Fist Of History

Posts Tagged ‘Roosevelt’

Packing the Court – the Judical Procedures Reform Bill of 1937

Monday, April 6th, 2015


So it is 1936 and you are President Roosevelt, you just won an incredible ass-kicking of a re-election campaign, the country is slowly lumbering towards something resembling economic recovery, but you want to do more.  Beyond that, several critical pieces of legislature that make up part of your legislative reform efforts, commonly known as the New Deal, were up for review by the Supreme Court only a year ago and they got significantly spanked, specifically the Court sharply limits your ability to remove people from appointed offices that disagree with you, shuts down a key piece of bankruptcy protection law that shields debtors from banks, and crushed your National Industrial Recovery Act.  To add further insult to injury all three rulings were read on the same day, 27 May 1935, to increase the public attention and humiliation factor.


Now the first option would be to accept these setbacks with quiet dignity and attempt a new method of achieving the same legislative ends.  The problem with that is it would take time, the cooperation of Congress, and would still face the same Supreme Court that was hostile to your earlier efforts.  Alternatively you could take a new approach and attempt to exercise the power that Congress has over the Supreme Court, specifically its power to shape the Supreme Court, including defining how large it was.  Hence Roosevelt’s 1937 Judicial Procedures Reform Act, which at its heart allowed the President of the United States to appoint additional judges to the Supreme Court, subject to Congressional approval, beyond the current nine, with a maximum allowable addition of six extra judges.  However there was a caveat, new judges could only be appointed at the rate of one per judge who was older then 70 years and six months of age – i.e. for every “old fuddy judge who doesn’t like the New Deal” you can appoint a new shiny younger judge who will probably be open to the new ideas of the New Deal.

roosevelt fireside

Roosevelt attempted to win the American public to his legislative reform ideas with a fireside chat on 9 March 1937 and Congress took up the legislation for debate, however from the start his idea was not warmly received.  Republican opponents referred to it as an effort to “pack the Court” and key members of the Democratic party, both party bosses and members of Congress, found the bill a distasteful effort by the President to exert undue influence on the Supreme Court.  It was killed in the House, in Committee, and also failed in the Senate due to vigorous opposition from the Republicans.

In the end, the effort failed, however later in 1937 the Court was more open to New Deal legislation and, in general, the Supreme Court’s justices stated that most of the problems with the New Deal legislation they dealt with was due to it being poorly written, and far too broad, rather than conceptual issues.

For those curious about applicability, if that bill was in force today the President would be able to appoint four additional justices, if those slots had not already been filled.

Sources:  Wikipedia article on the Judicial Procedure Reform Act of 1937

The United States, Iceland, and World War II

Friday, March 27th, 2015


For the United States the year 1941 was an odd year diplomatically and politically, many within the nation felt that war was coming yet a large minority wished to remain neutral in any upcoming conflict.  As the Soviet Union, Germany, and Great Britain were embroiled in the war there was an odd twilight period when the United States remained effectively out of the conflict but indirectly assisted the Allied powers cause.  Franklin Roosevelt kept edging the United States closer to open conflict with Germany, as well as assisting in the resistance to Japanese expansion, through a series of clandestine activities.  These included an undeclared war with German submarines in the Atlantic and his support for the American Volunteer Group in China (otherwise known as the Flying Tigers.)  One particular activity though that stands out is the United States military occupation of Iceland in July 1941.


On 10 May 1940, in an effort to ensure that Iceland did not end up falling to possible German invasion, Great Britain sent 746 Royal Marines to the island to secure it against potential German shenanigans.  The government of Iceland protested this and declared itself neutral in the war but tolerated the British presence and cooperated with it.  This was mainly due to the fact Iceland didn’t have the capacity to actually resist.  Great Britain increased its troop presence on the island, but by July 1941 Great Britain need its troops in Iceland for use in the war but still needed the island nation secured against the Germans.  So on 7 July 1941 the government of Iceland officially “agreed” that its defense should be transferred from Great Britain to the United States.


Although the United States was neutral officially Marines were sent to Iceland to take up its defense.  Furthermore the United States maintained a garrison on the island throughout the war, only departing at the end of the war.  The occupation actually caused hardship for Iceland which had not been in the German war plans until the British intervened, after which point Icelandic ships became a regular target of German submarine attacks.

