Derby counts WPA workers as employed; Lebergott as unemployed
source: Historical Statistics US series D-86; Smiley 1983

Relief Statistics

Families on Relief 1936-41


   
In Depth
See Also

New Deal

The New Deal is the name given to the series of programs implemented between 1933-37 under President Franklin D. Roosevelt Franklin D. Roosevelt

Franklin Delano Roosevelt served as the 32nd President of the United States [i] and was elected to four ... 

 with the goal of relief, recovery and reform of the United States economy during the Great Depression Great Depression in the United States

The Great Depression [i] was a period where economic activity was stagnant and at an all time low in many coun ... 

. The name was derived to differentiate it from President Theodore Roosevelt Theodore Roosevelt

Theodore Roosevelt, Jr. , also known as T.R. and to the public as Teddy, was the 26th President of the United States [i] ... 

's Square Deal. Dozens of alphabet agencies Alphabet agencies

In 1933 President Franklin D. Roosevelt [i] launched his New Deal [i] to deal with the Great Depression [i] ... 

 were created as a result. Historians distinguish the "First New Deal" of 1933 that had something for almost every group, and the "Second New Deal" that introduced an element of class conflict.

Discussions

  Discussion Features

   Ask a question about 'New Deal'

   Start a new discussion about 'New Deal'

   Answer questions about 'New Deal'

   'New Deal' discussion forum

Timeline

1933   Great Depression: The U.S. Congress United States Congress

The United States Congress is the legislature [i] of the United States federal government [i]. ... 

 begins its first 100 days of enacting New Deal legislation.

1933   New Deal: President Franklin Delano Roosevelt Franklin D. Roosevelt

Franklin Delano Roosevelt served as the 32nd President of the United States [i] and was elected to four ... 

 signs an act creating the Tennessee Valley Authority Tennessee Valley Authority

The Tennessee Valley Authority is a federally-owned corporation in the United States [i] that was creat ... 

.

1933   Great Depression Great Depression

The Great Depression was a worldwide economic downturn [i] which started in 1929 and lasting ... 

: New Deal - US President Franklin D. Roosevelt Franklin D. Roosevelt

Franklin Delano Roosevelt served as the 32nd President of the United States [i] and was elected to four ... 

 unveils the Civil Works Administration, an organization designed to create jobs for more than 4 million of the unemployed.

1934   New Deal: U.S. President Franklin D. Roosevelt Franklin D. Roosevelt

Franklin Delano Roosevelt served as the 32nd President of the United States [i] and was elected to four ... 

 signs the Securities Exchange Act into law, establishing the U.S. Securities and Exchange Commission.

1935   New Deal: Executive Order 7034 creates the Works Progress Administration Works Progress Administration

The Works Progress Administration , was created in May 1935 by Presidential order .... 

 (WPA).

1937   New Deal: The United States Senate United States Senate

he United States Senate is one of the two chambers of the Congress of the United States [i], the other b ... 

 votes down President Franklin D. Roosevelt Franklin D. Roosevelt

Franklin Delano Roosevelt served as the 32nd President of the United States [i] and was elected to four ... 

's proposal to add more justices to the Supreme Court of the United States Supreme Court of the United States

The Supreme Court of the United States is the highest judicial body [i] in the United States [i] ... 

.


Quotations

Fascism was really the basis for the New Deal. It was Mussolini's success in Italy, with his government-directed economy, that led the early New Dealers to say But Mussolini keeps the trains running on time.

Ronald Reagan in May 17, 1976 Time Magazine.

       More Quotes >>


Encyclopedia

The New Deal is the name given to the series of programs implemented between 1933-37 under President Franklin D. Roosevelt Franklin D. Roosevelt

Franklin Delano Roosevelt served as the 32nd President of the United States [i] and was elected to four... 

 with the goal of relief, recovery and reform of the United States economy during the Great Depression Great Depression in the United States

The Great Depression [i] was a period where economic activity was stagnant and at an all time low in many coun... 

. The name was derived to differentiate it from President Theodore Roosevelt Theodore Roosevelt

Theodore Roosevelt, Jr. , also known as T.R. and to the public as Teddy, was the 26th President of the United States [i] ... 

's Square Deal. Dozens of alphabet agencies Alphabet agencies

In 1933 President Franklin D. Roosevelt [i] launched his New Deal [i] to deal with the
Great Depression [i] ... 

 were created as a result. Historians distinguish the "First New Deal" of 1933 that had something for almost every group, and the "Second New Deal" that introduced an element of class conflict. The opponents of the New Deal, complaining of the cost and the shift of power to Washington, stopped its expansion after 1937, and abolished many of its programs by 1943. The National Recovery Administration National Recovery Administration

As part of the New Deal [i] in the United States [i], the National Recovery Administration was developed ... 

 was ruled unconstitutional by the Supreme Court. The main programs still important today are Social Security and the Securities and Exchange Commission, the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation is a [i] ... 

 , as well as the Tennessee Valley Authority Tennessee Valley Authority

The Tennessee Valley Authority is a federally-owned corporation in the United States [i] that was creat ... 

 .

Relief, recovery, and reform

The New Deal had three components: direct relief, economic recovery, and financial reform; these were also called the 'Three Rs'.

Relief was the immediate effort to help the one-third of the population that was hardest hit by the depression. Roosevelt expanded Hoover's Federal Emergency Relief Administration  work relief program, and added the Civilian Conservation Corps Civilian Conservation Corps

The Civilian Conservation Corps was a work relief program for young men established in March 1933 durin... 

 , Public Works Administration , and the Works Progress Administration Works Progress Administration

The Works Progress Administration , was created in May 1935 by Presidential order .... 

 . In 1935 the social security and unemployment insurance programs were added. Separate programs were set up for relief in rural America, such as the Resettlement Administration  and Farm Security Administration Farm Security Administration

... 

 . These work relief programs have been praised by most economists in retrospect, including Milton Friedman Milton Friedman

[i], known for his work on [[macroeconomics]... 

, who called them "appropriate responses to the critical situation."

Recovery was the effort in numerous programs to restore the economy to normal health. By most economic indicators this was achieved by 1937--except for unemployment, which remained stubbornly high until World War II began.

Reform was based on the assumption that the depression was caused by the inherent instability of the market and that government intervention was necessary to rationalize and stabilize the economy, and to balance the interests of farmers, business and labor. It included the National Recovery Administration National Recovery Administration

As part of the New Deal [i] in the United States [i], the National Recovery Administration was developed ... 

 , regulation of Wall Street Wall Street

Wall Street is the name of a narrow street [i] in lower Manhattan [i] in New York City [i], running eas... 

