F.D.R.'s Disputed Legacy
By Otto Friedrich
COVER STORY
A new look at the New Deal, how it changed us and what it teaches us
Joint sessions of the Congress of the United States are rare and stately rituals, and it is rare indeed that they occur twice within a few days. This week, with a fanfare of ironies and contradictions, that ceremonial conjunction is taking place. On Tuesday, Jan. 26, President Ronald Reagan appears on Capitol Hill to deliver his State of the Union address, proclaiming once again his determination to cut back on Big Government, on Government spending and Government intervention in people's lives. Two days later, the two Houses of Congress reassemble to commemorate the 100th birthday of the man generally credited (or blamed) for creating the era of Big Government: Franklin Delano Roosevelt. Reagan likes to use such occasions to indulge his penchant for quoting Roosevelt, the hero of his youth, bending to his own purposes one of the famous Rooseveltian phrases about the forgotten man or the generation that has a rendezvous with destiny. The speakers at the F.D.R. commemoration, by contrast, generally regard Reagan as a doctrinaire conservative determined to tear apart the entire Roosevelt heritage.
Roosevelt assumed leadership during one of the greatest crises in modern history--a crisis that seemed to mark the total breakdown of the American system--and his response to that emergency changed the nation's ways forever. In the tumultuous period still known as the Hundred Days, he pushed through Congress a broad array of legislation, ranging from the reform of the nation's banks to the reorganization of the entire farm system. Yet as the expected battles in Congress over new taxes and budget cuts will make clear, the arguments of 1932 still shape the state of the nation in 1982. This is the disputed Roosevelt heritage.
Sam Rosenman still remembered two decades later that he had sent out for some hot dogs. Day was already dawning, and the beefy young lawyer had been waiting all night with Governor Franklin D. Roosevelt at the executive mansion in Albany for the news that the presidential nomination had been won. Two secretaries lay asleep on sofas. The first three ballots at the Democratic Convention in Chicago had failed to bring Roosevelt victory, but Rosenman decided to take the hot dogs and a pot of coffee into a nearby dining room and work on the Governor's acceptance speech.
As Rosenman labored on, sourly wondering from time to time whether the speech would ever be delivered, he did not realize that he had somehow happened upon the phrase that was to name a whole era and a whole philosophy of American Government. "I had not the slightest idea that it would take hold the way it did," Rosenman recalled, "nor did the Governor when he read and revised what I had written." But when Roosevelt flew through dangerous headwinds to Chicago to accept the nomination--the first time a victorious candidate had ever gone before a convention--the delegates hungrily awaiting leadership roared at his declaration: "I pledge myself to a new deal for the American people."
NEW DEAL said the next day's headlines. Rollin Kirby of the New York World-Telegram summed up the reaction with a cartoon, which showed a troubled farmer with a hoe looking up into the sky at an airplane bearing the incantatory words NEW DEAL. It was a message of hope at a time when a naturally optimistic people seemed to be slipping into despair, and with good reason. In the three years since the great stock market crash of 1929, national income had plunged by more than half, from $87.4 billion to $41.7 billion. Unemployment had soared to 4 million in 1930, 8 million in 1931, 12 million in 1932--one-quarter of the entire work force--and in stricken cities like Chicago the figure went as high as one-half. FORTUNE magazine estimated that 27.5 million Americans had no regular income at all. More than a million of the jobless roamed the country as hobos. Ugly clusters of tin-can shanties known as "Hoovervilles" sprouted in the midst of New York City's Central Park. Penniless men tried to sell apples on street corners. Many talked of revolution.
And now there came before the Democratic Convention of 1932 a man who was so wasted by polio that he could not stand erect without leg braces, but who promised his stricken nation "a new order of competence and courage," and who declared: "This is more than a political campaign; it is a call to arms."
It was exactly half a century ago this summer that the call to arms was sounded, and half a century ago this fall that it was answered. Roosevelt swept the bewildered Herbert Hoover out of the White House by a landslide of 472 electoral votes to 59. The new Congress too was ready for bold leadership--ready indeed to give up much of its own authority--and in Roosevelt's legendary first hundred days he won approval of 15 major legislative innovations. Many of the New Deal's experiments failed or faltered into limbo, but others became part of the steely armature of American life. Social Security, minimum wages, insured bank savings, the right to join labor unions--these are just a few of the lasting results of Roosevelt's New Deal. For better or for worse, Washington took on a basic responsibility for planning and managing society, for maintaining the nation's prosperity, and for the equitable sharing of that prosperity. What Roosevelt called the "forgotten man" would be forgotten no longer.
It was exactly a century ago, on Jan. 30, 1882, that the man who worked this transformation was born to wealth and ease in a Hudson River estate at Hyde Park, N.Y. Destined for Groton, Harvard, the law and a life of comfortable obscurity, he became instead not only the President and creator of the New Deal but also the architect of a new political coalition that elected him to four terms and remained in control of Washington for more than two decades. As commander of the Grand Alliance that won World War II, he established the U.S. as the unchallenged leader of the free world. He was, says one young admirer named Peter Kovler, "as great a hero as a nation ever gets."
Kovler, 29, a distillery heir who sports a bushy mustache and bushy optimism, was born seven years after Roosevelt's death. When a friend, who happened to have been born on Roosevelt's birthday, told him last summer that it would soon be the F.D.R. centennial, Kovler began asking what celebrations were being planned. To his amazement he learned that virtually nothing was being done. The U.S. seemed to be suffering what Kovler calls a "collective amnesia." Says he: "It has been so long since we have taken a President seriously that we may have forgotten how."
So Kovler used his contacts as a former congressional and Commerce Department aide to start organizing a Roosevelt centennial committee, which ended up including such luminaries as Senator Edward Kennedy, Diplomatic Troubleshooter Averell Harriman, Roosevelt Aide Benjamin Cohen, Poet Archibald MacLeish and the three surviving Roosevelt sons. Kovler even lobbied an appropriation of $200,000 through Congress to help promote a series of celebrations later this month. In addition to the joint session of Congress, the events will include these:
> There will be a wreath-laying ceremony at Roosevelt's birthplace in Hyde Park, and a birthday cake will be served where he died, in Warm Springs, Ga., the mineral-water health resort that he regularly visited for treatment of his physical afflictions.
