At the Wilkes-Barre convention several days later, the miners voted as one to return to work. Headlines blazoned the news: “Anthracite Miners Decide to Have Their Issues and Interests Determined by President’s Commission. New Era Marked in the Affairs of Labor.”
Thus, after 163 days of deadlock, the potentially most devastating strike in American history reached a peaceful conclusion. Acting as “the people’s attorney,” Roosevelt had defined the public interest in the hitherto private struggle between labor and capital. He had waited patiently through five months of the strike, moving one step at a time, until the “steady pressure of public opinion” created space for bringing the two sides together in a first-ever federal binding arbitration. “The child is born,” Carroll Wright wrote, “and I trust will prove a vigorous . . . member of society.”
Share credit for the successful resolution.
An ebullient Roosevelt generously shared paternity of this child, first off with J. P. Morgan. “If it had not been for your going into the matter, I do not see how the strike could have been settled at this time,” he wrote Morgan. “I thank you and congratulate you with all my heart.” Then, in a string of letters written in the aftermath of the strike, Roosevelt attributed to each member of his team—Root, Knox, Quay, Sargent, Wright, Crane, and Payne—a significant role. If “defeat is an orphan,” the old saying goes, “victory has a thousand fathers,” and in this case, Roosevelt was delighted to let the world know of the unique contribution of each of the fathers. Privately, however, he let off steam against the coal operators. “May heaven preserve me for ever again dealing with so wooden-headed a set,” he vented in a letter to his sister Bamie.
If he liberally broadcast praise, newspapers across the nation and the world poured accolades back upon Roosevelt. “His injury and his bravery, and then his part in resolving the strike,” wrote the North American Review, “have given the color of romance and knight errantry to the prosaic office and heightened the appeal of his character.” Upon hearing the news, the members of the French Parliament cheered and the London Times recognized that “in the most quiet and unobtrusive manner, President Roosevelt has done a very big and entirely new thing.”
Furthermore, though the miners had immediately returned to work, the plaudits Roosevelt heaped upon others and reaped himself served to point everyone in the same direction as the binding arbitration hearings got under way. The hearings lasted more than three months. Each side put forth its best case, and in the end the commission unanimously agreed to award the miners a retroactive wage increase of 10 percent, a reduction in the daily work schedule from ten to nine hours, and a board of conciliation to resolve matters of future contention. It did not address the miners’ desire for formal recognition of their union.
So, while not a blanket solution or an unqualified victory for labor or for capital, the binding arbitration resulted in a durable adjustment in the power relationship between capital, labor, and the federal government. “We are witnessing not merely the ending of the coal strike,” the London Times remarked, “but the entry of a powerful government upon a novel sphere of operation.”
Leave a record behind for the future.
In the aftermath of this trailblazing event, Theodore Roosevelt wanted to set the record straight, to write a history of the crisis for the future. He had broken long-established precedents by intervening directly in a private quarrel between labor and management. His actions had provoked both outrage and approbation. Once the crisis was resolved, he wanted to clarify the nature of this unusual event, to define and restrict what he had done, to make clear the unique circumstances that compelled him to intervene. This was of paramount importance in order to avoid a carte blanche for an alarming, even despotic expansion of executive power.
The day after the strike ended, Roosevelt composed an astonishingly complete three-thousand-word letter to Massachusetts senator Crane detailing his actions from the start of the struggle the previous May. “I think it well that a full account of the whole affair should be on file,” he told Crane. He then set forth the rationale behind each of his decisions—his calculation of the risks, his search for a reliable understanding of the facts, his initial decision not to publish the Wright Report, the change in circumstances that finally led to its publication, his unprecedented call for a face-to-face meeting with the opposing sides, his refusal to “sit supinely by” after the conference failed, his readiness to take drastic action even though he knew it would produce a serious backlash, the involvement of J. P. Morgan that made the invasion moot, the absurdity of the struggle over nomenclature, until, finally, resolution was reached.
