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Great Depression: American Social Policy

American Social Policy in the Great Depression and World War II

by Jerry D. Marx, Ph.D., University of New Hampshire 

The Economic ContextThe Second Industrial Revolution

America in the 1920s was a prosperous nation. Savings during the decade quadrupled.1 A “housing boom” enabled millions of Americans to own their own home. By 1924, about eleven million families were homeowners. Automobiles, electricity, radio, and mass advertising became increasingly influential in the lives of average Americans. Automobiles, once a luxury for rich Americans, now gave industrial workers and farmers much greater mobility. Electricity put an end to much of the backbreaking work in the American home. Electric refrigerators, irons, stoves, and washing machines eventually became “widespread.2 On the farm, electric tools such as electric saws, pumps, and grinders made farmers more productive. By 1922, radios were common sources of news and entertainment for American families. With improvements in transportation and communication came increases in the mass advertising industry. In addition to all of this, corporations increasingly offered workers fringe benefits and stock-sharing opportunities.3

The Great Depression

Depression: Breadlines:long line of people waiting to be fed: New York City: in the absence of substantial government relief programs during 1932, free food was distributed with private funds in some ; ca. 2/1932
Depression: Breadlines:long line of people waiting to be fed: New York City: in the absence of substantial government relief programs during 1932, free food was distributed with private funds in some ; ca. 2/1932.
Photo: Collection FDR-PHOCO: Franklin D. Roosevelt Library Public Domain Photographs.

The overall prosperity of the United States in the 1920s overshadowed the chronic poverty of certain vulnerable populations. These were the same populations that had always been at risk in American history: children, older Americans, minorities, female-headed families, people with disabilities, and workers with unstable or low-paying jobs. According to James T. Patterson, author of America’s Struggle Against Poverty: 1900-1994, about one-fourth of the population in southern rural areas consisted of poor sharecroppers and tenant farmers.4 Over a third of these small farmers were African Americans. This is what Patterson refers to as the “old poverty.”5 The “new poverty” began with the famous stock market crash of 1929 and the onset of the Great Depression. This is when many middle and upper-income families first experienced poverty in America. These were hard-working people who fully shared the values and ideals of the American dream, people who had enjoyed the strong economy of the 1920s and had bought the homes, refrigerators, and automobiles. The sudden and severe downturn of the American economy left many of these people in shock and denial. Some became suicidal. Between 1929 and 1933, unemployment in the United States jumped from 3.2 percent to 24.9 percent, almost a quarter of the official labor force.6 This represented 12.8 million workers.7 Unemployment in some cities was as high as 80 percent, 8 out of 10 workers.8 During this period, consumer spending declined 18 percent, manufacturing output dropped 54 percent, and construction spending plummeted 78 percent. Eighty percent of production capacity in the automobile industry came to a halt. By 1932, many politicians, businessmen, and journalists started to contemplate the possibility of massive revolution in the United States.9 In fact, thousands of the most desperate unemployed workers began raiding food stores. Reminiscent of the food riots during the breakdown of the feudal system in Europe, this looting became widespread by 1932. Demonstrations by the poor demanding increased relief often resulted in fights with the police. In places like Harlem, the “sit-down strike” became part of the strategy during these relief demonstrations. A Pittsburgh priest named Father James R. Cox attracted 60,000 people to a protest rally; 12,000 of these followers later joined Cox in Washington to protest in front of President Herbert Hoover. When 5,000 war veterans demonstrated in Washington in the spring of 1932, Hoover sent none other than General Douglas MacArthur and Major Dwight Eisenhower to break up the rally. One observer describes the treatment of the veterans:

Shacks, put up by the Bonus Army on the Anacostia flats, Washington, D.C., burning after the battle with the military. The Capitol in the background. 1932.
Shacks, put up by the Bonus Army on the Anacostia flats, Washington, D.C., burning after the battle with the military. The Capitol in the background. 1932.
Photo: National Archives
National Archives Identifier 531102

“The police encircled them. There was some brick throwing. A couple of police retaliated by firing. A man was killed and another seriously wounded….To my right…military units were being formed….A squadron of calvary was in front of this army column. Then, some staff cars, and four trucks with baby tanks on them, stopped near the camp. They let the ramps down and the baby tanks rolled out into the street….The 12th Infantry was in full battle dress. Each had a gas mask and his belt was full of tear gas bombs….They fixed their bayonets and also fixed the gas masks over their faces. At orders, they brought their bayonets at thrust and moved in. The bayonets were used to jab people, to make them move….The entire block was covered by tear gas. Flames were coming up, where the soldiers had set fire to the buildings housing protesters to drive these people out.”10

