Restoration in Iowa

While Franklin Roosevelt and the U. S. Navy last week performed at sea an act designed to impress a world audience (see col. 1), at home, in Iowa, Secretary of Commerce Harry Hopkins took the spotlight in the Administration's biggest act for domestic consumption since the 1938 elections.

The name of the Hopkins act was Restoring Business Confidence. Nothing quite like it had ever been staged under New Deal management. Heretofore Franklin Roosevelt's morsels of encouragement to Private Profit had been tossed out as asides in speeches which concentrated on the New Deal's grander social objectives. Even the famed "breathing spell" of 1935 came only in answer to a letter from a publisher.* Now, Depression and an election having intervened, the fairest-haired lieutenant of the whole New Deal was being sent out to effect Recovery through the strange and unfamiliar medium of Business itself. To succeed he must embrace Business within the New Deal's social philosophy. To be believed, he must have a careful Administration buildup.

The build-up began with Harry Hopkins' own well-dramatized swearing-in as Secretary of Commerce on Christmas Eve. It was continued in Franklin Roosevelt's rousing message to Congress about an 80-billion-dollar country. It was renewed by his remarks about "no new taxes," on the train south last fortnight (TIME, Feb. 27). Last week the build-up was intensified by Secretary Morgenthau, who proposed not only to avoid new taxes but to mitigate those which give businessmen a "what's-the-use" attitude. The Administration's tax man in the House, Chairman Bob Doughton of Ways & Means, echoed Mr. Morgenthau. At a meeting of Senate committee heads, Chairman Pat Harrison of Finance, arch foe of the Administration's social-control tax theories, was permitted to cry a truce on all legislation unsettling to Business. Secretary of War Woodring even made a speech last week in which he deplored "spending and taxing," apologized that spending was necessary "because we are not prepared to face the graver alternative --depression and chaos." By the time Harry Hopkins arose (in a rented tuxedo) at Des Moines to address its Economic Club, the U. S. (and by shortwave, Europe, South America) was attuned to hear a speech of historic New Deal appeasement.

Top Two-Thirds. It was a choppy, diffuse oration, composed by many minds (see p. 49), but it got right down to the job it had to do. After planting himself firmly in Iowa ("I was born and raised here. My father and mother spent their lives here"), Harry Hopkins gave his own picture of his new job. Running WPA he had served the nation's bottom third. Now he served "the two-thirds of the population earning their living by what we consider to be the normal process of our economic system." To bring his former clients up to par with his new ones, "if new jobs are to be provided, the national income must be increased." National income will not rise without Business confidence, and on this paramount point Mr. Hopkins made an admission never before heard so frankly from a New Dealer. Said he: "Among many businessmen there exists a widespread lack of confidence . . . a hard, stubborn fact."

His first attack upon that fact was equally direct: "Is it not ... better to have a program of reform substantially completed than to have to look forward to important changes not begun? With the emphasis shifted from reform to recovery, this Administration is now determined to promote that recovery with all the vigor and power at its command."

It was news to hear a New Dealer recognize what all businessmen know: "that a minimum volume is necessary to break even on fixed expenses." That, he said, was "the significance of the President's quota of an $80,000,000,000 national income. It is in no sense an argument for a permanent unbalancing of the Federal budget."

Taxes as deterrents were specifically attacked by Harry Hopkins: "Any Federal taxes which tend to freeze the necessary flow of capital should be amended."

Public utilities were an avenue into which private capital could flow, he said. Now that the TVA fight was over, this avenue was open again. Not without sarcasm, but still reassuringly, Harry Hopkins added: "There has been no indication that government wishes to own and operate all the utilities of this country."

To Make Money. Labor's responsibility in Recovery came right after Capital's in Harry Hopkins' mind. Now that the Government has strengthened its arm, "Labor's contribution . . . must be tolerance and fairness. . . . Labor must fully realize that under our economic system, businessmen have to make money to hire workers." Secretary Hopkins revived a report current in January but then disavowed by him: that among his major assignments is to do the job left undone by Secretary of Labor Perkins--get A. F. of L. and C.I.O. to bury the hatchet. "Business," said Business' new servant, "finds it difficult to progress in face of a divided labor front."

Farmers received their due from Harry Hopkins, who said: "Our farm homes receive less than 10% of the national income and on that they must bring up about 30% of the nation's children . . . the most important crop raised on the farm."

Small businessmen received canonization when Harry Hopkins said that their operations, "one of my principal interests," have replaced Steel's as the prime business barometer.

Harry Hopkins believes in foreign trade and in Secretary Hull's treaties to promote it. And not only U.S. goods but U.S. ideas, "our democratic way," shall be our exports. The U. S., prosperous and happy, "might in fact be the example that would lead the world back to sanity and peace."

In peroration, Recovery's apostle added Housing and Railroads to Utilities as fields in which the use of capital goods can be expanded now that the era of Reform is past.

Conclusions: "I have tried to indicate tonight that the Government is desirous of doing everything it can to create an environment in which private investment is encouraged.

"I have tried to state as forcefully as I can that it is our determination to make every move we know how to promote recovery and get people back to work on private jobs."

New Goats. As U. S. businessmen sat back to see how much they could believe of Saint Harry's epistle to the erstwhile Philistines (see p. 49), historians noted the emergence of a new flock of U. S. goats. These were lawyers, business and constitutional. Lawyers were given their turn as national goats--after Bankers, Businessmen, Tories and Publishers--by Harry Hopkins when he blamed them last week for adding to Business' uncertainty during the Reform period of the New Deal by their "shortsighted counsel"; again, when he chortled over how the utilities were finally told, by the U. S. Supreme Court, "that they [lawyers] did not know what they had been talking about" in questioning TVA's constitutionality.

"Bad Manners." A neat rear-guard action was executed by Mr. Hopkins in a parenthetic reference to the "generous peace" of the TVA-Commonwealth & Southern settlement:

"I realize fully how often a gesture of practical concession by the Government will time and again be seized upon by a minority element as the sign that the Government is on the run. We will have to expect some such bad manners, but we will take them in our stride because that is part of the job of being a public servant."

1940. Chairman Ed Birmingham of Iowa's State Democratic Committee came close to spoiling the scenery with a blob of politics just before the curtain went up on Mr. Hopkins' act. Zealous candidate for the vacant throne of the Bureau of Fisheries in Mr. Hopkins' department, Mr. Birmingham gave the impression that Iowa delegates were being lined up for Mr. Hopkins' nomination as President next year. Mr. Birmingham was quickly shushed, but no political observer missed the point that the prize at stake in Harry Hopkins' performance was not just one State's convention delegates. The prize is Presidential Prospect Hopkins'--and the New Deal's--standing with the entire U. S. electorate in 1940.

-Roy Wilson Howard of Scripps-Howard Newspapers.

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