FDR From New Deal to WWII:
#27
Franklin Delano Roosevelt's First New Deal was followed by what historians characterize as the Second
New Deal (1935-1937). Like the First New Deal, the Second New Deal had its Hundred Days, known as the
Second Hundred Days. This lecture examines the reform measures of the Second New Deal, economic
backsliding in the Recession of 1937, and the reaction of isolationist Americans to growing hostilities in
Europe and Asia.
Some questions to keep in mind:
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5.
Compare and contrast Father Charles Coughlin's criticism of the New Deal with the criticism
offered by Huey Long.
How did the programs advocated by Huey Long resemble the programs of the Populists and
the Progressives? How did they differ?
Why do you think the Communist Party reached its greatest strength in America in 1935?
What are the basic concepts of Keynesian economics and why are they important to
understand when we discuss FDR's presidency?
How did Americans' attitudes about United States involvement in WWI shape their attitudes
about involvement in WWII?
The New Deal and its Critics
If Roosevelt's First New Deal (1933-1935) concentrated on relief, dealing with the immediate issue of
getting unemployed Americans back to work, then the Second New Deal (1935-1937) focused on social
reform issues. This Second New Deal came about, in part, because of the social concerns of the President
and his First Lady, Eleanor Roosevelt, but also because of mounting criticism--from the political left and the
political right--of the policies of the First New Deal.
Father Charles Coughlin
One of the most vocal critics of the New Deal was Father
Charles Coughlin (1891-1979), a conservative Roman
Catholic priest and political activist. Coughlin broadcast his
weekly radio show--"Golden Hour of the Little Flower"-from Detroit which reached an audience of 40 million
listeners at the height of its popularity. Father Coughlin's
rhetoric was a curious combination of anti-communism,
anti-capitalism, and anti-Semitism. At first, he supported
the New Deal, calling it "Christ's Deal," but then he became
increasingly upset at the slow pace of reform as well as his
inability to play a major policy-making role in the
Roosevelt administration. In addition, he viewed as
criminally wasteful some of the tactics used under the AAA
(Agricultural Adjustment Act) to limit overproduction:
plowing under crops or slaughtering livestock. Coughlin
launched the National Union for Social Justice to challenge
the President, claiming that Roosevelt had "out-Hoovered
Father Charles Coughlin (1891-1979), Hoover."
Catholic radio and political activist
Huey Long
The most powerful New Deal critic from the political left was Huey Long (1893-1935), governor of
Louisiana and later a United States Senator from that state. Known as the "Kingfish," Long became the most
powerful governor in Louisiana's history. He used his power to expand Louisiana's underdeveloped
infrastructure and helped build new hospitals, schools, highways, bridges, and the state's university. Long's
campaign slogan was "Every man a king, but no one wears a crown," and his ideas on the redistribution of
wealth were very popular among the lower and middle classes of Louisiana. At first, he supported the New
Deal, but soon found it too conservative and he increasingly believed that FDR had caved in to the demands
of big business. Long established the Share-Our-Wealth Society, an organization that advocated taxing the
rich to help the poor. He promised huge, confiscatory taxes on incomes over $1 million and inheritances
over $5 million in order to provide the following:
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$5,000 homestead credit allowance to all American families
$2,000 guaranteed annual income for all Americans
Free college education
Shorter working days
Government storage of crops to help out both farmers and the poor
Long's brand of politics was a type of "Neo-Populism" which found followers not only in Louisiana, but
among low-income, rural families across the country. By mid-1935, Share-Our-Wealth Clubs had 7 million
members and Long talked openly about challenging Roosevelt in the upcoming presidential election. Long's
presidential aspirations, however, came to an abrupt and tragic end in September 1935 when he returned to
Louisiana to supervise a special session of the state legislature and was assassinated by the son-in-law of a
ruined political opponent.
Other Critics
The New Deal had other critics as well. Governor Floyd Olson of Minnesota declared himself a socialist and
tried to build a third party that would "preach the gospel of government and collective ownership of the
means of production and distribution." In Wisconsin, the Progressive politics of "Fighting Bob" LaFollette
lived on in his sons, United States Senator, Robert LaFollette, Jr. and Governor Philip LaFollette.
Membership in the Communist Party of the United States also hit a high in 1935. Proclaiming that
"Communism is 20th-century Americanism," domestic Communists were careful to distance themselves
from the revolutionary policies of Soviet Bolsheviks. They did not call for an overthrow of the government,
but instead began to work in cooperation with labor unions and student groups to transform American
economics and politics. They set up Communist Party cells and Marxist study groups at many universities to
attract students and professors to their cause.
Franklin D. Roosevelt summed up his style of political action when he stated:
"Do something. And when you have done that something, if it works, do it some
more. And if it does not work, then do something else."