The Political ResponseFranklin D. Roosevelt and The New Deal
One observer pointed out to Franklin D. Roosevelt (FDR) upon taking office that, given the present crisis, he would be either the worst or greatest president in American history. Roosevelt is said to have responded: “If I fail, I shall be the last one.”11 By the time Franklin Roosevelt was elected in 1932, the traditional ideologies and institutions of the United States were in a state of upheaval.12 Americans who had grown up promoting the ideology of the “deserving and undeserving poor” and the stigma of poor relief were now standing in line for relief. Private nonprofit organizations such as Community Chests, although valiant in their effort, were overwhelmed with requests, unable to meet the needs of their communities. State and local governments, ultimately responsible for their poor throughout American history, now looked for financial assistance. What was needed was an expanded institutional partnership between the federal government and the other sectors of American society in promoting social welfare. In the past, the federal government had been active in other areas such as railroad development and war veteran pensions. However, the American belief, as earlier expressed by President Franklin Pierce to Dorothea Dix, was that the federal government should not be involved in providing poor relief.13 But now the size of this national crisis required a national solution. The federal government was in the best position to initiate and coordinate national efforts among public, private, and nonprofit sectors of society. As the crisis deepened, progressive leaders and average Americans increasingly demanded that the federal government take greater responsibility in relieving and preventing poverty.

One of the more radical policy proposals to address the Great Depression was put forth by Senator Huey Long from Louisiana and a second by Dr. Francis Townsend from California.14 Long (who was later assassinated) proposed a “share the wealth” program where millionaires would be taxed to fund pensions for anyone over 60 years of age. The cost of the program, to be funded by an income tax, was projected to be $3.6 billion, a colossal amount of money at the time. Townsend proposed a special sales tax to pay every American citizen over 60 (except convicted felons) $200 per month. The total cost of the proposal was estimated to be $2.4 billion. About 25 million people signed petitions in support of Townsend’s plan! Consequently, the Roosevelt Administration established a two-tier federal system of insurance and relief programs. But to address the social unrest throughout the nation, he took immediate action to create job opportunities. He did so by establishing several federal agencies and programs.15 One was the Federal Emergency Relief Administration (FERA), which was created by the Federal Emergency Relief Act in 1932.

As its name suggests, FERA was given primary responsibility for managing the effort to distribute federal relief funds to individual states. The relief funds were used to sustain unemployed families during the immediate crisis. The Civilian Works Administration (CWA) was actually part of FERA. This federal program created jobs in public works. These public sector jobs included road repair, the digging of drainage ditches and the maintenance of local parks. The Public Works Administration (PWA), created in 1933, also focused on public works. However, in contrast to the CWA, it focused on complex public works such as dams and airports. Another program started in 1933 was the Civilian Conservation Corps (the CCC, of course!) The target population of this program was unemployed youth. That is, the Civilian Conservation Corps provided jobs for youth in various parks. The U.S. Army was used to supervise the youth. Furthermore, Congress passed the Wagner-Peyser Act in 1933. This legislation provided federal funding to individual states to develop employment offices. Only 23 states had such services before 1933. And finally, though not directly job-related, emergency food programs were set up to prevent starvation. For instance, surplus agricultural goods were distributed to the poor. Also, a relatively small-scale “food stamp” program was established for needy federal workers.

Federal reforms during the FDR Administration also included reforms to stabilize the economic sector.16 These included creation in 1933 of the National Recovery Administration (NRA). This controversial program, which was declared unconstitutional by the Supreme Court in 1935, temporarily threatened capitalist ideology by directly intervening in the “supply and demand” workings of the market. More precisely, this federal initiative sought to stabilize the economy by establishing wage and price agreements to curb the slashing of prices and wages during the depression. To further support product prices, production quotas were established to deter the “dumping” of surplus inventories of products on the consumer market. Similarly, the Agricultural Adjustment Agency was created to curtail farm production in order to maintain higher farm prices (and prevent further bankruptcies in the farm sector). Also established in 1933 was the Federal Deposit Insurance Corporation (signified by the FDIC window sticker at your local bank). A primary responsibility of this entity was to restore public confidence in the banking system. The FDIC worked with participating banks to insure consumer bank deposits against bank insolvency. The federal government also collaborated with banks to address the millions of farms and homes threatened with foreclosure. For example, the federal government directly purchased from banks and refinanced (at a lower interest rate) the mortgages of needy farmers through passage of the Emergency Farm Mortgage Act and the Farm Relief Act. Both were enacted in 1933.

A year later the National Housing Act established the Federal Home Administration (FHA). Through this program the federal government insured home mortgages and home improvement loans, allowing banks to refinance the loans of needy families at lower interest rates. Additional economic reforms included the establishment of the Tennessee Valley Authority (TVA) in 1933 and the Securities and Exchange Commission (SEC) in 1934. The goal of the TVA was to facilitate economic development in that region of the country. To this end, dams and generating plants were constructed, providing inexpensive electric power to the region. The TVA also developed flood-control projects, manufactured and sold fertilizer, and reforested large tracts of land. Regarding the Securities and Exchange Commission, many people felt that rampant speculation in the stock market played a significant role in causing the stock market crash and subsequent depression. Therefore, the Securities and Exchange Commission took on the responsibility of regulating speculation abuses by investors and stockbrokers.

