When we think of the office of president, we often think that only wealthy men can attain it. Barack and Michelle Obama have signed deals worth tens of millions of dollars, George W. Bush retired to his Texas ranch, Bill Clinton founded the Clinton Foundation, and Jimmy Carter still teaches Sunday school in Georgia. We have the idea that those who leave the office, and those who come to it, have little to worry about in terms of finances and comfort in their post-political years. However, while distinctly in the minority, at least eight presidents have experienced financial hardship and even presidential bankruptcies.
- Thomas Jefferson – the third president of the United States – is famous for many things, but bankruptcy is not one of them. Thomas Jefferson was the son of wealthy landowners at a time where owning land was synonymous with money and power. He lived extravagantly and loaned money unwisely to people who either could not or would not pay him back. The estate was sold to James Turner Parkway by his daughter Martha Jefferson Randolph in 1831.
- James Madison, Thomas Jefferson’s successor in the presidency, was also from a wealthy family. Taken in terms of 2019 dollars and accounting for inflation it is safe to say that he was a billionaire. While his agricultural pursuits did pan out from time to time, the upkeep of lands and property drained his finances. Additionally, his stepson had a severe gambling habit which he felt obliged to pay off. He had to sell half of the Montpelier plantation and a large number of slaves whom he had initially intended to free in order to pay off the debts.
- James Monroe succeeded James Madison in the presidency, becoming the fifth president of the United States. As with Jefferson and Madison before him, the source of his wealth was inherited wealth and land ownership. He mismanaged the family plantation, sending it into debt, and eventually selling the plantation as well as a home in Paris. As a result of this presidential bankruptcy, he had to ask Congress to relieve some of his debts to the tune of $30,000 – or $778,000 today.
- William Henry Harrison – son of one of the original founding fathers – was the ninth president of the United States and was initially a well-to-do landowner as were most of the presidents who preceded him. In 1828, he was appointed as United States ambassador to Colombia and had to leave his farm to go fulfill his duties. Bad weather and bad luck destroyed his crop, and he had to sell off much of this land in order to pay his debts. He was still in debt when he was elected president, and when he died of lobular pneumonia 31 days into his presidency.
- Abraham Lincoln is one of the most famous presidents in history, and despite being born into poverty and having several unsuccessful business ventures he entered the law as a career. He went from being poor enough that he was obliged to sell his horse to guiding America through one of the most brutal wars ever conducted.
- Ulysses S Grant is better known as one of the Union generals of the American Civil War. Following his single term as president, the retired general and his wife lived in grand style. Unfortunately, their savings were largely invested in a fund that ended up defrauding grant of more than $100,000 – that would be $2,600,000 today. He was forced to write his memoirs and finish them shortly before his death in order to provide his wife and family
- William McKinley did not come from inherited wealth his source of wealth was due to his legal career. Consider this a cautionary tale about cosigning a loan for a friend. Shortly before being elected president, McKinley did just that and when the depression of 1893 reared its ugly head the friend defaulted on the loan leaving McKinley on the for $100,000 – or nearly $3 million in today’s funds.
- Harry S. Truman, the 33rd president of the United States who succeeded Franklin Delano Roosevelt upon his death in 1945, had many failed business ventures to his name. Though advised to file for bankruptcy, he declined and instead paid off his debts over a long period of time. His financial hardships were responsible for increasing the presidential salary, and when Medicare was signed into law in 1965 former President Truman became the first-ever recipient.
So, as you can see holding the highest office in America does not automatically mean wealth and power for the rest of one’s lifetime. Presidential bankruptcies are far more common than anyone would think. Indeed, current president Donald Trump has had frequent bankruptcies, lawsuits, and financial issues around a variety of his businesses and charitable foundations – some of which have resulted in criminal investigations and judgments.
Donald Trump has no personal bankruptcies however several of his hotel, resort, and casino businesses have been reorganized under Chapter 11 of the bankruptcy laws. This is similar to a Chapter 13 bankruptcy that is typically used by an individual. Like a Chapter 13 bankruptcy, Chapter 11 is designed to allow struggling businesses to shed some of their debt load, reorganize, and exit bankruptcy as a functioning business. Between 1991 and 2009, these businesses filed for Chapter 11 bankruptcy six times. They were unable to meet their required payments, nor were they able to renegotiate their debt to stockholders or bondholders, additionally the businesses owed money to a variety of small businesses as unsecured creditors.