Penguin History of the United States of America (102 page)

The Social Security Act was for the future. While the Depression lasted, there had to be relief; and the Depression lasted throughout the New Deal. Hopkins and Ickes achieved wonders, within the limits restraining them. Ickes, wearing his hat as Secretary of the Interior, rescued the Indians. In 1934 he put through the Indian Reorganization Act, which not only stopped the depredations described in
Chapter 5
of this book, but actually made provision to buy land and present it to the tribes. It recognized tribal
authority, encouraged the adoption of modern forms of tribal government and did something for Indian education. By the time that enemies of the red man won national power again, after the Second World War, the Indians had recovered so far that they were able to beat off the attackers and begin the slow rise which, with many setbacks, has characterized their history ever since. This was one of the most complete, characteristic and heart-warming successes of the reforming New Deal.

Wearing his hat as head of P W A, Ickes did the lion’s share of the building, while Hopkins did the boondoggling. This derisive, unfair, but convenient term came into use among the enemies of the New Deal to describe make-work jobs – the example always used was leaf-raking – for which ‘reliefers’ (another term of the time which has happily lapsed) were paid wages. Actually, this reflected Hopkins’s perfectly sound principle that the souls of the reliefers must be saved as well as their bodies. Proud and individualistic Americans found going on the dole a horribly humiliating experience. It involved a means test; it was a confession of failure; once it was accepted it tended (many thought) to become narcotic: its recipients lost the will, the hope to seek work again. This last point was dubious, for most of the reliefers jumped at the chance of earning. Hopkins saw to it that they got that chance. He set them to building roads, schools, playgrounds, sports fields; unemployed teachers were paid to keep the schools open in the countryside and to hold adult classes in the cities; streams were dredged, bridges built, handicraft courses were set up and students were put through college. FERA’s Division of Rural Rehabilitation gave or lent money to farmers with which to buy seed, fertilizer, livestock and tools and so keep off the relief rolls. Some of Hopkins’s other ideas were magnificently imaginative. Acting on the excellent principle that ‘they’ve got to eat just like other people’, he made work for writers and artists, which is why so many American post-offices are now adorned with rather awful mural paintings, and why so many book-collectors still hunt for the Federal Writers American Guides, a set of volumes on states, cities and territories which, collectively, remains one of the best introductions to America that there is. The monument which even more perfectly expresses the spirit of the New Deal is Timberline Lodge high on Mount Hood in Oregon. It seemed pure boondoggle at the time; nobody foresaw its successful future as a ski-lodge. It is built round a Cyclopean chimney on the edge of the snow slopes, gazing over the smoky forests, every giant stone of it telling of the love and skill of the men who built it. In the spirit of medieval craftsmen they carved small wooden statues of birds and animals, and set them on the newel posts of the Lodge’s many stairs. Those statues have since been worn almost into shapelessness by the touch of thousands of hands, but there they stay, as reminders. Timberline is a true American cathedral; and photographs of its joyous opening and dedication by President Roosevelt still adorn it.

