Relief, Recovery, Reform. Chicago Tribune: great-depression-photogallery,0,5754970.photogallery

Relief, Recovery, Reform

Chicago Tribune: http://www.chicagotribune.com/business/081024- great-depression-photogallery,0,5754970.photogallery http://www.chicagotribune.com/business/081024- great-depression-photogallery,0,5754970.photogallery The History Place (pictures of life during the Depression): http://www.historyplace.com/unitedstates/lange/index.html http://www.historyplace.com/unitedstates/lange/index.html Photos of the Great Depression and New Deal: http://docs.fdrlibrary.marist.edu/gdphotos.html http://docs.fdrlibrary.marist.edu/gdphotos.html Hoovervilles: http://www.loc.gov/teachers/classroommaterials/presentationsandactivities/p resentations/timeline/depwwii/depress/hoovers.html http://www.loc.gov/teachers/classroommaterials/presentationsandactivities/p resentations/timeline/depwwii/depress/hoovers.html

Grand Coulee Dam - http://www.pbs.org/wgbh/americanexperience/films/coulee/player/ http://www.pbs.org/wgbh/americanexperience/films/coulee/player/ FDR’s response to the Great Depression is to deal with the Banking crisis, and in the first Hundred Days he reshapes the role of government to provide aid to the impoverished and creates federal projects that not only provide jobs, but reshapes the American Landscape 1 st New Deal (1933 – 1934) – economic recovery 2 nd New Deal (1935 – 1941) – economic security FDR redefines: Liberalism – active government to uplift less fortunate members of society Freedom – economic security (common good over individual good) Economic Policy – the Great Depression and the economic crisis that ensued discredited supporters of unregulated capitalism

FDR Franklin D. Roosevelt (FDR)— Biography raised in privilege on a New York country estate, came to symbolically represent the ordinary American citizen. Like Lincoln, FDR’s greatness was his capacity to reject traditional ideas while confronting national crisis. Born in 1882, a fifth cousin of Theodore Roosevelt. Graduated from Harvard, Served in the New York state legislature and undersecretary of the Navy in WW I After he ran for vice-president on the Democratic ticket in 1920, he contracted polio and lost the use of his legs—a fact concealed from the public in the pre-television era. Very few Americans realized that this powerful president was confined to a wheelchair. VIDEO: FDR Biography (4:57) https://www.youtube.com/watch?v=qK42SUseTwMhttps://www.youtube.com/watch?v=qK42SUseTwM

Election of 1932 In his speech accepting the Democratic nomination for president in 1932, Roosevelt promised a “new deal” for the American people; his campaign offered few specific proposals. Roosevelt discussed government’s responsibility to ensure that every man had “a right to make a comfortable living,” but he also wanted a balanced federal budget and criticized Hoover for excessive federal spending. The biggest difference between Hoover and FDR’s campaigns was the Democrats’ call to repeal Prohibition. Americans desperately wanted new leadership. Roosevelt won an overwhelming 57 percent of the popular vote, and Democrats gained a majority in both houses of Congress. Democratic Party Coalition – Farmers, white supremacist South, industrial Workers, Northern African Americans Elections - http://www.presidency.ucsb.edu/showelection.php?year=1932 http://www.presidency.ucsb.edu/showelection.php?year=1932 AUDIO: 1933 FDR 1 st Inaugural Address : http://www.wyzant.com/resources/lessons/history/hpol/fdr http://www.wyzant.com/resources/lessons/history/hpol/fdr (Listen to 1:25 – 6:05)

Population by Year: http://www.multpl.com/united-states-population/tablehttp://www.multpl.com/united-states-population/table Map 21.2 The Presidential Election of 1932

A celebrated cover of The New Yorker depicts a morose Herbert Hoover

The Coming of the New Deal The Depression provoked different responses across the globe. For most of the 1930s, conservative governments ruled in Britain and France, and they did little to resolve the crisis. In Germany, Adolf Hitler of the Nazi Party established one of the most brutal dictatorships in human history, banning all political opposition and terrorizing Jews. In the Soviet Union, the tyrannical Joseph Stalin launched five-year plans that industrialized that nation and allegedly eliminated unemployment, at great social cost. Japan’s militarist government invaded China in 1937 and aspired to dominate all Asia. Roosevelt envisioned the New Deal as an alternative to socialism, fascism, and unregulated capitalism. He wanted to reconcile democracy, individual liberty, and economic planning. But he did not begin his first term as president with a full-fledged plan. He initially depended on a group of intellectuals and social workers who took key positions in his administration. They included secretary of labor Frances Perkins, a veteran of Hull House and the New York Consumers’ League; Harry Hopkins, who directed emergency relief during Roosevelt’s term as New York’s governor; secretary of the interior Harold Ickes, a veteran of Theodore Roosevelt’s Progressive campaign of 1912; and Louis Brandeis, who had advised Woodrow Wilson in 1912 and now advised FDR while serving on the Supreme Court. Although these individuals represented the influence of Progressivism on Roosevelt and the New Deal, they had no unified position. Brandeis, for one, thought large corporations not only were too powerful but also had contributed to the Depression by keeping prices artificially high and limiting workers’ purchasing power. He argued they should be broken up, not regulated. Yet the “brains trust,” a group of academics that included a number of Columbia University professors, thought bigness was inevitable in a modern economy. They believed the competitive marketplace had disappeared and that large firms should be managed and directed by the government, not broken up. Their view most decisively shaped what came to be known as the First New Deal.

