You have found an item located in the Kentuckiana Digital Library.
No. 49 "Two Amazing Years" Speech of Nicholas Roosevelt Of the Editorial Staff of the New York Herald Tribune, July 8, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_49 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 49 "Two Amazing Years" Speech of Nicholas Roosevelt Of the Editorial Staff of the New York Herald Tribune, July 8, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. In THESE two amazing years nothing, I think, has been more amazing than this that thoughtful men, Democrats as well as Republicans, are seriously alarmed at the reforms introduced, many of them in the name of recovery, and that, like myself, they honestly believe that an almost unseen revolution has been attempted. Thank God it is not yet completed and will not be so long as meetings like this can be held without fear of punishment. Let us by all means discuss proposed remedies for our troubles. Let us improve our political machine wherever possible. Let us amend the Constitution if, after full discussion, this proves desirable and the amendment promises genuine benefits to the country as a whole. But let us refuse to accept meekly the undermining of the structure of the American democratic system by those who follow the false gods of planned economy. I do not question the sincerity of their desire to make over the form of our government so that it may the easier control our economic activities. But I question their wisdom and I challenge their right to attempt these reforms subtly and even covertly. Let the people know frankly whither the New Deal is tending and none of us need doubt what the people will do. I always remember a chance remark of the late Theodore Roosevelt to a group of us youngsters during the Bull Moose campaign. Something came up about the soundness of popular judgment and T. R. remarked that one of the things that had struck him most forcibly in his political career was how inevitably the American people, once they had all the facts in a case before them, decided it rightly. It was only when they had only part of the facts before them, or when under emotional stress they were forced into some hasty decision, that they decided wrongly. I, for one, have no hesitation in accepting the verdict of the American people about these issues provided all the facts are laid before them. It is the duty and the privilege of such a meeting as this to help marshall the facts for the people. 16 â˜… â˜… Two Amazing Years â˜… â˜… â˜… Speech of NICHOLAS ROOSEVELT Of the Editorial Staff of the New York Herald Tribune in Round Table Discussion of "The Constitution and the New Deal" Institute of Public Affairs University of Virginia July 8, 1935 AMERICAN LIBERTY LEAGUE National Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… Document No. 49 Two Amazing Years â˜… ThE thrill that ran through the country on the fourth of March, 1933, when the vibrant, vigorous voice of Franklin Delano Roosevelt sounded a new note of confidence in the harried confusion of the depression was undoubtedly one of the most important psychological events of our times. The nation felt that it had at last a leader, and that Mr. Roosevelt would not falter in the arduous task of bringing order out of chaos. The people's faith in him seemed justified by his deeds. In quick succession he struck blow after blow, reviving business activities and restoring hope. He took charge of the banking situation and reopened those banks that had been closed. He bespoke balancing the budget and forced reductions in the pay of government employees and pensioners. He provided relief for farm mortgages, and shortly thereafter for urban mortgages. He helped the railroads. He obtained from Congress $3,500,000,000 for public works to stimulate heavy industries and put men back to work. He created the Federal Relief Administration to look after the millions of unemployed. All of this was within the famous first hundred days. It was a triumph of national leadership. Gladly the people saw the President clothed with dictatorial powers. He would ease them of their burdens. He would lead them to the promised land of profits and contentment. His measures must not be questioned. He must be spared criticism. With eased minds people turned again to their own affairs. They knew that the President was pledged to a reduction in expenditures, a balanced budget, sound currency and the cessation of government interference in business. In his campaign speeches he had vigorously attacked Mr. Hoover's deficit. "I regard reduction in Federal spending as the most important issue in this campaign," were his very words. He opposed taxes on food and clothing. He con- demned the activities of the Farm Board. His platform rejected "the unsound policy of restricting agricultural production to the demands of domestic markets." He advocated "strict and impartial enforcement of the anti-trust laws." Here were policies which Republicans as well as Democrats understood and supported. The country at last was "on its way." Recovery was around the corner. ONLY a few professed doubts. They were troubled to see him from the beginning ignore all the important leaders of his party. With such men as Owen D. Young, Newton D. Baker, Al Smith, Carter Glass, Albert Ritchie, John W. Davis and Harry Byrd to call upon for help he turned instead to Jim Farley, whose sense of the practical was untroubled by idealism, and to a group of "brain trusters" whose idealism was unchecked by practical experience and whose judgment was too often colored by their objectives. It was unofficially explained that as the old doctors had failed to cure the patient we must have new doctors. Incidentally, it is interesting at this point to pause for a moment to note how the human mind, when faced by economic crises, tends to react in the same manner. I have here an extract from a book by a famous historian. Let me read it to you: "In speeches, newspapers and pamphlets about this time, we begin to find it declared that, after all, a depreciated currency is a blessing; that gold and silver form an unsatisfactory standard for