The Evolution of FDR's New Deal: Challenges, Responses, and Legacy

1. FDR’s Second Term

2. The First Term • ’34 Mid-term elections • Dems dominate • Impact of Eleanor = ACTIVIST, AGITATOR • “No woman has ever so comforted the distressed or distressed the comfortable.” • Social service, human welfare for women, blacks • Why? • “The bottom dropped out of my own particular world.” 1918

3. New Deal Criticism • Stabilized economy, but unemployment 10%+ • “We have been patient and long suffering. We were promised a New Deal. Instead we have the same old stacked deck.” –farmer, ‘33 • Executive power increased • Welfare capitalism • Worker entitlement • American Liberty League = opposition to New Deal • Businessmen + politicians • Al Smith, John Davis

4. Alternate solutions • “Kingfish” of LA- Huey P. Long • Lawyer, politician, “clown” • For LA- roads, schools, hospitals, better public services • How? • Share Our Wealth program • 5k/family, $2,500/year, pensions, low working hours, bonus pay for vets, college ed. • No econ. recovery

5. Dr. Francis Townsend- CA • Townsend Plan, ‘34 • Pensions ,$200/month to 60+, jobs for young • Affect only 9% of population, cost ½ the budget • Father Charles Coughlin- the “radio priest” (CBS) • National Union for Social Justice, ‘34 • Coinage of silver, attacks on bankers (anti-semitism)

6. Court Opposition • 5/27/35- Schechter Poultry Corp. v. U.S. • “sick chicken case” • Schechter sold “unfit” chicken, violated NRA code • SC ruled Congress gave too much power to Exec. Branch when code-making authority was given to NRA, Congress exceeded power by attempt to regulate INTRASTATE commerce • Killed NRA

7. The Second New Deal, 1935 • “I’m fighting communism, Huey Longism, Coughlinism, Townsendism.” –FDR, 1936 • Move LEFT • Laws, influence of SC Justices L. Brandeis, Felix Frankfurter

8. Wagner Act (Nat’l Labor Relations Act) • Workers given right to bargain w/ employers through unions, employers stay out of union activities • Revenue Act (Wealth Tax Act) • Soak the rich tax • Raise tax rates on incomes $50k+, estate/gift taxes, corporate tax • Tax failed to increase fed. Revenue significantly, no redistribution of wealth • FDR = radical

9. Social Security Act • Movement away from individual self-reliance • For aged, indigent, disabled, unemployed 1. Pension fund for retired (65+) 2. Unemployment insurance program 3. Social welfare • State-administered programs get $ from Fed. Grants • Old age, dependent children, blind, maternal & child welfare, public health services • Funded by payroll taxes on employees and employers • Fixed tax, hurt poor, removed $ from circulation • Went to trust fund  shrinking of $ supply • Excluded farm laborers, domestic servants, self-employed

10. 1936 Election • FDR v. Kansas Gov. Alfred Landon • FDR- solid south, blacks, urbanites, poor, new immigrants, farmers • Landon- conservatives, business leaders • FDR victorious • EC: 523 – 8 • Pop: 27 m. – 16 m.

12. The Court-Packing Plan • SC still a block to FDR/Congress reforms to expand gov. • Cases in waiting for Wagner Act, Social Security • Size of court left to Congress • ‘37- 9 justices • 2/5- FDR send plan to Congress to create new judgeships (50 federal, 6 SC), diminish power of those having served 10+ years or 70+ yrs • Backfired- too political, insult to older judges, fear by public • Failed, BUT… • ‘37- court caved • Wagner & SS Act upheld, new liberal justice to replace conservative who resigned

13. The Roosevelt Recession: ‘37-’38 • ‘35-’36 • Improvement in econ. • gov. spending, relief payments, public-works, bonus to vets • ‘37 = cuts in federal spending, social security payroll taxes • Inflation, deficit •  “recession” • 4 m. unemployed, scenes of early depression

14. FDR image eroded • Debate in administration • Less fed. Spending & balanced budget v. more gov. spending & enforcement of antitrust laws • Early 1938- Congress approve spending program • Aim? Increase purchasing power, public works • No full recovery • Decline reversed • No massive, sustained gov. spending • Few major reforms

15. Wagner-Steagall Nat’l Housing Act (‘37) • USHA (Dept. of Interior)  loans to clear slums, public housing • Bankhead-Jones Farm Tenant Act (‘37) • Farm Security Admin.  loans to tenants to purchase own farms, prevent small farm owners from falling to tenancy • Problem? • Fair Labor Standards Act (‘38) • Min. wage = .40/hr, 40 hr workweek, 16 age limit

16. Legacy of the New Deal • By ‘38, much anti-ND opinion • State of the Democratic Party • House of Un-American Activities • A Plan to Purge the Party • By ‘39, the New Deal “has been reduced to a movement with no program, with no effective political organization, with no vast popular party strength behind it.”

17. Halfway Revolution • CHANGES • BIG government • HOPE to people • SHIFT in liberalism • TR/WW- aggressive regulation  equal opportunities • FDR- gov. respond AND take steps to AVOID social crises • Min. levels of: well-being, labor conditions, public welfare • Middle class helped to keep $$, homes, farms • FDIC, unemployment pay, SS = safeguard vs. future depression

18. First New Deal = experiment of managed economy under NRA • Abandoned in favor of competition, gov. spending • FDR policies revolutionary AND conservative • Gov = regulations, expanded social welfare • Fell short of socialism • Capitalist structure still in place • = halfway revolution