Commentary: The Demon Moguls of Wall Street

By Robert Sanchez

Here’s a trivia question for you: What do the names mentioned in the following paragraph have in common, other than being in boldfaced type?

Henry Flagler built a railroad and a string of hotels down Florida’s Atlantic coast, ultimately contributing to the economic foundation of modern day Miami. Henry Plant built a railroad that linked Tampa to the rest of the nation at an important juncture in that city’s history. Vanderbilt, Stanford, and Duke are among America’s most prestigious universities. Philanthropic foundations bear the names of Andrew Carnegie and John D. Rockefeller.  The names of the late Andrew Mellon, J.P. Morgan, and Charles M. Schwab are still associated with the world of finance.

So, the question recurs: What do these names have in common? A clue: All are among the 28 names on an alphabetical list ranging from John Jacob Astor to Charles Tyson Yerkes. Hints: It could be a list of America’s most significant business pioneers, a list of our most noteworthy philanthropists, or a list of successful industrialists and bankers. Is it any of those things?

No, of course not. Instead, these names and 18 others are all on a list of successful American businessmen whom left-leaning politicians, radical labor leaders, and Marxist-influenced academics have dubbed “robber barons.” In muckraking books and media broadsides, these wealthy Americans were pilloried for their financial success. The critics seemed to operate on the theory that if these tycoons were rich, then it must not be because they had shown great vision, initiative, persistence, and hard work but instead it must be because they had somehow “robbed” other Americans of what was rightfully theirs.

The term “robber barons” emerged late in the 19th Century, but these kinds of beliefs the term reflected were not new in public discourse. Indeed, from the time of Florida’s territorial Governor (and later President) Andrew Jackson right up to the present, Americans have been subjected to a lot of populist “root for the underdog” political rhetoric. Common were tales of persons who were born in a log cabin or in some other humble circumstance but who nonetheless went on to achieve great success in business, politics, and/or the military. The protagonists in these tales were widely admired. Horatio Alger even wrote books about them, and the rags-to-riches theme continues even today with examples such as the current hit Broadway musical honoring the born-out-of-wedlock Alexander Hamilton.


Henry Flagler and Mayor Joseph Fogarty at the opening of the Florida East Coast Railway’s Key West Extension, Jan. 22, 1912. Courtesy of Florida Keys — Public Libraries.

In contrast, in a different theme persisting in much of the political rhetoric and in many of the newspaper cartoons throughout our history, members of the wealthy “elite” were often portrayed and disparaged as snooty, aloof, and uncaring. Granted, they were not blameless for this image. Indeed, some of the tycoons, especially the nouveau riche among them, fed the negative stereotypes by flaunting of their riches, sometimes in embarrassingly crude and tasteless displays. Moreover, in the realm of commerce, some were credibly accused of using ruthless tactics to rub out their competitors and suppress unrest among employees who were attempting to organize to protest low wages and brutal working conditions during the early years of the labor movement. Critics also charged that the moguls often got away with these tactics thanks to an early form of “crony capitalism,” which then as now created a cozy alliance between the would-be monopolists and various federal and state politicians.

Although the populist undercurrent had persisted in American politics through much of the 19th Century, it erupted with full force during that century’s final two decades. That’s when some of the negative side effects amid the many benefits of the industrial revolution began to draw attention.

The criticism of the rich and powerful continued and even intensified during the so-called “progressive era” of the early 20th Century. Not even our nation’s founders could escape criticism during that misguided era. For instance, 1913 saw the publication of historian Charles A. Beard’s deeply flawed-but-influential book titled An Economic Interpretation of the Constitution of the United States. In this book the author argues that James Madison and the others who produced the U.S. Constitution weren’t as they were typically portrayed — principled patriots bent on leaving a legacy of liberty for future generations. Instead, Beard argued, they were actually wealthy elitists determined to produce a Constitution designed to protect their own selfish interests.

