Defeatism Must Go
A FREE PEOPLE CAN SOLVE ITS PROBLEMS IF GIVEN A CHANCE
By THOMAS E. DEWEY, District Attorney of New York County and Candidate for the Presidential Nomination in 1940
Delivered at Minneapolis, Minn., December 6, 1939
Vital Speeches of the Day, Vol. VI, pp. 157-160
GOVERNOR STASSEN, Fellow Republicans, and— I hope—some Democrats and Farmer-Laborites: I have a special reason for being glad to be in Minnesota tonight. Yours is a barometer state—a good indicator of advanced political weather. Settled by hardy people, your state has been agitated by many violent political storms. It has been the home of many ideas, many experiments, many new movements.
Sometimes it has been called reactionary—sometimes radical.
Today your state has come into quiet, steady waters. It has weathered the storms, thanks to a new Minnesota Republicanism, led by a balanced, broad-minded sanely liberal executive—Harold E. Stassen. I take his election as a national omen.
Tonight I am going to talk about the state of mind of our national government and the resulting state of mind of thenation. In doing this I am not going to attempt to propose specific solutions to the grave problems we face in agriculture, in labor, in business, in unemployment, in finance. I propose instead to deal with the difficulties as a whole and with their fundamental cause.
First of all, we must make up our minds on one important thing. Do we believe in the continuous growth of this country or do we believe we have reached our economic limits.
Last year you in Minnesota made up your minds. You elected a new Republican state administration which believes in the orderly but steady growth of your state. Your Governor is an enemy of extravagance, an enemy of corruption and a friend to effective government and to industrial peace. A civil-service merit system has been enacted for state employees. Bold economies have been introduced without sacrifice of essential services. All state departments have been put under the control of a state business manager, who, believe it or not, cannot authorize expenditures of state funds unless they are met by taxes.
Governor Stassen, it is because of Republicans like you that I shed no tears over the future of the Republican party.
Governor, I have just one more thing to say to you—-a very stern thing. I am sometimes accused of being young. I accuse you of being five years younger. And it's true. You're guilty. Governor, I envy you your youthful vigor.
You do not suffer from defeatism. Your administration does not suffer from defeatism. But the nation still does.
Our greatest national enemy is defeatism. We have Republicans who do not think that our party can win through. We have Republicans and Democrats who do not think our country can win through. We have Europeans and Americans who do not think that civilization can win through. I am not ashamed to confess the abiding faith that our party, our country, and the world, will win through.
To be sure we have a crisis here in America. But ours is a crisis of faith—faith in ourselves, in our system, and in our own traditions. On the solution of that crisis everything depends. If here in America we can rout defeatism, if here we can regain courage and unbounded activity, if here we can unite industry and agriculture and labor for an invincible America, then, and then only, can we contribute to the peace of all the world's people.
Our problems are massive. They are acute. They can't be wished away by singing "Happy Days Are Here Again." Happy days are not here again. Our days are crowded with human perplexities, human misfortune, and human pain. This distress is reflected in every state and in every part of our national economy.
Here in Minnesota, for instance, the buying power of your agricultural products has declined drastically in the past ten years. Let's think back to the years 1926 to 1928. Even those years weren't too satisfactory to the farmers, were they? But let's take them as a basis for comparison. Giving the figure 100 to all the prices of that time, industrial and agricultural. Then let's look at the prices now.
Instead of being 100, grains are now on average at 61. But fertilizer, which the farmer buys, is at 77. Fuel, which the farmer buys, is at 82. Building materials are 87 and farm machinery is 95, while grains are only 61.
Let me put that last figure in another way. In 1926 a farmer could have bought a plow for seventy-five bushels of grain. Today he has to pay 116 bushels of grain for the same plow. Clearly we are still far, far away from any reasonable parity between agricultural and industrial prices.
What is the use of telling the farmer to quit politics and go home and "slop the hogs"? I say he ought to stay in politics, so that these inequalities shall be adjusted.
But the basis for the solution is not to be found in agriculture alone. It is not to be found in the State of Minnesota alone. Let me put it to you this way.
Minnesota, like every state, exports its products. It exports agricultural products to the industrial regions of the rest of the nation. These regions are your market. The trouble is not in Minnesota, but in its market. The real trouble lies in the long continued break-down of our whole economic machine. For his own sake the farmer must take an interest in the restoration of industry, just as industry must take an interest in the restoration of agriculture. We live in one nation and in one economy.
