Freeman

ARTICLE

The Day FEE Was Called Before Congress

FEBRUARY 24, 2011 by DAVID BEITO

In 1950 Leonard E. Read faced one of the most difficult challenges of his life as he prepared to appear before a hostile congressional committee. His friend W. C. Mullendore warned that the committee was out to destroy him: “You should be under no illusion whatever but that the intention is to smear and not look [for] information, enlightenment and the philosophy of freedom. You are going against a bunch of cutthroats who have very vicious motives.”

Read was not the only target of this committee. Even more in the crosshairs was Edward Rumely, who had refused to divulge the names of those who had purchased controversial books he published.

When modern historians, most of whom write from a left-wing perspective, chronicle the “witch hunts” of the 1940s and 1950s, they rarely have in mind the likes of Read and Rumely. Neither fits their formal victim profile. Read, of course, was the founder and president of FEE and the future publisher of The Freeman. Mullendore was his close associate and a trustee of the organization. Rumely was the president of the Committee for Constitutional Government, a group that defended the free market and limited government.

Read and Rumely were not alone. Ever since 1933, many prominent New Deal and later Fair Deal Democrats had relied on the same methods of guilt by association, character smears, and other forms of intimidation to attack conservative and libertarian critics of the growing federal bureaucracy.

Why have most historians ignored these witch hunts? Part of the reason is undeniably the political bias of historians. They tend to be sympathetic to the New Deal and Fair Deal and, in many cases, causes much further to the “left.” This has encouraged a natural human tendency to overlook the dark side of those causes and an unwillingness to sympathize with conservatives and libertarians who may have been their victims. But some of it has to do with the methods used by the New Deal witch hunts, which were often informal and avoided head-on attacks. For example, in New Deal or Raw Deal? Burton Folsom describes how Franklin Roosevelt worked closely with his good friend and Treasury secretary Henry Morgenthau to use the Bureau of Internal Revenue against political opponents. Roosevelt arranged audits against such prominent opponents as the wealthy anti-New Dealer Moses Annenberg, publisher of the Philadelphia Inquirer; former Treasury Secretary Andrew Mellon; and conservative U.S. Rep. Hamilton Fish, who represented Roosevelt’s hometown in New York.

In addition to informal pressure, the New Deal witch hunt also included congressional investigations. The first of these was the Special Committee on Lobbying Investigations (better known as the Black Committee)—named after the committee chairman, Senator Hugo Black of Alabama. Black was a committed New Dealer. From 1933 on he targeted companies and organizations that opposed Roosevelt’s policies. In 1936 he went after the American Liberty League, which united Democrats and Republicans who opposed the New Deal. In this effort Black pioneered the use of the so-called dragnet subpoena. He also teamed with the Federal Communications Commission to require Western Union, a private company, to turn over copies of thousands of telegrams sent by New Deal opponents. At the time the FCC required Western Union to keep a copy of each telegram sent.

The next phase in the New Deal witch hunt began in 1937, when Roosevelt tried to expand the U.S. Supreme Court after it had overturned key New Deal legislation. No one was more important in mobilizing public opposition to the “court-packing scheme” than Edward A. Rumely. Rumely was born in LaPorte, Indiana, in 1888 and became wealthy as a manufacturer of tractors. He got involved in politics as an enthusiastic supporter of Franklin’s distant cousin, Theodore Roosevelt. Rumely depicted himself as a Theodore Roosevelt Progressive for the rest of his life. (Favoring TR and limited government was a curious combination that Rumely and others were able to rationalize somehow.)

In 1915 Rumely purchased the New York Evening Mail with funds borrowed from an American citizen living in Germany. Rumely later claimed he did not know that all such loans had first to be funneled through the German government. Nevertheless, he was convicted under the Trading with the Enemy Act and served time. Although President Calvin Coolidge issued a full pardon, Rumely’s enemies brought the case up repeatedly to discredit him over the next three decades.

