“Like most politicians, especially those with lots of power here in Washington, Franklin has a very hazy sense of money—he seems to think money comes out of thin air. So when he creates yet another of his jobs programs that costs say 100 million dollars, the money has to come from taxes, but Franklin thinks I just have to run the printing presses a little longer. And that is a major problem. Here’s an example for you. Let’s assume that all of the 100 million dollars in tax comes just from taxing Mr. Ford. In other words, Mr. Ford had to give up that 100 million dollars of his own money in taxes to fund the jobs program.”
Louise frowned, “So what is the problem with that... Henry?”
“Well let’s say Mr. Ford gave up 100 million dollars to create a government jobs program. Now if it was still Mr. Ford’s 100 million, do you think Mr. Ford, who is known to be a scrooge, would watch his—his—100 million dollars very, very carefully? Of course he would, it’s his own money after all. But if it is assigned to Rex’s old agency, or another bureaucrat’s agency, do you think they would look after it so carefully? No. All these government people think I create the money with a printing press. You see, government never really creates value or worth, it simply re-distributes wealth generated by the real creators, like Mr. Ford. Government simply taxes, it does not go into the marketplace and battle with competitors. It just makes pompous laws made by government people who see themselves as superior beings to the roar and rabble of the business men, who they see as poorly educated, crude, and vulgar.”
“Yes, but Henry these people in the job’s program spend money, which is good for the economy, right?”
“Of course, but the same would be true if Mr. Ford paid them.”
“So what is the difference? Both Mr. Ford’s people and the job’s program people spend the 100 million, so that is the same?”
“Actually my dear, it is not the same. Let’s assume the 100 million dollars is used to make cars, cars made by Mr. Ford or cars made by government factories using the 100 million in tax money that was extracted from Mr. Ford. Now in the case of Mr. Ford, he can produce let’s say 100,000 cars, while the government with its red tape, and political appointments, and inherent inefficiencies would only produce 50,000 cars.
“Here’s an example: I know for a fact that Mr. Ford sends his mechanics and engineers to scour junk yards around the country to minutely examine his old junked Ford cars. And these men all have to tell Mr. Ford what parts and components are still in good condition, so Mr. Ford can reduce the cost of those over-built and wasteful components. You see, my dear, Mr. Ford’s goal is to have all the car wear out at the same time. By doing this he can reduce the price of the car to the customer, as it is cheaper for Mr. Ford to make these cars. Now that is pure American genius at work—no government official would ever have the imagination to consider such an idea—not in a thousand years. All these bureaucrats think of is the pecking order in their department and how they can get to the next rung on the bureaucratic ladder. And because Mr. Ford is a skin flint, and because it is his money, he watches it carefully, and he fires lazy and incompetent and inefficient workers. But Rex and his brethren will simply smile benevolently and will indulge the lazy and slothful, rather than fire them. Do you know that no CCC or WPA worker has ever been fired?”
“So you mean Mr. Ford will make the 100 million dollars work harder?”
Morgenthau smiled, nodded, and leaned back in his chair.
Louise’s elegant eyebrows rose.
“You see, it is not just in Germany that politics is a dirty business. I know for a fact that without WPA workers, the ‘36 race would have been extremely tight. Two Gallup polls as late as July, 1936, had Landon—he was the Republican candidate—winning the Electoral College. But then Tugwell, Hopkins, and the other Brain Trusters opened the spigot. And the results were that Franklin carried the Electoral College by 523 to eight—one of the greatest landslides in American history.”
He opened his jacket pocket and removed a cigar, “Do you mind?”
“Of course not.”
Smoking made Morgenthau more reflective. He said pensively,
“Actually I think the election of ‘36 has changed the country permanently and I am not sure for the better. I’ve spoken to both the Democratic National Committee chairman, a man named Farley, and his right-hand man at the DNC, Emil Hurja, and they both actually boast about spending money for votes—they boast about buying votes; they’re worse than the late Louisiana Kingfish ever was. Now you may call me old-school, but I think that is wrong. What these two did was to promise projects to marginal states. So if a state was borderline and especially if it held a lot of electoral college votes, then—hey presto—lots of additional New Deal projects were announced in the five months leading up to the November general election.
“The worst of it is that now the average person thinks government money is simply printed by my department. Unfortunately all I print is little bits of paper with some ink on them, bits of paper that have no value. What gives these bits of paper value is the guarantee that the U.S. government will honor the bits of paper. And the only way any government does this is by being solvent, and the only way to be solvent is to increase its own income by taxes. You know that is the reason the President repealed Prohibition, so he could tax booze. And if you want an example of what happens when a government is not solvent, look no further than what happened in your country when the bloody-minded French invaded the Ruhr in 1923. So that is why I see the prior election in 1936 as a watershed.”
Louise asked, “Why is that a problem?”
Morgenthau looked at her and said,
“You are an exceptionally beautiful woman, and you’ve got more brains than most men. I hope you plan to stay in the United States, as we need people of your caliber.”
Louise blushed at this kind and genuine compliment.