>The Smithsonian Institution will stage six large exhibitions of Roosevelt memorabilia. The Library of Congress, the National Archives and the Corcoran Gallery will mount shows of their own. So will Harvard, the Universities of California, Texas, Illinois and at least a dozen more.
>The March of Dimes will honor its founder with a dinner in Washington. The Democratic National Committee will stage a fund raiser in New York. So will a gaggle of other organizations, ranging from the Indiana Democrats to the port of Oakland.
In contrast to past presidential centennials, however, the Roosevelt celebrations conspicuously lack one major participant: the incumbent President. Ronald Reagan, whose unemployed father got a job as a minor New Deal official, has scheduled a White House lunch for some of the Rooseveltians attending the joint session of Congress, but he did not accept any invitations to attend the various festivities. The Republican National Committee publication Source even disparaged the anniversary events by denouncing Roosevelt as "the great chiseler." Thus the controversy surrounding F.D.R. refuses to die.
"The snow of '29 wasn't real snow," said one of Scott Fitzgerald's sad young men. "If you didn't want it to be snow, you just paid some money."
The easy money of 1929 characterized the carefree spirit of the Jazz Age, and so did the stock market, which seemed to keep climbing forever upward, faster and faster. During the last 18 months of the great bull market, General Electric rose from 128 to 396, RCA from 94 to 505. Anyone who could not afford to pay could buy on margin for as little as 10% cash. The market suddenly stopped climbing on Sept. 3. Then came a month of hiccuping declines, then the wild, shouting, shoving anarchy of "Black Thursday." By the end of the month, $32 billion in paper values had simply disappeared.
"The fundamental business of the country is on a sound and prosperous basis," President Hoover said the day after Black Thursday. He was expressing the standard and perfectly correct view that Wall Street is quite different from the U.S. economy as a whole. But the U.S. economy suddenly seemed just as stricken as Wall Street. The index of manufacturing production sank from 127 in June 1929 to 97 a year later. Farm income dropped even more. In 1930, 26,355 business firms went bankrupt. Hoover kept saying it was a temporary problem. "Gentlemen," he told some visitors that year, "the Depression is over."
Economists debate to this day about what caused the Great Depression. A prevailing view, persuasively argued by John Kenneth Galbraith, is that the technological increases in productivity throughout the 1920s (up 43% per factory man-hour) were not matched by increases in wages and thus in the public's capacity to consume (factory pay rose less than 20%). The collapse of the overinflated stock market therefore started a downward spiral in both demand and the ability to pay. Conservative economists like Milton Friedman, on the other hand, blame the Federal Reserve System for failing to expand the money supply sufficiently in the wake of the stock market crash.
Hoover was rather dour by nature--Secretary of State Henry Stimson described a White House meeting as "like sitting in a bath of ink"--and he insisted that reduced spending and a balanced budget would end the slump. "Nobody is actually starving," Hoover said. "The hobos, for example, are better fed than they have ever been." Other U.S. officials were equally astute. Said Treasury Secretary Andrew Mellon in 1930: "I see nothing in the present situation that is either menacing or warrants pessimism." (Joke of the day: Hoover asks Mellon, "Can you lend me a nickel to call a friend?" Mellon answers, "Here's a dime. Call all of them.")
Nostalgia portrays Roosevelt as the smiling and confident man who knew the answers, but in 1932 there was no such omniscience. "If you had to start a campaign trip within ten days, we'd be in an awful fix," Speechwriter Rosenman told the would-be President. Roosevelt assigned Rosenman to recruit the idea men who were to become known as the Brains Trust, notably Columbia Professors Raymond Moley, Rexford Guy Tugwell and Adolf A. Berle. But the Democratic platform of 1932 committed Roosevelt to Hooverian solutions: a balanced budget and a 25% cut in Government spending.
Indeed, while Hoover fulminated against "socalled new deals," it was Roosevelt who accused the President of "reckless and extravagant" spending, and of thinking "that we ought to center control of everything in Washington as rapidly as possible." Roosevelt's running mate, Congressman John Nance Garner of Texas, 63, even claimed that Hoover was "leading the country down the path of socialism." Eleanor Roosevelt best summed up her husband's uncertain command of the future when she wrote at the time of his Inauguration: "One has a tremendous feeling of going it blindly, because we're in a tremendous stream, and none of us knows where we're going to land."
To the 100,000 citizens assembled before the Capitol on that bleak and windswept Inauguration Day of 1933, and to millions more clustered around their radios, Roosevelt offered not a series of remedies but a new spirit of assurance. It was this spirit that inspired him to seize a phrase from Henry David Thoreau ("Nothing is so much to be feared as fear") for his famous declaration that "the only thing we have to fear is fear itself." There had been three years of Government dithering since the Crash, and a new course was to be set. Said Roosevelt: "This nation asks for action, and action now." To end the crisis, he would seek from Congress a "broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe." This was the passage that, somewhat ominously, drew the loudest applause.
ROOSEVELT ASKS DICTATOR'S ROLE cried the headline next day in Hearst's New York Sunday Mirror. With unemployment still climbing and much of the banking system shut down, there was indeed a widespread sense that the American political system was getting its last chance. "The biggest and finest crop of little revolutions I ever saw is ripe all over this country right now," a Farmers' Union leader testified before a Senate committee. Conservatives were no less apocalyptic. "Even the iron hand of a national dictator is in preference to a paralytic stroke," said Republican Governor Alf Landon of Kansas. "If this country ever needed a Mussolini, it needs one now," declared Senator David Reed of Pennsylvania. In Europe, indeed, the week of Roosevelt's Inauguration was the same week in which Adolf Hitler used the Reichstag fire to win emergency powers and suppress all opponents of his New Order for Germany.
