Chapter 24 Notes: The New Deal Experiment (1932-1939)

Learning Objectives

  • Explain why Franklin D. Roosevelt (FDR) was elected in 1932 and how his background shaped his political ideas.
  • Identify the three overarching goals of the First New Deal—relief, recovery, reform—and list the chief programs created to pursue them.
  • Describe the main critics of the New Deal from the right (business, Republicans) and the left (socialists, communists, populists such as Huey Long, Father Coughlin, Dr. Townsend).
  • Show how the New Deal evolved (Second New Deal) into what scholars call a limited American welfare state, especially through Social Security and the Wagner Act.
  • Account for the erosion of support during FDR’s second term and the achievements vs. limitations of New Deal policies.

An American Story: Florence Owens Thompson & “Migrant Mother”

  • March 1936: Florence Owens (b. 1903, Cherokee heritage) and her seven children break down en route to lettuce fields; forced into a pea-picker camp of > 2{,}000 destitute migrants near Nipomo, CA.
  • Family survives on half-frozen peas, small birds, and shared rations—“them people was hungry.”
  • Dorothea Lange (photographer, New Deal Resettlement Administration) shoots six images; final image, later titled “Migrant Mother,” becomes Depression icon.
  • Although the photo galvanized public sympathy, Owens herself remained a low-wage migrant worker (\approx 2\,\text{USD}/day in cotton; 0.50\,\text{USD}/night as waitress) and received no targeted New Deal aid—illustrating both reach and limits of New Deal relief.
  • Connects to broader migration patterns: Mexican & Filipino laborers, “Okie” Dust Bowl refugees, chronic farm unemployment.

Franklin D. Roosevelt’s Rise to Power

Privileged Upbringing but Progressive Instincts

  • Born 1882 to wealth on the Hudson River; distant cousin to Theodore Roosevelt.
  • Married Eleanor Roosevelt; TR (then President) gave bride away.
  • Contracted polio in 1921 (age 39); wheelchair-bound but cultivated empathy & grim determination.
  • As NY Governor (1929–1932) pushed state relief, foreshadowing federal New Deal.
  • Ideological stance: opposed laissez-faire orthodoxy; government had a “social duty” to keep citizens “unfed, unclothed, or unsheltered.”

The Election of 1932

  • Political landscape: GOP dominance since 1860; Democrats split (Southern white rural Protestants vs. Northern urban immigrants & Catholics).
  • FDR’s “New Deal” slogan—“bold, persistent experimentation,” help for the “forgotten man.”
  • Landslide: 57\% popular vote; 472 Electoral College vs. Hoover’s 59; Democrats seize Congress (Map 24.1 & 24.2).
  • Birth of the New Deal Coalition: farmers, labor, immigrants, Black voters, women, progressive intellectuals.

First New Deal (Hundred Days, March–June 1933)

Overarching Aims

  • Relief to desperate unemployed (≈ 1/4 of labor force).
  • Recovery of agriculture & industry to generate jobs.
  • Reform of financial/industrial institutions to forestall future collapses.

Guiding Intellectual Premises (“Brains Trust”)

  • Save—not replace—capitalism.
  • Diagnose crisis as under-consumption: productive capacity > purchasing power.
  • Counterbalance corporate power through government & organized labor.
  • Moderately redistribute wealth to stimulate demand.

Banking & Finance Reforms

  • Emergency Banking Act (March 9, 1933): federal inspection + aid; 4-day “bank holiday.”
  • Glass-Steagall Act: separates commercial & investment banking; establishes FDIC (insured deposits up to \$5,000 initially).
  • First Fireside Chat (12 March 1933): reassures citizens; deposits flow back, “capitalism saved in 8 days.”
  • Securities & Exchange Commission (SEC, 1934), chaired by Joseph P. Kennedy, regulates stock market, mandates corporate disclosure.

Direct Relief & Conservation

  • Federal Emergency Relief Administration (FERA, 1933): cash grants \$20–30/household; morphs into Civil Works Administration (CWA) placing >4\,\text{million} on short-term jobs (roads, schools, sewers).
  • Civilian Conservation Corps (CCC, 1933): 3\,000,000 young men (later token women) build parks, trails; wages sent to families; ends 1942.
  • Tennessee Valley Authority (TVA, 1933): public power + flood control on 7-state watershed; criticized as “creeping socialism.”
  • Rural Electrification Administration (REA, 1935): low-interest co-op loans; rural electrification jumps from 10\% (1933) to 90\% (1945).

