There were ever more crackpot schemes, including one proposed by a mysterious self-proclaimed engineer and floor polish salesman in Manhattan’s Greenwich Village named Howard Scott. He asserted that engineers should take over the entire U.S. manufacturing system and set it to work on a highly accelerated, twenty-four-hour production schedule. There would be commensurately high wages that would allow the workers to purchase the produce of the factories. Not only that, he wanted to abolish money, including gold, and replace it with measurements of energy such as joules and ergs. He dubbed his system Technocracy and embarked on a PR campaign to explain it at Manhattan’s posh private clubs and over national radio networks. Engineers instead of politicians, Scott declared, would run the country. At its peak, Technocracy had half a million members in California alone.
The novelist and Socialist Upton Sinclair called Technocracy “the most important movement which has shown its head in our time,” but the critic H. L. Mencken dismissed it as “worse than communism.” Scott’s idea was a rage for a while, but in the end nobody really understood how it worked, if at all. By the end of the decade Scott was exposed as a fraud and his movement fizzled out entirely.26
Roosevelt listened to many such schemes, plots, and plans. But he played his cards very close to his vest as he sat in Warm Springs, smoking, smiling, and nodding while a stream of visitors offered their theories about how the country should be run. Huey Long got a taste of Roosevelt’s noncommittal personality when he went in to discuss Depression relief in Louisiana. Afterward, the firebrand senator and prospective presidential candidate was heard to say: “He says ‘Fine! Fine! Fine!’ But Joe Robinson goes to see him the next day and again he says, ‘Fine! Fine! Fine!’ Maybe he says ‘Fine!’ to everybody.”27
* * *
IN EARLY FEBRUARY, with Inauguration Day barely a month away, Roosevelt embarked on a leisurely cruise off Florida aboard Vincent Astor’s luxurious yacht Nourmahal. Stopping in Miami, the president-elect boarded a convertible for a motorcade that would take him to the Bayfront Park, where he was to deliver a speech and meet with Chicago’s mayor Anton Cermak (who was there to beg favors, having stalled in delivering critical Illinois delegation votes to Roosevelt at the convention the previous summer). After making his speech, Roosevelt was in the process of listening to someone who wanted him to read a lengthy telegram when shots suddenly rang out.
Standing on a soapbox in the crowd about ten yards away was a man firing a pistol. He was an Italian anarchist named Giuseppe Zangara, who later told police that he “hated the rich and powerful.” He was hoping to kill Roosevelt, he said, but a woman put her hand on his arm and spoiled his aim. The bullets instead struck Mayor Cermak and four others. Roosevelt was utterly calm in the face of the gunfire. The Secret Service wanted to speed away, but Roosevelt ordered them to put the wounded Cermak into his car and rush to the hospital. Cermak died a few weeks later, and Zangara was tried, convicted, and sent to the electric chair the following month. Roosevelt gained a kind of hero status, having achieved such a narrow escape from assassination.28
Two weeks later, on a cold gray day on the Capitol steps before a crowd of a hundred thousand, Roosevelt took the oath of office on March 4, 1933. The ceremony was administered by the old waterboarder Endicott Peabody (despite his having voted for Hoover). Roosevelt wore a morning suit and a silk top hat. He was all smiles for his wife Eleanor and mother Sara—and also for Lucy Mercer Rutherfurd, who had been quietly spirited to the event from her sister’s house in Georgetown in a black Secret Service limousine to watch the proceedings at a discreet distance.29
In his inaugural address over national radio, Roosevelt spoke to the people in a now familiar voice, radiating strength and patrician authority.
“This is a day of national consecration…The only thing we have to fear is fear itself…We must move as a trained and loyal army…I assume unhesitatingly the leadership of this great army…The people of the United States have asked for discipline and direction under leadership. They have made me the instrument of their wishes. In the spirit of the gift, I take it.”30 He set the leisure classes to quaking when he continued with a spiel of liberal ideology, singling out the “unscrupulous money changers” who “fled from their high seats in the temple of our civilization,” and called for an “end to speculation with other people’s money.”
