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Chapter 32
The GreatDepression
andtheNew Deal,
1933–1939
Presented by:
Mr. Anderson, M.Ed., J.D.
I.FDR:PoliticianinaWheelchair
• Roosevelt's personality
– Shapedbystrugglewithinfantileparalysis:
• Putadditionalsteelinhissoul
• Sufferinghumbledhim
• Schooledhimselfinpatience,tolerance,compassion,
andstrengthofwill
– Apersonalandpoliticalassetwashiswife,
Eleanor:
– Distant cousin of Franklin
– Overcame misery of unhappy childhood
– Emerged as champion of dispossessed
– Ultimately “conscience ofthe New Deal”
I.FDR:PoliticianinaWheelchair
(cont.)
– FDR's political career as much hers as it was his
– Mrs. Roosevelt also marched to her own drummer
» Joined Women's Trade Union League and League of Women
Voters
– Moving into White House, she brought unprecedented number of
women activists
– Network helped make her most active First Ladyin history
– She powerfully influenced policies of national government
– She battled for impoverished and oppressed
– Personnel relationship with FDRrocky, due to his infidelities
– Condemned by conservatives and loved by liberals, she was one of
most controversial—and consequential—pub lic figures of1900s
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p743
I.FDR:PoliticianinaWheelchair
(cont.)
• FranklinRoosevelt's political appeal:
– Premier American oratorofhisgeneration
– AspopulardepressiongovernorofNewYork:
• Sponsoredheavystatespendingtorelievehuman
suffering
• Believedmoney,ratherthanhumanity,expendable
• Revealeddeepconcernforplightof“forgottenman”
• Assailedbyrichas“traitortohisclass”
I.FDR:PoliticianinaWheelchair
(cont.)
• Democratic National Convention (July1932)
inChicago speedilynominated Roosevelt
– Democraticplatform:
• Promisedbalancedbudget
• Sweepingsocialreforms
• FDRflewtoChicagoandacceptednominationin
person
• Hiswords,“Ipledgeyou,Ipledgemyselftoanew
dealfortheAmericanpeople”
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II.PresidentialHopefuls of1932
– Roosevelt:
• ConsistentlypreachedNewDealfor“forgottenman”
• Hewasannoyinglyvagueandsomewhatcontradictory
• Manyofhisspeechesghostwrittenby“BrainsTrust”
(popularlyBrainTrust)
– Small group of reform-minded intellectuals
– Kitchen cabinet, who authored much New Deal legislation
– FDR rashly promised balanced budget
– And berated heavyHooverian deficits
II.PresidentialHopefuls of1932
(cont.)
– Hoover:
• RemainedinWhiteHouse:
– Conscientiously battling depression
– Out on campaign, supporters halfheartedly assured halflistening voters
– Insisted Roosevelt's impending victory would plunge nation
deeper into depression
• WithcampaigngoingbadlyforRepublicans,
– Hoover took tostump
– Reaffirmed his faith in American free enterprise and
individual initiative
III.Hoover's Humiliation in1932
• Election of1932:
– Hooverhadbeensweptintoofficeonrisingtideof
prosperity
– Hewassweptoutofofficebyrecedingdepression
– Votes:
• 22,809,638forRoosevelt;15,758,901forHoover
• Electoralcount472to59
• Hoovercarriedonlysixrock-ribbedRepublicanstates
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p744
III.Hoover'sHumiliation in1932
(cont.)
• Featuresofelection:
– DistinctshiftofblackstoRooseveltcamp
• Victimsofdepression
• ShiftedtoDemocraticParty,especiallyinurban
centersofNorth
– HardtimesruinedRepublicans:
• Voteasmuchanti-Hooverasitwaspro-Roosevelt
• Democratsvoiceddemandforchange:
– A new deal rather than the New Deal
III.Hoover'sHumiliation in1932
(cont.)
• Lameduckperiod:
– Hoovercontinuedtobepresidentfor4long
months,untilMarch4,1933
• Helplesstoembarkuponanylong-rangepolicies
withoutcooperationofRoosevelt
• President-electuncooperative
• HooverarrangedtwomeetingswithRoosevelttoget
FDRtoagreetoanti-inflationarypolicythatwould
havepreventedmostNewDealexperiments
– Inpolitics,thewinner,notloser,callstune
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III.Hoover'sHumiliation in1932
(cont.)
• Washington deadlocked:
– Economyclankedtovirtualhalt
– Oneworker infour,unemployed
– BankslockedtheirdoorsthroughoutU.S.
– SomeHooveritesaccusedRooseveltof
deliberately permittingdepressiontoworsenso
hecouldemerge morespectacularlyassavior
IV.FDRandtheThree R's:Relief,
Recovery, Reform
• Inauguration Day,March4, 1933:
– Rooseveltdenounced“moneychangers” who
broughtoncalamity
– Declaredgovernment mustwagewar onGreat
Depression
– Moveddecisively:
• Boldlydeclarednationwidebankingholiday,March6-10
• SummonedCongressintospecialsessiontocopewith
nationalemergency:
IV.FDRandtheThreeR's:Relief,
Recovery,Reform(cont.)
