Baruch's Hidden Role in the Great Tragedies of the 20th Century 1931-1939 - Part 4 of 5
From: Dick Eastman
...In September [1931], Gerard Swope, head of General Electric, far surpassed the radicalism of his old public-works proposal by presenting the Swope Plan to a convention of the National Electrical Manufacturers Association. The Plan, which garnered a great deal of publicity, amounted to a imitation of fascism and an anticipation of the NRA. Every industry was to be forcibly mobilized into trade associations, under Federal control, to regulate and stabilize prices and production, and to prescribe trade practices. Overall, the Federal Government, aided by a joint administration of management and employees representing the nation’s industry, would “coordinate production and consumption.”
...the U.S. Chamber of Commerce endorsed this socialistic plan in December by a large majority, as a means of employing Federal coercion to restrict production and raise prices. Leading the march for approval was the new President of the U.S. Chamber, Henry I. Harriman, of the New England Power Company. Harriman wrote, in his report of the Chamber’s Committee on the Continuity of Business and Employment, that “We have left the period of extreme individualism. ... Business prosperity and employment will be best maintained by an intelligently planned business structure.” With business organized through trade associations and headed by a National Economic Council, any dissenting businessmen would be “treated like a maverick. ... They’ll be roped, and branded, and made to run with the herd.” The president of the National Association of Manufacturers wanted to go beyond the Swope Plan to forcibly include firms employing less than fifty workers. ... Furthermore, former Secretary of the Treasury William G. McAdoo proposed a Federal “Peace and Industries Board” to adjust national production to consumption .....
The historian Charles A. Beard denounced laissez-faire and called for a Five Year Plan of industrial cartels headed by a National Economic Council. And the popular philosopher Will Durant called for naitonal planning by a national economic board, ruling over boards for each industry. Supreme Court Justice Louis Brandeis suggested complete state control of industry on the legal ground of public convenience and necessity.
..... One of the most important supporters of the cartelization idea was Bernard M. Baruch, Wall Street financier. Baruch was influential not only in the Democratic Party, but in the Republican as well, as witness the high posts the Hoover Administration accorded to Baruch’s proteges, Alexander Legge and Eugene Meyer, Jr. As early as 1925, Baruch, inspired by his stint as chief economic mobilizer in World War I, conceived of an economy of trusts, regulated and run by a Federal Commission, and in the spring of 1930, Baruch proposed to the Boston Chamber of Commerce a “Supreme Court of Industry.” McAdoo was Baruch’s oldest friend in government; and Swope’s younger brother, Herbert Bayard Swope, was Baruch’s closest confidant. P.338n Henry I. Harriman, another contributor to the drafting of the NRA, also turned up as a leader in the agricultural Brain Trust of the New Deal. Another Baruch disciple, and a friend of Swope’s, General Hugh S. Johnson, was chosen head of the NRA (with old colleague George Peek as head of the AAA). When Johnson was relieved, Baruch himself was offered the post. See Margaret Coit, Mr. Baruch (Boston: Houghton Mifflin Co., 1957), pp. 220-221, 440-442; Loth, op.cit., pp. 223ff.
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Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little Brown and Company, 1990)
p. 103 Others plastered a red label on Roosevelt’’s agricultural experts, or denounced them as professors who had no knowledge of farm realities. They ignored the fact that while M.L. Wilson, who had developed the domestic allotment idea, did indeed teach at Montana State, he was also running a Montana wheat ranch. Both Secretary of Agriculture Wallace and Assistant Secretary Tugwell, incessantly derided as dreamers, had earlier roots in agricultural business. .. He placated conservatives by announcing in advance that he would appoint Bernard Baruch’’s lieutenant George Peek to be head of the new Agricultural Administration (AAA).
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Freedom From Fear, loc. cit.
p. 118 - 121 If Roosevelt had a plan in early 1933 to effect economic recovery, it was difficult to distinguish from many of the measures that Hoover, even if sometimes grudgingly, had already adopted: aid for agriculture, promotion of industrial cooperation, support for the banks, and a balanced budget. Only the last item was dubious. Roosevelt had pledged himself in the electoral campaign to fiscal orthodoxy and had denounced Hoover’s budget deficits, but doubts about the strength of Roosevelt’s own commitment to fiscal discipline persisted. Hoover worried that FDR would unleash the hounds of inflation, inflicting on the United States the kind of monetary calamity that had befallen defeated Germany scarcely a decade earlier. The German hyperinflation of 1923, as well as the more moderate but still unsettling doubling of American prices between 1914 and 1920, was still fresh in his memory. Those examples put soundmoney men on their guard. Moreover, Roosevelt was a Democrat, and the Democratic Party, since at least the time of William Jennings Bryan in the late nineteenth century, had been home to a large proinflaitonary constituency. Based mostly in the chronically indebted agricultural regions of the South and West, the inflationary element in the Democratic Party was a never-dormant dog roused to noisy life by the Depression crisis.
