FDR and the New Deal

Background

Following the Great War, as the only major western nation not devastated by that conflict, Americans felt pretty good about themselves. The continued economic growth, political conservatism and general absence of concerns over foreign affairs led Americans to think of themselves as “having it made.” Proof of America's spirit and achievements seemed to be personified by Charles Lindberg's historic flight from New York to Paris in 1927. But the 1920s also saw deep divisions in the country despite the “roaring” atmosphere brought about by bathtub gin, speakeasies, flappers, women voting, jazz, sports and all the rest. Then at the end of that self-satisfied, raucous and somewhat grumpy decade, when the expectations of many Americans knew no bounds, the stock market crashed and the Great Depression hit.

The depth of the Great Depression is difficult for us to fathom in these times of prosperity in the early 21st century. Recent recessions, upheavals in various sectors of the economy, layoffs, bankruptcies and other casualties, as trying as they may be for those who suffer them, cannot compare with the massive losses of the 1930s, not just in terms of wealth, but in terms of human dignity, hope, promise and a sense that “this too shall pass.” It did not pass for a long time, and for some there seemed no way out but suicide. So frequent were the suicides that newspapers actually ran cartoons or comments on the phenomenon, perhaps in an attempt to cheer people up. It did not work—the depression went on, and on, and on. Many Americans never got over the shock.

More on the Great Depression

Into that troubled world came Franklin Delano Roosevelt—to this day one of the most controversial Presidents in our history and yet by almost any definition one of our greatest. Like his predecessors in office—his cousin Theodore, and Woodrow Wilson, whom he served as Assistant Secretary of the Navy for eight years—FDR saw government as an instrument for helping people. In 1914-1918 government organized the economy to meet the emergency of World War I; in 1933 Franklin Roosevelt came to Washington determined to use government to organize the economy again—this time against the enemies caused by the Great Depression: unemployment, poverty and hopelessness. His goal of easing suffering is for most unquestioned; his methods remain the source of controversy. Whatever one decides, it is clear that the legacy of the New Deal is still with us in a powerful way.

The Rise of Franklin Delano Roosevelt

The Election of 1932: The dispirited Republicans renominated Hoover, but it was hopeless. FDR had used the governorship of New York to experiment with anti-depression programs, but regardless of his record, he was almost sure to win. FDR got 22,809,000 votes and 472 electoral votes to Hoover’s 15,758,000 million popular and 59 electoral votes. President Hoover was humiliated and the landslide of 1928 was reversed.

The New Deal Spirit

Most Americans know the phrase from FDR’s first inaugural address, “The only thing we have to fear is fear itself.”  But in addition to those encouraging words, his address contained much more, much of it couched in words that evoked military action:

I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require.  These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.

But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me.  I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.

That last sentence earned the loudest applause from the inauguration crowd.  Serving under President Woodrow Wilson during the Great War, Roosevelt had watched President Wilson organize the economy to meet the emergency of World War I; in 1933 Franklin Roosevelt came to Washington determined to use government to organize the economy again—this time against the enemies caused by the Great Depression:  unemployment, poverty, and hopelessness.  His goal of easing suffering is for most unquestioned; his methods remain the source of controversy.  Whatever one decides, it is clear that the legacy of the New Deal is still with us in a powerful way.

When Franklin Roosevelt moved into the White House, he brought with him a remarkable attitude. Those who knew Roosevelt well found him unfailingly pleasant, optimistic, and good-natured. As the New Deal progressed, Roosevelt's manner disconcerted some, for in any conversation he always gave the listener the sense that he agreed with or was it least sympathetic to everything his interlocutor had to say. Thus a number of visitors learned the hard way that while Franklin Roosevelt seemed agreeable to their proposals, that did not mean he was necessarily going to follow up on their suggestions.

Those who knew Roosevelt well found him unfailingly pleasant, optimistic, and good-natured.  What came out of Franklin Roosevelt’s White House via his fireside chats, his regular meetings with the press (Roosevelt held more press conferences than any president before or since), and reports of those who dealt with him on a regular basis was a sense that something good was happening.  Roosevelt always began his fireside chats with the greeting, “My friends,” and many people had a sense that he was their friend.

As the New Deal progressed, however, Roosevelt’s manner disconcerted some, for in any conversation he always gave the listener the sense that he agreed with or was it least sympathetic to everything his interlocutor had to say.  Thus a number of visitors learned the hard way that although Franklin Roosevelt seemed agreeable to their proposals, that did not mean he was necessarily going to follow up on their suggestions.  Yet even as his political enemies found much to criticize—and Roosevelt developed many political opponents on both the right and left—millions of Americans felt that at long last the government was finally hearing their cries for assistance.  The huge outpouring of major legislation in the first hundred days of his administration was unprecedented; but Roosevelt himself knew that whatever talents he might possess, he was no miracle worker:  the problems were too vast and deep.  But he gave people hope.

