the president’s financial woes — 7/07/14

Delanceyplace.com is a brief daily email with an excerpt or quote we view as interesting or noteworthy, offered with commentary to provide context.  There is no theme, except that most excerpts will come from a non-fiction work, mainly works of history, are occasionally controversial, and we hope will have a more universal relevance than simply the subject of the book from which they came. 
 
Today’s selection — from William McKinley by Kevin Phillips. In 1893, Ohio governor and Republican presidential hopeful William McKinley got into deep financial trouble. It was so bad that his plan was to resign and return to his law practice, but his political friends bailed him out instead. Though his Democratic opponents used this episode against him, the harm was less than it might have been — he received some sympathy because his distress came during one of the worst crises in U.S. history and because he himself had notably helped others in need earlier in his career:
 
“The great depression of 1893 to 1897, a political prop first to [William] McKinley’s rise to the presidency and then, through its timely finish, to his success in office, was one of the two or three deepest in U.S. history. Overextended railroads, weighed down by watered stocks and bonds, led the crash. Banks and farm prices followed. Farm destitution and general unemployment swelled enough that in 1893, the Populist governor of Kansas, Lorenzo Lewelling, issued his famous Tramp Circular, likening the jobless men on the roads to the social unrest of Tudor England and prerevolutionary France. …

“Ironically, [McKinley] had to survive his own brief brush with the economic downturn. He had endorsed notes for an old friend and schoolmate, Robert Walker, in the amount — or so McKinley thought — of some $17,000. Already successful, Walker was starting a tin-plate business. When he went bankrupt in 1893, supposedly with a liability of $25,000 or so, McKinley cut short a trip and returned to Ohio. His plan, he told assembled friends like Mark Hanna, William R. Day, Herman Kohlsaat, and banker Myron Herrick (himself later governor), was to resign the governorship and resume the practice of law. Within a day or two, as banks were contacted by his friends, McKinley’s obligation turned out to rise to $60,000 and finally $130,000 ($3.3 million in today’s dollars).

“Mrs. McKinley’s $70,000 estate from her father was in her name and not reachable, but she insisted on pledging it to help. Hanna, making the arrangements, allowed her to deed it to him in escrow ‘to be used if needed.’ The governor also insisted on turning over his properties to trustees. Convinced not to resign, for the moment, he rejected the suggestion of raising funds through a public subscription. He accepted the services of his friends as trustees in consolidating the debt, but told them that he expected to pay it himself. Instead, they raised the money from private contributors, mostly in Cleveland, Pittsburgh, and Chicago, and paid off the cosigned notes so that McKinley — by now, the probable next president — did not need to go back to practicing law. …

 
“In 1893, this did not do the damage it might have in another year. The public was sympathetic. Voluntary public offerings received at the governor’s office alone exceeded the $130,000 needed, although they were all returned. During that autumn’s gubernatorial campaign, the miners McKinley had defended without charge in 1876 came to see him; they wanted to help by paying the money he had earlier refused. Here is biographer Leech’s conclusion:
 
His trouble had awakened strong sympathy, not only for a kindly man whose trust had been betrayed, but for an honest politician who had not used public office for personal gain. The whole circumstance of McKinley’s bankruptcy and the liberality of his friends became, as the Democratic Brooklyn Eagle later commented, ‘a matter of hearthstone pleasure around the land.’ “
 
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