-Caveat Lector-
an excerpt from:
America�s Sixty Families
Ferdinand Lundberg
The Vanguard Press�1937 & 1938
The Citadel Press
New York, NY
578 pages Out-of-print
--[2]--
II
The untimely death of Harding on August 2, 1923, brought no change in
government policies. The merry game of plundering continued under Coolidge.
The first Teapot Dome revelations in 1924 acted as a slight deterrent upon
the process but, on the whole, no change was visible to the naked eye.
Coolidge's running mate in 1924 was Charles G. Dawes, Chicago banker and
Comptroller of the Currency under McKinley.
The nomination of Dawes preserved the general low tone and artistic
consistency of the Republican ticket. Dawes was a protege of Mark Hanna, and
this was not unknown; but in view of the fact that Davis, in the parlance of
the prize-fighting ring, was to "lay down," it 'made no difference what
weakling accompanied the incredible Coolidge. Dawes' chief claim to fame,
other than his ostensible authorship of the Dawes Plan of Reparation
Settlements, arose from his participation in the William E. Lorimer bank
scandal in Chicago before the war.
Lorimer had been elected United States Senator from Illinois in 1910 with the
help of a slush fund supplied by Edward Hines, wealthy lumber man. Because
Hines was at odds with the Republican faction dominated by the McCormicks,
the deal was exposed in the Chicago Tribune and Lorimer was refused his seat
by the Senate, most of whose members had arrived at their eminence over the
very road traveled by Lorimer.
Although a Republican political boss, Lorimer controlled a national bank in
Chicago which became involved in difficulties soon after the rejection of its
proprietor by the Senate. To avoid a Federal bank examination Lorimer decided
to have his national bank charter changed to a state charter. But to get a
state charter he had to prove to the State Auditor of Public Accounts that
the bank actually possessed $1,250,000 cash as claimed. Unfortunately,
Lorimer was even then insolvent. Dawes, head of the Central Trust Company
(which he had started after the turn of the century with money obtained from
his friend, Frank 0. Lowden), without informing his fellow officers or
directors, made out to Lorimer's bank a check for $1,250,000 with which
Lorimer was to deceive the State Auditor. As soon as a state charter had been
issued, the check was returned, uncashed. For his part in the deal Dawes was
soundly rebuked by the Supreme Court of Illinois. This court held Dawes'
Central Trust Company liable for $110,457-51 in the failure of Lorimer's
institution, paring down a liability set at $1,400,000 by the lower courts.
Although thousands of depositors lost money in the Lorimer crash, action
against Dawes went no further than the litigation cited, for Dawes was a
power in Illinois politics. Moreover, Dawes' bank did not satisfy the
judgment against it* until after Dawes' nomination for the vice-presidency in
1924.
The Democratic contender was John W. Davis, former Congressman and Solicitor
General, Harvey's predecessor in the London ambassadorship, and, above all,
attorney for J. P. Morgan and Company. Davis was chosen by the Democrats as a
compromise after a convention deadlock between the Ku Klux Klan, which backed
William G. McAdoo, and the Roman Catholic Church, which backed Alfred E.
Smith. Davis' running mate was Charles Bryan, brother of William Jennings
Bryan.
With Davis and Coolidge in the field, J. P. Morgan and Company had the
unprecedented distinction of controlling both candidates.
A third ticket was headed by Senator Robert M. LaFollette, with Burton K.
Wheeler of Montana, one of the active figures in exposing the Teapot Dome
swindle, as his running mate. LaFollette polled five million votes, the most
ever garnered by an independent candidate, but Coolidge, supported by a
mountain of money, won handily.
Behind the financial arrangements of the Coolidge campaign stood Dwight W.
Morrow. Thomas Fortune Ryan, as usual, took the lead for the Democrats. Prank
P. Walsh, attorney for the LaFollette committee, estimated total Republican
collections at $15,000,000 and, considering various special Senatorial
contests wherein private stakes were great, the aggregate may easily have
been around this figure. But the Republican National Committee collected only
$4,370,409 as far as a special Senate committee under William E. Borah could
determine. The Democratic National Committee spent only $903,908, for its
shadowboxer. The LaFollette campaign cost $221,937.
As in 1904 J. P. Morgan and Company in 1924 took the lead in scaring up
Republican contributions. E. T. Stotesbury collected $50,000 in Philadelphia;
Guy Emerson, now vice-president of the Bankers Trust Company, did most of the
collecting in New York, although George Murnane, vice-president of the New
York Trust Company (Morgan) collected $77,000. William Wrigley, James A.
Patten, William H. Woodin, and Frederick H. Prince each gave $25,000;
Eldridge R. Johnson, president of the Victor Talking Machine Company,
Mortimer L. Schiff, Arthur Curtiss James, and Payne Whitney each gave
$15,000; J. B. Duke and William Nelson Cromwell each gave $12,500; Julius
Fleischmann, Charles Hayden, J. Horace Harding, Andrew W. Mellon, Vincent
Astor, Julius Forstmann, John D. Rockefeller, Irenee du Pont, Ogden Mills,
Frank A. Munsey, Frank W. Stearns, Arthur W. Cutten, and Charles G. Dawes
each gave $10,000; Dwight W. Morrow, Thomas Cochran, Marshall Field, Richard
B. Mellon, Helen Clay Frick, Cornelius Vanderbilt, Alfred P. Sloan, Jr.,
Harvey S. Firestone, William H. Todd, Henry G. Huntington, Archer M.
