The Second New Deal Quiz

PDF page 723: Americans Roosevelt won his second term in a landslide, but that did not mean he was immune to criticism. His critics came from both the left and the right, with conservatives deeply concerned over his expansion of government spending and power, and liberals angered that he had not done more to help those still struggling. Adding to Roosevelt’s challenges, the Supreme Court struck down several key elements of the First New Deal, angering Roosevelt and spurring him to try and stack the courts in his second term. Still, he entered his new term with the unequivocal support of the voting public, and he wasted no time beginning the second phase of his economic plan. While the First New Deal focused largely on stemming the immediate suffering of the American people, the Second New Deal put in place legislation that changed America’s social safety net for good.

PDF page 723: While many people supported Roosevelt, especially in the first few years of his presidency, the New Deal did receive significant criticism, both from conservatives who felt that it was a radical agenda to ruin the country’s model of free enterprise, and from liberals who felt that it did not provide enough help to those who needed it most (Figure 26.10).

PDF page 724: Industrialists and wealthy Americans led the conservative criticism against the president. Whether attacking his character or simply stating that he was moving away from American values toward fascism and socialism, they sought to undermine his power and popularity. Most notably, the American Liberty League—comprised largely of conservative Democrats who lamented the excesses of several of Roosevelt’s New Deal programs—labeled the AAA as fascist and proclaimed later New Deal programs to be key threats to the very nature of democracy. Additional criticism came from the National Association of Manufacturers, which urged businessmen to outright ignore portions of the NRA that promoted collective bargaining, as well as subsequent labor protection legislation. In 1935, the U.S. Supreme Court dealt the most crushing blow to Roosevelt’s vision, striking down several key pieces of the New Deal as unconstitutional. They found that both the AAA and the NIRA overreached federal authority. The negation of some of his most ambitious economic recovery efforts frustrated Roosevelt greatly, but he was powerless to stop it at this juncture.

PDF page 724: Meanwhile, others felt that Roosevelt had not done enough. Dr. Francis E. Townsend of California was one who felt that Roosevelt had failed to adequately address the country’s tremendous problems. Townsend, who was a retired dentist, proposed an expansive pension plan for the elderly. The Townsend Plan, as it was known, gained a great deal of popularity: It recommended paying every citizen over sixty who retired from work the sum of $200 per month, provided they spend it in thirty days. Another figure who gained national attention was Father Charles Coughlin. He was a “radio priest” from Michigan who, although he initially supported the New Deal, subsequently argued that Roosevelt stopped far too short in his defense of labor, monetary reform, and the nationalization of key industries. The president’s plan, he proclaimed, was inadequate. He created the National Union for Social Justice and used his weekly radio show to gain followers. A more direct political threat to Roosevelt came from muckraker Upton Sinclair, who pursued the California governorship in 1934 through a campaign based upon criticism of the New Deal’s shortcomings. In his “End Poverty in California” program, Sinclair called for a progressive income tax, a pension program for the elderly,

PDF page 724: Meanwhile, others felt that Roosevelt had not done enough. Dr. Francis E. Townsend of California was one who felt that Roosevelt had failed to adequately address the country’s tremendous problems. Townsend, who was a retired dentist, proposed an expansive pension plan for the elderly. The Townsend Plan, as it was known, gained a great deal of popularity: It recommended paying every citizen over sixty who retired from work the sum of $200 per month, provided they spend it in thirty days. Another figure who gained national attention was Father Charles Coughlin. He was a “radio priest” from Michigan who, although he initially supported the New Deal, subsequently argued that Roosevelt stopped far too short in his defense of labor, monetary reform, and the nationalization of key industries. The president’s plan, he proclaimed, was inadequate. He created the National Union for Social Justice and used his weekly radio show to gain followers. A more direct political threat to Roosevelt came from muckraker Upton Sinclair, who pursued the California governorship in 1934 through a campaign based upon criticism of the New Deal’s shortcomings. In his “End Poverty in California” program, Sinclair called for a progressive income tax, a pension program for the elderly,

