The Republican Party in the Age of Roosevelt

Sources of Anti-Government Conservatism in the United States

Elliot A. Rosen

• Publisher: University of Virginia Press
• Year: 2014
• Print ISBN: 9780813935546
• eBook ISBN: 9780813935553
• Topic: History
• Subtopic: North American History
• Index: History

Elliot Rosen's Hoover, Roosevelt, and the Brains Trust focused on the transition from the Hoover administration to that of Roosevelt and the formulation of the early New Deal program. Roosevelt, the Great Depression, and the Economics of Recovery emphasized long-term and structural recovery programs as well as the 1937–38 recession. Rosen's final book in the trilogy, The Republican Party in the Age of Roosevelt, situates distrust of the federal government and the consequent transformation of the party. Domestic and foreign policies introduced by the Roosevelt administration created division between the parties. The Hoover doctrine, which sought to restrict the reach of independent agencies at the federal level in order to restore business confidence and investment, intended to reverse the New Deal and to curb the growth of federal functions.

In his new book, Elliot Rosen holds that economic thought regarding appropriate functions of the federal government has not changed since the Great Depression. The political debate is still being waged between advocates for direct intervention at the federal level and those for the Hoover ethic with its stress on individual responsibility. The question remains whether preservation of an unfettered marketplace and our liberties remain inseparable or whether enlarged governmental functions are required in an increasingly complex national and global environment. By offering a well-researched account of the antistatist and nationalist origins not only of the debate over legitimate federal functions but also of the modern Republican Party, this book affords insight into such contemporary political movements as the Tea Party.

1 | HERBERT HOOVER AND THE
ARK OF THE COVENANT

AS THE Democratic Party’s National Convention opened on June 28, 1932, Herbert Hoover broached the issue of his likely opponent with his press secretary, Theodore Joslin. “Do you think Roosevelt will be nominated?” the president inquired. Joslin assured him that the governor of New York would overcome his projected one-hundred-vote deficit on an early ballot. Less sanguine about Franklin D. Roosevelt’s chances, Hoover noted: “I am afraid of Baker. . . . He’s a strong second choice of the convention and would be a harder man for me to beat.” The strength of Ohio’s Newton D. Baker depended on his reputation for eloquence, intelligence, and probity. Woodrow Wilson’s secretary of war, Joslin conceded, would succeed if Roosevelt lost momentum by the fourth or fifth ballot. There seemed “one way to nail him [Baker]. [William Randolph] Hearst hates him,” Joslin said, referring to the newspaper magnate’s abhorrence of Baker’s internationalist views.

Joslin suggested a telephone call by the Hoover aide Lawrence Richey to Louis B. Mayer, vice president of Metro-Goldwyn-Mayer and vice chairman of the California State Republican Central Committee. Mayer would be asked to warn the isolationist Hearst against the growing likelihood of a Baker nomination. The notion of selecting the weaker of Hoover’s two potential opponents in the coming campaign sounded appealing, and the call was made. Hoover exulted: the scheme worked “to perfection.” “If Baker isn’t stopped, it will not be the fault of Hearst.”¹

This is not to suggest that Herbert Hoover had a hand in the choice of his adversary in the 1932 presidential contest, but rather to shed light on his strategy. Hoover’s actions seem to suggest that he ascribed to the “boy scout,” or squire, theory—a belief shared by many who served with Roosevelt in the Wilson administration and popularized in the columns of Walter Lippmann, which held that the governor of New York was shallow, pliant, eager to please all comers, and possessed of few if any convictions. This view was misguided. Unhindered by dogma, amenable to ideas that challenged economic orthodoxy, and surrounded by advisers who discarded traditional approaches to previous economic downturns, Roosevelt shed Hoover’s measured view of the role of the central government and the presidency in managing the economy.²

While the squire of Hyde Park assumed an experimental approach to the Great Depression, Hoover, despite such innovations as the Reconstruction Finance Corporation, no longer seemed the modernizer he had been during his service at Commerce in the New Economic Era of the 1920s. “Full of information,” Raymond Moley recounted, Hoover was “imprisoned by his knowledge.” Indeed, when the Republican governor of Iowa, Daniel Webster Turner, called on the president in 1931 and offered his appraisal of agrarian sentiment, “Mr. Hoover brought the interview to a close with the brusque statement, ‘That’s not my information.’ ”

