To What extent was the New Deal Discriminatory Towards Minorities?

History HL

Mr. Stephan

Austin Gergen Candidate 000847-XXX

Word count 3395

10 August, 2016
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Abstract

In an effort to answer the question To What extent was the New Deal Discriminatory

Towards Minorities? an investigation in which the writer sought out information took place.

Many of his source were from books however the majority of them came from databases such as

Google Scholar or the Florida Electronic Library known as Gale. The conclusion the the writer

came to was that the New Deal was discriminatory partially because of the time period, however

because this was a time where great strides could have been taken, and there were specific parts

of policies such as the CCC or NRA that were explicitly racist in order for FDR to pass them

with the often racist Southern Democrats of the time period. FDR made a decision during his

time in office, especially during his first two terms, that passing the New Deal and recovering the

economy as a whole, but more so for the white population was the goal heal was going to

accomplish, and as his only real opportunity that he could have taken was the anti-lynching bills

that were going through congress multiple times during his tenure that he failed to support in

order to keep the Southern Democrats on his side.

WC 204
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Table of contents

Abstract ....i

Table of Contents ....ii

1. Introduction......1

1.1 What was the goal of the New Deal...1

2. Discriminatory programs.1

2.1 Federal Housing Agency....1

2.2 National Industrial Recovery Act..2

2.3 Agricultural Adjustment Administration...3

2.4 Anti-chain Store Act and Retail Price Maintenance Act...4

2.5 Civilian Conservation Corps..5

2.6 Social Security..5

2.7 Wagner Act...7

3. Effects of the New Deal on other policies...

..8

3.1 FDR Blinded..8

3.2 The Roosevelt Recession..9

3.3 The Positive effect of the New Deal .9

4. Conclusion.10

5. Endnotes.11

6. Bibliography..12
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1. Introduction

1.1 What was the goal of the New Deal

The Great Depression was the worst economic condition the United States ever had to

face, and with the failed plans of the republicans the democrats and Franklin Roosevelt had the

opportunity to lead us out of the great depression. Roosevelt and the democrats began to institute

a New Deal in an effort to combat the depression and many of the policies helped lead the US

into a position where it was able to recover during World War II. However some of the policies

instituted were discriminatory and benefited whites before others, and while this was partially

expected due to the era, the New Deal had the opportunity to lead a social change but instead

decided to take a passive role in the advancement of civil rights for African-Americans as well as

other minorities.

2. Discriminatory programs

2.1 Federal Housing Agency

One of the discriminatory programs was the Federal Housing Agency or FHA. The FHA

prevented African-Americans from moving into white neighborhoods in an effort to combat

residential insecurity. There were four different levels of neighborhood,1 red, yellow, blue, and

green. They were ranked fourth third second and first grades respectively. The discrimination is

obvious when you look at the third level and the language says these neighborhoods are lacking

homogeneity2, and in order to be a first level neighborhood you have to be homogeneous. These

levels, however, were not just for outside appearances and appraisal value, they were used to

help lenders decide what rates to give homebuyers if any. The red level, or slum districts3

would often refuse to make loans in these neighborhoods and will only lend on a conservative
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basis. These red neighborhoods were quite frequently, especially in reference to per capita

population, inhabited by African-Americans. The inability to move into a growing or developed

community, especially since African-Americans were late moving into the cities during the

progressive era, prevented many of them from being able to get a good house and a good job to

help pay for it. This, in essence, resulted in the lack of a guarantee for African-American people

to be able to buy houses in white neighborhoods. This clearly shows how this aspect of the New

Deal was discriminatory. A clear, intentional refusal to allow African-Americans to live inside of

predominantly white neighborhoods was a refusal to accept the coming of age of the civil rights

movement, and rather led us into an age where the gap between races got even larger just

because, in order to gain the support of southern democrats, he couldnt be revolutionary in term

of the New Deal or there would have been no deal at all. However there was the option to,

especially since many Americans felt like the republicans failed so miserably between 1929 and

19324, try to win over some of the votes of republicans in congress by throwing in a few deals

for them in order to make progress on a social front rather than try to focus on the economic

front. However in order to keep republicans the enemy and keep the appearance of a united

democratic party he decided to listen to the southern democrats. Another way the FHA was

discriminatory was the fact that it explicitly refused to guarantee the ability to obtain a mortgage

if you were a minority trying to buy a house in a white neighborhood.

