Politics

Book review of The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism by Susan Berfield


In some ways, Morgan and Roosevelt were surprisingly similar. Both spent their early years in the shadows of their fathers. “Theodore admired his father above everyone else and dreaded disappointing him,” Berfield writes. The mighty Morgan was so stressed out that he considered retiring at 33 — but didn’t when his father refused permission. Both were aristocratic New Yorkers. “Their New York was privileged and pedigreed,” she writes. “It was calling cards and private clubs, opera, midnight dances, and summers in the country.” Both had first wives who died tragically. And neither one lacked for confidence. “Each presumed he could use his authority to determine the nation’s course. Each expected deference from the other along the way.”

Their confrontation was accidental, in one sense. Roosevelt was an unwilling vice president, funneled into the role by powerful financial interests that wanted to sideline someone they could already see was a potential troublemaker. The powerful senator and industrialist Mark Hanna “considered Roosevelt unsafe, the most damning criticism of all,” Berfield writes. “ ‘Don’t any of you realize there’s only one life between that madman and the Presidency?’ he pleaded.” Indeed. When business-friendly President William McKinley was shot on Sept. 14, 1901, the 42-year-old Roosevelt became the youngest person ever to lead the nation.

And yet confrontation was also preordained, because at the turn of the century, amid economic uncertainty and great inequality, a broader conflict was brewing: “An anger emerged that would define itself as anti-elite, anti-urban, anti-East Coast populism.” McKinley’s shooter, a disillusioned former steelworker named Leon Czolgosz, who “seemed to be one of those young men adrift in America’s raw, roaring economic churn,” had become captivated by the anarchist Emma Goldman after hearing her speak. “I shot the president because I thought it would help the working people and for the sake of the common people. I am not sorry for my crime,” he said when he was sentenced to death.

In 1902, the nascent United Mine Workers of America began a strike in the anthracite coalfields of eastern Pennsylvania. The strike threatened to leave major American cities short of fuel in the brutal winter. So it was that Roosevelt, who despite his class had developed an appreciation for the plight of those less fortunate, became the first president to have to mediate between “big business and labor.” He’d later view his intervention as “one of the great achievements of his presidency.”

The irony is that the coal strike was resolved with the background help of none other than Morgan, who essentially strong-armed the coal magnates into agreeing to arbitration. Roosevelt even thanked him. “My dear sir,” the president wrote, “let me thank you for the service you have rendered the whole people.”

By that time, Morgan had risen out of his father’s shadow to become the effective king of Wall Street. He had not just one but two nicknames: “Jupiter and Zeus.” He had financed the creation of U.S. Steel, which controlled almost half the country’s steelmaking capacity. Most of the coal land in northeastern Pennsylvania was controlled by the railroads; most of the railroads were controlled by Morgan. He wielded power over all of Wall Street. Berfield writes that the process by which he gained control even had a name: “Morganization.” The result, she notes, “was incomparable commercial power with little accountability.”

Even as McKinley lay dying, Morgan and other railroad tycoons were putting together an “imperious” deal — one that would bring him into direct contact with Roosevelt. That was the creation of the colossus known as Northern Securities, which comprised three lines and some 18,000 miles of track that stretched from Seattle to Chicago. It was (briefly) the second-largest company in the world, and its creation essentially gave the finger to anyone who believed that big business needed some limitations as to how big it could be. “Now it seemed as if a small group of the very wealthy, concentrated in the precincts of Wall Street, could issue decrees and determine the destinies of the most important parts of the nation’s economy,” Berfield writes.

It turned out that the money men who had wanted to corral Roosevelt had been right to be worried. In March 1902, his administration sued Northern Securities, and Morgan personally, for antitrust violations under the Sherman Act. It was an extraordinary thing to do.

“Presidents didn’t keep secrets from the captains of industry, and the House of Morgan had never before been surprised by the White House,” Berfield writes. “Roosevelt had changed the rules on the sly. For someone whose view of the world was as unvarying as Morgan’s, there was hardly a greater affront. Morgan would never forgive him.”

Two years later, the Supreme Court ruled in favor of the government on Case 277, as it was known. In a private letter, railroad magnate James J. Hill cried, “The decision itself is so unreasonable that if carried out it would undo the work of a hundred years and leave the country in a state of financial chaos” — a proclamation the essence of which has since been repeated by many a business tycoon who failed to get his way.

Berfield obviously did an extraordinary amount of research, and she draws heavily on documentary evidence to paint detailed pictures. This sometimes comes at the expense of clarity. I found myself reading a Wikipedia entry on the creation of Northern Securities to sort out what had transpired. In the middle of the coal strike, Berfield diverts to recount a letter Roosevelt wrote to his son Ted, who was at boarding school. “I can now get about on crutches . . . Mother goes home tomorrow. She says she is leaving me to take care of Ethel; I have gloomy forebodings that after a brief struggle Ethel will take care of me.” It’s a tangent that doesn’t go anywhere and diverts from the drama of the strike.

And the book may make you both sad and mad, because it serves as a poignant, painful reminder of what a real leader does. “Roosevelt had to mediate between the assumptions of the past and the hopes for the future,” Berfield writes. “He had to consider his principles and the circumstances. Most of all, he had to strive for the possible.” How absent any of that is from today’s Washington.

Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism



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