The Banking Crisis FDR realized that Americans needed leadership and action immediately, and when he took office on March 4, 1933, he acted quickly. He started a campaign of reassuring Americans and restoring their confidence. At his inauguration, he declared that “the only thing we have to fear is fear itself.” Video – FDR 1 st Inaugural Address: (2:39) https://www.youtube.com/watch?v=Z_Ovo1arA-o https://www.youtube.com/watch?v=Z_Ovo1arA-o Step 1: Confront a banking system about to collapse

The Banking Crisis Step 1: Confront a banking system about to collapse. Bank Failures: Banks that had invested funds in the stock market were failing, and by March 1933, banking was suspended in most states. Roosevelt declared a “bank holiday,” temporarily halting all bank operations, and called a special session of Congress, which, on March 9, passed the Emergency Banking Act to provide funds to endangered banks. Background – Bank Failures http://www.federalreservehistory.org/Events/DetailView/20 http://www.federalreservehistory.org/Events/DetailView/20 Video – impact of depression and bank failures on people http://www.livinghistoryfarm.org/farminginthe30s/money_08.html http://www.livinghistoryfarm.org/farminginthe30s/money_08.html

The Banking Crisis Additional measures transformed the American financial system. Glass-Steagall Act - barred commercial banks from buying and selling stocks, and until its repeal in the 1990s helped prevent many irresponsible practices that led to the stock market crash; the law established the Federal Deposit Insurance Corporation (FDIC), which ensured the accounts of individual depositors. Roosevelt also took the United States off the gold standard, thus breaking the link between the nation’s currency and the gold reserves, making it possible to issue more money and stimulate more business activity. These efforts together saved the financial system and greatly increased the government’s power over it. While 5,000 banks had failed between 1929 and 1933 (a full third of the total banks in the United States), not one bank failed in 1936.

Banking Crisis & Audio of 1st Fireside Chat on 3/9/1933 http://xroads.virginia.edu/~ma02/volpe/newdeal/ban king.html http://xroads.virginia.edu/~ma02/volpe/newdeal/ban king.html Banking Crisis Audio on C-span: http://www.c- span.org/video/?c4456392/fdr-fireside-chat-bank- holidayhttp://www.c- span.org/video/?c4456392/fdr-fireside-chat-bank- holiday Banking Holiday Background: http://www.ushistory.org/us/49a.asp http://www.ushistory.org/us/49a.asp

A “run” on a bank: crowds of people wait outside a New York City bank

The NRA The banking acts were the first of a series of laws in the first three months of FDR’s administration, a period known as the “Hundred Days.” Roosevelt used the crisis and his electoral mandate to pressure Congress into passing laws to stimulate the economy. Congress established a plethora of “alphabet” agencies, such as the National Recovery Administration (NRA), Agricultural Adjustment Administration (AAA), and the Civilian Conservation Corps (CCC), to direct the recovery. Never had an American president exercised such power or so quickly expanded the role of the federal government in Americans’ lives. The key to Roosevelt’s plan for recovery was the National Industrial Recovery Act (NIRA), largely based on the government- business partnership created by the War Industries Board in World War I. The law established a National Recovery Administration (NRA) to set industry codes with groups of business leaders that would be guidelines for output, prices, and working conditions. This, it was hoped, would end the cutthroat competition that drove companies out of business, in part by exempting these industry-wide agreements from antitrust laws. FDR thus effectively repudiated an older idea of liberty based on the belief that the best way to encourage economic activity and ensure a fair distribution of wealth was to allow market competition to unfold free from government interference. To win support from labor, section 7a of the NIRA recognized workers’ right to organize unions, a sharp departure of the open-shop policies of the 1920s and a move toward “industrial freedom.” The NRA soon adopted codes that set standards for production, prices, and wages in the textile, steel, mining, and auto industries. The agency launched a publicity campaign to promote itself and its symbol, the Blue Eagle, was displayed in stores and factories affected by the codes. But the NRA became controversial when it was shown to have allowed large companies to dominate the code-writing process. Large corporations and companies raised prices, limited production, laid off workers, and divided markets among themselves at the expense of smaller competitors. Many anti-union companies ignored section 7a. The agency lacked the personnel to enforce the 750 codes throughout the nation by 1935. The NRA did not create recovery or cooperation between capital and labor. Government Jobs The Hundred Days also saw government relief to the needy. Roosevelt and most of his advisors believed direct government payments to the unemployed would erode individual self-reliance, and the Economy Act reduced federal spending in the hopes of winning business support. But with nearly 25 percent unemployment, relief spending was inevitable. In May 1933, Congress established the Federal Emergency Relief Administration to make grants to local relief agencies. But FDR preferred to create temporary jobs that would decrease unemployment while improving the nation’s infrastructure of roads, bridges, public buildings, and parks. In March 1933, Congress established the Civilian Conservation Corps (CCC), which set unemployed young men to work on projects like forest preservation and the improvement of national parks and wildlife preserves. By its end in 1942, the CCC had employed more than 3 million people.

