Theodore Roosevelt: An Autobiography

by Theodore Roosevelt

"This, I think, is a case that shows clearly the difference between destructive litigation and constructive legislation. I have not yet seen a full copy of the Government's petition, but our papers give nothing that indicates any kind of unfair or dishonest competition such as existed in both the Standard Oil and Tobacco Cases. As I understand it, the competitors of the Steel Company have steadily increased in strength during the last six or seven years. Furthermore, the per cent of the business done by the Steel Corporation has decreased during that time. As you will remember, at our first conference with Judge Gary, the Judge stated that it was the desire and purpose of the Company to conform to what the Government wished, it being the purpose of the Company absolutely to obey the law both in spirit and letter. Throughout the time that I had charge of the investigation, and while we were in Washington, I do not know of a single instance where the Steel Company refused any information requested; but, on the contrary, aided in every possible way our investigation.

"The position now taken by the Government is absolutely destructive of legitimate business, because they outline no rule of conduct for business of any magnitude. It is absurd to say that the courts can lay down such rules. The most the courts can do is to find as legal or illegal the particular transactions brought before them. Hence, after years of tedious litigation there would be no clear-cut rule for future action. This method of procedure is dealing with the device, not the result, and drives business to the elaboration of clever devices, each of which must be tested in the courts.

"I have yet to find a better method of dealing with the anti-trust situation than that suggested by the bill which we agreed upon in the last days of your Administration. That bill should be used as a basis for legislation, and there could be incorporated upon it whatever may be determined wise regarding the direct control and supervision of the National Government, either through a commission similar to the Inter-State Commerce Commission or otherwise."

Before taking up the matter in its large aspect, I wish to say one word as to one feature of the Government suit against the Steel Corporation. One of the grounds for the suit is the acquisition by the Steel Corporation of the Tennessee Coal and Iron Company; and it has been alleged, on the authority of the Government officials engaged in carrying on the suit, that as regards this transaction I was misled by the representatives of the Steel Corporation, and that the facts were not accurately or truthfully laid before me. This statement is not correct. I believed at the time that the facts in the case were as represented to me on behalf of the Steel Corporation, and my further knowledge has convinced me that this was true. I believed at the time that the representatives of the Steel Corporation told me the truth as to the change that would be worked in the percentage of the business which the proposed acquisition would give the Steel Corporation, and further inquiry has convinced me that they did so. I was not misled. The representatives of the Steel Corporation told me the truth as to what the effect of the action at that time would be, and any statement that I was misled or that the representatives of the Steel Corporation did not thus tell me the truth as to the facts of the case is itself not in accordance with the truth. In The Outlook of August 19 last I gave in full the statement I had made to the Investigating Committee of the House of Representatives on this matter. That statement is accurate, and I reaffirm everything I therein said, not only as to what occurred, but also as to my belief in the wisdom and propriety of my action—indeed, the action not merely was wise and proper, but it would have been a calamity from every standpoint had I failed to take it. On page 137 of the printed report of the testimony before the Committee will be found Judge Gary's account of the meeting between himself and Mr. Frick and Mr. Root and myself. This account states the facts accurately. It has been alleged that the purchase by the Steel Corporation of the property of the Tennessee Coal and Iron Company gave the Steel Corporation practically a monopoly of the Southern iron ores—that is, of the iron ores south of the Potomac and the Ohio. My information, which I have every reason to believe is accurate and not successfully to be challenged, is that, of these Southern iron ores the Steel Corporation has, including the property gained from the Tennessee Coal and Iron Company, less than 20 per cent—perhaps not over 16 per cent. This is a very much smaller percentage than the percentage it holds of the Lake Superior ores, which even after the surrender of the Hill lease will be slightly over 50 per cent. According to my view, therefore, and unless—which I do not believe possible—these figures can be successfully challenged, the acquisition of the Tennessee Coal and Iron Company's ores in no way changed the situation as regards making the Steel Corporation a monopoly.[*] The showing as to the percentage of production of all kinds of steel ingots and steel castings in the United States by the Steel Corporation and by all other manufacturers respectively makes an even stronger case. It makes the case even stronger than I put it in my testimony before the Investigating Committee, for I was scrupulously careful to make statements that erred, if at all, against my own position. It appears from the figures of production that in 1901 the Steel Corporation had to its credit nearly 66 per cent of the total production as against a little over 34 per cent by all other steel manufacturers. The percentage then shrank steadily, until in 1906, the year before the acquisition of the Tennessee Coal and Iron properties, the percentage was a little under 58 per cent. In spite of the acquisition of these properties, the following year, 1907, the total percentage shrank slightly, and this shrinking has continued until in 1910 the total percentage of the Steel Corporation is but a little over 54 per cent, and the percentage by all other steel manufacturers but a fraction less than 46 per cent. Of the 54 310 per cent produced by the Steel Corporation 1 910 per cent is produced by the former Tennessee Coal and Iron Company. In other words, these figures show that the acquisition of the Tennessee Coal and Iron Company did not in the slightest degree change the situation, and that during the ten years which include the acquisition of these properties by the Steel Corporation the percentage of total output of steel manufacturers in this country by the Steel Corporation has shrunk from nearly 66 per cent to but a trifle over 54 per cent. I do not believe that these figures can be successfully controverted, and if not successfully controverted they show clearly not only that the acquisition of the Tennessee Coal and Iron properties wrought no change in the status of the Steel Corporation, but that the Steel Corporation during the decade has steadily lost, instead of gained, in monopolistic character.

