A Marxist analysis
of the New Deal conducted in median res
(and one hostile to Stalinist distortions about "united fronts").
To begin with, Roosevelt's economic interests were parsimonious with those of the class he was ostensibly to 'betray'.
... Why was Roosevelt selected to “lead” the country out of economic chaos? Not only because he had caught the nation’s attention as a much advertised “liberal” politician, but even more so because his own economic interests were identical with those of the group pushing his candidacy.
James Roosevelt, father of Franklin D., one-time vice-president of the Delaware & Hudson R.R., accumulated such a tremendous fortune in railroad organization, both down South following the Civil War, and in the East, that he was considered one of the five richest men in New York City. Although young Franklin D. had expressed a desire to enter the Navy, the elder Roosevelt persuaded him to study law instead and thus better equip himself for the ultimate management of the extensive Roosevelt holdings.
Following graduation from Harvard and Columbia Law School, Roosevelt entered the offices of the best established firm of management lawyers in New York City. While in their employ, he directed the affairs of the huge Astor estate, and thereby established a very close friendship with William Vincent Astor, one of the country's most influential industrialists and bankers. In a spirit of fun, Roosevelt then entered politics. Running for the state Senate on the Democratic ticket, he surprised everyone by capturing the office. No sooner was he seated, than Roosevelt, the comparatively unknown, drew national attention to himself by leading an opposition to the Tammany nomination for U.S. senator (in those days, 1911, they were elected by the state legislature). Thus he gained through this one act that unfounded reputation for unselfish devotion to the people's interests that has endured to this day.
Next Roosevelt boosted Woodrow Wilson for the Democratic presidential nomination in 1912, stumping for him afterwards during the successful election campaign. As a reward, Wilson appointed him Assistant Secretary of the Navy. Roosevelt spent seven years in this position. Several months ago, the Administration publicity agencies made much of the State department's order removing the U.S. Marines who had been stationed in San Domingo (Haiti). They discreetly neglected to mention that it was this same Franklin D. Roosevelt who sent them there in 1913 in his first official act as Assistant Secretary ostensibly to protect American lives, actually to protect American investments, Astor interests among others! During the summer and fall of 1915, our peace-loving Asst. Secretary of the Navy began preparing the Navy for eventual participation in the World War, two years before our actual entry! In addition, he developed a gift for oratory and began to advocate publicly for a much larger Navy. This missionary work was largely instrumental in causing President Wilson to sponsor the largest Navy appropriation bill up to that time. Passed in 1916, it provided an appropriation of $320,000,000 for naval expansion.
Roosevelt is not the only member of his family with extensive railroad holdings. His first cousin on his mother's side, Lyman Delano, is today Chairman of the board of directors of the Atlantic Coast Line R.R. Co., the Louisville & Nashville, and has an interest in many others. Other relatives are J.J. Pelley, recently resigned president of the New York, New Haven & Hartford R.R., and a shareholder in others; and Mr. Curry of the Union Pacific. Roosevelt's three most intimate friends are likewise industrialists with huge railroad holdings. The aforementioned Vincent Astor, besides extensive interests in industry and ocean transportation, is a director of the Great Northern Ry. Co., and the Illinois Central. Wm. A. Harriman, heir of the old railroad king, is a director of both the Illinois Central and the Union Pacific. Wm. K. Vanderbilt holds directorates in the New York Central, the Michigan Central, and other railroads. Besides these relatives and close friends, all who supported Roosevelt's presidential campaign with substantial financial contributions, almost every other railroad mogul in the country likewise backed him: Robert Goelet, Arthur C. James, Edward S. Harkness, C.S. McCain, David Bruce, Howard Bruce, Wm. T. Kemper, and F.H. Rawson. The railroad group behind Roosevelt numbered almost everyone but, significantly enough, the representatives of the roads controlled by the J.P. Morgan financial interests.
It was only natural that the railroads and related economic sectors would turn to one of their own in the midst of the downturn.
