Hard Times (42 page)

He had this passionate conviction that he could in fact end poverty in California.
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I remember six or eight years after the ’34 campaign, way in the wilds of northern California, written on rocks or on approaches to bridges, you could see this slogan in chalk: “End Poverty In California.” It was an enormously educational campaign. I think it would have been a disaster if Sinclair had been elected. He wouldn’t have known what to do. But he did have the conviction that poverty was man-made, that you didn’t need it.

Going around the state in those years, you saw California as synonymous with abundance. It’s so enormously rich, especially in agriculture. Yet you saw all kinds of crops being destroyed. There were dumps in southern California, where they would throw citrus fruits and spray them
with tar and chemicals. At a time when thousands of people were in real distress.
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So my Menckenisms began to fade as the Thirties progressed.

You could easily romanticize the Thirties. The racial attitudes were not very good. I was intimately involved with these issues, and the attitudes were incredible. Though there was no categorization of the poor as there is today—the former doctor, the man who lost his law practice, the businessman, everybody was in on it—there was no feeling that there was a national race problem.

I was appointed by Governor Culbert Olson in 1938 as Chief of the Division of Immigration and Housing. It put me in touch with all the minority groups in the state: Mexican-Americans, Japanese-Americans, Chinese-Americans, Hindus, Filipinos. Negroes were not as significant as a group in California as they are today.

In the second half of the Thirties, about 350,000 Dust Bowl refugees flooded the state. They were promptly stereotyped, exactly like a racial minority. They were called Okies and Arkies: they were shiftless and lazy and irresponsible and had too many children, and if we improve the labor camps and put a table in, they would chop it up and use it for kindling. Once I went into the foyer of this third-rate motion picture house in Bakersfield and I saw a sign: Negroes and Okies upstairs.

When the war boom began in California around 1939, these Okies and Arkies were the salvation of the state. They promptly went into shipyards and defense plants. Within a couple of years, the stereotype began to fade. Now these people think of themselves as old Californians. Of course, they look down on the recent migrants from the South. The stereotype is the same.

When they first came in, they had no racist feelings. They were too preoccupied with their own distress. At the time of their migration, there were many Mexicans on public assistance, meager, inadequate. As the Okies came in, the authorities thought they could get rid of the Mexicans. I was eyewitness to many deportation trains that left the Southern Pacific station, taking thousands of Mexican-Americans back to Mexico, with their families and bundles of belongings. Of course, they’d turn right around and come back. And the process would be repeated.

I inspected labor camps. The conditions were not to be believed. There were no programs of aid for these people. The camps were filthy. We had a labor camp population of 175,000 in August and September, the harvest season. In the spring, they’d force people off relief rolls to take jobs at twenty cents an hour. I induced Governor Olson to let me hold some hearings. We recommended they not be cut off relief unless they were paid
twenty-seven and a half cents an hour. The reaction could hardly have been more violent had we bombed San Joaquin Valley. Outrageous, that they should pay twenty-seven and a half cents an hour.

 

 

The impulse of the New Deal was over by 1938. Its most creative years were 1934 to 1938. There were a lot of good times, too, because money was not so terribly important. A friend of mine and I had a protégé, a young writer. We rented him a room in Los Angeles and put up $5 a week to sustain him while he was doing a couple of books. He managed to live on $10 a week. On so meager an amount, we were philanthropists, you see. (Laughs.)

If such times were to come again, it would not be the same. Our discontents today are more vague and ill-defined. At the same time, we have an apparatus of police controls that could develop into a kind of American fascism. It would not be European style.

I think the New Deal saved American capitalism. It was a bridge. But it never really solved the problems.

Co-author (with A. A. Berle) of
The Modern Corporation and Private Property.

 

AT THE BEGINNING of the New Deal, they called it a revolution. Then they began to say it wasn’t a revolution. Our institutions were being shored up and maintained. What really happened was a revolution in point of view. We backed into the Twentieth Century describing our actual economy in terms of the small enterprises of the Nineteenth Century.

We were an economy of huge corporations, with a high degree of concentrated control. It was an economy that was in no sense described by classical theory. What Roosevelt and the New Deal did was to turn about and face the realities.

It was this which produced the yeastiness of experimentation that made the New Deal what it was. A hundred years from now, when historians look back on it, they will say a big corner was turned. People agreed that
old things didn’t work. What ran through the whole New Deal was finding a way to make things work.

Before that, Hoover would loan money to farmers to keep their mules alive, but wouldn’t loan money to keep their children alive. This was perfectly right within the framework of classical thinking. If an individual couldn’t get enough to eat, it was because he wasn’t on the ball. It was his responsibility. The New Deal said: Anybody who is unemployed isn’t necessarily unemployed because he’s shiftless.

Roosevelt was building up new ideas in a milieu of old ideas. His early campaign speeches were pure Old Deal. He called for a balanced budget. When he got into office, the whole banking system collapsed. It called for a New Deal.

I was never told what to do at any time, during those early days. I made my own way. We had meetings that would run into the early morning. A dozen of us sitting around the table, thrashing out problems. They were more than bull sessions, because we were making decisions.

