Penguin History of the United States of America (100 page)

The chosen head of the National Recovery Administration (NRA) was General Hugh Johnson, a veteran of the Wilson administration’s organization for the First World War (he had worked under Bernard Baruch on the War Industries Board). A torrent of a man, with a wild tongue and a weakness for drink, he incarnated the will to succeed, to transcend the feuds and pettinesses of everyday life in one vast national effort to end the Depression – for America, a crisis so much worse than the war had been. He was a champion booster, and at first swept all before him. He gave the NRA a symbol, the Blue Eagle,
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which was displayed on flags, buildings, letterheads, newspapers – wherever Americans identified themselves with his programme. He held huge parades of NRA participants, the largest of which, a quarter of a million strong and watched by a million and a half, choked the streets of New York from morning until long after nightfall on 13 September 1933. It was twenties hoopla turned to useful purposes; the chief participating dignitary was no longer the corrupt gladhander Jimmy Walker (who, following exposure, had been induced to take a permanent holiday) but Governor Herbert Lehman, the rightful heir, at state level, of Al Smith and FDR himself. Like a frantic entrepreneur, Johnson flew from city to city in an army plane, rounding up pledges and promises; his agency negotiated codes of conduct for the great industries of America, and the manufacturers undertook to observe them. In short, the practices of industrial capitalism were to be reformed, ‘unfair’ competition was to be eliminated, making it possible to maintain prices or even to increase them; and businessmen, stimulated by the renewed prospects of profit which this offered, would begin to invest again. They would be able to pay wages and open factories once more, and the ordinary American, at present on the dole, would become a consuming, producing citizen again.
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Workers would be guaranteed a minimum wage and the forty-hour week, and under Section 7(a) of the NIRA, in return for letting capital have a free hand in ordering its side of business, would have the right of collective bargaining and the right of organizing freely. Company unions were thus undermined; the brutal strike-breaking practices of the recent past were outlawed. The AFL leadership did not see, or did not like, this opportunity; but John L. Lewis of the United Mineworkers did, and his energetic and astonishingly successful
efforts to promote unions in the major industries soon brought about a decisive split in the ranks of organized labour.

Yet it all proved a bubble. In the first place, Roosevelt, for reasons good and bad, detached the public works programme authorized by the NIRA from Johnson’s agency and handed it over to his Secretary of the Interior, Harold Ickes, a former Bull Mooser. Ickes, a man of prickly, indeed spiny integrity (he loved to think of himself as a ‘curmudgeon’), turned the Public Works Administration (PWA) into a great creative agency; the American landscape owes more to him, in the way of bridges, highways, dams and public buildings generally, than to any other individual in history, and scarcely a penny was lost in the traditional way of corruption. But neither Ickes nor the President had yet understood the capacity of a public works programme to stimulate the economy; so the PWA did no more than keep the construction industry alive, whereas, thanks to the multiplier effect, it might have been the engine of a real recovery; while Johnson, who did grasp this point, was left to cajole industry into good behaviour without either carrot or stick to make it keep its promises.

