The Great Depression and the New Deal

Essential Facts

• Franklin D. Roosevelt won the 1932 Presidential Election, ending more than a decade of Republican Presidents.
• Roosevelt set out to pull the nation out of the Great Depression by working with the Hundred Days Congress to establish the programs and policies of the New Deal.
• The New Deal included reforms that affected industries like banking and agriculture.
• Critics of the New Deal accused it of waste, inefficiency, and fostering dependency through programs that were based on Socialist principles.
• New Deal programs were challenged in lawsuits that reached the Supreme Court, which struck down key pieces of legislation as unconstitutional.
• Roosevelt responded with a scheme to expand the number of judges on the court. Both political parties criticized the plan, damaging Roosevelt’s reputation.
• Despite the criticism, Roosevelt was reelected in 1936.
• The Hatch Act (193) placed restrictions on federal employees.
• The New Deal remains controversial because it failed to end the Depression in the U.S. and significantly expanded the government’s role in the economy.

Significance

The New Deal is important to American History because it fundamentally transformed the role of the Federal Government in society. Although it introduced social welfare programs, supported labor rights, and made economic reform, the New Deal failed to end the Great Depression. It took the onset of World War II to help pull the nation back into prosperity. Sadly, American isolationism came to an end with the Attack on Pearl Harbor in 1941.

The Presidential Campaign of 1932

• Voters were frustrated and angry as the 1932 Presidential Election approached.
• Over 11 million workers were unemployed, and families faced worsening poverty.
• Herbert Hoover won the 1928 Election with the promise of “a chicken in every pot.”
• By 1931, Hoover’s promise was seen as empty, with widespread unemployment and economic struggles.
• Hoover was reluctantly renominated by Republicans at their Chicago convention.
• The Republican platform praised their antidepression efforts and weakly pledged to repeal national prohibition.
• Franklin Delano Roosevelt (FDR), a fifth cousin of Theodore Roosevelt, was the leading Democratic candidate.
• FDR was born into a wealthy New York family and graduated from Harvard.
• He served in the New York legislature, as Assistant Secretary of the Navy, and as New York Governor.
• FDR was known for his calm demeanor, contrasting with Theodore Roosevelt’s combative personality.

Herbert Hoover (1874–1964) — Hoover was a prominent humanitarian and administrator. He led the U.S. Food Administration during World War I, managing food supplies to support the war effort. Known for his efficient organization and promotion of voluntary conservation, he later became the 31st President of the United States, serving from 1929 to 1933 during the onset of the Great Depression.

1928 Presidential Election — In the 1928 Election, Republican Herbert Hoover defeated Democrat Al Smith. Hoover’s campaign emphasized prosperity under Republican leadership during the 1920s, while Smith faced challenges due to his Catholic faith and his opposition to Prohibition. The election revealed cultural divisions between rural, conservative voters and urban, progressive voting blocs. Hoover’s victory reinforced Republican dominance but foreshadowed challenges with the Great Depression on the horizon.

FDR: Politician in a Wheelchair

Roosevelt’s Paralysis

• Roosevelt contracted infantile paralysis in 1921, leaving him physically disabled.
• Before 1921, he was tall, athletic, handsome, and seen as witty but occasionally superficial and arrogant.
• The disease forced him to wear steel braces on his legs and changed his character.
• His suffering taught him patience, tolerance, compassion, and resilience.
• Roosevelt worked to regain some mobility, which changed his outlook on life.
• He once said that spending two years learning to move one toe made everything else seem simple.

Franklin Delano Roosevelt — The 32nd President of the United States, Franklin D. Roosevelt, served from 1933 to 1945. He led the nation during the Great Depression and World War II, implementing the New Deal to provide relief, recovery, and reform. As a transformative leader, he expanded the federal government’s role in the economy and foreign policy, fostering programs like Social Security and rallying the Allies to victory in WWII. Roosevelt is often referred to simply as “FDR.”

Infantile Paralysis — Commonly known as polio, infantile paralysis is a viral disease that causes nerve damage and muscle paralysis. It affected thousands, particularly children, in the early 20th century, including President Franklin D. Roosevelt. His battle with polio highlighted the need for research, leading to the founding of the March of Dimes and the eventual development of the polio vaccine.

Eleanor Roosevelt: The “Conscience of the New Deal”

• Eleanor Roosevelt was Roosevelt’s wife, distant cousin, and the niece of Theodore Roosevelt.
• Despite an unhappy childhood, she became a vocal advocate for the disadvantaged.
• Known as the “conscience of the New Deal,” she championed social justice causes.
• Eleanor played a significant role in FDR’s political campaigns, often referring to herself as “his legs.”
• She became the most active First Lady in U.S. history, influencing national policies through speeches, lobbying, and a syndicated newspaper column.
• She fought for the rights of the poor and oppressed.
• Eleanor was both criticized by conservatives and praised by liberals, making her a polarizing but important figure of the 20th Century.

Eleanor Roosevelt (1884–1962) — As First Lady from 1933 to 1945, Eleanor Roosevelt redefined the role through activism and advocacy. She championed civil rights, women’s rights, and social reforms while serving as Franklin D. Roosevelt’s trusted advisor. Her extensive public engagement and work with organizations like the United Nations after WWII solidified her legacy as a transformative figure in American and global humanitarian efforts.

Theodore Roosevelt (1858–1919) — Serving as the 26th President of the United States from 1901 to 1909, Roosevelt was a Progressive reformer and conservationist. He championed the “Square Deal” policies, regulated big business, and expanded national parks. Roosevelt also bolstered U.S. foreign policy with the Panama Canal’s construction and his “Big Stick Diplomacy,” emphasizing military strength and global influence.

FDR’s Political Appeal and Leadership

• Roosevelt was an exceptional speaker with a commanding presence and a pleasant voice.
• His speeches featured a sophisticated accent and powerful delivery, making him the leading orator of his time.
• FDR had a natural charm that he could use effectively in private conversations.
• As Governor of New York during the Great Depression, he promoted state spending to help alleviate human suffering.
• Though he valued frugality, he prioritized helping people over saving money.
• In a 1932 speech, he expressed concern for the “forgotten man,” gaining widespread support from struggling Americans.
• Wealthy critics labeled him a “traitor to his class” due to his focus on aiding the less fortunate.

Forgotten Man — A term popularized during the Great Depression, “The Forgotten Man” refers to ordinary Americans struggling with economic hardship. Franklin D. Roosevelt used the phrase in his speeches to highlight the plight of workers, farmers, and the unemployed. It symbolizes his commitment to policies like the New Deal, which aimed to uplift those overlooked by government and industry during economic crises.

Roosevelt’s Nomination and the Birth of the New Deal

• Democrats held their convention in Chicago in June 1932 and nominated Roosevelt.
• Al Smith, a former candidate, was pushed aside, straining his friendship with FDR.
• The Party Platform supported the repeal of Prohibition, criticized the “Hoover Depression,” and promised balanced budgets alongside major social and economic reforms.
• FDR broke tradition by flying to Chicago and accepting the nomination in person.
• He introduced the New Deal in his acceptance speech when he said, “I pledge you, I pledge myself to a new deal for the American people.”

Al Smith (1873–1944) — Smith was a Democratic politician and the first Catholic nominee for President in 1928. As New York’s Governor, he advocated for progressive reforms, including labor rights and government transparency. Smith’s campaign faced opposition due to his religion, stance against Prohibition, and urban background. His loss to Herbert Hoover highlighted deep cultural divides in the United States between rural and urban voters during the 1920s.

National Prohibition — National Prohibition was established by the 18th Amendment, ratified in 1919, and enforced by the Volstead Act. It banned the production, sale, and transportation of alcoholic beverages across the United States. It sought to reduce crime and social problems but led to widespread illegal activity, such as Bootlegging and Speakeasies, until its repeal by the 21st Amendment in 1933.

Presidential Hopefuls of 1932

Roosevelt’s 1932 Campaign Strategy and the New Deal

• Roosevelt ran an aggressive campaign, working hard to counter perceptions of his physical disability, using the phrase “Roosevelt Is Robust.”
• He called for a New Deal for the Forgotten Man, even though his speeches were often vague and contradictory.
• Many of his speeches were written by his “Brain Trust,” a group of young reform-minded intellectuals who later helped craft New Deal legislation.
• He promised a balanced budget and criticized Hoover’s deficits with slogans like “Throw the Spenders Out!” and “Out of the Red with Roosevelt.”
• The campaign embraced high spirits with the theme song “Happy Days Are Here Again.”

Brain Trust — The Brain Trust was a group of advisors to Franklin D. Roosevelt during his 1932 campaign and early Presidency. It consisted of academics, lawyers, and policy experts who helped design innovative programs to combat the Great Depression. Their ideas shaped key initiatives like Social Security and banking reforms, reflecting Roosevelt’s reliance on intellectual expertise to address economic and social challenges.

Herbert Hoover’s Struggles in the 1932 Campaign

• Hoover remained dedicated to fighting the Great Depression.
• His campaign slogans included “The Worst Is Past,” “It Might Have Been Worse,” and “Prosperity Is Just Around the Corner.”
• As the campaign faltered, Hoover reluctantly delivered speeches showing his support for free enterprise and personal initiative.
• Hoover warned that repealing the Smoot-Hawley Tariff would hurt cities, saying grass would grow “in the streets of a hundred cities.”
• His somber tone sharply contrasted with Roosevelt’s cheerful optimism and bold promises.

Smoot-Hawley Tariff (1930) — Enacted in 1930, the Smoot-Hawley Tariff raised U.S. import duties to protect domestic industries during the Great Depression. Sponsored by Senator Reed Smoot and Representative Willis Hawley, it triggered retaliatory tariffs from other countries, reducing international trade and worsening global economic conditions. The tariff was an example of protectionist policies that many historians believe made the Depression worse.

Hoover’s Humiliation in 1932

The 1932 Presidential Election marked a turning point in U.S. history as Franklin D. Roosevelt defeated incumbent Herbert Hoover during the Great Depression. The election highlighted the public’s demand for economic reform. Roosevelt’s campaign emphasized his New Deal proposals, which promised relief, recovery, and reform, contrasting Hoover’s perceived failure to address the economic crisis. This election realigned political power, establishing Democratic dominance in the Federal Government for years to come.

Roosevelt’s Victory

• Roosevelt won the election with 22,809,638 votes compared to Hoover’s 15,758,901.
• FDR secured 472 electoral votes, while Hoover managed only 59.
• Hoover carried only 6 Republican stronghold states.
• The election saw black voters, who were traditionally Republican, shift to the Democratic Party.
• Black Americans, severely impacted by the Great Depression as the “last hired and first fired,” became a key Democratic voting bloc, especially in Northern urban areas.

Voting Bloc — A voting bloc is a group of voters unified by shared interests, beliefs, or demographics who influence elections by voting together. These blocs often align based on factors like race, religion, socioeconomic status, or regional identity. During the New Deal Era, Franklin D. Roosevelt’s coalition included diverse blocs such as labor unions, African Americans, and urban working-class voters, which helped maintain Democratic dominance in national politics.

The 1932 Election: A Demand for Change

• The Great Depression damaged the Republican Party’s reputation.
• The 1932 Election was driven more by anti-Hoover sentiment than strong support for Roosevelt.
• Most voters sought change, endorsing the idea of a “new deal,” though the New Deal itself was not yet fully formed.
• Any strong Democratic candidate likely could have won the election in such a climate.

Great Depression — The Great Depression was a severe global economic downturn that lasted from 1929 to the early 1940s. Sparked by the Stock Market Crash (1929), it caused widespread unemployment, bank failures, and poverty in the United States. The crisis prompted significant government intervention under Franklin D. Roosevelt’s New Deal, which aimed to stabilize the economy, provide relief, and reform financial systems. It reshaped American society and economic policy.

The Lame Duck Period Before Roosevelt’s Inauguration

• Hoover was a lame-duck President from November 1932 until March 4, 1933.
• He was unable to implement long-term policies without Roosevelt’s cooperation, and Roosevelt refused to work with Hoover.
• Roosevelt avoided responsibility before taking office, famously saying, “It’s not my baby.”
• Hoover tried to tie Roosevelt to anti-inflationary policies that would have hindered New Deal reforms.
• Without cooperation, the U.S. economy struggled. One in four workers was unemployed, and many banks closed.
• Nervous Americans hoarded money, worsening the financial crisis.
• Some Hoover supporters accused Roosevelt of allowing the crisis to deepen to enhance his image as a savior upon taking office.

