The scheme Roosevelt devised—a seven-member advisory board to be known as the National Defense Advisory Commission (NDAC)—was ingenious. Roosevelt’s clever formula was to combine businessmen and New Dealers in equal measure, hopeful that the businessmen would thereby strengthen the faith of the right, while the New Dealers would keep the liberals in line.
For the critical job of directing the actual production process itself, Roosevelt chose millionaire businessman William Knudsen, head of General Motors, a classic example of the self-made man. Born in Copenhagen, Knudsen had come to America at the age of twenty, barely speaking a word of English. He had begun his career in the auto industry as an installer of assembly plants and then moved up the organization to become Henry Ford’s production manager. A dispute with Ford led to his becoming vice-president of General Motors, with the task of building a Chevrolet to outsell Ford’s Model T. He did this so successfully that he was appointed president of General Motors in 1937, commanding a salary of more than $350,000 a year.
“To many a citizen tired of New Deal-Business baiting,” Time observed, “Knudsen was a symbol of the hope that business and the New Deal would work together.” For his part, Knudsen was thrilled at the chance to serve the country that had served him so well. “I am most happy,” he wrote the president after his appointment, “you’ve made it possible for me to show my gratitude to my country for the opportunity it has given me to acquire home, family and happiness in abundant measure.”
In addition to Knudsen, Roosevelt brought in Edward Stettinius, chairman of U.S. Steel, to supervise the production and delivery of raw materials, and Ralph Budd, chairman of the Chicago, Burlington & Quincy, to handle transportation. For seven years, Washington observer Constance Green recorded, these men had formed the core of resistance to the New Deal; “now the captains of industry whom General Hugh Johnson in early NRA days had called ‘Corporals of Disaster,’ were again honored in Washington.” Before the end of the summer, hundreds of businessmen found themselves at the very center of government action, and once they were there, their attitudes toward government control underwent a remarkable change.
Responding to the president’s olive branch, the National Association of Manufacturers took out a full-page advertisement in June, pledging its knowledge, skill, and resources to the task of national defense, calling for national unity in the midst of crisis. “In the field of national defense,” well-informed sources had been telling business all along, “Roosevelt is a conservative.” Now, with Roosevelt’s stress on cooperation rather than coercion, business began to believe that maybe this was so, that perhaps, if they put aside their hatred for the regime in power, there just might be “a little something in this saving the world for democracy again.”
But, of course, Roosevelt never moved in only one direction at a time. The complex problem he faced was how to reawaken support on the right without instilling anger and discontent on the left. To this end, he gave the New Dealers four of the seven appointments. To handle labor, he brought in labor leader Sidney Hillman. A short, spare man who peered through bifocals and spoke with a marked Lithuanian accent, Hillman had come to America at twenty, the same age as Knudsen, landing in Chicago. He had become a cutter of men’s garments at a time when conditions in the clothing industry were intolerable. Leading a revolt among the tailors, Hillman had created the Amalgamated Clothing Workers of America, and then, from the strength of this base, had become John Lewis right-hand man in building the CIO.
Even more reassuring to the left, the President put Leon Henderson, a noisy New Dealer, in charge of prices. People said of the overweight Henderson that he looked like a Sunday-supplement caricature of a radical, with his wrinkled suits, his curly hair, and his nickel cigar stuck in the corner of his mouth. Born in Millville, New Jersey, and educated at Swarthmore on an athletic scholarship, Henderson had come to Washington to work for the Works Progress Administration. After moving on from there to the Securities and Exchange Commission, he had become a leader in the New Deal attack on business abuse.
To round out this strange amalgam of a commission, Roosevelt brought in University of North Carolina Dean Harriet Elliott to represent consumers, and Federal Reserve Board member Chester Davis to supervise farm products.
Within the NDAC in the months ahead, a fierce battle would rage between the businessmen, who argued that production was best served by industries working freely under the profit system, and the liberals, who believed that a democracy at war should forge wholly new connections between government, business, and labor, moving more in the direction of socialism. “If you are going to war in a capitalist country,” Henry Stimson wrote, “you have to let business make money out of the process or business won’t work.” To the contrary, historian Bruce Catton argued, suppose that liberal bureaucrats instead of industrialists were running the program; perhaps then an entirely different kind of war effort would emerge, one that vested power and responsibility more directly in the workers themselves.
“The conflict was enduring,” New Deal economist John Kenneth Galbraith recalled. “My memory of wartime Washington by no means excludes the menace of Hitler and the Japanese. But almost as poignantly it is of the New Dealers’ battle with the reluctant business spokesman . . . . At times it seemed that our war with business took precedence over the war in Europe and Asia. There were weeks when Hitler scarcely entered our minds compared with the business types in Washington.”
No sooner had the president announced his seven-member advisory commission than the conservative press began demanding that it be given real power and that Knudsen be appointed its “czar.” “In private life,” the Kennebunk Journal observed, “even a peanut stand has to have one boss.” It was all voiced in the guise of needing to centralize power for efficiency, but, as liberal commentators pointed out, “the cry for a czar sprang from the desire of big business to take full control of defense and to use defense for its own purposes.” In other words, the New Republic wryly observed, “let democratic processes abdicate in favor of a business dictatorship. If the lack of a chairman becomes a real problem,” the New Republic continued, then Leon Henderson “would be the excellent choice.”
