The Great Depression and the New Deal,...

Chapter32TheGreatDepressionandtheNewDeal,

1933–1939

I.FDR:PoliticianinaWheelchair• Roosevelt'spersonality– Shapedbystrugglewithinfantileparalysis:• Putadditionalsteelinhissoul• Sufferinghumbledhim• Schooledhimselfinpatience,tolerance,compassion,andstrengthofwill

– Apersonalandpoliticalassetwashiswife,Eleanor:

– DistantcousinofFranklin– Overcamemiseryofunhappychildhood– Emergedaschampionofdispossessed– Ultimately“conscienceoftheNewDeal”

I.FDR:PoliticianinaWheelchair(cont.)

– FDR'spoliticalcareerasmuchhersasitwashis– Mrs.Rooseveltalsomarchedtoherowndrummer

» JoinedWomen'sTradeUnionLeagueandLeagueofWomenVoters– MovingintoWhiteHouse,shebroughtunprecedentednumberofwomenactivists

– NetworkhelpedmakehermostactiveFirstLadyinhistory– Shepowerfullyinfluencedpoliciesofnationalgovernment– Shebattledforimpoverishedandoppressed– PersonnelrelationshipwithFDRrocky,duetohisinfidelities– Condemnedbyconservativesandlovedbyliberals,shewasoneofmostcontroversial—andconsequential—publicfiguresof1900s

• FranklinRoosevelt'spoliticalappeal:– PremierAmericanoratorofhisgeneration– AspopulardepressiongovernorofNewYork:• Sponsoredheavystatespendingtorelievehumansuffering• Believedmoney,ratherthanhumanity,expendable• Revealeddeepconcernforplightof“forgottenman”• Assailedbyrichas“traitortohisclass”

• DemocraticNationalConvention(July1932)inChicagospeedilynominatedRoosevelt– Democraticplatform:• Promisedbalancedbudget• Sweepingsocialreforms• FDRflewtoChicagoandacceptednominationinperson• Hiswords,“Ipledgeyou,IpledgemyselftoanewdealfortheAmericanpeople”

II.PresidentialHopefulsof1932– Roosevelt:• ConsistentlypreachedNewDealfor“forgottenman”• Hewasannoyinglyvagueandsomewhatcontradictory• Manyofhisspeechesghostwrittenby“BrainsTrust”(popularlyBrainTrust)– Smallgroupofreform-mindedintellectuals– Kitchencabinet,whoauthoredmuchNewDeallegislation– FDRrashlypromisedbalancedbudget– AndberatedheavyHooveriandeficits

II.PresidentialHopefulsof1932(cont.)

– Hoover:• RemainedinWhiteHouse:

– Conscientiouslybattlingdepression– Outoncampaign,supportershalfheartedlyassuredhalf-listeningvoters

– InsistedRoosevelt'simpendingvictorywouldplungenationdeeperintodepression

• WithcampaigngoingbadlyforRepublicans,– Hoovertooktostump– ReaffirmedhisfaithinAmericanfreeenterpriseandindividualinitiative

III.Hoover'sHumiliationin1932

• Electionof1932:– Hooverhadbeensweptintoofficeonrisingtideofprosperity

– Hewassweptoutofofficebyrecedingdepression– Votes:• 22,809,638forRoosevelt;15,758,901forHoover• Electoralcount472to59• Hoovercarriedonlysixrock-ribbedRepublicanstates

III.Hoover'sHumiliationin1932(cont.)

• Featuresofelection:– DistinctshiftofblackstoRooseveltcamp• Victimsofdepression• ShiftedtoDemocraticParty,especiallyinurbancentersofNorth

– HardtimesruinedRepublicans:• Voteasmuchanti-Hooverasitwaspro-Roosevelt• Democratsvoiceddemandforchange:

– AnewdealratherthantheNewDeal

• Lameduckperiod:– Hoovercontinuedtobepresidentfor4longmonths,untilMarch4,1933• Helplesstoembarkuponanylong-rangepolicieswithoutcooperationofRoosevelt• President-electuncooperative• HooverarrangedtwomeetingswithRoosevelttogetFDRtoagreetoanti-inflationarypolicythatwouldhavepreventedmostNewDealexperiments

– Inpolitics,thewinner,notloser,callstune

• Washingtondeadlocked:– Economyclankedtovirtualhalt– Oneworkerinfour,unemployed– BankslockedtheirdoorsthroughoutU.S.– SomeHooveritesaccusedRooseveltofdeliberatelypermittingdepressiontoworsensohecouldemergemorespectacularlyassavior

IV.FDRandtheThreeR's:Relief, Recovery,Reform

• InaugurationDay,March4,1933:– Rooseveltdenounced“moneychangers”whobroughtoncalamity

– DeclaredgovernmentmustwagewaronGreatDepression

– Moveddecisively:• Boldlydeclarednationwidebankingholiday,March6-10• SummonedCongressintospecialsessiontocopewithnationalemergency:

IV.FDRandtheThreeR's:Relief,Recovery,Reform(cont.)

