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Chapter32TheGreatDepressionandtheNewDeal,
1933–1939
I.FDR:PoliticianinaWheelchair• Roosevelt'spersonality– Shapedbystrugglewithinfantileparalysis:• Putadditionalsteelinhissoul• Sufferinghumbledhim• Schooledhimselfinpatience,tolerance,compassion,andstrengthofwill
– Apersonalandpoliticalassetwashiswife,Eleanor:
– DistantcousinofFranklin– Overcamemiseryofunhappychildhood– Emergedaschampionofdispossessed– Ultimately“conscienceoftheNewDeal”
I.FDR:PoliticianinaWheelchair(cont.)
– FDR'spoliticalcareerasmuchhersasitwashis– Mrs.Rooseveltalsomarchedtoherowndrummer
» JoinedWomen'sTradeUnionLeagueandLeagueofWomenVoters– MovingintoWhiteHouse,shebroughtunprecedentednumberofwomenactivists
– NetworkhelpedmakehermostactiveFirstLadyinhistory– Shepowerfullyinfluencedpoliciesofnationalgovernment– Shebattledforimpoverishedandoppressed– PersonnelrelationshipwithFDRrocky,duetohisinfidelities– Condemnedbyconservativesandlovedbyliberals,shewasoneofmostcontroversial—andconsequential—publicfiguresof1900s
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I.FDR:PoliticianinaWheelchair(cont.)
• FranklinRoosevelt'spoliticalappeal:– PremierAmericanoratorofhisgeneration– AspopulardepressiongovernorofNewYork:• Sponsoredheavystatespendingtorelievehumansuffering• Believedmoney,ratherthanhumanity,expendable• Revealeddeepconcernforplightof“forgottenman”• Assailedbyrichas“traitortohisclass”
I.FDR:PoliticianinaWheelchair(cont.)
• DemocraticNationalConvention(July1932)inChicagospeedilynominatedRoosevelt– Democraticplatform:• Promisedbalancedbudget• Sweepingsocialreforms• FDRflewtoChicagoandacceptednominationinperson• Hiswords,“Ipledgeyou,IpledgemyselftoanewdealfortheAmericanpeople”
II.PresidentialHopefulsof1932– Roosevelt:• ConsistentlypreachedNewDealfor“forgottenman”• Hewasannoyinglyvagueandsomewhatcontradictory• Manyofhisspeechesghostwrittenby“BrainsTrust”(popularlyBrainTrust)– Smallgroupofreform-mindedintellectuals– Kitchencabinet,whoauthoredmuchNewDeallegislation– FDRrashlypromisedbalancedbudget– AndberatedheavyHooveriandeficits
II.PresidentialHopefulsof1932(cont.)
– Hoover:• RemainedinWhiteHouse:
– Conscientiouslybattlingdepression– Outoncampaign,supportershalfheartedlyassuredhalf-listeningvoters
– InsistedRoosevelt'simpendingvictorywouldplungenationdeeperintodepression
• WithcampaigngoingbadlyforRepublicans,– Hoovertooktostump– ReaffirmedhisfaithinAmericanfreeenterpriseandindividualinitiative
III.Hoover'sHumiliationin1932
• Electionof1932:– Hooverhadbeensweptintoofficeonrisingtideofprosperity
– Hewassweptoutofofficebyrecedingdepression– Votes:• 22,809,638forRoosevelt;15,758,901forHoover• Electoralcount472to59• Hoovercarriedonlysixrock-ribbedRepublicanstates
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III.Hoover'sHumiliationin1932(cont.)
• Featuresofelection:– DistinctshiftofblackstoRooseveltcamp• Victimsofdepression• ShiftedtoDemocraticParty,especiallyinurbancentersofNorth
– HardtimesruinedRepublicans:• Voteasmuchanti-Hooverasitwaspro-Roosevelt• Democratsvoiceddemandforchange:
– AnewdealratherthantheNewDeal
III.Hoover'sHumiliationin1932(cont.)
• Lameduckperiod:– Hoovercontinuedtobepresidentfor4longmonths,untilMarch4,1933• Helplesstoembarkuponanylong-rangepolicieswithoutcooperationofRoosevelt• President-electuncooperative• HooverarrangedtwomeetingswithRoosevelttogetFDRtoagreetoanti-inflationarypolicythatwouldhavepreventedmostNewDealexperiments
– Inpolitics,thewinner,notloser,callstune
III.Hoover'sHumiliationin1932(cont.)
• Washingtondeadlocked:– Economyclankedtovirtualhalt– Oneworkerinfour,unemployed– BankslockedtheirdoorsthroughoutU.S.– SomeHooveritesaccusedRooseveltofdeliberatelypermittingdepressiontoworsensohecouldemergemorespectacularlyassavior
IV.FDRandtheThreeR's:Relief, Recovery,Reform
• InaugurationDay,March4,1933:– Rooseveltdenounced“moneychangers”whobroughtoncalamity
– DeclaredgovernmentmustwagewaronGreatDepression
– Moveddecisively:• Boldlydeclarednationwidebankingholiday,March6-10• SummonedCongressintospecialsessiontocopewithnationalemergency:
IV.FDRandtheThreeR's:Relief,Recovery,Reform(cont.)
