This article summarizes part of the argument of my Critical Realignment: The Fall of the House of Morgan and the Origins of the New Deal (New York: Oxford University Press, forthcoming)Google Scholar and sharpens considerations advanced in “Von Versailles zum New Deal,” a catalog-essay in Neue Gesellschaft für Kunst, Bildende, Amerika, Traum und Depression (Berlin: 1980), pp. 436–50.Google Scholar To reduce documentation to manageable proportions, I have strictly limited references to no more than are absolutely necessary for precision of argument.

The same space limitations make it impossible to acknowledge all who have aided my research. For very helpful comments on drafts of this paper, however, I should like to thank Lawrence Goodwyn, Charles Kindleberger, James Kurth, Mira Wilkins, the members of Harvard University's Economic History Research Seminar, and the editors of International Organization. I am also very grateful to Alfred Chandler both for comments and for affording me a look at two unpublished papers on the evolution of big business (“Global Enterprise: Economic and National Characteristics—An Historical Overview,” and “The M Form—Industrial Groups, American Style”).

For providing me with unrestricted access to his personal papers and unique insights into the New Deal, I am grateful to a leader of the independent oil men in Texas during the New Deal, Mr. J. R. Parten, now of Madisonville, Texas. For other assistance in securing material I also thank Mr. and Mrs. Everett Case, Anthony Garvan, Mr. and Mrs. John W. Coolidge Jr., Herbert Gintis, Charles Harvey, and Mrs. Rene Leon. Other valuable assistance came from Walter Dean Burnham, Bruce Cumings, Gerald Epstein, Henry Farber, Peter Gourevitch, Robert Johnson, Lola Klein, Duane Lockard, Martin Shefter, Peter Temin, and more librarians than can be named here.

1. See, among many other comments on Fisher's unfortunate pronouncement, Galbraith, John Kenneth, The Great Crash (Boston: Houghton Mifflin, 1961), p. 75Google Scholar. The Irving Fisher Papers at Sterling Library, Yale University, contain many references to his service on boards of investment companies and Remington Rand, a major manufacturer. Fisher's later role in New Deal monetary controversies made these ties an object of extensive comment. The final copy and various drafts of Lamont's letter to Herbert Hoover of 19 October 1929 are in the Lamont Papers, Baker Library, Harvard University. (Most archives used in this project are adequately indexed; box numbers are provided for the reader's convenience only where confusion seems likely.)

2. For a review of debates on the stock market's contribution to the Depression, see Temin, Peter, Did Monetary Forces Cause the Great Depression? (New York: W. W. Norton, 1976).Google Scholar

3. For a good summary of the Depression's effects on the economy, see Chandler, Lester, America's Greatest Depression (New York: Harper, 1970)Google Scholar.

4. Ibid. For the Depression in comparative context, see Kindleberger, Charles, The World in Depression (London: Allen Lane, 1973)Google Scholar.

5. The 1933 Banking Act, also commonly referred to as the Glass-Steagall Act, should not be confused with a 1932 bill that bore the names of the same senator and representative but dealt with different financial issues. The Emergency Banking Legislation, rammed through Congress in a matter of days in March 1933, was also a different bill.

6. The first of several New Deal reciprocal trade measures passed rather early in Roosevelt's first term, but, as explained below, it had virtually no immediate effect on the administration's essentially protectionist trade policy.

7. The “System of '96” reference is to the discussion of “party systems” and American electoral behavior by analysts such as V. O.Keyand Walter Dean Burnham. See, for example, Burnham, 's “The System of '96: An Analysis,” in Kleppner, Paul et al. , The Evolution of American Electoral Systems (Westport, Conn.: Greenwood Press, 1981), pp. 147–202.Google Scholar

8. The role of “Keynesian” public finance versus a bulging export surplus in leading the Swedish revival of the mid and latter 1930s has been extensively debated; the weight of the evidence suggests that the Swedish government did not vigorously implement the advanced monetary and fiscal proposals that were undeniably in the air.

9. See, for example, Schlesinger, Arthur Jr., The Age of Roosevelt, 3 vols. (Boston: Houghton Mifflin, 1957–1960)Google Scholar; Leuchtenburg, William, Franklin D. Roosevelt and the New Deal (New York: Harper, 1963)Google Scholar; and Freidel, Frank, Franklin D. Roosevelt, 4 vols. (Boston: Little, Brown, 1952)Google Scholar. Erwin Hargrove observes how images of Roosevelt and the presidency derived from such works have dominated postwar political science, in his The Power of the Modern Presidency (New York: Knopf, 1974), chap. 1.Google Scholar

10. See, for example, Bernstein, Barton, “The New Deal: The Conservative Achievements of Liberal Reform,” in Bernstein, , ed., Toward a New Past: Dissenting Essays in American History (New York: Pantheon, 1968)Google Scholar, and Radosh, Ronald, “The Myth of the New Deal,” in Radosh, and Rothbard, Murray N., eds., A New History of Leviathan (New York: Dutton, 1972), pp. 146–86.Google Scholar

11. See, for example, Hawley, 's “The Discovery and Study of a ‘Corporate Liberalism,’” Business History Review 52,3 (1978), pp. 309–20CrossRefGoogle Scholar. In contrast, his classic The New Deal and the Problem of Monopoly (Princeton: Princeton University Press, 1962)Google Scholar does not emphasize these themes. See also Chandler, Alfred and Galambos, Louis, “The Development of Large Scale Economic Organizations in Modern America,” in Perkins, E. J., ed., Men and Organizations (New York: Putnam, 1977)Google Scholar.

