The United States, Since 1877
Rosen, The New Deal Notes
The chapter begins by contrasting the reactions of Herbert Hoover and Franklin Delano Roosevelt to needy Americans. As the depression
wore on, tens of thousands of World War I veterans turned to the U.S. government for guidance and financial support. Veterans calling
themselves Bonus Marchers or the Bonus Army descended on Washington, D.C., during June and July 1932 to lobby Congress for
payment of their army pensions. Fearing mass uprisings, Herbert Hoover ordered General Douglas MacArthur to remove the Bonus
Marchers from Washington. Despite Hoover's specific orders to not invade their camp, MacArthur and his heavily armed force set fire to
the veterans' dwellings and forced the Bonus Marchers to flee the city. President Roosevelt's response to the second Bonus Army march
on Washington in May 1933 was quite different. Although Roosevelt shared Hoover's opposition to the Bonus Bill, he appropriated funds
to care for the marchers and warmly invited them to the White House. The marchers were no better off in getting their main objective
accomplished with Roosevelt than they were with Hoover, but they were given a fair hearing and respect. Roosevelt won them over based
on his ability to make the marchers feel that he cared about their concerns, even if he could not directly give them what they sought. The
tens of millions of other Americans suffering from the Great Depression appreciated Roosevelt's optimism and expressions of concern.
Even more, they welcomed government help from Roosevelt's New Deal initiatives.
Fanklin D. Roosevelt: A Patrician in Government
Although born an aristocrat, Franklin D. Roosevelt established an extraordinary relationship with the common people. His personality,
outreach, actions, and the times all combined to make him the dominant figure of his age.
The Making of a Politician
Coming from a privileged background of wealth and elite schools but paralyzed in both legs from polio, Roosevelt exuded an intense
desire for public service. Prior to the onset of polio, he had been a state legislator in New York and a vice presidential candidate.
Roosevelt's paralysis caused him to shift his political tactics but never disrupted his focus. In 1928, Al Smith, New York's Democratic
governor, encouraged Roosevelt to campaign to succeed him as governor. Narrowly winning, Roosevelt became governor just before the
Great Depression gripped the country. Roosevelt quickly responded to the needs of the people—unlike President Hoover, whose dogma
of self-reliance prohibited much action. Roosevelt believed that the state should act as a servant to the people, so, in New York State, he
set up the largest relief program until then; the Temporary Emergency Relief Administration (TERA) was created in 1931 and
appropriated $20 million in aid to the poor. The people of New York responded positively to Roosevelt's policies, and he gained national
attention as an effective and empathetic leader. He was quickly propelled to the front ranks of the national Democratic Party.
The Election of 1932
Herbert Hoover's unpopularity gave Democrats a chance to win the presidency for the first time in over a decade. However, beyond
opposition to Republicans, little else united Democrats from differing regions, religions, and cultures. Despite their differences, the party's
diverse constituencies of eastern elites, Wilsonian reformers, conservative southerners, farmers, laborers, and ethnic workers agreed upon
Franklin Roosevelt as their nominee. Roosevelt won the Democratic Party nomination and ultimately the presidency. In his campaign,
Roosevelt emphasized energy and optimism but gave little in the way of specific plans about how to combat the depression. The voters
gave Roosevelt a landslide victory that launched a realignment of the nation's political loyalties. Those who cast ballots for Roosevelt,
called the New Deal coalition, came from different walks of life and included farmers, factory workers, women, African Americans, and
progressive intellectuals; this group would vote for Democrats in years to come because of their support for particular policies associated
with the party.
Launching the New Deal
On the day of his inauguration, Roosevelt gave Americans new hope for the future and a sense that they had a friend in Washington. Over
the next one hundred days, his administration became a blur of government initiatives aimed at achieving relief, recovery, and reform in
the face of economic crisis. The New Deal programs greatly expanded government's role in the nation's economy and society.
The New Dealers
The New Deal was enacted through the hard work of intellectuals, reformers, and rank-and-file voters who came together under
Roosevelt's leadership. Franklin and Eleanor Roosevelt led campaigning to enact the New Deal. At his frequent press conferences, the
president optimistically promoted his plans and policies. Eleanor Roosevelt traveled the country as the New Deal's unofficial ambassador.
