Theodore Roosevelt An Autobiography by Theodore Roosevelt
by
Theodore Roosevelt
Part 8 out of 11
vitally necessary; but, of course, it created bitter opposition from
private interests.
One of the principles whose application was the source of much
hostility was this: It is better for the Government to help a poor man
to make a living for his family than to help a rich man make more
profit for his company. This principle was too sound to be fought
openly. It is the kind of principle to which politicians delight to
pay unctuous homage in words. But we translated the words into deeds;
and when they found that this was the case, many rich men, especially
sheep owners, were stirred to hostility, and they used the Congressmen
they controlled to assault us--getting most aid from certain
demagogues, who were equally glad improperly to denounce rich men in
public and improperly to serve them in private. The Forest Service
established and enforced regulations which favored the settler as
against the large stock owner; required that necessary reductions in
the stock grazed on any National Forest should bear first on the big
man, before the few head of the small man, upon which the living of
his family depended, were reduced; and made grazing in the National
Forests a help, instead of a hindrance, to permanent settlement. As a
result, the small settlers and their families became, on the whole,
the best friends the Forest Service has; although in places their
ignorance was played on by demagogues to influence them against the
policy that was primarily for their own interest.
Another principle which led to the bitterest antagonism of all was
this--whoever (except a bona-fide settler) takes public property for
private profit should pay for what he gets. In the effort to apply
this principle, the Forest Service obtained a decision from the
Attorney-General that it was legal to make the men who grazed sheep
and cattle on the National Forests pay for what they got. Accordingly,
in the summer of 1906, for the first time, such a charge was made;
and, in the face of the bitterest opposition, it was collected.
Up to the time the National Forests were put under the charge of the
Forest Service, the Interior Department had made no effort to
establish public regulation and control of water powers. Upon the
transfer, the Service immediately began its fight to handle the power
resources of the National Forests so as to prevent speculation and
monopoly and to yield a fair return to the Government. On May 1, 1906,
an Act was passed granting the use of certain power sites in Southern
California to the Edison Electric Power Company, which Act, at the
suggestion of the Service, limited the period of the permit to forty
years, and required the payment of an annual rental by the company,
the same conditions which were thereafter adopted by the Service as
the basis for all permits for power development. Then began a vigorous
fight against the position of the Service by the water-power
interests. The right to charge for water-power development was,
however, sustained by the Attorney-General.
In 1907, the area of the National Forests was increased by
Presidential proclamation more than forty-three million acres; the
plant necessary for the full use of the Forests, such as roads,
trails, and telephone lines, began to be provided on a large scale;
the interchange of field and office men, so as to prevent the
antagonism between them, which is so destructive of efficiency in most
great businesses, was established as a permanent policy; and the
really effective management of the enormous area of the National
Forests began to be secured.
With all this activity in the field, the progress of technical
forestry and popular education was not neglected. In 1907, for
example, sixty-one publications on various phases of forestry, with a
total of more than a million copies, were issued, as against three
publications, with a total of eighty-two thousand copies, in 1901. By
this time, also, the opposition of the servants of the special
interests in Congress to the Forest Service had become strongly
developed, and more time appeared to be spent in the yearly attacks
upon it during the passage of the appropriation bills than on all
other Government Bureaus put together. Every year the Forest Service
had to fight for its life.
One incident in these attacks is worth recording. While the
Agricultural Appropriation Bill was passing through the Senate, in
1907, Senator Fulton, of Oregon, secured an amendment providing that
the President could not set aside any additional National Forests in
the six Northwestern States. This meant retaining some sixteen million
of acres to be exploited by land grabbers and by the representatives
of the great special interests, at the expense of the public interest.
But for four years the Forest Service had been gathering field notes
as to what forests ought to be set aside in these States, and so was
prepared to act. It was equally undesirable to veto the whole
agricultural bill, and to sign it with this amendment effective.
Accordingly, a plan to create the necessary National Forest in these
States before the Agricultural Bill could be passed and signed was
laid before me by Mr. Pinchot. I approved it. The necessary papers
were immediately prepared. I signed the last proclamation a couple of
days before, by my signature, the bill became law; and, when the
friends of the special interests in the Senate got their amendment
through and woke up, they discovered that sixteen million acres of
timberland had been saved for the people by putting them in the
National Forests before the land grabbers could get at them. The
opponents of the Forest Service turned handsprings in their wrath; and
dire were their threats against the Executive; but the threats could
not be carried out, and were really only a tribute to the efficiency
of our action.
By 1908, the fire prevention work of the Forest Service had become so
successful that eighty-six per cent of the fires that did occur were
held down to an area of five acres or less, and the timber sales,
which yielded $60,000 in 1905, in 1908 produced $850,000. In the same
year, in addition to the work of the National Forests, the
responsibility for the proper handling of Indian timberlands was laid
upon the Forest Service, where it remained with great benefit to the
Indians until it was withdrawn, as a part of the attack on the
Conservation policy made after I left office.
By March 4, 1909, nearly half a million acres of agricultural land in
the National Forests had been opened to settlement under the Act of
June 11, 1906. The business management of the Forest Service became so
excellent, thanks to the remarkable executive capacity of the
Associate Forester, Overton W. Price (removed after I left office),
that it was declared by a well-known firm of business organizers to
compare favorably with the best managed of the great private
corporations, an opinion which was confirmed by the report of a
Congressional investigation, and by the report of the Presidential
Committee on Department method. The area of the National Forests had
increased from 43 to 194 million acres; the force from about 500 to
more than 3000. There was saved for public use in the National Forests
more Government timberland during the seven and a half years prior to
March 4, 1909, than during all previous and succeeding years put
together.
The idea that the Executive is the steward of the public welfare was
first formulated and given practical effect in the Forest Service by
its law officer, George Woodruff. The laws were often insufficient,
and it became well-nigh impossible to get them amended in the public
interest when once the representatives of privilege in Congress
grasped the fact that I would sign no amendment that contained
anything not in the public interest. It was necessary to use what law
was already in existence, and then further to supplement it by
Executive action. The practice of examining every claim to public land
before passing it into private ownership offers a good example of the
policy in question. This practice, which has since become general, was
first applied in the National Forests. Enormous areas of valuable
public timberland were thereby saved from fraudulent acquisition; more
than 250,000 acres were thus saved in a single case.
This theory of stewardship in the interest of the public was well
illustrated by the establishment of a water-power policy. Until the
Forest Service changed the plan, water-powers on the navigable
streams, on the public domain, and in the National Forests were given
away for nothing, and substantially without question, to whoever asked
for them. At last, under the principle that public property should be
paid for and should not be permanently granted away when such
permanent grant is avoidable, the Forest Service established the
policy of regulating the use of power in the National Forests in the
public interest and making a charge for value received. This was the
beginning of the water-power policy now substantially accepted by the
public, and doubtless soon to be enacted into law. But there was at
the outset violent opposition to it on the part of the water-power
companies, and such representatives of their views in Congress as
Messrs. Tawney and Bede.
Many bills were introduced in Congress aimed, in one way or another,
at relieving the power companies of control and payment. When these
bills reached me I refused to sign them; and the injury to the public
interest which would follow their passage was brought sharply to
public attention in my message of February 26, 1908. The bills made no
further progress.
Under the same principle of stewardship, railroads and other
corporations, which applied for and were given rights in the National
Forests, were regulated in the use of those rights. In short, the
public resources in charge of the Forest Service were handled frankly
and openly for the public welfare under the clear-cut and clearly set
forth principle that the public rights come first and private interest
second.
The natural result of this new attitude was the assertion in every
form by the representatives of special interests that the Forest
Service was exceeding its legal powers and thwarting the intention of
Congress. Suits were begun wherever the chance arose. It is worth
recording that, in spite of the novelty and complexity of the legal
questions it had to face, no court of last resort has ever decided
against the Forest Service. This statement includes two unanimous
decisions by the Supreme Court of the United States (U. S. vs.
Grimaud, 220 U. S., 506, and Light vs. U. S., 220 U. S., 523).
In its administration of the National Forests, the Forest Service
found that valuable coal lands were in danger of passing into private
ownership without adequate money return to the Government and without
safeguard against monopoly; and that existing legislation was
insufficient to prevent this. When this condition was brought to my
attention I withdrew from all forms of entry about sixty-eight million
acres of coal land in the United States, including Alaska. The refusal
of Congress to act in the public interest was solely responsible for
keeping these lands from entry.
The Conservation movement was a direct outgrowth of the forest
movement. It was nothing more than the application to our other
natural resources of the principles which had been worked out in
connection with the forests. Without the basis of public sentiment
which had been built up for the protection of the forests, and without
the example of public foresight in the protection of this, one of the
great natural resources, the Conservation movement would have been
impossible. The first formal step was the creation of the Inland
Waterways Commission, appointed on March 14, 1907. In my letter
appointing the Commission, I called attention to the value of our
streams as great natural resources, and to the need for a progressive
plan for their development and control, and said: "It is not possible
to properly frame so large a plan as this for the control of our
rivers without taking account of the orderly development of other
natural resources. Therefore I ask that the Inland Waterways
Commission shall consider the relations of the streams to the use of
all the great permanent natural resources and their conservation for
the making and maintenance of prosperous homes."
Over a year later, writing on the report of the Commission, I said:
"The preliminary Report of the Inland Waterways Commission was
excellent in every way. It outlines a general plan of waterway
improvement which when adopted will give assurance that the
improvements will yield practical results in the way of increased
navigation and water transportation. In every essential feature
the plan recommended by the Commission is new. In the principle of
coordinating all uses of the waters and treating each waterway
system as a unit; in the principle of correlating water traffic
with rail and other land traffic; in the principle of expert
initiation of projects in accordance with commercial foresight and
the needs of a growing country; and in the principle of
cooperation between the States and the Federal Government in the
administration and use of waterways, etc.; the general plan
proposed by the Commission is new, and at the same time sane and
simple. The plan deserves unqualified support. I regret that it
has not yet been adopted by Congress, but I am confident that
ultimately it will be adopted."
The most striking incident in the history of the Commission was the
trip down the Mississippi River in October, 1907, when, as President
of the United States, I was the chief guest. This excursion, with the
meetings which were held and the wide public attention it attracted,
gave the development of our inland waterways a new standing in public
estimation. During the trip a letter was prepared and presented to me
asking me to summon a conference on the conservation of natural
resources. My intention to call such a conference was publicly
announced at a great meeting at Memphis, Tenn.
