vitally necessary; but, of course, it created bitter opposition from private interests.
One of the principles whose application was the source of much hostility was this: It is better for the Government to help a poor man to make a living for his family than to help a rich man make more profit for his company. This principle was too sound to be fought openly. It is the kind of principle to which politicians delight to pay unctuous homage in words. But we translated the words into deeds; and when they found that this was the case, many rich men, especially sheep owners, were stirred to hostility, and they used the Congressmen they controlled to assault us–getting most aid from certain demagogues, who were equally glad improperly to denounce rich men in public and improperly to serve them in private. The Forest Service established and enforced regulations which favored the settler as against the large stock owner; required that necessary reductions in the stock grazed on any National Forest should bear first on the big man, before the few head of the small man, upon which the living of his family depended, were reduced; and made grazing in the National Forests a help, instead of a hindrance, to permanent settlement. As a result, the small settlers and their families became, on the whole, the best friends the Forest Service has; although in places their ignorance was played on by demagogues to influence them against the policy that was primarily for their own interest.
Another principle which led to the bitterest antagonism of all was this–whoever (except a bona-fide settler) takes public property for private profit should pay for what he gets. In the effort to apply this principle, the Forest Service obtained a decision from the Attorney-General that it was legal to make the men who grazed sheep and cattle on the National Forests pay for what they got. Accordingly, in the summer of 1906, for the first time, such a charge was made; and, in the face of the bitterest opposition, it was collected.
Up to the time the National Forests were put under the charge of the Forest Service, the Interior Department had made no effort to establish public regulation and control of water powers. Upon the transfer, the Service immediately began its fight to handle the power resources of the National Forests so as to prevent speculation and monopoly and to yield a fair return to the Government. On May 1, 1906, an Act was passed granting the use of certain power sites in Southern California to the Edison Electric Power Company, which Act, at the suggestion of the Service, limited the period of the permit to forty years, and required the payment of an annual rental by the company, the same conditions which were thereafter adopted by the Service as the basis for all permits for power development. Then began a vigorous fight against the position of the Service by the water-power interests. The right to charge for water-power development was, however, sustained by the Attorney-General.
In 1907, the area of the National Forests was increased by Presidential proclamation more than forty-three million acres; the plant necessary for the full use of the Forests, such as roads, trails, and telephone lines, began to be provided on a large scale; the interchange of field and office men, so as to prevent the antagonism between them, which is so destructive of efficiency in most great businesses, was established as a permanent policy; and the really effective management of the enormous area of the National Forests began to be secured.
With all this activity in the field, the progress of technical forestry and popular education was not neglected. In 1907, for example, sixty-one publications on various phases of forestry, with a total of more than a million copies, were issued, as against three publications, with a total of eighty-two thousand copies, in 1901. By this time, also, the opposition of the servants of the special interests in Congress to the Forest Service had become strongly developed, and more time appeared to be spent in the yearly attacks upon it during the passage of the appropriation bills than on all other Government Bureaus put together. Every year the Forest Service had to fight for its life.
One incident in these attacks is worth recording. While the Agricultural Appropriation Bill was passing through the Senate, in 1907, Senator Fulton, of Oregon, secured an amendment providing that the President could not set aside any additional National Forests in the six Northwestern States. This meant retaining some sixteen million of acres to be exploited by land grabbers and by the representatives of the great special interests, at the expense of the public interest. But for four years the Forest Service had been gathering field notes as to what forests ought to be set aside in these States, and so was prepared to act. It was equally undesirable to veto the whole agricultural bill, and to sign it with this amendment effective. Accordingly, a plan to create the necessary National Forest in these States before the Agricultural Bill could be passed and signed was laid before me by Mr. Pinchot. I approved it. The necessary papers were immediately prepared. I signed the last proclamation a couple of days before, by my signature, the bill became law; and, when the friends of the special interests in the Senate got their amendment through and woke up, they discovered that sixteen million acres of timberland had been saved for the people by putting them in the National Forests before the land grabbers could get at them. The opponents of the Forest Service turned handsprings in their wrath; and dire were their threats against the Executive; but the threats could not be carried out, and were really only a tribute to the efficiency of our action.
By 1908, the fire prevention work of the Forest Service had become so successful that eighty-six per cent of the fires that did occur were held down to an area of five acres or less, and the timber sales, which yielded $60,000 in 1905, in 1908 produced $850,000. In the same year, in addition to the work of the National Forests, the responsibility for the proper handling of Indian timberlands was laid upon the Forest Service, where it remained with great benefit to the Indians until it was withdrawn, as a part of the attack on the Conservation policy made after I left office.
By March 4, 1909, nearly half a million acres of agricultural land in the National Forests had been opened to settlement under the Act of June 11, 1906. The business management of the Forest Service became so excellent, thanks to the remarkable executive capacity of the Associate Forester, Overton W. Price (removed after I left office), that it was declared by a well-known firm of business organizers to compare favorably with the best managed of the great private corporations, an opinion which was confirmed by the report of a Congressional investigation, and by the report of the Presidential Committee on Department method. The area of the National Forests had increased from 43 to 194 million acres; the force from about 500 to more than 3000. There was saved for public use in the National Forests more Government timberland during the seven and a half years prior to March 4, 1909, than during all previous and succeeding years put together.
The idea that the Executive is the steward of the public welfare was first formulated and given practical effect in the Forest Service by its law officer, George Woodruff. The laws were often insufficient, and it became well-nigh impossible to get them amended in the public interest when once the representatives of privilege in Congress grasped the fact that I would sign no amendment that contained anything not in the public interest. It was necessary to use what law was already in existence, and then further to supplement it by Executive action. The practice of examining every claim to public land before passing it into private ownership offers a good example of the policy in question. This practice, which has since become general, was first applied in the National Forests. Enormous areas of valuable public timberland were thereby saved from fraudulent acquisition; more than 250,000 acres were thus saved in a single case.
This theory of stewardship in the interest of the public was well illustrated by the establishment of a water-power policy. Until the Forest Service changed the plan, water-powers on the navigable streams, on the public domain, and in the National Forests were given away for nothing, and substantially without question, to whoever asked for them. At last, under the principle that public property should be paid for and should not be permanently granted away when such permanent grant is avoidable, the Forest Service established the policy of regulating the use of power in the National Forests in the public interest and making a charge for value received. This was the beginning of the water-power policy now substantially accepted by the public, and doubtless soon to be enacted into law. But there was at the outset violent opposition to it on the part of the water-power companies, and such representatives of their views in Congress as Messrs. Tawney and Bede.
Many bills were introduced in Congress aimed, in one way or another, at relieving the power companies of control and payment. When these bills reached me I refused to sign them; and the injury to the public interest which would follow their passage was brought sharply to public attention in my message of February 26, 1908. The bills made no further progress.
Under the same principle of stewardship, railroads and other corporations, which applied for and were given rights in the National Forests, were regulated in the use of those rights. In short, the public resources in charge of the Forest Service were handled frankly and openly for the public welfare under the clear-cut and clearly set forth principle that the public rights come first and private interest second.
