On September 6, 1901, William McKinley, the 25th president of the United States, was felled by an assassin’s bullet. The shot may not have been heard around the world, but its news certainly ricocheted across Wall Street. McKinley had been its man, the so-called “advance agent of prosperity.” His successor, on the other hand, was Theodore Roosevelt — a crusading former governor of New York who had been shuffled off to the position of the vice presidency, in part to stymie his efforts at reform. Now, he was sitting in the Oval Office.
In her first book, The Hour of Fate, Susan Berfield explores the events surrounding the landmark trustbusting case Northern Securities Co. v. United States (1904) — and the fierce rivalry that led there. Roosevelt, the buccaneering statesman, always willing to test the limits of his power, had met his match in John Pierpont Morgan, an inflexible financier, who was determined to consolidate his growing business interests across coal, rail, and steel.
Both men were cut from much the same cloth, writes Berfield. Each had been born into extraordinary privilege and wanted for little. By his junior year at Harvard, Roosevelt drew an annual allowance greater than the salary paid to the university president. Several decades earlier, Morgan had spent his mid-twenties supplementing his income by manipulating the market for gold. (He created artificial shortages by shipping gold he had bought on credit to London, then traded on its inflated prices.)
But while Morgan had “an aristocrat’s disdain for public sentiment,” Roosevelt reveled in it. On occasion, he would gossip with journalists during his afternoon shave, dictating statements on policy even as his face was lathered in shaving cream. Morgan, by contrast, dealt in private. He preferred to gather disputing parties around a table — usually his table aboard his yacht, the Corsair — and “fix it up.” The banker saw Washington as a second-rate power to the world of high finance. As a matter of fact, he had singlehandedly ended the Panic of 1893 by bailing out the United States Treasury. Morgan convinced President Grover Cleveland not to sell government bonds on the public market and risk a run on gold and instead to sell $65 million in securities to him and his syndicate of buyers, stabilizing the economy as it teetered on the brink of financial collapse. Roosevelt took a different view. To his mind, Manhattan was a “troublesome insular possession” that exercised an outsized influence over the country at the expense of the government. And that had to change.
“I am afraid of Mr. Roosevelt because I don’t know what he’ll do,” said Morgan, according to one apocryphal account. Roosevelt’s reply: “He’s afraid of me because he does know what I’ll do.”
This — the debate over what, if any, limits there ought to be on corporate power — was the tightrope Roosevelt walked in the weeks following McKinley’s death. That autumn, the young leader set to work on a 20,000-word State of the Union address, in which he would lay the groundwork for his unexpected presidency. In particular, he argued that “great corporations exist only because they are created and safeguarded by our institutions; and it is therefore our right and our duty to see that they work in harmony with these institutions.”
It is this theme that Berfield makes the focus of her book, which is at once a work of popular history and a call to action. The exhortation to contemporary reform is hard to find, but it is there, tucked away in its final few pages. Careful not to name names, Berfield writes in the epilogue: “Corporate power is concentrated, again, and so is privilege. . . . It has created a new Gilded Age, and now, another progressive moment striving to hold capitalism and corporations to account.”
Both “moments” are probably best understood as responses to two separate industrial revolutions, spurred by the invention of the internal combustion engine and by the Internet, respectively, although this is not explicitly drawn out by the author. In 1885, the railroads comprised 80 percent of the listings on the New York Stock Exchange. Today, five American technology companies make up a quarter of the S&P 500 by market capitalization — and their share of the American economy is only growing. While disruptive technologies and shifting markets are a given, Berfield explains that there is a political equilibrium to labor and capital, which, if gone unchecked, can spill over and result in social upheaval.
That is what happened at the turn of the 19th century. In the years following the Civil War, around 170 million acres of public land out west were “given, not sold” to private railroad companies, writes Berfield. What resulted from that was a patchwork of small inefficient enterprises and quarrelsome businessmen all looking to make a quick buck. The industry was wracked by uncertainty, which was bad for investors and bad for Morgan. But he saw an opportunity. Through an elaborate system of trusts, Morgan could extend his control over large swathes of the American economy. By 1874, most of the coalfields in Pennsylvania had come under the control of the railroads, and over the next 25 years Morgan gradually consolidated those interests into tightly run cartels. In McKinley’s first term, the gross national product of the country rose by a stunning 30 per cent. The time was ripe to form a holding company — what would become known as Northern Securities — from the three largest railroad operators: the Northern Pacific, Great Northern, and Burlington lines.
