The Great Depression
The End of the New Deal (1937-1939)
By 1936, Roosevelt and his
New Deal won record popularity. In November, Roosevelt annihilated his
Republican challenger, Governor Alf Landon of Kansas, who lost in every
state save Maine and Vermont. The Great Depression had certainly not
ended, but it appeared to be retreating, and Roosevelt, now safely
reelected, appeared ready to take advantage of both his popularity and
the improving economic climate to press for even more dramatic changes.
But conservative barriers continued to limit the power of his popular
support. The Supreme Court, for instance, continued to gut many of his
programs.
In 1937, concerned that the Court might overthrow
social security in an upcoming case, Roosevelt called for legislation
allowing him to expand the Court by appointing a new, younger justice
for every sitting member over age seventy. Roosevelt argued that the
measure would speed up the Court's ability to handle a growing backlog
of cases; however, his "court-packing scheme," as opponents termed it,
was clearly designed to allow the president to appoint up to six
friendly, pro–New Deal justices to drown the influence of old-time
conservatives on the Court. Roosevelt's "scheme" riled opposition and
did not become law, but the chastened Court thereafter upheld social
security and other pieces of New Deal legislation. Moreover, Roosevelt
was slowly able to appoint more amenable justices as conservatives died
or retired. Still, the court-packing scheme damaged the Roosevelt
administration emboldened New Deal opponents68
Compounding his
problems, Roosevelt and his advisors made a costly economic misstep.
Believing the United States had turned a corner, Roosevelt cut spending
in 1937. The American economy plunged nearly to the depths of 1932–1933.
Roosevelt reversed course and, adopting the approach popularized by the
English economist John Maynard Keynes, hoped that countercyclical,
compensatory spending would pull the country out of the recession, even
at the expense of a growing budget deficit. It was perhaps too late. The
Roosevelt Recession of 1937 became fodder for critics. Combined with
the court-packing scheme, the recession allowed for significant gains by
a conservative coalition of southern Democrats and Midwestern
Republicans in the 1938 midterm elections. By 1939, Roosevelt struggled
to build congressional support for new reforms, let alone maintain
existing agencies. Moreover, the growing threat of war in Europe stole
the public's attention and increasingly dominated Roosevelt's interests.
The New Deal slowly receded into the background, outshined by war.69