The American Promise – Lecture Notes
Chapter 24 – The New Deal Experiment, 1932-1939
I. Franklin D. Roosevelt: A Patrician in Government (Slide 2) Page 718
A. The Making of a Politician
1. Background in Politics—Born in 1882, Franklin Delano Roosevelt was raised
to strive for the high-minded doctrines of public service and Christian duty to help
the poor and weak; unlike his cousin Teddy, Franklin Roosevelt sought his
political fortune in the Democratic Party; Woodrow Wilson appointed him
assistant secretary of the navy; ran as vice presidential candidate in 1920.
2. Polio—During the summer of 1921, Roosevelt was infected with the polio
virus, paralyzing both his legs; avoided being photographed in the wheelchair he
used routinely; while visiting a polio therapy facility in Warm Springs, Georgia,
Roosevelt courted southern Democrats; became a rare political creature: a New
Yorker from the Democratic Party’s urban and immigrant wing with whom whites
from the Democratic Party’s entrenched southern wing felt comfortable.
3. Governor of New York—Roosevelt won New York’s 1928 gubernatorial
election; used his position to showcase his leadership and his suitability for a
presidential bid; believed government should intervene to protect citizens from
economic hardships, rather than wait for the laws of supply and demand to
improve the economy; in 1931, he created the Temporary Emergency Relief
Administration (TERA), the highlight of Roosevelt’s efforts to relieve the
economic hardships of New Yorkers.
4. Roosevelt’s Appeal—To his supporters, Roosevelt seemed to be a leader
determined to use the resources of the government to attack the economic crisis
without deviating from democracy or from capitalism.
B. The Election of 1932 Page 720
1. Democratic Party Divisions—The Democrats knew they had an opportunity to
recapture the White House; but they had to overcome warring factions that
divided the party by religion, region, culture, and commitment to the status quo.
2. A New Deal for the American people—When Roosevelt accepted the
Democratic nomination, he stated his determination to govern decisively and
pledged himself to “a new deal for the American people”; never explained what
he meant by the New Deal during the campaign.
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3. The New Deal Coalition—Roosevelt won in a historic landslide; the first time a
Democrat had won a majority of the popular vote since 1852; his victory
represented the emergence of what came to be called the New Deal coalition,
attracting support from an unlikely alliance of farmers, factory workers,
immigrants, city folk, African Americans, women, and progressive intellectuals;
launched a realignment of the nation’s political loyalties.
II. Launching the New Deal (Slide 7) Page 722
A. The New Dealers
1. The Brains Trust—To design and implement the New Deal, Roosevelt needed
ideas and people; convened a “Brains Trust” of economists and other leaders to
offer suggestions and advice; Harry Hopkins and Frances Perkins, both activists
from the social gospel tradition and veterans of Roosevelt’s New York
governorship, became two of the most important new cabinet members.
2. The First Lady—No New Dealer was more important than the president
himself and his wife, Eleanor, who became the New Deal’s unofficial
ambassador; traveled throughout the country meeting with Americans of all
colors and creeds.
3. Meeting the Emergency: Four Guiding Ideas—As Roosevelt and his advisers
developed plans to meet the economic emergency, their watchwords were
action, experiment, and improvise; plans based on four underlying ideas; first,
Roosevelt and his advisers sought capitalist solutions to the economic crisis;
second, Roosevelt was persuaded that the greatest flaw of America’s capitalist
economy, underconsumption, was the root cause of the current economic
paralysis; third, New Dealers believed that the immense size and economic
power of American corporations needed to be counterbalanced by government
and by organization among workers and small producers; fourth, New Dealers
felt that the government must somehow moderate the imbalance of wealth
created by American capitalism so that working people could share more fully in
the fruits of the economy.
B. Banking and Finance Reform Page 723
1. The Banking Crisis—The nation’s banking system was on the brink of
collapse; Roosevelt immediately declared a four-day bank holiday; New Dealers
worked around the clock to draft the Emergency Banking Act, which released
funds from the Reconstruction Finance Corporation in order to bolster bank
assets; set up the Federal Deposit Insurance Corporation to secure the
confidence of depositors.
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2. Fireside Chats—In his “fireside chats,” Roosevelt addressed the millions of
Americans over the radio; spoke in a friendly, informal manner; reassured
Americans about the safety of their money in banks; chats forged a direct
connection between Roosevelt and millions of Americans; the banking legislation
and fireside chats worked; most of the nation’s banks reopened and remained
solvent under federal regulation and oversight.
