Theodore Rex - Edmund Morris [54]
For once in his cautious career, Knox felt impelled to advise a policy of risk. Even if Roosevelt’s suit failed, it would point up the “moral dualism” in contemporary American society, whereby big businessmen exhibited one set of values at home, and another set, tending toward barbarism, at the office. If the suit succeeded, it would more or less guarantee the President a second term. And if he, Philander Chase Knox, argued it before the Supreme Court, persuasively and brilliantly …
The Attorney General’s astigmatism gave some people the impression that his one eye focused on immediate business, while the other contemplated dreamy horizons, visible only to himself. “Sleepy Phil” was indeed looking beyond books and briefs in 1902—toward the Governorship of Pennsylvania, or to a seat in the Senate, if only old Matt Quay would die. Farther off, in 1908 or 1912, Knox saw an even more pleasing prospect: the job of his current client.
Before the week was over, he was ready with a fourteen-page opinion. He delivered it personally to Roosevelt. “If you instruct me to bring such a suit, I can promise you we shall win it.”
THE PRESIDENT GAVE only one vague hint of his impending action in the days following. “Mr. Hanna,” he said after breakfast on Tuesday, 18 February, “what do you think about the Northern Securities Company?”
Hanna, preoccupied with plans for a business trip to New York, replied that the great trust was “the best thing” that could have happened to the Northwest. As a shareholder and old friend of James J. Hill, he could hardly have said less. That evening, he left town.
ON THURSDAY, 20 FEBRUARY, the Senator returned to Washington, and found his train full of trust attorneys. He ran into Knox’s predecessor, John W. Griggs, in the parlor car, and asked what was taking him to the capital. Griggs realized that Hanna had not yet seen the morning newspapers.
“The government has brought a suit against the Northern Securities Company.”
Hanna was thunderstruck. Knox’s overnight statement read:
Within a very short time a bill will be filed by the United States to test the [combination of] the Northern Pacific and Great Northern systems through the instrumentality of the Northern Securities Company. Some time ago the President requested an opinion as to the legality of this merger, and I have recently given him one to the effect that, in my judgment, it violates the provisions of the Sherman Act of 1890, whereupon he directed that suitable action should be taken to have the question judicially determined.
The statement was typical of Knox in its precise, chilly brevity. It was typical, too, of Roosevelt in its timing. A popular but jurisdictionally weak state suit against Northern Securities, initiated by Governor Samuel R. Van Sant of Minnesota, was about to be thrown out of court. By announcing his own federal suit now, Roosevelt would benefit from the likely publicity. Henceforth he, and not the Governor, would be seen as David battling the Wall Street Goliath.
Knox’s willingness to invoke the Sherman Act was concussive in its effect on financial markets. Even as Hanna stood listening to Griggs in the parlor car, J. P. Morgan was working to avoid a panic on Wall Street. At first, Morgan had refused to believe the news from Washington. But there had been such a wild rush to sell at 9:00 A.M., accompanied by reports of “demoralized” exchanges in London, Paris, and Berlin, that his instinctive reaction was to counterbuy. More stocks fell off the board during the first hour than in a normal day’s trading. Morgan bought steadily through lunchtime, and around three o’clock prices began to rally.
It had been a near thing. The floor was loud with denunciations of Theodore Roosevelt. Not since President Cleveland’s Venezuela Note in 1895 had stockbrokers been so taken by surprise.