This intervention is an excellent example of the skill Franklin Roosevelt used in working to contain German aggression without pushing the United States actually into war.

Sources:  Wikipedia articles on the Invasion of Iceland in World War II and the history of Iceland in World War II

Nazi Secret Map and the United States in 1941

Monday, December 8th, 2014



What you see above is a broad map that depicted Germany’s long term ambitions in South America – discovered in 1941 as part of a British espionage effort to capture files from the German ambassador in Brazil the map was shared with the United States in October 1941.  Roosevelt reacted with anger and announced the secret map in a speech to the American people in which he denounced the ambitions of Nazi Germany in the “American Hemisphere” – of particular concern to the United States Congress, the President, and the American public was how the handwritten notes on the map discussed air fuel supplies and locations for airbases potentially within range of the United States mainland.

The reaction by the United States Congress and the American people was powerful – both houses of Congress within a week repealed the Neutrality Act and shifted from an isolationist view to one more open to intervention in Europe.  Although the Japanese attack on Pearl Harbor would settle the issue of involvement by the United States in December 1941, this map paved the way towards American intervention in Europe.


What is of particular interest is the map was a fake, created by the British government to push the United States towards entry into the European war.  It was created under Churchill’s direction by Station M, a forgery producing espionage unit located in Toronto, Canada.  Although the question that historians have yet to answer is was the map entirely fiction or was it based off a real Nazi map used to outline German ambitions and attract the diplomatic interest of South American nations.

Either way the map itself was a highly skilled bit of espionage that helped push the United States down a path towards full intervention in World War II.  In particular the work of this map helped the British cause even after the attack on Pearl Harbor, the American public were in December 1941 of a mixed outlook on joining the war in Europe, but generally leaned towards the need to intervene in Europe.  This map, and the argument it established that Nazi Germany was already working to intervene in the “American” sphere of influence, probably helped ensure that the wrath of the United States and its people would be shared in both major theaters of the war.

Sources:  Wikipedia article on the New Order (Nazism) and its interests in South America, article in the Daily Mail on the secret map, entry in Napoleon’s Hemorrhoids and Other Small Events that Changed History by Phil Mason, pp. 91

Tupolev ANT-25 – record setting flight of 1937

Monday, June 9th, 2014


Meet the Tupolev ANT-25, an experimental aircraft developed by the U.S.S.R. in the early 1930s as part of a broader Soviet effort to fund, and expand, the position of the Soviet Union as an aircraft development powerhouse.  The Tupolev ANT-25 was developed on a recommendation by Soviet planners that a long distance aircraft be created to close the distances within the U.S.S.R.  The ANT-25 was able to successfully fly initially between Moscow and Kharkov, a total distance of 7,500 miles, which for technical reasons was not considered a record setting flight at the time.  As a combination publicity stunt and proof-of-concept the Soviet Union’s leadership decided to send the ANT-25 on an over-the-pole flight from Moscow to San Francisco.


Between 18 to 20 June 1937 the ANT-25 successfully made the flight from Moscow, over the North Pole, over Canada, and then entered into U.S. territory passing over Seattle.  Due to weather and the demands of the flight though the crew was not able to make it to San Francisco and instead had to land in Vancouver at an airbase.  They were welcomed as heroes by the local population and vetted as heroes throughout the U.S. as a result of the flight, including a heroes welcome in New York and guests at a major speech by Franklin Roosevelt to commemorate the event.  However in private within the U.S. the reaction was not as pleasant, the U.S.S.R. had just exhibited an incredible level of aircraft design and skill and FDR wanted to find out why the U.S. aircraft development was not as sophisticated.  The U.S. military leadership did not have a response at the time, however other forces would work to end the U.S.S.R.’s advantage in aircraft research and design.

The popular reaction included optimism that this flight represented but the first step in both nations crossing the pole regularly in airplanes and Popular Mechanics speculated that soon air mail service between both countries would be established.


Those forces were mainly Joseph Stalin, who decided in part of his normal fits of paranoia that the aircraft designers who were responsible for creating wonders like the Tupolev ANT-25 were actually working to undermine his rule and the Soviet Union.  The aircraft development program was shuttered for several critical years and the designers shipped out to the Russian Far East to spend time in prison camps.  It wasn’t until the outbreak of World War II and the German air force’s initial crushing victory over the Soviet air force that the imprisoned designers were taken out of prison and pushed into a crash development effort to improve Soviet aircraft.