The natural result of this new attitude was the assertion in every form by the representatives of special interests that the Forest Service was exceeding its legal powers and thwarting the intention of Congress. Suits were begun wherever the chance arose. It is worth recording that, in spite of the novelty and complexity of the legal questions it had to face, no court of last resort has ever decided against the Forest Service. This statement includes two unanimous decisions by the Supreme Court of the United States (U. S. vs. Grimaud, 220 U. S., 506, and Light vs. U. S., 220 U. S., 523).
In its administration of the National Forests, the Forest Service found that valuable coal lands were in danger of passing into private ownership without adequate money return to the Government and without safeguard against monopoly; and that existing legislation was insufficient to prevent this. When this condition was brought to my attention I withdrew from all forms of entry about sixty-eight million acres of coal land in the United States, including Alaska. The refusal of Congress to act in the public interest was solely responsible for keeping these lands from entry.
The Conservation movement was a direct outgrowth of the forest movement. It was nothing more than the application to our other natural resources of the principles which had been worked out in connection with the forests. Without the basis of public sentiment which had been built up for the protection of the forests, and without the example of public foresight in the protection of this, one of the great natural resources, the Conservation movement would have been impossible. The first formal step was the creation of the Inland Waterways Commission, appointed on March 14, 1907. In my letter appointing the Commission, I called attention to the value of our streams as great natural resources, and to the need for a progressive plan for their development and control, and said: “It is not possible to properly frame so large a plan as this for the control of our rivers without taking account of the orderly development of other natural resources. Therefore I ask that the Inland Waterways Commission shall consider the relations of the streams to the use of all the great permanent natural resources and their conservation for the making and maintenance of prosperous homes.”
Over a year later, writing on the report of the Commission, I said:
“The preliminary Report of the Inland Waterways Commission was excellent in every way. It outlines a general plan of waterway improvement which when adopted will give assurance that the improvements will yield practical results in the way of increased navigation and water transportation. In every essential feature the plan recommended by the Commission is new. In the principle of coordinating all uses of the waters and treating each waterway system as a unit; in the principle of correlating water traffic with rail and other land traffic; in the principle of expert initiation of projects in accordance with commercial foresight and the needs of a growing country; and in the principle of cooperation between the States and the Federal Government in the administration and use of waterways, etc.; the general plan proposed by the Commission is new, and at the same time sane and simple. The plan deserves unqualified support. I regret that it has not yet been adopted by Congress, but I am confident that ultimately it will be adopted.”
The most striking incident in the history of the Commission was the trip down the Mississippi River in October, 1907, when, as President of the United States, I was the chief guest. This excursion, with the meetings which were held and the wide public attention it attracted, gave the development of our inland waterways a new standing in public estimation. During the trip a letter was prepared and presented to me asking me to summon a conference on the conservation of natural resources. My intention to call such a conference was publicly announced at a great meeting at Memphis, Tenn.
In the November following I wrote to each of the Governors of the several States and to the Presidents of various important National Societies concerned with natural resources, inviting them to attend the conference, which took place May 13 to 15, 1908, in the East Room of the White House. It is doubtful whether, except in time of war, any new idea of like importance has ever been presented to a Nation and accepted by it with such effectiveness and rapidity, as was the case with this Conservation movement when it was introduced to the American people by the Conference of Governors. The first result was the unanimous declaration of the Governors of all the States and Territories upon the subject of Conservation, a document which ought to be hung in every schoolhouse throughout the land. A further result was the appointment of thirty-six State Conservation Commissions and, on June 8, 1908, of the National Conservation Commission. The task of this Commission was to prepare an inventory, the first ever made for any nation, of all the natural resources which underlay its property. The making of this inventory was made possible by an Executive order which placed the resources of the Government Departments at the command of the Commission, and made possible the organization of subsidiary committees by which the actual facts for the inventory were prepared and digested. Gifford Pinchot was made chairman of the Commission.
The report of the National Conservation Commission was not only the first inventory of our resources, but was unique in the history of Government in the amount and variety of information brought together. It was completed in six months. It laid squarely before the American people the essential facts regarding our natural resources, when facts were greatly needed as the basis for constructive action. This report was presented to the Joint Conservation Congress in December, at which there were present Governors of twenty States, representatives of twenty-two State Conservation Commissions, and representatives of sixty National organizations previously represented at the White House conference. The report was unanimously approved, and transmitted to me, January 11, 1909. On January 22, 1909, I transmitted the report of the National Conservation Commission to Congress with a Special Message, in which it was accurately described as “one of the most fundamentally important documents ever laid before the American people.”
The Joint Conservation Conference of December, 1908, suggested to me the practicability of holding a North American Conservation Conference. I selected Gifford Pinchot to convey this invitation in person to Lord Grey, Governor General of Canada; to Sir Wilfrid Laurier; and to President Diaz of Mexico; giving as reason for my action, in the letter in which this invitation was conveyed, the fact that: “It is evident that natural resources are not limited by the boundary lines which separate nations, and that the need for conserving them upon this continent is as wide as the area upon which they exist.”
In response to this invitation, which included the colony of Newfoundland, the Commissioners assembled in the White House on February 18, 1909. The American Commissioners were Gifford Pinchot, Robert Bacon, and James R. Garfield. After a session continuing through five days, the Conference united in a declaration of principles, and suggested to the President of the United States “that all nations should be invited to join together in conference on the subject of world resources, and their inventory, conservation, and wise utilization.” Accordingly, on February 19, 1909, Robert Bacon, Secretary of State, addressed to forty-five nations a letter of invitation “to send delegates to a conference to be held at The Hague at such date to be found convenient, there to meet and consult the like delegates of the other countries, with a view of considering a general plan for an inventory of the natural resources of the world and to devising a uniform scheme for the expression of the results of such inventory, to the end that there may be a general understanding and appreciation of the world’s supply of the material elements which underlie the development of civilization and the welfare of the peoples of the earth.” After I left the White House the project lapsed.
Throughout the early part of my Administration the public land policy was chiefly directed to the defense of the public lands against fraud and theft. Secretary Hitchcock’s efforts along this line resulted in the Oregon land fraud cases, which led to the conviction of Senator Mitchell, and which made Francis J. Heney known to the American people as one of their best and most effective servants. These land fraud prosecutions under Mr. Heney, together with the study of the public lands which preceded the passage of the Reclamation Act in 1902, and the investigation of land titles in the National Forests by the Forest Service, all combined to create a clearer understanding of the need of land law reform, and thus led to the appointment of the Public Lands Commission. This Commission, appointed by me on October 22, 1903, was directed to report to the President: “Upon the condition, operation, and effect of the present land laws, and to recommend such changes as are needed to effect the largest practicable disposition of the public lands to actual settlers who will build permanent homes upon them, and to secure in permanence the fullest and most effective use of the resources of the public lands.” It proceeded without loss of time to make a personal study on the ground of public land problems throughout the West, to confer with the Governors and other public men most concerned, and to assemble the information concerning the public lands, the laws and decisions which governed them, and the methods of defeating or evading those laws, which was already in existence, but which remained unformulated in the records of the General Land Office and in the mind of its employees. The Public Lands Commission made its first preliminary report on March 7, 1904. It found “that the present land laws do not fit the conditions of the remaining public lands,” and recommended specific changes to meet the public needs. A year later the second report of the Commission recommended still further changes, and said “The fundamental fact that characterizes the situation under the present land laws is this, that the number of patents issued is increasing out of all proportion to the number of new homes.” This report laid the foundation of the movement for Government control of the open range, and included by far the most complete statement ever made of the disposition of the public domain.
