by FDR
* Roosevelt laid on the service at the last moment. “I think a thought to God is the right way to start off my administration,” he told Jim Farley. “A proper attitude toward religion, and belief in God, will in the end be the salvation of all peoples. For ourselves it will be the means of bringing us out of the depths of despair into which so many have apparently fallen.” Jim Farley’s Story 36. Also see Farley, Behind the Ballots 208.
* Frances Perkins, who observed FDR at close range for many years, said “he had no doubts. He just believed with a certainty and simplicity that gave him no pangs or struggles. The problems of the higher criticism, of the application of scientific discoveries to the traditional teachings of the Christian faith and the Biblical record, bothered him not in the least. He knew what religion was and he followed it. It was more than a code of ethics for him. It was a real relationship of man to God, and he felt as certain of it as of the reality of his life.” The Roosevelt I Knew 141 (New York: Viking Press, 1946).
* The 1933 inaugural ball was the first since William Howard Taft’s in 1909. Wilson was too sanctimonious to permit such indulgence, and Harding apparently lacked the self-confidence to resume the practice. In 1925 and 1929 the Republican National Committee organized unofficial celebrations, but Coolidge and Hoover ostentatiously stayed away and there was no formal ball as such.
FIFTEEN
ONE HUNDRED DAYS
I think this would be a good time for a beer.
—FRANKLIN D. ROOSEVELT, MARCH 12, 1933
ANALOGIES BETWEEN MILITARY and political campaigns are often overdrawn, but what FDR did in rescuing the country in the first hundred days bears comparison with what General Ulysses S. Grant did in preserving the Union. Both men accepted responsibility, delegated freely, and radiated a confidence that inspired their subordinates to do their best. Roosevelt’s decisive action to save the banking system during the week following his inauguration resembles Grant’s steadfast resolution in the face of impending disaster on the battlefield. At Donelson, Shiloh, and the Wilderness, federal forces had been soundly whipped, and caution dictated a Union withdrawal. Grant counterattacked and carried the day. In March 1933 the nation’s financial structure was in chaos and disarray. Roosevelt kept his head, quietly took charge, and gave marching orders to his subordinates. “This Nation asks for action, and action now,” he said, and he was as good as his word.1
Roosevelt came to Washington armed with two proclamations: one calling Congress back to the capital for a special session;2 the other declaring a bank holiday under the dormant provisions of the wartime Trading with the Enemy Act. On the morning of the inauguration, FDR asked incoming attorney general Homer Cummings to determine whether the act remained in force. At the same time he requested Treasury secretary Woodin to draft emergency legislation that would permit the banks to reopen in an orderly manner. Those tasks assigned, Roosevelt settled back to enjoy the inaugural festivities. Cummings spent the day at the Department of Justice reading the legislative history of the Trading with the Enemy Act, while Woodin, with Raymond Moley in tow, repaired to the Treasury, where Hoover’s team still held forth. When the cabinet was sworn in early Saturday evening, Cummings told FDR he was satisfied that the act remained in effect. Woodin said he could produce a bill for Congress by Thursday.
