The New Deal

Franklin D. Roosevelt was governor of New York, when the Wall Street Crash in October 1929, created the worst depression in American history. Roosevelt made strenuous attempts to help those without work. He set up the New York State Emergency Relief Commission and appointed the respected Harry Hopkins to run the agency. Another popular figure with a good record for helping the disadvantaged, Frances Perkins, was recruited to the team as state industrial commissioner. With the help of Hopkins and Perkins, Roosevelt introduced help for the unemployed and those too old to work.

Roosevelt was seen as great success as governor of New York and he was the obvious choice as the Democratic presidential candidate in 1932. Although Roosevelt was vague about what he would do about the economic depression, he easily beat his unpopular Republican rival, Herbert Hoover.

Roosevelt's first act as president was to deal with the country's banking crisis. Since the beginning of the depression, a fifth of all banks had been forced to close. As a consequence, around 15% of people's life-savings had been lost. By the beginning of 1933 the American people were starting to lose faith in their banking system and a significant proportion were withdrawing their money and keeping it at home. The day after taking office as president, Roosevelt ordered all banks to close. He then asked Congress to pass legislation which would guarantee that savers would not lose their money if there was another financial crisis.

Franklin D. Roosevelt to Herbert Hoover: Just leave them Herb. I'll do it all after March 4th. Cliff Berryman, Washington Evening Star (1932)
Franklin D. Roosevelt to Herbert Hoover: Just leave
them Herb. I'll do it all after March 4th. Cliff Berryman, Washington Evening Star (1932)

On 9th March 1933, Franklin D. Roosevelt called a special session of Congress. He told the members that unemployment could only be solved "by direct recruiting by the Government itself." For the next three months, Roosevelt proposed, and Congress passed, a series of important bills that attempted to deal with the problem of unemployment. The special session of Congress became known as the Hundred Days and provided the basis for Roosevelt's New Deal.

The government employed people to carry out a range of different tasks. These projects included the Works Projects Administration (WPA), the Civilian Conservation Corps (CCC), the National Youth Administration (NYA), Farm Security Administration (FSA), the National Recovery Administration (NRA) and the Public Works Administration (PWA). Other schemes adminstered by the Works Projects Administration included the Federal Writers Project (1935-39) Federal Theatre Project (1935-39) and the Federal Art Project (1935-43).

As well as trying to reduce unemployment, Roosevelt also attempted to reduce the misery for those who were unable to work. One of the bodies Roosevelt formed was the Federal Emergency Relief Administration which provided federal money to help those in desperate need.

Other legislation passed by Roosevelt included the Agricultural Adjustment Act (1933), National Housing Act (1934), the Federal Securities Act (1934). In August 1935 the Social Security Act was passed. This act set up a national system of old age pensions and co-ordinated federal and state action for the relief of the unemployed.

During the 1936 presidential election, Roosevelt was attacked for not keeping his promise to balance the budget. The National Labour Relations Act was unpopular with businessmen who felt that it favoured the trade unions. Some went as far as accusing Roosevelt of being a communist. However, the New Deal was extremely popular with the electorate and Roosevelt easily defeated the Republican Party candidate, Alfred M. Landon, by 27,751,612 votes to 16,681,913.

Primary Sources

(1) Herbert Hoover, speech in New York (October, 1932)

The proposals of our opponents will endanger or destroy our system. I especially emphasize that promise to promote "employment for all surplus labour at all times." At first I could not believe that anyone would be so cruel as to hold out hope so absolutely impossible of realization to these 10,000,000 who are unemployed. And I protest against such frivolous promises being held out to a suffering people.

If it were possible to give this employment to 10,000,000 people by the Government, it would cost upwards of $9,000,000,000 a year. It would pull down the employment of those who are still at work by the high taxes and the demoralization of credit upon which their employment is dependent. It would mean the growth of a fearful bureaucracy which, once established, could never be dislodged.

(2) Franklin D. Roosevelt, speech in Boston (October, 1932)

We have two problems: first, to meet the immediate distress; second, to build up on a basis of permanent employment.

As to immediate relief, the first principle is that this nation, this national government, if you like, owes a positive duty that no citizen shall be permitted to starve.

In addition to providing emergency relief, the Federal Government should and must provide temporary work wherever that is possible. You and I know that in the national forests, on flood prevention, and on the development of waterway projects that have already been authorized and planned but not yet executed, tens of thousands, and even hundreds of thousands of our unemployed citizens can be given at least temporary employment.

(3) Franklin D. Roosevelt, radio broadcast, Fireside Chat (7th May, 1933)

The legislation which has been passed or in the process of enactment can properly be considered as part of a well-grounded plan.

