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.