But the president was not about to abdicate his own leadership of the defense effort to anyone—businessman or New Dealer, conservative or liberal. Spreading power among contending forces allowed Roosevelt to retain undisputed authority in his own hands. When, at the end of the first meeting of the NDAC, Knudsen asked, “Who is my boss?” the president instantly replied, “I guess I am.” This reply, more than anything, Budget Director Harold Smith recorded in his diary, “helped to clear the atmosphere.” “So long as Roosevelt held the final power over defense,” I. F. Stone wrote, “he remained an obstacle to big business attempts to use defense as an excuse for repealing the social reform legislation of the New Deal and weakening the labor movement.”
Yet, by refusing to grant Knudsen power proportionate to his responsibility, Roosevelt hobbled the mobilization effort in 1940. The task Roosevelt set for the NDAC was nothing less than the conversion of a peacetime economy to war production, but Knudsen was never given the tools to operate effectively. Roosevelt was being truthful and not truthful at the same time. While claiming that the American people would do anything asked of them provided they fully understood what they were being asked, Roosevelt was afraid of asking too much. Despite the swelling demand for preparedness, he did not trust the people’s willingness at this juncture to make sacrifices in order to speed up the mobilization process.
On the contrary, at his press conference announcing the NDAC, he deliberately sought to assure the public that consumer goods would not be restricted. “I think people should realize,” he said in answer to a question by Doris Fleeson, “that we are not going to upset, any more than we have to, a great many of the normal processes of life . . . . This delightful young lady will not have to forego cosmetics, lipsticks, ice cream sodas . . . . In other words, we do not want to upset th
e normal trend of things any more than we possibly can help.”
• • •
Even as Roosevelt nursed the relationship between business and government along, he understood clearly that the marriage was “an uneasy one, with both parties meditating extensive infidelities.” By playing the role of matchmaker, he risked incurring displeasure from both sides, but since the whole basis of the nation’s war-production program depended on cooperation by industry, he was willing to assume that risk.
On Sunday evening, May 26, 1940, Roosevelt carried his appeal for the new partnership to the American people in a special “fireside chat.” During his seven years in the White House, Roosevelt had delivered thirteen fireside chats. The first four talks, in the spring and summer of 1933, had focused on the banking crisis, the currency situation, the New Deal program, and the National Recovery Act. Averaging fewer than two chats a year since then, on the belief that less is more, he had delivered his last nationwide radio address on September 3, 1939, on the outbreak of the European war.
The term “fireside chat” had been inspired by Press Secretary Steve Early’s statement that the president liked to think of the audience as being “a few people around his fireside.” The public could then picture the president relaxing in his study in front of the fireplace and imagine that they were sitting beside him. “You felt he was talking to you,” correspondent Richard Strout recalled, “not to 50 million others but to you personally.”
In talking on the radio, Roosevelt used simple words, concrete examples, and everyday analogies to make his points. In contrast to the dramatic oratory suitable when speaking to a crowd, Rosenman recalled, “he looked for words that he would use in an informal conversation with one or two of his friends,” words the average American could easily understand. Each speech was the product of extensive preparation, having gone through perhaps a dozen drafts before the president was satisfied that he had the talk he wanted.
Roosevelt also paid careful attention to his delivery and to the sound of his voice. When he discovered that the separation between his front two lower teeth was producing a slight whistle on the air, he had a removable bridge made, which he kept in his bedroom in a heart-shaped silver box. On more than one occasion, White House secretary Grace Tully recalled, he forgot to bring the box with him, and “there was a last minute dash” to retrieve the false tooth from his bedroom.
On the evening of this Sunday’s broadcast, the president assembled his usual group for cocktails and dinner. Missy was there, along with Hopkins and Rosenman. It was not a relaxed occasion. “There was no levity,” Rosenman recalled. “There was no small talk.” As the president mechanically mixed drinks, his mind “thousands of miles away,” he was reading a series of the most recent dispatches from Europe, all of them depicting a complete rout of the Allied armies. “All bad, all bad,” he muttered as he read one report after another.
“The President was worried,” Rosenman observed. Everyone was worried. “It was a dejected dinner group.” But once the president settled himself in the Diplomatic Cloak Room on the first floor, sitting behind a desk crowded with three microphones, a reading light, and a pitcher of water, his old spirit returned. As the hour of ten o’clock approached, the peak listening hour, he put out his cigarette, arranged his reading copy, and then, on signal, began to speak.
In his mind’s eye, Frances Perkins observed, he could actually see the people gathered in their kitchen, their living rooms, their parlors. “He was conscious of their faces and hands, their clothes and homes . . . . As he talked his head would nod and his hands would move in simple, natural, comfortable gestures. His face would smile and light up as though he were actually sitting on the front porch or in the parlor with them. People felt this, and it bound them to him in affection.”