First, we are giving opportunity of employment to one-quarter of a million of the unemployed, especially the young men who have dependents, to go into the forestry and flood prevention work. This is a big task because it means feeding, clothing and caring for nearly twice as many men as we have in the regular army itself. In creating this civilian conservation corps we are killing two birds with one stone. We are clearly enhancing the value of our natural resources and second, we are relieving an appreciable amount of actual distress. This great group of men have entered upon their work on a purely voluntary basis, no military training is involved and we are conserving not only our natural resources but our human resources. One of the great values to this work is the fact that it is direct and requires the intervention of very little machinery. Second, I have requested the Congress and have secured action upon a proposal to put the great properties owned by our Government at Muscle Shoals to work after long years of wasteful inaction, and with this a broad plan for the improvement of a vast area in the Tennessee Valley. It will add to the comfort and happiness of hundreds of thousands of people and the incident benefits will reach the entire nation.

Next, the Congress is about to pass legislation that will greatly ease the mortgage distress among the farmers and the home owners of the nation, by providing for the easing of the burden of debt now bearing so heavily upon millions of our people.

Our next step in seeking immediate relief is a grant of half a billion dollars to help the states, counties and municipalities in their duty to care for those who need direct and Immediate relief.

The Congress also passed legislation authorizing the sale of beer in such states as desired. This has already resulted in considerable reemployment and, incidentally, has provided much needed tax revenue.

We are planning to ask the Congress for legislation to enable the Government to undertake public works, thus stimulating directly and indirectly the employment of many others in well-considered projects.

Further legislation has been taken up which goes much more fundamentally into our economic problems. The Farm Relief Bill seeks by the use of several methods, alone or together, to bring about an increased return to farmers for their major farm products, seeking at the same time to prevent in the days to come disastrous over-production which so often in the past has kept farm commodity prices far below a reasonable return. This measure provides wide powers for emergencies. The extent of its use will depend entirely upon what the future has in store.

Well-considered and conservative measures will likewise be proposed which will attempt to give to the industrial workers of the country a more fair wage return, prevent cut-throat competition and unduly long hours for labor, and at the same time to encourage each industry to prevent over-production.

(4) Emanuel Celler, wrote about President Franklin D. Roosevelt and the New Deal in his autobiography, You Never Leave Brooklyn (1953)

The first days of the Roosevelt Administration charged the air with the snap and the zigzag of electricity. I felt it. We all felt it. It seemed as it you could hold out your hand and close it over the piece of excitement you had ripped away. It was the return of hope. The mind was elastic and capable of crowding idea into idea. New faces came to Washington - young faces of bright lads who could talk. It was contagious. We started to talk in the cloak rooms; we started to talk in committees. The shining new faces called on us and talked.

In March of 1933 we had witnessed a revolution - a revolution in manner, in mores, in the definition of government. What before had been black or white sprang alive with color. The messages to Congress, the legislation; even the reports on the legislation took on the briskness of authority. I have asked myself often, "Did one man do this? If one did this, what manner of man was he?" I don't know. I think nobody does. Since those days I have read every bit of writing on Roosevelt: Perkins, Sherwood, Churchill, Eleanor Roosevelt, Flynn, Gunther. Out of these cascades of words no definite or sharp outline arises. Whenever I visited Roosevelt on official business, I found a man adroit, voluble, assured, and smiling. I was never quite sure he was interested in the purpose of my visit; we spent so little time on it.

Mostly he talked. He talked with seeming frankness, and when I left, I found that he had committed himself to no point of view. At the end of each visit I realized that I had been hypnotized. His humor was broad, his manner friendly without condescension. Of wit there was little; -of philosophy, none. What did he possess? Intuition, yes. Inspiration, yes. Love of adventure, the curiosity of the experimental. None of these give the answer. None of these give the key. I believe his magic lay in one facet of his personality. He could say and he did say, "Let's try it." He knew how to take the risk. No other man in public life I knew could so readily take the challenge of the new.

(5) Charlie Chaplin My Autobiography (1964)

The lugubrious Hoover sat and sulked, because his disastrous economic sophistry of allocating money at the top in the belief that it would percolate down to the common people had failed. And amidst all this tragedy he ranted in the election campaign that if Franklin Roosevelt got into office the very foundations of the American system - not an infallible system at that moment - would be imperilled.

However, Franklin D. Roosevelt did get into office, and the country was not imperilled. His 'Forgotten Man' speech lifted American politics out of its cynical drowse and established the most inspiring era in American history. I heard the speech over the radio at Sam Goldwyn's beach-house. "The only thing we have to fear is fear itself" came over the air like a ray of sunlight. But I was sceptical, as were most of us. "Too good to be true," I said.

