Title:
The Panama Libel Cases

Author:
Clyde Peirce

Date:
1937

Source:
Indiana Magazine of History, Volume 33, Issue 2, pp 171-186

Article Type:
Article

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The Panama Libel Cases*

CLYDE PEIRCB

The Roosevelt-Panama Libel Cases arose out of a melodramatic series of events connected with the purchase of the PanamaCanal Zone, which find their focal points before and after the Presidential election of 1908. The affair became intensified after the election, led to a second congressional investigation of the purchase, and resulted in the criminal libel cases instigated by President Theodore Roosevelt against Joseph Pulitzer of the New YorkWorld and Delevan Smith of the IndianapolisNews. The Pulitzer case reached the United States Supreme Court. The author has had access to newspaper clippings covering the cases from the shelves of the IndianapolisNews, and to the personal clippings of President Roosevelt, which were forwarded from the Roosevelt Memorial House Library in New York City.

A brief account of the acquisition of the Canal Zone is necessary to a better understanding of the cases. After the bankruptcy of the old de Lessepps Company, a New Panama Canal Company was organized to revive the project. The outstanding character in the reorganization was Philippee Bunau-Varilla. In the United States two dummy organizations were formed to Americanize the project. The character in this action was William Nelson Cromwell.

Bunau-Varilla was a French engineer aspiring to de Lessepps' fame. His efforts took him to several nations, but in the United States he travelled more widely arousing American interest in his company, and, in events following, he was labeled by some as the "arch-conspirator" in the Panama revolt and in the purchase of the Zone by the United States.1

Cromwell was designated by some as the "arch corruptionist" in the affair. He was a New York attorney and his clients were classed as "trustsquot;. Further, he was attorney for the Panama Railroad, the New Panama Canal Company, and later for the Republic of Panama. In the framing of the Republican platform in 1900, he was able to change a


  • * This paper was read before one of the sessions of the annual Indiana History Conference in the Lincoln Hotel at Indianapolis on December 12, 1936.
  • 1 Henry F. Prtngle. Theodore Roosevelt, A Biography (New York, 1931) See his two chapters, "The Setting For a Melo-Drama" and "I Took Panama," for an excellent short account of the purchase of the Canal Zone and the Libel Cases. See also The Story of Panama ("Hearings on the Rainey Resolutions before the Committee on Foreign Affairs of the House of Representatives," 1913), 70; New YorkWorld, Oct. 4, 1909.
plank which favored a Nicaraguan Canal to one in support of an "isthmian canalquot;. On one occasion, he was reprimanded for maintaining a strong lobby in Congress favoring the Panama Canal site. Soon after, however, he contributed $60,000 to the Republican campaign fund.2

After some previous reports, the Walker Canal Commission made a final report. This favored a canal through Nicaragua since the French Panama site and equipment would cost $40,000,000. The Hepburn Bill incorporated the committee's report and it passed the House by 308 to 2 on January 9, 1902. From that date until the bill came up in the Senate is a most interesting period. During this time Bunau-Varilla and Cromwell made names for themselves. They had three things to do: get the company to sell for $40,000,000; get the canal bill changed to permit the possibility of still selecting the Panama line; and get Colombia to grant the transfer. Consent in regard to sale and transfer was obtained, but changing the Hepburn Bill took some scheming. Bunau-Varilla set out to make the Senate "volcano conscious", since some eruptions had just occurred in Nicaragua. Buying Nicaraguan stamps picturing an active volcano, he pasted a stamp in the center of ninety different letters and wrote the following: "Young nations like to put on their coat of arms what most symbolizes their moral domain or characteristics of their soil. What have the Nicaraguans chosen to characterize their coat of arms or their postage stamps? Volcanoes!" He mailed these letters just a few days before the bill was to come up in the Senate so as not to allow time for newspaper rebuttal3 The letters with Senator Hanna's speech carried the day. The Hepburn bill was amended to authorize the President to purchase the Nicaraguan site unless the French rights to the Panama route could be bought for $40,000,000. The bill as amended passed the Senate by a vote of 42 to 34 on June 25, 1902. The same so-called "stamp act" worked on the House. The way was clear except that the Senate demanded a satisfactory treaty with Colombia within a reasonable time to sanction the transfer and secure proper rights in the canal region.