• HundredDays(March9-June16,1933):– Congresscrankedoutunprecedentedremediallegislation(seeTable32.1)
– Newmeasurestodealwithdesperateeconomy– AimedatthreeR's:relief,recovery,andreform– Short-rangegoals—reliefandimmediaterecoveryintwoyears
– Long-rangegoals—permanentrecoveryandreformofcurrentabuses
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Table 32-1 p746
IV.FDRandtheThreeR's:Relief,Recovery,andReform(cont.)
• Roosevelt'sHundredDaysCongress:– RubberstampedbillsdraftedbyWhiteHouse– Roosevelt's“mustlegislation”gavehimextraordinaryblank-checkpowers
– Someofthenewlawsdelegatedlegislativeauthoritytochiefexecutive
– PassedmanyessentialNewDeal“threeR's”thoughlong-rangemeasuresaddedlater
IV.FDRandtheThreeR's:Relief,Recovery,andReform(cont.)
• NewDealersembracedprogressiveideas:• Unemploymentinsurance,old-ageinsurance• Minimum-wageregulations• Conservationanddevelopmentofnaturalresources• Restrictionsonchildlabor
– Inventedsomenewschemes:• TennesseeValleyAuthority
– NolongerwouldAmericalookasbackwardinrealmofsocialwelfareasitoncehad
V.RooseveltManagestheMoney
• Bankingchaos—immediateaction:– EmergencyBankingReliefActof1933:• InvestedPresidentwithpowertoregulatebankingtransactionsandforeignexchange• Toreopensolventbanks
• Rooseveltturnedtoradio:– Deliveredfirstof30famous“firesidechats”– Nowsafetokeepmoneyinreopenedbanks– Confidencereturned;banksunlockeddoors
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V.RooseveltManagestheMoney(cont.)
• Glass-SteagallBankingReformAct:– CreatedFederalDepositInsuranceCorporation:• Insuredindividualdepositsupto$5,000(laterraised)• Endedbankfailures,datingbackto“wildcat”daysofAndrewJackson(seeFigure32.1)
• Declininggoldreserves:• FDRorderedallprivateholdingsofgoldbesurrenderedtoTreasuryinexchangeforpapercurrency• Thentooknationoffgoldstandard• Congresscanceledgold-paymentclauseinallcontracts
Figure 32-1 p747
V.RooseveltManagestheMoney(cont.)
• Authorizedrepaymentinpapercurrency– A“managedcurrency”onitsway:• FDR's“managedcurrency”wasinflation:
– Whichhebelievedwouldrelievedebtors'burdens– Andstimulatenewproduction
• Principalinstrumentforachievinginflationwasgoldbuying
– InstructedTreasurytopurchasegoldatincreasingprices—priceofgoldincreasedfrom$21anounce(1933)to$35anounce(1934)• Apricethatheldforfourdecades
V.RooseveltManagestheMoney(cont.)
• Policydidincreaseamountofdollarsincirculation• Inflationaryresultprovokedwrathof“sound-money”criticson“baloneydollar”• GoldschemecametoendinFebruary1934,whenRooseveltreturnedtolimitedgoldstandardforinternationaltradepurposes– UnitedStatespledgedtopayforeignbills,ifrequested,ingoldatrateofoneounceofgoldforevery$35due
• Domesticcirculationofgoldcontinuedtobeprohibited– Goldcoinsbecamecollector'sitems
VI.CreatingJobsfortheJobless
• Overwhelmingunemployment:– Oneoutoffourworkersjobless• Highestlevelofunemploymentinnation'shistory• Roosevelthadnohesitancyaboutusingfederalmoneytoassistunemployed• Atsametime“primethepump”ofindustrialrecovery
VI.CreatingJobsfortheJobless(cont.)
• CivilianConservationCorps(CCC):–MostpopularofNewDeal“alphabeticalagencies”• Providedemploymentinfresh-airgovernmentcampsforaboutthreemillionyoungmen• Usefulwork—includingreforestation
– Firefighting(47liveslost),floodcontrol,swampdrainage• Recruitsrequiredtohelpparentsbysendinghomemostoftheirpay• Bothhumanandnaturalresourcesconserved
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VI.CreatingJobsfortheJobless(cont.)
– CriticsofCCC:• Minorcomplaintsof“militarizingthenation'syouth”
– Adultunemployment:• FederalEmergencyReliefAdministration(FERA):
– UnderHarryL.Hopkins– Hopkins'sagencygranted$3billiontostatesfordirectdolepaymentsorpreferablyforwagesonworkprojects
VI.CreatingJobsfortheJobless(cont.)
• Reliefforhard-pressedspecialgroups:– AgriculturalAdjustmentAct(AAA):• Mademillionsavailabletohelpfarmersmeetmortgages
– HomeOwners'LoanCorporation(HOLC):• Refinancedmortgagesonnonfarmhomes• Assistedamillionbadlypinchedhouseholds• Bailedoutmortgage-holdingbanks• Boltedloyaltiesofrelievedmiddle-classhomeownerssecurelytoDemocraticparty
VI.CreatingJobsfortheJobless(cont.)