• HundredDays(March9-June16,1933):– Congresscrankedoutunprecedentedremediallegislation(seeTable32.1)

– Newmeasurestodealwithdesperateeconomy– AimedatthreeR's:relief,recovery,andreform– Short-rangegoals—reliefandimmediaterecoveryintwoyears

– Long-rangegoals—permanentrecoveryandreformofcurrentabuses

Table 32-1 p746

IV.FDRandtheThreeR's:Relief,Recovery,andReform(cont.)

• Roosevelt'sHundredDaysCongress:– RubberstampedbillsdraftedbyWhiteHouse– Roosevelt's“mustlegislation”gavehimextraordinaryblank-checkpowers

– Someofthenewlawsdelegatedlegislativeauthoritytochiefexecutive

– PassedmanyessentialNewDeal“threeR's”thoughlong-rangemeasuresaddedlater

IV.FDRandtheThreeR's:Relief,Recovery,andReform(cont.)

• NewDealersembracedprogressiveideas:• Unemploymentinsurance,old-ageinsurance• Minimum-wageregulations• Conservationanddevelopmentofnaturalresources• Restrictionsonchildlabor

– Inventedsomenewschemes:• TennesseeValleyAuthority

– NolongerwouldAmericalookasbackwardinrealmofsocialwelfareasitoncehad

V.RooseveltManagestheMoney

• Bankingchaos—immediateaction:– EmergencyBankingReliefActof1933:• InvestedPresidentwithpowertoregulatebankingtransactionsandforeignexchange• Toreopensolventbanks

• Rooseveltturnedtoradio:– Deliveredfirstof30famous“firesidechats”– Nowsafetokeepmoneyinreopenedbanks– Confidencereturned;banksunlockeddoors

V.RooseveltManagestheMoney(cont.)

• Glass-SteagallBankingReformAct:– CreatedFederalDepositInsuranceCorporation:• Insuredindividualdepositsupto$5,000(laterraised)• Endedbankfailures,datingbackto“wildcat”daysofAndrewJackson(seeFigure32.1)

• Declininggoldreserves:• FDRorderedallprivateholdingsofgoldbesurrenderedtoTreasuryinexchangeforpapercurrency• Thentooknationoffgoldstandard• Congresscanceledgold-paymentclauseinallcontracts

Figure 32-1 p747

• Authorizedrepaymentinpapercurrency– A“managedcurrency”onitsway:• FDR's“managedcurrency”wasinflation:

– Whichhebelievedwouldrelievedebtors'burdens– Andstimulatenewproduction

• Principalinstrumentforachievinginflationwasgoldbuying

– InstructedTreasurytopurchasegoldatincreasingprices—priceofgoldincreasedfrom$21anounce(1933)to$35anounce(1934)• Apricethatheldforfourdecades

• Policydidincreaseamountofdollarsincirculation• Inflationaryresultprovokedwrathof“sound-money”criticson“baloneydollar”• GoldschemecametoendinFebruary1934,whenRooseveltreturnedtolimitedgoldstandardforinternationaltradepurposes– UnitedStatespledgedtopayforeignbills,ifrequested,ingoldatrateofoneounceofgoldforevery$35due

• Domesticcirculationofgoldcontinuedtobeprohibited– Goldcoinsbecamecollector'sitems

VI.CreatingJobsfortheJobless

• Overwhelmingunemployment:– Oneoutoffourworkersjobless• Highestlevelofunemploymentinnation'shistory• Roosevelthadnohesitancyaboutusingfederalmoneytoassistunemployed• Atsametime“primethepump”ofindustrialrecovery

VI.CreatingJobsfortheJobless(cont.)

• CivilianConservationCorps(CCC):–MostpopularofNewDeal“alphabeticalagencies”• Providedemploymentinfresh-airgovernmentcampsforaboutthreemillionyoungmen• Usefulwork—includingreforestation

– Firefighting(47liveslost),floodcontrol,swampdrainage• Recruitsrequiredtohelpparentsbysendinghomemostoftheirpay• Bothhumanandnaturalresourcesconserved

– CriticsofCCC:• Minorcomplaintsof“militarizingthenation'syouth”

– Adultunemployment:• FederalEmergencyReliefAdministration(FERA):

– UnderHarryL.Hopkins– Hopkins'sagencygranted$3billiontostatesfordirectdolepaymentsorpreferablyforwagesonworkprojects

• Reliefforhard-pressedspecialgroups:– AgriculturalAdjustmentAct(AAA):• Mademillionsavailabletohelpfarmersmeetmortgages

– HomeOwners'LoanCorporation(HOLC):• Refinancedmortgagesonnonfarmhomes• Assistedamillionbadlypinchedhouseholds• Bailedoutmortgage-holdingbanks• Boltedloyaltiesofrelievedmiddle-classhomeownerssecurelytoDemocraticparty

