Revision Diary

Recovery from Depression, 1933-1941


Election of FDR; the fireside chats; banking crisis; New Deal and the Alphabet Agencies: TVA, NRA, WPA, CCC, AAA.

Effects of the New Deal in achieving its aims; limitations; opposition to it;

impact of World War II on American economic recovery.


Make sure you have detailed factual knowledge about AND HAVE THOUGHT ABOUT the following issues and topics:


1.  The First New Deal.

2.  The Second New Deal.


and that you are able to explain:

3.  How successful was the New Deal? [5Rs, 3Ds]

4.  Woo opposed the New Deal? [BRASS]






The First New Deal


In November 1932 Roosevelt was elected by a landslide.   His election promise was ‘a New Deal for the American People’.  

In early 1933 (before he took office) there was a ‘run on the banks’  

Congress gave Roosevelt emergency powers from 9 March to 16 June 1933 (the 'Hundred Days') and he brought in the ‘New Deal’.

The New Deal tried to increase confidence (‘the only thing we have to fear is fear itself’), and it spent money to try to get the economy going again – particularly on the ‘alphabet agencies such as the TVA, NRA, WPA, CCC and AAA.



1.  Confidence:

a.  Bank holiday: The Emergency Banking Act closed the banks for four days to check their accounts, and they reopened with the backing of the Federal Reserve (restored confidence in the banks.)

b.  Stock Exchange: The Securities and Exchange Commission introduced rules for the Stock Exchange to prevent another Crash like 1929 (restored confidence in the Stock Market.)

c.  Abolished Prohibition: (restored public confidence in the laws.)

d.  Fireside Chats: FDR described his policies in radio ‘fireside chats’ (homely and reasonable – and blamed others – ‘like a father discussing public affairs with his family in the living room”).  Everyone who sent him a letter got a reply (restored confidence in the government.)


2.  Finance and Economy:

a.  Bankruptcies: The Farm Loan Act and the Bankruptcy Act prevented banks from foreclosing on solvent businesses.   The Home Loan Act and the Home Owners Loan Corporation did the same for ordinary home owners.

b.  Prices: The Agricultural Adjustment Act (AAA) paid farmers to take fields out of production (to stop over-production and drive up prices).  

c.  Wages: The NRA (National Recovery Administration) was set up; businessmen could display a blue eagle symbol if they promised to cut production and pay good wages – 2.5 million firms, employing 22 million people, joined the scheme.  

d.  Money: Roosevelt borrowed huge amounts of money to finance the New Deal.  


3.  Alphabet Agencies:

a.  CCC (Civilian Conservation Corps): provided paid conservation work for (by 1941) 2.5 million unemployed young men.

b.  FERA (Federal Emergency Relief Administration): provided matched funding to help states organise unemployment pay.

c.  WPA (Works Progress Administration): provided work for the unemployed building airports, schools, hospitals or bridges.

d.  TVA (Tennessee Valley Authority): built 21 dams in ten years – stopped flooding, provided cheap electricity and provided work.



The Second New Deal


By 1935, Roosevelt's New Deal was still hugely popular with the people, but it was running into opposition from the Republicans and businessmen (who said that it was expensive and wasteful) and the Supreme Court (which ruled the NRA and the AAA illegal, because they took away the right of states to run their own affairs).   The government was accused of ‘boondoggling’ (making false jobs just to give people a wage).

So, for the 1936 election, Roosevelt followed a much more radical 'reform' agenda.



1.  National Labour Relations Act (1935 – also known as Wagner Act):

●   To replace the banned NRA.

●   Protected workers' right to join a trade union; set up the National Labour Relations Board (NLRB) to prevent employers from victimising workers.


2.  Soil Conservation Act (1935):

●   To replace the banned AAA.

●   Allowed the government to continue subsidising farmers. 


3.  Social Security Act (1935):

●   America's first system of social welfare.

●   set up a national system of unemployment insurance and old-age pensions, and gave help to the disabled and children in need


4.  National Housing Act (1937):

●   Provided loans to buy houses

●   Reduced excessive rents.


5.  Fair Labour Standards Act (1938):

●   Set hours and conditions of work

●   Fixed a minimum wage.







How Successful was the New Deal?

(5Rs, 3Ds)

Successes [the 5 Rs]:

1.  Relief for millions of people with their mortgage, jobs etc. from the alphabet agencies.

2.  Roads and buildings: The PWA and the TVA provided roads, airports, schools, theatres, dams etc

3.  Reform: new laws about social security/ minimum wage/ labour relations and trade unions.  

4.  Roosevelt: was elected four times.

5.  Repercussions: Democracy survived in America (unlike Italy and Germany).   The New Deal became a model for the British Welfare State of 1948 and New Labour’s ‘New Deal’ policy of 1998.


Failures [the 3Ds]:

1.  Didn’t end the Depression: by 1935 unemployment was only down to 10.6 million, and – although it fell to 7.7 million in 1937 – when Roosevelt cut back government expenditure in 1938, it rose again to 10.4 million.  .

2.  Damaged Blacks: Roosevelt’s attempts to give workers rights and set a minimum wage meant that many firms simply sacked workers – and Black Americans were always the first to be sacked.

3.  Drew opposition: many Americans opposed the New Deal, including the Republicans, businessmen and the Supreme Court.  



Who Opposed the New Deal?


a   Businessmen hated the New Deal because it interfered with their businesses and supported workers’ rights.  

b   Republicans: after 1938, Republicans took over the Senate, and Roosevelt was unable to get any more New Deal legislation through.

c   Activists like Huey Long (Senator for Louisiana who started a Share the Wealth’ campaign to confiscate fortunes over $3m) and Francis Townsend (who campaigned for a pension of $200 a month) said it did not go far enough.

d   State governments said that the Federal government was taking their powers.

e   The Supreme Court ruled that the NRA and the AAA were illegal because they took away the States’ powers.   (Because of this, in 1937, Roosevelt threatened to force old Supreme Court judges to retire and to create new ones.)


Revision Focus

This is a Paper 2 topic, so you need to have factual KNOWLEDGE IN DEPTH but also a degree of understanding which will allow you in the exam to write MULTI-CAUSAL EXPLANATIONS of the key issues.



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