How successful was the first New Deal in promoting economic recovery?
The administration of Franklin D Roosevelt came into office in March 1933, straight after one of the worst economic crises in American history, and the way this crisis was handled included a vast variety of aggressive and often controversial measures. Some of these radical actions were incredibly successful and managed to lessen the impact of the Great Depression, however the situation wasn't completely resolved due to the magnitude of the crisis as well as some less successful reforms.
The reform of the banking system is one of the best examples of great successes that were achieved through the first New Deal. The Emergency Banking Act was the piece of legislation which began this process of extensive reform. The 4 day bank holiday organised by FDR allowed the Treasury to begin investigating banks, reorganising the assets within the system and to consequently begin stabilising the economic situation. This action was supported by the Reconstruction Finance Corporation, which was set up by President Hoover, as it played a major role in reducing the probability of bank failure and stimulating bank lending to attempt to restore the prosperity that was present in the US prior to the Great Depression. Due to the fact that banking reform began with the Federal Reserve Banks, it allowed the situation to steadily stabilise and this is why by the end of the month when reform began 70% of all US banks were able to reopen and $1 billion was deposited into them hence showing that the public's confidence in banking is steadily returning. This was also aided by the Glass-Steagall Act, which prohibited banks from taking part in investment banking and providing guarantees of all bank deposits up to $5,000. All of the reforms played a crucial part in providing the machinery to restore the financial system and make sure that it is regulated properly to prevent another crisis from happening.
However, not all of FDR's attempts to achieve economic recovery through reform were this successful and his reforms in business were notorious for failing despite good ideas that the acts were founded upon. National Recovery Administration was the key attempt to oversee industrial recovery and provide a more stable future within the business industry. The legislation was based on promoting industrial expansion and encouraging American business to thrive, however the intricacies of NRA were unworkable for most people. Firstly, anti-trust legislation being suspended only benefited Big Business as small businesses were purely focused on just keeping their companies afloat. The codes that were the key element of NRA were contentious and small firms found it very difficult to comply to them and due to the inbuilt bias towards Big Business as the codes were drawn up by its representatives and inexperienced White House officials. The codes ultimately did not encourage economic recovery, in fact some people were found to be wrongfully sent to prison due to their inability to fit the NRA's demands – the NRA was later found to be unconstitutional through the Supreme Court.
Nevertheless, not all attempts to encourage economic recovery of this period were fully successful or unsuccessful. FDR did a lot to help the unemployed as it was one of the greatest and most widespread issues that came along through the Great Depression. The Tennessee Valley Authority was one of such schemes that is known as the boldest action that was undertaken during the FDR's presidency. The TVA, not only created jobs more importantly it effectively became a central authority for the region in regards to power and water. It also did a lot to help the farmers of the area despite being key in modernisation and improving living standards of the region's residents. Educational and welfare programmes were also set up due to the huge success of TVA. The Civilian Corporation Corps was