Harry Truman, the millionaire next door

Feb. 06, 2012
Harry Truman, the millionaire next door
Brian Burnes | McClatchy Newspapers

last updated: February 06, 2012 01:17:05 PM

KANSAS CITY, Mo. — In the early 1950s, a contractor submitted a proposal for a residential renovation at 219 N. Delaware Ave. in Independence, Mo.

He detailed his suggested upgrades over several pages of architectural drawings, showing the proposed improvements to the 19th century Victorian home from several perspectives.

The client, however, passed.

"File it," Harry S. Truman wrote his secretary in a note attached to the proposal. The former president of the United States couldn't afford it.

The note, however, never found the circular file, if that was what the famously plain-spoken Truman had meant.

Instead it was filed, literally - secured in a file cabinet and saved.

Last June the note was among the approximately 22,000 pages of Harry and Bess Truman's financial records opened to the public.

Materials made available to researchers included evidence of everyday life in 1950s Independence: income tax returns, bank account statements, canceled personal checks to beauty parlors and department stores, and receipts for gasoline credit card purchases.

Many of the papers covered the period beginning in January 1953, when the Trumans left the White House and returned to Independence, where they lived until the former president's death in 1972 and Bess' passing almost 10 years later.

Scholars have begun to sift through the vast collection. A tour of the documents arranged by Truman Library archivists for The Kansas City Star suggests one clear takeaway: Harry Truman, who struggled much of his life to meet expenses and pay off debts, and who sometimes couldn't afford to hire good contractors, died a wealthy man.

Among the findings:

-Notes in Truman's handwriting document how he sometimes paused to total up his assets, which, by one January 1959 accounting, amounted to more than $1 million.

Perhaps because of financial struggles as a younger man, including disappointments on the Truman family farm in Grandview before World War I and the closing of his downtown Kansas City haberdashery in 1922, the older Truman was a cautious investor. He routinely set aside an estimated 20 percent to 25 percent of his presidential salary for savings or conservative investments such as government bonds.

And he had other investments, at least one of which seems unlikely: a piece of the Los Angeles Rams of the National Football League.

-He was generous with friends and family. The canceled checks include $20 payments to Vietta Garr, an Independence resident who worked for the Trumans for many years as a domestic assistant as well as a trusted travel associate for their daughter, Margaret. The Trumans helped Garr buy a small home in Independence.

The Trumans also established trusts for their four grandsons and gave financial gifts to the children of Truman's brother, J. Vivian Truman.

-Truman remembered rainy days. Two handwritten wills from the early 1950s reminded Bess which of the couple's several savings accounts were jointly held and also directed her to where she could find emergency cash in a safe-deposit box in Kansas City, money that that had come from a White House expense account.

-He also considered his legacy. In the same documents he directed Bess as to where on the family Grandview property he could be buried, how some farm parcels could be used (one possibility was for the location of a Truman library or archive) and how the proceeds of the sale of still other properties would go to Bess and Margaret.

The Grandview farm property represented the principal asset of the Truman family. In one of the handwritten wills Truman wrote that his share of the real estate - about 400 acres - could be worth around a quarter-million dollars "if properly handled." Truman underestimated the ultimate worth of that property by about $140,000.

"By the early 1960s, for the first time, Harry Truman was financially independent," said Ray Geselbracht, special assistant to the Truman Library director. "He had had a hard financial life."

So much of the familiar Truman story is about money or the lack of it, either through bad luck or Truman's own missteps. Truman lamented that reality routinely in his hundreds of letters to Bess Wallace, later Bess Truman, released to the public in the early 1980s.

He didn't go to college because his father had lost the family's money speculating in grain futures in 1901. He spent more than 10 years before World War I working the family farm in Grandview but grew frustrated, complaining of crop failures. In 1916, he invested about $7,500 in an Oklahoma zinc and lead mine that proved unsuccessful.

"There was never one of our name who had sense enough to make money," Harry Truman wrote Bess on May 19, 1916.

"I am no exception."

The same year he became a partner in a venture that leased oil wells across the Southwest. Truman's mother co-signed $5,000 notes that were used as collateral for bank loans. But after the United States entered World War I in April 1917, a subsequent manpower shortage forced the company to dispose of the leases.

He and partner Eddie Jacobson closed their downtown Kansas City haberdashery in 1922. While Truman didn't declare bankruptcy as Jacobson did - as Jackson County eastern judge and presiding judge his salary couldn't be garnisheed, he once explained - Truman spent more than a decade paying off related debts. The last wasn't cleared until the mid-1930s.

While Truman was not among the associates of machine boss Tom Pendergast who faced legal problems after Boss Tom entered federal prison following his 1939 conviction on income tax evasion charges, that proved small comfort.

"Looks like everybody got rich in Jackson County but me," he wrote Bess that October.