• CivilWorksAdministration(CWA)(1933):– SetupbyRoosevelthimself– UnderdirectionofHopkinsviaFERA• Providedtemporaryjobsduringcruelwinteremergency• Tensofthousandsofjoblessemployedatleafrakingandothermake-worktasks• Schemewidelycriticizedaskindoflaborthatputpremiumonshovel-leaningslowmotion

Table 32-2 p749

VII.ADayforEveryDemagogue

• Persistenceofsufferingindicatedemergencyreliefmeasuresneeded– Notonlytobecontinued,butsupplemented– Dangersignalwasappearanceofdemagogues—notablymagnetic“microphonemessiah”:• FatherCharlesCoughlinbeganbroadcastingin1930

– Hissloganwas“SocialJustice”– Hisanti-NewDealmessageswentto40millionradiofans– Soanti-Semitic,fascistic,anddemagogicthathewassilencedin1942byecclesiasticalsuperiors

VII.ADayforEveryDemagogue(cont.)

– Newbroodofagitatorscapitalizedonpopulardiscontent:• Dr.FrancisE.Townsendpromisedeveryoneoversixty$200amonth• SenatorHueyP.Long(“Kingfish”)publicizedhis“ShareOurWealth”program– Promisedtomake“EveryManaKing”– Everyfamilywouldreceive$5,000,supposedlyatexpenseofprosperous

– FearofLongbecomingfascistdictatorendedwhenhewasshotbyanassassininLouisianain1935

– Demagogues(CoughlinandLong)raisedtroublingquestionsaboutlinkbetweenfascismandeconomiccrisis:

– AuthoritarianrulestrengthenedinJapan– AdolfHitleracquiredabsoluteauthorityinGermany– SomeworriedRooseveltwouldturnintodictator

• Toquietunrest,CongressauthorizedWorksProgressAdministration(WPA)in1935– Objectivewasemploymentonusefulprojects– Agencyultimatelyspentabout$11billiononthousandsofpublicbuildings,bridges,andhard-surfacedroads

• NoteveryWPAprojectstrengthenedinfrastructure– OnecontrolledcricketsinWyoming– BuiltamonkeypeninOklahomaCity

• MostlovedWPAprograms:– FederalArtProject—hiredartiststocreatepostersandmurals

• CriticsclaimedWPAmeant“WeProvideAlms”• Overeightyears,nearlyninemillionpeoplegivenjobs,nothandouts:– Nourishedprecioustalent– Preservedself-respect– Fosteredcreationofmorethanamillionpiecesofart,manyofthempubliclydisplayed

VIII.NewVisibilityforWomen

– After19thAmendment,womenbegantocarvemorespaceinpoliticalandintellectuallife

– FirstLadyEleanormostvisiblewomaninRooseveltWhiteHouse

– SecretaryofLaborFrancisPerkins(1880-1965)becamefirstwomancabinetmember

– MaryMcLeodBethune(1875-1955)• DirectorofOfficeofMinorityAffairsinNationalYouthAdministration—servedashighest-rankingAfricanAmericaninRooseveltadministration

VIII.NewVisibilityforWomen(cont.)

• Women'scontributioninsocialsciences:– Anthropology:• RuthBenedict(1887-1948)carriedonworkofhermentor,FranzBoas(1858-1942)– Bydeveloping“cultureandpersonalitymovement”in1930sand1940s

– Benedict'slandmarkwork:PatternofCulture(1934):» Establishedstudyofculturesascollectivepersonalities» Eachculture,likeeachindividual,haditsown“moreorlessconsistentpatternofthoughtandaction”

VIII.NewVisibilityforWomen(cont.)

• MargaretMead(1901-1978),studentofBenedict:– HerstudiesofadolescenceamongPacificislandpeoplesadvancedboldnewideasaboutsexuality,genderroles,andintergenerationalrelationships

– 34bookspublishedandcuratorshipatAmericanMuseumofNaturalHistory,NewYork

– Popularizedculturalanthropologyandachievedcelebritystatusrareamongsocialscientists

• PearlS.Buck(1892-1973):– IntroducedAmericanreaderstoChinesepeasantsociety– Herbestsellingnovel,TheGoodEarth(1931)earnedNobelPrizeforLiteraturein1938

– Usedherfametoadvancehumanitariancauses

IX.HelpingIndustryandLabor

• NationalRecoveryAdministration(NRA)– Mostcomplexandfar-reachingofNewDealprojects• Combineimmediatereliefwithlong-rangerecoveryandreform• Triple-barreled:designedtoassistindustry,labor,andunemployed– Individualindustrieswouldworkoutcodesof“faircompetition”underwhichhoursoflaborwouldbereduced

– Tospreademploymenttomorepeople– Aceilingplacedonmaximumhoursoflabor– Afloorplacedunderwagestoestablishminimumlevels

IX.HelpingIndustryandLabor(cont.)

