I WAS talking, not a great while ago, with a broker who had just returned from a trip through New England. “It was an odd experience," said he, “to stop off at one little city after another and see mills and factories running and office buildings full of people. We Wall Street men are likely to forget that business is going on all the time in other parts of the country, and that men are making and losing their little fortunes independently of us." There you have the Wall Street view.
When Thomas W. Lawson talks about “the System," he is both right and wrong. When an officer of the National City Bank explains that the Rockefellers realty control separate fortunes, and are frequently found on opposite sides in a fight, he is both right and wrong. A permanent and tight organization of Wall Street cutthroats is incredible on its face; for, in the Street, every man is an individual and every alliance is temporary and for gain only. To the man who sees continual warfare all about him--man fighting man, and faction fighting faction--all talk about a “system" sounds absurd.
The explanation lies in the Wall Street view. Men are very human, there. They are not all diabolical brigands with bloody handkerchiefs about their necks and knives in their teeth. Take E. H. Harriman, organizer and manipulator of gigantic deals, the dominant figure, today, in western railways. His life is devoted to the development and consolidation of great railway systems. Whether he knows it or not, he has been caught up and whirled along on an apparently irresistible tendency which points toward the ultimate consolidation of all the Pacific lines. James J. Hill is riding the same tendency. George J. Gould is close behind. We may brush aside all the patchwork of apparent agreement; for, sooner or later, unless certain other sweeping forces intervene, these men or their successors must fight it out. Of the three, Hill is sanguine, expansive, and given to dreams; Gould is hampered by a name which has never yet smelled of solid things well done; Harriman alone is silent, inscrutable, and tireless.
Now it is a tremendous thing to be the czar of Union, Southern, and Central Pacific, wire manipulator in Alton, and uncle to Northwestern and Santa Fe—and others, a long list. Emperors have now and then been less. It is not unnatural that Czar Harriman, a very human man, should be unable to see very much of what is going on beyond the boundaries of his domain. It is quite unlikely that he keeps up any elaborate intelligence system—that, in fact, he is in close touch with popular feeling. Czars never fully understand the people — if they did, they would abdicate. His view is realty broad, and it is perfectly logical. That is what is the matter with it, for no half-baked view of life and activity is more misleading than your perfectly logical view. The great currents of human life will not freeze into fixtures.
Wall Street is the capital of the Empire of Dollars. Like all other capitals, it has its intrigues, its favorites, its duels, its cabals, and its camarillas; and, like all other capitals, it gives its color to those who spend their lives there. It has even a sort of patriotism—the “wolf honor" I have mentioned in an earlier article—which brings its citizens together, at times, in defence of the dollar and of property rights. Sum up these things, and you will have, again, the Wall Street view; and what we have now to consider is whether this view does or does not coincide with what we like to call the American view.
“Whether he knows it or not,” I have said, in effect, “Harriman is being whirled along on a great tendency.” Like Hill and Gould, he is fighting for the control of all the Pacific lines—the Great Northern, the Northern Pacific, the Union and the Southern Pacific, and the Santa Fe. It is not really likely that any of them, perhaps excepting Harriman, fully understands what is going on. In so big a battle no general can see the whole field and relate all the remote skirmishes in the light of history and humanity. These men think they are fighting for different things - Hill, perhaps, to hold his own and develop that far-eastern trade he likes to talk about—Gould to place the keystone on his arch so that it may not fall of its own weight to the ground—Hamman for what he can get. There are other influences, too, such as the chance of immediate profit, the pride of achievement, and the lust of the game. Of the three men, Harriman has the most Napoleonic mind. He certainly has no inhuman wish to crush men or cities, and he probably regards the injury to certain helpless communities which results from his arbitrary control of rates much as Napoleon regarded a few thousand men left in the trenches to their fate. Pie might feel a momentary regret, but it is necessary to his scheme. As a man, perhaps, he would hesitate; but a czar in the world of dollars must not bother with humanity. Right or wrong he has built up his perfectly logical structure. Whether he likes it or not he must conform to its logic, or it will crush him precisely as he and it have crushed others.
As would be expected, such a mighty and logical force, working in a vastly mightier world—a world which persistently refuses to stay fenced within the limit of man’s reason—has its troubles. The chief of these troubles, while in a sense but one, may be treated under the two prominent heads of “The People” and “The Law.”