Lame-Duck President — A Lame-Duck President is an outgoing President who remains in office after the election of a successor. During this period, the President’s influence often diminishes as the focus shifts to the incoming administration. The 20th Amendment, ratified in 1933, shortened the lame-duck period by moving the presidential inauguration from March to January, reducing the gap between administrations.

Anti-Inflationary Policies — Economic measures aimed at controlling rising prices and preserving the value of money. Governments and central banks use tools like raising interest rates, reducing public spending, or limiting the money supply to curb inflation. These policies can stabilize economies but may slow growth or increase unemployment, requiring careful balance to avoid economic stagnation.

FDR and the Three R’s: Relief, Recovery, Reform

Roosevelt’s Inauguration: A Call to Action

• Roosevelt was inaugurated on March 4, 1933.
• His inaugural address was broadcast nationwide and inspired hope among Americans.
• FDR criticized the “money changers” for causing the economic disaster.
• He compared the fight against the Great Depression to waging war against an armed enemy and famously said, “Let me assert my firm belief that the only thing we have to fear is fear itself.”

Roosevelt’s Bold Start: The Hundred Days

• Roosevelt declared a nationwide Bank Holiday from March 6 to 10, 1933, to stabilize the financial system.
• He called a Special Session of Congress, dominated by Democrats, to address the national emergency.
• During the “Hundred Days Congress,” a flood of legislation was approved from March 9 to June 16, 1933.
• The laws were a mix of progressive ideas and new measures designed to combat the immediate crisis.

Special Session of Congress — A Special Session of Congress is a meeting called by the President outside the regular legislative schedule to address urgent matters, such as national crises or pressing legislation. For example, President William Howard Taft convened a special session in 1909 to address tariff reform, leading to the Payne-Aldrich Tariff Act.

Bank Holiday (1933) — Declared by Franklin D. Roosevelt in March 1933, the bank holiday temporarily closed all U.S. banks to prevent runs during the Great Depression. This pause allowed the government to inspect banks’ solvency and restore public confidence. Following the holiday, Roosevelt signed the Emergency Banking Act, which stabilized the financial system and led to the reopening of sound banks.

Hundred Days Congress — The Hundred Days Congress refers to the special session of Congress held during the first 100 days of Franklin D. Roosevelt’s Presidency in 1933. During this period, lawmakers enacted key New Deal legislation, including financial reforms, public works programs, and agricultural assistance. These efforts aimed to combat the Great Depression and set a precedent for government intervention in economic recovery.

The Three R’s of the New Deal

• The New Deal focused on three main goals: relief, recovery, and reform.
• Short-term objectives prioritized relief and immediate economic recovery, especially during the first two years.
• Long-term goals were intended to create permanent recovery and reform the systems that caused the economic collapse.
• The three objectives sometimes overlapped and conflicted with each other, creating challenges in implementation.
• Despite obstacles, the massive New Deal program progressed.

Roosevelt and Congressional Support for New Deal Legislation

• Roosevelt took a strong leadership role, pushing Congress to pass New Deal measures.
• A panicked Congress, aligned with national sentiment, quickly approved Roosevelt’s “must legislation.”
• Congress granted Roosevelt extraordinary powers, including delegated legislative authority.
• Some lawmakers criticized Congress’s willingness to give in to Roosevelt’s demands.

Delegated Legislative Authority — Delegated legislative authority occurs when a legislative body, such as Congress, grants power to an executive agency or entity to create rules or regulations within specific guidelines. This delegation allows for the efficient implementation of complex policies, such as New Deal programs during the Great Depression. Critics argue it can blur the Separation of Powers, while supporters see it as necessary for addressing complex issues.

Roosevelt’s Leadership and the Foundations of the New Deal

• Roosevelt embraced leadership, often making decisions based on intuition and adapting his plans as circumstances changed.
• The public, desperate for action, supported movement in any direction over inaction.
• The Hundred Days Congress quickly passed many New Deal programs.
• Later, long-term reforms, such as unemployment insurance, old-age insurance, minimum-wage laws, and child labor restrictions, were added.
• These measures were based on ideas from the pre-World War I Progressive Movement, which was delayed by war and the conservative approach of the 1920s.
• Many New Deal reforms mirrored social welfare policies adopted earlier by advanced European nations, highlighting the U.S.’s lag in these areas.

Unemployment Insurance — Insurance that provides temporary financial assistance to workers who lose their jobs through no fault of their own. Established as part of the Social Security Act of 1935, it aims to stabilize income during economic downturns and reduce the impact of job loss on families and communities.

Old Age Insurance — Old age insurance, created under the Social Security Act of 1935, ensures financial support for retired workers through a payroll tax-funded system. It marked a major shift toward federal involvement in protecting elderly Americans from poverty after retirement.

Minimum Wage Laws — Minimum Wage Laws establish the lowest hourly wage employers can legally pay workers. These laws emerged during the Progressive Era to combat exploitation and improve living standards for low-income workers. The Fair Labor Standards Act of 1938 set the first federal minimum wage in the U.S.

Child Labor Restrictions — Child Labor Restrictions limit the employment of minors to protect their safety, education, and well-being. The Fair Labor Standards Act of 1938 outlawed oppressive child labor, setting minimum age requirements and restricting work hours for young workers in many industries.

Fair Labor Standards Act (1938) — The Fair Labor Standards Act (FLSA) established key labor protections in the United States, including a federal minimum wage, maximum workweek hours, and overtime pay requirements. It also prohibited most forms of child labor in interstate commerce. Enacted during Franklin D. Roosevelt’s New Deal, the FLSA aimed to improve working conditions, reduce exploitation, and ensure a fair standard of living for American workers.

Roosevelt Tackles Money and Banking

Emergency Banking Act of 1933

• The banking crisis required quick action to stabilize the financial system.
• Congress drafted and passed the Emergency Banking Act (1933) in eight hours.
• It gave the President authority to regulate banking transactions and foreign exchange.
• It also enabled the reopening of solvent banks to restore public confidence in the banking system.

Emergency Banking Act (1933) — Passed in March 1933 during Franklin D. Roosevelt’s first days in office, this act authorized the federal government to stabilize the banking system. It allowed the Treasury Department to inspect banks and reopen only those deemed solvent. The law aimed to restore public confidence in the financial system after widespread bank failures during the Great Depression.

Solvent Banks — Financial institutions with enough assets to cover their liabilities and meet obligations. During the Great Depression, solvent banks were those deemed financially stable enough to reopen after inspections conducted under the Emergency Banking Act (1933). These inspections helped restore public trust by ensuring that only reliable banks resumed operations, stabilizing the U.S. banking system.

Roosevelt’s First Fireside Chat

• Roosevelt used radio broadcasts, known as “Fireside Chats,” to communicate directly with the nation.
• The first one was heard by approximately 35 million people.
• Roosevelt reassured the public that reopened banks were safer than hoarding money “under the mattress.”
• His message restored confidence, leading to the reopening of banks across the nation.

Fireside Chats — Between 1933 and 1944, President Franklin D. Roosevelt gave a series of informal radio addresses. These broadcasts explained government policies, such as New Deal programs, directly to the American people in simple and reassuring language. They fostered a sense of connection between Roosevelt and the public, building trust during challenging times like the Great Depression and World War II.

Banking Reforms and the Move to Managed Currency

• The Glass-Steagall Banking Reform Act, passed during the Hundred Days Congress, strengthened public trust in banks.
• It established the Federal Deposit Insurance Corporation (FDIC) to insure individual deposits up to $5,000 (later increased).
• The FDIC ended the widespread bank failures that had plagued the U.S. since Andrew Jackson was President.
• Roosevelt ordered private gold holdings to be exchanged for paper currency to stop hoarding and stabilize the gold reserve.
• The U.S. was removed from the gold standard, and the gold-payment clause in contracts was canceled.
• These actions paved the way for a “managed currency,” allowing more flexible monetary policies.

Glass-Steagall Banking Reform Act (1933) — This act separated commercial and investment banking to reduce risky financial practices that contributed to the Great Depression. It also established the Federal Deposit Insurance Corporation (FDIC) to protect bank deposits and restore confidence in the banking system.

Federal Deposit Insurance Corporation (FDIC) — Created by the Glass-Steagall Act in 1933, the FDIC insures individual bank deposits, initially up to $2,500, to prevent bank runs and promote stability in the financial system.

Private Gold Holdings — In 1933, President Roosevelt restricted private gold ownership through an executive order requiring citizens to exchange their gold for currency. This move aimed to increase federal control over monetary policy during the Great Depression.

Gold Reserve — Gold Reserves refer to gold held by a government or central bank to support currency value and stabilize the economy. In 1934, the U.S. centralized its gold reserves in the Federal Reserve to support Roosevelt’s monetary reforms.

Gold Payment Clause — Gold Payment clauses were contractual agreements requiring payment in gold or equivalent value. The government nullified these clauses in the 1930s to prevent debt defaults and promote currency flexibility during economic recovery efforts.

Managed Currency — Managed Currency refers to a monetary system in which the government actively regulates the money supply and exchange rates. During the Great Depression, the U.S. adopted this approach to control inflation and stimulate economic recovery, including adjusting the dollar’s value relative to gold.

Roosevelt’s Managed Currency and Gold Policy

• Roosevelt’s “managed currency” sought to use inflation to ease debt burdens and boost production.
• The Treasury increased gold purchasing prices, raising gold’s value from $21 per ounce in 1933 to $35 per ounce in 1934.
• This expanded the money supply as gold holders exchanged it for higher prices.
• Critics opposed the policy, deriding the resulting “baloney dollar.”
• In February 1934, FDR ended the gold-buying program and reinstated a limited gold standard for international trade.
• The U.S. pledged to pay foreign bills in gold at $35 per ounce while prohibiting domestic gold circulation, making gold coins collectible.

Inflation — The rate at which the general level of prices for goods and services rises over time, reducing purchasing power. It occurs when demand outpaces supply or production costs, such as wages and raw materials, increase. Moderate inflation is a natural part of economic growth, but excessive inflation can destabilize economies. Like the Federal Reserve, central banks manage inflation through monetary policies, including adjusting interest rates and controlling the money supply.

Creating Jobs for the Jobless

Addressing Unemployment: Roosevelt’s Immediate Focus

• Unemployment reached its highest historical level. 1 in 4 workers was jobless when Roosevelt took office.
• Tackling unemployment took priority, even over banking reforms.
• Roosevelt embraced federal spending to help the unemployed and stimulate economic recovery.
• His strategy included “priming the pump,” a metaphor for jump-starting the economy by injecting government funds.

Unemployment — Unemployment occurs when individuals capable of working are without jobs and actively seeking employment. During the Great Depression, unemployment in the United States reached unprecedented levels, peaking at 25% in 1933. The crisis prompted significant government intervention, including New Deal programs like the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA), which provided job opportunities to millions.

Priming the Pump — “Priming the Pump” refers to government spending designed to stimulate economic growth by increasing demand during periods of economic downturn. During the Great Depression, President Roosevelt’s New Deal programs used this approach by funding public works projects and relief efforts to create jobs and inject money into the economy. The goal was to revive economic activity and reduce unemployment through direct government intervention.

The Civilian Conservation Corps (CCC)

• Created during the Hundred Days Congress, the CCC became one of the most popular New Deal programs.
• It employed about 3 million young men in government-run outdoor camps.
• Workers performed tasks like reforestation, firefighting, flood control, and swamp drainage.
• Recruits sent most of their earnings home to support their families.
• The program conserved both human and natural resources.
• Some critics complained of “militarizing” youth and joked about future pension claims because of exposure to poison ivy.

Reforestation — Reforestation involves replanting trees in areas where forests have been depleted. During the Great Depression, programs like the Civilian Conservation Corps (CCC) under the New Deal employed workers to plant millions of trees, combat soil erosion, and restore ecological balance, promoting both environmental conservation and economic recovery.

Natural Resources — Materials provided by the Earth, such as forests, water, minerals, and fossil fuels, that sustain human life and economic activity. During the New Deal Era, conservation efforts focused on managing these resources responsibly, ensuring their sustainable use while creating jobs through initiatives like reforestation and infrastructure development.