Among the most difficult topics considered by the Public Lands Commission was that of the mineral land laws. This subject was referred by the Commission to the American Institute of Mining Engineers, which reported upon it through a Committee. This Committee made the very important recommendation, among others, “that the Government of the United States should retain title to all minerals, including coal and oil, in the lands of unceded territory, and lease the same to individuals or corporations at a fixed rental.” The necessity for this action has since come to be very generally recognized. Another recommendation, since partly carried into effect, was for the separation of the surface and the minerals in lands containing coal and oil.
Our land laws have of recent years proved inefficient; yet the land laws themselves have not been so much to blame as the lax, unintelligent, and often corrupt administration of these laws. The appointment on March 4, 1907, of James R. Garfield as Secretary of the Interior led to a new era in the interpretation and enforcement of the laws governing the public lands. His administration of the Interior Department was beyond comparison the best we have ever had. It was based primarily on the conception that it is as much the duty of public land officials to help the honest settler get title to his claim as it is to prevent the looting of the public lands. The essential fact about public land frauds is not merely that public property is stolen, but that every claim fraudulently acquired stands in the way of the making of a home or a livelihood by an honest man.
As the study of the public land laws proceeded and their administration improved, a public land policy was formulated in which the saving of the resources on the public domain for public use became the leading principle. There followed the withdrawal of coal lands as already described, of oil lands and phosphate lands, and finally, just at the end of the Administration, of water-power sites on the public domain. These withdrawals were made by the Executive in order to afford to Congress the necessary opportunity to pass wise laws dealing with their use and disposal; and the great crooked special interests fought them with incredible bitterness.
Among the men of this Nation interested in the vital problems affecting the welfare of the ordinary hard-working men and women of the Nation, there is none whose interest has been more intense, and more wholly free from taint of thought of self, than that of Thomas Watson, of Georgia. While President I often discussed with him the condition of women on the small farms, and on the frontier, the hardship of their lives as compared with those of the men, and the need for taking their welfare into consideration in whatever was done for the improvement of life on the land. I also went over the matter with C. S. Barrett, of Georgia, a leader in the Southern farmers’ movement, and with other men, such as Henry Wallace, Dean L. H. Bailey, of Cornell, and Kenyon Butterfield. One man from whose advice I especially profited was not an American, but an Irishman, Sir Horace Plunkett. In various conversations he described to me and my close associates the reconstruction of farm life which had been accomplished by the Agricultural Organization Society of Ireland, of which he was the founder and the controlling force; and he discussed the application of similar methods to the improvements of farm life in the United States. In the spring of 1908, at my request, Plunkett conferred on the subject with Garfield and Pinchot, and the latter suggested to him the appointment of a Commission on Country Life as a means for directing the attention of the Nation to the problems of the farm, and for securing the necessary knowledge of the actual conditions of life in the open country. After long discussion a plan for a Country Life Commission was laid before me and approved. The appointment of the Commission followed in August, 1908. In the letter of appointment the reasons for creating the Commission were set forth as follows: “I doubt if any other nation can bear comparison with our own in the amount of attention given by the Government, both Federal and State, to agricultural matters. But practically the whole of this effort has hitherto been directed toward increasing the production of crops. Our attention has been concentrated almost exclusively on getting better farming. In the beginning this was unquestionably the right thing to do. The farmer must first of all grow good crops in order to support himself and his family. But when this has been secured, the effort for better farming should cease to stand alone, and should be accompanied by the effort for better business and better living on the farm. It is at least as important that the farmer should get the largest possible return in money, comfort, and social advantages from the crops he grows, as that he should get the largest possible return in crops from the land he farms. Agriculture is not the whole of country life. The great rural interests are human interests, and good crops are of little value to the farmer unless they open the door to a good kind of life on the farm.”
The Commission on Country Life did work of capital importance. By means of a widely circulated set of questions the Commission informed itself upon the status of country life throughout the Nation. Its trip through the East, South, and West brought it into contact with large numbers of practical farmers and their wives, secured for the Commissioners a most valuable body of first-hand information, and laid the foundation for the remarkable awakening of interest in country life which has since taken place throughout the Nation.
One of the most illuminating–and incidentally one of the most interesting and amusing–series of answers sent to the Commission was from a farmer in Missouri. He stated that he had a wife and 11 living children, he and his wife being each 52 years old; and that they owned 520 acres of land without any mortgage hanging over their heads. He had himself done well, and his views as to why many of his neighbors had done less well are entitled to consideration. These views are expressed in terse and vigorous English; they cannot always be quoted in full. He states that the farm homes in his neighborhood are not as good as they should be because too many of them are encumbered by mortgages; that the schools do not train boys and girls satisfactorily for life on the farm, because they allow them to get an idea in their heads that city life is better, and that to remedy this practical farming should be taught. To the question whether the farmers and their wives in his neighborhood are satisfactorily organized, he answers: “Oh, there is a little one-horse grange gang in our locality, and every darned one thinks they ought to be a king.” To the question, “Are the renters of farms in your neighborhood making a satisfactory living?” he answers: “No; because they move about so much hunting a better job.” To the question, “Is the supply of farm labor in your neighborhood satisfactory?” the answer is: “No; because the people have gone out of the baby business”; and when asked as to the remedy, he answers, “Give a pension to every mother who gives birth to seven living boys on American soil.” To the question, “Are the conditions surrounding hired labor on the farm in your neighborhood satisfactory to the hired men?” he answers: “Yes, unless he is a drunken cuss,” adding that he would like to blow up the stillhouses and root out whiskey and beer. To the question, “Are the sanitary conditions on the farms in your neighborhood satisfactory?” he answers: “No; too careless about chicken yards, and the like, and poorly covered wells. In one well on neighbor’s farm I counted seven snakes in the wall of the well, and they used the water daily: his wife dead now and he is looking for another.” He ends by stating that the most important single thing to be done for the betterment of country life is “good roads”; but in his answers he shows very clearly that most important of all is the individual equation of the man or woman.
Like the rest of the Commissions described in this chapter, the Country Life Commission cost the Government not one cent, but laid before the President and the country a mass of information so accurate and so vitally important as to disturb the serenity of the advocates of things as they are; and therefore it incurred the bitter opposition of the reactionaries. The report of the Country Life Commission was transmitted to Congress by me on February 9, 1909. In the accompanying message I asked for $25,000 to print and circulate the report and to prepare for publication the immense amount of valuable material collected by the Commission but still unpublished. The reply made by Congress was not only a refusal to appropriate the money, but a positive prohibition against continuing the work. The Tawney amendment to the Sundry Civil bill forbade the President to appoint any further Commissions unless specifically authorized by Congress to do so. Had this prohibition been enacted earlier /and complied with/, it would have prevented the appointment of the six Roosevelt commissions. But I would not have complied with it. Mr. Tawney, one of the most efficient representatives of the cause of special privilege as against public interest to be found in the House, was later, in conjunction with Senator Hale and others, able to induce my successor to accept their view. As what was almost my last official act, I replied to Congress that if I did not believe the Tawney amendment to be unconstitutional I would veto the Sundry Civil bill which contained it, and that if I were remaining in office I would refuse to obey it. The memorandum ran in part:
“The chief object of this provision, however, is to prevent the Executive repeating what it has done within the last year in connection with the Conservation Commission and the Country Life Commission. It is for the people of the country to decide whether or not they believe in the work done by the Conservation Commission and by the Country Life Commission. . . .