She helped bring the administration into touch with ordinary Americans and gave her husband feedback on the views of people outside of
Washington. A small group of Columbia University professors, dubbed the "Brains Trust," had advised Roosevelt on the problems of the
nation since his time as governor of New York and continued to do so after he became president. Roosevelt augmented the advice of the
Brains Trust with input from hundreds of reformers who brought to Washington the activist tradition of the Progressive Era. Two of the
most influential reformers were Harry Hopkins and Frances Perkins, social workers concerned with improving the lives of the poor.
Millions of Americans who benefited from New Deal programs reinforced the efforts of Roosevelt and his advisers by voting consistently
for Democrats in the years to come. New Deal legislation aimed at providing a capitalist solution to the economic crisis. The New Dealers
thought that underconsumption of goods had caused the Great Depression, and that government could spark a recovery by stimulating
consumption. Programs designed to increase the share of wealth owned by ordinary Americans would give consumers more buying
power. Despite trying to curb the excesses of economic inequality, the New Deal treated big business as a necessary part of the economy;
it did not seek to break down corporate power.
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Banking and Finance Reform
Immediately following his inauguration, President Roosevelt confronted the banking crisis in America. He declared a "bank holiday,"
which temporarily closed the banks, in order to devise a plan. Roosevelt signed banking legislation to regulate the banks more closely and
insure deposits. On March 12, 1933, he broadcast his first "fireside chat" to the nation and explained all that had been done to correct the
faulty banking system; these "chats" became a beloved tradition during Roosevelt's terms in office. With public confidence in them
restored, the banks were soon reopened. To bring the financial world into line, Roosevelt encouraged the passage of legislation that would
regulate the stock market and end dubious Wall Street trading practices. To head his new Securities Exchange Commission (SEC),
Roosevelt named former trader Joseph P. Kennedy.
Relief and Conservation Programs
Roosevelt then shifted his emphasis to the unemployed through the creation of government job programs like the Federal Emergency
Relief Administration (FERA), the Civilian Conservation Corps (CCC), and the Tennessee Valley Authority (TVA). The CCC reflected
President Roosevelt's enthusiasm for conservation and his preference for the country over the city by giving useful outdoor jobs to young
men. The program, which employed three million young men, left in its wake many new recreation areas and roads that made them
widely accessible. The New Deal extended its scope with its most spectacular accomplishment in conservation-the Tennessee Valley
Authority. Helping one of the poorest regions of the country, the TVA was created to build hydroelectric dams, provide jobs, and enhance
the federal government's role as a central planning agent. The TVA helped to increase the prosperity of the people that it served in rural
communities.
Agricultural Initiatives
New Dealers diagnosed farmers' plight as a classic case of overproduction and underconsumption. The Agricultural Adjustment Act
(AAA) paid farmers to let a portion of their lands remain idle to rid the market of surpluses and drive up crop prices. Farmers slaughtered
millions of livestock and destroyed millions of acres of crops in order to qualify for their allotment payments. With the Commodity Credit
Corporation, the federal government allowed farmers to hold their harvested crops off the market and wait for a higher price. Another act
created the Farm Credit Administration, which provided farmers with long-term credit on mortgaged farm property in order to end the
flood of farm bankruptcies. Finally, the New Deal created legislation to bring electricity to rural areas; the Rural Electrification
Administration (REA), which gave loans to local cooperatives and spread electricity, helped lessen the gap between the city and the farm.
Such gains in the agricultural sector of the United States were distributed equally among farmers in the Midwest, but landlords in the
South's cotton belt controlled the distribution of agricultural benefits and rewarded themselves while denying benefits to many
sharecroppers and tenant farmers.
Industrial Recovery
Industrialists voluntarily adopted the general strategy that the New Dealers used in agriculture: cut production to balance low demand
with low supply and thereby maintain prices. But the industrialists' strategy created major economic and social problems for Roosevelt
and his advisers since declining industrial production meant that millions of working people lost their jobs. Mass unemployment also
reduced consumer demand for industrial products, contributing to a downward spiral in both production and jobs, with no end in sight.
