"Assistant President" for the home front

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Title:
"Assistant President" for the home front James F. Byrnes and World War II
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viii, 376 leaves : ; 28 cm.
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Partin, John William
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World War, 1939-1945 -- United States   ( lcsh )
Politics and government -- United States -- 1933-1945   ( lcsh )
History thesis Ph. D   ( lcsh )
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non-fiction   ( marcgt )

Notes

Thesis:
Thesis--University of Florida.
Bibliography:
Bibliography: leaves 367-375.
Statement of Responsibility:
by John William Partin.
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Typescript.
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Vita.

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University of Florida
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oclc - 03624878
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Full Text















"ASSISTANT PRESIDENT" FOR THE HOME FRONT:
JAMES F. BYRNES AND WORLD WAR II











By

JOHN WILLIAM PARTIN


A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY



UNIVERSITY OF FLORIDA


1977
































Copyright

1977

John William Partin















ACKNOWLEDGMENTS


In the course of researching and writing this disser-

tation, I have had the assistance of many people. I owe a

special debt of gratitude to the librarians of the various

institutions where I did research. I especially wish to

thank Mrs. Priscilla H. Sutcliffe, special collections

librarian, and the staff of Clemson University Library,

and Drs. William R. Emerson, director, and

Raymond J. Teichman, reference archivist, of the

Franklin D. Roosevelt Library. I am also indebted to the

staffs of the National Archives, Harry S. Truman Library,

Library of Congress, Yale University Library, and

University of Florida Libraries. I am particularly

grateful to the Eleanor Roosevelt Institute for providing

a grant that made possible my stay at Hyde Park.

Kathleen Anne McConnell Partin, Dr. John K. Mahon, and

Dr. George K. Pozzetta read the entire manuscript and

improved it by their criticism.
















TABLE OF CONTENTS


Page
ACKNOWLEDGMENTS....................................... iii

ABSTRACT............................................. .. vi

CHAPTER
I BYRNES AND ROOSEVELT: THE MAKING
OF A POLITICAL PARTNERSHIP.......... 1
NOTES TO CHAPTER I................... 26

II A HAPHAZARD APPROACH TO MOBILIZATION... 28
NOTES TO CHAPTER II ................. 57

III THE OFFICE OF ECONOMIC STABILIZATION,
TAXATION, AND SALARY AND WAGE
CONTROLS ............................ 61
NOTES TO CHAPTER III ................ 87

IV BYRNES, LABOR DISPUTES, AND MANPOWER
POLICY .............................. 92
NOTES TO CHAPTER IV................. 109

V THE OES, AND THE RATIONING AND
FARM PROGRAMS ....................... 112
NOTES TO CHAPTER V.................. 136

VI BYRNES AND THE PRODUCTION EFFORT....... 141
NOTES TO CHAPTER VI................. 156

VII THE BIRTH OF THE OFFICE OF WAR
MOBILIZATION ........................ 158
NOTES TO CHAPTER VII................ 172
VIII THE OFFICE OF WAR MOBILIZATION:
LABOR AND MANPOWER PROBLEMS......... 175
NOTES TO CHAPTER VIII............... 209













TABLE OF CONTENTS (continued)


CHAPTER Page

IX TIlE OFFICE OF WAR MOBILIZATION
AND THE MILITARY .................... 214
NOTES TO CHAPTER IX................. 235

X ROOSEVELT'S PEACE-KEEPER............... 238
NOTES TO CHAPTER X.................. 260

XI BYRNES AND POLITICS .................... 264
NOTES TO CHAPTER XI................. 303

XII RECONVERSION........................... 310
NOTES TO CHAPTER XI1 ................ 333

XIII THE OWMR, RESIGNATION, AND
CONCLUSION .......................... 336
NOTES TO CHAPTER XIII ............... 363

SELECTED BIBLIOGRAPHY................................. 367

BIOGRAPHICAL SKETCH................................... .376















Abstract of Dissertation Presented to the
Graduate Council of the University of Florida
in Partial Fulfillment of the Requirement for the
Degree of Doctor of Philosophy



"ASSISTANT PRESIDENT" FOR THE HOME FRONT:
JAMES F. BYRNES AND WORLD WAR II



By

John William Partin

August 1977

Chairman: John K. Mahon
Major Department: History

World War II had a cataclysmic impact on interna-

tional affairs and compelled profound changes in domestic

America. For various reasons President Franklin D.

Roosevelt, notorious for his unorthodox administrative

techniques, created a series of agencies with inadequate

authority to manage the mobilization effort. Once America

entered the war, the president delegated more authority,

but no one administrator had overall responsibility for

policy and program determination and for coordinating the

implementation of programs. By then inflation imperiled

the entire war effort.

In the fall of 1942, Roosevelt finally moved to con-

trol inflation. In October James F. Byrnes, a loyal and












trusted presidential adviser, resigned from the United

States Supreme Court in order to accept appointment as

director of the Office of Economic Stabilization (OES).

With offices in the White House Byrnes had authority to

set policy and decide programs for wage, salary, price,

and rent controls and for rationing scarce, essential

consumer goods. Roosevelt also assigned him the equally

important and vexatious task of settling disputes among

executive departments and agencies. By the next spring

Byrnes and his OES staff had reversed the inflationary

trend. In spite of opposition from special interest

groups and little real support from Congress, the OES

director established a firm but flexible stabilization

program that kept the cost of living under control.

During the same period the president expanded

Byrnes's duties as he proved his administrative abilities.

The OES director was an important liaison with Congress,

mediated interagency disputes and labor strikes, and

handled certain production problems. The variety and

number of such problems illustrated the need for one

agency with authority to determine policy and programs for

the entire mobilization effort. In May 1943, Byrnes

persuaded the president to create such an agency, and that

same month Roosevelt appointed him as director of the


vii













Office of War Mobilization (OWM). He now was the

"Assistant President" for the home front, supervising the

military and civilian production programs, and the

stabilization program, and resolving controversies among

czars and heads of agencies and departments. Acting as

the political manager of the home front, Byrnes exercised

the power that Roosevelt had never fully delegated before

to any one man.

Because the mobilization process had already been

institutionalized, Byrnes devoted himself to setting and

coordinating policy and adjudicating controversies. He

eschewed making the OWM into a national planning agency.

Congress recognized his and the OWM's valuable service by

enacting legislation to create the Office of War Mobili-

zation and Reconversion (OWMR). In October 1944, even

though he had suffered a bitter disappointment at the

Democratic National Convention, Byrnes agreed to assume

the directorship of the OWMR. Roosevelt's failing health

and his concern with diplomacy meant that Byrnes had even

more responsibility for the home front. The OWMR director

presided over the final production surge, decided impor-

tant reconversion and manpower policies, and imposed

stringent controls on civilian life. In April 1945, after

rendering the nation and Roosevelt invaluable service,

Byrnes resigned and returned to South Carolina.


viii














CHAPTER I
BYRNES AND ROOSEVELT:
THE MAKING OF A POLITICAL PARTNERSHIP


On this sunny, sleepy morning, December 7, 1941,

sailors lounged on the decks of the seventy combatant

ships and twenty-four auxiliaries anchored at Pearl

Harbor. Most officers were still below; some were eating

breakfast. Shortly before 8 A.M. Japanese aircraft

attacked and devastated the military installations and

fleet in the harbor. What President Franklin D.

Roosevelt had been unable to do, the surprise attack did:

the American people united in support of the war effort.

Later that week Supreme Court Justice James F. Byrnes

met with President Roosevelt to discuss the problems of

mobilizing America for the ordeal of total war. The jus-

tice was eager to aid the president in any possible way,

and his duties on the Court seemed too remote and unimpor-

tant. Just the previous day, December 9, he had heard

arguments in a case that dealt with contracts for ships

built during World War I. lie hoped to have a more vital

role than this in the war effort. Fortunately for Byrnes,

Roosevelt planned to make use of his political acumen.

As Byrnes talked with the president in his bedroom on

the morning of December 10, Roosevelt's grave demeanor












mirrored his concern about the required mobilization of

the American people, productive facilities, and Congress

for the task ahead. While in the bathroom shaving, he

continued the conversation with Byrnes sitting "on the

only seat in the room." Byrnes jocosely told the presi-

dent that his 1937 "court packing" scheme had been all

wrong. During wartime Byrnes said a man should not be

appointed to the Court until he had reached the age of

seventy. After Roosevelt had expressed anxiety about the

administration's relationship with Congress, the justice

readily agreed to try to expedite the passage of war mea-
3
sures.

Roosevelt primarily needed the skills and personal

ties that Byrnes had developed during his quarter century

service in the House and Senate. Indeed, Roosevelt ap-

pointed him to the Court as a reward for valiant service

in precisely this sort of role. Over the years

James Byrnes had developed a strong personal loyalty to

and friendship for Franklin Roosevelt. Their relationship

survived differences in background, political philosophy,

and constituency. During the New Deal years Byrnes had

been one of the president's valued political advisers,

companions in relaxation, and confidants.

Justice Byrnes enjoyed few of the amenities of the

Roosevelt childhood. The son of Irish immigrant parents,












Byrnes was born on May 2, 1879, in a little sagging-

galleried frame house on King Street in a lower middle

class neighborhood of Charleston, South Carolina. Because

his father died shortly before Byrnes's birth, his mother,

Elizabeth, became a dressmaker in order to support her two

children, James and Leonore, and her nephew,

Frank J. Hogan. Life was not easy for the family, but his

mother was able to make ends meet.

As soon as he was old enough, Byrnes worked after

school as his mother's delivery boy. He attended

Charleston's public schools, blossomed into one of the

best students in his class, but quit school at the age of

fourteen to lift some of the financial burden from his

mother. The future Supreme Court Justice worked as an

office boy in the prestigious Charleston law firm of

Mordecai, Gadsden, Rutledge and Hagood.4

Byrnes soon became a favorite of the Broad Street

attorneys because of his humorous and witty personality,

his quick and agile mind, and his ability to take short-

hand, which his mother had taught to her children. One

member of the firm, Benjamin H. Rutledge, took an especial

interest in him. Rutledge supervised his reading of his-

tory and literature and acted as his mentor. Byrnes

adopted Rutledge's aristocratic and gracious manners. His












success in this position demonstrated that he had overcome

the hardships of his childhood. Ambitious and bright,

Byrnes wanted more from life.

In the summer of 1900, he moved to Aiken,

South Carolina, to assume his duties as court stenographer

to Judge James Aldrich of the Second Judicial Circuit.

Byrnes won his position through a competitive examination.

Like Rutledge, Judge Aldrich supervised Byrnes's continued

education. Byrnes learned enough law from reading and his

job to pass the bar examination in 1904. But his law

practice earned him little additional income because his

office attracted many friends who wanted free legal ad-

vice. In order to support his mother and his grandmother,

both of whom had moved to Aiken, Byrnes remained the court

stenographer and acquired the Aiken Journal and Review,

with a partner.

By now Byrnes, who was five feet seven inches tall

and weighed 140 pounds, had grown into a handsome young

man with an elfish appearance and infectious charm. He

exuded confidence, was an extrovert, spoke with a soft

drawl, and seemed to have boundless energy. An indefati-

gable worker, he also enjoyed a vivacious social life. In

Aiken he courted Maude Busch and married her on May 2,

1906. Although reared a Catholic, Byrnes joined the












Episcopal church after his marriage, a religious conver-

sion that caused him problems in his later political ca-

reer.

Byrnes still wanted more out of life. He made deter-

mined efforts to meet people and make friends. When he

served as court stenographer, he memorized the names of

every member of the juries. He learned many of the

nuances of the law and politics during his travels on the

judicial circuit. In 1908, resigning his position as

court stenographer, Byrnes won election to the office of

solicitor for the Second Judicial Circuit, with duties

equivalent to those of a district attorney. Byrnes

achieved favorable notoriety by successfully prosecuting

several important murder cases. He also made juries

accept testimony from blacks and prosecuted assaults on

blacks. In order to further his political career, he

sought election to the United States House of Representa-

tives from the second district in 1910. Hie later recalled

that he "'campaigned on nothing but gall, and gall won by

fifty-seven votes.''5

But the young solicitor had more to offer the voters

than just gall. His successful stint as solicitor proved

that he had become a competent and diligent lawyer, who

cared for justice as much as for legal procedures. Byrnes












waged a vigorous campaign, participating in the "rural

festivals," a series of debates among the three candidates

in each county of the district. Because no candidate

received a majority of the votes in the first primary, a

second one was held in which Byrnes defeated the incum-

bent, J. 0. Patterson. The voters in the second district

sent to Congress a man who had made his own way in the

world, who had demonstrated his unusual abilities as

solicitor, and who hoped to improve his constituents'

welfare.

Byrnes represented a rural constituency that rarely

expected much more from their congressman than seeds and

bulletins from the Department of Agriculture. An hour or

two each morning was all that these duties demanded of his

time. Thus, Byrnes had many free hours to immerse himself

in the details of the legislative process. He assiduously

studied the art of politics, learning the intricacies of

congressional life and influence by attending committee

meetings and observing the activities on the House floor.

Even his living quarters in the Congress Hall Hotel, the

abode of many congressmen, furthered his opportunity to

imbibe the nuances of politics and to make friends with

such influential legislators as Ben Tillman of

South Carolina, Champ Clark of Missouri, Joe Cannon of












Illinois, Carter Glass of Virginia, John Nance Garner of

Texas, Claude Kitchin of North Carolina, Joe Robinson of

Arkansas, Pat Harrison of Mississippi, and Cordell Hull of

Tennessee.

During his seven terms in the House, Byrnes developed

and refined his skills as a politician much in the same

way that men devoted themselves to a profession or a

business career. Indeed, for Byrnes, politics became a

profession and a means of social mobility. This was also

true of other southerners who, without family connections,

found politics to be an avenue of upward mobility. Byrnes

could have earned much more money practicing law, as he

did from 1925 until his victorious senate campaign in

1930. But the lure of politics and Washington life over-

shadowed his acquisitive drive.