At first, mesmerized by Johnson’s enthusiasm, or the general euphoria at having an activist government at last, or by the willingness to try any port in a storm, or by the suspension of the Sherman Act, or by all these things together, the industrialists co-operated. The best-known, earliest and most successful of the codes was that for the cotton textile industry, which among other things ended the scandal of child labour in the cotton-mills and thereby prompted Roosevelt to remark, ‘That makes me personally happier than any other one thing which I have been connected with since I came to Washington.’
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The coal code eliminated child labour in the mines, equalized wages and introduced a thirty-five-hour week. But it was easier to get codes agreed than to secure compliance with them, especially since, fearing that the whole NIRA was unconstitutional (he had good reason, as events were to show), Johnson did not dare to use the draconian powers it gave him lest he be challenged in the courts. And the commitment to minimum wages, maximum hours and regulated prices, loudly proclaimed by the administration, not only implied that businessmen might have to accept increased costs without the compensation of increased profits, but went counter to the policy of reactivating American industry by conciliating its owners. There were some astonishing victories: Henry Ford, for instance, who refused to subscribe to the automobile code, nevertheless observed its wages and hours provisions; but they could not compensate for the discontent which began to engulf the NR A from all sides, nor, above all, for the fact that the economy showed few signs of immediate, complete recovery.
The NRA became, unfairly, the scapegoat for this failure, although it created no fewer than two million jobs. Nor could it fight back effectively: it was too riddled with contradictions,
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reflecting the confused economic thought at the very heart of the New Deal, where a dozen different advisers with a dozen different points of view (all of them at least partially valid) struggled to win the President’s backing. As 1933 wore into 1934 controversy grew ever noisier and more vigorous. Personal antagonisms at the top did not help, nor did the widespread feeling that the NIR A gave altogether too much power to the government in Washington to regulate American lives and businesses: old Carter Glass actually accused it of transplanting Hitlerism to every corner of the nation. In September 1934, Hugh Johnson resigned and the agency was reorganized; but it was too late. The case of
Schechter Poultry Corporation
v.
United States
was already finding its way through the courts, and on 27 May 1935, the New Deal’s ‘Black Monday’, a unanimous Supreme Court declared the NRA unconstitutional, on two grounds. The lesser was that the industrial code that was being challenged regulated the trade in kosher fowls in the New York area (it was alleged that the Schechter Corporation had violated various provisions of the code eighteen times) and as such was an interference in intra-state trade: the commerce clause of the Constitution
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did not give Congress or the President the right so to interfere. The press and the radio seized on the fact that one of Schechter’s alleged offences was the sale of’an unfit chicken’ to a butcher: so posterity knows this landmark decision as ‘the sick chicken case’. The nickname is not altogether unfair, for certainly the NRA codes had become tinged with absurdity: before Roosevelt put a stop to it, diligent bureaucrats had come up with a Dog Food code and a Shoulder Pad code and a Burlesque Theatrical (strip-tease) code. This was added
prima facie
evidence of the sort of unconstitutional abuse and extension of power which the Court condemned; though it is only fair to add that its reliance on a restrictive interpretation of the commerce clause caused a storm of criticism at the time, which has not yet altogether abated.

However, the decisive argument in the opinion, which Chief Justice Hughes
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himself drafted and delivered, lay in its opening pages. The government had argued that the codes, and the NIRA generally, were justified by the need to fight the Depression. Hughes did not condescend to ask whether the fate of the national economy really depended on what happened to an unfit chicken. Instead he took the argument seriously. ‘Extraordinary conditions,’ he allowed, ‘may call for extraordinary remedies. But… Extraordinary conditions do not create or enlarge constitutional power.
The Constitution established a national government with powers deemed to be adequate, as they have proved to be both in war and peace; but these powers of the national government are limited by the constitutional grants.’ And he had no difficulty in showing, indeed his style suggests that he took considerable intellectual pleasure in showing, that the grants of power made by Congress to the President in the codes provision of the NIRA were far beyond the limits imposed by the Constitution, amounting to ‘an unconstitutional delegation of legislative power’ – for they enabled the President to make what laws he liked for the regulation of any economic activity whatever. His case was unanswerable.

‘Black Monday’ was seen as a mortal blow to the New Deal. It proved to be nothing of the sort. Most of the useful parts of the NIRA, Title I (Title II, which set up the PWA, was unaffected), were soon re-enacted, with greater care for the letter of the law, and survived all challenge, and Roosevelt was soon producing fresh bursts of valid legislation. The role and power of Washington in the national life continued to grow. But the Supreme Court had sharply reminded Roosevelt of his own self-proclaimed mission, to show that the resources of democracy were not exhausted and that the American Constitution was equal to the demands made of it. That mission could hardly be achieved by violating the Constitution. Roosevelt learned his lesson, and we may be thankful for it. The whole episode shows, not only how far he was from being a revolutionary, but how solid were the constraints on his actions. ‘Extraordinary conditions do not create or enlarge constitutional power’: so long as Americans were determined to stick to that maxim and to the values it implies, no President – not even one so popular as Roosevelt, in a crisis so deep as the Depression – could govern alone; and as for becoming a dictator (the constant complaint of FDR’s enemies), it was impossible.