Question for Discussion: Presidents and Disabilities Franklin D. Roosevelt is generally considered to be one of the three greatest presidents in American history, along with Lincoln and Washington. FDR also happened to have a disability, coping with infantile paralysis or “polio” throughout much of his adult life. Because the disease left his legs paralyzed, he could not walk without assistance.17 Yet, during his campaign for president, FDR traveled 13,000 miles by train and made 16 major speeches.18 Throughout his presidency, people were amazed at his energy and optimism. He held office longer than any president in American history, leading the United States through two of its biggest crises in the Twentieth Century, the Great Depression and World War II. Could Roosevelt be elected president today? How would the press cover his disability? How would the voters react to a candidate who could not walk without assistance? This first set of reforms, as previously stated, was an emergency stop-gap measure. From November of 1934 to November of 1936, the Roosevelt Administration implemented a second set of reforms meant to define an ongoing responsibility of the federal government, a responsibility for social welfare similar to that found in European nations.19 The major piece of legislation passed during this period was the Social Security Act of 1935.

This legislation constituted a package of social programs consisting of both insurance and poor relief (later referred to as “public assistance” or “welfare”). With respect to insurance, the act contained both unemployment insurance and old age pensions (commonly known as “Social Security”). Unemployment insurance was very unpopular with business leaders. To illustrate, as late as 1931, Henry Ford persisted in blaming mass unemployment on individual laziness. He claimed there was plenty of work for those who wanted it!20 Yet, packaging unemployment insurance with more popular programs such as old age pensions, Roosevelt was able to pass the legislation. The Social Security Act also contained several federal poor relief programs. Meant to be a continuing federal responsibility, these programs included Old Age Assistance, Aid to the Blind, and Aid to Dependent Children (ADC).21 ADC, as the name suggests, targeted relief to poor children in single parent families. It was not until 1950 that the single parent became officially eligible for assistance also. Note that prior to the New Deal, relief was a tool used by social workers to rehabilitate.22 To get relief, a person had to accept rehabilitation services from a social worker (including a significant dose of moral instruction!) With the New Deal, poor relief became a right of American citizens meeting certain eligibility standards, including of course, financial need. In other words, poor relief became, not a “means” to rehabilitation, but rather, an “end in itself.” The Social Security Act promoted cooperation between the federal government and the states in providing poor relief through the use of “matching funding formulas.”23 That is, for every dollar of state funding expended in the Old Age Assistance, Aid to the Blind, and Aid to Dependent Children programs, the federal government contributed a specified percentage of funding. Yet, the legislation allowed each state to determine eligibility standards and levels of benefits. Also contained in the legislative package were a number of smaller scale health and human service programs.

These included child welfare and maternal health programs in Title V of the act and public health programs in Title VI of the legislation. During this second round of reforms, the Roosevelt Administration continued to confront massive unemployment and labor unrest. Numerous strikes took place throughout the country. To support the rights of union organizers, the Wagner Act was passed in 1936.24 This legislation established the National Labor Relations Board. The board enforced the right of workers to start their own unions. For instance, specific procedures for starting unions were outlined, including voting procedures for choosing a collective bargaining agent. The Roosevelt Administration also implemented major federal initiatives during this “second New Deal” that were later terminated.25 One was the Works Progress Administration (WPA), which replaced the Federal Emergency Relief Administration created at the start of the New Deal. About 85% of program participants were receiving poor relief. Program eligibility was limited to one member of each family. Because this was typically a male, the program was considered by some to be discriminatory. In any case, the WPA employed two million people a month building libraries, schools, hospitals, parks, and sidewalks.26

Eleanor Roosevelt was a strong advocate of a major program located within the WPA called the National Youth Administration.27 A forerunner of modern student financial assistance, this program allowed high school and college students to finish their education by providing part-time public sector jobs. It also established rural camps where youth could learn trade skills. The WPA also funded several projects which put people in the arts to work.28 For example, the New Deal established the Federal Theater Project, which created jobs for actors and playwrights and entertainment for laborers. In addition, a Federal Writers Project and a Federal Art Project were funded. In so doing, writers were put to work preparing items such as tourist guides to American states and cities, while artists painted murals on the walls of public buildings. After 1936, the Roosevelt Administration met greater opposition to its reform agenda from Republicans and conservative Democrats.