In the November following I wrote to each of the Governors of the
several States and to the Presidents of various important National
Societies concerned with natural resources, inviting them to attend
the conference, which took place May 13 to 15, 1908, in the East Room
of the White House. It is doubtful whether, except in time of war, any
new idea of like importance has ever been presented to a Nation and
accepted by it with such effectiveness and rapidity, as was the case
with this Conservation movement when it was introduced to the American
people by the Conference of Governors. The first result was the
unanimous declaration of the Governors of all the States and
Territories upon the subject of Conservation, a document which ought
to be hung in every schoolhouse throughout the land. A further result
was the appointment of thirty-six State Conservation Commissions and,
on June 8, 1908, of the National Conservation Commission. The task of
this Commission was to prepare an inventory, the first ever made for
any nation, of all the natural resources which underlay its property.
The making of this inventory was made possible by an Executive order
which placed the resources of the Government Departments at the
command of the Commission, and made possible the organization of
subsidiary committees by which the actual facts for the inventory were
prepared and digested. Gifford Pinchot was made chairman of the
Commission.
The report of the National Conservation Commission was not only the
first inventory of our resources, but was unique in the history of
Government in the amount and variety of information brought together.
It was completed in six months. It laid squarely before the American
people the essential facts regarding our natural resources, when facts
were greatly needed as the basis for constructive action. This report
was presented to the Joint Conservation Congress in December, at which
there were present Governors of twenty States, representatives of
twenty-two State Conservation Commissions, and representatives of
sixty National organizations previously represented at the White House
conference. The report was unanimously approved, and transmitted to
me, January 11, 1909. On January 22, 1909, I transmitted the report of
the National Conservation Commission to Congress with a Special
Message, in which it was accurately described as "one of the most
fundamentally important documents ever laid before the American
people."
The Joint Conservation Conference of December, 1908, suggested to me
the practicability of holding a North American Conservation
Conference. I selected Gifford Pinchot to convey this invitation in
person to Lord Grey, Governor General of Canada; to Sir Wilfrid
Laurier; and to President Diaz of Mexico; giving as reason for my
action, in the letter in which this invitation was conveyed, the fact
that: "It is evident that natural resources are not limited by the
boundary lines which separate nations, and that the need for
conserving them upon this continent is as wide as the area upon which
they exist."
In response to this invitation, which included the colony of
Newfoundland, the Commissioners assembled in the White House on
February 18, 1909. The American Commissioners were Gifford Pinchot,
Robert Bacon, and James R. Garfield. After a session continuing
through five days, the Conference united in a declaration of
principles, and suggested to the President of the United States "that
all nations should be invited to join together in conference on the
subject of world resources, and their inventory, conservation, and
wise utilization." Accordingly, on February 19, 1909, Robert Bacon,
Secretary of State, addressed to forty-five nations a letter of
invitation "to send delegates to a conference to be held at The Hague
at such date to be found convenient, there to meet and consult the
like delegates of the other countries, with a view of considering a
general plan for an inventory of the natural resources of the world
and to devising a uniform scheme for the expression of the results of
such inventory, to the end that there may be a general understanding
and appreciation of the world's supply of the material elements which
underlie the development of civilization and the welfare of the
peoples of the earth." After I left the White House the project
lapsed.
Throughout the early part of my Administration the public land policy
was chiefly directed to the defense of the public lands against fraud
and theft. Secretary Hitchcock's efforts along this line resulted in
the Oregon land fraud cases, which led to the conviction of Senator
Mitchell, and which made Francis J. Heney known to the American people
as one of their best and most effective servants. These land fraud
prosecutions under Mr. Heney, together with the study of the public
lands which preceded the passage of the Reclamation Act in 1902, and
the investigation of land titles in the National Forests by the Forest
Service, all combined to create a clearer understanding of the need of
land law reform, and thus led to the appointment of the Public Lands
Commission. This Commission, appointed by me on October 22, 1903, was
directed to report to the President: "Upon the condition, operation,
and effect of the present land laws, and to recommend such changes as
are needed to effect the largest practicable disposition of the public
lands to actual settlers who will build permanent homes upon them, and
to secure in permanence the fullest and most effective use of the
resources of the public lands." It proceeded without loss of time to
make a personal study on the ground of public land problems throughout
the West, to confer with the Governors and other public men most
concerned, and to assemble the information concerning the public
lands, the laws and decisions which governed them, and the methods of
defeating or evading those laws, which was already in existence, but
which remained unformulated in the records of the General Land Office
and in the mind of its employees. The Public Lands Commission made its
first preliminary report on March 7, 1904. It found "that the present
land laws do not fit the conditions of the remaining public lands,"
and recommended specific changes to meet the public needs. A year
later the second report of the Commission recommended still further
changes, and said "The fundamental fact that characterizes the
situation under the present land laws is this, that the number of
patents issued is increasing out of all proportion to the number of
new homes." This report laid the foundation of the movement for
Government control of the open range, and included by far the most
complete statement ever made of the disposition of the public domain.
Among the most difficult topics considered by the Public Lands
Commission was that of the mineral land laws. This subject was
referred by the Commission to the American Institute of Mining
Engineers, which reported upon it through a Committee. This Committee
made the very important recommendation, among others, "that the
Government of the United States should retain title to all minerals,
including coal and oil, in the lands of unceded territory, and lease
the same to individuals or corporations at a fixed rental." The
necessity for this action has since come to be very generally
recognized. Another recommendation, since partly carried into effect,
was for the separation of the surface and the minerals in lands
containing coal and oil.
Our land laws have of recent years proved inefficient; yet the land
laws themselves have not been so much to blame as the lax,
unintelligent, and often corrupt administration of these laws. The
appointment on March 4, 1907, of James R. Garfield as Secretary of the
Interior led to a new era in the interpretation and enforcement of the
laws governing the public lands. His administration of the Interior
Department was beyond comparison the best we have ever had. It was
based primarily on the conception that it is as much the duty of
public land officials to help the honest settler get title to his
claim as it is to prevent the looting of the public lands. The
essential fact about public land frauds is not merely that public
property is stolen, but that every claim fraudulently acquired stands
in the way of the making of a home or a livelihood by an honest man.
As the study of the public land laws proceeded and their
administration improved, a public land policy was formulated in which
the saving of the resources on the public domain for public use became
the leading principle. There followed the withdrawal of coal lands as
already described, of oil lands and phosphate lands, and finally, just
at the end of the Administration, of water-power sites on the public
domain. These withdrawals were made by the Executive in order to
afford to Congress the necessary opportunity to pass wise laws dealing
with their use and disposal; and the great crooked special interests
fought them with incredible bitterness.
Among the men of this Nation interested in the vital problems
affecting the welfare of the ordinary hard-working men and women of
the Nation, there is none whose interest has been more intense, and
more wholly free from taint of thought of self, than that of Thomas
Watson, of Georgia. While President I often discussed with him the
condition of women on the small farms, and on the frontier, the
hardship of their lives as compared with those of the men, and the
need for taking their welfare into consideration in whatever was done
for the improvement of life on the land. I also went over the matter
with C. S. Barrett, of Georgia, a leader in the Southern farmers'
movement, and with other men, such as Henry Wallace, Dean L. H.
Bailey, of Cornell, and Kenyon Butterfield. One man from whose advice
I especially profited was not an American, but an Irishman, Sir Horace
Plunkett. In various conversations he described to me and my close
associates the reconstruction of farm life which had been accomplished
by the Agricultural Organization Society of Ireland, of which he was
the founder and the controlling force; and he discussed the
application of similar methods to the improvements of farm life in the
United States. In the spring of 1908, at my request, Plunkett
conferred on the subject with Garfield and Pinchot, and the latter
suggested to him the appointment of a Commission on Country Life as a
means for directing the attention of the Nation to the problems of the
farm, and for securing the necessary knowledge of the actual
conditions of life in the open country. After long discussion a plan
for a Country Life Commission was laid before me and approved. The
appointment of the Commission followed in August, 1908. In the letter
of appointment the reasons for creating the Commission were set forth
as follows: "I doubt if any other nation can bear comparison with our
own in the amount of attention given by the Government, both Federal
and State, to agricultural matters. But practically the whole of this
effort has hitherto been directed toward increasing the production of
crops. Our attention has been concentrated almost exclusively on
getting better farming. In the beginning this was unquestionably the
right thing to do. The farmer must first of all grow good crops in
order to support himself and his family. But when this has been
secured, the effort for better farming should cease to stand alone,
and should be accompanied by the effort for better business and better
living on the farm. It is at least as important that the farmer should
get the largest possible return in money, comfort, and social
advantages from the crops he grows, as that he should get the largest
possible return in crops from the land he farms. Agriculture is not
the whole of country life. The great rural interests are human
interests, and good crops are of little value to the farmer unless
they open the door to a good kind of life on the farm."
The Commission on Country Life did work of capital importance. By
means of a widely circulated set of questions the Commission informed
itself upon the status of country life throughout the Nation. Its trip
through the East, South, and West brought it into contact with large
numbers of practical farmers and their wives, secured for the
Commissioners a most valuable body of first-hand information, and laid
the foundation for the remarkable awakening of interest in country
life which has since taken place throughout the Nation.
One of the most illuminating--and incidentally one of the most
interesting and amusing--series of answers sent to the Commission was
from a farmer in Missouri. He stated that he had a wife and 11 living
children, he and his wife being each 52 years old; and that they owned
520 acres of land without any mortgage hanging over their heads. He
had himself done well, and his views as to why many of his neighbors
had done less well are entitled to consideration. These views are
expressed in terse and vigorous English; they cannot always be quoted
in full. He states that the farm homes in his neighborhood are not as
good as they should be because too many of them are encumbered by
mortgages; that the schools do not train boys and girls satisfactorily
for life on the farm, because they allow them to get an idea in their
heads that city life is better, and that to remedy this practical
farming should be taught. To the question whether the farmers and
their wives in his neighborhood are satisfactorily organized, he
answers: "Oh, there is a little one-horse grange gang in our locality,
and every darned one thinks they ought to be a king." To the question,
"Are the renters of farms in your neighborhood making a satisfactory
living?" he answers: "No; because they move about so much hunting a
better job." To the question, "Is the supply of farm labor in your
neighborhood satisfactory?" the answer is: "No; because the people
have gone out of the baby business"; and when asked as to the remedy,
he answers, "Give a pension to every mother who gives birth to seven
living boys on American soil." To the question, "Are the conditions
surrounding hired labor on the farm in your neighborhood satisfactory
to the hired men?" he answers: "Yes, unless he is a drunken cuss,"
adding that he would like to blow up the stillhouses and root out
whiskey and beer. To the question, "Are the sanitary conditions on the
farms in your neighborhood satisfactory?" he answers: "No; too
careless about chicken yards, and the like, and poorly covered wells.
