Happy Chandler - First Term As Governor

First Term As Governor

After Beckham declined to run for governor, the anti-Laffoon faction supported Chandler against Rhea. During the primary campaign, Chandler seized upon the unpopular sales tax, labeling Rhea "Sales Tax Tom" and calling on the electorate to redeem the state from "Ruby, Rhea, and Ruin". In the first round of the primary, Rhea garnered 203,010 votes to Chandler's 189,575. Frederick A. Wallis received 38,410 votes and Elam Huddleston received 15,501. The votes for Wallis and Huddleston meant that neither Rhea nor Chandler had achieved a majority, triggering the runoff primary. Both Wallis and Huddleston backed Chandler in the runoff, and Chandler defeated Rhea by a vote of 260,573 to 234,124 to secure the nomination.

Chandler promised to repeal the unpopular sales tax, lower the gasoline tax, oppose any increase in property taxes, and end the common practice of assessing state employees a percentage of their salaries to be used for campaign activities. Infuriated by their loss, Laffoon and his allies abandoned the party and supported Republican nominee King Swope. Policy-wise, there were few differences between the two, and personal attacks were employed by both sides. Swope's reputation as a stern judge contrasted sharply with Chandler's charisma, and Chandler used this to his advantage by dubbing Swope "his majesty". When Chandler touted his service during World War I, Laffoon's adjutant general Henry Denhardt countered by pointing out that Chandler had only been a cadet in training and never engaged in active service in the war. Ultimately, the campaign turned on the failed presidential administration of Republican Herbert Hoover versus that of the sitting president, Democrat Franklin D. Roosevelt. Chandler defeated Swope by a vote of 556,262 to 461,104 in the general election. The 95,000-vote margin of victory was, at the time, the largest ever recorded in a Kentucky gubernatorial election, and at age 37, Chandler was the youngest governor of any U.S. state.

One of Chandler's first acts as governor was to secure the repeal of the sales tax passed under Laffoon. He also successfully lobbied the legislature to abolish the two-round primary in favor of a single primary for future elections. Knowing that he would need to raise revenue to offset the repeal of the sales tax and bring the state's expenditures in line with its income, Chandler appointed a commission headed by former Governor Beckham to draft suggested budgetary legislation. Knowing that lobbyists hostile to the suggestions would likely try to encourage legislative gridlock until the constitutionally-mandated end of the sixty day session, Chandler asked his allies in the General Assembly to adjourn after thirty-nine days and allow him to call a special legislative session that would not be time-limited and could only entertain the agenda he specified. Legislators obliged this request.

Acting on recommendations from Beckham's commission, legislators helped offset the lost revenue from the sales tax by raising excise taxes; of particular import was the tax on whiskey, which was made possible by the repeal of Prohibition in 1935. Legislators also enacted the state's first income tax during the session. Chandler further proposed to achieve savings through the Governmental Reorganization Act of 1936. The bill realized significant cost savings by restructuring the state government, reducing the number of boards and commissions in the executive branch from 133 to 22. Critics pointed out that the act also centralized more power in the hands of the governor and accused Chandler of ulterior motives in supporting it.

Chandler used the savings realized from his reorganization of government to eliminate the state's budget deficit and pay off most of the state's debt. This brought about further savings by eliminating debt service costs; these were applied to improvements in the state's infrastructure and educational institutions. Chandler allocated funds for free textbooks for the state's school children, created a teacher's pension fund, and provided extensive funding for the state's colleges and universities. Because segregation prevented blacks from attending graduate school in the state, Chandler secured an allocation of $5,000 annually to help blacks attend out-of-state graduate schools. He stopped short of desegregating the state's universities, however, telling a group of black and white educators that "it is not wise to educate the white and colored in the same school in the South. It is not prepared for it yet."

In 1936, Chandler urged implementation of the state's first rural roads program and development of electrical infrastructure with assistance from the federal Rural Electrification Act. He implemented an old-age assistance program authorized by an earlier constitutional amendment and in 1938, proposed another amendment that would add dependent children and needy blind people to the state's assistance rolls. He increased funding to the state's hospitals and asylums, and personally aided with the evacuation of the Frankfort Penitentiary during the Ohio River flood of 1937. Following the flood, Chandler convinced the legislature to construct a new reformatory at La Grange.

Generally a friend of organized labor, Chandler supported miners' efforts to unionize, organized the state Department of Industrial Relations, and prohibited mine operators from being appointed as deputy sheriffs. He also endorsed the proposed Child Labor Amendment to the federal constitution and secured passage of a state anti-child-labor law that had previously been defeated twice in the state legislature by overwhelming margins. However, he opposed closed shops and sitdown strikes, and utilized the Kentucky National Guard to quell labor-related violence in Harlan County.

In the 1936 senatorial contest in Kentucky, incumbent Democrat Marvel Mills Logan was seen as vulnerable, and Chandler backed Democratic challenger J. C. W. Beckham in the Democratic primary. This endorsement drew the ire of Chandler's former ally, Democratic Congressman John Y. Brown, Sr., who believed that, in exchange for his support of Chandler in the 1935 gubernatorial race, Chandler would support him in the U.S. Senate contest. An embittered Brown entered the race anyway, and the votes he pulled from Beckham likely allowed Logan to retain the seat. Brown remained Chandler's political enemy for the rest of his political career.

In 1936, Chandler was awarded an honorary Doctor of Laws degree from the University of Kentucky; the following year, Harvard University awarded him the same degree.