Huntington, and Charles M. Schwab each gave $5,000. Smaller sums in varying
amounts were given by other figures of wealth who wanted a word to say in
government.
Thomas Fortune Ryan gave the Democrats $55,000, the largest single
contribution brought to light. Contributions Of $25,000 each were made by
Bernard M. Baruch and Jesse H. Jones, Texas banker and land promotor.[sic]
Henry Morgenthatu put Up $23,500. Thomas L. Chadbourne, Cuban sugar investor,
gave $20,000. Contributions of $10,000 each were made by Norman H. Davis,
banker and diplomat, Francis P. Garvan and S. D. Camden. Contributions Of
$5,000 each were made by Mrs. Jesse H. Jones, John D. Ryan, Percy S. Straus,
John W. Davis, Cleveland H. Dodge, Frank L. Polk, Allen Ward- well, Cyrus H.
McCormick, Charles R. Crane, and Jesse I. Straus.
Smaller contributions came from Ralph Pulitzer, F. B. Keech, Gerard Swope,
Edward A. Filene, Richard Crane, and various corporation executives.
A tangle of special interests, analysis shows, was concerned with financing
the campaign. Stotesbury, a leading spirit in the United Gas Improvement
Company of Philadelphia, was under indictment along with his company; the
United States Attorney General dismissed the indictment. More than a score of
officials of sugar companies that were under investigation by the United
States Tariff Commission contributed; textile men interested in a higher
tariff. made heavy donations; Charles Hayden, old partner of William Boyce
Thompson and special backer of Herbert Hoover, contributed $5,000 and was
currently resisting a government claim for a wartime overpayment of
$5,267,476 to the Wright-Martin Aircraft Company, of which he was a director.
The government soon afterward renounced this claim. Harry M. Blackmer,
chairman of the Midwest Refining Company, deeply involved in the Teapot Dome
scandal, made a sizable contribution, as did other Teapot Dome defendants.
Julius Fleischmann, yeast king, and many others, had pending huge tax claims
against the government. Beman G. Dawes, brother of the vice-presidential
candidate and president of the Pure Oil Company, gave $5,000; his wife gave
the same amount. The Pure Oil Company had a tax-refund claim pending and was
a defendant in a suit brought by the government, which charged a conspiracy
to control oil and gasoline prices in Ohio. The tax refund was granted, the
suit was quashed.
In other words, the old game of purchasing immunity was played. The chairman
of the Republican Ways and Means Committee, successor to Thompson, was Joseph
R. Grundy, president of the Pennsylvania Manufacturers' Association and one
of the Harding conspirators of 1920. Grundy on his own hook collected
$300,000 in Pennsylvania.
Harding's "Black Cabinet" had to be reconstituted before the election, but
Coolidge was afraid to make a move that would disturb the Republican machine.
Against great pressure he held off for some time asking Daugherty for his
resignation, and actually commended this arrant spoilsman and expressed
regret when he did resign. Coolidge also obtained the resignation of
Secretary Denby, who had acquiesced in the alienation of the naval oil
reserves. Hughes, his work done, resigned in 1925 to resume his Standard Oil
practice; he was replaced by Senator Frank B. Kellogg of Minnesota. There
were other new appointments, all dictated by local politicoes, but Mellon
remained in the Treasury, the central figure of the Republican regime; Hoover
remained in the Department of Commerce.
Reaction gripped the nation. As the result of extensive postwar plotting both
houses of Congress were under Wall Street control. William Boyce Thompson in
1922 had said, "The Senate must be controlled and there are Senators from
different states who must be looked after." "4 Thompson and Harvey had,
events in the Senate showed, wrought well. No bill of any tangible value to
persons without wealth was to be passed and signed by a President for many
years.
The outstanding new development of the Coolidge Administration was the rise
of Dwight W. Morrow to national prominence, giving J. P. Morgan and Company
virtually unchallenged jurisdiction over the White House for the first time
since 1908 During Harding's incumbency Morrow had been occupied with problems
of international finance. In 1921 he made an intensive study of French
finances with a view to floating a loan through J. P. Morgan and Company; in
the same year he reorganized the Cuban finances on a basis that led to the
establishment of the bloody Machado dictatorship and the equally bloody
revolt against it. In 1922 he was occupied with floating the Austrian
reconstruction loan. Through a misunderstanding, Morrow failed to obtain a
desired post on the Reparations Commission, but he succeeded in placing Owen
D. Young, head of the General Electric Company, and a nominal Democrat, in
his stead. S. Parker Gilbert was appointed Agent-General of Reparations upon
the recommendation of J. P. Morgan and Company, which recognized his able
services in working out the details of the tax-reduction program.