3. Reforming Wall Street—To prevent fraud, corruption, insider trading, and other
abuses that had tainted Wall Street and contributed to the crash of 1929,
Roosevelt pressed Congress to regulate the stock market; led to the creation of
the Securities and Exchange Commission (SEC); under Joseph Kennedy, the
SEC helped Wall Street recover slowly.
C. Relief and Conservation Programs (Slide 9) Page 725
1. Unprecedented Government Intervention—Since its founding, the federal
government had not assumed responsibility for needy people except during
natural disasters or emergencies such as the Civil War; instead, churches,
private charities, county and municipal governments, and occasionally states
assumed the burden of poor relief; depression necessitated unprecedented
federal relief efforts, according to Harry Hopkins and other New Dealers;
galvanized support for the Federal Emergency Relief Administration (FERA),
which provided $500 million to feed the hungry and create jobs.
2. The Civilian Conservation Corps—The most popular relief program was the
Civilian Conservation Corps, established in March 1933; offered unemployed
young men a chance to earn wages while working to conserve natural resources;
women were excluded until Eleanor Roosevelt demanded that a token number of
them be hired; by 1942, three million CCC workers left a legacy of vast new
recreation areas and roads that made them accessible; also replaced the stigma
of welfare with the dignity of jobs.
3. Providing Electricity to Rural America—The New Deal also sought to harness
natural resources for hydroelectric power; completed the Hoover Dam across the
Colorado River in Nevada; New Deal’s most ambitious natural resources
development project was the Tennessee Valley Authority (TVA); created in 1933
to build dams along the Tennessee River in an effort to supply cheap electricity
to impoverished rural communities; new sources of hydroelectric power helped
the New Deal bring the wonder of electricity to the country folk, fulfilling an old
progressive dream; the Rural Electrification Administration delivered electricity to
nine out of ten farms by 1945.
D. Agricultural Initiatives Page 727
1. Cutting Production—New Dealers diagnosed farmers’ economic plight as a
classic case of overproduction and underconsumption; sought to cut agricultural
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production, thereby raising crop prices and farmers’ income; the New Deal’s
Agricultural Adjustment Act (AAA) accomplished this by paying farmers not to
grow some crops.
2. Credit for Farmers—With the formation of the Commodity Credit Corporation,
the federal government allowed farmers to hold their harvested crops off the
market and wait for higher prices; government stored the crop and gave farmers
a “commodity loan” based on a favorable price; the Farm Credit Act (FCA)
provided long-term credit on mortgaged farm property and allowed debt-ridden
farmers to avoid foreclosure; crop allotments, commodity loans, and mortgage
credit made farmers major beneficiaries of New Deal policies.
3. Problems in the South—In the South, landlords controlled the distribution of
New Deal agricultural benefits; shamelessly rewarded themselves while denying
funds to sharecroppers and tenant farmers, whose situation worsened.
E. Industrial Recovery (Slide 11) Page 728
1. Production and Unemployment—Unlike farmers, industrialists cut production
with the onset of the depression; millions of working people lost their jobs, and,
unlike farmers, they needed jobs to eat; mass unemployment reduced consumer
demand for industrial products, which contributed to a downward spiral in
production and consumption.
2. The National Recovery Administration—The New Deal’s National Industrial
Recovery Act (NIRA) opted for a government-sponsored form of industrial selfgovernment; established the National Recovery Administration (NRA) in June
1933; encouraged industrialists to agree on rules, known as codes, to define fair
working conditions, set prices, and minimize competition in order to stabilize
existing industries and maintain their workforces.
3. Collective Bargaining—In exchange for relaxing federal antitrust regulations,
the NRA made participating businesses promise that they would recognize
workers’ right to organize and engage in collective bargaining.
4. Failure of the Codes—New Dealers hoped that the NRA codes would
encourage businesses with a social conscience to enact fair treatment for
workers and consumers and promote the general economic welfare; instead,
NRA codes tended to strengthen conventional business practices; corporations
wrote codes that served their own interests rather than the needs of workers or
the general welfare of the economy; codes did little to reduce unemployment,
raise consumption, or relieve the depression.
III. Challenges to the New Deal (Slide 12) Page 729
A. Resistance to Business Reform
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1. Business Leaders—Business leaders criticized Roosevelt, despite the fact that
their economic prospects improved more than those of most other Americans
during the depression; by 1935, two major business organizations, the National
Association of Manufacturers and the Chamber of Commerce, had become
openly anti–New Deal.
