The Great Pierpont Morgan (27 page)

Morgan turned from the telephone to his associates at the dinner table, his countenance showing appalled dismay, but little anger. In telling the news to his guests he dwelt on what he felt was the unfairness of Roosevelt's action. Roosevelt, he said, ought to have told him, ought to have given him a chance to make over the Northern Securities Company, if necessary, so as to conform to whatever Roosevelt thought was right. Or, if the company must be dissolved, Roosevelt ought to have given him an opportunity to dissolve it voluntarily.… He had regarded Roosevelt as a gentleman.…

Morgan went to Washington and had an interview with Roosevelt, in the presence of Attorney General Knox, who had brought the government's suit. He protested that Roosevelt might have shown him the courtesy of advance warning.

“That is just what we did not want to do,” said the President.

“If we have done anything wrong,” persisted Morgan, “send your man to my man and they can fix it up.” (He meant the Attorney General and one of his own lawyers, presumably Stetson.)

“That can't be done,” said Roosevelt. To which Knox added, “We don't want to fix it up, we want to stop it.”

Morgan wanted to know whether the President was going to attack any of his other interests, such as the Steel Corporation. “Certainly not,” answered Roosevelt, “unless we find out that in any case they have done something that we regard as wrong.”

Morgan left, so angry that according to one of his lawyers he later sat down at his hotel and wrote to Roosevelt a long and irate letter, which he was with difficulty persuaded not to send.

After Morgan's departure from the White House, President Roosevelt said to Knox, “That is a most illuminating illustration of the Wall Street point of view. Mr. Morgan could not help regarding me as a big rival operator, who either intended to ruin all his interests or else could be induced to come to an agreement to ruin none.”

That was almost, but not, I think, quite true. Morgan was angry that he who had once before visited the White House to help another President preserve the country from what he regarded as dishonor—he who was convinced that the Northern Securities Company was the straightforward and constructive and aboveboard answer to the problem of bringing about community of interest among the railroads—should be attacked as if he were some sort of a crook. And also he thought Roosevelt was behaving as no gentleman would behave. If a gentleman thought a friend of his—a man for whom he had once given a dinner—was doing something out of bounds, he told him so, and gave him a chance to adjust his course. Only if the man continued wilfully to offend did he go to law. The curse of politics, in Morgan's view, was that it glorified behavior which no gentleman would countenance. Things were coming to a sad pass when politicians could upset the enterprises of men of honor, and win public applause by so doing.

Most lawyers felt the government's case against the Northern
Securities Company was doomed to defeat. But they were wrong. A change was taking place in the climate of opinion, and it reached even the judiciary. Not until March 14, 1904—two years later—did the Supreme Court say the final word on Northern Securities; then, reversing its former position on holding companies, it voted, five to four (with Chief Justice Fuller and Justices White, Peckham, and Holmes dissenting) that the company was illegal: that in the words of Justice John M. Harlan, “No scheme or device … could more effectively and certainly suppress free competition.”

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But before that decision had been handed down Morgan had been thrust into another dispute in which the President and public opinion were factors to be reckoned with. This was the anthracite coal strike of 1902—a rebellion of the miners, under their idolized leader, the eloquent and persuasive John Mitchell, against the virtually feudal conditions of work imposed by the mine operators headed by George F. Baer, who as president of the Reading Railroad was subject—in certain financial matters at least—to Morgan's authority.

During that year Pierpont Morgan had been spending an exceptionally long time overseas. In the spring, in London, he had completed the arrangements for combining the White Star, American, Red Star, Leyland, Atlantic Transport, and Dominion lines into a new big shipping combine which was to be called the International Mercantile Marine. This was a project in which he took delight. It would mitigate, he thought, the mutually damaging competition between transatlantic steamship lines, providing a more orderly and convenient and profitable way of distributing international traffic. It would associate Englishmen and Americans harmoniously, under American leadership, in a sort of enterprise for which, as an annual transatlantic traveler, he had a sentimental regard. It was big, too, very big; the combined fleet numbered over 120 steamships. And if the investing public would buy the new shares of International Mercantile Marine at solid prices, the profit to his firm would run high into the millions.

