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KANSAS CITY. MO PUBLIC LIBRARY
o DDDI onaiia s
A Hindsight History of American
Manners, Morals, and Mistakes be-
tween Versailles and Pearl Harbor
HENRY MORTON ROBINSON
HARCOURT, BRACE AND COMPANY
NEW YORK
BY
- NORTON ROBINSON
All rights reserved, including
the right to reproduce this book
or portions thereof in any form.
first edition
PRINTED IN TO VHXTID STATES OF AMERICA
FOR
MELVILLE CANE
Counselor and Friend
ACKNOWLEDGMENTS
i HEREWITH make grateful acknowledgment to the many
writers upon whose works I have drawn in preparing this
book. Above all, I am tremendously indebted to Frederick
Lewis Allen for blazing a broad and brilliantly lighted
trail in Only Yesterday, Since Yesterday and Lords of
Creation. On Mark Sullivan and Harry Elmer Barnes I
have leaned heavily; the latter's Society in Transition is a
storehouse of precise information and stimulating ideas. For
material on Andrew Mellon I am under special obligation
to Harvey O'Connor and Ferdinand Lundberg. Samuel
Hopkins Adams' Incredible Era and William Allen White's
portrait of Warren G. Harding in Masks in a Pageant were
helpful in the preparation of Chapter I. To Charles Merz,
I am indebted for the Ford anecdotes in Chapter I.
Throughout the entire work the influence of Professor
Charles A. Beard will be readily noted by all who are
familiar with his economic theories.
My special obligations in Chapter II are to Horace Green
and Claude M. Fuess, both of whom have written care-
fully documented biographies of Calvin Coolidge. I must
also gratefully .mention William Allen White's Puritan in
Babylon. I acknowledge the general historical background
provided by Samuel Eliot Morison and Henry Steele Com-
xnager in their two-volume work The Growth of the
American Republic. Americal Social Problems by Howard
W. Odum contributed many details to the early part of
my book. I am also under obligation to Laurence Greene
for his splendid reporting of several news events in The
Era of Wonderful Nonsense.
vi ACKNOWLEDGMENTS
In preparing Chapter III, I made use of The Hoover
Administration by William Starr Myers and Walter H,
Newton, and The Hoover Policies by Ray Lyman Wilbur
and Arthur Mastic Hyde. Will Irwin's Herbert Hoover
was also consulted. John T. Flynn's Security Speculation,
M. R. Werner's Privileged Characters and Ferdinand
Pecora's Wall Street under Oath furnished much of the
material dealing with the Wall Street crash and aftermath.
Valuable, too, in this connection was Professor Ripley's
Mam Street and Wall Street.
In my account of the New Deal I have drawn on several
sources, principally the public papers and addresses of
Franklin D. Roosevelt, compiled by Judge Samuel L
Rosenman; Gerald W. Johnson's Roosevelt, Dictator or
Democrat?; Rexford Guy TugwelPs The Battle for
Democracy; and Charles Beard's America in Mid-Passage.
Professor Louis M, Hacker's account of the First Years of
the Ne*w Deal was helpful, as was Karl Schriftgiesser's The
Amazing Roosevelt Family.
My indebtedness to Drew Pearson and Robert S. Allen
is gratefully acknowledged; also my indebtedness to Fred-
erick L. Schuman and George D. Brodsky for their excel-
lent Design for Power. I have found Frederick Moore's
With Japan 9 s Leaders and A. Whitney Griswold's Far East-
ern Policy of the United States of inestimable value. Many
of my opinions on the foreign policies of the United States
were formed after a study of the works of Henry L. Stim-
son, Frank H. Simonds, and Professor James T* ShotwelL
Other books that have contributed information, ideas, or
viewpoints are: Albert Carr's America's Last Chance, Mid
dleto t wn by Robert S, and Helen M. Lynd; Fighting Years
by Qswald Garrison Villard; Civilization m the United
States, edited by Harold Stearns; American Prosperity , by
Paul M. Mazur; Law and Politics by F^lk Frankfurter;
Labor on the March by Edward Levinson; The Pulse of
ACKNOWLEDGMENTS vii
Democracy by G. H. Gallup and S. F. Rae; Life, Liberty
and Prosperity by Alfred Winslow Jones; Criminals and
Politicians by Denis Tilden Lynch; Isolated America by
Raymond Leslie Buell; The Great American Bandwagon
by Charles Merz; Simeon Strunsky's The Living Tradition;
James A. Farley's Behind the Ballots; Liston Pope's Mill-
hands and Preachers; Clayton J. Ettinger's The Problem
of Crime; Frank H. Simonds' Can America Stay at Home?;
Jay Franklin's 1940; Willard Price's Japan Rides the Tiger;
Walker Hepner's Effective Advertising; Thurman Arnold's
The Folklore of Capitalism and Victory through Airpo<wer
by Alexander de Seversky.
My thanks are also due to Betty Brown Parsons who
labored with unfailing enthusiasm in helping me prepare
the manuscript. Ralph E. Henderson gave generously of his
critical faculties and made many helpful suggestions for
which I am deeply grateful Albert Carr guided my steps
in many questions of international finance and politics. And
I am especially thankful to my friend Paul de Kruif who
undertook the laborious job of reading proof.
H. M. R.
CONTENTS
Prologue: As Winter Comes 3
I. THE ERA OF DEUCES WILD 7
1. O Pioneers! 7
2. The Great American Dream-Bed 14
3. The Enormous Lag 26
4. Conflict and Explosion 30
5. Italiscope (Pitch Note) 40
6. "Let Us Be Done with Wiggle and Wobble" 41
7. The Disarmament Follies 55
8* The Gang's All Here 63
9. Delving into the Et Cetera 71
. 10. Showdown 84
II. THE BUSINESS OF AMERICA IS BUSINESS 89
, i. Keep Cool with Coolidge 89
2. Formula for Prosperity 96
3* The Era of Wonderful Nonsense 107
4. Crime Did Pay 126
5. A House by the Side of the Road 137
6. "We Should Have Stood in Bed" 144
7. The Ticker Tape Falls Behind 151
8. He Didn't Choose to Run 162
III. JUST AROUND THE CORNER 169
1. Casey Hoover Mounted to the Cabin 169
2. The Captains Take to the Lifeboats 186
3. Peace Porridge Hot 190
4. Dollar Diplomacy with Moratorium Sauce 196
5. Just a Japanese Sandman 199
6. Flagpoles, Love, and Crime 202
X CONTENTS
7. Italiscope (Radio) 204
8^ Downhill with the Brakes OS 217
"9, Darkness before Dawn 228
IV. ON OUR WAY 234
j. Proceed to Battle Stations 234
2. The Blue Eagle Screams 240
3. Three Economic Corn Doctors 249
4. Nine Old Men 256
5. Labor Omnia Vincit 260
6. Depression Charivari 269
7. Italiscope (Ocean Queen) 272
8. Roosevelt Wasn't So Radical 277
V. ALL THE OMENS WERE BAD 285
1. The Great Neutrality Muddle 285
2. Crisis and Callithurnpery 291
3. Third Term and House Bill 1776 297
4. Cartels and Shortages 304
5. Pay-off at Pearl Harbor 3 1 1
Epilogue 326
Index 331
FANTASTIC INTERIM
PROLOGUE: AS WINTER COMES
DURING the bitter December of 1917, a young rifle coach
lay on the frozen firing-line of the sharpshooters' range
at Wakefield, Massachusetts, instructing Navy recruits in
the use of the then peerless (and still superbly beautiful)
Springfield rifle. Elevation, windage, trigger-squeeze, bolt-
action "1$ it all clear now?" That was his job, to explain
and demonstrate three hundred times a day precisely how
a 3o-caliber bullet could be made to travel in a controlled
trajectory from muzzle to bull's-eye. It was a humble
assignment, but the young rifle coach was happy in his
work, proud of his weapon, and prouder still that he was
helping train four hundred marksmen a week.
When afternoons of relentless cold waned to blue twi-
light and targets blurred in the darkness, the command
"Cease firing" would ring along the range. Numbed to
the marrow, the rifle coach and his companions would rise
from the snow and start for their tents at a dogtrot Not
much comfort in those tents. At night the wind, sweeping
across the i,ooo-yard range, gored men shivering behind
flimsy canvas walls. The rule was to sleep in your clothes,
wait for spring, and hope that pneumonia would not gag
you to death. One January night, with the mercury locked
at 20 below f *a young Texan named Cutting died that way.
The rifle coach remembers the incident well, because Cut-
ting was his tentmate and struggled pitifully in his arms
during the final delirium*
The cold was bearable because the rifle coach and his
companions were warmed by a secret flame that ran along
3
4 FANTASTIC INTERIM
their arteries singing "This is the war to end war." As
they groomed new batches of sharpshooters, or stood mid-
night watch under black pines fringing the ammunition
dump, they were sustained by a radiant faith: "This is
part of the crusade that will make the world safe for
democracy." That kindling faith carried them through
the war, only to fade reluctantly into the cruel, foolish
glare of the postwar day.
In December 1942, exactly twenty-five years later, I
try hard to recapture the dream of that little band of com-
panions who believed that the war they were fighting
would make the world a better place to live in. Did a
pure trust that spring was bound to come, play too great
a part in their calculations? Like millions of other Amer-
icans, they were willing to die for their country; but they
did not realize (apparently few realized) that death-
even the most heroic death solves nothing, guarantees
nothing. If dying were enough, the problems of the world
would have found solution long ago. Obviously some-
thing more than self-immolation is needed, else the better
world we plan for ourselves and our children will never
come into being.
Such a world will remain a smudged pencil sketch on
the back of an envelope until we renounce the follies and
evils that disfigured American life between the Armistice
and Pearl Harbor. The record of that interim appalls.
Political sloth, economic Phariseeism, moral decrepitude,
tinseled sentimentality, and brazen Baal-worship wrote a
saga of idiocy, signifying ruin. The land that might have
been a field of glory became a crazy quilt of exhibitionism.
The energy that could have changed the world was dissi-
pated in a thousand stupefying nothings.
Overworked historians, faced with a new war, will
probably never decide whether it was the people of the
United States or their leaders who mired the country
PROLOGUE: AS WINTER COMES 5
in the slough of moral beggary and intellectual confusion
in which it floundered on December 6, 1941. The prob-
lem may well be insoluble. When the indictment of ulti-
mate guilt seems about to fall on the voting masses, we
see them misled by political jobbers and mercilessly put
upon by their economic masters. Yet had the people been
vigilant, these false leaders could have been ousted. So at
last it becomes difficult to assign blame or apportion re-
sponsibility for the miseries and abuses that overwhelmed
us, and we can be positive only in declaring that a repeti-
tion of these abuses will dig the grave of our freedom.
Must the whole ghastly postwar farce be played all over
again? Will the procession of hooded futility once more
begin its ominous shuffling as soon as peace is declared?
Not so long ago the answer might have been: "Very prob-
ably, yes." But I believe that a different temper now ani-
mates the American people. Near-catastrophe has forced
us to acknowledge that major diseases as well as surface
inanities afflict our state, and that if we hope to survive
we must courageously pluck them out.
This book assails the grossest of these diseases and jibes
at some of the more ludicrous inanities. Of course it is
hindsight. There are few of us who did not at the time
condone some of the exhibitions and subscribe to many
of the errors chronicled in this volume. But it is not of-
fered as a wailing exhortation that we flog ourselves with
lashes of vain regret. What is past is prologue. Wisdom
and morality, profiting by yesterday's mistakes, are con-
cerned only with tomorrow. Fate has given the United
States that rarest of gifts, a second chance. Therefore, in
the most critical winter of our discontent, I set down the
record of the Fantastic Interim, in order that a realization
of its ugliest follies may prevent their ever happening again.
WOODSTOCK:, NEW YORK H. M. R.
DECEMBER, 1942
THE ERA OF DEUCES WILD
1. O Pioneers!
THE JUBILANT uprush of the Armistice rocket filled the
American sky with sparks of a golden hope. The war
was over. Heartbreak, sacrifice, and death had swept over
the nation like a plague-laden wind, but now the hurri-
cane was dying away. For this day's coming, the people
of the United States had waited, labored, skimped, prayed,
fought, and died. As our motives were pure, so our con-
science was clear. We had joined in the Battle of Europe
not for territorial gains or military advantage, but solely
to keep alive the processes of peace and democracy so
peculiarly prized by the American people. And now, with
the once terrible enemy suing for mercy, it seemed that
the forces of light were about to prevail.
For one glorious moment the United States might have
had, on exceedingly generous terms, the leadership of the
world. Europe was sunk in an abyss of physical and eco-
nomic exhaustion. The old tooth-and-claw system of
armed alliances and secret diplomacy was spiritually mor-
ibund, its exponents morally bankrupt. America alone
was young, fresh, buoyant with faith and hope; in arma-
ments, wealth, and man power, our position as the first
nation of the world was uncontested. To America, then,
7
8 FANTASTIC INTERIM
the staff of international leadership was offered by Wood-
row Wilson. With a flat gesture of default we declined
our destiny and forfeited all the objectives for which we
had entered the war.
Frightened by the responsibility of world leadership
thrust upon us at Versailles, we took off on a terrified
flight from reality. Unwilling or afraid to exert our ener-
gies on the colossal task before us, we leapt onto a gilded
carrousel of escapism and whirled through twenty years
of fatuous error and wonderful nonsense. The magnificent
energies that should have been spent in guiding the world
toward a Pax Americana were frittered away on bathing-
beauty contests, goldfish swallowing, million-dollar gates,
miniature golf, isolationism, stock-gambling, and assorted
charivaris. While the world sickened and fell into con-
vulsions without us, the United States eagle degenerated
into a pacifism-cheeping wren, and the American dream
became a neurotic fantasy.
"The light streams on the path ahead, and nowhere
else," said Woodrow Wilson. But like imperfect pioneers,
our eyes were turned backward to green comfortable val-
leys behind; unable to face tomorrow, we yearned only
for all our yesterdays. The mandate of world leadership
was too fraught with danger, too utterly opposed to our
traditional posture of isolation. In particular we dreaded
the implications of Article 10: "The Members of the
League [of Nations] undertake to preserve as against
external aggression the territorial integrity and existing
political independence of all Members of the League." To
American citizens Article 10 conjured up horrible visions
of expeditionary forces to remote countries with outland-
ish names Madagascar, Surabaya, Rangoon. This was the
pill that could not be rammed down the American gul-
let; nevermore would American blood be spilled in far-off
places and antipodal climes. How the impassive gods of
THE ERA OF DEUCES WILD 9
history must hold their bellies with ironic laughter, be-
holding the spectacle of our armed forces now struggling
in every quarter of the globe,
In vain did Wilson appeal directly to the people on a
long speaking tour that sapped his failing strength. Stony
silence or polite applause greeted the man who had for-
merly swung the world at his wrist. The old phrases leapt
forth still panoplied in elegance of spirit, but they no
longer moved his hearers. The American people were tired
of Woodrow Wilson and his Utopian eloquence. They
wanted only to sip the dollary soothing-syrup of profit,
to sleep, to dream, and let the rest of the world roll by.
This sheet-music concept of our national destiny was
skillfully orchestrated by a band of Republican Senators
who saw in the League issue an opportunity to recapture
the power and prestige for which they had panted since
1912. Their real concern was not so much the defeat of
the League as the destruction of their political enemy
Woodrow Wilson. They had powerful reasons for de-
siring his ruin; he had ousted them from their bastions
of privilege, curbed the brigandage of their industrial
masters, thwarted their monopolistic ambitions. And now,
finding him popularly vulnerable in his advocacy of the
League, these Senators closed in for the kill. Henry Cabot
Lodge, wizened mouthpiece of the New England textile
interests, said at the National Convention of 1920: a Mr.
Wilson and his dynasty, his heirs and assigns, or anybody
that is his, anybody who with bent knee has served his
purposes, must be driven from aU control, from all in-
fluence upon the Government of the United States."
But Lodge was not talking about the League of Na-
tions, His Back Bay hide was still smarting from blows of
the punitive "cat" wielded by Wilson in his New Free-
dom legislation of 1913.
"The control of wealth in the United States," said
10 FANTASTIC INTERIM
Wilson in that year, "is dangerously concentrated in the
hands of a few men who chill, check, and destroy eco-
nomic freedom." He insisted that the system of banking
and the issuance of notes become public functions. The
supreme fiscal power "must be vested in the Government
itself so that the banks may be the instruments and not
the masters of business." The Federal Reserve Act of 1913,
written by Carter Glass to Wilson's specifications, wrested
the monetary resources of the country from the hands of
a few men, produced greater elasticity and wider distri-
bution of credit. Wilson challenged and broke the Re-
publican protective tariff, uncontested since the Civil
War. "A high tariff," said Wilson, "makes 1 the Govern-
ment a facile instrument in the hands of private interests."
American industrial wits, he contended, would have to
be sharpened by competition with the outside world.
One further grievance the Republicans nursed against
Wilson; he had shown inexcusable interest io. the plight
of the laborer. When he declared in his first inaugural
"The Government must prescribe laws determining the
conditions of labor which individuals are powerless to de-
termine themselves," his heretic language shocked mill-
owners and public-utility magnates. The war interrupted
Wilson's labor program, but its threat was still remem-
bered by men like Senator Penrose, in whose state steel-
workers still labored twelve hours daily for seven days a
week.
Lodge and Penrose now saw in the League a heaven-
sent opportunity for destroying Woodrow Wilson. They
trailed him doggedly from city to city, mustering racial
blocs and timorous isolationists against the League. With
eyes riveted on the nineteenth century and its unlimited
laissez faire, they refused to see the present realities of a
narrowing world. Our switch from a debtor to a creditor
nation, our shift from the rim of international affairs to
THE ERA OF DEUCES WILD II
a position at the center of the world maelstrom, went
unacknowledged. The Senatorial hatchet men did not even
care. They were concerned only with welding anti-
League emotions into a tool serviceable to their own
design.
That design was to place in the Presidency of the
United States a man amenable to their influence and not
too distasteful to the voters. As Boies Penrose, grand vizier
of the Old Guard, bluntly phrased it: "We want a man
who will listen!"
The oligarchic band of Senators that defeated the
League of Nations was identical with the group that con-
vened in the smoke-filled hotel room at the Republican
National Convention in August 1920. They were met for
the urgent purpose of selecting the next President of the
United States. A torrid convention week had produced
no acceptable candidate; the sweltering delegates, sodden
with liquor and strapped for living expenses, wanted to go
home. Something had to be done, and quickly. Gloomily,
the President-makers canvassed the list of eligible third-
raters. Not a hero among them. Finally their eyes fell upon
the blank record of Warren Harding; here was the per-
fect composite of docility, party regularity, and eye-filling
fa?ade. At 1:00 A,M. the perspiring moguls nodded affirm-
atively, and Harding was already in the goodly company
of Washington and Lincoln. Next day, on the floor of the
convention, he romped in a winner. Harding's comment
on learning of his nomination was couched in the vernacu-
lar of his favorite pastime: "I feel like a man who goes in
on a pair of eights and comes out with aces full." The
words were appropriate; the stacked deck, the four-flush,
and the cashed-in chips were to become symbols of the
looting regime about to be saddled on the country by a
little group of willful men.
Wilson's lost cause was gallantly championed by the
12 FANTASTIC INTERIM
Democratic candidate, James M. Cox. Said Cox: "The
first duty of my Administration will be the ratification of
the Treaty." But the country would have none of it; by
a majority of 7,000,000 the people chose (or rather ac-
cepted from the Republican bosses) Warren Gamaliel
Harding as their new leader and twenty-ninth President
of the United States. Lodge, Smoot, Grundy, and Bran-
degee never regretted their choice. As late as 1923 Lodge
could say complacently: "Harding is very satisfactory to
the financial interests."
By a superb effort of will, Wilson rose from his sick-
bed and rode with the President-elect to his inauguration.
That brief journey was a Via Crucis for Woodrow Wil-
son, a barbaric ritual in which the demigod of Versailles,
now haggard and broken, was figuratively stoned by the
voices of his countrymen shouting for thek new hero.
Never was there a greater contrast between an outgoing
and an incoming President, or a wider disparity between
two philosophies of government. To Wilson, the Presi-
dency had meant an Archimedes lever that might have
moved the world to a more enlightened plane; to Harding,
it meant an opportunity to reward personal friends with
office and to serve unabashed the interests of a plutocratic
clique. Wilson's domestic achievements proclaimed him a
fighting liberal, a progressive humanitarian. Harding's ca-
reer revealed the otiose tory, Indifferent to the plight of
the laborer, unaware of the necessity of reform. To Wil-
son, "business" seemed but one of the legitimate uses to
which men might bend thek talents and energies. To
Harding, or rather to the men who had brought him to
power, "profits" were the avowed ends of existence, the
ultimate objective of the American way of life.
In the huzzas of the multitude, Wilson now heard the
American people drowning their conscience under the
waves of an ignoble and shortsighted expediency. He
THE ERA OF DEUCES WILD 13
could detect the eagerness with which they turned away
from the tangled pattern of European affairs to the easier
but in the end fatal program of isolation. He knew that
his hopes for a world order were dead, and that few
mourned their passing. But he knew more! In all the
United States that day, perhaps no other American could
see so clearly that his country had embarked on a tragic
expedition that would lead it through a generation of folly
to a fearful day of reckoning.
Three months before his death Woodrow Wilson stood
on the steps of his house, supported so that he should not
fall, and said with prophetic calm:
I have not the least anxiety about the triumph of the prin-
ciples I have stood for. I have seen fools resist Providence
before, and I have seen their utter destruction, as will come
upon these again utter destruction and contempt. That we
shall prevail is as sure as that God reigns.
These dark prophecies cast no shadow across Harding's
blithe prospects. As he rose to take the oath of office, a
McKinley carnation in his buttonhole, Melancholy had
not yet marked him for her own. In his inaugural address
he coined the solecism "normalcy," a word not to be
found in the lexicons of elegant usage, but carrying none-
theless precisely the right meaning for his audience. "Back
to normalcy" was the theme song of the occasion, a star-
spangled motif played with double-forte vigor and presto
enthusiasm by every instrument in the all- American band.
They blew it sweet, but it came out sour; they started
sharp and ended up flat. As the melody unwound, bar
after bar part jazz, part Sousa, part dirgemany began to
realize that the band was not playing in unison, and that
the music itself was a faded anachronism, a pitiful echo
of strings plucked long ago.
I4| FANTASTIC INTERIM
2. The Great American Dream-Bed
In the year of Harding's inauguration, the people of
the United States were sleeping in an enormous bed; the
richest continent in the world was their mattress, and al-
though the sleepers were many, there was room enough
for all. Between the joth and 50th degrees of latitude,
110,000,000 people sprawled, tumbled, procreated, and
dreamed the single dream of America's destiny and invin-
cibility. They were a somnolent lot, possessing neither the
pioneer energy nor the political vigor of their forebears.
Occasionally, wandering nightmares disturbed their slum-
bers; they would stir, cry out in terror, waken to see the
reassuring blue canopy of sky above their heads, then sink
back once more into trusting slumber.
The figurative bed in which the American people re-
posed was supported by the four pillars of private enter-
prise, popular education, political democracy, and religious
freedom. Each of these sturdy props was fulsomely
hymned by panegyrists; each in turn received the credit
for America's greatness among nations. As the century en-
tered the postwar decade, scarcely a dissenting opinion or
even a critical appraisal of the four pillars was heard, yet
at the base of each gnawed an ominous and invisible decay*
If subjected to increasing burdens or called upon to with-
stand unexpected strains, the supporting buttresses would
crumble, awakening the sleepers with rude reveilles of
alarm.
The stanchest and most celebrated of the supporting
columns was private enterprise, familiarly known as
"business." No human institution had ever performed such
miracles as this remarkable system of production, ex-
change, and transportation, which in so short a time had
developed America's enormous resources, crisscrossed the
THE ERA OF DEUCES WILD 15
continent with steel rails, and punctuated it with populous
cities. Business was the typical and preferred activity of
the United States, an activity so deep-rooted and all-em-
bracing that it had become almost a synonym for life itself.
Indeed the struggle for existence, once biological in im-
port, now referred almost exclusively to the battle for
survival in the business world. Nor could anyone, however
aloof in mind or spirit, escape contact with this system.
Everyone was drawn sooner or later to the glittering
booths of this great fair where talents, beauty, virtue, mer-
chandise, and men themselves were bought and sold at
prices supposedly commensurate with their value.
The achievements of private enterprise were unparal-
leled; nevertheless it was apparent even in 1920 that the
system was pitted with many defects and beset by serious
disorders. Its peaks of prosperity were counterbalanced
by troughs of depression; eras of unusual productivity or
expansion were followed by spells of paralysis. These
roller-coaster mutations, occurring with monotonous reg-
ularity, were solemnly explained and patiently borne as
unavoidable features of the "business cycle," much as Old
Testament plagues were accepted as visitations of God.
A still more palpable disease of the profit system was
the shocking inequalities of its prizes and rewards. Despite
a plenitude of natural resources and the blessings of a
kindly climate, alarming incongruities appeared in the dis-
tribution of wealth. Three-fourths of the people in the
United States were economically insecure; nearly half of
them were submerged in ugly poverty. The richest
700,000 citizens received as much of the national income
as the poorest 70,000,000. While the fortunate few pos-
sessed fine houses and well-padded bank deposits, 50 per
cent of the people owned only their own clothing and a
few chattels. Illness, unemployment, even a minor acci-
dent, would perilously tip the frail boat of their existence.
l6 FANTASTIC INTERIM
The average wages of the farm worker were $10 a week;
in nonagricultural pursuits, the unskilled laborer received
$15, the skilled laborer $20. One-third of all American
families had an average income of $450 a year; in diet,
housing, and clothing they were leading mean, stunted
lives barely above what Plato termed the "pig level" of
animal existence. Few of them would ever emerge onto
the human plane of achievement, comfort, or dignity.
Who were these people; where did they live? One
didn't meet them on the elm-shaded sidewalks of pros-
perous suburbs or along the broad avenues of metropoli-
tan commerce. They were textile workers, huddling in the
gaunt tenements of Carolina and Massachusetts mill towns;
sweated pieceworkers spewing out of garment factories
into the overcrowded slums of great Eastern cities. They
were immigrants from southeastern Europe who worked
in the steel mills and coal mines of Pennsylvania and Ohio.
Children, 800,000 of them, labored long hours at spindles
and looms, in canneries, and as migratory fruit-pickers.
Anonymous millions of Southern farmers tilled unpro-
ductive, submarginal fields, struggling to raise a few bales
of cotton or a miserable crop of potatoes or tobacco. Be-
low them were 9,000,000 Negroes and approximately one-
half that number of "poor white trash" Americans all,
yet prevented by disease, color, and economic barriers
from becoming shareholders in the promise of American
life. Instead of being a source of strength to democracy
and free enterprise, they were clogging encumbrances
which we tried unsuccessfully to forget. A century before,
Daniel Webster had warned: "The freest government
would not long be acceptable if the tendency of the laws
were to create a rapid accumulation of property in a few
hands, and to render the great mass of the population de-
pendent and penniless," Seemingly, the wisdom of Daniel
Webster had been little treasured by those who preferred
THE ERA OF DEUCES WILD 17
an unequal distribution of wealth to the continuance of
democratic government.
There was a fortunate group in America, comprising
approximately 5,000,000 families, which towered high
above the bulk of the population. They were the justly
celebrated middle class, possessing incomes between $2,000
and $5,000 annually. These people were sufficiently well
off to own modest homes, help the ablest of their sons
through college, and buy most of the automobiles, wash-
ing machines, and other commodities beginning to flow
from the American industrial machine. In morality, tastes,
ambitions, and recreations, the members of this group
were remarkably homogeneous; they set the dominant
tone in American thought and manners. It was to this
audience that enlightened clergymen preached, that ed-
itors of great magazines addressed their stories and Arti-
cles; for them, the movie-makers created celluloid dreams
and department stores planned eye-catching merchandise.
Receiving about 25 per cent of the national income, they
managed, by straining their budgets to the cracking point,
to purchase nearly 40 per cent of the goods (exclusive of
food) consumed in the United States.
A cut above them in tastes and ambition were 500,000
families whose income ranged from $5,000 to $10,000 an-
nually. These were the successful professional folk, the
upper tier of physicians, lawyers, small-town bankers, and
younger executives of advertising agencies, brokerage
houses, insurance, and public-utilities companies. The
American dream had sprinkled its star powder generously
over them, and they were eagerly articulate in defending
the status quo. Above them in income were their economic
superiors, 250,000 men who earned between $10,000 and
$50,000 a year, owned palatial homes, exerted quiet power
in state and local politics, sent their children to expensive
schools, and occupied prominent space in the social col-
l8 FANTASTIC INTERIM
limns. Close to the apex of the system was a small group
of 25,000 men who, with incomes between $75,000 and
$500,000, received as much of the national income as the
12,000,000 at the bottom of the economic ladder. They
managed or controlled large banks and industrial plants,
gave employment to hundreds of thousands of their fel-
low men, owned the yachts, and wore the gold button of
the economic nobility. Yet they were not the actual roy-
alists, the wearers of the deepest financial purple. The
kingly robes of ultimate economic power swathed only
the members of some 200 families, the "lords of creation,"
who, with their combined assets and interlocking direc-
torates, owned or controlled nearly half the country's
wealth.
Such a division of the nation's goods was far from
equitable, yet it caused surprisingly little heart-searching,
even by the "have-nots." Few Americans were perturbed
by the situation in which they found themselves. A cheery
tradition of unlimited opportunity told them that they
too could vault the steep walls of environment and find
themselves in the paradise of big money. They did not
realize that the economic cast was hardening like rapidly
cooling iron, that powerful concentrations of money in
a few hands was making it almost impossible for the indi-
vidual to "crack through" unless equipped by very special
ability. They did not understand that a terrific techno-
logical expansion was about to wrench the age-old tools
from men's hands and press human flesh desperately
against the machine for existence. They knew nothing
about these matters, and cared less. Few doubted that the
promise of American life would be fulfilled for them,
though most men would have been either vague or plati-
tudinous about explaining just how this was to be done.
Anyway, there was plenty of time to do it in; meanwhile,
the movie, the bowling match, tonight's date, and next
THE ERA OF DEUCES WILD 19
week's pay envelope occupied the frontal lobes and both
flanks of the American brain.
The second pillar of the American dream-bed was free
popular education, a fustian myth that had flourished
among the people ever since the Pilgrim Fathers erected
their first log schoolhouse on the shores of Massachusetts
Bay. In 1920, we were spending $750,000,000 on educa-
tion, but for some mysterious reason we were emphat-
ically not getting our money's worth. The vast majority
of Americans were mired in benighted ignorance; neither
in kind nor in extent was their education adequate to sup-
port the terrific burdens about to be laid upon it by a
society in transition. Out of the muck of the last war, a
surprising discovery had been churned upArmy intel-
ligence tests revealed that 95 per cent of our population
was below the mental age level of the fourteen-year-old
child. Nearly half of our people, according to the tests,
shaded downward from the eleven-year-old level to the
status of morons. In addition to this qualitative deficiency
was a grim shortage in the quantity of education the peo-
ple were getting. Barely half of our people had finished
grade school; the number of total illiterates in the United
States was nearly twice as large as the number of college
graduates. As late as 1930, of 200 Gold Star Mothers vis-
iting the battlefields of France, 50 could neither read nor
write English.
Primary education, with rare exceptions, had scarcely
changed since the days of pious McGuifey. In thousands
of red and yellow rural schoolhouses, pridefully regarded
as the backbone of American education, one schoolmarm
still rapped the basic three R's through the varying skull
thicknesses of thirty or forty children. All eight grades
were taught in one room; the rate of progress was fixed
by the dullest scholar. In the schools of larger centers,
the curriculum, though slightly broader and better taught,
20 FANTASTIC INTERIM
bore little reference to the needs of the students. The
pedagogic picture was one of clashing confusion and sub-
ordination of the teacher to political and religious pres-
sures. Socrates' query "Who will teach the teachers?"
was still unanswered; but whereas in the Republic of Soc-
rates teachers held primacy over kings and warriors, in
the American Republic the teacher was a kind of upper
servant, ill-paid and without intellectual influence in the
community or nation.
The secondary schools of the country were substantial
and well attended, but they provided scant preparation
for life in a transitional world. On a standard pattern
these schools offered Euclidean mathematics, Caesar's
Commentaries, the novels of Scott, some bowdlerized
Shakespeare, plus a smattering of United States history
gleaned from textbooks written during the Administra-
tion of Rutherford B. Hayes. Instruction in modern skills
and technology was rudimentary: show-card painting and
double-entry bookkeeping took care of the "commercial"
students. Utterly neglected was the inculcation of social
and moral courage, tolerance, a capacity for adaptation,
or any other training that would arm the student for suc-
cessful encounter with the outside world. The high schools
seemed bent only on getting through an archaic routine
in an apologetic manner, providing little wisdom for
young men and women whose fate was to be involved
with new and terrible machines. Yet a high-school diploma
was the loftiest educational goal to which all but the luck-
iest of American youth could aspire.
The indictment of colleges must be even more severe.
These institutions were exclusive, but exclusion was based
on no particular theory except the money pattern; a mere
150,000 students could afford to enter these academic
groves each year. Here they were nourished on stale slices
of Manchester economics, romantic literature, and aca-
THE ERA OF DEUCES WILD 21'
demic philosophies, a diet ill suited to prepare them for
the coarse-grained loaf of economic and political reality.
If true-steel leaders were to be trained, here if anywhere
was the place to shape them. But neither the fires of in-
spiration nor the hammer blows of discipline were pro-
vided by the colleges. Indeed the typical B.A. education
seemed a conspiracy between learned birchmen and text-
book-writersaided by football coaches and overempha-
sized social activities to prevent their students from dis-
covering what the world was all about.
In grim contrast to this genteel American schooling was
the education that Japan hammered into its youth. Ac-
cording to Willard Price, Japanese education synthesized
all of the world's knowledgethe best of the East, the
cream of the West. The current of thought flowing
through Japanese classrooms was like a parade of nations:
Chinese classics, Indian Buddhism, Russian Communism,
English law, French estheticism, American pragmatism,
German military drill, and Danish calisthenics. Japanese
students studied from fifteen to eighteen hours a day, com-
bining Spartan rigor with an intellectual zeal unmatched
in history. Japanese higher education took toll in physical
breakdowns, suicides, and nervous wrecks, but these
crack-ups were welcomed by iron-willed authorities who
decreed that the weak must be eliminated in order that
Japan might fulfill its destiny.
A touch of this disciplinary rod would have benefited
us hugely, for the era into which we were rapidly moving
was destined to tax the American mind with problems
that could be solved only by trained intelligence capable
of grasping huge masses of new information, ranging from
technical invention to political questions of world magni-
tude. Little such intelligence was being formed by our
schools. If democracy hoped to succeed, if the voice of
the people (on which Americans set such pious store)
22 FANTASTIC INTERIM
was to be effectively recorded at the polls and echoed
in wise policies at home and abroad, vigorous judgment
and mental discipline were required as never before.
Unhappily, the people showed neither the ability nor
the inclination to shoulder these new responsibilities. For
the most part they were not even aware that such respon-
sibilities existed. The American citizen in the year 1920
was a curiously slack-minded creature, blithely disinter-
ested in all matters not immediately connected with the
belly and the genitals. He knew little and cared nought
about either the plight of Europe or the ajff airs of his own
country. The fate of the newly founded Weimar Republic
or the chicaneries of the aluminum trust ranked in his
scale of interest far below the winner of the sixth race at
Pimlico or Ty Cobb's batting average. Was Briand plead-
ing for collective security? Who was Briand, and what
was collective security? General ideas on politics and eco-
nomics were nonexistent. Prejudices, fears, grasshopper
wishes, and inherited attitudes took the place of thinking.
Not that men were cynical or pessimistic, or even disillu-
sioned. Nothing so lofty as that. Sunk in the lethal vat
of petty pleasurings and day-to-day concerns, they func-
tioned almost exclusively in terms of food, sex, tobacco,
alcohol, and a half-day off on Saturdays to see a ball game.
To hold a job, get a Jz-a-week raise if possible, and as
the height of ambition to sit at the* wheel of one's own
automobile these were the horizons, not always achieved,
of 40,000,000 American men.
Human beings, it may be objected, were always like
this; sensual pleasure and herd pursuits have perennially
engaged their energies, and it is absurd to expect extraor-
dinary mental exertion or farsighted conduct from the
generality of men. Such, at any rate, is the argument of
the authoritarians. Hitler, in Mem Kampf, declares: "The
receptive ability of the masses is very limited, their under-
THE ERA OF DEUCES WILD 23
standing is small, their forgetfnlness great , , . Out of
indolence and stupidity, they trot towards their doom."
But Democracy made loftier assumptions about its citi-
zens. The social contract to which every American set his
hand and seal was posited upon a mentally alert, well-
informed, morally responsible citizenry, capable of meet-
ing the obligations of self-government and of disciplining
their private lives by self-denying ordinances. Yet if
Americans failed to accept these responsibilities (and in
the Era of Deuces Wild such failure was wanton and
widespread) the noble logic of self-government would be-
come fallacious, and the very basis of our free institutions
would be endangered.
For a supposed democracy in which the price of secur-
ity is constant vigilance intellectual, moral, and political
the United States was in a shamefully ungartered con-
dition. The people had lost all remembrance of democ-
racy's high original source. It was vaguely understood that
the Constitution guaranteed liberties to the common man,
but it was wholly forgotten that the Founding Fathers
had subordinated these liberties to the sterner concepts of
moral purpose and individual responsibility. These con-
cepts were unintelligible to, and not widely practiced by,
Americans of the post- Versailles period. "Liberty" had
degenerated into the license to exploit others; it had be-
come the shibboleth of the ruthless corporation, the plat-
itude of the vapid editorial writer. One had the "liberty"
to employ child labor, or grind men down by a twelve-
hour day. Logging companies had the "liberty" to lay
waste huge tracts of virgin forests; farmers had the "lib-
erty" to ruin the soil by vicious overcropping. But none
of these "liberties" was accompanied by a corresponding
sense of responsibility to the commonweal, lacking which,
democracy was doomed to deteriorate into a licentious
24 FANTASTIC INTERIM
free-for-all, the stronger trampling the weaker, the
shrewder exploiting the less acute.
And what had become of the "moral purpose" which
was the spiritual support of democracy? Seemingly, it had
evaporated. Democracy's mission as stated by Jefferson,
Lincoln, and Wilson to provide a model of government
based on ideal principles, to uphold the rights of the com-
mon man, to lead the thinking of the world, to translate
the noblest aspirations of men into concrete reality all this
had been eclipsed by the meaner, easier philosophy of
profit. The energizing cells of moral purpose, which alone
can give vitality and meaning to democracy, were
shrunken, depleted. One had but to think of the smoke-
filled room in Chicago to realize that "government of the
people, by the people, for the people," was going to perish
for the next few years.
Religion, the fourth pillar of the dream-bed, was wob-
bling perilously. Although there were 45,000,000 church
members and nearly 50,000 churches, the flame of * the
Holy Ghost was almost extinguished in the United States.
In great city pulpits, humanism and practical ethics were
the fashionable themes. As expounded by flattering theolo-
gians of this school, Christ was cut down to mortal di-
mensions; His robes of divinity were snatched from Him,
and He was tailored in the attire of the successful busi-
nessman. And in the hinterland, where Protestantism
reigned supreme, religion ceased to be a thing of the spirit
and concerned itself chiefly with condemning the natural
joys of sex, smoking, dancing, and card-playing. The em-
braces of love were cloaked with the haircloth of guilt
and prudery. While poor whites and immigrant workers
spawned like salmon, the dissemination of birth-control
knowledge was piously resisted by church organizations.
Venereal disease gnawed at the brains and bodies of
12,000,000 Americans, but so rigid was the censorship
THE ERA OF DEUCES WILD 2
of religious groups that the words "syphilis" and "gon-
orrhea" could not even be mentioned in the public press.
Tobacco was the shrub of evil and dancing was rhythmic
fornication according to blue-nosed Baptists and Method-
ists whose chief spiritual pleasures were snoopery, med-
dling, and reform. As Kitty Foyle said later: "Protestant-
ism did not prevent Americans from committing sin, but
it kept us from getting any fun out of it."
The economic plight of the Protestant ministry was par-
ticularly acute: for every $10 spent on moving pictures,
and every $7 spent on cosmetics, the churches received
for their support 9 cents per week. The average weekly
pittance of American clergymen was $14.13. The "min-
ister's barrel" was a feature of many communities: cast-off
clothing, knickknacks, and groceries were donated by the
faithful in lieu of cash. But lest undue sympathy be ex-
tended to the impoverished clergy, it must be remarked
that they received approximately what they deserved.
They were on the whole a mildewed lot, educated at
seminaries whose standards were far below the require-
ments of the B.A. colleges. Sectarianism and special inter-
pretations of religious dogma had pared down the spiritual
content of their theology to an almost invisible splinter.
As a substitute for the love and tolerance preached by
Christ, thousands of Protestant clergymen bellowed of
hell fire and damnation, and served up a balderdash of
Fundamentalism and bigotry. In such an atmosphere, "re-
vivalism" was bound to thrive. It did. There was rolling,
shouting, and "heaven-stomping" for the rural communi-
ties, and as the decade progressed, the large cities were
edified by the costlier handsprings of Billy Sunday or the
more ecstatic exhortations of Aimee Semple McPherson.
With the younger generation, a new morality was being
engendered. Young men and women were gleefully tear-
ing themselves loose from the old strait jacket of hypocrisy
26 FANTASTIC INTERIM
that governed their parents in matters of faith and morals.
A single standard and that a comparatively low one-
began to govern the easier commerce between the sexes.
Flaming youth, anatomized in F. Scott Fitzgerald's This
Side of Paradise, lighted rapidly melting tapers at the altar
of natural selection. Dancing was no longer a decorous
affair in which partners, separated by a discreet six inches,
glided through the graceful convolutions of the waltz.
Young fox-trotters and bunny-huggers, cheek glued to
cheek, syncopated to the sensual rhythm of the saxophone.
Young ladies and their white-gloved escorts no longer "sat
out" dances on prim gilt chairs ranged around the ball-
room. Instead they sought the unlighted refuge of the
parked automobile, where they necked, smoked, drank
from hip flasks, and made other perennial experiments and
discoveries.
3. The Enormous Lag
In sharp contrast to the rickety institutions of religion,
democracy, and education stood a vibrant and highly per-
fected technology, a source of pride and excitement to
the American people. It too had its defects, but feebleness
was not one of them; indeed, it seemed that all the vitality
of the United States had found deeply channelized expres-
sion in its dynamic, glittering machines. These breath-
taking engines were boldly transforming human life and
would alter it with increasing rapidity in the decade to
come. Science and invention, pressed into the service of
industry and enormously accelerated by the war, had de-
veloped a runaway technology that had already left our
cultural institutions far behind. Daily, the gulf widened
between our social institutions and our mechanical achieve-
ments, and this yawning discrepancy threatened the stabil-
ity and balance of American life. No plan was devised for
THE ERA OF DEUCES WILD 27
bridging the chasm between technology and culture; little
attempt was made to synchronize their rates of develop-
ment. Absurdly we tried to govern our new empire of
machines with social ideas originating somewhere between
the Bronze Age and 1800. Businessmen who would blush
to be seen in a five-year-old car proudly made medieval
pronouncements on economics. With wireless communica-
tions crackling between continents, politicians clung to
opinions of the mail-packet era.
Striking examples of this discrepancy were to be ob-
served in every phase of life. Consider, for example, the
well-established concept of individual thrift. Poor Rich-
ard's Almanac had lifted this homely virtue to a place
among the brightest planets in the American zodiac. a A
penny saved is a penny earned" was a cardinal maxim in
the copybooks of the preindustrial age still quoted by
banker-moralists as the basis of individual prosperity.
Good; we are agreed that thrift is an excellent thing; let
us by all means save money. But now comes along a high-
geared industrial machine, depending for its very exist-
ence on the buying power of a huge mass of consumers.
Hooked up to this machine is the wheedling and persist-
ent voice of advertising. "Spend, spend!" it shrieks, and
its exhortations are amplified on a national network by
every device at the command of industry. Tempted to
buy, yet wishing to save, torn between the ancient advices
of thrift and the new temptations to spend, the hapless
victim is utterly confused. He tries without success to
obey both injunctions, but his efforts to save money are
cunningly canceled by attractive invitations to spend it,
and the last state of his soul is more wretched than the
first.
In the broader sphere of national economy, the gap be-
tween institutional thinking and technological progress was
wide and deep. Take, for instance, the long-sanctified
28 FANTASTIC INTERIM
"protective tariff." Originally, there had been good reason
for this stout barrier; in 1815 our embryo cotton mills and
metal factories, struggling to compete with the giants of
British industry, had urged Congress to protect American
manufacturers by placing a high tariff on imported articles.
This plea was wisely granted; home industries would never
have survived without such protection. But as decades
passed and the American industrial machine grew might-
ier, the protective tariff operated solely to free American
manufacturers from foreign competition, to pour subsidies
into their pockets, and to keep prices artificially inflated.
In 1920 our machines were as good as anything that ex-
isted anywhere in the world, but Eastern manufacturers
still insisted on exorbitant duties on imported articles. Thus
an institution that had originally been an economic neces-
sity was now a political prerogative, a mere handout to
the manufacturing class.
Industrialists claimed that high tariffs were essential to
the high standards of American life. But the force of this
argument was lost upon millions of American workers
whose standard of living, though higher than European
levels, was not commensurate with the profits gleaned by
tariff-shielded industrialists. While mammoth fortunes
were accumulated by "protected" New England millown-
ers, the plight of factory workers in Lowell, Lawrence,
and Fall River was scarcely an eloquent argument for high
tariffs. If excessive import duties had actually benefited the
laborer, high-tariff apologists might have found new justi-
fication for their obsolete point of view. But in 1920 no
such justification could be found. "Protection" protected
no one but the manufacturer.
In every aspect of life, bleak discrepancies were appar-
ent. The code of romantic love devised in the twelfth cen-
tury by Provengal aristocrats was not precisely suited to
the biological needs of a $zo-a-week clerk, green with sub-
THE ERA OF DEUCES WILD 29
way pallor, courting his Bronx sweetheart. The Arcadian
theories of Rousseau were of slight value to schoolteachers
instructing the children of a mechanized society. The or-
ganization of labor was similarly archaic; although power-
driven machinery had supplanted the hand tool and the
foot treadle, labor unions were still patterned on a craft-
guild ideal a pathetic hangover from the Middle Ages.
Any concerted front that labor might attempt to make
against machines was destroyed by medieval "craft" alle-
giances that divided workers (in the metal trades, for in-
stance) into bands of tinsmiths, coppersmiths, silversmiths,
and goldsmiths each with its own set of interests, but with
no conception of the common stand that must be made
against the aggressions of technology. Even the Bible was
not exempt from the operation of the cultural lag. Biology
and chemistry had thrown new light on the mystery of
human life; geology and astronomy had lifted the curtain
on a vast stage of cosmic time, yet 50,000,000 Americans
doggedly clung to a literal interpretation of Genesis.
These and a thousand similar crevasses seamed the entire
structure of American life, threw the four posts of the
American dream-bed out of alignment, and caused a pro-
found restlessness which was to become more acute as our
equilibrium was still further disturbed. A properly edu-
cated or emotionally disciplined population might have
reconciled these conflicts and arrived at mature solutions
regarding them. But when Harding entered the White
House, few Americans were sufficiently educated or emo-
tionally well-balanced to make adult adjustments to a
changing world. In attempting to form conclusions about
such insoluble questions as saving money, drinking whisky,
going to church, keeping out of European politics, educat-
ing our children, or divorcing our mates, our psyches were
split wide open. Crime, insanity, suicide, stock-gambling,
labor unrest, political corruption, and the muddled diplo-
30 FANTASTIC INTERIM
macy which was ineffective to prevent a Second World
War were the far too expensive price we paid for failing
to adjust the laggard pace of cultural institutions to the
accelerating tempo of the machine.
Technology was not of itself a juggernaut of destruc-
tion. Our machines did not whirl us down the road to
perdition. They merely ran over us as we squatted by the
roadside.
4. Conflict and Explosion
Outward tokens of this inner, unrealized conflict began
to be displayed in violent emotional outcroppings shortly
after the Armistice. A whole civilization was straggling in
Laocoon combat with monstrous fears fear of Commun-
ism, fear of responsibility, fear of unemployment, fear of
alcohol The United States began to snarl itself in one
psychic tangle after another, expending vast energies in
useless conflicts, pitiful alarms, and wasteful excursions.
Our emotional excesses during the early zo's were patho-
logic; the nation was suffering from frustration in its most
violent form, the coitus interrupts of an unfinished war.
We had generated in the dynamos of war a terrific voltage
of energy then the struggle had suddenly ended. Our
bayonets were no sooner blooded in the Meuse-Argonne
than the Armistice trumpet sounded, leaving vast reser-
voirs of wrath untapped. This wrath, together with the
accumulated adrenalins of guilt and sadism that always
follow war, was now choked back upon the nervous sys-
tem of 110,000,000 Americans. There it curdled, churned
poisonously, and because it could not find expression in
the high martial adventure for which it had been gener-
ated, disgorged itself in a variety of vicious, pathetic, and
cruel forms.
The cultural lag tore us wide open as we made bewil-
THE ERA OF DEUCES WILD 31
dered attempts to apply traditional frontier solutions to
acute urban disorders. Since we could not swing axes at
virgin forests, we swung them at speakeasy doors. Al-
though the western gates of mobility were locked against
us, we raced aimlessly about the landscape in Fords and
Chevrolets. Because we could not kill Iroquois (or Ger-
mans) we killed and maimed each other in unprecedented
gang wars, race riots, lynchings, strikes, and floggings.
Baffled by a situation that required a culture as contem-
porary as our problems, we resorted to the tommy gun,
the tar brush, and the modern equivalent of the rack and
thumb screw.
Violence begot counterviolence as the emotional brew
boiled over in a hysterical foam of bigotry and persecu-
tion. The Fiery Cross of the Ku Klux Klan flared again
after sixty years of extinction, kindling racial and religious
intolerance throughout the country. With its mixture of
gibberish ritual and infantile arcana, the Klan appealed to
all that was mummery-loving and self-righteous among
the lower middle classes. Incidentally, it was a barefaced
racket, organized on a strictly cash basis by Imperial Wiz-
ard Evans. To speed the sale of memberships, the country
was divided into Realms headed by King Kleagles; the
Realms into Domains headed by Grand Goblins. Of the
$10 collected from new members, salesmen kept $4, the
King Kleagle pocketed $i, and the remaining $5 poured
into the Imperial Treasury at Atlanta. By 1925 the Impe-
rial Treasury was wallowing in a surplus of $5,000,000.
In the name of "white supremacy" the brothers of the
Fiery Cross perpetrated a series of mob outrages amount-
ing to a virtual reign of terror. They flogged Catholics
and Jews, branded Negroes, lyncEed, shot, and drowned
helpless victims. The Klan took charge of community
morals, performed shotgun weddings, tarred and feathered
"sex transgressors." Negroes who would not sell their
32 FANTASTIC INTERIM
property to white men. at a "reasonable" figure were a
special object of Klan vengeance. In Texas, colored men
and women were forced to pick cotton at substarvation
wages or feel the lash of the Klan. Fiery crosses of the
Invisible Empire burned with thermite heat through the
South and the Middle West. The Tulsa, Oklahoma, Klan
inducted t,ooo members in a monster ceremonial before
a Fiery Cross 70 feet high; 3,000 were initiated at one
meeting of the Klan at Plainfield, Illinois. At the crest of
the terror, 4,500,000 hooded figures were riding to weekly
conclaves held at midnight in wooded glens or empty lots
outside large cities.
Into these wounds of bigotry and hatred the salt of eco-
nomic disturbance was violently rubbed. A severe depres-
sion was in progress; in April 1920, 5,500,000 people were
unemployed. Mr. Zero was "selling'' jobless men on Bos-
ton Common, yet commodity prices were at wartime high,
and still rising. It was a period of widespread strikes for
increased wages to meet the high cost of living; violent labor
disturbances swept across the country, affecting every in-
dustry from the shipyards of Seattle to the subway workers
of Brooklyn. Cigarmakers, garment workers, meat-packers,
letter-carriers, actors, carpenters, and coal-miners all went
on strike, and were met by lockouts, injunctions, and Fed-
eral troops. Employers grimly resisted wage increases,
fought the recognition of unions, refused to fulfill war-
time pledges of higher pay and shorter hours to working-
men.
One of the sorest spots in the labor picture was the steel
industry. In U. S. Steel Corporation mills, laborers worked
twelve hours a day with an uninterrupted twenty-four-
hour stretch every two *weeks. Their average earnings, ac-
cording to the Inter church Report of 1919, were below
the "minimum of comfort levels for families of five." The
rate for unskilled labor was 30 cents an hour, no extra pay
THE ERA OF DEUCES WILD 33
for overtime; if the worker was ill, he received no pay at
all During the previous four years the steel company had
made $335,600,000 in profits, but Judge Gary, head of
the steel company, preferred to build up a huge dividend
reserve rather than disburse this fund in higher wages to
workers.
Gary refused to recognize the newly formed union of
steelworkers, saying: "Labor unions may have been jus-
tified in the past, but at present there is no necessity for
them/' Unable to feed their families on this oracle juice/
the steelworkers struck on September 22, 1919. Federal
troops under General Leonard Wood (at that time heavily
supported for thq Republican nomination) were called out
to quell the disturbances. In the battles between strikers
and operators, nine workmen were shot, sixty wounded.
After a three-month tug of war, the strike failed; the A.F.
of L. conceded defeat, and the men went back to their
twelve-hour stint at no increase in wages. Labor was not
yet powerful enough to demand the application of the
democratic principle to industrial life.
It was the fashion to blame labor violence and other
unrest on the Reds, or "Bolsheviks." In 1920 "Bolshevism"
was not a mere word; it was a Gargantuan bogey. An ex-
aggerated fear that the Russian Revolution would over-
throw the capitalist structure of the United States was
widespread and hysterical Secretary Hughes, picking his
steps in foreign affairs like a nervous woman passing down
a corridor infested with mice, refused to negotiate even a
trade treaty with Moscow. "There is nothing to negoti-
ate," he declared, Calvin Coolidge as Vice-President wrote
an article for a woman's magazine: "Are the Reds Stalking
Our College Women?" Actually, the number of Com-
munists was microscopically small, estimated at 100,000,
or less than one-tenth of i per cent of the population. But
the "Reds" provided the perfect string on which the na-
34 FANTASTIC INTERIM
tion could bead its neurotic fears and tell them in pious
orgies of superpatriotism.