Public Works Projects The NIRA also created the Public Works Administration (PWA) and funded it with $3.3 billion. Directed by secretary of the interior Harold Ickes, the PWA built roads, schools, hospitals, and other public facilities. In November 1933, the Civil Works Administration (CWA) was launched, and in a few months it employed more than 4 million people in constructing highways, tunnels, courthouses, and airports. But costs soon skyrocketed and criticisms mounted that the New Deal was creating a class of Americans permanently dependent on government jobs. In response, FDR dismantled the CWA. Other public-works projects involved government planned economic transformation, such as the Tennessee Valley Authority (TVA), which built dams to prevent floods along the Tennessee River Valley and provide cheap electricity in a region with many isolated and rustic households. The TVA for the first time had the federal government producing electricity in competition with private companies and served as a model for regional planning that would economically develop the West. The New Deal and Agriculture The Hundred Days also included efforts to improve conditions for farmers. The Agricultural Adjustment Administration (AAA) let the government try to raise farm prices by establishing production quotas for major crops and paying farmers not to plant more. Many crops were destroyed, and most controversially, 6 million pigs were slaughtered. The AAA successfully raised farm prices and incomes. But large farmers benefitted the most, and few small farmers, tenant farmers, and agricultural laborers received assistance. AAA policies actually encouraged the eviction of tenants, many of whom took to the roads and migrated to the West Coast. The beginning, in 1930, of unusually dry weather in the Midwest also worsened the Depression’s effect on rural America. By the mid-1930s, the most severe drought in the nation’s history caused soil that had deteriorated from modern farming methods to simply blow away in the wind, creating the Dust Bowl, as areas in Oklahoma, Texas, Kansas, and Colorado were called. The drought and storms displaced more than 1 million farmers, whose massive trek to the Pacific Coast was captured in John Steinbeck’s novel, The Grapes of Wrath.

The New Deal and Housing By the late 1920s, home ownership had become a sign of respectability among the middle class and offered security to workers who faced low wages, irregular employment, and limited occupational mobility. The Depression destroyed the American housing industry. The building of new homes virtually halted, and banks and savings and loans associations that financed home ownership collapsed or survived by foreclosing on mortgages. President Hoover established a federally sponsored bank to issue home loans, but only with the New Deal did the federal government systematically intervene in the housing market. Roosevelt stated that “the security of the home” was a fundamental right. In 1933 and 1934, and his administration undertook efforts to protect home owners from foreclosure and stimulate new construction. The Home Owners Loan Corporation and Federal Housing Administration (FHA) insured millions of long-term mortgages issued by private banks. The government also built thousands of units of low-rent housing. Thanks to the FHA and later the Veterans Administration, home ownership became a reality for tens of millions of families. In FDR’s first two years, the Twenty-first Amendment, repealing Prohibition, was ratified, the Federal Communications Commission was established to supervise radio and telephone communications, and the Securities and Exchange Commission was created to regulate stock and bond markets. The First New Deal was a series of experiments, some of which failed, that transformed the role of the federal government and assisted millions of Americans in the mist of the Depression. But it did not end the Depression. In 1934, 10 million Americans, more than 20 percent of the labor force, was still out of work. The Court and the New Deal In 1935, the Supreme Court, still dominated by conservative Republican judges who believed in nineteenth-century notions of freedom such as liberty of contract, began to strike down New Deal laws. The NRA was declared unconstitutional because its codes and regulations delegated legislative powers to the president and attempted to regulate local businesses not engaged in interstate commerce. In January 1936, the Court killed the AAA, which it declared an unconstitutional use of congressional power over local economic activity. In June 1936, the Court ruled that New York could not set a minimum wage for women and children.

Labor’s Great Upheaval Perhaps the most dramatic development of the mid-1930s was the organization of millions of workers into unions in the mass- production industries that had successfully resisted unionization. Called “labor’s great upheaval,” this unprecedented militancy was unexpected. This time the federal government seemed to side with workers, through the NIRA and the Wagner Act of 1935, which gave workers the legal right to form unions. With the drastic reduction in European immigration, cultural differences between workers were less important. American-born children of the new immigrants now dominated the workforce. Militant socialists and communists with years of experience in organizing provided leadership to this movement. The Rise of the Congress of Industrial Organizations (CIO) American factories were small tyrannies in which unions were rare, workers could be assaulted by supervisors and fired at will, and managers determined the length of the workday and the speed of assembly lines. Local governments supported employers. Workers demanded more than just higher wages in the 1930s. They wanted an end to employers’ arbitrary rule and basic civil liberties for workers, such as the right to picket, hand out literature, and meet to discuss grievances. All of these required union recognition. Roosevelt’s election inspired those who hoped to end “industrial despotism.” In 1934, labor revolted. 2,000 strikes broke out, including violent, massive strikes in Toledo, Minneapolis, and San Francisco. Only a huge nationwide strike of textile workers failed to achieve any of its goals. This upheaval challenged the AFL’s old model of organizing workers by craft skill rather than organizing all workers in a particular industry, such as steel, into one union. When the AFL convention in 1935 refused an appeal by thirty AFL leaders for the creation of industrial unions, John L. Lewis, head of the United Mine Workers, forced a split which led to the creation of the Congress of Industrial Organizations (CIO). The CIO, Lewis said, would win “economic freedom and industrial democracy” for American workers. In December 1936, the United Auto Workers, a small CIO union, conducted a sit-down strike, occupying a General Motors plant in Cleveland. Soon such strikes spread to GM factories in Flint, Michigan. Strikers defended the plants from police attacks, and Michigan’s governor refused to send troops to break the strike. In February, 1937, GM capitulated and recognized the UAW. Ford did not recognize the UAW until 1941, but by then the UAW had hundreds of thousands of members. The triumph in auto spread to the steel industry, which recognized unions by 1938. By 1940, around 9 million workers were in unions, double the number from 1930. Unions won rights to influence management decisions and gained new grievance and seniority procedures.

