America's Greatest 20th Century Presidents (10 page)

Among Roosevelt's major reforms as Governor was the creation of an unemployment relief agency.  He also created numerous other social programs aimed at relieving poverty and stimulating the economy, including an old-age pension bill that served as a model for Social Security.  Many of these proposals served as precursors for the later New Deal.  They, also, however, increased the state's budget deficit, from $15 million when Roosevelt entered office, to $90 million by the time he left.

By 1930, Roosevelt was ready to run for re-election.  Unlike in 1928, Roosevelt won reelection by a rousing 14 percentage point margin.  This mimicked the national elections, which swept Democrats into House and Senate seats across the country.  Due to his initiatives in New York, which were seen as well-thought out policies ahead of the curve, Roosevelt was also positioned as a leading contender for the Democratic Presidential nomination in 1932.

Chapter 4: President Roosevelt Fights the Depression, 1933 – 1941

The Election of 1932

With the economy still cratering, Democrats were seething for victory in 1932.  The Democrats had only won the White House four times since the Civil War, and each time only because of unusual or precarious circumstances.  With the Great Depression deepening, the party saw an opening to shift the American political paradigm in its favor. 

Many looked to FDR to carry the banner of change, but not all Democrats were initially convinced.  Southern Democrats were especially wary of nominating Roosevelt, ironically because of his supposed pro-Catholic leanings.  Roosevelt's early antagonistic relationship with Irish voters in New York belied that belief, and his support of Catholicism had been tepid and political in nature, making it a relatively easy issue for him to surmount.  On the fourth ballot at the party's Chicago convention, Roosevelt was selected as the nominee, with Speaker of the House John Nance Garner as his running mate.

Until 1932, tradition dictated that a candidate accept a nomination in writing only.  Roosevelt broke this tradition, flew to Chicago, and told the convention “I pledge to you, I pledge to myself, to a new deal for the American people.”  That phrase would define the first half of his Presidency.

On Election Day, Roosevelt won handily.  In one of the biggest margins in electoral history, Roosevelt carried 472 electoral votes to Herbert Hoover's 59, winning 57% of the popular vote to Hoover's 39%.  It was an historic victory, indeed.  Roosevelt's victory was the first since 1848 in which the Democrats won with a majority of the popular vote, and no President from either party had ever won more electoral votes.  Furthermore, the Democrats won substantial majorities in the House and Senate.  Thereafter, Democrats would hold a majority in the House for all but four years until 1995.  It was, without question, precisely the shift the Democrats had hoped it would be.

Inauguration 

By the time Roosevelt was inaugurated in March of 1933, the Depression had worsened.  Of the 48 states, 32 had closed their banks due to bank runs, and FDR's inauguration came amid the worst bank run in the history of the Depression, which prompted him to act quickly to counter contagion. 

Today, of course, one of the things Roosevelt is most remembered for is his first inaugural address, which understandably addressed the pessimistic mood in the nation. Roosevelt began his speech by saying, “I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

Bank Runs

Roosevelt's first 100 Days were unusually active.  On his first full day as President, Roosevelt ordered a bank holiday to halt the further run on U.S. banks.  He then quickly got to work sending a record number of ideas for bills to Congress, almost all of which were passed easily by the large Democrats majorities in both the House and Senate. 

FDR subscribed to a Keynesian view of economics, an outlook that believed the Depression grew worse due to a lack of spending and investment.  He thus hoped to stimulate the economy by restoring confidence and offering incentives for people to spend and invest.

On March 9
^th
, just four days after Roosevelt declared a bank holiday, Congress passed the Emergency Banking Act, which required all banks to prove they were solvent before they were able to reopen after the bank holiday.  FDR hoped this would allow Americans to be confident that their local bank would not lose their money.

Days later, on March 12
^th
, Roosevelt gave the first of many “Fireside Chats” over radio.  The addresses reassured Americans and added to Roosevelt's already-stellar popularity, and they represented a revolutionary way of using new social media by a president.

FDR after one of the “fireside chats”

The First New Deal

From 1933 through 1934, Congress passed the legislation that came to be known as the “First New Deal.”  New Deal legislation began passing through Congress at the end of March, less than a month into Roosevelt's first term.  The first major achievement was the Civilian Conservation Corps (CCC), which put young men between the ages of 18 to 25 to work on a national reforestation program.  In mid-April, Roosevelt made an historic move by taking the dollar off the gold standard, thereby giving the Federal Reserve stronger control over the nation's currency. 

In May, the Federal Emergency Relief Act was passed, which gave grants rather than loans to states, which allowed them to spend money stimulating their economies. A more controversial act, the Agricultural Adjustment Administration (AAA) passed Congress that same month.  The Act paid farmers to NOT till their land, hoping to reduce crop supply, increase prices, and thereby aid ailing farmers in the Heartland.

These initial bills were largely Depression-specific and provided immediate emergency relief.  Other bills, however, had a more lasting effect on the economic fabric of the United States.  In late May, Congress passed the Federal Securities Act, which required the issuing of stocks and bonds to be registered and approved by the Federal government.

