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No. 87 "What of 1936?" Address by James P. Warburg before the Chicago Association of Commerce, January 15, 1936. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_87 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 87 "What of 1936?" Address by James P. Warburg before the Chicago Association of Commerce, January 15, 1936. American Liberty League. American Liberty League. Washington, D.C. 1936. 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. Pamphlets Available â˜… Copies of the following pamphlets and other League literature may be obtained upon application to the League's national headquarters: Statement of Principles and Purposes American Liberty League Its Platform The Bonus Inflation The Thirty Hour Week Bill The Holding Company Bill Price Control The Labor Relations Bill The Farmers' Home Bill The TVA Amendments The Revised AAA Amendments The President's Tax Program Expanding Bureaucracy Lawmaking by Executive Order New Deal Laws in Federal Courts Potato Control Consumers and the AAA Dangerous Experimentation Economic Planning Mistaken But Not New Work Relief The AAA and Our Form of Government Alternatives to the American Form of Government A Program for Congress The 1937 Budget The National Labor Relations Act Summary of Conclusions from report of the National Lawyers Committee Straws Which Tell The American Bar The Trustee of American Institutions Speech by Albert C. Ritchie Legislation By Coercion or Constitution Speech by Jouett Shouse The Test of Citizenship Speech by Dean Carl W. Ackerman "Breathing Spells" Speech by Jouett Shouse The Duty of the Lawyer in the Present Crisis Speech by James M. Beck The Constitution and the Supreme Court Speech by Borden Burr The Economic Necessity in the Southern States for a Return to the Constitution Speech by Forney Johnston The National Lawyers Committee of the American Liberty League Speech by Ethan A. H. Shepley Our Growing National Debt and Inflation Speech by Dr. E. W. Kemmerer Inflation is Bad Business Speech by Dr. Neil Carothers The Real Significance of the Constitutional Issue Speech by R. E. Desvernine Arousing Class Prejudices Speech by Jouett Shouse The Fallacies and Dangers of the Townsend Plan SpeecA by Dr. W. E. Spahr â˜… AMERICAN LIBERTY LEAGUE NATIONAL PRESS BUILDING WASHINGTON, D. C. What of 1936? â˜… â˜… â˜… Address by JAMES P. WARBURG before Chicago Association of Commerce Chicago, Illinois January 15, 1936 AMERICAN LIBERTY LEAGUE National Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. Document No. 87 What of 1936? â˜… Ordinarily, in order to do justice to a subject which lies more than ninety per cent in the future, one would have to be a clairvoyant, or an astrologer, or at the very least a New Deal statistician; I can lay claim to none of these or any other powers of mysticism or prognostication. But, under today's circumstances, it requires no prophetic gift to see that the year upon which we have just embarked will be one of great and lasting significance. Nineteen Hundred Thirty-Six will be more than the ordinary Presidential year. It wiU be a year of far-reaching decision for this country. And, more than that, i am convinced that the decision which the American people will make at the polls next autumn will have an important bearing not only upon our own history, but upon the history of many other countries. In fact, it may well be that our election in November will mark the turning of the tide that has been running throughout the world away from democracy towards dictatorship. W^E ARE the world's outstanding example of a constitutional democracy. Upon our success or failure may well depend the future of the democratic principle of government throughout western civilization. And our success or failure as a constitutional democracy may easily hinge upon the outcome of the elections which we shall hold this autumn. Let us pause for a moment to consider what this means. The pure democracy is a state in which the citizens govern themselves by voting on all major questions, thus determining the policies of the state. Obviously the rule of the democratic majority in this direct form is possible only in a small, compact community such as existed in Athens over two thousand years ago, or such as exists in Andorra today. Where the democratic principle was broadened to apply to states of greater area and population, it became necessary to evolve a representative form of democracy, in which the citizens might delegate their authority to a small group chosen by themselves from among their own number. Since most people who have adopted a democratic form of government have done so after bitter experience with tyranny, it is only natural that they should have been vigilantly anxious to protect their newly-won right of self-government against any possible encroachment by those to whom they delegated their authority. IN ORDER to accomplish this purpose, and in order to make sure that their government should remain a government of laws as opposed to a government of arbitrary will people have adopted various means of preventing too great an accumulation of power in the hands of a few: 1. They have usually evolved a fundamental law, or constitution, in which the powers