FDR & The Second New Deal
In its early years, the New Deal sponsored a remarkable series of legislative initiatives and achieved significant increases in production and prices — but it did not bring an end to the Depression. As the sense of immediate crisis eased, new demands emerged. Businessmen mourned the end of “laissez-faire” and chafed under the regulations of the NIRA.
Vocal attacks also mounted from the political left and right as dreamers, schemers, and politicians alike emerged with economic panaceas that drew wide audiences. Dr. Francis E. Townsend advocated generous old-age pensions. Father Charles Coughlin, the “radio priest,” called for inflationary policies and blamed international bankers in speeches increasingly peppered with anti-Semitic imagery. Most formidably, Senator Huey P. Long of Louisiana, an eloquent and ruthless spokesman for the displaced, advocated a radical redistribution of wealth. If he had not been assassinated in September 1935, Long very likely would have launched a presidential challenge to Franklin Roosevelt in 1936.
FDR was the most beloved of 20th-century American Presidents. He was also the most hated. Recall Madison Square Garden on October 31, 1936: "I should like to have it said of my first Administration that in it the forces of selfishness and lust for power met their match." Over the cascade of cheers, he went on: "I should like to have it said—," but the mounting roar of anticipation threatened to drown out his words; he paused and cried, "Wait a moment!"; then "I should like to have it said of my second Administration that in it these forces met their master."
In the face of these pressures, President Roosevelt backed a new set of economic and social measures. Prominent among them were measures to fight poverty, create more work for the unemployed, and provide a social safety net.
The Works Progress Administration (WPA - "we piddle around"), the principal relief agency of the so-called second New Deal, was the biggest public works agency yet. It pursued small-scale projects throughout the country, constructing buildings, roads, airports, and schools. Actors, painters, musicians, and writers were employed through the Federal Theater Project, the Federal Art Project, and the Federal Writers Project. The National Youth Administration gave part-time employment to students, established training programs, and provided aid to unemployed youth. The WPA only included about three million jobless at a time; when it was abandoned in 1943, it had helped a total of nine million people.
The New Deal’s cornerstone, according to Roosevelt, was the Social Security Act of 1935. Social Security created a system of state-administered welfare payments for the poor, unemployed, and disabled based on matching state and federal contributions. It also established a national system of retirement benefits drawing on a “trust fund” created by employer and employee contributions. Many other industrialized nations had already enacted such programs, but calls for such an initiative in the United States had gone unheeded. Social Security today is the largest domestic program administered by the U.S. government.
To these, Roosevelt added the National Labor Relations Act, the “Wealth Tax Act” that increased taxes on the wealthy, the Public Utility Holding Company Act to break up large electrical utility conglomerates, and a Banking Act that greatly expanded the power of the Federal Reserve Board over the large private banks. Also notable was the establishment of the Rural Electrification Administration, which extended electricity into farming areas throughout the country.
In the 1936 election, Roosevelt won a decisive victory over his Republican opponent, Alf Landon of Kansas. He was personally popular, and the economy seemed near recovery. He took 60 percent of the vote and carried all but two states. A broad new coalition aligned with the Democratic Party emerged, consisting of labor, most farmers, most urban ethnic groups, African Americans, and the traditionally Democratic South. The Republican Party received the support of business as well as middle-class members of small towns and suburbs. This political alliance, with some variation and shifting, remained intact for several decades.
Roosevelt’s second term was a time of consolidation. The president made two serious political missteps: an ill-advised, unsuccessful attempt to enlarge the Supreme Court and a failed effort to “purge” increasingly recalcitrant Southern conservatives from the Democratic Party. When he cut high government spending, moreover, the economy collapsed. These events led to the rise of a conservative coalition in Congress that was unreceptive to new initiatives.
From 1932 to 1938 there was widespread public debate on the meaning of New Deal policies to the nation’s political and economic life. Americans clearly wanted the government to take greater responsibility for the welfare of ordinary people, however uneasy they might be about big government in general. The New Deal established the foundations of the modern welfare state in the United States. Roosevelt, perhaps the most imposing of the 20thcentury presidents, had established a new standard of mass leadership.
No American leader, then or since, used the radio so effectively. In a radio address in 1938, Roosevelt declared: “Democracy has disappeared in several other great nations, not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion and government weakness through lack of leadership.” Americans, he concluded, wanted to defend their liberties at any cost and understood that “the first line of the defense lies in the protection of economic security.”
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