The Second New Deal

The Second New Deal

     Roosevelt badly underestimated the severity of the national economic crisis.  As government funding slowed down and economic indicators leveled off, the depression deepened in 1934, triggering a series of violent strikes, which culminated on Labor Day, 1934, when 500,000 garment workers launched the single largest strike in the nation's history.  All across the land, critics attacked Roosevelt for not doing enough to combat the depression, charges that did not go unheeded in the White House.

     Following the congressional elections of 1934, in which the Democrats won 13 new House seats and 9 new Senate seats, Roosevelt abandoned his hopes for a balanced budget, deciding that bolder action was required. He had lost faith in government planning and the proposed alliance with business, which left only one other road to recovery:  government spending.  Encouraged by the CCC's success, he decided to create more federal jobs for the unemployed.

The Works Progress Administration (WPA)








FSA Client
Photo of FSA Client








WPA Writers
Flyer from the WPA Federal Music Project

     In January 1935 Congress created the Works Progress Administration (WPA), Roosevelt's program to employ 3.5 million workers at a "security wage"--twice the level of welfare payments but well below union scales.  To head the new agency, Roosevelt again turned to Harry Hopkins.  Since the WPA's purpose was to employ men quickly, Hopkins opted for labor intensive tasks, creating jobs that were often makeshift and inefficient.  Jeering critics said the WPA stood for "We Piddle Along," but the agency built many worthwhile projects. In its first five years alone the WPA constructed or improved 2,500 hospitals, 5,900 schools, 1,000 airport fields (including New York's LaGuardia Airport), and nearly 13,000 playgrounds.  By 1941 it had pumped $11 billion into the economy.

     The WPA's most unusual feature was its spending on cultural programs. About five percent of the WPA's spending went to the arts.  While folksingers like Woody Guthrie honored the nation in ballads, other artists were hired to catalog it, photograph it, paint it, record it, and write about it. In photojournalism, for example, the Farm Security Agency (FSA) employed scores of photographers to create a pictorial record of America and its people.  Under the auspices of the WPA, the Federal Writers Project sponsored an impressive set of state guides and dispatched an army of folklorists into the backcountry in search of tall tales.  Oral historians collected slave narratives, and musicologists compiled an amazing collection of folk music.  Other WPA programs included the Theatre Project, which produced a live running commentary on everyday affairs, and the Art Project, which decorated the nation's libraries and post offices with murals of muscular workmen, bountiful wheat fields, and massive machinery.

     Valuable in their own right, the WPA's cultural programs had the added benefit of providing work for thousands of writers, artists, actors, and other creative people.  In addition, these programs established the precedent of federal support to the arts and the humanities, laying the groundwork for future federal programs to promote the life of the mind in the United States.

     In 1939, a Gallup Poll asked Americans what they liked best and what they liked worst about Franklin Delano Roosevelt's New Deal.  The answer to both questions was the WPA, the Works Projects Administration.

      Work crews were criticized for spending days moving leaf piles from one side of the street to the other. Unions struck to protest the program's refusal to pay wages equal to those of the private sector.  But President Ronald Reagan, a staunch critic of large-scale government programs, was one of the WPA's defenders.  "Some people," he said, "have called it boondoggle and everything else.  But having lived through that era and seen it, no, it was probably one of the social programs that was most practical in those New Deal days."

     About five percent of its budget was devoted to the arts.   WPA alumni include writers Saul Bellow, John Cheever, Ralph Ellison, and Richard Wright, the artist Jackson Pollack, and actor and director Orson Welles.

     The WPA was not especially efficient. In Washington, D.C., construction costs typically ran three to four times the cost of private work. But this was intentional. The WPA avoided cost-saving machinery in order to hire more workers. At its peak, the WPA spent $2.2 billion a year, or approximately $30 billion annually in current dollars.

Roosevelt's Critics




Huey Long
Huey Long











Coughlin
Fr. Charles Coughlin

     By 1935, Roosevelt's programs were provoking strong opposition.  Many conservatives regarded his programs as infringements on the rights of the individual, while a growing number of critics argued that they did not go far enough.  Three figures stepped forward to challenge Roosevelt:  Huey Long, a Louisiana senator; Father Charles Coughlin, a Catholic priest from Detroit; and Francis Townsend, a retired California physician.