No sooner had Roosevelt taken office than he began to fit actions to his words, ordering a ten-day bank holiday to stop the banks from collapsing. That was a moment when America was at its best. Shops and stores of all kinds continued to do business on credit, even the cinemas sold tickets on credit, and for ten days, with Roosevelt and his so-called brains trust formulated the New Deal, the people acted magnificently.

Legislation was ordered for every kind of emergency: re-establishing farm credit to stop the wholesale robbery of foreclosures, financing big public projects, establishing the National Recovery Act, raising the minimum wage, spreading out jobs by shortening working hours, and encouraging the organization of labour unions. This was going to far; this was socialism, the opposition shouted. whether it was or not, it saved capitalism from complete collapse. It also inaugurated some of the finest reforms in the history of the United States. It was inspiring to see how quickly the American citizen reacted to constructive government.

(6) C. B. Baldwin, was assistant to Henry Wallace, Secretary of Agriculture, in Franklin D. Roosevelt's administration in 1933.

The New Deal was an uneasy coalition. Fights developed very early between two factions: one, representing the big farmers, and the other, the little farmers. The Agricultural Adjustment Administration (AAA) came into being shortly after I got to Washington. Its purpose was to increase farm prices, which were pitifully low. All the farmers were in trouble, even the big ones.

Hog prices had just gone to hell. They were four, five cents a pound? The farmers were starving to death. It was decided to slaughter piggy sows (a pregnant pig). The AAA decided to pay the farmers to kill them and the little pigs. Lot of them went into fertilizer. Then a great cry went up from the press, particularly the Chicago Tribune, about Henry Wallace slaughtering these little pigs. You'd think they were precious babies.

You had a similar situation on cotton. Prices were down to four cents a pound and the cost of producing was probably ten. So a program was initiated to plow up cotton. A third of the crop, if I remember. Cotton prices went up to ten cents, maybe eleven.

(7) Frances Perkins was secretary for labour in Franklin D. Roosevelt's first cabinet. She wrote about this period in her book, The Roosevelt I Knew (1946)

In one of my conversations with the President in March 1933, he brought up the idea that became the Civilian Conservation Corps. Roosevelt loved trees and hated to see them cut and not replaced. It was natural for him to wish to put large numbers of the unemployed to repairing such devastation. His enthusiasm for this project, which was really all his own, led him to some exaggeration of what could be accomplished. He saw it big. He thought any man or boy would rejoice to leave the city and work in the woods.

It was characteristic of him that he conceived the project, boldly rushed it through, and happily left it to others to worry about the details. And there were some difficult details. The attitude of the trade unions had to be considered. They were disturbed about this program, which they feared would put all workers under a "dollar a day" regimentation merely because they were unemployed.

(8) Popular joke in the United States in the 1934 about different political theories.

Socialism: If you own two cows you give one to your neighbour.

Communism: You give both cows to the government and the government gives you back some of the milk.

Fascism: You keep the cows but give the milk to the government, which sells some of it back to you.

New Dealism: You shoot both cows and milk the government.

(9) John T. Flynn, The Roosevelt Myth (1944)

Roosevelt did not restore our economic system. He did not construct a new one. He substituted an old one which lives upon permanent crises and an armament economy. And he did this not by a process of orderly architecture and building, but by a succession of blunders, moving one step at a time, in flight from one problem to another, until we are now arrived at that kind of state­supported economic system that will continue to devour a little at a time the private system until it disappears altogether.

He did not restore our political system to its full strength. One may like the shape into which he battered it, but it cannot be called a repair job. He changed our political system with two weapons ­ blank­check congressional appropriations and blank­check congressional legislation. In 1933, Congress abdicated much of its power when it put billions into his hands by a blanket appropriation to be spent at his sweet will and when it passed general laws, leaving it to him, through great government bureaus of his appointment, to fill in the details of legislation.

These two baleful mistakes gave him a power which he used ruthlessly. He used it to break down the power of Congress and concentrate it in the hands of the executive. The end of these two betrayals ­ the smashing of our economic system and the twisting of our political system ­ can only be the Planned Economic State, which, either in the form of Communism or Fascism, dominates the entire continent of Europe today. The capitalist system cannot live under these conditions. The capitalist system cannot survive a Planned Economy. Such an economy can be managed only by a dictatorial government capable of enforcing the directives it issues. The only result of our present system ­ unless we reverse the drift ­ must be the gradual extension of the fascist sector and the gradual disappearance of the system of free enterprise under a free representative government.

There are men who honestly defend this transformation. They at least are honest. They believe in the Planned Economy. They believe in the highly centralized government operated by a powerful executive. They do not say Roosevelt saved our system. They say he has given us a new one. That is logical. But no one can praise Roosevelt for doing this and then insist that he restored our traditional political and economic systems to their former vitality.