Theodore Roosevelt: An Autobiography
The suit against the Steel Trust by the Government has brought vividly
before our people the need of reducing to order our chaotic Government
policy as regards business. As President, in Messages to Congress I
repeatedly called the attention of that body and of the public to the
inadequacy of the Anti-Trust Law by itself to meet business conditions
and secure justice to the people, and to the further fact that it might,
if left unsupplemented by additional legislation, work mischief, with no
compensating advantage; and I urged as strongly as I knew how that
the policy followed with relation to railways in connection with the
Inter-State Commerce Law should be followed by the National Government
as regards all great business concerns; and therefore that, as a
first step, the powers of the Bureau of Corporations should be greatly
enlarged, or else that there should be created a Governmental board or
commission, with powers somewhat similar to those of the Inter-State
Commerce Commission, but covering the whole field of inter-State
business, exclusive of transportation (which should, by law, be kept
wholly separate from ordinary industrial business, all common ownership
of the industry and the railway being forbidden). In the end I have
always believed that it would also be necessary to give the National
Government complete power over the organization and capitalization of
all business concerns engaged in inter-State commerce.
A member of my Cabinet with whom, even more than with the various
Attorneys-General, I went over every detail of the trust situation, was
the one time Secretary of the Interior, Mr. James R. Garfield. He writes
me as follows concerning the suit against the Steel Corporation:
"Nothing appeared before the House Committee that made me believe we
were deceived by Judge Gary.
"This, I think, is a case that shows clearly the difference between
destructive litigation and constructive legislation. I have not yet seen
a full copy of the Government's petition, but our papers give nothing
that indicates any kind of unfair or dishonest competition such as
existed in both the Standard Oil and Tobacco Cases. As I understand it,
the competitors of the Steel Company have steadily increased in strength
during the last six or seven years. Furthermore, the per cent of the
business done by the Steel Corporation has decreased during that time.
As you will remember, at our first conference with Judge Gary, the Judge
stated that it was the desire and purpose of the Company to conform
to what the Government wished, it being the purpose of the Company
absolutely to obey the law both in spirit and letter. Throughout the
time that I had charge of the investigation, and while we were in
Washington, I do not know of a single instance where the Steel Company
refused any information requested; but, on the contrary, aided in every
possible way our investigation.
"The position now taken by the Government is absolutely destructive
of legitimate business, because they outline no rule of conduct for
business of any magnitude. It is absurd to say that the courts can
lay down such rules. The most the courts can do is to find as legal or
illegal the particular transactions brought before them. Hence, after
years of tedious litigation there would be no clear-cut rule for future
action. This method of procedure is dealing with the device, not the
result, and drives business to the elaboration of clever devices, each
of which must be tested in the courts.
"I have yet to find a better method of dealing with the anti-trust
situation than that suggested by the bill which we agreed upon in the
last days of your Administration. That bill should be used as a basis
for legislation, and there could be incorporated upon it whatever may
be determined wise regarding the direct control and supervision of
the National Government, either through a commission similar to the
Inter-State Commerce Commission or otherwise."
Before taking up the matter in its large aspect, I wish to say one word
as to one feature of the Government suit against the Steel Corporation.
One of the grounds for the suit is the acquisition by the Steel
Corporation of the Tennessee Coal and Iron Company; and it has been
alleged, on the authority of the Government officials engaged in
carrying on the suit, that as regards this transaction I was misled by
the representatives of the Steel Corporation, and that the facts were
not accurately or truthfully laid before me. This statement is not
correct. I believed at the time that the facts in the case were as
represented to me on behalf of the Steel Corporation, and my further
knowledge has convinced me that this was true. I believed at the time
that the representatives of the Steel Corporation told me the truth as
to the change that would be worked in the percentage of the business
which the proposed acquisition would give the Steel Corporation, and
further inquiry has convinced me that they did so. I was not misled. The
representatives of the Steel Corporation told me the truth as to what
the effect of the action at that time would be, and any statement that I
was misled or that the representatives of the Steel Corporation did
not thus tell me the truth as to the facts of the case is itself not in
accordance with the truth. In _The Outlook_ of August 19 last I gave
in full the statement I had made to the Investigating Committee of the
House of Representatives on this matter. That statement is accurate, and
I reaffirm everything I therein said, not only as to what occurred, but
also as to my belief in the wisdom and propriety of my action--indeed,
the action not merely was wise and proper, but it would have been a
calamity from every standpoint had I failed to take it. On page 137 of
the printed report of the testimony before the Committee will be found
