John Ehringhaus, Gardner's successor, publicly supported President Franklin Roosevelt but reluctantly supported the New Deal. Image courtesy of the North Carolina Office of Archives and History, Raleigh, NC.
John C. B. Ehringhaus served as a Democratic governor in the most important era's in the state's history since Reconstruction—the Great Depression and New Deal. He attended Atlantic Christian Collegiate Institute and earned an undergraduate degree and a law degree at the University of North Carolina. A lawyer and potato farmer from Elizabeth City, he built a solid record of achievement before running for governor in 1932. He served in the state legislator from 1905 to 1907 and coauthored a bill that gave eastern North Carolina its teacher training college in Greenville. From 1911 to 1923 he worked as a solicitor. In the contentious 1928 presidential campaign between Herbert C. Hoover and Alfred E. Smith, Ehringhaus, unlike some prominent state Democrats, remained loyal to the party and worked hard for Smith in the state. He also vigorously supported O. Max Gardner in his bid for governor that year. Gardner's endorsement of Ehringhaus for governor in 1932 reinforced his connection with the "Shelby Dynasty," Gardner's political organization named for Gardner's hometown. The custom at the time called for the governor to alternate between the eastern and western sections of the state and 1932 it was the east's turn.
Ehringhaus intended to maintain the conservative, pro-business policies of his predecessor. His opponent, the incumbent lieutenant governor, Richard T. Fountain of Edgecombe County, reflected the more typical liberal policies of the agrarian east that opposed the business interests of the conservatives in the piedmont. Eastern politicians generally favored taxes on corporations to ease the tax burden on the small farm owners. The Ehringhaus-Fountain duel also reflected a personal power struggle of insurgents against the Gardner organization.
Predictably with the economic troubles of the 1930s, fiscal policies dominated the debate. Ehringhaus emphasized the need for a balanced budget. He believed that economy in government would help preserve the state's credit, critical with the depression. In the campaign, both candidates wanted an end to the fifteen-cent ad valorem property tax and both opposed a state sales tax as an alternative. With the state's debt and the public mood against burdensome property taxes, a sales tax was likely, but no candidate for governor wanted to admit it. If the sales tax became necessary, Fountain favored placing it on luxuries and Ehringhaus would let the legislature decide the issue. After a contentious primary and then a run-off between Ehringhaus and Fountain, Gardner's ally won in a close vote.
As governor, Ehringhaus fought for fiscal restraint, which included a balanced budget, retrenchment, and regressive taxation. That conservative agenda overrode any interest in relief, welfare, or jobs for North Carolinians struggling during the Depression. In his inaugural address, Ehringhaus pointed out that because of expansion of public services in the 1920s and the decline of state revenues with the depression, North Carolina had a debt of $9.4 million. With that debt and the proposed repeal of the fifteen-cent ad valorem property tax, the state had to have a replacement tax. On March 13, before a joint session of the General Assembly, an address carried live on statewide radio, Ehringhaus endorsed a general sales tax as the most practical replacement for the ad valorem property tax and the best strategy for eliminating the budget deficit. Even for the conservatives, budget cutting had limits. In addition, he recommended the extension of the school year from six months to eight months, with the increase partially funded by sales tax revenues. Above all other concerns, in 1933 the Ehringhaus administration secured the passage in the legislature of a sales tax.
The movement for a sales tax had started in several states in the 1920s as a means of funding expanding state services. Homeowners, farmers, and corporations disliked property taxes and argued that property carried a disproportionately high share of the tax burden. With the onset of the Great Depression cries for property tax relief had grown louder. Liberals countered that a sales tax was regressive; it placed proportionately a greater burden on the poor and they favored higher taxes on corporations. By 1935, with the improvement in the state's economy and increase in state revenues, Ehringhaus proposed additional expenditures for education and roads, but also, much to the disappointment of liberals, he wanted the sales tax to continue and also the exemptions on necessities eliminated. The 1935 General Assembly retained the sales tax despite liberal opposition in the legislature. Josephus Daniels of the Raleigh News and Observer complained that Ehringhaus worried more about a balanced budget than he did spending money on education.
In the fall of 1933, Ehringhaus emerged as a champion of the tobacco growers. Initially farmers did not trust him because of his ties to corporate interests, such as tobacco companies, but he led the fight for a marketing agreement for the 1933 crop. He had called for a marketing holiday and led a delegation of tobacco farmers to Washington to dramatize the point. Eventually companies, growers, and the Agricultural Adjustment Administration (AAA) reached a deal on prices. He personally led the sign-up campaign for 1934 acreage reduction. Ehringhaus earned the respect of tobacco farmers, especially when tobacco prices improved through 1935.
In 1936 the Supreme Court declared the AAA unconstitutional and tobacco growers scrambled for a regional compact among states to replace it. Cooperation among states lagged and Ehringhaus resisted pressure to act. The state legislature would have to meet in a special session to implement it, and he feared that such a session would repeal the sales tax he had worked so hard to preserve, and furthermore, New Dealers in the state would insist on legislation to implement the Social Security program in the state.Higher tobacco prices in 1936 vindicated the governor.
To administer New Deal relief grants, the state created the North Carolina Emergency Relief Administration (ERA), and Ehringhaus chose Annie Land O'Berry of Goldsboro as the director. Relief activities remained generally free of political interference. Routinely, states had to match federal relief funds, but the governor, continuing his fiscal restraints refused to ask the legislature for funds. Eventually Washington relented and assumed all the costs. Similarly, Ehringhaus balked at compliance with the 1935 Social Security program due to the expense for the state. Fearful that liberals might try to repeal the sales tax, he resisted calls for a special session of the legislature until December 1936, when the General Assembly complied with Social Security requirements. In January 1938, benefit payments for North Carolinians began. The state in 1935 created the North Carolina Rural Electrification Administration (NCREA), one month before the federal ERA started, to bring power to rural areas. Critics charged that the NCREA favored power companies over electric cooperatives and the REA.
Ehringhaus, like other conservative Democrats in the state, supported President Franklin D. Roosevelt, who was very popular, with rhetoric and favored some New Deal policies, ones that did not threaten the fiscal conservatism of state government. Overall Ehringhaus limited the impact of the New Deal in the state.
After his term as governor, Ehringhaus served as the special assistant to the U. S. District Attorney. He passed away on July 31, 1949.
Douglas Carl Abrams, Conservative Constraints: North Carolina and the New Deal (Jackson, 1992) and Anthony J. Badger, Prosperity Road: The New Deal, Tobacco, and North Carolina (Chapel Hill, 1980).
By Douglas Carl Abrams, Bob Jones University
See Also:Related Categories: Political History, New Deal/ Great Depression, Governors