Roosevelt and the Business World

WHAT MR. ROOSEVELT'S

ELECTION WILL MEAN

TO THE BUSINESS

WORLD

BY FRANK A. MUNSEY

THIS article is written on the day following the Ohio preferential primary, May 22. Things are moving so rapidly in these times that a magazine article, necessarily written several weeks before publication, but read as from the date of the issue of the magazine, may well seem a misfit. It is essential, therefore, to fix the time of writing that the reader may see as from the writer's viewpoint.

If there were any longer any considerable doubt of Mr. Roosevelt's nomination at origin in— Chicago, it would be venturesome to write anything for publication a month hence under the caption of this article. The question every one is asking himself or his neighbor to-day is:

"What will Mr. Roosevelt's election mean to the business world? Will it mean greater general prosperity, or greater confusion and disturbance than we now have ?"

This is exactly what every man wishes to know. It is with him, after all, a question of busy factories and bulging commerce rather than the election of any particular man to the Presidency.

In the contest for delegates to the nominating convention in Chicago, most business and professional men throughout the country have opposed Mr. Roosevelt. Their opposition has been based on the fancy, or fear, that if again elected President he would not give us as safe an administration as Mr. Taft would. This is the very heart. Of the matter.

Such concern about Mr. Roosevelt's attitude toward business, toward railroads, toward corporations, and industries generally, cannot be squared to a just and intelligent review of his former administration. Mr. Roosevelt is not an experiment. He has been many years in public life, during seven of which he was President of the United States.

THE CHARGES AGAINST ROOSEVELT

The chief charges against him have their

HIS FIGHT AGAINST RAILROAD METHODS THAT WERE ARCHAIC AND DISHONEST.

HIS INITIATION OF PROCEEDINGS AGAINST

TRUSTS.

THE PANIC OF 1907.

Wall Street was perfectly satisfied with the railroad situation, so far as concerned its freedom to run business in its own way and to keep accounts in its own way. Before Mr. Roosevelt's administration railroading was looked upon very much as a personal business -- a business with which the man at the head of it, subject to his board of directors, had a right to do pretty much as he pleased. Railroading was an empire unto itself. Its freedom and tremendous power made for dramatic speculation and the highest kind of high finance. Something was happening, something doing in the railroad world, every day, that gave the Street a chill, or thrilled it with speculative intoxication.

Those were wonderful in the arena of high financial tumbling, the like of which we shall never see again. The variegated pictures of delirium that were thrown upon the speculative screen almost from day to day were masterpieces of interwoven fact and fiction.

Mr. Roosevelt had no patience with the idea that a railroad was of the nature of a personal business, like a man's farm, for instance, or the shop of a small merchant or a local trucking business, all of which do have, or can easily have, ample competition.

A railroad, as he saw it -- and he saw it right -- is a public-service concern, which must serve the public generally, and which exists by grace of the public. It is a private property in the sense of the actual dollars invested in it, but the property of the community in the bigger and broader sense -a dual property, which could not exist without the good-will of the community, on the one hand, and the money put into it, on the other.

This was a conception that found no place in Wall Street and with railroad managements. It is not recorded that more than one railroad magnate openly said "the public be damned," but as acts sometimes speak louder than words, and more convincingly, it is obvious that this particular railroad president did not stand alone in his view of the relation between a railroad and the public.

ROOSEVELT'S RAILROAD REGULATION

So, when this man Roosevelt took it upon himself to bring sane business methods and regulation to the railroad world, to introduce a uniform system of bookkeeping, to cut out rebates, to regulate freight-rates, and to insist on reports that should show with reasonable accuracy the financial condition of a railroad, all Wall Street and all the speculators rose up in their wrath and denounced him.

There was no precedent for all this, they cried. No President had hitherto taken it upon himself to meddle in railroad affairs in any such way, and had we not had a great and glorious list of Presidents ? This man Roosevelt was a usurper of the rights of the people, a dictator, a demagogue, playing to the mob.

