The Moment Of Decision

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Roosevelt had to meet a problem none of his predecessors had felt compelled to face: the ever-increasing growth of enormous industrial combinations that were concentrating power in the hands of a few financial giants who were subject to no public control. One after another the huge trusts, or holding companies, created powerful monopolies that seemed to be beyond the reach of government. Mines, factories, transportation, oil refining, the whole system of production and distribution that determined the conditions under which the ordinary citizen worked, lived, and paid his bills, were increasingly run by a few wealthy men. What worried people was that America seemed to be turning into a tight financial oligarchy. The government’s power to intervene in the public interest was not being asserted, and perhaps it was being lost forever. An attempt to assert it was made in 1890 when Congress passed the Sherman Antitrust Act, which said flatly: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal.” Yet there was little attempt to enforce this act, and it was virtually emasculated in 1895 when the Supreme Court, passing on a monopoly in the field of sugar refining, held that manufacturing was not commerce and that a monopoly that did not have direct effect on commerce was not subject to control by the government.

Then came the formation of the Northern Securities Company, in 1901. This grew out of a fight between two railroad barons, E. H. Harriman of the Union Pacific and James J. Hill of the Great Northern, who were contending for control of the Burlington Railroad. The two got into a frenzied struggle for ownership of the Northern Pacific (which owned the Burlington) and brought on a brief, spectacular Wall Street panic. J. P. Morgan restored peace by setting up the Northern Securities Company, a $400 million holding company, to take over the stock of both Great Northern and Northern Pacific. The stock market flurry subsided, and Wall Street had a huge new trust which had airtight control of the railroads that served the entire Northwest.

At this point Theodore Roosevelt acted. On February 19, 1902, Attorney General Philander C. Knox abruptly announced that at the direction of the President he was proceeding against the Northern Securities Company for violation of the Sherman act.

This news hit Wall Street like a bomb. J. P. Morgan, who had a low boiling point anyway, was both shocked and outraged. For the government to try to interfere with this new industrial combination was bad enough; for it to act without first privately letting Morgan know that it proposed to act, thus giving him a chance to smooth matters out without the need for legal action, struck him as downright unfair. He hurried off to Washington, a formidable figure. (The photographer Edward Steichen once remarked that to look into Morgan’s eyes when the man had developed a full head of steam was like staring at the headlight of an onrushing express train at night.) Morgan went to the White House, sat down with Roosevelt, and complained that the President ought to have given him advance warning of his proposed step.

Unruffled, Roosevelt replied that this was exactly what he had not wanted to do. Then Morgan went on, with wholly unconscious arrogance, to express his basic point of view—that the financial oligarchy and the government of the United States were equals who ought to be able to make a quiet deal in cases like this.

“If we have done anything wrong,” he protested, “send your man to my man and they can fix it up.”

Not many Americans at that time cared to face the wrath of J. P. Morgan, but Roosevelt was up to it. He simply shook his head, and said: “That can’t be done.”

The conference ended on that note. A year later a federal court ruled that the Northern Securities Company was indeed in violation of the Sherman act and ordered it dissolved, and a year after that the Supreme Court receded from its earlier position and upheld the lower court. The famous era of trust busting was under way.

Its actual fruits in the long run were not of paramount importance. The trend toward gigantic combinations, in a country whose industrial and financial wealth was growing at a breakneck pace, was not stopped, and is still visible, bringing both problems and benefits for later generations. What really mattered was that the government of the United States, once and for all, had asserted its sovereignty. It had the power to intervene, it would use that power when it saw fit, and it would not bargain with Wall Street. The national capital was and would continue to be Washington and not the financial district of New York. Theodore Roosevelt had changed the climate, permanently.

“I … never had any doubt”

Consider now one more moment of historic decision, unlike any of these others but once again requiring a President to say “yes” or “no” to a question of incalculable importance. In the month of July, 1945, it was up to Harry Truman (he who liked to remind himself that the President is one man who cannot pass the buck) to say whether the United States would or would not drop the first atomic bomb on Japan.

The actual moment of decision was singularly undramatic, but the background was extremely tense.