• Hundred Days(March9-June 16,1933):
– Congresscrankedoutunprecedentedremedial
legislation(seeTable 32.1)
– New measurestodealwithdesperateeconomy
– Aimed atthreeR's:relief, recovery, andreform
– Short-rangegoals—reliefandimmediate
recoveryintwoyears
– Long-rangegoals—permanentrecoveryand
reformofcurrentabuses
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Table 32-1 p746
IV.FDRandtheThreeR's:Relief,
Recovery,andReform(cont.)
• Roosevelt's Hundred DaysCongress:
– RubberstampedbillsdraftedbyWhiteHouse
– Roosevelt's“mustlegislation” gavehim
extraordinaryblank-checkpowers
– Someofthenew lawsdelegated legislative
authoritytochiefexecutive
– PassedmanyessentialNewDeal“threeR's”
thoughlong-rangemeasuresaddedlater
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IV.FDRandtheThreeR's:Relief,
Recovery,andReform(cont.)
• NewDealers embraced progressiveideas:
•
•
•
•
Unemploymentinsurance,old-ageinsurance
Minimum-wageregulations
Conservationanddevelopmentofnaturalresources
Restrictionsonchildlabor
– Inventedsomenewschemes:
• TennesseeValleyAuthority
– NolongerwouldAmericalookasbackwardin
realm ofsocialwelfareasitoncehad
V.RooseveltManagestheMoney
• Bankingchaos—immediate action:
– Emergency BankingReliefActof1933:
• InvestedPresidentwithpowertoregulatebanking
transactionsandforeignexchange
• Toreopensolventbanks
• Roosevelt turned toradio:
– Delivered firstof30famous“firesidechats”
– Nowsafetokeepmoneyinreopenedbanks
– Confidencereturned;banksunlockeddoors
p747
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V.RooseveltManagestheMoney
(cont.)
• Glass-Steagall BankingReformAct:
– CreatedFederal DepositInsuranceCorporation:
• Insuredindividualdepositsupto$5,000(laterraised)
• Endedbankfailures,datingbackto“wildcat” daysof
AndrewJackson(seeFigure32.1)
• Declining goldreserves:
• FDRorderedallprivateholdingsofgoldbesurrendered
toTreasuryinexchangeforpapercurrency
• Thentooknationoffgoldstandard
• Congresscanceledgold-paymentclauseinallcontracts
Figur e 32-1 p747
V.RooseveltManagestheMoney
(cont.)
• Authorizedrepaymentinpapercurrency
– A“managedcurrency” onitsway:
• FDR's“managedcurrency” wasinflation:
– Which he believed would relieve debtors' burdens
– And stimulate new production
• Principalinstrumentforachievinginflationwasgold
buying
– InstructedTreasurytopurchasegoldat
increasingprices—priceofgoldincreasedfrom
$21anounce(1933)to$35anounce(1934)
• Apricethatheldforfourdecades
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V.RooseveltManagestheMoney
(cont.)
• Policydidincreaseamountofdollarsincirculation
• Inflationaryresultprovokedwrathof“sound-money”
criticson“baloneydollar”
• GoldschemecametoendinFebruary1934,when
Rooseveltreturnedtolimitedgoldstandardfor
internationaltradepurposes
– United States pledged to payforeign bills, if requested, in
gold atrate of one ounce ofgold for every$35 due
• Domesticcirculationofgoldcontinuedtobe
prohibited
– Gold coins became collector's items
VI.CreatingJobs fortheJobless
• Overwhelming unemployment:
– Oneoutoffourworkersjobless
• Highestlevelofunemploymentinnation'shistory
• Roosevelthadnohesitancyaboutusingfederal
moneytoassistunemployed
• Atsametime“primethepump” ofindustrial
recovery
VI.CreatingJobs fortheJobless
(cont.)
• Civilian Conservation Corps (CCC):
– MostpopularofNewDeal“alphabetical
agencies”
• Providedemploymentinfresh-airgovernmentcamps
foraboutthreemillionyoungmen
• Usefulwork—includingreforestation
– Firefighting (47 lives lost), flood control, swamp drainage
• Recruitsrequiredtohelpparentsbysendinghome
mostoftheirpay
• Bothhumanandnaturalresourcesconserved
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VI.CreatingJobs fortheJobless
(cont.)
– CriticsofCCC:
• Minorcomplaintsof“militarizingthenation'syouth”
– Adultunemployment:
• FederalEmergencyReliefAdministration(FERA):
– Under Harry L.Hopkins
– Hopkins's agency granted $3 billion to states for direct dole
payments or preferably for wages on work projects
VI.CreatingJobs fortheJobless
(cont.)
• Relief forhard-pressed specialgroups:
– AgriculturalAdjustmentAct(AAA):
• Mademillionsavailabletohelpfarmersmeet
mortgages
– HomeOwners' LoanCorporation(HOLC):
•
•
•
•
Refinancedmortgagesonnonfarmhomes
Assistedamillionbadlypinchedhouseholds
Bailedoutmortgage-holdingbanks
Boltedloyaltiesofrelievedmiddle-classhomeowners
securelytoDemocraticparty
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VI.CreatingJobs fortheJobless
(cont.)
