Fear Itself (38 page)

This signal speech explicitly rejected separating industrial policies from social welfare legislation, just the partition that commonly is said to distinguish the two phases of the New Deal’s initial period. Economic guidelines devised to prevent a “state of anarchy,” the candidate insisted, must not stand alone, but must move ahead in tandem with the kinds of welfare state programs Congress legislated three years later. “By no other means can men carry the burdens of those parts of life which, in the nature of things afford no chance of labor; childhood, sickness, old age. In all thought of property,” the talk’s stirring language announced, “this right is paramount; all other property rights must yield to it.”
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Two years later, at just the moment many have identified with a shift from the First to the Second New Deal, President Roosevelt took to the radio to review the achievements of the second session of the Seventy-third Congress. Speaking to the country on June 28, 1934, he celebrated the legislature’s long list of enactments in language that resonated with the forceful terms he had been using ever since his Commonwealth Club address to promote the assertive program that had been remaking the relationship between government and the economy. Noting that New Deal initiatives continued to face resistance, he identified its enemies with a “selfish minority.” These opponents had been mounting arguments about the loss of liberty, “giving strange names to what we are doing. Sometimes they will call it ‘Fascism,’ sometimes ‘Communism,’ sometimes ‘regimentation,’ sometimes ‘socialism.’” To counter such “prophets of calamity” who claim “a loss of individual liberty” and draw attention to parallels between the New Deal and “other nations [that] may sacrifice democracy for the transitory stimulation of old and discredited autocracies,” the president asked his listeners to “answer this question. . . . Have you lost any of your rights or liberty or constitutional freedom or action and choice? . . . Read each provision of the Bill of Rights,” he counseled, “and ask yourself whether you personally have suffered the impairment of a single jot of those real assurances.”
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Just over a year before he would sign both the National Labor Relations Act and the Social Security Act into law, this talk projected “the establishment of means to provide sound and adequate protection against the vicissitudes of modern life—in other words, social insurance” in terms that were identical to those he had offered in San Francisco.

Such rhetoric and analysis remained features of the radical moment from start to finish. Speaking to the assembled delegates in Philadelphia on June 27, 1936, Roosevelt accepted the Democratic Party nomination for a second term by boasting how the New Deal’s comprehensive program to reshape American capitalism had countered the “economic royalists” who, “thirsting for power,” had “created a new despotism,” an “economic tyranny” in which “private enterprise, indeed, became too private.” The New Deal had fought back against “the privileged princes of these new economic dynasties” by having refused to operate by older rules that distinguish “political freedom,” which is “the business of the government,” from “economic slavery,” which is nobody’s business.”
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Echoing the language and logic he had articulated both in San Francisco and in his inaugural address, the president’s retrospective appraisals in early 1937 explained how, in making “the exercise of all power more democratic,” the New Deal had created “the largest progressive democracy in the modern world.” He did not back away from “the broad objectives of the National Recovery Act,” which he called “sound,” and he recalled how Washington had “begun to bring private autocratic powers into their proper subordination to the public’s government” and how, by fashioning a welfare state and endorsing labor rights, it had constructed “new materials for social justice.”
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The president also contrasted how this successful effort “to maintain a democracy”
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had been carried out in a collaborative exercise between Congress and the executive branch, thus distinguishing America’s response to the economic crisis from the ways the dictatorships had been addressing the same problems. In underscoring “mutual respect for each other’s proper sphere of functioning in a democracy” and in stressing America’s refusal “to permit unnecessary disagreement to arise between two of our branches of Government,”
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he explicitly situated the early New Deal as engaged in a front-line struggle to disprove claims that liberal democracies could not function effectively. Explaining “why we have fought fear” as a display of “faith—in the soundness of democracy in the midst of dictatorships,”
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the president insisted that the New Deal had been demonstrating “that democracies are best able to cope with the changing problems of modern civilization. . . .” Speaking before an assembled Congress on January 6, 1937, he proclaimed, “Ours was the task to prove that democracy could be made to function in the world of today,” adding that “because all of us believe that our democratic form of government can cope adequately with modern problems as they arise,” it had been vital to send “forth a message on behalf of all the democracies of the world to those Nations which live otherwise. Because such other Governments are perhaps more spectacular, it was high time for democracy to assert itself.”
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At a time when so many observers thought that parliaments crippled liberal democracies, the president stressed how precisely the opposite had been occurring in the United States. America was confronting the problems of the Depression and economic insecurity, he reported, by passing “new laws consistent with an historic constitutionalist framework.” He further underscored the central task of “the Legislative branch of our government” as it grapples with “the curbing of abuses, the extension of help to those who need help, or the better balancing of our interdependent economies.”
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In part a prelude to the impending and ill-fated proposal to enlarge the Supreme Court that had invalidated the NRA and other New Deal laws, this emphasis on congressional power underscored how problem solving in America required legislative action.

