_Mr. Mayor, and you, my Fellow-Americans_:
I shall ask your attention to what I say to-night, because I intend
to make a perfectly serious argument to you, and I shall be obliged
if you will remain as still as possible; and I ask that those at
the very back will remember that if they talk or make a noise it
interferes with the hearing of the rest. I intend to speak to you
on a serious subject and to make an argument as the Chief Executive
of a nation, who is the President of all the people, without regard
to party, without regard to section. I intend to make to you an
argument from the standpoint simply of one American talking to his
fellow-Americans upon one of the great subjects of interest to all
alike; and that subject is what are commonly known as trusts. The word
is used very loosely and almost always with technical inaccuracy.
The average man, however, when he speaks of the trusts means rather
vaguely all of the very big corporations, the growth of which has been
so signal a feature of our modern civilization, and especially those
big corporations which, though organized in one State, do business in
several States, and often have a tendency to monopoly.
The whole subject of the trusts is of vital concern to us, because it
presents one, and perhaps the most conspicuous, of the many problems
forced upon our attention by the tremendous industrial development
which has taken place during the last century, a development which
is occurring in all civilized countries, notably in our own. There
have been many factors responsible for bringing about these changed
conditions. Of these, steam and electricity are the chief. The
extraordinary changes in the methods of transportation of merchandise
and of transmission of news have rendered not only possible, but
inevitable, the immense increase in the rate of growth of our great
industrial centres—that is, of our great cities. I want you to bring
home to yourselves that fact. When Cincinnati was founded news could
be transmitted and merchandise carried exactly as has been the
case in the days of the Roman Empire. You had here on your river
the flat-boat, you had on the ocean the sailing-ship, you had the
pack-train, you had the wagon, and every one of the four was known
when Babylon fell. The change in the last hundred years has been
greater by far than the changes in all the preceding three thousand.
Those are the facts. Because of them have resulted the specialization
of industries, and the unexampled opportunities offered for the
employment of huge amounts of capital, and therefore for the rise
in the business world of those master-minds through whom alone it
is possible for such vast amounts of capital to be employed with
profit. It matters very little whether we like these new conditions
or whether we dislike them; whether we like the creation of these new
opportunities or not. Many admirable qualities which were developed
in the older, simpler, less progressive life have tended to atrophy
under our rather feverish, high-pressure, complex life of to-day.
But our likes and dislikes have nothing to do with the matter. The
new conditions are here. You can’t bring back the old days of the
canalboat and stagecoach if you wish. The steamboat and the railroad
are here. The new forces have produced both good and evil. We can not
get rid of them—even if it were not undesirable to get rid of them;
and our instant duty is to try to accommodate our social, economic and
legislative life to them, and to frame a system of law and conduct
under which we shall get out of them the utmost possible benefit and
the least possible amount of harm. It is foolish to pride ourselves
upon our progress and prosperity, upon our commanding position in the
international industrial world, and at the same time have nothing but
denunciation for the men to whose commanding position we in part owe
this very progress and prosperity, this commanding position.
Whenever great social or industrial changes take place, no matter
how much good there may be to them, there is sure to be some evil;
and it usually takes mankind a number of years and a good deal of
experimenting before they find the right ways in which so far as
possible to control the new evil, without at the same time nullifying
the new good. I am stating facts so obvious that if each one of
you will think them over you will think them trite, but if you read
or listen to some of the arguments advanced, you will come to the
conclusion that there is need of learning these trite truths. In these
circumstances the effort to bring the new tendencies to a standstill
is always futile and generally mischievous; but it is possible
somewhat to develop them aright. Law can to a degree guide, protect
and control industrial development, but it can never cause it, or play
more than a subordinate part in its healthy development—unfortunately
it is easy enough by bad laws to bring it to an almost complete stop.