On the morning after the Inauguration, Roosevelt ate an early Sunday breakfast, then had himself wheeled into the Oval Office to get his New Deal under way. In the vacated presidential desk he could find neither a pencil nor a pad of paper. He could find no buzzer with which to summon an aide. He paused for an echoing moment in this vacuum of power, then threw back his head and shouted until a secretary came running.
The first order of business was to save the nation's banks. The largely unregulated banking system, which Democratic Senator William Gibbs McAdoo of California said "does credit to a collection of imbeciles," was on the brink of total extinction. During the last week of the Hoover regime, $250 million in gold had been withdrawn by frightened depositors. Overall bank reserves now stood at a mere $6 billion against liabilities of $41 billion. Roosevelt decided that he had no choice but to proclaim a nationwide "bank holiday" to last until he could push a recovery bill through Congress. And so it was done. The banks were closed.
"All business came to a complete halt," Ruth McKenney* reported in the typical industrial center of Akron, Ohio. "The rubber shops closed. Streetcars ran on half schedules. Coal companies shut. Thousands and thousands of men, still employed despite the Depression, were sent home from work 'temporarily laid off.' Money nearly disappeared from circulation. Payrolls were not met. Checks were not honored . . ."
While housewives around the country begged food on credit and businessmen started bartering goods or issuing private scrip, Roosevelt's financial experts worked late into the night to patch together a rescue bill. That bill effectively took the U.S. off the gold standard and thus promised easier money in days to come; it also authorized the Treasury to inspect all closed banks and gradually reopen them with various guarantees of solvency. The only copy of the bill was rushed to the House as soon as it reconvened at noon Thursday, and after half an hour of debate, there came cries of "Vote! Vote!" That vote was unanimous, the Senate vote nearly so, and Roosevelt signed the finished legislation at 8:30 p.m.
This was the spirit of the Hundred Days. Action, and action now. Said Will Rogers: "The whole country is with him, just so he does something. If he burned down the Capitol, we would cheer and say, 'Well, we at least got a fire started anyhow.' " On Roosevelt's second Sunday in the White House, he remarked at dinner, "I think this would be a good time for beer." That same night, he drafted a message calling for Congress to cancel the Prohibition ban on 3.2 beer. The House approved this on Tuesday and the Senate on Thursday. (It took until Dec. 5 before Utah became the 36th state to ratify the 21st Amendment to the Constitution, repealing Prohibition in its entirety.)
With the New Deal came the New Dealers, a breed unknown in the sleepy Southern town that Washington had been. Rosenman had urged Roosevelt to seek advisers not among the usual politicians and financiers but in the universities. Harvard Law Professor Felix Frankfurter was now sending along a pack of bright and ambitious young lawyers who came to be known as the "happy hot dogs." Washington "is more entertaining and more lively than at any time since the war," the critic Edmund Wilson reported in the New Republic. "Everywhere in the streets and offices you run into old acquaintances . . . the 'progressive' young instructors from the colleges, the intelligent foundation workers, the practical idealists of settlement houses, the radicals who are not too radical not to conceive that there may be just a chance of turning the old order inside out." Not everyone admired these newcomers, of course. Judge Learned Hand, of the Second Circuit U.S. Court of Appeals, called them "so conceited, so insensitive, so arrogant."
Perhaps the most remarkable of all the New Dealers was Harry L. Hopkins, a gangling and often brusque idealist who, in the words of one acquaintance, gave off "a suggestion of quick cigarettes, thinning hair, dandruff, brief sarcasm, fraying suits of clothes, and a wholly understandable preoccupation." Born to poverty as the son of an Iowa harnessmaker, Hopkins had worked one summer among the slum children of New York City's Lower East Side, and that experience turned him into a professional social worker. When the Crash came, Governor Roosevelt made Hopkins head of New York's emergency relief, the nation's first such state program. Spreading money among the poor became Hopkins' life's passion, rivaled only by his passion for losing money at the race track.
Hopkins violated the rules that most Americans had learned in childhood: that taking charity was shameful; that unemployment was shameful; that a man who couldn't feed himself and his family was hardly a man at all. "Under our political system," Hoover had said in 1930, "Government is not, nor should it be, a general employer of labor." Federal aid to the unemployed, Hoover said, would weaken their "moral fiber." Hopkins disagreed. "People don't eat in the long run, Senator," he said to one legislator, "they eat every day."
Charity had traditionally been local, but the tidal wave of misery had overwhelmed local resources. Relief payments were often as low as $3 a week, and those too proud to beg got nothing. When Hoover said that nobody had starved, FORTUNE magazine used his statement as the title of a bitter dissent: 95 people suffering starvation were admitted to New York City hospitals during 1931, and 20 of them died; 27% of the schoolchildren in Pennsylvania in 1932 were suffering from malnutrition. Roosevelt's first bill for federal relief passed Congress in May ("God save the people of the United States," protested Republican Senator C.L. Beedy of Maine), but the $500 million appropriation had to be disbursed through the states. By nightfall of Hopkins' second day as Federal Relief Administrator, he had telegraphed seven Governors and arranged more than $5 million in emergency grants. MONEY FLIES, read the headline in the Washington Post.
The coming of winter--and it was to reach a Siberian 23 below zero in Seminole, Texas--inspired Hopkins to an unheard-of extravagance. Why, he asked Roosevelt at a White House lunch in October 1933, couldn't the Federal Government simply hire the unemployed for the winter at all kinds of part-time jobs that needed doing, such as repairing roads or teaching the illiterate or simply raking leaves? How many jobs would be feasible, asked the President. Hopkins made a quick guess: 4 million. "Let's see," said Roosevelt, "4 million people--that means roughly $400 million. I guess we could take that out of the public works fund and not have to ask Congress."
