Top 5 US President Bankruptcies
May 9th, 2007Being President of a powerful country carries an almost incomprehensible amount of responsibility. These men have unlimited stresses and their decisions affect the well being of not only the entire United States but well beyond into the world. An enormous amount of trust and power is given to the handful of men who have held this position so, how is it that a number of these trusted souls have come close to or have been declared bankrupt?
Thomas Jefferson
Way back when our country was newly formed, our third President and author of the Declaration of Independence, Thomas Jefferson, found himself in debt from his time in the White House. You see, the president had hosted state dinners for congressmen, senators, and diplomats as part of his duties. One would think that the government would reimburse Jefferson for these costly affairs. It did not.
After his presidency, Jefferson returned to his plantation. He quickly ran into trouble and did what he could to stay afloat at his plantation. He sold tobacco and flour crops until droughts hit; simultaneously, he had a business making nails that went under when the British started selling cheaper nails.
The last straw for Jefferson was a loan that he co-signed for his son-in-law, Wilson Cary. Cary went bankrupt in 1819 which left Jefferson to pay the debt. In an attempt to stave of the creditors, Jefferson started the risky cycle of borrowing from one bank to pay off another. This continued until his credit ran dry. Jefferson died in debt in 1826 and his plantation was foreclosed upon three years later.
Morals of this story:
Don’t fund lavish state dinners yourself.
Don’t loan money to family.
Abraham Lincoln
In 1832, few Americans had heard of Abraham Lincoln, even fewer thought of him as a future President. Lincoln, who had no money, “bought” his share of a general store on a promissory note. His partner in this business was William Berry. This was probably not the best time to buy a store. At the time most of the trade happening in New Salem was by barter since many had no money to purchase items.
Those that did attempt to buy from the general store were either talked out of a frivolous purchase (alcohol) or informed that it was an inferior product by the ever honest Abe. The general store, named The Berry & Lincoln, was sinking deeper into debt. By 1833, Berry had skipped town and Lincoln assumed all of the debt from the bankrupt stores.
Since there were no bankruptcy laws at the time, Lincoln had to slowly pay off his debt. After seventeen years, he was finally free of the debts from his failed business. Abraham Lincoln became the 16th President of the United States in 1860.
Morals of this story:
A truly honest man is not destined to be a salesman.
Ulysses S. Grant
Next on the list is Ulysses S. Grant, our 18th President. He did not get into trouble with money until very late in his life. After leaving the White House, Grant became business partners with his son’s friend, a young Wall Street hotshot named Ferdinand Ward. Together they started Grant & Ward financial firm, into which Grant invested all of his profit from the sale of his farm.
With Grant being a famous war hero and ex-President, his name attracted big money investors from around the country. In 1884, it was found that Ward had been running a pyramid scheme and the firm closed its doors owing investors millions of dollars. Grant was exonerated while Ward was sent to prison.
Grant was completely broke and learned he had cancer. For money, he sold articles to a magazine and accepted an offer by Mark Twain to publish his memoirs. Grant had the rights to his manuscript transferred to his wife Julia before it was published so she would have a source of income with no fear of losing it to creditors. Ulysses S. Grant died very soon after completing his book in 1885. His memoirs earned over $450,000.
Morals of this story:
It doesn’t pay to be part of a pyramid scheme, even if you are at the top.
William McKinley
In 1893, then Governor of Ohio William McKinley found himself in a bit of trouble. He had co-signed for friend’s business loan. The business went bankrupt and McKinley was expected to pay back the loan. McKinley, not having the money to pay the loan was facing bankruptcy when Mark Hanna, a wealthy associate of McKinley, saved him and paid off the loan.
Four years later, William McKinley became the 25th President of the United States. Mark Hanna went on to become a powerful political figure of the time. He became a Senator from Ohio in 1897 and was easily re-elected in 1900.
Morals of this story:
It can pay to have the President of the United States owe you one.
Harry Truman
The next example is a little bit closer to modern times as it occurred in the 20th century. Soon after he came home from WWI, Harry Truman and a war buddy opened a men’s clothing store. Not long after opening, the buying frenzy wore off and Truman put everything he could into saving the store. Three years after opening the store, Truman closed the doors.
He was so broke that he was forced to live with his mother-in-law. Truman was on the verge of bankruptcy but decided to play the waiting game with the bank. His gamble paid off when the bank holding his $9,000 in debt went bankrupt. Truman graciously bought the note at a much reduced rate, freeing himself from the brink of bankruptcy. Harry S. Truman became the 33rd President of the United States in 1945.
Morals of this story:
It can pay to play chicken.
Nobody is safe from bankruptcy. Even the greatest of men, the most successful of people have money troubles.
May 11th, 2007 at 7:50 am
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