Theodore Rex - Edmund Morris [37]
At sixty-three, Hill was ten years older than Harriman. The strain of fighting a ruthless adversary had taken its toll. One horizon-filling vision still haunted him: the combination of the Great Northern, the Northern Pacific, and the Burlington into a rail megasystem covering seventeen states and thirty-two thousand miles of track. Harriman alone could prevent that dream from becoming reality. Hill therefore had to seduce “the little man,” as he called him, into some sort of partnership.
What lay before them and Perkins was a proposal to create a trust so immense as to absorb the stock of all three railroads—some four hundred million dollars’ worth. These securities would be invested in a “holding company,” which would act as a conduit for profits, and protect the component roads. Harriman would be rewarded with board seats proportionate to his Northern Pacific holdings, free access to the Burlington system, and a huge sum of cash. Hill proposed calling their new trust “The Northern Securities Company Limited.”
Anybody could see from the draft charter that Northern Securities, if incorporated, would be the greatest combination in the world, second only to U.S. Steel. It would earn one hundred million dollars a year. Its commerce would extend from Chicago to Seattle, and thence, via Hill shipping lines, as far as China.
The flaw in this Columbian scheme was that the Great Northern and Northern Pacific were competitive roads. Mutually operated, they might seem to be acting in restraint of interstate trade, as defined by the Sherman Antitrust Act.
But Hill was confident of the legality of his charter. The finest trust attorneys in the country had researched the Supreme Court’s interpretation of the Sherman Act, and found no precedent to threaten Northern Securities. Indeed, the decision in U.S. v. E. C. Knight seemed to affirm the right of a holding company to acquire competing stocks, whether the result was monopoly or not.
The bells of Trinity Church struck two o’clock. It was time for a decision. Harriman weighed the cost of further warfare against the profits of truce, and pronounced himself “perfectly satisfied” with Hill’s offer.
George Perkins agreed to join them on the board of the new trust, as representative of the House of Morgan. The three men voted to file for immediate incorporation. Then they went into the night.
THE NEXT DAY, Tuesday, 12 November, Roosevelt finished drafting his first Annual Message to Congress. The task had occupied him, on and off, for more than seven weeks. He had taken particular pains with the subsection on trusts, and was looking forward to reading it to his Cabinet.
SECRECY SURROUNDING THE formation of Northern Securities lasted a further twenty-four hours. Not until Wednesday morning did a prominent but vaguely worded announcement of “a settlement” in “the Northern Pacific matter” appear in the New York Sun, Morgan’s mouthpiece. There was no hint of the formation of a new trust, but more details were promised later in the day. Clearly, the story was so big Morgan wanted to delay it until after the stock exchange closed.
Roosevelt worked until lunchtime. At 1:15 he called for the White House barber—he had an eccentric fondness for being shaved in the early afternoon—then marched with glowing cheeks into the dining room. He asked the Attorney General of the United States to accompany him.
ROOSEVELT HAD TAKEN to calling Philander C. Knox his “playmate.” At first sight, the little lawyer seemed an unlikely candidate for friendship. He was short, smooth, pale, and expressionless, a porcelain egg of a man, weighted in place, yet tilting to the slightest touch. His dark blue eyes stared in different directions. No spoon could crack him open for inspection. In the words of a frustrated interviewer,