Labor and Politics Unlike the AFL, the CIO embraced positive government intervention in labor-management affairs. It presented a program for federal economic and social policy, including public housing, universal health care, and unemployment and old age insurance. The CIO built on the increasingly popular idea that prosperity would rise from an American standard of living for all Americans based on mass consumption, and argued that the Depression was caused by the highly unequal distribution of wealth and income. By mid-decade, many New Dealers accepted this “underconsumptionist” explanation of the Depression, which saw lack of effective consumer demand as its cause. Voices of Protest Other popular movements of the mid-1930s emphasized economic justice. In California, novelist Upton Sinclair won the Democratic nomination for governor in 1934 as head of the End Poverty in California movement, calling for the state to form industrial and farm cooperatives to create jobs. One of the nation’s first modern “negative” campaigns cost him the election. Huey Long of Louisiana, representing the state’s Populist and Socialist traditions and its undemocratic politics, rose to power as governor in 1928 and U.S. senator in 1930. He used his power to build roads, schools, and hospitals, and heavily taxed oil companies. Called the “Kingfish,” Long in 1934 launched the “Share Our Wealth” movement, which called for confiscating the wealth of the richest Americans in order to finance an immediate grant of $5,000 and a guaranteed job and annual income for all citizens. Long claimed to have 5 million followers. He was about to declare a run for president in 1935 when he was assassinated. The “radio priest,” Father Charles E. Coughlin, drew millions of listeners in weekly broadcasts that criticized bankers and capitalists and called for government ownership of key industries as a means for fighting the Depression. Coughlin turned from initial support for FDR to criticisms for his failures, and later embraced anti-Semitism and sympathy for European fascism. Dr. Francis Townsend, a California physician, won support for his plan for the government to make monthly payments of $200 to older Americans, with the requirement that they spend it immediately to boost the economy. By 1934, 2 million had joined Townsend Clubs.

The Works Progress Administration (WPA) and the Wagner Act These popular movements and the CIO helped create the Second New Deal, launched by Roosevelt in 1935 after Democratic gains in Congress in 1934 and his failure to lift the Depression. The First New Deal focused on economic recovery; the Second was centered on economic security—the guarantee that government would protect Americans from unemployment and poverty. The belief that a lack of consumer demand caused the Depression had become popularized by Long, Townsend, and the CIO. By 1935, many New Dealers believed government should no longer try to stimulate business recovery but should redistribute income in order to sustain mass purchasing power in the consumer economy. Congress imposed a tax on large fortunes and corporate profits, and created the Rural Electrification Agency (REA) to bring electricity to homes, thus enabling rural Americans to purchase household appliances. The REA brought electricity to millions of homes and was one of the most successful New Deal programs. The federal government also tried to promote soil conservation and family farming, as policymakers believed that prosperity was impossible when farmers’ standard of living lagged behind that of urban workers and the middle class. In 1934, FDR had limited federal employment programs. But now he established a Works Progress Administration (WPA), which hired 3 million Americans each year until it ended in 1943. Directed by Harry Hopkins, the WPA transformed the American landscape. It built thousands of public buildings, bridges, roads, airports, stadiums, swimming pools, and sewage treatment plants. The WPA even employed white-collar professionals. The most famous WPA projects were in the arts and included murals, historical and tourist guidebooks, and also in Federal Theater and Dance Projects. In 1935, Congress also created a National Youth Administration to provide relief to American teenagers and young adults. The Wagner Act was another major Second New Deal measure. It democratized the American workplace by empowering a National Labor Relations Board to supervise elections in which employees voted on union representation. Sponsored by Robert Wagner of New York, the bill also made illegal “unfair labor practices” such as firing and blacklisting union organizers that had stymied organization in the past. Collective bargaining was redefined as a crucial element of American freedom and, now legally protected, would offer workers a mechanism by which they could win higher wages and thus contribute to the recovery.

The American Welfare State The Social Security Act was the most important element of the Second New Deal. It represented Roosevelt’s belief that the government had to guarantee the material well-being of ordinary Americans. It established a system of unemployment insurance, old age pensions, and aid to the disabled, elderly poor, and families with dependent children. Though these programs built on old Progressive proposals, this was a permanent system of social insurance. The Social Security Act created the American version of the welfare state—a term with origins in World War II-era Britain that referred to income assistance, medical care, and social services for all citizens. Although unprecedented in American history, the American welfare state, compared to welfare states in Europe, was more decentralized, spent less, and covered fewer citizens. The original Social Security bill contained a system of national health insurance that was eliminated after vehement opposition by the American Medical Association, which feared government regulation of doctors’ incomes and practices. While some New Dealers wanted a universal program funded by general tax revenues with a single set of eligibility standards administered by federal officials, Secretary of labor Frances Perkins and powerful Congressmen wanted to keep relief in state and local hands and make workers contribute to the costs of their own benefits. FDR wanted Social Security taxes to come from employers and workers, rather than general revenues, in order to give working citizens a “legal, moral, and political right” to collect their old age pensions and unemployment benefits, which Congress would not dare violate. Thus Social Security became a mixture of national and local funding, control, and eligibility standards. Old age pensions were administered nationally but paid for by taxes on workers and employers. These taxes also paid for unemployment insurance, but this was decentralized, allowing states to set unemployment benefit levels. The states paid most of the costs for direct poor relief in a program called Aid to Dependent Children, and eligibility and payment varied greatly. The Social Security System Social Security was a significant departure in American government’s traditional function, and the Second New Deal dramatically changed the relationship between the federal government and American citizens. Before the 1930s, Americans asked whether the government should intervene in the economy. After the New Deal, Americans asked only how the government should intervene.