I answered some of the mail for Wallace. Great quantities came pouring in, letters from everywhere. I must have handled some two, three hundred. They were proposals from people, solutions to all sorts of problems. Some of them crackpot, some of them quite good. Everybody had a suggestion. The country was aware, as it never was before, that it was on the edge of something.

Talking a couple of days ago with a couple of old New Dealers, we agreed it was a very exhilarating period. There was no question in our minds we were saving the country. A student of mine remembered how exciting it was to him. He worked in the Department of Labor. He said, “Any idea I had, I put down on paper. I’d send it up and somebody would pay attention to it—whoever it was, Madame Perkins, Ickes or Wallace.” This is how it was all the way through.

I remember a request from Mrs. Roosevelt. One of the big corporations had thumbed its nose at a stockholder. The woman had written to Mrs. Roosevelt: Have they a right to do this? She sent the letter to Tugwell, who sent it to me. I wrote an answer for Mrs. Roosevelt to send to her. I remember I did have a suggestion for her.

One of the first things I did was get in touch with Mary Rumsey. She was head of the Consumer Advisory Board of the NRA. It was she who sold Roosevelt on the idea of having the consumer represented. The first thing she did when we met was take me down to her limousine—she was Averill Harriman’s sister—and had her chauffeur drive us up and down the countryside as we talked. We spent all morning talking about the needs of the consumer, his protection. She was very perceptive.

Another thing I remember. I brought Leon Henderson into the NRA. We sent him up to discuss some problems with General Hugh Johnson, the chief. He was a blustery, flamboyant person. As Henderson started to
talk, Johnson began to ride all over him. Leon swore back at him and pounded the table. Johnson loved it and made him his assistant. (Laughs.) This was the kind of climate in Washington at the time—highly personal and highly charged.

The NRA was one of the most successful things the New Deal did. It was killed when it should have been killed. But when it was created, American business was completely demoralized. Violent price cutting and wage cutting … nobody could make any plans for tomorrow. Everybody was going around in circles. The NRA changed the attitudes of business and the public. It revived belief that something could be done. It set a floor on prices and on wages.

Pressures had been coming from business to get free of the anti-trust acts and have business run business. Pressure was coming from labor for a shorter work week to spread jobs. It was a whole institutional matter. Roosevelt put the two together. Mary Rumsey brought in consumers’ rights. So there were three advisory boards: Business, Labor and Consumer. Codes of behavior were set up. You couldn’t sell below cost…. Labor got collective bargaining rights. It was, in a sense, a prelude to the Wagner Act. The wage increases were worked out between business and labor.

Most important, laissez faire in the Nineteenth Century manner was ended. The Government had a role to play in industrial activity. We didn’t move into a fascist kind of governmental control, because we continued to use the market mechanism. In the two years of the NRA, the index of industrial production went up remarkably.

Things had been going downgrade—worse, worse, worse. More than anything else, the NRA changed the climate. It served its purpose. Had it lasted longer, it would not have worked in the public interest. Although toward the end, the consumer group was making progress.

Had the NRA continued, it would have meant dangerously diminishing the role of the market in limiting prices. You see, there was little Governmental regulation of the NRA. The Government handed industry over to industry to run, and offered some minor protection to others in the form of Labor and Consumer Advisory Boards. Industry became scared of its own people. Too much power was being delegated to the code authorities. It was business’ fear of business rather than business’ fear of Government, though they wouldn’t quite put it that way. You might say, NRA’s greatest contribution to our society is that it proved that self-regulation by industry doesn’t work.

Laissez faire as such certainly did not come to an end with the New Deal. We still have a tremendous amount of freedom of decision-making in the individual corporate enterprise. The new element is the government’s positive responsibility for making our economy run.

As for those first New Deal days, much of the excitement came from
improvisation. Nothing was fully set in the minds of the people there. They were open to fresh ideas. Always. We wouldn’t have been where we are now, were it not for Washington improvisations….

This outflowing of people felt they were somehow on the way—though they were not sure how. A surprising number, we discovered, were sons of ministers, rabbis, missionaries. Yes, there was an evangelical quality, though it was non-religious. People who were personally concerned about a better world, came to Washington, were drawn to it. Even though where we were going was still to be worked out. There was an elan, an optimism … an evangelism … it was an adventure.

 

DURING THE WHOLE ’33 one-hundred days’ Congress, people didn’t know what was going on, the public. Couldn’t understand these things that were being passed so fast. They knew something was happening, something good for them. They began investing and working and hoping again.

People don’t realize that Roosevelt chose a conservative banker as Secretary of Treasury
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and a conservative from Tennessee as Secretary of State.
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Most of the reforms that were put through might have been agreeable to Hoover, if he had the political power to put them over. They were all latent in Hoover’s thinking, especially the bank rescue. The rescue was done not by Roosevelt—he signed the papers—but by Hoover leftovers in the Administration. They knew what to do.

The bank rescue of 1933 was probably the turning point of the Depression. When people were able to survive the shock of having all the banks closed, and then see the banks open up, with their money protected, there began to be confidence. Good times were coming. Most of the legislation
that came after didn’t really help the public. The public helped itself, after it got confidence.