When President Roosevelt was inaugurated, he said this: "Our greatest primary task is to put people to work." There he defined the issue but has failed to find the solution. After seven years, putting people to work is still our greatest task.
The great, unanswered question is: What keeps them out of work?
Some people say they do not want to work. That is a vicious slander on the American character.
The other day, in New York, the city authorities announced that they needed fifty-eight automobile mechanics. Hundreds of men stood in line all night to try to get one of those jobs. Six thousand, five hundred men applied for those fifty-eight jobs. Those men could have been on relief. But they didn't want relief. Nor will the ten million others prefer relief the day they are offered work with any reasonable belief that it is a permanent job.
Now, some people say unemployed capital does not want to work. Well, let me tell you a little story about that.
Last September 1 the Booneville Savings Bank, of Booneville, Iowa, closed its doors after having been in business for thirty-three years. There was nothing the matter with the bank. It was entirely solvent and it paid out in full the $267,000 of its deposits. In a letter to the depositors the president of the bank explained the reasons for closing. Here's that letter and I quote his words:
"The principal reason for quitting is that we do not know what to do with our money."
Now, why didn't that bank know what to do with its money? Obviously because the customers of that bank were not seeking loans. They were not branching out into new and increased ventures.
Unemployed capital today is about the same as it has always been. It will go to work if it can find a place to work with a reasonable chance of not losing both its job and itself.
I say to you that both capital and labor want to work, that both detest idleness. I say to you that we are going to get exactly nowhere telling lies and libels about one another. We have been getting nowhere for seven years, telling lies and libels about each other.
So I ask you once more: What keeps the unemployed man out of a job? This time I ask it in broader terms.
The New Deal has a committee called the Temporary National Economic Committee. The New Deal has been in power nearly seven years—in case you forget. Its Temporary National Economic Committee this year reports as follows. I quote:
"The American economic machine is stalled on dead center."
After seven years of lending and spending, seven years of priming the pump, of pushing the accelerator down to the floor on more and more and more public spending, seven years of warming up the cylinders of the machine with more than twenty-two billion dollars of new national public debt —after seven years what does the New Deal repair crew tell us? It admits defeat. It says: "The American economic machine is stalled on dead center."
I have been asking: "What keeps the unemployed man out of a job?" Here is one of the answers. This New Deal repair crew does not believe in this machine.
It believes in public spending. But does it believe in what has always hitherto made the machine pick itself up and bound forward again after every temporary slow-down? Does it believe in those absolutely necessary new, great, private enterprises that create jobs?
Just so there shall be no doubt about it, let me quote the President himself. The whole of the basic economic theory and of the basic economic practice in the New Deal is in the speech the President made in San Francisco in 1932.
In that speech he said some fine things. For example: "America is new. It is in the process of change and development. It has the great potentialities of youth. We can still believe in change and in progress."
That statement was splendid! And true! But listen now to the part of his San Francisco speech which discloses his
real philosophy. I quote excerpts, but I quote them in harmony with the full actual meaning. Here are his words:
"Our industrial plant is built. The problem just now is whether under existing conditions it is not overbuilt."
"A mere builder of more industrial plants . . . is as likely to be a danger as a help."
"Our task now is not . . . necessarily producing more goods. It is the sober, less dramatic business of administering resources and plants already in hand. . . ."
This quotation contains the whole outlook of the New Deal: The established plants are all right. But the newplants, the new adventures, the new industries, are unnecessary, and even possibly undesirable. There is nothing left to do. All that remains is to divide up what we got from the Indians. Such is the theory of the New Deal Administration. Such is its practice.
With this philosophy I totally and absolutely disagree. Our country has lived through this sort of theory several times before. We survived it. One time was in the '80s of the last century. I want to read to you from the annual report of the United States Commissioner of Labor for the year 1886. Note these words carefully. They are so full of pessimism they will encourage you. This is what the commissioner solemnly reported:
"It is true that the discovery of new processes of manufacture will undoubtedly continue . . . but it will not leave room for a market extension such as has been witnessed during the last fifty years."
Note that! The time of extension, of expansion, is over. In 1886! And finally, it said:
"And it will not afford remunerative employment for the vast amount of capital that has been created."
Note that! No more use for idle money. No more chance for profitable new investments. No chance for the future of our growing population. All this in 1886.
Aren't we lucky that the men who put their money into the early hazard of the automobile industry didn't read this report? Aren't we lucky that our radio pioneers, and our motion picture pioneers and our aviation pioneers, in their ignorance, never heard of it? Aren't we lucky that a host of other pioneers, since that time, have given us new commodities and new services with no recollection of the economic defeatism of 1886?
