This Week in History:
June 24-30, 1936:
FDR Nominated for Second Term as President
June 2012
 Franklin D. Roosevelt.
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More than 100,000 people jammed into Franklin Field at the University of Pennsylvania when President Franklin Roosevelt arrived, on June 27, 1936, to accept the Democratic Party's nomination for a second term as President. It was one of the most hard-hitting speeches of Roosevelt's career, an answer to the disturbing events which had challenged the nation over the previous nine months.
The American economy had been improving since Roosevelt's New Deal programs had begun to take effect. Payrolls had doubled, the cash income of farmers had almost doubled, and both stock market and real estate values had risen. But, the more that conditions improved, the louder and more strident became the personal attacks on President Roosevelt. These attacks came from the major investment banking houses, major corporations, and their propaganda outlets, the American Liberty League, and many of the major newspapers.
 Alfred Smith, Franklin Roosevelt's enemy in the Democratic Party and an early promoter of the Red Scare.
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On Feb. 25 of 1936, a conclave of FDR-haters gathered at the Mayflower Hotel in Washington to cheer former Democratic Presidential candidate Al Smith as he stated that "There can be only one capital—Washington or Moscow." Smith had sounded one of the main themes of the anti-New Dealers, and that was that Roosevelt was taking American down the path to a socialist or Communist dictatorship. The Chicago "Tribune" ran a headline that said "Moscow Orders Reds in U.S. to Back Roosevelt," reporting on a speech made by Earl Browder which was reprinted in Russia. The other anti-Roosevelt theme was that he was leading the country to bankruptcy.
Governor Philip LaFollette of Wisconsin said that the vengeful reaction against Roosevelt's program was like the drunk you picked up from the gutter, who now resented you forever because you had seen him in such an embarrassing position. Roosevelt liked to tell a different story on the same theme. A man in a silk hat fell off a pier and was drowning in the ocean. A bystander jumped off the pier and saved him, but the drowning man's silk hat floated away. The bystander was thanked profusely by the man for saving his life. But three years later, the same man attacked the bystander for not saving the silk hat.
One of the ways that the now-rescued man tried to regain his silk hat was demonstrated by the DuPont family, many of whose members had attended Al Smith's diatribe and were reported to have great influence with him. Treasury Secretary Henry Morgenthau noted in his diary that he had been informed by a banker in strictest confidence that the executives of General Motors, in which the DuPonts had heavy interests, had been selling the dollar short and buying British sterling.
Another side of the attempts to destroy the New Deal was provided by the actions of the Supreme Court in 1936 to return to deregulation of the economy. On January 6, the Court had declared that the Agricultural Adjustment Act was unconstitutional because it was a scheme to impose federal regulations in a matter reserved to the states. The AAA had paid farmers to produce less, using funds collected from taxes on those companies that processed the food. The majority opinion was written by Justice Owen Roberts, a former corporate lawyer who had had as his client the Philadelphia affiliate of J.P. Morgan.
The Roosevelt administration rightfully saw the decision as aimed specifically at federal regulation, for a state legislature would find it very difficult to regulate farm production unless other states followed the same policy. Agricultural policy had to be national. Although the Supreme Court's next move was to uphold the Tennessee Valley Authority, it soon moved on May 18 to strike down the Guffey-Snyder Act, which had tried to improve conditions in the coal fields through collective bargaining, wages and hours provisions, and price controls.
Although the government lawyers had proved that strikes in the coal industry affected the railroads, and therefore interstate commerce, the Court's majority ruled that such "incidental effects" on interstate commerce were not enough to justify federal regulation. Ironically and tellingly, the Court had previously held the coal industry to be enough involved in interstate commerce to require a federal judge to sentence striking miners to jail.
