The New Deal by Paul K. Conkin for the Crowell American History Series,1967
CHAPTER ONE – ROOSEVELT
The New Deal was an exceedingly personal enterprise. Its disparate programs were unified only by the personality of FDR.
Surely the sympathetic reports of FDR are more revealing. Hate is a poor vehicle for communicating personality. But even the best portraits, conceived in love, may still seem unlovely to another generation.
There was much to fear in 1933, as there is today. Only fools or gods believed otherwise. He had the commanding presence often observed in single children. The world was his opportunity; there was nothing to fear, so much as to master.
Conservation of natural resources, a near-romantic love of trees, concern with agricultural problems were deep commitments always colored by happy memories.
Few families could afford an ample mansion, tutors, servants, books and music, and yearly trips to European bathing places. In both the Roosevelt and Delano families, financial security was a product of several generations of effort, mostly in commercial and navigational enterprises. James Roosevelt, at least in his later years, appeared to be an English country gentleman, supervising his estate and serving mankind.
To FDR the real world was always Hyde Park. All else was done on behalf of it. Business was a game that had to be played, but that was not the aim. FDR wanted others to play the economic game as he did and never understood others who didn’t. He didn’t like those that didn’t live up to a gentleman’s code. He denounced such men as economic royalists and traitors to their class and position in the community; sinful trustees of their inheritances.
Just as with Elenaor, he accepted others, used them, flattered them, but never reciprocated in kind. As a self-assured, godlike person, he allowed all devoted disciples to bask I his charm, draw strength from his surety, and eventually share in his fame. They flocked to him because of their own insecurity and need and his supreme strength.
Polio had no apparent long term effect on his personality. He was the same in 1928 as 1921. Polio made the aristocratic Roosevelt an underdog. For him it replaced the log cabin.
His interest in most subjects reached its saturation point when the broader results and more general themes had been reached. This prepared him for his forte – the active and fighting side of life.
His years at Groton and Harvard just reinforced his basic personality. The Groton curriculum was classical, with manners, taste, and moral habits more esteemed goals than sheer intellectual attainment.
Somewhat out of place in America, the Groton curriculum prepared one for an almost nonexistent aristocracy.
Noblesse oblige, manly Christianity, civic duty, and love of God were stressed.
He did fall in love with books, but only to collect. His biggest achievement was being the editor of the Harvard Crimson. He turned it into a football cheering school spirit paper.
God was synonymous with a meaningful universe for him. One in which human action had meaning. He loved the vast panorama of the US history in the way that he loved his school team. God, Country, college, estate, family, party, team – all were revered. Honor, loyalty, dutiful service were proffered to each. His faith could preserce a society at a time when courage was more needed than penetrating insight.
He has been called pragmatist. But he had no knowledge of the neo-Hegelian system of John Dewey. In his traditional attitudes and beliefs, his lack of philosophical concern, his generalized but simplistic religion, his lack of esthetic sensitivity, FDR was the very antithesis of pragmatism. The idea of experimentation, as articulated by Dewey and implied in modern science, does not relate to FDR’s haphazard, theoretically attenuated programs.
Even his acclaimed willingness to learn by experience has been overemphasized. He rarely repudiated any of his past choices or admitted failure. There were pragmatists and near pragmatists in the program though.
As an active and busy man, without disciplined mental habits or a capacity for sustained thought, FDR admittedly was not equipped to make any great contribution to American political thought. In no sense was he a Jefferson or even a Wilson.
Positively, FDR never formed a narrow, exclusive political church. Widely varied ideas neither threatened nor disturbed his own invulnerable verities, nor could any of them convert him to a new point of view. He simply did not understand at that level.
The very absence of involvement with his family, the lack of agonizing self-criticism, freed his agile mind for the near infinite minutiae of politics – the flattery of names remembered, the tidbits of personal or local history recalled.
Personal appeal, plus general promises were usually enough to win him elections, whereas less persuasive politicians were often forced to rely more on policies.
FDR first learned about national politics as Wilson’s Assistant Secretary of the Navy. Here he learned something of production, about labor unions and labor leaders, and about competitive techniques in business. The yardstick justification for limited government ownership came from his navy experiences.
FDR’s two terms as governor of NY place him in a national spotlight.
Militantly insisting on state rights, he was not even very co-operative in early federal programs of public works. As late as 1930 he condemned Hoover’s policies as too radical, as contrary to supply and demand, and, in the case of public works, as too big a drain on the treasury.
CHAPTER TWO – CLOUDS OVER A NEW ERA, 1932 – 1934
By historical habit, the New Deal has usually been divided into two parts. The shift of policy into a divisive class appeal and toward a welfare legislation being the division marker. Certainly, major changes did occur in 1935, but they overlay continuities in agricultural policy and in resource management.