Surrounded by supporters who tended to revere him and confirm his appraisal of the economic and political outlook, and given to a growingly defensive frame of mind, Hoover was shrewdly evaluated by fellow Republicans. The Kansas congressman Clifford Hope observed: “No one could ever discuss anything with Hoover while he was president because he very distinctly gave the impression that his mind was already made up.” Verne Marshall, the outspoken editor of the Cedar Rapids Gazette-Republican, admonished Hoover in May 1933 that his miscues had often resulted from information provided him by associates who were “too sympathetic or too dumb to give it to you as you should have had it.” One needs only to compare the “yes-men” who surrounded Hoover with the often diverse, even discordant, advisers who served Roosevelt.³

No sharp line demarcated Hoover’s viewpoint on economic and political matters before and after the Great Depression. His economic ideology, shaped when he served as secretary of commerce, rested on the principle of voluntarism. Government regulation and control of business, he believed, was clumsy, incapable of adjusting to changing economic needs. It produced results more abusive than the problems to be remedied. The vast and harmful tide of such legislation could be avoided by the “organization of business itself,” by business leadership operating through voluntary associations, which would preserve initiative and foster progress. Cooperation would eliminate waste in the form of destructive competition, business-labor strife, extremes of the business cycle, unemployment, and lack of synchronized standards. He viewed business, in sum, as the process of passing from extremely individualistic action to a period of associational activity managed by trade associations, chambers of commerce, craft unions, professional groups, and farmers’ cooperatives. Collective action through self-governing industrial groups would stabilize output and employment, and move society toward industrial democracy.⁴

A devolutionist, Hoover held that “the American people have not forgotten how to take care of themselves” and “should not delegate their welfare to distant bureaucracies,” namely Washington. Thus originated the Republican theology applied by Hoover, Robert Taft, and Arthur Vandenberg to a host of economic and social issues during the Age of Roosevelt.⁵

When the Great Depression descended on his administration, Hoover relied on the findings of the President’s Conference on Unemployment of 1921, which he had chaired. As he had in the postwar recession, he urged state and local acceleration of public works, along with community and business efforts to sustain employment and provide relief. The creation of a bank of public works, proposed in the prosperous 1920s, never materialized. When public revenues evaporated and deficits grew in late 1931 and in 1932, Hoover and Treasury Secretary Ogden Mills sought cuts in expenditures and revenue enhancement. Nor did business prove able to maintain employment or investment levels as requested by the president and pledged at sundry White House meetings as the downturn deepened. When the states proved unable to fund public works, their customary role in that era, the administration offered loans through the Reconstruction Finance Corporation. The states, however, subject to the requirement that they declare virtual insolvency in order to receive the loans, hesitated to borrow. Local communities and charities proved unable to meet welfare needs. Hoover, unwavering, insisted on adherence to voluntarist principles and minimal government intervention in the economy and a sharply delimited concept of executive power. The threat to the nation, he asserted during the 1932 campaign, came less from the Depression than from the prospect of Franklin D. Roosevelt’s proposed New Deal.

Though initially anticipating victory—he appraised his opponent as intellectually incapable of surviving the rigors of a national contest—as the campaign progressed, the president exhibited increasing signs of distress, sensing a fundamental challenge to the American System as he had defined it. Ready to concede the immediate contest, he determined to fight for his concept of the American dream. Still the defender of principles originally set out in his American Individualism (1922), Hoover urged reliance on individual initiative, cooperation by organized groups of citizens for sustenance in periods of joblessness, and, when required, dependence on the states and the local community for social and economic remedies. Hoover viewed American society and its political system as unique and distinct from that of Europe. His was a secular religion based on immutable principles that applied equally to the New Economic Era of the 1920s or the Great Depression. Determined that his ideology should outlast that of the New Deal and aware that more than a customary shift in political management at the White House was under way, Hoover took full aim and let loose at Madison Square Garden on October 31, 1932.