2. Criticisms from the Left—Economic planners who favored rational planning in
the public interest and labor leaders who sought to influence wages and working
conditions by organizing unions attacked the New Deal from the left.
3. NRA Loses Ground—In May 1935, the Supreme Court declared that the NRA
unconstitutionally granted powers reserved to Congress on an administrative
agency staffed by government appointees; the failure of the NRA revealed the
depth of many Americans’ resistance to economic planning and the refusal of
business to yield to government regulations or reforms.
B. Casualties in the Countryside Page 730
1. Resentment of Processors and Distributors—Agricultural processors and
distributors criticized the AAA because the tax on processed crops funded the
programs that aided farmers while disadvantaging processors; the Supreme
Court struck down the tax and the AAA rebounded, getting funding instead from
general government funds.
2. Protests from Farmers—Protests stirred among those who did not qualify for
allotments; the Southern Farm Tenants Union argued that the act enriched large
farmers, rather than small farmers and sharecroppers who rented rather than
owned land; Roosevelt’s political dependence on southern Democrats caused
him to avoid confronting such economic and racial inequities in the South’s
entrenched order.
3. Migrant Workers—Displaced tenants often joined the army of migrant workers
that straggled across rural America during the 1930s; many fled Great Plains
dust storms; hundreds of thousands of “Okies” streamed out of the Dust Bowl of
Oklahoma, Kansas, Texas, and Colorado; immortalized in John Steinbeck’s
novel The Grapes of Wrath.
C. Politics on the Fringes (Slide 15) Page 732
1. The Republican Party—Politically, the New Deal’s staunchest opponents were
part of the Republican Party—organized, well-heeled, mainstream, and
determined to challenge Roosevelt at every turn.
2. Socialists and Communists—Accused the New Deal of being an instrument of
business elites and rescuing capitalism from its self-inflicted crisis; many
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intellectuals and artists pushed for more radical change; they joined left-wing
organizations, including the American Communist Party, which reached the
height of its influence in the United States in the 1930s.
3. Charles Coughlin—More powerful challenges to the New Deal sprouted from
homegrown roots; Charles Coughlin, a Catholic priest in Detroit, spoke to, and
for, many worried Americans in his weekly radio broadcasts that reached a
nationwide audience of 40 million; blamed the suffering on Communists, bankers,
and “predatory capitalists,” who, he claimed, were Jews; espoused virulent antiSemitism; turned against the New Deal due to Roosevelt’s refusal to grant him
influence.
4. Dr. Francis Townsend’s Old Age Revolving Pension—Criticized the timidity of
the New Deal; proposed the creation of an Old Age Revolving Pension that
would pay every American over the age of sixty a pension of $200 a month that
had to be spent within thirty days, thereby stimulating the economy; when the
major parties rebuffed his plan, he merged his forces with Coughlin’s new Union
Party in time for the 1936 election.
5. Huey Long, “The Kingfish”—A more formidable challenge to the New Deal
came from the southern wing of the Democratic Party; Louisiana senator Huey
Long introduced a sweeping “soak the rich” tax bill to outlaw personal incomes of
more than $1 million and inheritances of more than $5 million; when the Senate
rejected his proposal, Long decided to run for president on a platform that
promised to “Share Our Wealth” but was assassinated in 1935.
6. Solidifying the Coalition—Challenges to the New Deal from Republicans as
well as more radical groups stirred Democrats to solidify their winning coalition; in
the midterm elections of 1934, normally a time when a president loses support,
New Dealers won a landslide victory.
IV. Toward a Welfare State (Slide 16) Page 733
A. Relief for the Unemployed
1. Works Progress Administration—By 1935, eight million people were jobless;
Roosevelt and his advisers launched a massive work relief program, creating the
Works Progress Administration (WPA) to give unemployed Americans
government-funded jobs on public works projects.
2. The WPA and the Public Welfare—By 1936, WPA funds provided jobs for 7
percent of the nation’s labor force; WPA officials did, however, tend to
discriminate in favor of white men against women and racial minorities; about
three out of four WPA jobs involved construction and renovation of the nation’s
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physical infrastructure; other WPA jobs employed artists, musicians, actors,
journalists, poets, and novelists.
B. Empowering Labor Page 736
1. The Wagner Act—The New Deal dramatically reversed the federal
government’s stance toward unions; with legislation and political support, the
New Deal encouraged an unprecedented wave of union organizing among the
nation’s working people; in Congress, labor leaders lobbied for the National
Labor Relations Act, commonly known as the Wagner Act, in 1935; the act
created the National Labor Relations Board and guaranteed workers the right to
organize unions.
