Knox’s willingness to invoke the Sherman Act was concussive in its effect on financial markets. Even as Hanna stood listening to Griggs in the parlor car, J. P. Morgan was working to avoid a panic on Wall Street. At first, Morgan had refused to believe the news from Washington. But there had been such a wild rush to sell at 9:00 A.M., accompanied by reports of “demoralized” exchanges in London, Paris, and Berlin, that his instinctive reaction was to counterbuy. More stocks fell off the board during the first hour than in a normal day’s trading. Morgan bought steadily through lunchtime, and around three o’clock prices began to rally.
It had been a near thing. The floor was loud with denunciations of Theodore Roosevelt. Not since President Cleveland’s Venezuela Note in 1895 had stockbrokers been so taken by surprise. An investor who knew the Attorney General rang to ask why he had not gotten “a friendly tip in advance.” Back over the line came Knox’s curt reply, “There is no stock ticker in the Department of Justice.”
Shortly afterward, all telecommunications with Washington were broken. A violent snowstorm descended over the Atlantic seaboard, coating the Northeastern grid with ice. Wires snapped by the thousand, hanging from their poles in tinkling festoons. By the time Hanna and Griggs reached the capital, Pennsylvania Avenue was muffled with snow.
BEFORE NIGHTFALL THE following day, seven representatives of the House of Morgan had arrived in town, including Morgan himself. He marched through the Arlington Hotel’s slushy entrance under a testudo of umbrellas. A spokesman announced that the chairman had come south to dine with his old friend Senator Depew and a group of mutual acquaintances prominent in politics, finance, and industry. Morgan called this occasional fraternity the “Corsair Club.” The name, taken from his yacht, had waggish associations with piracy, not to mention his image as captain of the United States economy.
If the purpose of the dinner was convivial, it failed miserably. Henry Adams described the general mood as “black,” and reported that “Pierpont sulked like a child.” When, at ten o’clock, a telephone call from the President invited Depew to bring his guests around for a visit, Morgan had to be coaxed to go along. Thirteen Corsairs piled into a series of hacks and automobiles and drove four blocks through the still-falling snow. Roosevelt received them with polite formality. Responding in kind, they stayed off the subject of Northern Securities.
He was intelligent enough to know they came only because a presidential invitation could not be declined. Until forty-eight hours before, these men had stood with him. Now they stood shoulder to shoulder against him, legionnaires of the established economic order, bristling with wealth, courteously hostile behind their breastplates of boiled cotton. Depew. Morgan. Perkins. Rockefeller. Steele. Hanna. Cassatt. Their very names spelled power. So did that of Elihu Root—a Corsair too, and no longer Roosevelt’s automatic ally.
The Secretary of War was a bitter man that night. It was humiliating for him to have been surprised by Wednesday’s announcement. The knowledge that other Cabinet colleagues had been surprised too only emphasized Knox’s sudden ascendancy. Root was convinced that Roosevelt must have “some personal reason” for eschewing his counsel.
Either that, or as Henry Adams put it, “Theodore betrays his friends for his own ambition.”
SURE ENOUGH, it was Knox, not Root, who sat at the President’s elbow when J. P. Morgan returned to the White House alone the next morning, Saturday, 22 February. Aware, perhaps, that lava was rolling his way, Roosevelt needed the protection of a cool, hard legal front.
There was something volcanic about Morgan. The hot glare and fiery complexion, flushing so deep that the engorged nose seemed about to burst, the smoldering cigar, the mountainous shoulders—merely to look at him was to register tremors.
Yet interlocutors soon discovered that Morgan’s sparks and smoke were a kind of screen, concealing someone essentially quiet and shy, almost clerical. As a youth, he had dreamed of becoming a professor of mathematics; he was equally attracted to the rituals of the Episcopal Church, in which he had served as a vestryman for forty years. But he was also the inheritor of a family bank, and had a lightning ability to figure large sums of money. These endowments, plus his involuntary power of domination, made him de ipse the nation’s financial leader. He sought relief from numbers by collecting indiscriminate quantities of great or ghastly art. His Madison Avenue library bulged with uncut volumes. Occasionally, in country homes, Morgan would fumble at a passing woman.