Sources:  Wikipedia entry on Tupolev ANT-25, Popular Mechanics article on the Tupolev ANT-25, Russian President’s Archive article on the Tupolev ANT-25

Alf Landon – Liberal Republican

Monday, April 28th, 2014


Meet Alf Landon (1887-1987), one of the greatest examples of a Progressive (a.k.a. Liberal) Republican to grace United States politics in the 1930s.  Landon made his initial career working in the petroleum industry and by the 1920s was a wealthy man – war veteran from World War I.  Landon got into politics in 1922 serving as secretary to a governor of Kansas and lead the successful Republican Presidential and Gubernatorial campaigns of 1928 in Kansas.   With the onset of the Great Depression Landon entered politics for himself, running for governor of Kansas in 1932 and winning despite the overall implosion of the Republican party in reaction to the economic collapse of 1929-1932.  Landon ran again in 1934 and was the only Western Republican to retain his seat as governor – due to this electoral success and the success of his policies at combating the depression in Kansas while remaining more centrist economically led to his being selected as the Republican nominee for the Presidency in 1936.  Running against Franklin Roosevelt Landon received a mighty electoral spanking, winning 16 million votes to Roosevelt’s 27 million and only scoring a total of eight electoral votes.  (Maine and Vermont respectively backed him, Landon did not even carry his own home state.)  After his 1936 electoral defeat Landon left politics and did not seek further political office, although he remained an influential member of the Republican party.


So the question then is why should the average reader care about a losing Republican Presidential candidate like Alf Landon – the simple answer is because Landon represented a type of Republican that was briefly viable during the 1930s and 1940s in the United States.  Landon and others like him grabbed controlled of the Republican party when it was reeling from the electoral losses of 1932 and 1934 and helped push the party towards a Centrist-Right, and even somewhat Centrist-Left, position in electoral policies to meet the demands of the American voter while also keeping closer to the views of some progressive conservatives that the nation needed reform but not the seeming revolution Roosevelt was offering.  Some of the policies enacted by Landon while governor of Kansas illustrate this philosophy:  tax reductions, a moratorium on mortgage foreclosures, state supported local relief, and several emergency banking laws.  However Landon achieved those goals for Kansas without increasing the state deficit.  His ideas didn’t end the Depression for the state but they took some of the sting out of it.


Landon held to the idea that government had social obligations that it needed to focus upon, and social ideals the government should approach, but he sought to do so in a framework of fiscal conservancy.  Landon did not oppose Roosevelt on his social programs but instead attacked Roosevelt on the control the federal government had taken over the overall United States economy.  Landon wanted a federal government that was active but lean.

Whether or not his ideas might have worked is a what-if of history we’ll never know, but Landon represented a wing of the Republican party that remained a factor in United States elections up until the Richard Nixon era.  It wasn’t until Nixon, and later Reagan, that the Republican party really gave up its Progressive wing almost entirely and instead focused upon courting the more conservative elements in the United States electorate (and also scooped up the solid South once and for all.)

Sources:  Wikipedia on Alf Landon, Kansapedia on Alf Landon, Kansas State University page on Landon Lectures.