• CivilWorksAdministration (CWA)(1933):
– Set upbyRoosevelthimself
– UnderdirectionofHopkinsviaFERA
• Providedtemporaryjobsduringcruelwinter
emergency
• Tensofthousandsofjoblessemployedatleafraking
andothermake-worktasks
• Schemewidelycriticizedaskindoflaborthatput
premiumonshovel-leaningslowmotion
Table 32-2 p749
VII.ADayforEveryDemagogue
• Persistence ofsuffering indicated emergency
relief measuresneeded
– Notonlytobecontinued,butsupplemented
– Dangersignalwasappearance ofdemagogues—
notablymagnetic“microphonemessiah”:
• FatherCharlesCoughlinbeganbroadcastingin1930
– His slogan was “Social Justice”
– His anti-New Deal messages went to 40 million radio fans
– So anti-Semitic, fascistic, and demagogic that he was
silenced in 1942 by ecclesiastical superiors
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VII.ADayforEveryDemagogue
(cont.)
– New broodofagitatorscapitalizedonpopular
discontent:
• Dr.FrancisE.Townsendpromisedeveryoneoversixty
$200amonth
• SenatorHueyP.Long(“Kingfish”)publicizedhis
“ShareOurWealth” program
– Promised to make“Every Man a King”
– Every family would receive $5,000, supposedly at expense
of prosperous
– Fear of Longbecoming fascist dictator ended when he was
shot byan assassin in Louisiana in 1935
p750
VII.ADayforEveryDemagogue
(cont.)
– Demagogues(CoughlinandLong)raisedtroubling
questionsaboutlinkbetweenfascismand
economiccrisis:
– Authoritarian rule strengthened in Japan
– Adolf Hitler acquired absolute authority in Germany
– Some worried Roosevelt would turn into dictator
• Toquietunrest,CongressauthorizedWorksProgress
Administration(WPA)in1935
– Objective was employment on useful projects
– Agency ultimately spent about $11 billion on thousands of
public buildings, bridges, and hard-surfaced roads
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VII.ADayforEveryDemagogue
(cont.)
• NoteveryWPAprojectstrengthenedinfrastructure
– One controlled crickets in Wyoming
– Built a monkey pen in Oklahoma City
• MostlovedWPAprograms:
– Federal Art Project—hired artists to create posters and
murals
p751
VII.ADayforEveryDemagogue
(cont.)
• Critics claimed WPAmeant“WeProvide Alms”
• Overeight years,nearly ninemillion people
givenjobs, nothandouts:
– Nourishedprecioustalent
– Preservedself-respect
– Fosteredcreationofmorethanamillionpiecesof
art, manyofthempubliclydisplayed
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VIII.NewVisibility forWomen
– After19 th Amendment,women begantocarve
morespaceinpoliticalandintellectuallife
– FirstLadyEleanormostvisiblewomanin
RooseveltWhiteHouse
– Secretary ofLaborFrancisPerkins(1880-1965)
became firstwomancabinetmember
– MaryMcLeodBethune(1875-1955)
• DirectorofOfficeofMinorityAffairsinNationalYouth
Administration—servedashighest-rankingAfrican
AmericaninRooseveltadministration
p752
VIII.NewVisibility forWomen
(cont.)
• Women'scontribution insocial sciences:
– Anthropology:
• RuthBenedict(1887-1948)carriedonworkofher
mentor,FranzBoas(1858-1942)
– By developing “culture and personality movement” in
1930s and 1940s
– Benedict's landmark work: Pattern of Culture (1934):
» Established study ofcultures as collective personalities
» Each culture, like each individual, had its own “more or
less consistent pattern of thought and action”
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VIII.NewVisibility forWomen
(cont.)
• MargaretMead(1901-1978),studentofBenedict:
– Her studies of adolescence among Pacific island peoples
advanced bold new ideas about sexuality, gender roles, and
intergenerational relationships
– 34 books published and curatorship atAmerican Museum of
Natural History, New York
– Popularized cultural anthropology and achieved celebrity
status rare among social scientists
• PearlS.Buck(1892-1973):
– Introduced American readers to Chinese peasant society
– Her best selling novel, TheGood Earth (1931) earned Nobel
Prize for Literature in 1938
– Used her fameto advance humanitarian causes
IX.HelpingIndustry andLabor
• National RecoveryAdministration (NRA)
– Mostcomplexandfar-reachingofNewDeal
projects
• Combineimmediatereliefwithlong-rangerecoveryand
reform
• Triple-barreled:designedtoassistindustry,labor,and
unemployed
– Individual industries would work out codes of“fair
competition” under which hours of labor would be reduced
– To spread employment to more people
– A ceiling placed on maximum hours oflabor
– A floor placed under wages to establish minimum levels
p753
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IX.HelpingIndustry andLabor
(cont.)
