The only two things certain in life are – death and taxes. While the former can’t be predicted and only happens once, the latter is guaranteed yearly for life. With the effects of the Crash and the Great Depression wiping out fortunes, one millionaire is determined to keep his remaining money all to himself. Ned Stotesbury is a generous and wealthy man who likes to live a big life, but the one thing he can’t stand is taxes. His grand estate Whitemarsh Hall will feel the effects of the 1929 Wall Street Crash and taxation to fund President Roosevelt’s New Deal, which stepson Jimmy Cromwell approves to Ned’s dismay and anger. Other people and subjects include: Eva Stotesbury, Bar Harbor Club, death & taxes quote, tax evasion, Internal Revenue System IRS formation, Sixteenth Amendment, millionaire estimate pre and post Crash, Franklin Delano Roosevelt, Louise Cromwell, largest mansions in US, Assistant District Attorney Ferdinand Pecora, Broadway Butterfly murder case & scandal, famous tax evaders, Al Capone, and a personal family experience with IRS tax audit. Archival music provided by Past Perfect Vintage Music, www.pastperfect.com.
The only two things certain in life are – death and taxes. While the former can’t be predicted and only happens once, the latter is guaranteed yearly for life.
With the effects of the Crash and the Great Depression wiping out fortunes, one millionaire is determined to keep his remaining money all to himself.
Ned Stotesbury is a generous and wealthy man who likes to live a big life, but the one thing he can’t stand is taxes. His grand estate Whitemarsh Hall will feel the effects of the 1929 Wall Street Crash and taxation to fund President Roosevelt’s New Deal, which stepson Jimmy Cromwell approves to Ned’s dismay and anger.
Other people and subjects include: Eva Stotesbury, Bar Harbor Club, death & taxes quote, tax evasion, Internal Revenue System IRS formation, Sixteenth Amendment, millionaire estimate pre and post Crash, Franklin Delano Roosevelt, Louise Cromwell, largest mansions in US, Assistant District Attorney Ferdinand Pecora, Broadway Butterfly murder case & scandal, famous tax evaders, Al Capone, and a personal family experience with IRS tax audit.
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Archival Music provided by Past Perfect Vintage Music, www.pastperfect.com.
Opening Music: My Heart Belongs to Daddy by Billy Cotton, Album The Great British Dance Bands
Section 1 Music: Red Sails In The Sunset by Casani Club Orchestra, Album The Great Dance Bands Play Hits of the 30s
Section 2 Music: A Foggy Day by Carroll Gibbons, Album Sophistication 3
Section 3 Music: I Double Dare You by Jack Harris & His Orchestra, Albums More Sophistication & Hits of the 30s
End Music: My Heart Belongs to Daddy by Billy Cotton, Album The Great British Dance Bands
AS THE MONEY BURNS
Podcast by Nicki Woodard
Episode 029 – The Taxman Always Collects
Series Tag
00:00
[Music – My Heart Belongs To Daddy by Billy Cotton, Album The Great British Dance Bands]
AS THE MONEY BURNS is an original podcast by Nicki Woodard. Based on historical research, this is a deep exploration into what happened to a set of actual heirs and heiresses to some of America’s most famous fortunes when the Great Depression hits.
Each episode has three primary sections. Section 1 is a narrative story. Section 2 goes deeper into the historical facts. Section 3 focuses on contemporary, emotional, and personal connections.
00:27
Story Recap
In the aftermath of the 1929 Stock Market Crash, opera singer Cobina Wright worries her husband Bill might be the next suicide. While non-primary heir sons might need new sources of support for their luxurious lifestyles.
Now back to AS THE MONEY BURNS
Title
00:45
The Taxman Always Collects
[Music fade out]
Episode Tag
The only two things certain in life are – death and taxes. While the former can’t be predicted and only happens once, the latter is guaranteed yearly for life.
With the effects of the Crash and the Great Depression wiping out fortunes, one millionaire is determined to keep his remaining money all to himself.
