FDR: The Presidency During Crisis

Many years ago, Oliver Wendell Holmes, a remote acquaintance of Franklin Delano Roosevelt, observed of Roosevelt, “Second class intellect, but first class temperament!” (Cooper, 1996). Since then, this has become the touchstone of the FDR model of leadership. Both institutionally and interpersonally, FDRs presence was grandiose and inflationary. As a president leading during a period of historical national crisis, Roosevelt proved his competence.

During the campaign of 1932, the Depression was, for obvious reasons, the most pressing issue. Roosevelt campaigned throughout the country on this platform, outlining in relatively general terms a program for recovery and drastic reform that later came to be known as The New Deal. In a series of addresses carefully prepared by a team of professional speech writers, Roosevelt promised aid to farmers, public development of electric power, a balanced budget, and government policing of irresponsible economic power. At one point he declared, “Private economic power is…a public trust as well.” (Davis, 1973). His program especially appealed to Western progressives, and to millions who were nominally Republicans. A close friend, Daniel Eldridge referred to Roosevelt as being a “master of responding to public opinion” (Davis, 1973; P. 75).
Roosevelt took office on March 4, 1933. Following the election, President Hoover had sought Roosevelt’s cooperation in stemming the deepening economic crisis that culminated in the closing of banks in several states during February of 1993. Roosevelt however apparently either refused to accept responsibility without the accompanying power or to subscribe to Hoover’s proposals for reassuring business; somewhat surprisingly, Hoover himself even granted that his proposals would mean “the abandonment of ninety percent of the so-called new deal.” (Freidel, 1952).

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When Roosevelt took office, most of the country’s banks were already closed, industrial production was down to fifty-six percent of the 1929 level, 13,000,000 or more people were unemployed, and farmers were quite desperate. Even the congressional leaders were so shaken that, for the time being, they were ready to follow Roosevelt’s recommendations.

In his inaugural address Roosevelt promised prompt, decisive action and somehow managed to effectively convey to the nation some of his adamant self-confidence. “This great Nation will endure as it has endured, will revive and will prosper,” he asserted, “…the only thing we have to fear is fear itself.” (Freidel). For the moment, people of all political views were reportedly Roosevelt’s allies, and he acted swiftly to obtain enactment of the most sweeping peacetime legislative program in U.S. history.

Through a vast number of differing measures, Roosevelt first sought quick recovery and then reform of the malfunctions in the economic system that he thought had caused the collapse. He tried to aid each of the main interest groups in the U.S. economy and, at a time when the Democrats were the minority political party, to maintain the support of many who were previously Republicans. Roosevelt’s choice of Cabinet members indicated his efforts to maintain a consensus; it was geographically and politically diverse, containing both liberal and conservative Democrats, three Republicans, and, for the first time ever, a woman: Secretary of Labor Frances Perkins. Reportedly, Perkins described Roosevelt as being a “fair and honest gentlemen with which to work” (Thompson, 1987; pp. 73).

President Franklin Delano Roosevelt also directed his legislative program toward a broad constituency. The prelude was the enactment of several conservative measures, to inspire confidence among businessmen and bankers. Roosevelt first strategic move ended depositors’ runs on banks by closing all banks until Congress, meeting in a special session on March 9, could pass a cautious measure allowing those in a sound condition to re-open. In March of that same year, Roosevelt redeemed one of his most important campaign pledges by introducing a program of drastic government economy. The emergency banking and economy acts brought him the enthusiastic support of an overwhelming proportion of the electorate but, he pointed out at the time, could do little to bring real recovery.

Roosevelt was already preparing, and he soon sent to Congress, a series of messages and draft bills proposing the program that comprised the early New Deal. Roosevelt first obtained from Congress federal funds for the relief of human suffering. Congress established the Federal Emergency Relief Administration (FERA), which granted funds to state relief agencies for direct relief. It also established a Civilian Conservation Corps (CCC), which employed 500,000 young men in reforestation and flood-control work at its peak. Mortgage relief aided other millions of people, both farmers and homeowners. The key loan agency of the New Deal was the previously established Reconstruction Finance Corporation (RFC), the powers of which were broadened so that it would be able to make loans to small enterprises as well as to large ones. Although at the time, former associate William Donato reported that Roosevelt “did not envisage public spending as the primary role of these relief agencies,” the agencies poured so much money into the economy that within several years they were stimulating recovery. (Marks, 1988).

