The so-called Second New Deal of 1935 marked a shift in domestic policy from the government planning and controls that provided the foundation for the First New Deal of 1933 to a greater emphasis on social reform. The Second New Deal was characterized also by a heightening of anti-BusiNEss rhetoric in President Franklin D. Roosevelt’s appeals to an increasingly class-conscious electorate.
As with notions of a First New Deal and a Third New Deal, scholars disagree about the extent to which the Second New Deal represented either a dramatic ideological shift or a substantial change in policy. While some argue that in 1935 the agenda of the Roosevelt administration moved left, becoming increasingly antibusiness and pro-LABOR, others contend that the Second New Deal marked a conservative retreat from national planning and restructuring of the American ECONOMY, to traditional progressive ANTIMONOPOLY policy. Still others argue that the Second New Deal maintained strong continuities with the First New Deal and was really a practical reshaping of New Deal policy in response to limitations of the First New Deal and to the changing political climate of the mid-1930s and the election of a more liberal Congress in 1934.
Although the Second New Deal appeared to represent a break from the ideology and methods that characterized the First New Deal, its goals of providing economic security and making efforts to protect the rights of organized labor were broadly consistent with those of earlier New Deal programs. The most prominent pieces of Second New Deal legislation were the Emergency Reliee Appropriation Act (ERAA), the Social Security Act, and the National Labor Relations Act (or Wagner Act). The ERAA provided an alternative to the direct handouts of the Federal Emergency Reliee Administration by placing a greater emphasis on the work-RELlEE programs of the new Works Progress Administration, though it drew upon earlier work-relief programs. The Social Security Act continued to expand the role of government in social welfare by establishing long-term programs for economic security. And the Wagner Act provided statutory authority to guarantee labor the right of collective bargaining as first outlined in Section 7(a) of the National Industrial Recovery Act (NIRA) of 1933.
While relief efforts and the Wagner Act had precursors in the First New Deal, and the Social Security Act had been under development since 1934, the Revenue Act OE 1935 and the Public Utility Holding Company Act (PUHCA) represented a move toward the left on the part of FDR. Facing political challenges from grassroots movements, notably the Share Our Wealth movement, led by Huey Long, Roosevelt sided with members of Congress who were proponents of “soak-the-rich” tax legislation. The PUHCA, designed to use the Securities and Exchange Commission to disentangle and reorganize complex webs of utility holding companies, prompted harsh criticism of the Roosevelt administration among businessmen and conservatives alike.
According to the “two New Deal” framework, the Second New Deal continued into World War II when, according to Roosevelt, “Dr. New Deal” gave way to “Dr. Win-the-War.” However, some scholars argue that during the late 1930s, a Third New Deal began, marking a substantial change in economic policy that was strongly influenced by the principles of Keynesianism.
Further reading: William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal, 1932-1940 (New York: Harper, 1963); William H. Wilson, “The Two New Deals: A Valid Concept?” The Historian 28 (February 1966): 268-288.
—Shannon L. Parsley
World History
