American History 102: 1865 to the Present
Stanley K. Schultz, Professor of History
William P. Tishler, Producer
Shane Hamilton, Web Editor
Lecture 20
[Graphics Version]
Dr. New Deal or Dr. Win-the-War
Franklin Delano Roosevelt's First New Deal was followed by what historians characterize as the Second New Deal (1935-1937). Like the First New Deal, it had its Hundred Days, known as the Second Hundred Days. This lecture examines the reform measures of the Second New Deal, economic backsliding in the Recession of 1937, and the reaction of isolationist Americans to growing hostilities in Europe and Asia.
VIDEOTAPE LECTURE #20 OUTLINE
[00:00] Bars, Tone, and Countdown
[03:30] FDR's speech at '36 Dem. Nat'l Conv.
[05:35] Father Charles Coughlin
[06:55] Huey Long, the "Kingfish"
[13:15] Communist Party
[16:15] The Second New Deal--"reform"
[24:50] Business responds
[29:40] The Roosevelt coalition
[32:47] The Roosevelt recession (1937)
[35:42] Keynesian economics
[38:00] Lasting impacts of the New Deal
[40:42] Corporate State
[43:02] Isolationist sentiment
[43:45] Nye Committee report
[45:45] FDR's limited involvement in foreign affairs
[46:45] Neutrality Acts (1935-37)
[50:00] The war in Europe
[57:20] "America First" (Henry Ford, Burton Wheeler, Charles Lindbergh)
[58:55] Pearl Harbor, Dec. 7, 1941
Some questions to keep in mind:
If Roosevelt's First New Deal (1933-1935) concentrated on relief, dealing with the immediate issue of getting unemployed Americans back to work, then the Second New Deal (1935-1937) concentrated on social reform issues. This Second New Deal came about in part, because of the social concerns of the President and First Lady, but also because of mounting criticism--from the political left and the political right--of the policies of the First New Deal.
One of the most vocal conservative critics was Father Charles Coughlin (1891-1979), a Roman Catholic priest and political activist. His weekly radio show--"Golden Hour of the Little Flower"-- was broadcast from Detroit and had as many as 40 million listeners. Father Coughlin's rhetoric was a curious combination of anti-communism, anti-capitalism, and anti-Semitism. At first, he supported the New Deal, calling it "Christ's Deal," but then he became increasingly upset at the slow pace of reform as well as his inability to play a major role in the administration. In addition, he viewed as criminally wasteful some of the tactics used under the AAA (Agricultural Adjustment Act) to limit overproduction: plowing under crops or slaughtering livestock. Coughlin launched the National Union for Social Justice to challenge the President, claiming that Roosevelt had "out-Hoovered Hoover."
The most powerful New Deal critic from the political left was Huey Long (1893-1935), governor of Louisiana and later U.S. senator from that state. Known as the "Kingfish," Long became the most powerful governor in Louisiana's history. He used that power to expand Louisiana's underdeveloped infrastructure, building hospitals, schools, highways, bridges, and a state university. Long's campaign slogan was "Every man a king, but no one wears a crown," and his ideas on the redistribution of wealth were very popular among the lower and middle classes of Louisiana. At first, he supported the New Deal, but soon found it too conservative and felt that FDR had fallen victim to big business. Long established the Share-Our-Wealth Society with the goal of taxing the rich in order to help the poor. He promised huge, confiscatory taxes on incomes over $1 million and inheritances over $5 million in order to provide the following:
Long's brand of politics was a type of "Neo-Populism" which found followers not only in Louisiana, but among rural, low-income families across the country. By mid-1935, Long's Share-Our-Wealth Clubs had 7 million members and the Kingfish was talking openly about challenging Roosevelt in the presidential race. In September of 1935, Senator Long returned to Louisiana to supervise a special session of the state legislature and was assassinated by the son-in-law of a ruined political opponent.
The New Deal had other critics as well. Governor Floyd Olson of Minnesota, having declared himself a socialist, sought a third party that would "preach the gospel of government and collective ownership of the means of production and distribution." Next door in Wisconsin, the Progressive legacy of "Fightin' Bob" LaFollette lived on in his sons U.S. Senator Robert LaFollette, Jr. and Governor Phil LaFollette.