..... From all sides pressure played upon FDR to commit himself to this or that Depression remedy or structural reform. His passive non-committal posture in these preinaugural days, along with the ever deepening crisis, guaranteed the wild plurality of policies that would be pressed upon him and the sometimes desperate fervor with which they would be urged. Pressure came first of all from his won political staff, the body of economic and legal experts assembled during the campaign and known colloquially as the Brain Trust (originally styled as the Brains Trust).
..... Over the course of several weeks, Roosevelt appeared to find the counsel of three of these academic visitors particularly congenial. In addition to Moley, they were Rexfod Guy Tugwell, a Columbia University economist, and Adolf A. Berle Jr., a professor at Columbia Law School. Together with longtime Roosevelt political confidante Samuel I. Rosenman, cousel to the governor, Basil “Doc” O’Connor, Roosevelt’s law partner, and the financier Bernard Baruch’s colorful protege, Hugh Johnson, they constituted what Roosevelt called his “privy council” until a New York Times reporter coined the name “Brains Trust” in September.
....First, the Brain Trusters agreed that the causes as well as the cures of the Depression lay in the domestic arena. It was futile and pernicious to seek remedies, as Hoover had done, in the international realm. Second they all considered themselves inheritors of that tradition of progressive thought best expressed in Charles Van Hise’s classic work of 1912, Concentration and Control: A Solution of the Trust Problem in the United States. Both Berle and Tugwell in 1932 were in the process of making important contributions to that intellectual tradition with works of their own. Berel, together with Gardiner C. Means, published The Modern Corporation and Private Property in 1932, a book that argued for a redefinition of property rights and more vigorous government regulation of the economy. Tugwell’s Industrial Discipline and the Governmental Arts appeared in 1933. The thread that bound these several treatises together in a common intellectual lineage was the argument summarized in Van Hise’s title: that concentration of economic power in huge industrial enterprises was a natural and beneficial feature of modern, advanced societies; and that these enormous concentrations of private power necessitated the creation of commensurately powerful public controls, or governmental regulatory bodies. Berle and Tugwell carried Van Hise’s thinking a step further when they argued that it was government’s right and responsibility not merely to regulate discrete economic sectors but to orchestrate the economy’s various parts according to an overall plan. Third, these ideological commitments implied hostility to what the Brain Trusters identified as “the Wilson-Brandeis philosophy” of trust-busting, or what Moley mocked as the quaint belief “that if America could once more become a nation of small proprietors, of corner grocers and smithies under spreading chestnut trees, we should have solved the problems of American life.” The Brian Trusters regarded Louis Brandeis as Woodrow Wilson’s “dark angel,” the man whose trust-busting advice, Tugwell thought, had mischievously derailed the early twentieth-century reform movement and stalled the development of appropriate industrial policies for nearly two decades. ...
P. 126 Conspicuous among the conservative voices heard in these weeks was that of Bernard Baruch, head of the War Industries Board in Woodrow Wilson’s government and the consumate Democratic Party insider. A fabulously wealthy Wall Street speculator, Baruch lavished money on Democrats whom he deemed sympathetic to his own big-business outlook. He was said to have contributed some $200,000 to the 1932 campaign; Roosevelt thought that he “owned” at least sixty congressmen. His advice to FDR was Spartan in its stark simplicity: “Balance the budgets. Stop spending money we haven’t got. Sacrifice for frugality and revenue. Cut governmetn spending - cut it as rations are cut in a siege. Tax - tax everybody for everything.”