The fifty years which followed make the defeatists of that day seem ridiculous to all of us, and yet today the apostles of despair are with us again. They have learned nothing from history. Again they occupy high places in the national government; again they tell us the same old story. I venture to say it will sound as silly fifty years from now as do the statements by the Commissioner of Labor of fifty years ago.
But today we have the same old economic defeatism all over again. It seems to come back upon us every so often, and not only here but in all the rest of the world.
In the year 1800 the British statesman, the elder William Pitt, said:
"There is scarcely anything around us but ruin and despair."
In 1849 another British statesman, Benjamin Disraeli, said:
"In industry, commerce and agriculture, there is no hope."
Here we are, at it again. Here we are, at a time when the American Federation of Labor reports that there are 53,000,000 employable workers in the United States, compared with 48,000,000 just ten years ago. A net increase of half a million new workers a year! And yet, the President says:
"Our industrial plant is built."
In effect, he says there is no place in this country for the people who are growing up in it. And the tragedy is they are beginning to believe him. Only last week the Young Men's Christian Association reported on a widespread survey among our youth. They told us that 80 per cent of the young men and women believe that ability no longer offers assurance of success in America. The philosophy of despair is indeed taking root. What the New Deal means to them is that it would have been better had they never been born.
Its theories have infected the thinking of the rest of us. Industrialists, labor leaders, social workers talk about "vast permanent unemployment." In the 1920's we had no unemployment that was "vast." Now they say we must face an unemployment that will be "vast" and that will be "permanent."
The President has said we have a rendezvous with destiny. We seem to be on our way toward a rendezvous with despair.
Fellow Republicans, as a party, let us turn away from that rendezvous and let us start going in the other direction and start now.
The one ultimate unforgivable crime is to despair of the republic. The one essential to the survival of the republic is to know it will survive and will survive into a future which is always larger and is always better.
Nor is history the only answer to these gloomy predictions. For we have about us in every state, in every city, on every farm, the answer. Here in our own America we have the man-power, the wealth, the natural resources, the genius to invent and create. We have the industrial skill to release that ever-flowing stream of new inventions and greater productivity wherein lies the future of our own America. I don't say to you, close your eyes and have faith—I say to you, open your eyes, look around you and be convinced.
Here is the final answer to the defeatism of the New Deal.
All history proves it is wrong. Our own eyes and our own brains tell us it is wrong. And because its basic theory is wrong, it has done only half its job. It is a duty of national government to perform its social obligations. I believe this Administration has sincerely attempted to fulfill those obligations. But that is only half the job. The other half is to maintain, to encourage the economic system which supports the government and makes performance of social obligations possible.
Society has a permanent, deep-rooted obligation to its aged, its blind, its sick, its unemployed. But it is not enough to say no one shall starve. It is a cruel illusion to pass laws which are a mere promise without also taking measures necessary to the fulfillment of that promise. The present Administration has thought it well enough to make the promise, leaving the performance to come from the savings of the last generation, under Republican administrations, and mortgaging the earnings of the next generation, which will also be under Republican administrations.
Our first task is to sweep away the obstacles to that fulfillment.
Until we make up our minds that this is our purpose, there is no use discussing particular problems. These I intend to discuss in future speeches. Right now our need is for agreement on fundamentals.
America is not finished. It need never be finished. There is no limit to America.
There is a force in this country that has been held in check which once released can give us the employment that we need. It has nothing to do with slick monetary schemes. It hasn't anything to do with slick economic panaceas. This force is the energy of American enterprise, great and small. Given a chance, it will produce employment, can generate
new purchasing power and set in motion once more the surging flow of commercial venture.
Government hostility, repressive taxation and economic quackery have kept this force from going to work. Our firm resolve must be to give It a chance and to encourage enterprise.
Encouragement of enterprise does not involve tolerance of abuses in business or in any other element of society, civil or criminal. Where there are abuses in business, it is the function of government to correct them as they arise. But we can cure abuses in business without creating abuses by government.
Tonight I propose that we Americans, of whatever party,
make up our minds that we do believe in the continued growth of this country.
Let us know the truth that the frontiers of social and economic expansion of America have not yet been discovered; that there is room and plenty in all this land for all the young men and women who are growing up in it; that there is work for them to do and all that follow.
Let us again learn to believe in the ability of a free people to solve its problems if given a chance.
We can and we will again go forward. There is only one thing I want to do in whatever way I can and that is to help make the courage of eternal youth run once more in the veins of my party and my country.