Articles on Wisconsin legal history

Beating the Great Depression: Wisconsin's "little New Deal"

Written by Joseph A. Ranney, Attorney at Law
Ph: (608) 283-5612

During the early 1930s, Wisconsin, like the rest of the nation, suffered through the Great Depression. President Franklin D. Roosevelt created the "New Deal," an array of creative and far-reaching federal programs, to restore the economy.

Roosevelt and the federal government dominated the relief effort, but unlike many states Wisconsin was not content to let them solve all the problems created by the Depression. Between 1930 and 1938 Wisconsin enacted several measures which together can fairly be called a "little New Deal." They included:

A union bill of rights. In 1931 the Legislature created Wisconsin's first labor code. The code declared that all workers had the right to form unions. It legalized a wide variety of picketing activities and other union activities which had often been challenged in the past. The code marked the acceptance of unions as an established part of Wisconsin society.

Unemployment compensation. In 1931 Wisconsin became the first state in the nation to create an unemployment compensation system. The system was the creation of John Commons, a University of Wisconsin economist who had made many important contributions to reform during the Progressive era. The unemployment compensation system was Commons' last great achievement in a distinguished career. Commons had urged the Legislature to create such a system since the 1920s. But he was not able to prevail until Philip LaFollette—Fighting Bob's son—was elected governor and Harold Groves, one of Commons' students, was elected to the Legislature in 1930.

The Wisconsin Recovery Act. Many economists believed in the 1930s that rising unemployment was largely due to cutthroat competition. They believed the problem could be solved by creating "fair practices codes" for each industry. In 1933 the Legislature passed the Wisconsin Recovery Act, creating a code system. The "codes" contained many benefits for workers: they regulated working conditions, set minimum pay levels, created collective bargaining rights for labor, and limited the prices businesses could charge.

However, the codes went too far. The Legislature gave the governor a free hand to set standards for each industry, and in 1935 the Wisconsin Supreme Court said the Legislature could not give away that much power to the governor. A similar program in Washington was struck down by the U.S. Supreme Court for the same reasons.

Undaunted, the Wisconsin Legislature passed a new version of the same law which said businesses could not engage in "unfair" practices and left it to the governor to determine what was "unfair" in each industry. In 1936, the Court upheld this version of the law.

Rural electrification. In the 1930s many part of Wisconsin still did not have electricity. Phil LaFollette made that goal one of his top priorities, much as President Franklin Roosevelt made the Tennessee Valley Authority electrification project one of his top priorities. In 1938, at LaFollette's urging, the Legislature created the Wisconsin Development Authority as a private corporation to promote rural electrification. Wisconsin's existing power companies protested that by doing this the government was competing with private enterprise, but on a close vote the state Supreme Court approved the law.

The Social Security Act: a Wisconsin product. Wisconsinites played an important part in creating the federal Social Security system, which first became law in 1935. The president appointed Edwin E. Witte, a University of Wisconsin professor and former head of the Legislative Reference Library, and Arthur Altmeyer, the secretary of the state Industrial Commission, to head the commission which drafted the law. Elizabeth Brandeis of the University of Wisconsin helped build support for social security with the help of her father, U.S. Supreme Court Justice Louis Brandeis. Sen. Robert LaFollette, Jr.—Fighting Bob's other son—also played an important part in getting the bill through Congress.

Note: The views expressed in this article are the author's alone. Distributed as a public service by the Wisconsin Supreme Court in honor of the state's sesquicentennial.

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