The New Deal

The New Deal

• To understand the election of Franklin Delano Roosevelt, and the
policies he puts in place, called the “New Deal”, from early 1933
onward, you have to understand the depth of the 1929 crisis. Watch
the photographs used to illustrate this song, which was the anthem of
the Democratic Party in the 1932 election, which FDR won (while a
heavily Democratic Congress was also elected, enabling the laws he
was proposing): “Brother, can you spare a dime?” (1931)
• The lyrics of the song were by Yip Harburg, who would have to face
blacklisting under Joseph McCarthy two decades later. This is a later
version sung by Bing Crosby:
• https://www.youtube.com/watch?v=eih67rlGNhU
• And this is the original version (angrier), heard everywhere on the
radio in 1932: https://www.youtube.com/watch?v=4F4yT0KAMyo
 The election of 1932
• In 1930, FDR had been reelected governor of NY; when he got the
Democratic nomination, he promised a “new deal” for the American
people. He won the election by a landslide (22.8 million votes to 15.8
million for Hoover).
• The inauguration at that time was March 4. Read it out loud to hear
the pun: “March Fo(u)rth!”
• Inaugural speech: “We have nothing to fear but fear itself”; image of
“waging the war against the emergency (the economic crisis)” which
called for greater executive power.
• You can hear the audio (poor quality due to equipment then, but also
to pouring rain during the Inauguration Ceremony), and read the
transcript of the address http://historymatters.gmu.edu/d/5057/
 The First Hundred Days
• Immediately after the inauguration, FDR
declared a four-day bank holiday (all the banks
had to close, preventing more collapse).
• Summoned Congress for an emergency session
starting March 9. The laws voted during these
first hundred days were later called the “First
New Deal”.
• The first law was to prop up the banks that
were solvent and to prohibit the hoarding and
export of gold.
• On Sunday March 12, 1933, the president gave
the first of his “fireside chats” (FDR’s signature
political communication): 60 million people
heard him say they should regain confidence.
When the banks reopened the next day, people
were no longer taking out their savings but
bringing in what they had withdrawn in panic to
keep at home.
 The First New Deal and Agriculture
• The Agricultural Adjustment Act (AAA) was passed in May
1933. It regulated the price of corn, cotton, wheat, rice, hogs,
milk, that would provide the farmers with the purchasing
power they had before WWI. The federal government paid
the difference (subsidy to the farmer) between the 1933
market price (depressed price) and the pre-WWI price. The
subsidy would be paid by taxes on processed agricultural
commodities (the agribusiness products).
• The Farm Credit Act (June 1933) provided emergency loans
and medium-term loans to help farmers refinance their
mortagages and hold on to their farms.
 The main programs of the First New Deal
• The Civilian Conservation Corps (CCC) was set up to give
2.5 million young men (18-25 years old) jobs planting trees,
building bridges, dams, reservoirs, cleaning beaches, etc…
(combining infrastructure development, environmental
cleanup and sustainable development, and massive job
creation). This was proposed by FDR on March 21st and
voted by Congress within weeks, effective immediately.
• The National Industrial Recovery Act (NIRA) also provided
massive employment through the Public Works
Administration (PWA), passed by Congress in June 1933: a
bit more than 3 billion dollars to put the unemployed to
work building roads, sewage and water systems, public
buildings, ships for the Navy, etc.
• Under the NIRA, the federal government could
regulate industrial production through the National
Recovery Administration. Section 7 of the NIRA
guaranteed the right of workers to unionize and to
bargain collectively.
• The Federal Securities Act and the Banking Act of
1933 took the dollar away from the gold standard,
and gave a federal guarantee for bank deposits. The
first measure allowed the government to create
currency, reinjecting liquidities into the system
(“faire marcher la planche à billets”), and the second
reinforced confidence in the banking system.
 The Tennessee Valley Authority (TVA)