Even as his political enemies found much to criticize—and Roosevelt developed many political opponents on both the right and left—millions of Americans felt that at long last the government was finally hearing their cries for assistance. The huge outpouring of major legislation in the first hundred days of his administration was unprecedented; but Roosevelt himself knew that whatever talents he might possess, he was no miracle worker: the problems were too vast and deep. But he gave people hope.

Those who believed that Franklin Roosevelt was doing more harm than good seemed to bear a particular animus toward him because, as his old headmaster from the Groton School, Endicott Peabody, put it, Roosevelt had betrayed his class. A cartoon in The New Yorker magazine early in the New Deal years showed a group of obviously prosperous, upper-class people emerging from a posh restaurant. Out for an evening of entertainment, one of them offered the suggestion, "Let's all go down to the movie theater and hiss Roosevelt.” In those pre-television days, people got their visual news in movie theaters from newsreels, and Roosevelt quickly came to dominate them.

In the family of this writer lived a genteel old lady whose father had been named for Henry Clay, the famous Whig. My grandmother rarely uttered a bad word, but she was quickly provoked by that patrician Hudson Valley voice. “Damned jackass!” she would mutter over and over whenever FDR was on the radio. As his landslide victory in 1936 showed, however, millions of Americans approved of what he was trying to do.

The Hundred Days

The first one hundred days of Franklin Roosevelt’s administration constitute one of the most remarkable explosions of legislation in the history of the Congress.  The long lame-duck session meant that Roosevelt was not inaugurated until March 4 (the last time that occurred, as the 20th Amendment soon moved inauguration day up to January 20).  Between Roosevelt’s election and inauguration thousands of banks closed their doors; many people had withdrawn their money and stuffed it under their mattresses for safe keeping, which only made matters worse.

President Roosevelt immediately called a special session of Congress to deal with the banking crisis.  On March 9 he sent an Emergency Banking Act to Congress, where it was passed and then signed by the president that day.  The act gave the president broad discretionary power to regulate financial transactions, and he immediately called a national bank holiday.  The Treasury Department granted licenses for banks to reopen, and the act also prohibited the awarding of gold, and so on.  Then Roosevelt went on the air with his first fireside chat, explaining his actions to the people “in terms even a banker could understand.”  His precipitous action checked the money panic.
On March 20 the president signed the Economy Act, which sought to balance the budget by reducing government salaries 15 percent.  It also cut private pensions and reorganized government agencies for greater economy; in the end it saved about $243 million.
The Democrats had promised an end of Prohibition, and with passage of the 21st amendment, Congress passed the Beer and Wine Revenue Act of March 22, which taxed alcoholic beverages to raise federal revenue.

On March 31 Congress passed the Civilian Conservation Corps Reforestation Act, which established the Civilian Conservation Corps and provided 250,000 jobs for males ages 18–25.  Wages were $30 per month, part of which was to go to dependents.  (A family could eat on a dollar a day in those hard times.)  Under the act, work camps were built and run by different federal departments to work on conservation projects such as planting trees to combat soil erosion; to improve national forests; and to create fish, game, and bird sanctuaries.  By 1941 two million young men had served in the CCC, and many of their works are still standing in America’s forests.

Silver certificateWithin less than a month of FDR’s inauguration four major bills had been passed, and more was to come. On April 19 the United States officially abandoned the gold standard, which some have called the “most revolutionary act of the New Deal.”  This meant that paper money would no longer be redeemable in gold.  The value of the dollar soon declined abroad, which stopped the drain of American gold to Europe.  The government fixed the value of gold at $35 per ounce, and it became illegal for citizens to own gold, except in jewelry and other artifacts.  At the same time the government purchased large quantities of silver, and silver certificates continued to be redeemable in silver, generally coins.  (The “Washington Quarter” was mostly silver in content until 1964.)

Additional measures of the Hundred Days included:

The May 12 Federal Emergency Relief Act created the Federal Emergency Relief Administration, funded at $500 million, one half of which was to go to the states for direct relief.  The remainder was to match state funds for unemployment relief at a rate of $1 for 3.  Harry Hopkins was appointed relief administrator.