A week later, a Roosevelt decree created the Civil Works Administration. Within the incredible space of a month, Hopkins had put 2.6 million people on his payroll, at 40-c- an hour for unskilled labor, $1 for skilled; within another month he had hit his target of 4 million jobs. CWA workers refurbished 500,000 miles of roads and 40,000 schools, and they built 150,000 outdoor privies throughout the South. Hopkins hired actors to give free shows and librarians to catalogue archives. To someone who criticized such largesse for intellectuals, Hopkins answered: "Hell, they've got to eat just like other people." He even paid researchers to study the history of the safety pin and hired 100 Washington workers to patrol the streets with balloons to frighten starlings away from public buildings. Soon the language of politics acquired a new word: boondoggle.*
Roosevelt's pioneering experiments in public works and welfare were schizophrenic from the start. Everyone agreed that the dole was demoralizing. Said the mayor of Toledo: "I have seen thousands of these defeated, discouraged, hopeless men and women cringing and fawning as they come to ask for public aid." Entirely different from Hopkins' organization in purpose and style was the Public Works Administration, operated by Harold Ickes, the cigar-waving and curmudgeonly Secretary of the Interior, who was determined to make every dollar produce an honest dollar's worth of Government building. He refused, he said, "to hire grown men to chase tumbleweeds on windy days." In six years Ickes spent $6 billion and created, among other things, New York's Triborough Bridge, the Grand Coulee Dam on the Columbia River, the Chicago sewage system, the port facilities of Brownsville, Texas, and 70% of the nation's new schools.
But while Ickes could show that no dollars were wasted on idlers, Hopkins pursued a more charitable concept for his Federal Emergency Relief Administration (FERA), which in 1935 grew into the WPA. While it cost Ickes $330 to produce one man-month of employment, it cost Hopkins only $82, for Hopkins spent 86-c- out of every dollar on wages for the needy, only 10.5-c- on material and 3.5-c- on administration. In months of bitter infighting with Ickes and everyone else, Hopkins steadily amassed money and power for his spending machine. The WPA became the nation's biggest employer, hiring an average of 2.1 million people annually (8 million in all), and spending more than $10 billion over its first five years.
Hopkins too was a master builder. The WPA created New York's La Guardia Airport, for example, and restored the St. Louis riverfront. But the most remarkable aspect of the WPA was its willingness to put people to work at their own trades (average wage: $50 to $60 a month) and to try anything. The WPA excavated Indian burial grounds in New Mexico, translated and indexed French and Spanish records in New Orleans, operated the bankrupt city of Key West, Fla. Unemployed writers like Conrad Aiken and John Cheever were put to work creating the American Guide series. Artists like Ben Shahn, Jackson Pollock and Alice Neel (see cover portrait) painted pictures to be displayed in schools and other public buildings. The WPA Federal Theater Project provided 12,000 jobs for novelties like Orson Welles' all-black version of Macbeth and the jazzed-up Gilbert and Sullivan Swing Mikado. "It takes a lot of nerve," Hopkins warned Theater Project Chief Hallie Flanagan, "because when you're handling other people's money, whatever you do is always wrong. [But] what's a Government for?"
The battles between Hopkins and Ickes were typical of Roosevelt's way of exercising leadership. Having attracted swarms of bright and assertive newcomers to Washington, he encouraged them to fight for their ideas, even against each other. To the despair of those who believed in official channels and hierarchies, Roosevelt constantly called in special advisers and experts to suggest new and sometimes contradictory approaches. And he always remained ready to experiment. "Take a method and try it," he said. "If it fails, admit it frankly and try another. But above all, try something."
Roosevelt knew too that the actual administration of the New Deal was only part of the answer. No less important was his psychological campaign to cure what had become a national crisis in confidence. Roosevelt instinctively understood the immense importance of radio as a means to reach and unite people, and with his sonorous voice he brilliantly exploited the new medium in the periodic "fireside chats" that always began: "My friends . . ." Roosevelt was equally adept at manipulating the press. He invented the modern press conference, canceling Hoover's stiff insistence on written questions and inviting White House reporters to gather around his desk for bantering but far-ranging exchanges on his new programs.
The American people responded. At the White House mail room, where two or three functionaries had dealt with fewer than 800 letters a day in the Hoover era, 22 clerks were swamped by nearly 50,000 letters after fireside chats during Roosevelt's first year. Roosevelt was in the process of creating the personal presidency, or, as Supreme Court Justice William Douglas later put it, "He was in a very special sense the people's President because he made them feel that with him in the White House they shared the presidency."
Roosevelt's penchant for experimenting guided his chief measure for industrial revival, the National Industrial Recovery Act, and his choice of the man he put in command of it, General Hugh ("Ironpants") Johnson. A profane and red-faced ex-cavalryman, an admirer of Mussolini and good bourbon, West Pointer Johnson had spent the war years spurring the Selective Service System and applying the whip to the War Industries Board, which supervised the manufacturing and sale of military supplies.
The NRA badly needed a human whirlwind like Johnson. Roosevelt described the act, when he signed it in June, as "the most important and far-reaching legislation ever enacted by the American Congress," but it was actually an ill-considered amalgam of two conflicting and somewhat unrealistic strategies. To revive production, which had dropped by almost 50% since 1929, the NRA invited all employers within a given industry to ignore the antitrust laws and draw up their own "codes of fair competition." That implicitly permitted not only production curbs but legalized price fixing. On the other hand, to stop the rapid spread of wage cuts and unpaid overtime, the NRA codes were also supposed to include such things as minimum wages (set at $12 a week), maximum hours (40), a ban on child labor and a guarantee of the right to organize unions.
All these innovations had to be negotiated by each industry under the aegis of General Johnson, who characteristically summed up the social philosophy of cooperating for the sake of recovery as "that blah-blah." All through the sweltering summer of 1933, bands of lobbyists and executives wandered in and out of Washington offices, trying to figure out which code covered them and what it was supposed to say. Johnson managed to get the entire cotton textile industry organized in June. But Henry Ford, who accounted for 21% of all auto sales, refused to have anything to do with such Government interference, and Johnson had no power to coerce anyone except by threatening "a punch in the nose." What Johnson did have was an instinctive genius for what came to be known by a newly popular word: ballyhoo.