There were several reasons for this opposition.29 First of all, the New Deal had not succeeded in ending the depression. The national economic troubles continued despite the broad array of reforms. Secondly, many political and business leaders felt uncomfortable with Roosevelt’s continuing spending deficit. (To fund the New Deal and stimulate economic growth, the Roosevelt Administration spent more than the federal government was actually receiving in tax revenue.) A third reason for the opposition to further reform was the fear of socialism in America. The New Deal with its massive public employment and national poor relief programs was a fundamental change in America’s institutional structure, a change that threatened the ideology of the nation’s conservative leaders. Adding to this fear was the growing power of labor unions across the country. Roosevelt, after all, had supported legislation (Wagner Act) to facilitate this development, despite the opposition of business leaders. All of these developments led to a growing resentment by conservative Republicans and Democrats of Roosevelt’s Administration, the so-called “brain trust.” Hence, the growing opposition to additional social reform. Despite this opposition, the Roosevelt Administration did manage to get the Wagner-Steagall Housing Act passed in 1937.30 This act established the U.S. Housing Authority, which provided low-interest loans to local government for the development of public housing. Another late New Deal success was the Fair Labor Standards Act, passed in 1938. This legislation established minimum wages and maximum work hours. (Remember that both minimum wages and maximum work hours were part of the policy agenda of the earlier Progressive Era.) However, to appease southern interests, the legislation did not cover farm labor.

The Role of Social Work in the New Deal
By the beginning of the Great Depression, social work in the United States had experienced much growth and maturation as a professional discipline. Responding to the criticism that social work was made up of kind-hearted people doing activities that almost anyone could do, Mary Richmond’s 1917 publication, “Social Diagnosis,” provided a “body of knowledge” for professionalization.31 The book emphasized casework techniques that focused on the person in their environment. That is, although Richmond held the sociological perspective that individual problems were rooted in the social environment (unemployment, etc.), her book adopted a medical model process of differential diagnosis of individual cases. Based on this careful collection of client information, treatment would then consist of some combination of individual and environmental change. (It should be noted, however, that Richmond was not a great enthusiast for “wholesale” social reform, preferring instead “retail” interventions.) As the decade of the 1920s progressed, the social work profession increasingly reflected the conservative trend across the nation.32 Times were good; jobs were plentiful. Once again, social problems such as poverty and unemployment were traced to the individual.

Psychiatric social work, led in part by Smith College, became the rage within the profession. In the process, the psychoanalytic work of Sigmund Freud, which became popular nationally, provided social workers with needed theory and individual treatment methods. In the 1920s, society viewed individual dysfunction as a sign, not of immorality so much as, emotional disorder. As John Ehrenreich put it, individual need was not a matter for Saint Peter as much as it was for Saint Sigmund. In any case, the emphasis on casework facilitated the professionalization of social work for numerous reasons.33 Casework was much less threatening to the middle and upper classes than cause-related social work, better known as social reform. In fact, business and professional people were a ready clientele for psychoanalysis. To establish itself as a profession, social work needed the support of these middle and upper-income groups. It needed their fees for service; it needed their sanction. Thus the profession of social work with its growing emphasis on casework fit the social, economic, and political needs of the conservative and prosperous 1920s.

By 1929, there were 25 graduate schools of social work.34 Several professional organizations had been established, including the American Association of Social Workers in 1921. In addition, to further knowledge based in research, several professional journals were developed, including “The Compass,” which was later renamed, “Social Work.” When Franklin Roosevelt took office, he made several social workers prominent figures in his administration. This is despite the fact that the profession as a whole was reluctant to return to a social reform (i.e., “macro”) emphasis.35 Private nonprofit organizations remained the dominant provider of casework by social workers. Yet, during the New Deal, public agencies primarily distributed relief funds to the needy. This is where the action and the jobs were to be found. And, as stated, social workers played major roles in policy development. FDR’s wife, Eleanor Roosevelt, was probably the most influential person in the White House. Although she did not hold a “social work” degree, Eleanor received on-the-job training working in New York settlement houses.36

In fact, her approach to the role of First Lady reflected the settlement philosophy of “research and reform.” Her trips around the nation and the world collecting information for her husband are legendary. She attracted much press coverage and seemed to be everywhere. She was his eyes and ears, his data collector. He knew he could count on her to bring back detailed information concerning public sentiment and social need. All of this “research” was a prerequisite for developing the social policy of the New Deal. Harry Hopkins, a social worker with settlement house experience, was the next most influential person to the President. In fact, it was Eleanor who first observed Hopkins as a passionate, young social worker in New York and referred him to her husband.37 After managing Roosevelt’s relief program in New York, Hopkins was selected to head the Federal Emergency Relief Administration, and later its successor, the Works Progress Administration.38

A third prominent member of the Roosevelt Administration with social work training and settlement house experience was Frances Perkins. Perkins was the first woman appointed to the President’s Cabinet in U.S. history, serving as Secretary of the Department of Labor.39 Early in her career, she worked at two Chicago settlement houses, Hull-House and Chicago Commons.40 In 1909, she attended the New York School of Philanthropy (which would become the Columbia University Graduate School of Social Work) to learn survey research methods. A year later, she received her Master’s Degree in Political Science from Columbia University. Before becoming Labor Secretary, Perkins had headed the Roosevelt’s New York State Industrial Board, a position in which she advocated for safer factory and labor standards.41 Other influential social workers in the Roosevelt Administration included Grace Abbott, Paul Kellogg, Adolph Berle, Henry Morgenthau, Jr., and Eduard Lindemann.42

