Theodore Roosevelt: An Autobiography
several days the Nation trembled on the brink of such a calamity, of
such a disaster.
During these days both the Secretary of the Treasury and I personally
were in hourly communication with New York, following every change in
the situation, and trying to anticipate every development. It was
the obvious duty of the Administration to take every step possible to
prevent appalling disaster by checking the spread of the panic before
it grew so that nothing could check it. And events moved with such
speed that it was necessary to decide and to act on the instant, as each
successive crisis arose, if the decision and action were to accomplish
anything. The Secretary of the Treasury took various actions, some
on his own initiative, some by my direction. Late one evening I was
informed that two representatives of the Steel Corporation wished to see
me early the following morning, the precise object not being named. Next
morning, while at breakfast, I was informed that Messrs. Frick and
Gary were waiting at the office. I at once went over, and, as the
Attorney-General, Mr. Bonaparte, had not yet arrived from Baltimore,
where he had been passing the night, I sent a message asking the
Secretary of State, Mr. Root, who was also a lawyer, to join us, which
he did. Before the close of the interview and in the presence of the
three gentlemen named, I dictated a note to Mr. Bonaparte, setting forth
exactly what Messrs. Frick and Gary had proposed, and exactly what I
had answered--so that there might be no possibility of misunderstanding.
This note was published in a Senate Document while I was still
President. It runs as follows:
THE WHITE HOUSE, Washington, November 4, 1907.
My dear Mr. Attorney-General:
Judge E. H. Gary and Mr. H. C. Frick, on behalf of the Steel
Corporation, have just called upon me. They state that there is a
certain business firm (the name of which I have not been told, but
which is of real importance in New York business circles), which will
undoubtedly fail this week if help is not given. Among its assets are
a majority of the securities of the Tennessee Coal Company. Application
has been urgently made to the Steel Corporation to purchase this stock
as the only means of avoiding a failure. Judge Gary and Mr. Frick
informed me that as a mere business transaction they do not care to
purchase the stock; that under ordinary circumstances they would not
consider purchasing the stock, because but little benefit will come to
the Steel Corporation from the purchase; that they are aware that the
purchase will be used as a handle for attack upon them on the ground
that they are striving to secure a monopoly of the business and prevent
competition--not that this would represent what could honestly be said,
but what might recklessly and untruthfully be said.
They further informed me that, as a matter of fact, the policy of the
company has been to decline to acquire more than sixty per cent of
the steel properties, and that this purpose has been persevered in for
several years past, with the object of preventing these accusations,
and, as a matter of fact, their proportion of steel properties has
slightly decreased, so that it is below this sixty per cent, and the
acquisition of the property in question will not raise it above sixty
per cent. But they feel that it is immensely to their interest, as to
the interest of every responsible business man, to try to prevent a
panic and general industrial smash-up at this time, and that they are
willing to go into this transaction, which they would not otherwise
go into, because it seems the opinion of those best fitted to express
judgment in New York that it will be an important factor in preventing
a break that might be ruinous; and that this has been urged upon them by
the combination of the most responsible bankers in New York who are now
thus engaged in endeavoring to save the situation. But they asserted
that they did not wish to do this if I stated that it ought not to be
done. I answered that, while of course I could not advise them to take
the action proposed, I felt it no public duty of mine to interpose any
objections.
Sincerely yours, (Signed) THEODORE ROOSEVELT.
HON. CHARLES J. BONAPARTE, Attorney-General.
Mr. Bonaparte received this note in about an hour, and that same morning
he came over, acknowledged its receipt, and said that my answer was the
only proper answer that could have been made, having regard both to
the law and to the needs of the situation. He stated that the legal
situation had been in no way changed, and that no sufficient ground
existed for prosecution of the Steel Corporation. But I acted purely on
my own initiative, and the responsibility for the act was solely mine.
