Prologue

Sunday, March 5, 1933

On this, his first full day in the presidency, Franklin Delano Roosevelt awoke in a creaky narrow bed in the small bedroom of the White House family quarters he had chosen for himself. After his valet, Irvin McDuffie, helped him with the laborious task of putting on his iron leg braces and trousers, McDuffie lifted him into his armless wooden wheelchair for the elevator ride downstairs. The new president's schedule called for him to attend morning services at St. Thomas's Church with his family, host a luncheon for twenty at the White House, and then chair an emergency Cabinet meeting, where he would outline his plans to call Congress into emergency session.

None of the staff or reporters who saw him that Sunday noticed that FDR was anything other than his usual convivial self. He had stayed up past one o'clock the previous night talking with Louis Howe, his longtime chief aide and campaign strategist, while Eleanor and their five children attended the Inaugural Ball without him. The crippled president, now fifty-one years old, hadn't wanted to sit passively while everyone else danced, passive was not his style. Besides, he and Howe had important things to discuss, beginning with how to extricate the United States from its gravest crisis since the Civil War.

The American economic system had gone into a state of shock, its vital organs shutting down as the weekend began. On Friday, the New York Stock Exchange suspended trading indefinitely and the Chicago Board of Trade bolted its doors for the first time since its founding in 1848. The terrifying 'runs' that began the year before on more than five thousand failing banks had stripped rural areas of capital and now threatened to overwhelm American cities. At dawn on Saturday, only a few hours before FDR's swearing in, the governors of New York, Illinois, and Pennsylvania signed orders closing the banks in those states indefinitely, which meant that thirty-four out of forty-eight American states, including the largest ones, now had no economic pulse. Each state's closure had its own financial logic, but collectively they proved merciful. Without them, Saturday morning would have brought even more ruinous bank runs, with legions of depositors descending on their banks in desperation at the very moment the new president took the oath of office.

The outgoing president, Herbert Hoover, was on his way back to California, a study in failure. As late as 1:00 a.m. on Inauguration Day, he was still haggling with FDR on the telephone about the banking crisis. In late morning, they rode in uncomfortable silence to the Capitol. Hoover's brilliant understanding of complex issues had brought him and the country nothing. For more than three years, since the aftermath of the stock market crash, he had been sullen and defensive as disease spread through the American economy.

As frightening as life had become since the Great Depression began, this was the bottom, though no one knew that at the time. The official national unemployment rate stood at 25 percent, but that figure was widely considered to be low. Among non-farm workers, unemployment was more than 37 percent, and in some areas, like Toledo, Ohio, it reached 80 percent. Business investment was down 90 percent from 1929. Per capita real income was lower than three decades earlier, at the turn of the century. If you were unfortunate enough to have put your money in a bank that went bust, you were wiped out. With no idea whether any banks would reopen, millions of people hid their few remaining assets under their mattresses, where no one could steal...