PDF page 725: and state seizure of factories and farms where property taxes remained unpaid. The state would then offer jobs to the unemployed to work those farms and factories in a cooperative mode. Although Sinclair lost the election to his Republican opponent, he did draw local and national attention to several of his ideas. The biggest threat to the president, however, came from corrupt but beloved Louisiana senator Huey “Kingfish” Long (Figure 26.11). His disapproval of Roosevelt came in part from his own ambitions for higher office; Long stated that the president was not doing enough to help people and proposed his own Share Our Wealth program. Under this plan, Long recommended the liquidation of all large personal fortunes in order to fund direct payments to less fortunate Americans. He foresaw giving $5,000 to every family, $2,500 to every worker, as well as a series of elderly pensions and education funds. Despite his questionable math, which numerous economists quickly pointed out rendered his program unworkable, by 1935, Long had a significant following of over four million people. If he had not been assassinated by the son-in-law of a local political rival, he may well have been a contender against Roosevelt for the 1936 presidential nomination.

PDF page 725: and state seizure of factories and farms where property taxes remained unpaid. The state would then offer jobs to the unemployed to work those farms and factories in a cooperative mode. Although Sinclair lost the election to his Republican opponent, he did draw local and national attention to several of his ideas. The biggest threat to the president, however, came from corrupt but beloved Louisiana senator Huey “Kingfish” Long (Figure 26.11). His disapproval of Roosevelt came in part from his own ambitions for higher office; Long stated that the president was not doing enough to help people and proposed his own Share Our Wealth program. Under this plan, Long recommended the liquidation of all large personal fortunes in order to fund direct payments to less fortunate Americans. He foresaw giving $5,000 to every family, $2,500 to every worker, as well as a series of elderly pensions and education funds. Despite his questionable math, which numerous economists quickly pointed out rendered his program unworkable, by 1935, Long had a significant following of over four million people. If he had not been assassinated by the son-in-law of a local political rival, he may well have been a contender against Roosevelt for the 1936 presidential nomination.

PDF page 725: and state seizure of factories and farms where property taxes remained unpaid. The state would then offer jobs to the unemployed to work those farms and factories in a cooperative mode. Although Sinclair lost the election to his Republican opponent, he did draw local and national attention to several of his ideas. The biggest threat to the president, however, came from corrupt but beloved Louisiana senator Huey “Kingfish” Long (Figure 26.11). His disapproval of Roosevelt came in part from his own ambitions for higher office; Long stated that the president was not doing enough to help people and proposed his own Share Our Wealth program. Under this plan, Long recommended the liquidation of all large personal fortunes in order to fund direct payments to less fortunate Americans. He foresaw giving $5,000 to every family, $2,500 to every worker, as well as a series of elderly pensions and education funds. Despite his questionable math, which numerous economists quickly pointed out rendered his program unworkable, by 1935, Long had a significant following of over four million people. If he had not been assassinated by the son-in-law of a local political rival, he may well have been a contender against Roosevelt for the 1936 presidential nomination.

PDF page 725: The Banking Act of 1935 was the most far-reaching revision of banking laws since the creation of the Federal Reserve System in 1914. Previously, regional reserve banks, particularly the New York Reserve Bank—controlled by the powerful Morgan and Rockefeller families—had dominated policy-making at the Federal Reserve. Under the new system, there would be a seven-member board of governors to oversee regional banks. They would have control over reserve requirements, discount rates, board member selection, and more. Not surprisingly, this new board kept initial interest rates quite low, allowing the federal government to borrow billions of dollars of additional cash to fund major relief and recovery programs. In 1935, Congress also passed the Emergency Relief Appropriation Act, which authorized the single largest expenditure at that time in the country’s history: $4.8 billion. Almost one-third of those funds were invested in a new relief agency, the Works Progress Administration (WPA). Harry Hopkins, formerly head of the CWA, took on the WPA and ran it until 1943. In that time, the program provided employment relief to over eight

