Salt Lake Community College

There are many events in American history, however, the event that I'm writing about is the New Deal, proposed to the American people during the 1930s by President Franklin D.
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Roosevelt. The New Deal was created in an effort to get the American economy out of the Great
Depression, it consisted of many different government programs and sought to increase individual income. During this time the New Deal was very popular among many Americans and it gave many of them hope for the future. Despite this the New Deal was not very productive, while it had success in some areas it failed in others, overall the New Deal was very counterproductive. One of the major problems with the New Deal was that it focused too much on reducing excess or over-production, this was to help drive up prices and wages, however, even with over production reduced, this did not translate into more demand, less production led to fewer jobs and lower wages, driving demand even lower.
One account of the New Deal's popularity is of 1 E.L. Harrison. Harrison wrote to
President Franklin D. Roosevelt, letter stamped Nov 17, 1934, and received Nov 23, 1934, asking for four hundred and fifty dollars. This money he said would go to helping him finish getting a rat trap he had invented to market. The rat trap was an automatic rat trap and would reset itself when it catches a rat. Harrison also says that around one hundred jobs would be created if he received the money, and that the trap would help thousands in exterminating the rat.
Harrison notes that "I am writing to you knowing that you have helped our country and our people more than any other living man." Of course, while this may show that Harrison really loves the New Deal, there is no way to tell for sure, one could also argue that he was simply sucking up to President Roosevelt in hopes of getting the money.
1 Harrison, E. L. To the Honorable President of the U.S.A. Franklin D Roosevelt., 1934.

However in order to get an idea of the goals and thought process behind the New Deal, I thought there was no better place to start than with President Franklin D. Roosevelt himself.
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President Roosevelt's First Inaugural Address that took place on March 4, 1933, starts off like many others, as he talks about the greatness of America, stating that
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"This great Nation will endure as it has endured, will revive and will prosper." This is also where Roosevelt's famous line comes from where he says "let me assert my firm belief that the only thing we have to fear is fear itself." Roosevelt of course includes this at the beginning of his address to reassure the
American people that everything will be alright. That because of American greatness, the hardships will be overcome and that there is nothing to fear. Roosevelt also includes the
American people in achieving prosperity, he feels their support is essential to victory. This leads into support for the New Deal and the reasons for it.
One of the arguments Roosevelt makes for the New Deal is that the 3 "rulers of the exchange of mankind's goods have failed." This is to show that there is need for government involvement and possibly to help convince those who are still not sure if the government should be involved in helping the American economy recover. Roosevelt talks about how the "money changers" are self-seekers and that a recovery requires social values instead of just selfish individual values. Roosevelt outlines some of these values by pointing out that happiness is more than just the possession of money, that happiness needs to come from achievement and creativity. That we must find joy in more than just profits, and that we must help our fellow men.
Another way Roosevelt builds support for the New Deal in his address, is by building trust in government by contrasting it to the corruption in the private sector. Roosevelt talks about how there is no confidence in the banks and businesses, that this is because of a lack of honesty
2 Roosevelt, Franklin D. First Inaugural Address, 1933.
3 Ibid.

and that confidence can only thrive where there is honesty and honor. Roosevelt, later in his address, warns that we need safeguards to prevent a 4 "return of the evils of the old order" when
3 referring to the banks. Roosevelt uses the lack of confidence in the banks and businesses to form his argument for the New Deal. Roosevelt states that "Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now." This leads into some of the goals of the New Deal like putting people to work through government, Roosevelt points out that those employed by the government will be put to work on projects that are vital to the economy such as roads and bridges. This is again to help gain support for the programs, pointing out that those receiving a government job, will not simply be receiving a form of welfare, but will be helping build infrastructure for the country.
Roosevelt also makes the point repeatedly that action must be taken, and that action is being demanded by the American people. This also helps draw support for the program by showing that Roosevelt is listening to the American people and that he is responding with more than just words. Roosevelt even says
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"but it can never be helped merely by talking about it. We must act and act quickly." Near the end of his address Roosevelt reiterates that the American people have registered a mandate and that they want "direct, vigorous action." Roosevelt also felt that the American people had come to a more clear realization that everyone depended on each other, and that because of this we could not just take, but had to also give in order to achieve recovery. This ties into the social values that Roosevelt felt were needed for the recovery to take place. Roosevelt also made it clear in his First Inauguration that state and local governments needed to be involved in the recovery to have it be successful.
4 Ibid.
5 Ibid.