That treaty now occupied Bunau-Varilla and Cromwell. Until this time President Roosevelt was inactive, but he now


  • 2Story of Panama. 7–1; 30–02 passim.
  • 3 Philip Bunau-Varilla. Nicaraqua or Panama, 31; Prinsgle, Roosevelt, 306.
got busy to help secure the treaty. Drafts were drawn by both countries but rejected or drastically amended by the United States Senate. A final draft was sent to the Colombian Government. Dictator Marroquin finally convened his Senate at Bogota. This body sat all summer in 1903 and finally adjourned without ratifying the draft. The adjournment occurred in the face of continued threats of dire consequences by the United States made through Secretary of State John Hay, Bunau-Varilla and others, possibly including Roosevelt. It was said in 1914 that an American railroad lobby prevented ratification.4

President Roosevelt was baffled. He was advised that he could go ahead building the canal or take the Nicaraguan route. Word of an impending revolt in Panama stayed his hand. Curiously enough a prophetic article was published by Joseph Pulitzer's paper, the World, describing just what was going to happen in Panama. This article, it was later found, was written by Cromwell's press agent.

Cromwell and Bunau-Varilla were busy and President Roosevelt ordered United States ships to draw near to Panama. All knew such a revolt could not be successful without aid. Meantime Colombia heard of trouble brewing in Panama and sent troops to Colon. On November 2, 1903, the United StatesS.S. Nashville arrived off Colon. On the same day, President Roosevelt issued his famous "50-mile order" to prevent foreign troops from landing in Panama. In the evening of the same day 500 Colombian troops landed at Colon, since the Nashville did not receive the order until next day. However, Cromwell's agents took the Colombian officers by subterfuge to Panama City and held them.

At Panama City, the Colombian governor was favorable to the revolution, which was scheduled for 8:00 A.M. on November 3, 1903, during a band concert. At Colon the American consul informed acting-Secretary of State, Francis B. Loomis, that a revolt was in progress. Loomis in turn notified the consul at Panama City and asked him to keep the State Department informed. The consul at Panama City wired back that no revolt had yet occurred, but it was expected that night. These communications later led to the suspicion of American instigation. However, at 5:00 P.M, at


  • 4Morning Searchlight (Redding, California) Feb. 24, 1904; Pringle, Roosevelt; Story of Panama.
Panama City, the revolt broke out prematurely and all was over by 5:49. Officers of Colombia were paid off by the agents of Cromwell and Bunau-Varilla, and, a few days later, Dr. Manuel Amador, Panama Railroad physician, was elected President of Panama. Contrary to international law, American consuls were ordered to recognize the Republic officially. On November 10 Bunau-Varilla had himself appointed Ambassador from Panama to the United States, even though envoys were at the time already en route to Washington, and a treaty was signed between our federal government and Panama on November 18, just sixteen days after the revolt.5 Thus ended what President Roosevelt described in these words: "It must be a matter of pride to every honest American, proud of the good name of his country that the acquisition of the canal… [was] as free from scandal as the public acts of George Washington and Abraham Lincolnquot;.

Payment of the $40,000,000 was made through J. P. Morgan and Company. According to Cromwell, the money was all paid to a bank in Paris and then divided between the receivers of the old Company and the New Panama Canal Company. The papers, equipment and other belongings of the old company were turned over to officials of the United States. Some of the papers were sent to Washington and some to Panama.

The LouisvilleCourier-Journal, edited by Colonel Henry Watterson, charged corruption from the beginning. Bunau-Varilla defended the deal through the New YorkSun. Watterson said the $40,000,000 was for the thieves in France and "grey wolves of the American Senatequot;. On January 17, 1904, the World published nearly a full page article charging corruption. Neither gave any source of information, and no names were mentioned.

