Millions stayed alive by living like animals. In the Pennsylvania countryside they were eating wild weed-roots and dandelions; in Kentucky they chewed violet tops, wild onions, forget-me-nots, wild lettuce, and weeds which heretofore had been left to grazing cattle. City mothers hung around docks, waiting for spoiled produce to be discarded and then fighting homeless dogs for possession of it. After the vegetables had been loaded on trucks they would run alongside, ready to snatch up anything that fell off. A cook in a midwestern hotel put a pail of leftovers in the alley outside the kitchen; immediately a dozen men loomed out of the darkness to fight over it. In Long Beach, California, a sixty-six-year-old physician named Francis Everett Townsend glanced out his window while shaving and saw, among a group of refuse barrels, “three haggard very old women,” as he later called them, “stooped with great age, bending over the barrels, clawing into the contents.” Whole families were seen plunging into refuse dumps, gnawing at bones and watermelon rinds; a Chicago widow always removed her glasses so she wouldn’t see the maggots. At night in New York Thomas Wolfe observed “the homeless men who prowled in the vicinity of restaurants, lifting the lids of garbage cans and searching around inside for morsels of rotten food.” He saw them “everywhere, and noticed how their numbers increased during the hard and desperate days of 1932.”
It was considered benevolent by well-to-do Americans that year to give your garbage to fellow countrymen who were famished. The Elks of Mount Kisco, New York, and the eating clubs of Princeton University instructed their servants to see that their leftovers reached the needy. The Brooklyn Eagle proposed a central depot where edible swill could be sent by charitable citizens and where the poor might apply for portions of it. In Oklahoma City John B. Nichlos, a gas company executive, worked out a plan under which restaurants, civic clubs, and hotel chefs would pack swill in “sanitary containers of five (5) gallons each,” to be “labeled ‘MEAT, BEANS, POTATOES, BREAD AND OTHER ITEMS.’” The Salvation Army would pick up the cans, the contents of which would then be distributed to jobless men who would first chop wood donated by—of all people—the farmers. “We expect a little trouble now and then from those who are not worthy of the support of the citizens,” the gas man wrote Secretary of the Army Hurley, “but we must contend with such cases in order to take care of those who are worthy.” Hurley thought it a marvelous idea, and urged the administration to adopt it. It was vetoed by the director of Hoover’s Emergency Committee for Employment on the ground that the gesture might be misunderstood.
It never seems to have occurred to Nichlos, the Eagle, the Princetonians and the Elks that more dramatic solutions might lie ahead. But already there were those who pondered the contrast between the well-fed rich and the starving multitude, and who thought they saw the dark shadow of things to come. Thomas Wolfe would talk to the tragic men in New York’s public toilets until he could not stand their anguish any more. Then he would mount the steps to the pavement twenty feet above and gaze out upon “the giant hackles of Manhattan shining coldly in the cruel brightness of the winter night. The Woolworth Building was not fifty yards away, and a little farther down were the silvery spires and needles of Wall Street, great fortresses of stone and steel that housed enormous banks. The blind injustice of this… seemed the most brutal part of the whole experience, for there… in the cold moonlight, only a few blocks away from this abyss of human wretchedness and misery, blazed the pinnacles of power where a large section of the entire world’s wealth was locked in mighty vaults.”
In adversity Americans have always looked for scapegoats, and by early 1932 other hunters, like Wolfe, were closing in on lower Manhattan. The prey there was fat and vulnerable. In the Twenties American financiers and industrialists had become national folk heroes. In vain had William Z. Ripley of Harvard warned President Coolidge that “prestidigitation, double-shuffling, honeyfugling, hornswoggling and skulduggery” were threatening the economy; Coolidge refused to be daunted by prophets of gloom and doom. For nine years, as Arthur Schlesinger Jr. later wrote, the government had treated business as though it had “discovered the philosopher’s stone which would transmute the uncertainties of the capitalist system into permanent prosperity.” Mellon had become known as “the greatest Secretary of the Treasury since Alexander Hamilton,” and Nation’s Business had reported that the American businessman was “the most influential person in the nation.” But now, three years after the Crash, children were singing:
Mellon pulled the whistle,
Hoover rang the bell,
Wall Street gave the signal,
And the country went to hell.