Even the "Boston police strike was blamed on the Com-
munists. The Philadelphia Public Ledger gave editorial
utterance to the fear that the country was about to be
overthrown by a Bolshevist conspiracy:
Bolshevism in the United States is no longer a spectre.
Boston in its chaos revealed its sinister substance. In their
reckless defiance of the fundamentals of morality, in their
bullying affront to the structure of civilization, wherein do
the police of the New England metropolis differ from the
mad minority which ruined Russia? Only an arrant casuist,
a fatuous hair-splitter can proclaim a shade of contrast. The
nation has chosen. If ever it was vague in its conception of
the Bolshevist horror, its vision is clean-cut now. So is the
issue. Defiled Boston has seen to that.
Few people knew the difference between Socialism and
Communism or took time to investigate either. On May
i, 1919, United States soldiers, sailors, and marines raided
the office of the New York Call, a Socialist newspaper,
beat up the editors, and threw typewriters (dangerous Red
machines!) out of the windows. On November 10 the
House of Representatives unseated Socialist Victor L.
Berger of Milwaukee by the nigh-unanimous vote of 309
to i. Influenced by this purge of radicalism, the New York
State Assembly on January 7, 1920, barred five properly
elected Socialist members. Red-baiters and night-riders
were making liberalism a hunted thing.
Fuel was thrown onto the Red-baiting pyre by a series
of bombings,, culminating in a frightful explosion in the
New York financial district on September 16, 1920. A few
moments before noon that day, a horse-drawn express
wagon pulled up at the United States Subtreasury Build-
ing at the corner of Wall and Broad streets, opposite the
offices of J. P. Morgan & Company. The driver of the
THE ERA OF DEUCES WILD 35
wagon disappeared. A few minutes later a detonating roar
shook lower New York; a bomb in the express wagon
had exploded, killing thirty-eight persons in the crowded
streets near by, and injuring hundreds more. Acres of plate
glass were shattered, steel doors twisted on their hinges;
the property damage was estimated at $2,000,000. Investi-
gation proved nothing; to this day the blast has never been
explained. Little doubt existed at the time, however, that
the bomb was a terroristic machine planted by Reds at the
nerve center of financial America.
Into this highly carbureted vapor of terrorism and hys-
teria, a match was flung on April 15, 1920, at South Brain-
tree, Massachusetts. A shoe-factory paymaster named Par-
menter, and his guard Berardelli, were robbed and killed
while returning from the bank with a pay roll. Three
weeks later two Italians, Nicola Sacco and Bartolomeo
Vanzetti, were arrested and charged with the crime. In
Sacco's pocket at the time of his arrest was a Colt pistol
of the same caliber as one of the four bullets removed from
BerardellFs body. Vanzetti, a fish-peddler, had been openly
engaged in distributing radical propaganda. Both defend-
ants were put on trial on May 21, 1921, in the court
of Judge Webster Thayer, an ultraconservative jurist
clearly biased by the radical activities of the defendants.
The prosecuting attorney, one Katzmann, inflamed the
mind of the jury by appealing to the strong antiradical
sentiment current at the time. But the prosecutor went
further; he made it appear that Captain Proctor, the state's
ballistic expert, had identified one of the fataF bullets as
coming from Sacco's pistol. Judge Webster's charge to the
jury maximized Proctor's testimony and grossly distorted
the evidence of other witnesses. In an atmosphere tense
with prejudice, on July 14, 1921, Sacco and Vanzetti were
found guilty of murder in the first degree.
The verdict passed by the American public without
36 FANTASTIC INTERIM
much notice, but the repercussions in Europe and South
America were terrific. A lively radical press in France,
Spain, Italy, and Brazil took up cudgels for the convicted
men; demonstrations and bombings occurred in Paris and
Lisbon; in Montevideo there was a general strike and an
ugly boycott of American goods. As echoes of these dis-
turbances reached the United States, the Sacco-Vanzetti
case became a cause celebre, and widespread sympathy
arose for the two men.
There was something about these convicted felons, es-
pecially Vanzetti the dreamy fish-peddler, which prompted
the American public to wonder whether strict justice had
been done. Vanzetti's gentle demeanor, and the philosophic
letters he wrote from jail, caused general interest in the
subsequent attempts to obtain a retrial. The first motion
for a new trial, based on an affidavit by Captain Proctor
in which he reversed his testimony about the fatal bullet,
was denied by Judge Thayer. An appeal was then made
to the Supreme Court of Massachusetts, which found "no
error" in the rulings of the lower court. It should be
pointed out that the guilt or innocence of Sacco and Van-
zetti was not retried by the Supreme Court. Under the
archaic Massachusetts law, the Supreme Court could not
inquire whether the facts, as set forth in the record, jus-
tified the verdict. The only point reviewed was the judicial
discretion of Judge Thayer. By some weird process the
Supreme Court found that Judge Thayer had been gov-
erned by "the calmness of a cool mind, free from impar-
tiality, not swayed by sympathy, nor warped by prejudice
nor moved by any kind of influence save alone the over-
whelming passion to do that which is just."
At this point a Portuguese named Madeiros confessed
that he, in company with a gang of professional bandits,
was guilty of the Braintree crime. The Sacco-Vanzetti de-
fense ably marshaled a mass of evidence corroborating Ma-
THE ERA OF DEUCES WILD 37
deiros' confession, and petitioned Judge Thayer for a new
trial. Again Thayer denied the motion in an opinion de-
scribed by Felix Frankfurter, then a professor of law at
Harvard University, as "a farrago of misquotations, mis-
representations, suppressions and mutilations." Frankfurter
added: "I assert with deep regret, but without the slightest
fear of disproof, that certainly in modern times Judge
Thayer's opinion stands unmatched for discrepancies be-
tween what the record discloses and what the opinion
conveys."
Aroused public opinion forced Governor Fuller of Mas-
sachusetts, bewildered by the technicalities of the evidence,
to appoint a special committee to investigate the case. The
finding of this eminent committee, comprised of President
Lowell of Harvard, President Stratton of the Massachu-
setts Institute of Technology, and Judge Robert Grant,
was that Sacco and Vanzetti had been tried and convicted
according to due process of law, and that the conviction
should stand. The two men were executed on August 22,
1927.
Today it appears that Sacco and Vanzetti were egregious
victims of the injustice that occurs when political emo-
tion is permitted to blur judicial procedure. Early in the
case, the State Prosecutor wrongfully injected the element
of Communism into a commonplace holdup. He sought to
secure a conviction on prejudice rather than evidence; in
this attempt he was supported by a stupid judge, who in
turn was sustained by an antiquated and harmful system
of judicial review. The whole affair slipped beyond con-
trol of these men; public resentment snowballed to huge
proportions; partisan judgment was distorted, until at last
Sacco and Vanzetti appeared as martyrs, if not indeed
heroes. Their death probably exaggerated the minor role
they had previously played in the radical movement. But
more importantly, it demonstrated that civil liberty the
38 FANTASTIC INTERIM
right to a fair trial, for instance could be more grievously-
jeopardized by men like Thayer and Katzmann than by a
pair of obscure "Reds."
Though judicial reform seemed to be indicated, the re-
formers were mostly busy elsewhere. The wave of Puri-
tanism was running high. Dr. Charles G. Pease of New
York was sounding oif on a nation-wide antitobacco cam-
paign. "Nicotine is a blight worse than alcohol," opined
Dr. Pease. It was a crime to sell cigarettes in Kansas and
Iowa; "coffin nails" were taking a terrific hammering from
pulpits throughout the country. In Boston, James Branch
CabelPs Jurgen was banned by the Watch and Ward So-
ciety, and sooo. James Joyce's Ulysses was to become con-
traband of the Devil. A movement to stamp out popular
songs was started by the General Federation of Women's
Clubs. "Ninety per cent of popular songs are unspeak-
able," said Mrs. Anne Oberndorfer, chairman of the Musi-
cal Committee. "Of the 2,000 songs we examined, only 40
were fit for boys and girls to sing together. Don't you
think it's high time for parents to do something about it?"
Mrs. Oberndorfer failed to mention the objectionable
songs by name; she did, however, recommend to the
younger generation "Keep the Home Fires Burning" and
"A Long, Long Trail A- Winding." Somehow Mrs. Obern-
dorfer's censure did not deter young people from singing
"Last Night on the Back Porch I Loved Her Best of All,"
and "How Ya Goin' to Keep 'Em down on the Farm,
after They've Seen Paree?"
But the neurotic masterpiece of the age was the Pro-
hibitionist victory over Demon Rum. The Eighteenth
Amendment was a legislative farce, a mixture of peniten-
tial atonement and well-timed opportunism, engineered by
a strange coalition of Eastern millowners, Southern plant-
ers, and fanatical "drys" of the alfalfa steppes. Planters
and manufacturers unanimously held that their over-
THE ERA OF DEUCES WILD 39
worked, underpaid laborers, white and black, should be
deprived of the temptation to drown their troubles in al-
cohol. The worker could "produce more" if his head were
not befogged, his hand unnerved, by the degrading ale he
drajik at the poor man's club, the corner saloon.
Into the bulbous nose of this disreputable but much-
loved institution, the White Rose of Temperance had
been thrusting itself pugnaciously for several years. The
Corn Belt had already sniffed its arid perfume, but stout
drinkers from less enlightened regions merely leered and
continued to debauch themselves: few tipplers heeded
William Jennings Bryan when he warned of the snake in
every glass. But the war gave Prohibitionists an unexpected
opportunity to inflict penance upon a sinful nation. Told
that liquor impaired the fighting ability of the country,
the people witlessly resigned themselves to the loss of al-
cohol. With 3,000,000 young men absent from the polls-
disenfranchised by overseas servicethe coup was sprung
by a well-organized minority of professional "drys." Sheer
fanaticism, needled by wartime psychology, won a trem^ti-
dous victory when the Eighteenth Amendment was finally
ratified by thirty-six states by January 1919. The Volstead
Act, written by the Anti-Saloon League as an enforce-
ment measure, went into effect on January 16, 1920, and
for thirteen years thereafter it was illegal to buy a glass of
wine or a stein of beer in the United States.
Puritanic virtue had ushered in a dry millennium that
was to cost the United States billions of dollars and many
a remorseful headache. The "noble experiment" was des-
tined to produce more crime, vice, moral defilement, and
political hypocrisy than any piece of legislation in the his-
tory of the world. The White Rosette, supported by mer-
cantile Pharisees, became a force in national affairs, and
for many years the voice of the Puritanic weasel was
heard throughout the land.
40 FANTASTIC INTERIM
5. Italiscope (Pitch Note}
Midsummer 1920. On a blistering Boston sidewalk a
mob of frenzied men and women jostle each other for a
place in the line leading to the shabby office of Charles
(Fifty Per Cent) Ponzi, a little man with a big idea. Ponzi
has struck the pitch note of the era, and the people leap
and gambol like lambs to the Golconda vibrations of his
enchanted pipe. The formula is simple: You hand $100 to
Ponzi, who gives you a slip of paper promising you $150
in ninety days. According to Ponzfs glib explanation, he
uses your money to buy "postal reply coupons" in Italy
and other foreign countries, taking advantage of the inter-
national exchange to make 400 per cent profit.
In six months, Ponzi has taken in $6,000,000 and dis-
bursed about $2,000,000. His fame is flying noiv. Laborers,
little shopkeepers, and domestic servants withdraw their
lifetime savings from the bank and fling rolls of sweaty
bills into Ponzfs lap. His desk drawers, even the wastepaper
baskets of his office, are crammed with currency. Boston
banks begin to be alarmed; soon Ponzi will have all the
money in New England. Newspapers devote front pages
to his operations. Is he crooked? Is he straight? Has he dis-
covered a new formula for wealth, or is he a menace to
the sobriety and order of the masses? These questions are
answered when the United States District Attorney makes
an audit of Ponzfs books. The audit, plus a police inves-
tigation, chips the gilt off Ponzi's tambourine. It seems that
Ponzi, alias Ponsi, alias Bianchi, has served two terms in
prison, and is wanted for other crude swindles. The little
Sicilian is suffering from fiscal dementia. Ponzi is crazy,
and the people are going to lose their money.
When the crash comes, Ponzi owes six times more than
he can pay. The postal-coupon story is sheer imagination;
THE ERA OF DEUCES WILD 41
he has merely been taking in money faster than he pays
it out. As he sits in the "Plymouth jail, his paranoia build$
still more stately mansions of finance. "After I am re-
leased" he says, "I will begin my life's <work. Bank depos-
itors are not getting a square deal. I shall endeavor to cre-
ate an institution where the depositor will get what he
ought to get"
Twenty-five thousand of Ponzi's depositors got just
what they deserved, which is to say, goose eggs. Once
shorn, twice shy? Not at all. When the next piper trills
the pitch note of easy money, the lambs will come bleat-
ing again and the clacking of shears. will add a pastoral
touch to the American idyl.
6. "Let Us Be Done with Wiggle and
Wobble"
The Weird Sisters must have cackled mirthfully as they
wove the thread of Warren Harding's life into the main-
sail of history. Never was so common a skein selected for
such heroic service; never did a seemingly fair strand re-
veal fibers so patched and shoddy. If Warren Harding had
been left to sail his political boat in the muddy waters of
an Ohio millpond, all might have been well. But Harding
was a fair-weather politician whose misfortune it was to
be caught in a Presidential twister.
Harding was strikingly handsome in the grand Roman
manner; Mark Sullivan said of him that he was the only
man in the Senate who could wear a toga and get away
with it. But apart from his profile, Harding had few qual-
ifications for the Presidency. He was innocent of states-
manship, utterly unfamiliar with foreign affairs, baffled by
the complexities of international or even national finance.
His intellectual luggage, picked up as an Ohio politician
and editor of the Marion (Ohio) Star ? was meager. Wil-
42 FANTASTIC INTERIM
Ham Allen White says of him: "As an editor, Harding
never wrote a line that has been quoted beyond the con-
fines of his state." H. L. Mencken compared Harding's
literary style to a "string of wet sponges." The success
of his newspaper was due largely to the managerial ability
of his wife, Florence Kling Harding, familiarly known as
the "Duchess," a marcelled and dominating shrew eight
years his senior who, when her own acid convictions failed
her, consulted crystal-gazers and fortunetellers for guid-
ance.
Harding's record as Senator he had entered the upper
chamber in 1915 when "pork was king" was a tabula rasa
of party regularity and personal inconsequence. He drew
his salary and mileage, sent out free seeds, and skimped on
his committee work. He introduced no important legisla-
tion; one of his major bills covered the transfer of some
old Army tents to the Boy Scouts. On national matters he
voted with the Republican Old Guard, and was in all
things a dutiful cog in the reactionary Grundy-Penrose
machine. He fancied himself as an orator, but when he
arose to speak, his fellow Senators settled back for a good-
natured nap. Harding's speeches, which he himself called
"bloviations," were of the "glory-talk" variety, orotund
and lengthy; in search of an idea, he could and often did
declaim opaquely for ninety minutes by the Senate clock.
In addition to his prowess on the alto horn which he
had proudly blown in the hometown band, Harding was
an indefatigable poker-player. While Europe languished
and Japan crouched, "W. G." regularly spent three nights
a week drawing for full houses and inside straights. Lest
his companions parch, the President supplied plenty of
liquor; he himself always had a glass at his elbow. Rumors
about these White House parties were rife, "But no ru-
mor," says Alice Longworth, describing * Presidential
poker party at the White House, "could have exceeded
THE ERA OF DEUCES WILD 43
the reality. The study was filled with cronies, Daugherty,
Jess Smith and others, the air heavy with tobacco smoke,
trays with bottles containing every imaginable brand of
whiskey stood about, cards and poker chips ready at hand
a general atmosphere of waistcoats unbuttoned, feet on
the desk and the spittoon alongside."
Moreover, Harding liked the girls. His heart leapt up at
the rustle of the extramarital skirt, and it is established that
his affair with Nan Britton resulted in an illegitimate child.
According to Ike Hoover, major-domo of the White
House, Harding did not confine his gallantries to Nan
Britton, but was a "sporting ladies' man" whose $20 lech-
eries, sandwiched in between strokes of statecraft, were
the talk of Washington's boulevards.
Harding had many endearing qualities as a man. He was
sincerely fond of his fellow human beings, pathetically
eager to be loved, and quite ready to perform any favor
that would grease the machinery of good-fellowship. But
these attributes, however admirable in a private citizen,
were not the qualities best calculated to guide the United
States through the critical pass of reconstruction. Har-
ding's utter inability to judge men or penetrate issues, his
bewilderment when confronted by any idea more complex
than a partisan appointment, his naive dependence on the
"Best Minds" to solve national difficulties, and his readi-
ness to follow these intellectual behemoths wherever they
might lead, stamp Harding as the weakest President since
the whimpering Buchanan.
Harding never read a book on taxation, sociology, or
government; these dismal sciences were frankly beyond
his ken. Once, straggling with the complexities of a tax
bill, he pathetically complained to a secretary: "I can't
make a damn thing out of this. I know somewhere there
is a book that will give me the truth, but hell! I couldn't
read the book!"
44 FANTASTIC INTERIM
Armed only with an affable handshake and a trusting
disposition, Harding was fated to be seduced like a green
girl at a county fair by men cleverer and more sinister than
himself.
Who was the real leader of the United States during
Warren Harding's term of office? Not Charles Evans
Hughes, whiskered and pontifical, who held the portfolio
of State, and timorously returned unopened all letters post-
marked "Geneva." Not the aging Lodge or the dying Pen-
rose, both of whom, having done their work, were fret-
fully fading into oblivion. Certainly not Calvin Coolidge,
vinegarishly perched on the Vice-Presidential shelf; nor
Daugherty, nor Fall, whose scandalous records of mal-
feasance were later to rock the country. Assuredly it was
not the President himself, who looked dutifully to Con-
gress for leadership; neither was it Congress, a troop of
mediocrities who vainly besought the White House for
executive guidance. Who, then, formulated the policy of
the nation, pulled the strings that made the marionettes of
government leap and nod? Who, in short, was boss?
No one doubts now that Andrew Mellon, Secretary of
the Treasury, was the puppet master of the Harding and
Coolidge administrations. For nearly ten years, no one
approached him in power or equaled his coldly savage
determination to use that power. Hailed as the financial
genius of all time, respectfully heard whenever he lifted
his weak voice to its characteristic half-whisper, grate-
fully acclaimed by a people to whom his "Mellon Plan"
brought a floodtide of prosperity, Andrew Mellon, white-
mustached and emaciated, overawed three Presidents, bul-
lied all opposition, and worked his royalist will unchal-
lenged on the people of the United States.
There was no dark conspiring to get Mellon the Treas-
ury post. He merely let it be 4<nown to Boies Penrose that
he wanted the office as an ornamental period to a long
THE ERA OF DEUCES WILD 45
career. Penrose gave Harding the word and the word was
law. Harding had never heard of Mellon. During the
front-porch campaign, Mellon had made a respectful pil-
grimage to Marion, and Harding shook hands with him,
never knowing who his visitor was. But the President had
since received some quick tutoring, and now demonstrated
his aptness by choosing "exactly the right man," as the
papers said, to be custodian of the country's fiscal interests.
At the time of his appointment, elegant-fingered An-
drew Mellon was sixty-six years old, and one of the three
wealthiest men in the country. 1 He was the perfect fruit
of the profit system, the archetype of capitalism in its
flowering stage. Born rich, he had devoted his entire life
to pyramiding still greater riches; in 1920 his financial
holdings were surpassed only by those of Rockefeller and
Ford. But the Mellon fortune was unique in this it was
not founded on any single method of garnering wealth.
Morgan might lend money, Rockefeller dominate oil, Van-
derbilt manipulate railroads, but Mellon owned banks,
steel mills, coal mines, and coke factories, controlled Gulf
Oil (largest of the independents), made railroad cars, held
vast blocks of real estate, managed public utilities, and last
of all, monopolized the aluminum industry of the United
States. The Union Trust Company of Pittsburgh was his
bank, a gigantic but noiseless roller-bearing on which his
vast industrial empire turned. It financed his own enor-
mous enterprises, and loaned millions of well-secured dol-
lars to the steel magnates, coal barons, and industrialists
of Pennsylvania and neighboring states.
Andrew Mellon's code was "Buy cheap, sell dear, and
allow no one else a profit." The keystone of his fortune
was his ruthless use of monopoly and the tying up of basic
patents, which, together with his shrewd restriction of out-
1 In this and the following paragraphs I have drawn heavily on Mel-
loris Millions by Harvey O'Connor, John Day, 1933.
46 FANTASTIC INTERIM
put, enabled him to hold prices at artificial levels while he
gouged the consumer. His instinct was to corner every
possible market and process, and he was as cruel as a stoat
in killing off competition. So successfully had he adhered
to this formula that when he became Secretary of the Treas-
ury his personal wealth was estimated at $1,500,000,000.
Incomparably, he was the richest man ever to hold office
in the United States.
For the thousands of men, women, and children who
labored in his mills and mines, Mellon cared less than noth-
ing; they were merely another commodity, to be bought
cheap and operated for profit. By means of low wages and
lay-offs, he kept his workers in virtual peonage; they lived
in gaunt shacks in miserable company towns, brought
children into a world of dejected poverty and squalor
from which few could escape. If native American labor
rebelled at these conditions, Mellon fired them, and hired
immigrant hunkies from Poland and Yugoslavia. If these
protested, as they sometimes did, Mellon imported hordes
of Negroes from the South to turn the heavy wheels of
his industries. No one in the State of Pennsylvania dared
challenge him; it was his private bailiwick, a patrimony
handed down to him for exploitation. Its political machine
was unspeakably corrupt, yet it suited Mellon not to bridle
the activities of its grafters and lobbyists. The city of Pitts-
burgh, where Andrew Mellon had been born and spent
his life, was one of the ugliest spots in America. Its smoke-
hung skies and the banks of its confluent rivers were be-
fouled with the debris of Mellon factories. Everything
King Andrew touched became gray and drained by the
suction of his tentacles. The industrial De J Medici had
gathered one of the greatest art collections in the world
(old masters, all not a contemporary American among
the lot), but the truth is that Mellon cared little for his
pictures as works of art. He valued them as investments,
THE ERA OF DEUCES WILD 47
a kind of international gilt-edge bond that could be cashed
at any time or sold at a profit.
Such then were the achievements and characteristics of
the wrinkled man who during the next twelve years was
to be the financial dictator of the United States. He knew
exactly what he wanted; his policies were decisive, and he
drove them home. His slightest action was accompanied
by chants of praise from an admiring press. Burbled the
Saturday Evening Post in 1925: "Admitting the genius
of Hamilton, and of other secretaries who followed him,
none of them is so completely the master of finance as
Mellon."
Yet despite his wealth and presumed intimacy with fiscal
affairs, Andrew Mellon brought to office a curiously my-
opic concept of international finance. To the crucial ques-
tion of the war debts he applied the pinched perspective
of a provincial banker; in Mellon's opinion, collecting
$11,000,000,000 from our European Allies was exactly the
same as collecting a $5,000 note from a harassed Wheeling
mine operator. He failed utterly to grasp the relationship
between war debts and tariffs; his idea of straightening
out the German reparations tangle was to permit Amer-
ican private bankers to advance $2,500,000,000 to Ger-
many, then sell German bonds (foredoomed to repudi-
ation) to the American people.
Fiduciary trust is a cornerstone of private business. Yet
Mellon's Union Trust Company one of the five banks to
sell Kreuger & Toll securities to the American investor-
was apparently satisfied with the integrity of these issues.
But this same bank was scrupulously careful in examining
the collateral offered by Kreuger when the latter came
to Mellon's bank for a personal loan.
So* great was. the fiscal genius of Andrew Mellon that
9,300 banks failed during his term of office, as against
2,000 in the preceding sixteen years. During this period
48 FANTASTIC INTERIM
there was only one bank failure in Canada and none at all
in England. While Mellon cannot be entirely blamed for
the collapse of our banking system, the record shows that
his policies contributed powerfully to the ultimate crash.
The rocket of prosperity that he ignited came down a
dead stick; the whole nation lay charred under the funeral
pyre of the "Mellon Plan." When it was all over, even
the Saturday Evening Post had to confess ruefully: "We
may now admit that Andrew Mellon was not the financial
genius he was once stated to be.*'
In 1921, however, not even the gloomiest Cassandra
could foresee the dark griefs stirring in the bowl of the
future. The greatest Secretary since Hamilton was brew-
ing a potion of tax reduction, a draught eagerly awaited
by oppressed corporations who, declared Mellon, "are
staggering under a burden of taxation that calls for im-
mediate relief." Mellon soon revealed the lines his relief
program would follow. Nothing was said about reducing
the taxes of men earning from $3,000 to $10,000 a year;
these would continue to pay at the old rate. It was on
incomes exceeding $66,000 a year that Mellon exhausted
his solicitude. He blandly proposed to repeal the excess-
profits tax entirely, and to cut the income tax and surtax
from 73 per cent to 40 per cent. To compensate the Treas-
ury for this loss of revenue, he proposed a 2-cent bank-
check tax, 2 cents for postal cards, a license tax on motor
vehicles, and a general sales tax on all merchandise bought
directly by the consumer.
Rich men loved it, but a howl of protest went up from
little fellows throughout the country. Farmers, shopkeep-
ers, laborers, found in Senator La Follette a mouthpiece
for their indignation. "Brazenly and impudently," said
La Follette, "Secretary Mellon has laid down the prin-
ciple that wealth will not and cannot be made to bear
its full share of taxation. He favors a system that will let
THE ERA OF DEUCES WILD 49
wealth escape. ... He ought to be retired from his place
for making such a declaration."
Mellon's red-herring reply should be framed as the
classic declaration of his political philosophy:
The man who seeks to perpetuate prejudice and class hatred
is doing America an ill service. In attempting to promote or
defeat legislation by arraying one class of taxpayers against
another, he shows a complete misconception of those prin-
ciples on which the country was founded. Any man of energy
or initiative in this country can get what he wants out of life.
But when that initiative is crippled by a tax system which
denies him the right to receive a reasonable share of his earn-
ings, then he will no longer exert himself and the country
will be deprived of the energy on which its continued great-
ness depends.
In the sharp fight that followed, Mellon won his chief
point the abolition of the excess-profits tax, which saved
corporation stockholders $1,500,000,000 in the one year of
1922. Where he demanded a cut in surtax rates from 65 per
cent to 40 per cent, Congress stiffened and fixed the surtax
at 50 per cent. But even this reduction saved Mellon fam-
ily interests $1,000,000 in 1922 alone. In addition to these
reductions, Mellon began making wholesale tax rebates to
large corporations. U. S. Steel received a refund of
$27,000,000; Mellon's companies were given rebates of
$7,000,000. Altogether, a total of $1,271,000,000 in rebates
and remissions was handed back to "overtaxed corpora-
tions." Dour critics pointed out that these kickbacks to
giant corporations should have been applied to the reduc-
tion of the national debt. Academic economists murmured
that these extra billions could not be absorbed by legiti-
mate investment needs, and would be used for speculative
purposes (as, indeed, they were), but Mellon did not share
these views. Stubbornly he held to his course, rebating
and lowering taxes, pouring the gasoline of fresh and
50 FANTASTIC INTERIM
enormous sums of money onto the bonfire of speculation
which soon began to roar through the country.
To offset these huge drains in revenue, Mellon plumped
for rigid economy in Federal affairs. All branches of the
Government felt the cruel pinch. The Army was reduced
to a pitiful 125,000 men; naval appropriations for new
ships fell to the vanishing point. Social services health,
education, child welfare were cut to the bone. The
farmers learned that no aid was forthcoming from the
Government; the veterans were told that they could not
expect a bonus. Hauled close to the wind, the private
yacht U. S. Treasury was making excellent time, and the
deep-sea boating crowd knew that a cunning skipper
paced the bridge.
Now that taxes had been reduced in the upper-upper
brackets, the Best Minds proceeded to raise tariffs all
round. Woodrow Wilson in ^1919 had vetoed an Emer-
gency Tariff Bill with these words: "If we wish to have
Europe settle her debts, governmental or commercial, we
must be prepared to buy from her." But this elementary
logic could not penetrate the protectionist skulls of Re-
publican leaders. The Fordney-McCumber Tariff of Sep-
tember 1922 lifted duties on aluminum, sugar, textiles, pig
iron, steel rails, chemicals, and dyes from 60 to 400 per
cent. The consequences of this monstrous tariff ("an ex-
treme protection which few had thought possible," says
Professor Taussig) were disastrous. It fostered the growth
of monopoly in aluminum, chemicals, wool, carbon, steel,
and electrical machinery, by relieving manufacturers of
these commodities from all foreign competition. It pre-
vented Europe from paying its debts to us in the form of
goods, drained away its gold, and flooded the United
States with so much yellow metal that eventually the mon-
etary systems of Europe and our own country were dis-
located. Finally, this harsh tariff invited reprisals. France
THE ERA OF DEUCES WILD 51
boosted duties on wheat, beef, electrical machinery; Italy
raised an unscalable barrier against our automobiles. Great
Britain fought us tooth and nail in the tariff wars. So ef-
fective were these reprisals in checking our export trade
that many American companies were obliged to establish
branch factories abroad, an expedient which cut down the
exports of our home factories just when we needed world
markets most. By 1929 industrialists were beginning to
doubt for the first time that a high tariff was a Santa Glaus
sack of goodies for all.
While business burgeoned under the influence of lower
taxes and higher tariffs, labor was taking cruel bumps.
Men like Lodge, Mellon, Gary, Dawes, and Hoover sin-
cerely believed that capital was the all-important element
in the production of wealth, and that labor's demands for
an increasing share in the profits should be sternly dis-
couraged. Labor's right to organize was limited to com-
pany unions, subservient to the interests of the employer,
ineffectual in any real crisis. Pleas for shorter hours, higher
wages, better working-conditions, were met with open
hostility or put down with martial force if necessary.
Strikes in steel mills, coal mines, and cotton factories were
bloody, long-drawn-out contests, in which the Govern-
ment invariably ranged itself on the side of management,
aiding it by means of injunctions and armed troops.
This was the setup when, on July i, 1922, 400,000 rail-
road workers struck against a $60,000,000 wage cut or-
dered by the railroad Labor Board. Railroad transporta-
tion was paralyzed. Harding issued a proclamation di-
recting all persons to refrain from interference with the
operation of the railroads. But the passion of the strikers
was high; no mere Presidential statement could cow them.
When the proclamation was ignored, Attorney General
Daugherty resorted to the hated injunction. On Septem-
ber i, he conferred with his old friend Judge James H,
52 FANTASTIC INTERIM
Wilkerson (whom he had recently recommended to
Harding for appointment) and Wilkerson obliged with
an injunction that was a masterpiece of Bourbon juris-
prudence. It forbade workers to make "any display of
numbers of force, jeers, entreaties, arguments, persuasions
or rewards" in prosecuting the strike. Strikers were for-
bidden to picket, or even set foot on, railroad property.
They were summarily warned against aiding any person
to carry on the strike, and were ordered not to employ
union funds in furthering strike activities. The only things
that Wilkerson's injunction did not prohibit was the
strikers' freedom to eat, sleep, and breathe. If Wilkerson's
methods of settling labor disputes had been generally fol-
lowed, the thumbs of labor would have been amputated
then and there.
Labor had no champions either in Congress or in the
Cabinet; an unsympathetic public was interested only in
a quick settlement which would end the inconvenience
caused by the strike. The railroad workers fought their
own losing battle by appealing to the Supreme Court for
a counterinjunction that would restrain local officials from
enforcing Wilkerson's act. Stonily, the court refused, and
two days later Wilkerson once more gratified the Ad-
ministration by renewing his injunction for another ten
days. This renewal broke the strikers' resistance; they had
been out for more than two months and were now weary
and despairing of victory. On September 15, they accepted
the wage cut and returned to their jobs quite beaten by
the combination of hunger and injunction. But they re-
membered Daugherty's part in their defeat and thereafter
regarded both the Attorney General and the President as
enemies of organized labor.
To temper this hostility, Harding timidly essayed the
role of mediator between steelworkers and the stiff-
necked U. S. Steel Corporation, still operating on a
THE ERA OF DEUCES WILD 53
twelve-hour day, with a man-killing "stretch-out" of
twenty-four hours of continuous labor every two weeks.
The President of U. S. Steel was Judge Elbert H. Gary, an
industrialist of feudal complexion, and a master of pious
verbifuge. "The twelve-hour day must go," said Gary
but the twelve-hour day remained, nevertheless. Harding,
who took pride in his powers as conciliator, wrote a letter
to Gary, tendering such "prudent assistance" as the steel
master might see fit to accept, then followed this letter
with an invitation to fifty steel executives to attend a ban-
quet at the White House for the purpose of "talking
things over." The steel industry was alarmed. What was
the meaning of this executive interference? Did Harding
think to wield T.R.'s club? Gary, assuring his colleagues
there was nothing to worry about, persuaded forty-one
steel captains to attend the banquet and partake in the
runaround that he planned to give the President.
At the ensuing love feast, a committee was appointed
to consider the question of abolishing the twelve-hour
day. After six months, the committee reported: "Aboli-
tion of the 1 2 -hour day in the steel industry is not feas-
ible now, as it would add 15 per cent to the cost of mak-
ing steel and would require 60,000 additional workers."
It was the old Army game, and Harding had the sense
to recognize it. He died before the twelve-hour day was
finally abolished, but some credit must go to Harding for
attracting public attention to the most inflamed spot in
American industry.
Vexatious and personally distasteful to the President
was the enforcement of Prohibition. During the first few
months of the great Sahara trek, fond hopes flourished,
among the drys at least, that the Volstead Act could be
made effective. When Carrie Chapman Catt had prom-
ised "We will match every wet dollar with a dry woman,"
no one laughed. William Jennings Bryan holding dusty
54 FANTASTIC INTERIM
wassail on his sixtieth birthday declared: "The liquor issue
is as dead as slavery." Despite this optimism, the Govern-
ment was unable to mop up the lakes of contraband liquor
that flooded the country. The pitiful $4,500,000 appro-
priated for enforcement in 1920 was later increased, but
the fanatical efforts of Wayne B. Wheeler, president of
the Anti-Saloon League and head of the Prohibition Bu-
reau, were nullified by the corruption of Prohibition
agents in his service. These agents were for the most part
a swinish, lazy breed, bent only on augmenting their
$1,500 salary with huge wads of "protection" money of-
fered them by every rumrunner and speakeasy proprie-
tor. There were raids, seizures of "evidence," fines and
imprisonment, but at no time during Prohibition did the
enforcement agents impound more than 5 per cent of
the liquor in circulation.
A burlesque touch, typical of the whole dizzy business,
was provided by two ingenious Prohibition agents, Izzy
Einstein and Moe Smith. Izzy, a former postal clerk,
brought to his job a repertory of disguises worthy of Lon
Chaney. In Broadway "speaks" he assumed the role of
boulevardier; in low water-front dives, his rolling gait
could fool even the treasurer of the Seamen's Union. If
Izzy noticed suspicious activity near a car barn, he would
attire himself as a streetcar conductor, enter the suspected
premises, and ask for a shot of hooch. When served by
the guileless bartender, Izzy would pour the "evidence"
into a flask, then summon strong-arm members of the rum
squad who, after battering down the door, would seize
cases of whisky and barrels of beer found on the prem-
ises. On one occasion Izzy and Moe joined a parade of
"wets," joyously accompanied them to a speakeasy, then
proceeded to seize 2,000 cases of whisky. Hauls of 500
cases were all in a day's work. But what could two low
comedians do against organized battalions of bootleggers?
THE ERA OF DEUCES WILD 55
The coastline swarmed with ram ships; physicians sold
batches of prescriptions to drugstores; the alcohol wards
of great city hospitals were crowded with dipsomaniacs;
the President himself served drinks in the White House.
This was Prohibition; neither Izzy nor Moe, nor the Anti-
Saloon League itself, could dam the rivers of illicit booze.
Vainly did Congressman William Upshaw introduce a
bill making the buyer of alcoholic beverages subject to
the same penalties as the seller. Vainly did the Reverend
Clarence True Wilson take up his post in the Methodist
Building in Washington, and proceed to pry into the pri-
vate drinking habits of Congressmen for evidence of wet
apostasy. The people of the United States were demon-
strating that man's appetite for liquor cannot be throttled
by legislation. They were doing it the hard way, the ex-
pensive way, as part of the folly and grief that was be-
setting America in its manic flight from world responsi-
bility.
7. The Disarmament Follies
Peace hath its victories, but the Washington Confer-
ence was not one of them. Applauded at the time as the
outstanding achievement of the Harding Administration
and an inspired stroke in the interests of world peace, the
conference was in reality one of the costliest bits of diplo-
matic blundering that ever befell the United States. A
histrionic performance from first to last, it must be viewed
as the curtain-raiser to that bizarre but highly popular
review, the Disarmament Follies, which played to ca-
pacity houses in America for twenty years. In this comic-
opera script, the United States was cast as the premiere
stripteuse, a peace-loving* but weak-minded creature who
could always draw enthusiastic plaudits by wantonly de-
nuding herself in the presence of her enemies.
Japan, tough and ambitious, was already the villain of
56 FANTASTIC INTERIM
the piece. In an incredibly short time Japan had risen from
Asiatic obscurity to a position of successful rivalry, com-
mercial and military, with the nations of the West. In a
single generation, Tokyo's program of Pacific expansion
had netted the rich island of Formosa, the valuable terri-
tory of Korea, and a strong foothold in Manchuria. Prior
to the First World War, only England and Russia blocked
Japanese hegemony in the Far East; these rivals had been
neutralized England by a shrewd treaty, Russia by a
brilliant military conquest. At Versailles, Japan claimed
and was allowed to retain the Marshall and Caroline
islands, formerly held by Germany. Over the protests of
the United States, it was awarded the island of Yap, the
Pacific nerve center of an important cable system. Obvi-
ously, and with calculated tread, Japan was marching to-
ward uncontrolled mastery of the Pacific.
During half a century of unexampled military and in-
dustrial expansion chiefly at the expense of a disunited
China Japan had received but a single check, and this not
to its military prestige (It had never lost a war), but to
its racial pride. Versailles had refused to grant Japan's
request for "racial equality" in the comity of nations;
the climbing Nipponese were not permitted rights of nat-
uralization by any Western country. Bitter was Japan's
resentment at this affront, and stubborn its resolve to
avenge it. But in no hasty or ill-timed manner, for the
twin characteristics of Japanese policy were: first, to yield
seeming concessions to England and the United States in
exchange for a free hand in Chinese affairs; second, to
consolidate territorial gains at carefully chosen moments
when the Western Powers were bickering among them-
selves. Thus, by opportune horse trades and well-timed
conquests, Japan had gained such ascendancy in the Pa-
cific that it could be dislodged only by war. Only a few
Western realists realized the true posture of Pacific af-
THE ERA OF DEUCES WILD 57
fairs, and among these realists no living American states-
man could be counted.
Senator William Borah, the Braille diplomat, perceiving
the "Open Door" being slammed in our face, and the
Philippines in potential danger, developed the naive idea
that the United States and Great Britain might administer
a check to Japanese expansion by calling off the three-
cornered race for naval supremacy about to begin. Eng-
land was agreeable on two counts: economy, plus a mor-
bid fear that we would surpass it in naval strength. Japan,
far behind either of us in financial ability to build new
ships, had nothing to lose by the arrangement. With these
preliminary understandings then, Harding proclaimed the
Washington Conference on Naval Disarmament, to which
nine nations sent their ablest representatives on Armistice
Day, 1921.
The atmosphere reeked with goodwill and moral fervor
supplied exclusively by the United States. There were
prayers from the pulpits, and immense agitation in
women's clubs as the ladies tossed the peace beanbag from
hand to hand. The religious tone of the conference amaxed
European and Asiatic delegates. Wise old Briand and im-
perturbable Balfour, both realists of the save-your-own-
neck school, were astounded at the unimplemented piety
of our President and Secretary of State. These hardened
European diplomats, attending the conference mainly to
save their country's money, were not prepared to step
into the purifying bath of pacifism drawn by the United
States. As for Prince Tokugawa, Japanese delegate sprung
from a family of hereditary Shoguns, he smiled a fan-
toothed smile and made bandy-legged obeisance to Hon-
orable Gentlemen with Peace Feathers in their Hats.
Harding opened the extravaganza by reading admirably
the speech prepared for him. Then arose Charles Evans
Hughes, muffling a secret in his portfolio; only Harding
S FANTASTIC INTERIM
and Borah knew the contents of his speech. Hughes be-
gan by proposing that for ten years the navies of the
United States, Great Britain, and Japan be frozen into
immobility at a 5-5-3 ratio. Thus far all was serene, but
when Hughes further proposed that "Great Britain shall
stop further construction on the four new Hoods" Ad-
miral Lord Beatty turned an apoplectic purple. He rose
to object, but Hughes, fairly awash in a lather of national
sacrifice, went on to junk thirty American war vessels
actually afloat, and-, to heap up the hecatomb of goodwill,
volunteered to break up nine American ships then under
construction. ^A newspaper wag declared that Hughes un-
aided "sank in a few sentences more first-class battleships
than all the Admirals of the world have sunk in a cycle
of centuries."
After the British delegates were revived, Prince Toku-
gawa spoke; nor did he fumble for words. He knew ex-
actly what he wanted. Before Japan would accept a 5-5-3
ratio on capital ships, he demanded that America discon-
tinue further fortifications in an area extending from the
Aleutian Islands to the Philippines, including Guam. To
this, Mr. Hughes blithely agreed. Was not our policy
pacific rather than Pacific? The only protest came from
the Premier of Australia, who complained: "This Con-
ference ignores those questions which are life and death
to us. Disarmament must not be undertaken without first
telling us [Australia] where we stand with regard to Ja-
pan.' 7 Discreetly the perturbed Australian delegate was
told not to rock the boats.
Cagey Briand had little interest in Japan, but was intel-
ligently afraid of a revived Germany. He expressed a
desire to co-operate in scrapping battleships, but first
begged for a guarantee of "collective security" against
Teutonic militarism. To buttress his arguments he read
THE ERA OF DEUCES WILD 59
two extracts from books recently published in Germany
by Ludendorff and Von Moltke:
War is the cornerstone of all, intelligent policy and the
future of the German people. Ludendorff
Eternal peace is a dream. It is not even a beautiful dream.
. . . Without war, the world would sink in a morass of mate-
rialism. Von Moltke
Briand pleaded with the United States and England to
join with France in forming a common front against Ger-
man rearmament. "A strong policy toward our recent
enemy is the only road to peace," said the grizzled old
Frenchman. His remarks were coldly received by men
who did not comprehend what he was talking about
To fulfill the terms of the 5-5-3 ratio, the United States
in a fury of self-immolation scrapped the vessels con-
demned by Hughes, and broke up several warships then
on the way to completion in American shipyards. Japan
made no comparable gesture, merely pigeonholing a few
blueprints. According to the bond, Japan should have
destroyed at least one capital ship, but even here Tokyo
managed to hoodwink us. Instead of scrapping the new
Metsw then the largest battleship in the world the Jap-
anese substituted the twenty-year-old Setsu, already obso-
lete. No objection came from the American side of the
table.
Japan left the conference the only real gainer among
the nations represented. At a time when its finances were
strained, it was saved from the need of constructing big
new capital ships. It had made certain that the Pacific
fortifications of the United States would be negligible.
Under the terms of the treaty the Japanese Imperial Navy
could build all the destroyers and submarines it needed
and it did. The great shipbuilding yards of the Inland Sea
began to hum twenty-four hours a day. Although Tokyo
60 FANTASTIC INTERIM
was under treaty obligations to report its building, it
began to cheat. Its so-called light cruisers had the arma-
ment and speed of pocket battleships; submarines de-
scribed as "medium-size" later recorded a fantastic cruis-
ing radius. Washington knew Japan was lying, but could
obtain no exact data: neither did we bestir ourselves to
match the new Japanese keels.
In the years following the Washington Conference,
Japan's naval program grew prodigiously. The approaches
to Japan's dockyards became a no-man's land. Tall barbed-
wire fences were erected 15 miles from the yards, to
hinder foreign Peeping Toms. The workers were com-
pelled to live within these reservations, and their infre-
quent visits outside were rigidly supervised by the naval
intelligence. Behind these walls Japan later built its super-
dreadnoughts, two 35,000- and six 45,ooo-tonners. While
American shipyards fell into disuse, Japanese naval ham-
mers clanged steadily for twenty years, as Nippon brought
its dream of Far Eastern sovereignty nearer realization.
By the Washington Conference, hailed at the time as
a triumph of "moral leadership," the United States Navy
was castrated. A vast number of vessels and hundreds of
long-range cannon were lost forever. We surrendered the
offensive to a guileful enemy, allowed ourselves to be
overtaken by a hostile Naval Power. And then, to crown
the whole absurd performance, we antagonized the future
rulers of the Pacific by passing the Japanese Exclusion
Act!
Scarcely had the conference adjourned when this gra-
tuitous insult was flung at the Japanese people. It was as
inexcusable as it was unnecessary. Under the existing Gen-
tlemen's Agreement, we could have limited Japanese im-
migrants to a mere 250 a year. But while we prated of
peace on the one hand and perilously disarmed ourselves
on the other, we deliberately pounded salt into Japan's
THE ERA OF DEUCES WILD 6l
sorest wound its consciousness of race inequality. Japan
nursed the insult, nourished its people on its poisons,
drilled it into its army of conscripts6oo,ooo each year
and riveted it into every bolt of the gigantic fleet it was
preparing for the day of reprisal
Meanwhile there arose from the American people a
vastly sentimental yammering for peace, a witless clamor
that bore not the slightest relationship to the harsh and
stupid course our international policy was taking. Pacifism
purported to be a moral force, but as events proved, it
was a hugely demoralizing influence on American life.
Our pacifist program, with its vague, free-floating roman-
ticism, became a cloud rampart behind w : hich we led an
irresponsible short-range existence and luxuriated in emo-
tions of noble superiority concerning the rest of mankind.
From behind this moralistic screen, pacifist sallies were
made by clergymen, educators, women's organizations,
Western Senators, antimunitions crusaders, and assorted
Pollyannas of every kidney. None of these peace-at-any-
price addicts ever emerged from their hop dreams long
enough to study the crude politico-economic frictions
that actually bring on war.
We persisted in regarding war as a species of moral
obloquy to which the nations of Europe were perversely
given much as an individual might be addicted to cocaine
or whisky. Armaments we viewed as the evil cause,
rather than the unescapable result, of European tension.
"Abolish arms and you abolish war" was the pious lecture
we read to English, French, Italian, and Japanese diplo-
mats in turn. Yet we failed utterly to appreciate that any
realistic effort to abolish arms would have called for our
active and sustained participation in the economic and
political reconstruction of the entire world.
We never learned that international peace is not a posy
that springs from gentie wishes or flourishes in a vacuum.
62 FANTASTIC INTERIM
It is an exceedingly pragmatic and complex entity, of
which the moral urge is but a minor element, (The chief
ingredient of peace is a stable economic relationship be-
tween nations; this means, among other things, an equi-
table division of raw materials, a liquid flow^ of interna-
tional trade, and free access to world markets. JAimaments
are merely a detail in the larger issue of economic com-
petition between nations; any enduring reduction in mili-
tary force requires a prior adjustment in national policy.
We neither aided other nations to bring about such ad-
justments (indeed by our tariffs and reparations bungling,
we irritated our neighbors) nor did we make such adjust-
ments in our thinking. Throughout the whole period of
the Disarmament Follies we maintained an imperialistic
and competitive attitude toward the rest of the world.
We meddled in the Far East, vacillated in the Philippines,
alternately scolded and loaned money to Europe, inton-
ing virtuously meanwhile about our sacrifices in scrapping
battleships and stupidly exposing ourselves to reprisals
from nations we had antagonized.
The thing we misnamed peace was based, whether we
realized it or not, on a century-old balance of European
economic and military power to which we had contrib-
uted considerably less than our share. America's basic lib-
erties, our economic system, our whole way of life de-
pended upon the preservation of this balance, or the crea-
tion of its dynamic equivalent. As in a ball game, the suc-
cess of this system depended upon every player obeying
the rules. As soon as Germany or Japan abandoned the
rules (or when England, France, or the United States was
unable to enforce them) the game would break op. In the
face of these realities, "moral pacifism" was a meaningless
formula, unable to prevent war or to check dictators. The
"peace" for which our people clamored so vehemently was
merely the substitution of emotional verbalism for positive
THE ERA OF DEUCES WILD 63
action and sustained responsibility. Its only achievement
was to befuddle the American nation for twenty years, and
pitch us at last, tragically unprepared, into the sulfuric vat
of war.
8. The Gang's All Here
While the Disarmament Follies and the Tariff Tragedy
were beginning their long international run, the Ameri-
can people were being entertained at home by a three-
ring circus of scandal, graft, and corruption. With busi-
nessmen demanding "When does normalcy begin? " and
with the unemployed crying "When do we get jobs?"
the nation's capital was converted into a cheap variety
show with the crooked Ohio Gang getting top billing.
No sooner was Harding elected than a swarm of Buck-
eye State locusts, led by Harry M. Daugherty, descended
upon Washington, eager for pickings. To Daugherty,
Harding owed his political existence; it was Daugherty
who had first boosted Harding into the saddle of Ohio
politics, and later jockeyed him into the United States
Senate. It was Daugherty who had patiently groomed
his i,ooo-to-i shot for the Presidential Derby, spending
his own money to defray primary expenses. And now
that his horse had won, Daugherty was first in line for
the pay-off. Harding wanted to make him Secretary of
State, but Daugherty preferred the Attorney General's
department. The "take" would be juicier there.
Legalistically, Daugherty was far from Attorney Gen-
eral caliber; he was best known as a public-utilities lobby-
ist who had gained notoriety for his part in the shifty
maneuver whereby Charles W. Morse, multimillionaire
stock-promoter, had won release from a Federal prison.
On the advice of Daugherty, Morse had eaten a cake of
soap, feigned kidney trouble, and been pardoned. The
whole matter was aired when Daugherty was obliged to
64 FANTASTIC INTERIM
sue Morse for his $25,000 fee. Decidedly, Daugherty was
not a savory dish, but when eminent Republicans warned
Harding that his friend was scarcely the man for the post,
Harding denounced them as "political blackguards."
Gratitude was natural on Harding's part, but his mis-
take in appointing Daugherty was to cost the United
States millions of dollars and to hasten the hour of the
President's own death. Harding trusted Daugherty im-
plicitly, talked with him on a private phone from five to
twenty times a day, consulted him at every turn, and
never lived to plumb the full depths of Daugherty's
treachery.
Next in command was Daugherty's henchman and
"bumper," a vacuous simpleton named Jess Smith. Though
Smith had no official title, he was the rubbery pivot on
which the machinery of the Ohio Gang turned. He shared
lodgings with Daugherty, handled all cash, made contacts,
and "paid off" for his superior. In mentality and outlook
Smith was barely a cut above the typical lounger in a
small-town barbershop a combination of "fixer," errand
boy, and utility man. His standard greeting was a loose-
lipped "Whaddayaknow?" and his favorite song, which
he hummed incessantly, was "God, How the Money Rolls
In." Smith received a "badge, a card and a code" from
the Federal Bureau of Investigation, and in the course of
his short career as a looter of public funds enjoyed com-
plete immunity because of his close association with the
Attorney General.
The headquarters of this gang was the "Little Green
House on K Street," a dwelling leased by two Ohioans,
Mannington and Caskey. "This place," says Samuel Hop-
kins Adams, "was a port-of-call for big liquor operators,
office-buyers, jobbers in bribery and all the sorry, furtive
drift of the political underworld." The Ohio Gang, of
which Mannington, Caskey, and Jess Smith were the ring-
THE ERA OF DEUCES WILD 65
leaders, traded in liquor-withdrawal permits, pardons, ju-
dicial appointments, the illegal sale of alien property, and
general high-class graft. The door swung on twenty-four-
hour hinges; poker sessions, ladies of the evening, and cas-
cades of bootleg liquor (furnished by Prohibition enforce-
ment agents who delivered confiscated "wet goods" to the
back door in broad daylight) were always on tap. Con-
gressmen, shady lawyers seeking pardons for Federal pris-
oners, Treasury agents who issued liquor-withdrawal per-
mits to drug housesthese were the shadowy figures who
flitted in and out of the Mannington-Caskey establish-
ment.
Here's how the liquor racket of the Green House Gang
operated: In one instance, the General Drug Company
of Chicago paid Mannington $20,000 to secure a batch
of bonded liquor from government warehouses. Manning-
ton, using $5,000, bribed Treasury agents to issue the nec-
essary "withdrawal permits." He then split the remain-
ing $15,000 with Caskey and Jess Smith; the latter, with
touching loyalty, turned over the lion's share of his cut
to Daugherty, Attorney General of the United States.
Another racket was the sale of Federal judgeships.
When a judicial appointment was to be made, Daugherty
would hand Jess Smith a list of eligibies. Smith's job was
to discover in each case "How is he fixed?" The judicial
robes were assigned to the highest bidder. Still another
source of income was the sale of "immunity from prose-
'cution." Bootlegging overlords such as George L. Remus
of Cincinnati, who murdered his wife in the street, paid
Jess Smith $250,000 in protection money. No wonder
Smith grew leather-lunged shouting his favorite song.
Smith also engineered crooked deals for Colonel
Thomas W. Miller, Alien Property Custodian, enabling
both Miller and Daugherty to make an extra dollar or
two in the sale of enemy properties seized during the war.
66 FANTASTIC INTERIM
In the dicker that eventually tripped up the Gang, Smith
received $224,000 in Liberty Bonds from one Merton,
who claimed to represent the rightful owners of the Amer-
ican Metals Company, a German property held by the
Alien Property Custodian. To expedite the return of his
property, Merton crossed Jess's palm with a $250,000
bribe, gratefully received by the Happy Grafter and duly
noted in his diary. Colonel Miller got a mere $50,000 for
being complaisant in the transaction. These savory details
did not appear until 1926 when Harry Daugherty and
Colonel Miller were tried on charges of "conspiracy to
defraud the Government of their honest, impartial and
unprejudiced services."
