Roosevelt Myth - John T. Flynn

The New New Deal

In the beginning, of course, was Roosevelt. And then came the Brain Trust. After that we had the Great Man and the Brain Trust. The casual reader may suppose this is just a catchy collection of syllables. But it is impossible to estimate the power these few words exercised upon the minds of the American people. After all, a crowd of big business boobies, a lot of butter-fingered politicians, two big halls full of shallow and stupid congressmen and senators had made a mess of America. That was the bill of goods sold to the American people. Now amidst the ruins appeared not a mere politician, not a crowd of tradesmen and bankers and congressmen, but a Great Man attended by a Brain Trust to bring understanding first and then order out of chaos.

Actually there are no big men in the sense in which Big Men are sold to the people. There are men who are bigger than others and a few who are wiser and more courageous and farseeing than these. But it is possible with the necessary pageantry and stage tricks to sell a fairly bright fellow to a nation as an authentic BIG Man.

Actually this is developing into an art, if not a science. It takes a lot of radio, movie, newspaper and magazine work to do it, but it can be done.

As Roosevelt began to lay out his plans for nomination by the Democratic Convention in 1932, one of his most pliant and faithful henchmen, Sam Rosenman, suggested that he ought to draw upon the universities for his advice rather than upon business men and politicians. Rosenman suggested Raymond Moley, professor of political science at Columbia and Roosevelt thought it an excellent idea. Moley had already served him well while governor and had only recently advised him in the trial of Sheriff Farley, the Tammany chieftain whom Roosevelt removed from office. It was Moley who wrote Roosevelt's opinion in that case with its stirring declaration of a moral standard for public officials. That finely phrased statement of a high, yet perfectly feasible, ethical code caught the fancy of the public and shed upon Roosevelt its reflected glory.

Moley was asked to form a group of experts in various fields of policy. He invited Rexford Tugwell, Lindsay Rogers, Joseph D. McGoldrick, James W. Angell, Adolf Berle and some others. All were Columbia faculty men save Berle. After Roosevelt's nomination some of these had faded away and others were added—General Hugh Johnson, Charles Taussig, who really added himself, and George Peek.

Because at first there were a number of professors in the group that fact was widely exploited. It was supposed to be something quite new, an idea Roosevelt had invented, going to the fountainheads of learning for advice. Of course there was nothing new in it. Every man who runs for President surrounds himself with men who are supposed to be experts in their various fields and often as not they have been professors.

Roosevelt did precisely what every candidate does. But newspapermen began to refer to this aggregation of Roosevelt research advisers as the "Brain Trust." The words had in them the clear implication that the group was made up of beings possessing Big Brains. There was in it the suggestion of ponderous cerebral horsepower. Here was a thinking machine into which Roosevelt could throw any problem and watch it pass mercilessly through the cogitative gears to emerge beautifully broken down into all its ultimate components. Here was the Great Brain itself surrounded by all these bulging foreheads handling easily the tough problems that had baffled the feeble intellects of bankers, magnates and politicos. Now in a new sense the real age of reason had come. It was the Age of the Professors.

The term began with an ingredient of sneer in it. Even Louis Howe, Roosevelt's perennial secretary and factotum, would speak to Roosevelt himself contemptuously of "that brain trust of yours." But beyond doubt the term exercised a powerful influence in convincing Americans that men of the highest intellectual caliber were now dealing with the mystery of the farm, of the depression, of labor, of the banks and of the world.

It was this group of men, subjected of course to those inevitable pressures that come from interested elements such as labor, farmers, business and regions, who put together what was called with great effect the New Deal.

Of course the central subject of it all was the great depression. Mr. Roosevelt's own explanation of that was simplicity itself. The depression was due to the Republicans and to Hoover. More specifically they had fostered economic isolation, they had encouraged monopolies, they had throttled competition, they had permitted the manipulation of credit for speculation in securities and commodities and for the swelling of profits at the expense of the common good.

To meet the country's ills, the New Deal made certain pledges, which described how Roosevelt would save the country.

It would relieve the needy—but no doles. The government would prepare a program of useful public works, such as flood control, soil and forest protection and necessary public buildings. But it would immediately put a million men to work in the forests. This alone would provide the necessary employment. Where public works were self-liquidating—that is where they would pay for themselves—they could be financed by bond issues. But where they were not they must be paid for by taxes. Beyond that, the New Deal would seek to shorten the work week and reduce hours of labor to spread employment.