FDR and the Idea of Freedom The Depression ensured that Americans would face, in the words of one writer, a “reckoning with liberty.” FDR declared that for too many Americans, “life was no longer free; liberty no longer real; men no longer follow the pursuit of happiness.” Most Americans assumed that liberty required a new meaning. The New Deal transformed the idea of freedom by tying it to the growing power of the national government. Roosevelt was not just a master politician but also a brilliant communicator, and with his opponent controlling most newspapers, he turned to the radio to reach Americans with weekly broadcasts called “fireside chats” in order to build support for his policies. FDR adopted old terms and ideas to defend his innovative policies, most notably “liberalism,” which he redefined as large, active, and socially conscious government. In his second fireside chat, Roosevelt contrasted the older notion of liberty as liberty of contract, which served the “privileged few,” to his definition of liberty as “greater security for the average man.” He continued to positively associate freedom with economic security and identify economic inequality as its greatest foe. Yet, “liberty” defined as freedom from powerful government animated his opponents. They argued that New Deal spending undermined fiscal responsibility and that new regulations suppressed American freedom. Conservative businessmen and politicians formed an organization to oppose his policies called the American Liberty League. As the 1930s went on, his opponents increasingly employed the language of liberty to paint FDR as a dictator who threatened traditional American freedoms. The Election of 1936 By 1936, politics reflected class divisions more than at any other point in American history. Working-class voters provided large majorities for the Democratic Party, and large and small businessmen were alienated from the New Deal. Americans divided over their definitions of liberty. One magazine editor said that citizens had two opposing concepts of liberty, one based on free enterprise, the other a “socialized liberty” based on an equality of wealth and goods. A fight over the ideal of freedom defined the 1936 presidential campaign. The Democrats insisted that in a modern economy the government is obliged to guarantee a “democracy of opportunity” for all. Roosevelt, in his speech accepting the nomination, attacked “economic royalists” who intended to establish a tyranny over ordinary people. He insisted that economic rights were the precondition for liberty and that poor men “are not free men.” FDR argued that large corporations constituted a “new despotism” that threatened economic freedom. FDR faced Republican nominee and former Kansas governor Alfred Landon, who denounced Social Security and other New Deal programs as a threat to individual liberty. Roosevelt, however, won by a landslide, carrying every state except for Maine and Vermont. Strong support from organized labor, and his ability to unite southern white and northern black voters, Protestant farmers and urban Catholic and Jewish ethnics, and industrial workers and middle-class home owners won him the election. These groups formed the so-called New Deal coalition that dominated American politics for the next fifty years.

The Court Fight At his inauguration, FDR admitted the Depression was not over and promised to do more to help the significant minority of American still in need of assistance. Encouraged by his massive victory, Roosevelt committed what many believe was an enormous error. Arguing that several Supreme Court justices were too old to perform their functions, he proposed that the president be allowed to appoint a new justice for each who remained on the Court past age seventy (six at that time). FDR’s goal was to change the balance of power on a Court that might invalidate Social Security, the Wagner Act, and other parts of the Second New Deal. Immediately FDR was criticized as an aspiring dictator. Congress rejected the plan. But Roosevelt influenced the Supreme Court, as the “court-packing” threat seemed to persuade the Court to accept economic regulation by the state and federal governments. The Court soon upheld a minimum wage law, affirmed federal power to regulate wages, hours, child labor, and rejected challenges to Social Security and the Wagner Act. Chief Justice Charles Evans Hughes said that while “freedom of contract” did not appear in the Constitution, “liberty” did, and it required legal protections against social evils that menace the people’s welfare. The End of the Second New Deal The Second New Deal slowed after the court-packing fight. Although the Housing Act, passed in 1937, signaled the first major effort to build homes for the poorest in America, the Fair Labor Standards bill languished in Congress for a year before it passed in 1938, banning goods produced by child labor, setting a minimum wage, and requiring overtime pay for more than forty hours of work per week. This established federal regulation of wages and working conditions, a radical departure from pre-Depression policies. In 1937, the economy slumped sharply, after FDR, who saw economic improvements in 1936, had decreased federal farm and WPA work relief. This caused business investment, production, and stocks to also fall and unemployment to rise. In 1936, in The General Theory of Employment, Interests, and Money, John Maynard Keynes criticized economists’ commitment to balanced budgets. He argued that massive government spending was needed, even at the cost of deficits, to sustain purchasing power and stimulate economic activity during downturns. By 1938, Roosevelt adopted this solution, known as Keynesian economics, and he asked Congress for billions for more work relief and farm aid. The New Deal had shifted from economic planning, to economic redistribution, to public spending. The Second New Deal was over.

