Traitor to His Class: The Privileged Life and Radical Presidency of Franklin Delano Roosevelt (100 page)

The acuteness of the emergency created a consensus in the administration that strong measures had to be taken. Even Morgenthau, calling the rate of decline “something terrible,” advocated an increase in relief spending. “If $250 million will stop this downward spiral, it’s cheap,” he said. Roosevelt agreed. He called the money-committee chairmen from Congress to the White House and requested the quarter billion.

Yet the deeper issue remained. What was the meaning of the New Deal? Was it a stopgap program to get the private sector back on its feet and then fade away? Or was it a permanent reorientation of the political economy, with government guiding business forever?

Roosevelt refused to decide definitively. But as the economy continued to languish, he let the radical New Dealers speak their minds as if on the administration’s behalf. Robert Jackson, a janizary who headed the Justice Department’s antitrust division, declared that the downturn had been caused by a “strike” of the capitalists against the people. “Certain groups of big business have now seized upon a recession in our prosperity to liquidate the New Deal and to throw off all governmental interference with their incorporated initiative and their aristocratic anarchy,” Jackson said. The monopolists were cynically disingenuous in blaming the government for the slump. “The only just criticism that can be made of the economic operations of the New Deal is that it set out a breakfast for the canary and let the cat steal it.”

Harold Ickes was older than the janizaries, but he yielded nothing to them in his disdain for big capital. America’s economic troubles, Ickes proclaimed, were the fault of “the sixty families who have brought the rest of the business men of the United States under the terror of their domination.” Their malign efforts were nothing new. “It is the old struggle between the power of money and the power of the democratic instinct.” But the stakes were higher than ever. “Big business fascism” was closer than most Americans realized. “We say that Germany isn’t Germany any more. Italy isn’t Italy any more…. Should we be getting ready to say ‘America isn’t America any more’?”

Roosevelt kept quiet, still pondering his options. “As I see it,” Morgenthau remarked at a lunch in March 1938, “what you are doing now is just treading water.”

“Absolutely,” Roosevelt replied.

But when the stock market dove again a week later, with no improvement in the broader economy, Roosevelt decided to take on big capital himself. He ordered Jackson at Justice to prepare antitrust suits against the most obvious monopolists. “Get plenty strong,” the president said. “We’re going into training for the heavyweight championship.”

And he finally decided between the retrenchers and the expansionists. Several of the latter followed the president to Warm Springs, where he was taking his spring vacation. Morgenthau considered such blatant advocacy beneath him, and he soon regretted his hauteur. “They just stampeded him,” the Treasury secretary moaned. “He was completely stampeded. They stampeded him like cattle.” Morgenthau underestimated the president’s intellectual autonomy, but he accurately assessed the result of the lobbying.

Roosevelt unveiled his decision in a Fireside Chat in April. He said that after much deliberation he had determined that the public interest required the federal government to make “definite additions to the purchasing power of the nation.” These would take the form, primarily, of increases to public works: $1 billion for permanent improvements to buildings and the like in the states, counties, and cities; $300 million for slum clearance; $100 million for highways; $37 million for flood control and reclamation; $25 million for improvements to federal buildings.

This spending was intended to promote prosperity, but it had a larger goal: the survival of democracy. “Democracy has disappeared in several other great nations,” Roosevelt said, “not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion and government weakness.” Forced to choose between voting and eating, desperate people chose the latter. Americans had a justified faith in their own democratic institutions, but the health of these institutions required a collective effort to secure the material needs of the ordinary citizens of the country. “The very soundness of our democratic institutions depends on the determination of our government to give employment to idle men.” For the first time—but not for the last—Roosevelt described the New Deal as a bulwark of American defense.

The people of America are in agreement in defending their liberties at any cost, and the first line of that defense lies in the protection of economic security. Your government, seeking to protect democracy, must prove that government is stronger than the forces of business depression.

T
HE LINK BETWEEN
prosperity and democracy—between economic security at home and the security of American institutions and values in a world of troubles—came naturally in the spring of 1938. The war in China had escalated till it touched Americans. In December 1937 an American gunboat, the
Panay,
patrolling the Yangtze River in accord with treaties between the United States and China, suffered attack by Japanese warplanes near Nanking. The presence of the
Panay
and its purpose in being there were no surprise to the Japanese, who had been informed by the vessel’s commander of its location and its mission of evacuating American nationals from the zone of the fighting. But for reasons that escaped the commander and his men, more than a dozen Japanese planes bombed and strafed the craft, killing three Americans, wounding eleven others, and sending the vessel to the river bottom.

Roosevelt responded at once with indignation. “Please tell the Japanese Ambassador,” he directed Cordell Hull:

1. That the President is deeply shocked and concerned by the news of indiscriminate bombing of American and other non-Chinese vessels on the Yangtze, and that he requests that the Emperor be so advised.

