Speech 50
FEDERAL   SUPERVISION   OVER   COMBINATIONS OF CAPITAL AND LABOR
FROM AN ADDRESS DELIVERED BEFORE THE IROQUOIS CLUB,   AT   A   BANQUET   IN    CHICAGO,    MAY    10, 1905
AMONG the vital questions that have come up for solution, because of the extraordinary industrial development of this country, as of all the modern world, are the questions affecting capital and labor as regards each other, and the questions resulting from the effect upon the public of the organization into great masses of both capital and labor.  I believe thoroughly in each kind of organization, but I recognize that if either kind of organization does what is wrong, the increase in its power for efficiency that has resulted from the combination means the increase in its power to do harm; and that, therefore, corporation — that is, organized capital — and union — that is, organized labor — must alike be held to a peculiar responsibility to the public at large, and that from each alike we have the right to demand not only obedience to the law, but service to the public.

There are two sides to what I have said, and we are very apt to hear only insistence upon one side — sometimes insistence upon one side, sometimes insistence upon the other, but not as often as we should insistence upon both sides.

I take up first the question of organized capital.  When this Nation was created, such a thing as a modern corporation not only did not exist, but could not be imagined.  This is especially true of the great modern corporations engaged in interstate commerce.  A century ago the highways of commerce were exactly such as they had been from the days of the dawn of civilization on the banks of the Nile and in Mesopotamia.  All that could be done by waterways and by roads for wheeled vehicles drawn by animal power had been developed to a very marked degree; but sails, oars, wheeled vehicles and beasts of burden were, as they had been for many thousands of years, the only means of commerce, the only methods by which individuals or corporations engaged in commerce could act.  Under such circumstances the fathers and founders of this Republic could not foresee, and therefore, doubly, could not provide for, the conditions of the present day.  We now have the great highways of commerce of an entirely different kind.  The waterway, the road for wheeled vehicles, have sunk into absolute insignificance compared with the railway.  We therefore have for the first time in history a highway for the commerce of all the people under the control of a private individual or private corporation.  Now gentlemen, let me in the first place insist upon this fact, that we should keep ever before us that the men who have built up the great railroad systems of this country, like the men who have built up the other great industries of this country, have as a rule (there are exceptions, but as a rule) made their fortunes as incidents to benefiting and not to harming the country.  As a rule benefit and not harm has come from their efforts, and in making fortunes for themselves they have done good to all of us.  We have all benefited by the talents of the great captains of industry.  I am speaking, as I say, as a rule, with full knowledge of the exceptions to what I say, but disregarding those exceptions in making a general statement.  We can not afford to do damage to those men or to those corporations, because in the first place we can not afford to do injustice to any man, rich or poor; in the next place, because to do such damage to them would mean wide spread damage among the wage workers and among the general public.  All of this that I have said I wish kept in mind steadily in appreciating what I am about to say; for while acknowledging in the frankest manner the benefits that have come from the development of these great industrial enterprises, I also feel that we must recognize that the time has now come when it is essential in the interests of the public that there should be, and be exercised, an effective power of supervision and regulation over them in the interests of the public.

The State can properly deal with the corporations doing business within its own limits.  The State can not deal at all with corporations doing business in many different States, and it is an absurdity at once ludicrous and harmful to leave it in the power of one State to create a corporation of gigantic size which shall do all its work in a number of other States, and perhaps with the scantiest regard for their laws.

