CHAPTER 26
FRANKLIN D. ROOSEVELT AND THE NEW DEAL
THE STRUGGLE AGAINST DESPAIR
The author recounts the different memories people had of the Great Depression: a farmer who saw
wheat being burned because it was too cheap to sell, a college student who noticed how many of her
classmates’ fathers had abandoned their families out of a sense of shame, a man who remembered
hiding the truth of scarcity from his children. The memories were different, but the misery was shared.
THE GREAT DEPRESSION
After the collapse of the economy in 1929, optimism turned to bleak despair.
A. The Great Crash
It was apparent in 1927 that the market for consumer goods was being saturated, but Americans were
too engaged in watching the stock market to notice. Stock prices began to soar in the spring of 1928,
attracting investments from individuals and corporations. Although the crash in 1929 directly affected
only the three million Americans who owned stock, the resulting credit crunch stifled business, leading
to layoffs and further decline in the demand for consumer goods. It is obvious now that the economy
would have been far healthier if the money that went into speculation had gone into wages, but
Americans were pioneering a new industrial system and had no past experience to guide them.
B. Effect of the Depression
The Depression brought physical and psychological hardship to all classes of Americans. The middle class
lost its belief in ever-increasing prosperity, and thousands of young people wandered, homeless and
jobless, through the country.
FIGHTING THE DEPRESSION
When the Republicans failed to end the Depression, the Democrats became the majority party.
A. Hoover and Voluntarism
Hoover hoped that voluntary action and private charity would get the nation through the Depression,
but as conditions worsened, the president approved aid to farmers and bankers. Despite Democratic
pressure, Hoover resisted efforts to give direct aid to the unemployed, believing it would undermine the
proud American character. His apparent indifference to human suffering and his seeming incompetence
doomed his chances for re-election.
B. The Emergence of Roosevelt
Franklin Roosevelt, born to wealth and privilege, had a successful, but minor political career before
1921, when he was crippled by polio. FDR overcame the handicap, was elected governor of New York,
and took control of the Democratic party. A man of infinite charm, a magnificent speaker, and a
politician to the bone, Roosevelt easily defeated Hoover in 1932 by putting together a coalition of
southern and western farmers, industrial workers, immigrants, and Catholics.
C. The Hundred Days
In his first three months as president, Roosevelt saved the banking system from collapse and enacted
fifteen major laws, some of which (like federal insurance of bank accounts) have become permanent.
Roosevelt did not attempt to nationalize the economy; he wished only to reform and restore it.
D. Roosevelt and Recovery
Roosevelt attempted to spur industrial recovery through the National Recovery Administration (NRA).
Under this program, different industries worked out codes that would eliminate cut-throat competition
and ensure labor peace. The codes generally favored big business and were unenforceable. In 1935, the
Supreme Court ruled the NRA unconstitutional.
Roosevelt’s solution to the Depression in agriculture was the Agricultural Adjustment Act of
1933, under which farmers were paid to take land out of cultivation. Smaller harvests resulted in higher
farm prices and larger farm incomes, but much of the land taken out of cultivation had been worked by
sharecroppers and tenant farmers. These people were now dispossessed and moved to the cities.
E. Roosevelt and Relief
FDR was quick to respond to the needs of the unemployed and the poor. In 1933 he assigned Harry
Hopkins to establish various direct-aid programs. The final commitment to the idea of work relief came
in 1935, with the establishment of the Works Progress Administration, which Congress funded for $5
billion. FDR himself thought of the Civilian Conservation Corps to give employment to young people. But
Roosevelt’s programs were never sufficiently funded to make a major recovery possible, and more
radical ideas began to emerge.
ROOSEVELT AND REFORM
In his first two years as president, Roosevelt responded to immediate problems. In 1935, he began to
propose measures that would permanently reform the economic institutions of the nation.