     Of the three, Huey Long attracted the widest following.  Ambitious, endowed with supernatural energy, and totally devoid of scruples, Long was a fiery, spellbinding orator in the tradition of southern populism.  As governor and then U.S. senator, he ruled Louisiana with an iron hand, keeping a private army equipped with sub-machine guns and a "deduct box," where he kept funds deducted from state employees' salaries.  Yet the people of Louisiana loved him because he attacked the big oil companies, increased state spending on public works, and improved public schools.  Although he backed Roosevelt in 1932, Long quickly abandoned the president and opposed the New Deal as too conservative.

     Huey Long was immensely popular, especially among the poor.  Part of his appeal lay in his style; he dressed in vanilla ice cream white suits and called himself "the Kingfish," after a character in "Amos 'n Andy."  By playing up his country origins and ridiculing the rich, he became a popular legend.  In one incident, he issued a "budget" showing how millionaires could economize by living on $10,000 a day.

     Early in 1934 Long announced his "Share Our Wealth" program. Vowing to make "Every Man a King," he promised to soak the rich by imposing a stiff tax on inheritances over $5 million and by levying a 100 percent tax on annual incomes over $1 million.  The confiscated funds, in turn, would be distributed to the people, guaranteeing every American family an annual income of no less than $2,000, in Long's words more than enough to buy "a radio, a car, and a home."  By February 1935 Long's followers had organized over 27,000 "Share Our Wealth" clubs.  Roosevelt had to take him seriously, for a Democratic poll revealed Long could attract three to four million voters to an independent presidential ticket.

     Like Long, Father Charles Coughlin was an early supporter who turned sour on the New Deal.  For about sixteen years, from the mid-twenties until the United States entered World War II, Father Charles Coughlin was probably the most influential religious figure in the United States.  His radio program, "The Golden Hour of the Shrine of the Little Flowe,", had a weekly audience of 16 million.  His parish in suburban Detroit had to build a post office to handle his mail.

     Coughlin blamed the depression on greedy bankers and challenged Roosevelt to solve the crisis by nationalizing banks and inflating the currency.  When Roosevelt refused to heed his advice, Coughlin broke with Roosevelt and in 1934 formed the National Union for Social Justice.  The National Union's weekly newspaper serialized "The Protocols of the Elders of Zion," an anti-Semitic forgery.

     Father Coughlin helped to invent a new kind of preaching that made effective use of the microphone and radio. Coughlin exemplified what historian Richard Hofstadter called the "paranoid style."  He believed that Jews and Communists, in league with bankers and capitalists, were out to get the little man.

     Roosevelt's least likely critic was Dr. Francis Townsend, a California public health officer who found himself unemployed at the age of 67, with only $100 in savings.  Seeing many people in similar or worse straits, Townsend embraced old age relief as the key to ending the depression.  In January 1934 Townsend announced his plan, demanding a $200 monthly pension for every citizen over the age of 60.  In return, recipients had to retire and spend their entire pension every month within the United States.  Younger Americans would inherit the jobs vacated by senior citizens, and the economy would be stimulated by the increased purchasing power of the elderly.  Although critics lambasted the Townsend plan as ludicrous, several million Americans found his plan refreshingly simple.

The Wagner Act (aka National Labor Relations Act, or NLRA)

Wagner Act
Signing of the Wagner Act














CIO Leaders
CIO leaders (Lewis, ctr)

     In 1932, George Barnett, a prominent economist and president of the American Economics Association, forecast a bleak future for organized labor.  "The changes, occupational and technological, which checked the advance of unionism in the last decade, appear likely to continue in the same direction," he intoned.

     In 1930, only 3.4 million workers belonged to labor unions--down from 5 million in 1920.  Union members were confined to a few industries, such as construction, railroads, and local truck delivery.  The nation's major industries, like autos and steel, remained unorganized.

     In 1935, Congress passed the landmark Wagner Act, which spurred labor to historic victories, including a sit-down strike by auto workers in Fint, Michigan in 1937, which led General Motors to recognize the United Automobile Workers.  Union membership soared from 3.4 million in 1932 to 10 million in 1942 and 16 million in 1952.

