The Second New Deal
Turning Point 1937
1937 marked a turning point in the history of the Court. For years to come, the Court more willingly accepted a larger role for the federal government. Yet the court-packing incident weakened FDDR politically. Before the court-packing plan, FDR's popuularity prevented critics from challenging him. Now that Roosevelt had lost momentum, critics felt free to take him on. And even though the Court did not strike down any more laws, after 1937 Roosevelt found the public much less willing to support further New Deal legislation.
The Supreme Court Opposes the New Deal
A year before the 1936 election, the Supreme Court had overturned one of the key laws of Roosevelt's first hundred days. In the case of Schehter Poultry v. United States, the Supreme Court unanimously ruled that since the President had no power to regulate interstate commerce, the National Industrial Recovery Act was unconstitutional. Not long afterward, the Court ruled a key part of the Agricultural Adjustment Act unconstitutional. Roosevelt charged that the Court had taken the nation back to "horse-and-buggy" days. He expected the Court to strike down other New Deal measures, limiting his ability to enact new reforms.
Sit-Dowing Strike
In December 1936, members of the CIO's newly formed United Automobile Workers Union (UAW) staged a sit-down strike, occupying one of General Motors' most important plants in Flint, Michigan. In a sit-down strike, workers refuse to leave the workplace until a settlement is reached. When the police and state militia threatened to remove them by force, the workers informed Michigan governor Frank Murphy that they would not leave.
Water Projects Change the Face of the West
Many of the New Deal public-works projects had an enormous impact on the development of the American West. The government funded the complex Central Valley irrigation system in California. The massive Bonneville Dam in the Pacific Northwest controlled flooding and provided electricity to a vast number of citizens. In 1941, the Department of the Interior's Bonneville Power Administration (BPA) hired folk singer Woody Guthrie for one month to write songs for a movie they had made promoting the benefits of electricity. Guthrie's song, "Roll on, Columbia," pays tribute to the projects that harnessed the power of the Columbia River.
Granting New Rights to Workers
Roosevelt believed that the success of the New Deal depended on raising the standard of living for American industrial workers. This, he believed, would improve the entire economy. The National Labor Relations Act was the most important piece of New Deal labor legislation. Called the Wagner Act, it recognzied the right of employees to join labor unions and gave workers the right to collective bargaining. Collective bargaining meant that employers had to negotiate with unions about hours, wages, adn other working conditions. The law created the National Labor Relations Board (NLRB) to look into workers' complaints.
How did Roosevelt try to solve the Supreme Court problem?
Roosevelt said he was going to add a justice to the court for every current justice over the age of 70. Since the president nominates the Supreme Court justices, this would change the court in favor of Roosevelt.
After the Switchk
Shortly after this swithc, Judge Willis Van Devanter, who had helped strike down several New Deal programs, resigned form the Court. This enabled FDR to nominate a Justice friendlier to the New Deal. With more retirements, Roosevelt nominated a number of other Justices, including Felix Frankfurter, one of his top advisers.
General Motors Strike
The strike lasted for 44 days until General Motors, then the largest company in the world, agreed to recognize the UAW. This union success led to others. By 1940, 9 million workers belonged to unions, twice the number of members in 1930. Just as important, union members gained better wages and working conditions.
A New Downturn Spurs Conservation Gains
The turmoil over the Supreme Court had barely faded when the Roosevelt administration faced another crisis. During 1935 and 1936, economic conditions had begun to improve. Unemployment had fallen 10 percent in four years. With the economy doing better, FDR cut back on federal spending in order to reduce the rising deficit. But he miscalculated. While Roosevelt reduced federal spending, the Federal Reserve Board raised interest rates, making it more difficult for businesses to expand and for consumers to borrow to buy new goods. Suddenly, the economy was in another tailspin. Unemployment soared to more than 20 percent. Nearly all of the gains in employment and production were wiped out.
New Programs Provide Jobs Part 2
In 1943, the WPA had employed more than 8 million people and spent about $11 billion. Its workers built more than 650,000 miles of highways and 125,000 public buildings. Among the most famous projects funded by the WPA were the San Antonio River Walk and parts of the Appalachian Trail.
John Maynard Keynes/Pump Priming
All of these programs were expensive, and the government paid for them by spending money it did not have. The feder deficit--$461 million in 1932--grew to $4.4 billion in 1936. The enormous expenditures and growing debt led many to criticize the government's public-works projects as wasteful. Some economists disagreed. British economist John Maynard Keynes argued that deficit spending was needed to end the depression. According to Keynes, putting people to wor on public projects put money into the hands of consumer who would buy more goods, stimulating the economy. Keynes called this theory pump priming.
Labor Unions Find a New Energy
Even before the Great Depression, most industrial workers labored long hours for little pay. Few belonged to labor unions. However, during the Great Depression, there was an upsurge in union activity. New unions enlisted millions of workers from the mining and automobile industries.
Congress of Industrial Organizations
Fed up with the AFL's reluctance to organize, John L. Lewis, the preisdent of the United Mine Workers, and a number of other labor leaders, established the Congress of Industrial Organizations (CIO). The workers targeted by the CIO-organizing campaigns tended to be lower paid and ethnically more diverse than those workers represented by the AFL.
