When the law was finally passed in June 1938, Arthur Krock praised it lavishly in The New York Times as “the product of unremitting and intelligent toil by legislators of ability and character intent upon working out difficult national problems.” He singled out my father’s efforts as especially praiseworthy, noting his hundreds of hours of listening to witnesses from dozens of different interested groups, from the Reconstruction Finance Corporation to the Airline Pilots Association. Only a handful of experts also appreciated the exquisite care with which Dad had drafted the bill, using terminology already defined by the Supreme Court in its interpretations of the Interstate Commerce Act. An immense amount of time-consuming litigation was thus saved, in advance. Some members of the airline industry were almost stunned by the high quality of the legislation. Edgar Gorrell, president of the Air Transport Association, said: “. . . Now and then democracy takes a great stride forward to catch up with the times.”
While my father was writing this law and defending it in the Senate, he was simultaneously conducting hearings on the chaotic state of the nation’s railroads. President Roosevelt had called the railroads “the most serious problem of the administration,” in 1937. The statistics of their catastrophic decline made this an understatement. In 1926, American railroads employed 1.78 million men with a payroll of $2.95 billion. By 1938, 840,000 of these men were out of work and a staggering 10,000 miles of track had been abandoned, with destructive effects on business in uncounted small towns and medium-sized cities. As Dad tried to find out why a business that was handling 75 percent of the nation’s traffic (in 1926) could now be tottering into bankruptcy, he became more and more convinced the answer lay in the manipulations of a small group of greedy men, largely operating in and around Wall Street.
These were not conclusions based on preconceived radical theories. They were reached after endless hours of hearings, and even longer hours of struggling through immensely complex reports on railroads and the holding companies that owned them and played games with their stock. Scarcely a month went by without a new struggle with another group of recalcitrant railroad or investment bank executives. Some railroads tried to refuse Dad’s committee access to their books. Others actually presented phony records, under the imprint of some of the nation’s biggest accounting firms.
I still remember the grim pleasure my father expressed over a victory he won in an exchange with George O. May, senior partner of Price Waterhouse and Company. In certifying the books of the Missouri Pacific, Price Waterhouse had allowed the company to carry as assets a debt of $3.2 million. This gambit enabled the railroad’s executives to misrepresent its financial condition to the public, when it was on the brink of receivership. May haughtily informed Dad the assets statement was “misleading in effect but not misleading in intent.” My father angrily declared it was misleading in both respects and reported the matter to the Interstate Commerce Commission. This body, whose word is law in railroad matters, immediately ordered the account transferred from special deposits on the assets side to “unadjusted debt.”
“That is the way it ought to have been handled in the first place,” Dad snapped.
“That is right,” May replied.
It was my father’s investigation of the Missouri Pacific that really enraged him and convinced him for all time that “the wrecking crew,” as he called Wall Street’s financiers, were a special interest group constantly ready to sacrifice the welfare of millions for the profits of a few. The Missouri Pacific was a huge railroad system with no less than seventy-nine subsidiaries under its control. In 1930, the Alleghany Corporation, a holding company formed by some Cleveland manipulators using money supplied by J. P. Morgan, acquired control of the entire eighty-company system. The holding company bosses then proceeded to loot the railroad. They declared dividends out of capital instead of earnings, fired thousands of workers to cut the payroll, reduced maintenance, and abandoned badly needed improvements in the road and equipment. In a few short years, the Missouri Pacific was in bankruptcy.
Digging into this mess required considerable political courage for a senator from Missouri. To obtain permission to buy the Missouri Pacific, the Alleghany Corporation had twisted arms and cajoled Democrats and Republicans in the state legislature, as well as almost every other public official in Missouri. One state senator received $1,000 “covering services in the Alleghany-Missouri Pacific matter” which he was never able to satisfactorily explain.
Once more Senator Truman was deluged by telegrams and telephone calls from powerful politicians and businessmen in his home state, urging him to abandon the investigation or at least make it as superficial as possible. My father called Max Lowenthal, general counsel for the investigating committee, and said, “I don’t want you to ease up on anything. You treat this investigation just as you do all the others.” Not long afterward, he received an anonymous note, warning him he would die on the Senate floor. Over the next several weeks, the Senate police had extra men on duty in the gallery because, from their analysis of the note, they feared the would-be assassin would try to shoot Dad from there.
Max Lowenthal told a St. Louis Post-Dispatch reporter he did not know a half-dozen senators who could have resisted the kind of political pressure Dad withstood.
Lowenthal was a disciple of Louis D. Brandeis, the great liberal dissenter on the Supreme Court. To be invited to the Justice’s apartment on California Street was regarded by many New Dealers in Washington during these days as a great honor. To be invited back was an even greater honor. My father was invited back again and again because, almost on sight, both men recognized they were spiritual brothers. Brandeis had denounced “the curse of bigness” and inveighed against the manipulation of American business to line the pockets of a few financiers. But simply sharing these beliefs was not enough to win a coveted membership in the Brandeis circle. You had to share his patience, skill, and determination to unravel the intricate frauds being perpetrated on the people by the Wall Street bankers. For hours at a time, while other politicians stood watching enviously, Justice Brandeis would talk with Dad about his committee’s latest discoveries in railroad wrecking and looting.