The two key recovery measures of the New Deal were acts to restore farm prosperity and to stimulate business enterprise. The first act, in 1993, established the Agricultural Adjustment Administration (AAA), the objective of which was to raise farm prices and increase the proportion of the national income going to farmers. The principle means was through subsidies given to growers of seven basic commodities in return for their willingness to reduce production. The subsidies were to be paid from a processing tax on the commodities. Roosevelt accepted this scheme as a temporarily acceptable means, which Congress would enact because a majority of farm organization leaders favored it.
He also hoped to raise farm prices through mild inflation. Roosevelt envisioned a program, following farm recovery, of extensive rural planning: moving farmers from sub-marginal to better lands and luring some of the unemployed from metropolises to rural and village life. In 1935, Roosevelt obtained the Resettlement Administration, which gave some aid to smaller, poorer farmers. When the Supreme Court invalidated the processing tax in 1936, he switched the AAA program to one of soil conservation. Nevertheless, throughout the New Deal, farm leaders and Congress succeeded in maintaining an agricultural program the major emphasis of which was to raise farm prices. Farm income did indeed improve gradually, but whether this outcome was a result of FDRs legislation or several years of intense drought is the subject of speculation. (Marks).

The demand of businessmen for government stabilization and of labor for a shorter work week, led Roosevelt to recommend to Congress the National Industrial Recovery Act (NIRA) of 1933. One aspect of this new program involved a $3,300,000,000 appropriation for public works. Had this money been poured into the economy rapidly, it would have probably done much to bring recovery, but Roosevelt wanted to be sure it would be spent soundly on self-liquidating public works, through the Public Works Administration (PWA). Roosevelt, while expansionary in rhetoric, proved cautious in practice, and the PWA did not become an important factor until late in the New Deal. On the other side of the NIRA was the National Recovery Administration (NRA) to administer codes of fair practice within given industries. At first under a “blanket code,” then under specific codes negotiated by representatives of each industry and labor, minimum wages, maximum hours and fair trade practices were established within each industry. These codes were designed to simultaneously stimulate production, raise prices and appease organized labor. Consumers received scant protection, but labor received guarantees on wages and hours and also the right to bargain collectively (even while many of the most important and effective bargaining techniques were thereafter illegal). During the summer of 1933, there was a quick flurry of recovery as manufacturers produced goods in anticipation of sale at higher prices under the codes; the boom collapsed by fall because prices had risen faster than purchasing power.

By February of 1934, the code-making flurry was essentially over. Up to this point 557 basic codes and 208 supplementary ones had come into existence, containing numerous provisions that were difficult to enforce. By 1935 the business community, which had demanded the NRA at the outset, was becoming upset with it and blamed Roosevelt for its ineffectiveness. In May of that same year, the Supreme Court in what became known as the Schechter Decision, invalidated the code system. Despite shortcomings, however, the NRA had aided several highly competitive industries, such as textiles, and brought important reforms that were re-enacted in other legislation: federal wages-and-hours regulation, collective-bargaining guarantees, and abolition of child labor in interstate commerce.

In the fall of 1933, Roosevelt had already turned to other expedients for helping the economy. He experimented with “managed currency,” driving down the gold content of the dollar and tripling the price of silver through large purchases. These efforts brought only small price increases at home, but they improved the position of the United States in foreign trade by making dollars cheaper abroad. This is perhaps one of the only areas where as White House staff member Richard Levy described it, “Roosevelt was heavily advised.” (Marks). In January 1934, Roosevelt stabilized the gold content of the dollar at approximately fifty-nine percent of its earlier value. Managed currency created a significant precedent, even though it did little to bring recovery at the time. (Marks).

Altogether, by the fall of 1934, Roosevelt’s program was bringing a limited degree of recovery, but it was alienating conservatives, including many businessmen. They contended that much of the program was unconstitutional, that it created uncertainties for business that actually hampered recovery, and that the lowering of gold content of the dollar had deprived holders of government obligations of their just return. At the same time, many were still unemployed and felt that the New Deal had not gone far enough. They were ready to listen to leaders who were offering more extensive reforms; socialism and communism were beginning to look more attractive to large numbers of people.

