Theodore Rex (118 page)

By the time he came on board at Keokuk, Iowa, on 1 October, the steamer’s passenger complement had expanded to include some twenty state governors, and Pinchot and McGee were consumed with a new idea, which they wanted him to articulate en route, at Memphis. It was that a great conference on conservation should be held at the White House in the spring of 1908—the first such gathering in the history of any nation—and that every governor in the country would be asked to attend.

A sense that the President was about to announce something enormous gathered as the USS
Mississippi
, accompanied by a flotilla of lesser ships, thrashed its way south. Crowds lined both banks, craning for a sight of Roosevelt on deck. At night, when the river’s humid mists made navigation difficult, they burned huge bonfires to light his way. They took off their hats as he passed, and refrained from cheering lest they disturb his sleep.

Roosevelt made his announcement at Memphis on 4 October, tersely, in the course of an address to the Deep Waterways Convention. “It ought to be among the most important gatherings in our history,” he said, adding that the time had come to make “an inventory of the natural resources which have been handed down to us.” The rest of his speech amounted to a summary of
McGee’s enviromental philosophy. “
There is an intimate relation,” he said, “between our streams and the development and conservation of all the other great permanent sources of wealth.”

“THE PRESIDENT WAS AGAIN ABOUT TO ANNOUNCE SOMETHING ENORMOUS.”
Roosevelt and Gifford Pinchot on the Mississippi River, October 1907
(photo credit 29.1)

The impact of this statement might have been greater if the New York Stock Exchange, which most Americans associated more clearly with wealth, had not again begun to show signs of deep unrest. Over the next two weeks, as the President lunged after bear in the canebrakes around Stamboul, Louisiana, some prices dropped to record lows, and others jiggled crazily. The initial cause of panic was a failure by two speculators, F. Augustus Heinze and Charles W. Morse, to take over the United Copper Company. They succeeded only in bankrupting two brokerage houses, another mining concern, and a bank.
These implosions, headlined across the country, revealed to the Street that Heinze and Morse had been funded in their venture
by the august Knickerbocker Trust, the very name of which signaled stability and money old and hard as bedrock.

The bedrock showed signs of crumbling on the afternoon of Friday, 18 October, as panicking Knickerbocker investors hacked out their gold deposits. Over the weekend, J. Pierpont Morgan, working like a tycoon possessed, organized two relief committees of financiers (one headed by the ubiquitous George W. Perkins) to raise funds and decide which trusts, sure to fail over the next few days, merited saving for the stability of the national economy. New York banks were at the height—or rather, the depth—of their annual currency shortage. This contributed to what James Bryce described as “
a simultaneous deficiency of capital and confidence.”

On Monday, 21 October, as the President headed home with deliberate slowness, to avoid even sharper panic, rumors circulated that the Knickerbocker had only ten million dollars left in cash. With sixty million loaned out, the trust might be unable to issue good checks past midday Tuesday. Well before that hour, Morgan saw its reserve dwindle to two million dollars, and coldly decided to let it collapse. “
I can’t go on being everybody’s goat.”

By the time Roosevelt got back to the White House on Wednesday afternoon, money was almost unobtainable on Wall Street, call loan rates had risen to 125 percent, and the entire credit structure of the United States was under siege. Morgan and George Cortelyou (forsaking all governmental dignity to serve as the great man’s aide) were holding off hordes of desperate raiders. Overnight, the Secretary agreed to deposit twenty-five million dollars in Treasury funds in national banks—more than twice as much as his pledge of seven months before.

Roosevelt seemed unaware of how acute the situation was. Radiant and purified from his hunt, he patrolled the Executive Office with his hands behind his back, regaling all comers with his exploits in the canebrakes.

“Do I look as though those Wall Street fellows were really worrying me?”

“No, Mr. President, you certainly do not.”

“I’ve got them,” he said through his teeth, “on the run.”

It was exchanges such as this that persuaded some men that Roosevelt was fiscally retarded.