In addition to these prominent policy development roles, the New Deal created thousands of new “rank-and-file” jobs in social work. In fact, the Federal Emergency Relief Act required that every local public relief administrator hire at least one experienced social worker on their staff.43 This requirement introduced social work ethics and methods into every county and township in America. During the 1930s, the number of employed social workers doubled, from about 30,000 to over 60,000 positions. This job growth created a major shift in social work practice from primarily private agency settings and clinical roles to public agencies and social advocacy. The New Deal also expanded the scope of social work from a primarily urban profession to a nationwide profession practicing in rural areas as well.

Did You Know?

Harry Hopkins, a social worker, was so respected by President Franklin Roosevelt that, before Hopkins’ health started to deteriorate, some believed that Roosevelt was grooming him to be the next President of the United States.44 During World War II, Roosevelt sent Hopkins to be his special representative in talks with both Winston Churchill and Joseph Stalin.

Successes and Failures of the New Deal

The New Deal had many shortcomings.45 As stated earlier, it was World War II that did the most to solve unemployment during the Great Depression. And although the Social Security Act contained some relative small health programs, the New Deal as a whole established no major national health program. Furthermore, to appease southern politicians and get some reform legislation passed, Roosevelt did relatively little to help African Americans.46 Many of these citizens were employed as domestic servants, migrant workers, and farm laborers. New Deal legislation concerning old age pensions, unemployment insurance, and minimum wages did not cover workers in these occupations. Perhaps most regrettable from an ethical standpoint, the New Deal contained no anti-lynching legislation – even though the beating and lynching of black citizens was still a common occurrence in some parts of the nation.

If America as a nation suffered during the Great Depression, African Americans and other minorities suffered worst of all.47 Eleanor Roosevelt was probably the most powerful political ally of African Americans during the Roosevelt Administration. As historian Doris Kearns Goodwin has noted, Franklin Roosevelt thought in terms of what could be done politically, while Eleanor thought in terms of what should be done ethically.48 While inspecting conditions in southern states for her husband, Eleanor discovered discrimination against African Americans in several New Deal programs. For instance, African Americans in southern work relief programs under the WPA received lower wages than their white counterparts. As a result, Eleanor made sure that black leaders received a hearing at the White House, resulting in a 1935 executive order from the President barring discrimination in WPA programs.

In the context of the times, actions such as these showed African Americans that Franklin and Eleanor Roosevelt did care about them. More importantly, this advocacy gave young African Americans a glimpse of the potential power of the federal government regarding civil rights. What ever its shortcomings, the New Deal prevented many Americans, black and white, from starving to death during the Great Depression. While challenging the ideologies of the status quo in the United States, it reformed national institutional structures to meet the massive needs of millions of Americans in poverty. In doing this, the New Deal created a major federal health and human service system in addition to the services of local public and private agencies. The Social Security Board, set up to administer the Social Security Act, later became the United States Department of Health, Education, and Welfare.49 And the Social Security Act became, and still is, the foundation of the American health and human service system.

Personal Profile: Mary McLeod Bethune

Mary McLeod Bethune, the daughter of former slaves, became head of the Division of African-American Affairs within the National Youth Administration in 1936. She used this position to advocate for the needs of African Americans during the Great Depression, directing a more equitable share of New Deal funding to black education and employment.50 Born in 1875 in Mayesville, South Carolina, Bethune received a scholarship to Scotia Seminary for Negro Girls in Concord, North Carolina. She later attended the Moody Bible Institute in Chicago from 1894 to 1895.51 In 1904, she founded the Daytona Educational and Industrial School for Negro Girls in Daytona Beach, Florida, a school that later merged with the Cookman Institute of Jacksonville to become Bethune-Cookman College. An educator, organizer, and policy advocate, Bethune became one of the leading civil rights activists of her era.52 She led a group of African American women to vote after the 1920 ratification of the 19th Amendment to the Constitution (giving women the right to vote). In her position in the National Youth Administration, she became the highest paid African American in the federal government and a leading member of the unofficial “Black Cabinet” of the Roosevelt Administration. She later became the first African American woman to have a monument dedicated to her in Washington, D.C.

Critical Analysis: Business, the Great Depression, and the New Deal

Given the primary role that the private for-profit market plays in American social welfare, the Great Depression represented the greatest failure of the business sector in American history. As a result of the massive economic collapse in the wake of the stock market crash in 1929, the federal government assumed a much larger role in promoting social welfare. This new partnership among U.S. institutional sectors was quickly developed, at times, over the opposition of business leaders. To illustrate, both the U.S. Chamber of Commerce and the National Association of Manufacturers considered the Social Security Act too radical.53 Yet, there was much less opposition to the Social Security Act (with its employer contributions) than expected by the Roosevelt Administration. In fact, some prominent business leaders such as Gerard Swope of General Electric and Marion Folsom of Eastman Kodak publicly supported the legislation. At the same time, many social reformers attacked the Social Security Act and other New Deal legislation for being too moderate, too sexist, and too racist. Were they correct? Should the New Deal have replaced, rather than cautiously reformed, many U.S. institutions? Were Roosevelt and the New Deal too accommodating to the interests of conservative business and political leaders? Did America miss a fundamental opportunity for significant progress in terms of social and economic justice?