Early Relief Efforts: FERA, AAA, and HOLC

• The Federal Emergency Relief Act focused on immediate relief for unemployed adults.
• The Federal Emergency Relief Administration (FERA), led by Harry L. Hopkins, distributed about $3 billion to states for direct aid or wages on work projects.
• Harry Hopkins, a close adviser to Roosevelt, was known for his dedication and influential role.
• The Agricultural Adjustment Act (AAA) allocated funds to help farmers pay their mortgages.
• The Home Owners’ Loan Corporation (HOLC) refinanced nonfarm home mortgages, aiding about 1 million households.
• HOLC also supported banks holding mortgages and solidified middle-class homeowner support for the Democratic Party.

Harry L. Hopkins (1890–1946) — A key advisor to Roosevelt, Hopkins played a major role in the New Deal. He directed relief programs like the Federal Emergency Relief Administration (FERA) and the Works Progress Administration (WPA), creating jobs for millions during the Great Depression. Hopkins later became a vital figure in coordinating wartime efforts as an advisor during World War II.

Federal Emergency Relief Act (1933) — This act established the Federal Emergency Relief Administration (FERA) to provide direct aid to states and local governments. It funded public works projects and offered financial assistance to unemployed Americans during the Great Depression.

Agricultural Adjustment Act (1933) — This act aimed to reduce agricultural overproduction and raise crop prices. It paid farmers to cut production of specific crops and livestock, stabilizing farm incomes during the Great Depression. However, it was criticized for displacing tenant farmers and sharecroppers.

Home Owners’ Loan Corporation — Created in 1933 as part of the New Deal, this agency refinanced home mortgages to prevent foreclosures. It offered low-interest, long-term loans to struggling homeowners, stabilizing housing markets and providing economic relief.

Home Mortgage — A Home Mortgage is a loan used to purchase real estate, with the property serving as collateral. During the Great Depression, widespread unemployment made it difficult for Americans to meet mortgage payments, prompting federal programs like the Home Owners’ Loan Corporation to provide refinancing assistance.

Tenant Farmers — People who rent farmland from landowners to grow crops, typically paying rent in cash or a share of the harvest. During the Great Depression, many Tenant Farmers faced economic hardship due to declining crop prices and displacement caused by New Deal agricultural policies like the Agricultural Adjustment Act.

Sharecroppers — Farmers who work land owned by someone else in exchange for a share of the crops produced. Mostly in the South, sharecroppers, often poor and African American, struggled with poverty and exploitation. New Deal programs sometimes displaced them, as subsidies favored landowners who reduced the acreage and number of fields they planted.

The Civil Works Administration (CWA)

• The CWA was created in late 1933 to address unemployment.
• It operated as a branch of the FERA under Harry Hopkins.
• The CWA provided temporary jobs during the harsh winter of 1933–1934.
• Workers were employed in tasks like leaf raking and other “make-work” projects that were criticized as “boondoggling.”
• Critics mocked the initiative, joking, “The only thing we have to fear is work itself.”

Civil Works Administration — Established in 1933 as part of the New Deal, the Civil Works Administration (CWA) provided temporary jobs during the Great Depression. It employed millions of workers on public projects such as road construction, school building, and park improvements, offering immediate economic relief and contributing to national infrastructure.

Boondoggling — Boondoggling refers to work perceived as unnecessary or wasteful, often associated with certain New Deal programs like the CWA. Critics used the term to describe projects they viewed as frivolous, even though many such initiatives aimed to provide employment and economic stimulus during the Great Depression.

A Day for Every Demagogue

Emergency Relief and the Rise of Demagogues

• Direct federal relief helped sustain the nation during the severe winter of 1933–1934.
• Persistent unemployment and suffering revealed the need for continued and expanded relief efforts.
• Demagogues like Father Charles Coughlin rose to prominence by exploiting public discontent.
• Coughlin, a Catholic priest from Michigan, gained a large following with his radio broadcasts promoting “Social Justice.”
• Initially anti–New Deal, his speeches became increasingly anti-Semitic, fascist, and inflammatory.
• He had an audience of about 40 million before being shut down in 1942 by church authorities.

Demagogue — A political leader who gains support by appealing to popular desires, emotions, and prejudices rather than using rational arguments. They often exploit economic or social unrest to influence public opinion, sometimes undermining democratic principles in the process.

Father Charles Coughlin — Father Charles Coughlin was a Catholic priest and influential radio broadcaster during the Great Depression. Initially supporting Franklin D. Roosevelt and the New Deal, he later became a critic, advocating populist and anti-Semitic views. His rhetoric gained widespread attention, making him a prominent, though controversial, demagogue of the era.

Senator Huey Long and the “Share Our Wealth” Program

• Senator Huey P. Long of Louisiana was a prominent agitator known for his bold, populist rhetoric.
• He promoted the “Share Our Wealth” program, promising to make “Every Man a King” by giving each family $5,000, supposedly funded by taxing the wealthy.
• Long’s style and tactics earned him widespread attention and criticism. Journalist H. L. Mencken characterized his ally Gerald L. K. Smith as an over-the-top public speaker.
• Concerns grew that Long might become a fascist dictator.
• His political rise ended when he was assassinated in the Louisiana state capitol in 1935.

Huey P. Long (1893–1935) — An inspirational and controversial politician, Long served as Louisiana’s governor and U.S. senator during the 1920s and 1930s. Known as “The Kingfish,” he championed populist policies and aggressively centralized political power to implement economic and social reforms for the poor.

Populist — A Populist advocates for the interests of ordinary people, often against perceived elite control. Huey P. Long embodied populism by addressing economic inequality and advocating for wealth redistribution during the Great Depression.

Share the Wealth Program — Huey P. Long’s Share the Wealth Program proposed redistributing wealth by capping personal fortunes and providing benefits such as a guaranteed income, free education, and pensions. This plan gained significant public support as an alternative to the New Deal but was criticized because it was impractical.

Long Assassination (1935) — Huey P. Long was assassinated in 1935 at the Louisiana State Capitol by Carl Weiss, reportedly over a political dispute. His death ended his national political ambitions, including a potential 1936 Presidential Campaign, and left his Share the Wealth movement without its central leader.

H. L. Mencken (1880–1956) — Mencken was an influential journalist, satirist, and cultural critic during the early 20th Century. Known for his sharp wit and skepticism, he critiqued American democracy, religion, and middle-class values. His works, such as The American Mercury, made him a leading figure in the literary and intellectual circles of his time.

Gerald L. K. Smith (1898–1976) — Smith was a controversial political activist and public speaker during the 1930s and 1940s. Initially aligned with Huey P. Long’s Share the Wealth movement, he later became known for his far-right views, including anti-Semitic rhetoric and staunch Nationalism, which hurt his political career.

Dr. Francis Townsend and the Old-Age Pension Plan

• Dr. Francis E. Townsend, a retired California physician, proposed a plan to help senior citizens.
• It promised $200 per month to individuals aged 60 or older, with the requirement that the money be spent within the month.
• The proposal gained the support of about 5 million older Americans.
• Critics estimated the plan would cost half of the national income, making it financially impractical.

Francis E. Townsend (1867–1960) — Townsend was a physician and social reformer best known for proposing the Townsend Plan during the Great Depression. This plan advocated for monthly pensions of $200 for Americans aged 60 and older, funded by a national sales tax. Townsend’s ideas gained significant public support and influenced the development of the Social Security Act (1935), though his exact plan was never fully implemented.

The Works Progress Administration (WPA)

• The WPA was created in 1935 to address unemployment and public unrest.
• It sought to provide jobs on practical projects rather than direct aid.
• The WPA, overseen by Harry Hopkins, spent about $11 billion on public works, such as buildings, bridges, and roads.
• Some projects, like cricket control in Wyoming and a monkey pen in Oklahoma City, were criticized as frivolous.
• Critics mocked the WPA, claiming it stood for “We Provide Alms.”
• Over 8 years, the WPA provided jobs to nearly 9 million people, focusing on employment rather than direct relief.

Works Progress Administration — Established in 1935 as part of Franklin D. Roosevelt’s New Deal, the Works Progress Administration (WPA) provided jobs for millions of unemployed Americans. It funded public projects like roads, schools, and parks and supported arts and cultural programs. The WPA aimed to combat the economic effects of the Great Depression and improve national infrastructure.

Alms — Alms refer to charitable donations given to assist the poor or needy, often in the form of money, food, or goods. During the Great Depression, many Americans relied on Alms from private charities and religious organizations to survive the widespread poverty and economic struggles of the era.

WPA Support for Cultural and Educational Projects

• The WPA provided part-time jobs for needy high school and college students and unemployed white-collar workers, including actors, musicians, and writers.
• Notable WPA projects included the Federal Writers’ Project and the Federal Art Project.
• Critics derided projects like tap dance lessons and public art as frivolous uses of taxpayer money.
• The program supported artistic talent, preserved self-respect, and resulted in over one million pieces of public art.

Federal Writers’ Project (FWP) — The Federal Writers’ Project was established in 1935 as part of the Works Progress Administration. It provided employment to writers during the Great Depression. Participants produced guidebooks, oral histories, and folklore collections, including narratives from formerly enslaved people. The FWP preserved cultural heritage while offering financial relief to unemployed authors, journalists, and other literary professionals.

Federal Art Project (FAP) — The Federal Art Project (FAP) was started in 1935 under the Works Progress Administration. It provided employment for artists during the Great Depression. It supported the creation of murals, paintings, sculptures, and community art programs, often displayed in public buildings and schools. The FAP aimed to promote American art, make it accessible to the public, and provide financial relief to struggling artists while documenting the era’s social and cultural challenges of the Great Depression.

John Steinbeck (1902–1969) —Steinbeck was a renowned American author whose works captured the struggles of ordinary people during the Great Depression. His novels, such as The Grapes of Wrath and Of Mice and Men, depicted themes of poverty, social injustice, and resilience. These themes made Steinbeck a voice for those affected by the Depression and earned him a Nobel Prize in Literature in 1962.

Dorothea Lange (1895–1965) — Lange was a prominent photographer whose work during the Great Depression documented the hardships faced by Americans. Employed by the Farm Security Administration, her iconic images, like Migrant Mother, captured the plight of displaced farmers and workers.

A Helping Hand for Industry and Labor

The National Recovery Administration (NRA)

• The NRA sought to provide relief, recovery, and reform.
• It targeted assistance for industry, labor, and the unemployed.
• Over 200 industries developed “fair competition codes” to reduce working hours and spread employment.
• Maximum working hours and minimum wages were established to standardize labor conditions.
• Workers gained the right to organize and bargain collectively with representatives of their choice.
• Anti-union “yellow-dog contracts” were banned, and restrictions were placed on child labor practices.

National Recovery Administration (NRA) — The NRA, established in 1933 under the National Industrial Recovery Act, sought to combat the Great Depression by stabilizing industries and promoting fair labor practices. It encouraged businesses to adopt codes setting minimum wages, maximum work hours, and fair pricing. The NRA used the Blue Eagle symbol to signify participation. Although declared unconstitutional in 1935, the NRA influenced later labor reforms and economic policies.

Fair Competition Codes — Agreements established under the National Recovery Administration during the Great Depression. These codes regulated wages, prices, and production to stabilize industries, reduce competition, and improve labor standards. They were part of efforts to revive the economy but were criticized for favoring larger businesses.

Minimum Wage — Minimum Wage Laws set a legal baseline for hourly pay, ensuring workers receive a fair income. First established under the Fair Labor Standards Act (1938), the Minimum Wage was intended to reduce exploitation, raise living standards, and promote economic fairness.

Collective Bargaining — The process by which employers and labor unions negotiate wages, hours, and working conditions. It became a fundamental right under the National Labor Relations Act (1935), strengthening workers’ ability to advocate for fair treatment.

Yellow Dog Contracts — Agreements requiring workers to renounce union membership as a condition of employment. Common in the early 20th Century, these contracts were outlawed by the Norris-LaGuardia Act (1932) to protect workers’ rights to organize and join unions.

Public Enthusiasm for the NRA

• The NRA’s Fair Competition Codes required sacrifices from both labor and management, making recovery challenging.
• Patriotic rallies and parades promoted the NRA, including a massive event with 200,000 marchers in New York City.
• The Blue Eagle became the NRA’s symbol, with by the slogan “We Do Our Part.”
• Businesses displayed the Eagle to show compliance with NRA codes.
• The Philadelphia Eagles football team was named in honor of the NRA’s symbol.
• While enthusiasm initially spurred a business upswing, Roosevelt cautioned that “We cannot ballyhoo our way to prosperity.”

