New Deal Era, The

New Deal Era, The. A period of political, economic, cultural, and social ferment that spanned President Franklin Delano Roosevelt's first two terms in office, the New Deal Era (1932–ca. 1940) takes its name from the slogan that Roosevelt first used in his acceptance speech at the 1932 Democratic National Convention and later adopted to describe his administration.This era saw an unprecedented level of federal intervention to regulate economic life and provide basic welfare to citizens in response to the Great Depression. This redefinition of government in turn facilitated the realignment of both major political parties, the rise of unionism among mass‐production workers, demands for progress by women and minorities, and the growth of populist influences in culture and the arts.

Above all, the New Deal Era changed American government. President Herbert Hoover's administration, though more active than any previous government in combating economic depression, remained hostage to the belief that privately coordinated economic action was preferable to government regulation. Hoover's policies proved incapable of halting economic decline or reviving public confidence amid unemployment rates that exceeded 25 percent of nonagricultural workers. In his first hundred days in office, President Roosevelt broke decisively from Hoover's example in favor of experimentation with new government programs. In those early months, Roosevelt pushed fifteen major bills through a compliant Democratic Congress.

The First New Deal.

Among the acts of 1933 were such reforms as the Emergency Banking Act, the passage of which was accompanied by a “bank holiday” (the temporary closing of the nation's banks), and the Glass‐Steagall Act, which separated commercial and investment banking. Other acts focused on relief: The Federal Emergency Relief Administration dispensed $500 million in aid to the poor; the Civilian Conservation Corps put two million men to work on environmental projects; the Civil Works Administration provided work‐relief; and the Home Owners Loan Corporation refinanced mortgages. A massive construction program, the Tennessee Valley Authority (TVA), built some thirty flood‐controlling dams and thirteen power plants that provided cheap electricity to regional consumers. Through the TVA in the South and large public works projects in the West, the New Deal stimulated economic development and urbanization in those regions.

But the most significant programs aimed to restart a floundering economy. The Agricultural Adjustment Administration (AAA) boosted farm prices by reducing production. It paid farmers to take acreage out of cultivation and to reduce livestock herds. The National Recovery Administration (NRA) reinvigorated industry by restraining competitive forces and raising prices. It created industry boards composed of business and government officials who jointly wrote codes that set minimum wages, maximum hours, and price guidelines. The National Industrial Recovery Act (NIRA), the law that created the NRA, also launched a $3.3 billion Public Works Administration which initiated projects from airport construction to school building and protected workers' right to join a union (through Section 7a of the act).

In 1934, the “First New Deal,” as it is often called, came to an end with a flurry of legislation that included the Securities and Exchange Act, which prohibited such abuses as insider trading—a contributor to the stock market crash of 1929. Already it was clear that government would never again be quite the same. The proliferation of “alphabet soup” agencies attracted to Washington a new governing class of lawyers and economists. With “Brains Trust” advisers such as Ben Cohen (a Jew) and Tommy Corcoran (an Irish Catholic), the New Deal reached beyond the conventional Protestant elite for talent. This new governing class experimented with economic planning. The NRA took a step in this direction, as government attempted to boost prices by having consumers patronize companies that complied with NRA codes and displayed “Blue Eagle” logos. In truth, however, no single approach animated Roosevelt's advisers, nor did any one philosophy characterize the president's early initiatives.

Yet by 1935 a host of developments sent the New Deal in a new direction. First, Roosevelt found it increasingly difficult to placate business. Small businesses denounced NRA policies that favored larger competitors. Even big business leaders, who initially supported the NRA, soon chafed under its codes. A powerful business lobby, the American Liberty League, emerged in 1934 to promote anti‐Roosevelt candidates.

