Two other acts proved immensely beneficial for the South. They were the Tennessee Valley Authority (May 1933) and the Rural Electrification Act (REA) of May 1935. The TVA established a system of 21 publicly-owned dams and hydroelectric plants, and flood control. This public source of cheap electrical power competed with the private power companies, which absolutely hated it. And this forced down the rates of the power companies. TVA covered 40,000 square miles in 7 states (TN, KY, VA, NC, GA, AL and Mississippi).

REA provided for generating and distributing electrical power to isolated rural areas not served by private power providers.

These two programs had enormous impact. In 1930, 1 farm in 9 had electricity. By 1950, 9 farms out of 10 had electricity. Electrification expanded consumer markets. How does one use a toaster, refrigerator, radio or any electrical appliance or consumer good if there is no electricity? In order to promote the consumption of electrical goods, it is necessary to invest in the infrastructure that will allow those goods to be used—electricity. Furthermore, electrification made it more attractive than it previously had been for Northern companies to invest in the South and relocate factories there. Once cheap electrical power was available, companies such as Alcoa, Monsanto, DuPont, Allied Chemical, and so on opened plants in the South, which provided jobs and income for the region. Furthermore, once World War II came, defense production could take place in the South in electrified factories. TVA laid the infrastructure that made the accelerated industrialization and economic development of the South possible. Government loans and farm programs also helped Southern farmers to modernize.

A CHORUS OF CRITICS

Roosevelt wanted to stay on the "good side" of business. Back in 1933 when Senator Hugo Black pushed the "30 Hours bill" (a 30 hour work week) through the Senate, FDR opposed it and worked with the House to dilute it to a 40 hour work week. However Roosevelt’s New Deal was too radical for conservatives and, initially, the Supreme Court. In May 1935 the Supreme Court struck down NIRA. Although some large corporations were willing to go along with NIRA, small businesses objected, and also opposed unions. Conservative businessmen such as Alfred Sloan of General Motors and Pierre Du Pont opposed any union at all, even "company unions." Small businessmen in the National Association of Manufacturers (NAM) were utterly opposed to Roosevelt’s policies, and condemned them as creeping socialism. His critics called him a communist and a syphilitic. In August 1934 Alfred Sloan and Pierre Du Pont formed the ultra-conservative American Liberty League to campaign against the New Deal. By the summer of 1934 the NRA was dead, although it remained for the Court to officially kill it. The Depression continued, and FDR gave the people a lifeboat, it did not solve the fundamental problem. It was like a band aid or victim support.

A chorus of critics condemned FDR for not doing enough. In May 1935 the conservative Chamber of Commerce denounced him. From the left, the Communists criticized him. Leaders in the labor movement criticized him because businesses were resisting efforts to form unions, as NIRA permitted, or establishing "company unions" controlled by the companies (fake unions, not independent unions) and FDR did little or noting to intervene. Louis Brandeis and Felix Frankfurter advised FDR that he would never be able to appease conservative businessmen, no matter how hard he bent over backward to do so, and he needed to give the country harsher medicine.

On the radio, in Michigan, Father Charles Coughlin, "the radio priest," called for the correction of capitalism. He blamed the Depression on greedy capitalists, the bankers, and the Jews. He appealed to a Catholic constituency and criticized FDR for not doing enough. He urged massive new public works programs to create more jobs. He received more mail than anyone else in the country. Some 35 million people listened to his radio broadcasts. Eventually the Roman Catholic Church would take him off the air, but in 1935 he was still a powerful voice.

Huey Long of Louisiana was elected to the Senate in 1930. He was a latter day Populist, promulgated the "Share Our Wealth" scheme in January 1934. He called FDR a stooge of Wall Street, and called for the confiscation of the bank accounts of the rich. He wanted the government to confiscate all family fortunes over $5 million, and a 100% tax on incomes over $1 million a year. This money would then be distributed to the people to provide every family with a house, a car and a guaranteed annual income of $2000, and old age pensions and college tuition. He also favored limiting the hours of workers. Long was a modern day Robin Hood. More than 4 million people signed up as members of Share Our Wealth Clubs, endorsing his ideas. Long contemplated running for president in 1936 as third party candidate, and he was the most popular politician in the Democratic party after FDR himself. He was assassinated in September 1935.