Social Policy in Post-War America Economic Context: Automobiles, Suburbs, and Corporate Social Responsibility

The late 1940s and the decade of the 1950s witnessed an increasingly strong U.S. economy. The victory of the United States and its Allies in World War II left the United States economy positioned for world leadership. The economic infrastructures of Europe, Japan, and the Soviet Union had suffered tremendous destruction during the war, while the United States’ economy, boosted by war production, recovered from the Great Depression. As the nation entered the 1950s, the U.S. economy boomed, facilitated by federal government policies, especially in the automobile and housing industries. In fact, there was a large, pent-up demand for most products. General Motors was the world’s largest, richest corporation and would soon pass the billion dollar mark in gross revenues.54 The Interstate Highway Act of 1956 provided billions of dollars for highway construction, thereby fueling the demand for automobiles by a growing population. Millions of Americans saw the opportunity to keep their urban industrial jobs while living in the suburbs. Once again, the federal government (working in partnership with the private banking industry) made possible low-interest home mortgages for these consumers, mortgages guaranteed by federal agencies such as the Veteran’s Administration and the Federal Housing Authority.

In addition, developer William J. Levitt began mass-producing affordable homes for middle-class Americans. While the economy grew, American businesses began to shift their priorities for charitable giving. Experiences of the Great Depression, New Deal, and World War II prompted American businesses to increasingly direct donations to community groups other than the traditional health and human services of the local community chests. The transition was facilitated by a 1953 ruling of the Supreme Court of New Jersey. The ruling legitimized corporate charitable giving, not only in the traditional terms of “direct benefit” to the corporation, but also in terms of the broad social responsibilities of corporations to the nation.55 Previous to this court ruling, corporate charitable gifts could be legally justified to stockholders only if the donation was a direct benefit to employees. For example, a donation by a railroad company to a local YMCA that provided housing for railroad workers was legal. The ruling interpreted “direct benefit” to mean a benefit to the free enterprise system and not solely to the corporation or its employees.

Thus, a legal precedent was established for corporate giving to a wider range of causes, including educational, cultural, and artistic organizations. At the same time, American corporations were becoming more aware of their responsibility to a wide range of community groups.56 Throughout the 1930s, the business sector faced resentful, hostile public opinion as a result of the collapsed economy and widespread suffering. The subsequent New Deal legislation, as previously stated, was perceived by business as an enormous threat to the free market system. In addition to the unprecedented increase in the federal government’s responsibility for national social welfare, the business sector feared future increases in government regulation. Thus, business was presented with the option of acknowledging its broader social welfare responsibilities on a voluntary basis or through increased government regulation. As in the Progressive Era, business leaders responded to the threat of further regulation with a renewed emphasis on management professionalism and corporate social responsibility.57

The idea of business management as the trustee for society at large was increasingly stressed in the business sector. Business management became more responsive to multiple groups in its environment: stockholders, employees, retirees, consumers, government, and local communities. For example, in 1954, General Electric became the first corporation to match employee and retiree contributions to charity with a corporate donation (i.e., “matching gifts”).58 Furthermore, this broad range of stakeholders began efforts to hold corporations more accountable for their policies and social impact (eventually resulting in the “consumer movement” and “ethical investing”).

The Political Context: McCarthy and The Red Scare

Although the federal government worked with the business sector during the l950s to build homes and highways, there was relatively little new social reform passed at the federal level.59 Major New Deal programs such as Social Security survived the conservative political climate of the 1950s thanks to strong support by America’s growing middle class. However, the administrations of Harry Truman (1945-1952) and Dwight Eisenhower (1953-1960) were relatively dormant with respect to major new social reform. The legislation that was passed included the 1946 National School Lunch Program, the 1946 National Mental Health Act (providing grants to states for mental health services), and the 1954 School Milk Program.60 One of the primary reasons for the lack of major new social reform during this period was the national concern about the growth of communism. As indicated earlier, some of the big government programs of the New Deal had been criticized for being communistic.