Judge Gary's account of the meeting between himself and Mr. Frick and
Mr. Root and myself. This account states the facts accurately. It has
been alleged that the purchase by the Steel Corporation of the property
of the Tennessee Coal and Iron Company gave the Steel Corporation
practically a monopoly of the Southern iron ores--that is, of the iron
ores south of the Potomac and the Ohio. My information, which I
have every reason to believe is accurate and not successfully to be
challenged, is that, of these Southern iron ores the Steel Corporation
has, including the property gained from the Tennessee Coal and Iron
Company, less than 20 per cent--perhaps not over 16 per cent. This is
a very much smaller percentage than the percentage it holds of the Lake
Superior ores, which even after the surrender of the Hill lease will
be slightly over 50 per cent. According to my view, therefore,
and unless--which I do not believe possible--these figures can be
successfully challenged, the acquisition of the Tennessee Coal and Iron
Company's ores in no way changed the situation as regards making the
Steel Corporation a monopoly.[*] The showing as to the percentage of
production of all kinds of steel ingots and steel castings in the
United States by the Steel Corporation and by all other manufacturers
respectively makes an even stronger case. It makes the case even
stronger than I put it in my testimony before the Investigating
Committee, for I was scrupulously careful to make statements that erred,
if at all, against my own position. It appears from the figures of
production that in 1901 the Steel Corporation had to its credit nearly
66 per cent of the total production as against a little over 34 per cent
by all other steel manufacturers. The percentage then shrank steadily,
until in 1906, the year before the acquisition of the Tennessee Coal and
Iron properties, the percentage was a little under 58 per cent. In spite
of the acquisition of these properties, the following year, 1907, the
total percentage shrank slightly, and this shrinking has continued until
in 1910 the total percentage of the Steel Corporation is but a little
over 54 per cent, and the percentage by all other steel manufacturers
but a fraction less than 46 per cent. Of the 54 3_10 per cent produced
by the Steel Corporation 1 9_10 per cent is produced by the former
Tennessee Coal and Iron Company. In other words, these figures show that
the acquisition of the Tennessee Coal and Iron Company did not in the
slightest degree change the situation, and that during the ten
years which include the acquisition of these properties by the Steel
Corporation the percentage of total output of steel manufacturers in
this country by the Steel Corporation has shrunk from nearly 66 per cent
to but a trifle over 54 per cent. I do not believe that these figures
can be successfully controverted, and if not successfully controverted
they show clearly not only that the acquisition of the Tennessee
Coal and Iron properties wrought no change in the status of the Steel
Corporation, but that the Steel Corporation during the decade has
steadily lost, instead of gained, in monopolistic character.
[*] My own belief is that our Nation should long ago have
adopted the policy of merely leasing for a term of years
mineral-bearing land; but it is the fault of us ourselves,
of the people, not of the Steel Corporation, that this
policy has not been adopted.
So much for the facts in this particular case. Now for the general
subject. When my Administration took office, I found, not only that
there had been little real enforcement of the Anti-Trust Law and but
little more effective enforcement of the Inter-State Commerce Law,
but also that the decisions were so chaotic and the laws themselves so
vaguely drawn, or at least interpreted in such widely varying fashions,
that the biggest business men tended to treat both laws as dead letters.
The series of actions by which we succeeded in making the Inter-State
Commerce Law an efficient and most useful instrument in regulating the
transportation of the country and exacting justice from the big railways
without doing them injustice--while, indeed, on the contrary, securing
them against injustice--need not here be related. The Anti-Trust Law it
was also necessary to enforce as it had never hitherto been enforced;
both because it was on the statute-books and because it was imperative
to teach the masters of the biggest corporations in the land that they
were not, and would not be permitted to regard themselves as, above
the law. Moreover, where the combination has really been guilty of
misconduct the law serves a useful purpose, and in such cases as those
of the Standard Oil and Tobacco Trusts, if effectively enforced, the law
confers a real and great good.
Suits were brought against the most powerful corporations in the land,
which we were convinced had clearly and beyond question violated the
Anti-Trust Law. These suits were brought with great care, and only where
we felt so sure of our facts that we could be fairly certain that
there was a likelihood of success. As a matter of fact, in most of the
important suits we were successful. It was imperative that these suits
should be brought, and very real good was achieved by bringing them, for
it was only these suits that made the great masters of corporate capital
in America fully realize that they were the servants and not the masters
of the people, that they were subject to the law, and that they would
not be permitted to be a law unto themselves; and the corporations
against which we proceeded had sinned, not merely by being big (which
we did not regard as in itself a sin), but by being guilty of unfair
practices towards their competitors, and by procuring fair advantages
from the railways. But the resulting situation has made it evident that
the Anti-Trust Law is not adequate to meet the situation that has grown