The Metamorphosis
of Andrew Carnegie

Roosevelt's bellicose attitude toward capitalists and big business continued to rattle Wall Street in early 1907 as he proclaimed his intention to regulate all large trusts and opened a preliminary investigation of Standard Oil for an antitrust suit. Compounding the investment community's anxiety, England's and Germany's cash-starved governments, which had witnessed their capital depleted during the Boer War, raised their interest rates to attract investors, causing money to drain from the United States and credit to tighten. All of this made for stormy seas: by March 1907, the public's confidence had reached ebb tide, and the stock market was a floundering ship. As distasteful as it was to him, Roosevelt was forced to seek advice from Pierpont Morgan, who visited him in Washington on March 12, and Carnegie, who wrote him the day Morgan was there. In support of Roosevelt, Carnegie called for strict federal regulations to govern Wall Street and encouraged the president: “We cannot trust this to the Gamblers, for such they are.” 1

It was too late. Two days later the stock market crashed, the Dow Jones losing 25 percent of its value. While men like Woodrow Wilson, then president of Princeton, blamed Roosevelt and his policies, Carnegie attempted to bolster his confidence by supporting his position that the government must take a stronger hand in regulating private enterprise. “Nothing radical needed, but this is imperative, Carnegie concluded. He promulgated this message in letters to the editor and interviews in an attempt to force change. 2

Contrary to what Carnegie told Roosevelt, radical medicine was needed. In October, yet another banking panic would hit New York. It was precipitated by the rapacious Wall Street speculators F. Augustus Heinze and Charles W. Morse, who attempted to corner the copper market and failed. The alarm sounded. There was a run by depositors on the trust companies that had financed their ill-advised venture, causing those banks to fail; stocks


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