Susan Berfield
Susan Berfield captivates with a story of TR and J.P. Morgan, two adversaries who worked together to solve a national crisis. She is a journalist and the author of "The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism."
Transcript
Susan Berfield:
That was really the first consequential time in American history that a president had tried to not only use, but maybe even expand the powers of the office and to apply that to the country's elite. In this case, John Pierpont Morgan, who was the ultimate 1%.
Ted Roosevelt V:
Welcome to Good Citizen, a podcast from the Theodore Roosevelt Presidential Library. I'm Ted Roosevelt. Today I'm speaking with Susan Berfield, journalist and author of "The Hour of Fate: Theodore Roosevelt, JP Morgan, and the Battle To Transform American Capitalism." Susan weaves a captivating story of two adversaries who ultimately worked together to solve a national crisis. Roosevelt and Morgan were in a bitter court battle over antitrust law, a case that would shape capitalism in the 20th century, yet they put their differences aside and teamed up to resolve a massive coal miner strike. In 1902, I found Susan's story of rivals working to help the country instructive for thinking about paths forward today. It's my pleasure to share with you this enlightening discussion with Susan now. You're an investigative journalist, you work for Bloomberg, you've won a number of awards for your reporting, and a lot of your reporting is focused on corporate misdeeds. You've also written a book about an event, which we're going to spend a lot of time talking about at the start of the 1900s that really set the tone for American capitalism in the 20th century. And so I'm curious just to start with a wide aperture, what leads you to these topics? I mean, why do you feel like they're so important?
Susan Berfield:
Okay, big question to start out with anyway, thanks. No, thank you so much. Well, I think as an investigative reporter, I am always looking for stories where there is someone or some institution, some system that can be held to account for some wrongdoing, and so that does often lead to companies. You know, sometimes leads to the bigger systems that companies operate in, like capitalism I guess you could say. And the notion that there's always a give and take, that things are always kind of cycling, and catching the moments in those cycles I think is what's most interesting. And that's kind of where I was aiming with the book as well.
Ted Roosevelt V:
We're talking about a period in time where the country's really facing for the first time, the idea of the limits of capitalism. The way that the capitalism worked in the United States was that government didn't intervene too much. All boats rose with the tide, and for the first time we started to discover as a nation and TR certainly started to address this, we start to bump up against the limits of what capitalism can do unfettered.
Susan Berfield:
The main part of the book, and the reason I felt like I could write a book about these two people who had been written about so frequently is that I really wanted to concentrate on these couple of years from 1902 to 1904. Roosevelt's first presidency and a time when America was experiencing this tremendous post-war, civil war growth, right? Industrial growth. The country was expanding and growing and becoming wealthier, and the standard of living for most people was rising. But the way that that came about was through the development of railroads, which is where Morgan comes in, which was an enormous suck of resources. Money, investment, often from Europe, land that was often taken and really had a huge impact on where and how towns and cities developed. Immigration was increasing and causing some tension. There was still racism and an African-American population that was facing violence and discrimination. Women were not really in the workforce, but when they were not paid as much, and so there was a lot of inequality, but I think the most notable development is the concentration of this wealth and ultimately maybe monopoly of oil, of the railroads, of salt of whiskey, things that people encountered every day. And so the wealth wasn't an abstraction for people. They could see how it was affecting their daily lives.
Ted Roosevelt V:
It's pretty clear for anybody that's read your book or are familiar with the events of 1902 and the coal miner strike that there are a lot of parallels and a lot of lessons learned from that moment in time that kind of turned into the 20th century. At the time that you decided to write the book, were you already aware? Was it so obvious that there were a lot of parallels and there was a lot of importance in this time period? Or did you sort of find it as an interesting topic and then discovered, oh my God, lo and behold, history repeats itself and we're seeing these cycles again?
Susan Berfield:
When I started thinking about the book, it was 2016. It was a different time in terms of the presidential cycles, and that was really kind of what got me thinking about this, and it was because Bernie Sanders was starting to talk about holding Wall Street and big banks to account. There had been obviously a lot of discussion, controversy, conflict and reporting about the growing income gap, the wealth inequality in the country, the 1% and all of that made me think about when the country had been encountering these kinds of forces. Most recently, you could think about the Great Society, Lyndon Johnson's reforms. Think about the other Roosevelt, Franklin Roosevelt's New Deal, obviously huge impact in terms of both the government's role in regulating business, overseeing and taking a public interest. Then eventually I moved back to Theodore Roosevelt and his square deal and realized that that was really the first consequential time in American history that a president had tried to not only use, but maybe even expand the powers of the office and the laws that were on the books but not regularly enforced, and to apply that to the country's elite, and in this case, John Pierpont Morgan, who was the ultimate 1%.
