Sunday, May 22, 2005
Harry Truman’s Drive
In the winter of 1940-1941, before Pearl Harbor brought America into what would become World War II, mail arrived on the desk of a United States Senator detailing waste and profiteering at a new military camp going up in his home state of Missouri.
The Senator was Harry Truman, commonly known not as the Senator from Missouri, but the Senator from Pendergast—T.J. Pendergast being the despicably corrupt Kansas City politician whose political machine first selected Truman for public office.
Had Senator Truman been the “go-along, get-along” politician most Washington insiders had taken him for, he would have let the disturbing letters go, like every other U.S. Senator did.
But T.J. Pendergast—who would go to jail for tax evasion and later gamble away his ill-gotten fortune—had given Truman probably the best advice ever spoken to a newly elected Senator: “Work hard, keep your mouth shut, and answer your mail.”
Truman did all three, and the letters he received (and answered) described widespread waste and corruption in the production boom spreading throughout a country gearing up to be the “Arsenal of Democracy,” as Roosevelt called the work to supply England in its desperate battle with Germany.
Incensed, Truman decided to see for himself what wasn’t being reported in the Washington Post: so, he got in a car and drove around the country, alone.
Truman drove 10,000 miles, south to Florida, up through the Midwest and on into Michigan, visiting plants and military installations, taking notes on what he saw with his own eyes. He took no aides, hired no planes, visited no golf courses and stayed in no first-rate hotels. And this was before the interstate highway system.
What Truman saw was even worse than the letters had described. Contractors were paid cost-plus to build plants and warehouse—and so they not only inflated their costs, but they built things badly. Surplus equipment was left out in the snow, to rust, owing to no controls and no accountability. Surplus workers with nothing to do were getting paid to sit around playing cards and smoking.
Truman came back to Washington and reported his findings to President Roosevelt, who smiled and chatted amiably and waved him goodbye. Sensing nothing was going to happen, Truman reported to the Senate what he had seen—alone and through his own eyes—during 10,000 miles of traveling across the United States.
It was a bombshell, and it changed everything, not only for Truman but for the country as a whole.
The Senate established what became known as The Truman Committee to look into waste and excess in the war boom, and Truman himself set forth the ground rules: there would be no grandstanding by the Senators and no whitewash by the Admininstraion. Above all, the committe would be driven by one thing:
"There will be no substitute for the facts."
The Truman Committee produced 50 reports over time, each voted out unanimously ("Men tend to agree when presented with the facts," one of the Republican Senators noted) and proved invaluable to exposing flaws in, and suggesting fixes for, the American war effort.
Harry Truman was no longer known as the Senator from Pendergast. In time, he became the President from Independence.
Investors, I think, should keep in mind those Senators who chose to stay within the District of Columbia while Harry Truman was driving himself to factories and military bases around the country.
Human beings find instinctive comfort in the company of crowds. To separate from the herd is to invite attack from predators. In nature it is physical attack; in the civilized world of Wall Street as well as the polite, rules-bound world of Congress, it is emotional attack: ridicule, humiliation, ostracizing.
Like those Senators who stayed in town, skirt-chasing and drinking themselves stupid at the Willard Hotel while trusting the newspaper articles and what their “leadership” assured them was a valiant drive to increase the nation’s productive capacity, investors who rely on company press releases, reassuring conference calls, optimistic analyst reports and the safety of the crowd are, in fact, risking more than they know.
Because crowds, like those senators, can be stupid, mediocre, timid beasts.
There are no group thinkers at the top of the Forbes 400 list of wealthiest Americans—just a college dropout who started a software company and his childhood friend; an investor who makes only one or two huge investments a year; and the descendants of a guy from Oklahoma who built a quarter-trillion dollars a year retail chain from a single store in Bentonville, Arkansas.
In Harry Truman’s case, he too left the crowd behind—risking his entire political career to investigate first-hand the facts behind the disturbing accounts contained in letters nobody wanted to believe might be true. And the reward, in time, was the Presidency.
All because he answered his mail.
I Am Not Making This Up
NB: This came out of re-reading David McCullough's excellent Truman biography, in anticipation of his new book, 1776. The insights about Truman are his.
Posted by Jeff Matthews at 12:31 PM