Operation Meteorite – an early German plan to assassinate FDR

Tuesday, April 1st, 2014


One of the more fascinating historical “what-ifs” is a little known attempt by Nazi Germany to assassinate United States President Franklin Delano Roosevelt in 1941 prior to the United States entering World War II.  The plans origins began in 1940 with a theoretical study on the issue commissioned by the Reichssicherheitshauptamt (or RHSA) – the Reich Security Main Office – an SS organization built to fight enemies both “domestic and foreign” to the Nazi regime.  The main idea was to insert a highly skilled SS sniper into the United States as a sleeper agent who, working with an active Nazi spy ring in the United States at the time, the Duquesne Ring, would be kept appraised of FDR’s schedule and public appearances to allow an emergency attempt to kill the President if his increasingly supportive leanings towards the British would prove a serious threat to the German war effort.  Although historic records are unclear it appears the sniper of choice, one Erwin Konig, was successfully inserted into the United States under a cover identity by the fall of 1940.  This insertion was deemed necessary due to the collapse of France and rising evidence of impending potential U.S. support for Great Britain.  However no serious efforts were attempted to implement the plan due to the continued demands by the United States in 1940 that Great Britain pay for all its war material purchased from the United States with hard currency.  (Some within the RHSA saw this actually as a short term setback for the Nazi war efforts but long term a potentially devastating drain on Great Britain’s ability to wage war.)
German_SniperThis outlook changed in March 1941 with Roosevelt successfully signing the Lend-Lease Act into law, ending the requirement that nations fighting the Nazi regime pay for war material in hard currency, this new law allowed the United States to provide war goods to any nation on credit that the President deemed vital to the defense of the United States.  With a potentially unlimited supply of weapons and materials flowing to Great Britain it was decided by the RHSA that Roosevelt being assassinated might disrupt politics within the United States sufficiently to delay significant aid reaching Great Britain or, even more unlikely, that the Lend-Lease Act might be ended by Republican opposition.  The operation, named Betrieb Meteorit (Operation Meteorite) was to take place as soon as the possibility presented itself of the attempt having a “reasonable chance for success.”  The leader of the Duquesne Ring though, headed by Frederick “Fritz” Duquesne, considered the operation far too high risk to his carefully placed agents within the United States and deliberately delayed implementation of the operation.  However the ring did provide the RHSA with intelligence of an impending conference being planned to take place between Roosevelt and Churchill in either “July or August 1941” – a major concern for the Nazi government due to the impending invasion of the U.S.S.R. in June 1941.  Frederick Duquesne was ordered to implement Operation Meteorite no later than July 1941 or risk replacement as head of the spy ring.   Fortunately for Duquesne he had an agent inserted in Washington D.C. who was able to learn through a leak in the White House that Roosevelt was planning to attend a dedication of a Presidential Library in Hyde Park, NY, on 30 June 1941.  Erwin Konig and a handler traveled to Hyde Park in early June 1941 and began to scout the location of the impending Presidential visit, the plan was to shoot Roosevelt during a speech at the front of the library, although the shot would be over a considerable distance Konig in his memoirs argued that he could have made the shot had the operation proceeded.  Security around the President at such an event was minimal by German standards and both Konig and his handler felt they had an excellent chance to escape had the attempt been successful.  Fortunately for the United States the attempt was never made, the U.S. Federal Bureau of Investigation had its own double agent infiltrated within the Duquesne Ring feeding them intelligence, word of the planned assassination reached the F.B.I. and they were able to successful close in on the ring and shut it down entirely in one swoop on 29 June 1941.  The dedication of the library proceeded but under much heavier security, Konig was able to escape but his handler was captured.  Konig was able to depart the United States aboard a German U-Boat sent to the East Coast specifically to intercept him.  Konig returned to Germany and took part in the later stages of the invasion of Russia, playing a prominent role in Stalingrad.Henry_A._WallaceHad the attempt actually succeeded the odds are fairly low that Operation Meteorite would have ended the Lend-Lease agreement or ultimately prevented the U.S. entry into World War II with the bombing of Pearl Harbor in December 1941.  However an interesting wrinkle on these events is the Vice President at the time, Henry Wallace (pictured above.)  An unpopular choice made by Roosevelt in 1940 Wallace was seen as highly liberal and was distrusted by the more conservative elements in the Democratic Party.  As well there was almost a minor scandal around his unusual religious views at the time, Wallace was intimate with a Russia guru and believed in several spiritual ideas that many in the U.S. would have potentially found unsettling.  Had Roosevelt been assassinated it is remotely possible Wallace taking office, with his extreme leftist views, might have divided the Democratic party enough to make the Republicans able to block some of the more aggressive pre-war actions undertaken by Roosevelt in the later months of 1941.Sources:  Wikipedia entries on the RHSA, Erwin Konig, the Atlantic Charter, the Duquesne Spy Ring, Lend-Lease, and Henry A. Wallace.  In addition A Snipers Journey – Memories of an SS Sniper by Erwin Konig, 1952.

