The Private Funding of Affairs of State
Herbert Hoover, who had been one of the great spokesmen of voluntarism during the First World War, sought to make institutions of philanthropy full participants in the “compound republic,” as James Madison characterized the nation and its different levels of government. In formulating policy as secretary of commerce from 1921 to 1928, Hoover sought technical support from foundations and think tanks; in directing disaster relief, he orchestrated the work of the Red Cross, community chests, and other institutions of mass philanthropy. Hoover expanded his experiment in federally directed philanthropy when president of the United States in an effort to confront the large-scale unemployment and poverty facing the nation at the onset of the Great Depression. There his attempt to integrate philanthropy into the federal mix proved inadequate. It collapsed under the sheer scale of what was needed and under the pressure of conflicting visions of social justice.
In the process, though, Hoover set in motion an enduring debate on the role that philanthropy should play in affairs of state. Should philanthropic institutions take part in governmental decision-making or governmental actions or both? Conversely, to what extent should the federal government enlist philanthropy in pursuing its ends? Could private partners maintain their autonomy from government when emergencies arose and yet follow Washington’s guiding hand? Hoover’s experiment is extremely important because he was able to turn institutions of civil society, from philanthropic foundations to community organizations, into instruments of the executive branch while calling on them for voluntary action. Hoover wanted at once to control and also to stimulate philanthropic institutions’ initiatives. His was an idiosyncratic synthesis of authoritarianism—in its will to subordinate citizens’ organizations to executive authority—and voluntarism—in claiming merely to channel the flow of voluntary energies to the collective good. In partnering with philanthropy, Hoover fostered a mixed political economy that enlarged the federal government’s reach without formally reorganizing it.
Previously only state and local governments had supported philanthropic institutions. In the New England towns of early America, government and eleemosynary institutions were organically coupled. In eighteenth-century Philadelphia, Benjamin Franklin counted the matching (or joint) grant among his inventions. With his persuasion, the General Assembly of Pennsylvania passed legislation to house his private Library Company of Philadelphia in the State House, as well as to give land to the Academy he had founded. In nineteenth-century New York, Tammany politicians diverted the public treasury to charities, hospitals, and orphanages, expecting the immigrant vote in return.
But the federal government had previously stayed at a safe distance from such arrangements. The Smithsonian Institution stood as a notable exception, and here Congress had hesitated for a long time before accepting Smithson’s bequest. In the 1830s and 1840s, John Calhoun was among the politicians who argued on constitutional grounds that the federal government should not broaden its mandate by taking on the added responsibility of running an institution of knowledge or, by extension, any charitable institution. The debate lasted for two decades. The federal government did not want to go into welfare either. In 1854, President Franklin Pierce vetoed a bill that Dorothea Dix had advocated and Congress had passed that authorized the federal government to fund institutions for the deaf and insane. The bill would have put the federal government on the slippery slope to supporting private charitable institutions.
What President Hoover did in fostering a partnership between philanthropy and the federal government was therefore new, but it turned out to be short lived. Hoover’s hopes that charitable organizations might provide enough relief to get the country through the growing Depression proved illusory. To provide Americans with a lasting safety net, President Roosevelt changed course. Roosevelt established a clear separation between publicly and privately funded action. By increasing federal authority over state and local governments, he went so far as to sever their traditional connection with philanthropy. But the partnership between government and philanthropy to address the large issues of job security, welfare, and even racial integration had its supporters and did not so easily disappear. It returned, albeit in a different form, in the Great Society of the mid-1960s—forty years after Hoover had first attempted it.
Hoover’s No-Cost Federal Governance
Hoover was called a “food czar” for his work during World War I. Success in persuading so many Americans to give money and volunteer time to assist the victims of war gave him an unswerving confidence that civil society, with strong governmental guidance, could to a significant degree alleviate national and international disasters. Hoover was optimistic that the successful spirit of mobilization that he had tapped during World War I could be replicated during peacetime and, moreover, that it could then be applied not only to humanitarian emergencies but also to peacetime issues, to promote economic progress and improve standards of living.
Before President Harding named Hoover as commerce secretary, the cabinet post had been only a part-time position.1 Hoover made it a much bigger job from which he launched his experiment in the large-scale partnering of the government with the philanthropic as well as the business communities. He extended to the new philanthropic institutions the “cooperative committee and conference system” (through the federal encouragement of trade associations), which he was simultaneously developing with business, and which historian Ellis Hawley has aptly labeled the “associative” state.2 Hoover declared in 1920 that while he was not “a believer in extending the bureaucratic functions of the Government,” he was “a strong believer in the Government intervening to induce active cooperation in the community itself.” That same year in a commencement address at Swarthmore, he told students that he wanted to draw upon the “vast sense of national service and willingness to sacrifice” he had encountered during the war.3
Hoover was genuinely committed to the traditions of localism and private initiative. To him, concerned citizens earned their democratic freedom by governing themselves at the local level. In a phrase he could have borrowed from Alexis de Tocqueville, Hoover argued, “Where people divest themselves of local government responsibilities, they at once lay the foundation for the destruction of their liberties.”4 At the same time, Hoover believed that only the federal government could orchestrate on a national scale a creative synthesis of the many overlapping philanthropic programs. In his short book on American Individualism published in 1922, Hoover argued his case for developing “a large field of cooperative possibilities.”5 Cooperation was always Hoover’s preferred word—and he stretched the meaning of it considerably over the course of his career in public service. Hoover’s plan required that his private sector partners pay the bills and do the work but follow his orders. In addressing the St. Louis Advertising Club in 1920, he defined his strategy of no-cost federal governance as “a new basis of community action.”6 Essentially, philanthropies would become an expression of the executive branch, which would coordinate all matters of policymaking.
Hoover had entered public service at a time when foundations and think tanks, although in their infancy, were already influential. They had joined the federal government in a number of projects. President Theodore Roosevelt had asked the Russell Sage Foundation, the original general-purpose foundation, to fund his Country Life Commission, which had as its goal collecting first-hand information on farming conditions. William Taft had chosen Frederick Cleveland, who led the Rockefeller-funded New York Bureau of Municipal Research (one of the first think tanks devoted to governmental research), to head his commission to reform the national budget, which he had funded with a congressional appropriation. When President Wilson, fearing defections among Democrats, abandoned the project of reforming the national budget, Jerome Greene, then secretary of the Rockefeller Foundation, founded in 1916 the Institute for Governmental Research to keep the reform plan going.7 Hoover joined the board in 1918. The Institute was eventually renamed the Brookings Institution in 1927 to recognize its biggest funder.
Other influential think tanks were created in these years to address social, political, and economic problems and inform policymaking. Department store owner (and leader of the credit union movement) Edward Filene launched the Twentieth Century Fund in 1919 to investigate the needs of a mass consumption society. In 1920 AT&T statistician Malcolm Rorty and economist Nahum Stone created, with Commonwealth Fund support, the National Bureau of Economic Research, where Wesley Mitchell pursued his studies of the business cycles that proved so important to Hoover’s Commerce Department. In the arena of international affairs, Carnegie had set up the Carnegie Endowment for International Peace in 1910; a group of Versailles Peace Conference participants founded the Council on Foreign Relations in 1921. Hoover contributed to this institutional development by forming the Hoover Institution on War, Revolution, and Peace, a specialized collection of documents on the causes and consequences of World War I, in 1919 at Stanford, his alma mater.
