Banking and Monetary Reform: The government utilized mandatory bank holidays to inspect accounts and restore solvency. Additionally, legalizing certain alcohol sales through the Beer and Wine Revenue Act served as a method to redirect criminal profits back into government tax revenue.
Public Works and Job Creation: The New Deal employed both skilled and unskilled labor through agencies like the PWA and CWA. While some jobs were temporary ('boondoggles' for unskilled workers), others focused on long-term infrastructure like dams, schools, and hospitals to facilitate future industrial growth.
Agricultural Supply Control: To combat low food prices caused by overproduction, the Agricultural Adjustment Administration (AAA) paid farmers subsidies to produce less. This technique aimed to artificially increase demand and raise profits, though it was criticized for destroying food while many remained hungry.
| Feature | First New Deal (1933) | Second New Deal (1935) |
|---|---|---|
| Primary Goal | Immediate stabilization | Long-term social reform |
| Key Agencies | AAA, NRA, CCC, TVA | WPA, NLRA, Social Security |
| Focus Area | Industry and Agriculture | Labor rights and Welfare |
| Political Tone | Pragmatic/Emergency | Radical/Social Justice |
Identify the Agency by Goal: In exams, questions often ask to describe specific agencies; always categorize them by the 'Three Rs.' For example, the CCC is primarily Relief/Recovery, while the Social Security Act is strictly Reform.
Assess Success with Nuance: Never state that the New Deal was a 'complete success' or 'complete failure.' Successful points include restoring bank confidence and building infrastructure, while failure points include the persistence of unemployment (which only ended with WWII) and the exclusion of minorities from certain benefits.
Constitutional Context: Be prepared to explain why the Supreme Court declared certain acts unconstitutional. The common thread was that FDR was perceived as overstepping executive authority by regulating matters (like farming or local wages) that the Constitution traditionally reserved for state governments.
The Unemployment Myth: A common misconception is that the New Deal ended the Great Depression. While it 'slashed' unemployment figures (from approximately 12.8 million to 5.6 million), full economic recovery and near-zero unemployment were only achieved through the massive industrial mobilization for the Second World War.
Uniform Benefit Fallacy: Students often assume the New Deal helped all Americans equally. In reality, groups like Black Americans often faced segregated camps (CCC) or lower wages (NRA), and many agencies like the AAA unintentionally harmed sharecroppers by paying landowners to produce less, leading to evictions.
The 'Pointless Job' Critique: While critics mocked 'boondoggles' (like scaring pigeons), these jobs were a calculated method to distribute cash to unskilled workers without the stigma of a direct handout, helping to maintain morale and consumer spending during the winter months.
