by Amity Shlaes
Even as Hoover made his point, however, broad interest in the concept of government control was expanding among Americans. American magazines had carried 112 articles on economic planning in 1928. By 1930, that figure had been 210, and as economic trouble deepened, it would reach 365 in 1931. Cole Porter had not yet written the song with the line “You’re the top, you’re Mussolini.” Mrs. Hearst had not launched the sort of barrage of publicity that the Soviet junketeers had. But attention to Mussolini’s model was indeed also intensifying. The U.S. press reported Mussolini’s every action, including the fact that the premier had now reached a trade agreement with Germany’s chancellor, Heinrich Bruening, and would sell the Germans surplus Italian oranges and lemons.
The Soviet model was also under a spotlight. Suddenly, at least in the intellectual world, it looked as if Mellon’s contempt was the minority view and frank interest in the Soviet effort was mainstream. It was an exhilarating turn: the intellectuals were hot after all. Between 1920 and 1931, some eighty books by American authors on the new Soviet experiment had been published in the United States. Lately the pace had accelerated—Tugwell, Chase, Douglas, all were now publishing books or articles. (Chase also had another non-Russian book out, about Mexico, illustrated by a new artist named Diego Rivera.) Russian authors were being translated and published as well. In one week in July 1931, around the time Eccles was worrying about his banks, the papers reported news of the publication of all the following new books: The Success of the Five Year Plan, by V. M. Molotov; Red Villages, by Y. A. Yakovlev; The Volga Falls to the Caspian Sea, by Boris Pilnyak. As for George Counts, he had himself a national best seller in a Russian children’s book that he had translated and edited. And this book, unlike some of the earlier ones by the junketeers, was published by a mainstream press: Houghton Mifflin. The book, Mikhail Ilin’s New Russia’s Primer: The Story of the Five Year Plan, offered lessons from Russia, right down to the construction of hen coops. It suggested that each peasant in Russia could be sure of owning “two good laying hens,” both a doubling and a mockery of the offer Hoover had made in his campaign just three years before.
Many Americans wanted to see Stalin’s experiment for themselves. Some 2,500 had visited the Soviet Union in 1929. The next year that figure doubled, and it more than doubled the year after that. In 1931 Amtorg announced that it had 6,000 skilled jobs to fill, with 100,000 applications flowing into the office. Sometime at the end of September or in early October 1931, the editors at Business Week sorted through a morning’s sample of 280 applications and found that there were two barbers, one funeral director, two plumbers, five painters, fifty-eight engineers, and a dentist among the group. Two of the top three reasons the applicants cited for their interest in the move were unemployment and “disgust with conditions here,” the magazine reported. The third was “interest in the Soviet experiment.” Immigrants were especially disillusioned with the United States; nearly all stated that they planned to stay once they got to the Soviet Union.
The next month—November 1931—the left-leaning Nation inaugurated an ebullient series titled “If I Were Dictator.” The author of the first article in the series was the prolific Stuart Chase. Chase seized the opportunity to present an agenda that was simultaneously modest and far-reaching. It included abolition of the protective tariff, except for new industries, and an end to war debts. Wine and beer were to be made legal. He also wanted to recognize Russia “at once” and then sell her a billion dollars in American goods. He wanted federal relief for the unemployed, as well as a “complete system of old age pensions.” He advocated spending freely to promote growth, notwithstanding what that did to deficits—“the effects on the federal budget will not disturb me in the least.” More important, however, Chase wanted to set up a “long swing program” to plan the U.S. economy, dividing industry into state trusts, regardless of what old antitrust law might say about that (“the Sherman anti-trust law is of course declared a piece of antiquated lumber”).
To run his fantasy economy, Chase appointed a fantasy board of planners: Robert Lynd, the author of Middletown; Walter Lippmann, the journalist; Bernard Baruch, who had run the War Industries Board in World War I; John Dewey, the philosopher and educator; and two friends from the Russia trip, Paul Douglas and Rex Tugwell. The article made the cover of the issue of November 18, 1931; underneath ran the headline for another story: “Mr. Hoover Gets Notice to Quit.”