Working in close mesh with the Ohio Gang was
Charles R. Forbes, looter of the Veterans' Bureau. Forbes's
previous career was gaudily mottled with contrasts; he
had been a deserter from the Army and was later deco-
rated with the Congressional Medal for heroism under fire.
Originally a Democrat, Forbes had worked for Harding's
election in the State of Washington, and now, breezy and
ingratiating, he presented himself for a job. Harding, sin-
cerely fond of Forbes, placed him in command of the
Veterans' Bureau, with an appropriation of $500,000,000
annually.
Forbes's mouth watered as he noted that $17,000,000
had just been appropriated for the building of Veterans'
Hospitals to house the 70,000 mental cases and 38,000
tubercular patients salvaged from the battlefields of Eu-
rope. These sick men had been shockingly neglected; they
were decaying in county almshouses, criminal insane asy-
lums, any place where they would be out of sight. But
now the time had come to build hospitals for them, and
Forbes convinced Harding that the planning and building
of these hospitals should be placed in his hands.
Forbes started off on a cross-country junket, supposedly
THE ERA OF DEUCES WILD 67
selecting sites for hospitals, but in reality making under-
cover deals with real-estate agents and contractors,
whereby the Government was to be charged fancy prices
for land and materialForbes, of course, getting the
"spread." The expenses of this trip were defrayed by
the St. Louis contracting firm of Thompson & Black.
Forbes received from Thompson $5,000 in cash as a mere
appetizer for payments to come. The heavy graft was to
be collected while the hospitals were actually being built.
But for quick money Forbes operated a cold-blooded
fraud which deprived helpless war veterans of bedding,
gauze, drugs, soap, and other necessities. These medical
goods and supplies were stored in government warehouses
at Perryville, Maryland. Forbes sold to a private contrac-
tor in Boston 100,000 pairs of pyjamas, 84,000 sheets, and
45,000 rolls of gauze at one-fifth of their value. Sick men
needed these supplies badly, but Forbes squeezed them
mercilessly; altogether he disposed of $3,000,000 worth of
government goods for about $600,000. By doctoring his
books and bribing officials, Forbes was able to fool Hard-
ing for nearly two years, although the official stench was
high. At last when a Senate committee decided to inves-
tigate, Forbes slipped away to Europe, resigned while
abroad. When he returned to the United States, after
Harding's death, he was tried for bribery and conspiracy
and sentenced to two years in Leavenworth.
The sinister part that oil played in Harding's nomina-
tion and regime cannot be exaggerated; it spouted forth
in a tragic geyser, smearing with black scandal everyone
connected with it. At the center of this shameful gusher
was Albert Fall of New Mexico, Harding's Secretary- of
the Interior, destined to serve a term in a Federal peniten-
tiary for his misuse of the custodianship of the nation's
oil reserves.
68 FANTASTIC INTERIM
When Harding took office, happy oilmen rubbed their
hands in anticipation of the fat years ahead. The phenom-
enal success of the automobile already 7,000,000 medium-
priced cars were racing across the landscape made petro-
leum a preferred prize for exploiters of the public domain.
As Senator from New Mexico, Fall had worked hand in
glove with the oil interests, and had strongly urged mili-
tary intervention in Mexico to safeguard the oil wells of
his friends Sinclair and Doheny, both of whom had con-
tributed heavily to the Harding campaign fund. At the
time of Fall's appointment, however, his reputation was
unblemished; Harding had known him as a bluff Sena-
torial pal, and when Fall had asked for the post, Harding
cheerfully gave it to him.
No sooner had Fall taken office than the chicanery be-
gan. The great oil reserves of Teapot Dome and Elk Hills,
which Fall coveted, were under the supervision of the
Navy Department, but Fall had no difficulty in persuad-
ing Secretary Denby, quickie automobile millionaire from
Detroit, to transfer the oil reserves to the Department of
the Interior. As if in a trance, Harding signed the Execu-
tive order for the transfer, saying: "I suppose they know
what they're doing." The President's remark should be
put in all textbooks of rhetoric as a paradigm of under-
statement.
Secretly and without competitive bidding, on April 7,
1922, Fall leased the Teapot Dome Reserve to Harry F.
Sinclair's Mammoth Oil Company. A few months later he
leased Elk Hills Reserve to Edward F. Doheny's Pan
American Company. From Sinclair, Fall received $260,000
in Liberty Bonds. Doheny "lent" him $100,000 in cash.
Fall later argued that these leases were fair to the Gov-
ernment and that no undue profits would have accrued
to Sinclair or Doheny. But Mr. Doheny is on record with
THE ERA OF DEUCES WILD 69
quite another story. "I figure," he said later, "that the Elk
Hill Reserve ought to be worth $100,000,000 to me."
During the subsequent expose, which dragged out for
the remainder of the decade, "a cloud of witnesses" told
various and conflicting stories, some ingenious, some piti-
ful, and all of them incriminating. Under the remorseless
hammering of Senator Thomas J. Walsh, exalted person-
ages altered their testimony, fled to Europe, committed
suicide, or entered insane asylums. The greasy tide of scan-
dal submerged official Washington, and left black smudges
on the White House, the Army and Navy buildings, the
Treasury Building, and the Post Office. A complete ac-
count of the investigation would fill a melancholy volume.
Here, however, it must suffice to select an instructive sub-
chapter involving Sinclair, Will Hays, Andy Mellon, and
Secretary of War John W. Weeks.
Will Hays, former chairman of the Republican Na-
tional Committee, had been awarded the Postmaster-Gen-
eralship in return for valuable services rendered during
the campaign. Hays was also a deacon in the Presbyterian
Church, and a man of peculiar rectitude. When he resigned
from the Cabinet in 1922 to become the moral preceptor
of the motion-picture industry, Hays said: "We must have
toward that sacred thing [the mind of a child], toward
that clean and virgin thing, the same sense of responsibil-
ity, the same care about the impression made upon it, that
the best teacher, or the best clergyman, the most inspired
teacher of youth would have."
Hays's celluloid morality was put to a shearing strain
when Inquisitor Walsh asked him to explain the financial
tie-up between Sinclair and the Republican campaign fund
of 1920: In his first testimony, Hays admitted that Sin-
clair had contributed $75,000 to the Republican slush
fund. He did not mention, however, that Sinclair had also
70 FANTASTIC INTERIM
advanced $185,000 in "hot" Liberty Bonds to this same
fund. 1
"Why didn't you tell us about these bonds?" demanded
Walsh.
"I wasn't asked about them," stammered the Deacon.
Under Walsh's probing, it came out that Hays, ever
mindful of the proprieties, had realized that the posses-
sion of Sinclair's Liberty Bonds might be damaging politi-
cally, and had tried to peddle them among wealthy Re-
publicans, including one Andrew Mellon. But Mellon,
knowing that the tainted Liberty Bonds had serial num-
bers and could be traced, refused to accept them. A par-
agon of reticence, Mellon held his tongue while Hays un-
loaded the bonds on other Republicans, among them Sec-
retary of War John W. Weeks, the millionaire Boston
banker.
After hearing Deacon Hays's testimony, Senator Car-
away remarked on the floor of the Senate:
The most that can be said for Mr. Hays is that he was a
fence; that he knew that certain goods were stolen, and he
was trying to help the thief find a market for them; that the
Secretary of the Treasury, although he declined to aid in
the marketing of the goods, after he had knowledge of what
they were, refused to disclose this information, but handed
them back so that the fence could find somebody else who
would act for him.
When the investigations ended, Fall was found guilty
of accepting a bribe from Doheny and was sentenced to
a year in prison. Sinclair went to jail on charges of con-
spiring to defraud the Government. The oil leases were
voided by the Supreme Court as illegal and fraudulent.
These penalties and exposures came after Harding was in
his grave, but no one doubts that the President's death
1 These Liberty Bonds were part of the profits that Sinclair had al-
ready taken from Teapot Dome.
THE ERA OF DEUCES WILD 71
was superinduced by worry, grief, and possible guilty
knowledge of the Teapot Dome transaction.
9. Delving into the Et Cetera
Did the people of the United States register indigna-
tion at these revelations? Did they arise to correct the fal-
tering course their Government was taking in world af-
fairs? They did not. Other more important matters en-
gaged their attention. The Three Cs for example Coue,
Crossword Puzzles, and Compendium^
Early in the zo's a pint-sized Frenchman from Nancy
stormed the citadel of the American intellect with a re-
hash of the best that had been thought and said on the
theme of autosuggestion. The country was titillated by
the perfectionist promises held out by Coue in his for-
mula "Every day in every way I arn getting better and
better." Devotees carried knotted strings, rosary fashion,
to tick off the Coue orison. Institutes were formed; eager
audiences crowded in to hear the master speak. By 1924
everyone had forgotten the Coue rigamarole and turned to
crossword puzzles as a more enduring form of mental
stimulation. While our State Department refused to take
pen in hand to answer notes from the League of Nations,
crossword fans were taking pencils in hand to compete
in a mammoth Puzzle Congress held in a New York hotel.
While naval petroleum reserves were being looted, Amer-
ican citizens were furrowing their brows over a "dru-
paceous fruit beginning with *g/ " or emerging from a quick
brown study to ask each other: "What is a two-letter
word for the High Priest of Osiris?"
The passion for self -improvement raged at magnesium
heat as the more literate elements turned to compendiums
of culture. Impatient of the slow tedium of actually mas-
tering a subject, yet eager for the superficial appearance
72 FANTASTIC INTERIM
of learning, dinner-table savants battened on various "out-
lines." Wells's Outline of History led the best-selling list
in 1921; Hendrik Van Loon's Story of Mankind followed.
These volumes synthesized history and ethnology in pop-
ular form, were dutifully absorbed by the upper nine-
teenth of one per cent of the population, and gave a con-
versational gloss to their social gatherings. Later in the
decade came Will Durant's The Story of Philosophy, an
able redaction of the leading metaphysical ideas that had
occupied the mind of Western man. Durant originally
wrote The Story of Philosophy for the little blue-covered
Haldeman-Julius booklets selling at five cents apiece; gath-
ered into a single volume, these pamphlets became the
best-selling nonfiction work of the year.
While these and similar works distributed a glozing cul-
ture, great universities (Columbia, Chicago, Boston)
moved with the times in peddling extension and home-
study courses to the public. These fumblings for culture
cannot be viewed as evidence of an intellectual renais-
sance, or even a step in the desirable direction of adult
education. They were fragments of the specious, shallow
idea that intellectual riches could be won by the painless
method of "taking a course" in something. Absurd hopes
that one could "learn to write in spare time," or ignite a
dinner party at forty paces by a reference to Schopen-
hauer, were encouraged by promoters of quick-culture
schemes. According to this school, one could be at ease
on Olympus by the simple method of spending "fifteen
minutes a day" with the classics. Social advancement
(even sexual conquests, it was hinted) could be attained
by cozy little seances with a five-foot shelf. The fact that
education was a painful, laborious undertaking a soli-
tary discipline demanding ascetic self-denial and intoler-
able fatigue was never mentioned in the glowing pros-
pectus of the Ezee-Culture schools.
THE ERA OF DEUCES WILD 73
Almost choked by these "self-improvement" tares were
a few tiny seeds of genuine intellectual force and purity.
In widely scattered classrooms, and in an occasional book,
a handful of teachers, writers, and thinkers were planting
ideas destined to survive the billboard culture of the
period. Paul Elmer More and Irving Babbitt were advo-
cating a Humanism that would save men from spiritual
death on the perimeter of matter. John Dewey's profound
observations led to an expanding concept of reality as
growth and change, both in education and in life. Almost
single-handed Stuart Sherman attempted to lift literary
criticism out of the shallows of mere book-reviewing. To
the obscurities of international finance J. M. Keynes
brought, in 1920, a penetrating light in his volume The
Economic Consequences of the Peace. And in the same
year G. Stanley Hall translated Sigrnund Freud's Gen-
eral Introduction to Psychoanalysis, a work at first ex-
ploited by cultists but undeniably marking a new and im-
portant epoch in the understanding of man's cleft and ail-
ing soul. Not many people read these authors, and fewer
understood them, yet the truths they expressed worked as
a leaven on the inert and doughy mass mind.
At Columbia during the early zo's, John Erskine nour-
ished a hungry generation of postwar students by encour-
aging them to dip into the vast granaries of classic and
comparative literature. Following in the footsteps of
George Edward Woodberry, his own great teacher, Er-
skine created a General Honors course in which under-
graduates read one classic a week for two years. Homer,
Aeschylus, Aristotle, Aquinas, Galileo, Dante, Shake-
speare, Descartes, Kant these and other master contribu-
tors to human thought were brought into the vision of
a few young Americans, deepening their emotional hori-
zons and causing them to question the prevailing shabbi-
ness of contemporary culture.
74 FANTASTIC INTERIM
Eyestrain from excessive reading, however, was not a
widespread malady during these years. Among persons
who moved their lips as they read, Edgar Rice Burroughs's
Tarzan and Harold Bell Wright's The Shepherd of the
Hills claimed huge audiences. Readers with sixth-grade
vocabularies submerged themselves in Dawn by Gene
Stratton-Porter and The Sheik by E. M. Hull. Yet for
most, these bound volumes were considered "heavy litera-
ture." Ninety-nine per cent of the population read only
the evening paper, a shoddy mixture of syndicated trash,
sports coverage, comic strip, partisan comment, and di-
luted news. On the editorial pages, writers of the Bris-
bane chop informed the reader that he was the ultimate
flower of self-governing intelligence but the rest of the
paper played him for an obvious sap. Vast sections of the
population foddered on such trash as Bernarr Macfad-
den's True Story, a pepper pot of sex and crime with a
modest circulation of 2,000,000. Of the various wood-
pulp magazines ground out by caifeinated hacks, "West-
erns" led im popularity, with Snappy Stories (snappy
meaning salacious) next in appeal. These magazines were
the pabulum of a thrill-starved populace, the preferred
reading of our democracy.
In the American Magazine, shrine of success-worship,
Dr. Frank Crane was writing his heart out under such
titles as "Ten Commandments for the Salesman" and "Six
Rules for a Successful Marriage." For the same audience,
public-utilities titan Samuel Insull enumerated "Things
That Count Most If You Want to Be Promoted." Some
of the qualities listed by Mr. Insull were trustworthiness,
honesty, punctuality, courtesy, and "everlastingly getting
ahead of the other fellow."
George Horace Lorimer, at his zenith as editor of the
Saturday Evening Post, was pleading for a wider distri-
bution of "good securities." This oracle of the self-made
THE ERA OF DEUCES WILD 75
man had a simple, straightforward plan for universal pros-
perity. "If, as is claimed, the big companies are making
too much money, would it not be well," asked Mr. Lor-
imer, "for millions of persons of scanty means to buy the
stock of these corporations and thus spread prosperity
among the people? What is needed is more imagination
and aggression on the part of the country's bankers and
industrial leaders in selling standard securities to this great
new army of buyers." Mr. Lorimer lived to see his plan
put in operation, and his question answered.
In the advertising pages of the national magazines, it
was held that anyone could prepare himself for a better
job and bigger pay by studying accountancy, salesman-
ship, and business methods in the home. Ads of the Inter-
national Correspondence Schools showed a workman
munching his noonday sandwich and studying the com-
plex business of banking in one of its "easy-to-read," large-
print pamphlets. The president of the company secreted
behind the door was saying to an awe-struck foreman:
"Watch Jim get ahead he's taking the I.C.S. course in
Banking."
In, a full-page ad entitled "Forging Ahead in Business"
the Alexander Hamilton Institute claimed that 20,000 pres-
idents were enrolled in its membership and that "You,
too, can learn the principles practiced by successful busi-
ness men throughout the country." Such ads were accom-
panied by a picture of a heavy executive pounding his desk
and saying: "I'm looking for a man I can pay $5,000 a
year. Are you equipped to accept my offer?" Thousands
of pious clerks, "eager to forge ahead," signed the attached
coupon and were off on the long marathon of business
success.
Inhaling these advertising vapors and munching his
magazine angel cake, the reader's mental resistance fell
to an all-time low, in which state he was destined to fall
76 FANTASTIC INTERIM
easy prey during the next decade to the salesman, the pro-
moter, the magician, and the quack.
After a brisk fifteen minutes of self -improvement, fol-
lowed by some vocabulary-stretching exercises with the
crossword puzzle, the mental muscles of the middle-class
American were about ready for a spell of relaxation. For
millions, this meant a joy ride in their Model T Ford, af-
fectionately known as Tin Lizzie or Leaping Lena. In
1922, the Model T was the prime appointment of
6,000,000 American homes, the incarnate visitation of the
machine god. Born on a conveyor belt, this swaddling
babe of mass production was the new Logos that was to
redeem mankind. It came in humble guise, accompanied
by jeers of the multitude, but its inanimate divinity
changed America and made its creator $1,000,000,000.
Now for a quick demonstration in the Model T itself.
It was a high-hipped, loose- jointed contraption (made of
vanadium steel, not tin) with the lines of a kitchen pump
and a zo-horse-power heart that would pull five passen-
gers through New Hampshire ruts or New Mexico sand.
Leaping Lena had no conventional gear shift; changes
from low to high were made by pressing a foot pedal
which controlled an ingenious box of gears invented by
Ford himself. In manipulating the various pedals and
switches the Ford operator combined the dexterity of a
trap drummer with the agile footwork of a harmonium
player. In low gear, the Model T would go up the side
of a house; in high, it rolled along at an average of 20
miles per hour. Starting a Ford was an experience not
lightly forgotten. After retarding the spark (meanwhile
throwing the ignition switch to "Batt") you proceeded
to the front of the car and spun the crank, simultane-
ously jerking the "primer," a loop of wire connected
with the carburetor. After one to a dozen twists of the
crank (depending on the temperature, compression, and
THE ERA OF DEUCES WILD 77
condition of the "timer") Lizzie would begin to sputter
and tremble like an old maid with the epileptic shakes.
Whereupon you dashed back to the steering wheel, re-
tarded the gas, advanced the spark, threw the ignition
switch from "Batt" to "Mag," and your Model T settled
down to a steady purr. This performance was being re-
peated several times a day by 6,000,000 Americans who
owned, greased, and repaired their Fords with affectionate
care. The joy of owning a Ford was this: You were bound
sooner or later to come into greasy contact with the gears,
bands, bolts, nuts, and screws that made its narrow-tired
wheels go round.
Although Henry Ford bought no space in the maga-
zines, regarding advertising as economic waste, his Model
T was receiving priceless mouth-to-mouth advertising in
the form of numberless Ford jokes that now lie buried in
the graveyard of Americana. There was the story of the
farmer whose tin roof was ripped off by a tornado. The
farmer sent the wreckage to the Ford factory and re-
ceived a letter saying: "That was a pretty bad smashup
your car was in, but well send it back to you in O.K.
condition next week." Another story told of a rich man
who bought an imported limousine for $15,000 but car-
ried a Ford in his tool chest to drag him out of mud-
holes. Still another dealt with the ingenuity of a Ford
owner who hung a magnet from his rear axle, so that it
would pick up the bolts and screws that tumbled off his
car as it rattled along. There were jokes about Ford pro-
duction methods, too. It seems that a Ford employee
dropped his monkey wrench, and while he stooped to
pick it up eighteen cars whizzed past him, and he was
fired. The Ford method of distribution also contributed
to the saga. Wags rumored that Fords were going to be
painted yellow. Why? Because they could then be sold
in bunches like bananas. The speed of the Ford came in
78 FANTASTIC INTERIM
for much good-natured joshing. "My Ford can go fifty
miles an hour," boasted a proud owner. "How's that?"
queried his neighbor. "Twenty-five miles an hour along
the road, and twenty-five miles up and down" was the
snappy rejoinder.
Five-and-ten-cent stores devoted whole departments to
the sale of Ford parts. Piston rings, grease cups, hub caps,
could be bought for a dime. Rubber grips at 10 cents
apiece kept your foot from slipping off the pedals; snub-
bers attached to the springs gave you an easier ride. Car-
buretor attachments "claimed to boost mileage from the
average 12 to a possible 15 miles per gallon; extra con-
densers gave a hotter spark; various types of padlocks
secured the steering wheel immovably to its column. The
grooming and embellishing of one's car was a major ac-
tivity of the Ford owner. It absorbed his extra cash, and
prevented him from pondering too deeply on the mys-
teries of the political universe.
In 1923, much urbane leisure was spent on mah-jongg,
the game of the year. At a time when 900,000 shoeless
Southern children nourished hookworm parasites, mah-
jongg enthusiasts were paying $50 a set for inlaid ivories;
more luxurious outfits ranged in price between $200 and
$500. For a tick of eternity mah-jongg threatened the
supremacy of bridge; it was a tossup whether the smart
hostess would set out tiles or a bridge pad for the eve-
ning's entertainment. Then in a characteristic water-bug
quirk of caprice, mah-jongg was abandoned overnight.
Dealers were caught overstocked with expensive sets,
melancholy mementoes of a whim suddenly gone sour.
Hookworm and pellagra, however, continued to do busi-
ness at the old familiar stands.
While Harding was saying "Let* s be done with wiggle
and wobble," the country was clasping its first radio
headphones over its ears and listening to pioneer jazz
THE ERA OF DEUCES WILD 79
bands In which a new and seductive instrument, the sax-
ophone, was rapidly displacing the time-honored fiddle
("Margie" and "Dardanella" are tunes indelibly associ-
ated with those early years of crystal sets, flapperism, and
boyish bobs). By the end of 1922, 508 radio stations had
a million listeners. At first, any program was acceptable;
few broadcasters perceived what an inexorable taskmaster
their audience would become, or how, as the listeners in-
creased by tens of millions, the problem of shoveling a
daily grist of cheap trash into the insatiable radio maw
would become one of the dizziest and most lucrative of
American occupations. Nor could anyone foresee that the
device which might have brought the Word to Everyman
would degenerate into the national earache a commer-
cialized instrument for snatching trivia and advertising
from the air.
First on the list of entertainments outside the home were
the movies, to which 60,000,000 devotees repaired each
week for silent contemplation of the glorious trinity, sex,
comedy, and crime. Theda Bara had passed her sultry
prime, but Clara Bow, the "It" girl, was giving redheaded
personification to Elinor Glyn's neuter pronoun. Roscoe
(Fatty) Arbuckle was hurling his juiciest pies prior to
facing charges of manslaughter. Mack Sennett's comedy
cops tossed audiences into the aisles with laughter; Mabel
Normand headed his bevy of bathing beauties, deemed the
last thing in costume abbreviation. Douglas Fairbanks
ranged the world with earrings and cutlass, slashing his
way through perennial Dumas difficulties, while Mary
Pickford did the demure with tear-jerking appeal Charles
Spencer Chaplin, not yet acclaimed as a tragic genius, was
content to win belly laughs grounded on slapstick antics in
floppy shoes. Among the ten best pictures of 1922 were
such emotional masterpieces as Orphans of the Storm, The
Prisoner of Zenda, Grandma's Boy, When Knighthood
80 FANTASTIC INTERIM
Was in Flower, and Smiliri Through. These being the
cream, no comment is needed on the skimmed milk.
The legitimate stage, confining its appeal to a sophisti-
cated New York audience (never more than 15,000,
wailed George Jean Nathan), was enjoying an unusually
fine season. John Barrymore's Hamlet started an inter-*
esting revival of Shakespeare. The new Theatre Guild
offered Shaw's Back to Methuselah; R.U.R.; and He Who
Gets Slapped. Jeanne Eagels created the part of Sadie
Thompson in Rain, and Pauline Lord was unforgettable
in O'Neill's Anna Christie. But these brief candles flick-
ered for only a few weeks. The crash hit of 1922 and a
permanent institution for five years thereafter, was Anne
Nichols's Abie's Irish Rose, a hodgepodge of hokum and
sentimentality. Professional censure blasted it with a with-
ering crossfire. Heywood Broun raged: "There is not a
single line of honest writing here. Miss Nichols has amply
succeeded in reducing dramatic entertainment to an ab-
surdity." Patterson James of the Billboard wrote: "Abie's
Irish Rose insults second-grade intelligence every second."
But despite this critical barrage, the public marched up
to the box office in platoons for five years, enabling
Abie's Irish Rose to break existing records for consecu-
tive performances and enriching its backers by some
$5,000,000.
A curious compound of ballyhoo and peep-jackery, the
bathing-beauty contest, made its debut at Atlantic City
in 1921, and became an American institution overnight.
That communities should send their shapeliest young
women to represent them at a Congress of Beauty was an
idea older than Troy, but the fanfare of publicity that
accompanied the choosing of "Miss America" was native
to these shores. From Des Moines, Paducah, Nashua, and
Biloxi, the fairest of the village fair converged upon At-
lantic City, where they were met by the American Legion
THE ERA OF DEUCES WILD 8l
Band, the Mayor, Boy Scout brigades, and surviving mem-
bers of the G.A.R. After a preliminary build-up of news-
reel parades, rotogravure poses, and fancy presswork by
the publicity boys, the Golden Apple was awarded. The
girls, poured into their one-piece bathing suits, filed past
the judges like an animated edition of the Police Gazette.
Spectators whistled; the girls blushed, but kept on com-
ing. It was the ritual of Venus with a profit motive lurk-
ing not too far in the background. Atlantic City (or what-
ever boardwalk resort staged the spectacle) got thousands
of customers and the newly crowned Miss America got
$50,000 for stage appearances and testimonials. Her un-
mentioned prize was a badly twisted psyche for the rest
of her life. The barbershops of the nation got pictures to
paste on their walls, and the unsuccessful contestants for
the beauty crown got broken hearts. It was a meaningless
and absurd performance, but America has clung to it.
Still lower in the scale of moronic exhibitionism was
the marathon-dance craze that jittered across the country
in the early zo's. These drab and grueling contests of en-
durance attracted thousands of half-witted couples who
shuffled about in each other's arms for days, hoping to
"set a record" and win a cash prize, rarely more than $200.
Additional thousands of spectators crowded into dance
halls to watch the fearful and degrading spectacle. A re-
porter of the New York World covering a marathon
dance in 1923 described the scene: "A dingy hall is lit-
tered with worn slippers, cigarette stubs, newspapers and
soup cans; reeking with the mingled odors of stale coffee,
tobacco smoke, chewing gum and smelling salts. Girls in
worn bathrobes, dingy white stockings, their arms hang-
ing over their partner's shoulders, dragging aching feet
in one short agonizing step after another." Exhausted
males slapped their partners' faces to keep them awake;
as the dancers collapsed, they were carried out on
82 FANTASTIC INTERIM
stretchers. Sometimes the dancers died of fatigue and
heart failure, but the band played on. The dance mara-
thon marked the nadir of wretchedness and futility to
which human beings could voluntarily consign them-
selves, yet every important city in the United States sup-
ported a series of these exhibitions for several years.
Viewing these assorted imbecilities, literary observers
dipped their pens in corrosive bile and set down words in
anger. Their criticisms were not profound, and they sug-
gested no solutions to the great American muddle. But
their caricatures, etched in caustic, held a disillusioning
pocket mirror up to the smug lineaments of the age. H.
L. Mencken embalmed the "boobus Americanus" under
glass in his collection of Prejudices and later in the pages
of the American Mercury. Mencken's prose style was a
combination of surgical scalpel and McCormick Reaper.
Wherever a carbuncle of stuffiness was to be lanced, or a
sham mowed down, Henry Mencken rushed in, flailing
wonderful words and breaking pompous heads. He lam-
basted the flatulence and hypocrisy of Protestantism, railed
at the mores of the Bible Belt, and jibed at the elk-tooth
flummeries of white males living in the Tepee of Democ-
racy. To express his beery contempt for the gulled middle
class, he coined the word "booboisie"; in Ins^Clinical Notes
he assembled some weird examples of the flora and fauna
thriving in the shadow of Church, school, and State.
When his first number of thojlj^nerican Mercury ap-
peared in 1923, it was like a ffesFi gale blowing
the horsehair-furnitured parlor of convention.
More important than Mencken was Sinclair Lewis, who
won his satirical spurs in Mam Street, published in 1920.
In this devastating study of small-town life, Lewis ex-
posed the vanities and obscenities of Gopher Prairie, a
typical Midwestern town. Lewis continued his attack in
"Babbitt, a merciless portrait of the American businessman.
THE ERA OF DEUCES WILD 83
Babbitt and his friends are revealed as boosters, joiners,
hustlers, "full of push, punch and pep." Yet underneath
their lodge aprons they are seen to be poor, bare, forked
animals who run in herds and worship a slogan deity.
Something very much like compassion overtakes the
reader as Lewis impales his Babbitt-hero on the bent pin
of mimicry and asks: "What becomes of the good life
in a society that flowers in Rotarian conventions and
where dullness is made God?"
While Lewis and Mencken were lunging about the ter-
rain tilting at windmills of business and service, Sherwood
Anderson was exploring the furtive inner life of impulse
and desire. In Winesburg, Ohio; Dark Laughter; and
Many Marriages, Anderson anatomized the libido of the
commonplace man, suppressed by fearful taboos and
cramping inhibitions. No one can read Sherwood Ander-
son without wondering why the institutions of marriage
and family did not explode spontaneously, destroying the
civilization that created them. But these institutions, being
stronger than the American male of 1922, persisted. It
was the individual soul, suggests Anderson, that was cru-
cified and deformed by their pressures.
As for the poets, those seismic recorders of spiritual
temblors, their portion was now to trace tiny molehills on
the unwinding drum of weariness and despair. The great
themes of lyric nature and chivalric love lay exhausted
behind them; no new source of poetic energy had yet
appeared. In the Era of Deuces Wild, there was no de-
mand for poets, nothing for them to celebrate or exalt.
So the trade was taken over by a race of female practi-
tioners who wrung their souls in public for the periwinkle
juices of the poppy, and hacked a runty Pegasus over hill
and dale for the women's magazines. Meanwhile, the sad
voice of T. S. Eliot echoed across The Wasteland, mur-
mured deprecatingly in "Prufrock," and reached a dead
84 FANTASTIC INTERIM
end of utilitarianism Jn the poet's description of himself
and his contemporaries.
We are the hollow men
We are the stuffed men
Leaning together
Headpieces filled with straw. Alas!
10. Showdown
The ship of state was careening badly; the Best Minds
were not solving their problems; Congress was still waiting
leadership from the White House; rumors of Fall's irreg-
ular dealings with Sinclair were afloat; Mrs. Harding was
becoming more bitterly jealous of Nan Britton, and indulg-
ing in fishwife scenes that drove the President out the
back door of the White House with tears streaming from
his eyes. Moreover, the President was getting into personal
hot water with the Anti-Saloon League. Stories of the wild
drinking parties at the White House had begun to leak
out; into the midst of these revels walked Wayne B.
Wheeler, chief counsel of the Anti-Saloon League, and
head of the Federal Enforcement Bureau, Wheeler, a
"blend of Savonarola and gadfly," pounded Harding's
desk and warned him that he must set a more sober ex-
ample to the people of the United States. Whether in fear
of Wheeler, or in mounting concern for his own health,
Harding actually tapered off on alcohol, and began to
undergo the camel agonies of temperance.
The terrific burdens of the Presidency were weighing
down the Roman shoulders, etching lines in the medallion
face. Slowly, Harding was beginning to realize that a man
could not be President of the United States and "one of
the boys" at the same time. But the realization had come
too late; the day of moral choices was over, and the hour
of national scandal and personal disgrace was at hand.
THE ERA OF DEUCES WILD 85
New rumors of graft and peculation reached his ears;
Congressmen complained daily about the irregularities in
Daugherty's office, and were particularly vehement in
their charges against Jess Smith, the Attorney General's
offensive bagman. To allay the mounting clamor, Harding
ordered the Attorney General to give Smith his walking
papers. When the Happy Grafter learned that he was to
be banished from Washington, and that his days of cash
and glory were over, he was stunned. After wandering
about the country like a bereaved spaniel, Jess bought a
revolver and some cartridges. A few days later he was
found dead in his rooms at the Wardman Park Hotel, his
head in a wastebasket and a bullet through his head. Was
it suicide or, as some hinted, murder? An excellent case
could be made for the latter hypothesis. Jess Smith knew
too much, was notoriously loose-mouthed. Of late, his con-
science had begun to bother him; he had even hinted that
confession might relieve his troubled soul. With Jess out
of the way, many personages in high places might rest
more easily. A dead accomplice makes a fine sleeping-
powder, and Harry Daugherty was known to suffer from
insomnia.
An autopsy might have cleared up some of the facts
concerning Smith's death, but Daugherty's Department of
Justice took over the case, and no post-mortem was ever
performed. Later it was discovered that Smith's cash diary,
his financial records (which he kept with meticulous care),
and all his correspondence with Harry Daugherty had
been burned. When Daugherty was tried in 1926 on
charges of "conspiracy to defraud the Government of his
honest, impartial and unprejudiced services," he escaped
conviction because much of the evidence lay in the ashes
of Jess Smith's accounts admittedly burned by Daugherty
himself.
Harding was almost prostrated by news of the Happy
86 FANTASTIC INTERIM
Grafter's death, Jess had been a bosom crony, a one-time
member in good standing of the Poker Cabinet. The cir-
cumstances of his death were sinister, the implications far-
reaching. Would the blood and ashes in the hotel waste-
basket be traced through the White House? No one dared
put the question so nakedly, but the dread possibility
brought huge drops of sweat to official foreheads. It was
a bad half-hour; and when it passed, it left a permanent
scar on Harding's confidence in his friends.
Ill, unhappy, and oppressed by the atmosphere of Wash-
ington, the President planned a "voyage of understanding"
across the country to Alaska. He would refresh himself by
feeling the pulse of the people once more, and restore con-
fidence in the Administration by letting the nation hear
him bloviate from the rear platform of the train.
The "voyage" was not a triumphal procession. Harding
was deathly tired, hopelessly confused; dull, platitudinous
speeches were received with lukewarm approval by Mid-
western farmers who had received no benefits from the
Republicans. Harding's nervous tension was increasing; he
could not sleep, and kept his companions awake half the
night at the card table. It was cruelly hot, but the Presi-
dent doggedly clung to his schedule of rear-platform
speeches in the blazing sun. Obviously he needed a drink,
but in fidelity to his recent conversion, no whisky was
available. Finally, at Tacoma, a newspaperman produced
a flask of choice liquor, and Harding accepted it as a
godsend.
His entourage Herbert Hoover, Drs. Boone and Saw-
yer, and Secretary of the Interior Hubert Work were
gravely worried about the President. Obviously he was in
bad shape; the Alaskan trip was brief, and the company
started homeward. At Vancouver the President received
a secret message and went into a near-collapse. Although
he pulled himself together somewhat, he was never a well
THE ERA OF DEUCES WILD 87
man thereafter. He seemed prey to obsessional fears that
he could not shake off, and would emerge from fits of
despondency to ask pathetically: "What should a Presi-
dent do when his friends are false to him?"
When the party landed at San Francisco on July 29, a
wheel chair was rolled out, but Harding rejected it. Yet
his torpid gait and sagging face muscles were pitiful to
behold. His physicians put him to bed; pneumonia at-
tacked his undermined body. There were cardiac com-
plications; he was obliged to be propped up in bed with
pillows. At 7:35 P.M. on August 3, a small blood clot en-
tered his brain, causing instantaneous death.
Even in eternal repose, Harding was not to be exempt
from scandal. Macabre rumors flew that Mrs. Harding had
poisoned her husband, that her motive was a mixture of
jealousy and a merciful desire to save him from impending
disgrace. She would not permit an autopsy to be per-
formed. Another legend says that the President, fearful of
impeachment, committed suicide. A still more gruesome
variation holds that he was done to death by Dr. Sawyer
and Mrs. Harding, and that Sawyer's own death a year
later was encompassed by the President's wife. None of
these Macbeth inventions are to be credited, but their per-
sistent currency emphasizes the dark skein of tragedy that
enmeshed Warren G. Harding from the day of his nom-
ination to the hour of his death.
It was long the fashion to pity the affable Harding, to
say that he was betrayed by his friends, that he was un-
aware of their perfidy and personally unmuddied by their
guilt. But this verges on nonsense; there is no such thing
as an innocent bystander in the White House. The fact
stands that as the stew of corruption thickened and became
more foul, no rebuke came from the man who had taken
the oath to protect the Constitution. And the men who sat
in his Cabinet-Hoover, Mellon, and Hughes, as well as
88 FANTASTIC INTERIM
Vice-President Coolidge, to mention four of the greatest-
were they not culpable, too, in failing to protest at the car-
nival of looting and laxity that went forward while they
held responsible office? In all the New Jerusalem of nor-
malcy there was not one man brave enough to cry "Halt!"
or disgusted enough to resign.
And so it happened that while the Best Minds snored
and the people slumbered, great evils overtook the coun-
try. The real charges against Harding and his regime are
not Teapot Dome and the Alien Custodian frauds. These
involved at most a few wretched men and some millions
of dollars. But the terrible mischiefs set in motion by
the tariffs, isolation, and the disarmament follies of the
Harding Administration affected every taxpayer, laborer,
farmer, and consumer in the United States, started us
down the road to international grief. While Europe gener-
ated new quarrels and sank into its old quagmire of deceit,
while Japan like a giant squid blackened the waters of
Pacific diplomacy and wound its tentacles tighter around
China, the military defenses of the United States moldered,
erosion scored the plains, shipyards decayed, and jobless
gunsmiths lost their cunning. Bemused, the people danced
around the maypole of peace, and dry rot ate deeper into
the four pillars of the American dream-bed.
Meanwhile, in advertising and brokerage offices a rising
hum was heard. A fresh sweet wind fluttered the burgees
of business. Coolidge was i-cumen in, and the clack of
the stock ticker was heard in the land.
THE BUSINESS OF AMERICA IS BUSINESS
1. Keep Cool with Coolidge
THESE be paradoxes:
Calvin Coolidge was a man whose personal economy
trenched on the borders of parsimony. Thrift was his re-
ligion. He could save $50,000 a year on the President's
salary, haggle about the number of hams to be served at a
White House dinner, and return contentedly to a $32-2-
month flat when his term of office expired. Yet this strayed
homespun was Chief Executive of the United States dur-
ing its purplest orgy of spending and extravagance.
Coolidge's fame rests on six words: "We must have law
and order/' Yet during his Presidency the law of the coun-
try was in a virtual state of suspension while gangsters pro-
claimed the statute of the tommy gun and the bootlegger
dealt out the leering justice of the "ride."
Coolidge never gambled, never risked a penny in specu-
lation. But during the six years of his Presidency un-
counted billions of dollars blew across the landscape in a
raging whirlwind of stock speculation and market gam-
bling.
Coolidge was dubbed the "high priest of stability," and
during his lifetime was regarded as the pillar of economic
orthodoxy and permanence. But today the expression
89
90 FANTASTIC INTERIM
"Coolidge prosperity" is a jeering synonym for every-
thing that is ephemeral and meretricious.
Reared in a hard-bitten school of scarcity ("Eat it up,
make it do, wear it out" was the code of his formative
years), Coolidge witnessed on a gigantic scale a carnival
of overproduction, superplenitude, and incalculable waste.
Yet he made no protest, proclaimed no curfew to the
Caligulan excesses taking place under his codfish eye. On
the contrary (and this is the strangest contradiction of all),
he encouraged and inflamed the speculative passions of
his countrymen even while he knew that the earth was
opening under their feet.
Coolidge broke all the rules of successful politics: he
kissed no babies, waved no banners, made few speeches.
Yet he was never defeated for public office. His vote-
getting ability was the envy of his rivals, baffled even the
members of his own party. Lodge simply could not under-
stand what made the Yankee carpetbagger tick, and con-,
temptuously refused to consider his name as the Presiden-
tial candidate at Chicago in 1920. "A man who lives in a
two-family house?" sneered Lodge. "Never!" Yet Calvin
of the pinched mouth and nasal quack undoubtedly had
a way with the electorate. From Mayor of Northampton
to the Massachusetts Senate, thence upward to Lieutenant
Governor and the Vice-Presidency, his climb had been
steady and uninterrupted. While more brilliant men
burned themselves out with oratory, and more outspoken
men gained enemies, Coolidge's dogged mediocrity-
abetted by spectacular luck had lifted him in fourteen
years from the obscurity of village politics to the purlieus
of supreme command.
And now with freakish glee Fate had plopped him into
the buskin boots of the Presidency. Against the Currier
& Ives background of his paternal home in Plymouth,
Vermont, he had taken the high oath of the Presidency,
THE BUSINESS OF AMERICA IS BUSINESS 91
administered by his father. Not a feature was missing in
this dramatic tableau: the kerosene lamp, the homely par-
lor with the family album on the table, the old-fashioned
clock pointing to the premilking hour of 2:47 A.M. all
these made exactly the right impression on the American
people. The fact that the whole performance had to be
repeated in Washington because Coolidge's father had no
jurisdiction to tender the oath was little publicized and
generously forgotten. The people felt that a good and
righteous steersman, albeit a trifle undersized, was at the
helm.
Coolidge was exactly the kind of a President the coun-
try wantedand exactly the kind of a President the
country should not have had. Parochial, cheeseparing, low-
tensioned, he was the embodiment of the gap that was
widening between American politics and the realities of
a changing world. His virtues, and he possessed many,
were of the Whittier Snowbound variety; his talent for
slate-pencil politics was of little value in solving the giant
rebus of international affairs. The President's town-meet-
ing mind simply could not grasp world issues; as a result,
the foreign policy of the United States went by default.
Nor was Coolidge's domestic record impressive. His Ad-
ministration was marked by a paucity of social legislation
and a shocking failure to enforce Prohibition, relieve pov-
erty, or suppress crime. In fact, the dearth of positive
achievement both at home and abroad leads the puzzled
inquirer to ask: "What tvere the mainsprings of Coolidge's
political philosophy?"
/Two leading ideaseconomy and "hands off" emerge
from a study of the Coolidge anachronism; the two ideas
conveniently dovetailed. By doing nothing, the Federal
Government could save money, so the Federal Govern-
ment did nothing. In the sacred name of economy Coolidge
allowed the Navy to fall apart and permitted the Army
92 FANTASTIC INTERIM
to deteriorate beyond repair. Our gelded military strength
so wrecked our diplomacy that we barely retained our
position as a Great Power, and entirely forfeited the re-
spect of Europe and Japan. The traditional Republican
concept of a strong central government was abandoned,
simply because it would cost too much money to perpetu-
ate it. At a time when the affairs of the United States
needed firm executive handling, Coolidge munched in-
digestible pancakes and sausages and drifted heavily
through five and a half years.
There was, moreover, a personal reason for Coolidge's
do-nothingism. The man was singularly lacking in physical
and nervous energy; at times he seemed almost a valetudi-
narian. He took a two-hour nap every day after luncheon,
and always was in bed by 10 P.M. He suffered from
chronic indigestion, and his wife reports that he had a
furtive habit of feeling his pulse at odd hours of the day.
It is known also that he was gravely concerned about his
heart. Given these constitutional debilities and a meager
supply of vital force, Coolidge was not likely to spend
his little store of energy engaging in gratuitous crusades
or battling for social ideals. He sounded no trumpets and
tilted at no windmills merely because he possessed barely
enough strength to get through the routine of his job.
Even "Silent Gal's" taciturnity can be interpreted as a
tight-lipped determination to husband his frail physical
resources.
Coolidge's first moves reassured (that is, did not disturb)
the country. Sedately rocking on the porch of the White
House, he announced that the business of America was
business, and that economy would be his chief concern.
Of the odoriferous oil scandals, he said nothing. His de-
meanor was cool, his actions unhurried; the total impres-
sion was that of a man who had prepared himself by long
apprenticeship for the great task now before him. Poll-
THE BUSINESS OF AMERICA IS BUSINESS 93
ticians who had scorned him as Vice-President, Cabinet
members who had neglected him socially, the press which
had found him singularly colorless and disappointing, now
agreed that his actions and utterances were consummately
right. "Coolidge is handling the situation beautifully,"
wrote Taft to a friend. "The country is safe with Cool-
idge," commented Henry Ford. Thus while rascals Denby
and Daugherty still sat in the Cabinet, the Book of Calvin
opened with the imprimaturs and the nihil obstats of the
hierarchy.
The press burst into paeans of praise when the President
announced that Andrew Mellon was to stay on in the
Treasury. The announcement would have been more ac-
curate had Coolidge said: "Andrew Mellon will control
the fiscal policy of the United States during my term of
office." For that was what happened. The two men saw
eye to eye on finance; they had both been suckled on the
sweet milk of high tariffs, and they now chewed in unison
on the dry crust of governmental economy.
Early notice of the Coolidge-Mellon league was given
in the first message to Congress in December 1923. The
President dealt chiefly with understandable dollars and
cents, and dodged every issue that could not be tabulated
on an abacus. "I do not," said Coolidge, "favor the grant-
ing of a bonus. ... I am opposed to cancellation of the
war debts. . . . The Fordney-McCumber Tariff will be
retained. . . . Our Government does not propose to enter
into relations with Russia." As for tax reduction: "A plan
has been presented by the Secretary of the Treasury which
has my unqualified approval. The country wants this meas-
ure to have right of way over all others." To the farmers,
wallowing in the deepest slump since 1815, Coolidge prof-
fered some dry Yankee advice: "No complicated scheme
of relief, no plan for government fixing of prices, no
resort to the public Treasury will be of any value. Simple
94 FANTASTIC INTERIM
and direct methods put into operation by the farmer him-
self are the only real sources of restoration."
An admiring biographer suggests that Coolidge dis-
played high courage in telling the farmers that their Gov-
ernment would not aid them. But did he? The farmers
were an unorganized minority; they had no powerful
champion in Congress and no great lobby to threaten in
their behalf. They were a forlorn and puzzled lot of men,
who knew only that the price of wheat had tumbled to
50 cents a bushel and still kept dropping; that they had
to pay 12 per cent to local bankers for loans to buy seed
and farm machinery at city prices; that their land, depleted
by overcropping and erosion, needed millions of tons of
fertilizer to renew it; and finally, that the fertilizer trust
was jacking the price of potash and nitrogen higher every
month. Their mortgages were being foreclosed by the
thousands; farm machinery lay rusting; their children were
flocking to overcrowded cities. And in this desperate pass,
Calvin Coolidge had the courage to say: "Diversify your
crops, work hard, and don't expect any help from Wash-
ington."
While the farmers were being urged to exercise the
rugged virtues of individualism, what assistance was being
given to industry? Here quite another tableau was being
enacted. The Fordney-McCumber Tariff was a smiling
mask donned by the Federal Government and turned ful-
somely on manufacturers and heavy industrialists. Take,
for example, that significant item, aluminum. This Mellon
metal was "protected" by a bristling tariff of 5 cents per
pound. No foreign aluminum could leap this wall; the
country was wholly dependent on the Aluminum Cor-
poration of America, a Mellon corporation, for its supply
of the precious white metal for which new uses were being
found every day. A similar hedge of plum and barberry was
placed around the textile interests of New England. Fab-
THE BUSINESS OF AMERICA IS BUSINESS 95
ricators of leather and metal were protected by tall break-
waters from the influx of foreign goods. These were the
darlings of the Administration, and no rough wind from
alien shores was allowed to whip their tender cheeks.
With taxes low and tariffs high, the Coolidge desk was
clear, the Coolidge sky cloudless; the thin man who had
received the mantle of the Presidency at second hand from
the shoulders of his predecessor was practically assured of
wearing it in his own right after the coming elections.
Despite his crape-hung countenance, his inactivity, his ut-
terances of purest pump-handle prose, the Coolidge myth
was already flourishing. At times it seemed that the only
bar to Coolidge's success was his unfortunate habit of
looking and sounding ridiculous. The instruments of the
age conspired against him: the camera had a way of mak-
ing him look scrawny and pathetic; the radio, which he
used sparingly, emphasized the tinny quality half quack,
half nasal whine of his voice. Every hat that Coolidge
wore, every costume he donned, seemed too big for him;
nevertheless he was known to be sound in character, pure
in private life, and a man who could be depended upon
to let business strictly alone.
This was enough, more than enough, to secure his un-
contested nomination at Cleveland in the summer of 1924.
In his acceptance speech the nominee proclaimed: "The
people want to be told the truth. They want to be trusted.
They want a chance to work out their own material and
spiritual salvation. The people want a government of com-
mon sense." It was the speech of a mind pitifully incapable
of understanding the vast problems confronting it; Har-
ding at his worst had never uttered such twaddle. The
government of truth, trust, and common sense promised
by Coolidge turned out to be a government of favoritism,
falsehood, and folly, an explosion of ignorance that hurled
the United States into the madness of the Great Boom
96 " FANTASTIC INTERIM
and dropped it into the abyss of the Great Depression.
In the listless campaign that followed, the Democratic
candidate, John W. Davis, attempted to make political
capital of the corruption and graft so prevalent in the
Harding regime, but the country barely listened. Popular
indignation could not be aroused; indeed, a curious annoy-
ance was displayed when the tale of Fall's criminal nego-
tiations was aired by Senator Walsh. "Why bring that
up?" was the general attitude. When Denby finally re-
signed, he was met at the Detroit railroad station by a
brass band and escorted to his home by a parade. Inves-
tigators who waded through puddles of oil to find culprits
in high places were castigated as "mud-gunners" and scav-
engers. Public opinion minimized the malfeasance of Har-
ding's appointees, and exhibited an imbecilic eagerness to
forget the whole affair.
Senator Bob La Follette the elder, representing laborers,
farmers, and Socialists, apealed to a large body of progres-
sive voters. Yet the final issue was never in doubt. Coolidge
received 15,725,000 votes, Davis 8,386,500, and La Follette
less than 5,000,000.
The starting pistol had been fired; the voters pulled the
trigger with their own hand. The sharp crack of the Re-
publican victory was the signal that the breakneck scram-
ble for prosperity was on.
2. Formula for Prosperity
The age that now began had the quality of being sus-
pended in mid-aira combination of febrile image, rnagic
carpet, Indian rope trick, and high-wire juggling, all tak-
ing place in an atmosphere of roller-coaster excitement
and Mardi Gras confusion. Sober men looking backward
might easily say that it was all a nightmare, that it never
THE BUSINESS OF AMERICA IS BUSINESS 97
could have happened. But America knows that it did
happen by the wreckage left behind.
It was the best of times and the worst of times, an era
of purple-velveted hotels and millions of shacks with out-
door privies; of crowded speakeasies and abandoned farms;
of majestic natural scenery and tawdry amusement parks;
of potential abundance and starveling scarcity. Grotesque
contrasts were noted wherever the eye fell Endowed re-
search workers devoted their lives to the conquest of pain
and disease, but into thousands of counties no physician
had ever penetrated. There was an increase in leisure but
an intolerable speed-up on the belt line of production. It
was a time of technological mastery and abominable waste
of natural resources. While great laboratories discovered
cheaper methods of deriving new products from coal tar,
40,000,000 tons of irreplaceable phosphorus, potassium,
and nitrogen were being eroded annually from the topsoil
of our farms. The clash of new technicways and old folk-
ways resounded; outwardly there were bluif confidence
and smiling hope, but inwardly all was cankering doubt
and ghastly fear. Endless questions bred multiple answers,
and although uniformity was the mode of national usage,
there arose a confusion of tongues and a strident babel of
creeds.
The acquisition of money became the guiding obsession
of the age. The possession of it conferred privileges, im-
munities, and pleasures in the form of rich houses, fast
cars, much clothing, desirable women, and the acclamation
of one's fellows. Lack of money was the only crime.
Schedules were posted in college and the public prints
showing how much money a man should have at succes-
sive ages. A mammoth electric sign over a Columbus Circle
office building blinked "You should have $10,000 at the
age of 30; $25,000 at the age of 40; $50,000 at 50." Men
Relieved the sign, were goaded into furies of acquisition
98 FANTASTIC INTERIM
to attain the illuminated goal. Their position in the com-
munity, their success with women, and what was more
tragic, their opinion of themselves, depended on how
closely they adhered to, or exceeded, the demands of the
money-making schedule.
The tempo of the age was set by the whirring conveyor
belt of mass production, slipping into high gear for the
first time. This remarkable engine threw off sparks of pure
gold; it was the dynamo that supplied industry with its
sizzling currents of profit. Coolidge prosperity was the tri-
umph of the perfected belt linea device which stamped,
pressed, cut, drilled, abraded, sawed, spun, polished, and
lacquered a profusion of commodities, conveniences, luxu-
ries, and variegated gadgets in ever increasing quantities at
ever decreasing cost.
Pioneered by Henry Ford, American industry discov-
ered that it had a machine amply capable of supplying
every need, reasonable or otherwise, of a vast population.
But industry also discovered that unless the products
whirling off the endless belt were immediately and con-
tinually whisked away by purchasers, a fatal clogging
would take place. It was dangerous, businessmen learned,
to produce goods unless the products could be sold to an
eager, prosperous, and bottomless market. But in 1923 this
perfect market did not exist in the United States, or any-
where else. Consumers, eager though they were for satis-
factions, lacked the ready money to buy even a small per-
centage of the goods produced by these miraculous ma-
chines. Said the consumer, in effect: "Automobiles, vac-
uum cleaners, bathroom fixtures, and washing machines
are very nice, LJ I don't need all of them, and what's
more, I haven't got the money to buy them." American
business realized that this was an honest statement of the
position, and with characteristic ingenuity set about mend-
ing the defective spokes in the golden wheel of progress.
THE BUSINESS OF AMERICA IS BUSINESS 99
Two simple devices, advertising and installment buying,
made the wheel turn faster than ever. Advertising created
in the consumer an insatiable desire for goods, and the in-
stallment plan gave him the immediate means to satisfy his
desires. And so the magic formula was arrived at:
Mass production + Advertising + Installment buying
= Prosperity now and forever.
The formula worked; its success overwhelmed its in-
ventors; it overwhelmed everybody. Like the enchanted
salt mill of the fable, it ground out sparkling profit at a
whisper of command. But like the owner of the salt mill,
the proprietors of the system forgot the stop word. The
mill could not be halted; it kept on grinding until the
United States, staggering and overborne, broke down un-
der the fabulous grist.
But away with allegory. Here is what actually hap-
pened.
Until 1920 installment buying was in utter disrepute.