12. For a review of the West German work see Winkler, H. A., ed., Die Grosse Krise in America (Göttingen: Vandenhoech & Ruprecht, 1973);CrossRefGoogle Scholar perhaps the finest of the libertarian writings are those by Murray Rothbard—see his “War Collectivism in World War I,” and “Herbert Hoover and the Myth of Laissez-Faire,” both in Radosh and Rothbard, New History of Leviathan; for Kolko, 's views see his Main Currents in Modern American History (New York: Harper & Row, 1976)Google Scholar.

13. Some commentators, such as Rosen, Elliot in his very stimulating Hoover, Roosevelt and the Brains Trust (New York: Columbia University Press, 1977,Google Scholar hereafter Brains Trust), have questioned the existence of “two New Deals.” These doubts, however, are difficult to sustain if one systematically compares the policies pursued during each period.

14. Sidney Verba and Kay Schlozman's recent suggestion that American workers remained captivated by the American Dream all through the New Deal does not constitute an answer. The “American Dream,” before the 1930s, had not included mass unionization or social security—the term is elastic. See their “Unemployment, Class Consciousness, and Radical Politics: What Didn't Happen in the Thirties,” Journal of Politics 39, 2 (1977), pp. 291–323.Google Scholar

15. See the discussion in Friedman, Milton and Schwartz, Anna, A Monetary History of the United States (Princeton: Princeton University Press, 1963);Google Scholar Temin, Monetary Forces; Brunner, Karl and Meltzer, Alan, “What Did We Learn from the Monetary Experience of the United States in the Great Depression,” Canadian Journal of Economics 1, 2 (1968), pp.334–48CrossRefGoogle Scholar; Wicker, Elmus, “Federal Reserve Monetary Policy, 1922–33—A Reinterpretation,” Journal of Political Economy 53 (08 1965), pp. 325–43,CrossRefGoogle Scholar and later writings.

16. Kurth, , “The Political Consequences of the Product Cycle: Industrial History and Political Outcomes,” International Organization 33 (Winter 1979), pp. 1–34CrossRefGoogle Scholar; Gourevitch, , “International Trade, Domestic Coalitions and Liberty: Comparative Responses to the Crisis of 1873–96,” Journal of Interdisciplinary History 8, 2 (1977), pp. 281–313;CrossRefGoogle ScholarHibbs, , “Political Parties and Macroeconomic Policy,” American Political Science Review 71, 4 (1977), pp. 1467–87.CrossRefGoogle Scholar

17. I build here on my “Elites and Elections, or What Have They Done to You Lately? Toward an Investment Theory of Political Parties and Critical Realignment,” in Ginsberg, Benjamin, ed., Do Elections Matter (Reading, Mass.: Addison-Wesley, in press)Google Scholar; and “Party Realignment and American Industrial Structure: The Investment Theory of Political Parties in Historical Perspective,” in Zarembka, Paul, ed., Research in Political Economy, vol. 6 (Greenwich, Conn.: JAI Press, 1983)Google Scholar. These papers introduce an “investment theory of political parties.” This approach emphasizes the crippling lack of resources and high “barriers to entry” that ordinary voters face in attempting to act politically, as well as certain special properties of markets for so-called “public goods” that uniquely advantage relatively small groups of large investors.

18. Hibbs, , “Political Parties,” p. 1470Google Scholar.

19. For representative cross-national data on some of the large differences see ibid., and Tufte, Edward, Political Control of the Economy (Princeton: Princeton University Press, 1978), chap. 4.Google Scholar

20. See, for example, Kurth, “Political Consequences”; Gourevitch, “International Trade”; and Abraham's, David well-researched The Collapse of the Weimar Republic (Princeton: Princeton University Press, 1981)Google Scholar. The honored ancestors of this general approach includeGerschenkron, Alexander, Bread and Democracy in Germany (Berkeley: University of California Press, 1943)Google Scholar; Kehr, Eckhart, Battleship Building and Party Politics (Chicago: University of Chicago Press, 1975)Google Scholar; and Rosenberg, Arthur, Democracy and Socialism (New York: Knopf, 1939)Google Scholar.

21. Taxes, for example, might be one issue that would not disappear entirely.

22. Indeed, many exceptions exist; for example, firms whose hazardous working conditions are more likely to be detected by a union (which can bear the detection costs) than by unorganized individuals (who may never realize the danger) will resist unionization far more fiercely than one might expect from the role wages play in their value added. Ability to pass through wage increases and, consequently, a firm's location in the flow of production will also affect concessions vs. opposition to labor. Nevertheless, as a first testable approximation the rule is probably the best available.

