North Carolina’s Manifesto Helped Stymie New Deal

President Franklin Delano Roosevelt had many fans, but North Carolina Sen. Josiah Bailey, an author of the Conservative Manifesto of 1937, was not one. In a letter to anti-New Dealer Sen. Peter G. Gerry of Rhode Island, Bailey wrote, “Our President is not actuated by principle, but by fears. He will try to head off anything in order that he may stay at the head.”

Yet, Bailey in his first term (1930-1936) weakly resisted the expansion of the federal government. Bailey was well aware of FDR’s popularity in North Carolina and heavy-handed party leadership. Bailey also recalled that his 1930 Senatorial election was won, in great part, because he censured Sen. Furnifold Simmons for party disloyalty. As a result, Bailey voted only against the Wagner Act, for it basically placed the weight of government behind organized labor.

Critics considered the North Carolina senator’s political timidity and obsequiousness as tactics to ensure reelection and fulfill political ambition. Perhaps the most consistent, sardonic, and possibly vicious criticism came from the pen of Jonathan Daniels, editor of the Raleigh News and Observer, who predicted that Bailey would show his true ideological colors once re-elected.

Daniels was right. Bailey acquiesced initially to FDR so that, when the timing was right, he could one day “fight a good and last fight” to check collectivism.

Government meddling in business, Bailey believed, not only prolonged the Depression but also ruined any chance of real economic recovery and sapped individual Americans’ integrity and hardiness. Bailey also regretted that progressives co-opted free-market terminology: “I am a great liberal when it comes to the fundamental meaning of the word,” Bailey wrote North Carolina Gov. O. Max Gardner, “but I am not a liberal when they interpret liberalism in terms of a return to the old reactionary system of centralized power and control of the individual . . . .”

Re-elected to the U.S. Senate in 1936, Bailey no longer feared political reprisal. In 1937, America experienced an economic recession, and partisan lines blurred when conservative Republicans and Southern Democrats opposed FDR’s court-packing schemes. When Roosevelt charged businesses to bring the nation out of economic recession yet refused to deregulate, Bailey had had enough.

He then formed a bipartisan alliance to oppose further New Deal legislation. The torchbearers of liberty and delimited government worked secretly to draft the Conservative Manifesto. But word soon leaked. Fearing political repercussions, many senators denied coauthoring the document. Bailey, however, accepted responsibility.

According to historian John Robert Moore, the Conservative Manifesto called for:
1. Immediate revision of taxes on capital gains and undistributed profits in order to free investment funds.
2. Reduced expenditures to achieve a balanced budget, and thus, to still fears deterring business expansion.
3. An end to coercion and violence in relations between capital and labor.
4. Opposition to “unnecessary” government competition with private enterprise.
5. Recognition that private investment and enterprise require a reasonable profit.
6. Safeguarding the collateral upon which credit rests.
7. Reduction of taxes, or if this proved impossible at the moment, firm assurance of no further increases.
8. Maintenance of state rights, home rule, and local self-government, except where proved definitely inadequate.
9. Economical and nonpolitical relief to unemployed with maximum local responsibility.
10. The reliance upon the American form of government and the American system of enterprise.

Simply put, Bailey believed “the repeal of irksome taxes, the ending of government competition with business, and the maintenance of states’ rights would . . . bring the return of the business confidence necessary to stimulate recovery.” The Tar Heel hoped to properly balance enterprise and government intervention and remind FDR that bi-partisan opposition to collectivization was possible.

In the end, the Conservative Manifesto stymied the New Deal and created momentum for a postwar conservatism that overturned many New Deal programs.

Troy Kickler is director of the North Carolina History Project.