Roosevelt to the Rescue

By

Jawaharlal Nehru

( Glimpses of World History)

I want to you have another look at the United States of America before I wind up the story (and the winding up cannot be long delayed). A great and rather fascinating experiment is taking place there now, and the world is on the watch, for on its results depends the future turn that capitalism will take.

America, let me repeat, is by far the most advanced capitalist country; she is the wealthiest, and her industrial technique is ahead of others. She owes money to no other country, and her only debt is to her own citizens. Her export trade has been considerable and growing, and yet it was only a small part (about 15 percent.) of her enormous internal trade. The country is nearly as big as the continent of Europe, but there is the big difference that Europe is cut up into large number of little nations, each having high custom duties at its frontiers, while the United states have no such trade barriers within their own territories. It was thus far easier for a huge internal trade to develop in America than it was in Europe. America had all these advantages over the impoverished, debt-ridden countries of Europe. She had plenty of gold, plenty of money, plenty of goods.

And yet, in spite of all this, the crisis of capitalism caught her and took all the pride out of her. Fatalism descended on a people whose vitality and energy knew no bounds.

The country as a whole remained rich, money did not disappear, but it piled up in a few places. Hundreds of millions were still in evidence in New York; the great banker J.Pierpont Morgan still sported his private luxury yacht, which is reported to have cost £6,000,000. And yet New York has been described recently as “Hunger Town”. Great city municipalities like Chicago have been practically bankrupt, unable to pay the salaries of thousands of their employees. And this very Chicago is now running a magnificent exhibition or “world fair” called “The Century of Progress”.

These contrasts are not confined to America.

Go to London and the overflowing wealth and luxury of British upper classes are everywhere in evidence, except of course in the slums. Visit Lancashire or northern or central England, or parts of Wales and Scotland, and you see long lines of unemployed, and pinched and haggard faces, and miserable living conditions.

A marked feature of recent years in America was the growth of crime, especially of the “gangster” variety-that is, gangs working together and frequently shooting people who came in their way.

Crime is said to have increased greatly ever since a law was passed prohibiting the sale of intoxicating drinks.

This “prohibition”, as it is called, became law soon after the World War, partly because the big employers wanted their workers to keep away from such drinks so that they might work better. But the rich themselves ignored the law and continued to get drinks illegally from abroad. Gradually an enormous illegal trade in alcoholic drinks was built up. “Bootlegging” this was called, and it consisted both of smuggling wines and spirits from abroad and of secretly manufacturing them.

Usually this secretly manufactured stuff was far worse and more harmful than the real article.

“Speak-easy” was the name for the place where such drinks could be bought at very high prices and thousands of such private bars grew up in all the big cities. All this wars, of course, illegal, and to enable it to exist policemen and politicians were bribed and sometimes terrorized. This widespread contempt of the law led to the growth of the gangster groups.

Thus “prohibition” resulted on the one side in doing good to the workers and rural population, on the other it did great harm, and a very powerful boot-legging interest grew up. The whole country was spilt up into two parties: those in favour of prohibition called the “Drys”, and those against it called the “Wets”.

Among gangster crimes the most notorious and shocking were those of kidnapping little children of rich people and holding them for ransom. Some time ago Lindbergh’s baby was so kidnapped, and to the world’s horror, was brutally done to death.

All this, in addition to the trade depression and the realization that many of the high officials and big business people were corrupt and incompetent, upset the nerves of the American people. During the presidential election of November 1932 they turned in their millions to Roosevelt, hoping that he would bring them relief. Roosevelt was a “wet”, and belonged to the Democratic Party, which has very seldom provided presidents to United States.

It is always interesting and helpful to compare different countries, always keeping in mind their distinctive features. One is tempted, therefore, to compare recent events in the United States with those in Germany and England. The comparison with Germany is a closer one, because both countries, in spite of being highly industrialized, have a large farming population. Germany’s farmers are 25 percent of her total population; in the United States they form 40 percent. These farmers count in the making of national policy. Not so in England, where the small proportion of farmers are neglected, although some effort in now being made to revive them.

One of the outstanding causes of the Nazi movement in Germany was the growth in the numbers of the dispossessed lower-middle classes, and this growth became rapid after the German inflation. It was this class that became revolutionary in Germany. This is precisely the class which is growing now in America now; it is called the “white-collar proletariat”, to distinguish it from the working proletariat, which seldom indulges in white collars.

Other comparisons are the currency crises, the fall of the mark, the pound and the dollar from gold and inflation, and bank failures. In England there have been no bank failures because there are not many small banks and a few big banks control the banking business. In other respects the courses of events in the three countries resemble each other. Germany having her crisis first, then England, then the United States. More or less the same classes of people, in their respective countries, were behind the Nazis, the British national government in the election in 1931, and president Roosevelt in his election in November 1932. This was the lower-middle class, many of whom had previously belonged to other parties. This comparison must not taken too far, not only because of national differences, but because the situation in England and America has not yet developed as it has in Germany. But the point is that very similar economic influence have been at work in these three highly advanced industrial countries, and the results they produce are therefore likely to be similar. This is not so in France (or other countries) to the same extent, for France is still more agricultural and less advanced industrially.

Roosevelt took office as President early in March 1933, and he was immediately faced by a tremendous banking crisis in addition to the great depression that was going on. Some weeks later he described the state of the country when he took office and he said that the country was “dying by inches” then.

Roosevelt took swift and decisive action. He asked the American congress for powers to deal with banks, industry and agriculture, and the congress, quite unnerved by the crisis, and influenced by popular feeling in favour of Roosevelt, gave him these powers. He became practically a dictator (through a democratic one), and everybody looked to him for immediate and effective action to save them from disaster. He did act with lightning rapidity, and within a few weeks he had shaken up the whole of the United States by his various activities, and produced an even greater feeling of confidence in himself.