At a time when even our nation’s Founding Fathers were under this kind of attack, it’s no wonder that some of America’s most prominent business leaders, long accustomed to being referred to as praiseworthy “captains of industry,” were suddenly being denounced as “malefactors of great wealth.”


Florida Gov. John W. Martin and John D. Rockefeller, Ormond Beach, Florida, ca. 1925. Courtesy of Florida Memory.

What was the targeted tycoons’ basic crime in the eyes of their leftist critics? Being rich when millions of other Americans were not rich. The proposed cure? Redistribute the wealth! And how should that be done? Karl Marx had an idea: “From each according to his ability, to each according to his needs,” a theory that is echoed in today’s burgeoning movement in support of a $15-an-hour minimum wage — $15 not because of the economic value of the employees’ work but because the employees are said to “need it.”

The rhetoric of redistribution faded a bit during the more prosperous phase of the “Roaring Twenties,” but it returned in spades during the Great Depression. In 1934, for instance, the basic economic thinking touted by the robber barons’ critics was summed up well in the famous “Share the Wealth” proposal put forth by the Louisiana’s demagogic U.S. Sen. Huey “the Kingfish” Long. He outlined his plan during a nationwide CBS Radio address that reportedly reached 23 million listeners. Speaking of the Great Depression and widespread poverty, Long said:

“It is not the difficulty of the problem which we have; it is the fact that the rich people of this country—and by rich people I mean the super-rich—will not allow us to solve the problems, or rather the one little problem that is afflicting this country, because in order to cure all of our woes, it is necessary to scale down the big fortunes, that we may scatter the wealth to be shared by all of the people.”


Senator Huey P. Long giving a speech in 1935. Courtesy of Library of Congress.

What Long said he hoped to achieve — redistributing wealth in order “to cure all of our woes — was encapsulated in his political slogan: “Every Man a King.” Alas, in the year following that speech and only a month after he had audaciously announced that he intended to run for President in 1936, the political career of the Kingfish was cut short by an act of regicide: He was assassinated in a hallway in Louisiana’s Capitol.

It was an unsettling episode in a turbulent period that featured many of them. For instance, in yet another symptom of the efforts of the prairie populists and isolationists to find scapegoats to blame for the nation’s problems, they began to cast suspicion on the industries that had supplied the military with materiel during World War I. During the war, those companies had been commended for quickly responding to fill the needs of the U.S. military and our nation’s allies in Europe. But in 1934, the same year that Huey Long introduced his “Share the Wealth” plan and backed it by forming a nationwide network of “Share the Wealth” clubs with an estimated seven million members, the U.S. Senate commenced a lengthy investigation of “munitions makers” and “war profiteers.” Chaired by Sen. Gerald Nye, R-ND, the committee ultimately lent credence to the notion that America’s entry into World War I was partially orchestrated by industrialists who stood to make a profit from the guns, ammo, tanks, and other military vehicles they produced and by bankers who had loaned money to various European interests.

The investigation included a parade of witnesses accusing these businessmen of being war profiteers indifferent to the blood young Americans would shed in the trenches during that “war to end all wars.” To make matters worse in the eyes of the public, the businessmen whom the committee’s witnesses accused of profiteering stood in marked contrast to the participants in a painful episode that had occurred in Washington, D.C. in 1932 but was still seared into the public’s memory. Here’s how that episode was described in “The Bonus Army,” a brief article posted in 2000 by the useful website, EyeWitness to History.

“In 1924, a grateful Congress voted to give a bonus to World War I veterans – $1.25 for each day served overseas, $1.00 for each day served in the States. The catch was that payment would not be made until 1945. However, by 1932 the nation had slipped into the dark days of the Depression, and the unemployed veterans wanted their money immediately.

“In May of that year, some 15,000 veterans, many unemployed and destitute, descended on Washington, D.C. to demand immediate payment of their bonus. They proclaimed themselves the Bonus Expeditionary Force, but the public dubbed them the ‘Bonus Army.’ Raising ramshackle camps at various places around the city, they waited.

