New Deal, New Life

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New Deal, New Life

By Keith Hutchison

The Nation

Washington, February 10

Ever since the elections editorial writers have been proclaiming that the New Deal is on the run. It has, they declare, lost the advantage of the offensive and faces a future of gradual disintegration ending in resounding defeat in 1940. Even some of its best friends, discerning an alarming loss of vitality, have assumed a bedside manner.
After a few days in Washington these fears seem to me a trifle premature. I have found few signs of defeatism many of a revival of the fighting spirit. The consequences of the election are not indeed being minimized. But it has not caused demoralization; rather it has shaken the lethargy induced by six years of intensive work in a semi-revivalist atmosphere, and has led New Dealers to make a realistic assessment of their position and their future.
In the last few weeks the President and his most trusted lieutenants have been carefully weighing the political situation, reviewing their troops, calculating their assets and liabilities. The actions of the coalition of Republicans and tory Democrats since Congress convened have make it clear that the battle is joined for control of the Democratic convention of 1940. The New Dealers have no illusions about how stiff that battle will be, but they believe their chances of victory are good. In any case the must fight or see much of what has been accomplished since 1933 go into the discard.
Mr. Roosevelt got in an early blow by his appointment of Messrs. Hopkins and Murphy. It was his way of picking up the gauntlet thrown down by the Garner coterie. More than that, it was a rallying signal for his followers which, I am told, has already worked wonders in restoring morale. Men close to the President spoke of the importance of the appointments as a step toward integrating the inner circle of New Dealers into a cohesive body prepared to see the political fight through to the bitter end. Hopkins and Murphy are leading lights in this body and together with Ickes its outstanding representatives in the Cabinet. Some of the other Cabinet members, Secretaries Perkins and Morgenthau for instance, while regarded as absolutely loyal to the President, are inclined to stand aside from the political hurly-burly. My informants preferred not to identify too closely a third group or to analyze too minutely their allegiances.
Outside the Cabinet there are of course hundreds of people in Washington who might broadly be termed New Dealers. Of these a comparatively small number-heads of departments and advisers—belong to the President's fighting phalanx. The vast majority are technicians of all kinds, thoroughly devoted to the aims of the New Deal but intent on the definite work they are doing. They do not participate in politics nor are they expected to; their contribution lies in insuring that the activities of the government are carried out as smoothly and efficiently as possible.
The general plan of campaign laid down by the President and his staff may be discerned in his messages to Congress. The two things most emphasized were the part the United States must play in international affairs and the importance of the spending policy until the national income is considerably increased. Mr. Roosevelt can hardly be accused of dragging foreign affairs into the foreground: Hitler has made it inevitable that a large part of our attention should be concentrated on them. But the international tension may prove to be an important domestic asset. Mr. Roosevelt is the one democratic leader who has really stood up to Hitler and Mussolini. We may not grant him an unblemished record in this respect, but against a background of Chamberlains and Daladiers he appears something of a giant. There is a growing feeling throughout the country, among all classes, that the challenge of fascism must be actively met. By making himself the spokesman of that sentiment Roosevelt will certainly add to his political strength.
There was little said in the message to Congress about new reform legislation. New Deal strategy for the next two years requires an emphasis on recovery rather than on reform. If victory is to be achieved in 1940, there must not be another economic landslide such as occurred in the second half of 1937. That débâcle was halted and a new recovery movement launched when the President took steps to make credit still easier and reverted to deficit financing. Ignoring bodeful prophecies of inflation he took the position that increased debt is less wasteful of the national heritage than idle labor and idle plant. For plant deteriorates even when at a standstill: the man power unemployed today is lost forever. So long as private enterprise is unwilling or unable to make use of the idle savings which are the counterpart of this idle capacity, the government must take up at least part of the slack. That was the essence of the President's budget message. He refused to reduce the deficit and made certain that if appropriations were cut the onus would rest squarely on Congress.
First round if the battle on this issue went apparently to Congress when it carried the largest cut it dared propose in the WPA deficiency appropriation. But it may prove a Pyhrric victory, for confronted by country-wide protests the Senate added an amendment inviting Oliver Twist to come back and ask for more. And Oliver has very promptly taken the hint. It remains to he seen whether the Congress majority will take responsibility for dropping a million men from the WPA rolls on April 1.
