Was the New Deal a good deal?

Since shortly after the treaty that ended World War I, the world economy struggled. Germany was straddled with harsh reparation debts and their economy stalled. Farm income in the United States fell dramatically with the end of wartime price supports, and with nearly half of the U.S. population living in rural areas, American buying power plunged. At the same time, the U.S. imposed tariffs on imported items, helping manufacturing but raising prices for consumers. The stock market boomed, and investors poured money into stocks far beyond their earning capacity. Eventually, these and other factors combined to bring the stock market crash of 1929 and the beginning of the greatest economic downturn ever experienced in the United States.

Herbert Hoover and the Market Crash

Herbert Hoover was elected president in 1928 and assumed office while prosperity was still running high. When the market crashed in October, he and many other economists saw it as a temporary slide and predicted quick recovery. As unemployment continued to rise and business slumped, Hoover proposed some new efforts by the federal government. His main idea was to provide incentives and financial supports to business to get firms hiring and selling again. He favored lower taxes and a balanced budget. He also encouraged greater volunteer contributions to charities for the poor and unemployed, but he opposed any direct relief efforts to individuals fearing the welfare would discourage the unemployed from looking for work.

New Deal Programs

Anger against Hoover grew rapidly through 1931 and 1932, leading to the election of Franklin Delano Roosevelt. While Roosevelt also talked about balanced budgets during the campaign, he changed courses between his November election and March inaugural as national conditions became worse. With the Democratic majorities in Congress that were elected with him, Roosevelt pushed through a remarkable agenda of programs that radically changed the relationship of individuals to the federal government. The New Deal created work programs like the Works Progress Administration and the Public Works Administration that put people to work on public parks, roads, bridges and other infrastructure projects and hired teachers and artists. The Civilian Conservation Corps hired, fed and clothed teenage boys and sent most of their salaries back to support their families. The Agriculture Adjustment Act provided payments to farmers who agreed to limit their production. It was Roosevelt's policy that, in times of recession, the government should spend to spur economic growth, even if that means adding to the federal debt.

While New Deal programs provided a safety net to hundreds of thousands of American families, there is debate among economic historians about their overall effectiveness. What finally ended the Depression was American entry into World War II with a military draft and government contracts for planes, tanks, ships, munitions, uniforms and farm products. However, on the political side, the hope that the New Deal offered those struggling, including many Iowa farm families, was a factor that prevented rebellions against the government at all levels. It also reconfigured the American political landscape as African Americans, other urban-based minorities and labor unions leaving the Republican Party to form a strong Democratic coalition.

Supporting Questions

How did Franklin Roosevelt’s policies differ from Herbert Hoover's?

• White House Insider Theodore Joslin's Account of the Depression and Herbert Hoover's 1932 Presidential Campaign, 1932 (Document)
• "Untitled" Clifford Berryman Depression-Era Cartoon, December 23, 1932 (Political Cartoon)
• President Herbert Hoover's Letter to Senator Simeon Fess , February 21, 1933 (Document)
• "That Conquering Cooperative Spirit!" March 7, 1933 (Political Cartoon)
• "A Capitol Hill May Day Parade," May 1, 1933 (Image)
• President Franklin Delano Roosevelt's Campaign Address at Madison Square Garden, October 31, 1936 (Document)

How did the New Deal affect the relationship between citizens and the national government?

• Depression-Era Breadlines, ca. 1932 (Image)
• Men Stringing Rural Tennessee Valley Authority (TVA) Transmission Lines, 1933 (Image)
• "The New Deal" Mural, ca. 1934 (Image)
• Letter from Edwin Locke to Depression-Era Photographer Arthur Rothstein, July 14, 1936 (Document)
• Impoverished Family of Nine during the Great Depression in New Mexico, August 1936 (Image)
• "A Day In the Life of a New Dealer" Newspaper Article, October 20, 1936 (Document)
• People Waiting for Relief Checks in Calipatria, California, March 1937 (Image)
• Interview with Italian Munitions Worker Charles Fusco, 1938 (Document)
• Federal Writers' Project Interview of Henry Gill, between 1938 and 1939 (Document)
• Two Teenage Girls Participating in the National Youth Administration in Iowa, 1940 (Image)
• "American Guide Week" Pamphlet, 1941 (Document)

How effective were New Deal policies in bringing relief from the effects of the Great Depression for all Americans?

• Letter from Edgar Harlan to H.O. Bernbrook, April 30, 1932 (Document)
• Indian Reorganization Act, 1934 (Document)
• Interview with Dr. M. Santos, a Cuban Immigrant, between 1936 and 1939 (Document)
• Constitution and Bylaws of the Sac and Fox Tribes in Iowa, December 20, 1937 (Document)
• Emanuel Verschleiser's Letter to President Franklin Roosevelt, 1938 (Document)
• Interview with Farmer Ernest Boney in South Carolina, 1938 (Document)
• American Indian Tribes, Reservations and Settlements in the United States, 1939 (Map)
• Interview with Vivian Morris from Harlem, New York, June 29, 1939 (Document)
• Interview with Eugenia Martin about Reconstruction, November 1939 (Document)
• "Our New Army of National Defense," March 26, 1941 (Political Cartoon)
• National Youth Administration Work Center in Brooklyn, New York, ca. August 1942 (Image)