Roosevelt’s decision to adopt a style of modern-day populism was both tactical and sincere. It expressed a sense that had been gnawing at him for well over a decade and was possibly related to the leveling impact of polio. The handsome, young pre-1921 patrician-politician may always have had progressive convictions, but the elite society in which he moved so easily and found most of his significant relationships had tempered them. Polio placed him at an awkward remove from many of that society’s events. Increasingly, he found himself marginalized and at Warm Springs in the company of ordinary people struggling as he had, but without his wealth, to come to grips with an equalizing disease. Polio had brought him to rural Georgia and the routine poverty that was part of its atmosphere. Roosevelt’s surface geniality usually overshadowed the harshness that increasingly crept into his speeches, but he seems to have developed real anger at smug elites.
For most of his life, he had lived on inherited wealth and the episodic generosity of a few friends. His only real managerial experience had come during his service as assistant secretary of the navy. He seems to have had few contacts among the entrepreneurial rich. Perhaps his closest comrade among the idle rich was his cousin by half-brother Rosy’s marriage, Vincent Astor, a socially conscious philanthropist who fancied himself a dashing yachtsman and gloried in being photographed in his naval reserve uniform. Financially sustained by the proceeds of an enormous family trust, Astor all but worshiped his relative in the White House. Both men found it easy to disdain money-grubbers.
The president’s emerging rhetoric must also have entailed some cool calculation. By 1934, with the Depression far from licked and tens of millions living in misery, a radical tide was gathering. Venerable socialist author Upton Sinclair staged a spectacular, if unsuccessful, campaign for governor of California. The demagogic governor of Louisiana, Huey Long, began to establish himself as a national presence with his Share the Wealth clubs. Father Coughlin promoted a populism of the Right. Left-of-center progressives began to assay the feasibility of a third party. Violent strikes raised the possibility of a revolutionary labor movement.
Against this background, Roosevelt’s shots at the rich became more prominent. “I am speaking of individuals who have evaded the spirit and purpose of our tax laws,” he declared in his 1934 annual message to Congress, “of those high officials of banks or corporations who have grown rich at the expense of their stockholders or the public, or those reckless speculators with their own or other people’s money whose operations have injured the values of the farmers’ crops and the savings of the poor.” He especially focused on “tax evaders,” a carefully chosen phrase evoking images of the notorious gangster Al Capone, who had landed in Alcatraz for failing to pay income taxes.17
His prime target was Andrew Mellon. Enormously wealthy from a banking empire headquartered in Pittsburgh, Mellon had been secretary of the Treasury under Warren G. Harding, Calvin Coolidge, and Herbert Hoover, who, finding him too opposed to government intervention in the Depression, had packed him off as ambassador to Great Britain. A stalwart advocate of hard money and low taxes who had believed in letting the business cycle take its course whatever the price, Mellon sported a large mustache and a dour demeanor that made him the clichéd image of a Union League reactionary. Among Democrats, he was a leading villain of the 1920s. He also had expended millions of his personal fortune in amassing one of the world’s foremost Renaissance art collections, which he intended to make the core of a great national museum.