It was an uplifting talk, given to a people desperate for someone to tell them what to do. Banks were still closing daily, and the bankers were just as afraid as the workers and white collar employees who also were being let go. There was no money to pay doctors or lawyers, just a great unwinding, a downward spiral in which the entire fabric of the country seemed to be coming apart. Roosevelt told his listeners not to take counsel of their fears, that help was on the way, that soon there would be work. Soon there would be happy days.
Before the inauguration Roosevelt visited the mighty Wilson Dam on the Tennessee River that had been completed nearly a decade earlier. He was in the company of Senator George Norris of Nebraska, who had championed dams on the river for years but saw his bills vetoed by Republican presidents Coolidge and Hoover.
Also present in the party were a gaggle of reporters. Gesturing from the top of the dam toward the vastness of the Tennessee River Valley, Roosevelt promised Norris that his vision would now come true on a grander scale than he had ever imagined. A series of dams built by the U.S. Army Corps of Engineers would alter the geography of the river forever, prevent disastrous flooding, and supply cheap electricity to hundreds of thousands of poor rural residents of the seven states through which the river coursed. This, of course, became the legendary Tennessee Valley Authority, or TVA. Roosevelt’s enemies would use this initiative as a way to accuse Roosevelt of following a socialist—even a communist—agenda, as it coincided with the vaunted hydroelectrification of the Soviet Union under Stalin. The president laughed this off with characteristic aplomb. “I’ll tell them it [the TVA] is neither fish nor fowl, but whatever it is it will taste awful good to the people of the Tennessee Valley.”31
Confronted with what historian Roy Jenkins called “the most formidable threats to face any president since Lincoln,” Roosevelt selected a cabinet of mostly reasonable men that has been characterized by more than one historian as “uninspired.” At the Treasury Department was Henry Morgenthau Jr., son of a prominent Jewish family from New York City and a friend and neighbor of Roosevelt’s at Hyde Park. He served in all four of Roosevelt’s terms, but late in the war he came under fire for initiating a scheme to bomb postwar Germany back to the stone age and turn its remaining population into shepherds and subsistence farmers. Cordell Hull of Tennessee became secretary of state, and, like Morgenthau, served for twelve years. As an administrator Hull was strangely inert—which suited Roosevelt just fine, since he intended to conduct most foreign policy from the White House. Roosevelt chose Henry Wallace, a Republican and a farmer, as secretary of agriculture. The acerbic Harold Ickes became secretary of the interior. A Chicago radical, Ickes would go on to become Roosevelt’s main attack dog when the White House did not wish to sully its hands by trying to discredit someone’s reputation. For secretary of labor, Roosevelt named the mild-mannered Frances Perkins, who had served in that capacity for him when he was governor of New York. She was the first woman ever appointed to the U.S. cabinet.
Roosevelt soon began writing legislative bills, a lot of them. They all passed because the Democrats held both houses of Congress. The odds faced by the country were daunting. Unemployment had risen to its highest; in Flint, Michigan, it was a staggering 80 percent, and in parts of Massachusetts it was actually 90 percent. The first of the bills that Roosevelt wrote to combat these problems was emergency legislation closing all U.S. banks for four days, allowing some breathing room from the breathless withdrawal panic of the moment and restoring some confidence in the banking system.
Alongside the Banking Act, Roosevelt suddenly ordered
by executive fiat to take the United States off the gold standard. This was shocking to many. America had been on the gold standard either officially or unofficially for more than a hundred years, a process whereby money was pegged to the price of gold, then currently fixed at $20.67 per ounce. Paper money was redeemable in gold at that rate. Because of the Depression and the bank failures, vast numbers of Americans were standing in line at banks to turn their paper money into gold before the bank either closed or ran out of gold or paper money became worthless. On the day after Roosevelt’s inauguration, the Federal Reserve Bank of New York ran out of gold. Roosevelt, after consulting his economic advisers, declared that the gold standard was “suspended.” This did not really work, for people continued to demand that banks redeem their paper money for gold. So several months later Roosevelt announced that it would be illegal for people to keep gold, and that henceforth it would not be honored as currency.