Under the leadership of Agriculture Secretary Henry Wallace, Congress pulled out all the stops to help farmers, passing the Agricultural Adjustment Act, the Emergency Farm Mortgage Act, and the Farm Credit Act.  The acts provided for the elimination of surplus crops, establishment of parity prices, and the reduction of crop production by paying farmers to allow land to lie fallow.  In the process, animals were slaughtered and crops plowed under, which Secretary Wallace himself called a “shocking commentary on our civilization.”

FDR signs TVA BillOn May 18 the Tennessee Valley Authority was created as an “experiment” in social planning.  The TVA was given authority to build dams and power plants and to  develop the entire region economically by selling power, and so on.  The TVA, a pet project of FDR’s, which he visited several times, became a yardstick for evaluating the operation of power companies, establishing fair rates, and so on.  Nine dams were built and existing dams were acquired by the TVA.  During World War II power from TVA dams was used to produce munitions and support operations at Oak Ridge, which were part of the Manhattan (atomic bomb) Project.

FDR signs the TVA Act.

On June 16 the Banking Act Of 1933 (the Glass-Steagall Act) created the Federal Deposit Insurance Corporation (FDIC), which protected all bank deposits up to $5,000 and widened the power of the Federal Reserve Board over member banks.  The act separated commercial and investment banking, and forced banks to get out of the investment business, restricting the use of bank deposits for speculative ventures.  Today the FDIC insures all bank deposits up to $100,000.

The National Industrial Recovery Act of June 16 created the National Recovery Administration (NRA), probably the most controversial of the New Deal measures.  The act established fair trade codes and provided for industrial self-regulation with government supervision.  The act included restrictions of plant operations, the establishment of a minimum wage, prohibition against child labor, and limited the work week to forty hours.  The NRA symbol was the Blue Eagle—which businesses could display after "Signing the pledge.”  The NRA also created the Public Works Administration (PWA), budgeted with $3.3 billion to be spent on public works construction to provide employment, raise purchasing power, promote welfare, and contribute to the revival of American industry.

Additional acts included new laws to control information on new securities being offered to the public; to make paper legal tender; to establish a federal employment service to help people find jobs; to make loans for people to pay taxes, make repairs on homes, and refinance mortgages;  to improve efficiency of railroads by reorganization and creating a federal coordinator of transportation.

That huge outpouring of legislation brought the hundred days to an end, but the New Deal continued to expand government activity throughout 1933 and into 1934 and ’35.  Although the New Deal measures were considered radical by many at the time, the social and economic reforms introduced by Roosevelt had been common in Europe for some time.  In addition, beginning with the Interstate Commerce Act of 1887, the government has increasingly adopted policies that tended to abandon the idea of “laissez-faire” capitalism.  Progressives led by Theodore Roosevelt and Woodrow Wilson had continued the process.

The most remarkable aspect of the New Deal, especially in its early days, was the speed with which it was put into practice.  The model legislation produced in the first hundred days of Franklin Roosevelt’s first term was comparable to the entire amount of major business legislation passed during the Gilded Age.  Just as remarkable, the New Deal suddenly brought millions of average Americans an awareness of government that they had never had before.  Government now became a part of people’s daily lives.

Many of Roosevelt’s critics have charged him with creating a welfare state, but Roosevelt continually supported programs designed to put people back to work.  The Civil Works Administration, created in November 1933, provided jobs as diverse as ditch digging and highway repairs and teaching.

The troubles of the American farmer were exacerbated by the great drought that began in 1931, creating what was known as the “dust bowl.”  Severe storms blew clouds of dust raised from plowed fields and dried out prairies across the southern Great Plains.  The storms destroyed crops and equipment, and people and animals suffered.  Close to a million people, sometimes called “Okies,” left Oklahoma and other areas of the Midwest during the 1930s and 1940s and headed for California.  (Their trials are chronicled in John Steinbeck’s classic work, Grapes of Wrath.)  When the AAA was declared unconstitutional, four additional programs were instituted, and by 1940 millions of farmers were receiving subsidies under federal programs.

Still the Depression lingered on, and the social dislocations resulting from extended periods of unemployment that kept thousands in abject poverty took a grave toll on substantial portions of the population, especially in areas such as Appalachia and in manufacturing regions where heavy industries had been brought almost to a standstill.  Marriages were delayed, birthrates plummeted, and a federal bureau determined that approximately 20 percent of all American children were underfed.  Armies of men, women, and even children rode the rails in search of employment or any opportunity to improve their poverty-stricken lives.

The Hundred Days: Summary

End of the 100 Days:  The New Deal Continues, 1933

October 18 COMMODITY CREDIT CORPORATION. More relief for farmers; support for farm prices.