The law, to take the lesser obstacle first, is something of an annoyance to Harriman, Hill, and Gould. For one thing, it leads to large expense. In order to protect themselves from the ravages of legislating bandits, they feel compelled to buy them up. Then such laws as are already on the books must be got over or under or through, and this means the purchase of the highest-priced men in the legal market. The methods of our Wall Street friends are too familiar to call for enumeration here. It is enough to say that in the popular mind our laws seem to have but a secondary influence on railway consolidation. And, really, our scheme of law, built up laboriously through the centuries to cope with certain conditions, has not yet shown itself equal to the bewildering new conditions which have grown out of the possibilities of great corporations. In the eyes of a people ripe for action, who have seen the subtle triumphs of Rockefeller and Hill and Morgan and Harriman, the law has failed. They have seen court after court baffled in the attempt to thread a way through a maze of related companies; they have seen these companies grow in size and strength, in spite of an endless succession of fierce attacks; they have learned that "the big man," shielded behind his corporate web, can not be sent to jail like the poor man; hence they are losing patience. Is it odd, after what they have seen of Standard Oil—after what they have seen in this very field of railway mergers — that they look for no final check from the law?
The second obstacle, the people, is a different thing. It is the one element of uncertainty in the game which we are all—willy nilly—playing. For one thing, the grand dukes have a way of losing their heads when they talk about the people. Either they misunderstand us, or they throw things at us, or they fail altogether to see that we are here. Melville E. Stone, the head of that enlightened body, the Associated Press, delivered an astonishing speech at a recent dinner. He said, in effect, that we are too much given, in this country, to attacking solid and respectable things, and that publishers are free to hire irresponsible and anonymous writers and let them loose against anybody, low or high. I have heard another man, a publisher of wide experience in this very field, say: “We all know perfectly well that we can hire any number of skilled writers who will say anything we like if we will pay them enough."
What is all this agitation against the trusts and the railroads? What does it mean when the Federal Government indulges in a fruitless and somewhat undignified pursuit of James J. Hill? What does it mean when State after State threatens the railroads, the Beef Trust, or Standard Oil, or when President Roosevelt considers a special session of Congress for his railway rate bill? What does it mean when the entire country, even to a part of New York City, hums and buzzes with “anti-corporation” talk? What does it mean when monopolists say, as one said to me, “You would think, from the racket, that we are all brigands. Now, I don’t feel like a brigand.” We may fairly relate a great many apparently different things—the inspiring outbreak of Philadelphia against the Gas Ring, the widespread protests against the relation between politics and business, the surprising feeling against tainted money, and the exposures of the magazines. It has lately been evident that Mr. Roosevelt pretty well understands this great popular movement, and voices it. What is it, then? Is it mere agitation, stirred up by dishonest writers? Or, on the other hand, have the American people turned socialistic?
Yet the country is blazing with anger and determination. Let any complacent and conservative New Yorker travel about as I have done this year, keeping his ears open everywhere, on railway trains, in hotels and offices, on the streets, and wherever else men come together, in Chicago, St. Louis, Pittsburg, and all through the great heart of the country, where the Lincolns come from, and he will hear a steady murmur which will either frighten or elate him. Perhaps he will be astonished to see that the murmurers are not "socialists” at all; he will find them good healthy Americans, who believe in private wealth and in the idea of competition. He will find them, rich and poor alike, Republicans and Democrats. If he be an observant New Yorker, traveling with an open mind, he will return home with the startled conviction that the American people mean business.
This unrest is, then, right in plain sight. It is bursting out through the crust of conventional ideas in a dozen States, as volcanic fires burst through the placid crust of the earth. The living magazines are trying to give it voice. Mr. Roosevelt feels it stirring in his breast. Lawson says he did it. Whatever it is, and however it has been brought about, it is unmistakably the great popular movement of our day. If it is not ‘"socialism," what is it?