The high priests of finance weren’t listening. Their world remained insular, arrogant, and out of touch. In the Literary Digest they read of the Depression’s blessings: “People are growing more courteous in business, and often more reasonable at home, thoughtless women especially. Unappreciative wives who were indifferent to their husbands and neglected their homes have become tame and cautious.” A Republican candidate for governor of New Jersey had good news for the voters: “There is something about too much prosperity that ruins the moral fiber of the people.” A member of the Du Pont family was reported to have rejected a suggestion that he sponsor a Sunday afternoon program on the ground that “at three o’clock on Sunday afternoons everybody is playing polo,” and J. P. Morgan observed that if “you destroy the leisure class, you destroy civilization. By the leisure class, I mean the families who employ one servant—twenty-five or thirty million families.” He seemed startled when told that census figures showed there were fewer than two million servants in the entire country. The people were not surprised by his misinformation; by then, Walter Lippmann wrote, industrial and financial leaders had fallen “from one of the highest positions of influence and power that they have ever occupied in our history to one of the lowest.”
In 1932, 65 percent of American industry belonged to 600 corporations; 1 percent of the population owned 59 percent of the wealth. One man, Samuel Insull of Chicago, held 85 directorships, 65 board chairmanships, and 11 company presidencies. His utilities empire was a conglomerate of 150 companies, with 50,000 employees serving 3,250,000 customers. On New Year’s Day its securities were valued at over three billion dollars, and unemployed men warming themselves over scrap wood fires on the lower level of Wacker Drive looked up at the Insull offices far above and wondered aloud to reporters why the old man couldn’t help them.
He couldn’t because he had problems of his own. His pyramid of holding companies was collapsing, and thousands of Chicagoans—including a great many schoolteachers—were about to learn in horror that their Insull stock had dropped to 4 percent of its 1931 value. Insull scurried about trying to salvage something, protected day and night by thirty-six bodyguards, but in April his two investment trusts went into receivership. By June he had fled to Europe, sixty million dollars in debt; a Cook County grand jury indicted him. In Paris he craftily scheduled a press conference, sneaked out the back door to board a midnight express for Rome, and flew on to Athens. His lawyers had told him he would be safe there, because there were no extradition treaties between Greece and the United States. It was true then, but by early November the diplomats had signed one. Disguised as a woman, the fugitive chartered a boat for Turkey. The Turks turned him over to American authorities; he was brought back, tried—and found not guilty, because holding companies were not subject to regulation. “A holding company,” Will Rogers said dryly, “is a thing where you hand an accomplice the goods while the policeman searches you.”
Rogers also said, “There’s a lot of things these old boys have done that are within the law, but it’s so near the edge you couldn’t slip a razor blade between their acts and a prosecution.” Looking for evidence, the Democratic Congress was turning over stones up and down Wall Street, and some remarkable specimens were crawling out. Banker Albert H. Wiggin had sold the stock of his own bank (the Chase) short and then lied about it. Because of the depressed economy, Charles
E. Mitchell of the National City Bank had broken an agreement to merge with the Corn Exchange Bank; at the same time he was tormenting his own clerks and tellers by demanding that they keep up their installment payments on National City stock bought at pre-Crash prices ($200 a share, now down to $40)—and loaning $2,400,000 of the stockholders’ money to bank officers, with neither collateral nor interest, for market speculation. Mitchell had avoided federal income tax by selling securities to a member of his family at a loss and later buying them back. Through similar loopholes J. P. Morgan had paid no income tax in 1929, 1930, or 1931. Colonel Robert R. McCormick of the Chicago Tribune, sent the government a token $1,500 a year while writing long editorials urging his subscribers to pay their taxes in full.
