The Great Depression: The New Deal (1933-39)

Figure 1.--Historical treatment of the Depression is primarily about the impact on adults--especially unemployed men. Often lost in the historical discussion is the impact on the children. These are the children of migrant laborers in 1939. The mother was 32 years old and had eleven children. Many New Deal programs focused on children. The Federal Government had never before focused on children, with the exception of the Freedman's Bureau and child labor laws. Source: Library of Congress LC-USF34-051187-E

Roosevelt's program was called the New Deal and the many programs initaited help change the face of the United States: Social Security, the Tennessee Valley Authority, rural electrification, the Works Progress Administration (WPA), protection for union organizers, and many others. The conservative-dominated Federal Courts struck down WPA, but many New Deal programs endure to this day. The new president undertook immediate actions to initiate his New Deal. To halt depositor panics, he closed the banks temporarily. Then he worked with a special session of Congress during the first "100 days" to pass recovery legislation which set up alphabet agencies such as (Agricultural Adjustment Administration (AAA) to support farm prices and the (Civilian Conservation Corps (CCC) to employ young men. Other agencies assisted business and labor, insured bank deposits, regulated the stock market, subsidized home and farm mortgage payments, and aided the unemployed. These measures revived confidence in the economy. Banks reopened and direct relief saved millions from starvation. But the New Deal measures also involved government directly in areas of social and economic life as never before and resulted in greatly increased spending and unbalanced budgets which led to criticisms of Roosevelt's programs. However, the nation-at-large supported Roosevelt, electing additional Democrats to state legislatures and governorships in the mid-term elections. Another flurry of New Deal legislation followed in 1935 including the establishment of the Works Projects Administration (WPA) which provided jobs not only for laborers but also artists, writers, musicians, and authors, and the Social Security Act which provided unemployment compensation and a program of old-age and survivors' benefits. Roosevelt managed to achieve needed social legislation in a still very conservative country. His genius was in pursuing "nobel objectives within the tactics of the feasible". [Freidel]

Overview

President Roosevelt's program to fight the Depression was collectively called the New Deal, based on his call for a newd deal for the American people. The many programs initaited help change the face of the United States: Social Security, the Tennessee Valley Authority, rural electrification, the Works Progress Administration (WPA), protection for union organizers, and many others. President Roosevelt also restoted a degree of optimism and impression that the Federal Government was attempting to deal with the Depression. This is often forgotten, but without this the American people could have turned to more radical approaches that could have threatened the foundation of American democracy. Roosevelt also managed to achieve needed social change in a still very conservative country. His genius was in pursuing "nobel objectives within the tactics of the feasible". [Freidel] This was done by pursuing issues that could be addressed and leaving other issues, such as Civil Rights which would have split the new Democratic coalition, for the future. The New Deal is a subject of condiderable scholarly debate. We have heard liberal politicans claim that the New Deal was a unmitigated success. Any non-idelogical assessment would conclude that this simply is not true. The New Deal had many very positive achievements. It stopped the economic spiral downward. Through the stepps taken in the First Hundred Days, it resurected the financial system (Bank Holiday) and stopped defltion (taking America off the gold standard). It expanded needed relief programs and moved in many social areas such as Social Security. What it did not do, however, was end the Depression. The Depression measured in high unemployment was still continuing in America at the end of the decade when war orders from Europe and domestic defense spending finally ended the Depression. This and the fact that only in America did the Depression last 10 years. Both Britain and France dealt with the Depression in a much shorter period. Authors with ideological minsets tend to ignore either the successes or failures of the New Deal are either poorly informed or dishonest.