For the farmer the New Deal would encourage cooperatives and enlarge government lending agencies. But the greatest enemy of the farmer was his habit of producing too much. His surplus ruined his prices. The New Deal would contrive means of controlling the surplus and ensuring a profitable price. But it denounced any proposals to have the federal government go into the market to purchase and speculate in farm products in a futile attempt to increase prices or reduce farm surpluses.

As for business the New Deal proposed strict enforcement of the anti-trust laws, full publicity about security offerings, regulation of holding companies which sell securities in interstate commerce, regulation of rates of utility companies operating across state lines and the regulation of the stock and commodity exchanges.

But greatest of all—the New Deal promised economy. The extravagance of the Hoover administration, its yearly deficits—these were at the bottom of all our ills. The New Deal would abolish useless bureaus, reduce salaries, cut federal expenditures 25 percent.

The New Deal would put an end to government borrowing—it would end the deficits. The New Deal would assure a sound currency at all hazards and finally a competitive tariff with a tariff commission free from presidential interference.

There was nothing revolutionary in all this. It was a platform that Woodrow Wilson might have endorsed. It was actually an old-time Democratic platform based upon fairly well-accepted principles of the traditional Democratic party. That party had always denounced the tendency to strong central government, the creation of new bureaus. It had always denounced deficit financing. Its central principle of action was a minimum of government in business. The government might intervene, as in the anti-trust laws, not to manage business or tell business what it should do, but to prevent business from engaging in practices which interfered with the free action of others. It made war upon those who attempted to impose restraints upon commerce. It was always for a competitive tariff, save for the products of the Southern states which needed protection. And it always proclaimed loudly its solicitude for labor and for the "common man." It always attacked Wall Street, the Stock Exchange, the big bankers.

Mr. Roosevelt in his pre-election speeches had stressed all these points—observing the rights of the states so far as to urge that relief, old-age pensions and unemployment insurance should be administered by them, that the federal government would merely aid the states with relief funds and serve as collection agent for social insurance. And above all he rang the changes upon the shocking spendings of the Republicans and the mounting public debt. He called Herbert Hoover "the greatest spender in history." He cried out against the Republican party: "It has piled bureau on bureau, commission on commission . . . at the expense of the taxpayer." He told the people: "For three long years I have been going up and down this country preaching that government—federal, state and local—costs too much. I shall not stop that preaching."

The statement is a curious one, since I can find among his published addresses while he was governor up until the time of his nomination, not one reference to government deficits. And for a good reason, of course, since as governor he took New York State from the hands of Al Smith with a surplus of $15,000,000 and left it with a deficit of $90,000,000. He was against Big Government. "We must eliminate the functions of government . . . we must merge, we must consolidate subdivisions of government and, like private citizens, give up luxuries which we can no longer afford."

He repeated this over and over: "I propose to you that government, big and little, be made solvent and that the example be set by the President of the United States and his cabinet." Toward the end of the campaign he cried: "Stop the deficits! Stop the deficits!" Then to impress his listeners with his inflexible purpose to deal with this prodigal monster, he said: "Before any man enters my cabinet he must give me a twofold pledge: Absolute loyalty to the Democratic platform and especially to its economy plank. And complete cooperation with me in looking to economy and reorganization in his department."

This was the New Deal as it was described to the people in the fall of 1932. Practically any Democrat could subscribe to it. The only slightly radical feature was his declaration about government development of water power. But he was merely following the lead of Al Smith and he assured the people that he believed in private ownership and development of water power with the exception of Muscle Shoals and perhaps three others merely to be yardsticks as a means of checking the rates of private companies.

This New Deal was a program for action strictly within the framework of the traditional American system of government, with emphasis on states' rights, opposition to too powerful central government, opposition to BIG government which should be cut down to its proper size, opposition to high taxes, unbalanced budgets, government debts. Where the name New Deal came from I do not know. Stuart Chase had written a book called "A New Deal" some time before in which he outlined a completely different program. Perhaps the name was swiped from this book. But in any case the Roosevelt New Deal was as I have described it. This was what the people voted for in 1932. Now Mr. Roosevelt, in March, 1933, was in the White House. And there he proceeded to set up what he continued to call the New Deal. How much did it resemble the one voted on in November, 1932?

In the first hundred days of his administration, Mr. Roosevelt put into effect a program of very large dimensions. But it was a program built on a wholly different principle from that which was described as the New Deal.

First of all, his central principle—his party's traditional principle of war upon BIG government—was reversed. And he set out to build a government that in size dwarfed the government of Hoover which he denounced.