He followed his letter to Crane with another, explaining further how the unique nature of the coal crisis forced him to take actions that were “not strictly legal.” If the strike had been one of ironworkers, for instance, he told the celebrated historian William Roscoe Thayer, “he would have held himself aloof, but the coal strike affected a product necessary to the life and health of the people.” Moreover, “if the President of the United States may not intervene to prevent a widespread calamity, what is his authority for?”
In the years that followed, Roosevelt told audiences that he wished the “clear and masterful” report of the Anthracite Coal Strike Commission “could receive the broadest circulations as a tract wherever there exists or threatens to exist trouble in any way akin to that with which the commissioners dealt.” The commission members “did not speak first as capitalist or as laborer, did not speak first as judge, as army man, as church man, but all of them signed that report as American citizens anxious to see right and justice prevail.”
* * *
With the coal strike, Theodore Roosevelt had grasped the historical moment that signaled the clear emergence of a domestic purpose for his young administration—to restrain the rampant consolidation of corporate wealth that had developed in the wake of the Industrial Revolution. The speed and size of that consolidation, Roosevelt powerfully felt, “accentuates the need of the Government having some power of supervision and regulation over such corporations.” At the height of the crisis, he acknowledged that he “would like to make a fairly radical experiment on the anthracite coal business to start with!”
Theodore Roosevelt’s leadership during the experimental resolution of that crisis would prove to be the dawn of a new era. Under the banner of his Square Deal, a mood of progressive reform swept the country, creating a new vision of the relationship between labor and capital, between government and the people. As he explained to his friend Bill Sewall of Maine, “Now I believe in rich people who act squarely, and in labor unions which are managed with wisdom and justice; but when either employee or employer, laboring man or capitalist, goes wrong, I have to clinch him, and that is all there is to it.”
ELEVEN
TURNAROUND LEADERSHIP
Franklin Roosevelt and the Hundred Days
Looking back on those days, I wonder how we ever lived through them,” Secretary of Labor Frances Perkins said of the deepening Depression. “It is hard today to reconstruct the atmosphere of 1933 and to evoke the terror caused by unrelieved poverty and prolonged unemployment.” The economy had reached “rock bottom.” American industry was paralyzed; a quarter of the labor force was unemployed, and the hours of those who were working had been radically reduced. People had lost farms, homes, and small businesses that had been in their families for generations. Thousands of banks had collapsed, taking with them the deposits and savings of millions of people. The relief funds of cities and states were exhausted. Starving people wandered the streets. Food riots broke out. The future of capitalism, indeed of democracy itself, appeared grim. “We are at the end of our string,” President Herbert Hoover despaired.
“No cosmic dramatist could possibly devise a better entrance for a new President—or a new Dictator, or a new Messiah—than that accorded to Franklin Roosevelt,” White House aide Robert Sherwood observed, aligning himself with those who believe that a leader
is summoned to the fore by the needs of the time. “When the American people feel they are doing all right for themselves they do not give much thought to the character of the man in the White House; they are satisfied to have a President ‘who merely fits the picture frame,’ as Warren Harding did.” However, “when adversity sets in and problems become too big for individual solution,” then, Sherwood argued, the people start looking anxiously for guidance, calling for a leader to “step out of the picture frame and assert himself as a vital, human need.”
Mere opportunity is not enough, however, as we have seen. The scorched landscape that confronted Franklin Roosevelt presaged great failure just as easily as great success. The leader must be ready and able to meet the challenges presented by the times. And no leader was more prepared to diagnose the national malady correctly and assert himself as “a vital human need” than “old Doc Roosevelt,” as he had been affectionately called at Warm Springs, where he had directly engaged with his fellow polio patients as architect, developer, program director, head counselor, therapy director, and spiritual adviser, “all rolled into one.”
“Doc” Roosevelt was ready to minister with frankness, affability, near-mystical confidence, and an unshakable resolve to take whatever actions were necessary to transfuse the nation. He was prepared to administer a sustained, reanimating jolt of new leadership to his paralyzed and despondent nation. After all, in a searing and personal way, he had been through all this before.