Johnson sketched himself a symbol, a blue eagle clutching a cogwheel and a sheaf of lightning bolts, to be displayed by all employers who complied with the new codes. Then he called for a public boycott of anyone who refused. He asked for union volunteers to act as monitors. And Boy Scouts too. He even used Army Air Corps bombers to ship NRA banners and placards around the country. Said Johnson: "When every American housewife understands that the Blue Eagle on everything that she permits to come into her home is a symbol of its restoration to security, may God have mercy on the man or group of men who attempt to trifle with this bird."
It worked. Drafts of NRA codes began pouring in; there were 144 in July. In September, New York celebrated the NRA with the biggest parade in the city's history; some 250,000 marchers poured down Fifth Avenue to the strains of Happy Days Are Here Again. There were ultimately more than 500 codes, ranging from the production of lightning rods to the manufacture of corsets and brassieres, covering more than 2 million employers and 22 million workers. But while these codes did protect workers and the growth of unions, they also forced up prices, and whether they really spurred recovery was questionable.
Bad as the industrial depression was, the crisis on the land was even worse; the farmers, one-quarter of the population, had been in serious trouble even during the 1920s. A bushel of wheat that sold in Chicago for $2.94 in 1920 dropped to $1 by 1929 and 30-c- by 1932. Such prices provoked desperation. In LeMars, Iowa, where Judge Charles Bradley was foreclosing a series of mortgages, a crowd of farmers kidnaped him from his courtroom, drove him into the countryside and strung him up until he nearly lost consciousness. Then they revived him, crowned him with a truck hubcap and forced him to his knees. "O Lord, I pray thee," the judge gasped, "do justice to all men."
The problem was that farmers kept producing surpluses, and there was no mechanism to maintain prices. The solution long advocated by an obscure Montana State College professor named Milburn L. Wilson was to restrict production, but that would require an unheard-of amount of Government supervision. With the election of Roosevelt, Wilson was able to convince the incoming Agriculture Secretary, Henry Wallace, to carry out his idea. "I tell you frankly that it is a new and untrod path," Roosevelt declared in sending the Agricultural Adjustment Act (AAA) to Congress that May, "but . . . an unprecedented condition calls for the trial of new means."
The fields had already been planted that spring, so Wallace had to send 22,000 mostly volunteer agents prowling through the country to persuade suspicious farmers to plow under one-quarter of their crops for cash payments of $6 to $20 an acre. If destroying newly planted crops seemed to violate every American tradition--and it did--Wallace was even more furiously criticized for deciding to slaughter 6 million baby pigs rather than let them grow to full size. The son of Calvin Coolidge's Agriculture Secretary, an eminent plant geneticist and an idealist with presidential aspirations, Wallace was as appalled as anyone by the butchery. It reflected not the ideals of "any sane society," he complained, but an emergency caused by "the almost insane lack of world statesmanship" in stabilizing food prices.
As on the industrial front, Roosevelt had embarked on a risky course of replacing an open market with Government management of agriculture; there were almost no precedents for such tricky devices as official price fixing, subsidies, and production controls. He had an additional enemy in nature, which afflicted the whole farm belt in 1934 with droughts and dust storms, driving tens of thousands of ruined farmers to pack up their families in old jalopies and begin fleeing to what they hoped was the promised land of California.
Along with these major offensives on behalf of the unemployed, industry and agriculture, Roosevelt attacked on other fronts, often under a banner of clustered initials. Among the main ones:
TVA. The $145 million dam at Muscle Shoals, Ala., had originally been built during World War I to provide cheap power for the manufacture of explosives; it was then shut down while advocates of public and private power fought over it. In one of his Hundred Days measures, Roosevelt not only endorsed public power but proposed a seven-state organization in the South to produce cheap electricity, support the development of local manufacturing, increase navigable waters and control the flooding that regularly devastated the valley of the Tennessee River. By 1940 the 21 hydroelectric plants of the Tennessee Valley Authority were delivering 3.19 billion kilowatt hours of electricity at about half the average national rate and the TVA was playing a major part in the economic revival of the South. The spread of low-cost electricity was also the mission of the Rural Electrification Administration (REA), which loaned money at low interest (3%) to cooperative power systems. In seven years, the REA helped increase the number of farms supplied with electricity from 750,000 to 2.125 million (11% to 35% of the total).
SEC. Even before Roosevelt came to power, there was a widespread feeling that the crash of 1929 had been something other than an act of God, and the Senate Banking Committee set out to prove it. The hearings from 1932 to 1934 were a revelation. The banker J.P. Morgan, who was believed to be worth more than $100 million, testified that by fictitious sales of stock to his wife, he legally avoided paying any income taxes at all. National City Bank President Charles Mitchell admitted that the top officials of his bank had given themselves $2.4 million in interest-free loans to protect their margin accounts in National City's stocks. Of the $50 billion in new stocks issued during the 1920s, another congressional committee said, "fully half have proved to be worthless . . . fraudulent." And when Utilities King Samuel Insull carried thousands of investors into bankruptcy, he protested at the prospect of indictment: "What have I done that every banker and business magnate has not done in the course of business?"
What indeed? According to Roosevelt's Truth-in-Securities Act of 1933, every new stock issue had to be registered with the Federal Trade Commission and had to disclose "every important essential element" about what was being sold. The Securities Exchange Act of 1934 extended those rules to all stocks, demanded that every company's insiders disclose their holdings, authorized the Federal Reserve to set margin rates, and established a new Securities and Exchange Commission to regulate the market (its first chairman: Joseph P. Kennedy). Wall Street howled. "The exchange," said Harvard-educated, Morgan-trained Stock Exchange President Richard Whitney, who later spent three years in Sing Sing prison for embezzlement, "is a perfect institution."
FDIC. Among the saddest sights of the early Depression years were the lines of small depositors waiting for hours outside ruined banks in the hope of salvaging at least part of their savings. In 1932 a terrifying 1,456 banks collapsed. The Glass-Steagall Act of 1933 provided a federal guarantee of all deposits under $5,000. The American Bankers Association denounced the bill as "unsound, unscientific, unjust and dangerous," and even Roosevelt had his doubts, but the Federal Deposit Insurance Corp. cost little and soon cut bank failures by more than 90%.
