The Plots Against the President

by Sally Denton

  Roosevelt’s train left Miami at ten fifteen A.M. on Thursday, February 16, and arrived in Jersey City at four ten P.M. the following day. There, he was met by what the New York Times called “one of the most elaborate police guards ever accorded an individual.” More than a thousand police officers and Secret Service agents surrounded him at the train station and accompanied his motorcade to his East Sixty-fifth Street residence. It was the first and last time that he allowed such an ostentatious security detail. But on the heels of the Miami crisis, the show of force underscored Roosevelt’s—and the government’s—need to appear inviolable.

  On Saturday, February 19, Roosevelt was the guest of honor at the Inner Circle Club dinner at Manhattan’s Hotel Astor. Hosted by political reporters, the event attracted several hundred guests and included numerous sharp-edged skits comparable to the roasts of Washington’s famous Gridiron Club. Roosevelt was greatly enjoying the levity when, shortly before midnight, he was approached by a Secret Service agent bearing an envelope with the presidential seal. Inside it he found another envelope, addressed to “President-elect Roosvelt.” Roosevelt thought the misspelling, penned by Hoover himself, an intentional affront. He skimmed the ten-page handwritten letter as inconspicuously as possible and then handed it under the table to Moley. “Circumstances made it impossible for me to read carefully,” Moley recalled, “but a glance was enough to tell me the news it brought. The bank crisis was getting out of hand.” Once again Roosevelt’s cool demeanor under pressure enthralled Moley, for Hoover’s missive about the nation’s state of emergency was both alarming and insulting and would have agitated a less self-possessed man.

  “A most critical situation has arisen in the country of which I feel it is my duty to advise you confidentially,” the letter began. It then set forth Hoover’s hackneyed appeal to Roosevelt to cooperate with him and abandon the New Deal for the sake of the country. Hoover contended that the economy was so dire that the only thing that could save the nation from collapse was Roosevelt’s endorsement of the policies of the Hoover administration.

  When Roosevelt and his entourage returned to his East Sixty-fifth Street home after midnight, “the letter from Hoover was passed around and then discussed,” Moley said. Hoover announced, “That the breaking point had come somehow made the awful picture take on life for the first time … Capital was fleeing the country. Hoarding was reaching unbearably high levels. The dollar was wobbling on the foreign exchanges as gold poured out. The bony hand of death was stretched out over the banks and insurance companies.”

  Indeed, the run on the banks was unprecedented. Nearly every bank in the country was closed, and it was impossible for the existing banking structure to survive the onslaught. “It would have been inconceivable—if one had not seen it happening right under one’s eyes—that one hundred and twenty million odd of people should, apparently, at one and the same time fall into terror, and rush to withdraw their deposits from the banks,” a J. P. Morgan partner wrote to a friend. What had begun with withdrawals by millions of depositors who had hit hard times, causing the depletion of the banks’ resources, mushroomed into a full-blown mistrust of the nation’s banks and an overall disgust with government. The more severe the crisis became, the more Hoover blamed Roosevelt and his refusal to cooperate with the outgoing administration. “Fundamentally, the millions of small depositors were not worried about the credit of the federal government or the gold standard, which seemed far-off abstractions, but about the soundness of their banks,” historian Frank Freidel wrote.

  Although Hoover’s sense of urgency was genuine and well founded, Moley thought the timing of the letter—three days after Roosevelt’s narrow brush with death and two weeks before his inauguration—was disgracefully inappropriate. Not only had Roosevelt’s life been threatened, but now Hoover was telling him the nation’s banking system was “mortally stricken” and that it was Roosevelt’s fault. Beyond that, Moley was especially outraged by the antagonistic and condescending tone of the letter, which blamed the “steadily degenerating confidence” of Americans on their “fear of Roosevelt’s policies” and “assumed that Roosevelt would succeed—where Hoover had failed—in hornswoggling the country with optimistic statements which everyone knew weren’t justified.” A few days later, Hoover confided in a private memorandum to Republican senator David A. Reed of Pennsylvania that he realized he was asking the incoming president to abandon “90 percent of the so-called new deal.” But Hoover grandiosely believed that only his policies could save the republic. Roosevelt agreed with Hoover that fear was driving the run on the banks, but he thought it was a fear of the insolvency of the banks and the inadequacy of Hoover’s strategies, not of the incoming administration.

  If Hoover truly believed that such an overture would sway Roosevelt, he had deeply misjudged his rival yet again. Roosevelt had successfully ignored Hoover’s demands since the previous November’s election, his advisers considering them offensive and self-serving, and he now dismissed this last-ditch effort as “cheeky.” Roosevelt decided not to answer the letter immediately, which had the predictable result of further upsetting Hoover. When Hoover had not received an answer after five days, he told his secretary of state that Roosevelt’s refusal to follow Hoover’s designs was the act of a “madman.” Roosevelt finally responded to Hoover, but only after he had received yet another urgent letter, delivered by a Secret Service agent to Hyde Park on March 1—just three days before the inauguration. “It is my duty to inform you that the financial situation has become even more grave and the lack of confidence extended further than when I wrote to you on February 17,” Hoover wrote, once again placing the blame on Roosevelt. Roosevelt responded immediately, this time disingenuously apologizing that an earlier letter he had dictated had been misplaced—a ruse the Hoover camp never believed, convinced that Roosevelt had been biding his time so that the economy would collapse and he could rush in as its savior.