I was intimately acquainted with the situation in New York. The word
"panic" means fear, unreasoning fear; to stop a panic it is necessary
to restore confidence; and at the moment the so-called Morgan interests
were the only interests which retained a full hold on the confidence of
the people of New York--not only the business people, but the immense
mass of men and women who owned small investments or had small savings
in the banks and trust companies. Mr. Morgan and his associates were
of course fighting hard to prevent the loss of confidence and the panic
distrust from increasing to such a degree as to bring any other big
financial institutions down; for this would probably have been followed
by a general, and very likely a worldwide, crash. The Knickerbocker
Trust Company had already failed, and runs had begun on, or were
threatened as regards, two other big trust companies. These companies
were now on the fighting line, and it was to the interest of everybody
to strengthen them, in order that the situation might be saved. It was
a matter of general knowledge and belief that they, or the individuals
prominent in them, held the securities of the Tennessee Coal and Iron
Company, which securities had no market value, and were useless as a
source of strength in the emergency. The Steel Corporation securities,
on the contrary, were immediately marketable, their great value being
known and admitted all over the world--as the event showed. The proposal
of Messrs. Frick and Gary was that the Steel Corporation should at once
acquire the Tennessee Coal and Iron Company, and thereby substitute,
among the assets of the threatened institutions (which, by the way,
they did not name to me), securities of great and immediate value for
securities which at the moment were of no value. It was necessary for
me to decide on the instant, before the Stock Exchange opened, for the
situation in New York was such that any hour might be vital, and failure
to act for even an hour might make all subsequent effort to act utterly
useless. From the best information at my disposal, I believed (what
was actually the fact) that the addition of the Tennessee Coal and
Iron property would only increase the proportion of the Steel Company's
holdings by about four per cent, making them about sixty-two per cent
instead of about fifty-eight per cent of the total value in the country;
an addition which, by itself, in my judgment (concurred in, not only by
the Attorney-General but by every competent lawyer), worked no change
in the legal status of the Steel corporation. The diminution in the
percentage of holdings, and production, has gone on steadily, and the
percentage is now about ten per cent less than it was ten years ago.
The action was emphatically for the general good. It offered the only
chance for arresting the panic, and it did arrest the panic. I answered
Messrs. Frick and Gary, as set forth in the letter quoted above, to the
effect that I did not deem it my duty to interfere, that is, to forbid
the action which more than anything else in actual fact saved the
situation. The result justified my judgment. The panic was stopped,
public confidence in the solvency of the threatened institution being at
once restored.
Business was vitally helped by what I did. The benefit was not only
for the moment. It was permanent. Particularly was this the case in the
South. Three or four years afterwards I visited Birmingham. Every man
I met, without exception, who was competent to testify, informed me
voluntarily that the results of the action taken had been of the utmost
benefit to Birmingham, and therefore to Alabama, the industry having
profited to an extraordinary degree, not only from the standpoint of the
business, but from the standpoint of the community at large and of the
wage-workers, by the change in ownership. The results of the action I
took were beneficial from every standpoint, and the action itself, at
the time when it was taken, was vitally necessary to the welfare of the
people of the United States.
I would have been derelict in my duty, I would have shown myself a timid
and unworthy public servant, if in that extraordinary crisis I had not
acted precisely as I did act. In every such crisis the temptation to
indecision, to non-action, is great, for excuses can always be found for
non-action, and action means risk and the certainty of blame to the man
who acts. But if the man is worth his salt he will do his duty, he will
give the people the benefit of the doubt, and act in any way which
their interests demand and which is not affirmatively prohibited by law,
unheeding the likelihood that he himself, when the crisis is over and
the danger past, will be assailed for what he has done.
Every step I took in this matter was open as the day, and was known in
detail at the moment to all people. The press contained full accounts of
the visit to me of Messrs. Frick and Gary, and heralded widely and
with acclamation the results of that visit. At the time the relief and
rejoicing over what had been done were well-nigh universal. The danger
was too imminent and too appalling for me to be willing to condemn those
who were successful in saving them from it. But I fully understood and
expected that when there was no longer danger, when the fear had been
forgotten, attack would be made upon me; and as a matter of fact after
a year had elapsed the attack was begun, and has continued at intervals
ever since; my ordinary assailant being some politician of rather cheap
type.
If I were on a sail-boat, I should not ordinarily meddle with any of the
gear; but if a sudden squall struck us, and the main sheet jammed, so
that the boat threatened to capsize, I would unhesitatingly cut the main
sheet, even though I were sure that the owner, no matter how grateful
to me at the moment for having saved his life, would a few weeks later,
when he had forgotten his danger and his fear, decide to sue me for the
value of the cut rope. But I would feel a hearty contempt for the owner
who so acted.
There were many other things that we did in connection with
corporations. One of the most important was the passage of the meat
inspection law because of scandalous abuses shown to exist in the great
packing-houses in Chicago and elsewhere. There was a curious result of
this law, similar to what occurred in connection with the law providing
for effective railway regulation. The big beef men bitterly opposed the
law; just as the big railway men opposed the Hepburn Act. Yet three
or four years after these laws had been put on the statute books every
honest man both in the beef business and the railway business came to
the conclusion that they worked good and not harm to the decent business
concerns. They hurt only those who were not acting as they should have
acted. The law providing for the inspection of packing-houses, and the
Pure Food and Drugs Act, were also extremely important; and the way in
which they were administered was even more important. It would be hard