From his cabinet post, Hoover turned to these think tanks for ideas and policy proposals. In one of his first acts as commerce secretary, he called on them to help American companies acquire new tools of economic analysis, effectively breathing life into the small field of labor statistics. Hoover convened twenty-five business, labor, agriculture, and nonprofit leaders to serve on the President’s Conference on Unemployment.8 This initial meeting of the working group was a formative moment in Hoover’s personal effort to work out an association with the nonprofit sector. Presumably, unemployment should have been an interest of the labor secretary, James J. Davis, but he had no such intention. A director general of the Loyal Order of Moose, Davis preferred to attend his lodge meeting rather than the ambitious conference launch of September 1921. The National Bureau of Economic Research and the American Statistical Association reported on figures and measurement techniques. Mary Van Kleeck of the Russell Sage Foundation and Bascom Little, head of Cleveland Community Chest, were the two prominent representatives from philanthropy.
There was plenty to do to expand the knowledge base of federal policymaking.9 After a nationwide strike of coalminers in 1922, Hoover asked the Russell Sage Foundation to develop a study of employment patterns of workers in European coalmines, especially in Germany, to generate comparative statistics. Hoover was curious also about another Russell Sage regional planning project that had brought together hundreds of experts to devise plans for orderly metropolitan growth. The Regional Survey and Plan for New York under the guidance of planner and life insurance executive Charles Dyer Norton was emblematic of Hoover’s associative outlook.10
Hoover also embraced big philanthropy’s agenda of supporting universities. As commerce secretary, he attempted to steer academic research efforts towards applied projects. Following the advice of National Research Council leaders Nathan Hale and Robert Millikan, he raised money from industry for research at universities to foster technological innovation.11 These efforts to improve the scientific performance of the nation dovetailed with those of Rockefeller Foundation president George Vincent, who had emerged from the war years with a similar belief in applied science and in the benefit of cooperation among diverse segments of society.12 The Commerce Department commissioned some studies, while others emerged independently from the new foundations. For example, the Guggenheim Foundation invested heavily in aviation safety, and Lindbergh’s endorsement gave these studies visibility. Hoover’s vision of cooperative possibilities was becoming reality.
At times, the partnership between the Commerce Department and nonprofit organizations became so critical that Hoover would not hesitate to absorb an organization into the department if he saw the need to do so. He requested and received congressional approval in 1921 to create a Division of Building and Housing, a field he considered “critically important to the health of the entire economic system,” as well as to individual families.13 The division relied much on the nonprofit organization Better Homes, Inc., which Mary Maloney of the magazine Delineator had created, for developing housing codes and launching educational campaigns. With Maloney limiting her activities in 1923 and Hoover fearing her departure, he integrated the nonprofit organization into the new division to maintain access to Better Homes’ volunteers, who distributed Department of Commerce materials in their communities.14
Hoover’s embrace of think tanks was necessarily politically tainted, as it was impossible to draw a clear line between a policy science designed to improve governing, which was what foundations and think tanks were supposed to develop, and the partisan debates in which they engaged. Hoover’s cooperative formula was, therefore, plagued by a continuous ambiguity between politics and policy, just as similar conflicts played out in tax courts and IRS review boards (see chapter 3). Hoover seemed oblivious to this conflict because he expected to have it his way, but there were tense moments. While he was serving as a trustee of the Brookings Institution, its Institute of Economics embarked on a series of reform proposals that called for lower tariffs. In response, Hoover denounced Brookings’s first president Harold Glenn Moulton as a liability to the United States whose policy recommendations, if listened to, were likely to cost the nation tens of millions of dollars. Hoover resigned from the Brookings board in protest of this “politicizing” of social science research. In turn, Moulton joined the ranks of many economists who favored freer trade agreements and later protested the passage of the Hawley-Smoot tariff in 1930.15 But even though politics sometimes derailed the effort, and policymaking proved elusive, Hoover’s pragmatic partnership between the federal government, foundations, and think tanks was a significant innovation.
The opportunity for Hoover to place not only foundation philanthropy and think tanks but also mass philanthropy firmly under the aegis of the federal government and to apply his new framework for philanthropy and American governance came unexpectedly in the administration’s response to the great Mississippi flood of 1927. The flood, which began on April 16, broke the Mississippi levee system in 145 places. The waters covered 27,000 square miles, caused over $400 million in damages, and killed 246 people in seven states. Arkansas was hardest hit, with roughly 13 percent of its area flooded. By May, the Mississippi River below Memphis, Tennessee, formed a vast watery ellipse up to sixty miles wide, across which farmers could row a boat without touching the ground. The Delta, also flooded, was the heart of a great plantation system where white landowners employed thousands of black sharecroppers. Until the water finally subsided in August, 700,000 people were displaced, including 330,000 African-Americans who were moved to 154 relief camps.
President Coolidge appointed his commerce secretary to serve as head of a Special Mississippi Flood Committee. Hoover’s performance in that role not only enhanced his reputation as a very able administrator, but also gave him a chance to return to the limelight again as a great humanitarian. That the Republican nomination might possibly be within his reach was not lost on him or anybody else.
The relief operation was Hoover’s best opportunity for calling American voluntarism to governmental service. As relief czar for a second time he implemented his vision of a federal chain of expertise and action, linking all levels of government to business interests, foundations, and social welfare and humanitarian agencies. Whether the federal government could serve simultaneously as both a participant in and an umpire of this arrangement, as Hoover wanted, was questionable. But the emergency was the occasion to try. If significantly successful, the relief effort might seal a new top-down federal formula where the top echelons of federal administration directed the entire chain of participants all the way down to communities.
As was the case during the war, Hoover induced institutions of mass philanthropy (most notably the Red Cross) and private social services to cooperate with local, state and federal agencies and also with business to provide immediate disaster relief. Hoover mobilized resources from the Departments of the Navy and War, the Treasury Department (especially its subsidiary, the Coast Guard), the Agriculture Department, and his own Commerce Department. To supplement federal action, Hoover called out and federalized National Guard units normally under the command of individual state governors. He then asked for help from state militias and state and local departments of health, as well as already operating special relief committees. From civil society, Hoover relied most heavily on the American Legion, local and national Red Cross chapters, and local citizens’ committees to bring relief to the displaced populations. Finally, he also involved large philanthropic foundations. The Rockefeller Foundation financed one hundred county health units, eighty-five of which its International Health Division had helped create in cooperation with the U.S. Public Health service during the early 1920s.16
Hoover was the great conductor. He established a clear chain of command to oversee housing the displaced populations. From Washington came the design of various programs such as credit corporations and plans for shantytowns. From nonfederal sources—local governments, business, and philanthropy—came money and execution.17 Banks and other commercial interests in the states provided as much as 50 percent of the various credit corporations’ capital. Under Hoover’s direction, local grassroots organizations secured sites for rebuilding, obtained the materials, and built the shantytowns.
