This investigation, analyzing the New Deal and the major legislation that encompassed it and what effect it had on the economy of the Great Depression, will answer the question: To what extent was the New Deal successful in relieving the economic hardships caused by the Great Depression? 1. Identification and evaluation of sources The primary sources which will be evaluated are two books, a book and major source for some U. S. history classrooms and a recently published history book analyzing the era of the Great Depression. Both are written by well-versed professors in the fields of history and political science.
The New Deal by Paul K. Conkin: The New Deal was written by Paul K. Conkin, a distinguished professor emeritus of history at Vanderbilt University and winner of the Albert J. Beveridge Award in America History in 1958. This source is a 122-page book over the New Deal and the Great Depression and is a part of The Crowell American History series. The purpose of the book is to analyze the New Deal and the politics of its legislation as well as describe Roosevelt’s involvement in the recovery of America from the Great Depression. The source contains four essays which have been edited to release them together as a book.
The first of these essays delves into Roosevelt’s personality and the causation for his multiple character traits. The second and third essays detail the politics behind the individual laws of the New Deal and the reason one law passed or didn’t. The last essay/chapter is about how the New Deal saw to the restoring of normal American life and an analysis of the ‘alphabet agencies. ’ The book is valuable to this inquiry as it offers a credible source of information, since it was written by a distinguished professor and has a reliable institution behind it – the General Research Board of the University of Maryland.
The only limitation to this book is its discussions of Roosevelt’s personality which will not be discussed in this investigation. Fear Itself by Ira Katznelson: This source is a non-fiction book by Ira Katznelson, which was first published on March 1st, 2013. Fear Itself examines the various policies of the New Deal, the viewpoints of politicians towards individual laws, and the impact of each policy. Katznelson is a political scientist and current professor of political science and history at Columbia University.
Katznelson’s purpose behind the book is to examine the New Deal and the fear ever prevalent throughout the Great Depression. This book contains analysis over the juxtaposition of American democracy and its rival: European dictatorships, the necessity of southern support in Congress, the New Deal, and the beginning of the Cold War. The value of the book lies in its highly in-depth examination of the individual laws and corporations associated in the New Deal and the plethora of viewpoints from politicians and historians.
However, this source is limited by its reliance on secondary sources, such as contemporary historian. 2. Investigation This investigation will show that the New Deal did not completely relieve the people of the Great Depression and that World War II was the real savior of the economy. It will do this by exploring the New Deal’s greatest successes, contrasting them with its shortcomings, and showing how World War II revitalized the American economy. One of the most commendable accomplishments of the New Deal was its ability to substantially increase the domestic scope of government.
In just six years, “a federal civil service that had 572,000 employees grew to one of 920,000 … and spending nearly double[d], going from $4. 6 billion to $8. 8 billion” (Katznelson 36). Another triumph was Roosevelt’s single-mindedness when it came to solving the individual problems of the Great Depression. For example, one of the major issues faced by the Roosevelt administration during this period was “the proportion of unemployed … [which] had reached a calamitous 24%” (Katznelson 37). To combat this problem Roosevelt created numerous agencies whose sole purpose was to employ the recently laid off workforce.
Thus was created the Tennessee Valley Authority Act (TVA), which “of all the early New Deal measures … was the most imaginative in conception and one of the most successful in operation” (Conkin 49). It put unemployed men to work building a lasting infrastructure for electrical production, flood prevention, and conservation. This amounted to “the Valley [having] the lowest cost electricity in the nation and the highest per-capita use … [which] helped attract industry … and helped to raise the low living standards in the Valley” (Conkin 50).
Also there was the Civilian Conservation Corps (CCC), one of the most popular agencies, wherein “young men received employment, military discipline, … and beautified our forest resources” (Conkin 47). However, these few successes could not overcome the fundamental failings of the New Deal. “In 1933, a favorite explanation of the depression, at least among New Dealers, was underconsumption” (Conkin 39). This led to greater government spending but to no avail. “By 1940 [government outlays] had more than doubled to $9. 4 billion” (Powell 48) and unemployment was at 17%.
No doubt the New Deal was working to an extent as it lowered unemployment from 24% to 17% but this unemployment rate was still exceptionally high especially when compared to the 3% unemployment recorded prior to the Stock Market Crash of October 1929. This implies that, though alphabet agencies were employing people, “none of [them were] truly radical in scope” (Morgan). Even the Works Progress Administration, one of the largest agencies created from the New Deal, “could only employ around a third of those who needed work” (Conkin 59).
