Nearly thirty years before, the Standard Oil Company and the Pennsylvania Railroad had pledged:
The party of the second part will pay and allow to the party of the first part … rebates … and on all oil transported for others, drawbacks.
Those simple words introduced a new concept—un-American to some—of privilege in commerce, bestowing rewards upon the large at the expense of the small. Both parties excused the contract by saying it would prevent “loss or injury by competition.” If they thus blasphemed against the gospel of free enterprise, Standard Oil, at least, was unrepentant. What, John D. Rockefeller wanted to know, was so holy about competition? Did it not lead to unrealistic rate-cutting, cycles of overproduction and depression, and needless duplication of services? What interdependent industries needed was less competition, and more “cooperation.”
Rockefeller’s rebate privilege had been too flagrant to survive under law. But it was followed, over the years, by sophisticated arrangements to the same effect. Standard Oil had engulfed its smaller rivals, while the Pennsylvania Railroad made similar deals with other industries, and became one of the richest transport systems in the country.
Presidents Cleveland, Harrison, and McKinley paid little attention to the phenomenon of Combination. To them, it seemed a natural economic trend. If industries produced vital supplies, if railroads functioned as semipublic utilities, why restrict their profitable development? Only slowly, and locally, had ordinary Americans—workers, consumers, and small businessmen—begun to feel the “dark power” growing. For Combination’s irresistible tendency was toward Monopoly; and whatever corporate executives might say about increased efficiency and reduced waste, the historic inclination of Monopoly was to raise prices and lower wages.
Standard Oil had taken early steps to protect itself against common-law suits—and, in doing so, had perverted one of the most sacred words in the legal vocabulary. It reorganized its component corporations into a “trust,” whereby all stocks were delivered to an independent board, which then operated the entire combination in unison. Congress had no power to quash this move. Within nine years, John D. Rockefeller had “entrusted” himself with 90 percent of the oil-refining business of the United States.
His profits were so fabulous that other industrial giants had rushed to organize interstate “trusts” of their own. Congress, responding to public concern, had passed the Sherman Antitrust Law of 1890. It declared illegal “every contract, combination in the form of trust, or conspiracy in restraint of trade or commerce among the several States.” But the Law was too comprehensive to be particular. Corporate lawyers (Elihu Root prominent among them) elaborated the trust concept into that of a “holding-company” chartered in one hospitable state, yet monopolizing related corporations throughout the nation. Holding-company directors concerned themselves with questions of finance, so the lawyers argued they were unengaged in “trade or commerce.” The Supreme Court had agreed reluctantly with this argument, and had ruled in U.S. v. E. C. Knight Co. (1895) that a trust controlling 98 percent of the nation’s sugar-refining business was legal, since refining was not itself an interstate activity.
The depression of the mid-nineties had cramped trust growth. But combination, aided by the spread of the telephone-telegraph web, resumed with a vengeance after the war with Spain. In 1898, there had been twenty multimillion-dollar industrial trusts; now, there were one hundred and eighty-five. The proliferation evoked an image, in many minds, of a constrictive organism stretching out to every extremity of American civilization. Hence the title of Frank Norris’s new antitrust novel: The Octopus.
These trackside mourners of Olean Valley, staring blindly at Roosevelt as he whizzed by—how enmeshed were they? The oil trust paid their wages. Other trusts carpeted their houses, papered their walls, piped their water, sluiced away their sewage. Trust ice cooled them in summer, trust wool warmed them in winter—as did trust whiskey. These men chewed trust tobacco, and checked trust watches. These women baked trust flour and cooked trust beef in trust stoves full of trust coal. These children chewed trust gum and scribbled on trust slates. Roosevelt himself had trusts to thank for the starch in his shirt, the type on his newspapers, the glass of his window, the rails under his wheels. Poor dead McKinley, two cars back, was jiggling in a trust coffin: what might a cynic make of that!