The Decline and End of the NRA

• The NRA faced challenges as it demanded sacrifice from labor, industry, and the public.
• Critics referred to the NRA as “National Run Around” and “Nuts Running America.”
• Henry Ford disparaged the NRA’s symbol, calling it “that damn Roosevelt buzzard.”
• Dishonest businesses, known as “chiselers,” displayed the NRA Blue Eagle but secretly violating NRA codes.
• In 1935, the Supreme Court invalidated the NRA in the Schechter “sick chicken” case.
• The Court ruled Congress could not delegate legislative powers to the Executive Branch and that interstate commerce laws did not apply to local businesses like the Schechter Poultry Company.
• Roosevelt was frustrated by the Court’s decision but was ultimately relieved of a failing program.

Schechter Poultry Corp. v. United States (1935) — In the 1935 Supreme Court case A.L.A. Schechter Poultry Corp. v. United States, the Court unanimously ruled that the National Industrial Recovery Act (NIRA) was unconstitutional. The decision held that Congress had improperly delegated legislative power to the Executive Branch and that the NIRA exceeded federal authority under the Commerce Clause. The decision limited New Deal regulatory efforts.

The Public Works Administration (PWA)

• The PWA was created with the NRA to promote industrial recovery and provide unemployment relief.
• It was led by Harold L. Ickes, the Secretary of the Interior and a former Progressive.
• The agency focused on long-term recovery, spending over $4 billion on 34,000 projects.
• Projects included public buildings, highways, and parkways.
• The Grand Coulee Dam on the Columbia River was a major achievement. It is the largest human-made structure since the Great Wall of China.
• Initially seen as wasteful during the Depression, the Dam enabled irrigation for millions of acres and generated vast amounts of electricity.
• The Dam’s true value became evident during World War II and postwar prosperity when it helped transform the region with water and power resources.

Public Works Administration (PWA) — Created in 1933 as part of the New Deal, the PWA funded large-scale infrastructure projects to stimulate economic recovery and create jobs. It supported the construction of schools, hospitals, roads, and dams, improving national infrastructure while addressing unemployment during the Great Depression.

Harold L. Ickes (1874–1952) — Ickes served as the Secretary of the Interior from 1933 to 1946 and directed the Public Works Administration. Known for his integrity and dedication, Ickes oversaw numerous New Deal infrastructure projects.

Grand Coulee Dam — Constructed in 1942 with funding from the Public Works Administration, the Grand Coulee Dam in Washington State became one of the largest infrastructure projects of the New Deal, providing hydroelectric power, irrigation for agriculture, and economic development to the Pacific Northwest.

Columbia River — The Columbia River is the largest river in the Pacific Northwest, flowing over 1,200 miles from British Columbia, Canada, to the Pacific Ocean. During the New Deal, it became a focal point for major infrastructure projects like the Grand Coulee Dam, which harnessed its power for hydroelectricity and irrigation. These developments helped transform the region’s economy and supported agricultural and industrial growth.

The Repeal of Prohibition Aids Economic Recovery

• The repeal of Prohibition helped the economy, provided federal revenue, and created jobs.
• FDR encouraged the Hundred Days Congress to legalize light wine and beer with an alcohol content of up to 3.2% by weight.
• A $5 tax was placed on every barrel of 3.2% beer and wine produced.
• Critics opposed to alcohol denounced FDR as “a 3.2 percent American.”
• Prohibition ended with the ratification of the 21st Amendment in late 1933.
• The reopening of saloons marked the return of legalized alcohol sales.

21st Amendment — Ratified in 1933, the 21st Amendment repealed the 18th Amendment, ending Prohibition in the United States. It restored the legal sale and distribution of alcohol, which helped generate tax revenue and reduce organized crime associated with illegal alcohol production. The Amendment also returned regulatory authority over alcohol to individual states, allowing them to establish their own laws.

Paying Farmers Not to Farm

Farmers Struggle During the Depression

• Farmers faced low prices and overproduction of crops, which had been a problem since 1918.
• The Great Depression worsened conditions for farmers, leading to widespread mortgage foreclosures.
• Some farmers burned corn as fuel due to its low market value.
• Protests erupted as farmers tried to block shipments of crops to already oversaturated markets.
• Martial law was declared in several Iowa counties to address volatile unrest among farmers.

Foreclosure — Foreclosure is the legal process by which a lender seizes and sells a property when the borrower fails to repay their mortgage. During the Great Depression, widespread unemployment led to a surge in foreclosures, prompting New Deal measures like the Home Owners’ Loan Corporation to assist struggling homeowners and stabilize the housing market.

Martial Law — Refers to the temporary imposition of direct military control over civilian government functions during emergencies or unrest. It suspends ordinary laws and often includes restrictions on civil liberties. Historically, martial law has been used to maintain order and security during labor strikes or wartime.

The Agricultural Adjustment Administration (AAA)

• The AAA was created by Congress to address the farming crisis through “artificial scarcity.”
• It sought to establish “parity prices,” restoring the purchasing power of farm products to their pre-war levels.
• Farmers were paid to reduce acreage, helping eliminate surpluses.
• Funds for these payments came from taxes on processors of farm products like flour millers.
• Processors passed these costs on to consumers, who indirectly funded the program.

Agricultural Adjustment Administration (AAA) — Established in 1933 under the New Deal, the AAA sought to reduce agricultural overproduction and raise farm incomes. It provided subsidies to farmers in exchange for limiting the production of crops and livestock, which helped stabilize prices. However, its methods sometimes displaced tenant farmers.

Artificial Scarcity — Refers to the deliberate reduction of goods or resources to increase their value. During the Great Depression, the Agricultural Adjustment Administration used this strategy to pay farmers to cut production, aiming to raise agricultural prices.

Parity Prices — Refers to prices that are set to provide farmers with purchasing power equivalent to a pre-World War I standard. This concept, implemented through New Deal programs like the AAA, was intended to stabilize agricultural incomes by aligning farm prices with historical levels of prosperity.

Criticism of the Agricultural Adjustment Administration

• The AAA faced early issues, starting after much of the 1933 cotton crop was planted, leading to fields being plowed under.
• Millions of pigs were purchased and slaughtered, and some of the meat was distributed to relief programs, while some were used as fertilizer.
• The destruction of food during widespread hunger drew strong criticism, especially from Progressives.
• The process raised farm income but faced backlash from farmers, processors, consumers, and taxpayers.
• Paying farmers not to farm increased unemployment, contradicting the New Deal’s goal of creating jobs.
• In 1936, the Supreme Court declared the AAA’s taxation provisions unconstitutional, ending the program.

The Soil Conservation Act and the Second Agricultural Adjustment Act

• In response to the Supreme Court’s rejection of the AAA, Congress passed the Soil Conservation and Domestic Allotment Act (1936).
• Farmers were paid to plant soil-conserving crops, such as soybeans, or leave land fallow (unplanted).
• The Supreme Court approved the new program.
• The Second Agricultural Adjustment Act (1938) replaced the original AAA, continuing conservation payments.
• Farmers adhering to acreage restrictions for crops like cotton and wheat qualified for parity payments.
• The new AAA sought to provide farmers with fair prices and a larger share of the national income. This achieved partial success.

Soil Conservation and Domestic Allotment Act (1936) — This act replaced the Agricultural Adjustment Act after it was declared unconstitutional. It encouraged farmers to adopt soil conservation practices by providing subsidies for reducing erosion and planting soil-enriching crops. This legislation aimed to address environmental degradation and stabilize farm incomes during the Great Depression.

Second Agricultural Adjustment Act (1938) — This act revived many provisions of the original Agricultural Adjustment Act but operated within constitutional guidelines. It introduced marketing quotas and price support mechanisms to reduce overproduction and maintain parity prices for farmers, ensuring a more stable agricultural economy.

Marketing Quotas — Marketing Quotas limit the amount of a particular crop or product that farmers can sell to control supply and stabilize prices Introduced in the Second Agricultural Adjustment Act of 1938, these Quotas helped prevent market oversaturation during the Great Depression.

Price Support Mechanisms — Government policies that maintain minimum prices for agricultural products. They include subsidies and loans to farmers, ensuring their income remains stable regardless of market fluctuations, as in the New Deal agricultural reforms.

Overproduction — This occurs when the supply of goods, particularly crops, exceeds market demand. This leads to falling prices and financial losses for producers. Addressing overproduction was a key goal of New Deal programs like the Agricultural Adjustment Administration.

Parity — Refers to setting farm product prices at levels that provide purchasing power equivalent to a base period, often pre-World War I. This concept helped strengthen New Deal agricultural policies, ensuring farmers could sustain their livelihoods despite economic instability.

Dust Bowls and Black Blizzards

The Dust Bowl Disaster

• A severe drought struck the Trans-Mississippi Great Plains in late 1933.
• High winds lifted powdery topsoil, darkening skies, and devastating farms from eastern Colorado to western Missouri.
• The affected region became known as the Dust Bowl.
• Farmers wore protective masks as they watched their land erode and blow away.
• A tragic example of the disaster’s severity was the suffocation of a seven-year-old boy in Kansas.
• Many victims viewed the catastrophe as a sign of the world’s end or a divine event.

Drought — A prolonged period of insufficient rainfall that causes water shortages and has adverse effects on agriculture. During the 1930s, severe drought conditions contributed to widespread crop failure in the central United States, worsening the economic struggles of the Great Depression.

Trans-Mississippi Great Plains — A vast region west of the Mississippi River known for its fertile farmland. During the 1930s, this area was severely impacted by drought and over-farming, leading to soil degradation that contributed to the Dust Bowl.

Dust Bowl — The Dust Bowl was an environmental disaster that occurred in the Trans-Mississippi Great Plains in the 1930s. Intense drought and poor farming practices caused massive dust storms that destroyed crops, displaced farmers, and led to significant migration, particularly to states like California.

Human Factors Behind the Dust Bowl

• Drought and wind started the Dust Bowl, but human agricultural practices made it worse.
• High grain prices during World War I led farmers to cultivate vast areas of marginal land.
• Dry-farming techniques and mechanization, like steam tractors and disk plows, altered farming across the Great Plains.
• These innovations uprooted more sod than traditional methods, leaving the topsoil vulnerable to erosion by wind.

The Dust Bowl Migration

• The Dust Bowl forced tens of thousands of farmers off their land.
• Between 1933 and 1938, about 350,000 Oklahomans and Arkansans, called “Okies” and “Arkies,” migrated to southern California.
• Many traveled in makeshift vehicles referred to as “junkyards on wheels.”
• Their hardships were famously depicted in John Steinbeck’s The Grapes of Wrath (1939), often compared to Uncle Tom’s Cabin for its social impact.

The Grapes of Wrath — Published in 1939, John Steinbeck’s The Grapes of Wrath tells the story of the struggles of the Joad family. During the Dust Bowl, they are displaced from their Oklahoma farm and migrate to California in search of work and stability. The novel highlights themes of poverty, social justice, and resilience, offering a sad critique of economic inequality and the plight of migrant workers during the Great Depression.

Migrant Workers — People who move from place to place to find employment, often in agriculture or seasonal industries. During the Great Depression, many families, particularly from the Dust Bowl Region, became Migrant Workers, traveling to states like California in search of jobs. They faced harsh working conditions, low wages, and discrimination.

New Deal Efforts to Aid Farmers

• The Frazier-Lemke Farm Bankruptcy Act (1934) allowed a five-year suspension of mortgage foreclosures, but the Supreme Court struck it down.
• A revised version with a three-year grace period was later upheld by the Court.
• In 1935, FDR created the Resettlement Administration to relocate struggling farmers to better farmland.
• Over 200 million trees were planted on the prairies by the Civilian Conservation Corps to serve as windbreaks.
• Critics, such as one governor, mocked the tree-planting effort as attempting to “grow hair on a bald head.”

Frazier-Lemke Farm Bankruptcy Act (1934) — This New Deal legislation was intended to assist struggling farmers during the Great Depression. It allowed farmers facing foreclosure to retain their property by delaying debt repayment and reducing interest rates. Though initially ruled unconstitutional, a revised version was passed in 1935, providing temporary relief for indebted farmers and stabilizing agricultural communities.

