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The US Economy and Politic Opinion, 1936-37

In January 1936, Roosevelt asked Congress for 1.4 billion dollars for more relief work, to add to the 4.9 million he had asked for in 1935. And as the nation entered another presidential election year, conservatives continued to deplore the taxation they saw involved in servicing the debt.

As with France's reform government, the Roosevelt administration was allowing more power to labor unions. John L. Lewis organized an industrial union, which broke away from the American Federation of Labor and began organizing unions as allowed by provisions of the Wagner Act, building what was called the Congress of Industrial Organization (CIO). Sit-down strikes in the steel and automobile industries followed concerning the issues of union representation, the closed shop and wages. General Motors gave in and signed a contract with the CIO's United Auto Workers, recognizing this union as the sole bargaining agent for its workers. The Ford Motor Company resisted, using a gang of enforcers and resorting to violence.

More change came in 1936 when the US Circuit Court of Appeals decided that federal obscenity laws did not apply to legitimate activities of physicians, allowing doctors to prescribe contraceptives for the health and well-being of their patients. The American Medical Association approved of the court's decision. Margaret Sanger felt victorious, while birth control remained banned in three states: Massachusetts, Connecticut and Mississippi.

In 1936, Alfred Landon was the Republican candidate for president. He spoke of Roosevelt's "broken promises" and of Roosevelt being big on talk and short on performance. Landon spoke of continuing high unemployment. But he criticized the "old order" that had preceded Roosevelt's presidency. Landon spoke in support of social security, the right of workers to labor unions, and the abolition of sweatshops and child labor. He denounced Roosevelt's New Deal as filled with mistakes. Comparing the federal government to an individual household he complained that the government could not continue spending more than it received. He spoke of the need to subordinate material rewards and to "enthrone the things of the spirit." Then, turning to things material he said that the Roosevelt administration's intentions were laudable but that the remedy for the depression was to "start all over again" – with, of course, a Landon presidency.

On foreign affairs, Landon sided with the isolationist majority. He advocated remaining outside of any defensive pact with a European power. He was against any plan that might involve the United States in the building of "a false peace on the foundation of armed camps." Maintaining an alliance to deter any thoughts Hitler might have about re-arranging Europe by force was not a part of his vision for the future.

Also running against Roosevelt was the National Union for Social Justice, known as the "Union Party." This group included the anti-Communist radio priest, Father Coughlin, who was speaking of "Roosevelt and ruin." Coughlin saw the Jews as Christ killers and Christ rejecters, but at this point in his career he was mute in his anti-Semitism. Another Union Party activist was Gerald L.K. Smith, of Louisiana, a fire and brimstone preacher who had associated himself with Huey Long. With Long now dead, Smith wished to lead what remained of Long's movement, and he joined Coughlin in accusing Roosevelt of taking the country toward communism. Also a part of the Union Party coalition was Francis Townsend and his movement. Townsend described the Roosevelt administration as linked to both communism and fascism. The Union Party candidate for president was Senator William Lemke of North Dakota, who was angry with Roosevelt for opposing farm refinancing.

Some conservative Democrats broke with their party and became a part of what was called the Liberty League. Alfred Smith, the Democrat candidate for president in 28, was among them. He accused Roosevelt of having abandoned the Democrat's party platform of 1932. With the Liberty League were a number of Roosevelt haters and representatives of some major corporations: DuPont, US Steel, General Foods, all of them opposed to deficit spending and progressive taxation. Against the Liberty League were Father Coughlin and others of the Union Party, who attacked the Liberty League as the party of the fat cats.

Those opposed to Roosevelt tended to be white, middle-class Protestants who were employed. A few anti-Semites were among them, arguing that the Jews were controlling Roosevelt. On the other hand, those who favored Roosevelt and the Democrats tended to be the poor, blacks, big-city Catholics or Jews. Despite Roosevelt's failures in ending the depression many liked and trusted Roosevelt, believing that he cared about the common people. And Roosevelt tried to appeal to everyone. He spoke of the interdependence between workers, businessmen, farmers, consumers and state and national governments, and he gave himself credit for all improvements that had taken place since he had taken office.

A poll taken for Literary Digest gave Landon a lead in the voting, and it predicted a Landon victory. But the results were a greater victory for Roosevelt than in 1932. Roosevelt won 60.8 percent of the vote and every state except Vermont and Maine. In the House of Representatives, the Democrats came away with 331 seats against the Republicans' 89, and in the Senate they held 76 seats against 16 for the Republicans.

The Union Party candidate, Senator William Lemke, received 882,479 votes, about one for every nineteen votes for Landon. Father Coughlin was upset over the results of the election and said that Roosevelt could become a dictator if he wished and predicted that the National Union for Social Justice would make a comeback.

The Communists, despite all their efforts and their talk about the decline of capitalism, did worse than they had in 1932, winning only 1 out of 564 votes, proving that they were less of a threat than some excited Rightists portrayed them to be – unless one associated Roosevelt as leading the Communist cause.

In his inaugural address in January 1937, Roosevelt spoke of the nation as being one-third ill-housed, ill-clad and ill-nourished. Then he swung to a conservative economic policy. His Treasury secretary, Henry Morgenthau, was worried about business confidence and wanted him to balance the budget. Morgenthau saw recovery as dependent on business people increasing their investments, and in early 1937 Roosevelt ordered a reduction in federal spending.

The US economy went into decline by the spring of 1937, and by the fall of that year the decline was perceptible. By October, industrial production had fallen 14 percent, and in October alone more than one-half million people were thrown out of work. Called the Roosevelt Recession, it was accompanied by a drop in Roosevelt's popularity.  Roosevelt's recent attempt to pack the Supreme Court added to his unpopularity, his approval rating registering in polls at barely above a majority.

In March 1938, 63 percent would tell a Gallup survey that they were opposed to increased spending to combat the economic downturn. Only 15 percent would say it would be better to increase spending. note48   But the chairman of the Federal Reserve, Marriner Eccles, urged deficit spending. Eccles was a maverick businessman from Utah, a wealthy Mormon who had saved his banks from collapse. He saw absurdity in contemporary economic dogma. He did not buy into the analogy between the economy of a household and that of a government. The government should go into temporary debt, he believed, to stimulate demand and to get investors investing again. And influenced by Eccles, Roosevelt was cautiously moving again toward increased spending.


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