Fear Itself (40 page)

V.

T
HE DRAMATIC
reorganization of American capitalism was not limited to domestic policy. In 1934, Congress passed the Reciprocal Trade Agreements Act (RTAA), a law that had been insistently advanced by the country’s new secretary of state, Tennessee’s Cordell Hull. A Wilsonian progressive and an active supporter of the South’s racial system, he had championed lower tariffs during his service in the House, from 1907 to 1930, and in the Senate since 1931. Like most southern members with progressive commitments, he had long thought that high trade barriers “shifted the burden of financing government from the rich to the poor; concentrated wealth in the hands of industrialists influential enough to win favorable treatment for their products; and worked not as an effective source of revenue,” but, “by reducing trade, actually lowered revenue.”
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Moreover, as he told Congress in 1934, he was convinced that the dramatic decline of some 70 percent in American exports and imports from 1929 to 1933 had caused massive reductions in consumption and in the country’s standard of living. During this period, America’s share of world trade also had fallen, from some 12 percent to 9 percent of global imports, and from 14 percent to 11 percent of exports.
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Prior to the passage of RTAA, tariffs had been set item by item in Congress. This process was dominated by special-interest lobbying and was prone to trades among legislators who sought to protect industries in their districts.
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As a result, the institutional process tended to favor ever higher excise rates, especially when Republicans were in power. During the post-Reconstruction era, as the country underwent rapid industrialization, Republicans sought to protect domestic business from foreign competition, while Democrats, more oriented to the concerns of farmers and consumers, tried to keep them down and find alternative sources of revenue. Republican sectional and economic interest tended to gain, and Democratic sectional and economic interests to lose, when tariffs went up.
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When Republicans controlled the legislative process rather more than Democrats in the late nineteenth and early twentieth centuries, foreign economic policy became increasingly protectionist. The McKinley Tariff of 1890 and the Dingley Tariff of 1897 had significantly raised rates at a time when such levies were still the country’s main source of revenue.

