Forgotten Man, The (46 page)

Finally what the secretary came up with to tell the boy was that “the United States had come through this terrific turmoil and that the individual in this country still had the right to think, talk, and worship as he wished.” Roosevelt, Morgenthau noted, merely replied by saying, “And add to that the right to work.” Later, Morgenthau wrote in his diary that he had not understood what message Roosevelt was sending. Within days, Morgenthau was even more distressed, for Roosevelt continued to press suggestions for spending. “If you want to sound like Huey Long, I don’t,” Morgenthau said hotly to President Roosevelt as the pair drafted a speech designed to reassure Wall Street of the Roosevelt administration’s intentions. In his memoirs Morgenthau would later take care to note that the speech had been “checked and double-checked—every word, every syllable, by the President.”

On November 10, the day after the Dow closed at 126, Morgenthau finally gave his speech to the Academy of Political Science at the Hotel Astor in New York. It may have been a comfort that Mellon’s own beloved aide and pallbearer, Parker Gilbert, introduced him. The war against the Depression, Morgenthau told the crowd, had required deficit spending. But the emergency was ending, and the “domestic problems which face us today are essentially different from those which faced us four years ago.” The government would have to cut spending—a painful argument for Morgenthau to make, given that
the project would include many New Deal cutbacks. Still, he had to do it, for “We want to see private business expand.” And then he unfurled a conclusion that he imagined would please Wall Street: “We believe that one of the most important ways of achieving these ends at this time is to continue progress toward a balance of the federal budget.”

That was when the laugh had come from the crowd—someone’s laugh of contempt. Morgenthau and his adviser Herman Oliphant, caught up as they had been in convincing Roosevelt to stick with their plan, later recalled their own shock at the audience response. They had pushed the president this far, and Wall Street had not rewarded them. It even seemed to be siding with Eccles. “We sit here and lose the feel of what the typical leadership of American finance is,” Oliphant said of life in Washington, “and it’s very illuminating to realize the hopelessness of trying to work with them.” The hurt was also compounded by fear that they may have misunderstood the president. Or been made to seem the fool.

Eccles for his part was also hesitating. Morgenthau’s November 10 speech sounded to him like something from another century—not at all what he and Roosevelt had discussed. The Fed chief’s confusion was doubtless not reduced when the president, early the following month—and after more bad news nearly daily—told reporters that the idea of a business recession was merely “an assumption.” In the same press conference the president also threw a bone to the business crowd—the announcement that he had recently received a very interesting memo from Willkie on a utilities matter, and that he intended to study Willkie’s thoughts very intently. Later, Eccles concluded sadly in regard to the recovery plan what others had concluded about the president on other matters: “It seems clear that the President assented to two contradictory policies because he was really uncertain where he wanted to move.”

THERE WAS YET A SECOND
contest among Roosevelt’s men. It was between those who sought the cooperation of larger businesses and
those who wanted to attack them. In New York, Berle considered that a solution might be guaranteeing wages in certain industries, “beginning with housing.” Such a plan, Berle reflected in his diary, “probably also means taking over the railroads,” as well as, perhaps, government “taking over both housing and construction.” He realized that would be an unparalleled infringement on private property. “But,” he wrote with a diarist’s sigh, “I do not see that it can be helped.” Balancing the budget would likewise have to go out the window.

Tugwell too was all for planning among economic leaders—and perhaps still hoping for an inroad back to Washington. The president, casting about, had him to dinner that month, and Tugwell took the chance to go over some basics with FDR. (“Rex was trying to educate the President in general economics,” noted Berle wryly.) In January, Tugwell and Berle would shepherd John L. Lewis, Thomas Lamont of J. P. Morgan, and others to the White House for a conference. The headline describing the meeting replicated headlines from the Hoover years: “Leaders with a Program for National Recovery to See Roosevelt Today: Cooperation Is Aim.” Donald Richberg was also pushing for cooperative planning.