 , the Agricultural Adjustment Act farm programs , insurance of bank deposits and the Wagner Act National Labor Relations Act

The National Labor Relations Act is a 1935 [i] United States federal law [i] that protects the rights o ... 

 encouraging labor unions . Despite urgings by some New Dealers, there was no major anti-trust program. Roosevelt said that he opposed socialism , and only one major program, the Tennessee Valley Authority Tennessee Valley Authority

The Tennessee Valley Authority is a federally-owned corporation in the United States [i] that was creat ... 

 , involved government ownership of the means of production. Milton Friedman is typical of a majority of economists who have criticized the NRA and AAA for setting prices and wages, which distorted the market.

Two old words now took on new meaning. "Liberal" no longer referred to classical liberalism Classical liberalism

Classical liberalism is a term used to describe the following:
... 

 but now meant a supporter of the New Deal; conservative meant an opponent. Whether the New Deal was successful in achieving the three Rs is usually approached not as a historical problem but as a current debate over whether the program should be a model for government action today. Liberals continue to battle conservatives. The term "New Deal" is also used to describe the liberal New Deal Coalition that Roosevelt created to support his programs, including the Democratic party, big city machines, labor unions, Catholic and Jewish minorities, African Americans, farmers, and most Southern whites.

By 1934, the Supreme Court began declaring significant parts of the New Deal unconstitutional. This led Roosevelt to propose the Court-packing Bill in 1937. Although the bill failed, the Supreme Court started upholding New Deal laws. By 1942, the Supreme Court had almost completely abandoned its "judicial activism" of striking down congressional laws, as accused by New Deal supporters. The Supreme Court ruled in Wickard v. Filburn Wickard v. Filburn

Wickard v. Filburn, 317 U.S. 111 [i], is a United States Supreme Court [i] decision in... 

that the Commerce Clause covered almost all such regulation allowing the necessary expansion of federal power to make the New Deal "constitutional".

The Origins of the New Deal

On 29 October,1929, the crash of the U.S. stock market New York Stock Exchange

The New York Stock Exchange , nicknamed the "Big Board," is a New York City [i]-based stock exchange [i] ... 

—known as Black Thursday Wall Street Crash of 1929

The Wall Street Crash of 1929, also called the Great Crash or the Crash of '29, was the stock-market crash [i] ... 

—reflected a trend of a worldwide economic crisis. In 1929–1933, unemployment in the U.S. increased from the original 4% to 25%, manufacturing output collapsed by approximately a third. Prices everywhere fell, making the burden of the repayments of debts much harder. Heavy industry, mining, lumbering and agriculture felt its impact. The impact was much less severe in white collar and service sectors, but every city and state was hit hard.

Upon accepting the Democratic History of the United States Democratic Party

The History of the Democratic Party [i] is an account of a continuously supported political party [i] ... 

 nomination for president, Roosevelt promised "a new deal for the American people."
Roosevelt entered office with no single ideology or plan for dealing with the depression. He was willing to try anything, and, indeed, in the "First New Deal" virtually every organized group gained much of what they demanded. This "First New Deal" thus was self-contradictory, pragmatic, and experimental. The economy eventually recovered from the deep pit of 1932, and started heading upward again until 1937, when the Recession of 1937 sent the economy back to 1934 levels of unemployment. Whether the New Deal was responsible for the recovery, or whether it even slowed the recovery, is a subject of debate.

The New Deal drew from many different sources over the previous half-century. Some New Dealers, led by Thurman Arnold, went back to the anti-monopoly tradition in the Democratic party that stretched back a century. Monopoly was bad for America, Louis Brandeis kept insisting, because it produced waste and inefficiency. However the anti-monopoly group never had a major impact on New Deal policy.

From the Wilson administration, other New Dealers, such as Hugh Johnson Hugh Samuel Johnson

Hugh Samuel Johnson American [i] soldier and National Recovery Administration [i] official ... 

 of the NRA National Recovery Administration

As part of the New Deal [i] in the United States [i], the National Recovery Administration was developed ... 

, were shaped by efforts to mobilize the economy for World War I World War I

World War I, also known as the First World War, the Great War and "The War to End All War... 

, They brought ideas and experience from the government controls and spending of 1917-18.

And from the policy experiments of the 1920s, New Dealers picked up ideas from efforts to harmonize the economy by creating cooperative relationships among its constituent elements. Roosevelt brought together a Brain Trust of academic advisers to assist in his recovery efforts.

Historian, Clarence B. Carson says:

At this remove in time from the early days of the New Deal, it is difficult to recapture, even in imagination, the heady enthusiasm among a goodly number of intellectuals for a government planned economy. So far as can now be told, they believed that a bright new day was dawning, that national planning would result in an organically integrated economy in which everyone would joyfully work for the common good, and that American society would be freed at last from those antagonisms arising, as General Hugh Johnson put it, from “the murderous doctrine of savage and wolfish individualism, looking to dog-eat-dog and devil take the hindmost.


The New Deal faced some very vocal conservative opposition. The first organized opposition in 1934 came from the American Liberty League led by Democrats such as 1924 and 1928 presidential candidates John W. Davis John W. Davis

John William Davis was an American politician [i] and lawyer.... 

 and Al Smith Al Smith

Alfred Emanuel "Al" Smith was Governor of New York [i], and Democratic U.S. presidential candidate in 1928 [i]... 

. There was also a large loose grouping of opponents of the New Deal who have come to be known as the Old Right which included politicians, intellectuals, writers, and newspaper editors of various philosophical persuasions including classical liberals Classical liberalism

Classical liberalism is a term used to describe the following:
... 

, conservatives, Democrats and Republicans.

World Comparisons


Britain United Kingdom

The United Kingdom of Great Britain and Northern Ireland is a country and sovereign state [i] tha ... 

, led by the Labour party, was unable to adopt major programs to stop its depression. That led to collapse of Labour and replacement in 1931 by a National coalition . Partially as a result there was no equivalent "New Deal" in Britain. In Nazi Germany Nazi Germany

Nazi Germany, or the Third Reich, refers to Germany in the years 1933 to 1945, when it was governe... 

, economic recovery was pursued through wage controls, suppression of unions, and spending programs such as public works; large-scale rearmament came later in the 1930s. In Mussolini Benito Mussolini

Benito Amilcare Andrea Mussolini was the Prime-Minister and fascist [i] dictator of Italy from... 

's Italy, the economic controls of his corporate state were tightened. In the Soviet Union Soviet Union

The Union of Soviet Socialist Republics , more commonly known as the Soviet Union, was a Communist state [i] ... 

, Stalin continued his massive program of economic planning and state ownership. The apparent failure of capitalism led some Americans to flirt with communist or fascist ideology.

The First Hundred Days



Having won a decisive victory in the 1932 presidential election United States presidential election, 1932

The U.S. presidential election of 1932 took place as the effects of the 1929 [i] Stock Market Crash and ... 