With the ratification in 1913 of the sixteenth Amendment to the Constitution, authorizing the federal government to levy an income tax, questions about how to regulate imports and exports primarily became matters that placed contending economic interests and party coalitions in a policy competition to set desired levels. Revisions of tariffs when Republicans controlled the White House and Congress in 1922 raised rates on 88 percent of imported goods, reversing the policy of a Democratic government that had lowered rates on 91 percent in 1913.
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The 1930 tariff act, named for Reed Smoot, a Utah Republican senator, and Willis Hawley, a Republican representative from Oregon, covered more than twenty thousand items and produced the highest tariff rates in American history.
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Smoot-Hawley “was enacted at or near the peak of a great era of Republican supremacy, by a Congress in which this party had substantial majorities in both houses, following a presidential election in which Mr. Hoover defeated his Democratic opponent by more than 6,000,000 votes.”
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During the 1928 election, when the country turned its back on the Catholic candidate for president, New York governor Al Smith, the Republicans gained thirty seats in the House and seven in the Senate. With huge Republican majorities of 267–167 and 56–39, and with the Democratic Party largely reduced to its southern, anti-tariff, representation, Congress passed the new tariff schedule by overwhelmingly partisan votes (it garnered only seventeen Democratic votes in the House and five in the Senate).
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The last of the “American System” Congress-centered protective tariff acts that sheltered America’s huge domestic market from overseas competition, the Smoot-Hawley statute became infamous for having triggered a tariff-raising tit-for-tat process that raised barriers to world trade at just the moment when the global collapse of capitalism begged for the reverse.
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When Smoot-Hawley was considered, most of the debate was taken up with detailed discussion of the economic conditions in particular industries, including sugar, glass, metals, lumber, chemicals, leather, and textiles. These issues, and broader questions about protectionism, generated heated debate as well as intensely partisan votes. The most negative voices were southern and Democratic. They objected to the way tariffs raised prices and represented partial, not national, interests. Oklahoma’s Jed Johnson remonstrated how lumber, wool, and the “gigantic steel and metal industry,” with “little or no competition,” and thus with monopoly pricing power, had made the case for protection. “The American public is going to demand to know just what constitutes a ‘case’ in the minds of these New England gentlemen who proudly boast of the authorship of this infamous tariff bill that is conceived for the purpose of adding additional millions to the coffers of the greedy industries of the East.”
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Missouri’s Ralph Lozier echoed this populist position by seeking to reveal how “this act has enriched the manufacturing classes beyond the dreams of avarice.”
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Within the torrent of such southern objections, the most sustained and analytical argument for freer trade came from Cordell Hull. Five months before the Wall Street crash, he presciently projected that the law’s “extreme protection system” would build agricultural and petroleum surpluses that could not find foreign markets. “Kept at home,” he warned, “there would be depression and panic unrivaled in human history.”
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Four years later, with Hull at the State Department crusading for lower rates, and with Democrats commanding a unified government, the New Deal undertook to change the institutional game significantly by removing Congress from the details of tariff setting. Sending a request to Congress for a new set of arrangements to jump-start American trade and revive depressed export industries, President Roosevelt took up Hull’s idea that the capacity to set rates should shift to the president, who would be granted advance authority to negotiate trade agreements with other countries. Rather than set rates unilaterally, the legislation envisaged a mutual process of tariff reduction based on negotiated bilateral trade agreements. That would make it harder for subsequent Congresses to undo free trade deals, since tariffs no longer would simply be a domestic political matter but would be based on international bargains that would be costly to unravel. Hull’s message to Congress underscored how the world’s democracies and dictatorships had placed just such authority with their executives, and how, without such an arrangement, the United States faced the world without being “able to protect its trade against discriminations and against bargains injurious to its interests.”
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Such a process, he maintained, offered “the only feasible and practicable step” to revive American trade, a step required to get capitalism moving again.
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Technically an amendment to Smoot-Hawley, this statute heightened the chances that freer trade would prevail by shifting the political logic. Protectionist logrolling became more difficult, and the costs of high tariffs became more transparent, as they were no longer dispersed across hundreds of different constituency districts.
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Since lower rates for imports were tied to more access to overseas markets, the change was palatable across the Democratic Party, even for recently elected members of Congress who came from previously Republican industrial districts with large working-class populations.
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Not surprisingly, southern Democrats dominated the positive side of the debate on the Hill. They condemned past practices that, as Lozier argued, had converted “the halls of Congress . . . into a marketplace” in which “so many votes for a tariff on this product were exchanged for so many votes for a tariff on another product.”
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They talked about the need for foreign markets, and the problems generated by trade wars; complained how farmers, and southern agriculture in particular, had suffered under Republican trade policies that raised the price for imported farm machinery while making it harder to sell cotton, tobacco, and rice overseas; and echoed Hull, as Representative Claude Fuller of Arkansas put the point, in arguing that international commerce “on a fair, mutual, and profitable basis” is both a privileged means “in the restoration of prosperity” and can “serve as a great civilizer and peacemaker.”
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They also fervently endorsed the new procedures, which Doughton argued were necessary to counter how “practically every other country in continental Europe, as well as England and her major dominions, and several of the countries of South America have vested authority in the executive branch of their respective governments to negotiate reciprocal trade agreements.”
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The winning Democratic trade coalition was led by southerners. In his classic work,
Southern Politics in State and Nation
, V. O. Key Jr. noted how during the full 1933–1945 period he studied, “southern Democrats, on the average, voted 94.8 per cent for trade agreements, while on the average only 84.1 per cent of nonsouthern Democrats supported the program. On the other hand, on the average, 86.6 per cent of the Republicans opposed.”
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When the RTAA first passed in 1934, by a 57–33 margin in the Senate and a 271–111 margin in the House, Democratic Party solidarity was high across the board. Voting together, in the face of nearly unanimous Republican opposition, southern and nonsouthern Democrats stood tall together to support the global face of the radical moment.
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VI.