• CivilWorksAdministration(CWA)(1933):– SetupbyRoosevelthimself– UnderdirectionofHopkinsviaFERA• Providedtemporaryjobsduringcruelwinteremergency• Tensofthousandsofjoblessemployedatleafrakingandothermake-worktasks• Schemewidelycriticizedaskindoflaborthatputpremiumonshovel-leaningslowmotion
Table 32-2 p749
VII.ADayforEveryDemagogue
• Persistenceofsufferingindicatedemergencyreliefmeasuresneeded– Notonlytobecontinued,butsupplemented– Dangersignalwasappearanceofdemagogues—notablymagnetic“microphonemessiah”:• FatherCharlesCoughlinbeganbroadcastingin1930
– Hissloganwas“SocialJustice”– Hisanti-NewDealmessageswentto40millionradiofans– Soanti-Semitic,fascistic,anddemagogicthathewassilencedin1942byecclesiasticalsuperiors
VII.ADayforEveryDemagogue(cont.)
– Newbroodofagitatorscapitalizedonpopulardiscontent:• Dr.FrancisE.Townsendpromisedeveryoneoversixty$200amonth• SenatorHueyP.Long(“Kingfish”)publicizedhis“ShareOurWealth”program– Promisedtomake“EveryManaKing”– Everyfamilywouldreceive$5,000,supposedlyatexpenseofprosperous
– FearofLongbecomingfascistdictatorendedwhenhewasshotbyanassassininLouisianain1935
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VII.ADayforEveryDemagogue(cont.)
– Demagogues(CoughlinandLong)raisedtroublingquestionsaboutlinkbetweenfascismandeconomiccrisis:
– AuthoritarianrulestrengthenedinJapan– AdolfHitleracquiredabsoluteauthorityinGermany– SomeworriedRooseveltwouldturnintodictator
• Toquietunrest,CongressauthorizedWorksProgressAdministration(WPA)in1935– Objectivewasemploymentonusefulprojects– Agencyultimatelyspentabout$11billiononthousandsofpublicbuildings,bridges,andhard-surfacedroads
VII.ADayforEveryDemagogue(cont.)
• NoteveryWPAprojectstrengthenedinfrastructure– OnecontrolledcricketsinWyoming– BuiltamonkeypeninOklahomaCity
• MostlovedWPAprograms:– FederalArtProject—hiredartiststocreatepostersandmurals
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VII.ADayforEveryDemagogue(cont.)
• CriticsclaimedWPAmeant“WeProvideAlms”• Overeightyears,nearlyninemillionpeoplegivenjobs,nothandouts:– Nourishedprecioustalent– Preservedself-respect– Fosteredcreationofmorethanamillionpiecesofart,manyofthempubliclydisplayed
VIII.NewVisibilityforWomen
– After19thAmendment,womenbegantocarvemorespaceinpoliticalandintellectuallife
– FirstLadyEleanormostvisiblewomaninRooseveltWhiteHouse
– SecretaryofLaborFrancisPerkins(1880-1965)becamefirstwomancabinetmember
– MaryMcLeodBethune(1875-1955)• DirectorofOfficeofMinorityAffairsinNationalYouthAdministration—servedashighest-rankingAfricanAmericaninRooseveltadministration
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VIII.NewVisibilityforWomen(cont.)
• Women'scontributioninsocialsciences:– Anthropology:• RuthBenedict(1887-1948)carriedonworkofhermentor,FranzBoas(1858-1942)– Bydeveloping“cultureandpersonalitymovement”in1930sand1940s
– Benedict'slandmarkwork:PatternofCulture(1934):» Establishedstudyofculturesascollectivepersonalities» Eachculture,likeeachindividual,haditsown“moreorlessconsistentpatternofthoughtandaction”
VIII.NewVisibilityforWomen(cont.)
• MargaretMead(1901-1978),studentofBenedict:– HerstudiesofadolescenceamongPacificislandpeoplesadvancedboldnewideasaboutsexuality,genderroles,andintergenerationalrelationships
– 34bookspublishedandcuratorshipatAmericanMuseumofNaturalHistory,NewYork
– Popularizedculturalanthropologyandachievedcelebritystatusrareamongsocialscientists
• PearlS.Buck(1892-1973):– IntroducedAmericanreaderstoChinesepeasantsociety– Herbestsellingnovel,TheGoodEarth(1931)earnedNobelPrizeforLiteraturein1938
– Usedherfametoadvancehumanitariancauses
IX.HelpingIndustryandLabor
• NationalRecoveryAdministration(NRA)– Mostcomplexandfar-reachingofNewDealprojects• Combineimmediatereliefwithlong-rangerecoveryandreform• Triple-barreled:designedtoassistindustry,labor,andunemployed– Individualindustrieswouldworkoutcodesof“faircompetition”underwhichhoursoflaborwouldbereduced
– Tospreademploymenttomorepeople– Aceilingplacedonmaximumhoursoflabor– Afloorplacedunderwagestoestablishminimumlevels
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IX.HelpingIndustryandLabor(cont.)
– Laborgrantedadditionalbenefits:• Workersformallyguaranteedrighttoorganize• Andbargaincollectivelythroughrepresentativesoftheirownchoosing—notagentsofcompany'schoosing• “Yellowdog,”orantiunion,contractexpresslyforbidden• Certainrestrictionsplacedonuseofchildlabor
IX.HelpingIndustryandLabor(cont.)