Presidential Election (1932)

America less than a year after Commerce Secretary Herbert Hoover's impressive victory was struck by the Wall Street Crash (1929). President Hoover's misjudged the seriousness and nature of the economic decline. He also showed an unwillingness to act decisevely. As a result America lapsed into the Great Depression. The Republicans stuck with President Hoover, but withoyt enthusiam--in sharp contrast to 1928. The economic devestation virtusally preordained that the Democrats would win the 1932 election. The question was only who would win the Democratic nomination. Following his reelection as governor in 1930, Roosevelt began to campaign for the presidency. While the economic depression damaged Hoover and the Republicans, Roosevelt's bold efforts to combat it in New York enhanced his reputation. The Democrats met in Chicago. They nominated Roosevelt on the first ballot. Roosevelt broke with tradition and flew to Chicago to accept the nomination in person. The Republicans renominated President Hoover. Govenor Roosevelt campaigned energetically calling for government intervention in the economy to provide relief, recovery and reform. President Hoover's campaign was lackluster. This was in parrt areflection of his personality, but the deepening economic crisis was also a factor. Despite the situation, President Hoover continued to resist massive Federal envolvement in the ecoinomy. Roosevelt's activist approach and personal charm helped to defeat Hoover in November 1932 by 7 million votes. The land-slide Democratic election victory resulted in a major realignment of American politics. A great deal has been written about President Roosevelt's New Deal. At first historians were mosly lauditory, but in recent years some economits have claimed the New Deal prolonhed the Depression. That is difficult to assess. What many New Deal critics fail to pappreciate is how bad the econonomic situation was when President Roosevelt took office. Tge social fabric of the nation was fraying. The danger that more radical figures might have gained influence if bold action had not been taken.

President Roosevelt

Faced with the enormity of the national crisis, he showed as Govenor of New York that he was prepared to experiment with social legislation more than any other president in American history. He had. however, some very conservative advisors who stressed the importance of reducing Federal spending. It was unclear just what the new president was going to do. And the President probably was not entirely sure himself. The New Deal was the creation of President Roosevelt.

Impending Crisis (November 1932-March 1933)

Roosevelt was elected in a land slide (November 8, 1932). The Depression worsened after the election. Four months separated the election and Roosevelt's inaguration. Roosevelt and Hoover met to discuss European debt repayment (November 22). There was virtually no cooperation between the two. Roosevelt was nearly assasinated in Miami February 15, 1933). The most serious problem was the virtual collapse of the country's banking system. On the day that Roosevelt was inagurated, the govenors of Illinois and New York closed their banks (March 4).

First Hundred Days (March 4-July 16, 1933)

The new president undertook immediate actions to address the most pressing priblems and rally the nation. The idea was to restore confidence and jump-start a faltering economy with emergency action. To halt depositor panics, he closed the banks temporarily. Then he worked with a special session of Congress during the first "100 days" to pass recovery legislation. It was the most productive 100 days in Congressionl history. The Congress was willing to follow the President's lead as few times in history. The result was the alphabet agencies, some of which continue to play major roles in American life. The Agricultural Adjustment Administration (AAA) was created to support farm prices. The (Civilian Conservation Corps (CCC) employed young men. The Federal Emergency Relief Administration (FERA) was created to deal with the the emergency needs of those most severely affected by the Repression. The Home Owners Loan Corp. was created to help avoid evictions and make new home mortgages possible. The Public Works Administraion (PWA) was established to create jobs for needed public construction projects. The Securities and Exchange Commission (SEC) was created to regulate the stock market. Wall Street strenuously resisted te bill creating the SEC. The fight was led by the omperious President of the New York Stock Exchange, Richard Whitney. A few years later, Whitney was arresed when his investment company collapsed. He was found to have been looting the accounts of clients and convocted of embezzlement, receiving a prison sentence. Other New Seal agencies were created to assist business and labor, insure bank deposits, subsidize home and farm mortgage payments, and assist the unemployed.

Fireside Chats

The Great Depression of the 1930s was the worst economic slump ever to affect the United States. A new era of the American presidency was initated on Sunday evening, March 12, 1933. Most Americans sat down after dinner in their living rooms to listen to the newly inagurated president. Most were worried. The Depression was rapidly paralizing the country and the Government seemed unable to take effective action. With all this gloom, a calm, reassuring voice came through the radio exuding confidence in the future. President Roosevelt explained in understandable terms just how the Depression had come about and what he planned to do to get the country out of the Depression. The radio seems almost made for President Roosevelt. It offered the ability to speak directly to the whole country with out the complications of visual images. The fireside chats were a revolution in communication and in many ways profoundly change the office. The presideny was a much more formal office before FDR. The fireside chats seem very casual and informal. They were of course swrewdly calculated. Primarily previous presidents communicated with the public through the press. Many important newspapers, however, in the 1930s were oriented toward the Republicans. Homey, "down-to-earth" language was carefully adopted so that the major issues of the day could be explained to the proverbial "common man". FDR had a wonderful feel for the power of words and phrasing. Terms like "lend lease" and the "arsnal of democracy" were used in the fireside chats to help win public acceptance of the administration's policies. Most of the fireside chats were dilivered from the White House, but a few were made at Hyde Park as well. They were carefully times. May were on Sunday knowing that the whole family would be home. Almost always they were in the evening, timed to catch the family after they had dinner and were gathering around the radio in the living room to listen to the evening programs. To many it was almost as if they were inviting the President into their living room for a personal chat. No other president had ever attempted talked to the average voter in this way. And none had the voice that the president possessed.