The Roosevelt administration’s examination of his income tax returns suggested that Mellon had engaged in transactions with family members and with a trust that owned much of the art in ways that minimized his actual income and hence the taxes he paid. Under Republican administrations, the Bureau of Revenue, a division of the Treasury Department, had ruled such dealings within the law. To Roosevelt, Henry Morgenthau, and most liberal Democrats, taking advantage of loopholes in the law was unethical and presumptively illegal. (The question of ethics cut both ways. Roosevelt openly admitted that he personally had reviewed Mellon’s supposedly confidential tax returns.)18
Attorney General Homer Cummings was reluctant to prosecute tax avoiders who had complied with the formalities of the law, as he believed that such cases stood little chance of success. Roosevelt and Morgenthau were not. The administration dispatched Assistant Attorney General Robert Jackson to pursue a criminal indictment before a federal grand jury in Pittsburgh. The grand jury refused to indict.19
The administration thereupon pursued a civil suit for $6.5 million against Mellon in federal tax court. Mellon shot back with a statement alleging “politics of the crudest sort.” The case proceeded slowly. In late 1936, the dying tycoon offered his art collection to the government, along with financing for a grand building on the Washington Mall to be called the National Gallery of Art. The administration had little choice but to accept. The National Gallery, completed after Mellon’s death, still houses at its main entrance a dedication plague engraved with his name along with those of Roosevelt and Morgenthau.20
The tax court ruled after Mellon had passed away, finding that his estate owed the government approximately $400,000 due to errors in his return. It also pointedly declared that he “did not file a false and fraudulent return with the purpose of evading taxes” and observed that the law extended to every taxpayer the presumption of good faith in his business dealings. Lawyers for both sides agreed on a settlement of $480,000. Over the next several years, the administration pursued other prominent individuals on tax charges with mixed success.
Republicans charged that Roosevelt and Morgenthau were waging demagogic class warfare for political gain. In fact, the merits of the various tax cases varied, but the administration had allowed moral indignation at Mellon’s legal tax avoidance to lead it on a course more morally problematic than the behavior it condemned. The Mellon case was but one example of how the New Deal was reshaping American politics along deeply felt ideological lines and of Roosevelt’s unattractive inclination to employ the government’s police powers against political foes.
Herbert Hoover had been among the more activist presidents in American history with his own attempts to cope with the Depression. Roosevelt’s efforts dwarfed his. In the first full year of his administration (fiscal year 1934), the president had increased the federal government’s expenditures by 43 percent and created huge bureaucracies to control a largely unregulated economy. His efforts generated understandable shock at the scope of change and created a backlash of outrage among Republicans and conservative Democrats.
Republicans especially found the partisan temptation to denounce waste, fraud, and abuse (inevitable in such programs) overwhelming. While the Republican Party had long been one of activist economic development, its dominant wing had advocated subsidies and tariffs, not restraints on business behavior. The Democratic Party for an equal period had possessed its own conservative establishment, made up of sound-money men like Roosevelt’s father, who differed from the Republicans mainly on the tariff. This wing still existed in the 1930s, linked to moneyed families such as the du Ponts and establishment pillars such as the party’s 1924 candidate, John W. Davis. Most southern Democrats, moreover, possessed an inbred fear of federal bureaucracy and coercive regulation that dated at least to the not-so-long-ago days of Reconstruction. All found Roosevelt’s innovations exotic and ultimately threatening.
By early 1934, with the NRA floundering, a new American Right was forming to oppose the president and his New Deal. Republican Representative Hamilton Fish Jr., a longtime antagonist who represented Roosevelt’s own congressional district in New York, wielded a rhetorical flamethrower: “This administration has copied the autocratic tactics of fascism, Hitlerism and communism at their worst.” Ogden Mills, who as outgoing secretary of the Treasury had collaborated with the administration on the Emergency Banking Act, compared Roosevelt to the Roman emperor Diocletian, who he claimed had debased gold
coinage, fixed commodity prices, regulated all wages, decreed the plowing up of one-third of the vineyards of Italy, instituted a vast program of public works, and taxed to the limit.21
In August 1934, a group of conservatives, many of whom had bankrolled the struggle against Prohibition, formed the American Liberty League. Some were Republicans but most noticeable were the Democrats: Jouett Shouse, John W. Davis, and Al Smith. The league declared that its objectives were to defend the Constitution and preserve liberty. It especially deplored the NRA, the new militancy of labor, and above all what Smith called “the baloney dollar” after the devaluation of 1934. The Liberty League seemed to be raising large sums of money and looked to be a force in the midterm elections. In September, Herbert Hoover issued an angry manifesto, The Challenge to Liberty, which called for a reassertion of the ethic of “rugged individualism” in American life. As with Smith’s apparent about-face, the book’s message seemed at odds with Hoover’s past as a cautious progressive and advocate of government-led economic organization.22