The twenties, instead of representing a vast, delusive economic bubble, as so often suggested by popular historians, pointed to almost infinite economic possibilities. Laissez faire was a near meaningless, largely emotive term by the 20th century.
Hoover wanted a greater sense of community responsibility, a fully moralized as well as rationalized market. To this end he appealed to various groups and had a pathetic reliance on persuasion and moral lectures even after 1929.
The state was an instrument, but government, a tool of private choice, should not make the crucial choices, even after a broad mandate like the one FDR had, said Hoover.
Trying never to violate freedom, facing a hostile Congress, Hoover did everything possible within his frame of values. In 1929 the international market was pined up by American credit and imperiled by trade barriers and nonliberal ideologies. By 1931 it collapsed. A free American market could not survive without a free and prosperous international market (and probably not without some variety of imperialism).
Concerned about the European war debts, personally committed to debt reduction and postponed payments as a generous aid to European recovery, he wanted Roosevelt at least to co-operate in choosig delegates.
Roosevelt began to sabotage Hoover’s dream of an honest and generous America coming to the aid of European governments. He rejected old Wilsonian internationalism at the economic level.
Opinion polls, as late as 1939 showed less than 20 percent of Americans willing to accept such mild expedients as unbalanced federal budgets. In this sense, Roosevelt was as captive to events as Hoover, despite all his political strength. (pg 33)
No one can say for sure, but an avowedly pro-business administration in 1933, with a relatively small amount of aid to producers, might have encouraged a spiral of recovery, but recovery without significant safeguards against future depressions.
The early New Deal had more treats for business than for any other group. The National Industrial Recovery Act (NIRA) actually provided two main forks of recovery. The first was public works. The successful Public Works Administration allocated over three billion dollars, but the actual construction proceeded too slowly to have any drastic effect on recovery.
The NRA on the other hand, represented a vast potential for the imposition of central economic plans upon private corporations. But it was the businessmen who dominated the early NRA, both in the writing and the enforcement of codes.
After the ailing NRA was ruled unconstitutional in 1935, many businessmen gladly went back to clandestine collusion.
Tugwell is often considered the architect of the first New Deal. He drew up plans but they weren’t implemented. He wanted major structural changes in the economy. He hated progressivism, defined by him as rural, Jeffersonian attempts to atomize and fragment the economy. The controls and central planning of WW I seemed an unfulfilled promise, which he hoped the NRA could implement.
Like Berle, he felt that management, not ownership, had to be socialized and moralized and thus advocated nationalization only when private industry refused to fulfill public goals.
If not planning, but only a few gestures toward planning, if not an alliance with business, but only a few resented gifts, then the New Deal had only one avenue left for recovery – spending , and as a necessary concomitant, higher taxes or borrowing or both.
In 1932 the basic ideas of Keynes were known by American economists. But Roosevelt never accepted the desirability of massive borrowing until 1935 and had few advisors who did. But he did talk about purchasing power a lot.
Since the Farmer’s lack of purchasing power affected the whole economy, there was both an economic and a moral problem. By acreage or market controls, the consumer could be forced to pay higher prices. But either technique would draw funds from all consumers and most penalize the low-income group.
The AAA reduced production in return for sufficient government payments. The payments came from taxes on processing companies, and so consumers indirectly. But in limiting acreage, it forced sharecroppers off the land and worsened the plight of farm laborers. It inevitably aided large farm owners. And enforced scarcity horrified urban liberals. And, at the same time, it provided extra income for the very groups least inclined to spend.
For monetary inflation he took us off the gold standard, stopped gold shipments abroad and propped up the price of silver. Adversely, the almost halved the dollar raised the tariff by nearly 50% and thus helped to bolster a wall of economic nationalism.
To aid both financial institutions and home owners, the Home Owners Loan Corporation refinanced mortgages, deferring or spreading out payments over 60 years and, when necessary, suffering any eventual loss.
Of all early New Deal measures the TVA was the most imaginative in conception and successful in operation. The TVA proved efficiency, flexibility, and social concern possible in government – owned, nonprofit corporations.
FDR’s failure to pursue on coherent program allowed a greater variety of fascinating people to enter the government.
CHAPTER THREE – ORIGINS OF A WELFARE STATE, 1934 – 1936
The misery of depression multiplied the need for public welfare. This made a deficit possible. So in 1935 Congress introduced a body of legislation that created a welfare state with unbelievable speed.
In the past welfare always meant opportunity. In a free society, with beckoning opportunities, no special privileges, each individual or cooperative effort to take advantage of existing opportunities was conceived as a lesson in responsibility, as an inducement to good character, and as a fulfilling experience. Such a simple but profound faith lay at the moralistic heart of American politics.