Something less than nine hundred years ago a man who had royal blood and a splendid audacity in his favor came over from France and whipped the English people into subjection. His point of view—he liked to be known as William the Conqueror— bore certain striking resemblances to the points of view of our Rockefeller the Subtle and Morgan the Wizard and Hill the Genial; he believed that the laws of God and man entitled him to hold anything of which he was strong enough and cunning enough to possess himself. The English people stood his ideas about so long, and then they forced a descendant of his, one John, to sign the great charter, and the pressure on his son, Henry III., established a Parliament and gave to the people the control of the country’s finances—always the main thing.
So much for William and his tribe! The English people would not stay conquered. A few hundred years later Elizabeth found it profitable to grant certain monopolies and special licenses to companies. These monopolies were petty affairs beside the great corporations of to-day; but the Anglo-Saxon has never taken to the monopoly idea, and, in the face of a great outcry, Elizabeth annulled the grants. The English people forced a powerful and capricious Queen to eat her words.
The curious thing is that the rulers of the Anglo-Saxon, whether royal or financial, have rarely been keen enough to recognize this peculiarity. Charles I. could not see it, and the people went so far as to cut off his head. A later kinsman of his failed to understand it, and they quietly, and with great self-control, banished him from throne and country. George III. forgot it, in dealing with certain colonies of his, and the colonies simply cut loose, set up for themselves, and decided to form a nation in which the real power should be vested in the whole people, and not at all in individuals.
Now that a very few individuals have been able to gather into their hands an extra-governmental power —particularly now that they propose to cap an amazing structure with the final control of all the means of transportation—they are a little late in the day if they expect to mislead the people beyond a certain outer limit of inertia and good nature. Talking solemnly about property rights will not help very much, because, when he is really aroused— when lie is stirred to action by one of those curious moral impulses which now and then possess him— the Anglo-Saxon has never bothered to consider the rights of property.
Every step forward in the history of our race—the great charter, the Cromwell episode, the American Revolution, or the Emancipation Proclamation, to take mere typical instances—has been at the expense of “property.” And men who, in a superstitious age, will attack that most sacred theory, the divine right of kings, are hardly likely to worry, in a pinch, over the rights of corporations.
Accusing the people of “socialism” will not frighten them, because, taken by and large, they are not socialists, and they know it. The Anglo-Saxon likes to be led. He likes to point with pride to his rich neighbors. He likes to submit to a certain healthy authority. But he demands “a square deal.” He is likely to get excited when his king or his boss or his employer or his railway magnate goes too far; and, when he is excited, he has a remarkably effective method of getting his demands enforced—the thousand years just past have shown that—and all this whether you like it or not.
I have chosen E. H. Harriman to illustrate the railroad side, because he seems, on the whole, the most striking type of all the railroad magnates. His power is really autocratic. I have drawn the word “czar,” as applied to his personality, not from western farmers, but from his very Well Street associates. At the moment of writing, Hill seems in the ascendancy, but no close observer of this thrilling fight can afford to ignore Harriman very long. He runs deep. His picture is never published in newspapers or magazines except for a rare and stealthy snap-shot taken on the street. He does not talk for publication. I recently made an effort to talk with him and get his views on the subject of western railroad development. He refused unconditionally to see me.
This would be a trifling matter if it were not typical. Wall Street is where the spiders are—and spiders never buzz. Harriman is a good man—better than certain other millionaires because there is about him nothing of the Pharisee. His friends think of his quiet kindness. His business associates respect and admire him with something close to awe. He is deeply interested in boys' clubs and in good roads. Some years ago he organized a scientific party, and took it to Alaska, for study on the ground. He is honest even about his railroading, because, as I have said, he sees only the wonderfully complete logic of the structure he is building. The people, with their laws and their Federal Government, seem to him vague, inconsiderable things. Therefore he is unable to see why any mere individual or any mere periodical should meddle in his private affairs—the railroads. He does not consider it worth while even to conciliate the people, for he can not see where the people come in. This control of the railroads is a mighty weapon. He proposes to swing it as he chooses—he, one man, Edward H. Harriman—and, if the blundering public wishes to keep safe, it would better get out of the way; though he will be very careful, and will try to swing economically and soundly. Least of all does he see that the blundering public has a weapon of its own, bigger than his, and that this public has a very heavy-handed way, now and then, of cutting free.
