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Leon H. Keyserling Oral History Interview, May 3, 1971

Oral History Interview with
Leon H. Keyserling

Member of legal staff, Agricultural Adjustment Admin., 1933. Secretary and legislative assistant to Sen. Robert F. Wagner (New York), 1933-37. Gen. counsel, U.S. Housing Authority, 1937-38; deputy administrator and gen. counsel, 1938-42; acting administrator, 1941-42. Acting commissioner, Federal Public Housing Authority, 1942. Gen. counsel, National Housing Agency, 1942-46. Vice chairman President's Council of Economic Advisers, 1946-50; chairman, 1950-53.

Washington, D. C.
May 3, 1971
by Jerry N. Hess

[Notices and Restrictions | Interview Transcript | Additional Keyserling Oral History Transcripts]


Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened January, 1975
Harry S. Truman Library
Independence, Missouri

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Oral History Interview with
Leon H. Keyserling

Washington, D. C.
May 3, 1971
by Jerry N. Hess

[1]

HESS: To begin this morning, Mr. Keyserling, will you give me a little of your personal background? Where were you born, where were you educated? Tell me a little about yourself?

KEYSERLING: I was born in Charleston, South Carolina, in January of 1908, but I never lived there, and I was just in the hospital there. The first eight years of my life were spent on St. Helena Island, which is a sea island off the coast of South Carolina, the southern part. There were ten thousand Negroes living on the island at the time and five or six white families.

After spending my first eight years there during which I hardly went to school as there were none, but was educated at home, we moved over to the metropolis of Beaufort across the river, which had two thousand people, about half whites and half Negroes. I went from the

[2]

fourth grade through high school there, graduating in 1924.

My father was very active in a wide variety of enterprises. In the 1890s he had helped to reintroduce sea island cotton in South Carolina, which had been grown there before the War Between the States but had been abandoned. He was very active in that; he was very active in truck farming, growing thousands of acres. He was president of the South Carolina Produce Association, which were the largest shippers of vegetables in the Carolinas, and he also was the head of a company that ran a chain of general merchandise stores and a wholesale business on the various islands, and he was the head of an ice manufacturing company.

Beginning in 1920 with the great decline in commodity prices, especially first cotton, the farm depression really set in there around 1922, and continued without abatement until after, or the beginning of World War II. So he, like most of the other people there, were practically completely liquidated, but then had started over again and had made a fair comeback. He was very interested in public affairs. He served as a member of the city government; he served during his last years as chairman of the Beaufort County Welfare Board; and after he was

[3]

seventy he retired from business and gave most of his time until his death at the age of eighty-four to public causes in the United States, especially in his part of the country; but also following the advent of Mr. Hitler to the problem of Jewish refugees and all of the causes that related to the establishment of Israel. Actually, he died instantaneously at the age of eighty-four while making the third of three speeches in New York City on behalf of the United Jewish Appeal, at which time I got a wonderful letter from President Truman.

The only reason I mention this is that I got a very early introduction into public service and the public interest, and I always said that I learned more from my father than from anybody else about what I call social responsibility. And the man I learned most from about courage in public office was Senator Robert F. Wagner; and the man I got the most from on the score of intellectual integrity was Professor Rexford G. Tugwell, and I'll come back to him in other connections because he was so active in the New Deal.

My mother was also very active. She was vice president of the South Carolina Parent-Teacher's Association, very active in all types of civic affairs.

[4]

In 1924 I came north and entered Columbia University, where I majored in economics, graduating in 1928. It was there I first got to know Professor Rex Tugwell. From 1928 to 1931 I went to the Harvard Law School, graduating in 1931. I then had an offer for a job in a leading New York law firm, Chadbourne, Stanchfield, and Levy, which was one of the outstanding firms in New York at the time, but for some reason decided instead to go back to Columbia and study economics, particularly because I had the opportunity to do some work for Professor Tugwell, who was then beginning to make his contacts and do work for somebody who at that time was Governor Franklin D. Roosevelt. So from 1931 to early 1933 I was at Columbia doing graduate work in economics. I completed my requirements for the doctorate, but got so busy from 1933 forward that I never wrote my thesis, never regret that I didn't.