• NRA's“faircompetition”codes:– Calledforself-denialbymanagementandlabor– Patriotismarousedbymassmeetingsandparades
– BlueeagledesignedassymbolofNRA– Forbrieftime,anupswinginbusinessactivity
IX.HelpingIndustryandLabor(cont.)
– ProblemsofNRA:• Toomuchself-sacrificeexpectedoflabor,industry,andpublic• “Ageofchiselry”asunscrupulousbusinessmen(“chiselers”)displayedblueeaglebutsecretlyviolatedcodes• SupremeCourtkilledNRAinfamed“sickchicken”case
– InSchechter(1935)Courtruled:– Congresscouldnot“delegatelegislativepowers”toexecutive– Declaredcongressionalcontrolofinterstatecommercecouldnotapplytoalocalbusiness
IX.HelpingIndustryandLabor(cont.)
– PublicWorksAdministration(PWA):• LikeNRA,intendedforindustrialrecoveryandunemploymentrelief• HeadedbySecretaryofInterior,HaroldL.Ickes• $4billionspenton34,000projects:
– Publicbuildings,highways,andparkways– GrandCouleeDamonColumbiaRiver(Washington):
» Irrigatedmillionsofacresofnewfarmland» CreatedmoreelectricalpowerthanentireTennesseeValleyAuthority
» TransformedPacificNorthwestwithabundantwaterandpower
IX.HelpingIndustryandLabor(cont.)
– Liquorindustry:• Imminentrepealofprohibition:
– Affordedopportunitytoraisefederalrevenue– Andprovideemployment
• HundredDaysCongress– Legalizedlightwineandbeerwithalcoholiccontentofnomorethan3.2%byweight
– Leviedtaxof$5oneverybarrelsomanufactured• ProhibitionrepealedbyTwenty-firstAmendmentin1933(seeAppendix)– Saloondoorsswungopen
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X.PayingFarmersNottoFarm
– Sufferingfarmers:• Sincewar-boomdaysof1918,sufferedlowpricesandoverproduction• Depression—innumerablemortgagesforeclosed
– AgriculturalAdjustmentAdministration(AAA):• Through“artificialscarcity”establish“parityprices”forbasiccommodities• “Parity”aspricesetforaproductthatgaveitsamevalue,inpurchasingpower,thatitenjoyedfrom1909-1914
X.PayingFarmersNottoFarm(cont.)
• AAAwouldeliminateprice-depressingsurplusesbypayinggrowerstoreducecropacreage• Millionsraisedbytaxingprocessorsoffarmproducts,whointurnwouldshiftburdentoconsumers• “Subsidizedscarcity”wouldraisefarmincome• Payingfarmersnottofarmincreasedunemployment• SupremeCourtkilledActin1936• CongresshastenedtopassSoilConservationandDomesticAllotmentActof1936– Farmerspaidtoplantsoil-conservingcropsorletlandliefallow
X.PayingFarmersNottoFarm(cont.)
• EmphasisonconservationapprovedbySupremeCourt– SecondAgriculturalAdjustmentActof1938:• Continuedconservationpayments• Ifgrowersobservedacreagerestrictionsonspecifiedcommodities,theywouldbeeligibleforparitypayments• Goaltogivefarmersnotonlyfairerpricebutmoresubstantialshareofnationalincomepartiallyachieved
XI.DustBowlsandBlackBlizzards
• Naturehelpedprovideunplannedscarcity:– DustBowl:• Droughtandwindtriggeredduststorms,buttheywerenotonlyculprits:• Farmersboughtcountlessacresofmarginallandundercultivation• Dry-farmingtechniquesandmechanizationhadrevolutionizedGreatPlainsagriculture• Methodsleftpowderytopsoiltobesweptawayatnature'swhim(seeMap32.1)
XI.DustBowlsandBlackBlizzards (cont.)
• Tensofthousandsofrefugeesfledruinedfarms– ManysettledinSanJoaquinValleyofCalifornia– Yettransitionwascruel– DismalstoryofthesehumantumbleweedsrealisticallyportrayedbyJohnSteinbeck,TheGrapesofWrath(1939)
– Effortstorelievetheirburdens:• Frazier-LemkeFarmBankruptcyAct(1934):
– Madepossiblesuspensionofmortgageforeclosuresforfiveyears—voidednextyearbySupremeCourt
– Revisedlaw,limitinggraceperiodtothreeyears,unanimouslyupheld
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XI.DustBowlsandBlackBlizzards(cont.)
• ResettlementAdministration(1935):– Chargedwithremovingnear-farmlessfarmerstobetterland– 200millionyoungtreessuccessfullyplantedonbareprairiesbyyoungmenofCivilianConservationCorps
• NativeAmericansfeltfar-reachinghandofNewDealreform:– CommissionerofIndianAffairsJohnColliersoughttoreverseforced-assimilationpolicesinplacesinceDawesActof1887(seeChap.26)
– CollierpromotedIndianReorganizationActof1934» “IndianNewDeal”encouragedtribestoestablishlocalself-governmentandpreservenativecraftsandtraditions
XI.DustBowlsandBlackBlizzards(cont.)
