Written by Oscar Handlin
Written by Oscar Handlin

United States

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Written by Oscar Handlin
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The culmination of the New Deal

Roosevelt lost further prestige in the summer of 1937, when the nation plunged into a sharp recession. Economists had feared an inflationary boom as industrial production moved up to within 7.5 percent of 1929. Other indices were high except for a lag in capital investment and continued heavy unemployment. Roosevelt, fearing a boom and eager to balance the budget, cut government spending, which most economists felt had brought the recovery. The new Social Security taxes removed an additional $2,000,000,000 from circulation. Between August 1937 and May 1938 the index of production fell from 117 to 76 (on a 1929 base of 100), and unemployment increased by perhaps 4,000,000 persons. Congress voted an emergency appropriation of $5,000,000,000 for work relief and public works, and by June 1938 recovery once more was under way, although unemployment remained higher than before the recession.

Roosevelt’s loss of power became evident in 1938, when his attempts to defeat conservative congressional Democrats in the primaries failed. In the fall Republicans gained 80 seats in the House and seven in the Senate. The Democratic Party retained nominal control of Congress, but conservative Democrats and Republicans voting together defeated many of Roosevelt’s proposals. A few last bills slipped through. The U.S. Housing Authority was created in 1937 to provide low-cost public housing. In 1938 the Fair Labor Standards Act established a minimum wage and a maximum work week. Otherwise, the president seldom got what he asked for.

Apart from the New Deal itself, no development in the 1930s was more important than the rise of organized labour. This too had negative, or at least mixed, effects upon Roosevelt’s political power. When the depression struck, only 5 percent of the work force was unionized, compared to 12 percent in 1920. The great change began in 1935 when the American Federation of Labor’s Committee for Industrial Organization broke away from its timid parent and, as the Congress of Industrial Organizations (after 1938), began unionizing the mass production industries. The CIO had a unique tool, the sit-down strike. Instead of picketing a plant, CIO strikers closed it down from inside, taking the factory hostage and preventing management from operating with nonunion workers. This, together with the new reluctance of authorities, many of them Roosevelt Democrats, to act against labour, made sit-down strikes highly successful. On February 11, 1937, after a long sit-down strike, General Motors, the country’s mightiest corporation, recognized the United Auto Workers. The United States Steel Corporation caved in less than a month later, and by 1941 some 10,500,000 workers were unionized, three times as many as a decade before. The CIO became a mainstay of the New Deal coalition, yet it also aroused great resentment among middle-class Americans, who opposed strikes in general but the CIO’s tactics especially. This further narrowed Roosevelt’s political base.

An assessment of the New Deal

The New Deal established federal responsibility for the welfare of the economy and the American people. At the time, conservative critics charged it was bringing statism or even socialism. Left-wing critics of a later generation charged just the reverse—that it bolstered the old order and prevented significant reform. Others suggested that the New Deal was no more than the extension and culmination of progressivism. In its early stages, the New Deal did perhaps begin where progressivism left off and built upon the Hoover program for fighting the depression. But Roosevelt soon took the New Deal well beyond Hoover and progressivism, establishing a precedent for large-scale social programs and for government participation in economic activities. Despite the importance of this growth of federal responsibility, the New Deal’s greatest achievement was to restore faith in American democracy at a time when many people believed that the only choice left was between communism and fascism. Its greatest failure was its inability to bring about complete economic recovery. Some economists, notably John Maynard Keynes of Great Britain, were calling for massive deficit spending to promote recovery; and by 1937 the New Deal’s own experience proved that pump priming worked, whereas spending cutbacks only hurt the economy. Roosevelt remained unpersuaded, however, and the depression lingered on until U.S. entry into World War II brought full employment.

World War II

The road to war

After World War I most Americans concluded that participating in international affairs had been a mistake. They sought peace through isolation and throughout the 1920s advocated a policy of disarmament and nonintervention. As a result, relations with Latin-American nations improved substantially under Hoover, an anti-imperialist. This enabled Roosevelt to establish what became known as the Good Neighbor Policy, which repudiated altogether the right of intervention in Latin America. By exercising restraint in the region as a whole and by withdrawing American occupation forces from the Caribbean, Roosevelt increased the prestige of the United States in Latin America to its highest level in memory.

As the European situation became more tense, the United States continued to hold to its isolationist policy. Congress, with the approval of Roosevelt and Secretary of State Cordell Hull, enacted a series of neutrality laws that legislated against the factors that supposedly had taken the United States into World War I. As Italy prepared to invade Ethiopia, Congress passed the Neutrality Act of 1935, embargoing shipment of arms to either aggressor or victim. Stronger legislation followed the outbreak of the Spanish Civil War in 1936, in effect penalizing the Spanish government, whose fascist enemies were receiving strong support from Benito Mussolini and Adolph Hitler.