November 8 CIVIL WORKS ADMINISTRATION. Outgrowth of FERA. Provides emergency unemployment relief. Creates 4 million federal, state, local make-work projects.

1934

1935: The Second New Deal

A New Deal for the Indians

In 1924 all American Indians had been granted citizenship as American citizens. For over a century the development of Indian and white relations had centered around one basic dilemma: Should the Indians be “Americanized” and separated from their cultural surroundings to become everyday American citizens? Or would the Indians be allowed to remain on reservations or in other protected areas so that they could continue to live according to their cultural traditions? The answer, of course, is that for much of American history Indians have followed both paths.  Some have become assimilated, and some have resisted assimilation. The topic remains controversial within Indian cultures, and it must be kept in mind that even today, the existing Indian cultures are quite diverse.

An example of a cultural issue that reflects Indian diversity is the ongoing debate over Indian "mascot" names. Many tribes object to the use of Indian names or symbols by athletic teams. On the other hand, the Seminole Tribe in Florida has no objection to the use of their name by Florida State University. As is true with most cultural issues, there are various sides to the story.

Many people assumed that the granting of citizenship to Indians would complete the process of assimilation.  But many Indians continued to live on reservations and were more dependent than ever upon the government for much of their welfare.  Forced assimilation had proved destructive to Indian cultures and did not provide a suitable economic basis upon which Indians could live their lives.

Franklin Roosevelt appointed Indian reformer John Collier as Commissioner of the Bureau of Indian affairs.  Roosevelt's Secretary of the Interior Harold Ickes said, “Collier was the best equipped man who ever occupied the office,” as Collier had worked as an Indian reformer for some time and was familiar with many of the problems of Native American culture.  Collier hoped to be able to preserve Indian culture and heritage and resolve the complicated issues of Indian lands and Indian government. 

The focal point of Collier's program was the Indian Reorganization Act of 1934 (IRA). The purpose of the act as stated in its preamble was “to conserve and develop Indian lands and resources; to extend to Indians the right to form business and other organizations; to establish a credit system for Indians; to grant certain rights of home rule to Indians; to provide for vocational education for Indians; and … other purposes.” Collier's chief aim was to return Indian lands to tribal control, while at the same time continuing to allow individual use of the lands and to maintain inheritance rights.

Along with the IRA, Collier used various other New Deal programs to assist the Indians, including the Public Works Administration and the Civil Works Administration. He established an Indian Civilian Conservation Corps, and oversaw the construction of schools and hospitals as well as various training programs.  Collier continued to work for the acquisition of new land for Indians and to establishment self-government for those tribes who lived on reservations. He continued his services throughout World War II, finally resigning in 1945. Accepting Collier’s resignation with regret, FDR praised his services and commended him for having reoriented government policies toward the Indians.

Most observers feel that John Collier's motives were of the highest and that he sincerely wanted to help the Native American populations.  But more recently a number of historians have criticized the Indian Reorganization Act and Collier's administration of it on various grounds. Today there are over 570 federally recognized American Indian tribes in the United States. Those tribes have a formal relationship with the U.S. government, referred to as a government-to-government relationship, based on the fact that the organized Indian tribes living on reservations now possess a sovereignty that is higher than that of the states. In addition to relationships with the federal government, many tribes have special relationships with the states in which they are located. 

Generally, the governing authority on Indian reservations is the tribal government. That means, for example, that if one is on the Navajo reservation in Arizona, one is subject to Navajo law.  Indian governments on reservation areas include the full spectrum of generally recognized government agencies, from presidents or chief executives to legislative bodies, courts, administrative and police agencies.

Read the sources and decide what you think about FDR.

Documents on the Great Depression and the New Deal

The following points are relevant:

FDR had no coherent blueprint for what he wanted to do. He was willing to experiment, to bend his own Constitutional authority, to wheedle and cajole Congress, to send apparently conflicting messages. Assaulted from both left and right, he was probably more conservative and more radically liberal than his opponents on either side would have admitted.

The New Deal did not end the Depression. FDR’s programs improved life for millions and gave hope to may others, but it did not end or repair the underlying causes of economic problems. The massive government spending during World War II was what finally revived the economy.

During FDR’s Administration American voting patterns shifted dramatically. African Americans began to feel the hand of government lifting them up rather than pushing them down, and they shifted from voting about 80% Republican to 80% Democratic.

The Democratic Party become the majority Party and dominated the White House, Congress or both down to the present. For only a handful of years since 1933 have Republicans controlled the White House and Congress at the same time.

History 122 Part 3