RUML, BEARDSLEY

Beardsley Ruml (November 5, 1894–April 18, 1960) was an important New Deal economic advisor on taxation issues. He was born in Cedar Rapids, Iowa, to a physician and a hospital superintendent, both Czech immigrants. Ruml graduated from Dartmouth College in New Hampshire in 1915 and received a Ph.D. in applied psychology from the University of Chicago in 1917 for work on mental testing. Ruml, along with other leading psychologists, participated in government mental testing for soldiers during World War I.

At an early age, Ruml demonstrated his supreme skills at mediating between the world of ideas and the nation's practical problems. Throughout the 1920s, Ruml served as the first and only director of the newly created Laura Spelman Rockefeller Memorial Fund. In that capacity, he was in touch with and offered substantial funding to other leading liberal social scientists. From 1931 to 1934, Ruml served as dean of the division of social sciences at the University of Chicago, an important center of social reform. In 1934, he accepted a job as treasurer of R. H. Macy and Company, the famous New York department store noted for offering the lowest prices possible. An acquaintance remarked that Ruml was trading ideas for notions, but as it turned out, he used his position in corporate America to play a formative role in crafting a liberal business response to the New Deal. He remained at Macy's for fifteen years, becoming chairman of the board in 1945. Dependent on consumer spending, that firm supported New Deal measures intended to increase mass income. On behalf of Macy's and other large retailers, Ruml drafted a report in support of federal unemployment insurance and social security pensions.

Within the New Deal, Ruml served as a leading voice favoring the use of deficit spending to bring about recovery. In 1937, President Roosevelt appointed him director of the New York Federal Reserve and he served as chairman from 1941 until 1946. Ruml joined Laughlin Currie, Aubrey Williams, and Harold Ickes in recommending the resumption of government spending in 1938 to end the "Roosevelt Recession." Ruml's major contribution came with his crafting of the idea of pay-asyou-go taxation during World War II as a way both to greatly expand the amount of revenue the government collected and to ease payment burdens, especially for those in military service, by spreading payments throughout the year. The Roosevelt administration implemented that withholding system in 1943 with the introduction of a mass tax that dramatically increased the number of taxpayers. To sell this mass tax, Ruml successfully advocated forgiving much of the previous year's taxes. As a member of the Committee of Economic Development in the postwar period, Ruml remained an advocate for the use of moderate Keynesian fiscal policies to stabilize the postwar economy.

See Also: FEDERAL RESERVE SYSTEM; KEYNESIAN ECONOMICS; TAXATION.

BIBLIOGRAPHY

Bulmer, Martin. "Philanthropy and Social Science in the 1920s: Beardsley Ruml and the Laura Spelman Rockefeller Memorial, 1922–29." Minerva 19 (1981): 347–407.

Collins, Robert M. The Business Response to Keynes,1929–1964. 1981.

Stein, Herbert. The Fiscal Revolution in America. 1969.

Meg Jacobs