Did Roosevelt Make The New Deal?

By Aleysha Shergill - History Student @ St Hilda's College, Oxford

 

For those who are familiar with American policy and legislation in the 1930s, Franklin D. Roosevelt emerges as a central figure. His presidency seemed to symbolise the dawn of a new era, one in which federal power would be deployed in a way previously inconceivable to contemporaries. Nonetheless, the historiography should not overstate the role of Roosevelt and the making of the New Deal to combat the Great Depression.

Firstly, it is important to draw attention to the influence of the Hoover administration and the New Era, not only in the bid to save the banks but also in the more ‘visionary’ legislation which followed. Indeed, by the mid-1920s, capitalist planning was already supplanting laissez-faire, particularly through the ‘managerial revolution’ and the role of an increasing number of public figures in the New Era who sought to reshape the state around the modern corporation. Hoover also sought to align agricultural marketing with corporate practices and set up the Federal Farm Board. This created a set of semi-public corporations to spend $500 million on an open market for surplus commodities, effectively laying the groundwork for Roosevelt’s Agricultural Adjustment Act (AAA). Both presidents also set up state bureaucracies outside of the control of Congress and both administrations took steps towards corporatism. Roosevelt also expanded the Reconstruction Finance Corporation, set up by Hoover to loan public money to financially strapped banks, railroads, and insurance companies and it eventually bankrolled virtually every New Deal program from FERA to the Home Owners Loan Corporation.

Big businesses and large corporations also designed and managed the programs of the New Deal. Corporate leaders and Wall Street bankers, for example, actively participated in creating New Deal policies. After all, Roosevelt set out to save capitalism, not to overturn it. Industry leaders, for example, participated in constructing the National Recovery Act (1933) and overwhelmingly supported industry codes that set floor prices and wages, and agreements on maintaining employment and production rates.

The second phase of the New Deal, however, was borne less out of the ‘crisis of the banks’ than through the dynamic interaction between citizen mobilisation and the state as security emerged as the pivotal concept of the New Deal. It was workers response to the codes enshrined in the National Industrial Recovery Act and Section 7a, however, which in 1934 contributed to the most significant mobilization of wage earners since the war and forced the hand of the federal government and the president. The textile industry, for example, saw the first nation-wide general strike in its history, while the CIO brought more than 3 million members into the industrial unions, and raised anew the banners of social justice.


It is in this context that the Wagner Act can be seen as the result of popular pressure from below, and not solely the result of presidential action. In the countryside, too, agrarian radicalism was reborn, and the upper Midwest saw the rise of renewed farmer-labourer activity, while populism remerged in the South and championed economic issues, including the redistribution of wealth and aid to the unemployed.Hence, the Works Progress Administration, the wealth tax and Social Security Act of August 1935 can be seen as a response to pressure from below and social action.

Historians have also begun to link the movements of the 1930s and 1940s to the beginning of the modern civil rights movements. The growing political mobilisation of African Americans, for example, put pressure on the federal government to affirm its responsibility for the social welfare of all Americans. In 1936, African Americans formed the National Negro Congress, which aimed to unite all existing black organizations for the full socio-economic recovery of the black community. African Americans also strengthened their links with organized labour and in 1933 the NAACP and other interracial organisations formed the Joint Committee on National Recovery and lobbied in Washington and helped to publicise the plight of African Americans in the relief and recovery programs of the New Deal.

However, New Deal legislation faced sustained and significant opposition from big business and the Supreme Court. In Schechter Poultry Corporation v. United (1935), the Supreme Court ruled unanimously that the NIRA was unconstitutional, while the Court also ‘threw out’ the AAA in the 1936 Butler decision, holding that agriculture did not come under the review of interstate commerce. Roosevelt’s freedom of action was also significantly constrained by his dependence on the Southern wing of the Democratic party, who were overwhelming committed to racial segregation and posed a structural veto over all New Deal legislation. This prevented Roosevelt from enshrining racial equality in New Deal legislation.

Moreover, the New Deal was the result of the combination of the precedent of the Hoover administration, corporate interest, and social pressure from below (in the form of strikes), as well as opposition from Congress and the Supreme Court. This has ultimately forced historians to reevaluate the role of Roosevelt and to explore the New Deal through a new lens.

Further reading:

  1. Aaron D. Purcell, The New Deal and the Great Depression (2014)

  2. Alan Dawley, Struggles for Justice: Social Responsibility and the Liberal State (1991)

  3. Jefferson Cowie, The Great Exception: The New Deal & the Limits of American Politics (2016)

  4. Victoria Grieve, ‘Visualizing New Deal Debates: FDR's Big Stick’ Congress & the Presidency 42.2 (2015)