HENDERSON, LEON

Economist and administrator Leon Henderson (May 26, 1895–October 19, 1986) was born in Millville, New Jersey. He earned a bachelor's degree in economics from Swarthmore College in Pennsylvania in 1920, and gained a national reputation as a consumer credit specialist after joining the Russell Sage Foundation in 1925.

Henderson was a prominent critic of the early New Deal's pro-business orientation. To assuage consumer interests, National Recovery Administration (NRA) chief Hugh Johnson appointed Henderson as special adviser in December 1933 and then as director of the NRA's research and planning division in February 1934. However, Henderson remained a persistent critic of the NRA's industry-written Blue Eagle codes, which supported restricted production and high prices. Henderson's research revealed the inequity and inefficiency of the codes, a conclusion presented at the NRA's price hearings in January 1935, which helped to discredit the agency prior to its abolition.

Henderson's ideas influenced the evolution of the New Deal. He believed that strong competition, government enforced if necessary, would generate prosperity and that monopolies and price-fixing by big business deterred competition. Henderson also championed economic planning that empowered the government to make basic decisions about production and prices in major industries. Moreover, the recession of 1937 to 1938 convinced him that increased deficit spending was needed to stimulate consumption and bring recovery. As economic adviser to Works Progress Administration director Harry Hopkins, Henderson helped Federal Reserve chairman Marriner Eccles persuade President Franklin D. Roosevelt to accept this approach in April 1938. Accordingly, Henderson acted as a bridge between New Dealers who favored a trust-busting solution to America's economic problems and those who advocated an approach that would later be called Keynesianism. Henderson hoped to integrate both elements into a broad liberal agenda with his appointment as first executive secretary of the Congressional Temporary Economic Committee, established in June 1938. Disappointed that its final report in March 1941 focused on antimonopoly concerns, Henderson called for a comprehensive statement of national economic needs and a broad program to meet these needs.

In April 1941 Roosevelt appointed Henderson to head the Office of Price Administration (OPA), which regulated the production, distribution, and price increases of retail goods. Henderson's robust use of government powers to protect consumers increased his unpopularity with business and congressional conservatives. Suffering from ill health and overwork, Henderson left government after the Republicans gained seats in the 1942 congressional elections, in which the OPA was an issue. His vision of a reform agenda that combined the regulatory, planning, and fiscal powers of government went unfulfilled. With the success of wartime deficit spending, it was the more limited Keynesian approach that became the liberal orthodoxy.

See Also: ECONOMISTS; KEYNES, JOHN MAYNARD.

BIBLIOGRAPHY

Brinkley, Alan. The End of Reform: New Deal Liberalism in Recession and War. 1995.

Hawley, Ellis. The New Deal and the Problem of Monopoly. 1966.

Iwan Morgan