Resettlement Administration (RA) — Established in 1935 as part of the New Deal, the RA sought to address rural poverty and environmental degradation. It relocated struggling farmers to planned communities with better land and infrastructure, promoted soil conservation, and assisted sharecroppers and tenant farmers. Though it faced criticism and limited success, the RA laid the groundwork for later programs under the Farm Security Administration.

The Indian Reorganization Act (IRA)

• The IRA of 1934, also called the “Indian New Deal,” was promoted by John Collier, Commissioner of Indian Affairs.
• It sought to reverse assimilation policies from the Dawes Act (1887).
• The act encouraged tribal self-government and preservation of cultural traditions.
• It helped stop the loss of tribal lands and revived Native American Indian identity and culture.
• However, some Indians criticized the act as a “back-to-the-blanket” policy, fearing it reduced them to cultural relics.
• While 77 tribes rejected the Act, nearly 200 organized tribal governments.

Indian Reorganization Act (IRA) — The IRA aimed to reverse assimilation policies and restore Native American Indian self-governance. It ended the allotment of tribal lands under the Dawes Act, allowed tribes to manage their own resources, and supported cultural revitalization. The IRA marked a shift toward federal recognition of tribal sovereignty.

John Collier (1884–1968) — Collier served as the Commissioner of Indian Affairs from 1933 to 1945 and was a key architect of the Indian Reorganization Act. He worked to end assimilation policies, promote Native American Indian self-governance, and preserve tribal cultures.

Dawes Act (1887) — The Dawes Act of 1887 was intended to assimilate Native American Indians into American society by dividing tribal lands into individual allotments. It sought to encourage private land ownership but led to significant loss of Indian lands and disrupted tribal structures, increasing economic and cultural challenges.

Assimilation Policies — Assimilation Policies sought to integrate Native American Indians into mainstream American culture by diminishing tribal identities and practices. These included allotment of lands under the Dawes Act, suppression of languages and religions, and forced attendance at boarding schools.

Battling Bankers and Big Business

The Federal Securities Act (FSA)

• The FSA, also known as the Truth in Securities Act, was passed by the Hundred Days Congress.
• It sought to limit the reckless practices of financial promoters that contributed to the 1929 Stock Market Crash.
• The FSA required stock and bond promoters to provide sworn information about the financial soundness of their offerings.
• The traditional saying “Let the buyer beware” was reversed to “Let the seller beware.”
• Despite the regulation, investors often failed to examine the fine print in such disclosures.

Federal Securities Act (FSA) — The FSA of 1933 sought to restore public confidence in the stock market after the 1929 crash. It required companies issuing securities to provide truthful and complete financial information to investors. The act also established legal consequences for misrepresentation and fraud, laying the foundation for the Securities and Exchange Commission (SEC) to regulate and enforce transparency in financial markets.

Stock Market Crash (1929) — The Stock Market Crash of 1929, also known as Black Tuesday, occurred in October. Stock prices dropped dramatically, wiping out billions in wealth. This event marked the beginning of the Great Depression, as it destabilized the economy, triggered bank failures, and led to widespread unemployment. The crash exposed structural weaknesses in the U.S. economy, including over-speculation, excessive use of credit, and lack of market regulation.

Securities and Exchange Commission (SEC)

• In 1934, Congress established the SEC to regulate financial markets.
• The SEC functioned as a watchdog agency to protect the public from fraud, deception, and insider manipulation.
• The goal was to ensure stock markets operated as legitimate trading platforms rather than speculative gambling arenas.

Securities and Exchange Commission (SEC) — The SEC, established in 1934, was a key New Deal reform to regulate financial markets and restore investor confidence after the Stock Market Crash of 1929. It enforces laws requiring transparency in corporate disclosures, monitors securities trading to prevent fraud, and oversees exchanges and brokers to ensure fair practices. The SEC is responsible for maintaining market stability and protecting investors.

The Public Utility Holding Company Act of 1935

• The New Deal targeted oversized public utility holding companies for reform.
• Samuel Insull’s financial empire collapse in 1932 highlighted the risks of public utility holding companies.
• FDR criticized the disproportionate influence of small capital controlling large layers of businesses, likening it to “a ninety-six-inch dog being wagged by a four-inch tail.”
• The Public Utility Holding Company Act (1935) effectively imposed a “death sentence” on unnecessary corporate growth, allowing exceptions only for economically essential cases.

Public Utilities — These are essential services provided to the public, such as electricity, water, natural gas, and telecommunications. Typically operating as monopolies or near-monopolies, utilities are regulated by government agencies to ensure fair pricing, reliable access, and service quality. During the New Deal era, reforms like the Public Utility Holding Company Act of 1935 targeted inefficiencies and monopolistic practices within the utility sector to protect consumers and promote transparency.

Utility Holding Company — A Utility Holding Company is a corporation that owns and controls multiple utility providers, such as electric or gas companies. In the early 20th century, these entities often operated with complex and opaque structures, leading to monopolistic practices and financial abuses. The Public Utility Holding Company Act (1935) addressed these issues by regulating and simplifying such companies, ensuring greater transparency and fair pricing for consumers.

Samuel Insull (1859–1939) — Insull was a prominent utility magnate whose holding company empire collapsed during the Great Depression. His downfall exposed the financial mismanagement and speculative practices prevalent in the utility industry, prompting reforms like the Public Utility Holding Company Act to prevent similar abuses.

Public Utility Holding Company Act (1935) — This act sought to regulate and dismantle overly complex and monopolistic utility holding companies. It required these companies to simplify their structures and register with the Securities and Exchange Commission. The law intended to promote transparency, prevent abuse, and protect consumers from unfair pricing and inefficient services.

The TVA Harnesses the Tennessee River

New Deal Reform and the Electric Power Industry

• The electric power industry grew into a $13 billion enterprise within a few decades.
• As a public utility, it impacted millions of consumers.
• New Deal reformers criticized the industry for charging excessive rates.
• The industry was accused of exploiting public resources by acquiring valuable water-power sites from the government at minimal cost.

The Tennessee Valley Authority (TVA)

• The Tennessee River and its tributaries were a prime opportunity for New Deal reform.
• The Tennessee River Basin covered an area the size of England and was home to 2.5 million poor Americans.
• The Federal Government already owned properties at Muscle Shoals, including nitrate plants from World War I.
• The TVA sought to harness the river’s hydroelectric potential, providing jobs and challenging the power monopoly.
• This initiative combined short-term employment with long-term regional development and resource reform.

Tennessee River — The Tennessee River is a major waterway in the southeastern United States, spanning over 600 miles and serving as a vital resource for navigation, agriculture, and energy production. It became central to New Deal efforts to modernize the region.

Tennessee River Basin — The Tennessee River Basin encompasses the river and its tributaries, covering parts of seven states. During the New Deal, it was targeted for development through the Tennessee Valley Authority (TVA) to control flooding, improve navigation, and stimulate economic growth.

Muscle Shoals — Muscle Shoals, Alabama, is a section of the Tennessee River known for its rapids. Before the New Deal, it was the site of government-built nitrate plants and a dam for World War I purposes. These facilities later became part of the TVA’s hydroelectric and regional development efforts.

Nitrate Plants — Built during World War I at Muscle Shoals, nitrate plants produced fertilizer and explosives. During the New Deal, these plants were repurposed under the TVA to support agricultural development and regional modernization.

Hydroelectric Power — Hydroelectric power, generated by harnessing flowing water to produce electricity, was a cornerstone of the TVA’s mission. By constructing dams along the Tennessee River, the TVA provided affordable electricity, boosting regional industrialization and improving the quality of life in the Tennessee Valley.

Creation of the TVA

• The TVA was established in 1933 by the Hundred Days Congress.
• Senator George W. Norris of Nebraska played a key role in its creation.
• One of the TVA’s major dams was named after him.
• The TVA was a groundbreaking initiative in the “planned economy” and one of the most revolutionary New Deal programs.
• It sought to modernize the Tennessee Valley Region through hydroelectric power, flood control, and regional development.

Tennessee Valley Authority (TVA) — Established in 1933, the TVA was a New Deal program intended to modernize the Tennessee Valley Region. It built dams for flood control and hydroelectric power and improved navigation, and promoted agricultural and industrial development, transforming the region’s economy and quality of life.

George W. Norris (1861–1944) — Norris was a progressive U.S. senator from Nebraska and a strong advocate for public power and rural development. He played a key role in creating the Tennessee Valley Authority, which reflected his vision for government-driven economic and infrastructure reform.

Norris Dam — Completed in 1936 as part of the TVA, Norris Dam was the agency’s first major project. Located on the Clinch River in Tennessee, it provided hydroelectric power, flood control, and economic benefits to the surrounding area.

Planned Economy — An economy in which the government directs economic activity, often through centralized planning and resource allocation. The TVA exemplified this type of economy by integrating infrastructure, energy production, and regional development to address the needs of the Tennessee Valley during the Great Depression.

TVA’s Role as a Rate “Yardstick” and Controversy

• The TVA looked to determine the true cost of electricity production and distribution.
• It served as a “yardstick” to assess the fairness of rates charged by private utility companies.
• Private utilities opposed the TVA, accusing it of using dishonest accounting methods and benefiting from tax exemptions.
• Critics said the TVA was an example of “creeping socialism in concrete.”.

Socialism — Socialism is an economic and political system in which the means of production, distribution, and exchange are owned or regulated by the community or the state. It emphasizes social equity and aims to reduce economic inequalities through public ownership, wealth redistribution, or extensive government involvement in economic planning. During the New Deal Era, programs like the Tennessee Valley Authority were sometimes criticized as leaning toward Socialism due to their emphasis on government-led development and resource management.

The Achievements and Legacy of the TVA

• The TVA brought full employment and affordable electricity to the Tennessee Valley.
• It also provided low-cost housing, cheap nitrates, reforestation, restored soil, improved navigation, and flood control.
• Rivers in the region were transformed from brown to blue, revitalizing the environment and economy.
• The region became one of the most prosperous in the U.S., serving as a model for other projects.
• Inspired by its success, New Dealers proposed similar projects for the Columbia, Colorado, and Missouri River valleys.
• Federally built dams in the West eventually harnessed over 30% of annual runoff from the Rocky Mountains, fueling urban growth and irrigating deserts.
• Conservative opposition limited TVA-style federally managed regional development to the Tennessee Valley.

Rocky Mountains — The Rocky Mountains, often called the Rockies, are a major mountain range stretching over 3,000 miles from Canada to New Mexico. Known for their rugged peaks, diverse ecosystems, and natural resources, the Rockies played a vital role in Westward Expansion and resource-based industries like mining and logging. During the New Deal Era, conservation and infrastructure projects in the region aimed to balance resource use with environmental protection.

Columbia River Valley — The Columbia River Valley is a vital agricultural and industrial region in the Pacific Northwest, and is shaped by the Columbia River. New Deal projects, such as the construction of the Grand Coulee Dam, harnessed the river’s power for hydroelectric energy, irrigation, and flood control, transforming the area’s economy and supporting growth during the Great Depression.

Colorado River Valley — The Colorado River Valley spans several southwestern states and is a crucial water source for irrigation, urban use, and hydroelectric power. Projects like the Hoover Dam, constructed during the New Deal, controlled flooding, generated electricity, and supported agricultural and urban development in the arid region.

Missouri River Valley — The Missouri River Valley, which encompasses the central United States, is a key agricultural and transportation corridor. During the New Deal, initiatives like dam construction and soil conservation programs helped manage flooding, improve navigation, and support farming communities, contributing to regional economic stability.

Housing Reform and Social Security

Federal Housing Administration (FHA)

• The FHA was established in 1934 to promote housing recovery and improvement.
• It provided small loans to householders for home repairs and new construction.
• The FHA intended to stimulate the building industry and improve living conditions.
• It became one of the most enduring New Deal programs, outlasting FDR’s Presidency.

Federal Housing Administration (FHA) — Established in 1934 during the New Deal, the FHA wanted to boost the housing market by insuring mortgages, reducing lenders’ risks, and making homeownership more accessible. It introduced longer loan terms and lower down payments, helping stabilize the housing industry during the Great Depression. The FHA also set building standards, promoting safer and more durable housing across the United States.

The United States Housing Authority (USHA)

• In 1937, Congress created the USHA to provide loans for low-cost housing construction.
• The program initiated housing for approximately 650,000 low-income people but fell short of addressing the overall demand.
• Efforts to expand the program faced opposition from real estate promoters, builders, landlords, and anti–New Dealers who criticized the spending.
• Despite limitations, the USHA marked the first time in a century that American slums stopped growing and began to decline.

