The Progressive Trustbuster:

Theodore Roosevelt’s Fight For Economic Equality

Nicole Golownia

Senior Division, Historical Paper

1,692 words

"No man is above the law and no man is below it; nor do we ask any man's permission when we

require him to obey it."

-Theodore Roosevelt, Third Annual Message to Congress 1

Industrial America at the Turn of the Century

By 1900, capitalism had rapidly transformed the United States into an industrial

powerhouse. The first transcontinental railroad had been completed in 1869. Only three 2

decades later, the nation had nearly two hundred thousand miles of track with five

transcontinental railroad systems. The world’s first successful oil well had been drilled in 3

Pennsylvania in 1859. By the turn of the century, John D. Rockefeller’s Standard Oil Trust 4

dominated the world’s petroleum markets and controlled nearly 90 percent of the nation’s

refineries. Large-scale production in burgeoning factories naturally reflected the bustling 5

country’s booming population.

Only decades after the Civil War, America’s tremendous industrial growth presented a

new battle--that is, one between business and government. The public feared trusts, legal bodies

that held stock in many different companies, held undue influence over federal affairs. Trust

tycoons could “presume that they were sovereign equals of the U.S. government.” Trusts 6

enabled sudden changes in a product’s price and quality with little regard to rules of supply and

demand. Acting as monopolies, powerful trusts could lower their prices to drive out market

competitors and then hike prices up even higher. Although Congress had passed the Sherman

1Third Annual Message to Congress, 1903 2Library of Congress, accessed 2017 3Library of Congress, accessed 2017 4PRI, accessed 2017 5Library of Congress, accessed 2017 6John Cooper, accessed 2017

1

Antitrust Act in 1890, its vague language led to narrow judicial interpretation, as its only

effective use was against trade unions. Thus, most suits filed under the Sherman Antitrust Act 7

against industrial monopolies were unsuccessful.

A new wave of muckraking journalists exposed trusts as corrupt capitalistic mutations,

raising the public’s consciousness of unjust predatory tactics. Lincoln Steffens, for example,

described in his collection of articles “The Shame of the Cities” that “he is a self-righteous

fraud, this big businessman. He is the chief source of corruption.” Victimized laborers resented 8

the growing economic disparity between the rich and the poor. En masse, the public questioned

the legitimacy of American democracy.

Roosevelt Leads Progressive Reform

From this public pressure rose a movement that proactively worked to create a more

productive and responsive government. Deemed Progressives, these reformers urged residents to

register to vote, support economic reform, and correct social injustices on a local scale.

Becoming president after McKinley’s assassination in September of 1901, Republican Theodore

Roosevelt emerged as a national spokesperson for the Progressive movement. Roosevelt did not

share McKinley’s conservative views on laissez-faire capitalism. Instead, Roosevelt recognized 9

an ever-increasing role for government in the economy, namely to oversee large trusts that failed

to protect public interest at a time of great industrial advancement. Stated Roosevelt, “Our aim 10

is not to do away with corporations; on the contrary, these big aggregations are an inevitable

7Holt McDougal’s The Americans, 2012 8The Shame of Cities, 1904 9Miller Center of Public Affairs, accessed 2017 10John Cooper, accessed 2017

2

development of modern industrialism.” Roosevelt did not believe all trusts were bad, but rather 11

believed political revisions were necessary to achieve fair prices and a competitive market for all

involved. Roosevelt approached trusts with confidence in his “Square Deal”, a domestic

program partly aimed to provide consumer protection for all classes. Asserted Roosevelt, "We

demand that big business give the people a square deal; in return we must insist that when

anyone engaged in big business honestly endeavors to do right he shall himself be given a square

deal." By requiring companies to follow antitrust legislation, Roosevelt reformed corporate 12

America to reflect his vision of economic equality in the United States.

Roosevelt implemented various administrative positions soon after his inauguration in

1902 to build federal antitrust support. First, he signed a bill creating the Department of

Commerce and Labor, the first new Cabinet department since the Civil War. Roosevelt 13

described the department’s purpose in his first annual message to Congress as “securing our

business interests on a safe basis...while scrupulously safeguarding the rights of wage-worker

and capitalist.” Second, Roosevelt arranged to include the Bureau of Corporations within the 14

department. The Bureau was an investigatory agency that identified violations of existing 15

antitrust legislation, especially monopolistic practices. Now, with a strengthened federal 16

administration in tow, Roosevelt had the necessary backing to launch a total of 44 vigorous

lawsuits against what were determined to be destructive business conglomerates, among which

was the Northern Securities Company.

