Reactions to the New Deal

Despite unprecedented government spending and dramatic innovation evident in the First New Deal, the Depression had scarcely eased.  Between 1933 and 1935, unemployment barely budged, with most of the decrease attributable to New Deal programs.  Stock prices began to climb modestly, but with fewer than five percent of Americans invested in the market, that benchmark mattered little.  The lag between passage and implementation of many New Deal efforts accounted for some of the slow turnaround.  The persistence of hard times hinted that the Depression emerged from more complex origins.  Administration planners took note, contemplating the possibility that deeper systemic problems plagued American capitalism.

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FDR giving a fireside chat

FDR giving a fireside chat

Listen to one of FDR’s fireside chats:  On progress during the first two months, May 7, 1933”

Hope

The hard-driving activity of the Roosevelt Administration, its championing of the underdog, and FDR’s own personality and style captured the hearts of most Americans.  Many poor and middle-class Americans adorned their homes with portraits of the president.  Americans listened intently to the president’s radio messages, especially the so-called “fireside chats,” where Roosevelt patiently explained the country’s problems and described his actions to confront the problems.  Roosevelt won over the majority of the public.  Though the president and his policies were almost unassailably popular, the New Deal’s effectiveness was questionable. 

American midterm congressional elections typically represent a referendum of the president’s policies, even though the president is not on the ballot.  Almost always those elections go against the president’s party, with voters awarding seats in Congress to the opposition.  The election of 1934 represented an exception to the rule.  Democrats increased their control over both the House of Representatives and the United States Senate.

The Critics

Roosevelt’s aggressive use of federal power angered conservatives but his stated determination to save American capitalism and his non-ideological approach to the Depression’s major problems irritated critics to his left.  Both sides offered strong criticism of the New Deal. 

The American Liberty League

The most powerful of FDR’s conservative opponents eventually came together as the American Liberty League.  Prominent industrialists and financiers formed the Liberty League in August of 1934.  Democrats such as 1924 presidential nominee John W. Davis, 1928 presidential nominee Alfred Smith, and former party chairman John J. Raskob joined corporate leaders such as Alfred P. Sloan of General Motors, the DuPont family, and others to oppose the administration in advance of the year’s congressional elections.  At its height, the League claimed 125,000 members.

The Liberty League attacked the New Deal as a socialistic experiment.  The group railed against “regimentation” and supposed attacks upon individual liberties.  Some accused Roosevelt of harboring dictatorial ambitions.  League rhetoric won few friends within the general public.  Herbert Hoover refused to join, though he nonetheless bitterly opposed Roosevelt.  The League’s posturing in advance of the 1936 presidential election provided FDR’s campaign plenty of fodder for its attempts to portray their man as the ally of ordinary Americans.  Politically ineffective, most Liberty Leaguers had to content themselves with simple rage against New Deal policies and personalities.  Many wealthy critics labeled Roosevelt a “traitor to his class.”

New Deal Critics

Critics on the left most threatened the New Deal, and these critics forced Roosevelt to move in new policy directions in response.  By 1935, it had become clear that the legislation of the First New Deal had not delivered complete recovery.  It had, in fact, only made a limited dent in the problems caused by the Depression.  As 1936 approached, the president had to determine a way to allay fears and quiet discontent.  Complainers on the right probably helped him, but critics on the left had the potential to siphon votes and weaken Roosevelt’s position.

Huey Long

Huey Long

Huey Long

The most politically threatening critic of the Roosevelt Administration was Louisiana Senator Huey P. Long.  Long had risen politically quickly in his native state, passing the bar at twenty-one and winning the governorship at thirty.  Long fought major business interests—particularly the oil and sulfur industries—and elitist Democratic conservatives who had traditionally dominated Louisiana politics.  A highly charged political climate resulted, but Long’s following seemed to grow with controversy.  He built roads, bridges, schools, and hospitals, and he used tax dollars to modernize the state.  But Long also perfected the corruption and fraud already endemic to Louisiana politics.  His opponents attempted to impeach and remove him from office in 1929, but their failure only strengthened him.  Political enemies accused him of being virtually a dictator in Louisiana.

Louisiana eventually became too small a stage, and Long attempted to exert his influence nationally.  Long entered the U.S. Senate the same year FDR entered the White House, and he soon expressed disagreement with the New Deal, regarding it as too timid.  Brashly demanding attention, the junior senator alienated his colleagues and Roosevelt, who diverted federal patronage power and dollars to Long’s opponents in Louisiana.  The administration worked to loosen his hold on Louisiana, which he continued to rule through his cronies.