Most importantly, Hoover put the Red Cross at the very center of this no-cost-to-the-federal-government relief effort. With its federal charter that gave the president power to appoint half of its central committee, complemented by grassroots financial support and a network of volunteers, the Red Cross became the best emblem of Hooverism. The previous year it had been designated the official relief agency in the aftermath of the 1926 Florida hurricane but had failed to meet its goals. Judge John Barton Payne (Wilson’s last secretary of the Interior), president of the Red Cross, had blamed Florida politicians for the failure. He accused them of downplaying the severity of the disaster in order to protect the state’s tourism and real estate, and held them responsible for the shortage of funds. With Hoover now in charge of the flood-relief operations, all this changed. Volunteers arrived in large numbers. Of 33,849 Red Cross workers, only 2,438 were paid by the Red Cross.18 Local communities organized benefits and special fundraising events at every opportunity.
The Mississippi flood-relief effort was the proof that a new associative federalism could work well enough in facing a major emergency. On the eve of the presidential campaign, one photographer caught the future candidate in Opelousas, Louisiana, beaming over newborn triplets named Highwater, Flood, and Inundation.19 It was good for the political ambitions of a compassionate engineer, whose successes in orchestrating relief during World War I and now in the great flood led him to the Republican nomination in 1928.
Hoover’s efforts in Mississippi, impressive in coordinating a powerful response to a natural disaster, also revealed the dramatic limitations of no-cost federal governance. There were naturally no provisions within disaster relief to alter the status quo of the Southern race hierarchy. Not considered were the harder questions of social justice. Municipalities counted on African-Americans to rebuild the levees. Southern planters expected them to be ready to return to their plantations as sharecroppers once the water receded. Hoover pushed the federal government to direct local and philanthropic efforts towards recovery, but he was unprepared to break the thick layers of racial prejudice encountered in the process. Neither was the Red Cross.20
Hoover was troubled enough to order a report on the condition of African-Americans in the camps. But for his large scheme of ordered cooperation to bear fruit, there needed to be significant agreement on the moral and economic goals of the recovery. Accordingly, Hoover acquiesced to Southern planters’ pressure on the Red Cross and the National Guard to keep sharecroppers from leaving for the North. Relief workers recruited locally actually prevented displaced sharecroppers from stepping on the train to Chicago. They enlisted them at gunpoint to work along the river to repair the levees. In the camps, they gave them only meager food and leftover medical supplies. Hoover seemed willfully blind to these issues. He dismissed much of the criticism of black treatment in the camps contained in reports that he himself had ordered from Robert Moton, the head of Tuskegee, and he absolved the Red Cross while chastising Moton for not being grateful enough.21
Even though Hoover had not defied the Southern planters and confronted the Red Cross on the race issue, he did have a tentative scheme of his own to improve race relations. Not surprisingly, he would involve philanthropy in a big way. In alleviating the abject conditions induced by the flood, Hoover had seen an opportunity for an experiment in reducing sharecropping in the United States by redistributing some of the land to the rural poor. The floods had bankrupted many of the valley’s planters, putting a glut of affordable land on the market. If it could be purchased, at least some African-American sharecroppers might be turned into landowners. For an advocate of social engineering, the flood was, perhaps, a long-awaited opportunity—Hoover’s chance to try out Jeffersonian democracy. “Over-riding all of this are the infinite values to good citizenship, stronger stability to the economic structure and the state that comes with a population who have a stake in the land,” he wrote.22 The plan was to work as follows: a private corporation would begin with capital of between $1 and $2 million to purchase plantations, subdivide them, provide tenants with equipment and working capital. Annual income on interest and repayments of mortgages would allow the program to expand to include more families. Hoover figured the corporation would begin with a thousand families, and new income from their mortgages would allow the program to add 180 families per year.
Hoover spelled out his plan in a July 1927 memorandum that he shared with only a “few acquaintances,” including Harvey C. Couch and L. O. Crosby, both Southern industrialists who acted as flood-relief administrators in Arkansas and Mississippi. Others in whom Hoover confided his ideas were Judge John Barton Payne of the Red Cross and Dr. Robert Moton of Tuskegee.23 Although it is unclear what role the Red Cross would have taken in such a plan beyond the logistics of settling people and equipment on newly created parcels of land, Barton steadfastly refused to even consider the idea. Hoover’s efforts did, however, raise in Moton’s mind the idea that significant improvements for black farmers were in the offing and motivated him to enlist black support for Hoover during the presidential campaign, even though Republicans were still taking the black vote for granted.
Who would underwrite such an experiment? In March 1928, Hoover approached Edwin Embree, who headed the Julius Rosenwald Fund.24 Turning to Rosenwald made perfect sense from Hoover’s standpoint. “Herbert Hoover is by training and experience a leader,” Rosenwald would say during the presidential campaign, during which he supported Hoover. “I regard him as fitted beyond any man of this generation for the presidency of the United States. I know of no man at present in public life who has displayed such extraordinary vision in dealing with many stupendous and wholly novel problems, crucially affecting human welfare.”25
Hoover and Rosenwald had collaborated for some time. After the Russian famine of 1921, Hoover, with President Harding’s official endorsement, had worked with many American relief organizations to feed starving Russians. The Joint Distribution Committee, which had worked efficiently during the First World War, operated in areas where Jews were numerous, and Felix Warburg, chairman of the Committee, began raising money for permanent settlements for Russian Jews in the rural Ukraine and along the Crimean Sea in support of a Russian government plan to move Jews to the countryside. Rosenwald, who believed relocation would help persecuted Jews, joined in this effort to turn Russian Jews into farmers. By 1928, after a series of initial gifts, Rosenwald had pledged over eight million dollars. John D. Rockefeller Jr., contributed $500,000 “out of respect for Rosenwald’s and Felix Warburg’s interest in the work.”26
Upon the announcement of Rosenwald’s offer, Herbert Hoover had characterized the gift as “a great experiment in human engineering,” which will make it “possible for people who have been striving as petty tradesmen, to return to their ancient calling and become producers of the necessities of life from the soil.”27 It seemed to Hoover now that Rosenwald, who had spent his fortune funding schools in poor southern black communities (see chapter 1) and supported the Russian resettlement, would be a likely person to fund the land transfer in the Delta that Hoover envisioned for African-Americans.
Rosenwald demurred, however. Even a philanthropist of his stature had reservations about how far Hoover could go in persuading philanthropy to take on problems that Rosenwald believed belonged to the federal government. In this case, his objections were compounded by the absolute need to overcome local segregationist forces. Rosenwald did not give an immediate answer to Hoover, but he eventually made it clear to him that his associative formula could go only so far and that American philanthropy could not commit to a level of social engineering of this magnitude without real legal and financial backing from the federal government.
