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get work quickly enough.Besides relief to the unemployed, something had to be done to help farmers. The 1stAgricultural Adjustment Act, 1933was passed to help agriculture by dealing with its fundamental problem, overproduction. The AAA: 1) paid benefits to farmers who agreed to limit production through acreage limitations and marketing quotas; 2) funding came from taxes on processors of farm products such as millers and meatpackers. This raised prices by limiting production, meaning agricultural goods cost more. This was bad for the general population because it raised prices for two reasons: 1) they had to pay more for agricultural goods: 2) the taxes paidby the processors were just passed along to the consumers. The AAA was just trying to help farmers because they were in such a bad shape. It did not bring prosperity to the agricultural sector, but it did save it from getting worse. This changed agriculture in the U.S. from that day to the present and made agriculture into a subsidized part of the economy, which it is to this day.Something had to be done for industry, so the government passed the National Industrial Recovery Act, 1933, which created the National Recovery Administration (NRA). In each major industry (automobile, textiles, etc.), a 13
committee with representatives from management, labor, and government established codes that set limits on production, prices, wages, hours, etc. The fundamental idea behind this was to stabilize business by reducing competition and protecting workers at the same time [for example, in the textile industry, plants could only operate eighty hours a week, could only require forty-hour workweeks for employees, with a minimum wage of $13/week ($12 in the South), and could not hire children under the age of sixteen]. How was this enforced? The NRA was based on popular support and pressure: companies that complied with the rules were allowed to fly the “Blue Eagle” symbol in their windows and on their products, so people would shop with them. This only worked so long as the economy was doing really bad and businesses and individuals were united; as soon as the economy showed signs of recovering, businesses went back to what they do best in a capitalistsystem: competing. The act was eventually declared unconstitutional by the Supreme Court in 1935.Probably the most controversial part of the New Deal was the Tennessee Valley Authority, 1933. This was a government project based in the Tennessee River Valley, one of the most underdeveloped and poverty 14
stricken areas in the U.S. [illiteracy and diseases were rampant; the area was frequently flooded, with homes completely washed away; only 2 out of every 100 homes had electricity and the people that did have electricity had to buy it from private electrical companies].