THE ACHIEVEMENTS AND SHORTCOMINGS OF THE NEW DEAL

THE END OF THE NEW DEAL

In January 1939, Roosevelt made a speech to Congress. For the first time since 1933, he made no
mention of a New Deal policy. Although many of the Alphabetic Agencies continued to operate, his
programme of economic and social reform was closing down. In its place, the start of the Second World
War became the focus of his presidency.

ACHIEVEMENTS

NEW DEAL AIM 1: RECOVERY

• Raise farm income

• Increase industrial production
• End the banking crisis
• Farmers received over 4 billion dollars from the government.
• RFC helped over 6000 banks to reopen after forced closure in March 1933.
• Helped unemployment fall.

SHORTCOMINGS

Despite these successes, problems remained in all three areas

• Farming: Tenants/farmers were thrown off their land and the recovery relied on regular
government payments.
• Industry: The NRA code did not work as many businesses ignored them. Old industries, like coal
and textiles, remained unprofitable and the entire country experienced a deep recession in
1937-38
• Banking: Despite help from the RFC, 106 banks that had received extra funds were forced to
close.

-By the end of the 1930s, the economy had still not fully recovered. Even though unemployment had
fallen, it was still at 17.2 per cent in 1939.

NEW DEAL AIM 2: RELIEF

In 1933, Americans had been promised direct federal relief and work relief. The following table lists the
successes and failures of the New Deal in keeping this Promise.
AIMS ACHIEVEMENTS SHORTCOMINGS
Provide work relief programmes The WPA employed 8 million The project relied heavily on
people. government spending.
The Work Relief Projects created The work relief projects provided
New Parks, roads and schools. work for only about 40 per cent
in need of it.
Provide Direct relief to the poor Thirty five per cent of the The government did not spend
population received relief from much on relief.
the government. Relief varied from state to state.
The Social Security Act provided The poor needed social housing,
unemployment insurance for the but the government built little.
first time.
The table above demonstrates that the New Deal did provide far more relief than had been offered by
Hoover. The problem was that the USA’s recovery seemed to rely upon government spending.

NEW DEAL AIM3: REFORM

The New Deal brought much-needed reforms to the USA. These included the following.

• Social security: for the first time, the federal government provided help to families, the elderly,
the unemployed and the disabled.
• The treatment of Industrial labour: unions were recognized, minimum wages introduced and
working hours limited.
• The living conditions of agricultural workers: many families were provided with electricity, had
their land improved and were given financial help to keep it.
• Financial regulations: The banking system was centralized and greater controls were placed on
the stock market.

-However, there were limits to the amount of reforms Roosevelt introduced. The social security system
left out large groups of people, including agricultural workers and household servants and the payments
were relatively small. The New Deal also did little to reduce the gap between rich and poor. Most Social
Security was paid for out of people’s wages, rather than federal money. This system meant taxation was
not used to make money from richer people and give it to the poor. As a consequence, by 1940, the gap
remained much the same as it was in 1930.

WOMEN, BLACK PEOPLE AND NATIVE AMERICANS: A person’s background had huge effect on how the

New Deal changed their lives.

 ACHIEVEMENTS
• More influenced in
politics because of the
works of Roosevelt’s
wife, Eleanor
• Given specific help by
the Women’s
professional Division in
the WPA.
• Grants provided for
women with dependent
children due to Social
Security Act
• A black Cabinet gave
black people more
political power.
• 30 per cent of black
families received relief
• Early signs of the end of
segregation, as some
CCC camps were
integrated.
• The Indian
Reorganization Act
restored 7.4 million
Acres of land to tribes.
• Native Americans were
given a chance to vote
and govern themselves.
• The New law recognized
the right of Native
American women to
vote
GROUPS SHORTCOMINGS
• Paid less than men: In
1937 women earned
around half a man’s
wage.
• The number of Women
WOMEN in professional jobs fell.
• Alphabetic Agencies
provided more help for
men: The CCC created
2.5 million jobs for men,
whereas camps for
women offered only
5000 places a year.
• The AAA forced black
tenants off farmland and
the NRA caused many
black people to lose
BLACK PEOPLE their jobs.
• Relief payments were
often lower than those
given to white people.
• Most black workers had
no access to social
security.
• Some New Deal policies,
such as a plan to kill
large numbers of the
Navajo tribe’s sheep and
goats were unpopular.
NATIVE AMERICANS • Most were still very
poor.
• Reliance on New Deal
agencies, like the WPA,
left Native Americans
without help when they
closed down.

THE SECOND WORLD WAR AND THE NEW DEAL

The New Deal was not the only reason the American economy began to recover. Another was the
Second World War. The USA did not enter the war until 1941, but even before then, Roosevelt took
action to try to prevent the allies being defeated by Hitler. In 1939, he convinced congress to allow the
USA to sell military supplies to Britain and the allies. Then in 1941, congress passed the lend-lease act.
This allowed the USA to lend war supplies to any country which might prevent a Nazi attack on the USA.
As a result, large numbers of jobs were created in both industry and agriculture to meet the needs of
the allies.

IMPACT OF THE SECOND WORLD WAR.

Politicians were prepared to enter into far great debt to protect themselves than they had been to
support the New Deal. The jobs created by the government spending on defense meant unemployment
fell. At the same time, the war helped the USA to recover;

• Low farm incomes; the overall incomes on USA farms rose by around 50 percent between 1939
– 41
• Lack of demand for American products; in the first 3 years of the war, USA exports grew by over
70 percent
• Dependency on work relief; the number of people on work relief fell from around 3.3 million in
1939 to 2.2 million in 1941.
- These improvements demonstrated that, while the New Deal eased the pain of the Great
Depression in 1930s, the Second World War made long-term recovery possible.