One of the differences between Roosevelt's First Inaugural Address, and one of his fireside chats on the recovery was his view of the economy. In his First Inaugural Address
Roosevelt felt that international trade relations were important, but were secondary to a national recovery. Roosevelt felt that the American spirit of pioneering was the answer to the recovery
4 and the most immediate way for relief. Roosevelt's change of view on this matter was evident when in his fireside chat he states that
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"the domestic situation is inevitably and deeply tied in with the conditions in all of the other nations of the world." Another difference is that in his fireside chat Roosevelt reassures the American people that Congress did not give up its constitutional authority and that no one had the desire to change the balance of power.
Also in Roosevelt's fireside chat on the recovery, dated July 24, 1933, Roosevelt again takes time to reassure the public that he is doing what he can to help America recover. This is similar to the Inauguration because he is once again reassuring the American people that the government is there to help, and not wasting efforts. In the fireside chat Roosevelt says
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"and this
I am very certain will make it abundantly clear to you that all of the proposals and all of the legislation since the fourth day of March have not been just a collection of haphazard schemes but rather the orderly component parts of a connected and logical whole." Another one of the recurring ideas that appear throughout my primary sources is the focus on the wage scale.
Roosevelt argues in his fireside chat that without the New Deal, deflation would have continued and this would have led to a reduction in the wage scale. Roosevelt furthers his argument by saying that it would not have only led to a loss in wages "but also a loss of spiritual values".
What he meant by this was the feeling of security for both the present and future. Roosevelt ties
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Roosevelt, Franklin D. Fireside Chat on the Purposes and Foundations of the Recovery
Program, 1933.
7 Ibid.

5 this back into confidence in the economy, and if you don't have confidence, you can't have a recovery.
Roosevelt then goes on to talk about the New Deal and how it is already helping individuals. Just as he had talked about in his Inauguration, Roosevelt talks about how the government is giving opportunity for employment. This time however Roosevelt is able to be more specific and states that the government is offering employment to a
8 quarter of a million of the unemployed. Roosevelt also talks about various bills being passed by Congress, one of the bills is the Farm Relief Bill. Roosevelt believes that there is too much "disastrous overproduction", and that by reducing the production of crops, that this will in turn increase the profit for farmers by reducing the amount of crops available. The government would also subsidize the farmer for the land that was no longer farmed, Roosevelt was correct, about the farm owners at least, according to a 9 study that was done on Retail Sales during the Great Depression, they found that farm owners did benefit, however, farm laborers, tenants, and sharecroppers were hurt by the Bill. Because land was no longer being farmed in an effort to decrease production, this also meant the farm owners didn't need someone to farm the land. Many farm laborers, sharecroppers, and tenants’ wages were reduced, their hours cut, or they found themselves unemployed altogether.
Roosevelt seemed to be very concerned with over-production, he was also concerned about over-production in industry. Roosevelt believed, as with the farmers that if production was reduced, this would lead to an increase in prices that would then led to an increase in wages.
8 Ibid.
9 Fishback, Price V. Horrace, William C. and Kantor, Shawn. "Did New Deal Grant
Programs Stimulate Local Economies? A Study of Federal Grants and Retail
Sales during the Great Depression." The Journal of Economic History, 2005, Vol.
65(1), pp. 36-71.

There was also concern over long hours of labor, because of the concern over labor hours and
6 wages, once again, action must be taken. This would help lead to the National Labor Relations
Act of 1935. Another way Roosevelt sought to reduce over-production was with a Railroad Bill that was created to help ensure that railroad planning was clearer. This was in an effort to eliminate duplication in railroad deliveries that were being made. With all of these combined, with reduction in industry, agriculture, and transportation, ultimately this would cut down on over-production almost everywhere, with less products being produced from the industries and less food being grown from the farms, this would lead to less product that would need to be transported by train. While it may drive up price due to less product being produced, it would seem that many jobs once again would be lost or cut because there was less demand for industry workers because the industry was producing less, and less demand for railroad workers because there were fewer trains running. Not to say Roosevelt's concerns were misplaced, at the time there was a lot of over-production and demand for exports were down. This did play a role on prices, but it would seem that too much focus was on over-production.
While Roosevelt was concerned about over production, he also noted that things were better because industry had picked up and railroads were carrying more freight. This seemed contradictory to his concerns about over-production, while you would want less to be produced to raise prices, at the same time, industries were creating more and shipping more. How much more, however, was unclear as Roosevelt did not give any specifics, as he didn't want to
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"indulge in issuing proclamations of over-enthusiastic assurance." Once again, the reason for this is because Roosevelt was concerned that if people were too optimistic, that it would lead to farmers and factories increasing their output, thus over-producing their products. Roosevelt
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Roosevelt, Franklin D. Fireside Chat on the Purposes and Foundations of the Recovery
Program, 1933.