One week before the March 4, 1933, inauguration of Franklin Delano Roosevelt, the journalist Agnes Meyer had entered into her diary, “the world literally rocking beneath our feet.” Following three years of precipitous decline, the “vital organs” of the financial system, the nation’s banks, were shutting down. The economic system of the nation had entered a physical and spiritual state akin to death throes.
Such extreme language depicting the nation as a gravely ill body politic was hardly an exaggeration. Indeed, beneath what Roosevelt called “the immediate material illness of the moment”—the acute circulatory crisis of the tottering banks—remained the far more pernicious condition of “the sore spots which had crept into our economic system.” Hanging in the balance was nothing less than what kind of government and country we were and might continue to be.
“Panic was in the air,” Roosevelt’s incoming cabinet member Harold Ickes recalled of this frightening, terminal stage of the Great Depression. In the countryside, millions of families had lost their farms to foreclosure. A rural lawyer from Iowa asserted that no experience of his professional life had prepared him for the desolating experience of watching “men of middle age, with families, go out of bankruptcy court with furniture, team of horses, a wagon and a little stock as all that is left from twenty-five years of work.” In the cities, more than one in four people had lost their jobs, the remainder working for diminished wages. Soup kitchens were running out of food, leaving tens of thousands of Americans starving and millions more ill-fed. Nowhere was a safety net in evidence.
In mid-February, “the full brunt of the Depression” struck when banks in one state after another began to bolt their doors. During the early years of the economic downturn, some five thousand small, mostly rural banks had collapsed, wiping out the savings of millions of Americans, ransacking not only their security but their hopes for the future. In the winter of 1933, with no recovery in sight, rumors of fatal vulnerability in the entire banking system began to spread. People in villages and cities all over the country rushed to withdraw their savings, standing in long lines with satchels in their hands, demanding the immediate release of funds which they planned to stash under mattresses or bury on their property.
Banks rarely had deposits on hand to meet sudden, overwhelming demand. During the speculative fever that gripped the nation in the Roaring Twenties, banks had used depositors’ money to buy stocks, most of which were now worthless. As the banks’ cash and assets diminished, minuscule limits on withdrawals were set. Soon, even these limits began to stretch the resources the banks had on hand. Faced with increasingly unruly customers lining up at bank doors, governors in one state after another ordered all the banks in their states closed for an indefinite period.
For millions of people, such hard times were reckoned as end times. The great city of Chicago “seemed to have died,” one resident recalled as she walked through the once swarming shopping district on the Loop. “The few people I saw seemed to be walking in a trance. There was something awful—abnormal—in the very stillness of those streets.” The pulse of the nation could hardly be detected.
If proof were needed that the terrible drama had reached a terminal state, the very dawn of Inauguration Day brought the news that the governor of New York, the state wielding a commanding influence over the wealth and financial resources of the nation, had suspended all banking operations. Now, more than half the states had shut their doors. The remainder operated only on a limited basis. And a few hours later, as brokers awaited the signal to start trading, Richard Whitney, president of the New York Stock Exchange, took his place at the rostrum to announce that the Exchange was closing for the indeterminate future.
To President-elect Roosevelt, it appeared “that the whole house of cards” might fall before he had a chance to be sworn in. An old poker player, Roosevelt knew something about cards, just as he knew about faith, poise, hope, and action in the face of devastating illness. Many times in the months and years ahead Roosevelt would resort to extended metaphors of doctors and patients to explain the sickness of the body politic. Often, he would stretch such metaphors into full-blown allegories to describe the experimental treatments “Dr. New Deal” would administer, not only to break the acute circulatory crisis of the financial system, but to remedy the conditions from which the illness had arisen.
Doc Roosevelt knew at once that three lines of attack were necessary. First, the feelings of helplessness, impotence, dread, and accelerating panic had to be reversed before any legitimate recovery could commence; then, without delay, the financial collapse had to be countered; and finally, over time, the economic and social structure had to be reformed.
