Ohio History Journal

WILLIAM D. JENKINS

Robert Bulkley:

Progressive Profile

Twenty years ago American historians characterized progressivism as a

political movement whose reform impulse was rooted in the "status

anxieties" of its predominately middle-class membership. Since then, a

generation of historians has effectively challenged the simplicity of that

hypothesis and replaced it with the notion that progressivism was more

diffuse in nature. No longer viewed then as a movement cohesive in

philosophy and homogeneous in membership, progressivism has become

merely a term used to describe a series of widely divergent reform ideas,

some radical and quasi-socialist, others mildly reformist or even conserva-

tive, that Americans adopted as an alternative to unfettered capitalism.'

Bernard Sternsher has recently offered historians a useful tool in

analyzing the complexities of progressivism. Avoiding the error of those

who labeled all political philosophies to the left of laissez-faire as "progres-

sive" (or of those like Gabriel Kolko who characterize all to the right of

socialism as "conservative"), Sternsher has constructed a political typology

that accounts for the variety of political philosophies housed within the

capitalistic system. To the left of laissez-faire are the antitrust advocates,

such as Louis Brandeis, who sought government intervention only to

restrict the size and power of business. In the center are the neo-

mercantilists, defined as those favoring government intervention to pro-

mote the general welfare. Within neo-mercantilism Sternsher distinguished

between right-of-center proponents of the trickle down theory and left-of-

center advocates of social welfare legislation. Located further to the left,

just before socialism, was the philosophy of "concentration and control,"

which Sternsher described as planned capitalism involving the combined

efforts of government, business and labor.

With such a spectrum in mind, it becomes easier to understand the

results of Otis Graham's study of 105 progressives who lived to see the New

Deal. The shotgun application of the term, progressive, guaranteed the

inclusion of reformers within that so-called movement who would react in

William D. Jenkins is Associate Professor of History at Youngstown State University.

I. See PeterG. Filene,"An Obituary for the Progressive Movement," Ar'vri(can Quarterly.

XXII (Spring 1970), and John Buenker, Urban Liberalism andi Progre.ssive Reflrm (New

York. 1973) for a thorough discussion of recent historiography.

58                                                       OHIO HISTORY

a multitude of ways to the vastly stepped-up program of government

intervention initiated by the New Deal.:

Of course a political typology based on government economic policy has

its limitations as a tool for analysis. It does not take into account attitudes

toward race and minorities, an area in which many progressives proved to

be conservative and clannish. Moreover, it overlooks the issue of scientific

management and efficiency, which Samuel Hays and Samuel Haber have

cited as a major goal of progressives, and which supposedly operated in a

system free of class divisions and unrelated to economic and social inter-

ests.

Although historians have failed to find an easy characterization to

describe progressivism as a whole, there are clearly those individuals who

fall within the broad mainstream of the movement. Such was Cleveland

Democratic Congressman Robert J. Bulkley, who won election to the

House in the Democratic sweep of 1910. His incisive intellect, moderate

politics and high social standing brought him easy access to the inner circle

of legislative power during the four years he served in the lower chamber.

Bulkley's responsibilities there made him an expert on banking and he

helped frame two of the most important pieces of progressive legislation-

the Federal Reserve Act of 1913 and the Federal Farm Loan Act which

passed in 1916. An examination of his work in the House offers much

insight into the complexity of progressivism itself and into the multifaceted

politics of a "typical" progressive congressman.

Born in 1880 into a family that had become wealthy by speculating in

Cleveland's real estate market, Bulkley held a secure place among the city's

social and economic elite. After graduating from the private, upper-class

University School. Bulkley attended Harvard College. where he met

Franklin Roosevelt. and Harvard Law School from which he graduated in

1906. When Bulkley returned to Cleveland from Cambridge, he entered the

practice of law and took up residence on "millionaire's row," an area

around East Twenty-first and Euclid avenues. As befitting a member of the

social elite, Bulkley was continually listed in Cleveland's Blue Book.'

While Bulkley's family was traditionally Democratic. his identification

with the general goals of progressivism and the more liberal wing of the

2. For an explanation of the political spectrum see Bernard Sternsher." 'he Middle Way."

7iTe Ni I)Deal. !)otriries\ and ID)em('ra', cd. Bernard Sternsher(Boston. 1966). 171-80: Otis

I. Grahamr An ln /orru fr Re/i'r.'- 17w Old /Progreu.si'es and the ,ea L)Deal(New York. 1967),

187-212.

3. Obituary of ('harles H. HulkIcy, ('Clevlanl Plain Dealer. December 20. 1895: Flrlo

McKendree A\ery. A listorrl o ('Clveland and itl Env'irons (Chicago. 1918). 405. 499-500:

Transcript ol'Robert .. Bulklev's Record, Harvard University Archives: Undated biographi-

cal paper. I he I'apers of Robert .1. BulkIcy, Western Reserve Historical Society, Cleveland,

Ohio. I he Bulkley Papers are cr\ thorough for his career as a representative but rather sparse

lor his term as a senator, I hus. this paper is confined to Bulklec's work as a representative.

