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This was an essay written in response to the question: "What were the greatest obstacles or accomplishments of the sedong New Deal between the 1934 and 1936 elections?"
















              The most important accomplishments of the New Deal between the elections of 1934 and 1936 were the Wagner Act and the Social Security Act.  The Wagner act is more officially known as the National Labor Relations Act.  It provided the groundwork for stronger unions and better working conditions.  The Social Security Acts remains a highly divisive piece of legislation to this day.

            Senator Robert Wagner of New York first introduced the Wagner Act in 1934.  Wagner drew up the Labor Disputes Act in response to what he saw as failings in the then operating National Labor Board of the NIRA.  He saw that although the NLB had established certain guidelines for relations between unions and companies, the organization lacked the ability to enforce its decisions.  In one telling instance, Weirton Steel refused to allow workers to vote for anything other than the company union.  This was directly opposed to what was stated in the NIRA, but the board lacked the ability to enforce the law, and so nothing punitive was done.[1] 

The bill introduced to congress was hotly contested and disliked by most congressmen for varying reasons.  Senators influenced by industrial groups were the first to attack it, denouncing the bill as being the death-knell of free enterprise.[2]  The bill was to create a National Labor Board with expanded powers.  No longer would the board be unable to enforce its decisions.  Instead, new abilities were to be given to the board.  It would have the ability to issue subpoenas, use the federal courts to enforce its orders, set up bargaining agents to end labor disputes, and issue cease-and-desist orders.[3]  Big business claimed that this was step towards a communist state, where the government would be in control of all business and labor.  In reality, it was a far cry from communism.  It never forced workers to unionize or join a specific union.  It only allowed them to organize if they so chose, and set up the federal government as an ally, should unions find themselves pitted against business interests.[4]  The business leaders, as usual, were simply looking out for themselves. 

It lacked support from the congressmen who supported such actions for a different reason.  Most simply saw the bill as unnecessary and a waste of time.  The congress had already passed the National Industrial Recovery Act, and they saw no need to go further in the interests of labor.  It was not until the Supreme Court declared the NRA unconstitutional in 1935 that New Dealers were ready to take further action for labor.[5]  After the NRA was struck down, a vacuum was created, and the supporters of the New Deal saw the need to pass new legislation to fill the void.  Since the NIRAs NRA no longer existed, it was necessary to crate a replacement.  It was at that point that Wagners bill began getting attention and praise.

Unfortunately, the bill also attracted amendments and proposed changes.  The resulting bill was unimpressive and mediocre.  It died on the floor of congress and was not taken seriously by the Senate leaders or by the Roosevelt administration until Wagner fixed many of the problems in the bill.  The result was a bill that impressed the Senate, and easily passed.  It was, in fact, the second version of the bill that was passed.  A version that Wagner had created after the fist failed.  The new version was simpler, and provided for a National Labor Board that was closer to the one created through the NIRA, but was permanent and able to enforce its orders.[6]

The last obstacle to the bill was Roosevelt himself.  Early on, he had declared himself neutral on the matter, refusing to take sides. This was a political move based almost entirely on Roosevelts need to try to keep all the political faction happy.  If he had sided with Wagner, the southern leaders in congress would have been upset.  If he had opposed the bill, the progressives would have been upset.  And so he declared himself neutral.[7]  He never offered support for the bill.  He only signed it into law after two things happened.  First, the Senate approved the bill by an overwhelming vote of 63-12.[8]  Second, the Supreme Court struck down the NRA as being unconstitutional, making FDR feel he needed to react.[9]  On July 5, 1935 Roosevelt signed the bill into law.  And by doing so, he helped ensure that he received at least partial credit for the bill.  He saw the support for the bill and acted to gain credit for himself, much as politicians have always done.[10]  This would pay off later for the president.

The Wagner Act had long reaching implications, and is considered by some to be the most important and revolutionary federal law put on the statute books in the 1930s.[11]  One of the effects most quickly felt was during the 1936 election.  Because of the class division created by the depression and New Deal legislation, businessmen could be counted upon for fewer financial contributions to the Democratic cause.[12] In fact, whereas before they had contributed a full quarter of Roosevelts campaign funds in 1932, they only contributed 3 percent of his funds for the 1936 elections.  But largely because of the Wagner Act, organized labor picked up the slack.  They saw a need to keep Roosevelt, a friend of labor, in office.[13]  If the Wagner Act had not been passed, there is an excellent chance that unions would not have contributed so heavily to the Democratic Party and Roosevelt in particular.  However, because the class divisions were created not only by legislation like the Wagner Act, but also by the depression itself, it is probably that Roosevelt would still have lost funds from business.  And so supporting the Wagner Act in the end paid off for the president.

