Will there be anything new in the new deal? I feel perfectly sure there will be. Experienced observers invariably judge an incoming executive by his appointments. Thus, four years ago, when Hoover revealed that his Cabinet would contain Mellon, Davis, Hyde, Wilbur, and Mitchell, those of us who knew the ropes in Washington realized immediately that the country was sunk. By the same omen we are led to expect good things of Roosevelt. I have been greatly amused by some of the comment on the new Cabinet. One Wall Street writer hastened to assure his clientele that it was “conservative.” A hostile–and ignorant–commentator declared it to be composed of “yes men.” Some nitwit of a radio announcer found its make-up very “odd”–and that, mind you, after Doak, Hurley, and Adams. The real tip-off on this Cabinet is very simple. It contains, practically in equal parts, two types of people: (a) strong, independent, and aggressive characters; and (b) personal friends of the President. The selection of Homer S. Cummings to fill the important post left vacant by the tragic death of Senator Walsh is Roosevelt’s first major mistake. Only three men measured up to this vacancy. They were Felix Frankfurter, Donald Richberg, and Huston Thompson. The significant fact about the Cabinet as a whole, however, is that the strong, independent personalities are nearly all progressives. To anyone who knows them it is quite obvious that the members of the Cabinet who will exercise a pronounced influence on the policies of the new Administration are Hull, Ickes, Wallace, and Miss Perkins. The others may be expected to follow Roosevelt’s lead. Of course, it would have been a stronger combination if the President had followed his inclination to include Donald Richberg and Phil La Follette; the opportunity to strengthen it still exists if it is true that the Cummings appointment is temporary. In general, however, we have no reason to complain. It is the strongest Cabinet of this generation.
It needs to be, God knows. With banks and business houses popping all over the country, with the disclosure that private credit has fallen under the control of individuals who can only be classified as criminals, with one-third of the nation’s earning power destroyed in a vain attempt to maintain dividends, and with the government’s credit seriously impaired in a stupid and futile effort to support toppling capital structures, we need strong men and radical measures. Recent revelations before the Senate Banking Committee shed a brilliant light on the shenanigan which brought on this mess. We learn, for example, that Charles E. Mitchell, as chairman of the National City Bank and the National City Company, declared himself in for a cut of more than $3,400,000 of the profits over a period of three years, while at the same time he was allowing stockholders (although without their knowledge) to assume $25,000,000 of loans which are now carried on the books at a value of one dollar. To be sure, there was hardly a dry eye in the house when Mr. Mitchell described himself as the greatest loser from the decline of National City stock, although the general grief was partially assuaged when it developed that Mr. Mitchell paid no income tax in 1929, in spite of an income in that year of about $1,150,000. Mr. Mitchell helped himself to this measure of relief by taking a paper loss of $2,800,000 by selling stock, as he originally described it, to “a friend.” Cross-examination elicited two interesting facts: that the “friend” was a member of his family; and that he subsequently bought the stock back. This is the same Mitchell who had the cheek, less than a year ago, to lecture Congress on its delinquencies, and to deliver his opinion on what was wrong with the country. I understand that very strong pressure is being exerted to displace Mr. Pecora as counsel for the Banking Committee in the stock-market investigation. Recalling the comatose condition into which the inquiry had fallen before Pecora revived it, it is difficult to believe that this movement will succeed. If the committee really wants to know the truth, it will keep him. Those who want the investigation stopped contend that “it is upsetting confidence.” However, when a boil is ripe, why not lance it? If there is any comic side to this grim spectacle, let us award the palm to Harold Stuart. After describing the methods adopted by Halsey, Stuart and Company to float Insull stock, Mr. Stuart ventured a recommendation. There should be legislation, he said, to prevent this sort of thing. Mr. Stuart seemed perfectly serious. He did not hear the coarse remark from the press table: “Hold me, boys, I’m about to steal something.”