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Friday, May 6, 2011

Do We Need Another Teddy Roosevelt?

Leonard T. Jernigan, Esq.
Guest Blog by Leonard T. Jernigan, Jr.  

On September 14, 1901 at 2:15 a.m. President William McKinley took his last breath and became the second President since Lincoln to die from an assassin’s bullet. To the horror of many New York politicians, Theodore Roosevelt, the former activist governor of New York who had been shuffled into the vice-presidency to keep him from further meddling in New York politics, became President. 

In Edmund Morris’ excellent book, Theodore Rex (2001, Random House, 555 pages), the grim reality of a worker’s plight at the turn of the century is disclosed through exhaustive research and a bird’s eye view of what was happening. In reviewing Standard Oil Company’s kickback contract with the Pennsylvania railroad (the railroad company got rebates from Standard Oil when transporting that company’s oil, but got “drawbacks” when they transported oil from other companies), Roosevelt began to see “a new and dark power” that shadowed every aspect of life in America. 

This new concept of “privilege in commerce” went against the grain of free enterprise and to some was un-American. As Standard Oil swallowed up smaller companies, John D. Rockefeller (who owned 90% of the oil-refining business in the United States) was unrepentant. In his view, interdependent industries needed less competition and “more cooperation.” 

Although President McKinley saw this development as merely an economic trend, ordinary Americans began to see the effects of this dark power. Morris stated it succinctly: “ . . . whatever corporate executives might say about increased efficiency and reduced waste, the historic inclination of Monopoly was to raise prices and lower wages.”

Although the Sherman Anti-trust Act had been passed in 1890, the United States Supreme Court decision of U.S. v. E. C. Knight Co., 156 U.S. 1 (1895) rendered the law ineffective. That decision held that a trust controlling 98% of the national sugar-refining business did not violate the anti-trust provisions of the law, since refining was not itself an interstate activity, and therefore such companies were exempt from regulation. 

Andrew Carnegie created U.S. Steel when he merged his company with nine others, and J. Paul Morgan controlled several banks, Western Union, the Pullman Car Company, Aetna Life Insurance, General Electric and 2-1 railroad companies. Businessmen like to operate in private, and believe that combinations were best put together quietly. 

In reviewing these developments, Roosevelt asserted that the nation had to respond to these new conditions and he argued that the United States “ . . . has got to possess the right of supervision and control and regards the great corporations which are its creatures.” J. P. Morgan’s response was simple: “I owe the public nothing.” 

As corporate wealth grew, working conditions deteriorated, particularly in the coal fields of Pennsylvania, where men worked in the mines for ten hours a day, six days a week, and were lucky if they made $500.00 in a year. By age 40 or 45, most were disabled from black lung disease and were reduced to menial jobs like picking up slate with their grandchildren. Union membership had doubled over the past five years, and the United Mine Workers (UMW) had its first strike in 1900. Roosevelt realized that “ . . . Today’s contempt for the unskilled worker was tomorrow’s likely revolution,” and William Jennings Bryan, during his last run for the presidency in 1900, kept saying “The extremes of society are being driven further and further apart.” 

Roosevelt knew his history, and was aware of the vulnerability of the republics that had failed to preserve a social balance: [T]he death-knell of the republic had rung as soon as the active power became lodged in the hands of those who sought, not to do justice to all citizens, rich and poor alike, but to stand for one special class and for its interest as opposed to the interest of others. 

Roosevelt began to evaluate a course of action until he was able to consolidate his power and run on his own in 1904. Morris summarized it as follows: 

[H]ow, in the meantime, to care for those millions of Americans out there in the twilight? How to articulate their vague feelings that despite general peace and prosperity, something deep down was wrong with the United States? Here was his challenge as president: To put into speech, and political action, what they felt in their hearts, but could not express. In Roosevelt’s first message to Congress he acknowledged the abounding prosperity of the country and gave credit to the captains of industry who, on the whole, had done great good for the people. He then stated: 
"It is no limitation upon property rights or freedom of contract to require that when men receive from government the privilege of doing business under corporate form . . . they shall do so upon absolutely truthful representations. . . . Great corporations exist only because they are created and safeguarded by our institutions; and it is therefore our right and duty to see they work in harmony with these institutions. . . . The first essential in determining how to deal with the great industrial corporations is knowledge of the facts – publicity."
He also argued that the United States should conserve its natural resources, for the protection of future generations. He documented the irresponsibility with which Americans had abused water, mineral and forest resources, leading to the loss of more than half the nation’s original timber and other signs of exhaustion of natural resources. He argued that the Bureau of Forestry should be given total control over forest reserves, aired public lands should be reclamated, and interstate irrigation systems should be developed by the national government. “The doctrine of private ownership of water apart from land cannot prevail without causing enduring wrong.” 

Roosevelt began his trust busting by instructing his Attorney General, Philander Chase Knox (described by Roosevelt as “The best attorney general this government has ever had”), to file a lawsuit against the Northern Security Company for violating the Sherman Anti-Trust Law in creating a railroad monopoly in the Northwest that was, according to Knox, “infinite in scope, perpetual in character.” J. P. Morgan was one of the named defendants. The public was now aroused. 

On December 14, 1903, Knox masterfully argued before the United States Supreme Court that any obstruction to commerce should be removed by the government and that the Northern Security Company, as it currently existed, was uncontrollable by the individual states. On March 14, 1904, in a 5-4 decision, the court affirmed a lower court ruling that the Sherman Act had been violated. 

Roosevelt’s popularity soared as he approached the upcoming election in November, and millionaires “stood in line” to make contributions for his campaign as soon as they realized he would be easily elected. He had been born to wealth and sincerely believed it must be repaid with public service, not money-seeking power. He became increasingly repulsed by men who abused the privilege of wealth: “It tired me to talk to rich men. You expect a man of millions, the head of a great industry, to be a man worth hearing; but as a rule they don’t know anything outside their own businesses.” 

In 1905-1906 he began looking at employer liability. He called for a comprehensive Congressional study of the subject, sought an investigation into child-labor abuses, wanted legislation to maintain sanitary standards in the food industry, and advocated governmental supervision of insurance corporations. Eventually he enacted three new laws in these areas: (1) a re-enacted Federal Employers’ Liability Act, (2) the Workmans Compensation Act for federal employees, and (3) the Child Labor Act for the District of Columbia. 

Roosevelt was a voracious reader, a student of history, culture and science. His moral compass was secure and he held strong convictions about a “square-deal” for all parties. He knew how to lead the nation, in both politics and rhetoric. 

He left us with the well-known mantra, “Speak softly but carry a big stick,” which was a West African proverb. On one occasion he explained in a speech: If a man continually blusters, if he lacks civility, a big stick will not save him from trouble; but neither will speaking softly avail, if back of the softness there does not lie strength, power. 

Theodore Rex helps us to remember the lessons of the past and should be required reading for all those who seek an understanding of workplace safety issues and the dynamics between corporate wealth, labor and politics.

Leonard T. Jernigan, Jr. practices in Raleigh, North Carolina (The Jernigan Law Firm). Mr. Jernigan is the author of North Carolina Practice, Workers Compensation Law and Practice 4th ed. He has been recognized by Best Lawyers in Americaand Super Lawyers. Leonard T. Jernigan, Jr. is an Adjunct Professor of Workers Compensation Law at North Central University School of Law. He is one of only 48 workers' compensation attorneys in the United States authorized by the National Football League Players Association (NFLPA) to represent its members. He is also authorized to represent players in the National Hockey League (NHL) and the Professional Hockey Players Association (PHPA) as well as other professional athletes.

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