[*] My own belief is that our Nation should long ago have
adopted the policy of merely leasing for a term of years
mineral-bearing land; but it is the fault of us ourselves,
of the people, not of the Steel Corporation, that this
policy has not been adopted.

So much for the facts in this particular case. Now for the general subject. When my Administration took office, I found, not only that there had been little real enforcement of the Anti-Trust Law and but little more effective enforcement of the Inter-State Commerce Law, but also that the decisions were so chaotic and the laws themselves so vaguely drawn, or at least interpreted in such widely varying fashions, that the biggest business men tended to treat both laws as dead letters. The series of actions by which we succeeded in making the Inter-State Commerce Law an efficient and most useful instrument in regulating the transportation of the country and exacting justice from the big railways without doing them injustice—while, indeed, on the contrary, securing them against injustice—need not here be related. The Anti-Trust Law it was also necessary to enforce as it had never hitherto been enforced; both because it was on the statute-books and because it was imperative to teach the masters of the biggest corporations in the land that they were not, and would not be permitted to regard themselves as, above the law. Moreover, where the combination has really been guilty of misconduct the law serves a useful purpose, and in such cases as those of the Standard Oil and Tobacco Trusts, if effectively enforced, the law confers a real and great good.

Suits were brought against the most powerful corporations in the land, which we were convinced had clearly and beyond question violated the Anti-Trust Law. These suits were brought with great care, and only where we felt so sure of our facts that we could be fairly certain that there was a likelihood of success. As a matter of fact, in most of the important suits we were successful. It was imperative that these suits should be brought, and very real good was achieved by bringing them, for it was only these suits that made the great masters of corporate capital in America fully realize that they were the servants and not the masters of the people, that they were subject to the law, and that they would not be permitted to be a law unto themselves; and the corporations against which we proceeded had sinned, not merely by being big (which we did not regard as in itself a sin), but by being guilty of unfair practices towards their competitors, and by procuring fair advantages from the railways. But the resulting situation has made it evident that the Anti-Trust Law is not adequate to meet the situation that has grown up because of modern business conditions and the accompanying tremendous increase in the business use of vast quantities of corporate wealth. As I have said, this was already evident to my mind when I was President, and in communications to Congress I repeatedly stated the facts. But when I made these communications there were still plenty of people who did not believe that we would succeed in the suits that had been instituted against the Standard Oil, the Tobacco, and other corporations, and it was impossible to get the public as a whole to realize what the situation was. Sincere zealots who believed that all combinations could be destroyed and the old-time conditions of unregulated competition restored, insincere politicians who knew better but made believe that they thought whatever their constituents wished them to think, crafty reactionaries who wished to see on the statute-books laws which they believed unenforceable, and the almost solid "Wall Street crowd" or representatives of "big business" who at that time opposed with equal violence both wise and necessary and unwise and improper regulation of business-all fought against the adoption of a sane, effective, and far-reaching policy.