Challenges to the New Deal
Franklin Roosevelt won an overwhelming victory in the presidential election of 1936. He received 61 percent of the vote, compared to just 37 percent for his Republican challenger, Alfred M. Landon. Roosevelt carried every state but Main and Vermont. FDR entered his second term determined to challenge the group that he considered the main enemy of the New Deal--a Supreme Court that had struck down many of his programs.
Roosevelt's Plan/Justice Owen J. Roberts
Given Roosevelt's enormous popularity, he might have convinced Congress to enact his plan but he did not have to because the Court began to turn his way. On March 29, 1937, the Court ruled 5 to 4 in favor of a minimum wage law. Two weeks later, again by a vote of 5 to 4, the Supreme Court upheld the constitutionality of the Wagner Act. In both cases, Justice Owen J. Roberts provided the deciding vote. Pundits called it the "switch in time to save nine," because Roberts had previously voted against several New Deal programs. Roberts's two votes in support of the New Deal removed FDR's main reason for packing the Court.
Social Security Act
In addition to creating a pension system for retirees, the Social Security Act that Congress enacted established unemployment insurance for workers who lost their jobs. The law also created insurance for victims of work-related accidents and provided aid for poverty-stricken mothers and children, the blind, and the disabled.
The Second New Deal
In his fireside chats, press conferences, and major addresses, Roosevelt explained the challenges facing the nation. He said that the complexities of the modern world compelled the federal government to "promote the general welfare" and to intervene to protect citizens' rights. Rosoevelt used legislation passed during the Second New Deal to accomplish these goals. The Second New Deal addressed the problems of the elderly, the poor, and the unemployed; created new public-works projects; helped farmers; and enacted measures to protect workers' rights. It was during this period that the first serious challenges to the New Deal emerged.
New Programs Provide Jobs
In the spring of 1935, Congress appropriated $5 billion for new jobs and created the Works Progress Administration (WPA) to administer the program. Roosevelt placed his longtime associate Harry Hopkins in charge. The WPA built or improved a good part of the nation's highways, dredged rivers and harbors, and promote soil and water conservation. The WPA even provided programs in the arts for displaced artists. As Hopkins explained, artists "have to eat just like other people."
Downturn Effects
Largely because of the downturn, the Democrats suffered a setback in the 1938 congressional elections. Republicans picked up 7 Senate and 75 House seats. Although Democrats still maintained a majority in both houses of Congress, Roosevelt's power base was shaken because many southern Democrats were lukewarm supporters of the New Deal. Needing their support for his foreign policies, FDR chose not to try to force more reforms through Congress.
Farmers and the New Deal
New Deal programs changed the relationship of the federal government to the American farmer. The government was now committed to providing price supports, or subsidies, for agriculture. Critics attacked price supports for undermining the free market. Others observed that large farms, not small farmers, benefited most from federal farm programs. Evn during the 1930s, many noticed that tenant farmers and sharecroppers, often African Americans, did not fully share in the federal programs. Yet farm prices stabilized, and agriculture remained a productive sector of the economy.
FDR Proposes "Packing" the Court
So on February 5, 1937, in a special address to Congress, FDR unveiled a plan tha would dilute the power of the sitting Justices of the Supreme Court. He called for adding up to six new Justices to the nine-member Court. He justified his proposal by noting that the Constitution did not specify the number of judges on the Court. He added that many of the Justices were elderly and overworked. Critics, recognizing that Roosevelt's new appointees would most likely be New Deal supporters, called his plan court packing. They accused him of trying to increase presidential power and upsetting the delicate balance between the three branches of the federal government. Some critics urged Americans to speak out.
Fair Labor Standards Act
The Fair Labor Standards Act of 1938 provided workers with additional rights. It established a minimum wage, initially at 25 cents per hour, and a maximum workweek or 44 hours. It also outlawed child labor. The minimum wage remains one of the New Deal's most controversial legacies. In the years ahead, the minimum wage would be gradually raised. Tody, whenever a riase in the minimum wage is proposed, economists and political leaders debate the wisdom of such an increase.
More Aid Goes to Farmers
The Second New Deal included further help for farmers. When the depession began, only 10 percent of all farms had electricity, largely because utility companies did not find it profitable to run electric lines to communities with small populations. To bring farmers into the light, Congress established the Rural Electrification Administration (REA). The REA loaned money to electric utilities to build power lines, bringing lectricity to isolated rural areas. The program was so successful that by 1950, more than 80 percent of American farms had electricity.
Flaws of the Social Security Act
The Social Security Act had many flaws. At first, it did not apply to domestics or farmworkers. Since African Americans were disporportionately employed in these fields, they were not eligible for many of the benefits of Social Security. Widows receiveed smaller benefits than widowers, because people presumed that elderly women could manage on less money than elderly men. Despite these shortcomings, Social Security proved the most popular and significant of the New Deal programs.
Social Security Eases the Burden on Older Americans
The U.S. was one of the few industrialized nations in the world that did not have some form of pension system for the elderly. During the depression, many elderly people had lost their homes and their life savings and were in poverty. On January 17, 1935, President Roosevelt unveiled his plans for Social Secuirty.
What was the effect of Roosevelt's court packing attempt?
The bill did not succeed, but the Supreme Court began to support the New Deal.
Workers Use Their Newfound Rights
The upsurge in union activity came at the same time as a bitter feud within the major labor federation., the American Federatioin of Labor (AFL). The AFL represented skilled workers--such as plumber, carpenters, and electricians--who joined trade or craft unions. Few workers in the major industries belonged to the AFL, and the union made little effort to organize them.