United States Housing Authority (USHA) — Created in 1937 under the Wagner-Steagall Housing Act, the USHA sought to provide affordable public housing for low-income families. It offered loans to local governments for constructing and managing housing projects, addressing urban overcrowding and substandard living conditions. The USHA was a significant federal effort to improve housing during the Great Depression and laid the foundation for modern public housing programs.

Slums — Slums are densely populated urban areas characterized by substandard housing, poor sanitation, and inadequate infrastructure. During the Great Depression, many Americans lived in slums due to widespread poverty and unemployment. New Deal programs, such as the United States Housing Authority, sought to address these conditions by funding public housing projects to replace slums with safer, more affordable living spaces.

The Social Security Act (1935)

• The Social Security Act was a landmark New Deal law that sought to reduce the impact of future economic depressions.
• It established federal-state unemployment insurance to support workers during joblessness.
• Old-age pensions were provided to retired workers, with payments ranging from $10 to $85 per month (later increased).
• The program was funded through payroll taxes shared by employers and employees.
• Additional support was extended to the blind, physically handicapped, delinquent children, and other dependents.

Social Security Act (1935) — The Social Security Act, signed into law during the New Deal, established a federal program to provide financial assistance to vulnerable populations. It created old-age pensions, unemployment insurance, and aid for dependent children and the disabled, funded by payroll taxes. The act marked a significant step in developing the U.S. welfare system.

Old-Age Pensions — The Social Security Act of 1935 introduced Old-Age Pensions, which provided monthly payments to retired workers. Funded by payroll taxes, these pensions aimed to reduce poverty among the elderly and ensure financial security after retirement.

Payroll Taxes — Payroll taxes are mandatory contributions deducted from employees’ wages and matched by employers to fund government programs. Under the Social Security Act, these taxes support old-age pensions, unemployment insurance, and other social welfare benefits, forming the financial foundation of the Social Security system.

Opposition and Expansion of Social Security

• Republicans opposed Social Security, and Herbert Hoover argued the government should promote a “cult of work, not a cult of leisure.”
• Critics spread false claims, such as workers needing to wear metal dog tags for life.
• Social Security was influenced by European models of industrialized welfare systems.
• Unlike earlier rural America, where families cared for dependents, the urbanized economy led the government to take responsibility for citizens’ welfare.
• By 1939, over 45 million people qualified for benefits, with additional worker categories and payment increases introduced over time.
• Unlike Europe’s universal coverage, Social Security in the U.S. required employment for eligibility.

Industrialized Welfare Systems — Industrialized Welfare Systems are government frameworks established in developed nations to provide social safety nets for citizens. These systems typically include programs like unemployment insurance, healthcare, pensions, and housing support. They are funded through taxes and aim to reduce economic inequality and provide security in times of need. In the United States, the Social Security Act (1935) marked a major step toward creating such a system during the Great Depression.

A New Deal for Unskilled Labor

Organized Labor and Strikes in 1934

• The NRA’s support for collective bargaining empowered organized labor.
• New Deal spending only reduced unemployment slightly, encouraging labor to become more assertive.
• A wave of strikes took place in 1934, including a major general strike in San Francisco.
• The San Francisco strike, which followed a violent “Bloody Thursday,” was ended through vigilante actions by outraged citizens.

Textile Workers’ Strike (1934) — The Textile Workers’ Strike of 1934 was one of the largest labor actions in U.S. history, involving over 400,000 workers in the southern and eastern textile industries. Workers demanded higher wages, shorter hours, and better working conditions. The strike ended with violent repression and limited gains, highlighting tensions between labor and management during the Great Depression.

West Coast Waterfront Strike (1934) — This strike involved longshoremen and maritime workers along the Pacific Coast, demanding better wages, union recognition, and improved working conditions. Lasting over two months, the strike culminated in violent clashes, including the “Bloody Thursday” events in San Francisco, and resulted in significant labor victories.

San Francisco Longshoremen Strike (1934) — Part of the larger West Coast Waterfront Strike, this action paralyzed San Francisco’s port as longshoremen demanded union recognition and fair treatment. Violent confrontations led to police intervention and public sympathy for the workers, ultimately resulting in union recognition and improved labor rights.

Bloody Thursday in San Francisco — On July 5, 1934, during the San Francisco Longshoremen Strike, violent clashes erupted between striking workers and police. Known as “Bloody Thursday,” the confrontation resulted in the deaths of two workers and numerous injuries. The event intensified public support for the strikers and led to a citywide general strike, marking a turning point in labor rights struggles and securing union recognition for longshoremen and maritime workers.

The Wagner Act (1935) — A Milestone for Labor Rights

• The Wagner Act, also known as the National Labor Relations Act, was passed to strengthen labor rights.
• It established the National Labor Relations Board (NLRB) to oversee and enforce labor regulations.
• The law reaffirmed workers’ rights to self-organize and bargain collectively through representatives of their choice.
• The Wagner Act became a pivotal moment in the advancement of the U.S. Labor Movement.

Wagner Act (1935) — Officially the National Labor Relations Act of 1935, the Wagner Act guaranteed workers the right to organize, join unions, and collectively bargain with employers. It also prohibited unfair labor practices, such as employer interference in union activities, and established the National Labor Relations Board to enforce labor rights.

National Labor Relations Board (NLRB) — The NLRB was created by the Wagner Act in 1935 to oversee and enforce labor laws. It investigates unfair labor practices, conducts union elections, and mediates disputes between employers and workers, playing a key role in protecting workers’ rights.

Labor Movement — The Labor Movement refers to organized efforts by workers to improve wages, working conditions, and labor rights through unions and collective bargaining. It gained significant momentum during the 1930s, aided by New Deal legislation like the Wagner Act, which empowered unions and expanded workers’ protections.

The Rise of the Committee for Industrial Organization (CIO)

• The NLRB encouraged unskilled workers to unionize.
• John L. Lewis, leader of the United Mine Workers, spearheaded the unionization efforts.
• In 1935, Lewis established the Committee for Industrial Organization (CIO) within the American Federation of Labor (AFL).
• The AFL, dominated by skilled workers, showed limited support for unskilled labor and minorities, including black workers.
• Friction between the AFL and the CIO led to the AFL suspending unions affiliated with the CIO in 1936.

Unionize — To Unionize means to form or join a labor union to collectively advocate for workers’ rights, better wages, and improved working conditions. Unionization gained momentum during the 1930s, supported by legislation like the Wagner Act.

John L. Lewis (1880–1969) — Lewis was a prominent labor leader who headed the United Mine Workers (UMW) and co-founded the Committee for Industrial Organization (CIO). He played a key role in expanding union membership and advocating for industrial unionism during the New Deal era.

United Mine Workers (UMW) — The UMW is a labor union representing coal miners and other workers. Under John L. Lewis’s leadership, it became a powerful force in the labor movement, promoting industrial unionism and workers’ rights during the 1930s.

Committee for Industrial Organization (CIO) — Founded in 1935 by John L. Lewis and others, the CIO wanted to organize workers in mass-production industries like steel and automobiles. It later became the Congress of Industrial Organizations, representing millions of workers.

American Federation of Labor (AFL) — The AFL, established in 1886, is a federation of craft unions representing skilled workers. During the 1930s, tensions arose between the AFL and advocates of industrial unionism, leading to the formation of the CIO. Despite differences, both organizations contributed significantly to the labor movement.

The CIO’s Success and Struggles in Industry

• The CIO targeted the automobile industry, launching a sit-down strike at General Motors in Flint, Michigan, in late 1936.
• Workers occupied the factory, preventing the use of strikebreakers, a tactic that shocked conservative property advocates.
• The strike ended with General Motors recognizing the CIO as the sole bargaining agent for its employees.
• Encouraged by this victory, unskilled workers gained union rights from U.S. Steel, which avoided a strike by cooperating with the CIO.
• Smaller “little steel” companies resisted unionization, leading to violent confrontations.
• In 1937, the Memorial Day Massacre occurred at Republic Steel in South Chicago, where police fired on workers, killing and wounding several.

Sit-Down Strike — A Sit-Down Strike involves workers occupying their workplace but refusing to work, preventing replacement workers from being hired. This tactic was popularized in the 1930s, notably during the Flint Sit-Down Strike of 1936–1937, and proved effective in securing union recognition and improving labor conditions.

Flint Sit-Down Strike (1936–1937) — The Flint Sit-Down Strike was a significant labor action against General Motors (GM) in Flint, Michigan. For 44 days, workers occupied several plants, demanding union recognition and better wages. The strike, marked by confrontations with police and GM security, ended with GM agreeing to recognize the United Auto Workers. It was a landmark victory for industrial unionism and strengthened the labor movement in the United States.

United Auto Workers (UAW) — Founded in 1935, the UAW is a labor union representing workers in the automobile and related industries. Emerging as a key force during the Great Depression, the UAW gained prominence with successful actions like the Flint Sit-Down Strike (1936–1937). Known for advocating better wages, benefits, and working conditions, the UAW played a significant role in the Labor Movement and the rise of industrial unionism in the United States.

Strikebreakers — Strikebreakers, often called “scabs,” are individuals hired to replace striking workers or undermine labor strikes. Their use during the 1930s frequently led to tension and violence, as unions viewed them as threats to their efforts for better wages and conditions.

Memorial Day Massacre (1937) — On May 30, 1937, during a steelworkers’ strike in Chicago, police fired on unarmed workers and their families, killing ten and injuring many more. The incident, known as the Memorial Day Massacre, occurred outside the Republic Steel plant.

Industrial Unionism — A labor organizing strategy that seeks to unite all workers within an industry, regardless of their specific job or skill level, into a single union. This approach contrasts with craft unionism, which organizes workers by trade. Industrial Unionism gained prominence during the 1930s, particularly through the efforts of the Congress of Industrial Organizations (CIO), which organized mass-production workers in industries like steel, automobiles, and textiles to collectively advocate for better wages, conditions, and rights.

Craft Unionism — A labor organizing strategy that focuses on uniting workers with specific skills or trades into individual unions, such as carpenters or electricians. These unions emphasize the expertise and specialized nature of their members’ work, often negotiating separately from other labor groups. Predominantly associated with the American Federation of Labor (AFL), Craft Unionism was influential in the late 19th and early 20th Centuries but faced challenges during the rise of Industrial Unionism in the 1930s, which sought to organize all workers within an industry, regardless of skill level.

The Fair Labor Standards Act of 1938

• The Fair Labor Standards Act (Wages and Hours Bill) was passed in 1938 to improve labor conditions.
• It set minimum wage and maximum workweek standards for industries involved in interstate commerce.
• The eventual targets were 40 cents per hour and a 40-hour workweek.
• Child labor was prohibited for those under 16 (or under 18 in hazardous occupations).
• Southern textile manufacturers and other industrialists opposed the reforms but failed to block them.
• The act excluded agricultural, service, and domestic workers, leaving many black, Mexican-American, and female workers without its protections.

Fair Labor Standards Act (FSLA) — The FLSA (1938) established nationwide labor standards to improve working conditions during the Great Depression. It introduced a federal minimum wage, capped the workweek at 44 hours (later reduced to 40), and mandated overtime pay for extra hours. The act also prohibited oppressive child labor. As a cornerstone of New Deal labor reforms, the FLSA sought to protect workers from exploitation and promote economic fairness.

Labor Union Growth Under the New Deal

• Labor unions flourished during the later New Deal years, encouraged by the slogan “Roosevelt wants you to join a union.”
• President Roosevelt gained strong political support from union leaders and working-class voters.
• Many workers felt personally connected to Roosevelt, with one mill worker praising his understanding of labor struggles.

Congress of Industrial Organizations (CIO)

• The CIO officially broke from the AFL in 1938 and was reestablished as the Congress of Industrial Organizations under John L. Lewis.
• By 1940, the CIO had approximately 4 million members, including 200,000 black workers.
• Despite its growth, the CIO and AFL engaged in jurisdictional feuds, sometimes prioritizing internal disputes over their shared struggle with management.

Congress of Industrial Organizations (CIO) — The CIO was founded in 1935 to organize workers in mass-production industries like steel, automobiles, and textiles. It broke away from the American Federation of Labor (AFL) over disagreements about organizing by industry rather than craft. The CIO played a key role in expanding union membership during the 1930s and 1940s, achieving major victories like the Flint Sit-Down Strike. It merged with the AFL in 1955 to form the AFL-CIO.