, and with his party having decisively swept Congressional elections across the nation, the new president entered office with unprecedented political capital. Many Congressmen had their favorite projects, like the Tennessee Valley Authority Tennessee Valley Authority

The Tennessee Valley Authority is a federally-owned corporation in the United States [i] that was creat ... 

 plan of Senator George Norris George William Norris

George William Norris was a U.S. [i] leader of progressive [i] and liberal [i] ... 

, which the administration adopted and treated as its own. Finally there were numerous Hoover plans that he could not get passed but were ready to go, such as the emergency banking laws. Americans of all political persuasions were demanding immediate action, and Roosevelt responded with a remarkable series of new programs in the “first hundred days” of the administration.

The "Bank Holiday" and the Emergency Banking Act

Roosevelt hurled the blame at businessmen and bankers with religious rhetoric: "Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men....The money changers have fled from their high seats in the temple of our civilization."

By March 4 all banks in the country were virtually closed by their governors, and Roosevelt kept them all closed unctil he could pass new legislation. On March 9, Roosevelt sent to Congress the Emergency Banking Act Emergency Banking Act

The Emergency Banking Act was an act of the United States Congress [i] spearheaded by President Franklin D. Roosevelt [i] ... 

, drafted in large part by Hoover's administration; the act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System Federal Reserve System

The Federal Reserve System is the central banking system [i] of the United States [i].
... 

 reopened within the next three days. Billions of dollars in "hoarded" currency and gold flowed back into them within a month, thus stabilizing the banking system. In all of 1933 4,004 small local banks were closed and were merged into larger banks. Economists Milton Friedman Milton Friedman

[i], known for his work on [[macroeconomics]... 

 and Anna Schwartz  said, "The 'cure' came close to being worse than the disease." To avoid future "cures" the Congress created the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation is a [i] ... 

 in June, which insured deposits. In practice the day of the bank run was virtually ended by the FDIC. Roosevelt issued Executive Order 6102 requiring that by next January all private gold be turned in for paper money at face value. After January 1934 he then devalued the international value of the dollar by 40 percent in terms of gold and refused to honor gold obligations on any paper dollars or bonds redeemed. The Supreme Court, though with five justices condemning the repudiation of the obligation, ruled on principle that the bondholders did not suffer a loss in purchasing power when the price of gold was adjusted upward relative to paper dollars and therefore could not demand gold. However, Roosevelt had prepared a radio address beforehand to announce his refusal to enforce the decision if the Court were to rule in favor of the bondholders.

The economy had hit rock bottom in March 1933 and now it started to expand. As historian Broadus Mitchell notes, "Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically." Economic indicators show the economy reached nadir in the first days of March, then began a steady, sharp upward recovery that persisted until 1937 when it was hit with the Recession of 1937, creating a depression within a depression. Thus the Federal Reserve Index of Industrial Production hit its lowest point of 52.8 in July 1932 and was practically unchanged at 54.3 in March 1933; however by July 1933, it reached 85.5, a dramatic rebound of 57% in four months

The Economy Act

The Economy Act, drafted by Budget Director Lewis Douglas was passed on March 20, 1933. The act proposed to balance the "regular" federal budget by cutting the salaries of government employees and cutting pensions to veterans by 40%. It saved $500 million a year and reassured deficit hawks like Douglas that the new president was fiscally conservative. Roosevelt argued there were two budgets: the "regular" federal budget which he balanced, and the "emergency budget" needed to defeat the depression. It was imbalanced on a temporary basis.

Roosevelt thus reflected the classical Democratic party position, dating back to Andrew Jackson Andrew Jackson

Andrew Jackson was the seventh President of the United States [i] , first governor [i] ... 

 and the Jacksonian Democrat days. Roosevelt was initially in favor of balancing the budget but he would soon find himself using deficit spending in order to fund the numerous programs he created. Douglas, however, rejecting the distinction between a regular and emergency budget, resigned in 1934, and became an outspoken critic of the New Deal. Roosevelt strenuously opposed the Bonus Bill that would give World War I veterans a cash bonus. Finally, Congress passed it over his veto in 1936, and the Treasury distributed $1.5 billion in cash to 4 million veterans just before the 1936 election.

At least until John Kennedy John F. Kennedy

John Fitzgerald Kennedy (May 29, 1917 – November 22, 1963), also referred to as John F.... 

 in 1960 New Dealers never fully recognized the Keynesian argument for government spending as a vehicle for recovery. Most economists of the era, along with Henry Morgenthau Henry Morgenthau, Jr.

[i]
... 

 at the Treasury, rejected Keynesian solutions and favored balanced budgets.

The Farm Programs

Roosevelt was keenly interested in farm issues, and emphasized that true prosperity would not return until farming was prosperous. Many different programs were directed at farmers. The first hundred days produced a federal program to protect commercial farmers from the uncertainties of the depression through subsidies and production controls. This program began with the Agricultural Adjustment Act, creating the Agricultural Adjustment Administration , which Congress passed in May 1933. The Act reflected the demands of leaders of major farm organizations, especially the Farm Bureau, and reflected debates among Roosevelt's farm advisers such as Henry A. Wallace, Rexford Tugwell, and George Peek. The AAA implemented a provision for crop reductions known as the "domestic allotment" system of the act. Under this system producers of corn, cotton, dairy products, hogs, rice, tobacco, and wheat would decide on production limits for their crops. The AAA would then pay land owners subsidies for leaving some of their land idle with funds provided by a new tax on food processing. Farm prices were to be subsidized up to the point of parity. Some crops were ordered to be destroyed and some livestock slaughtered to maintain prices. The idea was that the less produced, the higher the price, and the farmer would benefit. Farm incomes increased significantly in the first three years of the New Deal. However, this was at the expense of consumers who had to pay more. The AAA established an important and long-lasting federal role in the planning on the entire agricultural sector of the economy. The AAA did not provide for any sharecroppers Sharecropping

Sharecropping is a system of agricultural production [i] where a landowner allows a sharecrop ... 

 or tenants or farm laborers who might become unemployed, but there were other New Deal programs especially for them.

Roosevelt, Eleanor Roosevelt Eleanor Roosevelt

[i]
Anna Eleanor Roosevelt was an American [i] political leader who use ... 

, and many New Dealers were highly sympathetic to the marginal farmers who lived on the land in severe poverty, especially in the South. Major programs addressed to their needs included the Resettlement Administration , the Farm Security Administration Farm Security Administration

... 

 , the Rural Electrification Administration , the Tennessee Valley Authority Tennessee Valley Authority

The Tennessee Valley Authority is a federally-owned corporation in the United States [i] that was creat ... 

  and rural welfare projects sponsored by the WPA, NYA, Forest Service and CCC, including school lunches, building new schools, opening roads in remote areas, reforestation, and purchase of marginal lands to enlarge national forests.