Immediate Impact

These measures revived confidence in the economy. The Bank Holiday saved the financial sydtem. Banks reopened and the savings of millions of Americans were protected. Direct relief saved millions from starvation.

Government Role

The New Deal measures involved government directly in economic areas that had never before been contemplated. Thev National Recovery Act ivolved steps toward a planned economy. The Works Progress Act invplved the Government into virtuly every area of the economy. Jobs were found for virtually every area of employment. There was also major steps made in Government social programs. The Tenessee Valley Authority sought to remake the physical ans social envirmoent of an entire area. These and other New Deal programs resulted in greatly increased spending and unbalanced budgets. This led to increasingly criticisms of Roosevelt's programs. He became, as a result, one ofthe most contriversial president's in American history. Before the New Deal, the American people had very very limited expectations. After the New Deal, Americans began expecting much more from the Federal Government. Each of the New Deal programs need to be evaluated on their own merits. Some such as the REA and CCC were clearly beneficial. Other agencies are more controversial. Many social reforms such as Social Security were clearly needed. Few will deny that greatly required relief programs were needed for those in need. And Government refulation of banks and the security indistry was clearly involved. But one question is to often ignored by liberal historians for which the New Deal is a virtual icon. Did the New Deal help end the Depression or did it actually prolong it. Often ignored is the fact that the Depression in other countries such as England and France, although the continuing Depression in Aneruca was a drag on other economies. New Deal defenders might argue that conservative and business interests were oposed to basic changes and unsettled by the more invasive government role. Support for labor in particular required adjustment on the part of industry. Some may argue that the oponets of the New Deal attemoted to sabatoge it. This is rather a streach because it would mean financial sames to themselves. But it surely would have affected the invesrment climate. New Deal critics argue that Government spending and defecit spending absorbed available credit and thus crowded out or made it more difficult for the private sector to recover. This is a very difficult issue which is still a matter of economic discussion.

The First Lady

Elenor Roosevelt was involved in the political process more than any other First Lady in American history. To a large degree this was because President Roosevelt was sevely handicapped and could not walk. He did not want this to be widely known and thus his political appearances had be carefully coreographed and were thus limited. Elenor was also the soul of the New Deal. She was deeply committed to progressive reforms. Many of these reforms became an important part of the New Deal, but many especially Civil Rights were not, primarily because the President did not believe that they were politically feasible.

Children

Children benefitted directly and indidirectly from many New Deal programs. The greatest benefit was the jobs provided by New Deal programs, allowing parents, usually men, to adequately support their family. Millions of malnourished school children benefitted by the WPA school lunch program. WPA provided 0.5 million lunches daily in 10,000 schools located throughout the country. Many WPA programs included nursery schools for pre-school children so their parents could work. Mrs. Roosevelt was especially interested in issues involving young people. Her lobbying efforts and advocacy helped to establish the National Youth Administration (NYA--1935). Youth benefitted from the Civilian Conservation Corps (CCC--1933). The CCC was for boys who had finished schoola nd couldn't find jobs. They worked in national parts and forests throughout the country. They were lodged in camps and provided good food and medical care as well as a small stipend. Other agencies helping children and youth included: the Federal Emergency Relief Administration (FERA--1934), the National Recovery Act (NRA--1934), and the Fair Labor Standards Act (1938).

