Source: Doris Kearns Goodwin. Leadership -
Lessons From the Presidents For Turbulent Times (2018)
Lessons From the Presidents For Turbulent Times (2018)
FDR’s four years at Warm Springs prepared him well for his first term as President, where he had to fulfill many roles at once; FDR had been through this before, although not on a national scale. By mid-February 1933, the Banking Crisis reached its nadir, with over 5000 banks having closed their doors with people losing their savings. Few if any of the 1/3 of the population that was negatively affected had any safety net, which in large part explained the massive runs on the banks. A large reason why banks were not on solid financial ground was that far too many had invested their customer’s money in the Stock Market. To President-Elect FDR, it seemed possible that the whole house of cards could collapse before he was inaugurated as the 32nd President.
FDR knew that he needed to immediately accomplish three things. First, he had to stem the tide of panic. Second, FDR needed to stop the Banking Crisis. Third, he needed to start the process of restructuring America’s economic and social structure. FDR’s goal on Inauguration Day on 4 March 1933 was to draw a line of demarcation between what was not done with Hoover and what would be done in his Presidency. FDR knew that he had to deal with the nation’s psychology as well as the economy, and his 1st Inaugural Address showed both elements. Starting with the “Bank Holiday”, FDR started the nation down the road where the relationship between the people and the federal government would forever be altered.
FDR knew that he needed to immediately accomplish three things. First, he had to stem the tide of panic. Second, FDR needed to stop the Banking Crisis. Third, he needed to start the process of restructuring America’s economic and social structure. FDR’s goal on Inauguration Day on 4 March 1933 was to draw a line of demarcation between what was not done with Hoover and what would be done in his Presidency. FDR knew that he had to deal with the nation’s psychology as well as the economy, and his 1st Inaugural Address showed both elements. Starting with the “Bank Holiday”, FDR started the nation down the road where the relationship between the people and the federal government would forever be altered.
FDR struck the right balance between reality and optimism in his 1st Inaugural Address, and his understanding and empathy of the plight of the common American was infused throughout, and he featured a sense of shared purpose, direction, and responsibility as well. Later his first day as President, FDR searched for a Constitutional way to shut down the banks, with his plan to call it a “Bank Holiday” (as opposed to Hoover’s proposed “Bank Moratorium”). Aiding the President was his Cabinet, which reflected his desire to have leaders that could adapt and not be beholden to political or economic orthodoxy. FDR was told by his Attorney General that there was a 1917 federal law on the books that allowed the President to investigate and regulate the hoarding of currency, which was all FDR needed to hear in order to act quickly and decisively.
FDR called Congress into a Special Session, scheduled for 9 March 1933 (Congress wasn’t scheduled to convene in those years until December), just days after his Inauguration. FDR wanted emergency banking legislation to be passed on his desk for him to sign into law as fast as possible. Progressives were disappointed when FDR brought in the Big Boy Bankers for advice, which meant that FDR was not going to nationalize the banks as they had hoped. FDR’s desire for technical financial knowledge was so great that he also wanted and received advice from Hoover’s Treasury people.
When FDR was set, he was ready to address the largest stakeholders, the American people. FDR knew that he needed to set a deadline, and then force those involved in the “Bank Holiday” to meet it, which meant that a massive amount of power had to be ceded to the Executive Branch. FDR was delighted when the Federal Reserve created a map with colored pins denoting the financial status of every bank that remained open.
FDR called Congress into a Special Session, scheduled for 9 March 1933 (Congress wasn’t scheduled to convene in those years until December), just days after his Inauguration. FDR wanted emergency banking legislation to be passed on his desk for him to sign into law as fast as possible. Progressives were disappointed when FDR brought in the Big Boy Bankers for advice, which meant that FDR was not going to nationalize the banks as they had hoped. FDR’s desire for technical financial knowledge was so great that he also wanted and received advice from Hoover’s Treasury people.
When FDR was set, he was ready to address the largest stakeholders, the American people. FDR knew that he needed to set a deadline, and then force those involved in the “Bank Holiday” to meet it, which meant that a massive amount of power had to be ceded to the Executive Branch. FDR was delighted when the Federal Reserve created a map with colored pins denoting the financial status of every bank that remained open.