In 1934 Dr. Francis Townsend established Townsend Clubs. They called for the Federal Government to pay every citizen over the age of 60 a pension of $200 a month, which had to be spent during that month. This consumer spending, Townsend said, would stimulate the economy and generate new jobs. Some 10 million people signed petitions supporting this plan. With 10 million people over the age of 60, in 1934, the plan would have cost $24 billion a year.

The criticisms of the communists, the labor movement, Long, Coughlin and Townsend are sometimes called "Thunder on the Left." In politics, the conservative view is referred to as the right. The radical view, closer to communism or socialism or the redistribution of private property, is called the left. And then there is the moderate "center."

While the bickering and criticism went on, millions were still unemployed, and barely holding on with welfare (FERA). The American people were desperate.

MOVING TO THE LEFT

In the spring and summer of 1935 FDR decided to "move to the left" and take the wind out of the sails of his critics on the left. He would "steal their thunder" by embracing their ideas and watering them down in a more sane or moderate manner.

To take the wind out of Father Coughlin’s sails, in April 1935 FDR asked Congress for a new massive public works program. It became the Works Progress Administration (WPA). This would help to win over Coughlin’s followers to FDR, who was planning to run for re-election in 1936.

In August 1935, to steal Doctor Townsend’s "thunder," FDR asked Congress for a Social Security Act (more later). This would also court Townsend’s followers for FDR’s re-election campaign in 1936.

Also in the summer of 1935, to steal Huey Long’s "thunder," FDR asked Congress to a bill taxing the wealthy, and corporations, and inheritances. This Wealth Tax Act was nicknamed the "Soak the Rich" Tax. When it passed in August 1935, Huey long strutted around the Senate like a peacock. The tax made taxes on corporations graduated instead of a flat rate, and raised taxes on incomes over $50,000.

The Social Security Act of 1935 provided for a system of unemployment compensation, with a federal tax on payrolls. It provided for old age or retirement pensions at age 65, with a tax on employers and employee withholding. FDR figured that if workers paid into the system they would never allow any politician to dismantle a program that they had paid into. The plan would begin paying out in 1942. There were also grants for the blind, the disabled, and families with dependent children. This meant widows, whose husbands had died or were disabled, or married women who had been abandoned by a husband who deserted them. It did not apply to unmarried women who had children out of wedlock. The original bill included a provision for health insurance (hospitalization). The American Medical Association opposed it (fearing government control over doctors and hospitals), and it was left out of the bill. The Social Security Act also did not include farmers, farm, laborers (like sharecroppers), domestic workers or self-employed workers (Enduring Vision, p. 824). In part, the farm laborers and domestics were the most vulnerable workers, and politically had no voice or advocates, and did not want their meager wages to suffer withholding. Farmers and self-employed people also did not want to be taxed.

In June 1935 Congress approved the National Youth Administration (NYA). It provided funding for 2 million part-time jobs for high school and college students. The program provided tuition for college or job training, and a job. It was a kind of forerunner to the Job Corps or College Work-Study Program of the 1960s. The national director of the NYA was Aubrey Williams, a liberal white man from Alabama who believed in interracial cooperation. The Director of Negro Affairs within the NYA was Mary McLeod Bethune. She was a close friend of Eleanor Roosevelt. Mrs. Bethune funneled jobs and tuition to more than 64,000 African American men and teenage boys. In general the New Deal programs gave preference to whites, and some were segregated, but the NYA was open to African Americans. Each state had a state director, who apportioned a share of the money and jobs to deserving individuals in his state. In Texas, in 1935, a twenty-six year old young man named Lyndon Baynes Johnson was named state director of the NYA. In time, LBJ would go on to become Senate Majority Leader (1955), vice president to John Kennedy (1961-1963), and then president of the United States (1963-Jan. 1969) following the assassination of JFK. LBJ began his governmental career as a director of a New Deal program. Under his direction, the NYA in Texas provided schooling and training for 20,000 young Texans, and jobs for nearly 10,000 others (Schulman, p. 16). In 1937 LBJ would win a special election to fill the seat of Congressman James Buchanan. LBJ began his political career in the 1930s as a New Deal program director, and then as a congressman who supported FDR and the New Deal.