Byrnes had simple tastes; he once described his mate-

rial needs as "'two tailor-made suits a year, three meals

a day and a reasonable amount of good liquor.'" Byrnes,

who was somewhat nervous and high-strung, enjoyed relaxing

in the late afternoon, at bullbatt time" (or "happy

hour"), with either colleagues or newspapermen, like

Turner Catledge and Walter Brown. While drinking bourbon

and "branch water," he liked to sing hymns and old

southern ballads. In his Senate days his favorite song












was "When My Dream Boat Comes Home." Drinking was an

integral aspect of the congressional ambience, but he

rarely, if ever, overindulged.

Byrnes's personality was well-suited for politics;

he was a natural, pragmatic politician. He had a middle-

of-the-road political philosophy, slightly to the right of

center. From his careful examinations of politics and

human nature, he realized that legislation resulted from

compromise, reconciliation, and the dialectics of the

legislative process. Throughout his congressional career

Byrnes evidenced little concern for the limelight: re-

sults, not publicity, were what he was concerned with.

With the election of Woodrow Wilson the Democrats,

and Byrnes in particular, enjoyed the privileges of being

the party in power. First, Byrnes paid his dues to the

House Democratic leadership by performing assigned tasks,

which also demonstrated his abilities. He became an

ardent supporter of much of Wilson's legislative agenda

and concentrated on banking reform, better roads, and

veteran benefits. A lifelong Democrat, Byrnes supported

the Underwood Tariff, the Federal Reserve Act, and the

Clayton Anti-Trust Act. When the New Freedom diverged

from his own or the South's interests, he voted against

the administration. He, for instance, opposed the '












Keating-Owen Child Labor Law, which he thought was an

unconstitutional application of the interstate commerce

clause. He was also apprehensive that the federal govern-

ment might use this power to prohibit mills that had

segregated work forces from sending their goods across

state lines. Throughout his congressional career Byrnes,

according to Winfred B. Moore, decided the merits of all

issues based upon the dictates of his own predilections,

the interests of South Carolina, and those of the South

in general.

Once war erupted in Europe in 1914, Byrnes supported

and worked for virtually all of the defense measures. At

the same time, he abided by and mastered the congressional

rules of etiquette. In 1917, the same year the

United States entered the war, Byrnes was named to the

appropriations committee and performed ably an important

role in the war as chairman of the naval appropriations

subcommittee. Working closely with Assistant Secretary of

the Navy Franklin D. Roosevelt, he facilitated the buildup

of the navy by helping to write and push through naval

appropriation bills. And Byrnes protected Roosevelt who

consistently proceeded before Congress had passed the

necessary authorization. It was during World War I that

the young congressman developed a close friendship with

Roosevelt.












Byrnes's ardor for the prosecution of the war degen-

erated into an unquestioning acceptance of the irrational

nativist outbursts of this period. He was a votary of

Attorney General A. Mitchell Palmer who tried to stamp out

the "radicalism" of immigrants and to enforce 100 percent

Americanism. Because of his white supremacist beliefs,

Byrnes readily identified the "super patriots'" fear of the

"imminent" communist take-over with the southerner's

reaction to the racial disturbances of the summer of 1919.

The race riots and unrest of 1919, Byrnes contended, had

been provoked by "incendiary" demands of such black

leaders as W. E. B. DuBois, A. Phillip Randolph, and

William Monroe Trotter. Proclaiming that blacks did not

want equal treatment, Byrnes argued that blacks would only

make progress by following the whites. He had yet to

demonstrate any willingness to contravene the dominant

social customs of the South: to allow blacks economic,

social, and legal equality.

Despite Wilson's appeals for the election of a

Democratic Congress in 1918, the Republican party won

control of both houses. Byrnes served his last six years

in the House without the perquisites he had enjoyed.

Nonetheless, he still supported Wilson's foreign policy

well into the 1920s, advocating disarmament and American












participation in the World Court and the League of

Nations. As a delegate to the 1920 Democratic National

Convention in San Francisco, Byrnes backed

A. Mitchell Palmer for the presidential nomination. But

failing in this, he worked to secure Roosevelt's nomina-

tion as Governor James M. Cox's running mate. Byrnes

interceded with Charles Murphy of Tammany Hall in behalf

of Roosevelt, and the delegates did name Roosevelt the

vice-presidential nominee. The 1920s was a decade of

Republican ascendency; the Democrats did not win the

presidency again until 1932. Remaining in the House until

1925, Byrnes continued to voice his views, particularly

stressing economy in government.

In 1924, Byrnes decided to campaign for the Senate,

where he believed he could have a more rewarding expe-

rience, even in the minority. Because no candidate re-

ceived a majority of the votes in the four-man primary,

Byrnes and former governor Cole L. Blease, who had re-

ceived the most votes, competed in a runoff election.

Immediately prior to election day a circular, which

ostensibly endorsed Byrnes, was circulated throughout the

state, and particularly in Ku Klux Klan strongholds. This

circular praised Byrnes for his exemplary Catholic child-

hood. Blease won the election, perhaps because of this












blatant appeal to the anti-Catholic vote. Byrnes now

joined the law firm of Sam J. Nicholls and C. C. Wyche

of Spartanburg.
S During this hiatus in his political career, Byrnes

savored life as a successful lawyer. The Depression,

however, shattered the normalcy of the 1920s. In 1930,

South Carolinians experienced the hard times of the

Great Depression, and many were dissatisfied with

Senator Blease. The anti-Blease faction turned to Byrnes

as the most promising man to unseat him in the 1930 pri-

mary election. Byrnes entered the contest partly to

avenge his 1924 defeat and partly because he was an innate

politician. Without a doubt, he missed the opportunities

of service and the other advantages found in holding

national office.

Byrnes again faced Blease in a runoff primary, as

neither candidate won a majority of the votes in the first

election. Fortunately for Byrnes, the losing candidate,

Leon W. Harris, threw his support to him; so the anti-

Blease vote did not splinter. Byrnes won the second pri-

mary and, in doing so, helped to inaugurate a new campaign

style in South Carolina politics. While assuring the

voters that he would brook no change in white supremacy,

Byrnes de-emphasized the race issue, tried to put it in












its "proper perspective," and campaigned on issues more

pertinent to the Depression.

Before he reentered politics, Byrnes had already re-

newed his personal contact with Franklin Roosevelt. In

1928, after Roosevelt won election as governor of

New York, Byrnes offered to support him for the Democratic

presidential nomination in 1932. After Byrnes returned to

Washington as senator, he corresponded with him more fre-

quently, and in January 1932, he visited the governor in

Albany. By now, Byrnes had become a charter member in the

"Roosevelt for President" network, and he later secured

the adoption of a resolution, endorsing Roosevelt, at the

South Carolina state convention. Byrnes promoted

Roosevelt at the Democratic National Convention, and he

worked for him during the campaign.

In the last few frenzied weeks of the campaign,

Byrnes traveled aboard the Roosevelt campaign train,

acting as a speech writer. Senator Key Pittman of Nevada

and Byrnes worked closely with Raymond Moley, an original

member of the Brains Trust, in preparing speeches. The

South Carolinian was one of the principal draftsmen of the

"Four Horsemen" speech in which Roosevelt attached to

Republican leadership the appellation of "Destruction,

Delay, Deceit, and Despair." The Byrnes-Roosevelt part-












nership of the campaign presaged Byrnes's role in the

new administration.

Besides his friendship with Roosevelt that grew out

of their shared war experiences, Byrnes became a Roosevelt

votary because of the similarities in their personalities

and their political beliefs. Both Roosevelt and Byrnes

liked people and were gregarious extroverts, and both

loved the South and hoped to ameliorate its stricken con-

dition. And both were natural, inherent politicians,

abhorred inflexibility, and were skillful and practical

in their pursuit of results.

During the five-month long interregnum, Byrnes acted

as a liaison with Democratic legislators. The inaugural

brought to a close a series of strategy conferences that

he had with Roosevelt, members of the Brains Trust, and

other Democrats in Congress. Once in office Roosevelt

moved quickly on legislative proposals. As with the

entire first term, Byrnes proved to be invaluable in

drafting legislation and in pushing bills through the

Senate.

During the First Hundred Days Byrnes helped to draft

the Emergency Banking Act and the Home Owners' Loan Act,

worked for the passage of the Economy Act, the Securities

Act, and the Farm Credit Act; and acted as whip for the












Civilian Conservation Corps Act, the Federal Emergency

Relief Act, and the Agricultural Adjustment Act. Byrnes

either assisted in drafting or acted as whip in the fol-

lowing legislation: the Securities Exchange Act, the

Glass-Steagall Act, and the 1934 appropriations bill. In

1935, the arduous fight to secure passage of the $4.8 bil-

lion appropriation for work relief revealed the extent of

his support for the New Deal. Byrnes fought long and hard

for the bill in the appropriations committee, which

finally sent it to the Senate floor by the narrowest mar-

gin, one vote. This bill allowed the president to

establish the Works Progress Administration under

Harry Hopkins.

That same year President Roosevelt, incensed by the

adverse rulings of the Supreme Court, initiated a new

round of "must" legislation that became known as the

Second Hundred Days. Byrnes approved of and worked for

these legislative requests. In the area of civil rights

Byrnes followed the dictates of his southern ambience. He

fought all attempts to enact an antilynching bill, which

Roosevelt never considered "must" legislation. In 1935,

Byrnes and other southern senators prevented the passage

of this bill by engaging in a filibuster, and the next

year he blocked the passage of a resolution providing

funds for a lynching investigation.












In 1936, Roosevelt again relied upon Byrnes for ad-

vice and help in preparing for the Democratic National

Convention. The senator interrupted his own reelection

campaign plans to discuss with the president convention

strategy. While a member of the platform committee in

Philadelphia, Byrnes unsuccessfully tried to defeat the

adoption of a motion to abrogate the two-thirds rule.

This rule, which had required a two-thirds majority of the

delegates before a candidate could win the presidential

nomination, had previously given the southern delegates a

virtual veto over the selection of the candidate, and

Byrnes was worried about the consequences for the South

once this rule was amended to require only a simple

majority.

After Roosevelt's renomination Byrnes returned to

South Carolina, where he faced two opponents in the pri-

mary. His opponents damned the "radicalism" of the

Congress, denigrated federal intrusions into areas of

states' rights, raised the specter of race, and tried to

convince the voters of Byrnes's complicity in these

"travesties." Byrnes, nevertheless, easily won renomina-

tion, receiving 87 percent of the votes.

"Happy Days" were indeed here again for the presi-

dent, as he swamped Alf Landon, the Republican nominee, in












the November election. But the New Deal had peaked; in

the second term the relationship between the executive

and the legislative branches would revert to the almost

adversary roles of more normal times. The rift within the

ranks of the congressional Democrats, inchoate before

1936, widened with the more conservative Democrats,

usually from the South, and the Republicans forming an

amorphous coalition. The relationship between Byrnes and

Roosevelt was a microcosm of the tension between president

and Congress.

During the Great Depression Roosevelt and Congress

provided a variety of programs that mitigated, to a cer-

tain extent, the severity of the economic crisis. Many

Democrats and Republicans thought Roosevelt had already

asked for enough programs for relief, and they believed

that it was time for the country to mend itself. In

February 1937, the president undermined his own relation-

ship with Congress by asking for legislation to increase

the number of Supreme Court justices. Since 1935,

Senator Byrnes had spoken against the Court's "legislating

by a majority of five." Thus, the senator supported the

president's Court "packing" plan. But the plan split the

Democratic ranks in the Senate, and Roosevelt finally had
to admit defeat.8
to admit defeat.












Byrnes had grown anxious about the continued expan-

sion of the federal government and such social groups as

labor unions. Furthermore, the New Deal had transformed

the Democratic party; it now drew much of its support from

northern urban areas. Byrnes translated this anxiety into

parliamentary maneuvers to delimit the growth of these

countervailing powers.

In 1937, he sponsored an amendment to outlaw all

sitdown strikes; it did not pass. But the major rift

between Roosevelt and Byrnes appeared during consideration

of the appropriation bill for the Works Progress

Administration (WPA). In June the House passed a $1.5

billion appropriation bill for the WPA and sent it to a

smoldering Senate. Many conservative and moderate

senators believed it was time to balance the budget, and

some feared that Roosevelt might form a potent political

machine from the workers on WPA payrolls.

The WPA, Byrnes reasoned, ministered only to the

jobless without attacking the structural causes of

unemployment. As chairman of the appropriations sub-

committee on relief, Byrnes tried to mold the WPA appro-

priation bill to effect a reduction in the amount of

relief spending. When he failed to win enough support to

slice $500 million from the bill, he secured the approval












of the appropriations committee for a bill that would

require local relief agencies to contribute 40 percent of

the cost of the local WPA projects. This would allow the

president to intervene if the local agency took a pauper's

oath, and would limit administrative costs to 3 percent of

the total expenditures.

On the Senate floor Byrnes and Majority Leader

Joseph T. Robinson proposed an amendment, requiring only a

25 percent local contribution and removing the pauper's

oath, in an attempt to win more votes. The administration

had the votes and defeated these attempts to reduce the

relief appropriation. Byrnes and other southern senators

objected to this large relief bill because much of the

money went to northern urban areas and some of the funds

to indigent blacks. He also opposed the fair labor

standards bill that proposed to set minimum wages and

maximum hours, and to end child labor.

Concurrently with the president's problems with the

renewed assertiveness of the Congress, the "Roosevelt

recession" left him and many politicians perplexed and

uncertain about what to do to correct the economic de-

cline. The recession emboldened the conservatives, who

drafted and circulated a conservative manifesto. Byrnes,

who took no part in the machinations swirling around the












manifesto, wanted no overt break with the president. The

senator still regarded himself as a moderate, hoped to

effect a reconciliation between those of the right and of

the left, and guarded his prerogatives as a man indepen-

dent of both factions.