2.2 National Industrial Recovery Act

The National Industrial Recovery Act allowed FDR to raise the minimum wage above

their value, which led to a decline in hiring of the people who were unskilled and because many

African-Americans were previously discriminated against in the marketplace they were never

able to develop skills in the first place.5 As a result of the increased wages it was impossible for
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companies to hire these lower skilled workers for what they were actually worth and this led to

the loss of jobs for about 500,000 African-Americans 6 during a time that could have been

extremely beneficial to the civil rights movement FDR instead decided that it was necessary to

hurt big business rather than help the country's minorities. This is evident because he had to go

down to the southern Democrats in order to pass much of his legislation therefore they were

unable to come to agreement about civil rights because the South was such a racist part of the

country due to the continuous animosity towards the African-Americans as many of them were

still upset about slavery and just racist in general. Again this shows FDR succumbing to the

requirements of the southern Democrats. It again shows that he failed to take a stand against

rather than being a proactive leader in a time where these tensions were at a peak. The NRA was

another racist policy that actually ruled unconstitutional due in part to its discriminatory policies.

It offered white people the first crack at jobs7, but not only that the African-American population

had a separate payroll within the NRA. For a man who was able to flip African-Americans from

the party of Lincoln to the party that still had many members in the Ku Klux Klan is

astonishing. Yet despite this, and despite them getting fewer benefits compared to whites, there

was enough animosity towards republicans that they flipped to a seventy-five percent majority in

favor of democrats8. Back to the point of inequality within the systems that should be modeling

for a better nation as it was progressing forward, this was simply another example of FDR failing

to be pro-African-American when he had a perfect opportunity to allow African-Americans to be

treated as equals to white people however again he kept falling to the southern Democrats and

this actually eventually declared unconstitutional partially because of this, however, he was able

to pass a slightly revised version of this which allowed him again constitute racism. It also paid

women less than men. This while not being discriminatory towards a minority was another social
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issue that could have been fixed but yet again rather than take a stand for the social rights of

people he tried to stand up for the economy.

2.3 Agricultural Adjustment Administration

The Agricultural Adjustment Administration resulted in many African-Americans losing

jobs because they were the sharecroppers or tenant farmers and much of the acreage reductions

hit these African-Americans hard as white landlords could make more money by leaving it there

land unfarmed then by paying African-Americans to till the soil as a result of the AAA over

100,000 blacks got laid off between 1933 and 19349. This one wasnt blatant racism as the other

cases that have been mentioned were, however, this one was one of the ones that hurt the most

because of the way that it affected African-Americans. 40% of African-American workers either

sharecroppers or tenant farmers10. Both of these professions took serious job cuts as FDR offered

incentives to farm less and have less livestock. However while this was done with the intention

of raising the value of goods based off of a lower supply, it cost the workers of the land their jobs

while only helping those rich enough to own a farm in the first place, something that very few

African-Americans had an opportunity to do in the 70 short years since slavery was abolished.

Many Mexican Americans were actually deported back to Mexico during this time in order to

increase jobs for Americans and reduce the Mexicans impact on social programs. Over 400,000

Mexican Americans often born within the United States were sent across the United States-

Mexico border through Arizona, California, and Texas. The Mexican population in Texas was

actually reduced by 33% along with Los Angeles which also lost a third of its population of

Mexican Americans.11 The CCC, as well as the WPA, would often not hire these Mexican

Americans because they did not meet the residency requirements of migrants technically and
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they were also not eligible for Social Security nor the benefits of the National Labor Relations

Act.

