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Federal Agencies of the Great Depression

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ABSTRACT The Great Depression was a low time in the economic history of the United States. During this time, the economy, in the United States, hurt the general welfare of citizens. The result of the Great Depression was the New Deal. This New Deal shaped an essential and deep-seated change in the role and composition of the federal government in the United States. This caused the federal government to take a much larger role in supporting general welfare programs, but the states would retain some control in the management of these programs. The federal and shared states’ parts of the general welfare system were distinguished by unfriendly rules. The focus of this paper is to show how the economic climate of the times and the federal response shifted the way Americans perceived the government. This paper closes with the results of the New Deal and how it shaped the future economic aspects of America.

TABLE OF CONTENTS PAGE
I. INTRODUCTION………………………………………………………4
II. PROGRAMS DESIGNED TO COMBAT UNEMPLOYMENT……….4
III. PROGRAMS DESIGNED TO BOOST THE HOUSING MARKET…..7
IV. PROGRAMS DESIGNED TO IMPROVE TH GENERAL WELFARE………………………………………………………………8
V. CONCLUSION………………………………………………………….9
VI. REFERENCES…………………………………………………………..10

INTRODUCTION The Great Depression had an extremely large impact on the United States economy during the 1920’s through the 1940’s. The gross domestic product (GDP), in current dollars, hit a low of $56.4 billion. Government expenditures and investments were about $8.7 billion during this time. The unemployment rate skyrocketed to 24.9% in 1933. Also, in 1932, the Dow Jones Industrial Average was 41.22 points (Green, 2003). These statistics show the need for reform during this time. The government responded with programs to combat this downturn of the economy. The Great Depression had many contributing factors. These factors include: the Stock Market Crash of 1929; national bank failures; traumatic consumer purchasing decrease; high tariffs on European imports; and drought conditions across the country (Green, 2003). President Franklin Delano Roosevelt (FDR) developed a plan to combat these dire economic conditions. This plan was named the New Deal. The New Deal created government regulated programs to provide relief for the American people. These programs were designed to give relief in areas such as unemployment, the housing market, and the general welfare of the people.

PROGRAMS DESIGNED TO COMBAT UNEMPLOYMENT The unemployment rate is one of the most important aspects when analyzing the economic state of the union. The unemployment rate during the early 1930’s averaged about 15.9%. The unemployment average during the later 1930’s averaged around 20.6%. These figures show just how desperately jobs were needed during this time (Biles, 1994). FDR created programs that would employ workers who could not find work in the private sector. This unemployment problem not only affected the worker but also the GDP of the country (Biles, 1994).
Public Works Administration (PWA) The PWA was created in June 1933 by the National Industrial Recovery Act. The New Deal programs centered on the PWA due to the nature of the public housing projects for the poor. The goal of this project was to provide employment to citizens, stabilize purchasing power, and contribute to the revival of American industry through the construction of large-scale public works such as dams and bridges (McElvaine, 2009). The problem was that it only produced 25,000 units of affordable housing in a little over 4 years. This was a major downfall in which the PWA project could not survive (Tweton, 1988). FDR shut down the PWA in 1939 when industry moved toward production for the war. The PWA fell under the authority of the Federal Works Agency in 1943 (McElvaine, 2009).
Civilian Conservation Corps (CCC) The Civilian Conservation Corp was one of the most admired programs of the New Deal. The CCC put about three million people to work across America during the Great Depression (Biles, 1994). CCC members had to be between the ages of 18-25, plus be unemployed or have an unemployed father. They were recruited through local welfare boards. There was a special provision allowing war veterans of any age to join (Green, 2003). The recruits had to commit to a six-month enrollment period. This enrollment period could then be extended for up to two years. CCC recruits were provided housing and food in campsites operated by the Army. They earned around $30 per month. Of this $30, $25 must be sent home to their family (McElvaine, 2009). The CCC provided benefits to the unemployed families through their salaries and also provided support for the country’s infrastructure. By 1935, the CCC employed over a half million workers.
The CCC built highways, planted trees, hung telephone lines, and enhanced state and national parks by constructing campsites and walking trails. In 1942, due to the Army draft, the CCC was disbanded having been a very successful program of the New Deal (Maher, 2008).
Civil Works Administration (CWA) The CWA was very similar to the CCC. The CWA recruits worked on sewers, roads, schools, playgrounds, airports, and outhouses. They laid about 12 million feet of sewer pipe, built or improved 255,000 miles of roads, improved over 40,000 schools, installed 3,700 playgrounds, constructed or maintained about 1,000 airports, and 250,000 outhouses in the rural parts of America (Biles, 1994). In early 1934, the CWA was criticized for using taxpayer money and not getting anything of permanent value from the investment. FDR disbanded the CWA in March of that year. It would be replaced with the Works Progress Administration (Green, 2003).
Works Progress Administration (WPA) The WPA was created in 1935 and renamed the Works Projects Administration in 1939. The WPA was intended to improve the purchasing power parity by employing consumers on infrastructure projects. The WPA’s accomplishments included: the construction of 116,000 buildings; 78,000 bridges; and 651,000 miles road (Biles, 1994). One of the major activities of the WPA was to promote non-traditional activities and the arts. These activities consisted of the Federal Art Project, the Federal Writers' Project, and the Federal Theatre Project.
These activities produced around 10,000 drawings, paintings, and sculptured works, as well as murals painted on many public buildings (McElvaine, 2009). During World War II, increases in the private sector employment caused cuts in the appropriations and payrolls in the WPA.
It was officially disbanded in 1943 after eight very successful years.
Tennessee Valley Authority (TVA) TVA was created by a congressional charter in May 1933. The goal of TVA was to provide electricity generation, flood control, fertilizer manufacturing, navigation, and economic development in the Tennessee Valley (Biles, 1994). TVA was and still today considered a corporate owned by the federal government. TVA was used as a provider of electricity to modernize the region’s economy and development. The Tennessee Valley was especially hit hard by the depression. Economic indicators suggest that this area fell far below the average of the rest of the country. The Tennessee Valley is located in the southeast and covers most of Tennessee, Mississippi, Kentucky, and parts of Alabama, Georgia, North Carolina, and Virginia. TVA is still proudly going strong today (Maher, 2008).