– NewlawhelpedstoplossofIndianlandsand– Revivedtribes'interestinidentityandculture– NotallNativeAmericansapplaudedit:• Somedenounceditas“back-to-the-blanket”measurethatwouldmakemuseumpiecesoutofIndians• 77tribesrefusedtoorganizeunderit,thoughnearly200othersdidestablishtribalgovernments
Map 32-1 p756
XII.BattlingBankersandBigBusiness– NewDealersdeterminedtoreform“moneychangers”• WhohadplayedfastandloosewithgullibleinvestorsbeforeWallStreetcrashof1929
– “TruthinSecuritiesAct”(FederalSecuritiesAct):• Requiredpromoterstotransmittoinvestorssworninformationregardingsoundnessofstocksandbonds
– SecuritiesandExchangeCommission(SEC)1934:• Watchdogagencytoprotectpublicagainstfraud,deception,andinsidemanipulation– Stockmarketswouldoperatemoreastradingmartsandlessasgamblingcasinos
XII.BattlingBankersandBigBusiness(cont.)
• NewDealersdirectedfireatpublicutilityholdingcompanies:– Onesuchsupercorporationcollapsedin1932whenSamuelInsull'sfinancialempirecrashed
– PublicUtilityHoldingCompanyActof1935:• “Deathsentence”tosuchbloatedgrowth,exceptwhereitmightbedeemedeconomicallyneedful
XIII.TheTVAHarnessestheTennessee
– Electric-powerindustryattractedireofNewDealreformersforchargingexcessiverates:• Anindustrythatreacheddirectlyintopocketbooksofmillionsofcustomersforvitallyneededservices• TennesseeRiverprovidedNewDealerswithopportunity:– Bydevelopinghydroelectricpotentialofentirearea,Washingtoncouldcombineimmediateadvantage:» Employmentofthousandsofpeopletowork» Andlong-termprojectforreformingpowermonopoly
XIII.TheTVAHarnessestheTennessee(cont.)
• TennesseeValleyAuthority(TVA)(1933)• VisionofSenatorGeorgeW.NorrisofNebraska• Fromstandpointof“plannedeconomy,”byfarmostrevolutionaryofallNewDealschemes• Determinedtodiscoverpreciselyhowmuchitcosttoproductanddistributeelectricity• Withthat“yardstick,”fairnessofrateschargedbyprivatecompaniescouldbejudged• NewDealerspointedwithpridetoamazingachievementsofTVA
Map 32-2 p757
XIII.TheTVAHarnessestheTennessee(cont.)
– Benefitstoarea:• Fullemployment• Cheapelectricpower(seeFigure32.2)• Low-costhousing• Abundantcheapnitrates• Restorationoferodedsoil• Reforestation• Improvednavigation• Floodcontrol
XIII.TheTVAHarnessestheTennessee(cont.)
• NewDealersagitatedforparallelenterprisesinvalleysofColumbia,Colorado,andMissouriRivers• Conservativereactionagainst“socialistic”NewDealconfinedTVA'sbrandoffederallyguidedresourcemanagementandcomprehensiveregionaldevelopmenttoTennesseeValley(seeMap32.2)
Figure 32-2 p758
XIV.HousingandSocialSecurity
• NewDealhousingpolicies:– FederalHousingAdministration(1934):• Buildingindustrystimulatedbysmallloanstohouse-holders:– Forimprovingtheirdwellings– Forcompletingnewones
• SopopularitoutlastedageofRoosevelt• Congressbolsteredprogramin1937byauthorizingUnitedStatesHousingAuthority(USHA):
XIV.HousingandSocialSecurity(cont.)
– Agencydesignedtolendmoneytostatesorcommunitiesforlow-costconstruction
– 650,000unitsstarted,tragicallyshortofneeds– Collidedwithoppositionfromrealestatepromoters,builders,landlords,andanti-NewDealers
– Stillslumsareasceasedgrowingandshrank
• SocialSecurityAct1935:– Unemploymentinsuranceandold-agepensions– Oneofmostcomplicatedandfar-reachinglawsevertopassCongress
XIV.HousingandSocialSecurity(cont.)
• Providedforfederal-stateunemploymentinsurancetocushionfuturedepressions• Providedsecurityforoldage:
– SpecifiedcategoriesofretiredworkerswouldreceiveregularpaymentsfromWashington
– Paymentsrangedfrom$10to$85amonth(raisedperiodically)– Financedbypayrolltaxonemployersandemployees
• Provisionsmadeforblind,physicallyhandicapped,delinquentchildrenandotherdependents
XIV.HousingandSocialSecurity(cont.)
• Republicanoppositionbitter:– “SocialSecurity”mustbebuiltuponacultofwork,nota“cultofleisure,”insistedHoover
– GOPnationalchairmanfalselychargedthateveryworkerwouldhavetowearametaldogtagforlife
• SocialSecurityinspiredbyindustrialnationsofEurope• Inurbanizedeconomy,governmentnowrecognizingitsresponsibilityforwelfareofcitizens• By1939,over45millioneligibleforSocialSecuritybenefits
XIV.HousingandSocialSecurity(cont.)