The “Bank Holiday” was a surprisingly conservative endeavor, using federal authority to keep the banks operating in the private sector. FDR knew there would never be an economic turnaround without a sound banking system. In world record speed, the bank holiday bill was passed by both houses and FDR signed it into law. But FDR knew that the real test would be what Americans did once the banks opened on Monday. FDR used the White House Press Conference in a new way, wanting mutual education, not confrontation, and his experience at the Crimson allowed him to understand journalists. That being said, FDR wanted to get his own narrative into the national bloodstream using the media to do so.
FDR had ground rules for what would eventually become known as the White House Press Corps, such as what was off the record had to remain off the record, and to only quote him with his express blessing. FDR made it clear via a joke that he was prepared to maroon reporters that didn’t play ball under those conditions. On that very same day, Eleanor held her first press conference, but would only admit female reporters, which forced newspapers to hire women journalists.
On 13 March 1933 (late Sunday evening), FDR delivered his first national radio address, which he called a “Fireside Chat”. FDR grasped the revolutionary opportunity that radio afforded him as President to connect with the nation, and FDR’s voice was a perfect conversational radio voice. The next day, the lines at the banks were to deposit, not withdraw, money, and the Stock Market registered a 15% jump the following Wednesday. FDR now needed to prescribe a regimen to treat the sources of the nation’s economic, social, and political malaise.
FDR had ground rules for what would eventually become known as the White House Press Corps, such as what was off the record had to remain off the record, and to only quote him with his express blessing. FDR made it clear via a joke that he was prepared to maroon reporters that didn’t play ball under those conditions. On that very same day, Eleanor held her first press conference, but would only admit female reporters, which forced newspapers to hire women journalists.
On 13 March 1933 (late Sunday evening), FDR delivered his first national radio address, which he called a “Fireside Chat”. FDR grasped the revolutionary opportunity that radio afforded him as President to connect with the nation, and FDR’s voice was a perfect conversational radio voice. The next day, the lines at the banks were to deposit, not withdraw, money, and the Stock Market registered a 15% jump the following Wednesday. FDR now needed to prescribe a regimen to treat the sources of the nation’s economic, social, and political malaise.
FDR in no way wanted to lose any momentum after the success of the “Bank Holiday”, so he kept Congress in the Special Session, and that time frame would forever be known as the “1st 100 Days”. Among FDR’s priorities of the “1st Hundred Days” was to find ways for the government to regulate industrial capitalism, which hadn’t yet really occurred, save for brief spells of progressivism in the Presidencies of TR, Taft, and Wilson. As FDR predicted, opposition formed on Capitol Hill after the “Bank Holiday”, made up of Republicans and conservative Democrats, who now wanted the government to back away and stay away. Reforming the role and size of the federal government would become a long and protracted war.
On 7 May 1933 in his second “Fireside Chat”, FDR unveiled his vision for economic and social reforms. FDR used the same tone and strategies from his 1st Fireside Chat, and he made it clear that it wouldn’t be government coercion, but rather multiple partnerships with the government (what Progressives had called “Association”). During the “1st 100 Days”, fifteen major bills were passed, with billions of dollars in government spending allocated in various categories, such as public works and direct relief.
FDR was open to experimentation, and he wanted flexible federal agencies to deal with new problems. During FDR’s first 18 months as President, 20 new federal agencies were created, with the Civilian Conservation Corps being the first, and FDR’s favorite. FDR’s strategy was to boldly conceive a project, rush it through, and leave the details to the proper people in his administration. In other words, FDR often placed dynamite under those in his administration and then after the explosion, he left them to sort out the venture. FDR likened himself to a quarterback, and the CCC was the first successful play in the football game, with many more plays to call, but none of those plays would be scripted out ahead of time.
On 7 May 1933 in his second “Fireside Chat”, FDR unveiled his vision for economic and social reforms. FDR used the same tone and strategies from his 1st Fireside Chat, and he made it clear that it wouldn’t be government coercion, but rather multiple partnerships with the government (what Progressives had called “Association”). During the “1st 100 Days”, fifteen major bills were passed, with billions of dollars in government spending allocated in various categories, such as public works and direct relief.
FDR was open to experimentation, and he wanted flexible federal agencies to deal with new problems. During FDR’s first 18 months as President, 20 new federal agencies were created, with the Civilian Conservation Corps being the first, and FDR’s favorite. FDR’s strategy was to boldly conceive a project, rush it through, and leave the details to the proper people in his administration. In other words, FDR often placed dynamite under those in his administration and then after the explosion, he left them to sort out the venture. FDR likened himself to a quarterback, and the CCC was the first successful play in the football game, with many more plays to call, but none of those plays would be scripted out ahead of time.
