The New Deal: What Was It & What Did It Do?

The New Deal was a legislative agreement that guaranteed workers the right to organize and do collective bargaining with management at their workplaces (The American Journey, Vol.2, 8 th edit.). This legislation helped to guard minority workers (women and black workers) against mistreatment at work. However, this agreement did not receive approval from all sectors of the labor market. This is evidenced by the relentless attempts by the American Federation of Labor (AFL) to get it disbanded. Some companies also including the General Motors (GM), Chrysler and Steel companies even were strongly against labor unionization. However, this did not deter the progressive labor leaders from pushing for reforms in the employment sector. 

President Franklin Delano Roosevelt or FDR as popularly known, introduced the new deal to Americans in the 1930s. The program was marked with immense successes that are still visible even in the present day America. Dubbed “the New Deal,” the programs were initially intended to offer a practical solution to the Great Depression. FDR began with banking reforms through the passage of the Emergency Banking Act. The legislation restored the public confidence in the banking sector again, and for the first time in a long time, the number of deposits exceeded the number of withdrawals. This was witnessed after reopening of banks on 13 th March 1933. Just ten days after his election as president. Under the new deal, legislation was also passed to enable millions of Americans to refinance their mortgages through the creation of the homeowner's loan corporation. The securities Act even reformed the sale of stocks on Wall Street by preventing insider abuses. 

Radical job creation was also another successful front among the goals of the new deal. Under the stewardship of Harry Hopkins, Roosevelt commissioned the Federal Emergency Relief Administration to fund state and local agencies to create new jobs. Institutions such as the Civil Works Administration (CWA) produced more than 4 million jobs in the winter of 1933-34 alone. The Public Works Administration on the other hand also directed by Harold Ickes spent billions of 1933-39 in work relief projects to create jobs for millions of Americans. Another very popular New Deal agencies the Civilian Conservation Corps created over 2.5 million jobs for the youth through work relief and conservation programs. The programs were FDR’s ideas, and it lasted until 1942. 

In addition to providing relief, economic recovery was also among the critical successes of The New Deal. Through the establishment of the Agricultural Adjustment Administration (AAA) in May 1933, the crop surpluses and low product prices on farm outputs were curbed. 

Probably the most successful outcome of the New Deal was the enactment of The Social Security Act of 1935. In the midst of growing public dissatisfaction, FDR realized the need to weed out the over-privileged and lift up the underprivileged (Roosevelt, 1935) to create a fair and equitable society. The social security bill provided un-employment compensation, old-age pensions, and aid for dependent mothers and children and the blind. 

In spite of the success realized by The New Deal, there arose a new set of unresolved challenges that exposed some areas in which the program had failed. First of all, the New Deal was characterized by substantial regulatory authority of the government which significantly weakened the autonomy of American business. The program was also criticized for excessive spending on non-business groups. This move was seen as socialistic by left-wing critics who were pro-capitalism. 

Furthermore, the program was criticized for instigating labor-organizing which resulted in increased cases of industrial unrest through strikes. Employers and employees also resented having their salaries taxed to cater for the provisions of the Social Security Act. 

Reference 

Goldfield, D, Abbott, c., Anderson, V. D., Argersinger, J.A.E., Argersinger, P.H., Barney, W.L &Weir, R.M. (2001). The American Journey: The History of the United States, Volume 2.