The AAA was the first program on such a scale on behalf of the troubled agricultural economy, and it established an important and long-lasting federal role in the planning on the entire agricultural sector of the economy.

In 1936, the Supreme Court declared the AAA to be unconstitutional, stating that "a statutory plan to regulate and control agricultural production, [is] a matter beyond the powers delegated to the federal government..." The AAA was replaced by a similar program that did win Court approval. Federal regulation of agricultural production has been modified many times since then, but together with large subsidies it is still in effect in 2006.

Relief

The administration launched a series of relief measures and welfare agencies to give meaningful jobs to the unemployed, especially unskilled laborers. The largest programs were the Civilian Conservation Corps Civilian Conservation Corps

The Civilian Conservation Corps was a work relief program for young men established in March 1933 durin... 

 , the Civil Works Administration , the Federal Emergency Relief Administration , the National Youth Administration , and above all, the Works Progress Administration Works Progress Administration

The Works Progress Administration , was created in May 1935 by Presidential order .... 

 . The WPA employed a maximum of 3.3 million in November 1938. However, even at this level of WPA employment, unemployment was still 12.5% in 1938 according to figures from Micheal Darby. All these emergency programs were terminated in 1942-43, when unemployment had vanished due to World War II related employment offers.



In 1933 the administration launched the Tennessee Valley Authority Tennessee Valley Authority

The Tennessee Valley Authority is a federally-owned corporation in the United States [i] that was creat ... 

, a project involving dam construction planning on an unprecedented scale in order to curb flooding, generate electricity, and modernize the very poor farms in the Tennessee Valley Tennessee Valley

The Tennessee Valley is a large valley created by the Tennessee River [i] and is within much of the U.S. state [i] ... 

 region of the Southern United States Southern United States

The Southern United States or the South constitutes a distinctive region [i] covering a large port ... 

.

Reform: Regulate Wall Street

Also early in Roosevelt's first term, the administration launched a new federal regulatory agency to oversee the stock market dubbed the U.S. Securities and Exchange Commission . Another agency, the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation is a [i] ... 

 , set out to reform of the banking system by setting up a system of insurance for deposits.

Repeal of prohibition

In a measure that garnered substantial popular support, Roosevelt, in his first days of office, moved to put to rest one of the most divisive cultural issues of the 1920s. He supported and signed a bill to legalize the manufacture and sale of beer, an interim measure pending the repeal of Prohibition Prohibition

Prohibition is any of several periods during which the manufacture, transportation, import, export, and ... 

, for which a constitutional amendment was already in process. The amendment was ratified later in 1933. Prohibition had been a rather unpopular amendment and was also the cause of bootlegging, or the illegal manufacture and sale of liquor within the United States.

Communists in New Deal

Right wing critics complained that the New Deal was infiltrated with Communists. The most important group was fired in 1934. Outside government the far left was in fact exerting great influence in the labor movement , and was building a network of membership organizations. The American League Against War and Fascism was formed in 1933 and, in 1937 became American League for Peace and Democracy. There followed the America Youth Congress, 1934; League of American Writers, 1935; National Negro Congress, 1936; and the American Congress for Democracy and Intellectual Freedom, 1939. All had significant Communist connections.

Puerto Rico

A separate set of programs operated in Puerto Rico, headed by the Puerto Rico Reconstruction Administration. It promoted land reform and helped small farms; it set up farm cooperatives, promoted crop diversification, and helped local industry. It was directed by Ernest Gruening Ernest Gruening

Ernest Henry Gruening was an American [i] journalist [i] and Democratic Party [i] ... 

.

Reform:


Business, labor, and government cooperation


Besides programs for immediate 'relief' the New Deal started quickly on an agenda of long-term 'reform' so that another depression would not happen. Falling prices hurt the economy; the New Dealers responded to demands to inflate the currency by a variety of means. Another group of reformers sought to build consumer and farmer co-ops as a counterweight to big business. The consumer co-ops did not take off, but the Rural Electrification Administration used co-ops to bring electricity to rural areas.

Roosevelt realized that these initial actions were nothing but stopgaps, that more comprehensive government programs would be necessary. In the roughly three years between the Great Crash and Roosevelt's First Hundred Days, the industrial economy had been suffering from a vicious cycle of deflation. Since 1931, the U.S. Chamber of Commerce, then and now the voice of the nation's organized business, had been urging the Hoover administration to adopt an anti-deflationary scheme that would permit trade associations to cooperate in stabilizing prices within their industries. While existing antitrust laws clearly forbade such practices, organized business found a receptive ear in the Roosevelt administration.

The Roosevelt administration, packed with reformers aspiring to forge all elements of society into a cooperative unit , was fairly amenable to the idea of cooperation among producers.

The Roosevelt administration, insisted that business would have to ensure that the incomes of workers would rise along with their prices. The product of all these impulses and pressures was the National Industrial Recovery Act National Industrial Recovery Act

The National Industrial Recovery Act of June 16 [i], 1933 [i], part of President [i] ... 

 , the most important undertaking of the First Hundred Days, that was passed by Congress in June 1933.

The NIRA guaranteed to workers the right of collective bargaining and helped spur some union organizing activity, but much faster growth of union membership came after the 1935 Wagner Act. The NIRA established the National Recovery Administration National Recovery Administration

As part of the New Deal [i] in the United States [i], the National Recovery Administration was developed ... 

 , which attempted to stabilize prices and wages through cooperative "code authorities" involving government, business, and labor. The NRA included a multitude of regulations imposing the pricing and production standards for all sorts of goods and services. Some ridiculed it as the "National Run Around." Most economists were dubious because it was based on fixing prices to reduce competition. Historian Jim Power, in FDR's Folly says that the above-market wages rates dicated by the NRA made it more expensive for employers to hire people, and therefore unnecessarily maintained high unemployment and prolonged the Depression.

To prime the pump and cut unemployment, the NIRA created the Public Works Administration , a major program of public works. From 1933 to 1939 PWA spent $6 billion with private companies to build 34,500 projects, many of them were quite large.

The NRA "Blue Eagle" campaign



At the center of the NIRA was the National Recovery Administration , headed by former General Hugh Samuel Johnson Hugh Samuel Johnson

Hugh Samuel Johnson American [i] soldier and National Recovery Administration [i] official ... 

. Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 40 cents an hour, a maximum workweek of 35 to 40 hours, and the abolition of child labor. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.

To mobilize political support for the NRA, and the administrations "blanket code", Johnson launched the "NRA Blue Eagle" publicity campaign to boost his bargaining strength to negotiate the codes with business and labor. The NRA negotiated specific sets of codes with leaders of the nation's major industries; the most important provisions were anti-deflationary floors below which no company would lower prices or wages, and agreements on maintaining employment and production. In a remarkably short time, the WPA won agreements from almost every major industry in the nation. Six months after the NRA went into effect industrial production dropped 25 percent. According to some economists, the NRA increased the cost of doing business by 40 percent. By the time it ended in May 1935, industrial production was 22% higher than in May 1933.

