The Panic of 1907, 2nd Edition

Chapter 20Reckoning and a Split

But the progressive movement does not consist of a few self‐constituted leaders. It consists of millions of thoughtful citizens drawn together by a common belief in certain principles. They will permit no combination of special interests and political expediency to secure control of the progressive cause, which is ultimately to redeem democracy and restore government to the people.

—Senator Robert La Follette, June 28, 1912¹

As the economic ripples spread across the country, the mood of the public and its elected representatives dimmed. By December 1907, congratulations for crisis fighters dissolved into demands for investigations. Democratic senators wanted to scrutinize the pattern of the Treasury Department’s deposits of gold in national banks and the government bond issues in November—they hinted darkly at favoritism in the distribution of government largesse. On December 12, the Senate adopted a resolution to investigate and called on Cortelyou to report. He responded in January 1908 with a 232‐page document. In February, Congress resolved to investigate further, though that effort led nowhere. Yet in March, Senator La Follette charged that banks and insurance companies allied with J. P. Morgan and John D. Rockefeller had created the Panic of 1907 to serve their own interests.² La Follette’s allegation resonated for years.

The turn of congressional dialogue played out against a larger canvas. President Roosevelt had announced that he would ...