The American System, the president intoned, “had been builded up by some 150 years of the toil of our fathers.” It was the unique accomplishment of our race and its experience. The United States had created on this continent a civilization superior to any other in the history of mankind. The Depression, he insisted, was a fleeting episode, nearly ended. To embark at that point on the course proposed by his opponent would undermine and destroy the nation’s basic institutions and achievements. Hoover preferred “self-government by the people outside of Government,” the best approach to the nation’s malaise, since it would dissolve with the Depression’s end. Roosevelt’s proposals portended the enlargement of the federal bureaucracy, its power, and its budget at the expense of the people, local government, and the states. Tyranny and incompetence would ensue. “You cannot extend the mastery of government over the daily life of a people,” he insisted, “without somewhere making it master of people’s souls and thoughts.” Free speech would die with the suffocation of free enterprise. More by implication than by concrete proposals, he warned ominously, his opponent planned a profound change in American life. Following defeat at the polls in November, Hoover devoted the balance of his years to shaping the Republican Party as a vehicle for undoing the “collectivist” state.⁶

Hoover’s political ideology remained fixed to the end of his days. Insistent on individual, local, and state responsibility, he contended that the federal government should step in only as a last resort. The function of government, he urged following his defeat in the contest with Roosevelt, “lies in the State directing its activities to the prevention of the abuse of the right of property and to act as an umpire between property holders to see that they do so. That is the spirit of the Constitution.”⁷ Upon repairing to Palo Alto, California, Hoover undertook the task of checking the Roosevelt administration’s “march to Moscow.” The abandonment of the gold standard and consequent dollar devaluation, he insisted, defrauded savers and investors and inhibited capital investment leading to inflation and social instability. Instead, Hoover offered:

When I organized the country in 1931 it was done upon the basis of a long experience based on the principles: (a) that administrative responsibility must be lodged in voluntary non-partisan agencies directed locally by leading citizens; (b) that the state and local authorities must contribute something; (c) that the state, and finally the federal government, should be present only as contributors to these organizations. In no other way was it possible to eliminate politics and corruption, secure economy, and at the same time maintain the important spiritual element that these were neighbors helping their neighbors. In no other way could supply be adjusted to personal need and community standards.⁸

Similarly, Hoover condemned the transfer of income to farmers under acreage allotment and subsidies as destroying their independence. Farmers, he believed, could best survive by cooperative activity and government credit. He opposed the National Industrial Recovery Act on the ground that it substituted “regimentation” for cooperative activity. He regarded the Tennessee Valley Authority as socialist, substituting government ownership, generation, distribution, and sale of electric power for private ownership and operation. He wanted to see the “disloyal demagogues” of his party purged, meaning the western Progressives—George Norris, Hiram Johnson, Robert La Follette Jr., and Bronson Cutting—while winning over to the GOP those Democratic Party conservatives such as Carter Glass, James Warburg, and Lewis Douglas who opposed the Roosevelt policies. The result, the ex-president hoped, would be a two-party system based on clearly delineated ideological lines, with the GOP committed to the prevention of dictatorship, which he defined as the centralization of power in the federal government.

Hoover opposed the reciprocity program fostered by Secretary of State Cordell Hull on the ground that it would induce job losses in the United States and represented a transfer of authority from the legislative to the executive branch. When it appeared in the early 1930s that another European conflagration was a distinct possibility, he was determined that the United States should keep out of it. He insisted that the Congress reassert control of the national agenda, which it had abdicated to the executive branch during the domestic emergency and in foreign affairs.⁹