Rosenwald told Hoover in 1929 that there were inherent limitations to the formula of no-cost federal governance. It was up to the federal government not only to recognize large social issues of equity, he declared, but also to foot the bill for the required human engineering. Rosenwald urged the President to help directly with federal funds for breaking down race hierarchy, if only because “12 million colored people constitute one of the great potential markets for American industry. The measures to be adopted are many,” Rosenwald continued, “but three stand out conspicuously. First, educational programs should be accelerated, with particular reference to the elimination of illiteracy. Second, health activities should be restudied to make sure that this group of people, whose conditions of life are in many ways different from those of whites, are receiving the aid in the elimination of disease that is desirable for their health and for the protection of the rest of the population. Third, the improvement of opportunities for employment should be made the serious concern of the government and such agencies as chambers of commerce and farm boards. No case can be made for employing an inefficient black man in preference to a more efficient white, but when employment can be given to the colored man on a sound basis, the national welfare and prosperity are promoted since on the whole the opportunities for employment for the Negro are much more restricted than for the white.”28 Rosenwald did not believe in no-cost federal governance when it came to fighting racism, and he believed it had to be based on a comprehensive plan, not just an experiment in land redistribution.
That role the federal government was not yet willing to play, even at a modest level. At the White House, after what most believed a successful recovery from the flood and a huge electoral success, it was easy to forget the missed humanitarian opportunity. In his 1929 inaugural address as president, Hoover insisted on Americans’ “capacity for cooperation among themselves to effect high purposes in public welfare.” Hoover was sure he had the authority to set the terms of teamwork.
Hence he laid out the “field of cooperation by the Federal Government with the multitude of agencies, state, municipal and private, in the systematic development of those processes which directly affect public health, recreation, education, and the home.”29
When the stock market crashed, it was only natural for Hoover to stay the course and extend the federal reach through various associations. He set all his Cabinet secretaries searching for funding for programs of old-age pensions, unemployment insurance, and healthcare, insisting that the money would come from private resources.30
In November 1930, as the economy kept worsening, Hoover appointed Colonel Arthur Woods (who had coordinated the successful 1921 Unemployment Conference) director of a new President’s Emergency Committee for Employment. Again, Washington’s blueprint called for encouraging the various levels of government to cooperate with industry and charitable organizations to increase employment opportunities and alleviate suffering. In response, most cities around the country organized citizens’ committees or mayors’ committees, semipublic agencies that conducted large fundraising drives. These emergency committees deployed the methods of mass philanthropy, in particular the whirlwind campaign, to draw upon the purse strings of all able to give.31 Not funded by tax money, they usually covered the expense of direct relief but were unwilling to fund work programs that state legislatures would not consider supporting.
As the Depression set in, Hoover’s formula seemed to hold promise only in a few privileged communities where local institutions had the funds to respond to the economic decline. Hooverism worked where there were deep-pocketed philanthropists willing to support local efforts and behave in ways consistent with the President’s directives. This was certainly the case in Delaware—the last stand of Hooverism. There, the population was concentrated around Wilmington, in New Castle County, where the influence of the du Pont family was strongly felt, ever more so as the Depression worsened. Delaware has in fact been called a “company state,” so deeply did the giant Dupont chemical company infiltrate all levels of politics as well as civil society.32 The du Ponts were in a unique position to do what Hoover expected them to do, that is, support the coordination of local governments, local business, and local charity into a powerful response to the downturn. The du Ponts did not channel their philanthropy through a large foundation like the Rockefellers, but nonetheless they rose to the occasion by giving on a large scale.
There was no doubt about the need for strong intervention on the part of the rich. The caseload at the Associated Charities of Wilmington jumped 43 percent in July 1930 over the previous year, and relief expenditures doubled.33 Never before “have we been called upon to meet so many demands for food, fuel, clothing, and shelter,” Lammot du Pont, chairman of the Associated Charities’ Finance Committee testified. “Unemployment and illness are bringing to us men and women who are appealing for the first time in their lives.”34 His cousin Pierre S. du Pont, who headed the giant chemical concern, personally underwrote all of the administrative costs of the Mayor’s Emergency Relief Committee in Wilmington in the first two years of its existence, so that all of the funds it raised could go directly to relief. Pierre loaned his personal secretary Frank McHugh and continued to pay his salary while he served the city as the committee’s chairman. The du Ponts used their leverage to pressure other local companies to help as well. The local telephone company extended to the mayor’s committee the use of its former headquarters. Many other companies and their employees participated in the effort.
Local governments and nonprofits devised relief strategies together, dividing the responsibility. By May 1931, the state legislature and city hall recognized the Associated Charities, renamed the Family Society, as the official agency to administer relief to families and single women. The Salvation Army administered help to single men without dependents. The Travelers’ Aid Society assisted transients. The Visiting Nurses’ Association secured medicine for special cases and assessed the medical needs of the families. The Wilmington Board of Public Education provided milk and lunches for undernourished school children.35
In December 1930, Wilmington mayor W. K. Forrest launched a fundraising campaign together with Lammot du Pont and Francis du Pont that aimed to raise $100,000 for the immediate winter-to-spring relief of unemployment. Pierre du Pont subscribed the first $10,000 dollars before the formal campaign began.36 Although fundraising was more difficult than expected, by May 1, 1931, a total of 3,000 families had contributed.37 In the special report Wilmington sent to the U.S. Bureau of Census for the first quarter of 1931, total relief expenditures were estimated at $198,618. Of that, $188,618 came from private contributions, the rest from local government. This represented a 1,349 percent increase over relief expenditures for the same quarter in 1929.38
Pleased with the outcome, and eager to have the federal government place its stamp of approval on this effort, Hoover sent his labor secretary, William Nuckles Doak, the man Time Magazine dubbed the “handsomest Secretary of Labor in American history,” to address the newly renamed Mayor Employment and Relief Committee in 1931 and congratulate them on their perfect example of Hooverism at work.39 A new mayor, Frank Sparks, welcomed the secretary. By then, Dupont had adopted an automatic 1 percent payroll deduction for those of its employees willing to sign up and contribute to the committee. Other companies did the same.
Doak singled out the men of Delaware as embodiments of the president’s approach to moving the country out of the Depression. “We realize,” he said, that “you are conducting a program which is one of the most outstanding in the United States. It is a centralized program, with decentralized operation. You have financed your program by arousing your own community and your state to the amount of money necessary to care for your own.”40 Hoover followed through with a congratulatory note of his own in early 1932, addressed to William du Pont, not in his corporate guise but as chair of the finance committee. At least in Delaware, as well as in a limited number of other similar places, this “decentralized” Hooverian-style “centralized” organization, with encouragement from the federal government, operated seemingly efficiently, with an association of private philanthropies and public agencies under Washington’s benevolent guidance. The Wilmington response showed that Hoover’s approach could be sustained; but by April 1932, the limits of the approach were evident. The Mayor’s Emergency Relief Committee was forced to shut down because its funds were exhausted.41 And of course the circumstances that had made it possible for Delaware briefly to rally around Hoover’s program were not replicated in many parts of the country. Philanthropies found themselves having to provide not for emergencies but for long-term welfare, a task altogether outside of their means and know-how.