Robert Bulklet                                                           59

Democratic party most likely began at Harvard.⁴ Despite the conservative

politics of president Charles W. Eliot, Harvard's turn-of-the-century

faculty held beliefs widely divergent in their political and philosophical

basis. Bulklev has left no evaluation of the impact of Harvard on his

development, but his courses and instructors probably helped to form his

progressive conscience.' His economic courses, for instance, included the

following: Problems of Public Ownership: Questions of Public or Private

Ownership of Street Railways, Gas and Electric Lighting Plants; and

Money, Banking and International Payments. In conjunction with these

economic courses, Bulklev took a philosophy course entitled the Ethics of

Social Questions, which examined problems of the inner city.⁶ According

to historian Allen F. Davis, such a course "often inspired young men and

women 'to do something' for suffering humanity."⁷ By the time he left

Harvard, Bulkley felt prepared to take positions on the pressing social and

economic problems of the day.

Bulkley returned to Cleveland in 1906 where Progressive Mayor Tom

Johnson was to have a profound impact on his social ideology. A

convert to the single tax theories of Henry George, Johnson favored the

sort of gas and water socialism advocated by many municipal reformers.

H is reform program included reassessment of business property, municipal

ownership of the street railway, and politics based upon "principle rather

than patronage."x While not converted to all of Johnson's theories, Bulkley

idolized the Mayor and would later praise his ideals as "so high that we

used to talk about building our city on a hill and Cleveland came to be

known as the best governed municipality in America."⁹ In 1910 Johnson

used his influence to assure Bulkley's selection as the Democratic party's

congressional candidate in the Twenty-first District, a wealthy and tradi-

tionally Republican stronghold."'

Bulkley chose an opportune time to begin a political career. In the

4. Charles Bulkley and his brother-in-law. Liberty Holden. purchased the Cleveland Plain

Dealer, a pro-Democratic newspaper. See the Cleveland Plain Dealer, December 20. 1895;

Cleveland leader, October 26, 1910.

5. Henry May, The End of American Innocence (New York. 1959), 56-62.

6. Transcript of Bulkley's Record, Harvard University Archives.

7. Allen F. Davis, Spearhead.s br Reform (New York, 1967), 38.

8. Hoyt Landon Warner, Progressivism in Ohio, 1897-1917(Columbus, 1964), 54-79, 87-

105; Tom Johnson, MY Storl (New York, 1911), forward.

9. Bulkley speech, ca. 1930, Bulkley Papers. Although Bulkley favored better tax valuation

of property, nowhere in his papers did he indicate approval of the single tax. Bulklev agreed

with Johnson's theories about municipal ownership of natural monopolies, but he was

reluctant to have the government undertake ownership of telephone and telegraph lines until

it had proved its capacity for efficient operation. See letter to S. S. Stillwell, October I I, 1910.

Bulkley Papers.

10. Undated article from the Plain Dealer and Bulkley speech, ca. 1930, Bulkley Papers.

For a description of the upper class and their attitudes toward the reform of Tom Johnson, see

Frederic C. Howe, The Conlessions of a Reformer. (Chicago, 1967), Chapters 10-14.

60                                                           OH10 HISTORY

fourteen years that the Republicans had dominated the White House and

the Congress the cost of living had risen 45 percent." At the time of the

election Cleveland was experiencing a 7-percent increase in local prices

over the previous year, which caused Cleveland newspapers to devote

much space to a discussion of the problem, and a variety of local clubs and

organizations to hold meetings designed to combat inflation. One such

organization, the Superintendents and Foremens Club. even began a

national meat boycott.'' The outcry forced local politicians to respond to

the issue. In the early months of 1910 the Cleveland City Council estab-

lished a five-man committee headed by Daniel Morgan, a local Republican

lawyer. which issued a report on rising costs never acted on by Council.³

Primed with campaign material sent by the Democratic National

Committee, Bulkley took full advantage of the growing alarm Clevelanders

felt about the issue. While Republicans blamed inflation on the increased

supply of gold. Bulkley reiterated Democrats charges that high tariffs.

beginning with the Dingley Tariff of 1897. had permitted trusts and other

large combinations to avoid foreign competition and raise prices to unjust

levels. Ihe Republicans were particularly      embarrassed   by this issue

because their 1908 platform promised downward revision of the tariff

schedule, but the Payne-Aldrich Tarifflogrolled through Congress the next

year actually raised some customs duties. Bulkley's Republican opponent,

lJames Cassidy. a former railway clerk and party stalwart, had voted for the

new law.'⁴

Although a reduction in the tariff would probably not have actually

reduced prewar inflation, which was a world-wide phenomenon, Bulkley

and other Democrats used the issue to effectively attack Republican

legislative hypocrisy and as a weapon to criticize the large trusts that often

I . I he Bureau ot Labor Statistics (see Bulletin 149. May 1. 1914, and Bulletin 269. July

1920) kept figures for those years based on the prices of 256 commodities. Reader's Guide lists

the following number of articles on the cost of living: 1900-1904 22; 1905  13: 1906                                       11:

1907  17:1908  16:1909  30: 1910  86:1911-25; 1912-68: 191349: 1914-1918                                                55.

For state and congressional investigations see "The Cost of Living," Survre, XXII (February

12, 1910), 691-92; G. Stickley,"American Boast," The Craftsman, XXVII (March, 1910), 629;

"Lodge Cost of Living Committee," Journal of Political Economy, XVIII (October, 1910),

637-38. For consumer rebellion see B. W. Holt. "Too Much Gold." Everlhodr's Moag,:ine,

XXII (April, 1910), 476; "Making War on the Middleman and the Cost of Living," Current

Literature. .II (March 1912), 289-92; J. M. Oskison. "The Cooperative Cost of living,"

(ollier's Weekl,. XI.VIII (January 27, 1912). 19.