Membership in the Communist Party of the United States hit a high in 1935. Proclaiming that "Communism is 20th-century Americanism," domestic Communists were careful to distance themselves from the revolutionary policies of Soviet Bolsheviks. They did not call for an overthrow of the government, but instead began to work in cooperation with labor unions and student groups. They set up Communist Party cells and Marxist study groups at many universities to attract students and professors to their cause.
As was discussed in Lecture 19, Franklin D. Roosevelt was a pragmatist, not an idealogue. He summed up his style of political action when he stated:
"Do something. And when you have done that something, if it works, do it some more. And if it does not work, then do something else."
That "something" turned out to be the Second New Deal. Beginning in 1935, Roosevelt began sending to Congress a host of new legislative initiatives. This is often characterized as FDR's shift to the left, although it was more of a budge. The laws that came out of the Second New Deal were:
WPA stood for Works Progress (later "Projects") Administration, which promoted both relief and reform. Required to choose projects that would not compete with private business, the WPA built streets, highways, bridges, airfields, and post offices, restored forests, and extended electrical power to rural areas. Over its seven-year history, the WPA employed about 8.5 million Americans. In addition to developing America's infrastructure, the WPA worked to promote American culture. The Federal Theater, Arts, Music, Dance, and Writers' Projects brought music and drama to even the smallest communities, sponsored public sculptures and murals, and commissioned noted American writers such as John Steinbeck, Richard Wright, John Cheever, and Claude McKay to write regional guidebooks and histories of the American people. This marked the first time that the federal government took on the responsibility to support and promote American art and culture.
The Wagner Act, known officially as the National Labor Relations Act, preserved and strengthened Section 7A of the NIRA. It guaranteed workers the right to unionize and the right of collective bargaining with management. For the first time, it committed the government to enforce these rights; under the law, employers could no longer resist unionization.
The Social Security Act was initially drafted at the University of Wisconsin. This act created a cooperative federal-state system to provide unemployment compensation and old-age insurance. Workers who paid Social Security taxes out of their wages would receive benefits upon retirement at age 65. These benefits would be paid for from employee and employer contributions. On the one hand, it seemed like a fairly radical piece of reform legislation, since the government committed itself to provide help for the elderly. On the other hand, this was a fairly conservative program, since workers and their employers were footing the bill, not the government. In addition, the initial Social Security Act did not include provisions for farm workers, domestic workers, employees of the restaurant and service industries, or health-care providers. Still, this was a milestone in American history because it acknowledged the responsibility of society at large to take care of the less fortunate.
The Wealth Tax Act brought about a sudden increase in taxes on the wealthy and created new and larger taxes on excess business profits,inheritances, large gifts, and profits from the sale of property. It also put new restrictions on trusts and holding companies.
Business leaders were highly critical of this Second New Deal and many viewed Roosevelt as a traitor to his class and a socialist who was out to strip them of their wealth. One of Roosevelt's aides noted the strength of the anti-Roosevelt attitude of American business leaders:
"There's a vast bitterness welling up from the grass roots of every country club in America."
Although Congress contained members far to the left of FDR, he was seen to personify the new anti-business era. Nonetheless, FDR actually preserved capitalism through his relief and reform efforts. The AAA, the NIRA, new banking regulations, and regulations of securities on Wall Street ultimately helped big business.
With big business turning against him, the President had to look for support elsewhere. For the presidential campaign of 1936, Roosevelt built what was called the "Roosevelt Coalition," which altered the shape of modern politics. While Republicans were still relying on their traditional support base (big business, big farmers, and conservatives), Democrats broadened their base of support, appealing to small farmers of the Midwest, urban political bosses, ethnic blue collar workers, Jews, and intellectuals. The most dramatic shift was seen in the voting patterns of African-Americans. Up until 1936, continuing the legacy of President Lincoln, most blacks had voted Republican. But in 1936, alliances shifted to the Democratic Party.
The election of 1936 marked the greatest electoral shift in American history. In 1932, the Republican party had won 10 of the 12 largest U.S. cities. In 1936, the twelve largest cities voted overwhelmingly Democratic.
Having won the 1936 presidential election by the biggest margin up to that time, it would seem that everything was going great for Roosevelt.
However, the economy collapsed once again in 1937, and wouldn't fully recover until the U.S. entered World War II.
Because Roosevelt desired a balanced federal budget, he began in January of 1937 to cut some of his own New Deal programs. Funding for the WPA, for example, was halved. As a result, unemployment rose by 1.5 million by July of that year. With farm subsidies cut, farm prices also fell, and by August an additional 4 million Americans were out of work.