• Infuture,othercategoriesadded:– Farmanddomesticworkers
» Millionsofpoormenandwomeninitiallyexcluded– IncontrasttoEurope,wherewelfareprogramswereuniversal:» Americanworkershadtobeemployed» Andincertainjobstogetcoverage
XV.ANewDealforLabor
–WagnerAct:• NationalLaborRelationsAct(1935)• Namedaftersponsor,SenatorRobertF.Wagner• CreatedpowerfulnewNationalLaborRelationsBoard:
– Administrativepurposes– Reassertedrightoflabortoengageinself-organization– Tobargaincollectivelythroughrepresentativesofitsownchoice– ConsideredMagnaCartaoflabor,WagnerActprovedtobemajormilestoneforAmericanworkers
XV.ANewDealforLabor(cont.)
– UndersympatheticNationalLaborRelationsBoard:• Unskilledworkersbegantoorganizeintoeffectiveunions• LeaderwasJohnL.Lewis,bossofUnitedMineWorkers
– FormedCommitteeforIndustrialOrganization(CIO)withinskilled-craftAmericanFederationofLabor(AFL)
– In1936,AFLsuspendedCIO– CIOthenmovedintoautoindustry:
» Resortedtosit-downstrike» RefusedtoleavefactorybuildingofGeneralMotorsatFlint,Michigan
» Thuspreventedimportationofstrikebreakers
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XV.ANewDealforLabor(cont.)
– Conservativerespectersofprivatepropertyscandalized– VictorywhenGeneralMotorsrecognizedCIOassolebargainingagencyforitsemployees
• Unskilledworkerspressedadvantage:» USSteelCompanyavertedstrikewhenitgrantedrightsofunionizationtoitsCIO-organizedemployees
» “Littlesteel”companiesfoughtbacksavagely» 1937:MemorialDaymassacreatRepublicSteelCompanyplantinSouthChicago
» Afterpoliceopenedfire,areastrewnwithseveralscoredeadandwounded
XV.ANewDealforLabor(cont.)
• FairLaborStandardsAct1938:– AlsoknownasWagesandHoursBill• Setminimum-wagesandmaximum-hoursforindustriesinvolvedininterstatecommerce– Goals:40centsanhour(laterraised)and40-hourweek
• Laborbychildrenundersixteen(undereighteenifoccupationdangerous)forbidden• Reformsbitterlyopposedbyindustrialists,especiallytextiles• Excludedagricultural,service,anddomesticworkers
– Meantmanyblacks,MexicanAmericans,andwomennotbenefitfromact
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XV.ANewDealforLabor(cont.)
• Laborunionizationthrived(seeFigure32.3)– Presidentreceivedvaluablesupportatballot-boxfromlaborleadersandappreciativeworkers
– CommitteeforIndustrialOrganizationformallyreconstitutedasCongressofIndustrialOrganizations(newCIO)underJohnL.Lewis• By1940claimedmembershipoffourmillion,including200,000blacks• JurisdictionalfeudingcontinuedwithAFL:laborseemedmorebentoncostlycivilwarthanonwarwithmanagement
Figure 32-3 p760
XVI.LandonChallenges“theChamp”
– Upcomingelectionof1936:• DemocratsrenominatedRooseveltonplatformsquarelyendorsingNewDeal• Republicanshard-pressedtofindacandidate
– SettledonhomespungovernorofKansas,AlfredM.Landon– LandonamoderatewhoacceptedsomeNewDealreformsbutnotpopularSocialSecurityAct
– RepublicanscondemnedNewDealofFranklin“Deficit”Rooseveltforitsradicalism,experimentation,confusion,and“frightfulwaste”
– LandonbackedbyHoover(calledfor“holycrusadeforliberty”)andAmericanLibertyLeagueofwealthyconservatives
XVI.LandonChallenges“theChamp”(cont.)
• Rooseveltdenounced“economicroyalists”– Electionreturns:• LandslideoverwhelmedLandon,whoonlywontwostates—MaineandVermont• Popularvote:27,752,869to16,674,665• Electoralcount523to8–mostlopsidedin116years• Democratsnowclaimedmorethantwo-thirdsofseatsinHouseandsameproportioninSenate
XVI.LandonChallenges“theChamp(cont.)
– Battleof1936:• MostbittersinceBryan'sdefeatin1896• PartiallyboreoutRepublicanchargesofclasswarfare
– Needyeconomicgroupslinedupagainstso-calledgreedyeconomicgroups
• CIOcontributedgenerouslytoFDR'scampaign• Manyleft-wingersturnedtoRoosevelt,asthird-partyprotestvotedeclinedsharply• BlacksswitchedtoDemocraticparty
XVILandonChallenges“theChamp(cont.)