11Second Annual Message to Congress, 1902 12Letter to Sir Edward Gray, November 15, 1913 13PBS, accessed 2017 14First Annual Message to Congress, 1901 15PBS, accessed 2017 16PBS, accessed 2017

3

Northern Securities Company Dissolution

In 1902, just five months into his presidency, Roosevelt made newspaper headlines when

he ordered the Justice Department to sue the Northern Securities Company in federal court, the

first government antitrust case filed against a high-profile combination. Railroad magnate 17

James J. Hill and Wall Street financier and investment banker J.P. Morgan originally created the

Northern Securities Company to gain access to Chicago for Hill’s lines from the Twin Cities. 18

This northwestern railroad monopoly quickly acquired the majority of shares in the CB&Q, the

Northern Pacific, and the Great Northern railroads. Morgan figured he could negotiate himself 19

out of the suit. “If we have done anything wrong,” Morgan instructed Roosevelt, “send your

man to see my man and tell him to fix it up.” Fiery Roosevelt countered, “That can be not be 20

done...no man, no private interest can presume to be equal to the government.” 21

On March 14, 1904, the Supreme Court ruled 5-4 in favor of the federal government to

dissolve the Northern Securities Company on the grounds that the company violated the

Sherman Antitrust Act by restraining trade. The Court deemed its practice of eliminating market

competitors by buying them out directly or temporarily lowering prices in a given region illegal.

A seminal decision, the Court established that the constitutional guarantee of liberty did “not 22

prevent Congress from prescribing the rule of free competition for those engaged in interstate

and international commerce.” 23

17President’s Action Shocks All Marts, 1902 18Theodore Roosevelt Center, accessed 2017 19LINFO, 2004 20Miller Center of Public Affairs, accessed 2017 21Miller Center of Public Affairs, accessed 2017 22Northern Securities Company vs. The United States, 1904 23Northern Securities Company vs. The United States, 1904

4

Indeed, Roosevelt’s victory earned him a reputation as a tenacious “trustbuster” and

asserted his executive power over business institutions, as various political cartoons indicated

(see Appendix A). In fact, in a telegram to Roosevelt, retired Rough Rider William H. H.

Llewellyn declared the case the “most important event since the Civil War, affecting the interest

of the American people.” However, industry tycoons did not agree, as they blamed Roosevelt 24

for giving no intimation and causing unnecessary panic. Stated the New York Herald, “The

feeling of the great financiers, of whom Mr. Morgan is the head, against the President is

represented to be very hostile...they are now trying to show the President that he is behaving in

an eccentric fashion.” Other critics argued Roosevelt was acting out of his jurisdiction, 25

providing the federal government with a dangerous amount of social power. Yet these 26

comments had little effect on Roosevelt. Continued the Herald, “[Roosevelt] takes the position

that he was entirely within his province and that there are other considerations besides those of

Wall Street.” Laborers championed his unapologetic spirit, and he quickly gained popular 27

support.

Standard Oil Dissolution

Because of Roosevelt’s growing popularity, he ran for presidency in 1904 while focusing

his campaign largely on trust regulation. Another target for Roosevelt was Standard Oil 28

Company of New Jersey. Founded in 1870, John D. Rockefeller’s holding enterprise controlled

24Telegram from Llewellyn to Roosevelt, 1904 25 Financiers Fail to Move Roosevelt, 1902 26Kathleen Dalton, 2002 27Financiers fail to move Roosevelt, 1902 28Rasoul Sorkhabi, Ph.D., 2011

5

almost all oil refineries in the country. The company spied on other companies’ transactions, 29

artificially sold cheaper petroleum products, or simply bought out rival refineries such as Hanna,

Baslington and Company, resulting in monopolization of the industry (see Appendix B). 30

Journalist Ida Tarbell articulated the company’s dishonest methods of eliminating competition,

writing that “Mr. Rockefeller has systematically played with loaded dice, and it is doubtful if

there has been a time since 1872 when he has run a race with a competitor and started fair.” 31

Roosevelt recognized this, so when Standard Oil submitted a major monetary contribution to

Roosevelt’s presidential campaign, Roosevelt ordered the money’s return. Still, wealthy 32

capitalists contributed more than two million dollars to Roosevelt's campaign, as they preferred

an "unpredictable head of a predictable party" in power than a "predictable head of an

unpredictable party." On November 18, 1906, after being elected to his own term, Roosevelt 33

publicly ordered the Justice Department to bring suit against Standard Oil Company of New

Jersey and its affiliated companies, once again under the Sherman Antitrust Act.

