O. Max Gardner served as governor of North Carolina from 1929 to 1933, but more importantly, his political organization dominated state politics from the 1920s to the 1940s. After he served in the state Senate before World War I, in 1916, at the age of thirty three, Gardner was elected lieutenant governor. After losing the Democratic nomination for governor in 1920 to Cameron Morrison, a candidate from U. S. Senator Furnifold M. Simmons’s “machine,” Gardner built his own “dynasty.” After his gubernatorial victory in 1928, with no opposition in the Democratic Party, Gardner chose his successor, John C. B. Ehringhaus, who won the governor’s race in 1932; Gardner’s brother-in-law and fellow citizen of Shelby, Clyde R. Hoey, also won in 1936. As a result, Gardner and his allies controlled the Democratic Party when it dominated the state and the South.
Gardner was a moderate and pragmatic politician. As a mill owner and friend of Piedmont textile, tobacco, and banking interests, Gardner promoted a pro-business agenda and fought unions, child labor legislation, and economic regulations. Often he opposed the eastern, agrarian, more liberal wing of the party, championed by Josephus Daniels, editor of the influential Raleigh News and Observer.
On the other hand, Gardner supported some progressive measures. Gardner supported higher wages for workers to counter the appeal of unions and also to end the destructive competition with other textile mills of the lower South with their low-wage philosophy. He had backed women’s suffrage, and in 1928 campaigned for Al Smith, the controversial Democratic nominee for president; many old-guard Democrats did not, for they questioned Smith’s Catholicism and opposition to Prohibition. Gardner also exemplified 1920s “business progressivism,” an approach to Southern economic development that called for the expansion of public services, especially roads and public schools, but not welfare. That southern progressivism also valued efficiency in state government. Gardner symbolized the post-World War I generation that transcended old political issues dating from Reconstruction.
Expansion of public services had proved expensive: state debt rose dramatically from $13 million in 1920 to over $178 million in 1929, when Gardner took office. Except for Florida, North Carolina probably had the greatest expansion in the decade, and by 1931, its per capita debt reached second highest in the country. In his first year, before the Great Depression set in, Gardner called for spending cuts, and by June 1929, he had cut the state budget by almost $1.5 million.
After the Stock Market Crash, Gardner commissioned a Brookings Institution study for a reorganization of state government to cut costs and increase efficiency. The 1931 General Assembly, with Gardner’s urging, acted on the report’s recommendation and revamped the highway, agriculture, and health departments and the state university system. These changes brought greater centralization to state government as well as savings. The 1931 General Assembly had reduced spending by $6 to $7 million a year.
Even before the onset of the Great Depression, Gardner also pushed for tax relief. Between 1920 and 1929, state and local taxes in North Carolina had risen 195 percent to pay for expanding public services. Cries for greater tax relief increased after the Wall Street collapse. By 1932, thirty-four of the state’s one hundred counties and seventy seven of its towns had defaulted, in part because of nonpayment of taxes.
Landowners demanded property tax relief, although property taxes had declined modestly as a percentage of all taxes in the 1920s. In 1929, before the Crash, Gardner recommended to the state legislature that North Carolina assume greater financial responsibility for roads and schools and lessen the burden of local governments. The Great Depression made that proposal even more popular, and the 1931 legislature enacted the proposals and reduced the property tax burden by more than $12 million, the largest dollar reduction in property taxes in Tar Heel history. Although many politicians pushed for a state sales tax as a new source of revenue, Gardner balked. The result was a compromise: a fifteen-percent ad valorem tax on property, increased corporate income and franchise taxes, and a gasoline tax.
Gardner’s fiscal discipline minimized the implementation of large-scale relief efforts. He did work with the Hoover administration, however; with loans to the state from the Reconstruction Finance Corporation (RFC), created by Congress in July 1932, Gardner helped provide federal help for the unemployed. To administer the relief funds, Gardner established the Governor’s Office of Relief. By late 1932, the RFC had over 56,000 people on work or direct relief. The RFC loaned $4.6 million to approximately 40,000 Tar Heel farmers. Gardner’s conservative approach to the Great Depression served as a model for his successor in the Governor’s Mansion. In 1932, John C. B. Ehringhaus defeated Richard T. Fountain for the Democratic gubernatorial nomination, with critical support from Gardner, who wanted his ally to continue probusiness policies.
In 1932 Gardner clearly was the most influential politician in the state and he, along with other leading Democrats in North Carolina, settled on Franklin Roosevelt as their choice for president. Gardner and Roosevelt had served as governors together and remained on good terms. In 1933 Gardner moved to Washington, D. C. and worked as a lawyer-lobbyist for such clients as the Cotton Textile Institute. With his relationship with the president, Gardner served as an important liaison between the New Deal and big business.
Initially Gardner embraced the New Deal‘s aid to business and industry, the National Recovery Administration. That agency worked with business interests, such as the textile owners, and crafted codes that benefited the owners as well as the workers. The NRA offered some protection from destructive competition and with the economic emergency, Roosevelt’s popularity, and demands of party loyalty, Gardner worked with the New Deal. Privately, however, Gardner criticized other features of the New Deal, such as relief measures for the unemployed.
By the late 1930s, as the New Deal became more pro-labor and anti-business, Gardner privately opposed it. He fought Roosevelt’s efforts to “pack the court” and defeat New Deal opponents in the 1938 elections. Publicly, for professional and political reasons Gardner maintained cordial relations with the White House. He turned down political appointments and continued as a lawyer-lobbyist for business clients in Washington, D. C. In 1947, however, he accepted President Truman’s appointment as ambassador to Great Britain, but he died before reaching London.
Douglas Carl Abrams, Conservative Constraints: North Carolina and the New Deal (Jackson, 1992)