Part 4

I do not wish to see the Nation forced into ownership of the railways if it can possibly be avoided; and the only alternative is thoroughgoing and effective regulation, which shall be based on full knowledge of all the facts, including a physical valuation of the property, the details of its capitalization, and the like. We should immediately set about securing this physical valuation. The Government should oversee the issuance of all stocks and bonds, and should have complete power over rates and traffic agreements. The railways are really highways, and it is the fundamental right of the people as a whole to see that they are open to use on just and reasonable terms, equal to all persons. The Hepburn Bill marked a great step in advance; the law of last session, in its final shape and as actually passed, marks, on the whole, another decided step in advance.

Corporate regulation is merely one phase of a vast problem. The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man’s making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being.

Corporations are necessary to the effective use of the forces of production and commerce under modern conditions. We cannot effectively prohibit all combinations without doing far-reaching economic harm; and it is mere folly to do as we have done in the past—to try to combine incompatible systems—that is, to try both to prohibit and regulate combinations. Combinations in industry are the result of an imperative economic law which cannot be repealed by political legislation. The effort at prohibiting all combination has substantially failed. The only course left is active corporate regulation—that is, the control of corporations for the common good—the suppression of the evils that they work, and the retention, as far as may be, of that business efficiency in their use which has placed us in the forefront of industrial peoples. I need waste no words upon our right so to control them. The corporation is the creature of government, and the people have the right to handle it as they desire; all they need pay attention to is the expediency of realizing this right in some way that shall be productive of good and not harm. The corporate manager who achieves success by honest efficiency in giving the best service to the public should be favored because we all benefit by his efficiency. He realizes Abraham Lincoln’s definition which I have quoted above, because he works for his own material betterment and at the same time for the “amelioration of mankind,” and he should be helped by the Government because his success is good for the National welfare. But a man who grasps and holds business power by breaking the industrial efficiency of others, who wins success by methods which are against the public interest and degrading to the public morals, should not be permitted to exercise such power. Instead of punishing him by a long and doubtful process of the law after the wrong has been committed, there should be such effective Government regulation as to check the evil tendencies at the moment that they start to develop. Overcapitalization in all its shapes is one of the prime evils; for it is one of the most fruitful methods by which unscrupulous men get improper profits, and when the holdings come into innocent hands we are forced into the uncomfortable position of being obliged to reduce the dividends of innocent investors, or of permitting the public and the wage-workers, either or both, to suffer. Such really effective control over great inter-State business can come only from the National Government. The American people demands the new Nationalism needful to deal with the new problems; it puts the National need above sectional or personal advantage; it is impatient of the utter confusion which results from local legislatures attempting to treat National issues as local issues; it is still more impatient of the National impotence which springs from the over-division of governmental powers; the impotence which makes it possible for local selfishness, or for the vulpine legal cunning which is hired by wealthy special interests, to bring National activities to a deadlock.

The control must be exercised in several different ways. It may be that National incorporation is not at the moment possible; but there must be some affirmative National control, on terms which will secure publicity in the affairs of and complete supervision and control over the big, Nation-wide business corporations; a control that will prevent and not legalize abuses. Such control should imply the issuance of securities by corporations only under thoroughgoing Governmental supervision, and after compliance with Governmental requirements which shall effectually prevent overcapitalization. Such control should protect and favor the corporation which acts honestly, exactly as it should check and punish, when it cannot prevent, every species of dishonesty.

In the Inter-State Commerce Commission and in the Federal Bureau of Corporations we have bodies which, if their powers are sufficiently enlarged after the right fashion, can render great and substantial service. The average American citizen should have presented to him in a simple and easily comprehended form the truth about the business affairs that affect his daily life as consumer, employee, employer, as investor, as voter. The issue of securities should be subject to rigorous Government supervision. There are concrete instances of unfair competition that can be reached under the Federal criminal legislation, and they should be attacked and destroyed in the courts. But the laws should be such that normally, and save in extraordinary circumstances, there should be no need of recourse to the courts. What is needed is administrative supervision and control. This should be so exercised that the highways of commerce and opportunity should be open to all; and not nominally open, but really open, a consistent effort being made to deprive every man of any advantage that is not due to his own superiority and efficiency, controlled by moral purpose. The National Bureau of Corporations has not been given the powers or the funds to develop its full usefulness, and yet it offers one of the prime means at the disposal of the people of keeping them fully acquainted with all the facts about corporation control. We have a right to expect from this Bureau and from the Inter-State Commerce Commission a very high grade of public service. We should be as sure of the proper conduct of inter-State railways and the proper management of inter-State business as we are now sure of the conduct and management of the National banks, and we should have as effective supervision in one case as in the other.