Ideologically, Roosevelt was committed to a conservative view of the trusts. Personally, he felt a certain ambivalence. He saw “grave dangers” in unrestricted combination, yet he could not deny that the economy functioned better now that the trusts were, in effect, running it. The price of kerosene, for example, had been declining for thirty years, courtesy of Standard Oil. America was no longer a patchwork of small self-sufficient communities. It was a great grid of monopolistic cities doing concentrated business with one another: steel cities and rubber cities, cities of salt and cloth and corn and copper. Just beyond these hills was a place that actually called itself Oil City! American exporters did not need a book of vouchers to dispatch one consignment across a rickety grid of independent railroads, each with its own timetable, rates, and reliability quotient. Now one ticket sped a million tons to either coast on flawlessly synchronized trains. At every port, trust-operated ships were ready to ferry the consignment on. If freight charges were higher than they used to be, so was turnover, and so were profits.
According to a recent survey, at least 65 percent of the national wealth was attributable to the trusts. That statistic did not even include the newest and most gigantic combination of all, Andrew Carnegie’s merger of his steel company with nine others. United States Steel, capitalized at almost one and a half billion dollars and feeding more than one million people, was virtually a nation in itself. Its income and expenditures approximated those of the Second Reich. It, too, had a Kaiser, an emperor of finance, and if today’s newspapers were to be believed, Wilhelm II might soon cede him a portion of his realm: “Mr. John Pierpont Morgan is trying to get control of the German steamship lines.”
ROOSEVELT LIKED MORGAN. The solitary, bottle-nosed banker had been a friend of his father, and on that score alone merited affection. Even so, he did not know him well. Few did. Only Morgan’s immediate family, and the half-dozen handsome young aides who stood between him and the world (as if to screen his legendary ugliness) claimed that privilege. Governor Roosevelt had once denied Morgan tax exemptions on two railroads. He had tried to make amends with a testimonial dinner (“an effort on my part to become a conservative man, in touch with the influential classes”), but the financier remained unmollified. Roosevelt’s last letter to Morgan had been answered by a secretary.
So far, 1901 had been Morgan’s annus mirabilis. Along with his new billion-dollar trust, he controlled several banks, including the international House of Morgan, the Western Union Telegraph Company, the Pullman Car Company, Aetna Life Insurance, General Electric, Britain’s Leyland Steamship Lines, and twenty-one railroads. Control, indeed, was his passion—not the constant, clashing competition of the free market. As chairman of J. P. Morgan and Company, he handled more wealth than any other man on earth, and was capable of plunging the United States into a depression overnight—or rescuing it from one. Yet his greatest power derived from his integrity of character. One nod of the massive head was security for fifty million; one snort of the carbuncled nose was enough to sweep all opposition from his path. Review of Reviews saluted him as “the most masterful personality in the country, perhaps in the world.”
But now there was a challenger to that title, riding to Washington on one of the few Northeastern railroads Morgan did not control. Sooner or later, their personal trajectories must intersect, as surely as this Alleghany track was destined to run into those of the Susquehanna Valley. Roosevelt hoped that the confluence would be smooth. To his mind, the real threat posed by financiers such as Morgan lay not so much in their combination policies as in their virtual freedom—thanks to U.S. v. E. C. Knight—from federal regulation. Even President Mc
Kinley had talked of doing “something about the trusts.” Roosevelt himself had publicly warned:
The vast individual and corporate fortunes, the vast combinations of capital which have marked the development of our industrial system, create new conditions, and necessitate a change from the old attitude of the State and the nation toward property.… More and more it is evident that the State, and if necessary the nation, has got to possess the right of supervision and control as regards the great corporations which are its creatures.
He now stood committed to those words, uttered only two weeks ago at the Minnesota State Fair. Morgan’s philosophy was also on record: “I owe the public nothing.”
If they were indeed set on a collision course, Roosevelt was determined not to be the one derailed. Morgan may be master of United States Steel, but he was master of the United States Government—surely the greatest combination of all. National stability required that he maintain eminent right-of-way.
ELSEWHERE IN THE TRAIN, Senator Hanna was slumped, cursing the day that William McKinley accepted Theodore Roosevelt as his running mate. “Now look—that damned cowboy is President of the United States!”