In February, 1904, national banks were ordered to be ready to make the payment and one bank president said that about one half the money would remain in the United States.'6 The New YorkTimes asserted that the whole thing was more understandable now that "some of our blessed Yankees" were in on it.7 Agitation was kept up by the LouisvilleCourier-Journal,


  • 5 J. H. Latane; Amerioan Foreign Policy (New York 1927), 517 passim; Story of Panama, 73 passim; Leander T. Chamberlain "A Chapter of National Dishonor," North American Review (Feb., 1912), CXCV, 14–74.
  • 6New YorkTimet, February 4. 9, 1904.
  • 7Ibid.
and Senator John T. Morgan from Alabama was able to get a Senate investigation. His chief witness was Cromwell, but he refused to answer pertinent questions on grounds of professional ethics. Asked to produce a list of stockholders of the New Panama Canal Company, he replied that none existed.

According to the IndianapolisNews, William B. McKinley of Illinois was to be drafted as Treasurer of the Republican National Committee. Apparently Cromwell saw to it that George R. Sheldon was put in the position.8 Sheldon was a corporation lawyer. Advance sheets of the Democratic Textbook, appearing in August, incorporated the foregoing information from the News. A month later the News asked whose $50,000 it was that Cromwell contributed, his or Harriman's? It also charged that the change from Nicaragua to Panama "was all done on the basis of ‘a consideration’ "9

On October 1 William J. Curtis, a partner of Cromwell filed a complaint in the District Attorney's office charging that attempts were being made to blackmail Cromwell. The alleged "blackmailers" had charged that an American syndicate made money in the Canal deal and mentioned Charles P. Taft and Douglas Robinson, the latter a brother-in-law of President Roosevelt. On October 3 the World published the alleged blackmailer's story in an early edition. In a later city edition, it published the story with Cromwell's denial. The IndianapolisNews received the early edition only and did not know of Cromwell's public denial.

On October 6 the ChicagoDaily News published a Paris dispatch on the same subject, but named Charles P. Taft, Cromwell and J. P. Morgan. The correspondent of the IndianapolisNews tore this article out of the Daily News and sent it to his paper, which published a similar article together with an editorial.10 On October 8 the ChicagoJournal published an article, entitled "Charles P. Taft and the Big Canalquot;. On the same day a News item mentioned "The Cromwell-Morgan-C.P. Taft Panama Canal Deal" as a big campaign question from which some serious charges might develop. On the next day, the News made editorial comment to the effect that the public should know the truth before election day. On October 14 an Associated Press dispatch stated that all records


  • 8IndianapolisNewt, July 8, 1908.
  • 9Ibid., Sept. 26, 1908: Panama Label Case (by IndianapolisNees), 7.
  • 10Ibid., 7, 292.
of who got the $40,000,000 were destroyed on the eve of the Republican National Convention in Chicago.11

Meantime the World tried to get at the facts and employed a lawyer, a member of the House of Commons. He investigated in Paris and reported that in all his experience the records of a corporation had never been so completely covered up or destroyed. On the other hand, the News made no effort to get the facts, but relied on other newspaper articles, especially those in the World. Louis Howland, News staff member, on the witness stand on one occasion said: "We hope that the New YorkWorld… will persist. It may be short on evidence for a time, but it can be long on presentation… ", by which "He meant that they couldn't prove it to the satisfaction of a cross-examining lawyer, but they might be morally certain of itquot;. Without a doubt, other papers acted as did the News.

On October 20 the News reported that a gang of speculators got the money and that vehement denial was not proof. Next day the World wrote that Gen. G. W. Davis, governor of the PanamaCanal Zone, was dismissed because he claimed to have found evidence of graft in the deal. The News stated that some "select manipulators" worked out an international transaction which "reeked with deceit, sharp practices and graft", and declared that the deal took its place with the "credit Mobilier, the Whiskey Ring thefts, and the Star Route fraudsquot;. About this time, the Democratic party press announced that Representative Henry F. Rainey of Illinois would demand a Congressional investigation. However, the Democratic committee that investigated the story turned it down for lack of bona fide evidence.