Meanwhile, the New Deal's effort to make government an instrument of social justice inspired a wide range of activist demands during 1934–1935. In California, the novelist Upton Sinclair nearly won election as governor in 1934 on a left‐wing platform. Militant strikes broke out in textiles, trucking, and longshoring, as workers sought to realize the right to organize promised by Section 7a. Democrats unexpectedly augmented their majorities in both houses in the 1934 congressional elections. A mass movement demanding regular government payments to retirees emerged under the leadership of Dr. Francis Townsend. And two skillful demagogues— Father Charles Coughlin and Senator Huey Long—castigated the New Deal's inadequacies. Coughlin, a Catholic priest who hosted a radio program with a fervent national following, called for currency reform. Long, the corrupt boss of Louisiana politics, demanded that the nation “Share Our Wealth” by expropriating vast fortunes and distributing them to all.

Losing business support and facing demands for action from other quarters, Roosevelt's First New Deal was finally undermined by the U.S. Supreme Court's decision in Schechter Poultry Corp. v. United States, which declared the NRA unconstitutional. Searching for an alternative program, Roosevelt embraced the ideas of advisers who believed that the fundamental problem of the Great Depression was underconsumption. This thinking corresponded to the new theories of the British economist John Maynard Keynes (although New Dealers had little knowledge of Keynesianism). Legislation launched in 1935, often termed the “Second New Deal,” attempted to build purchasing power among the unemployed, industrial workers, the elderly, and others. This demand‐side approach represented a departure in fiscal policy, inaugurating what became the Keynesian revolution in the U.S. political economy.

The Second New Deal.

Among the programs launched in 1935 were the Works Progress Administration (WPA), a relief program that dwarfed previous New Deal efforts by employing nearly one‐third of the nation's jobless. The Emergency Relief Appropriation disbursed some five billion dollars in aid to the distressed. The Public Utilities Holding Company Act, which broke up the thirteen companies that controlled most of the nation's utilities, drove down electricity prices. The Rural Electrification Act provided federal funds to electrify hamlets and farmsteads. And the Wealth Tax Act increased taxes on corporations and the rich. Together these laws tapped corporate wealth while boosting the incomes of the poorest Americans.

The two most significant pieces of legislation to emerge from the Second New Deal were the Social Security Act (SSA) and the National Labor Relations Act (NLRA). The SSA enrolled a majority of Americans in a federal pension program that guaranteed them retirement income. It also provided funds to the states for unemployment and disability insurance and aid to single mothers of dependent children. The act set the foundation on which the American welfare state was built. The NLRA (or “Wagner Act,” after its sponsor, Senator Robert F. Wagner of New York) guaranteed workers' right to organize, prohibited company unions from representing them, and established a National Labor Relations Board to oversee collective bargaining. It opened the door to mass‐production unionism.

The legislation of the Second New Deal defined the government's role in American life for the remainder of the century: the New Deal state regulated and stimulated the economy, promoted workers' rights, and offered welfare to the poor. The Second New Deal did not go as far as some supporters hoped (no national health plan was adopted, for example), but its direction was clear. For decades to come, political debate would no longer focus on whether government should intervene to steer the economy and foster social justice, but rather on how and to what extent such intervention should take place.

The New Deal Era also witnessed a shift in U.S. foreign policy away from unilateralism and toward internationalism. In December 1933, announcing a “Good Neighbor Policy” toward Latin America, Roosevelt renounced unilateral military intervention as a tool of American policy in the Western Hemisphere. Although Roosevelt continued to defend perceived U.S. interests in South America, he did so with more restraint than his recent predecessors. Reversing the policy adopted by previous administrations since 1917, the administration also granted diplomatic recognition to the Soviet Union. And, as a depression‐fighting tactic, Roosevelt pursued reciprocal trade agreements between the United States and its trading partners that lowered tariffs and facilitated foreign trade.

The New Deal's Domestic Impact.

But the impact of the New Deal Era was visible above all in domestic developments, and nowhere more so than in politics. Since the Civil War, the Republican party had dominated presidential politics. Only two Democrats went to the White House between 1856 and 1932—and neither gained a majority of popular votes in their elections. The New Deal, however, built a powerful Democratic coalition, appealing to urban voters and some previously Republican blocs, including midwestern farmers and African Americans. The Democratic party emerged from Roosevelt's 1936 reelection as the nation's majority party, a status it would hold for decades.