2. Growing Union Membership—The Wagner Act, along with renewed labor
militancy, made great strides for labor unions during the New Deal era; union
membership jumped from three million in 1933 to fourteen million in 1945.
3. Organizing Unskilled Workers—Most of the new union members were factory
workers or unskilled laborers; many were also immigrants and African
Americans; in 1935, under the leadership of John L. Lewis and Sidney Hillman, a
coalition of unskilled workers formed the Committee for Industrial Organization
(CIO), which mobilized organizing drives in major industries.
4. The Sit-Down Strike—The bloody struggle by the CIO-affiliated United Auto
Workers (UAW) to organize workers at General Motors climaxed in January 1937
when striking workers occupied the main assembly plant in Flint, Michigan; after
the “sit-down” strike slashed the plant’s production of 15,000 cars a week to a
mere 150, the automaker capitulated; recognized the UAW as the sole
bargaining agent for all the company’s workers and agreed to refrain from
interfering with union activity.
5. Opposition from the Steel Mills—CIO organizers hoped to ride their success in
auto plants to victory in the steel mills, but they encountered fanatic opposition
from small mills; union efforts stalled until military mobilization in 1941 created
labor shortages.
C. Social Security and Tax Reform (Slide 18) Page 737
1. The Politics of Social Security—The single most important feature of the New
Deal’s emerging welfare state was Social Security; the political struggle for Social
Security highlighted class differences among Americans; faced resistance from
economic conservatives; the large majority of New Dealers carried the Social
Security Act through Congress in August 1935.
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2. Eligibility for Social Security Benefits—The act provided pensions for the
elderly funded by workers and their employers and provided unemployment
insurance funded by employers’ contributions; eligible workers not subject to a
means test to prove they were needy; the act excluded domestic and agricultural
workers, thereby making about half of African Americans and more than half of
all employed women ineligible for benefits; also excluded workers employed by
religious and nonprofit organizations; Social Security also issued multimilliondollar grants to the states to use to support dependent children, public health
services, and the blind.
3. A Graduated Tax—Fervent opposition to Social Security struck New Dealers
as evidence that the rich had learned little from the depression; Roosevelt called
for tax reform, and Congress endorsed Roosevelt’s basic principle by taxing
those with higher incomes at a somewhat higher rate.
D. Neglected Americans and the New Deal (Slide 20) Page 738
1. Excluded Workers—Many working people, including domestic workers (mostly
women) and agricultural workers (African, Hispanic, or Asian Americans)
remained largely untouched by New Deal benefits.
2. African Americans’ Status—The New Deal neglected few citizens more than it
did African Americans; about half of blacks in cities were jobless, more than
double the unemployment rate among whites; conditions even worse in the rural
South; only 11 of the 10,000 WPA supervisors in the South were black;
disfranchisement prevented southern blacks from protesting their plight at the
ballot box; other forms of protest risked retaliation from local whites; after years
of decline, lynching increased during the 1930s.
3. Formation of the “Black Cabinet”—Roosevelt responded to criticism cautiously,
because New Deal reforms required the political support of powerful
conservative, segregationist, southern Democrats who would be alienated by
programs that aided blacks; nonetheless, Roosevelt’s overtures to African
Americans prompted northern black voters to shift in the 1934 elections from the
Republican to the Democratic Party, helping elect New Deal Democrats; 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, where she used her position
to guide a small number of black professionals and civil rights activists to posts
within New Deal agencies; nicknamed the “Black Cabinet.”
4. Hispanic Americans Face Discrimination—Fared no better; to preserve scarce
jobs for Americans, the government choked off immigration from Mexico, while
state and local officials prohibited the employment of aliens and deported tens of
thousands of Mexican Americans.
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5. Exclusion of Asian Americans—Immigrants were still excluded from U.S.
citizenship; prohibited from owning land in many states.
6. Indian Reorganization Act—Also suffered neglect from New Deal agencies; as
a group remained the poorest of the poor; the Indian Reorganization Act of 1934
restored the Indians’ right to own land communally and to have greater control
over their own affairs, and provided an important foundation for Indians’
economic, cultural, and political resurgence a generation later.
V. The New Deal from Victory to Deadlock (Slide 21) Page 740
A. The Election of 1936
1. New Deal Critics Look for Change—Roosevelt believed the election would test
his leadership and progressive ideals; Republicans turned to the Kansas
heartland and selected as their presidential nominee Governor Alfred Landon,
who stressed mainstream Republican proposals to achieve a balanced federal
budget.