When in 1930 a drought hit a much larger region of the Mississippi Valley than the flood had earlier devastated, Hoover quite naturally tried his rescue system first, but it quickly collapsed under the sheer scale of the required effort in a climate of economic crisis, financial losses, and uncertainty about the proper responsibilities of philanthropic institutions. The Red Cross, the organizational embodiment of Hoover’s federalist system, buckled under the sheer weight of the project, even though its leaders tried to focus on drought assistance, not on unemployment and welfare, fields wholly outside the organization’s mandate. It was a very tough situation: the disaster was huge, the Red Cross mandate impossibly broad, and the underlying economic crisis made it hard to raise money.42
The flood involved 170 counties, the drought at least 1,000. Twenty-three states were affected. To “lay the foundation” for disaster relief, Hoover called the governors of the afflicted states to meet with him in Washington, where, on August 14, 1930, he outlined his plan for creating once again an elaborate hierarchical organization with the Red Cross as the major nonprofit group collecting contributions from the mass of Americans and delivering the aid.43 At the top there would be a National Drought Relief Committee, chaired by Secretary of Agriculture Arthur Hyde and made up of representatives from the Federal Farm Board, the Federal Farm Loan Board, the Red Cross, the Federal Reserve Board, the Treasury Department, the American Railway Association (important in moving goods at a discount), and the banking establishment (decisive in providing credit). This system was duplicated at the state and county levels. Each governor was to appoint a state drought-relief committee comprised also of a state agricultural official, a leading banker, a Red Cross representative, a railway representative, and a leading farmer. Once the state committees had determined which counties needed organized relief, they would then appoint county committees, each again comprised of a similar mix of prominent citizens and officials.44
The goals of the organization, as Hoover outlined them, were in line with previous relief operations he had conducted: to assist needy families over the winter, prevent unnecessary sacrifices of livestock, and protect the public health. As in the Mississippi Flood program, the provision of credit was considered critical. Local relief committees estimated the level of aid lending institutions, businesses, local governmental agencies, and Red Cross chapters would provide.45 The latter mobilized volunteers. The federal government was not funding direct aid to families, the infamous governmental dole, or paying for meals for the starving poor, only subsidizing animal feed to the farmers. The Red Cross, for its part, was willing to help with groceries but reluctant to provide full meals. In line with its anti-welfare stand, the Red Cross’s food distribution was generally limited to an order of staples in the local country store, garden seed, a canning program, and the distribution of yeast. Even with such limitations, conservative planters, sticking to the attitude they had displayed during the flood, refused to participate in the Red Cross garden seed distribution for fear that croppers, who had already had their wages cut by 50 percent, might perceive any mark of compassion as an encouragement to leave the plantations.46
As the emergency showed signs of becoming permanent, the debate on federal funding—the proper use of public funds, the mandate of respective partners, the place of local autonomy, the enforcement of welfare policy—came to a head. Several senators had aired the idea of providing the Red Cross with public funds for direct relief, when Arkansas Senator Joseph Robinson introduced in Congress in January 1931 a resolution that the government grant $25 million to the Red Cross for use in food and unemployment relief.47 The Red Cross, in the midst of its own fundraising, made it known that it would turn down the offer on principle. Judge Payne explained to the Senate Appropriations Committee that his organization would not accept a government grant because it did not want to become an unemployment relief organization, which is what the grant would have intended. Hoover stood by the Red Cross, as did the press and a number of prominent Americans who believed the federal government had no business turning a mass philanthropy dedicated to disaster relief into a welfare agency. Thomas Edison went so far as to put his eighty-fourth birthday cake up for auction for the Red Cross. It is “a good cake,” Edison said, well worth buying for the “greatest organization in the world.”48
Hoover was as anxious as Payne to avoid direct government support of relief. He feared it would dry up private charity. So did House Majority Leader John Q. Tilson, Republican from Connecticut, who remarked that, “Once the Red Cross is destroyed, as it must inevitably be by a Federal dole, and our local charities paralyzed, as they will be when the Federal Government takes over responsibility for charitable relief, the appropriations that must follow as a consequence of such a policy would now stagger belief. We are now at the cross-roads so far as our charities are concerned.”49 Indeed we were. Between 1929 and 1932, as the Depression deepened, one-third of the private charitable agencies in the United States disappeared for lack of funds.50
Both houses passed a compromise $20 million aid package on February 14 for “agricultural rehabilitation,” a term sufficiently ambiguous to allow farmers to buy food for themselves, not just their animals. This allowance put an end to the no-cost federal welfare on which Hoover had heretofore insisted. Responsibility and lines of command began shifting. Because Payne, who adhered to the letter of the Red Cross federal charter, declined the money, even as a loan to his organization, the Treasury Department distributed it directly to emergency relief committees at state and local levels.51 When Payne also refused to help coal miners in drought areas because their problem did not originate in the drought, Hoover finally reconsidered his unconditional support of the Red Cross position and turned to another charity close to his heart. He asked his fellow Quakers of the American Friends Service Committee to carry out a program financed by the American relief administration and also the Rockefeller Foundation for feeding children in these regions.52
Wilmington’s relative self-sufficiency until 1932 was the exception. Most other cities felt the pressure much earlier and were in dire straits. In many the situation was urgent. Municipal budgets and private philanthropic efforts had difficulty in New York, Chicago, and Detroit, their safety nets strained to the breaking point. Foundations, community chests, and family relief societies could not come to the rescue. The Rockefeller Foundation Division of Social Sciences, under Edmund Day’s leadership, responded that the division should keep its focus on university research but do a better job of focusing that research on national needs.53 The Russell Sage Foundation, which had helped Hoover so much in the Commerce Department in the 1920s, keenly felt the limits of its capacity as conditions worsened. In late 1931, New York City alone was already spending roughly $18 million a month on relief. At that rate the annual expenditure of the Russell Sage Foundation would have been depleted in less than two days; hardly an effective use of its funds, or so it seemed to its trustees.54 In 1932, the Foundation put its larger policymaking ambition on hold and instead published manuals on Emergency Work Relief and Cash Relief for use by social workers.55
At the same time, mass philanthropy appeals fell short of their goals. No fund appeal since the great drives of the World War I period had been so ambitious or received so much professional planning as the community chest whirlwind campaign of October through November 1931. The appeal was made at movie theaters, in amusement parks, and in places of employment across the nation, with free advertising billboards provided by major advertising agencies. The president’s Unemployment Relief Organization, led by AT&T’s Walter Gifford, orchestrated the campaign and sought to raise $175 million. Advertising for the drive boldly proclaimed, “In one month … every city and town in the land will raise the funds that will be necessary to banish from its borders the fear of hunger and cold.”56 However, despite Hoover’s personal attention and his enlistment of one hundred leaders from industry, business, and philanthropy, the fund raised just short of $100 million, a real achievement considering the economy, but far short of the goal. Twenty-five percent of all community chests failed to meet their goals by 10 percent or more, and the money raised would cover only 30 percent of the expected need in chest cities, leaving fully 70 percent of this need to be addressed by tax-supported institutions.57
Charitable organizations like the Red Cross lacked the flexibility and the experience to rise to the occasion. The Red Cross had staunchly refused to be involved in cities, for fear of being transformed further from a disaster relief agency to an unemployment agency. As a result, urban politicians had resented proposals to fund the Red Cross so long as it was ignoring the cities. Senator Robert Wagner and Representative Fiorello LaGuardia wanted instead to nationalize the issue of relief, that is, “treat all needy American citizens” alike.58 Under pressure from big-city mayors, especially Detroit’s Frank Murphy, Hoover proposed to Congress a Reconstruction Finance Corporation in December 1931. The RFC was passed in January 1932, its purpose to provide businesses, banks, railroads and other institutions with loans to spur investment. Its lending authority was augmented as part of Senator Wagner’s July 1932 Federal Emergency Relief and Construction Act, which authorized the RFC to provide loans to states (that no one apparently expected to be repaid) to fund welfare and public works. With federal dollars came supervision. RFC leaders were not shy in denying loans when they believed the state could do more for its citizens.59 From then on, the federal government was directly involved in relief in all parts of the country, and it would be only a short time before it would redefine its relationship with philanthropic institutions because it held the purse strings. The Red Cross had marginalized itself, and no-cost federal governance was no more.
