The Second New Deal: 1935 - 1938

Arnold Eagle and David Robins, "One-third of a Nation," 1938

Records of the Work Projects Administration; National Archives & Records Administration

THE SECOND NEW DEAL:  It Begins with the Election of 1936

     At the start of 1935, millions of Americans were still unemployed; many had been jobless for several years.  Although President Roosevelt remained in touch with common Americans via Fireside Chats, other charismatic figures took to the airwaves to offer social commentary as well as critiques of New Deal policies.  Often labeled as "political demagogues," Father Charles Coughlin of Detroit and Huey Long, the Louisiana Democratic governor and Senator, offered political dissidence and rhetoric on a national scale, oftentimes to the great antagonism of New Dealers.  In particular, Long's "Share the Wealth" program ("Every man a king!") found a receptive audience among the country's disenfranchised.   

     Ever the astute politician, President Roosevelt considered the impact such firebrands would have on his re-election hopes for 1936.  Accordingly, he pushed Congress to pass additional New Deal legislation, commonly labeled the "Second New Deal."  The key legislative efforts included: 1) the Emergency Relief Appropriation Act (May 1935), 2) the National Labor Relations Act, aka "The Wagner Act" (July 1935), 3) the Social Security Act (August 1935), and 4) the Fair Labor Standards Act (June 1938).  The Works Progress Administration (May 1935) would serve as the foundation for employing millions of Americans and improving the country's aging infrastructure.  Accordingly, the Second New Deal concentrated on increasing workers protection and ensuring enduring financial security for all citizens.  The upcoming presidential election would determine if Roosevelt had a public mandate for the Second New Deal.

    During the 1936 presidential election, the Grand Old Party offered a platform equal parts pro-Republicanism and anti-Rooseveltism.  President Roosevelt faced vocal opposition from conservatives, in large part due to their concern over the excesses of government expansion.  However, farmers, laborers, and the poor voiced unconditional support for Roosevelt.  By the time of the election on November 3, 1936, the unemployment rate was down to 10%; compared to 1935, the gross domestic product had increased 14% and the Dow Jones Industrial Average had increased 40 plus points.  Ultimately, Roosevelt would prevail.  He defeated Republican Alf Landon by over 10 million votes (27 million to 16.7 million) and carried every state except Maine and Vermont.  The American people had vindicated Roosevelt and the New Deal coalition!  

"Huey Long, Share Our Wealth" video 

Social Security Administration

"Eleanor Roosevelt Voting in Hyde Park," 11-03-1936

FDR Presidential Library & Museum; National Archives & Records Administration

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THE SECOND NEW DEAL:  1935 - 1936

"Men Pulverizing Limestone on the Big Basin Creek," ca. 1935

Records of the Natural Resources Conservation Service; National Archives & Records Administration  (Download here)


April 27, 1935:  Congress enacts the Soil Conservation and Domestic Allotment Act (Public Law 74-461) that seeks: 1) the preservation and improvement of soil fertility, 2) the economic use and conservation of land, 3) a reduction in the exploitation and unscientific use of land, and 4) the protection of rivers and harbors against the effects of soil erosion.  It establishes a practice of the government paying farmers to reduce production so as to conserve soil and prevent erosion; this practice would reduce wind-inflicted soil erosion by 65% within 4 years.  On April 29, 1935, President Roosevelt signs the Soil Conservation Act that creates the Soil Conservation Service; its chief goal is to awaken public concern to soil erosion.  

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Soil Conservation and Domestic Allocation Act, Public Law 74-461, 04-29-1935

Legisworks  

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"Boys Handicraft Class, Chicago, IL" 05-07-1936

Records of the Work Projects Administration; National Archives & Records Administration   (Download here)


May 6, 1935:  President Roosevelt creates the Works Progress Administration (WPA) via Executive Order No. 7034, under authority of the Emergency Relief Appropriation Act of 1935. The program targets all areas of American industry and culture, from the nation's infrastructure to its arts (see Federal Project Number One).  By providing jobs to the unemployed, Roosevelt hopes to preserve the work skills and dignity of millions of Americans.  During its 8 years of operation, the WPA employs over 8.5 million jobless Americans at a cost of approximately $11 billion.  The WPA also sponsors the National Youth Administration that provides part-time jobs for young people.  