The Omaha World-Herald brought Sheldon of the Republican National Committee into the deal, and the Rocky Mountain News brought in Mark Hanna. The ChicagoJournal declared that the records were in Washington and that, since the canal belonged to the United States, the people should be able to see the records, adding that, if President Roosevelt didn't furnish them, the public could draw its own conclusions.

On October 29 the IndianapolisNews published C. P. Taft's denial, but contended that he failed to show evidence or proof. On November 2, the night before election day, the


  • 11ChicagoInter Ocean, Oct. 14, 1909; Panama Libel Case, 298; New YorkWorld, Oct. 14, 1909.
News stated editorially that election day was here yet the truth of the deal was unknown to the public.

The result of the election gave the News a moral victory. William H. Taft's majority was only some 10,000 votes in Indiana, while ten of the thirteen representatives elected in the state were Democrats, and one senator would be a Democrat. One citizen who must have resented the activities of the News was William D. Foulke of Richmond, Indiana. On December 7 an Associated Press dispatch revealed the contents of a letter from Foulke to President Roosevelt calling the latter's attention to enclosed News editorials. The dispatch also gave President Roosevelt's reply to Foulke. It was, briefly, that the records were in Washington and any reputable citizen could see them; that the public had received detailed knowledge of the deal; that a syndicate existed was a lie; that Robinson was lied about for that reason; that Delevan Smith of the News was a "conspicious offender against the laws of honesty and truthfulness, but he does not stand alone. He occupies the same evil eminence with such men as Mr. Laffan of the New YorkSun, editorials of whose paper you or others have from time to time called to my attention, just as you have those of the Newsquot;.12 No mention was made of Pulitzer of the World.

Thus, after at least five months, President Roosevelt took public notice of the various charges and picked out only the News and Sun. Delevan Smith and Laffan were made members of the famous "Ananias Clubquot;.

Smith, in a dignified manner, stated that the articles were published in routine fashion, that the information came from a prominent New York paper, and that he was not in Indianapolis when the articles referred to were written and published. A few days later the News asked, editorially, "Who Got the Money?"13

Laffan, however, refused membership in a club when appointment to it came from one whose letter "took its place among the most valued incunabula of veracity", and from one. who, if he was in a gentleman's club of private citizens, would be thrown out for such methods of personal attack.

Roosevelt had made several errors in his letter and these were especially pointed out by the World on December 8,1908. This paper had been most vociferous in the matter and thus


  • 12IndianapolisNews, Dec. 7, 1908.
  • 13lbid., editorial, Dec. 10, 1908.
was jilted by the omission of Pulitzer's name. It demanded a congressional investigation at once. The article read, in part:

That the U.S. Government paid $40,000,000 for the deal is not questioned. But who got the money?

President Roosevelt's reply to this… question is… a string of abusive and defamatory epithets. But he also makes the following statements as truthful information…:

"The U.S. Government did not pay a cent of the $40,000,000 to any American citizen. The Government paid… directly to the French Government, getting the receipt of the liquidator appointed by the French Government to receive same.

"The U.S. Government has not the slightest knowledge as to the particular individuals among whom the French Government distributed the same.

"So far as I know, there was no syndicate; there certainly was no syndicate in the United States that to my knowledge had any dealings with the Government directly or indirectly."

To the best of the World's knowledge and belief each and all of these statements… are untrue, and Mr. Roosevelt must have known they were untrue when he made them.