By now, most of the nation’s premier plutocrats were volunteering their help to Morgan, including E. H. Harriman, Henry Clay Frick, and John D. Rockefeller, Sr., who offered, incredibly, half of all his securities. At 1:30
P.M.
on Thursday, 24 October—too late for Roosevelt to do anything except try to catch up, in briefing after briefing, with what had happened during his absence—the panic reached a point of almost terminal hysteria. The President of the New York Stock Exchange told Morgan that his institution would have to shut down. Morgan told him to wait, and summoned the chief executives of the city’s largest banks. Among them, they pledged twenty-five million dollars
to keep the Exchange open through three o’clock. Stocks rebounded at
once, and the “Roosevelt Panic of 1907” began to abate.

The President was gracious enough, on Friday, to issue a statement of congratulation to Cortelyou and “those conservative and substantial businessmen who in this crisis have acted with such wisdom and public spirit.” He used the words
confidence
and
calm
as often as possible, and managed to allay public nervousness, if not the unavoidable impression that he had been away from his desk, playing in the canebrakes, while conscientious financiers had been saving the American economy. For once they were not—and for a while yet were relieved of being—“malefactors of great wealth.”

ALTHOUGH A TOTAL
crash had been averted, the crisis on Wall Street was by no means over. The next business week, starting on Monday, 28 October, was equally fraught, with New York City on the verge of defaulting for lack of cash to borrow, and another major financial institution, the Moore & Schley brokerage house, threatening to go the same way as Knickerbocker Trust. Morgan and his men came to the aid of the city, and devised an emergency plan to save Moore & Schley by persuading U.S. Steel to buy it—or rather, to buy the collateral shares for its loans, which were invested in the Tennessee Coal and Iron Company. Elbert H. Gary did not seem to like this idea, which involved trading a large amount of U.S. Steel gold bonds for Tennessee Coal’s lower-rated stock. Nor did Frick, who worried that Roosevelt might seize on the acquisition as an excuse for yet another antitrust prosecution. The President had shown himself quite ready to bite the hand that fed him after begging for corporate campaign donations in 1904.

Judge Gary said he would endorse the Morgan plan, but only if Roosevelt endorsed it, too. He liked the President, and believed him to be a pragmatic man, responsive to reasoned argument. Early on Monday, 4 November, he and Frick visited the White House for breakfast. Roosevelt was so impressed by their willingness to consummate an undesirable deal in order to forestall a “general industrial smashup,” that he agreed within twenty minutes to let them go ahead. Immediately after their departure, he let Attorney General Bonaparte know that the acquisition had his approval.

The New York Stock Exchange had not yet opened when
Gary called George Perkins to advise him of Roosevelt’s goodwill. Perkins passed on the news just before nine o’clock. Relief flooded the market, and within hours prices began to rally.

ON 11 NOVEMBER
, Roosevelt signed forty-six copies of a document, which more than any other he had ever written could justifiably be called a “posterity
letter,” in that it addressed itself, with the utmost urgency, to the future. It was his promised call for a national conservation conference. One copy went to each state and territorial governor, and a further five hundred copies to a cross-section of the most influential men in the country, from members of Congress and Justices of the Supreme Court to industrial tycoons and editors of major newspapers.

“It seems to me time for the country to take account of its natural resources,” the President wrote, “and to enquire how long they are likely to last.”

The suggestion that anything so unquantifiable as the mineral and vegetal and hydrological wealth of one of the world’s largest nations might, in fact, be rendered into an “account” was almost as shocking as the cold, hard tone of Roosevelt’s last seven words. He wrote with the finality of a man who had, with his own eyes, seen the last few flutterings of a species that had once been capable of blackening the sky.

“We are prosperous now,” he continued, not even bothering to qualify his statement. Wall Street’s current recession was as trivial, historically speaking, as a waver in one of a redwood’s hundreds of growth rings. “We should not forget that it will be just as important to our descendants to be prosperous in their time as it is to us to be prosperous in our time.” He repeated what he had said at Memphis about the gravity of the responsibility Americans had to pass on to their children a protected natural heritage. For more than a century, that endowment had been “depleted and in not a few cases exhausted,” especially in the northeastern states. The situation was already so serious that it was a matter for all government, not merely the federal government, to face: