As governor, Graves earned a reputation as a reformer, abolishing the convict leasing system and raising taxes on public utilities, railroads, and coal and iron companies. The new revenue was used to expand educational and public health facilities, increase teachers' salaries and veterans' pensions, fund an ambitious road-building program, and improve port facilities in Mobile. "To maintain his popularity among the farmers in northern Alabama and the working classes, Graves made good on his commitment to New Deal legislation, winning a reputation as one of the most progressive governors in the South." During his second gubernatorial administration he supported Franklin D. Roosevelt's "court packing" plan and Hugo Black's nomination to the U.S. Supreme Court. In 1937, when Black's ties to the Klan were debated in Congress, Graves noted his own previous membership as well, a membership that had been publicly revealed when he resigned from the organization in 1928.