Wednesday, March 18, 2015

JP Morgan Man,Grover Cleveland, and His Trend Away From Liberty

By  Jason Peirce

Today, March 18, marks Grover Cleveland’s birthday. Cleveland, the 22nd and 24th President of the U.S., was the only president to serve two non-consecutive terms (1885-1889 and 1893-1897), to be married in the White House, and to have a candy bar named after his daughter (“Baby Ruth”).
Cleveland is hailed by many libertarians as an honest champion of limited government and the constitution. True, Cleveland refused to inflate the currency during recession and he vetoed more than 300 bills. That’s more than double the combined vetoes of all presidents before him. He was also known for his advocacy of voluntary charity over “paternalistic” federal aid, and for his (seemingly) noble yet failed attempts to battle high protective tariffs.
But the whole truth on Cleveland is a bit more, well, nuanced than the narrative above.
Before we get to that, here’s Cleveland’s political economy, in his own words:
·        “Manifestly nothing is more vital to...the beneficient purposes of our Government than a sound and stable currency.”   
·        “Once the coffers of the general government are opened to the public, there will be no shutting them again.”
·        “Our citizens have the right to protection from the incompetency of public employees...” 
·        “...the lesson should be constantly enforced that though the people support the Government, Government should not support the people...”
·        “Under our scheme of government the waste of public money is a crime against the citizen...”
·        “When more of the people's sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and expenses of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of a free government.”
·        “A due regard for the interests and prosperity of all the people demands that...our system of revenue shall be so adjusted as to relieve the people of unnecessary taxation…”
On his deathbed, Cleveland’s famous last words were: "I have tried so hard to do right."
There is much to admire in Cleveland’s words on political economy. The problem is that his words were completely undermined by his interventionist foreign policy.
As Murray Rothbard has pointed out, Cleveland was a “Morgan man” through and through. This means that Cleveland was inseparably tied to J.P. Morgan’s banking interests. Cleveland’s political ascendency was tied to Morgan, and his administration was “honeycombed” with Morgan men. Rothbard furthers that Morgan banking interests dictated Cleveland’s foreign policy, which forever and disastrously altered the course of the U.S. by setting it off on the road to Empire:
“The great turning point of American foreign policy came in the early 1890s, during the second Cleveland Administration. It was then that the U.S. turned sharply and permanently from a foreign policy of peace and non-intervention to an aggressive program of economic and political expansion abroad. At the heart of the new policy were America's leading bankers, eager to use the country's growing economic strength to subsidize and force-feed export markets and investment outlets that they would finance, as well as to guarantee Third World government bonds. The major focus of aggressive expansion in the 1890s was Latin America, and the principal Enemy to be dislodged was Great Britain, which had dominated foreign investments in that vast region.”
Cleveland, urged by Morgan banking-interests, saber-rattled Great Britain in Latin America until Britain backed down. The U.S. next set its sights on Cuba, and then on Asian expansion through the Philippines. By the dawn of the 20th century, the stage was well-set for further American expansion and Empire.
The point is that although Cleveland talked about doing the “right” thing, his devotion to Morgan banking interests undermined his “right” and good accomplishments by sowing the seeds of the Big Government statism he spoke against. As Rothbard noted “…bankers are inherently inclined toward statism.” And at the core, Cleveland was a Morgan Man.
Rothbard’s observation is as true today as ever. It also explains the ongoing challenges to liberty and the unsustainable statist system we live under today.

Murray Rothbard, “Wall Street, Banks, and American Foreign Policy”:


  1. Good article, Jason. One quibble: Baby Ruth bars weren't named after Ruth Cleveland. They were named after Babe Ruth, and the Babe was changed to Baby to avoid a lawsuit for using Ruth's nickname without permission or remuneration. The reference to the "first daughter" was an attempt at obfuscation which wasn't widely accepted by the public.

  2. Thanks EdD. Yes, I've seen conflicting stories about the name. I think the truth is probably closer to your version, but I went with a stated contrary version. I had read that the candy-maker Curtiss misled on the origin of the name -- indicating Ruth Cleveland who had since passed away -- to avoid paying royalties to the baseball player. At any rate, there is an interesting economic lesson in the "Baby Ruth" name-origin controversy also. Good stuff.