delegated to the representatives of the people have been carefully defined and limited; 2. They have provided for a limited term of office; 3. They have divided the powers to be delegated between various branches of government in our case between the legislative, executive, and judicial; that is to say, they have delegated to one group the power to make laws, to another the power to administer them, and to a third the function of seeing that the laws enacted and their administration conform to the fundamental law, or constitution; 4. They have in many cases, as in the case of our Senate and House of Representatives, divided the law-making power between two bodies. And finally; 5. As states grew larger and larger, they have subdivided their territory into local units of self-government, and again divided the powers delegated between the local groups of representatives and the central group. The disadvantages of such a complicated system are obvious: 1. It is cumbersome and slow-moving; 2. Because of the tendency to separate power from responsibility, and because of the division of power and responsibility, there often arises a confusion of purpose, a lack of consistency, and a tendency to excessive compromise; 3. Through the desire of those in power to remain in power, and through the apathy and indolence of the electorate in general, there exists the danger of corruption, the danger of political machinery usurping the place of the freely expressed voice of the people, and ultimately the danger of the government either ceasing to be self-government or falling into contempt because of its weakness. these are the obvious shortcomings and dangers of democracy. Off-hand they seem like a pretty formidable indictment. And so they are but, The advantage of such a system of divided authority, of mutual checks and balances, is that it makes it difficult if not impossible for those in power to usurp the sovereign right of the people to govern themselves. We have recently had a clear example of this in the Supreme Court decisions invalidating the N.R.A. and the A.A.A. With all its faults we know of no other system beside the democratic system which can guarantee self-government and freedom to a people, so long as that people wishes to enjoy them. But no system not even democracy can guarantee self-government to a people too indolent, too ignorant, or too indifferent to cherish, and, if necessary, to fight for its own freedom. All too few of us realize that nothing but our right to vote keeps us free citizens who govern themselves that nothing but our right to vote 4 prevents us from being vassal subjects of an arbitrary authority. And even fewer realize that this right, to be effective, must be vigilantly and intelligently exercised. The Supreme Court alone cannot preserve our freedom for us. Nor can the Constitution. The Supreme Court and the Constitution exist by our will, and will continue to exist as bulwarks of our freedom only so long as we continue to fight for their preservation. SOME day, when history comes to be written, I believe it will be recognized that there was a single major factor underlying all the political, social, and economic convulsions which began in the early years of this century, and which have now, I hope, passed their crisis. This factor as I see it was the struggle of the democratic principle to keep abreast of rapidly changing conditions the struggle to maintain law and order while the western world was changing almost overnight from a rural, largely agricultural world into a much more densely populated, highly mechanized and industrialized civilization. In terms of economics the world was moving rapidly towards internationalism. The developments of science and industry, the elimination of time and distance, the increasing interdependence of nations upon each other aU these factors tended toward a world state. In terms of political government these factors were hostile factors. They tended to deny the importance of individual sovereignties, to break down national barriers, to eliminate differences of languages, of currencies, weights and measures in short, they threatened nationalism, and with it they threatened the jobs of those in power in all the various nations. It was only human that those in power should seek by every means at their command to strengthen national barriers, to fight the march of economic progress by pursuing the ideal of 5 national self-sufficiency, and so eventually to seek their own nation's advantage at the expense of others by the use of armed force. Thus Europe became embroiled in a war, and thus we came to join in this war in order, as we were told, "to make the world safe for democracy." As it turns out it was this very war which came perilously close to bringing about the end of the democratic principle. If THERE is one thing that emerges clearly from the ghastly experience of 1914-1918 it is that democracy cannot stand war. A nation fighting for its life places itself under too great a handicap if it attempts during a war to govern itself on the democratic principle. And so, no matter how greatly a people may cherish its freedom and its right of self-government, it will submit itself cheerfully to rigorous and arbitrary authority in order to