Political Trends

The nation-at-large, despite the controversies surrounding the New Deal, supported Roosevelt, electing additional Democrats to state legislatures and governorships in the mid-term elections. Fresident Roosevelt forged a new political coalition in the Unites States. The South had traditional voted strongly Democratic. The Democrats had also traditionally done well in the big Northeastern cities dominated by political machines organized around immigrantoften Catholic ethnic minorities. Roosevelt added to this base the large numbers of individuals adversely affected by the Dpression, organized labor, Blacks, Jews, and farmers. This coalition was to dominate American politics until the Republicans began to carry Southern states in the wake of the Civil Rights movement during the 1960s.

More New Deal Agencies

An important part of the First Hundred Days was expanding relief (money and food) programs to the unemployed and other afflicted groups. Relief was, however, a stop gap measure to allow Americans to survive the Depression until jobs once more became available. The Depression persisted. Here economists differ on why this was. Some might say that business had not adjusted to hiher taxes and an expanded Federal regulatory role. Others might say that the Administration did not adequately apealed to business. There are also questions of financial and monetary policy. While economists debate these questions, it is clear that the private sector did not recreate the jobs that had been lost. The Roosevelt Administration's answer was a flurry of New Deal legislation in 1935. This was in part possible because of the Democratic Congressional victories in the 1934 by-election. The new programs included the Works Projects Administration (WPA) which provided jobs not only for laborers but also artists, writers, musicians, and authors. The WPA became in large measure the public face of the New Deal. Another critical piece of New Deal legislation was the Social Security Act which provided unemployment compensation and a program of old-age and survivors' benefits. The WPA and Social Security became the centerpieces of the New Deal. The WPA did not survive as a permanent agency. Social Security of course did.

The Courts

The conservative-dominated Federal Courts struck down the NRA and WPA, but many New Deal programs endure to this day. Some of the main New Deal agencies, especially the NRA were ruled unconstitutional. The elections of 1932-36 had fundamentally changed American politics. The Democratic power with few exceptions (Cleveland and Wilson) had been out of power siince the Civil War. While these elections transformed the Presidency and Congress, the Federal juducisary was a bastion of conservative thought deeply hostile to the New Deal. Today conservatives complain about activist liberal judges. Liberals in the 1930s faced activist conservative judges. Some authors describe the Supreme Court in the 1930s as persuing judicial imperialism. Many justices delayed retirement realizing that FDR would appoint liberal justices to replace them. In frustration seeing the New Deal being eviserated by the Supreme Court, FDR attempted to expand the court so he could appoint new justices. It was the greatest political mistake of his presidency. There was a groundswell of resistance to what became known as his effort to pack the court. While FDRs efforts to expand the Supre Court failed, justices finally began to retire. Finally FDR beginning in 1938 was able to appoint new justices to the Supreme Court. FDR in the last 6 years of his presidencvy appointed 8 justices which along with appointments to lower Federal coutrts fundamentally transformed the character of the Federal judiciary. Finally the New Deal was safe although the inniovative phase of the New Deal had largely past. Although the New Deal's efforts in civil rights was limited, it is this transformed Federal judiciary that would issue the land mark decessions on civil rights that would transform America in the 1940s-50s.

World War II

Assessment

President Roosevelt and the New Deal were extreemly controservial during the 1930s. The voters consistently retyrned him to office but by the 1938 elections were beginning to have doubts. In the aftermath of the War and the President;s untimely death, historians tended to speak lauditorily of the Nrw Deal afirming that President Roosevelt brought us out of the Depression. More recent historians have discussed the New Deal in less lauditory terms. With greater reflection it can I think, be fairly seen that it was World War II that finally ended the Depression. Some recent historians have even charged that the New Deal even prolonged the Depression. I am not entirely sure of that, but even if true it does not mean, howeve, tht the New Deal was a failure or thzt it did not have many beneficial impacts.

Sources

Freidel, Frank. Franklin D. Roosevelt: Launching the New Deal (Little Brown: Boston, 1973), 574p.

Powell, Jim. FDR's Folly: How Franklin D. Roosevelt and he New Deal Prolonged the Great Depression. Powell's book is a popular summary of a number of economists who have challenged prevailing opinions on the New Deal.

Created: October 12, 2003
Last updated: 1:16 PM 2/24/2009