New Deal

The New Deal was the name coined by President Franklin D. Roosevelt, a Democrat, for the socialistic programs he conducted throughout the Great Depression. This program had three aspects: relief, recovery and reform. It sought to provide immediate relief for the millions of unemployed. Roosevelt believed the New Deal would aid in recovery and reform in hopes of ending the Great Depression.

Economic planning

As the Depression set in, terms like “planned economy” and “national planning” became the watchwords of the day. They had been used by theoriticians for years and popularized by best-selling writers like George Soule and Stuart Chase, who lauded the Soviet Gosplan (central planning), asking plaintively, “Why should the Russians have all the fun of remaking a world?” The most prominent of the Brain Trusters and the man often considered the chief ideologist of the “first New Deal” (roughly, 1933–34), was Rexford Guy Tugwell. Tugwell was a follower of the school of thought known as Institutional Economics, founded by the eccentric writer on economics, Thorstein Veblen. His official position was assistant secretary of agriculture, that is, second in command to Henry A. Wallace, but his influence extended far beyond that. In 1927, Tugwell traveled to the Soviet Union and observed through scientific economic planning the Soviets were able to “carry out their industrial operations with a completely thought-out program.” “The future,” he announced, “is becoming visible in Russia.” Tugwell scorned the free market as anarchical, an uncoordinated muddle of hopelessly conflicting aims and purposes. It would have to be replaced by national planning, or technocracy, another shibboleth of the day, implying rule by the technical experts and managers, like himself.

Collectivism

There was a peculiar affinity between the New Deal and the European dictatorships that on occasion extended even to fascism and national socialism Early on, FDR referred to Benito Mussolini as “the admirable Italian gentlemen,” stating to his ambassador in Rome, “I am much interested and deeply impressed by what he has accomplished." Mussolini, in turn, was flattered by what he saw as the New Deal’s copying of his own corporate state, in the National Recovery Act (NRA) and other early measures. Even Hitler had kind words at first for Roosevelt’s “dynamic” leadership, stating that “I have sympathy with President Roosevelt because he marches straight to his objective over Congress, over lobbies, over stubborn bureaucracies.”

What linked the New Deal to the regimes in Italy and Germany, as well as in Soviet Russia, was their fellowship in the wave of collectivism that was sweeping the world. In an essay published in 1933, John Maynard Keynes observed this trend, and expressed his sympathy with the “variety of politico-economic experiments” under way in the continental dictatorships as well as in the United States. All of them, he gloated, were turning their backs on the old, discredited laissez-faire and embracing national planning in one form or another.

It goes without saying that the New Deal was a much milder form of the collectivism. In all of the national planning schemes, government gained power at the expense of the people, with the leaders seeking to impose a philosophy of life that subordinated the individual to the needs of the community—as defined by the state.

100 Days

In May 1933, the Thomas Amendment to the Agricultural Adjustment Act (AAA) was passed, giving the president the authority to increase the money supply by $3 billion in unbacked bills and to reduce the value of the gold dollar by up to half. In June, a supine Congress delivered to FDR the joint resolution he had requested, forbidding private debtors to fulfill their obligations in gold and relieving the government of its own sworn obligations.

National Recovery Act

In 1933 Italian Premier Benito Mussolini was a towering figure. Dr. Nicholas Murray Butler, President of Columbia University and Nobel Prize for Peace, said of fascism, it is as a “form of government of the very first order of excellence”; and found it “safe to predict that just as Cromwell made modern England, so Mussolini would make modern Italy.” Chariman Sol Bloom of the Foreign Affairs Committee of the U. S. House of Representives, suggested Mussolini was a great man and had something the United States government might well look to for imitation. What they liked particularly was his corporative system. Mussolini organized each trade or industrial group or professional group into a state supervised trade association. He called it a corporative. These corporatives operated under state supervision and provided economic planning of production, quality, prices, distribution, labor standards, etc. The National Recovery Act, or NRA as it came to be called, provided that a corporative system in America for each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a Code Authority. In Nazi Germany such government run planning authorities built on the Italian model were called industrial cartels. This was the same as fascism. These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA. Anti­-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now Roosevelt suspended the anti-trust laws and compelled men to combine.

Civilian Conservation Corps

The inner affinities of the New Deal with the continental dictatorships is well illustrated by one of the first measures passed during FDR’s first Hundred Days and was a program that was one of FDR’s favorites, the Civilian Conservation Corps (CCC).

Young men were enrolled as amateur forest rangers, marsh-drainers, and the like, on projects designed to improve the countryside. The recruits were given room and board, clothing, and a dollar a day. More than two and half million of them passed through the camps of the Civilian Conservation Corps, until the program was abolished in 1942, when the men were needed for the draft.

In 1973, John A. Garraty published an important article on the CCC in the American Historical Review Garraty was Gouverneur Morris Professor of American history at Columbia and later general editor of the American National Biography. Yet, while a warm admirer of FDR, Garraty was compelled to note the striking similarities between the CCC and parallel programs set up by the Nazis for German youth. Both were essentially designed to keep young men out of the labor market. Roosevelt described work camps as a means for getting youth “off the city street corners,” Hitler as a way of keeping them from “rotting helplessly in the streets.” In both countries much was made of the beneficial social results of mixing thousands of young people from different walks of life in the camps. . . . Furthermore, both were organized on semi-military lines with the subsidiary purposes of improving the physical fitness of potential soldiers and stimulating public commitment to national service in an emergency.

Garraty listed many other similarities between the New Deal and National Socialism. Like Roosevelt, Hitler prided himself on being a “pragmatist” in economic affairs, trying out one panacea after another. Through a multitude of new agencies and mountains of new regulations, both in Germany and America, owners and managers of enterprises found their freedom to make decisions sharply curtailed.

The Nazis encouraged working-class mobility, through vocational training, the democratizing youth camps, and a myriad of youth organizations. They usually favored workers as against employers in industrial disputes and, in another parallel to the New Deal, supported higher agricultural prices. Both FDR and Hitler “tended to romanticize rural life and the virtues of an agricultural existence“ and harbored dreams of the rural resettlement of urban populations, which proved disappointing. Characteristically for the collectivist movements of the time, “enormous propaganda campaigns” were mounted in the United States, Germany, and Italy (as well, of course, as in Russia) to fire up enthusiasm for the government’s programs.

It is no wonder, then, as Professor Garraty writes, that “during the first years of the New Deal the German press praised him [Roosevelt] and the New Deal to the skies. . . . Early New Deal policies seemed to the Nazis essentially like their own and the role of Roosevelt not very different from the Führer’s.”

Timeline

1933 to 1937 were recovery years stimulated by the New Deal government spending. However by 1937 the nation had nowhere near recovered to where it was in 1929.

The 1937 - 1943 Depression was longer in duration than the 1929 - 1932 crash, the result of massive government intrusion into the private economy which stunted growth. Manufacturing demand stimulated by WWII led to the 1943-1949 recovery, where finally, in 1949, the New York Stock Exchange recovered to the level it had been at 1929.

Many New Deal reforms were unpopular and criticized. In 1948 President Harry Truman ran on a reformed New Deal platform called the Fair Deal, which was regarded largely as an admission the New Deal had not been fair.

See also

• New Ordeal