measuring values; that it is a good thing to have a currency that will not go out of the country and which separates (this country) from other nations: that thus shall manufacturers be encouraged; that commerce with other nations may be a curse, and hindrance thereto may be a blessing; that the laws of political economy, however applicable in other times, are not applicable to this particular period, and however operative in other nations, are not now so in (this country); that the ordinary rules of political economy are perhaps suited to the minions of despotism but not to the free and enlightened inhabitants of (this country)." It has, you must admit, a very familiar sound! But it describes conditions in France just before the great revolution. It was written by Andrew D. White, of Cornell, a half century ago. Interestingly enough the new doctors or perhaps I should say the New Deal doctors brought forward as "new" almost all of these tried and discarded panaceas. It was those which affected the currency, however, that most alarmed thoughtful persons in the country. You all remember that in the campaign Mr. Roosevelt bitterly criticised Mr. Hoover for even so much as hinting that the United States might have to go off gold. He took special pains to reject the Republican charges that the Democrats would tamper with the dollar and called attention to the Democratic platform pledge which reads: "We advocate a sound currency to be preserved at all hazards." He even went so far as to taunt Mr. Hoover with having visions of a "rubber dollar" thereby showing that Mr. Hoover saw more clearly than did Mr. Roosevelt. Doubts persisted in the public mind as to Mr. Roosevelt's intentions about gold even after he was elected, but these were allayed by the categorical and emphatic declaration of the new Secretary of the Treasury on March 6, 1933, that "We are still on the gold standard." Six weeks later, however, without notice and some of us still claim, without need Mr. Roosevelt took the country off gold. In June he repudiated the gold clause in the bonds of the Government of the United States a crushing blow to the credit structure of the country. Not content with this, he soon decided to test out the "Warren theory," which holds that internal prices will rise as the gold content of the dollar is lowered. The rubber dollar which Mr. Hoover dreaded had come into existence, and no one knew how much it would shrink. Throughout the summer of 1933, the dollar was depressed but prices refused to obey the Professor. Finally, one afternoon, that gentleman 4 walked inconspicuously out of a side door of the White House and returned to his specialty of teaching hens how to lay more eggs. The Warren gold theory was pointedly forgotten. In January, 1934, the dollar was definitely revalued at the equivalent of 59.05 cents of its pre-Roose-velt gold value. But currency tinkering was not abandoned. A powerful group of New York speculators backed the "silver senators" in bringing pressure to bear on the President to "do something for silver." That was early in 1933. "Something" is still being "done" and the owners of silver shares are singing, "Happy days are here again." In recent months, however, the currency inflationists have made little headway with the President. Some of them are banking on credit inflation. Concurrently with the devaluation experiment the President adopted another theory "spending our way to recovery" a doctrine sponsored by the English economist John May-nard Keynes but rejected by the British people and government. Mr. Roosevelt, pledged to reduce expenditures and balance the budget, began spending money on a scale only exceeded during the war years. His deficit for his first two years was more than $7,000,000,000. The debt, which was $21,000,000,000 when he came into office, is now $28,000,000,000. In addition the government has contingent liabilities of upwards of $8,000,000,000. Money has been handed out to almost anyone who would take it. Two hundred millions were paid to the farmers for the crops they did not raise. Billions were paid in doles. Other billions were loaned to farmers, urban home owners, corporations and railroads. The spending is still in progress, but we are still on our way to recovery. Even before the end of the first hundred days in which so much was done to restore faith in America there were signs that important social reforms were in preparation. The list of them is now large. Let me remind you of the leading ones: First in order (March, 1933), was the A.A.A. program for subsidizing the farmers. 5 Shortly afterwards the President announced his policy of raising commodity prices. In May of 1933, the Federal Relief Administration was created to look after the unemployed, the T.V.A. was launched as a step in socializing the utilities, and the Securities control bill was passed. In June came the N.R.A. that was to reform as well as restore business. During the whole summer of 1933, the emphasis was on the N.R.A. as the chief bulwark of the New Deal. General Johnson announced that four million men would be given jobs before winter. The N.R.A. was to regulate working hours, abolish child labor, fix prices and prevent unfair competition. Instead of the "strict and impartial enforcement of the antitrust laws" pledged in the Democratic platform, the N.R.A. provided for the virtual suspension of those laws. With an emotional fervor only surpassed in war, people were dragooned into doing homage to the blue eagle. As THE winter of 1933-34 approached, the President found new vents for his energies. The stock exchanges were slated for reform in February. In March the A.A.A.'s powers to collect processing taxes were extended to cover almost every major crop down to and including peanuts this despite the President's categorical statement on July 30 previously that he was opposed to taxes on food and clothing. In April the Bankhead bill was signed reducing the acreage of cotton and providing fine or imprisonment for those who disobeyed the A.A.A.'s orders. In June he signed the Railroad pension biU obliging the railroads to pension retired employees; the