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Depression and FDR

Hoover and Roosevelt



Hoover and Roosevelt on Roosevelt's Inauguration Day March 4, 1933. Image Source: Library of Congress

Franklin Delano Roosevelt was elected to his first term as President in November 1932, defeating the incumbent Herbert Hoover by 7 million votes. There had been little doubt over the election's outcome given the widespread economic distress during Hoover's administration. In a period of ten weeks after the stock market crash on October 24, 1929, stocks on the New York Stock Exchange lost 50 percent of their value. As stock prices continued to fall during the early 1930s, banks closed, businesses failed, and unemployment rose sharply, doubling from 4 million in 1930 to 8 million in 1931. By 1932, there were 12 million without jobs--one of every four workers.

HoovervillePresident Hoover had taken some steps to soften the impact of the economic depression, primarily by increasing federal construction of public works projects and urging state and local governments also to expand their own building programs. The Administration also encouraged voluntary efforts by employers to spread available jobs to more people through shortened workweeks and workdays. Hoover resisted, however, additional spending on relief for the unemployed that would produce a federal budget deficit, maintaining his belief that the economy would start to improve without the need of extraordinary government intervention. The President's restraint inevitably led to personal attacks linking him with the cause of distress, such as the so-called "Hoovervilles", the shanty towns set up throughout the country where those who had lost their homes through foreclosure lived in makeshift shelters. Resident of a "Hooverville". Image Source: Library of Congress.

In 1931, he vetoed a bill providing bonuses for World War I veterans, disputing the contention of its supporters that the bill would help stimulate spending and strengthen the economy. In 1932, thousands of veterans traveled to Washington as the

We can not further the restoration of prosperity by borrowing from some of our people, pledging the credit of all of the people, to loan to some of our people who are not in need of the money. If the exercise of these rights were limited to expenditure upon necessities only, there would be no stimulation to business. The theory of stimulation is based upon the anticipation of wasteful expenditure. It can be of no assistance in the return of real prosperity. If this argument of proponents is correct, we should make Government loans to the whole people. . . .

President Herbert Hoover's message of February 26, 1931, to House of Representatives returning Bonus Bill without approval)

See The Depression Papers of Herbert Hoover, Hoover

"Bonus Expeditionary Force" or "Bonus Army" to lobby unsuccessfully for Congressional passage of a new bonus bill; even after the bill was defeated in the Senate on June 17, they stayed for weeks longer in makeshift tent camps until troops under the command of General Douglas MacArthur were called out on July 28 to clear the streets. MacArthur apparently ignored orders from Hoover not to pursue the protestors to their main camp across the river from downtown Washington, which was destroyed by a fire of uncertain origin, but MacArthur's praise of Hoover for his action placed responsibility on the President for the unpopular move just as his 1932 re-election campaign began.

The message conveyed from the outset by Roosevelt's campaign was that his administration would be an activist government, providing a sharp contrast to the economic theory of the Republicans. At the Democratic Convention in Chicago, where he broke precedent by appearing personally to accept the nomination and address the delegates, Roosevelt promised a "New Deal" (adapted from his cousin Theodore Roosevelt's "square deal"):

Our Republican leaders tell us economic laws — sacred, inviolable, unchangeable — cause panics which no one could prevent. But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.

Yes, when — not if — when we get the chance, the Federal Government will assume bold leadership in distress relief. For years Washington has alternated between putting its head in the sand and saying there is no large number of destitute people in our midst who need food and clothing, and then saying the States should take care of them, if there are. Instead of planning two and a half years ago to do what they are now trying to do, they kept putting it off from day to day, week to week, and month to month, until the conscience of America demanded action.

I say that while primary responsibility for relief rests with localities now, as ever, yet the Federal Government has always had and still has a continuing responsibility for the broader public welfare. It will soon fulfill that responsibility.

....I pledge you, I pledge myself, to a new deal for the American people. Let us all here assembled constitute ourselves prophets of a new order of competence and of courage. This is more than a political campaign; it is a call to arms. Give me your help, not to win votes alone, but to win in this crusade to restore America to its own people.

Acceptance speech of Franklin D. Roosevelt for Democratic Nomination, July 2, 1932, New Deal Network

Roosevelt's campaign also departed from tradition in communicating its message by making the candidate freely accessible to the press, even adding a special press car to its campaign train. The campaign also was the first to make extensive use of radio broadcasts, exploiting Roosevelt's reassuring voice and confident delivery that would later be effectively used during his Administration. The positive relationships with the media cultivated by Roosevelt also may have contributed to the unspoken policy adopted by the media to avoid references to or photographs of his paralysis from the effects of polio he had contracted in 1921 at the age of 39.

After Roosevelt's overwhelming election in November 1932, a rather contentious relationship developed between the president-elect and and the the outgoing Hoover administration, which continued to urge a more cautious fiscal policy. As the public demanded immediate action to confront the economic crisis and the Republicans had been soundly repudiated at the polls, the protracted transition period then provided until the new president was inaugurated in March 1933 led to calls for a shorter transition, which would ultimately lead to the approval of the 20th Amendment to the Constitution changing the inaugural date to January 20 following the presidential election.

Letter dated February 21, 1933, from President Hoover to Ohio Republican Senator Simeon D. Fess

There have been proposed in Congress by Democratic leaders and publicly even by the President-elect, projects involving federal expenditure of tremendous dimensions which would obviously lie beyond the capacity of the federal government to borrow without tremendous depreciation in government securities. Such proposals as the bills to assume Federal responsibility for billions of mortgage loans to municipalities for public works, the Tennessee improvement and Muscle Shoals, are all of this order. The proposals of Speaker Garner that constitutional government should be abandoned because the Congress, in which there will be an overwhelming majority, is unable to face reduction of expenses, has started a chatter of dictatorship. The President-elect has done nothing publicly to disavow any of these proposals....