As Secretary of the Treasury, Andrew Mellon had also hounded people who were reluctant to meet their tax obligations—and had similarly applied a different standard to himself. The country was astonished to learn that at Mellon’s request his commissioner of internal revenue had prepared a memorandum for him describing twelve ways to evade federal taxes. A Treasury Department tax expert had then been assigned to work on Mellon’s personal returns. Five of the commissioner’s suggestions had been followed, including the recording of fictitious gifts and losses to reduce tax liability. These disclosures aroused Representative Wright Patman of Texas, who on January 25, 1932, asked the House to impeach Secretary Mellon “for high crimes and misdemeanors,” but there were those who still regarded Mellon with reverence. To them the publication of these singular facts was a form of lèse majesté; one admirer, Mellon’s lawyer, sharply rebuked a New York Times reporter for “providing ammunition for radicals.”
Like the Insull machinations, tax dodges were legal. But despite the tax legislation of the time, some men had crossed into criminal territory. Ivar Kreuger, “the Swedish Match King,” was a Grand Officer of the French Legion of Honor, an adviser to President Hoover on European aspects of the Depression, and a man of such probity that in 1928, when the Boston firm of Lee, Higginson prepared to issue millions on Kreuger securities, its officers had agreed with the Match King that an audit of his books was unnecessary. On March 12, 1932, he bought a large pistol, locked the door of his luxury apartment in Paris, and killed himself. After all the moving eulogies had been delivered, it turned out that the king had been a common thief, guilty of swindling, fraud, and forging Italian government bonds. Among other things he had stolen over three hundred million dollars from trusting investors.
Every week brought fresh shocks. Joseph Wright Harriman, a banker (or “bankster,” as Time had it) and a cousin of Averell Harriman, left his failing bank and took refuge in a Manhattan nursing home. As the law closed in, he escaped to a Long Island inn, registering under an alias. The Nassau County police found him anyhow. Harriman tried to drive a butcher’s knife between his ribs, failed at that, too, and served two years in prison for falsifying his bank’s books and misapplying its funds. Saul Singer, executive vice president of the Bank of the United States—the largest American bank ever to fail—went to the penitentiary on the same charges, and later Howard Hopson, president of the Associated Gas and Electric Company and responsible to 188,576 investors, was captured in Washington after a wild taxicab chase and found guilty on seventeen counts of mail fraud. “Confidence in the erstwhile leadership of this country is gone,” George Sokolsky wrote. Representative Fiorello La Guardia said of a stock manipulation case, “Sordid as these facts may seem, I believe the same sort of story could be told regarding every stock in which there was a pool,” and Joseph P. Kennedy, himself a market tycoon, concluded, “The belief that those in control of the corporate life of America were motivated by honesty and ideals of honorable conduct” had been “completely shattered.”
Viewed in this light, the conduct of Hoover’s Reconstruction Finance Corporation can only be called a major political blunder. In 1932 the congressional leadership finally pushed through an act authorizing the RFC to advance the states 300 million dollars for unemployment relief. By the end of the year only 30 million had actually reached the states, one-third of the amount Dawes had loaned to his Central Republic Bank and Trust Company of Chicago. It was perhaps symbolic that when the President telephoned former Senator Atlee Pomerene of Ohio to appoint him Dawes’s successor, Pomerene had exactly ninety-eight cents in his pocket, and that on his way to be sworn in, a dozen panhandlers approached him. As public policy the RFC was broke. Millions were calling it “a breadline for big business,” which was exactly what it had become.
But such phrases, like the demand for Mellon’s head, provoked violent reactions from men like General MacArthur, who believed that the national security was endangered. The well-to-do were becoming genuinely afraid of the hungry, and that fear does much to explain a sudden attack upon one Democratic leader by a former friend in the spring of 1932. Alfred E. Smith, born in an East Side tenement, had become a checker in the Fulton Fish Market at the age of fifteen and had risen through Tammany’s ranks to become governor of New York. In 1928, during Al Smith’s unsuccessful campaign against Hoover, Franklin D. Roosevelt had been elected to succeed him in Albany. “After I left Albany,” Smith said later, “after living in a mansion for six years, I couldn’t see First Avenue very well, so I went over to Fifth Avenue. I signed a lease for $10,000 a year.” Smith had been riding around Manhattan in a chauffeured limousine since the Crash, a director of banks and insurance companies, a crony of tycoons, the president of the Empire State Building. He had found a new level, a higher level, and he liked it.
