20 - Teddy Roosevelt and Wall Street
History: How Capitalists Rule
The Republocrats, No.20:
TEDDY ROOSEVELT AND WALL STREET
By Vince Copeland
Theodore Roosevelt's father, uncles and paternal grandfather were all bankers. His friends and acquaintances came largely from the New York banking fraternity. His mother, Martha Bulloch, was a daughter of the Old South, whose paternal ancestors were slave owners.
In splitting up the family fortune, his father left him a little less than a million dollars so as to accommodate the other children. But in spite of this relatively small stake, his family connections put him well inside the charmed circle led by the Astors and the older multimillionaire families of New York.
When Roosevelt went into politics at the age of 23, his generation in his social class were somewhat surprised and shocked. It was like a Southern heir in a big white-pillared house taking a job as overseer of the slaves: very vulgar.
Even with a little money, he could not automatically buy himself a seat in Albany, nor would he have wanted to. He had to have the backing of the New York Republican machine. This was controlled by various ward-heeler types but, over all, it was dominated by the J.P. Morgan banks through the agency of Chauncey Depew, who was a U.S. senator by the time Roosevelt became governor.
Roosevelt never acknowledged his debt to Morgan or to Depew. He didn't even mention Depew in his autobiography. But Depew mentioned Roosevelt in his. And it is on the public record that it was Depew who nominated Roosevelt for mayor, for governor and for vice president. Depew added that he also was instrumental in nominating Roosevelt for the less prominent post of New York state assemblyman. This does not seem to be an exaggeration, especially in light of Roosevelt's own silence on the question.
WHY WAS HE SILENT?
Why was Roosevelt silent about Depew? Perhaps it was not so much because of the Morgan connection as the fact that Depew was in such bad odor by the time Roosevelt wrote his autobiography in 1913. The smell would have been that much harder to eradicate from Roosevelt had he himself admitted the connection.
By that time, the Wall Street influence on government was becoming more and more hateful to more and more people. It was actually irreversible by then, but it had to be made more indirect, more subtle and less painful to the middle class, if not to everybody else.
Roosevelt himself, with a pugnaciously independent kind of personality, liked to show his individuality and publicly defy J.P. Morgan, along with the other tycoons of big business. Even though Roosevelt was a member of the same social grouping as Morgan, his independence and anti-Morganism, so to speak, did not sit so well with Morgan himself, who got even with Roosevelt in the campaign of 1912. But Roosevelt's personality convinced millions of people that at last there was a president who could take on Wall Street and effectively control it.
`I TOOK PANAMA'
The main achievement of the Theodore Roosevelt administration, according to Roosevelt's own commentaries and his daughter's autobiography, was the taking of the Isthmus of Panama. Actually, the plunder of that territory was greatly facilitated by the Spanish-American War, the consequent weakness of Spain, and the vulnerability of all the Latin American countries.
A glance at a map of the hemisphere shows that the isthmus is flanked on the eastern side by a chain of islands--Cuba, Hispaniola (Haiti and the Dominican Republic) and Puerto Rico being the largest. All of these were by then occupied by the United States, which had the most effective naval base in the Western world at Guantanamo, Cuba. (The U.S. Navy is still there.)
Panama had been part of the South American country of Colombia. But Roosevelt engineered a "revolution" in the Panama district and got a "declaration of independence" from the inhabitants. After this the U.S. began (in 1903) to dig the canal and arbitrarily reserved the central part of the new country as the "Canal Zone."
Tens of thousands of Black workers from Jamaica and other Caribbean islands were imported to do the work. They died by the hundreds in mosquito-infested swamps, decimated by the then-deadly yellow jack fever. To this day, the Mestizo population is supplemented by large numbers of Black people and the racial mix is played upon by imperialism to keep the disunity necessary for outside rule.
A few years after his conquest of Panama, Roosevelt boasted to a large audience of students in California that he had to take the isthmus single-handedly because Congress would have been too slow and disorganized to do it right!
MEANING OF PANAMA
The idea of a canal between the two continents is a good one, of course. It shortened the steamship trip to Asia by several thousand miles--the dream of visionaries for a century.
But the question always was: who will control the canal and what will they do with it?
U.S. control of the canal meant that both Germany and England would be frozen out from further money-making in Latin America except at the will of the U.S. government. And since the U.S. government represented no one else but U.S. big business, this was a plus for their prosperity. But more significantly, it was a gauntlet thrown down to the other imperialists, with a possible threat of another war to insure the success of the new status quo.
However, Roosevelt's rank-and-file supporters in the Republican Party had their eyes fixed on his "progressivism," not his imperialism. What they did not know was that they would have to pay for the former by dying for the latter (in 1917-18).
THE TRUST-BUSTER
If anything was more scandalous and hateful to the average U.S. citizen at this time than the monstrous power of the Rockefeller Standard Oil Co., it was the emergence of the U.S. Steel Co., organized by the J.P. Morgan plunder gang. This company had a virtual monopoly of the steel business. By buying up a number of smaller steel companies along with the huge plants built by Andrew Carnegie, the Morgan banks became steel producers as well as railroad operators, farm machinery makers and utility kings.
Much more than Standard Oil, the steel company specialized in "watered stock"--that is, selling twice as much stock as the company was worth. And of course it was a big barrier to any other steel company starting up in the "free market."