– Laborgrantedadditionalbenefits:• Workersformallyguaranteedrighttoorganize• Andbargaincollectivelythroughrepresentativesoftheirownchoosing—notagentsofcompany'schoosing• “Yellowdog,”orantiunion,contractexpresslyforbidden• Certainrestrictionsplacedonuseofchildlabor

• NRA's“faircompetition”codes:– Calledforself-denialbymanagementandlabor– Patriotismarousedbymassmeetingsandparades

– BlueeagledesignedassymbolofNRA– Forbrieftime,anupswinginbusinessactivity

– ProblemsofNRA:• Toomuchself-sacrificeexpectedoflabor,industry,andpublic• “Ageofchiselry”asunscrupulousbusinessmen(“chiselers”)displayedblueeaglebutsecretlyviolatedcodes• SupremeCourtkilledNRAinfamed“sickchicken”case

– InSchechter(1935)Courtruled:– Congresscouldnot“delegatelegislativepowers”toexecutive– Declaredcongressionalcontrolofinterstatecommercecouldnotapplytoalocalbusiness

– PublicWorksAdministration(PWA):• LikeNRA,intendedforindustrialrecoveryandunemploymentrelief• HeadedbySecretaryofInterior,HaroldL.Ickes• $4billionspenton34,000projects:

– Publicbuildings,highways,andparkways– GrandCouleeDamonColumbiaRiver(Washington):

» Irrigatedmillionsofacresofnewfarmland» CreatedmoreelectricalpowerthanentireTennesseeValleyAuthority

» TransformedPacificNorthwestwithabundantwaterandpower

– Liquorindustry:• Imminentrepealofprohibition:

– Affordedopportunitytoraisefederalrevenue– Andprovideemployment

• HundredDaysCongress– Legalizedlightwineandbeerwithalcoholiccontentofnomorethan3.2%byweight

– Leviedtaxof$5oneverybarrelsomanufactured• ProhibitionrepealedbyTwenty-firstAmendmentin1933(seeAppendix)– Saloondoorsswungopen

X.PayingFarmersNottoFarm

– Sufferingfarmers:• Sincewar-boomdaysof1918,sufferedlowpricesandoverproduction• Depression—innumerablemortgagesforeclosed

– AgriculturalAdjustmentAdministration(AAA):• Through“artificialscarcity”establish“parityprices”forbasiccommodities• “Parity”aspricesetforaproductthatgaveitsamevalue,inpurchasingpower,thatitenjoyedfrom1909-1914

X.PayingFarmersNottoFarm(cont.)

• AAAwouldeliminateprice-depressingsurplusesbypayinggrowerstoreducecropacreage• Millionsraisedbytaxingprocessorsoffarmproducts,whointurnwouldshiftburdentoconsumers• “Subsidizedscarcity”wouldraisefarmincome• Payingfarmersnottofarmincreasedunemployment• SupremeCourtkilledActin1936• CongresshastenedtopassSoilConservationandDomesticAllotmentActof1936– Farmerspaidtoplantsoil-conservingcropsorletlandliefallow

X.PayingFarmersNottoFarm(cont.)

• EmphasisonconservationapprovedbySupremeCourt– SecondAgriculturalAdjustmentActof1938:• Continuedconservationpayments• Ifgrowersobservedacreagerestrictionsonspecifiedcommodities,theywouldbeeligibleforparitypayments• Goaltogivefarmersnotonlyfairerpricebutmoresubstantialshareofnationalincomepartiallyachieved

XI.DustBowlsandBlackBlizzards

• Naturehelpedprovideunplannedscarcity:– DustBowl:• Droughtandwindtriggeredduststorms,buttheywerenotonlyculprits:• Farmersboughtcountlessacresofmarginallandundercultivation• Dry-farmingtechniquesandmechanizationhadrevolutionizedGreatPlainsagriculture• Methodsleftpowderytopsoiltobesweptawayatnature'swhim(seeMap32.1)

XI.DustBowlsandBlackBlizzards (cont.)

• Tensofthousandsofrefugeesfledruinedfarms– ManysettledinSanJoaquinValleyofCalifornia– Yettransitionwascruel– DismalstoryofthesehumantumbleweedsrealisticallyportrayedbyJohnSteinbeck,TheGrapesofWrath(1939)

– Effortstorelievetheirburdens:• Frazier-LemkeFarmBankruptcyAct(1934):

– Madepossiblesuspensionofmortgageforeclosuresforfiveyears—voidednextyearbySupremeCourt

– Revisedlaw,limitinggraceperiodtothreeyears,unanimouslyupheld

XI.DustBowlsandBlackBlizzards(cont.)

• ResettlementAdministration(1935):– Chargedwithremovingnear-farmlessfarmerstobetterland– 200millionyoungtreessuccessfullyplantedonbareprairiesbyyoungmenofCivilianConservationCorps

• NativeAmericansfeltfar-reachinghandofNewDealreform:– CommissionerofIndianAffairsJohnColliersoughttoreverseforced-assimilationpolicesinplacesinceDawesActof1887(seeChap.26)

– CollierpromotedIndianReorganizationActof1934» “IndianNewDeal”encouragedtribestoestablishlocalself-governmentandpreservenativecraftsandtraditions

XI.DustBowlsandBlackBlizzards(cont.)