23. The (rounded) data for all but chemicals and copper come from the 1929 Census of Manufacturers as presented in Bliss, Charles A., The Structure of Manufacturing Production (New York: National Bureau of Economic Research, 1939), Appendices, especially p. 214Google Scholar. My “automobiles” category is a weighted average of two of Bliss's categories (parts and assembly). The chemicals figure has been calculated as per note 40, below. The copper data, for 1929, have been calculated from the 1963 Census of Mineral Industries (Washington, D.C.), vol. 1, 10C–10Google Scholar, Table 1 (the figure is for “copper ores”). The “refining and smelting” part of the industry shows up in the 1929 Census of Manufacturers (Washington, D.C.), vol. 2, p. 1085Google Scholar. The most reasonable method of weighting and combining all the data yields a corrected estimate of 36.2%; but the difference in terms of this article are meaningless. Note that all figures are for industries; data for individual firms are not available, causing problems for estimates of individual firms (see note 40, below). Note also that the estimates for petroleum probably greatly understate the industry's capital intensity. Finally, industries are listed on the chart if at least one firm in the top 20 as listed in Table 1 below did substantial business in them in both 1929 and 1935. I have also added textiles, by far the largest industry in terms of employment during most of this period, and shoes, as a representative “old” industry also with substantial employment.

24. The assumption that vectors of class conflict indicators and public policies can be treated as scalers is not strictly necessary to this analysis. But it is in accord with both ordinary language and many social science treatments of “rising” or “falling” social strife and labor activity. Note also that while, as suggested below, this analysis scarcely adds up to a theory of the labor movement and while this article focuses on the business community, labor is not being treated as a passive element—note carefully the horizontal axis on Figure 1, which reflects changing levels of social class conflict.

25. I choose this language carefully, to cover instances where a business firm supports both parties. Such instances are much less common or important than generally believed. As I argue at greater length in my “Party Realignment,” no more in politics than in the stock market can everyone profit by buying into the same stock. No less important, most cases of apparent “bipartisanship” rest on undiscriminating evidence—usually public campaign expenditure records. In most cases, more institutionally subtle behavior signals a preference for one or the other candidate.

26. For this, obviously, archival evidence has a privileged position. See, however, my “Party Realignment” for a discussion of the whole question of “evidence.” My experience with corporate records convinces me that the single most important form of business influence on American politics is not the actual transfer of money but the power major businessmen have to influence associates and cultural institutions, especially the media.

27. As with all modeling in the social sciences, of course, more dimensions become necessary the finer the context. “Broadly” labor-related issues include most “social welfare” policies.

28. On these definitions, note 1) the “free” market may well be an oligopoly maintained by a few firms; 2) “internationalists” often have to live in a world full of nationalists and accordingly modify their behavior, 3) occasionally “nationalism” and “protectionism” are not equivalents; 4) occasionally “internationalism” could helpfully be broken down into several dimensions; 5) “internationalism” is usually a matter of degree—any number of firms oriented toward international competition in an open world economy have been happy to welcome government aid where that would not upset a larger equilibrium.

To use this dimension for a real economy requires some impression of the positions of the various industries and firms. I use an independent source: with one exception noted below, subsequent scattergraphs rely largely on summaries of the changing world economic positions of major American businesses presented by Mira Wilkins in her The Maturing of Multinational Enterprise (Cambridge: Harvard University Press, 1974). Based on a judgment about which policies objectively advanced the interests of firms as Wilkins depicts them (where “interest” is equated with profitability), I have placed firms and industries into one of five arbitrarily defined, ordinally ranked spaces along the nationalist-internationalist dimension. Some argument about particular cases is to be expected, especially with General Motors in the '20s, where most analysts have underestimated the pressures from GM's major owner, DuPont, to limit its overseas commitments and the importance of the so-called “rubber war.” However, nothing of importance here is sensitive to this imprecision; indeed, the ordinal scale is of some advantage. On the copper industry I follow James Ridgeway, Who Owns the Earth? (New York: Macmillan, 1980), p. 106.

29. Because only one of these axes has a true metric the definition of a “quadrant” is arbitrary: what is at issue is proximity in the defined spaces. Here, however, it is convenient to speak of “quadrants.”

30. See the discussion in my “Party Realignment,” which also contains a longer and more general statement of the “scattergraph” approach to the analysis of American party systems applied in the present article, a detailed justification for concentrating on big business in the analysis of political change, and some qualifications—unimportant in this article but of considerable significance in general—on the treatment of the financial sector in such graphs.

A word should probably be added about how agriculture figures into the analysis presented here. While reasons of space make it impossible to justify the claim, the politics of farm policy in the New Deal has received more attention than it deserves; while agriculture constituted an important part of Roosevelt's coalition, most of what defined the New Deal derived from other constituencies. Furthermore, agriculture, like industry, is marked by both class and sectoral conflicts, and its political behavior can be analyzed on lines analogous to those for industry. See, for example, R. H. Bates and W. P. Rogerson, “Agriculture in Development: A Coalitional Analysis,” Public Choice 35, 5 (1980), pp. 513–27.

31. Complicating issues do not, of course, only appear during transition to a new party system; I simply claim that additional issues sometimes complicate such transitions.

32. See the discussion in my “Elites and Elections.” Severe but brief downturns, like that in 1920–21, do not last long enough to generate the processes described below in other than feeble, symptomatic form.

33. Because of this “cumulative” role played by past financial and other secondary cleavages, the actual sequence of historical events makes a real difference even in the model.

