The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism
“The Hour of Fate is a tale of greed, power, and accountability, an epic story of a clash of titans, one a political dynamo, the other unparalleled in business savvy. Out of their struggle, a new nation emerged . . .”
In popular knowledge, there are plenty of terms and phrases applied to Theodore Roosevelt—Rough Rider, outdoorsman, explorer, to name but a few. To historians, though, there is another phrase, lesser known by the masses: “trust buster.” In The Hour of Fate: Theodore Roosevelt, J. P. Morgan, and the Battle to Transform American Capitalism, author Susan Berfield graphically illustrates how he earned that sobriquet.
Roosevelt was one of this country’s most colorful presidents, thrust into the vice-presidency as William McKinley’s running mate by powerful Republicans who thought he could do less damage to the party in Washington, D.C., than in the New York governor’s mansion. Imagine their shock when a crazed anarchist fired two bullets from a .32 caliber Iver Johnson automatic revolver into McKinley, leaving Roosevelt just a heartbeat away from the Oval Office.
Wall Street held its collective breath, unsure of what a Roosevelt presidency might mean. While McKinley lay on his death bed, Roosevelt’s brother-in-law wrote to the man who would become the next president: “I must frankly tell you that there is a feeling in financial circles here that in case you become President, you may change matters so as to upset the confidence, for the time at least, of the financial world, which would be an awful blow to everybody.”
One of those who was most trepidatious about Roosevelt’s apparently imminent ascension was J. P. Morgan, railroad magnate, industrialist, financial baron. Not the richest—that honor belonged to John D. Rockefeller and Andrew Carnegie—but by far the most influential. Berfield writes that “[Morgan] was commanding in a way none could match. Wherever he sat became the head of the table.”
He was part of a new breed of millionaire—financiers backing the nation’s industrialists. Americans were familiar with the industrialists, who “accumulated their wealth in ways most Americans could understand. They dug up something. They discovered something. They built something.”
But the financiers were something not previously known, men who “found their riches in the flow of money itself. They lent and borrowed capital, collected fees and commissions, created stocks, sometimes inflated, to sell to eager small-time investors.” In other words, while the old-time industrialists made their money by making something, the financiers made money by making money.
Morgan had put together his empire by, among other things, investing in, and then accumulating railroads, putting his own people on the boards and in the offices, a process that came to be known as “Morganization.” This not only gave him control over the railroads, but also over the goods they carried. Berfield says the “result was incomparable commercial power with little accountability.” Lawyers call that monopoly power.
The author delves into both men’s backstories and traces their rise, barreling toward a massive collision after the turn of the 20th century. Morgan, she says, “had an aristocrat’s disdain for public sentiment and the conviction that his actions were to the country’s advantage, no explanations necessary.”
Roosevelt, on the other hand, while believing in the essentialness of big business, “also believed it had to be accountable to the public.” He “wanted to assert the primacy of government over business,” while Morgan “thought that was needless, even dangerous.” And that scared him about Roosevelt. He once told a writer that he feared Roosevelt “because I don’t know what he’ll do.” Roosevelt replied that he believed Morgan feared him exactly because “he does know what I’ll do.”
When Roosevelt ascended to the White House, the two men felt each other out at first in an uneasy détente. But as now-President Roosevelt grew more determined to speak on behalf of the common man, and railroad magnate Morgan tightened his grasp on the throat of American commerce, a collision was inevitable.
The train wreck (pun intended) occurred when Roosevelt instructed his Justice Department to institute a lawsuit under the Sherman Anti-Trust Act against Morgan’s Northern Securities Company, a behemoth formed in the same year that McKinley was assassinated. It took the United States Supreme Court to sort through the wreckage, issuing its ruling in 1904 that dismantled Morgan’s empire created by the merger of the Great Northern and Northern Pacific Railway companies.
Justice John Marshall Harlan wrote in his majority opinion, fearing that commerce in the northern part of the U.S. would be at “the mercy of a single holding corporation”: “If such combination be not destroyed, all advantages that would naturally come to the public under the operation of the general laws of competition . . . will be lost.”
The Hour of Fate is a tale of greed, power, and accountability, an epic story of a clash of titans, one a political dynamo, the other unparalleled in business savvy. Out of their struggle, a new nation emerged, one that could flex its muscles and cause private enterprise to shudder, instead of the other way around as it had been before.
Today, as the United States barrels its way into the 21st century, with business behemoths like Amazon and Apple treading in the footsteps of Morgan’s Northern Securities, one can only wonder when and where the next trust buster will arise.