The Second New Deal
That "something" turned out to be the
Second New Deal. Beginning in 1935,
Roosevelt began sending to Congress a
host of new legislative initiatives. Some
historians characterize the Second New
Deal as FDR's radical shift to the left. In
reality, however, this second stage of the
New Deal was more of a tentative step
towards the left. The laws that came out
of the Second New Deal included:
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WPA
Wagner Act
Social Security Act
Wealth Tax Act
Cover to sheet music of "Welcome Mr. Roosevelt,"
by Eric Karll
WPA stood for Works Progress (later "Projects") Administration, which promoted both economic relief and
reform. Required to choose projects that would not compete with private business, the WPA paved streets
and highways; built bridges, airfields, and post offices; restored forests, and extended electrical power to
rural areas. Over its seven-year history, the WPA employed about 8.5 million Americans. In addition to
building the nation's infrastructure, the WPA funded unemployed artists and authors to promote American
culture. The Federal Theater, Arts, Music, Dance, and Writers' Projects brought music and drama to even
the smallest communities, sponsored public sculptures and murals, and commissioned noted American
writers, such as John Steinbeck, Richard Wright, John Cheever, and Claude McKay, to write regional
guidebooks and histories of the American people. The efforts of the WPA marked the first time that the
federal government tried to support and promote actively American art and culture.
City of Milwaukee work project for the Depression-era WERA (Wisconsin
Emergency Relief Administration)
The Wagner Act, known officially as the National Labor Relations Act, preserved and strengthened Section
7A of the NIRA. It guaranteed workers the right to unionize and the right to bargain collectively with
management. For the first time, the federal government recognized and protected labor unions.
The Social Security Act was initially drafted at the University of Wisconsin. This act created a cooperative
federal-state system to provide unemployment compensation and old-age insurance. Workers who paid
Social Security taxes out of their wages would receive benefits upon retirement at age 65. Employee and
employer contributions would cover the costs of these benefits. On the one hand, Social Security seemed a
fairly radical piece of reform legislation, since the government committed itself to provide help for the
elderly. In reality, however, it was a fairly conservative program, since workers and their employers, and not
the government, were footing the bill. In addition, the initial Social Security Act did not include provisions
for farm workers, domestic workers, employees of the restaurant and service industries, or health-care
providers. Still, the act was a milestone in American history because it acknowledged the responsibility of
society at large to take care of the less fortunate.
The Wealth Tax Act increased taxes on the wealthy and created new and larger taxes on excess business
profits, inheritances, large gifts, and profits from the sale of property. The act also put new restrictions on
trusts and holding companies.
FDR: Socialist or Capitalist?
Business leaders were highly critical of this Second New Deal and many viewed Roosevelt as a traitor to his
class and a socialist who was out to strip them of their wealth. One of Roosevelt's aides noted the strength of
the anti-Roosevelt attitude of American business leaders:
"There's a vast bitterness welling up from the grass roots of
every country club in America."
Although many members of Congress were far to the left of FDR, he seemed to personify the new antibusiness position in America. Nonetheless, FDR's relief and reform efforts actually preserved capitalism.
The AAA, the NIRA, new banking legislation, and regulations of securities on Wall Street ultimately helped
big business.
The Roosevelt Coalition
With big business turning against him, the President had to look for support elsewhere. For the presidential
campaign of 1936, Roosevelt built what was called the "Roosevelt Coalition," a political bloc that remade
modern politics. While Republicans were still relying on their traditional base of political support (big
business, big farmers, and conservatives), Democrats broadened their constituency by appealing to small
farmers in the Midwest, urban political bosses, ethnic blue collar workers, Jews, intellectuals, and African
Americans. The shift of African-American support to the Democratic party, in particular, demonstrates how
FDR was transforming American politics. Up until 1936, most blacks continued to celebrate the memory of
Abraham Lincoln and emancipation, and had voted for Republicans. In 1936, however, many of these voters
changed political allegiance and supported Roosevelt. The election of 1936, in fact, marked the greatest
electoral shift in American history. In 1932, Republicans had won 10 of the 12 largest United States cities.
In 1936, the twelve largest cities voted overwhelmingly Democratic.
The Roosevelt Recession
Having won the 1936 presidential election by the biggest margin up to that time, it seemed that everything
was going well for Roosevelt and the New Deal. In 1937, the president, in fact, believed that the nation had
recovered its economic health and he tried to balance the federal budged by cutting back on New Deal
programs. Roosevelt, for example, reduced funding for the WPA by half. Such policies, however, proved
disastrous for the American economy. As a result of such cuts, unemployment rose by 1.5 million by July
1937. With farm subsidies cut, farm prices also fell, and by August an additional 4 million Americans were
out of work. The economy would not recover fully from the Roosevelt Recession until the United States
entered World War II.
