Founders
Episode 142 #142 Teddy Roosevelt and J.P. Morgan
Founders

Episode 142: #142 Teddy Roosevelt and J.P. Morgan

Founders

Episode 142

#142 Teddy Roosevelt and J.P. Morgan

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism by Susan Berfield.

What I learned from reading The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism by Susan Berfield. 

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[0:17] Morgan was the most influential of these businessmen. He wasn’t the richest but that didn’t matter; he was commanding in a way none could match. 

[0:38] Morgan had an aristocrat’s disdain for public sentiment and the conviction that his actions were to the country’s advantage, no explanations necessary. 

[0:50] Roosevelt thought big business was not only inevitable but essential. He also believed it had to be accountable to the public, and Roosevelt considered himself the public. 

[1:04] Each [Morgan and Roosevelt] presumed he could use his authority to determine the nation’s course. Each expected deference from the other along the way.

[2:18] “I’m afraid of Mr. Roosevelt because I don’t know what he’ll do,” Morgan said. “He’s afraid of me because he does know what I’ll do,” Roosevelt replied. 

[5:24] Morgan had trusted his father to set him on the right path and steer his career, even when his father was overbearing, Morgan never mounted a challenge. The creator of the biggest companies the world had ever known was very much the creation of paternal influence. 

[9:58] Morgan said he could do a year’s work in nine months, but not twelve. His impatience could be withering. 

[10:17] Roosevelt adopted his father’s motto, “Get action.” 

[10:35] Roosevelt never sat when he could stand. When provoked, he would thrust, and when he hit, he hit hard

[11:11] Theodore loved to row in the hottest sun, over the roughest water, in the smallest boat

[12:09] When they attacked Roosevelt, he would fire back with all the venom imaginable. “He was the most indiscreet guy I ever met.” 

[16:36] When one of the gentlemen complained later about Morgan’s interference in their roads, Morgan snapped: “Your roads? Your roads belong to my clients.” 

[19:26] John D. Rockefeller said his company was efficient. Critics said it was untouchable. 

[23:04] James J. Hill had built the Great Northern with deliberate thrift and brutal efficiency. His railroad would become among the most profitable in the Northwest. He didn’t need Morgan the way other railroad executives did. 

[25:52] “A soft, easy life is not worth living, it impairs the fiber of brain and heart and muscle. We must dare to be great.”, Roosevelt said

[29:18] Harriman secretly bought up shares in Northern Pacific. This was revenge. Hill and Morgan had effective control over the Northern Pacific, but they didn’t own a majority of the shares. Morgan had never found it necessary to own a company outright in order to exert influence. 

[35:02] The president had asked his attorney general to prosecute Northern Securities for violating the Sherman Act. Roosevelt should have warned him, Morgan grumbled. They could have worked out a deal in private. Presidents didn’t keep secrets from the captains of industry, and the House of Morgan had never before been surprised by the White House. 

[37:29] After Morgan left, Roosevelt marveled at the financier’s imprudence. “That is the most illuminating illustration of the Wall Street point of view. Mr. Morgan could not help regarding me as a big rival operator, who either intended to ruin all his interests or else could be induced to come to an agreement to ruin none.” 

[39:06] Roosevelt understood how panic could outrun reality

[47:00] People will love Roosevelt for the enemies he has made. 

[50:21] Morgan repeated the advice he had received from his father long ago: “There may be times when things are dark and cloudy in America, when uncertainty will cause some to distrust and others to think there is too much production, too much building of railroads, and too much development in other enterprises. In such times, and at all times, remember that the growth of that vast country will take care of all.” 

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#142 Teddy Roosevelt and J.P. Morgan

Introduction

These industrialists accumulated their wealth in ways most Americans could understand. They dug up something. They discovered something. They built something. But the financiers backing these industrialists, as Americans were just learning, found their riches in the flow of money itself. Morgan was the most influential of these businessmen. He wasn't the richest, by most accounts, John D. Rockefeller and Andrew Carnegie were. But that didn't matter.

He was commanding in ways none could match. Wherever he sat, he became the head of the table. He was comfortable in his dominion though never with his fame. He had an aristocrat's disdain for public sentiment and the conviction that his actions were to the country's advantage, no explanations necessary. Roosevelt thought big business was not only inevitable but essential. He also believed it had to be accountable to the public, and Roosevelt considered himself to be the public. Each presumed he could use his authority to determine the nation's course. Each expected deference from the other along the way. Morgan and Roosevelt both knew privilege and loss, though they would have balked if anyone had pointed out their similarities.

The president aimed to guarantee that as American prosperity took hold, the laws applied to the country's elite and its poor alike. He wanted to assert diplomacy of government over business. The financier thought that was needless, even dangerous. The country's strength accrued from capital, trade, economic efficiency. These were the provinces of businessmen and Morgan, their unofficial ruler. He required order and stability along with political predictability to assure America's growth and ascent to global power.

To Morgan, the giant railroad and steel companies he was constructing would allow the country to compete in the world market and its citizens to benefit. The pace and scale of these operations shouldn't be cause for worry or resentment and certainly not regulation. "I'm afraid of Mr. Roosevelt because I don't know what he'll do," Morgan said. "He's afraid of me because he does know what I'll do," Roosevelt said. Roosevelt and Morgan were bound for conflict. Roosevelt was a new kind of president. He believed American capitalism needed a guiding hand. So did Morgan. Each assumed it should be his own.

So that's an excerpt from the book that I'm going to talk to you about today, which is, The Hour of Fate: Theodore Roosevelt, J.P. Morgan, and the Battle to Transform American Capitalism, and it was written by Susan Berfield. So before I jump into the book, I want to read this one paragraph description that is found on the inside flap, and it gives you an overview of what the author's focus is. It said, "A bullet from an anarchist's gun put an end to the business-friendly presidency of William McKinley, a new chief executive bounded into the office, Theodore Roosevelt."

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