34. This expression refers to a party system before decay. See, for example, Paul Kleppner, “Critical Realignments and Electoral Systems,” in Kleppner et al., Evolution, pp. 1–33.

35. See my “Party Realignment,” section 4. The shoe industry was singular because in contrast to most other charter members of the Republican bloc, its firms directly confronted a giant trust, United Shoe Machinery. As a consequence, they were far more likely to harbor doubts about the wisdom of “big business” and often went over to conservative Democrats.

36. This discussion neglects a modest movement for very limited trade liberalization promoted by several sectors in the pre-1914 period.

37. For the merger movement of the 1890s, see my discussion in “Party Realignment.” Railroad mergers, organized by leading financiers, were also a part of the consolidation of this bloc.

38. For World War I's major financial consequences for the U.S. economy, see Charles Kindleberger, “United States Foreign Economic Policy 1776–1976,” Foreign Affairs, January 1977, pp. 395–417.

39. For the period's labor turmoil, see Jeremy Brecher, Strike! (Boston: South End Press, 1977), chap. 4.

40. For rankings along the “internationalism” dimension see above, note 28. Because data for wages as a percentage of value added are available only for industries as a whole, I have assigned specific large firms the value of the industry mean, thus eliminating intra-industry differences. While these may sometimes be significant, they are miniscule by comparison to the variations across industries. I have assigned the firms to particular three-digit industries by comparing their main lines of business with “Manufacturing Industries with Large Scale Operations, 1929,” (Bliss, Manufacturing Production, p. 214); and, where possible, checking my industry code assignments against those in the Harvard Business School Project data presented in the Chandler papers “Global Enterprise” and “The M Form.” In this period only the calculations for General Electric, which moved in the 1920s into consumer durables along with its older lines of business in electrical machinery, raised questions about the need to weight two very different Standard Industrial Classification three-digit codes to get one number for the whole. Because the size of the consumer durables segment of GE's business (with its relatively low wages as a percentage of value added) seemed too small to affect the overall firm average, I did not refine the data for “electrical machinery.” However, Westinghouse, which had not yet moved into consumer durables in this period, always seems to lag slightly behind GE's political efforts in the New Deal, in a direction one would predict from knowing the firms' labor sensitivities. (The two firms also differed sharply in the degree of overseas involvement.)

In the case of chemicals, I used a slightly different procedure. As Walt Rostow, The World Economy (Austin: University of Texas Press, 1978), p. 278, observes, the industry is markedly heterogeneous. Accordingly, in preparing Figure 4's estimate of “wages as a percentage of value added” for DuPont, I used the Chandler data's list of the three-digit codes relevant for the firm in 1930. The codes were matched as closely as possible with particular branches of the industry for which statistics were available. On the basis of the 1931 Commerce Department Biennial Census of Manufacturers, pp. 564–83, “wages as a percentage of value added” was estimated for each three-digit industry in which DuPont operated. (In some cases categories had to be combined, using various weighted averages.) Since no better weights were available, an average was taken of wages as a percent of value added for all these three-digit figures and is used in Figure 4. Because a large paper company placed among the top 30 industrials only in 1935, there should strictly speaking be no entry for the sector. I have added it because of my later discussion of the role played by the Mead Corp. in the Second New Deal. Note, finally, that many older industries dominated by small firms, such as shoes, would show up in the same area as textiles and steel if they were plotted.

41. Further footnotes are devoted to primary references or important amplifying facts, which will necessarily be stated in summary form.

42. These long-running negotiations culminated in the Achnacarry Accord of 1928, which cartelized the world oil market outside the United States. It scarcely exaggerates to say that the problem of oil policy during the New Deal was to find a viable domestic complement to this international cartel.

43. For Lodge's views on the League and international finance see his extensive correspondence for 1919 and 1920, now in the Henry Cabot Lodge Papers, Massachusetts Historical Society Library, Boston. The most complete collection of papers of the League's supporters are in the files of Harvard President A. Lawrence Lowell, now in the Pusey Library, Harvard University. The American Tariff League's denunciation of the League (one of many) is from its American Economist, 21 March 1919, p. 190. I am grateful to John W. Coolidge Jr. for permission to examine additional correspondence of Louis A. Coolidge (beyond that in the Lodge Papers) in his family's files; and to Carl Kaysen of M.I.T. for comments on United Shoe's interest in the U.S. market.

44. The literature on the League debate is extensive but short on specific details of exactly who supported what compromises. A few later analysts have questioned whether Lodge should be numbered among the “Irreconcilables,” though everyone concedes his pivotal role in the final outcome. Correspondence from all sides persuades me that Lodge was, indeed, irreconcilably opposed to the League and intended to destroy it all along.

45. Hughes's intimate connections to Standard and the Rockefellers have been extensively overlooked, and actually denied by several biographers. Files of the Standard Oil Company of New Jersey, now in storage at Tulane University Library, New Orleans, La., list him as the corporation's chief foreign policy advisor, in 1917–20, Hughes served as an attorney for both Standard of New Jersey and the American Petroleum Institute, and was a trustee of the Rockefeller Foundation. He was also active in the newly organized (and liberal) Northern Baptist Church, whose interlocking ties to the Rockefeller complex were very close. Carl Parrini's Heir to Empire (Pittsburgh: University of Pittsburgh Press, 1973) gives a excellent summary of the clash between Standard and the British, and the role of the League in this context. See especially pp. 58 and 138ff.