June also brought a flurry of legislative activity.  Congress passed the National Industrial Recovery Act (NIRA), the Public Works Administration (PWA), the Farm Credit Act, and the Federal Bank Deposit Insurance Corporation (FDIC), which guaranteed all deposits into insured banks up to a maximum of $2,500.  The limit has been increased steadily in each economic crisis since FDR, and was raised to a limit of $250,000 in 2008. Among these pieces of legislation, NIRA was the most controversial.  It forced industries to create minimum prices and establish rules of operation within their industry.  It also mandated that industries make agreements not to compete.  This bill was challenged on legal grounds and would later be found unconstitutional.

Towards the end of 1933, Congress created more Federal jobs programs and ratified the 21
^st
Amendment, ending Prohibition.  This was a move heavily favored by Roosevelt's former opponents, the Irish Catholics from the Northeast.

Congress was not finished with the first New Deal in 1933, however.  In 1934, it passed the Securities Exchange Act, which established the Securities Exchange Commission (SEC), to clamp down on illegal stock speculation.  John F. Kennedy's father, Joseph Kennedy, chaired the Commission.  In the same month, Congress passed the Federal Communications Commission (FCC) to regulate radio and telegraphs.

In less than two full years, Franklin Roosevelt achieved more landmark legislative accomplishments than most Presidents had in two terms.  He was just getting started.

Supreme Court Resistance to the Second New Deal

The American public was pleased with FDR's actions and awarded him with even larger Democratic majorities in the House and Senate in the 1934 Midterm Elections. However, entering 1935, the First New Deal had only had a small effect on economic recovery: unemployment fell from a high of 25% when Roosevelt was inaugurated to just over 20% by 1935.  While it was improvement, the economy was far from bustling again.

In an effort to improve economic conditions, FDR crafted the Second New Deal in an attempt to offer long-term security to the elderly, disabled, unemployed and others in need.  The aim of the First New Deal had been merely to stimulate the economy, but the Second New Deal sought to ensure long-term stability.

The Second New Deal was not devoid of stimulus funding, however.  One of its first major achievements was the Works Progress Administration (WPA), which employed artists and writers to bring their talents to small towns.  More aid was brought to small towns through the Rural Electrification Administration, which brought power to places not served by private companies.

In May of 1935, the Supreme Court dealt FDR’s New Deal legislation its first of many defeats when it declared the National Industrial Recovery Act (NIRA) unconstitutional.  The following year, it found the Agricultural Adjustment Act unconstitutional as well.  During his first term, Roosevelt felt he didn't have a sufficient mandate to take on the court effectively, thus resigning himself to attempting to work around it.

Despite these setbacks, Roosevelt and Congress steamrolled ahead with more major accomplishments.  The most important of these were the National Labor Relations Act, the Social Security Act and the Revenue Act.

The Labor Relations Act created the National Labor Relations Board (NLRB), which ensured the right of labor to organize and bargain collectively.  This was another piece of legislation influenced heavily by Roosevelt's former opponents in Tammany Hall.  The Social Security Act created modern-day Social Security.  At the time, it guaranteed a pension for Americans age 65 and over, set up unemployment insurance and assisted states with giving aid to needy citizens, including the disabled.

Apart from reinvigorating the economy, Roosevelt also signed the Neutrality Act in the summer of 1935.  The Act prohibited American companies from shipping weapons to belligerents during wartime.  Though war had not yet broken out in Europe, Roosevelt's extensive knowledge of the European scene led him to foresee war on the continent.

Winning Reelection and Packing the Court

Roosevelt was reelected in 1936 by an even larger and even more historic margin than he had in 1932. In 1936, President Roosevelt carried every state in the Union except Vermont and Maine, winning 523 electoral votes to his opponent's 8.  Roosevelt carried more than 60% of the popular vote, the most of any President in history at the time.

Roosevelt, however, quickly squandered this landmark mandate by taking on the Supreme Court. Frustrated by the Court’s opposition to much of his legislation, Roosevelt crafted the Judiciary Reorganization Bill of 1937, which would have allowed him to name an additional Justice for every Justice on the Supreme Court over 70 years old who did not plan to retire within half a year.  FDR was very nakedly seeking to remake the court so that it would not continue to overturn important New Deal legislation like NIRA.

Known as Roosevelt’s attempt to “pack the court,” the proposed legislation was an utter debacle, and it met with strong opposition among considerable segments of the public, the bar, and even Vice President Garner.  One editorialist wrote, “[T]hese are not the traits of a democratic leader.”

The court packing provisions of the bill were soundly rejected by the Senate and eventually stripped from the bill later in 1937.  By that time, the Supreme Court had begun to uphold New Deal legislation on a more frequent basis anyway. And over the course of his entire presidency, Roosevelt was able to appoint 8 new justices to the Supreme Court out of a total of 9 spots.

Focusing on Europe

Foreign policy, a minor part of Roosevelt's first term, came to dominate his second.  In December of 1937, Japan attacked the U.S. gunboat
Panay
on China's Yangtze River, even though Roosevelt had already declared neutrality in the war between China and Japan.  Japan apologized and said the attack was a case of mistaken identity, but sensing the need for preparation, Congress appropriated $1 billion to upgrade the U.S. Navy in January of 1938.