Financial struggles followed him to Washington, even as his political career soared. "I'm sorry to talk money and bills and I wouldn't if I were a millionaire," Truman, as a new senator, wrote Bess in July 1935, alerting her to bills from Garfinckel's ($55.85) and Woolf's ($55).

In 1941, Truman placed Bess on his Senate office payroll at a salary that ultimately reached $4,500 a year. Truman had to explain this awkward arrangement, citing his wife's office responsibilities, after he was named President Franklin Roosevelt's running mate in 1944. That year he was receiving $10,000 a year as senator but also was maintaining two residences and supporting various relatives.

He didn't live in a house of his own until he and Bess, after returning from the White House in 1953, bought out the financial interests of Bess' brothers in the Wallace-Truman family home at 219 North Delaware Avenue. The financial files for that year are full of receipts and estimates for upgrades to the property, some of which Truman approved and some of which he didn't.

Yet, given all that, upon Truman's death in December 1972, his estate was worth perhaps $1.2 million, Geselbracht said. Today that amount, according to one federal government website, would represent about $6.4 million in buying power.

The previously unreleased documents detail just how Truman acquired much of that wealth.

When he returned to Independence in 1953, Medicare didn't exist, and pensions were not approved for former presidents until 1958. Truman's tax returns from the early 1950s listed monthly payments of $112.56 from his pension as a retired officer in the U.S. Army Reserve. On his 1953 federal income tax return, Truman listed his occupation as "Writer-Lecturer-Farmer."

He rejected offers of endorsements.

The bulk of the money Truman earned after leaving the White House came from three sources, Geselbracht said. First was a two-volume set of presidential memoirs. "If the book goes as it should there ought to be at least $100,000 left from it," Truman wrote in one of his wills.

Yet expenses left him with only about $37,000.

"Still, it was something," Geselbracht said.

Other income came from a freelance writing career. His 1953 tax return listed $30,000 in income from magazine articles, and $2,500 from newspaper work. That year's tax return declared $5,416.69 in salary as "President of the United States," apparently for the month of January, which was his last in the White House. The president's salary had been increased from $75,000 to $100,000 in 1949.

Presidents also were given a $50,000 annual expense account to cover entertainment costs. From about 1949 through 1952, Truman supervised a major renovation of the White House. In those years the Trumans resided in the nearby Blair House, which didn't have much space for entertaining.

"Truman was able to keep the expense money that he didn't use," Geselbracht said.

In one of the handwritten wills Truman directed Bess to the location of some of that money: a safe-deposit box in Columbia National Bank in Kansas City.

"The cash in the box at the Columbia has been for emergency use," Truman wrote. "I kept it in the little safe in the White House as long as I was there. It came out of the $50,000 expense account that was not accountable for taxes. It should be put into bonds except what you need for immediate use."

Then there was what Truman referred to as the land.

In one of the wills, written in 1953 and dated Dec. 26, the date on which he would die 19 years later, Truman discussed the farm at length and estimated his assets in the following fashion:

Land: $250,000.

Bonds: $250,000.

Cash: $150,000.

Book: $100,000.

Perhaps most significant of this would be the land.

Real estate had played a pivotal role in Truman's life. In 1894, his mother, Martha Ellen Young Truman, inherited an approximately 160-acre farm from her father, Solomon Young, who had died two years earlier. The 160 acres was sold in 1902 after John Truman, the future president's father, lost the family's money speculating in grain futures.

Solomon Young also had assembled a vast spread of about 1,500 acres in southern Jackson County that stood at a significant elevation, allowing a grand view - as in "Grandview" - to whoever stood on it.

It was back to that land that the young Truman - then living the life of a bank employee in downtown Kansas City - reported in 1906 at his father's request. By then the property spread over about 600 acres. It was there that Truman toiled under his father's insistent direction - "He taught us not to fear work," Truman's brother, J. Vivian, once said of their father - and there that, following his father's death in 1914, Truman made the bulk of the decisions.

"I have tried to stick," Harry wrote Bess Wallace on May 27, 1917. "Worked, really did, like thunder for ten years to get that old farm in line for some big production. Have it in shape and have had a crop failure every year."

He left the farm in 1917 for World War I. Yet the place, he complained, proved troublesome to him for years. In the summer of 1940, Jackson County officials foreclosed on the Truman farm, putting his mother out of her home.

"No matter how much front she puts on she hates to leave the farm, even if it has been nothing but a source of worry and trouble to us for about fifty years," Truman wrote to Bess that October.

"The place has brought bad luck and financial disaster to everyone connected with it since my grandfather died in 1892. If we'd been smart and sold it right after the World War ... we could have been no worse off if we'd spent all the money in riotous living."

Friends purchased the farm back from Jackson County in 1945, and by the 1950s Truman and his siblings J. Vivian and Mary Jane held 529 acres. By the late 1950s, the growth of Kansas City southward made the real estate attractive to developers.