Harriman came into real prominence, in 1899, when he bought the Alton Railroad for forty-odd millions, organized a railway company to lease the railroad company, sold thirty-three to thirty-five million dollars’ worth of new bonds and preferred stock, and retained the absolute voting control at a total cost of about nine millions—or a majority of the voting stock at a cost of less than five millions. This was a very pretty manoeuvre, and it landed him in the governing chair of the Union Pacific.
Within a year or so after this he had acquired Southern Pacific and started after Northern. The panic of May, 1901, resulted, from which Harriman emerged with seventy-eight millions of the one hundred and fifty-five million dollars’ worth of stock of the Northern Pacific—a clear majority. Hill and Morgan promptly organized the Northern Securities Company, which took over about all the stock of both Northern Pacific and Great Northern. Then came the crusade of the separate States and of the Federal Government against this monster holding company, and finally the Supreme Court decided that it must return the stock to the original holders.
At this point Morgan executed one of his most brilliant coups. Instead of returning the original stock to its owners, he made a pro rata division, giving each holder a fixed per cent, of both Northern Pacific and Great Northern shares. This reduced Harriman from the position of majority holder in Northern Pacific to that of a minority holder in the two railroad companies. He protested, and the case went up again to the Supreme Court. Harriman claimed that Northern Securities merely held the original stock in trust—Morgan, that that holding company had bought the shares of the two roads outright, paying for them in shares of the holding company, and that it was therefore free to liquidate through distribution of its assets pro rata. Harriman wanted to get back the identical shares that he had put in. His lawyers claimed, among other things, that on the pro rata plan Hill and Morgan would control both roads and so defeat the purpose of the court in dissolving the merger. They overlooked the fact that, if their plan should be accepted, the Harriman control of Union and Northern Pacific would be much easier to prove than Hill’s control of the two Northern lines could ever be. The court had really but a choice of evils, and it chose Hill, who at once ousted the entire Harriman group from the Northern Pacific directorate and elected some of his friends, among them his own son, in their places. Thus, after these two manipulators have played football with the northwestern lines, and the legal power of the Federal Government has exhausted its ammunition in “defeating” them, it appears, now that the dust of the conflict is clearing away, that all the Federal Government has been able to batter down has been the name of the “Northern Securities Company.” The real result of the Government’s action has been to restore Hill to his former undisputed control of two parallel and competing railroads.
Harriman undoubtedly lost ground in this skirmish. But it is well to remember that, before his defeat, he was supreme in three great lines from the Middle West to the Pacific, besides controlling strong holdings in such roads as Alton and Illinois Central and the Vanderbilt lines. After the defeat he is still seen in control of Union and Southern Pacific, and he is still a strong minority force in Great Northern, Northern Pacific, and Santa Fe. It would be impossible to attack a single Pacific railroad without coming into contact with Harriman.
I can, perhaps, best sum up the two conflicting notions—the Wall Street idea and the Anglo-Saxon idea —by quoting two representative men. The Wall Street man put it in this way: “You are right about this widespread unrest among the people, but you forget how big the men are who manage the corporations. When they see that the people out there are getting excited"—this with an expressive gesture—“they draw in a little—just ease up a bit; and then they push out a little“—with another gesture—“over here. It’s elastic, you see—it yields to pressure; but, when the pressure is removed, it springs back. No, these men know what they are about—they will never press harder than the people will bear."
The other man is a westerner and manager of a large industry—he might be called a small capitalist— but, he has kept his eyes open to what is going on about him. “Those fellows," he said, referring to the magnates, “are riding to their end. Just wait until some politician pops up who is really big enough to lead the people—there’ll be something doing, then. Take my word for it.”
Now what is it, exactly, that the great consolidators have in view? To fall again into quotation, let me repeat in part a talk I had last winter with a railroad official who makes his headquarters in Chicago.
“I expect to see the day,” observed this man, when dinner was over, “when all the railroads west of the Mississippi will be operated under a single management. The chaotic way we do things now is ruinous. All they are waiting for is to see which management it will be. Just for an illustration, take the case of our limited train to the coast. We run it as an advertisement, to keep the road in the public eye. We haven’t the most direct route, and therefore we have really no business competing for through passenger traffic. Why, we gave Pullman carte blanche in building the train! It cost nearly a quarter of a million.“
“So much as that?“
“Yes. You see the train has to be duplicated eight or ten times for so long a run. Now, with all the systems under one management, only one line, the most direct, would run a through limited train. By saving the loss on all the other lines, they would be able to reduce the fare to California forty per cent. Each of the other lines would, in the same way, develop only the region for which it is the most convenient route. Can’t you see what a saving that would mean?"
