Topic 6, Lesson 5: How successful was the New Deal?

Topic 6, Lesson 5: How successful was the New Deal?

Political Impact of the New Deal

• Roosevelt allowed labour unions to take their place in labour relations and reluctantly recognised that federal government had a role in settling industrial disputes

• New Deal also saw an expansion in the functions of the state and local government

• System became more modern

• People increasingly expected that the federal government would take responsibility for their problems

Topic 6, Lesson 5: How successful was the New Deal?

Economic Impact of the New Deal

• Roosevelt believed in a balanced budget and therefore was reluctant to spend excessively on federal projects

• Population increase of 9 million between 1929 and 1939 but the national total of personal income dropped between these years from $86 billion to $73 billion

Wages averaged $25.03 per week in 1929 and $23.86 in 1939

• In 1933, unemployment was 18 million

• In 1939, unemployment was 9 million

• 19% of the workforce were unemployed in 1938

Topic 6, Lesson 5: How successful was the New Deal?

Social Impact of the New Deal - Relief

• Relief agencies such as FERA and WPA were set up to offer hope to millions of people.

• There were new departments in governmental responsibilities

• The Social Security Act was not strictly a relief measure as it was financed through contributions paid by recipients.

• However, it did set up a national system of old-age pensions and unemployment benefit for the first time.

Topic 6, Lesson 5: How successful was the New Deal?

Social Impact of the New Deal - Women

Mrs Roosevelt was one of the most politically active first ladies

Frances Perkins (Secretary of Labour from 1933 to 1945) was one of many women holding government office

Women (unlike African Americans) did not tend to vote as a group and therefore politicians did not set out to win their support

In 1933, the Economy Act forbade members of the same family from working for federal government. 75% of those who lost their jobs as a result of this measure were women.

NRA codes allowed for unequal wages for women

Some agencies, such as the CCC, barred women entirely

Women earned half the average wage of men

Topic 6, Lesson 5: How successful was the New Deal?

Social Impact of the New Deal - African Americans

Roosevelt needed the vote of Southern Democrats (who were notoriously white supremacists) and therefore, the New Deal saw no civil rights legislation

NRA codes allowed for African Americans to be paid less than whites for doing the same job

African Americans called the NRA the “Negro Run Around” because it was so unfair to them.

The CCC was run by a Southern racist who did little to encourage African Americans to join and those who did faced strict segregation.

Anti-lynching bills were introduced into Congress in 1934 and 1937 but Roosevelt did nothing to support either and both were eventually defeated.

Roosevelt did employ more African Americans in government

The civil service tripled the number of African Americans in its employment between 1932 and 1941 to 500,000.

Topic 6, Lesson 5: How successful was the New Deal?

Social Impact of the New Deal - Native Americans

The Indian Reorganisation Act of 1934 recognised and encouraged Native American culture.

As the New Deal programmes wound down in the 1940s, Native Americans began to set up pressure groups to promote their development.

But they remained among the poorest in society.

In 1943, a Senate enquiry found widespread poverty among Native Americans on reservations.

Topic 6, Lesson 5: How successful was the New Deal?

The 1937 - 1938 Double Dip ‘Roosevelt Recession’

AKA Roosevelt Recession

By 1937, after the New Deal pump priming policies, the American economy was back to its 1929 levels. (Therefore, the New Deal did nothing to improve the American economy but rather return it to its pre-Depression state)

From mid-1938, the recovery faltered as the US was hit by a double dip recession (when a recession is followed by a short-lived recovery and then another depression)

During the recession of 1937-1938, unemployment went up sharply from 14% to 20%.

As unemployment rose, demand for consumer goods fell, leading to further cuts in production and a return to the ‘cycle of depression’.

Topic 6, Lesson 5: How successful was the New Deal?

The Impact of WW2 on the Great Depression

NB: It was WW2 that solved America’s Great Depression not The New Deal.

By 1939, American industry started to grow due to increased weapon production to support Britain’s war effort.

US was also beginning to rearm itself.

Millions of new jobs were created to increase production and to fill jobs left by workers called up for military service.

The motor industry, for example, switched from the manufacture of cars to the production of military vehicles and aircrafts. By the middle of the Second World War, aircraft was being produced at a rate of 1000 per day.

The private and public sectors of the economy were unified together.

Government now intervened in the economy to a far greater degree than during the New Deal.

Strict government controls on prices and wages.

Topic 6, Lesson 5: How successful was the New Deal?

New Deal Histiography

Roosevelt spoke of the New Deal’s aims as ‘relief, recovery and reform’ and it is against these three aims that the New Deal’s successes should be judged.

There has been much debate about the achievements of the New Deal, in particular how it extended the economic and social role of the Federal Government.