– Laborgrantedadditionalbenefits:
• Workersformallyguaranteedrighttoorganize
• Andbargaincollectivelythroughrepresentativesof
theirownchoosing—notagentsofcompany'schoosing
• “Yellowdog,” orantiunion,contractexpressly
forbidden
• Certainrestrictionsplacedonuseofchildlabor
IX.HelpingIndustry andLabor
(cont.)
• NRA's “faircompetition” codes:
– Calledforself-denialbymanagementandlabor
– Patriotismarousedbymassmeetingsand
parades
– Blueeagle designedassymbolofNRA
– Forbrieftime, anupswinginbusinessactivity
IX.HelpingIndustry andLabor
(cont.)
– ProblemsofNRA:
• Toomuchself-sacrificeexpectedoflabor,industry,and
public
• “Ageofchiselry” asunscrupulousbusinessmen
(“chiselers”)displayedblueeaglebutsecretlyviolated
codes
• SupremeCourtkilledNRAinfamed“sickchicken” case
– InSchechter (1935) Court ruled:
– Congress could not “delegate legislative powers” to executive
– Declared congressional control of interstate commercecould
not apply to alocal business
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IX.HelpingIndustry andLabor
(cont.)
– PublicWorksAdministration(PWA):
• LikeNRA,intendedforindustrialrecoveryand
unemploymentrelief
• HeadedbySecretaryofInterior,HaroldL.Ickes
• $4billionspenton34,000projects:
– Public buildings, highways, and parkways
– Grand Coulee Damon Columbia River (Washington):
» Irrigated millions of acres of new farmland
» Created more electrical power than entire Tennessee
Valley Authority
» Transformed Pacific Northwest with abundant water
and power
IX.HelpingIndustry andLabor
(cont.)
– Liquorindustry:
• Imminentrepealofprohibition:
– Afforded opportunity to raise federal revenue
– And provide employment
• HundredDaysCongress
– Legalized light wine and beer with alcoholic content ofno
more than 3.2% byweight
– Levied taxof $5 on every barrel so manufactured
• ProhibitionrepealedbyTwenty-firstAmendmentin
1933(seeAppendix)
– Saloon doors swung open
p754
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X.PayingFarmersNottoFarm
– Sufferingfarmers:
• Sincewar-boomdaysof1918,sufferedlowpricesand
overproduction
• Depression—innumerablemortgagesforeclosed
– Agricultural AdjustmentAdministration(AAA):
• Through“artificialscarcity” establish“parityprices” for
basiccommodities
• “Parity” aspricesetforaproductthatgaveitsamevalue,
inpurchasingpower,thatitenjoyedfrom1909-1914
X.PayingFarmersNottoFarm
(cont.)
• AAAwouldeliminateprice-depressingsurplusesby
payinggrowerstoreducecropacreage
• Millionsraisedbytaxingprocessorsoffarmproducts,
whointurnwouldshiftburdentoconsumers
• “Subsidizedscarcity” wouldraisefarmincome
• Payingfarmersnottofarmincreasedunemployment
• SupremeCourtkilledActin1936
• CongresshastenedtopassSoilConservationand
DomesticAllotmentActof1936
– Farmers paid to plant soil-conserving crops or let land lie
fallow
X.PayingFarmersNottoFarm
(cont.)
• EmphasisonconservationapprovedbySupremeCourt
– SecondAgriculturalAdjustmentActof1938:
• Continuedconservationpayments
• Ifgrowersobservedacreagerestrictionsonspecified
commodities,theywouldbeeligibleforparitypayments
• Goaltogivefarmersnotonlyfairerpricebutmore
substantialshareofnationalincomepartiallyachieved
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XI.DustBowlsandBlackBlizzards
• Nature helped provide unplanned scarcity:
– DustBowl:
• Droughtandwindtriggeredduststorms,butthey
werenotonlyculprits:
• Farmersboughtcountlessacresofmarginalland
undercultivation
• Dry-farmingtechniquesandmechanizationhad
revolutionizedGreatPlainsagriculture
• Methodsleftpowderytopsoiltobesweptawayat
nature'swhim(seeMap32.1)
XI.DustBowlsandBlackBlizzards
(cont.)
• Tensofthousandsofrefugeesfledruinedfarms
– Many settled in San Joaquin Valley of California
– Yettransition was cruel
– Dismal story of these human tumbleweeds realistically
portrayed by John Steinbeck, The Grapes of Wrath (1939)
– Effortstorelievetheirburdens:
• Frazier-LemkeFarmBankruptcyAct(1934):
– Made possible suspension ofmortgage foreclosures for five
years—voided next year by Supreme Court
– Revised law, limiting graceperiod to three years, unanimously upheld
p755
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XI.DustBowlsandBlackBlizzards
(cont.)
• ResettlementAdministration(1935):
– Charged with removing near-farmless farmers to better land
– 200 million young trees successfully planted on bare prairies
by young men of Civilian Conservation Corps
• NativeAmericansfeltfar-reachinghandofNewDeal
reform:
– Commissioner ofIndian Affairs John Collier sought to reverse
forced-assimilation polices in place since Dawes Act of 1887
(see Chap. 26)
– Collier promoted Indian Reorganization Act of 1934
» “Indian New Deal” encouraged tribes to establish local
self-government and preserve native crafts and traditions
XI.DustBowlsandBlackBlizzards
(cont.)