12. Thomas F. Campbell, "Daniel E. Morgan: The Good Citizen in Politics" Ph.D.

dissertation, Case Western Reserve University, 1965, 31-34. This section is not included in the

published work.

13. Cleveland ltader. January 5. 1910: Campbell. "Morgan". 31-34.

14. Flyer from Brotherhood of Railway Clerks. November 5. 1910: speech of James H.

Cassidy. October 25, 1910: and letter of James H. Cassidy to WachterundlAnzeiger. October

22, 1910, Bulkley Papers.

Robert Bulkler                                                           61

profited from the tarif on manufactured goods.'⁵ In the 1910 elections the

Democrats gained control of the House and picked up nine seats in the

Senate, five short of a majority. The new Speaker of the House. Oscar

Underwood, placed Bulkley on three committees: Banking and Currency,

the Committee on Patents, and the Committee on Expenditures in the War

Department. As befitting a freshman congressman, his contributions to the

62nd Congress were not significant, but the work he did do and his voting

record are important indications of the nature of his progressivism.

In the area of regulation and control of business, a vital indicator of

progressive sentiment, Bulkley agreed with the New Freedom principles

advocated by Louis Brandeis and Woodrow Wilson. A devotee of Adam

Smith, Brandeis suspected big business of accomplishing concentration

through violations of the principles of fair competition. Thus, Bulkley

supported antitrust legislation as a means of restoring competition and

reducing industrial concentration. He also viewed the protective tariff in

Brandeisian terms as a device used by business to avoid foreign competi-

tion and advised some southerners, who complained to him that the

freelisting of sugar might damage their economic interests, either to use

more efficient methods or switch to another business.'^'

While Bulkley believed in restriction of the growth and power of big

business, he was not concerned about the growth of labor unions. Indeed

he even recommended that workers join unions and contended that "the

public good is still in more danger from corporations than from labor

unions.^"' In response to a questionnaire sent from local labor organiza-

tions during the 1910 campaign, Bulkley also supported an eight-hour day,

a federal law making the employer liable for all casualties, prohibition of

child labor, limitations on the use of the injunction, and compulsory

insurance against unemployment, illness, accidents, invalidism. old age

15. Letter from James 1.. I.loyd. August 24, 1910: undated Bulklev speech on tariff:

Bulkley's speech given at Hill's Hall. October 19. 1910: and two letters to Newton I). Baker.

May 28 and June 13. 1910. Bulkley Papers.

16. Letter from Joseph Diamond, May 18, 191 1, and letter to R. E. Hills. June 15, 1912.

Bulkley Papers. Bulklcy worked with Louis Brandeis in the controversy over resale price

maintenance. RI'M would have kept chainstores from offering bargains toattract customers.

Amid charges that chain stores compensated by raising prices of other products, Bulkle and

Brandeis considered discount prices to bean unfair form of competition. In his 1914 primary

campaign Bulkley solicited and received (albeit too late) the support of Brandeis. letter to.l.

I.evden White, April 8. 1914: letter from John Hill. secretary to l.ouis Brandeis. August I I.

1914: and letter to .ouis Brandeis. August 17. 1914. Bulkley Papers. In his 1912 campaign

Bulklcv attacked the Newv Nationalism of Theodore Roosevelt: Cl(e'\('kltn   Plain i)e'tIr.

Nocembcr er  1912 and Cl(/cclhnd Prc.s.s. Nosember 4, 1912. -or Bulkley's views on the tariff

see letter to .. (i. Sholle. )ccember 16, 1912: letter to Master Building Company. April 18.

1913: letter to N. .1. Rich and Co., April 26. 1913: and letter to S. Remthat, April 28. 1913.

Bulkley Papers.

17. Itter to Henry Souther. November 16. 1914. Bulkley Papers.

62                                                             OH10 IHISTORY

and death. His voting record in Congress did not deviate from this

pattern.'

Thus. Bulkley ranged beyond the type ofprogressivism concerned solely

about the restoration of competition and the operation of Adam Smith's

laws of political economy. His support of federal legislation to correct

working conditions and provide for compulsory insurance placed Bulkley

in the camp of liberal progressives, such as members of the National

Consumers League and the settlement workers, led by Jane Addams. who

supported Theodore Roosevelt in 1912. Although Bulkley belonged to

neither of these groups, his support for social welfare legislation proposed

by them. including the establishment of the Children's Bureau and a child

labor law, indicated his sympathy for their cause and foreshadowed his

support for the New Deal as a senator from Ohio. In terms of the political

spectrum, Bulklev was a slightly left-of-center neo-mercantilist willing to

use the state as a protector of the poor, the laborer and the child.

In terms of the issue of race and minorities, Bulklev's record was mixed.

but more liberal than many other progressives.'" Bulkley staunchly op-

posed the literacy test as a means of excluding undesirable immigrants. as

well as bills to ban interracial marriages and establish Jim       Crow   on

streetcars in Washington, D.C.'" On the other hand. he made no public

comment on the introduction of segregatory practices within the Wilson

Administration and opposed a federal amendment to grant suffrage to

women.'l When judged by the attitudes of that time. Bulkley rated as a

liberal on racial matters, but rather conservative in regard to women.

