(See front cover)
When the Depression broke over the high head of the Republican Administration in 1929, President Hoover called to the White House a swarm of bankers, financiers, businessmen, industrialists, railroaders, labor leaders, farm spokesmen. In the privacy of his study, one by one, he asked them what he should do in the economic emergency. Almost to a man his visitors told him to sit tight, keep smiling, let the tempest blow itself out. For nearly two years he followed their advice.
Last week many of the same advisers were back in Washington, this time to tell the incoming Democrats how to save the nation. Parading before the Senate's powerful Committee on Finance they spoke what was supposed to be the keenest, soundest thought of the country.
Their remarks were not addressed to Utah's grim, bespectacled Reed Smoot who as the committee's Republican chairman sat nodding at the head of the long green-baize table. He is a lame duck, soon to fall from his roost. Nor did the witnesses talk to impress Michigan's white-crested Couzens or Pennsylvania's sad-faced Reed or Wisconsin's pompadoured La Follette. All these would soon be in an impotent Republican minority. The man the witnesses knew they were talking to was the tall, rangy, half-bald Democrat who slumped in his chair at Senator Smoot's left—Mississippi's Pat Harrison. After March 4, Senator Harrison will move into Senator Smoot's highbacked seat at the top of the table, become ruler of the committee that fixes the nation's taxes and tariffs.
As witnesses filed past, Senator Harrison sucked softly on a big cigar, rubbed the palms of his long, bony hands together, beamed self-satisfaction through his horn-rimmed glasses. Like an eager runner who beats the starting gun, he had not waited for March 4 and the change of administration to start this parade of economists, financiers and industrialists at the Capitol. He had gotten the Senate to adopt his resolution calling for an investigation of the Depression at once. In his forehandedness he had a double purpose: 1) to stall off radical legislation at this session; 2) to give the Roosevelt Administration all available ideas on relief as early as possible.
"Balance! Balance!" During the first week of the hearing Big Business ding-donged one idea into the Senators' ears: BALANCE THE BUDGET. Witness after witness from Wall Street could see no salvation for the country until the Government ruthlessly cut expenses, lived within its income. To this necessity they subordinated foreign debts, tariffs, jobless relief, railroads, public works and the large variety of panaceas put forward by more imaginative but less substantial citizens. Bernard Mannes Baruch had sounded the keynote the opening day: "Put Federal credit beyond peradventure of a doubt. . . . No nation ever dared to incur deficits as large as ours. The suspicion is growing that we do not really intend to balance the budget."
Mr. Baruch also sent chills of fear down Senatorial spines when he solemnly warned: "I regard the condition of this country as the most serious in its history. It is worse than war."