“My friends,” he began, “at this moment of sadness throughout most of the world I want to talk with you about a number of subjects that directly affect the future of the U.S.” He then went on to assure the nation that whatever needed to be done to keep the U.S. secure would be done. We shall build our defenses, he said, “to whatever heights the future may require. We shall build them swiftly, as the methods of warfare swiftly change.
“It is whispered by some,” the familiar voice continued, “that only by abandoning our freedom, our ideals, our way of life, can we build our defenses adequately, can we match the strength of the aggressors . . . . I do not share these fears.”
On the contrary, though fascism had a tremendous head start in mobilizing for war, Roosevelt had no doubt that American democracy, with its free-enterprise system and its reservoir of mass energy, would win the struggle in the long run. As long as a new relationship between business and government could be forged, success was assured.
Reaching first to the business community, Roosevelt extended an extraordinary promise of governmental cooperation and support. “I know that private business cannot be expected to make all of the capital investments required for expansion of plants and factories and personnel which this program calls for at once. It would be unfair to expect industrial corporations or their investors to do this, when there is a chance that a change in international affairs may stop or curtail orders a year or two hence. Therefore, the Government of the United States stands ready to advance the necessary money to help provide for the enlargement of factories, of necessary workers, the development of new sources of supply for the hundreds of raw materials required, the development of quick mass transportation of supplies. And the details of this are now being worked out in Washington, day and night.”
Indeed, even as Roosevelt spoke, officials in the War Department were drafting legislation that would sanction a new “cost plus fixed fee” contract which would allow the government to defray all costs essential to the execution of defense contracts and guarantee the contractor a profit through a fixed fee determined in advance. In other words, the government would assume primary financial responsibility for the mobilization process. At the same time, legislation was being drafted to permit the government to make advance payments of up to 30 percent of the contract price, and to allow defense contracts to be let without the cumbersome procedure of lowest bids. Where private capital was unable to finance expansion because the facilities involved had no demand in peacetime—powder plants, high explosives, bombs—the government would be authorized to construct and operate the plants on its own.
After reaching out to business, Roosevelt turned his attention to his basic constituency—the people at large. “We must make sure in all that we do that there be no breakdown or cancellation of any of the great social gains which we have made in these past years. We have carried on an offensive on a broad front against social and economic inequalities, against abuses which had made our society weak. That offensive should not now be broken down by the pincers movement of those who would use the present needs of physical military defense to destroy it.”
There was nothing in the present emergency, he went on, to justify lowering the standards of employment, reducing the minimum wage, making workers toil longer hours without due compensation, or breaking down the old-age pensions. Though businessmen were already arguing for a suspension of New Deal regulations that bore on labor, working conditions, and minimum wages on the grounds that such legislation restricted speedy mobilization, Roosevelt took the opposite tack. “While our navy and our airplanes and our guns may be our first lines of defense, it is still clear that way down at the bottom, underlying them all, giving them their strength, sustenance and power, are the spirit and morale of a free people.”
When the president reached this part of his speech, Eleanor, listening from the living room of her Greenwich Village apartment, must have breathed a sigh of relief. She trusted that in her husband’s heart he intended, even in the face of war, to preserve the social and economic reforms of the New Deal, but she worried that all the businessmen now swarming around the White House would demand an end to the hated New Deal as the price for their support.
Over the years, Eleanor had come to a distrust of business far deeper than her husband’s equivocal attitude. Believing that business inevitably placed priority on the bottom line, she regularly excoriated the blindness of the let-business-alone people whose philosophy was “Take from the bottom, add to the top.” “One can’t be sure of any corporation,” she once wrote, “if a huge sum of money should be placed before it.”
When the president’s fireside chat came to an end, Eleanor called Joe Lash, who announced that he had liked the last part of the speech, about safeguarding the social advances, best. Chuckling appreciatively, she said she, too, was “glad [the president] had said it—so that it was definitely there.”
But the underlying tone of the speech reflected a subtle shift in the president’s attitude toward business—a new willingness on the part of government to meet business on its own terms. Beyond the agreement to permit companies to expand their plants at the government’s expense, Roosevelt was also considering a variety of alternative measures urged upon him by the business community, including legislation to remove the profit limitations on defense contracts, and new rulings to ease the rigid requirements of antitrust laws.
As each of these issues came to the fore in the months ahead, Eleanor found herself on the side of the New Dealers against her husband. Though she appreciated the president’s need to consolidate forces within the United States in order to win the war, she insisted that the war would not be worth winning if the old order of things prevailed.
CHAPTER 3
“BACK TO THE HUDSON”
As the days of May wound to a close, Franklin Roosevelt was faced with one of the most controversial decisions of his presidency: a choice between rearmament at home and aid to the Allies. With France on the verge of defeat, United States military leaders were unanimous in urging Roosevelt to stop supplying the Allies and to focus instead on rearming at home. If the U.S. should later be drawn into a conflict without sufficient munitions on hand, General Marshall warned, “the War Department would naturally and rightfully be subject to the most serious adverse criticism.” From London, Ambassador Joseph Kennedy weighed in with a similar analysis, saying it seemed to him that the struggle for England and France was hopeless and “if we had to fight to protect our lives we would do better to fight in our own backyard.”
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