Nowadays people hardly notice the phenomenon of banking interests in industry. The Morgans and DuPonts started General Motors; the Rockefeller banks started RCA (and its subsidiary NBC); they also established IBM and several other of the biggest super-corporations. Practically no sizable corporation these days just evolves from a small operation to a large one without the intervention of at least one big bank. But this was quite new in Roosevelt's time and highly suspect.
And of course, in addition to the monstrous inequality involved--which prevented "small" business from breathing--there was the outright corruption and the fleecing of the middle class that accompanied this process at the beginning. The stock market played a big role in all this.
Everything cried out for regulation. The biggest capitalists themselves needed it--in self-defense against the newer predators who were more than ready to do to them what they had done to others. The great masses were refusing to accept the abysmal wages and terrible conditions of labor that had been imposed upon them by this new development.
Roosevelt came on the scene with a burst of energy, declaiming against the injustices of the new life, although without proposing more than the most elementary legislation to correct them. He was attacked for this in the conservative press. And this made him all the more popular with the masses.
A rather significant note about all this is the fact that this Roosevelt was a Republican. Whatever the feelings of the Republican moguls of Wall Street, he convinced a very large part of his party that Wall Street could be controlled by the Republicans. His distant cousin Franklin Delano Roosevelt, the Democrat, would operate more or less the same way--in a bigger crisis for the system, to be sure--to create the impression that only the Democrats could defend the working people and save society.
At the same time as the emergence of Theodore Roosevelt as a "progressive," there also emerged a group of so-called "insurgent" Republican senators who by and large accepted Roosevelt's leadership. Together with a number of Democratic senators, they began to pass much of the Roosevelt program.
GUNS AND BUTTER
None other than William Jennings Bryan himself was partially won over by Roosevelt's demagogy. Roosevelt came out for several of the very measures that Bryan (who, you remember, had once been Roosevelt's candidate for the firing squad), had been fighting for. How could TR be faulted for that?
The fact is that he was the first of the big politicians to advocate guns AND butter. He saw that imperialism must be accompanied by concessions to the masses in order to be stable and self-perpetuating.
Having made many a speech against the "malefactors of great wealth" and tweaked the noses of some of his own wealthy friends in business, Roosevelt was understandably worried about where the campaign funds would come from to conduct his re-election campaign in 1904.
The big corporations hardly blinked. They came through with much better contributions than they did for the Democrats, who ran a quite conservative slate headed by Judge Alton B. Parker of New York.
The Democratic leaders thought they could ride the anti-Roosevelt sentiment among the most conservative tycoons and play on their worries about his unpredictability. But they were wrong.
THE MONEY BEHIND HIM IN 1904
J. Ogden Armour, most prominent of the super-rich Chicago meat packers, said: "We are going to support Roosevelt most emphatically." Andrew Carnegie, most famous of the money makers, declared: "I hope Roosevelt will win. I am convinced that Republican rule is best for the country." And they accordingly backed him with heavy contributions.
According to Ferdinand Lundberg's "America's 60 Families," the New York Life Insurance Co., which was going through an investigation for malfeasance and corruption, donated $48,000 to the Republican National Committee. The Mutual and the Equitable insurance companies gave a similar amount. E.H. Harriman, the railroad king, later admitted to donating $50,000 and collecting $200,000 more from his rich colleagues. J.P. Morgan testified that he had given $150,000 in cash, while E.T. Stotesbury, a Morgan partner in Philadelphia, gave slightly more than $165,000.
THE VIRTUOUS REFUSAL
Rockefeller's Standard Oil Corp. gave a check for $100,000, which Roosevelt declined in a show of virtue. But Rockefeller was so unpopular by this time that the money would have been far outweighed by the loss of votes once it was made public.
Judge Parker was too conservative and too much impressed with big money himself to make much out of Roosevelt's dependence on Wall Street. But Joseph Pulitzer, editor of the Democratic New York World, had no such inhibitions. He published a front-page editorial over his name which put Roosevelt on the spot for these donations. Roosevelt's campaign manager was Secretary of the Treasury George B. Cortelyou, who was a leading reformer of the day. He is mentioned prominently in the editorial.
Pulitzer posed a series of questions to Roosevelt. Didn't the corporations that were
"pouring money into your campaign chest assume that they were buying protection? It makes little difference how guarded or explicit Mr. Cortelyou's promises may be. Supposing, Mr. President, even at this late day you were to give the country a little of that real publicity you once favored by telling it:1. How much the beef trust contributed to Mr.Cortelyou?
2. How much the paper trust contributed to Mr.Cortelyou?
3. How much has the coal trust contributed to Mr.Cortelyou?
4. How much has the sugar trust contributed to Mr.Cortelyou?
5. How much has the oil trust contributed to Mr.Cortelyou?
6. How much has the tobacco trust contributed to Mr.Cortelyou?
7. How much has the steel trust contributed to Mr.Cortelyou?
8. How much have the national banks contributed to Mr.Cortelyou?
9. How much has the insurance trust contributed to Mr.Cortelyou?
10. How much have the great railroads contributed to Mr.Cortelyou?"(Quoted in Henry F. Pringle, "Theodore Roosevelt," Harcourt Brace, 1956, pp. 249-50)
This rather devastating editorial--with appropriate colored ink and judicious use of capital letters--was never adequately answered. By various tricks, Roosevelt was actually able to turn it around to his own advantage.
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