• Rooseveltwonbecauseheappealedto“forgottenman,”whomheneverforgot– Somesupportersonlypocketbook-deep:“reliefers”– Rooseveltforgedpowerfulandenduringcoalitionof
» Southerners,» Blacks,urbanites,andpoor» Marshaledsupportof“NewImmigrants”—mostlyCatholicsandJews—whohadcomeofagepolitically
» In1920soneoutofevery25federaljudgeshipswenttoaCatholic» RooseveltappointedCatholicstooneoutofeveryfour
XVII.NineOldMenontheBench
– RoosevelttookpresidentialoathonJanuary20,1937,insteadoftraditionalMarch4:• TwentiethAmendmentratifiedin1933(seeAppendix)
– SweptawaypostelectionlameducksessionofCongress– Shortenedbysixweeksawkwardperiodbeforeinauguration
• RooseveltinterpretedreelectionasmandatetocontinueNewDeal:– Tohim,SupremeCourtjudgeswerestumblingblocks– InninemajorcasesinvolvingNewDeal,theyhadthwartedNewDealreformsseventimes
XVII.NineOldMenontheBench(cont.)
– Courtultra-conservative;sixofninejudgesover70• RoosevelthadnotappointedanyonetoCourtinfirstterm• Somejusticesheldonprimarilytocurb“socialistic”NewDeal• FDRbelievedvoters(presidentialelectionsof1932and1936andcongressionalelectionsof1934)hadclearlydemonstratedsupportforNewDeal• ToFDR,Courtobstructingdemocracy
XVII.NineOldMenontheBench(cont.)
– Roosevelthitonschemetofixproblem:• Provedtobeoneofhismostcostlypoliticalmisjudgments• AskedCongressforlegislationtopermithimtoaddanewjusticetoSupremeCourtforeveryoneoverseventywhowouldnotretire• Maximummembershipwouldbefifteen• HeallegedCourtfarbehindinitswork—whichprovedtobefalseandbroughtaccusationsofdishonesty• HeadstrongFDRnotrealizethatCourt,inpopularthinking,hadbecomesacredcow
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XVIII.TheCourtChangesCourse
– CongressandnationconvulsedoverCourt-packingplan:• FDRvilifiedforattemptingtobreakdelicatechecksandbalancesamongthreebranches• Accusedofgroominghimselfasdictatorbytryingtobrowbeatjudiciary• ToRepublicansandsomeDemocrats,basiclibertiesseemedinjeopardy• Courtsawaxhangingoveritshead:
– JusticeOwenJ.Roberts,aconservative,begantovotewithliberalcolleagues
XVIII.TheCourtChangesCourse(cont.)
• In1937,Courtupheldprincipleofstateminimumwageforwomen,reversingits1936decision• Insucceedingdecisions,CourtbecamemoresympathetictoNewDeal:– UpheldNationalLaborRelationsActandSocialSecurityAct
• Roosevelt's“Courtpacking”furtherunderminedwhenCongressvotedfullpayforjusticesover70whoretired:– Oneofoldestconservativesresigned– ReplacedbyNewDealer,JusticeHugoBlack
XVIII.TheCourtChangesCourse(cont.)
– Congressfinallypassedcourtreformbill:• Watered-downversionappliedonlytolowercourts• RooseveltsufferedfirstmajorlegislativedefeatathandsofhisownpartyinCongress• EventuallyCourtbecamemarkedlymorefriendlytoNewDealreforms• Successionofdeathsandresignationsenabledhimtomakenineappointmentstotribunal—morethananyofhispredecessorssinceGeorgeWashington• Clock“unpacked”Court
XVIII.TheCourtChangesCourse(cont.)
– Yetinasense,FDRlostbothCourtbattleandwar:• SoarousedconservativesofbothpartiesinCongressthatfewNewDealreformspassedafter1937,yearoffightto“pack”bench• Withthiscatastrophicmiscalculation,hesquanderedmuchofgoodwillthatcarriedhimtovictoryin1936election
XIX.TwilightoftheNewDeal
– Roosevelt'sfirsttermdidnotbanishdepression:• Unemploymentpersistedin1936atabout15%,downfrom25%of1933,butstillhigh(seeFigure32.4)• Recoveryhadbeenmodest• Thenin1937economytookanothersharpdownturn:
– Surprisingseveredepression-within-thedepressionthatcriticsdubbed“Rooseveltrecession”
– Governmentpoliciescausednosedive:» JustasnewSocialSecuritytaxesbegantotakeeffect» FDRcutgovernmentspendingtotrytobalancebudget
Figure 32-4 p763
XIX.TwilightoftheNewDeal (cont.)
– RooseveltthendeliberatelyembracedideasofBritisheconomistJohnMaynardKeynes:• FDRannouncedboldprogramtostimulateeconomybyplanneddeficitspending• Keynesianism—useofgovernmentspendingandfiscalpolicyto“primethepump”ofeconomyandencourageconsumerspending• Policybecameneweconomicorthodoxyandremainedsofordecades
XIX.TwilightoftheNewDeal (cont.)
• RooseveltcontinuedtopushremainingreformmeasuresofNewDeal:
• UrgedCongresstoauthorizesweepingreorganizationofnationaladministrationininterestsofefficiency• Notdone,andthusanotherdefeat• Twoyearslater,CongresspartiallyrelentedandpassedReorganizationAct:– Gavepresidentsomepowersforadministrativereforms,includingkeynewExecutiveOfficeinWhiteHouse
XIX.TwilightoftheNewDeal (cont.)