Landon Challenges “the Champ” in 1936

The 1936 Presidential Campaign

• By 1936, the New Deal had gained significant public support due to its progress.
• Millions of Americans benefiting from government assistance were loyal to the New Deal.
• The Democratic Party renominated FDR, fully endorsing the New Deal in their campaign platform.

The Republicans and Alfred Landon in the 1936 Election

• Republicans nominated Alfred M. Landon, the moderate Governor of Kansas, to challenge FDR.
• Landon supported some New Deal reforms but opposed the Social Security Act.
• The Republican platform criticized the New Deal for being radical, confusing, and wasteful.
• Former President Hoover called for a “holy crusade for liberty,” aligning with the American Liberty League, a conservative group formed in 1934 to oppose the New Deal.

Alfred M. Landon (1887–1987) — Landon was the Republican candidate in the 1936 Presidential Election, running against Franklin D. Roosevelt. As the governor of Kansas, he supported some New Deal programs but criticized their inefficiency and centralization of power. Landon’s campaign failed to gain traction, and he suffered a decisive defeat, with Roosevelt winning in a landslide.

American Liberty League — The American Liberty League, founded in 1934, was a conservative organization opposed to New Deal policies. It consisted of business leaders, politicians, and other critics who argued that Roosevelt’s programs expanded federal power and threatened individual freedoms. While influential among wealthy conservatives, the group failed to gain broad public support and dissolved in the early 1940s.

Conservatives — Conservatives generally advocate for limited government intervention, individual liberties, traditional values, and free-market principles. During the New Deal Era, conservatives opposed many of Franklin D. Roosevelt’s programs, arguing they expanded federal power excessively and undermined economic freedom. Groups like the American Liberty League and some Republican politicians criticized New Deal reforms as overreach. Conservatives favored that prioritized private enterprise and fiscal restraint.

Liberals — Liberals generally advocate for government intervention to promote social welfare, civil rights, and economic equity. During the New Deal era, they supported Franklin D. Roosevelt’s programs to alleviate poverty and expand workers’ protections. They emphasize progressive taxation, public investments, and individual freedoms, often favoring reforms to address social and economic inequalities.

Roosevelt’s Victory in the 1936 Election

• Roosevelt campaigned by attacking “economic royalists” for hiding behind patriotism and the Constitution.
• He declared, “I welcome their hatred,” rallying supporters against his opponents.
• The election resulted in a landslide victory for Roosevelt, with a popular vote of 27,752,869 to 16,674,665.
• The electoral vote was 523 to 8, the most decisive outcome in 116 years.
• Republicans carried only two states, Maine and Vermont, leading to the quip, “As Maine goes, so goes Vermont.”
• Democrats benefitted, gaining overwhelming majorities in Congress, controlling over two-thirds of both the House and Senate.

1936 Presidential Election — The 1936 Election saw Franklin D. Roosevelt overwhelmingly defeat Republican challenger Alfred M. Landon. Roosevelt’s victory reflected broad public support for his New Deal policies during the Great Depression. Winning 46 of 48 states, the election solidified the Democratic Party’s dominance and highlighted a realignment of voting blocs, with strong backing from urban workers, African Americans, and farmers, creating a coalition that shaped U.S. politics for decades.

The 1936 Election: Class Division and Political Shifts

• The 1936 Election was one of the most contentious since 1896.
• Economic divisions deepened, with struggling groups supporting Roosevelt and wealthier groups opposing him.
• The CIO contributed significantly to Roosevelt’s campaign funding.
• Left-wing voters backed Roosevelt, reducing the traditional third-party protest vote.
• Many black Americans, grateful for New Deal programs, continued to shift their loyalty from the Republican Party to Roosevelt’s Democratic Party, symbolically abandoning Abraham Lincoln’s legacy.

Abraham Lincoln — Abraham Lincoln, the 16th President of the United States (1861–1865), led the nation through the Civil War and preserved the Union. Known for his dedication to principles of equality, he issued the Emancipation Proclamation in 1863, which began the process of abolishing slavery. Lincoln delivered iconic speeches, including the Gettysburg Address, emphasizing national unity and democratic ideals. Assassinated in 1865, he remains one of America’s most revered leaders.

Roosevelt’s Coalition and Appeal in the 1936 Election

• Roosevelt secured victory by appealing to the Forgotten Man and maintaining loyalty through New Deal programs.
• Many voters supported Roosevelt for economic reasons, with “reliefers” unwilling to oppose government aid that benefitted them.
• Al Smith summarized this sentiment with, “No one shoots at Santa Claus.”
• Roosevelt built a strong coalition including the South, African Americans, urban voters, and the poor.
• He gained significant support from “New Immigrants,” especially Catholics and Jews, who had become a political force in urban areas.
• Roosevelt’s appointments reflected this shift, with 1 in 4 federal judgeships going to Catholics, compared to 1 in 25 during the 1920s.

New Immigrants — The term “New Immigrants” refers to the wave of individuals who arrived in the United States between the 1880s and 1920s, primarily from Southern and Eastern Europe. These immigrants, including Italians, Jews, Poles, and others, often settled in urban areas, working in industrial jobs. They faced challenges such as cultural adjustment, economic hardship, and discrimination while contributing to the nation’s labor force and cultural diversity. Their arrival contrasted with earlier “Old Immigrants” from Northern and Western Europe, leading to tensions and restrictive immigration policies like the Immigration Act of 1924.

Nine Old Men on the Supreme Bench

Roosevelt’s Second Inauguration and Supreme Court Challenges

• Roosevelt was inaugurated for his second term on January 20, 1937, following the 20th Amendment, which shortened the lame-duck period.
• The 20th Amendment also eliminated the post-election lame-duck session of Congress.
• FDR interpreted his reelection as a mandate to expand the New Deal.
• However, the New Deal faced opposition from the Supreme Court, which ruled against it in seven of nine cases.
• The Court was dominated by conservative justices, six of whom were over 70 years old.
• There was no opportunity to nominate a new Supreme Court justice during FDR’s first term.

20th Amendment — Ratified in 1933, the 20th Amendment to the U.S. Constitution, often called the “Lame-Duck Amendment,” shortened the time between federal elections and the start of new terms for elected officials. It moved the Presidential Inauguration from March 4 to January 20 and Congress’s start date to January 3. The amendment aimed to reduce the inefficiency of lame-duck periods and ensure a quicker transition of power in the Federal Government.

Roosevelt’s Frustration with the Supreme Court

• Roosevelt grew impatient with the Supreme Court.
• Some Justices held to their positions out of a sense of duty, intending to curb what they saw as the New Deal’s “socialistic” direction.
• FDR saw his victories in the 1932 and 1936 Presidential Elections, as well as the Democratic success in the 1934 midterms, as a clear public endorsement of the New Deal.
• He argued that democracy meant rule by the people and believed the Court should align with the “supreme court of public opinion.”
• FDR viewed Court opposition as a threat to preserving the American way of life.

Roosevelt’s Court-Packing Plan

• In early 1937, Roosevelt proposed a plan to reform the Supreme Court.
• The plan allowed adding one justice for each member over 70 who refused to retire, up to a total of 15 justices.
• FDR justified the proposal by claiming the Court needed younger, more vigorous members and was behind in its workload — a claim later proven false.
• The plan shocked the public and Congress, leading to accusations of dishonesty and overreach.
• FDR underestimated the reverence many Americans held for the Supreme Court, treating it as a “sacred cow.”

Roosevelt’s Court-Packing Scheme — In 1937, President Franklin D. Roosevelt proposed expanding the Supreme Court by adding up to six additional justices. Officially called the Judicial Procedures Reform Bill, it sought to address the Court’s resistance to New Deal legislation by allowing the appointment of younger, more sympathetic justices. The plan faced widespread criticism as an overreach of executive power and a threat to judicial independence. Ultimately, it failed in Congress but influenced the Court to adopt a more favorable stance toward New Deal reforms.

The Court Changes Course

Reaction to Roosevelt’s Court-Packing Plan

• The proposal to expand the Supreme Court was widely criticized as a “dictator bill.”
• Roosevelt faced accusations of undermining the balance of power between the three branches of the Federal Government.
• Critics, including Republicans and some Democrats, viewed the plan as an attempt to intimidate the judiciary and consolidate power.
• Opponents feared the plan threatened fundamental liberties, with many praying, “God Bless the Supreme Court.”
• FDR’s actions led to intense public backlash and concern over perceived authoritarianism.

Three Branches of the Federal Government — The U.S. Federal Government is divided into three branches to ensure a balance of power and prevent any one branch from becoming too powerful.

• Legislative Branch: Composed of Congress (Senate and House of Representatives), it creates laws, controls federal spending, and has powers such as declaring war and approving treaties.
• Executive Branch: The Executive Branch is headed by the President. It enforces laws, conducts foreign policy, and oversees federal agencies. The President also serves as Commander-in-Chief of the armed forces.
• Judicial Branch: Consisting of the Supreme Court and lower Federal Courts, it interprets laws, resolves disputes under the Constitution, and reviews the constitutionality of legislative and executive actions.

The Supreme Court’s Shift and Undermining of Court-Packing

• Justice Owen J. Roberts, previously seen as conservative, started voting with the Court’s liberal bloc, prompting the phrase “A switch in time saves nine.”
• In March 1937, the Court upheld a state minimum wage for women, reversing its previous position on the issue.
• Subsequent rulings upheld key New Deal measures, including the National Labor Relations Act (Wagner Act) and the Social Security Act.
• Congress offered full pay to justices over 70 who retired, leading to the resignation of a conservative justice.
• Roosevelt replaced the resigning justice with Hugo Black, a New Deal supporter, further strengthening the Court’s alignment with his policies.

Owen J. Roberts (1875–1955) — Roberts was an Associate Justice of the U.S. Supreme Court from 1930 to 1945. Initially known for siding with the conservative bloc of the Court, he became pivotal in the “switch in time that saved nine,” shifting to support New Deal legislation in key cases during 1937. This shift helped uphold measures like the Wagner Act and Social Security Act, diminishing momentum for Franklin D. Roosevelt’s court-packing scheme.

Hugo Black (1886–1971) — Black served as an Associate Justice of the U.S. Supreme Court from 1937 to 1971. Appointed by Franklin D. Roosevelt, Black was a staunch advocate for civil liberties, judicial restraint, and strict adherence to the Constitution’s text. Known for his absolutist interpretation of the First Amendment’s free speech and press clauses, Black also supported expanding federal power under New Deal legislation. Despite early controversy over his association with the Ku Klux Klan, he became a leading voice for individual rights and equality on the Court.

Absolutist Interpretation — Absolutist Interpretation refers to a strict and literal approach to constitutional provisions, especially regarding individual rights. For example, Justice Hugo Black famously adhered to an absolutist view of the First Amendment, arguing that its prohibition against laws infringing on Freedom of Speech and Press should be understood as unequivocal, with no exceptions or limitations allowed.

The Outcome of Roosevelt’s Court-Packing Plan

• Congress passed a diluted court reform bill that applied only to lower courts, marking Roosevelt’s first major legislative defeat.
• The defeat highlighted Americans’ resistance to interference with the Supreme Court, regardless of the President’s popularity.
• Despite losing the legislative battle, FDR achieved his goal as the Supreme Court became more supportive of the New Deal.
• Over time, FDR was able to appoint nine justices, more than any president since George Washington.
• However, it was only because he served as President for so long, as he ignored the two-term precedent.

The Long-Term Impact of the Court-Packing Fight

• Roosevelt’s attempt to pack the Supreme Court alienated conservatives in both parties.
• The backlash stalled the momentum of the New Deal, and few significant measures passed after 1937.
• The controversy marked a turning point, diminishing the political goodwill FDR had gained from his 1936 landslide victory.
• This weakened Roosevelt’s influence over Congress and the scope of further New Deal initiatives.

The Twilight of the New Deal

Economic Recovery During Roosevelt’s First Term

• Roosevelt’s first term (1933–1937) did not fully end the Great Depression.
• Unemployment fell from 25% in 1933 to 15% in 1936 but remained significantly high.
• New Deal programs and billions in spending yielded only modest economic recovery.
• The nation made slow progress toward economic stability.