“Let me tell you a story. Once upon a time, there was a big country that I will call the ‘Middle Kingdom’ and the people in the Middle Kingdom were very advanced and they made many items that Europeans wanted, such as tea and silk and porcelain. And the emperor of the Middle Kingdom did not like foreigners at all and tried to stop all trade, as he saw trade as immoral and dangerous. Of course, this did not work, and the trade with the Europeans, especially the English, flourished. With good reason, the Middle Kingdom did not trust these ‘foreign devils,’ and the Middle Kingdom insisted that the Europeans pay in silver. Now this was particularly burdensome for the English, whose currency was based on gold not silver.
“Nevertheless the somewhat desperate English went along. Then some bright spark at the British East India Company had the idea of introducing opium grown in British India to replace the silver. Needless to say the Emperor was justifiably outraged at this—trying to destroy the lives of millions of his subjects for 30 pieces of silver, as it were. And opium is terrible—it is a highly addictive and extremely dangerous drug. It always amuses me to think that Christian England would think it fit and proper to destroy the lives of millions of people. Whole villages were destroyed as the villagers all ‘chased the tail of the dragon,’ as smoking opium was called. Crops were left to rot in the field. As often happens, we Yanks got into the story a little late in the game, and the largest opium trader in the U.S. was the Boston firm of Russell & Company. And the young star of the company was a 24-year-old Yankee named Warren Delano.”
Louise was bored, “And?”
“And young lady, that is what we are now doing—we have turned our American voters into addicts. Under President Roosevelt, now voters expect entitlements. They are starting to expect the Federal government look after them in all ways. The wonderful ideals of independence, of personal responsibility, of thrift, of hard work, and of self-reliance are all being dissipated and destroyed. So the very principles that made this country great—the pioneering spirit of the people in covered wagons and the like—are being reversed. People are now trading their freedom for their own personal opium and for
serfdom. But rather than being Russian serfs to the czar 100 years ago, now they are serfs to the President’s dictates; farmers now need licenses to farm; manufacturers are banned from competing; prices are fixed and rigged.”
Confused, Louise asked, “Delano is the middle name of the President, isn’t it?”
Morgenthau nodded.
“How is that?”
Morgenthau smiled, “Warren Delano was Franklin’s grandfather.”
Louise eyes widened, she was about to speak, but Morgenthau beat her to the punch,
“Yes, the President of the United States has a grandfather who destroyed the lives of millions of people by selling them a vile and despicable drug. In short, President Roosevelt’s grandfather traded in death and misery of millions.”
Morgenthau was lost in thought wondering how close the President’s morality was to his grandfather’s.
For the first time in the evening, Louise looked directly into Morgenthau’s eyes.
Hesitantly she said, “Does this relate to these notes from the Congressional Record?”
She passed him two small sheets of cream note paper she had taken from her sky-blue crocodile Hermès handbag.
Both were typewriter written; the first read,
“Now, gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong, as far as I am concerned, somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. We have never taken care of them.”
The second typed sheet of note paper read,
“And as I say, all I am interested in is to really see this country prosperous and this form of Government continue, because after eight years if we can’t make a success somebody else is going to claim the right to make it and he’s got the right to make the trial. I say aftereight years of this Administration we have just as much unemployment as when we started.”
Morgenthau smiled, “I see your typist even copied verbatim the error of ‘aftereight’ from the record, a nice touch.”
“This is when you made an appearance in front of the House Ways and Means Committee in May 1939, right?”
Morgenthau nodded.
“Is this still your view today, sir?”
Louise deliberately said “sir” to make herself even more excited. Her nipples were almost painful in their enduring excitement. She smiled to herself that dry economic theory could do this to her 24 year old body, then in the same second she realized that it was actually the proximity to power that was making her so wet, not the theory of production and arcane politics. She had sampled a large number of men since arriving in America two and a half years ago; now she got excited very easily and she needed constant scratching of her new itch. Back in Germany, she was a healthy girl with healthy appetites, but under Schneider’s tutelage—and practical training—she had become insatiable; she needed to feel a man inside her every day; in contrast to her decorous way in Germany, now she had become the aggressor. And it was a feeling she adored.
“How old are you?”
“I am 24 years old. But 25 at my next birthday in three months.”
Both of them laughed at the comment that all six-year-old boys make.
“You have to be careful here in Washington. For a woman who is so scintillatingly attractive as you, well, I feel like your father giving you advice.”
“You are very kind and sweet... Henry.”
Louise was madly lubricating.
“Just be careful, my dear. I have to go and see Franklin now, so I am afraid I have to leave you now. But, you know, you should meet Rex so he can give you his perspective himself. I can arrange that if you like. Give me your card and I will have Rex’s secretary arrange a tête-à-tête with Rex for you next time you’re in Washington.”
Louise realized she had hit another seam of gold, “That would be wonderful.”
“It’s the least I can do, and I owe it to Rex to let him put his views to you directly.”
With that “Henry” rose and shook her hand. He left. Louise sat and marveled at her good fortune to meet such a gentleman.
Louise was dripping wet; she could actually feel her juices starting to run down her inner thighs; thank God her skirt was black and knee length; she was sure there was some of herself on her skirt.