– HatchAct1939:• Barredfederalofficials,excepthighestpolicy-makingofficers,fromactivepoliticalcampaigningandsoliciting• Forbadeuseofgovernmentfundsforpoliticalpurposes• Forbadecollectionofcampaigncontributionsfrompeoplereceivingreliefpayments
– HatchActbroadenedin1940:• Placedlimitsoncampaigncontributionsandexpenditures– Aftersomefoundwaysaroundit,legislationproveddisappointing
XIX.TwilightoftheNewDeal (cont.)
– By1938,NewDeallostitsmomentum:• Rooseveltcouldfindfewnewreforms• Incongressionalelectionsof1938,Republicansscoredvictoriesbutfailedtogaincontrolineitherhouse• Foreignaffairsincreasinglydominatedpublicdebate
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XX.NewDealorRawDeal?– FoesofNewDealcondemned:• Allegedwaste,incompetence,confusion,contradictions,andcross-purposes• Aswellasgraftinalphabeticalagencies—“alphabetsoup,”sneeredAlSmith• Deploredemploymentof“crackpot”collegeprofessors,leftist“pinkos,”andoutrightCommunists• ClaimedNewDealerstryingtomakeU.S.A.overinBolshevik-Marxistimageunder“Rooseveltski”
XX.NewDealorRawDeal? (cont.)
• RooseveltaccusedofbeingJewish(“Rosenfield”)andtappingtoomanyJewishleftists(“TheJewDeal”)forhis“DrainTrust”• Businesspeopleshockedbyleap-before-you-look,try-anything-oncespirit• “Bureaucraticmeddling”and“regimentation”werebittercomplaintsofanti-NewDealers• Federalgovernment,withallitsemployees,becameincomparablylargestsinglebusinessincountry
XX.NewDealorRawDeal? (cont.)
• Promisesofbudgetbalancingflewoutwindow– Nationaldebtin1932=$19,487,000,000– Skyrocketedby1939to$40,440,000,000
• Americabecoming“handoutstate;”U.S.stoodfor“unlimitedspending”• Businessmenbitter:
– AccusedNewDealoffomentingclassstrife– Conservativesinsistedlaborersandfarmersbeingpampered– Businessmenwantedgovernmentofftheirbacks– Privateenterprisebeingstifledby“plannedeconomy,”“plannedbankruptcy”and“creepingsocialism”
XX.NewDealorRawDeal? (cont.)
• States'rightsignored,whilegovernmentcompetedinbusinesswithitsowncitizens,under“dictatorshipofdo-gooders”
– Roosevelt'sleadershipdenounced:• “One-mansupergovernment”• HeavyfireagainstattemptstobrowbeatSupremeCourtandcreate“dummyCongress”– Triedto“purge”CongressofDemocratswhowouldnotmarchinlockstepwithhim
– Threesenatorswhomhepubliclyopposedallreelected
XX.NewDealorRawDeal? (cont.)
• MostdamningindictmentofNewDeal:– Failedtocuredepression– Floatinginseaofredink,ithadonlyadministeredaspirin,sedatives,andBand-Aids• $20billionpouredoutinsixyearsofdeficitspendingandlending– Gapnotclosedbetweenproductionandconsumption– MorefarmsurplusunderRooseveltthanunderHoover– Millionsstillunemployedin1939aftersixyearsofdrain,strain,andpain
XXI.FDR'sBalanceSheet– NewDealersstaunchlydefendedrecord:• Somewaste,butpointedoutthatrelief—noteconomy—hadbeenprimaryobjective• Somegraft,butarguedithadbeentrivialinviewofimmensesumsspentandobviousneedforhaste• NewDealrelievedworstofcrisisin1933• Promotedphilosophyof“balancingthehumanbudget”• Washingtonregimetobeused,notfeared• CollapseofAmerica'seconomicsystemaverted• Fairerdistributionofnationalincomeachieved• Citizensabletoregainandretainself-respect
XXI.FDR'sBalanceSheet(cont.)
• Thoughhatedbybusinesstycoons,FDRshouldhavebeentheirpatronsaint– Deflectedpopularresentmentsagainstbusiness– MayhavesavedAmericansystemoffreeenterprise– Hisquarrelnotwithcapitalismbutwithcapitalists– PurgedAmericancapitalismofsomeofitsworstabuses– Headedoffradicalswingtoleft– ClaimedthatNewDealdidnotbankruptUnitedStates– MassivenationaldebtcausedbyWWII,notNewDeal
» Nationaldebt=$40billionin1939;$258billionin1945
XXI.FDR'sBalanceSheet(cont.)
• FDRprovidedboldreformwithoutbloodyrevolution• Upbraidedbyleft-wingradicalsfornotgoingfarenough,byright-wingradicalsforgoingtoofar– Choosingmiddleroad,RoosevelthasbeencalledgreatestAmericanconservativesinceHamilton» Hamiltonianinespousalofbiggovernment,butJeffersonianinconcernfor“forgottenman”
– Demonstratingvalueofpresidentialleadership,heexercisedpowertorelieveerosionofnation'sgreatestresource—itspeople
– HelpedpreservedemocracyinAmericaatatimewhendemocraciesabroaddisappearingtodictatorship
XXI.FDR'sBalanceSheet(cont.)
• Unwittinglygirdednationforitspartintitanicwarthatloomedonhorizon—awarinwhichdemocracytheworldoverwouldbeatstake
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