PROGRAMS DESIGNED TO BOOST THE HOUSING MARKET
Federal Housing Administration (FHA) The FHA was created by the Federal Housing Act of 1934. The focus of the FHA was to expand home ownership. The strategy of the FHA was to provide security insurance to protect creditors who were lending private mortgage money. This strategy helped encourage giving loans at a lower interest rate and a longer repayment period.
The FHA is credited with reducing foreclosures from 250,000 in 1932 to just 18,000 in 1951. FHA loans are used today to help people, who normally would not qualify to buy a home, become homeowners (Gelfand, 1975).
Home Owner’s Loan Corporation (HOLC) The HOLC was created in 1933 to help keep small home owners from foreclosing on their mortgages. The HOLC was under the authority of the Federal Home Loan Bank Board. The goal of the HOLC was to purchase and refinance mortgages in default or foreclosure.
The tool used was a federal government bond paying 4 percent interest. The result was a decrease in foreclosure rates and $250 million in delinquent taxes to state and local governments. HOLC officially ended in February 1954 (Henderson, 2000).

PROGRAMS DESIGNED TO IMPROVE THE GENERAL WELFARE
Farm Security Administration (FSA) The FSA was created in July 1937 to improve the country’s general agricultural stance by helping small farmers keep and develop their land. The FSA used rural rehabilitation grants or loans to help small farm enhancements. The loans that were given ranged from $240 to $600 and went to about 700,000 small farmers (Green, 2003). The FSA was estimated to help over 1/9 of the small farmers. It was criticized due to the fact that it helped such a small portion of the population (Green, 2003). The FSA was disbanded in 1946 when it was adopted by the Farmers Home Administration.
National Recovery Administration (NRA) The NRA was created in 1933 by the National Industrial Recovery Act. The NRA was designed to help business industries recover from The Great Depression.
This was done through the government’s partnering with the chief officers in industry to create better practices, social progress, and recovery. This group came up with business and labor practices that were suppose to be “fair” to the worker. These practices included: the minimum wage; industrial and building codes; price controls; set work hours; and collective bargaining units (Tweton, 1988). The NRA was considered highly controversial by the end of 1933. The controversy was mired around the industrial and building codes and the price controls set by the government. By May 1935, the NRA was ruled to have invalid authority by the Supreme Court (Tweton, 1988).
Social Security Administration (SSA) The SSA was created by the Social Act of 1935. Social Security was originally created to examine and observe problems relating to economic well-being and recommend legislation to support the security of the citizens. The Social Security Act of 1935 established the Old-Age Benefit system and the Old-Age Insurance program (McSteen, 1985). These programs provided insurance and pay benefits for retired workers. The Social Security Administration has had many changes over the last 76 years, including the Medicare program. The SSA currently administers Supplemental Security Income, Survivors’ and Disability Insurance, and Old-Age Insurance. SSA has helped bring the country out of the Great Depression. The affects of the Social Security Act of 1935 can still be felt on the current economy (McSteen, 1985).

CONCLUSION

As stated in the body, three of the major objectives to combat The Great Depression focused on unemployment, the housing market, and the general welfare of the population.
During this time unemployment hit an all time high, the housing market was almost non-existent, and the consumer confidence was very low. President Franklin Delano Roosevelt decided to fight unemployment by creating federally subsidized jobs. Many of these jobs were concentrated in the rural parts of the United States. These programs produced projects in Alabama such as: Desoto Caverns Park; Oak Mountain State Park; and Cheaha State Park, just to name a few. Two of the programs created to fight the dramatic decline in the housing market were the FHA and the HOLC. These programs were designed to insure citizens and mortgage companies against foreclosure. The programs created to boost consumer confidence were the SSA, NRA, and the FSA. These programs were designed to help the individuals and businesses get back to pre-depression footing. A few of these programs are still in use today. The TVA and the SSA are two of these successful programs currently in use. The United States changed in the 1920’s through the 1940’s. While some believe this change was for the better, there are some who believe it was for the worse.

REFERENCES
Biles, R. (1994). The South and the New Deal. Commonwealth of KY: The University Press of Kentucky.
Gelfand, M. (1975). A Nation of Cities: The Federal Government and Urban America, 1933-1935. Oxford, UK: Oxford University Press.

Green, E. (2003). The New Deal and Beyond: Social Welfare in the South since 1930. Athens, GA: The University of Georgia Press.
Henderson, S. (2000). Housing & the Democratic Ideal: The Life and Thought of Charles Abrams. New York, NY: Columbia University Press.
Maher, N. (2008). Nature’s New Deal: The Civilian Conservation Corps and the Roots of the American Environmental Movement. Oxford, NY: Oxford University Press.
McElvaine, R. (2009). The Great Depression: America, 1929-1941. New York, NY: Three Rivers Press.
McSteen, M. (1985). Fifty Years of Social Security. Social Security Bulletin: vol 8, pg 36-44.
Tweton, J. (1988). The New Deal at the Grass Roots: Programs for the People in Otter Tail County, Minnesota. St. Paul, MN: Minnesota Historical Society Press.

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