1911* THE PANAMA LIBEL SUIT. HISTORY OF THE CASE OF THE UNITED STATES v. THE PRESS "Exhibit B. "The Panama Libel Suit" in The Story of Panama : Hearings on the Rainey Resolution (1912), pp. 253-265. The same account is found in the Roosevelt Panama Libel Case Against The New York World. New York, Press Publishing Co., 1911. KF224. PIN43. See also The Roosevelt Panama Libel Case Against the New York World and Indianapolis News. New York, Press Publishing Co., 1910. KF224.P7N42: The Indianapolis News Panama Libel Case. Indianapolis, Fulmer-Cornelius Press, 1909. Law, Trials (A&E), Smith, D.; and Clyde Peirce, The Roosevelt Panama Libel Cases. New York, Greenwich Book Publishers, 1959. E756.P4. 96-673 77-36 Mr. Roosevelt's Panama iibel sult against the World had its genesis during the last presidential campaign in a complaint made by William Nelson Cromwell through his lawyer, W. J. Curtis, to District Attorney Jerome on October 1, 1908, that certain persons were trying to blackmail him by reason of his connection with the sale of the Panama Canal to the United States. On October 2 the World received information of Mr. Cromwell's complaint, and a reporter was sent out to cover the story. He was unable to get any conformation from the district attorney's office, and so reported to the city editor. Nothing was written and the matter was dropped. Late the same evening Jonas Whitley, a former newspaper man employed by Mr. Cromwell as a press agent, came to the World office and told the managing editor that the World was about to print a Panama news article that was entirely false. The managing editor knew nothing about it, so he inquired at the city editor's desk. He was told that the World had no Panama article of any kind or description, but that it had been trying to verify a report of a complaint made by Mr. Cromwell to the district attorney and had been unable to do so. MR. WHITLEY STATED SUBSTANCE OF THE COMPLAINT. Mr. Whitley had voluntarily related the substance of the complaint. He sald that the persons who were alleged to be trying to blackmail Mr. Cromwell pretended that Charles P. Taft and Douglas Robinson were members of a syndicate interested in the sale of the Panama Canal, and these persons threatened to exploit the story for political purposes unless Mr. Cromwell bought them off. A synopsis of Mr. Whitley's account of the Cromwell complaint was then dictated to a stenographer, and the typewritten copy was turned over to Mr. Whitley to revise. This manuscript is still in possession of the World. It shows that Mr. Whitley scratched out the name of Charles P. Taft and substituted the name of Henry W. Taft. Then be erased the name of Henry W. Taft and restored the name of Charles P. Taft. The news article, as revised by Mr. Whitley, was printed in the World the following morning--October 3, 1908. It contained the following: "In brief Mr. Curtis told Mr. Jerome it had been represented to Mr. Cromwell that the Democratic national committee was considering the advisability of making public a statement that William Nelson Cromwell, in connection with Mr. Bunan-Varilla, a French speculator, had formed a syndicate at the time when it was quite evident that the United States would take over the rights of the French bondholders/in the De Lesseps Canal, and that this syndicate included among others Charles P. Tuft, brother of William H. Taft, and Douglas Robinson, brother-in-law of President Roosevelt. Other men more prominent in the New York world of finance were also mentioned. According to the story unfolded by Mr. Curtis it was said that these financiers invested their money because of a full knowledge of the intention of the Government to acquire the French property at a price of about $40,000,000, and thusbecause of the alleged information from high Government sources-were enabled to reap a rich profit." After Mr. Whitley had finished revising this article he telephoned to Mr. Cromwell and then told the managing editor of the World-that Mr. Cromwell would like to make a statement. Very late that night Mr. Cromwell telephoned to the World office and dictated a statement to one of the World's stenographers. The stenographer's notes were read over to him to make sure that there was no error: he approved them, and this statement was printed exactly as dictated by Mr. Cromwell. It said in part: "Neither I nor any one allied with me, either directly or indirectly, at any time or in any place in America or abroad. ever bought, sold, dealt in, or ever made a penny of profit out of any stocks, bonds, or other securities of either the old Panama Canal Co. or the New Panama Canal Co., or ever received for the same a single dollar of the 40 millions paid by the United States. I make this the most sweeping statement that language can convey. As everybody connected with the affair knows, I abstained from receiving the 40 millions in my own hands at Washington or New York as the general counsel of the company, and myself arranged for the payment of the entire 40 millions direct from the Treasury of the United States through the bankers of the Government into the Bank of France at Paris to the credit of the liquidators of the two companies. There it remained subject to the order of the quidators uutti distributed by them to the hundreds of thousands of bene ficiaries, and not one dollar of it ever came to me or anyone in anywise connected with me. Of course, I do not refer to our regular compensation as counsel. I suppose it will be years before the beneficiaries will all be identified and the distribution completely made." The Cromwell complaint was never submitted to a grand jury; there was no grand jury inquiry as to this alleged attempt at blackmail, and the legal proceedings on Mr. Cromwell's part against the alleged blackmailers ended with the filing of the Cromwell complaint. It was Mr. Cromwell's complaint and that alone which brought the name of Charles P. Taft into the Panama matter. It was Mr. Cromwell's press agent who brought the names of Charles P. Taft and Douglas Robinson