The New Deal Comes to a Screeching Halt in 1938

When Republicans and Democrats faced off for the 1938 midterm elections, it had been a decade since Republicans had done well in congressional elections. They had lost seats in both houses of Congress in 1930, 1932, 1934, and 1936, bringing their totals to a mere 88 in the House and 16 in the Senate. In the wake of Franklin Roosevelt’s landslide reelection victory in 1936, it was an open question whether the Republican Party was capable of serving as a viable opposition party.

As FDR began his second term, his program was hardly complete. He aimed for a “Third New Deal” of further government economic controls and redistributionism, and seemed to have the votes in Congress to push it through.

Then, a series of events damaged Roosevelt’s standing and rejuvenated the GOP’s chances.

First, overestimating his popularity and persuasive powers, Roosevelt embarked on his “court packing” scheme, bringing a backlash even among many Democrats in Congress. The attempt seemed to verify Republican charges that the President was engaged in a campaign for one-man rule.

Next, the nation was hit with a sharp economic downturn, a recession inside the Depression that soon came to be known as the “Roosevelt recession.” The 1937-38 downturn pushed the unemployment rate back near the 20 percent level, and accentuated the question of whether FDR’s economic policies were actually helping or hurting recovery.

During 1937-38, America was also rocked with a series of sit-down strikes and instances of union violence, mostly instigated by the Congress of Industrial Organizations (CIO). Many Americans associated the surge in aggressive unionism with Roosevelt’s encouragement of unions in the 1935 National Labor Relations Act.

Finally, in mid-1938, Roosevelt embarked on a campaign to deprive a number of anti-New Deal congressional Democrats of renomination in local Democratic primary elections. With a few exceptions, FDR failed, and incurred three costs: he turned a number of Democratic skeptics into irrevocable enemies, he appeared impotent, and he once again contributed to the picture of himself as power-hungry, perhaps dangerously so. It was particularly significant that in 1938, when the Moscow show-trials were running full-time, the press labeled FDR’s intra-party efforts a “purge.”

Altogether, while there were few signs that Americans were ready to thoroughly repudiate Roosevelt or the New Deal, there were many signs that they were ready to rein the president in. An August 1938 Gallup poll showed that 66 percent of Americans wanted FDR to pursue more conservative policies.

When the election results were in, Democrats had lost six Senate seats and 71 House seats in what former Roosevelt advisor Raymond Moley called “a comeback of astounding proportions.” Republicans nearly matched the Democratic national House vote total, 47 percent to 48.6 percent; if one takes into account overwhelming Democratic predominance in the one-party South, the GOP clearly led the House vote in the rest of the country. Democrats also lost a dozen governorships, including such crucial states as Ohio, Michigan, and Pennsylvania.

Furthermore, Democratic losses were concentrated among pro-New Deal Democrats. Once the dust had settled, the Senate was about evenly divided between pro- and anti-New Deal forces, and the “conservative coalition” of Republicans and conservative Democrats was also solidified in the House, and started any given issue within range of victory. As political scientist David Mayhew has observed, the conservative coalition proceeded to dominate Congress for the next twenty years, until the election of 1958.

Political correspondent Arthur Krock held that “the New Deal has been halted; the Republican party is large enough for effective opposition; the moderate Democrats in Congress can guide legislation.” In addition, “the country is back on a two-party system… and legislative authority has been restored to Congress.” Republican spirits were revived, and the momentum of the New Deal halted.

The result in Congress was not a wholesale reversal of the New Deal but a stalemate in which Roosevelt was unable to make significant new departures, and indeed found himself in a defensive posture vis-à-vis Congress for the first time since assuming office. Congressional investigations began to embarrass the administration; Congress passed the Hatch Act (limiting political activity by federal employees) and Smith Act (cracking down on internal subversion) over FDR’s objections. For his part, Roosevelt offered no major new reform proposals in 1939 for the first time in his presidency.

If it makes sense to consider the 1930 midterm as the leading edge of the New Deal policy era, the midterm elections of 1938 clearly served as the endpoint of that era. Roosevelt was not rejected as Hoover had been—indeed he went on to win the next two presidential elections. But he never again dominated American domestic politics in the same way as before.

Andrew E. Busch is a Professor of Government at Claremont McKenna College and an Adjunct Fellow of the Ashbrook Center.