During the 1930s he turned against the emerging New Deal, which he feared was undermining individual liberty by centralizing power in Washington. He found common cause with his friends publisher Frank Gannett and conservationist and civil-libertarian Gifford Pinchot. On the same day that Franklin D. Roosevelt announced his court-packing plan in 1937, the trio organized the Committee for Constitutional Government (CCG). Gannett wrote the checks, and Rumely ran day-to-day operations. In fighting the court plan, the CCG led perhaps the first successful offensive against the New Deal and pioneered the use of direct mail.

Despite an overwhelming three-fourths Democratic majority, the Senate rejected the court plan. It was the first major congressional defeat for the Roosevelt administration. Hugo Black, however, received the ultimate reward for his loyalty when Roosevelt nominated him to the Supreme Court the same year. Not even news that Black had once belonged to the Ku Klux Klan deterred Roosevelt from nominating him.

After the court plan lost, New Deal Democrats almost immediately launched a counterattack against the CCG. In 1938 Senator Sherman Minton of Indiana, another ardent New Dealer and Black’s successor as head of the lobbying committee, announced a sweeping congressional investigation targeting forces opposed to “the objectives of the administration.” Minton had actually been Roosevelt’s first choice for the Supreme Court appointment that went to Black, but Minton had turned it down because he preferred to stay in the Senate. At the top of his Senate agenda was the investigation of the CCG. He issued yet another dragnet subpoena, this time for the CCG’s records, and sent his staff down en masse to the CCG’s office, where they began copying files. After watching this go on for several hours, Rumely ordered them out, charging them with an illegal “fishing expedition.”

Minton’s undoing was his proposed bill to ban newspapers from publishing articles known to be false. The public backlash over a perceived threat to free speech led to the collapse of the investigation. Like Black, however, Minton’s loyalty to the New Deal was ultimately rewarded with an appointment to the Supreme Court by his former Senate ally, President Harry S. Truman.

The CCG continued to be a stumbling block for the New Deal and later the Fair Deal. After 1937 the committee distributed over 82 million pieces of literature criticizing such policies as expanded government medical insurance, public housing, and labor legislation. In an article for Collier’s, Interior Secretary Harold Ickes presented the administration’s case against the CCG. He called it a “devilish petard” and said it had been “arousing mob spirit, that miasmic, bloodthirsty degrading emanation out of the dim past.”

The New Deal witch hunt reached its apogee during World War II. Once the United States entered the war, Roosevelt put constant pressure on Attorney General Frances Biddle to crack down on critics of his foreign policy. Most notably he wanted Biddle to prosecute the publisher of the Chicago Tribune, Robert McCormick, a powerful critic of the New Deal and entry into the war, for sedition. To his credit, however, Biddle resisted this pressure. Finally, though, he began to relent by, for example, ordering wiretaps on key administration critics such as Joseph Patterson, publisher of the New York Daily News. In addition, the postmaster general barred dozens of anti-administration periodicals from the mails. Finally, and much more quietly, Roosevelt ordered Treasury Secretary Morgenthau to launch a new round of tax audits on such prewar noninterventionists as Rep. Fish.

In 1944 a U.S. House committee chaired by Clinton Anderson of New Mexico launched a second major lobbying investigation. Many New Dealers, notably Wright Patman, were upset about the CCG’s campaign for a constitutional amendment to limit taxes to 25 percent of income. Patman characterized the CCG as the “most sordid and most sinister lobby ever organized.” He charged that it represented the “Quisling reserves” of Hitler because it was trying to “sap the power and strength of this government at its tenderest spot, its purse strings, in time of war.”

Like Minton, Anderson subpoenaed the names of the CCG’s contributors. After Rumely refused to comply, the Committee cited him for contempt. A court acquitted him in 1945, finding that the subpoena was improper because the CCG was not a political organization. The most important result of this event was the Lobbying Act of 1946, which required lobbies (broadly defined) to disclose the names of all contributors of $500 or more. Although the CCG decided to register under protest, it found an inventive way around the reporting requirement, or so it thought. Instead of accepting cash contributions over $490, it took them in the form of book orders.