In one well on neighbor's farm I counted seven snakes in the wall of
the well, and they used the water daily: his wife dead now and he is
looking for another." He ends by stating that the most important
single thing to be done for the betterment of country life is "good
roads"; but in his answers he shows very clearly that most important
of all is the individual equation of the man or woman.
Like the rest of the Commissions described in this chapter, the
Country Life Commission cost the Government not one cent, but laid
before the President and the country a mass of information so accurate
and so vitally important as to disturb the serenity of the advocates
of things as they are; and therefore it incurred the bitter opposition
of the reactionaries. The report of the Country Life Commission was
transmitted to Congress by me on February 9, 1909. In the accompanying
message I asked for $25,000 to print and circulate the report and to
prepare for publication the immense amount of valuable material
collected by the Commission but still unpublished. The reply made by
Congress was not only a refusal to appropriate the money, but a
positive prohibition against continuing the work. The Tawney amendment
to the Sundry Civil bill forbade the President to appoint any further
Commissions unless specifically authorized by Congress to do so. Had
this prohibition been enacted earlier /and complied with/, it would
have prevented the appointment of the six Roosevelt commissions. But I
would not have complied with it. Mr. Tawney, one of the most efficient
representatives of the cause of special privilege as against public
interest to be found in the House, was later, in conjunction with
Senator Hale and others, able to induce my successor to accept their
view. As what was almost my last official act, I replied to Congress
that if I did not believe the Tawney amendment to be unconstitutional
I would veto the Sundry Civil bill which contained it, and that if I
were remaining in office I would refuse to obey it. The memorandum ran
in part:
"The chief object of this provision, however, is to prevent the
Executive repeating what it has done within the last year in
connection with the Conservation Commission and the Country Life
Commission. It is for the people of the country to decide whether
or not they believe in the work done by the Conservation
Commission and by the Country Life Commission. . . .
"If they believe in improving our waterways, in preventing the
waste of soil, in preserving the forests, in thrifty use of the
mineral resources of the country for the nation as a whole rather
than merely for private monopolies, in working for the betterment
of the condition of the men and women who live on the farms, then
they will unstintedly condemn the action of every man who is in
any way responsible for inserting this provision, and will support
those members of the legislative branch who opposed its adoption.
I would not sign the bill at all if I thought the provision
entirely effective. But the Congress cannot prevent the President
from seeking advice. Any future President can do as I have done,
and ask disinterested men who desire to serve the people to give
this service free to the people through these commissions. . . .
"My successor, the President-elect, in a letter to the Senate
Committee on Appropriations, asked for the continuance and support
of the Conservation Commission. The Conservation Commission was
appointed at the request of the Governors of over forty States,
and almost all of these States have since appointed commissions to
cooperate with the National Commission. Nearly all the great
national organizations concerned with natural resources have been
heartily cooperating with the commission.
"With all these facts before it, the Congress has refused to pass a
law to continue and provide for the commission; and it now passes
a law with the purpose of preventing the Executive from continuing
the commission at all. The Executive, therefore, must now either
abandon the work and reject the cooperation of the States, or else
must continue the work personally and through executive officers
whom he may select for that purpose."
The Chamber of Commerce of Spokane, Washington, a singularly energetic
and far-seeing organization, itself published the report which
Congress had thus discreditably refused to publish.
The work of the Bureau of Corporations, under Herbert Knox Smith,
formed an important part of the Conservation movement almost from the
beginning. Mr. Smith was a member of the Inland Waterways Commission
and of the National Conservation Commission and his Bureau prepared
material of importance for the reports of both. The investigation of
standing timber in the United States by the Bureau of Corporations
furnished for the first time a positive knowledge of the facts. Over
nine hundred counties in timbered regions were covered by the Bureau,
and the work took five years. The most important facts ascertained
were that forty years ago three-fourths of the standing timber in the
United States was publicly owned, while at the date of the report
four-fifths of the timber in the country was in private hands. The
concentration of private ownership had developed to such an amazing
extent that about two hundred holders owned nearly one-half of all
privately owned timber in the United States; and of this the three
greatest holders, the Southern Pacific Railway, the Northern Pacific
Railway, and the Weyerhaeuser Timber Company, held over ten per cent.
Of this work, Mr. Smith says:
"It was important, indeed, to know the facts so that we could take
proper action toward saving the timber still left to the public.
But of far more importance was the light that this history (and
the history of our other resources) throws on the basic attitude,
tradition and governmental beliefs of the American people. The
whole standpoint of the people toward the proper aim of
government, toward the relation of property to the citizen, and
the relation of property to the government, were brought out first
by this Conservation work."
The work of the Bureau of Corporations as to water power was equally
striking. In addition to bringing the concentration of water-power
control first prominently to public attention, through material
furnished for my message in my veto of the James River Dam Bill, the
work of the Bureau showed that ten great interests and their allies
held nearly sixty per cent of the developed water power of the United
States. Says Commissioner Smith: "Perhaps the most important thing in
the whole work was its clear demonstration of the fact that the only
effective place to control water power in the public interest is at the
power sites; that as to powers now owned by the public it is absolutely
essential that the public shall retain title. . . . The only way in
which the public can get back to itself the margin of natural advantage
in the water-power site is to rent that site at a rental which, added
to the cost of power production there, will make the total cost of
water power about the same as fuel power, and then let the two sell at
the same price, i. e., the price of fuel power."
Of the fight of the water-power men for States Rights at the St. Paul
Conservation Congress in September, 1909, Commissioner Smith says:
"It was the first open sign of the shift of the special interests
to the Democratic party for a logical political reason, namely,
because of the availability of the States Rights idea for the
purposes of the large corporations. It marked openly the turn of
the tide."
Mr. Smith brought to the attention of the Inland Waterways Commission
the overshadowing importance to waterways of their relation with
railroad lines, the fact that the bulk of the traffic is long distance
traffic, that it cannot pass over the whole distance by water, while
it can go anywhere by rail, and that therefore the power of the rail
lines to pro-rate or not to pro-rate, with water lines really
determines the practical value of a river channel. The controlling
value of terminals and the fact that out of fifty of our leading
ports, over half the active water frontage in twenty-one ports was
controlled by the railroads, was also brought to the Commission's
attention, and reports of great value were prepared both for the
Inland Waterways Commission and for the National Conservation
Commission. In addition to developing the basic facts about the
available timber supply, about waterways, water power, and iron ore,
Mr. Smith helped to develop and drive into the public conscience the
idea that the people ought to retain title to our natural resources
and handle them by the leasing system.
The things accomplished that have been enumerated above were of
immediate consequence to the economic well-being of our people. In
addition certain things were done of which the economic bearing was
more remote, but which bore directly upon our welfare, because they
add to the beauty of living and therefore to the joy of life. Securing
a great artist, Saint-Gaudens, to give us the most beautiful coinage
since the decay of Hellenistic Greece was one such act. In this case I
had power myself to direct the Mint to employ Saint-Gaudens. The
first, and most beautiful, of his coins were issued in thousands
before Congress assembled or could intervene; and a great and
permanent improvement was made in the beauty of the coinage. In the
same way, on the advice and suggestion of Frank Millet, we got some
really capital medals by sculptors of the first rank. Similarly, the
new buildings in Washington were erected and placed in proper relation
to one another, on plans provided by the best architects and landscape
architects. I also appointed a Fine Arts Council, an unpaid body of
the best architects, painters, and sculptors in the country, to advise
the Government as to the erection and decoration of all new buildings.
The "pork-barrel" Senators and Congressmen felt for this body an
instinctive, and perhaps from their standpoint a natural, hostility;
and my successor a couple of months after taking office revoked the
appointment and disbanded the Council.
Even more important was the taking of steps to preserve from
destruction beautiful and wonderful wild creatures whose existence was
threatened by greed and wantonness. During the seven and a half years
closing on March 4, 1909, more was accomplished for the protection of
wild life in the United States than during all the previous years,
excepting only the creation of the Yellowstone National Park. The
record includes the creation of five National Parks--Crater Lake,
Oregon; Wind Cave, South Dakota; Platt, Oklahoma; Sully Hill, North
Dakota, and Mesa Verde, Colorado; four big game refuges in Oklahoma,
Arizona, Montana, and Washington; fifty-one bird reservations; and the
enactment of laws for the protection of wild life in Alaska, the
District of Columbia, and on National bird reserves. These measures
may be briefly enumerated as follows:
The enactment of the first game laws for the Territory of Alaska in
1902 and 1908, resulting in the regulation of the export of heads and
trophies of big game and putting an end to the slaughter of deer for
hides along the southern coast of the Territory.
The securing in 1902 of the first appropriation for the preservation
of buffalo and the establishment in the Yellowstone National Park of
the first and now the largest herd of buffalo belonging to the
Government.
The passage of the Act of January 24, 1905, creating the Wichita Game
Preserves, the first of the National game preserves. In 1907, 12,000
acres of this preserve were inclosed with a woven wire fence for the
reception of the herd of fifteen buffalo donated by the New York
Zoological Society.
The passage of the Act of June 29, 1906, providing for the
establishment of the Grand Canyon Game Preserve of Arizona, now
comprising 1,492,928 acres.
The passage of the National Monuments Act of June 8, 1906, under which
a number of objects of scientific interest have been preserved for all
time. Among the Monuments created are Muir Woods, Pinnacles National
Monument in California, and the Mount Olympus National Monument,
Washington, which form important refuges for game.
The passage of the Act of June 30, 1906, regulating shooting in the
District of Columbia and making three-fourths of the environs of the
National Capital within the District in effect a National Refuge.
The passage of the Act of May 23, 1908, providing for the
establishment of the National Bison Range in Montana. This range
comprises about 18,000 acres of land formerly in the Flathead Indian
Reservation, on which is now established a herd of eighty buffalo, a
nucleus of which was donated to the Government by the American Bison
Society.
The issue of the Order protecting birds on the Niobrara Military
Reservation, Nebraska, in 1908, making this entire reservation in
effect a bird reservation.
The establishment by Executive Order between March 14, 1903, and March
4, 1909, of fifty-one National Bird Reservations distributed in
seventeen States and Territories from Porto Rico to Hawaii and Alaska.
