• Franklin D. Roosevelt
NRA and the AAA
the Early New Deal
New Deal from 1935
Herbert Hoover entered the Presidency as a Republican with a majority
of fellow Republicans taking the majority of congressional seats. As
a candidate, Hoover had assured the public he would order a special
session with Congress to discuss relief for farmers and basic tariff
alterations. He called this session on April 15, 1929; from it came
the Agricultural Marketing Act to help farmers who suffered from low
incomes, and the Hawley-Smoot Tariff
Act involving a great amount of agricultural work.
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Unfortunately for Hoover, months after he became President, the stock
market crash occurred in the same year, leading to his entire administration
occurring during the Great Depression. Hoover approached this period
with the idea that local governments in the states should aid their
needy public, not the federal government. The only attempt made by Hoover
was the Reconstruction Finance Corporation. Behind this establishment
were provisions for the large companies, the idea being that by giving
money to the wealthy, it would eventually circulate through to the poor.
His actions were never made directly for the people. By the time his
four years were over, about 13 million U.S. citizens were unemployed,
and the Democrats had taken the majority of seats in Congress from the
now weak Republicans.
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Hoover announced his belief that the basis of peace was foreign policy.
Though he was against joining the League of Nations, he cooperated for
this reason. On this note, the main achievement made by Hoover was also
due to this belief of foreign policy, the signing of the naval treaty
at the London Naval Conference of 1930. This treaty set limitations
on the number of battleships, cruisers, and other vessels built for
In the beginning, Hoover was persistent in demanding that the European
nations pay debts from past wars to the United States. However, the
depression was felt by many of the European countries as well, causing
their debts to again be suspended. It was after Japan’s invasion
of Manchuria in 1931 that the major crisis of foreign policy truly began
for this president. In the next year the administration declared the
“Stimson doctrine”, stating the U.S. would not recognize
this conquest of territory.
In conclusion, Hoover made some advances for America, but in retrospect,
much more could have been accomplished during the years he was president.
Hoover’s successor became more popular among the people, for he
did much more in the way of their needs. For Roosevelt’s administration,
please continue on.
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The 1932 Campaign
In the 1932 Campaign, President Roosevelt ran against President Hoover;
but Roosevelt was the one who caught the public eye with a “new
deal.” Unlike the Republican Hoover, the Democratic Roosevelt
support direct relief and public works. The ideals he spoke for included
public power, old age pensions, unemployment insurance, repeal of prohibition,
and the regulation of the stock exchange.
However, when speaking about recovery and reform, he was very vague.
He also was not too clear about foreign policy and tariff during this
time. For these reasons Roosevelt “alienated” some of the
so called ‘higher class’ who left to the Communist and Socialist
parties when the election was held. But, to others, Roosevelt seemed
the only likely alternative to Hoover, who many believed was the cause
of the Depression.
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The New Deal
On March 4, 1933, Roosevelt’s inauguration was set at a time when
the economy was in a desperate situation. Nearly a quarter of the nation
was unemployed, and more than half of those unemployed were looking
for work but able to find it. Hundreds of thousands of people lived
in small shacks of whatever scraps could be found, while others committed
suicide and the amount going into the mental institution grew noticeably.
From the time that FDR first came into the public eye as a candidate
for president, he tried to restore confidence from the voters. In his
inaugural address he stated, “The only thing we have to fear,
is fear itself.” Besides this famous quote, he included that he
would simply not stand by and watch the Depression deepen further. In
closing, he declared a Bank Holiday to send government officials to
banks, keeping people from retrieving their money all at one time, and
at the same time reviving the confidence for American citizens. He also
called a special Congressional session.
Once in the White House, FDR began with conservative requests. He began
by securing the passage of an emergency banking bill. This bill offered
financial help to private bank owners instead of going national, as
would have been the alternative. Now long afterward, he forced an Economy
Act cutting about 500 million dollars for veterans, taking some from
federal employees. This caused a slight amount of deflation, making
purchasing even more difficult.
Next, Roosevelt initiated a relief program, a program that was much
more apparent to the people. He encouraged Congress to set aside 500
million dollars for federal relief and grants to the individual states.
The Federal Emergency Relief Administration was created in 1933 and
headed by Harry Hopkins. Hopkins quickly spent the money, and supervised
1.5 billion more dollars to direct grants.
Later during that same year, Congress also approved funding for the
Civilian Conservation Corps (CCC), the Home Owners Loan Corporation
(HOLC), and the Public Works Administration (PWA). The CCC later employed
over 2.5 million young men on useful conservation work. The HOLC offered
largely needed assistance to mortgagors and homeowners. The PWA, while
slow to act, ultimately generated billions into construction of large-scale
projects. Though many wanted more, many citizens were grateful to Roosevelt
for what was already being completed. The new relief programs of the
New Deal gave hope not only to the average white man, but also to the
lower than average blacks, Latinos, and those others doing just as badly.
At the same time he did a lot to restore confidence in the government.
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In the beginning of the New Deal, reform measures were taken as well.