01:09
[Music – Red Sails In The Sunset by Casani Club Orchestra, Album The Great Dance Bands Play Hits of the 30s]
Section 1 - Story
[Music fade out]
01:20
August 1929, Maine’s Bar Harbor Club
A group of elites celebrate over a fine and sumptuous dinner. At the head of the table, a vibrant and energetic 80 year old Ned Stotesbury stands up to make a toast and proudly waves a piece of paper in the air.
“I have today received a letter from my financial advisor telling me I am worth $100 million.”
Decked in jewels, his beautiful slightly younger 60ish year old wife Eva Stotesbury sips her glass with eyes glimmering with all the new lavish ways to spend their fortune. So many plans, a life of endless extravagances.
02:01
The memory ripples away in the wake of the Stock Market Crash on October 29th, 1929. The exhuberant Roaring Twenties and all its prosperity came to a screeching halt. Rumors of heavy losses percolate in the air.
02:18
Spring 1930, on the outskirts of Philadelphia, Pennsylvania stands the magnificent Whitemarsh Hall – the American Versailles.
Returning from the Drexel & Co office, Ned walks around his masterpiece. Six stories, 3 of which are underground, 100,000 square feet, 147 rooms. It’s full of ornate furnishings, grand artwork, and state of the art luxury. A ballroom, gymnasium, movie theatre, bowling alley, and a soda fountain amongst many of its pleasures. Statues, paintings, tapestry, Oriental rugs, 18th century French furniture,… a collection bequeathed in the future to the Philadelphia Museum of Art.
Then there are the gardens and landscaping. Inside the mansion, the state of the art call box alerts servants of various needs. Ned loves to the boast about the $100,000 monthly tab over a million a year to keep it operational.
03:17
This was the epicenter of large balls and parties. And the alcohol flowed, as they were not teetotalers despite Prohibition.
No matter what happens Crash or not, Ned plans to continue to live the good life. Fortunes lost can be remade. But there is one thing Ned won’t tolerate, and that is – taxes.
Ned hates taxes. And he’s not alone.
03:43
He’s not merely being stingy. Ned Stotesbury can be more than generous. He is a great philanthropist. He just prefers to determine when, how much, and where he gives his money not to be forcibly compelled to fork over larger sums to be squandered, such an arbitrary method of dispersion would never receive approval from a businessman and financier, especially not by one that has reached his heights.
His money was made via the stock market. The Crash has changed many things. His outsized life remains intact for the time being. Others might be selling furs in hotel lobbies and scrambling to get by, but he seems solid and unfazed.
Such is the benefit of deep long pockets. Only there’s another price.
04:28
A long shadow falls over the glorious Whitemarsh Hall. By June 1932, Ned and Eva close down their fabulous estate fearing future rioters and mobs and leave for Europe. The gates are locked, and items are relocated for safe keeping. Reduced staff from 35 to 10 will maintain the residence.
When Ned and Eva reopen Whitemarsh Hall in 1933, the estate has undergone several changes. Upon their return, they are greeted by the one guaranteed unwelcomed visitor the tax collector. Despite their own losses and the Great Depression, they are hit with a heavy tax bill with penalties, much to Ned’s outrage.
Now when he roams his mansion, a gloomy presence pervades. His anger boils. Over time, the rooms seem emptier and less grand than before. Once lavish furnishings have slowly disappeared. Are they stolen, sold, or hidden? Only time will tell…
05:35
[Music – A Foggy Day by Carroll Gibbons, Album Sophistication 3]
Section 2 – History & Historiography
[Music fade out]
05:48
Back in August 1929, Ned Stotesbury hosted a party in Bar Harbor, where he toasted his $100 million (today $1.5 billion). By October – now in retrospect it is debated he might have been one of the biggest casualties of the Crash.