Even more disastrous than lost savings were lost homes, and more than 250,000 Americans had to default on their mortgages in 1932. In the summer of 1933, the new Home Owners Loan Corp. began providing loans of up to $14,000 at 5% interest. By the end of Roosevelt's first term, it had made more than 1 million loans totaling $3 billion.
CCC. Before Harry Hopkins arrived on the scene, Roosevelt had a pet scheme of his own for the unemployed. An ardent conservationist, he wanted thousands of the jobless to work in the nation's parks and forests. His Civilian Conservation Corps prompted William Green, president of the American Federation of Labor, to protest that "it smacks of Fascism, of Hitlerism, of a form of Sovietism." By the middle of July 1933, however, more than 300,000 youths between 18 and 25 were at work under Army discipline in 1,300 CCC camps. Among other things, they helped plant more than 200 million trees to reforest 17 million acres in a "shelterbelt" that spanned the Middle West.
None of these programs would ultimately prove so important as the birth of Social Security. Old-age pensions were part of Roosevelt's plans from the start--before 1933 only eight states provided modest pensions based on need--but it took several years to resolve the complex arguments about how much to pay and how to finance the program. Considerable pressure came from the Townsend movement, the creation of Dr. Francis Townsend, a retired physician in California, whose yowl of protest began when he saw three old women sifting through garbage cans for scraps. Townsend wrote a letter to a newspaper demanding $150 a month for all old people, and that demand soon mushroomed into clubs, newspapers, protest meetings and the noisiest crusade of 1935. The Social Security Act that emerged from Congress that year provided payments of only $10 to $85 monthly, which were not to start until 1942, but the pensioners' desperate needs advanced that starting date to 1940.
Amid all these great projects, however, the case of A.L.A. Schechter Poultry Corp. vs. U.S. was working its way through the legal system. The four Schechter brothers, who ran a small kosher poultry business in Brooklyn, had been convicted of several violations of the NRA code, including the sale of diseased poultry. "If I'd known how much this appeal was going to cost," Joseph Schechter later complained of his $60,000 legal fees, "I probably would have gone to jail." But it was this tawdry case that inspired Chief Justice Charles Evans Hughes, stroking his white beard as he read the verdict to a packed courtroom, to strike down the entire NRA as unconstitutional.
The Supreme Court opinion, delivered in May of 1935, was unanimous--and withering. In voting for the NRA, said Hughes, Congress had delegated "virtually unfettered" powers to the Administration, and that was "utterly inconsistent with the constitutional prerogatives and duties of Congress." The NRA case was the most important of the dozens challenging New Deal legislation that had been filed in the courts, but more trouble lay ahead. The following January, by a vote of 6 to 3, the court struck down the whole AAA program to regulate agriculture. The fact that Congress felt there was "a situation of national concern" did not give it the right to "ignore any constitutional limits upon its own powers and usurp those reserved to the individual states." The Supreme Court eventually handed down 16 verdicts on major New Deal laws during Roosevelt's first term and ruled against the Administration in eleven of them.
Roosevelt was outraged. He denounced the conservative Justices' objections to New Deal programs as a relic of the "horse-and-buggy age." The idea that the will of both the President and the Congress could be thwarted by nine old men--one of the Justices was 80, five were in their 70s, none was under 60--inspired Roosevelt to begin planning retribution. Before that, however, he had to repair some of the damage. The labor safeguards in the NRA re-emerged in the National Labor Relations (Wagner) Act of 1935, and Congress passed a new version of the AAA as the Soil Conservation Act of 1936.
Roosevelt also had to win the mandate of the people once again. The Democrats had done well in the off-year election of 1934, adding nine seats to their House majority of 310 and nine to their Senate majority of 60. But the auguries for 1936 were ambiguous. Roosevelt could point to real gains in his first term: unemployment had been cut by 2 million since 1932, and the gross national product had increased by about 40%. Renominated by acclamation, he declared in a campaign speech that the "forces of selfishness and of lust for power" had met their match during his first term and would now meet "their master."
But Roosevelt's critics could retort that even after four years of expensive trial and error, there were still 10 million unemployed and no real recovery in sight. The Republican nominee, Governor Landon of Kansas, seemed at the time a strong candidate against the fraying New Dealers; even some conservative Democrats thought they must combat what they considered an ominous drift toward the left. (Former Presidential Nominee Al Smith accused the New Dealers of trying "to disguise themselves as Karl Marx or Lenin or any of the rest of that bunch.")
On the opposite side of the spectrum, Roosevelt confronted not only the small, vociferous Communist and Socialist parties but also a gaggle of zealots appealing to all the embittered victims who felt that the New Deal had failed them. The most dangerous and fascistic of these, in Roosevelt's eyes, was Huey Long, who had combined graft, violence and promises of "Every Man a King" to build a kind of populist police state in Louisiana. Long was already threatening to run for President when he was shot down in the late summer of 1935 by a man whose family he had ruined. Almost equally malign was a Roman Catholic priest, Father Charles Coughlin, whose ardent and often anti-Semitic broadcasts from his Shrine of the Little Flower in Royal Oak, Mich., brought him a vast following (he regularly received 80,000 letters a week). To overthrow Roosevelt, whom Coughlin denounced as "anti-God," the priest joined forces with Dr. Townsend, the pension crusader, and one of Long's nastier henchmen, the Rev. Gerald L.K. Smith, to launch the Union party. Their puppet nominee for the presidency: Populist Congressman William Lemke of North Dakota.