– New lawhelpedstoplossofIndianlandsand
– Revivedtribes' interestinidentityandculture
– NotallNativeAmericans applaudedit:
• Somedenounceditas“back-to-the-blanket” measure
thatwouldmakemuseumpiecesoutofIndians
• 77tribesrefusedtoorganizeunderit,thoughnearly
200othersdidestablishtribalgovernments
Map 32-1 p756
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XII.BattlingBankersandBigBusiness
– New Dealersdeterminedtoreform“money
changers”
• Whohadplayedfastandloosewithgullibleinvestors
beforeWallStreetcrashof1929
– “TruthinSecuritiesAct” (FederalSecuritiesAct):
• Requiredpromoterstotransmittoinvestorssworn
informationregardingsoundnessofstocksandbonds
– SecuritiesandExchangeCommission(SEC)1934:
• Watchdogagencytoprotectpublicagainstfraud,
deception,andinsidemanipulation
– Stockmarkets would operate more as trading marts and less as
gambling casinos
XII.BattlingBankersandBig
Business (cont.)
• NewDealers directed fire atpublic utility
holding companies:
– Onesuchsupercorporationcollapsedin1932
whenSamuel Insull'sfinancialempirecrashed
– PublicUtilityHoldingCompanyActof1935:
• “Deathsentence” tosuchbloatedgrowth,except
whereitmightbedeemedeconomicallyneedful
XIII.TheTVAHarnessesthe
Tennessee
– Electric-power industryattractedireofNewDeal
reformersforchargingexcessiverates:
• Anindustrythatreacheddirectlyintopocketbooksof
millionsofcustomersforvitallyneededservices
• TennesseeRiverprovidedNewDealerswith
opportunity:
– By developing hydroelectric potential of entire area,
Washington could combine immediate advantage:
» Employment of thousands ofpeople to work
» And long-term project for reforming power monopoly
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XIII.TheTVAHarnessesthe
Tennessee (cont.)
• Tennessee Valley Authority (TVA) (1933)
• VisionofSenatorGeorgeW.NorrisofNebraska
• Fromstandpointof“plannedeconomy,” byfarmost
revolutionaryofallNewDealschemes
• Determinedtodiscoverpreciselyhowmuchitcostto
productanddistributeelectricity
• Withthat“yardstick,” fairnessofrateschargedby
privatecompaniescouldbejudged
• NewDealerspointedwithpridetoamazing
achievementsofTVA
Map 32-2 p757
XIII.TheTVAHarnessesthe
Tennessee (cont.)
– Benefitstoarea:
•
•
•
•
•
•
•
•
Fullemployment
Cheapelectricpower(seeFigure32.2)
Low-costhousing
Abundantcheapnitrates
Restorationoferodedsoil
Reforestation
Improvednavigation
Floodcontrol
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XIII.TheTVAHarnessesthe
Tennessee (cont.)
• NewDealersagitatedforparallelenterprisesin
valleysofColumbia,Colorado,andMissouriRivers
• Conservativereactionagainst“socialistic” NewDeal
confinedTVA'sbrandoffederallyguidedresource
managementandcomprehensiveregional
developmenttoTennesseeValley(seeMap32.2)
Figur e 32-2 p758
XIV.Housing andSocial Security
• NewDealhousing policies:
– Federal HousingAdministration(1934):
• Buildingindustrystimulatedbysmallloanstohouseholders:
– For improving their dwellings
– For completing new ones
• SopopularitoutlastedageofRoosevelt
• Congressbolsteredprogramin1937byauthorizing
UnitedStatesHousingAuthority(USHA):
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XIV.Housing andSocial Security
(cont.)
– Agency designed to lend money to states or communities
for low-cost construction
– 650,000 units started, tragically short of needs
– Collided with opposition from real estate promoters,
builders, landlords, and anti-New Dealers
– Still slums areas ceased growing and shrank
• Social Security Act1935:
– Unemploymentinsuranceandold-agepensions
– Oneofmostcomplicatedandfar-reachinglaws
ever topassCongress
XIV.Housing andSocial Security
(cont.)
• Providedforfederal-stateunemploymentinsuranceto
cushionfuturedepressions
• Providedsecurityforoldage:
– Specified categories of retired workers would receive regular
payments from Washington
– Payments ranged from $10 to $85 a month (raised periodically)
– Financed by payroll taxon employers and employees
• Provisionsmadeforblind,physicallyhandicapped,
delinquentchildrenandotherdependents
XIV.Housing andSocial Security
(cont.)
• Republicanoppositionbitter:
– “Social Security” must be built upon acult ofwork, not a“cult
of leisure,” insisted Hoover
– GOP national chairman falsely charged that every worker
would have to wear ametal dog tagfor life
• SocialSecurityinspiredbyindustrialnationsofEurope
• Inurbanizedeconomy,governmentnowrecognizingits
responsibilityforwelfareofcitizens
• By1939,over45millioneligibleforSocialSecurity
benefits
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XIV.Housing andSocial Security
(cont.)