There were a number of others who thought that now was the moment for revolution, or at the very least communism. The author John Dos Passos wrote that given such conditions, “becoming a socialist would have just the same effect on anybody as drinking a bottle of near beer.” Many of the progressives, likewise, continued to believe that to pin all hopes on Norman Thomas, James Maurer, and their Socialist Party would be to fail. The country had not changed that much. So they began to hunt for political leaders within the big parties: Newton Baker, a New York lawyer who had served as mayor of Cleveland before World War I, attracted a number of them, including Adolf Berle and Wendell Willkie. Baker, too, thought a lot about Russia. In the New York Times of the following year, Baker would outline what seemed now a permanent problem: child homelessness. Thinking of the children on the streets in revolutionary Russia, Baker would write: “America’s vagabonds, however, share this quality in common with Russia’s wild children; having tasted the poison of a wandering life they find it difficult to give up.”
The reason that both Willkie and Berle preferred Baker to New York’s Franklin Roosevelt was that the governor had a split reputation, as a supporter of Tammany Hall and as a progressive heir to Theodore. Many political observers disdained him. Some found him arrogant. Walter Lippmann said Roosevelt was “a pleasant man who, without any important qualifications for the office, would very much like to be president.” Still, the fact of Roosevelt’s victory in the 1928 gubernatorial contest was something his opponents could not get past. With the 1930 census, New York would add two electoral votes to its already stupendous forty-five. Maybe specific policy positions didn’t matter if one was talking about someone who had won by a landslide in New York, a state with forty-seven electoral votes.
And Roosevelt for his part was leaning more toward the intellectual progressives. In 1928, a year after the Sacco and Vanzetti case, Felix Frankfurter had begun writing regularly to Roosevelt, at first to congratulate him on his nomination as a candidate for governor for the Democratic Party. Roosevelt wrote back, and from then on the two corresponded regularly, Frankfurter’s letters filled with lavish flattery. “By holding out on your water power policy for New York, you have vindicated courage in government,” Frankfurter had, for example, written to Roosevelt in 1930 in regard to a battle he was conducting with the chairman of the Niagara-Hudson Power Corporation.
Recently, Frankfurter had also sought to arrange a meeting between the New York governor and Justice Brandeis. Frankfurter thought that Brandeis might advise Roosevelt on an area of interest to them both: public utilities. Such encounters would strengthen Roosevelt’s commitment to fighting for the public power issue, Frankfurter hoped.
When a group backed by Wall Street put together an effort to develop the power resources of New York State, Roosevelt fought back: he was now convinced, as a governor, that public power was the answer. (“It is our power,” he had said in his first inaugural.) Martin Insull, the brother of Samuel, had only increased that conviction when he penned a series of nasty articles about Roosevelt. Sam, aware of this, counseled his brother that he was making a mistake. “In our business we can and do attack politicians bitterly in the abstract without making enemies, but we cannot attack individuals,” Sam would say later, regretfully.
Governor Roosevelt had also come to lean on Frances Perkins, who as a social worker had spent time at Jane Addams’s Hull House. Perkins had her duels over unemployment data with Hoover. But she also held conferences with state labor commissioners to talk about the importance of creating new forms of unemployment insu
rance, if only as “safeguards against the dole.” She brought in Paul Douglas, still at the University of Chicago, to organize the roster of speakers at one conference; the governor attended and took time to speak with each expert in turn. Later Perkins herself traveled on the Rotterdam with her daughter to Britain to study that nation’s system for unemployment insurance.
The British plan seemed to her quaint: senior bureaucrats in spectacles climbed up high on painter’s ladders to retrieve individual documents for each worker. Still, Perkins liked Britain’s model: “You saw their government’s extraordinary skill in handling a human situation.” The British bureaucracy’s magnanimity shone through in a way that Washington’s did not.