Agricultural Adjustment Act (AAA, 1933)

  • Domestic Allotment Plan: pay farmers not to plant; funded via processing tax on food companies.
  • Paradox: livestock slaughtered & crops plowed under while hunger persisted.
  • Commodity Credit Corp: loans for storing crops; Farm Credit Act: long-term mortgage relief (FCA financed 40\% of farm debt by 1940).
  • Gains uneven: large landowners prosper; tenants/sharecroppers (esp. Black) displaced—spark SO. Tenant Farmers’ Union protests.

Industrial Recovery

  • National Industrial Recovery Act (NIRA) → National Recovery Administration (NRA, 1933): industry-wide “Blue Eagle” codes for wages, prices, hours, right to unionize.
    • Flaws: voluntary compliance; dominated by big firms; excluded sectors like domestic/agricultural labor; struck down in May\,1935 (Schechter decision).
  • Public Works Administration (PWA) & later Works Progress Administration (WPA): dams, bridges, schools; >2/3 of New Deal spending.

Opposition & Challenges (1933–1935)

From the Right

  • National Association of Manufacturers (NAM), U.S. Chamber of Commerce, American Liberty League: claim New Deal undermines property & freedom; liken policies to fascism/communism.

From the Left & Populists

  • Socialists/Communists: NRA a gift to monopolies; want deeper structural change.
  • Father Charles Coughlin: nationalist, anti-Semitic Union for Social Justice.
  • Dr. Francis Townsend: \$200/month Old-Age Revolving Pension (spent within 30 days).
  • Senator Huey “Kingfish” Long: Share-Our-Wealth (cap income 1\,\text{million}, inheritances 5\,\text{million}); assassinated 1935 but ideas persist.

Second New Deal (High Tide 1935–1936)

Works Progress Administration (WPA, 1935)

  • Congressional appropriation \approx \$5\,000\,000\,000 (> entire federal revenue 1934).
  • Employed \approx 13\,000,000 across 75\% of counties; built 572{,}000\,\text{mi} roads, 78{,}000 bridges, 40{,}000 buildings.
  • Federal One projects employ artists, writers, musicians (e.g., murals, oral-history slave narratives, guidebooks).

Labor Empowerment

  • Wagner Act / National Labor Relations Act (NLRA, July 1935): guarantees collective bargaining; creates National Labor Relations Board (NLRB).
  • Congress of Industrial Organizations (CIO, 1935): splits from AFL to organize mass-production workers; notable victories:
    • United Auto Workers (UAW) sit-down at GM Flint, Jan\,1937—production falls from 15{,}000 to 150 cars/week.
    • Union membership rises 3\,000,000 \to 14\,000,000 by 1945 (≈ 30\% of workforce).

Social Security Act (SSA, Aug 1935)

  • Payroll tax on workers & employers funds pensions starting 1940 (first check 41.30 USD).
  • Also creates unemployment insurance & grants for dependent children, blind, public health.
  • Exclusions: domestic, agricultural, religious/non-profit workers—≈ 50\% of Black workers, > 50\% of women.

Revenue Act (Wealth-Tax, 1935)

  • Graduated levies on corporate profits, high incomes, inheritances—response to “soak-the-rich” sentiment & to blunt Huey-style populism.

Americans the New Deal Overlooked (Two-Tier Welfare State)

  • Bottom tier: women, children, elderly without payroll jobs, unskilled/seasonal labor, minorities.
  • African Americans: unemployment >50\% urban; AAA evictions; WPA supervisory posts whites-only (South: 11/10{,}000 Black supervisors). Yet northern Black voters migrate to Democratic Party; Eleanor Roosevelt champions Mary McLeod Bethune & “Black Cabinet.”
  • Mexican Americans: wages at 0.10/hr; mass deportations despite citizenship.
  • Asian Americans: citizenship barred (first generation); discrimination channels many into niche work (produce stands, laundries).
  • Native Americans: Indian Reorganization Act (IRA, 1934) ends allotment, restores tribal landholdings & self-gov; little economic aid.

Waning Support & Political Setbacks (1937–1939)

Court-Packing Plan (1937)

  • Proposal: add 1 justice per sitting justice >70 (max 6 additions) to secure pro-New-Deal majority.
  • Bipartisan backlash: separation-of-powers concerns; plan fails, but Court subsequently upholds Wagner Act & SSA; conservative “Four Horsemen” retire.