     As the depression dragged on, bitter labor-management warfare erupted.  In 1934, 1.5 million workers went on strike. Auto and steel workers and longshoremen became involved in violent strikes.  In Minneapolis police shot 67 striking Teamsters.  In August, textile workers staged the largest strike the country had ever seen. 110,000 workers struck in Massachusetts, 60,000 in Georgia--a total of 500,000 workers in 20 states.  While some of the strikes aimed at higher wages, fully a third demanded union recognition.

     Labor unrest forced the federal government to step into labor relations and forge a compromise between management and labor.  Under the Wagner Act of 1935 (the National Labor Relations Act), the federal government guaranteed the right of employees to form unions and bargain collectively.  It also set up the National Labor Relations Board (NLRB), which had the power to prohibit unfair labor practices by employers.

     During the mid-1930s, a bitter dispute broke out within labor's ranks.  It involved an issue that had been simmering for half a century:  Should labor focus its efforts on unionizing skilled workers; or should labor unionize all workers in industry, regardless of skill level?  The country's major labor federation, the American Federation of Labor, consisted of craft unions, organized by occupation.  In late 1935, a group of union leaders--including John L. Lewis of the United Mine Workers, David Dubinsky of the Amalgamated Clothing Workers, and Sidney Hillman of the International Ladies' Garment Workers--formed the Committee of Industrial Organization (CIO)--to organize unskilled workers in America's mass production industries.  The CIO formed unions in the auto, glass, radio, rubber, and steel industries, and by the end of 1937, it had more members than the AFL--3.7 million against 3.4 million.

     A 44-day sit-down strike in Flint, Michigan, in 1937 forced General Motors to recognize the United Auto Workers.  A few weeks later, U.S. Steel accepted unionization without a strike, but the "Little Steel" companies--Bethlehem, Inland, National, Republic, and Youngstown Sheet & Tube--vowed to resist the steel workers union.  75,000 workers walked out and violence flared. In May 1937, police in South Chicago opened fire on marchers at the Republic mill, killing ten.  Soon after, the strike was broken, but in 1941, the National Labor Relations Board ordered "Little Steel" to recognize the United Steelworkers of America and reinstate all workers fired for union activity.

Social Security







Social Security

     A goal of reformers since the Progressive Era, the 1935 Social Security Act aimed to alleviate the plight of America's visible poor - the elderly, dependent children, and the handicapped.  A major political victory for Roosevelt, the Social Security Act was a triumph of social legislation.  It offered some workers 65 or older monthly stipends based on previous earnings, and it gave the indigent elderly small relief payments, financed by the federal government and the states.  In addition, it provided assistance to blind and handicapped Americans, and to dependent children who did not have a wage-earning parent.  The act also established the nation's first federally sponsored system of unemployment insurance.  Mandatory payroll deductions levied equally on employees and employers financed both the retirement system and the unemployment insurance.

     While conservatives argued that the Social Security Act placed the United States on the road to socialism, the legislation was also profoundly disappointing to reformers, who demanded "cradle to grave" protection as the birthright of every American.  The new system authorized pitifully small payments; its retirement system left huge groups of workers uncovered, such as migrant workers, civil servants, domestic servants, merchant seamen, and day laborers; its budget came from a regressive tax scheme that placed a disproportionate tax burden on the poor; and it failed to provide health insurance.

     Despite these criticisms, the Social Security Act introduced a new era in American history.  It committed the government to a social welfare role by providing for elderly, disabled, dependent, and unemployed Americans. By doing so, the act greatly expanded the public's sense of entitlement, and the support people expected government to give to all citizens.

African Americans and the New Deal


African-American WPA Cmte.
African-American WPA Committee







Cabin in Alabama
Tenant Shack in Alabama

     Until the New Deal, blacks had shown their traditional loyalty to the party of Lincoln by voting overwhelmingly Republican.  By the end of Roosevelt's first administration, however, one of the most dramatic voter shifts in American history had occurred.  In 1936, 75 percent of black voters supported the Democrats. Blacks turned to Roosevelt in part because his spending programs gave them a measure of relief from the depression and in part because the GOP had done little to repay their earlier support.

     Still, Roosevelt's record on civil rights was modest at best.  Instead of using New Deal programs to promote civil rights, the administration consistently bowed to discrimination.  In order to pass major New Deal legislation, Roosevelt needed the support of southern Democrats.  Time and time again, he backed away from equal rights to avoid antagonizing southern whites, although his wife, Eleanor, did take a public stand in support of civil rights.