Whatever qualms the President may have had in granting an interview, he had little difficulty handling Morgan. Or at least Roosevelt chose not to remember any, when recounting the conversation afterward. Morgan had seemed less furious than puzzled. Why had the Administration not asked him to correct irregularities in the new trust’s charter?
ROOSEVELT That is just what we did not want to do.
MORGAN If we have done anything wrong, send your man to my man and they can fix it up.
ROOSEVELT That can’t be done.
KNOX We don’t want to fix it up, we want to stop it.
MORGAN Are you going to attack my other interests, the Steel Trust and others?
ROOSEVELT Certainly not—unless we find out that in any case they have done something that we regard as wrong.
Alone with Knox later, Roosevelt mused, “That is a most illuminating illustration of the Wall Street point of view.” Morgan could think of the President of the United States only as “a big rival operator” with whom to cut a deal.
THE HOUSE OF MORGAN was reduced to pleading, in the weeks that followed, that its chairman be spared the indignity of public testimony. He was old; his honor was vital to the nation’s credit. Roosevelt asked Knox if it was necessary to include Morgan in the suit. “Well, Mr. President, if you direct me to leave his name out I will,” the Attorney General said. “But in that case I will not sign my name to the bill.”
Knox’s formal complaint, dated 10 March 1902, accordingly listed James J. Hill and J. Pierpont Morgan as defendants. E. H. Harriman, who stood to make more out of the merger than both principals, was granted technical anonymity as an “associate stockholder.” But Assistant Attorney General James M. Beck, assigned by Knox to brief the Eighth Circuit Court on the case, named Harriman as one of “the great triumvirate” seeking to impose upon the Northwest a monopoly “infinite in scope, perpetual in character.”
OF THE THREE DEFENDANTS, Hill was the angriest and most determined to fight all the way to the Supreme Court. Morgan and Harriman suggested a settlement, in order to protect their other interests. But Hill insisted on contesting the government’s suit. “There is nothing in the operation of the Northern Securities Company that violates the Sherman Law or the laws of any other state.” The two railroads named by Knox had been cooperating amicably for twenty years. Indeed, in regions where they could have competed, the Great Northern and Northern Pacific had charged mostly identical rates. Was this the “restraint of trade” Roosevelt sought to prosecute? Hill was damned if he was going to dismantle the world’s greatest transport combination because of “political adventurers who have never done anything but pose and draw a salary.”
Roosevelt’s action won support from both sides of the political field alike, as a much-needed check on the ramifications of U.S. v. E. C. Knight. Liberals welcomed a blow struck by authority against monopoly. Conservatives were confident that the Supreme Court would reaffirm that holding-company combinations were both legal and benign.
Roosevelt uttered no predictions and made no boasts. He accepted full responsibility for the suit, even excusing the original plaintiffs in Minnesota. “I am rather inclined to think it was as much a surprise to them as to anyone.” He was content, after seizing public attention, to let Northern Securities v. U.S. have due process. The case was unlikely to reach the Supreme Court before the winter term of 1903–1904; time enough for trumpeting then, if he won. Until another large matter arose to challenge his powers, he could return to routine presidential affairs.
&n
bsp; He pretended to be bored by the state visit of Prince Heinrich of Prussia (“I shall take him out to ride in the rain—and I hope it will rain like hell!”), but obviously enjoyed playing host amid pomp and ceremony. Prince Heinrich was the brother of Kaiser Wilhelm II, and an admiral in the German Navy, so Roosevelt was able to pump him on European politics and naval affairs. When a providential downpour came, he was touched by the efforts of “the wretched creature” to gallop at full speed behind him. Heinrich was rewarded with the most elaborate stag dinner ever seen in Washington.