After Truman’s 1948 upset victory, Fair Deal Democrats promised again to scrutinize lobbies such as the CCG. The New Republic declared triumphantly that the “New Deal is again empowered to carry forward the promise of American life” and that it was high time to investigate “the great lobbies and the millions they have spent . . . to defeat social legislation.” The AFL and CIO agreed on this goal, as did two of the best-read columnists in the United States: Drew Pearson and Walter Winchell.

One of the early targets was FEE, which Pearson condemned on the grounds that it was “flooding the country with propaganda aimed at undermining the Marshall Plan, rent control, aid to education, and Social Security.”

After a failed effort to set up a Senate-House joint committee, the House assigned the investigation to a committee led by Rep. Frank Buchanan of Pennsylvania. Buchanan was not only a stalwart Fair Dealer but had his own axe to grind because the CCG had successfully fought expanded public housing, a goal he had championed. He defined lobbying in the broadest possible terms to include groups that had an indirect influence on the formation of public opinion. The committee sent out a probing questionnaire to 166 businesses and organizations, most of them opponents of the Fair Deal. The Buchanan committee ignored lobbying by government agencies, but perhaps for the sake of balance a questionnaire also went to the Civil Rights Congress, an organization with close ties to the Communist Party.

When Buchanan’s staffers, armed with a dragnet subpoena, arrived in force at FEE’s headquarters in early 1949, Read reluctantly cooperated. It became readily apparent to him, however, that the investigators were leaving no stone unturned in the hope of finding something—anything—to discredit the organization. It was also clear that the committee had formed a working alliance with key New Deal interest groups and journalists. Almost immediately after the committee rummaged through FEE’s offices, someone leaked the information to Drew Pearson. Pearson’s column publicized the best-known names on FEE’s “secret” contributor list and quoted liberally from internal correspondence. Mullendore expressed his outrage about the leak in a letter to Buchanan: “Those who seek to extend the power of government try to close the mouths of citizens who dare to oppose them. . . . Your inquisitorial and extremely burdensome demand for information which you have no moral right to demand is a most alarming example of the use of this means of intimidation.”

For its part, the CCG ramped up its anti-Fair Deal efforts by promoting purchases of John T. Flynn’s book The Road Ahead. Flynn warned that pro-New Deal pressure groups were pushing the United States, like Britain, into socialism. Harper & Brothers sold the book for $2.50, but the CCG cut the price to a dollar, thus encouraging bulk purchases. From 1949 to 1950 the CCG distributed an amazing ten million copies.

Despite Mullendore’s warnings, Read agreed to testify before the committee. Ever the optimist, he used that venue to educate the members, and he had some success. He found a sympathetic audience among the leading Republican members, and even Carl Albert, a member of the majority, admitted Read was “far more effective than the average buttonhole artist, so-called, around the capital.”

While most of Read’s testimony explained FEE’s mission to inform and educate Americans about free markets, he also challenged the legitimacy of the committee’s investigation. To Read, under the committee’s all-inclusive definition, lobbying “becomes synonymous with communication of thought—all thought. The Bible communicates ideas that may affect legislation. . . . The list is endless.”

Rumely agreed to answer all the Buchanan committee’s questions except the one asking the names of those who had purchased The Road Ahead. Pointing to the First Amendment, he asserted that the committee had “no power to go into a newspaper publisher and say, ‘Give me your subscription list.’ And you have no power to come to us.” If the House wanted to cite him for “contempt and bring me to trial,” it would “get an education on the Bill of Rights.”

By this point the press had turned against the Buchanan committee and its methods. Editor and Publisher found it guilty of “an invasion of the guaranteed right of the American people to own, hire or use a printing press without interference.” Similarly, the Cleveland Plain Dealer called the investigation “Fair Deal Intimidation.” Even Buchanan’s hometown paper, the Pittsburgh Post-Gazette, condemned the probe. Frank Chodorov, a leading libertarian and future editor of The Freeman, asked during the period: “Why did the Committee want these names? Simply to discourage support of the anti-collectivist organizations by harassment and intimidation. . . . Buchananism, then, is a step in the direction of thought control.”