To meet the threat to his political coalition from the left, Roosevelt emphasized reform in his annual message to Congress in January of 1935. This was less of a shift from a first to a second New Deal than it was a rush to enact reform measures that Roosevelt had been planning for a long time. In 1933, he had obtained the Tennessee Valley Authority (TVA), to provide flood control, cheap hydroelectric power, and regional planning for an impoverished region. At his recommendation also, Congress had enacted two laws to protect investors: the Truth-in-Securities Act of 1933 and an act establishing the Regulatory Securities and Exchange Commission in 1934. (Luechentberg, 1963).

Additional legislation in 1935 did much to placate the growing malcontent of the poor, especially the Social Security Act, which included unemployment insurance and old-age insurance. For workers still unemployed, Congress created the Works Progress Administration (WPA), to provide relief that would stem the erosion of their skills and self-respect. For workers who were unemployed, the National Labor Relations Act (also known as the Wagner Act), strengthened the government guarantees of collective bargaining and created a National Labor Relations Board (NLRB) to adjudicate labor disputes. The Public Utility Holding Company Act, also in 1935, regulated the control holding companies had over operating public utility companies. A new tax measure in 1935, labeled by its opponents the “soak-the-rich” tax, raised levies on persons with large incomes and on big corporations and became, finally, the first initiative toward in redistributing income in the U. S. (Leuchentberg).

The previously detailed measures effectively undercut the left-wig opposition to Roosevelt, but evidently- they further alienated conservatives. He ran for re-election in 1936 with the support of farmers, laborers, and the underprivileged. The Republican nominee, Governor Alfred Mossman Landon, could to little to sway voters in his direction. Roosevelt received 27,752,000 popular votes to Landon’s 16,680,000 and carried every state except for Maine and Vermont. (Thompson, 1987).

Roosevelts prestige dropped significantly however during the summer of 1937, when much of the public blamed him for labor difficulties that grew out of organizing drives in the steel, automobile, and other mass-production industries. Operating under the new constraints imposed by the Wagner Act, the unions engaged in strikes that often resulted in violence. Roosevelt himself prepared paternalistic government aid to all workers, such as the wages-and-hours guarantees of the Fair Labor Standards Act of 1938. But union membership jumped to about 9,500,000 by 1941, while many middle-class people returned to the Republican Party. (Thompson).

A sharp economic recession during the fall of 1937 added to Roosevelt’s troubles. There had been substantial recovery by 1937; but Roosevelt, wishing to balance the budget, had curtailed government spending drastically, sending the economy plummeting back toward 1932 levels. Businessmen blamed the New deal spending policies; Roosevelt blamed the businessmen and inaugurated an anti-monopoly program as a form of pertinent combat. In October of 1937, massive government spending began again, and by June of 1938- the crisis was past.

From 1938 on, many of the conservative southern Democrats heading key congressional committees openly opposed the New Deal. In 1938, Roosevelt tried unsuccessfully to defeat several of them in the primaries and was accused of being a “dictator” trying to conduct a ‘purge.’ Democrats won the November elections, but the Republicans gained eighty seats in the House and seven in the Senate, thus permitting a coalition of Republicans and conservative Democrats that could hinder the President.

Nevertheless, the second Roosevelt administration saw the passage of some notable reform legislation and moving into some new fields. The development of soil conservation to stem erosion and the large-scale construction of public works, including public housing and slum clearance, also occurred during these years. Many New Deal innovations, such as social security, the agricultural program, the TVA, and the SEC, had now become accepted as permanent functions of the federal government. (Thompson).

By 1939, foreign policy was reportedly overshadowing domestic policy. Even before he had taken office, Roosevelt had endorsed Hoover’s refusal to recognize Japanese conquests in Manchuria. From the outset of his administration, Roosevelt was deeply involved in foreign policy questions, mostly related to the Depression. In the early summer of 1933, he refused to support international currency stabilization at the London Economic Conference, but by 1934 he had stabilized the dollar and had begun helping Great Britain and France to keep their currencies from being undermined by dictator nations. In November of 1933, Roosevelt recognized the government of the Soviet Union in the hope that he could promote trade. Greater opportunities seemed to exist in negotiating reciprocal trade agreements with numerous nations- a program that began in 1935- and in fostering more cordial relations with Latin American nations. In his first inaugural address Roosevelt had pledged himself to the “policy of the good neighbor.” Secretary of State Cordell Hull had interpreted this to mean no unilateral U.S. intervention in Latin America; but, gradually, as European war became imminent, the Good Neighbor Policy led to collective-security and mutual-defense agreements. (Thompson).