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Executive Order 7034 creating the Works Progress Administration, 05-06-1935

FDR Presidential Library & Museum; National Archives & Records Administration

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"New York City, Pickets Along Street," ca. December 1937

FDR Presidential Library & Museum; National Archives & Records Administration

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July 5, 1935: President Roosevelt signs the National Labor Relations Act.  It is established to address relations between unions and employers in the private sector.  Commonly known as the "Wagner Act" after Senator Robert Wagner of New York, it seeks to strengthen labor’s ability to unionize while improving labor-management relations.  The Act creates the National Labor Relations Board with the authority to arbitrate deadlocked labor-management disputes, guarantee democratic union elections, and penalize unfair labor practices by employers.

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National Labor Relations Act, 07-05-1935

General Records of the U.S. Government; National Archives and Records Administration

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August 14, 1935:  The Social Security Act is signed into law.  It establishes a system of old-age benefits for workers, benefits for victims of industrial accidents, unemployment insurance, and aid for dependent mothers and children, persons who are blind, and persons with disabilities.  The Act authorizes the Social Security Board to register citizens for benefits, administer the contributions received by the federal government, and send payments to recipients.  Social security taxes are collected for the first time in January 1937; the first one-time, lump-sum payments are made that same month.  

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Social Security Act, 08-14-1935

General Records of the U.S. Government; National Archives and Records Administration

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Reginald Marsh, "Frescoes, New York City Customs House," ca. 1937 

FDR Presidential Library & Museum; National Archives & Records Administration 

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August 1935:  The Treasury Relief Art Project (TRAP) is established to hire unemployed artists to create art for public places and is administered under the same relief rules as the WPA.  Of the artists employed, 75% are on relief.  It ceases operations in June 1938.

Federal Art Project icon

 Library of Congress

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August & September 1935Federal Project Number One is established. Eventually, it will contain the Federal Art Project, Federal Music Project, Federal Writers’ Project, Federal Theatre Project, and Historical Records Survey, all WPA-sponsored programs.   The Federal Art Project is the largest New Deal art program in terms of scope and employment.  It ceases operations in June 1943.

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Audio only of  "FDR Speech at Madison Square Garden, 10-31-1936" 

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Text of "FDR Speech at Madison Square Garden, 10-31-1936"

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 FDR Presidential Library & Museum; National Archives & Records Administration

October 31, 1936:  At Madison Square Garden, just days before the upcoming election, President Roosevelt confronts those who oppose his New Deal policies, particularly the country's old guard of wealth

“We had to struggle with the old enemies of peace – business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. And we know now that Government by organized money is just as dangerous as Government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me, and I welcome their hatred.”

November 3, 1936Roosevelt wins his second term as president by defeating Republican challenger Alf Landon.  Roosevelt wins 523 (of 531) Electoral College votes and 60.8% of the popular vote

THE SECOND NEW DEAL: 1937 - 1938

     During his second inaugural address on January 20, 1937, President Roosevelt stated, "I see one-third of a nation ill-housed, ill-clad, ill-nourished."  However, as he began his second term, the economy was improving, enough so that many Americans believed that the worst was behind them.  Many Republicans in Congress advocated for scaling back the New Deal, arguing against fiscal largesse and referencing the anti-business nature of New Deal policies.  With the economy improving, Roosevelt seized the opportunity to return to a balanced budget.  He reduced spending on several relief programs, albeit at a time when Americans were paying the new Social Security tax.   Unfortunately for Roosevelt, these measures resulted in decreased production and increased unemployment, in short, a recession.   

     Lasting from May 1937 to June 1938, the "Roosevelt Recession" saw the gross national product drop 10% and unemployment levels hit 20%.  For Roosevelt and his advisors, the recession served as a cautionary tale about the too early removal of economic support from a massive government intervention.  Through the second half of 1937 and into 1938 Roosevelt heeded the lessons learned by initiating another government spending program.  In August 1937, he signed the Bonneville Power Act that spurred the creation of the Bonneville Power Authority; the authority would provide rural electrification and distribute the benefits of Federal hydroelectric power to millions of residents in the Pacific Northwest.  Via the newly established United States Housing Authority (September 1937), loans were made available for the construction of hundreds of affordable housing developments; in that same month, the newly created Farm Security Administration began loaning money as well as providing grants and agricultural training to farmers.  The Fair Labor Standards Act (June 1938) provided protection and support to curtail wage and hour abuses against the American workforce.  By the middle of 1938 the recession crisis had passed.  

