“Now Sam didn’t know anything about securities,” Landis was to say, recalling that meeting, “but Sam was an expert on the integrity of people. … He knew when a man … was telling the truth. … He had no patience for men who were not sincere and honest. And this is what he expressed to me, at that time. …” He had not, Landis was to say, known Rayburn “too well up to that time. I got to know him quite well later on. He was an expert in … procedure—oh, absolutely an expert in matters of procedure! He was an expert in procedure, and sizing up the motives of what made human beings tick.”
An expert on human beings. With the full twenty-four-member committee susceptible to Wall Street pressure, he delegated the Truth-in-Securities Bill to a subcommittee—the right subcommittee; as its chairman, he named himself; as its other four members, he named four Congressmen he knew he could dominate, four who would bow to his personality rather than to Wall Street. When, in the showdown, they did, and reported the young men’s bill favorably to the full committee, he told the young men which committee members to approach, and how to approach them. Says Thomas Corcoran, whose expertise in handling men was to become legendary in Washington: “Sam was a genius in handling men. He would send you to see a guy, and he would tell you exactly what the guy was going to say, and in what order, and he’d tell you how to answer each point. And the guy would say exactly what Sam had told you he was going to say, and if you just answered exactly what Sam told you to answer, you could just see these conservative sons-of-bitches coming around right before your eyes.” He told them which committee members not to bother approaching—because they would never come around. And these he handled in a different manner; his weapon was the gavel, and, almost half a century later, the young men can still remember its harsh crash as their champion swung it in their defense. During the Hundred Days, his chairmanship was a “temporary dictatorship,” writes Michael E. Parrish in his Securities Regulation and the New Deal. “Even under normal circumstances a powerful chairman, [he] dominated the … committee as never before.” Still other committee members didn’t understand the incredibly complex bill, with its pages of detailed technical regulations governing securities issuance—but they felt it was not necessary that they understand. Rayburn told them it was a good bill, and they trusted Sam. The hearings the committee held on the bill—before reporting it favorably to the full House—were so brief that Moley years later was to write incorrectly that none had been held.
An expert in procedure—oh, absolutely an expert in matters of procedure. The young men had anticipated problems in the full House because of the legislation’s complexities; “If you amended Section 7, it might have an effect on Section 2 and 13, and so on,” Landis was to say. But, thanks to Rayburn, the complexities made passage easier, not harder. As Landis recalls: “Because of its complexities, and the danger that an unstudied amendment, apparently fair on its face, might unbalance the articulation of its various sections,” the bill was introduced under a special rule that “permitted the consideration of amendments only if they had the approval of the committee chairman.” No such approval was forthcoming. Landis, watching with apprehension from the gallery, saw that “Rayburn had complete control of the situation.” To his astonishment, the bill passed “with scarcely a murmur of dissent.”
The young men had anticipated more problems—all but insoluble problems—in the conference committee, in which five-member delegations from the House and the Senate met to try to reconcile their conflicting versions of the same bill, for the Senate bill was, in effect, Huston Thompson’s original, “hopeless” bill, which was thoroughly approved by the distinguished chairman of the Senate delegation, Duncan U. Fletcher, of Florida. But there were procedures for a conference committee also.
Few men knew them. “If they exist, and documentary evidence to that effect is to be found in Hine’s Precedents, they are observed as much in breach as in conformance,” Landis was to write years later, after he had become a veteran of conference committees. But one of the men who knew them was Sam Rayburn.
Taking advantage of them was made easier because Fletcher, a courtly Southern gentleman, suggested that Rayburn be chairman for the first meeting. Rayburn said that the first question to be decided was, as Landis puts it, “what document”—House version or Senate version—“you would work from, which was a very important issue, really a basic issue.” Rayburn “quietly asked Senator Fletcher if he did not desire to make a motion on this matter.” Apparently unaware of the trap into which he was walking, the seventy-five-year-old Fletcher replied that he certainly did so desire: he moved that the Senate bill be made the working draft.