The National Recovery Administration (NRA)—far less successful than other New Deal agencies—attempted to coordinate industry
through codes of fair conduct. Established in 1933, The NRA encouraged industrialists in every sector of the economy to agree upon
codes that would define fair working conditions, set prices, and minimize competition. However, instead of instilling industry with a
social conscience, these codes tended to strengthen conventional business practices. Large corporations created codes aimed at
maximizing corporate profits, rather than improving workers' or national economic welfare."
Challenges to the New Deal
Throughout his first term, Roosevelt's leadership and programs drew criticism from all quarters of society, including businessmen,
conservatives, and people on the left.
Resistance to Business Reform
The New Deal received strong opposition from the business community even though the prospects of business leaders steadily improved
during the depression. New Dealers who were surprised by the criticism of the business community thought that eventually business
leaders would welcome cooperative planning. The NRA similarly came under violent attack even though the economic situation for the
business community improved much more in comparison to other social groups. The corporate power structure that had developed at the
turn of the century caused business leaders to become fearful of anything that threatened their control, such as regulations, taxes, and
unions. Anti-New Deal organizations like the American Liberty League helped to create a rift between business and the Roosevelt
administration. The New Deal came under attack from the left as well; economic planners and labor leaders believed that the NRA stifled
enterprise by permitting monopolistic practices. The criticism ended in 1935 with the Supreme Court declaring the NRA unconstitutional.
Casualties in the Countryside
The AAA weathered critical battering by champions of the old order better than the NRA, creating loyalty among farmers with enough
acreage to receive allotment checks. The food processors and distributors, however, criticized the AAA for creating a scarcity of crops
and complained about being taxed to support it. The Supreme Court agreed with the food processors and ruled against the Agricultural
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Adjustment Act in 1936. The AAA bounced back by redesigning its programs to a more acceptable standard. Smaller farmers, especially
in the South, who did not qualify for allotments protested the association in an attempt to confront economic and racial inequities.
Displaced tenants often joined the army of migrant workers that straggled across rural America during the 1930s. But migrant laborers,
like the Joad family in John Steinbeck's The Grapes of Wrath, seldom found steady or secure work.
Politics on the Fringes
While the depression created desperate times, radical actions attracted only a minority. Socialists and Communists accused the New Deal
of being the handmaiden of business elites and rescuing capitalism from its self-inflicted crisis. Socialist author Upton Sinclair ran for
governor of California in 1934 with a plan for a "Cooperative Commonwealth" that demanded that the state take ownership of idle
factories and unused land and give them to cooperatives of working people. The Communist party preached the overthrow of "bourgeois
democracy" and the destruction of capitalism in favor of Soviet-style communism. Party spokesmen termed the NRA a "fascist slave
program" and likened Roosevelt and the New Deal to Adolf Hitler and the Nazis. More formidable was the coalition of influential
spokesmen for those discontented with the New Deal. These new agitators drew on the populist tradition and preached a dose of religion
and small-holder birthrights. Radio priest Father Charles Coughlin, who increasingly used anti-Semitic appeals, denounced the New Deal
for failing to drive bankers, Jews, and other "predatory capitalists" from power. Dr. Francis Townsend wanted the government to give
$200 a month to all people sixty years old and over through his scheme of a revolving pension plan. Together, Coughlin and Townsend
created the Union Party in opposition to the New Deal. The demagogic senator Huey P. Long was Roosevelt's greatest threat because his
message was the simplest: Share the wealth of the country with every American to end poverty and the depression. However, Long was
assassinated in 1935, and Roosevelt's landslide victory in 1936 ended the influence of Coughlin and Townsend.
Toward a Welfare State
The popular mandate for the New Deal revealed by the congressional elections persuaded President Roosevelt to press ahead with bold
new efforts of relief, recovery, and reform. In 1935, Roosevelt capitalized on his congressional majorities to enact new programs that
represented the emergence of an American welfare state.
