Chapter 2

The man of public spirit is he who is able at a given moment, under certain conditions, to set the public welfare before his own. Furthermore, he is a man who is trained and habituated to that point of view, so that he is not aware of any pangs of martyrdom or even of any exercise of self-denial when he is concerning himself about the public good even to his own momentary inconvenience or disadvantage. Public spirit is that state or habit of mind which leads a man to care greatly for the general welfare. It is this ethical quality that to my mind should be the great aim and object of training.

On its best side, what we term the professional spirit is, then, very closely related to this commendable quality in men of a right intellectual and moral development that we call public spirit. The chief difference lies in this: that whereas all professional men may be public-spirited in a general sense, each professional man should, in addition, manifest a special and technical sort of public spirit that pertains to the nature of his calling. The lawyer should have a particularly keen regard for the equitable administration of justice. The doctor should truly care for the physical wholesomeness and well-being of the community. The clergyman should be alive to those things that concern the rectitude and purity of life. The journalist should be willing to make sacrifices for the sake of the enlightenment of public opinion; and so on. Without either the general or the technical manifestations of public spirit, in short, the so-called professional man is a reproach to his guild and a failure in his neighborhood.

Now, what has all this to do with the moral standards that belong to the business career as distinguished from the professional life? My answer must be very clear and very direct if I am to justify so long an analysis of the ethical characteristics of the professions themselves. I have merely used the time-honored method of trying to lead you by way of familiar, admitted points of view to certain points of view that, if not wholly new, are at least less familiar and less widely recognized. The whole thesis that I wish to develop is simply this: that however it may have been in business life in times past and gone, there has been such a tremendous change in the organization and methods of the business world and also in the relative importance of the functions of the business man in the community, that the distinctions which have hitherto set apart the professional classes have become obsolete for all practical purposes in many branches and departments of the business world.

At least, the work of the responsible leaders is no longer to be regarded as essentially a thing of private concern and free from public responsibility. If the business world is not characterized, first, by public spirit and a sense of public duty in general, and, second, by the special and technical sense of public obligation that pertains to particular kinds or departments of business activity, then it is falling short of its best opportunities and evading its providential tasks. It is for the modern business world to recognize the conditions that have in the fulness of time given it so great a power and so dominant a position; and it must not shirk the responsibilities that belong to it as fully and truly as they belong to any of the professions.

I hold, then, that the young man of education and opportunity who proposes to go into a business career enters it not merely with a low and unworthy standard if his sole motive and object be to acquire wealth, but he also enters it in disregard of the ideas that fill the minds of the best modern business leaders. He shows a pitiable lack of appreciation of the elements that are to constitute real business success in the period within which his own career must fall.

Let us consider, briefly, the evolution of our present-day economic or business life, and then take note of the necessary place that particular classes of business men must hold in the structure of our society. I, for my part, look upon this last century of economic progress,--under the sway of what is often called "capitalism" as a term of reproach,--as an immeasurable boon to mankind. It began with the practical utilization of several great inventions, notably that of steam power, which broke up the old household and village industries, gave us the modern factory system, and along with the development of railroads gave us the modern industrial city. This new and revolutionizing system of industry and business forced its way into a world of poverty, of disease, of depraved public life, of low morals in the main pervading the community,--a world for the most part of class distinctions in which the lot even of the privileged few was not a very noble or enviable one, while the state of the vast majority was little better than that of serfs.

Many writers have sought to throw a charm and a glamour over that old condition of economic life and society that followed the break-up of feudalism and that preceded the creation of our new political and industrial institutions. But with some mitigations it was for most people a period, as I have said, of squalor, disease, and degradation. The fundamental trouble could be summed up in the one word, _poverty_. The mission of the new industrial system, for the most part unconscious and unrecognized, was to transform the world by abolishing the reign of poverty. Doubtless it would be desirable if the improvement of conditions, material and spiritual, could make progress with exactly even pace on some perfectly symmetrical plan. But history shows us that the forward social movement has proceeded first in one aspect, then in another, on lines so tangential, often so zigzag, that it is difficult until one gets distance enough for perspective, to see that any true progress has been made at all.

