The Second New Deal, including the Wagner Act, the Social Security Act, the WPA, the court-packing plan, and conservative and radical opposition

What this dot point is asking

NESA expects you to give an integrated account of the Second New Deal of 1935 to 1938 and the political opposition Roosevelt faced from both right and left. Strong answers integrate the radical critics (Long, Coughlin, Townsend), the conservative critics (the Liberty League, the Supreme Court), the major Second New Deal legislation (Wagner, Social Security, WPA, Revenue Act of 1935), the 1936 election landslide, and the court-packing fight of 1937.

The answer

The pressures of 1934 to 1935

The 1934 mid-term elections, against all precedent, strengthened the Democratic majorities (74 to 21 in the Senate, 322 to 103 in the House). The First New Deal had stabilised the economy, but unemployment remained around 22 per cent and the political mood was radicalising on both sides.

Senator Huey Long of Louisiana, the populist "Kingfish", broadcast his "Share Our Wealth" speech on 23 February 1934. His program: cap personal fortunes at 5 million dollars; cap incomes at 1 million; guarantee every family a "household estate" of 5,000 dollars and an annual income of 2,000 to 2,500; introduce free college, pensions, and a 30-hour week. By August 1935 the Share Our Wealth Society had 27,000 clubs and claimed 7 million members. Long was assassinated by Carl Weiss in Baton Rouge on 8 September 1935.

Father Charles Coughlin, parish priest at the Shrine of the Little Flower in Royal Oak, Michigan, broadcast a weekly Sunday programme to an estimated 30 million listeners. Initially a Roosevelt supporter ("Roosevelt or Ruin", 1932), he turned against the New Deal in 1934 and founded the National Union for Social Justice in November 1934. By 1936 his rhetoric was overtly anti-Semitic; he was forced off the air by his Church in 1942.

Dr. Francis Townsend, a retired California physician, proposed in January 1934 a federal pension of 200 dollars a month to every American over 60, funded by a 2 per cent national sales tax and on condition that the entire pension be spent within 30 days. The plan would have cost around half of national income; the Townsend clubs reached around 2.2 million members by 1936.

The combined Long-Coughlin-Townsend movement threatened Roosevelt's renomination. The political logic of the Second New Deal was to draw their voters back.

The Second New Deal

The Second Hundred Days (June to August 1935) produced four major Acts.

The Wagner Act / National Labor Relations Act (5 July 1935). Replaced Section 7(a) of the unconstitutional NIRA. It established the National Labor Relations Board, banned a list of unfair labour practices, and required employers to bargain in good faith with unions chosen by majority vote of workers. Union membership rose from around 3.5 million (1935) to around 8.4 million (1939); the Congress of Industrial Organizations (CIO) was founded in November 1935 and organised the mass-production industries.

The Social Security Act (14 August 1935). Established:

• Old-age pensions (payable from 1940) funded by employer and employee payroll taxes.
• Federal-state unemployment insurance.
• Federal grants for Aid to Dependent Children, the blind, and the disabled.
• Initial coverage excluded farm workers and domestic servants, who were disproportionately African American.

The Works Progress Administration (8 April 1935). Under Harry Hopkins, the WPA was a direct federal employer rather than a grant-maker to states. By its end in 1943 it had employed around 8.5 million Americans on around 1.4 million projects: schools, libraries, airports, post offices, the Lincoln Tunnel, La Guardia Airport, and the WPA Federal Theater, Federal Writers', and Federal Art Projects.

The Revenue Act of 1935 (the "Wealth Tax Act", 31 August 1935). Raised top marginal income tax to 75 per cent on incomes over 5 million dollars and lifted estate, gift, and excess profits taxes. Critics called it the "Soak the Rich" Act.

The Public Utility Holding Company Act (28 August 1935) broke up the pyramided utility empires associated with Samuel Insull. The Banking Act of 1935 (23 August 1935) centralised power in the Federal Reserve Board (now under Marriner Eccles).

The 1936 election

The Republican convention nominated Governor Alf Landon of Kansas. The Liberty League and conservative Democrats endorsed Landon. Long's successor Gerald L.K. Smith ran with the Union Party candidate William Lemke (a Townsend, Coughlin, and Smith composite).

Roosevelt's coalition (the "New Deal coalition") united the Solid South, urban Catholics and Jews, African Americans newly switched from the Republicans, organised labour, and farmers. The result on 3 November 1936:

• Roosevelt 27,752,648 votes (60.8 per cent) and 523 electoral votes (Maine and Vermont alone went Republican).
• Landon 16,681,862 (36.5 per cent) and 8 electoral votes.
• Lemke 892,378 (1.9 per cent).