Relief for the Unemployed
With 8 million of the nation's labor force still unemployed, Roosevelt turned to the business of creating jobs. The Works Progress
Administration (WPA), formed in 1935, provided most of the new jobs of the latest reform efforts. The main idea behind the WPA was to
create useful projects that would put revenues back into the treasury. Airports, parks, bridges, streets, buildings, and arts projects were a
few of the most successful in creating jobs and tax-paying consumers simultaneously. By the time the WPA ended in 1943—because
mobilization for World War II created full employment—it had made major contributions to both relief and recovery. WPA jobs put 13
million men and women to work and gave them paychecks worth $10 billion.
Empowering Labor
Under the New Deal, labor found the protection it had never known before. When the NRA codes began to unravel, Roosevelt signed the
Wagner Act, named after Senator Robert Wagner of New York, to guarantee workers' right to unionize. At the same time, unskilled
workers, organized by the Committee for Industrial Organization (CIO) and John L. Lewis, began to organize militantly and support the
New Deal programs of Franklin Roosevelt. Union membership increased dramatically during Roosevelt's presidency, from 3 million to 14
million workers. Similarly, sit-down strikes and other methods of protest produced numerous labor victories, especially against the
automobile industries. In steel and other major industries, such as the stridently anti-union southern textile mills, organizing efforts stalled
until after 1941, when military mobilization created labor shortages that gave workers greater bargaining power.
Social Security and Tax Reform
One of the most important measures of the New Deal was the Social Security Act, created to address the acute needs of the elderly.
Despite objections from conservatives and defenders of wealth and privilege, the act required workers and their employers to contribute to
a fund that would provide pensions for the elderly as well as aid to dependent children and various public health programs. The act
represented a tremendous advance in the role and responsibility of the federal government in the lives of most Americans. Disturbed by
the continued greed of the wealthy during the depression and by opponents' calls for a redistribution of wealth, Roosevelt attempted to
weaken conservative opposition and diffuse his challengers with a tax-reform plan. Congress endorsed Roosevelt's basic principle by
taxing those with higher incomes at a somewhat higher rate.
Neglected Americans and the New Deal
The safety net of New Deal programs provided the best protection for unionized workers in major industries, neglecting millions of other
less fortunate Americans; women, children, old folks and the unorganized, unskilled, uneducated, and unemployed often fell through the
New Deal's safety net. The New Deal neglected few citizens more than African Americans. About half of black Americans in cities were
jobless, which was double the unemployment rate among whites. New Deal agricultural policies like the AAA favored landowners and
often resulted in black sharecroppers and tenants being pushed off the land that they farmed. Disfranchisement by intimidation and legal
subterfuge prevented southern blacks from protesting their plight at the ballot box. Protest risked vicious retaliation from local whites;
lynching increased during the 1930s. Stymied by the political clout of entrenched white racism, New Dealers tried to attract political
support from black leaders. Eleanor Roosevelt sponsored the appointment of Mary McLeod Bethune—the energetic cofounder of the
National Council on Negro Women—as head of the Division of Negro Affairs in the National Youth Administration, the highest ranking
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black official in Roosevelt's administration. Bethune used her position to guide a small number of black professionals and civil rights
activists to posts within New Deal agencies. Hispanic Americans did no better. The federal government choked off immigration from
Mexico, while state and local officials prohibited employment of aliens on work relief projects and summarily deported tens of thousands
of Mexican Americans, many with their American-born children. Asian Americans had similar experiences. Asian immigrants could not
become U.S. citizens, and were prohibited from owning land in many states. While Native Americans, who remained the poorest of these
groups, welcomed legislation designed to restore their right to own land communally, the change brought little immediate benefit.
Nevertheless, the New Deal's move to the left became inclusive and broadened Franklin Roosevelt's political coalition.