The New Deal and American Women Roosevelt conceived of the Second New Deal’s assistance to broad groups of needy Americans—the unemployed, elderly, and dependent—as a right of citizenship, not a special privilege. But the realities of inherited ideas about gender and black disenfranchisement in the South powerfully affected legislation. The New Deal affected different groups of Americans in very different ways. The New Deal incorporated women into government more than any other previous administration. A number of talented women such as Secretary of Labor France Perkins advised the president and affected policy. Most well-known was Eleanor Roosevelt, who became the first modern first lady, using her position for the reform in civil rights, labor laws, and work relief. But organized feminism was absent in the 1930s. The Depression actually provoked calls for women to leave the labor market, in order to open up jobs for unemployed men. The federal government enacted laws that led to the dismissal of female government employees, and many private employers prohibited married women from jobs. Even the CIO, which organized female workers, adhered to the notion that women should be supported by men. The ideal of the male-headed household powerfully shaped social policy. Because paying taxes on wages made one eligible for the most generous Social Security programs— old age pensions and unemployment insurance—they did not cover most women because they did not work outside the home. The program excluded the 3 million mostly female domestic workers.

Economy Act: (1933-repealed 1937) prohibit both members of a married couple to hold federal jobs; women dismissed from employment to make room for men Excluded women from benefits such as Social Security States bar hiring of women whose husbands make a “living wage” Banks and Public Schools systems bar employment of married women United Auto Workers: bar women whose husbands provide support Married Women barred from workforce on a massive scale

Eleanor Roosevelt: Biography – 1 st Lady worked to bring awareness to civil rights, human rights, and women’s rights Video (1:29) https://www.youtube.com/watch?v=kCmMuV-euJg https://www.youtube.com/watch?v=kCmMuV-euJg “Eleanor’s Little Village” Arthurdale: ER assisted with the construction of rural this community in West Virginia to relocate coal miners who would ultimately rely on subsistence farming and attraction of industry like General Electric Video (1:09) https://www.youtube.com/watch?v=gCNUESIj2_ohttps://www.youtube.com/watch?v=gCNUESIj2_o Background: https://www.gwu.edu/~erpapers/teachinger/glossary/arthurdale.cfmhttps://www.gwu.edu/~erpapers/teachinger/glossary/arthurdale.cfm

Discrimination: brought attention to rampant issues of racial injustice (segregation, disenfranchisement, lynching), brought awareness to lower wages being paid to black workers in southern relief programs like the WPA and FDR’s executive orders to end this practice Evidence of racial discrimination – photos: http://www.loc.gov/teachers/classroommaterials/presentationsandactivities/presentations/ti meline/depwwii/race/evidence.html http://www.loc.gov/teachers/classroommaterials/presentationsandactivities/presentations/ti meline/depwwii/race/evidence.html Marian Anderson: Daughters of American Revolution (DAR) refused to allow the female black singer a performance at Constitution Hall in Washington, causing Eleanor’s resignation from the group Lincoln Memorial 1939: Eleanor arranged for Marian Anderson to perform, 75,000 watched around the Reflecting Pool of the National Mall Video (1:00) Marian Anderson: http://www.filmpreservation.org/dvds-and- books/clips/marian-anderson-the-lincoln-memorial-concert-1939http://www.filmpreservation.org/dvds-and- books/clips/marian-anderson-the-lincoln-memorial-concert-1939

The Southern Veto Although Roosevelt strived to portray the federal government as representing all people in America, the power of the “Solid South” molded the New Deal welfare state into an entitlement of white Americans. With black disenfranchisement, Democrats controlled the South. Southern Democratic members of Congress were elected again and again by tiny white electorates. Because Committee chairmanships rested on seniority, southerners, once the Democrats took control of Congress in 1933, took the key leadership positions. Roosevelt believed he could not challenge the southern Democrats if he wanted New Deal laws passed. Southern Democrats excluded from Social Security agricultural and domestic workers, the largest categories of black employment. Only black organizations and the left pushed for truly universal social insurance. Congressman Ernest Lundeen in Minnesota in 1935 had introduced a bill to create a federal system of old age, unemployment, and health benefits for all wage workers and support for female heads of households with dependents, but it was replaced by the Social Security bill.

1933 Southern Democrats assumed leadership in Congress FDR felt he couldn’t challenge their power if the New Deal legislation were to pass Congress excluded black Americans from Social Security (workers in agricultural and domestic careers, 2/3 of black workers in the South) Exclusion from Social Security meant no economic safety net (old-age assistance/benefits, unemployment insurance, aid to dependent children) – workers pay into the fund and draw from it for these reasons Townsend Plan that inspired SS was meant to establish an old age pension

The Stigma of Welfare Because of this “southern veto,” most black workers were limited to the least generous and must vulnerable parts of the new welfare state. Direct public assistance programs were ostensibly open to all poor seniors and families with dependent children who demonstrated financial need, but benefits were set low and eligibility was determined by state and local officials, who had broad authority. In the South, this translated into widespread discrimination. Because recipients of direct assistance did not pay Social Security taxes, they soon bore a stigma of dependency on government handouts, which would become known simply as “welfare.” The stigma intensified until pressure for reform led the federal government to abolish its responsibility for welfare in 1996, during the Bill Clinton administration.