And so that kind of caught my attention. So these are two big characters. They seem to be in conflict and the way that their conflict was resolved really had repercussions. A lot of the tensions that America was facing then are tensions that we're facing now.
Ted Roosevelt V:
So I want to set the stage for listeners. You talk about JP Morgan as being the ultimate one percenter---set the stage a little bit for people to understand just how powerful people like JP Morgan were at that time.
Susan Berfield:
Maybe I would just start by saying that when I first was researching the book, and even when I first wrote the very first draft, it was very much focused on Roosevelt. As a young president with a lot of ambitions to be a reformer, you would ultimately call the presidency or kind of the goal of his presidency is the abolition of privilege. But what I realized as I was researching and writing is that it was really Morgan's world and people like Morgan. It was their world. It was the end of the Gilded Age. Enormous amounts of resources had been accumulating in small group of people's hands, and Morgan was one of those people probably controlled more money than anybody in the country, maybe the world. This is the landscape and this is what Roosevelt enters into. This is why he's considered to be such a disruptive force by people in his own political party, why Morgan, as the symbol of this kind of gilded age was such a tempting target for Roosevelt. My sense is that what Roosevelt wanted to do in some ways was to have power more shared with the government, but also with people. And so it was like putting the public interest over corporate interests.
Ted Roosevelt V:
The other main thing, and we've alluded to it, but it's critical in understanding the American century, was that lawsuit against Northern Securities, which I think is maybe not broadly understood today. Can you talk about that lawsuit and why it was so important and why it really set the stage for the next a hundred years in the United States?
Susan Berfield:
The lawsuit was based on the Sherman antitrust law, which is something that had passed because there was a sense in Congress that people were upset about monopolies. The law that passed was described as an experiment, and a lot of laws has to be put into practice and tested in the courts, and many of the attorney generals and the States and in the federal government were not that keen on testing it out. When Roosevelt took office after McKinley's assassination, just two months after that, Morgan formed something called Northern Securities, and it was a trust and it was essentially a combination of three very important railroads. Roosevelt spoke with his attorney general to see if he could put into practice the antitrust law against Morgan's Northern Securities Trust that this is a monopoly that will quelch competition, that ultimately these are going to be just a few people who are in charge of a lot of railroads in the country, and we don't want them to have so much power.
When they filed the case, Morgan was really stunned. Wall Street was stunned. Morgan came down to Washington, to the White House, thinking he could do business the way he had always done, which was like, I'll just talk to Roosevelt. Morgan was basically like, "can't you have your man talk to my man? And we just resolve this. That's the way I'm used to doing things with presidents." And afterward, Roosevelt wrote that what it showed him was that Morgan considered him, he called him like a rival operator, someone who was after Morgan's power as a competitor would be, but ultimately the government prevailed, the monopoly or kind of the trust had to be broken up, and created the momentum for the beginning of a more progressive agenda where the government could put into laws into place that protected workers. Child labor-- they were genuinely progressive ideas. I mean, not in every way we have to be honest, but in terms of progressive economics, he had a lot of ideas, and I think some of those kind of slowly worked their way into the system, and some of them are still being discussed, challenged, et cetera.
Ted Roosevelt V:
It's interesting to me that JP Morgan and Theodore Roosevelt came from very similar backgrounds. Both their fathers were very successful businessmen. They were both New Yorkers, and yet they took very different paths and ended up butting heads. In your research, did you get a sense of what it was about the two men that led them down such divergent paths?
Susan Berfield:
I knew a lot more about Roosevelt than I did Morgan when I started, and of course, Roosevelt was also the author of hundreds of thousands of letters and all of the literature that has been written about him at the time and since. Amazing, amazing biographies. Morgan, not so much. He was a very private person, instructed many of the people close to him to burn the letters that he had written to them after his death. Morgan Library itself is phenomenal building, and the archives are terrific, but much more limited than Roosevelt's written legacy. And so as I was learning more about Morgan, the similarities between the two became pretty striking to me, and I don't think either of them would've ever agreed that they shared anything in common, but as you said, they grew up with very powerful fathers. Roosevelt lost his father at a young age.