The World further stated that Cromwell was the only man who knew and that Cromwell's confidants were Theodore Roosevelt and Elihu Root; that Cromwell consummated the revolt, and arranged the terms of payment through J. P. Morgan; that this was all in the original story of the World; that the World accepted Mr. Roosevelt's challenge; that, if Roosevelt had cared for the truth, he could have read Cromwell's testimony of 1906 to see how Cromwell distributed the money; that Roosevelt could have read the "syndicate subscription agreement" on page 1150, volume II, of the testimony before the committee, and have seen for himself. The World declared that fraud was insignificant when the "President of the United States, issued a public statement… full of flagrant untruth, reeking with misstatements, challenging line by line the testimony of his associate, Cromwell, and the official records…. "

Some questions may be asked. Why did Roosevelt lambast Laffan and Smith and omit the World or Pulitzer? Then, why did Pulitzer "accept Roosevelt's challenge"? And, why did Roosevelt wait so long to acknowledge the alleged frauds? These questions cannot be answered at this writing. Currency was given to the idea that, since the News supported Fairbanks as a presidential nominee, there was a close friendship between the editor of the News and Fairbanks. Some said Smith felt that he was not given proper consideration as to some Oliver typewriters and linotype machines that his companies offered to sell the government.14 Smith and Fairbanks were cousins and a belief was apparent among some that Fairbanks was interested in the News company. The News alleged that the real offense was that "it has refused to burn incense before a man whose nostrils are greedy for incensequot;. This meant, support Taft's candidacy. In a different vein the News mentioned "The President's latest… hot stuff—decidedly hot; altogether stuff", and claimed that he was "Just getting into shape for the African tripquot;.

The NashvilleTennessean put it in jingle thus:

Let not any plebeian rabble, Mock Smith and Laffan thus laid low; 'Twas no common clout that felled them—'Twas the ‘Big Stick’ struck the blow. Three cheers for America—on March 5,1909.15

There was support for the President's acts. The Milwaukee Sentinel said: "It is the anger of an honest man who has slaved for the publicquot;.16 The ChicagoTribune held that the story of the President's critics was absurd.17 Many other papers approved his stand.

Things seemed rather quiet at the World office for a few days, which led the LouisvilleCourier-Journal to ask: "Where are you, Mr. Pulitzer? Step right to the front and the Courier-Journal will stand right behind you."18

Pulitzer, who had been yachting for several months, when informed of the affair, remarked to his editors: "If there is any trouble you fellows are sure to be in on itquot;.19

On December 12 the World published an editorial entitled "On Roosevelt's Veracity", and demanded an investigation to find out "Who Got the Money?"

On December 14 the CincinnatiTimes-Star, owned by Charles P. Taft, published that gentleman's denial and stated that he reserved the right to sue for redress. The BostonTranscript suggested that it would be better for the government to sue since it had the secret service, statistical factories, loyalty of federal employees, and the power of public attention.


  • 14St. PaulNews, Dec. 10, 1908; South BendTimes, Dec. 8, 1908.
  • 15NashvilleTennesaeean, Dec. 8, 1908.
  • 16 Milwaukee Sentinel. Dec. 10, 1908.
  • 17ChicagoTribune. Dec. 11, 1908.
  • 18LouisvilleCourier-Journal, Dec. 12, 1908.
  • 19 Don C. Seitz. Joteph Pulitzer, His Life and Letters (New York, 1924).

About a week earlier, Roosevelt wrote Henry L. Stimson, United States Attorney for New York: "I do not know anything about the law of criminal libel, but I should like to have it invoked against Pulitzer, of the World…. Would you have his various utterances… looked up?" Next day, before the Lakes to the Gulf Waterway Association, the President said he was proud of his Panama accomplishments especially because they were beyond reproach and that a libel action was possible against those charging corruption. Soon came reports of activity in the Attorney General's office. Aiding him were Charles P. Taft, Secretary Elihu Root, Attorney General Charles J. Bonaparte, Solicitor General Henry M. Hoyt and Senator Philander C. Knox. It was said that thirty special attorneys were working on something in Cromwell's office. In papers that Cromwell had sent to Roosevelt was a list of the stockholders of the New Panama Canal Company, a list which Cromwell said did not exist.20Paris officials had also declared that no list existed.

As predicted, on December 15 came the special message to Congress, and a curious message it was. It was accompanied by documents, including: four volumes of reports of the Interoceanic-Canals Committee, which the Senate already had; two hundred fifty cards on documents in the Library of Congress of a diplomatic nature; documents from Paris, which were in French; a large volume containing names of stockholders used as a basis for the liquidation of the New Panama Canal Company; and volumes of News and World clippings including Roosevelt's letter to William Dudley Foulke.

