Banking Program example essay topic

FDR: The New Deal The day finally came when the United States, emerging to become a world power, began to crumble. Called Black Thursday, this October 24, 1929 would be the start of The Great Depression, and the first test on the Communist influences that were present around the world (Schraff 17). Then in 1933, Franklin Delano Roosevelt, FDR, was elected to the Presidency with hopes of uplifting Americans from the severe economic decline it was going through (Schlesinger 106). Roosevelt was prepared with a plan to battle depression with a set of new programs. His first "Hundred Days" helped pass new legislation to aid farmers, industrialists and workers (Watkins 123-160). "His technique was, as he said, 'bold, persistent experimentation...

Take a method and try it. If it fails, admit it frankly and try another. But above all, try something' " (Schlesinger 106). Roosevelt experimented with many new programs to help different groups, and Americans on the whole. The various programs created by FDR's New Deal helped bring the United States out of the Great Depression. Numerous factors caused the Great Depression in the United States from 1929 to 1945.

One of these was stock market speculation. People began to buy stocks with money loaned from banks, and used these stocks as collateral to buy more stock. The stock market began to increase rapidly on false hopefulness and borrowed money. Due to this, the stock market was uneasy and many began to lose confidence in it. Those with stocks tried to sell them, and no one was willing to buy.

This ultimately led to the downfall of the stock market in 1929 (Gupta). Also, the economy at that time was not steady. National wealth was not distributed evenly. Instead, most money was in the hands of a few families and businesses who saved or invested rather than spent their money on American goods.

Supply became greater than demand on products. Certain people profited, but many others did not. As a result of this, prices went up and Americans could not spare the money for many goods. While the wealth in America was not being distributed evenly, and over speculation of the stock market led to a lack of confidence, the United States began to fall into a deep depression that would last until the beginning of World War II (Gupta). Faced with this economic decline, came other factors that included unemployment and lack of confidence in banks (Church 100). Restoring faith in banks across the United States was one goal for FDR.

As depositors lost confidence in the national bank, over $1,000,000,000 was taken out in cash and hoarded (Boardman 64). The Emergency Banking Act closed all banks for four straight days, and put them under inspection by the national government (Schraff 52). Banks were put under meticulous scrutiny by the Treasury Department. The U.S. government demanded that all hoarded gold be returned and all of the $1,000,000,000 was deposited (Boardman 65). Banks were allowed to open only under a strict system of licensing (Schraff 52). Another banking program was The Federal Deposit Insurance Corporation, or FDIC, which was created by Congress to guarantee deposits up to $5000 (Gupta).

In the case that a bank folded, the depositor would still receive the $5,000 because it was backed by the government (Schraff 54). Both of these measures helped reestablished American faith in banks. It showed that Americans were no longer scared of losing all of their savings in a bank failure (Gupta). Once Americans overcame the bank scare, they soon realized that other problems were still prominent. Some of these problems were unemployment and poverty. FDR brought in Harry L. Hopkins, known for his ability to get to the bottom of a problem quickly, for assistance on the issues (Schraff 66).

Together, they came up with the Federal Emergency Relief Act, or FERA, which was created to help support those deteriorating relief programs already intact in each state (Gupta). FERA provided large sums of money to a state so that people would not go hungry (Schraff 67). Another program to help unemployment was the Civil Works Administration, or CWA. This program created jobs for people to work on building or repairing roads, highways, parks, bridges, airports, playgrounds, privies, flood control facilities, hospitals and many other public facilities (Watkins 126-127).

These workers, which totaled over 4,000,000 in less than a few months, were paid over $1 billion total on the various projects throughout the winter (Boardman 75). Close to half of the people hired were to come from the relief rolls and the other half were to come from people that were unemployed, whether they were on relief or not ("Library Projects Under Public Works, Civil Works, and Relief Administrations"). Along with these two programs, came the Civilian Conservation Corps, or, which was also brought about mainly by Hopkins. This program called for a specific screening of candidates to work on public projects. There were certain characteristics that were applied to those seeking work for the : The men had to be U.S. citizens between the ages of seventeen and twenty-seven, out of school, out of work, capable of physical labor, over 60 inches but under 78 inches in height, more than 107 pounds in weight, and had to possess no fewer than 'three serviceable natural masticating teeth above and below'. (Watkins 130) However, many war veterans seeking bonuses in Washington D.C. were offered jobs regardless of the age limit.

Many members remained young, hardy men, who worked to clean up parks, build truck trails, plant trees, install telephone poles, and build roads, among other tasks. The men employed by the became well rounded and productive Americans. Many of these men left hopeless lives of poverty to work, learn and ameliorate living conditions. Not only did they provide labor to help others, but they also were provided with resources to improve their own lives (Watkins 130-131). Many Americans were receiving some form of welfare, and now the Roosevelt administration turned its needs to helping business and industry. The National Industrial Recovery Act, or NIRA, created the National Recovery Administration, NRA, and the Public Works Administration, PWA (Schraff 63-66).