Not only as a matter of justice and honesty, but as a matter of prime popular interest, we should see that this control is so exercised as to favor a proper return to the upright business manager and honest investor. In the matter of railway rates, for instance, it is just as much our duty to see that they are not too low as that they are not too high. We must preserve the right of the railway employee to proper wages and the right of the investor to proper interest as scrupulously as we preserve the right of the shipper and the producer and the consumer. We cannot afford to do injustice, or suffer it to be done, to any of these. But in order to do justice we must have full knowledge. We must have the right to find out every fact connected with the business of the railway, so as to base our judgment, not on any one fact, but on all taken together. Inasmuch as it is so often impossible to punish wrongs done in the past, and to prevent the consequences of the wrongs thus committed being felt by one innocent class, without shifting the burden to the shoulders of another innocent class, we ought to provide that hereafter business shall be carried on from its inception in such a way as to prevent swindling. Incidentally, this will also tend to prevent that excessive profit by one man, which may not be swindling, under existing laws, but which nevertheless is against the interest of the commonwealth; To know all the facts is of as much interest to the investor and the wageworker as to the shipper, the producer, the consumer. Full knowledge of the past helps us in dealing with the future. If we find that high rates are due to overcapitalization in the past, or to any kind of sharp practice in the past, then, whether or not it is possible to take action which will partly remedy the wrong, we are certainly in a better position to prevent a repetition of the wrong.

Let me, in closing, put my position in a nutshell. When I say that I am for the square deal, I mean not merely that I stand for fair play under the present rules of the game, but that I stand for having these rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service. So far as possible, the reward should be based upon service; and this necessarily implies that where a man renders us service in return for the fortune he receives, he has the right to receive it only on terms just to the whole people. For this reason there should be a heavily progressive National inheritance tax on big fortunes. The really big fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. A heavily progressive inheritance tax on all such fortunes (heaviest on absentees) has the good qualities of an income tax, without its drawbacks; it is far more beneficial to the community at large, and far less burdensome to private individuals, as well as far more easily collected. A moderate, but progressive, income tax, carefully devised to fall genuinely on those who ought to pay, would, I believe, be a good thing; but a heavy and heavily progressive inheritance tax on great fortunes would be a far better thing.

I have tried to set before you my creed. I believe in property rights, but I believe in them as adjuncts to, and not as substitutes for, human rights. I believe that normally the rights of property coincide with the rights of man; but where they do not, then the rights of man must be put above the rights of property. I believe in shaping the ends of government to protect property; but wherever the alternative must be faced, I am for man and not for property. I am far from underestimating the importance of dividends, but I rank dividends below human character. I know well that if there is not sufficient prosperity the people will in the end rebel against any system, no matter how exalted morally; and reformers must not bring upon the people permanent economic ruin, or the reforms themselves will go down in the ruin. But we must be ready to face any temporary disaster—whether or not brought on by those who will war against us to the knife—if only through such disaster can we attain our goal. And those who oppose all reform will do well to remember that ruin in its worst form is inevitable if our National life brings us nothing whatever but a swollen and badly distributed material prosperity. In other words, I feel that material interests are chiefly good, not in themselves, but as an indispensable foundation upon which we should build a higher superstructure, a superstructure without which the foundation becomes worthless. Therefore I believe that the destinies of this country should be shaped primarily by moral forces, and by material forces only as they are subordinated to these moral forces. I believe that material wealth is an exceedingly valuable servant, and a particularly abhorrent master, in our National life. I think one end of government should be to achieve prosperity; but it should follow this end chiefly to serve an even higher and more important end—that of promoting the character and welfare of the average man. In the long run, and inevitably, the actual control of the government will be determined by the chief end which the government subserves. If the end and aim of government action is merely to accumulate general material prosperity, treating such prosperity as an end in itself and not as a means, then it is inevitable that material wealth and the masters of that wealth will dominate and control the course of national action. If, on the other hand, the achievement of material wealth is treated, not as an end of government, but as a thing of great value, it is true—so valuable as to be indispensable—but of value only in connection with the achievement of other ends, then we are free to seek through our government, and through the supervision of our individual activities, the realization of a true democracy. Then we are free to seek not only the heaping up of material wealth, but a wise and generous distribution of such wealth so as to diminish grinding poverty, and, so far as may be, to equalize social and economic no less than political opportunity.

