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The American Pageant (12th Edition)
Chapter 34 – Page 785
785 “Direct relief from Washington to needy families helped pull the nation through the ghastly winter of 1933–1934.”
Bailey makes an impressive claim here that direct relief from the New Deal saved starving families. If true, that helps justify Bailey’s praise for FDR. But Bailey’s formulation is simplistic. He has money going to states, and states then using the money to give to “needy families.” As we have seen in the previous chapter, in the first phase of relief in 1932, which allocated $300 million, Illinois received more than New York, Texas, and California combined, and Massachusetts received no money at all. In part, that is because the politicians in Illinois lobbied for federal dollars more effectively than all the other states. Whoever had the most influence walked away with the most cash. That pattern continued under FDR.
Professors Jim Couch and William Shughart (in their book The Political Economy of the New Deal) study New Deal relief in detail and conclude that poor states often had to contribute more state funding for their relief than did richer states. Tennessee, for example, had to contribute 33 percent of its total funding for relief, but richer Pennsylvania only had to supply 10 percent of its total funding. The key political point here is that the poorer states of the South were safe Democratic states. Pennsylvania, however, went for Hoover in 1932, and Roosevelt wanted to lure it into the Democrat fold in 1936. Think of the funding for relief this way—as a transfer of wealth away from states with little political influence into states with more political influence.
Joseph Ely, the former governor of Massachusetts and a Democrat, watched this new trend with dismay. “Whatever the justification for relief,” Ely said, “the fact remains that the way in which it has been used makes it the greatest political asset on the practical side of party politics ever held by any administration.”