The following year, 1938, continuing his eclectic

support of the New Deal, Byrnes was the floor leader of

the administration's executive reorganization bill, which

passed the Senate but not the House. But when the Senate

considered the revenue bill, Byrnes, along with

Senator Pat Harrison of Mississippi and Vice-President

John Nance Garner, dealt the administration a severe blow

by spearheading repeal of the undistributed-profits tax

and lowering of tax rates on business. During a fili-

buster against another antilynching bill, Byrnes accused

Walter White, executive secretary of the National Associa-

tion for the Advancement of Colored People, of dictating

to Northern Democrats. The approaching fall elections and

the persistent recession caused Byrnes and other economy-

minded senators to vote for Roosevelt's pump priming

legislation. Yet, Byrnes refused to back the president's

ill-conceived attempts to "purge" recalcitrant Democrats

in the 1938 primaries. A vast majority of the purge

attempts failed; Roosevelt only succeeded in exacerbating

the liberal-conservative split within the party.












As James T. Patterson has argued, the year 1939

marked the zenith of the conservative coalition. Byrnes

and other Democratic senators, like Alva Adams of

Colorado, Harrison, and Alben Barkley of Kentucky, joined

with conservatives in the House in slashing millions of

dollars from the president's relief requests. Recognizing

that unemployment was a permanent problem, Byrnes advo-

cated increased social security and unemployment benefits

to ameliorate the living conditions of those people out of

work. And Byrnes finally won acceptance of the executive
9
reorganization plan.

As Congress battled Roosevelt to a standstill on

domestic policy, events abroad compelled a shift in

Americans' attention from domestic to foreign affairs.

This was when the president regained many of his erstwhile

supporters. During the 1930s, Byrnes traveled in the

Far East and in Europe; he had witnessed the 1937 Nazi

rally in Nuremberg, Germany. The military buildup in

Japan and Germany troubled Byrnes, and he was suspicious

of the designs of these countries. For these reasons, in

1939, Byrnes forgot the domestic differences he had had

with Roosevelt and gave his support to the national

defense program.

As chairman of the naval appropriations subcommittee,

he pushed through increased funds for naval construction.












More importantly, he and Secretary of Agriculture

Henry Wallace drafted a barter arrangement providing for

the shipment of federally-owned wheat and cotton to

Great Britain for tin and rubber. This deal was one of

the senator's major accomplishments and was an important

step in the direction of Anglo-American rapprochement.

But Congress adjourned that summer before acting on

Roosevelt's request to revise the neutrality act. The

arms embargo provision of the neutrality act required the

president to prohibit all arms sales to nations in a state

of belligerency.

On September 1, 1939, Germany attacked Poland. Two

days later Great Britain and France declared war on

Germany. The long-smoldering European crisis had finally

erupted into world war. Roosevelt, upon learning of the

invasion, decided to call a special session of Congress.

Before announcing the session, he had his congressional

leaders survey members of Congress to determine the likely

fate of a request to revise the neutrality act. Byrnes

and others made extensive use of long-distance telephone

calls to gauge congressional sentiment. To strengthen the

leadership in the Senate, Roosevelt made Tom Connally of

Texas the manager of the repeal of the arms embargo and

Byrnes a floor leader.












On September 20, Byrnes and other prominent Democrats

and Republicans met with the president. Roosevelt

announced his intention to replace the arms embargo with

cash-and-carry restrictions. Cash-and-carry meant any

country could buy arms if they could also provide their

own transportation; this provision would obviously favor

Great Britain and France. When the president asked

Congress to repeal the embargo the next day, he based his

request on a disingenuous argument: the cash-and-carry

provision was needed to keep the United States out of the

war. Not once did he enunciate his deep concern for the

fate of England and France.10

Throughout September and into October the neutrality

bloc--an amorphous group of pacifists, "isolationists,"

proponents of national defense, and special interest

advocates--battled the administration for the support of

public opinion. During this legislative struggle Byrnes

again proved his political acumen. He acted as whip,

marshaled the pro-administration votes to defeat crippling

amendments, and explained the necessity of repeal to a

nationwide audience listening to the Herald-Tribune Forum.

On November 4, Byrnes was present at the signing of the

bill into law. The special session maneuvering illus-

trated the renewed, close relationship between the presi-












dent and Byrnes. And this was to continue throughout the

war years. Following his Thanksgiving vacation at

Warm Springs, Roosevelt stopped at Spartanburg, acknow-

ledging Byrnes's support for his program.

During the next year, 1940, Byrnes remained an

administration stalwart. He helped to push through

increased appropriations for the Navy Department, and

fought for the extension of the Reciprocal Trade Agree-

ments Act. Furthermore, he was one of five congressional

leaders to discuss with Roosevelt the exchange of American

destroyers for British bases in the Caribbean and the

North Atlantic. And he worked for the draft bill.

To many, the outbreak of war meant that Roosevelt had

to seek a third term in 1940, and Byrnes thought so too.

In January 1940, he advised Roosevelt that he would have

to be a candidate for reelection for that reason.

Roosevelt considered the South Carolinian one of the top

choices for the vice-presidential nomination. Nonethe-

less, Byrnes declined all of Roosevelt's intimations about

the second spot on the ticket. He was afraid that his

Southern background and his religious conversion might

adversely affect the campaign, which promised to be tight

anyway. As a member of the platform committee, Byrnes

devised a compromise foreign policy plank acceptable to












both Roosevelt and the noninterventionist Democrats. He

also helped to assuage the hard feelings after Roosevelt

named Wallace as his running mate. The senator actively

campaigned for the president in the fall.

The following January, determined to extend more aid

to the Allies, Roosevelt sent to Congress the "lend-lease"

bill, H. R. 1776. Roosevelt had Byrnes and Carter Glass

appointed to the Senate Foreign Relations Committee in

order to counterbalance the obstreperous nonintervention-

ist minority. In fact, Byrnes played a major role in the

management of the lend-lease bill in the Senate.11

But the president soon lost Byrnes's skills on the

Hill. On June 12, 1941, the Senate unanimously confirmed

the nomination of James Byrnes to the United States

Supreme Court. Roosevelt nominated Byrnes as a reward for

his invaluable service in the Senate. By this time he was

one of the two or three most influential Democrats in the

Senate. He was a master of the art of politics, who com-

bined intelligence and a charming personality with a

penchant for hard work. He was more conservative than

Roosevelt and remained devoted to the South. A white

supremacist, he hoped to keep civil rights issues out of

national politics. In short, he was a consummate politi-

cian and was invaluable to Roosevelt during much of the

New Deal and all of the national defense period.















NOTES TO CHAPTER I


iSamuel Eliot Morison, The Two-Ocean War (Boston,
1963), pp. 56-69.

2James F. Byrnes, Speaking Frankly (New York, 1947),
pp. 12-13.

James F. Byrnes, All In One Lifetime (New York,
1958), pp. 147-48.

4For Byrnes's childhood and career prior to
World War II, see: Winfred B. Moore, Jr., "New South
Statesman: The Political Career of James Francis Byrnes,
1911-1941," (Ph.D. dissertation, Duke University, 1975);
Robert DeVore, "Economic Czar 'Jimmy' Byrnes Is Popular
Administrator," Washington Post, October 11, 1942;
Delbert Clark, "Our No. 1 Stabilizer," New York Times
Magazine, October 18, 1942; Walter Davenport, "The Non-
Bureaucratic Mr. Byrnes," Collier's, January 30, 1943,
pp. 11, 28, 29; Eliot Janeway, "Jimmy Byrnes," Life,
January 4, 1943, pp. 62-64ff.; Joseph Alsop and
Robert Kintner, "Sly and Able," Saturday Evening Post,
July 20, 1940, pp. 18-19ff.; Don R. Elliott,
"James F. Byrnes: The Congressional Period," (M. A. the-
sis, Duke University, 1950); Byrnes, Speaking Frankly;
Byrnes, Lifetime; Raymond Moley, The First New Deal
(New York, 1966), pp. 365-68; George Curry,
James F. Byrnes (New York, 1965), pp. 87-104.

5Alsop and Kintner, "Sly and Able," p. 42.

6Moore, "New South Statesman," pp. 28-37.

7Congressional Record, 66th Cong., 1st sess.,
August 25, 1919, pp. 4304-05.

8Byrnes, Lifetime, p. 97.












NOTES TO CHAPTER I (continued)



9james T. Patterson, Congressional Conservatism and
the New Deal (Lexington, 1967), pp. 136-37.

10Robert Divine, The Illusion of Neutrality (Chicago,
1968), p. 297.

11Warren F. Kimball, The Most Unsordid Act; Lend-
Lease, 1939-1941 (Baltimore, 1969), p. 146.















CHAPTER II
A HAPHAZARD APPROACH TO MOBILIZATION


Before examining Justice Byrnes's activities on be-

half of the president and the subsequent creation of the

Office of Economic Stabilization, it is necessary to

review the mobilization effort. The analysis will demon-

strate the need for a new agency and the limitations

placed on the agency by the existing mobilization struc-

ture. For a representative government, the conversion of

a peacetime economy to total war required profound changes

in the life of the nation. Clashing economic, political,

and social groups demanded recognition when the government

reordered the economic and social affairs of its people.

Roosevelt felt all these conflicting pressures, and more.

The president, notorious for his unorthodox administrative

procedures, utilized various pre-Pearl Harbor mobilization

agencies to propitiate friends and foes to the need for

some regulation of the economy, to establish a modicum of

unifying control over military procurement, and to pre-

serve authority for mobilization in his own hands for

personal and political reasons. In addition to the in-

herent problems of mobilization, Roosevelt had yet to












decide what course America should pursue when the war

erupted in 1939.

In August 1939, Roosevelt established the War

Resources Board (WRB) and named Edward R. Stettinius, Jr.,

of the United States Steel Corporation as chairman.

Stettinius appointed businessmen to the board. With the

advice and guidance of Bernard Baruch, a prominent leader

of the World War I mobilization experience, the board

modified the army's Industrial Mobilization Plan. On

October 12, the WRB submitted to Roosevelt a report

stipulating that the emergency powers of the president

could be administered by either of the following methods:

by a superagency with near total control over the

economy, or by a limited number of agencies, each with a

specific responsibility, that would attempt to coordinate

their activities, with the president settling any dispute.

In November Roosevelt buried the plan and disbanded the

WRB. lie had no intention of turning the mobilization

effort over to any one person; and he did not believe the

economic conditions warranted stringent controls. Fur-

thermore, Roosevelt, wary of criticism of his foreign

policy, did not want to establish any mobilization agency

that the noninterventionists could decry as a step toward

war.












In the spring of 1940, the sitzkrieg abruptly ended

in the unnerving German onslaught on Western Europe.

Almost all Americans, even many of the so-called "isola-

tionists," united in support of the president's expanded

national defense program. And many criticized Roosevelt

for not doing enough to increase American defenses. The

mobilization effort had no centralized control. Finally,

in May Roosevelt moved to alleviate the confusion in the

defense program. He now activated the Office of Emergency

Management (OEM), which had been created by an executive

order in September 1939. The OEM became the parent office

for the next series of defense agencies and served as

Roosevelt's link with these agencies. Next, on May 28,

the president revived the seven-member advisory commission

to the council of national defense, a statutory holdover

from World War I. Each member was responsible for a

specific area of the defense program. The key members

were Willian Knudsen of General Motors responsible for

industrial production, Sidney Hillman of the Amalgamated

Clothing Workers for employment, Stettinius for industrial

materials, and, later, Donald M. Nelson of Sears, Roebuck

for the coordination of defense purchases.

The advisory commission, a faltering step toward more

coordinated control of the economy, suffered from its












ambiguous legal authority and the failure to make one man

responsible for its overall functioning. Nevertheless,

some progress was made. By the end of the year Nelson

and Knudsen, as members of the Priorities Board, were

exerting some control over the order of completion of

defense contracts. To encourage businesses to participate

in the defense program, the advisory commission approved

the five-year amortization plan that was devised by

Leon Henderson and Nelson. The lure of large profits,

Roosevelt hoped, would entice businessmen out of the

prevalent "business-as-usual" mentality. But attributable

to the large pool of unemployed and idle production

facilities, defense production was superimposed on

civilian production until 1942.

The advisory commission did plan the large expansion

of industrial facilities. But Knudsen ignored small

business concerns and was reluctant to compel large manu-

facturing plants to convert to defense production. The

commission failed to coordinate production requirements.

Once safely reelected, Roosevelt replaced the makeshift

commission with the Office of Production Management (OPM)

and, later, the Office of Price Administration and

Civilian Supply (OPACS).2

The OPM, incorporating much of the staff and the

functions of the commission, reflected Roosevelt's












realization of the need for more centralized control of

the economy. He still resisted delegating the responsi-

bility to a single person, appointing Knudsen as Director

General and Hillman as Associate Director General. The

OPM council--Knudsen, Hillman, Secretary of War

Henry Stimson, and Secretary of the Navy Frank Knox--was

designated as the policy-making body. Production and

related problems concerned the OPM which Roosevelt em-

powered to survey, analyze, and summarize military and

other requirements. The OPM had no authority to determine

these requirements or to let contracts. In 1941, its

Production Planning Board did formulate the first overall

statement of defense and foreign aid requirements.

By April 1941, it had become obvious that some con-

trols had to be imposed on civilian prices and civilian

production. The president established the OPACS to con-

trol price levels of civilian goods and to insure equi-

table distribution of these goods. Leon Henderson, the

OPACS administrator, soon realized that civilian produc-

tion siphoned off too large a proportion of the available

raw materials. He advocated reducing the quantity of con-

sumer goods.

The ambiguous division of authority between the OPM

and the OPACS caused needless confusion in the mobiliza-












tion program. Roosevelt and Samuel I. Rosenman, a presi-

dential confidant, decided that one agency should be re-

sponsible for all supply and priority decisions. In late

August the president created the Supply Priorities and

Allocations Board (SPAB) with authority to decide policy

and to coordinate the entire defense program. Able to

issue directives to the OPM and the OPACS, the board had

the following members: Vice-President Henry Wallace,

chairman; Stimson; Knox; Knudsen and Hillman of the OPM;

Leon Henderson of the OPACS; and Donald Nelson, executive

director.

Despite the confusion which resulted from the impre-

cise jurisdiction of its top administrators, the SPAB did

make some contributions to the mobilization effort. The

SPAB, created because of the priorities mess, divided the

available supply of materials among military, foreign

aid, and civilian requirements. This top-level policy

board emphasized the need for total economic mobilization,

began to compile the requirements of the munitions pro-

gram, and studied the shortages of strategic and critical

materials.

After Pearl Harbor drastic changes had to be made in

the mobilization structure. Confusion, divided authority,

and allocation and distribution problems had plagued the













defense program since its inception. Instead of empow-

ering one agency with the requisite authority, Roosevelt,

responding to each new crisis, had constructed a jerry-

built hierarchy of agencies. And the defense effort suf-

fered because of the lack of coordination, centralization,

and planning. Until the middle of July 1941, the military

services had awarded 75 percent of their contracts to only

fifty-six companies. And these companies viewed the con-

tracts as a means to supplement civilian production.

While Knudsen ignored idle small businesses, large corpo-

rations that accepted defense contracts waited for the

government to finance the construction of new facilities.

The civilian agencies had little control over the pro-

curement activities of the military services. The

military retained control over the priorities system that

proved to be unworkable.

As if the confusion and conflicts in the production

program were not enough to force a reorganization of the

administrative structure, Roosevelt, following the Arcadia

conference with Prime Minister Churchill in December 1941

and January 1942, had to raise the production goals sub-

stantially. Discussions with Churchill, British and

American economic advisers, and the military advisers of

both countries about the size of the American production












effort compelled the president to announce huge production

goals in his 1942 state of the union message. On

January 6, he exhorted the American people to produce

60,000 planes, 25,000 tanks, 20,000 antiaircraft guns,

and so on. This stupendous production program would cost

$56 billion. The size of this program staggered the

imagination; before Pearl Harbor the total defense expend-

itures were less than $20 billion.

By now, Justice Byrnes had become the president's

ombudsman. He had already advised Attorney General

Francis Biddle about legislation, government reorganiza-

tion, and executive orders. As early as December 1941,

Chief Justice Harlan Fiske Stone had complained about

Byrnes's handling of executive matters; Stone was con-

cerned about the possible effect of his activities on the
5
work and reputation of the Court. Shortly after the

first of the new year, 1942, Byrnes collaborated with

Harry Hopkins, who was the most intimate adviser to the

president during the war years, and Budget Director

Harold Smith to persuade Roosevelt that it was now time to

revamp the home front command.

During a telephone conversation with Hopkins in early

January 1942, Byrnes voiced deep concern about the confu-

sion in the mobilization effort. At Hopkins's request he












prepared a memorandum in which he argued that the presi-

dent must now delegate to one man the responsibility for

supervising and expediting war production. This, Byrnes

contended, could be done "without burning down the house."

He thought one person, responsible for allocation and

supervision, could allow the military and civilian

agencies to state their own needs and would then have to

intervene only when conflicts arose. And this man must

supervise the procurement agencies to make certain that

production schedules were met. Byrnes commented that the

appointee, who would be in a crucial position, should

already be familiar with the mobilization effort. Hopkins

welcomed these suggestions, promising to discuss the

memorandum with Roosevelt that weekend at Hyde Park.

Monday morning, January 12, 1942, General Edwin "Pa"

Watson, a presidential aide, informed Byrnes that the

president wanted to see him at 11:45 A.M. Byrnes hurried

to the White House and met first with Hopkins. Hopkins

recounted his conversation with the president, telling

Byrnes of Roosevelt's irritability when he, Hopkins, had

broached the subject of a change in the mobilization

structure.

During his conference with the president, the justice

handed him his memorandum and argued that an immediate












change was imperative. When Roosevelt mentioned the

possibility of creating another committee, Byrnes told him

that there had been "too many committees, too much debate,

and too little action." Roosevelt told him that he had

almost come to a decision to make one man responsible for

production and that if he did, he would probably appoint

Donald M. Nelson, executive director of the SPAB. Later

that afternoon Roosevelt read and discussed this memoran-

dum with Harold Smith; both of them agreed with the

justice's arguments.

Roosevelt now definitely decided that some change had

to be made and wanted a statement prepared to announce the

establishment of the War Production Board (WPB) with

Nelson as its chairman., The next morning, January 13,

Byrnes brought to the White House a draft of the announce-

ment. Meeting in Hopkins's bedroom, Byrnes, Smith and

Hopkins made a few minor revisions in the proposed state-

ment, decided that Roosevelt should release it later that

day, and discussed the possibility of having the president

appoint William Knudsen, whom Nelson was supplanting as

production czar, as an army officer in charge of ex-

pediting war orders. After some discussion they concurred

that Nelson would probably be the best choice. Nelson,

they reasoned, understood how procurement functioned, and












his limitations were known, whereas a new man would be an

unknown quantity. As the meeting neared its conclusion,

Prime Minister Winston Churchill, wearing a "siren" suit,

joined the group. Introductions were made, and Byrnes and

Smith retired, allowing Hopkins and Churchill to discuss
6
the international aspects of the war.

Roused to action by his advisers, war conditions,

criticism, and production lags, Roosevelt created the WPB

and appointed Donald Nelson as chairman. He delegated to

the WPB all of his powers over industry, production, raw

materials, priorities, allocations, and rationing. Re-

sponsible for procurement and production, Nelson was given

unprecedented power to supervise procurement and produc-

tion programs, to decide industrial expansion, and to de-

vise contracting and requisitioning plans. Only price
7
control eluded Nelson's grasp.

As with any organization, the effectiveness of the

WPB depended upon how Nelson viewed his position, what

policies, decisions, program determinations he made, and

how forcefully he followed through on his decisions.

Furthermore, regardless of how much authority he had,

Nelson was restricted by the inertia of previously

institutionalized mechanisms operating in the procurement,

production, and manpower sectors of the mobilization pro-

cess.












Much has been written about Nelson and his personal-

ity characteristics. Amiable, gregarious, and kind,

Nelson used his good-naturedness well during the early

stages of mobilization. Then he had lacked the authority;

he relied on persuasion to move industry into the war

production program. As head of the WPB, he had the

authority and the responsibility but failed to move as

resolutely as necessary. Without the requisite force and

drive Nelson let other administrators preempt much of his

authority. Before long Nelson, instead of being the czar

of production, was only one administrator among many

equals.

Nelson's first priority was to end nonessential pro-

duction, but he and the businessmen in the WPB did not

issue orders limiting nonessential production until the

late spring and summer of 1942. Nelson next tried to

reassert control over the allocation of such resources as

copper, aluminum, and steel. Unable to solve this

grievous problem, he recruited Ferdinand Eberstadt, former

New York investment banker and member of the Army and Navy

Munitions Board. Eberstadt devised the Controlled Mate-

rials Plan which required each claimant agency--the armed

services, the Maritime Commission, lend-lease, and the

Office of Civilian Supplies--to submit its needs of each












scarce material. Then the WPB allocated a share of the

materials to each agency which, in turn, distributed these

to their prime contractors. This plan, which became fully

operational in 1943, did not allow Nelson to exert any

real authority over the procurement activities of the army

and the navy. By allowing the army's Services of Supply,

later named the Army Service Forces, to control procure-

ment requirements, Nelson failed to achieve his first

responsibility: he did not adequately coordinate produc-
8
tive resources with the strategic requirements.

While the military retained control over procurement,

Nelson abdicated his authority in other vital areas. He

never did have authority over the OPA. When crises

erupted during 1942, he acquiesced in the creation of

independent czars. In April Roosevelt created the War

Manpower Commission (WMC) and appointed Paul McNutt,

former governor of Indiana, as chairman. Later that year,

after the synthetic rubber program floundered,

William Jeffers, president of the Union Pacific Railroad,

became Rubber Director and was independent of Nelson.

Price control, manpower supervision, and the synthetic

rubber program were crucial elements of the mobilization

effort and should have been in the purview of the WPB. By

1943, it was obvious that Roosevelt still had not found












one man who could supervise and coordinate mobilization in

all its variegated ramifications.

But before the president moved again on the produc-

tion front, he had to resolve the imminent and serious

threat to the war effort: the problem of economic

stabilization. By the spring of 1942, the potential

ruinous threat of inflation forced Roosevelt to confront

the necessity of imposing economic controls on wages,

salaries, consumer prices, and farm commodity prices. The

entry of America into the war had exacerbated inflation.

Prior to December 1941, Roosevelt, not wanting to

antagonize labor and other supporters, displayed only

halfhearted interest in inflation controls. All groups

wanted inflation reined in, but without jeopardizing any

of the short-run benefits inflation provided them. The

major farm organizations opposed farm price controls;

labor resisted wage rate ceilings while profits and prices

increased; and manufacturers wanted to avoid higher taxes.

Roosevelt created by executive order the Office of

Price Administration and Civilian Supply, under

Leon Henderson, on April 11, 1941. Established to control

prices, the OPACS had little real authority to do so and

had to rely upon uneffective "jawboning." This agency

formulated a program which the president submitted to












Congress in July 1941. He asked for legislation to con-

trol prices, rents, and installment credit. The Office of

Price Administration (OPA) came into existence when the

OPM took over its civilian supply function in August 1941.

But the OPA, obviously, did not have the requisite

authority to control inflation. During 1941, the cost-

of-living index advanced at an average rate of 1 percent

per month; wholesale prices had increased by more than

1 percent per month; farm prices by at least 25 percent;
9
and wages, salaries, and income payments by 20 percent.

If the president displayed little disposition to

impose across-the-board controls, neither did Congress.

And because there was no such stabilization, the adminis-

tration had to resort to what Bernard Baruch called
"piecemeal price fixing." The Emergency Price Control

Act, which Roosevelt signed in January 1942, exemplified

this approach. The act gave statutory authority to the

OPA; it authorized the use of subsidies to obtain maximum

production, but not for preventing consumer price in-

creases. The price administrator, Leon Henderson, was

empowered to establish maximum prices, generally at the

level prevailing between October 1 and October 15, 1941.

Congress limited his authority to control farm prices,

stipulating that ceilings could not be placed on agri-












cultural commodities at a level below 110 percent of

parity price or higher depending upon the commodity. In

effect, this act allowed inflation to continue. Parity

price for a commodity was supposed to return to the farmer

an income equivalent to that of farmers for the period

1909 to 1914.10

Soon, the defects in the stabilization program became

evident. Throughout 1942, the administration had to hold

farm prices below the legal levels by selling government-

owned supplies of grains and cotton. Other problems

plagued the administration's efforts. Roosevelt had yet

to find an acceptable solution to wage controls. In

March 1941, attributable to the increasing numbers of

strikes, Roosevelt established the National Defense

Mediation Board (NDMB), a tripartite panel responsible for

keeping labor peace. It was ill-equipped to handle the

complex problems besetting labor: management hostility,

jurisdictional disputes among affiliates of the American

Federation of Labor (AFL) and the Congress of Industrial

Organizations (CIO), and the touchy problem of union

security. No administration labor policy had been arti-

culated; the NDMB vacillated on the issues of the closed

and open shop and of maintenance of membership. By the

time of the attack on Pearl Harbor, the NDMB had col-












lapsed. America's entry into the war moderated for a time

the smoldering hostility between labor and management. In

December Roosevelt extracted a "no-strike, no-lock-out"

pledge from a management-labor conference held in the

White House. The president, on January 12, 1942, estab-

lished the National War Labor Board (WLB), another tri-

partite panel--with representatives of labor, management,

and the public--charged with the authority to settle labor

disputes.11

In March 1942, he formed a committee of his top

economic advisers--Treasury Secretary Morgenthau, Wallace,

Budget Director Smith, Henderson and Marriner Eccles of

the Federal Reserve Board--to explore means to halt the

inflationary spiral. These advisers, except Morgenthau,

advocated a program including a wage freeze, a sales tax,

compulsory lending (a plan to levy heavy income tax On

individuals with a partial refund after the war), and a

lowering of income tax exemptions. The disgruntled

Morgenthau countered with a plan based on the enactment

of the Treasury tax bill (which would obtain more revenue

by ending tax-exempt bonds and the oil-depletion

allowance, and from higher individual and corporate income

tax rates), a lid on prices, and a program of strict

rationing.












Despite the spirited opposition of Smith, Eccles, and

Wallace, the president incorporated the essence of the

Treasury proposal in his address about inflation on

April 27, 1942. Roosevelt's seven-point program for

stabilization included the following recommendations:

increased taxes; establishment of ceilings on prices and

rents; stabilization of wages and farm prices; rationing

of scarce, essential commodities; and encouraged voluntary

savings and payment of debts.12

This message prodded the WLB and OPA into action. In

July the WLB promulgated the "Little Steel" formula to

settle a dispute between the United Steelworkers of the

CIO and the Bethlehem, Republic, Youngstown, and Inland

steel companies. Because the cost of living had climbed

15 percent from January 1 to May 1942, the WLB decided

the steelworkers were entitled to a 15 percent increase in

hourly wage rates, minus the size of any pay increase

granted within that time period. For a time the Little

Steel formula satisfied labor because the WLB had

authority only over disputes that the United States

Conciliation Service did not settle. Without a congres-

sional mandate the WLB imposed only a tenuous ceiling on

wages; one that labor would attack as the corollary in-

flation controls--price ceilings, taxation, and salary
controls-faltered during the summer and fall of 1942.13
controls--faltered during the summer and fall of 1942.












