Free The Great Pierpont Morgan by Frederick Lewis; Allen Page B

the country gathered at Morgan’s brownstone house in December 1888 and January 1889, one of their first moves was to set up a committee to confer with the Interstate Commerce Commission. But that was a polite gesture toward the nominal authority over the regulation of railroad abuses. The nearest thing to a real authority was the big, solid man with the red nose and fierce eyes who sat at the head of the table at the library in his own house and spoke for the investors who owned the roads.
    One can measure the height to which Morgan’s prestige and influence had risen by the fact that when the conference of railroad presidents met for its adjourned sessions on January 8 and 10, 1889, every major railroad west of Chicago and St. Louis was represented except the Chicago & Alton and the Southern Pacific—and the absence of Huntington of the Southern Pacific was said not to signify any opposition to Morgan’s purpose. Even Jay Gould, who at the time was head of the Missouri Pacific, had accepted Morgan’s invitation. The presidents of the trunk lines were there too—Roberts of the Pennsylvania, Depew of the New York Central, King of the Erie, Mayer of the Baltimore & Ohio, Sloan of the Lackawanna, Wilbur of the Lehigh Valley. And representatives of several leading investment banking houses on both sides of the water were likewise on hand—not only Drexel, Morgan & Co., but also Kidder, Peabody & Co., Brown Brothers & Co., J. S. Morgan & Co., and Baring Brothers.
    It was too much of a gathering of lions to be an altogether calm occasion. At one point Roberts of the Pennsylvania pointed out sharply that there wouldn’t be much trouble about the building of ruinously competing lines if investment bankers didn’t provide the money to finance them; to which Morgan a little later replied:
    â€œIn regard to the remarks made informally by Mr. Roberts, about building parallel lines and the position of the bankers thereto, I am quite prepared to say in behalf of the houses represented here that if an organization can be formed practically on the basis submitted by the committee, with an Executive Committee able to enforce its provisions, uponwhich the bankers shall be represented, they are prepared to say that they will not negotiate, and will do all in their power to prevent the negotiation of, any securities for the construction of parallel lines, or the extension of lines not unanimously approved by such an Executive Committee.”
    That cumbersome sentence bears all the earmarks of a statement dictated to a secretary during a hurried recess in a big meeting, and then submitted to other men for suggested revisions, until in the end it bulges obesely with qualifying and amplifying phrases. Yet in effect it was clear enough. What Morgan wanted the railroad presidents to do was to make among themselves a definite agreement not to cut rates, not to build unnecessary competing lines, and so forth. He wanted them to put teeth into this agreement, so that any man who broke it would suffer penalties. And to show his own good faith in making so drastic a proposal he was producing a firm pledge that the investment bankers, for their part, were quite ready to play ball.
    The meeting appeared to end successfully. The men who sat crowded in Morgan’s library agreed to set up an association of presidents, pledged to live up to the Interstate Commerce Act and also to maintain rates, with a board of managers to arbitrate disagreements between them. Just how strong the teeth actually were was a matter of conjecture from the outset, however. After the presidents had filed out of the library and dispersed on Madison Avenue, a group of the Westerners adjourned to hold a rump session of their own at the Hotel Windsor, and one of them was quoted as saying, “We did not swallow whole the arrangement evidently prepared for us.” And the New York Times reporter, writing his front-page story for the following