Essay 2, Unit III

Describe the main goals and programs of the New Deal for dealing with the plight of farmers, working men, businesses, and the elderly.

   The overall goals of Franklin D. Roosevelt's New Deal were to preserve the capitalistic economic order and the two-party democratic political system. Both of these foundations of American society were under attack when Roosevelt assumed office in 1933 as a result of the prolonged and intense economic depression of the nation. Many people were persuaded that the economic system had to be restructured and that the government was powerless to handle the problems. Membership in the Socialist and Communist parties was on the rise, for example.

   Against this backdrop of mounting disillusionment with the system, Roosevelt acted to try to restore public confidence in the banking system, one of the two underlying pillars of the capitalistic economy. Indeed the first New Deal measure passed by Congress was the Emergency Banking Relief Act which closed banks until they could be audited and reopened with a government stamp of approval. Later Roosevelt pushed for creation of the Securities Exachange Commission which was intended to restore public confidence in the Stock Market,the other pillar of a capitalist economy, through reform and continuing regulation of the activities of that institution. The intitial New Deal legislation was surprisingly conservative given the desperate conditions of the nation.

   In keeping with the goal of trying to shore up the nation's economy the New Deal attempted to help business recovery by passing the National Industrial Recovery Act which set up the National Recovery Administration. This agency ignored anti-trust laws and encouraged industry-wide planning and fixing of production and prices. It also established guidelines for big business and fair trade codes. Despite its helpful intent, the N.R.A. was severely criticized by big business corporations as involving too much intervention by the federal government in the nation's economy. In response to these attacks on New Deal legislation the administration became increasingly more hostile toward the business community.

   When the administration turned its attention to the distressed conditions of American farmers it asked for a group of farm experts to analyze the underlying agricultural problem. The answer was that farmers suffered from overproduction. The New Deal answer was passage of the Agricultural Adjustment Act which tried to increase farm prices through limiting production of farm goods. This plan entailed the government paying farmers to take lands out of cultivation for a period of time. The idea was that this would decrease production as well as improve the soil by letting it lie fallow for a while. While farm incomes did rise gradually they never at any time during the New Deal attained World War I levels.

   For the working men of the nation who found themselves confronting an unprecedented 25% unemployment rate the New Deal instituted a number of work relief programs. While providing direct federal welfare through breadlines and soup kitchens, the adminsitration viewed these measures as temporary stopgaps. To provide employment the New Deal established a Public Works Administration to let out government contracts to private companies for the construction of dams and other public works projects. When this proved inadequate, Roosevelt appointed his closest political associate, Harry Hopkins, to head up several relief agencies to speed up hiring of the unemployed.

   Under Harry Hopkins the approach was to have the federal government serve as an "employer of last resort" and hire all types of workers who could not find a job in the private sector. Under the umbrella of the Federal Emergency Relief Administration, Hopkins established agencies like the Works Projects Administration to hire artists, musicians, and historians (even historians have to eat) not covered under other programs. Young men were hired by the Civilian Conservation Corps to work on reforestation projects, clear lands, and build bridges and fish ponds. This served both the unemployed and the environment.

   The National Labor Relation Act, or Wagner Act, was another measure designed to help workers. It granted working men the right to organize and bargain collectively. Because this was the first time under federal law that labor unions were recognized as legal entities this law is known as the "Magna Carta" of the American labor movement. While these laws to improve the conditions of workers never resulted in full employment during the domestic New Deal, they did reduce unemployment from the record high 25% to 10% by 1939. Thus the Democratic party which passed these New Deal measures increasingly received the political support of labor.

   Nor was labor the only group to join the Democratic party political coalition under Roosevelt. Ethnic groups, like Afro-Americans, also deserted the Republican party which they had supported since the Civil War and joined the Roosevelt coaliton. They did so, not because the New Deal passed any Civil Rights acts (not a one), but because the measures designed to decrease unemployment benefitted those with the highest levels of joblessness - like Blacks, Mexican-Americans, and Native Americans (Indians). Native Americans were also grateful to the New Deal for the Indian Reorganization Act which reversed the federal government's century-long policy of trying to break up Indian tribes and instead stressed tribal autonomy and self-government.

   The elderly also increasingly found a political home in the Democratic party because of a New Deal program focusing on the plight of those too old to work and without adquate income to survive. The Social Security Act was an omnibus bill which provided for old-age pensions, unemployment compensation, and welfare grants. This measure, challenged at the time by a New York congressman as both unconstitutional and "ungodly," was upheld by the Supreme Court and has been affirmed by every administration, Republican and Democrat alike, since 1935. Thus through its actions in behalf of have-not groups Roosevelt succeeded in putting together a political coalition of urban workers, ethnics(especially Blacks), and labor unions.

   The New Deal never achieved the level of prosperity the nation enjoyed in the 1920s but did bring about partial economic recovery. It did so, however, at the expense of a balanced federal budget. All those domestic programs, and the bureaucracy created to administer them, led to the government embarking upon a program of "deficit financing," spending more than the government took in through revenues. While both costly and vigorously criticized by its opponents the domestic New Deal of Franklin D. Roosevelt achieved its primary goals of preserving( with some additional government involvement) the essential capitalistic economic system and the traditional two-party (with a shift in party strength) political structure of the nation.