Thus, the modern industrial system, which found the conditions of poverty, disease, and hardship prevalent, seemed for quite a long time, in its rude breaking up of old relations and its ruthless adherence to certain newly proclaimed principles, to have brought matters from bad to worse. The squalor and poverty of the village of hand-loom weavers seemed only intensified in the new industrial towns to which the weavers flocked from their deserted hamlets. Manufacturers were doing business under the fiercest and most unregulated competition. Economists were demonstrating their "law of supply and demand" and their "iron law of wages" as capable in themselves of regulating all the conditions and relations of business life. Epidemics raged and depravity prevailed in the new factory centers.

But things were not, in reality, going from bad to worse. The beginnings of a better order had to be based upon two things: first and foremost, the sheer creation of capital; second, the discipline and training of workers. In the first phases, the new modern business period had to be a period of production. There had got to be developed the instrumentalities for the creation of wealth. Until the industrial system had raised up its class of efficient workers and had created its great mass of capital for productive purposes, there could be no supply of cheap goods; and without an abundant and cheap output there could be no possible diffusion of economic benefits; in other words, no marked amelioration of the prevailing poverty.

It required some development of wealth to lift our modern peoples out of a poverty too grinding and too debasing for intellectual or moral progress. It is true that the factory towns, created as they have all been by modern industrial conditions during the past century, brought their distinctive evils. There was overcrowding in ill-built tenement houses; and long hours for women and children in the factories. Yet with these and many other disadvantages, the new industrial system made for discipline and for intelligence, and above all for a new kind of solidarity and for a sense of brotherhood among workers.

In due time the worst evils began to be mitigated, largely through the application of those very methods of organization which had characterized the new kind of industry itself. Thus for men who had applied steam power to manufacturing and had begun to build railroads, it was soon perceived to be a matter not only of sanitary and social service, but of pecuniary profit, to provide water supplies, public illumination, and other conveniences to the crowded city dwellers. Moreover, with the progress of industry and the development of railroads and steam navigation, production and trade took on an ever-increasing volume.

Then the world began to be less poor. There had been no rich men in the modern sense, and of course no such thing as capitalized corporations for production. The richest man in the United States at the time of his death, a little more than a hundred years ago, was George Washington, with his land and his slaves; and so in England and France there were no rich men in the modern sense--that is to say, no men who controlled great masses of productive capital. The men of wealth were those who held landed estates. The chief business of all countries was agriculture. The capitalistic system in industry and trade existed in its rudiments and in limited measure; but all its great achievements were yet to be wrought.

All modern business life, then, is the result of this growth of productive capital, and its application and constant reapplication to the production of wealth. It made its way by virtue of an intense individual initiative and a fierce competitive struggle. But unlovely as were these things, many of their phases were necessary at a certain stage. It was this fierce competition that compelled capital to pay the lowest possible wages in order to market cheap goods. But the same situation stimulated the use, one after another, of new labor-saving inventions in order to increase the per capita productivity. This process was attended by the higher efficiency of the worker and an increase in his earning capacity. As his position began to improve, the worker gained some hope and cheer; and he and his fellows began to organize, with the result that both wages and conditions of labor were steadily improved, and the workman began to attain approximately his share of benefits.

All this is a familiar story, although the depth of its significance is beyond the compass of any living human intelligence. It is easy to say in a glib sentence that the amount of wealth produced every few years nowadays is equal to all the accumulated wealth of all the centuries down to the early part of the nineteenth; but the social meaning of so great a change baffles all attempt at full comprehension.

The competitive system, which had been essential to the launching of this modern period of production, and which had given to it so much of its irresistible momentum, at length brought the economic organization to a point of development where, in some fields of production, it was no longer a benefit. The accumulation of capital had become so large,--and with new inventions the possible output had become so abundant, that it was well nigh impossible to trust to the blind working of demand and supply to regulate things in a beneficial way. It began to dawn on men's minds that a successful period of competitive economic life might lead to a period largely dominated by non-competitive and coöperative principles.

The superior possibilities of this newest régime, along with its many difficulties and perplexities, began to captivate the minds, not merely of theoretical students and onlookers, but, even more, of great masters of industry and productive capital. It began to be seen that in place of blind and fierce competition as a regulator of prices and as an equalizer of supply and demand, there might come to be gradually substituted some more consciously scientific methods of business administration and of the adjustment of production to the needs of the market.