The faith survived, but not the supporting environment. To an old Jeffersonian liberal like Hoover [wow!] this was a big negative. Sustained gifts from government would create a passive, alienated group of men, without a real stake in society, with no compelling involvement, and with a dangerous political tendency to march in step with any demagogue promising more welfare.
Criticism from the socialist left said welfare would still the voice of dissent, and by stimulating consumption and higher profits, represent a type of government insurance for a capitalist economy.
The welfare legislation of 1935 marked the second New Deal. Congress approved a 4,880,000,000 Emergency Relief Appropriation, to be spent as FDR saw fit. It was the largest appropriation in American history and the largest accretion to the national debt.
Against the wishes of liberals in Congress, WPA wages were generally scaled below those of private industry. The WPA only employed about a third of those with need.
Less expensive and more daring was the WPA’s subsidy to arts and scholarship. The most rewarding aspect of these programs was the degree of participation.
Tugwell headed the Resettlement Administration (RA). It fought for equal benfits for Negroes and set up group medical plans. It worked to alleviate the plight of the Oakies. It loaned funds to small farmers and took a percentage of their crops as repayment.
The Social Security Act originally excluded about half of the people, including farmers, domestics, and the elderly. The employee tax represented a significant drain from already low payrolls and thus a further obstacle to recovery. The original act did not protect against accidents and illness before retirement, provided no medical insurance, and paid benefits on the basis of past earning instead of present needs.
The unemployment insurance provision delegated most responsibility to the states and invited chaotic variations in always inadequate payments.
Until 1935, FDR was clearly pro-agriculture, even pro-labor, but not pro-union. Section 7 (a) of the nIRA if liberally interpreted, was indeed the long-awaited Magna Carta of organized labor.
Wagner’s act passed without FDR’s blessings. It guaranteed the right of collective bargaining by a union chosen by a majority of employees, legalized collective action (strikes, boycotts).
Tax proposals in the Spring of 1935 has “soak-the-rich” provisions and started an embittered controversy. It marked the most decisive turn by Roosevelt from consensus politics to a clear appeal to the disinherited. The tax rested on the depressing fact that so far New Deal policies had created a more regressive tax system with greater burdens on consumption and low incomes than large ones.
In all, small tax increases produced only $250 million in annual revenue. The bill neither soaked the rich, penalized bigness, or significantly helped balance the budget.
The Rural Electrification Administration (REA) provided low-interest loans to rural co-operatives, which built their own lines and either manufactured or purchased their own power. It became on e of the most successful of New Deal agencies, providing not only low-cost power to remote areas but valuable lessons in co-operation and local democracy.
There was no market for low interest rates. The new Federal Reserve controls, added to the sustained incomes provided by Social Security, were good tools for fighting against another severe depression but impotent for recovery. Eccles realized this and advocated continued deficit spending, preferably on large public works projects.
But these infusions were countered by factors that inhibited private spending. Every new stimulant acted as a depressant on the minds of the affluent. This was aggravated by the almost total lack of dialogue between the government and business.
In FDR’s terms, every New Deal “reform” was a generous act by good men of power against bad men of power. FDR (abetted by many historians) generally finding most Republican politicians, conservative Southern Democrats, and at least four Supreme Court judges to be bad men of power, allied to numerous bad men throughout the country.
Since the New Deal failed to fulfill even the minimal dream of most reformers, why did all the evil men of power, plus millions of Republican dupes oppose it? To Roosevelt the answer was simple: they were evil.
The opponents of FDR misconstrued the direction of the New Deal. Many believed FDR’s class rhetoric. They really thought America was losing its “free” capitalist soul to some type of socialism.
But the irony is here. The enemies of the New Deal were wrong. They should have been friends. People of power gained added security and lost only two commodities: undisciplined freedom and a degree of popular respect. The last they regained quickly. Government spending was to be the final and most complete insurance policy for American capitalism. After 1937, even FDR reluctantly swallowed this pill.
Adam Smith tried to get freedom, Keynes tried to keep as much as possible. They are both, then classical. His prescription allowed the payment of debts and welfare without regressive taxes or redistribution. But WWII had high taxes to pay for all. With big subsidies business would take some price administration.
Business feared the concentration of power that FDR had. He never convinced business folk that he wouldn’t take over their plants. Corporate welfare with strings attached helped us reach national goals. Bureaucrats started going from Ivy Leagues, to business to Washington. The new situation wasn’t pro-individualistic capitalist maverick.
Eventually government and business made a happy couple.
What of a just community or moral and religious visions here? The individual entrepreneur? Government subsidies corrupted the poor and the wealthy. Ugliness and spiritual poverty were results. The blessing of leisure could make for the curse of idleness. The poor still existed and were ignored until the 1960s amidst the welfare.