Federal Housing Bill for financing home improvements; and the Farm Bankruptcy Bill (better known as the Frazier-Lemke Act). In July the Federal Power Commission was created. In that same month Secretary of Agriculture Wallace, returning from the West, contributed the startling information or rather I should say, opinion that the farmers wanted more not less regulation. During this summer the drought wrought t havoc and a half billion dollars was voted for drought relief. In addition, the versatile brain trusters devised a scheme for preventing future droughts by planting a shelter belt of trees one hundred miles wide from Canada to Mexico. When foresters pointed out that trees could only be made to grow in much of this area by nursing them like garden plants and when climatologists insisted that droughts were cyclical, they were derided as mere obstructionists. In October the slum clearance projects were announced and a National Economic Council was created with Donald Richberg at its head to coordinate recovery. November was a comparatively quiet month, but in December the President announced that the N.R.A., inaugurated as an emergency measure, would be made permanent and Secretary Wallace announced more crop curtailments. In the meantime the cotton farmers who had been receiving money under the Bankhead bill voted in referendum for its extension. Early in 1935, the social securities legislation was introduced, and the Wagner Labor Bill. The death sentence on the public utilities was planned, the Federal Reserve System was threatened with absorption by the government, and the President was granted $4,880,000,000 for relief. At first he demanded that this sum be without any strings, but later general classifications of expenditure were voted. The country was promised that 3,500,000 men would be put back to work. As the present session of Congress drew near its close, a number of new measures were added to a list of "must" legislation. These included: Amendments to the A.A.A. extending its powers of regulating farming and industry; amendments to the T.V.A. so as to enable that body to do legally what the courts declared it cannot do; the bus and truck regulation bill; the Guffey coal stabilization bill; the utilities holding bill (in its modified form); and finally the share-the-wealth tax program, so suddenly sprung on the nation shortly after the President's specific statement that he would present no further tax measures. In connection with this project I 7 merely note that in its submission Mr. Roosevelt implied distinctly that it was not for immediate consideration. Shortly thereafter, however, Senator Harrison, emerging from a White House conference, announced that this bill must be passed before the end of the week. The country, regardless of party, at once expressed its resentment against trying to rush through such a far-reaching reform without study, discussion or public hearings. Two days later the President disavowed Senator Harrison. The circumstance is so recent and the sequence of events so eloquent that I refrain from comment. It MAKES one rather breathless even thus hurriedly to sum up all that was done in these two amazing years. As a matter of fact this was not all. There were, besides, a number of far-reaching political reforms. Of these the most widely heralded was the N.R.A., which, although introduced as an emergency measure to speed recovery, rapidly developed into a bureaucracy exercising legislative and judicial as well as executive functions. The American Bar Association estimated last summer that 10,-000 pages of regulations, most of which had the binding effect of law and many of which involved penalties, had been drawn up by these young bureaucrats. Never before had the Executive enjoyed the law-making power on such a scale. The young bureaucrats used it to make business come to heel. Business men found it impossible to discover what they might or might not do. In numerous instances they were punished for acts which they never suspected were unlawful. In July, by the device of the blanket code, the Administration virtually fixed the hours of labor throughout the country. Under the N.R.A. in a number of lines prices were fixed. By an order of October 7, 1934, nonunion coal miners were placed on the same footing as the union men with respect to collective bargaining. Thus were exercised more new powers by the Central government, with far-reaching implications. Under the A.A.A. even more radical political departures were inaugurated. Not only did the Federal government undertake to tell farmers what and how much they might grow, but by the system of a flexible processing tax the executive branch exercised the right to fix tax rates heretofore jealously reserved to Congress. In the spring of '34 the President was given extensive rate making powers in the tariff also a function previously reserved exclusively to Congress. At a later date, as already mentioned, the Administration through the banking bill sought control of the credit system of the country. By controlling finance it could direct the economie life of the country. Not content with this, the Administration early in its career completely reversed the pledge in the Democratic platform to take the government out of business, and, by the creation of the T.V.A. and later through some of the homestead projects, put the government into direct competition with private industries. TIME does not permit an appraisal of the usefulness of all these measures. Long needed social reforms have been inaugurated. As a matter of fact, with many of the social objectives of the New Deal most of us are in sympathy, though we differ as to how they may be reached. There is no doubt that conditions in the country are better now than when Mr. Roosevelt came into office, despite the fact that there are today as many unemployed as in the autumn of 1933, and that the business indices show little improvement since July, 1933. Incidentally many sound observers insist that the N.R.A. retarded recovery. Whether or not it did, there is no question that recovery in America has been slower than in countries