Franklin D. Roosevelt and the New Deal, 1932-1940

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William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal, 1932-1940. New York: Harper & Row, 1963.

Contents

Summary

Leuchtenburg’s book is a comprehensive history of events during Roosevelt’s first two presidential terms from 1932-1940. Roosevelt took office at a time when the stock market had crashed, millions were out of work, and banks everywhere were failing. The spreading and deepening depression was causing massive hardship and had generated a national mood of despair. There was pressure to promote inflation to stem falling prices, but Roosevelt subscribed to contemporary economic dogma, which promoted balanced budgets and economy in government. In fact, upon taking office Roosevelt moved quickly to cut $400,000,000 from veterans’ pensions and $100,000,000 from federal employees’ pay. Leuchtenburg shows that under Roosevelt the government took action and raised popular morale by doing so, but his policy was even more deflationary than Hoover’s programs. Leuchtenburg quotes Roosevelt as saying, “Too often in recent history, liberal governments have been wrecked on rocks of loose fiscal policy.” (45)

During the first 100 days of his term, Roosevelt introduced a host of new programs that had positive effects. The Agricultural Adjustment Act helped farmers by supporting prices and extending credit. The Civilian Conservation Corps put people to work on public projects. The Home Owners’ Loan Act saved many home from foreclosure. The Tennessee Valley Authority brought flood control and cheap power to a large area of the South. The Securities Act reformed the securities markets. The National Recovery Act sought to increase wages and lower work hours through voluntary industry codes. While these and other programs were impressive, they did little to speed recovery in the short term. While they supported increasing prices and restricting competition, Leuchtenburg finds that they were not part of any “consistent strategy to boost purchasing power or increase business investment.” (70)

Roosevelt had political rivals and continually battled conservatives in Congress in both parties. Senator Huey Long of Louisiana was a potent rival whose Share Our Wealth campaign had immense popular appeal. Father Charles Coughlin of Michigan, the Radio Priest, developed a huge following with his demonization of bankers and promotion of silver monetization. Dr. Frances Townsend of California promoted a fanciful scheme to pay $200 per month to every citizen over 60 with the requirement that they spend the money immediately. At the same time rising discontent among industrial workers generated labor unrest. Roosevelt supported the labor movement, but he disliked strikers and feared radical influence. As Leuchtenburg states, “As a “patron” of labor, Roosevelt had far more interest in developing social legislation to help the worker than in seeing those gains secured through unions.” (108)

The Social Security Act of 1935 was an extremely important piece of New Deal legislation. It created a national system of old-age insurance and a federal-state system of unemployment insurance. Leuchtenburg points out that it was essentially a very conservative program, extremely deflationary and thus not helpful to the economy. It excluded many classes of workers, such as farm laborers and domestics, and did not address sickness as a cause of joblessness. He states, “In many respects, the law was an astonishingly inept and conservative piece of legislation. . . . By relying on regressive taxation and withdrawing vast sums to build up reserves, the act did untold economic mischief.” (132)

During the second 100 days of Roosevelt’s presidency, deemed by Leuchtenburg as well as Arthur Schlesinger to be the Second New Deal, new legislation supported the labor movement, broke up utility holding companies, brought electric power to rural areas, and regulated the banking system. Roosevelt enraged conservatives, especially the wealthy whose greed he routinely disparaged. However, as Leuchtenburg points out, the most precedent-breaking New Deal projects reflected capitalist thinking. “Roosevelt’s program rested on the assumption that a just society could be secured by imposing a welfare state on a capitalist foundation.” (165)

When the Supreme Court ruled much of the early New Deal legislation unconstitutional, Roosevelt reacted in 1937 with a scheme to pack the court by naming up to six new judges to replace judges who failed to retire within six months after turning 70. Roosevelt characterized his plan as one to promote efficiency in the judicial system, but this approach backfired. The proposal was defeated in Congress, and Roosevelt lost much credibility in the fight. The issue became moot when the Supreme Court justices reversed course and thereafter upheld New Deal laws.

In response to the rising fascist challenge in Europe and Asia, Roosevelt wanted to renounce the prevailing isolationism, but Congress and most of the people wanted nothing to do with European squabbles. The Neutrality Act of 1939 repealed the embargo on arms sales to Europe but required payment in cash and prohibited transport by US ships. The Russian-German treaty of 1939 and Japan’s alliance with the Axis in 1940 made war seem inevitable. The US began seriously to rearm and prepare for conflict in 1940, which is where Leuchtenburg’s account ends.