– NewlawhelpedstoplossofIndianlandsand– Revivedtribes'interestinidentityandculture– NotallNativeAmericansapplaudedit:• Somedenounceditas“back-to-the-blanket”measurethatwouldmakemuseumpiecesoutofIndians• 77tribesrefusedtoorganizeunderit,thoughnearly200othersdidestablishtribalgovernments

Map 32-1 p756

XII.BattlingBankersandBigBusiness– NewDealersdeterminedtoreform“moneychangers”• WhohadplayedfastandloosewithgullibleinvestorsbeforeWallStreetcrashof1929

– “TruthinSecuritiesAct”(FederalSecuritiesAct):• Requiredpromoterstotransmittoinvestorssworninformationregardingsoundnessofstocksandbonds

– SecuritiesandExchangeCommission(SEC)1934:• Watchdogagencytoprotectpublicagainstfraud,deception,andinsidemanipulation– Stockmarketswouldoperatemoreastradingmartsandlessasgamblingcasinos

XII.BattlingBankersandBigBusiness(cont.)

• NewDealersdirectedfireatpublicutilityholdingcompanies:– Onesuchsupercorporationcollapsedin1932whenSamuelInsull'sfinancialempirecrashed

– PublicUtilityHoldingCompanyActof1935:• “Deathsentence”tosuchbloatedgrowth,exceptwhereitmightbedeemedeconomicallyneedful

XIII.TheTVAHarnessestheTennessee

– Electric-powerindustryattractedireofNewDealreformersforchargingexcessiverates:• Anindustrythatreacheddirectlyintopocketbooksofmillionsofcustomersforvitallyneededservices• TennesseeRiverprovidedNewDealerswithopportunity:– Bydevelopinghydroelectricpotentialofentirearea,Washingtoncouldcombineimmediateadvantage:» Employmentofthousandsofpeopletowork» Andlong-termprojectforreformingpowermonopoly

XIII.TheTVAHarnessestheTennessee(cont.)

• TennesseeValleyAuthority(TVA)(1933)• VisionofSenatorGeorgeW.NorrisofNebraska• Fromstandpointof“plannedeconomy,”byfarmostrevolutionaryofallNewDealschemes• Determinedtodiscoverpreciselyhowmuchitcosttoproductanddistributeelectricity• Withthat“yardstick,”fairnessofrateschargedbyprivatecompaniescouldbejudged• NewDealerspointedwithpridetoamazingachievementsofTVA

Map 32-2 p757

– Benefitstoarea:• Fullemployment• Cheapelectricpower(seeFigure32.2)• Low-costhousing• Abundantcheapnitrates• Restorationoferodedsoil• Reforestation• Improvednavigation• Floodcontrol

• NewDealersagitatedforparallelenterprisesinvalleysofColumbia,Colorado,andMissouriRivers• Conservativereactionagainst“socialistic”NewDealconfinedTVA'sbrandoffederallyguidedresourcemanagementandcomprehensiveregionaldevelopmenttoTennesseeValley(seeMap32.2)

Figure 32-2 p758

XIV.HousingandSocialSecurity

• NewDealhousingpolicies:– FederalHousingAdministration(1934):• Buildingindustrystimulatedbysmallloanstohouse-holders:– Forimprovingtheirdwellings– Forcompletingnewones

• SopopularitoutlastedageofRoosevelt• Congressbolsteredprogramin1937byauthorizingUnitedStatesHousingAuthority(USHA):

XIV.HousingandSocialSecurity(cont.)

– Agencydesignedtolendmoneytostatesorcommunitiesforlow-costconstruction

– 650,000unitsstarted,tragicallyshortofneeds– Collidedwithoppositionfromrealestatepromoters,builders,landlords,andanti-NewDealers

– Stillslumsareasceasedgrowingandshrank

• SocialSecurityAct1935:– Unemploymentinsuranceandold-agepensions– Oneofmostcomplicatedandfar-reachinglawsevertopassCongress

• Providedforfederal-stateunemploymentinsurancetocushionfuturedepressions• Providedsecurityforoldage:

– SpecifiedcategoriesofretiredworkerswouldreceiveregularpaymentsfromWashington

– Paymentsrangedfrom$10to$85amonth(raisedperiodically)– Financedbypayrolltaxonemployersandemployees

• Provisionsmadeforblind,physicallyhandicapped,delinquentchildrenandotherdependents

• Republicanoppositionbitter:– “SocialSecurity”mustbebuiltuponacultofwork,nota“cultofleisure,”insistedHoover

– GOPnationalchairmanfalselychargedthateveryworkerwouldhavetowearametaldogtagforlife

• SocialSecurityinspiredbyindustrialnationsofEurope• Inurbanizedeconomy,governmentnowrecognizingitsresponsibilityforwelfareofcitizens• By1939,over45millioneligibleforSocialSecuritybenefits

• Infuture,othercategoriesadded:– Farmanddomesticworkers

» Millionsofpoormenandwomeninitiallyexcluded– IncontrasttoEurope,wherewelfareprogramswereuniversal:» Americanworkershadtobeemployed» Andincertainjobstogetcoverage

XV.ANewDealforLabor

–WagnerAct:• NationalLaborRelationsAct(1935)• Namedaftersponsor,SenatorRobertF.Wagner• CreatedpowerfulnewNationalLaborRelationsBoard:

– Administrativepurposes– Reassertedrightoflabortoengageinself-organization– Tobargaincollectivelythroughrepresentativesofitsownchoice– ConsideredMagnaCartaoflabor,WagnerActprovedtobemajormilestoneforAmericanworkers

XV.ANewDealforLabor(cont.)