Just as back in 1932, Roosevelt seemed to be receptive to the planning idea. Was charity the answer? In the autumn he had called for a nationwide charity drive: the names on the benefit lists were reported to include Lillian Wald, Ida Tarbell, Arthur Hays Sulzberger, Mrs. Roosevelt, Mrs. Dwight Morrow, and “Wendel L. Willkie.” At a press conference on the fourth day of January, the ambivalent president told reporters that he was thinking about renewing cooperation between government and business. Sensing ambivalence, Roosevelt scripted his way forward: “Don’t write the story that I am advocating the immediate reenactment of the NRA. But the fact remains that in quite a number of the code industries under NRA it was perfectly legal for the heads of all the companies in a given industry to sit down around the table with the Government.” Was allotting shares of business a good idea? asked a reporter, putting his finger on the old NRA problem. “Keep competition.”

At the same time, however, Roosevelt was listening to and following the advice of another set of advisers: the anti–big business crowd. From afar a bitter Moley—who, unlike Tugwell, was no longer coming down for occasional visits—noted that Corcoran, Cohen, Ickes, Hopkins, and Robert Jackson were telling the president he must use the opportunity of the downturn to move in for the kill when it came to big business. And the president was heeding them. In public remarks, Roosevelt’s men were speaking of “corporate tentacles” or “aristocratic anarchy.” Hugh Johnson, now out and embittered, called the group around Roosevelt “the janissariat,” a reference to Christian youths conscripted by the old sultans.

Corcoran and Cohen, whatever their ambitions, were mostly insiders, not ambassadors. Jackson, however, was someone whom Roosevelt increasingly viewed as a possible heir. Jackson, like Morgenthau or Eccles, had collected a set of specific instructions from Roosevelt—in Jackson’s case to define and prosecute antitrust violations, and, especially, to go after individuals. Sometimes—when he knew the targets involved, or liked them—Roosevelt suggested that Jackson soften. And always, Roosevelt took care not to harm those with special power to harm him. Learning from Jackson of a possible action against motion picture combines, Roosevelt said, “Do you really need to sue these men?” and asked that they be brought in for a talk. But other times he egged Jackson on.

In the fall of 1937 Roosevelt was thinking about whether Jackson might be a good man to run as candidate for his old job of New York governor. There was talk that Bob Wagner would run for that job, but Roosevelt wanted to keep him as an ally in the Senate. If Jackson, an attorney from Jamestown from a Democratic family, could capture the governor’s seat, then Roosevelt could have a twofer. Roosevelt’s feelings about Jackson made sense, for there were similarities between the two, as the columnists Joseph Alsop and Robert Kintner would note: “Both are upstate New Yorkers. Both are country squires turned political leftwingers.” Another commonality: “H” in Jackson’s name stood for Houghwout. He was descended from
Dutchmen, like Roosevelt. At the end of November, Jackson accompanied the president on a fishing trip. Hopkins and Ickes—who at times had feuded bitterly—were also aboard the
Potomac,
sharing a cabin. The four prepared political strategy: specifically, an assault on the wealthy. Roosevelt caught a large mackerel early on, but it was Jackson who had the biggest catch of the trip, a barracuda of more than twenty-five pounds. If any of them considered the incongruity of planning a class war on a yacht, they did not mention it.

Just after Christmas, Harold Ickes gave a radio speech assailing America’s wealthy, charging that sixty families who ran the nation were on strike against the rest of the country. He was correct about the strike part. The sixty-family part Ickes had taken from a sensationalist book recently published by Ferdinand Lundberg, a writer for the
Herald Tribune,
Irita’s paper. Those families, Ickes said, were demanding that government give the country back the “suicidal license” it had had in 1929. Some listeners took the Ickes assault strike in good humor. One was Charles P. Taft, the son of the president. Taft told the
New York Times
that he felt about Ferdinand Lundberg’s decision to include the Taft name in his list as Mark Twain had upon hearing the news of his own death: that the charge was “grossly exaggerated.” But the message was clear: there would be more political attacks in 1938.

