Evaluating the New Deal, including the recession of 1937 to 1938, the impact on women and African Americans, and historians' assessments

What this dot point is asking

NESA expects you to evaluate the New Deal across recovery, relief, reform, and reach. Strong answers integrate the macroeconomic record (incomplete recovery, the 1937-38 recession), the relief programs, the structural reforms, the limited reach to African Americans and women, the political legacy (New Deal coalition), and the historiographical debate.

The answer

Recovery: incomplete

Real GDP rose around 36 per cent from 1933 to 1937. Industrial production regained its 1929 level by 1937. Unemployment fell from around 25 per cent (1933) to around 14 per cent (1937). These were the fastest peacetime growth figures in American history.

But recovery was incomplete. Unemployment never fell below 14 per cent in the 1930s. The "Roosevelt recession" of August 1937 to June 1938 sent industrial production down around 30 per cent and unemployment back up to 19 per cent, the consequence of premature budget tightening and a Federal Reserve hike in reserve requirements. The Depression ended only with war mobilisation; unemployment fell below 5 per cent in 1942 and to 1.2 per cent in 1944.

Relief: substantial

The New Deal moved around 35 million Americans through some form of federal relief at peak.

Direct employment. The Civilian Conservation Corps employed around 3 million men over its life (1933 to 1942) on reforestation and parks. The Civil Works Administration employed 4 million through the winter of 1933 to 1934. The Works Progress Administration employed around 8.5 million on 1.4 million projects between 1935 and 1943. The Public Works Administration built 34,000 major construction projects.

Cash relief. The Federal Emergency Relief Administration distributed 500 million dollars in grants to states from May 1933. Around 20 per cent of Americans received some federal cash relief in 1934.

Mortgage relief. The Home Owners' Loan Corporation refinanced around 1 million mortgages (around 20 per cent of all American urban mortgages) between 1933 and 1936. The Federal Housing Administration (1934) standardised the 20- and 30-year fixed-rate mortgage.

Farm relief. The AAA, the Farm Credit Administration, the Soil Conservation Service, and the Farm Security Administration delivered price supports, debt restructuring, and land resettlement. The Rural Electrification Administration (May 1935) raised farm electrification from 10 to 25 per cent by 1939.

Reform: structural

The Depression-era reforms built the architecture of the modern American state.

Finance. The Federal Deposit Insurance Corporation (1933) ended the banking panic; bank failures fell from 4,000 in 1933 to around 50 a year by 1934. The Securities Act (1933) and Securities Exchange Act (1934) created the SEC. Glass-Steagall (1933) separated commercial and investment banking until its repeal in 1999. The Banking Act of 1935 centralised power in the Federal Reserve Board.

Labour. The Wagner Act (1935) created the National Labor Relations Board. Union membership rose from 3.5 million (1935) to 8.4 million (1939). The Fair Labor Standards Act (1938) established a federal minimum wage and 40-hour week.

Welfare. The Social Security Act (1935) created old-age pensions, unemployment insurance, and Aid to Dependent Children. The Federal Insurance Contributions Act (1939) restructured Social Security taxation.

Regulation. The Federal Communications Commission (1934), the Public Utility Holding Company Act (1935), and the Civil Aeronautics Authority (1938) created the regulated industries.

Limited reach: African Americans

The New Deal's impact on African Americans was contradictory.

Where it reached. Black Americans benefited from WPA employment (around 350,000 employed at peak), CCC enrolment (around 250,000 over its life), and HOLC refinancing. Roosevelt appointed a "Black Cabinet" of around 45 African American advisers under Mary McLeod Bethune. Eleanor Roosevelt was an outspoken ally.

Where it did not. The NRA codes were administered by local employers; Black workers were paid less than the prescribed minimums or excluded. AAA acreage reduction payments went to white landowners, who evicted Black sharecroppers; around 192,000 Black sharecroppers lost their land. The CCC was racially segregated. The HOLC's "residential security maps" introduced the practice of "redlining" Black neighbourhoods, with effects on home ownership lasting decades.