“Motion moved,” Rayburn said quickly. “Motion seconded?” It was seconded. “Vote on the motion.” The vote was, of course, a tie; all five Senate members voted in favor of the motion; all five House members voted against it. Since it was a tie, Rayburn said, the motion was lost; consequently, the House bill would become the basic draft. Had a House member made the motion, and a tie vote resulted—as, of course, it would have—the Senate bill would have become the basis for negotiations; by luring a Senator into making the motion, Rayburn had won a crucial point before the conferees had more than settled into their seats. “Except for an occasional reference to its provisions,” Landis was to reminisce, “that was the last we heard of the … Senate bill.”
The Senate delegation included not only Fletcher but such big names as Carter Glass of Virginia, James Couzens of Michigan and Hiram Johnson of California. “The House had no such distinguished personalities except for Sam Rayburn,” Landis was to say. But that one was enough. While Fletcher had apparently intended that, at succeeding meetings, he and Rayburn would alternate in the chair, he was too much of a gentleman to put himself forward; and, as Landis puts it: “Absent any request from him, Rayburn continued to guide the proceedings.”
Aides were guided with an iron hand. Once, desperate because their handiwork was being ignored, two Senate staffers who had worked on the Thompson bill attempted to put their draft in front of the committee members. Rayburn spoke to them, in Landis’ phrase, “rudely but firmly”; the attempt was not repeated. Senators were guided with deference: deference in tone, in solicitation of their opinions—in all matters except matters of substance. The atmosphere of most conference committees is tense, Landis was to write: in this committee, “thanks to Rayburn’s guidance,” and the respect he showed for everyone’s opinions, “friendships developed,” and the tension dissolved. And so did the opposition. On every crucial point, the final bill was the House bill. On May 27, 1933, Roosevelt signed it into law—and after decades of fruitless discussion, government regulation of the issuance of securities was a reality. In the public mind, Rayburn was associated hardly at all with the dramatic months immediately after Roosevelt’s inauguration, during which so much legislation that was to change the shape of American life was rushed through Congress. But to the young men who had seen what he did, he was one of the heroes of the Hundred Days.
The next year brought the introduction of legislation for governmental regulation of the exchanges on which securities were traded. Tough as the fight had been in 1933, the fight in 1934—for the creation of a Securities and Exchange Commission, and an end to the operation of the Stock Exchange as a private club, run by and for the benefit of its members, often at the expense of the public—was tougher. The business community moved against Ray burn in his own committee, and almost beat him there. He had to use every ounce of persuasiveness he possessed—and every lever of power—to break the revolt in the committee. Then, in angry scenes on the House floor, he compromised and compromised and compromised again—and never compromised on the crucial point. He maneuvered like a master in another conference committee. And the Securities Exchange Act of 1934 joined the Securities Act of 1933 on the nation’s statute books.
1935 was the year of the Public Utilities Act—the bill to curb the power of giant utility holding companies over their operating subsidiaries. To P
opulists, these holding companies symbolized the entrenched economic power of the Northeast—and its effect on “The People” throughout the country. Electric rates were unjustly high for consumers—and particularly for farmers—because of the siphoning off of local power companies’ cash by the holding companies up in New York; electricity was unavailable to most farmers because the decision-makers in New York, interested only in profit potential, saw too little in rural electrification. For decades, Populist legislators had attempted to enact state legislation to curb utilities—and had been defeated in almost every significant attempt by the utilities’ awesome power in state capitals; as a member of the Texas State Legislature twenty years before, Rayburn himself had fought unsuccessfully against them. Rayburn knew now that only the power of the federal government could curb the power of the holding companies, and now, at last, there was a President who knew it, too (as Governor of New York, Roosevelt had fought these giants in their lair, and had lost). The President demanded, and Corcoran and Cohen drafted, and Rayburn and Senator Burton K. Wheeler, the old Populist from Montana, introduced legislation that included a clause—dubbed the “Death Sentence” clause—which gave the Securities and Exchange Commission power to compel the dissolution of holding companies.