2. Roosevelt’s Strategy—Roosevelt put his faith in the growing coalition of New
Deal supporters, who he believed shared his conviction that the New Deal was
the nation’s liberator from a long era of privilege and wealth for a few and
“economic slavery” for the rest.
3. Democratic Triumph—Roosevelt triumphed spectacularly in the election,
winning 60.8 percent of the popular vote; he pledged to use his mandate to help
all citizens achieve a decent standard of living.
B. Court Packing Page 741
1. Eliminating Obstacles to Reform—After winning the election, Roosevelt
focused on removing the remaining obstacles to New Deal reforms; he decided
to target the Supreme Court, which was laden with Republican-appointed
conservative justices; Court had invalidated eleven New Deal measures as
unconstitutional interferences with free enterprise.
2. The Court-Packing Plan—Roosevelt proposed a plan that would allow him to
appoint to the Court up to six New Dealers, who could outvote the elderly,
conservative, Republican justices.
3. Backlash—The president had not reckoned with Americans’ deeply rooted
deference to the independent authority of the Supreme Court; even New Deal
supporters were disturbed; the court-packing bill failed.
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4. Ultimate Triumph—Ultimately, the Supreme Court justices got Roosevelt’s
message and upheld New Deal legislation in subsequent cases; Roosevelt
eventually named eight justices to the Court—more than any other president.
C. Reaction and Recession (Slide 22) Page 742
1. Slowing the Pace of New Deal reforms—Emboldened by their defeat of the
court-packing plan, Republicans and southern Democrats rallied around their
common conservatism to obstruct additional reforms; Roosevelt himself favored
slowing the pace of the New Deal and believed that additional deficit spending by
the federal government was no longer necessary.
2. Economic Reversal—Roosevelt’s optimism failed to consider the stubborn
realities of unemployment and poverty; reduction in deficit spending reversed the
improving economy; national income and production slipped steeply backward.
3. Political Damage—The economic reversal hurt the New Deal politically;
conservatives argued that New Deal measures produced only an illusion of
progress, and staunch New Dealers felt that Roosevelt should revive federal
spending; Congress heeded such pleas and enacted a massive new program of
federal spending.
4. Keynesian Economics—The recession scare of 1938 taught Roosevelt the
lesson that economic growth had to be carefully nurtured; British economist John
Maynard Keynes had argued that only government intervention could pump
enough money into the economy to restore prosperity.
D. The Last of the New Deal Reforms (Slide 24) Page 743
1. Administrative Reorganization Act—Roosevelt gained new influence over the
bureaucracy in 1938 when Congress passed the Administrative Reorganization
Act; he had a Democratic majority in Congress, a friendly Supreme Court, and
revived deficit spending.
2. Resistance on the Rise—But resistance to further reform was on the rise;
Conservatives argued centralization had gone too far; even supporters grew
weary of programs that did not seem to work; the New Deal was beginning to
lose momentum.
3. Farm Reform—The last burst of New Deal reforms included farm reforms in
1937 that led to the creation of the Farm Security Administration (FSA), which
tried to help tenant farmers become independent; further reforms in 1938 led to a
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second Agricultural Adjustment Act, which moderated price swings by regulating
supply.
4. Helping the Urban Poor—Advocates for the urban poor also made modest
gains after decades of neglect; the 1937 National Housing Act represented the
federal government’s first effort to provide affordable housing in urban areas,
even though it did not come close to meeting the need.
5. Setting Fair Labor Standards—The last major piece of New Deal legislation,
the Fair Labor Standards Act of June 1938, reiterated the New Deal pledge to
provide workers with a decent standard of living; set wage and hours standards
and curbed child labor; to attract conservative support, it exempted seamen,
fishermen, domestic help, and farm laborers—relegating most women and blacks
to lower wages.
6. Resistance to Confronting Racial Injustice—The final New Deal reform efforts
failed to make much headway against the system of racial segregation;
Roosevelt would not jeopardize his southern support by demanding antilynching
legislation; Congress voted down attempts to make lynching a federal crime;
laws to eliminate the poll tax met the same overwhelming resistance.
7. The End of the New Deal—By the end of 1938, the New Deal had lost steam
and was encountering stiff opposition; Republicans had made gains in Congress;
Roosevelt signaled a halt by speaking about preserving the progress already
made rather than extending it; proposed defense expenditures that surpassed
New Deal appropriations for relief and recovery.
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