– UndersympatheticNationalLaborRelationsBoard:• Unskilledworkersbegantoorganizeintoeffectiveunions• LeaderwasJohnL.Lewis,bossofUnitedMineWorkers

– FormedCommitteeforIndustrialOrganization(CIO)withinskilled-craftAmericanFederationofLabor(AFL)

– In1936,AFLsuspendedCIO– CIOthenmovedintoautoindustry:

» Resortedtosit-downstrike» RefusedtoleavefactorybuildingofGeneralMotorsatFlint,Michigan

» Thuspreventedimportationofstrikebreakers

– Conservativerespectersofprivatepropertyscandalized– VictorywhenGeneralMotorsrecognizedCIOassolebargainingagencyforitsemployees

• Unskilledworkerspressedadvantage:» USSteelCompanyavertedstrikewhenitgrantedrightsofunionizationtoitsCIO-organizedemployees

» “Littlesteel”companiesfoughtbacksavagely» 1937:MemorialDaymassacreatRepublicSteelCompanyplantinSouthChicago

» Afterpoliceopenedfire,areastrewnwithseveralscoredeadandwounded

• FairLaborStandardsAct1938:– AlsoknownasWagesandHoursBill• Setminimum-wagesandmaximum-hoursforindustriesinvolvedininterstatecommerce– Goals:40centsanhour(laterraised)and40-hourweek

• Laborbychildrenundersixteen(undereighteenifoccupationdangerous)forbidden• Reformsbitterlyopposedbyindustrialists,especiallytextiles• Excludedagricultural,service,anddomesticworkers

– Meantmanyblacks,MexicanAmericans,andwomennotbenefitfromact

• Laborunionizationthrived(seeFigure32.3)– Presidentreceivedvaluablesupportatballot-boxfromlaborleadersandappreciativeworkers

– CommitteeforIndustrialOrganizationformallyreconstitutedasCongressofIndustrialOrganizations(newCIO)underJohnL.Lewis• By1940claimedmembershipoffourmillion,including200,000blacks• JurisdictionalfeudingcontinuedwithAFL:laborseemedmorebentoncostlycivilwarthanonwarwithmanagement

Figure 32-3 p760

XVI.LandonChallenges“theChamp”

– Upcomingelectionof1936:• DemocratsrenominatedRooseveltonplatformsquarelyendorsingNewDeal• Republicanshard-pressedtofindacandidate

– SettledonhomespungovernorofKansas,AlfredM.Landon– LandonamoderatewhoacceptedsomeNewDealreformsbutnotpopularSocialSecurityAct

– RepublicanscondemnedNewDealofFranklin“Deficit”Rooseveltforitsradicalism,experimentation,confusion,and“frightfulwaste”

– LandonbackedbyHoover(calledfor“holycrusadeforliberty”)andAmericanLibertyLeagueofwealthyconservatives

XVI.LandonChallenges“theChamp”(cont.)

• Rooseveltdenounced“economicroyalists”– Electionreturns:• LandslideoverwhelmedLandon,whoonlywontwostates—MaineandVermont• Popularvote:27,752,869to16,674,665• Electoralcount523to8–mostlopsidedin116years• Democratsnowclaimedmorethantwo-thirdsofseatsinHouseandsameproportioninSenate

XVI.LandonChallenges“theChamp(cont.)

– Battleof1936:• MostbittersinceBryan'sdefeatin1896• PartiallyboreoutRepublicanchargesofclasswarfare

– Needyeconomicgroupslinedupagainstso-calledgreedyeconomicgroups

• CIOcontributedgenerouslytoFDR'scampaign• Manyleft-wingersturnedtoRoosevelt,asthird-partyprotestvotedeclinedsharply• BlacksswitchedtoDemocraticparty

XVILandonChallenges“theChamp(cont.)

