Monday, April 23, 2012

A Slice of History

In Jonathan Alter’s history of FDR’s early years he describes the events beginning late in the afternoon of Friday March 3, 1933, the day before his inauguration, on his visit to the White House with outgoing president Hoover. There was no love lost between the two men, but the visit was a tradition. On his arrival he noticed Treasury Secretary Ogden Nash and other big wigs and knew that this was more than a social event, so he sent for Raymond Moley, a member of his “brain trust.” The ensuing conversation was heard by Eleanor Roosevelt through an unintended open door and related by her to several female reporters sworn to secrecy.   Late in that business day there had been an unexpected frantic run on the banks, which were already shut down in most states, but not in Illinois, Pennsylvania and New York. Both men knew that a devastating panic would likely result Saturday morning unless banks in these states were closed. Hoover wanted FDR to publicly join him in approving their closing. Roosevelt’s response was “like hell I will.” He told Hoover to do as he wished while he was president and that he, FDR, would declare his own “bank holiday” on Monday.   The upshot of this standoff was that unless something was done in the wee small hours of the morning the banking system would likely have completely collapsed. The day was saved by members of both staffs, acting on their own, waking the governors of these three states, two of whom were in Washington for the inauguration, and having them close the banks that morning.   I mention this not to take either man’s side in their disagreement, but because I find it a fascinating slice of history that shows the even greater depths to which three years of Hoover’s handling of the Depression might have led us were it not for the heroic efforts of subordinates. FDR’s first seven years were no picnic. But most historians would agree that they were a significant improvement on Hoover’s last three. What I also find telling is that the Depression ended with the national armament following the fall of France in 1940, an expense that roughly half of Americans at the time thought extravagant and unnecessary.   The contrast between Hoover’s and FDR’s reaction to hard times is well reflected in our political parties today. Republicans, as Hoover, want to cut expenses that benefit lower and middle income people and reduce taxes, a boon to the rich. Democrats want to prime the pump with investment or stimulus as FDR did in 1933 and as Hitler eventually forced us to do in spades.   It can be argued that ten years of our history do not a policy make. But we should consider that conditions and their causes then were strikingly similar to today’s and the direction of the first three was steadily downhill, while the last seven moved us a long way towards recovery. I see this perspective as a valid and strong argument against those who claim that government is our enemy.

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