Most citizens then began going to the banks to exchange their gold for paper money at the rate of $26.33 per ounce (the price had risen since Roosevelt took office). Then, when the government had accumulated almost all the gold in the United States in a depository at Fort Knox, Kentucky, Roosevelt got a bill through Congress raising the price of gold to $35 an ounce, causing many people to become incensed that they had been cheated.
Just as Churchill was controversial for putting Great Britain back on the gold standard eight years earlier, Roosevelt was criticized by skeptical economists who warned that going off gold would lead to runaway inflation. That turned out to be untrue. What it did do was allow the government, through the Federal Reserve, to pump a tremendous amount of money into the economy to fuel Roosevelt’s grand-scaled New Deal programs.
A little more than a week after his inauguration, in what turned out to be a brilliant gimmick to sell his policies, Roosevelt broadcast the first of his famous “fireside chats” on national radio. He explained to Americans why they should accept and welcome the bank holiday and the relief from the gold standard. His voice, disembodied and mellifluous, seemed perfect for radio, and millions gathered around their sets for his broadcasts. Somehow, even though his tone and inflection were unmistakably patrician, Roosevelt managed to convince people that things were getting better, and that he was on their side.
Next came a blizzard of legislation creating an astonishing number of new federal agencies. One was the Civilian Conservation Corps (CCC), which provided jobs for idle young men to work in forests and national parks. It paid just a dollar a day and was run by the Army, but the men had three squares a day and a dry place to sleep. A quarter of a million people signed up within a few months, and the program ran until war broke out almost a decade later.
The Agricultural Adjustment Act (AAA), created to avoid the terrible years of harvest surpluses that caused prices to plummet, actually paid farmers not to grow certain staple crops such as cotton, wheat, swine, and tobacco. It continues today, which demonstrates how difficult it is to get rid of an entitlement program.
To the delirious delight of many and the furious consternation of others, the process of repealing the Eighteenth Amendment outlawing the sale of alcoholic beverages was begun under Roosevelt’s signature, signaling the end of Prohibition.
As promised by Roosevelt, the Tennessee Valley Authority was cranked up, and the defense budget was cut by more than a third. This last prompted the Army’s chief of staff Douglas MacArthur to become embroiled in such a heated confrontation with the president, he said, that as he stormed out he threw up on the White House steps.
The National Industrial Recovery Act (NIRA), designed to eliminate “cut-throat competition,” was passed toward the end of Roosevelt’s first hundred days in office. Symbolized by a picture of the Blue Eagle, its insignia was posted on the doors of businesses that agreed to pay employees a “living wage.”
Finally, there was the Public Works Administration (PWA), a part of NIRA that was run by Harold Ickes. It was responsible for putting many Americans to work on such projects as the Blue Ridge Parkway, Boulder Dam, New York’s Triborough Bridge, scores of federal courthouses, schools, and other assets valuable to the country.
These were the essentials of the New Deal that was supposed to bring a return to American prosperity. By the end of a historic first one hundred days in the Oval Office, June of 1933, Roosevelt had fulfilled many of his biggest campaign promises. Some of it worked—but most of it didn’t, if prosperity was the sole arbiter.
*1 The Wilson administration was alarmed by the idea that the Germans might seize Haiti, and from there would be able to threaten the Panama Canal. Thus, U.S. Marines were sent in to secure the country.
*2 Formally the Vaterland, a luxurious 1,300-passenger German liner seized by the Americans at the beginning of the war and later converted to a troopship carrying up to 14,000 soldiers at a time.
*3 Eight other bombs exploded at about that same hour in other American cities that night.
