The shame grew out of the inevitable difficulties of administering a hastily conceived and lavishly funded program that reached into practically every county in the country. The CWA had to appoint state “reemployment directors” (who might have little or nothing in the way of staff resources) and rely largely on them to coordinate local committees that did the hiring and supervised the projects. From the beginning, local Democratic politicians took charge and behaved as American politicians always had when handing out money and jobs. They took care of friends and, following a still common practice, often exacted kickbacks as the price of employment or business relationships.
Critics, mostly Republicans, railed against waste and corruption, scoring points with Americans who could locate themselves in the secure middle class. Hopkins did what he could to stop such practices, even bringing in army officers to act as state and regional supervisors, but the political system was well entrenched. Members of Congress, who controlled the appropriations, almost unanimously viewed a jobs program as a patronage vehicle and fought to be certain that it benefited them and their supporters. The New Dealers could not overcome them. In the spring of 1934, the administration terminated CWA as a distinct agency, although the FERA carried on some of its projects. Recovery, Roosevelt hoped, was just around the corner; large-scale federal relief would soon be unnecessary.
The Public Works Administration began to establish itself as a major force. Its head, the pugnacious and incorruptible progressive Republican Harold Ickes, had witnessed too many dubious examples of public contracting in his hometown of Chicago. He insisted on vetting large-scale projects with extreme care. The imperative of honesty overrode the need for a quick economic stimulus.
The PWA picked up a few big ongoing endeavors, including the huge dam already under construction on the Colorado River, christened Hoover Dam by Ickes’s predecessor, Ray Lyman Wilbur. Ickes, with typical peevishness, changed the name to Boulder Dam, a designation that stuck until the Republicans regained the presidency two decades later. Looking for jobs that could get under way quickly, the PWA outraged congressional progressives by investing $238 million in a pet Roosevelt cause: a major naval building program that implemented plans for two aircraft carriers, a heavy cruiser, three light cruisers, four submarines, and twenty-two destroyers. Roosevelt probably imagined the ghost of Admiral Alfred Thayer Mahan nodding approvingly. The PWA also made loans to hard-pressed railroads.1
Most PWA projects were developed at the state level, required matching funds appropriated by legislatures, and ranged from monumental engineering challenges to modest public buildings and bridges. The projects included construction of rural roads, huge hydroelectric dams, municipal sewage systems, great bridges, and transportation tunnels, as well as naval construction and work on rivers, harbors, and flood control. In July 1934, the agency estimated that it directly employed 600,000 persons and indirectly funded 1.2 million more.2
Ickes, sixty in 1934, presided over these commitments with fierce, curmudgeonly integrity. He personally examined major contracts, fought bureaucratic turf battles with other New Deal stalwarts, and often behaved with egregious self-righteousness. Despite these faults, he revitalized the Department of the Interior and ran an extraordinarily honest program of public improvements. He was unremittingly loyal to Roosevelt, who in turn considered him an invaluable political and administrative asset.3
Other relief programs appeared on the fringes of the New Deal: rural rehabilitation, subsistence homesteads, planned communities built from the ground up, farming co-ops. The Resettlement Administration (RA) consolidated these various endeavors under the directorship of Rexford Tugwell in 1935. Whether just outside large cities (Greenbelt, Maryland) or in remote Appalachia (Arthurdale, West Virginia), RA projects aimed to help long-term jobless workers and impoverished subsistence farmers. They assumed that Americans in need would shed their traditional individualism and embrace cooperative principles such as shared ownership and group responsibility. But, implicitly rejecting no-fault welfare liberalism, the RA chose its clients carefully through a rigorous application process.
The co-op programs were comparatively small but, when measured on a cost-per-recipient basis, expensive. Ickes constantly fretted over the cost of PWA-funded community projects pushed by the First Lady. (One planned West Virginia town was actually named “Eleanor” in her honor.) The president suppressed any doubts he may have harbored. Speaking at Arthurdale in May 1938, he justified the outlays as development costs in a pioneering venture that would ultimately “save human lives and human happiness as well as dollars in this march of progress that lies ahead of us.”4
All the same, the cooperative communities went against the American grain of individual ownership and self-reliance. New Deal programs that extended a helping hand or provided a salary in exchange for work were popular. But most Americans either recoiled from, or simply found incomprehensible, arrangements that, however comfortable, involved an administered collectivism. The Resettlement Administration would establish numerous farming cooperatives, providing cozy cottages, up-to-date mechanized equipment, and medical care programs, supervised by a team of project managers. Conservatives overheatedly denounced these exercises in benevolent paternalism as Stalinist collectivism. The beneficiaries themselves frequently grew restless and perhaps annoyed at being told what was best for them. Interviewing one on a successful RA plantation in Arkansas, Tugwell’s aide, Will Alexander, asked for a candid reaction. The grizzled hardscrabble farmer, probably better off than at any time in his life, said, “I believe a man could stick around here for five or six years and save enough money to go off and buy himself a little hill farm of his own.”5
By mid-1934, the New Deal had thrown unprecedented sums of money at the dual tasks of relief and recovery. Yet the economy remained weak. Harry Hopkins’s deputy, Aubrey Williams, estimated that 13 percent of the population was already on the relief rolls and that the number would increase as winter set in. A gathering drought in the midsection of the country added to the distress. He warned that a “gigantic relief task” lay ahead.6
The president himself preferred to change the subject. Speaking in Montana at Glacier National Park that August, Roosevelt denounced the “selfish few” who sought to appropriate national resources for private gain. He extolled “the splendid public purpose that underlies the development of great power sites, the improving of navigation, the prevention of floods and of the erosion of our agricultural fields, the prevention of forest fires, the diversification of farming and the distribution of industry.”7
Who dared argue against such causes? All the money thrown into efforts to help the unemployed and downtrodden had failed to bring back prosperity, but it had carried millions of people through a time of extreme desperation. Help from Washington, direct and personal, was the essence of the New Deal. Roosevelt was its face. His relief programs overshadowed efforts to impose the guidance of a reformist state on the underprivileged and the entire American economy.
With more than one-fifth of the population living and working on farms, there was general agreement on the necessity of large-scale government intervention in what had been a catastrophic free market for more than a decade. But no consensus existed on how to divide that aid between middling to large producers and the impoverished subsistence operators at the bottom of the heap.
Just forty-four years old in March 1933, Secretary of Agriculture Henry A. Wallace came to Washington with the enviable record of an eminently practical man who had excelled as an agricultural scientist and farm journalist. His material achievement concealed a restless, sometimes quixotic spiritual quest. He was, as hostile columnist Westbrook Pegler put it, a “spiritual window shopper.” He aligned himself with a small theosophic sect, the Liberal Catholic Church, neither smoked nor drank, sporadically practiced vegetarianism, and exercised vigorously. A Thirty-Second Degree Mason, he sought meaning in one of the order’s most mysterious symbols: t
he unfinished pyramid below a hovering triangle-enclosed eye that appears on the reverse side of the Great Seal of the United States. He successfully lobbied for its inclusion on the new $1 bill issued in 1935.
He was also a disciple of Nicholas Roerich, a magnificently bearded White Russian exile artist and theosophist, whom he addressed as “Dear Guru” in a series of letters that might conservatively be characterized as eccentric. Utilizing a term that appeared in his correspondence with Roerich, Wallace told FDR in the fall of 1933, “Mr. President, you can be the ‘flaming one,’ the one with the ever-upward surging spirit to lead us into the time when the children of men can sing again.” Roosevelt’s reaction to this exhortation is not known. Clearly, however, he saw Wallace as a link to progressive Republicans, appreciated his good judgment on agricultural policy, and valued his unqualified personal loyalty.8
Wallace surrounded himself with a motley group of aides and assistants, ranging from established champions of commercial farming who had fought for subsidies throughout the 1920s to younger, progressive-minded, sometimes glaringly urbanite lawyers and social scientists with broader agendas. The informal leader of the latter group was Rexford Tugwell, assistant secretary of agriculture until June 1934, when he became undersecretary.
Tall, handsome, and urbane, Tugwell conveyed a certain masculine glamour. Women flocked to his tumultuous Senate confirmation hearing. The Washington Post called him “the Administration Adonis.” Time magazine described him as “a connoisseur of dress [and] . . . an amateur of wines.” Like Raymond Moley’s in the Department of State, Tugwell’s assistant secretaryship was largely a post of convenience from which he could advise the president, but as a reformer-economist he saw agriculture as a free market system that required systematic planning. He got along well with Wallace, whom he rightly saw as a man of similar sympathies, without quite realizing the extent to which the secretary also felt bound by the practical limitations of the old order in agriculture.9
As Moley’s star faded after the fiasco of the London conference, which he presumably had been dispatched to save, Tugwell drew increasing attention from political observers. The most radical of the first-rank New Dealers, he operated as a wide-ranging advocate of the idea that government had to gain far more control over an economic system run by big business. Competition, he bluntly declared, was wasteful and inefficient. “Using the traditional methods of a free people we are going forward toward a realm of cooperative plenty, the like of which the world has never seen,” he declared in the spring of 1934. “If this be Socialism, let our enemies make the most of it!”10
Tugwell’s promotion to the new post of undersecretary placed him in a position usually reserved for a chief operating officer, not a policy intellectual, and exposed him to vocal skepticism from critics of the administration. He won Senate confirmation only after testifying that as a young man on the farm (primarily a fruit-growing operation for the family canning business), he had “followed the plow,” gotten mud on his boots, and raised a prize-winning calf. His interests in reshaping the American political economy, resettling the poor in cooperative communities, and pushing tough new food and drug regulation through Congress made him a lightning rod for attacks from the right.11
Tugwell drew wide attention, but the most important early appointment involving agriculture was that of George N. Peek, a veteran fighter for farm aid with immense standing among agrarian activists, to head the new Agricultural Adjustment Administration (AAA). The AAA would support commodity prices through acreage allotments assigned by local committees. Having served on the War Industries Board (WIB) during the World War, he had won the patronage of Bernard Baruch and developed strong credentials as an economic planner. Yet, in the end, he was a poor choice. Like most other advocates of farm relief in the 1920s, he wanted to support commodity prices through subsidized exports. He saw production controls as at best a temporary and ultimately immoral expedient. A friend of Wallace’s late father, he was not inclined to recognize the son’s authority.
When Peek demanded complete autonomy for his agency, Wallace rebuffed him and proceeded to appoint Jerome Frank as its general counsel. One of the great legal intellectuals of the twentieth century and a New York Jew, Frank put together a strong staff of young lawyers—quite a few also Jews—from leading law schools. A few were closet members of the Communist Party. All reeked of the big city, saw themselves as reformers, and worried that the agriculture program was hurtful to the toilers at the bottom of the heap. It did not help that one of them, Lee Pressman, cluelessly expressed concern for “macaroni growers” at a staff meeting.
Peek characterized the bright young men scathingly: “They all claimed to be friends of somebody or other and mostly of Felix Frankfurter and Jerome Frank. They floated airily into offices, took desks, asked for papers, and found no end of things to be busy about. I never found out why they came, what they did, or why they left.” Using his own funds, he hired a personal legal adviser.12
By the time the AAA could be staffed, cash crops were well into the growing season, and acreage allotments had to be enforced retroactively through a program of systematic crop destruction. Only wheat, sharply curtailed by a great drought affecting the midsection of the country, was spared. In the South, farmers plowed up every third row of cotton. In the Midwest, corn-fed piglets were slaughtered. The policy, a onetime improvisation, was the only way of cutting supply. Many Americans nonetheless found the destruction of food and fiber in a time of extreme want offensive.
Peek was among the dismayed. Moreover, he was appalled by efforts, emanating primarily from Jerome Frank’s office and supported by Tugwell, to control the pricing of goods produced by processors of agricultural commodities. Unhappy with acreage restriction, he searched relentlessly for foreign markets. In December 1933, he announced a plan to dump heavily subsidized American butter in Europe. Tugwell, acting secretary during Wallace’s absence from Washington, blocked it, telling Peek that “our agricultural trade cannot possibly be improved by selling abroad at a lower price than the market at home.” Wallace backed Tugwell, and Peek resigned. Accepting the resignation, Roosevelt effectively sided with Wallace and Tugwell. With Wallace’s acquiescence, the National Recovery Administration assumed the AAA’s industrial code authority. Tugwell and Frank had scored an important victory.13
Roosevelt appointed Peek a “special assistant to the president” with the mission of pursuing foreign agricultural trade agreements in coordination with the Department of State. For a time, it seemed that he might wield considerable influence, but Secretary of State Cordell Hull, a dogmatic free trader, had little use for subsidized commerce. Peek would leave the administration in December 1935 and shortly reemerge as one of its harshest critics.14
The new AAA administrator, Chester Davis, had been a close ally of Peek but was more open to the domestic allotment strategy, less combative, and confident he could reach an accord with Frank. Instead, the very success of AAA in implementing subsidized allotment agreements created new problems. In the politically crucial South, a region that produced an abundance of important high-seniority Democratic congressmen and senators, landowners generally refused to share allotment payments with tenants or sharecroppers. They often evicted those whose acreage now lay fallow. Davis and other agrarian traditionalists viewed this as simply an unfortunate by-product of the new way of doing business. To Tugwell, Frank, and the urban radicals in the counsel’s office, it was rank social injustice that had to be dealt with, all the more so because many of the dispossessed were black.
Partly due to internal conflicts over policy, partly because it was launched out of sync with the farm calendar, the AAA failed to provide immediate relief to its constituency. By the fall of 1933, with the general economy slumping after what had appeared a burst of recovery, agricultural prices were declining. In Iowa, the Farmers’ Holiday movement reemerged as shotgun-wielding farmers once again stopped dairy trucks and dumped the milk th
ey carried. The administration established a new agency, the Commodity Credit Corporation (“farm CCC”), which purchased surpluses from farmers at above-market prices and was especially critical in propping up cotton. For the remainder of the 1930s, the farm CCC, in tandem with the AAA allotment program, brought a significant economic recovery to commercial farming. But the course was choppy, the cost great, and the accumulating surplus enormous.
The New Deal had made American agriculture a ward of the government, dependent upon direct and indirect price supports. Most of rural America, its vaunted “individualism” notwithstanding, accepted the bargain. As the decade progressed, commercial farming would become profitable, and stored surpluses of nonperishable commodities would grow apace. Ironically, the return of rural prosperity would highlight the persistence of the still grievously impoverished subsistence farmers, tenants, and sharecroppers.
The weight of the American economy lay in industry and manufacturing. The primary organizer and regulator of those sectors was the new National Recovery Administration (NRA), which had to balance the wildly diverse interests of consumers and producers, businessmen and workers, large and small operators. The closest thing in the American experience to the NRA was the 1917–1918 War Industries Board, headed by Bernard Baruch, who had clearly thought himself the natural choice to run the new agency. Roosevelt, more than willing to tap Baruch’s largesse in campaign contributions, feared his likely freewheeling exercise of any power that might be given him. Instead FDR selected a Baruch aide since the WIB days, General Hugh S. Johnson (ret.), who had helped draft the National Industrial Recovery Act.
Man of Destiny: FDR and the Making of the American Century Page 27