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Thurman Arnold Goes to Washington: A Look at Antitrust Policy in the Later New Deal

Published online by Cambridge University Press:  11 June 2012

Wilson D. Miscamble
Wilson D. Miscamble
Affiliation:
Analyst, Office of National Assessments, Canberra, Australia
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Abstract

No American presidency in this century has inspired quite so much controversy as the turbulent administration of Franklin D. Roosevelt. Even now, on the one-hundreth anniversary of his birth, and nearly fifty years after the coming of the New Deal, the contentious debates sparked during his four terms as chief executive are no less the subject of argument among historians than they were among the adversaries of the day. One issue in point is the question of antitrust, particularly the principles and practices of Thurman Arnold, who headed the Antitrust Division of the Justice Department during the later stages of the New Deal. While this essay will hardly resolve the contumacious debates over the policies of either Arnold or Roosevelt, Dr. Miscamble nonetheless offers some surprising, but persuasive, evidence about the internal workings of the administration, the antitrust philosophy of Roosevelt, and the remarkable practices of Arnold, the law professor turned antimonopolist.

Type
Research Article
Information
Business History Review , Volume 56 , Issue 1 , Spring 1982 , pp. 1 - 15
Copyright
Copyright © The President and Fellows of Harvard College 1982

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References

1 Arnold, Thurman W., “Roosevelt's Contribution to the American Competitive Ideal,” The Centennial Review IX (1965), 207.Google Scholar

2 “Trustbusting was appropriately having a belated revival,” Tugwell wrote, “but it is hard to believe that it was regarded by Franklin, the experienced statesman and executive, as the principle that ought to dominate future organization.” Tugwell, however, expressed his own uncertainty by continuing,“or perhaps it was so regarded by him. I have to confess that I am unable to say whether it was or not.” Tugwell, Rexford G., The Democratic Roosevelt (Garden City, N.Y., 1957), 563.Google Scholar

3 This study does not aim to examine in any depth Arnold's actual program. This task has been accomplished with some adequacy, although not comprehensively, elsewhere. See Edwards, Corwin, “Thurman Arnold and the Antitrust Laws,” Political Science Quarterly LVIII (September 1943), 338–355CrossRefGoogle Scholar; Gressley, Gene M., “Thurman Arnold, Antitrust, and the New Deal,” Business History Review, 38 (Summer 1964), 214–231CrossRefGoogle Scholar; Arnold, Thurman, Fair Fights and Foul: A Dissenting Lawyer's Life (New York, 1965), 113–118Google Scholar. Arnold's, The Bottlenecks of Business (New York, 1940)Google Scholar also provides relevant detail.

4 Leuchtenburg, William E., Franklin Roosevelt and the New Deal, 1932–1940 (New York, 1963), 148–150.Google Scholar

5 Gerhart, Eugene C., America's Advocate: Robert H. Jackson (Indianapolis, 1958), 88–90.Google Scholar On Roosevelt's involvement (or lack of) in Jackson's efforts, note Jackson's comment in an interview with Gerhart, June 16, 1951, that “the President as a matter of fact never ordered the commencement of any antitrust case. He never ordered the settlement of any case. He never told me what to start and he never told me what to stop.” Ibid, (note 15), 481.

6 On Jackson's legal reverses note Gerhart, America's Advocate, 91–92. (It is important to appreciate that such a capable lawyer as Jackson had difficulties instituting the antitrust laws, for this created the view that the laws were “inadequate,” a view that Arnold would surprisingly expose as false.) For Roosevelt's permission for the study of antitrust legislation, see Roosevelt to Jackson, October 22, 1937, Franklin D. Roosevelt Papers, President's Official File, Franklin D. Roosevelt Library, Hyde Park, New York, Box 277, Folder “Antitrust Laws: August-December, 1937.”

7 Gerhart, America's Advocate, 126, states that “following the President's advice, Jackson continued to attack the evils of monopoly in his speeches during the fall of 1937.”

8 A full account of this debate over economic strategy is provided in Hawley's, Ellis W. brilliant study The New Deal and the Problem of Monopoly: A Study of Economic Ambivalence (Princeton, N.J., 1966), 386–409.Google Scholar Also see Eccles, Marriner S., Beckoning Frontiers: Public and Personal Recollections (New York, 1951), 309–311.Google Scholar Hawley notes and Eccles recalled Hopkins's crucial role in persuading FDR to adopt a spending program.