46. As often emphasized, a stronger executive was fundamental to the New Deal.

47. The division between the old and new blocs in the business community, however, is certainly not equivalent to one between traditional and modern management or between firms with and without formal personnel programs. The multidivisional management structures described by Alfred Chandler and other analysts were slowly diffusing through both blocs. Most of the more advanced firms, however—DuPont is the most notable exception—were multinationally oriented.

48. A summary of the overwhelming Eastern bias in the control of U.S. foundations in this period, as well as their growing expenditures for studies of foreign affairs, is Eduard C. Lindeman's long-ignored Wealth and Culture (New York: Harcourt, 1936), especially pp. 44ff. For the interaction of big business and the professions, see among others David Noble, America by Design (New York: Knopf, 1975).

49. For the New York Times, see below; the Moley quotation is from a 13 June 1936 entry in his Journal, now in the Moley Papers, Hoover Institution, Stanford, Calif. Astor and Harriman were the most important of the magazine's owners. Moley later moved much further to the right.

50. Cf. Brecher, Strike, chap. 4, among other sources.

51. The sources for this and the following paragraphs are mostly papers scattered through several archives, including the Rockefeller Archive Center at Tarrytown, N.Y. For the dominance of Standard Oil and General Electric within the group, cf. J. J. Raskob to Lammot DuPont, 26 November 1929, Raskob Papers, Eleutherian Mills-Hagley Foundation, Wilmington, Del.

52. Industrial Relations Counsellors seem to have coordinated the meetings of the group for most of the 1920s.

53. Several (Northeastern) textile executives played leading roles within this group, which produced the otherwise inexplicable sight of a handful of textile men supporting Franklin D. Roosevelt during the Second New Deal, and which for a brief period generated some interesting, if ultimately unimportant, wrinkles in the Hull-Roosevelt trade offensive in the mid 1930s. Boston merchant E. A. Filene, who established (and controlled) the Twentieth Century Fund, and who ardently championed what might be labeled the “retailers' dream” of an economy built on high wages and cheap imports, was deeply involved with this group. The small businessmen of the Taylor Society differed very slightly with their big business allies on two entirely predictable issues: antitrust and financial reform. Supreme Court Justice Louis D. Brandeis, who is usually credited as a major inspiration for many New Deal measures, had once served as Filene's attorney and remained closely associated with him and his brother, A. Lincoln Filene.

54. Ruml's activities in this regard have been well chronicled in James Mulherin, “The Sociology of Work and Pattern of Development” (Ph.D. diss., University of California, Berkeley, 1979).

55. For the astonishing and complicated Morgan-Ford interaction, see, for example, Henry Ford to J. P. Morgan Jr., 7 May 1921, and Morgan to Ford, 11 May 1921, Ford Archives, Henry Ford Museum, Dearborn, Mich. Surrounding correspondence and an oral history memoir at the Archives indicate that a larger group of New York WASP businessmen was also involved and that one Charles Blumenthal, who had a definite though obscure connection to Morgan, subsequently helped out with articles in Ford's Dearborn Independent. For the Manufacturers Trust incident, cf. Thomas Lamont to V. H. Smith at Morgan Grenfell, 10 January 1927, Box 111, Lamont Papers.

56. A large mass of correspondence in the Lamont Papers testifies to the increasing bitterness within investment banking. Cf. Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst (Garden City, N.Y.: Doubleday, 1979).

57. This episode was reported in Time, 30 July 1928, p. 23.

58. For the chemical industry's commitment to tariffs, see Gerard Zilg's remarkable DuPont (Englewood Cliffs, N.J.: Prentice-Hall, 1974). Zilg's study deserves a much wider audience; for a brief analysis of some extra-intellectual factors affecting the book's reception, see Robert Sherrill, “The Nylon Curtain Affair: The Book That DuPont Hated,” The Nation, 14 February 1981, pp. 172–76.

59. This discussion draws on a still-unpublished review of top American wealth holders by Philip Burch of Rutgers University.

60. Cf. Zilg, DuPont, chap. 9.

61. A striking confirmation of the role of late-developing large fortunes in the tax revolt of the '20s is the behavior of the chief representatives of the one other truly gigantic American fortune that, while considerably more mature than the DuPonts', nevertheless still remained in its “takeoff” phase during the decade: Andrew Mellon, leader of the Republican move to cut taxes.

62. A circular sent by Pierre DuPont to other wealthy Americans during the AAPA campaign, quoted in Fletcher Dobyns, The Amazing Story of Repeal (New York: Willett, Clark, 1940), p. 20. This study grasps the dynamics of the Repeal Movement far better than David Kyvig's Repealing National Prohibition (Chicago: University of Chicago Press, 1979).

63. See in particular the penetrating and splendidly detailed study by Paul Johnson, A Shopkeeper's Millenium (New York: Hill & Wang, 1979).