Morgan's father lived a long time, and really Morgan operated in his shadow for a long time. Even when Morgan was pretty well established as a financier in New York, his father was in Europe sending detailed instructions, criticizing him when he thought Morgan did anything that was too reckless or anything that could jeopardize the Morgan name. What Morgan learned from his father was really how to conduct yourself in the world of business and finance. Roosevelt greatly revered his father, and his father was a philanthropist, and I think what Roosevelt learned from his father was how to conduct yourself in the world, and I think Roosevelt expanded what that world was far beyond his father's experiences.
Ted Roosevelt V:
Your book is actually really interesting because it is both these two titans butting heads, but it's really about them working together in the coal miner strike. So TR is suing Northern Securities, and then we have this coal miner strike of 1902, and even though TR is going up against JP Morgan and the courts unexpectedly and really sort of an unprecedented approach, he then turns to JP Morgan and says, I could really use your help on this problem here. Can you talk about how that conversation goes? And then how the coal miner strike gets dealt with?
Susan Berfield:
Roosevelt and his attorney general filed the case against Morgan in the courts in February and March of 1902. Just a few months later, the coal miners in Pennsylvania who were mining anthracite coal went on strike. Anthracite coal was used in the railroads. That's the main thing, but it was also used to heat homes and buildings. The miners at that point in Pennsylvania were maybe about half, maybe more recent immigrants, often from Eastern Europe. They were working in very, very dangerous conditions. I think in 1901, close to 2000 of say 145,000, 2000 were either injured or killed. In 1902, they hadn't had a raise in almost two decades, so I came to view them as the essential workers of their time. They were also literally unseen, working underground. The owners of the coal mines--coal barons, I think is fair to describe them--would have nothing to do with the idea of a union.
And so they went on strike. So that's May of 1902. Through the summer, I think everyone believes that the strikers will give up or wear out by the fall. It seems like their strike fund is pretty robust. There's a lot of support for them, and Roosevelt starts to get worried, very fearful of real harm coming to people and the possibility of social unrest. But up until that point, no president had ever intervened in a strike other than to call in the troops, and Roosevelt wanted to see if he could mediate. I don't think he ever thought that he couldn't persuade these coal barons, but he called them down to Washington. Roosevelt gets out a few words, and then the coal barons just kind of lay into 'em. "You don't understand what's going on. These are not people who we,"--meaning the union people-- "we can't trust."
"The strikers are close to anarchists and he should not be dealing with them. These are our workers. We are in charge. Leave it up to us." And they leave. And so that's when he realized the one person who probably could persuade the coal barons was essentially their boss, John Pierpont Morgan. The coal mines were kind of controlled by the railroads. The railroads were controlled by Morgan. Even though this was just--whatever it was, seven months after Roosevelt had surprised him with a lawsuit--he sent someone from his cabinet who was a friend of Morgan's, a lot of kind of cozy crony connections, but like, take advantage of it when you can, right? 0So he sent them up and they went on Morgan's yacht, and they crafted an agreement called the Coursera Agreement after Morgan's yacht that very much, very much resembled exactly what the union leader and Roosevelt had wanted, but it just wasn't coming from the president's office. Essentially it called for a commission to hear the grievances from both sides and make some rulings, and that both sides had to abide by that. By the end of October, the strike was over and afterward Roosevelt wrote a thank you letter to Morgan. It was brief, but it was basically like, thank you so much. This really worked out well. And I could not find any trace of a reply from Morgan if one existed.
Ted Roosevelt V:
And so I guess I wonder if you think about today, is there the possibility for that type of government relationships, the president reaching out to whomever to help with some of the challenges that we're facing around the limitations or lack thereof around capitalism?
Susan Berfield:
Even at the time Roosevelt was criticized for not necessarily having a close relationship with Morgan himself because they were never friendly, but that the White House and the House of Morgan were linked in ways that made some people uncomfortable and suspicious. I think it's just very, very difficult to find the right way to engage. Today, there's much greater suspicion of those kind of connections and of business, business people having too much influence on the presidency or on politics or on policy. I think Roosevelt's point of view was that ultimately regulation is better than litigation, and that regulation is only going to be effective if the people who are being regulated are going to agree to it.
Ted Roosevelt V:
I'm interested, I know your book was really focused on 1902 to 1904, but it's not long afterwards where you have a bank crisis happen, and again, TR and JP Morgan work together to help stem the crisis. And I'm curious about their relationship following the coal miner strike that they were able to come together again and work to solve a national crisis.