The Federal Deposit Insurance Corporation (FDIC) was a corporation pushed
along primarily by Congress. Another measure of reform issued by Congress
in 1934 was the Securities and Exchange Commission (SEC); this commission
moved to create a vigilant beginning toward the regulation of the stock
However, it is important not to forget the most significant reform,
the Tennessee Valley Authority (TVA), created in 1933. This corporation
to Tennessee built multipurpose dams to control floods and generate
inexpensive hydroelectric power. The dams helped to manufacture fertilizer,
foster soil conservation, and cooperate with local companies of the
time. These dams described still exist to this day, and continue to
prove one of the most inexpensive means of electricity in the nation.
The reason for this being the government still funds these dams, and
they are not a private business; they are not competing for money, but
are only there for the citizens to provide a service.
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The NRA and the AAA
Roosevelt’s wishes for economic recovery were put solely into
two administrations created during the special session of Congress soon
after his inauguration in 1933. The two administrations created were
the National Recovery Administration (NRA) and the Agricultural Adjustment
The NRA was to prevent unfair competition within individual industries
by encouraging those within those industries to create codes. These
codes entailed such guidelines as pricing and production policies, and
rights of collective bargaining, minimum wages, and work hours. At the
same time the AAA focused on increasing farm prices through high demand,
which was accomplished by the government paying the farmers extra money
to harvest less produce.
Although the NRA looked to be successful, it became less effective after
a while. Small businesses claimed these codes favored large corporations.
Progressives rambled about the NRA releasing monopolies from prosecution.
And, in the first place, some executives procrastinated in signing agreement
with these codes, while others put them off completely. Had the codes
been enacted more quickly and with more emphasis, these minor liabilities
may not have been such a problem, but this was not the case. The NRA
later proved a failure in sponsoring the socialist ideal of a government-business
cooperation and possible recovery, until the Supreme Court deemed it
unconstitutional in 1935.
The AAA proved to be more successful. The income by farmers increased
by 50 percent during Roosevelt’s first four years of his presidency.
However, some of the demand was made because of tremendous droughts,
especially in the area of the Great Plains. These droughts ruined thousands
of fields, causing prices to be even higher. What was worse was that
those who needed the produce often could not buy it at its high prices,
when they barely had any money at all.
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Assessing the Early New Deal
These measures taken as a part of the New Deal showed Roosevelt’s
positive and negative traits as an aide toward the economy. He showed
that he would use all that was in his power to help the nation. He had
his “First 100 days” of a congressional session, began many
other political sessions, made speeches, and led ‘fireside chats’
on the radio. The confidence he possessed and his ability to take action
instilled a confidence in the people that was much needed at this time.
At the same time, the New Deal Programs showed his dedication and effort
to our country. These policies showed him to be a cautious political
leader. On this note, FDR refrained from supporting any civil rights
issues in order to keep the Southern Democrats’ seats in Congress.
It was important for him to do this so that the Southerners stayed peaceful,
as we know that in the past Abraham Lincoln made a mistake in that area.
He also believed it important to give power and possibility to large
businesses and commercial producers. He also managed to stay away from
deficit spending, as many European nations did in order to come out
of depression, and raising taxes, both which would have redistributed
individual income. Therefore, trying to buy the power necessary to help
the nation recover became nearly impossible. In these events, the practical
President Roosevelt caused a preservation of capitalism, without making
any huge changes.
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The New Deal from 1935
In 1935, the New Deal made a slight U turn. FDR began to support bills
abolishing holding companies, raising taxes on the wealthy, and shifting
monetary policy to Washington from the bankers in New York. These actions
clearly showed Roosevelt’s failing belief in the idea of a government-business
corporation. And as Congress disagreed, Roosevelt began compromising.
As a team, both helped those who wanted tougher laws against the rich,
yet they did not support radical anti-business ideals or wishes.
During this period, Roosevelt worked hard, and effectively, for three
significant acts passed during this year. The three consisted of the
Wagner Act, the Works Progress Administration, and Social Security.
The Wagner Act distributed about 11 billion dollars to work relief over
the next few years. The Works Progress Administration which helped individual
laborers to begin bargaining on an equal level with their management.
Third, social security was much needed by the fourth of the nation that
were jobless. In this Act, the government provided compensation to those
of old age, those who were disabled, and those who had more children
or one parent.
These successes caused Roosevelt to be elected again as President in
1936 against his Republican opponent Governor Landon of Kansas. In this
second term, Roosevelt was faced with even more obstacles. At this time
Congress was made up of many older members, most of which were very
conservative and refused a good amount of FDR’s attempts to change
things. As one could imagine, this angered him greatly until he passed
anther New Deal legislation to correct it.
Also during his second term, there were many strikes in factories, and
though he opposed business strikes, he was blamed quickly. It was believed
that this activism in the labor force was because of his actions taken,
or lack thereof. In later 1937, there was a sharp cut in money due to
a large amount of federal spending in 1936. Surprised and disappointed,
Roosevelt waited for early the next year to order less spending in order
to catch up to an economic recovery once again.
These new developments made Roosevelt all the less popular in Congress.
And, in the 1938 elections, Republicans gained seats in Congress, causing
a conservative period, as opposed to the Democratic Roosevelt. This
continued until 1939 when the war in Europe took most of our attention,
and then we joined the war in 1941 after the bombing of Pearly Harbor.
Around this time, FDR died, leading to Truman to take over from there.
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