But who could really tell? Reversals of fortunes could happen again, and many expected, anticipated, hoped, and prayed for another back into the good life. Stotesbury definitely sustained some losses, but could they be reversible or were they permanent? He still had enough to not seem to suffer any problems. Only there’s was another threat to his fortune.
06:30
Like the famous quote -- “In this world, nothing can be said to be certain except death and taxes.” A variant of this quote has been popularly attributed to Samuel Clements, aka Mark Twain, but it was Benjamin Franklin who wrote it in a letter in 1789. But the original version was from English actor and dramatist Christopher Bullock in 1716.
06:53
Ahh, the history of America is one involving issues over taxation. Any income tax revenue system has always met with resistance.
During America’s Civil War, President Lincoln passed the Revenue Act of 1862 when the Union was in desperate need of funds. The Commissioner of Internal Revenue formed to assess the first income tax. The revenue raised supported one fifth of the Union’s war expenses. This temporary measure expired 10 years later.
07:21
In 1913, the Sixteenth Amendment was ratified authorizing Congress to impose a federal tax income without state participation. Soon came the first edition of the 1040 form originally for incomes over $3,000.00 (today that would be $77k). Taxes were due on March 15th, then in 1954 the deadline moved to April 15th. Under President Truman, the bureau was restructured from appointed officials to civil servants in 1952 after a scandal broke out regarding internal issues with bribery and tax evasion by the employees. In 1953, the agency was renamed the Internal Revenue Service, IRS.
08:05
In 1930, only 20 people had an annual income of $1 million or more. Compared to the 1925 & 1927 tax returns showing only 207 with million dollar incomes, not to be confused with total networth. During the stock market peak of 1929, there were an estimated 25-35,000 millionaires. During the stock market bottom of 1932, only 5,000 were estimated.
08:34
Affiliate to the most famous 1929 suicide banker JJ Riordan (covered in Episode 26 Contagion), National City Company (today known as Citibank) chairman “Sunshine Charley” Charles E. Mitchell schemed to avoid paying taxes of $573k in 1929 and was arrested and indicted in 1933. Charles Mitchell is considered one of the top 50 men most responsible for the Stock Market Crash of 1929.
089:05
During the Great Depression, President Franklin Delano Roosevelt formed multiple organizations under the New Deal increasing the amount of taxes with them aggressive collection. There was one man adamantly opposed to this increase --
09:19
Edward T. Stotesbury, known also as E.T. and/or Ned, was born on February 26, 1849 of Quaker heritage. After serving as a drummer during the Civil War and attending college, he would rise to prominence as an investment banker and partner in Drexel & Co. with affiliations toJP Morgan for over 55 years. In 1881, his first wife Frances Berman died in childbirth with their 3rd daughter. Their first daughter Helene died in infancy. He was a widow devoted to raising his two daughters Edith and Frances and succeeding in his business.
He was a well-established businessman and willing to enjoy life. He was heavily involved with the Philadelphia Rapid Transit, Reading Railroad, Lehigh Valley Railroad, Pennsylvania Steel Company, Penn Mutual Life Insurance, to name only a few.
10:14
In 1912, after 3 decades of widowhood, Ned met on a cruise and soon after married socially prominent Washington, D.C. widow Eva Roberts Cromwell, the mother of Jimmy Cromwell and his two siblings Louise and Tony. Jimmy was still a teenager at the time and lived at home with the newlyweds. Ned’s own two daughters were married by then, and he readily accepted the three additions and spoiled them as well.
10:37
Stepdaughter Louise Cromwell received a million dollar home in the D.C. area upon her first short lived marriage to Walter Brooks. Louise’s second longer marriage was to General Douglas MacArthur, and third with actor Lionel Atwill. Louise should not be confused with the similar namesake silent era actress Louise Brooks, flapper sex symbol with the bob hair fame. Upon the Stotesbury marriage, stepson Oliver “Tony” Cromwell changed direction from potential businessman to gentleman and participated in mountaineering expeditions, including the disastrous 1939 American Karakoram K2 expedition.