American labor unions, to varying degrees, were influenced by Communist members. However, now the Soviet Union and China had emerged from World War II as military powers capable of rivaling the U.S. around the world. Events such as the postwar Soviet expansion in Eastern Europe alarmed a U.S. population that had recently witnessed the global aggression of Adolf Hitler.61 At the same time, Communist Parties were gathering strength in countries such as France and Italy.62 Consequently, the spread of communism became the number one voter concern.63 Perhaps even more alarming to U.S. political leaders were government reports that the Soviet Union, in its quest for world domination, was secretly developing atomic weapons and sponsoring espionage activity in the United States. President Truman responded to (and fueled) this “Red Scare” by setting up the Federal Employee Loyalty Program in 1947.64 The program’s goal was to eliminate subversive employees in the U.S. government.

In the same year, the House Un-American Activities Committee (which included a young Congressman named Richard Nixon) began a series of investigations of Communist infiltration of American labor unions, government, academia, and motion picture industry. During these investigations, a senior editor from Time magazine, Whittaker Chambers, admitted to being a former member of the Communist Party and identified a former top U.S. State Department official and Secretary-General of the founding United Nations conference, Alger Hiss, as a Communist doing espionage work for the Soviet Union. The Red Scare became even more frightening in 1949 when President Truman announced that the Soviet Union had detonated an atomic bomb and when Mao Tse-tung declared communist sovereignty over the entire Chinese mainland. Then in 1950, Alger Hiss, was found guilty of perjury in denying that he had committed espionage for the Soviet Union.65 By the time that Senator Joseph McCarthy later that year claimed to have list of Communist working in the U.S. State Department on national policy, the Red Scare had become hysterical.

Implications for the Social Sector and Social Work

This sociopolitical environment generated much public support for a “Cold War” anti-communist foreign policy. Yet, it also turned public support against further social reform.66 The writings of Karl Marx were banned from bookstores. Universities refused to invite “controversial” speakers. Radical militant unions were expelled by the Congress of Industrial Organizations (“CIO”). In the end, this anti-communist sentiment along with a strong economy resulted in relatively little interest in major social legislation by the Truman and Eisenhower Administrations. The conservative trend of the 40s and 50s was, again, reflected in the social work profession. That is, the focus of the social work returned to professional status and to individual treatment (i.e., casework) rather than the social reform of the New Deal era.67 In 1952, the Council on Social Work Education was established providing a standard accrediting body, and three years later, several professional organizations were merged to form the National Association of Social Workers (NASW). Furthermore, during the 1950s, a “psychosocial” orientation to casework evolved, merging techniques from competing schools of thought (“diagnostic” verses “functional”).

Based in part on the writings of Heinz Hartman, Melanie Klein, Paul Federn, and Anna Freud, more attention began to be paid by therapists to ego functions. More attention was also given to use of the client-therapist relationship in the present (as opposed to the recovery of repressed unconscious information) and to issues of separation, through the use of “termination” in therapy. (See the writings of Margaret Mahler, Rene Spitz, and John Bowlby) In addition, foreshadowing the age of “managed health care,” caseworkers began examining techniques associated with brief therapy. Finally, Erik Erikson’s 1950 publication, Childhood and Society, brought increased interest by social workers in psychosocial development across the lifespan. In summary, the emphasis of the 1950s in social work was casework. Then came the 1960s! ContentSelect For more information on related social work topics, use the following search terms: The New Deal Federal Art Project Franklin D. Roosevelt Federal Writers Project Federal Emergency Relief Admin. Fair Labor Standards Act Civilian Works Administration Wagner-Steagall Housing Act Civilian Conservation Corps Mary Richmond Social Security Act of 1935 Sigmund Freud National Labor Relations Board Eleanor Roosevelt Works Progress Administration Harry Hopkins National Youth Administration Frances Perkins Federal Theater Project Mary McLeod Bethune Red Scare