Herman Kohlsaat came back to tell Roosevelt about Hanna’s despair. He suggested that the Senator be treated with utmost delicacy, for he had the power to block all White House initiatives during the coming session of Congress.
Roosevelt reacted blankly. “What can I do?” Kohlsaat suggested a flattering supper à deux in the presidential car.
AT FOUR MINUTES past eleven, the funeral train drew into Port Allegany, Pennsylvania, and stopped for a while to allow platform mourners to look at the dead President’s bier. Souvenir collectors laid nickels and pennies and flowers on the rails. When the wheels started to roll again, there was a crunching of coins, and the perfume of pressed roses filled the air. In future years, misshapen metal discs and bits of dried petal would remind the citizens of Port Allegany of McKinley’s last earthly journey.
THE STEEP CLIMB up Keating Ridge began. At times the locomotive seemed about to stall. Shortly before noon, it dragged its payload over the crest and with loud puffs of relief entered a winding valley. Hills crowded in on both sides. Then one cut gave way to the shaft of a coal mine, and for a few seconds Roosevelt and his fellow passengers could exchange stares with four hundred filthy coal miners.
Boys, youths, and old men (were they really old, or just toothless?) stood bareheaded, leaning on picks and shovels. Their small, smudged eyes (only the creases showing white), squat bodies, and tape-wrapped shins proclaimed them to be Slavs. It was impossible to tell from their swarthy expressions whether the sight of a presidential cortege moved them or not. Implicit in the stare of those eyes, the power of those knobbly hands, was labor’s historic threat of violence against capital.
Roosevelt knew that nowhere in America was the threat more real than in the Pennsylvania coalfields—the bituminous region he had just entered, and the anthracite region to east and south. Valley after valley, as the train snaked through, disclosed communities as squalid as any these people could have fled in Europe. Thousands of sooty shacks on stilts, with pigs tied below; gutters buzzing with garbage; mules clopping to the mineheads, hock-deep in fine gray dust. Beneath that dust, men were scrabbling in wet, gassy gloom, earning a dollar and change for every ton of coal they hacked. If 1901 turned out to be a good year, they might get five hundred dollars apiece—about what Roosevelt had already earned as President of the United States. In cash, they would realize perhaps a third of that—their wage packets were subject to compulsory deductions for rent, fuel, medical bills, and food supplied at inflated prices by the company store. As a group, they aged and ailed faster than any other workers in American industry.
These boys began their careers at eight or nine, picking splinters of slate out of the coal breakers until their hands were scarred for life. These men worked coal ten hours a day, six days a week. They ate coal dust in their bread and drank it in their milk; they breathed it and coughed it. At forty or forty-five, most were so ravaged by black-lung disease that they had to return to the breakers to pick slate with their grandchildren, contracting fresh black scars until they died.
Roosevelt understood enough about social repression to sense that today’s contempt for the unskilled worker was tomorrow’s likely revolution. Trade-union membership had more than doubled in the last five years. Sullen miners personally fueled most of the nation’s industrial machine. In his opinion, “the labor question” was the greatest problem confronting twentieth-century America, “the most far-reaching in its stupendous importance.” He had been saying so since the United Mine Workers (UMW) first struck the Pennsylvania anthracite mines in 1900. How worried Hanna had been that bloodshed might prevent McKinley’s re-election! The Senator had wheedled both sides to an interim contract. Today’s New York Sun noted that this modus vivendi was to expire in six months. Passion was building in the pits: if the UMW was not soon recognized as a bargaining agent by the mine operators, the next coal strike could be violent enough to obliterate memories of the Haymarket Riot.
Roosevelt had been violently inclined himself in Haymarket days. He had fantasized leading a band of riflemen against the rioters, and shooting them into submission. But middle age, and the democratizing effect of war, had moderated his attitude toward organized labor.
PILLARS OF HEMLOCK and pine rose on either side of the train, suffusing it in cool gloom. Here and there a shaft of light fell vertically (for the sun stood at noon), disclosing naves and transepts carpeted with needles, cloisters where deer and pheasants sought sanctuary from the hunting season.