The railroads had indeed taken the worst beating of any capitalist group during the period of the crisis, and certainly needed help. For example, in 1932, 150 selected railroads showed a deficit of $150,634,000 compared to earnings of $896,807,000 in 1929. The railroad equipment industry led by Wm. Woodin also marshalled behind Roosevelt.
So too did other leading lights of industry. Western mining interests, which had a stake in the 'progressive' wing of the Democratic Party since the days of William Jennings Bryan's inflationary free silver schemes, stood fast for the New Deal.
Another section of industry that rallied behind Franklin D. was the mining, particularly the precious metals - gold and silver - group. Most prominent here were the Guggenheim and Bernard M. Baruch interests, exerting a virtual monopoly on silver through control of the American Smelting & Refining Co., which either extracts or refines for others almost one-half of the world’s silver produced yearly. Included with these is also Wm. R. Hearst, newspaper publisher, large Mexican silver mine owner and shareholder in the Homestake Gold Mining Co. This group in advocating gold devaluation and greater use of silver for monetary purposes enlisted the large farmers' vote who demanded that farm product prices be raised through monetary legislation.
So too did farming equipment consortiums.
A political party that promised to raise farmer purchasing power (fallen in 1932 to almost one-half that of 1929) was bound to gain the support of industrial interests dependent on the farmers and so we find the McCormicks, owning the monopolistic International Harvester Co., and other farm implement and fertilizer manufacturers joining the Roosevelt band-wagon.
And above and beyond all this were the internecine struggles of two factions of finance Capital, the 'liberal' Rockefellers and the 'conservative' Morgans, vying for control of Chase Bank. Roosevelt directly enabled a coup at the head of Chase by way of Congressional hearing, allowing the Rockefellers to replace a Morgan-appointed chief executive with one of their own.
Behind both political parties was also a grim struggle between two factions for control of the giant Chase National Bank. Backing the Republican Hoover were his 1928 mentors, the House of Morgan. Opposing J.P. Morgan was this other group of stockholders headed by John Rockefeller, Jr., and including Vincent Astor, the Vanderbilts and Guggenheims. The fight centered about the policy of J.P. Morgan, who controlled the bank, in forcing the Chase National to engage in practices outside its own legitimate field, such as lending money for speculative purposes, the floating of new stock and bond issues, and buying and selling on the stock market. Rockefeller, Jr., and his allies who are primarily industrialists, violently disapproved of this policy blaming it in great part for the stock market crash of '29. They not only wanted to gain control of the bank and return it to its normal commercial banking practice, which is to provide funds to industry and business for meeting current expenses, on good security, but they wanted control of the federal government in order to enact federal legislation against the Morgan policy which had become widespread under the influence and example of the Chase National. The Lehman Bros. (among which is Gov. H.H. Lehman of N.Y.) the country’s second largest firm of investment bankers, and other investment houses such as Halsey Stuart, supported this attempt to legalize against their competitors.
Roosevelt was no sooner inaugurated than he commenced to remember the “forgotten men”. First on the list, of course, were the Rockefellers. So on March 15, 1933, J.P. Morgan was summoned before the Senate Banking Investigation. His revelations and those of Albert H. Wiggin, the nominal head of the Chase National appointed by Morgan, were so damaging that Wiggin was forced to resign and the Rockefellers gained the balance of voting power, enabling them to elect their own man Winthrop W. Aldrich to the Chairmanship of the Board of the Chase National Bank. When Aldrich appeared before the Banking Investigation, he announced that the Chase National would divorce its Chase Securities Corp. He argued for a complete divorce of the securities business and commercial deposit banking. This suggestion was embodied in the Glass-Steagall Banking Act (June 16, 1933) ordering all commercial banks to be separated from their securities business within twelve months. Restrictions were also placed against loans for speculative purposes.
And as for the mining magnates?
The devaluation of the gold dollar, followed later by the nationalization of silver, enriched immediately the gold and silver producers. This monetary policy plus crop curtailment as practiced by the A.A.A. has increased farm prices to some degree. The Administration, however, overlooked the obvious fact that higher food prices raise the cost of living for the worker, which is directly opposed to the interests of the industrialist who desires low production costs.
I would suggest the New Deal was hugely effective... for those whose interests it served.