The First New Deal encompassed national planning laws and programs for the needy from 1933 - 1934. The Second New Deal covered the period from 1935 - 1939 and focused on social reform together with policies and programs to speed up the nation's recovery.
The term 'Second New Deal' was first coined by journalist Frank Kent, a critic of President Roosevelt, and was subsequently used by scholars to describe the second stage of events. The Second New Deal policies arose in reaction to political opposition from both Congress and the Supreme Court and a popular outcry for more drastic action to combat the on-going effects of the Great Depression. The programs and reforms launched in the period of the Second New Deal provided for social and economic legislation to benefit the mass of working people. Important events of the Second New Deal period included the rise of Industrial Unionism, Keynesianism economic policy and the Second New Deal policy of Deficit Spending and the Roosevelt Recession.
Second New Deal Summary of Events
This article provides an overview and facts about the events of the era including the critics of FDR, the differences between the First and Second New Deal, the 1936 presidential election, Industrial Unionism, the Supreme Court, Roosevelt Recession, Deficit Spending and Keynesianism during the Second New Deal period.
Second New Deal Legislation and Agencies - Second New Deal Programs and Legislation
The agencies established and the legislation passed during the Second New Deal era included the Wagner Act (National Labor Relations Act), Works Progress Administration (WPA), the Social Security Act, Fair Labor Standards Act and the Rural Electrification Administration (REA). Refer to the following article for a list and definitions of Second New Deal Programs.
Differences between the First New Deal and the Second New Deal
The First New Deal (1933 - 1934) included FDR's first "Hundred Days" and concentrated on national planning and legislation relating to the Stock Market, banks, business regulation, agriculture, inflation, price stabilization, and public works. During this time Congress established numerous emergency organizations nicknamed 'alphabet soup agencies'. The Primary Focus of the Second New Deal (1935 - 1939) was to speed up the nation's economic recovery and focus on social reform and economic security together with policies and programs to support organized labor, and to implement more progressive taxation. For additional facts refer to FDR New Deal Programs.
Reason for the Second New Deal
The Second New Deal policies and programs were launched in reaction to political opposition to FDR's New Deal from Congress, the Supreme Court, various political factions and criticism from the public.
The Second New Deal: Critics of FDR's New Deal
In 1935 FDR's programs and policies had been in place for two years but the economy had only shown a slight improvement. People were becoming impatient, and there was a public outcry for more drastic action to combat the on-going effects of the Great Depression during the Second New Deal era.
Some critics disliked such progressive policies others thought Roosevelt had not gone far enough
The Supreme Court was striking down new, major legislation
Right Wing (conservative) Americans, that included many Southern Democrats, were concerned at the growing power of the federal government at the cost of states rights. Business leaders and owners of companies complained that they were being hampered by too many new codes and regulations, especially in relation to labor unions. Industry leaders raised their concerns of FDR's policy of deficit spending
A national protest organization called the American Liberty League was formed in 1934 by conservative anti-Roosevelt Democrats and Republican business leaders
Left Wing (liberal) Americans, such as jobless workers and busted farmers, wanted to see wealth shifted to the masses to end poverty
Strong criticism and opposition to Roosevelt also came from influential Democrats such as Father Coughlin, Gerald Smith and Dr. Francis Townsend who mounted strong challenges for the 1936 presidential election
The Second New Deal: Huey Long
Dynamic Huey Long was a left wing Democratic Senator from Louisiana who gained considerable support due to his attacks on the wealthy and for championing the poor. Huey Long was siphoning key Democratic support from FDR's campaign but was assassinated before he threatened FDR's presidency.
The Second New Deal: Father Coughlin
Supporters of Huey Long changed their allegiance to Father Charles Coughlin, a Catholic priest from Detroit who attracted attention via his radio show. Father Coughlin was impatient with the slow progress that had been made and in 1935 formed the National Union for Social Justice which threatened to create a new political party.
The Second New Deal: Dr. Francis Townsend and Gerald Smith
Dr. Francis Townsend teamed up with Father Coughlin and they formed a coalition with Gerald Smith, Huey Long’s successor. In 1936 the three men planned to tap the voting strength of the poor of America and prevent FDR's re-election in 1936.
The Second New Deal: Franklin D. Roosevelt wins the 1936 Election
Despite the opposition from his critics and the Republicans during the Second New Deal era Roosevelt won a landslide victory in November 1936 against his Republican opponent Alf Landon.
The Second New Deal: Industrial Unionism
The Supreme Court ruled that the National Industrial Recovery Act of 1933 (NIRA) was unconstitutional. The ruling also struck down labor's right to organize. In response to the ruling Roosevelt, with the support of Congress, pushed through new labor legislation which would attract the working class vote. The Wagner Act was passed on July 5, 1935 and guaranteed workers the right to organize Unions and to collective bargaining for the negotiation of wages, hours and working conditions. The effects of the new laws prompted a burst of labor activity that resulted in the formation of the Committee for Industrial Organization (CIO) that organized labor into unions. The founding of the CIO marked the beginning of a movement away from "trade" unionism, which divided workers according to their jobs, to Industrial Unionism. The CIO organized Unions to include all workers in a particular industry - both skilled and unskilled - and began the rise of Industrial Unions. Union membership increased from just over 2 million in 1933 to nearly 14 million by 1943 at the end of the Second New Deal.
The Second New Deal: The Supreme Court and the Court Packing Plan
Roosevelt believed that that the conservative Supreme Court was partisan and would strike down other major New Deal Programs. He proposed the Judicial Procedures Reform Bill of 1937, known as the Court Packing Plan, which although unsuccessful, forced the Supreme Court to back down on blocking Second New Deal measures.
The Second New Deal: The 1937-1938 Roosevelt Recession
Towards the Spring of 1937 it looked as if the worst of the recession was over. Unemployment was still high, but production, profits, and wages had regained their 1929 levels. President Roosevelt had abandoned a balanced budget and adopted a temporary policy of deficit spending to finance his relief programs. The president, worried about possible inflation and the size of the federal deficit, decided it was time to balance the budget advocating a reduction in federal spending. The Public Works Administration (PWA) and the Works Progress Administration (WPA) were cut significantly which resulted in a massive surge in unemployment. Industrial production declined by 33% and wages dropped by 35%. This second, serious economic downturn, caused by the decline in federal spending, was commonly referred to as the "Roosevelt recession" and was a major event during the period of the Second New Deal.
The Second New Deal: Deficit Spending and Keynesianism
Harold Ickes, head of the PWA, and Harry L. Hopkins, head of the WPA, urged the president to increase government spending again during the period of the Second New Deal. They were both proponents of Keynesianism which was based on the economic theories of John Maynard Keynes. John Maynard Keynes was a British economist who had studied the causes of the Great Depression. Keynes theory was called Keynesianism which was based on the view that most important driving force in the economy was the government. And that in the short term the government should spend heavily, even if it had to run a deficit, to jump-start employment and production. By cutting back on deficit spending FDR had inadvertently caused the 'Roosevelt Recession'. By the spring of 1938 the economy had showed no signs of recovery and the president reverted to Keynesian Economics and deficit spending to stabilize the economy during the Second New Deal era.