11:17
Ned and Eva were a real love match despite their nearly 20 year age difference. She nicknamed him “Kickapoo.” He relished the chance to spoil her and her children. In fact, Eva claimed much of her extravagant lifestyle was due to Ned’s insistence. He liked the conspicuous consumption. She renovated his Walnut townhome estate as the first project. Together the couple built 3 palatial estates.
* Whitemarsh Hall in Wyndmoor, Pennsylvania was constructed in 1916 -1921 by architect Horace Trumbauer
* El Mirasol in Palm Beach, Florida in 1919 by architect Addison Mizner
* Wingwood House in Bar Harbor, Maine in 1927 by architectural firm Magaziner, Eberhard & Harris
12:02
The primary residence Whitemarsh Hall is the third largest extant or historical home in America of all time, behind Biltmore and Oheka Castle. Whitemarsh Hall was larger than the White House. By the way, Stotesbury’s two other homes Palm Beach El Mirasol is number 25 and Bar Harbor Wingwood House ties for number 50. All have been torn down since.
12:24
As young lovers in Paris during World War I victory celebrations with sister Louise & the Savior of France General Pershing, young naval officer Jimmy Cromwell often taunted opera singer Cobina Wright about the luxury of Whitemarsh Hall. Where he could push a button to request a servant, and the home had its own soda fountain among other amenities.
12:45
Whitemarsh Hall was the ultimate luxury home of a new era. Eva filled it with furnishings and artwork – which were promised to the city of Philadelphia for its museum collection.
The Stotesbury couple would donate to charities and host fabulous parties. But there was one thing that would always upset Ned – taxes. He had several public run-ins when it came to taxes.
13:10
In 1914, Stotesbury was brought under review for paying a reduction in taxes on his former Walnut townhome, where he resided before Whitemarsh Hall. In 1923, Stotesbury opposed raising city taxes to fund an art program related to the Sesquicentennial (150 year) celebration of 1776 in 1926. He argued there was better use of funds in public services like sewage and public roads than a World’s Fair type activity. Ned was a well-known philanthropist in the Philadelphia art world. He could be generous on his own accord but balked when imposed or mandated.
13:47
With the influx of more taxes to fund President Franklin Roosevelt’s New Deal programs in 1933, Stotesbury became even more enraged and vowed to spend his money as he saw fit and to die penniless. He could endure unflinchingly the scandals surrounding his family without malice. Son-in-law John Kearsley Mitchell III’s embarrassing love letters discovered during the sensationalistic blackmail gang and murder investigation of flapper Broadway Butterfly Dorothy King, stepdaughter Louise’s multiple romantic liaisons especially with high profile generals and actors, and stepson Jimmy’s Florida failed land scheme. But when it came to taxes, that was a whole other matter.
14:30
Ironically, the District Attorney Ferdinand Pecora who handled the Broadway Butterfly murder would also oversee Wall Street financial crimes in 1931 & 1932, he went after multiple people on Stotesbury’s business partner JP Morgan’s “preferred list” of customers who got discounts including former President Calvin Coolidge.
14:54
FDR’s policies along with Eva’s son Jimmy Cromwell’s approval would cause a rift between stepfather and stepson. Ned threatened to cut Jimmy out of the will. Stotesbury was among several residents in Philadelphia’s millionaires row who was forced to pay a 50% penalty for failing to make a tax return. The bill was $1.5 million. In 1936, Stotesbury was still considered Philadelphia’s wealthiest individual and assessed taxes of $3.5 million dollars, a million dollar increase from his 1935 return.
The ongoing taxation would push Ned Stotesbury over the edge.
Evading taxes is definitely another popular sport played amongst a select elite.
15:39
[Music – I Double Dare You by Jack Harris & His Orchestra, Albums More Sophistication & Hits of the 30s]
Section 3 – Contemporary & Personal Relevance
[Music fade out]
15:47
Yes, it’s that time again. Coinciding with United States official tax day April 15th, I had to cover this topic a little ahead of schedule.