CHAPTER FOUR - THE PERILS OF DEPRESSION POLITICS, 1936-1938
The legislative climax of 1935 preceded the political climax of 1936. But as in 1932 what his mandate was for wasn’t clear. Then in the court fight of 1937 and the new depression of 37 he lost a lot of his clout. By 38 he was imprisoned. He got political clout at the expense of the New Deal.
In 36 the New Deal was untouchable by all that wanted to be re-elected. Those who went against it were the rich spoiled. He beat Alf Landon easily. No new programs, just a vote for the person of FDR. Issues were, anyhow, beyond comprehension. Stalin and Hitler had cult of personality claims for the same reason. His lack of a new program and continuance of the depression mattered not. He was for the people, those against him were against the people.
It is easy and pointless to label him a demagogue. Politics are never dispassionate analysis of issues. This except Wilson’s 1912 campaign, which was like a lecture on political science.
FDR never chose between centralization and decentralization (the AAA and RA were farm programs that existed simultaneously). Welfare was the only consistency. In 1936 there was less emergency and he didn’t label it as one to create a sense of national emergency (otherwise he would be a demagogue). But he also made no effort to educate the populace.
He didn’t embrace experimentalism, which would have entailed a tenativeness that doesn’t do well politically. Had he been clear, he could have educated the populace and gotten a clear mandate. But he would have also risked losing. He played it safe.
Contrary to popular lore, FDR moderated radical youth in the congress. Congress often pushed for things he allowed at a more mellow level (not vice versa).
In 36 he won so well, that there was no opposition. Therefore, his own party split. Congress got harder to rule. But for peace time he was powerful. All diaries point to efforts to curry favor with “the boss”. He kept a divergent group of administrators together with winks, gossip and a contagious burst of appreciative laughter, private jokes or shared secrets. He was a charmer. All felt they were in the center of things.
But he demanded total loyalty from his subordinates. And he was very reluctant to turn on loyal incompetents (not wanting to hurt their feelings).
As a representative of “the people” chosen popularly, he was impatient when his (their) will was opposed. The Court bill of 1937 was rejected, but one vote switched and one judge retired during this time.
But the judges weren’t shy of judicial review. Undue legislative power, over extension of the commerce clause, denial of due process and contract rights were all reasons they used. His loss here gave the Republicans a new lease on life.
The court fight was followed by a new depression, an increasingly hostile congress and few achievements. In the 38 elections he went against some conservative democrats and won one battle and made many enemies. He could still win the people, but not the representatives.
There were many causes of the 1937 mini-depression. Amongst these were the drastic curtailment of relief expenditures in 1937, plus the termination of the PWA. But the budget was balanced. There was also a raising of the reserve requirements for banks by the Feds. This led to a rise in local interest rates.
All these were small but everyone was jittery. There were many sit down strikes in 1936 and wages went up and dividends were distributed quickly and investments low due to fear of government intervention.
This showed how little was learned, despite the constant tinkering, in the New Deal years. All major economic choices were still done by private parties. The hostility between him and private parties didn’t help things.
In 1938, he went back onto deficit spending and this sparked a recovery. This was coupled with anti-monopoly action (didn’t help) and a repeal of the undistributed profit taxes (FDR was al over the place). Larger European defense budgets helped too.
The New Deal stopped growing, it did not disappear. Regulated welfare capitalism still stands.
The New Dealers, were a short term failure, but long term helped create a stable capitalism. The old New Dealers wanted more. They were into social justice as well as prosperity. Meaning and participation in the collective good of society. They were out of touch in the prosperous 1950s.
For critics like Dewey, the New Deal wasn’t a dream unfulfilled, but a misdirection from the first place. It began and ended with conventional, over-simplified half-answers. They wanted Tugwell to lead but had no access to power. To get power they need resignation from the masses. But, FDR gave hope.
The thirties could have been much better and much worse. Be a fair historian. FDR had intellectual limitations that hurt his cause, but strengths too. We want to use the past and be fair to it. Your criticism must be kind and also aimed towards your institutions and time. Your evaluation must be just, thorough, and honest; otherwise, you practice self-deceit.
A NOTE ON NEW DEAL HISTORIOGRAPHY
The harvest of New Deal scholarship is in. There are theses on everything. Most of it is either broad sweeps or narrow monographs. Intermediate surveys necessarily based on less than definitive research but supported by careful thought are needed. It cannot be partisan. Time and perspective will give us that.
He likes Frank Feidel’s book. Edgar Robinson’s is a deprecatory biography by a competent scholar. He is well researched, but terribly one-sided. Burns’ is a sociological defense that says FDR could have done no other. There are personal memoirs. One by Tugwell. 168 days by Alsop is the best history of the New Deal Supreme Court.