Many Englishmen were disturbed at the news that so large a shipping combination would be under the aegis of an American; was Britain to be no longer mistress of the seas?
Questions were asked in the House of Commons, to which Prime Minister Balfour replied that Mr. Morgan did not intend to injure British shipping and would meet the British on any point where their shipping interests were likely to be imperiled. But the uneasiness remained in a good many British minds, and it was accentuated by the further fact that Morgan had taken half of a British government loan of thirty-two million pounds for the account of his own firm, the Rothschilds, and the Barings, and that he was trying (unsuccessfully, as it turned out) to develop a plan for the financing of the London underground railway system. Peddlers on the London streets were selling for a penny a “license to stay on the Earth,” signed by “J. Pierpont Morgan.”

But Morgan didn't mind much; he was having a gay time in England, giving large dinner parties at Prince's Gate and Dover House and making lavish purchases of works of art; and soon he was off on a real holiday round—a voyage on the
Corsair
from the Riviera to Venice and back to Brindisi; another voyage to Kiel, where Kaiser Wilhelm of Germany came aboard for luncheon; an expedition to Berlin in the private railway car used by members of the Imperial family, with Albert Ballin, the German shipping magnate, as the Morgan party's host; and finally, attendance at the coronation of King Edward VII in Westminster Abbey. It was not until late in August that he returned to the United States, to find the coal-strike problem awaiting him.

Ever since May the anthracite miners had been out on strike. They would not return unless the coal operators would negotiate with their union, the United Mine Workers, which represented both anthracite and bituminous miners. The operators were adamant; they would talk with their own men, they said, but not with the union; their position was set forth—and unintentionally caricatured—in the famous reply of George F. Baer of the Reading Railroad to a letter from one Mr. Clark of Wilkes-Barre, to whom, with magnificent ineptitude, he wrote: “… I beg of you not to be discouraged. The rights and interests of the laboring man will be protected and cared for—not by the labor agitators, but by the Christian men to whom God in His infinite wisdom has given the control of the property interests of the country.…” The strike went on and on. Morgan, on his grand tour of Europe, had
been kept informed of events, but had refused to do anything, feeling that labor relations lay outside the range of his authority or influence over the Reading and the other railroads which controlled most of the anthracite mines; and after his return to New York he still saw no chance for active intervention. The acute shortage of coal for consumers troubled him, and he contributed twenty thousand dollars toward the maintenance by Nathan Straus of a coal depot on Grand Street, in New York's East Side, where poor people could buy coal at low cost. But he felt that he could not lay down the law to Baer and the other operators.

By the first of October matters had reached such a pass that President Roosevelt intervened. (It is interesting today to note that to the editors of many conservative newspapers his intervention seemed outrageous interference—what business of the President's was a labor dispute?—and that Roosevelt himself was acutely conscious that he was without authority to act.) He called John Mitchell and the chief operators to the temporary White House on Lafayette Place (the Executive Mansion was being repaired). Mitchell promptly agreed to accept the findings of an arbitration commission appointed by the President, whatever these might be; Baer and the other operators not only refused, but insolently told the President that “the duty of the hour is not to waste time negotiating with the fomenters of this anarchy” and asked if the operators were being expected to “deal with a set of outlaws.” Roosevelt's effort had failed.

It was at this juncture that Elihu Root, the Secretary of War, had a brainstorm. He thought he could see a formula for bridging the gap, and he also thought he knew who would make the operators see reason. With Roosevelt's enthusiastic approval he got in touch with Morgan, and at the latter's invitation he went to New York by train, clattered in a cab to the landing at West Thirty-fifth Street, and was taken by launch to the
Corsair
, lying at anchor in the North River. There he talked for hours with Morgan. Once again the yacht was the scene of a peace conference.