     Most New Deal programs discriminated against blacks.  The NRA, for example, not only offered whites the first crack at jobs but authorized separate and lower pay scales for blacks.  The Federal Housing Authority (FHA) refused to guarantee mortgages for blacks who tried to buy in white neighborhoods, and the CCC maintained segregated camps.  Furthermore, the Social Security Act excluded those job categories blacks traditionally filled.

     The story in agriculture was particularly grim.  Since 40 percent of all black workers made their living as sharecroppers and tenant farmers, the AAA acreage reduction hit blacks hard.  White landlords could make more money by leaving land untilled than by putting land into production.  As a result, the AAA's policies forced more than 100,000 blacks off the land in 1933 and 1934.  Even more galling to black leaders, the president failed to support an anti-lynching bill and a bill to abolish the poll tax.  Roosevelt feared that conservative southern Democrats, who had seniority in Congress and controlled many committee chairmanships, would block his bills if he tried to fight them on the race question.

     Yet the New Deal did record a few gains in civil rights.  Roosevelt named Mary McLeod Bethune, a black educator, to the advisory committee of the National Youth Administration (NYA), and thanks to her efforts, blacks received a fair share of NYA funds.  The WPA was colorblind, and blacks in northern cities benefited from its work relief programs.  Harold Ickes, a strong supporter of civil rights who had several blacks on his staff, poured federal funds into black schools and hospitals in the South.  Most blacks appointed to New Deal posts, however, served in token positions as advisors on black affairs.  At best they achieved a new visibility in government.

Mexican Americans
     In February 1930 in San Antonio, Tex., 5000 Mexicans and Mexican Americans gathered at the city’s railroad station to depart the United States for settlement in Mexico.  In August, a special train carried another 2000 to central Mexico.

     Most Americans are familiar with the forced relocation in 1942 of 112,000 Japanese Americans from the West Coast to internment camps.  Far fewer are aware that during the Great Depression, the Federal Bureau of Immigration (after 1933, the Immigration and Naturalization Service) and local authorities rounded up Mexican immigrants and naturalized Mexican American citizens and shipped them to Mexico to reduce relief roles.  In a shameful episode, more than 400,000 repatriodos, many of them citizens of the United States by birth, were sent across the U.S.-Mexico border from Arizona, California, and Texas.  Texas’ Mexican-born population was reduced by a third.  Los Angeles also lost a third of its Mexican population.  In Los Angeles, the only Mexican American student at Occidental College sang a painful farewell song to serenade departing Mexicans.

     Even before the stock market crash, there had been intense pressure from the American Federation of Labor and municipal governments to reduce the number of Mexican immigrants.  Opposition from local chambers of commerce, economic development associations, and state farm bureaus stymied efforts to impose an immigration quota, but rigid enforcement of existing laws slowed legal entry.  In 1928, United States consulates in Mexico began to apply with unprecedented rigor the literacy test legislated in 1917.

     After President Hoover appointed William N. Doak as Secretary of Labor in 1930, the Bureau of Immigration launched intensive raids to identify aliens liable for deportation.  The secretary believed that removal of undocumented aliens would reduce relief expenditures and free jobs for native-born citizens.  Altogether, 82,400 were involuntarily deported by the federal government.

     Federal efforts were accompanied by city and county pressure to repatriate destitute Mexican American families.  In one raid in Los Angeles in February 1931, police surrounded a downtown park and detained some 400 adults and children.  The threat of unemployment, deportation, and loss of relief payments led tens of thousands of people to leave the United States.

     The New Deal offered Mexican Americans a little help.  The Farm Security Administration established camps for migrant farm workers in California, and the CCC and WPA hired unemployed Mexican Americans on relief jobs.  Many, however, did not qualify for relief assistance because as migrant workers they did not meet residency requirements.  Furthermore, agricultural workers were not eligible for benefits under workers' compensation, Social Security, and the National Labor Relations Act.

The New Deal in Decline
     In 1936, President Roosevelt was overwhelmingly reelected.  He carried every state but Maine and Vermont, easily defeating the Republican candidate Governor Alf Landon of Kansas.  Democrats won an equally lopsided victory in the congressional races:  331 to 89 in the House and 76 to 16 in the Senate.