9 Roosevelt's address to Congress containing “Recommendations to Stimulate Further Recovery,” April 14, 1938, Rosenman, Samuel I., comp. The Public Papers and Addresses of Franklin D. Roosevelt VII, 1938 (New York, 1941), 221–233.Google Scholar

10 Roosevelt's Message to Congress containing “Recommendations to Curb Monopolies and the Concentration of Economic Power,” April 29, 1938, ibid., 305–320.

11 Ibid., 313–315.

12 On the eventual composition of the Temporary National Economic Commission (TNEC), see the congressional debate on the matter: Congressional Record, 75th Congress, 3rd Session, Vol. 83, pp. 8338–8340; 8588–8596; 9336–9341. For a contemporary report on the membership of the TNEC, note “Those Men in that Anti-Trust Quiz,” Business Week, July 2, 1938, 15–17. For Arnold's recollections of the establishment of the TNEC, see the Oral History Interview with Thurman W. Arnold, Butler Library, Columbia University, 1962, transcript, 17–19.

13 On the impact of congressional opinion on FDR, note Frank Freidel's claim that “to a considerable degree he went along with a powerful handful of Progressive Republicans and Western Democrats in die Senate, like William E. Borah of Idaho and Joseph O'Mahoney of Wyoming, in attacking corporate monopoly as the villian,” Freidel, , The New Deal in Historical Perspective, (Washington D.C., 1959), 18.Google Scholar Friedel expanded slightly on this analysis in his textbook America in the Twentieth Century, 3rd ed. (New York, 1970), 348, and portrayed New Dealers as attacking big business “in order to placate their progressive allies” and Roosevelt as demonstrating “his skill in stealing issues.” Freidel overstated the importance of Congressional influence (either director indirect) on Roosevelt's actions, an overstatement that is also found in his point, made in The New Deal in Historical Perspective, 19, that “there are some indications Mahon… that the antimonopoly program that he launched in the Department of Justice through the urbane Thurman Arnold was intended less to bust the trusts than to forestall too drastic legislation in the Congress.”

14 Moley, Raymond, After Seven Years (New York, 1939), 373–375.Google Scholar

15 Gerhart, America's Advocate, 128. (Gerhart's sources are autobiographical notes prepared by Jackson.)

16 Arnold, Fair Fights and Foul, 143.

17 Ibid., 135.

18 Freidel, for one, simply stated that “Roosevelt launched an immediate militant program in 1938 through Thurman Arnold, whom he appointed head of the Anti-Trust Division of the Department of Justice,” Freidel, America in the Twentieth Century, 348.

19 News that the vacant Assistant Attorney General position had been offered to Arnold was released on March 5, the day that Jackson took the oath as Solicitor General. New York Times, March 6, 1938, 1.

20 Arnold, Thurman W., The Folklore of Capitalism (New Haven, 1937), 211–212; 217.Google Scholar

21 Rodell, Fred, “Arnold: Myth and Trust Buster,” The New Republic, June 22, 1938, 177–178.Google Scholar

22 New York Times, March 8, 1938, 2; and March 9, 1938, 5.The hostile reaction of Senator Borah, in particular, to Arnold's appointment brings into question the view that he was selected to lead an antitrust program designed toplacate the progressives and to forestall too drastic legislation in Congress.

23 Editorial, “Antitrust Folklore,” New York Times, March 8, 1938, 18.

24 Corwin Edwards, “Thurman Arnold and the Antitrust Laws,” 338.

25 For FDR's admission on March 8, 1938, that he had not read The Folklore of Capitalism, see Press Conference of Franklin D. Roosevelt, Vol. II, 218–219.

26 On Arnold's supporters, see Alsop, Joseph and Kintner, Robert, “Trustbuster: The Folklore of Thurman Arnold,” Saturday Evening Post, August 12, 1939, 30Google Scholar; and Belair, Felix, “Trusts Foes like Naming of Arnold,” New York Times, March 13, 1938, IV, 6.Google Scholar

27 Arnold, Fair Fights and Foul, 131–135.

28 Arnold, Thurman W., The Symbols of Government (New Haven, 1935).Google Scholar For discussion and evaluation of these books in their own right and in relation to the New Deal, consult Kearney, Edward N., Thurman Arnold, Social Critic: The Satirical Challenge to Orthodoxy (Albuquerque, 1970), 63–87Google Scholar; Hofstadter, Richard, The Age of Reform: From Bryan to FDR (New York, 1955), 317–322Google Scholar; Hartz, Louis, The Liberal Tradition in America: An Interpretation of American Political Thought Since the Revolution (New York, 1955), 269–271.Google Scholar

29 Hofstadter, The Age of Reform, 317; Arnold mentioned that “most New Dealers liked the book,” Fair Fights and Foul, 135.

