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.
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Some critics disliked such
progressive policies others thought Roosevelt had not gone far enough
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The Supreme Court was
striking down new, major legislation
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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
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A national protest
organization called the American Liberty League was formed in
1934 by conservative anti-Roosevelt Democrats and Republican
business leaders
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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.
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