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The Great Depression (1920–1940)

History SparkNotes

The Second New Deal: 1935–1938

The First New Deal: 1933–1934

The Demise of the New Deal: 1935–1939

Events
1934 Indian Reorganization Act (IRA)
1935 Works Progress Administration (WPA) National Labor Relations Act (Wagner Act) Social Security Act
1936 Soil Conservation and Domestic Allotment Act Roosevelt is reelected
1937 United States Housing Authority (USHA)
1938 Second Agricultural Adjustment Act Fair Labor Standards Act
Key People
Franklin Delano Roosevelt -  32nd U.S. president; reelected in 1936; brought Second New Deal programs and policy through Congress
Huey P. Long -  Louisiana senator who criticized New Deal for not doing enough to help American people; was assassinated before he could seriously challenge Roosevelt
Father Charles Coughlin -  Catholic priest in Michigan and outspoken New Deal critic; blamed Crash of 1929 on wealthy financiers and Jews; wanted federal government to take over entire banking system
Alfred M. Landon -  Kansas governor who ran against FDR on anti–New Deal Republican ticket in election of 1936

The Second New Deal

The Second New Deal—the legislation that Roosevelt and Congress passed between 1935 and 1938—was strikingly different from the First New Deal in certain ways. Perhaps most important, the Second New Deal legislation relied more heavily on the Keynesian style of deficit spending than the First New Deal did. Roosevelt altered his policy making in part because of complaints from critics and in part because, by 1935, it was clear that more Americans still needed federal relief assistance. Roosevelt thus aimed approximately half the Second New Deal programs and policies at long-term reform.

New Deal Critics

Predictably, Roosevelt’s New Deal came under attack from the right, from Republicans, conservative Democrats, bankers, and Wall Street financiers who claimed that it doled out too many federal handouts. Many of these critics also feared that the policy and programs involved were a dangerous step toward socialism and the destruction of the American capitalist system. Such misgivings were understandable given the political atmosphere in the 1930s, as communism was becoming a more imminent threat. In fact, Soviet agents in the United States went so far as to launch a “popular front” campaign to actively support the president. Moreover, an unprecedented number of people joined the American Communist Party during the decade.

Perhaps more surprising, the New Deal also came under attack from the far left. Many socialist activists denounced the New Deal because they believed that it was too conservative and that it did not provide enough relief and assistance. Over the years, many historians have tended to agree with this argument. Several have argued that the Great Depression would not have been so devastating for so long had Roosevelt handed more federal money out to a greater number of Americans.

Coughlin and Long

One of the most vocal of Roosevelt’s critics was Father Charles Coughlin. A Catholic priest from Michigan, Coughlin began broadcasting a weekly radio show in 1930 that outwardly criticized the New Deal. Within a few short years, Coughlin had amassed a following of 40 million listeners who agreed with his anti–New Deal opinions. He blamed the Great Depression on Wall Street, crooked financiers, and Jews and campaigned for the nationalization of the entire American banking system.

Senator Huey P. Long of Louisiana was another major thorn in Roosevelt’s side, albeit from the left rather than the right. Long was among those who believed that the New Deal was not doing enough to help Americans. Believing that income inequality had caused the depression, he promoted his own “Share the Wealth” program (sometimes referred to as the “Every Man a King” program), which would levy enormous taxes on the rich so that every American family could earn at least $5,000 a year. Long enjoyed enormous popularity during the first few years of Roosevelt’s first term but was assassinated in 1935.

The Works Progress Administration

The first major legislation that Roosevelt and Congress passed in the Second New Deal—in response to the critics—was the Works Progress Administration (WPA). Created in 1935, the WPA was an effort to appease the “Longites” who clamored for more direct assistance from the federal government. The WPA was similar to the Public Works Administration of the First New Deal, this time hiring nearly 10 million Americans to construct new public buildings, roads, and bridges. Congress dumped over $10 billion into the projects in just under a decade.

The Social Security Act

Congress also passed the Social Security Act in 1935, creating a federal retiree pension system for many workers, funded by a double tax on every working American’s paycheck. The act also created an unemployment insurance plan to provide temporary assistance to those who were out of work, while also making funds available to the blind and physically disabled. Furthermore, Congress agreed to match federal dollars for every state dollar allocated to workers’ compensation funds.

Despite its vocal critics, the Social Security Act had an enormous impact on Great Depression–era Americans and future generations. It brought the most sweeping change of the Second New Deal legislation as it not only gave income to some of the most destitute in society but also forever changed the way Americans thought about work and retirement. The paycheck taxes were advertised as a personal retirement savings plan even though those tax dollars were actually being redistributed as soon as they were collected. Nevertheless, retirement came to be seen as something every worker could enjoy. Still, many criticized the Social Security system for not extending pensions to enough people, particularly unskilled black and women laborers.

Legislation for Farmers and Homeowners

The Second New Deal provided even more assistance to farmers. After the Supreme Court declared the Agricultural Adjustment Administration unconstitutional in 1936, Democrats immediately responded with the passage of the Soil Conservation and Domestic Allotment Act that same year. This act continued to subsidize farmers to curb overproduction and also paid them either to plant soil-enriching crops (instead of wheat) or to not grow any crops at all. In 1938, Congress also created a Second Agricultural Adjustment Administration to reduce crop acreage. Meanwhile, the United States Housing Authority (USHA), created by Congress in 1937, gave assistance to American urbanites, building new houses for over half a million Americans.

The Indian Reorganization Act

Native Americans also received federal assistance during Roosevelt’s second term. In 1934, Congress passed the Indian Reorganization Act (IRA) to promote tribal organization and give federal recognition to tribal governments. The IRA also reversed the 1887 Dawes Severalty Act, changing the relationship between various tribes and the federal government. The Dawes Act had weakened tribal affiliations because it stated that only individual Native Americans—not tribal councils—could own land.

Despite Roosevelt’s efforts to alleviate Native American suffering, however, the IRA was only partially successful. Some tribes had difficulty understanding the terms of the new treaty, while others, such as the Navajo in the Southwest, flat-out rejected it. Many tribes saw more immediate benefit from relief programs such as the Civilian Conservation Corps, Public Works Administration, and Works Progress Administration, in which nearly 100,000 young Native American men participated.

Labor Reforms

These labor reforms had a lasting effect on America. The Wagner Act paved the way for more effective collective bargaining and striking, and within a year, fledgling labor unions had I-line workers in the General Motors automobile factory, for example, used the Wagner Act to initiate a series of sit-down strikes, in which workers would sit at their stations and refuse to leave, preventing the company from hiring new, non-union “scab” workers to fill in for the strikers. By 1937, General Motors had recognized its workers’ right to organize.

The Election of 1936

With the 1936 presidential election on the horizon, Republicans stood virtually no chance against Roosevelt and his party. Democrats’ efforts to provide relief, recovery, and reform were highly visible. Roosevelt had especially strong support among blacks (voting as Democrats in large numbers for the first time), unskilled laborers, and residents of the West and South. The Republican nominee was Kansas governor Alfred M. Landon, a moderate who campaigned on an anti–New Deal platform. Not surprisingly, Roosevelt won a landslide victory, with 523 electoral votes to Landon’s 8. Roosevelt’s resounding victory proved that Americans widely supported the New Deal.

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