64. For Rockefeller, in particular, cf. Raymond Fosdick, John D. Rockefeller, Jr. (New York: Harper, 1956), pp. 250ff.

65. Cf. Johnson, A Shopkeeper's Millenium, for an excellent discussion of the early period.

66. A crucial letter establishing that the DuPonts were in fact seeking a seat on the board of U.S. Steel is Irénée DuPont to John J. Raskob, 31 March 1926, in the Raskob Papers, File 677, Eleutherian Mills-Hagley Foundation Library; see also Zilg, DuPont, pp. 230ff, on the broader divisions of interest, and several perhaps impolitic statements by Raskob; but note especially the bitter exchange on financing charges between Morgan partner Edward Stettinius and Lammot DuPont, after which the DuPonts appear to have withdrawn part of their business from Morgan (Edward Stettinius Sr. Papers, University of Virginia, Charlottesville). Pierre DuPont's own unhappiness with the frequently tense GM situation, even while its massive dividends were piling up, is clear; see, for example, Pierre DuPont to T. Coleman Dupont, 9 April 1924, Pierre DuPont Papers, Eleutherian Mills-Hagley Foundation.

67. Most of what follows is based on the Chemical Foundation Papers, in the Library of the University of Wyoming, Laramie.

68. For example: “B. says he, (B.) first discussed the Chemical Foundation matter with [New Hampshire Senator] Moses some six months ago and that Moses immediately went directly to President Harding and laid the matter before him. B. claims the entire credit for Harding's recent move [to help compensate the Germans].” From a detective report to Francis P. Garvan of the Chemical Foundation dated 4 July 1922, now in the personal possession of Dr. Anthony Garvan. Francis Garvan was closely associated with J. Edgar Hoover both before and after Hoover became head of the F.B.I. A few surviving letters now in a file belonging to the Garvan family in New York City show that the pair exchanged sensitive intelligence information. The Chemical Foundation Papers suggest that the detectives were probably ex-F.B.I. men. I have made intensive efforts to verify the contents of these reports and am persuaded that they constitute good evidence. For German efforts to secure the return of the patents, see also Joseph Borkin, The Crime and Punishment of I. G. Farben (New York: Free Press, 1978), pp. 170ff, in particular the discussion of John Foster Dulles.

69. Note that this case had nothing to do with the “Teapot Dome,” the scandal for which the Harding administration is best remembered.

70. Dulles's efforts came to light as a result of a congressional investigation years later. See U.S. Senate, Special Committee Investigating the Munitions Industry, International Munitions Control, 37th Congress, 4 and 5 December 1934, pp. 2254ff, which reproduces minutes of a meeting between Dulles and the arms exporters.

71. The German chemical companies had, of course, worked closely together before the amalgamation of the mid 1920s.

72. See Irénée DuPont to W. F. Huntington, 6 March 1926, Box 26, DuPont Co. Papers, Eleutherian Mills-Hagley Foundation, for a full account of the visit to Hoover; see Irénée DuPont to Herbert Hoover, 6 March 1926; and Hoover to Secretary of State Kellogg, 12 March 1926 (the original letter is missing from the Hoover Papers, Hoover Presidential Library, West Branch, Iowa, but is plainly referred to in the letter to Kellogg that Hoover attached with it. (A copy of the original letter is in accession no. 1662, part of the DuPont Co. Archives.) In the light of later events, it is interesting that Hoover's response to these overtures was sympathetic but largely pro forma.

73. Translated from a confidential report to the German ambassador in Washington, 5 November 1926. The microfilm of this and related exchanges with Erich Warburg (nephew of Institute of Economics Trustee Paul Warburg) are now on National Archives Microfilm T 290, no. 27.

74. See, for example, J. Laffey, DuPont General Counsel Office, to P. S. DuPont et al., 8 March 1926, DuPont Co. Papers, written two days after Irénée met with Hoover.

75. Lamont to Dwight Morrow, 16 December 1927, Lamont Papers.

76. For Dulles' activities, in particular, see Hoover to Dulles, 12 and 24 March, 31 May, and 16 June 1928; together with Dulles to Hoover, 2 March, 29 May, and 13 June 1928; all now in the Dulles Papers at Princeton University. See also R. W. Preussen, John Foster Dulles (New York: Free Press, 1982), pp. 92–96. It was Dulles who seems first to have supplied the Germans with a copy of the government's brief in its suit against the Chemical Foundation.

77. See von Knieriem to Ritter, 2 February 1928, National Archives Film T 290, no. 27, and the surrounding cables. Donovan's speech virtually quotes the I. G.'s formula as relayed in these cables; see the reprint of his address, “Foreign Cartels and American Industry,” in Chemical Markets, March 1928, p. 281. Donovan's position can usefully be contrasted with what he had defended only a few months before in “The Antitrust Laws and Foreign Trade,” speech delivered to the National Paint, Oil, and Varnish Association on 28 October 1927 (copy in Box 183 of the Hoover Commerce Department Papers at the Hoover Presidential Library).

78. See the discussion in Borkin, I. G. Farben, chap. 2; at this time Farben was supporting the liberal Weimar government. Not until the East Texas oil discoveries ruined the market for synthetic petroleum did it make its fateful switch. For the inability to reach agreement in the wider talks, see W. J. Reader, Imperial Chemical Industries: A History (London: Oxford University Press, 1975), 2: 47–49.