After gaining reelection in 1912. Bulkley had the opportunity to work on

two significant pieces of progressive legislation, the Federal Reserve Act

18. IPamphlet Irom 1914 conigressional campaign: clipping from Collier'\ t Week( detailing

Bulklek-'s \oting record: letter to S. S. Stillwell. October I1. 1910: letter to I/ie Hlarpoon,

Octoher 24. 1910: and letter to Raislway Union. October 27. 1919. Bulkley Papers. Bulkley

\ot.d lor or klmin's compcnsation, railroad cmplovces. linitation of the use of the injunc-

tion. permission for jurI trials in cases involving indirect contempt. the establishment of a

D)epartment of I.abor. an eight-hour day for postal clerks and government workers, and the

I aFollette Seimens 1ill.

19. Richard Hofstadter. The Age of Reform (New York. 1955). 178-86: George Mowry.

7ITe l-ir of' Theodore Roovsevelt a   ti he Birth o' Mlodern America (New York. 1958). 92-94:

Aileen Kraditor. The lheas of the 4Wotman Suflerage Movement, 1890-1920 (Garden City.

1971). 105-71: James II. Timberlake. Prohibition and the Progressive Mloviemen (Cam-

bridge. 1966). 114-24.

20. On immigration restriction see Bulklev'sletters toA A. Benesch, February 17. 1913. to

F. I). Busser. December 21. 1912. and to Millard Widlar. January 7. 1914. Bulkley Papers.

For Bulklev's position on the bills relating to racial issues see his letters to Alex Martin.

February I. 1915. and to Mary Farrer. January 12. 1915, Ibiil.

21. In a letter to the Re\. Charles Bundy. September 18. 1913. Bulkley asked lor proof of

segregatorv practices in spite of e idence axailable in magazine and news articles. On woman

suffrage see his letter to tlarrict l'aylor ipton, July 13. 1914. and to Elizabeth Todd Billings.

Julv 2. 1913. Bulkle! Papers. Bulkley did admit the possibility of his support for a state

amendment, if the women wanted it.

Robert Bulklei                                                   63

and the Federal Farm loan Act, both of which came before the Banking

and Currency Committee. In 1912 Woodrow Wilson and the Democratic

party had committed themselves to updating the nation's banking structure

in both areas. In the case of the Federal Reserve Act, Carter Glass,

chairman of the Banking and Currency Committee, noted that Bulkley's

"interest in the subject was so unmistakeablc and his grasp of the problem

so thorough that I did not hesitate to confide to him one of the most

intricate and difficult features (reserve section) of the bill."-- In September

1913. Bulkley spoke to Congress for several hours on the reserve section. a

presentation that was well received and earned him the congratulations of

William G. McAdoo and Newton D. Baker. While the bill was in the

Senate Finance Committee during the fall, Bulkley traveled around the

country with Carter Glass in order to convince businessmen and bankers of

the value of the Federal Reserve Act. Highlights of the trip included

speeches before the Illinois Manufacturing Association, the Pittsburgh

Board of Trade, and the American Academy of Political and Social

Science. Later in December, the Senate and House conferees called Bulkley

in for consultation on the reserve section, which he persuaded them to keep

nearly intact." Glass summed up Bulkley's contributions in the following

statement: "While Bulkley and I differed in committee as to certain details

of the currency bill, from the moment the bill was reported to the House he

was a tower of strength to the administration and won high praise from the

friends of the measure.^"'4

Banking reform had originated within the banking community in an

effort to solve two major problems. an inelastic currency and an inadequate

reserve system. Because the National Bank Act of 1864 had made the issue

of currency dependent on the purchase of bonds, the nation's money

supply tended to contract and expand at inappropriate times and thus

remain unresponsive to the needs of the economy. Moreover, because of

the lack of a reliable system guaranteeing the transfer of reserves among

banks, perfectly sound banks faced potential bankruptcy in times of stress.

Banks often added to their problems by depositing part of their reserves in

the big New York banks which in turn invested these reserves on the often

volatile stock market. In addition, the piling up of reserves in New York

generated neo-populist fears about the control New York banks might

exert over the finances of the nation.²

22. (C'l'elanit l Plain Dealer. September 29. 1913. Allen's Column.

23.  \c   York,,   Time.s, October 15. 1913: Carter (Glass. .4lventure in Constructivr e F-inance

Ncn York. 1927). 176-78; letters from William G. McAdoo and Newton D. Baker. September

15. 1913. Bulklev Papers.

24. (levelaicl Plali Dealer. September 29. 1913. Allen's Column.

25. E. W. Kemmerer and Donald I.. Kemmerer. T77 4 AC ol/the Fetleral Reserve Si'.t[em

(New York. 1950). 1 1-23: H. Parker Willis. The IFeileral Re.erve S.strem (New York. 1923).

64                                                         OHIO HISTORY

Bulkley was enthusiastic about the Federal Reserve Act because he felt

that it offered solutions to all these problems. Rediscounting by central

reserve banks permitted member banks to exchange liquid assets (commer-

cial and industrial credit) for federal reserve notes. a process which could

enable the currency supply to expand or contract dependent upon the rate

of interest (rediscount rate) charged by the central reserve bank. Each of

the district banks also accepted part of the reserves of member banks as a

deposit, which could then be used to support a bank experiencing excessive

demand on its deposits. Finally, the creation of twelve central reserve

banks and the provision that deposited reserves could not earn interest

ended the piling up of reserves in New York.'"

