Chapter Nine
“I wish for you a most successful administration,” outgoing President Hoover wrote to Roosevelt the morning after the election. “In the common purpose of all of us I shall dedicate myself to every possible helpful effort.” Whether Hoover’s expressed sentiment was genuine or de rigueur, the two men feigned cooperation for a few weeks during the bleak winter of 1932. Given Hoover’s ingrained belief that Roosevelt’s election signaled the downfall of America, his congratulatory note was seen by Roosevelt’s forces as disingenuous at best, calculating at worst, although Hoover allies vouched for his sincerity. Roosevelt’s response to Hoover—revised and reworked numerous times with an eye toward ambiguity and legacy—indicated the delicate position in which the president-elect found himself. “On the subjects to which you refer, as in all matters relating to the welfare of the country, I am glad to cooperate in every appropriate way, subject, of course, to the requirements of my present duties as Governor.”
Then, within a week of Roosevelt’s election, Hoover sent a long telegram to the governor’s mansion in Albany imploring—actually challenging—Roosevelt to embrace Hoover’s economic recovery program for the good of the country. The unprecedented overture by a defeated president to his rival “rang alarm bells” in Roosevelt’s instinctive mind. Hoover would forever claim that he was courteously and graciously including Roosevelt in the continuum of government. But Roosevelt saw the gesture as a cunning attempt, masked in altruism, to ensnare him in Hoover’s failed policies, which, in Roosevelt’s mind, went to the very heart of their political differences on economic relations. Hoover had consistently blamed the financial crisis on European developments and foreign instability, which Roosevelt had roundly mocked as utter nonsense during the campaign, calling it “the boldest alibi in history.” In contrast, Roosevelt placed full responsibility on the American system. “The bubble burst first in the land of its origin—the United States,” he contended. Roosevelt saw the domestic economic condition as the single gravest issue confronting the nation and saw the thrust of the recovery as putting America back to work—not to focus on events in foreign countries.
The core of Hoover’s entreaties centered on the question of war debts—“the tar-baby of American politics,” as historian David M. Kennedy described the money that the United States had loaned to Great Britain, France, and Italy during World War I. “To touch it was to glue oneself to a messy, intractable problem that had defied the genius of statesmen for a decade,” Kennedy wrote. These notes were coming due, and Europe, never having fully recovered from the war, had fallen into a deep economic depression. The Allies were in varying stages of default on their loans, and Great Britain was threatening to suspend payment of its ninety-five-million-dollar installment, due December 15, 1932. While Congress and most Americans predictably favored holding the Europeans liable for their financial obligations, many intellectuals, financiers, and economists advocated forgiving the war debts in order to stimulate the international economy. Integrally tied to the debt issue was the question of whether every nation should return to the gold standard—in simplistic terms, a method requiring each monetary unit throughout the world to be backed by a fixed quantity of gold bullion, thereby stabilizing international currency exchange rates. Indeed, the system had worked for the last half of the nineteenth and early part of the twentieth century, but Great Britain had abandoned it in 1914 to finance World War I with treasury notes, which then forced several other countries off the standard.
Hoover strongly opposed cancellation of the debts and was so emotionally attached to gold that he once described it as a sacred substance “enshrined in human instincts for over 10,000 years.” For his part, Roosevelt had not yet formulated a policy on the war debt issue. As for the gold standard, Roosevelt repeatedly joked that he didn’t even know what it was—a remark that unhinged the humorless Hoover, whose biggest fear was that Roosevelt would abandon the gold standard and thereby destroy America.
If Hoover’s gambit “had all the appearance of a magnificent gesture of statesmanship,” as David M. Kennedy said in his magisterial Freedom from Fear, it “also contained sinister political implications.” Ultimately, Roosevelt came to see Hoover’s overture as a presumptuous power play and an effort to deflect blame away from himself, who, as president for four years and secretary of commerce for eight years before that, bore personal responsibility for the current disaster.
In any event, the pressure from Hoover had the unintended effect of prodding Roosevelt into deep analysis of the domestic and foreign policy issues that had only received perfunctory examination during the campaign. Ironically, Hoover’s not-so-subtle scheming sparked Roosevelt’s musings on what would become the New Deal. On December 22, 1932, Roosevelt diplomatically dismissed Hoover’s advances—though not without implying that he did not appreciate the lame-duck president’s “attempt to mousetrap him into agreement with the policies of a discredited and defeated administration”—and began in earnest his preparations for governing.
Cloistered with his advisers, Roosevelt began designing his program for recovery. “By March 4 next we may have anything on our hands from recovery to revolution,” Adolph Berle told him. “The chance is about even either way. My impression is that the country wants and would gladly support a rather daring program.” Even the habitually confident Eleanor wondered whether anyone could “do anything to save America now.”
As the nation slipped deeper into distress, Roosevelt was powerless to act until he was sworn in on March 4, 1933. The Twentieth Amendment to the Constitution had been ratified two months earlier, moving the presidential inauguration from March to January 20 of the year following the election. But since that amendment would not take effect until 1937, the old rules currently applied.
Some observers—contemporaneous journalists and later historians—found it cruel and calculating for Roosevelt to sit on the sidelines as the economy sank and the misery widened. Roosevelt “used Hoover as a foil,” wrote author Jonathan Alter, seeing the situation in the most Machiavellian terms. “He let the outgoing president hang himself—and the American economy—so that he could enter stage left as a hero … He understood that the lower Hoover and the country slid, the better he would look upon assuming office.” Even Moley, one of his closest advisers, ultimately took a similarly cynical view, later commenting that Roosevelt “either did not realize how serious the situation was or … preferred to have conditions deteriorate and gain for himself the entire credit for the rescue operation.”
But most of Roosevelt’s supporters thought his position unavoidable. Aside from that during the run-up to the Civil War, it was the most dangerous interregnum in the history of America. Roosevelt was convinced that Hoover was setting a trap for him—a suspicion confirmed when he learned that a Hoover cabinet member had said of Roosevelt, “We now have the fellow in a hole that he is not going to be able to get out of.” It seemed that Hoover, like Al Smith before, had grossly underestimated his adversary. As it was, Roosevelt decided to keep his own counsel and wait until he could grab the helm of a country rocking dangerously on turbulent seas.
In the short span of 150 years—from the American Revolution through the Civil War to the twentieth century—the democracy envisioned by the founding fathers was an evolving work-in-progress. As in the “Jeffersonian Era” and the “Age of Jackson,” the stakes were astronomical, the threats were both internal and external, and the perils were potentially fatal. The nation’s financial order had collapsed. Powerless, Roosevelt was relegated to the dugout while Hoover presided over the nation’s wallowing. Roosevelt could do nothing but watch as unemployment rose to seventeen million and thousands of banks and businesses failed. And that was just on the home front.
The global economy was disintegrating. Events in Europe and Asia signaled the inevitability of another world war. In India, Mahatma Gandhi was at the peak of his civil disobedience against the British occupation. Blood was flowing in the streets of Havana, where a dictator had suspended the Cuban constitution. People throughout the world, it seemed, were in varying states of unrest.
The impulse that had swept America to overwhelmingly elect Franklin Roosevelt, the upheaval that was shuffling the world order, and the global reassessment of philosophies and ideologies were all colliding as 1933 began. The year was a gateway to the modern half of the twentieth century, a turning point in America’s direction—in the powers of the presidency, in the relationship between the government and the people, and in the expansion of a new mass media.
It was a decisive moment in American history, one when the country, born fifteen decades earlier out of hope and idealism might have toppled.