10.2 The First New Deal, 1933-1934

Electing FDR: The New Deal Campaign of 1932

  • In 1932, Franklin D. Roosevelt (FDR) crafted his majority by uniting various minority groups, including Southern conservatives, Northern liberals, Western Progressives, city residents, and dissident Republicans.

  • Voter turnout had been low in the 1920s, especially among immigrants in northern cities. Many became politically active during Al Smith’s 1928 campaign.

  • FDR's personal popularity exceeded that of the Democratic Party. He secured 22.8 million votes (57%), while House Democrats received 20.6 million votes (55%).

  • Approximately 3/4 of African-American voters supported Hoover in 1932, remaining loyal to the Republican Party.

  • FDR gained about 82% of the Jewish vote.

Contours of the Realignment

  • The 1932 election marked the first time since 1876 that a Democratic candidate won a majority of the popular vote.

  • It was also the first election in eighty years (since 1852) where Democrats won a majority in both the popular vote and the Electoral College.

Coattails, 1932

  • Senate: Democrats controlled 41% of seats in 1928, 49% in 1930, 62% in 1932, 72% by 1934 and 79% in 1936.

  • House: The Democrats went from 38% of House seats in 1928 to 47% in 1930, 72% in 1932, 74% in 1934 and 77% in 1936.

The Enigmatic FDR

  • FDR believed in capitalism but recognized the necessity for its reinvention.

  • He advocated for "bold, persistent experimentation".

  • As he explained: “Take a method and try it: If it fails, admit it frankly and try another. But above all, try something.”

Contrast Hoover’s Response Nationally to FDR’s in New York

  • TERA

  • Agriculture

  • Unemployment payments

  • Public Works

  • Spent surplus and ran deficit

The New Deal & the Green New Deal

  • The New Deal aimed for a better, cleaner, safer future for all.

The New Dealers Faced Challenges

  • Halting deflation.

  • Restoring confidence in banks and real estate.

  • Restoring economic growth.

The First Term

  • Unemployment reduced from 24.9\%. GDP was raised from a low point of 57 billion (1933) to 81 billion (1936).

Work Programs and Unemployment

  • 1929: 3.2\%. 1930: 8.9\%. 1931: 16.3\%. 1932: 24.9\%. 1933: 20.6\%. 1934: 16.0\%. 1935: 14.2\%. 1936: 9.9\%.

US Gross Domestic Product

  • Great Contraction, 1929-33:

    • 1929: 104 billion. 1930: 91 billion. 1931: 77 billion. 1932: 59 billion. 1933: 57 billion.

  • New Deal Recovery, 1934-37:

    • 1934: 66.0 billion. 1935: 73.3 billion. 1936: 83.8 billion. 1937: 91.9 billion.

Economic Growth Recovered

  • Between 1933 & 1936: From -1.3\% (1933) to +13\% (1936)

Top Ten Years for GDP Growth: 1920-2024

  • 1942: 19\%. 1941: 17\%. 1943: 17\%. 1936: 13\%. 1934: 11\%. 1935: 9\%. 1940: 9\%. 1937: 8\%. 1939: 8\%. 1944: 8\%.

Pre-emption and Co-optation

  • Calls for Bank Nationalization: (Banking Acts, FDIC)

  • Huey Long’s Share Our Wealth Plan: (monetary expansion; progressive taxation)

  • Dr. Francis Townsend’s Pension Plan, Ham & Eggs: (Social Security)

  • Sen. Hugo Black’s 30-hour week (minimum wages; maximum hours)

  • McNary–Haugen Farm Relief Bill: (AAA, Farm Credit Act)

  • Printing of Scrip: (Banking Acts; abandoning Gold Standard, currency expansion)

The First New Deal

  • Banking Act of 1933

  • Federal Emergency Relief Adm., 1933

  • Civilian Conservation Corps, 1933

  • Civil Works Administration, 1933

  • Emergency Food Relief, 1933

  • Tennessee Valley Authority, 1933

  • Agricultural Adjustment Act, 1933

  • Securities Act of 1933

  • National Recovery Administration, 1933

  • Expansion of Money Supply, 1933

  • Public Works Administration, 1933

  • Home Owners Loan Corporation, 1933

  • FDIC, 1933

  • Departure from Gold Standard, 1933

  • Child labor prohibition, 1933

  • Minimum wages, maximum hours, 1933

  • Minimum Wages for Women, 1933

  • Workplace Safety, 1933

  • Collective bargaining rights, 1933

  • Banking Act of 1934

  • Philippine Independence Act, 1934

  • Securities & Exchange Act, 1934

  • National Firearms Act, 1934

The New Deal Strategy

  • Relief (immediate)

  • Recovery (immediate to medium term)

  • Reform (medium to long term)

Relief (Immediate)

  • Banking Act of 1933

  • Fed. Emergency Relief Adm., 1933

  • Civilian Conservation Corps, 1933

  • Civil Works Administration, 1933

  • Works Progress Administration, 1935

  • Resettlement Administration, 1933

  • Public Works Administration, 1933

  • HOLC, 1933

  • FDIC, 1933

  • Social Security, 1935

  • Unemployment Assistance, 1935

  • Food Relief, 1933

  • Agricultural Adjustment, 1933

Recovery (Medium-Term)

  • Banking Reform (recovery not possible without banks)

  • Abandonment of Gold Standard

  • Expansion of Money Supply

  • AAA (raising commodity prices)

  • National Recovery Administration (raising prices)

  • WPA (raising demand)

  • PWA (infrastructure would enlarge capacity)

  • Housing Policy (HOLC)

  • CCC (raising demand)

  • TVA (employment and infrastructure)

  • RFC reform and expansion

Reform (Longer-Range)

  • Banking Acts, 1933, 1934

  • FDIC, 1933

  • Abandonment of Gold Standard

  • Expansion of Money Supply

  • Securities and Exchange Acts, 1933, 1934

  • National Recovery Administration (child labor, minimum wage)

  • Housing Policy (HOLC, etc.)

  • National Labor Relations Act

  • TVA

  • Social Security (ending the “old-age drag” on growth)

Government Expenditures

  • Hoover Administration

    • 1929: 9.4 billion. 1930: 10.0 billion. 1931: 9.9 billion. 1932: 8.7 billion

    • Spending as percentage of GDP, 1929-32: 12%

  • The New Deal

    • 1933: 8.7 billion. 1934: 10.5 billion. 1935: 10.9 billion. 1936: 13.1 billion. 1937: 12.8 billion. 1938: 13.8 billion. 1939: 14.8 billion

In 1932, FDR united various minority groups to craft his majority. Voter turnout, especially among immigrants, increased from Al Smith’s 1928 campaign. While FDR's popularity exceeded that of the Democratic Party, about 3/4 of African-American voters supported Hoover, remaining loyal to the Republican Party; FDR gained about 82% of the Jewish vote.

The 1932 election marked a significant shift, with a Democratic candidate winning a majority of the popular vote for the first time since 1876. FDR believed in capitalism but saw the necessity for its reinvention, advocating for "bold, persistent experimentation" and urging to "Take a method and try it: If it fails, admit it frankly and try another. But above all, try something.”

Reducing unemployment from 24.9\% & raising GDP from 57 billion (1933) to 81 billion (1936). The New Deal aimed for "a better, cleaner, safer future for all."

Spending as percentage of GDP, 1929-32: 12%