Roosevelt took both reports at face value. The shape of Woodin’s bill was unclear, but FDR was content to leave the drafting to the secretary. As Sara had told Jim Farley, Franklin did not worry about details. Sunday afternoon, after services at St. Thomas’ Church,* Roosevelt convened the cabinet to review the situation. “The President outlined more coherently than I had heard it outlined before, just what this banking crisis was and what the legal problems were,” Frances Perkins remembered.3 Armed with Cummings’s opinion, FDR said he would issue a proclamation that evening that would declare a four-day bank holiday, embargo the transfer of gold and silver, and prohibit the exchange of dollars into foreign currency. The purpose of the bank holiday, he informed the cabinet, was to prevent further runs on the banks and allow Woodin time to draft the necessary legislation. Roosevelt said he would recall Congress on March 9 so Woodin’s bill could be acted upon as soon as it was ready.4
That evening FDR met with congressional leaders in the White House. In addition, he invited Senator Glass and Representative Henry B. Steagall of Alabama, chairmen of the respective committees that would report the legislation. Later in the evening he met with House minority leader Bertrand H. Snell of New York and Republican senator Hiram Johnson of California. The most remarkable thing, said Johnson afterward, was Roosevelt’s “readiness to assume responsibility and his taking that responsibility with a smile.”5 After eight years as assistant secretary of the Navy, working with Josephus Daniels and observing his easy relations with Capitol Hill, Roosevelt had an unparalleled understanding of how to deal with Congress. He knew how to stroke the members, how to play to their vanity, and how to accommodate their needs. “No president ever approached the prerogatives of the legislative body with more scrupulous attention to detail,” said John Gunther, one of Washington’s most astute observers.6
At 11 P.M. Sunday, after FDR was satisfied that the congressional leadership would be supportive, the White House issued the president’s proclamation recalling Congress at noon on Thursday, March 9. Three hours later, Roosevelt’s proclamation declaring a bank holiday was released, the delay occasioned by doubts expressed by several directors of the Federal Reserve that the president had the authority to close their banks. At 2 A.M., Woodin, supported by outgoing Treasury secretary Ogden Mills and Fed chairman Eugene Meyer, overrode the directors’ objections and ordered the banks closed.*
Monday morning, FDR met with the governors of the forty-eight states in the East Room of the White House. Most were in town to attend the inauguration, and the president had intended to spend the day with them discussing common problems. But the banking crisis took priority. “I have been so occupied that I have not had a chance to prepare any formal remarks,” Roosevelt told the governors. He spoke impromptu for ten minutes, explained why he had closed the banks, pledged to provide unemployment relief, and said the national government must find a way to prevent the continued foreclosure of farm and home mortgages.7 He was given a prolonged standing ovation, and in a pledge of support those present stated, “Without regard to our political affiliations we Governors of the States … hereby express our confidence and faith in our President and urge the Congress and all the people of our united country to cooperate with him.… He is ready to lead if we are ready to follow.”8
Roosevelt was riding a tidal wave of support. First reaching out to the leaders of Congress, then appealing to the governors were the instinctive acts of a consummate politician. FDR needed no focus groups or opinion polls; he did not require staff direction or an array of political consultants. He was the quarterback calling the plays, and the people responded by giving him their confidence.†
Monday afternoon, Senate Democrats took the unprecedented step of agreeing to bind themselves to support the president whenever a majority of the caucus voted to do so.9 Since the Democrats controlled the Senate 60–35, that ensured quick passage of whatever emergency measures Roosevelt chose to send up.* Three Democrats, including Huey Long, voted against the resolution, but it is unlikely that any caucus vote would have bound the Kingfish.10
Secretary Woodin, meanwhile, had run into difficulty. Drafting comprehensive banking legislation on the spur of the moment was not as simple as it had first appeared. Bankers summoned to Washington on Sunday gave conflicting advice, and Treasury officials were uncertain how best to reopen the banks and ensure an adequate supply of currency after so much had been withdrawn. After forty-eight hours of nonstop discussions at the Treasury, Woodin broke off the talks and went to bed. “I’ll be damned if I [will] go back into those meetings until I get my head cleared,” he told Moley.11
Monday night Woodin dozed a little, strummed his guitar a little, and th
ought through the various proposals to restore the nation’s money supply. He rejected the idea of issuing temporary scrip as the government had done during the panic of 1907, and settled on the Federal Reserve’s proposal to issue new currency under the Federal Reserve Act. “It won’t look like stage money,” he told Moley Tuesday morning. “It’ll be money that looks like money. And it won’t frighten people.”12†
Relying largely on intuition and common sense, Woodin had cut through a fog of financial advice and adopted the simplest of all possible solutions: the government would simply print new money. It would be backed not by gold or silver but by the assets of the banks in the Federal Reserve system. Woodin laid the plan before Roosevelt at ten o’clock Tuesday morning and in twenty minutes had FDR’s approval. With the currency issue decided, the rest of the banking bill fell into place, although putting the provisions into statutory language by noon Thursday proved a near-run thing.13
