The New Deal
U.S. History – The Modern Period
April 27, 2011
Dr. James SeelyeThe New Deal
The New Deal was a succession of economic programs put into action by the United States between 1933 through 1936. They were passed by the United States Congress during the first term of Franklin Delano Roosevelt??™s presidency, which was from 1933 to 1937. The programs were enacted as responses to the Great Depression, and focused on what many historians refer to as the “3 R??™s” (relief, recovery, and reform). In layman??™s terms this means, relief for the unemployed and poor, recovering the economy back to the normal levels before the depression, and reform of the financial system to prevent a depression from happening again. The New Deal produced a major political realignment during the modern period, making the Democratic Party the majority (as well as the party which held the White House for seven out of nine Presidential terms from 1933 to 1969), with its foundation of liberal ideas, empowered labor unions, and ethnic minorities. The Republicans were split, they either opposed the entire New Deal as being an enemy of business and growth, or accepting some of it and working toward making it more efficient. The new alignments were aptly named the New Deal Coalition (which dominated most of the American elections into the 1960??™s), while the opposition was the Conservative Coalition (whom took control of Congress from 1938 to 1964).
The early years of the New Deal are distinguished in history by a “First??? New Deal in 1933 and then a “Second??? New Deal 1934??“36. The “First??? New Deal dealt mainly with groups; everything from banking, the railroads to industry and farming, all of which were demanding help for economic recovery. A “Second??? New Deal” introduced 1934-36 included the Wagner Act (it was also known as and became the National Labor Relations Act) to promote labor unions, the Works Progress Administration (WPA) relief program, the Social Security Act, and new programs to aid tenant farmers and migrant workers. The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, then the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers and the Agricultural Adjustment Act of 1938.
When Franklin D. Roosevelt was president, he appointed Henry Wallace as his Secretary of Agriculture. In 1933 Wallace drafted the Agricultural Adjustment Act (AAA). Its purpose was to help farmers by reducing production of staple crops, thus raising farm prices and encouraging more diversified farming. The AAA restricted agricultural production by paying farmers subsidies not to plant part of their land and to kill off excess livestock. The Act created a new agency, the Agricultural Adjustment Administration, to oversee the distribution of the subsidies. The money to pay the farmers for cutting back production of about 30% was raised by a tax on companies that bought the farm products and processed them into food and clothing. It is still considered the first modern United States farm bill. (The National Farm Bill Law Center, 2011)
In opposition to the Agricultural Adjustment Act in 1936 the Supreme Court declared the AAA unconstitutional. The majority of the judges (6-3) ruled that it was illegal to levy taxes on one group (those who processed) in order to pay it to another (the farmers who grew or raised the product). In 1938, another Agricultural Adjustment Act was passed without the processing tax. It was financed out of general taxation and therefore became acceptable legislation to the Supreme Court.
The scenario that brought about the proposal of the Agricultural Adjustment Act was years in the making but was primarily due to the First World War that severely disrupted agriculture in Europe. This worked to the advantage of farmers in America who were able to use new machines (such as the combine harvester) to dramatically increase production. During the war American farmers were able to export the food that was surplus to Europe for a large profit. Then during the 1920??™s European agriculture recovered and American farmers found it difficult to find export markets for surplus goods. Unfortunately farmers continued to produce more food than could be consumed and consequently the prices began to fall. The decline in agricultural profits meant that many farmers had difficulty paying the mortgages on their farms. By the 1930s many American farmers were having serious financial difficulties. This in turn brought about the proposal of the Agricultural Adjustment Act that even though it was opposed was the ???saving grace??? of many farmers in America. (Pepperdine University, 2011)
The Agricultural Adjustment Act greatly improved the economic conditions of many farmers during the Great Depression. In Ohio, ???income from farming increased from just over 157 million dollars in 1932 to almost 356 million dollars in 1937.??? (Ohio History Central, 2011) All in all it was determined that The Agricultural Adjustment Act did help farmers by increasing the value of their crops and livestock.
As well as the Agricultural Adjustment Act bringing about the ???first farm bill??? that has subsequentially been built upon and changed throughout history another piece of legislation still in existence today was passed during the new deal era that being the National Labor Relations Act.
In the late nineteenth and early twentieth centuries, factory workers faced poor working conditions, low wages, and almost no benefits. This was true for the workers employed by most companies not factories alone but all workers in general.
In 1933, Senator Robert F. Wagner, chairman of the National Recovery Administration, introduced a bill to Congress to help protect trade unionists from their employers. With the support of Frances Perkins, the United States Secretary of Labor, Wagners proposals became the National Labor Relations Act. It established the National Labor Relations Board empowered to administer the ???regulation of labor relations in industries engaged in or affecting interstate commerce.??? (National Labor Relations Board, 2011)
Congress enacted the National Labor Relations Act (“NLRA”) in 1935 ???to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy.??? (National Labor Relations Board, 2011) The National Labor Relations Act also established the rights of workers not only to join trade unions and to bargain collectively with their employers but to use representatives of their own choosing. Workers were now protected from their employers and as a result union membership grew.
