New Deal

Written By Douglas Carl Abrams

Federal programs to fight the Great Depression brought almost $440 million by 1938 to North Carolina. Conservative Democrats who had fought the reforms in the state, nonetheless, eagerly accepted the largesse from Washington, D.C. The most important New Deal program in the state was the Agricultural Adjustment Administration (AAA), which essentially paid farmers a modest amount to grow less tobacco, the state’s largest crop, as well as controlling other crops. Consequently, tobacco prices and farm income rose. Overall, the tobacco control program was one of the most successful in the South and in the nation for the AAA. Cotton, due to competition overseas and from synthetics, did not perform as well. Tar Heel farmers embraced crop controls, not out of enthusiasm for big government, but in their self-interest, for the AAA’s regulation had improved prices. Furthermore, the government let farmers vote for controls through referenda.

New Deal agricultural success, however, came with a price. Reduced production meant that fewer tenant farmers and sharecroppers were needed; their ironic displacement by the AAA increased the economic problems of the 1930s. Driven from their land, farmers moved to cities, and there many survived on government relief. African Americans, a large number of sharecroppers, were especially vulnerable to displacement.  The benefits for crop controls disproportionately benefited landowners over tenants.     

The National Recovery Administration (NRA), Roosevelt’s agency for reviving business and industry, had a significant impact as well on North Carolina. Like the AAA, the NRA attracted support because it offered short-term economic benefits, but problems eventually generated opposition in the state. North Carolina, the most industrialized southern state at that time, needed assistance during the 1930s. Overproduction and competition meant low prices for textile products; therefore, textile executives eagerly formalized in NRA codes some trade association practices in place since the 1920s.  These practices had brought some discipline to the industry, in areas like wages and production. Initially with NRA regulation, profits and wages rose.  After a couple of years, enthusiasm waned, as economic lifestyles declined and businessmen realized the NRA meant bureaucratic red tape and higher wages and unions—or at least the threat of unions. Tobacco companies, doing well in the 1930s, needed little help and only agreed to an NRA code shortly before the Supreme Court in 1935 declared the NRA unconstitutional.    

North Carolina ranked low in per capita in the receipt of relief funds from Washington, D.C. Farmers and businessmen considered relief a threat to cheap labor. Governors Ehringhaus and Hoey balked at providing state matching funds for relief. Fearful of excessive spending, Ehringhaus delayed approximately two years before calling a special session of the legislature to comply with Social Security. Eventually, participation with some of the Social Security programs transformed the state welfare department into a major agency. New Deal public works projects left an impressive record of physical improvements.

The New Deal in the state had an ironic effect on African Americans. They were a higher percentage of the poor; therefore, they benefited from relief, but federal assistance was inadequate. Other federal programs affected them adversely. With higher wages from the NRA, whites often displaced them in the workplace, and crop controls reduced the need for sharecroppers, driving many from the farms. New Deal goals were economic; civil rights were not a priority for white liberals in the state or in the White House.     The New Deal affected women, too. A significant portion of textile workers, women gained from NRA wage increases. They participated in relief programs like the Works Progress Administration (WPA) sewing rooms and, like others in the 1930s, complained about discrimination, low wages, and cuts in programs. Two Tar Heel women held prominent positions in the New Deal era: Annie Land O’Berry, a social service professional, headed major relief bureaucracies in competent fashion, and Annie Kizer Bost, state welfare director, enhanced her agency by handling some Social Security programs.   

As election results proved, the New Deal received broad support in the state. North Carolinians credited Roosevelt for economic recovery and reform measures and sometimes blamed local and state bureaucrats for problems. Sharecroppers complained that the AAA mishandled government payments, and small landowners argued that production controls particularly hurt them. Large landowners supported the AAA more enthusiastically. The Civilian Conservation Corps (CCC), which provided employment to young men, enjoyed the greatest public support in the state.   

The state’s congressional delegation played key roles in the creation of New Deal legislation. Typical for the solidly Democratic South, the Tar Heel congressmen supported Roosevelt strongly, at least until 1937.  Although most of these men were conservative, party loyalty, situational urgency, patronage concerns, and electoral pressure compelled them to advocate New Deal programs.  Congressmen John H. Kerr, Lindsay Warren, Harold D. Cooley, and Frank Hancock, all from tobacco-growing districts, played key roles in developing tobacco-control legislation. Robert L. Doughton served as chair of the House Ways and Means Committee during the New Deal era and consistently pushed critical legislation, such as the NRA, Social Security, and revenue bills, through the House. Party loyalty, fondness for Roosevelt, and patronage, not ideology, generally motivated Doughton.  He was the state’s most important New Deal supporter in Congress.    

Although he selectively opposed reform legislation, United States Senator Josiah W. Bailey emerged as the most important anti-New Deal member of the congressional delegation. In 1933, he voted against AAA legislation, and after voting for the NRA; he attacked it beginning in 1934.  By 1937, he had become a prominent opponent of Roosevelt nationally. The recession of the late 1930s, and the president’s attempt to “pack the court,” fueled his attacks. In December 1937, he and other conservative senators, Democratic and Republican, issued the “Conservative Manifesto,” a pro-business and anti-New Deal document. Bailey’s political skill enabled him to remain a force in a state, where Roosevelt enjoyed enormous popularity; the Senator managed to oppose the New Deal but also support it and the president when necessary.    

In the late 1930s, others in the North Carolina congressional delegation joined Bailey in opposing the New Deal. Graham Barden on the House Labor Committee and J. Bayard Clark on the House Rules Committee fought wage and hour legislation, which he and others in the state believed threatened low-wage southern industry. Three House members in the state’s delegation voted against the 1938 Fair Labor Standards Act and three abstained.

While conservatives gradually increased their resistance to the New Deal, the popularity of Roosevelt and his programs in the state forced them to accommodate certain New Deal programs, if for no other reason than to ensure that federal money made its way to the Tar Heel state. But in the end, dependence on state and local governments, often controlled by pro-business conservatives, limited the impact of the New Deal in the state. In per capita allocation of New Deal expenditures from 1933 to 1939, North Carolina ranked last in the country. North Carolina, a rural state, did not have a significant urban base to press for more vigorous support for the New Deal, and liberal candidates offered little alternative than just opposition to the sales tax or the conservatives. Roosevelt’s reforms, however, mobilized forces that energized liberals in the post-World War II era. Tar Heel workers, farmers, and African Americans aided by government programs soon empowered the liberal wing of the state Democratic Party.  

By 1940, the combination of the financial stimulus from the New Deal and the pro-business policies of the governors produced a relatively strong economy. Those seeking work or on work relief had dropped to 8.8 percent, best in the nation. While nine southern states had declined industrially, North Carolina remained in first place in the region. State government ended the decade with an $8 million surplus.

Annie Land O’Berry headed major relief bureaucracies in the Tar Heel state during the Great Depression. Image courtesy of the North Carolina Office of Archives and History, Raleigh, NC.