How did New Deal legislation affect the relationship between federal and state governments?
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journal article Show The American Historical Review Vol. 73, No. 1 (Oct., 1967) , pp. 70-84 (15 pages) Published By: Oxford University Press https://doi.org/10.2307/1849029 https://www.jstor.org/stable/1849029 Read and download Log in through your school or library Alternate access options For independent researchers Read Online Read 100 articles/month free Subscribe to JPASS Unlimited reading + 10 downloads Purchase article $39.00 - Download now and later Read Online (Free) relies on page scans, which are not currently available to screen readers. To access this article, please contact JSTOR User Support. We'll provide a PDF copy for your screen reader.With a personal account, you can read up to 100 articles each month for free. Get StartedAlready have an account? Log in Monthly Plan
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Journal Information The American Historical Review (AHR) is the official publication of the American Historical Association (AHA). The AHA was founded in 1884 and chartered by Congress in 1889 to serve the interests of the entire discipline of history. Aligning with the AHA’s mission, the AHR has been the journal of record for the historical profession in the United States since 1895—the only journal that brings together scholarship from every major field of historical study. The AHR is unparalleled in its efforts to choose articles that are new in content and interpretation and that make a contribution to historical knowledge. The journal also publishes approximately one thousand book reviews per year, surveying and reporting the most important contemporary historical scholarship in the discipline. Publisher Information Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide. OUP is the world's largest university press with the widest global presence. It currently publishes more than 6,000 new publications a year, has offices in around fifty countries, and employs more than 5,500 people worldwide. It has become familiar to millions through a diverse publishing program that includes scholarly works in all academic disciplines, bibles, music, school and college textbooks, business books, dictionaries and reference books, and academic journals. Rights & Usage This item is part of a JSTOR Collection. Until the twentieth century the average American in peacetime had little contact with the federal government, except for the post office, and the federal government’s policies and actions affected most people only indirectly—for example, through land-disposition policies or the tariff’s effect on commodity prices. State and local governments provided nearly all the government services the citizens needed, wanted, or merely endured: definition and enforcement of private property rights; construction and maintenance of roads, streets, sewers, water-supply systems, bridges, canals, and most other economic infrastructure; provision of most schools and some universities; regulation of many economic activities and much personal behavior; and so forth. In the late-nineteenth and early-twentieth centuries, governments at all levels never spent more than 9 percent of gross national product (GNP) during peacetime. Of the total, local governments spent the biggest share, the federal government somewhat less, and state governments less still. In 1927, for example, local governments accounted for 56.7 percent, the federal government 30.4 percent, and state governments 12.9 percent. Employment figures mirrored the spending breakdowns. In 1929 state and local governments combined employed 2.6 million persons, more than a million of them in education, whereas the federal government employed only 981,000 persons, including 267,000 in the military and many of the others as postal workers. (At that time, the total U.S. labor force numbered roughly 48 million.) With the onset on the Great Depression and the advent of the New Deal, the structure of government underwent drastic change. People who know anything at all about these years understand that government became both larger and more centralized, yet few appreciate exactly how and why the overall structure of government changed or what consequences flowed from this change. (See "What Caused the Great Depression?") In mid-1929 the economy began to contract, and as the contraction continued, business failures and unemployment increased, and relief rolls lengthened. Cities and counties, which had traditionally borne the responsibility for public relief of the destitute, faced increasing demands for relief spending. At the same time, however, their revenues were shrinking, as property values fell and hence property-tax receipts, the major source of local government funds, fell along with them. In addition, tax delinquencies increased, and borrowing became more difficult. More and more cities and counties found themselves in a fiscal squeeze. States provided some assistance, but they faced similar difficulties as their own property-tax and other receipts dropped. Three states—Arkansas, Louisiana, and South Carolina—defaulted on their debts, and by the end of 1933, approximately 1,300 local governments also had defaulted and many other state and local governments verged on default. Everyone looked increasingly to the federal government to save the day, and even before Franklin D. Roosevelt’s election, Congress began to respond. In July 1932 the Emergency Relief and Construction Act was passed, providing $300 million to be lent to the states (and thence to cities and counties) for relief. Everybody understood that these loans probably would never be repaid, and eventually they were indeed written off. This statute constituted, as it were, the first big leak in the federal relief dam. After Roosevelt took office in March 1933 the dam burst. When it did, the federal government’s expenditures increased rapidly relative to those of the state and local governments. In 1932 the shares of the federal, state, and local governments in total government spending (net of intergovernmental grants and receipts) were 32.4, 16.3, and 51.3 percent, respectively; in 1934, they were 38.8, 16.7, and 44.5 percent; and in 1940, they were 45, 17.4, and 37.6 percent. Notice that the state share did not fall; indeed, it rose slightly. The big shift came because the federal proportion and the local proportion traded places. Once this shift had occurred abruptly in the 1930s, the shares did not change much afterward; in 1990 they were 56.2, 17.9, and 25.9 percent. Thus although the depression that had provoked the shift ended in the 1940s, the status quo ante was never restored. These developments did not mean that the local governments spent much less in absolute terms after 1932; in fact, they reduced their spending only slightly in the mid-1930s and then increased it in the latter years of the decade; by 1940 they were spending about 21 percent more than they had in 1932. State governments increased their spending much faster, by 84 percent between 1932 and 1940. Tax revenues did not move in tandem with these spending changes because from 1932 on, the federal government was making greatly increased grants to the lower levels of government. By 1940 almost a third of all state spending was funded by federal grants. Between 1932 and 1940, not counting intergovernmental grants, local revenues increased by only 8 percent, state revenues by 120 percent; and federal revenues, excluding borrowed funds, by 166 percent. Eager for the MoneyThe foregoing figures might tempt us to conclude that the federal government simply overwhelmed the other levels of government during the New Deal era, but the image of the feds riding into Dodge City like the James gang and taking over the town (and Kansas, too) is not true to the facts. Recall first that the state and local politicians were literally begging for federal bailouts in the early 1930s; the money was scarcely forced down their throats. Second, in some states, such as Michigan, Pennsylvania, and New York, state politicians embraced the same ideology and political objectives as the dominant faction in Congress, and they proceeded to enact so-called Little New Deals that implemented state-level reforms, especially union-friendly labor laws and anti-business tax laws, similar to those the New Dealers enacted nationally. Twenty-four states adopted general sales taxes in the 1930s, 20 of them during the period 1933–35. Third, many of the programs the federal government was establishing for relief and other purposes were not only financed with matching grants (in varying proportions), but also administered “cooperatively,” that is, in large part by state or local employees, especially at the lower levels. Owing to this style of administration, state and local politicians gained considerable control over the newly created patronage jobs, and in some cases they could also shape the local rules or select the particular projects to be undertaken. In short, the lower-level politicos were definitely cut in on the deals. Dependent on GovernmentThe political profits the politicians reaped at every level do not signify, however, that other people gained, especially in the long run. Of course, each recipient of a welfare handout or a make-work job viewed the largess as beneficial at the moment it was received. For many, however, that “first drink” was indeed the road to hell because they became dependent on government support and therefore increasingly incapable of supporting themselves or rearing their children to become self-supporting—ultimately an unfortunate outcome for everyone concerned. In addition, the welter of relief, subsidy, bailout, and other programs that the New Dealers brought forth in constantly changing configurations, in the hope (very successfully realized, especially in 1936) of buying votes, also contributed to the creation of uncertainties about the future security of private property rights, which impeded economic recovery—another unfortunate outcome for nearly everybody. How did the new deal affect the relationships between the states and the federal government?1 Answer. The New Deal changed the relationship between citizens and the government because it enacted laws that made the government more involved in the lives of citizens, such as in social security and government financial aid.
How did the new deal affect the relationship between the states and the federal government quizlet?How did the new Deal impact the federal government? It expanded the powers of the federal gov't by establishing regulatory bodies & laying the foundation of a social welfare system. In the future the gov't would regulate business & provide social welfare programs to avoid social & economic problems.
How did the New Deal change the role of the federal government?The New Deal created a broad range of federal government programs that sought to offer economic relief to the suffering, regulate private industry, and grow the economy.
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