CHAPTER 25

CHAPTER 25
The Great Depression and the New Deal,
1929-1941

Chapter Summary
Chapter 25 opens with a discussion of the Great Depression’s impact on people’s lives. The human story includes the increase in malnutrition and disease, the sufferings of drought- and debt-ridden farmers, descriptions of hobo towns, altered marital patterns, and changes to family life.
In the midst of the depression, few Americans thought in radical, revolutionary terms. Many accepted the traditional American belief in the self-made man and blamed themselves for the depression. The protests that emerged were relatively mild, the most spectacular being the Bonus March. Furthermore, in the case of the Bonus March, it was the government, not the people, that overreacted.
Hoover’s response to appeals from the people that the government extend aid was at first defensive. Hoover was convinced that self-help was the solution, not government aid. As the depression deepened, Hoover reluctantly began to energize the government. But at the same time he pursued policies that caused further deterioration of the economic situation.
An understanding of Franklin Roosevelt’s background, his perception of himself, his society, and American government is important to an understanding of his approach to the Great Depression. That background and Roosevelt’s frame of reference are outlined as part of the discussion of the presidential election of 1932. Moreover, the authors explain the reasons for Roosevelt’s victory and reveal that in spite of a deepening crisis Americans did not adopt radical solutions. Instead, they continued to follow tradition by peacefully exchanging one government for another.
With the aid of the “Brain Trust,” Roosevelt adopted a theoretical basis for the New Deal he promised to the American people. Roosevelt believed that government could act as a positive force in American society. In deciding how it should act, he was a pragmatist and thus willing to experiment. At first he accepted the idea that government could and should effectively regulate big business. He accepted the idea that centralized planning by the federal government could solve some of the problems associated with the depression, and he was willing to have government engage in direct relief to alleviate the distress of the nation’s citizens. Furthermore, the first New Deal was based on the assumption that overproduction was the underlying problem.
Roosevelt’s initial actions, outlined in “Launching the New Deal and Restoring Confidence,” demonstrate both the conservative nature of his approach and his realization that the psychology of pessimism within the country was as great an enemy as the depression itself. The legislation that was passed, as well as the fireside chats, provided a sense of movement that helped break the mood of pessimism.
An attempt to solve the problem of overproduction through centralized planning provided the theoretical framework for passage of the AAA, the NIRA, and the TVA. Belief in giving direct relief to states and to individuals may be seen in acts such as the Federal Emergency Relief Act and the CCC. The authors consider these and other measures passed during the Hundred Days, and they also discuss the concept of interest-group democracy, which is important for understanding the politics of the New Deal and the Democratic coalition that emerged.
The statistics provided show that the New Deal was not a cure-all and help explain the emergence of opposition to it. The range of criticism indicates that Roosevelt was a political moderate in the route that he chose. Furthermore, the kind of opposition from popular critics like Huey Long, as well as Supreme Court decisions against the AAA and the NIRA, help explain the launching of the Second New Deal.
The Second New Deal stemmed from the view that underconsumption was the nation’s basic problem, that business and banking interests had to be regulated more closely, and that the government had a responsibility to the aged and the needy in American society. These assumptions were behind the Emergency Relief Appropriation Act and five other major pieces of legislation passed during the Second Hundred Days.
The Second New Deal and the forging of the New Deal coalition carried Roosevelt to victory in the 1936 election. Mistakes and political reality meant that Roosevelt did not enjoy successes during his second term like those experienced in his first. He made a political and tactical mistake in his request for a restructuring of the Supreme Court. His dislike of deficit spending and desire for a balanced budget led to drastic cuts in federal spending, which in turn led to a new recession in 1937 and to a renewal of deficit spending. Such mistakes undercut some of Roosevelt’s charisma, and with the passage of a new Agricultural Adjustment Act and the Fair Labor Standards Act, the last reforms of the New Deal were enacted.
Having discussed the reforms of the New Deal, the authors consider the impact of the New Deal era on organized labor, nonwhites, and women. Organized labor benefited from both Section 7(a) of the NIRA and the Wagner Act. Therefore, despite determined resistance by management and a division within the labor movement that led to the creation of the Congress of Industrial Organizations (CIO), the union movement made impressive gains during the 1930s.
Although passage of the Indian Reorganization Act indicates a more enlightened governmental approach to American Indians, the experience of African Americans and Mexican Americans demonstrates that racism continued as a force detrimental to the lives of nonwhites. The Scottsboro case serves as a symbol of the “ugliness of race relations in the depression era.” Furthermore, despite the presence of the Black Cabinet, President Roosevelt was never fully committed to civil rights for blacks, and some New Deal measures functioned in a discriminatory way. However, there were some indications that change was on the horizon.
First, in relation to cases arising out of the Scottsboro trial, the Supreme Court ruled that the due process clause of the Fourteenth Amendment made the criminal protection procedures (the right to adequate defense counsel and the right to an impartial jury) of the Sixth Amendment applicable to the states. Second, Roosevelt created the Black Cabinet and had within his administration people committed to racial equality. Furthermore, African Americans continued, as they had throughout their history, to work in their own behalf to overcome the injustices and abuses associated with white racism. The March on Washington Movement and Roosevelt’s subsequent issuance of Executive Order No. 8802 can be seen in this light.
Like blacks, women continued to suffer discrimination during the depression era. Although their contributions to the family increased, their status within the family remained unchanged. As more women entered the work force, they continued to face hostility, wage discrimination, and limited employment choices because of sex-typed occupations. Women participated in the shaping and execution of the New Deal through the “women’s network” and through formal appointment to governmental posts, but the fact remained that much New Deal legislation either discriminated against or excluded women.
The chapter ends with a discussion of the presidential election of 1940 and the way in which historians view the legacy of the New Deal.