Pp. 177 - 180 Recovery remained maddeningly elusive. “Balance” still seemed the key. Following the Hundred Days, Roosevelt counted primarily on two measures to effect the equilibrium between industry and agriculture thought to be essentail to economic health. One was an unorthodox and controversial gold-confiscation scheme, aimed at depreciating the dillar and thus easing debt burdens, particularly for farmers. The other was an elaborate scheme to micromanage the farm sector through the newly created Agriculture Adjustment Administration. For much of 1933 and 1934, however, both monetary and agricultural policy were overshadowed by the aggressively publicized endeavors of another agency: The National Recovery Administration. Though it was created virtually as an afterthought on the one hundredth day of the special congressional session that ended on June 16, 1933, the NRA almost instantly emerged as the signature New Deal creation. “In some people’s minds,” Frances Perkins later observed, “the New Deal and the NRA were almost the same thing.” The NRA owed much of its towering profile in the public mind to the extravagfantly colorful personality of its chief, Hugh S. Johnson. Raised in frontier Oaklahoma, Johnson was fifty-one years old in 1933, a West Point graduate who rose to the rank of brigadier general before resigning in 1919 to pursue a business career. His seamed and jowly face floridly testified to the rigors of the professional soldiers’s life as well as the ravages of drink. Melodramatic in his termperament, mercurial in his moods, ingeniously profane in his speech, Johnson coujld weep at the opera, vilify his enemies, chew out his underlings, and rhapsodize about the virtues of NRA with equal flamboyance. On accepting his appointment in June 1933 he declared: “It will be red fire at first and dead cats afterward” - one of the printable specimens of his sometimes mystifyingly inventive prose. .....
His model was the War Industries Board (WIB) of 1917-1918, chaired by his idol and business associate Bernard Baruch. Johnson himself had served as director of the WIB’s Purchase and Supply Branch, representing the military purchasing bureaus to the various commodity sections of the WIB. Frankin Roosevelt had also conjured the World War experience in announcing the NRA’s birth on June 16. “I had part in the great cooperation of 1917 and 1918,” the president declared, and he called on the country to recollect the war crisis and the spirti of national unity it evoked. “Must we go on in many groping, disorganized separate units to defeat,” the president asked,. Extending the military metaphor, “or shall be move as one great team to victory.?” But if the NRA was patterned on the War Industries Board, a crucial element was missing: the war. To be sure, a psychological sense of crisis prevailed in 1933 that was comparable to the emergency atmosphere of 1917; the difference was not mood but money. The federal government had borrowed over $21 billion dolalrs in just two years to fight World War I, a figure that exceeded the sum of New Deal deficits from 1933 down to the eve of World War II.
The National Industrial Recovery Act that established the NRA had also authjorized the Public Works Administration to borrow $3.3 billion for pump-priming expenditures to infuse new purchasing power into the economy. NRA and PWA were to be like two lungs, each necessary for breathing life into the moribund industrial sector. But as Herbert Hoover had discovered, it took time, lots of it, to start up construction projects of any significant scale - time for site surveys, architectural designs, and the engineering studies to be completed before actual construction could start. .... If Johnson, the would-be maste economic organist, found himself seated at a magnificent musical instrument that lacked wind-box or bellows, he nevertheless proceeded to bang away at the keyboard of the NRA with missionary zeal and maniacal energy. There was no truer believer in the philosophy of industrial coordination that NRA was charged with implementing. “I regard NRA as a holy thing,” he said. He credited his mentor, Bernard Baruch, with the best formulation of the NRA’s economic creed. “The government has fostered our over-capacitated industrial combinations, and even encouraged these combinations to increase production,” Baruch explained to a Brookings Institution gathering in 1933.
“But it seems public lunacy to decree unlimited operation of a system which periodically disgorges indigestibel masses of unconsummable products. In today’s desperate struggle for the scant remaining business, cost and price have become such factors that, in the unstable fringes which surround each industry, a few operations have taken the last dangerous step in economic retrogression - the attainment of low costs by the degradation of labor standards .... Lowering wages - lower costs - lower prices - and the whole vicious cycle goes on.” The NRA, in Baruch’s and Johnson’s view, could arrest thei cycle by governmentsponsored agreements to curb ruinous overproduction, allocate production quotas, and stabilize wages. The last item was particularly important. If there was any defensible economic logic in NRA at all, it consisted in the idea that recovery could not come about so long as shrinking payrolls continued to leach purchasing power out of the ailing economy. The essence of Baruch’s and Johnson’s thinking resided in their shared hostility to competition. “Murderous doctrine of savage and wolfish competition,” Johnson called it, “looking to dog-eat-dog and devil take the hindmost,” had impelled even humane and fair-minded employers to slash wages and lay off workers by the millions. In contrast, Johnson intoned, “the very heart of the New Deal is the principle of concerted action in industry and agriculture under government supervision.”