Attempting to implement Roosevelt's mandate for price

stabilization, the OPA, on April 28, 1942, issued the

General Maximum Price Regulation which set ceiling prices

for almost all consumer goods at the level of the highest

prices charged during March 1942. But the "General Max"

did not affect the prices of agricultural goods exempted

by the 110 percent parity restrictions. Furthermore, the

OPA found that it had to increase the ceiling prices of

some goods (such as canned fruits and vegetables) because

certain wholesale prices were then higher than the March

retail prices of the same commodities. In addition to the

confusion resulting from the attempt to impose price

ceilings, the OPA was stumbling through a series of in-

ternal reshufflings in an effort to find a suitable

structure to deal with price controls, rationing, and
14
enforcement of regulations.

These "piecemeal" controls were unable to check the

inflation, as the cost-of-living index steadily rose

during the spring and summer. Congress, interest groups,

and the public railed at the haphazardly administered

ceilings and rationing. They demanded action; Roosevelt

moved hesitantly. He considered creating a single agency

with authority to supervise the battle against inflation.

After discussing stabilization with Henderson, Baruch,













Sidney Hillman, and Wayne Coy of the Budget Bureau,

Roosevelt tentatively concluded to appoint an inflation
A- 15
coordinator.

The rivalries and disputes in which Roosevelt had

reveled during the New Deal years now prevented the

attainment of a consensus on a policy for inflation con-

trol. While the OPA and the WLB battled over the wage

stabilization program, Roosevelt waited for Congress to

act upon his April 27 recommendations. In July he

directed Samuel Rosenman to draft an executive order that

would set policy for wage stabilization and price control,

especially farm prices. David Ginsburg, general counsel

of the OPA, submitted to Rosenman a draft order, embodying

the OPA position; the OPA wanted a new administrative

board to determine wage policy and the authorization for

the use of subsidies to hold down prices.

Roosevelt solicited the advice of Justice Byrnes. On

July 24, he advised the president that the OPA draft was

an acceptable alternative within the limits of existing

law. Byrnes submitted a proposed presidential message to

Congress that could be used to justify the issuance of the

executive order without waiting for a congressional man-

date. But the justice, who was working closely with

Assistant Solicitor General Oscar Cox, cautioned












Roosevelt to avoid trying to set specific, maximum wage

rates in the order. The director of the new agency,

Byrnes urged, should have the responsibility of deter-

mining wage stabilization policy. And he thought the

director should decide policy and should supervise the

administration of this policy by the existing agencies.

That same month Byrnes attended a White House conference

during which some congressional leaders told Roosevelt

that he should establish a comprehensive economic

stabilization program by executive order. They thought

that Congress would require at least three months to pass

the legislation. But Byrnes thought that the president

should still demand such action from Congress.16

The staff of the Budget Bureau objected to the OPA

draft, primarily because Congress had prohibitedthe use

of subsidies as a means to control prices. More meetings

were held by the exasperated Rosenman, who became dis-

gruntled with the divisiveness within the administration.

Rosenman and the staff of the Budget Bureau prepared new

drafts of the order, which they circulated among the

executive departments. They advocated the creation of an

"Economic Stabilization Authority." Its director would

stabilize wages at about the real wage rates of January 1,

1941, and would fix farm price ceilings below the 110 per-












cent of parity price. Furthermore, the "Authority" would

formulate a national stabilization program, including tax
17
policy.

The pervasive sweep of this draft caused problems.

Especially jealous and protective of their prerogatives

were Morgenthau and his staff. After studying a copy of

the proposed order, Treasury officials complained to the

president and Rosenman that their department should be

completely exempt from the purview of the proposed agency.

Others offered revisions as well. Rosenman met with

Attorney General Biddle and others, making final revisions
1 8
in the draft.8

Once the newspapers printed stories intimating the

substance of the plan to create an overall coordinating

agency, Roosevelt had to meet with representatives of

special interest groups, particularly those from labor

and farm organizations. For the most part, these spokes-

men hoped stringent regulations would not be imposed on

their constituents. The president himself vacillated as

to what procedure he would follow. Most of his advisers

urged him to forget about Congress and to issue an execu-

tive order. Others, like Hopkins, Henderson, and Byrnes,

advised him to send an ultimatum to Congress, demanding a

congressional mandate to control farm prices and to












stabilize wage rates and threatening to issue an executive

order if this was not done by a certain date.

For ten days prior to September 7, the date on which

he would deliver his Labor Day address, Roosevelt worked

on various drafts of a speech that would announce the

establishment of a new agency to supervise economic

stabilization. On Thursday night, September 3, 1942, the

president and his retinue departed the White House for

Hyde Park, where he would finish both his message to

Congress and his fireside chat. Meanwhile, Rosenman had

continued to meet with Biddle and other staff members from

the Justice Department and the Budget Bureau. A draft of

an executive order which would have announced the creation

of a powerful new agency to coordinate the anti-inflation

program, accompanied the president to Hyde Park. Many of

Washington officialdom thought that the president would

bypass Congress and would issue an order. But the argu-

ments of Hopkins, Henderson, and Byrnes finally convinced

him that he should again demand congressional action

before he unilaterally imposed restrictions. Their advice

was well-founded. Regulation of wages, salaries, prices,

and rents would touch everyone, and the program would

certainly be difficult enough to administer even with

congressional approbation.












The president's days at Hyde Park were particularly

hectic. As always, the speech-writing process was charac-

terized by frenetic activity: drafts, revisions, and

relays of changes to the secretarial pool. And

Roosevelt, often exasperated by the minutiae, found

delight in teasing the secretaries as to the meaning of

certain typing errors. He, for instance, insisted that

the word he had dictated was "whittling," not "shittling."

On September 7, 1942, he presented his stabilization pro-
19
gram to Congress and the nation.19

The president laid much of the blame for the con-

tinuing inflation on the legislators who were unwilling to

vote for adequate tax and farm price control bills. The

stabilization program, he asserted, had been undermined

by the inflationary cycle: excess purchasing power

chasing a decreasing supply of civilian goods which pushed

prices higher and which, in turn, stimulated demands for

larger wage rates. Calling for sacrifices from all

Americans, he urged the enactment of a balanced program--

wage and salary controls, realistic farm price ceilings,

and adequate taxation--to halt the inflationary spiral.

Roosevelt, declaring that inflation had reached a crucial

stage, warned Congress that if it did not act by

October 1, less than a month's time, he would effect a

program by executive order.20












Unhappy with the tone and the substance of the

message, legislators returned to Washington and started in

motion the legislative machinery. Back at the White

House, Roosevelt met with congressional leaders on several

occasions to discuss the substance of the stabilization

bill. At first, he and his advisers hoped that Congress

would delegate to him all-inclusive authority in the form

of a resolution directing the president to stabilize the

cost of living, notwithstanding the provisions of all

laws. Following a White House conference on September 11,

Senator Alben Barkley told the press that Roosevelt would

not insist upon a blanket delegation of power as long as

he received the requisite authority to effect a stabili-

zation program. That weekend, September 12 and 13,

Barkley determined that the prospects were not good for

the quick passage of a blanket grant of authority. So the

congressional leaders decided to pass a bill that would
21
establish wage and price guidelines.21

Once again the power of the farm bloc had to be

reckoned with; farm spokesmen, who were opposed to any

reduction in the 110 percent of parity price provision,

wanted the calculation of parity price to include the

costs of farm labor. Farmers now had to pay higher wages

because many farm workers had migrated to better paying












jobs in defense industries. War programs necessitated

increased farm production which placed a premium on re-

cruiting and retaining farm workers.

The House members proved receptive to the arguments

of the farm bloc and most national farm organizations.

The Farm Bureau, the National Grange, the National Council

of Farm Cooperatives, and the National Milk Producers

Association all lobbied for a revision in the method of

computation of parity prices to include farm labor costs.

This would have increased the level of farm price ceilings

to 112 percent of parity price. The House included this

provision in the bill that was sent to the Senate; this

version was certainly unacceptable to the president.

Perhaps some members of the House voted for this farm

price provision so that Roosevelt would have to invoke his

war powers to control inflation. This would divest

Congress of all responsibility for the tightening of con-

trols on the economy and individuals. The Senate leader-

ship proved more effective in blunting the power of the

farm bloc. The Senate adopted a compromise provision

directing the president to give adequate weight to in-

creasesin farm labor costs. And the House accepted this
22
compromise. 22

While Congress wrangled over the stabilization bill,

Roosevelt left the capital for a secret nationwide












inspection tour of defense plants. Harry Hopkins, who

directed administration contacts with congressional

leaders, kept him informed as to the progress of the

bill.23 As important as the stabilization bill was, the

president also had to consider the substance of the execu-

tive order which would create the Office of Economic

Stabilization (OES); and he mulled over whom he would name

as director. Roosevelt had mentioned to Morgenthau the

possibility of appointing Justice Byrnes as director,

citing the judicial nature of the duties of the director.

During September Rosenman conferred with agency and de-

partment heads in order to finalize the OES executive

order. Byrnes, seeking relief from the hay fever season,

was vacationing on Sullivan's Island, South Carolina, and
24
had little input in the final revisions of the order.24

Revision of the order continued until the night of

October 2, when Roosevelt signed the stabilization bill.

That night he assembled congressional leaders,

Senators Barkley and Prentiss Brown of Michigan and

Representative John McCormack; Secretary of Commerce

Jesse Jones; Attorney General Biddle; Henderson; Budget

Director Smith; William Davis, chairman of the WLB;

Sam Bledsoe of the Department of Agriculture; Oscar Cox;

Isadore Lubin, special statistical assistant to the presi-












dent; and Herbert Gaston of the Treasury Department.

Later, Rosenman and Hopkins joined the conference. Dis-

cussing the stabilization bill, Roosevelt asked about the

compromise provision on farm labor costs. The consensus

of their advice was that the provision need not materially

increase the ceiling price. Once the discussion was

turned to the OES, Roosevelt stated that the director,
"Mr. X," would determine what the anti-inflation program

would be and how it would be implemented. Roosevelt did

tell Gaston that tax policy would remain the sole preserve

of the Treasury Department. In sum, everyone agreed that

the bill delegated broad powers to the president, but they

were doubtful that it would completely prevent further
25
increases in the cost-of-living index.25 Following the

meeting, Roosevelt signed the Stabilization Act, an

amendment to the Emergency Price Control Act of

January 1942.

This act directed the president to stabilize wages,

prices, and salaries as near as possible at the levels of

September 15, 1942. Ceilings on agricultural commodity

prices could not be set below the higher of two price

levels: parity or the highest prices received by pro-

ducers between January 1, 1942 and September 15, 1942. If

Roosevelt literally followed the provision to weigh labor













costs, then farm price ceilings could possibly be raised

as high as 112 percent of parity price. Furthermore, the

law set as a floor on wages and salaries the highest

levels between January 1, 1942 and September 15, 1942,

below which wages and salaries could not generally be

lowered. This law was a deterrent to inflation but pre-

saged that the fight against inflation had yet to be
26
won.















NOTES TO CHAPTER II


ISee: Eliot Janeway, The Struggle for Survival
(New Haven, 1951); Donald MI.-Nelson, Arsenal For Democracy
(New York, 1946); Bruce Catton, The War Lords of
Washington (New York, 1948); James MacGregor Burns,
Roosevelt: The Soldier of Freedom (New York, 1970);
John Morton Blum, V Was For Victory (New York, 1976);
John Morton Blum, Years of War, Vol. III of From the
Morgenthau Diaries -(Boston, 1967); Bureau of the Budget,
The United States at War (Washington, 1946); Civilian
Production Administration, Industrial Mobilization for
War (Washington, 1947); Richard Polenberg, War and Society
-PMiladelphia, 1972); Donald H. Riddle, The Truman
Committee (New Brunswick, 1964).

2Janeway, Struggle, pp. 163-65; CPA, Industrial
Mobilization for War, pp. 31-32, 55-56.

3Riddle, Truman Committee, pp. 53-70.

4Burns, Roosevelt, pp. 190-93.

5Alpheus Thomas Mason, Harlan Fiske Stone (New York,
1956), p. 707, 713; Henry J. Abraham, Justices and
Presidents (New York, 1974), pp. 214-16; Curry, Byrnes,
pp. 97-98; Cassie Connor to Donald Russell, December 12,
1941, folder 158, James F. Byrnes Papers, Robert Muldrow
Cooper Library, Clemson University, Clemson, South
Carolina; Byrnes, Lifetime, p. 148; Byrnes, Speaking
Frankly, pp. 13-14.

6Byrnes, Lifetime, pp. 149-51; Byrnes, Speaking
Frankly, pp. 15-17; Robert E. Sherwood, Roosevelt and
Hopkins (New York, 1948), pp. 474-77; "Notes by Byrnes,"
January 15, 1942, 1249, Byrnes Papers; JFB[yrnes] to
HLH[opkins], April 1942 [?], "Supreme Court, 38-44,"
PSF 186, Franklin D. Roosevelt Library, Hyde Park,
New York [hereafter cited FDRL], (This is a copy of
Byrnes's January memorandum that has been dated incor-
rectly.); Harold Smith Diary, January 12, 13, 1942,
Harold Smith Papers, FDRL.












NOTES TO CHAPTER II (continued)



7Budget, United States at War, pp. 104-05;
Herman Miles Somers, Presidential Agency; OWMR, The Office
of War Mobilization and Reconversion (Cambridge, 1950),
pp. 22-23; CPA, Industrial Mobilization for War, pp. 207-
30.

8Polenberg, War and Society, Chapter 1; Blum, V Was,
pp. 120-24; Janeway, Struggle, pp. 298-306.

9Budget, United States at War, pp. 56-57, 63, 235-36.

10Ibjid., pp. 237-47.

1Burns, Roosevelt, pp. 116-17, 194-97.

12Blum, Years of War, pp. 37-39; Budget, United States
at War, p. 253.