FDR wanted to stimulate debate and competition within his administration, while at the same time encouraging creativity. FDR wanted conflicting ideas in his Circle of Trust, and in the process of disagreement, he was able to steer them to reconciliation and agreement. By doing so, sometimes FDR gave the same duties to different people and agencies, hoping that the competition would increase the results. The downside of that strategy was the never-ending task of keeping-the-peace in his Circle, which had just as many divas as any other President’s administration. During crisis mode, FDR wanted this particular brand of Executive control, knowing that if necessary he could rein in those that needed it.
A great example of that method in action was FDR pitting Harry Hopkins and Harold Ickes against each other in different agencies. FDR was wise, knowing that he needed the talents and perspectives of both men, as well as their differing management styles. Over time, FDR gravitated towards Hopkins, who focused on the people side of the equation, not focusing on costs and statistics as was the wont of Ickes. FDR remained empathetic to Ickes’ concerns and grievances when they met, which left Ickes in a position to continue at his post and to do his best, even though he knew FDR wouldn’t act on his concerns. However, when Ickes aired his grievances to the media, FDR was less-than-pleased. In typical FDR fashion, he had both men go with him on a lengthy cruise through the Panama Canal on a speaking tour, and the problem ended.
A great example of that method in action was FDR pitting Harry Hopkins and Harold Ickes against each other in different agencies. FDR was wise, knowing that he needed the talents and perspectives of both men, as well as their differing management styles. Over time, FDR gravitated towards Hopkins, who focused on the people side of the equation, not focusing on costs and statistics as was the wont of Ickes. FDR remained empathetic to Ickes’ concerns and grievances when they met, which left Ickes in a position to continue at his post and to do his best, even though he knew FDR wouldn’t act on his concerns. However, when Ickes aired his grievances to the media, FDR was less-than-pleased. In typical FDR fashion, he had both men go with him on a lengthy cruise through the Panama Canal on a speaking tour, and the problem ended.
FDR wanted unfiltered information to buttress and challenge official sources. In other words, Washington, D.C. saw things a certain way, but how did Americans see the same things? So FDR kept telling those in his Circle to get out of DC and go see what was really going on, and to talk to as many people as possible, since there was no other way that information could work its way up through official channels. More than anyone else, FDR relied on Eleanor to provide the most unvarnished information for him to process and consider. FDR absolutely trusted Eleanor’s perspective and accuracy of her experiences, and among the New Deal programs that Eleanor forced FDR to adjust was the Agricultural Adjustment Administration. For example, too many pigs were slaughtered in order to reduce the supply, and Eleanor said that the strategy was wasting food for the needy. So FDR created the Federal Surplus Relief Corporation, which bought up the excess porcine, and distributed that excess to where it was needed most.
FDR knew that he needed to adapt and to adjust to changes quickly, especially when mistakes occurred. FDR changed the proposed bill a few times before it became the Securities and Exchange Commission (SEC), which was one of the most popular New Deal programs. Towards the very end of the “1st 100 Days” the Glass-Steagall Act was passed, which regulated the banking industry, meaning that banks had to choose between investing in commercial activities or investment banking, but not both. In other words, banks had to go all-in with the Stock Market and publicly say so, or go about their normal banking investments. FDR admitted that his resistance to deposit insurance was wrong, and he eventually championed the Federal Deposit Insurance Corporation (FDIC), which proved to be the most important structural change to result from the Great Depression, which in part led to monetary stability. Had FDR been set in stone, like far too many other Presidents, neither the SEC or the FDiC wold have been created.
FDR knew that he needed to adapt and to adjust to changes quickly, especially when mistakes occurred. FDR changed the proposed bill a few times before it became the Securities and Exchange Commission (SEC), which was one of the most popular New Deal programs. Towards the very end of the “1st 100 Days” the Glass-Steagall Act was passed, which regulated the banking industry, meaning that banks had to choose between investing in commercial activities or investment banking, but not both. In other words, banks had to go all-in with the Stock Market and publicly say so, or go about their normal banking investments. FDR admitted that his resistance to deposit insurance was wrong, and he eventually championed the Federal Deposit Insurance Corporation (FDIC), which proved to be the most important structural change to result from the Great Depression, which in part led to monetary stability. Had FDR been set in stone, like far too many other Presidents, neither the SEC or the FDiC wold have been created.