How Cost-Plus Contracts Changed America

Monday, March 10th, 2014


That is Henry Stimson, Secretary of War for the United States from 1940 to 1944, and as good a face as any to slap on an article focused on how an abstract purchasing decision drastically changed the face of the United States.  World War II represented a massive, staggering investment by the United States government in war material, as was mentioned in an earlier entry, an investment which resulted in a whopping 120% of GDP being held as debt by the federal government, a.k.a. the people of the United States.  What was amazing though was how the money was spent, as the U.S. government needed vast quantities of war material quickly it utilized a specialized form of procurement contract, the “cost plus contract.”  Now this contract had first been used in World War I and had been designed as a “cost plus percentage of cost” contract – i.e. if it cost a manufacturer $100 to produce a military item and the percentage was ten percent, the government would pay the contractor $110 per unit.  Unfortunately this led to massive abuse by war contractors in World War I, so the government for World War II went with a new model, “Cost Plus Fixed Fee” with an added incentive that the fee would go down a bit if the contractor exceeded certain price caps.  The exact dynamics vary quite a bit by contract and contractor, but what these leaner, but still lovely, contracts did to the face of the United States was huge.

First it still encouraged manufacturers to now produce as much war material as the government would pay for, and the government’s World War II appetite for war material was nearly endless.  Now manufacturers did not need to worry about balancing labor costs against a fixed expectation of market share and proceeds from the sale of goods, they had to focus on producing as many goods as they can.  Which sparked a sudden huge appetite for labor, 1942 marked the beginning of a huge boom in hiring that virtually wiped out unemployment.  Add to that the fact that the draft was pulling away huge numbers of young men and suddenly factories were hiring women, and minorities, in vast droves.  Although racism remained a powerful force in dividing up who did what on the factory floor what changed was northern factories suddenly demanded Latino and African-American labor in vast quantities.  Bodies were needed to work machines, the largest impact of course being the huge hiring and training of women for industrial work.


The federal government also invested a huge amount into California, the Golden State benefited by a fantastic infusion of federal funds that allowed for the production of new production facilities and shipyards as well as many new military bases.  California’s economy boomed during the war and sparked a huge resettlement effort by people seeking new opportunities in the 1940s.  (That same investment infusion was sustained by Cold War spending in the Golden State post-World War II, since the infrastructure was in place.  Especially within the aerospace industry.)  From 1942 to 1945 the United States enjoyed a bizarre economic situation that also led to probably one of the largest changes in the economic nature of the nation, a vast redistribution of wealth.  To attract labor higher wages had to be offered, combined with lavish federal spending, support networks, and very high tax rates upon the wealthy and the United States enjoyed a shrinking in material difference between the classes that laid a foundation of progressive social norms that lasted until the early 1970s.  Simply put workers got used to extensive benefits, solid paychecks, and union organization in factories.  (A benefit of the actions of the Roosevelt administration which worked hard to pacify labor during the war to avoid disruptions of production.)

So what happened to all this progressive change?  Well the wealth-distribution stuck around through the 1950s and most of the 1960s, but the end of World War II also bought a solid end to many other progressive ventures.  The U.S. government ended a series of programs to assist workers with a broader social network, as part of a broad post-war scaling back.  The efforts to end discrimination in the workplace came to a grinding halt with the end of U.S. federal contracts and racism reverted itself, forcing African-Americans and Latinos out of the factory and into lower positioned service jobs.  (Although the movement of African-Americans from the south to the north remained, leading to large African-American populations in cities like Detroit and Chicago.)  Finally women were rapidly squeezed out of the workplace through direct actions to return them to domestic household support and open jobs up for returning veterans of the war.

Sources:  Wikipedia entry on Cost-plus Contracts, Betraying Our Troops: The Destructive Results of Privatizing War, Ships for Victory: A History of Shipbuilding Under the U.S. Maritime Commission in World War II, article on the Economic Consequences of World War II, Schmoop entry on World War II economy in the U.S.

Federal Theater Project

Monday, January 13th, 2014


During the New Deal the United States federal government undertook to support a wide range of projects related to the arts through a series of special programs.  The goal of this federal funding was to keep various creative professions viable during the worst of the Great Depression – one of the more interesting of these efforts was the Federal Theater Project.  From 1935 to 1939 this program underwrote a series of live performances to provide individuals with low to no income a chance to experience the theater and also to keep live theater viable as an art form in the United States.  This productions took on all sorts of forms but one of the most common, and most enjoyed by the general public, were called Living Newspapers were clippings from newspapers discussing issues taking place in the 30s were turned into short plays performed on stage.


