Key facts and dates

The Second New Deal, introduced between 1935 and 1936 under President Franklin D. Roosevelt (FDR), marked a shift towards more structural reforms and social welfare initiatives in the United States. This timeline highlights the pivotal events and legislation that defined this transformative period during the Great Depression.

Timeline of key events

• 1935 – Works Progress Administration (WPA) established, employing 8.5 million Americans in infrastructure projects.
• 1935 – Social Security Act passed, introducing old-age pensions, unemployment insurance, and aid for vulnerable groups.
• 1935 – National Labor Relations Act (Wagner Act) enacted, protecting workers' rights to unionise and bargain collectively.
• 1935 – Wealth Tax Act introduced, increasing taxes on high incomes and inheritances.
• 1936 – FDR wins landslide victory in presidential election against Alf Landon (523-8 electoral votes).
• 1936-37 – Sit-down strikes, such as at General Motors, highlight growing labour activism.

Political context and criticisms leading to the Second New Deal

By 1935, the initial phase of the New Deal faced significant challenges and opposition, prompting FDR to shift towards more progressive and structural reforms. This period was marked by legal setbacks and vocal criticism from both ends of the political spectrum, which influenced the direction of the Second New Deal.

Challenges and legal setbacks

• Supreme Court rulings - The Supreme Court declared key First New Deal programmes, such as the National Recovery Administration (NRA) and the Agricultural Adjustment Act (AAA), unconstitutional, undermining early recovery efforts.
• Criticism from the right - Business leaders and conservative groups, like the Liberty League, attacked the New Deal as too radical, arguing it interfered excessively with free enterprise and individual liberties.
• Criticism from the left - Progressive and populist figures believed the reforms were insufficient. Huey Long's "Share Our Wealth" programme proposed wealth redistribution, Francis Townsend advocated for generous old-age pensions, and Father Coughlin used radio broadcasts to push for populist economic reforms.
• FDR's response - Facing these pressures, FDR moved towards more progressive policies, focusing on workers' rights and social welfare to address widespread economic hardship and maintain political support.

Key legislation and reforms of the Second New Deal

The Second New Deal introduced a series of landmark programmes aimed at providing immediate relief and establishing long-term social safety nets. These initiatives addressed unemployment, infrastructure, social welfare, and rural development, marking a significant expansion of federal government responsibilities.

Major programmes and legislation

• Works Progress Administration (WPA, 1935):
  • Led by Harry Hopkins, the WPA became the largest New Deal agency, employing 8.5 million Americans to build infrastructure like roads, bridges, schools, and airports.
  • Despite criticism as "boondoggling" (wasteful spending), it left lasting contributions to public works.
• Cultural initiatives under WPA - The Federal Arts Project, Federal Writers' Project, and Federal Theater Project supported artists, writers, and dramatists, creating culturally significant works and providing jobs during the economic crisis.
• Social Security Act (1935):
  • This revolutionary legislation established old-age pensions for retirees age 65 and over, unemployment insurance, and aid to dependent children and the disabled.
  • Funded by payroll taxes from workers and employers, it excluded agricultural workers and domestic servants (disproportionately affecting African Americans) and offered modest benefits.
  • It set a precedent for federal social welfare.
• Rural Electrification Administration (REA, 1935) - This agency brought electricity to rural farms, transforming agricultural life by improving productivity and living conditions in previously isolated areas.
• Wealth Tax Act (1935) - Aimed at redistributing wealth, this act raised taxes on the highest incomes and inheritances. Though not very effective in raising revenue, it held symbolic importance in addressing economic inequality.
• Banking and utilities regulation - Additional reforms tightened control over financial institutions and public utilities to prevent economic abuses and ensure stability.

Impact on labour rights and union growth

One of the most transformative aspects of the Second New Deal was its support for workers' rights, fundamentally altering the balance between labour and management. This shift empowered workers and led to significant growth in union membership.

Labour legislation and its effects

• National Labor Relations Act (Wagner Act, 1935) - This act guaranteed workers the right to organise unions and engage in collective bargaining. It also established the National Labor Relations Board (NLRB) to oversee labour practices and prevent employer abuses.
• Growth of unions - The Wagner Act spurred a dramatic increase in union membership, particularly through the Congress of Industrial Organizations (CIO), which focused on organising industrial workers across entire sectors.
• Labour activism and conflict - Workers increasingly used sit-down strikes, such as the notable General Motors strike of 1936-37, to demand better conditions. These actions often led to violent clashes with management, but they marked a permanent shift in labour power.

Social and economic philosophy behind the reforms

The Second New Deal reflected a distinct shift in philosophy compared to earlier recovery efforts. It prioritised direct support for workers and the poor, laying the groundwork for a modern welfare state in the United States.

Core principles of the Second New Deal

• Focus on workers and the poor - Unlike the First New Deal's emphasis on business cooperation, these reforms directly aided struggling individuals through job creation and social programmes.
• Foundation of a welfare state - Initiatives like the Social Security Act established the federal government's role in providing a safety net, a concept previously absent in American policy.
• Acceptance of deficit spending - The government embraced spending beyond revenue to fund programmes, reflecting emerging "Keynesian" economic ideas that government intervention could stimulate recovery, though not explicitly acknowledged at the time.

Results and significance of the Second New Deal

The Second New Deal had both immediate and long-lasting impacts on American society and governance. While economic recovery remained uneven, the institutional changes reshaped the relationship between the government and its citizens.

Immediate outcomes and challenges

• Economic recovery - Unemployment fell to 14% by 1937, indicating progress, but a sharp recession in 1937-38 revealed the fragility of the recovery and the limitations of these measures.
• 1936 election landslide:
  • FDR's overwhelming victory over Alf Landon (523-8 electoral votes) demonstrated strong public support.
  • It solidified the New Deal coalition, comprising labour unions, urban ethnic voters, African Americans (shifting from Republican to Democratic allegiance), southern whites, and intellectuals, providing a clear mandate for continued reform.

Long-term significance

• Institutional changes - The Second New Deal's reforms, particularly in social welfare and labour rights, had a more enduring impact than immediate economic gains, establishing federal responsibility for citizens' well-being.
• Shift in government role - By embedding social safety nets and workers' protections into policy, these measures redefined the American government's role, moving towards a more active involvement in economic and social spheres.