In 1925 Coolidge appointed Morrow to the Aviation Board; but in 1927 came
the most crucial appointment of all. Morrow was named Ambassador to Mexico.
This post, at the moment, was of vital in-terest to Wall Street and
Washington; it was, indeed, the most important ambassadorship in the entire
diplomatic service at the time, for relations with Mexico, where wealthy
Americans owned mineral property worth more than $1,000,000,000, had gone
from bad to worse since the first Wilson regime.
Despite close liaison with the overlords of wealth the State Department, its
embassy in Mexico City the personal gift of E. L. Doheny, had been unable to
obtain substantial concessions for the American millionaires. In 1919 the
Rockefellers, the Guggenheims, the Anaconda Copper Mining Company, and E. L.
Doheny took matters into their own hands by forming the Association for the
Protection of American Rights in Mexico. This organization unloosed wild
propaganda for intervention. Prodded by Senator Fall, a Senate committee sat
from August, 1918, to May, 1920, hearing about alleged mistreatment of
Americans in Mexico and thereby providing an official background for the
interventionist propaganda. Wilson, upon listening to representations from
Fall, agent in the Senate for the interventionists, reversed Lansing's
relatively conciliatory policy and in the closing phases of his term adopted
a strong tone toward Mexico. But he refused to accede to the open demands for
war.
Harding and Coolidge experimented with Wilson's earlier policy of bullying,
and in 1923 Coolidge recognized Obregon, who had ousted Carranza two years
before, and agreed to sell him munitions. But after apparent improvement,
relations again became very strained with the promulgation of the Mexican
land law by the Calles government in 1925. This law replaced perpetual tenure
of Mexican mineral and petroleum lands with fifty-year concessions, and so
intensified the conflict that in 1927 the Hearst newspapers, their proprietor
an owner of Mexican mineral lands, published a series of forgeries involving
liberal United States Senators in alleged Mexican radical intrigue and
corruption.
Morrow's appointment took effect at this crucial point. The former Morgan
partner went to Mexico with conciliatory intentions and succeeded in
obtaining a modification, satisfactory to the American interests, of the
Petroleum Law. Morrow remained in Mexico until informed during the Hoover
regime that he was to be a member of the United States delegation to the
London Naval Conference of 1930 which ended in a stalemate. At the same time
a movement got under way to make him United States Senator from New Jersey.
Coolidge, like Harding and unlike Theodore Roosevelt, exercised little
discretion in catering to organized wealth. He had appointed Harlan F. Stone,
Dean of the Columbia Law School and a student at Amherst with Morrow and
himself, Attorney General to succeed Daugherty; but when Stone prepared to
file an antitrust suit against Mellon's Aluminum Company, he was abruptly
elevated to the Supreme Court; the suit was, of course, not brought.
Charles Beecher Warren, for many years an expert in the formation of trusts,
was named to succeed- Stone as Attorney General; but the Senate could not
digest this appointment. Coolidge then appointed John G. Sargent, of Vermont,
whose imagination did not encompass suits against great companies. An
official of the Pennsylvania Railroad was appointed by Coolidge to the
Interstate Commerce Commission to sit in judgment upon the railroads. A
prominent sugar lobbyist, Edgar Brossard, who was primarily interested in
sugar tariffs, was made a member of the Tariff Commission, which had been
transformed into an agency for increasing tariffs instead of reducing them.
The Tariff Commission had been empowered by the Fordney-McCumber Act to bring
about tariff reforms; on its recommendation the President could raise or
lower rates by as much as fifty per cent. In six years Coolidge reduced rates
on paintbrush handles, phenol and cresylic acid, millfeed, and bobwhite
quail, and increased rates to the maximum on eighteen items, including iron
ore (Morgan). In 1928, Edward P. Costigan, later Senator from Colorado,
resigned from the Tariff Commission, charging that Coolidge had packed the
body and thwarted it-in its work.
All effective veterans' legislation was vetoed by Coolidge as by Harding;
whatever passed overrode the presidential veto. Both Coolidge and Harding
temporized with the pressing farm problem by killing effective bills and
approving only joker legislation. Coolidge sabotaged all efforts of liberal
Senators to regulate the rampant electric power industry. In short, what-ever
brought benefit to the nonwealthy was scotched-, whatever benefited the
wealthy was passed. And the full meaning of it all becomes clear only in the
light of the roles Morrow and Harvey, invisible behind the scenes, played as
Coolidge's closest advisers. It was no wonder that William Boyce Thompson
could say in 1927 that he would be content to have Coolidge for king and
Mellon for queen to the end of his days.
Coolidge, a faithful servant, received his pay. Upon his retirement he was
elected a director of the New York Life Insurance Company (Morgan) and was
made a contributor at the rate of $1 a word to the New York Herald Tribune (Mi
lls-Reid) even though what he wrote usually failed to make sense. In 1933 the
Senate Banking and Currency Committee brought out that J. P. Morgan and
Company in 1929 had Coolidge on its "favor" list. Coolidge was one of those
permitted to buy stock J far below the market price, the $30,000 difference
between the market price and the purchase price representing a flat gift from
J. P. Morgan and Company.
pps. 169-176
--[cont]--
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
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