In dealing with the big corporations which we call trusts, we must
resolutely purpose to proceed by evolution and not revolution. We
wish to face the facts, declining to have our vision blinded either
by the folly of those who say there are no evils, or by the more
dangerous folly of those who either see, or make believe that they
see, nothing but evil in all the existing system, and who if given
their way would destroy the evil by the simple process of bringing
ruin and disaster to the entire country. The evils attendant upon
over-capitalization alone are, in my judgment, sufficient to warrant
a far closer supervision and control than now exists over the great
corporations. Wherever a substantial monopoly can be shown to exist
we should certainly try our utmost to devise an expedient by which it
can be controlled. Doubtless some of the evils existing in or because
of the great corporations can not be cured by any legislation which
has yet been proposed, and doubtless others, which have really been
incident to the sudden development in the formation of corporations
of all kinds, will in the end cure themselves. But there will remain
a certain number which can be cured if we decide that by the power of
the Government they are to be cured. The surest way to prevent the
possibility of curing any of them is to approach the subject in a
spirit of violent rancor, complicated with total ignorance of business
interests and fundamental incapacity or unwillingness to understand
the limitations upon all law-making bodies. No problem, and least of
all so difficult a problem as this, can be solved if the qualities
brought to its solution are panic, fear, envy, hatred, and ignorance.
There can exist in a free republic no man more wicked, no man more
dangerous to the people, than he who would arouse these feelings in
the hope that they would redound to his own political advantage.
Corporations that are handled honestly and fairly, so far from being
an evil, are a natural business evolution and make for the general
prosperity of our land. We do not wish to destroy corporations, but we
do wish to make them subserve the public good. All individuals, rich
or poor, private or corporate, must be subject to the law of the land;
and the government will hold them to a rigid obedience thereof. The
biggest corporation, like the humblest private citizen, must be held
to strict compliance with the will of the people as expressed in the
fundamental law. The rich man who does not see that this is in his
interest is indeed short-sighted. When we make him obey the law we
ensure for him the absolute protection of the law.
The savings banks show what can be done in the way of genuinely
beneficent work by large corporations when intelligently administered
and supervised. They now hold over twenty-six hundred millions of the
people’s money and pay annually about one hundred millions of interest
or profit to their depositors. There is no talk of danger from these
corporations; yet they possess great power, holding over three times
the amount of our present national debt, more than all the currency,
gold, silver, greenbacks, etc., in circulation in the United States.
The chief reason for there being no talk of danger from them is that
they are on the whole faithfully administered for the benefit of all,
under wise laws which require frequent and full publication of their
condition, and which prescribe certain needful regulations with which
they have to comply, while at the same time giving full scope for the
business enterprise of their managers within these limits.
Now of course savings banks are as highly specialized a class of
corporations as railroads, and we can not force too far the analogy
with other corporations; but there are certain conditions which I
think we can lay down as indispensable to the proper treatment of all
corporations which from their size have become important factors in
the social development of the community.
Before speaking, however, of what can be done by way of remedy let
me say a word or two as to certain proposed remedies which, in my
judgment, would be ineffective or mischievous. The first thing to
remember is that if we are to accomplish any good at all it must be
by resolutely keeping in mind the intention to do away with any evils
in the conduct of big corporations, while steadfastly refusing to
assent to indiscriminate assault upon all forms of corporate capital
as such. The line of demarcation we draw must always be on conduct,
not upon wealth; our objection to any given corporation must be, not
that it is big, but that it behaves badly. Perfectly simple again, my
friends, but not always heeded by some of those who would strive to
teach us how to act toward big corporations. Treat the head of the
corporation as you would treat all other men. If he does well stand
by him. You will occasionally find the head of a big corporation who
objects to that treatment; very good, apply it all the more carefully.
Remember, after all, that he who objects because he is the head of a
big corporation to being treated like any one else is only guilty of
the same sin as the man who wishes him treated worse than any one else
because he is the head of a big corporation. Demagogic denunciation of
wealth is never wholesome and is generally dangerous; and not a few
of the proposed methods of curbing the trusts are dangerous chiefly
because all insincere advocacy of the impossible is dangerous. It is
an unhealthy thing for a community when the appeal is made to follow
a course which those who make the appeal either do know, or ought to
know, can not be followed; and which, if followed, would result in
disaster to everybody. Loose talk about destroying monopoly out of
hand without a hint as to how the monopoly should even be defined
offers a case in point.
Nor can we afford to tolerate any proposal which will strike at the
so-called trusts only by striking at the general well-being. We are
now enjoying a period of great prosperity. The prosperity is generally
diffused through all sections and through all classes. Doubtless there
are some individuals who do not get enough of it, and there are others
who get too much. That is simply another way of saying that the wisdom
of mankind is finite; and that even the best human system does not
work perfectly. You don’t have to take my word for that. Look back
just nine years. In 1893 nobody was concerned in downing the trusts.