didn't want to give a false sense of prosperity because he feared that this would lead right back
7 into another downward spiral. Roosevelt also gives an example that calls for all cotton manufacturers to eliminate starvation wages, long house of labor, child labor, but he points out, that if is no good if ninety percent do agree to eliminate such practices, while ten percent continue to pay starvation wages, use child labor, and long hours of labor. This would compel the other ninety percent to meet these unfair conditions in order to compete. This would seem to be another indication of the eventual passage of the National Labor Relations Act.
The
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National Labor Relations Act of 1935, is created to deal with many different problems. From starvation wages, and long hours of labor, to preventing the disruption of commerce while at the same time protecting the rights of workers to unionize and strike. Before any of this could be accomplished, however, what exactly in the workforce constitutes a person, employee, professional employee, employer, supervisor, representatives, commerce, labor organization, affecting commerce, labor dispute, unfair labor practice, and the National Labor
Relations Board all had to be defined. Some of the rights that the National Labor Relations
Board recognizes is the right to self-organization, and collectively bargain. One of the reasons it would seem this was part of the act, was the hope that giving employees protection would encourage them to unionize and demand a living wage, or a higher wage.
This is related to both Roosevelt's First Inauguration Address and Roosevelt’s fireside chat on the recovery because it is a response to much of what Roosevelt said in both. It attempts to deal with wages that Roosevelt showed much concern over in his fireside chat. It also helps to stabilize the economy by bringing standards to industries, this is to help keep the flow of
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National Labor Relations Board. National Labor Relations Act, 1935, Act; 29 U.S.C. pp.
151-169.

commerce more steady and reliable, this goes back to Roosevelt mentioning of how the rulers of
8 the exchange of goods had failed. It is different from my other sources because it is more than just words as Roosevelt talked about, it is an actual law. It goes into great detail about how different situations should be handled. It deals with what happens in those situations, and what could be done because of it, and the limitations of the law.
My final source is a report to Washington, from the United States Housing Authority.
The report states that 12 "The United States Housing Act requires that at least 10% of the original capital development cost of every low-rent housing project must be met by the localities." This ties back into the idea that Roosevelt felt that State and local governments had to help in the recovery. The low-rent housing projects were also another way to help give those with low income more buying power and money to spend elsewhere. While this may not be a wage increase, it still has an impact on the individuals spending and does decrease the net amount of money they would have to spend on housing, leaving more money for other goods. This source if different in that it's a report to Washington on one of the New Deal projects. It mainly covers facts and figures of money spent and in what counties, however, it also covers how living conditions were improved because of these low-rent housing projects. Some of the improved living conditions are less sickness, crime, delinquency, and fires that were created because of slum conditions.
Overall, all over my sources are centered on improving the living conditions of the average American citizen, whether it be from wages to labor, to the price of their products. All of them were intended to help get the American economy out of the Great Depression. While many of these programs and laws achieved the purpose they were intended for, many of them had
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USHA Press Section. Department of the Interior United States Housing Authority, June
24, 1939.

9 unintended effects that negatively affected the economy. The United States economy, even in the
1930's was very complex, the impact of the many New Deal programs are still debated today.
Roosevelt had many concerns about over production. One might ponder Roosevelt's statement in saying that the only thing to fear is fear itself. In the Great Depression it appeared that there was much too worry about, and what possibly could be. There was no shortage for concern, and much for Roosevelt to fear.
BIBLIOGRAPHY
PRIMARY SOURCES
Harrison, E. L. To the Honorable President of the U.S.A
.
Franklin D Roosevelt.
, 1934.
National Labor Relations Board. National Labor Relations Act , 1935, Act; 29 U.S.C. pp.
151-169.
Roosevelt, Franklin D. Fireside Chat on the Purposes and Foundations of the Recovery
Program , 1933.
Roosevelt, Franklin D. First Inaugural Address , 1933.
USHA Press Section. Department of the Interior United States Housing Authority , June
24, 1939.
SECONDARY SOURCE
Fishback, Price V. Horrace, William C. and Kantor, Shawn. "Did New Deal Grant
Programs Stimulate Local Economies? A Study of Federal Grants and Retail
Sales during the Great Depression." The Journal of Economic History , 2005, Vol.
65(1), pp. 36-71.