C
OMMENTING ON
the New Deal’s remarkable legislative productivity during the Seventy-fourth Congress, Lester Dickinson, an Iowa Republican senator, complained in February 1936 that “more legislation of far-reaching social and economic consequence was enacted last year than in any previous session.” For liberal constitutional governments, he lamented, this was “a performance never equaled in the history of legislatures since those rump Parliaments which, under the Stuarts, so seriously jeopardized English liberty in the seventeenth century.” Looking ahead, he anticipated Democratic Party gains in the November election, and worried that the New Deal seemed poised to advance ever more decisively.
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The landslide reelection in 1936 of Franklin Roosevelt, who carried forty-six of forty-eight states, helped generate remarkable majorities for the Democratic Party in Congress. The results reduced Republican representation to a mere eighty-nine seats in the House and sixteen in the Senate. With the one-party South intact and with the Democratic Party’s gain of five seats in the Senate and twelve in the House, where it now controlled fully three-quarters of the chamber, the largest majority for any party since Reconstruction, Dickinson’s worst-case scenario seemed confirmed. As the Seventy-fifth Congress was about to convene, the
New York Times
’ congressional reporter, Turner Catledge, commented, “So large is the Democratic majority in the new Congress that, at least at the start, President Roosevelt’s word will be law.”
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Furthermore, just as Roosevelt was proposing to enlarge the Supreme Court in order to unblock the barriers it had placed in the path of assertive federal action, the Supreme Court validated a state of Washington minimum-wage law in March; it decided to confirm the constitutionality of the Wagner Act in April, and, in May, it upheld the Social Security Act. That spring, there was little reason to think the trend of assertive New Deal lawmaking would weaken.

The success proved illusory, ephemeral at best. Even though no barrier, legislative or judicial, seemed to stand in the way, the trend of legislative achievement began to falter. Democratic unity proved unsteady. The South began selectively to withdraw its support. Despite the continued growth of the nonsouthern wing of the Democratic Party,
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it did not control majorities. These required either Republican or southern Democratic votes, the latter, of course, being the more likely. Over the years that spanned the beginning of Franklin Roosevelt’s second term in March 1937 to the start of the country’s participation in World War II in December 1941, such southern support became more patchy and less assured. Danger signs appeared in the very first session of Congress after the massive electoral victory of 1936, when the level of opposition to New Deal proposals within the Democratic Party doubled, a trend led by a growing sectional divide.
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As it turned out, 1936 was a particularly good year for southern Democrats, who continued to dominate the region. Alabama senator John Bankhead was returned with 87 percent of the vote; Joseph Robinson, in Arkansas, with 82; Carter Glass, in Virginia, with 92. In Delaware, a twelve-point victory placed what had been a Republican seat in the hands of Democrat James Hughes. Claude Pepper won reelection unopposed in Florida. So did Richard Russell in Georgia, Pat Harrison in Mississippi, and Allen Ellender in Louisiana. Across the South, only a single Republican, John Townsend Jr. of Delaware, remained in the Senate.
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On the other side of the Capitol, exactly the same distribution of seats was obtained by southern Democrats in this election as in the prior two. Across the region’s seventeen states, 141 Democrats continued to overwhelm 4 Republicans (one each from Kentucky and Missouri, and two from the hill country constituencies in Tennessee).

After the new Congress assembled, more than one issue stressed the Democratic Party’s sectional alliance. Taxes sometimes proved divisive. So, too, did the distribution of relief, utilities regulation, housing issues, payments to veterans, and, especially, Roosevelt’s proposal to change the composition of the Supreme Court and the larger federal judiciary, lest it continue to negate New Deal statutes. Some southern members, especially those, like Carter Glass and Josiah Bailey, who had never been New Deal supporters, were persuaded that the president’s successful courtship of northern black voters during the 1936 campaign portended a recast judiciary, one that would enhance the prospects for successful civil rights litigation. Joining Republicans in strategy meetings to plan the proposal’s defeat, they induced other southern colleagues, including New Deal loyalists, to break with the president at a moment that coincided with the return of antilynching legislation to the congressional agenda.
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