New Deal

The New Deal was a collection of federal programs enacted between 1933 and 1939 to solve the problems created by the Great Depression. In South Carolina the New Deal brought three R’s: recovery for farmers, bankers, textile mill owners, and small businessmen; relief for the unemployed and destitute; and reform in labor-management relations, banking, sale of securities, and retirement. In the process the New Deal radically increased the role of the federal government in the state’s economy by creating permanent acreage allotment programs, agricultural credit, compulsory minimum wage / maximum hours requirements, protection for laborers who sought to unionize, Social Security benefits, a public welfare system, the Federal Deposit Insurance Corporation to protect depositors, the Federal Housing Administration to expand housing opportunities, and the Rural Electrification Administration to electrify the countryside.

Even before the stock market crash in October 1929, South Carolina had suffered several years of economic downturn. Cotton began to decline as early as 1920, a victim of overproduction and the boll weevil. In the next five years, the average value of farmland dropped from $65 to $43 per acre. During the 1920s farmers abandoned one-sixth of South Carolina’s farms. The collapse of the cotton economy brought down forty-nine percent of the state’s banks. In the mid-1920s the state’s textile economy joined farming in economic depression. In 1929 shares of stock in the state’s 230 textile mills sold for one-half their 1923 price. The onset of the Great Depression made wretched conditions even worse. By 1931 cotton was selling for 6¢ per pound, actually below the cost of production, and the cash value of South Carolina’s farm commodities had dropped by half since 1929. In 1932 rural poverty was so severe that taxes were delinquent on almost half the state’s farms. There was no market for the securities of textile mills, and average annual textile wages plummeted from $719 in 1929 to $495 in 1932. Not surprisingly, by 1933 one-fourth of the state’s population was eligible for public relief.

The New Deal attacked these problems through a host of innovative programs and the creation of a myriad of new federal agencies. Managed on the floor of the U.S. House of Representatives by Congressman Hampton P. Fulmer of Orangeburg, the Agricultural Adjustment Act created the Agricultural Adjustment Administration (AAA), which raised farm prices in South Carolina by reducing surpluses through a permanent acreage-reduction program. In mid-summer 1933 farmers in the Palmetto State plowed under 425,000 of their 1,770,000 acres of cotton. In subsequent springs they planted only their allotment. Farmers were paid for acres destroyed or not planted. They also enjoyed higher prices because of the reduc- tion in supply. Similarly, the state’s 23,000 tobacco farmers in the Pee Dee reduced their acreage by thirty percent and enjoyed an increase in price per pound from 11.14¢ in 1932 to 21.60¢ in 1934. The reduction in acreage of both crops reduced the need for tenants and thus hastened migration from the countryside to cities and towns. At the same time, the Rural Electrification Administration (REA), set up in 1935, made farm life more tolerable by encouraging rural electrification. The percentage of farms in South Carolina with electricity increased from two in 1934 to almost fifteen by 1940.

Meanwhile the National Industrial Recovery Act of 1933 created both the National Recovery Administration (NRA) and the Public Works Administration (PWA) to bring about business recovery, which in South Carolina meant textiles. Under the NRA, each industry drew up a Code of Fair Competition to allow firms within the industry to raise prices by cutting back production. NRA Code Number 1, the textile code, which was partly written by textile magnate Thomas Marchant of Greenville, required the 230 mills in South Carolina to reduce production from the customary 105 hours a week to 80 hours a week. At the same time, the code forced mills to eliminate child labor, pay a minimum wage of $12 a week, employ each worker for no more than 40 hours a week, and allow workers the right to unionize.

Flaws in the code and its ineffective enforcement led to a host of strikes culminating in the General Textile Strike of 1934, which involved half of South Carolina’s eighty thousand workers. The strike ended on management’s terms, and its failure had a chilling effect on unionization in South Carolina for years thereafter. Despite the protection of the New Deal’s National Labor Relations Act of 1935, which punished mill owners for discharging workers because of union activity, union organizers in South Carolina enjoyed little success in their attempts to unionize the cotton industry in the late 1930s. By 1980 only 6.7 percent of the state’s labor force was unionized, the second smallest percentage in the nation. Workers at least could thank the New Deal for the Fair Labor Standards Act of 1938, which set a permanent minimum wage and maximum workweek.

Aiding the NRA in effecting business recovery was the Public Works Administration (PWA), which stimulated purchases in construction and related industries such as steel, cement, and lumber. In South Carolina the PWA was synonymous with the construction of public housing at University Terrace, Gonzales Gardens, and Calhoun Court in Columbia and Cooper River Court, Meeting Street Manor, and Anson Borough Homes in Charleston, eighty-seven schools and ten city halls and courthouses across the state, and massive hydroelectric projects at Buzzard Roost in Greenwood County and Santee Cooper in the lowcountry. Both hydroelectric projects helped mightily in the effort to electrify rural areas, expand recreational opportunities, eradicate malaria, and attract industry to the state. Both also required massive amounts of labor at a time when jobs were scarce.