Bulkley's support for these provisions rested on his belief that they

provided for a stronger banking system based on efficient operating

principles. Bulkley's exposure to these principles probably came at Har-

vard. but he also received assistance from H. Parker Willis. an appointee of

Glass to aid Bulkley on the reserve section. Editor of the Journal of

(Commerce and holder of a doctorate from the University of Chicago in

economics, Willis would later write The Federal Reserve System, in which

he praised its use of "scientific" banking principles.: Thus. Bulkley

accepted scientific management as a necessary part of banking reform. In

doing so. he displayed a characteristic progressive quality. as noted in the

works of Samuel Haber and Samuel Hays.^:s

According to other historians, however, the most important issue in

judging the extent of progressive commitment was that of government

control. Arthur l.ink, for example, considered Wilson a progressive

because he forced Carter Glass to accept government control of banking. as

well as government issue of federal reserve notes. and because Wilson

excluded bankers from appointing representatives to the Federal Reserve

Board.;' Other historians, such as Gabriel Kolko, have contended that the

final form of the Federal Reserve Act guaranteed the dominance of New

York bankers over the nation's finances and thus represented a "triumph of

conservatism.^"'" The differences between these two interpretations oc-

curred because Link judged reformers by their intentions, while Kolko

240 41: .ames I.. Laughlin. The Federal Reserve Ac.: Its Origins and Problems (New York,

1933),44-100.

26. ('ongiessio,)nal Re(orl. 63rd Congress, Ist session. September 12. 1913). 47774785.

27. Gabriel Kolko. 7t'h 7iiunmplh f o  nservatismr . A Reinterpretation of Aimerrican

Hlistor, 19 ()-/9 ' ((Chicago. 1967). 217-28: Willis, Reserve System, 1-40.

2X. Samuel P1. Hlays. Conservalion and the Gospel fEffi/ciency: The Progressive (on.ser-

vation MIovemoenl, 1890-19I2 ((ambridge. 1959) and Samuel Haber, Efficienc( and Up/lit:

.S, ienli/i  Mtlin7agr,'imelr in the Progr essiv, e  I-' Ir  (Chicago. 1964).

29. Arthur l ink.  ilsn I  ol. ol2, lrdem.. 'lic .VNei  freedom  (Princeton, 1956). 21 1-13.

30. Kolko, Triumnph of Cons ervaltism. 249-54.

66                                                          OHIO HISTORY

association with Tom Johnson in viewing banking as a public utility.

Johnson had advocated public ownership of utilities. but Bulkley held back

on government ownership, other than in the area of natural monopolies.

because he doubted that the government could run other forms of business

efficiently. In the Federal Reserve Act Bulkley supported an admixture of

public and private control and ownership, a half-way acceptance of

Johnson's beliefs."

Even with such a mixture Bulkley still faced the problem of potential

domination of the Federal Reserve System by financial elements. Because

of his Brandeisian fears of the concentration of financial power, Bulkley

fought to reduce the powers of the Federal Reserve Board, in particular its

right to veto the rediscount rates set by each district. In July 1913 he offered

several amendments in committee to achieve such a reduction, but neither

passed. On July 25, he carried his objections to the House floor and even

cited Woodrow Wilson's book, The New Freedom, as support for his

objections to granting excessive powers to a government commission, but

again gained no concessions. His solution represented a conservative

attempt to limit power through decentralization, while still leaving control

of the system in the hands of bankers organized at the district level.'²

Bulkley's advocacy of decentralization and of government control

placed him within the mainstream of progressive thought. A major

problem, however, for progressives who advocated government regulation

was the question of membership on regulatory boards. Once Wilson had

established government control as a prerequisite for his acceptance of any

banking bill, bankers sought to secure the appointment of at least three

members of the Federal Reserve Board. but Wilson rejected such a

proposal because he believed that bankers could not administer the system

impartially." Ironically, the final bill did permit presidential appointment

of bankers, but only if they severed banking connections while on the board

and for a period of two years thereafter, the hope being that such provisions

would guarantee banker independence.⁴ Presidential power to appoint

31. (hi(ago ,\es., October 21. 1913: Cleveland Plain Dealer. June 25. 1913. Allen's

Column. Bulkley agreed with Johnson's theories about municipal ownership of natural

monopolies, but he wsas reluctant to hase the government undertake ownership of telephone

and telegraph lines until it had proved its capacity for efficient operation: see letter to S. S.

Stillwell. October I , 1910, Bulkley Papers.

32. C(lvceland I eader. July 25. 1913: Cleveland Plain Dealer. July 30, 1913: letter to A. L..

<(rucey. Jul 16. 1913. Bulkley Papers. One of Bulkley's amendments would have eliminated

the power ot the Board to suspend reserve requirements for thirty days and for an undeter-

mined number of fifteen-day periods thereafter. Bulkley also preferred that the central banks

set the rediscount rate for each region, but the final bill gave the Board a veto over the

individual region's rates. Bulkley accepted this provision because he believed the Board would

not often veto a rate.

33. l.ink. Newr Freedom.n 206-13.

34. Pittshurgh )isipatch. November 16. 1913.

Robert Bulklev                                                    67

bankers, albeit ones who had temporarily severed their banking connec-

tions, created the possibility of the regulated controlling the regulatory

board.

Bulkley confronted a distressing personal dilemma in resolving this

question. On the one hand, he was suspicious of potential banker domina-

tion of the new system, but he also questioned, along with John Farnwell,

President of the National Citizens League for the Promotion of a Sound

Banking System, the capabilities of political appointees, who might possess

independence from financial self-interest, but who also probably lacked

sufficient knowledge to operate the system in a scientific and efficient

fashion. Bulkley solved his dilemma by accepting Wilson's position that no

banker would serve on the Board without severing his financial connec-

tions.⁵ Obviously, such a resolution did not guarantee banker independ-

ence, but it did provide for the appointment of individuals with the

specialized knowledge to make such decisions.