In his 1936 campaign against Alfred M. (“Alf”) Landon (1887–1987), the Republican governor of Kansas, Roosevelt attacked Republicans as “economic royalists” and reactionaries and enthusiastically defended the New Deal's achievements. Voters gave him 61 percent of the popular vote and all but eight electoral votes—the largest electoral landslide in American history. More important, Roosevelt not only swept Democratic strongholds in the “Solid South” and urban America, he won new constituencies to his party. Never before had a president received more unified or enthusiastic support from organized labor. Roosevelt also gained votes from more than 80 percent of the poorest Americans and won a similar majority among first‐time voters, most from immigrant stock. Significantly, he also won large majorities among African Americans, breaking black ties to the party of Abraham Lincoln and creating thereafter the Democrats' most loyal voting bloc.

The 1936 New Deal coalition also swept Democrats to large majorities in both houses of Congress and to power in many traditionally Republican statehouses. For more than a generation, the Democratic party would be seen as the party of reform, government action, and the “common man” (a phrase invoked by Roosevelt in 1932). So well did Roosevelt align the Democrats with such ideas that even long‐time third‐party protest voters flocked to the Democratic banner.

Ultimately, though, the New Deal Era proved how deeply rooted were America's conservative tendencies. The New Deal's political realignment went only so far. Roosevelt's party also enjoyed the support of powerful business forces, especially those with an interest in promoting consumption‐oriented economic policies. Mass retailers, the investment banking houses connected to them, some powerful legal firms, influential building contractors, real‐estate developers, and consumer‐oriented banks all benefited from the New Deal's political capitalism. Their voices checked the influence of unions and liberals within the party. Similarly, the power of southern Democrats, especially in Congress, blocked the party from moving very far leftward. Entrenched segregationists with years of seniority on powerful committees enacted provisions that weakened key New Deal reforms—for example, exempting agricultural and domestic workers from protection by the SSA or NLRA. When Roosevelt challenged some of these southern conservatives by endorsing their liberal opponents in the 1938 Democratic primaries, the strategy failed. As a result, the Democratic party emerged from this era divided between hopeful black masses, labor unionists, and liberals on the one hand and die‐hard southern segregationists on the other.

Nonetheless, the political shifts of the New Deal Era awakened the hopes of previously subordinated groups in American society. Workers, radicals, blacks, and women alike enjoyed rising expectations.

To no group did the New Deal promise more than to industrial workers. The protection of the right to organize embodied in Section 7a of the NIRA sparked a wave of unionizing efforts in basic industry. That ferment in turn stirred reform within the American Federation of Labor (AFL). Unable to meet the needs of mass‐production workers owing to its anachronistic craft structure, the AFL floundered in response to Section 7a. By 1935, a group of union reformers led by John L. Lewis of the United Mine Workers of America demanded that the AFL issue charters to industrial unions to reach mass‐production workers. When AFL president William Green balked, Lewis and others formed the Committee for Industrial Organization (CIO).

The CIO sponsored mass organizing drives in the iron and steel, automotive, rubber, and electrical industries that came to fruition in a series of dramatic breakthroughs in 1937. The most important, a sit‐down strike in a Flint, Michigan, auto plant, forced General Motors to recognize the CIO's United Automobile Workers union. Shortly thereafter the U.S. Steel Corporation recognized the CIO. When the Supreme Court unexpectedly upheld the constitutionality of the NLRA in April 1937, the CIO's position was further strengthened. Before the end of the year, Lewis led industrial unionists out of the AFL to institutionalize the CIO as the Congress of Industrial Organizations. Breaking with AFL policies that excluded blacks, women, and most radicals, the CIO forged a new path for American labor. By the end of World War II, the CIO had unionized much of mass‐production industry and established itself as a power in Democratic politics.