More important in helping the unemployed were the various relief agencies. The Federal Emergency Relief Act of 1933 appropriated $500 million to be channeled through the forty-eight state relief administrations to alleviate unemployment and human misery. The South Carolina Emergency Relief Administration (SCERA) spent its allotment on both direct relief for unemployables and work relief for those able to work. The latter earned SCERA dollars, and later Civil Works Administration (CWA) dollars, through work at jobs in sewing rooms, libraries, swamp drainage, local infrastructure construction, literacy training, reconstruction of Charleston’s Dock Street Theater, and the construction of highways, bridges, and schools.

In 1935 the Roosevelt administration created the Works Progress Administration (WPA) to take over work relief, while insisting that the states assume responsibility for their unemployables. The state of South Carolina, aided by federal grants under Social Security, created the South Carolina Department of Public Welfare to look after the needy. Meanwhile, the WPA undertook the most massive work-relief effort in the state’s history. Indeed, for several years the WPA was the state’s largest employer. Its fruits included the construction or improvement of 1,138 bridges, 11,699 culverts, 10,000 miles of highways, 2,179 schools, and 1,267 noneducational buildings such as courthouses and jails. Less visible but also valuable were the 2.1 million garments made for the poor in WPA sewing rooms, literacy efforts that all but wiped out illiteracy in the educable population, the publication of the nationally known South Carolina: A Guide to the Palmetto State (1941), and music classes and concerts for more than twenty percent of the state’s citizens.

The most popular of all New Deal programs in the Palmetto State was the Civilian Conservation Corps (CCC). This program put unemployed young males between the ages of seventeen and twenty-five years into South Carolina’s thirty CCC camps to do conservation work, which by 1939 included thinning almost fifty thousand acres of forests, devoting more than 115,000 man-days to planting trees, and spending almost 120,000 hours fighting forest fires. The young men also constructed more than 5,400 miles of fire breaks, almost 1,500 miles of truck trails, and the state’s first fourteen state parks. In 1938 alone, an estimated one-fourth of the state’s citizens enjoyed the new state parks. By 1939 almost 32,000 South Carolinians had served in the CCC.

Also by 1939, other less visible but equally valuable New Deal agencies had improved conditions in the Palmetto State. The National Youth Administration (NYA) paid $1.1 million in wages to almost twenty thousand high school and college students who could not have remained in school without the jobs provided by the NYA. The Home Owners Loan Corporation (HOLC), which purchased mortgages from lenders and then renegotiated more favorable terms with the borrowers, saved ten percent of the state’s nonfarm homes from foreclosure. The Federal Housing Administration (FHA), which insured more than twelve thousand loans totaling almost $15 million, made credit available to home buyers when none existed in the private sector. The presence of Federal Deposit Insurance Corporation (FDIC) insurance so restored popular confidence in banking that bank failures in South Carolina dropped from an average of twenty-five per year between 1921 and 1933 to just two banks in the five years between 1934 and 1939.

Results of the New Deal in South Carolina were mixed. It did not challenge racial segregation, which existed in every New Deal program. Neither did the New Deal dismantle the state’s conservative political culture, local power structure, legislative supremacy, or prevailing notions of class, gender, and race. On the other hand, the New Deal restored confidence in democracy, capitalism, and progress. It kept farmers, mill owners, bankers, and mill workers out of bankruptcy long enough for them to prosper during and after World War II. The programs in work relief and public works were responsible for the state’s first public housing, two massive hydroelectric complexes, and thousands of miles of highways, bridges, sewage systems, and water systems. The program in industrial recovery and reform brought permanent shorter hours, higher wages, better working conditions, and labor’s right to organize. The program for agricultural recovery brought permanent price supports, acreage reduction, agricultural credit, soil conservation, and rural electrification. The New Deal launched the national careers of politicians such as Olin D. Johnston and Burnet Maybank and furthered the career of James F. Byrnes, who helped author or served as Senate floor manager for at least eight major pieces of New Deal legislation. The state’s current system of alcoholic beverage control began with the New Deal. Also starting during the New Deal was African American activism, which culminated in the civil rights movement in the decades following World War II. Truly, the New Deal was a watershed in the state’s history. See plate 31.

Cann, Marvin L. “Burnet Rhett Maybank and the New Deal in South Carolina, 1931–1941.” Ph.D. diss., University of North Carolina, 1967.

Hayes, Jack Irby. South Carolina and the New Deal. Columbia: University of South Carolina Press, 2001.

Hiott, William D. “New Deal Resettlement in South Carolina.” Master’s thesis, University of South Carolina, 1986.

Lesesne, Henry H. “Opposition to the New Deal in South Carolina, 1933–1936.” Master’s thesis, University of South Carolina, 1995.

Prince, Eldred E., and Robert R. Simpson. Long Green: The Rise and Fall of Tobacco in South Carolina. Athens: University of Georgia Press, 2000.