“If they believe in improving our waterways, in preventing the waste of soil, in preserving the forests, in thrifty use of the mineral resources of the country for the nation as a whole rather than merely for private monopolies, in working for the betterment of the condition of the men and women who live on the farms, then they will unstintedly condemn the action of every man who is in any way responsible for inserting this provision, and will support those members of the legislative branch who opposed its adoption. I would not sign the bill at all if I thought the provision entirely effective. But the Congress cannot prevent the President from seeking advice. Any future President can do as I have done, and ask disinterested men who desire to serve the people to give this service free to the people through these commissions. . . .
“My successor, the President-elect, in a letter to the Senate Committee on Appropriations, asked for the continuance and support of the Conservation Commission. The Conservation Commission was appointed at the request of the Governors of over forty States, and almost all of these States have since appointed commissions to cooperate with the National Commission. Nearly all the great national organizations concerned with natural resources have been heartily cooperating with the commission.
“With all these facts before it, the Congress has refused to pass a law to continue and provide for the commission; and it now passes a law with the purpose of preventing the Executive from continuing the commission at all. The Executive, therefore, must now either abandon the work and reject the cooperation of the States, or else must continue the work personally and through executive officers whom he may select for that purpose.”
The Chamber of Commerce of Spokane, Washington, a singularly energetic and far-seeing organization, itself published the report which Congress had thus discreditably refused to publish.
The work of the Bureau of Corporations, under Herbert Knox Smith, formed an important part of the Conservation movement almost from the beginning. Mr. Smith was a member of the Inland Waterways Commission and of the National Conservation Commission and his Bureau prepared material of importance for the reports of both. The investigation of standing timber in the United States by the Bureau of Corporations furnished for the first time a positive knowledge of the facts. Over nine hundred counties in timbered regions were covered by the Bureau, and the work took five years. The most important facts ascertained were that forty years ago three-fourths of the standing timber in the United States was publicly owned, while at the date of the report four-fifths of the timber in the country was in private hands. The concentration of private ownership had developed to such an amazing extent that about two hundred holders owned nearly one-half of all privately owned timber in the United States; and of this the three greatest holders, the Southern Pacific Railway, the Northern Pacific Railway, and the Weyerhaeuser Timber Company, held over ten per cent. Of this work, Mr. Smith says:
“It was important, indeed, to know the facts so that we could take proper action toward saving the timber still left to the public. But of far more importance was the light that this history (and the history of our other resources) throws on the basic attitude, tradition and governmental beliefs of the American people. The whole standpoint of the people toward the proper aim of government, toward the relation of property to the citizen, and the relation of property to the government, were brought out first by this Conservation work.”
The work of the Bureau of Corporations as to water power was equally striking. In addition to bringing the concentration of water-power control first prominently to public attention, through material furnished for my message in my veto of the James River Dam Bill, the work of the Bureau showed that ten great interests and their allies held nearly sixty per cent of the developed water power of the United States. Says Commissioner Smith: “Perhaps the most important thing in the whole work was its clear demonstration of the fact that the only effective place to control water power in the public interest is at the power sites; that as to powers now owned by the public it is absolutely essential that the public shall retain title. . . . The only way in which the public can get back to itself the margin of natural advantage in the water-power site is to rent that site at a rental which, added to the cost of power production there, will make the total cost of water power about the same as fuel power, and then let the two sell at the same price, i. e., the price of fuel power.”
Of the fight of the water-power men for States Rights at the St. Paul Conservation Congress in September, 1909, Commissioner Smith says:
“It was the first open sign of the shift of the special interests to the Democratic party for a logical political reason, namely, because of the availability of the States Rights idea for the purposes of the large corporations. It marked openly the turn of the tide.”
Mr. Smith brought to the attention of the Inland Waterways Commission the overshadowing importance to waterways of their relation with railroad lines, the fact that the bulk of the traffic is long distance traffic, that it cannot pass over the whole distance by water, while it can go anywhere by rail, and that therefore the power of the rail lines to pro-rate or not to pro-rate, with water lines really determines the practical value of a river channel. The controlling value of terminals and the fact that out of fifty of our leading ports, over half the active water frontage in twenty-one ports was controlled by the railroads, was also brought to the Commission’s attention, and reports of great value were prepared both for the Inland Waterways Commission and for the National Conservation Commission. In addition to developing the basic facts about the available timber supply, about waterways, water power, and iron ore, Mr. Smith helped to develop and drive into the public conscience the idea that the people ought to retain title to our natural resources and handle them by the leasing system.
The things accomplished that have been enumerated above were of immediate consequence to the economic well-being of our people. In addition certain things were done of which the economic bearing was more remote, but which bore directly upon our welfare, because they add to the beauty of living and therefore to the joy of life. Securing a great artist, Saint-Gaudens, to give us the most beautiful coinage since the decay of Hellenistic Greece was one such act. In this case I had power myself to direct the Mint to employ Saint-Gaudens. The first, and most beautiful, of his coins were issued in thousands before Congress assembled or could intervene; and a great and permanent improvement was made in the beauty of the coinage. In the same way, on the advice and suggestion of Frank Millet, we got some really capital medals by sculptors of the first rank. Similarly, the new buildings in Washington were erected and placed in proper relation to one another, on plans provided by the best architects and landscape architects. I also appointed a Fine Arts Council, an unpaid body of the best architects, painters, and sculptors in the country, to advise the Government as to the erection and decoration of all new buildings. The “pork-barrel” Senators and Congressmen felt for this body an instinctive, and perhaps from their standpoint a natural, hostility; and my successor a couple of months after taking office revoked the appointment and disbanded the Council.
Even more important was the taking of steps to preserve from destruction beautiful and wonderful wild creatures whose existence was threatened by greed and wantonness. During the seven and a half years closing on March 4, 1909, more was accomplished for the protection of wild life in the United States than during all the previous years, excepting only the creation of the Yellowstone National Park. The record includes the creation of five National Parks–Crater Lake, Oregon; Wind Cave, South Dakota; Platt, Oklahoma; Sully Hill, North Dakota, and Mesa Verde, Colorado; four big game refuges in Oklahoma, Arizona, Montana, and Washington; fifty-one bird reservations; and the enactment of laws for the protection of wild life in Alaska, the District of Columbia, and on National bird reserves. These measures may be briefly enumerated as follows:
The enactment of the first game laws for the Territory of Alaska in 1902 and 1908, resulting in the regulation of the export of heads and trophies of big game and putting an end to the slaughter of deer for hides along the southern coast of the Territory.
The securing in 1902 of the first appropriation for the preservation of buffalo and the establishment in the Yellowstone National Park of the first and now the largest herd of buffalo belonging to the Government.