Solid citizens frowned on it; there was something immoral
about buying things that you couldn't pay for; most men
would rather be caught flagrante delicto than coming out
of an installment house. The whole business was shoddy,
illicit, and carried the same moral overtones as pawning
your watch. Ford first tried to induce people to save their
money and only then buy a car; that was the traditional
American way of doing things the thrifty, upright
method of acquiring property. But the new generation of
buyers were an impatient, thriftless lot, quite willing to be
seduced by the bribe cff immediate possession. What mat-
ter if immediate ownership meant a mortgage on next
year's income? Conscience was salved when the great auto
manufacturers dropped the despised term "installment
plan" and began to talk of "acceptances." You now
bought a car on "deferred payments" or a "budget plan."
100 FANTASTIC INTERIM
Bankers and industrialists urged the buyer "to exercise his
credit." But the principle was the same. The buyer signed
a chattel mortgage, paid interest and carrying charges
varying between 20 and 36 per cent, and drove off in the
car. Wishes became horses and beggars could ride.
By 1925 all kinds of goods were being sold on the in-
stallment plan; in that year 80 per cent of all automobiles,
75 per cent of all household electrical appliances, were
bought in this way. One-sixth of the national income was
spent in installment buying, with automobiles claiming the
largest item of $4,000,000,000.
The buying boom surged forward like a pig shot out of
a barrel. It was no longer disreputable to finance this year's
prosperity on next year's income. Learned authorities gave
sanction to the system. Professor E. R. A. Seligman de-
clared: "Instalment buying is a device for making currently
available the assets of industrious individuals who have a
regular and dependable earning power, though little capital
accumulation." Otto Kahn, banker and philanthropist,
chanted: "The difference between what is available to the
rich and to people of small means is diminishing. Instal-
ment buying has contributed materially toward this emi-
nently desirable consummation." This aroma of bogus
equality brought on by happy, happy installment buying
pervaded the American market place, and no one was too
mean to sniff a lungful of the bracing ozone.
Truly it seemed that the lost chart to Utopia had been
found, and that by following the signposts of the install-
ment system the world would reach the long-awaited era
of milk and honey. But there was still a drawback the
customers weren't rushing forward rapidly enough. If left
to themselves, they were inclined to dawdle a bit, even to
sink back contentedly into the old habits of thrift. Whips
had to be brought down smartly across their shoulders
or the procession would never get anywhere. For if people
THE BUSINESS OF AMERICA IS BUSINESS IOI
stopped buying, the whole system of mass production
would be thrown out of gear. It was essential, then, to
arouse in the consumer an even more passionate hunger
for goods. And to this task the gross aphrodisiac of adver-
tising was now applied.
Advertising had existed since the Stone Age; it had al-
ready done a fairly good job on the American people.
Merchants like Wanarnaker and Stewart had liberally ap-
prised the purchaser of the bargains to be had in their
stores. But the old school of advertising was a naive thing,
It merely said: "Our soap is good; our soap is cheap." If
a person needed soap, he would presumably buy a prod-
uct that was both good and cheap. But under the new bull-
whip philosophy of advertising, the consumer must not be
permitted to reach this matter-of-fact decision about soap.
He must be warned that unless he buys a particular brand
of soap before nightfall he will offend his neighbors and
friends by the rank odors emanating from his unwashed
body. If the customer be a woman, she must be told that
she risks losing love by neglecting to dip her dainty under-
things in a daily drench of soap chips. Psychological ex-
perts scientifically tabulated various appeals, threats, cajol-
eries, to force the laggard buyer into the market. His van-
ity, shame, fear, and cupidity were plucked at by slogan-
eering fingers. "Even your best friend won't tell you."
"Four out of five have it." "This lovely bride gave her
husband athlete's foot!" and "It's a mark of distinction to
smoke (eat, chew, gargle, serve, own, drive) Shucksies."
These were but a few of the goads that pricked the pur-
chaser into buying furies of emulation and fear.
The world as depicted in the advertisements was a glow-
ing and successful community full of bright smiles and
almost intolerable satisfactions. Lovely ladies sat at the
wheels of gorgeous motorcars while attractive, long-legged
men leaned over them attentively. Into a candlelit dining-
102 FANTASTIC INTERIM
room gleaming with crystal and elegant napery, an English-
type butler proudly bore on his silver salver a can of baked
beans while the diners smiled at each other in unbearable
anticipation. Or a female with exquisite bosoms peeping
through an imported French nightgown lay back with an
ecstatic smile on a snow-white double bed and beamed:
"My Yumsutta sheets are satin-smooth at a ridiculously
low price." In gleaming kitchens, unperturbed housewives,
with nary a hair out of place, whipped up a Sunday-night
snack for an unexpected party of eight by reaching for a
tin of Five Star deviled ham and a can-opener. It was ab-
surd, it was exaggerated, and much of it was downright
dishonest. But it sold the goods, and it created in American
buyers a palpitant, mouth-watering desire for more.
Five and a half billion linear lines of advertising-enough
to encircle our astonished solar system came off the
presses during the 2o's. Advertising was a greater force in
daily living than religion or patriotism. Eighty per cent of
all mail was advertising matter; 60 per cent of newspaper
space was devoted to advertising. Signposts so flooded the
landscape that one could not see the forest for the ads;
five thousand screaming billboards sprang up along the
Pennsy tracks between New York and Washington.
American advertisers in 1927 spent $1,284,000,000 high-
pressuring the public to buy articles they may or may not
have wanted. (By 1936 this sum had doubled.) And for
every dollar spent in advertising coughdrops, canned soup,
cigarettes, dog soap, mayonnaise, lipstick, and laxatives, a
mere 40 cents was spent on all kinds of education private
and public, lay and religious, primary and secondary, col-
legiate and postgraduate in the entire country.
Naturally, these vast expenditures had to be justified,
and no dearth of justifiers was found. Advertising, claimed
its defenders, enabled the manufacturer to produce more
goods more cheaply and thus raised the standard of Amer-
THE BUSINESS OF AMERICA IS BUSINESS 103
ican life. When it was argued that advertising tempted
the consumer to buy more than he could afford, the re-
buttal was pat: The American way of life depended upon
the widest possible consumption and enjoyment of goods
by the largest possible number of people. Such utilitarian
arguments were difficult to brush aside, but as the tumult
rose higher, these bread-and-butter statements were sup-
planted by loftier apologies by poets laureate of the move-
ment. The Reverend and much revered S. Parkes Cadman
told a Rotary luncheon group: "Advertising is a thing of
the imagination and is advancing in beauty and execution
every day." Ralph Starr Butler, a not disinterested vice-
president of the General Foods Corporation, said in a
radio broadcast: "Advertising promotes that divine dis-
content which makes people strive to improve their eco-
nomic status." And Calvin Coolidge saw advertising as
nothing less than the lever of the universe. In 1926 he de-
clared: "The preeminence of America in industry has come
very largely through mass production. Mass production is
possible only where there is mass demand. Mass demand has
been created almost entirely through the development of
advertising." Q.E.D., Advertising created Coolidge pros-
peritya date-palm mirage, very pleasant in its way, but
notably impermanent, and never at any time shared by
more than one-third of the population.
Pass lightly over the exaggerations, the false claims, and
the geysers of pish-posh spouted by advertising. The chief
objection to advertising was that it menaced the intellect-
ual and moral balance of the people. Advertising created
a world of desire so unattainable by two-thirds of the pop-
ulation that all but the strongest minds were dangerously
cloven and all but the stoutest incomes wrecked by the
attempt to straddle the gap. Advertising begot a jittery
restlessness, then vainly attempted to soothe ideal longings
with material goods. It plied us with multiple satisfactions
!I04 FANTASTIC INTERIM
which, when grasped and swallowed, had the effect of salt
water on a thirsty castaway. More thirst, more salt water,
hallucinations, and a horrible death in 1929.
If advertising and installment buying were the gospels
of the age, the salesman was its most glorious evangel. It
was the salesman who, when all was said, kept the goods
flowing in a profitable stream from factory to consumer.
The salesman was a godson of Aeolus, breezy, spruce, ra-
diating personality, and bubbling with effervescent loyalty
to the "old man," sometimes referred to as J.G. or merely
the Chief. Regarded by himself and others as the finest
flower of American civilization, the salesman, at the merest
whiff of a potential sale, would gnaw a prospect's ear off
extolling the merits, low price, trade-in value, and all-
round superiority of his product. Because the harvest was
big, the reapers were many. Swarms of salesmen were
loosed upon the land, each armed with a pneumatic-drill
sales talk and a battery of oversized fountain pens. The
canvass was guaranteed to penetrate the toughest hide of
consumer resistance, and at the strategic moment the foun-
tain pen was thrust into the buyer's hand as he limply
signed on the dotted line.
Sales drives were planned with the precision of a mili-
tary campaign and conducted with the zealotry of a
pogrom. Office walls were hung with pie charts, graphs
of individual performances, gigantic thermometers show-
ing last week's sales temperature, and maps bristling with
orange, red, and violet pins. While selling was represented
as a noble and dignified profession, there were few indig-
nities to which the salesman would not stoop. Flagrant as-
saults were made upon the credulity of the customer; his
home and his privacy were rudely invaded by "go-getters,"
drilled in a hundred variations of the old tin-peddler's
foot-in-the-door technique. It was deemed vastly clever, if
a salesman could force his way into a home, attach his
THE BUSINESS OF AMERICA IS BUSINESS 105
vacuum cleaner to a lamp socket, and clean a rug while
the housewife looked on helplessly and finally succumbed
to his selling line. A race of conscienceless sales managers
sprang up, to train and direct the field operations of the
salesmen. These managers cut the country up into "terri-
tories" and established "quotas" for their cohorts. Mem-
bers of the sales organizations were rewarded or penalized
according to results obtained. Cash prizes, boosting no-
tices in the house organ, and increased commissions were
the incentives held out to the individual salesman. Igno-
miny and the loss of his job were the fate of the worker
who failed to fill his quota. The whole business took place
in an atmosphere of ecstatic "pep talks" and holy-rollerism
which drove the crazed salesman out onto the highways
to waylay and bind his victims and return with a bulging
portfolio of orders.
But even frantic advertising, loosened credit, and tur-
bine-geared salesmanship could not drain off the roaring
Niagara of goods pouring from the mills and factories.
Gradually, markets became saturated; the houses and ga-
rages of anyone faintly eligible for credit were crammed
with shiny goods and machines which were not wearing
out rapidly enough. Buyers were irritatingly slow to re-
place automobiles, radios, and refrigerators durable, well-
made articles that might serve the owner for years to come.
And so th^e new concept of "obsolescence" was devised to
step up the flow of goods. Obsolescence simply meant
being out of date. If articles that had flooded the consumer
market yesterday could be made obsolete today, the whole
market would again be available tomorrow. And so it
came about that the emphasis was focused upon the new
model, the latest thing, the gewgaw of the moment. Every
year a new crop of automobiles attempted to make last
year's model seem as old-fashioned as the Conestoga
wagon. With radios, the rate of obsolescence was even
106 FANTASTIC INTERIM
more rapid; by June the January number seemed crude,
out of date. In many instances genuine technological ad-
vances were made, but too often the changes were merely
stylistic and superficial The social stigma attaching to the
use of outmoded models was so skillfully emphasized by
advertisers and salesmen that the buyer was shamed into
discarding last year's machine in favor of the newer, more
gingerbreaded versionwhich, in addition to a splashier
display of chromium, might also offer the advantages of
free-wheeling, synchro-mesh transmission, selective finger-
tip control, superheterodyne reception, and your choice
of nine finishes in either Hepplewhite, Duncan Phyfe, or
Hollywood Colonial.
Credit and supersalesmanship enabled many a parvenu
to amass heavy agglomerations of luxury goods napery,
crystal, china, and silverware. The possession of this social
baggage led, naturally enough, to its display and increased
use at dinners, teas, and luncheons. But here the arriviste
hostess ran headlong into difficulties. Should the salad fork
be placed to the left or the right of the dinner fork?
Should the butter knife be ranged on or beside the butter
plate? Schisms arose as to whether the hostess should be
served before her guests, and (according to the advertise-
ments) even well-mannered diners were allowed to titter
when some child of nature speared an olive with an oyster
fork. Eating became a monstrous hazard, the dining-room
was full of pitfalls, and a hostess could expose herself to
ridicule by at least six dozen social missteps.
The danger of the faux pas extended to such matters as
weddings, debuts, and receptions to visiting dignitaries.
New-rich husbands and fathers needed instruction in the
proper use of the striped trouser and the top hat. The
wording of invitations and the proper arrangement of
flowers became jungles of possible error. Was there no
chart to guide one through the maze of social responsi-
THE BUSINESS OF AMERICA IS BUSINESS 107
bilities created by the rise of a flatware-owning middle
class?
At a time when brows were grimly knit with social
perplexities, a Lady Chesterfield appeared and told the be-
wildered bourgeoisie just what to do with their hands,
soup spoons, pickle forks, and marriageable daughters.
Emily Post's Etiquette, published in 1922, was precisely
the guide that America needed. Sprung of aristocratic
forebears, Mrs. Post managed to impart just the proper
touch of the haut monde to the doings of a million Amer-
icans who could afford to lay a fresh cloth at every meal.
Her treatise was a cross between Hoyle's Book of Games
and the family Bible; it was consulted oftener than either
of these, and became the final arbiter of the standardized
good life that increasing numbers of Americans aspired to
lead. At first Mrs. Post erred on the side of conservatism.
As late as 1927, she held that "absolutely no lady can go
to dinner or supper in a restaurant alone with a gentle-
man." Throughout Prohibition she maintained that a "gen-
tleman affected by alcohol" didn't appear in the presence
of ladies. The problem of a lady affected by alcohol Mrs.
Post neglected to take up.
Thus in a society that valued etiquette above culture,
the gears of production were made to grind at shriller
speed, the cries of advertisers became throatier, the pres-
sure of salesmen more irresistible, and the burden of debt
more onerous. This was progress. This was Coolidge pros-
perity.
3. The Era of Wonderful Nonsense
Given the fatness of Coolidge prosperity, and the new
leisure made possible by laborsaving devices, what did the
people do with these prizes? Was there a renaissance of
the arts, a quickening of religion, a tranquil deepening of
108 FANTASTIC INTERIM
thought? Did a Periclean Age of culture ensue? No. Liv-
ing under conditions nearly perfect (according to the ad-
vertising pages) for the expression of man's nobler self, the
people proceeded to spend their energies, leisure, and sub-
stance in cheap and pitiful pursuits. The country aban-
doned itself to diversions which, though not out of place
at a Moose convention, were scarcely creditable to a great
nation at the high-water mark of its material fortunes.
Although the greater part of our energy leapt between
the magnetic poles of the dollar sign, there was still plenty
for mad trivia. Who can recount the minor follies of the
age? There was the succulent Peaches Browning and her
senile Daddy with his toy goose; Mayor Jimmy Walker
and his lush receptions to all and sundry Gertrude Ederle,
Commander Byrd, and Queen Marie on the steps of City
Hall. These civic-greeting debauches with their showers
of ticker tape, keys to the city, gardenias by Grover
Whalen, and wisecracks by the Mayor, were a recog-
nized part of metropolitan life. Freak contests and bizarre
spectacles became the chief concerns of the populace.
While our shipyards rotted in ignoble idleness, while mil-
lions of Southern children developed rachitic knobs on
their heads from malnutrition, while the League of Nations
floundered impotently, unsupported by our Western
strength, the American people gave themselves over to
pole-sitting, bunion derbies, nonstop chained-to-the-wheel
automobile races, egg-eating contests, murder trials, rum-
running, and long-distance fiddling orgies each dizzier
and more meaningless than the last.
A typical performance of the age was the crucifixion
of General "Billy" Mitchell when he persisted in telling
the American brass hats that their neglect of air power
was putting the United States at the mercy of the world.
Bill Mitchell was no theoretician. A pilot almost from
the day the airplane was invented, he had been Com-
THE BUSINESS OF AMERICA IS BUSINESS log
mander of the American Air Force in France under
Pershing, and the first to win the Distinguished Service
Cross for heroism in action. Mitchell had fought with his
men in the skies over Europe's battlefields, had witnessed
the appalling havoc spread by aerial explosives dropped
from his bombers. He saw the airplane evolve in four
years from an experimental wooden crate into a terrible
weapon which could annihilate space, disperse armies, and
destroy cities. Moreover, he knew that the airplane was
still in its infancy, and that it would swiftly develop into
an instrument of incredible speed, power, and endurance.
As Assistant Chief of the Army Air Service, Mitchell
tried to convince the country after the war that the air-
plane would be the great military weapon of tomorrow.
But the people had sunk into complete indifference and
were content to let a moss-grown military bureaucracy
control their destiny. Soon Mitchell's buoyant enthusiasm
ran head-on into the old-school opposition on both Army
and Navy staffs. Entrenched behind Washington desks,
they ridiculed Mitchell's emphasis on air power, censured
his "insubordination," and became increasingly outraged
when Mitchell publicly argued that the nation should have
a separate air force, run by airmen who knew their busi-
ness. Quietly, they began sharpening their knives for
Mitchell's scalp.
The irrepressible Mitchell went right ahead with his
campaign. As early as 1920 he began to proclaim that the
battleship was obsolete. "Air power," he kept repeating,
"can destroy any battleship that has ever been built or
ever can be built." He said this so loudly and so often that
Congress finally gave him a chance to prove it. A fleet
of overage fighting vessels was anchored off the Virginia
capes. Among them was the captured German battleship
Ostfriesland, which her builders considered unsinkable*
While skeptical naval officials watched on September 3,
110 FANTASTIC INTERIM
1921, Mitchell and his planes tore the ships apart. Two
heavy bombs dropped neatly alongside the Ostfriesland
ripped gaping holes below her armor belt. In a few min-
utes, the "unsinkable" battleship stood on beam ends and
slid to the bottom. Two years later Mitchell repeated his
performance, using the obsolete battleships Virginia and
New Jersey as targets. It took his fleet of seven Martin
bombers about fifteen minutes to send each ship to her
grave.
Mitchell had made world history, for never before had
a plane sunk a battleship. Obviously, his demonstrations
called for revisions of previous naval strategy. As a result,
every first-class nation began building up its air power
every nation, that is, except the United States. The brass
hats in Washington, far from profiting by Mitchell's les-
son, hated him for administering it.
But Mitchell clung stubbornly to the facts. He warned
that Japan, England, France, Italy, even Germany, were
far ahead of the United States in the construction of pow-
erful air arms. He pointed out that all the planes in the
United States Army were utterly archaic. "Flaming cof-
fins," he called them, and added: "We have no airplanes
that could be used in a modern air battle." In 1922 he
urged the nation to build a fleet of bombers capable of
flying at 35,000 feet, with a cruising radius of 8,000 miles.
General Hugh Drum arose to protest: "As far as we can
see now, future development is going to limit the bomber
to 300 miles." General Hines, Chief of Staff, was certain
that as a means of attack the airplane was negligible,
"chiefly valuable for scouting."
In the end, Mitchell gained nothing but the implacable
enmity of his superiors. When his term as Assistant Chief
expired in 1924, Secretary of War Weeks voted against
his reappointment. In his official report to President Cool-
idge, Weeks wrote: "General Mitchell's whole course has
THE BUSINESS OF AMERICA IS BUSINESS III
been so lawless, so contrary to the building up of an effi-
cient organization, so lacking in team work . . . that his
actions make him unfit for a high administrative position
such as he now holds. . . . His record since the War has
been such that he has forfeited the good opinion of those
who are familiar with the facts and who desire to promote
the best interest of national defense."
The brass hats won. Coolidge followed his Secretary's
advice, and Mitchell was demoted to the rank of Colonel.
The Army chiefs then buried him in a minor post in San
Antonio, Texas, but could not prevent their glaring mis-
takes from coming to public attention. Appalling catastro-
phes in the air service began to crowd the headlines. Army
planes crashed to the ground in flames; pilots cracked up
in air races designed to demonstrate our progress in mili-
tary aviation. The climax was reached in September 1925,
when the dirigible Shenandoah was destroyed in a cyclone,
killing Commander Landsdowne and a large number of his
crew.
Down in Texas the gallant Mitchell could no longer
stand by and see his comrades slaughtered by official stu-
pidity. He decided that only a desperate gesture would
awaken the nation to the peril it faced. After a personal
investigation of the Shenandoah disaster, he issued one of
the most damning indictments ever made by a member of
the nation's armed forces.
"These accidents,'* he said, "are the direct result of the
incompetence, criminal negligence, and almost treasonable
administration of the national defense by the Navy and
War Departments. . . . All aviation policies ... are dic-
tated by non-flying officers of the Army or Navy, who
know practically nothing about it. The lives of the air-
men are being used merely as pawns in their hands.'* These
nonflying bureaucratic superiors, he added, "either distort
[112 FANTASTIC INTERIM
facts or openly tell falsehoods about aviation to the peo-
ple and to Congress/'
To bolster these accusations with facts, Mitchell pointed
out that the Sheriandoah, because of structural strains suf-
fered in an earlier accident, deterioration of parts, and
other technical faults, was not prepared to undertake a
trip like the one ordered. The men, moreover, were not
provided with parachutes, their only means of escape in
emergencies. In addition, there was no weather informa-
tion service adequate for air navigation. The weather re-
ports were excellent for "onions and cabbages," but not
for airplanes. At the peak of the cyclone season the voy-
age had been ordered by the Navy, merely to offset ad-
verse publicity and because some county fairs in Mid-
western states wanted to see what a dirigible looked like.
Gold-braid rebuttals came from Admiral Moifett. "The
way to regard these charges," said Moffett, "is that their
author is of unsound mind and is suffering from delusions
of grandeur." Yet the official investigation sustained
Mitchell's charges in every detail. Commander Lands-
downe, it was revealed, had even written to the Navy De-
partment advising against this trip, but had been overruled
by Admirals Moffett and Eberle, who thought that the
Commander was simply "worrying about contingencies"
which offered no real basis for concern. They had even
denied Landsdowne's request for a week's delay, which
would have avoided the worst of the Midwestern cyclone
season.
The validity of Mitchell's indictment, however, did not
spare him from Army vengeance.. He had been guilty of
"insubordination," the most heinous offense in the mili-
tary catalogue. Mitchell was summoned to Washington,
and, with the eyes of the entire nation riveted on the trial,
brought before a board of court-martial. No attempt was
made to disprove the aviator's charges. Mitchell sum-
THE BUSINESS OF AMERICA IS BUSINESS 113
moned scores of witnesses, poured out damning evidence
to sustain his case. The board listened blandly as Army
Prosecutor Major A. W. Gullion, now Judge Advocate
of the United States Army, denounced Mitchell as a "self-
advertiser," a "demagogue," a "charlatan," and likened
him to Aaron Burr.
The verdict was foredoomed. The court-martial, which
included General Douglas MacArthur, found Mitchell
guilty and suspended him from the Army for five years
without pay. When the sentence was approved by Presi-
dent Coolidge, Mitchell promptly resigned. Until his
death in 1936 he valiantly kept up his agitation for re-
forms, writing articles and books to rouse the people to
action. He did not live to see his prophecies fulfilled at
Dunkirk, London, Greece, Crete, Java, Singapore, and
Pearl Harbor. But gallant Billy Mitchell received the be-
lated accolade of posterity when Congress passed a bill on
January 13, 1942, restoring his rank of Brigadier, and post-
humously promoting him to the rank of Major General.
A pathological comet miscalled "sport" zoomed with
peculiar intensity across the Coolidge sky. Play, as such,
was unpopular far too simple, cheap, and health-giving.
But wherever it was possible for business to merge with
athletics, whether in the sale of expensive equipment or
the staging of mammoth spectacles, there did sport cele-
brate its noblest triumphs.
Physically strait-jacketed by the cramped life of cities,
and threatened by muscular atrophy from lolling in mo-
torcars, increasing numbers of American males took up
golf. Bobby Jones's victory in the British National Open
in 1926 gave added impetus to this ancient game, and be-
cause golf required expensive equipment, manufacturers
of sporting goods pushed it mightily. Week-end throngs
on tee and fairway swung clubs ranging in price from $5
114 FANTASTIC INTERIM
to $15, at balls costing approximately 75 cents apiece. The
dividends in health were for the most part salutary, though
apt to be offset by the excesses of the nineteenth hole.
Tennis also took a bounce forward, as Big Bill Tilden
demonstrated his invincibility against all comers; here
again the equipment-makers cashed in with the sale of
10,000,000 tennis balls in the year 1926.
Meanwhile the majority of Americans were degenerat-
ing into the role of spectators. A bored and shallow peo-
ple needed gladiatorial shows and got them. Baseball fans
to the number of 20,000,000 munched peanuts in major
and minor league ball parks during the year 1927. The
home-run rivalry of Babe Ruth and Lou Gehrig, the bril-
liant fielding of George Sisler, and the pitching wizardry
of Dazzy Vance brought $50,000,000 clicking through the
turnstiles. College football teams played to packed sta-
diums, newly built at the cost of untold millions. Suc-
cessful football coachesthe canonized Knute Rockne, the
veterans Alonzo Stagg, Tad Jones, and Percy Haughton
drew higher salaries than university presidents. To main-
tain their academic prestige, colleges felt obliged to send
teams barnstorming cross-country, studying math and
English between jumps, or to develop star halfbacks who
could electrify the massed spectators with brilliant broken-
field running and dazzling off -tackle thrusts. Caldwell of
Yale, Pfann of Cornell, Koppisch of Columbia, became na-
tional figures perhaps deservedly so. To watch these
gifted youths run back a punt was probably the purest
form of excitement the ordinary citizen could enjoy.
Brightest of the stars was Red Grange, the Galloping
Ghost of Illinois, the all-time Ail-American halfback, a
loose-limbed human projectile who could outsprint the
fastest defensive back and sidestep the grimmest tackier.
At the conclusion of the Illinois-Pennsylvania game in
1925, during which even hardened sports writers fainted
THE BUSINESS OF AMERICA IS BUSINESS 115
with excitement, Grange signed with the Chicago Bears
for a minimum of $12,000 per game and university edu-
cation had a new excuse for being. Henry Adams might
have thought it passing strange, but the enshrined fact was
that the Wheaton Iceman outrivaled both the Virgin and
the Dynamo as a cultural force in the United States.
Other sports paled, however, beside the atavistic red
of the prize ring. Not that the fights of the 2o's could com-
pare either in length or in ferocity with the classic ring
battles of history; indeed, the i5-round affairs between
Dempsey and Tunney were effeminate toffy pulls com-
pared with the battles of John L. Sullivan and Jake Kil-
rain. In that earlier day, pugilism was disreputable, even
illegal; prize fights took place on barges anchored offshore,
or in some remote barn where a few hundred members
of the "fancy" watched their favorite slug his rival into
progressive unconsciousness for 60 or 70 rounds, the win-
ner taking a purse of $250. Now all this was changed.
The showmanship of Tex Rickard, the abundance of cash,
and the insatiable lust for exhibitions transformed the prize
fight of the 2o's into gaudy triumphs of ballyhoo and
profit. Rickard brought the top hat to the ringside. To his
fights came governors of states, mayors of great cities,
social and literary notables, including more than a sprink-
ling of social-column females. Rickard introduced the
quaint custom of calling everything within 200 yards a
"ringside seat" and charged upward of $50 for the dubi-
ous pleasure of watching the fight through field glasses.
In September 1926, 130,000 enthusiasts paid $2,000,000 to
watch Gene Tunney defeat Jack Dempsey at Philadel-
phia. A year later, when Tunney repeated the perform-
ance in Chicago, the gate went up to $2,600,000. Prelim-
inary promotion for these fights was terrific. Newspapers
built up the story for weeks; people talked of nothing
else but Dempsey's crouch and Tunney's "defensive"
Il6 FANTASTIC INTERIM
strength. On the night of the Chicago fight 40,000,000 lis-
teners tuned in on the radio, and the N&w York Times
devoted a three-streamer headline to the story on the fol-
lowing morning. Ironically, neither of the fights was par-
ticularly murderous; no one was knocked out; no one got
seriously hurt. At the end of the Chicago battle half the
spectators did not know who had won the decision. Yet
it was called the "battle of the century" and as such served
the undoubted purpose of draining off some of the fierce
restlessness that was accumulating in the American psyche.
A morbid interest in murder trials, and a feverish appe-
tite for news and pictures describing the lurid minutiae of
crimes, took possession of the people. International af-
fairs, disarmament conferences, even a World Series, rated
low in the public interest when compared with a "good
murder trial," If a really first-class murder could not be
dug up for ghoulish consumption, the press contrived to
take a second-rate article and work it up into a combina-
tion of Madame X, Krafft-Ebing and Tyburn Hill. Given
a "natural" like the Hall-Mills case which involved a
clergyman and a choir singer in a midnight assignation,
a jealous wife and her eccentric brother and the press
really went to town. Two hundred reporters and fifty
photographers covered the trial; a gigantic electric switch-
'board containing 180 outgoing wires was installed in the
basement of the courtroom so that the reporters could
sluice play-by-play developments directly to their city
rooms. The town of Somerville, New Jersey, where the
court sat, resembled a county fair; patent-medicine stands,
tent shows, shell games, were set up for the delectation of
the army of tourists who prowled about the landscape,
retracing the steps of the murdered lovers down DeRus-
sey's Lane. The country avidly gobbled the garbage; in
eighteen days 12,000,000 words were shoveled from the
courtroom into the trough of the newspapers. Celebri-
THE BUSINESS OF AMERICA IS BUSINESS 117
ties reported special aspects of the trial: Will Durant, Billy
Sunday, Dorothy Dix, D. W. Griffith, and those sisters
under the skin, Peggy Joyce and Aimee Semple Mac-
Pherson, all contributed to the tumult Millions of readers
argued whether Willie Stevens was sane enough to know
a hawk from a handsaw, and whether the "Pig Woman"
really saw what she said she saw. Meanwhile, Congress
rammed through unnoticed the biggest pork-barrel bill in
years; the Weimar Republic reeled through the aftermath
of inflation, and Mussolini equipped Italian school chil-
dren with gas masks. No one noticed. Wits befuddled,
eyes blinded by the whirling headlines WILLIE TAKES
STAND, PIG WOMAN ENTERS COURT ON STRETCHER, the
American people reverted to the auto-da-fe and enjoyed
the orgiastic thrill of reveling in other people's crimes.
Though newspaper editors agreed that nothing in-
creased circulation like a good murder trial, they did not
scorn the humbler channels into which "human interest"
was wont to run. To one scanning the daily journals of
the period, it appears that the newspapers, paced by the
new tabloids, were conducted by a species of carrion-
loving editors, abetted by a swarm of rodent reporters who
preferred news with a bad smell Any story remotely
scented with perversion was eagerly tracked down and
dragged into print. Editors justified the vast coverage
given to Leopold and Loeb, two psychopathic Chicago
youths who murdered a little boy, then demanded a kid-
nap ransom from his parents, by saying that they were
merely serving up "what the public wants." The same
excuse was advanced in defense of the fantastic spread
given to the Gray-Snyder case, a morbid variation of the
illicit triangle, in which the husband was ineptly murdered
by means of sash weights and picture wire. The low point
in American journalism was reached when a reporter for
the Daily Ne*w$, assigned as an official witness at the elec-
Il8 FANTASTIC INTERIM
trocution of the murderess Ruth Snyder, fastened a min-
iature camera to his ankle and was able to get a picture
of Ruth Snyder strapped to the electric chair at the mo-
ment of her death agony. Although official reaction was
stern, popular sentiment regarded the News picture as a
feat of journalistic ingenuity.
Editors realized then, as now, that the public gladly
laid down its copper coins for stories dealing with the
exploits, misadventures, and vicissitudes of man's best
friend, the dog. In 1925 a rash of dog stories crowded
world news off the front page. Felix, the Dalmatian mas-
cot of the Chicago Fire Department, was given a $400
funeral. Dimples, a doughty Peke, saved his mistress from
the charges of a New Jersey bull. Government experts
in the Department of the Interior discovered a dog on
which fleas could not live, and their findings were widely
publicized by a dog-hungry press. But the greatest dog
story of the generation was the saga of Balto, the half-
breed Makmute who carried the diphtheria serum to
Nome. In this newspaper epic, dog and science were the
heroes, death and the elements, the villains. Editors slipped
free of restraining galluses and let themselves go. Hearken
to the Literary Digest:
Through the screaming blast of a 50 below zero, 8o-mile-
an-hour blizzard, in blinding clouds of scourging snow,,
through waist-deep drifts over mountainous crags of pack-ice,
heaving in the deep ground-swell of Bering Sea, Balto fought
his way from the railhead, 655 miles in five-and-a-half days
of icy hell. In the bottom of a lurching, straining dogsled,
he relayed a little 2-pound package containing 300,000 units
of serum for Nome.
Balto got through all right, but a cynical note crept in
toward the end when the New York Evening Graphic
suggested that the whole thing was a cleverly engineered
piece of publicity for the sale of antitoxin. Said the
THE BUSINESS OF AMERICA IS BUSINESS 119
Graphic: "The distance which might have been bridged
in a short time by airplane was covered by dog and
sledges. This spectacular and attention-calling method of
transportation was insisted upon, even though it took 20
times longer than air travel. . . . Besides, the serum
froze."
By the time the defenders of Balto had trained their
guns on the Graphic, the whole affair was forgotten in the
seventeen-day hullabaloo about Floyd Collins. Collins
owned a cave in Kentucky, and made a few dollars pilot-
ing tourists through its subterranean galleries. On January
30, 1925, a falling rock pinned him by the foot in a nar-
row corridor, 160 feet below the surface. Within three
days the story was hailed by the papers as the "greatest
news story of this or any age"; a hundred and fifty crack
reporters were soon scurrying in and out of the tunnel, ac-
quainting the world with Collins's every remark, and
adding photographs; sending out thousands of words
about the rescue efforts being carried on simultaneously
(and controversially) by several parties, including the
State of Kentucky and the Louisville & Nashville Rail-
road. While the wrangling went forward, the State Mili-
tia was called out to preserve order. Thousands of tourists
from neighboring states jammed the roads leading to the
Collins cave; hot-dog stands, pitchmen, souvenir-sellers,
imparted a circus-day atmosphere. Leading geologists gave
interviews on the nature of the rock formation; anthro-
pologists testified that Collins would live because he had
a "phlegmatic disposition." The local Baptist choir chanted
Collins's favorite hymns at the mouth of the cave. Rival
caves spread rumors that the whole business was a hoax.
Shortly before, sixty soft-coal miners had died in an Ala-
bama mine explosion and received scant attention. The
people wanted Collins. After seventeen days of undigni-
fied pushing and hauling, during which time the obscure
120 FANTASTIC INTERIM
Collins was compared to Prometheus, elevated to the posi-
tion of a national hero, and referred to as "a distinguished
explorer," he died, still pinned by the rock. Gurgled the
Louisville Post:
The battle of Sand Cave is over. Man has hoisted the white
pennant of surrender to Mother Nature, who will clasp for-
ever to her breast the battered corpse of Floyd Collins, the
intrepid explorer, who paid the price of his daring with his
life and for whom humanity waged a losing struggle for 18
agonizing days and nights against insurmountable obstacles
and inexorable forces. Floyd Collins, stark in his rock-ribbed
vault, were he able to speak, would say: "I am content."
In 1925 this compound of gush, sensationalism, pathol-
ogy, and distorted evaluation was called news.
Fresh provender was thrown into the public maw by
some Fundamentalist antics in Dayton, Tennessee. The so-
called monkey trial furnished the spectacle of two mighty
antagonists, Clarence Darrow and William Jennings
Bryan, debating theology in their shirt sleeves under a
broiling sun. The trial pivoted on a Tennessee statute
which decreed it unlawful "to teach any theory that de-
nies the story of Divine creation of man as taught by the
Bible, and to teach instead that man has descended from
a lower order of animals." The American Civil Liberties
Union, learning of this quaint law, inveigled John Thomas
Scopes, teacher of science in the Dayton High School, to
bounce a bladder off the costard of Fundamentalism. By
agreement, Scopes read the following passage to his pu-
pils: "Animal forms may be arranged so as to begin with
simple one-celled form and culminate with a group which
includes man himself." This innocent little firefly was
enough to set off the TNT of Tennessee bigotry, and
Scopes was prosecuted for expounding doctrine dangerous
to Holy Writ.
Clarence Darrow was engaged to defend Scopes; Wil-
THE BUSINESS OF AMERICA IS BUSINESS 121
Ham Jennings Bryan was hired by the World's Christian
Fundamentalist Association as special counsel for the State
of Tennessee. Bryan was primed to exterminate Darrow
and all his works, while Darrow was on hand "for the
purpose of preventing bigots and ignoramuses from con-
trolling the education of the United States."
The trial swiftly ballooned into a medicine show, car-
ried on in a blast-furnace atmosphere of prejudice and
midsummer heat. Scopes was forgotten as the two cham-
pions grappled in unedifying debate. (To Darrow's ques-
tion "Do you believe that Joshua commanded the sun to
stand still?" Bryan answered: "I do." Applause from the
pious yokels.) After a high carnival of Bible Belt Funda-
mentalism on Bryan's part, and some intellectual clownery
on Darrow's, the infidel Scopes was fined $100 and the
Bible was safe in Tennessee.
Bryan never lived to enjoy the fruits of his victory. Al-
though a raging teetotaler, he had a weakness for victuals;
it was his habit at midday to engorge half a dozen pork
chops and mountains of mashed potatoes smothered in
onions and gravy. Gourmandizing on these delicacies two
days after the trial (while the temperature registered 1 10
F.), he died of heart failure, superinduced no doubt by
his efforts in defense of the Pentateuch.
Two events now titillated the sexual ganglia of the
American nervous system: the death of Rudolph Valen-
tino and the disappearance of Aimee Semple MacPherson.
Rudolpho Alfonzo Raffaele Pierre Filibert Guglielmi di
Valentino d'Antonguolla known to millions of motion
picture addicts simply as the Sheik was a former dish-
washing greaseball with sideburns and a torrid boudoir
technique. In a real-life close-up, he stood almost 5 feet,
6 inches, and would have tipped any drugstore scale at
125 pounds. But oh. the screen he became a combination
of Don Juan, Mazeppa, Lord Byron, and Casanova in
122 FANTASTIC INTERIM
short, the Sheik. His favorite scene was played in a tent
pitched somewhere on the burning sands south of the
Mediterranean; against this backdrop he would invari-
ably kidnap, beguile, and otherwise seduce a blonde Nor-
dic female in riding trousers, frequently Agnes Ayres.
This went on for a number of years, and American audi-
ences loved it. To millions of women Rudolph Valentino
became a symbol of everything that was lacking in their
Presbyterian, bookkeeping, golf-playing husbands and
lovers. When he kissed the victim of his Arabian passion,
10,000,000 American sisters swooned in unison.
Then suddenly the Sheik developed stomach ulcers and
died. Dr. Charles W. Eliot, long-time President of Har-
vard, died the same day. Not much attention was paid to
Dr. Eliot's demise, but there were great rendings of soul
and much dampening of handkerchiefs when news of Val-
entino's death reached the headlines. Crowds of women
gathered around Campbell's Funeral Parlor in New York
City, where he lay in state; the lines of fans extended
eleven blocks, stopped all traffic, and brought out the
mounted police at a gallop. Women fainted or threw
themselves under the hearse as Valentino's funeral cortege
wound its way to the cemetery. It all seemed quite spon-
taneous. But gradually the disillusioning news leaked out
that the whole affair (not including Valentino's death)
had been engineered by Campbell's press agent, one
Klempfuss by name, whose previous exploits allegedly in-
cluded scrubbing the Statue of Liberty with Bon Ami. This
enterprising fellow, never one to gag at indelicacy, provided
the newspapers with photos, distributed in advance, of
the chamber in which the body of the dead hero lay in
state. Klempfuss arranged for pictures of the funeral
procession, posed with such fond verisimilitude that one
paper published photos of the interment before it actually
occurred. Death's sting was pulled, and the grave robbed
THE BUSINESS OF AMERICA IS BUSINESS 123
of its victory by the hard-working publicity boys of 1926.
But to some purpose. Moving-picture theaters were
stormed by the grieving faithful for at least six months
whenever a Valentino film was scheduled, and these post-
humous tributes turned Valentino's debt-riddled estate
into a neat surplus of $600,000.
Now occurred the mysterious disappearance of Sister
Ainiee Semple MacPherson, the "four-square" evangel
from the West coast. To bring her "message" to a wait-
ing world, Sister Aimee had built herself a stadiumlike
temple in Los Angeles, and by astute theatricism had es-
tablished one of the most prosperous cyclorainas in the
land. Her following was huge and ardent; when she
preached on Sunday mornings, the streets around her tem-
ple were jammed with automobiles "packed like dominoes
in a box." Tens of thousands of would-be communicants
crowded in to catch a glimpse of the well-developed fig-
ure in long white raiment (Sister Aimee had notoriously
thick ankles) and to hear the message of love and hope
delivered ecstatically from the altar via the microphone.
When she disappeared into the Pacific Ocean one May
afternoon in 1926 and was unheard of for several weeks,
the nation boiled with anxiety. She turned up finally with
a lurid tale of being kidnapped, bound, and tortured in
the desert. There was a sex angle, of course, which made
the story a natural for millions of prurient readers. When
the show was over, the theatrical magazine Variety dryly
commented: "Plenty indications of smart showmanship in
the whole affair." Undaunted, Sister Aimee went on to
new heights of evangelism and more gratifying weekly
collections.
Into the midst of this gabbling, like a hawk scattering
a flock of geese, flashed Charles Lindbergh.
The facts of Lindbergh's flight need scant retelling. On
124 FANTASTIC INTERIM
the morning of May 20, 1927, a tall, handsome young
man in a closed cockpit monoplane, called The Spirit of
St. Louis, took off from Roosevelt Field in a drizzle. He
headed in a general east by northeast course toward New-
foundland, then straightened out on a long nonstop flight
across the Atlantic Ocean, at a speed of 100 miles an hour.
In the tanks of his plane were 45 1 gallons of gasoline, and
in the cockpit beside him were some sandwiches and a
thermos bottle of coffee. He flew high and he flew low,
sometimes at an altitude of 10,000 feet and at other times
merely skimming the tops of the gray waves in his at-
tempts to dodge the ice-forming sleet that menaced the
wings of his plane. After thirty-four hours of flight, he
sighted the flares of Le Bourget, the flying-field in Paris,
made a graceful landing, and thus became the first human
being to make a nonstop flight between New York and
Paris. It was an achievement requiring the utmost skill as
navigator and pilot, considerable daring, a perfect engine,
and some luck. But at the time, and for many years after-
wards, Charles Lindbergh was regarded by the American
people as a veritable demigod.
Ferried back to the United States aboard a battle
cruiser, Lindbergh was greeted by a hysterical outburst
that set new records for volume, flatulence, and duration.
During his triumphal progress up Broadway 1,800 tons
of ticker tape and Bronx telephone books were showered
on him by a populace accustomed to measuring its idol-
atry in terms of wastepaper. It was paper, paper all the
way. Ten trucks of congratulatory telegrams followed the
hero's car. Memorials, scrolls, commissions, contracts, were
tendered him; he was deluged with papery tokens destined
all too soon to curl into yellowing sere. The whole per-
formance was excessive, pathologic, barbarous an obscene
ritual in which Charles Lindbergh played the role of hero-
THE BUSINESS OF AMERICA IS BUSINESS 125
victim, at first with modesty, later with resentment and
snarling pain*
Only Sophocles could portray the tragedy of Lind-
bergh's career and anatomize the steps by which he fell
from godlike heights to unimagined depths of popular dis-
esteem. For this descent, Lindbergh is in part to blame,
but it was clear from the beginning that the people who
welcomed him with morbid effusion would turn on him
with ferocious attack. Lindbergh's history suggests an an-
alogy to the unfortunate youth annually chosen by the
Aztecs to be their Fair God. For a year, the elected deity
received the adulations and gifts of the race. He was loaded
with gold and honors; flowers instead of ticker tape were
strewn in his path. But when the term expired, he was
stretched on an altar stone and disemboweled with an ob-
sidian knife. Charles Lindbergh was made to die a figura-
tive death in the kidnapping and destruction of his son,
an event which demonstrated that the vulgarity, cruelty,
and curiosity of the American people were as ruthless
as the stone knives of the Aztecs. Lindbergh's subsequent
wanderings, his rancor and symbolic blindness, suggest
the punishments meted out to classic figures of tragedy-
Oedipus and Lear. The final flick of irony lies in the fact
that Lindbergh, though competent and intrepid, was never
of true heroic stature. He was an adventurous boy com-
peting for $25,000 in prize money, who was transformed
overnight into a colossus. The all too human material of
which he was constructed simply could not stand the
strain laid upon it by an idol-making people.
A strand of rue was woven into the crown of bay and
thorns that the American people pressed onto Lindbergh's
head. He was not the first to span the Atlantic, but his
exploit daringly dramatized the fact that Europe was
barely a day's journey from our shores. At the time, it
was declared that distance had been annihilated; dimly
126 FANTASTIC INTERIM
perceived also was the fact that the security afforded by
the Atlantic Ocean had been shattered. Did the shrill
chorus that greeted Lindbergh contain a profound bass
of fear? If a slender youth in a frail plane could bridge
the seas, might not vast enemy armadas, at some future
date, imperil our isolation? These thoughts sang too deep
beneath the surface to be consciously heard. But the omi-
nous vibrations were there, and the people drowned them
out with hysterical throatings.
Lindbergh's nonstop flight was a signal for other break-
neck scrambles across the Atlantic. Clarence Chamberlin
followed Lindbergh in a few days, landing in Germany
with his publicity-seeking passenger, Charles Levine. Ad-
miral Byrd, heavy with scientific instruments, struck out
for the French coast and almost made it. Actually, Byrd
and his men waded ashore. Brock and Schlee crossed the
Atlantic and continued on a series of hops to Japan. Scores
of nameless and forgotten thrill-seekers attempted the
grand arc; unequipped and untrained for the hazards of
the journey, they fell into the ocean and were never heard
of thereafter. Even commercial companies began to make
tentative hops, first with mail, then with passengers.
Flyers who soloed across the ocean were no longer front-
page news. The Atlantic was just another Channel.
4. Crime Did Pay
One summer day in 1923 Johnny Torrio, overlord of
Chicago's vice and booze racket, noticed some machine-
gun bullets rip the plaster off the wall of his gambling
club, The Four Deuces, where he was having a quiet con-
ference with his lieutenants. Six of the bullets gouged fur-
rows in the table at which Torrio sat, then entered Tor-
rio's person. The air was filled with metal that day, and
Torrio thought it might be a good idea to leave town. He
THE BUSINESS OF AMERICA IS BUSINESS I2J
fled the country, abandoning a vast empire of crime to
his one-time friend and bodyguard Al Cap one. During
the next five years Capone did a gross business estimated
at $2,000,000 a week. By 1930 he was the symbol and plu-
perfect model of the big-time racketeer then operating
in every city in the United States. He rode In a seven-
ton, $30,000 armored automobile, preceded by a earful
of armed henchmen and followed by a third car contain-
ing six or seven of his favorite gorillas, who in the course
of duty were obliged to shoot down 300 persons sus-
pected of having designs on Capone's racket-studded
crown.
Capone, greatest of the beer barons, had won his gang-
land spurs long before the Eighteenth Amendment was
jimmied into the Constitution. Born in Brooklyn in 1897,
he had become a power in the famous Five Points Gang
which operated the lucrative gambling and murder-for-
profit rackets in New York prior to the war. In a youth-
ful fracas, Capone's cheek was slashed by a stilettohence
the death's-head nickname, Scarf ace. In 1919 Johnny Tor-
rio, getting his start in the Chicago beer racket, needed a
smart lieutenant; he bethought himself of the bullet-headed
assassin Capone, and invited him to be his front man in
Chicago. Under Capone's skillful direction, the feudings
of the O'Banions, the Gennas, and the Aiellos rivals all-
were effectively silenced by the private army of 700 men
that Capone equipped with sawed-off shotguns and "type-
writers" stolen from state armories. Ostensibly, Capone
ran a secondhand furniture store; in reality, he was cor-
nering personal control of the bootleg and prostitution
rackets of four adjacent states. Johnny Torrio's star was
gradually eclipsed by the red light of Capone's ascend-
ancy. Given the metallic hint to clear out, Torrio ac-
cepted the ultimatum and migrated to the sunnier climes
of his native Italy.
128 FANTASTIC INTERIM
Capone brought a new slant to criminality. He. was a
businessman, as big and smart as any of them. His inter-
locking fiefs of crime beer, booze, and brothels were
sedulously modeled on the interlocking directorates of the
great corporations which controlled the public utilities,
mines, transportation systems, and banks of the United
States. In organizing and co-ordinating his multiple
rackets, pitting subordinates against each other, and kill-
ing off would-be competitors, Capone copied the tactics
of Insull, Mellon, or the Van Sweringens. When faced
with recalcitrance, he used the franker persuasion of the
"ride," the cement block, or the tommy gun, but basically,
he liked to think of himself as an entrepreneur, and was
puzzled at the end when the "Feds" interrupted his capi-
talistic ventures. He maintained two offices; one in Cicero,
a Chicago suburb which he owned as other men own their
hats; another in an expensive two-floor suite in a lake-
front Chicago hotel. The approaches to these administra-
tive hangouts were heavily guarded by platoons of thick-
set, swarthy young men who spoke no English, but con-
veyed their simple thoughts in the Esperanto of steel.
Like other Chicago businessmen, Capone knew the
value of political affiliation. He paid $2,000,000 a year to
various politicians and public officials for the privilege of
carrying on his rackets undisturbed by the law. In dis-
tributing these bribes, Capone was completely nonparti-
san; he supported the "reform" government of Mayor
Dever, and was equally helpful in advancing the political
fortunes of Mayor (Big Bill) Thompson. The New Re-
public said of Capone: "He didn't merely buy the gov-
ernment of Chicago, he <was that government." In the city
of Chicago alone, the scarf aced emperor controlled 10,000
beer joints; the gross receipts from this business were
$50,000,000 in 1927. The proprietors of Illinois taverns
and barrooms bought Capone beer or else. Every pros-
THE BUSINESS OF AMERICA IS BUSINESS 129
titute who walked the streets of Chicago either paid toll
to Capone or got her teeth knocked down her throat. The
horse-race rooms, the gambling dens, and the fast rum
ships speeding from the Canadian borderall paid tithes
to the gray-eyed criminal with the authentic "holding-
company" touch.
Not that the tithepayers were docile, or even cheerful,
about these exactions. From time to time armed upstarts
would spray lead slugs in the general direction of their
emperor's shoulder blades. Once a West Side gang, slow
to acknowledge Al's supremacy, drove up to the Haw-
thorne Hotel in Cicero and laid down an artillery barrage
that wrecked Capone's headquarters. Scarface outwitted
the assassins by falling to the floor and sticking his head
into a brass spittoon. Rising, he vowed vengeance, and
executed it in the now famous St. Valentine's Day massa-
cre of February 14, 1929.
On that day sk members of the rival Bugs Moran Gang
were holding council in a garage on North Clark Street
when a large touring car of the type used by police squads
in Chicago drove up before the garage and halted. Five
men emerged, garbed in police uniform, and carrying
weapons resembling riot guns. The "police squad" en-
tered the garage, lined up the sk members of the Moran
Gang. A fusillade of shots spat from the riot guns and
sk bullet-riddled bodies crumpled to the floor of the
garage. The Moran Gang was exterminated, and Capone
was the undisputed King of Chicago.
Civic virtue poured great quantities of ashes on its
bowed head during the next few years. The crowning
ignominy took place when Frank J. Loesch, president of
the Chicago Crime Commission, was obliged to beg an
appointment with Capone in order to present "a humble
petition that the people of Chicago be permitted to select
their own State's Attorney." Says Mr. Loesch: "It did
130 FANTASTIC INTERIM
not take me long to discover that Al Capone ran the city.
His hand reached into every department of the city and
county government." Loesch entered into an agreement
with Capone whereby the latter promised to send "70
squad cars full of cops" to keep order on the West Side
on Election Day. Scarface kept his promise, and in return
received a blanket immunity from the authorities whose
first duty should have been to hang Capone and every one
of his associates.
Why did the citizens of Chicago submit to the incred-
ible lawlessness of Capone for so many years? Why were
judges, police commissioners, and civic-reform move-
ments unable to lay this criminal by the heels on charges
of murder, bribery, and conspiracy to obstruct the law?
Any attempt to answer these questions discloses the lag
that was paralyzing America's proud tradition of local self-
government.
Our town-hall concept of democracy, admirable in a
small New England community, had failed miserably
when applied to cities with populations in the millions.
Municipal government under such conditions became un-
wieldy, and mortally diseased by graft, bribery, and cor-
ruption. All but the most conscientious citizens shirked
the performance of their civic duties; yet even when they
turned out in full strength, they were outnumbered by
masses of foreign-born and non-English-speaking voters.
The era produced vicious and predatory machines, es-
pecially in cities with large foreign-born populations.
These machines were supported, strange as it may seem,
by factions at the top and the bottom of the social system
by real estate, traction, and public-utility interests above,
and by the gangster element below. Financial and business
interests wishing to escape public regulation, and win spe-
cial or illegal reductions in taxes, contributed heavily to
the campaign funds of "friendly" candidates. At the other
THE BUSINESS OF AMERICA IS BUSINESS 131
end of the scale, racketeers and mobsters, desiring only
to be left alone in their pursuits of vice and crime, proved
their loyalty and indispensability to the political machine
by paying protection money, stuffing ballot boxes, and
intimidating independent voters. It was a scandalous com-
bination against the decent, law-abiding, but unorganized
citizen, who footed the bill by paying inordinately high
taxes, excessive rents, and racket-inflated prices for meat,
milk, vegetables, and laundry.
The city of Chicago during the rule of Big Bill Thomp-
son was a cesspool of municipal rottenness. The city had
a budget of over $1,000,000,000, yet in Thompson's sec-
ond term Chicago went bankrupt; teachers, firemen, and
policemen received I.O.U.'s instead of cash. Where had
the taxpayer's money gone? Into grafting contracts for
paving and public construction; into padded payrolls (16
out of every 100 names on the Chicago pay rolls were
either bogus or fraudulent); into huge tax rebates, re-
funded to public-utility companies in exchange for their
campaign contributions. An estimated $125,000,000 was
torn away in pure graft. Yet at the height of this munici-
pal marauding, when an outraged reform element was
proving Thompson to be one of the most dangerous and
inefficient men ever to hold public office in the United
States, Big Bill was re-elected for a third term. Thomp-
son's campaign arguments were a sad commentary on the
intelligence of the American electorate. When charged
with fostering dishonesty, Big Bill boomed: "I am for
America first." When accused of wasting the people's
money, he shouted: "If King George doesn't keep his
nose out of America's affairs, I'll bust him on the snoot!"