Roosevelt Recession (1937–1938)

  • FDR cuts federal spending believing recovery secure; GNP falls, unemployment jumps from 14\% to 19\% (≈ 10\,000,000 jobless); erases \frac{2}{3} of gains since 1933.
  • Keynesian insight: deficit spending necessary; 1938 emergency appropriation revives public works.

Conservative Resurgence

  • Bipartisan conservative coalition (Republicans + southern Democrats) blocks further New Deal initiatives.
  • International crisis (Germany, Japan) shifts focus to defense; New Deal plateau after 1938.

Late-Stage Reforms (1937–1941)

  • Farm Security Administration (FSA, 1937): loans & housing to tenants; famed photography unit (e.g., Dorothea Lange, Walker Evans).
  • Second AAA (1938): quotas on key crops; food-stamp pilot for poor using surplus.
  • National Housing Act (1937): births federally subsidized public housing (≈ 160{,}000 units by 1941).
  • Fair Labor Standards Act (FLSA, 1938): establishes federal minimum wage 0.25\,\text{USD}/hr, 44-hour week max, bans child labor < 16 in interstate work.

Achievements vs. Limitations

Achievements

  • Stabilized banking & finance (FDIC, SEC).
  • Modernized infrastructure (PWA/WPA) & electrified countryside (REA).
  • Raised farm income & instituted production management (AAA).
  • Legitimized unions (Wagner Act) & boosted wages/standards (FLSA).
  • Established Social Security—bedrock of welfare state.
  • Political realignment: New Deal Coalition dominates until late 1960s.
  • Preserved democracy & capitalism during global era of fascism & communism.

Limitations

  • Unemployment still \approx 17\% average 1930s; full recovery arrives only via WWII mobilization.
  • Programs often discriminatory (race, gender, region) & temporary (FERA/CWA/CCC terminated 1942).
  • Did not abolish structural poverty, especially for sharecroppers, migrants, urban minorities.
  • Court packing fiasco tarnishes FDR; conservative coalition stymies further reform.

Key Terms & Acronyms (Chronological Cue)

  • Under-consumption theory
  • FDIC (Glass-Steagall, 1933)
  • Fireside Chats (radio, 1933–1944)
  • CCC, TVA, AAA, NRA, PWA, SEC, CIO, WPA, SSA
  • Wagner Act & NLRB
  • Court-Packing Plan (1937)

Numerical Quick List

  • Popular vote 1932: 57\% FDR.
  • Electoral College 1932: 472 vs 59.
  • Bank failures curve drops to near 0 by 1934 (see Figure 24.1).
  • Rural electrification: \uparrow from 10\% to 90\% in \approx 10 yrs.
  • WPA output: 572{,}000 road-miles, 78{,}000 bridges.
  • Union membership 1933–1945: 3\,\text{M} \to 14\,\text{M}.
  • Social Security first check =\$41.30 (Jan 1940).

Ethical & Philosophical Implications

  • Debate over government’s “social duty” vs. free-market self-correction.
  • Welfare state tension: dignity of work (WPA) vs. stigma of handouts.
  • Constitutional quandaries: executive vs. judiciary (court packing) & federalism (TVA public power vs. private utilities).
  • Persistent racial and gender inequities highlight limits of incremental reform.

Connections to Other Eras & Courses

  • Progressive Era trust-busting vs. New Deal regulation/co-operation.
  • WWI Bonus Army parallels WPA jobs & Veterans’ Bonus 1936.
  • Prefigures WWII mobilization: deficit spending & federal coordination prove vital.
  • Sets stage for post-war social legislation (GI Bill, Fair Deal, Great Society) & conservative backlash (Reagan era mantra: “Government is the problem”).

Exam Tricks & Mnemonics

  • “3 R’s” = Relief (FERA/CCC/WPA), Recovery (AAA, NRA, PWA), Reform (FDIC, SEC, SSA).
  • “Alphabet Soup” agencies mostly born in 1933 or 1935; remember odd-year clusters.
  • Court-Packing → think “9-justices cap cracked by 6-pack proposal.”
  • WPA = “We Produce America” (roads, bridges, art).

Bottom Line

  • The New Deal redefined the relationship between citizens and the federal government, embedding expectations of economic security and regulatory oversight while stopping short of systemic transformation of capitalism or racial hierarchy.