30 Arnold, Thurman, “A Reply (in Support of the President's Supreme Court Plan),” American Bar Association Journal, 23 (May 1937), 364–368Google Scholar; 393–394. Cassels, Louis in “Arnold, Fortas, Porter and Prosperity,” Harper's Magazine, November 1951, 63Google Scholar, claimed that “Arnold endeared himself to the late President Roosevelt by publishing an article in a prominent law journal defending the ‘court packing’ plan.”

31 Arnold supplied details of this offer and of his difficutltieswith Yale in a letter to his parents. See Thurman Arnold to Mr. And Mrs. C.P. Arnold, September 18, 1937, in Gressley, Gene M., ed., Voltaire and the Cowboy: The Letters of Thurman Arnold (Boulder, 1977), 265.Google Scholar

32 For Arnold's brief recollection of the Committee's Hearings, see Fair Fights and Foul, 136–137. For a contemporary comment on Arnold's seeming transformation at this hearing with respect to antitrust enforcement, note Lerner, Max, “The Shadow World of Thurman Arnold,” Yale Law journal, 47, (March 1938), 701.CrossRefGoogle Scholar

33 Cummings to O'Mahoney, March 8, 1938, Swisher, C.B., ed., Selected Papers of Homer Cummings: Attorney General of the United States, 1933–1938 (New York, 1939), 281.Google Scholar

34 New York Times, March 15, 1938, 12; March 16, 1938, 20.

35 New York Times, March 22, 1938, 3.

36 Gordon Dean, who served in the Justice Department as Assistant to both Attorney-Generals Cummings and Jackson and who worked with Arnold in the Antitrust Division in 1939, recalled Arnold's efforts to ensure Congressional support. See Oral History Interview with Gordon Evans Dean, Butler Library, Columbia University, 1954, transcript, 125–26. Joseph Borkin later told Wallace, Henry A. that “The secret of Arnold's success was the way in which he cultivated newspapermen,” Blum, John Morton, ed., The Price of Vision: The Diary of Henry A. Wallace, 1942–1946 (Boston, 1973), 235.Google Scholar

37 Biddle, Francis, In Brief Authority (Garden City, N.Y., 1962), 272.Google Scholar

38 Arnold, Fair Fights and Foul, 137–140; “Those Men in That Anti-Trust Quiz,” Business Week, July 2, 1938, 15–17.

39 “Arnold's Anti-Trust Strategy,” Business Week, May 28, 1938, 13–14. Business Week also noted ominously that Arnold had “had worthy predecessors who tackled the antitrust job bravely for a year or two and went their way disillusioned.”

40 Arnold, The Bottlenecks of Business, 3–4. (Arnold's emphasis.)

41 Arnold, Thurman, “What Is Monopoly?,” Vital Speeches, Vol. 4 (July 1938), 570.Google Scholar For detail on Arnold's ideas, also note Arnold's report in Annual Report of the Attorney General, 1939 (Washington, D.C., 1939), 44–45; and Fair Fights and Foul, 113; 120; 129.

42 Alsop and Kintner, “Trust Buster — The Folklore of Thurman Arnold,” 7.

43 This list is not exhaustive with regard to the actions that Arnold instituted. It obviously does not include individual eases, such as his celebrated indictment of the American Medical Association in 1938. On Arnold's program, see the studies listed in note 3.

44 On Hutcheson's indictment, note Arnold, Fair Fights and Foul, 116. On Murphy's position regarding this indictment, see Howard, J.Woodford Jr, Mr. Justice Murphy: A Political Biography (Princeton, 1968), 200Google Scholar; and Lunt, Richard D., The High Ministry of Government: The Political Career of Frank Murphy Detroit, 1965), 203.Google Scholar Lunt does not focus on Murphy's reservations but examines the union pressure applied on Murphy to persuade him not to press the indictment. For an example of the dissatisfaction of organized labor with Arnold's antitrust procedures, see the protest from the President of the Teamsters Union, Daniel J. Tobin, to Attorney General Frank Murphy, November 20, 1939, and the attached memorandum from Joseph A. Padway, Counsel of the American Federation of Labor, November 17, 1939, in the Frank Murphy Papers, Michigan Historical Collections, Bentley Historical Library, The University of Michigan, Ann Arbor, Michigan, Box 30. For Gordon Dean's recollection of Arnold's lack of concern at union pressure, note his Oral History Interview, 123–124.