When Hoover proposed a statement of principles for the GOP, drafted in the fall of 1933, he ran into a brick wall. The initial blow came from the party’s eastern internationalists, a small group largely situated in downtown Manhattan and relatively powerless in the nationalistic 1930s. Former secretary of state Elihu Root agreed that the western Progressives constituted a hostile bloc within the party. But the GOP, he insisted, “had abused the tariff,” a clear allusion to the party’s high-tariff policies in the 1920s, Hoover’s signing of the Smoot-Hawley Tariff, and his protectionist views. Henry L. Stimson, Hoover’s secretary of state, soon added his own demurrer to the ex-president’s economic agenda. He did not oppose FDR’s experiment in inflation, he observed, noting that many of his acquaintances in the financial district agreed. In the event, he supported the concept that recovery depended on increased price levels. This required a cheaper dollar in relation to gold in order to achieve reflation to pre-Depression price levels and recovery, a position Hoover abhorred as immoral and unprincipled.¹⁰

Aware that he needed to build support well beyond his base in Southern California’s reactionary Republican politics for a rematch with Roosevelt, and that a return of the Midwest to the GOP fold was critical to the party’s aspirations for 1936, Hoover met in late September 1933 with Chicago’s Strawn group, some forty to fifty bankers, food processors, economists, and publishers hostile to the New Deal recovery program and led by Silas Strawn, senior member of the law firm of Winston, Strawn & Shaw and a power in the Windy City’s financial community. (Strawn was also a powerful figure in the state’s party structure, the American Bar Association, and the United States Chamber of Commerce.)

The Strawn cohort, which supported Hoover’s presidential ambitions and promoted his ideological views, launched a movement among conservative economists aimed at preventing Roosevelt from depreciating the dollar by reducing its gold content. By devaluing the dollar, Roosevelt aspired to stem the deflationary spiral by inducing a rise in prices, spending, profits, and business investment. Hoover claimed instead that both Great Britain and the United States should commit to gold, each nation purchasing the yellow metal in the open market at the established legal price of $20.70 and £4.2s.¹¹

His policies, Hoover claimed after defeat in 1932, had turned around the Depression, whereas Roosevelt’s had proved destabilizing. The time had come “to fix the value of the dollar today, make it convertible in gold payable in coin over the counter,” resulting, he believed, in a quick recovery. More likely it would have created a still more disastrous deflationary cycle. It is fitting in this context to note, by way of contrast with Hoover’s analysis, the abandonment of J. P. Morgan partner Russell Leffingwell’s faith that the gold-exchange standard would restore price stability and promote recovery.¹²

Following World War I, Leffingwell regarded a return to London’s management of the gold-exchange standard as critical for improvement from the dislocations visited by the European conflict. Indeed, Morgan & Co. supported the United Kingdom’s return to gold at a prewar parity of $4.86 in April 1925, or a currency redeemable at a fixed value, on the basis of the City of London’s prewar role as banker to the world and its willingness to exchange pounds into other currencies in relation to gold. In order to assist the British Treasury in its return to gold, Leffingwell proposed Morgan & Co. leadership in a banking syndicate that would provide a $300 million credit for two years. This enterprise was also based on a cheap-money policy of the Federal Reserve banks intended to protect London’s gold stock. Presumably, according to Leffingwell, the resumption of the prewar gold-exchange system would foster world trade and, if need be, could be defended by deflationary mechanisms such as lowering wages or the dole as well as by tolerating reduced employment in England. If successful, the Wall Street banker believed, the Bank of England management would fend off the “monetary nostrums fostered by Keynes in England and Yale’s Irving Fisher in America as well as by politicians.”

The system worked well as long as there was minimal pressure on Britain’s gold reserves. It collapsed in mid-1931, when The Macmillan Report revealed the extent of sterling balances convertible to gold and The May Report claimed the existence of unacceptable budget deficits incurred by the Labor government. In Se...

Table of contents

• Cover
• Half title
• Title
• Copyright
• Dedication
• Contents
• Preface
• Introduction
• 1. Herbert Hoover and the Ark of the Covenant
• 2. Landon of Kansas: The GOP as Corporate Shell?
• 3. Forging an Antistatist Consensus
• 4. The GOP and the Prelude to War
• 5. Party of the Bourbons
• 6. The Interloper
• 7. Republican Resurgence: Taft
• 8. Challenging Isolation: The Provocateur, the Patrician, and the Mediator
• 9. Willkie’s Legacy and the GOP
• 10. Sources of Modern Republican Party Ideology
• Notes
• Index