THE NEW DEAL COALITION

These programs (Social Security, NYA, public works) were enormously popular. In 1936 FDR won in a landslide. In the Electoral College, FDR carried very state except for Vermont and Maine. His Republican opponent, Alf Landon, did not even carry his own state of Kansas. Pennsylvania voted Democrat for the first time since 1856. It was with FDR, too, that African Americans, who had voted Republican since Lincoln, switched to the Democratic Party. Although white supremacists in the South at that time were Democrats, in 1936, in the North, 76 percent of African Americans voted for FDR. FDR put together the Democratic "New Deal coalition." This was an odd coalition of white Southerners, workers in the cities of the North, African Americans (who could vote in the North but not in the South), and farm interests in the Midwest and West. The workers in the Northern cities tended to be immigrants or the children of immigrants, and were largely "ethnics" (Irish, Italian, Polish) and of Catholic and Jewish religious background. The suburban and rural counties in the North tended to be more (native born Protestant) Republican.

THE IMAGE OF RESPONSIVENESS

FDR presented the government as responsive to the needs of the people. He projected the image that he cared about them. This was the secret of his charisma. The question was, "What is government doing for me and my needs?" The people were for FDR because it seemed that he was for them. Allegiance is a two-way street. If the Government doesn’t care about me, and is indifferent to me while I suffer and starve, then why should I care about my Government? If my country "isn’t there" for me in my time of need, why should I care about IT or "be there" for It in its time of need? Authoritarian dictatorships and despotisms can afford to ignore their subjects. A democracy that is based on the voluntary consent and support of the governed cannot afford to give the impression that it ignores the fate of its citizens. In a democracy, every day is a plebiscite (referendum).

FDR AND LABOR

The National Industrial Recovery Act of 1933 had included the famous Section 7a, that guaranteed the right of workers to form unions and bargain collectively. It also provided for the 40 hour work week. When the Supreme Court struck down NIRA in 1935, these measures were placed in jeopardy. Therefore, Senator Robert F. Wagner of New York proposed the Wagner Labor Relations Act. FDR supported it, and it became law in July 1935. It recognized the right of workers to form unions and to bargain collectively. It specified that the closed shop was legal. In a closed shop, all workers become members of the union as a condition of employment, so that the union can bargain as the representative of all the workers. The Act outlawed companies from spying on unions and blacklisting union activists or "agitators." It also created the National Labor Relations Board. The NLRB would certify unions, and monitor elections so that workers could vote eon whether to have a union. And the Wagner Act specified that the principle of majority rule would prevail. The union that won a majority of the votes of the workers would be the one and only recognized union on behalf of all of the workers at a workplace, except for craft unions (give example).
 
 

In November 1935 John L. Lewis, of the United Mine Workers, and Sidney Hillman, formed the Congress of Industrial Organizations (CIO). They broke with the American Federation of Labor (AF of L), which persisted in trying to organize craft workers. The CIO favored mass production industrial unionism, where all of the workers who work for a given employer (such as GM or Chrysler or GE) are in one union. The CIO was determined to form unions.

General Motors still refused to recognize the right of workers to form independent unions and bargain collectively. In December 1936 the workers at the Fisher Body Plant in Flint, Michigan plant staged a sit-down strike. They did not walk out of the plant. They barricaded themselves IN the plant. Then the Chrysler workers did the same thing. The wives and families brought food to the men inside. The companies wanted the police to go in and force the striking workers out, but the workers replied that the police would have to drag them out. President Roosevelt refused to send the army in against the workers, as Grover Cleveland had done in the Pullman Strike of 1894. Governor Frank Murphy of Michigan, a Democrat, refused to send state troops or the National Guard against the workers (as the governor of Pennsylvania had done in the Homestead Strike). The workers even defied a court injunction. And the company realized that if it were necessary to go in and evict the workers, the factory would be damaged or destroyed in the process. Millions of dollars in capital investment and equipment would be lost. The factory was valuable (maybe more valuable than the workers, who could be easily replaced). In a sense, the striking workers held the factory "hostage." The sit-down strike paralyzed GM. In the end, GM gave in and agreed to negotiations. Labor Secretary Frances Perkins mediated. On May 12, 1937, GM, which was a company controlled by J.P. Morgan and the Du Ponts, signed a contract with the United Auto Workers (UAW). The workers asserted themselves to secure their own rights. But the workers did not always "win."

