Nation of Nations 3/e Davidson, Gienapp, Heyrman, Lytle, and Stoff
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THE CHAPTER IN PERSPECTIVE

he New Deal was no revolution in public policy. In many ways it was quite conservative. It sought ultimately to reform capitalism by modifying some of the excesses that led to the Great Depression. If there were a revolutionary aspect, however, it lay in the New Deal's willingness to commit government to compensating for swings in the economy and to supporting those in need. The New Deal marshaled the government activism and executive leadership of Progressivism but with none of the moralizing that often accompanied progressive reform. With the New Deal the modern liberal state was born.

OVERVIEW

This chapter opens with federal investigator Lorena Hickok traveling across America in search of the New Deal's impact on the lives of ordinary people. The deprivation, anguish, and courage she finds indicates that Roosevelt’s relief programs are leaving out too many Americans. At the same time, she discovers that the New Deal is restoring hope and confidence, and because of it, Americans are looking to Washington as never before for help.

The Early New Deal (1933-1935)

Franklin Roosevelt’s warmth, dynamism, and willingness to experiment and Eleanor Roosevelt’s insistent fights for the underdog encouraged Americans to look to Washington. Even more to the point, a spirit of activism emanated from Washington. Roosevelt's first "hundred days" in office were marked by an unprecedented flood of legislation: banking and securities acts to restore the credit structure and safeguard investment markets; relief measures to aid the dispossessed; the Tennessee Valley Authority to provide flood control and to siphon federal building funds into one of the poorest regions of the country.

Reform and relief were less important themes in the early New Deal than recovery. Here Roosevelt proceeded cautiously but vigorously, combining new federal planning with associational techniques pioneered during the 1920s to revive the economy. The National Recovery Administration promoted industrial cooperation and self-regulation through codes of fair practices, while the Agricultural Adjustment Administration similarly relied on private cooperation to raise farm prices by reducing acreage under cultivation. Although more successful than the NRA, the AAA (like the NRA before it) was voided by the Supreme Court in 1936.

A Second New Deal (1935-1936)

The limited economic progress of the New Deal bred political success in the 1934 off-year elections, when Democrats actually increased their majorities in Congress. New Deal critics, too, experienced success, as progress failed to keep pace with rising public expectations. Among the most popular voices of protest were Louisiana governor and senator Huey Long, Detroit radio priest Charles Coughlin, and Dr. Francis Townsend, an advocate of aid to the elderly. They helped, along with Congress and the public-at-large, to push Roosevelt and the New Deal farther to the left in 1935.

A second "hundred days" of legislation signaled a break from the earlier partnership with business and stressed longer term relief and more sweeping reform. The Works Progress Administration substituted federal work relief for earlier give-away programs and made aid to the needy a centerpiece of administration policy. The Social Security Act institutionalized a semi-welfare state with a relatively conservative social insurance program. The National Labor Relations Act created a federal board to oversee unionization and labor relations with management, thereby giving a powerful boost to organized labor. Legislation regulating banking, holding companies, and new taxes strengthened federal control over the private sector and further alienated many business leaders.

In 1936 Roosevelt won reelection by the largest majorities to date in American history. Victory was built on a powerful coalition of the traditionally Democratic South, big city ethnics, and labor. It reflected the wide impact of the New Deal on the American people, particularly those at the middle and bottom of the economic ladder.

The New Deal and the American People

In the most stunning electoral reversal of the century, African-Americans turned their allegiances from the Republican party to the Democrats. Though local administration often meant that racial discrimination persisted in New Deal programs, black citizens still received more attention than they had since Reconstruction.

So, too, did Mexican-Americans and women. None of these groups prospered but all benefited to greater or lesser degree. Organized labor probably benefited most of all, but splits between the American Federation of Labor and the Committee for Industrial Organization weakened solidarity. A wave of sit-down and other strikes alienated Democrats and Republicans alike.

The End of the New Deal (1937-1940)

Some of the troubles of Roosevelt's second term were brought on by the president himself. In 1935 and 1936 a conservative Supreme Court had begun to invalidate several New Deal measures on the very grounds used by the administration to expand executive authority. Roosevelt fought back by trying to "pack" the courts with new judges. Later, because of deaths and retirements, Roosevelt was able to appoint five justices to the Supreme Court, but his court-packing plan, badly formulated and ineptly handled, succeeded only in angering the public and bolstering a conservative coalition of Republicans and rural Democrats. A presidential effort to balance the budget in 1937 led to a deep recession in 1938, and a vindictive attempt to unseat anti-New Deal Democrats ended in failure.

By 1938 the New Deal had come largely to an end. Though Roosevelt and the New Deal never succeeded in achieving recovery, their legacy was a lasting one: the creation of economic stabilizers to compensate for future swings in the economy, the modernization of the presidency, the establishment of a limited welfare state, and the revitalization of the Democratic party.

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