The New Deal
New Deal was established in 1933, by President Franklin Roosevelt, in order to
fight against The Great Depression. Roosevelt basic philosophy was using
relief, recovery, and reform commonly known as the three r’s. The main idea
behind this philosophy is to provide financial relief to Americans, let the
economy stabilize, and then fine tune the acts’ created. Numerous agencies
known as the Alphabet Agencies were created in order to assist the general
population through financial and work support. The New Deal began when
Roosevelt declared a “bank holiday”, closing all bank for four days until Congress
can pass a bank reform declaration (New Deal, 1999).
The First Alphabet Agency
first agency formed was the Agriculture Adjustment Agency. The agency provided
farmers with subsidies to reduce their crop production and leave some of the
land unused. Later the Supreme Court found this unconstitutional, Congress soon
passed the Soil Conservation and Domestic Allotment Act which allowed the
government to pay farmers to reduce their production. The Farm Security
Administration was soon formed to give farmers loans to help move to better
land. The FSA crucially helped famers whose land was destroyed by the dust
Who the Alphabet Agencies Left Out
Social Security Act was set up to help the elderly who were in poverty survive.
The act started a pension system, in which workers and their employers would
pay a payroll tax, beginning in 1940, to provide an old age pension of $10 to
$85 a month for many workers, though it excluded domestic servants and
agricultural workers (New Deal, 1999). This act left farmers out in which when
they become elderly, they will have to continue to work regardless of the
health condition to have an income.
Rural Electrification Administration was created to allow farmers to take out
low cost government loans in order to sponsor low profit electric cooperatives.
In 1935 one out of ten farmers had electricity and in 1950, nine out of ten farmers
had electricity (The Second New Deal, 1999). In the same year of 1935,
Roosevelt’s tax code hurt the upper-class the most. It was taxing the rich at
almost 75% (Rauchway, 2008).
First Step to Equality in the Work Place
National Recovery Administration was created to ensure businesses were treating
their employees fairly. The New Deal (1999) says that this is what the NRA did,
“This administration called for a “blanket code” where businesses had to have a
minimum wage of 30-40 cents an hour, a maximum work week of 35-40 hours, and
getting rid of child labor”. This is the first step that allowed the government
to make sure employees were being treated fairly in their wages. The government
knowing how much employees are getting paid allows them to have a picture on
the average cost of living.
agencies that worked well together was the Federal Emergency Relief
Administration, which gave states money who ran out of the relief funds, and
the Civil Works Administration, which provided work relief for more than four
million citizens (New Deal, 1999). These two agencies were made as a temporary
solution and not a long-term solution. The biggest issue of The Great
Depression was Americans without work. In order to get money flowing through
the economy, Roosevelt need to get Americans in jobs. Roosevelt gave states
more money to create jobs.
The Great Depression is an event that shouldn’t be
taken lightly. Americans needed a President that would fix the issue in a fast
manner. A high priority of the New Deal was to ensure farmers can grow crops,
so Americans can eat. The NRA was established to create the first steps to
equality in the work place. The biggest act that was passed that still works to
day is the Social Security Act. The combination of The New Deal and The Second
New Deal got us out of the worse state the economy of the United States has