The message reviewed the charges of corruption and the existence of an American syndicate. The message declared:

These stories were scurrilous and libelous in character and false in every particular. Mr. Smith shelters himself behind the excuse that he merely accepted the statements which had appeared in… the World, owned by Mr. Joseph Pulitzer. It is idle to say that the known character of Mr. Pulitzer and his newspaper are such that the statements in that paper will be believed by nobody. Unfortunately, thousands of persons are ill-informed in this respect and believe the statements they see in print, even though they appear in a newspaper published by Pulitzer.


  • 20 Pringle, Roosevelt, 832. Letter or Roosevelt to Knox, cited by Pringle. 332. Testimony of William N. Cromwell before Senator Morgan's committee. Senate Document, No. 457, 1144. This is the report of the committee that investigated the purchase of the Canal (1906). See also Panama Libel Case, 228 passim, 329 passim.
Thus Roosevelt once more contradicted himself.

He declared that, "these stories… need no investigation whatever", that they were "in fact wholly and in form partly a libel upon the United States Government." Thus Roosevelt himself prematurely convicted the alleged offenders. He continued:

The real offender is Mr. Joseph Pulitzer…. While the criminal offense of which Mr. Pulitzer has been guilty is in form a libel upon individuals, the great injury done is in blackening the good name of the American people. It should not be left to a private citizen to sue Mr. Pulitzer for libel. He should be prosecuted for libel by the government authorities.

Roosevelt showed some confusion in the following jumbled sentences:

In point of encouragement of iniquity, in point of infamy, of wrongdoing, there is nothing to choose between a public servant who betrays his trust, a public servant who is guilty of blackmail or theft or public dishonesty of any kind, and a man guilty as Mr. Joseph Pulitzer has been guilty in this instance.

The President further declared:

It is therefore a high national duty to bring to justice the vilifier of the American people, this man who wantonly and wickedly and without one shadow of justice seeks to blacken the character of reputable private citizens and to convict the government of his own country in the eyes of the civilized world of wrongdoing of the basest and foulest kind….

Roosevelt contended that Pulitzer had no justification for the charges made by his paper, and stated finally that "The Attorney General has under consideration the form in which the proceedings against Mr. Pulitzer shall be broughtquot;. The message rehearsed the story of the Purchase.

The storm of protest was perhaps more against the message than it had been against the charges. It was "one of the most sensational in American History", said the New YorkAmerican. "A contribution without example in the official literature of the nation", wrote the New YorkPress. Abroad the LondonGlobe felt that "President Roosevelt should have avoided the ‘language of an angry fishwife’ ", and it was a "pity" according to the LondonJournal, that such a message was submitted.21


  • 21New York Sun. Dec, 18, 1908. Publishes comments of London Globe. New YorkWorld. Dec, 19, 1908. Contains Copyrighted dispatch from LondonJournal.

Opinion in the country varied. Placing Pulitzer in the "Ananias Club" brought laughter in Congress in which attitude no party line was drawn. However, Fairbanks left his official chair when he heard the names of Smith and Pulitzer mentioned in the message. From a facetious editor came the remark that the "Ananias Club" was so full now that he was glad he was among the masses. In the House, Representative Isaac Sherwood of Toledo asserted that the message had nothing to do with the state of the nation, was unconstitutional, and should be stricken from the records. The New YorkSun said the message took up valuable time.

The brief reply of the IndianapolisNews was pertinent. "It would be unfair to the President to judge him in his present atribilious temper", wrote the editor, but "the public still wonders" whether all is "well" in the deal. The News felt that "Denunciation and bitterness are no explanation and no answerquot;.

The World showed more bitterness, and opened its campaign for freedom of the press and against the theory of lese-majesty:

Mr. Roosevelt is mistaken. He cannot muzzle the World. While no amount of billingsgate on his part can alter our determination to treat him with judicial impartiality and scrupulous fairness, we repeat "a demand for a complete investigationquot;. Why didn't he himself demand one? All his protestations of outraged virtue, all his torrents of imprecations and denunciations end with the amazing assertion "that no investigation is necessaryquot;. The World appreciates the significance of a libel suit.

