Infuse a sense of shared purpose and direction.
As befitted this grave moment of communal bonding, Roosevelt’s language was perfectly pitched to the occasion, elevated and religious, yet without affectation. At the center of his speech, he called for a new contract between the leader and the people, a contract built upon the recognition of our dependence on one another. We must move forward “as a trained and loyal army willing to sacrifice” for the common good, displaying “a unity of duty hitherto evoked only in time of armed strife.” He considered his election by the people their gift to him; in return, he would work to fulfill their request “for discipline and direction under leadership.” And in the spirit of that bequest, he pledged, “On my part and yours we face our common difficulties.”
Foremost, he understood that “the Nation asks for action, and action now.” Accordingly, he promised that he would put people back to work, provide a sound currency, prevent foreclosures of homes and farms, and “put an end to speculation with other people’s money.” As ever, immediately beneath the skin of vision lay the sinew and bone of pragmatic action.
Tell people what they can expect and what is expected of them.
He told the country he was prepared to recommend to Congress a series of measures that “a stricken Nation” required. If the members should fail to respond “to the unprecedented need for undelayed action,” however, he would ask Congress “for the one remaining instrument to meet the crisis—broad Executive authority 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.” Here he harked back to the tradition of Abraham Lincoln, who issued the Emancipation Proclamation as an executive order based on his powers as commander in chief, and to Theodore Roosevelt who saw himself as “steward of the people,” an office giving him the warrant to do whatever the people needed unless expressly forbidden by the Constitution or the laws. This was no dictator or Messiah holding forth. Franklin Roosevelt spoke in the name of the people for a resurgence of the strength of democracy, for a constitutional system capable of meeting “every stress” without losing its essential form.
To emphasize that each of his cabinet appointees was part of an ensemble, he gathered them together at the White House that evening—nine men and one woman—to be sworn in by Supreme Court justice Benjamin Cardozo. “Never before has the Cabinet been sworn in at the same time and in the same place and by the same official administering the oaths,” the New York Times observed. Postmaster General James Farley would remember the scene in detail: “The new President sat at his desk, a beaming smile on his face, and read out one by one the name of each member of his official family.” After each member was sworn in, he extended an exuberant handshake and handed over the commission. “This is a strictly family party,” he said when the communal oath-taking was completed. He trusted that they “would all be able to pull together without friction and to work shoulder to shoulder for the common good and the best interests of the nation.” With this “informal little touch,” Farley recalled, “the Chief Executive had successfully converted what is usually a stiff and pompous ceremonial into a friendly, happy occasion.”
The day’s work was not yet done, however. By that evening, Roosevelt had reached two significant decisions. If a constitutional method could be discovered for “obtaining jurisdiction over the entire banking system of the Nation,” he would, as his first act, declare a uniform shutdown of the banks, ironically called “a bank holiday.” He asked his attorney general and treasury secretary to be ready the next day at the first formal cabinet meeting “to outline a constitutional method of closing all banks.” With this power in hand, he would then convene a special session of Congress both to validate his action and to craft a legislative plan for reopening banks “in an orderly manner,” depending on their degree of solvency. There would be no sleep that night for the members of Roosevelt’s team.
In a way that defies all probability and logic, this man who had arduously rebuilt his own body and regained a spirit of confident optimism was chosen to rebuild the entire body politic and endeavor to resuscitate its spirit. That such a man was suited for such a task at such a time informed his leadership with something ineffable, something approaching enchantment. That magic of leadership was contagious, a young lawyer who had joined the administration remembered, as if “the air suddenly changed, the wind blew through corridors.” A half a million letters of encouragement and support were on their way to the White House. “It seemed to give the people, as well as myself hope,” one citizen wrote, “a new hold on life.” This atmospheric change, “the sense that life was resuming,” was reiterated in headlines and commentary across the country:
THE ERA OF INACTION HAS COME TO AN END.
THE GOVERNMENT STILL LIVES.
PERHAPS A LEADER HAS COME!
Lead by example.
Franklin Roosevelt’s compelling and authentic performance on Day One had been decades in the making. The young boy who had concealed an ugly gash on his forehead beneath his cap so as not to worry his ailing father, the polio victim who conveyed relentless good cheer to shield his family, had fashioned no mere mask but an outward demeanor of serenity, confidence, and relaxation, however grave the maelstrom that encircled him.
Because strenuous thought and anxiety were not etched into Roosevelt’s features, as with Abraham Lincoln, people confused the projected surface for the interior. “How does your husband think?” reporter John Gunther asked Eleanor Roosevelt. “My dear Mr. Gunther, the President never thinks. He decides.” Yet, the picture of Roosevelt as a prodigy, a natural, a purely instinctive leader belies the long periods of hard thought and preparation that went into everything he said or did. “Nobody knows how that man worked,” Eleanor’s friend Marion Dickerman had said after watching him struggle for hours in his library rehearsing the short distance he would have to traverse in order to reach the stage at the Democratic National Convention for his first public speech after having contracted polio. “I never saw a man who worked harder,” Sam Rosenman said of Roosevelt during his years as governor, recalling the long sessions at Hyde Park when he would shoot questions at a rapid clip at experts in various fields, absorbing vast stores of information, deepening his knowledge of every policy area.