Public Assistance Programs were distributed by states States determined eligibility of aid, discrimination was often used to exclude minorities Women, African Americans, and others excluded from paying into Social Security came to depend on “welfare” Exclusion from welfare left a disproportionate amount of black Americans dependent and baring the stigma of getting unearned government assistance

The Indian New Deal The Depression and New Deal had a contradictory impact on the nation’s racial minorities. Commissioner of Indian Affairs John Collier launched an “Indian New Deal,” ending the policy of coerced assimilation and granting unprecedented cultural autonomy. He replaced boarding schools with reservation schools, and increased spending on Indian health. He also ended the policy, implemented since the Dawes Act, of dividing Indian lands into small individual family plots and selling off the rest. Federal officials now recognized the right of Indians to govern their own communities, except in areas covered by federal law. Though the New Deal was the most radical shift in Indian policy in American history, it barely improved living conditions on extremely poor reservations. The New Deal and Mexican-Americans The Depression devastated Mexican-Americans, 400,000 of whom returned to Mexico when demand for their labor declined. Some were coerced into moving by authorities in the Southwest. Perhaps 200,000 Mexican-American children who were born in the United States, and were thus citizens, were also pressured to move to Mexico. Those who stayed worked in desperate conditions on large corporate farms in the Southwest. The Wagner and Social Security Acts did not apply to agricultural workers, and when they tried to unionize, they were brutally suppressed. Mexican-American leaders tried to develop a strategy to claim rights as white Americans, but they also sought support from the Mexican government and promoted a mystical sense of pride and identification with Mexican heritage later given the name la raza.

Last Hired, First Fired Always “last hired and first fired,” African-Americans suffered the most in the Depression. Blacks who kept their jobs now competed with unemployed whites. Facing an unemployment rate twice that of whites, blacks benefitted less from direct government relief and public works projects. The Depression forced blacks to make economic survival their primary demand. Even W. E. B. Du Bois surrendered his hopes for racial integration, and urged blacks to think of themselves as “a nation within a nation.” He urged blacks to build an independent, cooperative economy within their own communities and take control of separate schools. A New Deal for Blacks While Roosevelt seemed little interested in race relations or civil rights, he appointed Mary McLeod Bethune, a well- known black educator, as his advisor on minority affairs and other blacks to positions. Key members of his administration, including his wife and secretary of the interior Harold Ickes, criticized segregation, disenfranchisement, and lynching. Blacks generally supported the New Deal and started voting for the Democratic Party, shifting away from their traditional support for Republicans. Their hopes for broader changes were stymied by white southern Democrats’ influence in the party. Federal Discrimination Federal housing policy powerfully reinforced residential segregations and showed the limitations of New Deal freedom. Local officials implemented national housing policy in ways that reinforced existing racial discrimination. Nearly all municipalities, in both North and South, insisted that housing sponsored by the federal government be racially segregated. The Federal Housing Administration also insured mortgages that contained clauses barring future sale to non-whites. Federal employment practices also engaged in racial discrimination. In the federal government, few blacks held skilled or professional positions, and in the South, many New Deal construction projects refused to hire blacks. The New Deal’s modernization of southern agriculture led large landowners to displace tenant farmers, many of whom were blacks, from their lands. Only with the Great Society programs of the 1960s was the welfare state extended in ways to fully incorporate black Americans.

Federal Housing Policy reinforced residential segregation Federal Housing built in the North and South was racially segregated Federal Housing Administration insured mortgages with clauses that barred future sales to non-white buyers in order to preserve residential segregation Integrated neighbors received no federal assitance Private Banks and Real Estate companies wouldn’t finance integrated neighborhoods

Reflected that racism was prevelant in the South in the 1930’s as justice failed Video (2:32) https://www.youtube.com/watch?v=tbNRrsz6uTM https://www.youtube.com/watch?v=tbNRrsz6uTM

The Heyday of American Communism If the New Deal did not end second-class citizenship for blacks, the 1930s saw the inclusion of other groups into mainstream American life. With Catholics and Jews in prominent posts in Roosevelt’s administration and new immigrant voters forming a base of the Democratic Party, the New Deal made ethnic pluralism central to American politics. The election of Italian-American Fiorello LaGuardia as New York’s mayor in 1933 represented the growing power of ethnic working-class voters. These ethnic groups experienced growing cultural assimilation, as immigration from Europe virtually halted and movies, chain stores, and mass advertising penetrated immigrant enclaves. Unlike the coercive Americanization of the past, however, this Americanization incorporated ethnic identity and married it to American political ideals. In the mid-1930s, for the first time in U.S. history, the left (including socialist, communists, labor radicals, and many New Deal liberals) strongly influenced American politics and culture. The CIO and the Communist Party in particular became the center of a social and intellectual impulse that helped reshape the boundaries of American freedom. The Communist Party grew from a very small and isolated organization into a mass organization. Although it never had more than 100,000 members at any one time in the 1930s, several times that number passed through its ranks. The Communists’ dedication to socialism appealed to a widespread belief that the Depression showed that capitalism had failed. But more important was the party’s constant activity on behalf of the unemployed, workers and unions, and civil rights for African-Americans. At the height of the Popular Front, when the Communists sought to ally themselves with socialist and New Deal liberals in movements for reform rather than revolution, the Communist Party was respectable. Even though tied to Stalinist Russia, the Communist Party ironically contributed to New Deal liberalism’s expansion of freedom and its pluralist conception of America.