1. Paul Johnson, A History of the American People (New York: HarperPerennial, 1999), p. 718.
2. Robert Caro, The Years of Lyndon Johnson: The Path to Power (New York: Vintage, 1983), pp. 502-504.
3. Bruce S. Jansson, The Reluctant Welfare State: American Social Welfare Policies-Past, Present, and Future, 4th ed. (Belmont, CA: Wadsworth/Thomson Learning, 2001), p. 167.
4. James T. Patterson, America’s Struggle Against Poverty: 1900-1994 (Cambridge, MA: Harvard University Press, 1995), p. 38.
5. Ibid.
6. Michael B. Katz, In the Shadow of the Poorhouse, 10th ed. (New York: BasicBooks, 1996), p. 214.
7. Patterson, p. 42.
8. Katz, p. 214.
9. Ibid., p. 223-224.
10. Ibid., p.224.
11. Paul F. Boller, Jr. Presidential Campaigns (New York: Oxford University Press, 1985), p. 239.
12. Katz, p. 214.
13. James Leiby, A History of Social Welfare and Social Work in the United States (New York: Columbia University Press, 1978), p. 104.
14. Edward D. Berkowitz, America’s Welfare State From Roosevelt to Reagan (Baltimore: Johns Hopkins University Press, 1991), pp. 18-19; Richard Wade, Expanding Resources: 1901-1945, ed. Arthur M. Schlesinger, Jr., The Almanac Of American History (New York: Barnes and Noble, 1993), p. 470.
15. Jansson, pp. 179-184.
16. Ibid., pp. 184-188.
17. Frances Perkins, The Roosevelt I Knew (New York: The Viking Press, 1946), p. 37.
18. Boller, p. 234.
19. Jansson, p. 194, 199.
20. Howard Zinn, A People’s History Of The United States: 1492-Present (New York: HarperPerennial, 1995), p. 378.
21. Jansson, p. 203.
22. John H. Ehrenreich, The Altruistic Imagination: A History Of Social Work And Social Policy In The United States (Ithaca, NY: Cornell University Press, 1985), p. 107.
23. Jansson, pp. 203, 205-207.
24. Ibid., p. 204.
25. Ibid., pp. 194, 207-208.
26. Doris Kearns Goodwin, No Ordinary Time (New York: Touchstone, 1995), p. 87.
27. Jansson, p. 208; Trattner, p. 283.
28. Goodwin, p. 87; Zinn, p. 394.
29. Jansson, p. 209.
30. Ibid., pp. 210-211.
31. Ehrenreich, pp. 64-65; Trattner, pp. 255-262.
32. Ibid.
33. Ehrenreich, pp. 72, 76.
34. Ibid., p. 78.
35. Ibid., p. 103.
36. Goodwin, pp. 96, 365, 381.
37. Ibid., p. 87.
38. Leiby, p. 224, Goodwin, p. 87.
39. George Martin, Madam Secretary Frances Perkins (Boston: Houghton Mifflin, 1976), pp. 3-4.
40. Ibid., pp. 60-63, 72-74.
41. Ibid., p. 205.
42. Ehrenreich, p. 104.
43. Walter I. Trattner, From Poor Law To Welfare State: A History Of Social Welfare In America, 6th ed. (New York: The Free Press, 1999), pp. 285; 296-297.
44. Goodwin, pp. 106-107; 212, 257.
45. Zinn, pp. 393-394.
46. Goodwin, p.163, Trattner, p. 282.
47. Trattner, p. 282.
48. Goodwin, pp. 162-163.
49. Trattner, p.295.
50. Audrey Thomas McClusky & Elaine M. Smith, Mary McLeod Bethune: Building a Better World (Bloomington, Indiana: Indiana University Press, 1999), pp.xii, 4.
51. Sigerman, p. 20; McClusky & Smith, p. 5.
52. McClusky & Smith, pp. 3, 6, 8, 16.
53. Trattner, p. 291.
54. David Halberstam, The Fifties (New York: Villard, 1993), p. 118, 132; Ehrenreich, 1985, pp. 144-145.
55. Eleanor Brilliant, The United Way: Dilemmas of Organized Charity (New York: Columbia, 1990), p. 157; Barry D. Karl, Corporate Philanthropy: Historical Background. In Corporate Philanthropy: Philosophy, Management, Trends, Future, Background (Washington, D.C.: Council on Foundations, 1982), p. 132.
56. Frank E. Andrews, Corporation Giving (New York: Russell Sage, 1952), p. 17; Morrell Heald, The Social Responsibilities of Business: Company and Community, 1900-1960 (New Brunswick, N.J.: Transaction, Inc.,1988), p. 207.
57. Leiby, pp. 170-172; Heald, 1988, p. 207.
58. Billitteri, Thomas J. “ Donors Big and Small Propelled Philanthropy in the 20th Century.” In The Chronicle Of Philanthropy, January 13, 2000. cited 19 July 2000. Available from; Internet.
59. Jansson, p. 229.
60. Trattner, p. 312.
61. Christopher Matthews, Kennedy & Nixon: The Rivalry That Shaped Postwar America (New York: Touchstone, 1997), p. 48.
62. David McCullough, Truman (New York: Touchstone, 1993), p. 544.
63. Matthews, p. 37.
64. Ehrenreich, 1985, p. 140; McCullough, p. 551.
65. Matthews, 1996, pp. 67-68.
66. Ehrenreich, p. 122,140-142.
67. Ibid., pp. 122, 136-137, 188.

How to Cite this Article (APA Format): Marx, J.D. (2011). American social policy in the Great Depression and World War II. Retrieved  [date accessed] from .

7 Replies to “Great Depression: American Social Policy”

    • I am reluctant to try and answer your question because social class is a controversial issue, having many competing definitions models. I recommend you Google the subject and review the various responses. Best wishes, Jack Hansan

  1. […] Great Depression: American Social … – American Social Policy in the Great Depression and World War II. by Jerry D. Marx, Ph.D., University of New Hampshire The Economic Context —The Second … […]

    • There is no easy or quick answer to your question. First of all, helping poor people has historically been a function of organizations on the local, state and federal levels of our society. At the local and state level you will find private and public agencies of all kinds. At the federal level the best resource for you to research is the Social Security Administration. Best wishes, Jack Hansan

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