It was, in fact, a surge of statutes, not executive commands, that recast American capitalism. Every groundbreaking effort to place the federal government at the center of economic affairs and rebalance power in civil society proceeded through congressional lawmaking. The record is considerable. In addition to the NRA, which made industry its focus, the Hundred Days ushered in the Agricultural Adjustment Act, which profoundly reorganized American agriculture by tackling the problems of overproduction and low commodity prices through a program of subsidies to farmers in return for limiting their crops and the number of livestock. Repairing a system in desperate straits, the Banking Act of 1933 separated investment from depository banks. It also required institutions that were part of the Federal Reserve to possess sufficient capital reserves, allowed the Federal Reserve to regulate savings bank interest rates, and guaranteed the safety of deposits through a Federal Deposit Insurance Corporation.

The fusillade of laws continued. Following a nearly 90 percent decline in the value of the stock market between 1929 and 1933, the government also undertook to cleanse markets in securities. The Securities Act of 1933 mandated that stocks be registered, and demanded a great deal of disclosure before they could be sold. The Securities Exchange Act of 1934 further extended the scope of federal law to include all securities that were publicly traded, and put a new body, the Security and Exchange Commission (SEC), in charge of these regulations, with a mandate to prevent “manipulation and sudden and unreasonable fluctuations of security prices.”
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Congress passed the Tennessee Valley Authority Act in 1933, a sweeping project based on an existing dam and infrastructure facilities that had been constructed at Muscle Shoals, Alabama, during World War I. As an instrument of resource planning on a massive scale with powers of eminent domain, the TVA was fashioned as a public power company whose sole stockholder was the United States and whose three directors were to be appointed by the president with the consent of the Senate. In 1934, the House and Senate also fundamentally altered the rules for participation in foreign trade. The Reciprocal Trade Agreements Act promoted freer trade on the basis of tariff agreements that the president was authorized to negotiate. The next year witnessed passage of two additional landmarks: the National Labor Relations Act, which established a coherent and supportive framework for unions to recruit members and negotiate with business on a more level playing field, and the Social Security Act, which targeted assistance to needy families, created a federal framework for unemployment insurance, and guaranteed income to Americans upon their retirement.

IV.

T
HE REMARKABLE
legislative productivity of this radical moment—a moment when government embraced a strong sense of a domestic public purpose—was propelled as much by the South’s elected representatives as by any other group in the House and Senate. Each of the era’s milestone laws required their support; each would have been blocked without it. As it turned out, each not only achieved a threshold level of positive votes by southern members but also garnered extensive and usually eager backing. With their leadership positions and control of committees, moreover, southerners were often in the lead, even when a particular law did not have special sectional importance.