Section 7(a) was rescued by the Wagner Act, named after its chief architect, Senator Robert Wagner of New York, which was signed by the President on 5 July 1935. The National Labor Relations Act (its official title) strengthened and extended the rights gained by the unions under the NIRA and gave John Lewis his second wind. His leadership of the miners in the twenties had not been very successful: following a great strike in 1922, in which some twenty strike-breakers were killed but nothing else was achieved, he had had to watch his influence decline and the membership of his union slump while the industry decayed under the triple weight of over-production, over-manning and under-investment. The Depression made everything far worse: by 1933 membership of the UMW was down to 150,000, and Lewis feared that communist organizations might succeed in their challenge to his leadership. But 7(a) gave him his chance. The word went out (not only to the miners) that ‘President Roosevelt wants you to join the union’ (which was going rather beyond the facts, for in this as in other matters Roosevelt started from a more conservative position than was always recognized) and soon Lewis had a revived membership of 500,000,
thanks largely to his vigorous recruiting. He then embarked on a serious attempt to get the AFL to abandon its traditions and organize industrial unions. The Wagner Act gave him invaluable help. Three months after it was passed the AFL held its annual conference at Atlantic City. Opposed to Lewis were the heirs of Gompers, the leaders of the old craft unions. With him were such figures as David Dubinsky of the International Ladies Garment Workers Union
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and Sidney Hillman of the Amalgamated Clothing Workers. There was a frightful row; at one stage Lewis got involved in a fight with another union leader, and three weeks later he and his friends founded the Committee for Industrial Organization (after 1938, the Congress of Industrial Organizations) which set up as a rival of the AFL. The CIO successfully unionized the automobile and steel industries, and greatly expanded union membership elsewhere. Stimulated by this competition, the AFL recovered its former vigour and expanded likewise. By 1938 there were some nine million union members in the national workforce. There had been fewer than three million in 1933. These unionists became some of the most dependable supporters of Roosevelt, the New Deal and the Democratic party.

The NRA was a premature experiment in a fully planned economy conducted with inadequate tools. Its failure epitomized the collapse of the New Deal’s attempt to co-operate with business. The history of the Triple A epitomizes its happier relations with another special interest group, the farmers of America. The reason for this comparative success was simple: since the palmy days of the slave power the American political system had repeatedly demonstrated its ability to accommodate interest groups; this indeed was one of the things it did best, and at root the farmers’ problems had grown so intolerable because of the unusual refusal of politicians in the business-dominated twenties to take them seriously. When the Depression converted the Democratic party to the principle of federal aid to the unlucky, and the New Deal took office, the farmers got back their ‘clout’ at Washington and the usual logrolling politics of the US Congress did the rest.
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It is important not to lose sight of essentials. These were the tragic years of American agriculture. The long slow slide downhill of the twenties had ended devastatingly in the Depression, like a disease suddenly entering its terminal phase. The high tariffs of the twenties and the effectiveness of
foreign competition had cut the farmers off from their traditional foreign markets: customers who could not sell to the United States could not buy from it. The Depression destroyed the domestic market. Purchasing power in the cities collapsed, and the effects worked back through the chain of textile factories, meat-processors and vegetable-canners to the primary producers. Farm income fell by two-thirds between 1929 and 1932.
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Even worse, whereas the price of all farm products dropped by more than 50 per cent, the price of the products the farmer had to buy, for living and working (clothes and footwear, for instance), went down only by a third. Among the grim implications of these figures was the collapse of the rural credit system: dozens of small country banks broke, and with them fell both their debtors and their creditors. The remaining banks, desperate to survive, foreclosed their mortgages on farms as soon as payments ceased. Farmers stopped buying anything from the great mail-order houses and dropped their insurance policies. Their ruin thus increased the difficulties of urban capitalists. It was clear that farm prices would be driven even lower if agricultural output continued as high as ever, but no individual farmer dared risk a further loss of income by curtailing his planting and reaping: all voluntary schemes for reducing production failed. So the crisis spread and deepened; nowhere was the Depression more of a calamity than in rural America.