In the early New Deal years, President Franklin Delano Roosevelt not only pursued programs of economic nationalism but, like most Americans, was also intent upon keeping the United States out of any impending war. Therefore, he supported a series of neutrality laws, beginning with the Neutrality Act of August 1935. Roosevelt moved towards a new policy in 1937, after Japan began a major thrust into northern China. In October, while speaking in Chicago, Roosevelt proposed that peace-loving nations make concerted efforts to quarantine aggressors. He seemed to mean nothing more drastic than the breaking off of diplomatic relations, but the proposal created such national alarm that during ensuing months, he was reportedly slow to develop a collective-security position. He quickly accepted Japanese apologies when the U.S. gunboat “Panay” was sunk on the Yangtze River in December of 1937. Relations between the United States and Japan gradually worsened, but the rapid domination of Europe by Adolf Hitler was much more threatening. (Leuchtenberg).

When World War II began in September of 1939, Roosevelt called Congress into special session to revise the Neutrality Act to permit belligerents to buy arms on a “cash-and-carry” basis. With Hitler’s aggressions and the fall of France in the spring and early summer of 1940, Roosevelt and congress turned to defense preparations and “all aid short of war” to Great Britain. Roosevelt even gave Great Britain fifty over-age destroyers in exchange for eight Western Hemisphere bases. Isolationists, fearing that the United States would become involved in the war, debated intensely with those who felt that the national self-interest demanded aid to Britain.

In the 1940 presidential campaign, the Republicans nominated Wendell L. Willkie, who agreed with Roosevelt’s foreign policy. Both candidates pledged to keep the nation out of foreign war, but isolationists tended to support Willkie, while those favoring strong measures against Hitler swung toward Roosevelt. By a closer margin than before, 27,244,000 to 22,305,000 popular votes and 449 electoral votes to 82, Roosevelt was elected to an unprecedented third term. (Thompson).

Through 1941, the nation moved gradually closer towards actual belligerency with Germany. After a bitter debate in Congress, Roosevelt in March of 1941 obtained the Lend-Lease Act, enabling the United States to finance aid to Great Britain and its allies. Preventing submarines form sinking goods en route to Europe gradually involved more drastic protection by the United States Navy; in the fall Roosevelt authorized the Navy to “shoot on sight” at German submarines. Meanwhile, in August, on a battleship off Newfoundland, Roosevelt met with Prime Minister Winston Churchill of Great Britain and signed a joint press release proclaiming an Atlantic Charter to provide national self-determination, greater economic opportunities, freedom from fear and want, freedom of the seas, and disarmament. (Lash, 1976).

Yet it was in the Pacific that war came to the United States. Japan, bound in a treaty of alliance with Germany and Italy, the so-called Axis, extended its empire to East Asia. Roosevelt, viewing these moves as part of Axis world aggression, began to deny Japan supplies essential to its war-making needs. Throughout 1941, the United States negotiated with Japan, but proposals by each side were unsatisfactory. Roosevelt did not want war with Japan in the fall of 1941, but it soon became obvious that the Japanese were not bluffing. By the end of November, he knew that Japanese fleet units and transports were at sea and that war was imminent; an attack in Southeast Asia and perhaps on the Philippines seemed likely. Then, on December 7, 1941, the Japanese struck Pearl Harbor, Hawaii. On December 8th, at Roosevelt’s request, Congress voted a war resolution within four hours; on December 11th, Germany and Italy declared war on the United States. Most of America strongly supported FDR’s decision but some politicians who knew him were suspicious of his choice. For example, Dewey has been quoted saying that FDR “knew what was happening before Pearl Harbor and instead of being reelected he ought to be impeached” (Briggs, 1992).