79. Cf. Zilg, DuPont, pp. 267ff.

80. In her American Business and Foreign Policy (Boston: Beacon Press, 1971), pp. 137–38, Joan Hoff Wilson cites a Hoover “diary” in the Hoover Presidential Library as the authority for an account in which Hoover worked against the bankers. Box 98 of the Lamont Papers contains transcriptions of the telephone conversations to which the “diary” refers. The transcriptions not only refute every detail of Hoover's account but actually record Lamont's specific instructions to the president to conceal the origins of the moratorium. (As Lamont signed off from the first conversation: “One last thing, Mr. President … if anything, by any chance, ever comes out of this suggestion, we should wish to be forgotten in this matter. This is your plan and nobody else's.”) A mass of supporting correspondence in the file confirms the authenticity of the transcripts, while being grossly inconsistent with what Wilson reports about the “diary.” (Hoover often harbored private misgivings about both his policies and his advisors—but he never consistently acted upon these doubts.)

81. This episode is extremely complex: Archives of the Federal Reserve Bank of New York contain a mass of relevant correspondence, including cables to and from the Banque de France (which was withdrawing gold) and the increasingly bitter complaints of the Chicago Fed that the open market operations were driving down the rate on government securities (e.g., J. B. McDougal to George Harrison, 9 July 1932).

82. The House Papers, now at Yale University, contain many letters between House and important figures in the Rockefeller complex. One is quoted below.

83. Rosen, Brains Trust, p. 113, argues that House's influence on Roosevelt ebbed after March 1932. But the aging House could scarcely be expected to provide the daily memoranda and speeches that Roosevelt then needed. There is a sense in which House and all of Roosevelt's early advisors were supplemented, and in part supplanted, by many other forces then coming to life in the Democratic Party; however, House always remained a major actor in the New Deal.

84. See Rosen, Brains Trust, among many other works on the 1932 campaign.

85. The Newton Baker Papers now at the Library of Congress, Washington, D.C. and the Franklin D. Roosevelt Papers at the Roosevelt Library in Hyde Park, N.Y., have a mass of material on the primary and convention battles (e.g. the letters between Baker and Ralph Hayes in the Baker Papers). Rosen, Brains Trust, chaps. 9 and 10, presents considerable detail on the business opposition to FDR's nomination, and is very good on the stop-Roosevelt forces' manipulation of the press.

86. For Lamont's dramatic bid to block Aldrich, see Aldrich interviews, Chase Manhattan Bank Oral History Project, 29 November 1961, now in the Winthrop W. Aldrich Papers, Baker Library, Harvard University; for apprising me of the Rockefeller Center financing controversy I am grateful to Robert Fitch, whose own work on urban development and American political structures involved a lengthy period of work in the Rockefeller Archives. For the subway battle, see the New York Times, 31 July and 27 and 31 August 1932; as well as Cynthia Horan of M.I.T.'s unpublished study of the New York City Bankers Agreement, “Agreeing with the Bankers: New York City's Depression Financial Crisis.” (Exactly who controlled the Manhattan Elevated, one of the parties in the urban transit dispute, is unclear, though the New York Times indicates that the Rockefellers did. Aldrich had certainly represented the line in the late 1920s, when one of several bitter disputes with a Morgan-controlled subway was in litigation.)

87. Agricultural economist M. L. Wilson is normally identified as the author of the adjustment plan. For Rockefeller's role in financing Wilson's early work, see Rosen, Brains Trust, p. 180; see p. 178 for Ruml's role in the famous Wilson-Rexford Tugwell meeting on the eve of the convention.

88. See the crucial letters of Thomas W. Lamont to various business associates and attached memoranda in Box 123 of the Lamont Papers, and my discussion of them in “Elites and Elections.”

89. Some of these are in the House Papers, others in the Aldrich Papers. See, e.g. the House-Auchincloss correspondence in the former.

90. Secretary of Commerce Daniel Roper to Franklin D. Roosevelt, 28 March 1932, Roosevelt Library. This is one of many documents relating to Aldrich's vast lobbying efforts; other aspects of this legislation involved fairly heated exchanges between the Bank of America and the National City Bank of New York. While not as enduringly significant as the separation of investment from commercial banking, these conflicts persisted for some years and complicated the position of the National City Bank during much of the New Deal.

91. House to Roper, 21 October 1933, House Papers.

92. The chief source for most of what follows are the personal papers of Rene Leon, copies of which are now in my possession. See also the correspondence between Walter Lippmann and Leon, now in the Lippmann Correspondence at Yale, and between Moley, Leon, and Deterding in the Moley Papers. Moffett later joined Standard of California.

93. The Frank Vanderlip Papers at Columbia University, New York City, contain the financial records of the Committee for the Nation during this period. The Standard Oil contributions are plainly listed there.

94. See, for example, the Minutes of the Executive Committee of the Open Market Committee, 21 September 1933; these are in the George Harrison Papers at Columbia University and available at the Federal Reserve Bank of New York. Copies also appear in the Minutes of the Directors Meetings of the Federal Reserve Bank of Boston for 4 October 1933, and other dates.