“The veterans made their largest camp at Anacostia Flats, across the river from the Capitol. Approximately 10,000 veterans, women and children lived in shelters built from materials dragged out of a junk pile nearby – old lumber, packing boxes and scrap tin covered with roofs of thatched straw….

“June 17 was described by a local newspaper as ‘the tensest day in the capital since the war.’ The Senate was voting on a bill already passed by the House to give the vets their bonus money immediately. By dusk, 10,000 marchers crowded the Capitol grounds expectantly awaiting the outcome. Walter Waters, leader of the Bonus Expeditionary Force, appeared with bad news. The Senate had defeated the bill by a vote of 62 to 18. The crowd reacted with stunned silence. ‘Sing America and go back to your billets,’ he commanded, and they did. A silent ‘Death March’ began in front of the Capitol and lasted until July 17, when Congress adjourned.

“A month later, on July 28, Attorney General Mitchell ordered the evacuation of the veterans from all government property. Entrusted with the job, the Washington police met with resistance, shots were fired, and two marchers were killed. Learning of the shooting, President Hoover ordered the army to clear out the veterans. Infantry and cavalry supported by six tanks were dispatched, with Chief of Staff General Douglas MacArthur in command. Major Dwight D. Eisenhower served as his liaison with Washington police, and Major George Patton led the cavalry.

“By 4:45 P.M. the troops were massed on Pennsylvania Avenue below the Capitol. Thousands of Civil Service employees spilled out of work and lined the streets to watch. The veterans, assuming that the military display was in their honor, cheered. Suddenly Patton’s troopers turned and charged. ‘Shame, Shame’ the spectators cried. Soldiers with fixed bayonets followed, hurling tear gas into the crowd.

“By nightfall the BEF had retreated across the Anacostia River, where Hoover ordered MacArthur to stop. Ignoring the command, the general led his infantry to the main camp. By early morning the 10,000 inhabitants were routed, and the camp was in flames. Two babies died, and nearby hospitals were overwhelmed with casualties. Eisenhower later wrote, ‘The whole scene was pitiful. The veterans were ragged, ill-fed, and felt themselves badly abused. To suddenly see the whole encampment going up in flames just added to the pity.’ “References: Bartlett, John Henry, The Bonus March and the New Deal (1937); Daniels, Roger, The Bonus March; an Episode of the Great Depression (1971).”

Millions of American moviegoers subsequently saw newsreels that captured the chaotic scenes of ragtag veterans being pursued while their camp was going up in flames. That deeply disturbing film footage was incorporated into a PBS documentary, The March of the Bonus Army.

Worse, the scenes of violence in our nation’s capital came atop widespread reports of labor strife in the United States and disturbing scenes from abroad, where unrest had set the stage for dictatorships to emerge.

There was even a form of terrorism abroad in the United States, as evidenced in the violent acts of self-proclaimed anarchists. The anarchists included a mentally deranged man named Giuseppe Zangara. On February 15, 1933 Zangara attempted to assassinate Franklin Delano Roosevelt in Miami’s Bayfront Park while the President-elect was there to make a short speech. Zangara’s bullets missed FDR but mortally wounded Chicago Mayor Anton Cermak, who had been standing nearby. Convicted of murder, Zangara  executed five weeks later.


President-elect Franklin Delano Roosevelt in Jacksonville, Florida, February 1933. Courtesy of Florida Memory.

So in one brief period Americans had witnessed the stock market crash of 1929 followed by the onset of the Great Depression, riots in the streets, an attempted assassination of FDR, and the rise of bellicose dictatorships abroad.

Moreover, throughout this period there was also an undercurrent of racial unrest as African Americans protested lynchings, discrimination, and poverty. Together, this combination of unsettling events and worrisome trends set the stage for Washington to react. FDR’s “brain trust” produced a plethora of new federal programs under the rubric of the “New Deal.”