At these defiant but puerile sallies, the Chicago voters
largely of Irish and German extraction roared lusty ap-
proval. While the money held out, no one could beat
Big Bill.
132 FANTASTIC INTERIM
New York lagged only a trifle behind Chicago in its
civic squanderings. During the sartorially brilliant terms
of Jimmy Walker, the Tammany Tiger waxed opulent
and careless. Organized vice and gambling flourished
openly under police protection. Notorious contracting
scandals put hundreds of thousands of dollars into the
pockets of city officials. The sheriff of New York
County banked $360,000 in seven years, though his sal-
ary and official perquisites amounted to only $90,000; the
sheriff of Kings County deposited $525,000 over a similar
period. Although tax rates were sky-high and collections
good, New York faced bankruptcy during the latter part
of the Walker regime, and was saved only by a banker's
committee which took over the fiscal management of the
city. Later, when the Seabury investigation uncovered
gross irregularities, Mayor Walker suddenly resigned-
wisecracks, striped pants, and all leaving a^ trail of broken
hearts and personal debts behind him. \
Jersey City, Philadelphia, New Orleans/ and Atlantic
Cityto mention only the most flagrant examples were
stench holes of racketeering, vice, and corruption. The
unholy alliance between politician and gangster was ce-
mented during these years by a mutual exchange of serv-
ices and hodfuls of baksheesh. Criminals in the liquor,
food, trucking, laundry, and cleaning rackets "took care"
of the cop on the beat, the captain of the precinct, the
political ward boss, and the various higher-ups always
including the Federal Prohibition agents. The cost of this
protection was tacked onto the price paid by the con-
sumer, who was powerless to take effective action against
the tightly organized phalanx of gangster, police, and pol-
itician.
The unholy alliance between boss-ruled cities and the
criminal underworld has always been a feature of Amer-
ican life. But during Prohibition the alliance became un-
THE BUSINESS OF AMERICA IS BUSINESS 133
breakable as politicians and bootleggers contended for
their share of the illicit profits to be made by gratifying
the thirst that possessed the people of the United States.
The prizes ran into hundreds of millions of dollars; the
people wanted alcohol and were in no mood to suppress
individuals or local authorities who provided it. Reform-
ers might appeal to civic pride, moralists deplore the
orgies of drunkenness and crime. But they were a scant
minority. The plain fact seemed to be that the American
citizen was thirsty, and wasn't going to gag if he swal-
lowed a few criminal flies with his beer.
By 1928 the grim Sahara trek of Prohibition had bogged
down. Everyone drank. Feverishly, and without discern-
ment of quality, alcohol was guzzled by boys and girls
at high-school dances, by young society matrons whose
dainty insteps had never previously polished a brass rail.
The hip flask appeared at football games, at fraternal con-
ventions, and was nipped at appreciatively during the sac-
rosanct hours of business. Top-flight executives kept a
bottle of "stuff just off the boat" in the drawers of their
desks; housewives took up home brewing as part of the
domestic economy; wine bricks were melted in stone
crocks and inspected semiweekly by a visiting "service-
man." An atrocious mixture of raw alcohol and juniper
juice was called gin. Druggists, given the wink, would
serve a "blueberry soda" to the thirsty customer, or sup-
ply him with a "prescription" bought in batches from
local doctors. Drunkenness was commoner than in the
days of the despised saloon; the alcoholic wards of the
metropolitan hospitals were filled with victims whose in-
testines were punctured or nervous system shattered by
poisonous or imperfectly distilled alcohol.
Anyone who wanted a drink and could afford to pay
the tariff had no difficulty in getting "stuff." The sources
of supply were various. Scottish and Dutch distillers con-
134 FANTASTIC INTERIM
tinued to ship whisky by the boatload. From Canada,
Cuba, South America, and Barbados, ocean-going vessels
bearing cases of rum, brandy, and other distilled liquors
approached the ports of the United States and were met by
fleets of small boats anchored outside the 1 2-mile limit. The
precious freight was transferred to "rumrunners," who then
proceeded to elude the Coast Guard cutters and land their
merchandise in coves and inlets along the eastern shores of
the United States. Here it was loaded into huge trucks and
transported to distant cities, where it would be "retailed" at
premium prices. Scotch, cut with grain alcohol and peddled
by local bootleggers, cost the consumer $10 a "fifth." Rye
set him back $7 or $8 a quart. But money was plentiful, and
the customer rarely complained on the score of price.
Huge "alky-cooking" plants using corn sugar as the
basic material distilled 100,000,000 gallons of alcohol
yearly; colored, watered down, and poured into artistic-
ally labeled bottles, gallonage was doubled. Industrial al-
cohol, legally manufactured under government permit,
was copiously diverted into illegal channels; approxi-
mately 15,000,000 gallons of whisky and gin were de-
rived from this source. Still another dodge one that re-
quired big-time bribery of Andrew Mellon's Treasury
agents was the unlawful withdrawal of bonded whisky
from government warehouses. By trafficking in with-
drawal permits, and winking at the diverting of industrial
alcohol, Prohibition agents managed to eke out a fairly
decent livelihood, and, incidentally, doubled the cost of
potable liquor.
So much for gin, rum, and whisky. Meanwhile, the
more plebeian beer was flowing in torrents from breweries
in Chicago, Brooklyn, St. Louis, Boston, and Philadelphia.
Because beer had to be transported in barrels, vast fleets of
trucks loaded with paunchy kegs roared over the high-
ways of the nation. Did Prohibition agents see them? Ap-
THE BUSINESS OF AMERICA IS BUSINESS 135
patently not. Blindfolded by generous wads of "folding
money," they saw no evil, smelled none of the sour fumes
arising from tall brewery chimneys. But though Prohibi-
tion agents failed to notice the rolling trucks, hijackers
were more attentive. The art of holding up a beer truck
and murdering the driver, and the science of upsetting
rival trucks in mid-career, were brought to exquisite peaks
of perfection. Blood, beer, and money sloshed across the
continent in a foamy tide, in order that blind tigers and
speakeasies might serve their customers.
No census of speakeasies was ever made, but from the
Wickershatn report and semiofficial sources, their number
can be estimated at a quarter of a million. They ranged in
type from sordid dives, furnished only with a beer pump,
a few brass spittoons, and a battered player piano, to the
lavishly appointed night clubs of New York City, in
which the larking revelers called for champagne at $50
a bottle. These night clubs gave the age its characteristic
tempo a dizzy, bacchanalian beat, never to be forgotten
by anyone who ever felt its throb. Exorbitant prices for
food, liquor, and entertainment were demanded by night-
club proprietors who made a fetish of exclusiveness and
pandered to the snobbery of the customers. Membership
cards to the Mayf air Yacht Club, the Bath Club, the Em-
bassy, the Trocadero, Giro's, and the Lido were among
the most coveted possessions of the era. These cards per-
mitted one to pass the dinner-jacketed Cerberus at a peep-
hole cut in the front door, and to enter premises of ele-
gant decor, where a fast floor show, a complete gambling
layout, and an iridescent bar dazzled the Good-Time
Charlies and their complaisant doxies. To spend less than
$100 marked the customer as a piker; a gentleman and
his party could easily drop $1,000 in pursuit of an eve-
ning's pleasure. Glamor, sex excitement, and a dangerous
sense of dancing on the rim of the abyss were the magnets
136 FANTASTIC INTERIM
that attracted and held the patrons of these establishments.
Somewhat below this summit of splashiness, and vastly
beneath it in price, were hundreds of intimate, well-man-
aged "speaks," in which a superior cuisine and good-qual-
ity liquor were purveyed for the judicious diner-out. The
memory of these little bistros and attentive headwaiters
evokes a nostalgic warmth in the hearts of a generation
that patronized them. Goodly profits were made by the
owner, and few headaches were suffered by the initiated
clientele that drank his good but illicit liquor. Occasion-
ally, an overzealous or underbribed Prohibition agent
would raid the premises, smash the bar with an ax. But
next week the proprietor would open up again at a new
address, pay a little more for "protection," and summon
the faithful to his standard once again. As a sad commen-
tary on the ingratitude of human beings, the walls of these
places were plastered with checks that had "bounced,"
In that dear departed era there was no shortage of rubber.
On the lowest level stood the clip joints, in which the
customer was encouraged by amorous hostesses to drink
deep or perchance imbibe knockout drops. He was then
rolled for his cash and personal jewelry and deposited
none too gently on the sidewalk. A variation of the clip-
joint technique was to make the befuddled victim sign a
whole series of checks; every time he made out a check,
the clip-joint owner would say that the signature was il-
legible, and pretend to tear up the check. At the end of
the evening, the victim would have handed over i^everal
checks, all of which were promptly cashed early next
morning before he awakened from his alcoholic torpor.
The clip joints got away with murder, because the victim,
fearful of publicity, hesitated to report the affair to the
police.
The "drys," aghast at the carnage and license, attempted
to bully Congress into appropriating larger sums for "en-
THE BUSINESS OF AMERICA IS BUSINESS 137
forcement." Additional millions were allocated, but to no
avail* Still the rumrunning launches delivered their con-
traband in lonely coves; still the beer barons exacted their
tribute. The Bill of Rights was suspended while Prohibi-
tion officers searched homes and automobiles without
warrants. The appointment of enforcement agents became
the richest source of political patronage; thugs, former
convicts, political retainers, and assorted incompetents
swelled the rolls of Andrew Mellon's Bureau of Enforce-
ment. Honest men, seeing that the task of enforcement
was hopelessly saddled by graft and incompetence, re-
signed. The "noble experiment" was a flop, a farce, a
fiasco, yet no one in public life dared hint that it should
be repealed. American Puritanism had achieved its great-
est miracle in hypocrisy.
5. A House by the Side of the Road
The autumn of 1925 opened on scenes of frenzy in the .
streets of Miami; the whole city, indeed the whole State
of Florida, had become a seething real-estate mart. There
were 37,000,000 acres of land in Florida approximately
two-thirds of it under water and all of it was for sale.
Twenty-five thousand real estate agents brandished blue-
prints and options at a jostling horde of "investors" from
all parts of the Union, as the greatest land rush in history
surged forward over the swamps and marshes of the Or-
ange State. The old land-office days were relived again
not by hardy pioneers staking out solid acreage for slow
development, but by get-rich-quick speculators drawn to
this former Seminole hunting-ground by delirious hopes
of overnight riches.
There was some slight basis for the boom; to wit, the
climate. Florida had sunshine, admittedly worth money to
pallid denizens of the Northeastern states. There was also
138 FANTASTIC INTERIM
promise of a citrus-fruit industry; in recent years Florida
has shipped grapefruit, oranges, and lemons to the Eastern
markets. But after full credit has been entered for these
assets, it is still difficult to explain the semitropical lunacy
that caused practical businessmen in the years 1925-26 to
dive off the Florida springboard with valises full of money.
The excitement centered in Miami, where for four or
five years land values had been coming to a gentle boil
under the persuasive rays of the Florida sun. Business lots
valued at $800 in 1920 sold for $150,000 in 1924. A choice
strip of land in Palm Beach which cost a New York law-
yer $240,000 just after the war was sold for $800,000 in
1923; a year later it was parceled up into lots which were
snapped up by grateful purchasers for $1,500,000. At the
peak of the boom, a seashore lot 15 miles from Miami sold
for $75,000. The minds of men reeled at the possibilities
of quick and juicy profits, and their tottering judgment
was knocked completely flat by the lush rhetoric appear-
ing in magazine advertisements and descriptive prospect-
uses loosed by Florida promoters. The literature of the
period was pure Everglades baroque with stucco compli-
cations. Barron Collier, writing in the Independent, Jan-
uary 1926, let his fancy play as follows:
Florida is indeed the American Riviera. Thousands of beau-
tiful lakes, alive with fish, are within her borders. A beautiful
tropical growth covers her for miles like a gorgeous robe.
Lakes, marvelous plants and flowers complete the picture of
an ideally attractive setting. Add the inducements of her rich,
responsive soil, her wonderful climate, her distinct charm,
and you get a glimpse of the answer to the question: "What's
back of the Florida boom?"
Mr- Collier, incidentally, was a successful advertising man
who owned two entire counties in Florida, and at this
point was trying to convert their "rich, responsive soil"
into ready cash.
THE BUSINESS OF AMERICA IS BUSINESS 139
The largest single operator was George Merrick, who
engaged full pages in the New York papers to describe
the Incorporated City of Coral Gables, subtitled "Amer-
ica's Most Beautiful Suburb." Merrick had the authentic
touch for promotion; realizing that his land was only a
few inches above sea level, he utilized its marine features
to build a modern counterpart of Venice. He dug canals
and caused gondolas to ply through the heart of his palm-
tree paradise. He hired William Jennings Bryan to sit on
a raft in the middle of a fringed lagoon and lecture to
shirt-sleeved multitudes on the miracles yet to be wrought,
and the profits yet to be gleaned from Florida real estate.
On the West Florida coast D. P. Davis, another miracle-
maker, dredged sand out of the bottom of Tampa Bay,
piled it onto a marshy clump of mangrove, making thereby
an artificial island on which he laid out paved streets, ho-
tels, and scores of houses. When he offered his lots to
the public, $3,000,000 worth of so-called land was sold
the first day.
This Monte Carlo atmosphere was sustained almost
wholly by the use of stage money. Real-estate values
might leap and glitter like salmon swimming upstream,
but the profit was mostly on paper. Although the paper
changed hands many times at constantly increasing values,
very little actual money was involved. The process began
when the purchaser gazed at enormous blueprints of hypo-
thetical and contingent developments (the actual land was
usually half-submerged in the Atlantic, or consisted of
mucky ooze covered with scrub and mangrove). After
selecting his dream plot, the buyer put down a 10 per cent
payment, called a "binder"; this gave him an option on
the property for thirty days, at the end of which time he
made his first payment. Armed with this binder, or sheaves
of them, the buyer now became a seller and endeavored
to dispose of his option at a higher price. Men stood on
140 FANTASTIC INTERIM
street corners in Sarasota, Fort Myers, and West Palm
Beach, waving hands full of binders at passers-by; curb
markets sprang up wherever three people got together, and
binders changed hands six or eight times a day. Normally
hardheaded businessmen, some of whom came to scoff, in-
vested their life's savings in thirty-day options on sub-
merged property. During 1925 and the early months of
1926 there was a rising market for these negotiable bits of
paper as prices soared to incredible heights, all based on
the delusion that there existed an unlimited supply of mil-
lionaires who could afford to nibble perennial lotus leaves
or feed them to their polo ponies under a Florida sun.
Then, almost imperceptibly, the fever slackened and the
market for options began to subside. As payments fell due,
option-holders defaulted, and in a rapidly descending
spiral the Florida boom began to fall downstairs. In vain
did Barron Collier urge buyers on with more rhetoric.
"The present rush to Florida," he said, "is only the first
faint breeze that precedes the storm." No Jeremiah ever
spoke with direr tongue. As if contemptuous of man's
puny schemes, Nature aimed a rebuking hurricane right
smack at Miami. A malevolent wind hit the Gold Coast
on September 18, 1926, piling angry combers into the city,
and broke the stucco heart of the Florida boom in twenty-
four hours. Flimsy buildings, gaudy hotels, half -finished
roads, were demolished at a single buffet; the gray waters
of the Atlantic came as a cooling poultice to the inflamed
carbuncle of speculation. For years afterward, wreckage
and desolation scarred the landscape; bonds were almost
generally defaulted, and the last taste of the Florida boom
was ashes and regret in the mouths of the "investors."
Scant sympathy need be expended on Florida specula-
tors, but what of the vast army of "little people" who pur-
chased building lots and erected homes in suburban boom
areas? "Build Your Castle in Fernmere Gardens," "If
THE BUSINESS OF AMERICA IS BUSINESS 141
You're on Earth, Own a Slice of It," were slogans that
tempted thousands of trusting home-seekers into the mazes
of multiple mortgage finance. Homes were sorely needed
to absorb the overflow of expanding cities, but in 1926,
housing was a conspiracy between jerry-builders and finan-
cial extortionersa racket operated by land-developers and
construction companies, egged on by bankers. From first
to last it was a story of inflated values, ballyhoo, insane
financing, and broken hopes. The houses themselves were
atrociously constructed of the cheapest materials. In an
age when everything from egg-beaters to suspension
bridges was fashioned according to the latest technological
design, the building of homes was a study in obsolescence.
Housing was just something that the Industrial Revolution
had passed by.
The usual practice ran like this: The earnest home-
seeker, transported in a chartered bus to a suburban waste-
land formerly known as Mulligan's Flats but now rechris-
tened Stonycroft Lea, would pay down 10 per cent on a
30 by 40 houselot, exorbitantly priced at say $1,500. He
then signed a contract for the construction of a six- or
seven-room house to cost somewhere in the vicinity of
$6,500. To begin construction, he would mortgage his
houselot for $1,000; when the house was completed, he
could raise more money on a second mortgage. Yet on top
of mortgage interest and installments on the house itself,
the home-owner was obliged to pay swollen taxes and
sooner or later heard the terrible words "special assess-
ment." You see, the promoter had forgotten to mention
that Stonycroft Lea utterly lacked a water supply, and
was not yet connected with the gas and electric system
serving near-by communities. To finance the water and
gas mains, to build roads and provide fire protection, re-
quired "special assessments" which had to be paid if the
home-owner expected to live in decency and comfort.
142 FANTASTIC INTERIM
By stretching Ms dollar until its silk threads snapped, the
home-owner could, during the best of times, barely stag-
ger along under the various charges laid upon him. But if
he lost his job, or fell behind in his payments, his plight
was pitiable. He was like a man far at sea in a paper boat,
loaded to the gunwales with fixed charges; the slightest
disturbance of the waters would swamp him. Add to this
doleful picture the constant repairs which had to be made
on his jerry-built home, to keep the snow out of the sun
porch and prevent the roof from falling into the cellar,
and some notion may be gained of the deliriously happy
life in thousands of Stonycroft Leas on the outskirts of
large cities.
When the big wind of 1929 struck these papier-mache
developments, they were promptly knocked flat. House-
holders fell into arrears on their mortgage payments;
banks, already involved with too much real estate, were
obliged to foreclose and evict. Then followed unmannerly
scenes as evictions were bitterly fought by individual and
collective action. Doors were barricaded with sandbags
and barbed wire; sheriffs were showered with flour, pep-
per, rocks, and hot water. But it was a losing battle for
the householders; in many communities 60 per cent of
the original buyers lost their homes through foreclosure.
Sheaves of mortgages clogged the vaults of banks; one of
the principal causes of the later banking collapse was the
too-heavy commitments in frozen real estate. No one, save
possibly the original promoters, made money in the home-
developing racket.
The petty histories of Stonycroft Lea became the con-
struction epics of New York City, Pittsburgh, and Detroit
as gigantic office buildings and pretentious apartment
houses sprang up like steel mushrooms. Skyscrapers were
built on a shoestring, and the headlong race to pierce the
stratosphere with penthouses and stainless-steel spires took
THE BUSINESS OF AMERICA IS BUSINESS 143
heavy toll among the luckless holders of mortgage bonds.
An accepted practice in the 2o's was to prepare blueprints
for a new office building or apartment house, then borrow
money for the actual construction work. With as little as
$10,000 in cash, an individual could finance the erection
of a $500,000 apartment house; for $100,000, the smart
operator might obtain title to a $10,000,000 skyscraper.
The inevitable result was a terrific and needless building
boom, which forced the prices of material to fantastic
heights and created acres of surplus floor space, unused
to this day.
The rivalry between ambitious builders is illustrated by
the contest between the Chrysler Tower and the Bank of
Manhattan structure at 40 Wall Street. Each owner tried
to construct the world's tallest building. When the Chrys-
ler Tower seemed likely to terminate at 925 feet, the Bank
of Manhattan decided to halt its operations at 927 feet.
Meanwhile steelworkers were secretly assembling the rust-
less steel sections of the Chrysler spire, which, when
bolted into place, brought the building to its triumphant
height of 1,046 feet. Barely had the Chrysler architects
celebrated their victory when the Empire State Corpora-
tion set out to humble both contestants and break all rec-
ords for perpendicular construction. But before the Em-
pire State Building could be begun, the old Waldorf-
Astoria (a venerable twenty-six-year-old landmark) had
to be demolished. On October i, 1929, the first wrecking
crew tore into the doomed Waldorf; nineteen months
later, the completed Empire State Building was formally
opened by former Governor Al Smith. While construc-
tion was in full swing, an average of four and a half stories
was erected every week; once, just to prove how fast a
modem Cheops could rear an office pyramid, fourteen
and a half stories were built in ten days. These breakneck
proceedings were given an ironic twist when, on. the day
144 FANTASTIC INTERIM
of dedication, sightseers in the Observation Tower could
hear the cries of jobless apple-venders hawking their wares
on the sidewalks 1,250 feet below.
The Empire State Building was solidly financed, and
could weather a depression decade of unrented office
space. But other buildings went into receivership at the
' first tremor of the real-estate earthquake. The Chanin
Building, an imposing edifice towering over the Grand
Central Terminal region of New York City, offers a
shocking example of the top-heavy mortgage structure
carried by many metropolitan skyscrapers. There was a
first mortgage of $6,000,000, a second of $3,000,000, and
a third of $5,000,000. When this mammoth structure went
into receivership, nearly $3,000,000 in water was squeezed
out of these mortgages. In most foreclosure proceedings,
the holder of the first mortgage might, if fortunate, salvage
a part of his equity. But holders of second and third mort-
gage bonds joined the apple salesmen. One of the sorriest
spectacles of the depression was the ruin visited upon in-
vestors in $10,000,000,000 worth of supposedly first-grade
mortgage bonds. These bonds had been bought as con-
servative, bedrock investments, but turned out to be as
worthless as the riskiest wildcat options. Business real es-
tate, supposedly the soundest of equities, evaporated into
so much helium gas when the holders of mortgage bonds
tried to cash in.
6. "We Should Have Stood in Bed"
The foreign policy of the Coolidge Administration was
a Janus-faced muddle, resolute only in its basic contradic-
tion. "Strict noninvolvement" was the official taradiddle
of the State Department, but before three months had
elapsed, we were navel-deep in Europe's financial affairs.
For despite our passionate attachment to isolation, we were
THE BUSINESS OF AMERICA IS BUSINESS 145
powerfully attracted to Europe by the golden magnet of
the war debts.
During the war the United States lent $7,000,000,000
to its Allies; after the Armistice, $4,000,000,000" in addi-
tional loans and credit were made. This total of $11,000,-
000,000 constituted a just debt, but our futile struggles to
"collect" were a focus of infection from which fatal dis-
eases spread. Given the state of American intelligence in
the zo's, it was impossible for any political party to sug-
gest cancellation. Most Americans took the attitude ex-
pressed by Calvin Coolidge: "They hired the money,
didn't they?" Yet outright cancellation would have been
more profitable and less disastrous than the course we
actually took.
Legally unconnected with the war debts, yet inextrica-
bly associated with them in every European mind, was
the $33,000,000,000 of reparation payments levied on Ger-
many in 1921. The United States claimed no part of this
colossal indemnity, by which England, France, Italy, and
Belgium were to recoup their war losses at the expense
of the vanquished. It was optimistically hoped that the
European nations would use Germany's reparation pay-
ments to discharge their debt to the United States. But
such optimism was unfounded. It soon became apparent
that Germany could not pay this huge indemnity in cash
(there wasn't that much money in the world), and would
not be permitted to pay it in goods or services. France,
for example, indignantly refused to permit Germany to
furnish men and materials for the reconstruction of war-
ravaged towns. England and the United States erected
tariff barriers over which no German goods could pass.
Germany's supply of gold was scanty, almost nonexistent.
How then was it to pay reparations amounting to $i,ooo-
000,000 annually?
Simple enough. America would lend Germany the
146 FANTASTIC INTERIM
money! Not the United States Government, of course.
That would mean official entanglement in Europe's web
of difficulties. So the Coolidge Administration made an
indefensible surrender of its responsibilities by shunting
the whole business into the hands of private bankers. The
so-called Dawes Plan, hailed at the time as a great marvel
of finance, was a short-view venture by which a group of
private American bankers, headed by J. P. Morgan & Com-
pany, agreed to lend Germany the necessary funds to
make reparation payments to England, France, and Italy.
And where were these bankers to get the money? Why,
in the usual way by selling bonds to the American people.
It turned out to be a profitable source of business for the
bankers, but bad for everyone else.
Between 1924 and 1928, agents of rival banking houses
competed openly for the opportunity of floating bond
issues, not only for the German Government but for
scores of German municipalities and private corporations.
Altogether $2,500,000,000 in bonds were unloaded on
American investors. The bankers pocketed their commis-
sion, and for four years Germany made reparation pay-
ments annually to England, France, and Italy. As long as
Germany paid reparations, these nations in turn njade inter-
est payments on their war debts to us. And not a day longer.
The Dawes Plan succeeded just so long as the American
investor stayed on the job of buying German bonds, but
when the depression halted the flow of American money
to Germany, all reparation payments ceased. Simultane-
ously, interest payments on the war debts came to an end.
So the final result of the Dawes Plan (and the Young Plan
that followed it) was that American citizens paid whatever
was paid of reparations and war debts, and were stuck at
last with bales of defaulted German bonds.
The supreme folly of the Dawes Plan was not that it
milked American investors, or afforded Europe a temporar-
THE BUSINESS OF AMERICA IS BUSINESS 147
ily painless way of discharging its debts to us. The tragic
error of the Dawes Plan was this: It kept Germany alive
by artificial respiration when it could have breathed natu-
rally had it been permitted to do so. It was equitable that
Germany should pay reparations, but this could have been
achieved by allowing Germany to trade freely with the
rest of the world. A 50 per cent reduction in our tariff
would have accomplished more permanent good than all
the billions we pumped into Germany's financial arteries.
The unwisdom of our lending policy appeared as soon
as we were no longer able to lend. The Briining Govern-
ment, kept alive solely by our loans, was unable to exist
after the loans were withdrawn. "Germany must export
or die!" cried Adolf Hitler at the threshold of power in
1931. His terrible cry would never have been raised if
England and the United States had permitted German
goods to flow freely across the barriers of international
trade.
The Dawes Plan negotiated, Coolidge now turned with
typical ineptitude to the favorite American theme of dis-
armament. Five years had elapsed since the Washington
Conference of 1922, and the fruits of that much-advertised
pacifist triumph were turning slightly bitter as informed
sections of the American people learned that our dramatic
scrapping of capital battleships had failed to halt the build-
ing programs of England and Japan.
At first glance it might appear that England and Japan
had been guilty of deception, and that the United States
alone had adhered to the noble ideals of the Washington
Conference. These accusations were passionately made by
the American press and swallowed whole by the American
people. But the truth lay elsewhere. The simple fact was
that Coolidge and Mellon were more interested in econ-
omy than in building up the American Navy to a true
5-5-3 level with its competitors. It will be remembered
148 FANTASTIC INTERIM
that the Washington Conference had placed no limit upon
the number of io,ooo-ton cruisers (the so-called Washing-
ton type). Indeed, both England and Japan had taken
advantage of this proviso to expand already powerful
fleets. The British Navy had sixty cruisers with an aggre-
gate displacement of 400,000 tons; eleven of these were
of the new Washington type. The Japanese had already
built eight of the new cruisers, while the United States
had none! Japan's newly built Washingtons alone ex-
ceeded our total cruiser tonnage, which aggregated a piti-
ful 70,000 tons.
Frightened American admirals began to urge that we
at least match our rivals* cruiser strength. Coolidge, how-
ever, hesitated to open the national pocketbook. Seeking
a cheap method of combining parity with economy, he
snatched at the idea that the best means of achieving both
objectives would be to persuade England and Japan to
reduce their existent tonnage. Since this raw proposal was
not likely to be swallowed by England or Japan, it became
necessary for Coolidge to sugar his proposition by invok-
ing the moral issue of disarmament. This was done in
hypocritical official statements which fooled the American
people, but aroused bitter resentment among hardheaded
diplomats in England, Japan, France, and Italy. The two
latter nations refused to waste their time and did not at-
tend the conference.
The Three-Power Conference which met in Geneva in
1927 rapidly degenerated into a brawl between the United
States and England, with Japan smirking contentedly on
the sidelines at the edifying spectacle of the Anglo-Saxons
fighting among themselves. The American delegate, Hugh
Gibson, opened the conference by beating on the familiar
moralistic tom-tom, then blandly proposed to the British
that a maximum figure of 250,000 tons be fixed for cruiser
tonnage. This suggestion was coldly resisted by Admiral
THE BUSINESS OF AMERICA IS BUSINESS 149
Bridgeman, the British delegate, who pointed out that the
British fleet was based on England's Imperial needs, and
could not be cut in half merely to satisfy the American
penchant for penny-pinching. Admiral Jellicoe, hero of
Jutland, supported his colleague by declaring that Britain
needed at least 590,000 tons of cruisers. While the Amer-
ican and British delegates quarreled about tonnage and
gun calibers, the conference disintegrated, and ended in
flat failure. As a parting shot, the British delegates told the
United States that we could have parity with Great Britain
any time we wanted to spend the money to obtain it.
There was a lesson in the Geneva Conference, but char-
acteristically we refused to learn it. The plain words that
passed between British and American delegates should
have freed the air of the murky "idealism" which blurred
our international thinking. Yet no such salutary clearing
resulted. Lacking the courage or the vision to take over
the direction of world affairs, we persisted in a meddle-
some and ineffectual moral attitude toward matters grimly
realistic. And by our next step, the Kellogg-Briand Pact
of 1928, we merely aggravated an already impossible situ-
ation.
Frank B. ("Nervous Nellie") Kellogg, then Secretary
of State, was a man with Gopher Prairie ideas who found
himself wandering in a diplomatic Megalopolis. Disarma-
ment by conference having failed, Kellogg conceived the
starry-eyed plan of abolishing war by proclamation. War
was to become illegal. Just like that. By the Kellogg-
Briand Pact (the Pact of Paris), signed with high cere-
mony in the Quai d'Orsai in August 1928, sixty nations
pledged themselves to renounce war as an instrument of
policy, and settle their disputes by arbitration. This docu-
ment was really the Volstead Act of international law, but
its chances of success were even slimmer. For the Volstead
Act was at least implemented by an enforcement agency,
150 FANTASTIC INTERIM
while the Kellogg-Briand Pact was pure wish, unsup-
ported by force of any kind.
Europe hoped, but in vain, that the United States was
waking from its isolationist dream and would take the lead
in creating an international police force which would "put
teeth" in the Kellogg-Briand Pact. Americans, however,
had no such idea. We spoke loftily of international moral-
ity, but were unwilling to underwrite it, either with
money or with responsibility. Consistently, we refused to
take part in enforcing the pact we had so glibly sponsored.
Our incurable naivete about world peace baffled and irri-
tated our European neighbors. Our position seemed to
them (as indeed it was) either hypocritical or absurd.
While we constantly prated of peace, while our clergymen
and women's clubs exalted it in the abstract, we refused
point-blank to take concrete, positive steps to ensure it.
Meanwhile, the pact to outlaw war became a ghastly
joke. No nation reduced armaments; on the contrary,
Europe expanded its military establishments. Within three
years the pact was to be openly flouted by Japan descend-
ing upon Manchuria. The only achievement of the Kel-
logg-Briand Pact was to foster in America a sense of false
security comparable to that of the cocaine-eater, gliding
in druggy euphoria through a world of dangers.
What explanation of our prolonged and incredible som-
nambulism can be made? None, except to say that the
United States was suffering from a bad case of inflated
ego, colloquially known as a swelled head. Our vanity had
been atrociously needled by too many advertising statistics
about bathrooms, automobiles, and our per capita con-
sumption of anchovies, avocados, and silk shirts. 1 So over-
weening was our confidence in the American way, so pre-
1 It was one of the boasts of the advertising profession that the price
of avocados had been reduced from $1.05 to 10 cents as the result of
a national campaign.
THE BUSINESS OF AMERICA IS BUSINESS
sumptuous our unearned faith in our moral superiority and
military invincibility, that not even catastrophe already
grinning at us would teach us wisdom.
Besides, in those days we had something more important
to think about. There was, for example, the engrossing
spectacle of the stock market.
7. The Ticker Tape Falls Behind
On the day that Calvin Coolidge took the oath of office
in August 1923, the stock tickers of the land clicked tran-
quilly: U. S. Steel stood at 87; A.T. &T. at 122; Radio
at 25. Values were sound, and the volume of 600,000 shares
was normal for a summer's day. Six years later, when the
market reached its Everest pinnacle, Steel was 279; A.T.
&T., 335; and Radio, a fantastic 505! The new and me-
chanically improved stock ticker, exhausted by its prodi-
gious exertions, fell an hour behind as 8,000,000 shares
were bought and sold.
The intervening years had witnessed an almost constant
climb in the prices of common stocks and the volume of
trading on the floor of the New York Stock Exchange.
The ascending graph of values had left the quiet valleys
of prudence and rationality far behind, and was now be-
ginning to soar into the papery stratosphere.
To wreck a myth, it must be pointed out at once that
the wild bull market that roared upward through the 2o's
was never the general melee it has been represented to be.
To recall how chauffeurs, barbers, and elevator boys were
eagerly begging market tips is to perpetuate a false notion
of what actually happened. The craze for speculation, al-
though accompanied by a terrific clamor, was actually
confined to less than i per cent of the population. Accord-
ing to John T. Flynn, not more than r, 000,000 people
were speculating in securities at the very peak of the mad-
152 FANTASTIC INTERIM
ness. The remaining 122,000,000 Americans simply had no
money to spend on stocks. If U. S. Steel had been selling
at $i a share in 1929, 99 per cent of the American people
could not have scraped together enough cash, over and
above the necessities of food and lodging, to buy a dozen
shares.
The unprecedented rise in the value and volume of se-
curities started in 1923, when great surpluses of cash began
to accumulate in the hands of a few wealthy individuals
and corporations. These surpluses were caused by two fac-
tors: the slashing and rebating of taxes in the upper brack-
ets, and the increased profits accruing to industry. An an-
nual $4,000,000,000 was thus concentrated in the hands of
a comparatively few men, who could not possibly spend
it either on themselves or in the legitimate expansion of
their plants. A necessity arose to reinvest it, and these re-
investments took the form of the purchase of common
stock. Rich men eagerly competed with each other in buy-
ing stocks of well-managed companies; under the normal
operation of the law of supply and demand, the price of
these stocks began to rise. At first the advances were or-
derly, in both price and volume. Between 1923 and 1926
the index of common stock averages rose 30 points; annual
trading in stocks increased from 237,000,000 to 449,000,-
ooo. The movement was well in hand; a few insiders were
taking moderate profits, and the country at large showed
no undue interest in the doings of Wall Street.
Gradually, and only faintly influenced by the Wall
Street breeze, rumors of the new prosperity began to flut-
ter throughout the land. Employment was high, wages
were rising, and the pleasing whir of America's industrial
machine grew louder as it poured its grist of comforts and
commodities into the lap of the American purchaser. In-
stallment buying, advertising, and salesmanship were per-
forming their miraculous triple play by which that snide
THE BUSINESS OF AMERICA IS BUSINESS 153
base-runner Poverty would never again reach even first
base. The magazines teemed with success stories describ-
ing the rise of industrialists, bankers, and businessmen from
humble positions to posts of national, even international,
prominence. The reputation of the businessman never
seemed higher. He was pictured as a combination of daring
navigator and benevolent captain who had piloted the
stout bark of private enterprise into the palm-fringed har-
bors of Utopia.
Increasingly, the Golconda psychology of the age drove
men past the limits of ordinary business profits and into
the more exciting and lucrative field of speculation, tjow
puny a 3 per cent profit seemed, how weary the strain of
waiting ninety days for a customer to pay his bills, when
you could get hold of a speculative stock at the market's
opening gong, and walk out with a 6-point rise by lunch
time. The possibilities were dazzling. Moreover, these spec-
ulative activities could be managed with your left hand,
while you went about performing your usual business.
"Two incomes are better than one," the brokers explained,
and few people with extra money about them were able
to resist the argument.
The customers were a credulous lot, yet something more
than credulity was needed to keep the ticker chattering
during the latter part of 1926. In October of that year a
group of ten men formed a gigantic pool and proceeded
to create such a concerted bull market that goggling side-
liners leapt in after them. Who were these men? Nearly
all of them were motor magnates laden with untaxed mil-
lions from the rise of the automobile. William G Durant,
organizer of General Motors and a Napoleonic plunger,
was the boss bull guide. The Fisher brothers lugged
$300,000,000 profit from the auto-body business into Wall
Street. John J. Raskob, a comparative newcomer in the
General Motors fold, added his millions. These and a few
154 FANTASTIC INTERIM
others bought bushels of common stock in solid corpora-
tions. Their huge purchases boosted stock prices dramat-
ically; Baldwin Locomotive shot from 92 to 261 in a few
months. Thousands of financial minnows followed in the
wake of these speculative sharks, and the run was on. In
March 1928, Raskob, sailing for Europe, casually remarked
that General Motors, then selling at 187, should go to 225,
a figure fifteen times its dividends. On the strength of this
comment, General Motors immediately rose to 200.
But even shameless needling of the market by means of
professional pools, syndicates, and well-timed comments
by interested public figures would not have churned up
a sufficient number of customers. Although the familiar
American psychology of "getting something for nothing"
was much in evidence, most purchasers of securities in
1926 thought of themselves as investors, not gamblers. The
speculative stampede might never have developed if pres-
sure had not been applied by well-drilled securities sales-
men, sent into the field by great banks and investment
trusts.
Captain of the high-pressure selling brigade was Charles
E. Mitchell, president of the National City Company,
stock-peddling affiliate of the mighty National City Bank
of New York. Mitchell, square-jawed and dynamic, the
personification of the Businessman of Destiny, knew that
an enormous harvest was waiting for the man bold enough
to reap it. Instead of waiting for investors to walk into his
office, Mitchell trained squads of Yale and Princeton grad-
uates in the art of security-selling, and sent them into the
highways and byways to find investors. With offices in
fifty-eight cities, he was soon educating thousands (not
millions) of small investors to multiply their savings in the
pleasant Mitchell way. 1 Three types of securities were
''In 1927 Mitchell had 47,779 customers; in 1928, 118,000.
THE BUSINESS OF AMERICA IS BUSINESS 155
sold: (i) stocks and bonds of industrial companies; (2)
shares in the National City Bank; (3) bonds of foreign
governments. The Mitchell sales force, like the salesmen
of any chain store, always had pet issues to sell and special
incentives in the form of high bonuses for selling them.
Whether the customer received the type of security best
suited to his needs, and whether the securities themselves
represented sound equities in well-managed enterprises,
were matters of slight concern to the salesmen.
The saga of Mr. Edgar D. Brown of PottsviUe, Pennsyl-
vania, offers an illuminating paradigm of the methods em-
ployed by Mitchell's operators. Mr. Brown, ill and about
to retire, was persuaded in December 1927 by a National
City salesman to sell his holdings of United States bonds,
amounting to $100,000, and buy common stocks recom-
mended by the National City Company. To aid Mr.
Brown in the purchase of these new securities, the Na-
tional City Bank loaned him $75,000 at 5 1 / 2 per cent. The
conservative Mr. Brown protested for nearly two years
about the type of stock the National City Company
bought for him, but at the end of that time, Mr. Brown
found that his holdings consisted largely of National City
Bank stock, then priced at $525 per share. Mr. Brown tried
in vain to sell this stock; repeatedly he was advised by
National City salesmen that the market was going up and
that he was very foolish to unload. Then came October
24, 1929. On that dreary day National City stock dipped
to $325 a share; the bank promptly sold out Mr. Brown's
holdings of National City stock without consulting him,
and used the proceeds to pay off Mr. Brown's debt to the
National City Bank. Mr. Brown, literally penniless, wrote
a long letter of protest to the bank, beginning: "I am now
40 years of agetubercularalmost totally deaf my wife
and family are depending on me solely and alone, and
156 FANTASTIC INTERIM
because of my abiding faith in the advice of your com-
pany, I am today a pauper."
In the year that Mr. Edgar D. Brown became a pauper,
Mr. Charles E. Mitchell received bonuses and salary from
the National City Company amounting to $1,108,000.
Another type of lure to which the public greedily re-
sponded was the "investment trust." These institutions
pooled vast sums of investors' money, acquired large port-
folios of diversified securities, and, in theory at least, en-
abled their clients to enjoy the same purchasing advantages
as the large capitalist. The idea was a good one, and it
spread rapidly. Six hundred investment trusts sprang up
almost overnight; by 1929 they controlled over $4,000,-
000,000 of capital. Needless to say, these institutions, with
few exceptions, proceeded to bilk their customers by vari-
ous forms of chicanery. Take, for instance, the maneuvers
of the American Founders Corporation, one of the largest
investment trusts in America. Its literature was steeped in
conservatism, its program highly attractive. Hear Mr,
Louis EL Seagrave, its president, in a typical blast:
"Let me emphasize that we are not speculators. We buy,
for value, both bonds and stocks of companies of success-
ful and prosperous records, outstanding strength, with
great resources and reserves already established."
Seagrave then proceeded to list a mouth-watering port-
folio of the stocks held by his trust. But when the crash
came, the portfolio of American Founders was found to
include the following dreggy items:
20,000 shares of the Kolo Products Corp., a newly
formed company to make soap out of banana oil
1,250 shares of Hotel Governor Clinton, a new hotel
in the City of New York with first and second
mortgages ahead of the stock
5,000 shares Kreuger & Toll (Match this!)
$295,000 in Yugoslavian bonds
THE BUSINESS OF AMERICA IS BUSINESS 157
$7,540,550 U. S. Electric Power Corp., a holding company
formed in September 1929 by Harris, Forbes of
which Mr. Seagrave was one of the directors
2,500 shares Price & Whiteley Trading Corp., a trad-
ing company in stocks
$7,575,000 Founders General Corp., a wholly owned sub-
sidiary which specialized in the distribution of
investment companies 1
What had happened? Simply this: Mr. Seagrave had
poured the money of his 80,000 investors into questionable
enterprises. When the shouting was over, a share of Amer-
ican Founders Corporation for which the trusting investor
paid $34 was worth 58 cents. The story of the American
Founders was repeated, with variations, in the case of some
five hundred other investment trusts. Misrepresentation,
crooked management, criminal substitution, debauching of
published portfolios these were the preferred tactics of
the men who ran them.
Another highly popular rathole into which the Amer-
ican investor poured his money was the seemingly gilt-
edge foreign bond. Reputable banking houses competed
with each other for the privilege of loaning money to for-
eign countries. It was not unusual for South American
governments and European ministries to find two or three
American bankers on their doorsteps, begging them to ac-
cept huge sums of money from the United States. If for-
eign chancelleries didn't take the money willingly, they
were induced to do so. To mention a typical transaction,
Seligman & Company persuaded the President of Peru that
his country could use $90,000,000. By an interesting co-
incidence, the President's son received a total of $415,000
in commissions. The bonds were floated and sold to the
American public by Seligman & Company, who made a
gross profit of $5,475,000 on the transaction. What Peru
1 Data from False Security by R. J. Reis (a director of the Consum-
ers' Union), Equity Cooperative Press, 1937.
1^8 FANTASTIC INTERIM
did with the money will never be known, but within three
years the bonds were in default.
Dillon Read & Company loaned $12,000,000 to Rio de
Janeiro to level a hill in the middle of the city; these
bonds, sold to the American public for $97, were last heard
of selling for $16. Kuhn, Loeb & Company sold for the
Chilean Government a $90,000,000 bond issue at $99.25.
In 1932 interest payments on these bonds were in default
and the bonds themselves were listed at $13.
Herbert Hoover, Secretary of Commerce, was enthusi-
astically in favor of foreign loans. He declared in 1926:
"The making of loans to foreign countries for productive
purposes, not only increases our direct exports but builds
up the prosperity of foreign countries and is a blessing to
both sides of the transaction." Hoover, like many govern-
ment officials, knew (or should have made it his business
to know) that the finances of most South American states
were in lamentable condition. Reports available to State
Department officials and Cabinet officers were unanimous
in their warnings that Peru and Chile, especially, were in
rickety fiscal shape. But the public never learned of these
reports. Its function was to buy the bonds, and hold the
bag while the great banking houses garnered huge com-
missions.
These assorted "investments," unsuspected by the gen-
eral public at the time, exercised no braking power on the
spinning roulette wheel of speculation. No longer was it
necessary for salesmen to urge customers to withdraw
money from savings banks and buy rocketing stock. The
Ponzi pitch note vibrated again as staid burghers, on the
strength of a casual tip, exchanged their life savings for
blocks of securities. Not all of them purchased stocks out-
right; the wisdom of the day dictated "buying on margin."
For a payment of $15, the customer could gain tide to a
$100 stock; the difference was paid by a loan from his
THE BUSINESS OF AMERICA IS BUSINESS 159
broker, who in turn borrowed the money from banks
eager to advance credit on steadily rising collateral. The
whole process of borrowing money to buy stocks was
based on the assumption that prices would continue to rise.
If they fell? But that is anticipating the story.
Prices did go up, meteorically. Between 1924 and 1928
the average value of one hundred common stocks in-
creased 250 per cent; rises of 10 or 15 points a day were
not uncommon. These daily spurts acted like gasoline on
an already roaring blaze; the conflagratory good news was
really spreading now. The chattering stock ticker became
front-page stuff, and commuters* trains and dinner tables
buzzed with accounts of fabulous profits made that day in
Anaconda, General Motors, and Radio. Surely a beneficent
Deity must love his people very much to pour such easy
profits into their laps. The people and their leaders were
duly grateful; Calvin Coolidge gave public thanks in a
message to Congress: "The great wealth created by our
enterprise and industry, and saved by our economy, has
had the widest distribution among our own people and
has gone out in a steady stream to serve the charity and
business of the world." At Christmas time 1927 it was as-
serted that the President had made to the American people
a gift of continuous prosperity.
Occasionally, some shrewd financial analyst would ask:
"Is it healthy? Will it last?" Cynical commentators pointed
out that the prices of stocks were approaching twenty-five
times their dividends (the old rule held that a fair price
for stock was ten times its dividend), and that inflated
stock prices were based on a hypothetical business future
which was not in fact developing.
Disinterested experts also believed that the speculative
flood could be curbed if the Federal Reserve Bank would
raise its rediscount rates and thus check the flow of cheap
money that was finding its way into brokers' hands. These
160 FANTASTIC INTERIM
brokers' loans had soared to alarming heights; in 1922 they
had amounted to less than $2,000,000,000, but had tripled
by 1928. There was good precedent for lifting the interest
rates on brokers' loans: a previous bull market of 1919,
described at the time as "historic," had received a sharp
setback when the Federal Reserve advanced its rediscount
rate from 12 to 30 per cent. This stern rebuke had broken
the backbone of the gambling movement; in one day Gen-
eral Motors had fallen off 58 points. The Federal Reserve
system had functioned in 1919 as Woodrow Wilson in-
tended it to function; namely, by denying credit to those
who had borrowed money solely for stock speculation.
Proper wielding of this credit-denying power could have
controlled, perhaps even prevented, the ride of the Cool-
idge raiders over those last fatal parasangs.
Did the Federal Reserve Board tighten the strings of
credit in 1928? It did not. A national election was coming
up, and the leaders of the Republican party hesitated to
take any action suggesting limits to the prosperity of
which they were the peculiar custodian. When Andrew
Mellon was consulted, he took a pinch of negative snuff,
and the members of the Federal Reserve Board all sneezed
in unison. The brokers continued to get their money at
the old rate of 3 % per cent.
But the strangest performance of all came from the
President himself. Early in January 1928, reporters at the
White House press conference asked Coolidge if, in his
opinion, brokers' loans were too high. The tight mouth
unbuttoned itself and uttered an unqualified "No." Calvin
Coolidge, symbol of American thrift and probity, was
afraid to set the brakes, lest the prosperity which already
bore his name should come to a catastrophic halt. His
amazing statement acted like a hypodermic on the market.
U. S. Steel shot up 20 points in the next two days. Even
Coolidge's stanchest biographer admits that the President's
THE BUSINESS OF AMERICA IS BUSINESS l6l
statement encouraged further inflation. "It was the one
important occasion," says Qaude M. Fuess, "that CooKdge
did not keep his mouth shut, and his untimely utterance
proved to be the most unfortunate blunder he ever made."
Spurred by the encouraging goads of the President and
his Secretary of the Treasury, the bulls strained forward
once more. All through the spring of 1928, the ticker
clicked merrily as fresh brokers' loans poured into the
market. Radio and General Motors led the march, advanc-
ing steadily into a region of mountainous prices. General
Motors crossed the 150 divide, and all familiar landmarks
faded behind. The strategy of the campaign and the daily
countersign of the marchers was "Buy!" Investment trusts
proliferated; holding companies spawned out fresh sheaves
of securities to satisfy the growing clamor for investment
opportunities. Powerful groups of insiders formed pools,
forced prices upward, then sold out at huge profits to
other pools, other manipulators. Following these bellweth-
ers increasing herds of woolly lambs came bleating for
the shears.
In June 1928 an ominous augury appeared in the heav-
ens as the stock of Giannini's Bank of America fell 120
points in a single day. Frenzy enveloped the New York
market; Radio dropped 23/2 points, and the New York
Times headlines announced "WALL STREET'S BULL MARKET
COLLAPSED YESTERDAY WITH A DETONATION HEARD ROUND
THE WORLD-"
This heralding of doom was premature; eighteen months
would elapse before the tornado would send the Big Top
kiting to destruction. But akeady the guy ropes that teth-
ered the Dream Canopy were beginning to stretch and
give way.
162 FANTASTIC INTERIM
8. He Didnt Choose to Run
As the Book of Calvin approached its final chapter, even
the most discerning readers could not guess what its sequel
would be. In 1928, the United States, viewed from the
windows of the Union Club or reflected in the two hun-
dred pages of handsome advertising in the Saturday Eve-
ning Post, was a smiling land indeed. But underneath its
rouged surface, the national skin did not exactly glow with
health. Chafed spots and unsightly blotches were sympto-
matic of the dyscrasias attacking the American blood
stream. For instance, the sales of automobiles, refrigerators,
even clothing, were beginning to fall off. Apparently the
American consumer wasn't consuming properly. True, he
was doing the best he could, stretching his expanded credit
to buy more luxuries than any individual had ever bought
before. But despite the yelping ballyhoo of advertising
and installment buying, the consumer demand was not ab-
sorbing the output of the productive machine.
The unrecognized fact was that the consumers weren't
numerous enough! Strange as it seems, scarcely more than
40,000,000 people were able to buy the glittering and
varied bijouteries ground out by the enchanted salt mill.
The remaining 75,000,000 could barely afford to feed,
clothe, and house themselves and even in the God-sent
era of Coolidge prosperity, were not potential customers
for the products whirring off the magic conveyor belt.
The awful truth was that a severe industrial crisis was
brewing, and would have broken over the country even
if the stock market had not crashed in 1929.
Then too, buying power, the chief muscle of the pros-
perity weight-lifters, was being weakened by an alarming
increase in unemployment. In the winter of 1928, industry
was employing fewer workers than it had employed in
THE BUSINESS OF AMERICA IS BUSINESS 163
1920* The population had gained 5 per cent; factory
workers had fallen off 15 per cent. Declines in employ-
ment took place in such diverse activities as the making
of automobiles, ice cream, hardware, bricks, cement,
candy, paper, pianos, glass, flour, leather, electrical machin-
ery, agricultural implements, furniture, shoes, shirts, iron
and steel. Long bread lines were forming in every large
city, and charitable institutions reported strained budgets
as they attempted to allay the sharp pangs of joblessness.
This unemployment could not be laid to war, panic, or
internal commotions of state. It was caused solely by
the increased output per unit of labor resulting pom the
me of neiv technological knowledge. "Technological un-
employment," as it came to be called, simply meant that
improved machines and more efficient methods of produc-
tion required fewer human hands to operate them. And
the terrifying thing about the technological unemploy-
ment was this: It was neither sporadic nor seasonal; it was
permanent, it was grim, and it continued to throw men
out of work in the making of tires, shoes, and textiles, in
pig-iron casting, flour-milling, and meat-packing. No sug-
gestions as to its cure were forthcoming from Calvin Cool-
idge or Andrew Mellon, both of whom were totally un-
aware of what was happening. Indeed, only a few econ-
omists realized that a grim and quiet cancer, masked by
the speculative excitement of the period, was gnawing
at the vitals of our economy.
Agriculture was another diseased spot in the buying pic-
ture. Fanners, who knew the Coolidge boom only by
hearsay, had long been unable to absorb their share of the
industrial output. The farmers themselves proposed legis-
lation (the McNary-Haugen bills) which would increase
their income and hence their buying power. This legisla-
tion passed Congress in 1927 and again in 1928, but on
both occasions it was sharply vetoed by Coolidge. In
164 FANTASTIC INTERIM
scolding messages he defended his vetoes; the McNary-
Haugen bills, he declared, involved "price-fixing, discrim-
ination, a vicious form of taxation, and a cumbersome
bureaucracy." Once again he advised the farmer that agri-
culture must rest "on an independent business basis" and
could expect no help from the Government. Then he
added a typical Coolidge touch by solemnly advising the
farmer to be "thrifty and industrious."
These homiletic nuggets neither lifted the farmer's mort-
gage nor enabled him to buy more automobiles. Coolidge
simply did not understand that if the industrial machine
was to be kept whirring at top speed, buying power must
not be allowed to slacken. This ignorance was only a seg-
ment of what Coolidge did not know. Although he could
pose (not too convincingly) at the tail of a one-horse
plow, he was basically uninformed about the problems of
agriculture and its interlocking role with industry. Cool-
idge's ignorance, shared by practically every industrialist
and politician of the time, was merely a surface crack in-
dicating the dangerous crevasse threatening the interde-
pendence of industry, agriculture, and government.
