Business and Industry, Trust-busting
In 1901, the Northern Securities Company was formed as a holding company in the business-friendly state of New Jersey. The new venture brought together the talents and wealth of J.P. Morgan and James J. Hill on one side and E.H. Harriman on the other. These former competitors joined forces in an effort to dominate railroad traffic in the West. The NSC controlled the stock of the Great Northern, Northern Pacific and the Chicago, Burlington & Quincy railroads. Noting that traffic between Chicago and the Northwest was monopolized, Roosevelt in 1902 ordered Attorney General Philander C. Knox to bring suit, alleging restraint of trade. Morgan and Mark Hanna pleaded personally with the president to halt the action, but to no avail. In court, Northern Securities attorneys argued that the company did not really engage in interstate commerce, but simply was a stockholder. By the narrowest of margins, five to four, the Supreme Court in 1904 sided with the government and ordered the NSC's breakup. This decision was notable for the following reasons:
- The Supreme Court reversed a position taken previously in the E.C. Knight case
- The giant push of E.H. Harriman to consolidate the nation’s railroads was halted
- Enthusiasm for creating holding companies was dampened
- Roosevelt’s popularity skyrocketed among the masses.
See other Theodore Roosevelt domestic activity.
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