13Polenberg, War and Society, pp. 25-26; Joel Seidman,
American Labor From Defense to Reconversion (Chicago,
1953), pp. 55-131.

14Budget, United States at War, pp. 254-65.

15FDR to Wayne Coy, Box 2, OF 98, Leon Henderson
Diary, June 5, 1941, "Memos to White House 1939," Box 36,
Leon Henderson Papers, FDRL.

16Oscar Cox to Byrnes, July 23, 1942, "Stabilization
of the National Economy--Executive Order I," Box 66,
Oscar Cox Papers, FDRL; Cox to Byrnes, July 23, 24, 1942,
"(June-Dec. 1942)," OF 98, FDRL; Byrnes to Roosevelt,
July 24, 25, 1942, Memorandum, "Coombs--developments
underlying the stabilization act of Oct. 2, 1942," 1246,
Byrnes to Major Luther K. Brice, August 8, 1942, 109 (4),
Byrnes Papers. While meeting his obligations on the
Court, Byrnes continued to be involved in such problems as













NOTES TO CHAPTER II (continued)



the future scope of the lend-lease program, the creation
of the Office of Alien Property Custodian, the rubber-
gasoline rationing controversy, the inchoate manpower
crisis, and tax policy. Yet, Byrnes became more dis-
satisfied with his Supreme Court duties as the year pro-
gressed. Indeed, he confided to Senator Francis Maloney
of Connecticut that since Pearl Harbor he had not been
"very happy," had become "restless," and dearly missed the
"excitement of Senate life." See: Oscar Cox to Byrnes,
February 9, 1942, 1228, Byrnes to Roosevelt, January 21,
1942, Byrnes to Samuel I. Rosenman, May 28, 1942, with
Byrnes to Roosevelt, January 8, 1942, 1211, Gene Duffield
to James Forrestal, January 21, 1942, "WPB--Rubber,"
Packet 3, Byrnes to Roosevelt, August 27, 1942, 1291,
Byrnes to Francis Maloney, March 20, 1942, 1271, Byrnes to
Frank J. Hogan, February 2, 1942, 1262, Byrnes to
Ernest L. Allen, February 16, 1942, 108 (1), Byrnes
Papers; Harold Smith Diary, January 13, 1942, July 4,
1942, Smith Papers; Henry Morgenthau Diary, June 16, 1942,
Book 514, Henry Morgenthau, Jr. Papers, FDRL; J. A. Hoyt
to Fitz Hugh McMaster, March 17, 1942, 50, Box IV,
J. A. Hoyt Papers, South Caroliniana Library, University
of South Carolina, Columbia, South Carolina; Byrnes,
Lifetime, pp. 151-53.
17
17Budget, United States at War, p. 265; for a copy of
the proposed executive order, see: Henry Morgenthau
Diary, August 12, 1942, Book 558, Morgenthau Papers.

18Q
18"Coombs" Memorandum, 1246, Byrnes Papers; Morgenthau
Diary, August 13, 1942, Book 558, August 14, 1942,
Book 559, Morgenthau Papers.

19William Hassett Diary, August 29, 1942, Septem-
ber 3-7, 1942, William D. Hassett Papers, Manuscript
Division, Library of Congress; Sherwood, Roosevelt and
Hopkins, p. 631; Byrnes, Speaking Frankly, p. 17, Byrnes,
lifetime, p. 154.

20Samuel Rosenman, comp., The Public Papers and
Addresses of Franklin D. Roosevelt, Vol. 1942 (New York,
1950), pp. 356-68 [hereafter cited PPA].













NOTES TO CHAPTER II (continued)



21Oscar Cox Diary, September 8, 9, 10, 1942, Box 145,
Cox Papers; Washington Post, September 9, 12, 13, 14,
1942.

22Roland Young, Congressional Politics in the Second
World War (New York, 1956), pp. 95-99; Washington Post,
September 15, 18, 24, 1942; Budget, United States at War,
pp. 265-71.

23Harry Hopkins to Roosevelt, Telegrams, September 21,
22, 29, 30, 1942, Box 298, Sherwood Collection Group 24,
Harry L. Hopkins Papers, FDRL.

24Henry Morgenthau Presidential Diary, September 4,
1942, Book 5, Morgenthau Papers; Secretary to Byrnes to
Robye Gibson, September 10, 1942, 117, Byrnes Papers.

25Herbert Gaston to Henry Morgenthau, Jr., October 3,
1942, in Morgenthau Presidential Diary, Book 5,
Morgenthau Papers.

26Budget, United States at War, pp. 265-71; Washington
Post, October 1, 2, 1942; New York World-Telegram,
October 1, 1942.















CHAPTER III
THE OFFICE OF ECONOMIC STABILIZATION, TAXATION,
AND SALARY AND WAGE CONTROLS


Saturday morning, October 3, 1942, Roosevelt called

Byrnes to the White House. Byrnes was ushered into the

president's bedroom, where Roosevelt was sitting up in bed

with newspapers and documents scattered about the spread.

The president, as Byrnes has written, asked him to take a

leave of absence from the Court in order to assume the

directorship of the new agency, the Office of Economic

Stabilization (OES). The justice already knew that he was

in line for this position. In addition to the responsi-

bility for devising policy for the battle against infla-

tion, Roosevelt sketched for Byrnes his other duties. The

president would give him authority to settle jurisdic-

tional disputes within the executive branch and to handle

other problems affecting the home front. Furthermore, the

OES would be housed in the White House, symbolic of the

importance that Roosevelt attached to it. Byrnes agreed

to accept the appointment, and immediately resigned from

the Court because he did not believe it would be proper to

take a leave of absence.

Later that day Roosevelt promulgated Executive Order

9250, which created the Office of Economic Stabilization.












All responsibility and authority of the OES was centered

in the director, James F. Byrnes. With the president's

approval the director would formulate and would develop a

national policy to control civilian purchasing power,

prices, rents, wages, salaries, profits, rationing, sub-

sidies, and related matters. The director was charged

with preventing "avoidable increases in the cost of

living" and minimizing unnecessary migration of workers

from one business, industry, or region to another. Byrnes

had authority to issue directives to department and

agency heads in order to enforce his policy decisions.

The administrative duties remained with the various

departments and agencies.

The order provided a new procedure for stabilizing

wages and salaries. All potential wage increases, even

voluntary increases, now had to be submitted to the WLB

for its approval before the increases could be granted.

Roosevelt directed the WLB to hold wage rates at the

levels of September 15, 1942, except for cases of inequi-

ties or substandard wages. If the WLB or the OPA believed

a wage rate increase would result in a subsequent increase

in a price ceiling, the OES director would have final

authority to approve or disapprove the wage increase.

Furthermore, only the director could approve salary












increases in excess of $5,000 per year, unless raises in-

volved a job change. Likewise, in order to equalize all

Americans' contribution to the war effort, he was

authorized to eliminate salaries that exceeded $25,000 per

year.

The executive order directed that in compliance with

the Stabilization Act, farm prices and related commodities

should be stabilized at the levels of September 15, 1942.

The secretary of agriculture and the price administrator

were to set and maintain jointly farm price ceilings, and

the OES director was to resolve any disagreements between

the two. In establishing and adjusting maximum farm

prices, they were allowed to deduct all government benefit

payments from parity prices. In addition to stabilizing

the economy, price ceilings could be used to eliminate

exorbitant profits. The director was authorized to direct

any department or agency to use subsidies to maintain

price ceilings, to prevent price increases, or to increase

production. Finally, the order established an Economic
2
Stabilization Board to advise the director.

When the president described the duties and the re-

sponsibilities of the director, he stated that Byrnes

would be the "Assistant President." Roosevelt exaggerated

only a little. The creation of the OES was indeed a bold












step forward, one step away from the final organizational

structure for the mobilization and supervision of the home

front. America's entry into the war necessitated a more

precise control and direction of the home front.

Roosevelt was unable to devote enough time, energy, and

intellect to every aspect of the war--military, diplo-

matic, and domestic. The confusion, strife, and wasted

efforts had proven that it was not enough to assign

separate agencies to administer production, procurement,

manpower, prices, wages, and other crisis sectors. Total

war required a coordinating agency that would supervise

all aspects of the home front and that would make and

enforce policy. The director of the agency had to be

responsible for the smooth functioning of the home front.

After learning of the Byrnes appointment, Secretary

of Interior Harold Ickes confided to his diary that Byrnes

"is quick-minded and fair," is "one of the smartest men in

Washington," and "knows how to work with people and how to

accommodate clashing interests and opinions." These were

the principal reasons why Roosevelt asked him to leave the

Court. The president knew Byrnes was loyal and intelli-

gent, and he valued the South Carolinian's political

acumen. Above all, Roosevelt had to name a man who could

provide the "political" skill needed to manage the home












front. Nonpoliticians had tried and failed. Donald

Nelson, for instance, had allowed his authority to slip

away. By the fall of 1942, the "Battle of Washington" was

in full fury with rival barons squabbling over policies,

priorities, and jurisdictions. Byrnes had the authority

to compel acceptance of policy decisions in the stabili-

zation program, and Roosevelt had instructed him to settle

disputes outside of the formal jurisdiction of the OES.

The Byrnes appointment surprised most observers, but

it and the creation of the OES were warmly received.

Republicans, like Senators Charles McNary of Oregon and

Arthur Capper of Kansas, and Democrats on the Hill lauded

the choice. Likewise, the press acclaimed the

South Carolinian's character and intelligence, describing

him as a shrewd, judicious realist, an "expert at finding

the common denominator," and a harmonizer. The press

emphasized that he would need the full support of the

president in order to get "tough" with special interest

groups, particularly labor and farm spokesmen.

The OES executive order relieved the press, but the

media reproved Roosevelt for waiting so long to act. And

much of the press counseled its readers that the OES was

not a panacea for the woes of inflation. As pervasive as

its authority was, and Newsweek labeled it America's "most












precedent-shattering economic straitjacket," the economy

still required more regimentation: tighter manpower con-

trols, more severe taxation, compulsory savings, increased

rationing, stringent controls on prices, wages, and rents,

and a national resolve to abide by regimentation. None-

theless, the OES, Raymond Clapper wrote, meant that the

administration had finally decided to end "life as usual"

on the home front. The Stabilization Act of October 2,

Walter Lippmann asserted, exemplified the fundamental

solidarity of the American people. Lippmann further

characterized the OES as the "organ of decision" for the
,4
economy and Byrnes as the "Assistant President."

Monday morning, October S, Byrnes and some members of

his staff toured their new White House offices. Construc-

tion in the east wing was not yet complete; debris still

cluttered the offices; there were no carpets, no furni-

ture, and only stark white walls. These cramped offices

barely accommodated the small staff which he had begun

assembling.

The OES director appointed Benjamin V. Cohen as

general counsel. Cohen had been prominent during the

New Deal years as a presidential adviser and draftsman of

legislation, and comprised half of the hardworking and

maligned tandem of Cohen and Tommy Corcoran. Most












recently, Cohen had gone to London to help expedite the

delivery of lend-lease supplies. Liberals and even

Frank R. Kent, a conservative columnist, hailed the

appointment of this brilliant and principled lawyer.

Byrnes chose Donald Russell, a former law partner from

Spartanburg and currently an employee of the War Depart-

ment, as an aide. He also selected Edward F. Prichard,

Jr., and Samuel Lubell as his two assistants. Prichard

was a prot6g6 of Justice Felix Frankfurter and had served

in the OPM and the WPB. Lubell, a friend of Baruch, had

been in the Office of War Information. Cassandra Connor,

who had worked with him since 1925, remained Byrnes's

private secretary. In addition to this formal staff, he

used people from other agencies, like economist

W. R. Stark of the Federal Reserve System and IsadorLubin,

to provide special services for the OES.

For about the first two weeks of October, Byrnes

spent much of his time establishing the authority of the

OES. He had some time to formulate policy for each

aspect of the stabilization program because Roosevelt, on

October 3, had ordered Price Administrator Henderson to

clamp a sixty-day price ceiling on nearly all previously

exempted farm commodities and to extend rent controls

nationwide. The director also demanded reports from the












appropriate agencies on farm labor, compulsory savings,

rationing, subsidies, and other aspects of stabilization.

During this period he announced the names of the

members of the Economic Stabilization Board: Secretary of

the Treasury Morgenthau; Claude Wickard, the secretary of

agriculture; Secretary of Commerce Jesse Jones; Labor

Secretary Frances Perkins; Harold Smith, the director of

the Budget Bureau; Price Administrator Henderson;

William Davis, chairman of the WLB; Eric A. Johnston,

president of the United States Chambers of Commerce, and

Ralph E. Flanders, president of Jones and Ramson Machine

Company, representing industry; Philip Murray of the CIO

and William Green of the AFL, representing labor; and

Ed O'Neal of the Farm Bureau and James G. Patton of the

Farmers Union. He soon ascertained that the board was too

cumbersome to function effectively, but he did appreciate

the forum that it provided, acquainting representatives

of business, labor, and agriculture with governmental
6
policy. 6

The purely advisory function of the board and the

competence of the OES staff reinforced Byrnes's and

Roosevelt's belief that the OES would not be just another

agency. Byrnes had not resigned from the Supreme Court to

allow his authority and responsibility to be siphoned off,












as was the case with other administrators. At the first

meeting of the board, he declared that he was responsible

for policy decisions and that he would settle any disputes

among the agencies. And he broadly interpreted his juris-

diction; he hoped to initiate a coordinated approach to

wage and price controls, manpower and selective service

policies, and industrial and agricultural production.

In October 1942, Byrnes seized on compulsory savings

as the best means to reduce the inflationary gap, and

he believed such a device would be acceptable to Congress.