Alice Roosevelt—debutante of the season, and glowing prettier by the day as the richest bucks in town vied for her favor—attracted even more attention than the royal visitor. Gorgeous in white lace and “Alice blue” velvet, she smashed champagne over a new, American-built yacht, which the Prince had come to pick up for his brother. Heinrich, enchanted, returned home and recommended that Fraulein Alice be invited to visit the Kaiser’s court. But Roosevelt decided she should go to London instead, as his representative at King Edward VII’s coronation.
“ROOSEVELT … TOLD THE DISAPPOINTED GIRL
SHE WOULD HAVE TO STAY HOME.”
Father and daughter at the launching of the Kaiser’s yacht, 25 February 1902 (photo credit 5.1)
He regretted the impulse when a British newspaper counseled that Alice be treated as “the oldest daughter of an Emperor.” A Washington scandal sheet began to make arch references to “the Crown Prin—beg pardon—daughter of the President.” Roosevelt was annoyed by these intimations of antirepublicanism, and told the disappointed girl she would have to stay home.
In the meantime, he basked in popular praise. Previous Presidents had sued the trusts with various success, but none had done so voluntarily, and with such virile force. He had acted, on grounds few lawyers considered valid, at the height of the greatest merger movement in history.
For these reasons, his old friend Owen Wister placed the Northern Securities suit “at the top of all Roosevelt’s great and courageous strokes in the domain of domestic statesmanship.” Whether fated for good or ill, it had excited public optimism at the very moment that public pessimism saw no end to the tyranny of wealth. “I think that to make up his mind to take this first step, to declare this war, on the captains of industry, was a stroke of genius; and I more than think—I know—that it marked the turn of a rising tide.”
CHAPTER 6
Two Pilots Aboard, and Rocks Ahead
It looks to me as if this counthry was
goin’ to th’ divil.
“CHAOS! EVERYWHERE!” Henry Watterson exulted on 13 March 1902. The veteran Democratic pundit was visiting Washington to scout out future opportunities for his party. “For the first time these thirty years,” he reported, “it is the Republicans who are at sea.”
Rival hands were tugging at the wheel of the ship of state. One pair belonged to President Roosevelt, who was responsible for last month’s violent tack to port; the other to Senator Hanna, who wanted to resume the course set by President McKinley. “Both compass and rudder are still intact,” wrote Watterson, enjoying his metaphor. “But there are two pilots aboard, and rocks ahead.”
On the very day these remarks were published in The Washington Post, the Washington Times printed a front-page, foot-high photograph of Hanna, captioned THE MAN OF THE HOUR. Since the caption was very large, and the copyright date 1901 very small, readers were persuaded that the Senator was his old self again. Massive, placid, benign, he loomed from the page, dwarfing the masthead. Gone—or at least refined by studio lighting—was his former porcine flabbiness. Here was Statesmanship, glowing on the fine brow and in the magnificent eyes; here was Solidity and Sound Money.
Hanna’s presidential stock had been rising on Wall Street since the Northern Securities suit. Bankers and industrialists took his candidacy in 1904 for granted. So did Old Guard politicians in Washington. They estimated that he already had enough delegates to be nominated on the first ballot. His mail was thick with appeals for him to declare, and not all were typed on corporate stationery. “While we admire the presidint Theodore Roosevelt,” one correspondent scrawled, “there are such things as being to strenuous, what we wan is a man of the people.”
Hanna dismissed the campaign talk as “amusing,” but did not discourage it. His backers, led by Senator Nathan B. Scott and other probusiness members of the Republican National Committee, were serious. Laugh as he might—“that smile would grease a wagon,” a henchman said—he had to be impressed when five hundred members of the Society of Ohio rose in his honor, waving starched napkins and hailing him as “the next President of the United States.”
Deep in his soul, Hanna did not want the job. He was sixty-four and ailing. Every ascent of the Capitol steps in the March wind worsened his bursitis and packed more calcium around his knees. Grief for McKinley still tormented him, as did remorse over their occasional quarrels. He was prone to periods of melancholy, lasting weeks at a time; during these fits, he could not recognize his own son in the street. As for ambition, he had only to watch Roosevelt lustily working the crowd at White House receptions to realize that his senatorial seat suited him much better than the Presidency.