There was little resistance. In the election of 1936, FDR had carried  46 of the 48 states — all except Maine and Vermont — garnering 61 percent of the popular vote and 523 of the 531 Electoral College votes. FDR’s party had also increased its majorities in Congress, with 75 of the 96 Senate seats and 334 of the 435 House seats.  (By the way, in the House, where the allocation of seats that year was based on the 1930 U.S. Census, 31 states had delegations larger than Florida, which at that time had only five seats.)

Fortunately for the rule of law, the U.S. Supreme Court — still dominated the long-serving conservatives whom FDR denounced as “nine old men”  — swatted down some of the worst legislative overreactions, including the National Industrial Recovery Act. A decade or so later, when the political tides had turned and the GOP had regained a foothold in Congress, another New Deal overreach was corrected. The Taft-Hartley Act, which passed into law in 1947 despite President Harry Truman’s veto,  corrected some of the worst excesses of 1935’s Wagner Act, which had decidedly tilted the labor-management playing field against employers.

Fast forward to the present. The tussle between business and labor continues even as the battlefield has shifted, with private sector unions weakened while public sector unions flourish and flout their political clout, especially in states where the union-backed laws make union membership mandatory for most government employees.

The war of words between left and right also continues apace, with the left denouncing Wall Street and demanding that something be done about “income inequality.” New York City’s Mayor Bill de Blasio is among the harshest critics of the income gap, even outlining a “13-point plan” to deal with the problem. Not clear from His Honor’s plan is how he would deal with a grievous example of income inequality in one of his boroughs, the Bronx. There, various employees of the same company, the New York Yankees, earn vastly different levels of compensation. Consider, for instance, Miami’s own Alex Rodriguez, a.k.a. “A-Rod.”  Under his 10-year, $275 million deal, his average salary is approximately $27.5 million a year, depending on various bonuses and incentives. That’s a great deal more than his employer pays the clubhouse attendants who ensure that the locker room is tidy and that the star athletes have clean towels. Yet Mayor de Blasio has failed to release details of any plan to deal with this gross example of income inequality.  Similarly, a suburban married couple named Clinton, with offices in Harlem, earned A-Rod-style money in the mid $20 millions. That’s a lot more than the pay of the New York Transit Authority personnel who stood by recently while the wife of this family attempted to use the subway system. Mayor de Blasio hasn’t explained how he’s going to fix that wage gap.

While he’s pondering that problem,  the demonizing of business leaders and other wealthy individuals continues — albeit on a more selective basis than in the past. Like “Big Oil,” “Big Pharma,” “Big Sugar,” and “Big Tobacco,” Wall Street has become a catch-all target for critics of the free-market economy. Yet seemingly exempt from the blame-the-rich attacks are most big-time athletes, Hollywood stars, and other entertainment celebrities. They can lead a lavish lifestyle and make more money from a few months of work on a movie, a concert tour, and/or product endorsements than the best compensated CEOs running billion-dollar companies can earn in a year, but they rarely face criticism as long as they espouse causes that are politically correct in the eyes of the leftists.

Not exempt from the left’s attacks are business leaders whose political beliefs don’t fit the left’s economic and political agenda. Google “the Koch brothers,” for example, and in about half a second you’ll find 1.3 million “results,” with much of the results regurgitating material that includes inflammatory false attacks on the Kochs. Their apparent crime: Creating successful businesses that employ thousands of workers, urging fealty to the U.S. Constitution, opposing crony capitalism, and supporting the kind of free-market economics that, unlike socialism, has lifted millions of people around the world out of persistent poverty. For their attempts to support their beliefs, the Kochs have been vilified to a degree that left-leaning billionaires such as George Soros have not.

Fortunately, if there is any consolation for the Kochs and other wealthy individuals who have devoted themselves to supporting our liberty instead of, say, buying a villa in Tuscany or an NFL franchise to meddle with, it is this: They have the wealth and wisdom to take care of themselves. Moreover, considering that list of the 28 “robber barons” who were targets of the leftists a century or so ago, the Kochs are in good company.

Featured Image: Wall Street Bull, New York, New York, by Carol Highsmith. Courtesy of Library of Congress.