• Infuture,othercategoriesadded:
– Farm and domestic workers
» Millions of poor men and women initially excluded
– Incontrast to Europe, where welfare programs were
universal:
» American workers had tobe employed
» And in certain jobs to getcoverage
XV.ANewDealforLabor
– WagnerAct:
• NationalLaborRelationsAct(1935)
• Namedaftersponsor,SenatorRobertF.Wagner
• CreatedpowerfulnewNationalLaborRelationsBoard:
– Administrative purposes
– Reasserted right of labor to engage in self-organization
– To bargain collectively through representatives of its own choice
– Considered Magna Carta of labor, Wagner Act proved to be
major milestone for American workers
XV.ANewDealforLabor
(cont.)
– UndersympatheticNationalLaborRelationsBoard:
• Unskilledworkersbegantoorganizeintoeffectiveunions
• LeaderwasJohnL.Lewis,bossofUnitedMineWorkers
– Formed Committee for Industrial Organization (CIO) within
skilled-craft American Federation ofLabor (AFL)
– In1936, AFL suspended CIO
– CIO then moved into auto industry:
» Resorted to sit-down strike
» Refused to leave factory building of General Motors at Flint,
Michigan
» Thus prevented importation of strikebreakers
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p759
XV.ANewDealforLabor
(cont.)
– Conservative respecters of private property scandalized
– Victory when General Motors recognized CIOas sole
bargaining agencyfor its employees
• Unskilledworkerspressedadvantage:
» US Steel Company averted strike when it granted rights
of unionization to its CIO-organized employees
» “Little steel” companies fought backsavagely
» 1937: Memorial Daymassacre at Republic Steel
Company plant in South Chicago
» After police opened fire, area strewn with several score
dead and wounded
XV.ANewDealforLabor
(cont.)
• FairLaborStandards Act1938:
– AlsoknownasWagesandHoursBill
• Setminimum-wagesandmaximum-hoursfor
industriesinvolvedininterstatecommerce
– Goals: 40 cents an hour (later raised) and 40-hour week
• Laborbychildrenundersixteen(undereighteenif
occupationdangerous)forbidden
• Reformsbitterlyopposedbyindustrialists,especially
textiles
• Excludedagricultural,service,anddomesticworkers
– Meant manyblacks, Mexican Americans, and women not
benefit from act
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p760
XV.ANewDealforLabor
(cont.)
• Laborunionizationthrived(seeFigure32.3)
– President received valuable support atballot-box from labor
leaders and appreciative workers
– CommitteeforIndustrialOrganizationformally
reconstitutedasCongress ofIndustrialOrganizations
(newCIO)underJohnL.Lewis
• By1940claimedmembershipoffourmillion,including
200,000blacks
• JurisdictionalfeudingcontinuedwithAFL:laborseemed
morebentoncostlycivilwarthanonwarwith
management
Figur e 32-3 p760
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XVI.LandonChallenges“theChamp”
– Upcomingelectionof1936:
• DemocratsrenominatedRooseveltonplatformsquarely
endorsingNewDeal
• Republicanshard-pressedtofindacandidate
– Settled on homespun governor of Kansas, Alfred M.Landon
– Landon amoderate who accepted some New Deal reforms but
not popular Social Security Act
– Republicans condemned New Deal of Franklin “Deficit”
Roosevelt for its radicalism, experimentation, confusion, and
“frightful waste”
– Landon backedby Hoover (called for “holy crusade for
liberty”) and American Liberty League of wealthy
conservatives
XVI.LandonChallenges “the
Champ” (cont.)
• Rooseveltdenounced“economicroyalists”
– Electionreturns:
• LandslideoverwhelmedLandon,whoonlywontwo
states—MaineandVermont
• Popularvote:27,752,869to16,674,665
• Electoralcount523to8– mostlopsidedin116years
• Democratsnowclaimedmorethantwo-thirdsof
seatsinHouseandsameproportioninSenate
XVI.LandonChallenges “the
Champ(cont.)
– Battleof1936:
• MostbittersinceBryan'sdefeatin1896
• PartiallyboreoutRepublicanchargesofclasswarfare
– Needy economic groups lined up against so-called greedy
economic groups
• CIOcontributedgenerouslytoFDR'scampaign
• Manyleft-wingersturnedtoRoosevelt,asthird-party
protestvotedeclinedsharply
• BlacksswitchedtoDemocraticparty
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XVILandonChallenges “the
Champ(cont.)
• Rooseveltwonbecauseheappealedto“forgottenman,”
whomheneverforgot
– Some supporters only pocketbook-deep: “reliefers”
– Roosevelt forged powerful and enduring coalition of
» Southerners,
» Blacks, urbanites, and poor
» Marshaled support of “New Immigrants”—mostly Catholics
and Jews—who had come of agepolitically
» In1920s one out of every25 federal judgeships went toa
Catholic
» Roosevelt appointed Catholics to one out of every four
XVII.NineOldMenontheBench
– RoosevelttookpresidentialoathonJanuary20,
1937,insteadoftraditionalMarch4:
• TwentiethAmendmentratifiedin1933(seeAppendix)
– Swept awaypostelection lame duck session of Congress
– Shortened bysix weeks awkward period before inauguration
• Rooseveltinterpretedreelectionasmandateto
continueNewDeal:
– To him, Supreme Court judges were stumbling blocks
– Innine major cases involving New Deal, they had thwarted
New Deal reforms seven times
XVII.NineOldMenontheBench
(cont.)