The Liberty League provided the administration with the enemies it needed and facilitated a form of political jujitsu that rendered Republican conservatism more an object of comic scorn than a looming presence in American politics. Roosevelt himself established the Democratic line at a press conference. He allowed that the primary objective of the organization seemed to be “love thy God but forget thy neighbor,” adding that “God” seemed to be property rights. He went on to enumerate other rights—to a job, a home, and an education—implicit in the commandment to love thy neighbor as thyself. He had, he told the newspapermen, been convulsed with laughter for ten minutes after reading a New York Times article characterizing the league as the answer to a Wall Street prayer. The next day, Democratic National Committee chairman Jim Farley, no firebrand but a shrewd politician, urged a Democratic rally in New Jersey to support the president’s fight against “the selfish forces of money, power, and greed.”23
Widely characterized as the epitome of avarice, the Liberty League became a liability to candidates it supported and a millstone around the neck of the Republican opposition. Despite all the attention and high-profile support it attracted, it was not equipped to play an active role in electoral politics beyond staging a few speeches. What might have been a serious dialogue about the capabilities and limitations of government became a farce.
The midterm congressional election campaigns amounted to a referendum on Roosevelt and the New Deal. Across the country, Democratic candidates for national office depicted themselves as the president’s steadfast followers. Roosevelt himself made a conscious decision to stand above the fray. He made his only nationally broadcast speech, billed as a fireside chat, six weeks before the election. It made no concession to his critics; nor did it engage in Republican bashing. Hailing the NRA as an achievement that had facilitated the reemployment of 4 million workers, he admitted that it was an experiment requiring some refinement. To those who suggested that Britain’s coalition National government, dominated by the Conservative Party, had been more successful in stabilizing the island’s economy, he responded that British conservatism, far more socially reformist than its American cousin, was somewhere to the left of the New Deal. Most tellingly, he underscored his commitment to full recovery and greater social equity. “I am not for a return to that definition of liberty under which for many years a free people were being gradually regimented into the service of the privileged few.”24
That September, perceptive journalist Anne O’Hare McCormick wrote of the change the president and his entourage had wrought. Washington had replaced Wall Street as the source of national energy and speculative enterprise. Roosevelt had supplanted the titans of finance and industry as America’s hero. “When before in this country, except during campaigns, have photographs of a living President been hung in shops and homes, restaurants and gas stations? How often has a President evoked such emotion from a hard-pressed people as greeted Mr. Roosevelt in his recent trip across the continent? . . . [I]t has little to do with policies or reason. The President is more widely questioned and criticized than he was a year ago—and also more popular.”25
On Election Day, Roosevelt cast his vote at the town hall in Hyde Park, performing with ease for newsreel cameras as he went through the motions of identifying himself to the election board clerk. (“Name, please?” “It’s still Franklin D.”) He spent half a minute with the voting machine, posed again for the cameras, then left for the family mansion, where he would spend the evening listening to returns.26
No intelligent observer expected a Republican victory. Jim Farley, as always cautious but prescient, had as early as August predicted that the Democrats would maintain their strong margins in both houses of Congress with gains balancing some losses. As the results came in, he found himself presiding over an even bigger sweep than he had expected. By the time all the returns were final, the Democrats had increased their representation in the Senate from 60 to 69 and in the House from 310 to 319.27
How was such a result possible in the wake of so inadequate an economic recovery? Part of the answer was clearly Rooseveltian charisma and guile. No president had so fully and effectively exposed himself to a mass media now capable of directly conveying his charm, command, and concern for ordinary people. On all counts, Roosevelt eclipsed any visible Republican leader. The other part of the answer was simple pragmatic calculation. The nation might still be in the grip of a terrible depression and unemployment might still be at disaster levels, but millions of Americans were better off than they had been two years earlier—with direct government relief, temporary public works jobs, and refinanced mortgages. The Republicans, a few progressive dissenters aside, had nothing to offer but criticism and a return to Hooverism.