The passage of the Act of January 24, 1905, creating the Wichita Game Preserves, the first of the National game preserves. In 1907, 12,000 acres of this preserve were inclosed with a woven wire fence for the reception of the herd of fifteen buffalo donated by the New York Zoological Society.
The passage of the Act of June 29, 1906, providing for the establishment of the Grand Canyon Game Preserve of Arizona, now comprising 1,492,928 acres.
The passage of the National Monuments Act of June 8, 1906, under which a number of objects of scientific interest have been preserved for all time. Among the Monuments created are Muir Woods, Pinnacles National Monument in California, and the Mount Olympus National Monument, Washington, which form important refuges for game.
The passage of the Act of June 30, 1906, regulating shooting in the District of Columbia and making three-fourths of the environs of the National Capital within the District in effect a National Refuge.
The passage of the Act of May 23, 1908, providing for the establishment of the National Bison Range in Montana. This range comprises about 18,000 acres of land formerly in the Flathead Indian Reservation, on which is now established a herd of eighty buffalo, a nucleus of which was donated to the Government by the American Bison Society.
The issue of the Order protecting birds on the Niobrara Military Reservation, Nebraska, in 1908, making this entire reservation in effect a bird reservation.
The establishment by Executive Order between March 14, 1903, and March 4, 1909, of fifty-one National Bird Reservations distributed in seventeen States and Territories from Porto Rico to Hawaii and Alaska. The creation of these reservations at once placed the United States in the front rank in the world work of bird protection. Among these reservations are the celebrated Pelican Island rookery in Indian River, Florida; the Mosquito Inlet Reservation, Florida, the northernmost home of the manatee; the extensive marshes bordering Klamath and Malhuer Lakes in Oregon, formerly the scene of slaughter of ducks for market and ruthless destruction of plume birds for the millinery trade; the Tortugas Key, Florida, where, in connection with the Carnegie Institute, experiments have been made on the homing instinct of birds; and the great bird colonies on Laysan and sister islets in Hawaii, some of the greatest colonies of sea birds in the world.
CHAPTER XII
THE BIG STICK AND THE SQUARE DEAL
One of the vital questions with which as President I had to deal was the attitude of the Nation toward the great corporations. Men who understand and practice the deep underlying philosophy of the Lincoln school of American political thought are necessarily Hamiltonian in their belief in a strong and efficient National Government and Jeffersonian in their belief in the people as the ultimate authority, and in the welfare of the people as the end of Government. The men who first applied the extreme Democratic theory in American life were, like Jefferson, ultra individualists, for at that time what was demanded by our people was the largest liberty for the individual. During the century that had elapsed since Jefferson became President the need had been exactly reversed. There had been in our country a riot of individualistic materialism, under which complete freedom for the individual–that ancient license which President Wilson a century after the term was excusable has called the “New” Freedom–turned out in practice to mean perfect freedom for the strong to wrong the weak. The total absence of governmental control had led to a portentous growth in the financial and industrial world both of natural individuals and of artificial individuals–that is, corporations. In no other country in the world had such enormous fortunes been gained. In no other country in the world was such power held by the men who had gained these fortunes; and these men almost always worked through, and by means of, the giant corporations which they controlled. The power of the mighty industrial overlords of the country had increased with giant strides, while the methods of controlling them, or checking abuses by them, on the part of the people, through the Government, remained archaic and therefore practically impotent. The courts, not unnaturally, but most regrettably, and to the grave detriment of the people and of their own standing, had for a quarter of a century been on the whole the agents of reaction, and by conflicting decisions which, however, in their sum were hostile to the interests of the people, had left both the nation and the several States well-nigh impotent to deal with the great business combinations. Sometimes they forbade the Nation to interfere, because such interference trespassed on the rights of the States; sometimes they forbade the States to interfere (and often they were wise in this), because to do so would trespass on the rights of the Nation; but always, or well-nigh always, their action was negative action against the interests of the people, ingeniously devised to limit their power against wrong, instead of affirmative action giving to the people power to right wrong. They had rendered these decisions sometimes as upholders of property rights against human rights, being especially zealous in securing the rights of the very men who were most competent to take care of themselves; and sometimes in the name of liberty, in the name of the so-called “new freedom,” in reality the old, old “freedom,” which secured to the powerful the freedom to prey on the poor and the helpless.
One of the main troubles was the fact that the men who saw the evils and who tried to remedy them attempted to work in two wholly different ways, and the great majority of them in a way that offered little promise of real betterment. They tried (by the Sherman law method) to bolster up an individualism already proved to be both futile and mischievous; to remedy by more individualism the concentration that was the inevitable result of the already existing individualism. They saw the evil done by the big combinations, and sought to remedy it by destroying them and restoring the country to the economic conditions of the middle of the nineteenth century. This was a hopeless effort, and those who went into it, although they regarded themselves as radical progressives, really represented a form of sincere rural toryism. They confounded monopolies with big business combinations, and in the effort to prohibit both alike, instead of where possible prohibiting one and drastically controlling the other, they succeeded merely in preventing any effective control of either.
On the other hand, a few men recognized that corporations and combinations had become indispensable in the business world, that it was folly to try to prohibit them, but that it was also folly to leave them without thoroughgoing control. These men realized that the doctrines of the old laissez faire economists, of the believers in unlimited competition, unlimited individualism, were in the actual state of affairs false and mischievous. They realized that the Government must now interfere to protect labor, to subordinate the big corporation to the public welfare, and to shackle cunning and fraud exactly as centuries before it had interfered to shackle the physical force which does wrong by violence.
The big reactionaries of the business world and their allies and instruments among politicians and newspaper editors took advantage of this division of opinion, and especially of the fact that most of their opponents were on the wrong path; and fought to keep matters absolutely unchanged. These men demanded for themselves an immunity from governmental control which, if granted, would have been as wicked and as foolish as immunity to the barons of the twelfth century. Many of them were evil men. Many others were just as good men as were some of these same barons; but they were as utterly unable as any medieval castle-owner to understand what the public interest really was. There have been aristocracies which have played a great and beneficent part at stages in the growth of mankind; but we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.
When I became President, the question as to the method by which the United States Government was to control the corporations was not yet important. The absolutely vital question was whether the Government had power to control them at all. This question had not yet been decided in favor of the United States Government. It was useless to discuss methods of controlling big business by the National Government until it was definitely settled that the National Government had the power to control it. A decision of the Supreme Court had, with seeming definiteness, settled that the National Government had not the power.
This decision I caused to be annulled by the court that had rendered it; and the present power of the National Government to deal effectively with the trusts is due solely to the success of the Administration in securing this reversal of its former decision by the Supreme Court.
The Constitution was formed very largely because it had become imperative to give to some central authority the power to regulate and control interstate commerce. At that time when corporations were in their infancy and big combinations unknown, there was no difficulty in exercising the power granted. In theory, the right of the Nation to exercise this power continued unquestioned. But changing conditions obscured the matter in the sight of the people as a whole; and the conscious and the unconscious advocates of an unlimited and uncontrollable capitalism gradually secured the whittling away of the National power to exercise this theoretical right of control until it practically vanished. After the Civil War, with the portentous growth of industrial combinations in this country, came a period of reactionary decisions by the courts which, as regards corporations, culminated in what is known as the Knight case.