• Although the intent of this project was to

develop poor southern states from Kentucky
around the Tennessee Valley by building
dams, preventing floods, and bringing cheap
hydro-electricity, as well as providing jobs for
the jobless from Mississippi to West Virginia,
the (unforeseeable then) long-term effect of
the TVA was also to destroy much of the
environment around the river.
 Results of the First New Deal

• Unemployment fell from 13 million in 1933 to 9

million in 1936.
• Farm income rose from $3 billion in 1933 to almost
double in 1935.
• Wages for industrial workers rose, almost doubling
from 1933 to 1937.
• FDR and the New Deal were hugely popular. In the
1934 midterm elections, the Democratic Party won
an additional ten seats in the House and in the
Senate, something that almost NEVER happens
(midterm elections almost always see a gain for the
other party…)
 Radical left opposition to the New Deal
• But there was very strong opposition on part of the radical left: industrial wages were still
inferior to pre-1929 levels; it was shocking to be destroying crops to raise agricultural prices
when millions in the USA were hungry; it was too timid a “new deal” that left capitalism in
place. For African-American “tenant” farmers, when the landowner received AAA subsidies,
he simply fired them: 30% of all sharecroppers were evicted from farms in the South.
• Poor white tenant farmers and/or small landowners were also being evicted from the Dust
Bowl (Colorado, New Mexico, Texas, Kansas, Oklahoma, and Arkansas) and became migrants
on the roads to California. The Dust Bowl had been created by the industrialization of
agriculture, which combined with drought, meant that the earth flew in dust storms. See
Interstellar (Christopher Nolan, 2014) for a contemporary reimagining of this in the context of
climate change). Having gone into debt to mechanize their farms, family farms were
foreclosed by banks when they could not sell their crops at all (or without any profit).
• One very successful populist movement: Huey Long, former governor of Louisiana (1928-
1932), and US Senator who originally supported the New Deal started to think that FDR had
caved in to big business. He started the Share Our Wealth Society, and advocated seizing all
incomes higher than $1 million and all inheritances of more than $5 million. He had 7 million
followers and was ready to run for the presidency when he was assassinated in September
1935.
• Other movements were Wisconsin Senator’s Robert La Follette’s Progressive Party, and
during this period, the rise of the American Communist Party, infiltrated by the FBI from the
very start (read more on J. Edgar Hoover).
 Right-wing opposition to the New Deal
• There was radical right (extreme right)
opposition to the New Deal too, and
someone like Father Coughlin who had a very
successful weekly radio show was a
prototypical American antisemitic fascist,
trying to mobilize pauperized whites in
particular. The KKK was also very active.
• Republicans and corporate owners generally
hated the New Deal for implementing
government regulation of business, writing
unions into the law (NIRA), raising taxes on
big corporations to finance massive public
works and the creation of millions of jobs.
• The US Supreme Court, acting on their
behalf, invalidated the NIRA in 1935, and the
AAA in early 1936, in the name of the 10 th
amendment.
 The Second New Deal
• FDR came right back early 1935, denouncing selfish
business interests, and creating an even more
massive program to cut joblessness: the WPA
(Works Progress Administration), that built 650,000
miles of highways and roads, 8000 parks, 125,000
public buildings, airports, etc.
• This employed more than 8.5 million people.
• Part of it was the Federal Writers Project, that hired
authors like Steinbeck to write local histories, that
created archives of the oral histories of the last living
survivors of slavery (read Lay My Burden Down).
• One of the New Deal programs also hired
photographers like Dorothea Lange and Walker
Evans to document the state of the US population
during the Depression.
• This video will show you some of Dorothea Lange’s
work while emphasizing artists’ commitment during
the Depression:
• https://www.youtube.com/watch?v=pHN7d9C4b0A
 The Second Hundred Days of the New Deal (summer 1935)