The rise of the CIO was in part aided by an alliance that developed among unionists, liberals, and radicals. During the Depression, the. U.S Communist party grew into the dominant left‐wing presence, despite its policy of spurning alliances with the democratic left. In 1935, however, the Communist International, mindful of the threat of fascism, abandoned its previous sectarianism and inaugurated the Popular Front, urging communists everywhere to ally with liberal, antifascist forces. In America, communist workers abandoned efforts to build their own unions and instead streamed into the CIO, becoming in many cases its best organizers and rising to positions of leadership in several CIO unions. Although especially important for labor, the Popular Front strategy was broadly influential. Communists entered New Deal agencies (without disclosing their party connections) and joined with liberals in civil rights, peace, and civil liberties efforts. Never before had radicals exerted more influence in government or mainstream political causes—a fact that would haunt liberals during the Cold War when Republicans attacked them as one‐time “fellow travelers” of the communists.

Among the causes that communists helped advance during this period were African‐American civil rights. Communists played an active role in publicizing the Scottsboro case, which involved nine black youths dubiously charged with raping two white women in Alabama in 1931. Communists also organized southern black sharecroppers into the Share Croppers Union. (Socialists, meanwhile, founded their own Southern Tenant Farmers Union.) And they helped launch civil rights groups such as the National Negro Congress and the Southern Negro Youth Congress.

The New Deal's own record on civil rights was less luminous. Roosevelt refused to support antilynching legislation for fear of angering powerful southern Democrats, the CCC ran segregated camps, relief programs frequently discriminated against blacks, and nearly all TVA employees were white. Still, the administration did evince solicitude for black concerns. Roosevelt regularly consulted with an informal “Black Cabinet”; he appointed such black leaders as Mary McLeod Bethune to secondary‐level administration posts; and Eleanor Roosevelt, the president's wife, championed black demands for equality. In 1939 the First Lady and Secretary of the Interior Harold Ickes (1874–1952) intervened when the Daughters of the American Revolution barred the black opera singer Marian Anderson from performing at their Washington, D.C., concert hall. Mrs. Roosevelt and Ickes arranged for Anderson to sing instead on the steps of the Lincoln Memorial, staging a stirring radio broadcast of the event.

Likewise, although the New Deal did little to advance feminist goals in programmatic terms, women gained increasing influence in government during this period. Molly Dewson, a feminist activist, headed the newly established Women's Division of the Democratic National Committee. Working with Eleanor Roosevelt and other allies, Dewson helped secure appointment of the first women to hold the positions of cabinet secretary ( Frances Perkins of the Department of Labor), ambassador, U.S. Court of Appeals judge, and a score of lesser posts. Meanwhile, Eleanor Roosevelt's travels, speeches, syndicated newspaper column, and frequent interventions in policy debates within the administration transformed the role of First Lady.

The New Deal also brought improvements for Native Americans. The long‐time reformer John Collier (1884–1968), appointed head of the Bureau of Indian Affairs by Roosevelt, pushed through Congress a series of laws that aided beleaguered Native American communities. These culminated in the Indian Reorganization Act of 1934, which granted Indians rights of self‐government and cultural freedom on reservations.

While such social changes should not be exaggerated, they did encourage an emerging ideal of cultural pluralism among liberals who celebrated America's cultural diversity. This tendency was greatly strengthened by simultaneous developments in music and the arts. Here, too, government played a role. Under the aegis of the WPA in 1935, the Federal Arts Project, the Federal Music Project, the Federal Writers Project, and the Federal Theatre Project were born. These programs employed jobless artists and writers to compose and perform music and plays, to write local histories, to paint murals in public buildings, and more. Such projects encouraged artists to draw upon folk culture and everyday life for themes, making the arts more accessible to the masses.