Among president Roosevelt’s many decisions were:

1. He went off gold and allowed the dollar to fall, thus reducing the burden on debtors. This was a measure of inflation.

2. Relieved farmers by subsidies, and got a huge loan of $2,000,000,000 issued to relieve agriculture.

3. Enlisted 250,000 workers immediately for forestry services and flood-control work. This was to relieve unemployment a little.

4. He asked congress for $800,000,000 for unemployment relief. This was granted him.

5. He set aside the enormous sum of about $3,000,000,000, which was to be borrowed, for public works to promote employment.

6. He hurried up the repeal of Prohibition.

All these enormous sums were to be obtained by borrowing from the rich people. Roosevelt’s whole policy was, and is, to increase the buying power of the people; when they have the money they will buy, and the trade depression will automatically lessen. It is with this object in view that he is having huge schemes of public works where the workers can be employed and earn money. It is also with this object that he is trying to raise the wages of workers and lessen their hours of works. A shorter working day would mean the employment of more people.

This attitude is in direct opposition to the usual attitude of employers during time crisis and depression. Almost invariably they try to cut down wages and lengthen hours of work, so as to cheapen their costs of production. But, says Roosevelt, if we are to resume mass production of goods, we must give the masses the capacity to buy them by a mass distribution of high wages.

The Roosevelt government has also given a loan to Soviet Russia for the purpose of buying America cotton. The two governments are also discussing the possibilities of large-scale barter between the two countries.

America has so far been a purely capitalistic state with full and unrestricted competition; an “individualistic” state, as it is called. Roosevelt’s new policy does not fit in with this, as he is interfering with business in a variety of ways. He is therefore practically introducing a great deal of State control over industry, though he calls it by another name. It is really a measure of State socialism, regulating hours and conditions of labour, controlling industry and preventing “cut-throat competition”. He has called it “a partnership in planning, and seeing that plans are carried out”.

This work is being carried on now with the usual American push and energy. Child labour has been abolished. (The child’s age for this purpose is up to sixteen.) Higher wages is the slogan, more pay, less hours of work. “Prosperity Push” this campaign is called, and the whole country, it is reported, has become a giant recruiting poster for this campaign. Aero planes dash about broadcasting appeals to employers and others. Each separate big industry is being induced to draw up “codes” fixing higher wages, etc., and pledging itself to carry them out; if it fails to draw up a suitable code there is the gentle threat that the government will do it. Individual employers are asked to sign pledge forms promising to raise wages and shorten the hours of work of their employees. To those employers take a lead in this matter the government proposes to give badges of honour, and so, shame slackers, a roll of honour will be kept in the post office of every town.

All this has resulted in some improvement in prices and trade. But the real improvement, which is marked, is in business sentiment and morale. The feeling of defeat has largely gone, and there is, among the large masses of the people, and especially the middle classes, an abounding faith in President Roosevelt. He is compared already to America’s great hero, President Lincoln, who also took office at a time of a great crisis, the civil war.

Even in Europe many people began to look up to him and expected a world leadership against the depression. But at the world economic conference he became rather unpopular with the delegates of other countries because he directed his representatives to refuse to fix the dollar in terms of gold or to agree to anything else, which might interfere with his great schemes in the United States. Roosevelt’s policy is definitely one of economic nationalism, and he is bent on improving conditions in America. Some European governments do not like it, and bankers are particularly annoyed. The British government does not approve of Roosevelt’s progressive tendencies. They prefer big business.

And yet Roosevelt is taking a more active part in world affairs than his predecessor did. On the question of disarmament and other international questions, he has taken up a definite and more advanced attitude than that of England. His polite warning to Hitler made Hitler tone down. He is also getting into touch with soviet Russia.

The great question in America today, and even elsewhere, is: will Roosevelt succeed? He is making a brave attempt to keep capitalism going. But his success means the dethronement of big business and it is far from likely that big business will take this lying down. American big business is held to be the most powerful vested interest in the modern world, and it is not going to give up its power and privileges merely at the bidding of President Roosevelt. For the present it is quiet, for public opinion and the president’s popularly have rather overwhelmed it. But it is waiting for its opportunity. If there is no great improvement within a few months, public opinion, it is expected, will turn against Roosevelt, and then big business will come out into the open.

Many competent observers think that President Roosevelt is facing an impossible task and that he cannot succeed. His failure will make big business supreme again, and with perhaps even greater power than before. For Roosevelt’s state socialism apparatus will then be utilized for the private profit of big business. The labour movement is not strong in America, and can easily be crushed.

Note:

President Roosevelt’s great attempt to overcome the crisis, and to adapt capitalism to the new conditions, met with partial success, though there was no fundamental change. There was an improvement in the situation. This attempt was in effect based on huge schemes of relief and on transferring to some extends the profits of industry to the workers by persuading the employers to give higher wages and shorter hours. The employers, especially Ford, resisted this is an attack on their freedom. The codes for industry and agriculture failed, and there were many strikes. But American labour grew stronger and more class-conscious and a new spirit pervaded it. Trade Unions increased their membership greatly.

As economic recovery took place, big business became more aggressive and resisted Roosevelt. The supreme court declared most of the effective clauses of Roosevelt’s two principal acts, the national recovery act, and the agricultural adjustment act, as opposed to the constitution and therefore inoperative. Roosevelt’s new deal was thus undermined.

In 1936 Roosevelt was elected president for a second time by a big majority. His struggle with big business continues. The congress is no longer dominated by him, and it has opposed him in many matters.