protect its national safety against aggression. This, however, is only true so long as a people believes in the Tightness of its national cause. We submitted cheerfully to rigorous and arbitrary authority in 1917-1918. We did this because we recognized that our normal democratic form of government was by its very nature too slow and cumbersome to cope with the swiftly arising exigencies of modern warfare. But, when the war was over, we resumed or intended to resume our normal method of self-government. The same thing was true in France and England. In other countries, notably in Russia, Germany, and Austria-Hungary, the war produced a dissatisfaction with the previous forms of government so intense that revolutions took place and constitutional democracies, most of them rather similar to ours, were set up. It LOOKED for a time as if the war had actually served to protect and even propagate the democratic principle. But the backlash of war brought economic disturbances. People began to lose confidence in their ability so to govern themselves as to give reasonable security to their country as a whole, or to individuals within their country. Cries went up for "a strong leader." And, as always happens, there were men waiting to seize the reins of government getting authority for themselves by promising security to all. Stalin Hitler Starhemberg Horthy Mussolini Pilsudski! Russia, Germany, Austria, Hungary, Italy, Poland aU dictatorships! First one man, then another and another, came into supreme control of the people's affairs, with a result that throughout the world we now see a tendency to concentrate arbitrary power in the government and to concentrate government in one man. Why? Because of many interwoven causes, most of them having their origin in the World War. But primarily because of one cause: The intensification of the desire for national self-sufficiency. Most wars arise over an economic bone, such as a market for surplus products, or a coveted source of an essential raw material. For fear of war and the consequent cutting off of essential supplies nations seek to become self-contained. Self-containment means the elimination of imports. The imports of one nation are the exports of other nations. Thus, for fear of war, the nations of the world are doing the very thing that provokes war. But, beyond that, self-sufficiency can only be attained, or approximated, under a government of arbitrary authority. It involves a strict Government control over imports and exports. This in turn involves a control over production and consumption, which cannot but lead to precisely the sort of complete regimentation that we see today in Italy or Germany. I do not believe that any people will long remain contented under the rule of a Hitler or a Mussolini. And, when the people over whom a dictator rules become discontented, history shows that the dictator almost invariably goes to war. We have only to read the paper to see that in this respect history is repeating itself today. And so we see the full extent of the tragedy. Democracy jettisoned in a feverish quest of national security. Security sought by means of national self-containment. And national self-containment provoking the economic conflict and the social unrest which lead to war. Of all the major belligerent countries only France, Great Britain, and the United States succeeded in maintaining their constitutional democracies. And, since March of 1933, the case of the United States has become extremely doubtful. I HAVE been outspoken in my criticism of the present Administration; and it is certainly not my purpose here to retract one word of what I have said. But If this Administration has brought us to the brink of relinquishing our right of self-government and becoming vassal subjects of an arbitrary Federal authority If this Administration has interfered with the economic life of our country to an unwarranted degree If this Administration has played havoc with our currency, dishonored our national promises, and spent the people's money heedlessly and wastefully in pursuit of a strange mixture of Utopian dreams and cynically practical partisan purposes If all these things are true, they are true partly because Mr. Roosevelt repudiated his pre-election promises, but even more because we have failed to exercise diligently that funda- mental right to govern ourselves which is the essence of America. We, just like the weary and distressed peoples of Europe, threw up our hands and clamored for a leader. We, just like the weary and distressed peoples of Europe, began to think of Government as something separate from ourselves as hav-| ing power to do what we ourselves were unable j to do. And we, just like the people in other countries, began to think of the Government's pocketbook as something quite separate from our own pocketbook. If Franklin D. Roosevelt were truly great he would not have encouraged and taken advantage of these manifestations of weakness and distress. He would have told the people that the Government had no power other than the people's own power. He would have told them that the Government had no money other than the people's own money as he certainly realized when a candidate for office. Instead of pointing out again and again these two