Roosevelt was more prone to revere such natural architecture than any Gothic cathedral. Trees were objects of deep spiritual significance to him, especially when they were full of birdsong. He had stocked the bare slopes of Sagamore Hill with elms and chestnuts and oaks and dogwoods, faithful to his family motto, Qui plantavit curabit. The jungles of Cuba had made a soldier of him; the forests of Wyoming had brought him solace after the death of his first wife; the piney air of Maine had cut and soothed the asthma in his teenage lungs. Further back still, in boyhood, were memories of summer nights in the woods, and the sound of a beloved, bass voice reading Last of the Mohicans under fire-reddened branches.
I am sorry the trees have been cut down. Little Teedie Roosevelt had been nine when he wrote that, after some minor act of vandalism in Georgia. As an adult, what was he to make of the wasteland he now began to see in Pennsylvania? The Allegheny forest receded on both sides, leaving only stumps. Soon there was nothing but a fringe of trees on the highest ridges, beyond reach of any saw. Stumps, stumps, and more stumps perforated the landscape, like arrows snapped off in death agony. Most were blackened. Local lumberjacks wanted white pines only—less profitable trees could be burned like weeds. There were no saplings to be seen. With billions more trees beyond the horizon, replanting was a waste of time.
Descent via Emporium Junction and Driftwood revealed even worse devastation. Roosevelt had foreseen just such sterility when Governor of New York: “Unrestrained greed means the ruin of the great woods and the drying up of the sources of the rivers.” These hillsides, which for centuries had absorbed foliage-filtered rainfall, were now bare, gullied by direct precipitation. The courses running off them were choked with mud and dead fish.
A town sign flashed by: RENOVO. Edith had vacationed here as a child. The name—Latin for I renew—sounded mocking in these dying uplands of the Susquehanna. About the only renewal Roosevelt could see was a station repair yard, where flatcars were being overhauled to carry away more and more trees. He understood (as most Americans did not) the tendency of transport and industrial combinations to consume the environments they served. United States railroads owned more timberland than all the nation’s homesteaders.
To him, conservation—a term just becoming politically fashionable—meant “not only the preservation of natural resources, but the prevention of the monopoly of natur
al resources, so they should inhere in the people as a whole.”
IT WAS NEARLY time for lunch. Roosevelt ordered places laid for himself and the Secretary of War, and went to pay his respects to Mrs. McKinley. Ravaged, almost comatose with grief, she did not detain him long. By 1:30, he was back in his car and the congenial company of Elihu Root.
He felt at home with conservatives. Whether or not the term applied to himself, he owed his political advancement to men of Root’s type: wealthy Republicans who belonged to the Union League Club, read the North American Review, and were coldly polite to butlers. More conservative rhetoric followed after lunch, as the other Cabinet officers on the train came in one by one to see him. With the exception of Attorney General Philander Chase Knox, a polished little man of forty-eight, they were venerable figures. There was his old boss, Secretary of the Navy John Davis Long, portly and lumbering at sixty-three. Secretary of Agriculture James Wilson was sixty-six, Secretary of the Interior Ethan Allen Hitchcock sixty-five, Postmaster General Charles Emory Smith fifty-nine. Elihu Root was fifty-six. The two absent Secretaries, John Hay and Lyman Gage, were sixty-two and sixty-five respectively.
McKinley had chosen carefully: a more orthodox phalanx of Republicans would be difficult to assemble. To a man, these conservatives believed in the sanctity of property and the patrician responsibilities of wealth and power.
Their eyes were honest, but hard (Knox again the exception, with his veiled, astigmatic stare). They were accustomed to luxury travel on complimentary railroad passes, and a myriad of other corporate privileges. They were prepared, in return, to give trust lords such as J. P. Morgan their favorable support in disputes between capital and labor, or local and interstate commerce. They tacitly acknowledged that Wall Street, rather than the White House, had executive control of the economy, with the legislative cooperation of Congress and the judicial backing of the Supreme Court. This conservative alliance, forged after the Civil War, was intended to last well into the new century, if not forever. Senator Hanna was determined to protect it: “Let well enough alone!”
Theodore Rex Page 5