  “I am equally concerned with you in regard to the gravity of the present banking situation,” Roosevelt wrote, perhaps as much for posterity as for Hoover. “But my thought is that it is so very deep-seated that the fire is bound to spread in spite of anything that is done by way of mere statements. The real trouble is that … very few financial institutions anywhere in the country are actually able to pay off their deposits … and the knowledge of this fact is widely held.”

  Hoover was livid. Roosevelt had outmaneuvered him, consigning Hoover’s legacy to the wreckage of the economy while elevating himself as its rescuer. Hoover would take the hatred to his grave, convinced that Roosevelt was attempting “revolution and not reform.” While Hoover wallowed in powerlessness, Roosevelt worked tirelessly to build his team of advisers, write his inauguration speech, and prepare the recovery legislation that he intended to implement as soon as he took office.

  By Thursday, March 2, more than half the states had closed their banks. The Federal Reserve Bank of New York, the most important financial institution in the country, was, according to author Liaquat Ahamed, the “center of the storm,” having fallen below its minimum gold reserve ratio. The New York Stock Exchange and the Chicago Board of Trade were shuttered. Panicked bankers and governors beseeched Hoover to declare a national banking holiday, but the outgoing president refused, stating that he “did not want his last official act in office to be the closing of the banks.” At the same time, powerful businessmen and legislators were imploring Roosevelt to seize power and declare a bank holiday. Late that afternoon, Roosevelt’s cavalcade proceeded down Fifth Avenue in New York toward the Hudson River ferry, his car surrounded by motorcycles with earsplitting sirens. The French Line steamer Paris was docked in the river awaiting the president-elect, her cargo space reserved for “nine million dollars in fleeing gold,” though no one in his party knew that at the time. Once across the icy Hudson, he boarded the special Baltimore & Ohio train waiting to carry him to Washington. A freezing rain enveloped the nation’s capital, yet tens of thousands of supporters gre
eted him at Union Station. By the time he checked into the presidential suite of the Mayflower Hotel later that evening, a cluster of telegrams were waiting to inform him of more bank closures and of Federal Reserve figures showing the week’s gold withdrawals to be a staggering $226 million.

  By noon on March 3, New Yorkers were forming long lines in front of Bowery Savings Bank—the largest private savings bank in the world—demanding cash withdrawals. At three P.M. the bank closed with hundreds of angry customers still waiting. In just two days, more than $500 million had been emptied from the nation’s banking system. Once again Hoover begged Roosevelt to join him in bipartisan action, asking that he approve a proclamation for a temporary banking holiday until Monday, March 6, at which time Roosevelt would commit to calling Congress into a special session. Once again, Roosevelt declined. The next day, he would become president, and he intended to take action then—without Hoover.

  An incensed Hoover refused to host the inauguration eve dinner with the president-elect, a long-standing social ceremony that symbolized continuity and civility. He reluctantly sent word to the Mayflower inviting Roosevelt to tea at four o’clock in lieu of the dinner. Roosevelt accepted and, accompanied by Eleanor and their son Jimmy, went to the White House. Hoover kept the Roosevelt family waiting for more than thirty minutes, and although Roosevelt was “imperturbable and betrayed no irritation,” Jimmy knew that his father was seething inside. But Roosevelt instantly stiffened when he saw that Hoover was using the occasion to blindside him at the eleventh hour with more demands and arguments, in what Jonathan Alter described as “another game of chicken between two proud men.”

  “I decided to cut it short,” Roosevelt later recalled. He made a gesture to leave and said to Hoover, “Mr. President, as you know it is rather difficult for me to move in a hurry. It takes me a little while to get up and I know how busy you must be.”

  For the first time that day, Hoover looked Roosevelt squarely in the eye. “Mr. Roosevelt,” Hoover said, “after you have been President for a while, you will learn that the President of the United States waits for no one.” With that, Hoover left the room. “That was that,” Roosevelt recalled. “I hustled my family out of the room. I was sure Jimmy wanted to punch him in the eye.” Indeed, Jimmy was furious at the treatment his father received. “It would be putting it mildly to state that Mr. Hoover was not happy with Father,” he wrote of the occasion. “It was obvious that he had taken his defeat as even more of a personal humiliation than it should have been.” Roosevelt thought the occasion would be politely social and was unprepared to be “treated like a schoolboy or to have his own integrity thrown into question by Hoover,” his secretary said. After they left the White House, Roosevelt told his son that the meeting “was one of the damndest bits of presumption he ever had witnessed in politics.” Decades later, Jimmy said that it was one of his “earliest lessons in how to avoid political booby traps” and that he thought his father had been more appalled than angry.

