The Demise of the New
Deal: 1935–1939
A Weakened New Deal
By 1935, New Deal critics were becoming more numerous
and vocal. Congressmen, including even some Democrats, had overcome the
initial panic and were becoming more fiscally conservative as Franklin
Delano Roosevelt’s deficit spending soared. More important, aging,
conservative appointees dominated the Supreme Court and had begun to strike
down several key laws of the First New Deal.
In the 1935 Schechter v. United States ruling,
for example, a majority of justices declared that the National Recovery Act was
unconstitutional. They argued that the act gave too much power to the president
and was an attempt to control intrastate commerce. The following year, justices
also struck down the Agricultural Adjustment Administration in Butler
v. United States on the grounds that it was unconstitutional and
tried to exert federal control of agricultural production.
Roosevelt’s
Court-Packing Scheme
Roosevelt believed that the National Recovery
Act and the Agricultural Adjustment Administration were crucial to reviving the
American economy and feared that any more conservative Supreme Court rulings
would cripple or even kill New Deal policy entirely. In 1937, to prevent
this from happening, the president petitioned Congress to alter the makeup of
the Supreme Court on the pretense that the justices, old age was affecting their
ability to work and concentrate. Roosevelt asked for the power to appoint as
many as six new justices, bringing the total to fifteen, and to
replace justices over the age of seventy. The true aim of the request was
obvious: it would enable Roosevelt to effectively stack the deck to ensure that
only pro–New Dealers would sit on the Court.
The court-packing scheme backfired.
Rather than win over Democrats and New Dealers in Congress, Roosevelt shocked
supporters with his attempt at misusing his executive powers. The president’s
blatant disregard for the cherished separation of powers stunned even the
American people. Roosevelt repeatedly denied charges that he was trying to bend
the entire federal government to his will and defended his belief that aging
justices were often incapable of performing their duties. The court-packing
debate dragged on for several months before Congress and Roosevelt reached a
compromise. Congress made minor reforms in the lower courts but left the
Supreme Court untouched.
Consequences of the
Court-Packing Scheme
The court-packing scheme took a severe toll on
Roosevelt’s popularity and marked the beginning of the end of the New Deal.
Politicians and regular Americans alike were keenly aware that the federal
government under the tight control of a single individual would be nothing more
than a dictatorship, no matter how benevolent or well intentioned the leader
happened to be. Roosevelt’s clumsy attempts to disguise his intentions had the
effect only of making him look guilty. As the public grew suspicious of
“dictator” Roosevelt, fellow Democrats in Congress began to vote more
conservatively, and the chances of any more significant New Deal legislation
being passed became slim.
Ironically, the court-packing scheme may have
helped Roosevelt in one way. Supreme Court Justice Owen Roberts,
who had notoriously struck down New Deal laws in the past, mysteriously began
to vote in favor of the Wagner Act and the Social Security Act after Roosevelt
announced his plan to replace six justices. Historians are still uncertain as
to why Roberts suddenly looked favorably upon the New Deal, but few believe it
was mere coincidence.
The Roosevelt
Recession
In 1937, Roosevelt began to scale back deficit
spending, because he believed that the worst of the Great Depression had
passed and because he was receiving pressure from conservatives in Congress
(and even from ardent New Dealers in his own cabinet). The size of the Works
Progress Administration, for example, was severely reduced, as were agricultural
subsidies.
This decision to cut back spending turned out
to be premature, however, as the economy buckled again, resulting in what
became known as the Roosevelt Recession. The stock market crashed
for a second time in 1937, and the price of consumer goods dropped significantly.
Contrary to conservative beliefs, the economy simply had not pulled far enough
out of the depression to survive on its own. The embattled Roosevelt only made
himself look worse by trying to place the blame on spendthrift business
leaders. The American people were not convinced, and as a result, Democrats
lost a significant number of seats in the House and Senate in the 1938 congressional
elections. This return of Republican power effectively killed the New Deal.
The Hatch Act
Republicans in Congress further weakened
Roosevelt’s executive powers with theHatch Act of 1939. The act
forbade most civil servants from participating in political campaigns and
public office holders (i.e., Roosevelt and New Dealers) from using federal
dollars to fund their reelection campaigns. The bill also made it illegal for
Americans who received federal assistance to donate money to politicians.
Conservatives hoped that these measures would divorce the functions of
government from the campaign frenzy and ultimately dislodge entrenched New
Dealers who preyed on a desperate public for votes.
No End to the
Depression
Despite the numerous positive effects that the
New Deal had, it failed to end the Great Depression. Millions of Americans were
still hungry, homeless, and without jobs as late as December 1941, when the
United States entered World War II. Many historians and economists have
suggested that the New Deal would have been more successful if Roosevelt had
put a greater amount of money into the economy, but this conclusion is
debatable. Only after the surge in demand for war-related goods such as
munitions, ships, tanks, and airplanes did the economy finally right itself and
begin to grow.
The Legacy of the New
Deal
The New Deal was a crucial turning point in
the history of the U.S. government. Politics had never before been so involved
in—or exerted more control over—the daily lives of regular Americans as it was
during Roosevelt’s terms in office in the1930s. Critics lamented that the United States had
transformed itself into a welfare state. Indeed, the budget deficit increased
dramatically every year, and the national debt more than doubled in just ten
years.
However, the New Deal did in fact help
millions of Americans survive the Great Depression. Unlike his predecessor,
Herbert Hoover, Roosevelt tried to directly help as many people as the
conservatives in Congress and the Supreme Court would allow him to. His New
Deal legislation helped create new jobs, build houses and shelters for the homeless,
and distribute food to the hungry. New Deal policy also raised agricultural
commodity prices, put banks back on solid footing, and greatly improved the
national infrastructure. Moreover, the New Deal created a number of
long-standing government institutions, such as Social Security, that we still
have today.
REFERENCE
GALBRAITH,
JOHN KENNETH. The
Great Crash: 1929 .
Boston: Mariner Books,1997.
KENNEDY,
DAVID M. Freedom from
Fear: The American People in Depression and War, 1929–1945 . New York: Oxford University
Press, 2001.
KINDLEBERGER,
CHARLES P. The
World in Depression, 1929–1939 .
Berkeley: University of California Press, 1986.
LEUCHTENBURG,
WILLIAM E. Franklin
D. Roosevelt and the New Deal. New York: Perennial, 1963.
SCHLESINGER,
ARTHUR M., JR. The
Age of Roosevelt, Volume I: The Crisis of the Old Order, 1919–1933 .
Boston: Mariner Books, 2003 .
———. The Age of Roosevelt, Volume II:
The Coming of the New Deal, 1933–1935 . Boston: Mariner Books, 2003.
———. The Age of Roosevelt, Volume III:
The Politics of Upheaval, 1935–1936 . Boston: Mariner Books, 2003.
WORSTER,
DONALD. Dust Bowl:
The Southern Plains in the 1930s. New York: Oxford University
Press, 1982.
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