On Wednesday morning, at the height of the banking crisis, FDR held his first press conference in the White House. Coolidge had met the press regularly, but his comments had always been off the record. Hoover had held weekly news conferences but the sessions had been brief and exceedingly formal, the president standing behind a podium in the East Room of the White House. Both Coolidge and Hoover had required that the questions be submitted in writing beforehand and answered only those they wished to. Roosevelt received reporters sitting at his desk in the Oval Office. He met them every Wednesday and Friday and answered off the cuff. Correspondents could ask whatever they wished.14 Nearly 125 members of the White House press corps crowded into FDR’s office at ten o’clock March 8 for a remarkable give-and-take with a president who clearly enjoyed every minute. After shaking hands with each reporter, Roosevelt set the ground rules. He would not answer “iffy” questions or those “which for various reasons I do not wish to discuss, or am not ready to discuss, or I do not know anything about.” He said he did not wish to be quoted directly unless Press Secretary Steve Early provided the quotation in writing. Straight news should be attributed to the White House. Some of his remarks would provide background information that could be used but not attributed. And then there would be confidential off-the-record material, which was not to be divulged to anyone.15 Nearly all of FDR’s comments that morning were for background or off the record. The one item of hard news was that he would send his banking bill to Congress the next day and his message would be brief. For forty minutes the president bantered with reporters, answered candidly, and gave them almost nothing they could use directly. “Mr. Roosevelt looked fresh and fit,” reported The New York Times. “There was little sign of the strain he has undergone—and is still under—since he became President.”16
It was a virtuoso performance. When Francis Stephenson of the Associated Press intoned the traditional “Thank you, Mr. President,” hard-bitten Washington reporters broke into spontaneous applause. Every correspondent in the room had a sense that he or she was participating in the new administration, being confided in by the president and treated as a partner. “We were antagonists,” wrote Richard Lee Strout of The Christian Science Monitor, “but we liked each other and we laughed and had a perfect understanding of what each was trying to do and there was a certain degree of affection.”17*
After his press conference Roosevelt met with Harvard’s Felix Frankfurter, hoping to entice him into becoming solicitor general—the number two post in the Justice Department and the government’s primary advocate before the Supreme Court. Frankfurter declined but in the course of the conversation told FDR he was planning to call on retired Supreme Court justice Oliver Wendell Holmes, who was celebrating his ninety-second birthday. Roosevelt, who knew Holmes from the Wilson years, was intrigued and told Frankfurter he would like to pay his respects as well. That afternoon, breaking with protocol,† the president took time off from the banking crisis to visit Justice Holmes at his I Street home. Negotiating the front steps was difficult for Roosevelt, but he found Holmes in a convivial mood, slightly tipsy on bootleg champagne. They chatted amiably about old times, including prizefighters they had known, and when it was time to leave FDR asked the old justice for his advice. Holmes, who friends said had never been psychologically mustered out of the Union Army after the Civil War, drew himself slowly to attention and said, “Mr. President, you are in a war. Form your battalions and fight.”18
When FDR came out on the street, hundreds of citizens cheered and clapped uproariously. “Gosh, it sounds good to hear that again,” whispered Richard Jervis, chief of the White House Secret Service detail, who had served four years under Hoover.19
Roosevelt’s decision to visit Holmes was purely personal. “Your kind thoughtfulness in coming sets me free to express my congratulations and good wishes,” wrote Holmes afterward. “They are very sincere, and follow what seems to me a most fortunate beginning of the term.”20 Holmes is alleged to have observed that Roosevelt had a second-class intellect but a first-class temperament. The story was propagated principally by the literary critic Alexander Woollcott but is as apocryphal as Andrew Jackson’s supposed comment after the Supreme Court’s 1832 decision in Worcester v. Georgia: “John Marshall has made his decision, now let him enforce it.” There is absolutely no basis for the statement attributed to Jackson nor any reason for him to have made it.21 The words were put into Old Hickory’s mouth by Horace Greeley in 1864, nineteen years after Jackson’s death, just as the Holmes quote was put into the justice’s mouth by journalists intent on good copy.22*
Wednesday evening, Roosevelt called congressional leaders of both parties to the White House to brief them on the banking bill he would submit when Congress convened the next day. Earlier he had met separately with Huey Long and California’s newly elected Democratic senator, William Gibbs McAdoo. Both would be key players Thursday: Long, a perennial loose cannon, and McAdoo, who had been Wilson’s longtime secretary of the Treasury. Either could cause trouble, and Roosevelt flattered them with a half hour’s personal attention.