On May 27 1935, the NRA was found to be unconstitutional by a unanimous decision of the U.S. Supreme Court Supreme Court of the United States

The Supreme Court of the United States is the highest judicial body [i] in the United States [i] ... 

 in the case of Schechter v. United States Schechter Poultry Corp. v. United States

|-
! bgcolor="6699FF" | Case opinions
... 

. On that same day, the Court unanimously struck down the Frazier-Lemke Act portion of the New Deal as unconstitutional.

Second New Deal


Legislative successes and failures

In the spring of 1935, responding to the setbacks in the Court, a new skepticism in Congress, and the growing popular clamor for more dramatic action, the administration proposed or endorsed several important new initiatives. Historians refer to them as the "Second New Deal" and note that it was more radical, more pro-labor and anti-business, than the "First New Deal" of 1933-34. The National Labor Relations Act National Labor Relations Act

The National Labor Relations Act is a 1935 [i] United States federal law [i] that protects the rights o ... 

 , also known as the Wagner Act, revived and strengthened the protections of collective bargaining contained in the original NIRA. The result was a tremendous growth of membership in the labor unions comprising the American Federation of Labor. Labor thus became a major component of the New Deal political coalition. Roosevelt nationalized unemployment relief through the Works Progress Administration Works Progress Administration

The Works Progress Administration , was created in May 1935 by Presidential order .... 

 , headed by close friend Harry Hopkins Harry Hopkins

Harry Lloyd Hopkins was one of Franklin Roosevelt [i]'s closest advisors. ... 

. It created hundreds of thousands of low-skilled blue collar jobs for unemployed men . Applicants for WPA jobs did not have to be Democrats, but their foremen quickly explained that Roosevelt created their paychecks and that conservative Republicans wanted to abolish the program. The National Youth Administration was the semi-autonomous WPA program for youth. Its Texas director, Lyndon Baines Johnson Lyndon B. Johnson

Lyndon Baines Johnson , often referred to as LBJ, was the 36th President of the United States [i] ... 

, later used the NYA as a model for some of his Great Society Great Society

The Great Society was a set of domestic programs proposed or enacted in the United States [i] on the ini ... 

 programs in the 1960s.

In the very long run, the most important program of 1935, and perhaps the New Deal as a whole, was the Social Security Act Social Security (United States)

Social Security in the United States [i] is a social insurance [i] program funded throug ... 

 , which established a system of insurance against old age. It also set up unemployment insurance and welfare benefits for such protected groups as dependent children and the handicapped. It established the modern framework for U.S. welfare system. Roosevelt insisted that it should be funded by payroll taxes rather than from the general fund; he said, "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program." One of the last New Deal agencies was the United States Housing Authority, created in 1937 with some Republican support to abolish slums.

Defeat: Court Packing and Executive Reorganization

Roosevelt, however, emboldened by the triumphs of his first term, set out in 1937 to consolidate authority within the government in ways that provoked powerful opposition. Early in the year, he asked Congress to expand the number of justices on the Supreme Court so as to allow him to appoint members sympathetic to his ideas and hence tip the ideological balance of the Court. This proposal provoked a storm of protest.

In one sense, however, it succeeded; Justice Owen Roberts Owen Josephus Roberts

Owen Josephus Roberts was an Associate Justice of the United States Supreme Court [i] for fifteen years. ... 

, almost certainly in response to the threat, switched positions and began voting to uphold New Deal measures, effectively creating a liberal majority in West Coast Hotel Co. v. Parrish West Coast Hotel Co. v. Parrish

|-
! bgcolor="6699FF" | Case opinions
... 

and National Labor Relations Board v. Jones & Laughlin Steel Corporation National Labor Relations Board v. Jones & Laughlin Steel Corporation

National Labor Relations Board v.... 

thus departing from the Lochner v. New York Lochner v. New York

Lochner v. New York, 198 U.S. 45 [i], was a landmark United States Supreme Court [i] ... 

era and giving the government more power in questions of economic policies. Journalists called this change "the switch in time that saved nine." But the "court packing plan," as it was known, did lasting political damage to Roosevelt and was finally rejected by Congress in July.

At about the same time, the administration proposed a plan to reorganize the executive branch in ways that would significantly increase the president's control over the bureaucracy. Like the Court-packing plan, executive reorganization garnered opposition from those who feared a "Roosevelt dictatorship" and it failed in Congress; a watered-down version of the bill finally won passage in 1939.

Attacks Right and Left

Historians on the left argue that Roosevelt saved capitalism in his first term when he could have destroyed it and easily nationalized the banks and the railroads. [Conkin]

Historians on the right and left have generally been disappointed with Roosevelt's second term. On the Old Right, there were been charges of an FDR "executive dictatorship" since the 1930s. Journalist John T. Flynn, for example, denounced FDR as a socialistic radical and a despot in The Roosevelt Myth .



Conversely, historians on the left have denounced the New Deal as a conservative phenomenon that let slip the opportunity to radically reform capitalism. Since the 1960s, "New Left" historians have been among the New Deal's harsh critics. Barton J. Bernstein, in a 1968 essay, compiled a chronicle of missed opportunities and inadequate responses to problems. The New Deal may have saved capitalism from itself, Bernstein charged, but it had failed to help—and in many cases actually harmed—those groups most in need of assistance. Paul K. Conkin in The New Deal similarly chastised the government of the 1930s for its policies toward marginal farmers, for its failure to institute sufficiently progressive tax reform, and its excessive generosity toward select business interests. Howard Zinn Howard Zinn

Howard Zinn is an American [i] historian [i] and political scientist [i] ... 

, in a 1966 essay, criticized the New Deal for working actively to actually preserve the worst evils of capitalism.

Yet, much of the more recent work on the New Deal has been less interested in the question of whether the New Deal was a "conservative" or "revolutionary" phenomenon than in the question of constraints within which it was operating. Political sociologist Theda Skocpol, in an influential series of articles, has emphasized the issue of "state capacity" as an often-crippling constraint. Ambitious reform ideas often failed, she argued because of the absence of a government bureaucracy with significant strength and expertise to administer them. Other more recent works have stressed the political constraints that the New Deal encountered. Both in Congress and among certain segments of the population conservative inhibitions about government remained strong; thus some scholars have stressed that the New Deal was not just a product of its liberal backers, but also a product of the pressures of its conservative opponents.