According to Leuchtenburg, Roosevelt’s most important contribution was creation of the Executive Office of the President in 1939, which gave focus and concentration of power to the Executive Branch, and continued the New Deal drive for a more aggressive, interventionist federal government. As Leuchtenburg says, “Franklin Roosevelt re-created the modern Presidency.” (327)

Leuchtenburg finds that while the New Deal created a more just society and solved many problems, it “left many problems unsolved and even created some new ones,” and “It never demonstrated that it could achieve prosperity in peacetime.” (346) However, despite its lack of success in dramatically affecting the economic conditions, the New Deal produce a more humanitarian approach to government, as “nineteenth-century individualism gave ground to a new emphasis on social security and collective action.” (340) Leuchtenburg concludes, “Roosevelt and his aides fashioned a government which consciously sought to make the industrial system more humane and to protect workers and their families from exploitation.” (332-33)

Franklin D. Roosevelt and the New Deal, 1932-1940 by William Leuchtenburg

From the Mason Historiographiki

William Leuchtenburg. Franklin D. Roosevelt and the New Deal, 1932-1940. New York: Harper & Row, 1963. 391 pp.

Summary

It has been said that the New Deal kept Americans from becoming fascists, communists, or particularly socialists, but they became Democrats instead. This is the point Leuchtenburg tries to make most of all. He is saying that New Deal economic policies, particularly the restriction on production policies, were counterproductive and did nothing to help America out of the Depression. He is saying that FDR’s policies were surprisingly conservative, and not terribly unlike Hoover’s. He did not believe in deficit spending. The New Deal did not solve the Depression, things were just as bad in 1938 as 1932. He is also saying, however, that New Deal policies toward labor and the common man averted social unrest and did much to keep America on an even keel until the war pulled us out of the Depression. He states that while avoiding socialism and not building a welfare state, the limited intervention of the New Deal saved capitalism from a collapse, even if it was saved in a slightly altered form. His final point is showing the dramatic impact the New Deal really had on America, through such long-terms legislation such as the Social Security Act, regulation of banking and Wall Street, and labor union support. According to Leuchtenberg, from henceforth people looked to the federal government to solve their problems, something new to American culture. He sees the beginning of the end of individualism in the New Deal.

Commentary

Chuck Crum, Fall 2009

The study of the New Deal is fraught with difficult economic theory, and large changes in American culture and American society that can be difficult to get a handle on and build a framework around. This work is very perceptive and probably as good as it gets for an overall look at the New Deal and its meaning.

Commentary

Ray Clark, Spring 2006

Franklin D. Roosevelt and the New Deal 1932 – 1940 is a straightforward political history. Leuchtenburg places FDR at the center of his narrative then weaves the numerous threads of New Deal programs, dissident movements, supporters, opponents, and the domestic and international political events around that core. It was complex time. But the author does a good job at trying to make it understandable. First off he keeps to chronological narrative. While there is some skipping back and forth in time for the most part he keeps everything moving forward. When he does shift around in time it is when he dealing with a specific problem, such as unemployment, and the New Deal programs to address that problem. It is obvious when he is doing this so it isn’t disruptive to the main narrative thread. The only time he really steps outside the narrative is when he reviews FDR’s foreign policy. This section is toward the end of the book and is necessary background to the final years of the second term. German aggression and then outright war forced foreign policy to the forefront of political policy considerations. The options discussed and the policies chosen at this point were strongly influenced by what occurred before.

Leuchtenburg also doesn’t adopt an extreme position on FDR or the New Deal. This book is neither a revisionist history arguing that the New Deal worsened and extended the Great Depression nor is a hagiography of Roosevelt presenting him as the one indispensable man. Taking the pro-FDR but objective position allows the author to present opposition and dissident views of the president and his programs in an calm academic fashion. Not everything attempted by Roosevelt was a success. It is important to know why because that was part of the political environment of the time. As much as it may appear that he had everything his own way, Roosevelt was a constrained by Congress, the Courts and public opinion as much as any other president. The author by taking an objective position is able to show this process without having to cast either the president or his opponents as the villain but rather as nothing more than everyday politicians with differences of opinions on how to achieve the desired goal, which in this case is national recovery.

Where Leuchtenburg does a particularly good job is in presenting the national political environment. All through the book he references regional newspapers. The country was still very regional in the1930s. National media in the form of radio broadcasts and motion pictures had begun to breakdown regionalism but the process was just begun. The Great Depression was a national crisis and the New Deal was a national response but the different regions still responded differently. An example of this is the opposition program of Huey Long. While the “Share Our Wealth” movement had chapters throughout the country it was concentrated in the South. Further, people in other parts of the country who were sympathetic to the economic philosophy of the movement were put off by Long’s southern origins and mannerisms.


Dave Smith, Fall 2006

Leuchtenburg uses extensive primary sources, especially manuscript collections, and a wealth of secondary sources to write an engaging account of the New Deal, the programs and policies advocated by Franklin Roosevelt to place the federal government at the center of efforts to pull the country out of the great depression. Leuchtenburg shows that, contrary to popular conceptions, Roosevelt’s policies were not part of a liberal effort to create a welfare state. On the contrary, Roosevelt, like most people at the time, believed in a balanced budget and did not advocate massive government spending. His policies were essentially deflationary. For example, the Civil Works Administration employed millions on public works, but Roosevelt ended it quickly because of its cost. He feared such programs might create a permanent class of reliefers on the government payroll.