In spite of all the sound and fury about economy, New Deal strategists do not expect that in the end this year's budget will be seriously slashed. There will be many furious contests, but each time Congress really looks over the brink of the economy abyss its instinct will he to draw back, fearful lest it break its political bones. After all, in their anxiety to get back last November the Republicans incurred a good many commitments hardly compatible with balanced budgets.
While stressing the central importance of government spending in the promotion of recovery, the Administration is making greater efforts than before to persuade industry to do its share. Harry Hopkins from the moment he took over the Department of Commerce has been engaged in talks with business men designed to prove that neither he nor the President is equipped with horns and tail. According to reports, these conferences have been going more smoothly than might have been expected. The main obstacle is the tendency of business to dig in on the line "We must have confidence," and when asked what the price will be, to pitch it exorbitantly high.
The Administration apparently is prepared to make concessions. The deal with Wendell Willkie over the sale of the Tennessee Power Company to the TVA is an instance. Having established before the Supreme Court the right of the government to compete with private utilities, the Administration settled with Mr. Willkie on generous terms. Perhaps too generous. But it may be worth while if the utilities can thereby be encouraged to put through a big new investment program. The time for expansion is ripe, with power output creating new records and the magnates wondering how long, in their own interests, they can keep up the pretense that they lack the confidence to set about building new plant.
Business circles, it is interesting to note, are decidedly less hostile to the new Secretary of Commerce than are some of the politicians. They are giving him credit for ending the quarrel with Willkie and are hoping he may be open to further bargains. This hope is not Without logic. With the Administration forces massed for attack on Capitol Hill, sorties against Wall Street might prove a tactical error. Better, it may be argued, to give some ground in that direction, provided a solid contribution to recovery may be had in return. Compromise is essential to the art of politics, and no politician can be blamed for resorting to it particularly when engaged in a life-and-death struggle. But compromises are bad if they are unevenly balanced and fatal when they involve the sacrifice of major principles. Friends of the New Deal will hope that Roosevelt and Hopkins in conferences with business men will remember that Munich agreements only increase "demands for appeasement."
The President has on occasion made political swerves not even justified in terms of expediency. Playing ball with Moor Hague did not prevent his losing New Jersey at the last elections, while it disheartened his supporters and lost him many votes elsewhere. Surrender to Catholic pressure in the matter of the Spanish embargo is another example. There can he no doubt that he himself regards the results of a Franco victory in Spain with dismay, but he could not muster the courage to tell a powerful minority that they were putting the supposed interests of their church before those of their country.
The President has important assets which can be capitalized between now and 1940, and there is no need for him to water his stock by paying undeserved bonuses to people like Hague. He still commands an immense following in the country at large and a huge majority among the rank and file of the Democratic Party. Of course when it comes to conventions political machines count more than political masses. It is rather generally assumed that in 1940 Mr. Farley and the important part of the Democratic machine which he commands will be used against any New Deal candidate. I am informed on good authority that this is by no means certain. The New Dealers do not number Farley among the deserters even though they are not sure of his support. They are convinced that he remains devoted to the President and therefore hope he can be persuaded to come into camp.
Among the chief dangers to the New Deal in the fight ahead—a danger which is not being minimized—is the growth of a spirit of intolerance, fostered, like the opposite growth of anti-fascism, by the heightened tension abroad. This spirit is being organized in Washington under the auspices of Mr. Dies. There is every reason to suspect that, whatever small fry the Dies committee may attempt to bag on the way, the quarry it is stalking is in the White House. That is why, according to the story going around, the Republicans have proposed him as an honorary member of the G. O. P.—an offer turned down on the ground that it would ruin him in Texas.
The kind of political garbage the Dies committee is peddling has its most poisonous effects among the farmers and the lower middle classes. These are groups which the New Dealers recognize they have largely lost. They have hopes of recapturing them, but the fulfilment of that hope lies in a considerable further measure of recovery. Thus whichever way we turn in the political maze we find ourselves coming back to the economic problem. If the New Deal is to win a new lease of life in 1940 it must not only prevent another recession but hoist the national income to a considerably higher mark. Consequently, whatever strategic retreats it may make it will hold the budget salient at all costs, convinced that if the enemy can destroy that the whole line must be smashed.