🌾 Achievements
Crop prices began to rise and farm incomes improved. Many farmers could keep their land and pay their debts.
Roosevelt and the New Deal, 1933-41 » The Alphabet Agencies: Farming, Industry and the TVA
What you'll learn this session
Study time: 30 minutes
Edexcel spec: Paper 2 Section A, Investigation A3, Key topic 4
- How the Agricultural Adjustment Administration (AAA) tried to help farmers
- How the National Recovery Administration (NRA) used the Blue Eagle and codes to help industry
- How the Tennessee Valley Authority (TVA) brought dams, power and jobs to a poor region
- How to compare two sources in an 8-mark question
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Unlock This CourseThree problems, three agencies
In 1933 Roosevelt's New Deal aimed at relief (help now), recovery (a stronger economy) and reform (fixing the system). The Alphabet Agencies were new government bodies, known by their initials, that carried out these aims. Some gave jobs to the unemployed. This lesson looks at the three that tackled farming, industry and one very poor region.
Farming: the AAA
Farmers had been in trouble since the 1920s. They grew more than people could buy, so prices were very low. Many could not pay their mortgages (loans taken out to buy land) and lost their farms.
Key terms:
- Surplus: more of a product than people want to buy, which pushes prices down.
- Subsidy: money paid by the government to help a group, here farmers.
The Agricultural Adjustment Act was signed on 12 May 1933 and set up the Agricultural Adjustment Administration (AAA). Its idea was simple. If farmers grew less, there would be no surplus and prices would rise. The AAA paid farmers subsidies to produce less of crops such as cotton, wheat and corn, and to keep fewer pigs. The money came from a tax on the companies that processed food.
In 1933 the crops were already growing, so the AAA paid farmers to plough up about 10 million acres of cotton and to kill millions of young pigs. This shocked many people while others went hungry.
❌ Shortcomings
The biggest payments went to large landowners. Some took land out of use and sent away the sharecroppers (poor farmers who rented land and paid with part of the crop), who lost their homes and work.
Industry: the NRA
Industry faced a different problem. Firms were cutting wages and prices against each other to survive, and that made unemployment worse. The National Industrial Recovery Act of 16 June 1933 set up the National Recovery Administration (NRA), led by General Hugh Johnson.
Key terms:
- Code of fair competition: a set of rules agreed for a whole industry, covering wages, hours and prices.
- Blue Eagle: the NRA's emblem, shown by firms that joined, with the words “We Do Our Part”.
Each industry drew up a code. Codes set a minimum wage and maximum hours, and banned child labour under 16. Firms were also allowed to agree prices with each other, which would normally be against the law. The idea was that if every firm raised wages together, none would be undercut, and workers would have more money to spend.
Joining was voluntary, so the NRA relied on the Blue Eagle. Firms that agreed to the codes displayed it in their windows and on their goods, and shoppers were urged to buy only from them. There were parades and publicity, and the Blue Eagle became famous across the country.
🦅 Achievements
Millions of workers gained shorter hours and better pay, child labour in factories fell, and the Blue Eagle lifted public hopes.
🏭 Shortcomings
Small businesses complained that big firms controlled the codes. The rules were hard to enforce, and many firms kept prices high.
A poor region: the TVA
The Tennessee Valley, which covers parts of seven southern states, was one of the poorest areas in the USA. Farms were worn out by poor farming methods, floods were common, and very few homes had electricity.
Key terms:
- Hydroelectric power: electricity made from the force of falling water, usually at a dam.
- Flood control: using dams and other methods to stop rivers flooding.
The Tennessee Valley Authority (TVA) was set up on 18 May 1933. It was a government-owned corporation, so it could plan for the whole region at once. It built dams, beginning with Norris Dam, to control floods and make cheap electricity. It also made fertiliser, taught farmers how to protect the soil, planted trees, and gave thousands of people jobs.
⚡ Achievements
Floods were reduced, electricity reached farms and towns, and the valley became more prosperous.
🚧 Shortcomings
Private power companies said it was unfair competition from the government. Thousands of families had to leave land that was flooded behind the dams.
Common mistakes
- Mixing up the agencies. The AAA was for farmers, the NRA for industry and workers, and the TVA for one region.
- Saying the AAA gave farmers more crops. It paid them to grow less so that prices would rise.
- Thinking the Blue Eagle was a law. Joining the NRA was voluntary, and the emblem showed who had joined.
Exam-style question
Study Sources A and B.
Source A
From a radio address by President Roosevelt, 24 July 1933.
If all employers in each competitive group agree to pay their workers the same wages – reasonable wages – and require the same hours – reasonable hours – then higher wages and shorter hours will hurt no employer. ... That is the simple idea which is the very heart of the Industrial Recovery Act.
Source B
From a message by President Roosevelt to Congress, 10 April 1933.
I, therefore, suggest to the Congress legislation to create a Tennessee Valley Authority, a corporation clothed with the power of Government but possessed of the flexibility and initiative of a private enterprise. It should be charged with the broadest duty of planning for the proper use, conservation, and development of the natural resources of the Tennessee River drainage basin ... for the general social and economic welfare of the Nation.
How far does Source A support the evidence of Source B about how the New Deal planned to help the USA recover? Explain your answer. [8 marks]
Model answer
Source A supports Source B in showing a plan led by the government for the good of the whole country. A describes “the simple idea which is the very heart of the Industrial Recovery Act”, and B asks for “legislation to create a Tennessee Valley Authority”, so both rest on legislation. Both also aim at wide benefit, since A wants “higher wages and shorter hours” for workers and B wants “the general social and economic welfare of the Nation”.
However, the sources differ in method. A asks private employers to “agree” to the same wages and hours, so it relies on firms cooperating, whereas B wants “a corporation clothed with the power of Government” to carry out the work itself. They also differ in focus. A is about pay and hours in industry, while B is about “natural resources” in one river region.
Overall, A supports B quite well on the aim of government planning for national welfare, but they differ on who does the work and what is tackled, so the support is only partial.
What lifts it to the top level: it cross-refers the sources with matched quotations for both agreement and difference, and ends by judging how far A supports B.
Exam tip
Pick out at least one agreement and one difference, and quote a few words from both sources each time. Then finish with a sentence that says how far, such as “quite well” or “only partly”. You do not need outside knowledge for this question.
Recap
- The AAA paid farmers to grow less so that prices would rise, but sharecroppers often lost out.
- The NRA used industry codes and the Blue Eagle to raise wages and cut hours, but small firms felt left out.
- The TVA built dams for flood control and cheap electricity in a poor region, but families lost land and private power companies objected.
Exam tip
For any Alphabet Agency, learn what problem it tackled, how it worked, one achievement and one shortcoming. That gives you balanced points for any question.