2.4 Anti-chain Store Act and Retail Price Maintenance Act

FDR banned discounts at stores in 1936 and 1937 with the Anti-Chain Store Act and

Retail price maintenance Act respectively.12 This made it impossible for those who were poorer

to buy what the store wants them to when getting food or other products. This is slightly

comparable to the flat tax many want to institute today in that it is a hurt to the people who it's

ignoring in an effort to help the people who are fighting against it, whether or not thats fair is an

ethical issue however in the case of the New Deal, because so many of the unemployed people

were African-American, (African-American unemployment rate was nearly 50% over double the

white unemployment rate in cities13), it's hurting the people its trying to help. However by in

essence increasing the value of goods without increasing the value of the worker, prices grow

due to inflation and become too much to overcome if you are without a job or have a house job

such as a maid, which made just $5 a week14. This policy was an example of good intentions in

helping people, hurting those that need it the most. People often overlook the poorest of the poor,

those that dont have a job and have to support a family. In an attempt to give the people who

work hard and deserve a break because they actually have a job, they eliminate those who,

especially during this era where being of African descent was much worse in terms of ability to

get a job than in subsequent time periods, are working extremely hard to find a job. This is even

worse when you toss into consideration the fact the great depression is still happening and the

national unemployment rate is still about 20%, as this prevents the people, of any background, to

be able to secure a meal for their family in a time where they need it most. Because the economic
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conditions of blacks were disproportionately worse than those of whites, this race-based quota

system did not adequately address the relief needs of African-American youth15

2.5 Civilian Conservation Corps

Another discriminatory policy enacted by the New Deal was the Civilian Conservation

Corps. Despite people standing up against this, in particular Harold Ickes when he addressed Mr.

Robert Fechner16 in regards to failing to provide me grow supervisory roles there was still no

effort may need to increase the African-Americans in the CCC. Many CCC camps were also

discriminatory for example at Camp Dix attendance was taken in total number as well as calling

number and those who were African-American had AC for colored placed on their documents

officers would show for African-Americans to come out in the rear of the bus and all of the

African-American braided together and waited until after all the white people have been

registered and taken to their quarters. They also got the tents and other supplies that were lower

quality. Their tents had patches on them and they had no lights or floors they also had to sleep in

their clothes because the tents were so cold.17 This all from the perspective of an African-

American who managed to be a part of the just ten percent of the CCC workers who were

African-American (disproportionate based off of the income inequality between the races but

proportionate in terms of population). He did say that while it wasnt so bad there was obvious

discrimination within the camps.

2.6 Social Security

Social Security also hurt African-Americans by failing to provide benefits to the jobs that

the majority of African-Americans had in farming and domestic work. By doing this FDR

created a culture that took those who often had to work the hardest and suffer through the most

damage in terms of how many people kept their job, as over forty percent of African-American
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18
workers were working on farms and they didnt receive benefits . A total of sixty-five percent of

African-Americans were unable to take advantage of the benefits of Social Security due to the

need of votes from southern democrats by FDR19. This rate is over two hundred forty percent the

rate of white people twenty-seven percent) who had jobs that were not rewarded with the

benefits20. This is a case where he in order to cut the cost of his new policy decided that African-

Americans were not worth as much as white workers minorities other than African-Americans

were actually treated slightly worse (by one percent) in terms of the percentage who received the

benefits of the new policy. This also hurt African-Americans because even when they had jobs

that should have got them enrolled into the system because many were paid off the books they

were not paying the FICA tax, the tax required to receive the benefits, they were therefore not

able to get the benefits.