The New Deal and the "broker state"


Government Role: balance labor, business and farming

Despite the dismal record in aiding marginal farmers and African Americans, among others-- contrasted with its often frequent generosity toward certain business interests--the New Deal was to elevate and strengthen new interest groups so as to allow them to compete more effectively for the interests by having the federal government evolve into an arbitrator in competition among all elements and classes of society, acting as a force that could mediate when necessary to help some groups and limit the power of others. By the end of the 1930s, business found itself competing for influence with an increasingly powerful labor movement, one that was engaged in mass mobilization and sometimes militant action; with an organized agricultural economy, and occasionally with aroused consumers. The New Deal accomplished this by creating a series of state institutions that greatly, and permanently, expanded the role of the federal government in American life. The government was now committed to providing at least minimal assistance to the poor and unemployed; to protecting the rights of labor unions; to stabilizing the banking system; to building low-income housing; to regulating financial markets; to subsidizing agricultural production; and to doing many other things that had not previously been federal responsibilities.

Thus, perhaps the strongest legacy of the New Deal, in other words, was to make the federal government a protector of interest groups and a supervisor of competition among them. As a result of the New Deal, political and economic life became politically more competitive than before, with workers, farmers, consumers, and others now able to press their demands upon the government in ways that in the past had been available only to the corporate world. Hence the frequent description of the government the New Deal created as the "broker state," a state brokering the competing claims of numerous groups. If there was more political competition, there was less market competition. Farmers were not allowed to sell for less than the official price. The transportation industry was tightly regulated so that every firm had a guaranteed market and management and labor had high profits and high wages, all at the cost of high prices and much inefficiency. Quotas in the oil industry were fixed by the Railroad Commission of Texas with the federal Connally Tom Connally

Thomas Terry Connally was an American [i] politician, who represented Texas [i] in both t ... 

 Hot Oil Act of 1935guaranteeing that illegal "hot oil" would not be sold. To the New Dealers, the free market meant "cut-throat competition" and they considered that evil. Not until the 1970s and 1980s would most of the New Deal regulations be relaxed.

Thus, it did not transform American capitalism in any genuinely radical way. Except in the field of labor relations, corporate power remained nearly as free from government regulation in 1939 as it had been in 1933, but that changed dramatically during the war, as Washington took control over wage rates, prices, and allocation of raw materials, and sent military officers into munitions plants. All the relief programs were closed down during the war, but one major program survived--Social Security--to become the liberal hallmark of the New Deal into the 21st century.

African Americans



However, this so-called "broker state" would offer much less influence to those groups either too weak to demand assistance or not visible enough to arouse widespread public support.

The most notable group to receive much less influence than others in the broker state was African Americans African American

An African American is a member of an ethnic group [i] in the United States [i] whose ancestors, usual... 

. Many leading New Dealers, including Eleanor Roosevelt Eleanor Roosevelt

[i]
Anna Eleanor Roosevelt was an American [i] political leader who use ... 

, Harold Ickes Harold L. Ickes

Harold LeClair Ickes was a U.S. [i] administrator [i] ... 

, Aubrey Williams and Harry Hopkins Harry Hopkins

Harry Lloyd Hopkins was one of Franklin Roosevelt [i]'s closest advisors. ... 

 worked hard to ensure Blacks received at least 10 % of welfare assistance payments. But the New Deal did not try to undercut segregation or change the second class political status of Blacks in the South. Roosevelt did appoint an unprecedented number of African Americans to second-level positions in his administration that collectively were called the Black Cabinet, perhaps due to the influence of his wife, Eleanor Roosevelt Eleanor Roosevelt

[i]
Anna Eleanor Roosevelt was an American [i] political leader who use ... 

, a vocal advocate of easing discrimination. Roosevelt and Hopkins worked with big city mayors to welcome Black political organizations that made the transition from the GOP to the Democratic party in 1934-36.

The WPA, NYA, and CCC relief programs allocated 10% of their budgets to blacks . They operated separate all-black units with the same pay and conditions as white units. The African American community responded favorably, so that by 1936 the majority who voted were voting Democratic. This was a sharp realignment from 1932, when the most African Americans preferred the Republican ticket. The New Deal thus established a political alliance between African Americans and the Democratic Party that survives into the 21st century.

Roosevelt believed that other matters were far more pressing than racial discrimination. Never willing to lose the support of Southern Congressional Democrats, he declined to support legislation making lynching a federal crime, while denouncing lynching in speeches. He declined to advocate banning the poll tax, used by Southern whites to deny the vote to Southern blacks. He refused to use the relief agencies to challenge local patterns of discrimination: the NRA tolerated widespread practices of paying blacks less than whites; blacks were largely excluded from employment at the TVA; the FHA refused to provide mortgages to blacks moving into white neighborhoods; and the AAA was ineffectual in protecting the interests of black sharecroppers and tenant farmers.

Some liberal historians argue the New Deal laid the ground work for the "broker state" to be expanded a generation later, mostly through the work of the next wave of liberal reform—the civil rights movement and the Great Society Great Society

The Great Society was a set of domestic programs proposed or enacted in the United States [i] on the ini ... 

—to embrace groups marginalized in the 1930s. However, many African American historians insist that the Civil Rights movement owed everything to black activists, and very little to the New Deal. Note that the New Deal was especially beneficial to white ethnic minorities, who responded with 80-90% of their votes for Roosevelt's reelection.

The recession of 1937 and recovery


The Roosevelt administration was under assault during FDR's second term, which presided over a new dip in the Great Depression in the fall of 1937 that continued through most of 1938. Production declined sharply, as did profits and employment. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938. Keynesian economists speculated that this was a result of a premature effort to curb government spending and balance the budget, while conservatives said it was caused by attacks on business and by the huge strikes caused by the organizing activities of the CIO and AFL.

Roosevelt rejected the advice of Morgenthau to cut spending, and decided big business was trying to ruin the New Deal by causing another depression that voters would react against by voting Republican. It was a "capital strike" said Roosevelt, and he ordered the FBI to look for a criminal conspiracy . Roosevelt moved left and unleashed a rhetorical campaign against monopoly power, which was cast as the cause of the new crisis. Ickes attacked automaker Henry Ford, steelmaker Tom Girdler, and the superrich "Sixty Families" who supposedly comprised "the living center of the modern industrial oligarchy which dominates the United States." Left unchecked, Ickes warned, they would create "big-business Fascist America -- an enslaved America." The president appointed Robert Jackson as the aggressive new director of the antitrust division of the Justice Department, but this effort lost its effectiveness once World War II began and big business was urgently needed to produce war supplies. [Kennedy p 352]

But the administration's other response to the 1937 deepening of the Great Depression had more tangible results. Ignoring the vitriolic pleas of the Treasury Department and responding to the urgings of the converts to Keynesian economics and others in his administration, Roosevelt embarked on an antidote to the depression, reluctantly abandoning his efforts to balance the budget and launching a $5 billion spending program in the spring of 1938, an effort to increase mass purchasing power. The New Deal had in fact engaged in deficit spending since 1933, but it was apologetic about it, because a rise in the national debt was opposite of what the Democratic party had always preached. Now they had a theory to justify what they were doing. Roosevelt explained his program in a fireside chat Fireside chats

The fireside chats were a series of 30 evening radio talks given by United States [i] President Franklin Delano Roosevelt [i] ... 

 in which he finally acknowledged that it was therefore up to the government to "create an economic upturn" by making "additions to the purchasing power of the nation."