But the proximity to such power, and such eloquent power at that, had aroused her more than she wished to acknowledge. She knew she needed to be satisfied. She smiled to herself: the benefits of banking friendships. She walked over the bar, it was empty.
“Peter, you get off work in 30 minutes, don’t you?”
9: The Little Flower’s Helper
Washington
Monday, 21 July 1941
It had taken Henry morgenthau only a few long-distance telephone calls to New York to summon Rex Tugwell to Washington. The overt reason Morgenthau gave Tugwell was to review some ideas the Treasury had; the real reason was for Rex to meet the reporters and especially Louise. While Tugwell was nominally based in Manhattan, his own personal opium once tasted could never be forgotten, so Rex agreed with alacrity. Truth be told, the Wall Street crowd—with their constant demands for real results and profits—had bored Rex, and his work for the Little Flower was tedious and his policies were being blocked. Any excuse to return to his beloved Shangri-La in Washington was a welcome relief.
The same five reporters met Rex Tugwell at the Willard, and many of the questions were actually repeats from the previous dinner with the Treasury Secretary. The handsome British reporter was present. It seemed to Louise that he was more subdued and his entire intake that evening was a single glass of wine. Perhaps his boss had slapped his wrist? Still charming, just sober this time.
For Louise it was a re-run of the first dinner; Morgenthau had told Louise when she had called long-distance from Chicago what to do. (Schneider had sent her to the office in Chicago, which consisted of one bored, but dutiful, German frau who answered the switchboard with a charming German accent.)
Sadly, Peter had his night off, and the bartender who served Louise was a short, fat surly man of Spanish extraction who was losing his hair. Hector fetched Louise her standard glass of champagne, but the man had the conversation ability of the Egyptian Sphinx. Louise was relieved when Tugwell sauntered over and suggested a table by the window.
Louise immediately noticed two things about Tugwell: that he was handsome, and that he was “interested.” The second did not mean that she was expecting a pass, but that if a pass came, she would not be surprised. His handsomeness consisted of a number of features—his thick, wavy hair; his open, honest face; his liking of a cocktail; and his genuine sense of adventure. All these things were apparent. The trained agent in Louise later noted with approval that he had downed four martinis with dinner.
Rex explained, with a little too much pride, his history since Washington,
“My office at American Molasses was at 120 Wall Street, that’s just past Water Street; that used to be the old shoreline of the East River, thus the name ‘Water’ Street. So I crossed the Styx, as it were, and joined the underworld. That job was OK, but I prefer working for the Mayor.”
To none of the reporters’ interest, he laboriously explained that “Fiorello” in Italian actually meant “little flower,” and that at all of five feet in height it seemed to fit Rex’s New York boss perfectly.
The dinner droned on and on. A sense of horrible boredom descended on the table, it was like a school class on a dreary, wet Wednesday afternoon when the classroom was filled with the smell of wet and dank clothes. Finally, the dinner finished; the reporters were all relieved; Tugwell didn’t notice the tedium as he had been going on and on about his favorite subject—the President of the United States. The five reporters thanked Tugwell and they left.
Louise sat at her now familiar perch at the bar. The Spanish bartender
studiously ignored her, which was just fine with her. A moment later, Tugwell sat down next to her; clearly Morgenthau had briefed him.
With no introduction or small talk, he announced,
“I still come to Washington from time to time. I met with Henry this afternoon. I think you know Henry.”
Louise nodded, and quietly asked,
“So Mr. Tugwell, what is President Roosevelt really like?”
Tugwell, ever the fever-eyed evangelist, skipped the obligatory “call-me-Rex,” and started his spiel,
“He is a genius. It’s that simple, he is a genius and he is kind and gentle, while being tough at the same time.”
Turning her head a little coquettishly to one side, Louise asked,
“So why did you leave?”
As Louise confessed later to Schneider, her question was the height of stupidity. Yes, Tugwell was well and truly liquored up—and this is all that saved her—but the question was too strong, too early. She cursed herself when Tugwell, flushed and flustered, started to spit out a senseless collection of words. Louise saved the situation by quickly answering her question,
“I suppose all your work had been completed with the NIRA and the Relocation Agency, and your great success with the green belts, like the Greenbelt in Maryland, and I suppose you must have felt a little like Alexander the Great when he wept when he realized he had no more worlds to conquer.”
With this reference to antiquity, Tugwell did relax, and the martinis in his gut also helped to calm him.
“Yeah, I guess you could say that. Yeah, that’s the ticket—‘no more worlds to conquer.’ Yeah.”
Louise made a mental note to thank Schneider for Schneider’s complete case book notes on Tugwell. Without this knowledge, Louise would have been sunk. And Louise would reward Schneider in the way that Schneider most liked.
“Well, you know, Miss Koch, you hit the nail on the head,” Tugwell said, emptying his brandy. He ordered another, and asked Louise if she would like more champagne; she shook her head. Desperate to recover the conversation, Louise smiled her most alluring smile and sat back in her chair so as to give Tugwell the full effect of her body and her clearly visible nipples though her peach-colored silk blouse.
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