• Rooseveltwonbecauseheappealedto“forgottenman,”whomheneverforgot– Somesupportersonlypocketbook-deep:“reliefers”– Rooseveltforgedpowerfulandenduringcoalitionof

» Southerners,» Blacks,urbanites,andpoor» Marshaledsupportof“NewImmigrants”—mostlyCatholicsandJews—whohadcomeofagepolitically

» In1920soneoutofevery25federaljudgeshipswenttoaCatholic» RooseveltappointedCatholicstooneoutofeveryfour

XVII.NineOldMenontheBench

– RoosevelttookpresidentialoathonJanuary20,1937,insteadoftraditionalMarch4:• TwentiethAmendmentratifiedin1933(seeAppendix)

– SweptawaypostelectionlameducksessionofCongress– Shortenedbysixweeksawkwardperiodbeforeinauguration

• RooseveltinterpretedreelectionasmandatetocontinueNewDeal:– Tohim,SupremeCourtjudgeswerestumblingblocks– InninemajorcasesinvolvingNewDeal,theyhadthwartedNewDealreformsseventimes

XVII.NineOldMenontheBench(cont.)

– Courtultra-conservative;sixofninejudgesover70• RoosevelthadnotappointedanyonetoCourtinfirstterm• Somejusticesheldonprimarilytocurb“socialistic”NewDeal• FDRbelievedvoters(presidentialelectionsof1932and1936andcongressionalelectionsof1934)hadclearlydemonstratedsupportforNewDeal• ToFDR,Courtobstructingdemocracy

XVII.NineOldMenontheBench(cont.)

– Roosevelthitonschemetofixproblem:• Provedtobeoneofhismostcostlypoliticalmisjudgments• AskedCongressforlegislationtopermithimtoaddanewjusticetoSupremeCourtforeveryoneoverseventywhowouldnotretire• Maximummembershipwouldbefifteen• HeallegedCourtfarbehindinitswork—whichprovedtobefalseandbroughtaccusationsofdishonesty• HeadstrongFDRnotrealizethatCourt,inpopularthinking,hadbecomesacredcow

XVIII.TheCourtChangesCourse

– CongressandnationconvulsedoverCourt-packingplan:• FDRvilifiedforattemptingtobreakdelicatechecksandbalancesamongthreebranches• Accusedofgroominghimselfasdictatorbytryingtobrowbeatjudiciary• ToRepublicansandsomeDemocrats,basiclibertiesseemedinjeopardy• Courtsawaxhangingoveritshead:

– JusticeOwenJ.Roberts,aconservative,begantovotewithliberalcolleagues

XVIII.TheCourtChangesCourse(cont.)

• In1937,Courtupheldprincipleofstateminimumwageforwomen,reversingits1936decision• Insucceedingdecisions,CourtbecamemoresympathetictoNewDeal:– UpheldNationalLaborRelationsActandSocialSecurityAct

• Roosevelt's“Courtpacking”furtherunderminedwhenCongressvotedfullpayforjusticesover70whoretired:– Oneofoldestconservativesresigned– ReplacedbyNewDealer,JusticeHugoBlack

– Congressfinallypassedcourtreformbill:• Watered-downversionappliedonlytolowercourts• RooseveltsufferedfirstmajorlegislativedefeatathandsofhisownpartyinCongress• EventuallyCourtbecamemarkedlymorefriendlytoNewDealreforms• Successionofdeathsandresignationsenabledhimtomakenineappointmentstotribunal—morethananyofhispredecessorssinceGeorgeWashington• Clock“unpacked”Court

– Yetinasense,FDRlostbothCourtbattleandwar:• SoarousedconservativesofbothpartiesinCongressthatfewNewDealreformspassedafter1937,yearoffightto“pack”bench• Withthiscatastrophicmiscalculation,hesquanderedmuchofgoodwillthatcarriedhimtovictoryin1936election

XIX.TwilightoftheNewDeal

– Roosevelt'sfirsttermdidnotbanishdepression:• Unemploymentpersistedin1936atabout15%,downfrom25%of1933,butstillhigh(seeFigure32.4)• Recoveryhadbeenmodest• Thenin1937economytookanothersharpdownturn:

– Surprisingseveredepression-within-thedepressionthatcriticsdubbed“Rooseveltrecession”

– Governmentpoliciescausednosedive:» JustasnewSocialSecuritytaxesbegantotakeeffect» FDRcutgovernmentspendingtotrytobalancebudget

Figure 32-4 p763

XIX.TwilightoftheNewDeal (cont.)

– RooseveltthendeliberatelyembracedideasofBritisheconomistJohnMaynardKeynes:• FDRannouncedboldprogramtostimulateeconomybyplanneddeficitspending• Keynesianism—useofgovernmentspendingandfiscalpolicyto“primethepump”ofeconomyandencourageconsumerspending• Policybecameneweconomicorthodoxyandremainedsofordecades

• RooseveltcontinuedtopushremainingreformmeasuresofNewDeal:

• UrgedCongresstoauthorizesweepingreorganizationofnationaladministrationininterestsofefficiency• Notdone,andthusanotherdefeat• Twoyearslater,CongresspartiallyrelentedandpassedReorganizationAct:– Gavepresidentsomepowersforadministrativereforms,includingkeynewExecutiveOfficeinWhiteHouse

