The dangers of “bigness”

The dangers of “bigness” was Harry S. Truman’s argument that concentrated wealth and corporate power could distort the law, impoverish the public, and deepen economic crisis. In a major Senate address on December 20, 1937, he connected the workings of railroad receiverships and Wall Street finance to a wider moral and political problem: a society that admired great fortunes more than public service. His critique was not simply of size in the abstract. It traced how financial influence operated through debt, legal fees, court proceedings, and access to regulators, while proposing a more dispersed economy and insisting that no regulatory formula could substitute for responsible people.

Formation of the critique

The idea took shape alongside Truman’s work on railroad investigations and his growing friendship with Justice Louis D. Brandeis. Max Lowenthal, a staff member of the railroad subcommittee, invited Truman to one of the Sunday teas hosted by Brandeis and his wife. Truman initially admitted that he was not accustomed to meeting people of their standing. At the gathering, however, Brandeis spent unusual time hearing about the railway investigations and was pleased that Truman had read some of his books. Truman felt out of place among the guests, but also more welcome than he had expected.

Truman returned to the teas several times. He later described himself and Brandeis as agreeing on the dangers of bigness, and the account notes that Brandeis’s influence soon became apparent. That influence met an existing strain in Truman’s political outlook: his suspicion of privilege, high status, and concentrated power. By December 1937, that outlook had become a prepared address, written and revised several times with Lowenthal’s help. Truman announced it in advance because he wanted more than an empty Senate chamber to hear it, and warned Bess Wallace Truman that it might lead people to label him a radical. He nevertheless intended to say what he believed.

The machinery of concentrated power

The December speech followed an earlier attack in June on corporate financial practices. Truman had contrasted Jesse James’s dangerous robbery of $3,000 from the Rock Island Railroad with modern financiers’ ability, through holding companies, to take $70 million from the same railroad. The comparison made the scale of the alleged wrongdoing legible: the old outlaw’s theft seemed small beside wealth extracted through respectable financial arrangements.

In December, Truman focused on railroad receiverships and reorganizations. He named powerful law firms involved in the proceedings and cited the substantial fees taken by lawyers for receivers. His examples included attorneys taking their families on free California vacations in the private cars of a bankrupt railroad, and a federal receivership judge having a private car at his disposal on the bankrupt Milwaukee & St. Paul. These details supported his larger charge that the legal process surrounding failed railroads could reward those administering it while the companies and their investors bore the consequences.

He also described an imbalance between private and public representation. Lawyers for railroads, insurance companies, and bankers, he argued, could meet with members of the Interstate Commerce Commission, dine with them, and discuss matters before the commission. Its own lawyers, in his telling, were poorly equipped to match the skill and influence of those representing large financial interests. The problem was therefore not only that wealth was concentrated, but that concentrated wealth could bring sustained access to the institutions charged with regulating it.

Greed, scale, and an alternative

Truman named the underlying force as wild greed and contrasted public reverence for billionaires with the lesser honor accorded public servants. He challenged the assumption that philanthropic institutions erased the costs of the fortunes behind them, invoking Carnegie libraries alongside the Homestead steelworkers and the Rockefeller Foundation alongside dead miners at Colorado Fuel & Iron. His point was that public benefaction could not, by itself, settle the question of how wealth had been accumulated.

He linked that moral argument to an economic one. In his account, unemployment and unrest reflected too much concentration of power and population. He objected to the fact that 60 percent of insurance-company assets were concentrated in four companies, contrasting that arrangement with a thousand companies holding $4 million apiece. He made a parallel comparison between a thousand towns of 7,000 people and a single city of seven million. The comparisons expressed a preference for distributing economic capacity and population rather than allowing ever-larger institutions to dominate.

Truman also connected financial concentration to the Depression. Investment bankers, he argued, loaded transportation companies with debt so they could sell securities to savings banks and insurance companies and collect commissions; eventually, the source of further borrowing would run dry. He did not claim that a single formula could repair the railroads. His conclusion instead joined institutional reform to personal responsibility: the physical and financial operations of railways, and the administration of congressional laws, depended on people of proper character. For him, dispersing power and ensuring honest administration were related but distinct necessities.

Investigation and public reception

The speech drew on work that Truman had pursued despite its political risks. Much of the inquiry concerned the financial dealings behind the bankrupt Missouri Pacific Railroad. Lowenthal, whose analysis of railroad reorganization had appeared as The Investor Pays, warned that the investigation might uncover material embarrassing to Truman in Missouri. Truman directed the staff to proceed as they would in any other investigation. Pressure to stop the hearings or soften them intensified, but the inquiry continued.

Truman questioned witnesses courteously and persistently, giving them the time they wanted. Lowenthal regarded fairness and restraint, especially when exercising the power to investigate, as integral to Truman’s character. The conduct of the hearings thus gave practical weight to the speech’s appeal for honest public administration: Truman’s critique of powerful private interests was accompanied by an effort to use investigative authority with restraint.

The address became front-page news in The New York Times and attracted immediate attention from labor leaders and reform-minded citizens. Senators did not doubt that Truman had done his homework, even though some hearings were so dull that he was often the only senator present. The contrast mattered to his emerging reputation. A senator whose own background had seemed suspect was gaining recognition as a skilled investigator; the work behind the speech, and the pressure he had withstood to continue it, helped make his attack on concentrated power more than a rhetorical display.