New Deal, or no New Deal? "A New History of the Great Depression"

"The Forgotten Man: A New History of the Great Depression"

by Amity Shlaes

HarperCollins, 433 pp., $26.95

"The Forgotten Man" is a story of America's resistance to the New Deal. The book does not announce itself as bluntly as that; it speaks in moderate tones. Yet it is an account that softly celebrates that aspect of America that resisted the left-flowing tide of the 1930s.

Americans know the 1930s institutions that have survived: federal welfare, bank-deposit insurance and Social Security. This book focuses on other, more radical institutions that died or were tamed, and that belie the claim that Franklin Roosevelt saved American capitalism. In fact, he often attacked it. The view of the author, Amity Shlaes, a former Wall Street Journal editorialist who works at the Council on Foreign Relations, is more nearly the opposite: that our market economy survived because of those who defended it.

There were the Schechter brothers, Jewish immigrants targeted by the Justice Department for violating the New Deal's initial economic-revival law. Under the banner of the Blue Eagle, the law allowed businesses to fix prices and codes of conduct. The idea — which no Democrat or Republican would suggest today — was to revive the economy by not allowing businesses to compete for customers. The Schechters, who were dealers in live fowl, were accused of "chiseling" by allowing customers to choose their own chickens, which was forbidden by the Blue Eagle codes. Their case went all the way to the Supreme Court, which in 1935 extinguished the Blue Eagle.

Another thread in the book is about Andrew Mellon, the rich man who had been Treasury secretary for the Republican presidents of the 1920s and had championed the cutting of the top rate of income tax to 25 percent. The Roosevelt administration, which raised it back to 79 percent, put Mellon on trial for tax evasion. Mellon beat the rap, and in a kind of upper-class dissing, donated his fabulous collection of paintings and sculptures, which became the core of the National Gallery collection, to the federal government.

Then there was Rexford Tugwell, the New Dealer most identified with a planned economy. In some rightist histories, Tugwell is presented as practically a Red, but here he is a somewhat bookish lefty. Tugwell ran the Resettlement Administration, a federal program to move poor farmers onto new land — in one case, to a federally financed collective farm. Shlaes follows Tugwell, who made the cover of Time, from his rise in the early New Deal to the point where FDR let him go.

Another figure is Wendell Willkie, CEO of a power utility with operations in the territory around the New Deal's public-power creation, the Tennessee Valley Authority. Willkie tried to make peace with the TVA, but the New Deal's aim, he came to believe, was to replace private power. Today, private and public power live side by side. In the 1930s, it was war.

Willkie began the decade as a Democrat, but being squeezed by TVA radicalized — or, rather, conservatized — him. In 1939, he registered as a Republican and in 1940 was the party's anti-New Deal nominee for president. Roosevelt won the election, but the resistance against the New Deal had weakened it, and World War II ended it.

Shlaes follows other characters, including a black preacher, a documentary photographer and the man who founded Alcoholics Anonymous. Some of these are too peripheral, and their inclusion chops up the story into too many pieces. That is one weakness of it. The other is what it leaves out, which is much of the background history of the 1930s. This book fills in holes left out by standard histories, but it will be appreciated best by someone already familiar with the 1930s — and, of course, by conservatives.