Roosevelt made concessions to the conservatives on Congress in order to obtain support in prosecuting the war. Several New Deal agencies were abolished. At a press conference, Roosevelt asserted that “Dr. win the war” had replaced “Dr. New Deal” but that this was to be only for the duration of the war. Roosevelt had fought resourcefully although not always successfully against inflationary pressures.

One of the immediate problems after Pearl Harbor was to quickly build up massive productions for war. Roosevelt had begun experimenting in 1939 with various defense agencies to mobilize the economy. Eventually, a workable organization had evolved. At the time of Pearl Harbor, United states war production was already nearly as great as that of Germany and Japan combined; by 1944 it was double the total of all Axis nations.

During the war, Roosevelt concentrated upon problems of strategy, negotiations with the nation’s allies, and the planning of peace. From the outset, he took the lead in establishing a grand alliance among all countries fighting the Axis. Roosevelt met with Churchill in a number of wartime conferences at which differences were reportedly settled amicably. Debate at the earlier conferences centered upon the question of a landing in France, which the British succeeded in postponing repeatedly; the great Normandy Invasion was finally launched in June of 1944. Meanwhile, the United States had followed the British lead in invading North Africa in 1942, Sicily in July of 1943, and Italy in September of 1943. At one of the most significant meetings, at Casablanca, Morocco, in January of 1943, Roosevelt, after previous consultation with Churchill, proclaimed the doctrine of unconditional surrender of the Axis. He seemed to want to avoid the sort of differences of opinion among the Allies and misunderstanding by the Germans that had made trouble at the time of the 1918 Armistice. (Marks).

Relations with the Soviet Union posed a difficult problem for Roosevelt. Throughout the war, the Soviet Union accepted large quantities of lend-lease supplies but seldom divulged its military plans or acted in coordination with its Western Allies. Roosevelt, feeling that the maintenance of peace after the war depended upon friendly relations with the Soviet Union, hoped to win Joseph Stalin’s confidence.
Meanwhile, the Axis had been suffering serious defeats in both Europe and the Pacific. By February of 1945, when the Big Three met again at Yalta in the Crimea, the war seemed almost over in Europe. As for Japan, the United States expected a ‘last-ditch’ defense that might require another eighteen months or more of fighting. Work in developing an atomic bomb was well advanced, but its power was expected to be only a fraction of what it actually turned out to be. Consequently, Roosevelt and his military advisers were eager to obtain Soviet aid in Asia; and in return for Stalin’s promise to enter the war against Japan, Roosevelt and Churchill offered concessions in the Far East. As for Eastern Europe, earlier decisions were ratified, and plans were made for the establishment of democratic governments. Had the arrangements for Eastern Europe been followed by Stalin in the manner expected by Roosevelt and Churchill, there would have been little room for criticism. But the understandings were not precise, and they received different interpretations from the Soviet Union. By mid-March, Soviet accusations against the United States led Roosevelt to send a reportedly sharp telegram to Stalin. (Lash).
Roosevelt hoped that the establishment of an effective international organization, the United Nations, could maintain the peace in years to come. He planned to attend a conference of fifty nations at San Francisco, opening on April 25th, 1945, to draft a United Nations charter. But since January of 1944, his health had been declining. His political opponents had tried to make much of this during the campaign of 1944, when he ran for a fourth term against Governor Thomas E. Dewey of New York. Roosevelt won by a very narrow margin. On April 12th, 1945, Franklin Delano Roosevelt died of a massive cerebral hemorrhage. (Thompson).

During Roosevelt’s years as president, he had relatively little time for any real personal life. As a public figure he was, at the same time, one of the most loved and hated men in United States history. Opponents ascribed to him their shallowness, incompetence, ‘trickiness’, and dictatorial ambitions. His supporters hailed him as the savior of his nation’s economy and the defender of democracy not only in the United States, but throughout the entire world. It was generally conceded that as a political leader, he was unexcelled in winning and holding popular support and in retaining, in his administration, leaders of diverse views. Many experts have expressed the opinion that despite occasional confusion and overlapping authority, his administration was unusually effective. He brought even more than this to the office: in 1932 he stated what remained his view through peace and war, “The Presidency…is pre-eminently a place of moral leadership.” (Marks).

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