In November, at his request, Treasury officials presented

a plan proposing increased taxes in combination with

compulsory savings. Worried by the $40 billion in excess

purchasing power, Morgenthau argued that a drastic in-

crease in taxes would reduce the public debt, lessen the

risk of postwar inflation, and obviate the necessity of

large administrative programs regulating the wartime

economic habits of the people. But the secretary still

favored his program of voluntary bond sales and would only

admit that if compulsory savings had to be initiated, it

should be a progressive savings proposal. Not deterred by

the secretary's lack of enthusiasm, Byrnes raised the

question at a November meeting of the stabilization board.

The board agreed that a unified tax and savings program

had to be implemented.8












Because of the overlapping jurisdictions of both the

Treasury and the OES, it was probably inevitable that

officials of these two agencies would clash over the exact

nature of their responsibilities. The OES order,

Morgenthau's advisers contended, gave Byrnes the authority

to direct the department on the imposition of the $25,000

salary limit, and that was all. Morgenthau, a New York

neighbor of Roosevelt, thought he had a special friendship

with the president: one that surpassed their political

relationship. The secretary was exceedingly protective of

the functions and prerogatives of the Treasury Department,

considered the formulation of revenue proposals his

especial domain, and went to Roosevelt every time he
9
perceived threats to his authority.

In November the director commented publicly about

the desirability of compulsory savings. This enraged

Morgenthau, who thought the director should have cleared

it with him. At a meeting between the two, the secretary

explained how Roosevelt had verbally exempted the Treasury

from the purview of the OES at the October 2 meeting.

Disclaiming any knowledge of this statement, the director

tried to explain why he must have a voice in the formation

of tax policy. And Byrnes queried Morgenthau, "'You don't

claim that you are over me, do you?'" To which Morgenthau












responded, "'No, and you don't claim you are over me?'"

After the director denied having any such notion, they

finally agreed that they would work together "'to lick

inflation.'" Suspicious to the point of paranoia,

Morgenthau was not reassured because Byrnes and Baruch

never had any "use for me." In December, after Roosevelt

told Morgenthau he was still responsible for tax policy,

the secretary confided to his diary that Byrnes was

"groping for power" without the president's approval and

that he "should not be scared by anyone like Byrnes."'10

Besides the tensions between these two, tax policy

was muddled because of disharmony within the administra-

tion and the aversion of Congress to the Treasury program.

The stabilization director retained close contact with

the leaders on the Hill, particularly Senator Walter

George, chairman of the Finance Committee and

Robert Doughton, chairman of the House Ways and Means

Committee. During the winter of 1943, he realized that he

would have to prod the congressional committees if Congress
11
was to pass a revenue bill before the summer.11

Byrnes advocated a comprehensive tax program, one

including a withholding tax, compulsory savings, and

perhaps a sales tax. Such a program would reduce the

national debt and also act as a retardant on the infla-












tionary cycle. Harold Smith of the Budget Bureau

recommended a program similar to Byrnes's: a withholding

tax, compulsory lending, and a sales tax. The Treasury

hoped to secure a program that included a stiff with-

holding tax, more rationing of scarce consumer goods,

increased Social Security taxes, and higher individual and

corporate income tax rates.

At this time, no money was withheld at the source for

the payment of income taxes. In effect, each individual

paid last year's income taxes out of the current year's

income. Beardsley Ruml, treasurer of the R. H. Macy and

Company and chairman of the board of the New York Federal

Reserve Bank, conceived of a plan to aid those individuals

who experienced difficulty in meeting income taxes after

they had entered the military at a substantial pay reduc-

tion. Ruml recommended that the taxpayer start to pay for

the current year's taxes by withholding payment at the

source, and he argued this could be done by forgiving the

previous year's taxes. In this way, the taxpayer would

not have to pay for two years worth of taxes during one

year. Taxes on a pay-as-you-go basis was undeniably

attractive and a sound system, but the Ruml plan would

provide a windfall for the rich.

In early January 1943, the president discussed the

tax section of his budget message with Byrnes,












Harold Smith, and Daniel Bell, undersecretary of the

Treasury. Hesitant about proposing a tax program without

input from congressional leaders, Roosevelt would only

commit himself to the goal of securing an additional

$16 billion in revenue. The pervasive popularity of the

Ruml plan with Congress compelled Morgenthau to reconcile

himself to the idea of forgiving part of the 1942 tax

obligations. During January and much of February, illness

forced him to rely on Randolph Paul to find a plan

acceptable to Roosevelt and congressional leaders. Paul

devised a two-part tax program: a bill to provide for

collection at the source and for forgiveness of 19 percent

of all 1942 tax liabilities; and a bill stipulating $20

billion in additional revenue from new taxes and compul-

sory lending. Marriner Eccles and Byrnes liked this pro-

gram and thought that in return for partial forgiveness,

the administration should be able to extract some type of

compulsory lending from Congress. Congressional leaders

were not as sanguine; Doughton and George seem satisfied

with only the first half of Randolph's program. And

Congress as a whole was even less tractable.

Not until Doughton produced a compromise bill--that

included the collection of taxes at the source beginning

July 1, 1943, and forgave about half of the 1942 taxes--












were the House members able to agree on a revenue bill.

Then on May 14, the Senate passed a different bill which

would forgive all 1942 tax liabilities. Byrnes did not

have much input into the substance of the bill. While the

bill faced an uncertain fate in Congress, various senators

and representatives contacted Byrnes, hoping to learn the

stance of the administration on the roll-call votes. In

middle May, after the Senate had passed its bill,

Speaker Rayburn telephoned Roosevelt, asking him to have

Byrnes intercede on the behalf of the administration in

the House. He did so, and the administration backers held

firm. The bill was sent to the conference committee.

Outraged by this bill giving the rich a large wind-

fall, the president demanded from the conference committee

a bill that required payment of some of the 1942 taxes.

Roosevelt wanted a bill that incorporated the pay-as-you-

go provision and that minimized the amount of forgiveness.

The director huddled with Senator George about what pro-

visions would be acceptable. Furthermore, Byrnes found

that a majority of the House Democratic conferees were

only "lukewarm" in their support of the original House

bill, and he advised Roosevelt that this bill would not be

passed.

Even Doughton--who, Byrnes thought, was too anxious

to compromise--was convinced that they would have to












accept a 75 percent forgiveness provision, or no bill

would be passed. Byrnes adopted various stratagems to

lower the forgiveness bracket to 60 percent, but enough

Democrats voted with the Republicans to send Republican

Senator Arthur Vandenberg's proposal to each house of

Congress. His plan forgave 75 percent of the taxes for

either 1942 or 1943, whichever was less, with total

forgiveness if one year's taxes amounted to $50 or less,

and started collection at the source on July 1, 1943.

Faced with the prospect of this bill or none, Roosevelt

signed the bill. And the director's conferences with

George, Doughton, and others caused Morgenthau to start

fuming again. The director was able to mollify him by

saying that he acted only as a "messenger boy" during

these conferences and that he had not helped to persuade

the president to sign the bill.12 Congress had yet to

approve a tax bill that increased substantially the amount

of revenue the taxpayers would owe the government.

Congress also proved to be reluctant to follow the

policy on salary and wage controls that the administration

sought to execute. In early October Byrnes, at the presi-

dent's insistence, moved to implement the $25,000 limit on

salaries. Assured that he had the legal authority to

limit salaries to $25,000 after taxes and the payment of












fixed obligations, the director requested the assistance

of the Treasury Department in the formulation of regula-

tions to control salaries. Morgenthau offered his

cooperation, and Byrnes had Randolph Paul, general counsel

of the department, supervise this project. On October 27,

the director issued regulations to limit salaries to

$25,000 starting January 1, 1943. He told reporters that

the directive "'comes damn near getting everybody.'" The

OES, in effect, froze all salaries at their present

levels. With the approval of the WLB, individuals could

receive increases if their total salary remained below
13
$5,000 per year.

For the most part, the OES order met with vociferous

and acrimonious opposition from legislators and news-

papers. These critics viewed the restrictions as a

carry-over of New Dealism, an attempt to "level down"

incomes, and an example of "government by directive." The

Wall Street Journal wondered whether Byrnes remembered

that a $25,000 salary limitation had been part of the 1928

Communist party platform. Others saw some merit in the

restrictions. Even though it did not regulate income from

investment and other sources, T. R. B. of the New

Republic, Richard Strout of the Christian Science Monitor,

and the Nation thought it would at least ease some of the












discontent that resulted from the obvious inequalities in

wartime sacrifices. In the spring of 1943, Congress

attached to the debt ceiling bill a rider prohibiting the

$25,000 salary limitation. Roosevelt had to sign the

bill, which ended the last of the attempts to equalize the
14
burden of the war costs.14

In October 1942, the director made the War Labor

Board (WLB) responsible for all raises in salary for

employees earning less than $5,000. Those who earned more

than $5,000 could not be given a raise unless the employee

assumed a more responsible position. Byrnes also had to

rule on any case that deviated from the guidelines. In

December 1943, he was asked to decide whether Chita of

Tarzan movie fame could be granted a salary increase in

spite of the freeze on actors' salaries. Her owners

argued that Chita should not be classified as an actor.

The director refused to rule on this question and referred

it back to the Los Angeles salary stabilization board,

stating that they should be able to determine whether 928

Chita was an actor or not.1

When he first assumed the directorship of the OES,

Byrnes met with the WLB and then announced his intention

to limit wage increases to the provisions of the Little

Steel formula. In addition, the WLB now reviewed all wage












increases, whether voluntary or not. Only the OES could

approve wage hikes that would necessitate higher price

ceilings. In effect, Byrnes sanctioned the existing
16
policy.

During 1943 labor seriously threatened the anti-

inflation program. Most of labor's dissatisfaction

centered on the Little Steel formula. Union officials

contended that the Bureau of Labor Statistics persistently

underestimated the real increases in the cost of living by

failing to make adjustments for regional discrepancies,

for the deterioration in the quality of consumer goods,

and for inequalities of low-paying jobs. The rank and

file of the unions put pressure on their leaders to abro-

gate the "no-strike" pledge and to secure a modification

of the Little Steel formula. For example, in January

1943, miners staged walkouts in some anthracite fields.

Because of the militancy of labor, the news media urged the

administration to be more vigilant in its struggle to halt

inflation. The administration could expect little help

from Congress, where the special interests were well
17
represented. 17

Byrnes, responding to the strident demands of labor

and to the press admonitions, exhorted Prentiss Brown of

the OPA and William Davis, chairman of the WLB, to hold












the line against any further increases in prices and in

wages. The WLB, deluged by requests to raise wages,

queried the director whether it should allow an upward

revision of the Little Steel formula. Time was running

out: the United Mine Workers' (UMW) contract with coal

operators expired on March 31, 1943. John L. Lewis of the

UMW threatened a strike if substantial pay increases were
18Q
not granted to his union members.18

During a nationwide radio address over the Columbia

Broadcasting System on February 9, 1943, the OES director

launched the administration's counterattack by announcing

that all defense workers in critical labor areas would

have to work at least forty-eight hours a week. The im-

pending invasion of Europe, he admonished his listeners,

meant that inflation had to be halted, and he promised to

reject any wage increase above the Little Steel formula

and to hold down food prices. This adherence to Little

Steel meant the vast majority of union members would not

receive any further wage rate increases. The administra-

tion tried to assuage labor by providing the workers, who

were not previously working forty-eight hours, with a

30 percent rise in weekly earnings, eight hours of over-

time at time-and-a-half. He further emphasized the

commitment to wage stabilization by announcing the WLB's












refusal to grant 180,000 meat-packinghouse workers a wage

increase above the formula. And he also instructed the

WLB to limit increases outside of the formula to cases
19
involving gross inequities or substandard wages.

The reaction to this speech varied. Justice Felix

Frankfurter labeled it a "damn good" one, and

Senator Josiah Bailey also praised it. Others were less

sanguine. Arthur Krock, writing in the New York Times,

thought the order exemplified the administration's

attempts to construct a war economy on an inadequate

peacetime foundation. In order to preserve the New Deal

gains, asserted Krock, Byrnes allowed the time-and-a-half

provision to remain in effect, which would only intensify

inflationary pressures. Even though the order would apply

exclusively to certain critical labor areas, the New York

Times labeled it the "most inflationary" step yet taken by
20
the administration.

Support for Little Steel, as epitomized by the

packinghouse decision, antagonized labor and nearly caused

the disintegration of the WLB. George Meany of the AFL

and John Brophy of the CIO, two of the labor members on

the board, charged that William Davis and George W. Taylor

had consulted with Byrnes before voting against the

packinghouse workers. Admitting that they had spoken with












him, these two public members of the labor board denied

that Byrnes had dictated the decision. The labor repre-

sentatives demanded that the WLB decide its cases inde-

pendently of the OES,and labor increased its denunciations

of the "unholy" alliance between Byrnes and the public

members of the WLB. When the WLB voted to grant a wage

increase to Boeing Aircraft workers, Wayne Morse, a public

member, sided with the labor representatives. Because the

president created the WLB as an independent body, the

public members, Morse argued, should not consult with the

stabilization director before deciding a case. Davis

precipitated this latest outburst by reading a letter from

Byrnes in which he sanctioned the wage increase since it

did not exceed the Little Steel formula. The "unholy"

alliance between Byrnes and Davis imperiled the future
21
efficacy of the government's arbitration agency.21

During the spring the stabilization program was under

siege from all sides: the congressional abrogation of the

$25,000 salary limit incensed labor; Roosevelt had to veto

the Bankhead bill which would have meant higher food

prices; labor attacked the WLB and the OES; and

John L. Lewis still flaunted his large wage demands.