The World continued:

This is the first time a President ever asserted the doctrine of lese-majesty, or proposed in the absence of specific legislation the criminal prosecution by the Government of citizens who criticised the conduct of the Government, or the conduct of individuals who may have had business dealing with the Government…. Yet Mr. Roosevelt, in absence of law, officially proposes to use all the power of the greatest government on earth to cripple the freedom of the press on the pretext that the Government itself has been libeled—and he is the Government.

Mr. Roosevelt's lamentable habit of inaccurate statement makes it impossible to accept either his judgements or his conclusions.

He says, for example, that the World asserted that there was corruption by or on behalf of the Government…. No such charge was made by this paper.

He said the World accused Taft and Robinson. No such charge was made.

No other living man ever so grossly libelled the United States as does the President, who besmirches Congress, bulldozes judges, assails the integrity of courts, slanders private citizens, and who has shown himself the most reckless, unscruplous demagogue whom the American people ever trusted with a great power and authority.22

During the month following, the public waited "with a keen hope of fresh gayety… the process of putting Joseph Pulitzer on the spitquot;. The grand jury was impanelled in Washington on January 17, 1909. Criminal, not civil, indictments were sought. To this end, then, nearly all the members of the News staff were summoned to Washington. A fact to be established was the ownership of the News. Roosevelt-had heard that Fairbanks was the owner. There was no friendship between the two. Ownership of the News by Fairbanks was not disclosed until years later.

Great secrecy of action surrounded the case and high officials testified before the grand jury, including Cromwell. Secrecy was perhaps due to the uncertainty of a legal basis. In congressional as well as legal quarters, it was generally understood that no federal libel law existed. Who the plaintiffs were was not disclosed and the District Attorney stated that he needed none since mere knowledge of alleged crime was enough to permit him to act.23

The indictment was returned on February 17, 1909, based on a fantastic interpretation of an act of 1898 to "Protect the Harbor Defenses and Fortifications constructed or used by the United States from Malicious Injury and for Other Purposesquot;. It was maintained that since the News and World circulated in Washington and West Point there was just basis for an indictment.

The defendants were Delevan Smith and Joseph Pulitzer. Those alleged to have been libeled were Theodore Roosevelt, President Taft, Charles P. Taft, Douglas Robinson, Ex-Secretary of State Elihu Root, William N. Cromwell, and J. P. Morgan.

In order to try Smith in Washington, where his paper circulated, it was necessary to remove him there. The hearing to remove him came up in the Federal Court in Indianapolis.


  • 22New YorkWorld, Dec. 16, 1908.
  • 23WashingtonPost, Jan. 19, 1909.
United States Attorney Joseph B. Kealing resigned rather than be a party to the proceedings. Judge Albert B. Anderson, over protests of government attorneys, decided to hear evidence for probable cause of removal. The outcome of this hearing is best explained in Judge Anderson's words:

There are many very peculiar circumstances… about… this Panama… business. Many believed there were and I will say… that I have a curiosity to know what the real truth was… [since] the man who knew all about it—I think that is the proper way to speak of Mr. Cromwell—stood upon his privilege as an attorney and refused to answer.

Judge Anderson further stated that the first Amendment provided for a free press and that the sixth Amendment guaranteed a man a trial in his own vicinity. This, he said, covered the fact that if the News libeled it libeled at the Indianapolis Post Office. Otherwise a newspaper could be held for libel in 2009 federal jurisdictions. Such could not be.

Finally Judge Anderson held:

To my mind that man has read the history of our institutions to little purpose who does not look with grave apprehension upon the possibility of the success of a proceeding such as this… If the prosecuting authorities have the authority to select the tribunal; if there be more than one tribunal to select from; if the Government has that power and can drag the citizens from distant States to the capital of the nation, there to be tried, then as Judge Cooley says, this is a strange result of a revolution where one of the grievances complained of was the assertation of the right to send parties abroad for trial.

