by FDR
Roosevelt’s interest in agriculture was also of long standing, a natural product of his avocation of gentleman farmer at Hyde Park and Warm Springs. Whereas Al Smith had written off New York’s farmers as inherently Republican (“I never made any impression on any considerable number of them”31), FDR made farm relief the centerpiece of his legislative program. “If the farming population does not have sufficient purchasing power to buy new shoes, new clothes, new automobiles, the manufacturing centers must suffer.”32 Not only did Roosevelt’s interest revitalize the Democratic party upstate, it also helped him balance between the urban and rural wings of the party at the national level.33
FDR’s agriculture program was scarcely radical. But because the plight of the farmer was so dismal in the late twenties, anything that offered succor attracted national attention. Roosevelt proposed to shift much of the rural tax burden to the state by raising gasoline taxes. The increased revenue would pay for an expanded network of farm-to-market roads and underwrite local school construction. For dairy farmers he proposed the creation of the New York Milk Shed, a marketing cooperative that would fix the price of milk in the Empire State. He also advocated tax relief for small farmers, accelerated rural electrification, significant subsidies for agricultural research, and the conversion of marginal cropland to timber production—a means of reducing agricultural surpluses and easing the problems of flood control.34
In the spring of 1929 FDR held the first in a long series of fireside chats, bypassing the Republican legislature and speaking directly to New Yorkers over the radio. Roosevelt was a master at simplifying complicated issues and bringing people into his confidence. His cultivated delivery and easy manner made the audience feel they were participating directly at the highest level of government. Usually Roosevelt spoke on Sunday night, when the radio audience was largest. His remarks were painstakingly crafted to achieve the desired informality. Sometimes Rosenman prepared the first draft; more often it was FDR himself. A flood of letters would deluge the legislature after each talk, and Roosevelt would usually get close to what he asked for from the Assembly.*
In April 1929, after the legislature adjourned, FDR stopped off in Washington on his way to Warm Springs. He had been invited by the capital’s newsmen to address their annual Gridiron Dinner, where he, not Al Smith, would represent the Democratic party. The other two speakers were President Hoover and Chief Justice Taft. Roosevelt’s remarks were off the record, but from his reception it was clear the Washington press corps considered him a prime contender for the Democratic nomination.*
That summer FDR undertook a round of speaking engagements that kept his name before the public. He was awarded honorary degrees by Hobart College, Dartmouth, Fordham, and Harvard. His commencement remarks stressed the importance of social consciousness and gently decried “the unlikely alliance between big business and big government.” At Harvard, where he attended his twenty-fifth reunion—the high point for Ivy League alumni—he was made chief marshal of the graduation exercises and an honorary member of Phi Beta Kappa. “It certainly is grand,” FDR wrote his old friend Livingston Davis. “I assure you that being governor is nothing in comparison.”35
On July 4 Roosevelt presided at the dedication of Tammany Hall’s new headquarters off Union Square. Charles Murphy was gone, succeeded by lesser men, but the wigwam remained the focus of Democratic politics in the city. The fifteen hundred Tammany braves in attendance cheered Roosevelt as “the next president of the United States.” FDR rose to the occasion. Unencumbered by academic propriety, he lashed out at the oligarchs of economic feudalism. If the American people wished to preserve their freedom, they should don liberty caps like their Revolutionary forebears and resist the concentration of economic power, said FDR. This time the struggle would be fought with ballots rather than muskets. And unless they were successful, “all property would be concentrated in the hands of a few, and the overwhelming majority would become serfs.”36
This was fire-and-brimstone populist oratory, and Roosevelt struck a responsive chord. His remarks made banner headlines across the country. Will Rogers, the cowboy humorist, then at the height of his popularity, wrote in his syndicated New York Times column that the speech “just about” ensured that Roosevelt would be “the next Democratic candidate.”37†
Having made their point, Roosevelt and Howe decided it was time to retrench. They had lit a spark, but it would be unwise to trigger a premature conflagration. FDR drafted a statement for the press: “It is probably because of the warm weather and the lack of real news that my young gentlemen friends of the Press are inventing Arabian night tales about presidential possibilities and candidacies for the far distant date of 1932.… I am in no sense a candidate for President of the United States.”38
By the summer of 1929, America’s unprecedented prosperity began to look blotchy. Agriculture, which had been in the doldrums for years (per capita farm income was one quarter that of non-farmworkers), was joined by consumer durables and residential housing, both of which turned down sharply. Business inventories, always an economic barometer, had almost quadrupled in less than twelve months. Concurrently, the rate of consumer spending, which had risen at a rate of 7.4 percent in 1927–28, slowed to a snaillike pace of 1.4 percent.39 These developments were reflected in production and price indices. Industrial production hit a high in June and dropped off in July. Employment fell as well, along with wholesale commodity prices. The Federal Reserve Board compounded the deflationary pressure by raising interest rates a full percentage point in August, hiking the discount rate to 6 percent.