Unfortunately the Living Newspaper productions rapidly ran afoul of the Congress because those in charge of writing and staging the productions often took a critical view on government policies they disagreed with and the performances often swung to the political left when discussing issues.  The Living Newspaper also caused tension for the federal government when it tackled foreign affairs, often putting a particular “spin” on events that ran afoul of the federal governments efforts to avoid entanglement in the deteriorating political situation in Europe.  The performances though covered a wide range of performances, including more traditional stage shows and presentations.  One of the most famous of these though was a performance titled The Cradle Will Rock.


This performance angered many because of its attacks on capitalism, political corruption, opportunism, and its strong pro-union message.  In essence this musical was focused on how a major steel capitalist (named Mr. Mister) owns and runs the entire social and political structure of the town in which his company operates.  The play focuses on efforts to unionize the towns workforce combined with flashbacks showing how Mr. Mister built up his empire of influence.  The musical also touches on themes of corruption and crime in 1930s America.  Initially blocked just before opening by the Works Progress Administration – the overall group funding the Federal Theater Project – the cast got around the ban by the director of the show playing music on stage and the cast singing their parts from the audience.

Eventually the Federal Theater Project had its funding entirely cut by 1939, mainly due to the political nature of the performances.  However it remains an interesting moment in U.S. history, when the federal government for a short window put considerable funding behind public theater aimed at mass consumption.  Also, apparently, it funded circuses too:


Sources:  Wikipedia entry on The Cradle Will Rock and the Federal Theater Project

Meaning of US coins

Wednesday, March 21st, 2012

An interesting argument that I have run into while cruising the internet is the argument made by some that US coins used to express core US ideological values, such as liberty, freedom, democracy, and that since the 1930s US currency has changed to reflect leaders/historic figures to hide those values from us.  Although an extreme opinion I also find most people today are used to the coins in their pocket reflecting the heads of former US leaders, the consistency of design is a symbol of solidity to the US public today.  For many I believe coins are considered a symbol of the country, symbols generated through careful design and an attention to history.  One might think our ancestors put the same thought into the coinage – in reality though I think it safe to say not so much.  Actually, more often, I believe it simply came down to putting something on the coins that looked neat.  Observe:

That is a 19th century “Indian Head” Penny – named because they put a girl on it in an Indian headdress.  Because why not?  Note the useful indication on the back of what the coin is.  No fancy building images or symbols from our past, just a statement that this coin is worth one cent with a cool wreath around it.

This is called the “Liberty Cap” dime – because the lady on it is wearing a liberty cap – note how the word Liberty is on the hat.  You may wonder at the unusual look of the hat, that is because it is actually a French hat, worn by the peasant classes, during the French Revolution, a cap which eventually become associated with the ideals of the French Revolution.  It was also associated in ancient times with a freed slave as a symbol of their being free.  In neither version of the cap was the word “Liberty” actually put on the cap but our ancestors felt driving home this association was critical.  Notice on the obverse side we have a pretty bad-ass rendition of the Seal of the United States.

This is an Indian Head/Buffalo Nickel minted in 1935, notice the sinister New Deal design motif, mainly of a giant Indian Head and a Buffalo.  This nickel was minted because apparently Theodore Roosevelt felt US coinage was not artistic enough and a new neater design was needed.  Hence this nickle, I believe under the heading that bison looked cool and Indian heads were also cool.  (Really, from what I read not a great deal more thought went into this design beyond “It looks awesome!”)  Apparently though the coin wore down too quickly and after twenty-five years was replaced with the Jefferson design.  Not due to some major ideological shift, just because Jefferson didn’t wear down as quickly.

This is a Mercury Dime – because Mercury was an interesting Greek god and the helmet with wings looks nice.  Please note the date, 1927.  Please note the obverse of the design, a Fasces – a bundle of sticks held together with rope wrapped around an axe – an ancient Roman symbol of authority still on our dime today.  If you ever meet anyone who tells you this was added to the dime with Roosevelt’s head as a sign of the powers taken over by the Presidency, and these people are out there, please laugh at them for me.

Finally – the Liberty Head nickel, a really infamous coin with a cool story behind it – but I’m going to save that story for a future Fist.