Learning Objectives
1. Discuss the impact of the Great Depression on the American economic system and on city dwellers, farmers, marriage patterns, and family life.
2. Examine how and why Americans responded to the Great Depression as they did.
3. Explain and evaluate the Hoover administration’s attempts to deal with the economic and human crises posed by the Great Depression.
4. Examine the issues and personalities and explain the outcome of the 1932 presidential and congressional elections.
5. Discuss the impact of Franklin D. Roosevelt’s personal and professional experiences prior to 1932 on his political, social, and economic views, and examine the relationship between his political, social, and economic views and his handling of the Great Depression.
6. Explain the practical and theoretical basis for the legislative enactments of the First New Deal (l933–1934), and evaluate the effectiveness of the First New Deal in solving the problems of the depression.
7. Examine the variety of criticisms leveled against the New Deal, and discuss the alternatives proposed.
8. Contrast the Supreme Court’s reaction to New Deal legislation before and after 1937, and explain the reasons for the shift.
9. Explain the practical and theoretical basis for the legislative enactments of the Second New Deal (1935–1939), and evaluate the effectiveness of the Second New Deal in solving the problems of the depression.
10. Identify the components of the New Deal coalition, and examine the impact of this coalition on the 1936 presidential election.
11. Examine the problems encountered by President Roosevelt during his second term.
12. Examine the power struggle between craft unions and industrial unions during the New Deal era; discuss the victories and defeats of organized labor during this period; and assess the overall impact of the New Deal era on organized labor in the United States.
13. Examine the impact of the Great Depression and the New Deal era on African Americans, American Indians, Mexican Americans, and women, and explain the responses of these groups to the obstacles they faced.
14. Discuss the issues and personalities and explain the outcome of the 1940 presidential election.
15. Discuss the legacy of the New Deal.



Chapter Outline
I. Introduction
The stock market crash in 1929 touched off a crisis that left 13 million Americans unemployed by the time Franklin D. Roosevelt took office. The New Deal transformed the United States, but the Great Depression ended only with outbreak of World War II.