Wall Street appeared oblivious to the downturn. Stock prices, which had doubled in 1928, continued their upward spiral, fueled by margin (credit) purchases sometimes as great as 95 percent. As prices rose, investors clamored for more, pushing the market to a record high on September 3. Technology stocks led the climb. Shares of General Electric zoomed from $129 to $396; those of its competitor Westinghouse from $92 to $313; those of RCA from $93 to a breathtaking $505. Giddy commentators proclaimed the old laws of economics had been repealed: what went up did not necessarily have to come down.
In late September the market wobbled but recovered. For the next three weeks prices moved sideways on heavy volume. In retrospect it appears that knowledgeable investors were getting out. The break came Thursday, October 24. Panic selling pushed prices down 4 percent in two hours with a record 12.9 million shares changing hands. The market stabilized Friday and Saturday, but on Monday, October 28, the wave of selling resumed and the market dropped another 5 percent on volume of 10 million shares. That set the scene for what historians call Black Tuesday, October 29, 1929. The New York Stock Exchange opened down, and three million shares traded in the first half hour. Brokers sold positions for whatever they could get, and for a few ghastly minutes the exchange saw stocks for sale for which there were no buyers at any price. When the carnage ended, the market had lost one fifth of its value on an unprecedented 16.4 million sales—a record that stood for thirty-nine years. The decline continued off and on for the next three years. By mid-1932, the total value of the American stock market stood at 17 percent of its peak in September 1929.
The severity of the depression caught everyone by surprise. In the beginning, most believed the crash was a useful stock market correction. John D. Rockefeller called it a buying opportunity. Charles Schwab of Bethlehem Steel said, “Never before has American business been as firmly entrenched for prosperity as it is today.” President Hoover maintained that “the fundamental business of the country—that is, the production and distribution of goods and services—is on a sound and prosperous basis.”40
Rarely, if ever, have the nation’s economic spokesmen been more wrong. The crash may not have caused the Great Depression (economists agree that the causes were manifold), but it surely precipitated it. Farm prices, already depressed, fell by 53 percent from 1929 to 1932; net farm income by 70 percent. A cow that sold for $83 in 1929 now brought $28. Cotton sold for six
cents a pound. Corn in Nebraska brought thirty-one cents a bushel, Kansas wheat thirty-eight cents. By early 1933, 45 percent of all farm mortgages were delinquent and facing foreclosure.41
In the same period, automobile production fell by 65 percent and steel by 59 percent. The nation’s gross domestic product declined from $104 billion to $74 billion. The money supply shrank by 25 percent, and four out of every ten home mortgages were in default. Unemployment soared above 30 percent, with 11.8 million unemployed.42
FDR shared the prevailing consensus that the market’s correction would be brief. “The little flurry downtown,” as he called it, seemed just retribution for speculators who had artificially inflated stock prices.43 “Black Tuesday” did not figure in New York’s legislative elections the following week, and Democratic gains were slight. The party picked up three seats in the Assembly, but the GOP retained control of both houses. Roosevelt claimed victory, although the best that could be said is that the voters did not punish the governor for the crash.
