America's Money Machine

166 PART III / DEBACLE OF AN IDEA
Subsequently, the President met with a group of labor leaders headed
by William Green, president of the American Federation of Labor, with
a resultant statement to the effect that as employers had agreed not to
initiate wage reductions labor would not seek wage increases. Henry Ford
spectacularly announced that not only was he not reducing wages, but he
was raising them.
These conferences were followed by a wire from the President to the
governors·and mayors urging their cooperation in a program of public
works expansion. At the same time he announced a $2 billion program
of federal public works.
The editorial of the New York Times on these conferences is a fair
summary of the Hoover approach:
It is certainly an experiment "noble in motive" which President Hoover
has been trying this week. He is attempting to change the mental attitude of
a whole people. By methods which he has made familiar before, and which
are now apparently effective, he has sought to bring about a shift in mass
psychology.... It is a sort ofmental transformation which President Hoover
is endeavoring to produce. For boom and apprehension he would substitute
confidence and hope, founded upon the stable elements in our business and
industrial fabric. ... The best of it all is that in all the outgivings by the
Washington Administration, a note of caution has been sounded along with
the optimism. 8
But as the depression spread, with bankruptcies and falling prices, and
unemployed men and bread lines, the cry went up as before the Prophet
Samuel in ancient Israel, "Make us a king to judge us like all the nations,"9
and the Administration was impelled more and more into authoritarian
programs.
For some years, ofcourse, an increasingly influential school ofintellectuals
had been urging the virtues of state planning, and authoritarian
controls, and Hoover himself, as we have noted, had accepted the idea
of public works expenditures as a counterbalance to cyclical dips. Now,
leaders of the business world, long champions of "private enterprise,"
individual effort and "laissez faire," began to urge the importance ofstate
intervention. Among these was William Randolph Hearst, who in 1931
threw the tremendous influence of his newspaper empire in favor of a
$5 1/2 billion dollar public works program. The "progressive" Republican
Senator Robert M. La Follette, Jr. of Wisconsin introduced a bill to
provide $3,750 million for loans to state and other public bodies for
public works, and early in 1932 Democratic Senator Robert F. Wagner