But Roosevelt chose a much more conservative course of action. He declared a four-day national bank holiday, conferred with the nation’s top bankers on his first full day in office, called a special session of Congress to pass emergency legislation, and calmed citizens’ fears with the first of his famous fireside chats. Congress passed and Roosevelt signed the Emergency Banking Act, written largely by the bankers themselves. The banking system had been restored without radical change. Congressman William Lemke remarked, “The President drove the money-changers out of the Capitol on March 4th—and they were all back on the 9th.”9 Roosevelt’s solution to the banking crisis would serve as a template for how he would handle most issues. His instincts were fundamentally conservative. He would save capitalism from the capitalists. As Secretary of Labor Frances Perkins, the first female cabinet officer in the nation’s history, explained, Roosevelt “took the status quo in our economic system as much for granted as his family… he was content with it.”10 But the means he would use to save capitalism would be bold, visionary, and humane. They would transform American life for decades. Perhaps longer.
Though clearly not a radical, Roosevelt laid out an ambitious recovery program during his first hundred days in office. It included the Agricultural Adjustment Administration, to save farming; the Civilian Conservation Corps (CCC), to put young men to work in the forests and parks; the Federal Emergency Relief Administration (FERA) under Harry Hopkins, to provide federal assistance to the states; the Public Works Administration (PWA) under Harold Ickes, to coordinate large-scale public works projects; the Glass-Steagall Banking Act, which separated investment and commercial banking and instituted federal insurance of bank deposits; and the National Recovery Administration (NRA) to promote industrial recovery.
Established by the National Industrial Recovery Act (NIRA), which Roosevelt considered “the most important and far reaching legislation ever enacted by the American Congress,” the NRA was modeled, in part, on the War Industries Board (WIB), which Bernard Baruch had directed during World War I.11 The NRA suspended antitrust laws, effectively sounding the death knell for laissez-faire capitalism. Centralized planning would instead revitalize the shattered economy. Under the NRA, each industry drew up its own code covering wages, prices, production, and working conditions. The largest corporations dominated the code-setting process in their respective industries, with labor and consumer groups playing, at best, a minor role.
The initial NIRA legislation was hastily cobbled together and did not provide clear guidelines for what was to follow. Many liberals applauded it. The Nation welcomed it as a step toward a “collectivized society.”12 It was Roosevelt’s choice of General Hugh Johnson to administer the NRA that gave it its distinctive coloration. Johnson was Baruch’s man. They had worked closely together on the WIB. After retiring from the army, Johnson became an advisor to Baruch in his business dealings. Johnson’s leadership of the NRA has fueled allegations that the New Deal was fascistic—a nonsensical and dangerous notion later peddled by Ronald Reagan and more recently by conservative writer Jonah Goldberg. Reagan touched a raw nerve when he said during the 1976 presidential campaign that “fascism was really the basis of the New Deal.”13
Johnson was the exception rather than the rule. He did not hide his fascist sympathies. In September 1933, he reviewed the 2 million–strong NRA parade down New York’s Fifth Avenue. Time magazine reported, “General Johnson, his hand raised in a continuous Fascist salute, had declared the parade to be ‘the most marvelous demonstration I have ever seen.’”14 Johnson gave Frances Perkins a copy of Raffaello Viglione’s fascist tract The Corporate State. Roosevelt finally removed him because of his erratic behavior, abrasive personality, heavy drinking, and penchant for antagonizing labor. In his deeply emotional farewell speech, he celebrated the “shining name” of Benito Mussolini.15
There was great uncertainty about where Roosevelt was taking the country, leading some observers to compare the United States with Fascist Italy. The Quarterly Review of Commerce wrote in autumn 1933, “Some see in his programme a movement toward a form of American fascism. In fact the tremendous concentration of power in the hands of the president, the new codes under the National Industrial Recovery Act regulating competition, the fixing of minimum wage rates, of maximum working hours in industry, and the general policy of economic planning and coordination of production, all strongly suggest essential features of the Italian fascist programme.” The writer described Johnson’s anti-labor proclivities, including his delivering, on October 10, “a warning to labour in no uncertain terms that ‘strikes were unnecessary’ under the Roosevelt plan and that no opposition of any kind would be tolerated.”16
Although a plethora of right-wing groups emerged during the 1930s, the fascist threat that Sinclair Lewis warned about in his 1935 novel It Can’t Happen Here never took hold in the United States. That is not to say that Mussolini and Hitler lacked admirers. Time and Fortune were unabashed supporters of Mussolini. In 1934, the editors of Fortune magazine extolled Italian fascism, which embodied “certain ancient virtues of the race [including] discipline, duty, courage, glory, sacrifice.”17 Many American Legionnaires felt the same way. Legion Commander Alvin Owsley declared in 1923 that “the Fascisti are to Italy what the American Legion is to the United States,” and the organization invited Mussolini to address its national convention in 1930.18 Elected officials including Pennsylvania Senator David Reed praised Mussolini and proclaimed, “if this country ever needed a Mussolini it needs one now.”19