The NIRA took controls off the size of businesses and industry, by suspending anti-trust laws (Boardman 71). In doing so, they hoped to boost declining prices (Gupta). To keep wages under some kind of control the NRA established prices, work hours, and conditions to which all businesses had to comply (Watkins 142). Although some argue that the NRA only helped big business, it in fact increased product index and cut unemployment by about 2,000,000 (Boardman 72-73). Under the watchful eye of Secretary of Interior Harold L. Inkles, the PWA began to slowly make improvements to various public facilities.

Out of 3,073 counties in the U.S., 3,070 had PWA projects begun during this time period (Watkins 144-145). Places such as the Hoover Dam, the Tri borough Bridge, various schools, hospitals and sewage plants, were built by PWA workers (Boardman 74). This program was known as "one of the best parts of the NIRA" (Gupta). The Works Progress Administration, WPA, also helped provide work for 8 million Americans. The WPA built or repaired schools, hospitals, airfields, and various other public accommodations.

Business was also insured by the Securities and Exchange Commission, or SEC. This act mandated disclosure of all information on stocks being sold. The purpose of the SEC was to regulate the stock market. By doing this, the committee would make sure companies did not make false claims, or deceive consumers.

The government, and more specifically Congress, also gave the Federal Reserve Board the authority to manage the purchase of stock "on margin" (Gupta). Thus ensuring that another depression did not occur without warning or admonition. Farms during the Great Depression were struck brutally. Overproduction of goods, matched with an increase in prices led to a surplus of many goods. Congress passed the Agricultural Adjustment Act which gave farmers subsidies in exchange for a reduction of certain products.

Farmers were told to kill some animals and destroy particular crops. The government felt that if farmers decreased production of a certain product, the demand for the product would increase, and prices would increase as well (Boardman 68). As prices rose, farmer's incomes rose synonymously, and they were able to pay their debts. Consequently, the farmers could make new loans and remain in business (Schraff 90).

They were able to continue producing goods for the American, and foreign markets. Senator George W. Norris of Nebraska helped establish the Tennessee Valley Authority, TVA. Forty-thousand men were hired to build dams that would help control the waterways of the area (Schraff 61). Workers also found ways to stop erosion of the land, by planting trees, and teaching other farmers the same techniques (Schraff 62).

The project also produced electrical power, created engaging recreation areas, and manufactured fertilizer (Boardman 70). Electricity brought in much of the money the region needed to thrive and support these projects. The impact of the TVA is that it showed to Americans that government could undertake enormous public programs to revive the life of a region and reverse centuries of environmental damage (Schraff 62). One of Roosevelt's policies, that has lasted into the present, is the Social Security Act, or SSA. This act established a system that provided pensions for old-age workers (Gupta).

This old-age pension soothed fears that elderly people would have no work and be deprived of income (Schraff 82). People became eligible for these pensions at the age of sixty-five (Boardman 92). Also, the program created an unemployment insurance. People who were out of work would receive a small income while they searched for a job (Schraff 82). Victims of industrial accidents would receive benefits for the accident. Aid was given to the blind, dependant mothers and children and the physically disabled (Gupta).

In conclusion, FDR brought to the office more than just a want to end the Great Depression, but many effective programs to accomplish this goal. He helped secure national interest in the banks and gave jobs to unemployed persons. These newly hired men began to work on diverse programs to improve the nation's parks, transportation, and civic conditions. Businesses and farms were both helped by the New Deal. Government programs allocated money to assist both. The Stock Market was protected and surveyed under the SEC, to prevent another crash.

The TVA helped spread electricity and businesses in the southeast. The SSA eased elderly fears of not receiving income and provided relief for those who can not support themselves. Overall, FDR's New Deal helped create programs that ended the Great Depression. Although some argue that WWII ended the depression, FDR's programs were the main support and foundation for the increase in production of war goods. Therefore, the various programs created by FDR's New Deal helped bring the United States out of The Great Depression.

Bibliography

Boardman, Fon W. The Thirties: America and the Great Depression. New York, Henry Z. Walk, Inc., 1967.
Church, George J. "Taking Care of Our Own". Time. 9 Mar. 1998: 106-108.
Gupta, Prana vs. and Jonathan Lee. The Great Depression and The New Deal. 7 Mar 1996.
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Franklin Delano Roosevelt". Time. 13 Apr. 1998: 98-100.
Schraff, Anne E. The Great Depression and The New Deal. New York: Franklin Watts, 1990.
Watkins, T.H. The Great Depression: America in the 1930's.
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May 12, 2000 Period 1 Outline Thesis: The various programs created by FDR's New Deal helped bring the United States out of The Great Depression.