Theodore Roosevelt by Theodore Roosevelt (read this if .TXT) 📕

APPENDIX A THE TRUSTS, THE PEOPLE, AND THE SQUARE DEAL

[Written when Mr. Taft’s administration brought suit to dissolve the steel corporation, one of the grounds for the suit being the acquisition by the Corporation of the Tennessee Coal and Iron Company; this action was taken, with my acquiescence, while I was President, and while Mr. Taft was a member of my cabinet; at the time he never protested against, and as far as I knew approved of my action in this case, as in the Harvester Trust case, and all similar cases.]

The suit against the Steel Trust by the Government has brought vividly before our people the need of reducing to order our chaotic Government policy as regards business. As President, in Messages to Congress I repeatedly called the attention of that body and of the public to the inadequacy of the Anti-Trust Law by itself to meet business conditions and secure justice to the people, and to the further fact that it might, if left unsupplemented by additional legislation, work mischief, with no compensating advantage; and I urged as strongly as I knew how that the policy followed with relation to railways in connection with the InterState Commerce Law should be followed by the National Government as regards all great business concerns; and therefore that, as a first step, the powers of the Bureau of Corporations should be greatly enlarged, or else that there should be created a Governmental board or commission, with powers somewhat similar to those of the InterState Commerce Commission, but covering the whole field of interState business, exclusive of transportation (which should, by law, be kept wholly separate from ordinary industrial business, all common ownership of the industry and the railway being forbidden). In the end I have always believed that it would also be necessary to give the National Government complete power over the organization and capitalization of all business concerns engaged in interState commerce.

A member of my Cabinet with whom, even more than with the various Attorneys-General, I went over every detail of the trust situation, was the one time Secretary of the Interior, Mr. James R. Garfield. He writes me as follows concerning the suit against the Steel Corporation:

“Nothing appeared before the House Committee that made me believe we were deceived by Judge Gary.

“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 InterState 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 3/10 per cent produced by the Steel Corporation 1 9/10 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 InterState 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 InterState 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