called two budgets" led to bankruptcy, since continued deficit spending would force the government to borrow repeatedly as long as its credit remained-hence the accounting system fooled "no one except the borrower." Douglas summarized by stating the issue starkly. The choice was either to implement a "communistic" social order with government enterprise replacing private enterprise, or to maintain the American credit through economies "so that private enterprise may proceed to perform the function of employment." 17

On these issues the basic attitudes of Roosevelt and Douglas remained unchanged after their conferences on December 29-30, 1933. Douglas urged him to discontinue the RFC. This Roosevelt rejected, saying "there was a conspiracy on the part of a great many banks to destroy his recovery program through a refusal to make loans, that he was certain there was such a conspiracy"-but he admitted having no evidence of it. On December 30 Douglas urged that he endorse private enterprise in the budget message. To this Roosevelt replied that he "would not commit himself to the proposition that the Government, even as a general principle, as an employer, cannot replace business." But Douglas made at least one impression. Several days later the president confidentially showed the Douglas manifesto to Ickes, wondering aloud "whether the man writing such a memorandum wasn't trying to make a written record." Such Douglas memorandums evidently were beginning to strain their personal relations, a fact which interfered with their policy relationship.18

17 Douglas to J. S. Douglas, Dec. 22, 1933, Douglas Papers. What Douglas feared did happen, following passage of the Gold Reserve Act of Jan. 30, 1934. See Public Papers, 3:67-76; memorandum from Douglas to FDR, Dec. 28, 1933, President's Secretary's File, Box 97, FDRL. While FDR did not make any notations on this memorandum, he considered it important enough to have it filed with PSF rather than OF materials. See Ickes, Diary, 1:134.

18 Douglas personal memorandum, Dec. 29, 1933,

Following these budget disagreements (at least once the "argument was quite bitter and the President irritated," Douglas recorded), Roosevelt continued to deemphasize economy in government during 1934. Instead, his budget message informed Congress that he would soon request an additional appropriation for fiscal 1935 not to exceed $2 billion. In his only major economy move of the year, on March 27, 1934, he vetoed the Independent Offices Appropriations bill. This would have further damaged the Economy Act, particularly by restoring veterans' reductions. But Douglas, who drafted the veto, was again disappointed. He believed the message lacked a "ring of conviction," and that Roosevelt was "somewhat indifferent" about the outcome. He would have supplied more factual information, written a ringing veto, and advised the president to stand firm. Instead, the veto was promptly overridden. Also, Roosevelt's request for Securities Exchange legislation (enacted in June 1934) distressed the budget director. He believed that it meant, like RFC credit and the Securities Act of 1933, further government interference with the machinery and the confidence necessary for private investment. "Both bills were drafted," he wrote confidentially, "by a group who want a collective system."

"19

Finally, in June 1934, amidst accelerated demands for further public works and other emergency expenditures, the president requested a drought relief bill authorizing a $525 million appropriation. These events

Douglas to J. S. Douglas, Jan. 6, 1934, Douglas Papers; Ickes, Diary, 1: 134, 173-174.

19 Douglas personal memorandum, Dec. 29, 1933, Douglas Papers; Public Papers, 3:20, 173-181; memorandum from Douglas to FDR, Jan. 11, 1934, OF 79, FDRL; FDR to Douglas and Frank T. Hines, [Feb. 26, 1934], ibid.; Douglas telegram to FDR, Mar. 27, 1934, ibid.; Douglas to J. S. Douglas, Mar. 28, Apr. 5, 1934, Douglas Papers; memorandum from Douglas to FDR, Apr. 13, 1934, OF 79, FDRL; Douglas to J. S. Douglas, Apr. 5, 1934; Douglas personal memorandum, Feb. 1, Douglas to J. S. Douglas, Mar. 9, 1934, Douglas Papers.

again caused Douglas to consider resignation. He calculated that funds already available for relief from unobligated appropriations exceeded $2.4 billion. So he advised Roosevelt that there was "no justification whatsoever" for new millions. After conferring on June 7, Douglas could only conclude that Roosevelt wanted the $525 million for an "additional amount," rather than transferring it from existing RFC obligations of $1.7 billion.20 For Douglas, then, the issue was at last clearly drawn: The president no longer intended to honor his past commitments for orderly fiscal policies.

