The banker evaded most questions on the operations of specific rail-
ways. When asked about the Northern Pacific and the recent panic on
Wall Street, he refused to admit to any contest between Hill and Harriman
or their railroads. Gamblers or speculators, he said, particularly those who
had sold short, were to blame for inflating the price of Northern Pacific
stock. The commission tried again: Was it true or only a rumor in the fi-
nancial markets that a western railroad sought to establish control over two
transcontinental lines? “I never listen to rumors,” Schiff replied, nor did he
know anything about the matter. The commission circumspectly refrained
from challenging Schiff, and it complimented him on his testimony. One
member later charged, however, that Washington had advised the panel to
“soft-pedal” its inquiry of the banker.^58
As soon as he learned of the government’s intention to prosecute the
Northern Securities Company, Schiff expressed to the president his strong
opposition. He explained that his concern went beyond the issue of the
particular holding company. A suit that attempted to block the natural
trend toward combinations put the government in a no-win situation. “If
the Courts should decide against the Government, the President’s prestige
cannot but suffer.” Quite probably, harsher laws than the Sherman Act
would be passed and would do even “greater mischief.” If the courts de-
cided for the government, the result would be even bleaker. “The decision
sought by the Administration... will... strike with vehemence at almost
every Railroad Company in this country.... [It] will call forth a disorgan-
ization and a chaos such as never have been known before in our history,
and it will shake the structure, upon which our existing prosperity rests, to
its very foundations.” A situation would be created “such as has not existed
since after the attack of President Jackson upon the Bank of the United
States.” When Schiff met with Roosevelt and Attorney-General Philander
Knox, he told TR that he was “playing with fire” on a path that could lead
to rampant radicalism.^59
While the case was pending, Schiff’s fears were exacerbated. To be sure,
it was better for the Northern Securities Company to know sooner rather
than later where it stood with the government, but that was scant comfort.
He predicted that a decision in the government’s favor boded ill. It would
mean that if a company had any power to restrain trade, that power, even if
not acted upon, was illegal. Moreover, “almost anyone for the purpose of
blackmail or sinister purposes, has it in his power to open fire upon and ha-
rass most of the large railroad and industrial combinations.” He explained
to Cassel that since all major railroads controlled competing lines, all
would be affected by a government victory. If Roosevelt continued on a
reckless course, Schiff predicted utter ruin for the country’s prosperity and
commercial supremacy.^60
Despite his opposition to the suit, Schiff carefully refrained from attack-
20 Jacob H. Schiff