The Buchanan committee presented three separate contempt resolutions for a House floor vote in August 1950. Each had the support of most Democrats. The first and most-publicized centered on Rumely. The second resolution focused on Joseph Kamp, head of a much smaller group, the Constitutional Education League. Unlike Rumely, Kamp had stated he was willing to cooperate but was unsure exactly what the Buchanan committee wanted from him. The last of the contempt resolutions dealt with William Patterson, head of the Civil Rights Congress. Like Rumely, he had refused to reveal the names of contributors.

In the floor debate Rep. John W. McCormick, the Democratic majority leader, went to bat for the committee. In language as extreme as just about any smear uttered by Sen. Joseph McCarthy, he condemned Rumely as “a spy in World War I, and a man who is nothing but a Fascist, who is an opponent of American institutions and American Government.” Virtually all those opposed to the resolution were conservatives, with the notable exception of Rep. Vito Marcantonio. As the lone American-Labor Party member in the House, he was easily the most left-wing person in Congress. Marcantonio portrayed himself as an absolutist champion of free speech even for a “fascist” like Rumely. If Rumely’s conservative defenders truly valued free speech, he challenged, they would also vote against the contempt resolution for Patterson. Despite his claims, Marcantonio’s record on free speech was at best mixed. During World War II, for example, he had urged tough action against critics of the war.

The final vote on the Rumely resolution was close but went against him. Nearly all Republicans, joined by Marcantonio and 42 Democrats, almost all from the South, opposed it.

The Patterson contempt resolution also passed but by a much more lopsided majority. Although the debate took place at the height of the McCarthy era, Republicans cast virtually all their 109 votes against it. By contrast, those southern Democrats who had opposed the Rumely resolution were not about to vote against the Patterson resolution even though the charges were essentially the same. For the southerners, race and anticommunism apparently trumped all other considerations.

In April 1951 a federal judge gave Rumely a six-month suspended sentence for contempt and a $1,000 fine, saying he would have sent him to jail save for his advanced age. Rumely’s old nemesis, Walter Winchell, exulted that he “got real satisfaction out of the conviction last week of Edw. A. Rumely. . . [a] convicted pro-German agent.” Few newspapers or columnists agreed with Winchell. Even The New Republic and Drew Pearson, who had egged on Buchanan at the beginning, steered clear of the controversy.

 

The Last Laugh

It was Rumely who had the last laugh, however, when in 1953 the Supreme Court overturned his conviction 7-0. Two justices recused themselves because of possible conflicts of interest. In a separate opinion the Court’s most “liberal” members, William O. Douglas and Hugo Black, endorsed Rumely’s free speech and privacy rights in no uncertain terms. When it turned to the Buchanan committee’s demands it declared: “If the present inquiry were sanctioned a publisher would be compelled to register as a lobbyist with the federal government, would be subjected to harassing inquiries. A requirement that a publisher disclose the identity of those who buy his books, pamphlets or papers is indeed the beginning of surveillance of the press.”

By this time some prominent New Dealers were losing their appetite for investigative crusades against the conservatives and libertarians. For one thing, they were too busy beating back McCarthyism. By championing Rumely’s free speech, they could better fend off charges of hypocrisy. Even before the House cited Rumely for contempt, for example, the pro-New Deal columnist Marquis Childs pointed to him as an example of how the First Amendment protected “rightists” just as much as communists. In addition, lawyers for two victims of McCarthyism, Owen Lattimore and Corliss Lamont, cited the Supreme Court ruling in defense of their clients. Rumely had become a case study in the need to protect free speech. It was quite a turnabout for a man whom the left only a few years earlier had roundly condemned as a fascist, a federal convict, and a German spy.

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March 2011

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