By the end of the 1930s, American arts and letters had been permeated by a concern for everyday people's struggles. The paintings of John Steuart Curry, the proletarian fiction of John Dos Passos and John Steinbeck—whose novel The Grapes of Wrath (1939) celebrated the endurance of Dust Bowl migrants—and the composer Aaron Copland's “Fanfare for the Common Man” all revealed an effort to give voice to the voiceless.

Developments in popular culture reinforced this trend. The New Deal Era saw film and radio gain a vast following. The movies offered the fantasy world of The Wizard of Oz and escape into the past with Gone with the Wind (both 1939). Radio diverted listeners with the comedy shows of Jack Benny, George Burns and Gracie Allen, and the mildly racist stereotypes of “Amos 'n' Andy.” Radio also made mass opinion a force as never before, as Roosevelt's “Fireside Chats” showed. Moviegoers watched newsreels touting the New Deal's efforts, cheered the populist heroes of the director Frank Capra's films, and admired strong women such as Bette Davis and Joan Crawford. Just as the federal government supplanted local, ethnic, or religious institutions unable to care for the Depression's victims, the new mass media partially supplanted their audiences' distinctive subcultures with a national mass culture at once democratic and consumerist.

The New Deal's Demise and Its Legacy.

Yet the New Deal that had initiated such vast changes began to fade by 1937, in part because of difficulties created by Roosevelt himself. Frustrated by the Supreme Court's conservative rulings, Roosevelt in early 1937 led a vain effort to expand the number of justices on the court. This transparent attempt to “pack” the court and thereby influence its decisions alienated many of the president's allies and reinvigorated his foes. Later in 1937, worried about deficit spending and assuming that the economy was rebounding, Roosevelt decided to cut back relief programs. The stock market promptly crashed and jobless rates again soared.

Other calamities ensued. Smaller steel companies refused to follow the lead of U.S. Steel, successfully avoiding recognition of the CIO in a bitter 1937 strike that weakened Roosevelt's labor allies. Then, in 1938, conservatives on the House Committee on Un‐American Activities mounted a damaging investigation into communist influence in New Deal agencies. These same conservatives ensured that the last great piece of New Deal legislation—the Fair Labor Standards Act of 1938—exempted agricultural workers and set minimum wages at a level that would not hurt low‐waged southern industry. Increasingly under attack after 1938, administration liberals retreated from ambitious efforts to restructure the economy and contented themselves with pursuing economic growth policies.

By the time Adolf Hitler's storm troopers invaded Poland on 1 September 1939, unleashing World War II, the New Deal Era was waning. Conservative and liberal political forces became locked in a stalemate that blocked significant reforms until the United States went to war in December 1941. Only in wartime was Roosevelt able to place the New Deal's central legacy—a powerful regulatory government—on a durable footing. By then, however, those interests that had most resisted the New Deal's changes had regrouped to ensure that their power would not be undermined by the postwar political dispensation.

What is the legacy of the New Deal Era? Historians differ, and their views have shifted over time. During the early Cold War years, most saw the New Deal as the triumph of democracy and liberal capitalism at a time when the future of both looked bleak. By the 1960s, however, revisionists began focusing on the missed opportunities and the conservative achievements of this era, the spread of an entrenched government bureaucracy, and the co‐opting of militant unionism. The New Deal's failure to address the grievances of minorities and women also received increasing scrutiny. In the last years of the century, however, as the era of “big government” faded, scholars seemed willing to grant that the New Deal Era witnessed a profound broadening of American democracy against great odds. Workers, consumers, and minorities benefited from the developments of this period, even if they gained little direct influence over public policy. Their advances may be the era's most enduring legacy.
See also Agriculture: Since 1920; Banking and Finance; Conservatism; Consumer Culture; Depressions, Economic; Folk Art and Crafts; Foreign Relations; Indian History and Culture: From 1900 to 1950; Labor Movements; Liberalism; Lynching; Peace Movements; Securities and Exchange Commission; Segregation, Racial; Sharecropping and Tenantry; Socialism; Socialist Party of America; Strikes and Industrial Conflict; Welfare, Federal.

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Joseph A. McCartin