From this time on Mr. Roosevelt's administration was a battle-ground. Lined up together against him were the interests, all

big business, all the speculators, and the politicians.

Eight or ten years have elapsed since this effort at the regulation of railroads, and since this new doctrine of public service on the part of railroads was vitalized by Mr. Roosevelt. To-day, the reforms that he insisted upon have become ingrained into the very life of railroading, and have proved, for the most part, to be possessed of broad common sense and justice and fairness, both to the railroads themselves and to the community.

No first-rate railroad management would wish to go back to the old conditions of ratecutting and indiscriminate rebates and idiosyncratic methods of accounting, neither would the legitimate bankers or the serious investors be willing to return to the uncertainties of the pre-Roosevelt period, so far as concerns the stability of the prices of securities.

THE NORTHERN SECURITIES VICTORY

Mr. Roosevelt's courageous and masterful work in forcing through these reforms, and in awakening the public conscience to their righteousness, showed great vision, great sense of justice, great statesmanship.

One of Mr. Roosevelt's most notable victories was his triumph in the Northern Securities case, compelling the dissolution of that enormous holding company, which, in the inception, was to control the Great Northern, the Northern Pacific, and the C., B. and Q. But for the determined war Mr. Roosevelt waged on this holding corporation, a concern that had the backing of the most powerful financial forces of the country, we might to-day be practically without competition in our railroad systems.

Indeed, it is not reasonable to assume that the Northern Securities Company would have stopped with the roads with which it started. It would, perhaps, have gone on taking in other railway systems until it controlled all, or a large part, of the important railroads of the country.

It might have been this, or it might have' been that one or two similar holding companies would have been established, resulting in throwing all our railroads into the hands of one, two, or three gigantic trusts, and leaving our people without competing railway systems, leaving our business interests without competing freight-rates.

After he had the railroad situation well in hand and it was in process of clarification Mr. Roosevelt turned his attention to big business. He initiated prosecutions against the Standard Oil Company, the American Tobacco Company, the VirginiaCarolina Chemical Company, and some others. He also began an investigation of the Sugar Trust's customs frauds.

These aggressive moves looking to the regulation of big business further embittered the money centers and speculative communities. Their antagonism had grown to such enormous proportions, and had so warped their judgment, that nothing Mr. Roosevelt did was right and everything he did was wrong. Oversensitive and hostile capital could see no good in him, and fought him relentlessly then, as it still does.

Mr. Roosevelt might have had a peaceful and colorless administration if he had chosen the easy path, but he elected, instead, to work for the good of the ninety millions, and to see, so far as in him lay, and so far as his official 'powers would permit, that every man, rich or poor, influential or otherwise, had the squarest kind of a deal.

This meant war on arrogant intrenched interests, and in this war he stood wellnigh alone, save for the support of the people themselves and of the more progressive minds in Congress.

THE PANIC or 1907

Then came the panic of 1907, which Wall Street and its allies charged entirely to Roosevelt. There never was a more mistaken conclusion than this. The panic was inevitable. It could not have been prevented. No human force could have prevented it. With speculation strained to the breaking-point, with business strained to the breaking-point, with capital strained to the breaking-point, something had to give way.

The panic was two years overdue when it came. It would have come quite as surely, whether Mr. Roosevelt or some one else had been in the White House, if the overstrained business conditions had been the same.

The fact is, we hadn't money enough to do the work we were doing, and to do the work we wanted to do. Every phase of industry was pushed to its utmost capacity. There had never been a period of equal activity, of equal expansion. All legitimate business was as optimistic, as reckless, as heedless of danger as Wall Street and the speculative world generally.

Factories of every kind all over the land were running on full time, running overtime, running night and day, and couldn't keep up with their orders. Many new factories had been built, 'and others had been enlarged, or were in process of enlargement. The building trade was at high pressure. Sky-scrapers were going up everywhere, from one end of the country to the other, and sky-scrapers call for real money, and lots of it.