By the winter in which 1931 became 1932, state and county governments were beginning to give up on handling the hunger and homelessness. The people were beginning to give up as well. If their leadership could not understand the details of the monetary problem, then how could they? Many Americans did not even think that a new institution like the Fed could do either much good or much bad. “Federal Reserve Board decisions and pronouncements were read by very few,” wrote the journalist Mark Sullivan of the period. “Bank officers who would be obliged to conform to them. Among businessmen, a small proportion…A few scholars in monetary theory and economics. Of reading by the general public, there was almost literally none.”
All people saw was that things were not working. In Utah, notwithstanding Eccles and his allies, thirty-two of one hundred and five banks had failed. Wages dropped to nearly half their old level—for those who still had a job. The unemployment rate for the state was rising into the 30 percent range. Whatever the initial missteps, the deflation compounded them. What’s more, across the Midwest and West, there was now a genuine drought—and a bad one: in all of 1930, 1931, and 1932, the rainfall was less than average.
Tugwell, looking west out the windows at Columbia’s Morningside Heights, could now see trouble as bad as what he had viewed abroad: “a sprawling Hooverville soon spread along the riverbank across the railroad tracks. Before long there were thousands of shacks put together out of orange crates, beaten cans, old pieces of rubber, leather, or cloth, their denizens gone back to caveman status, scrounging in neighboring garbage heaps for food or fuel.” This downturn, he was beginning to conclude, was worse than any other. “It felt,” he would write, “as though a sense of jeopardy was about to open.”
Part of his conclusion came from personal evidence—the abiding business troubles of his father upstate. Though some might recover, “it was different for my father,” Tugwell would later write. His father’s canning business, Tugwell and Wiseman, was failing. Tugwell suspected his father’s decline might be permanent. Later, he would decide that the Depression had done his father in: “My father was almost as poor as when he started, and now he was old…. He would live on, broken and helpless, for another fifteen years.”
Father Divine’s popularity grew. So did the conspicuousness of his Sunday revival meetings in otherwise all-white Sayville. After neighbors complained to police in November 1931, the intimidated town summoned sheriffs and the district attorney. When the assistant DA pushed his way into the house on Macon Street, he was punched unconscious by a Divine follower, “St. Peter.” Divine was arrested for disturbing the peace. “Yes, my success and my prosperity disturbs you,” Father Divine retorted to the community. The next month, as Long Island awaited his trial, Father Divine spoke at a number of rallies, one of the larger at Rockland Palace in Harlem, where a hall that held 5,000 overflowed. Father Divine seated fifty people up front, about half of whom were white. His point about integration could not be overlooked.
Later, when the case of Sayville v. Divine was heard, he would be convicted in his municipal case—and the judge would, by strange coincidence, die a few days later. Father Divine was exonerated upon appeal. Father Divine allowed observers to speculate that his persecution by the judge and plaintiffs had somehow led to the judge’s death. In the course of the proceedings another former DA, James C. Thomas, had taken up Father Divine as a civil rights cause. “To allow an incident of this nature to go unchallenged is to weaken the foundations of democracy in the United States,” Thomas’s statement read. Earlier that very year, authorities had arrested nine black teenagers for the alleged rape of white girls on a Southern railroad freight train, and suddenly there was a new consciousness in the country about even small incidents such as Sayville’s. The whole story served to increase Father Divine’s status in the black community as an independent and race-blind leader. Still, even he and figures like him were not creating jobs. And the new gap between black and white unemployment persisted. In Pittsburgh, blacks had been 38 percent of the unemployed in the first half of 1931, even though they were only 8 percent of the population. In Chicago blacks made up 16 percent of the unemployed, though they were only 4 percent of the population. For all groups, the problem became not merely unemployment but the duration of joblessness—one year, two years now.
On Christmas Eve in 1931, the New York Times carried what seemed a new kind of story. A couple from New York City had retreated to a stranger’s empty cottage on the edge of the Catskills to die. The young pair had made their way to the area in search of employment, investing all but twenty-five cents of their cash on the journey, but had failed to find work. “Finding none,” the Times reported, “they went into the cottage, preferring to starve rather than beg.”