2.7 Wagner Act

The Wagner Act of 1935 was also indirectly discriminatory towards the minority

community. By creating unions those with jobs are able to negotiate higher wages, however

when these wages are higher the employers have to cut down on the number of new employees,

and because the African-American community was often last hired first fired they were not a

part of these unions when they began which forced them to have to fight harder for jobs that

were already discriminatory in the first place so it made it near impossible to join a company

after it had a union. The Wagner Act made this worse by allowing the unions to monopolize, and

as many of the more popular unions were often racist and would further protect the interests of

not those who had jobs but those who were white and had jobs and were members of the unions

so even those that were employed as minorities did not have the same force fighting for them

when it came to unions. The Wagner Act was originally written to prevent this however in order
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to get it passed, and due to the lobbying efforts of the larger unions, these provisions were

removed21. This is an example of a time when the intentions were initially good and the

consequences were thought through, however, in an effort to actually pass the law, compromises

had to be made and unfortunately for African-Americans they were the first thing that had to

leave in order for the law to pass.

3. Effects of the New Deal on other Programs

3.1 FDR focused on economics

The New Deal caused FDR to not look towards the socio-cultural gap but rather he

attempted to, and focused, almost solely, on repairing the economy. This is extremely evident

and said almost explicitly when Roosevelt says The Southerners by reason of the seniority rule

in Congress are chairmen or occupy strategic places in most of the Senate and House

committees,. FDR was so focused on passing his New Deal that in 1938 he said that he

couldnt support an anti-lynching bill because it would cause congress to block every bill he

supported thereafter. He just couldnt take that risk as a politician supporting his own agenda.22

FDR has time and again shown that his agenda is more important than the rights of people.

Despite pressure from Northern Democrats and most Republicans, along with his wife,

Roosevelt, failed to back an anti-lynching law again in 1938 because it had the potential to

interfere with his plan for the nation. Even despite an overwhelming majority of people (seventy

percent in the nation sixty-five percent in the south) he still failed to take advantage of that

opportunity out of a fear of upsetting the southern senators.

3.2 The Roosevelt Recession

The worst part about this is that despite all the effort put into the New Deal there was

another recession in the middle of Roosevelt's second term that was extremely detrimental to the
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African-American community along with most other americans and unexpectedly this was

partially caused by the increase in manufacturing costs due to the 1935 National Labor Relations

Act, along with this the other main contributing factors were a tightening of the credit policy by

the federal reserve, along with new federal taxes. Two of these had to go through FDR and while

this was not intentionally discriminatory nor solely the fault of Roosevelt, there is some blame to

be made, and this was expected to a degree, but not to the extent that it happened. Stock prices

fell by over half profits declined by over seventy-five percent. Economists today are still

confused to an extent as to why it was as bad as it was. Another reason this recession occurred

was because of the faulty foundation on which the upshift had been caused. The bump was

mainly due to the influx of new money into the economy through a series of one and done

stimuli. However some of these stimuli were actually vetoed by FDR, the payment of

$1,700,000,000 to the World War I soldiers that congress overrode the veto on23. This recession

while not intentionally discriminatory hurt blacks harder than whites because they again were

stuck at the bottom of the barrel and when that figurative barrel full of white people who were

perceived as more intelligent and harder working despite a lack of qualifications, the African-

American man and woman would be stuck again in a period of wait while the economy slowly

recovered and once again left them behind and prevented them from grabbing onto the first step

of becoming qualified. This recession remained at a slow recovery too until the United States

began to aide in the war and begin manufacturing at a greater level.

3.3 Positive Effects of Unions

FDR was a huge supporter of unions while he was in office as discussed in Section 2.7. It

is hard, however, to discuss the effects of unions within an economy because there are so many

variables. There is however a noticeable change in the pay of workers when during his tenure as
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president. In fact there was a sixty percent increase in pay, as union members increased, in just

three years, starting at twenty-five cents per hour raising up to thirty cents per hour in 1940 up to

40 cents per hour by the end of 1941.24 This sixty percent increase is equated with only a one

percent inflation in each of those two years. This is an incredible increase for buying power of

individuals and is the best example of success as a result of the policies of the New Deal,

however it is important to acknowledge that a part of this bump was due to the US involvement

in WWII. This is important because it shows that the New deal wasnt the only thing contributing

to success within the economic sector of the United States.