The landslide was the largest since 1820. Democrats took 76 to 16 in the Senate and 334 to 88 in the House.

The court-packing plan

The Supreme Court had struck down the National Industrial Recovery Act in Schechter Poultry Corp. v. United States (27 May 1935), the Agricultural Adjustment Act in United States v. Butler (6 January 1936), and the Bituminous Coal Conservation Act in Carter v. Carter Coal (May 1936). Roosevelt feared the Court would dismember the Second New Deal too.

His Judicial Procedures Reform Bill (5 February 1937) proposed that the President be authorised to appoint a new justice for each justice over 70 who had served 10 years, up to a total of 15. Six of the nine justices were over 70. The plan was widely seen as a constitutional power grab.

Two things saved the New Deal without saving the bill:

The "switch in time that saved nine". Justice Owen Roberts switched sides. On 29 March 1937 the Court upheld a Washington state minimum wage in West Coast Hotel Co. v. Parrish (5 to 4). On 12 April 1937 it upheld the Wagner Act in NLRB v. Jones and Laughlin Steel Corp. (5 to 4). On 24 May 1937 it upheld Social Security in Helvering v. Davis.

The Van Devanter retirement. Conservative Justice Willis Van Devanter retired on 2 June 1937. Roosevelt appointed Senator Hugo Black of Alabama. Five further retirements in the next four years gave Roosevelt the most extensive remake of the Court in American history.

The bill was sent back to committee in the Senate on 22 July 1937 in a major political defeat. Senate Democratic leader Joseph Robinson, who would have been Roosevelt's first nominee, had died on 14 July. The court-packing fight permanently divided the Democratic Party between Northern liberals and Southern conservatives and emboldened the conservative coalition that would block further New Deal legislation after 1938.

The 1937-38 recession and the end of the Second New Deal

Confident of recovery, Roosevelt cut spending and Morgenthau pushed for budget balance in 1937. The Federal Reserve doubled reserve requirements between August 1936 and May 1937. The "Roosevelt recession" followed: industrial production fell around 30 per cent and unemployment rose from 14 to 19 per cent between August 1937 and June 1938.

Roosevelt resumed spending with the Emergency Relief Appropriation Act (April 1938). The Fair Labor Standards Act (25 June 1938) established a national minimum wage (25 cents an hour) and a 40-hour week and banned child labour in interstate commerce. The second Agricultural Adjustment Act (16 February 1938) replaced the unconstitutional AAA of 1933.

The 1938 mid-term elections (8 November 1938) saw Republicans gain 81 seats in the House and 8 in the Senate. Combined with Southern Democrats, the conservative coalition ended major domestic legislation. The New Deal as a legislative project was over.

Historiography

Arthur M. Schlesinger Jr. (The Age of Roosevelt, 1957 to 1960) is the founding liberal interpretation.

Alan Brinkley (Voices of Protest, 1982; The End of Reform, 1995) is the major modern interpreter. Voices of Protest is the standard study of Long, Coughlin, and Townsend. The End of Reform argues the New Deal turned from structural reform to Keynesian compensation after 1938.

David Kennedy (Freedom from Fear, 1999) is the standard narrative.

Jeff Shesol (Supreme Power, 2010) is the standard study of the court-packing fight.

Robert McElvaine (The Great Depression, 1984) is the standard social history.

Common exam traps

Treating the New Deal as monolithic. First and Second New Deals are distinct.

Forgetting Huey Long was assassinated. 8 September 1935, six weeks after Social Security.

Treating court-packing as a Roosevelt success. The bill failed; the Court switched. Both are true.

In one sentence

The Second New Deal was forged in 1935 under pressure from the radical left (Huey Long's Share Our Wealth from February 1934, Father Coughlin's National Union for Social Justice from November 1934, and Townsend's pension plan from January 1934) and the conservative right (the American Liberty League of August 1934 and the Supreme Court that struck down the NRA in May 1935 and the AAA in January 1936), produced the Wagner Act of 5 July 1935, the Social Security Act of 14 August 1935, the WPA of 8 April 1935, and the Wealth Tax Act of 31 August 1935, returned Roosevelt with 523 electoral votes in 1936, and broke politically over the court-packing plan of 5 February 1937 and the recession of 1937 to 1938.