When Roosevelt this summer spent many weekends at “Shangri-La,” a camp in the Catoctin Mountains about sixty miles north of Washington, reporters wondered if he was tired of the demands and semiformality of Hyde Park. Certainly Hyde Park had its shortcomings as a retreat. The President wanted to go back home mainly for a holiday, to have a chance to read, sort out his books, decide on new roads and tree plantings, but he was pursued there by visitors and telephone calls. When he made plans to build a small cottage on Dutchess Hill to “escape the mob,” reporters had labeled it his “Dream Cottage,” much to his annoyance.
Roosevelt’s main reason for favoring Shangri-La during this period was that it could be reached in a two-hour drive from the White House. Arrangements were simple to the point of crudeness there. His cottage had only two baths, one of them his; the other was shared by three bedrooms, and the President laughingly alerted his guests to the fact that the bathroom door did not close securely. Presidential aides roomed in rude pine cabins scattered about the area. The place was staffed by Filipinos borrowed from the Potomac, which was now on combat duty.
One rainy Saturday afternoon in the midsummer of 1942 the President left the White House with a small band of companions—the Samuel Rosenmans, Archibald MacLeishes, Grace Tully, his cousin Margaret Suckley, and Secret Service men. The party traveled in four cars whose low White House number plates had been changed to more anonymous digits. The cars moved slowly through the villages, stopping for traffic lights, and were unobserved except when the agents rode on the running board while passing through crowded streets. It was pouring at Shangri-La, too, but Roosevelt seemed not to mind. Wheeled through the cottage, he showed his guests to their rooms and complimented the messmen on their hanging of pictures sent from the White House, adding casually to his guests, “I may make a few changes tomorrow.”
“He then sat down in an easy chair in the living-dining room,” Dorothy Rosenman noted soon afterward, “and I gave him the box of cheeses, cocktail appetizers and candy we had brought. He had a boyish glee in opening each package within the box, and then told Isaac, the Filipino who is in charge, just when to use each item during the week end. We all sat around chatting—sometimes about matters of importance but mostly about trivialities. The President, Archie and Sam would slide from serious talk to comedy with each other, and the President was thoroughly relaxed. At six o’clock he asked when I would suggest we eat. It was made a question of great moment. I was hungry and suggested some speed. So with much seriousness we all discussed dinner timing, and he finally decided that cocktails would be had at 6:40 and dinner at 7:00, and that he would take a little nap before 6:40….”
Before sitting down to dinner the President asked for his portable radio and listened to the 7:00 P.M. news. He also took a call, with war news, on the direct wire from the White House. “I’ve just read my newspaper,” he said on putting down the receiver.
At dinner the stories began. The guests had heard them before, but relished the retelling—the way their host dwelt on details, his manner of pausing and drawing the story out, the inflection of his voice, above all his zest in being the storyteller. He told a true-life tale about a forger who went from city to city taking the checks of any convenient bank, writing them up, and passing them off. The President had remembered every detail and every city, Sam Rosenman told his wife later. Roosevelt also related an old French story about a barber who supplied delicious veal to the local butcher during the hungry days of the siege of Paris. It seemed that several of the barber’s customers were missing. While his lady listeners shivered, the President told in detail how the “veal” was butchered and delivered.
After dinner he worked on his stamps while others read or played cards. He warned people not to play with Grace Tully, because she always won; earlier he had hand-printed and hung a crude sign: VISITORS WILL BEWARE OF GAMBLERS (ESPECIALLY FEMALE) ON THIS SHIP. Tonight Miss Tully won, as usual. Later the President started a detective story. All went to bed about ten.
It had been a very peaceful evening, Dorothy Rosenman reflected. She was a little taken aback by the subjects of Roosevelt’s stories. But she thought she knew what had inspired them. That noon, August 8, 1942, two hours before Roosevelt left Washington, six young Nazi saboteurs had been electrocuted in Washington. Roosevelt had commuted the death sentences of two others. His only regret about the six who died was that they had not been hanged.
