Speech 56
EFFORTS OF CORPORATIONS TO OBSTRUCT THE ADMINISTRATION OF THE LAW
FROM   AN   ADDRESS   DELIVERED   IN   CHAUTAUQUA, NEW YORK, AUGUST   II,   1905

Now for one feature of our domestic policy.  One of the main features of our national governmental policy should be the effort to secure adequate and effective supervisory and regulatory control over all great corporations doing an interstate business.  Much of the legislation aimed to prevent the evils connected with the enormous development of these great corporations has been ineffective, partly because it aimed at doing too much, and partly because it did not confer on the Government a really efficient method of holding any guilty corporation to account.  The effort to prevent all restraint of competition, whether harmful or beneficial, has been ill judged; what is needed is not so much the effort to prevent combination as a vigilant and effective control of the combinations formed, so as to secure just and equitable dealing on their part alike toward the public generally, toward their smaller competitors, and toward the wage workers in their employ.

Under the present laws we have in the last four years accomplished much that is of substantial value; but the difficulties in the way have been so great as to prove that further legislation is advisable.  Many corporations show themselves honorably desirous to obey the law; but, unfortunately, some corporations, and very wealthy ones at that, exhaust every effort which can be suggested by the highest ability, or secured by the most lavish expenditure of money, to defeat the purposes of the laws on the statute books.

Not only the men in control of these corporations, but the business world generally, ought to realize that such conduct is in every way perilous, and constitutes a menace to the Nation generally, and especially to the people of great property.

I earnestly believe that this is true of only a relatively small portion of the very rich men engaged in handling the largest corporations in the country; but the attitude of these comparatively few men does undoubtedly harm the country, and above all harm the men of large means, by the just, but sometimes misguided, popular indignation to which it gives rise.  The consolidation, in the form of what are popularly called trusts, of corporate interests of immense value has tended to produce unfair restraints of trade of an oppressive character, and these unfair restraints tend to create great artificial monopolies.  The violations of the law known as the antitrust law, which was meant to meet the conditions thus arising, have more and more become confined to the larger combinations, the very ones against whose policy of monopoly and oppression the policy of the law was chiefly directed.  Many of these combinations by secret methods and by protracted litigation are still unwisely seeking to avoid the consequences of their illegal action.  The Government has very properly exercised moderation in attempting to enforce the criminal provisions of the statute; but it has become our conviction that in some cases, such as that of at least certain of the beef packers recently indicted in Chicago, it is impossible longer to show leniency.  Moreover, if the existing law proves to be inadequate, so that under established rules of evidence clear violations may not be readily proved, defiance of the law must inevitably lead to further legislation.  This legislation may be more drastic than I would prefer.  If so, it must be distinctly understood that it will be because of the stubborn determination of some of the great combinations in striving to prevent the enforcement of the law as it stands, by every device, legal and illegal.  Very many of these men seem to think that the alternative is simply between submitting to the mild kind of governmental control we advocate and the absolute freedom to do whatever they think best.  They are greatly in error.  Either they will have to submit to reasonable supervision and regulation by the national authorities, or else they will ultimately have to submit to governmental action of a far more drastic type.  Personally, I think our people would be most unwise if they let any exasperation due to the acts of certain great corporations drive them into drastic action, and I should oppose such action.  But the great corporations are themselves to blame if by their opposition to what is legal and just they foster the popular feeling which calls for such drastic action.

Some great corporations resort to every technical expedient to render enforcement of the law impossible, and their obstructive tactics and refusal to acquiesce in the policy of the law have taxed to the utmost the machinery of the Department of Justice.  In my judgment Congress may well inquire whether it should not seek other means for carrying into effect the law.  I believe that all corporations engaged in interstate commerce should be under the supervision of the National Government.  I do not believe in taking steps hastily or rashly, and it may be that all that is necessary in the immediate future is to pass an interstate commerce bill conferring upon some branch of the executive government the power of effective action to remedy the abuses in connection with railway transportation.  But in the end, and in my judgment at a time not very far off, we shall have to, or at least we shall find that we ought to, take further action as regards all corporations doing interstate business.  The enormous increase in interstate trade, resulting from the industrial development of the last quarter of a century, makes it proper that the Federal Government should, so far as may be necessary to carry into effect its national policy, assume a degree of administrative control of these great corporations.