A constable discovered the man, Wilfred Wild, and his wife in the lakeside cabin after three days, “at which point the wife, age 23, was too weak to walk.” As the Times wrote, the officials reacted in the manner typical of the period: “An effort is being made to obtain employment for them, but if this fails they will be sent back to New York.”
Just a month later, in January of 1932, author Florence Converse, a Wellesley grad, published a poem in the Atlantic Monthly asking:
“What’s the meaning of this queue,
Tailing down the avenue,
Full of eyes that will not meet,
The other eyes that throng the street…
To see a living line of men
As long as round the block, and then
As long again?…”
“All lines end, eventually—
Except, of course, in theory.”
The poem was about unemployment, but it had an additional point—a deadly one. American common sense was failing. The downturn was proving the falsehood of pragmatism’s old thesis: that “all lines end, eventually.” Perhaps the country was now entering new territory, the realm of theory, where lines did not end and must always be addressed.
And now, as the country began to feel panic, the world of theory—the world of the pilgrims—began for the first time to have political potential. In Congress, lawmakers began to search for scapegoats. Wright Patman, the Texan who lobbied for the veterans, now put forward the resolution to impeach Mellon that he had warned of the year before. “If we get rid of Mellon we’ll have a chance to restore prosperity,” Patman said. The basis of Patman’s attack was an old codicil, ancient legislation, Section 243 of a law from 1789, that had been created by the first Congress of the United States and limited the amount of commercial involvement permitted for cabinet officers. Fellow congressmen were shocked at the boldness of the move: in a flurry “page boys moved like shadows about the chamber, looking for law and reference books,” the New York Times reported. Patman charged that the fact Mellon owned shares in shipbuilders and companies violated the law. But previous Treasury secretaries had owned stock in various companies and had not been accused. What’s more, Mellon had renounced his corporate directorships upon first becoming secretary. Mellon had been in office ten years; his holdings had not changed, but the times had.
The same day that Patman called for impeachment, 15,000 unemployed descended on Washington, many carrying pup tents to camp in. This was not the Bonus Army but rather, quite simply, a group of desperate workers. They were led by Father Ja
mes R. Cox of Mellon’s own Pittsburgh. There was a new national feeling that somehow the United States could not go on, that the time had come to target some of the wealthy. In the same issue of the New York Times that carried the Mellon impeachment report, Governor Roosevelt spoke out against the “increasing concentration of wealth and power.”
That same month the populist from Louisiana, former governor Huey Long, was sworn in as a U.S. senator: Long wore purple pajamas when he entertained the press before the ceremony. Once on the Senate floor he cast his first vote in support of legislation barring government loans to companies whose presidents were paid more than $15,000 a year.
By February 1932 Mellon had resigned; by April he was on the ocean liner Majestic, headed to Southampton to serve as ambassador to the Court of St. James.
Though Patman did not know it, this banishment may have been welcome, for it led to a new and rewarding phase in Mellon’s life: a phase in which he could think about art. David Finley, his Treasury colleague and art adviser, sailed with him. Mellon took his own collection—at least the ones whose transfer would not be damaged by the change in climate—to adorn his new home at Prince’s Gate. His son-in-law David Bruce suggested he have a look at a painting of the Indian princess Pocahontas owned by Francis Burton Harrison, a former congressman. Mellon bought it. In 1931 he had written his son Paul, who was studying at Cambridge, that he hoped Paul was “having some time to spend at the National Gallery as it will be useful for you to have some knowledge of the important pictures in view of the contact you will have with works of a similar character in the future here.” The senior Mellon was hinting at something. The older he grew, the more Mellon valued pictures; Washington had nothing like that gallery. He had already created a trust into which to put art that would later be some sort of gift to the government. In his retirement from the Treasury, Mellon’s mind unfolded and ranged.