THE ECONOMICS OF CHAOS
The vast pendulum of war came into a tremulous balance in the early summer of 1942. There was a momentary lull in global battle. The grim submarine war went on in the Atlantic, but was now showing omens of a change of fortune in favor of the Allies. The Japanese, bloated by their conquests and at the same time shaken by their losses at Midway, were moving more slowly, feeling for enemy weaknesses, especially toward the southeast. Here there was conflict. On August 7 Marines invaded Guadalcanal, in the southern Solomons. Later a Japanese task force of cruisers and destroyers raced down to strike the Allied naval forces guarding the Guadalcanal beaches and sank three American heavy cruisers and one Australian.
From Washington the President’s naval aide drove to Shangri-La with this jolting news. For a long time he and his chief pored over a large map, while the guests chatted away nearby. Later, at dinner, Roosevelt remarked calmly: “Things are not going so well in the Pacific. There are heavy losses on both sides.” He then dropped the subject; soon he was telling long stories again. He was not staking his hopes on any one battle; he would not know for some time whether Guadalcanal was a turning point or merely one more in a long series of delaying efforts.
The President’s most urgent front at this point was the battle against inflation at home. In the spring of 1942 he had bluntly told Congress that to “keep the cost of living from spiraling upward”—a phrase he repeated seven times—the nation must “tax heavily,” keeping personal and corporate profits at a reasonable rate; fix ceilings on prices paid by consumers, retailers, wholesalers, and manufacturers; stabilize wages and salaries; stabilize farm prices; encourage people to buy war bonds instead of luxuries; ration all scarce, essential supplies; discourage credit and installment buying. “Our standard of living will have to come down,” he said. But he rejected the concept “equality of sacrifice,” because he believed that a free people, bred to the concepts of democracy, deemed it a privilege to fight to perpetuate freedom. He called, rather, for “equality of privilege.”
As summer wore on, however, it was clear that Congress did not quite see its privileges this way. The seven proposals made an impressive package, but the legislative branch was not adapted institutionally for making unified economic policy, the executive branch was not well organized to administer it, and the President was not temperamentally inclined to press for it when the political risk seemed high. Evidently the voters did not welcome a co-ordinated effort except in principle; the clearest popular reaction to the seven-point program was a complaint by each major group that it was sacrificing more than some rival interest.
As usual, tax policy was the hardest to integrate with the rest of the anti-inflation program. In March a committee chaired by Vice President Wallace had recommended 11.6 billion dollars of new taxes, plus a two-billion-dollar increase in Social Security taxes—a total sum that would have soaked up much purchasing power and thus helped stabilize prices, and would have enabled over 40 per cent of war costs to be paid out of current revenue. But Roosevelt and Morgenthau wanted more than fiscal “soundness.” They felt deeply that a tax policy could prevent “war millionaires,” that a war economy could tolerate and even encourage economic egalitarianism. “Profits must be taxed to the utmost limit consistent with continued production,” the President told Congress in presenting his seven-point package. “This means all business profits—not only in making munitions, but in making or selling anything else.” If “clever people” found loopholes in the tax laws, he hoped Congress would pass a special tax to thwart them. And he stated flatly
that no American ought to have an income after taxes of more than $25,000 a year. This last proposal was dubbed by the New York Herald Tribune “a blatant piece of demagoguery,” but Frankfurter wrote that Theodore Roosevelt would have said, “Bully.”
The administration presented a bold and united front on tax policy, but in fact it was sorely divided. The Wallace committee favored a retail sales tax to raise 2.5 billions; Roosevelt and Morgenthau had long opposed such a tax. Henderson and Federal Reserve Board Chairman Marriner Eccles wanted a compulsory savings policy; Morgenthau much preferred a voluntary savings program. Both sides appealed to the President; Morgenthau demanded that he tell Budget Director Harold Smith to stop undermining Treasury policy.