PDF page 725: The Banking Act of 1935 was the most far-reaching revision of banking laws since the creation of the Federal Reserve System in 1914. Previously, regional reserve banks, particularly the New York Reserve Bank—controlled by the powerful Morgan and Rockefeller families—had dominated policy-making at the Federal Reserve. Under the new system, there would be a seven-member board of governors to oversee regional banks. They would have control over reserve requirements, discount rates, board member selection, and more. Not surprisingly, this new board kept initial interest rates quite low, allowing the federal government to borrow billions of dollars of additional cash to fund major relief and recovery programs. In 1935, Congress also passed the Emergency Relief Appropriation Act, which authorized the single largest expenditure at that time in the country’s history: $4.8 billion. Almost one-third of those funds were invested in a new relief agency, the Works Progress Administration (WPA). Harry Hopkins, formerly head of the CWA, took on the WPA and ran it until 1943. In that time, the program provided employment relief to over eight

PDF page 734: Brains Trust an unofficial advisory cabinet to President Franklin Roosevelt, originally gathered while he was governor of New York, to present possible solutions to the nations’ problems; among its prominent members were Rexford Tugwell, Raymond Moley, and Adolph Berle Civilian Conservation Corps a public program for unemployed young men from relief families who were put to work on conservation and land management projects around the country interregnum the period between the election and the inauguration of a new president; when economic conditions worsened significantly during the four-month lag between Roosevelt’s win and his move into the Oval Office, Congress amended the Constitution to limit this period to two months Social Security a series of programs designed to help the population’s most vulnerable—the unemployed, those over age sixty-five, unwed mothers, and the disabled—through various pension, insurance, and aid programs Supreme Court Packing Plan Roosevelt’s plan, after being reelected, to pack the Supreme Court with an additional six justices, one for every justice over seventy who refused to step down Tennessee Valley Authority a federal agency tasked with the job of planning and developing the area through flood control, reforestation, and hydroelectric power projects Works Progress Administration a program run by Harry Hopkins that provided jobs for over eight million Americans from its inception to its closure in 1943

PDF page 726: million Americans, or approximately 20 percent of the country’s workforce. The WPA funded the construction of more than 2,500 hospitals, 5,900 schools, 570,000 miles of road, and more. The WPA also created Federal Project Number One, which employed approximately forty thousand artists in theater, art, music, and writing. They produced state murals, guidebooks, concerts, and drama performances all around the country (Figure 26.12). Additionally, the project funded the collection of oral histories, including those of formerly enslaved people, which provided a valuable addition to the nation’s understanding of slave life. Finally, the WPA also included the National Youth Administration (NYA), which provided work-study jobs to over 500,000 college students and four million high school students.

PDF page 726: With the implementation of the Second New Deal, Roosevelt also created the country’s present-day social safety net. The Social Security Act established programs intended to help the most vulnerable: the elderly, the unemployed, the disabled, and the young. It included a pension fund for all retired people—except domestic workers and farmers, which therefore left many women and African Americans beyond the scope of its benefits—over the age of sixty-five, to be paid through a payroll tax on both employee and employer. Related to this act, Congress also passed a law on unemployment insurance, to be funded by a tax on employers, and programs for unwed mothers, as well as for those who were blind, deaf, or disabled. It is worth noting that some elements of these reforms were pulled from Roosevelt detractors Coughlin and Townsend; the popularity of their movements gave the president more leverage to push forward this type of legislation.

PDF page 726: To the benefit of industrial workers, Roosevelt signed into law the Wagner Act, also known as the National Labor Relations Act. The protections previously afforded to workers under the NIRA were inadvertently lost when the Supreme Court struck down the original law due to larger regulatory concerns, leaving workers vulnerable. Roosevelt sought to salvage this important piece of labor legislation, doing so with the Wagner Act. The act created the National Labor Relations Board (NLRB) to once again protect American workers’ right to unionize and bargain collectively, as well as to provide a federal vehicle for labor grievances to be heard. Although roundly criticized by the Republican Party and factory owners, the Wagner Act withstood several challenges and eventually received constitutional sanction by the U.S. Supreme Court in 1937. The law received the strong support of John L. Lewis and the Congress of Industrial Organizations who had long sought government protection of industrial unionism, from the time they split from the American Federation of Labor in 1935 over disputes on whether to organize workers along craft or industrial lines. Following passage of the