II. Hoover and Hard Times: 1929 1933
A. No Food, No Home
The deepening of the Great Depression left many Americans jobless and often homeless. Deteriorating diets left many vulnerable to disease. The crisis not only affected people in urban areas but caused great social disruption in the farm community as well.
B. Farmers’ Holiday Association
The Farmers’ Holiday Association encouraged farmers to keep products off the market to drive up prices.
C. Bonus Expeditionary Force
Fifteen thousand World War I veterans marched on Washington to support immediate payment of cash bonuses, but the Senate refused.
D. Communists and Socialists
Communists led numerous protests against conditions in America, but they gained few supporters. Although the Socialist Party fared somewhat better, they won few election victories.
E. Hoover’s Response
At first, Hoover expressed hostility at calls for direct government relief. As conditions worsened, however, he supported several federal responses to the Depression.
F. Reconstruction Finance Corporation
The Reconstruction Finance Corporation aided businesses and state and local governments. The effort to stimulate the economy from the top enjoyed little success.
G. Hawley Smoot Tariff
Hoover approved a tariff increase, believing it would protect American farmers and manufacturers. Instead, the tariff further weakened the economy.
H. Hoover’s Traditionalism
Hoover continued to believe in a balanced budget, and he vetoed a variety of relief bills.

III. Franklin D. Roosevelt and the Election of 1932
A. Franklin D. Roosevelt
Franklin Roosevelt appealed to a broad spectrum of Americans, who admired the optimism that he maintained despite his paralysis from polio.
B. Eleanor Roosevelt
Although shy as a young woman, Eleanor matured into a dynamic and influential advocate of social justice.
C. Roosevelt’s “Brain Trust”
As Governor of New York beginning in 1928, Roosevelt responded vigorously to the Great Depression. Roosevelt and his advisers believed in government regulation of big business and in the need to create scarcity to save the economy.

D. 1932 Election Results
Democrats carried the election handily in 1932. Economic troubles continued during the four-month period between Roosevelt’s election in November and his inauguration in March.

IV. Launching the New Deal and Restoring Confidence
A. Launching the New Deal
Congress convened in an emergency session, beginning the massive legislative output of the First New Deal.
B. First Fireside Chat
On March 12, Roosevelt addressed the nation by radio, reassuring the people that banks were again safe.
C. Beer-Wine Revenue Act
A deflationary measure, the Beer-Wine Revenue Act legalized the sale of low-alcohol wines and beers and imposed taxes on those products.
D. Agricultural Adjustment Act
The AAA paid farmers to reduce production in exchange for government subsidies.
E. Other Relief Measures
The CCC served as a jobs corps for young men; the Federal Emergency Relief Act extended aid to state and local governments; and the Public Works Administration was established.
F. National Recovery Administration
The National Industrial Recovery Act was the industrial cornerstone for the New Deal. The wide ranging law revealed the New Deal’s faith in national economic planning.
G. TVA
The goal of the TVA was economic revitalization of the entire Tennessee River Valley.
H. End of the First Hundred Days
Congress approved fifteen major laws by the time it adjourned in June 1933.
I. Other Legislation
Additional legislation was passed in late 1933 and in the spring and summer of 1934, which benefited farmers, the unemployed, investors, homeowners, workers, and the environment.
J. Interest Group Democracy
The New Deal seemed to promise something for everybody. As the economy began to improve, the president enjoyed great popularity.

V. Opposition to the New Deal
A. Conservative Critics of the New Deal
With the arrival of partial economic recovery, many businesspeople and conservatives sharply criticized the New Deal.
B. Farmers and Laborers
Criticism was leveled against codes established by the NRA. The AAA also came under attack.
C. The Dust Bowl
A drought and poor farming practices caused an ecological disaster in the southern plains.
D. Demagogic Attacks
The most notable critics included Father Charles Coughlin, Dr. Francis E. Townsend, and Senator Huey Long.
E. Left Wing Critics
As the Depression continued, some Americans gravitated toward left wing parties.
F. Supreme Court Decisions Against the New Deal
The Supreme Court ruled against the New Deal in several cases.