Susan Berfield:
I think what they both wanted was stability and when something threatened that they were able to find a way to work together however, whatever literal form that took. Also at that time, Morgan stepped in more than once. 1907 was the big example, but stepped in more than once with gold and an ability to rally or corral the other big Wall Street players of the time to help out. Part of that was because there wasn't a Federal Reserve and there wasn't kind of the financial structure that developed afterward. And in part, I think it developed in response to concern about relying so much on one person. Roosevelt, I don't think had a choice but to go to Morgan, and I also don't think Morgan really had a choice. In the same way that the banks in 2008, the banks helped out and they also benefited, and Morgan helped out in 1907 and then was also criticized because he was able to pick up some failing institutions really cheaply. Exactly the same, right? And I guess one way I think about it is, it's true that there's probably always going to be criticism. I don't think there's ever going to be any policy in a country like ours that absolutely everyone is 100% behind. And so part of being a leader or being in a position of leadership is to weigh all of those, right? And to decide what ultimately is worth it.
Ted Roosevelt V:
There's another, I think, stark difference that I'm curious about between that era and the modern era, which is-- again, in 1907, there was a corporate corruption scandal that involved prior presidential campaigns, and Congress passed a law banning corporate involvement in federal elections, and that held up for the next 70 years or so, but really fell in 2010 with Citizens United where the role of corporate involvement in our politics shifted dramatically. And I wonder how you think about that today. Is it possible that we're having, that there's a structural change that has taken place in this country?
Susan Berfield:
In the time since the book was published in 2020, of course, in the midst of the pandemic, at a time when the government was doing a lot of things for people that it hadn't done in a long time, and even though it was such a terrible, terrible time, there were also kind of glimmers of hope that--oh, look, if you give money to impoverished parents for their kids, child poverty decreases. If we can pay people because they can't work, their standard of living actually goes up even in the midst of everything. So when the book came out, I was weirdly, tentatively optimistic that it was the pandemic that had forced a structural change back. Now, I feel like a lot of that has, what's the word, reconstituted itself in kind of complicated and I don't know, potentially dangerous way. So I don't think anything is ever set. But how long is it set for? Years, decades, centuries? I don't know. I'm still rethinking it.
Ted Roosevelt V:
Yeah, the impact of the pandemic is still very much being digested I think. And it's going to be years and maybe as you say, maybe decades and even centuries before, we're able to have a real clear eyed assessment of what it did to some of the institutions and some of the structures in our country. So there are a couple of questions we ask every single person on this podcast. The first one, is there an action that you would encourage listeners to take to feel more involved?
Susan Berfield:
One of the things that I really admired about Roosevelt was how deeply and widely he read. I mean, one of my favorite details of all was when he went on a train ride and asked the librarian of Congress to bring over five dozen books for him. So I really think reading widely and deeply and from sources that you might not usually go to, just to keep a really open mind and be curious, just to be reading, to help understand.
Ted Roosevelt V:
Well, TR's, at least the legend is that he read a book a day. So he was quite prolific in terms of his consumption of information. And he's also the president that wrote the most books. So not only was he reading a lot, he was writing a lot in addition to all the other things that he was doing during his life. The other question that we do ask is, is there an organization that you think listeners should check out, should support, that you'd like to bring to people's attention?
Susan Berfield:
Yeah, I hope everyone kind of offers something that is a little bit self-interested, becuase I'm definitely going to.
Ted Roosevelt V:
They do. Just in case you're wondering.
Susan Berfield:
Thank you, Ted. I would encourage people to consider at least paying attention to what the Committee to Protect Journalists is doing. As we know there's so many conflicts outside the US where journalists are really in peril trying to report back to us all, and so I think that's a really good organization to support these days especially.
Ted Roosevelt V:
Thank you, Susan, so much for taking the time to chat with us today. I really appreciated the conversation. Your book and your knowledge are all extremely relevant to today, and it's hugely helpful for me at least, and hopefully our listeners to hear all about it.
Susan Berfield:
Thanks so much. It was really a pleasure talking with you, Ted.
Ted Roosevelt V:
Thank you, Susan, for sharing this fascinating story that beautifully weaves together past and present. And listeners, let's all follow Susan's advice to be curious and read widely. You can of course start with "The Hour of Fate: Theodore Roosevelt, JP Morgan, and the Battle to Transform American Capitalism." If you enjoyed this conversation, please check out the rest of our episodes and consider sharing the podcast with a friend. Good Citizen is produced by the Theodore Roosevelt Presidential Library in collaboration with the Future of StoryTelling and Charts & Leisure. You can learn more about TR's upcoming presidential library at trlibrary.com.