THE PEOPLE'S CENTURY
305
The sudden and severe economic collapse in the fall of 1937
meant the end of isolationism as a foreign policy for American
capitalism. Little more than a month after the first big stock market
break, Roosevelt made his famous "Quarantine the aggressor"
speech in Chicago, formally announcing an interventionist foreign
policy and the start of a great rearmament program. Hitler, of
course, was becoming a real menace to America, and this was the
general
reason for the new policy. But it came when it did because
it offered an alternative to Roosevelt's policy of domestic economic
reform, which had been buried beneath the wreckage of the "reces–
sion." And the implications went far beyond the strategy of the
Roosevelt Administration. In 1936 and 1937 the class struggle
had become increasingly sharp: Coughlin-Lemke presidential cam–
paign; the "Mohawk Valley Formula"; the great sit-down strikes
in rubber and automobiles; the Little Steel strike; Talmadge's
"Gra"ss Roots Conference"; the Black Legion, etc. The breakdown
of Roosevelt's economic policy in the fall of 1937, coming on top
of the Supreme Court fiasco and the breaking of the Little Steel
strike, seemed to indicate that the one perspective for American
capitalism
within its national' boundaries
was an evolution towards
fascism. After 1937, however, the more far-sighted members of
the business community came to see in Roosevelt's interventionist
foreign policy a more desirable alternative: to smash the ever more
menacing Nazi imperialism in a second world war, from which the
United States would emerge with a world position analagous to
England's in the last century. This nco-imperialist perspective
implied a. liberal domestic policy, partly because an anti-Nazi war
could be thus most effectively waged, partly because a victorious
American imperialism could afford, as England had, a relatively
high standard of living for its own workers at the expense of the
rest of the world.
The process of enlightenment was, naturally, a slow one. The
business community-and the Republican party-was divided for
years on the war issue. International bankers like the House of
Morgan saw the light first; industrialists took longer to come
around; most backward of all were the farmers, the little busi–
nessmen, and the small-town bourgeoisie who make up the Repub–
lican rank and file. The conflict reached one climax at the Repub–
lican convention in the spring of 1940, when Wall Street, led by
the House of Morgan and its allied Lucepapers, was able to nomi-