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1936-1938 John Pearson, The Private Lives of Winston Churchill (New York: Simon & Schuster, 1991) p.268 - 270
The letter [daughter] Sarah had written Clementine had been carefully worded to appeal to her heart. “Please don’t be worried - please don’t be sad. I will keep you fully informed of my whereabouts and plans. ... My love to you, darling Mummy.” She even added a P.S. begging Clemintine to use her calming influence upon her husband. Please make Papa understand.” However, once the elopement was splashed across the papers, there was no chance of Churchill understanding. The battle was joined. ..... Just as Sarah was steaming off aboard the S.S. Bremen with the scandal in the daily papers, a far greater scandal was bout to burst. King George V had died in January 1936, and had been succeeded by his son Edward, who was King but had not yet been crowned. That fall the love affair between Edward VIII of England and his married mistress Mrs. Wallis Simpson of Baltimore, Maryland, was on the point of turning from an open society secret into the gravest crisis to afflict the monarcy since the far-off days of George IV. ... There was in fact some striking similarities between the royal love affair and Sarah’s: both involved unmarried adults bent on union with twice-married foreigners who themselves were in the throes of divorce; both marriages, in different ways, appeared unsuitable, and in both Churchill felt impelled to intervene. What is facinating is the extraordinary differences in his behavior toward his daughter and his King.
....... When the story broke in the Express, Churchill was still in France, but he promptluy ordered Randolph, of all people, to Southampton in his place, sent him a first-class ticket on the Queen Mary, and told him to bring his sister to her senses and safely home. .......
......As the Queen Mary docked, he was met by his anxious-looking sister and half the press corps in New York. “I’m here to take Sarah home. It simply won’t do,” he blustered. “But does she want to go?” somebody asked. “That makes no difference. Sarah’s too young to know her own mind.” But Sarah emphatically did know her mind - and Randolph returned to England empty-handed. This did little to affect the resolution of his father, who had now returned to Chartwell from the fortresses of France; the light of battle in his eye, Churchill was set to fight this homegrown skirmish to its bitter end. Through his old New York friend the financier Bernard Baruch, who had been in touch with Sarah, highly paid lawyers were secretly engaged to set legal barriers against the marriage, and private detectives started dredging up anything unpleasant they could find in Vic Oliver’s past. Sarah’s appeals by telephone to Clementine - and to her father’s deeply sentimental nature - made no difference.
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Roy Jenkins, Churchill (New York: Farrar, Straus and Giroux, 2001) p. Neither this nor a potentially highly profitable two-month American lecture tour, which he was negotiating for the autumn, was sufficient to offset a second series of devastating New York stock exchange losses wich the recession of 1938 had just cost Churchill. Stocks which he had bought for over ,18,000 had fallen to a value of barely ,5,700, a loss in modern terms of about ,375,000. In spite of what should have been expert advice from Bernard Baruch and others, Churchill was a singularly unfortunate Wall Street speculator. These losses made him take the grave step of putting Chartwell definitely (as it appeared) on the market. .....
Happily he was once again spared the trauma. Another “white knight” came over the horizon. He was Sir Henery Strakosch, like so many of both the good and bad figures of the first half of the twentieth century, an Anglo_south African financier. He was a near contemporary of Churchill’s who had established himself many years before as a banker and as a wquiet public figure (member of a Royal Commission in the 1920's , adviser to several international conferences) and knighted as early as 1921, without any apparent intervention from Churchill. Later he was the chairman of the Economist . In 1938, building upon an acquaintanceship with Churchill based mainly on supplying him by correspondence with detailed and authoritative facts about the effect of rearmament upon the German economy, and activated, it appears, by no motives beyond a firm anti-Nazism and personal admiration, he saved Chartwell for Churchill. Skakosch did this indirectly and in a somewhat complicated way. He arranged through Brenden Bracken that he would taek over all of Churchill’s American stocks at the price Churchill had originally paid for them (which was nearly three times their current value) and hold them without risk to Churchill for at least three years, with the right to make switches and paying Churchill interest at the rate of about ,800 a year. What happened at the end of three years is not recorded. Skrakosch had recouped some of the losses which he had voluntarily accepted. By the Spring of 1941 not only was the main house at Chartwell closed, Churchjill Prime Minister and Britain’s position, before the entry into the war of either the Soviet Union or the United States, still semi-desperate, but British-owned American assets were (with compensation) requisitioned. IN 1938, however, Strakosch’s intervention was immensely beneficial to Churchill. Chartwell was again withdrawn from the market.