VI. The Second New Deal and Roosevelt’s Second Term
A. Emergency Relief Appropriation Act
The Emergency Relief Appropriation Act allowed the president to establish massive public works programs for the unemployed.
B. The New Deal’s Cultural Programs
Cultural programs such as the Federal Theater Project and the Federal Writers Project provided employment for artists, musicians, writers, and actors.
C. Control of Business
Roosevelt decided that if business would not cooperate with government it should be “cut down to size” through antitrust suits and corporate taxes.
D. National Labor Relations Act
The Wagner Act granted workers the right to unionize and bargain collectively with management. It also created the NLRB.
E. Social Security Act
The Social Security Act established old age insurance for some Americans, a measure that acknowledged a greater social responsibility for the government.
F. Election of 1936 and the New Deal Coalition
Roosevelt won a landslide victory over Alf Landon. The New Deal appealed to farmers, urban voters, former Socialists, unions, African Americans, and southerners.
G. Roosevelt’s Court packing Plan
Roosevelt sought to gain control over the courts, but Congress refused to accept his Judiciary Reorganization Bill.
H. Recession of 1937 1939
The economy improved by 1937, but a recession ensued when Roosevelt ordered cutbacks in government spending.

VII. Industrial Workers and the Rise of the CIO
A. Rivalry Between Craft and Industrial Unions
Craft unions and industrial unions fought bitterly over control of the labor movement.
B. Sit Down Strikes
The United Auto Workers staged a successful sit down strike against GM, leading to wide use of the tactic.
C. Memorial Day Massacre
Violence at the Republic Steel Plant exemplified the intense animosity between labor and management.

VIII. Mixed Progress for People of Color
A. Hoover and African Americans
African Americans faced racism in the North as well as in the South. Under Hoover, the Republican Party followed discriminatory practices.
B. Scottsboro Trials
In 1931, eight African Americans were convicted of rape in Alabama, even though medical evidence revealed that the female witnesses had lied.
C. Organized Opposition
African American organizations emerged that actively fought for black rights.
D. Black Cabinet
In an unprecedented move, Roosevelt established a group of prominent AfricanAmerican advisers.
E. Racism in the New Deal
African Americans benefited from the New Deal, but the president never fully committed himself to civil rights. Some New Deal programs damaged African Americans.
F. March on Washington Movement
As a protest, many African Americans, under the leadership of A. Philip Randolph, threatened to march on Washington. Roosevelt responded with Executive Order No. 8802, which established the Fair Employment Practices Committee.
G. A New Deal for Native Americans
New Deal legislation aided Native Americans by, among other things, reversing parts of the Dawes Severalty Act.
H. Depression Hardships of Mexican Americans
The New Deal did little to help Mexican Americans.

IX. Women, Work, and the Great Depression
A. Women at Work Outside the Home
Despite public attitudes against it, more women entered the labor force.
B. Job Discrimination Against Married Women
A significant number of employers had policies against hiring married women.
C. Wives and Husbands Face Hard Times
More married women entered the labor force, but this did not improve the status of women in American society.
D. Women in the New Deal
The New Deal made a number of historic appointments, including the first female cabinet member. Still, the New Deal provided only limited advances for women.

X. The Election of 1940 and the Legacy of the New Deal
A. Wendell Wilkie
Roosevelt ran for a historic third term in 1940, and the New Deal coalition handily defeated Wendell Wilkie.
B. Roosevelt and the New Deal Assessed
Assessments of Roosevelt vary widely, but scholars agree that he profoundly transformed the presidency.
C. Origins of America’s Welfare System
Under the New Deal, the federal government assumed new and far reaching responsibilities.