By mid-1934 the budget director's usefulness inside the administration was all but ended. He complained privately that he had tried unsuccessfully four times between June 12 and 28 to get an appointment with the president. Now all of their business. had to be conducted in writing. His fiscal views evidently disturbed Roosevelt, who feared that funds for relief and public works would be inadequate, based on the director's estimates. But Roosevelt was also personally disturbed. On June 30 he told Ickes and Franklin, Jr.: “After I fired Dean Acheson as Under Secretary of the Treasury, Lew Douglas set out to make a written record. If things go wrong he wants to be in a position so that he can show on such and such a date he advised the President not to do thus and so. Of course he makes a very good watchdog for the Treasury but I don't like it." Although Douglas's exit from the inner circle of advisers only came with the spending conflict in June, informed observers placed his departure

20 Public Papers, 3:293-294; and for Douglas's opposition, see White House memorandum to McIntyre, May 9, FDR memorandum to Treasury Secretary Henry Morgenthau, June 8, Attorney General Homer Cummings to FDR, June 20, 1934, OF 119, FDRL; for his earlier views on resignation, see Douglas to J. S. Douglas, Apr. 23, Douglas personal memorandum, Oct. 21, 1933, Douglas to J. S. Douglas, Mar. 2, 1934, Douglas Papers; memorandum from Douglas to FDR, June 6, 1934, OF 79, FDRL; Douglas personal memorandum, June 7, 1934, Douglas Papers.

earlier. After his resignation, Newsweek reported that "for months the former Arizona Congressman has been unable to see eye-to-eye with Mr. Roosevelt on money matters.' But if the resignation scene at Hyde Park on August 30, 1934, was accurately recorded by Douglas, the two men parted under "most cordial" circumstances.21 On that occasion Roosevelt tried every means to dissuade Douglas, including personal pleading and wavering on his own fiscal views. Asked why he resigned, Douglas stated his beliefs about the necessity for "two anchors to a currency," meaning a gold standard and a balanced budget-a conviction not shared by his chief. Also, he termed the New Deal on the whole "destructive." Roosevelt asserted that he shared the budget "conviction with you and as intensely as you," but to balance immediately would mean starvation and misery. After discussing their differences over New Deal programs and taxation, Roosevelt repeatedly appealed for Douglas to change his mind. Finally, he revealed his true concern: "This means the loss of the Congressional election." But Douglas was pleasantly adamant. He did not believe he could honestly serve longer, whether for personal, political, or policy reasons.22

So Roosevelt and Douglas temporarily terminated their relationship in the second

21 Douglas, personal memorandum, June 28, Douglas to J. S. Douglas, June 30, 1934, Douglas Papers; Ickes, Diary, 1:173-174; White House memorandum [June 28, 1934], memorandum from Douglas to FDR, June 29, FDR to Morgenthau, June 29, memorandum from McIntyre to Douglas, July 19, 1934, OF 79, FDRL; Newsweek, Sept. 8, 1934, p. 11; New Republic, Sept. 19, 1934, p. 157; Douglas, copy of longhand notes on visit with the president, Aug. 30, 1934, Douglas Papers.

22 Douglas, longhand notes, Aug. 30, 1934, Douglas Papers. Douglas's successor for four years, treasury civil servant Daniel Bell, who was recommended to FDR by Morgenthau, implemented the fiscal views of FDR and Morgenthau. This meant that both kept aiming for a balanced budget, but that expenditures for public works and relief were seen as necessary, if undesirable. See John M. Blum, From the Morgenthau Diaries (Boston, 1959-67), 1:230-233.

year of the New Deal under circumstances trying to both. Yet they retained sufficient respect for each other that the president asked Douglas to rejoin the government in 1942 with the War Shipping Administration. Politically, Douglas sympathized with few New Deal relief and recovery programs. While he considered agencies like CCC "desirable," he could never overcome his basic conviction that excessive deficit spending and continuous unbalanced budgets inevitably meant "paper inflation," which conjured up specters of Germany during 1922-23. Furthermore, starting with the dual budget, he gradually came to believe that Roosevelt lacked the will to honor public commitments. That is, Douglas proved as blunt and forthright politically as Roosevelt proved indirect and ambiguous.23