In 1911, after years of litigation, the Supreme Court ruled the company an illegal

monopoly and called for the dissolution of the company into 33 smaller geographically

determined ones. The consequential competition actually spurred greater innovation and 34

quicker expansion of the oil industry. Oil, which fueled the automobile in the form of gasoline,

gained momentum with Henry Ford’s new models. Within a year of the dissolution of 35

29Rasoul Sorkhabi, Ph.D., 2011 30Holt McDougal’s The Americans, 2012 31McClure’s Magazine, Volume 23 p. 670, 1904 32Miller Center of Public Affairs, accessed 2017 33Miller Center of Public Affairs, accessed 2017 34Standard Oil Company vs. United States, 1911 35Rasoul Sorkhabi, Ph.D., 2011

6

Standard Oil Company, the stock market value of its spin-off companies doubled. Although 36

Roosevelt was no longer in office during Standard Oil’s dissolution, as he had refused to run for

another term, he celebrated the Supreme Court’s historic decision.

Lasting Legacy

Even after his time in the White House, Roosevelt’s unprecedented antitrust endeavors

continued to have profound influence on successive presidents. William Howard Taft, for

example, busted 90 trusts in a four year term, although he never emerged from Roosevelt’s

shadow. Like Roosevelt, Woodrow Wilson implemented an administrative agency to build 37

federal antitrust support. The Federal Trade Commission, like the Bureau of Corporations, had

the power to investigate potential violations of federal business regulations. Wilson’s 38

administration strengthened Roosevelt’s cherished Sherman Antitrust Act with the Clayton

Antitrust Act of 1914, which prohibited corporations from acquiring stock of a company if doing

so created a monopoly. 39

Roosevelt’s considerable skill at compromise ultimately shifted the federal government’s

relationship with big business, transitioning corporate America into a more fair and equitable

market than ever before. With a new power associated with the presidency expanded, the federal

government could better and more widely enforce antitrust legislation such as the Sherman and

Clayton Antitrust Acts, bolstering them into cornerstones of United States antitrust law.

Roosevelt forever altered the role of the presidency, utilizing his personality and popularity to

36Rasoul Sorkhabi, Ph.D., 2011 37Holt McDougal’s The Americans, 2012 38Holt McDougal’s The Americans, 2012 39Clayton Antitrust Act of 1914

7

stand against monopolistic trusts and become a true steward of the people. Roosevelt’s

progressive legacy and vehement antitrust vision shepherded his country into the 20th century,

paving the way for a great economic expansion reaching across social strata that promised a

robust economy not just for the wealthy capitalist, but for every American.

8

Appendix A

Rogers, William Allen. "The Lion-Tamer." Harper's Weekly 15 Oct. 1904: 1563. Print.

This Harper’s Weekly political cartoon demonstrates Roosevelt attempting to tame the wild lions

that symbolize ferocious trusts in 1904.

9

Appendix B

John Moody - The Truth about The Trusts: A Description and Analysis of the American Trust

Movement. New York: Moody Publishing Company, 1904. The Rockefeller-Morgan Family Tree (1904) depicts the deep connectedness of large trusts in

the United States.

10

Annotated Bibliography

Primary Sources

Clayton Antitrust Act of 1914 (2009): 1. History Reference Center . Web. 17 Nov. 2016.

The Clayton Act adds more ammunition to the Sherman Antitrust Act by identifying specific actions that

may be detrimental to “fair competition”. Some of these practices include price discrimination, resale,

mergers, acquisitions, and exclusive contracts. This is important to my paper because, although it was

created after his presidency, the act furthers Roosevelt’s ultimate mission to have fair competition among

businesses without hurting the average American.

Financiers fail to move Roosevelt . [1902?]. Newspaper article. Theodore Roosevelt Papers. Library of Congress

Manuscript Division. Theodore Roosevelt Digital Library. Dickinson State University. November 17,

2016.

This newspaper article discusses how the gathering of “several prominent capitalists” criticized President

Roosevelt's announcement of the suit as “hostile and dangerous to the market”. This article is relevant to

my project because it suggests Roosevelt was unapologetic in his quest of fair competition. According to

the article, criticisms had “little effect thus far on President Roosevelt” and he took the position that he was

“entirely within his province”.

Llewellyn, William H. H.. Telegram from William H. H. Llewellyn to Theodore Roosevelt . 16 Mar. 1904. Telegram.