– Courtultra-conservative;sixofninejudgesover70
• RoosevelthadnotappointedanyonetoCourtinfirst
term
• Somejusticesheldonprimarilytocurb“socialistic”
NewDeal
• FDRbelievedvoters(presidentialelectionsof1932and
1936andcongressionalelectionsof1934)hadclearly
demonstratedsupportforNewDeal
• ToFDR,Courtobstructingdemocracy
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XVII.NineOldMenontheBench
(cont.)
– Roosevelthitonschemetofixproblem:
• Provedtobeoneofhismostcostlypoliticalmisjudgments
• AskedCongressforlegislationtopermithimtoaddanew
justicetoSupremeCourtforeveryoneoverseventywho
wouldnotretire
• Maximummembershipwouldbefifteen
• HeallegedCourtfarbehindinitswork—whichprovedto
befalseandbroughtaccusationsofdishonesty
• HeadstrongFDRnotrealizethatCourt,inpopular
thinking,hadbecomesacredcow
p762
XVIII.TheCourtChanges Course
– CongressandnationconvulsedoverCourtpacking plan:
• FDRvilifiedforattemptingtobreakdelicatechecks
andbalancesamongthreebranches
• Accusedofgroominghimselfasdictatorbytryingto
browbeatjudiciary
• ToRepublicansandsomeDemocrats,basicliberties
seemedinjeopardy
• Courtsawaxhangingoveritshead:
– Justice Owen J.Roberts, aconservative, began to vote with
liberal colleagues
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XVIII.TheCourtChanges Course
(cont.)
• In1937,Courtupheldprincipleofstateminimum
wageforwomen,reversingits1936decision
• Insucceedingdecisions,Courtbecamemore
sympathetictoNewDeal:
– Upheld National Labor Relations Act and Social Security Act
• Roosevelt's“Courtpacking” furtherundermined
whenCongressvotedfullpayforjusticesover70who
retired:
– One of oldest conservatives resigned
– Replaced by New Dealer, Justice Hugo Black
XVIII.TheCourtChanges Course
(cont.)
– Congressfinallypassedcourtreformbill:
• Watered-downversionappliedonlytolowercourts
• Rooseveltsufferedfirstmajorlegislativedefeatat
handsofhisownpartyinCongress
• EventuallyCourtbecamemarkedlymorefriendlyto
NewDealreforms
• Successionofdeathsandresignationsenabledhimto
makenineappointmentstotribunal—morethanany
ofhispredecessorssinceGeorgeWashington
• Clock“unpacked” Court
XVIII.TheCourtChanges Course
(cont.)
– Yet inasense,FDRlostbothCourtbattleandwar:
• SoarousedconservativesofbothpartiesinCongress
thatfewNewDealreformspassedafter1937,yearof
fightto“pack” bench
• Withthiscatastrophicmiscalculation,hesquandered
muchofgoodwillthatcarriedhimtovictoryin1936
election
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XIX.TwilightoftheNewDeal
– Roosevelt'sfirsttermdidnotbanishdepression:
• Unemploymentpersistedin1936atabout15%,down
from25%of1933,butstillhigh(seeFigure32.4)
• Recoveryhadbeenmodest
• Thenin1937economytookanothersharpdownturn:
– Surprising severe depression-withi n-the depression that
critics dubbed “Roosevelt recession”
– Government policies caused nosedive:
» Just as new Social Security taxes began to takeeffect
» FDR cutgovernment spending totry to balance budget
Figur e 32-4 p763
XIX.TwilightoftheNewDeal
(cont.)
– Rooseveltthendeliberatelyembraced ideasof
BritisheconomistJohnMaynardKeynes:
• FDRannouncedboldprogramtostimulateeconomyby
planneddeficitspending
• Keynesianism—useofgovernmentspendingandfiscal
policyto“primethepump” ofeconomyandencourage
consumerspending
• Policybecameneweconomicorthodoxyandremained
sofordecades
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XIX.TwilightoftheNewDeal
(cont.)
• Roosevelt continued topush remaining
reform measuresofNewDeal:
• UrgedCongresstoauthorizesweepingreorganization
ofnationaladministrationininterestsofefficiency
• Notdone,andthusanotherdefeat
• Twoyearslater,Congresspartiallyrelentedand
passedReorganizationAct:
– Gavepresident some powers for administrative reforms,
including keynew Executive Office in White House
XIX.TwilightoftheNewDeal
(cont.)
