The Great Wall Street Scandal of 1905
Busted, Teddy!
Let’s cut Teddy Roosevelt down to size, subscriber,
And explore a very juicy scandal from 1905. As it turns out, our beloved 26th president may not have been such a “trustbuster” after all…
You can also watch on Instagram here. And ICYMI here’s last week’s ep on the US decision to occupy the Philippines.
This week’s story comes from We, the Corporations, by Adam Winkler; How to Hide an Empire, by Daniel Immerwahr; and Stamped From the Beginning, by Ibram Kendi.
Next time on Skipped History…
We investigate how one of Teddy’s descendants partnered with the Dulles Brothers to launch yet another coup, this time in Iran. Gotta love those belligerent political families! (Kind of.)
Next week, paying subscribers will receive behind-the-scenes content and a little more info on the Republican operative who turned 1896 into then the most expensive election in US history. You may or may not be surprised to learn that he was a high school classmate of oil magnate John D. Rockefeller.
Curious? Sign up below! Otherwise, see you in two weeks on our journey to Iran.
Cheers,
Ben
This week’s transcript
Hello, I’m Ben Tumin and welcome to Skipped History. Today’s story is about Teddy Roosevelt and the Great Wall Street Scandal of 1905. I read about it in We, the Corporations, by Adam Winkler, How to Hide an Empire, by Daniel Immerwahr, and Stamped From the Beginning, by Ibram Kendi.
Teddy Roosevelt is one of the most celebrated presidents in US history. From a young age, students learn in textbooks that he was a “Rough Rider” and trustbuster who “took on industry.” As late as 2017, historians polled by CSPAN ranked Teddy as the fourth-best president ever, which explains why Blake Lively posted this picture of him on Instagram with the caption “my new husband.” Well, either that or Blake thought soiling her clothes while exhuming Teddy’s corpse would finally give her a good enough excuse to tell the Sisterhood of the Traveling Pants that she was done wearing those jeans.
Either way, given Teddy’s inflated reputation it’s worth exhuming some of the less-discussed—and less flattering—aspects of his legacy. For example, in our last episode, we discussed how Filipinos declared war on the US after Teddy’s predecessor, William McKinley, reneged on promises to defend Filipino independence in 1898. Well, it turns out Teddy was similarly unconcerned with honesty: he insisted to the US public in 1902 that the War in the Philippines was over when, in reality, it went on for 11 more years, killing an estimated 750,000 Filipinos by 1904, and many more over the following years. And Teddy’s lack of concern for the truth was even more obvious when trying to protect his trust buster image during the Great Wall Street Scandal of 1905.
To understand the scandal, let’s first look at campaign finance laws or, rather, the lack thereof, in the 1890s. The norm then was for huge corporations to bribe politicians who’d pass legislation that would help maximize company profits. However, it wasn’t until 1896 that corporate titans like John D. Rockefeller used their money to finance elections. That year, corporations donated approximately $7 million, or over $200 million in 2021 dollars, to the Republican nominee, William McKinley. Similar sums were raised for McKinley’s reelection campaign in 1900, and even more for Teddy’s election in 1904. But this new trend of corporations buying elections remained largely off the public’s radar until a Versailles-themed costume ball.
The party’s host was James Hazen Hyde, the 29-year-old VP and son of the founder of The Equitable Life Insurance Co. “One of the wealthiest men in the US,” in January 1905, Hyde threw “the most gorgeous costume ball,” in a ballroom “decorated as was Versailles under Louis XVI—The Supper Room Arranged Like the Interior of a Tent,” which I guess was like a French camping aesthetic? I hope the freeze-dried croissants were magnifique. The estimated cost of the party was $200,000, or around $5 million today, and as someone leaked to the press, Hyde didn’t pay for the party himself. Rather, he expensed it, kinda like going out for a business lunch and saying, “I’ll have the house special. Make it a 3-bedroom!”
In response, the New York State Legislature launched an investigation of Equitable and the other major life insurance companies (life insurance was one of the biggest industries at the time). During investigative hearings, Charles Evans Hughes, the chief investigator, didn’t find much of interest until George Perkins took the stand. Perkins was the head of the New York Life Insurance Company, the right-hand man of JP Morgan, and a confidante of Teddy Roosevelt, and Hughes sought his testimony on a number of matters, but particularly on a mysterious expenditure in New York Life’s books of $48,000, or around $1,000,000 today.
On the first day of his testimony, Perkins requested a private audience with Hughes at the lunch break, where he told him, “You’re handling dynamite. That $48,000 was a contribution to President Roosevelt’s campaign fund.” Scandal! To up until that point, Teddy had carefully crafted an image as a populist trustbuster, declaring in 1901, “There is a widespread conviction in the minds of the American people that the great corporations known as trusts are... hurtful to the general welfare… in my judgment this conviction is right.” But here was a life insurance and giant bank executive telling Hughes that Teddy bear was in bed with the corporate giants. “You might want to think twice before submitting that to evidence,” Perkins warned.
So, the first thing Hughes did after the break was submit that into evidence and ask about the expenditure. Perkins came clean, and Hughes soon learned of other secret donations to Teddy from New York Life, as well as from each of the major life insurance companies. All of the sudden, Teddy’s earlier support of legislation that would’ve established a Federal Bureau of Insurance overseen by a superintendent handpicked by the life insurance companies seemed awfully suspicious.
How did Teddy respond to Perkins’ confession? Well, first, he denied, denied, denied, calling allegations of corruption “monstrous,” the contributions from corporations “not an issue,” and then after repeated refutations, pointed to “his own record of refutation,” similar to Shaggy getting caught red-handed and then saying, But as I sang several times, it wasn’t me. When the Shaggy defense didn’t work, and it was revealed that 70% of the money Teddy raised to win re-election in 1904 came from major corporations, Teddy pivoted to endorsing Hughes’ recommendation that political spending by corporations should be “expressly prohibited.” Within a year, the first campaign finance law, called the Tillman Act, was born.
Of course, to pass that legislation and repair his trust-busting image, Teddy had to make a deal with the devil: South Carolina Senator Ben Tillman (no relation to me, Ben Tumin), who after Teddy had dinner with Booker T. Washington in 1901, lamented the meal would “necessitate... killing” a thousand Black people “before they will learn their place again.” In addition to being a vicious racist, Tillman was all in on limiting money in politics (hence the Tillman Act), because doing so would hurt Republicans like Teddy and help racist Democrats. In 1912, he achieved his goal when a fellow racist Democrat from South Carolina, Woodrow Wilson, was elected president. While in office, Wilson would, among other things, legitimize the Ku Klux Klan, whose ranks were swelled by soldiers who had just returned from killing thousands of people of color in the protracted war in the Philippines.
Now, I’m not saying we can blame Teddy for the revival of the KKK. It’s possible Wilson would’ve become president even if corporate money were still flowing during the 1912 elections. And there are lots of non-racist reasons to like campaign finance reform. But I am saying the trustbuster who partnered with a white supremacist to limit money in politics after getting busted taking money from trusts might not be marriage material; and that, as we’re beginning to see, you can’t totally divorce US activity abroad from subsequent affairs at home.
The best example of a foreign intervention coming home to roost might be the US’ 1953 operations in Iran, which were overseen by none other than Teddy’s grandson, Kermit. Tune in next time to learn more about that bit of Skipped History.
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