The Sherman Anti-Trust Law was enacted in 1890 because the formation of the Tobacco Trust and the Sugar Trust, the only two great trusts then in the country (aside from the Standard Oil Trust, which was a gradual growth), had awakened a popular demand for legislation to destroy monopoly and curb industrial combinations. This demand the Anti-Trust Law was intended to satisfy. The Administrations of Mr. Harrison and Mr. Cleveland evidently construed this law as prohibiting such combinations in the future, not as condemning those which had been formed prior to its enactment. In 1895, however, the Sugar Trust, whose output originally was about fifty-five per cent of all sugar produced in the United States, obtained control of three other companies in Philadelphia by exchanging its stock for theirs, and thus increased its business until it controlled ninety-eight per cent of the entire product. Under Cleveland, the Government brought proceedings against the Sugar Trust, invoking the Anti-Trust Law, to set aside the acquisition of these corporations. The test case was on the absorption of the Knight Company. The Supreme Court of the United States, with but one dissenting vote, held adversely to the Government. They took the ground that the power conferred by the Constitution to regulate and control interstate commerce did not extend to the production or manufacture of commodities within a State, and that nothing in the Sherman Anti-Trust Law prohibited a corporation from acquiring all the stock of other corporations through exchange of its stock for theirs, such exchange not being “commerce” in the opinion of the Court, even though by such acquisition the corporation was enabled to control the entire production of a commodity that was a necessary of life. The effect of this decision was not merely the absolute nullification of the Anti-Trust Law, so far as industrial corporations were concerned, but was also in effect a declaration that, under the Constitution, the National Government could pass no law really effective for the destruction or control of such combinations.
This decision left the National Government, that is, the people of the Nation, practically helpless to deal with the large combinations of modern business. The courts in other cases asserted the power of the Federal Government to enforce the Anti-Trust Law so far as transportation rates by railways engaged in interstate commerce were concerned. But so long as the trusts were free to control the production of commodities without interference from the General Government, they were well content to let the transportation of commodities take care of itself–especially as the law against rebates was at that time a dead letter; and the Court by its decision in the Knight case had interdicted any interference by the President or by Congress with the production of commodities. It was on the authority of this case that practically all the big trusts in the United States, excepting those already mentioned, were formed. Usually they were organized as “holding” companies, each one acquiring control of its constituent corporations by exchanging its stock for theirs, an operation which the Supreme Court had thus decided could not be prohibited, controlled, regulated, or even questioned by the Federal Government.
Such was the condition of our laws when I acceded to the Presidency. Just before my accession, a small group of financiers, desiring to profit by the governmental impotence to which we had been reduced by the Knight decision, had arranged to take control of practically the entire railway system in the Northwest–possibly as the first step toward controlling the entire railway system of the country. This control of the Northwestern railway systems was to be effected by organizing a new “holding” company, and exchanging its stock against the stock of the various corporations engaged in railway transportation throughout that vast territory, exactly as the Sugar Trust had acquired control of the Knight company and other concerns. This company was called the Northern Securities Company. Not long after I became President, on the advice of the Attorney-General, Mr. Knox, and through him, I ordered proceedings to be instituted for the dissolution of the company. As far as could be told by their utterances at the time, among all the great lawyers in the United States Mr. Knox was the only one who believed that this action could be sustained. The defense was based expressly on the ground that the Supreme Court in the Knight case had explicitly sanctioned the formation of such a company as the Northern Securities Company. The representatives of privilege intimated, and sometimes asserted outright, that in directing the action to be brought I had shown a lack of respect for the Supreme Court, which had already decided the question at issue by a vote of eight to one. Mr. Justice White, then on the Court and now Chief Justice, set forth the position that the two cases were in principle identical with incontrovertible logic. In giving the views of the dissenting minority on the action I had brought, he said:
“The parallel between the two cases [the Knight case and the Northern Securities case] is complete. The one corporation acquired the stock of other and competing corporations in exchange for its own. It was conceded for the purposes of the case, that in doing so monopoly had been brought about in the refining of sugar, that the sugar to be produced was likely to become the subject of interstate commerce, and indeed that part of it would certainly become so. But the power of Congress was decided not to extend to the subject, because the ownership of the stock in the corporations was not itself commerce.”
Mr. Justice White was entirely correct in this statement. The cases were parallel. It was necessary to reverse the Knight case in the interests of the people against monopoly and privilege just as it had been necessary to reverse the Dred Scott case in the interest of the people against slavery and privilege; just as later it became necessary to reverse the New York Bakeshop case in the interest of the people against that form of monopolistic privilege which put human rights below property rights where wage workers were concerned.
By a vote of five to four the Supreme Court reversed its decision in the Knight case, and in the Northern Securities case sustained the Government. The power to deal with industrial monopoly and suppress it and to control and regulate combinations, of which the Knight case had deprived the Federal Government, was thus restored to it by the Northern Securities case. After this later decision was rendered, suits were brought by my direction against the American Tobacco Company and the Standard Oil Company. Both were adjudged criminal conspiracies, and their dissolution ordered. The Knight case was finally overthrown. The vicious doctrine it embodied no longer remains as an obstacle to obstruct the pathway of justice when it assails monopoly. Messrs. Knox, Moody, and Bonaparte, who successively occupied the position of Attorney-General under me, were profound lawyers and fearless and able men; and they completely established the newer and more wholesome doctrine under which the Federal Government may now deal with monopolistic combinations and conspiracies.
The decisions rendered in these various cases brought under my direction constitute the entire authority upon which any action must rest that seeks through the exercise of national power to curb monopolistic control. The men who organized and directed the Northern Securities Company were also the controlling forces in the Steel Corporation, which has since been prosecuted under the act. The proceedings against the Sugar Trust for corruption in connection with the New York Custom House are sufficiently interesting to be considered separately.
From the standpoint of giving complete control to the National Government over big corporations engaged in inter-State business, it would be impossible to over-estimate the importance of the Northern Securities decision and of the decisions afterwards rendered in line with it in connection with the other trusts whose dissolution was ordered. The success of the Northern Securities case definitely established the power of the Government to deal with all great corporations. Without this success the National Government must have remained in the impotence to which it had been reduced by the Knight decision as regards the most important of its internal functions. But our success in establishing the power of the National Government to curb monopolies did not establish the right method of exercising that power. We had gained the power. We had not devised the proper method of exercising it.
Monopolies can, although in rather cumbrous fashion, be broken up by law suits. Great business combinations, however, cannot possibly be made useful instead of noxious industrial agencies merely by law suits, and especially by law suits supposed to be carried on for their destruction and not for their control and regulation. I at once began to urge upon Congress the need of laws supplementing the Anti-Trust Law–for this law struck at all big business, good and bad, alike, and as the event proved was very inefficient in checking bad big business, and yet was a constant threat against decent business men. I strongly urged the inauguration of a system of thoroughgoing and drastic Governmental regulation and control over all big business combinations engaged in inter-State industry.