The idea of a government that was geared to assist the economic System to function freely by policing and preventive interference in its freedom was abandoned for a government which upon an amazing scale undertook to organize every profession, every trade, every craft under its supervision and to deal directly with such details as the volume of production, the prices, the means and methods of distribution of every conceivable product. This was the NRA. It may be that this was a wise experiment but it was certainly the very reverse of the kind of government which Mr. Roosevelt proposed in his New Deal.

Enforcement of the anti-trust act was a long-time pet of his party and it was considered as an essential instrument to prevent cartels and trusts and combinations in restraint of trade which were supposed to be deadly to the system of free enterprise. The New Deal had called loudly for its strict enforcement. Yet almost at once it was suspended—actually put aside during the experiment—in order to cartelize every industry in America on the Italian corporative model.

That deadly thing, the deficit, which, as he had said was at the bottom of all our woes and which stemmed from big government and extravagant government, was not slain as Roosevelt had proposed. Instead it was adopted and fed and fattened until it grew to such proportions that Hoover began to look like a niggard. The theory that relief should be carried on by the states was abandoned. The idea of self-liquidating public works was abandoned and all forms of relief were carried on by public loans, adding to the national debt. The idea of useful public works was abandoned in favor of hurriedly devised "make-work" which was nothing more than a disguised dole.

The "spendthrift" Hoover had increased his expenditures by 50 percent in four years over the 1927 level. In four years Mr. Roosevelt increased his 300 percent over the 1927 level and to 100 per cent over Hoover's. Stop the deficits! Stop the deficits! he had cried. Instead of stopping them he ended his first term with a deficit of 15 billion dollars.

I am not here criticizing what Mr. Roosevelt did. I merely want to fix clearly the fact that what he did was the reverse of what he had described as a New Deal.

When the President had declared for a "sound currency at all hazards" he was using a phrase well-known to describe a currency based on gold. Yet one of his earliest acts was to go off the gold standard and to declare later for a managed currency based on the commodity dollar.

Had a candidate opposing Mr. Roosevelt in the campaign declared that he favored that series of policies and projects which Roosevelt launched when he came to power, there is not the slightest doubt that Roosevelt would have covered him with damnation and ridicule. Actually he did denounce Mr. Hoover who, Roosevelt charged, had asked the farmers to plow under every third row of wheat, cotton and corn and he did denounce and ridicule what he described as attempts by the government to go into the market and speculate in commodities in order to raise prices. Yet he not only asked farmers to plow under the crops but he paid them to do so and ended by compelling them to do so in effect, and his agents were in every market place to purchase crops in order to fix prices—not merely in the grain exchanges and cotton exchanges, but in every kind of exchange and market covering every conceivable crop from eggs and poultry to sweet potatoes, peanuts, apples and applesauce.

Why did the President completely reverse his policy after his inauguration? It must be because he felt the things he was urging before election were not adapted to the realities of the case when he came to power. When he was outlining his policies before election he was completely cocksure of his rectitude and wisdom. Yet all those policies and techniques of which he was so absolutely certain he brushed aside as unusable.

What became of his announced intention to demand from every cabinet member two pledges: (1) to abide absolutely by the Democratic platform and (2) to cooperate with him in cutting down the expenses of the departments? He began by cutting expenses 25 percent. But before the ink was dry on that act he had thrown it into the ashcan with a $3,300,000,000 deficit in the NRA act. And no cabinet member expanded the costs of his department more than the President himself expanded the costs of the Presidential budget.

When was Mr. Roosevelt right? When he was making speeches before the election or when he was acting after the election? We need not accuse him of dishonesty either time. We may say in tolerance that he laid down in perfect honesty a policy when he was a candidate and that when he found himself in Hoover's place he found his first New Deal unsuited to the needs of the time. But we cannot say that the thing called the New Deal in 1932 was the same as the thing which he called the New Deal from 1933 to 1936. He pronounced a definite judgment upon the New Deal he presented so gaudily before the election by completely repudiating it when he became President. It was one thing to challenge Hoover and to abuse him. Faced with the demands of power, he had to confess by his course that the policy he had outlined before the election was a mistake. I do not say it was a mistake. Which policy was nearest right is a question yet to be answered.

At the end of the One Hundred Days Mr. Roosevelt was embarked upon a new New Deal. There were happy young men in Washington bureaus who were calling it the Roosevelt Revolution, and soon we would hear that term in wide use. Others began to call it the Second New Deal. And that is precisely what it was—essentially and in detail, save for a few minor matters, a wholly different thing.

Now let us see what became of this Second New Deal of which Mr. Roosevelt was as completely cocksure as he was of the first New Deal which he had now discarded.