Theodore Rex - Edmund Morris [292]
Cortelyou had been at the Treasury only ten days when he was tested even more severely than Leslie Shaw had been during the “rich man’s panic” of 1903. Prices on the New York Stock Exchange, rendered unstable by a worldwide overexpansion of credit, plummeted without warning on 14 March. The Dow Jones Industrial Average declined by one quarter. Several big businesses went bankrupt. Doubts that the President’s former note-taker could handle such an emergency were swiftly dispelled when Cortelyou deposited twelve million dollars’ worth of Treasury gold in New York banks to replenish the money drain. This Morgan-like gesture saved Morgan himself from having to do something similar. It also pre-empted an emergency plan by E. H. Harriman and four other financiers to make twenty-five million available at the first hint of a crash. The speed and certainty with which Cortelyou acted helped to arrest the stock slide and turn it into a slow, but manageable decline. He won instant respect on Wall Street, and no more jokes were made about his stenographic past.
Roosevelt scoffed that the quasi-panic had been “a demonstration arranged by Mr. Harriman to impress the Administration.” Few financiers were prepared to believe that the Southern Pacific tycoon would make so expensive a gesture of protest against government regulation. A mild recession did seem to be in the making, though, and Jacob H. Schiff wrote to the President, begging him to do something statesmanlike before things got worse.
Schiff—silver-bearded and courtly, with the accent of his native Germany still heavy on his tongue—was one of Roosevelt’s few Democratic supporters, and, as such, not inclined to mince words. “We are confronted by a situation not only serious, but which, unless promptly taken in hand and prudently treated, is certain to bring great suffering upon the country,” he wrote. It was not so much a money crisis as a loss of confidence, brought about belatedly by last year’s regulatory reforms. Investors were afraid to risk funds in railroad stocks, out of fear that the Sixtieth Congress might be even more amenable to reform than the Fifty-ninth. With no Congress at all sitting for the next eight months, that fear was bound to intensify. Railroad securities would fail to sell, and railway improvement and construction programs would be canceled by nervous executives, causing both devaluation and deterioration. Schiff suggested that Roosevelt “bring together a committee representative of the railroad interests and the Interstate Commerce Commission,” along the lines of his successful coal-strike conference of five years before. Its job would be to discuss whatever future regulatory legislation the President had in mind, so that an endorsed program could be presented to Congress. “This will speedily restore confidence and dispel the clouds that are gathering over us in so threatening a manner.”
Roosevelt wrote back to say that J. Pierpont Morgan had recently tried to get some railroad executives, including Harriman, to visit the White House, but none had shown. He was therefore disinclined to call a conference. “Sooner or later they will realize that in their opposition to me for the last few years they have been utterly mistaken … that nothing better for them could be devised than the laws I have striven for and am striving to have enacted.”
Harriman would only say, enigmatically, to reporters, “This has been an unusual winter, both as to politics and as to weather.”
SO HAD IT BEEN for the President. The perfect conditions, meteorological and political, that had brightened his New Year’s Day (excepting always the dark cloud of Brownsville) had become unsettled almost at once. Now Jake Schiff was talking of more and bigger