– HatchAct1939:• Barredfederalofficials,excepthighestpolicy-makingofficers,fromactivepoliticalcampaigningandsoliciting• Forbadeuseofgovernmentfundsforpoliticalpurposes• Forbadecollectionofcampaigncontributionsfrompeoplereceivingreliefpayments

– HatchActbroadenedin1940:• Placedlimitsoncampaigncontributionsandexpenditures– Aftersomefoundwaysaroundit,legislationproveddisappointing

– By1938,NewDeallostitsmomentum:• Rooseveltcouldfindfewnewreforms• Incongressionalelectionsof1938,Republicansscoredvictoriesbutfailedtogaincontrolineitherhouse• Foreignaffairsincreasinglydominatedpublicdebate

XX.NewDealorRawDeal?– FoesofNewDealcondemned:• Allegedwaste,incompetence,confusion,contradictions,andcross-purposes• Aswellasgraftinalphabeticalagencies—“alphabetsoup,”sneeredAlSmith• Deploredemploymentof“crackpot”collegeprofessors,leftist“pinkos,”andoutrightCommunists• ClaimedNewDealerstryingtomakeU.S.A.overinBolshevik-Marxistimageunder“Rooseveltski”

XX.NewDealorRawDeal? (cont.)

• RooseveltaccusedofbeingJewish(“Rosenfield”)andtappingtoomanyJewishleftists(“TheJewDeal”)forhis“DrainTrust”• Businesspeopleshockedbyleap-before-you-look,try-anything-oncespirit• “Bureaucraticmeddling”and“regimentation”werebittercomplaintsofanti-NewDealers• Federalgovernment,withallitsemployees,becameincomparablylargestsinglebusinessincountry

• Promisesofbudgetbalancingflewoutwindow– Nationaldebtin1932=$19,487,000,000– Skyrocketedby1939to$40,440,000,000

• Americabecoming“handoutstate;”U.S.stoodfor“unlimitedspending”• Businessmenbitter:

– AccusedNewDealoffomentingclassstrife– Conservativesinsistedlaborersandfarmersbeingpampered– Businessmenwantedgovernmentofftheirbacks– Privateenterprisebeingstifledby“plannedeconomy,”“plannedbankruptcy”and“creepingsocialism”

• States'rightsignored,whilegovernmentcompetedinbusinesswithitsowncitizens,under“dictatorshipofdo-gooders”

– Roosevelt'sleadershipdenounced:• “One-mansupergovernment”• HeavyfireagainstattemptstobrowbeatSupremeCourtandcreate“dummyCongress”– Triedto“purge”CongressofDemocratswhowouldnotmarchinlockstepwithhim

– Threesenatorswhomhepubliclyopposedallreelected

• MostdamningindictmentofNewDeal:– Failedtocuredepression– Floatinginseaofredink,ithadonlyadministeredaspirin,sedatives,andBand-Aids• $20billionpouredoutinsixyearsofdeficitspendingandlending– Gapnotclosedbetweenproductionandconsumption– MorefarmsurplusunderRooseveltthanunderHoover– Millionsstillunemployedin1939aftersixyearsofdrain,strain,andpain

XXI.FDR'sBalanceSheet– NewDealersstaunchlydefendedrecord:• Somewaste,butpointedoutthatrelief—noteconomy—hadbeenprimaryobjective• Somegraft,butarguedithadbeentrivialinviewofimmensesumsspentandobviousneedforhaste• NewDealrelievedworstofcrisisin1933• Promotedphilosophyof“balancingthehumanbudget”• Washingtonregimetobeused,notfeared• CollapseofAmerica'seconomicsystemaverted• Fairerdistributionofnationalincomeachieved• Citizensabletoregainandretainself-respect

XXI.FDR'sBalanceSheet(cont.)

• Thoughhatedbybusinesstycoons,FDRshouldhavebeentheirpatronsaint– Deflectedpopularresentmentsagainstbusiness– MayhavesavedAmericansystemoffreeenterprise– Hisquarrelnotwithcapitalismbutwithcapitalists– PurgedAmericancapitalismofsomeofitsworstabuses– Headedoffradicalswingtoleft– ClaimedthatNewDealdidnotbankruptUnitedStates– MassivenationaldebtcausedbyWWII,notNewDeal

» Nationaldebt=$40billionin1939;$258billionin1945

• FDRprovidedboldreformwithoutbloodyrevolution• Upbraidedbyleft-wingradicalsfornotgoingfarenough,byright-wingradicalsforgoingtoofar– Choosingmiddleroad,RoosevelthasbeencalledgreatestAmericanconservativesinceHamilton» Hamiltonianinespousalofbiggovernment,butJeffersonianinconcernfor“forgottenman”

– Demonstratingvalueofpresidentialleadership,heexercisedpowertorelieveerosionofnation'sgreatestresource—itspeople

– HelpedpreservedemocracyinAmericaatatimewhendemocraciesabroaddisappearingtodictatorship

• Unwittinglygirdednationforitspartintitanicwarthatloomedonhorizon—awarinwhichdemocracytheworldoverwouldbeatstake

The Great Depression and the New Deal,...

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