Sources:  Wikipedia article on the Buffalo Nickle (

Book Review – “The Forgotten Man”

Wednesday, December 14th, 2011

Full Title: The Forgotten Man, A New History of the Great Depression, by Amity Shlaes

Printed in 2007 The Forgotten Man already shows a bit of age even only four years later, at several points within it Shlaes speaks of the improvements to the capital market, in particular in the mortgages industry, thanks to the bundling of mortgages lowering the risk to individual lending institutions to provide capital.  Leaving aside this interesting note, the book overall presents an overview of the Great Depression and the policies of Presidents Hoover and Roosevelt, at its heart it contends that these policies failed to alleviate the Great Depression and both administrations, by intervening in the economy in a poor manner/at all, at best lengthened the time period it took the United States to recover from the Great Depression and at worst aggravated the problems of the depression with their policies/economic tinkering.

First allow me to say that in one aspect Shlaes is correct, the policies of both administrations did harm to the economic recovery of the United States, if you narrowly define “recovery”, as Shlaes did, to the goal of returning industrial and agricultural productivity to pre-1929 levels.  That is the mark which Shlaes holds the policies of both Hoover and Roosevelt to in her analysis and in that she is correct, US production levels in all major economic measures remained lower during the 1930s than the heights they reached in the 1920s.  The problem that I had with Shlaes work however stems from her treatment of the 1920s, in her examination of this decade Shlaes paints a picture that is inaccurate through a sin of careful omission of certain facts.  For example she speaks warmly of the Ford Corporation and Henry Ford’s work to spread consumer goods, specifically automobiles, to the mass of the consuming American public, but omits to mention his $5/day revolutionary pay scale for his workers, a fact directly linked by many historians to his workers being able to buy his products.  Similarly Shlaes speaks often of the higher value consumer goods owned by more individual families in the 1920s and omits to mention how many of them achieved this material prosperity on borrowed capital, taking advantage of the same loose borrowing regulations used by stock-speculators to leverage small amounts of capital into large borrowed loans for playing the stock market.  Leveraging a small nest egg or a weekly paycheck to play the stock market on borrowed money is not that different from borrowing heavily against that same paycheck to buy a new refrigerator.

Which brings me to my major problem with Shlaes work, it is history with a lesson, a political lesson, it is history to teach those reading it of the magical corrective power of the markets.  Shlaes argues throughout her book that the New Deal policies of Roosevelt, in particular, were so damaging to the US economy because they kept labor prices high.  (Hoover gets less face time in the book but is blamed for the same actions, using moral force to pressure business into keeping wages high and therefore lowering employment.)  Shlaes argues that by government moral, and later legal force, wages were kept high and companies had to reduce their staffing to avoid an impact on their profits, because no company would ever consider taking lower profits.  (Not my argument by the way, that is directly from Shlaes.)  She argues throughout the book that if wages had been allowed to fall, as the market dictated, eventually they would have fallen to a point that labor was cheap enough employers would hire again, driving up production, and in turn by putting more buying power in more hands, pushing up demand.

The question raised by this though is demand for what, the very production Shlaes seeks to have boosted by the government taking a “hands off” approach to the markets was production in moderate to expensive cost consumer goods, the very items workers would need significant amounts of income to purchase.  A worker who once could have afforded such goods on debt, finding their paycheck cut by a third, would be less inclined to make such purchases until their original income levels were restored.  A pot of money for labor spread out too thin would not have ended the depression any more than concentrating more buying power in fewer hands ended the depression, Shlaes defeats her own points.  What is worse is that to teach her lesson about leaving markets to sort out issues on their own she makes no effort to document any positive effects from New Deal relief programs.  Shlaes focuses on how they hurt peoples dignity, created a class of individuals willing to support Roosevelt to keep their support payments coming in, but she never discusses how for many that government income stream allowed them to hold off starvation or complete collapse of demand.

This book is a valid one and one I would personally recommend people read, it does offer a valuable perspective on the New Deal that avoids the fawning outlook many historians have for that period of time.  However it should be read only in combination with at least one other, left leaning, history of the New Deal.  On its own this work, in my opinion, has too much of an agenda to provide a usefully neutral view of the Great Depression and the policies of that period.