THE FIGHT WITH THE COURT

By 1937 FDR was fed up with the obstruction of the Supreme Court, which had struck down the NRA and the first AAA. Several of the justices were elderly. One had been on the Court since 1910, and another since 1914 (Enduring Vision, p. 830). They were very much "out of touch" with modern sensibilities (even as "modern" would have meant in 1937). In spring 1936, by a vote of 5-4, the Court had struck down a New York state law that established a minimum wage. Roosevelt now feared that the Social Security Act and the Wagner Labor Relations Act, which had been challenged in the courts, would now meet death at the hands of the Court.

Accordingly, in February 1937, FDR introduced a bill that essentially would have packed the Supreme Court. Under the plan, whenever a justice on the Supreme court declined to retire at age 70, the president could nominate a new justice, up to a maximum Court of 15 justices. Critics accused him of trying to pack the Court and become a dictator. Under the Constitution, Congress does set the size of the Court, and can increase or decrease the size. The size of nine had been in place since 1869. FDR was making a veiled threat to the Court, that if it persisted in stomping over and ignoring the will of the people as represented in legislation passed by the Congress and the duly elected president, the Court would pay the price.

With this potential threat looming, on March 29, 1937 a case involving a Washington State minimum wage law was decided. The Supreme Court voted 5-4 to UPHOLD the law, which was similar in many ways to the New York State minimum wage law it had struck down. This time, Justice Owen Roberts switched sides. He had voted to strike down the New York minimum wage law. NOW he voted to uphold the Washington State minimum wage law. He voted with the four liberals, as the fifth and deciding vote in the case.

In April 1937, in a crucial case, the Supreme Court voted 5-4 to uphold the Wagner Labor Relations Act. Once again Owen Roberts, who previously had voted with the conservatives, voted with the liberals and cast the fifth and decisive vote.

On May 18 the ultra-conservative Willis van Devanter announced that he would retire at the end of the court term. On May 24, 1937, by a vote of 5-4, with Justice Owen Roberts voting with the majority, the Supreme Court upheld the unemployment compensation provisions of the Social Security Act. By a vote of 7-2 it also upheld the old age pensions part of the Social Security Act as constitutional. But it is critical to note that the unemployment compensation law came within ONE vote of being voided, and old age pensions even had two opponents on the Supreme Court.

Pundits quipped that "A switch in time saves nine." By shifting position, the Court showed that it had learned a political lesson. There was no need to pack the Court. Congress rejected FDR’s original proposal, and passed a change to the appeals process. The court packing scheme put the fear of God into the Court, and may have induced Justice Roberts to change sides. Instead of the Court striking down New Deal legislation by a vote of 5-4, it began to uphold New Deal legislation by 5-4. Roberts was the swing vote, and it saved the Wagner Act. FDR lost the Court battle, but won the war. By becoming more responsive to the will of the people and the Congress, the Court save itself from more politically transparent intervention.

To succeed Van Devanter, FDR nominated (and the Senate confirmed) Hugo Black, of Alabama, author of the 30 Hours bill of 1933. Within four years FDR named seven justices to the Court, creating the vastly more liberal "Roosevelt Court." The appointees were:

Hugo Black, 1937
Stanley Reed, 1938
Felix Frankfurter, 1939
William Douglas, 1939
Frank Murphy, 1940 (former governor of Michigan, during Flint Strike)
Robert Jackson, 1941
James Byrnes, 1941

The last hurrah of the New Deal was probably the Fair Labor Standards Act of 1938. It abolished child labor under the age of 16 (which had been abolished in the North in the Progressive Era but persisted in the South), and established a federal nationwide maximum 40 hour workweek (with time and a half for overtime) and a national minimum wage For the record, the minimum wage at that time was 40 cents an hour, to be implemented over 8 years (to 1946). Subsequently, the minimum wage was raised to 75 cents in 1949, and $1 in 1955. Republicans generally opposed the minimum wage because they said employers should be free to pay whatever wages they wanted, without government interfering in the employer-employee relationship (rights of private property). Beyond this, they argued that the minimum wage raises the wage bill for employers, who will respond by hiring fewer workers. And the minimum wage hurts small businesses that cannot afford it. In many parts of the South, employers fired Afro-Americans rather than pay them the minimum wage.
 