Reasons for the Roosevelt Recession:
Roosevelt brought about the Recession of 1937 because he refused to follow the advice of his economic aides and turned away from Keynesian (KAYN-zee-uhn) economics. John Maynard Keynes (KAYNZ) (1883-1946) was a British economist who rejected classical economics and traditional theories of the free market. He claimed that there was a direct correlation between government spending and the welfare of the private sector economy. In addition, he advocated vast government spending--even deficit spending--in times of economic recession. Then when the economy had recovered, Keynes argued, federal spending should be cut back.
All Western economies today follow Keynesian economics, but in the 1930s, Roosevelt did not believe in deficit spending during economic downturns. Only World War II would prove the truth of Keynes's theories.
The New Deal was not a revolution; it did not bring about radical change. Nor did it ultimately end the Great Depression. It did, however, have an effect on American society and the relationship of government and business. For one, the New Deal redirected the eyes of the American public from Main Street and the state capitol buildings towards Washington, D.C. For the first time, the American public came to expect that the federal governmentwould be involved in its social welfare.
Another, more enduring legacy was the rise of the "corporate state." Prior to the New Deal, big business had a virtual monopoly on political power. Through the regulation of business activities, the New Deal created two new power players at the political table: big labor and big government. Business, government and labor were drawn more closely together by New Deal legislation and by U.S. involvement in World War II. Labor provided a steady workforce and the government promised predictability in the market, rather than dramatic highs and lows. Under these terms, business made some concessions to labor and government.
While all of these domestic changes were going on, the U.S. found itself unwillingly drawn into world affairs. Recall that FDR had defined himself as "Wilsonian," that is, an internationalist. The American public, however, was overwhelmingly isolationist, as demonstrated by popular movies, plays, and fiction of the 1930s that depicted the horrors of war. One example is Margaret Mitchell's Civil War-era novel "Gone with the Wind," which won the Pulitzer Prize in 1936; the film version was released in 1939.
The Senate Investigation of the Munitions Industries (a report produced by the Nye Committee) in 1934-1936 determined that U.S. involvement in WWI had been provoked by greedy industrialists and munitions manufacturers. The U.S. had, in effect, been "suckered" into joining the Allies by heeding accounts of the horrors Germany had inflicted on conquered people. This Senate report reinforced the popular idea that America should ignore European "propagandists" of the 1930s who were relating the atrocities of Hitler, Mussolini, and Hirohito.
Roosevelt's one significant foreign policy move prior to World War II was the recognition of the legitimacy of the Soviet Union. Until that point, the Soviet government had not been recognized as a legitimate state. Roosevelt appealed to American business interests by arguing, mistakingly, as it it turned out, that diplomatic relations with the Soviet government would open up that country to trade.
While hostilities were building in Europe and the Far East, the U.S. Congress passed three pieces of legislation-- known collectively as the Neutrality Acts--designed to keep America out of war. Congress was determined to avoid the mistakes which had drawn America into the First World War.
Although we will not be reviewing the war battle by battle in these notes, we have developed a short time line (click to view) of some of the events leading up to American involvement in World War II. As Americans were calling for isolationism and pacifism, aggressions were mounting all over the world.
Publicly, Roosevelt stated and restated his promise not to get the U.S. involved in the European war. He said in the 1940 presidential campaign:
"I hate war now more than ever. I have one supreme determination: to do all that I can to keep war away from these shores for all time."
On another occasion during that campaign, FDR said:
"I have said this before, but I shall say it again and again and again. Your boys are not going to be sent to any foreign war."
The major force of the isolationists was a group called "America First." Prominent businessmen, celebrities, and members of government such as pilot Charles Lindbergh and auto magnate Henry Ford spoke out against the war.
In private to his aides, Roosevelt admitted that U.S. involvement in the world war was inevitable. Already in 1938 and 1939, the United States began gearing up its industrial might and military power. Of course, war became a reality for the U.S. after the attack on Pearl Harbor in 1941. After the U.S. declared war on Japan, Germany, recognizing its alliance with Japan, declared war on the U.S. and isolationist America found itself fighting a war on two fronts. Participation in the war brought about profound changes for the United States and the American people in the 1940s. How profound? So profound, that we'll take them up in Lecture 21: "World War II: The Impact at Home."
Home || Course || Guide || Bios || Photos || Exams || Calendar || Comments/Sign-in