4. Conclusion

Unfortunately, the policies enacted by the New Deal were discriminatory. And whether it

be both minorities as well as whites receiving benefits but to different extents, or the Minorities

being punished more by the mistakes that the country made during this time, there was a clear

separation between minorities and whites. These discrepancies, however, were not to the fault of

no one, there were many opportunities for both congress and the Roosevelt administration to

effectively promote civil rights. Roosevelt placed his plan, for better or worse, above the rights

of the people, and even occasionally going against the public opinion, specifically in reference to

anti-lynching laws, in order to pass his agenda. Only after the era of the New Deal had taken

place and he had accomplished all of his goals in reference to it that were deemed constitutional,

did he begin to reform the aspects of the New Deal that were discriminatory. Fortunately for the

minority community and the future of the country, his lack of a proactive stance just delayed the

coming of civil rights for minorities rather than halting or even reversing the outcome. In

essence, while not all of the discrimination was preventable there were still far too many cases
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where it took hold and ended up causing more hurt than help to those who needed that help the

most.
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Endnotes
1
UH - Digital History." UH - Digital History. 2016. Accessed July 7, 2016.

http://www.digitalhistory.uh.edu/.
2
Ibid
3
Ibid
4
Ibid
5
Ibid
6
Powell, Jim. "How FDR's New Deal Harmed Millions of Poor People." Cato Institute.

December 29, 2003. Accessed August 11, 2016.

http://www.cato.org/publications/commentary/how-fdrs-new-deal-harmed-millions-poor

people.
7
Ibid
8
Ibid
9
Ibid
10
Ibid
11
"New Deal Network: The Great Depression, the 1930s, and the Roosevelt Administration."

New Deal Network: The Great Depression, the 1930s, and the Roosevelt Administration.

Accessed August 11, 2016. http://newdeal.feri.org/.

12
Ibid
13
Ibid
14
Ibid
15
Ibid
 Gergen 15
16
Ibid
17
Digital History
18
Ibid
19
Ibid
20
Ibid
21
Ibid
22
Ibid
23
Ibid
24
Irving Bernstein
 Gergen 16

Bibliography

Bernstein, By Irving. "U.S. Department of Labor -- History -- Americans in Depression and

War." U.S. Department of Labor -- History -- Americans in Depression and War.

Accessed September 18, 2016.

https://www.dol.gov/oasam/programs/history/chapter5.htm.

Bernstein, David E., Neal Devins, and Mark A. Graber. Only One Place of Redress: African

Americans, Labor Regulations, and the Courts from Reconstruction to the New Deal.

Durham: Duke University Press, 2000.

Hiltzik, Michael A. The New Deal: A Modern History. New York: Free Press, 2011.

"New Deal Network: The Great Depression, the 1930s, and the Roosevelt Administration." New

Deal Network: The Great Depression, the 1930s, and the Roosevelt Administration.

Accessed August 11, 2016. http://newdeal.feri.org/.

Powell, Jim. "How FDR's New Deal Harmed Millions of Poor People." Cato Institute.

December 29, 2003. Accessed August 11, 2016.

http://www.cato.org/publications/commentary/how-fdrs-new-deal-harmed-millions-poor

people.

Powell, Jim. "Why Did FDR's New Deal Harm Blacks?" Cato Institute. December 03, 2003.

Accessed August 11, 2016.

http://www.cato.org/publications/commentary/why-did-fdrs-new-deal-harm-blacks.

UH - Digital History." UH - Digital History. 2016. Accessed July 7, 2016.

http://www.digitalhistory.uh.edu/.
Gergen 17