Theodore Rex - Edmund Morris [298]
On Monday, 21 October, as the President headed home with deliberate slowness, to avoid even sharper panic, rumors circulated that the Knickerbocker had only ten million dollars left in cash. With sixty million loaned out, the trust might be unable to issue good checks past midday Tuesday. Well before that hour, Morgan saw its reserve dwindle to two million dollars, and coldly decided to let it collapse. “I can’t go on being everybody’s goat.”
By the time Roosevelt got back to the White House on Wednesday afternoon, money was almost unobtainable on Wall Street, call loan rates had risen to 125 percent, and the entire credit structure of the United States was under siege. Morgan and George Cortelyou (forsaking all governmental dignity to serve as the great man’s aide) were holding off hordes of desperate raiders. Overnight, the Secretary agreed to deposit twenty-five million dollars in Treasury funds in national banks—more than twice as much as his pledge of seven months before.
Roosevelt seemed unaware of how acute the situation was. Radiant and purified from his hunt, he patrolled the Executive Office with his hands behind his back, regaling all comers with his exploits in the canebrakes.
“Do I look as though those Wall Street fellows were really worrying me?”
“No, Mr. President, you certainly do not.”
“I’ve got them,” he said through his teeth, “on the run.”
It was exchanges such as this that persuaded some men that Roosevelt was fiscally retarded.
By now, most of the nation’s premier plutocrats were volunteering their help to Morgan, including E. H. Harriman, Henry Clay Frick, and John D. Rockefeller, Sr., who offered, incredibly, half of all his securities. At 1:30 P.M. on Thursday, 24 October—too late for Roosevelt to do anything except try to catch up, in briefing after briefing, with what had happened during his absence—the panic reached a point of almost terminal hysteria. The President of the New York Stock Exchange told Morgan that his institution would have to shut down. Morgan told him to wait, and summoned the chief executives of the city’s largest banks. Among them, they pledged twenty-five million dollars to keep the Exchange open through three o’clock. Stocks rebounded at once, and the “Roosevelt Panic of 1907” began to abate.
The President was gracious enough, on Friday, to issue a statement of congratulation to Cortelyou and “those conservative and substantial businessmen who in this crisis have acted with such wisdom and public spirit.” He used the words confidence and calm as often as possible, and managed to allay public nervousness, if not the unavoidable impression that he had been away from his desk, playing in the canebrakes, while conscientious financiers had been saving the American economy. For once they were not—and for a while yet were relieved of being—“malefactors of great wealth.”
ALTHOUGH A TOTAL crash had been averted, the crisis on Wall Street was by no means over. The next business week, starting on Monday, 28 October, was equally fraught, with New York City on the verge of defaulting for lack of cash to borrow, and another major financial institution, the Moore & Schley brokerage house, threatening to go the same way as Knickerbocker Trust. Morgan and his men came to the aid of the city, and devised an emergency plan to save Moore & Schley by persuading U.S. Steel to buy it—or rather, to buy the collateral shares for its loans, which were invested in the Tennessee Coal and Iron Company. Elbert H. Gary did not