The creation of these reservations at once placed the United States in
the front rank in the world work of bird protection. Among these
reservations are the celebrated Pelican Island rookery in Indian
River, Florida; the Mosquito Inlet Reservation, Florida, the
northernmost home of the manatee; the extensive marshes bordering
Klamath and Malhuer Lakes in Oregon, formerly the scene of slaughter
of ducks for market and ruthless destruction of plume birds for the
millinery trade; the Tortugas Key, Florida, where, in connection with
the Carnegie Institute, experiments have been made on the homing
instinct of birds; and the great bird colonies on Laysan and sister
islets in Hawaii, some of the greatest colonies of sea birds in the
world.
CHAPTER XII
THE BIG STICK AND THE SQUARE DEAL
One of the vital questions with which as President I had to deal was
the attitude of the Nation toward the great corporations. Men who
understand and practice the deep underlying philosophy of the Lincoln
school of American political thought are necessarily Hamiltonian in
their belief in a strong and efficient National Government and
Jeffersonian in their belief in the people as the ultimate authority,
and in the welfare of the people as the end of Government. The men who
first applied the extreme Democratic theory in American life were,
like Jefferson, ultra individualists, for at that time what was
demanded by our people was the largest liberty for the individual.
During the century that had elapsed since Jefferson became President
the need had been exactly reversed. There had been in our country a
riot of individualistic materialism, under which complete freedom for
the individual--that ancient license which President Wilson a century
after the term was excusable has called the "New" Freedom--turned out
in practice to mean perfect freedom for the strong to wrong the weak.
The total absence of governmental control had led to a portentous
growth in the financial and industrial world both of natural
individuals and of artificial individuals--that is, corporations. In
no other country in the world had such enormous fortunes been gained.
In no other country in the world was such power held by the men who
had gained these fortunes; and these men almost always worked through,
and by means of, the giant corporations which they controlled. The
power of the mighty industrial overlords of the country had increased
with giant strides, while the methods of controlling them, or checking
abuses by them, on the part of the people, through the Government,
remained archaic and therefore practically impotent. The courts, not
unnaturally, but most regrettably, and to the grave detriment of the
people and of their own standing, had for a quarter of a century been
on the whole the agents of reaction, and by conflicting decisions
which, however, in their sum were hostile to the interests of the
people, had left both the nation and the several States well-nigh
impotent to deal with the great business combinations. Sometimes they
forbade the Nation to interfere, because such interference trespassed
on the rights of the States; sometimes they forbade the States to
interfere (and often they were wise in this), because to do so would
trespass on the rights of the Nation; but always, or well-nigh always,
their action was negative action against the interests of the people,
ingeniously devised to limit their power against wrong, instead of
affirmative action giving to the people power to right wrong. They had
rendered these decisions sometimes as upholders of property rights
against human rights, being especially zealous in securing the rights
of the very men who were most competent to take care of themselves;
and sometimes in the name of liberty, in the name of the so-called
"new freedom," in reality the old, old "freedom," which secured to the
powerful the freedom to prey on the poor and the helpless.
One of the main troubles was the fact that the men who saw the evils
and who tried to remedy them attempted to work in two wholly different
ways, and the great majority of them in a way that offered little
promise of real betterment. They tried (by the Sherman law method) to
bolster up an individualism already proved to be both futile and
mischievous; to remedy by more individualism the concentration that
was the inevitable result of the already existing individualism. They
saw the evil done by the big combinations, and sought to remedy it by
destroying them and restoring the country to the economic conditions
of the middle of the nineteenth century. This was a hopeless effort,
and those who went into it, although they regarded themselves as
radical progressives, really represented a form of sincere rural
toryism. They confounded monopolies with big business combinations,
and in the effort to prohibit both alike, instead of where possible
prohibiting one and drastically controlling the other, they succeeded
merely in preventing any effective control of either.
On the other hand, a few men recognized that corporations and
combinations had become indispensable in the business world, that it
was folly to try to prohibit them, but that it was also folly to leave
them without thoroughgoing control. These men realized that the
doctrines of the old laissez faire economists, of the believers in
unlimited competition, unlimited individualism, were in the actual
state of affairs false and mischievous. They realized that the
Government must now interfere to protect labor, to subordinate the big
corporation to the public welfare, and to shackle cunning and fraud
exactly as centuries before it had interfered to shackle the physical
force which does wrong by violence.
The big reactionaries of the business world and their allies and
instruments among politicians and newspaper editors took advantage of
this division of opinion, and especially of the fact that most of
their opponents were on the wrong path; and fought to keep matters
absolutely unchanged. These men demanded for themselves an immunity
from governmental control which, if granted, would have been as wicked
and as foolish as immunity to the barons of the twelfth century. Many
of them were evil men. Many others were just as good men as were some
of these same barons; but they were as utterly unable as any medieval
castle-owner to understand what the public interest really was. There
have been aristocracies which have played a great and beneficent part
at stages in the growth of mankind; but we had come to the stage where
for our people what was needed was a real democracy; and of all forms
of tyranny the least attractive and the most vulgar is the tyranny of
mere wealth, the tyranny of a plutocracy.
When I became President, the question as to the method by which the
United States Government was to control the corporations was not yet
important. The absolutely vital question was whether the Government
had power to control them at all. This question had not yet been
decided in favor of the United States Government. It was useless to
discuss methods of controlling big business by the National Government
until it was definitely settled that the National Government had the
power to control it. A decision of the Supreme Court had, with seeming
definiteness, settled that the National Government had not the power.
This decision I caused to be annulled by the court that had rendered
it; and the present power of the National Government to deal
effectively with the trusts is due solely to the success of the
Administration in securing this reversal of its former decision by the
Supreme Court.
The Constitution was formed very largely because it had become
imperative to give to some central authority the power to regulate and
control interstate commerce. At that time when corporations were in
their infancy and big combinations unknown, there was no difficulty in
exercising the power granted. In theory, the right of the Nation to
exercise this power continued unquestioned. But changing conditions
obscured the matter in the sight of the people as a whole; and the
conscious and the unconscious advocates of an unlimited and
uncontrollable capitalism gradually secured the whittling away of the
National power to exercise this theoretical right of control until it
practically vanished. After the Civil War, with the portentous growth
of industrial combinations in this country, came a period of
reactionary decisions by the courts which, as regards corporations,
culminated in what is known as the Knight case.
The Sherman Anti-Trust Law was enacted in 1890 because the formation
of the Tobacco Trust and the Sugar Trust, the only two great trusts
then in the country (aside from the Standard Oil Trust, which was a
gradual growth), had awakened a popular demand for legislation to
destroy monopoly and curb industrial combinations. This demand the
Anti-Trust Law was intended to satisfy. The Administrations of Mr.
Harrison and Mr. Cleveland evidently construed this law as prohibiting
such combinations in the future, not as condemning those which had
been formed prior to its enactment. In 1895, however, the Sugar Trust,
whose output originally was about fifty-five per cent of all sugar
produced in the United States, obtained control of three other
companies in Philadelphia by exchanging its stock for theirs, and thus
increased its business until it controlled ninety-eight per cent of
the entire product. Under Cleveland, the Government brought
proceedings against the Sugar Trust, invoking the Anti-Trust Law, to
set aside the acquisition of these corporations. The test case was on
the absorption of the Knight Company. The Supreme Court of the United
States, with but one dissenting vote, held adversely to the
Government. They took the ground that the power conferred by the
Constitution to regulate and control interstate commerce did not
extend to the production or manufacture of commodities within a State,
and that nothing in the Sherman Anti-Trust Law prohibited a
corporation from acquiring all the stock of other corporations through
exchange of its stock for theirs, such exchange not being "commerce"
in the opinion of the Court, even though by such acquisition the
corporation was enabled to control the entire production of a
commodity that was a necessary of life. The effect of this decision
was not merely the absolute nullification of the Anti-Trust Law, so
far as industrial corporations were concerned, but was also in effect
a declaration that, under the Constitution, the National Government
could pass no law really effective for the destruction or control of
such combinations.
This decision left the National Government, that is, the people of the
Nation, practically helpless to deal with the large combinations of
modern business. The courts in other cases asserted the power of the
Federal Government to enforce the Anti-Trust Law so far as
transportation rates by railways engaged in interstate commerce were
concerned. But so long as the trusts were free to control the
production of commodities without interference from the General
Government, they were well content to let the transportation of
commodities take care of itself--especially as the law against rebates
was at that time a dead letter; and the Court by its decision in the
Knight case had interdicted any interference by the President or by
Congress with the production of commodities. It was on the authority
of this case that practically all the big trusts in the United States,
excepting those already mentioned, were formed. Usually they were
organized as "holding" companies, each one acquiring control of its
constituent corporations by exchanging its stock for theirs, an
operation which the Supreme Court had thus decided could not be
prohibited, controlled, regulated, or even questioned by the Federal
Government.
Such was the condition of our laws when I acceded to the Presidency.
Just before my accession, a small group of financiers, desiring to
profit by the governmental impotence to which we had been reduced by
the Knight decision, had arranged to take control of practically the
entire railway system in the Northwest--possibly as the first step
toward controlling the entire railway system of the country. This
control of the Northwestern railway systems was to be effected by
organizing a new "holding" company, and exchanging its stock against
the stock of the various corporations engaged in railway
transportation throughout that vast territory, exactly as the Sugar
Trust had acquired control of the Knight company and other concerns.
This company was called the Northern Securities Company. Not long
after I became President, on the advice of the Attorney-General, Mr.
Knox, and through him, I ordered proceedings to be instituted for the
dissolution of the company. As far as could be told by their
utterances at the time, among all the great lawyers in the United
States Mr. Knox was the only one who believed that this action could
be sustained. The defense was based expressly on the ground that the
Supreme Court in the Knight case had explicitly sanctioned the
formation of such a company as the Northern Securities Company. The
representatives of privilege intimated, and sometimes asserted
outright, that in directing the action to be brought I had shown a
lack of respect for the Supreme Court, which had already decided the
question at issue by a vote of eight to one. Mr. Justice White, then
on the Court and now Chief Justice, set forth the position that the
two cases were in principle identical with incontrovertible logic. In
giving the views of the dissenting minority on the action I had
brought, he said:
"The parallel between the two cases [the Knight case and the
Northern Securities case] is complete. The one corporation
acquired the stock of other and competing corporations in exchange
for its own. It was conceded for the purposes of the case, that in
doing so monopoly had been brought about in the refining of sugar,
that the sugar to be produced was likely to become the subject of
interstate commerce, and indeed that part of it would certainly
become so. But the power of Congress was decided not to extend to
the subject, because the ownership of the stock in the
corporations was not itself commerce."