...The President-elect is the only man who has the power to give assurances which will stabilize public mind as he alone can execute them. Those assurances should have been given before now but must be given at once if the situation is to be greatly helped. It would allay some fear and panic whereas delay will make the situation more acute.

The present administration is devoting its days and nights to put out the fires and localize them. I have scrupulously refrained from criticism which is well merited but have instead been giving repeated assurances to the country of our desire to cooperate and help the new administration.

Roosevelt's Inaugural Address on March 4 sought to reassure the public's confidence in the economy and its institutions, focused by his famous phrase "...the only thing we have to fear is fear itself".

So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days.

Roosevelt also continued to talk directly to the public through radio, with his first of several Fireside Chats discussing the banking crisis broadcast on March 12, 1933, just eight days after he took office. In May, he gave further details of his other New Deal programs.

The rapid pace of proposals offered during the first "hundred days" of the Roosevelt Administration set an informal benchmark for measuring the records of subsequent new presidents. Congress took quick action on his broad recovery program for business and agriculture, relief to the unemployed and to those about to lose farms and homes, The program included massive building projects, such as dams and hydroelectic power developed through the establishment of the Tennessee Valley Authority, and extensive regulation of business and labor by such new agencies as the National Recovery Administration established under the National Industrial Recovery Act of 1933. A key component of the programs were codes that business and labor were directed to adopt on how specific industries would manage prices and wage levels that would be submitted to the National Recovery Administration for approval.

By 1935, some measure of recovery was apparent, but opposition continued to the New Deal's extraordinary intervention in the economy and the surging federal deficits. In May, 1935, in the case of the Schechter Poultry Corp. v. United States the U.S. Supreme Court invalidated the compulsory-code system as it regulated the poultry industry on the grounds that the legislation establishing the NRA was an unconstitutional delegation of legislative powers to the executive and that the provisions of the poultry code did not constitute a regulation of interstate commerce. Subsequent decisions by the Court also held that other components of the New Deal were unconstitutional.

Following Roosevelt's 1936 landslide re-election in which he won every state except Maine and Vermont and received 523 electoral votes to just 8 for the Republican candidate Alf Landon, he sought legislation to enlarge the Supreme Court. Roosevelt was sworn in for his second term on January 20, the date set by the new 20th Amendment to shorten the protracted transitions that had been such a problem after the 1932 election. Roosevelt sent to Congress a bill to reorganize the federal judiciary, soon dubbed the "court-packing bill" since it would give the president an additional judicial appointment for each sitting federal judge over the age of 70. As applied to the Supreme Court, it would have given the President an additional six appointments, expanding the number of justices from nine to 15. On March 9, 1937, Roosevelt addressed the American public on his plan in one of his Fireside Chats:

The Court in addition to the proper use of its judicial functions has improperly set itself up as a third house of the Congress - a super-legislature, as one of the justices has called it - reading into the Constitution words and implications which are not there, and which were never intended to be there....

What is my proposal? It is simply this: whenever a judge or justice of any federal court has reached the age of seventy and does not avail himself of the opportunity to retire on a pension, a new member shall be appointed by the president then in office, with the approval, as required by the Constitution, of the Senate of the United States.

Fireside Chat on Reorganization of the Judiciary, March 9, 1937

The Oyez Project, Northwestern University

Despite the President's efforts, the plan attracted sharp criticism in the course of Senate Judiciary Committee hearings held later in March. The Court also began to rule in favor of the Administration in some sharply disputed cases, thus undermining Roosevelt's argument that the Court was biased against reform. Justice Owen J. Roberts, the youngest member of the Court who had previously voted with the conservative members, started to vote for Roosevelt's position, giving the Administration 5 to 4 victories in key cases. In March, the Court upheld a Washington State minimum wage law; in April it rejected a challenge to the National Labor Relations Act; and in May the Court found that the Social Security Act was constitutional. By June, Roosevelt was forced to agree to a proposed compromise that would allow him to name just two new justices; however, this proposal lost support when the Committee issued a report calling the plan "a needless, futile and utterly dangerous abandonment of constitutional principle … without precedent or justification." Democratic Majority Leader Joseph T. Robinson, the President's prime advocate for the legislation, also suffered chest pains shortly after the Senate floor debate began on July 2 and died on July 14. On July 22, the Senate voted 70-20 to send the measure back to committee, where all the controversial language was deleted. The Senate passed the revised legislation a week later, and Roosevelt reluctantly signed it into law on August 26.

Soon, the composition of the Court also changed with the retirement or death of the older justices. In 1937, Roosevelt named Senator Hugo L. Black; in 1938, Solicitor General Stanley Reed; and in 1939, Harvard Law Professor Felix Frankfurter and Chairman of the Securities and Exchange Commission William O. Douglas.
By 1941, the President had appointed seven of the nine justices, and the philosophical shift of the Court to support government intervention would continue through at least three decades.


The Wall Street Crash >> BBC

Great Depression and World War II >> Library of Congress

Herbert Hoover and the Depression >> Herbert Hoover Presidential Library-Museum

The Bonus March, (May-July, 1932) >>

Educational Tools

1932: Roosevelt defeats Hoover >> Department of Political Science & International Affairs, Kennesaw State University

Franklin Delano Roosevelt's Deception: Was It Successful? >> Gifted Education and Special Education Lesson Plans and Resources, Edmund J. Sass, Ed.D., College of Saint Benedict, Saint John's University

New Deal Network, Institute for Learning Technologies, Columbia University

New Deal Lesson Plans, New Deal Network, Institute for Learning Technologies, Columbia University

FDR and the Supreme Court, New Deal Network, Institute for Learning Technologies, Columbia University