ON DECEMBER 3, 1901, in his first annual message to Congress, Teddy Roosevelt began to articulate the new anti-monopoly doctrine that would define his presidency. “Great corporations exist only because they are created and safeguarded by our institutions,” he said in the address, read aloud to Congress by a succession of clerks who took turns slogging through the 80-page, leatherbound volume, “and it is therefore our right and our duty to see that they work in harmony with these institutions.” He asserted that the federal government should assume “power of supervision and regulation over all corporations doing an interstate business.”
The US economy had by then undergone decades of consolidation in which entire industries—oil, steel, sugar, tobacco, whiskey—were swallowed up into trusts, monopolistic arrangements wherein unlimited corporate assets, operating in a multitude of states, could be controlled by a single entity. America’s railroads, the arterial system of the economy, weren’t yet an outright monopoly, but things were barreling in that direction—they were ruled largely by six factions, which commanded about 165,000 of the nation’s 204,000 miles of trackage.
Northern Securities, formed in November 1901 under the permissive corporate laws of New Jersey, represented a new leap in the concentration of railroad ownership. This massive holding company (a new twist on the trust concept) controlled the Northern Pacific; Great Northern; and Chicago, Burlington, and Quincy railroads, whose lines collectively dominated northwestern rail traffic, and its board contained representatives of many of the six major railroad interests, including the Rockefellers, Vanderbilts, and Goulds.
To Roosevelt, this budding monopoly was an irresistible test case of the government’s regulatory clout. Several months after his speech, his administration sued to dismantle Northern Securities under the Sherman Anti-Trust Act, an 1890 law that had mostly lain