45 Josephson, Matthew, Infidel in the Temple: A Memoir of the Nineteen Thirties (New york, 1966), 445.Google Scholar

46 For Arnold's suggestions conveyed through the President's Secretary, see Arnold to Marvin H.Mclntyre, October 22, 1940 (and attachments), Papers of Thurman W. Arnold, American Heritage Center, The University of Wyoming, Laramie, Wyoming.

47 Blum, ed., The Price of Vision, 235.

48 Arnold to Franklin D. Roosevelt, May 17, 1941, Arnold Papers, University of Wyoming.

49 Arnold, Fair Fights and Foul, 146. Roosevelt occasionally congratulated Arnold on the work of his staff but this related mainly to their work for the monopoly hearings of the TNEC, not to the antitrust campaign. See Memorandum from Roosevelt to Arnold, May 25, 1939, Arnold Papers, University of Wyoming.

50 On Murphy's “public endeavors,” see Howard, Mr. Justice Murphy, 185–198. For Arnold's evaluations of the support given to his antitrust program by the four Attorney Generals under whom he served, see his Oral History Interview, 2627. For an indication of Arnold's appreciation of Murphy's support, see his letter to Frank Murphy, May 25, 1943, Frank Murphy Papers, Box 40. For criticisms of Murphy's handling of the Justice Department, note the Oral History Interview with Gordon Dean, 102–104.

51 For Murphy's statement, see Howard, Mr, Justice Murphy, 199. Arnold familiarized Murphy with the work of the Antitrust Division in a Confidential Memorandum, March 20, 1939. See “A Survey of the Principal Activities of the Antitrust Division” in Frank Murphy Papers, Box 59. Murphy had been advised to consult with Arnold before making his statement on antitrust policy by Benjamin Cohen. See Cohen to Murphy, March 17, 1939, Frank Murphy Papers, Box 25.

52 Dean refers to Jackson's dissatisfaction with both Arnold's style and his legal methods in his Oral History Interview, 134–139.

53 Biddle, In Brief Authority, 272.

54 Arnold to William M. Oman (Office of the Vice-President, Oxford University Press), January 7, 1955, in Kramer, Victor H., comp., Selections from the Letters and Legal Papers of Thurman Arnold (Washington, D.C., 1961), 44.Google Scholar

55 On the political situation post-1938, see Leuchtenburg, Franklin Roosevelt and the New Deal, 272–274. Also note Milton Plesur, “The Republican Congressional Comeback of 1938,” The Review of Politics, 24, (October 1962), 560–562, who argued that the “election of 1938 forced the president to temper his anti-big business program with moderation.”

56 For the activities of the Antitrust Division in wartime, see Biddle's chapter on “Antitrust Enforcement” in In Brief Authority, 270 ff; Josephson, Infidel in the Temple, 507–508; and, particularly in relation to the forays against international cartels, Taylor, Graham D., “The Rise and Fall of Antitrust in Occupied Germany, 1945–1948,” Prologue, 11 (Spring 1979), 27Google Scholar.

57 For complaints of Donald Nelson of the War Production Board and Robert P. Patterson of the War Department that Arnold was interfering in the war effort, see Blum ed., The Price of Vision, 112–113. For Arnold's defense of his Division against the criticism of Donald Nelson, see his letter to Jackson, September 9, 1942, in Gressley, ed., Voltaire and the Cowboy, 330–334. After the war Arnold wrote: “FDR recognizing that he could have only one war at a time, was content to declare a truce on the fight against monopoly. He was to have his foreignwar; monopoly was to give him patriotic support — on its own terms.” Arnold, Thurman, “Must 1929 Repeat Itself?,” Harvard Business Review, 26 (January 1948), 43.Google Scholar

58 On Arnold's appointment, see Biddle, In Brief Authority, 273; and Roosevelt's letter to Arnold, January 8, 1943, in Gressley, ed., Voltaire and the Cowboy, 520–521. Arnold recalled: “I think Roosevelt thought that I was a little too obstreperous in the antitrust division and I was deserving of some reward, and that's what he gave me.” Arnold Oral History Interview, 37.

59 Note that in 1967 Arnold wrote to the historian Otis L. Graham that “Roosevelt's genius consisted in the fact that he had no definite economic program and at the same time had the ability to shift from one position to another.” See the letter of November 20, 1967, in Gressley, ed., Voltaire and the Cowboy, 474–475.

60 Hofstadter, Richard, The American Political Tradition and the Men Who Made It (New York, 1948), 337.Google Scholar