  Back at the Mayflower, Eleanor told a group of women reporters of a heated exchange between Hoover and Roosevelt that she had overheard. Only years later was it revealed that the reporters had all pledged to keep the details secret, reasoning that in the midst of a national emergency, it would be unbecoming to portray the two men “squabbling like children.”

  Chapter Eighteen

  Fear Itself

  Early on the morning of March 4, 1933, Roosevelt’s valet, Irvin McDuffie, and bodyguard, Gus Gennerich, helped him with his steel leg braces and dressed him in the formal morning attire of striped trousers, black astrakhan-collared coat, and silk top hat. At ten fifteen, accompanied by his wife, mother, and oldest son Jimmy, he rode by open car to a religious ceremony at St. John’s Episcopal Church across Lafayette Square from the White House. He had requested that the seventy-six-year-old Reverend Endicott Peabody conduct the service—apparently unaware that his onetime spiritual mentor had voted for Hoover—and invited nearly a hundred friends, family members, secretaries, cabinet officers, and advisers to attend. Throughout the twenty-minute service, he held his head in his hands, and remained in that position for several minutes after the final blessing: “Oh Lord … most heartily we beseech Thee, with Thy favor to behold and bless Thy servant, Franklin, chosen to be President of the United States.”

  After church, he returned to the Mayflower Hotel, where he conferred quickly with Moley, who briefed him on the current tally of more than ten thousand bank closures. He made final edits to his speech and decided on new measures to address the financial emergency immediately after taking the oath of office, though he kept what Tugwell called an “almost impenetrable concealment of intention.”

  He and Eleanor arrived at the north entrance of the White House a few minutes before eleven A.M., where they waited in their open touring car until a hostile President Hoover and his amiable wife, Lou, appeared. Roosevelt flashed his trademark smile at Hoover, who remained silent, unmoved, and surly as he slid into the seat on Roosevelt’s right. The two wives followed in a second car, and five vehicles carrying Secret Service agents shadowed the motorcade. Roosevelt had refused to allow his bodyguards to construct a glass barrier to protect him from the crowd, so a trotting cavalry surrounded the car, forming a solid rectangle. “Here was a president who would not barricade himself at Rapidan,” one historian said. “He was right there with them in this time of crisis. The pilgrims could not believe their luck.”

  As they made their way up Pennsylvania Avenue toward the Capitol, onlookers cheered and clapped, pushing against the ropes for a closer look. At first Roosevelt maintained the decorum—and fiction—that the crowds were there to honor the outgoing president. But when Hoover sat there “grim as death, looking stonily forward” and refusing to acknowledge them, Roosevelt finally began waving his hat and beaming to the enormous crowd. “Protocol or no protocol, someone has to do something,” Roosevelt said of his thoughts at the moment. “The two of us simply couldn’t sit there on our hands, ignoring each other and everyone else. So I began to wave my own response with my top hat and I kept waving it until I got to the Inauguration stand and was sworn in.” More than half the population of Washington—over four hundred thousand people—had turned out, and while the crowd was more somber than usual, the excitement was palpable.

  Once they arrived at the Capitol, Roosevelt was wheeled into a Senate chamber, where he watched as Vice President John Garner and several new senators were sworn in. He continued rewriting his inaugural address until the presidential procession began at one o’clock. He remained in his wheelchair until he arrived at the entrance to the canopied stand. A lone bugle cried out, and when the Marine Band began playing “Hail to the Chief,” Roosevelt stood with the help of his son, Jimmy, and began his laborious “walk” to the rostrum. Before he reached the platform, the hundreds of thousands of spectators, spread out over forty acres of Capitol grounds, erupted in applause. Placing his hand on the three-hundred-year-old Roosevelt family Bible, open at the thirteenth chapter of Paul’s First Epistle to the Corinthians, he repeated the oath after the chief justice of the U.S. Supreme Court: “I, Franklin Delano Roosevelt, do solemnly swear that I will faithfully execute the office of the President of the United States and will, to the best of my ability, preserve, protect and defend the Constitution of the United States. So help me God.”

  Without pausing to absorb the wild ovation, he turned to the crowd—one of the largest audiences to ever attend an inauguration—unfolded the longhand manuscript he had been writing for weeks, and immediately began his address. “This,” he began slowly for effect, “is a day of national consecration.” He had added the opening sentence just moments earlier, determined to set a religious tone to the somber state of affairs. The audience listened in silence.

  This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and wil
l prosper.

  So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror, which paralyzes needed efforts to reconvert retreat into advance.

  Uncharacteristically intense and unsmiling—his shoulders thrown back, his posture regal, his voice strong—he castigated the bankers and emboldened the masses.

  We are stricken by no plague of locusts … Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because rulers of the exchange of mankind’s goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated … The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths.

  His words struck a deep chord, not only with the hundreds of thousands in the capital but also with the many millions throughout America gathered around radios to hear their new president. “The radio networks carried his ringing voice out across the suffering land, over the sweatshops and flophouses, the Hoovervilles and hobo jungles, the rocky soil tilled by tenant farmers, the ragged men shivering in the iron cold outside factory gates,” William Manchester wrote in The Glory and the Dream.