P. 543 Throughout the late spring and summer of 1939 Churchill was torn by conflicting desires and thoughts. First he believed that the government had at last accepted the policy which he had been urgin for several years. Bracken, always the faithful mouthjpiece, informed Bernard Baruch on 18 April: “Winston has won his long fight. Our government are now adopting the policy that he advised three years ago, and Churchill himself defined this policy (to Lord Lytton) as ‘a Grand Alliance on the basis of the Covenant of the League......
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Freidel, Frank, Franklin D. Roosevelt: A Rendevous with Destiny (Boston: Little Brown and Company, 1990)
p. 192 Roosevelt [in January 1936] faced the prospect of a sharp decline in farm prices, something that could be fatal to him in the election. Several weeks earlier at Warm Springs, theinfluential Bernard Baruch had impressed him by remarking that if he could keep commodity prices up that would do more than anything else to reelect him. The basic question was what form the new farm program should take. He adapted a relatively simple device, to modity a little-noticed piece of existing legislation, the Soil Conservation Act, passed the previous year. Under its authorization, the AAA achieved the same ends of reducing overproduction by contracting with farmers to take part of their acreage out of the major crops, ostensibly to improve the fertility of the soil. It was an effective scheme, and one in keeping with Roosevelt’’s fundamental interest in conservation."
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Encyclopedia of American History (Pleasantville: Reader's Digest Association, Inc., 1975) 1) Nye Committee 2) Neutrality Laws -----
-- Nye Committee Senate Munitions Investigating Committee, chaired by North Dakota Sen. Gerald P. Nye, 1934-1936/ Investigated influence of U.S. munitions makers on U.S. entry into W.W. I /Major impetus for Neutrality Laws. 1935-37 American isolationism ran at full tide during the mid-1930's as millions of Americans, remembering the failure of World War I to bring lasting peace in Europe, approved virtually any legislation that promised to keep the U.S. from being drawn into an overseas conflict. The findings of the Senate Muntions Investigating Committee (better known as the Nye Committee, after its chairman, North Dakota Senator Gerald P. Nye) did much to reinforce isolationist views. Established in April, 1934 to look into rumored abuses by the Munitions Industry during the pre- World War One period, the Nye Committee held almost two years of headline-producing hearings that offered dramatic proof that many arms manufacturers had made unconscionably high profits out of wartime carnage and that some had sought to tilt national policy toward aiding the Allies. But the Nye hearing produced evidence that was not conclusive in showing that these so-called merchants of death had unduly influenced President Woodrow Wilson or that the interests of mysterious "international bankers," lay behind U.S. entry into the war. Nonetheless, the Nye Committee's findings provided ammunition for those who persuaded Congress to enact the Neutrality Laws, of 1935, 1936 and 1937 -- designed to preclude any American involvement in a future global war.
--------- U.S. production of heavy munitions never met demand, and financier Bernard M. Baruch arranged with Britian's minister of munitions, Winston S. Churchill, that medium and heavy arms would be supplied by British industry, in an arrangement whereby the British would not take a profit, but that any and all cost overruns would be paid by the United States. Long after the fighting ended, the U.S. Senate Munitions Inquiry (the Nye Committee) unearthed much evidence of war profiteering in the industry. The investigation and its exposes (add accent mark) strengthened public support of the neutrality laws (1935-39) which prohibited sales of arms to other nations. But World War II brought the transformation of the U.S. into the "arsenal of democracy," with virtually every American industry engaged in some way with the war effort. By the end of the conflict the U.S. had produced some 300,000 airplanes, 86,000 tanks, 71,000 new naval ships and 55 million tons of merchant shipping. Development of nuclear weapons began with the top-secret Manhattan Project of World War Ii and its awesome aftermath. Intensive development of nuclear missile systems follow Korean War, beginning in 1953 with the introduction of both the U.S. Army's Nike missile and the Air Force's Matador. Five years later the first Atlas intercontinental ballistic missile (ICBM) was fired, and the Navy tested its first Polaris missile, designed to be fired from a submarine. ...