95. When Mrs. Rene Leon originally told me of her husband's efforts to block the efforts of Warburg and the other financiers at the London Conference, she could not remember the name of the businessman who had assisted him. The Leon Papers make it obvious that Moffett was the man as, independently, Mrs. Leon subsequently wrote me. A copy of what is perhaps the urgent telegram sent to warn FDR against Warburg's efforts, which Mrs. Leon remembers her husband dispatching, can be found in Raymond Moley's Papers relating to the London Conference. When that telegram came into Moley's hands is not clear, but this and other files in the Moley Papers contain numerous messages from Leon and even Deterding himself.

96. Robert Wood to Franklin D. Roosevelt, 16 November 1933, Robert Wood Papers, Herbert Hoover Presidential Library. Wood was president of Sears Roebuck, and a leader of the Committee for the Nation.

97. See, among others, Norman Nordhauser, The Quest for Stability (New York: Garland, 1979), chap. 8. I have profited greatly from the material in the J. R. Parten Papers.

98. See, for example, Sidney Lens, The Labor Wars (Garden City, N.Y.: Doubleday, 1973), pp. 288ff.

99. See Walter Lippmann, “Self-sufficiency: Some Random Reflections,” Foreign Affairs, January 1934.

100. “Memorandum on the Views Relating to the Work of the Committee on Economic Security Expressed by Various Individuals Consulted,” National Archives Record Group 47, Public Record Office, Washington D.C. The interviews reported in this memo were taken “on a trip to New England and New York on August 19–21, 1934.” I am grateful to Janet Corpus for bringing this memo to my attention.

101. It is impossible to inventory all of the relevant citations here, but see the material in Record Group 47 of the National Archives and, especially, the material in Box 31 of the Ralph Flanders Papers, Syracuse University Library, Syracuse, N.Y.

102. Some authors suggest that because strike rates went from ionospheric in 1934 to merely stratospheric in 1935, the Wagner Act cannot have been adopted in response to pressure from labor. In fact, the expiration of the NRA determined when the soaring overall rate of class conflict would affect the statutes. The Supreme Court decision declaring the NRA unconstitutional came only days ahead of the law's lapse. Obviously, what follows on the origins of the Wagner Act hardly suffices as a treatment of the rise of labor during the New Deal. I largely discuss elite responses to mass protest; I do not pretend to be offering a theory of the labor movement.

103. See, for example, Charlton Ogburn to William Green, 7 January 1935, Box 282, W. Jett Lauck Papers, University of Virginia.

104. See Sloan's remarkable letter to J. J. Raskob, 23 October 1934, Raskob Papers.

105. In the Twentieth Century Fund deliberations, some railroad leaders, noting the Wagner bill's similarity to the Railway Labor Act, supported its passage; Industrial Relations Counsellors opposed some of its key provisions; while nearly all the businessmen sought an equivalent “unfair labor practice” provision applying to unions. AFL attorney Charlton Ogburn, however, won out. Some aspects of New Deal tax policy (which was certainly not radical) should probably also be viewed as evidence of labor's rising power.

106. Morgan had sought to repeal Glass-Steagall. Aldrich blocked this, but had to accept a shift of power within the Fed from the New York Bank to the Board of Governors in Washington, which the Bank of America and other non-New York bankers championed. The almost simultaneous legislation aimed at breaking up public utility holding companies drove another nail into the coffin of the House of Morgan, for that bank totally dominated the industry, especially after Insull's bankruptcy.

107. The Parten Papers, along with those of Interior Secretary Ickes at the Library of Congress and Texas Governor James Allred, now in the University of Houston Library, Houston, Texas, contain large amounts of material on oil issues. See, as one example, Franklin D. Roosevelt to Governor E. W. Marland of Oklahoma, 17 May 1935 (copy in the Allred Papers).

108. See Bernard Baruch to Eugene Meyer, 20 May 1936, Baruch Papers, Seeley Mudd Library, Princeton University. Meyer was at that time helping to run the Landon campaign. Note that in autumn 1935 Standard had helped turn aside Hoover's bid for the '36 nomination (see Herbert Hoover to Lewis Strauss, 23 September 1935, Lewis Strauss Papers, Hoover Presidential Library).

109. The Chemical Foundation Papers contain much material on Francis P. Garvan's efforts to promote protectionism around the time of the Convention. See especially Garvan's correspondence with F. X. Eble and Samuel Crowther, in Box 11–2.

110. Samuel Crowther to Francis P. Garvan, 18 July 1936, Box 11–2, Chemical Foundation Papers.

111. New York Times, 29 October 1936, p. 10.

112. The details of all the high-level switches around the trade issues and the complex positions of some large interests (such as the Rockefellers) cannot be discussed here for reasons of space. Note, however, George Foster Peabody to A. H. Sulzberger of the New York Times, 5 December 1935, on the importance of good coverage for FDR and Sulzberger's accommodating reply of 12 December, both in George Foster Peabody Papers, Box 50, Library of Congress. Peabody held a large demand note on Roosevelt's Warm Springs, Ga., Foundation.

113. For some documentation on the trade committee, cf. Aldrich Papers, Box 67. For Ruml's role in the deficit spending plan, cf. Robert Collins, Business Response to Keynes (New York: Columbia University Press, 1981), pp. 69ff.

114. Francis Fox Piven and Richard Cloward, Poor People's Movements (New York: Vintage, 1976).

115. See the discussion in my “Party Realignment,” especially notes 44 and 45.