The text of the bill was not yet in final form, but FDR, flanked by Woodin and Attorney General Cummings, carefully reviewed a draft with the legislative leaders. As Roosevelt explained it, the bill would confirm his actions under the Trading with the Enemy Act, give the president added powers to regulate gold and foreign exchange, provide for the issuance of Federal Reserve notes to restore the nation’s currency supply, authorize the secretary of the Treasury to review and reopen all banks found to be solvent, and reorganize those in trouble so they too could eventually reopen. The meeting lasted from 8:30 until shortly before 1 A.M. Drafters at the Treasury were still working on the statutory language, but from his presentation it was clear that Roosevelt had decided to preserve the banking system more or less as it was rather than take advantage of the crisis to nationalize it.
The House of Representatives convened as scheduled at noon, Thursday, March 9. Congress would remain in session until June 15, exactly one hundred days, the most productive legislative session in history. As soon as the members were sworn in and officers elected, the president’s banking message was read: “I cannot too strongly urge upon the Congress the clear necessity for immediate action.”23 At 2:55 P.M. House majority leader Joseph Byrns of Tennessee introduced the legislation (H.R. 1491) under a closed rule that permitted no amendments. Debate was limited to forty minutes. Minority Leader Snell asked Republican support: “Give the President what he says is necessary.”24 The printed bill was not yet available, and Chairman Steagall of the Banking and Currency Committee read aloud from a typewritten copy. Before he finished, shouts of “Vote! Vote!” echoed through the chamber. There was no debate. There had been no hearings, no committee consideration, no action by either caucus. Members took on faith what the leadership presented, and the leadership took on faith what FDR requested. Shortly before four o’clock Speaker Henry T. Rainey of Illinois asked for the yeas and nays. The bill passed with a unanimous whoop of approval. There was no request for a roll call. T
he New York Times reported that the members appeared like poker players “who throw in their last chips in the belief they will win.”25*
By the time the Senate turned to the bill, printed copies were on hand and the debate was less perfunctory. Huey Long sought greater aid for the “little banks at the forks of the creeks,” while western populists, led by Robert La Follette, wanted FDR to nationalize all the banks. The amendments were shouted down, and just before seven-thirty the Senate passed the bill 73–7, the opposition coming primarily from Progressives, who believed the bill did not go far enough in asserting federal control.26 An hour later the measure was at the White House. FDR whipped out a dime-store pen Nancy Cook had given him and quickly added his signature. The entire legislative process, from the bill’s introduction in the House to the president’s signature, took less than six hours. After signing the bill into law Roosevelt extended the bank holiday. Originally, he hoped some banks might reopen Friday. But officials at Treasury and the Federal Reserve needed more time to separate the sound banks from those that needed help.
Under regulations promulgated by the president, banks wishing to reopen required a license from the secretary of the Treasury. Reviewing assets and liabilities was a time-consuming process, but within a month, eight out of every ten banks were open again. By and large this was a bureaucratic process. The exception was the Bank of America, A. P. Giannini’s West Coast goliath, with 410 branches in California and more than a million depositors. Woodin and Comptroller of the Currency F. Gloyd Awalt, a Hoover holdover, believed the giant bank was no worse off than any other California bank and to keep it closed could cause enormous distress with ramifications throughout the country. Lined up on the other side was the Federal Reserve Bank in San Francisco, headed by John U. Calkins, an old-line banker with strong ties to California’s economic and social elite. The clubby West Coast banking community, of which Calkins was a charter member, despised and feared Giannini, an upstart Italian immigrant whose vigorous expansion threatened their supremacy. Calkins was adamant in his opinion that the Bank of America was insolvent, although the evidence was mixed.