The mere mention of lobbyists brought the deep red flush to Rayburn’s head; wrote a friend, “He hates [them] with a venomous hatred.” 1935 was the year of the utility lobby. “You talk about a labor lobby,” Roosevelt said. “Well, it is a child compared to this utility lobby. You talk about a Legion lobby. Well, it is an infant in arms compared to this utility lobby.” This was, he said, “the most powerful, dangerous lobby … that has ever been created by any organization in this country.”
The lobbyists played dirty—it was during the Death Sentence fight that there began the first widespread whispers that the President was insane—and they played rough. The flood of almost a million messages that inundated Congressmen was reinforced by the threat direct: Congressmen were told bluntly that money, as much as was needed, would be poured into their districts to defeat them in the next election if they voted for the Public Utilities Act. This time, Rayburn’s control of his committee was broken. When, after six weeks of bitter hearings, the bill was reported out, it came to the floor with the Death Sentence provision removed, and the bill emasculated.
I hate to be licked. It almost kills me. Three times, against the wishes of congressional leaders of his own party, Rayburn demanded a roll call on the Death Sentence. He had the White House on his side—on Roosevelt’s orders, Corcoran was working tirelessly beside him—and Senator Hugo Black’s hearings were providing the White House with new ammunition as they revealed that the utilities had spent $1.5 million to generate the “spontaneous” mailings, which had actually been produced by using names picked broadscale from telephone directories. But in Texas, newspapers were calling him a Communist, and accusing him of trying to “murder” a great enterprise. John W. Carpenter, president of Texas Power & Light, asked a banker in Rayburn’s district “to estimate how much it would cost to beat Sam Rayburn. … He said they had the money to do anything.” With a storm of abuse rising about him in the House Chamber (and with Carpenter and other utility executives sitting in the House gallery, their presence a silent warning to the Congressmen), he lost all three roll-call votes by overwhelming margins. But there was still the conference committee. No friends were made in this one; so bitter did feelings run during its two months of meetings that other members barred Cohen and Corcoran, the bill’s drafters, from the committee room. But the bill that emerged from the conference—and that was passed—while far short of what Roosevelt and Rayburn had originally hoped for, nonetheless contained the mandate they wanted for the SEC to compel holding companies’ reorganization. Sam Rayburn issued a rare public statement: “With the Securities Act of 1933, the Stock Exchange Act … of 1934, and this Holding Company bill to complete the cycle, I believe that control is restored to the government and the people, and taken out of the hands of a few, and that the American people will have cause to believe that this administration is trying and is establishing a government of the people, by the people and for the people.”
Rayburn received little credit at the time for his role in the passage of this legislation. “Few people, if they depend on the public prints for their information, know much about him,” the New York Times noted. “It is doubtful if there is any member of his ability who is less conspicuous, less self-heralded, and less known outside the influential group with which he is immediately in contact.” And he has received little credit from history, in part because he left almost no record of his deeds in writing; not in memoirs, not even in memos—as David Halberstam says, he “did all his serious business in pencil on the back of a used envelope.” (When asked how he remembered what he had promised or what he had said, he would growl: “I always tell the truth, so I don’t need a good memory to remember what I said”)—in part because, shy, he shrank from publicity: “Let the other fellow get the headlines,” he said. “I’ll take the laws.” It is possible to read detailed histories of the New Deal and find hardly a reference to Sam Rayburn.