Not the most brilliant boondoggling, however, could rescue the American
industrial economy; nor could the Triple A; the NRA failed. Wall Street bankers were too frightened, too selfish and, as the Crash had proved, too incompetent (when not too dishonest) to take on the responsibility. In the spring of 1933 J. P. Morgan Jr showed how unworthy he was to be his father’s heir by refusing to use the resources of the House of Morgan to rescue a single, much smaller New York bank: dull and timid, he was determined to leave the entire banking problem to Washington. All the same, he and his like still commanded vast power, even if they now used it only to obstruct, and throughout the summer a savage if silent struggle went on between them and the administration. Ultimately victory went to the New Deal, because so many of the banks were still insolvent and would never be able to re-open without the assistance of the federal government. In this way New York lost its ultimate control over the American economy. The administration’s agency for exercising its new power was one it had inherited from Herbert Hoover, the Reconstruction Finance Corporation; but under Roosevelt it was utterly transformed. Hoover had envisaged the RFC as an agency for lending money to financial institutions which were in difficulties; he had not realized that their chief difficulty, in most cases, was their load of debt, which RFC would only make heavier; and he vetoed an attempt to enlarge the Corporation’s functions. Roosevelt, on coming to power, gave the RFC to Jesse Jones, an energetic Texan businessman with the drive and optimism of his state: a stark contrast to the cautious Easterners who ran the corporation under Hoover. Jones’s first task was to get control of the banks and then rescue them, whether they liked it or not (mostly they didn’t), on his terms. This involved using the vast funds at the RFC’s disposal ($500 million in money, $1,500 million in government-guaranteed, tax-free bonds) to buy shares in the banks. Jones did this on such a scale that by 1935 the RFC was America’s largest financial institution, the banks’ banker, a super-bank, owning about one-fifth of the total banking stock in the country. As such it was in an excellent position to direct investment policy, and Jones saw to it that banking services were made available where, from the national point of view, they would do most good – for instance, in communities that had been without banks until then. Jones’s expansionist, inflationary outlook was just what the situation required, and he must be given a large part of the credit for the substantial recovery that was under way by the time Roosevelt ran for re-election. Not that his position as a state-financed, government-backed super-banker could be indefinitely tolerated in a system still committed to free capitalist enterprise: Franklin Roosevelt, who liked to think of himself as the successor of Andrew Jackson, had no mandate to re-create The Monster. So once the banking system was operating smoothly again, the RFC stopped buying bank shares, and its role as the organizer of capitalism reverted to a reformed Federal Reserve System, reorganized by the Banking Act of 1935. But the RFC had plenty more commitments to keep it busy. Through its Commodity Credit Corporation it financed the operations of the Triple A.
Through the Export-Import Bank it tried to revive foreign trade. Through the Electric Home and Farm Authority it stimulated the market for electricity, of which the TVA was becoming a major supplier. In co-operation with the Federal Housing Administration it helped real-estate dealers find customers and first-time house-buyers find mortgages. In short, all the other New Deal agencies discovered, to their delight, that the RFC with its revolving fund (for its investments brought in substantial dividends) was a bottomless source of cash which was always on tap and did not have to be filtered through Congress. Congress might have objected to this state of affairs – it was supposed to control the purse-strings, after all – except that Jesse Jones was always very helpful in financing projects for particular Senators and Congressmen in their states and districts. No wonder that the RFC became FDR’s favourite political instrument; no wonder it outlasted all the other New Deal agencies (it was not dismantled until 1953). In retrospect its importance lies less in the size of the power it wielded over the American economy, great though that was, than in the new role in which it displayed the federal government – a role which had been foreshadowed in the First World War; but now it was peacetime. The RFC was the new governor of the economic machine, and the master of the RFC was the President of the United States.

Roosevelt’s re-election in 1936 was the most certain thing since George Washington’s. To be sure, he had long been under attack from the Left for not doing enough (his most vehement critic on that side being Senator Huey Long, until his assassination in September 1935) and on the Right for doing too much. The
Literary Digest
, a distinguished magazine, conducted a poll by telephone and predicted that Roosevelt would lose. It had not noticed that 67 per cent of American households still lacked telephones, though their members had votes. In reality, nothing could weaken the President’s hold on the American people. He had accustomed them to look to him for ideas, leadership and help; and although the Depression still persisted, it was much mitigated. The New Deal policies had created six million jobs, softened the sharp edges of unemployment as an experience and laid the foundations for a better future; done all this, besides, with good humour and palpable goodwill that were immensely endearing. ‘Mr Roosevelt is the only man we ever had in the White House who would understand that my boss is a son-of-a-bitch,’ said one working man. Others who thronged to his campaign meetings and parades shouted out remarks like ‘He saved my home,’ ‘He gave me a job.’ ‘I would be without a roof over my head if it hadn’t been for the government loan. God bless Mr Roosevelt and the Democratic party who saved thousands of poor people all over this country from starvation,’ wrote a farmer. ‘Your work saved our humble little home from the Trust Deed sharks and are we a happy couple in our little home, and listen too, the Real Estate Business is now over 100 per cent better than in 1932, life is 1,000 per cent better since you took Charge of our United States.’ That was a former life-long Republican Californian real-estate
broker, writing to his President.
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The blacks, who had been harder-hit than any other section of the population by the Depression, turned away from the party of Lincoln to the party of Roosevelt, for he was helping them too. With such friends, there was no need to count the enemy, but somebody did so all the same. At the election Roosevelt carried every state except Maine and Vermont; he got 27,751,612 popular votes, while his opponent, Governor Alfred Landon of Kansas, got 16,681,913 votes – a respectable testimony to the stubbornness of American party loyalties, but not much more. For the fourth election running the Democrats increased their numbers in Congress; for the first time since 1894 there were fewer than a hundred Republican Congressmen; and there were only sixteen Republican Senators. The
Literary Digest
went out of business.