Next came Jackson, who now hoped to net the biggest fish of all for his boss: Willkie. The pair would go up against one another in a town hall meeting with a live audience. But it would also be a
Town Hall Meeting of the Air,
a show that the National Broadcasting Company aired across the country via its Blue Network. The public did not know it, but for Willkie the debate was a public reprise of those original meetings with David Lilienthal at the dark table in the Cosmos Club: “How Can Government and Business Work Together?” Both Jackson and Lilienthal were good fits for the town hall format, men who might actually have appeared at a genuine town hall meeting, the sort that Rockwell painted. Willkie, the son of Elwood’s German American attorneys; Jackson, who had skipped college and had become
a lawyer the old-fashioned way, training as a clerk—these were two old country lawyers who through merit had risen and now were debating the biggest issues in the land.

The event took place on the first Thursday in January. Jackson started out graciously. Probably no two men had ever looked at the relations of government to business through “more differently colored glasses” than he and Willkie. Yet Jackson admired Willkie’s “consistent willingness to stand up man-fashion and submit his views to the test of dispassionate but frank discussion.” Then Jackson moved on, blaming business for its strike and for creating insufficient work; and, “if industry will not provide it, the people are determined to provide for themselves.” Small companies he would defend—indeed he as a young man had represented them himself once. Big companies, however, needed reining in. They were selfishly keeping their profits to themselves.

Next, Jackson moved to the topic of subsidy. Roosevelt’s opponents claimed that the New Deal had created the idea of subsidy. That was a fallacy. The United States had always subsidized the private sector. In the nineteenth century, pioneers had enjoyed a form of early WPA; they got “a quarter section of public land just for occupying it.” World War I had provided another sort of WPA, spending and jobs. The actual WPA was just a follow-on. Those who recalled Roosevelt’s 1932 speech about the end of the frontier saw that Jackson was reprising an old theme.

Jackson also made a stab at explaining why there was conflict between government and business: “The man who is in government is brought in contact with the problems of all kinds and conditions of men. Everybody’s business is his business.” The private businessman, by contrast, “has been intensely preoccupied with a very narrow sector of the world.” Again, Jackson assigned blame: the conflict was business’s fault. Jackson concluded, somewhat irrationally for a trustbuster, with a plea for a “high volume, low price industrial economy.” Those who opposed his notions were trying “to destroy this kind of American life.”

Here Jackson had overshot. For Willkie this time was better prepared than he had been at the Cosmos Club, or against Lilienthal. What’s more, he was aware that the stakes were higher than they had ever been. Just days before, on January 3, the Supreme Court had refused to let power companies use injunctions to stop federal lending to cities for power plants. “Mr. Ickes’s delight over the court verdict was unconcealed,” the
Times
had written. Sixty-one projects in twenty-three states that had been held up could now proceed, and even Justice Sutherland had gone along. With Ickes at work, and Lilienthal rising, the next year or two would probably mean the end of Commonwealth and Southern.

The executive started out gently, calling Jackson’s bluff about the town hall. Was the very idea of business cooperation with government really so American? “I wonder,” Willkie asked the audience, “if it seems strange to you tonight that we should be discussing the question of whether or not government should cooperate with American business…They might ask, with some surprise, if it was not the function of American government to encourage the development of private enterprise.” Hoover’s monstrous Department of Commerce was odd. And the New Deal might dress itself up as a community project. But conceptually it lay very far from the country’s old community roots.

Willkie moved on, putting people he already knew out there, if only to show their relationship. Jackson was an antitrust man, and he ought to understand that taxation hurt the smaller business. For small businesses had no extra resources to handle tax work. The Roosevelt tax program was punishing the very same people whom Jackson was being so solicitous about. Especially problematic was the undistributed profits tax, which punished cautious business for failing to spend: “If there is any strike of capital it comes from those millions of small investors, not from the wealthy few.” And punishing the rich at punitive rates encouraged them to escape. “As a matter of fact because of income tax laws which take up 83 percent of a rich man’s investment in private enterprise most of the very rich have
been investing more and more in the flood of tax-exempt government securities”—just as Mellon had said.