Book reexamines Franklin Roosevelt’s role in the Great Depression

Michael Raffety

April 28, 2009

A new book by Amity Schlaes, a former editorial board member of the Wall Street Journal, provides a thoroughly researched new look at the Great Depression and Franklin Roosevelt’s role in it. As the book jacket neatly summarizes, “The real question about the Depression, she argues, is not whether Roosevelt ended it with World War II. It is why the Depression lasted so long. From 1929 to 1940, federal intervention helped to make the Depression great Ñ in part by forgetting the men and women who sought to help one another.”

In her introduction Schlaes noted some commonalties of Herbert Hoover and Franklin Roosevelt: “Both underestimated the strength of the American economy. Both doubted its ability to right itself in a storm. Hoover mistrusted the stock market. Roosevelt mistrusted more. … Both presidents overestimated the value of government planning. Hoover, the Quaker, favored the community over the individual. Roosevelt, the Episcopalian, found laissez-faire economics immoral and disturbingly un-Christian.

“And both men doctored the economy habitually. Hoover was a constitutionalist and took pains to intervene within the rules — but his interventions were substantial. Roosevelt cared little for constitutional niceties and believed they block progress. His remedies were on a greater scale and often inspired by socialist or fascist models abroad.”

I had finished this book by the time we got to Hyde Park for our tour of Hudson Valley mansions. Several things particularly stuck in my mind from the book. The first for me was the contingent of labor union and university professors, among others, that took a junket to the Soviet Union and became admirers of Joseph Stalin and centralized state planning for industry and farming. At this time the Soviet Union was not recognized diplomatically, so it spared no effort to give the group VIP treatment, including a personal meeting with the Leon Trotsky and then with Joseph Stalin. The core of this group later became key players in the Roosevelt administration.

Some very useful things came from the Roosevelt administration, including the Civilian Conservation Corps, the Securities and Exchange Commission, the Federal Reserve system, banking reform, Federal Deposit Insurance Corp. He also created some horrific bureaucracy. The second thing that stands out in the book for me was the government’s prosecution of two kosher chicken slaughterers in New York City.

The Schecter (Schecter is Yiddish for ritual butcher) brothers were middlemen, slaughtering chickens in accordance with Jewish dietary laws and selling them across the country to retailers. They actually sorted out dangerously unhealthy chickens, slaughtering only those without tubercular lungs. Roosevelt’s National Recovery Act’s Code of Fair Competition, though, prohibited “killing on the basis of official grade,” and it prevented customers from selecting particular birds instead of buying the whole coop. This anti-consumer-choice law was contrary to the whole purpose of their business. The government inspectors kept interfering with their business, though not knowing a hen from a rooster, insulted their customers and eventually prosecuted them in federal court, where they were fined and sentenced to jail. They appealed to the Supreme Court, which unanimously overturned their convictions and pretty much killed the NRA as a “coercive exercise of law-making power.”

The third thing that stands out in my mind the most was the shear meanness that Roosevelt showed. He pursued prosecuting former Treasury Secretary Andrew Mellon, the architect of one of the longest periods of economic growth, and he prosecuted Samuel Insull, a Chicago utilities magnate. Roosevelt in a speech before a trial had even begun, referred to the “Insull monstrosity” and “Ishmael and Insull, whose hand is against every man’s.” They were prosecuted merely because they were rich and successful. Both were acquitted, Mellon posthumously. Roosevelt’s treasury secretary, Henry Morgenthau, said, “I consider that Mr. Mellon is not on trial but Democracy and the privileged rich and I want to see who will win.” Mellon, after leaving government service devoted his life and fortune to creating a word class collection of art. He donated it all to the U.S. government and built with his own money the National Galley of Art in Washington, D.C., to house it and attract other art donations.

Roosevelt’s experimentations and speeches about redistributing the wealth from the “princes” of industry and Wall Street, kept investment money frozen in fear and uncertainty and created a depression within the Depression.

Roosevelt was born into wealth, as was his father, James, who fancied himself as a gentleman farmer, though he spent winters in New York City participating in the social scene there.

The Roosevelts’ country estate in Hyde Park was called Springwood. It was built in the 1800s as a large farmhouse. James bought the house at Springwood in 1867 and made it appear grander, adding two rooms, enlarging the servants’ quarters and adding a carriage house. In 1915 Franklin and his mother Sarah added a tower on the right and two fieldstone wings, replacing the clapboard siding with stucco. Franklin’s mother liked the green shutters and kept them that way. FDR planted half a million trees between 1911 and 1945, arranging with the forestry department of Syracuse University to set up an experimental forest. James Roosevelt died in 1900.

Franklin was educated by private tutors and then sent to Groton boarding school at age 14. He then went to Harvard and was editor of the Harvard Crimson, graduating in 1904. When he married Eleanor in 1905 they moved into Springwood, where his mother kept a close eye on the couple. Her room adjoined theirs. They did rent a house in New York while he attended Columbia Law School. In 1910 he ran on the Democratic ticket from Duchess County and won a seat in the New York State Senate. In 1913 President Woodrow Wilson appointed him assistant secretary of the Navy.

It was perhaps at Groton where he acquired some of his patrician devotion to the common man, “the infantry of our economic army.” The headmaster there instilled a sense of the importance of the working man in his students, according to a National Park Service brochure.

In 1921 at age 39 he contracted polio. Despite this handicap he won election as governor of New York in 1928 and was reelected in 1930. Two years later he was elected president and was inaugurated on March 4, 1933.

Franklin Roosevelt created the first presidential library. Before then presidents had donated their papers to university libraries. Roosevelt’s library was created while he was in office and he used it when he visited Hyde Park. Roosevelt designed the library in the Dutch Colonial style. It opened in 1941. Roosevelt’s donation of his papers to his library established a precedent for public ownership of presidential papers. That became law in 1978. The library is administered by the National Archives and Records Administration.

The library was built with privately raised funds and was then given to the U.S. government. Congress passed the Presidential Libraries Act in 1955.

The library has 17 million pages of documents and 13,000 digitized archival documents, photographs and other information on the Website, http://www.fdrlibrary.marist.edu.

When the museum portion of the library opened on June 30, 1941, it contained displays of gifts the Roosevelts received as well as Franklin’s collections of stamps, coins and ship models.

On display in the museum is FDR’s 1936 Ford Phaeton that included hand controls so he could drive the car around his Hyde Park estate and back roads of Duchess County. He was reputed to not be a good driver.

The National Park Service preserves the Roosevelt mansion, Val-Kill, Top Cottage, as well as the nearby Vanderbilt mansion. Val-Kill was Eleanor’s house to get away from Franklin’s mother. The Cottage was where Roosevelt entertained foreign dignitaries.

Roosevelt was born in 1882 and died in 1945.

He reshaped the country in his 12 years in office, accomplishing many things of lasting value and perhaps an equal number of things that were detrimental to the country. Most people in government and politics then just didn’t understand economics. Even as late as the Nixon administration the notion that government alone could determine the course of the economy persisted as President Richard Nixon imposed wage and price controls in 1971. Roosevelt had no one advocating for the efficiency of the marketplace except those who had profited highly from it. There was no Milton Friedman back then.

The book is called “The Forgotten Man, A New History of the Great Depression,” by Amity Schlaes, published by Harper Collins.

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