Traffic was so heavy and business so enormous that the railroads were hopelessly inadequate to meet the demands upon them. They were literally groaning under the burdens of prosperity. They couldn't handle the business of the country. In the Dakotas, in the winter of 1906 and 1907, the people found themselves in danger of freezing to death for want of coal, which the railroads could not haul, congested as they were with the mountains of freight hurled at them. So great was this congestion that many shopkeepers in the extreme. Northwest did not get their Christmas goods until long after the holidays were over -- not until late in January or February.

James J. Hill, the seer of the Western railroad world, about that time pointed out the critical dangers of the situation, and the hopeless incapacity of our transportation systems to keep pace with the growth of our industries and the output of our soil. He urged that money should be found somewhere with which to double both the trackage and the equipment of all our railroads. But where and how to raise this money was a problem that staggered him. It meant billions and billions of dollars.

And the farmers were no laggards in that period. They felt the spur of inflated prosperity, and let themselves go as the business world had let itself go in the matter of expansion, betterments, and expenditures.

Wages were going up everywhere, and as wages went up the prices of all commodities went up; rents increased, the value of farmlands increased, all realty increased, even as the price of stocks and bonds increased.

A PERIOD OF TOO MUCH PROSPERITY

It was a period of intense speculation in securities, in real estate, in everything. Everybody was prosperity-mad, everybody talked of our boundless resources, of bigger and bigger and yet bigger prices for securities, and of bigger and bigger and yet bigger prices for everything. There was no pessimism anywhere, there was no note of the impending crash. There was no thought of the day of reckoning, no thought of the panic that was soon to fall so heavily upon the land.

Money in Wall Street had reached one hundred and twenty per cent on call— that is, money borrowed from day to day —and at other times forty, ninety, and one hundred per cent. With stocks all the while bounding upward, day after day marked higher and higher, what mattered it that money averaged to cost ten or twenty percent ? The thought of interest was petty and narrow, considered beside the glittering profits of the higher and always higher prices.

And time money -- that is, money borrowed for a specified period, three months, four months, or six months -- was very difficult to get and ranged at impossible rates.

In March, 1907, the first break came in the price of securities. That was, in fact, the beginning of the panic. With this break the European money-markets closed their doors to us. They were deaf to our demands for money, and turned their backs on our securities.

We were going at such a pace that we were compelled to have money. We couldn't stop in a minute, and there was no apparent way of gradually slowing down. No longer able to sell our securities in Europe, and with the tremendous volume of securities held in Europe and thrown back upon us, we were unable to stem the tide. Everybody was crying for money and willing to pay almost any price for it. Everybody had to have money to meet commitments, to finance industry and commerce and the matchless business that still swept on in undiminished strides.

A WARNING THAT WAS NOT HEEDED

The spring crash in securities seemed not to affect general business at all. Wall Street was looked upon as a thing apart from the rest of the country, and business men saw nothing in what had happened there that meant a warning to them. In fact, business, which is never too friendly to Wall Street, felt no sense of depression at the curbing of speculation. It meant less demand for money from holders of securities, which foreshadowed more and easier money for business.

The crumbling and tumbling of prices in March was regarded by many in the

Street as merely a temporary setback, and every effort was made to restore prices to the old sky-high figures.

But with occasional rallies, the sagging went on throughout the dreary months of summer. Everybody who had sufficient foresight reduced his holdings of securities, or got out of the market altogether if he could, but every share of stock that was sold was bought by somebody, and the purchaser soon found himself burdened with a declining security.

And so it went on until the great panic broke upon us in October. The first upheaval came in the Mercantile National Bank and the National Bank of North America, two institutions in the Morse chain of banks, where high finance had run riot. This was the beginning of Morse's troubles, which involved the Heinzes, the Thomases, and Barney, president of the Knickerbocker Trust Company.