Everybody was concerned in trying to get up himself. The men who
propose to get rid of the evils of the trusts by measures which would
do away with the general well-being, advocate a policy which would
not only be a damage to the community as a whole, but which would
defeat its own professed object. If we are forced to the alternative
of choosing either a system under which most of us prosper somewhat,
though a few of us prosper too much, or else a system under which
no one prospers enough, of course we will choose the former. If the
policy advocated is so revolutionary and destructive as to involve
the whole community in the crash of common disaster, it is as certain
as anything can be that when the disaster has occurred all efforts
to regulate the trusts will cease, and that the one aim will be to
restore prosperity.
A remedy much advocated at the moment is to take off the tariff
from all articles which are made by trusts. To do this it will be
necessary first to define trusts. The language commonly used by the
advocates of the method implies that they mean all articles made by
large corporations, and that the changes in tariff are to be made
with punitive intent toward these large corporations. Of course if
the tariff is to be changed in order to punish them, it should be
changed so as to punish those that do ill, not merely those that are
prosperous. It would be neither just nor expedient to punish the big
corporations as big corporations; what we wish to do is to protect
the people from any evil that may grow out of their existence or
maladministration. Some of those corporations do well and others do
ill. If in any case the tariff is found to foster a monopoly which
does ill, of course no protectionist would object to a modification
of the tariff sufficient to remedy the evil. But in very few cases
does the so-called trust really monopolize the market. Take any very
big corporation—I could mention them by the score—which controls,
say, something in the neighborhood of half of the products of a given
industry. It is the kind of corporation that is always spoken of
as a trust. Surely in rearranging the schedules affecting such a
corporation it would be necessary to consider the interests of its
smaller competitors which control the remaining part, and which,
being weaker, would suffer most from any tariff designed to punish
all the producers; for, of course, the tariff must be made light or
heavy for big and little producers alike. Moreover, such a corporation
necessarily employs very many thousands, often very many tens of
thousands of workmen, and the minute we proceeded from denunciation
to action it would be necessary to consider the interests of these
workmen. Furthermore, the products of many trusts are unprotected, and
would be entirely unaffected by any change in the tariff, or at most
very slightly so. The Standard Oil Company offers a case in point;
and the corporations which control the anthracite coal output offer
another—for there is no duty whatever on anthracite coal.
I am not now discussing the question of the tariff as such; whether
from the standpoint of the fundamental difference between those who
believe in a protective tariff and those who believe in free trade; or
from the standpoint of those who, while they believe in a protective
tariff, feel that there could be a rearrangement of our schedules,
either by direct legislation or by reciprocity treaties, which would
result in enlarging our markets; nor yet from the standpoint of those
who feel that stability of economic policy is at the moment our prime
economic need, and that the benefits to be derived from any change
in schedules would not compensate for the damage to business caused
by the widespread agitation which would follow any attempted general
revision of the tariff at this moment. Without regard to the wisdom
of any one of those three positions it remains true that the real
evils connected with the trusts can not be remedied by any change
in the tariff laws. The trusts can be damaged by depriving them of
the benefits of a protective tariff, only on condition of damaging
all their smaller competitors, and all the wage-workers employed in
the industry. This point is very important, and it is desirable to
avoid any misunderstanding concerning it. I am not now considering
whether or not, on grounds totally unconnected with the trusts, it
would be well to lower the duties on various schedules, either by
direct legislation or by legislation or treaties designed to secure
as an offset reciprocal advantages from the nations with which we
trade. My point is that changes in the tariff would have little
appreciable effect on the trusts save as they shared in the general
harm or good proceeding from such changes. No tariff change would help
one of our smaller corporations, or one of our private individuals
in business, still less one of our wage-workers, as against a large
corporation in the same business; on the contrary, if it bore heavily
on the large corporation it would inevitably be felt still more by
that corporation’s weaker rivals, while any injurious result would
of necessity be shared by both the employer and the employed in the
business concerned. The immediate introduction of substantial free
trade in all articles manufactured by trusts, that is, by the largest
and most successful corporations, would not affect some of the most
powerful of our business combinations in the least, save by the damage
done to the general business welfare of the country; others would
undoubtedly be seriously affected, but much less so than their weaker
rivals, while the loss would be divided between the capitalists and
the laborers; and after the years of panic and distress had been
lived through, and some return to prosperity had occurred, even
though all were on a lower plane of prosperity than before, the
relative difference between the trusts and their rivals would remain
as marked as ever. In other words, the trust, or big corporation,
would have suffered relatively to, and in the interest of, its foreign
competitor; but its relative position toward its American competitors
would probably be improved; little would have been done toward cutting
out or minimizing the evils in the trusts; nothing toward securing
adequate control and regulation of the large modern corporations. In
other words, the question of regulating the trusts with a view to
minimizing or abolishing the evils existent in them is separate and
apart from the question of tariff revision.