   During the 1938 mid-term elections, conservative Southern Democrats campaigned against the continuation of the New Deal.  Roosevelt, in turn, campaigned against these Democrats but to little avail.  The Democratic Party lost 72 seats in the House of Representatives and 8 seats in the U.S. Senate, primarily to Republican candidates.  While the Democrats maintained control of Congress,  the "Conservative Coalition," an alliance of Republicans and Southern Democrats, took control of Congress and thwarted Roosevelt's efforts for additional reform legislation.  The mid-term election coupled with the "Roosevelt Recession" and the defeat of his  "Court Packing" plan (see below) drove President Roosevelt's popularity to the lowest level of his administration to date.   

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Audio only of  "FDR Speech Second Inaugural," 01-20-1937

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Complete text of "FDR Speech Second Inaugural," 01-20-1937

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Both files above: 

FDR Presidential Library & Museum; National Archives & Records Administration

"The Congressional Trend: Will Tuesday Change It?," 11-06-1938

New York Times

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Text of FDR Press Conference about Court Packing, 02-05-1937

FDR Presidential Library & Museum; National Archives and Records Administration

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February 5, 1937President Roosevelt explains his "Court Packing" plan to Congress (detailed in greater length in the last section of this page).  He hopes to increase the number of pro-New Deal jurists on the Supreme Court.    

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Text of FDR Speech to Congress, 02-05-1937   

FDR Presidential Library & Museum; National Archives and Records Administration

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Dorothea Lange, photographer, "One of Six Successful Applicants Out of Seventy Five. Purchasing Farm Bankhead Jones Act," 11-17-1938

Farm Security Administration, Prints & Photographs Division, Library of Congress

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July 22, 1937:  President Roosevelt signs the Bankhead-Jones Farm Tenant Act (Public Law 75-210), which offers credit to tenant farmers and sharecroppers for the purchase of farm land.   It also creates the Farmers’ Home Corporation to promote secure occupancy of farms and farm homes and to correct the economic instability resulting from present forms of farm tenancy.

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Public Law 75-210, 07-22-1937

Legisworks

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"Dedication of the Terrace Village housing project, Pittsburgh, PA," 10-11-1940 

FDR Presidential Library & Museum; National Archives & Records Administration

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September 1, 1937:  President Roosevelt signs the United States Housing Act of 1937 (the “Wagner-Steagall Act”) into law (Public Law 75-718), creating the United States Housing Authority (USHA).  The Act seeks to "alleviate present and recurring unemployment and to remedy the unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income, in rural or urban communities, that are injurious to the health safety and morals of the Nation."  The USHA makes loans for the construction of hundreds of affordable housing developments.  

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Public Law 75-718, 09-01-1937

Legisworks

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Fair Labor Standards Act of 1938, 06-25-1938

General Records of the U.S. Government; National Archives & Records Administration

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June 25, 1938:  President Roosevelt signs the Fair Labor Standards Act (Public Law 75-18). The Act establishes a minimum wage, a standard work week, overtime pay, and prohibits certain types of child labor.  It applies to all industries engaged in interstate commerce.  To administer the wage and overtime components of the Act, a Wage and Hour Division is created within the Department of Labor. 

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Public Law 75-718, 06-25-1938

Legisworks  

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COURT PACKING:  A Rare Legislative Defeat for President Roosevelt

   Aside from the "Roosevelt Recession" and the legislation and new agencies mentioned above, this period of the Second New Deal is perhaps best remembered for Roosevelt's "Court Packing" agenda.  During Roosevelt's first term, the Supreme Court had struck down several New Deal measures as unconstitutional, including: 1) the Agricultural Adjustment Act (enacted May 1934), 2) the Railroad Retirement Act (enacted June 1934), 3) the National Industrial Recovery Act (enacted June 1934), and 4) New York state's minimum wage law (enacted May 1933).  On February 5, 1937, as court challenges to the Social Security Act and the National Labor Relations Act (aka the "Wagner Act") were in play, Roosevelt presented a Judiciary Reorganization plan to Congress.  

     The plan would give the President the authority to appoint an additional Supreme Court justice for every sitting justice over the age of 70; at the time of the proposal, this meant Roosevelt could appoint up to six justices.  In his messaging to Congress on February 5, 1937, he posited that the judicial reorganization was needed "in order that it [the Supreme Court] also may function in accord with modern necessities."  Political opponents, including Democrats, and the press derided the plan as "Court Packing." After heated debate in Congress and the court of public opinion, the plan failed, marking Roosevelt's first legislative defeat.  However, Roosevelt found vindication in May 1937 when the Supreme Court affirmed the constitutionality of the Social Security Act and the National Labor Relations Act. 

Herbert Block, "Historical Figures," 02-19-1937

Prints & Photographs Division, Library of Congress  (Download here)