into the World office. But for Mr. Cromwell it is probable that no Panama story would have been printed during the campaign, and it is certain that the names of Charles P. Taft and Douglas Robinson would never have been published in connection with the affair. INDEBTED TO MR. CROMWELL FOR NOTORIETY. When Mr. Cromwell's complaint was made public Mr. Charles P. Taft emphatically denied that he had any connection whatever with a Panama syndicate or with the sale of the canal. Mr. Robinson refused to discuss the matter for publication. It is fair to say that the information in the possession of the World completely substantiates Mr. Charles P. Taft's denial that he had any interest, direct or indiret, in the sale of the Panama Canal. Why his name should have appeared in Mr. Cromwell's complaint to Mr. Jerome the World has no means of knowing. As to Mr. Douglas Robinson there is nothing to show that he was an associate of Mr. Cromwell's in the sale of the canal. He also is indebted solely to Mr. Cromwell for the notoriety. Great interest was aroused in political circles by Mr. Cromwell's complaint, and the World, as well as other newspapers, tried to ascertain if any facts could be discovered in addition to those which had been dragged to light by Senator Morgan in 1906 in the course of the investigation of the Panama Canal matter by a committee of the United States Senate, which inves'igation had been thwarted by Mr. Cromwell's refusal to answer the most pertinent questions put to him on the ground that as counsel for the New Panama Canal Co. his relations with the canal vendors were privileged and confidential. Unsuccessful attempts were made to get at the records in Paris and WashIngton. The World at great expense retained an eminent English lawyer, a ember of Parliament, who went to Paris and made an Investigation on behalf of this paper. Very little additional information could be obtained, and he reported in part as follows: "I have never known in my lengthy experience of company matters any public corporation, much less one of such vast importance, having so completely disappeared and removed all traces of its existence as the New Panama Canal Co. This company having purchased the assets of La Compagnie Universelle du Canal Interoceanique de Panama (the old or De Lesseps Panama Canal Co.), brought off the deal with the American Government. So thorough has been its obliteration that only the United States Government can now give information respecting the new company's transactions and the identity of the Individuals who created it to effectuate this deal, and who for reasons best known to themselves wiped it off the face of the earth when the deal was carried through. I consulted leading French lawyers, and they declared that there was o machinery, legal or otherwise, by which its records could be brought to light. ⚫ The stock of the new company was originally registered, so transactions in it could be traced, but power was subsequently obtained to transform it into “bearer" stock, which passed from hand to hand without any record being preserved. There is nothing to show the naines of the owners of the stock at the time of the liquidation of the company and who actually received their proportions of the purchase money paid by the United States. No record exists here of a single person who received the money or of the proportions in which it was paid. The liquidation of the new company was finally closed on June 30 last, and the offices of the liquidators were shut. No one is there to give the slightest information concerning it, although questions are still arising necessitating information. The American ambassador in Paris was entitled to the archives of the company for his Government, and those archives should include a list of the persons who received the purchase money paid by the United States." CHARGES WERE UNCHALLENGED DURING CAMPAIGN. In all, The World printed six articles on the Panama Canal purchase and on the Panama revolution of 1903, giving currency to the charges that there was a syndicate of Americans who were interested in and received some of the $40,000,000 which the United States pald to the French canal company for the canal property, and that the Administration at Washington and some of the individuals who then composed it were coguizant of and had supported the plans for the revolution in Panama, as a result of which the present Republic of Panama seceded from the Republic of Colombia and gave to the United States those sovereign rights over the Canal Zone which, under its constitution, Colombia was unable to grant. These articles were reproduced in many papers throughout the country, and Mr. Rainey, of Illinois, expressed his intention of forcing a full congressional investigation, if possible, when Congress convened in December. At this time Mr. Roosevelt, oblivious of the traditions of his high office, was personally managing Mr. Taft's candidacy. Regardless of his obligations as President of the United States, he had taken charge of the Republican campaign and was the actual boss of the Republican Party. He allowed the Panama charges to pass unchallenged, paid no attention to the Panama articles, . and refused to regard Panama as an issue. Much less did he look upon these articles as a libel upon the United States Government, upon himself, or upa any of his associates. On the day before election, however, the Indianapolis News, the leading paper in Indiana, which had refused to support the Republican national and State tickets in the campaign, printed an editorial on the Panama scandal and asking who got the $40,000,000 the United States had paid for the canal. Morally the election in Indiana was a decisive Republican defeat, as, although Mr. Taft carried the State by a narrow plurality of 10,731, a Democratic goyernor and a Democratic legislature were elected, a Democrat was sent to the United States Senate in place of Mr. Hemenway, and only three Republican Representatives were elected out of a delegation of 13. Mr. Roosevelt and Mr. Roosevelt's