Additionally, many, if not most, alphabet agencies failed. Take for example the National Industrial Recovery Act (NRA), the first law of the New Deal, passed in 1933. The NRA was a huge step in establishing new bounds for the government’s control in the commercial market, however, in retrospect it is deemed almost unanimously a failure. It is best summarized by Charles Roos, an economist and one of the research directors of the NRA, who said that “inadequate personnel, insufficient statistics, and clumsy economic interventions had limited [the New Deal’s] effectiveness.
And that] ‘despite laudable efforts … the NRA must, as a whole, be regarded as a sincere but ineffective effort to alleviate [the] depression’” (Katznelson 243). The extent of alphabet agencies that Roosevelt attempted to create and the lack of resources available to him inevitably led to a deficiency in the capability of those agencies and ultimately their failure. Essentially, the New Deal failed in achieving economic recovery. The Great Depression was an international phenomenon and “economic historian Lester V.
Chandler observed, [that] ‘in most countries the depression was less deep and prolonged’” (Powell 48). Conkin recognizes this comparison and notes that “by 1936 the depression should have been over” if the government, as promised, had injected “such enormous sums of borrowed money into the economy that it had to respond” (70). Roosevelt had attempted to create an expansive network of agencies to alleviate unemployment. However, this was not injecting money into the economy, rather it was wasteful government spending that was only afforded by increased taxes.
Roosevelt “raised personal income taxes, corporate income taxes, excise taxes, estate taxes, gift taxes, and liquor duties” (Powell 48) all of which left companies with less money to create jobs and consumers with less money in their pockets. Justifiably, Roosevelt needed this money to better fund the smorgasbord of agencies he had created but they were still understaffed and mismanaged. To fix these issues Roosevelt would have needed to find more funds but these would have only come from more tax payer money, showing the true problem with the ideology of the New Deal.
The Roosevelt administration believed that government spending would help to stabilize the economy and put American citizens back to work but they failed to realize that they were only shifting previously owned assets which could not and did not remedy the Great Depression. Finally, the New Deal lacked sufficient endurance: “the Legislature and Senate [had] given Roosevelt more power than any other president” (Santos) during Roosevelt’s first hundred-day period. If Roosevelt could fix the Depression, it probably would have happened then.
Unfortunately, he could not and by the close of his second term, he had lost almost all support from southern congressmen. Thus any new ideas that did present themselves were never passed and the immensity of government spending required was never reached. The reason World War II was able to rid the United States of the Great Depression when the New Deal could not, was because it did what economists today agree is the prime solution to the Depression. Since “the Great Depression was brought on by a collapse of effective demand … the Federal Reserve should have fought the slump with large injections of money” (Powell 48).
This is exactly what World War II managed to accomplish due to its effect on the mindset of the government to do whatever necessary to get the nation through the war. It “made intellectually conceivable and politically possible deficit spending on a level that was neither dreamed nor attempted before [it] came” (Kennedy 251). Before the war the biggest deficit of the New Deal was $4. 2 billion, while in 1943, after the war started, the federal deficit was $53 billion.
This deficit spending was only made possible because of the need of new industries, such as aviation, chemical, machinery, weapons, all necessities for war that the United States “couldn’t simply go to the market and buy … it had to create the market. And it did” (Hyman). Thus, these needs of war drove industry, industry drove federal spending, and this in turn drove away the Great Depression. It should be noted that even though the New Deal failed to restore the economy it still was seen as the only hope for the United States and Roosevelt alongside it.
The restorative properties of the New Deal were marginal by 1936 as the gross national product had just reached that of 1931 but “Roosevelt was more popular than ever. ” (Conkin 50) This was because he had not engendered support through actual recovery but through morale-building, fireside chats, and promises of recovery. Though the New Deal did not save the United States financially, it did save it in a nationalistic sense as Roosevelt restored hope to a nation weary from the Depression.
The U. S. conomy most likely would have never completely recovered from the Great Depression solely on the basis of the New Deal and inevitably needed World War II to jolt it back to life. However, until World War II came around to fully revive the economy, the U. S. survived because of the New Deal. Though the New Deal was a valiant effort by Roosevelt to save the economy, it mainly helped morale and was not a permanent solution for repairing the Depression and, in reality, it was “the military buildup of World War II” that “really got the country moving” (Kingsbury).