Section B: American option The Great Crash, the Great Depression and the New Deal policies, 1920-41 Read the sources and then answer both parts of the question. Source A The flood of legislation since 1933 is at the root of all our current problems. We are not investing, and we are not creating jobs. Uncertainty rules the tax situation, the labour situation and the monetary situation. The laws affecting all the conditions under which every industry and business must operate are constantly being changed by this government. Are taxes to go higher or lower or stay where they are? Are we to have inflation or deflation? More government spending or less? Are new restrictions to be placed on capital, business and profits? We cannot guess the answers. This government has caused both this uncertainty and this recession and it must end it. Then we will invest. From The Chief Executive of a major corporation, writing to shareholders, January 1937. Source B The economic downturn and the slump in private investment are not caused by economic factors. It is part of a political conspiracy against the President. It is an attack by the owners of capital designed to destroy the New Deal and lead to another economic breakdown. Sixty families who make up the industrial oligarchy which dominates the United States are leading this assault. This current recession, as well as the Depression itself, was caused by these monopolists. The courts have not helped either by striking down acts such as the National Industrial Recovery Act (NIRA). This has further damaged our recovery. From a speech by Harold Ickes, a member of Roosevelt's cabinet, March 1937. Source C Much of the current economic downturn is caused by misunderstanding between government and the business community. Government does not understand how business works and what conditions are needed to encourage new investment. Business does not understand the great expectations that have been placed on government to restore prosperity and end the despair which existed in the years after the crisis of 1929. It could well have been more supportive in the current downturn. The President can rightly be accused of being poorly advised and hostile to business. Those young men, the so-called ‘New Dealers’, who flocked to join his administration in 1933, must take responsibility for much of this. Although claiming to be motivated by high ideals, they sought power and jobs for themselves. They had no experience of either business or government, but they advocated and achieved radical change in both. They wish to give government the dominant role in the management of the economy. From an article in a leading New York financial newspaper, June 1937. Source D By 1936, we had a government at war with its economic machinery. Business was demoralised and for good reason. Practically no business group in the country escaped investigation or attack after 1933. The result was shattered morale. Roosevelt refused to remedy this situation with a balanced budget. He would not make a genuine attempt to make peace with business. The utility companies, for example, were prepared to invest huge capital in dams, power plants and transmission lines, creating thousands of jobs, but they were knocked off balance by the Utilities Act of 1935. They were too uncertain of the future to invest. Much of the responsibility for the President's thinking lay with those young lawyers and economics graduates, motivated by high ideals, who came to Washington in 1933. They knew little about either business or government. They were determined to change America for the better. Known as the 'Brains Trust' or the 'New Dealers', they shared two main beliefs. The first was a deep suspicion of all businessmen. The second was that government would be the temporary agency through which order would be restored and prosperity would return. Then it would return to its former role in the management of the economy. They did not anticipate what later happened. From the memoirs of James Farley, Roosevelt's election manager and member of cabinet, published in 1948.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2024). The mark or mark type is shown in brackets.

1. Indicative content
2. Similarities include:
3. Source C says that it was the advice of the New Dealers which made Roosevelt 'hostile to business' while Source D says that they had a 'deep suspicion of all businessmen.'
4. Both Sources maintain that they had a major influence on Roosevelt with Source C saying that 'much of the responsibility for this' lay with them and Source D says that 'much of the responsibility for the President's thinking lay with those young lawyers.'
5. Both Sources suggest that the New Dealers knew little of business or government.
6. Differences include:
7. Source C says that while claiming to be motivated by high ideals, in fact they were after 'power and jobs'. Source D says they were 'motivated by high ideals.'
8. Source C says they were after 'radical change' while Source D saw what they were only after a ‘temporary' change' in order to return to prosperity.
9. Source C says they wished to give the government the ‘dominant role in in the management of the economy' while Source D maintains that they wished eventually for it to ‘return to its former role' in the management of the economy. They did not anticipate that it would not.
10. Explanation:
11. Source C is an article in a leading New York financial newspaper which naturally sees the issue of the downturn from a business perspective. Much of what is written here about the New Dealers is largely accurate, if rather generalised. There were plenty of those young New Dealers who came for a 'dollar a day', worked hard, and then returned to their universities and law offices. There is some balance there however, the earlier comments about the failure of business to understand the pressures on government, especially in the light of the 1936 Presidential and Congressional elections, show this. It is the second paragraph that is more one-sided and critical. Source D is written by the man who played a huge role in getting Roosevelt elected to the Presidency three times and who was also in his Cabinet for the whole of the New Deal period. It is worth noting that he is quite critical of Roosevelt, and it shows that Roosevelt was quite prepared to tolerate critics in his administration. The memoir was written after Roosevelt's death in 1945, when there was a growing hostility to the idea of the 'New Deal.'
12. Accept any other valid responses.
13. Indicative content
14. Support:
15. Source A quite strongly supports the assertion. It is the 'flood of legislation' which Roosevelt's administration put through Congress, in the famous '100 Days'. It also mentions that is government action that is causing all the uncertainty which makes business reluctant to invest.
16. While Source C is more nuanced, there is certainly evidence there to suggest that the government did play a part in causing the downturn, suggesting that 'government did not understand how business works' and had not created the conditions needed to incentivise investment.
17. Source D is strongly in favour of the assertion. Farley says that 'government was at war with its economic machinery', and that Roosevelt would not 'make a genuine attempt to make peace with business.' He is very clear where responsibility lies.
18. Challenge:
19. Source B is very clear that it does not support the assertion. Ickes, a leading member of the Cabinet throughout the New Deal years, argues that the recession is caused by a small group of 60 families determined to destroy the New Deal in order to safeguard their own interests. Their opposition if for political reasons. He also suggests, correctly, that the actions of the Courts in striking down many of the New Deal acts, did not help either.
20. Source C, more balanced than other sources, does suggest that the recession is not entirely the fault of government as 'business does not understand the great expectations placed on government to restore prosperity, and ‘could well have been more supportive in the current downturn.' There were failings on both sides.
21. Evaluation:
22. Source A is written by the Chief Executive of a major corporation, writing to shareholders, probably explaining why their dividends were not as high as they might have wished. Naturally he would be inclined to place the blame for this on the government, rather than any failings on the part of himself or the management of the Corporation. He is making rather an extreme case obviously and was not considering the fact that Roosevelt had recently won re-election and there was the expectation that the government would continue to legislate and act to deal with the ongoing high levels of unemployment.
23. Source B, a speech by Ickes, one of the more radical (and big spending) New Dealers naturally has a different view. He would be reluctant to see the government as the cause of the downturn and was looking for someone else to blame. The view he put forward was held by some members of the administration at the time, but not, as Source D shows, all of them.
24. Source C is an article in a leading New York financial newspaper at the time and reflected the views of many on Wall Street. There is a degree of balance in it, certainly in the first paragraph, but the comments on the motives of the New Dealers contrast with those seen in Source D. Contextual knowledge would suggest that there is some truth in what the article says, but overall, it is harsh.
25. Source D, by James Farley contrasts interestingly with Source B, another Cabinet member throughout the whole New Deal era. It shows Roosevelt's ability to work with men of very diverse views and utilise their views and skills to both get into power and stay there. What he writes is accurate, both in the first paragraph about investment and the 'economic machinery' and also his views on the young New Dealers. It is worth noting that Farley was a vital factor in Roosevelt's winning the elections of 1932,1936 and 1940. He was a very astute political manager.
26. Accept any other valid responses.