The New Deal from Victory to Deadlock
The New Deal reforms did not immediately signal an end to the depression, as Roosevelt had hoped, so he shifted the emphasis of his
administration in the mid-1930s to drum up further support from the burgeoning New Deal coalition to enact more reforms over the
opposition of Republicans and corporate interests. Once critical of the slow pace of reform, even American Communist and Socialist
leaders began to urge cooperation with the New Deal, rather than opposition or revolution. With the New Deal's move to the left, attacks
came largely from the right-from conservative Republicans and southern Democrats.
The Election of 1936
Before the election of 1936, many believed that the New Deal's popularity had reached a low point. The nation continued to grapple with
unemployment and poverty. Roosevelt's critics predicted a strong showing for the Republican challenger, Governor Alfred (Alf) Landon.
Landon was a moderate who had supported some New Deal measures while remaining a traditional fiscal conservative. In a campaign
speech, President Roosevelt was aggressive when he proclaimed that the New Deal had indeed liberated some Americans who long had
experienced periods of "economic slavery" to others. He welcomed the chance to continue assailing "old enemies . . . business and
financial monopoly, speculation, reckless banking, [and] class antagonism." The people overwhelmingly reelected Roosevelt, who took
every state but Maine and Vermont, pummeling Landon at the polls. The third parties—including the Socialists and the Communists—
had no success with the voters, and the election effectively ended their ability to function as viable entities. Congressional Democrats won
a three-to-one majority over Republicans, and the results overwhelmingly endorsed the New Dealers' policies.
Court Packing
Basking in an electoral victory and renewed power, Roosevelt was determined to attack the last remaining bastion of conservatism in
government—the Supreme Court. The Court had killed eleven New Deal measures and threatened others. Roosevelt introduced
legislation to add as many as six new justices to the Court. Many Americans were disturbed by Roosevelt's plan. A storm of protest
erupted from Republicans, the Court, business leaders, and even fellow Democrats over Roosevelt's "court-packing" scheme. The crisis
ended when two justices moderated their votes on crucial cases. Thereafter, several justices resigned, and Roosevelt eventually filled eight
posts with supporters of the New Deal.
Reaction and Recession
Roosevelt's prestige suffered as a result of the court-packing fiasco. Conservatives used the president's misstep as an opportunity to rally
against him and any additional New Deal measures. Equally damaging were his attempts in 1937 to balance the budget by cutting relief
programs and other New Deal measures in the belief that the depression nearly was over. This promptly caused a further rise in
unemployment, a loss in national income and production, and a drop in farm prices. Roosevelt quickly reversed course by pumping
money into new jobs and spending programs in the hopes that the economy again would begin to correct itself.
The Last of the New Deal Reforms
As Roosevelt attempted to draw business into a cooperative role with government; he worked on the remaining measures of his New
Deal. The Administrative Reorganization Act of 1937 gave the president more executive power, but it fell short of his desires. A series of
farm bills passed by Congress were intended to help farmers with the creation of production quotas on five staple crops, but they never
came close to fulfilling their objectives. The National Housing Act of 1937 created 160,000 public housing units for those below the
poverty line but failed to completely meet the need for affordable housing. The final large New Deal legislation was the Fair Labor
Standards Act of June 1938, which created a minimum wage of twenty-five cents per hour and ended the use of child labor. Missing from
the New Deal was civil rights legislation, particularly an antilynching bill. In his speech to Congress in 1939, President Roosevelt called a
halt to New Deal reform and suggested that it was time for the nation to look toward national defense.
Conclusion: Achievements and Limitations of the New Deal
Franklin Roosevelt's New Deal vastly expanded the size and power of the federal government, which shifted power relations in the
country and helped to curb the excesses of concentrated wealth. The New Deal, though it experimented with many forms of centralized
government intervention, ultimately worked within a tradition of liberal reform that made adjustments to the capitalist system but never
sought to overthrow it. In the next decade, with the depression only partly vanquished, the Roosevelt administration had to turn from the
New Deal's war against economic crisis at home to participate in a worldwide conflagration to defeat the enemies of democracy abroad.
Despite its failure to end the depression, the New Deal restored hope and faith in America. Roosevelt's policies resulted in many
successes, and with them, the federal government assumed new responsibilities over the nation's economy and the people's welfare toward
minority groups.