“The remarkable thing about him,” California senator Hiram Johnson observed of Franklin Roosevelt, “was his readiness to assume responsibility and his taking that responsibility with a smile.” If the new president had long since learned to make himself appear confident in order to become confident, might not the characteristic uplifted tilt of his head, the sparkle of his eye, his dazzling smile, and his assured, calm voice soothe and embolden the fragile nerves of the country at large? In a time of ubiquitous loss and uncertainty, such a halcyon projection was no small gift to the people of America.
Forge a team aligned with action and change.
That Franklin Roosevelt had assembled no team of rivals was abundantly clear when his cabinet held its first formal meeting on Sunday afternoon. Without doubt and by design, the president was the patriarch of this official family. Where, critics asked, were the “big” men, the luminaries with familiar names and large reputations, the likely presidential possibilities? On first blush, it seemed as if the members had been selected “on the basis of loyalty from among those who had supported him for the nomination”; most of them were friends he had worked with over the years.
On closer inspection, the pattern behind Roosevelt’s cabinet emerges. The obvious cabinet choices, the persons of distinction in the Democratic Party, were affiliated with the old order, “set in party lines, set against change.” In the face of worsening crisis, they had tread water too long, mired in orthodoxy, waiting for the economic down cycle to peter out and the wheel to turn. The family team Roosevelt needed must be open to whatever shifts and exigencies the future might bring.
However various the geographic and political composition of the cabinet, they share
d a common trait. Whether Democrats or Republicans, liberals or conservatives, easterners or westerners, they manifested a decided bias for action, an allegiance to whatever might be deemed necessary to get the country out of its misery. Through this “gallery of associates,” Roosevelt hoped to introduce “a new mind into the government,” a new adventurous spirit. And unquestionably, he was the “boss on this adventure.”
Slated for attorney general until his sudden death from a heart attack on his way to the inauguration was Montana’s Thomas Walsh, the liberal crusader who had exposed the Teapot Dome scandal. Connecticut lawyer Homer Cummings, strongly in favor of federal relief for the unemployed, took his place. For Treasury, Roosevelt selected Republican businessman William Woodin, a fellow trustee of the Warm Springs Foundation, a man of teeming energy and possessed of an unusually fertile mind. To fill Interior and Agriculture, he chose two progressive Republicans—Harold Ickes and Henry Wallace.
For labor secretary he picked liberal Democrat Frances Perkins, his industrial commissioner in New York, whose positive, innovative spirit, intelligence, and work ethic he had witnessed firsthand during his two terms as New York’s governor. When first approached, Perkins hesitated: “Labor had always had, and would expect to have, one of its own people as Secretary.” Roosevelt replied that “it was time to consider all working people, organized and unorganized.” So Perkins became the first female cabinet officer in history, allowing Roosevelt to break yet another convention.
The question arose: What should she be called? Was there a female title corresponding to Mr. Secretary? Robert’s Rules of Order suggested “Madam Secretary,” which was fine with Perkins, although she cringed when reporters occasionally referred to her as “The Madam.” Within the cabinet, Perkins happily recounted, she never experienced “any suggestion of a patronizing note,” though at one point when the secretary of the navy was about to tell a story, he held back, wondering if it were appropriate for a lady to hear. “Go on,” said the president, “she’s dying to hear it.”
Create a gathering pause, a window of time.
At the first formal cabinet meeting that Sunday afternoon, Perkins recalled, “the President outlined, more coherently than I had heard it outlined before, just what this banking crisis was and what the legal problems involved were.” Turning to his attorney general (who had spent the entire night searching for a constitutional method that would allow the federal government to take over the banks), Roosevelt was delighted to hear that an obscure 1917 precedent had been unearthed, authorizing the president to investigate and regulate hoarding of currency. Upon this sliver of authority, the New York Times observed, was built “the most drastic” peacetime exercise of presidential power “ever taken.” Without a note of dissent, the cabinet fell in line and work began at once on a presidential proclamation establishing a four-day bank holiday that would eventually stretch into a week.
The holiday provided a window of time, “an anesthetic before the major operation,” a breathing space to devise a plan to reopen the banks in an orderly way. The coordinated closing, historian Arthur Schlesinger remarked, gave the long economic slide “the punctuation of a full stop, as if this were the bottom and hereafter things could only turn upward.”
Bring all stakeholders aboard.
