South Carolina and the New Deal

Published by EH.NET (January 2004)

Jack Irby Hayes, Jr., South Carolina and the New Deal. Columbia, SC: University of South Carolina Press, 2001. xvi + 290 pp. $34.95 (hardcover), ISBN: 1-57003-399-4.

Reviewed for EH.NET by Jim Couch, Department of Economics, University of North Alabama.

Jack Irby Hayes begins his book by describing the setting: in the 1930s South Carolina was a state in which slightly more than half of the population were African-American; more than half were Baptists; and approximately half were engaged in agriculture — which for all practical purposes meant the production of cotton. And South Carolina plantation owners at the time had a tremendous advocate in Senator Ed Smith, better known as “Cotton Ed” Smith. South Carolina’s other senator, James F. Byrnes, Hayes asserts, “emerged as the most influential senator from South Carolina — and quite possibly from the entire South — since John C. Calhoun” (p. 18). Both these individuals would play a large role in the implementation of Franklin Roosevelt’s New Deal.

After describing other members of South Carolina’s congressional delegation, Hayes focuses on the actual programs of the New Deal, how the various agencies were staffed, how they operated, and how each program impacted South Carolina. He criticizes the relief programs of the Hoover administration as unfair and too conservative. In particular, he asserts that local control meant an inequitable allocation of aid to “the unemployed middle class” in an effort to “not upset the existing class structure,” and that “obviously, it was time for the federal government to intervene in the interest of fairness and sufficiency for all” (p. 38).

Strangely, he then goes on to report egregious instances of corruption in the implementation of the new federal programs. The book provides additional evidence, albeit from a single state, to support the growing consensus among economists that the New Deal was little more than a gigantic vote-buying scheme. Politics, unfortunately, served as the impetus for much of the actions of the various agencies created by Roosevelt.

One anecdote tells how a particular congressman was punished for his rather prescient views. John J. McSwain represented South Carolina’s Fourth Congressional District where the cities of Spartanburg and Greenville are located. McSwain believed that air power represented the future of military combat and argued for a separate branch of the arm forces — an Army Air Corp – and wanted the number of planes expanded from 1800 to 4400. Furthermore, McSwain predicted that America would eventually be attacked from the air. Military officials dismissed his ideas and relations between the representative and members of Roosevelt’s cabinet grew ever more acrimonious. When Greenville applied for Public Works Administration funding for a post office, a swimming pool, an airport and a stadium, all the projects were delayed in an effort to send McSwain a message.

Support for FDR waned as the administration pushed for the so-called second New Deal. Hayes contends that the residents of South Carolina were less than excited about Roosevelt’s “attempts to advance African-Americans” (p. 156). He explains that the average South Carolinian “had in mind a fine tuning of a state and national economy already on the road to recovery, not the revolution in separation of powers, race relations, and industrial relations that followed” and began to “distrust at least a part of the New Deal as too Northern, too radical and too minority oriented” (p. 148).

Indeed, Hayes repeatedly asserts that Roosevelt’s unprecedented care for African-Americans created tension between the administration and South Carolina’s congressional delegation. However, in one of his most interesting chapters, “A New Deal for African Americans,” Hayes documents how many of these programs adversely affected blacks. A revolution of how blacks were treated simply did not occur. Hayes claims that the New Deal did offer some benefit to minorities: “for many blacks … the New Deal completed what historians call ‘psychological emancipation'” (p. 168). It is difficult to imagine that southern politicians were overly concerned about something as nebulous as psychological emancipation.

Hayes’ assertion that support for the administration fell off in FDR’s second term is certainly valid but his claim that racism was the cause ignores significant evidence to the contrary. The book completely ignores the work of the Senate Special Committee to Investigate Unemployment and Relief chaired by South Carolina Senator James Byrnes (in fact, the committee became known as the Byrnes Committee). The Committee was created in part to investigate the activities of the Works Progress Administration (WPA). Harry Hopkins, the Director of the WPA, was asked to explain why certain regions of the nation received larger appropriations than other sections. Hopkins was far less than forthcoming which led the New York Times to write (December 29, 1938): “The allocation of WPA funds cannot indefinitely be permitted to rest upon the personal discretion of any one man or small group of men. The relief funds belong to the whole country. Their allotment must be placed upon a basis that the whole country understands clearly and accepts as fair.”

Hayes criticizes Byrnes for attempting to alter WPA legislation by adding a uniform match of 25 percent (Hayes incorrectly reports a 50 percent matching requirement by Byrnes) so that every state and locality would face the same requirement. The author claims that “Byrnes was miffed by an earlier presidential promise to request no more than $1 billion” (p. 28) rather than the requested $1.5 billion. In reality, Byrnes, like other southern senators, had become cognizant of the fact that WPA matching requirements varied considerably from state to state. For example, Tennessee, a relatively poor state, contributed 33.2 percent of total WPA expenditures while the relatively rich state Pennsylvania contributed only 10.1 percent. South Carolina’s match was 20.8 percent. Georgia Senator Richard Russell bitterly complained: “the poorer states — discriminated against as they are in the matter of per capita expenditure, in monthly wage, and in hourly wage — are, in addition, required to contribute more from their poverty toward sponsored projects than the wealthier States are” (U.S. House of Representatives 1939: 210). The Byrnes proposal would have created a level playing field so that all states would be treated impartially. By rejecting a uniform match, the creation of WPA jobs were at FDR’s discretion and, as economists have shown, he used his discretion for political advantage sending more jobs and dollars to states he needed in the next election.

Hayes contends that Roosevelt went to work against the Byrnes proposal to save the program. “Realizing the Byrnes proposal would cripple the WPA, Roosevelt and Harry Hopkins … began to marshal the opposition” (p. 29). How the proposal would have crippled the WPA is not made clear in the book.

Likewise, Hayes points out that Byrnes was annoyed with the allocation of WPA largesse. Rather than portraying Byrnes as a representative fighting to make sure his constituents received an equitable slice of New Deal dollars, the author asserts, “Apparently, Southern nationalism emanating from the Confederate War was never far below the surface in the senator’s personality” (p. 29). Hayes is even more critical of South Carolina’s other senator: “Apparently paranoid in his advancing years, he claimed to have ‘uncovered’ nothing less than a conspiracy against the South and Southern Democracy” (p. 35). Hayes applauds the people of South Carolina and their representatives when they support the New Deal and castigates them when they begin to oppose it. The New Deal, he asserts, was too far reaching in its advancement of blacks and this caused their apostasy; not the fact that South Carolina received meager benefits while other, more politically valuable states, received the lion’s share.

His analysis of what the New Deal accomplished is equally shallow. Hayes asserts that the New Deal “shored up individual self-esteem and increased a passion for learning” (p. 203). He continues, the New Deal “recaptured the American spirit of community for all South Carolinians and restored their faith in capitalism, democracy and progress” (p. 203). Those readers interested in a serious analysis of the legislation should read Rethinking the Great Depression by Gene Smiley (2002).

Jim F. Couch is a Professor of Economics at the University of North Alabama. He is the coauthor of The Political Economy of the New Deal, Edward Elgar, 1999, with William F. Shughart.