By December the extent of the economic downturn was beginning to dawn. The 1932 election might be winnable after all. On December 10 FDR as much as threw his hat in the ring with a spectacular appearance in Chicago where he delivered three speeches in one day—a performance that could not be misunderstood. Speaking seriatim to the state Democratic committee, the American Farm Bureau Federation, and the Chicago Commercial Club, Roosevelt rose above New York politics and wrapped himself in the mantle of western agrarianism: “If the farmer starves today, we will all starve tomorrow.”44 He predicted that the Democrats would recapture the House of Representatives in 1930, and his remarks generated headlines from coast to coast.
FDR was among the first state governors to recognize the seriousness of the Depression. When Hoover announced in late January that employment was rebounding, Frances Perkins took the president to task, citing Labor Department statistics to prove the situation was getting worse. “Bully for you,” said FDR. “That was a fine statement and I’m glad you made it.”45 By March 1930, although the reality of the Depression still was not acknowledged in Washington, Roosevelt established a commission to stabilize employment in New York—the first state commission of its kind in the United States. “The situation is serious,” said FDR, “and the time has come for us to face this unpleasant fact dispassionately.”46 Shortly thereafter Roosevelt became the first state chief executive to endorse the idea of unemployment insurance—a radical concept that had been kicking around university economics departments for years but had yet to make its debut in the public arena. First at an ad hoc meeting of New England governors that he convened, then at the National Governors Association Annual Meeting at Salt Lake City, FDR came flat out for a contributory scheme in which employees, employers, and the government would share the risks of future unemployment.
FDR was choosing the ground on which to oppose Hoover two years hence. When the president advised the U.S. Chamber of Commerce on May 1, 1930, that the worst was over and recovery at hand, Roosevelt told Democrats that Hoover had apparently repealed the laws of supply and demand.47 Speaking to the annual Jefferson Day dinner of the National Democratic Club at New York’s Commodore Hotel, FDR castigated financial circles in the East, who he suggested were unresponsive to the nation’s distress. “If Thomas Jefferson were alive he would be the first to question this concentration of economic power.”48
Roosevelt was followed on the dais by Senator Burton K. Wheeler of Montana, who would give the keynote address. Six years earlier Wheeler had run for vice president on the Progressive ticket with Wisconsin’s Robert La Follette. He was back in the Democratic fold, a powerful spokesman for the grassroots populism of the high plains. There was no advance text of Wheeler’s speech, and he had given no warning of what he intended to say. But his remarks were carried live on a nationwide hookup by NBC, and the assembled Democrats soon heard a clarion call for new leadership. “As I look about for a general to lead the Democratic party, I ask to whom we can go. I say that, if the Democratic party of New York will re-elect Franklin Roosevelt governor, the West will demand his nomination for president and the whole country will elect him.”49
Wheeler’s endorsement created a sensation. He was the first Democrat of national stature to announce for Roosevelt, and his speech had been totally unexpected. FDR, in fact, had departed the dinner before Wheeler spoke. Later, Franklin wrote his cousin Nicholas that he was not concerned about 1932. “Why can’t reporters, editorial writers and the politicians let a poor devil alone to do the best he can with a very current job?”50 Franklin was doubtless sincere about wishing to get on with the job of governor—he was up for reelection in November—but when Governor L. G. Hardman of Georgia announced his support of Roosevelt for president several weeks later, FDR made no move to rein him in. “It was very good of Governor Hardman to say what he did,” Franklin wrote his old friend Hollins Randolph.51
The gubernatorial campaign occupied FDR completely in the summer and fall of 1930. The Republicans nominated Charles H. Tuttle, the racket-busting U.S. attorney for the Southern District of New York, and focused the campaign on Tammany corruption. Roosevelt chose to run against Washington, stressing the need for farm relief, full employment, and public power. “Never let your opponent pick the battleground on which to fight,” FDR told Sam Rosenman. “If he picks one, stay out of it and let him fight all by himself.”52*
After Charles Murphy’s death, Tammany had returned to its old ways of doing business, and corruption was rampant in New York City. But Roosevelt relied on the votes of Tammany Democrats in the legislature to enact his program, and he was reluctant to call the organization to task. And so he avoided the issue during the campaign. The more Tuttle talked about Tammany corruption, the more FDR talked about unemployment insurance and old-age pensions.