The Wagner Act was not a perfect piece of legislation.  It did not solve all labor problems, and the National Labor Relations Board had its shortcomings.  But the bill went further economically than most of the legislation passed during the first New Deal.  While it did not aid those on the lowest rungs of the economic ladder, it proved to be applicable to rungs lower than most.[14]  In short, it aided a large segment of the population, while hurting few.  Business interests were not hurt and the common worker saw his lot in life improve.[15]

The Social Security Act really began in the head of Dr. Townsend.  He was a leftist critic of Roosevelts administration and New Deal, and called for a form of a social safety net.  However, his plan was utterly worthless.  He called for a redistribution of money to the poor.  This was to be accomplished by a sales tax.  However, for the scheme to be properly financed, the tax would have had to be between 80 and 90 percent of a products value.  This, of course, was utterly impossible.[16]  However, the idea for a social security program found favor in the eyes of the public.  In 1935, about 89 percent of Americans were in support of a plan of this type, and petitions circulated by the Townsend Club received more signatures than any other petition in U.S. history.[17]  The time was ripe for a social security program, and the Roosevelt administration and congress saw it.

The social security program advocated by Roosevelt was vastly different from the one imagined my Townsend.  For one thing, Roosevelts plan was for a contribution to be taken from each paycheck, and the contributions would pay for the program.[18]  The payroll tax was a much more workable idea than an eighty percent sales tax.  It also included items other than an old age pension.  It included an unemployment and disability insurance.[19] 

The Social Security Act passed through congress easily, but some ideas were lost along the way.  Roosevelts plan included everyone.  The version that passed congress did not.  In order to keep the support of the southern states, it was necessary to remove agricultural and domestic workers from the plan.[20]  The plan also abandoned migrant workers and transient laborers, based on the argument that collecting payments would be too difficult to be feasible.[21]  In the original form of the bill, the plan included a national health insurance.  This was removed from the second version of the bill to maintain support from the American Medical Association[22]

The Social Security Act of 1935 also initially proved to be a bit of a failure economically.  Although the payroll tax recommended by Roosevelt was certainly far batter than a high sales tax, it strained the already weak economy as early on as 1936.[23]  By removing money from the public before they even had opportunity to spend it, purchasing power was taken away, and the economy slowed even more.  It was exactly the opposite of what was needed for the economy at that time.[24]  Also, since it was based on payroll taxes, low-income workers paid a higher percentage than those above the highest taxable level.[25]  The result was that the poor gave up more money, but saw less in return.  Also, the amount of money paid out differed by geography.  Those in the southern states received less than those in the north.  For example, an impoverished child in Massachusetts was given $61 a month, while an equally poor child was given only $8 a month.[26]

And yet despite its faults, and it had many, the Social Security Act was a political success for Roosevelt.  It worked towards identifying FDR as being on the side of the poor and needy instead of the wealthy and well to do.[27]  By giving the appearance of caring for the poor, the working class, and the elderly, Roosevelt gained status, regardless of whether his program hurt or helped the economy.  In effect, helped win back for Roosevelt the allegiance of the forgotten man.[28]  And FDR knew it.  He knew the political stature he would gain from it.  He knew that this one act would become his legacy.  He once stated that no politician can ever scrap my social security program.[29]  And indeed, it has become the most undefeatable piece of legislation in U. S. history.  Regardless of the constant attempts through the years to do away with it, social security remains.

There were many pieces of legislation passed between the years of 1934 and 1936 during the second new deal.  But the Wagner Act and the Social Security Act have proven to be the greatest accomplishments simply because they withstood time and accomplished more than the other legislation.  The Wagner Act put in place a board that served a greater part of the American public than any other similar piece of legislation.  It spread its good to workers that were too low socially to have received the benefit of similar bills passed before, such as the NIRAs NRA.  The Social Security Act remains standing, expanded from the form created in 1935.  These two acts of government stand out among the plethora of legislation to come out of the second new deal.



[1] T. H. Watkins, The Hungry Years: A Narrative History of the Great Depression in America (New York: Henry Holt, 1999), 297.

 

[2] Michael E. Parrish, Anxious Decades: America in Prosperity and Depression, 1920-1941 (New York: Norton, 1992), 355.

[3] Watkins, Hungry Years, 298.

[4] Robert S. McElvaine, The Great Depression: America 1929-1941 (New York: Times, 1984), 258.

[5] Watkins, Hungry Years, 300-301.

[6] Watkins, Hungry Years, 300.

[7] Parrish, Anxious Decades, 355.

[8] McEvlaine, Great Depression, 258.

[9] Parrish, Anxious Decades, 256.

[10] McEvlaine, Great Depression, 258

[11] Parrish, Anxious Decades, 354.

[12] McEvlaine, Great Depression, 279.

[13] McElvaine, Great Depression, 279.

[14] McElvaine, Great Depression, 336.

[15] McElvaine, Great Depression, 258.

[16] McElvaine, Great Depression, 242.

[17] McElvaine, Great Depression, 242.

[18] McElvaine, Great Depression, 256.

[19] Watkins, Hungry Years, 257-258.

[20] Parrish, Anxious Decades, 353.

[21] Watkins, Hungry Years, 258.

[22] Watkins, Hungry Years, 258.

[23] Parrish, Anxious Decades, 353.

[24] McElvaine, Great Depression, 256.

[25] McElvaine, Great Depression, 257.

[26] Parrish, Anxious Decades, 353.

[27] McElvaine, Great Depression, 256.

[28] McElvaine, Great Depression, 257.

[29] Franklin Roosevelt, as cited in Michael E. Parrish, Anxious Decades: America in Prosperity and Depression, 1920-1941 (New York: Norton, 1992), 353.