Although Coolidge would have received a dunce's mark
in any examination on finance, technology, or agriculture,
he possessed enough native wit to realize that all was not
well with the prosperity on which his name was engraved.
Some months previously, in July 1917, he had made the
most famous of his laconic utterances: "I do not choose
to run." Delivered at a time when the nomination was his
for the asking, this cryptic statement perplexed the entire
country. Coolidge professed then and afterward that he
"had been around long enough, and that ten years in the
Presidency would be too much for any man." He knew
also that he was suffering from cardiac disease, and that
his heart would not stand the strain of another term. But
a still further reason may be fairly adduced. Narrow-
THE BUSINESS OF AMERICA IS BUSINESS 165
gauged though he was, and as unversed as Harding in the
intricacies of high finance, Coolidge's instinct for self-
preservation must have warned him that the country was
heading for a crash. Did he determine, in the vernacular
of Wall Street, to unload at the top of the market, to get
out while there was still time? There is nothing cynical
about this interpretation; it was the counsel of self-preser-
vation, and Coolidge followed it.
And so we find him drifting between boredom and
weariness toward the goal of retirement. Dark buttes of
disaster cast lengthening shadows across the twilight desert
of his last days in office. Like an uncordial automaton, he
responded to the surface pressures made upon him; he
dedicated the Bird Sanctuary and Singing Tower which
Edward Bok had presented to the nation; he suggested
that Congress provide a country White House like Cheq-
uers in England where the Chief Executive could find
refuge from the heat of Washington. Toward the end he
gave a lukewarm benediction to Herbert Hoover's candi-
dacy for the Republican nomination. But about unemploy-
ment, farm relief, Prohibition, the boiling stock market,
and the swirling tides of European turmoil, Coolidge said
or did nothing. These, he felt, were not fit matters for
Presidential interference.
One last action Coolidge took, however: he approved
the Jones-White Act, by which $250,000,000, plus huge
mail subsidies, was distributed among members of the
American Steamship Owners Association. The worthy
object of the Jones-White Act was to revive our languish-
ing merchant marine, which had fallen into alarming de-
cay. Here was the United States, which by reason of its
vast seacoast, its superlative harbors, and its multiplicity
of exportable surpluses, should have had the greatest mer-
chant marine in the world. But due to Shipping Board
scandals which permitted government-owned vessels to be
l66 FANTASTIC INTERIM
sold at one-tenth their value, our merchant marine, after
eight years of unparalleled plundering and corruption,
consisted of aged hulks, wretchedly conditioned and woe-
fully deficient in number. It was laudable then, on the face
of things, for the Government to grant assistance to ship-
builders, even though similar grants to farmers had been
sternly withheld.
The actual achievements of the Jones-White Act were
far from laudable. A few shipyards and shipowners got
the bulk of the money, but the United States got no com-
parable return in the form of ships. High salaries, bonuses,
and profits went to shipping men; holding companies and
their subsidiaries sucked noble benefits from the public
Treasury. Still the United States had no adequate mer-
chant marine. In 1929, the year following passage of the
Jones-White Act, United States shipyards built a meager
126,000 tons of merchant vessels. In the same year Japan
built 165,000 tons, Germany 249,000 tons, and Great Brit-
ain 1,500,000 tons. Six years later, a Senatorial investiga-
tion disclosed that although the United States merchant
marine ranked third in tonnage, it ranked fourth as to
speed, and last among the principal maritime countries
(including Norway, Sweden, and Denmark) in regard to
the age of its ships.
The day would come when a desperate cry would rise
over the Atlantic for ships, ships at any price. But when
that day came, the American taxpayer would have long
forgotten the abuses perpetrated under cover of the Jones-
White Act. Shipping apologists would adduce many rea-
sons for the critical shortage of vessels. But the main rea-
sonthe same old reason would never be mentioned.
All of this lay veiled in the future, unseen by Coolidge's
weary eyes. Mortally tired of carrying burdens too heavy
for his spindling shoulders, Calvin Coolidge longed only
for the rocking-chair Nirvana of Northampton, and the
THE BUSINESS OF AMERICA IS BUSINESS 167
granite silence of his New England hills. A congenial task
awaited him there; he was under contract to produce a
syndicated daily column of "hard sense and soft soap" at
the not-to-be-despised rate of $i a word.
The campaign of 1928 thrust into national eminence
the brown-derbied personality of the Democratic candi-
date Alfred E. Smith, who had risen from the sidewalks
of New York to the four-term governorship of his native
state. Smith's record revealed a moderate liberalism, and an
authentic executive talent. But he was burdened with polit-
ical liabilities. He was a Roman Catholic and a frank "wet"
heavy imposts in a country predominantly Protestant
and officially "dry." Moreover, Smith was a graduate of
Tammany Hall, and the odor of that institution was un-
savory in the national nostrils. Protestants feared that
Smith would set up a sub-Vatican annex in the Executive
Mansion; Republicans warned that he would pitch a Tam-
many wigwam on the White House lawn. The "drys"
shuddered at his attacks on the Eighteenth Amendment
and winced under his whiplash castigation of the ineffi-
cient and venal enforcement program.
But the pebble that really stymied Al Smith was his
utter lack of a formula that could successfully compete
with the Republican recipe for prosperity. Since the days
of Grover Cleveland, the Democratic party had been the
poor man's friend, the opponent of Wall Street in all its
pomp and machinations. But in 1928 it was a bit awkward
to take this stance. The traditional concept of corporate
wealth as a top-hatted, paunchy menace was no longer
fashionable; no candidate could convince the people that
their prosperity was not wrapped up in ticker tape. Even
if Smith had boldly appealed to the disinherited millions
of laborers and farmers who had not shared the Coolidge
prosperity, they would not have heeded him. But he made
l68 FANTASTIC INTERIM
no such appeal. Instead, he attempted to straddle an im-
possible hedge, saying in effect that while Republican
prosperity had done well by the country, a Democratic
replica would do still better. To prove that the Repub-
licans had no monopoly on Wall Street millionaires, John
J. Raskob was made chairman of the Democratic National
Committee, and immediately began bombarding the elec-
torate with manifestos from prominent capitalists and
financiers, all unanimous in declaring that prosperity and
Smith would make a harmonious team. It was all a little
ludicrous, and more than slightly pathetic.
Meanwhile, in the Republican garden nothing but long-
stemmed American Beauties, thornless and deliciously
scented, were growing. Herbert Hoover had only to cut
the choicest blooms and offer them in armfuls to the
voters. His acceptance speech was a nosegay of backward-
looking complacency and optimistic prophecies. "The
poorhouse is vanishing from among us. We have not yet
reached the goal, but given a chance to go forward with
the policies of the last eight years, we shall soon, with the
help of God, be in sight of the day when poverty will
be banished fiom this nation."
Hoover believed it. The country believed it also. Smith
made a valiant fight along the a me-too" line, but the Re-
publicans had copyrighted the prescription for prosperity,
and Hoover was their chief apothecary. The people took
a huge dose of the proffered boom medicine, and on No-
vember 6, 1928, gave Hoover a 6,500,000 majority. It was
a mandate to the Wall Street bulls, who now lowered
their horns and charged forward in an earth-shaking
stampede.
JUST AROUND THE CORNER
1. Casey Hoover Mounted to the Cabin
PITY, flecked with derision, is the emotion that rises in
most Americans at the mention of Herbert Hoover's name.
Among those who neither writhe nor guffaw at the mem-
ory of his futility, there is a tendency to be sorry for him,
to murmur deprecatingly: "He deserved a better fate."
Hoover brought to the White House a broad-gauged
training and an imposing record of achievement. By edu-
cation a mining engineer, he had amassed a considerable
fortune developing gold and silver properties (first for
British capitalists, later for himself) in Australia, China,
and the Malay Peninsula. He is credited with being the
first to put coolie mine labor on an efficiency basis. During
his promotional operations he acquired part ownership of
the Burma Silver Mines, the largest in die world, and by
the application of sound business methods Hoover was
estimated to have netted personal profits of $4,000,000
from his mines prior to 1914.
In that year, through his efforts in behalf of the starving
Belgians, Hoover became a world figure. When the United
States entered the war, Wilson appointed him Food Ad-
ministrator. Under Harding and Coolidge, Hoover had
served as the superbly efficient Secretary of Commerce,
169
170 FANTASTIC INTERIM
transforming his department from a dusty pigeonhole into
a vast beehive of information about foreign markets and
trade opportunities which American businessmen gobbled
greedily for eight years. The calico appetites of the Papu-
ans and the per capita consumption of egg-beaters in
Batavia were carefully tabulated by Hoover's well-staffed
bureau. Rusty tramp freighters rolled down to Rio laden
with tinware, or bucked Indian monsoons with cargoes
that Hoover had discovered were profitably in demand.
On paper, Hoover appeared to be one of the ablest men
ever to occupy the White House. There he stood, an out-
standing business success, a vigorous exponent of private
enterprise, a man of world experience and international
vision. An inspired press had skillfully stressed his effi-
ciency as an organizer, his humanitarianism, and his cham-
pionship of the American system. Hoover himself had
coined the felicitous expression "the American way of
life," and had not hesitated to go strongly on record in
defense of his philosophy of government. The corner-
stones of Hoover's political credo were private initiative
(untrammeled) and budgeted expenditure (strictly inter-
preted). On these inherited positions he made his first and
last stand. All his strategy deployed from these bases; ob-
durately he stuck to them even after he was overwhelmed
by the irresistible surge of events. He went down pro-
claiming them in the face of the obvious fact that they
did not work. If, as Bergson suggests, "Laughter is caused
by the spectacle of a human being responding mechani-
cally to an unexpected situation," then the spectacle of
Herbert Hoover sweating over his budget in the midst
of desolation is surely die stuff that grim comedy is
made of*
Hoover was nothing more or less than a promoter who
had been palmed off on the country as a leader. A master
at organizing commissions and summoning conferences,
JUST AROUND THE CORNER 171
he was unable to translate their findings into successful
political action. He was hampered by a dismally cold per-
sonality, which, in addition to his cast-iron concept of
the relationship of the state to the individual, laid him
open to charges of inhumanity. For four years he acted
as if the problems of 125,000,000 Americans caught in an
economic blizzard could be graphed, budgeted, and solved
in terms of an engineering production chart, and was
amazed when human factors upset his calculations. As one
of his contemporaries put it: "Hoover was itesourceful,
consistent and determined but he didn't know what to
do "
Hoover's political clumsiness was something to marvel
at. Any wagon-tongue legislator from the back hills of
Tennessee could have instructed him in the tricks of steer-
ing a bill through Congress. Glad-handing and first-name
calling, the stock in trade of the born politician, were for-
eign to his nature. Fundamentally he did not know how
to get on with people. He had spent too many years sit-
ting at British directors' tables and giving orders to Ori-
ental subordinates; until he had entered the Presidential
race, he had never run for public office. By training and
temperament, then, the President was woefully unfitted
to engage in the rib-to-rib knife play of national politics,
and became annoyed and irritable when partisan oppo-
nents outmaneuvered him. These defects were unsuspected
by the public or even by his intimates until the cruel
light of the Presidency showed Hoover to be inept, petu-
lant, timid, evasive, pathologically sensitive to criticism,
and inflexibly stubborn in holding to a course of action
long after it had failed.
According to the legends of the time, the first months
of Hoover's Administration were a continuation of the
broad and luscious prosperity of the Coolidge era. The
lords of creation were in their pkces; free enterprise was
172 FANTASTIC INTERIM
at its peak of control over the culture, politics, morals,
religion, and amusements of American life. Goodly proofs
of boom times were not lacking. In 1929, $7,500,000,000
was poured out in dividend and interest payments; 24,-
000,000 autos (half of them over eight years old) scooted
across the terrain, 20,000,000 telephones jingled, 12,000,000
radios blared, and nearly $2,000,000,000 was spent on
advertising. Many business indices stood at all-time highs.
Rolling the figures on one's tongue, it seemed that the
enchanted salt mill had begun to grind sugar too, and
that lollipops of the millennium would soon be available
to aU.
Hoover, lover of charts and "findings," should have
known better. When he hymned "our abounding pros-
perity," and prophesied the speedy arrival of the two-car
garage and a chicken in every pot, he was either self -de-
luded or thoughtless. Did not his well-loved charts reveal
that the sharecroppers of Arkansas, the garment workers
of New York, the quarrymen of New Hampshire, and
the fruit-pickers of California along with 60,000,600
other Americans were living exactly the kind of lives
they had always lived; which is to say, lives made bur-
densome by want, disease, malnutrition, and economic in-
security? Did he not know that spectral examples of low
wages could be turned up wherever the investigator
sought them, whether in coal mines, steel mills, or textile
factories? A trip in an open Ford would have shown him
that all New England was dying, that the condition of
Pennsylvania and Ohio coal-miners was pitiable in the
extreme. But the poverty of these regions was as nothing
compared to the gaunt poverty that stalked across the
Southern spinning states. On the day that Hoover was in-
augurated, and Aluminum touched $500 a share, cotton-
mill workers in North Carolina worked eleven hours and
received 20 cents an hour for their labors. King Cotton
JUST AROUND THE CORNER 173
was very sick, but the 2,000,000 human beings who served
his spindles were much sicker and poorer, and were rap-
idly sinking into a condition of unorganized slavery.
In the Loray Mill of Gastonia, North Carolina (and
Gastonia was no better or worse than a hundred other mill
towns), 3,200 cotton spinners worked seventy hours for
a weekly wage of $9 for women and $18 for men. South-
ern Chambers of Commerce, answering inquiries about
manufacturing opportunities, wrote glowing accounts of
the prevalence of cheap labor, describing it as "All Amer-
ican, native, white . . . contented . . . English language
. . . plentiful . . . cheap . , . faithful and efficient . . .
free from outside influence and consequent labor unrest."
The secretary of the Gastonia Chamber of Commerce
could proudly write in 1928: "Children 14 years of age
tan only work n hours a day. Females under 16 are not
allowed to work at night." These workers were not poor
whites; they were self-respecting mountain folk who had
been attracted to the mill towns by stories of "cash
money." And now they were trapped; the spunk was
gone out of them. They lived in squalid company houses,
paid exorbitant prices for food at company stores, were
locked into the factory like prisoners during their hours
of labor, and underwent the awful rigors of the "stretch-
out," a system whereby the worker was obliged to tend
an ever increasing number of spindles. Margaret Larkin
quotes one of the workers as saying:
It used to be you could get five minutes* rest now and then,
so's you could bear the mill. But now you got to keep
a-runnin' all the time. Never a minute to get your breath all
the long day. I used to run six drawing frames and now I
got to look after ten. You just kain't do it. A man's dead-beat
at night
It was more than Americans, even ignorant, confused
Americans, could stand. In 1928 they attempted to strike,
174 FANTASTIC INTERIM
but their unorganized demonstrations were quickly sup-
pressed and the "stretch-out" increased in severity. In
March 1929, a few days after Herbert Hoover delivered
his gaudy inaugural, the National Textile Workers' Union,
a Communist organization, sent Fred E. Beal to Gastonia
to organize the workers at the Loray Mills. Beal was not
interested in changing the economic system; his demands
were strictly of a trade-union character. Listed, they sound
not particularly radical:
1. A minimum standard weekly wage of $20
2. A forty-hour, five-day week
3. Abolition of all speeding and doubling of work
4. Equal pay for equal work for women and youth
5. Decent sanitary working and housing conditions
The strike, called on April i, 1929, lasted until June 7 and
ended in utter defeat for the Loray workers. The millown-
ers, aided by the local newspapers and abetted by the
clergy, succeeded in convincing the community that the
strike had nothing to do with labor conditions in Gastonia,
but was a Communist attempt to overthrow the Govern-
ment of the United States. State troops were called out
to "protect" the factories; strike organizers were flogged
and the families of strikers were evicted from company
houses. In an exchange of shots between strikers and law
officers, a sheriif was killed; Beal, with seven others, was
tried for murder. In a trial that outdid the Sacco-Van-
zetti case for judicial prejudice, all were found guilty.
When the trial ended, the Loray workers went back to
their spindles at the old rate of pay and the former num-
ber of hours. Clearly the fatness of the land was not for
them.
And now once more, the farmers. . . .
For the past decade they had suffered unabating hard-
ship. In 1929 they were breaking up in ruin. All through
the South and the West were empty and dilapidated barns
JUST AROUND THE CORNER 175
and farmhouses, shabby fences, eroded fields, and rusting
machinery. Prices of wheat had fallen as low as winter
temperatures; in ten years the value of farm lands in the
United States had decreased by $20,000,000,000. By 1929
half the American farmers were tenants, the other half
bound fast by mortgages. Unorganized, despairing, and
with the lowest effective income since the time of George
Washington, the American farmer was well on his way
toward peasantry.
Something had to be done, or the farmers, long patient
with Republican do~nothingism, would get out of hand.
In the special session of Congress that assembled on April
1 8, 1929, representatives of agrarian states resolved to find
some way in which the Federal Government might exer-
cise its powers to raise farm prices and prevent huge sur-
pluses from glutting the market The President declared
himself unequivocally opposed to the use of public
moneys to manipulate prices. In his message to Congress
he said: "Certain vital principles must be adhered to in
order that we may not undermine the freedom of our
farmers ... by governmental domination and interfer-
ence." He insisted that "no governmental agency should
engage in the buying and selling and price-fixing of prod-
ucts." But the farm states in their desperation finally
forced action upon Congress, and by the Agricultural
Marketing Act of 1929, a Federal Farm Board was set
up under the chairmanship of Alexander Legge. The
board was authorized to lend money to co-operative or-
ganizations for the storing and marketing of farm com-
modities; Legge was also empowered to buy and seE farm
products in the open market with funds supplied by the
Government. Hoover shook his head gloomily over the
legislation, but was obliged to admit that agriculture could
not continue to drift without some assistance from the
Government.
176 FANTASTIC INTERIM
In a heroic attempt to hold farm prices steady, Legge
bought 250,000,000 bushels of grain at an average price
of $1.20 a bushel. No use. As the flood of grain poured
out of the Wheat Belt into the groaning storehouses, the
price of grain continued to fall. Prices were still falling
when, after a year of dismal failure, the Farm Board dis-
continued its purchases, having incurred a loss of $150,-
000,000, most of which sum fell into the hands of grain
speculators.
The Farm Board had failed for a very simple reason:
It attempted to fix the price of wheat without controlling
the supply. Crop curtailment was absolutely necessary;
the farmers themselves were clamoring for it. Yet such
curtailment of crops was not within the scope of Hoover's
political or social philosophy. "There is no relief to the
farmer," he said, "by extending Government bureaucracy
to control production and thus curtail his liberties, nor
by subsidies that bring only more bureaucracy and ulti-
mate collapse. I shall oppose them."
A familiar refrain, yet it came queerly from the man
who had created a monster bureaucracy in his Depart-
ment of Commerce and who had approved lucrative sub-
sidies for shipping and airlines. The contradiction seemed
queerer yet when Hoover signed the Hawley-Smoot tariff,
which jacked the duties on manufactured goods to fan-
tastic new heights. Just how Hoover could grant huge
subsidies to Eastern businessmen while denying common
aid to the farmers of the South and the Middle West
was a mystery that Republican defenders of free enter-
prise did not feel called upon to explain.
Soon it would not matter what explanations Hoover or
his party might make. For despite the pyrotechnics of
the stock market and the glossy nap on the high hats of
financial tycoons, our whole economic system resembled
a lung riddled with tuberculosis. Although Hoover did
JUST AROUND THE CORNER 177
not realize it, the United States was a walking cadaver.
The prolonged decline of agriculture, inhumanly low
wages, and the weak buying power of two-thirds of the
population had sapped the country's strength long before
1929. With reserves of credit desperately overextended,
our recuperative powers were more shadow than sub-
stance. The collapse of the stock market would be merely
the fatal attack of pneumonia that knocked the victim
flat.
Meanwhile there was, of course, that bright spot, the
New York Stock Exchange.
In November 1928 the month in which Hoover was
elected Wall Street gored all previous records for plain
and fancy trading. Five-million-share days were common;
toward the end of the month, a 7,ooo,ooo-share day was
recorded. Astounding new highs were set; Montgomery
Ward, which six months previously had struggled up to
200, now touched 440. Radio was bringing 400. The
whole market surged upward, mostly on margin. Brokers'
loans were astronomical, but now they were interpreted
as part of the installment-plan philosophy by which Amer-
icans were merely anticipating next year's prosperity for a
small down payment. Hadn't the President-elect said that
poverty was about to be abolished? Lucky profit-gatherers
needed no further assurance. Blithely, they spent their
winnings on shiny new cars, superheterodyne radios, polo
ponies, country-club memberships, penthouses for their
mistresses, and pretentious homes for their families. It was
the Augustan Age of American money-making, and the
soothsayers were confident that the best still lay ahead.
Now and then sinister auguries stalked across the scene*
Early in December, thunder on the left was heard; the
market took a sickening tumble as declines of 25 to 50
points were registered on December 7. .Apprehension
filled the Street. Was it the end? No, the market righted
178 FANTASTIC INTERIM
itself and lurched forward once more. If nervous misgiv-
ings possessed the financial set, if occasionally they glanced
upward at the sword suspended above their heads, there
was nothing they could do about it now. Such at least
was the official attitude of the Federal Reserve Board;
when urged to raise the rediscount rate, and thus discour-
age brokers' loans, the board refused. And for two rea-
sons: first, it feared to precipitate a general crash; second,
a rise in interest rates would make Treasury financing
more expensive, and Secretary Mellon was never one to
pay a quarter of a per cent more than necessary for his
day-to-day borrowings. Yet conscious that some restrain-
ing action was expected (brokers' loans were now $6,-
666,000,000, a sum larger than the amount of money in
circulation in the United States), the board contented it-
self with writing to various Reserve Banks asking them to
"prevent as far as possible the diversion of Federal Re-
serve Funds for the purpose of carrying loans based on
securities."
For its pains, the Federal Reserve Board received a
stinging slap in the face. Charles E. Mitchell, president of
the National Qty Bank, announced that if the Federal
Reserve Board would not lend money to speculators, he,
Charlie Mitchell, would! Twenty million dollars of his
bank's money was offered to brokers at the tidy rate of
15 per cent. At this bighearted gesture everyone took
courage, and the stock market zoomed to new highs.
Woodrow Wilson probably turned over in his grave; the
purpose for which he had created the Federal Reserve
Board was nullified by Mitchell's act. This nullification
continued, grew more brazen, as corporate buccaneers
openly flouted the money-controlling agency of the
United States by advancing "call money" to brokers.
Bethlehem Steel loaned $157,000,000; Standard Oil of
New Jersey loaned $97,000,000 and received $5,000,000
JUST AROUND THE CORNER 179
interest on "call money" during 1929. Huge loans were
made by General Motors and Radio Corporation. Andy
Mellon's Aluminum Corporation managed to scrape to-
gether $40,000,000 for this purpose. Such advances, ag-
gregating the enormous sum of $750,000,000 in 1929,
were known as "bootleg loans/' and placed a dangerous
bulk of money in the hands of speculators. But at the
time this was viewed as "good business," a splendid prac-
tical corroboration of Judge Gary's dictum: "A corpora-
tion is entitled to 15 per cent on its money."
During July and August 1929 the market soared like
a fire balloon, higher and higher into a cerulean Hoover
sky. Occasionally it dipped, even sagged, but always a
fresh gale of buying sent it up again. Groundlings mut-
tered that nothing could live in such a rarefied atmosphere.
But their fears were rebuked by a host of economic au-
thorities, who stated and restated, to the accompaniment
of graphs and indices, that a new economic order was
a-borning, and that the country had better get used to
breathing in higher altitudes.
To those who were inclined to worry unduly about the
unnaturally inflated price of stock, the freshly minted ex-
pression "new levels of value" came as reassuring balm.
The phrase was on everyone's tongue. Bankers larded it
into their discourse when loaning money on palpably frail
security; brokers quoted it to timid investors; and busi-
nessmen nodded approvingly when they heard these
golden syllables at Rotarian luncheons. "New levels of
value" became the open sesame to the cave of the Forty
Thieves. But it was no mere catch phrase; it had been
given a firm philosophic substructure by a learned pro-
fessor, one Charles Amos Dice, Ph.D., pundit of business
organization in Ohio State University. In a weighty opus
entitled New Levels in the Stock Market, Professor Dice
pontificated as follows:
l8o FANTASTIC INTERIM
Stocks have moved from a lower to a higher level which
will be permanent for some years to come. Prices will remain
on a high plane. . . . The tremendous advances made since
1923 have been based for the most part on unprecedented
developments in wealth, in the habits of the people, in mass
production, in efficient distribution, in the attitude toward
investments, and in public confidence. . . . The facts seem
to indicate that we are on a new level or higher plane of
commercial and industrial activity. The market may be con-
sidered the first insistent reading . * . of the new and greater
age for which we have been more or less unconsciously pre-
paring.
And Irving Fisher, Yale business wizard, varied the can-
vass by saying that stocks had reached "what looks like
a permanently high plateau."
Barely had the Dice-Fisher oracles spoken when an omi-
nous series of market dips flashed like chain lightning
across a darkening sky. In September, stocks broke jag-
gedly; conservative opinion warned of impending dan-
ger, but the gambling blood of ten thousand professional
traders could not be cooled. They told themselves that
the market had broken before, and had always risen again.
It would do so now. At least, Mr. Mitchell said so in his
confidence-radiating way. But clouds were gathering that
even Mitchell's sunshiny words could not dispel Marginal
accounts were falling right and left; the whole market was
honeycombed with soft spots; the entire credit structure
of Wall Street, propped up by slender stilts of credit,
buckled and swayed under die hoofs of the dancing bulls.
And then on October 24 ...
At the opening gong, an avalanche of selling orders
buried the machinery of the stock market; frantic tele-
grams and long-distance telephone calls converged on
Wall Street, all shrieking "Sell!" Quaking fear knocked
the props from under the dizzying structure of credit; it
came tumbling down into the abyss, and for a few hours
JUST AROUND THE CORNER l8l
nothing was there to cushion the fall. Even the hardiest
"shorts" ran to cover as the walls of the New Jerusalem
trembled.
While Doomsday threatened, a handful of prominent
bankers met in the offices of J. P. Morgan and voted a
fund of $240,000,000 to support the tumbling market. At
the height of the panic Richard Whitney, then floor op-
erator for J. P. Morgan & Company, later floor-scrubber
in Sing Sing, strode to the steel trading post and put in
a dramatic bid for 10,000 shares of U. S. Steel at $205.
The last previous quotation had been 193%. Whitney's
"college try" temporarily checked the decline, and the
lords of creation assembled in J. P. Morgan's office were
given credit for a courageous and altruistic gesture. Cour-
ageous, maybe; altruistic, not a bit. As the market steadied
momentarily, this litde group of money masters engaged
in a double operation. With one hand, they held up mar-
ket prices with fair bids for key securities; with the other,
they slowly fed into the market vast blocks of stock in
their possession. Four days were required to accomplish
their purpose, and for this length of time they held an
artificial cushion under the market* Then, having saved
their own skins, they stepped aside on October 29 and let
the market plunge to perdition.
On that day a black Niagara broke over the Stock Ex-
change floor. Haggard men stood dazed before clogged
tickers and watched their golden dreams dissolve in the
sizzling acid of panic. Great sections of the market fell
like 'turrets of an iceberg into an engulfing sea. Sixteen
million shares were traded; $30,000,000,000 vanished as
the entire market structure collapsed. The bell that an-
nounced the cessation of trading on that day tolled the
knell of a fabulous era that had departed forever. The
ckcus-day fallacy that national prosperity could be
achieved by jumping through paper hoops of margin and
1 82 FANTASTIC INTERIM
call money came to an abrupt end, and the clowns who
had believed it lay stunned and bleeding on the tanbark
floor.
At first it was hoped that the collapse of the market
would exert no baneful effect on the country at large.
As stocks plunged from 10 to 50 points a day, voices rose
to say that the downward course of stocks had little con-
nection with industry, railroads, and banking; and that
only a few thousand demented paper-jugglers would suf-
fer. This was a notable reversal of opinion; in the boom
days, the argument had been that the market meshed
closely with the actual business of producing and distrib-
uting goods, and that the Stock Exchange played a vital
part in providing funds for business purposes. But now
American financial leaders made a dexterous demivolt.
They declared that stock-market speculation was a de-
tached phenomenon with no bearing on business as a
whole. Confident predictions of quick recovery were
made. The week after the crash the New York World
said:
Although the recent collapse in the stock market was the
greatest in all history there is no reason to believe that it will
bring a major industrial depression in its wake. It may curtail
purchasing power to some extent and also shake the confi-
dence of some business men in the future of trade and indus-
try, but the adverse effect, from present indications, should
have only minor consequences. This is not another 1920.
Mr. Charles M. Schwab, chairman of the same Beth-
lehem Steel Corporation that had pumped $157,000,000
in call money into the market, proclaimed: "The Wall
Street crash means nothing in the welfare of business."
In December President Hoover announced that "the busi-
ness of the country is back to normal." From the depths
of his bland ignorance, Secretary Mellon greeted the peo-
ple on New Year's Day 1930 with the cheery announce-
JUST AROUND THE CORNER 183
ment: "The speculative flurry is over. The nation will
make steady progress from now on."
But the nation was too sick to make progress. As it lay
weak and gasping in the wake of the hurricane, President
Hoover dragged out his favorite pulmotor, the confer-
ence. He summoned manufacturing, transportation, and
labor leaders, and asked them to adopt private measures
for keeping business alive. The Government, of course,
must not interfere. At the conclusion of thfe conference,
the President announced that the employers had promised
"not to initiate any movement for wage reduction." The
promise meant nothing; wages were unmercifully slashed,
falling 62 per cent in the next three years. But at the time
and in conjunction with Hoover's promise that no one
would suffer from hunger or cold it seemed that catastro-
phe had welded together the people and their leaders in
a common fight against the enemy.
Now began that long and tragic travail of depression,
lightened only by the fortitude and forbearance of the
American people the passive victims of a few speculative
butchers. This gloomy truth now appeared: that while
the market's rise had benefited, directly or indirectly, only
a few million people, its collapse had involved the entire
population of the United States. As banks began to fail,
as factories slowed down and unemployment grew mani-
fest, it was apparent that many innocent bystanders were
going to be hurt. The extent of the damage grew slowly
upon the nation, but even as the gloom descended, a
strange aspect of Hoover's character manifested itself. He
commenced that amazing series of public statements which
first attempted to deny that disaster had befallen the coun-
try, then switched to a dogged reiteration that the crisis
had passed. "There is nothing in the situation to be dis-
turbed about"; "The crisis will be over in 60 days"; "I
am convinced that we have passed the worst and that
184 FANTASTIC INTERIM
with continued unity of effort, we shall rapidly recover."
With every Hoover proclamation the country sank deeper
into the quagmire, until at last the White House bulletins
were greeted with derisive laughter.
Meanwhile, despite Hoover's pronunciainentos, ghastly
torments of unemployment, hunger, and cold were rav-
aging the country. Men and women tramped the streets
in search of work, crowded into churches and police sta-
tions seeking relief, stood in lengthening bread lines or
begged at the doors of charitable associations. Middle-
class suburban families, having spent their small savings,
"drew the curtains" and starved in genteel silence. In in-
dustrial towns, the pallor of underfed children and the
despair of jobless fathers grew deeper. Hundreds of thou-
sands evicted for nonpayment of rent straggled from city
to city seeking jobs. Instead of two-car garages, stinking
Hoovervilles of tin and tar paper rose outside large cities.
In Youngstown, Ohio, in the winter of 1930-31, hun-
dreds of homeless men crowded into the municipal in-
cinerator to find warmth, even though they had to sleep
on heaps of garbage. Yet Hoover stuck doggedly to his
policy of governmental noninterference, and urged al-
ready overburdened state and municipal agencies to re-
double their efforts.
During the First World War Hoover had disbursed
$100,000,000 appropriated by Congress for relieving the
misery in Europe. Now, on the basis of sheer hunianitar-
ianism he was urged to make Federal appropriations for
the relief of the unemployed. Such proposals ran counter
to Hoover's ingrained economic philosophy; he bluntly
condemned them as un-American, declared that they
would undermine private initiative and lead to the de-
struction of the American system. "I am opposed," he said
in 1931, "to any direct or indirect Government dole."
He added:
JUST AROUND THE CORNER 185
This is not an issue as to whether people shall go hungry
or cold. It is solely a question of the best method by which
hunger and cold shall be prevented. It is a question as to
whether the American people will maintain the spirit of
charity and mutual self-help through voluntary giving and
the responsibility of local government, as distinguished from
appropriations out of the Federal Treasury. My own convic-
tion is strongly that if we break down this sense of respon-
sibility, of individual generosity and mutual self-help, and if
we start appropriations of this character, we have not only
impaired something infinitely valuable in the life of the Amer-
ican people but have struck at the roots of self-government.
It was admirable as a statement of political philosophy.
But in practice it wasn't working, could not be made to
work. Although Hoover sincerely believed that the sum
of individual effort would overcome the depression, he
did not realize (and has not yet admitted) that the indi-
vidual, no matter how rugged, was powerless to combat
the cumulative and gigantic disaster that had overtaken a
planless society.
Individualism had caused the damage, but individualism
could not cure it.
It is unfair to say that Mr. Hoover was indifferent to
human suffering; indeed, he was highly sensitive to the
plight of his people, and within the framework of his po-
litical philosophy, attempted to mitigate the evils of the
depression. But all of Hoover's measures weje based on
the "shower-of-economic-grace" theory, by which largess
was poured over financial institutions at the top of the
pyramid in order that benefits might percolate down upon
the humbler individuals at the bottom. The shower-of-
grace theory began to be applied as soon, as it became ap-
parent that railroads, banks, and public utilities were feel-
ing the pressure of hard times. To these institutions the
Administration turned with grave solicitude, anxious lest
they dash their foot against some unprosperous stone.
l86 FANTASTIC INTERIM
When, for instance, 166 banks failed in the first week of
October 1931, Mr. Hoover hurried to the home of Secre-
tary Mellon, where in a secret conference with leading
bankers he proposed the organization of the National
Credit Corporation with a capital of $500,000,000 sub-
scribed by member banks of the Federal Reserve System.
The function of this corporation was to rediscount certain
securities, such as real-estate mortgages, that the Federal
Reserve Banks were not permitted to handle. Its purpose
was, in the words of the President, "to assure our banks
. . - that they attain liquidity in case of necessity, and
thereby enable them to continue their business without
restriction of credits or a sacrifice of their assets."
This tender care of the banks continued. Early in 1932
the President requested Congress to authorize the Recon-
struction Finance Corporation with an initial capitaliza-
tion of $500,000,000 provided by the Government. The
RFC was empowered to make loans to any bank, trust
company, insurance company, or building and loan asso-
ciation that was closed or in process of liquidation. Within
two months the Government loaned $235,000,000 to 587
banks and pledged the whole resources of the nation to
maintain the structure of private credit. It was a long
step toward "governmental interference," but Hoover had
to take it. There was no place else to go.
2. The Captains Take to the Lifeboats
As the depression deepened, it etched with painful acids
an unforgettable picture of greed and indifference on the
part of financial leaders. The men who had been most
instrumental in bringing on the calamity suffered least,
or not at all, from its hardships. While wage-earners
braced themselves against the fury of the economic gale,
and uncomplainingly took their pay cuts or lost their jobs,
JUST AROUND THE CORNER 187
incomes in the top brackets held up phenomenally well,
and bonuses to captains of industry were strictly main-
tained. According to Charles Beard, the term "captain of
industry" proved to be a rank misnomer during the de-
pression. Said Beard: "An industrialist can call himself
'captain' only when he feels bound in time of panic and
ruin to divide the last crust with his workers, to share their
suffering and help carry their distress."
Such an equitable sharing of crusts never occurred to
the gold-braided commanders of American finance. Pious
platitudes were thrown to the rabble, but nothing more.
"We have all suffered together," remarked Mr. Albert
Wiggin of the Chase National Bank, but in 1930 Mn Wig-
gin drew an annual salary of $202,000 in addition to a
tidy bonus of $100,000. On top of these emoluments, he
received $40,000 a year from Armour & Company,
$20,000 from the B.M.T. Corporation, $2,000 apiece from
the American Express Company and Western Union, and
so on down to a mere $300 a month from the American
Locomotive Company,
In the depth of the depression (1931) George W. Hill,
president of the American Tobacco Company, received a
salary of $168,000 and a bonus of $850,ooo. 1 The next
year he took a cut; his salary fell to $120,000 and his
bonus was pared away to $705,000. Charles M. Schwab,
chairman of the Bethlehem Steel Corporation, drew a salary
of $250,000 in 1932, 1933, and 1934. During this period,
the average weekly wage in the steel industry was $24.
The depression did not seem noticeably to affect the in-
come of Thomas J. Watson, president of International
Business Machines, who received $60,000 in salary (1932)
and a bonus of $394,015. Charles E. Mitchell had been
receiving a salary of $100,000 a year until 1931. In that
ijn 1930 Mr. HiH received $1,008,000 as well as a stock bonus worth
about $1,275,000*
188 FANTASTIC INTERIM
depression year his salary was doubled. The amount of
his bonuses are not known after 1929, but in that year
he received from the National City Bank and the National
City Company bonuses amounting to fi,i 08,000.* H. T.
Parson, president of the Woolworth Company, abstemi-
ously refrained from drawing a salary in 1932, but man-
aged to scrape along with a bonus of $637,170. In that
year counter clerks fortunate enough to be employed by
the Woolworth Company received an average of $13 per
week. All of which led that ablest of living economists
Paul H. Douglas to ask in 1932: "Whose depression? >r
Whose depression, indeed? There was no depression in
coupon-cutting or in the declaration of dividends. As if
to compensate with added income, for any depreciation
in the paper value of stocks, the great banks and corpora-
tions unloosed a swirling flood of dividends and interest
payments. The following table compiled by the Standard
Statistics Company reveals the heights to which the divi-
dend tide mounted during the so-called depression.
DIVIDENDS AND INTEREST PAYMENTS (1926-1932)
Total Payments Index
Year (in millions of dollars) ( 1926 = i oo)
1926 4*39* 100
*9 2 7 5>S7i I2 9
1928 6,028 137
19 2 9 7>5 8 8 173
193 8,578 196
1931 8,228 187
1932 (close estimate) . 7,000 160
ifo 1929 Mitchell's total income was more than $4,000,000, yet he
paid no income tax that year. Criminal proceedings for tax evasion
were brought against him in 1933; after a trial lasting six weeks he
was acquitted. But the tax authorities brought civil proceedings against
him, and although Mr. Mitchell contested the case for three years all
the way up to the United States Supreme Court, his efforts were in
vain. He was ordered to pay the Government $700,000 in back taxes.
JUST AROUND THE CORNER 189
While these cataracts of cash were pouring from cor-
porate treasuries, Mr. Hoover could be found gnawing
pencils in the White House, vainly attempting to balance
the Federal budget. Fanatically and constantly he harped
on the subject; in twenty-one messages, statements, and
addresses he urged that the budget be balanced as the
''keystone to recovery." The President's solitary contribu-
tion to balancing the budget was to reduce Federal ex-
penditures; apparently it never occurred to him to raise
the tax rate on the incomes listed above. Yet he could have
flooded the Treasury with revenue had he been willing
to lay a modest burden of taxation on th^ upper brackets.
Under the then existing rate, a millionaire with an income
of $50,000 paid only $4,500. By jacking up the income
tax rate 2 per cent, the Administration could have col-
lected $750,000,000. True, it would have placed a wound
stripe on the purses of Wiggin, Mellon, et al., but these
great captains might have survived. E, R. A. Seligman, the
Columbia economist, pointed out that the inheritance tax,
which was producing a meager $22,000,000, could be
made to produce $650,000,000. The maximum surtax on
incomes over $1,000,000 had been reduced under Andrew
Mellon's insistent pressure to 20 per cent; an increase of
10 per cent would have returned more than $500,000,000.
Thus, even a moderate upward revision of taxes levied
on those most able to pay would have assured an easy
$2,000,000,000 and put an end to Hoover's budget trou-
bles.
The President lacked courage, however, to suggest this
course. Instead, he paced the floor of the Lincoln Study
at night, wondering how to extricate himself from the
cruel dilemma in which his class interests placed him. That
dilemma briefly was this: By lifting the tax rate he could
have balanced the budget and relieved human suffering
bv larger Federal outlays. But his financial masters were
190 FANTASTIC INTERIM
clamoring for a reduction of the "unbearable tax burden."
In the scramble for the lifeboats, the financial masters
grabbed all the seats, and the people as usual stood with
the frayed end of the rope in their otherwise empty hands,
3. Peace Porridge Hot
In his inaugural address, Hoover had asserted: "Peace
can be promoted by the limitation of arms. I covet for
the Administration a record of having further contributed
to the advance of peace." In voicing these pacifist senti-
ments, Hoover was swimming with the floodtide of those
who believed that the United States could somehow bring
about world peace, yet dodge the responsibilities of world
affairs.
By 1930 there were in the United States some three
hundred organizations existing for the solitary purpose of
puffing at peace pipes in the wigwam of isolationism an
occupation that bore not the slightest relationship to the
harsh events or hobnailed personalities dominating the
world. Lenient commentators have attempted to justify
our pacifist preoccupation during the 30'$ by saying that
the United States and England (where pacifism was even
more rampant) kept their eyes glued to spiritual objec-
tives and humanitarian ideals. But on close examination
we find that the pacifism preached here and in England
was merely a mask for a frittering, undisciplined, and di-
rectionless way of life. To Woodrow Wilson peace had
been a dynamic charge, a celebration of a world yet to
be born. But on the tongues of Hoover, MacDonald, and
Borah it had degenerated into a babbling prayer, a woman-
ish plaint for the continuation of a world already dead.
Women's clubs and religious organizations elements of
the population least informed about the international facts
of lifewere loudest in advocating peace. Mrs. Carrie
JUST AROUND THE CORNER 191
Chapman Catt, having lost her camisole in the Prohibition
fight, now began tatting doilies of peace. As chairman of
the National Committee on the Cause and Cure of War,
she observed cogently: "There would be no more war if
the Great Powers with their vast armies and navies would
agree to have peace." (Black could be white if it would
only stop being black!) Mrs. Catt then summoned inter-
national feminists "to consult with American women upon
the next step which must be taken toward an international
peace program. Together we shall make an effort to dis-
cover how women can unitedly support the building of
such international machinery as will eff ectively establish
peace." Only the crayon of Helen Hokinson could ade-
quately comment on such obvious broccoli.
The Women's International League for Peace and Free-
dom issued little yellow slips to be pasted on income-tax
reports. The slips read: "That part of the income tax
which is levied for preparation for war is paid only under
protest and duress." In "An Open Letter to a Non-Paci-
fist," Rose Macaulay advised English-speaking ladies that
nonresistance to aggression was the key to the whole busi-
ness. "Things could be made so uncomfortable for a ty-
rant in a country where the mass of the population calmly
ignored him," said Miss Macaulay, "that he might get
pretty tired of jailing and shooting them, and give it up,"
Hitler evidently hadn't read Miss Macaulay's "letter"
when he began his excursions through Czechoslovakia,
Poland, and the Netherlands.
To these feminist lucubrations, the churches added a
few chirping canons of their own. While Manchuria was
being invaded, the United Presbyterian Assembly of
North America was saying: "As followers of the Prince
of Peace, we respectfully submit that the proposed billion
dollar Navy [the legacy of the London Naval Confer-
ence] is reactionary and imperialistic, and certain to arouse
192 FANTASTIC INTERIM
international suspicion, fear and ill-will." A Conference
of the Churches on World Peace, at which representa-
tives of thirty-five communions were present, declared:
War is degrading to our national sovereignty, honor and
patriotism. The Churches should throw the whole weight of
their moral authority into a crusade for winning men's minds
to the conviction that the peace of our country and the world
depends on effectively demobilizing the armed agencies of
death.
We deplore the present Federal expenditure for military
training in high schools, civil colleges and summer camps. . . .
We urge that the citizens' military training camps be re-
organized and renamed without the military element. . . .
We believe that there should be no compulsory military
courses in any civil institution of higher learning. To this ex-
tent ... the national defense act should be revised so that
our Government . . . should no longer aid in coercing school
boys to prepare for battle.
Ha!
The War-Resisters League urged immediate disarma-
ment and the adoption of a Constitutional Amendment
making war illegal. Such an Amendment was actually pro-
posed in Congress. The Peace Patriots pressed strongly
for the abolishment of military training in colleges and
forbade its members to participate in war in any form.
With these and hundreds of similar organizations,
Hoover found himself in Quakerish accord. Ignorant of
the depth and virulence of European hatreds, he regarded
armies and navies as a waste of money and the supreme
menace to. peace. Abolish armies and navies, reasoned
Hoover, and you remove the causes of war. Possessed
by this incredibly na'ive idea, and eager to add a construc-
tive touch to his limping Administration, Hoover seized
the invitation extended by Ramsay MacDonald to take
part in conversations preliminary to the London Naval
Disarmament Conference.
JUST AROUND THE CORNER 193
MacDonald scented danger in the rapid deterioration
of Anglo-American relations. He was shrewd enough to
realize that American "parity" held no real threat to Brit-
ish naval supremacy, and that friendship between the two
countries was infinitely more valuable than a few thou-
sand tons of superiority one way or another. If reasonable
adjustments could not be made between the two great
English-speaking countries, what chance had peace any-
where? Accordingly, MacDonald crossed the Atlantic, sat
on a log with Hoover in his camp by the Rapidan, and
canvassed with him the related problems of disarmament
and closer British-American friendship.
At this point Hoover found himself paddling in deep
waters. Childishly, he had supposed he could settle with
MacDonald all the terms of world naval disarmament. But
now he learned that the size of Britain's fleet depended
not at all on American notions of peace, but, more realis-
tically ', on the size of the combined naval strength of
France and Italy. Britain's vital lines of Imperial commu-
nication passed through the Mediterranean; therefore it
was of paramount importance that it keep its fleet up to
the so-called two-Power level. MacDonald made it clear
that British acceptance of parity with the United States
was contingent upon the preservation of this two-Power
standard, and that the British Navy must be free to build
up to the combined strength of French and Italian sea
power. It therefore became imperative to persuade France
and Italy to reduce their navies. Unless they scaled down,
Britain could not; hence any discussion of disarmament
was academic until France and Italy were consulted. This
was more than Hoover bargained for, but he was obliged
to accede or forfeit that wonderful log-by-the-Rapidan
publicity.
In the French-Italian conversations that followed,
Hoover found himself being thrust still deeper into the
194 FANTASTIC INTERIM
complexities of European politics. Italy, being poor, had
no objection to seeing French tonnage slashed; but
France, justly suspicious of Italian designs on Africa and
Corsica, viewed any paring of its own fleet as dangerous
and unpermissible. Yet France would have agreed to com-
pose its differences with Italy if in turn the United States
ancf England had been willing to grant France the guar-
antee it most desired security against that implacable en-
emy across the Rhine. France, intelligently fearful that
Germany would some day rearm, entreated the English-
speaking nations to join it in a pact that would support
the peace of Europe. But no such guarantee could be
wrested from England or America; both nations were deaf
to the French prayer for security. Consequently, Briand
and Tardieu, the French delegates, refused to meet the
Anglo-American tonnage prescriptions, and bowed them-
selves out of the conference. There was really nothing
else they could do, but at the time they were piously
damned by American and British newspapers for their
"refusal to co-operate in the lofty adventure of disarma-
ment."
Struggling to salvage some scrap of compromise, the
United States, England, and Japan now proceeded to ne-
gotiate a Three-Power Treaty. As usual, the United
States was the loser all round. Japan was determined on
an upward revision of the 5-5-3 ratio and got it. We
agreed to give Japan parity in submarines, which made
Tokyo's Nichi-NicU very happy, for it referred to the
"splendid spirit of compromise of the United States dele-
gation/' The Japanese also received permission to antici-
pate the obsolescence of their destroyers by laying down
new tonnage three years in advance. Japan was permitted
an increase in cruiser strength which further buttressed
its already existing superiority in Chinese waters. After the
London Conference, Japanese shipyards hummed in a ris-
JUST AROUND THE CORNER 195
ing tempo, steadily producing new and powerful types of
combat vessels, spending 40 per cent of Japan's national
income on naval armaments; the United States spent 2
per cent. While England and America foolishly struggled
for naval superiority in the Atlantic, they were noble
enough to give it up in the Pacific. That it was all con-
ceived in a spirit of high internationalism is shown by a
radio talk delivered in London by delegate Henry L.
("Wrong-Horse Harry") Stimson on January 28, 1930.
Said Delegate Stimson:
With the special purpose of reassuring Japan, America . . *
agreed to stop all work on her naval bases in the Orient and
leave them unfinished and unprotected. Nothing could have
shown more clearly that, instead of regarding that great coun-
try [Japan] as a menace, we regard her as a friend and a
stabilizing influence in the Far East that would make for
peace. * * . Japan has responded most cordially to this action.
From the British, as usual, we took the short end of the
stick. Our Navy people felt that we sorely needed heavy
cruisers. But at the British demand (having many naval
bases, Britain was keen on light cruisers) we limited our
heavier ships and agreed to build smaller cruisers armed
with lower-calibered guns. This seeming disarmament
with its resultant economy was hailed with salvos of ela-
tion by a pacifist press. Even this dubious elation was un-
justified, for deep in the London Treaty ky the notori-
ous "Escalator Clause/' which preserved for Britain the
freedom to increase its fleet at any time up to the two-
Power standard. Belatedly, we realized that it would cost
us $1,000,000,000 to achieve supremacy in the Atlantic,
and when this fact burst on the American people a howl
of pacifist rage was heard from Montauk to Catalina.
Such was the famous London Conference. Its fruits
were naval inferiority in the Pacific and theoretic parity
(if we wanted to spend $1,000,000,000, and we didn't) in
196 FANTASTIC INTERIM
the Atlantic. It was neither disarmament fish nor money-
saving fowl. France was isolated, humbled before Italy
and Germany. Japan was gloatingly triumphant. Reper-
cussions were in order, and soon they began to be heard.
4. Dollar Diplomacy with Moratorium Sauce
In the face of growing embroilments with world affairs,
Hoover persisted in the official attitude of isolation. Yet
events were shaping w{iich drew him irresistibly into the
perilous but magnetic field of European finance, so attrac-
tive to American bankers. At long last the Dawes Plan
and Young Plan chickens were coming home to roost, and
they were a sorry lot of fowl as they perched on Hoover's
drooping shoulders.
In 1931 Germany was rapidly swirling into bankruptcy
and political revolution. The flood of American loans had
subsided; the rose-colored debauch of borrowing was over,
and in the early spring days of 1931 Germany declared
that it could not make its annual reparation payments to
Britain and France. Chancellor Briining's budget was
gravely unbalanced, and 7,000,000 Germans were on the
unemployment dole* Hitler was coming fast now. He was
telling the German people that they were fools to carry
the galling chains of Versailles and that he would lead
them to release and vengeance. And the people were heed-
ing his words; the National Socialists had made gains of
25 per cent in the recent Reichstag election. Communism,
too, was rising, and the race for control of the Reich had
narrowed down to a struggle between Communists and
Nazis. Fighting to escape the doomed impasse, the Brim-
ing Government now turned to the Reich's greatest cred-
itor, the United States. By tying itself to American high
finance, Germany hoped both to forestall internal collapse
and to avoid a second occupation by France.
JUST AROUND THE CORNER 197
The German plan was well conceived. It traded
shrewdly on the fears of American bankers that their huge
loans of $2,500,000,000 were in peril. British bankers had
a like sum invested in Germany; if the Reich went into
bankruptcy, these loans would never be repaid. To guar-
antee the principal and the interest on this vast private
indebtedness, the Reich must be kept solvent if possible.
Briining first made representations of this nature to the
British Prime Minister during a social week end at Cheq-
uers. By the bankers' grapevine, the news was conveyed
to the ears of Andrew Mellon, who "happened to be va-
cationing in England." Financial history was now in the
making. Mellon communicated with the President, told
him that the American short-term loans stood in great
danger. Gold was draining away from Germany's cen-
tral banks, and unless prompt steps were taken to check
the financial collapse, nothing would be left for Ameri-
can creditors.
The dilemma of Hoover's international position was
now sharply revealed. Politically, he was isolationist; like
Coolidge, no entanglements. But financially, Hoover was
obliged to be strongly interventionist. To save the Amer-
ican short-term loans, he conceived the idea of declaring
a moratorium on all international debt payments. Together
with Ogden Mills and S. Parker Gilbert (the Morgan
partner who had been Agent General of the Dawes Plan),
Hoover prepared a lofty document calling for the sus-
pension of international debts. Dramatically Hoover flung
his proposal into the boiling European crisis, and for a
single day it seemed that a miracle had taken place. The
German credit tension eased; the gold run stopped.
Hoover was hailed in the United States and England as
a giant of moral stature, and the story goes that he smiled
for the first time in two years.
But his smile was wiped off within twenty-four hours.
198 FANTASTIC INTERIM
With his usual gaucherie in handling foreign affairs,
Hoover had neglected to inform France of his intention.
The President's announcement came as a shock to the
French, who saw all too clearly that for the sake of sav-
ing American private loans, Germany had been permitted
to slip free, not only from reparation payments, but from
the special clause in the Young Plan which called for a
noncancellable $100,000,000 annual payment to France.
Deeply insulted by the method as well as the content
of Hoover's proposal, and more fearful than ever that
Germany was now loose in Europe, the French Govern-
ment pondered its course. For seventeen days it pondered,
and when at last it signed the distasteful contract that
Hoover had thrust into its hand, the moral eff ect of the
moratorium was destroyed. The run on German credit
was renewed. Deep apprehension filled Europe as the
Reich staggered onward to economic destruction, default-
ing payments to all its creditors on the way downward.
American financial intervention had failed; the repercus-
sions were terrific. American bonds were defaulted; repa-
ration payments went uncollected; England slid off the
gold standard, with ruinous effects on American economy.
In October 1931, 522 banks failed in the United States.
The hoarding of gold became rapacious, universal. Ten
million unemployed wandered across the United States.
The depression deepened, grew world-wide. . . .