The people as a whole can be benefited morally and materially by a system which shall permit of ample reward for exceptional efficiency, but which shall nevertheless secure to the average man who does his work faithfully and well, the reward to which he is entitled. Remember that I speak only of the man who does his work faithfully and well. The man who shirks his work, who is lazy or vicious, or even merely incompetent, deserves scant consideration; we may be sorry for his family, but it is folly to waste sympathy on the man himself; and it is also folly for sentimentalists to try to shift the burden of blame from such a man himself to “society;” and it is an outrage to give him the reward given to his hard-working, upright, and efficient brother. Still less should we waste sympathy on the criminal; there are altogether too many honest men who need it; and one chief point in dealing with the criminal should be to make him understand that he will be in personal peril if he becomes a lawbreaker. I realize entirely that in the last analysis, with the nation as with the individual, it is private character that counts for most. It is because of this realization that I gladly lay myself open to the charge that I preach too much, and dwell too much upon moral commonplaces; for though I believe with all my heart in the nationalization of this Nation—in the collective use on behalf of the American people of the governmental powers which can be derived only from the American people as a whole—yet I believe even more in the practical application by the individual of those great fundamental moralities.

A certain type of rather thinly intellectual man sneers at these moralities as “commonplaces;” and base and evil men, selfish and shortsighted men, are immensely pleased to see them denounced and derided. Yet surely it is the duty of every public man to try to make all of us keep in mind, and practice, the moralities essential to the welfare of the American people. It is of vital concern to the American people that the men and women of this great Nation should be good husbands and wives, fathers and mothers, sons and daughters; that we should be good neighbors, one to another, in business and in social life; that we should each do his or her primary duty in the home without neglecting the duty to the State; that we should dwell even more on our duties than on our rights; that we should work hard and faithfully; that we should prize intelligence, but prize courage and honesty and cleanliness even more. Inefficiency is a curse; and no good intention atones for weakness of will and flabbiness of moral, mental, and physical fiber; yet it is also true that no intellectual cleverness, no ability to achieve material prosperity, can atone for the lack of the great moral qualities which are the surest foundation of national might. In this great free democracy it behooves all the people so to bear themselves that, not with their lips only but in their lives, they shall show their fealty to the great truth pronounced of old—the truth that Righteousness exalteth a nation.

The Pioneer Spirit and American Problems

For a number of years I have believed and urged the principles I set forth in the following article. Their presentation here is in substance what I said in three recent speeches at Cheyenne, Denver, and Omaha.

The men who have made this great republic what it is, and especially the men who have turned it into a continental commonwealth, have possessed in the highest degree the great virile virtues of strength, courage, energy, and undaunted and unwavering resolution. Their typical leaders—of whom Abraham Lincoln, though the most exceptional, was the most typical—have possessed keen intelligence, and a character not merely strong but lofty, a character exalted by the fact that great power was accompanied by a high and fine determination to use this great power for the common good, for the advancement of mankind. Such men were the builders of New England. As the country grew, such men were the pioneers that pushed the frontiers of civilization westward. A hundred years ago, when men spoke of the West, they meant the country between the Alleghanies and the Mississippi. Fifty years ago the white man’s West took in Minnesota, Iowa, and Kansas, and then skipped across to California and Oregon. The country of the great plains and the Rockies has grown up within my own lifetime. I myself saw and took part in the closing years of the pioneer period, and it was my great privilege to work side by side with the pioneers—the ranchmen, the miners, the cow-punchers, the mule-skinners, the bull-whackers—who actually opened up the country. I now travel in every comfort on railways across lands which, when I first rode across them, were still the home of the Indian and the buffalo; and I find cities where one can obtain not merely comfort but luxury, in the places where, thirty years ago, there was not a building beyond a log hut or a ’dobe house. The men who did this work were engaged in the final stages of conquering the continent; and it was their privilege to do one of the great works of all time, to do their part in the performance of an epic feat in the history of the progress of mankind.