You must face the fact that only harm will come from a proposition
to attack the so-called trusts in a vindictive spirit by measures
conceived solely with a desire of hurting them, without regard as to
whether or not discrimination should be made between the good and
evil in them, and without even any regard as to whether a necessary
sequence of the action would be the hurting of other interests.
The adoption of such a policy would mean temporary damage to the
trusts, because it would mean temporary damage to all of our business
interests; but the effect would be only temporary, for exactly as the
damage affected all alike, good and bad, so the reaction would affect
all alike, good and bad. The necessary supervision and control, in
which I firmly believe as the only method of eliminating the real
evils of the trusts, must come through wisely and cautiously framed
legislation, which shall aim in the first place to give definite
control to some sovereign over the great corporations, and which shall
be followed, when once this power has been conferred, by a system
giving to the Government the full knowledge which is the essential for
satisfactory action. Then when this knowledge—one of the essential
features of which is proper publicity—has been gained, what further
steps of any kind are necessary can be taken with the confidence born
of the possession of power to deal with the subject, and of a thorough
knowledge of what should and can be done in the matter.
We need additional power; and we need knowledge. Our Constitution was
framed when the economic conditions were so different that each State
could wisely be left to handle the corporations within its limits
as it saw fit. Nowadays all the corporations which I am considering
do what is really an interstate business, and as the States have
proceeded on very different lines in regulating them, at present a
corporation will be organized in one State, not because it intends to
do business in that State, but because it does not, and therefore that
State can give it better privileges, and then it will do business in
some other States, and will claim not to be under the control of the
States in which it does business; and of course it is not the object
of the State creating it to exercise any control over it, as it does
not do any business in that State. Such a system can not obtain. There
must be some sovereign. It might be better if all the States could
agree along the same lines in dealing with these corporations, but
I see not the slightest prospect of such an agreement. Therefore, I
personally feel that ultimately the nation will have to assume the
responsibility of regulating these very large corporations which do an
interstate business. The States must combine to meet the way in which
capital has combined; and the way in which the States can combine is
through the National Government. But I firmly believe that all these
obstacles can be met if only we face them, both with the determination
to overcome them, and with the further determination to overcome them
in ways which shall not do damage to the country as a whole; which on
the contrary shall further our industrial development, and shall help
instead of hindering all corporations which work out their success by
means that are just and fair toward all men.
Without the adoption of a constitutional amendment, my belief is that
a good deal can be done by law. It is difficult to say exactly how
much, because experience has taught us that in dealing with these
subjects, where the lines dividing the rights and duties of the States
and of the Nation are in doubt, it has sometimes been difficult for
Congress to forecast the action of the courts upon its legislation.
Such legislation (whether obtainable now, or obtainable only after a
constitutional amendment) should provide for a reasonable supervision,
the most prominent feature of which at first should be publicity; that
is, the making public, both to the governmental authorities and to the
people at large, the essential facts in which the public is concerned.
This would give us exact knowledge of many points which are now not
only in doubt, but the subject of fierce controversy. Moreover, the
mere fact of the publication would cure some very grave evils, for the
light of day is a deterrent to wrongdoing. It would doubtless disclose
other evils with which, for the time being, we could devise no way to
grapple. Finally, it would disclose others which could be grappled
with and cured by further legislative action.
Remember, I advocate the action which the President can only advise,
and which he has no power himself to take. Under our present
legislative and constitutional limitations the national executive
can work only between narrow lines in the field of action concerning
great corporations. Between those lines, I assure you that exact and
even-handed justice will be dealt, and is being dealt, to all men,
without regard to persons.