It is a vitally necessary thing to have the persons in control of big trusts of the character of the Standard Oil Trust and Tobacco Trust taught that they are under the law, just as it was a necessary thing to have the Sugar Trust taught the same lesson in drastic fashion by Mr. Henry L. Stimson when he was United States District Attorney in the city of New York. But to attempt to meet the whole problem not by administrative governmental action but by a succession of lawsuits is hopeless from the standpoint of working out a permanently satisfactory solution. Moreover, the results sought to be achieved are achieved only in extremely insufficient and fragmentary measure by breaking up all big corporations, whether they have behaved well or ill, into a number of little corporations which it is perfectly certain will be largely, and perhaps altogether, under the same control. Such action is harsh and mischievous if the corporation is guilty of nothing except its size; and where, as in the case of the Standard Oil, and especially the Tobacco, trusts, the corporation has been guilty of immoral and anti-social practices, there is need for far more drastic and thoroughgoing action than any that has been taken, under the recent decree of the Supreme Court. In the case of the Tobacco Trust, for instance, the settlement in the Circuit Court, in which the representatives of the Government seem inclined to concur, practically leaves all of the companies still substantially under the control of the twenty-nine original defendants. Such a result is lamentable from the standpoint of justice. The decision of the Circuit Court, if allowed to stand, means that the Tobacco Trust has merely been obliged to change its clothes, that none of the real offenders have received any real punishment, while, as the New York Times, a pro-trust paper, says, the tobacco concerns, in their new clothes, are in positions of "ease and luxury," and "immune from prosecution under the law."

Surely, miscarriage of justice is not too strong a term to apply to such a result when considered in connection with what the Supreme Court said of this Trust. That great Court in its decision used language which, in spite of its habitual and severe self-restraint in stigmatizing wrong-doing, yet unhesitatingly condemns the Tobacco Trust for moral turpitude, saying that the case shows an "ever present manifestation . . . of conscious wrong-doing" by the Trust, whose history is "replete with the doing of acts which it was the obvious purpose of the statute to forbid, . . . demonstrative of the existence from the beginning of a purpose to acquire dominion and control of the tobacco trade, not by the mere exertion of the ordinary right to contract and to trade, but by methods devised in order to monopolize the trade by driving competitors out of business, which were ruthlessly carried out upon the assumption that to work upon the fears or play upon the cupidity of competitors would make success possible." The letters from and to various officials of the Trust, which were put in evidence, show a literally astounding and horrifying indulgence by the Trust in wicked and depraved business methods—such as the "endeavor to cause a strike in their

The Anti-Trust Law cannot meet the whole situation, nor can any modification of the principle of the Anti-Trust Law avail to meet the whole situation. The fact is that many of the men who have called themselves Progressives, and who certainly believe that they are Progressives, represent in reality in this matter not progress at all but a kind of sincere rural toryism. These men believe that it is possible by strengthening the Anti-Trust Law to restore business to the competitive conditions of the middle of the last century. Any such effort is foredoomed to end in failure, and, if successful, would be mischievous to the last degree. Business cannot be successfully conducted in accordance with the practices and theories of sixty years ago unless we abolish steam, electricity, big cities, and, in short, not only all modern business and modern industrial conditions, but all the modern conditions of our civilization. The effort to restore competition as it was sixty years ago, and to trust for justice solely to this proposed restoration of competition, is just as foolish as if we should go back to the flintlocks of Washington's Continentals as a substitute for modern weapons of precision. The effort to prohibit all combinations, good or bad, is bound to fail, and ought to fail; when made, it merely means that some of the worst combinations are not checked and that honest business is checked. Our purpose should be, not to strangle business as an incident of strangling combinations, but to regulate big corporations in thoroughgoing and effective fashion, so as to help legitimate business as an incident to thoroughly and completely safeguarding the interests of the people as a whole. Against all such increase of Government regulation the argument is raised that it would amount to a form of Socialism. This argument is familiar; it is precisely the same as that which was raised against the creation of the Inter-State Commerce Commission, and of all the different utilities commissions in the different States, as I myself saw, thirty years ago, when I was a legislator at Albany, and these questions came up in connection with our State Government. Nor can action be effectively taken by any one State. Congress alone has power under the Constitution effectively and thoroughly and at all points to deal with inter-State commerce, and where Congress, as it should do, provides laws that will give the Nation full jurisdiction over the whole field, then that jurisdiction becomes, of necessity, exclusive—although until Congress does act affirmatively and thoroughly it is idle to expect that the States will or ought to rest content with non-action on the part of both Federal and State authorities. This statement, by the way, applies also to the question of "usurpation" by any one branch of our Government of the rights of another branch. It is contended that in these recent decisions the Supreme Court legislated; so it did; and it had to; because Congress had signally failed to do its duty by legislating. For the Supreme Court to nullify an act of the Legislature as unconstitutional except on the clearest grounds is usurpation; to interpret such an act in an obviously wrong sense is usurpation; but where the legislative body persistently leaves open a field which it is absolutely imperative, from the public standpoint, to fill, then no possible blame attaches to the official or officials who step in because they have to, and who then do the needed work in the interest of the people. The blame in such cases lies with the body which has been derelict, and not with the body which reluctantly makes good the dereliction.