The result was, of course, the greatest landslide in more than a century, 523 electoral votes for Roosevelt to Landon's eight (Maine and Vermont). In crushing Landon by 27 million votes to 16 million and increasing the Democratic total by 5 million since 1932, F.D.R. built the force that came to be known as the Roosevelt coalition. To the solid South and the big-city machines, he had added an implausible combination of blacks and ethnic minorities, intellectuals and labor unions. Even Poultryman Schechter confessed that "the 16 votes in our family were cast in his favor." The hapless Lemke won only 890,000 votes and Communist Earl Browder a trifling 80,000. Alf Landon later remarked that the result reminded him of a tornado that swept away a man's barn and reduced his house to splinters. The man's wife found him laughing in the ruins and demanded to know what he was laughing at. Said he: "The completeness of it."
The moment of a man's greatest triumph may be the moment at which he fails to realize that his greatness lies behind him, and so it was with Roosevelt's New Deal. Both the innovation and the idealism that marked his first term faded during his second. This became a time of consolidation, of adjustments and repairs. The new measures were more practical, more limited, more hardheaded; things moved more slowly. And there was a new quality of vengeance through power politics.
Roosevelt had always been the total politician, immensely gifted in all the arts of power, combining public spirit with guile. Politicians tend to judge themselves by election returns, and the results of 1936 apparently convinced Roosevelt, never an exceptionally modest man, that he could do almost anything. He devised his vengeance on the Supreme Court in total secrecy; just two days after inviting the aged Justices to the White House for a formal dinner, he summoned his staff to work at 6:30 a.m. to start typing and distributing the Judicial Reform Act of 1937. This artful document alleged that the entire federal Judiciary was overburdened and falling behind in its work, so the President should have the right to name an extra judge to supplement anyone who refused to retire at 70. In practical terms, that meant increasing the Supreme Court to as many as 15 Justices.
What became known as the "court-packing scheme" aroused fierce resistance not only among conservatives but among many who revered the independence of the Judiciary. Influential Senators openly balked. Chief Justice Hughes sternly wrote to a Senate committee and demonstrated that the court was neither overburdened nor behind in its work. At the same time that Hughes defended his court, however, it began to shift its position. As usual, the Justices admitted no change, but a series of decisions now began to uphold key New Deal legislation, notably Social Security and the Wagner Act. Friends urged Roosevelt to accept his victory gracefully by dropping the court-packing bill, but the President had committed too much personal pride to the struggle. After months of rancorous debate, which dominated the politics of 1937, the Senate humiliatingly rejected Roosevelt's project.
Roosevelt's animosity now turned against the Senate. By the most favorable interpretation, the President wanted to remold the Democratic Party into a unified liberal movement, and he had to do it before his prospective retirement from the White House in 1940. Critics simply called it a "purge" of anyone who disagreed with him. The chief targets of Roosevelt's public criticisms were nine Senators, mostly from the South and Middle West.
The purge was as embarrassing a failure as the court-packing scheme. All nine Senators won re-election in 1938. Hardly less embarrassing was the fact that a recession in 1937-38, caused partly by Roosevelt's efforts to restrict Government spending, set back the recovery. Unemployment rose by 2 million within three months; steel production sank by three-quarters, auto production by one-half. For the first time since the great crash, the Republicans made a comeback, gaining seven seats in the Senate and 80 in the House. Just two years after the landslide of 1936, the New Deal's innovations were drawing to an end. The nation's new course, however, remained set. To keep it on that course, Roosevelt pushed through the Administrative Reorganization Act of 1939, which created the White House administrative staff, added to it the Budget Bureau and, in effect, gave birth to the presidential powerhouse of today.
The America of the New Deal era was still isolationist, justifiably preoccupied with its own enormous problems, but this was a condition that could not last. Adolf Hitler had also put the unemployed to work at building superhighways and other showy projects, but now his obsession was to acquire new territory. In 1938 came the Nazis' Anschluss of Austria; in 1938 Hitler browbeat the British and French into letting him seize the Sudentenland area of Czechoslovakia in exchange for a false promise of "peace in our time." In 1938 too the Japanese pushed southward across China and captured Canton.
The war that ignited Europe in 1939 took two years to reach America. By then, Roosevelt had won an unprecedented third term and become a national leader almost beyond politics. Though the war cost thousands of lives, it united the nation in a cause that seemed more just than any cause has seemed since then. In ways that were only half understood at the time, the war completed the New Deal. Government spending multiplied more than ninefold and ended unemployment as the WPA never had. It was wartime mobilization that rebuilt cities and industries, spurred black migration out of the rural South and created a gargantuan Government far beyond the dreams of the New Dealers.
Almost every American in his 40s or older remembers where he was on the April afternoon in 1945 when he heard that Roosevelt had died. John Morton Blum, now a historian at Yale, was then 23 and serving in the Pacific as a Navy lieutenant, executive officer of a patrol craft, PC 616. His small ship had just arrived at Tulagi in the Solomon Islands and had routinely asked for news. Thus came the message that Roosevelt was dead.
"We were incredulous," Blum recalls. "I stretched out my arms in the signal for R, meaning repeat. Then the message came again, that Roosevelt was dead. The ship's signalman turned to me and said, 'My God, Mr. Blum, who's President now?' "
That element of surprise now causes some criticism of Roosevelt, for the President's badly deteriorating health was kept secret from the world when he ran for a fourth term in 1944. Some critics ascribe to that a number of dangerous miscalculations during the war years, particularly the concessions that he and the also ailing special assistant Harry Hopkins made to the Soviets at Yalta.
To assess all these controversies of the Roosevelt years has by now become almost an industry, a large and well-organized effort to explain what really happened. The industry's headquarters is at Hyde Park, the first of the great presidential libraries, where more than 150 separate collections of New Deal documents and memoirs are measured not in pages but in linear feet. (One linear foot represents approximately 2,000 pages, and Roosevelt's presidential papers alone extend to 2,076 linear feet.)
Laureate of this industry is Pulitzer-prizewinning Historian Arthur Schlesinger Jr. of the City University of New York, whose three-volume Age of Roosevelt appeared between 1956 and 1960 and established the now prevalent view that Roosevelt was the savior of both capitalism and democracy. The American system had totally broken down, Schlesinger argued, and both conservatives and radicals were well on the way to convincing the world that there was no middle way between ideological extremes. Roosevelt proved otherwise. Said Schlesinger: "In the welter of confusion and ignorance, experiment corrected by compassion was the best answer."