The Social Security Act is rightly viewed as one of the most significant New Deal programs, but the old-age insurance system it created was essentially a conservative, and deflationary, program. While it was intended to provide for elderly people, an equally important motive was to have older workers retire and thus create more job opportunities for younger workers. One of the most lasting legacies of the New Deal is the expansive array of farm programs, which made agriculture dependent on federal subsidy programs. Roosevelt and his advisors viewed the farm program as the crucial part of the New Deal. As Leuchtenburg says, “They gave highest priority to raising farm prices in order to restore the balance between industry and agriculture and to provide business with a vast home market.” (35)

A new recession hit in 1937-38 and evidenced the lack of effectiveness of New Deal programs in restoring prosperity. There was pressure to increase federal spending, but there was no consistent strategy, and the result was a hodgepodge of programs that took a piecemeal approach to the problems of lack of purchasing power and business investment, both necessary for a sustained recovery. The reform programs were more effective and lasting than the economic stimulation efforts. The Fair Labor Standards Act improved compensation. The Securities Act regulated the markets. The Banking Act put the banks on sounder footing, and the Public Utility Holding Company Act broke up utility monopolies. The federal government stepped in where state and local governments proved wanting and moved to address the lack of social conscience in the business community. Leuchtenburg argues persuasively that by regulating business, the New Deal could be regarded as a “savior of capitalism.” (336)

Roosevelt constantly struggled to break the iron hold of isolationists over foreign policy. Most Americans believed that working cooperatively with European countries would only cause trouble, and they did not want to repeat their disastrous experience of World War I. In keeping with this mindset, Roosevelt torpedoed the London Economic Conference of 1933. However, he then went on to take the controversial step of recognizing Russia. Critics charged that this action would only support the worldwide communist conspiracy, but Leuchtenburg points out that there was widespread support for the decision, even among conservatives, since it only acknowledged a reality already recognized by all other major nations. Leuchtenburg characterizes it as an event of “monumental unimportance.” (207

Leuchtenberg never really defines the New Deal but seems simply to equate it with the policies of the Roosevelt administrations. He offers no new interpretations of these policies, instead offering support for the prevailing view that they were essentially conservative. The inclusion of foreign policies in his discussion provides a broader treatment of the period, but it is questionable whether foreign policy should be considered part of the New Deal. Leuchtenberg's primary point is that the New Deal represented a shift from nineteenth-century individualism to a new emphasis on social security and collective action. Through reform and regulation Roosevelt's program promoted a more just society while preserving its capitalist foundation.


Lisa Harry, Spring 2007

Leuchtenburg holds both Herbert Hoover and Franklin Roosevelt in high regard. According to Leuchtenburg, no president ever worked harder in the White House than Herbert Hoover."(13) His work ethic was never what held him back politically or prevented him from maintaining the admiration and respect of the American people. According to Leuchtenburg, Hoover was simply “never able to convince the nation that he cared deeply how people were suffering and that he shared with them the sorrows and the blighted prospects the depression had brought.”(13) In addition, he was very negative. From the beginning of the depression “he had approached problems with a relentless pessimism.”(13)


Roosevelt on the other hand was able to connect with the people. According to Leuchtenburg the instillation of hope and courage in the American people was “Roosevelt’s single greatest contribution to the politics of the 1930’s.”(42) He had faith in the future and projected that. He took a very active role in the recovery of the nation. From the very beginning Roosevelt’s administration had an “immense sense of movement.”(47) Leuchtenburg asserts that even though Roosevelt and his programs encountered many difficulties he “remained high-spirited and untroubled.”(168) He always projected a positive outlook on the situation and that permeated into the hearts of the American public.


Roosevelt may not be considered a “successful administrator” in an organizational sense.(328) However, Leuchtenburg asserts that he was a very resourceful leader that had an intense creativity, which qualifies him as a successful administrator. This creativity brought a “spirit of excitement to Washington” that had been absent for quite sometime.(328) This excitement and the idea of working under such a successful administrator “attracted thousands of devoted and highly skilled men to Washington” who “had been fighting for years for lost cause” and they were finally being given a chance to make a difference.(329)


Leuchtenburg has a real admiration for Roosevelt the man and his actions he took during his presidency. While he admits “the New Deal left many problems unsolved and even created some perplexing new ones” Roosevelt’s innovative thinking and his connection with the people makes up for this.(346) People identified with him. He was never afraid to reach out to the public. Through his fireside chats Americans came to feel that he was right there with them during the hard times. They viewed him as their protector and they felt that they could confide in him and trust him to do what was best for them.(330-331)

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