Dad agreed wholeheartedly with Justice Brandeis’s contention that a company’s size should be limited by one man’s capacity. Dad proved this point conclusively in his investigation of the Alleghany Corporation. Questioning the man who had bought it, George A. Ball, my father was able to show that Ball did not even know the names of several major companies, employing thousands of workers, which he theoretically controlled.
Almost two and a half years after he came to the Senate, Dad was ready to make some major speeches. They were in a style that should have made those with good memories less surprised by his 1948 “give ‘em hell” performance.
“Some of the country’s greatest railroads have been deliberately looted by their financial agents,” he said. Speaking of the Rock Island Railroad, he reminded his fellow senators:
. . . The first railroad robbery was committed on the Rock Island back in 1873 just east of Council Bluffs, Iowa. The man who committed that robbery used a gun and a horse and got up early in the morning. He and his gang took a chance on being killed and eventually most were. That railroad robber’s name was Jesse James. The same Jesse James held up the Missouri Pacific in 1876 and took the paltry sum of $17,000 from the express car. About thirty years after the Council Bluffs holdup, the Rock Island went through a looting by some gentlemen known as the tin plate millionaires. They used no guns, but they ruined the railroad and got away with $70,000,000 or more. They did it by means of holding companies. Senators can see what pikers James and his crowd were alongside of some real artists.
Dad bluntly accused the Alleghany Corporation of the same kind of railroad robbery.
Later that year, in another speech on the same topic, he inveighed against the curse of bigness and the impersonal financial racketeering it encouraged: “I believe the country would be better off if we did not have 60 percen
t of the assets of all insurance companies concentrated in four companies. I believe that a thousand insurance companies with $4 million each in assets would be just a thousand times better for the country than the Metropolitan Life with $4 billion in assets. The average human brain is not built to deal with such astronomical figures.
Above all, he was worried by the erosion of the nation’s moral sense, by the awe and brutality engendered by over-concentrated financial power: “One of the difficulties as I see it is that we worship money instead of honor. A billionaire in our estimation is much greater in the eyes of the people than the public servant who works for the public interest. It makes no difference if the billionaire rode to wealth on the sweat of little children and the blood of underpaid labor. . . .”
Reading these forgotten words, perhaps readers can appreciate a little more the sincerity of the President who fought for his reelection in 1948 against a Congress that was trying to give the country back to the control of these same special interests.
At the same time, my father made it clear again and again, during the hearings and in his speeches, that he was not against all businessmen. He went out of his way to praise the courage of many of the executives of the operating railroads, who fought to maintain efficiency and quality while the financial blood was being sucked out of their companies. His answer to the abuses of the Wall Street manipulators was not government ownership, either. More than a few New Deal senators were inclined to see this as the only solution. But Dad insisted more stringent regulation and severe restrictions on the size of the holding companies would correct most of the abuses.
My father also believed the time had come for the big financiers on Wall Street to realize they had better start thinking and acting in the public interest: “It is a pity that Wall Street with its ability to control all the wealth of the nation and to hire the best brains of the country has not produced some statesmen, some men who could see the dangers of bigness and of the concentration of the control of wealth. Instead of working to meet the situation, they are still employing the best law brains to serve greed and selfish interest.”
He also sounded a note he was to repeat again and again in later years, in his struggle to attract talented men into the government: “The ordinary government mine-run bureaucratic lawyer is no more a match for the amiable gentlemen who represent the great railroads, insurance companies and Wall Street bankers than the ordinary lamb is a match for the butcher.”
His distaste for the way the railroads were being run inclined him to side emphatically with railroad workers in their struggle against their employers. In 1938, the big operating companies asked for the right to cut wages by 15 percent. My father went before a fact-finding board that was conducting hearings and blasted the proposal. He told the board that, as a result of his investigations, he was convinced the railroads were wasting approximately $667,000 a day: “Banker management should not be permitted to sacrifice railroad labor for their inability to control a situation of their own creation.” For the first time, but not the last, union leaders awoke to Harry S. Truman’s existence. While other senators opposed the wage cut, no one else could speak with Dad’s authority on railroads and their mismanagement.
One amusing by-product of my father’s growing fame as a corporate taskmaster was a public confusion between him and Thurman Arnold, the trust-busting assistant attorney general and author of several scathing books on corporate mores, most notably The Folklore of Capitalism. Thurman and Truman were similar enough to get even the Washington Star confused. The paper once ran a picture of Dad and identified him as Arnold. There was a constant intermingling of their mail. Since they shared a common philosophy, the two of them decided it was funny and became good friends.
Commenting on one mail mixup, Arnold wrote: “I can’t figure out from the enclosed letter whether this guy thinks I am you or whether he thinks you are me. What is your opinion?”
Dad replied: “I guess he thinks I am you; at any rate, in this instance you are me, or vice versa. From time to time I receive letters addressed to you or to a ‘combination’ of us. . . . Frankly, I think the writers are giving me entirely too much credit. . . .”