The straw that broke the camel's back, and even shocked many Republicans, was a High Court decision in June that invalidated the New York State minimum wage law for women. One-third of the 48 states had adopted laws like that of New York. Three of the four conservative judges who voted to overturn the New York law had been corporation lawyers. Their decision more than implied that the states, just like the federal government, were not allowed to regulate industry. Hours after the decision was handed down, Roosevelt commented that "The 'no-man's-land' where no government can function is being more clearly defined."
The other area where danger to America lurked, and one which was linked to the attempts to destroy Roosevelt's reassertion of the American System, was the international situation. In October of 1935, Mussolini's troops had entered Ethiopia. In March of 1936, Hitler reoccupied the Rhineland, and France did nothing. The rise of Francisco Franco in Spain brought the possibility that fascism would overcome the legitimate government, and in July the Spanish Civil War began. Congress had extended the Neutrality Act for another year, but Roosevelt knew that a weakened economy would not prepare America for a future war that might have to be fought.
After Hitler took over the Rhineland, Roosevelt wrote to U.S. Ambassador to Germany William Dodd:
"Everything seems to have broken loose again in your part of the world. All the experts here, there, and the other places say 'there will be no war.' They said the same thing all through July 1914, when I was in the Navy Department. In those days I believed the experts. Today I have my tongue in my cheek. This does not mean that I am become cynical: but as President I have to be ready just like a Fire Department."
So when President Roosevelt stood under the klieg lamps at Franklin Field to accept the second nomination of his party in 1936, he opened by saying:
"My friends: We meet at a time of great moment to the future of the nation. It is an occasion to be dedicated to the simple and sincere expression of an attitude toward problems, the determination of which will profoundly affect America....
"But I cannot, with candor, tell you that all is well with the world. Clouds of suspicion, tides of ill will and intolerance gather darkly in many places. In our own land, we enjoy indeed a fullness of life greater than that of most nations.
"But the rush of modern civilization itself has raised for us new difficulties, new problems which must be solved if we are to preserve to the United States the political and economic freedom for which Washington and Jefferson planned and fought.
"Philadelphia is a good city in which to write American history. This is fitting ground on which to reaffirm the faith of our fathers; to pledge ourselves to restore to the people a wider freedom—to give to 1936, as the founders gave to 1776—an American way of life.
"That very word freedom, in itself and of necessity, suggests freedom from some restraining power. In 1776, we sought freedom from the tyranny of a political autocracy—from the 18th-Century royalists who held special privileges from the crown. It was to perpetuate their privilege that they governed without the consent of the governed; that they denied the right of free assembly and free speech; that they restricted the worship of God; that they put the average man's property and the average man's life in pawn to the mercenaries of dynastic power—that they regimented the people.
"And so it was to win freedom from the tyranny of political autocracy that the American Revolution was fought. That victory gave the business of governing into the hands of the average man, who won the right with his neighbors to make and order his own destiny through his own government. Since that struggle, however, man's inventive genius released new forces in our land which reordered the lives of our people.
"For out of this modern civilization, the economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks, and securities, new machinery of industry and agriculture, of labor and capital—all undreamed of by the Fathers—the whole structure of modern life was impressed into this royal service....
"The royalists of the economic order have conceded that political freedom was the business of the government, but they have maintained that economic slavery was nobody's business. Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place. The economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain, they seek to hide behind the flag and the Constitution....
"The defeats and victories of these years have given us, as a people, a new understanding of our government and of ourselves. Never, since the early days of the New England town meeting, have the affairs of government been so widely discussed and so clearly appreciated. It has been brought home to us that the only effective guide for the safety of this most worldly of worlds is moral principle....
"We seek not merely to make government a mechanical implement, but to give it the vibrant personal character that is the embodiment of human charity....
"There is a mysterious cycle in human events. To some generations, much is given. Of others, much is expected. This generation of Americans has a rendezvous with destiny...."
The original article was published in the EIR Online’s Electronic Intelligence Weekly, as part of an ongoing series on history, with a special emphasis on American history. We are reprinting and updating these articles now to assist our readers in understanding of the American System of Economy.