Reasons for the Roosevelt Recession:
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FDR didn't understand economics
He abandoned his New Deal policies in order to balance the federal budget
He favored political compromise over controversial commitments
Keynesian Economics
Roosevelt brought about the Recession of 1937 because he refused to follow the advice of his economic
aides and turned away from Keynesian (KAYN-zee-uhn) economics.
John Maynard Keynes (KAYNZ) (1883-1946) was a British economist who rejected classical economics
and traditional theories of the free market. He claimed that there was a direct correlation between
government spending and the welfare of the private sector economy. In addition, he advocated vast
government spending--even deficit spending--in times of recession. Then, when the economy had
recovered, Keynes argued, the government should reduce spending. Today, many Western nations (The
US included!) accept the principles of Keynesian economics. In the 1930s, however, Roosevelt remained
suspicious of deficit spending during tough economic times. Only World War II would prove the truth of
Keynes's theories.
Lasting Impacts of the New Deal
From Main Street to Pennsylvania Avenue
The New Deal was not a revolution; it did not bring about radical change. Nor did it end the Great
Depression. It did, however, transform American society and alter the relationship between government and
business. For one thing, the New Deal redirected the eyes of the American public from Main Street, city
council chambers, and state capitol buildings towards Washington, D. C. For the first time, many Americans
expected the federal government to play a vital role in the nation's social welfare.
The "Corporate State"
Another more enduring legacy of the New Deal was the rise of the "corporate state." Prior to Roosevelt's
time in office, big business had a virtual monopoly on political power. Through the regulation of business
activities the New Deal created two new players at the political table: big labor and big government. New
Deal legislation and United States involvement in World War II, in fact, drew together, more closely than
ever before, business, government, and labor. Labor provided a steady workforce and the government
promised to instill predictability in the market to avoid the dramatic highs and lows that had long plagued
the nation's economy. Under these terms, business made some concessions to labor and government.
American Involvement in WWII
Isolationist sentiments
While all of these domestic changes were underway, a series of critical foreign events once again drew the
United States onto the world's stage. During his time in office, Roosevelt had embraced "Wilsonian"
internationalism. The American public, however, was overwhelmingly isolationist during the 1930s.
Americans, for example, flocked to popular movies and plays and read books that depicted the horrors of
war. Margaret Mitchell's Civil War-era novel, Gone with the Wind was a national bestseller, won the
Pulitzer Prize in 1936, and became a hit movie in 1939.
Other events reinforced this popular suspicion of American involvement in European affairs. The "Senate
Investigation of the Munitions Industries," a report produced by the Nye Committee between 1934 and
1936, contended that greedy industrialists and munitions manufacturers had provoked the United States to
enter WWI. According to this report, war-mongering profiteers had popularized gruesome tales of Germany
atrocities to convince the United States to join the Allies and to invest heavily in war production. This report
helped convince many Americans that they should ignore European "propagandists" who claimed to
document the brutalities of Hitler, Mussolini, and Hirohito during the 1930s.
Roosevelt's one significant foreign policy move prior to World War II was the recognition of the Soviet
Union. Until that point, the United States had refused to recognize the Soviet Union as a legitimate state.
Roosevelt appealed to American business interests by arguing, mistakenly, as it turned out, that diplomatic
relations with the Soviet government would open up that country to trade.
While hostilities were building in Europe and the Far East, the United States Congress passed three pieces
of legislation-- known collectively as the Neutrality Acts--designed to keep America out of war. Congress
was determined to avoid the mistakes which had drawn America into the First World War.
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The Neutrality Act of 1935 prohibited shipment of American weapons to any belligerent nation
(that is, any nation at war). Against the wishes of FDR, this act did not differentiate between "the
good guys and the bad guys"--nations defending themselves and nations on the attack.
The Second Neutrality Act of 1936 forbade American loans to any belligerent nation, again,
without distinguishing between aggressors and victims.
The Third Neutrality Act of 1937 made the two previous laws a permanent part of American
national policy and forbade United States citizens from traveling on the ocean-going vessels of
warring nations. Congress passed this legislation to prevent another incident like the sinking of the
Lusitania, a British passenger ship with Americans aboard that Germany torpedoed during WWI.
The act also allowed the President to draw up a list of non-military goods, such as grain, which the
United States could sell to belligerent nations, but strictly on a "cash and carry" basis. The law
decreed that belligerent nations would have to pay the United States up front and would have to
transport any purchased goods on their own ships.
"Your boys are not going to be sent to any foreign war."
As Americans were calling for isolationism and pacifism, aggressions were mounting all over the world.
