The Great Depression started in the USA in October 1929. It led to the complete collapse of the US economy. Banks went bankrupt. Industries were closed down. The unemployment rate increased sharply.
In November 1932, the Presidential election took place. Franklin Roosevelt, a Democratic candidate, won the presidential election. He was responsible to introduce the New Deal scheme to drag out the USA from the great depression. So, what was the New Deal scheme? Basically, the New Deal scheme had 3 aims. The first aim was to give direct help to the poverty-stricken millions who were without food and homes. The second aim was to reduce Unemployment, stimulate the demand for goods and get the economy moving again. The third aim was to take, whatever measures were necessary to prevent a repeat of the economic disaster.
Federalism is a system of government in which power is divided between the federal or national government and various state governments. As Franklin Roosevelt introduced a new deal to drag the economy from recession, some of the state governments resented the extent to which the federal government was interfering in internal state affairs. So, many state governments went to Supreme Court against the federal government to get relief from the encroachment of federal government power over the state government.
The Supreme Court ruled that the President was taking on too much power. It ruled several measures of the New Deal as unconstitutional and this held up the operation. However, Supreme Court became more amenable during Roosevelt’s second term after he had appointed five more cooperative judges to replace those who had died or resigned. So, now, Roosevelt could easily impose his new-deal scheme and thus ignored the powers of state government. Thus the federal government began a power grab that has not stopped later on.
To conclude, many times, it is observed that economic issues change the nature of the political structure.