untroubled by so many social and economic experiments. Figures published last winter by the League of Nations show that, in point of recovery of industrial output, the United States ranked at that time sixteenth out of eighteen leading nations. We have today, furthermore, four million more people on relief than we had in the autumn of '33. And who can deny that the relief system devised by the present administration has brought upon this country the gravest sort of problems affecting not only government, finance and business but also the very morale of the American people? As for the measures to help the farmers some, undoubtedly, have been of distinct value to the country at large as well as to the farmers. I refer, primarily, to the steps taken to ease the farm mortgage situation. It is, of course, clear that the benefits paid to the farmers have increased retail business, but it is not so clear that the principle of the payments benefits the country as a whole. Why should one group be subsidized by the nation? As for the philosophy of the curtailment of production and its extension to embrace economic nationalism, I confess that I side with the skeptics. We know already that this policy has led to the importation of foreign grains and to the reduction of the sales of American agricultural products abroad. The export of American cotton, for example, during the period ending March 31 last was 42 per cent less in volume than during the corresponding period last year. This is almost entirely due to the artificially high price maintained by the government on American cotton. As to the principle of regimentation involved in the A.A.A. program, I, for one, oppose it whole-heartedly. I believe it to be contrary to the spirit of America and fraught with grave dangers to our political and economic structure. In fact, through nearly all the New Deal legislation there runs a new philosophy new, I should say, in American public life, but very old in Europe. It is the political philosophy of centralization. It rests on the assumption that it is not only the right but the duty of the Central Government to exercise powers over the whole industrial, financial and agricultural life of the country. In modern language this is called a planned economy. In more honest days it was called autocracy. To most of you this is not news, and to some it is not true. I am one of those who felt that 10 Mark Sullivan's monotonous insistence that democracy was being threatened by a new form of collectivism, was exaggerated. Even when he received the support of the more picturesque Frank Kent I was not convinced. The texts and cases dug up by David Lawrence, however, began to make me see the light, and what has happened since the fateful decision of the Supreme Court in the N.R.A. case has left no more doubt in my mind. The issue is plain the American system of checks and balances versus the European system of a strongly centralized, all-powerful executive. It is not only the issue of the Federal government against the States, but of the President against Congress and the Supreme Court. Are we to substitute autocracy for democracy? LiEST you think I am an alarmist, let me list for you briefly the various activities of the Federal government under the New Deal until the country began to call a halt: Controlling farm production. Controlling the manufacture of articles made out of farm products. Fixing prices. Manufacture, sale, and transportation of electric power. Coordination of transportation. Regulation of communications. Underwriting mortgages. Loaning of billions to individuals and corporations. Construction of public works. Building towns. The Federal government has, besides this, deliberately clubbed a number of key industries by threats (against the bankers), attempts at destruction (the utilities), and actual confiscation (the airmail contracts). In addition the Executive branch of the government, as already described, has exercised the powers to make laws (through the N.R.A. decrees) and to alter taxes (tariffs and the processing tax). It has drawn up and forced the passage (often largely unread) of important pieces of legislation. It has used, to a degree heretofore unknown, all the political weapons in the hands of the Presidency to extract obedience from Congress. Finally, when the Supreme Court declared part of one of the most useful of the newly expanded executive machines (the N.R.A.) unconstitutional, the President made it plain that he favored a modification of the Constitution so as to permit him to wield his new powers unchecked by the courts. He even went so far as to imply that he would welcome a campaign based on a fight (by him) against states' rights. When this proposition met with widespread criticism he hastily beat a retreat. We have come a long way since March 4, 1933 a long way on a course which was never even hinted at during the campaign. To be strictly accurate, I should say that we have followed a course which Mr. Roosevelt as candidate denounced and rejected. Not only was he pledged to reduce expenditures, as I have already explained, and to maintain the currency unimpaired, but he was opposed to the extension of the Federal bureaucracy and, in particular, denounced Mr. Hoover for trying (I quote his words) "to center control of everything in Washington as rapidly as possible." His own course consisted in spending or budgeting during these first years as vast a sum as was spent by the Federal government during its entire existence from the administration of Washington down to and including that of Taft. The budget is badly unbalanced. The dollar has been devalued and currency tinkering is not yet definitely over. The Federal bureaucracy has been increased by 100,000 men and its powers stretched to regulate countless activities heretofore reserved to the private individual without fear of government interference. But, most important of all in the long run, he has permitted or encouraged the Executive branch of the Federal government to usurp powers previously reserved to the Congress and to the States, and he has laid the groundwork for a centralized control of the