1. The Wagner Act or National Labor Relations Act granted the right of
workers to unionize and bargain collectively. It also set up a National
Labor Relations Board to penalize unfair labor practices.
2. The Social Security Act (1935) established old-age insurance for workers
who paid Social Security taxes out of their wages. This did not cover
domestic or agricultural workers, thus excluding the vast majority of
African-American workers in the USA, nor restaurant and hospital
workers, thus also excluding a great many women workers.
• It also established Aid to Families with Dependent Children (AFDC, or
welfare for poor women with children); help for the disabled;
unemployment insurance.
• There is no HEALTH insurance in this act, it is only what you would call the
“branches retraite et chômage” of your “Sécurité Sociale”.
3. The Revenue Act of 1935: taxes wealth, high incomes, etc.
 Landslide victory in the election of 1936

• Won almost 28 million votes to the Republican’s slightly less than 17 million.
• New Deal coalition of urban Americans, organized labor, the white South, and most northern Blacks, who
could benefit from the New Deal as industrial workers. The White House would stay democratic for most
of the next thirty years.
• To guarantee that the US Supreme Court would not invalidate the Second New Deal, FDR floated a “court-
packing” scheme; he got Congress to examine a bill adding up to 6 Justices on the Court, and with a
provision that Justices who did not retire before they were 71 would have another Justice named
alongside them.
• This was seen as a threat to democracy (trampling the checks and balances system). See FDR’s “three-
horse-cart” speech on this (March 9, 1937 fireside chat):
•  Last Thursday I described the American form of Government as a three horse team provided by the
Constitution to the American people so that their field might be plowed. The three horses are, of course,
the three branches of government—the Congress, the Executive and the Courts. Two of the horses are
pulling in unison today; the third is not. Those who have intimated that the President of the United States
is trying to drive that team, overlook the simple fact that the President, as Chief Executive, is himself one
of the three horses. It is the American people themselves who are in the driver's seat. It is the American
people themselves who want the furrow plowed.It is the American people themselves who expect the
third horse to pull in unison with the other two. 
• http://www.presidency.ucsb.edu/ws/?pid=15381
 Last measures of the New Deal

• FDR mistakenly tried to balance the budget again in 1937,

which immediately created higher unemployment, decreased
consumption, etc… The last measures of the New Deal return to
the logics of public spending to sustain capitalism (Keynesian
economics).
• National Housing Act (1937): building housing for low-income
families.
• A new Agricultural Adjustment Act (1938) for agricultural prices
• The Fair Labor Standards Act (1938) which forbade labor for
those under 16, and established a minimum wage and 40-hour
working week for industrial workers (in fact, only for unionized
industrial workers, others not having the power to demand it).
 Fate of other minorities under the New Deal
• For Native Americans, a stop to the dismantling and selling of
reservation land through the Indian Reorganization Act of 1934. Under
Republican Administrations, “termination” of reservations will resume.
• For Mexican-Americans, the New Deal is not a good period. A great
many were either willingly or unwillingly sent back to Mexico. The
number of Mexicans living in the US drops to 60% of what it was
between 1930 and 1940.
• Women worked during the Depression, and married women
increasingly; but there was no equal pay and it was legal to have a
lower minimum wage for women. Despite Eleanor Roosevelt’s
important role as First Lady, the New Deal is markedly not feminist.
Women could be barred from public jobs easily (between 1932 and
1937 only one person per family could work in public service, for
instance).
 Success or Failure?
• The New Deal did not manage to end unemployment: still affects 19% of the
population in 1939. Only the war economy will end unemployment (in 1944,
only 1% unemployment).
What does this tell you about the connection between capitalism and war?
• If there is not massive redistribution of wealth through revolution or through
reformist policies (which the New Deal did not achieve, since no wealth was
redistributed to people of color, women, or poor whites who were not
owners of property), the way out of a crisis seems, unavoidably, war.
• The book I have adapted this chapter from, A People and A Nation, edition
1997, optimistically concluded “The Great Depression was the last of its
kind. Since the New Deal, thanks to unemployment compensation, Social
Security (pensions) and other measures, the US has not reexperienced the
national nightmare.” (page 498)
• But that was before 2007… which is the worse crisis since 1929, a crisis we
are still living through now.