Furthermore, with the development of business on the great scale, capital had become relatively abundant and cheap, while, on the other hand, labor was becoming relatively expensive and exacting. It was evident that the modern system of industry had passed through its earlier period to one of comparative maturity; and that the problem of wealth production was no longer so exclusively the pressing one, but that the problems of distribution were demanding more attention.

How to organize business life on a basis at once stable and efficient; how to see that capital was assured of a normal even though a declining percentage of dividends; while labor should be rewarded according to its capacity and desert,--were problems which took on public rather than private aspects. And when the business world began to face these problems with the consciousness that they were to be met, it had virtually passed over from the lower plane of moral and social responsibility to the higher plane where what the directing minds do or decide is not measured solely by immediate results in money-getting, but also by the test of larger social and public utilities.

Although these conditions are not novel ones, and are therefore not difficult to grasp even when stated in general terms, it is still true that the concrete often helps to make the point appear more pertinent. Take then the railroad business as it is now shaping itself, in comparison with its conditions and methods twenty or thirty years ago. The railroads have always existed by virtue of charters which gave them a quasi-public character, and have always been theoretically subject to certain old principles of English common law under which the public or common carrier, like the innkeeper, performs a function not wholly private in its nature. Nevertheless, in its earlier stages the railroad system of this country was in large part constructed and operated by its projectors with no sense whatever of responsibility for their performance of public functions, but with the idea that they were carrying on their own private business in which interference on the part of the public was to be avoided and resented. They fought the railroad codes of State legislatures in the federal courts; they made oppressive rates to give value to new issues of watered stock; they discriminated in favor of one city and against another; by a system of secret rebates they made different terms with every shipper, thus enabling one merchant or manufacturer to destroy his competitor; and they pursued in general a career at least anti-social in its spirit and false and short-sighted in its principles.

A profound change--would that it were already complete!--is coming about in this great field of transportation business. It is perceived that many of the evils to which I have alluded were incident to the speculative periods of construction and development in a new country. The better leaders in the business of railway administration now see clearly that it is the duty of the railroads to work with and for the public and not against it. The railroads are gradually passing out of the hands of the stockjobbers and speculators, into the control of trained administrators. It is to be remembered that in a country like ours, the largest single branch of organized administration is that of the railroads. We have reached a point where their relations to all the elaborate interests of the community are such that their public character becomes more and more pronounced and evident. It was only the other day that a brilliant railway administrator, Mr. Charles S. Mellen, recently president of the Northern Pacific, and now president of the New York, New Haven & Hartford system, made some statements in an address to the business men of Hartford at a Board of Trade meeting. With much else of the same import, he made the following significant remarks:

"If corporations are to continue to do their work as they are best fitted to, those qualities in their representatives that have resulted in the present prejudice against them must be relegated to the background.

"They must come out into the open and see and be seen. They must take the public into their confidence and ask for what they want and no more, and then be prepared to explain satisfactorily what advantage will accrue to the public if they are given their desires, for they are permitted to exist not that they may make money solely, but that they may effectively serve those from whom they derive their power. Publicity should rule now. Publicity, and not secrecy, will win hereafter, and laws will be construed by their intent and not killed by their letter; otherwise public utilities will be owned and operated by the public which created them, even though the service be less efficient and the result less satisfactory from a financial standpoint."

Mr. Mellen's state of mind is that which ought to prevail among all the managers of corporations which enjoy public franchises and perform functions fundamental to the welfare of the community. There will at times be prejudice and passion on the part of the public, and unfair demands will be made. We shall not see the attainment of ideal conditions in the management or the public relations of any great business corporations in our day. But the time has come when any intelligent and capable young man who chooses to enter the service of a railroad or of some other great corporation may rightly feel that he becomes part of a system whose operation is vital to the public welfare. He may further feel that there is room in such a calling for all his intelligence and for the exercise and growth of all the best sentiments of his moral nature.