Then, on Thursday, April 7, 1932, the nation heard a new voice over a nationwide hookup—the warm, vibrant, confident voice of Franklin Roosevelt. The governor denounced the Hoover administration for relieving the big banks and corporations. He mocked “shallow thinkers” who knew no way to help the farmer. “These unhappy times,” he said, “call for the building of plans that put their faith once more in the forgotten man at the bottom of the economic pyramid.”
Smith exploded at a Jefferson Day dinner. Flushed and hoarse, he said, “This country is sick and tired of listening to political campaign orators who tell us what is the matter with us,” and that “this is no time for demagogues. I will take off my coat and vest and fight to the end any man who persists in any demagogic appeal to the masses of the working people of this country to destroy themselves by setting class against class and rich against poor!”
In retrospect Smith’s outburst appears extraordinary both in its virulence and in the mildness of the sentiment which had triggered it. The governor had, after all, merely suggested that something be done for the starving poor.
***
The Roosevelt for President campaign was then being waged from an inconspicuous office at 331 Madison Avenue in New York City, and it was not going well. Since his smashing gubernatorial victory FDR had been the Democratic front runner, but as the convention approached he was losing ground rapidly. His most devoted subordinate was sixty-one-year-old Louis McHenry Howe, an uncomely little ex-newspaperman who liked to answer the telephone by saying, “This is the medieval gnome speaking.” Many out-of-state politicians were repelled by him. But then, there wasn’t much about the Roosevelt candidacy that critics found attractive. On the right, Bernard Baruch called the governor “wish-washy,” Boss Frank Hague of Jersey City said he had “no chance of winning in November,” and the Scripps-Howard newspapers, coming out for Al Smith, said, “In Franklin Roosevelt we have another Hoover.”
He was the only leader in either party who had suggested progressive solutions for the national dilemma, yet the liberal abuse of him was even harsher. Heywood Broun, Elmer Davis, and Walter Lippmann scorned him. The New Republic dismissed him as “not a man of great intellectual force or supreme moral stamina.” In an open letter to Roosevelt on May 11, editor Oswald Garrison Villard of the Nation wrote: “You have deeply stabbed the faith that is within Americans that an emergency brings a leader, that our institutions are to survive.” Riffling through pr
econvention issues of the Nation one finds such anti-Roosevelt comments as “…there is small hope for better things in his candidacy”… “his candidacy arouses so little real enthusiasm”… “no evidence whatever that people are turning to him as a leader”… “weakness and readiness to compromise”… “To put into the Presidency at this hour another weak man in the place of Herbert Hoover would be all the more disastrous because of the mistaken idea that Franklin D. Roosevelt is really a liberal,” and, picking up the Scripps-Howard refrain, “A Hoover, perhaps, by any other name is still a Hoover.”
To win the Democratic nomination under the convention rules of 1932, a candidate needed two-thirds of the votes. Smith quickly became the leader of the coalition opposing FDR; both men entered the Massachusetts primary late in April, and Smith gave Roosevelt a beating, capturing all of the state’s thirty-six convention votes. The popular margin was three to one. The following month red-baiting John Nance Garner, Speaker of the House and Hearst’s candidate, carried the California primary by 60,000 votes, with FDR second and Smith a strong third. There was only one way Roosevelt could win the convention now, and that was by dealing with the bosses. Late in June the Democrats gathered in Chicago—where two weeks earlier the Republicans had renominated Hoover, after a delegate who wanted to nominate Coolidge had been muscled from the hall by Chicago policemen—and Howe began spinning his web from suite 1502 in the Congress Hotel. “What’s your price?” he asked former Governor Harry Byrd of Virginia. Byrd said he wanted to be a U.S. Senator. “Is that your price?” the medieval gnome demanded. Byrd said that was it. Virginia already had two Democratic senators, but Howe said, “Very well. We’ll put either Glass or Swanson in Franklin’s cabinet.” Politicians in those days were very direct.
The Glory and the Dream: A Narrative History of America, 1932-1972 Page 7