When Hoover became president, he had asked the Rockefeller Foundation to support a Committee on Social Trends in 1929, where academics and government bureaucrats met to diagnose the nation’s problems. After four years of research conducted at the Rockefeller-funded Social Science Research Council, the committee published its report, Recent Social Trends, in 1933.60 But in the elapsed time, the original goal and purpose of data collecting had been lost. In drafting the report John Dewey, William Ogburn, and Wesley Mitchell endlessly debated the distinction between facts, problems, and programs and what they were supposed to report on in the midst of a Great Depression. Overwhelmed by the problem, they ended up recommending old-age pensions, a six-hour day, and unemployment compensation.61 Others in the group were not so accommodating in presenting everything in neutral sounding language. Disillusioned with having to navigate between politics and policy and losing faith in the ability of social science to provide the practical knowledge Hoover sought, the Council’s Robert Lynd simply asked, “Knowledge for What?” but provided no answer.62
Rosenwald had criticized the kind of philanthropic-federal government alliance that Hoover advocated because it lacked both the commitment and the means (which only the federal government possessed) to reform society. Rosenwald’s argument would rapidly come to the fore in the early 1930s, as the full scope of the Depression was understood. Government intervention proved increasingly necessary; the great Rosenwald Fund itself suffered economic setbacks to the point where Rosenwald asked the Rockefeller and Carnegie foundations to meet some of its obligations.
The New Deal Formalizes the Separation between Private and Public Efforts
Such was the state of affairs when Franklin Delano Roosevelt moved into the White House. Roosevelt echoed Rosenwald in singling out the federal government as responsible for a larger share of relief and reform. From Albany, New York, in August 1931, Roosevelt had issued a warning about the extent to which the nation could fall back on civil society to meet the pressing needs of the day. Predicting that private charity would be unable to provide adequate relief to the unemployed during the coming winter, Roosevelt argued that government aid needed to be extended “not as a matter of charity but as a matter of social duty.”63
As the country experienced long-term unemployment, it became increasingly difficult for government and private philanthropies to embark on joint welfare ventures and a carefully coordinated unified strategy without an explicitly shared vision of the common good. Charities sought to improve their immediate environment, and this had seemed right to Hoover. To the new administration, however, it seemed critical to put resources where they were most needed, and that would necessarily conflict with local priorities. The need to govern the nation as a whole in a time of crisis was the reason why President Roosevelt rejected his predecessor’s model of associative governance and instead favored a clear distinction between tax-supported and privately funded intervention in the economy and society. Roosevelt wanted a freer hand to govern and sought to prevent richer states from tapping private resources in order to claim matching funds from government. He dramatically increased the power of the federal government and revived the idea of a compound republic in which all branches at all levels had a clearly defined role to play.
Hoover had shown that it was possible in the proper circumstances to create an unprecedented chain of association between all levels of government and civil society for disaster relief and social reform. But his insistence that the government should write the rules—except when they interfered with racial segregation—while charging civil society with their cost and implementation could not survive a broad-scale systemic crisis. Roosevelt faced up to long-term unemployment nation-wide by clearly separating government from charity and accepting the need for government to foot the bill.
In March 1933, Roosevelt summoned Harry Hopkins to Washington to head his new Federal Emergency Relief Administration. Hopkins had come of age as a social worker in New York City and embodied the professional ethos of the social-welfare progressives of the 1910s and 1920s. As a social worker in 1913 with the Association for Improving the Condition of the Poor under John Kingsbury (later head of New York State’s Department of Public Charities), he had set up its unemployment agency and convinced New York to let men whom the charity supported work on state projects.64 In 1915, Hopkins had lobbied for and received an appointment as executive secretary of the newly formed New York Board of Child Welfare.65 He moved on to become divisional director of the Red Cross in Louisiana during World War I and then, back in New York, became executive director of the New York Tuberculosis Association in the 1920s. He helped draft the charter of the American Association of Social Workers. When Hopkins became the head of the Temporary Employment Relief Administration that FDR created as governor of New York, he was fully cognizant of the methods of mass philanthropy and its interaction with local and state governments.
By the late 1920s much of the burden of the relief effort had already been transferred to various governments. In 1928, 71.6 percent of all relief in the nation’s fifteen largest cities came from public funds, according to the Federal Bureau of Social Statistics, which concluded that private citizens’ efforts “dwarfed by comparison.”66 C. M. Bookman, director of social agencies and of the community chest in Cincinnati still emphasized the good of private charities when he addressed the 1930 National Conference of Social Work, but the following year he pointed instead to the limits of voluntary action and called for larger government support for the poor and unemployed.67 Social worker Josephine Brown reported that, based on a U.S. Census study of public relief in 116 cities, private charities could still be counted on for covering about a quarter of the needs in 1929. A mere six years later, in 1935, she found that after massive federal intervention, private money accounted for only 1.3 per cent of total relief funds.68
As “the world’s greatest spender,” Hopkins was the person responsible for the shift. Most important was the way in which he oversaw the distribution of federal dollars, directing the states to put an end to their traditional mixed political economy of giving if they were to receive their share. It was of absolute necessity to find a redistribution formula that prevented rich states from claiming a disproportionate amount of federal funds compared with poor states. On June 23, 1933, Harry Hopkins issued his first and most significant rule governing how Federal Emergency Relief funds would be disbursed. Hopkins’ directive prohibited the turning over of federal funds to a private agency. “The unemployed must apply to a public agency for relief, and this relief must be furnished directly to an applicant by a public agent.”69 Not only were public and private accounting to be kept apart, but the states could not entrust private institutions to administer federal funds. Although both government and philanthropy worked for the common good, the source of their funds—tax money and private donations—took on a new significance. They could not be combined any longer.
Hopkins’ rule barring private agencies from administering public funds had a profound impact on philanthropy. As Frank Bane, previously the director of the American Public Welfare Association, a professional association, and one the leaders of the FERA, explained it to Aubrey Williams, a new recruit to the organization from a private agency in Milwaukee, the agency’s motto was “public funds should be administered by public agencies.”70 The change was “epoch-making,” said Josephine Brown. It cleared out the “confused” thinking that had prevailed when public and private funds were combined.71 The ruling also revealed two sharply contrasting visions of the federal government’s relationship to philanthropy. Hoover had wanted to make eleemosynary institutions full partners in a federal design. While granting power to these institutions by not challenging their ideological assumptions and racial attitudes, he also made them subservient to Washington’s rules and required private philanthropists to pay for federal programs. Roosevelt and Hopkins provided a clear alternative. The federal government would pay, but it would also be fully in charge.