In the final analysis, Bulkley had overlooked his concern regarding

banker domination of the Federal Reserve Board because of his belief in

scientific management and his confidence in experts. Since the proper

operation of the new system relied on the application of "scientific" princi-

ples of bank management, Bulkley was not adverse to having bankers or

banking experts on the board. Most likely, Bulkley would have favored the

appointment of someone like H. Parker Willis, whom Bulkley considered

capable of applying banking principles for the benefit of the economy,

rather than a special interest group. Thus, Bulkley was a neo-mercantilist,

who sought the proper and impartial operation of the nation's banking

system through a bureaucracy subject to the control of experts. Bulkley's

attitudes compared closely to the progressive belief in bureaucratic

management that Robert Wiebe has described in his work, The Search for

Order. As suggested by Wiebe, however, the Federal Reserve Act did not

provide a final solution to the problem of achieving impartial public

regulation.³

Bulkley's expertise in banking matters brought him increasing recogni-

tion from Glass and Wilson and eventually increasing responsibilities.

After deciding to exclude long-term rural credits from the Federal Reserve

Act, President Wilson promised separate consideration of a rural credits

bill. In compliance with this promise, Carter Glass appointed a Subcom-

mittee on Rural Credits with Bulkley as chairman, the high point of his

career as a representative.:⁷

35. Willis. Re**erv\c Ss\.iem. 620: Glass. Ad\ventur.e  1 12-14: letter from  John V. Farnwell.

.luly 9, 1913. Bulklev IPapers. Bulklcy did not want direct representation of hankers because he

felt that the people had \crv little control over them. but the people did have democratic

control oecr politicians who would appoint the new board.

36. Robert Wiehe. 71he Scarchl /i)r Or'r (Ncw York 1967). 221-23.

37. ('levelanl Plain I)oeler. Autust 14 and September 29. 1913. Allen's Column.

68                                                        OHIO HIISTORY

Debate over rural credit extended back into the nineteenth century.

Farmer agitation over interest charges had led to studies proving that

farmers did pay higher rates than commercial interests, with differences

being the greatest in more unsettled districts and in the South where the

exploitative crop lien system was in operation. ⁸ At least one historian,

Harold Faulkner, has concluded that "the existence of high interest rates

was not the result of a deep dyed plot of bankers to gouge the long-suffering

farmer. It was the normal functioning of an economy seeking to obtain the

highest rates for services rendered, and the result of a banking system

inadequate to meet the needs of the nation."'9 Some of the inadequacies

included state laws involving inefficient and costly searches to prove title,

and mortgages that lasted only five years, and on which total payment of

interest was required before reduction of the principal. Most farmers could

not pay off the heavy investment involved in land purchase within such a

short period, which necessitated renewal of the mortgage at additional

401

expense.

The rapid inflation of food costs after 1900 generated a new-found

concern with farm problems. An overall increase of 42 percent in food

prices between the years 1897 and 1914 received much attention in

numerous magazine articles concerning the cost of living, the principal ex-

planation being that food production had not kept pace with an expanding

urban population. In 1908 Theodore Roosevelt appointed a Country Life

Commission, which recommended federal aid in the solution of farm

problems, including rural credit. The Commission's report blamed the

nation's declining farm population for the increasing price of foods and

sought to make farm life more attractive as a means of reversing that

trend.⁴1

When Bulkley began work on the Subcommittee. he had available the

reports of two commissions (the American Commission, appointed by the

American Banking Association and the Southern Commercial Congress,

and the U.S. Commission, appointed by the Senate), which had traveled

38. U.S.. Congress. House of Representatives. Banking and Currency Committee. Itear-

ings Before the Suhcommilttee on Rural Credits. 63rd Congress. 2nd session(December 13-14,

1913).

39. Harold U. Faulkner. Dec line ol lais.sez-Faire (Nesw York. 1951), 360.

4(. Banking Committee, Hearings.

41. .lames C. Malin. "Background of the First Bills to Establish a Bureau of Markets. 1911-

12." Agricultural History, VI (July, 1932), 1 11-29. See the Reader's Guide for the many articles

relating food prices to the cost of living. I wo representative examples are: Harvey Wiley.

"Back to the Farm." Century Magazine, LXXXIII (February, 1912), 623-39; Arland Weeks,

"The Question of Agricultural Population," Popular Science, LXXXIV (March, 1914), 251-

56. See also "Theodore Roosevelt's Country .ife Comtmission." Agricultural History.

XXXIV (October, 1960), 163-65.

Robert Bulklev                                                     69

abroad to study European systems of rural credit. The Committees

discovered that Germany had a centuries-old system of long-term rural

credit, in which cooperatives composed of farmers loaned themselves

money, obtained from a central bank in exchange for their mortgages and

repaid by amortization. The central bank acquired its money through the

sale of debentures (bonds based on real estate).