Mr. Justice White was entirely correct in this statement. The cases
were parallel. It was necessary to reverse the Knight case in the
interests of the people against monopoly and privilege just as it had
been necessary to reverse the Dred Scott case in the interest of the
people against slavery and privilege; just as later it became
necessary to reverse the New York Bakeshop case in the interest of the
people against that form of monopolistic privilege which put human
rights below property rights where wage workers were concerned.
By a vote of five to four the Supreme Court reversed its decision in
the Knight case, and in the Northern Securities case sustained the
Government. The power to deal with industrial monopoly and suppress it
and to control and regulate combinations, of which the Knight case had
deprived the Federal Government, was thus restored to it by the
Northern Securities case. After this later decision was rendered,
suits were brought by my direction against the American Tobacco
Company and the Standard Oil Company. Both were adjudged criminal
conspiracies, and their dissolution ordered. The Knight case was
finally overthrown. The vicious doctrine it embodied no longer remains
as an obstacle to obstruct the pathway of justice when it assails
monopoly. Messrs. Knox, Moody, and Bonaparte, who successively
occupied the position of Attorney-General under me, were profound
lawyers and fearless and able men; and they completely established the
newer and more wholesome doctrine under which the Federal Government
may now deal with monopolistic combinations and conspiracies.
The decisions rendered in these various cases brought under my
direction constitute the entire authority upon which any action must
rest that seeks through the exercise of national power to curb
monopolistic control. The men who organized and directed the Northern
Securities Company were also the controlling forces in the Steel
Corporation, which has since been prosecuted under the act. The
proceedings against the Sugar Trust for corruption in connection with
the New York Custom House are sufficiently interesting to be
considered separately.
From the standpoint of giving complete control to the National
Government over big corporations engaged in inter-State business, it
would be impossible to over-estimate the importance of the Northern
Securities decision and of the decisions afterwards rendered in line
with it in connection with the other trusts whose dissolution was
ordered. The success of the Northern Securities case definitely
established the power of the Government to deal with all great
corporations. Without this success the National Government must have
remained in the impotence to which it had been reduced by the Knight
decision as regards the most important of its internal functions. But
our success in establishing the power of the National Government to
curb monopolies did not establish the right method of exercising that
power. We had gained the power. We had not devised the proper method
of exercising it.
Monopolies can, although in rather cumbrous fashion, be broken up by
law suits. Great business combinations, however, cannot possibly be
made useful instead of noxious industrial agencies merely by law
suits, and especially by law suits supposed to be carried on for their
destruction and not for their control and regulation. I at once began
to urge upon Congress the need of laws supplementing the Anti-Trust
Law--for this law struck at all big business, good and bad, alike, and
as the event proved was very inefficient in checking bad big business,
and yet was a constant threat against decent business men. I strongly
urged the inauguration of a system of thoroughgoing and drastic
Governmental regulation and control over all big business combinations
engaged in inter-State industry.
Here I was able to accomplish only a small part of what I desired to
accomplish. I was opposed both by the foolish radicals who desired to
break up all big business, with the impossible ideal of returning to
mid-nineteenth century industrial conditions; and also by the great
privileged interests themselves, who used these ordinarily--but
sometimes not entirely--well-meaning "stool pigeon progressives" to
further their own cause. The worst representatives of big business
encouraged the outcry for the total abolition of big business, because
they knew that they could not be hurt in this way, and that such an
outcry distracted the attention of the public from the really
efficient method of controlling and supervising them, in just but
masterly fashion, which was advocated by the sane representatives of
reform. However, we succeeded in making a good beginning by securing
the passage of a law creating the Department of Commerce and Labor,
and with it the erection of the Bureau of Corporations. The first head
of the Department of Commerce and Labor was Mr. Cortelyou, later
Secretary of the Treasury. He was succeeded by Mr. Oscar Straus. The
first head of the Bureau of Corporations was Mr. Garfield, who was
succeeded by Mr. Herbert Knox Smith. No four better public servants
from the standpoint of the people as a whole could have been found.
The Standard Oil Company took the lead in opposing all this
legislation. This was natural, for it had been the worst offender in
the amassing of enormous fortunes by improper methods of all kinds, at
the expense of business rivals and of the public, including the
corruption of public servants. If any man thinks this condemnation
extreme, I refer him to the language officially used by the Supreme
Court of the nation in its decision against the Standard Oil Company.
Through their counsel, and by direct telegrams and letters to Senators
and Congressmen from various heads of the Standard Oil organization,
they did their best to kill the bill providing for the Bureau of
Corporations. I got hold of one or two of these telegrams and letters,
however, and promptly published them; and, as generally happens in
such a case, the men who were all-powerful as long as they could work
in secret and behind closed doors became powerless as soon as they
were forced into the open. The bill went through without further
difficulty.
The true way of dealing with monopoly is to prevent it by
administrative action before it grows so powerful that even when
courts condemn it they shrink from destroying it. The Supreme Court in
the Tobacco and Standard Oil cases, for instance, used very vigorous
language in condemning these trusts; but the net result of the
decision was of positive advantage to the wrongdoers, and this has
tended to bring the whole body of our law into disrepute in quarters
where it is of the very highest importance that the law be held in
respect and even in reverence. My effort was to secure the creation of
a Federal Commission which should neither excuse nor tolerate
monopoly, but prevent it when possible and uproot it when discovered;
and which should in addition effectively control and regulate all big
combinations, and should give honest business certainty as to what the
law was and security as long as the law was obeyed. Such a Commission
would furnish a steady expert control, a control adapted to the
problem; and dissolution is neither control nor regulation, but is
purely negative; and negative remedies are of little permanent avail.
Such a Commission would have complete power to examine into every big
corporation engaged or proposing to engage in business between the
States. It would have the power to discriminate sharply between
corporations that are doing well and those that are doing ill; and the
distinction between those who do well and those who do ill would be
defined in terms so clear and unmistakable that no one could
misapprehend them. Where a company is found seeking its profits
through serving the community by stimulating production, lowering
prices, or improving service, while scrupulously respecting the rights
of others (including its rivals, its employees, its customers, and the
general public), and strictly obeying the law, then no matter how
large its capital, or how great the volume of its business it would be
encouraged to still more abundant production, or better service, by
the fullest protection that the Government could afford it. On the
other hand, if a corporation were found seeking profit through injury
or oppression of the community, by restricting production through
trick or device, by plot or conspiracy against competitors, or by
oppression of wage-workers, and then extorting high prices for the
commodity it had made artificially scarce, it would be prevented from
organizing if its nefarious purpose could be discovered in time, or
pursued and suppressed by all the power of Government whenever found
in actual operation. Such a commission, with the power I advocate,
would put a stop to abuses of big corporations and small corporations
alike; it would draw the line on conduct and not on size; it would
destroy monopoly, and make the biggest business man in the country
conform squarely to the principles laid down by the American people,
while at the same time giving fair play to the little man and
certainty of knowledge as to what was wrong and what was right both to
big man and little man.
Although under the decision of the courts the National Government had
power over the railways, I found, when I became President, that this
power was either not exercised at all or exercised with utter
inefficiency. The law against rebates was a dead letter. All the
unscrupulous railway men had been allowed to violate it with impunity;
and because of this, as was inevitable, the scrupulous and decent
railway men had been forced to violate it themselves, under penalty of
being beaten by their less scrupulous rivals. It was not the fault of
these decent railway men. It was the fault of the Government.
Thanks to a first-class railway man, Paul Morton of the Santa Fe, son
of Mr. Cleveland's Secretary of Agriculture, I was able completely to
stop the practice. Mr. Morton volunteered to aid the Government in
abolishing rebates. He frankly stated that he, like every one else,
had been guilty in the matter; but he insisted that he uttered the
sentiments of the decent railway men of the country when he said that
he hoped the practice would be stopped, and that if I would really
stop it, and not merely make believe to stop it, he would give the
testimony which would put into the hands of the Government the power
to put a complete check to the practice. Accordingly he testified, and
on the information which he gave us we were able to take such action
through the Inter-State Commerce Commission and the Department of
Justice, supplemented by the necessary additional legislation, that
the evil was absolutely eradicated. He thus rendered, of his own
accord, at his own personal risk, and from purely disinterested
motives, an invaluable service to the people, a service which no other
man who was able to render was willing to render. As an immediate
sequel, the world-old alliance between Blifil and Black George was
immediately revived against Paul Morton. In giving rebates he had done
only what every honest railway man in the country had been obliged to
do because of the failure of the Government to enforce the prohibition
as regards dishonest railway men. But unlike his fellows he had then
shown the courage and sense of obligation to the public which made him
come forward and without evasion or concealment state what he had
done, in order that we might successfully put an end to the practice;
and put an end to the practice we did, and we did it because of the
courage and patriotism he had shown. The unscrupulous railway men,
whose dishonest practices were thereby put a stop to, and the
unscrupulous demagogues who were either under the influence of these
men or desirous of gaining credit with thoughtless and ignorant people
no matter who was hurt, joined in vindictive clamor against Mr.
Morton. They actually wished me to prosecute him, although such
prosecution would have been a piece of unpardonable ingratitude and
treachery on the part of the public toward him--for I was merely
acting as the steward of the public in this matter. I need hardly say
that I stood by him; and later he served under me as Secretary of the
Navy, and a capital Secretary he made too.
We not only secured the stopping of rebates, but in the Hepburn Rate
Bill we were able to put through a measure which gave the Inter-State
Commerce Commission for the first time real control over the railways.
There were two or three amusing features in the contest over this
bill. All of the great business interests which objected to
Governmental control banded to fight it, and they were helped by the
honest men of ultra-conservative type who always dread change, whether
good or bad. We finally forced it through the House. In the Senate it
was referred to a committee in which the Republican majority was under
the control of Senator Aldrich, who took the lead in opposing the
bill. There was one Republican on the committee, however, whom Senator
Aldrich could not control--Senator Dolliver, of Iowa. The leading
Democrat on the committee was Senator Tillman, of South Carolina, with
whom I was not on good terms, because I had been obliged to cancel an
invitation to him to dine at the White House on account of his having
made a personal assault in the Senate Chamber on his colleague from
South Carolina; and later I had to take action against him on account
of his conduct in connection with certain land matters. Senator
Tillman favored the bill. The Republican majority in the committee
under Senator Aldrich, when they acted adversely on the bill, turned
it over to Senator Tillman, thereby making him its sponsor. The object
was to create what it was hoped would be an impossible situation in
view of the relations between Senator Tillman and myself. I regarded
the action as simply childish. It was a curious instance of how able
and astute men sometimes commit blunders because of sheer inability to
understand intensity of disinterested motive in others. I did not care
a rap about Mr. Tillman's getting credit for the bill, or having
charge of it. I was delighted to go with him or with any one else just
so long as he was traveling in my way--and no longer.