Redefining the People The Popular Front vision of American society greatly influenced American culture, through theater, film, and dance. Its broadly left-wing ethos defined social and economic radicalism, not support for status quo, as true Americanism. Ethnic and racial diversity, unionism and social citizenship were what made America great, not the pursuit of wealth. The American “people,” seen by many intellectuals in the 1920s as fundamentalist and crassly commercial, were now proclaimed embodiments of democratic virtue. Artists and writers in the 1930s crafted socially meaningful work that depicted daily life for ordinary farmers and urban workers, and art about migrant workers and sharecroppers and that created by the people, such as folk music and black spirituals, were held to express genuine Americanism. Promoting Diversity The Democratic Party, despite its new northern black and ethnic base of support, did not embrace ethno-cultural issues. But the Popular Front insisted that the nation’s greatness lay in its diversity, tolerance, and rejection of ethnic prejudice and class privilege. The CIO promoted and often embodied this idea of ethnic and racial inclusivity. It adopted cultural pluralism and welcomed groups previously excluded from the labor movement, such as blacks and Mexican-Americans. Yet while Popular Front culture celebrated the promise of America, it did not ignore its tragedies and troubles, such as racial discrimination and the dispossession of Native Americans.

Challenging the Color Line Popular Front culture strongly condemned racism as incompatible with Americanism, compared to New Deal liberalism’s tepid stance on issues of race and civil rights. While Jewish and Catholic groups promoted ethnic and religious tolerance, the Communist Party was the only mostly white organization of the era to prioritize combating racism. The Communists even found support in the conservative South. Communist groups mobilized popular support for black defendants victimized by a racist criminal justice system, which made the Scottsboro cased an international cause. Nine young black men in Scottsboro, Alabama, were arrested in 1931 for raping two white women. Although one of the two accusers recanted, the men were put on trial and convicted three times. The Supreme Court rejected the first two verdicts and created legal principles that greatly expanded civil liberties—that defendants have a constitutional right to effective legal representation, and that blacks cannot be systematically excluded from juries. But the Court approved the third conviction, and five of the men went to prison for more than a decade. White workers’ resistance did not keep the CIO from welcoming black members and supporting anti-lynching laws and voting rights for southern blacks. For the first time, the CIO brought large numbers of blacks into the labor movement, even after exclusion had made them hostile to unions for many years. Popular Front culture also supported civil liberties, especially the right of workers to organize unions. Pro-union workers faced local laws restricting free speech and repression by private and public police. Public concern about violence directed at southern tenant farmers and northern industrial workers made discussions of labor rights discussions over civil liberties. In 1936, a Senate committee led by Robert M. La Follette exposed the harsh methods employers used to fight unionization, including spies and private police. Critics argued that America’s workplaces resembled European dictatorships. Workers’ militancy also showcased that the free speech of groups, and not just individuals, could also be violated, and the federal government responded by emphasizing the importance of civil liberties. Labor and Civil Liberties The Supreme Court abandoned “liberty of contract” for a definition of American freedom based on civil liberties, and allowed free speech for Communists, labor picketing, and initiated the repeal of numerous state laws that inhibited expression. Yet, other groups also tried to restrict free speech. In 1938, the U.S. House of Representatives created an “Un-American Activities Committee” to ferret out disloyalty and “un-American” behavior and speech, and two years later Congress passed the Smith Act, which made it a crime to “teach, advocate, or encourage” the overthrow of government. Similar committees were established at the state level and used to intimidate communists and others on the left.

The End of the New Deal By 1940, the New Deal was ending. More and more southern Democrats opposed Roosevelt’s policies. Roosevelt exposed the poverty and lack of economic development in the South, and a new generation of homegrown southern radicals—southern New Dealers, black activists, labor leaders, communists, and a few elected officials—were organizing for unions, unemployment relief, and racial justice. Instead of simply shaping New Deal measures to accommodate their racial and economic preferences, southern Democrats who feared that federal intervention in the region would lead to more unions and racial conflict started to oppose Roosevelt’s proposals altogether. In 1938, FDR in response appealed to southern voters to support more progressive, pro–New Deal southern Democratic candidates in the congressional elections. Instead, the south’s small electorate resisted and re-elected the incumbents. In the North, court-packing and the rise of the CIO led middle-class voters to go toward the Republicans. The Republicans gained a significant number of seats, and stalemate in Congress followed. Congress started to eliminate many popular New Deal programs. Roosevelt turned his administration’s attention towards Europe and impending war. The New Deal in American History The New Deal seems limited, given the enormous catastrophe it confronted. Compared to European welfare states, Social Security was confined to fewer functions and not as funded. The New Deal had not improve race or gender relations, but actually worsened them in many ways. But the New Deal accomplished many things, most importantly making the federal government an active force in regulating and shaping economic life. It also restored Americans’ faith in democracy, reconfigured American party and electoral politics, and reinvigorated ideas of freedom to include a more diverse American people. But even the New Deal could not undo the Depression, which was finally ended only by the mass employment created by World War II.

A celebrated cover of The New Yorker depicts a morose Herbert Hoover

Norton Lecture Slides Independent and Employee-Owned Give Me Liberty! AN AMERICAN HISTORY THIRD EDITION This concludes the Norton Lecture Slides Slide Set for Chapter 21 by Eric Foner

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