Fighting the Fat Cats

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Roosevelt left a recollection of the meeting, which remains a classic moment in the history of dealings between business and government. In that account, Morgan asks Roosevelt why he had not quietly allowed Morgan to take care of the problem without resorting to the courts.

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."

There in brief was the divide between the new President who had a whip in his hand and the veteran financier who could barely imagine that whips could be wielded by anyone in Washington. After Morgan departed, Roosevelt confided to Knox his bemusement at the financier's manner. Morgan, T.R. said, had acted as though the President of the U.S. was just "a big rival operator."

Roosevelt directed Knox to continue to pursue his suit. All the same, Roosevelt remained open to more cooperative dealings with Morgan. For all his tough talk, Roosevelt really was willing to cut deals. But he wanted the business world on notice that the days of freewheeling combination were over. And Morgan had reason to play ball with Roosevelt. Northern Securities was only one of the many trusts he had assembled. General Electric, Western Union, International Harvester, Aetna Insurance--he controlled them all. Just a year earlier, he had put together what was then the world's largest corporation, U.S. Steel, whose $1.4 billion in assets was equal to 7% of the nation's gross national product. Roosevelt recorded that in their meeting Morgan had asked him bluntly, "Are you going to attack my other interests, the Steel Trust and others?" Roosevelt's answer couldn't have been entirely reassuring: "Certainly not--unless we find out that in any case they have done something wrong."

Though Roosevelt's Justice Department went on to bring 44 more antitrust suits in the course of his presidency, he never attacked any other of Morgan's interests. He even used Morgan as a mediator to help settle a Pennsylvania miners' strike that threatened to create a winter scarcity of coal for heating. And when he ran for President in 1904, Roosevelt was not above accepting campaign contributions from the very businesses he was pressuring, though he was so careful not to show them any favor in his second term that Henry C. Frick, one of Rockefeller's lieutenants, was left to grumble, "We bought the son of a bitch, but he wouldn't stay bought."

The suit against Northern Securities eventually landed at the Supreme Court, and Roosevelt won a narrow but crucial victory that opened the way for more aggressive use of the Sherman Antitrust Act in other cases. He also established a Department of Commerce and Labor, which included a Bureau of Corporations to monitor the budding monopolies. Roosevelt endlessly reassured Big Business that he intended merely to keep an eye on its conduct. But he let it be known that he meant business too. Only "the corporation that shrinks from the light" would have anything to fear from government, he once said. Then he added, "About the welfare of such corporations we need not be oversensitive."