In the closing weeks of the campaign Washington dispatched three high-ranking cabinet officers to New York on Tuttle’s behalf. The Hoover administration evidently decided that the best way to stop Roosevelt in 1932 would be to defeat him for governor in 1930. Secretary of State Henry L. Stimson, Secretary of War Patrick J. Hurley, and Ogden Mills, the undersecretary (later secretary) of the Treasury spoke repeatedly to audiences throughout the Empire State, lambasting FDR for his failure to repudiate Tammany.
Roosevelt ignored the charges until his final rally at Carnegie Hall on November 1. His response was brief but complete. If there were corrupt officeholders, he said, they would be removed. “They shall be removed by constitutional means, not by inquisition; not by trial in the press, but by trial as provided by law.
“If there is corruption in our courts I will use every rightful power of the office of Governor to drive it out, and I will do this regardless of whether it affects any Democratic or Republican organization in any one of the five counties of New York City, or in any one of the fifty-seven other counties of the State. That is clear. That is unequivocal. That is honesty. That is justice. That is American. That is right.” And that was enough. Roosevelt waited until the last day of the race to rebut the charges of corruption, and he did so effectively. Tuttle had waged a one-issue campaign, and it had backfired.
Roosevelt also used his final appearance to ridicule the intervention of Stimson, Hurley, and Mills.* What qualified “these three estimable gentlemen” to instruct the people of New York? FDR asked. Hurley, he pointed out, was a carpetbagger from Oklahoma and knew nothing about the state. The other two, Stimson and Mills, had both run for governor of New York and been defeated. “The people did not believe in them or their issues then, and they will not believe in them or their issues now.” Roosevelt said the three cabinet officers should return to Washington as soon as possible and address the problems confronting the nation. “Rest assured that we of the Empire State can take care of ourselves.”53
Roosevelt left Carnegie Hall with the rafters ringing. Three days later the Tammany organization demonstrated its electoral effectiveness. In New York City a record 91.1 percent of the regist
ered voters went to the polls. Overall, FDR swamped Tuttle by 725,000 votes, the largest plurality won by any gubernatorial candidate in New York history.54 Upstate, Roosevelt carried forty-three counties to Tuttle’s fourteen. In every upstate county, FDR’s vote total exceeded the number of registered Democrats in that county. He carried precincts, wards, districts that had not gone Democratic in living memory. Times were hard, and voters wanted a change. But the magnitude of the victory reflected not only Roosevelt’s determination to revive the Democratic party upstate but Jim Farley’s ability to put an organization on the ground that could actually do so. The Democrats recaptured both houses of the legislature and all statewide offices. In Washington, the Democrats won control of the House of Representatives and came within one seat of taking the Senate. For all practical purposes, the alliance between Democrats and progressive Republicans in the Senate gave them effective control of that body as well.
Eleanor, who set strategy for the Women’s Division of the State Democratic Committee, did everything possible to ensure Franklin’s reelection. Campaign aides jocularly referred to the 1930 gubernatorial contest as the “waffle iron election” because of the publicity ER generated comparing the cost of operating various kitchen appliances in New York as opposed to the cost in Ontario. Jim Farley credited Eleanor with adding 10 to 20 percent to the Democratic vote in those counties where her women’s organization was active. This time ER savored the victory as much as Franklin. “Much love and a world of congratulations,” she penciled in a note left on her husband’s pillow on election night. “It is a triumph in so many ways, dear, and so well earned. Bless you and good luck these next two years.—ER.”55