Theodore Roosevelt Papers. Library of Congress Manuscript Division. Theodore Roosevelt Digital Library.

Dickinson State University. October 27, 2016.

In this telegram, William H. H. Llewellyn congratulates President Roosevelt on the recent verdict in the

Northern Securities Company v. United States case. He states the decision of the merger case was the

“most important event since the Civil War.” This primary source contributes to my paper because it

implies that even the people at the time knew Roosevelt’s actions would majorly influence the economy not

only at the time, but for their prosterity as well.

11

Northern Securities Company v. United States (2009): 1. History Reference Center . Web. 17 Nov. 2016.

The Northern Securities Company vs. United States is a pivotal case regarding antitrust laws. The federal

government used the Sherman Antitrust Act to break up the company and the company repealed. Ruling

5-4 for the United State, the supreme court decided that the Northern Securities company was a monopoly

and it must be resolved. This primary source is central to my topic because prior to this historical decision,

politicians were hesitant to enforce this law.

President's Action Shocks All Marts . [1902?]. Newspaper article. Theodore Roosevelt Papers. Library of Congress

Manuscript Division. Theodore Roosevelt Digital Library. Dickinson State University. November 17, 2016.

This newspaper article discusses how security markets were “demoralized by the announced suit against the

Northern Securities Company”. The Roosevelt administration had denied that this was the first step of “a

general war upon great industrial combinations”. This newspaper contributes to my paper because it

reveals how the news was presented to the American public. Journalists presented Roosevelt positively by

stating he was “making no threats” and was “acting for the best interests for people”.

Roosevelt, Theodore. First Annual Message to Congress. 2 Dec. 1901. The American Presidency Project . Web.

2017.

This primary speech is significant to my project, as it is the first message to Congress by President

Roosevelt post McKinley's assassination. Roosevelt also speaks on trusts for the first time in his

presidency. He hints at his mission to initiate change, and it is the first speech in which the public

understands Roosevelt’s point of view.

12

Roosevelt, Theodore. Second Annual Message to Congress. 2 Dec. 1902. The American Presidency Project . Web.

2017.

In his second message to Congress, President Roosevelt furthers his antitrust mission, and assures the

public that he is not against big businesses, but rather wants to eradicate evils within big businesses. He

insists, “We can do nothing of good in the way of regulating and supervising these corporations until we fix

clearly in our minds that we are not attacking the corporations, but endeavoring to do away with any evil in

them.” This viewpoint added more complexity to my paper.

Roosevelt, Theodore. Third Annual Message to Congress. 7 Dec. 1903. The American Presidency Project . Web.

2017.

In this message to Congress President Roosevelt speaks on the creation of various administration positions.

States Roosevelt, “The establishment of the Department of Commerce and Labor, with the Bureau of

Corporations thereunder, marks a real advance in the direction of doing all that is possible for the solution

of the questions vitally affecting capitalists and wage-workers.” The formation of these agencies

exemplified Roosevelt’s dedication to regulating trusts.

"Sherman Antitrust Act Of 1890." Sherman Antitrust Act Of 1890 : 1. History Reference Center . Web. 27 Oct.

2016.

The Sherman Antitrust Act Of 1890 is a central text involving my topic. According to History Reference

Center, section one of the act declares that contract or conspiracy that restrains trade or commerce among

U.S. states or with foreign nations is illegal. Section two of the act declares that any person who attempts to

monopolize any part of trade or commerce between U.S. states or foreign nations shall be “deemed guilty

of a misdemeanor”. This primary source contributed to my paper because this is the very text Roosevelt

enforced. Indeed, this pre-existing text directly affected Roosevelt’s antitrust actions.

13

Steffens, Lincoln. The Shame of Cities . N.p.: McClure, Philips, 1904. Web. 2017.

This collection of articles demonstrates the point of view of muckrakers at the turn of the century. They

believed big business was corrupt, and it was the working man’s duty to correct the government through

active government involvement. Furthermore, it demonstrates the power of muckrakers, as this collection

rose awareness to the Progressive movement.

Tarbell, Ida. "History of Standard Oil." McClure's Magazine 1904: 670. Web. 2017.

This magazine series-turned-book is relevant to my topic, as Ida Tarbell’s writing added force to

Roosevelt’s trustbusting reforms and ultimately hastened the dissolution of Rockefeller’s Standard Oil

Company. This source described examples in which Standard Oil acted dishonestly, deepening my

understanding of the dissolution.

