New Deal Analysis

The new deal was successful in reforming many of the problems that led to the great depression. One of the actions that helped the depression to grow was the crash of the stock market. The attitude of the 1920's was one of market speculation. People bought stock, which increased it's value, making more people invest in it. This led to artificially high stock prices, and when the bubble burst, the whole market collapsed. One of the reasons the market crash affected the economy was margin buying, where stock is bought on credit. This made many lose the borrowed money and unable to pay it back. Banks who had loaned the money to the investors lost the money that was to be paid

back. This led to the failure of many banks. The New Deal reformed this by making margin buying stricter, so that banks and other institutions that offer loans would be protected. Also, due to the bank failure, banks became insured by the FDIC so that the people who had money in banks were guaranteed that it would stay safe. The government did this so the people would regain their trust in the bank system, and put more money in the bank. Other organizations were also formed to reform various aspects of the country. These included the so-called alphabet reform agencies, named for all of their initials. The Securities and exchange commission was formed to regulate the stock market and enforce the laws that were passed. This was done to prevent another stock market crash. Unions were encouraged during the great depression because they reformed the way labor worked. They put more power into the hands of workers, and made sure that all workers were treated fairly.

With respect to relief, the government was successful in providing many of the people hardest hit with help. This help came in the form of the Civilian Conservation Corps, the Public Works Administration, and many other organizations. The CCC provided young men with the opportunity to work. The work was usually a public works conservation project such as planting trees, however, they also built infrastructure. The PWA contracted out workers to private firms to built public works such as roads, bridges, and schools. All of these different organizations were created to help improve industrial spending and increase jobs. Most of these organizations were not completely successful to their purpose, but were highly successful in providing immediate relief.