But was the New Deal answer really successful? Did it work? Other scholarly experts almost uniformly praise and admire Roosevelt, but even the most sympathetic among them add a number of reservations. "The New Deal certainly did not get the country out of the Depression," says Columbia's William Leuchtenburg, author of Franklin D. Roosevelt and the New Deal. "As late as 1941, there were still 6 million unemployed, and it was really not until the war that the army of the jobless finally disappeared." "Some of the New Deal legislation was very hastily contrived," says Williams College's James MacGregor Burns, author of a two-volume Roosevelt biography. Duke's James David Barber, author of The Presidential Character, notes that Roosevelt "was not too open about his real intentions, particularly in the court-packing episode."
Though it has become common to focus on what Presidents do or fail to do, Frank Freidel of the University of Washington, whose monumental Franklin D. Roosevelt has reached the fourth out of eight volumes, emphasizes that Congress caused difficulties almost from the beginning. Says he: "Congress, as it is intended to be in the Constitution, was a very important tempering influence, and even in 1935 it required enormous efforts on Roosevelt's part to get what he wanted." Yale's Blum also charges Roosevelt with failure to end the Depression, and he puts the blame not only on "congressional impedance" but on general "economic ignorance." Says he: "Economists at that time really didn't know how to achieve recovery. You needed a Keynesian revolution, and this came only inadvertently with defense spending, which was far beyond anything the New Deal envisaged." Blum emphasizes another problem: Roosevelt was trying simultaneously to achieve recovery and reform. Says Blum: "There was a kind of friction between the aims of recovery and the aims of reform."
After all the criticisms, though, the bulk of expert opinion agrees that Roosevelt's New Deal changed American life substantially, changed it permanently and changed it for the better. While the major recovery programs like the NRA and AAA have faded into history, many of Roosevelt's reforms--Social Security, stock market regulation, minimum wage, insured bank deposits--are now taken for granted.
Apart from specific programs, Roosevelt represented three innovations in the basic public philosophy. One is that the Constitution's pledge to "promote the general welfare" gives the Federal Government not merely a right but a duty to intervene in all substantive aspects of economic life. The second is that this Government intervention should provide security against the age-old risks of bankruptcy, hunger, destitution. As Roosevelt once said, "The time has come in our civilization when a great many of these chances should be eliminated." The third is that the Government has a duty to promote a reasonably fair distribution not only of wealth but of power and status and what Roosevelt called simply "the good things of life."
Granted that the armed forces of World War II were as racially segregated as an Alabama bus and that WASP men governed all the centers of power, the New Deal nonetheless represented the first real recognition of the right of Jews, blacks and other minorities to take part in government. "On a very wide front and in the truest possible sense," Joseph Alsop writes in his new FDR: A Centenary Remembrance, "Franklin Delano Roosevelt included the excluded."
These Rooseveltian principles are under conservative attack today, and yet the traditions that began under Roosevelt are still so strong that almost every current effort to reduce Government spending on social welfare causes outcries (or occasionally hallelujahs) that ex-New Dealer Reagan is trying to dismantle the entire New Deal. Reagan denies that, but his explanation is slightly disingenuous. Though he switched parties in 1962, Reagan later explained: "I didn't desert my party. It deserted me. [Roosevelt's 1932 platform] called for a restoration of states' rights and a reduction in the national budget. You know what? I'm still for that." When Reagan began campaigning for the White House, though, he looked back on the New Deal and declared that "the panaceas that were offered didn't solve the problems." And while Roosevelt thought he was waging war against fascism, Reagan declared that the "government-directed economy" of Fascist Italy "was really the basis of the New Deal." ("A gross distortion of history," Schlesinger angrily retorted when Reagan repeated that charge last month.)
Reagan has a point, of course, in that Roosevelt did come to office as a cost cutter and budget balancer. More important, Reagan is justified in believing that the ambitious and sometimes prodigal heirs of the New Deal carried it far beyond anything that Roosevelt ever proposed. It was one of Roosevelt's beliefs, for example, that welfare should be a temporary measure, and that the recipients should be put to work, a view that is judged heartless when Reagan proclaims it today. It was not Roosevelt but Lyndon Johnson who first organized Government medical insurance, which now costs some $57 billion per year, more than eight times the average federal outlay during Roosevelt's first term. It was not Roosevelt but Richard Nixon who turned school lunches into a billion-dollar program and announced that "the moment is at hand to put an end to hunger in America for all time." It is even true that Roosevelt was in a very real sense a conservative, a conservator of traditional values and ways.
Reagan's argument suffers, however, from one considerable flaw: it implies that Roosevelt, the great innovator and experimenter, would still recommend the remedies of 1932 for the problems of 1982. That is an implausible prospect. Though Roosevelt might not have favored the swollen growth of Government intervention, regulation and spending, it seems likely that if he could return to survey the results of the Fair Deal, the New Frontier, and the Great Society, he would bestow on them that famous smile of satisfaction.
But what actually remains today of the original New Deal? Alexander Heard, 64, who is retiring soon as chancellor of Vanderbilt University, remembers working in the CCC as a youth, remembers it as a time when a new President "restored a sense of confidence and morale and hope--hope being the greatest of all." But what remains? "In a sense," says Heard, "what remains of the New Deal is the United States."
--By Otto Friedrich. Reported by Ruth Mehrtens Galvin/Boston and Hays Gorey/Washington
* Then a reporter for the Akron Beacon-Journal, McKenney later became celebrated for My Sister Eileen, the Broadway comedy hit of the 1940 season.
* Pioneers and cowboys used the term for their practice of braiding together scraps of leather when they had nothing else to do. In the 1930s, when New Deal foes began using the word for make-work projects, the Boy Scouts also took it as the name for their leather lanyards.
With reporting by Ruth Mehrtens Galvin, Hays Gorey
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