The steps Roosevelt took during the next hundred days to stem the immediate banking crisis set in motion a turnaround that would forever alter the relationship between the government and the people.
THE FIRST DAY
Draw an immediate sharp line of demarcation between what has gone before and what is about to begin.
The Inauguration Day of Franklin Delano Roosevelt began in prayer and ended in action. His every word and deed communicated the clear vision that this day represented no mere changing of the guard from one party to another. Something vast and debilitating had come to an end; something new and hopeful was beginning. The centerpiece of this carefully constructed day of political theater was the assertion of an intrepid and long-abandoned leadership, coupled with an assault on both the deflated psychological and the economic condition of the country.
Early that Saturday morning, accompanied by his entire cabinet, staff, family, and friends, Roosevelt attended a special prayer session at St. John’s Episcopal Church. “A thought to God is the right way to start off my Administration,” he told them. “It will be the means to bring us out of the depths of despair.” After the twenty-minute service came to an end, Roosevelt remained on his knees, “his face cupped in his hands.” Later that morning, as he waited at the Capitol for the ceremony to begin, the president-elect improvised a new opening sentence to his address: “This is a day of national consecration.” Clearly, the address he was about to deliver was a civil sermon designed to provide “the larger purposes” that would bind the people together “as a sacred obligation.”
Roosevelt’s inspired resolve was glimpsed by the wife of Alabama senator Joseph Hill, who observed the president-elect as he slowly maneuvered himself to the rostrum. “I had not realized then,” she said, “what a tremendous effort it was for him to manipulate his crippled legs. It gave me a feeling
of his greatness that he could conquer such a physical handicap. Never have I seen an expression as he wore on his face—it was faith, it was courage, it was complete exultation!”
On this day of defining separation from the past, he asked the chief justice if, instead of simply saying “I do” after the oath was read—as thirty-one presidents had done before him—he could repeat every phrase of the presidential oath (I, Franklin Delano Roosevelt, do solemnly swear and . . .). He sought to invest a more personal affirmation in every syllable of the vow he was taking. In ways large and small Roosevelt loved to surprise, to break precedent, to transmit an inspiriting readiness to assume responsibility before a single word of the inaugural address was delivered.
Restore confidence to the spirit and morale of the people. Strike the right balance of realism and optimism.
Roosevelt began by directly facing the facts of the dire situation. “This is preeminently the time to speak the truth,” he declared, to address “honestly” the situation in our country. “Only a foolish optimist can deny the dark realities of the moment.” But, he famously asserted, “the only thing we have to fear is fear itself.” This phrase has gained such iconic stature as to eclipse the rest of the inaugural. Its provenance remains murky: Roosevelt speechwriter Ray Moley attributed it to longtime aide Louis Howe; Eleanor thought it was inspired by a passage by Thoreau found at the Mayflower Hotel in Washington in the days before the inauguration. Whatever the phrase’s origin, Roosevelt gave the statement power, providing the spike to nail hysteria to the spot at the opening of his address.
Roosevelt’s understanding of and empathy for the ordinary man suffused every aspect of the speech. Intuitively, he fathomed that what the people needed to hear was that they were not to blame for the misery of their individual circumstances. “The people of the United States have not failed,” he insisted. Nor, he said, alluding to the Book of Exodus, had the country been “stricken by a plague of locusts.” Failure of the economic system was neither due to the visitation of divine punishment, nor natural decline in the business cycle, nor lack of resources. To the contrary, he maintained, “plenty is at our doorstep.” Failure, he insisted, was due to a lack of leadership. That void had left people unprotected against “unscrupulous money changers.” Then, as the downward spiral deepened, leadership refused to take sufficient remedial measures, remaining passive at the very time robust leadership was needed most. Restoration would come through “a leadership of frankness and vigor,” just as such leadership had carried the people through “every dark hour of our national life.” With such a renewal, he was certain that the American people would once again rise.
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