FDR - Jean Edward Smith [250]
The “depression within a depression” precipitated a sharp split within the administration. Morgenthau, Farley, and Commerce secretary Dan Roper urged FDR to stay the course, balance the budget, and adopt a more conciliatory stance toward business. As Morgenthau put it, the time had come “to strip off the bandages, throw away the crutches” and let the economy see if “it could stand on its own feet.”26 Opposed were Hopkins, Ickes, Perkins, and Wallace, aided by Marriner Eccles of the Federal Reserve, who urged vigorous resumption of government spending. The downturn had occurred when federal expenditures had been reduced; it figured that a sharp increase in spending would reverse the momentum.
Just as in the struggle between the CIO and Little Steel, Roosevelt was caught in the middle. “It is clear that he is greatly disturbed … and doesn’t know which way to turn,” wrote Ickes after a cabinet meeting on November 6, 1937. “He is plainly worried.”27
Like Hoover in 1930, Roosevelt temporized. “Everything will work out all right if we just sit tight and keep quiet.”28 When Congress reconvened in January 1938, FDR did not mention the economic downturn. “As I see it,” said Morgenthau, “you are just treading water.”29
“Absolutely,” said Roosevelt, who was always flippant when confronted with economic issues he did not fully comprehend. As James MacGregor Burns expressed it, “Roosevelt’s deficiencies as an economist were as striking as his triumphs as a politician.”30
“The old Roosevelt magic has lost its kick,” chortled Hugh Johnson to the National Press Club. “The diverse elements in his Falstaffian army can no longer be kept together and led by a melodious whinny and a winning smile.”31
Meanwhile, the economy continued to deteriorate. On March 25, 1938, the stock market broke again, and virtually every economic index continued south. The price of farm products, which had held up well through 1937, joined the rout. Roosevelt was bailed out of his indecision by Harry Hopkins, who descended on the vacationing president at Warm Springs on April 2, armed with specific proposals for a massive spending program. Stung by continued press reference to the “Roosevelt recession,” FDR reluctantly jettisoned the balanced budget approach. “They have stampeded him,” Morgenthau lamented to aides at Treasury. “They have stampeded him just like cattle.”32
On April 14 Roosevelt asked Congress for a special appropriation of $3.4 billion to revive the flagging economy. Hopkins would receive a $1.4 billion infusion for the WPA; Ickes, whose PWA had been liquidated some months before, would receive $1 billion for public works; and additional sums were allocated for slum clearance and low-cost housing, farm subsidies, and a small naval construction program. By the end of 1938 the United States had regained half the lost ground. Employment rose by 2 million, factory payrolls by 26 percent, and steel production by 127 percent. The downturn had been induced by the cutback in government spending FDR had ordered, and the recovery was delayed by his procrastination. When Roosevelt sought to pack the Supreme Court, he shot himself in the foot. When he prematurely curtailed federal spending in 1937, he shot the country in the foot.
Into FDR’s sea of troubles Senator Robert Wagner introduced antilynching legislation that was certain to create havoc in what remained of the New Deal coalition in Congress. James Byrnes called it “a bill to destroy the Democratic party.”33 Richard Russell of Georgia said it was a piece of legislation designed “to lynch the last remaining evidence of States’ rights and sovereignty.”34 As southern senators rose in opposition, Roosevelt ran for cover.
The lynching of African Americans