I held three jobs there at the time. One was as an assistant or instructor in economics; one was doing studies for the general education board of the Rockefeller Foundation; and one was writing some books with Tugwell and others, which were published although my name did not get on them. One was a study of American economic life and the means of its improvement, [American Economic Life and the Means of its Improvement] which was

[5]

published after I came to Washington, and which I did really most of the work on, because Tugwell was so busy with Governor Roosevelt. This was an effort to readjust economic teaching to the realities of economic life and still represents my idea of how economics should be taught on the college and university level.

Parenthetically, I think that the way economics actually is taught at the college and university level is atrocious and explains a great deal of the alienation of the young people from the kind of education they are getting, because it is so remote from life, and as I shall point out later, this also has an impact upon the recruitment, the fruits of the recruitment of membership on the Council of Economic Advisers, and the Council of Economic Advisers' staff, which unfortunately is becoming increasing an inbred process, where the recruitment is almost entirely from one narrow school of professional economists who really make the choices, although the President does nominally. Truman didn't do it that way, and I'll come back to that.

In early 1933, I came down to Washington with Professor Tugwell at the very beginning of the New Deal, and for a very short period of time, in fact, only about two weeks, I was employed as an attorney in the Agricultural

[6]

Adjustment Administration. The reason for that was that although Tugwell wanted me to work with him, he thought that I could get better compensation if I was set up in the legal department, but I never actually received any salary because I left the job before the Agricultural Adjustment Administration was finally approved.

There was one interesting comment on my interview with Jerome Frank, who had been picked to be general counsel of the triple A. I came in to interview him and we had never met before arid I sat down and he said, "What do you know?"

I said, "I know 'Cotton Ed' [Ellison D.] Smith." Cotton Ed Smith was chairman of the Senate Committee on Agriculture and was violently opposed to the New Deal and all its works even at that early date, but had been, as was James F. Byrnes, a lifelong friend of my father's.

Jerome said, "You know Cotton Ed Smith. Let's go."

We jumped into a cab and we went up to see Cotton Ed Smith and naturally he gave me a very cordial reception.

We got back in the cab and on the way back Frank said to me, "How would $4,000 a year be as a starter?"

Well, this was all the money in the world at that time. I looked out over the Washington Monument and I said, "I think that will be all right."

[7]

But as I say, I never got any of it.

During those first two weeks I became very much involved in the drafting of the National Industrial Recovery Act, and was part of a group including Jerome Frank, Harold G. Moulton, the president of the Brookings Institution, John Dickinson, the Assistant Secretary of Commerce, and Simon H. Rifkind, who had been for six years up to that time, legislative assistant to Senator Wagner. And I had a good deal to do with the drafting of the act. I also met with a number of trade association lawyers who were interested in the act at that time.

HESS: How is an act like that drawn up?

KEYSERLING: Well, this act started as a trade association act. The original draft of the act grew out of the so-called Gerard Swope plan for Recovery. It was really a draft at that time because it hadn't been introduced as a bill, to suspend the anti-trust laws and to enable cooperation among trade associations to stabilize prices and wages and to increase employment. This original idea, which had come from the Swope plan had probably been formulated into language by two leading trade association lawyers. One was Gilbert H. Montague, who happened to be also the attorney for the Rockefellers; and the other

[8]

one was a prominent New York lawyer by the name of David Podell.

Well, anyhow, we got started working, and we met over in the Brookings Institution office, and we worked on it for several weeks. Then we had a meeting in Senator Wagner's office at which I was present, along with Jerome Frank; Henry Wallace, the Secretary of Agriculture; Professor Tugwell; Winfield Riefler, who at that time was head of the Central Statistical Board and later became prominent as an economist, and a few others. We discussed this for an hour or two and then Senator Wagner was sort of tired and he said, "Well, I guess that's all we can do today."