The election amounted “almost to a political revolution,” in the words of a Cleveland Plain Dealer editorial. The old Kansas progressive Republican William Allen White remarked that, although “the forgotten man is still forgotten,” Roosevelt had been “all but crowned by the people.” If the Republican Party were to survive, White admonished, it would have to redefine its conservatism as somewhere in the “middle left” and prepare for a comeback when an inchoate New Deal, built around the idea of taking away from the rich and giving to the poor, foundered.28
White’s commentary astutely dissected both the president’s success and the specters looming in the future. Roosevelt had given the nation leadership, hope, and near-term succor. But he had not restored prosperity, and his attraction to sweeping reform got in the way of his doing so. The administration’s failures had left it vulnerable—if the Republicans could get beyond right-wing naysaying.
Chapter 16
Toward “A New Order of Things”
Origins of the Second New Deal, 1935
Roosevelt could savor the Democratic victory in the November 1934 congressional elections as a vote of confidence in his charismatic activism. But the present remained bleak economically and uncertain politically. Unemployment still hovered close to 20 percent. A drought was turning much of the Great Plains into a giant dust bowl, adding thousands of farmers to the relief rolls. The New Deal faced criticism from both the disgruntled Right and the ideological Left and, most urgently, from an emerging populist opposition strengthened by charismatic leadership that obscured its impractical nostrums. In addition, the president’s programs seemed to hang by a slender, fraying thread, threatened by their ineffectiveness and challenged in the courts.
As the First New Deal struggled for survival, Roosevelt responded with a second.
He faced a bevy of dissenting politicians from the left. They had little criticism for what the New Deal had done and much for its failure to pursue possibilities for transforming the United States into a cooperative commonwealth. Several were of Republican-progressive background: Senator Robert La Follette, his brother Governor Phillip La Follette, Representative Thomas Amlie (all of the Wisconsin Progressive P
arty), Minnesota’s Farmer-Labor governor Floyd B. Olson, progressive Republican senator Gerald Nye of North Dakota, and recently elected Fusion Party mayor of New York Fiorello La Guardia. Others were independent Democrats: Senator Burton K. Wheeler of Montana, Senator Edward Costigan of Colorado, and Representative Maury Maverick of Texas. Utopian socialist and best-selling author Upton Sinclair snagged the Democratic nomination for governor of California in 1934 and attracted national attention with his EPIC (End Poverty in California) platform before losing the general election. An ideological cousin, Socialist Party leader Norman Thomas, gathered few votes in his tries for the presidency but enjoyed wide respect for his melding of Marxian socialism with a larger Christian reform tradition.
A broad spectrum of intellectuals and activists had established the League for Independent Political Action in 1929. They advocated a collectivist democracy, awaited the near-certain failure of the New Deal, and anticipated Roosevelt’s defeat in 1936. That, they believed, would set the stage for the long-overdue collapse of the incoherent Democratic Party and the rise of a new Left-liberal party that would capture the government in 1940. In early 1935, with the New Deal floundering, their belief that the time was ripe for a new force in American politics had considerable plausibility.
From the perspective of the White House, the radicals’ challenge was less intimidating than one emanating from another set of extremists far more skilled at disseminating a message and arousing resentments. Their leading representatives were Dr. Francis Townsend, Father Charles Coughlin, and Senator Huey Long.
Townsend, a sixty-eight-year-old retired physician, advocated a generous pension system for old folks, to be funded by a national transactions tax (similar to what later would be called a value-added tax in Europe). The plan would boost a weak economy, he argued, because the recipients would be obligated to spend their stipend in full each and every month. The aged doctor’s often desperate constituency embraced his panacea with quasi-religious intensity.1
Man of Destiny: FDR and the Making of the American Century Page 30