Business-oriented observers explained the recession and recovery in very different terms from the Keynesians. They argued that the New Deal had been very hostile to business expansion in 1935-37, had encouraged massive strikes which had a negative impact on major industries such as automobiles, and had threatened massive anti-trust legal attacks on big corporations. All those threats diminished sharply after 1938. For example, the antitrust efforts fizzled out without major cases. The CIO and AFL AFL

AFL has a number of references:... 

 unions started battling each other more than corporations, and tax policy became more favorable to long-term growth.

Lawrence Reed notes that "when a nationally representative poll by the American Institute of Public Opinion in the spring of 1939 asked, “Do you think the attitude of the Roosevelt administration toward business is delaying business recovery?” the American people responded “yes” by a margin of more than two-to-one. The business community felt even more strongly so" Economic indicators show the American economy reached nadir in summer 1932 to February 1933, then began recovering until the Roosevelt recession of 1937-1938. Thus the Federal Reserve Industrial Production Index hit its low of 52.8 on 1932-07-01 and was practically unchanged at 54.3 on 1933-03-01; however by 1933-07-01, it reached 85.5 .
In Roosevelt's twelve years in office the economy had an 8.5% compound annual growth of GDP , the highest growth rate in the history of any industrial country ,however, recovery was slow --by 1939 GDP per adult was still 27% below trend. And, throughout the New Deal the median joblessness rate was 17.2 percent and never went below 14 percent.

Statistic192919311933193719381940
Real Gross National Product101.4 84.3 68.3103.996.7113.0
Consumer Price Index122.5108.7 92.4102.7 99.4100.2
Index of Industrial Production109 75 69112 89126
Money Supply M246.642.732.245.749.355.2
Exports5.242.421.673.353.184.02
Unemployment 3.116.125.213.816.513.9


in 1929 dollars
1935-39 = 100


















Uemployment

% labor force

Lebergott

Darby

1933

24.9

20.6

1934

21.7

16.0

1935

20.1

14.2

1936

16.9

9.9

1937

14.3

9.1

1938

19.0

12.5

1939

17.2

11.3

1940

14.6

9.5

1941

9.9

8.0

1942

4.7

4.7

1943

1.9

1.9

1944

1.2

1.2

1945

1.9

1.9


















Relief Cases 1936-1941

monthly average in 1,000

1936

1937

1938

1939

1940

1941

Workers employed:

WPA

1,995

2,227

1,932

2,911

1,971

1,638

CCC and NYA

712

801

643

793

877

919

Other federal work projects

554

663

452

488

468

681

Public assistance cases:

Social security programs

602

1,306

1,852

2,132

2,308

2,517

General relief

2,946

1,484

1,611

1,647

1,570

1,206

5,886

5,660

5,474

6,751

5,860

5,167

Total families helped

Unemployed workers

9,030

7,700

10,390

9,480

8,120

5,560

coverage

65%

74%

53%

71%

72%

93%

Prolonged/Worsened the Depression

A 1995 survey of economic historians and economists asked "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression." Of the economists 27% agreed and 51% disagreed. Of the economic historians, only 6% agreed and 74% disagreed. . See

The minority view is represented by Harold L. Cole and Lee E. Ohanian who conclude that the "New Deal labor and industrial policies did not lift the economy out of the Depression as President Roosevelt and his economic planners had hoped," but that the "New Deal policies are an important contributing factor to the persistence of the Great Depression." They conclude that the New Deal "cartelization policies are a key factor behind the weak recovery." The say that the "abandonment of these policies coincided with the strong economic recovery of the 1940s." Lowell E. Gallaway, Richard K. Vedder conclude that the "Great Depression was very significantly prolonged in both its duration and its magnitude by the impact of New Deal programs." They argue that without Social Security, work relief, unemployment insurance, and especially without the labor unions, business would have hired more workers and the unemployment rate during the New Deal years would have been 6.7% instead of 17.2 percent.Gallaway, Lowell E. and Vedder, Richard K. Out of Work: Unemployment and Government in Twentieth-Century America, New York University Press; Updated edition .

National Debt



The New Deal tried public works, farm subsidies and other devices to reduce unemployment, but FDR never completely gave up trying to balance the budget. Unemployment remained high throughout the New Deal years; business simply would not hire more people, especially the low skilled and supposedly "untrainable" men who had been unemployed for years and lost any job skill they once had. Keynesians later argued that by spending vastly more money--using fiscal policy--the government could provide the needed stimulus through the "multiplier" effect. Critics of Keynesianism said that would just take money out of the private sector, causing a negative multiplier effect there. However no economist has written a full-scale Keynesian analysis of the depression, so it is difficult to evaluate how that model would work.



In recent years more influential among economists has been the monetarist interpretation of Milton Friedman Milton Friedman

[i], known for his work on [[macroeconomics]... 

, which did include a full-scale monetary history of what he calls the "Great Contraction." Friedman concentrated on the failures before 1933, however he did say that Roosevelt's policies worsened and prolonged the Depression. From 1935 to 1943, Friedman was himself a Keynesian who was an official spokesman for the New Deal before Congress; he did not at that time criticize any New Deal or Federal Reserve policies.

Apart from building up labor unions, the New Deal did not substantially alter the distribution of power within American capitalism Capitalism


Capitalism is an economic system [i] in which the means of production [i] are owned mostly privately, ... 

. It had only a small impact on the distribution of wealth among the American people; World War Two, however, had a massive equalizing effect that lasted 40 years.

Keynes's visit to the White House in 1934 to urge President Roosevelt to do more deficit spending was a debacle. A dazed, Roosevelt complained to Labor Secretary Frances Perkins Frances Perkins

Frances Coralie "Fannie" Perkins was the U.S. Secretary of Labor [i] fr... 

, "He left a whole rigmarole of figures--he must be a mathematician rather than a political economist." That is, Keynes had an abstract theory but no useful suggestions about what to do.

Fiscal Conservatism

Fiscal conservatism was a key component of the New Deal, as Zelizer demonstrates. It was supported by Wall Street and local investors and most of the business community; mainstream academic economists believed in it, as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees. Even liberal Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits. Public opinion polls consistently showed public opposition to deficits and debt. Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably Lewis Douglas the Director of Budget from 1933 to 1934, and Henry Morgenthau Jr. Henry Morgenthau, Jr.

