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