Here I was able to accomplish only a small part of what I desired to accomplish. I was opposed both by the foolish radicals who desired to break up all big business, with the impossible ideal of returning to mid-nineteenth century industrial conditions; and also by the great privileged interests themselves, who used these ordinarily–but sometimes not entirely–well-meaning “stool pigeon progressives” to further their own cause. The worst representatives of big business encouraged the outcry for the total abolition of big business, because they knew that they could not be hurt in this way, and that such an outcry distracted the attention of the public from the really efficient method of controlling and supervising them, in just but masterly fashion, which was advocated by the sane representatives of reform. However, we succeeded in making a good beginning by securing the passage of a law creating the Department of Commerce and Labor, and with it the erection of the Bureau of Corporations. The first head of the Department of Commerce and Labor was Mr. Cortelyou, later Secretary of the Treasury. He was succeeded by Mr. Oscar Straus. The first head of the Bureau of Corporations was Mr. Garfield, who was succeeded by Mr. Herbert Knox Smith. No four better public servants from the standpoint of the people as a whole could have been found.
The Standard Oil Company took the lead in opposing all this legislation. This was natural, for it had been the worst offender in the amassing of enormous fortunes by improper methods of all kinds, at the expense of business rivals and of the public, including the corruption of public servants. If any man thinks this condemnation extreme, I refer him to the language officially used by the Supreme Court of the nation in its decision against the Standard Oil Company. Through their counsel, and by direct telegrams and letters to Senators and Congressmen from various heads of the Standard Oil organization, they did their best to kill the bill providing for the Bureau of Corporations. I got hold of one or two of these telegrams and letters, however, and promptly published them; and, as generally happens in such a case, the men who were all-powerful as long as they could work in secret and behind closed doors became powerless as soon as they were forced into the open. The bill went through without further difficulty.
The true way of dealing with monopoly is to prevent it by administrative action before it grows so powerful that even when courts condemn it they shrink from destroying it. The Supreme Court in the Tobacco and Standard Oil cases, for instance, used very vigorous language in condemning these trusts; but the net result of the decision was of positive advantage to the wrongdoers, and this has tended to bring the whole body of our law into disrepute in quarters where it is of the very highest importance that the law be held in respect and even in reverence. My effort was to secure the creation of a Federal Commission which should neither excuse nor tolerate monopoly, but prevent it when possible and uproot it when discovered; and which should in addition effectively control and regulate all big combinations, and should give honest business certainty as to what the law was and security as long as the law was obeyed. Such a Commission would furnish a steady expert control, a control adapted to the problem; and dissolution is neither control nor regulation, but is purely negative; and negative remedies are of little permanent avail. Such a Commission would have complete power to examine into every big corporation engaged or proposing to engage in business between the States. It would have the power to discriminate sharply between corporations that are doing well and those that are doing ill; and the distinction between those who do well and those who do ill would be defined in terms so clear and unmistakable that no one could misapprehend them. Where a company is found seeking its profits through serving the community by stimulating production, lowering prices, or improving service, while scrupulously respecting the rights of others (including its rivals, its employees, its customers, and the general public), and strictly obeying the law, then no matter how large its capital, or how great the volume of its business it would be encouraged to still more abundant production, or better service, by the fullest protection that the Government could afford it. On the other hand, if a corporation were found seeking profit through injury or oppression of the community, by restricting production through trick or device, by plot or conspiracy against competitors, or by oppression of wage-workers, and then extorting high prices for the commodity it had made artificially scarce, it would be prevented from organizing if its nefarious purpose could be discovered in time, or pursued and suppressed by all the power of Government whenever found in actual operation. Such a commission, with the power I advocate, would put a stop to abuses of big corporations and small corporations alike; it would draw the line on conduct and not on size; it would destroy monopoly, and make the biggest business man in the country conform squarely to the principles laid down by the American people, while at the same time giving fair play to the little man and certainty of knowledge as to what was wrong and what was right both to big man and little man.
Although under the decision of the courts the National Government had power over the railways, I found, when I became President, that this power was either not exercised at all or exercised with utter inefficiency. The law against rebates was a dead letter. All the unscrupulous railway men had been allowed to violate it with impunity; and because of this, as was inevitable, the scrupulous and decent railway men had been forced to violate it themselves, under penalty of being beaten by their less scrupulous rivals. It was not the fault of these decent railway men. It was the fault of the Government.
Thanks to a first-class railway man, Paul Morton of the Santa Fe, son of Mr. Cleveland’s Secretary of Agriculture, I was able completely to stop the practice. Mr. Morton volunteered to aid the Government in abolishing rebates. He frankly stated that he, like every one else, had been guilty in the matter; but he insisted that he uttered the sentiments of the decent railway men of the country when he said that he hoped the practice would be stopped, and that if I would really stop it, and not merely make believe to stop it, he would give the testimony which would put into the hands of the Government the power to put a complete check to the practice. Accordingly he testified, and on the information which he gave us we were able to take such action through the Inter-State Commerce Commission and the Department of Justice, supplemented by the necessary additional legislation, that the evil was absolutely eradicated. He thus rendered, of his own accord, at his own personal risk, and from purely disinterested motives, an invaluable service to the people, a service which no other man who was able to render was willing to render. As an immediate sequel, the world-old alliance between Blifil and Black George was immediately revived against Paul Morton. In giving rebates he had done only what every honest railway man in the country had been obliged to do because of the failure of the Government to enforce the prohibition as regards dishonest railway men. But unlike his fellows he had then shown the courage and sense of obligation to the public which made him come forward and without evasion or concealment state what he had done, in order that we might successfully put an end to the practice; and put an end to the practice we did, and we did it because of the courage and patriotism he had shown. The unscrupulous railway men, whose dishonest practices were thereby put a stop to, and the unscrupulous demagogues who were either under the influence of these men or desirous of gaining credit with thoughtless and ignorant people no matter who was hurt, joined in vindictive clamor against Mr. Morton. They actually wished me to prosecute him, although such prosecution would have been a piece of unpardonable ingratitude and treachery on the part of the public toward him–for I was merely acting as the steward of the public in this matter. I need hardly say that I stood by him; and later he served under me as Secretary of the Navy, and a capital Secretary he made too.
We not only secured the stopping of rebates, but in the Hepburn Rate Bill we were able to put through a measure which gave the Inter-State Commerce Commission for the first time real control over the railways. There were two or three amusing features in the contest over this bill. All of the great business interests which objected to Governmental control banded to fight it, and they were helped by the honest men of ultra-conservative type who always dread change, whether good or bad. We finally forced it through the House. In the Senate it was referred to a committee in which the Republican majority was under the control of Senator Aldrich, who took the lead in opposing the bill. There was one Republican on the committee, however, whom Senator Aldrich could not control–Senator Dolliver, of Iowa. The leading Democrat on the committee was Senator Tillman, of South Carolina, with whom I was not on good terms, because I had been obliged to cancel an invitation to him to dine at the White House on account of his having made a personal assault in the Senate Chamber on his colleague from South Carolina; and later I had to take action against him on account of his conduct in connection with certain land matters. Senator Tillman favored the bill. The Republican majority in the committee under Senator Aldrich, when they acted adversely on the bill, turned it over to Senator Tillman, thereby making him its sponsor. The object was to create what it was hoped would be an impossible situation in view of the relations between Senator Tillman and myself. I regarded the action as simply childish. It was a curious instance of how able and astute men sometimes commit blunders because of sheer inability to understand intensity of disinterested motive in others. I did not care a rap about Mr. Tillman’s getting credit for the bill, or having charge of it. I was delighted to go with him or with any one else just so long as he was traveling in my way–and no longer.