While he was carving out his own niche as an investigator in the complicated world of business and finance, my father also participated vigorously in the turbulent political battles of the middle and late 30s. Most of the time, he supported the Roosevelt Administration. Ironically, looking back on his reward for this loyalty in later years, he said: “I was one of those in the Senate who was called a rubber-stamp senator. Do you know what a rubber-stamp congressman or senator is? He is a man who is elected on the platform of the party, and who tries to carry out that platform in cooperation with the President of the United States - that’s all he is.”
These words were spoken by a President who valued every so-called rubber-stamp congressman he could find.
My father was never an unthinking rubber stamp. He supported the administration in perhaps the greatest political brawl of the decade - Franklin D. Roosevelt’s attempt to alter the balance of the Supreme Court by obtaining the power to appoint additional justices. This was a battle that almost tore the Democratic Party apart. Some of my father’s best friends in the Senate were on the other side. Burton K. Wheeler was, in fact, the leader of the opposition, and Vice President Garner was a less vocal but perhaps more powerful opponent of the plan. Bennett Clark was another fierce foe of it. But Dad’s investigation of big business had led him to conclude that the tycoons and financiers dominated not only state governments and federal regulatory commissions but the Supreme Court as well. He pointed out there was nothing sacred about a nine-man court. The number of justices had varied from five to ten throughout the nation’s history. “The cry,” he said, “is that the President wants to pack the Court. . . . I say the Court is packed now and has been for fifty years against progressive legislation.”
My father never forgot the lessons he learned from that fight. It was a monumental example of how a President should not deal with Congress. Roosevelt had let the “blizzard of 1936” - his tremendous landslide victory - deceive him into thinking he could get anything he wanted from Congress. With seventy-five Democrats and seventeen Republicans in the Senate and the count in the House 334 to eighty-nine in his favor, it would seem to have been a logical conclusion - for anyone who relied on mere statistics. But human beings are not statistics, and there were many Democratic senators who were already having severe doubts about the ultimate goals of the New Deal. Some of the Senate’s greatest liberals, such as George W. Norris, denounced the President’s Supreme Court plan with as much fervor as did the conservatives. From February to July the battle raged and only ended when the exhausted Senate majority leader, Joe Robinson, collapsed and died of a heart attack. More than anything else, this Senate revolt forged the alliance between conservative Democrats and Republicans that was to torment Dad and future Democratic Presidents.
Disaster threatened the Democratic program. On the long train ride down to Arkansas for Joe Robinson’s funeral, the senators discussed only one topic - who would be the next majority leader? On this choice depended to a large extent the President’s ability to lead Congress. From the viewpoint of long service to the party and to Roosevelt, the choice of most senators was Pat Harrison of Mississippi. Everyone knew Roosevelt owed Senator Harrison a debt of gratitude for swinging the Mississippi delegation to him at a crucial moment at the 1932 convention. Jim Farley says he told Roosevelt, “If it wasn’t for Pat Harrison, you might not be President.”
But Roosevelt feared that Senator Harrison, a Southern conservative, would not support the New Deal with sufficient enthusiasm. So the President swung the weight of his approval behind Alben Barkley of Kentucky. It immediately became obvious that it would be a very close vote. My father liked Harrison personally, and before Roosevelt had decided to attempt this unprecedented intervention in the affairs of the Senate, Dad had promised the genial Mississippi senator his vot
e. Jim Farley recalls the intense pressure Roosevelt exerted to swing senators into line. His arm-twisting even extended to Farley. But he had given the senators his word he would not intervene in the battle. He adamantly refused to yield to the President’s plea to call various political bosses around the country and ask them to browbeat individual senators. “I have no doubt that calls were made, and my name used,” Farley says. In fact, he recalls being visited by a distraught Senator William H. Dieterich of Illinois who told him he had just received a phone call from Ed Kelly, the boss of Chicago, ordering him to vote for Barkley or forget about reelection. Farley urged Dieterich to defy Kelly, but he shook his head and switched his vote.
My father got a similar call from Tom Pendergast. Tom said the White House had phoned him and asked him to order Senator Truman into the Barkley camp.
“I just can’t do it, Tom, and I’ll tell you why,” Dad said. “I’ve given my word to Pat Harrison.”
Pendergast assured Dad he had no personal interest in the conflict. “I told them that if you were committed you would stand by your commitment, because you are a contrary Missourian.”
To my father’s indignation, a Washington newspaper printed a story claiming he had switched to Barkley on Tom Pendergast’s orders. When senators vote for majority leader or whip, they do so by secret ballot. But Dad was so incensed over this smear that just before he handed in his ballot, he turned to Senator Clyde L. Herring of Iowa and showed him the ballot, which he had emphatically marked for Harrison. The vote was excruciatingly close. Senator Barkley won by a single ballot - thirty-eight to thirty-seven. Senator Dieterich’s capitulation to Boss Kelly made the difference. When a Kansas City Star reporter asked my father if he had been the crucial switched vote, Dad angrily told him to go see Senator Herring and he would tell him how the junior senator from Missouri had voted.
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