And now Hitler came closer to power. With satisfac-
tion he had watched the cleavage between England and
France grow deeper, more painful. Now he saw France
rebuffed and split off from the United States. All Europe
was falling into segments easier for him to devour. At
home he watched the fury of economic panic breaking
over Germany. Soon the great landlords and industrial-
ists, fearing the upsweep of Communism, would join
hands to sweep the Brown Shirt leader into a Chancellor-
JUST AROUND THE CORNER 199
ship that would spell the end of reparation payments^
Dawes Plan, Young Plan, Hoover moratorium, and Ameri-
can bonds. From that time forward, it would be govern-
ment by despotism, and rue to the world.
The American public knew or cared little about the
advent of Hitler or the private financial entanglements
that were binding us to Europe. There were more impor-
tant things to think about. The Starr Faithful case was
screaming in the papers, Amos ? n Andy were nightly
amusing the radio faithful with their black-face harlequi-
nade. A whole new set of fads and crazes, including the
bunion derby and miniature golf, swept over the land-
scape in fleeting commentary on the emotional instability
and shallow mentality of the people. If America was ever
to come of age, the grim year 1931 would have been a
good time to begin. But no sign of adulthood appeared
anywhere. Rudy Vallfee crooned "Life Is Just a Bowl
of Cherries," but swarrns of panhandlers shuffled along
the streets mumbling the refrain of the year's theme song:
"Brother, Can You Spare a Dime?"
5. Just a Japanese Sandman
While American dollar diplomacy was tying itself in
knots on the continent of Europe, there suddenly devel-
oped in the Far East a crisis that revealed the impotency
of the League of Nations, and should have indicated to
the United States the fatal consequences of our pacifist
sleepwalking. On September 18, 1931, Japanese troops
seized Mukden and other important centers in South
Manchuria, taking possession of railroads, telegraph lines,
and radio stations on the pretext that a railroad bridge
inside the Japanese concession had been destroyed by Chi-
nese bandits. It was a full-size aggression, skillfully and
systematically prosecuted in classic Japanese style. When
200 FANTASTIC INTERIM
the news broke in the United States, the Japanese Am-
bassador, Mr. Debuchi, carefully explained that some hot-
headed Manchurian generals had acted without orders
from the civil government. In true country-cousin fash-
ion, we believed this tale and based our ineffectual policy
during the next months on the assumption that the rape
of Manchuria was a militaristic coup which the Imperial
Japanese Government would disclaim.
At Geneva, China appealed formally to the League of
Nations. The League saw in the incident an excellent op-
portunity to increase its prestige, and the usual notes were
sent to the aggressor nation by the assembled Council.
Japan paltered, delayed, and made counteraccusations
against China for a month, meanwhile strengthening its
hold on Manchuria by military force % The issue was
clearly drawn; now, if ever, the League felt impelled to
launch its strongest ultimatums against Japan.
It so happened that the collaboration between the
United States and the League was closer in 1931 than at
any previous time in League history. For we too had a
direct interest in the Manchurian contretemps; Secretary
of State Stimson judged it to be a major trial of strength
for the Kellogg-Briand Pact. He instructed our unofficial
observer, Mr. Prentiss B. Gilbert, to discuss the applica-
tion of the Kellogg-Briand Pact, should the League in-
vite him to do so. Thus for the first time the League of
Nations and the United States were acting in partial con-
cert with a view to curbing Japan.
To this half-concert of nations Japan paid scant heed.
Having overrun South Manchuria, Japanese arms now ex-
panded into North Manchuria, and soon the entire prov-
ince lay under the domination of Tokyo. Three months
more elapsed, and the League, weary of sending puny
missives, looked to the United States to hurl strong thun-
derbolts against Japan. But such was not the intention of
JUST AROUND THE CORNER 2OI
Secretary Stimson or President Hoover. On November 5,
Stimson sent a "strong document" to Tokyo, which the
Japanese politely disregarded. It was the old Nipponese
tactics of the knee in the groin, followed by "So sorry.
Our military party cannot be controlled."
By now the impotency of the Kellogg-Briand Pact and
the utter futility of the League of Nations were clearly
revealed. Unimplemented by military action, their spine-
less ukases were mere static when they reached the Pacific.
Japan flouted both the Kellogg-Briand Pact and the League
with impunity, and squatted unchallenged on the richest
province of China.
When the comedy had played itself out at Geneva,
Hoover took over the action at Washington and brought
the United States to new lows of pathetic pacifism. After
admitting that "the offense against the comity of nations
and the affront to the United States were outrageous,"
Hoover tamely concluded by saying: "But neither our
obligations to China, nor our own interests, nor our dig-
nity, require us to go to war over these questions." The
semifinal act in the great Manchurian fumble was the Pres-
ident's refusal to apply against Japan the economic sanc-
tions suggested by the League. "Dangerous, might lead
to war," Hoover explained timidly.
Hoover was in good tradition when he sidestepped
sanctions against Japan. Twenty years before, Theodore
Roosevelt had said: "As regards Manchuria, if the Japa-
nese choose to follow a course of conduct to which we are
averse, we cannot stop it unless we are prepared to go
to war, and a successful war about Manchuria would re-
quire a fleet as good as that of England plus an army as
good as that of Germany." Gazing at our wooden-wheeled
Army and our rowboat Navy in 1931, no one can blame
Mr. Hoover for fearing to precipitate a war with Japan.
As President he had the clear alternative of keeping quiet
202 FANTASTIC INTERIM
on the subject of Manchuria, or strengthening the flaccid
muscles of our military. He did neither. Instead, from
the depths of his peace-loving nature, he extracted (with
the active help of Secretary Srimson) the weird notion of
"nonrecognition." In the face of an accomplished military
fact, Hoover deckred that the United States would not
recognize Japan's tide to territory annexed in violation
of the Kellogg-Briand Pact! In this naive statement, ap-
plauded at the time as a moral thunderbolt, he was joined
by fifty-nine other nations, eager for a face-saving for-
mula which cost nothing and meant less.
In no visible manner, however, did the world's lack of
recognition affect Japan's enjoyment of its conquest. The
invasion of Manchuria was merely another stepa big one
in Nippon's design of Asiatic conquest at the expense of
China, England, and the United States.
6. Flagpoles, Love, and Crime
While Europe disintegrated and China lay bleeding, we
had become a nation of flagpole-sitters. The craze was
started by "Shipwreck" Kelly, a daredevil who went from
city to city giving endurance tests and sucking up sweet
publicity. Baltimore was particularly enthusiastic about
this sport; it kept the children occupied. Avon Foreman,
aged fifteen, mounted a flagpole and sat on an ironing-
board for ten days, ten hours, and ten seconds. This so
stirred the imagination of Baltimorons that four thousand
of them assembled to watch the end of his triumph. A brass
band gathered and gave music. When Master Foreman
descended he was hailed as a conquering hero; the Mayor
of Baltimore presented him with a diploma praising his
"grit and endurance/' calling it "the old pioneer spirit of
America/ 3 His fame was short-lived, for the "Junior Flag-
pole Sitting Championship" was shortly captured by
JUST AROUND THE CORNER 203
young Jimmy Jones. Soon boys and girls all over Baltimore
were sitting on poles, and the city became an eyrie of
Stylites. At one time twenty-five sitters were competing
for the record. City engineers issued specifications for the
type of pole to be sat on, businessmen bought space on
poles to advertise their products, and the city charged a
license fee of $i to all sitters. Offers of free dentistry for
pole-sitters poured in. And beneath the perch of a pious
child who had taken the Holy Bible tip with him, a min-
ister performed religious services.
The present being so dreary, thousands tried to peer
into the future. Fakers found fat forage, as astrologers,
palm-readers, and ball-gazing phonies flourished. Astrol-
oger Evangeline Adams, descendant of John Quincy
Adams, could number among her steady clientele J. P.
Morgan, Seymour Cromwell (former president of the
New York Stock Exchange), Eva Le Gallienne, many
United States Senators and high-ranking business execu-
tives, as well as humbler persons. "Stay in bed during April;
don't make a move until you hear from me, n advised Miss
Adams at $20 an interview. Every conceivable kind of cult
was foisted upon the public. In New York City and Phila-
delphia members of the New World Water Cult sat in
hot water with cold towels around their heads concentrat-
ing on difficult questions for the Water Master to answer.
It was all quite puerile, but after all, one just couldn't sit
home and get to feeling blue about Hoover's unbalanced
budget and all those unemployed people, could one?
A passkey to the collective mind of America was pro-
vided by the radio. From sunup till long past midnight the
ether was loaded with commercials as vulgar as a gold
tp9th Into the ears of 70,000,000 listeners vast networks
pumped tons of sewage daily, pausing only for station
identification and advertising plugs.
204 FANTASTIC INTERIM
7. It alls cope (Radio}
Mornings at seven, and in the bright firework hour the
radio voices start: "Time to get up, Mr. and Mrs. America.
This is Brightie Real, your Klutchless-Krotch Shorts host-
ess, bringing you your daily dozen to keep you and yowr
underwear -fit as a -fiddle. Slip into your Klutchless
Krotches and touch your toes, i, 2, 3, 4 . . ." Awakened
America listens to industry sing, coo, and caper all day.
"Jelo-Pud, the split-second dessert 'with the EXTRA tremble,
bringing you a half -hour of hi-de-ho vo-de-o-do 'with the
Catseloma Panthers. , . Cigarette smokers, do you suffer
from raw, untoasted tobaccos? . . . Catting all women,
calling all women. . . . To Glotzheimers, the corset shop
for shattered shapes. Drop in for a postnatal consultation.
And now Glotzheimer's reporter brings you more news.
Twenty-four thousand flood refugees are stranded on the
banks of swirling Of Man River as Red Cross workers
rush hot coffee and typhoid serum to the scene of the
disaster. That is all. . . . Go to your drugstore and buy
double-strength Blisterine, the thirty -eight-ingredient
germ-killer that checks horrid interior odors right at their
source. * . , Use, use, use, buy, buy, buy. . . . Just a cot-
tage small by a waterfall. . . . Are you regular? No?
Then try Jiffy-Lax, the spiff y, controlled cathartic, and
not too cathartic either, but ju-u-st soo-othing, ge-entle
and oh, so mid. . . "
At her morning chores, Mrs. America lends half an ear
to the endless maze of soap operas: "We left Ronny and
her husband, John, searching desperately for the sputum-
bottle lost by Elmer, Ronny's ex-sweetheart, whose leg has
been amputated because of a train accident in which he
has saved Ronny's mother-in-law Bess, who is in league
with the train conductors' union to defenestrate the presi-
dent of the railroad" . . . Comes the Children's Hour
JUST AROUND THE CORNER 205
with its educational -fairy tales and that whale of a sales-
man, Uncle Ben, pushing Sloggers' Krispy-Pap right down
the throats of the little ones. "New what will Dick do
with his baby sister who is a hostage to the underground
factory workers of the Planet Venus? Will the Flying
Phantom help Dick again? Tune in tomorrow at this same
time to hear what happened to Dick in this thrilling serial
brought to you by Sloggers* Krispy-Pap, the younger gen-
eration's breakfast food. Tell Dad and Mom to be sure
to buy Krispy-Pap in the extra-big, dustproof, trick-
opening package."
Now evenings at seven. In urbia and suburbia alike, the
family gathers in the living-room to listen to the really big
programs, the name variety shows, the quizzes, courts of
the air, and other perfervid compost. . . . "Blatz Beer
brewed in the new octagonal > space-saving can brings you
those amazing cyclopedias of fact and information, the
Problem Children, in an educational hour of questions and
answers. . . * And now, Mrs. Skiropopolos, our advice to
you is to leave your husband, take your six children some
place far away and start life anew until such time as your
husband can prove himself worthy of your confidence
and affection. . . ." "Mr. Smithers, ah sho am compressed,
yes indeedy ah sho am dejecticated by not havin* got so
?mich as ah aint outa this here garage business. Yassuh.
. . . Good evening, folks. It's your Three Stooges of the
Air^ Torn, Nom, and Glom y with you again for a slap-
happy hour of fun, through the courtesy of the Gigantic
Steel Corporation of the United States. . . ." Or if ifs
Sunday night: "We are honored to -present to our radio
audience the Gigantic Symphony Orchestra, under the di-
rection of the distinguished Dutch conductor Gambrinus
van Glockaerts, fresh from his triumphant engagement in
the AmsterdoTnmer Musikerspielhaus. Take it away, Maes-
tro. . . ."
206 FANTASTIC INTERIM
In their pitiful infantilism, the people clamored for fairy
tales, and yearned in particular for stories that recounted
in sugar-tit accents the wondrous pleasures of love. The
emphasis on love amounted to erotomania; love became
the governing phantasy of the age, the avowed and overt
end of millions of lives. Men and women were obsessed
by the shimmering image of what they believed to be due
them in love, and shrewd exploiters of the national appe-
tite kept the vision whirling erotically before their audi-
ences. Love was gelatinized by the movies, crooned by
crooners, moaned by torch singers, pureed by women's
magazines, and blatted by saxophone players. Hollywood
pre-empted the theme and gave it such a blinding polish
that the eyes of the people were a-dazzle with the possi-
bilities of romance possibilities difficult of attainment out-
side the magic garden of a $500,000 movie set. The pop-
ular songs were dolorous for one more kiss in the dark;
eight hundred novels a year described the tortuous paths
by which one man and one woman (or better yet, one
woman and two men) won the right to enjoy eternal
ecstasy with each other. The infantile clamor rose in vol-
ume, as the mirage of happy-happy love irresponsible, im-
mature, mythical, and poisonous beckoned the people on-
ward to taste romantic delights that had a peculiar way
of turning from nectarines to ashes at the first nip of
frosty reality.
The glittering coins of speech once used as counters in
the Provencal love game were now debased with plebeian
copper, and a mutilated jargon of the love courts issued
from the mouths of persons who had neither the wit to
understand what they were saying nor the psychic balance
to take the consequences. "I love you" a statement diffi-
cult for a mature person to make, so far-reaching and im-
portant are its connotations was now blubbered, groaned,
and whined by millions of persons who were emotionally
JUST AROUND THE CORNER 207
incompetent to utter the words, to say nothing of basing
their lives on them.
Observing the frenzied quest for love and the miserable
substitutions we were obliged to accept, could one doubt
that there existed a grave blockage between America's
sources of sexual energy and their outlet in private happi-
ness and racial health? The mounting tides of insanity,
suicide, divorce, and homosexuality proved it. Frustrated
on one hand by a rigid code of puritanic morality, yet on
the other hand mercilessly incited to dream satisfactions
by every instrumentality of the age, American men and
women developed neuroses so grave and so prevalent that
their incidence was one of the most alarming features of
the time. Severe psychological maladjustments increased.
Incurable manic-depressive psychoses and schizophrenia
had nearly doubled in frequency since the war; half the
hospital beds in the United States were now occupied by
the insane. Statistics showed that the chances of a child's
developing an incapacitating mental disorder during his
lifetime was i in 10; his chances of ending up in an insane
asylum were i in 20. The suicide rate had soared 33 per
cent in ten years. In 1930 Americans were going crazy
more rapidly, and killing themselves more furiously, than
any people on earth.
It was the fashion to blame these agonies of insanity and
self-destruction on the depression, and to say that the
human heart and nerves could not successfully combat the
insecurities of life. This was partly true, but the real de-
pression that thrust men down into pits of insanity and
suicide was not economic. Rather, it was the gloomy, mor-
bid, and cumulative freight of guilt laid on the organs of
love by an ugly and sadistic society.
The repressed sadism of the American people was
brought to the surface in a poisonous froth by an event
208 FANTASTIC INTERIM
which happened on the night of March i, 1932. On that
date the infant son of Charles Lindbergh and Anne Mor-
row Lindbergh was kidnapped from his crib, and was
never seen alive thereafter. The ensuing paroxysms of cru-
elty and vulgarity brought into clinical relief the morbid
hungers of the race. A crime which should have been ex-
pediriously solved by scientific police methods (and only
when these methods were introduced was the kidnapper
found) became a nation-wide emotional debauch, enabling
the primitive lusts for torment and murder to find vicari-
ous outlet*
From the beginning, the case was an object lesson in
archaic police methods. The first officials on the scene
were the New Jersey State Police, who dashed up on
motorcycles in their handsome uniforms. Not one of them,
apparently, had ever heard the first theorem of criminol-
ogy U A11 criminals leave traces" and after an orgy of
heavy-footed floundering, they succeeded in obliterating
every footprint left by the escaping kidnapper. Further-
more, their clumsy fingers handled the kidnapper's ladder
with such superb gaucherie that every fingerprint of the
criminal was overlaid by ten fingerprints of perspiring
cops. Had they behaved this way in France (where Ed-
mond Locard had long ago established scientific methods
of crime detection), they would have been summarily dis-
missed from service. But now their work was completed.
Having destroyed all possible clues in a brief half-hour,
their efforts during the remainder of the case were con-
fined to holding back swarms of psychopathic curiosity-
seekers who now belched forward in motorcars.
The ghastly details of the case need no recounting.
Cranks, perverts, and underworld characters joined hands
with official cretins in a macabre dance around the empty
crib of the abducted child. The distracted father, coldly
cursing the inefficiency of police officials and tormented
JUST AROUND THE CORNER 209
beyond endurance by the baying of reporters, personally
tracked down every reasonable clue. Victimized and mis-
led by such weird characters as Gaston B. Means and
John Hughes Curtis, Lindbergh kept lonely assignations
in fogbound boats and pursued in desperation every fake
wisp of hope. Finally, they brought him his child, mangled
and murdered, who had lain the while in a thicket barely
six miles from his nursery. With all their tooting motor-
cycles, the police had not found the body. Ironically, it
was a Negro truck-driver, alighting to urinate in the
bushes, who discovered the pitiful corpse.
Twenty-eight months later Bruno Hauptmann was
picked up for passing a $10 bill from the ransom money,
and was convicted of the kidnapping, chiefly on the sci-
entific testimony of Arthur C. Koehler, a wood expert of
the United States Forest Products Laboratory at Madison,
Wisconsin. Koehler literally wrapped the kidnap ladder
around Hauptmann's neck. But apart from Koehler's tes-
timony, the trial was another of those Tyburn Hill spec-
tacles so dear to the press and the public. The newspapers,
especially the tabloids, threw an epileptic fit of frothing
sensationalism; sicker, journalism could not become. After
the trial, Lindbergh was obliged to flee the country to
escape the hounding persecution of newshawks and pho-
tographers. The press would not, could not, leave him
alone, and Lindbergh's anger at the invasion of his privacy
laid the basis of his later unpopularity.
The Lindbergh case thrust into bold relief the enormity
and extent of the crime problem in the United States. The
fact that Lindbergh had been forced to dicker with rep-
resentatives of the underworld while law-enforcement
agencies stood helplessly on the sidelines brought exclama-
tions of dismay from decent citizens. Educators, clergy-
men, editorial writers, asked: "How sinister and powerful
210 FANTASTIC INTERIM
are the criminally organized elements of society?" An-
swers to this query were supplied by various investigating
commissions. The findings of the American Bar Associa-
tion placed the annual cost of crime at $13,000,000,000;
a survey made by the Manufacturers* Record estimated it
at $12,000,000,000. In 1931 the New York Crime Com-
mission estimated that the total annual cost of rackets and
organized crime reached the astounding total of $18,000,-
000,000 a figure six times the national budget. Or, as
Martin Mooney put it: "Add up the yearly income of
General Motors, U. S. Steel, the Hearst papers, Radio Cor-
poration of America, the National City Bank and twenty-
five other large and powerful business enterprises of the
country and you have a little over half of what crime
and racketeering earmark for their coffers each year."
Obviously, criminal operations had altered both in kind
and in magnitude since the First World War. No longer
could crime be discussed in terms of the lone-wolf burglar,
the pickpocket, and the second-story worker. A new order
of criminals had sprang up; the small-time crook had been
supplanted by organized racketeers and nation-wide syn-
dicates, which were boldly overriding the law-enforce-
ment agencies of the country and undermining the social
structure of the United States.
These monstrous, antisocial growths, spawned by Pro-
hibition and irrigated by the lush "easy-money" psychol-
ogy of the Coolidge boom, were now breeding thickly in
the deep fissure of social confusion. Into this fissure great
sections of the population had been permitted to fall. Piled
helter-skelter at the bottom of the gulf were the foreign-
born, the Negro, the psychically unfit, and the econom-
ically disinherited. But here also, more numerous and more
disturbing to behold, were countless victims of the prevail-
ing American philosophy that "Only saps work"~pitiful
subscribers to the theory that it was both possible and
JUST AROUND THE CORNER 211
smart to take a short cut to the "big money" via the crim-
inal racket.
What was this ugly fallacy, if not an ironic adaptation
of the grand illusion that every American had the right
to be rich, powerful, beautiful, well married or often
married, socially active yet somehow leisurely a compos-
ite, in short, of the attractive figures seen in the films, the
advertising pages, and the rotogravure sections of the
Sunday papers? Scorning a miserable destiny of hard work
that yielded only the bare necessities of existence, increas-
ing numbers of emotionally unbalanced and economically
embittered individuals turned to crime. The diamond ring
and the armored car of the gangster, the worshipful pres-
tige accorded to the big-shot racketeer, the silk lingerie
of the gun moll, the penthouse of the fake stock operator,
and the dicers' overt contempt for all that was honest
and prosaic in society these, and the need for these, were
by-products of a maddening system that tempted its weak-
minded victims beyond endurance by suggesting, no, by
insisting, that everyone in the United States was entitled
to the soft raisin buns of life. There were not enough
raisin buns to go around legitimately (there never were,
there never will be), so they were snatched at anyway by
fingers that had been encouraged to itch for them, and
to be unsatisfied with the dry crusts of existence.
As a result the United States was getting exactly the
kind and the quantity of crime it deserved. No such crime
situation existed in France or Germany. A French farmer
knew he would always be. poor, and a German shop-
keeper realized that his tiny Geschaft would never yield
him more than a mere livelihood. But Americans, confident
that the Cinderella-Hollywood myth would come true
without any great amount of hard work, innate ability,
or expensive training, blew rosy bubbles in the scented
murk of romance. And when the bubble collapsed, as it
212 FANTASTIC INTERIM
inevitably did, poisonous antisocial emotions of chagrin,
envy, and resentment were generated in the American
blood stream. It was but a step from these emotions to the
psychically soured, antisocial activities of the criminal.
Nor was there any likelihood of an abatement of crime
until Americans refocused their dream lenses and examined
again the realities brutally competitive, harshly indiffer-
ent, edged and predatory of life in the United States.
This fundamental re-examination was not likely to be
made. (Ask the Australian bushman to give up his nose
ring, but never, never ask Americans to give up their
something-for-nothing hallucinations.) Yet if we were un-
willing to eradicate the roots of crime, we might at least
have attempted to repress its symptoms. But even here we
failed miserably. As Raymond Fosdick said: "With all
allowance for the peculiar conditions which make our task
difficult . . . it cannot be denied that our achievement
in respect to policing is sordid and unworthy. We have
made a poor job of it."
Given the prevailing setup, how could it be otherwise?
How could the flat-footed roundsman prevail against
the Invisible Mind that took toll from every truck loaded
at every pier in New York City? How could a precinct
captain, check the flood of beer rolling into his district?
He took his cut of 50 cents a barrel and let it roll. If an
ambitious district attorney attempted to screw down the
lid on the vice ring, he was informed that the ring had
photographs and letters (genuine or otherwise) that would
prove most embarrassing should they fall into the hands
of a tabloid editor. And so the whole ineffectual system
revolved on the pivots of intimidation, bribery, and, if
need be, murder. Police departments confined themselves
to catching juvenile tire thieves or handing tickets to
speeders, while racketeers in league with high-placed offi-
cials collected tribute on every egg, artichoke, hamburger,
JUST AROUND THE CORNER 213
chicken, bottle of whisky, and keg of beer delivered or
consumed in their kingdom.
Oppressed by the futility of it all, local police depart-
ments deteriorated shamefully. The archaism of police
methods and the low caliber of police personnel were
notorious. Although the pioneer work of Goddard in bal-
listics, Osborne in questioned documents, and Koehler m
wood products showed that scientific evidence actually
could convict criminals, these laboratory methods were
scornfully disdained by the tipstaff constabulary. The
Keeler polygraph, commonly known as the "lie detector/ 5
had proved itself in thousands of laboratory tests as an
effective and painless method of extracting confessions
from criminals, but this scientific device was contemptu-
ously rejected by police officials still wedded to the third
degree. When lynx-eyed departmental sleuths found them-
selves baffled by a crime, they abandoned the arduous job
of running down objective clues and pounded diligently
upon the suspect's skull until he "came clean." Rubber
hose, which left no incriminating marks on face or body,
was the favorite weapon of the confession-snatchers. By
the "cold-turkey" treatment the prisoner was submerged
in an icy bathtub until nearly drowned. A modern police
torturer in an Eastern city never permitted his prisoner
to go to the lavatory until he had first purged his guilty
conscience in the confessional. Another refused drinking
water while a cold-water tap was kept running in the
room. It was discovered that a telephone book could knock
a man senseless yet leave no mark on his head. Therefore
telephone books were in great demand at police headquar-
ters.
Superimposed on the ignorance of policemen, and their
noticeable attachment to the practices and instruments of
antiquity, was the fantastic in-co-ordination of law-enforce-
ment agencies throughout the United States, Thirty-nine
214 FANTASTIC INTERIM
thousand separate and independent police departments, in
3,000 cities, 16,000 incorporated municipalities, and 20,000
townships, were all making uncorrelated efforts to combat
crime. The result was a patchwork sieve through which
criminals in high-powered cars easily slipped to freedom.
Individual communities were so jealous of their "police
power" that until the passing of the so-called Lindbergh
Law, a Federal officer was not permitted to carry a pistol,
and was obliged to obtain a local warrant in order to arrest
armed desperadoes who had terrified the inhabitants of
half a dozen states,
Out of this welter of in-co-ordination and inefficiency,
arose the need for a centralized, modern, and highly expert
corps of law-enforcement officers. Both the material and
the esprit of such a corps existed in the Federal Bureau
of Investigation, headed by J. Edgar Hoover. At a time
when local authorities were surrendering in despair to the
wave of bank robberies and kidnappings, Hoover and his
"G-men" took over. Incorruptible, fearless, and drilled in
the latest techniques of criminal detection, they inexorably
tracked down every gangster, kidnapper, and extortioner
that dared show his head above the village horizon. FBI
men were not only crack shots and ruthless trailers; they
were also lawyers and public accountants. They knew
the type of evidence that must be secured to make a case
stand up in court; they could examine the books of a bank
or a corporation and put their finger on false entries and
defalcations. This small band, numbering about seven hun-
dred men, roved the countryside on daring missions of
law enforcement; terrorizers of the peace fell in swathes
before them. Dillinger fell, and Pretty Boy Floyd was
mowed down; the G-men rounded up Public Enemies i
to io, then started all over again.
But although the FBI was efficient and hard-working*
It could not change society, nor pluck out the stubborn
JUST AROUND THE CORNER 215
roots of crime. It could mace a berserk bank-robber or
trip up a not-so-wily extortioner; it could take Alvin
Karpis "alive" and put Baby Face Nelson where he be-
longed. But these picturesque banditti were merely ginger-
bread figures for the newspaper public to munch at. The
real masters of the crime syndicates pulled no guns, robbed
no warehouses, kidnapped no rivals. Usually, their names
were never known; even if taken into custody, astute
criminal lawyers "sprung" them on writs that the average
citizen never heard of. Invariably their trails disappeared
into that shadowy region where crooked politics merged
into billion-dollar crime. Now and then an outraged re-
form government would stage a showy prosecution; a few
racketeers would go to the penitentiary, but their places
at the public trough would be taken by other equally
vicious products of a culture that was breeding too many
maggots.
To relieve our wounded sensibilities, we blamed the
maggots and steadfastly refused to do anything about the
decay that produced them. At the bottom of the much-
discussed "crime problem" grinned the enormous lag, op-
erating with a social vengeance. But instead of closing the
gap, instead of bringing education, economics, politics,
and criminology abreast of social conditions and economic
facts, we merely built bigger prisons and bigger insane
asylums. Boys continued to fester in "cellar clubs" and
girls ran away from depression-ruined homes while penol-
ogists delivered knowing lectures on recidivism and clergy-
men descanted piously on the decline of morality.
It was like sprinkling talcum powder on a cancer. It
was senseless, pharisaical, obscene, and expensive but in
1930 that was the way America chose to handle its crime
problem. The results were exactly what might have been
expected: The state was obliged to carry an ever increas-
ing burden of criminal misfits, the taxpayer paid higher
2l6 FANTASTIC INTERIM
taxes for the upkeep of penitentiaries, and the youth of
the nation continued to crawl like cockroaches out of the
rotten woodwork of society.
To the average male citizen, the ominous rise in juvenile
crime was apparently a matter of small concern. But what
about the feminine half of the electorate? What measures
had the women of the United States taken against crime
since their enfranchisement by the Nineteenth Amend-
ment? One of the chief arguments in favor of woman suf-
frage had been: "Women voters will become the special
protectors of youth. Under the wise and tender care of
women, social abuses affecting minors will be wiped out,"
etc., etc. Splendid the promise and high the hope, but to
one scanning the record, it appears that the social achieve-
ments of the woman voter had amounted to a microscopic
nothing-at-all! Now and then a breast-beating Boadicea
like Dorothy Thompson sounded off about political or
social evils, but the long-awaited touch of feminine influ-
ence had yet to be felt in social legislation and reform.
The girls just hadn't come through.
This failure seems the more strange when one considers
that American women, in addition to wielding a ballot,
also possessed in their own right nearly half the wealth of
the country. They owned $20,000,000,000 worth of stock
in American corporations, and were the beneficiaries of
$80,000,000,000 worth of life insurancefour-fifths of the
total amount in force. In a single year $1,000,000,000 was
paid to them in the form of death benefits. Women owned
40 per cent of the savings-bank deposits. According to
the income-tax returns, 3,000 women in the United States
were millionaires, while the number of multimillionaires
was listed at 400. Lastly, the census of 1930 showed that
11,000,000 women were gainfully employed outside the
home and received $7,000,000,000 in earned income.
Rich, enfranchised, as well educated as their mates, and
JUST AROUND THE CORNER 217
wielding enormous cultural power, the women of the
United States had signally failed to bring about the social
betterment they had promised. Children still worked m
cotton mills, glass factories, and canneries; juvenile crim-
inals of both sexes increased in number; female delin-
quency was on the rise. What were the women voters of
America doing about these ills? The answer, for all to see,
was an unimpressive blank. Perhaps it was unfair to expect
political marvels from women in so short a time; possibly
the day was coming when their collective influence would
be felt. But the fact remains that by 1930 the volcanic fire
had faded from the woman's movement, and had simmered
down to a rose-colored candlelight, shedding a lo-watt
glow on the too-too pressing subjects of gardening, domes-
tic servants, sentimental pacifism, bridge, and birth control.
Was all the furor about "woman's political influence"
just so much marshmallow gush, something for the wom-
en's magazines to burble about, yet leaving no imprint on
the plastic stuff of society? Or graver still, were the
women of the United States being wantonly derelict in
discharging the civic responsibility they had once begged
for and now prized so lightly? These questions received
no satisfactory answer as juvenile crime, child labor, and
the tragic miseducation of adolescents continued to blot
the American scene.
8. Downhill with the Brakes Off
The most fantastic aspect of this incredible era was the
spectacle of too much wheat and not enough bread, too
much cotton and not enough clothes. The carry-over of
cotton was 13,000,000 bales in 1932, yet in that year
13,000,000 Americans lacked sheets, towels, tablecloths,
nightshirts, and diapers for their babies. While 800,000
children went shoeless, the shoe factories of Lynn and
2l8 FANTASTIC INTERIM
Brockton lay idle six months annually, then competed
frantically with each other to produce rival lines of iden-
tical goods for the same market. A million carpenters were
jobless at a time when r 1,000,000 houses urgently needed
repairs. While $10,000,000,000 lay frozen in bank vaults,
hundreds of cities were obliged to set up community bar-
ter centers or issue scrip to facilitate the exchange of com-
mon necessities. Clearly, something was wrong with an
economic system that could control neither the production
nor the distribution of goods, money, and services. Yet
no one in power even commented on the situation; no
basic criticism was made of the "free and automatic" mar-
ket which was deemed the particular glory of the Amer-
ican profit system.
Where did the trouble lie? The most suggestive and for
a time the most popular answer was Technocracy, a com-
bination of economics and engineering fathered by How-
ard Scott, a chart-making dreamer who had borrowed
heavily from the case books of Thorstein Veblen. Scott
gathered around him a group of researchers and enthu-
siasts, set up a laboratory in a room loaned by Columbia
University, and early in 1932 began bombarding the gen-
eral ear with a barrage of home truths and fancy nomen-
clature. But for all their absurd jargon, the technocrats
really put their finger on the deep sores of the depression
and said: "The truth lies here and hem.'* *
Following Veblen, Technocracy pointed out that if the
industries of the United States were organized as a system-
atic whole, then managed by competent engineers with an
eye to the maximum production of goods, instead of by
ignorant businessmen bent solely on maximum profit, the
resulting output of usable goods would exceed current
output by at least 1,000 per cent. In addition, the products
would be superior to anything now in the market. By
using inventions long withheld from use (rayon, for in-
JUST AROUND THE CORNER 219
stance, was withheld for nearly twenty years), the tech-
nocrats claimed that they could make automobiles that
would serve father, son, and grandson, and razor blades
that would keep their edge without sharpening for a cen-
tury. Every advantage of the machine was to be utilized,
with a consequent reduction in the number of hours of
labor. Men working four hours a day, twice a week, could
provide every family in America with the equivalent of
a $20,000 income.
The technocrats promised to do all this by using to the
fullest, and for social ends, the barely tapped productive
possibilities of the machine. To charges that this would
cause a terrific increase in technological unemployment,
Scott answered: "We are suffering not from technological
unemployment, but from the unemployment of technol-
ogy/' Scott acknowledged that the switch-over from the
profit incentive to "production for use" would radically
alter the American way of life. What he really meant was
that the profit system would have to go. But in the grim
days of 1932 many were asking: "Why not?"
The kernel of truth in Technocracy, though sown broad-
cast, was not skillfully nurtured by its proponents. Scott
was less a scientist than a haphazard theorizer with no
sense of political reality. He displayed a strange inability
to answer the questions of level-headed interrogators in
language that common people could understand. The
whole movement was unfortunately esoteric, and far in
advance of its time. As the depression deepened, the sud-
den flurry of interest waned; Technocracy shriveled and
went down the wind, leaving unanswered the questions
and hopes it had raised in the minds of bewildered men.
Meanwhile, as Hoover vainly attempted to balance the
budget, stocks continued to bump downstairs ten to thirty
steps at a time. Railroads, feeling the pinch of decreased
freight and passenger traffic, began to pass into receiv-
220 FANTASTIC INTERIM
ersfaip. Despite RFC loans, 45,000 miles of rails went
through bankruptcy courts in two years, and only by
heroic financial exertions did the huge Eastern lines sur-
vive. Banks were failing at an increasing tempo; at first
smaller institutions blew up like packets of firecrackers,
followed by the awful explosions of great banks in New
York, Chicago, Detroit, and Pittsburgh. Real-estate values
crumpled as rentals fell off; holders of mortgage bonds
schools, charitable institutions, and conservative investors
felt the dire repercussions. In the autumn of 1932 the
real-estate bond house of S. W. Straus & Company ("no
loss to any investor in forty-four years") went into bank-
ruptcy, defaulting on millions of "sound real estate securi-
ties" which were peddled by desperate victims at 7 cents
on the dollar. Altogether $6,000,000,000 in real-estate
bonds was wiped out. Samuel InsulFs impressive pyramid
of public-utility holding companies tottered and crashed,
strewing wreckage across the Middle West as the great
magnate fled across the Aegean in a rusty tramp freighter.
Ivar Kreuger, the Match King, and prince of international
swindlers, put a bullet through his heart in Paris but only
after he had perpetrated colossal frauds on the ancient,
august, but very gullible American banking house of Lee,
Higginson & Company.
Chaos was loosed. Fear stalked the land as Hoover tried
to reconcile his political conscience with the ghastly facts.
Now a sullen roar of discontent began to rise as public
indignation mounted against Administration methods of
handling the crisis. These protests came not from radicals
nor irresponsible groundlings. Daniel Willard, president
of the Baltimore & Ohio Railroad; Gerard Swope of the
General Electric Company, and Nicholas Murray Butler,
president of Columbia University, were distressed by the
awful discrepancies between the potential wealth of Amer-
ica and its faulty distribution. Said Daniel Willard to the
JUST AROUND THE CORNER 221
assembled dignitaries of the University of Pennsylvania:
"While I do not like to say so, I would be less than candid
if I did not say that in such circumstances, I would steal
before I would starve." Governor Philip La Follette,
speaking to the State Legislature of Wisconsin, said: "In
1929 the top rung of our Federal financial ladder, com-
prising 504 individuals, reported net incomes of over
$2,000,000 apiece. . . . They are not worth it for the
kind of leadership they have given us."
Nor was the public temper mollified by the revelations
that began to pour out of the Senate investigations of
banking and currency which ran through the spring and
early summer of 1931. The committee summoned high-
ranking members of the financial set in an attempt to dis-
cover by just what process the awful tragedy had oc-
curred. Under the relentless probing of Ferdinand Pecora,
grim details of fiduciary betrayal and downright* dishon-
esty were laid bare. The public learned for the first time
how J. P. Morgan & Company as part of its routine prac-
tice "pegged" the prices of bonds that is, kept them at
an artificially high level until the issue was sold then
"pulled the plug" and let the securities take care of them-
selves; that is, fall in value. The public learned about the
a cut-in," by which preferred lists of insiders were given
opportunities to buy securities at a price far below that
paid by the public. Laymen became acquainted with the
methods that enabled the highest-paid men in the country
to pay no income tax. Such a one was Albert Wiggin,
president of the Chase National Bank, who by making
"sales" to members of his own family and by transferring
his profits to Canadian corporations "saved" himself a tax
of $440,000 on profits of $4,000,000. With Mr. Hoover
in the throes of budget-balancing, a moderate tax contri-
bution from Mr* Wiggin would have helped quite a bit.
Pecora's questioning revealed that the control of Amer-
222 FANTASTIC INTERIM
ica's productive machine had shifted from industrial capi-
talism to finance capitalism, with the emphasis no longer
on production of goods but on the exploitation of invest-
ors, and the ultimate wrecking of property. The formula
of destruction (as summarized by Harry Elmer Barnes)
comprised the following steps: i. Launch a concern by
selling stock, mainly watered, to the mass of citizens.
2. Bufld the enterprise expensively so as to profit through
the operations of the construction and supply companies,
also controlled by the big banks. 3. Administer the con-
cern expensively, with much mismanagement. 4. Wreck
the enterprise ultimately, and throw it into receivership.
5. Seize the ownership of the reorganized concern. At
every stage some form of financial return is derived at
the expense of the stockholders and, in the end, at the
expense of the bondholders as well.
These disclosures shocked the small part of the Amer-
ican public that paid any attention to such matters. It
hurt to discover that the men who were supposedly the
guardians of the inner shrine of American business were
common looters who had betrayed those who looked to
them for guidance and protection. The findings of the
investigating committee rocked the very foundations of
the theory that private enterprise was a system that pro-
duced and distributed wealth for the public good. A new
and sinister light was thrown on banking operations. Or-
dinary men had long believed that individual savings in
the form of bank deposits were loaned to aid legitimate
enterprise, and that the managers of these enterprises con-
ducted their activities with high regard for the safety and
the increase of the investor's savings. But now it was re-
vealed that financial leaders had created no real goods,
protected no investments, and were not at all interested
in employing idle labor. They operated mainly to acquire
paper holding companies, manipulate pools, speculate in
JUST AROUND THE CORNER 223
their own and other securities, collect fat fees, commis-
sions, and bonuses, and to cap it all dodge taxes.
Wrestling with ogres of panic, Hoover was beset by
other difficulties issuing from the Treasury Department.
Andrew Mellon was in deep trouble. The prestige that
once had draped like a regal stole the "greatest Secretary
since Hamilton" was now in tatters, and Mellon was titter-
ingly dubbed "the man who stayed too long." His finan-
cial acumen, indeed his ability to add and subtract prop-
erly, were called into question when for three years run-
ning he overestimated the Federal revenues. In 1931, for
example, he estimated a $30,000,000 surplus; the deficit
that year was $902,000,000. This was a reversal of Mellon's
old trick of 1921-22, when in order to defeat the bonus,
he had claimed that there would be a $950,000,000 deficit.
Actually, there was a $300,000,000 surplus that year. But
fled forever were those halcyon surplus years. Andrew
Mellon was just a tired, aging banker whose formula had
gone irretrievably sour.
Unsavory revelations about his conduct of the Treasury
Department had recently been made in an investigation by
the Senate Committee on the Judiciary. This committee
had examined Mellon's huge refunds to large corporations,
and discovered that high officials in the Bureau of Inter-
nal Revenue were operating a racket. They would assess
a heavy tax on a corporation, then resign from the Tax
Bureau and enter the employ of the corporation as tax
lawyers. They would then obtain from the Bureau of
Internal Revenue a refund of taxes assessed while they
were connected with that office. These revelations should
have shocked the country, but of course passed unnoticed.
The Senate committee deplored these and other question-
able practices and on one occasion said: "We find this case
[the U. S. Steel refund] was tried in secret, passed in se-
cret, and virtually paid in secret. . . . The Committee
224 FANTASTIC INTERIM
feels that this method of paying refunds is so slipshod that
it ought to be corrected, and cases of this importance
should be settled in the open before an impartial tribunal."
There is no record, however, of any change being made in
the Mellon methods of trying and settling tax-rebate cases.
Mellon himself kept at his side a tax expert whose chief job
was to devise legal methods by which the Mellon com-
panies could pare down their tax payments.
Hoover scarcely bothered about these minor matters,
but was badly frightened when the House of Representa-
tives considered impeachment proceedings against the once
sacred Secretary of the Treasury. On January 6, 1932,
Congressman Wright Patman of Texas arose on the House
floor and said: "Mr. Speaker, I rise to a question of Con-
stitutional privilege. On my own responsibility as a mem-
ber of this House, I impeach Andrew Mellon, Secretary
of the Treasury, and offer the following resolution." The
resolution was based on Section 243, Revised Statutes,
which provided that no Secretary of the Treasury shall
directly or indirectly be concerned or interested in carry-
ing on a business or trade or commerce. The redoubtable
Patman then recited that the Secretary of the Treasury
owned stock in three hundred corporations with resources
of $3,000,000,000, said corporations being extensively en-
gaged in the following businesses: mining properties, baux-
ite, magnesium, carbon, electrodes, aluminum sales, rail-
roads, Pullman cars, gas, electric light, street railways, cop-
per, glass, brass, steel, tar, banking, locomotives, water
power, steamship, shipbuilding, oil, coke, coal, and many
other industries. In due time representatives of the Treas-
ury Department replied for the Secretary. Their defense
was the last gasp of feebleness. Yes, it was true that Mr.
Mellon owned stock in quite a number of corporations.
But since he did not own more than 50 per cent of the
stock in any of these corporations, he could not be said
JUST AROUND THE CORNER 225
to "control*' these companies. On this technicality, Mellon
rested his case while the House considered Patman's
charges.
Hoover's patience with his aging Secretary was ex-
hausted. With the election a few months off, what should
be done with him? Mellon could not be allowed to face
the charges, else a nasty political scandal might develop.
Fortunately, at this time the Ambassadorship to the Court
of St. James was about to fall vacant. Charles Dawes, the
present incumbent, had grown weary of his Broadway en-
tertainers who poured liquor down the necks of British no-
bility or slipped ice cubes into the bosoms of dining duch-
esses. Somehow Dawes's humor had eluded his British
hosts; in any case, the Ambassador was ripe to resign.
Hoover conceived the idea of kicking his faithful Treas-
urer upstairs to the Ambassadorship, and after the deli-
cate arts of persuasion had been exercised on Mr. Mellon,
he accepted. Hoover lost no time in publishing the an-
nouncement, which said in part: "I have decided ... to
call upon one of our wisest and most experienced public
servants to accept a position which will enable him after
many years of distinguished public service at home, to
render equal service to his country in the foreign field/'
Patman, robbed of his prey, termed the appointment a
"Presidential pardon, 5 * then concluded by saying: "Mr.
Mellon has violated more laws, caused more human suf-
fering and illegally acquired more property to satisfy his
personal greed than any other person on earth, without
fear of punishment and with the sanction and approval of
three Chief Executives of a civilized nation."
The new Ambassador sailed away, a broken, disillu-
sioned, but still very rich old man, a perfect example of
the dog-eat-dog economic philosophy which was rapidly
entering its last throes in the United States.
226 FANTASTIC INTERIM
Midsummer 1932* Oppressive heat lay on the Anacostia
Flats near Washington, where an expeditionary force of
bonus marchers had pitched their sprawling camp. Not
so long ago these men had been the American equivalent
of Kipling's "thin red line of heroes," but now they were
an unkempt army of down-and-outers who had streamed
into the capital on trucks and freight trains to press for
immediate payment of the adjusted compensation that the
House had already voted to pay them in 1945. Like any
other group of businessmen interested in furthering spe-
cial legislation, these American citizens had converged on
the capital to plead their collective case to their Repre-
sentatives in Congress. Unfortunately, they were unable
to pay hotel bills, so late-comers who could not crowd
into the Anacostia Flats appropriated some vacant lots and
unused buildings on Pennsylvania Avenue just below the
Capitol.
Washington, indeed the whole nation, vibrated in sus-
pense. Would the ranks of the Bonus Army be swelled
by hundreds of thousands of unemployed war veterans?
Would radical malcontents join the push and use the Bo-
nus Army as a revolutionary flying wedge? No one knew.
The air was charged with dynamite, and the slightest
spark might detonate a terrific explosion. But the bonus
expeditionary force behaved with much circumspection;
in their wretched encampment they washed their clothes,
played their harmonicas, shared their grub with each other,
and spent their penniless leisure in staging homemade en-
tertainment. On the night that the Senate vote was to be
taken (on immediate payment of the bonus) 10,000 of
them gathered around the Capitol steps. They might have
known that their hoped-for bill had no chance; even if
the Senate passed it, Hoover's veto was certain. But they
waited on the broad steps because they had nothing else
to do and no place else to go.
JUST AROUND THE CORNER 227
Then the Senate's word was passed to them, and the
word was No.
For a clipped second, the dignity, even the safety, of
the Senate wing hung in the balance. If a single hungry,
disillusioned veteran had started to rush up those steps,
an angry, disheveled mob would have overrun the august
chamber. Instead, someone struck up "America." With
bared heads, the Bonus Army sang "My country, 'tis of
thee," then dispersed peacefully to their quarters.
Next day a majority of them began to straggle out of
town, but thousands stayed on, desperately hoping that
a bonus miracle would happen. Officialdom became wor-
ried. The President, who had never officially mentioned
the visit of his unfortunate countrymen to his city, caused
the White House gates to be locked; a guard was set up
and the streets around his residence were cleared. On the
whole, Hoover acted a little too much like the command-
ant of the Bastille on a certain July 14. Then came the
order that the remnants of the Bonus Army must be evac-
uated. On the morning of July 28, the mopping-up opera-
tions were begun by General Pelham D. Glassford, Super-
intendent of the Washington Police, who had handled the
situation admirably during a difficult month. Everything
was peaceful until someone threw a brick; shots rang out,
and two veterans were killed. Glassford struggled to main-
tain order and was on the point of succeeding when a
heavy detachment of United States troops, led by Gen-
eral Douglas MacArthur, rumbled down Pennsylvania
Avenue. Cavalry, infantry, artillery, even tanks were
thrown into the pitiful breach. Someone had blundered
and that someone was Herbert Hoover. To preserve the
peace he had ordered out the United States Army.
Hurling gas bombs, charging the ragged bonus-seekers
as they retreated, the Army gallantly pressed forward. It
was a splendid victory, and was celebrated that night by
228 FANTASTIC INTERIM
bonfires on Anacostia Flats. The shacks of the bonus-
marchers were little mounds of dying ashes when Her-
bert Hoover went to a sleepless pillow with the knowledge
that he had given the country one more proof of the utter
bankruptcy of his policy.
9. Darkness before Dawn
Inexorably the election of 1932 drew near, and both
parties began preparations for the quadrennial referendum
at the polls. It was apparent that the Republican nomina-
tion would go to Hoover; no one else could have been
persuaded to accept it. Defeat seemed inevitable; the Re-
publican party was a dead whale, stranded on the beach of
the depression, and, blameworthy or no, Hoover was held
culpable for its demise. Hapless Herbert had failed and
failed again, not by reason of insincerity or from lack of
energy (indeed he worked at his desk sixteen hours a
day, allowing himself barely fifteen minutes for lunch),
but because he had insisted on applying the wrong rem-
edies. The last year of his tenure was particularly un-
happy; the futility of his measures was apparent even to
Ms own party, and his Executive will was powerfully
checked by a Democratic majority in Congress. Utterly
lacking in political address, he was unable to control the
growing opposition, and ended up by whining piteously
about the lack of co-operation he was receiving from the
Democrats.
In a listless convention at Chicago on June 14-16, he
was nominated to succeed himself, and the campaign was
on. Nothing could have been stuffier than the Republican
platform on which Hoover stood. It defended the Haw-
ley-Smoot tariff, sidled tentatively toward repeal of Pro-
hibition, and promised to support an "economically
sound" plan to raise agricultural prices. The document
JUST AROUND THE CORNER 229
gave off moldy aromas of gloom and defeat, and was
about as inspiring as a tired old biscuit.
Meanwhile, in the Democratic camp blithe armorers
were fashioning a shining suit of mail for their White
Knight, whoever he might be. There was no dearth of
prospective champions. As H. L. Mencken said, "The
Democrats could have beaten Hoover with a Chinaman,"
and every state harbored a favorite son on whom, it was
hoped, the Chinese lightning might strike. The acknowl-
edged leaders in the Democratic race were Governor
Ritchie of Maryland, a conspicuous wet; Al Smith, who
had "retired from politics" but was now lured back by the
scent of the savory Democratic barbecue about to be
served up; William McAdoo of California and John Nance
Garner of Texas, each of whom had a quiverful of dele-
gates. Each of these candidates possessed high Presiden-
tial hopes and strong local backing. But each of them
knew in his heart that the man they had to beat was
Franklin Delano Roosevelt, the handsome, progressive,
vote-getting Governor of New York State.
Virtually from^the moment of birth, Franklin D. Roose-
velt had been preparing to be President. He, not Al Smith,
was the Happy Warrior "Whom every man in arms
would wish to be." His had been the perfect youth;
strong, tall, fearless, he had wise parents, comfortable
wealth, well-placed friends, and the best education Europe
and America could provide. Even as a boy he exhibited
the natural habit of command. His mother, once watching
him order some playmates around, said: "Franklin, don't
be so bossy." Whereat Master Franklin replied: "But,
Mother, if I'm not bossy nothing will ever get done!" To
his managerial talents were added the gift of gaiety and
love of battle usually in behalf of a submerged majority.
At Harvard, for example, he organized the "proletarian"
undergraduates against the Gold Coast crowd in a fight
230 FANTASTIC INTERIM
for class officers. At the age of twenty-eight he discov-
ered that his metier was politics, and in a barnstorming
campaign for the State Senate, he ripped the padlock off
a traditionally Republican district. Even then he knew the
tricks of captivating men; he could charm your eyes out
of their sockets and the birds off the trees. He could walk
up to a Republican farmer standing in the middle of his
furrow, call him by his first name, inquire about his crops,
and make the man feel that the axis of the universe was
bisecting his field. About the only thing his enemies could
say against Roosevelt was that he laughed too easily,
wasn't nearly serious enough for a lawgiver.
After a stormy session in the Albany Senate, during
which he nonchalantly challeged the rule of Tammany
Boss Murphy, Roosevelt in 1913 became Woodrow Wil-
son's Assistant Secretary of the Navy. Here he encoun-
tered not only administrative Navy problems, but also
those larger ideas of social reform which constituted
Woodrow Wilson's New Freedom. It was a hopeful mo-
ment in American life; Wilson's program envisioned finan-
cial reform, amelioration of labor evils, and the abolition
of child labor. These measures were eclipsed by the war,
but the young Assistant Secretary stored these things in
his mind, where they ripened in the slow incubator of
time. Meanwhile, he fought for a larger Navy, and aided
Josephus Daniels in wresting an appropriation of $300,-
000,000 (colossal in 1913) from Congress. The active con-
duct of departmental affairs during the war gave Roose-
velt an invaluable insight into the workings of Washing-
ton's political 'machine. So high was he in Democratic
councils that he was nominated for the Vice-Presidency
in 1920, But the disastrous retreat from Versailles had
begun, and both liberalism and democracy went into a
long winter of discontent.
Simultaneously, the man who had thus far dwelt se-
JUST AROUND THE CORNER 231
renely in Fortune's middle parts, was stricken with dread
poliomyelitis, which paralyzed his legs and remorselessly
held him on his back for two years. A promising career
in politics was interruptedended, as far as any human
eye could see. Franklin Delano Roosevelt went down into
the tomb, lived among the dead for three years; and when
the stone was rolled away nothing on earth could ever
hurt him again.
As Governor of New York State in 1928 he began
patching together the shreds of a new nation-wide Demo-
cratic party. In this creative task he was assisted by two
strangely disparate geniuses: Louis McHenry Howe and
James A. Farley. Howe, devoted to Roosevelt with Pyth-
ian fidelity, planned the strategy of reorganization, which,
quite simply, was to contact every Democratic leader in
the United States. Farley did the legwork and the glad-
handing, augmenting his travels by a prodigious amount
of letter-writing. Obscure party workers in Oregon or
Michigan might clasp the hand of Farley in the flesh or
receive a letter saluting them by their first name, and
signed by Farley or by Roosevelt himself. Hundreds of
thousands of such letters were written, and when in 1930
Roosevelt was re-elected Governor of New York by an
earth-shaking plurality of 725,000, Democrats all over the
country were convinced that the long-awaited Moses had
appeared to lead them out of the desert.