Truman sold off his farm holdings in five separate transactions between 1954 and 1958, the most significant sale being the last, involving 220 acres. All told, Truman sold 410 acres and realized a total gain - as estimated by Truman Library archivists studying the former president's tax returns - at about $390,000.

Developers built a shopping center, Truman Corners, and some homes on the land.

"Taxes had gone up considerably on the property, so it probably made sense to sell," said Jon Taylor, associate history professor at the University of Central Missouri and author of "Truman's Grandview Farm."

While Truman had originally intended the farm as the site for a Truman library or archive, Independence later emerged as a viable option for that project. That probably saved the Truman family a considerable sum, Taylor said.

Truman sold the farm at the same time he lobbied Washington officials in favor of a federal pension for former presidents.

"Had it not been for the fact that I was able to sell some property that my brother, sister and I inherited from our mother I would practically be on relief, but with the sale of that property I am not financially embarrassed," Truman wrote John W. McCormack, a Massachusetts congressman, in January 1957.

In 1958, Congress approved legislation authorizing an annual allowance for former presidents, as well as money for office space and staff.

The financial struggles that Truman faced over most of his life framed his outlook, which could be both optimistic and depressed at the same moment.

"I'm the luckiest guy in the world to have you to love," he wrote Bess Wallace in 1917, "and to know that when I've arrived at a sensible solution of these direful financial difficulties I've gotten into, that I'll have the finest, best looking and all the other adjectives in the superlative girl in the world to make the happiest home in the world with."

At the end of the same letter, he put worldly considerations aside in favor of his devotion to Bess.

"Just remember how crazy I am about you and forget all the rest," he wrote.

"You can certainly say when he lands back in Independence in 1953, by the economic standards of his time, he was upper middle class," said Alonzo Hamby, retired history professor at Ohio University and a Truman biographer.

"But he had also gone through two decades or so in which money was tight and things were tough, and that pretty much defined his character. That was when he did a lot of his transactions on a cash basis, probably out of his pocket, and that can make you feel very poor.

"What had happened to Harry Truman in the 1920s and 1930s was basically what had happened to many small business and farm people. He was an inheritor of the 19th century tradition that held that every man should start his own business and make good.

"So he tried to do that. But he was not a really good businessman."

Meanwhile, Geselbracht added, Truman's example as a former president has proven profitable for other former presidents.

"Truman had the first fairly normal post-presidency in a long time," he said.

Warren Harding and Franklin Roosevelt died in office. Woodrow Wilson and Calvin Coolidge died only a few years after the leaving the White House. Herbert Hoover was wealthy before he became president.

"I think Harry Truman established that former presidents should be mindful of the dignity of the office and not go into business, but to lecture or write," Geselbracht said.

"He set a pattern that, for many former presidents, has been very lucrative."

GIVING HIS INVESTMENTS A KICK

Some details in the Truman financial papers surprised even Truman Library archivists.

Chief among them was that the former president, famously indifferent to spectator sports, was an investor in the National Football League.

In 1958, Truman invested $45,000 in the Los Angeles Rams, buying an interest in a team mortgage. Another investor later acquired $20,000 of Truman's stake, leaving the former president with a $25,000 investment. Truman declared interest income from this investment on his tax returns from 1959 through 1963; his highest gain was $1,486 in 1959.

Truman Library staff members think Truman invested in the Rams on the advice of Edwin Pauley, southern California oil entrepreneur and then a part-owner of the team.

Ray Geselbracht of the Truman Library staff said he was surprised to learn of Truman's football investment, given how the rest of Truman's holdings were in such conservative investments as government bonds.

Pauley was a Democratic Party fundraiser in the 1940s. In 1944, he was in charge of that year's Democratic National Convention in Chicago and was at the center of the smoke-filled room of party operatives who installed Truman as Franklin Roosevelt's vice presidential running mate, replacing Henry Wallace.

After returning to Independence from Washington in January 1953, Harry and Bess Truman spent a month visiting Pauley on Moku o Lo'e, or Coconut Island, a 12-acre island that Pauley owned in Kaneohe Bay near Honolulu.

A photo survives of the two of them in a boat during the visit.

"A lot of it was just personal chemistry between Truman and Pauley," Geselbracht said. "That friendship was very deep, and Truman must have admired Pauley's business abilities, something Truman himself never had."

Truman's role as a football investor was ironic in that the former president, who wore breakable eyeglasses as a boy, had never played much football or baseball himself. As president he did his duty, attending the Army-Navy football game and throwing out a ceremonial ball on opening day of the Major League Baseball season.

Truman Library archivists think Truman was never involved with the Rams' management, although he did attend at least one game in Los Angeles, in November 1957, as Pauley's guest.

Truman had other friends who held ownership in iconic sports franchises. After Truman's death in 1972, archivists making an inventory of his wallet noted a 1968 stadium pass to the St. Louis Cardinals.

Truman had been a longtime acquaintance with the baseball team's owner, beer baron August A. Busch Jr.