The President placated both sides. “Well,” said Morgenthau philosophically after hearing of the enemy’s latest foray at the White House, “I always say when you are doing a tax bill you have got to sleep on the floor so a fellow can’t put a knife in your back.” Yet administration differences were dwarfed by congressional hostility to major tax increases and tax reform. Morgenthau in March had proposed a heavier and more graduated income-tax schedule but one that would still raise only two-thirds of the revenue recommended by the Wallace committee. This was a concession to congressional feeling, but it did little good.
Roosevelt simply seemed unable to evoke from Congress a sense of urgency about taxes. Morgenthau, partly in order to head off a move on the Hill toward a sales tax, suggested early in May the lowering of personal exemptions from $750 to $600 for single persons and from $1,500 to $1,200 for married couples. Rebuffed by the Ways and Means Committee on his major proposals, the Secretary pinned his hopes on getting any decent kind of bill out of the House and into the Senate, where it would have a better chance.
Roosevelt concurred: “Keep on settin’ and no sweatin’ and no talkin’,” he told Morgenthau. “…Just stay put.”
Inflationary pressures and threatening shortages made it impossible for the administration to stay put. By midsummer the OPA was staggering along under the double burden of its internal administrative problems and its general unpopularity in the nation. Henderson’s people had to keep a host of technicians—lawyers, accountants, and so on—on tap without letting them get on top; they had to staff and run thousands of local rationing boards; they had to issue and enforce a multitude of regulations. One task alone was to apply OPA’s General Maximum Price Regulation—“General Max”—to 1,700,000 retailers. By the summer of 1942 the national office was swamped. As in the old New Deal days, the White House was the visible target for complaints about federal interference. “At present we are expected to fill out seventeen forms, reports and questionnaires, a month, to government agencies,” a Knoxville foundry operator wrote to “Your Excellency.” He went on with a long bill of grievances. “So around and around we go. Rules change faster than replies come from Washington.…Is there any hope for relief?”
The main threat to effective price control came from Congress, which felt even more exposed than the President to grass-roots protest. Early in the summer Henderson appealed to the President for help in heading off a move in the Senate to slice OPA’s appropriation, require every employee getting more than $4,500 to be confirmed by the Senate, and, in effect, cripple its control of farm-commodity prices. Roosevelt in turn appealed to Wallace, Barkley, and Carter Glass, with some success, but a 100-per-cent-of-parity measure passed the Senate. Henderson warned his chief that the parity provision would mean price increases for bread, packaged cereals, milk, meat—in short, for the staples of millions of families. But there was little Roosevelt could do at the moment in the face of the power structure on Capitol Hill.
For the administration the most trying program was rationing, and of all the rationing tasks the most trying was rubber. Rubber was not only in short supply, but its restriction was a means of limiting the use of automobiles and hence of conserving gasoline, which had been so short on the East Coast as to compel the OPA to start gas rationing there in 1942. Nelson had found on becoming WPB chief early in 1942 that the nation would be practically out of rubber in fifteen months. Although frantic efforts had been made to start a synthetic-rubber program, only one plant was making it—at the rate of 2,500 tons a year. By early summer defense officials were fearing a shortage of several hundred thousand tons.
Pressed by Nelson and Henderson at a meeting early in June to ration gasoline to save rubber, the President seemed to fear the popular reaction and cast about for easier solutions, notably a scrap-rubber-collection campaign. He seemed to lack his usual sure grasp of a policy question.
“Now I suppose I have had as much information on what that scrap rubber is as anybody in the world—anybody, in Congress or out, in a column or out,” he told reporters. “And I don’t know. I don’t know who is right. Now here—” pointing to himself, amid laughter—“is the greatest expert on it in the United States, and he doesn’t know!” But what Roosevelt did know was how to appeal to the people, and soon he was on the radio describing the rubber shortage in simple, graphic terms and asking people to turn in to the nearest filling station any kind of rubber—old tires, rubber raincoats, garden hose, rubber shoes, bathing caps, gloves. About 450,000 tons were collected in less than a month, but not enough to provide more than a stopgap.