Roosevelt’s position, at the beginning of his second term, was to all appearances unassailable. He had vindicated American democracy in a darkening world, rescued ‘the profit system’ and brought succour to the millions of his desperate fellow-citizens. For this achievement he had been lifted to a pinnacle from which nothing could cast him down. But he had no intention of merely basking in his glory. There was much work still to be done for America, and he intended to do it.

The business leaders were not going to help him. Having brought the United States so close to shipwreck they very naturally felt that as soon as the new pilot had steered them off the rocks they ought to be given the helm again. Roosevelt’s refusal to make way for them, or even to take their advice, they took as an insult (it was certainly a vote of no confidence). They were muddled with outworn slogans that preached the wickedness of strong government, the virtues of ‘free enterprise’. Besides, ‘that man in the White House’ had put up their taxes and supported the labour unions. With few exceptions, they broke with him entirely, except when they needed help from Jesse Jones.

Reluctantly, Roosevelt had accepted their enmity. Now he meant to be a leader of a different sort. Perhaps he could still hear the cheers that had greeted him at the Democratic convention in 1936 when he had shouted that ‘I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match… I should like to have it said of my second Administration that in it these forces met their master.’ Superb in his own political skill, and properly confident in the creativity and devotion of his New Dealers, nothing can have seemed beyond his power.

Yet, as he should have known, it was still necessary to tread warily. True, he had wrought some astonishing transformations in the previous four years; but he had not appointed a single Supreme Court Justice; the Republican party, though so weak in Congress and with only a handful of governorships to its name, was scotched, not killed (subsequent decades have shown
it to be unkillable); most significant of all, he had not yet made over the Democratic party. No doubt that body, including many of its Senators and Congressmen, owed him a lot; no doubt its votes had come largely from the new supporters he had won to it; but the actual full-time party workers and representatives were still much what they had always been. Beneath the surface unanimity and the cheer of the victory parties lurked the old divisions which had wrecked Woodrow Wilson. They were now to come near to wrecking Franklin Roosevelt.

In the rashest moment of his career he decided to attack the Supreme Court first of all his enemies. To understand his decision we must remember that the Court had tried him severely and had been setting itself more and more inflexibly against reforming statutes, whether state or federal, since 1921, when former President Taft had been made Chief Justice. He told his brethren that he had been appointed to reverse a few decisions, and for the next ten years led them down an ever darker track of reaction, inflexibility and pedantry, ostensibly to protect the Constitution from bolshevism, but really to protect Taft’s own economic and political prejudices. His retirement and death were the signals for a vigorous political outcry: before Hughes could be appointed as his successor the progressives in the Senate denounced the recent record of the Court (it had taken to disallowing acts of Congress with an abandon never displayed before); and Hoover’s original nominee to fill another vacancy on the bench was rejected. But these warnings went for nothing. Under Hughes, the Court majority continued on the same reactionary course, in spite of the protests of three of the ablest Justices, Brandeis, Stone and Cardozo. In these circumstances a clash with the New Deal was inevitable, not only because New Deal statutes were often so badly drawn up as to be of questionable constitutionality (as we have seen, the decision in the sick chicken case was unanimous), but because the whole thrust of New Deal policy was directed against the political philosophy which the Court majority held sacred. Mr Justice Sutherland, for one, was not impressed by arguments that an economic crisis demanded a reinterpretation of the Constitution: he had lived through economic crises before. The Constitution must be preserved and respected in bad times as in good.