“Yes,“ I replied, “but you are proposing to give to a single individual, or group of individuals, a tremendous, an incredible power. Do you think that the man exists, under God’s heaven, who could be trusted to wield it?”
“I think I know what you mean,” he said, slowly and thoughtfully; but, in attacking the present system of railroad management, you fellows forget one thing—you forget that it is this very system which has developed our country as no country was ever before developed. And, when you say that a man like—well —Mr. Hill has too much money and too much power, you forget, I think, that he has earned it—every bit of it. He has built up the entire Northwest. What if he is a boss up there ! —hasn’t he a right to run that section ? ’ ’
James H. Eckels said much the same thing, in an after-dinner speech, a few months ago. The people forget, he said, how much the railroads have done for them.
Now, really, do the people forget? Have they neglected to reward these great captains for their splendid efforts? Such a question as this may be considered only in the light of our treatment of all the great captains who have contributed to our development. There have been a good many of them since George Washington. How have we recompensed them?
Let us begin with Washington himself. It is hardly necessary now to enumerate his services to this nation; I think it will be admitted that he did a great deal. The impression is strong in my mind that Washington himself, and his friends and descendants, felt that lie was liberally rewarded with a few years of the Presidency and an abiding sense of duty done. The idea of making a king of him and giving him the ownership of the thirteen States made little headway, and soon died; for, to the simple osuls of that day, it was something to contribute to the birth and growth of a nation. Merely to serve one’s country was worth living for. Mr. Harriman and Mr. Hill and Mr. Gould are giving their time to the development of the West, and they and their friends and followers feel that the only due recompense we can make them is to give them the control of this West. Doubtless the time of such men as these is of the greatest value. But men can give even more than their time. There was Lincoln, for example, who gave his life. He directed affairs which were really as large, in their primitive way, as the affairs of the Union Pacific Railroad. U. S. Grant, too, gave some very valuable time to his country, and by way of recompense this Wall Street we have been speaking of got his small savings away from him and looked on apathetically while he wrote, propped up on his deathbed, the memoirs which were to provide for his family.
It can not be that these gentlemen seriously urge their claims to the right to pocket the Louisiana Purchase and the Coast States on the ground of services rendered, because the nation really expects certain services of its citizens. It was as a matter of right that our country demanded the lives of a million men in the Civil War. It was as a matter of right that she sent Farragut into Mobile Bay. Even the, old hereditary notion lay dormant until it was revived in the Vanderbilt and Astor and Gould and Rockefeller and Hyde families. Why, then, should not Hill and Gould and Harriman, since their talents lie that way, do something to develop the Far West? Other men have done more, and done it for nothing. But the nation needs such men, precisely as it needs its Lewises and Clarks, its Custers and Shermans, its Whitneys and Edisons, or its Hawthornes and Emersons.
I have set down this opinion with full and humorous appreciation of how vaguely absurd it must sound to Edward H. Harriman and George J. Gould, for here we have the point of divergence between the Wall Street idea and the Anglo-Saxon idea. Wall Street can not see sentiment and moral conviction until they come to be reflected, in some roundabout way, in the price of stocks, and it loses sight of them when they cease to influence the price of stocks. Wall Street has little sense of humor. It will advance, as a justification of its magnates, their wonderful courage, never observing that, in the same breath, it is justifying the burglar and the gambler and the prize-fighter. What Wall Street can not see, from the summit of its very high and very logical structure, is that it is precisely sentiment and moral conviction on which Anglo-Saxon civilization is based, and that the Wall Street idea, ever since the days of the Jews, who first formulated it, has lost in every direct conflict with this immensely bigger and more practical idea. The Empire of Dollars is not altogether a noble spectacle. We are not thrilled at the mere thought of those Venice bankers who “financed” the Crusades. We do not like to think of those Wall Street manipulators who tried to corner the gold supply during our Civil War, when the nation needed gold.