Occasionally, when he was old, he would refer to what he had done. In 1955, Drew Pearson was interviewing him about the regulatory commissions when Rayburn suddenly blurted out: “I was in on the borning of every one of those commissions. … I wrote the law that passed the Federal Communications Commission and the Securities and Exchange Commission. … I wrote the law for the Civil Aeronautics Board. …” But the people to whom he was speaking would not usually understand what the old man was talking about. During the Eisenhower administration, a young congressional aide was expounding on the brilliance of John Foster Dulles when Rayburn suddenly said: “I cut him to pieces once, you know.” What do you mean? the aide asked. When was that? The old man grunted and refused to answer. But his name is on the Securities Act of 1933 (the Fletcher-Rayburn Act), and the Securities Exchange Act of 1934 (the Fletcher-Rayburn Act), and the Public Utilities Act of 1935 (the Wheeler-Rayburn Act), and on other pieces of New Deal legislation that, for a while at least, took control “out of the hands of a few,” and restored it to “the people.” And those who fought beside him knew what he had done. SEC Chairman William O. Douglas was to recall that “[We] called it affectionately the ‘Sam Rayburn Commission,’ since he had fathered [it].” The three great pieces of legislation embodied principles for which the People’s Party—the party of the great orators, Bryan and Tom Watson and Old Joe Bailey—had been fighting for half a century. But the Populist perhaps most responsible for the achievement represented by their collective passage was the least eloquent of Populists: the man who had achieved the power to bring their dreams to realization not by speeches but by silence. (Rayburn, of course, gave credit to someone else—in his own, quiet way. Although over the course of his many years in Washington, autographed photographs of many notables had joined the pictures of Robert E. Lee on his office walls, in his home back in Bonham, resting on his desk, there was, after all these years, still only one picture, the picture of Sam Rayburn’s first hero. But now, when Congress adjourned and he came home and unpacked his suitcase, he lifted out of the suitcase and placed beside the picture of Robert E. Lee a picture of Franklin D. Roosevelt.)
EVEN BEFORE he had attained power, Sam Rayburn, with his grim face beneath the gleaming bald head, had been a formidable figure. Now there was power behind the presence—substantial power: the committee chairmanship as well as patronage on the grand scale, for he had been given not only the naming of some commissioners and top staff members of the new regulatory agencies,* but a voice in the White House dispensation of patronage to other Congressmen; a columnist noted that while his aversion to publicity made him “a man in the shadows,” he was one of the handful of Congressmen “who made the wheels go around” in the House. The full force of his personality, held under check so long, was unleashed at last. On the issues he cared deeply about, he was immova
ble. “If you were arguing with him and raised a point, he’d give you an answer,” says a fellow Congressman. “If you raised the point again, you’d get the same answer again. The exact same answer. You realized, that was the conclusive remark. That was the end of that conversation.” He almost never raised his voice, and he never threatened; the most he might say—in a low, mild, almost gentle, tone—was, “Before you go on here, I want to tell you this—you are about to make a mistake, a very big mistake.” And he never asked for anything, a vote or a favor, more than once. If you turned Sam Rayburn down once, men learned, he would never ask you again—for anything.
He would never ask a man to do anything against his own interests. “A Congressman’s first duty is to get reelected,” he would say, and he would advise young Congressmen: “Always vote your district.” If a Congressman said that a vote Rayburn was asking for would hurt him in his district, Rayburn would always accept that excuse. But Rayburn knew the districts. And if the excuse wasn’t true, Rayburn’s rage would rise. Once, for example, it erupted against a Congressman from a liberal district who took orders from the district’s reactionary business interests only because he didn’t want to offend them. The Congressman had often used the excuse of public opinion in his district, and, because Rayburn had never challenged him on it, and had stopped asking for his support, was under the misapprehension that Rayburn believed that excuse. One evening, however, after the Congressman had voted against a bill Rayburn supported, he approached Rayburn, who was standing with a group of friends, and with a winning smile said he sure wished he could have voted with him, but that such a vote would have hurt him in his district. Rayburn did not reply for a long moment, while the deep red flush started to creep up his head. Then, says one of the men who were standing with Rayburn, in a recollection confirmed by another, Rayburn said:
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