Morse and his associates almost immediately resigned from these two banks, and from other institutions which they controlled, or with which they were prominently connected. Then came the announcement that Barney had been compelled to resign from the Knickerbocker Trust, and a little later the entire community was shocked and stunned by the news that he had committed suicide. The Knickerbocker was one of the leading trust companies of the city, and Barney was thought to be a genius in finance.

Thus the great panic started here in New York, and thus it spread from one institution to another, until it leaped the boundaries of the city and swept like a cyclone over the whole country.

WAS MR. ROOSEVELT RESPONSIBLE ?

Was Mr. Roosevelt responsible for this period of reckless speculation ? Certainly not.

Was Mr. Roosevelt responsible for bidding prices of securities up to the breaking-point? Certainly not.

Was Mr. Roosevelt responsible for Morse and his chain of banks and his system of high finance ? Certainly not.

Was Mr. Roosevelt responsible for Barney's reckless management of the Knickerbocker Trust Company, his dismissal from that company, and his suicide? Certainly not.

Was Mr. Roosevelt responsible for all the high finance of that period, for the over extension in every branch of business, for the tremendous scale of building that had developed, for the artificial and sensational life of the community, dazzled by the song of wealth and the scheme of money-getting? Certainly not.

And yet Wall Street and all those who think, or fancy they think, as Wall Street thinks charged it up to Roosevelt, and haven't yet got the idea out of their heads.

In one sense he was responsible -- in the sense that under his administration this greatest of business prosperity was reached. Nothing like it had ever been known before, and nothing like it has happened since. It was more than a mere speculative inflation. It was big, broad, genuine prosperity, all - round prosperity. And it was on this prosperity that speculation rested, this prosperity that made possible the figures to which our securities were marked up and the enormous volume of transactions in them.

It was a case of too much prosperity, dangerous prosperity, and without criticizable responsibility to any one. Man reflects in his acts and thoughts the period, the very moment of the period, and in these times of matchless optimism few men could see disaster ahead.

It is to Mr. Roosevelt's credit that this era of greatest prosperity was reached under his administration, and not to his discredit. What happened in 1907 will happen again under similar or approximately similar conditions -that is, when business and speculation and extravagance are pushed to the breaking-point. Money will stand a certain strain, no more.

In this view of Mr. Roosevelt as President, of his relation to the railroads, to big business, and to the great panic of 1907, is there anything, I submit, to justify the belief that he is a dangerous man to the business interests of the country, to the industries of the country?

He faced in his administration a condition that no longer exists, and he met it as a strong man meets difficult situations. We had gone just as far as we could under the old, go-as-you-please, capitalistic domination. The people were in revolt against it and would have no more of it. They demanded reforms, certain righteous reform,s, and this demand reached a crisis during Mr. Roosevelt's incumbency of office.

He had to deal with a condition that had never before urgently confronted any administration since the formation of the government, and he handled it with great courage and striking ability.

If Mr. Roosevelt is elected this fall, he will enter upon his duties as President under entirely different conditions. The drastic work that fell to his hands to do, he did. There is no occasion for such drastic work now. Regulation, upbuilding, and the polishing off of the work of his former administration is, in part, the task that would confront him on March 4, 1913. His new work would be that of construction, not that of reconstruction.

ROOSEVELT'S RECORD AS PRESIDENT

What did Mr. Roosevelt do as President that he should not have done, in the public interest, that was dangerous and hurtful to business ? Let us look at the facts, and base our conclusions on them -- not on prejudice, not on vagaries.

Was Mr. Roosevelt's intervention in the coal strike, in a crisis such as existed at that time, justifiable or not? Wasn't it, to the very last note, in the interest of general business and the people as a whole, who had to have coal ?

.Was Mr. Roosevelt's action against the Northern Securities Company justifiable or not; and was it dangerous and hurtful to business?

Was Mr. Roosevelt's Pure Food and Drugs Act justifiable, and was it dangerous and hurtful to legitimate business?

