Theodore
Roosevelt promoted a public relations image of being a trust buster. He
faced political pressure to act against the trusts. In fact, TR was
not a trust buster. Roosevelt held a consistent position: there was a power
larger than the power of even the biggest, wealthiest business organization. That
superior power was the power of the people, and of the public interest, as represented in
the presidency in particular and the executive branch of the federal government in
general.
Roosevelt believed there was a "public interest" that skilled leaders, such
as himself, with the aid of expert advice, could ascertain and apply to the affairs of
business. In applying the "public interest" to "the trusts," TR
was surprisingly consistent for a politician.
Roosevelt believed that when a business grew big it was not necessarily bad.
Bigness might mean simply that a firm had bested its rivals through superior efficiencies,
prices, and service. Having superior efficiencies, prices, and service might well
require bigness, as in the case of a railroad providing service through an extensive
system across a wide territory.
The point for Roosevelt was that the government should enforce a "rule of
reason" on business. If a firm grew through reasonable means, then the
government should not attack it. However, if a firm grew through unfair practices,
then government should enforce its power in order to protect the innocent. The Democrats accused Roosevelt of sparing the trusts to win campaign
funds from big business. These attitudes came to play during Roosevelt's
administration, first in establishing the Bureau of
Corporations and then in the Northern Securities case.
Railroad regulation was an example of the sort of regulation that Roosevelt believed
was required for business in general. In 1886 Congress had created the Interstate
Commerce Commission to regulate the railroads, but had not granted the ICC much power.
Under Roosevelt's leadership, Congress enlarged the power of the Commission.
In 1903, the Elkins Anti-Rebate Act forbade the carriers from giving large and powerful
shippers rebates from the published freight tariffs. This law allowed the railroads,
in effect, to administer their rates. The ICC enforced this statute.
In 1906, the Hepburn Act granted the ICC the power to set maximum rates. No longer
could the railroads simply enforce rates without challenge. Now shippers could
challenge rates before the Interstate Commerce Commission and hope that, after careful
investigation, they might be lowered.
Both these statutes proved popular. They also were something of a
model for what Roosevelt thought was appropriate for all businesses. He intended the Bureau of Corporations to provide a similar function
for regulating all firms doing business across state lines.
Continue with pages on Roosevelt as a "trust
buster"
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