fundamental truths, as, I repeat, a truly great man would have done, Franklin D. Roosevelt chose to cater to the demand for miracles born of misery, and to lead this nation upon the heels of Russia, Germany, Austria, and Italy, away from the democratic principle and towards dictatorship. ) It seems clear that in spite of his extraor- â– dinary agility Mr. Roosevelt cannot now pose j and be re-elected as the champion of the democratic principle. Astute politician that he is, he must know that, were he to change his course again, he would lose the support of those upon whose ignorance and gullibility he has been preying with unfulfillable promises, without gaining the support of those who have learned how to evaluate his promises and his avowed convictions in the light of past performance. In the election next November it is clear that Mr. Roosevelt must stand for a continuance of the world-wide trend away from democracy towards dictatorship. If he is re-elected it seems inevitable that the trend wiU continue further just how far no one can tell. If he is defeated not merely by his own ineptitude (as is quite likely) but by an aroused and militant opposition that is willing to fight honestly and in the open for a return to democratic principles then it is quite possible that the tide will turn throughout the entire world. For, if we succeed in re-establishing the democratic principle, and if other nations see us prosperous and happy because we have succeeded, the days of Stalin, Hitler and of Mussolini may well be numbered. That is why I have said that the decision we shall reach this year may weU affect the history of western civilization. There are other issues involved in our election, such as that of Federal spending, of taxation, and the rising cost of living. There are questions of re-employment and of finding an honest solution to the farm problem. There is the whole vast subject of currency and banking reform, which the present Administration seems to think it has disposed of, but which, in reality it has not even recognized in its true aspects. All these and many others are vital issues, but, without in any way minimizing their importance, they seem to me to be secondary to the main issue; and that is: What sort of federal government do we want? Speaking for myself, I should like us to have a government that will not confuse its functions with those of the Deity. I should like us to have a government of laws, and not of arbitrary authority. I should like us to have a government whose sole function in the field of economics is to provide an environment in which the greatest possible number of goods may be produced at the 10 lowest possible prices. This means a government which, by enacting and enforcing appropriate laws within the framework of our Constitution, will seek to prevent monopoly as well as unfair competition throughout the various phases of our economic life. It means a government which will not enter into business itself, nor attempt to substitute its own discretionary authority for natural economic laws. And finally, I should like us to have a federal government which interferes as little as possible with matters that are properly the concern of State and local governments, for reasons which no one has stated more cogently than Franklin D. Roosevelt himself at a time when, being merely the Governor of New York and not the President of the United States, his point of view was strikingly different. does this mean anything more than going back to what we had before the New Deal began? Most emphatically it does. If the Republican party of 1936 has nothing more to offer than a return to where we left off in 1932, then the American people will indeed be confronted with an abominable choice. Let us see whether, in the few remaining moments before my time is up, we can sketch in bare outline what we should like the Republican party to offer as an alternative. Obviously I cannot attempt to draw a party platform. Nor would it be appropriate for me to try to do so. For those, however, who like to think in terms of such documents, I might suggest that the Republican party could do far worse than to adopt the Democratic platform of 1932 so stoutly affirmed and so gaily disregarded by Mr. Roosevelt adding merely a caption of its own, reading: "Only we mean it!" I REALIZE of course that this is heresy from the point of view of party politics, but there is 11 more than a mere jest in the suggestion. So far as the issues mentioned in the platform were concerned, I believe that an overwhelming majority of the American people still want what they wanted in 1932 still want what Mr. Roosevelt promised them and failed to deliver. But there is this all-important difference: In 1932 the majority of the American people wanted something more than could be expressed in any platform: they wanted to be led by the hand out of the wilderness; they wanted medicine and miracles. Well, they have had both. And I don't think they want them any more. I think the American people have just about begun to realize that, if they are better off than they were in 1932, it is more in spite of than because of the miracles and medicines, and that in fact they would be further along the road to recovery than they are now if