Were Mr. Roosevelt's efforts' in keeping the door of China open to American commerce dangerous and hurtful to business?

Was Mr. Roosevelt's masterful work in bringing about the settlement of the RussoJapanese War dangerous and hurtful to business ?

Was Mr. Roosevelt's Panama Canal project dangerous and hurtful to business?

Was Mr. Roosevelt's movement for the conservation of our natural resources dangerous and hurtful to business?

Was Mr. Roosevelt's inauguration of an annual conference of the Governors of all our States dangerous and hurtful to business?

Was Mr. Roosevelt's inauguration of a movement for the improvement of conditions of country life dangerous and hurtful to business?

Was Mr. Roosevelt's act forbidding corporations to contribute to campaign funds dangerous and hurtful to business? Was Mr. Roosevelt's reduction of the interest-bearing debt by more than ninety million dollars dangerous and hurtful to business?

Was Mr. Roosevelt's settlement of the Alaska boundary dispute dangerous and hurtful to business?

Was Mr. Roosevelt's act calling for the extension of the forest reserves dangerous and hurtful to business?

Was Mr. Roosevelt's National Irrigation Act dangerous and hurtful to business ?

Was Mr. Roosevelt's act for the improvement of waterways and water-power sites dangerous and hurtful to business?

Were Mr. Roosevelt's Employers' Liability Act, Safety Appliance Act, and the regulation of railroad employees' hours of labor dangerous and hurtful to business ?

If not these? and if not his stand against archaic and dishonest railroad methods and against trusts, what is there, may I ask, in his record as President, to justify the conclusion that he would be a dangerous man to the business interests of the country?

And here are some of his urgent recommendations which he did not have time to concrete into law before he left the White House:

The reform of the banking and currency system. Is there anything in this dangerous and hurtful to business?

An inheritance tax and. an income tax. Is there anything in these that is dangerous and hurtful to business?

The passage of an employers' liability act to meet objections raised by the Supreme Court. Is there anything in this dangerous and hurtful to business?

A postal savings-bank act. Is there anything in this dangerous and hurtful to business ?

A parcel-post act. Is there anything dangerous and hurtful- to business in this?

A recommendation for an anti-trust act that will make clear what a business man can and cannot do lawfully. Is there anything in this dangerous and hurtful to business? Wouldn't something of the sort clarify the situation 'and be a great deal better for business than the present indefinite, uncertain Sherman Law?

Legislation to prevent overcapitalization, stock-watering, and so forth, of common carriers. Is there anything dangerous and hurtful to business in this ?

Legislation compelling incorporation under Federal laws of corporations engaged in interstate commerce. Is there anything dangerous and hurtful to business in this?

CHANGED CONDITIONS OF TODAY

To get an idea of what Mr. Roosevelt would mean to the business world if elected again, it is well first to get a clear idea of what his former Presidency meant to the business world. It does not follow, however, that his new administration would be like his former. The conditions would not be the same, neither would Mr. Roosevelt himself be the same. He is four years older, and with increasing years come increasing consideration, increasing conservatism, greater poise, and greater deliberation.

These are bad when the man starts with an inefficient horse-power, with more balance than energy, with more caution than aggressiveness. But in a man like Roosevelt, who is supercharged with energy, whose horse-power is twenty times greater than that of the normal man, the ripening process of experience that comes with added years, if not too many, means increased wisdom and increased usefulness.

A man must be true to himself. He cannot be aggressive on the one hand and judicial and inert on the other. Roosevelt does things, is the embodiment of action and energy. And in his aggressiveness he not infrequently expresses himself in a way that pictures him as more radical than he is in fact -- more radical than he ever is in his administrative acts. In all that he does, and in the outworking of his ideas, he is much the greatest and soundest conservative of all the big progressives of the country. And eighty per cent of our people are today progressives -- a force to be reckoned with.

