A period of slowdown in an economy, less severe than an economic depression. A depression was avoided, at least in part, thanks to the passage of important federal legislation under the First and Second New Deals.
In the November mid-term elections, the Democrats lost: 7 seats in the Senate, 72 seats in the House of Representatives. Despite this – FDR still held a very strong majority
Dec 1936 – auto-workers occupied the factory owned by the Cleveland Fisher company in Flint, Michigan this went on for a month. 1936 – 2,000 strikes (involving 788,000 workers). 1937 – 4,470 strikes (involving 1.9m workers)
1937 – FDR ordered substantial cuts in federal government spending. Simultaneously, the Federal Reserve Board began limiting the physical supply of money – due to a fear of inflation. Consequently the US economy was hit with a recession (nicknamed the Roosevelt Recession). October 1937 – stock market crashed, with 17m shares offloaded. Manufacturing employment fell by 23%. GNP fell by 13%. Work relief offered by the WPA grew by 500%
They blamed the New Deal and FDR for increasing strike action, and for undermining American business culture. Acts such as the Wagner Act and Social Security were causing them problems
Limited – the American Liberty League was almost redundant during this time. They largely voted against FDR in the 1936 election - whilst the Republican candidate lost, he still garnered 16m votes suggesting lots opposed the New Deal.
The US Supreme Court remained a major obstacle to FDR. They continued to challenge his legislation, and make it difficult for the New Deal to have any long term impact.
Official legal title: Judicial Procedures Reform Bill. What it wanted to to do: Force Supreme Court Justices to retire at 70, Increase the number of Justices from 9 to 15
Retire at 70 would've forced 6 current Justices to retire (FDR would get to pick their replacements). Increase from 9 to 15 FDR would've also gotten to pick these Justices. This would have given FDR a minimum of a 12 Justice majority – immense power for FDR
There was huge criticism of FDR and his popularity suffered. The Senate rejected the plan 70 votes to 20 (lots of FDR's own party voted against it). Despite the law failing – the US Supreme Court backed down to FDR. They began to allow more progressive legislation (e.g. allowing the Wanger Act 1935 to stay)