The Roosevelt Recession and Shift to Keynesian Economics

• In 1937, the economy suffered a downturn, labeled the “Roosevelt Recession” by critics.
• The recession was partly caused by government policies, including new Social Security taxes reducing payrolls and a reduction in federal spending as Congress pursued a balanced budget.
• FDR responded by shifting to Keynesian Economics, inspired by British economist John Maynard Keynes, in April 1937.
• He embraced planned deficit spending as a strategy to stimulate economic recovery.
• Although the deficits were relatively small, this marked a significant shift in government involvement in the economy.
• “Keynesianism” became the dominant economic approach for decades.

Roosevelt Recession — The Roosevelt Recession refers to the economic downturn of 1937–1938, during Franklin D. Roosevelt’s Presidency. It occurred after the Federal Government reduced New Deal spending and tightened fiscal policies, leading to rising unemployment and decreased industrial output.

John Maynard Keynes — John Maynard Keynes was a British economist whose theories revolutionized modern economics. He argued that government intervention, particularly through deficit spending, was essential to stabilizing economies during downturns. His ideas heavily influenced New Deal policies and post-World War II economic planning.

Keynesian Economics — Keynesian Economics advocates active government intervention to manage economic cycles. It emphasizes using fiscal policies, such as increased public spending during recessions and tax adjustments, to stimulate demand, reduce unemployment, and promote growth. This theory shaped many New Deal programs.

Planned Deficit Spending — Planned Deficit Spending involves deliberate government borrowing and spending beyond revenue to stimulate economic activity during periods of recession or stagnation. John Maynard Keynes advocated this approach was central to New Deal and post-Depression recovery strategies, focusing on boosting demand and creating jobs.

Roosevelt’s Push for Government Reorganization

• In early 1937, Roosevelt proposed a comprehensive reorganization of the Federal government to improve efficiency.
• Congress resisted the proposal due to concerns about FDR’s ambitions, especially after the court-packing controversy.
• FDR’s effort faced a significant setback as Congress rejected the sweeping reorganization plan.
• In 1939, Congress passed the Reorganization Act, granting FDR limited authority for administrative reforms.
• The act established the Executive Office of the President, a key addition to White House operations.

Reorganization Act (1939) — The Reorganization Act of 1939 granted President Franklin D. Roosevelt authority to restructure the Executive Branch to improve efficiency and coordination. It allowed for the creation, consolidation, or elimination of government agencies, leading to significant administrative reforms during the New Deal era.

Executive Office of the President — Established under the Reorganization Act of 1939, the Executive Office of the President (EOP) supports the President in managing the Federal Government. It includes key offices like the Office of Management and Budget (OMB) and the National Security Council (NSC), providing policy advice, administrative assistance, and coordination across agencies.

The Hatch Act (1939)

• The Hatch Act was enacted by Congress to prevent the misuse of government resources and ensure fair elections.
• It barred federal administrative officials from political campaigning and soliciting donations.
• The Act prohibited using government funds for political purposes and collecting campaign contributions from relief recipients.
• In 1940, it was expanded to limit campaign contributions and expenditures.
• Despite its intentions, loopholes allowed individuals to circumvent the law, making its overall impact limited and disappointing.

Hatch Act (1939) — Passed in 1939, the Hatch Act restricts the political activities of federal employees to ensure a nonpartisan government workforce. It prohibits federal workers from engaging in partisan political campaigns or using their official positions to influence elections. The act also limits campaign contributions from government funds. While intended to maintain integrity in public service, it has been periodically amended to balance restrictions with employees’ First Amendment rights.

The Decline of the New Deal

• By 1938, the New Deal lost momentum, with very few new initiatives being introduced.
• In the 1938 Election, Republicans significantly reduced Democratic majorities, though they did not gain control of either chamber of Congress.
• Rising international tensions in 1938–1939 shifted focus from domestic reforms to foreign affairs.
• This distraction likely helped maintain support for Roosevelt’s administration despite ongoing criticisms of its spending policies.
• New Deal expansion ended, while many of its programs continued to operate.

New Deal or Raw Deal?

Criticism and Controversy Surrounding the New Deal

• Opponents accused the New Deal of inefficiency, waste, contradictions, and corruption within its programs, deriding them as “alphabet soup.”
• Al Smith and others cynically claimed Roosevelt achieved nothing beyond what a natural disaster might accomplish.
• Critics attacked FDR for employing progressive thinkers, labeling them as “crackpots,” leftists, or Communists aiming to reshape America into a Marxist model.
• The Hearst newspapers mocked the New Deal as being aligned with Soviet ideals, presenting it as subversive to American liberty.
• Anti-Semitic rhetoric targeted Roosevelt, calling him “Rosenfield,” and criticized his hiring of Jewish advisors, derisively naming the administration “The Jew Deal.”

William Randolph Hearst (1863–1951) — Hearst was a prominent American newspaper publisher and media magnate in the late 19th and early 20th Centuries. Known for pioneering sensationalist “yellow journalism,” he used his vast media empire to influence public opinion on major issues, including U.S. involvement in the Spanish-American War. A controversial figure, Hearst’s career also included a brief stint in politics, serving in the U.S. House of Representatives and unsuccessful runs for higher office. His publishing legacy profoundly shaped American journalism and popular culture.

Criticism of Roosevelt’s Approach and Bureaucratic Growth

• Business leaders criticized Roosevelt’s spontaneous, experimental style, accusing him of mistaking action for progress.
• Humorist Will Rogers joked that even if Roosevelt burned down the Capitol, people would at least acknowledge that a fire had been started.
• Anti-New Dealers also condemned the growing government bureaucracy, fearing excessive “meddling” and “regimentation.”
• Under FDR, the government became the largest employer in the country.

Will Rogers (1879–1935) — Rogers was a beloved American humorist, actor, and social commentator during the early 20th Century. Known for his wit and down-to-earth humor, he often used satire to address politics, current events, and social issues. A Cherokee Nation member, Rogers gained fame through vaudeville, radio, film, and newspaper columns. His ability to connect with audiences made him a cultural icon of the Great Depression.

Criticism of New Deal Spending and its Impact

• New Deal critics pointed out that Roosevelt had abandoned promises of balancing the budget.
• The national debt rose dramatically from $19.5 billion in 1932 to $40.4 billion by 1939.
• Critics argued America was turning into a “handout state,” relying on excessive government spending to achieve prosperity.
• Critics believed that such generous aid undermined traditional American values of thrift and self-reliance.
• Many felt that instead of seeking work or new opportunities, people were becoming too dependent on relief.
• This was a shift from the pioneer spirit of the past when workers moved West to seek a better life.

Business Criticism of the New Deal

• Business leaders, particularly conservatives, accused the New Deal of creating class conflict by favoring laborers and farmers, especially large-scale operators.
• They questioned the fairness of taxing successful businesses to support government aid, asking, “Why soak the successful?”
• Many business leaders, especially Republicans, argued that private enterprise could recover the economy if the Federal Government stopped interfering.
• They criticized the New Deal for promoting a planned economy and feared it was leading to “creeping socialism” under the belief that “Washington can do it better.”
• Critics also argued that States’ Rights were being disregarded as the government expanded into business, creating a “dictatorship of do-gooders.”

Criticism of Roosevelt’s Leadership and “Court-Packing” Attempt

• Roosevelt faced criticism for his leadership, with some calling him a “one-man supergovernment.”
• His attempts to intimidate the Supreme Court, particularly through the controversial court-packing plan, were widely condemned.
• FDR tried to “purge” Congress in the 1938 Elections by opposing members who disagreed with him, but this backfired
• The three senators he targeted were all reelected, further weakening his political influence.

Criticism of the New Deal’s Effectiveness

• The main criticism of the New Deal was that it failed to end the Great Depression.
• Critics argued that it merely provided temporary relief instead of a lasting solution.
• Many economists believed more deficit spending would have produced better results.
• Despite $20 billion in spending over six years, the gap between production and consumption remained, and farm surpluses worsened.
• Unemployment remained high, even after years of New Deal efforts.
• The unemployment crisis was only resolved with the outbreak of World War II, when war production boosted the economy.
• The national debt, which stood at $40 billion in 1939, surged to $258 billion by 1945, largely due to wartime spending.

FDR’s Balance Sheet

New Deal Defense and Acknowledgment of Shortcomings

• New Dealers defended their record, acknowledging some waste but emphasizing that their primary focus was relief, not economic efficiency.
• They justified their actions because of the urgency needed to address the Depression.
• They claimed the goal was to provide immediate relief to people and stabilize the economy, even if the process was imperfect.

Defense of Roosevelt’s Actions

• Roosevelt’s supporters argued that the New Deal alleviated the full impact of the Depression starting in 1933.
• They promoted the idea of “balancing the human budget,” asserting the Federal Government had a moral responsibility to prevent mass starvation and manage the economy.
• They contended that the FDR Administration was meant to be a tool for the public good, not something to fear.
• The New Deal helped avert the collapse of the economic system, redistributed national income more fairly, and restored citizens’ self-respect.
• Roosevelt’s promise, “Nobody is going to starve,” was seen as a commitment to ensure basic welfare and security for Americans.

Roosevelt’s Defense and Impact on Capitalism

• Despite being disliked by business tycoons, Roosevelt’s admirers argued that he actually helped preserve American free enterprise.
• His focus was not on dismantling Capitalism but on reforming and correcting its worst excesses to protect it from further disintegration.
• FDR was credited with preventing a more radical shift to the left by introducing moderate reforms that were sometimes mischaracterized as Socialism.
• The head of the American Socialist Party once remarked that the New Deal had implemented many socialist ideas — though “on a stretcher,” implying it was a watered-down version.

Capitalism — Capitalism is an economic system in which private individuals or businesses own and operate the means of production, distribution, and exchange. It emphasizes free markets, competition, and profit-making with minimal government interference. In the United States, Capitalism has been a dominant system, though debates over regulation and social welfare have shaped its evolution, especially during periods like the Great Depression.

American Socialist Party — Founded in 1901, the American Socialist Party advocated for economic and social equality through public ownership of major industries and increased workers’ rights. During the early 20th Century, under leaders like Eugene V. Debs, the party gained support from labor unions and progressives. Although its influence waned after the 1930s, it played a key role in shaping discussions about social reform and economic justice.

Roosevelt’s Leadership and Its Legacy

• Roosevelt is praised for providing bold reforms without resorting to revolution, unlike many foreign nations at the time that were experiencing uprisings.
• He was criticized by both left-wing radicals for not going far enough and by right-wing radicals for going too far.
• Roosevelt has been described as the greatest American conservative since Hamilton. 
• He blended Alexander Hamilton’s support for a strong central government with Thomas Jefferson’s concern for the Forgotten Man.
• FDR demonstrated the power of strong leadership to protect and uplift the American people, preserving democracy at home while democracies abroad were succumbing to dictatorship.
• His leadership helped prepare the nation for its role in the upcoming global conflict, where the survival of democracy was at stake.

Alexander Hamilton (1755–1804) — Hamilton was a Founding Father, the first Secretary of the Treasury, and the principal architect of the U.S. financial system. A strong proponent of a centralized Federal Government, he advocated for the establishment of a national bank, the assumption of state debts, and policies to promote industrialization. Hamilton played a key role in drafting the Constitution and co-authoring The Federalist Papers. His concept of a robust Federal Government and economic modernization significantly shaped the early United States. He died in 1804 following a duel with Aaron Burr.

Thomas Jefferson (1743–1826) — Jefferson was the third President of the United States (1801–1809), the principal author of the Declaration of Independence, and a leading advocate for individual rights and limited government. A proponent of agrarian democracy, he opposed strong federal authority, favoring States’ Rights and a decentralized economy. Jefferson orchestrated the Louisiana Purchase (1803), doubling the nation’s size, and emphasized education and religious freedom.

Struggling for Justice at Home and Abroad in the Progressive Era

The notes on this page are based on the 16th edition of The American Pageant. We have expanded on the source material with additional details, corrections, and links to Encyclopedia Entries that explain topics in more detail. For more information, including terms and definitions, see the following:

• AP US History — Units and Topics
• Chapter 28 — America on the World Stage
• Chapter 29 — Progressivism and the Republican Roosevelt
• Chapter 30 — Wilson Progressivism at Home and Abroad
• Chapter 31 — The War to End War
• Chapter 32 — American Life in the Roaring Twenties
• Chapter 33 — Politics of Boom and Bust
• Chapter 34 — Great Depression and the New Deal
• Chapter 35 — Franklin D. Roosevelt and the Shadow of War
• Chapter 36 — America in World War II