The New Deal: The Causes Of The Great Depression

The Great Depression that began in 1929 was a crucial time in America’s history as the unregulated capitalism and overproduction in the previous period created an economic and social catastrophe. 25% of the nation was unemployed as citizens lost a sense of dignity and self-reliance. Finding a balance between capitalism and socialism in order to regulate the economy and ensure the right of the citizens a new social and economic reform agenda by President Franklin D. Roosevelt called the New Deal was established. The focus of the New Deal was for the federal government to deliver immediate relief to the citizens specifically the unemployed, recover the lost businesses and farms, and reform the economy to prevent devastation like the Great Depression

In 1933, under the National Industrial Recovery Act (NIRA), the National Recovery Administration (NRA) implemented standards or codes for “output, prices, and working conditions” (Foner, 800) for industrial workers. The government intervened in these big businesses, the capital market no longer had this “invisible hand” that allowed the free market to compete and monopolize without any government regulation. Nonetheless in 1935, the Supreme Court declared the NRA as unconstitutional because the legislative branch was given executive power, discounting the separation of powers. Plus, the industry codes implemented by the federal government were manipulated by the big business as they increased their prices and fired the labors they wanted so they ran their companies without care for the labors. Therefore, the NRA that only lasted two years ended up not fixing the relationships between businesses and their employees. However, this was not the end for the New Deal to protect the labors from the big businesses. The National Labor Relations Act also known as the Wagner Act of 1935 passed under the second phase of the New Deal guaranteed industrial workers right to form unions, the right to collective bargaining, outlawed unfair labor practices, and created the National Labor Relations Board (NLRB). More than ever, the federal

The Agricultural Adjustment Act (AAA) in 1933 allowed the federal government to set production quotas in order to increase farm prices (Foner 803). Although, the AAA accomplished its goal and increased farmer’s incomes it did not benefit all farmers. Tenant farmers and share croppers, who were largely African-Americans and other minority groups, did not receive this economic benefit as they did not own the land they were farming on. Also, since the farmers were paid not to grow crops they were able to lay off many of their tenant farmers and sharecroppers (Foner 803). Although the AAA benefited the ones in the top agricultural positions, it just as much hurt the people in the lower positions. As if agricultural workers did not have an already tough time during the depression, rural America was extremely hurt by the weather. The 1930’s saw some harsh weather conditions for farming. A well-known example is the Dust Bowl in areas such as Oklahoma (Foner 803). The Dust Bowl displaced more than 1 million farmers and author John Steinbeck writes about these former farmers who he refers to as the “Harvest Gypsies,” whom had their lands destroyed and the places they called home disappeared, forcing them to migrate for work. People that may have