“Slouching Through the Depression”
The brawl between Doriot and Curley was part of larger battle brewing between the democratic New Dealers and the republican business establishment. Most of the business community initially supported Roosevelt’s New Deal but after the government passed the Glass-Steagall Act of 1933, prohibiting commercial banks from owning brokerages, and then created the Securities and Exchange Commission in 1934, Roosevelt began to lose Wall Street. It didn’t hurt him politically, though. The country wanted drastic action and Roosevelt gave it to them in spades.
Indeed, while most parties lose support in the first midterm elections, the Congressional elections of 1934 gave President Roosevelt large majorities in both houses, sparking a second wave of New Deal legislation. These measures included the Works Progress Administration, which set up a national relief agency that employed two million family heads; the National Labor Relations Act, which established the federal rights of workers to organize unions, to engage in collective bargaining, and to take part in strikes; and, most importantly, the Social Security Act, which created an economic safety net for the elderly, the poor, and the sick.
Contrary to Doriot’s inane predictions, the New Deal helped revive the morale of the nation as well as the economy. After unemployment peaked in 1933 at 24.9 percent, it fell for three consecutive years until it bottomed out in 1937 at 14.3 percent. Although still a high level of unemployment, Roosevelt’s policies clearly brought significant relief to a nation desperate for the chance to earn an honest day’s work.
Doriot also began to benefit personally during these years as dozens of companies sought his guidance. On October 25, 1934, the Kansas City Southern Railway Company hired Doriot to become a director, his first board-level position since his days with Willy Wiseman at New York Foreign and Development Corporation. In December, railway car maker Budd Manufacturing also hired Doriot as a director, and he soon after was elected to the company’s executive committee. In March of 1935, Doriot was made vice president of Budd Manufacturing, and in September, Budd subsidiary Budd Wheel offered him yet another director position. Lastly, in October, the Massachusetts Investors Trust, one of New England’s largest investment managers, hired him as a consultant.
At the end of 1935, the head of Budd Manufacturing cabled Doriot, asking him to sail immediately for Europe. Budd had big plans for Europe and wanted Doriot’s help. But the offer came at a bad time. At Dean Donham’s request, Doriot had taken over the required first-year class in industrial management that year, although the Dean had asked him to teach it as a version of his Manufacturing class. With a staggering 450 students, it was the biggest class of his career, and Doriot knew Dean Donham would not release him for an extended period.
[The first diesel-powered train in America built of stainless steel by E. G. Budd Manufacturing Company. On May 26, 1934, the Burlington Pioneer Zephyr made its record breaking trip from Denver to Chicago, a distance of 1000 miles, in approximately 13 hours at an average speed of 77 mph.]
Even though Doriot was unable to accept the offer from Budd Manufacturing, it didn’t stop him from agreeing to other outside assignments. In 1936, Doriot became a consultant to Ladenburg, Thalmann & Company, a New York–based investment bank. In 1937, Thornley & Jones, Incorporated elected Doriot to its board. Then in 1938 and early 1939, Doriot became director of more than ten other companies, including the utility, Standard Power & Light Corporation, and manufacturing concerns such as McKeesport Tin Plate.
Dean Donham allowed faculty to perform outside consulting as long as it did not interfere with the main work of the School. It was his best way of keeping low-paid professors on staff. Doriot’s astonishing amount of outside work pushed the limits of the School’s rules. But Doriot was one of the most popular professors, and he was tenured to boot. Since Doriot was a workaholic with no family responsibilities to divert his energies, he managed for the most part to pull off the balancing act.
Moreover, Doriot continued to develop innovative teaching methods that pleased Dean Donham. In 1937, Doriot adapted the approach of his Business Policy and Industrial Management courses to a new second-year course called simply “Manufacturing.” Unlike his Manufacturing Industries course he taught as an assistant professor, the purpose of this new course was to “train the students in the thorough analysis of and in the administrative control of a manufacturing company.” Emphasis was placed on “the study of new products, new ideas, new developments and new questions of research,” all under Professor Doriot’s “imaginative and stimulating guidance.”
For the next forty years, Professor Doriot would use this course as his intellectual sandbox, training more than six thousand students in the arts of self-improvement and creative management.
Eventually though, Doriot did make a few concessions. There were just too many balls to juggle. Between 1936 and 1938, he resigned from six, or about a quarter, of his outside positions, including those at N. W. Ayer & Son, Budd Manufacturing, Ladenburg, Thalmann, and Thornley & Jones.