economic, financial, and political structure of the nation. Thanks to these measures and to the control of the four 12 billions of relief funds, no President of the United States has ever wielded such vast powers. I KNOW that many people honestly believe that these new trends in government are to the best interests of the country. Of these, in my opinion, one of the clearest-minded and most disinterested is Professor Charles A. Beard. His study of the New Deal called "The Future Comes" sets forth clearly the demand for substituting a governmentally controlled national planned economy for our old system. Of the N.R.A. he writes that it: "recognizes the existence of these historical movements toward group solidarity, operates to accelerate the process, and by government encouragement, protection, supervision, and control, seeks to weld them all into a vast unified structure designed to bring about their self-regulation for an equitable balance of their several interests to the end that greater efficiency, the elimination of abuses, and higher standards, will be achieved primarily in the service and for the good of the whole American people." Of the farm control program he states that: "the Government has so penetrated the institutions and procedures of the industry, from the highest national groupings to the smallest local units throughout the land, as to gather into its hands absolute control over every act of production, processing, manufacturing, and marketing of practically all agricultural and associated commodities. Within the framework of the land bank system, it has established a network of banks and credit institutions adequate to meet almost every conceivable need for agricultural finance and credit. If developed and not upset, this alone may t come to mean the end of the private financ- ing of agricultural operations and the abolition of speculation purely for profit in agri- |_ cultural products. The program affirms the determination of the Administration to organize agriculture from the soil to the market, which is a first essential step toward gearing agricultural productivity to effective consumptive capacity within the nation." 13 What does all this mean in plain English? That what these gentlemen seek and what the present Administration has been trying to establish is a form of twentieth century paternalism. Why mince words longer? A planned economy implies changing the American system of government. It means substituting an economic dictatorship for a political democracy. I, for one, regard this as a threat to the very foundations of our civilization. But I welcome a discussion of these changes at a meeting such as this. I welcome it because the issue clearly admits of divergent opinions and because it is imperative that these opinions be fully aired. I welcome it because discussion in the open is the American way. So long as the changes were being effected by subtle indirection the nation was in grave danger. "Let there be no change by usurpation," George Washington warned, "for, though this in one instance may be the instrument of good, it is the customary weapon by which free governments are destroyed." May I, in closing, suggest to you a few basic principles in guiding your discussion? The first is that you bear in mind the unwieldiness of size in administration which, in these days of airplanes and radio, means size of population. I also suggest consideration of the size of the tasks involved in planning for an entire nation with its diverse climates, occupations and traditions. In the second place, I beg you to reconsider the respective advantages of regimentation and individualism, of paternalism and self-government. Is the ideal of economic security more compelling than that of personal liberty? Finally I urge a full discussion of our system of checks and balances with its three independ- 1 ent branches of government and with the forty-eight States within the framework of the Federal Constitution. Mr. Roosevelt himself, shortly before his election, described that document as "the most marvelously elastic compilation of the rules of government ever written." President Washington, who, as you know, was one of the 14 framers of the Constitution, in discussing the government which it established, warned especially (I quote from his Farewell Address) that it is important: "for those intrusted with its administration to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another. The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create, whatever the form of government, a real despotism. A just estimate of that love of power and proneness to abuse it which predominates in the human heart is sufficient to satisfy us of the truth of this position. The necessity of reciprocal checks in the exercise of political power, by dividing and distributing it into different depositories, and constituting each the guardian of the public weal against invasions by the others, has been evinced by experiments ancient and modern, some of them in our country and under our own eyes. To preserve them must be as necessary as to institute them." Compare, I beg of you, this system of checks and balances with those governments now in power in Europe where, in one or other form, under one or other label, autocracy has been substituted for popular government. I admit the defects in our present system, but I suggest that they be examined not in the light of an ideal state which, according to philosophers, is a benevolent autocracy, but in the light of what it is specifically proposed to give us in its place. I, for one, after seeing at close range how dictatorships work in Europe, admit to an evergrowing admiration for the American system of government. If this means being a Tory, then I plead guilty to that charge. But in so doing I must observe that the kind of autocracy needed to put into effect a planned economy is close kin to what Plato called a "tyranny." In time we who stubbornly defend the American system will be shown to be the true liberals, and those who, in the name of economic planning are demanding "radical reforms," will appear as the real reactionaries. 15