A. Challenges to FDR
Roosevelt’s inability to bring about full recovery made it possible for more radical demagogues to attract
support. Father Charles Coughlin wanted to nationalize the banks; Francis Townsend wanted to
distribute wealth by taking it from the young and giving it to the elderly. Until his assassination, Huey
Long was so popular that he seemed a real threat to run as an independent for president.
B. Social Security
In 1935, Roosevelt helped push the Social Security Act through Congress. Although critics complained
that too few people would eventually collect pensions and that the law’s unemployment package was
inadequate, Roosevelt believed that it was the best that he could hope for at the time.
C. Labor Legislation
Roosevelt threw his support behind the Wagner Act, passed in 1935, which allowed unions to organize
and outlawed a variety of unfair labor practices. In 1938, the Fair Labor Standard Act gave workers
maximum-hour and minimum-wage protection. Like Social Security, these acts were important because
they established a pattern of government aid to the poor, aged, and handicapped.
Roosevelt proposed other reforms, but Congress usually weakened them. Still, Roosevelt had
gone far enough to the left to erode support for Coughlin, Townsend, and Long, without leaving the
mainstream of American traditions.
IMPACT OF THE NEW DEAL
The New Deal helped labor unions most, women and minorities least.
A. Rise of Organized Labor
In 1932, unions were in decline. Passage of the National Recovery Act encouraged union organizers, and
John L. Lewis formed the Congress of Industrial Organizations (CIO), designed to organize unskilled
workers. The CIO succeeded, often against violent resistance, in organizing unions in the steel and
automobile industries. By the end of the 1930s, the CIO had five million members. Still, only 28 percent
of urban workers belonged to a union in 1940.
B. The New Deal Record on Help to Minorities
Some New Deal programs actually hurt racial minorities. The crop-reduction program allowed white
employers to fire or evict African American and Hispanic workers and tenants. But other programs, like
public works, helped, and prominent New Deal figures, Harry Hopkins or Eleanor Roosevelt for example,
convinced minorities that the government was on their side. One minority, American Indians, gained
greater control over their own affairs through the Indian Reorganization Act of 1934.
C. Women at Work
This decade saw the position of women deteriorate. They lost jobs at a faster rate than did men, and
hardly any of the New Deal programs helped them. However, there was some progress in government.
Roosevelt named a woman to the cabinet and appointed several women to other important positions.
Eleanor Roosevelt served as a model for activist women.
END OF THE NEW DEAL
The New Deal reached its peak in 1936, when Roosevelt was reelected. After that, although Roosevelt
continued to be personally popular, he had great trouble in getting Congress to pass his programs.
A. The Election of 1936
FDR campaigned against the rich in 1936 and promised even further reforms in his second term. He
easily defeated the Republican candidate for president, and the Democrats won lopsided majorities in
both houses of Congress. It was clear that a new political coalition had formed. FDR carried the
traditionally Democratic South, the urban areas, the ethnic vote, the African American vote, the poor,
and organized labor.
B. The Supreme Court Fight
Roosevelt had long harbored a grudge against the Court because it had ruled adversely on several New
Deal measures. In 1937, he asked Congress to give him the right to “pack” the Court. The proposal
stirred up a tempest of protest, and FDR had to retreat. His loss in this contest emboldened his
opponents.
C. The New Deal in Decline
FDR could no longer dominate Congress, and his attempts in 1938 to unseat several conservative
Democrats failed. Even worse, Roosevelt’s abrupt cutback of funds for relief agencies in 1936 caused a
severe slump in 1937. Roosevelt was blamed, and he finally had to resort again to huge government
spending. By the end of 1938, the Republican party had revived.
CONCLUSION: THE NEW DEAL AND AMERICAN LIFE
The New Deal did not end the Depression, it did little for those without political clout, and it did not
fundamentally alter the nation’s economic system. Nevertheless, legislation like Social Security and the
Wagner Act had enduring results and the political realignment of the 1930s lasted for decades. FDR did
not solve the economic problems he inherited, but he helped the American people endure and survive
the Great Depression.