What Measures did Roosevelt introduce to deal with the Depression? By Mr Portman
President Herbert Hoover I believe in ‘Rugged Individualism’. This means that people should sort out their own problems and the Government should not get involved. I don’t know what all the fuss is about. Prosperity is just around the corner and there shall be a car in every garage and a chicken in every pot.
1932 Presidential Election President Herbert Hoover I promise you a car in every garage and a chicken in every pot. RESULT: A massive win for FDR Franklin Delanor Roosevelt (FDR) I promise the American people a ‘New Deal’.
The New Deal FDR believed that the Government should put money into the economy in order to help the American people. This was something new as Hoover had believed in ‘Rugged Individualism’. This money was put into the economy by employing people. FDR hoped that this would give people money to spend and demand for goods would increase. This would then trigger the cycle of prosperity.
FDR’s first 100 days The American Congress (Parliament) The American Congress granted FDR special ‘Emergency powers’ – the sort of powers he would have if the USA went to war. These powers allowed him to set up a number of agencies that would help the American people. They became known as ‘Alphabet Agencies’ because they were known by their initials. FDR used the radio to reach a large audience of millions of Americans. In these fireside chats, in which he sat in a chair by the fire, he explained in simple terms how he was going to try and solve the problems of the depression. They were hugely successful.
The Banking Crisis <ul><li>REMEMBER: After the Wall St Crash people lost confidence in the banks and withdrew their money. In many instances banks had to close as they simply ran out of money. In an attempt to recover some of the money the Banks decided to call in the money they had loaned out. This had severe consequences for many American people. </li></ul>A Bank in New York just after the Crash FDR had to solve this problem or the economy would simply fail to improve.
The Emergency Banking Act All banks must close for 4 days. During this time I will send Government Officials to inspect your accounts If your accounts are good and you can show that your bank has enough money – then you can reopen. However, if not, you shall remain closed
The New Deal FDR had to deal with the effects of the Depression: HELP THE UNEMPLOYED HELP THE PEOPLE HELP THE FARMERS AND AGRICULTURE HELP THE HOMELESS AND HUNGRY
Helping Agriculture (Prices had fallen so much that it was not profitable to even harvest the crops.) Agricultural Adjustment Administration AAA FDR told the Farmers to produce less crops or less livestock. This was controversial because the Government paid the Farmers to do this. This had the affect of increasing the price of meat and crops and the Farmers were able to make a profit again. However, many Farm workers were made unemployed because there was less work to do.
Helping the Homeless : After the Wall St Crash many people had to sell their homes and possessions to pay off the bank loans and the hire purchase schemes. This created the problem of homelessness. In1932 alone, 250,000 people lost their homes. Federal Emergency Relief Administration FERA FDR set up this agency to provide quick relief for those who were homeless. $500 million was spent on providing soup kitchens and clothing.
Helping the Unemployed : (Before the Wall St Crash the rate of unemployment stood at 3%, by 1932 it increased to 25%. In areas like Chicago 50% of people were out of work. In total, approx. 14 million people were unemployed.) Franklin Delanor Roosevelt (FDR) I believe that the key to solving this crisis is to create jobs and reduce the high levels of unemployment. I need to set up many different agencies to do this. This may be costly but the country needs it.
The Civil Works Administration CWA This aimed to provide as many short term jobs as possible. During the winter of 1933-34 four million jobs were created in areas such as building and improving roads, airports, schools and other public buildings. People were employed to sweep up leaves in parks and to even frighten pigeons away from public buildings. However, once the CWA ended (after the Winter) so did the four million jobs.
The Public Works Administration PWA Dams, Warships and Airports were built by the PWA The PWA aimed at creating long term jobs that would be of lasting value to Americans (Eg: Schools, airports, bridges, battleships, dams etc.) However, the jobs were for skilled people rather than those who lacked a skill or trade.
The Works Progress Administration WPA The WPA gave work to unemployed photographers, artists, actors etc The WPA was similar to the PWA as it built some public buildings. It also gave work to writers, photographers, artists and actors. Unemployed writers were paid to write guide books on America. Actors were paid to tour the country and perform plays.
RESULTS Unemployment went down but it did not solve it. It cost billions of dollars and unemployment increased when spending stopped. The event that actually solved the Depression was . . . . .
WW2 Employment levels increased as the USA sold weapons such as tanks, planes and ships to Britain and France. Employment levels also increased when the Army expanded due to the war against Japan and Germany.