A POST THAT CALLS FOR A STRONG MAN

Our system of government, with a nation grown so big, calls for a man in the White House of the greatest measure of executive and administrative qualities. NO man can make a dent in that situation unless he be specially endowed with these abilities from God Almighty.

Executive and administrative genius are just as distinct gifts as music and art and song. The orator and the poet and the logician of renown are born orator, poet, and logician. They can't be made on this earth. No university has ever yet made one, and no university ever will make one.

In Germany, when a city wants a mayor it searches the country over for a mayor, searches for the man highly endowed with the qualifications for executive work, supplemented by training and experience. Local pride and politics cut no figure in choosing a mayor in wisely governed Germany.

We should do well in this country, when we want a President or Governor or mayor, to follow the German custom and go after the man fitted for the job.

The business of the country is now in much closer relation to the government than ever before. Indeed, it is so much under the control of the government that the latter, in a way, has the dominating voice in the board of directors of our railroads and all our great corporations.

We cannot go back to the old system of individual ownership, with its unstable prices, unwise competition, and greater cost and greater waste. We must so do business that the cost will be at the lowest possible figure, and then, as a government, we must see that the people benefit by this lowest cost. This is the governmental control we must have; a wise, just, helpful control -- helpful alike to our industries and to our people.

Business to-day timid. It doesn't what it can't do.

We have the natural resources, we have the people of brains and energy and courage, and we have the money with which to resume the leading place among the nations as an industrial and commercial country. All we need to bring this about is a wise policy on the part of the government -- a policy that will not seek to strangle business, but to help business, and in helping business to help the money-earner and the consumer, to help all the people, of whatever calling and of whatever position.

is unsettled, halting, and know what it can do or

OUR NEED OF FIRST-RATE LEADERSHIP

To bring order out of the present chaotic governmental methods will require a very strong man as the leader and general manager of the country's business. I don't believe we can reasonably hope for anything from Washington of at all a satisfactory nature unless we have such a man -- a man who can command results, a man who knows what we want and will see that we get it.

Is there in the whole country another man who so measures up to this requirement as Theodore Roosevelt? If there be, I do not know who it is.

When we had a little bit of a republic, with small industries and narrow vision, our scheme of government made it possible to get on after a fashion with an indifferent man in the White House. But with so big a nation as we have now, and with all the local interests of the country clamoring for part of the "swag," it is well-nigh impossible to get through Congress the unselfish, patriotic legislation that we need, except we have in the White House a man who commands results. And such an executive is likewise essential to the efficient handling of the official departments, which need firstrate leadership quite as much as does big business.

Wall Street has bitterly criticized Mr. Roosevelt for his mistakes -- Wall Street, which itself, mind you, holds the record for mistakes. In discussing Mr. Roosevelt's mistakes, it discreetly says nothing about his successes. There is a lot of hypocrisy, a lot of dishonesty, in all this.

As for myself, let me say I am glad that Mr. Roosevelt is human enough, big enough, to make mistakes. If he were not, he wouldn't be good for anything. The man who makes no mistakes never accomplishes anything really worth while. To get an accurate measurement of a man -- to know his real worth -- we must compare his good work with his bad, his successes with his failures. If the average shows strongly in his favor, he is the man for the job; if the average is against him, he isn't the man for the job.

Roosevelt's mistakes as President were trivial as compared with his brilliant and far-reaching achievements. Roosevelt's mistakes as President were relatively fewer, I should say, than the mistakes of any one of our great captains of industry -- fewer than those of Morgan, Rockefeller, Carnegie, Jim Hill, or any other man whose financial undertakings span the world. They all make mistakes, both in utterance and acts. If they were to try to square themselves to a policy of no mistakes, their usefulness as great leaders in the business world would be at an end.

Far better the mistakes of progress than the inertia of the sure thing.

That Mr. Roosevelt, if elected, will restore confidence to the business world, I am certain. That he will point the way to reawakened commerce and become the leader of revivified prosperity, I am equally certain.