Chapter XIII

THE REPUBLIC IN CRISIS

To realize the extent of this assumption of powers by the federal government, we have but to look at a comparison of its expenditures in 1927 and 1953. These comparisons are made wholly between peacetime agencies:

 

Agricultural Department

1927

$ 155,584,000

 

1953

3,217,000,000

Commerce Department

1927

30,383,000

 

1953

1,063,000,000

Labor Department

1927

9,800,000

 

1953

300,000,000

Health, Education & Welfare

1927

19,000,000

 

1953

1,920,000,000

One interesting comparison is found in the Office of the President. In 1928, Congress appropriated $585,-000 to cover all the expenses of the President’s office. In 1953, Congress appropriated $5,783,000,000—nearly six billion dollars. These sums were appropriated to be spent by the President on whatever purposes appealed to him all over the world.

In the 20 years from 1913 to 1932, including World War I, the total expenditures of our government on everything were $84,000,000,000. In the 20 years from 1933 to 1952, the total expenditures were $700,-000,000,000—nearly seven times as much as during the entire history of the government from 1789 to 1933.

But it is not only in the amounts spent—amounts raised and expended under the theory of continuous heavy government taxes and borrowing—but in the nature of the things on which the money was spent that we see how our Republic has been altered. By 1953, the total federal expenditures in a single year had grown to $74,607,000,000. This, of course, included the costs of the Army, Navy and Air Force, but some $21,000,000,000 of it was consumed in a variety of adventures in manufacturing and various civil and economic activities, in which the federal government has no shadow of right to engage under the Constitution. These included all sorts of manufacturing, construction and other economic activities along with the so-called paternalistic activities of the federal government.

It is impossible, of course, to catalogue in a brief space all the diverse activities in which the federal government has engaged as operator, partner or financial backer. European socialists, who worked to transform their societies into socialist heavens, adopted the strategy of building socialism one step at a time—creeping socialism. They saw the advantage of beginning with electric power, finance, transportation and basic materials. A government which controls our system of transportation, of electric power, our iron and coal mines and our banks has in its hands weapons it can use to bring every business enterprise in America under its control. No business can operate for a week without these basic materials and services.

The most important of these invasions has been the government’s intrusion into electric power. It began with the pretense of protecting the Tennessee Valley from floods by building huge dams to dam up the river floods. Of course this does not protect the valley from floods. It has actually submerged under a permanent flood a large part of the valley which suffered from these annual inundations. The impounded water is used to pour over huge installations which are operated to generate electricity. Having begun with the Tennessee River, the government spread out to the Cumberland and built a number of giant hydroelectric plants in Tennessee and Kentucky. These provide insufficient power for the valley, so the government began building steam generating plants—11 of them—in Tennessee, three in Alabama and one in Kentucky.

This is not the whole story. The architects of the enterprise gave it a very significant name. They called it the Tennessee Valley Authority. The word “Authority” was chosen to mask their ultimate intentions. They have set down in writing that state lines are illogical—that this valley consists of five states and these must be considered as an economic unit, in which all the basic enterprises must be planned and directed by a central authority representing the federal government.

Of course their plans extend to the entire United States and look to the ultimate extinction of the states. Over 2,821 projects in the field of power have been authorized by the government, of which over 2,000 have been completed. These have cost over 12½ billion dollars and more than 7 billion more of federal funds are to be expended.

Indeed the federal government, once a mere central agency to protect the states and to protect the people from the states, severely limited in its area of power, has now become a vast operating administration consuming many kinds of materials and carrying on many business enterprises. It has become a manufacturer and producer and merchant. The House Committee on Government Operations in a report on this subject has warned that “Federal agencies have entered into so many business type activities that they constitute a real threat to private enterprise, imperil the tax structure and are, in many industries, a step toward socialism.” It urges that the federal government “keep out of competitive business enterprises.”31

The government’s ownership of wealth has grown on an enormous scale. The House Committee reports that from 1929 to 1948, while private wealth increased by 78.7 percent, government-owned wealth increased 278.5 percent and that in 1948, wealth—that is, property, industry, funds and other forms of wealth in the nation—owned by the government equaled 27.3 percent or over a quarter of the total. The report says: “It is the largest insurer, the largest lender … the largest tenant, the largest holder of grazing land, the largest owner of grain, the largest warehouse operator, the largest shipowner, the largest truck fleet operator.”32

This report lists a number of industries in which the government carries on extensive manufacture:

 

Rope manufacture

Metal heat treating

Tug & barge operators

Printing

Alcoholic beverages

Warehousing

Scrap iron and steel

Power facilities

   operations

Tire recapping

Coffee roasting

Paint manufacture

Box making

Saw mills

Ice cream manufacture

 

And of course, as in all socialist activities, when the government runs business it runs it in the most expensive and least efficient manner. The Army, for instance, insists it is economical to roast its own coffee—nearly 100 million pounds a year. But the Veterans’ Administration, which procures some five million pounds a year, buys on a competitive basis a better blend at a lower price. So serious has this particular situation become that as I write the government is considering which of these activities it can curtail or end.

Under our Constitution the federal government has absolutely no authority to interfere in public education in the states. The creeping socialist groups—the socialists, the communists and their various pink satellite allies—carry on an intensive drive to move the federal government into the field of education. They urge federal grants to public and other schools. Their purpose, of course, is to control curricula, teaching methods and the content of education. To do this they have sought to induce the local educational authorities to appeal to Washington for funds. The plan is preposterous. The federal government can get no funds for education or anything else save from the people in the states, taking money from the states and sending it back to the states as if it were a gift from Uncle Sam. Indeed, it is important that American parents understand that the federal government is really one of the greatest enemies of free education. It drains out of the pockets of the people of the states such vast funds for its political, socialistic, war-making and foreign adventures that it is difficult for the state and local governments to collect adequate taxes for their own needs.

Like all the others, this is a creeping invasion. In 1932, the federal government gave $33,402,000 to the states for teacher education. In 1951 it gave $137,355,-000 for teacher training. It distributed $2,550,000,000 in 1951 for general education. It took huge sums out of the states in taxes—and then handed back a fraction for education. The government has no secret hoard from which to conjure taxes. Taxes can come only from the people in the states. And the federal government always takes from the states, no matter what the purpose, more than it returns. It seeks to bribe teachers and parents with their own money.

The central meaning of all this lies in the fact that the nation is in the midst of a creeping revolutionary movement carried on not by guns but by stealth. It would not, of course, be true to say that all our leaders understand this clearly. They move along with the current in which they are caught because it carries them for the moment in the direction of some personal, business or social objective. It is part drive and part drift toward the collectivist State. And many of the leaders, who are mere politicians rather than statesmen, have little understanding of the direction in which they drift.

The intelligent political leader, as we have seen, understands clearly that there is no such thing as a compact majority. There are only large minorities bent on pressing their own special social or economic or political goals. And each of these minorities, individually, may not think of its goals as socialistic. The farmers, for instance, who have received over 6½ billion dollars in subsidies from the government, do not think of themselves as socialists, nor do certain big business enterprises which enjoy huge war contracts from the government, nor many of the workers in left-wing labor unions who are constantly pressing their demands for government control over industry. But it is the politician’s job, if he is to remain in power, to coalesce all these minorities into a majority, and with government funds or government favors to buy the votes of farmers, of workers, of business leaders. It is not because they want socialism that these people acquiesce in such betrayals. They just do not realize that each of these adventures inflicts another wound on the free society. The system of free enterprise cannot sustain these huge tolls. It is impossible to collect enough taxes to pay the bills. Hence the politicians who run the show turn to borrowing money from the citizens, from industry and from the banks. This creates a spurious prosperity which can last only until the taxing power and the debt-paying power of the goveminent is exhausted, when the whole degenerate structure will sink down in disaster.

Here is a revolution taking place under our eyes—one step at a time. Each advance into socialism is made possible by some special benefit in money or legislation which will accrue to some gullible group. And once this drift sets in a most astonishing phenomenon appears. The nation slides unresisting down the slippery grade into socialism without any Socialist Party being implicated in the adventure.

31 7th Intermediate Report, House Committee on Government Operations, House Report No. 1197, 1954.

32 Ibid., p. 10.