There was another amusing incident in connection with the passage of
the bill. All the wise friends of the effort to secure Governmental
control of corporations know that this Government control must be
exercised through administrative and not judicial officers if it is to
be effective. Everything possible should be done to minimize the
chance of appealing from the decisions of the administrative officer
to the courts. But it is not possible Constitutionally, and probably
would not be desirable anyhow, completely to abolish the appeal.
Unwise zealots wished to make the effort totally to abolish the appeal
in connection with the Hepburn Bill. Representatives of the special
interests wished to extend the appeal to include what it ought not to
include. Between stood a number of men whose votes would mean the
passage of, or the failure to pass, the bill, and who were not
inclined towards either side. Three or four substantially identical
amendments were proposed, and we then suddenly found ourselves face to
face with an absurd situation. The good men who were willing to go
with us but had conservative misgivings about the ultra-radicals would
not accept a good amendment if one of the latter proposed it; and the
radicals would not accept their own amendment if one of the
conservatives proposed it. Each side got so wrought up as to be
utterly unable to get matters into proper perspective; each prepared
to stand on unimportant trifles; each announced with hysterical
emphasis--the reformers just as hysterically as the reactionaries--
that the decision as regards each unimportant trifle determined the
worth or worthlessness of the measure. Gradually we secured a
measurable return to sane appreciation of the essentials. Finally both
sides reluctantly agreed to accept the so-called Allison amendment
which did not, as a matter of fact, work any change in the bill at
all. The amendment was drawn by Attorney-General Moody after
consultation with the Inter-State Commerce Commission, and was
forwarded by me to Senator Dolliver; it was accepted, and the bill
became law.
Thanks to this law and to the way in which the Inter-State Commerce
Commission was backed by the Administration, the Commission, under men
like Prouty, Lane, and Clark, became a most powerful force for good.
Some of the good that we had accomplished was undone after the close
of my Administration by the unfortunate law creating a Commerce Court;
but the major part of the immense advance we had made remained. There
was one point on which I insisted, and upon which it is necessary
always to insist. The Commission cannot do permanent good unless it
does justice to the corporations precisely as it exacts justice from
them. The public, the shippers, the stock and bondholders, and the
employees, all have their rights, and none should be allowed unfair
privileges at the expense of the others. Stock watering and swindling
of any kind should of course not only be stopped but punished. When,
however, a road is managed fairly and honestly, and when it renders a
real and needed service, then the Government must see that it is not
so burdened as to make it impossible to run it at a profit. There is
much wise legislation necessary for the safety of the public, or--like
workmen's compensation--necessary to the well-being of the employee,
which nevertheless imposes such a burden on the road that the burden
must be distributed between the general public and the corporation, or
there will be no dividends. In such a case it may be the highest duty
of the commission to raise rates; and the commission, when satisfied
that the necessity exists, in order to do justice to the owners of the
road, should no more hesitate to raise rates, than under other
circumstances to lower them.
So much for the "big stick" in dealing with the corporations when they
went wrong. Now for a sample of the square deal.
In the fall of 1907 there were severe business disturbances and
financial stringency, culminating in a panic which arose in New York
and spread over the country. The damage actually done was great, and
the damage threatened was incalculable. Thanks largely to the action
of the Government, the panic was stopped before, instead of being
merely a serious business check, it became a frightful and Nation-wide
calamity, a disaster fraught with untold misery and woe to all our
people. For 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 to overstate the value of
the service rendered in all these cases by such cabinet officers as
Moody and Bonaparte, and their outside assistants of the stamp of
Frank Kellogg.
It would be useless to enumerate all the suits we brought. Some of
them I have already touched upon. Others, such as the suits against
the Harriman railway corporations, which were successful, and which
had been rendered absolutely necessary by the grossly improper action
of the corporations concerned, offered no special points of interest.
The Sugar Trust proceedings, however, may be mentioned as showing just
the kind of thing that was done and the kind of obstacle encountered
and overcome in prosecutions of this character.
It was on the advice of my secretary, William Loeb, Jr., afterward
head of the New York Custom-House, that the action was taken which
started the uncovering of the frauds perpetrated by the Sugar Trust
and other companies in connection with the importing of sugar. Loeb
had from time to time told me that he was sure that there was fraud in
connection with the importations by the Sugar Trust through the New
York Custom-House. Finally, some time toward the end of 1904, he
informed me that Richard Parr, a sampler at the New York Appraisers'
Stores (whose duties took him almost continually on the docks in
connection with the sampling of merchandise), had called on him, and
had stated that in his belief the sugar companies were defrauding the
Government in the matter of weights, and had stated that if he could
be made an investigating officer of the Treasury Department, he was
confident that he could show there was wrongdoing. Parr had been a
former school fellow of Loeb in Albany, and Loeb believed him to be
loyal, honest, and efficient. He thereupon laid the matter before me,
and advised the appointment of Parr as a special employee of the
Treasury Department, for the specific purpose of investigating the
alleged sugar frauds. I instructed the Treasury Department
accordingly, and was informed that there was no vacancy in the force
of special employees, but that Parr would be given the first place
that opened up. Early in the spring of 1905 Parr came to Loeb again,
and said that he had received additional information about the sugar
frauds, and was anxious to begin the investigation. Loeb again
discussed the matter with me; and I notified the Treasury Department
to appoint Parr immediately. On June 1, 1905, he received his
appointment, and was assigned to the port of Boston for the purpose of
gaining some experience as an investigating officer. During the month
he was transferred to the Maine District, with headquarters at
Portland, where he remained until March, 1907. During his service in
Maine he uncovered extensive wool smuggling frauds. At the conclusion
of the wool case, he appealed to Loeb to have him transferred to New
York, so that he might undertake the investigation of the sugar
underweighing frauds. I now called the attention of Secretary
Cortelyou personally to the matter, so that he would be able to keep a
check over any subordinates who might try to interfere with Parr, for
the conspiracy was evidently widespread, the wealth of the offenders
great, and the corruption in the service far-reaching--while moreover
as always happens with "respectable" offenders, there were many good
men who sincerely disbelieved in the possibility of corruption on the
part of men of such high financial standing. Parr was assigned to New
York early in March, 1907, and at once began an active investigation
of the conditions existing on the sugar docks. This terminated in the
discovery of a steel spring in one of the scales of the Havemeyer &
Elder docks in Brooklyn, November 20, 1907, which enabled us to
uncover what were probably the most colossal frauds ever perpetrated
in the Customs Service. From the beginning of his active work in the
investigation of the sugar frauds in March, 1907, to March 4, 1909,
Parr, from time to time, personally reported to Loeb, at the White
House, the progress of his investigations, and Loeb in his turn kept
me personally advised. On one occasion there was an attempt made to
shunt Parr off the investigation and substitute another agent of the
Treasury, who was suspected of having some relations with the sugar
companies under investigation; but Parr reported the facts to Loeb, I
sent for Secretary Cortelyou, and Secretary Cortelyou promptly took
charge of the matter himself, putting Parr back on the investigation.
During the investigation Parr was subjected to all sorts of
harassments, including an attempt to bribe him by Spitzer, the dock
superintendent of the Havemeyer & Elder Refinery, for which Spitzer
was convicted and served a term in prison. Brzezinski, a special
agent, who was assisting Parr, was convicted of perjury and also
served a term in prison, he having changed his testimony, in the trial
of Spitzer for the attempted bribery of Parr, from that which he gave
before the Grand Jury. For his extraordinary services in connection
with this investigation Parr was granted an award of $100,000 by the
Treasury Department.
District-Attorney Stimson, of New York, assisted by Denison,
Frankfurter, Wise, and other employees of the Department of Justice,
took charge of the case, and carried on both civil and criminal
proceedings. The trial in the action against the Sugar Trust, for the
recovery of duties on the cargo of sugar, which was being sent over
the scales at the time of the discovery of the steel spring by Parr,
was begun in 1908; judgment was rendered against the defendants on
March 5, 1909, the day after I left office. Over four million dollars
were recovered and paid back into the United States Treasury by the
sugar companies which had perpetrated the various forms of fraud.
These frauds were unearthed by Parr, Loeb, Stimson, Frankfurter, and
the other men mentioned and their associates, and it was to them that
the people owed the refunding of the huge sum of money mentioned. We
had already secured heavy fines from the Sugar Trust, and from various
big railways, and private individuals, such as Edwin Earle, for
unlawful rebates. In the case of the chief offender, the American
Sugar Refining Company (the Sugar Trust), criminal prosecutions were
carried on against every living man whose position was such that he
would naturally know about the fraud. All of them were indicted, and
the biggest and most responsible ones were convicted. The evidence
showed that the president of the company, Henry O. Havemeyer,
virtually ran the entire company, and was responsible for all the
details of the management. He died two weeks after the fraud was
discovered, just as proceedings were being begun. Next to him in
importance was the secretary and treasurer, Charles R. Heike, who was
convicted. Various other officials and employees of the Trust, and
various Government employees, were indicted, and most of them
convicted. Ernest W. Gerbracht, the superintendent of one of the
refineries, was convicted, but his sentence was commuted to a short
jail imprisonment, because he became a Government witness and greatly
assisted the Government in the suits.
Heike's sentence was commuted so as to excuse him from going to the
penitentiary; just as the penitentiary sentence of Morse, the big New
York banker, who was convicted of gross fraud and misapplication of
funds, was commuted. Both commutations were granted long after I left
office. In each case the commutation was granted because, as was
stated, of the prisoner's age and state of health. In Morse's case the
President originally refused the request, saying that Morse had
exhibited "fraudulent and criminal disregard of the trust imposed upon
him," that "he was entirely unscrupulous as to the methods he
adopted," and "that he seemed at times to be absolutely heartless with
regard to the consequences to others, and he showed great shrewdness
in obtaining large sums of money from the bank without adequate
security and without making himself personally liable therefor." The
two cases may be considered in connection with the announcement in the
public press that on May 17, 1913, the President commuted the sentence
of Lewis A. Banks, who was serving a very long term penitentiary
sentence for an attack on a girl in the Indian Territory; "the reason
for the commutation which is set forth in the press being that 'Banks
is in poor health.' "
It is no easy matter to balance the claims of justice and mercy in
such cases. In these three cases, of all of which I had personal
cognizance, I disagreed radically with the views my successors took,
and with the views which many respectable men took who in these and
similar cases, both while I was in office and afterward, urged me to
show, or to ask others to show, clemency. It then seemed to me, and it
now seems to me, that such clemency is from the larger standpoint a
gross wrong to the men and women of the country.
One of the former special assistants of the district-attorney, Mr. W.
Cleveland Runyon, in commenting bitterly on the release of Heike and
Morse on account of their health, pointed out that their health
apparently became good when once they themselves became free men, and
added:
"The commutation of these sentences amounts to a direct
interference with the administration of justice by the courts.
Heike got a $25,000 salary and has escaped his imprisonment, but
what about the six $18 a week checkers, who were sent to jail, one
of them a man of more than sixty? It is cases like this that
create discontent and anarchy. They make it seem plain that there
is one law for the rich and another for the poor man, and I for
one will protest."
In dealing with Heike the individual (or Morse or any other
individual), it is necessary to emphasize the social aspects of his
case. The moral of the Heike case, as has been well said, is "how easy
it is for a man in modern corporate organization to drift into
wrongdoing." The moral restraints are loosened in the case of a man
like Heike by the insulation of himself from the sordid details of
crime, through industrially coerced intervening agents. Professor Ross
has made the penetrating observation that "distance disinfects
dividends"; it also weakens individual responsibility, particularly on
the part of the very managers of large business, who should feel it
most acutely. One of the officers of the Department of Justice who
conducted the suit, and who inclined to the side of mercy in the
matter, nevertheless writes: "Heike is a beautiful illustration of
mental and moral obscuration in the business life of an otherwise
valuable member of society. Heike had an ample share in the guidance
of the affairs of the American Sugar Company, and we are apt to have a
foreshortened picture of his responsibility, because he operated from
the easy coign of vantage of executive remoteness. It is difficult to
say to what extent he did, directly or indirectly, profit by the
sordid practices of his company. But the social damage of an
individual in his position may be just as deep, whether merely the
zest of the game or hard cash be his dominant motive."
I have coupled the cases of the big banker and the Sugar Trust
official and the case of the man convicted of a criminal assault on a
woman. All of the criminals were released from penitentiary sentences
on grounds of ill health. The offenses were typical of the worst
crimes committed at the two ends of the social scale. One offense was
a crime of brutal violence; the other offenses were crimes of astute
corruption. All of them were offenses which in my judgment were of
such a character that clemency towards the offender worked grave
injustice to the community as a whole, injustice so grave that its
effects might be far-reaching in their damage.
Every time that rape or criminal assault on a woman is pardoned, and
anything less than the full penalty of the law exacted, a premium is
put on the practice of lynching such offenders. Every time a big
moneyed offender, who naturally excites interest and sympathy, and who
has many friends, is excused from serving a sentence which a man of
less prominence and fewer friends would have to serve, justice is
discredited in the eyes of plain people--and to undermine faith in
justice is to strike at the foundation of the Republic. As for ill
health, it must be remembered that few people are as healthy in prison
as they would be outside; and there should be no discrimination among
criminals on this score; either all criminals who grow unhealthy
should be let out, or none. Pardons must sometimes be given in order
that the cause of justice may be served; but in cases such as these I
am considering, while I know that many amiable people differ from me,
I am obliged to say that in my judgment the pardons work far-reaching
harm to the cause of justice.
Among the big corporations themselves, even where they did wrong,
there was a wide difference in the moral obliquity indicated by the
wrongdoer. There was a wide distinction between the offenses committed
in the case of the Northern Securities Company, and the offenses
because of which the Sugar Trust, the Tobacco Trust, and the Standard
Oil Trust were successfully prosecuted under my Administration. It was
vital to destroy the Northern Securities Company; but the men creating
it had done so in open and above-board fashion, acting under what
they, and most of the members of the bar, thought to be the law
established by the Supreme Court in the Knight sugar case. But the
Supreme Court in its decree dissolving the Standard Oil and Tobacco
Trusts, condemned them in the severest language for moral turpitude;
and an even severer need of condemnation should be visited on the
Sugar Trust.
However, all the trusts and big corporations against which we
proceeded--which included in their directorates practically all the
biggest financiers in the country--joined in making the bitterest
assaults on me and on my Administration. Of their actions I wrote as
follows to Attorney-General Bonaparte, who had been a peculiarly close
friend and adviser through the period covered by my public life in
high office and who, together with Attorney-General Moody, possessed
the same understanding sympathy with my social and industrial program
that was possessed by such officials as Straus, Garfield, H. K. Smith,
and Pinchot. The letter runs:
January 2, 1908.
My dear Bonaparte:
I must congratulate you on your admirable speech at Chicago. You
said the very things it was good to say at this time. What you
said bore especial weight because it represented what you had
done. You have shown by what you have actually accomplished that
the law is enforced against the wealthiest corporation, and the
richest and most powerful manager or manipulator of that
corporation, just as resolutely and fearlessly as against the
humblest citizen. The Department of Justice is now in very fact
the Department of Justice, and justice is meted out with an even
hand to great and small, rich and poor, weak and strong. Those who
have denounced you and the action of the Department of Justice are
either misled, or else are the very wrongdoers, and the agents of
the very wrongdoers, who have for so many years gone scot-free and
flouted the laws with impunity. Above all, you are to be
congratulated upon the bitterness felt and expressed towards you
by the representatives and agents of the great law-defying
corporations of immense wealth, who, until within the last half-
dozen years, have treated themselves and have expected others to
treat them as being beyond and above all possible check from law.
It was time to say something, for the representatives of predatory
wealth, of wealth accumulated on a giant scale by iniquity, by
wrongdoing in many forms, by plain swindling, by oppressing wage-
workers, by manipulating securities, by unfair and unwholesome
competition and by stock-jobbing,--in short, by conduct abhorrent
to every man of ordinarily decent conscience, have during the last
few months made it evident that they are banded together to work
for a reaction, to endeavor to overthrow and discredit all who
honestly administer the law, and to secure a return to the days
when every unscrupulous wrongdoer could do what he wished
unchecked, provided he had enough money. They attack you because
they know your honesty and fearlessness, and dread them. The
enormous sums of money these men have at their control enable them
to carry on an effective campaign. They find their tools in a
portion of the public press, including especially certain of the
great New York newspapers. They find their agents in some men in
public life,--now and then occupying, or having occupied,
positions as high as Senator or Governor,--in some men in the
pulpit, and most melancholy of all, in a few men on the bench. By
gifts to colleges and universities they are occasionally able to
subsidize in their own interest some head of an educational body,
who, save only a judge, should of all men be most careful to keep
his skirts clear from the taint of such corruption. There are
ample material rewards for those who serve with fidelity the
Mammon of unrighteousness, but they are dearly paid for by that
institution of learning whose head, by example and precept,
teaches the scholars who sit under him that there is one law for
the rich and another for the poor. The amount of money the
representatives of the great moneyed interests are willing to
spend can be gauged by their recent publication broadcast
throughout the papers of this country from the Atlantic to the
Pacific of huge advertisements, attacking with envenomed
bitterness the Administration's policy of warring against
successful dishonesty, advertisements that must have cost enormous
sums of money. This advertisement, as also a pamphlet called "The
Roosevelt Panic," and one or two similar books and pamphlets, are
written especially in the interest of the Standard Oil and
Harriman combinations, but also defend all the individuals and
corporations of great wealth that have been guilty of wrongdoing.
From the railroad rate law to the pure food law, every measure for
honesty in business that has been pressed during the last six
years, has been opposed by these men, on its passage and in its
administration, with every resource that bitter and unscrupulous
craft could suggest, and the command of almost unlimited money
secure. These men do not themselves speak or write; they hire
others to do their bidding. Their spirit and purpose are made
clear alike by the editorials of the papers owned in, or whose
policy is dictated by, Wall Street, and by the speeches of public
men who, as Senators, Governors, or Mayors, have served these
their masters to the cost of the plain people. At one time one of
their writers or speakers attacks the rate law as the cause of the
panic; he is, whether in public life or not, usually a clever
corporation lawyer, and he is not so foolish a being as to believe
in the truth of what he says; he has too closely represented the
railroads not to know well that the Hepburn Rate Bill has helped
every honest railroad, and has hurt only the railroads that
regarded themselves as above the law. At another time, one of them
assails the Administration for not imprisoning people under the
Sherman Anti-Trust Law; for declining to make what he well knows,
in view of the actual attitude of juries (as shown in the Tobacco
Trust cases and in San Francisco in one or two of the cases
brought against corrupt business men) would have been the futile
endeavor to imprison defendants whom we are actually able to fine.
He raises the usual clamor, raised by all who object to the
enforcement of the law, that we are fining corporations instead of
putting the heads of the corporations in jail; and he states that
this does not really harm the chief offenders. Were this statement
true, he himself would not be found attacking us. The
extraordinary violence of the assault upon our policy contained in
speeches like these, in the articles in the subsidized press, in
such huge advertisements and pamphlets as those above referred to,
and the enormous sums of money spent in these various ways, give a
fairly accurate measure of the anger and terror which our actions
have caused the corrupt men of vast wealth to feel in the very
marrow of their being.
The man thus attacking us is usually, like so many of his fellows,
either a great lawyer, or a paid editor who takes his commands
from the financiers and his arguments from their attorneys. If the
former, he has defended many malefactors, and he knows well that,
thanks to the advice of lawyers like himself, a certain kind of
modern corporation has been turned into an admirable instrument by
which to render it well nigh impossible to get at the really
guilty man, so that in most cases the only way of punishing the
wrong is by fining the corporation or by proceeding personally
against some of the minor agents. These lawyers and their
employers are the men mainly responsible for this state of things,
and their responsibility is shared with the legislators who
ingeniously oppose the passing of just and effective laws, and
with those judges whose one aim seems to be to construe such laws
so that they cannot be executed. Nothing is sillier than this
outcry on behalf of the "innocent stockholders" in the
corporations. We are besought to pity the Standard Oil Company for
a fine relatively far less great than the fines every day
inflicted in the police courts upon multitudes of push cart
peddlers and other petty offenders, whose woes never extort one
word from the men whose withers are wrung by the woes of the
mighty. The stockholders have the control of the corporation in
their own hands. The corporation officials are elected by those
holding the majority of the stock and can keep office only by
having behind them the good-will of these majority stockholders.
They are not entitled to the slightest pity if they deliberately
choose to resign into the hands of great wrongdoers the control of
the corporations in which they own the stock. Of course innocent
people have become involved in these big corporations and suffer
because of the misdeeds of their criminal associates. Let these
innocent people be careful not to invest in corporations where
those in control are not men of probity, men who respect the laws;
above all let them avoid the men who make it their one effort to
evade or defy the laws. But if these honest innocent people are in
the majority in any corporation they can immediately resume
control and throw out of the directory the men who misrepresent
them. Does any man for a moment suppose that the majority
stockholders of the Standard Oil are others than Mr. Rockefeller
and his associates themselves and the beneficiaries of their
wrongdoing? When the stock is watered so that the innocent
investors suffer, a grave wrong is indeed done to these innocent
investors as well as to the public; but the public men, lawyers
and editors, to whom I refer, do not under these circumstances
express sympathy for the innocent; on the contrary they are the
first to protest with frantic vehemence against our efforts by law
to put a stop to over-capitalization and stock-watering. The
apologists of successful dishonesty always declaim against any
effort to punish or prevent it on the ground that such effort will
"unsettle business." It is they who by their acts have unsettled
business; and the very men raising this cry spend hundreds of
thousands of dollars in securing, by speech, editorial, book or
pamphlet, the defense by misstatement of what they have done; and
yet when we correct their misstatements by telling the truth, they
declaim against us for breaking silence, lest "values be
unsettled!" They have hurt honest business men, honest working
men, honest farmers; and now they clamor against the truth being
told.
The keynote of all these attacks upon the effort to secure honesty
in business and in politics, is expressed in a recent speech, in
which the speaker stated that prosperity had been checked by the
effort for the "moral regeneration of the business world," an
effort which he denounced as "unnatural, unwarranted, and
injurious" and for which he stated the panic was the penalty. The
morality of such a plea is precisely as great as if made on behalf
of the men caught in a gambling establishment when that gambling
establishment is raided by the police. If such words mean anything
they mean that those whose sentiments they represent stand against
the effort to bring about a moral regeneration of business which
will prevent a repetition of the insurance, banking, and street
railroad scandals in New York; a repetition of the Chicago and
Alton deal; a repetition of the combination between certain
professional politicians, certain professional labor leaders and
certain big financiers from the disgrace of which San Francisco
has just been rescued; a repetition of the successful efforts by
the Standard Oil people to crush out every competitor, to overawe
the common carriers, and to establish a monopoly which treats the
public with the contempt which the public deserves so long as it
permits men like the public men of whom I speak to represent it in
politics, men like the heads of colleges to whom I refer to
educate its youth. The outcry against stopping dishonest practices
among the very wealthy is precisely similar to the outcry raised
against every effort for cleanliness and decency in city
government because, forsooth, it will "hurt business." The same
outcry is made against the Department of Justice for prosecuting
the heads of colossal corporations that is made against the men
who in San Francisco are prosecuting with impartial severity the
wrongdoers among business men, public officials, and labor leaders
alike. The principle is the same in the two cases. Just as the
blackmailer and the bribe giver stand on the same evil eminence of
infamy, so the man who makes an enormous fortune by corrupting
Legislatures and municipalities and fleecing his stockholders and
the public stands on a level with the creature who fattens on the
blood money of the gambling house, the saloon and the brothel.
Moreover, both kinds of corruption in the last analysis are far
more intimately connected than would at first sight appear; the
wrong-doing is at bottom the same. Corrupt business and corrupt
politics act and react, with ever increasing debasement, one on
the other; the rebate-taker, the franchise-trafficker, the
manipulator of securities, the purveyor and protector of vice, the
black-mailing ward boss, the ballot box stuffer, the demagogue,
the mob leader, the hired bully and mankiller, all alike work at
the same web of corruption, and all alike should be abhorred by
honest men.
The "business" which is hurt by the movement for honesty is the
kind of business which, in the long run, it pays the country to
have hurt. It is the kind of business which has tended to make the
very name "high finance" a term of scandal to which all honest
American men of business should join in putting an end. One of the
special pleaders for business dishonesty, in a recent speech, in
denouncing the Administration for enforcing the law against the
huge and corrupt corporations which have defied the law, also
denounced it for endeavoring to secure a far-reaching law making
employers liable for injuries to their employees. It is meet and
fit that the apologists for corrupt wealth should oppose every
effort to relieve weak and helpless people from crushing
misfortune brought upon them by injury in the business from which
they gain a bare livelihood and their employers fortunes. It is
hypocritical baseness to speak of a girl who works in a factory
where the dangerous machinery is unprotected as having the "right"
freely to contract to expose herself to dangers to life and limb.
She has no alternative but to suffer want or else to expose
herself to such dangers, and when she loses a hand or is otherwise
maimed or disfigured for life it is a moral wrong that the burden
of the risk necessarily incidental to the business should be
placed with crushing weight upon her weak shoulders and the man
who has profited by her work escape scot-free. This is what our
opponents advocate, and it is proper that they should advocate it,
for it rounds out their advocacy of those most dangerous members
of the criminal class, the criminals of vast wealth, the men who
can afford best to pay for such championship in the press and on
the stump.
It is difficult to speak about the judges, for it behooves us all
to treat with the utmost respect the high office of judge; and our
judges as a whole are brave and upright men. But there is need
that those who go wrong should not be allowed to feel that there
is no condemnation of their wrongdoing. A judge who on the bench
either truckles to the mob or bows down before a corporation; or
who, having left the bench to become a corporation lawyer, seeks
to aid his clients by denouncing as enemies of property all those
who seek to stop the abuses of the criminal rich; such a man
performs an even worse service to the body politic than the
Legislator or Executive who goes wrong. In no way can respect for
the courts be so quickly undermined as by teaching the public
through the action of a judge himself that there is reason for the
loss of such respect. The judge who by word or deed makes it plain
that the corrupt corporation, the law-defying corporation, the
law-defying rich man, has in him a sure and trustworthy ally, the
judge who by misuse of the process of injunction makes it plain
that in him the wage-worker has a determined and unscrupulous
enemy, the judge who when he decides in an employers' liability or
a tenement house factory case shows that he has neither sympathy
for nor understanding of those fellow-citizens of his who most
need his sympathy and understanding; these judges work as much
evil as if they pandered to the mob, as if they shrank from
sternly repressing violence and disorder. The judge who does his
full duty well stands higher, and renders a better service to the
people, than any other public servant; he is entitled to greater
respect; and if he is a true servant of the people, if he is
upright, wise and fearless, he will unhesitatingly disregard even
the wishes of the people if they conflict with the eternal
principles of right as against wrong. He must serve the people;
but he must serve his conscience first. All honor to such a judge;
and all honor cannot be rendered him if it is rendered equally to
his brethren who fall immeasurably below the high ideals for which
he stands. There should be a sharp discrimination against such
judges. They claim immunity from criticism, and the claim is
heatedly advanced by men and newspapers like those of whom I
speak. Most certainly they can claim immunity from untruthful
criticism; and their champions, the newspapers and the public men
I have mentioned, exquisitely illustrate by their own actions
mendacious criticism in its most flagrant and iniquitous form.
But no servant of the people has a right to expect to be free from
just and honest criticism. It is the newspapers, and the public
men whose thoughts and deeds show them to be most alien to honesty
and truth who themselves loudly object to truthful and honest
criticism of their fellow-servants of the great moneyed interests.
We have no quarrel with the individuals, whether public men,
lawyers or editors, to whom I refer. These men derive their sole
power from the great, sinister offenders who stand behind them.
They are but puppets who move as the strings are pulled by those
who control the enormous masses of corporate wealth which if
itself left uncontrolled threatens dire evil to the Republic. It
is not the puppets, but the strong, cunning men and the mighty
forces working for evil behind, and to a certain extent through,
the puppets, with whom we have to deal. We seek to control law-
defying wealth, in the first place to prevent its doing evil, and
in the next place to avoid the vindictive and dreadful radicalism
which if left uncontrolled it is certain in the end to arouse.
Sweeping attacks upon all property, upon all men of means, without
regard to whether they do well or ill, would sound the death knell
of the Republic; and such attacks become inevitable if decent
citizens permit rich men whose lives are corrupt and evil to
domineer in swollen pride, unchecked and unhindered, over the
destinies of this country. We act in no vindictive spirit, and we
are no respecters of persons. If a labor union does what is wrong,
we oppose it as fearlessly as we oppose a corporation that does
wrong; and we stand with equal stoutness for the rights of the man
of wealth and for the rights of the wage-workers; just as much so
for one as for the other. We seek to stop wrongdoing; and we
desire to punish the wrongdoer only so far as is necessary in
order to achieve this end. We are the stanch upholders of every
honest man, whether business man or wage-worker.
I do not for a moment believe that our actions have brought on
business distress; so far as this is due to local and not world-
wide causes, and to the actions of any particular individuals, it
is due to the speculative folly and flagrant dishonesty of a few
men of great wealth, who now seek to shield themselves from the
effects of their own wrongdoings by ascribing its results to the
actions of those who have sought to put a stop to the wrongdoing.
But if it were true that to cut out rottenness from the body
politic meant a momentary check to an unhealthy seeming
prosperity, I should not for one moment hesitate to put the knife
to the cancer. On behalf of all our people, on behalf no less of
the honest man of means than of the honest man who earns each
day's livelihood by that day's sweat of his brow, it is necessary
to insist upon honesty in business and politics alike, in all
walks of life, in big things and in little things; upon just and
fair dealing as between man and man. We are striving for the right
in the spirit of Abraham Lincoln when he said:
"Fondly do we hope--fervently do we pray--that this mighty scourge
may speedily pass away. Yet, if God wills that it continue until
all the wealth piled by the bondsmen's two hundred and fifty years
of unrequited toil shall be sunk, and until every drop of blood
drawn with the lash shall be paid by another drawn with the sword,
as was said three thousand years ago, so still it must be said,
'The judgments of the Lord are true and righteous altogether.'
"With malice toward none; with charity for all; with firmness in
the right, as God gives us to see the right, let us strive on to
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