As the vice president accumulated more authority during 1942 and early 1943, the St. Louis Post-Dispatch reported on “the crumbling empire of Jesse H. Jones.” But Jones was not about to stand down. He held a trump card: as the Wall Street Journal noted, “Jones still must sign the checks.” This he did slowly—so slowly that Wallace and Perkins began to raise concerns about delays in the acquisition of raw materials needed for the war effort. As Wallace was literally traveling to the jungles of Latin America in search of better sources of everything from rubber to quinine, and as Perkins was identifying cheaper and faster methods for processing and distributing supplies, the pair grew increasingly agitated with Jones. In June 1943, they sent a 28-page complaint to the Senate Committee on Appropriations, which detailed “obstructionist tactics … delay of the war effort … hamstringing bureaucracy and backdoor complaining” by Jones. Wallace warned, “We are helpless when Jesse Jones, as our banker, refuses to sign checks in accordance with our directives” and suggested that the bureaucratic barriers the BEW was running up against were “utterly inexcusable in a nation at war.”
“These,” Jones biographer Steven Fenberg observed, “were fighting words.” Jones accused Wallace of “malice, innuendos and half-truths.” At that point Perkins, always a hotter head than Wallace, let rip. He accused Jones of holding up the acquisition of quinine, used to treat malaria, and adopting a “Rip Van Winkle approach to a commodity that means life or death to our soldiers.” The clash became national news. Jones roused his allies on Wall Street and in the war industries and appealed to conservative Republicans and Democrats in Congress, especially fellow Texas Democrats like House Speaker Sam Rayburn and Senate Foreign Relations Committee Chair Tom Connally, to support his efforts to rein in the liberals. Jones found willing allies at the State Department, where there were worries that alliances with “old order” leaders like Winston Churchill were being jeopardized by talk of “labor clauses” and Wallace’s assertion that “the new democracy by definition abhors imperialism.”
As the wrangling between Jones and Wallace grew more intense and more public, the president grew more agitated. Roosevelt did not want the differences of opinion within his White House to go public—especially at a critical point in a war that was far from won. So, on July 15, 1943, he issued Executive Order 9361 abolishing the Board of Economic Warfare and transferring its work to a new Office of Economic Warfare, which would consolidate projects previously overseen by Wallace and Jones under FDR’s “fix-it” man, Leo Crowley.
Crowley would soon be heading a powerful agency dubbed the Foreign Economic Administration. A fiercely anti-Soviet banker aligned with Wall Street, Crowley was seen as much more of a Jones man than a Wallace man. So it was fair to say that the decision went to Jones. Indeed, as journalist I.F. Stone observed, “Behind Jones is the State Department, and behind the State Department are those forces, clerical and capitalist, which have no intention of letting this era become, in Wallace’s phrase, the Century of the Common Man.”
Henry Wallace understood now that he was in a fight not just for his own political future but for that of the Democratic Party and, by extension, for the nation in the postwar era.
Wallace did not fear for his relationship with Roosevelt. Even as the dust from the BEW punch-up was settling, FDR assured his vice president, “It is needless for me to tell you that the incident has not lessened my personal affection for you.” Within days, the two men were consulting on what would today be described as “messaging,” framing out the bold themes that Wallace would take on the road as a roving champion of the administration.
Still, there was no denying that Wallace’s authority had been diminished, and within the upper echelons of the Democratic Party there was now open speculation that he would be bumped from the 1944 ticket. In a July 20, 1943, diary entry, the vice president offered a clear-eyed assessment of his relationship with FDR. He had no doubt that the president was “really fond of me except when stimulated by the palace guard to move in other directions.”
So Wallace chose to go around that palace guard. With FDR’s encouragement, he began speaking out against American fascism. Wallace devoted hours, even days, to constructing speeches and articles on the subject. From the start, he distinguished the fascist threat at home from the threat posed by Hitler and Mussolini. He expected to stir controversy. That was the point. Privately, however, Wallace speculated to Secretary of the Interior Harold Ickes that he and his ideas might be swept aside by a rising tide of “bipartisan American fascism.”
Wallace had already suggested, in a March 8, 1943, address at Ohio Wesleyan University, that “we shall decide sometime in 1943 or 1944 whether to plant the seeds for World War No. 3. That war will be certain if we allow Prussia to rearm either materially or psychologically. That war will be probable in case we double-cross Russia. That war will be probable if we fail to demonstrate that we can furnish full employment after this war comes to an end and Fascist interests, motivated largely by anti-Russian bias, get control of our government.” Though he did not make specific reference to “American fascism” in the speech, Wallace warned, “Those who preach isolationism and hate of other nations are preaching a modified form of Prussian Nazism, and the only outcome of such preaching will be war.”
The Last New Dealer?
By mid-July, Wallace had resolved to get specific. On July 24, 1943, he arrived in Detroit to deliver the speech that would formally introduce the idea of homegrown fascism (as recounted in Chapter 1). He had chosen to come to Detroit, in consultation with union allies and with a text already vetted by Roosevelt, to call out racial hatred and division as a threat to the war effort. Appearing in one of a number of cities that had experienced race riots that summer, Wallace would make the link between racism at home and the hatred preached by Hitler and his followers.
It was here that Wallace inserted the term “American fascism” into the wartime debate. At a press conference shortly after his arrival in Detroit, Wallace said that “certain American fascists claim I’m an idealist.” These homegrown authoritarians disdained him, he asserted, because he threatened their dreams of reclaiming the outsize power and privilege they had enjoyed before the New Deal began to reposition government on the side of the great mass of Americans. “Old-fashioned Americanism is the last refuge of the fascists,” Wallace told the reporters. “But by old-fashioned Americanism they do not mean what is implied by the term, but mean the situation that existed when great corporations rose to power economically and politically. The reason Mr. Roosevelt is so hated by many businessmen is the fact that he stopped making Washington a way-station on the road to Wall Street.”
Roosevelt had said much the same thing in the past, when he closed his campaign for a second term with a rally at Madison Square Garden on October 31, 1936. “We have not come this far without a struggle, and I assure you we cannot go further without a struggle,” FDR said back then.
For twelve years this nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The nation looked to government but the government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that government is best which is most indifferent.
For nearly four years you have had an administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.
We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
They had begun to consider the government of the United States as a mere appendage to their own affairs. We know now that government by organized money