Personally, I believe that the Federal Government must take an increasing control over corporations.  It is better that that control should increase by degrees than that it should be assumed all at once.  But there should be, and I trust will be, no halt in the steady progress of assuming such national control.  The first step toward it should be the adoption of a law conferring upon some executive body the power of increased supervision and regulation of the great corporations engaged primarily in interstate commerce of the railroads.  My views on that subject could not have been better expressed than they were expressed yesterday by Secretary Taft in Washington, and as they were expressed by the Attorney General in his communication to the Senate Committee a couple of weeks ago.  I believe that the representatives of the Nation — that is, the representatives of all the people — should lodge in some executive body the power to establish a maximum rate, the power to have that rate go into effect practically immediately, and the power to see that the provisions of the law apply in full to companies owning private cars and private tracks, just as much as the railroads themselves.  The courts will retain, and should retain, no matter what the Legislature does, the power to interfere and upset any action that is confiscatory in its nature.  I am well aware that the action of such a body as I have spoken of may stop far short of confiscation, and yet do great damage.  In other words, I am well aware that to give this power means the possibility that the power may be abused.  That possibility we must face.  Any power strong enough, any power which could be granted sufficiently great to be efficient, would be sufficiently great to be harmful if abused.  That is true of the power of taxation.  It is perfectly possible for the body that has the power of taxation intrusted to it to use it viciously and harmfully against certain interests or certain classes.  Nevertheless, the power must exist.  The power must be lodged in the representatives of the people.  So it is with the power of which I speak.  It must exist; it must be lodged in some body which is to give expression to the needs of the people as a whole.  The fact that it is possible that the power may be abused is not, and can not be, an argument against placing it where we shall have a right to expect that it will be used fairly toward all.

One thing I wish definitely understood.  If the power is granted me to create such a board, such a commission, or to continue in power, if I so desire, a commission or board with increased powers, I shall strive to appoint and retain men who will do exactly the same justice to the railroads as they will exact from the railroads.  False hopes are always raised by any measure of reform, because there are always people who expect the impossible.  If the measure which I advocate is enacted into law a good many people will expect that it will bring the millennium considerably nearer than will prove to be the case.  The men whom I appoint to execute that law will be, so far as my ability to choose them exists, men who will no more be frightened by an even sincere popular clamor into doing an act of injustice to any great corporation than they will be frightened, on the other hand, into refraining from doing an act of justice because it is against the interests of some great corporation.  In other words, I shall strive to see that that branch of the Government with its increased power is administered as every branch of the Government ought to be administered — that is, in a spirit of striving to do exact justice to the men of great means just as much as, and no more than, to the man of small means.

Now for the other side of the question.  There have been a great many republics before our time, and again and again these republics have split upon the rock of disaster.  The greatest and most dangerous rock in the course of any republic is the rock of class hatred.  Sometimes in the past the republic became a republic in which one class grew to dominate over another class, so that for loyalty to the republic was substituted loyalty to a class.  The result was in such case inevitable.  It meant disaster and ultimately the downfall of the republic, and it mattered not one whit which class became dominant; it mattered not one whit whether the poor plundered the rich or the rich exploited the poor.  In either case, just as soon as the republic became one in which one class substituted loyalty to that class for loyalty to the republic, the end of the republic was at hand.  No true patriot will fail to do everything in his power to prevent the growth of any such spirit in this country.

This Government is not and never shall be a government of a plutocracy.  This Government is not, and never shall be, a Government of a mob.  I believe in corporations.  They are indispensable instruments of our modern industrialism; but I believe that they should be so supervised and regulated that they shall act for the interest of the community as a whole.  So I believe in unions.  I am proud of the fact that I am an honorary member of one union.  But I believe that the union, like the individual, must be held to a strict accountability to the power of the law.

Mr.  Mayor, as President of the United States, and therefore as representative of the people of this country, I give you, as a matter of course, my hearty support in upholding the law, in keeping order, in putting down violence, whether by a mob or by an individual.  There need not be the slightest apprehension in the heart of the most timid that ever the mob spirit will triumph in this country.  Those immediately responsible for dealing with the trouble must, as I know you feel, exhaust every effort in so dealing with it before a call is made upon any outside body.  But if ever the need arises, back of the city stands the State, and back of the State stands the Nation.

There, gentlemen, is a point upon which all good Americans are one.  They are all one in the conviction, in the firm determination that this country shall remain in the future as it has been in the past, a country of liberty and justice expressed through the forms of law; a country in which the will of the people is supreme, but in which that will finds its expression as provided for in the Constitution of the United States, and of the several States that go to make up our Nation.