Roosevelt’s-new-deal-in-the-Great-Depression.doc

Roosevelt’s new deal in the Great Depression
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Introduction:
The Great Depression was one of the worst time periods in American history. The New Deal introduced by President Roosevelt played a significant role in that time and helped Americans overcome the depression.

The Great Depression began with the Wall Street Crash of October, 1929 and rapidly spread. The market crash marked the beginning of a decade of high unemployment, poverty, low profits, deflation, plunging farm incomes, and lost opportunities for economic growth and personal advancement. Three years into the depression, Herbert Hoover lost the 1932 presidential election to Franklin Delano Roosevelt in a sweeping landslide. After then, a series of economic programs were enacted in the United States, which is known as the New Deal. The New Deal focused on what historians call the "3 Rs": Relief Recovery, and Reform. That is, Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression.
The economic programs mainly involved the followings. The first is banking reform. Roosevelt sent to Congress the Emergency Banking Act, which provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in hoarded currency and gold flowed back into them within a month, thus stabilizing the banking system. The second is monetary reform. The government suspended the gold standard. The dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold. It enabled the Fed to increase the amount of money in circulation to the level the economy needed. The third is security regulation. To avoid another Wall Street Crash the Securities Act of 1933 was enacted. It required the disclosure of the balance sheet, profit and loss statement, the names and compensations of corporate officers, about firms whose securities were traded. Additionally those reports had to be verified by independent auditors. The fourth is public works. To prime the pump and cut unemployment, the NIRA created the Public Works Administration, a major program of public works, which organized and provided funds for the building of useful works such as government buildings, airports, hospitals, schools, roads, bridges, and dams. The fifth is farm rural programs. Many different programs were directed at farmers. In 1933, the Rural Electrification Administration launched the Tennessee Valley Authority, a project involving dam construction planning on an unprecedented scale in order to curb flooding, generate electricity, and modernize the very poor farms in the Tennessee Valley region of the Southern United States. The sixth is social security act. The most important program of 1935, and perhaps the New Deal as a whole, was the Social Security Act, drafted by Francis Perkins. It established a permanent system of universal retirement pensions, unemployment insurance, and welfare benefits for the handicapped and needy children in families without father present. It established the framework for the U.S. welfare system. The seventh is labor relations. The National Labor Relations Act of 1935, also known as the Wagner Act, finally guaranteed workers the rights to collective bargaining through unions of their own choice. The Fair Labor Standards Act of 1938 set maximum hours (44 per week) and minimum wages (25 cents per hour) for most categories of workers. Child labor of children under the age of 16 was forbidden, children under 18 years were forbidden to work in hazardous employment.
The New Deal is much more than what I put here. I can only give a general view of it. Although there is controversy over it, the New Deal indeed helped the Americans get rid of the Great Depression. Roosevelt restored hope and self-respect to tens of millions of desperate people, built labor unions, upgraded the national infrastructure and saved capitalism in his first term when he could have destroyed it and easily nationalized the banks and the railroads. Although some people complained that he enlarged the powers of the federal government, built up labor unions and weakened the business community. Historians generally agree that, apart from building up labor unions, the New Deal did not substantially alter the distribution of power within American capitalism.

Conclusion:
Roosevelt’s new deal in the great depression is not only a very significant part of American history but also an important part of the history of the world’s economy. It made the US get out of the economy crisis and set an example for the successor.