Secondary Sources

"America at the Turn of the Century: A Look at the Historical Context." The Library of Congress . N.p., n.d. Web. 03

Nov. 2016.

This article provides essential historical context regarding the turn of the century and the growing value in

national and world consciousness. Railroads expanded almost as fast as the booming economy. The

Spanish-American War furthered the United State’s attempt to become an imperialist power. Context is

important to my paper because I analyzed how Roosevelt’s unprecedented attacks on trusts fit into the

bigger historical picture.

Cooper, John. "TR." American Experience: TV's Most-watched History Series . PBS, n.d. Web. 17 Nov. 2016.

Historian John Cooper remarks on the most significant aspects of Roosevelt’s career. One of the most

interesting pieces of information I learned was that the day of Roosevelt’s vice presidential inauguration

was also the day U.S. Steel became the first billion dollar company in the world. Cooper expresses the

symbolism in this, and suggests that big business almost overshadowed and embarrassed the government.

14

This new angle on the relationship between business and government is intriguing, and is something I

further analyzed in my paper.

Dalton, Kathleen. "Theodore Roosevelt: The Making of a Progressive Reformer." The Gilder Lehrman Institute of

American History . N.p., 2002. Web. 2017.

The article explains examines Roosevelt’s immense love and passion for adventure, and how this tied into

his ideology. For example, when he grew impatient with the executive-legislative process, he took bold

executive action that did not require legislative approval. I used this article to gain greater perspective into

Roosevelt’s personality through personal anecdotes and family background.

Danzer, Gerald A., Ph.D., J. Jorge Klor De Alva, J.D. and Ph.D, Larry S. Krieger, B.A., M.A., M.A.T., Louis E.

Wilson, Ph.D., and Nancy Woloch, Ph.D. Holt McDougal's The Americans . N.p.: Houghton Mifflin

Harcourt, 2012. Print.

The textbook explains how Theodore Roosevelt fought to control the influence big business had on

government policy. This textbook is central to my argument because it explores Roosevelt’s position as an

aspiring trust buster. Additionally, the textbook recognized that Roosevelt became president at a pivotal

time period, just as the United States was becoming a world leader. The textbook was helpful because,

through an arrangement of pictures and quotes, I could more easily interpret the timeline of events.

"Domestic Politics." American Experience: TV's Most-watched History Series. PBS, n.d. Web. 03 Nov. 2016.

This article discusses influences on Roosevelt’s point of view. For example, the article explains that

Roosevelt grew up watching his father help the poor. He also learned to value working class people and

hoped to create an America where businesses fairly competed and helped the average American. This is

relevant to my paper because it emphasises Roosevelt’s strong sense of moral duty.

15

"Miller Center." Theodore Roosevelt: Domestic Affairs . N.p., n.d. Web. 27 Oct. 2016.

This article talks about the the Square Deal, which worked to balance competing interests to create a fair

deal for all sides: labor and management, consumer and business, developer and conservationist. This, the

article states, is relevant because Roosevelt was the first President to name his domestic program and the

practice soon became commonplace, with Woodrow Wilson's New Freedom, Franklin D. Roosevelt's New

Deal, and Harry S. Truman's Fair Deal. This article helped me because it named significant precedents

Roosevelt set.

"Northern Securities Case." Theodore Roosevelt Center - The Northern Securities Case . N.p., n.d. Web. 17 Nov.

2016.

This article evaluates the Northern Securities Case vs. the United States and provides supplementary

information and context. It also puts a new spin on the case, suggesting Roosevelt’s actions had ignored

“the advice of leading conservatives...and demonstrated his independence from his party elders”.

Therefore, it increased his support from the general public and helped in his following election campaign.

"The Story of Oil in Pennsylvania." Petroleum Education . N.p., n.d. Web. 2017.

This article explained that the most important oil well ever drilled was in northwestern Pennsylvania in

1859, as it was one of the first successful oil well. It began an international search for petroleum, and in

many ways eventually changed the nation into one dependent on oil. I used this source to gain background

knowledge regarding oil so I could include relevant facts in my paper.

Sorkhabi, Rasoul, Ph.D. "The Standard Oil Story III: The Rise, Fall and Rise of The Standard Oil Company."GEO

ExPro Magazine . N.p., n.d. Web. 2017.

This article examined Rockefeller’s Standard Oil Company and its many mergers, and described it as the

‘great-grandfather’ of major companies. Furthermore, it described the dissolution, hastened by Roosevelt

and Ida Tarbell’s efforts. I utilized this article to better understand Rockefeller’s story and Roosevelt’s

motives.

16