Franklin D. Roosevelt’s New Deal: Antecedent Events and Its Major Historical Legacy

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Franklin D. Roosevelt is famous for its many winged sayings. Perhaps the brightest of them was uttered by him during the struggle for the presidential post: “There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny”. These words of the thirty-second president of the United States of America are rightfully included in samples of American oratory. But it was not ordinary rhetoric: with all its beauty and emotionality, the president’s judgment very accurately reflected the essence of the dramatic turn - an unprecedented economic and social collapse! - in the American historical development of the turn of the 20-30s and in its perception by the people of the United States.

It was a truly amazing, unique metamorphosis in the development of the United States: after all, quite recently, in the 20s, the generation of Americans who were ‘given a lot’ enjoyed the highest standard of living in the world and revel in the ‘era of prosperity’ seemed, infinite. And suddenly this economic miracle collapsed like a house of cards. It collapsed during a single year: the unprecedented global economic crisis brought its most severe blow to the United States, and its heavy heel crushed not only the poor but tens of millions of average and rich Americans.

In the same year 1933, President Franklin D. Roosevelt stood at the head of a generation of Americans. It was one of the most tragic and unpredictable moments in American history: faith in the healing properties of private property and the market collapsed, a vacuum was formed in its place, and no one had convincing decisions guaranteeing success to break the deadlock and save the nation. The nation itself was hoping for a miracle, and the role of the Messiah was assigned to Franklin D. Roosevelt.

Today, people have reasons to say that Roosevelt coped with his mission: as a result of his New Deal, American society was saved, removed from the historical impasse.

What three events led to the new course of Roosevelt? The first reason can be considered the First World War. Initially, the First World War had positive consequences for the economic development of the United States. They not only became a highly developed industrial country, but also the most powerful nation in the world. The war did not affect the productive forces of the country, the loss of labor resources was significantly less than in Europe.

The military events in Europe allowed the United States to carry out the supply of military products, food and raw materials. The value of United States exports has more than tripled. The increased cash inflows into the country's economy were realized in the form of investments, which led to an economic boom and an even greater increase in the US share in global industrial production. When the war ended, then in 1920 the economic recovery was replaced by an economic crisis. The volume of industrial production for the year dropped sharply. The rate of decline in production in heavy industries was even higher, the number of unemployed increased significantly, and the process of ruining the middle strata of the population accelerated. A deep and destructive agrarian crisis led to the ruin of a huge number of farmers. By 1923, the country manages to overcome the crisis and begins a new economic upturn – ‘American prosperity’ on the basis of a massive renewal of fixed capital, technical re-equipment. enterprises, the growth of their energy capacity, the mechanization of production processes, the introduction of standardized and mass production, increasing the intensity of labor.

Special attention was paid to the development of the steel industry, the oil industry, the power industry, and the automotive industry became a symbol of the development of the American economy. The production of cars by three US corporations increased from 1921 to 1929 more than tripled and amounted to 4.8 million units. The activity of the stock exchange has intensified, the volume of foreign trade has increased significantly.

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However, in traditional sectors of the economy - textile, footwear, shipbuilding, etc. - production was stagnant. The most unfavorable situation has developed in the agrarian sector of the economy. Increasing the productivity of agriculture on the basis of its intensification led to a sales crisis. The farms of small and medium farmers became unprofitable. The crisis in agriculture is complemented by an unfavorable price ratio for agricultural and industrial products. In 1929-1933 ‘The era of prosperity’ was replaced by the Great Depression.

The second reason can be called the Great Depression. Since the First World War was able to shake the US economy, the great depression simply killed the economy. The collapse in the United States in October 1929 is considered the beginning of the Great Depression. In the history of America and before there were economic crises, but none of them lasted more than four years. The States experienced the Great Depression three times longer than the economic upheavals of the past. Citizens, obsessed with the idea of rapid enrichment, put all their savings into corporate stocks in order to sell them more expensive. As everyone knows, demand creates supply, and the value of securities has grown exponentially. Americans were not stopped by inflated stock prices, and they, tightening their belts, continued to buy them in the hope of a good jackpot in the future. In order to purchase securities, investors actively took out loans. An agiotage with shares gave rise to a bubble, which, according to the laws of economics, sooner or later should have burst. And the time of this bubble came on the ‘Black Thursday’ of 1929, and investors in a panic began to get rid of the securities. In one day, more than 12.9 million shares were sold. Following the bankrupt shareholders, one after another, banks began to close, which were actively issuing loans to buy securities, and after an exchange panic, they admitted that they could not repay debts. For bankruptcies of financial institutions, bankruptcies of enterprises were pulled out - without the possibility of obtaining loans, factories and various organizations could not continue to exist. The result of large-scale bankruptcy of enterprises was the catastrophic increase in unemployment. From this, it can be understood that people lived in material and spiritual devastation. And he needed a strong leader who could give faith in the future.

The choice of the leader - the predecessor of Roosevelt - is the third reason for the new course in the future. Herbert Hoover - the American president who struggled with the crisis in the first three years. He proceeded from the classical liberal idea that one should not interfere in the economy - “the market will settle everything itself”. Precisely for the reason that the people remained from the inaction of Hoover, then they were able to believe in Roosevelt that way.

Now it is necessary to move on to the three most important historical legacies of the New Deal of Roosevelt. The first thing that can be said about the New Deal has led to dramatic changes in the landscape of the US political world. Roosevelt granted much greater authority to the president. Numerous groups of citizens received legal support and protection, for the government could regulate the economy through labor relations and through federal programs and agencies. This helped the following leaders to introduce new reforms, because the people were already prepared. The two main political parties in the United States have also changed thanks to the New Deal. Roosevelt helped improve the position of the working class, which in the future made the working class a loyal supporter of the democratic party.

Improving relations between the government and the nation can be called one of the greatest successes of the New Deal. Unlike his predecessor, Roosevelt was convinced that the government should intervene in the economy, as well as help people who needed it. The fact that there are currently a number of social assistance programs in the United States is the merit of the New Deal. This includes payments to elderly non-working people, insurance in the event of a job loss, assistance to people with limited opportunities, and so on.

The last one, it cannot be said that the New Deal brought the country out of the great depression, but Roosevelt definitely helped to go through the most difficult moments more gently. As a result, the New Deal, which was a direct massive invasion of the state into the sphere of social and economic relations and included significant elements of regulation, helped to mitigate the manifestations of the crisis. What is also a clear merit of the New Deal.

No doubts, Franklin D. Roosevelt had a very difficult time managing the country of that time, but it is definitely worth noting that he did it excellently and the implications of the new course in the world are still visible.

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