     In his second inaugural address in early 1937, Franklin Roosevelt promised to press for new social legislation.  "I see one-third of a nation ill-housed, ill-clad, ill-nourished," he told the country.  Yet instead of pursuing new reforms, he allowed his second term to bog down in political squabbles.  He wasted his energies on an ill-conceived battle with the Supreme Court and an abortive effort to purge the Democratic Party.

Court Packing

     On "Black Monday," May 27, 1935, the Supreme Court struck down a basic part of Roosevelt's program of recovery and reform.  A kosher chicken dealer sued the government, charging that the NRA was unconstitutional.  In its famous "dead chicken" decision, Schechter v. the U.S., the court agreed, declaring that Congress had delegated excessive authority to the president and had improperly involved the federal government in regulating intrastate commerce.  Complained Roosevelt:  "We have been relegated to the horse-and-buggy definition of interstate commerce."

     In June 1936, the court ruled another of the measures enacted during the 100 days--the Agricultural Adjustment Act--unconstitutional.  Then, six months later, the high court declared a New York state minimum wage law invalid. Roosevelt was aghast.  The court, he feared, had established a "'no-man's land' where no Government--State or Federal--can function."

     Roosevelt feared that every New Deal reform--such as the prohibition on child labor or regulation of wages and hours--was at risk.  In 1936, his supporters in Congress responded by introducing over a hundred bills to curb the judiciary's power.  After his landslide reelection in 1936, the president proposed a controversial "court-packing scheme."  His reelection led the president to propose reorganizing the Supreme Court.  In an effort to make his opponents on the Supreme Court resign so he could replace them with justices more sympathetic to his policies, Roosevelt announced a plan to add one new member to the Supreme Court for every judge who had reached the age of 70 without retiring (six justices were over 70).  To offer a carrot with the stick, Roosevelt also outlined a generous new pension program for retiring federal judges.

     The court-packing scheme was a political disaster. Conservatives and liberals alike denounced Roosevelt for attacking the separation of powers and critics accused him of trying to become a dictator.  Fortunately, the Court itself ended the crisis by shifting ground.  In two separate cases the Court upheld the Wagner Act and approved a Washington state minimum wage law, furnishing proof that it had softened its opposition to the New Deal.

     Yet Roosevelt remained too obsessed with the battle to realize he had won the war.  He lobbied for the court-packing bill for several months, squandering his strength on a struggle that had long since become a political embarrassment.  In the end, the only part of the president's plan to gain congressional approval was the pension program.  Once it passed, Justice Willis Van Devanter, the most obstinate New Deal opponent on the Court, resigned.  By 1941 Roosevelt had named five justices to the Supreme Court.  Few legacies of the president's leadership proved more important, for the new "Roosevelt Court" significantly expanded the government's role in the economy and in civil liberties.

The Depression of 1937
     The sweeping Democratic electoral victory in 1936 was followed by a deep economic relapse known as the "Roosevelt Recession."  In just a few months, industrial production fell by 40 percent; unemployment rose by 4 million; stock prices plunged 48 percent.

     Several factors contributed to the "little depression."  Reassured by good economic news in 1936, Roosevelt slashed government spending the following year.  The budget cuts knocked the economy into a tailspin. Roosevelt's virulent attacks on "economic royalists" also undermined business confidence.

     By the end of 1938 the reform spirit was gone.  A conservative alliance of southern Democrats and northern Republicans in Congress blocked all efforts to expand the New Deal.  In the congressional elections of 1938, Roosevelt campaigned against five conservative senators who opposed the New Deal.  But all won reelection. Roosevelt's failures showed conservative Democrats that they could defy the president with impunity.

Legacy of the New Deal      The New Deal did not end the Depression.  Nor did it significantly redistribute income.  But it did provide Americans with economic security they had never known before.  Its legacies include unemployment insurance, old age insurance, and insured bank deposits.  The Wagner Act reduced violence in labor relations.  The Securities and Exchange Commission protected stock market investments of millions of small investors.  The Federal Housing Administration and Fannie Mae enabled a majority of Americans to become homeowners.

     But the New Deal's greatest legacy was a shift in government philosophy.  As a result of the New Deal, Americans came to believe that the federal government has a responsibility to ensure the health of the nation's economy and the welfare of its citizens.

Source:
Digital History, "The 1930s."

© Kahne Parsons 2006