The Sherman Antitrust Act of 1890 had been introduced as a guardrail against the coalescing of mega-corporations such as Standard Oil but had been of limited effect. State attorneys general very rarely brought forward cases, and when they did the captains of industry were able to exploit ambiguities in the law to their advantage or simply incorporate as a holding company in another jurisdiction. Companies continued to hoard the wealth they created, and inequality in society grew.
One might say that the “hour of fate” came when Roosevelt chose to intervene in the anthracite-coal strike of 1902. Instead of putting down the strike by force, the president acted as a mediator between unions and business leaders. It was the first time the federal government had arbitrated a labor dispute. Eventually, the parties settled. Writing to his sister Bamie, Roosevelt commented on the intransigence of the railroad operators who were “absolutely out of touch with . . . practically all the rest of the country.” His resolve was strengthened to forge ahead with his “Square Deal” agenda, including the regulation of corporations through antitrust laws.
In the presentation of these facts, Berfield turns what could be a rather dry and complex story into a lively epic, chronicling the clash between two titans. Her language flows beautifully and weaves between choice quotations, which have been painstakingly researched and plotted throughout the book. Meticulous attention is also paid to the most fleeting details, from soon-to-be witnesses of McKinley’s assassination “dabbing their brows” in the oppressive heat to what restaurant catered the wedding of Morgan’s daughter. The end result is a book that is novelistic in tone and historical in substance.
But with such a large supporting cast of characters, the text can be unwieldy, and neither Morgan nor Roosevelt make for comfortable bedfellows in the retelling of this story. For one, they only ever met a handful of times. And it is difficult to carve out a single self-contained episode: Roosevelt’s second term and the Panic of 1907, which Morgan helped resolve, are not covered by Berfield. Indeed, separate biographies of the men by Doris Kearns Goodwin and Ron Chernow fall within touching distance of 1,000 pages apiece. In some sense, therefore, Morgan and Roosevelt feel incomplete in The Hour of Fate. The reader does not come to properly know them.
Meanwhile, the author is perhaps a little guilty of eliding some characters too closely with the main themes of the book. The railroad baron George Baer is portrayed more as a caricature (the archetypical Monopoly Man) than a fully enfleshed person. It is more interesting, for instance, to learn why Baer believes he has a God-given right to property, rather than to simply put it to down to his supposed aloofness. Similarly, not enough emphasis is placed on how Roosevelt changed the nature of the presidency or how the relationship between business and the state was upended during this time. That it did and should have done is presumed. This subtle strand of presentism reminds us that Berfield is writing a work of popular history for the here and now as opposed to an academic study of the period. Nevertheless, she provides some fascinating insights into the arduous lives of miners by drawing heavily on the first-person testimonies given to Roosevelt’s independent commission as well as on trade-union leaders, including John Mitchell, whose story is recounted from beginning to end.
On balance, the book is well structured. It does lose momentum toward the end, however, and one suspects that it becomes a casualty of its own vaulting ambition to dramatize “the battle to transform American capitalism.” After chapter 13, the book shifts from a textured narrative driven by peoples’ experiences to an insider’s guide to Washington and the sausage-making of antitrust laws and judicial decisions. While it is undoubtedly interesting, some readers will be thrown by this transition, not least because it rules out a tidy conclusion. Having set herself the unenviable task of tying together multiple narrative threads into one climactic event, Berfield looks to the Supreme Court ruling as a kind of reckoning. But in the final equation, the calling off of the coal strike is perhaps the natural end to the book, whereas in its current form it has three other competing conclusions: the legal milestone of Northern Securities, Roosevelt’s second inauguration, and a nod to the Panic of 1907, the last time Morgan was able to backstop the American economy.
The Hour of Fate is by no means a comprehensive history of antitrust law and the industrial unrest that marked the beginning of the 20th century, and neither does it strive to be. It is a window into that distant period. It reaches beyond our modern understanding of antitrust law as “harm caused to consumers” and tackles these ideas in their infancy. To that end, it is a well-crafted primer, an introduction for further reading. Berfield invites us to consider the parallels between the trusts and monopolies that arose around coal and the railroads and asks whether the same is happening today with respect to data. Her answer leaves a lot of the legwork to the reader, who may wonder whether such interventions are even possible today. Organized labor is far weaker than it was then. The gig economy has unmoored workers from identifying strictly with a single profession. And most important, is it true that nations hold dominion over corporations in a globalized economy where evolving supply chains and markets are the norm? That is not even to mention the doublespeak with which American politicians heap scorn on big business but then place them on a pedestal as “national champions” against European antitrust investigations or the growing global influence of Chinese companies such as Huawei. In any case, great corporations again hold the levers of our economy, and the pandemic has put into sharper focus that most challenging relationship between labor and capital.