---------- NEUTRALITY LAWS Acts to keep U.S. out of foreign wars; passed, 1935-39/ Banned commerce with belligerents, abandoning neutral rights/ Provisions eased the permit U.S. aid to Britain and France at start of W.W. II. The series of neutrality laws passed between 1935 and 1939 were designed to keep the U.S. out of any future foreign wars. In large part a response to national disillusionment with World War I, the legislation was spurred by the findings of the Nye Committee (1934-36), which suggested that U.S. capitalists -- notably munitions makers -- had profited greatly from the horrors of the First World War. If there were not profits to be made from war, the proponents of the neutrality laws reasoned, thenthe U.S. would not be drawn into foreign entanglements. Further, if the defense of Neutral Rights would lead the nations into war, as was the case in World War I, then neutral rights should be abandoned. The first act was passed after Italy attacked Ethiopia in 1935, in 1935, and new laws followed in 1937 and 1939 with the onset of the Spanish Civil War and World War II. The acts prohibited the shipping of arms or the granting of loans or credits to belligerents; barred U.S. citizens or vessels from entering designated combat areas; forbade the arming of merchant ships; and empowered the President to require of transfer of title and cash payment before the export of any goods to a warring nation. Critics of the legislation, including President Franklin D. Roosevelt, argued that the acts ecouraged aggression by failing to distinguish between attacker and attacked. As the Nazis swept across Europe, the provisions of the 1939 act were eased to permit the sale of arms and munitions to England and France, first on a "cash and carry" basis, then on credit. American vessels were eventually permitted to enter combat areas and merchant vessels were armed. In early 1941 the Lend-Lease Act was passed, permitting the transfer of U.S. weapons food and equipment to the Allies with several naval engagements against German submarines -- a long step toward American entry into the war later in the year.
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Robert A. Divine, The Reluctant Belligerent; American Entry into World War II (New York: John Wiley & Sons, Inc., 1965)
pp. 34-35 The passage of the Spanish arms embargo was the prelude to full scale Congressional aciton on neutrality legislation in 1937. The original act, extended in 1936, was due to expire in 1937. The original act, extended in 1936, was due to expire on May 1, 1937. Congress had only four months to arrive at a final decision on the complex issues it had dodged in the last session. The basic goal, keeping the nation out of any major European war that might occur, had not changed, but there were still a bewildering variety of solutions being advocated inside and outside of Congress. The basic features of neutrality adopted in 1935 and 1936 - ht impartial arms embargo, the ban on travel, the prohibition of loans to belligerent governments - were not in question. The debatable issue was to what extent the nation was willing to sacrifice its export trade in goods other than arms if war came to Europe. By early 1937 the United States was slowly climbing out of the depression and was looking forward to complete economic recovery. The task confronting Congress was to frame a neutrality act that would insure peace without endangering prosperity. It was Bernard M. Baruch, the financier and confidant of presidents, who came up with the cash-and-carry formula to keep the United State neutral without sacrificing the profits of foreign trade. In magazine articles in 1935 and 1936 Baruch argued that it was the shipment of goods to belligerents, not the sale, that involved risk to the nation.
Therefore, he suggested the cash-and-carry principle - “We sell to any belligerent anything except lethal weapons, but the terms are ‘cash on the barrel-head and come and get it.’” [Bernard Baruch, “Neutrality,” Current History, XLIV (June 1936), 43.] Baruch’s ingenious plan was designed to avoid repetition of the incidents that had let to the war in 1917. When American goods were sold to a belligerent, title to the exports would pass immediately into the hands of ht epurchaser, who would not be permitted to transport them in American ships. By keeping American ships, goods, and citizens off the high seas in time of war, Baruch hoped to guarantee the continuation of American foreign trade without the risk of war. His formula was technically neutral, but it would always operate in favor of the belligerent with large cash reserves and control of the sea. But this limitation did not bother most Americans, who desired a policy where nothing was ventured and a great deal could be gained. The cash-and-carry scheme won the favor of both the administration and the advocates of strict neutrality. Roosevelt liked the plan because it worked out in favor of England and France, the nations with sea power, and against Germany. When Senator Pittman introduced a comprehensive neutrality bill in January 1937, based on cash-and-carry principle, the administration endorsed it and had a similar measure introduced in the House. Senator Nye had no objections to the Beruch plan. He preferred a total embargo on all trade with belligerents, but he realized that such a measure could not be passed and thus he was willing to accept cash-and-carry as a reasonable compromise. However, Nye and others who shared his views insisted that the Pittman bill contained too many provisions granting discretionary power to the President. They pressed for amendments to the administration measure which would compel the President to impose automatic restrictions on American trade in time of war. The conflict between discretionary and mandatory features dominated the debate in Congress.