Plenty has been said about taxes.
“The only difference between death and taxes, is that death doesn’t get worse every time Congress meets.” – Will Rogers
“The hardest thing to understand in the world is the income tax.” – Albert Einstein
16:09
The life goal of many people is always to accumulate money. Enough to live a good life, sustain, and possibly flourish. The obsession can lead to darker greedier ways to accumulate, and still there is one thing that is always inevitable --- taxes. Can’t avoid them, they will eventually come with penalties and interest.
16:31
Other famous tax evaders – Willie Nelson, Wesley Snipes, comedy duo Bud Abbott & Lou Costello, Martha Stewart, Jesse Jackson Jr, Leona Helmsley, and --
Let us not forget the notorious gangster Al Capone was arrested, tried, and sentenced for tax evasion not racketeering or other mafia criminally related activities. Even if you make your money illegally, you still have to pay taxes on it.
16:59
And boy, when you have to pay, it is not fun. This is where the story is definitely far too personal and why I had to tell the stories I am telling. Because if there is one thing I do know – Upgrading is easy. Downgrading not at all. Especially a sudden forced downgrade.
IRS and taxes – two words that have haunted me most of my life.
Spend 2.5 years of your life afraid of what inevitably happens. Spend 10 years of your life in fear, and you realize life happens no matter what.
One of the top devastating, life altering situations in my life – so far I’d rank as number 3 in life scarring events from my adolescence.
1) Brother’s illness and death. 2) Parents’ divorce. 3) IRS audit.
17:51
There’s a different mentality that comes with association of loss. Even if we devalue something or barely pay attention, we can have ownership without care, but when it’s taken away – oh my what happens next?
Going through an IRS audit is not fun by any means. My dad didn’t pay taxes for 14 years. Then they came knocking and went retroactive, penalties & interest. Over the decades, they changed the one rule that was enforced during my family’s audit – seizing the family home.
18:21
For 2.5 years, I was warned that any given day I would come home to find auction tags on items. That never happened. What did happen? The IRS sold our house at auction, and the only notice was they put it in the paper. Yeah, like we were at fault for not catching that it was on sale through those means. I think we learned when the new potential owner came to look at it. He lived in the nearby neighborhood, and then bought it from us directly. We had to sell quick. Oh, and the IRS sold the house for half of its value, it wouldn’t have covered the tax bill owed. We sold luckily the house, paid off the bill, but everything changed.
19:01
Downsized to half the size into a townhouse closer to my future high school. My brother used to drive by the neighborhood angry that was still our house. I drove by it this last year, now over 3 decades later. All the houses with all the history, and all those neighbors gone and vanished long ago.
Our previous good life gone with very rough days ahead. The lasting result on me – a lack of attachment to material things and money. During that same time of junior high, I saw so many fortunes implode. I vowed not to pursue money as it benefits were too easily lost. I did miss and love the physical home, but I missed my neighbors far more.
The biggest loss was a sense of security at the age of 14.
By the way, every tax deadline, my dad nervously blurts out, “I gotta pay, or they’ll send me to jail.”
Hook
19:59
[Music – My Heart Belongs To Daddy by Billy Cotton, Album The Great British Dance Bands]
Next when we return to AS THE MONEY BURNS…
Temporary seasonal changes might become more permanent under a new climate. In a showy opulent world, will those with losses be able to hide their less than spectacular circumstances?
Until then…
Credits
20:16
AS THE MONEY BURNS is an original podcast written, produced, and voiced by Nicki Woodard, based on historical research. Archival music has been provided by Past Perfect Vintage Music, check out their website at www.pastperfect.com.
Please come visit us at As The Money Burns via Twitter, Facebook, or Instagram. Transcripts, timeline, episode guide, and character bios are available at asthemoneyburns.com.
20:48
THE END.