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The New Deal - Roosevelt Program To End The Great Depression
US History essay. Grade: A
When Franklin D. Roosevelt became the President of the United States in 1933, is was clear that something had to be done. The US was suffering from the previous crash in the stock market, the earlier farm crisis, and the fact that the gab between rich and poor had grown even more. FDR’s answer to this is what we know as the New Deal. It was a three-pronged strategy, often thought of as the three R’s. Relief Programs meant to ease suffering, Recovery Programs hoping to rebuild the economy and finally, Reform Programs to prevent future crises. Even though the New Deal didn’t manage to fully overcome the Depression, there is no doubt that it’s programs and Act’s changed American society and government.
Congress passed several relief programs, and one of the most significant ones was the CCC, Civilian Conservation Corps, from 1933 to 1935. It was meant to employ young men, by having them plant trees, set up firebreaks, and build dams. In addition to this, the Corps offered courses to workers which they could retrieve job skills from or a high school diploma. This is one of the programs that truly was successful; after 1941 2.5 million men had been involved with camps, and with that gotten employed and educated. Together with this program, there also followed others. One of the programs meant to give direct relief was the FERA, Federal Emergency Relief Administration. It got 500 million dollars to give to states, cities and towns. The head of FERA, Harry Hopkins, wanted work programs to replace direct relief. He managed to get the CWA, Civil Works Adm., set up, a program that eventually took over many of FERA’s previous functions. By 1934, 4 million people had jobs in CWA, jobs including building roads, parks, schools and even airports. The CWA has been criticized for it’s "make-work" projects, for example raking of leaves, just to get people employed. The purpose was to get the moral up among unemployed by employing them, and further more get money into economy as well as ading individuals.
Another problem besides unemployment was the housing industry. 1000 families was loosing their homes each day to foreclosures. Finally, in June 16 1933, the HOLC, Home Owners Loan Corporation, was founded. This corporation helped people by buying up mortgages from banks, and then refinanced them so homeowner would be able to pay payments. When the Depression came to an end, the HOLC had saved over 20% of the mortgaged homes. Recovery Programs besides the HOLC included the AAA. In May 12 1933 the Agricultural Adjustment Act came and with that the Emergency Farm Mortgage Act. They were meant to raise farm income, and give funds to farmers so they would not loose land to foreclosure, and provide farm subsidies (the goal was to lower production and raise prices). The AAA, Agricultural Adjustment Adm., was the Adm. to aid the farmers. The farmers could still feel the farm crises; it’s impact continued. During the spring the AAA and the farmers got together and sat up quotas over how many acres of crop and livestock the US needed. The AAA would pay farmers not to farm; to leave land lie fallow. The AAA defended this policy by referring to the law of supply and demand. This turned out to be the biggest problem to the AAA as they in 1933 plowed under millions of corn acres, and slaughtered millions of pigs. Even tough, it worked, and they saved the farmers from economic disaster. Within two years farm income increased with more than 50%, even though 40 million acres of land had been taken out of production.
The third part of the strategy was the Reform Programs. The most dramatic change in economic policy was the decision to take the US of the gold standard. The government would no longer pay gold in exchange for dollars. Most of Europe had already gone of, and the US was loosing gold through shipments to foreign investors. The President wanted to stop the outflow of gold and raise prices. If the government quit using the gold standard, they would have to print and circulate more dollars, which would lead to inflation. The critics were sure that no one would have faith in the dollar if it wasn’t redeemable in gold. To FDR this didn’t really matter, all the world leaders were pleased with the decision. He proved to be right, the prices went up and the faith in the dollar remained the same.
The New Deal has been criticized, some of it with reason. The government did what’s called deficit spending, they spent more money than the they raised in taxes, and left the US with 300 billion dollars in national debt. Although, the New Deal made lasting effects on American life on three major points: government more involved to help citizens, workers and the environment and helped to preserve American democracy. To sum it up, the New Deal had mixed success in fighting depression, but it certainly eased personal suffering and preserved the nation’s stability. The United Stated had to wait a few years to be fully back on it’s feet, WW2 managed to do what FDR had been trying to do for so long.
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