Midway through the cabinet meeting, Roosevelt brought in congressional leaders from both parties to solicit their support for his plan to call the 73rd Congress into special session to enact emergency banking legislation. In the era before the inaugural date was changed from March 4 to January 20, Congress would not ordinarily have been called into session until the following December. The singular exception was July 1861, when Lincoln called a special session to deal with the outbreak of civil war. To accommodate the return of far-flung members to the capital, Roosevelt set Thursday, March 9, as the date for Congress to convene.
That same Sunday, at Roosevelt’s invitation, a group of prominent bankers from New York, Philadelphia, Richmond, and Chicago arrived in Washington to lend the administration a hand in the drafting of the bill. Progressives, who had hoped for radical action, even nationalization of the banks, were disturbed by the administration’s decision to consult the very men impugned as “unscrupulous money changers” in the inaugural speech. But Roosevelt knew that he needed the technical expertise and support of the banking community and felt it important to include them in the process of drafting the bill. The search for technical knowledge also led him to heed members of former president Hoover’s Treasury Department. While this, too, “ran counter to the spirit of the moment,” these staffers had wrestled for months with various plans for saving the banks. Repeatedly frustrated by Hoover’s inaction, they were eager to contribute.
To round out his search for consensus, Roosevelt invited the nation’s governors to meet with his entire cabinet at the White House the following morning. He wanted to provide them “a complete picture of the banking situation,” in the hope of securing their “help and cooperation.” Acting swiftly, the governors passed a series of resolutions, pledging their full support.
And so, layer by layer, stitch by stitch, Roosevelt gathered into his materializing contingency plans not only his executive team but congressional leaders, leading bankers, and state governors—a consensus of various levels of leadership, public and private. And all the while he was planning novel ways to appeal, appease, and encourage the most important stakeholders of all—the American people.
Set a deadline and drive full-bore to meet it.
The new president had promised action. Only a single week separated the proclamation of the national bank holiday on Monday morning, March 6, and the scheduled reopening of the banks on Monday, March 13. In that brief space his team had to prepare, rehearse, and produce what would amount to the staging of a national drama aimed at restoring public confidence in the nation’s failed banking system. The entire country would be in attendance when the production had its debut on March 13, and their response that single day would determine success or failure. What if the emergency legislation were not completed and enacted in time? What if the people did not believe in the soundness of the plan? What if on Monday morning mobs of depositors all over the country stormed their banks? The outcome was anything but certain for both the banking system and the fledgling administration.
An enormous mountain of data had to be sifted and organized, pressing decisions made and funneled into a comprehensible language for an emergency banking bill ready for Congress. A preliminary decision was made to reopen banks in stages dependent upon their financial stability. But who should make those determinations? What if banks had solid assets but insufficient currency to meet demand? Should the federal government provide additional currency against those assets? If so, should it be scrip or newly printed money? How could such currency be printed and distributed in time? If insolvent banks with impaired assets had to be closed, how could depositors be treated in a just and orderly way? “Everyone was aware that in the rush serious mistakes might be made,” Roosevelt adviser Raymond Moley acknowledged, “some banks would be reopened that should have remained closed, and others would be closed that might have weathered the storm.” One thing was incontestable—under the new legislation, it would be necessary to concede a massive consolidation of power to the executive branch.
The marathon week called for a military-style operation complete with coordinating deadlines. The emergency bill had to be ready by noon on Thursday when Congress assembled. Night after night, Roosevelt was still in his office after midnight struck, conferring with Moley, Treasury Secretary Bill Woodin, old Hooverites, bankers, and legislative draftsmen. The team worked around the clock, stealing time only to eat a sandwich, snooze on a couch, or take a shower.
Early on, the decision was made to shore up weaker banks with federal funds. The Bureau of Engraving was ordered to begin printing new currency posthaste, and a fleet of airplanes was commandeered to stand by, ready to carry the money to banks across the country.
By Wednesday, a first draft of the bill went to the White House. With the help of bank examiners and the Federal Reserve, Treasury officials had prepared a map with multicolored pins to differentiate a bank’s status according to its soundness. Always partial to maps as a way of visually clarifying problems for himself or teaching others, Roosevelt was “delighted with it,” Moley reported. Later that evening the draft was presented to the majority and minority leaders in both houses. After small changes, congressional leaders pledged their full support. Not until three o’clock in the morning was the bill sent to the printer. When asked if the bill was finished, the puckish Bill Woodin said: “Yes, it is finished. My name is Bill and I’m finished too.”
The bill was essentially a conservative endeavor, designed “to patch up failings and shortcomings,” to stabilize, not alter, the existing structure. While Roosevelt was already contemplating far-reaching structural changes in the banking community, it was necessary first “to clear the financial arteries of the economy.” Only if this opening gambit was successful could momentum be gained to address systemic problems. Unless this crisis was resolved, there could be no turnaround.
Leadership Page 37