That chair, which he filled so amply it seemed a polished, creaking part of him, emanated prestige rather than power. Hanna had been in the Senate only five years, and was thus junior to more than half of his colleagues. Senator Spooner made more brilliant speeches in a week than Hanna had in his whole career. He could never hope to match the parliamentary skills of an Aldrich or an Allison. Henry Cabot Lodge’s orations sounded like Greek to him, and indeed some phrases were.
Yet Hanna’s web of influence stretched in so many directions—to the grass roots of party politics, to labor unions and trade associations and countless loyal offices in the civil service—that the Senate leaders granted him extraordinary privileges. They could hardly slight a man whom four out of five voters (according to a recent poll) believed to be “the greatest living American.” It was understood that “Uncle Mark” called upon nobody, except the President of the United States. He received callers in the Capitol’s vice-presidential suite. When he rose to speak on one of the issues he had made his own—shipping subsidies, labor relations, immigration reform—the Senate always filled, and he was listened to with a hush that sounded louder than applause.
Such eminence, plus a fat portfolio and a box of honor in Cleveland’s Hanna Theater, were all that he asked from life. But he must soon campaign for re-election. Clearly, presidential rumors would be to his advantage in rallying the Ohio Republican Party; he should not deny them too vehemently. His disclaimer, when it came, was mild: “I am not in any sense a candidate, and trust my friends will discourage any movement looking toward that end.”
The newspapers published this statement in small print, while they headlined a more immediate threat to Roosevelt’s authority.
AFTER THREE MONTHS, Nelson A. Miles still bore on his cheek the angry red of reprimand. He wanted revenge on the President and the Secretary of War. Thanks to continued access to War Department materials, he thought he now had a lethal weapon: secret reports of atrocities perpetrated by American forces against the insurrectos in the Philippines. Here was an issue which could embarrass Roosevelt and Root, rally all anti-imperialists, and make a political hero of himself. Miles took care, however, not to raise the issue in such a way as to risk further charges of insubordination. As a preliminary move, he granted an interview to Henry Watterson.
The Commanding General, Watterson reported, had been refused permission to visit the Philippines, where he wanted to conduct an inquiry into the insurrection, now more than three years old. Watterson did not state what, exactly, Miles supposed the inquiry might reveal. But he implied that dark truths were being suppressed, to Roosevelt’s likely political cost. “As events are lining up in Congress, the paramount issue, the issue of issues, in 1904 will be the Philippines.”
The White House remained silent as amplifi
cations of the story spread nationwide on 17 March. Then a furious denunciation of Miles appeared in the Boston Herald. Nobody familiar with Rooseveltian invective could doubt who was the “very highest possible authority” cited:
General Miles’s most recent effort to recall himself to public attention … is so palpably an effort in his own behalf that the mere statement of it ought to suffice to convince the country of his insincerity.… His whole effort is to discredit the Administration. He is becoming daily more and more of an intriguer, and therefore more and more useless as the head of the Army.… There is absolutely no truth in the statement that the President and Secretary Root fear General Miles, or are personally uneasy because of anything he may do.
Not content with this, Roosevelt dictated an open letter to Miles, full of recriminations. “I do not like the clear implication … that brutalities have been committed by our troops in the Philippines.” He admitted that there had been “sporadic cases” of violence against prisoners. But these were inevitable in war, as the general must surely remember from the days when he was tracking Geronimo. “In the Wounded Knee fight the troops under your command killed squaws and children as well as unarmed Indians.”
The letter was deemed too confrontational to send, let alone publish, so he unbosomed himself in a series of memoranda to Elihu Root. He wanted the record to show that Miles had once approached him in an “utterly fatuous” attempt to run against William McKinley. “To my mind his actions can bear only the construction that his desire is purely to gratify his selfish ambition, his vanity, or his spite.”
The memos were classified Confidential, Private, and Personal. Root filed them, knowing such strictures, in Roosevelt’s parlance, usually meant “Hold for Publication.” He had hardly done so, indeed, before Congress asked for documents relating to Miles’s insinuations, and the President sanctioned their release.
Theodore Rex Page 13