Publicly, Roosevelt stated and restated his promise not to get the United States involved in the European
war. He said in the 1940 presidential campaign:
"I hate war now more than ever. I have one supreme determination: to do all
that I can to keep war away from these shores for all time."
On another occasion during that campaign, FDR said:
"I have said this before, but I shall say it again and again and again. Your boys
are not going to be sent to any foreign war."
The major champion of isolation was America First, a group of prominent businessmen, celebrities, and
politicians, such as pilot Charles Lindbergh and auto magnate Henry Ford, that spoke out against the war.
Roosevelt admitted privately that United States involvement in the World War II was inevitable. Already in
1938 and 1939, the United States began to gear up its industrial might and military power.
Japan Attacks China
Also in 1931, the Japanese army launched attacks on Manchuria, quickly subduing it. Japan announced that
it had annexed Manchuria and renamed it "Manchukuo."
The U.S. refused to diplomatically acknowledge the addition of Manchuria to Japan, and Secretary of State
Henry Stimson said as much in the so-called "Stimson Doctrine." That response, however, was only
diplomatic. The U.S. threatened no military or economic retaliation.
In truth, the United States did not want to disrupt its lucrative trade with Japan. In addition to a variety of
consumer goods, the U.S. supplied resource-poor Japan with most of its scrap iron and steel. Most
importantly, it sold Japan 80% of its oil!! (Japan has few natural resources of its own).
In a series of naval treaties in the 1920s, the United States and Great Britain had endeavored to limit the size
of Japan's naval fleet. However, they had made no attempt to cut off Japan's supply of oil. When Japan
renewed aggression against China, it did so with American oil.
In 1937, Japan began a full-blown war with China, attacking near Peking (now Beijing) and Nanking.
Japanese troops killed not only Chinese soldiers, but women and children as well. The so-called "Rape of
Nanking" shocked Americans with its disregard of human rights.
American Responses
In 1935 and 1936, the United States Congress had passed Neutrality Acts to prohibit the U.S. from selling
goods to countries at war. The acts were ostensibly to protect the U.S. from falling into another war like
World War I. President Franklin D. Roosevelt signed the acts, although he did not like them because they
prohibited the U.S. from helping allies in need.
Still, the acts were not active unless Roosevelt invoked them, which he did not do in the case of Japan and
China. He favored China in the crisis, and by not invoking the 1936 act he could still shuttle aid to the
Chinese.
Not until 1939, however, did the United States begin to directly challenge continued Japanese aggression in
China. That year the U.S. announced it was pulling out of the 1911 Treaty of Commerce and Navigation
with Japan, signaling a coming end to trade with the empire. Japan continued its campaign through China,
and in 1940 Roosevelt declared a partial embargo of U.S. shipments of oil, gasoline, and metals to Japan.
That move forced Japan to consider drastic options. It had no intention of ceasing its imperial conquests,
and it was poised to move into French Indochina. With a total American resource embargo likely, Japanese
militarists began looking at the oil fields of the Dutch East Indies as possible replacements for American
oil. That presented a military challenge, though, because the American-controlled Philippines and the
American Pacific Fleet -- based at Pearl Harbor, Hawaii, -- were between Japan and the Dutch possessions.
In July 1941, the United States completely embargoed resources to Japan, and it froze all Japanese
assets in American entities. The American policies forced Japan to the wall. With the approval of
Japanese Emperor Hirohito, the Japanese navy began planning to attack Pearl Harbor, the Philippines, and
other bases in the Pacific in early December to open the route to the Dutch East Indies.
Ultimatum: The Hull Note
The Japanese kept diplomatic lines open with the United States on the off-chance they could negotiate and
hopefully end to the embargo. Any hope of that vanished on November 26, 1941, when U.S. Secretary of
State Cordell Hull handed the Japanese ambassador in Washington D.C. what has come to be known as the
"Hull Note."
The note said that the only way for the U.S. to remove the resource embargo was for Japan to:
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Remove all troops from China.
Remove all troops from Indochina.
End the alliance it had signed with Germany and Italy the previous year.
Japan could not accept the conditions. By the time Hull delivered his note to the Japanese diplomats,
imperial armadas were already sailing for Hawaii and the Philippines. World War II in the Pacific was only
days away.
Of course, war became a reality for the United States following the attack on Pearl Harbor in 1941. After the
United States declared war on Japan, Germany, recognized its alliance with Japan and declared war on the
United States. Suddenly, isolationist America found itself fighting a world war on two fronts. Participation
in the war brought about profound changes for the United States and the American people in the 1940s.
Japanese plan attack a year prior to Dec. 7, 1941
Japanese aircraft carrier prior to Pearl Harbor attack