The New Deal: An Overview

Alan Brinkley

Franklin Roosevelt broke with precedent within a few hours of being nominated for president in 1932. He flew to Chicago to deliver his acceptance speech in person, becoming the first presidential candidate ever to fly in an airplane and the first to appear before his party's convention as the nominee. In his speech to the Democratic delegates, broadcast to the nation by radio, he promised "a new deal for the American people." The phrase became the popular label for his administration (1933-1945) and its many domestic achievements. The New Deal attempted many things in its effort to end the Great Depression and reform the American economy. It failed at many of them. But its successes were numerous and significant enough to establish it as the single most important twentieth century episode in the creation of the modern American state.
Roosevelt entered office with no single ideology and no single, clear plan for dealing with the Depression. But the programs of the Roosevelt administration did have ancestors. The New Deal reflected progressive ideas that Roosevelt and most of his original associates had absorbed in their political youths early in the century: an impatience with economic disorder; an opposition to monopoly; a commitment to government regulation of the economy; and a belief that poverty was usually a product of social and economic forces, not personal moral failure.

The New Deal also drew heavily on the experience of its leaders in the economic mobilization for World War I and from the policy experiments of the 1920s, both of which involved efforts to harmonize the economy by creating cooperative relationships among its constituent elements. The New Deal was eclectic, pragmatic, and frankly experimental-a combination of several quite different ideologies and traditions.

The major domestic achievements of the New Deal took shape during three distinct periods of reform. During the first months of Roosevelt's presidency, the administration moved energetically to stop the economic panic that had engulfed the nation in 1932 (and had led to Roosevelt's decisive electoral victory). From early 1935 to mid-1936, as the president prepared for reelection, Roosevelt launched a second major series of reforms, which historians have often called the "second New Deal." A third, and less productive, period of activism began in mid-1937 and continued through 1938 as the administration searched for ways to increase its influence within the government and for a solution to a serious new recession.

The Hundred Days
In the first days after his inauguration in 1933, Roosevelt moved energetically both to deal with the most urgent crises facing the nation and to make his own personality the most important political force in America. He delivered an important inaugural address that, while best remembered for the statement "The only thing we have to fear is fear itself," was more notable for the veiled but unmistakable warning that if normal political efforts were not enough to deal with the crises, he would seize broad emergency powers usually reserved for wartime. He began a series of "fireside chats" over the radio through which he explained the actions of the government to the public. He courted the press eagerly and effectively. And he made certain always to appear vigorous and optimistic. That was partly to distract attention from the fact that polio had robbed him of the use of his legs and that he spent most of his days confined to a wheelchair.
Most important, he won passage of a series of major pieces of legislation. The desperate economic situation, combined with the substantial Democratic victories in the 1932 elections, gave Roosevelt unusual influence over Congress in the first months of his administration. The celebrated first one hundred days of the new administration produced a federal program to protect American farmers from the uncertainties of the market through subsidies and production controls (the Agricultural Adjustment Administration). It created a new federal regulatory agency to oversee the stock market (the Securities and Exchange Commission); a reform of the banking system to include a system of insurance for deposits (the Federal Deposit Insurance Corporation); and a series of relief measures to aid some of the approximately fifteen million unemployed Americans (among them the Civilian Conservation Corps, the Civil Works Administration, and the Federal Emergency Relief Administration). The early New Deal also began a bold experiment in flood control, public power, and regional planning (the Tennessee Valley Authority).

The National Industrial Recovery Act (NIRA), the single most ambitious undertaking of the first one hundred days, contained a guarantee to workers of the right of collective bargaining and helped spur major union organizing drives in many industries. It created a substantial federal public works program (the Public Works Administration). Most importantly, and least successfully, it established the National Recovery Administration (NRA), which attempted to stabilize prices and wages through cooperative "code authorities" involving government, business, and labor. Among the inspirations for this great experiment was the American experience in mobilizing its economy for World War I, an experience that had left many progressives with a dream of re-creating the supposedly harmonious war economy in peacetime.

These and other early initiatives created broad popular support for the Roosevelt administration and halted the rapid unraveling of the financial system. They did not, however, end, or even significantly soften, the Great Depression. The NRA not only failed to revive the industrial economy; it contributed to further restrictions on production and artificial increases in prices. In the end, it also became one of several crucial New Deal programs-the Agricultural Adjustment Administration was another-that the Supreme Court, dominated by conservatives, invalidated on the grounds that they exceeded Congress's constitutional authority.

The "Second New Deaquot;
In the spring of 1935, responding to the setbacks in the Court, restiveness in Congress, and a growing popular clamor for more dramatic action, the Roosevelt administration proposed (or endorsed) several important new initiatives. The National Labor Relations Act, also known as the Wagner Act, revived and strengthened the protections of collective bargaining contained in the original (and now invalidated) NIRA. It also created the National Labor Relations Board to help enforce the guarantees it promised workers. New relief programs, of which the most prominent was the Works Progress Administration, created hundreds of thousands of jobs for the unemployed. Highly publicized, if largely symbolic, measures-a tax on large fortunes and an assault on utilities-holding companies-and the president's increasingly harsh attacks on corporate selfishness gave at least the impression that the New Deal was fighting monopoly.
The most important achievement of 1935, and perhaps of the New Deal as a whole, was the Social Security Act, which established a system of old age pensions, unemployment insurance, and welfare benefits for groups that were thought to deserve special protections, among them dependent children and disabled persons. This act created the framework that shaped the American welfare system throughout the remainder of the century.

