The Success of the New Deal

How successful was the New Deal?

The success of the New Deal is open to interpretation. It achieved a great deal but its impact was limited in some ways and places.

How successful was the New Deal in farming?

The New Deal saw some successes in farming, but also some failures.

• ❖ Farmers were given $4 billion in direct relief and farm income had nearly doubled by 1939.
• ❖ However, farm income didn't return to 1920s levels and many farmers owed the government money through mortgages and loans.

How successful was the New Deal in banking?

The RFC helped 6,000 banks reopen after the Emergency Banking Act of March 1933. However, 106 had to close even after receiving government help.

How successful was the New Deal in businesses?

Most businesses that survived after 1933 were able to make a profit. However, there was a serious recession in 1937-38 and the older, declining industries continued to struggle.

Was the New Deal a success for unemployment?

Unemployment fluctuated after 1933.

• ❖ Unemployment never reached the same high levels of 1933 after Roosevelt became president.
• ❖ However, it didn't return to its 1929 levels until the Second World War broke out.
• ❖ It had fallen significantly by 1937.
• ❖ When New Deal spending was cut in 1938, unemployment rose again.
• ❖ The outbreak of the Second World War in 1939, and America's entry to the conflict in 1941, was what finally solved unemployment, as it provided jobs in the army and in the manufacture of war goods.

Why wasn't the New Deal a success in solving unemployment?

There are a number of reasons why the New Deal may not have been able to tackle the long-term problem of unemployment in the USA.

• ❖ The home market didn't recover, as many Americans continued to live in poverty. This was especially true of rural areas, where prices didn't recover until the Second World War.
• ❖ Competition and tariffs from other countries limited US overseas sales. Many countries were also suffering from the effects of the Depression, and couldn't buy many goods.
• ❖ Modern methods of production in agriculture and industry meant that fewer workers were needed.
• ❖ The global business cycle meant that the whole world fell into a recession in 1937 and 1938. The actions of one country could not make a difference to this.
• ❖ In some industries, such as agriculture, it was necessary to reduce jobs in order to make farming more efficient. There were therefore some self-inflicted job-losses in America.

How successful was the New Deal in achieving the 3 Rs?

Roosevelt had aimed to achieve 'the 3 Rs' with his New Deal - relief, reform and recovery.

• ❖ The New Deal succeeded in reform by making banks safer, regulating the treatment of workers, introducing social security and improving living conditions. However, it didn't really close the gap between rich and poor.
• ❖ Although the New Deal did help to reduce unemployment, the fact it rose again when spending was cut showed the economy still hadn't recovered. Unemployment didn't stop being a problem until the Second World War.
• ❖ The federal government provided billions of dollars of short-term relief through the New Deal. Roosevelt's ongoing popularity showed how much this was appreciated by ordinary people, but it didn't solve all the problems of poverty.

Was the New Deal a success for women?

Women were given specific work by the women's and professional divisions of the WPA, and mothers received grants from the Social Security Act. However, most employment provided under the New Deal was for men.

Was the New Deal a success for black people?

30% of black families received relief, but this was often lower than the relief given to white people. Some CCC camps were integrated, but the AAA and NRA forced many poor black farming tenants from their land.

Was the New Deal a success for the Native Americans?

The Indian Reorganisation Act of 1934 gave 7.4 million of acres to land to Native Americans. However, many were still very poor, reliant on alphabet agencies and had no support when they closed.

Was the New Deal a success for trade unions?

The passing of the Wagner Act had mixed results for workers' rights and trade unions in America.

• ❖ Trade union membership grew to more than seven million.
• ❖ More strikes resulted in improved conditions for workers.
• ❖ Pay and working conditions improved overall.
• ❖ Some employers disliked the Wagner Act, and used violence against strikers.

How was the success of the New Deal affected by the Second World War?

The start of the Second World War signalled the end of the New Deal, as it boosted exports by 70% in the first three years and stimulated employment.