"...the moderative-progressive movement within the Liberal Party remained undeterred by the exit stage right of President Hughes and the relative anonymity of figures such as James Garfield within the Root administration; the anti-reactionary current within the party, which saw itself as holding down a broad but brittle middle American point of view as opposed to the gauche Democrats and grouchy conservatives within their own party, had never been a top-down organization, after all. The losses in the state legislatures in 1914 and 1916 had badly damaged that wing, though, and their success in capturing control of state and county party organizations after the disastrous nomination of Samuel Pennypacker against William Randolph Hearst by the conservative bosses had not been entirely undone, but certainly close. The Root era saw the bosses trying to re-assert their dominance a decade after losing it, and the internecine warfare within the Liberals was starting to get ugly, just as the 1918 midterm election loomed on the horizon.
The "progressives" were a pretty diverse sort; there were establishmentarian figures such as Illinois' Richard Yates, who had been Hughes' favored Senate catspaw, as well as traditional good-government reformers like Henry L. Roberts of Connecticut, but also genuine radical thinkers like Ole Hanson of Washington or Hiram Johnson of California. The true north star of anti-reactionary Liberalism, however, was Robert LaFollette of Wisconsin, a mercurial personality famed for his wit, his oratory, his temper, and his heterodox ideas and practices that made him a sui generis as far as Senators went. And the looming disaster the Liberals faced at the polls can, in part, be foreseen in the way that his report on wartime profiteering was handled by Boies Penrose.
Though utterly forgotten to the present-day public, Penrose was a widely loathed figure by much of the American polity by the middle of 1918. He was simultaneously viewed as an all-powerful and corrupt party boss straight out of the 19th century and, as Mellon's reputation further diminished in the face of the deepening postwar depression, viewed as "Mellon's man" in the Senate, an irony seeing as how Penrose had lobbied for Mellon to be made Secretary of the Treasury. [1] In March of 1918, rotting vegetables from a market in Philadelphia were thrown at his stately townhome near the site on Fairmount Hill he had personally picked for the massive new Capitol complex by angry protestors; even members of his own party were starting to get restless under his blinkered, stubborn leadership. He was thus also perhaps not the best man to handle somebody as famously prickly as LaFollette, who largely walked to the beat of his own drum.
LaFollette had by 1918 turned into something of a folk hero in his home state of Wisconsin, building a highly personalist machine that cooperated with "Red Milwaukee" and on the backs of German and Scandinavian voters who otherwise may have leaned conservative constructed a progressive example for the rest of the country, with a slew of policies and reforms passed since the turn of the century to make Wisconsin something of a "laboratory of progressivism." His votes in the Senate generally aligned with his own moral compass and he delighted in frustrating a party leadership he felt increasingly alienated by; because of this idiosyncratic style, he had been the obvious choice to head the LaFollette Commission, the panel investigating the procurement of arms during the war.
The structure of the LaFollette Commision was unusual; upon its formation in 1914 it had had six Democrats and three Liberals, with LaFollette as chair, a major concession on the part of Democratic Senate leadership made only because of their total trust in LaFollette's independence and integrity. With Colorado's "Honest John" Shafroth as his co-chair, LaFollette had surprised even his most skeptical detractors by pursuing his mandate not as a high-level Congressional investigator but as a high inquisitor, framing war profiteering and price gouging as a moral outrage to the general public that was making enormous sacrifices. This had, unsurprisingly, made LaFollette a name with the public well beyond Wisconsin, and had also elevated Shafroth's profile a great deal within the Senate Democratic Caucus.
The First LaFollette Report had, in part, helped bring about the Ballinger Affair that took down Hughes' original Secretary of the Navy, and for this reason Penrose was reluctant to see LaFollette continue his work with Liberals now in control of the Senate and the war over. He acquiesced to LaFollette's demands on the condition that the next (and final) report expand upon the work of his original to outline potential future improvements for Army and Navy procurement and, at former War Secretary Henry Stimson's insistence, propose a "readiness standard" for war materiel in a peacetime economy. LaFollette did this with gusto, but also quietly continued his hearings on war profiteering that were reported on widely and in May of 1918 he was ready to submit the Second LaFollette Report, clocking in at over three thousand meticulously researched and written pages.
Penrose did not need to read more than the table of contents to recoil in horror. LaFollette not only expounded upon the methods of war profiteering but named and shamed companies that had done so, calculating their "misbegotten earnings" down to the cent in some cases and including tables and graphs of their companies' shares on the New York Stock Exchange, comparing returns and dividends to firms that did not price gouge. Even some executives were accused directly by name, with recent lavish purchases or vacations being identified and thus heavily implied to be downstream of their gouging; LaFollette also helpfully identified which Senators, from both parties, had taken campaign donations from them.
The outrage that this report was likely to cause with the public, the business community, and the Senate itself was impossible to measure, but easy to predict. Penrose was alarmed in particular at the insinuations that certain Senators were corrupt from having taken donations from "gougers," and he immediately returned the finalized report to LaFollette, who had pointedly not sent him a draft, refusing to countenance releasing it publicly. LaFollette had asked to read it into the Senate record, which Penrose also refused, and the Liberal leader suggested that "the report needs revisions." LaFollette understood exactly what Penrose meant by that, and responded in an in-person meeting between the men, quite tersely, "[that] it may not be wise to make such threats with a majority so narrow and unpredictable." The threat was clear: LaFollette was willing to abandon the Liberal caucus, either to sit as an independent or maybe even as a Democrat, if Penrose did not budge. With a 33-31 majority and frequent absences, Penrose's ability to manage his razor-thin caucus was already difficult enough, especially with his mounting personal unpopularity; despite his stubbornness on policy, Penrose was even more stubborn about clinging to power, and he blinked.
The compromise was that the LaFollette Commission would release its report to all Senators as well as House leadership, the Root administration, and the Philadelphia press; LaFollette would not read anything into the Senate record beyond the Report's opening summary, which itself was close to fifty pages. LaFollette begrudgingly agreed that this was a reasonable solution and more than half a loaf, but as he already disliked and distrusted Penrose's personalism, the damage of the whole episode was done; he would never cease believing that Penrose and his "cabal" were more interested in protecting corrupt oligarchs than actually bettering the ability of the US Army to fight a future war, and the clock on his time left amongst the Liberals was quickly ticking down thereafter. [2] As Penrose predicted, the Report generated a massive public relations backlash that badly damaged the Liberals, and hopes it would blow over by the autumn were ill-founded; even the passage of the Immigration Act of 1918 by massive bipartisan majorities, intended to appeal to nativist concerns and worries of the unemployed, failed to end the perception that had stuck of the Liberals as not only inept and heartless, but hypocrites on the question of public corruption..." [3]
- Second Wave: The Postwar Progressive Revolution of 1917-31
[1] Note that Root is often perceived by the media, at least Liberal-hostile media, as being Mellon's puppet, too. Mellon was not Jewish so this is not an anti-Semitic trope, obviously, but what I'm trying to seed here is a public that sees "bankers" and "Wall Street" as pulling the strings, and Mellon as the personification of that in the public eye.
[2] Congrats, Dan
[3] It's going to take a long wilderness in the 1920s and an inoffensive blank slate candidate like Pershing to repair the damage taken in 1917-20, in other words