The defendants will be discharged.

The World case came up later in southern New York. In behalf of freedom of the press, the World feared that if it went on trial it would admit federal jurisdiction. It resulted that the World successfully motioned to quash the indictment.24 The case then went to the United States Supreme Court, where on January 3, 1911, it was decided that the indictment had no legal basis. Thus, as Huxley once said, "it is a tragedy of science when a fact kills a beautiful hypothesisquot;.

Newspaper opinion showed no particular political or geographical alignment. Some expressed hope that Roosevelt would "get Pulitzer" and many expressed regret that the


  • 24 J. L. Heaton, Story of a Page (New York, 1913), 282.
case was never tried on its merits. Others said it all had its natural end. The TroyPress wrote: "The Constitution, solemnly guaranteeing a free press, is still stronger in America than any egotistic executive, who struts as the ruler when he is legally but the servant of the peoplequot;.25 The Nation said: "A government beyond the reach of the assassin's bullet is certainly beyond the libeler's pen'quot;.26 The World declared: "Mr. Roosevelt is an episode. The World is an institutionquot;.27 Thus ended its consequential campaign for a free press and against lese-majesty—the first of its kind since the Alien-Sedition laws were in effect.

Immediately after the publication of Foulke's letter, the World had begun gathering evidence. Its agents in Paris found that records of the Canal companies were under seal for twenty years and could not be opened except when fraud had been proved but could not be used to prove fraud. Thus thwarted, evidence was sought in Bogata, Colombia, and Panama. Valuable evidence was obtained from the French Canal officials in Paris, however, and in the files of the Colombian government, which cooperated. In the United States, it was found that E. H. Harriman made some $86,000 from his canal clients, which he contributed to the Republican Campaign fund in 1900,28 that party's platform being favorable to an isthmian canal.

On one occasion, Roosevelt was informed that the orld had sought legal advice before the article of December, 1908, was published. Roosevelt was said to have replied that "there are some beings living in the gutter so low that they envy the very eminence of a dunghillquot;. On another occasion, while Roosevelt attended a meeting in the Columbia Club in Indianapolis, he was reported to have spoken of Judge Anderson as a "jackass and a crookquot;.29

In a personal interview, the author was informed by Hilton U. Brown and Stephan Nolan of the News, that the News men feared the federal case, but that they had also feared the outcome of a possible state court hearing. Further information showed that the World furnished the News with evidence for the defense. Had it not, the News would


  • 25Troy (N.Y.) Prgas.
  • 26The Nation, Feb. 3, 1910.
  • 27New YorkWorld, Feb, 18, 1909.
  • 28 Heaton,Story of a Page, 282.
  • 29Story of Panama, 71, 311; Heaton, Story of a Page, 382.
have had a poor case. It must also be noted that the News treated its articles editorially while the World, legally advised, was careful of its treatment. Failure to see Cromwell's denial of the blackmailer's story also placed the News in a peculiar position.

Regarding the personages involved in the cases, it is of interest to know that Joseph Pulitzer stayed aboard his private yacht Liberty off the coast of Spain, during a great part of the period of controversy.30 Delevan Smith, though he greatly enjoyed Washington and had business interests there, stayed away for two or three years.31

According to his promise, Representative Rainey of Illinois, succeeded in getting a new congressional investigation. In his report "The Story of Panama32 there was incorporated the evidence gathered by the World.

It must be stated in closing that, after two congressional investigations and two criminal libel cases, one ending in the United State Supreme Court, the question remains—"Who Got the Money"?


  • 30 Seitz, Pulitzer. 368.
  • 31 Information obtained from an interview with a close acquaintance of Mr. Delevan Smith.
  • 32 Hearings on the Rainey Resolution before the House Committee on Foreign Affairs. House Resolution No. 32, 62 Congress. 1 Sess. Washington. Known as Story of Panama. Permission to prtnt the World's evidence is cited in the document.


Published by the Indiana University Department of History.