The pioneer days are over, save in a few places; and the more complex life of to-day calls for a greater variety of good qualities than were needed on the frontier. There is need at present to encourage the development of new abilities which can be brought to high perfection only by a kind of training useless in pioneer times; but these new qualities can only supplement, and never supplant, the old, homely virtues; the need for the special and distinctive pioneer virtues is as great as ever. In other words, as our civilization grows older and more complex, while it is true that we need new forms of trained ability, and need to develop men whose lives are devoted wholly to the pursuit of special objects, it is yet also true that we need a greater and not a less development of the fundamental frontier virtues.

These qualities, derived from the pioneers, were not confined to the pioneers. They are shown in the deeds of the Nation; and especially in the two great feats which during the past decade have made the deepest impression abroad—the cruise of the battle fleet around the world, and the digging of the Panama Canal.

Now, there is no use of a nation claiming to be a great nation, unless it is prepared to play a great part. A nation such as ours cannot possibly play a great part in international affairs, cannot expect to be treated as of weight in either the Atlantic or the Pacific, or to have its voice as to the Monroe Doctrine or the management of the Panama Canal heeded, unless it has a strong and thoroughly efficient navy. So far from this increase in naval strength representing on our part either a menace of aggression to weaker nations or a menace of war to stronger nations, it has told most powerfully for peace. No nation regarded the cruise as fraught with any menace of hostility to itself; and yet every nation accepted it as a proof that we were not only desirous ourselves to keep the peace, but able to prevent the peace being broken at our expense. No cruise in any way approaching it has ever been made by any fleet of any other Power; and the best naval opinion abroad had been that no such feat was possible; that is, that no such cruise as that we actually made could be undertaken by a fleet of such size without innumerable breakdowns and accidents. The success of the cruise, performed as it was without a single accident, immeasurably raised the prestige, not only of our fleet, but of our Nation; and was a distinct help to the cause of international peace.

As regards the Panama Canal, I really think that outside nations have a juster idea than our own people of the magnitude and success of the work. Six years ago last spring the American Government took possession of the Isthmus. The first two years were devoted to the sanitation of the Isthmus, to assembling the plant and working force, and providing quarters, food, and water supplies. In all these points the success was extraordinary. From one of the plague-spots of the globe, one of the most unhealthy regions in the entire world, the Isthmus has been turned into a singularly healthy place of abode. Active excavation on a large scale did not begin until January, 1907. Three years and a half have gone by since then, and three-fifths of the total excavation has already been accomplished. In 1908 and 1909 the monthly average of rock and earth removed was three million cubic yards, notwithstanding the fact that nine months of each year constituted a season of very heavy rainfall; but it is impossible to maintain such a ratio as the depth increases. Still, it is certain that such a rate can be maintained as will enable the workers to finish the excavation considerably in advance of the date fixed for opening the Canal—January 1, 1915. Indeed, I shall be surprised if the Canal cannot be opened six months or even a year in advance of the time set. The work has two great features: The Culebra Cut, which I have been considering, and the great dam at Gatun. The construction of the dam has advanced sufficiently to convince the engineers in charge of the work of its absolute stability and imperviousness. The engineer in charge has announced that all the concrete in all the locks will be in place two years hence.

This is a stupendous record of achievement. As a people we are rather fond of criticising ourselves, and sometimes with very great justice; but even the most pessimistic critic should sometimes think of what is to our credit. Among our assets of the past ten years will be placed the extraordinary ability, integrity, and success with which we have handled all the problems inherited as the result of the Spanish War; the way we have handled ourselves in the Philippines, in Cuba, in Porto Rico, in San Domingo, and in Panama. The cruise of the battle fleet around the world was a striking proof that we had made good with the navy; and what we have done at Panama represents the accomplishment of one of the great feats of the ages. It is a feat which reflects the highest honor upon our country; and our gratitude is due to every man who has taken an honorable part in any capacity in bringing it about.