Long blamed maldistribution of wealth for the Depression, and while it was a prominent factor, it was only one of many.  Shifting that wealth into a more even balance, Long argued, would empower consumption and cause the economy to flower.  To rectify wealth inequality, Long proposed confiscatory taxation.  All annual personal income in excess of $1,000,000 and all personal wealth beyond $5 million would be absorbed by taxation.  From this pot, Long promised each American family a car, a house, and a radio, plus a guaranteed yearly income of $2,500.  But the Louisiana senator’s planned largesse did not stop with these incentives.  He also promised pensions to the elderly, payment of the bonus to veterans, public works employment for workers, and a free college education to young people.  That there was no way such a taxing plan could ever generate enough money to cover these benefits did not bother Long or his supporters.

Lyrics to “Every Man a King”

Why weep or slumber America
Land of brave and true
With castles and clothing and food for all
All belongs to you.
Ev'ry man a king, ev'ry man a king,
For you can be a millionaire.
But there's something belonging to others
There's enough for all people to share.
When it's sunny June and December too
Or in the winter time or spring
There'll be peace without end
Ev'ry neighbor a friend,
With ev'ry man a king.

See a vignette of Huey P. Long’s speeches

Every Man a King

In 1934, Long created the national Share Our Wealth Society and hired a staff to spread the word about his plan.  By the end of the year, the group had 1 million members.  It published a newspaper, filmed promotional messages for use in movie theaters, and even had an official song—“Every Man a King”—supposedly penned by Long himself.  By early 1935 the organization was still growing and claimed more than 7 million members.  The Share Our Wealth Society’s growth increased its income, but its operating expenses also grew because many rich people who opposed the New Deal covertly funneled money to Long, hoping to harm FDR.  Long soon toyed with a third party run for the White House, hoping to draw enough votes from Roosevelt to cost him the presidency.  Then, Senator Long would rebuild the Democratic Party in his own image in 1940 and sweep Roosevelt’s Republican successor from power.

The Democrats’ own 1935 political polling showed Huey Long with 11 percent of the vote, and Roosevelt moved to stem the tide, increasing efforts to aid Long’s Louisiana enemies.  In addition, Roosevelt ordered an Internal Revenue Service investigation of Long’s finances, which quickly blossomed into an investigation of official corruption in Louisiana generally.  Facing indictment, the senator went to Louisiana in the summer of 1935 to regroup.  There, in early September, a gunman attempted to assassinate him in the Baton Rouge state capitol building.  A hail of bullets from Long's security detail cut the would-be assassin down, but those same shots may have mortally wounded Long.  He died September 8, 1935, and with him died the biggest threat from the political left.

Father Coughlin

Father Coughlin

Father Coughlin

Father Charles E. Coughlin, a Catholic priest based in the Detroit area, also represented a potential problem for the New Deal.  Coughlin’s radio sermons reached millions.  By 1932, the radio priest drew $500,000 a year in mailed donations from supportive listeners.  Coughlin broke with his usual religious messages in 1932 and endorsed Roosevelt for president.  But Roosevelt’s measures disappointed him, and by the end of 1934, the Detroit priest became a critic.  Organizing the National Union for Social Justice, Coughlin condemned the New Deal as inadequate to meet the challenges of the Depression.  He argued that sterner measures were needed to renew the economy.  These new measures might include things like an inflated currency based only on silver, further reform of the banking system, and government takeover of major industries. 

Coughlin joined conservative critics in lambasting the New Deal as communistic.  He claimed that the U.S. should depart from a gold-based currency to a silver based one because the former represented “Jewish currency,” while the latter was “Gentile currency.”  The demagogic priest’s public comments centered upon what he perceived to be a Jewish-Communist conspiracy bent upon world domination.  FDR ordered the Securities and Exchange Commission (SEC) to investigate the priest’s investments, and commission authorities eventually disclosed Coughlin’s dabbling in silver futures.  Eventually, his anti-Semitic tirades led to his being disciplined by the Vatican.

Francis E. Townsend

Francis E. Townsend

Francis E. Townsend

Elderly California doctor Francis E. Townsend proved more effective than Coughlin.  Townsend proposed a system of pensions for older Americans.  He believed that would reinvigorate the economy and improve living conditions for the elderly.  The government would provide each retired person—over age sixty—two hundred dollars a month.  The retirees would promise to spend every penny before receiving the next check.  The idea started as a simple letter to the editor in 1933, but by late 1934 it was a national movement.  The next year, with a newspaper and sophisticated organizational system, the Townsend movement had ten million registered supporters.

Taken together, these three threats from the left had the potential to endanger FDR’s ability to hold onto power.  Conservative critics of the New Deal saw Long, Coughlin, and Townsend as useful instruments with which to frustrate Roosevelt.  These criticisms of the New Deal also highlighted the extent to which the Depression continued to ravage Americans’ lives despite New Deal reform.  The fears of these discontented people had to be assuaged and their problems eased.  As a result, some new reform proposals passed during the Second New Deal that carried the stamp of these organized discontents.