[i]
... 

, Secretary of the Treasury from 1934 to 1945. They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits. Personally the president embraced their fiscal conservatism. Politically, he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen. On the other hand there was enormous pressure to act–and spending money on high visibility programs attracted Roosevelt, especially if it tied millions of voters to him, as did the WPA.

Douglas proved too inflexible, and quit in 1934. Morgenthau made it his highest priority to stay close to Roosevelt, no matter what. Douglas' position, like many of the Old Right was grounded in a basic distrust of politicians and the deeply ingrained fear that government spending always involved a degree of patronage and corruption that offended his Progressive sense of efficiency. The Economy Act of 1933, passed early in the Hundred Days, was Douglas' great achievement. It reduced federal expenditures by $500 million, to be achieved by reducing veterans’ payments and federal salaries. Douglas cut government spending through executive orders that cut the military budget by $125 million, $75 million from the Post Office, $12 million from Commerce, $75 million from government salaries, and $100 million from staff layoffs. As Freidel concludes, "The economy program was not a minor aberration of the spring of 1933, or a hypocritical concession to delighted conservatives. Rather it was an integral part of Roosevelt's overall New Deal." Revenues were so low that borrowing was necessary Douglas therefore hated the relief programs, which he said reduced business confidence, threatened the government’s future credit, and had the "destructive psychological effects of making mendicants of self-respecting American citizens." Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business.

Morgenthau shifted with FDR, but at all times tried to inject fiscal responsibility; he deeply believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment . The Wagner Act met Morgenthau’s requirement because it strengthened the party’s political base and involved no new spending. In contrast to Douglas, Morgenthau accepted Roosevelt’s double budget as legitimate–that is a balanced regular budget, and an “emergency” budget for agencies, like the WPA, PWA and CCC, that would be temporary until full recovery was at hand. He fought against the veterans’ bonus until Congress finally overrode Roosevelt’s veto and gave out $2.2 billion in 1936. His biggest success was the new Social Security program; he managed to reverse the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. It was Morgenthau who insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way.

Claims the New Deal adopted fascist models

"Fascism" in the 21st century has very strong connotations of mass murder and death camps, making it a highly loaded term. However in the 1930s it was treated as a technical term regarding how much control in a capitalist system the government should have over business. From the time the New Deal was introduced, some commentators tried to relate its control over business to the fascist model. These commentators ranged from contemporary Communist Communism

Communism is an ideology that seeks to establish a future classless [i], stateless [i] ... 

s, to Republican Herbert Hoover Herbert Hoover

[i] , was a successful [[mining engineer]... 

, and libertarian Libertarianism

|
|-
|
|}
Libertarianism is a political philosophy [i] advocating that individuals should be free to do ... 

 economist Murray Rothbard Murray Rothbard

Murray Newton Rothbard was an American [i] economist [i], historian [i] and natural law [i] ... 

.

Ronald Reagan Ronald Reagan

Ronald Wilson Reagan was the 40th President [i] of the United States [i] ... 

, a strong supporter of the New Deal at the time reversed positions and said in 1976, "Fascism was really the basis for the New Deal." Journalist John T. Flynn, a former socialist, in his 1944 book As We Go Marching, said that "the New Dealers...began to flirt with the alluring pastime of reconstructing the capitalist system...and in the process of this new career they began to fashion doctrines that turned out to be the principles of fascism." See a further discussion of these claims linking the New Deal to statism, corporatism, and fascism Fascism

Fascism is a radical [i] political ideology [i] that combines elements of corporatism [i], authoritarianism [i] ... 

 at Fascism and ideology

Former President Herbert Hoover argued that some New Deal programs were "fascist," carrying a combination of rule by big business corporations and presidential dictatorship. [Memoirs 3:420]

"Among the early Roosevelt fascist measures was the National Industry Recovery Act of June 16, 1933 .... These ideas were first suggested by Gerald Swope ....[and] the United States Chamber of Commerce. During the campaign of 1932, Henry I. Harriman, president of that body, urged that I agree to support these proposals, informing me that Mr. Roosevelt had agreed to do so. I tried to show him that this stuff was pure fascism; that it was a remaking of Mussolini's "corporate state" and refused to agree to any of it. He informed me that in view of my attitude, the business world would support Roosevelt with money and influence. That for the most part proved true."

Whatever Hoover was told, Swope and Hariman, however, had not contacted Roosevelt and he had not agreed to any such plan.
In 1934, Roosevelt himself warned his "fireside chat" radio audiences against linguistic confusion. Some people, he said,:

will try to give you new and strange names for what we are doing. Sometimes they will call it 'Fascism,' sometimes 'Communism,' sometimes 'Regimentation,' sometimes 'Socialism.' But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical. . . . Plausible self-seekers and theoretical die-hards will tell you of the loss of individual liberty. Answer this question out of the facts of your own life. Have you lost any of your rights or liberty or constitutional freedom of action and choice?

In September 1934 Roosevelt defended a more powerful national government as he believed was necessary to control the economy, by quoting conservative Republicans Elihu Root:

The tremendous power of organization [Root had said] has combined great aggregations of capital in enormous industrial establishments . . . so great in the mass that each individual concerned in them is quite helpless by himself. . . . The old reliance upon the free action of individual wills appears quite inadequate. . . . The intervention of that organized control we call government seems necessary. . . . Men may differ as to the particular form of governmental activity with respect to industry or business, but nearly all are agreed that private enterprise in times such as these cannot be left without assistance and without reasonable safeguards lest it destroy not only itself but also our process of civilization.


Other scholars reject linking the New Deal to Fascism as overly simplistic. As a leading historian of fascism explains, "What Fascist corporatism and the New Deal had in common was a certain amount of state intervention in the economy. Beyond that, the only figure who seemed to look on Fascist corporatism as a kind of model was Hugh Johnson Hugh Samuel Johnson

Hugh Samuel Johnson American [i] soldier and National Recovery Administration [i] official ... 

, head of the National Recovery Administration." Johnson strenuously denied any association with Mussolini, saying the NRA "is being organized almost as you would organize a business. I want to avoid any Mussolini appearance -- the President calls this Act industrial self-government." Donald Richberg eventually replaced General Hugh Johnson as head of NRA and speaking before a Senate committee said "A nationally planned economy is the only salvation of our present situation and the only hope for the future." Historians such as Hawley have examined the origins of the NRA in detail, showing the main inspiration came from Senators Hugo Black Hugo Black

Hugo LaFayette Black was an American politician [i] and jurist [i] ... 

 and Robert Wagner and from American business leaders such as the Chamber of Commerce. The main model was Woodrow Wilson's War Industries Board, in which Johnson had been involved. No historian reports that any New Deal agency was copied from Italy, Germany or any oth