friends were greatly mortified and attributed the result largely to the Indianapolis News. PRESIDENT ROOSEVELT BREAKS OUT IN DENUNCIATION. Accordingly, on November 29, 1908. William Dudley Foulke (the convenient gentleman to whom Mr. Roosevelt wrote the famous letter denying that he had used the Federal patronage to bring about Mr. Taft's nomination) sent to the President the Panama editorial printed in the Indianapolis News on November 2, and informed Mr. Roosevelt that "if the statements of the News are true our people ought to know it; if not true, they ought to have some just means of estimating what credit should be given in other matters to a journal which disseminates falsehoods." Mr. Roosevelt in reply on December 1, 1908, denounced the conduct of Mr. Delavan Smith, editor of the Indianapolis News, as "not merely scandalous but Infamous." He called him "a conspicuous offender against the laws of honesty and truthfulness," occupying "the same evil eminence with such men as Mr. Laffan of the New York Sun." He said that such newspapers as the Indianapolis News and the New York Sun "habitually and continually and as a matter of business practice every form of mendacity known to man"; that "the most corrupt financiers, the most corrupt politicians, are no greater menace to the country than the newspaper men of the type I have described." Dealing with the purchase of the Panama Canal, Mr. Roosevelt asserted that the United States "paid $40,000,000 direct to the French Government. getting the receipt of the liquidator appointed by the French Government to receive the same"; that "the United States Government has not the slightest knowledge as to the particular individuals among whom the French Government distributed the sum"; that "this was the business of the French Government"; that "so far as I know there was no syndicate"; that "there certainly was no syndicate in the United States that to my knowledge had any dealings with the Government, directly or indirectly"; that "the people have had the most minute official knowledge" of the Panama affair; that "every important step and every important document have been made public"; and that the "abomin able falsehood" that any American citizen had profited from the sale of the Panama Canal" is a slander, not against the American Government, but against the French Government." THE WORLD'S EDITORIAL BEPLY TO PRESIDENT ROOSEVELT. Up to this time the World had not discussed the Panama matter editorially, but when Mr. Roosevelt went so far as to tell the American people that the United States Government “paid the $40,000,000 direct to the French Government" it seemed to the World that the time had arrived when the country was entitled to the truth, the whole truth, and nothing but the truth. In an editorial flatly challenging some of Mr. Roosevelt's statements, and proving its case by the official records, the World demanded a congressional investigation into the Panama scandal. It said: "In view of President Roosevelt's deliberate misstatements of facts in his scandalous personal attack upon Mr. Delavan Smith, of the Indianapolis News, the World calls on the Congress of the United States to make immediately a full and impartial investigation of the entire Panama Canal scandal. ‹* “The natural query of the Indianapolis News as to Who got the money?' was based on the World's historical summary of Mr. Cromwell's connection with the Panama Canal. The inquiry was originally the World's and the World accepts Mr. Roosevelt's challenge. If Congress can have all the docnments in the case, as Mr. Roosevelt says, let Congress make a full and complete investigation of the Panama Canal affair, and in particular of William Nelson Cromwell's relations with the French company, with Panama, and with the Government of the United States. Let Congress officially answer the question. 'Who got the money?' "Mr. Roosevelt says 'the Government paid this $40,000,000 direct to the French Government'; Mr. Cromwell testifies that the United States paid the money to J. P. Morgan & Co. Mr. Roosevelt says the French Government distributed the sum'; Mr. Cromwell testified as to how he distributed it. Mr. Roosevelt talks of getting the receipt of the liquidator appointed by the French Government to receive the same;' Mr. Cromwell testified: Of the $40,000,000 thus paid by the United States Government $25,000,000 was paid to the liquidator of the old Panama Canal Co. under and in pursuance of an agreement entered into between the liquidator and the new company. Of the balance of $15,000,000 paid to the New Panama Canal Co. $12.000.000 have already been distributed among its stockholders and the remainder is now being held awaitlng final distribution and payment.' Whether Douglas Robinson, who is Mr. Roosevelt's brother-in-law, or any of Mr. Taft's brothers associated himself with Mr. Cromwell in Panama exploitation, or shared in these profits, is incidental to the main issue of letting in the light. Whether they did or not, whether all the profits went into William Nelson Cromwell's hands or whatever became of them, the fact that Theodore Roosevelt, as President of the United States, issued a public statement about such an important matter full of flagrant untruths, reeking with misstatements, challenging llue by line the testimony of his associate, Cromwell, and the official record, makes it imperative that full publicity come at once through the authority and by the action of Congress." President Roosevelt then took steps to find out if among the records and archives received by the Isthmian Canal Commission from the New Panama Canal Co. there were any compromising documen's, In obedience to his orders the documents were examined by Judge Paul Charlton, of the War Department, and Mr. Rogers, general counsel of the Isthmian Canal Commis slon. Their report was transmitted by Gen. Luke Wright, then Secre ary of War, to President Roosevelt on December 14, 1908. It was to the effect that the records and archives received from Paris con ained solely engineering data. |