– HatchAct1939:
• Barredfederalofficials,excepthighestpolicy-making
officers,fromactivepoliticalcampaigningandsoliciting
• Forbadeuseofgovernmentfundsforpoliticalpurposes
• Forbadecollectionofcampaigncontributionsfrom
peoplereceivingreliefpayments
– HatchActbroadenedin1940:
• Placedlimitsoncampaigncontributionsand
expenditures
– After some found ways around it, legislation proved
disappointing
XIX.TwilightoftheNewDeal
(cont.)
– By1938,NewDeallostitsmomentum:
• Rooseveltcouldfindfewnewreforms
• Incongressionalelectionsof1938,Republicans
scoredvictoriesbutfailedtogaincontrolineither
house
• Foreignaffairsincreasinglydominatedpublicdebate
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p764
XX.NewDealorRawDeal?
– FoesofNewDealcondemned:
• Allegedwaste,incompetence,confusion,
contradictions,andcross-purposes
• Aswellasgraftinalphabeticalagencies—“alphabet
soup,” sneeredAlSmith
• Deploredemploymentof“crackpot” college
professors,leftist“pinkos,” andoutrightCommunists
• ClaimedNewDealerstryingtomakeU.S.A.overin
Bolshevik-Marxistimageunder“Rooseveltski”
XX.NewDealorRawDeal?
(cont.)
• RooseveltaccusedofbeingJewish(“Rosenfield”)and
tappingtoomanyJewishleftists(“TheJewDeal”)for
his“DrainTrust”
• Businesspeopleshockedbyleap-before-you-look,tryanything-oncespirit
• “Bureaucraticmeddling” and“regimentation” were
bittercomplaintsofanti-NewDealers
• Federalgovernment,withallitsemployees,became
incomparablylargestsinglebusinessincountry
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XX.NewDealorRawDeal?
(cont.)
• Promisesofbudgetbalancingflewoutwindow
– National debt in 1932 =$19,487,000,000
– Skyrocketed by 1939 to $40,440,000,000
• Americabecoming“handoutstate;” U.S. stoodfor
“unlimitedspending”
• Businessmenbitter:
– Accused New Deal of fomenting class strife
– Conservatives insisted laborers and farmers being
pampered
– Businessmen wanted government offtheir backs
– Private enterprise being stifled by “planned economy,”
“planned bankruptcy” and “creeping socialism”
XX.NewDealorRawDeal?
(cont.)
• States' rightsignored,whilegovernmentcompetedin
businesswithitsowncitizens,under“dictatorshipof
do-gooders”
– Roosevelt'sleadershipdenounced:
• “One-mansupergovernment”
• HeavyfireagainstattemptstobrowbeatSupreme
Courtandcreate“dummyCongress”
– Tried to “purge” Congress of Democrats who would not
march in lockstep with him
– Three senators whom he publicly opposed all reelected
XX.NewDealorRawDeal?
(cont.)
• Mostdamning indictment ofNewDeal:
– Failedtocuredepression
– Floatinginseaofredink,ithadonly
administeredaspirin,sedatives,andBand-Aids
• $20billionpouredoutinsixyearsofdeficitspending
andlending
– Gap not closed between production and consumption
– More farmsurplus under Roosevelt than under Hoover
– Millions still unemployed in 1939 after six years of drain,
strain, and pain
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XXI.FDR'sBalanceSheet
– New Dealersstaunchlydefendedrecord:
• Somewaste,butpointedoutthatrelief—noteconomy—
hadbeenprimaryobjective
• Somegraft,butarguedithadbeentrivialinviewof
immensesumsspentandobviousneedforhaste
• NewDealrelievedworstofcrisisin1933
• Promotedphilosophyof“balancingthehumanbudget”
• Washingtonregimetobeused,notfeared
• CollapseofAmerica'seconomicsystemaverted
• Fairerdistributionofnationalincomeachieved
• Citizensabletoregainandretainself-respect
XXI.FDR'sBalanceSheet
(cont.)
• Thoughhatedbybusinesstycoons,FDRshouldhave
beentheirpatronsaint
– Deflected popular resentments against business
– May have saved American system offree enterprise
– His quarrel not with capitalism but with capitalists
– Purged American capitalism of some of its worst abuses
– Headed offradical swing to left
– Claimed that New Deal did not bankrupt United States
– Massive national debt caused by WWII, not New Deal
» National debt = $40 billion in 1939; $258 billion in 1945
XXI.FDR'sBalanceSheet
(cont.)
• FDRprovidedboldreformwithoutbloodyrevolution
• Upbraidedbyleft-wingradicalsfornotgoingfar
enough,byright-wingradicalsforgoingtoofar
– Choosing middle road, Roosevelt has been called greatest
American conservative since Hamilton
» Hamiltonian in espousal of big government, but
Jeffersonian in concern for “forgotten man”
– Demonstrating value of presidential leadership, he exercised
power to relieve erosion ofnation's greatest resource—its
people
– Helped preserve democracy in America at atime when
democracies abroad disappearing to dictatorship
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XXI.FDR'sBalanceSheet
(cont.)
• Unwittinglygirdednationforitspartintitanicwarthat
loomedonhorizon—awarinwhichdemocracythe
worldoverwouldbeatstake
p766
p768
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