The study of the two commissions resulted in the recommendation of the

Fletcher Bill to Congress, named after Senator Duncan Fletcher from

Florida, who had served as president of both commissions. Although this

bill adopted the use of debentures and amortization, it differed from

German practice by eliminating the central bank and permitting privately

owned banks, along with farmer cooperatives, to issue their own deben-

tures under federal supervision. The Commissions included privately

owned banks because they believed that American farmers were too

individualistic to join the cooperatives, but this inclusion alienated farm

groups, such as the National Grange and the Farmers U nion, because they

considered private bankers too profit-oriented to provide fair interest rates

for farmers. They proposed instead a bill introduced by Ellsworth

Bathrick, which provided for direct government loans to the farmer at

3 /2 percent interest.⁴

Although President Wilson favored the Fletcher Bill, the new Joint

Subcommittee on Rural Credits, under the co-chairmanship of Bulkley

and Senator Henry Hollis from New Hampshire, drew up its own bill.⁴³ On

the basis of farmer objections and the success of farmer cooperatives in

Europe, the Hollis-Bulkley Bill dropped the sections of the Fletcher Bill

that permitted the participation of private banking. Another major feature

of the new bill was the provision for twelve central banks (initially it was to

be controlled by the Federal Reserve Board), because it was believed that

twelve central banks would offer better marketability for debentures. To

guarantee that the system would begin as soon as possible, the Joint

Subcommittee provided for government purchase of any unsold stock of

the central banks and unsold debentures. It was hoped that government aid

would bolster public confidence, especially in the debentures that had to

compete with federal, state and municipal bonds of established value.

42. James W. Flynt, "Duncan Upshaw Fletcher: Florida's Reluctant Progressive" Ph. D.

dissertation, Florida State University, 1965, 125-36, 146-47; "The Fletcher-Moss Bill from

the Investor's Viewpoint," Bulkley Papers; "Financing the Farm." and "The Farmer and

Finance," of the Papers of Myron T. Herrick, Western Reserve Historical Society: U.S..

Congress. House of Representatives, Banking and Currency Committee, Interpretation of

H R 12585. A Bill to Estahlish Farm Land Banks, Document 679, 63rd Congress. 2nd session

(January 29. 1914).

43. l.ink. New Freedom. 261-64: New York Times. January 29, 1914; undated Bulkley

paper on rural credits. Bulklev Papers.

70                                                          OHIO HISTORY

Bulkley predicted that the public would buy all the stock and debentures

because of the confidence generated by government backing.⁴⁴

Woodrow Wilson opposed the bill because he continued to espouse the

classical liberal belief that government should not aid special interest

groups.^4' Bulkley disagreed strongly with Wilson and attacked his vision of

the self-reliant, independent farmer, whose character was threatened by

government aid. According to Bulkley. modern society was interdependent

and in need of various forms of government aid to bolster weak areas of the

economy.⁴' When Wilson, Carter Glass. and David H ouston, the Secretary

of Agriculture, worked to delay and defeat the H ollis-Bulkley Bill. Bulkley

argued that the Wilson Administration was inconsistent in application of

its philosophy on government aid and pointed to Wilson's support of a

federal subsidy to merchant shipping and support for federal aid to rural

roads as proof of his point. For Bulkley the debate over the employment of

government aid was over; the only questions that remained were how and

when.⁴

Bulkley's how did not include direct aid as provided in the Bathrick Bill.

H is rejection of this bill did not represent a philosophical objection to that

form of government aid. so much as a belief in the application of

"scientific" banking principles. With H. Parker Willis serving again as his

assistant. Bulkley constructed a system that checked closely on the

character of the borrower; based loans on the farmer's main source of

capital, his land; offered long-term mortgages with amortization as the

plan of repayment; and provided for central banks,.which represented a

large enough area so that failure of one cooperative would not endanger the

marketability of debentures or affect interest rates adversely.⁴" In Bulkley's

mind the Bathrick Bill failed to provide for such measures, and thus did not

represent a responsible system of rural credits.

44. Article sent by Bulklev to Arthur Browncll of the Philadelphia Pthlic l[edger. undated

BIulkley paper on rural credits, and letter to Richard Knott, December 26, 1914. Bulkley

Iapers: (,,tgrstn-.vssititl[ Ru(r (rdl, 63rd Congrcss,3rd session (December 19. 1913). 4015-13.

45. .etter to Carter (lass, May 12. 1914. The Papers ol Woodrow Wilson. Manuscript

D)ixision, library of Congress.

46. ('levelanul .ealer. IDecember 20. 1914.

47. .en York 7li'.s, May 13. 1914: undated (ilassspeecch ca. spring 1914. the papers of

Carter (ilass. linicrsity of Virginia: letter from Carter (ilass. May 4. 1914, Ihe Papers of

William (i. McAdoo. Manuscript I)iision. Library of Congress: Ui.S.. Department of

Agriculture. Report frolni the Secretarl (o Agriculure, 1913. 24-27: Cleveland Leader

I)ecember 14. 1914. Houston called Bulkley to conference after conference to change his

mind. but Houston's professorial air and patronizing attitude alienated Bulkley and probably

added to his intransigcance.

48. ( oilgres.sionaol Re(ordl. 63rd Congress. 3rd session (December 19. 1913). 405-13. The

Subcommittee also rejected the Bathrick Bill becatuse of fears that it was unconstitutional and

because 3 1 2 percent interest axas not considered adequate either as compensation for the

work involxed or as coverage ol the risk. tl ndatcd Bulklcy paper on rural credits. Bulklex

Papers.

Robert Bulklev                                                           71

Obviously, Bulkley was rather moderate regarding the form of govern-

ment aid, a position that reflected his pro-capitalist leanings. Yet, he agreed

with the contention of farmers that bankers were too profit-oriented to

provide cheap rural credit and that farmer cooperatives constituted the

only acceptable form of organization.⁴⁹ He was able to agree because of his

neo-mercantilistic philosophy of government. An urban dweller concerned

about the contribution that food prices made to increased costs, Bulkley

contended that American overemphasis on urban life and consequent

overcrowding of cities had caused inflation, and he expressed the hope that

federal legislation might lower food costs by encouraging independent

ownership and reversing rural-urban drift.^5° Bulkley's objection to the

inclusion of bankers in the credit structure was a direct result of his fear that

the interests of bankers might conflict with the interest of farmers and of

urban dwellers, both of whom were intended to be the primary beneficiaries

of a rural credit system.