The TVA, of course, did have a regional focus. Passed into law on May 18, 1933, weeks after Congress established the Civilian Conservation Corps (CCC) to put 250,000 unemployed men to work, and just days after approving the AAA and the Federal Emergency Relief Act, which sent money to the states to put cash in the pockets of desperate citizens, the TVA Act offered resource development and economic planning on an immense scale. It authorized the construction of huge power and navigation dams on the Tennessee River to control flooding, advance reforestation of stripped land, and, especially, bring electricity at low cost to a backward region, and it sanctioned building plants the TVA would run to supply area farmers with affordable fertilizer. Not surprisingly, the South’s representatives keenly backed the law, and welcomed Roosevelt’s reversal of the rejection by Presidents Coolidge and Hoover of proposals to develop the Tennessee Valley extensively. Making good on a pledge he had made at a campaign appearance at Muscle Shoals, Roosevelt’s proposal animated southern supporters for the arc of development it promised for a great swath of the South. The program for the river and its valley of some 40,660 square miles—the size of England—which originated in Missouri and moved through parts of Tennessee, Alabama, Georgia, North Carolina, Kentucky, and Virginia, had the potential, it was said, if with a degree of exaggeration, to generate some one million jobs for a population of six million.
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It would produce, Mississippi’s John Rankin informed the House, “hydroelectric power that will exceed in amount the amount of physical strength of all the slaves freed by the Civil War.”
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Saluting the president’s call in April 1933 for “national planning for a complete river watershed involving many States and the future lives and welfare of millions,”
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southern representatives, particularly in the House, backed the legislation by articulating populist themes. “Let it be used to manufacture for the farmers of the United States cheaper and better fertilizer, and second, let it be used to protect the people against the Power Trusts of America,” Tennessee’s John Ridley Mitchell proclaimed. “Let it produce throughout the years the yardstick by which the people of the Nation may know the fair, legitimate, and actual cost of electricity,” he stated, adding that “no one opposes this national project unless it is because of a selfish motive.”
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Samuel McReynolds, also of Tennessee, noted how desirable projects of this type were well beyond the scope of private capitalism. “No private interest could or would make this great development, and these great natural resources should always be held and controlled by the Government of this country for the best interest of its people.”
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Reporting how the legislation “has been bitterly fought by the manufactures of fertilizer, for the reason that they know when this plant is developed they cannot continue to get the price they are now getting,” David Glover of Arkansas spoke for “the farmer at home [who] is not here, but we are here as his representatives to speak for him, and to hear his voice rather than to hear that of the lobbyist for these great concerns.”
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Robert Thomason of Texas claimed the TVA would put an end to the exploitation by “private interests” that have “taken charge of the streams that God put in this old world for the benefit of everybody,” and he extolled the fact that electricity, which “has become as common and necessary as water, gas, and fuel,” would be brought “within the reach of every man in America to use it upon terms that he can afford.”
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What the
Washington Post
grudgingly came to call the country’s “greatest experiment in social reform,” and what the chairman of the TVA, Arthur E. Morgan, labeled a “laboratory for the nation,” was brought into being by strong partisan votes.
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Saluting how the federal government was successfully taking on the vigorous opposition of electric operating and holding companies and the area’s large fertilizer firms, and encouraged by plans to work closely with local governments to improve health services, roads, and other facilities development would require,
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all southern members but three (George Terrell of Texas in the House, and Thomas Gore of Oklahoma
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and Millard Tydings of Maryland in the Senate) backed the TVA.

These supporters assumed that the law’s administration would do nothing to disturb the racial order. They were correct. Like the Smith-Lever Act of the Wilson years, the TVA found no place in the fertilizer program for black colleges.
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A classic 1949 assessment of the first decade and a half found that “the typical position of the TVA agriculturalist is one of white supremacy,” marked by references “to ‘good and bad niggers,’ ” and animated by the assumption that white landlords were taking proper care of their black tenants, “who are generally deemed to be satisfied with their lot.” When blacks applied for jobs, a later analysis found, “they were relegated to the most menial positions. The authority barred them from vocational schools and from training sessions for higher-skilled jobs.” Additionally, TVA communities were rigidly segregated, with no blacks at all inside Norris, Tennessee, its planned model community on the outskirts of Knoxville’s metropolitan area.
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