And I said, "Well, I don't want to leave here with the thought that we are all in agreement. I don't think this is the main approach at all. I think the act has got to do something about improving wages, about improving labor conditions, about protecting collective bargaining so that it will be in better balance, and so we will have a stimulation of consumer interest and consumer buying, or otherwise we're not going to get recovery."

The Senator was very much interested in that and a week later I got a call from Si Rifkind, who as I say, had been the Senator's legislative assistant for six years.

[9]

He was going back to New York to work exclusively in the Senator's law firm, and that's how I went over to work with Senator Wagner as his legislative assistant, where I stayed for four years, technically, although I did an immense amount of later work with him through 1946.

It was in his office and under his direction that we rounded out the drafting of the National Industrial Recovery Act, because with rare exceptions, he insisted that the drafting of bills that he introduced be done in his own office.

We rounded out the provisions of that act in about the form that it finally passed. Then we added another title, which dealt with public works, and which was the foundation of the original Public Works Program under Harold Ickes, the so-called 3.3 billion dollar Public Works Program, which later branched out into civil works and Federal Emergency Relief Administration and so forth, especially because Senator Wagner for a number of previous years from the beginning of the depression had been introducing bills on emergency relief and on public works. It was in his office that I drafted the actual provisions of the public works section with some help. The way we arrived at the three billion, three hundred million dollar figure was that this was the total of the public works

[10]

projects in his files, which had been collected over the years in connection with the introduction of public works legislation.

Then the bill went to hearings before the Senate Finance Committee and then it went out on the floor. Senator Wagner was the sole Senate sponsor of the act. It was very vigorously debated. He made a very long opening talk on it which I prepared, because I was then working for him, which covered about equally the economics of the whole situation and an argument in favor of the constitutionality of the act. I mention this because all the way through from 1933 until today, my economic training and my legal training have sort of interpenetrated on public problems that involved both in varying degrees.

Now, after the National Industrial Recovery Act was passed in the summer of 1933, it was found almost impossible to enforce the collective bargaining provisions under Section 7a of that act. Industry was opposed to them; Hugh Johnson, who was the Administrator of the NRA, was opposed to them; Donald Richberg, who was Hugh Johnson's counsel, was opposed to them; President Roosevelt didn't understand them and set up a large number of special boards, an automobile board and a steel board and

[11]

all kinds of boards, to try to vindicate by so-called mediation a statutory right, which you can never do.

So, in the fall of 1933, I was walking along the street with some friends. I remember it. It was a snowy day, and I got the idea that perhaps Section 7a ought to be translated into a permanent statute. Senator Wagner was very enthusiastic about that, and that statute was drafted by me under the Senator's supervision entirely in his office with some help from others. The Senator was also chairman of a pre-statutory labor board that was appointed by President Roosevelt and composed also of three members of industry and three members of labor. The industry members were Walter Teagle, the president of Standard Oil of New Jersey; Gerard Swope, president of General Electric; and Louis Kirstein, the president of Filene's of Boston; and the labor members were William Green and John L. Lewis and Professor Leo Wolman, who taught labor problems at Columbia. Senator Wagner was in Europe when the board was appointed. He sent me a wire, "You take my place until I get back." I remember how peculiar my experience was as a young fellow of twenty-five sitting with these six august people talking about what we were going to do until the Senator got back.

Due to the fact that the Senator remained chairman

[12]

of that board on into 1934, I got considerable familiarity with the administrative side of it. But anyway, in early 1934, the National Labor Relations Act was introduced. It went through a bitter struggle for two years. It was enacted in 1935. I have always thought rightly or wrongly that both economically and politically, and politically I mean in the sense of shaping events to come, it was the most influential act of the New Deal. Its influence on the economic side doesn't need to be discussed because organized labor grew from three million to a peak of twenty million probably, under the act, and its gr