In the vast mechanism of modern business the constructive imagination may find its full play; and the desire to be of service to one's fellow men in a spirit reasonably disinterested may find opportunity to satisfy itself every day. Under these circumstances there is no reason why railway administration should not take on the same ethical standards as belong rightly to governmental administration, to educational administration, or to the best professional life.

The same thing is clearly true when one considers nowadays the delicate and important functions of the world of banking and finance. The old-fashioned money-changer and the usurer of earlier periods were regarded as the very antithesis of men engaged in honorable mercantile life, and especially of those who possess a social spirit and the desire to be useful members of the community. But in these days the banks are not merely private money-making institutions, but have public functions that admittedly affect the whole social organism, from the government itself down to the humblest laborer. They must concern themselves about the soundness and the sufficiency of the monetary circulation; they must protect the credit and foster the welfare of honest merchants and manufacturers; they must coöperate in critical times to help one another, and thus to sustain the public and private credit and avert commercial disaster; they must at all hazards protect the savings of the poor. Thus the banks, like the railroads and many other corporate enterprises, are quasi-public affairs, in the conduct of which the public obligation grows ever clearer and stronger.

We are not at heart--in this splendid country of ours--engaged in a mad struggle and race for wealth. We are engaged rather in the greatest effort ever made in the world for the upbuilding of a higher civilization. To avow that this civilization must rest upon a physical and material basis,--that is to say, upon a high development of our productive capacity and upon a constant improvement in our processes of distribution and exchange,--is not, on the other hand, to confess that our civilization is materialistic in its nature or in its aims. I was very glad, the other day, to read the wholesome and understanding words of a distinguished Boston clergyman who is just now coming to New York to take charge of an important parish. He declared that this nation was founded on an ideal, and that the most powerful influences in its life today are working toward noble ideals. The moral and spiritual tone of the country, he asserted, is higher than ever, in spite of the accidents of wealth and poverty. He declared that the great host of men and women who cherish our ideals will continue to stamp idealism upon the minds and hearts of our youth, and that they in turn "will convert wealth to the service of ideals."

Such views are not merely the expressions of a comfortable optimist. They are true to the facts of our current progress. There are vast portions of this country today in which the enterprising business man who can succeed in selling to the farmers an honest and effective commercial fertilizer is the best possible missionary of idealism,--is, in fact, a veritable angel for the spread of sweetness and light. There are regions where the capitalist or the company that will build a cotton mill or some other kind of factory is rescuing whole communities from degradation. It is poverty that has kept the South so backward, and it is poverty alone that explains the illiteracy and the lawlessness not merely of the Kentucky mountains, but of great areas in other States as well. Good schools cannot be supported in regions like those, for the palpable reason that the taxable wealth of an entire school district cannot yield enough to pay the salary of a teacher. But when modern business invades those uplands, utilizes the water-power now wasted, opens the mines, builds cotton factories or foundries, the situation changes almost as if by magic.

There will, indeed, ensue a brief period of disturbance due to changed social conditions,--to women and children in factories, and other things of incidental or serious disadvantage. But, as against a survival of the sort of life that was widely prevalent a century or two ago, all the phenomena of our modern industrial life make their appearance, in full development. The one-room cabin gives place to the little house of several rooms. There is rapid diffusion of those minor comforts and agencies which make for self-respect and personal and family advancement. The advent of capital, that is to say, of taxable property, is speedily followed by the good schoolhouse and the good teacher.

It is instructive to note the transformation that is thus taking place in one county after another of the Carolinas, or Georgia, or others of the Southern States, because the conditions make it possible to witness within a single decade the triumph of those business forces which, while they have even more truly and completely transformed the prosperous parts of America and Europe, have operated more gradually through longer periods, and therefore in a less easily perceived and dramatic fashion.

Our modern ideals have required, not the refinement and the culture of the select few, but the uplifting and progress of the multitude. This could only be possible through a general development of wealth, so vast in comparison with what had previously existed as to constitute the most highly revolutionary fact in the history of human civilization and progress. The man, therefore, who has a clear perception of those laws of mind and of society under which modern economic forces have been set at work, cannot for a moment think that the end and outcome of this modern business system is a new kind of human bondage, "the rich growing richer and the poor growing poorer"; or that it can mean any such thing as the elevation of property at the expense of manhood.