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William Manchester, Alone 1932-1940, loc. cit.
P. 419 Chamberlain believed war ministers unnecessary because he remained convinced that he had brought Englishmen peace in their time, and this became clear as debate over establishment of a ministry of supply - first proposed by Churchill three years earlier, on April 23, 1936 - approached its climax. Without such a minister, an economic czar empowered to mobilize British industry and provide a national arsenal, future recruits would lack rifles, even uniforms. It was no longer enough for a nation to spring to arms. Artillery, tanks, and warplanes, decisive in modern war, must also be there. ...
..... To Churchill the need for the new ministry was compelling. That same week he had risen in the House of Commons to propose an amendment calling for its immediate establishment: .... The rapid production of munitions, he declared, should have begun long ago, and on a scale immensely greater than anything the War Office now contemplated. HMG’s reply was that a ministry would seriously dislocate British industry, that it was wiser “to trust to cooperation than to compulsion.” The House was still Chamberlain’s and Winston’s rebuff was stunning. Not 50 MPs. But just two - Bracken and Macmillan - joined him. Berlin rejoiced. ‘GREAT DEFEAT OF CHURCHILL!” read one German headline. Another trumpeted: “CHURCHILL’S INTRIGUES COLLAPSE / EVEN DUFF COOPER AND EDEN COULD NOT BE ROPED IN.”
As late as March 2, 1939, the prime minister’s own secretary for war, Leslie Hore-Belisha, told him that if the government was serious about defending the country, something had to be done to arm and equip fighting men, and Britain’s industrial titans would listen to no one without a seat at the cabinet table. Wearily the P.M. cut him off in mid-argument. Yet the Ministry of Supply had become inevitable , and presently even Chamberlain knew it. In April 1939, after the German occupation of Prague, his panel of industrialists - the men he admired most and had sought to shield from bureaucracy - reported that their chief recommendation, an urgent question to be met squarely “at the first possible opportunity,” was “the establishment of a Ministry of Supply.” Brendan Bracken wrote Bernard Baruch: “Winston has won his long fight. . . . No public man of our time has shown more foresight, and I believe that his long, lonely struggle . . . will prove to be the best chapter in his crowded life.”
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Robert E. Sherwood, Roosevelt and Hopkins; An Intimate History (New York: Harper & Brothers, 1948)
p. 113 ...Near fatal illness drained him of all personal ambition and converted him into the selfless individual who rendered such great service to the President during the war years.
Early in March 1939, Hopkins was still feeling worn out and spent from that “touch of flu” and he was glad to accept an invitation from Bernard Baruch to spend a few days at Hobcaw Barony near Georgetown, South Carolina. Baruch’s huge plantation was near the coast, at the confluence of the Pee Dee and Waccamaw Rivers, a beautiful and largely wild place, full of live oaks, Spanish moss, magnolias, camellias, azaleas, many kinds of game and fish - and the serene wisdom, the overwhelming prestige and unshakable selfconfidence of its owner. In the cultivation of his own political garden, Hopkins could do no better than seek out the advice and counsel (and, above all, the support) of Bernard Baruch, who held title of Elder Statesman Number One longer than any man had since Thomas Jefferson.
But when Hopkins visited Hobcaw, Baruch was not inclined to give much attention to political prospects or business conditions at home. His concern was with the gathering calamity abroad. He scoffed at a statement made on March 10 by Neville Chamberlain that “the outlook in international affairs is tranquil.” Baruch agreed passionately with his friend, Winston Churchill, who had told him, “War is coming very soon. We will be in it and you [the United States] will be in it. You [Baruch] will be running the show over there , but I will be on the sidelines over here.” (That last prophecy proved inaccurate.) Baruch talked to Hopkins of the realities of the situation as he had seen them in Europe and reported them privately to Roosevelt the previous year; he talked of the amount of misinformation that was being collected and transmitted by our official representatives in Europe; he talked of the woeful state of our unpreparedness and of the measures that had been taken to meet production problems in the First World War. Years later, Baruch said: “I think it took Harry a long time to realize how greatly we were involved in Europe and Asia - but once he did realize it, he was all-out for total effort.”