In terms of their policy relationship, Douglas believed that the government must consistently adhere to orderly spending and economizing on the grounds that maintaining United States credit superseded and buttressed the entire recovery program. Thus, for example, he advised Roosevelt in April 1934 that spending $63 million. (Roosevelt estimated $10 million) on the Fort Peck Dam in Missouri might employ and make self-sufficient 25,000 families. But, "by continued spending on the whole front you will bring misery to 120 million people. Surely you would not destroy 120 million. for the 25,000 who in time will be destroyed by the process of relieving them?" To such arguments the president could only reply, "Lew, you are obsessed on this subject." Douglas would agree, saying, "but at least it is a conviction and a deep one that we cannot spend ourselves into prosperity." When Douglas would remind him that additional spending would make it impossible

23 Douglas interview, Feb. 1970. On Douglas politically, see Rexford G. Tugwell, The Democratic Roosevelt: A Biography of Franklin D. Roosevelt (Garden City, N. Y., 1957), pp. 265, 274, 319; Ernest K. Lindley, The Roosevelt Revolution: First Phase (New York, 1933), pp. 286-287; Carter, New Dealers, pp. 124-128.

to balance the budget for 1936, Roosevelt would reply: "That is too far in the future. Why worry about the future?” 24

In fact both Roosevelt and Douglas shared the prevalent orthodoxy about the value of an annually balanced budget, an article of moral faith in government and financial circles since 1789. But the president was far more flexible politically than his budget director. Still, neither grasped the basic principle of compensatory spending that leading economists had stated since the early 1930s: that all expenditures for goods and services became somebody else's income. So federal spending was expansionary, not deflationary, as was Roosevelt's economy in government program. Curiously enough, Douglas, the independent thinker, came to more rigid conclusions than Roosevelt, who was hardly an intellectual and who depended partly on his intuition and partly on his political sensitivity to human suffering. Regardless, the federal credit proved stronger than Douglas would have believed or Roosevelt would have worried about. The president, then, was halfway right, but for the wrong reasons. But his halfway commitments prevented him from determining whether he or Douglas was right about the federal government's capacity to spend America into prosperity during peacetime. So as late as 1937, three years after his "Minister of Deflation" resigned, Roosevelt cut back on Works Progress Administration (WPA) and other spending with an eye toward a balanced budget. In so doing he helped precipitate the "Roosevelt Recession." 25

The significance of the dual budget to Roosevelt was that it allowed him to ra

24 Douglas personal memorandum, Apr. 23, 1934, Douglas Papers.

25 Kimmel, Federal Budget, esp. pp. 151-153, 161. On FDR as a casual, even a disorderly, thinker, see Kenneth S. Davis, FDR: The Beckoning of Destiny (New York, 1972), esp. pp. 138-140, 339-341, 783-785, which describes FDR as having a "collector's mind"; Louis B. Wehle, Hidden Threads of History: Wilson Through Roosevelt (New York, 1953), pp. 115-117; Margaret L. Coit, Mr. Baruch (Boston, 1957),

tionalize mentally and publicly that his administration was consistently, if only ultimately, committed to an annually balanced budget. Thus, during the summer of 1936 speechwriter Samuel I. Rosenman remembered the president saying: “I'm going to make the first major campaign speech in Pittsburgh at the ballpark in exactly the same spot I made that 1932 Pittsburgh speech; and in that speech I want to explain my 1932 statement. See whether you can prepare a draft giving a good and convincing explanation of it." Rosenman could not, and he so advised Roosevelt. The speech finally delivered by Roosevelt justified deficit spending on the basis of human needs and human misery. Tugwell later explained Roosevelt's mental contradiction over economy in government and expansionary spending: "Franklin professed right along to believe that his economy measures served a good purpose, even after his understanding of the 'compensatory budget' had obviously advanced in subsequent years and relieved him of the guilt he felt all during his first term over the budgetary deficit." 26 The Roosevelt-Douglas relationship illustrates several key points about the early New Deal. First, Roosevelt was quite sincere about his objectives of orderly fiscal policies and an annually balanced budget.

p. 423; Tugwell diary, Jan. 21, May 6, 1933, FDRL; Warburg Memoir, pp. 1193-1195; and B. B. Berle and T. B. Jacobs, eds., Navigating the Rapids, 19181971: From the Papers of Adolf A. Berle (New York, 1973), p. 72. Burns, Lion and the Fox, esp. pp. 472477; Blum, Morgenthau Diaries, 1:380-451.

26 Samuel I. Rosenman, Working With Roosevelt (New York, 1952), pp. 86-87; Public Papers, 5:401408; Tugwell, Democratic Roosevelt, pp. 274-275.

There is no evidence that he either appointed or later supported Douglas as budget director for any disingenuous political reasons. Nevertheless, Roosevelt's thinking about and making of fiscal policyand probably other domestic policies as well-was ambivalent at best, disorderly at worst. That is an internal reason why the New Deal explored what some historians have characterized as one sector of a "vast middle ground." Finally, in recent years it has been argued "that F.D.R. frequently acted as a restraining force on his own government, and that bolder reforms were often thwarted by him and his associates." 27 But in the case of fiscal policy, it was the other way around. Roosevelt would not bow to pressures from advisers on his political right, even to the extent of initiating the dual budget and later accepting the resignation of a once influential policy adviser who occupied the position Roosevelt had labeled "a key to everything else."

Years later, reflecting upon his New Deal service, Douglas could smile and say that he had no doubt of his principles, but that his judgment about timing had been "quite wrong." Later, from the perspective of not going far enough on fiscal policy, Roosevelt probably could have said the same.28

27 Howard Zinn, ed., New Deal Thought (Indianapolis, 1966), pp. xv-xxxvi, esp. p. xxviii; Barton J. Bernstein, "The New Deal: The Conservative Achievements of Liberal Reform," in Barton J. Bernstein, ed., Towards A New Past: Dissenting Essays in American History (New York, 1969), esp. pp. 267, 281-282, 284.

28 Douglas interview, Feb. 1970; Bernard Asbell, The F.D.R. Memoirs (Garden City, N. Y., 1973), P. 394.

The war had penetrated Tarzan's peaceful kingdom. Agents of Nazi Germany had parachuted into the jungle and occupied a fortress, hoping to exploit African oil and tin. But Tarzan rallied his jungle forces against the Axis. "Kill Nadzies!" Tarzan commanded the natives, all of whom were white. They nodded enthusiastically. The Germans were so despicable even the animals turned against them. Tarzan himself chased the head of the Nazi column deep into the jungle, and, just as the fear-crazed German officer frantically signaled Berlin on his shortwave radio, Tarzan killed him with his knife. In Berlin the radio operator recognized the distress signal and rushed out to summon the general in charge of the African operation. While Tarzan, Boy, and Jungle Priestess laughingly looked on, Cheetah the chimp chattered into the transmitter. Ignorant of the fatal struggle in the jungle depths, the general heard the chimp on the radio, jumped to his feet, saluted, and yelled to his subordinates that they were listening not to Africa but to Der Fuehrer.

1974 by Gregory D. Black and Clayton R. Koppes

These dramatic scenes are taken from a 1942 motion picture appropriately titled Tarzan Triumphs in which Johnny Weissmuller, a slightly flabby but still impressive noble savage, made the jungle safe for the Allies. To the Bureau of Intelligence (BOI) of the Office of War Information (OWI), however, Tarzan's triumph was a source of great concern. Despite the innocent absurdity of the plot and the triumphant denouement in a familiar movie serial, the bureau feared the film would harm the United States war effort. These government analysts decided Tarzan Triumphs did not take the war seriously.1

The intelligence bureau's criticism of the Tarzan saga was part of a series of analyses of the contributions of Hollywood movies to the United States propaganda effort in World War II. From October 1942 through

1 Office of War Information, Bureau of Intelligence, Media Division, "Weekly Summary and Analysis of Feature Motion Pictures," no. 11, Feb. 26, 1943, pp. 19-20, Box 1945, Records of the Bureau of Intelligence, Records of the Office of Government Reports, Record Group 44, Washington National Records Center, Suitland, Md. (hereafter cited as RG____, WNRC). Despite the title, the summaries were issued irregularly, usually every two weeks.