Social Security as enacted in 1935 excluded farm workers and domestic servants, who were two-thirds of Black workers, in a concession to Southern Democrats. Anti-lynching bills (the Costigan-Wagner Bill of 1934 and the Wagner-Van Nuys Bill of 1937) were filibustered to death; Roosevelt refused to push them in order to keep Southern support.

The political result was nevertheless transformative. In 1932 Black voters were still 70 per cent Republican (the party of Lincoln); by 1936 they were 71 per cent Democrat. The realignment held for the rest of the century.

Limited reach: women

The New Deal advanced women in some respects and held them back in others.

Where it reached. Frances Perkins was the first woman Cabinet member (Secretary of Labor). Women's Bureau head Mary Anderson, and Eleanor Roosevelt, exercised real influence. The Fair Labor Standards Act benefited women disproportionately because they were concentrated in low-paid work.

Where it did not. Section 213 of the Economy Act (1932) and subsequent rules required that married women lose federal jobs if their husbands were federal employees; around 1,600 women were dismissed by 1933. NRA codes in around a quarter of industries set women's wages below men's. Only around 13 per cent of WPA jobs went to women. Domestic workers (largely Black women) were excluded from the Wagner Act, Social Security, and the Fair Labor Standards Act.

The Indian Reorganization Act

The Indian Reorganization Act (Wheeler-Howard Act, 18 June 1934), pushed through by Commissioner of Indian Affairs John Collier, ended the policy of allotment (the Dawes Act of 1887) and encouraged tribal self-government. It restored around 2 million acres of land, ended the prohibition on tribal religious practice, and granted federal funds for tribal economic development. Collier's policy was controversial; some tribes resisted his model. It nevertheless marked the largest change in federal Indian policy since the 1880s.

The New Deal coalition

Roosevelt's electoral coalition (Solid South + urban Catholics + Jewish voters + African Americans + organised labour + farmers + intellectuals) dominated American politics from 1932 to 1968 and elected Truman (1948), Kennedy (1960), and Johnson (1964). It cracked over civil rights in 1948 and broke up in 1968.

Historiography

William Leuchtenburg (Franklin D. Roosevelt and the New Deal, 1963) is the founding standard liberal account.

Arthur M. Schlesinger Jr. (The Age of Roosevelt, 1957 to 1960) is the longer and more partisan companion volume.

Anthony Badger (The New Deal, 1989) is the major British synthesis.

Alan Brinkley (The End of Reform, 1995) distinguishes the structural reformist New Deal (1933 to 1935) from the Keynesian compensatory New Deal that emerged after 1938.

David Kennedy (Freedom from Fear, 1999) is the Pulitzer-winning narrative; argues "security" was the New Deal's organising idea.

Harvard Sitkoff (A New Deal for Blacks, 1978) is the standard on African Americans.

Susan Ware (Beyond Suffrage, 1981) is the standard on women.

Jim Powell (FDR's Folly, 2003) and Burton Folsom (New Deal or Raw Deal?, 2008) are the major libertarian critiques.

Eric Rauchway (The Money Makers, 2015) defends the New Deal as the foundation of post-war American hegemony.

Common exam traps

Saying the New Deal "ended the Depression". It did not; war mobilisation did.

Forgetting the 1937-38 recession. A 30 per cent fall in industrial production in nine months matters.

Treating the New Deal as universally beneficial. Sharecroppers, married women in federal employment, and domestic workers had grounds for grievance.

In one sentence

The New Deal achieved partial recovery (unemployment from 25 to 14 per cent, reversed by the 1937-38 recession), substantial relief (CCC, WPA at 8.5 million, FERA at 35 million Americans), and structural reform (FDIC, SEC, Wagner Act, Social Security, FLSA) that built the modern American state, but its reach was limited by exclusion of farm workers and domestic servants from Social Security, by segregation in the CCC, by redlining at the HOLC, and by the political constraint of Southern Democrats, and historians from Leuchtenburg to Powell continue to disagree on the verdict.