The Hollis-Bulkley bill represented for Bulkley a neo-mercantilistic

effort to bolster agriculture and the national economy, and no more. He

envisioned the bill not as a rejection of private property, but rather as an

attempt to strengthen and to expand that system. Moreover, his bill would

not have helped agricultural workers or tenant farmers that much-it

limited a loan to 50 percent of the value of the land-and thus was not

directed at changing the social structure.⁵ In the final analysis, Bulkley's

bill was a rather moderate form of government intervention.

After an election defeat in the August 1914 primary, Bulkley left

Congress without having convinced Wilson of the value of the Hollis-

Bulkley Bill. Eventually, Wilson did permit the passage of a revised bill in

1916 with provisions for non-mandatory government aid and a structure

composed of private banks, cooperatives and twelve central banks. The

final form of the bill did not please Bulkley, but he was in no position to

affect its provisions.>⁵

Overall, Bulkley's performance in the 63rd Congress was a strong one.

49. ('Cnrgre,'.\.ional Record. 63rd Congress. 3rd session (1915), 5009.

5). letter to B. F. Bournc, February4, 1914. Bulkley Papers: Cleveland leader, November

9. 1913. According to a Plain l)ealcr report Washington officials cited Bulkley's urban

background and the stake of the cities in solution of the rural credit problem as the main

reasons for his appointment. (leveland Plain Dealer, October 5, 1913.

51. (Cogrc^sioeil Record, 63rd Congress. 3rd session (December 19. 1913), 405- 13 I.ink.

Is il/sAo. Vol. IV: hI1dm.. (Cunlt.ion. 345-50.

52. l.ink. (otil/ision. 345-50: Robert Bulkley. "The Federal Farm l.oan Act." Journal of

Political Economyr XXIV (February, 1917), 132-36, 141-47. In this article Bulkley praised the

linal hill. but also xoiced strong objections to private banks as too large to know about the

character of the borrowers, vet too small to market the debentures securely. He also

contended that pri ate banks w ould increase land values undulv because ofthe profit motive.

In regard to non-mandatorx government aid. Bulkley expressed the feat that six million

dollars deposited hb the Treasurv might not be enough to cover the cost of capital and

debentures combined.

72                                                       OO10 HISTORY

His contributions to the Federal Reserve Act had brought him recognition

among the Democratic leadership, and the chairmanship of the important

Subcommittee on Rural Credits. Within two terms as a representative,

Bulkley had become a recognized expert in the area of banking and

currency and an important member of that committee, but the gods of the

elective process suddenly reversed his fortunes.

Bulkley's opponent in the August primary was an unusually strong one,

Robert Crosser, whose followers claimed Tom Johnson would have

supported, were he alive. A colorful street-corner campaigner, Crosser

successfully employed progressive rhetoric against Bulkley by portraying

himself as a man of the people fighting against the Democratic bosses, who

supported Bulkley. The Cleveland Press, a supporter of Crosser, typified

him as a self-made man who had arisen from the coal mines, and Bulkley

as a member of Cleveland's social elite, separated by his status from the

common people. An accomplished legislator but an ineffective cam-

paigner. Bulkley was unable to counter the image projected by Crosser. It

was ironic that a man with such a progressive record should have had

progressive rhetoric used against him so well. Bulkley took his defeat

seriously and swore never to run again for office, a promise he kept until

1930 when his desire to end prohibition roused him to run for and win a

senate seat.'

As a representative. Bulkley had constructed a record impossible to

characterize with one label. Definitely not a radical nor a social activist,

Bulkley adopted a classical liberal stance in regard to antitrust and tariff

legislation, a mercantilist position toward banking and rural credit. and a

liberal attitude on questions of social welfare. In concern for better

working conditions, support for compulsory insurance, and acceptance of

the new immigrants. his record paralleled that of new stock urban liberals.

studied by .ohn Buenker in (,rban Liberalism and Progressive Reform,⁵⁴

while his advocacy of scientific management and the utilization of experts

mirrored the middle-class progressive attitudes toward bureaucracy des-

cribed by Robert Wiebe. In a sense Bulkley was a multi-faceted progres-

sive, similar in diversity of opinion to the movement itself, a moderate man

who had grown beyond the confines of his upper-class, Anglo-Saxon

upbringing and who would be very comfortable with the multifaceted

programs of Franklin Roosevelt and the New Deal.

53. In the Bulkley Papers see lctters from W. B. Gongwer. January II. 1913. from ewton

1). Baker. March 20 and July27. 1913. and from John. . Adams. October I 1. 1914. aswellas a

letter to Anthony Patton. November 19, 1913. Sec also the Clevelarnd Ptre for .uly 13, 18, 23.

24, and August 1. 1914, and the ('cvelanil Plain Dealer for July 27. 1914.

54. Buenker, Urbhan Liberalim. 231. Buenker labels Bulkley a new stock urban liberal. but

the Plain I)eal'r obituary for his father, Charles Bulklev, December 20. 1895. claimed that

Peter Bulklcy of New England was an ancestor of the Cleveland Bulkley's.