[BETA] Fortnightly

The decision in September by Malcolm S. Forbes, Jr., millionaire businessman sans political experience, to launch a bid for the White House in 1996 prompts comparison with another millionaire businessman and political neophyte, Wendell L. Willkie, who defied conventional wisdom 55 years ago and won the GOP nomination to oppose Franklin D. Roosevelt in the 1940 Presidential election.

Forbes himself relishes the comparison. Indeed, he has drawn inspiration for his run from the example set by Willkie (em a Hoosier, a Democrat for much of his life, and perhaps the most famous dark horse Presidential hopeful of this century.

It was not Forbes, however, who resuscitated and resurrected the spirit

of Willkie, which, it seems, has guided and inspired Newt Gingrich and the

Republican-controlled 104th Congress. Willkie, in fact, is the spiritual patron of the Contract With America.

A National Symbol

Gingrich has pledged to "devolve the New Deal" and to dismantle federal programs established by FDR. He has embarked on a crusade to "replace our centralized, micromanaged, Washington-based bureaucracy."

Willkie criticized such a bureaucracy before it was even put into place, making himself a national symbol of opposition. He led the conservative backlash against the New Deal, which big business deemed a frontal assault against free enterprise and the American way of life.

Willkie, an articulate and forceful spokesman, initiated a debate on capitalism versus socialism, on free enterprise versus the welfare state. His rhetoric is reflected in the current debate, into which the Contract With America has breathed new life, between big business and big government. References to centralized, micromanaged federal bureaucracies come right out of the proverbial book that Willkie wrote.

But how was Willkie able to acquire the national prominence that bestowed upon a political neophyte the helm of a crusade against the New Deal? After all, he never published a respected business magazine that bore his name.

Losing the Fight

Willkie was catapulted into national prominence through his efforts to prevent enactment of the Public Utility Holding Company Act of 1935 (PUHCA), an arcane statute that is administered by the U.S. Securities and Exchange Commission (SEC). Sixty years later, PUHCA remains on the books.

PUHCA is an obscure statute, an unknown cog in the wheels of the federal bureaucracy. The battle over its enactment, however, became the longest and perhaps the most vicious of the New Deal. The rhetoric associated with that battle set the terms of a debate between big business and big government that continues today.

In 1932, 13 holding companies controlled 75 percent of the electric and natural gas utilities in the United States. Since his election in 1932, FDR had singled out for reform those companies whose fraud and corruption the Federal Trade Commission had meticulously documented.

PUHCA imposed a "death sentence" on, and required the abolition of, complex holding company structures that had enriched utility magnates like Samuel J. Insull at the expense of utility consumers and small investors. It was, in effect, an antitrust measure intended to protect holding company investors as well as electric and natural gas utility consumers.

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