In the Pacific Roosevelt continued Hoover’s policy of nonrecognition of Japan’s conquests in Asia. When Japan invaded China in 1937, however, he seemed to begin moving away from isolationism. He did not invoke the Neutrality Act, which had just been revised, and in October he warned that war was like a disease and suggested that it might be desirable for peace-loving nations to “quarantine” aggressor nations. He then quickly denied that his statement had any policy implications, and by December, when Japanese aircraft sank a U.S. gunboat in the Yangtze River, thoughts of reprisal were stifled by public apathy and by Japan’s offer of apologies and indemnities. With strong public opposition to foreign intervention, Roosevelt concentrated on regional defense, continuing to build up the navy and signing mutual security agreements with other governments in North and South America.

When Germany’s invasion of Poland in 1939 touched off World War II, Roosevelt called Congress into special session to revise the Neutrality Act to allow belligerents (in reality only Great Britain and France, both on the Allied side) to purchase munitions on a cash-and-carry basis. With the fall of France to Germany in June 1940, Roosevelt, with heavy public support, threw the resources of the United States behind the British. He ordered the War and Navy departments to resupply British divisions that had been rescued at Dunkirk minus their weaponry, and in September he agreed to exchange 50 obsolescent destroyers for 99-year leases on eight British naval and air bases in the Western Hemisphere.

The question of how much and what type of additional aid should be given to the Allies became a major issue of the election of 1940, in which Roosevelt ran for an unprecedented third term. Public opinion polls, a new influence upon decision makers, showed that most Americans favoured Britain but still wished to stay out of war. Roosevelt’s opponent, Wendell Willkie, capitalized on this and rose steadily in the polls by attacking the president as a warmonger. An alarmed Roosevelt fought back, going so far as to make what he knew was an empty promise. “Your boys,” he said just before the election, “are not going to be sent into any foreign wars.” In truth, both candidates realized that U.S. intervention in the war might become essential, contrary to their public statements. Roosevelt won a decisive victory.

Upon being returned to office, Roosevelt moved quickly to aid the Allies. His Lend-Lease Act, passed in March 1941 after vehement debate, committed the United States to supply the Allies on credit. When Germany, on March 25, extended its war zone to include Iceland and the Denmark Straits, Roosevelt retaliated in April by extending the American Neutrality Patrol to Iceland. In July the United States occupied Iceland, and U.S. naval vessels began escorting convoys of American and Icelandic ships. That summer Lend-Lease was extended to the Soviet Union after it was invaded by Germany. In August Roosevelt met with the British prime minister, Winston Churchill, off the coast of Newfoundland to issue a set of war aims known as the Atlantic Charter. It called for national self-determination, larger economic opportunities, freedom from fear and want, freedom of the seas, and disarmament.

Although in retrospect U.S. entry into World War II seems inevitable, in 1941 it was still the subject of great debate. Isolationism was a great political force, and many influential individuals were determined that U.S. aid policy stop short of war. In fact, as late as August 12, 1941, the House of Representatives extended the Selective Training and Service Act of 1940 by a vote of only 203 to 202. Despite isolationist resistance, Roosevelt pushed cautiously forward. In late August the navy added British and Allied ships to its Icelandic convoys. Its orders were to shoot German and Italian warships on sight, thus making the United States an undeclared participant in the Battle of the Atlantic. During October one U.S. destroyer was damaged by a German U-boat and another was sunk. The United States now embarked on an undeclared naval war against Germany, but Roosevelt refrained from asking for a formal declaration of war. According to public opinion polls, a majority of Americans still hoped to remain neutral.

The war question was soon resolved by events in the Pacific. As much as a distant neutral could, the United States had been supporting China in its war against Japan, yet it continued to sell Japan products and commodities essential to the Japanese war effort. Then, in July 1940, the United States applied an embargo on the sale of aviation gas, lubricants, and prime scrap metal to Japan. When Japanese armies invaded French Indochina in September with the apparent purpose of establishing bases for an attack on the East Indies, the United States struck back by embargoing all types of scrap iron and steel and by extending a loan to China. Japan promptly retaliated by signing a limited treaty of alliance, the Tripartite Pact, with Germany and Italy. Roosevelt extended a much larger loan to China and in December embargoed iron ore, pig iron, and a variety of other products.

Japan and the United States then entered into complex negotiations in the spring of 1941. Neither country would compromise on the China question, however, Japan refusing to withdraw and the United States insisting upon it. Believing that Japan intended to attack the East Indies, the United States stopped exporting oil to Japan at the end of the summer. In effect an ultimatum, since Japan had limited oil stocks and no alternative source of supply, the oil embargo confirmed Japan’s decision to eliminate the U.S. Pacific Fleet and to conquer Southeast Asia, thereby becoming self-sufficient in crude oil and other vital resources. By the end of November Roosevelt and his military advisers knew (through intercepted Japanese messages) that a military attack was likely; they expected it to be against the East Indies or the Philippines. To their astonishment, on December 7 Japan directed its first blow against naval and air installations in Hawaii. In a bold surprise attack, Japanese aircraft destroyed or damaged 18 ships of war at Pearl Harbor, including the entire battleship force, and 347 planes. Total U.S. casualties amounted to 2,403 dead and 1,178 wounded.

On December 8, 1941, Congress with only one dissenting vote declared war against Japan. Three days later Germany and Italy declared war against the United States; and Congress, voting unanimously, reciprocated. As a result of the attack on Pearl Harbor, the previously divided nation entered into the global struggle with virtual unanimity.

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