I wish to repeat with all emphasis that desirable though it is that
the nation should have the power I suggest, it is equally desirable
that it should be used with wisdom and self-restraint. The mechanism
of modern business is tremendous in its size and complexity, and
ignorant intermeddling with it would be disastrous. We should not be
made timid or daunted by the size of the problem; we should not fear
to undertake it; but we should undertake it with ever-present in our
minds dread of the sinister spirits of rancor, ignorance, and vanity.
We need to keep steadily in mind the fact that besides the tangible
property in each corporation there lies behind the spirit which brings
it success, and in the case of each very successful corporation this
is usually the spirit of some one man or set of men. Under exactly
similar conditions one corporation will make a stupendous success
where another makes a stupendous failure, simply because one is well
managed and the other is not. While making it clear that we do not
intend to allow wrongdoing by one of the captains of industry any more
than by the humblest private in the industrial ranks, we must also
in the interests of all of us avoid cramping a strength which, if
beneficently used, will be for the good of all of us. The marvelous
prosperity we have been enjoying for the past few years has been
due primarily to the high average of honesty, thrift, and business
capacity among our people as a whole; but some of it has also been
due to the ability of the men who are the industrial leaders of the
nation. In securing just and fair dealing by these men let us remember
to do them justice in return, and this not only because it is our
duty, but because it is our interest; not only for their sakes, but
for ours. We are neither the friend of the rich man as such, nor the
friend of the poor man as such; we are the friend of the honest man,
rich or poor; and we intend that all men, rich and poor alike, shall
obey the law alike and receive its protection alike.
AT THE BANQUET OF THE SPANISH WAR VETERANS, DETROIT, MICH., SEPTEMBER
22, 1902
_Mr. Mayor, and you, my Comrades, and all of you, my
Fellow-Americans, Men and Women of Detroit_:
While the war with Spain was easy enough, the tasks left behind,
though glorious, have been hard. You, the men of the Spanish War, and
your comrades in arms who fought in Cuba and Porto Rico and in the
Philippines, won renown for the country, added to its moral grandeur
and to its material prosperity; but you also left duties to be done
by those who came after you. In Porto Rico the duty has been merely
administrative, and it has been so well done that very little need be
said about it.
I speak in the presence not only of the men who fought in the Spanish
War and in the Philippine War, which was its aftermath, but in the
presence of those who fought in the great Civil War; and more than
that, I speak here in a typical city of the old Northwest, what is now
the Middle West, in a typical State of our Union. You men of Michigan
have been mighty in war and mighty in peace. You belong to a country
mighty in war and mighty in peace—a country of a great past, whose
great present is but an earnest of an even greater future. The world
has never seen more marvelous prosperity than that which we now enjoy,
and this prosperity is not ephemeral. We shall have our ups and downs.
The waves at times will recede, but the tide will go steadily higher.
This country has never yet been called upon to meet a crisis in war
or a crisis in peace to which it did not eventually prove equal. I
preach the gospel of hope to you men of the West who in thought and
life embody this gospel of hope, this gospel of resolute and confident
belief in your own powers and in the destiny of this mighty Republic.
I believe in the future—not in a spirit which will sit down and look
for the future to work itself out—but with a determination to do
its part in making the future what it can and shall be made. We are
optimists. We spurn the teachings of despair and distrust. We have
an abiding faith in the growing strength, the growing future of the
mighty young nation, still in the flush of its youth, and yet with the
might of a giant, which stands on a continent and grasps an ocean with
either hand.
Succeed? Of course we shall succeed! How can success fail to come to
a race of masterful energy and resoluteness, which has a continent
for the base of its domain, and which feels within its veins the
thrill that comes to generous souls when their strength stirs in
them, and they know that the future is theirs? No great destiny
ever yet came to a people walking with their eyes on the ground and
their faces shrouded in gloom. No great destiny ever yet came to a
people who feared the future, who feared failure more than they hoped
for success. With such as these we have no part. We know there are
dangers ahead, as we know there are evils to fight and overcome,
but we feel to the full the pulse of the prosperity which we enjoy.
Stout of heart, we see across the dangers the great future that lies
beyond, and we rejoice as a giant refreshed, as a strong man girt
for the race; and we go down into the arena where the nations strive
for mastery, our hearts lifted with the faith that to us and to our
children and our children’s children it shall be given to make this
Republic the mightiest among the peoples of mankind.