“I noticed some time ago that you had brought suit to take away the charter of the Standard Oil Company. I intended at the time to write you about it, but it slipped my memory. A few days ago while in New York I met a friend, John D. Rockefeller, and he called my attention to the fact that you had brought the suit, but did not ask me to influence you in any way.”
“I have always considered you in the line of political promotion,” said Hanna, and then went on to intimate that unless the suit against the Standard was withdrawn, Watson would be the object of vengeance by the corporation and its friends forever after. As if to clinch his threat and argument, Hanna wrote: “You have been in politics long enough to know that no man in public office owes the public anything.”
GROUP OF CLEVELAND CITIZENS
Who called on John D. Rockefeller at his residence, “Forest Hill,” on July 25, 1896, to thank him for his gift of park lands to the city. Mr. Rockefeller is in the centre of the group, the late Senator Marcus A. Hanna in the right lower corner, and Governor Myron T. Herrick in the centre of the top row.
The letter concluded with a reference to the present Secretary of State, John Sherman. Hanna wrote: “I understood that Senator Sherman inspired and instigated this suit. If this is so I will take occasion to talk to him sharply when I see him.”
The letter was written on the typewriter and letter-heads of Hanna’s business office in Cleveland.
Having secured this much, the correspondent, thinking it possible Mr. Watson might have answered Mr. Hanna’s letter, undertook a bit of original investigation. He sought the files of the attorney-general’s official correspondence for 1890, and the following is what he found. This letter certainly is evidence enough of the sort of letter Mr. Hanna had written even if the above restoration is not absolutely accurate:
December 13, 1890.
Hon. Mark Hanna,
Cleveland, Ohio.
My dear Sir:—Your communication of the 21st ult. came to hand. The delay in answering it has been caused largely by my being ill for several days. I did not intend that bringing the action to which you refer in your letter should be an attack on my part on “organised capital,” for I am aware that great business transactions require the union and concentration of moneyed interests, and fully appreciate what has been done in that direction, yet I cannot but feel that I am justified in bringing the suit against the Standard Oil Company, and believe that there are many things relating to the case which, if you understood, would cause you to entertain different views concerning it and my relation to it. Let me impress one thing on you with special particularity, and you may depend absolutely on its truthfulness. Senator Sherman never suggested or encouraged this suit, either directly or indirectly. This must be understood in its broadest sense. The report probably arose from the fact that the action was brought shortly after the Senator made his great speech in support of his anti-trust bill. You will hardly receive my statement with favour, I fear, but I am alone responsible for the action. No one encouraged me to bring it or knew that it would be brought until I determined to do so, and it is unfair to other persons to charge them with suggesting it or encouraging it. With the highest appreciation of your personal friendship, I am, with great respect,
Truly yours,
David K. Watson.
The part which the terse phrase attributed to Mr. Hanna,
“NO MAN IN PUBLIC OFFICE OWES THE PUBLIC ANYTHING,”
played in the Senatorial campaign of 1897 is familiar to those who follow politics. It was kept standing for days in black-faced capitals at the head of the opposition newspapers in Ohio, and remained a potent weapon in the hands of Mr. Hanna’s enemies to the time of his death.
Whatever the pressure Mr. Watson encountered, it had no effect on his purpose. He quietly went ahead, presented his brief, and, when the time came, he and Mr. Warrington argued the case. The following proposition from the brief presented by Mr. Watson and Mr. Warrington show tersely the line of their argument:
“Where the manifest object of an agreement is to unite corporations, partnerships and individuals into, or include them in a common enterprise, and control them through an agency unknown to the law of their creation, and all the officers, directors and stockholders of such corporations sign the agreement, and, in furtherance of its provisions, transfer their stock to such agency, permit the corporate executive agencies to make such transfers on the corporate books, submit without objection to the domination of the agency to which the stock is so transferred in the selection of directors and officers, and in the management of the corporate affairs and business suffer the corporate earnings to go to such agency and be placed and mingled with the earnings of the other parties in the combination so created, and, after deductions for uses of the combination, be divided as part of such common earnings among the persons interested, in such case the corporations become and are—or at least will be treated by the courts as—parties to such agreement and actors in its performance, although their corporate names are withheld therefrom. Such proceedings constitute actual corporate conduct, if not formal corporate action, on the part of each corporation.
“An agreement is in violation of law and void which in effect creates a partnership between corporations, or where its probable operation and effect—much more where its inevitable tendency—is to create a substantial monopoly, or is in restraint of trade or otherwise injurious to the public.
“Where a corporation, either directly or indirectly, submits to the domination of an agency unknown to the statute, or identifies itself with and unites in carrying out an agreement whose performance is injurious to the public, it thereby offends against the law of its creation and forfeits all rights to its franchises, and judgment of ouster should be entered against it.
“Even if the statute which prescribes a time within which an action against a corporation for forfeiture of its charter shall be commenced, be applicable to a case of this kind, yet, where the offences or acts committed or omitted by a corporation for which forfeiture of its charter is sought at the suit of the state, are concealed, or are of such character as to conceal themselves, such offences and acts as against the state are frauds, and such statute does not begin to run until the frauds are discovered.”
Joseph H. Choate appeared for the defence. The most eminent lawyer in the country, his argument must have been anxiously awaited by Mr. Watson. Curiously enough, as it seems to the non-legal mind, Mr. Choate began his plea by a prayer for mercy. Whatever the sins of the Standard Oil Company of Ohio, pleaded Mr. Choate, do not take away its charter. Mr. Choate then proceeded with a strong argument in which he claimed “absolute innocence and absolute merit for everything we have done within the scope of the matters brought before the court by these pleadings.”
The argument did not convince the court of the innocence of the Standard in the questions at issue. The court showed, out of the mouth of the trust agreement itself, that the Standard Oil Company of Ohio was “managed in the interest of the Standard Oil Trust—irrespective of what might be its duties to the people of the state from which it derives its corporate life.” The court gave as its opinion that an act of a majority of the stockholders of a corporation affects the property of a company in the same way that a resolution by the board of directors affects it. “By this agreement,” said the court, “indirectly, it is true, but none the less effectually, the defendant is controlled and managed by the Standard Oil Trust, an association with its principal place of business in New York City, and organised for a purpose contrary to the policy of our laws. Its object was to establish a virtual monopoly of the business of producing petroleum, and of manufacturing, refining and dealing in it and all its products, throughout the entire country, and by which it might not merely control the production, but the price, at its pleasure. All such associations are contrary to the policy of our state and void.