Some historians have criticized the New Deal for being radical or socialistic. Others say it didn’t go far enough, and watered down more fundamental change. In his final chapter, Leuchtenburg argues that the New Deal was a political success but an economic failure. It DID NOT solve the fundamental problem of unemployment and the Depression. It did not restore the economy. Rather, the economy began to revive in 1940 as World War II erupted in Europe and the government pumped millions of dollars into war production (although the US did not formally enter the war until after Pearl Harbor in December 1941).

However the New Deal was a political success (per Leuchtenberg) in that it steered a middle course between two other extremes, namely fascism and communism.

Fascism can be described as a dictatorship of the political right. It is a form of authoritarian capitalism that crushes unions and labor militancy. This is what Mussolini did in Italy and what Hitler did in Germany. It was a type of "command capitalism."

Communism is a dictatorship of the political left, the dictatorship of the proletariat (the workers) with the abolition of major private enterprises, and the imposition of state ownership of factories, mines, industry, etc. What both share in common is that both are DICTATORSHIPS. The US avoided both "extremes." There was no American caesar who used the military to seize power and overthrow the government and impose order on the unions or unemployed masses (which is what Hitler and Mussolini did) . There was no communist revolution to confiscate private wealth and impose a dictatorship of the workers (as with Lenin in Russia in 1917). Instead, the US preserved a fragile political democracy and gradually extended the rights of workers to form unions, and bargain collectively.

Leuchtenberg argues that the New Deal saved capitalism from itself, from its own excesses and abuses. The New Deal rejected laissez fair capitalism and the absolute power of private employers to control their enterprise in any way they see fit. It produced a new, more modern, more resilient form of capitalism, a hybrid form of capitalism, called welfare capitalism. However the US did not nationalize or confiscate the private industries. Welfare capitalism preserves the capitalist base or foundation, and imposes an addition on top of it (a superstructure). This "super-structure" is the general welfare state, or safety net. Private property is regulated, not confiscated through state ownership. Welfare capitalism limits hours (40 hour work week, with time and a half for overtime), grants a minimum wage, permits unions, serves as an employer of last resort (public works jobs) if there is mass unemployment, and provides accident insurance (unemployment compensation), disability benefits; retirement pensions for the elderly; "welfare" for the poor and unemployed, etc. It provides public housing and subsidies for the homeless. This moderates or ameliorates human suffering, and takes care of those whom the private sector cannot take care of. And it contributes to stability for the society as a whole.

The New Deal welfare state is the modern society that we recognize, and is a more humane step forward. It is an advance beyond primitive capitalism and laissez faire. In the 1960s liberals would build upon the foundation laid by the New Deal to add Medicare, Medicaid, Head Start, grants and loans for college, aid to elementary and secondary education, consumer protection, environmental protection, mass transit and other kinds of subsidies. Finally, we appreciate this system more when we realize that there are still many countries in the World, especially poor Third World countries, that still do not have Social Security, unemployment compensation, a 40 hour work week, a minimum wage, public housing, a safety net. One’s family is the only safety net that they have. If you are old, your adult children take care of you, or you just die. Who among us would want to trade places with them, or that? Who among us would want to go back to such primitive and pathetic conditions? Who wants America to become a Third World country? The New Deal was not perfect. It was not a revolution. It did not trickle down to everybody. But it was gradual step forward into modernity. We are a better country, and a better people, for having it. And without it, no one can say how much turmoil and upheaval would have occurred. The New Deal was a pacifier. It was a safety valve. The suffering of the Depression is what brought Hitler to power in Germany. Mass unemployment and starvation led the German people to turn to him. He promised to create jobs and restore the economy, and for a while he did—before he turned to foreign conquest and the Holocaust. The US could have taken its own turn into an American form of fascism. The better that we understand the alternative paths, the more we appreciate FDR and the New Deal.