Brain Storm

Some administrations take office dreaming mainly of dividing the spoils, others dreaming mainly of doing great deeds. But there comes a time in every administration when dreamers fall out. Last week that time came to the Roosevelt Administration. The fact that it was caused largely by conflicting zeal among the President's followers did not dampen the rancor it produced.

Slap in Face. One afternoon a roomful of newshawks faced Secretary of Agriculture Wallace in his office with Agricultural Adjustment Administrator George Peek stony-faced at his elbow. The Secretary explained that: 1) the production of corn and hogs must be cut because the export of pork had fallen off; 2) the packers would be handed a code which provided the Government access to their books, power to control their margin of profit; 3) the AAA's milk marketing agreements were unsatisfactory and would have to be revised to control dairy production.

Mr. Peek said nothing. An oldtime Equalization Fee advocate, he had persistently argued that the solution of the farm problem lay not in a vicious thwarting of Nature but in increasing markets, in plugging world markets. He had opposed unduly rigid restrictions on packers and their profits. He had put through the "unsatisfactory" milk marketing agreements. To Mr. Peek the Secretary's remarks were a slap in the face, and though Mr. Wallace delivered the slap, the author of the slap was Braintruster Rexford G. Tugwell.

Mr. Peek, like NRA's General Johnson with whom he was once a partner in the Moline Plow Co., is rated a "Baruch man." Ever since President Roosevelt gave him the AAA he has been fighting clear of the Braintrusters who stood close to Mr. Wallace in the Department of Agriculture--Assistant Secretary Tugwell, Columbia professor, and AAA Counsel Jerome Frank, disciple of Felix Frankfurter. They favored restricting production, holding down the profits of processors and distributors. Their aim was not just recovery for the farmers but a radical step: permanent "socialization" of the processing and distributing business. When they could not get their way with Mr. Peek, Mr. Tugwell and allies set about maneuvering him out of his job.

So little use had Mr. Peek for their ideas that he had practically picked a separate AAA staff to avoid having to deal with the Braintrusters. Unable on his part to oust Mr. Frank, one of his most outright opponents, he had retained at his own expense Frederic Lee as his personal counsel. First result of the two factions working at cross purposes was virtual sabotage of the AAA program. The Braintrusters held up codes for packers and food distributors because they wanted stiff provisions to socialize those industries. Mr. Peek held back on crop restriction plans because he wanted more efforts made to export surpluses.

Rumpus. The night of Mr. Wallace's remarks to the Press the excited theorists carried their quarrel to the White House. The President tried compromise. He got Mr. Wallace, Mr. Peek, General Johnson together, decreed that all codes being negotiated by AAA should be transferred to NRA, except those for the first processors of agricultural products and for handlers thereof before the first processing. The codes thus transferred were put beyond the reach of the radical Braintrust group, but regarding the codes left behind, the Braintrusters had the victory.

This settled the result but not the quarrel. Next morning Messrs. Wallace and Tugwell rushed to the White House for a conference. When they left Mr. Peek arrived for lunch and a two-hour talk. Later Mr. Peek conferred with Mr. Wallace. Finally he rushed back to see the President.

Meanwhile Mr. Wallace, with Mr. Tugwell standing at his elbow, told the Press that the objectives of the AAA were "a better balanced income in order to give the farmers a fair share without doing injustice to the consumer. I think George and Rex see absolutely eye to eye on these objectives." Meanwhile, also, Braintrusters were intimating to the Press "off the record" that Mr. Peek had messed up the AAA. Mr. Peek was reported to have told friends that: 1) either he or Mr. Frank would have to go; 2) he would be ready to appear at any time Congress wanted to investigate the AAA, the last a threat which in view of his outspoken nature no one in the Administration relished.

Pacification. The President, always calmly cheerful when confronted with such dissensions, found much difficulty in pacifying his followers. Since he was determined to back Mr. Wallace and Mr. Wallace was determined to back Messrs. Tugwell and Frank, the problem was to find a consolation prize for Mr. Peek. First suggestion was that he move over to a subordinate job in NRA. Then Mr. Tugwell suggested that he be made Minister to Czechoslovakia with a roving assignment as salesman for U. S. farm products in Europe. Both of these propositions Mr. Peek rejected. Then the President suggested he head a new committee to negotiate for greater export privileges for U. S. products. Mr. Peek considered, then accepted. The quarrel had pursued the normal course of quarrels between government cliques: from bitterness to outburst to balm for damaged feelings. As additional balm, Mr. Peek had the satisfaction of seeing three codes (retail food, wholesale food, food manufacturers) that had been transferred from AAA to NRA approved within 48 hr. and sent to the President without the stringent Tugwell amendments: 1) for government control, 2) for complete and honest food labeling and advertising.

Significance. There is friction in every administration. But friction in the Roosevelt Administration is apt to be peculiarly significant because most of it comes from basic differences between those who are quite definitely not Socialists and those who, for most practical purposes, are. The near-Socialists are led by handsome Rex Tugwell who wants honest labeling written into the food codes and has for the same purpose drafted a food & drugs bill which last week was misbranded in Congressional hearings as the "Copeland Bill." Their strategy is to get as much done as possible under the guise of "Liberalism," to avoid the honest label of socialism. They want to avoid making trouble for the President, to avoid noise at their work, for the presumption remains that the U. S. electorate will not knowingly stand for Socialism.

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