Roosevelt's landslide reelection in 1936 produced large Democratic majorities in both houses of Congress and predictions-from the president's supporters-of great new achievements and -from his opponents-of an executive dictatorship. Instead, the administration encountered a long string of frustrations. They were partly a result of the president's own political errors.

Emboldened by his political triumphs and angry at the stubbornness of his opponents-the Supreme Court among them-Roosevelt set out in 1937 to consolidate his own authority within the government in ways that provoked powerful opposition. Early in the year, he proposed a "reform" of the judiciary (known first to his opponents and then to almost everyone as the "court-packing plan") designed to stop the string of reverses his programs had been suffering in the Supreme Court. He asked Congress to expand the number of justices, which would allow him to appoint members sympathetic to his ideas and hence tip the ideological balance of the Court. In one sense the proposal succeeded; two of the existing justices, probably in response to the threat, began voting to uphold New Deal achievements, which created an effective liberal majority. But the "courtpacking plan" did lasting political damage to Roosevelt and was finally defeated by Congress.

At about the same time, the administration proposed a plan to reorganize the executive branch in ways that would significantly increase the president's control over the bureaucracy. Like the court-packing plan, executive reorganization evoked strong opposition from those who feared a Roosevelt "dictatorship" and failed in Congress; a watered-down version of the bill finally won passage in 1939.

A New Response to Recession
The largest domestic event of Roosevelt's second term was the severe recession that began in the fall of 1937 and continued through most of 1938-a result at least in part of a premature effort by the administration to balance the budget by reducing federal spending. The New Deal responded in two ways. First, it launched a new rhetorical campaign against monopoly power; many liberals believed monopolies had deliberately caused the recession in an effort to discredit the New Deal. The centerpiece of this effort was a great public investigation of the issue by the Temporary National Economic Committee, a specially created body composed of members of both the executive branch and Congress. By the time the TNEC completed its work, however, the nation was at war and the antimonopoly fervor had cooled; it had little lasting impact. At about the same time, the president appointed an aggressive new director of the antitrust division of the Justice Department who launched prosecutions unprecedented in their number and range. The antitrust division, too, lost its effectiveness once World War II began, but not before achieving a permanent expansion of its bureaucratic capacities.
The administration's second response to the 1937 recession was ultimately more significant. Responding to the urgings of liberal economists and others in his administration, Roosevelt abandoned his efforts to balance the budget and launched a $5 billion spending program in the spring of 1938 to increase mass purchasing power as an antidote to the recession. Few Americans were yet much aware of the ideas of John Maynard Keynes, whose theories would soon transform economic thought throughout much of the world. But the spending program of 1938 was consistent with, and at least indirectly influenced by, what would later become known as Keynesian economics.

The last major domestic achievement of the Roosevelt administration was the passage in 1938 of the Fair Labor Standards Act, which established a national minimum wage and set limits on hours of work. By the end of the year, the New Deal had effectively come to an end. Roosevelt himself went on to win an unprecedented third term in 1940, and a fourth in 1944, and to lead the nation through a great world war. But his efforts to reform the American economy no longer generated broad congressional or popular support. By 1939, his efforts were turning increasingly to the great international crises that would dominate the last five years of his life. World War II, for all the horror it created, would do what Roosevelt's New Deal policies had never been able to do: end the Great Depression and usher in a period of vigorous economic growth.

Roosevelt's Lasting Impact
In retrospect, the New Deal has often seemed as significant for the things it did not do as for the things it achieved. It did not end the Depression and the massive unemployment that accompanied it. It did not-the complaints of conservative critics notwithstanding-transform American capitalism in any genuinely radical way. Except in the field of labor relations and a few other areas, corporate power remained nearly as free from government regulation or control in 1945 as it had been in 1933. The New Deal did not end poverty or effect any significant redistribution of wealth. Nor did it do much to address what became some of the principal domestic problems of the postwar era, among them the problems of racial and gender inequality.
Even so, the achievements of the Roosevelt administration rank among the most important of any presidency in American history, for at least three reasons.

First, the New Deal created a series of new government institutions that greatly, and permanently, expanded the role of the federal government in American life. The government was now committed to providing at least minimal assistance to the poor and unemployed, to protecting the rights of labor unions, to stabilizing the banking system, to building low-income housing, to regulating the financial markets, to subsidizing agricultural production, to using its fiscal policies to stimulate economic growth, and to doing many other things that had not previously been federal responsibilities.

As a result of the New Deal, American political and economic life became much more competitive than ever before, with workers, farmers, consumers, and others now able to press their demands upon the government in ways that had once been available only to the business interests.

This was the origin of the frequent description of the government created by the New Deal as a "broker state," that is, a state brokering the competing claims of numerous groups.

Second, the New Deal produced a new political coalition that sustained the Democrats as the majority party in national politics for more than a generation after its own end.

Finally, the Roosevelt administration generated a set of political ideas-known to later generations as New Deal liberalism-that remained a source of inspiration and controversy for decades, helping to shape the next great experiment in liberal reform, the Great Society of the 1960s.

Alan Brinkley is Professor of History at Columbia University, New York.