the government had not been quite so much of a little Miss Fixit. I say this although I know that the President told us only recently in his speech at Charleston that we were not having a natural cyclical recovery, but that such recovery as we have had has come about "because we planned it that way." If the Supreme Court decision on the N.R.A. was part of the New Deal plan, then so, I suppose, was the drought in 1934. B UT, to come back to our story, I should like to see the Republican party first of all declare its belief in the kind of government which I described a moment ago. And, since the first element in that definition was "a government which will not confuse its functions with those of the Deity," I should next like to see the Republican party produce a candidate whose primary attributes would be: integrity, courage, reasonable inteUigence, steadfastness of purpose and principle, some knowledge and experience of practical affairs and most important of all an abiding conviction 12 that the President of the United States is the servant of the people, and not their ruler. Third: I should like to see the Republican party commit itself to these two things: The recognition that, within the framework of our Constitution, there is much need for reform and modernization of many of our laws, but That reform should never be the product of hasty and ill-considered legislation driven through a rubber-stamp Congress by an impatient executive; rather that it should come about as the result of careful study by competent non-partisan authorities, both as to the ultimate objective and as to the method of attaining this objective without creating undue disturbance. A typical example of a case where these principles would apply is in the matter of currency and credit. We have at present neither a currency nor a banking system worthy of the name. I cannot even list here the multitude of problems unsolved, all of them which form a part of this picture. It is easy enough to condemn the Roosevelt monetary bungling; that much I have done myself; but no man today is capable of sitting down and formulating the complete currency and banking reform which this country must have, if we are to get over having our recurrent children's diseases in this field. The facts are there, and the men are available who could competently study them. This is a task, not of weeks and months, but of years. Fourth : I should like to see the Republican party say something more than that it believes in sound fiscal policies and a reduced cost of government. I should like to see it take a definite pledge that it will in no year spend one cent of money not raised in that year by taxation. I should like to see it commit itself to the gradual orderly retirement of the huge outstanding government debt, and to the principle that hereafter there shall be no government borrowing except on short term in anticipation of 13 revenues unless for purposes of national defense against armed aggression. This suggestion may be drastic; but it would go far towards taking public spending out of politics once and for all. Fifth: I should like to see the Republican party pledge itself to remove as fast as possible as much as possible of the gigantic alphabetical partisan bureaucracy which has been built up in Washington; and, as to those agencies which it retains, I should like to see it pledge itself to bring them under a competent, permanent and non-partisan Civil Service. FinaUy, Sixth: It would be refreshing beyond measure if the Republican party could find it in its heart to admit the existence of certain problems such as the farm problem without feeling compeUed to promise an immediate solution, if it has no immediate solution to offer. The American farmer has had his fill of plausible but unfulfillable promises. The farm problem has always been and remains the tariff problem. Reducing the tariff is difficult and dangerous particularly if done hastily. Subsidizing agriculture is costly, uneconomic, and establishes a bad principle in order to offset another bad principle. Eventually by gradual stages we shall come to reducing the tariff, and so will all the other nations. Until then I know of no complete answer to the farm problem. If the Republicans do, so much the better. But, if they have no real answer, there are millions of farmers who will respect them more for saying so than for attempting to outbid Mr. Roosevelt and his "gentle rain of checks." There are millions of farmers who disagree with Mr. Roosevelt in his belief that it would be a catastrophe if they once more became "lords on their own farms, free to grow whatever and how much of it they pleased." IT all comes back to the same thing. The medicine-men in Washington have been teaching us to look to them for a solution of all our problems. Through using what Mr. Roosevelt calls "the organized power of the nation" meaning the arbitrary power of the Executive and his bureaucracy we are told that we shaU reach "the more abundant life." I, for one, think we shall reach it through our own efforts or not at all. And our own efforts must be directed not only to the performance of our individual tasks, but to the inteUigent and vigilant exercise of our duties as free citizens of a free republic. 14