2. That all the facts are being assembled and will shortly be presented to the Japanese Government.

3. That in the meantime it is hoped the Japanese Government will be considering definitely for presentation to this Government:

a. Full expressions of regret and proffer of full compensation.

b. Methods guaranteeing against a repetition of any similar attack in the future.

Roosevelt’s insistence that the Japanese emperor be advised of the American president’s shock and concern was more than diplomatic protocol. During this period, American officials never quite knew where decisions in Tokyo were being made. The emperor, of course, was the head of the Japanese state, but whether he was the head of the Japanese government was unclear. Roosevelt feared that if the militarists behind the war in China had their way with Japan’s foreign policy, the United States would have no choice but to confront them with force. His hope, consequently, for averting conflict was that the militarists would
not
have their way. If the emperor learned how seriously the United States took the attack on the
Panay,
perhaps he would rein in the generals.

Roosevelt never discovered whether the emperor got his message. Japanese officials informed the State Department that the attack had been an unhappy mistake. “This was the lamest of lame excuses,” Hull later remarked, and it grew lamer as additional evidence arrived showing that Japanese patrol boats had machine-gunned survivors fleeing the sinking
Panay.
The secretary of state was convinced that the attack was a warning to the United States not to get involved in Japan’s fight with China.

Roosevelt agreed, although the question remained as to
who
was giving the warning. The Japanese government conveyed its “profound apology” and agreed to Roosevelt’s other conditions, including reparations and assurances against similar incidents in the future. Whether this would bind the “wild, runaway, half-insane men,” as Hull described the leaders of the Japanese army on the Yangtze, was another matter.

Roosevelt had to prepare for the possibility that it wouldn’t. He didn’t want to take military action against Japan, in part because the U.S. navy currently lacked the ability to project American power against Japan in China and in part because he knew he had almost no support in Congress for such action. The isolationist bloc remained solid; its leaders decried as “jingoism” any suggestion of a stern response to the gunboat sinking. “If Japan has accepted responsibility and apologizes, there is not much more that the United States can do,” Democrat Elbert Thomas of Utah told the Senate. “You can’t go to war with a nation which admits it was wrong.” Thomas’s Republican colleague from Nevada, Pat McCarran, asserted, “We should have been out of China long ago.”

Consequently Roosevelt explored other means of influencing Japan’s conduct. He asked Morgenthau to ascertain the executive’s legal authority to seize Japanese assets in the United States. If the president lacked legal authority, the Treasury secretary was to determine whether the assets could be seized extralegally and whether the Japanese could do anything about it. “After all,” Roosevelt told the cabinet, “if Italy and Japan have evolved a technique of fighting without declaring war, why can’t we develop a similar one?”

M
ORGENTHAU’S EFFORTS
bore fruit that would be harvested only later. With Tokyo giving every indication of making good on its promise to prevent future attacks, Roosevelt lost what leverage he might have had to budge the isolationists.

In any event, he wasn’t ready to start a fight in Congress, for he had a fight on his hands already. The conservative opposition to Roosevelt’s domestic program intensified during the spring and summer of 1938. His allies in Congress had sponsored a measure designed to put a floor under wages and a ceiling over hours, but the bill bogged down in conference when corporate executives claimed it would ruin their businesses, besides violating their freedom of contract. Southern conservatives—Democrats to a man—backed business on this one, asserting that the administration’s bill would deny their region its competitive advantage and trample their cherished states’ rights. With great effort Roosevelt’s allies managed to get a bill passed, one that mandated a forty-cent minimum wage and a forty-hour standard week, but it included so many exemptions and loopholes as to cast the whole enterprise into question. Amid the deliberations, liberal Democrat Martin Dies of Texas proposed an amendment in meaningful jest: “Within ninety days after the appointment of the Administrator, she shall report to Congress whether anyone is subject to this bill.” The amendment failed but the question remained. The bill’s one worthy accomplishment was banning child labor in interstate commerce. After signing the measure, Roosevelt put down the pen and declared, “That’s that,” referring to child labor but also to his near-term hopes for broader workplace reform.

The president met similar resistance on taxes. Business-sympathetic Democrats joined Republicans in blaming high taxes for the recession and sought to reduce them, especially those that targeted capital gains and undistributed profits. Roosevelt opposed the reduction, still deeming business, not business taxes, responsible for the slump. But he couldn’t keep his legislative forces in line, and the lawmakers approved a tax bill with the provisions he disliked. He refused to sign the bill, saying it undermined the principle of progressivity in taxation by taxing small profits and large profits at the same rate. “That, my friends, is not right,” he declared. Yet because the Treasury needed a tax measure, he let the bill become law without his signature. He promised to revisit the tax issue when the new Congress convened after the 1938 elections.