The National Labor Relations Act came to existence on July 15, 1935; the United States Congress passed the Wagner-Connery Act. ? The Wagner-Connery Act again was part of President Franklin D. Roosevelts New Deal. This legislation legalized unions and created the National Labor Relations Board (NLRB). ? The NLRB was to supervise laborers negotiations with their employers, to guarantee collective bargaining, and to prevent employers from engaging in unfair labor practices. ? The NLRB replaced the National Labor Board, which the United States Supreme Court effectively disbanded when it ruled that the National Industrial Recovery Act was unconstitutional in 1935.
The National Industrial Recovery Act, the Wagner-Connery Act, and the National Labor Relations Board caused tremendous change within the United States, including in Ohio. ? Workers across Ohio and the United States descended upon the American Federation of Labors (AFL) offices, seeking to join this union.? Unfortunately for the workers, most of them were unskilled, and the AFL only accepted skilled workers. ? As a result of the AFLs refusal to accept unskilled workers, these workers formed their own unions to seek better working conditions and wages.? The NLRB actively protected workers from what it deemed were the unfair actions of employers.? This included in Ohio, where the NLRB intervened in employer-employee relations in 1941, forcing several companies collectively known as “Little Steel” to allow their workers to unionize.
The Little Steel Strike of 1937 put steel workers, represented by the Congress of Industrial Organizations, against smaller steel companies, such as the Republic Steel Company (now part of International Steel Group), the Youngstown Sheet and Tube Company (now operated as V & M Star Ohio), collectively they became known as ???Little Steel”.
In 1937, workers at the Republic Steel Company, the Youngstown Sheet and Tube Company, and several other steel companies went on strike over low wages and poor working conditions. The workers used both sit-down strikes and picket lines to attain their goals of better wages and improved working conditions. In a sit-down strike, workers would quit working but still stayed at their places within a factory. This meant that the factory owners could not send in ???scab??? workers to continue the job. (Ohio History Central, 2011)
Ohio residents sympathetic to the cause used airplanes to drop food to the workers inside of the factorys, there was also an attempt to mail food to the workers. To prevent the strike from even happening the ???Little Steel??? companies had hired their own police forces to intimidate workers, when this did not work the companies persuaded local residents to put pressure on the strikers and their families. Do to this many committees were formed in protest of the workers actions, the Mahoning Valley, Ohio Citizens Committee and Order League of Canton, Ohio, to name a few. Ohio Govenor, Martin L. Davey, eventually sent troops in to break up the strike. (Ohio History Central, 2011)
In present time there is still opposition and criticism of Roosevelt??™s New Deal. For example, historian Howard Zinn in his book A Peoples History of the United States criticizes Franklin Roosevelt and the New Deal for ???not going far enough to redistribute wealth in the United States during the Great Depression.??? Zinn argues that ???the New Deal was primarily concerned with saving American capitalism, and that it should have been more radical in nationalizing American industry and promoting economic socialism.??? (Zinn, 2003) You then have even more currently; Burton Folsom who says in his book New Deal or Raw Deal one of his best insights is that the New Deal programs ???were financed in large part by the poor.??? (Folsom, 2008) Folsom gives the example. “In the first four years of Roosevelts presidency, revenue from excise taxes exceeded that of income and corporate taxes combined.” (Folsom, 2008) ???With Roosevelts direction, excise taxes were imposed on many popular items of consumption and these weighed heavily on the impoverished.??? (Folsom, 2008)
In conclusion, the New Deal affected not only society of the era but some of the legislation continues into today??™s modern society. It is still studied and criticized and also praised. My thoughts on it are that Roosevelt had good intentions and was trying to pull America out of a downward spiral and some of his ideas were innovative and worked and are still being used, so I would have to praise him for his insight into what needed to be accomplished for America??™s problems. References
Folsom, B. W. (2008). New Deal or Raw Deal Chicago, IL: Threshold Editions.
National Labor Relations Board. (2011). National Labor Relations Act. Retrieved from http://www.nlrb.gov/national-labor-relations-act
Ohio History Central. (2011). Agricultural Adjustment Act. Retrieved from http://www.ohiohistorycentral.org/entry.phprec=1510
Ohio History Central. (2011). Little Steel Strike of 1937. Retrieved from http://www.ohiohistorycentral.org/entry.phprec=513
Ohio History Central. (2011). National Labor Relations Board. Retrieved from http://www.ohiohistorycentral.org/entry.phprec=934
Pepperdine University. (2011). THE AGRICULTURAL ADJUSTMENT ACT. Retrieved from http://publicpolicy.pepperdine.edu/faculty-research/new-deal/legislation/aaa051233.htm
The National Farm Bill Law Center. (2011). FARM BILL LEGISLATION. Retrieved from http://www.nationalaglawcenter.org/farmbills/#38
Zinn, H. (2003). A People??™s History of the United States. New York, NY: Harper.
The New Deal