New Deal

The New Deal was the name coined by President Franklin D. Roosevelt, a Democrat, for the programs he sponsored, especially 1933-36. His program had three aspects: relief, recovery and reform. It sought to provide immediate relief for the millions of unemployed in the Great Depression. It promoted Recovery of the economy to normal standards--a goal he did not achieve. It involved a series of Reforms, especially in the financial system.

Economic planning

As the Depression set in, terms like “planned economy” and “national planning” became the watchwords of the day. They had been used by theoriticians for years and popularized by best-selling writers like George Soule and Stuart Chase, who lauded the Soviet Gosplan (central planning), asking plaintively, “Why should the Russians have all the fun of remaking a world?” The most prominent of the Brain Trusters and the man often considered the chief ideologist of the “first New Deal” (roughly, 1933–34), was Rexford Guy Tugwell. Tugwell was a follower of the school of thought known as Institutional Economics, founded by the eccentric writer on economics, Thorstein Veblen. His official position was assistant secretary of agriculture, that is, second in command to Henry A. Wallace, but his influence extended far beyond that.

100 Days

Roosevelt gathered around himself a Brain Trust, supposedly made up of the "best and the brightest" minds. How the Republic had survived for nearly a century and half without this new innovation was openly speculated. Why the previous Democratic President, Woodrow Wilson, who remains the only PhD to have ever occupied the Presidency, didn't think of it, still remains a mystery.

In May 1933, the Thomas Amendment to the Agricultural Adjustment Act (AAA) was passed, giving the president the authority to increase the money supply by $3 billion in unbacked bills and to reduce the value of the gold dollar by up to half. In June, a supine Congress delivered to FDR the joint resolution he had requested, forbidding private debtors to fulfill their obligations in gold and relieving the government of its own sworn obligations.

National Recovery Act

The National Industrial Recovery Act, or NRA as it came to be called, provided that a corporative system in America for each industry should be organized into a federally approved trade association run by businessmen. These code authorities could regulate qualities, prices, distribution methods, etc., under the supervision of the NRA. Anti­-trust laws forbade such organizations but they were effectively suspended.

Roosevelt asked Clarence Darrow to head up a national recovery review board. The Darrow Committee's report stated, "We have here a body not only perfectly equipped to exercise monopolistic control, but endowed with extraordinary powers incompatible with the ideals heretofore entertained in a free country. . . In proportion as the authority of government sanctions regulation by industrial combinations, the inevitable tendency is toward monopoly with the elimination of the small business ."

Donald Richberg, former Counsel and later Administrator of NRA admitted candidly, "Yet step by step through the diabolical logic of events the NRA became the apparent exponent and protector of 'price fixing' - that hateful objective of that most hated ogre, a big business monopoly."

Civilian Conservation Corps

The inner affinities of the New Deal with the continental dictatorships is well illustrated by one of the first measures passed during FDR’s first Hundred Days and was a program that was one of FDR’s favorites, the Civilian Conservation Corps (CCC).

Young men were enrolled as amateur forest rangers, marsh-drainers, and the like, on projects designed to improve the countryside. The recruits were given room and board, clothing, and a dollar a day. More than two and half million of them passed through the camps of the Civilian Conservation Corps, until the program was abolished in 1942, when the men were needed for the draft.

In 1973, John A. Garraty published an important article on the CCC in the American Historical Review Garraty was Gouverneur Morris Professor of American history at Columbia and later general editor of the American National Biography. Yet, while a warm admirer of FDR, Garraty was compelled to note the striking similarities between the CCC and parallel programs set up by the Nazis for German youth. Both were essentially designed to keep young men out of the labor market. Roosevelt described work camps as a means for getting youth “off the city street corners,” Hitler as a way of keeping them from “rotting helplessly in the streets.” In both countries much was made of the beneficial social results of mixing thousands of young people from different walks of life in the camps. . . . Furthermore, both were organized on semi-military lines with the subsidiary purposes of improving the physical fitness of potential soldiers and stimulating public commitment to national service in an emergency.

Works Progress Administration

The Works Progress Administration (WPA), like the Civil Works Administration and the Civilian Conservation Corps, established a system of work relief for the unemployed. It had a larger size and budget($5 billion at first) than previous efforts. Harry Hopkins, the director of the WPA, was responsible for the building and renovation of over 100,000 public buildings and the construction of 600 airports, more than 500,000 miles of roads, and over 100,000 bridges. The WPA was also well known for its flexibility. It employed not only construction workers but also artists and authors as well as operating separate sewing projects for women.

Declining exports

The following table gives the volume of imports in 1932 and 1935 for important agricultural products.

Agricultural Imports	Before Roosevelt	3 years into 'relief' efforts
Commodity	1932	1935
Wheat	3,000 bu.	27,439,000 bu.
Corn	344,000 bu.	43,242,000 bu.
Oats	59,000 bu.	10,107,000 bu.
Barley	None	4,840,000 bu.
Rye	None	9,643,000 bu.
Rice	19,074,000 lb.	53,457,000 lb.
Barley malt	52,533,000 lb.	320,6 23,000 lb.
Hay	13,858 tons	67,171 tons

The quantities of individual commodities exported declined as follows:

Agricultural Exports	Declines 3 years into
Commodity	New Dealism
Cotton	33%
Unmanufactured tobacco	4%
Wheat	99%
Flour	491%
Meat products	19%
Lard	82%

In the summer of 1933 New Dealers paid farmers under the Agricultural Adjustment Act (AAA) to plow up 10,500,000 acres of growing cotton, or 25% of the total acreage. The Bankhead cotton Act of 1934 set a limit OF 10,000,000 bales of cotton to be marketed by farmers from the 1934 - 1935 crop.

In the fall of 1933, the AAA destroyed 6,200,000 pigs and 220,000 mother sows were slaughtered in the AAA's effort to raise prices at a cost of over $30,000,000. The total live weight of the pigs and sows slaughtered was 443,69.7,348 pounds. Of this only 97,064,159 pounds of food products were obtained-the rest was converted into inedible grease or fertilizer.

Unemployment

	United States	Great Britain
Unemployment (1930 average)	4,770,000	1,993,951
Unemployment February 1936	12,550,000	2,016,578
Percent increase	163 %	1.1%

Unemployment peaked in 1933, at 24.9%, and by 1941 (at which point, the United States entered the war on December 7, 1941), unemployment had subsided to 9.9%, which was near the 1930 level of 8.9%. [2]

Crash of 1937

By 1937, the Government's own statistics were showing that 23.8% of the Workforce was either unemployed, or underemployed. The term for the human suffering at the hands of government planners was "wastage." According to the Brain Trusters own statistics, of "100 Per Cent Manpower," 23.8 were "Per Cent Wastage." After four years of "government solutions," contemporaneous reports were stating "much of the unemployment in 1937 was due to a decrease in the number of jobs available."

The 1937 - 1943 Depression was longer in duration than the 1929 - 1932 crash, the result of massive government intrusion into the private economy which stunted growth. Manufacturing demand stimulated by WWII led to the 1943-1949 recovery, where finally, in 1949, the New York Stock Exchange recovered to the level it had been at 1929.

Many New Deal reforms were unpopular and criticized. In 1948 President Harry Truman ran on a reformed New Deal platform called the Fair Deal, which was regarded largely as an admission the New Deal had not been fair.

See also

• New Ordeal