Under Morgan's eye Root wrote out, on a piece of note paper bearing the legend “On board the
Corsair,
” a brief memorandum to be adopted by the mine owners for settlement. Then he and Morgan went ashore and drove by cab
to the Union Club, where some of the operators had gathered at Morgan's request. Morgan got out and went into the club; Root went on to take a train back to Washington.

The essence of the memorandum was that the operators would not negotiate with the union but would submit to impartial adjudication. At the session in the Union Club, and in a meeting the next day with Baer, who came on to New York from Philadelphia, Morgan secured acceptance of the memorandum with a few changes. After much conferring and long-distance telephoning, Morgan boarded a special train late on Tuesday, October 14, and rushed to Washington, accompanied by his partner, Bacon, who had been a classmate of Roosevelt's at Harvard. They went to the Arlington Hotel, where they were joined by Secretary Root; then the three men proceeded to the temporary White House in Lafayette Place. They brought a specific proposal for settlement of the strike.

It was a strange experience for Morgan. Only a few months before he had faced Roosevelt as a man accused of the offense of setting up machinery to bring peace among warring railroad companies; this time he faced him as an ally in setting up machinery to bring peace between railroad companies and organized labor.

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The specific proposal, signed by Baer and the other operators, was for arbitration of the strike by a commission to be appointed by the President, this commission to consist of an engineer officer of the Army or Navy, an expert mining engineer, one of the federal judges in eastern Pennsylvania, “a man who by active participation in mining and selling coal is familiar with the physical and commercial features of the business,” and finally “a man of prominence eminent as a sociologist.”

Roosevelt was delighted. Morgan had certainly brought the operators a long way from their previously haughty position. He submitted the proposal to the miners, who accepted it, but made the natural suggestion that the commission should include a representative of organized labor, and further that, since most of the miners were Catholics, the presence of a Catholic bishop on the commission would tend to win their
approval of its findings. On the evening of the following day, Morgan having returned to New York, Bacon and his partner George W. Perkins (another friend of Roosevelt's), sat for hours at a telephone in the temporary White House, trying to win the operators' consent to these revisions, which Roosevelt thought should be granted. No luck—the operators would not accept a board on which sat a representative of organized labor. It was late at night before Roosevelt suddenly discovered that they were quite willing to accept, as a member of the board, the Grand Chief of the Order of Railway Conductors,
provided he was labeled “a man of prominence eminent as a sociologist.
” With that ludicrous face-saving arrangement made, the operators said yes—and the strike was settled.

To all of this a footnote should be added. When Morgan was accused in the press of having intervened simply because he had a personal financial interest in stopping the coal strike, John Mitchell came to his defense in an interview in which he was quoted as saying:

To my personal knowledge Mr. Morgan had been trying to settle the coal strike ever since he came back from Europe two months ago. If others had been as fair and reasonable as Mr. Morgan was, this strike would have been settled a long time ago. I know nothing about Mr. Morgan's financial interests compelling him to seek settlement of the strike, but I am informed that he keenly felt his responsibility to the public in connection with the fuel famine, and has done his best to bring about the end. Both Mr. Morgan and Mr. Cassatt of the Pennsylvania Railroad were working for a settlement when President Roosevelt made his last and successful move. Mr. Morgan could not very well have been forced to do something which he had been trying to achieve for several weeks. I make this statement in justice to Mr. Morgan. We have no quarrel with him and wish none; we do not fear him, but prefer his friendship if he is willing to give it to us. I am credibly informed that he is friendly to organized labor. As an organizer of capital he concedes the right of labor to organize also and when labor organizations are fair and conservative he believes
in dealing directly with them for the advantage of both employers and employees. It is this relationship which the United Mine Workers of America seek in the anthracite field, and we invite Mr. Morgan to co-operate with us in securing a permanent and scientific solution of the labor problem in this region.