CHAPTER NINE
In June 1933, with an astonishing range of legislative accomplishments under his belt and the long, hot Washington summer drawing near, Roosevelt repaired to Campobello for much needed recreation. There, he could enjoy being with his children, who were growing up quickly or already grown. The polio, of course, had severely curtailed his athletic activities such as golf, tennis, fly-fishing, and riding; he spent most of his spare time with his stamps and other collections. Occasionally, he would be helped aboard his sailboat and enjoy being captain for a while. But these old pastimes were not what occupied Roosevelt’s mind anymore. Now, politics and governing drove him. He held lengthy conversations with Louis Howe and others, counting House and Senate votes and discussing who was wavering, or who was vulnerable to which emoluments, or who was having an affair with so-and-so’s wife.
When he returned from vacation, Roosevelt startled many people—particularly Republicans—by announcing that the United States would now officially recognize the Soviet Union, being the last major world power to do so. Relations had been broken off during World War I, when the Bolshevik Revolution destroyed the czarist government and Lenin made a separate peace with the Germans. They remained in a void throughout the 1920s, after the Soviets refused to pay the U.S. debts from the old government, seized American property in Russia, and attempted to subvert the U.S. government by lending support to American Communists.
Roosevelt, however, felt it was time for a change. It was said that he had been heavily influenced by the now discredited reporting of Walter Duranty on Stalin’s Russia in the New York Times. Other reasons given were that he hoped a formal relationship would serve American interests in the Pacific, assuming the Russians could help limit the Japanese expansionism that was threatening to engulf all of Asia.
Quiet talks were held throughout the summer and into the fall. At last, a “gentleman’s agreement” was reached between the Soviet representative and Henry Morgenthau. The Russian minister promised his country would deal with the repayment of the old debt and cease trying to subvert and propagandize the American people. Roosevelt appointed as ambassador William C. Bullitt, who was given a cordial and happy reception when he reached Moscow.
The good relationship did not last long. No sooner had Bullitt arrived than Stalin opened the first of his Great Purges that horrified the world. Moreover, the Soviets reneged on the promise to deal with Russian debts and brazenly continued to support the American subversion and propaganda efforts.1
Meanwhile, for many of his old friends and associates Roosevelt remained a “traitor to his class” as his policies and his prose publicly excoriated banking and financial magnates. His tax legislation, just as Rex Tugwell had promised, had hit the wealthy the hardest. His top income tax bracket of 63 percent in 1933 rose to more than 90 percent a decade later.
For his part, Roosevelt had come to romanticize “the people,” by which he meant the working and lower middle classes. They,
he had come to believe, were the backbone of America—and, not incidentally, the people who had elected him. He was determined to be their champion, and to give them better lives. The rich—though he remained one of them—could fend for themselves, and he had cut himself adrift from their values.
By the end of 1933 it appeared the New Deal might be working. Unemployment was down from 15 million to 11 million. Those banks that had regained stability remained open. There seemed to be some progress in industrial output and prices were slightly higher. Hope was that the worst was over.
The trouble, though, was that rather than a steady rise upward the economy had lurched forward, then hit a kind of plateau in which it remained stuck through 1934, 1935, and 1936. The depression remained, leaving many millions of Americans stranded in the direst poverty and despair. In fact, the New Deal seemed to be coming apart.
For one thing, the agriculture bill was not working as planned. It was mostly the big farmers who could take land out of production and get money for it. Most of the little farmers didn’t own their land and were subject to eviction. The Supreme Court seemed determined to take apart NIRA program by program, finding that the president had exceeded his authority. The program itself was too complicated and contradictory, and nobody seemed to know how to fix it.
Nevertheless, Roosevelt plunged ahead with what he called “a Second New Deal,” which created the Social Security Administration to ensure that people would not starve in old age. All workers and employers were charged a tax for social security “insurance” that would be payable monthly beginning at age sixty-five. It remains with us today in a complex system that has been amended multiple times over the years. The taxpayers’ money goes into what Roosevelt called a “trust fund,” which it is not; in fact, the money is invested in U.S. government bonds with the Treasury Department.
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