Congress forced the President’s hand. Impatient for action, fearful of nationwide gasoline rationing, impressed by the popular demand for czars who could break through the obstacles, the legislature passed a bill establishing a Rubber Supply Agency under a director with wide powers. Roosevelt vetoed the measure, arguing that it would frustrate centralized control under the WPB. But recognizing by now, early August, the need for more drastic action, he announced in his veto message the appointment of a committee of Conant, Compton, and Baruch, chairman, to investigate the problem, after Chief Justice Stone had turned down a similar assignment. “Because you’re ‘an ever present help in time of trouble’ will you ‘do it again’?” he wrote to Baruch in longhand—and by enlisting the old promoter of tough remedies, Roosevelt knew that he would get a recommendation for drastic action. So he did: rubber and gas rationing, stepped-up synthetic-rubber programs, and a powerful rubber administrator under the WPB.
At summer’s end of 1942 Roosevelt seemed to be losing the battle against inflation. Since April the cost of food exempt from controls had risen at a rate of over 3 per cent a month for wage earners. Surging wage rates were putting heavy pressure on anti-inflation controls. The voluntary bond drive was raising a great deal of money but not enough. And Congress had failed to act on the two measures the President considered central to a stabilization program: taxes and food-price controls.
Roosevelt had wielded his executive power effectively on some anti-inflation fronts, but he had shown little leadership in the politically most sensitive sector of all, especially in an election year-wage control. Lacking clear guidance on wage policy from the White House, the War Labor Board had proceeded on a case-by-case basis. As food prices rose, labor members of the board pressed for bigger wage increases; the employer members resisted, with support from business and farm groups. A long-pending dispute in Little Steel almost broke up the board early in the summer, but the members hammered out a decision that would raise hourly wage rates 15 per cent to compensate for the 15-per-cent rise in the cost of living between January 1941 and May 1942.
Despite howls from both sides, “Little Steel” became the basic formula for disposing of wage disputes. But wage policy was still soft. The War Labor Board could decide only wage rates that came before it in dispute cases; it was always vulnerable to labor or management threats to desert or defy it; and it had little guidance from the White House in handling wage inequities between industries or areas. Lack of set policy in turn put a heavy burden on the President. Again and again in 1942, as in the year before, he had to take time to keep Green and Murray friendly to the administration and at least on speaking terms with each other; to handle barbed issues like double tim
e on Sundays, about which there was strong public feeling; and always to keep a wary eye on the ever-rambunctious John L. Lewis.
Whatever his public posture, the President was not one to deceive himself for long about the economic situation. Aside from all his other sources of information on inflationary troubles, he could always resort to “look-see.” He told reporters that on a visit to Hyde Park he drove twelve miles down the Post Road at a steady thirty-five miles per hour; prevented by police (as standard policy) from passing the President, twenty-two cars piled up behind him in that distance. It all showed, Roosevelt went on, that people were driving too fast, using up gasoline, not living up to the request of their President and government. “And we have got to enforce the thing some way.”
How could the thing be enforced without laws? Some in the White House, including Rosenman and Sherwood, urged Roosevelt to bypass Congress and carry out his stabilization program through his war powers. The President was sorely tempted. In his electrifying Inaugural Address in 1933, amid numbing economic crisis, he had warned that if Congress did not face up with him to the emergency, he would ask it for broad executive power “as great as the power that would be given to me if we were in fact invaded by a foreign foe.” Now he had that kind of power under his war authority. He remarked to reporters that “in the old days, in 1933, when the country was economically on its back, and people’s pocket-books were being hit” he had been able to get measures from Congress at the rate of two or three a week or even one a day, but now that the nation’s very existence was threatened he could not get action. Still, the President would not, even in wartime, rely on his war powers. Rather, he relied on an ingenious—and ingenuous-power ploy.
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