Hopkins knew private philanthropies well. He had worked with them for years. Now he was relegating them to a secondary role. He justified this move by developing a critique of the way in which they operated, noting that they made the poor feel guilty for accepting their help. Hopkins believed that the rise in the number of people involuntarily out of work called for a new rationale, different from the rationale of charitable work. As in his support of widows’ pensions, he fought the stigma associated with receiving charitable gifts, the notion that it implied some kind of character flaw, when in fact the systemic problems of industrial society were responsible for the crisis. Hopkins’s biographer (and also granddaughter) argues that he had convinced himself that only government could “rescue the needy from the indignity of private charity.”72 In other words, relief was their right as citizens, not a gift. He also saw a national commitment enforced by federal standards as essential for helping migrants, who were usually ineligible for receiving aid from local private charities, but who should be assisted as much as “settled” people.73
Hopkins’s good intentions aside, the history of welfare before, during, and since the Great Depression clearly suggests that this justification was beside the point. His purpose was to find a coherent and systematic way to confront the crisis on a national basis, and that was something that only the federal government could do. In describing a speech he was about to give in June 1933, Hopkins announced that he was “going to say that the federal government has a responsibility for the distribution of funds which are appropriated by Congress for the relief of the unemployed which it cannot delegate, in good conscience, to any other agency, but must itself assume the responsibility for their disbursement.”74 The bill establishing FERA went so far as to give the federal administrator the right to appoint a state administrator if this was the only way to carry out the intentions of the act. Another amendment gave the federal administrator the right to assume full control of unemployment relief in any state if, after an examination of relief management in the state, he was unsatisfied with the current leadership. The motivation was not just to sever public from private funds, but also in part to keep the states under close supervision.
While arguing that their work was only transitory, the New Dealers transformed the nation for the long haul. Their rhetoric was often at odds with their actions. Josephine Brown, who was both witness and party to this policy shift, pointed out that Hopkins considered federal relief policy to be only temporary, but felt all the same that private philanthropies would resist retrenchment. Based on his New York experience, Hopkins feared that private charity interests, if allowed to administer funds from federal programs, would feel invested in those programs and make it difficult politically ever to terminate them. The idea, as Hopkins put it, was “to see that the unemployed get relief, not to develop a great social work organization throughout the United States.”75 Hopkins was also interested in returning charity to philanthropy. He did not want the federal government to take on permanent responsibility of caring for “unemployables,” whom he defined as “old people, widows, persons who were breadwinners but now are in TB institutions, insane asylums, the crippled and handicapped.”76 Rather he would leave these to the responsibility of private charities, knowing very well that philanthropists had worked for decades to abandon almsgiving and to move their organizations towards finding solutions for root causes (see Chapter 1).
The often impossible effort to distinguish between the two populations ended up plaguing government programs and leading to the “two-tiered” welfare system—generous toward the employed but tightfisted toward the unemployed—that historians usually blame on the Social Security Act.77 President Roosevelt and Senator Wagner extended to a large population of older Americans a version of retirement benefits that large corporations had privately implemented for their management (and Carnegie for teachers) a full half-century earlier, but they were much more timid about a safety net for the poor.
Hopkins’ injunction shook up dozens of city, county, and state agencies across the country that had been using voluntary agencies and private philanthropies as a major arm of their operations. Hopkins gave states and cities only five weeks to create public welfare structures to receive and disburse FERA funds. The impact on philanthropy was massive. And not surprisingly, the turn over was less than smooth.
In at least one highly symbolic instance, the New Deal began by breaking its own rule because it made sense politically to do so. It allowed the Archdiocese of Chicago to administer federal funds. Roosevelt needed the support of Midwestern Catholics, and Chicago’s Cardinal Mundelein worried about how federal welfare spending might undermine the loyalties of Catholic workers to the church. Mundelein, who enjoyed close ties with Mayor Kelly and also with the president (especially significant at a time when other Catholics like Al Smith and Father Coughlin were turning their back on the New Deal), had the Central Charities Bureau and the Society of St. Vincent de Paul named units of the Illinois Emergency Relief Commission in August 1933. This would make it possible for them to distribute FERA funds. Professional social workers protested the move as a violation of professional standards and of the separation of church and state. But the exception stood. FERA required only that the church agencies put “visible evidence” of their connection to the agency in all of their offices, and on the checks they sent.78 Meanwhile, Hopkins denied similar exemptions to the Salvation Army and Jewish charities.
By the end of 1933, Delaware, such a bright spot in the Hoover design, had adopted a significantly altered operating model, one which disaggregated the previously well-oiled machinery that had married the Family Society and the Salvation Army to local government employment and emergency relief committee organizations under the approving eye of the federal government. Civil Works Administration reports for the beginning of 1933 already revealed a marked absence of budget line items devoted to private philanthropies, such as the Family Society and the Salvation Army, which had appeared on the state and municipal budget rolls mere months before. By late 1934 the emergency relief reports produced by the state of Delaware and its various cities and counties no longer contained any budget line items for private philanthropic organizations.
But despite instructions to the contrary, Delaware Governor C. Douglass Buck, who had married a cousin of Pierre du Pont, blurred the lines separating public and private aid administration by creating the Relief Commission, Inc. In part to circumvent the state legislature’s strict application of the federal rule, Buck helped form the relief commission to take over operation of unemployed assistance in New Castle County in June 1934. He achieved this by resurrecting a charter granted by the legislature to the Associated Charities in 1885. Under this charter, the association was incorporated with “perpetual existence” to “obtain from the proper charities and charitable individuals funds and supplies for the relief of the deserving classes.” The charter also empowered the county court, known as the Levy Court, which still operated in the traditional manner as a small elected body charged with assessing and collecting taxes, to appropriate money to the Associated Charities “in the pursuance of its charitable purposes.”79 This maneuver made it clear that, at least at the county level, there were still means of creatively channeling limited city, county, and even state funds to local philanthropies.
