The New Deal


What were the aims of the New Deal programmes

AIMS  - To relieve the human suffering

          - To promote economix recovery

to restore hope and energy to americans as individuals


correcting the financial crisis

offering short term relief to the unemployed

recognising that under-consumption was more of a problem than overproduction

promote economic recovery by increased government spending and by co-operative agreements between government,industry and unions

raising price of farms and manufactured goods to reduce production thereby reducing supply and making goods produced more valuable

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First New Deal programmes ; relief and recovery

Alphabet agencies AAA - Agriculture Adjustment Act - used farm subsidies to regulate farm production

CCC - Civilian Conservation Corps - provided work for men aged 18-25 paying $30 a month, $25 of this had to be sent to their families. Stayed in camps,organised military lines and worked on regionla environmental projects such as national parks,recreation facilities and access roads

FHA - federal housing administration- federal guarentee of private mortgages,which reduced down payments from 30% >10% and extended repayment time from 20>30 years. enabled more americans to purchase their own homes.provided gov funding to enable people to keep up their mortgage

TVA - Tennessee Valley Authority - providing major conservation and regeneration schemes across the enrire Tenessee river valley, covering seven states. built dames to provide hydroelectric power,flood control and irrigation, and allocated federal money to other social projects - including education.

PWA - Public Works Administration - $3bln for work-creation projects e.g roads and electrification.

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First New Deal programmes ; reform and regulation

Banking Act (glas seagull banking act) prohibited commercial banks from selling stock or financing corporations. created the Federal Deposit Insurance Corporations which guarenteed savings deposits up to 2500, protected the ordinary depositor from loss of savings. regulated banking and credit

The Beer-Wine Revenue - legalised some mild alcoholic beverages and paved the way to end prohibition

The Economic Act - made a commitment to cut the federal budget

The Emergency Railroad Transportation Act - regulated railroad companies

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How did these programmes ease Depression


its aim was to return farming to golden age during 1910-14.

voluntary cut-backs in production,reducing the quantity of food available so prices rose. useful resources such as wheat,cotton,tobacco and pig rearing were cut back. 6 mln pigs were slaughtered controversially at a time when families were starving. Act was too late to stop spring planting so crops had to be ploughed under

Initially it was successful with farm incomes rising 58 % between 1932 and 1935

although the Supreme court rules it unconstitutional in 1936 it was revived and a similar act was passed in 1938 as part of the second new deal.

2 negative effects - it speeded up agricultual production, changing it from family run business to large commercial enterprises.

landowners, especially in the South, in their reducing production,also ended contracts with sharecroppers and tenants,both black and white. unexpectedly large group now likely to be unemployed and homeless

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How did these programmes ease Depression

TVA - local people only had wood burning stoves and kerosene lamps, public utility companies there had been trying to block schemes to extend use of the dam for production of electricity, The TVA had been intended to regenerate an area of long established poverty. by 1936 9 dams were built and plans for more were being made. they provided cheap hydro-electricity; opened up river for navigatio; fostered soil conservation and forestry; encouraged experiments with fertilisers; provided jobs and revived self-respect.

PWA - not only created jobs but provided entertainment, inspired creativity and showed american culture to a wider audience. some thought the projects were amaturish and a waste of public money. others thought that there was an overly leftwing bias in much of the work. unlike Germany and Soviet union these project were free from cencorship and and overt propoganda.

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Successes and Failures of the First New Deal


  • stabilising of banking and the system of credit
  • taking the USA of the Gold Standard in 10 april 1933 - stabilised financial markets
  • protection for homeowners and farmers by giving help to refinance loans to make them easier to repay.
  • public works schemes needed rather than giving relief payments, also had a benifit for conservation and infrastructure - CWA for example helped to temporarily give people jobs through the winter.
  • Changing the psychological mood of the country - from hopelessness to optimism


  • AAA never achieved what it hoped. eg wheat production fell from 864mln bushels to 564 but this wasnt because of federal policies. it was mainly because of the drought. it had a terrible impact on rural poverty especially in the South. for sharecropper the AAA made it worse by reducing the land they could produce cotton.
  • little help for african americans
  • Roosevelt was scared of southern politicians who might block the New Deal policies overall
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