It may well be that we shall find that the only effective way of exercising this supervision is to require all corporations engaged in interstate commerce to produce proof satisfactory, say, to the Department of Commerce, that they are not parties to any contract or combination or engaged in any monopoly in interstate trade in violation of the anti-trust law, and that their conduct on certain other specified points is proper; and, moreover, that these corporations shall agree, with a penalty of forfeiture of their right to engage in such commerce, to furnish any evidence of any kind as to their trade between the States whenever so required by the Department of Commerce.

It is the almost universal policy of the several States, provided by statute, that foreign corporations may lawfully conduct business within their boundaries only when they produce certificates that they have complied with the requirements of their respective States; in other words, that corporations shall not enjoy the privileges and immunities afforded by the State governments without first complying with the policy of their laws.  Now the benefits which corporations engaged in interstate trade enjoy under the United States Government are incalculable; and in respect of such trade the jurisdiction of the Federal Government is supreme when it chooses to exercise it.

When, as is now the case, many of the great corporations consistently strain the last resources of legal technicality to avoid obedience to a law for the reasonable regulation of their business, the only way effectively to meet this attitude on their part is to give to the Executive Department of the Government a more direct and therefore more efficient supervision and control of their management.

In speaking against the abuses committed by certain very wealthy corporations or individuals, and of the necessity of seeking so far as it can safely be done to remedy these abuses, there is always danger lest what is said may be misinterpreted as an attack upon men of means generally.  Now it can not too often be repeated in a Republic like ours that the only way by which it is possible permanently to benefit the condition of the less able and less fortunate is so to shape our policy that all industrious and efficient people who act decently may be benefited; and this means, of course, that the benefit will come even more to the more able and more fortunate.  If, under such circumstances, the less fortunate man is moved by envy of his more fortunate brother to strike at the conditions under which they have both, though unequally, prospered, he may rest assured that while the result may be damaging to the other man, it will be even more damaging to himself.  Of course, I am now speaking of prosperity that comes under normal and proper conditions.

In our industrial and social system the interests of all men are so closely intertwined that in the immense majority of cases the straight dealing man who by ingenuity and industry benefits himself must also benefit others.  The man of great productive capacity who gets rich through guiding the labor of hundreds or thousands of other men does so, as a rule, by enabling their labor to produce more than it would without his guidance, and both he and they share in the benefit, so that even if the share be unequal it must never be forgotten that they too are really benefited by his success.

A vital factor in the success of any enterprise is the guiding intelligence of the man at the top, and there is need in the interest of all of us to encourage rather than to discourage the activity of the exceptional men who guide average men so that their labor may result in increased production of the kind which is demanded at the time.  Normally we help the wage worker, we help the man of small means, by making conditions such that the man of exceptional business ability receives an exceptional reward for that ability.

But while insisting with all emphasis upon this, it is also true that experience has shown that when there is no governmental restraint or supervision, some of the exceptional men use their energies, not in ways that are for the common good, but in ways which tell against this common good; and that by so doing they not only wrong smaller and less able men — whether wage workers or small producers and traders — but force other men of exceptional abilities themselves to do what is wrong under penalty of falling behind in the keen race for success.  There is need of legislation to strive to meet such abuses.  At one time or in one place this legislation may take the form of factory laws and employers' liability laws.  Under other conditions it may take the form of dealing with the franchises which derive their value from the grant of the representatives of the people.  It may be aimed at the manifold abuses, far-reaching in their effects, which spring from overcapitalization.  Or it may be necessary to meet such conditions as those with which I am now dealing and to strive to procure proper supervision and regulation by the National Government of all great corporations engaged in interstate commerce or doing an interstate business.

There are good people who are afraid of each type of legislation; and much the same kind of argument that is now advanced against the effort to regulate big corporations has been again and again advanced against the effort to secure proper employers' liability laws or proper factory laws with reference to women and children; much the same kind of argument was advanced but five years ago against the franchise tax law enacted in this State while I was Governor.

Of course there is always the danger of abuse if legislation of this type is approached in a hysterical or sentimental spirit, or, above all, if it is approached in a spirit of envy and hatred toward men of wealth.

We must not try to go too fast, under penalty of finding that we may be going in the wrong direction; and, in any event, we ought always to proceed by evolution and not by revolution.  The laws must be conceived and executed in a spirit of sanity and justice, and with exactly as much regard for the rights of the big man as for the rights of the little man — treating big man and little man exactly alike.

Our ideal must be the effort to combine all proper freedom for individual effort with some guarantee that the effort is not exercised in contravention of the eternal and immutable principles of justice.