More common were various strategies to maintain, at least for a while, the existing blend of public and private funds by turning social workers into public servants with the approval of the FERA. In Pennsylvania one study found a “large transfer of workers from private to public agencies” across the state in the eighteen months following the FERA order, transforming some nonprofits, at least in part, into branches of government. Another survey in 1935 revealed that family agencies in many middle-sized cities such as Bridgeport, Connecticut, Grand Rapids, Michigan, and Tuckahoe, New York, had witnessed similar shifts of workers; while for some larger cities such as Wilmington, Delaware, Norfolk, Virginia, and Springfield, Illinois, board members and executives of nonprofits helped to plan and operate the newly created public agencies.80
Private agencies often had their trained and experienced staff appointed as public officials. In Wilmington, the Temporary Emergency Relief Commission (TERC) absorbed the operations and staff of the Mayor’s Employment and Relief Committee, previously underwritten by Pierre S. du Pont. As of the middle of 1933, the Family Society continued to administer relief to families in need with emergency funds, though it had shifted roughly half of its cases to work relief projects run by the TERC. Ethelda Mullen, the peripatetic executive secretary of the Family Society, was made the executive secretary of the TERC. She thus became an eligible “agent” to administer relief funds, and while she could not channel them directly to the Family Society, she could put those on their unemployed rolls onto the TERC rolls and then administer aid.81
Mullen was also able to bring in other personnel from private voluntary agencies and have them appointed. Such efforts helped keep skilled individuals in the loop. Facilities were often shared, further blurring the lines of public and private. The TERC continued to operate in an office donated by the Dupont-owned Delaware Trust Company. In November 1933, Hopkins, acting as Federal FERA administrator, designated the Delaware Temporary Emergency Relief Commission as the Civil Works Administration for the state. He accepted the appointment of all the existing members of the Relief Commission as part of the CWA.82 But these interlocking personnel networks only delayed the inevitable. They did not reverse the trend separating the public and private spheres and walling off federal unemployment relief funds from private philanthropies.
The New Deal held firm to the notion that the federal government was responsible for redistributing resources across regions as needed, and this created additional conflicts with local philanthropies. The principle affected philanthropy directly, because states could count only their own tax funds for matching purposes with the federal government. The issue of the federal government preventing states from including private funds in matching allocations once more came to a head in Delaware with the first federal grant-in-aid issued to the state as the FERA’s matching fund. By June 1933, the sum had reached $481,815, but it would have been higher had private contributions from the county committees been taken into account. This led the influential Jasper Crane, a vice president and director of the Dupont Company, a director of the local YMCA and Red Cross, and then chairman of the State Temporary Emergency Relief Committee to write to Harry Hopkins on June 19, 1933, to ask for federal matching funds for these contributions.
Crane argued the case by pointing to the old organic association between the state government and private donations by ordinary residents in the various Delaware counties, which attested to vibrant communities responsible for their own. Crane pointed to Delaware’s rule that “none of the money appropriated by the state may be used for direct relief in any county unless that county contributes … 20 percent of the whole cost of direct relief in the county.” He concluded, logically, that “private contributions are thus the keystone of the arch of our relief work in Delaware.” Crane saw limiting matching funds “as working hardship on our State and discouraging private citizens from making private contributions to our relief funds.”83 That did not move Hopkins who felt national issues trumped local ones.
Under the new Washington policy, local public agencies could no longer raise donations from residents, which previously had been quite generous, with the expectation of receiving equal support from the federal coffers. Although dire predictions of the imminent “exhaustion” of “all resources” proved inaccurate, there was a growing understanding that philanthropy would no longer be a main source of public funding for poverty relief.84 As a result New Castle and other counties discontinued fundraising “except as a last resort.” It was best to ask citizens to send their donations (which they had previously directed to the Mayor’s Committee in Wilmington) directly to private philanthropies such as the Family Society, which supported women and unemployed families.85 Public agencies should not compete for charitable funds in the population at large.
The Delaware state legislature, controlled by Republicans, resisted this separation of the public and private spheres. In 1934, Delaware was one of only four states to put a Republican in the Senate, John G. Townsend, Jr. Delawareans also elected a new Republican representative, J. George Stewart, from Wilmington, who had been a member of the Temporary Emergency Relief Commission. The two men attacked the New Deal on the basis of unfairness. They argued that in the first half of 1934 Delawareans had paid an average of $5.20 in taxes to the federal government for every dollar they received back in relief funds. Pierre du Pont, who had emerged as one of the leaders and funders of the anti New Deal Liberty League, sounded the same note in October 1937 when he computed that total federal assistance to the state had amounted to $28,400,000, just 17.7 percent of the $160,266,000 in taxes flowing out of the state to the federal government.86 According to du Pont, this data indicated that the state could have taken care of its own relief needs had those funds remained within state borders and continued to be applied in the voluntary mode in which early relief had operated, with the distinction between voluntary contributions and compulsory taxes conveniently blurred. But residents had stopped giving money generously to local causes in alliance with local governments because the federal government was going to redistribute their wealth nationwide.
The Works Progress Administration became the key federal relief agency after 1935. The local Family Society, still running with the benefit of some tax appropriations from local coffers via the Levy Court, gave welfare relief only to families who were deemed unemployable according to state and federal standards. Broadly speaking, the federal government had severed much of the traditional organic relationship between the state and private philanthropies and co-opted the state in a more coercive if limited version of federalism.
These drastic changes were national. New-style federal agencies, not the Red Cross, took charge of addressing such crises as the 1930s “Dust Bowl” calamity. Intensive farming combined with poor agricultural practices had destroyed the protective cover of vegetation across much of the northern and southern plains. In 1934, the convergence of high winds and the worst drought in American history affected more than 75 percent of the country, impacting twenty-seven states. The outcome was a giant dust bowl covering an area of more than 50 million acres in Texas, New Mexico, Colorado, Kansas, and Oklahoma. The Red Cross was not completely absent from the ensuing rescue effort. It made the drought a part of disaster relief for Red Cross Month in March 1934 and called for dust masks, especially for children. Junior Red Cross members were enlisted. But the role that the Red Cross played in alleviating dust bowl conditions in 1934 and 1935 was minor compared to its part in drought-relief efforts in the Mississippi Valley in 1930–31 or in the 1927 flood. Federally-funded New Deal relief and policy-planning had become the preferred method for confronting disasters.
Federal assistance became the primary relief for citizens in need in the states affected by the Dust Bowl. Congress took action, deployed experts and aid agencies, and no longer expected civil society to pay the bills. In the summer of 1934, President Roosevelt secured $525 million for drought relief from Congress. Around the same time the Department of Agriculture began purchasing cattle from distressed farmers at above-market prices—helping ranchers hold onto their land and distributing the beef to the needy—and by 1935 the federal government was the world’s largest cattle owner.87 Perhaps the most devastating moment of the Dust Bowl came on April 14, when immense dust storms struck the Great Plains—the day came to be known as “Black Sunday” (and the term “Dust Bowl” itself was coined in the storm’s wake).88 Congress followed up by declaring soil erosion “a menace to the national welfare” and established the Soil Conservation Service in the Department of Agriculture, which developed conservation programs to protect topsoil.89
The federal government disrupted the long-standing partnership between philanthropy and local and state governments twice, and in contrasting ways. Hoover’s no-cost federal governance put philanthropic forces at the center of the governing process. Roosevelt ended Hoover’s experiment and designed policies that forced Americans to draw stricter boundaries between public and private funds. Neither Hoover nor Roosevelt implemented his vision fully. The New Deal formula lasted for thirty years, but the federal government engaged private philanthropic forces again in the Great Society’s funding of privately run social services (chapter 7). In response to widespread grassroots pressure from the civil rights movement, the government designed entirely new rules of engagement. All along, a war of ideas, with powerful political consequences, unfolded over the place of philanthropy in American governance and the wisdom of collaboration between the state and the institutions of civil society.