Using arguments furnished by the stabilization director,

the president, on April 1, persuaded William Green and












Philip Murray to moderate their campaign for increased

wages. These labor leaders agreed to hold their demands

in abeyance only if the administration made good on its

promise to stabilize the cost of living, particularly food
22
prices. 22

The stage was now set forRoosevelt's next dramatic

move. Since the inception of the OES, the cost-of-living

index had risen 4.3 percent. Byrnes and his staff devised

an executive order that would encompass the entire stabi-

lization program. He persuaded the president to halt all

price and wage rate increases and to authorize the roll-

back of some essential food prices. On April 8, 1943,

Roosevelt issued Executive Order 9328, the "Hold-the-Line"

order. It directed the price administrator and the war

food administrator to put ceiling prices on all commodi-

ties that affected the cost of living. They were to pre-

vent any further price increases and to roll back any

prices considered too high. It also restricted the dis-

cretionary authority of the WLB which could no longer

grant wage rate increases except in cases involving sub-

standard wages or increases within the provisions of the

Little Steel formula. With the approval of the OES, the

WLB could grant merit, reclassification, and incentive

increases. This order also sought to ease the manpower












crisis by authorizing the War Manpower Commission (WMC) to

prohibit any worker shifting to a higher paying job unless

the change benefited the war effort. Finally, the order

authorized the OES director to take all necessary steps to

stabilize the economy, to maintain and increase produc-
2 3
tion, and to aid the prosecution of the war.23

The "Hold-the-Line" order generated much support, as

many viewed it as a bold effort to halt inflation. This

order, Walter Lippmann correctly argued, meant that the

crucial period in war management had been reached. The

prior policy of the administration had been one of "frozen

minds," not frozen prices; the administration policies had

encouraged each special interest to seek to improve its

own interest at the expense of the others. Freezing

prices meant the retention of the status quo, precisely

what was not needed in wartime. Subsidies for various

commodities would allow the administration to stimulate

the production of goods in the desired quantities.24

The day after the announcement of this order, legis-

lators and spokesmen for special interests inundated the

White House staff with requests to see the president.

They all were sent to Byrnes who spent the day listening

to arguments why there should be exemptions to the order.

Senator Charles McNary wanted the new price ceilings on












certain fruits and vegetables postponed until after the

strawberry crop in Oregon had been marketed. Similarly,

Philip Murray pounded the director's desk, registering his

dissatisfaction with the order. At least for the time
25
being, Byrnes refused to make exemptions for any group.

Prior to the issuance of the "Hold-the-Line" order,

the WLB had granted wage rate increases in cases involving

inequalities--workers who had similar job classifications

were allowed pay increases to match the general level of

wages for workers with similar jobs in the same geographic

area. Some top-level presidential advisers, including

Byrnes, believed that the board had endangered the

stabilization program by approving too many increases in

such cases. The order prevented the WLB from allowing

such wage raises, and the board immediately rejected some

10,000 applications to correct inequalities. This meant

about 500,000 workers were denied increases. Labor was

outraged, and workers struck, protesting the inflexibility

of the order.

The order met with opposition from both the labor and

the public members of the WLB because they believed it

stripped them of all their discretionary prerogatives. In

late April the board voted 7 to 4, with the industry

members in the minority, to request the stabilization












director to allow it to devise a method to compensate

workers in inequality cases. 26 On May 5, Byrnes, Davis,

and George Taylor discussed the possibility of reinstating

some of their authority. The next day the director met

with the full board for several hours. The labor mem-

bers--George Meany and Robert J. Watt of the AFL, and

Van Bittner and John Brophy of the CIO--threatened to

resign if no redress was granted. The stabilization

director, the labor members charged, had finally emascu-

lated the board and transformed it into a puppet of the

OES. During the next week more meetings followed.27

Retreating under the onslaught of pressure, Byrnes,

on May 12, 1943, restored some of the former prerogatives

and preserved the judicial character of the WLB. He

apparently agreed to this modification during a conference

with Ben Cohen, George Taylor, and Wayne Morse. The

board could now determine "minimum tested and going rates"

for job classifications by industry and region and to

grant increases to reach the minimum rates for each area

and classification. But he did retain the right to review

all cases that would increase prices or production costs.

Another consideration in this decision was to augment the

public posture of the board in its fight against the
demands of John L. Lewis.28
demands of John L. Lewis.












The new directive did not mollify all critics of the

"Hold-the-Line" order. The executive board of the CIO

wanted a labor board totally independent of the OES, and

they charged that the administration had not fulfilled its

promise to stabilize and roll back prices. Conservative

critics, like columnist Frank R. Kent, asserted that the

Byrnes directive reflected both the failure of the

administration to establish an anti-inflation program and

its willingness to accede to the inflationary demands of
29
organized labor. 29

At least Byrnes was able to check the burgeoning wage

and salary increases. The "Hold-the-Line" order was one

of the most significant moves that the administration made

to halt the inflationary spiral. This order, transcending

the wage sector, also affected foodstuffs and other con-

sumer goods. Without the support of Congress, the OES

had reversed the trend toward full-fledged inflation.

This did not mean that the special interests--notably

labor and farm groups--would accept this freeze without

battling back.















NOTES TO CHAPTER III


IByrnes, Lifetime, pp. 154-56; Byrnes to Roosevelt,
October 3, 1942, Roosevelt to Byrnes, October 3, 1942,
Box 119, OF 41a, FDRL.

2PPA, 1942, pp. 396-404.

3Harold L. Ickes Diary, October 4, 1942, Harold L.
Ickes Papers, Manuscript Division, Library of Congress;
Harry Hopkins to Roosevelt, Telegram, September 29, 1942,
Box 298, Sherwood Collection Group 24, Hopkins Papers.

4Washington Post, October 4, 6, 1942; New York
World-Telegram, October 5, 1942; New York Times, Octo-
ber 4, 5, 1942; Christian Science Monitor, October 5,
1942; Wall Street-Journal, October 6, 1942; Raymond Moley,
"The Ex-Justice And His Job," Wall Street Journal,
October 7, 1942; "Toward Economic Mobilization," Nation,
October 10, 1942, p. 332; I. F. Stone, "Washington
Letter," Nation, October 10, 1942, pp. 338-39; "Trying to
Keep Prices Down," New Republic, October 12, 1942, p. 453;
T. R. B., "Washington Notes," New Republic, October 12,
1942, p. 464; "Volley of Administrative Orders Opens
Battle Against Inflation," Newsweek, October 12, 1942,
pp. 58, 60, 62; "The Congress," Time, October 12, 1942,
p. 18; Frank R. Kent, "The Great Game of Politics," Wall
Street Journal, October 17, 1942; "James Francis Byrnes,
Director of Economic Stabilization," Newsweek, October 12,
1942, p. 58; Mark Sullivan, "To Counter Inflation,"
Washington Post, October 23, 1942; "Washington Trends,"
Newsweek, October 26, 1942, p. 18; Ernest K. Lindley,
"Washington Tides," Newsweek, October 26, 1942, p. 42.

5"Byrnes's Boys," Newsweek, January 4, 1943, p. 33;
I. F. Stone, "The Return of Bernard Baruch," Nation,
October 17, 1942, pp. 366-67; Frank R. Kent, "The Great
Game of Politics," Wall Street Journal, October 13, 1942;
"Men Around Byrnes," Time, October 19, 1942, pp. 17-18;
Byrnes, Lifetime, pp. 161-62.












NOTES TO CHAPTER III (continued)



6New York Times, October 8, 1942; Byrnes, Lifetime,
pp. 165---66; New York World-Telegram, October 17, 1942.

7New York World-Telegram, October 20, 1942; "The
Administration," Time, October 26, 1942, p. 19;
"Washington Trends," Newsweek, November 9, 1942, p. 14;
Washington Post, November 16, 1942.

8Byrnes to Henry Morgenthau, October 9, 1942,
W. R. Stark to Byrnes, November 9, 1942, Box 438, Records
of the Office of War Mobilization and Reconversion,
Record Group 250, National Archives [hereafter cited
RG 250]; Morgenthau to Byrnes, November 10, 1942,
"Savings," Packet 5 Part 2, Byrnes Papers; New York Times,
November 14, 1942.

9Herbert Gaston to Henry Morgenthau, October 3, 1942,
Morgenthau Presidential Diary, Book 5, Morgenthau Diary,
October 3, 5, 1942, Book 575, Morgenthau Papers.

10Morgenthau Diary, November 18, 1942, Book 586,
Morgenthau Presidential Diary, December 3, 1942, Book 5,
Morgenthau Papers; "Washington Trends," Newsweek,
February 1, 1943, p. 14.,

lMorgenthau Presidential Diary, December 21, 1942,
Book 5, Morgenthau Papers; Harold Smith Diary, January 6,
1943, Smith Papers.

12
12Blum, Years of War, pp. 33-64; Christian Science
Monitor, February 17, 1943; "The Shape of Things," Nation,
May 1, 1943, p. 614; Morgenthau Diary, May 17, 1943,
Book 634, May 27, 1943, Book 637, May 28, 1943, Book 638,
Morgenthau Papers; Byrnes to Roosevelt, May 22, 1943,
71 (2), May 24, 26, 1943, 38, Notes "Talk Between JFB and
Congressman Doughton," May 24, 1943, 38, Byrnes Papers;
New York World-Telegram, May 26, 1943; Washington Post,
May 28, 1943.












NOTES TO CHAPTER III (continued)



13Byrnes to Henry Morgenthau, October 6, 1942,
Morgenthau to Byrnes, October 8, 1942, Morgenthau Diary,
Book 577, October 12, 1942, Book 578, October 16, 1942,
Book 590, Morgenthau Papers; New York Times, October 10,
28, 1942; JCR [James C. Rogers] to Byrnes, October 8,
1942, Box 492, RG 250; Washington Post, October 28, 1942;
Press release, November 5, 1942, "Office of Economic
Stabilization Releases," Packet 1, Byrnes Papers.

14Washington Post, November 4, 1942; New York Times,
January 24, 30, 1943; Wall Street Journal, October 29,
November 18, December 2, 1942, January 23, March 16,
1943; Christian Science Monitor, October 28, 1942;
T. R. B., "Washington Notes," New Republic, December 14,
1942, p. 790; "The Shape of Things," Nation, November 7,
1942, p. 462; Polenberg, War and Society, p. 89.

15New York Times, December 7, 10, 1942.

16Byrnes, Lifetime, pp. 163-64; Byrnes to William H.
Davis, October 10, 1942, Davis to Byrnes, October 14,
1942, "Wages & Salaries: File Ref: 23-1-1," Box 462,
RG 250; Byrnes to Davis, October 21, 1942, "James F.
Byrnes," Box 31, Henderson Papers; Milton Derber, "Labor-
Management in World War II," Current History, 48 (June
1965), pp. 340-45; Robert K. Murray, "Government and
Labor During World War II," Current History, 37 (Septem-
ber 1959), pp. 146-52.

17Polenberg, War and Society, pp. 156-61; "The Shape
of Things," Nation, February 13, 1943, p. 219; Alex
[Roosevelt] to Byrnes, January 19, 1943, "Newburg 31,"
Box 15, Map Room, FDRL; "War Thoughts on Labor," New
Republic, January 25, 1943, pp. 103-04; New York World-
Telegram, January 28, 29, 1943.

18Byrnes to William H. Davis, February 3, 1943,
"Loose, Misc.," Packet 4, Byrnes Papers; New York World-
Telegram, February 4, 1943.












NOTES TO CHAPTER III (continued)


19
19New York Times, February 10, 1943.

20Felix Frankfurter to Byrnes, February 10, 1943, 116,
Byrnes Papers; Josiah Bailey to Byrnes, February 10,
1943, "Ex Off: Byrnes," PSF Box 147, FDRL; New York
Times, February 11, 12, 13, 1943.

21New York Times, February 27, March 3, 4, 17, 1943.
See: "Telegrams," Packet 4, Byrnes Papers.

22Byrnes to Roosevelt, March 17, 1943, "Ex Off:
Byrnes," PSF Box 147, Roosevelt to Byrnes, March 26,
1943, "(1943)," OF 98, FDRL; "Support the Labor Board!,"
New Republic, March 29, 1943, pp. 400-01; New York World-
Telegram, April 3, 1943; Walter Lippmann, "Today And
Tomorrow," Washington Post, April 3, 1943.

23Byrnes, Lifetime, pp. 163, 176-77; PPA, 1943,
pp. 151-53.

24Walter Lippmann, "Today And Tomorrow," Washington
Post, May 6, 1943; New York World-Telegram, April 17,
1943.

25Byrnes, Lifetime, pp. 176-78.

26Seidman, American Labor, p. 120; New York World-
Telegram, April 17, 1943; New York Times, April 28, 1943;
Carroll Dougherty and Milton Derber, "Wage Stabilization,"
in Yearbook of American Labor, Vol. I, ed. by
Colston E. Warne (New York, 1945), pp. 162-69.

27New York Times, May 7, 8, 12, 1943; Washington Post,
May 7, 9, 1943.

28Dougherty and Derber, "Wage Stabilization," pp. 162-
69; New York World-Telegram, May 13, 1943; New York Times)
May 13, 1943.





91






NOTES TO CHAPTER III (continued)



29New York Times, May 15, 1943; Frank R. Kent, "The
Great Game of Politics," Wall Street Journal, May 20,
1943.















CHAPTER IV
BYRNES, LABOR DISPUTES, AND MANPOWER POLICY


John L. Lewis of the United Mine Workers (UMW) re-

fused to abide by the stabilization program. The coal

crisis of the war years represented the most concerted

effort by any single union leader to circumvent govern-

mental regulation. Lewis had no sympathy for the wage

controls, refused to recognize the authority of the WLB

to mediate labor disputes, and cavalierly ignored the "no-

strike" pledge.

The bituminous coal miners, Lewis claimed, did not

earn enough to provide even a subsistence living for their

families. Indeed, he would be ashamed to raise a dog on

the meager existence allowed by the Little Steel formula.

Moreover, the prices charged in mine towns further

exacerbated the impact of the stabilization program. The

government guaranteed profits to industry; why should the

miners be deprived wages equaling the cost of living and a

profit. He depicted William Davis as having a "long

knife" which he was ready to plunge into the backs of the

miners, and said that the miners would not get a fair

hearing from the "court packed against labor" by the OPA,,