Now began that internecine back-stabbing which usu-
ally precedes a Presidential convention. The feud between
Smith and Roosevelt was wide-open now; the Brown
Derby was accusing his political protege of ingratitude^
basest of political crimes. Canny Republicans, eager to
head off Roosevelt, dumped into his lap the noisome
Walker-administration scandals, hoping thus to embarrass
him with the Tammany Hall delegation. But Roosevelt,
a political boxing master such as America had not seen in
232 FANTASTIC INTERIM
action, outfooted all opposition. When Walker was ar-
raigned before him, he dragged out the hearings until
the nerves of the dapper Mayor snapped; Jimmy's resigna-
tion spared Roosevelt the necessity of being grim and pos-
sibly punitive about things. Then followed some sharp
horse-trading with Southern and Western delegates, a
process that landed Garner in the Vice-Presidency and
gave Roosevelt the Presidential nomination on the fourth
ballot at the Chicago convention.
Roosevelt's campaign sparkled with novelty and con-
fidence-breeding assurance. Breaking with tradition, he
flew to Chicago to accept the nomination. Amid a wild
tumult of enthusiasm, he concluded his speech of accept-
ance with historic words:
I pledge you, I pledge myself, to a New Deal for the
American people. Let us all here assembled constitute our-
selves prophets of a new order of competence and of courage.
This is more than a political campaign; it is a call to arms.
Give me your help, not to win votes alone, but to win in this
crusade to restore America to its own people.
The people hearkened to the voice of their champion
and sent the party of money-changers down to a stunning
defeat. The popular vote was 22,821,857 for Roosevelt;
15,761,841 for Hoover. The bands played "Happy Days
Are Here Again," little suspecting the heartaches that lay
in the interregnum of five dreary months between elec-
tion and inauguration, a period in which the country
scraped the bottom of the depression.
As the Hoover Administration ticked away its final
hours, the banking system of the country sagged and col-
lapsed. Runs and hoarding became universal as frightened
depositors withdrew their money in gold, if they could
get it. The leading banks in Detroit closed in February,
and by March 3, 1933, 5,504 banks had fallen, freezing
$3,500,000,000 in deposits. As Roosevelt rode to his in-
JUST AROUND THE CORNER 233
auguration, the exhausted and discredited Hoover by his
side, the financial machinery of the United States was at
a standstill. The fiscal pulse of the richest nation in the
world had stopped beating, and the cold fingers of fear
searched every heart.
IV
ON OUR WAY
1. Proceed to Battle Stations
AT THE lowest ebb of national affairs since the Battle of
Bull Run, the new leader began scattering the forces of
fear and dissolution. His touch was sure, and his heart
which had recently escaped an assassin's bullet was cheer-
ful and unafraid. Now for the first time the radio justified
its existence, hurling the magnetic vitality of Roosevelt's
voice into the homes of 130,000,000 Americans as they
sat waiting for doom to overwhelm the country. But the
voice they heard was unfaltering with hope and assur-
ance. "My friends," it said, "we have nothing to fear but
fear. . . . This great nation will endure as it has endured,
will revive and prosper." The^damp cerements of defeat
fell from weary limbs, and the contagion of Roosevelt's
words kindled new fires of confidence in long-chilled
hearts.
But the nation got more than words. It got action, some-
thing it hadn't had for fifteen muscle-bound years. In the
glorious "Hundred Days" that followed, the President and
his Brains Trust advisers Moley, TugweU, and Berle pro-
duced a dozen sparkling measures, and shot them through
Congress in a determined and resourceful attempt to blast
the country out of its doldrums. Much of the legislation
234
ON OUR WAY 235
was not permanent, much of it was imperfectly drawn,*
yet such was the freshness and vigor of the program that
it brought blood whipping to pallid cheeks and buoyancy
to dragging feet.
Roosevelt began his dynamic drive against the depres-
sion on March 5, by ordering every bank in the nation to
close its doors for a "holiday" devoted to examination and
appraisal of assets. For nine critical days depositors could
draw no money, checks could not be cashed. But instead
of being a time of stringency and foreboding, the Bank
Holiday brought the nation together in a flush of mutual
co-operation. Stores extended credit to strangers, mer-
chants accepted postdated checks. The closing of the
banks was a psychic catharsis that purged the nation of
its accumulated fears. The worst had happened and it
wasn't fatal after all.
On March 9, Congress passed the Emergency Banking
Bill, designed to permit sound banks to reopen and to fur-
nish them with sufficient currency to meet all demands.
Banks not entirely solvent were placed under control of
"conservators." Ninety- per cent of the banks reopened
immediately; eventually, all but a few banks resumed busi-
ness. The President's vigorous action halted the progress
of panic; hoarding ceased, and depositors shamefacedly re-
turned money which only yesterday had lain buried in
coffee cans and under mattresses. On March 12, in his
first "fireside chat," the President explained the purpose
of the Bank Holiday and the operation of the new bank-
ing legislation. The fireside chats later became a highly
popular feature of the New Deal; naturally, they dealt in
no profundities of state, yet these informal discussions
gave the people a warm feeling that they were being taken
into the President's confidence an emotion they had never
experienced under Herbert Hoover.
With the banking crisis safely behind, the next emer-
236 FANTASTIC INTERIM
gencles were the relief of human distress and the bandag-
ing of unemployment wounds. To cope with these ur-
gencies, Roosevelt created the Federal Emergency Relief
Administration, headed by a slender young social worker
named Harry Hopkins, destined to spend more money
than any man in American history. The FERA was a
frank stopgap: even in the spring of 1933 the scope of
the economic catastrophe was not realized, and it was be-
lieved that a vigorous program of Federal relief might
start the wheek of business turning. Part of the FERA's
work was to discover exactly how many people required
relief. When it was established that 12,500,000 persons
were in dire need of assistance, the FERA rapidly ex-
panded its "temporary" program, underwrote projects
covering every type of work and skill; backed white-collar
and student-aid projects; administered home relief; oper-
ated employment bureaus. Courageously, it raised relief
standards, gave cash instead of grocery orders, and erased
some of the stigma attaching to destitution. When the
FERA wound up its work in December 1935, # had ex-
pended $4,000,000,000, and its administrators had learned
a great deal about the job of underwriting human beings
in distress.
To excise the cancerous idleness of unemployed youths,
the President signed on March 31 a bill setting up the
Qvihan Conservation Corps. This agency immediately put
to work 275,000 young men at jobs of reforestation and
fire and flood control. Armed with axes, picks, and shovels,
they went into 1,100 hastily improvised camps throughout
the country; under the supervision of Army officers, they
cleared forests, built dams and levees, cut fire lanes, and
set up fire-control stations. Within ninety days the pro-
gram was swinging along in full stride, taking demoral-
ized youths off street corners and providing them with
healthful quarters, good food, and invigorating work. The
ON OUR WAY 237
pay was $30 a month, most of which went to their fami-
lies. During the depression, the CCC reclaimed 2,000,000
boys physically and morally; the project was splendidly
administered, and even the most carping critics of the
New Deal were obliged to admit that the results were
superlative.
The relief and recovery program of the New Deal en-
tered its second phase late in 1933 after the FERA survey
revealed the enormous scope of unemployment. Realizing
that no merely temporary measures would suffice, the
President launched a spectacular building program under
the auspices of the Civil Works Administration. Again
Harry Hopkins (now called Harry the Pay Window)
was in charge. The object of the CWA was to put
4,000,000 men to building roads, bridges, post offices, and
other noncompetitive public works. By this time, too, the
President saw that the local authorities were unable to
administer relief, or make further contributions to it; thus
the CWA became the first large-scale relief agency oper-
ated solely with Federal funds. At its peak, during Jan-
uary 1934, CWA had 4,250,000 workers on its rolls; alto-
gether it spent $1,000,000,000, 80 per cent of it in wages.
The CWA was tremendously expensive, and provided
only limited kinds of work; it could not absorb the mil-
lions of white-collar workers teachers, artists, actors, mu-
sicians, and writers who by this time were suffering des-
perately. Again Roosevelt took his crayon in hand and
with the aid of the ailing Hopkins sketched out a new,
broader, and more permanent plan of work relief the
Works Progress Administration.
Until now Federal spending had been regarded as a
temporary expedient, a kind of stopgap to plug the breach
until "business would take an upturn." But in 1935 it was
becoming clearer that the great depression was out to
break all records for severity and duration. All notions
238 FANTASTIC INTERIM
of balancing the budget must be abandoned; the President
had to swallow the scalding words of criticism that he
had poured over Hoover's unbalanced budget. Conserva-
tive Democrats and terrified Republicans blanched as they
saw the deficit mounting on billion-dollar rungs each year.
From now on, large-scale spending became an integral part
of the New Deal. Thousands of millions of dollars, raised
by taxation and borrowing, were poured into various New
Deal enterprises in a gigantic eifort that combined pump-
priming with human reclamation.
Gone were the days when Federal aid meant pick-and-
shovel labon WPA changed all that by saying in eff ect:
"You who are jobless through no fault of your own will
be encouraged to continue in your trade or profession,
aided by Federal funds administered as generously and
humanely as the wealth of the country and advanced social
thinking will permit." Musicians, painters, sculptors, re-
ceived approximately $100 a month to exercise their tal-
ents; playwrights, producers, and actors combined their
skills in staging successful plays. Jobless teachers, histo-
rians, photographers, and newspapermen combed their lo-
calities with camera, notebook, and pencil to produce a
series of permanently valuable guidebooks and docu-
mentary collections of Americana. Musicians gave sym-
phony concerts; tap dancers and puppet masters gave ex-
hibitions or imparted their skills to others. And if the job-
less man had no trade or talent, he was taught how to
make horsehair belts or clamshell ash trays. Critics of
the Administration called it "boondoggling," but Roose-
velt defended these projects on the simple ground that
they kept human beings American citizens from falling
apart.
On the lowest rung of New Deal dependence were the
home-reliefers, a tatterdemalion army which in good
times or bad marched in the rear ranks of society. These
ON OUR WAY 239
unfortunates now received an outright cash contribution
from the Federal Treasury. Anything beyond the bare
limit of subsistence was impossible, but thousands of fam-
ilies were held together by government pittances. A fam-
ily of four on home relief received rent money up to $17
a month. For food, men were granted $3.30 weekly,
women and children a trifle less; pregnancy cases were al-
lotted 60 cents extra every two weeks. In addition to these
frail moneys, each family was awarded coal and surplus
food. To the disgust of Republican editorial writers, home
relief was granted on a basis of needy not moral merit.
Wife-beating, drunkenness, prostitution, adultery, gam-
bling, and marihuana-smoking were no bar to relief un-
less it could be demonstrated that they upset the family
budget.
Congress brought back honest liquor. With a whoop
and a bounce it landed on the gaunt, umbrella-carrying
caricature of Prohibition and booted it downstairs. Last-
ditch drys had declared that it would take years for the
states to ratify a new Constitutional Amendment repeal-
ing Prohibition, but they miscalculated the people's long-
ing for legal liquor. As state after state ratified the Twen-
ty-first Amendment, Roosevelt gave impetus to repeal by
signing the 3.2 Beer Act. At 3:30 P.M. (Mountain Time)
on December 5, 1933, Utah became the thirty-sixth state
to ratify irepeal. When the Prohibition corpse was carried
out, merrymaking throngs of men and women jammed
hotels and cafes. Happy days were indeed here again,
bringing in a flood of Federal revenue (and incidentally
a new barroom decor of chromium, cork, mirrored ceil-
ings, and red-leather fixtures). Eight states remained dry,
but honest drinkers had the satisfaction of knowing that
these states received little assistance from the Federal Gov-
ernment in protecting their local aridity.
240 FANTASTIC INTERIM
2. The Blue Eagle Screams
As Roosevelt unfolded his program It became abun-
dantly clear that the New Deal was not merely a bril-
liantly improvised collection of haphazard schemes, but
that its measures and proposals were "orderly component
parts of a connective, logical whole." Stated very simply
in Roosevelt's own language, the New Deal offered:
A chance for men and women to work in industry at decent
wages and reasonable hours; or to engage in farming at a
decent return
A chance to keep savings in banks safe from the speculative
use of other people's money; and to make investments without
danger of deception or fraud by greedy promoters and spec-
ulators
A chance for adequate recreation, better housing, and
sounder health
A chance to make reasonable profit in business protected
against monopolies and unfair competition, but organized so
as to provide fair prices for the consuming public
Planning and use of natural resources for the benefit of
average men and women
Security against the hardships of old age
Security against unexpected or seasonal unemployment
Security against new as well as old types of criminals
Security against war
It was an ambitious attempt to bring government, in-
dustry, agriculture, and labor into harmonious interrela-
tion, and a stupendous effort to bridge the enormous lag
existing between our political institutions and economic
fact* Whether the program would be successful, or
whether, it would be harried to death by opposition and
compromise, were questions that Roosevelt now put to
the test with his wonted vigor and aplomb in the National
Recovery Act. * *
The NRA was an all-out try at a planned industrial
ON OUR WAY 241
economy a full-scale, co-operative movement which, in
the words of the President, aimed to "obtain wide re-em-
ployment, to shorten the working week, to pay a decent
wage for the shorter week, and to prevent unfair com-
petition and disastrous overproduction." This idealistic ex-
periment in industrial self-government was a failure;
Roosevelt sadly erred in believing that American business
was willing to assume responsibility in its own domain.
After centuries of unregulated competition, it was too
much to expect that rugged industrialists would suddenly
submit to codes of fair practice, even if self-imposed.
Under the explosive direction of Hugh (Iron Pants)
Johnson, the NRA took off with a fanfare of publicity.
The heart of the plan was a system of codes drawn up
by each industry for its own governance; during the sum-
mer and fall of 1933, business leaders flocked to Washing-
ton to partake in a vast codification of prices, wages,
quotas, hours of labor, and working-conditions. The com-
plexity of the task was staggering; Johnson worked
twenty hours a day in a titanic effort to make the sym-
bolic Blue Eagle of recovery flap its wings and fly away;
most of the work was done in an atmosphere combining
the noisiest features of a shooting gallery, a boiler factory,
and a metropolitan city room. The multiplicity of hear-
ings, paper forms, subcommittees, and interpretive rulings
bewildered the code-makers and utterly confused the little
businessman who could not afford the services of an ex-
pensive lawyer. A so-called consumers' group represent-
ing the public at large was pushed around as usual. But at
last 750 codes were completed, establishing the general
rules and conditions under which each industrial group
was to operate.
At first, certain benefits accrued from NRA. Child labor
decreased, and there was some reduction in long working
hours in the textile and metal industries. Encouraged by
242 FANTASTIC INTERIM
Section 7 A, labor unions began their long fight for col-
lective bargaining. The wage index rose, and a slight up-
ward spurt in business was felt for a few weeks. Then
the Blue Eagle began to lose altitude; its wings drooped
as "chiselers" evaded or invalidated the codes. Part of the
failure must be ascribed to the unduly high prices fixed
by the codes, prices that in theory afforded nice profits,
but provided no incentive to the buying public. More-
over, many of the codes were being attacked by indus-
trialists who had no intention of "letting the New Deal
tell them how to run their business." William Randolph
Hearst's papers termed NRA a "measure of absolute So-
cialism." Tycoons refused to interview government inves-
tigators charged with enforcing the law. Jokes and puns
circulated; the letters "NRA" were said to stand for "No
Recovery Allowed." Labor, grieved by the resistance of
employers to Section yA, called it the "National Run
Around." Despite the tub-thumping of Hugh Johnson and
the deep concern of the President, the Blue Eagle's chal-
lenge to depression had become a dolorous croak long
before the Supreme Court declared it unconstitutional on
May 27, 1935.
The Supreme Court's decision added a Gilbert and Sul-
livan touch to the Blue Eagle's demise. For whereas busi-
nessmen protested that the Government was unlawfully
exercising regulatory powers over industry, the Supreme
Court ruled in eif ect that industry was exercising too much
power over government! Scrapping the NRA, the court
held that the right to fix wages and hours was constitu-
tionally vested in Congress, and could not be exercised
by voluntary associations of businessmen. Such diverse and
diverting views helped to demonstrate the subtle opera-
tion of the cultural lag that the New Deal was trying to
overcome. The results on industry, however, were not
subtle. Price-cutting began at once; with price-cutting
ON OUR WAY 243
came wage-cutting, until within a few months wages of
$7 a week were paid in the cloak and suit industry, and
$6 a week in the retail jewelry trade. The old sweatshop
was back again. Clearly, businessmen could not be ex-
pected to substitute the larger vision of general well-being
or even their own long-run good for the fiscal-minded
concept of private gain. No three-month course in scared
patriotism could change habits acquired during three cen-
turies of unregulated exploitation. As Karl Marx had said:
"A capitalist would commit suicide for the sake of imme-
diate profit. 5 ' And no matter how gready American capi-
talists feared or despised Marx, their conduct made it ob-
vious that he had called the turn.
Though the Blue Eagle was now a plucked fowl, other
New Deal reforms had successfully weathered the fledg-
ling stage. The peccadilloes of the investment business,
exposed by the probings of Ferdinand Pecora, demon-
strated the need of thoroughgoing reforms in the handling
of "other people's money." As the President observed in
his message to Congress: "There is an obligation upon us
to insist that every issue of new securities . . * shall be
accompanied by full publicity and information, and that
no essentially important element attending the issue shall
be concealed from the buying public." Legislation de-
signed to attain these ends was formulated by Felix Frank-
furter in the Securities Act of May 1933. The Securities
Exchange Act was passed in 1934. These measures were
augmented by the Glass-Steagall Banking Act, which put
an end to the unholy relations between commercial banks
and their security-selling affiliates. No longer could the
Wigginses and the Mitchells trade without restriction in
stocks of their own bank, or deploy hordes of salesmen
to snare the unwary. All these measures are administered
by the Securities and Exchange Commission.
The SEC prohibited pools, market-rigging, and other
244 FANTASTIC INTERIM
devices so helpful in the manipulation of prices; it licensed
stock exchanges, required the registration of all securities,
and extended governmental authority over public-utility
and holding companies. Gone forever were the days of
promotional skullduggery and financial thimble-rigging.
But as Professor Beard points out, the SEC did not guar-
antee absolute safety in all security transactions, nor could
it undertake to judge the wisdom of investments or ensure
profits to the investor. The laws merely obliged the pro-
moter to state certain basic facts about his venture in a
straightforward manner. Fools can still be separated from
their money, but the slaughterhouse techniques practiced
by security houses in the pre-ipip era now exist only as
fond recollections in the memory of a certain hungry and
semideserted Street.
In the spring of 1933 the jolly farmer of Currier & Ives
fame was as extinct as the covered wagon. Export trade
had all but melted away; the home market had shrunk 50
per cent as unemployed millions bought farm products
in decreasing quantities at rapidly falling prices. There had
been an enormous drop in farm income, from $12,000,-
000,000 in 1929 (already low) to $5,000,000,000 in 1932.
Yet as income and prices fell, the farmer's natural recourse
was to produce a larger crop, in the hope that his indi-
vidual income would be thus increased. The welfare of
farmers as a. group cried out for thoroughgoing agrarian
reform, but until Rexford Tugweli and George Peek set
up the Agricultural Adjustment Act, all attempts to "do
something for the farmer" were mere patchwork.
The AAA cut to the heart of the agricultural problem
by offering the farmer a "benefit payment" for reducing
production. Bizarre as it sounded at first, corn and cotton
planters were paid cash for not planting corn and cotton.
As Rex Tugweli admitted, it was a "crude piece of social
ON OUR WAY 245
machinery," but it succeeded because it "identified indi-
vidual and social motives, without depending upon a
changed human nature." Screams of horror went up from
Eastern industrialists when the plan was first announced,
but notwithstanding their agony, the system worked. In
a remarkable 1933 campaign the farmeis of the South re-
tired 10,000,000 acres of the growing cotton by the dras-
tic surgery of "plowing under" every third furrow. The
cotton crop was reduced from a prospective 17,000,000
bales to a manageable 13,000,000 bales; the price of cot-
ton rose, and the cotton farmers saw their income increase
by $300,000,000 over the preceding year. The wheat cam-
paign for 1934 called for a 15 per cent reduction in plant-
ing; 600,000 wheat farmers pledged individual reductions
and were reimbursed by checks from Washington. Simi-
lar projects to maintain an "ever normal granary" were
undertaken with hogs, corn, hides, and tobacco. Unsalable
surpluses and huge carry-overs were reduced, and the
prices of farm products began to show a measurable in-
crease.
Still unsolved, however, was the paradox of want in
the midst of plenty. Millions of bellies were pinched by
hunger while storehouses groaned with accumulated grain.
To rebut this mockery the FSRC (Federal Surplus Relief
Corporation) was organized for the purpose of transfer-
ring excess food from those who had it to those who
needed it. Tons of pork and beef, butter and milk, went
to augment the meager diets of families on the relief rolls.
This plan operated, needless to say, outside the profit sys-
tem, and threw an interesting light on the possibilities of
distributing wealth on a noncapitalistic basis.
Under Milo Perkins's direction, the FSRC later devel-
oped the ingenious food-stamps plan. Relief families could
buy orange-colored stamps to the value of $1.50 for every
member of the family; for each dollar's worth purchased.
246 FANTASTIC INTERIM
the buyer received 50 cents* worth of blue stamps free.
Orange stamps were used as cash to buy anything on the
grocer's shelves, but blue stamps would buy only those
products designated as "surplus." These included milk,
eggs, cheese, butter, fruits, and vegetables food articles
notoriously lacking in the diet of low-income families. In
1939 over 2,000,000 pounds of surplus foodstuffs were
purchased under the stamp plan by relief families. When
the plan was first tried out in Rochester, New York, the
banks tried to charge i per cent for cashing the stamps
turned in by the grocer, but Milo Perkins "cracked down"
and the stamps were cashed free.
The AAA, struggling against the natural vicissitudes of
drought, dust storms, floods, and erosion and battling the
opposition of the Supreme Court, Eastern industrialists,
and budget-trimmers generally had put into operation by
1940 a comprehensive farm program covering every phase
of agriculture. Soil conservation, erosion control, price ad-
justments, marketing co-operatives, loans to tenant farm-
ers, were segments of a well-worked-out plan by which
the New Deal brought order out of agricultural chaos.
Naturally, the farm program cost money; a total of
$3,000,000,000 poured out of the Treasury between 1933
and 1940. But the money was not spent in vain. Much of
it was repaid by various farm organizations to which it
was originally advanced. But over and above the return
of the money, and the education which the government-
farmer partnership gave to the public, there emerged one
unassailable fact: The AAA worked. In the first six years
of its existence, it doubled the farm income of the United
States.
Broad and ably administered though the AAA was (and
this includes the Resettlement Administration which fol-
lowed it), age-old problems still beset the rural areas of
the country. The grim specter of farm tenancy still
ON OUR WAY 247
stalked the land; the income of farmers on submarginal
acres was pitifully low. Improved agricultural technology
and mechanized methods of fanning tended to throw out
of work an increasing number of farm laborers, who wan-
dered from state to state in migratory packs; John Stein-
beck has described their travail in The Grapes of Wrath.
Agriculture's horizon, though less gloomy than in 1929,
was not likely to brighten until an even broader attack was
made upon the economic blights afflicting 40 per cent of
the population and 50 per cent of the area of the United
States.
Nobility and social foresight did not characterize all
New Deal legislation. There was, for example, the Silver
Purchase Act of 1934 as shameful a piece of logrolling as
ever disgraced the statute books. By the terms of this act,
the Government was compelled to buy silver both do-
mestic and foreign until either the price reached $1.29 an
ounce or the stock of silver equaled one-third the stock
of gold. The ostensible purpose of this law was to in-
crease the purchasing power of the silver nations, espe-
cially China and Mexico. Its actual result was, of course,
to line the pockets of silver-mine operators in the six silver-
producing states of Nevada, Idaho, Montana, Arizona,
Utah, and Colorado.
The bill was a fiasco from the start. With silver in the
world market in 1934 at 45 cents an ounce, it rose to 81
cents under Treasury bidding. At this level, the silver coins
of China and Mexico had a greater value if melted down
into bullion and sold to the United States which is ex-
actly what happened. Thus the monetary systems of these
nations became completely disrupted. Trade fell off with
China; Japan smuggled silver out of Manchuria and sold
it to the United States at high prices. For eight years the
Treasury was forced to buy and store underground gi-
248 FANTASTIC INTERIM
gantic quantities of unneeded metal at prices far above
the market value. At the present time the United States
has in its vaults more than 3,000,000,000 ounces of unused
silver 60 times an average year's production and must
continue to keep purchasing more, at a time when there
is a grave shortage of silver for war manufactures.
The Silver Purchase Act was opposed from the begin-
ning by all economists and financiers, but this absurd law
was kept alive by the Senate silver bloc, comprising twelve
Senators of the silver-producing states, backed by agrarian
inflationists and great mining and smelting lobbies. These
elements have the power to stymie the Administration's
entire legislative program; hence their wishes must be
obeyed on the silver question. Nothing could better illus-
trate the evils of a bloc-dominated Congress than the
$3,000,000,000 bribe which the New Deal was obliged to
pay the silver Senators in return for their legislative support.
If the New Deal silver policy challenged lay compre-
hension, the gold policy utterly defied it. During the
banking crisis the President took summary possession of
gold and made some experiments in price-raising. He cut
the gold content of the dollar to 59 cents, thereby en-
abling the Government to issue nearly twice as many pa-
per dollars against the same quantity of gold; controlled
inflation was his objective. He also set the price of gold
at $35 an ounce, thereby causing a tremendous inflow of
gold to the Treasury from domestic and foreign mines.
By 1940 the gold stocks of the United States totaled
$20,000,000,000 about 80 per cent of the monetary gold
in the world. But what good was it? No intelligible an-
swer has yet been given to this question. The chief uses
to which gold was formerly put the "backing" of paper
currency and the settling of international balances no
longer obtained. The yellow hoard finally became so dan-
gerous as a potential basis of credit inflation that the Gov-
ON OUR WAY 249
eminent decided to "sterilize" it by burying it in a huge
grave under Fort Knox. There it lies, a metallic corpse
on which no autopsy has yet been performed.
5, Three Economic Corn Doctors
These were the years when mountebanks cavorted pub-
licly and pushed to vicious lengths their medicine-tent
panaceas. Dernagoguery and pied-piperism had their in-
nings; the unwashed multitude threw its nightcaps in the
air while promises of "ham-and-egg" pensions and vari-
ous share-the-wealth programs fell from the lips of dan-
gerous men. Loudest and most persuasive was Huey Long,
the Louisiana Kingfish, a historically unmatched clown,
who but for his timely death might hav^ poured disaster
over the American people as he had already loosed it on
his native state.
The Kingfish had used Louisiana as a proving-ground
for his political methods and as a springboard for his ma-
nic ambition. Starting as a salesman of a cure for "women's
sicknesses," Huey early learned the arts of greasy elo-
quence and political blandishment. On a borrowed $400
he put himself through a three-year law course in eight
months, and at the age of twenty-one became a candi-
date for the Louisiana Railroad Commission. In screaming
linen and a flashy second-hand automobile Huey pene-
trated remote sections never before visited by office-seek-
ers. He handed out recipes for clabber, raised up hearts
with denunciations of Wall Street and city slickers and
kept at it eighteen hours a day until he was elected. Ten
years later, when he had completed his conquest of
Louisiana, he was an unopposed dictator, bellowing self-
made statutes at the legislature, crushing rivals as a chim-
panzee cracks peanuts, or buying them up with venal cash.
Of one Louisiana senator, Huey said: "I got that guy so
FANTASTIC INTERIM
cheap I thought I stole him." Of another: "I bought him
like a sack of potatoes." With Louisiana sewed up lock,
stock, and cash register, Huey turned his attention to
wider fields, and forthwith had himself elected to the Sen-
ate of the United States.
For the first few months of the New Deal, the King-
fish swung his support to the Roosevelt Administration,
but he became disgruntled when the White House re-
fused to accept his bullying lead in matters of patronage
and Federal funds. During a visit to the President at the
White House, the boorish Long kept a brightly berib-
boned straw hat on his head, removing it only to tap^the
President on knee and elbow to emphasize a point of King-
fish doctrine. Roosevelt, coolly amused, punished the
Louisiana lout by holding up Federal cash and appoint-
ments till Huey's neck cords swelled in anger. Soon it
was open war between the Kingfish and the White House,
and the country got a taste of Huey's vituperative qual-
ity as he spat insults and charges from the floor of the
Senate. His particular target was Jim Farley, whom he
accused (utterly without basis) of diverting Post Office
contracts for personal gain. "Jim can take the corns off
your feet without removing your shoes," he told the Sen-
ate. Sartorially resplendent in a tan poplin suit and a neck-
tie of mottled green and red, he pilloried Administration
leaders while the galleries roared. Down the list he went,
naming the White House hierarchy. He called the Presi-
dent "a liar and a faker." Farley was termed "Prime Min-
ister James Aloysius, the Nabob of New York." Ickes
got the title of "High Lord Chamberlain the Chinch Bug
of Chicago." Secretary of Agriculture Wallace was
dubbed the "Honorable Lord Destroyer of Crops, the Ig-
noramus of Iowa." And General Johnson, the NRA Chief,
was ticketed as "the expired and lamented Royal Block,
Hugh Sitting Bull."
ON OUR WAY 251
"One sure way to avoid Huey P. Long for President,"
the Kingfish warned Roosevelt, "is to adopt God's laws.
. . . Do as God commanded and I will be as little as one
of the sands of the sea." (Aquinas via Baton Rouge.) And
then again: "I'm as big as Roosevelt right now. Why he's
copying my share-the-wealth speeches now, the ones I
was writing when I was fourteen years old."
When asked "Will we ever have Fascism in the United
States," Long replied: "Sure we'll have Fascism, but we'll
call it anti-Fascism."
In 1934 Huey turned his share-the-wealth slogan into
a nation-wide club with no dues, and soon was claiming
3,000,000 members. His Utopian plan promised 4 that
"every family would be 'furnished by the government
with a homestead allowance of not less than one-third the
average family wealth of the country, which means that
every family shall have the comforts of life up to a value
of from $5,000 to $6,000." But when the Kingfish tried
to explain just how this was to be accomplished, he was
something less than lucid. Apparently, holders of various
possessions cash, houses, automobiles, and stock certifi-
cateswould simply turn them over to the Government,
whereupon members of Huey's Every-Man-a-King Club
would file petitions setting forth their needs and would
promptly be furnished with whatever they required,
Carleton Beals called the whole scheme "the weird dream
of a plantation darky."
Long's popularity with the underprivileged elements of
American society is understandable: he simply promised
them something for nothing, and thus fitted in perfectly
with the prevailing El Dorado concept of American life.
The fact that he planned to dispense with the two-party
system, then supplant it with his own political party, a
Fascist setup with the Kingfish as dictator, alarmed his fol-
lowers not at all. It did, however, greatly alarm the more
252 FANTASTIC INTERIM
thoughtful members of society, who saw in Long's pro-
gram merely an extension of his ruthless megalomania.
Such persons were not altogether unhappy when, on Sep-
tember 8, 1935, Huey Long was fatally wounded by a
young physician, Carl A. Weiss, Jr., whose father had
been deeply wronged by the Long machine. The body of
the tyrannicide Weiss was immediately riddled by sixty-
one bullets from the guns of Huey's henchmen. Long ex-
pired a few days later, widely unmourned.
Another defector from the New Deal ranks was the
Reverend Charles E. Coughlin, the "Radio Priest" whose
inflammatory exhortations over the air waves were a
strange perversion of the papal encyclicals of Leo XIII,
plus a Fascism of Coughlin's own brand. This ecclesiasti-
cal demagogue was antilabor, antidemocratic, anti-Semitic,
and antirational Coughlin came to the diocese of St. Agnes
Church in Detroit in 1923. Three years later Bishop Gal-
lagher of Detroit selected the young priest to expand the
Royal Oak parish. At first he broadcast sermons over
WJR; later he gave afternoon talks to children. For four
years his homilies roused no undue attention; then about
1930 he realized that through the Holy Ghost, or other-
wise, the gift of tongues was upon him. In response to a
new leavening of politics and economics in his sermons,
letters started to pour in. At once he spread himself,
formed the Radio League of the Little Flower, grew to
national stature overnight. His tone now became inflam-
matory as he poured forth an indiscriminate stream of
abuse against bankers, mass production, Morgan, Jews,
Russia, and gold. Money came in from millions of lis-
teners, enabling him to create his own radio network,
which eventually included twenty-six stations stretching
from Maine to Colorado. Soon he became a power in
Washington and an accredited spokesman of the New
Deal.
ON OUR WAY 253
But by the end of 1933 Coughlin had left the New Deal
far behind. With impassioned vehemence, he claimed that
the New Deal was not moving fast enough in its program
of taxation, nationalization of banks, abolition of tax-free
bonds, and the protection of the little man. To hasten the
millennium, Coughlin formed the National League for So-
cial Justice, describing it as "a lobby of citizens on a na-
tional scale." It turned out to be a new political party, or-
ganized in detail by local cells and Congressional districts.
Soon Coughlin was predicting the end of the two major
parties in America and the arrival of a Fascist state based
on the Coughlin model.
Meanwhile, the Radio Priest's financial manipulations
were becoming a matter of public interest. An audit of
his operations revealed some embarrassing facts. These
included: (i) the creation of a corporation called the So-
cial Justice Poor Society, designed to help the indigent,
but actually used as a holding company for a private pub-
lishing firm. (2) When the Government published the list
of holders of silver, the largest in Michigan proved to be
the young woman who was secretary of Father Cough-
lin's organization. She held 500,000 ounces, at the very
time when Father Coughlin was crying over the radio:
"The restoration of silver to its proper value is of Chris-
tian concern. I send to you a call for the mobilization of
all Christianity against the god of gold." To many it
seemed that the Radio Priest was using his microphone
pulpit to boost the price of silver, from which profit would
accrue to his undertakings.
Prominent Catholics opposed Coughlin* Al Smith called
him a "crackpot" and Cardinal O'Connell denounced him
as a false representative of the views of the Catholic
Church. But Coughlin flourished, carrying on business
from his old stand at the Shrine of the Little Flower. This
magnificent edifice was constructed "with dramatic the-
254 FANTASTIC INTERIM
atricism. At night great spotlights, arranged with the skill
of a Nazi party organizer, played over the huge relief of
the crucified Christ, who looked down from His cross
upon the gasoline station called "Shrine Super Service"
and the hot-dog stand, the "Shrine Inn."
Of all juvenile plans proposing to make men equal be-
fore Mammon, none was so infantile as the scheme
brought forward by Dr. Francis E. Townsend. So fair was
the illusion created by his project that 25,000,000 people
signed their names to the petition begging Congress to
enact the Townsend Plan into durable law. In mid- 19 34,
six months after Townsend appeared on the political
scene, 3,000 Townsend Clubs were formed. A Townsend
national weekly was circulating, and Townsend buttons,
stickers, and automobile plates were sported by 8,000,000
people old enough to know better.
Townsend, a retired physician of Long Beach, Califor-
nia, was undoubtedly honest, unselfish, and motivated by
the highest principles. Righteous indignation started him
on his crusade. One day in 1933, gazing froip the window
of his home, he saw three old women foraging for their
dinner in a garbage can. For a moment his body was
twisted with physical revulsion, then, straightening his
tall frame, he burst into a torrent of profanity so vehe-
ment that his wife rushed into the room to see what was
wrong. He emptied himself of anger, then in an after-
period of quiet thought the Townsend Old Age Revolv-
ing Pension Plan (OARP) was born. The Townsend Plan
proposed to end destitute old age and at the same stroke
lift the country out of economic stagnation. How? By the
simple process of giving everyone over sixty (8,000,000
people in all) $200 a month the only stipulation being
that the money be spent within thirty days. The plan was
a shining turret of the great American cloud castle, and
ON OUR WAY 255
old folks crowded forward clamoring for immediate and
permanent possession.
Townsend first proposed raising the money by a 15
per cent sales tax, but later calmly changed this to a 2
per cent tax on all business transactions. His simple belief
was that if $2,000,000,000 were forced into the American
economy every thirty days, the consuming power thus
created would start the wheels of production turning, put
the unemployed back to work. This process, he averred,
could be kept up forever. Kathleen Norris, after diligent
study, hailed OARP as "audacious, original, inspired," but
cooler-blooded John T. Flynn pointed out that the pur-
chaser of an ordinary overcoat might have to pay $250
for his garment, to absorb the accumulated taxes beginning
with the sheep-raiser and ending in the clothing store. The
OARP flared up vigorously in the 1936 campaign, then
joined the corpses strewing the broad depression highway,
already littered with the debris of a thousand economic
panaceas.
But the nostrums of Townsend, Coughlin, and Long
(to which should be added Upton Sinclair's Utopian
EPIC) were not peddled in vain. Lest the bayings of
these economic medicine men drown out the New Deal
tom-toms, Roosevelt hastened to shake up some social leg-
islation of his own. In August 1935, the enactment of an
omnibus Social Security Act placed on the statute books
the long-overdue concepts of old-age and unemployment
insurance. Social Security partly banished the specter of
indigent old age that Townsend had properly railed
against. The dread of joblessness was somewhat allevi-
ated by an unemployment-insurance plan, assuring the
job-hunter a .maximum of fifteen weeks' support while
he sought new occupation. In addition, the act allocated
to the various states $25,000,000 to aid dependent chil-
dren, and further called for annual appropriations for
256 FANTASTIC INTERIM
maternal and child health service, benefit payments to the
blind, and the extension of state health services.
These major contributions to the security and well-be-
ing of the people were fought nail and fang by Repub-
licans, who asserted that the President was destroying the
American system of individualism, sapping initiative, and
weaving Communistic threads into the pattern of our state.
4. Nine Old Men
And then the whole New Deal collided with the Su-
preme Court.
Mr. Dooley had said that "the Court follows the elec-
tions," but Mr. Dooley had never seen such an election
as that of 1932. A more universal and popular legend held
that the Supreme Court was an Olympian tribunal com-
posed of buckram demigods, impersonal, severely logical,
unaffected by partisanship, and anchored in geologic strata
impervious to economic earthquakes. The truth is, of
course, quite unlike the myth; the Supreme Court is made
up of nine all too human individuals, carrying a full bur-
den of political and economic imposts. In the year 1935
the exalted bench was literally groaning under the weight
of some fine old vatted Tories whose social philosophy
was as fixed as the wrinkles on their aging brows. Of their
sincerity and integrity there could be no question, but the
undeniable fact was that five men were gowned symbols
of the institutional lag that operated like a dragging brake
on progressive legislation.
Oldest in point of service was Justice Willis Van De-
vanter, born before the outbreak, of the Civil War. Van
Devanter was a hypochondriac/ a fanatic Prohibitionist,
and a legalistic Bourbon who had won his first fees by
defending Western railroads during the land-grabbing
scandals of the i88o*s. Taft had appointed him to the
ON OUR WAY 257
Supreme Court in 1910; for twenty-five years Van De-
vanter's opinions had built a veritable chevaux-de-frise
around property rights. More vinegarishly conservative
than Van Devanter was bachelor James Clark McRey-
nolds, a Wall Street via Tennessee corporation lawyer,
voted by Supreme Court attendants as the narrowest, rud-
est, and laziest man on the bench. In religion he was a
Fundamentalist; politically, he held that the labor move-
ment was a national menace that should be destroyed at
all hazards. McReynolds had served twenty-one years, but
during this period had addressed scarcely one kind remark
to his colleagues. Nor was humaneness likely to be found
in his judicial opinions.
Justice Pierce Butler was another economic royalist who
before his elevation to the august bench had counted
among his clients the Northern Pacific and New York
Central railroads, the St. Paul Gas Light Company, the
Provident Light and Trust Company, and similar corpo-
rate interests. Justice George Sutherland, seventy-four
years old, was a learned bulwark of the status quo as
it had existed sometime prior to 1900. His particular talent
lay in his ability to blend poisonous decisions with judicial
sawdust, then dip the whole into the treacle of sweetness
and light. Whenever a notably galling opinion had to be
written, Sutherland was the gentleman who wrote it. Jus-
tice Owen J. Roberts, pursuivant of the properest Phila-
delphia elements, and a big, impressive, hard-working man,
was the fifth member of the Court who usually voted con-
servatively.
In 4 mid-bench, physically and politically, sat Chief Jus-
tice Charles Evans Hughes, who oscillated with such ease
from one side to the other, that he was dubbed by com-
mentators "The Man on the Flying Trapeze." After a
long and distinguished career of public service, Hughes
had retired as Secretary of State in 1923 "to amass a com-
258 FANTASTIC INTERIM
petence" in private practice. When he became the juridi-
cal All-Highest in 1930, he was nearly seventy years old,
full of honors, and intensely solicitous for what he consid-
ered the proprieties of his Court. Believing that a 6-3 ver-
dict "looked better" to the country at large, he sometimes
shifted his weight around so as to avoid the 5-4 decisions
that popped out of the Supreme Court hopper with em-
barrassing regularity.
The liberal wing of the Court was composed of Jus-
tices Louis D. Brandeis, Harlan F. Stone, and Benjamin
N. Cardozo, who, with analyses quite as cogent as those
of their conservative colleagues, took the attitudes (i)
that it was not the function of the Supreme Court to ques-
tion the political wisdom of a statute, and (2) that human
rights were, strangely enough, just as important as prop-
erty rights.
Such then was the line-up on the Supreme Court bench
when the New Deal embarked on its program of human
underwriting in 1933. Hostility to Roosevelt's program
smoldered in the dry hearts of Van Devanter, McRey-
nolds, Roberts, Butler, and Sutherland. Republicans
eagerly awaited a showdown, confident that the Court
would lose no time in delivering a vigorous rap on the
sconce to Brains Trust theorists. The Republicans were
ominously right. In a series of 5-4 decisions, the Court
invalidated the NRA, the AAA, and the Guff ey Coal Act.
Though their voices trembled with anger, the arguments
of the reactionary judges were meticulously legal. Scrap-
ping the NRA, the Court held that the right to fix wages
and hours was constitutionally vested in Congress, and
could not be delegated to voluntary associations of busi-
nessmen. Upsetting the AAA, which had brought to the
farmers the first ray of hope in fifteen years, Justice Rob-
erts declared that the act was in direct violation of the
Tenth Amendment, which reserved to the separate states
ON OUR WAY 259
all powers not expressly delegated to the Federal Gov-
ernment. In repudiating the Guff ey Coal Act which had
unquestionably brought order and some degree of fair
play to the impoverished soft-coal miners the Court held
that coal-mining did not constitute interstate commerce,
and that "the labor controversies and evils which it is the
object of this Act to regulate and minimize, are local con-
troversies." The act was dissolved, and unspeakable con-
fusion and cutthroat competition returned to the soft-
coal areas.
To all these decisions, Justices Stone, Brandeis, and Car-
dozo wrote caustic minority opinions. Stone, dissenting
from the AAA decision, declared: "Courts are concerned
only with the power to enact statutes, not with their wis-
dom. * . . For the removal of unwise laws from the stat-
ute books, appeal lies not to the courts, but to the ballot
and the processes of democratic government/' But Stone's
pointed dissent could not revoke the decision or prevent
further judgments against the New Deal.
Stung by this piecemeal destruction of his program,
Roosevelt committed one of his rare tactical blunders. De-
claring that the decisions of the Supreme Court had put
the country back into the "horse-and-buggy" stage, he
proposed to "pack the Court" with younger, more sym-
pathetic men. He suggested a law permitting the appoint-
ment of an additional Federal Justice whenever a sitting
Justice reached the age of seventy, but did not choose to
retire. The total number of Justices was never to exceed
fifteen. Actually, there was nothing unprecedented in this
proposal: the number of Supreme Court Justices had been
changed five times in our history. Many citizens, how-
ever, scented danger to the fundamentals of democracy,
and Roosevelt was called a dictator who planned to de-
stroy the traditional division of powers between the ex-
ecutive and judicial branches of the Government.
260 FANTASTIC INTERIM
If the President had held his fire a little longer, he need
never have discharged his volleys against the Court. Time
was on his side. Soon the aged jurists began to retire vol-
untarily, no longer able to sustain the terrific burdens of
their jobs. As McReynolds, Van Devanter, and Suther-
land laid aside their gowns, Roosevelt appointed new Jus-
tices, friendlier to his policies. During the next six years,
Roosevelt named seven new Justices, more than any Pres-
ident since Washington, and the "horse-and-buggy" menace
to the New Deal collapsed like Oliver Wendell Holmes's
one-horse shay, "all at once and nothing first."
5. Labor Omnia Fincit
Of all the social gains made under the New Deal, the
most permanent and important and the most grimly con-
testedwas labor's right to organize. When the NRA was
scrapped by the Supreme Court, Congress quickly passed
the Wagner Labor Relations Act to supplant Section 7 A.
Then the trouble began. Many employers coldly disre-
garded the Wagner Act, refused to treat with the elected
representatives of their workmen, and encouraged the
formation of so-called company unions fake outfits
staffed by officers under the company's thumb. Labor,
awakened to a realization of its own strength, stubbornly
insisted upon its statutory privilege to form its own unions
and bargain collectively. Although the force of law was
behind them, the interpretation of the Wagner Act was
still uncertain. Confusion and irritation mounted between
employer and employees, and a hot rash of strikes brought
labor relations to fever temperature.
But the confusion and hostility existing between worker
and employer were as ping-pong to the internecine strug-
gle going forward within the ranks of labor itself, as two
powerful factors the American Federation of Labor and
ON OUR WAY 261
the Congress of Industrial Organizations battled for
"jurisdiction" over some 30,000,000 laborers. To under-
stand this jurisdictional strife it is necessary to explain
briefly the basic differences between the AFL and the
The American Federation of Labor, organized in 1886,
was founded on the "craft-union" principle. Now the
basis of the craft union is the organization of workers
according to the tools used, and the degree of skill with
which the worker uses them. Medieval in principle, and
based almost wholly on a hand-tool conception of labor,
the AFL functioned fairly well before the advent of high-
speed production. Under the rule of the labor-sainted
Samuel Gompers, it confined its activities to short-range
goals better pay, a decrease in working hours and stead-
fastly kept out of politics. With equal determination it
refused to extend its protection over unskilled workers.
Every AFL union jealously protected its membership;
high entrance fees and rigid entry qualifications kept un-
skilled workers outside the pale of union protection, and
led to a system of "job monopoly" which operated for
the benefit of a comparative few. The division of crafts
was meticulous; in the garment trades there was a Coat
Makers Union, a Pants Makers Union, and a Cap Makers
Union, each with separate jurisdiction and a high sense of
craft exclusiveness. Again, the Cigar Makers Union re-
fused to admit stogie-makers because of the inferior qual-
ity of their product. This "craft envy" caused a weaken-
ing of union strength; each craft would enter into sepa-
rate agreements with an employer in a given industry, and
when one craft went on strike, the other crafts in the
same plant kept on working. Even before the coming of
the belt line, this disunity operated against the best inter-
ests of labor, and gave the employer a strong whiphand
in the determination of hours and wages.
262 FANTASTIC INTERIM
Gross defects in craft-union organization began to ap-
pear when the system of mechanized production struck
its stride. Modern factory techniques cut down the de-
mand for skilled labor; automatic and semiautomatic ma-
chines brought unskilled labor to the fore. At the Ford
plant in 1930, for example, 43 per cent of the operations
required only a single day's training; 36 per cent required
less than a week. Only i per cent of all operations needed
more than a year's training. Yet in the face of this revo-
lutionary change and in an era of consolidating finance
and merging industry, the AFL stuck to its outworn crafts
philosophy and wasted its energy in jurisdictional disputes.
But more tragically, it made no attempt to organize nearly
30,000,000 unskilled workers, and jealously resisted any
attempt on the part of these workers to join existing AFL
unions.
In addition to being a social anachronism, the AFL was
also sapped by racketeers. Grafters, extortioners, and gang-
sters ran the "locals," mercilessly squeezed dues-paying
members. In Chicago, Detroit, and New York, mobsters
were in control of the building trades, the cleaning, dye-
ing, coal, and trucking industries. Yet these criminals were
protected by labor officials, on the theory that it was bet-
ter to countenance racketeering than to hurt the general
trade-union movement by exposing it. This racketeering,
based upon stacked constitutions which give union heads
absolute power, could have been swept away easily, but
neither Gompers nor Green ever took one truly construc-
tive step to reform these constitutions.
Speaking before the annual convention of the AFL in
1930, Green asserted: "If there is brought to my attention
the racketeer, moving under the garb of trade-unionism,
and I can place my hands on him with convincing evi-
dence, I will drive him from the movement if I can. n
Despite this militant statement, Green repeatedly begged
ON OUR WAY 263
off from such action on the plea that he "lacked jurisdic-
tion." When William Fellowes Morgan, Jr., New York
City Commissioner of Markets, investigated poultry rack-
eteering, he found that the AFL would not take action
when a clear and definite case of corruption was proved
against labor leaders. Morgan stated: "Whenever I appeal
to the heads of labor to take definite action against rack-
eteering labor leaders, I come up against a stone wall."
Slothful and racket-ridden, the AFL was ill prepared
to serve labor's interests when the Wagner Act was passed.
Although labor was screaming for organization and the
Government was supporting the work, the moss-bound
AFL was not interested in extending the benefits of union-
ism to the masses of industrial, that is, unskilled, workers.
Green and his lieutenants had increased the AFL rolls by
a bare 13 per cent; in 1933 the total membership of AFL
unions was slightly more than 2,000,000.
The shocking failure of the AFL to answer the prayers
of industrial workers led to a revolt within the organiza-
tion. Led by John L. Lewis, beetle-browed president of
the United Mine Workers, the Committee for Industrial
Organization was formed in 1935. The committee was
made up of nine labor chieftains, including Lewis, Philip
Murray, Sidney Hillman, and David Dubinsky. The QO
did not secede from the AFL at once. It was not until
1937 that the AFL instructed its state federations to
purge themselves of all who belonged to the QO unions.
Then the war was on. In October 1938, the QO trans-
formed itself from a temporary committee into a per-
manent Congress of Industrial Organizations, and began its
sensational drive for membership. The battle between the
two unions enormously discredited labor and its leaders.
Headlines puzzled, confounded, and angered the citizenry.
Most people did not understand what was happening when
they read: "SHOTS FROM cio OFFICE WOUND NINE OF RIVAL
264 FANTASTIC INTERIM
UNION." "SEVEN HURT IN CIO-AFL RIOT OVER WHICH SHALL
PICKET PLANT." "LEWIS MEN REPEL AFL WORKERS' ATTEMPT
TO REOPEN MILL AT CAMBRIDGE, MASS. . . . TEAR GAS ENDS
FIGHT." "RIVAL UNIONS BATTLE AGAIN, six PERSONS IN-
JURED." And so on. What the people did not comprehend
was that a new principle of labor organization by indus-
tries rather than by crafts was fighting for a recognition
stubbornly denied by the older union.
With bull-like vigor, Lewis proceeded to organize the
rubber, automobile, and steel workers along industrial
lines. His first important victory was won in the Akron
plant of the Goodyear Company, where the workers spon-
taneously introduced the sit-down strike. Instead of walk-
ing out, so that strikebreakers could take their places, the
men merely sat down at their machines and refused to
budge. But this was only the prelude to the monster Gen-
eral Motors conflict in January-February of 1937. "It was
more than a strike," says Edward Levinson. "It was a
momentous struggle between aroused forces of labor and
the third largest corporation in the country, typifying
years of unchallenged anti-unionism."
The General Motors strike was not primarily a wage
dispute. It was precipitated by a combination of the
"speed-up" and espionage. The speed-up had long been
a menace to the health and endurance of workers. Belt-line
production was based on speed, and laborers who could
not meet the pace were tossed onto the scrap heap, burned
out at forty. "We don't want to be driven," said the
workers, then added, "and we don't want to be spied on."
Labor spies infested the automobile factories. In the eight-
een months prior to the Flint strike, General Motors spent
$994,855 on private detectives whose chief job was to
ferret out union organizers and report any man who so
much as mentioned union matters. It may seem strange to
many Americans that in 1936 any workman who discussed
ON OUR WAY 265
the problems of labor with his fellows during lunch hour
stood in danger of dismissal and the blacklist.
A detailed statement of workers' grievances was laid
before the corporation, requesting an immediate confer-
ence on the speed-up and recognition of the CIO as the
sole bargaining agent of all GM employees. This appeal
was flatly turned down by Messrs. Sloan and Knudsen,
and the workers dug in for a test of endurance, giving
their new-found weapon, the sit-down strike, its first large-
scale trial.
The fight centered in the Flint Fisher Body No. i plant.
While Governor Frank Murphy of Michigan labored with
archangel patience to arbitrate between GM management
and CIO leaders, sporadic outbreaks occurred between
strikers and local police. When GM refused to allow food
to be brought in to the strikers, a flying wedge of workers
laden with sandwiches and hot coffee broke through the
police cordon in a successful attempt to provision their
beleaguered brethren. In the ensuing fray, fourteen strik-
ers were wounded and the city of Flint teetered on the
rim of eruption. Property rights were undoubtedly in-
fringed by the sit-downers, but Governor Murphy, believ-
ing that human rights were more precious than property
rights, refused to employ State Guard bayonets against the
strikers. In vain did Secretary of Labor Frances Perkins
confer with Sloan and Knudsen; not until an imperative
request came from President Roosevelt did the GM execu-
tives agree to meet with John L. Lewis Governor Mur-
phy still in the role of peacemaker. The chief issue now
was the insistence of Lewis that his automobile union be
given exclusive recognition. Since the sit-downers could
not be evicted by legal methods, General Motors resistance
gradually weakened. Murphy's efforts were rewarded on
February n by a settlement which reflected an almost
complete victory for Lewis. Exclusive recognition was ac-
266 FANTASTIC INTERIM
corded the CIO unions; no sit-downer was discharged and
automobile workers were to be permitted to wear union
buttons and discuss union affairs during leisure hours. The
spy system was thus ended; the speed-up was controlled
by a committee composed of workers and executivesand
to cap it all, General Motors announced a wage increase
of 5 per cent.
Lest this increase seem to smack of altruism, it must be
pointed out that the automobile business was enjoying a
considerable boom in 1937, and General Motors was fear-
ful lest Ford, not yet organized, would skim the cream off
the market. "Big Steel/ 7 also bounding along at capacity
production, thought it best to capitulate gracefully, and
volunteered to sign a contract with Lewis. CIO was rolling
now; it had 3,718,000 members, and the prestige of John
L. Lewis was mounting daily as William Green and his
racket-ridden AFL were outdistanced. But trouble was in
store for the CIO; it ran into terrific opposition from
"Little Steel," headed by doughty Tom Gi 
