief was, however, a stop gap measure to allow Americans to survive the Depression until jobs once more became available. The Depression persisted. Here economists differ on why this was, but the private sector did not recreate the jobs that had been lost. As a result, another flurry of New Deal legislation followed in 1935. This was in part possible because of the Democratic Congressional victories in the 1934 by-election. The new programs included the Works Projects Administration (WPA) which provided jobs not only for laborers but also artists, writers, musicians, and authors. The WPA was in large measure the public face of the New Deal. The WPA along with Social Security became the center pieces of the New Deal. WPA also became perhaps the most controversial New Deal Agency.
President Roosevelt's New Deal not only created a lot of new agencies to deal ith the Depression ctisis, but expaned funding for existing programs. Of all Federal agencies more attention was given to the Department of Agriculture than andother depatrment. One of the most popular New Deal figures was Agriculture Secretary Henery A. Wallce, although not with the Democratic Party estsblishmet. He work tirelessly to improve American farming through imprived methods, research, and a ange of innivaive programs. His major gioal was to rise farm prices. He was the most outspolen liberal in the cabinet. It is not accident that President Roosevelt chose him as his 1940 running mate. It is stateling that a Secretary of Agriculrur becameso favoravlt disposed toward the Soviet Unio which presided over the greatest agricultural failure in human history. Many of the new Federal agenies were established or became part of the Department of Agriculture. County extension offices offered services to farmer around the country. Here both Federal and state efforts were combined. This included research on crops and farming methods cinducted at Land Grand cilleges and insitutions. This provided farmers a great deal of valuable informtion on crops, methods, soil coservstion, and topics of interest. Preventing another Dust Bowl was a high priority for the New Deal. Soil conservatiion was so important in preventing another Dust Bowl that a new Soil Conservatiion Service was established within the USDA (1938). The New Deal did not solve the American farm problem. This was primarily a matter of over production. Americn farmers were too good for theor own good. The New Deal did, however, solve the Dust Bowl. It has been almost a century now and there has been no repeat of the Dust Bowl, lage becuse of the soil conservtion masures dopted by Americn frmrs bginning with he New Deal. Also important to the New Deal was the Department of Labor. We do not see as many new programs and agencs in Labor, mpre Americans were affected by Labor reform than the agricultural programs.
These and other New Deal programs resulted in greatly increased spending and unbalanced budgets. This led to increasingly criticisms of Roosevelt's programs. He became, as a result, one ofthe most contriversial president's in American history.
President Roosevelt's rhetoric was very effective in restoring the morale of the general public. This gelped restore confidence in Governmnt. Hirhetoric about business was very different. His genal attitude was tht business had caused the Depession. He coined the term 'economic royalists'. Such rhetoric while it had political appeal was nort the sort of talk that would restore confidence witghin the business community. The President seem to feel that business caused the problem anf government was going to fix it. He does not seem to have recognized the need to create the kind of business enviroment in which invest and business expansion could resume.
Perhaps the grerest mistake made by the Government, both the Hoover Administration nd New Deal New Deal was tax policy. President Hoover was committed to balalacing. This of course necver occurred. And President Roosevelt was also committed to balancing the budget. He criticized President Hoover for defecit spebding in the 1932 presidential election. Democratic and Republican Congressmen also advicated closing the budger defecit. President Roosevelt upon assuming office launched proigrams that caused eben larger buget defecits. His critics complained about defecit spnding and the President never quite lost interest in balacing the budget. Because there was interet in balcing the budget by both Republicans and Demorats. The Hovr Administration and Congress began atazation policy that would esentially be followed by the Roosevely Administration.
The Hoover Adninistration sked for tax increases and received support from brh Semicratic and Reoublican Congressmen. Congress passed the Revenue Act of 1932 just as the 1932 Presudential campaign was beginning (June 1932). Key elements of the Hoover tax law, including regressive consumption taxes, became a key element of Federal finance throughout the NEwcDeal. It was the largest peacetime tax increase in American history. Congress estimated tht the tax increases would generate some $1.1 billion in additional revenue. The law was designed to obtain much of the additional recenue grom rich people. Congress raised income tax rates for everyone. The top marginal rate were increased from 25 to 63 percent. Effective rates on the richest 1 percent of Americans doubled. 【Brownlee】 Congress also increased estate tax rates and cut the exemption by half. There were also - also included an array of regressive excise taxes. The law created entirely new levies (including taxes on gasoline and electricity), as well as raising rates for existing levies. These increases did not affect the rich, but did hit the very goup the New Deal clomed to be trying to help--the Forgotten Man. Presidebt Roosevelt once in office, however, did nothing to backaway from these regresive excise taxes. In fact, excise taxes provided a third to half of all Federal revenue throughout the the New Deal.
President Roosevelt decided to continue the policy of high tax rates to help close the griwing budget gap. The President and many New Dealers believd that incresing taxes on the well off would mean more money for the needy. This for many New Dealers was both a financial and moral isue. The actual economic impact of raising taxes was not consudered, meaning raising taxes on the well off might impact investment and business activity which would negatively impact the needy as well. Despite all the work on economics, this is still a strongly held belief among Amerucan liberals--mot recently expressed in the occupy Wall Stret Movemnt.
Before the New Deal, the American people had very very limited expectations. After the New Deal, Americans began expecting much more from the Federal Government.
One question is to often ignored by liberal historians for which the New Deal is a virtual icon. Did the New Deal help end the Depression or did it actually prolong it. Often ignored is the fact that the Depression in other countries such as England and France, although the continuing Depression in Aneruca was a drag on other economies. New Deal defenders might argue that conservative and business interests were oposed to basic changes and unsettled by the more invasive government role. Support for labor in particular required adjustment on the part of industry. Some may argue that the oponets of the New Deal attempted to sabatoge it. This is rather a streach because it would mean financial costs to themselves. But it surely would have affected the invesrment climate. New Deal critics argue that Government spending and defecit spending absorbed available credit and thus crowded out or made it more difficult for the private sector to recover. This is a very difficult issue which is still a matter of economic discussion. While President Roosevelt's motives were questioned at the time, I think it is clear that his goal and that of New Deal figures were humanitarian. But humanitarian goals do not neceasily mean that the Nea Deal shortened the Drepression. The the question of whether they helped end or prolonged the Depression is a very important question and one because of the basically liberal orientation of academia, one which hads not been well addressed..
Brownlee, Elliot.
Thorndike, Joseph J. "New Deal Taxes: Four Things Everyone Should Know" (November 20, 2008)..
Trowbridge, D.J. A History of the United States: 1865 to Present (Asheville, NC: 2016).
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