There was another amusing incident in connection with the passage of the bill. All the wise friends of the effort to secure Governmental control of corporations know that this Government control must be exercised through administrative and not judicial officers if it is to be effective. Everything possible should be done to minimize the chance of appealing from the decisions of the administrative officer to the courts. But it is not possible Constitutionally, and probably would not be desirable anyhow, completely to abolish the appeal. Unwise zealots wished to make the effort totally to abolish the appeal in connection with the Hepburn Bill. Representatives of the special interests wished to extend the appeal to include what it ought not to include. Between stood a number of men whose votes would mean the passage of, or the failure to pass, the bill, and who were not inclined towards either side. Three or four substantially identical amendments were proposed, and we then suddenly found ourselves face to face with an absurd situation. The good men who were willing to go with us but had conservative misgivings about the ultra-radicals would not accept a good amendment if one of the latter proposed it; and the radicals would not accept their own amendment if one of the conservatives proposed it. Each side got so wrought up as to be utterly unable to get matters into proper perspective; each prepared to stand on unimportant trifles; each announced with hysterical emphasis–the reformers just as hysterically as the reactionaries– that the decision as regards each unimportant trifle determined the worth or worthlessness of the measure. Gradually we secured a measurable return to sane appreciation of the essentials. Finally both sides reluctantly agreed to accept the so-called Allison amendment which did not, as a matter of fact, work any change in the bill at all. The amendment was drawn by Attorney-General Moody after consultation with the Inter-State Commerce Commission, and was forwarded by me to Senator Dolliver; it was accepted, and the bill became law.
Thanks to this law and to the way in which the Inter-State Commerce Commission was backed by the Administration, the Commission, under men like Prouty, Lane, and Clark, became a most powerful force for good. Some of the good that we had accomplished was undone after the close of my Administration by the unfortunate law creating a Commerce Court; but the major part of the immense advance we had made remained. There was one point on which I insisted, and upon which it is necessary always to insist. The Commission cannot do permanent good unless it does justice to the corporations precisely as it exacts justice from them. The public, the shippers, the stock and bondholders, and the employees, all have their rights, and none should be allowed unfair privileges at the expense of the others. Stock watering and swindling of any kind should of course not only be stopped but punished. When, however, a road is managed fairly and honestly, and when it renders a real and needed service, then the Government must see that it is not so burdened as to make it impossible to run it at a profit. There is much wise legislation necessary for the safety of the public, or–like workmen’s compensation–necessary to the well-being of the employee, which nevertheless imposes such a burden on the road that the burden must be distributed between the general public and the corporation, or there will be no dividends. In such a case it may be the highest duty of the commission to raise rates; and the commission, when satisfied that the necessity exists, in order to do justice to the owners of the road, should no more hesitate to raise rates, than under other circumstances to lower them.
So much for the “big stick” in dealing with the corporations when they went wrong. Now for a sample of the square deal.
In the fall of 1907 there were severe business disturbances and financial stringency, culminating in a panic which arose in New York and spread over the country. The damage actually done was great, and the damage threatened was incalculable. Thanks largely to the action of the Government, the panic was stopped before, instead of being merely a serious business check, it became a frightful and Nation-wide calamity, a disaster fraught with untold misery and woe to all our people. For several days the Nation trembled on the brink of such a calamity, of such a disaster.
During these days both the Secretary of the Treasury and I personally were in hourly communication with New York, following every change in the situation, and trying to anticipate every development. It was the obvious duty of the Administration to take every step possible to prevent appalling disaster by checking the spread of the panic before it grew so that nothing could check it. And events moved with such speed that it was necessary to decide and to act on the instant, as each successive crisis arose, if the decision and action were to accomplish anything. The Secretary of the Treasury took various actions, some on his own initiative, some by my direction. Late one evening I was informed that two representatives of the Steel Corporation wished to see me early the following morning, the precise object not being named. Next morning, while at breakfast, I was informed that Messrs. Frick and Gary were waiting at the office. I at once went over, and, as the Attorney-General, Mr. Bonaparte, had not yet arrived from Baltimore, where he had been passing the night, I sent a message asking the Secretary of State, Mr. Root, who was also a lawyer, to join us, which he did. Before the close of the interview and in the presence of the three gentlemen named, I dictated a note to Mr. Bonaparte, setting forth exactly what Messrs. Frick and Gary had proposed, and exactly what I had answered–so that there might be no possibility of misunderstanding. This note was published in a Senate Document while I was still President. It runs as follows:
THE WHITE HOUSE, Washington, November 4, 1907.
My dear Mr. Attorney-General:
Judge E. H. Gary and Mr. H. C. Frick, on behalf of the Steel Corporation, have just called upon me. They state that there is a certain business firm (the name of which I have not been told, but which is of real importance in New York business circles), which will undoubtedly fail this week if help is not given. Among its assets are a majority of the securities of the Tennessee Coal Company. Application has been urgently made to the Steel Corporation to purchase this stock as the only means of avoiding a failure. Judge Gary and Mr. Frick informed me that as a mere business transaction they do not care to purchase the stock; that under ordinary circumstances they would not consider purchasing the stock, because but little benefit will come to the Steel Corporation from the purchase; that they are aware that the purchase will be used as a handle for attack upon them on the ground that they are striving to secure a monopoly of the business and prevent competition–not that this would represent what could honestly be said, but what might recklessly and untruthfully be said.
They further informed me that, as a matter of fact, the policy of the company has been to decline to acquire more than sixty per cent of the steel properties, and that this purpose has been persevered in for several years past, with the object of preventing these accusations, and, as a matter of fact, their proportion of steel properties has slightly decreased, so that it is below this sixty per cent, and the acquisition of the property in question will not raise it above sixty per cent. But they feel that it is immensely to their interest, as to the interest of every responsible business man, to try to prevent a panic and general industrial smash-up at this time, and that they are willing to go into this transaction, which they would not otherwise go into, because it seems the opinion of those best fitted to express judgment in New York that it will be an important factor in preventing a break that might be ruinous; and that this has been urged upon them by the combination of the most responsible bankers in New York who are now thus engaged in endeavoring to save the situation. But they asserted that they did not wish to do this if I stated that it ought not to be done. I answered that, while of course I could not advise them to take the action proposed, I felt it no public duty of mine to interpose any objections.
Sincerely yours, (Signed) THEODORE ROOSEVELT.
HON. CHARLES J. BONAPARTE,
Attorney-General.
Mr. Bonaparte received this note in about an hour, and that same morning he came over, acknowledged its receipt, and said that my answer was the only proper answer that could have been made, having regard both to the law and to the needs of the situation. He stated that the legal situation had been in no way changed, and that no sufficient ground existed for prosecution of the Steel Corporation. But I acted purely on my own initiative, and the responsibility for the act was solely mine.
I was intimately acquainted with the situation in New York. The word “panic” means fear, unreasoning fear; to stop a panic it is necessary to restore confidence; and at the moment the so-called Morgan interests were the only interests which retained a full hold on the confidence of the people of New York–not only the business people, but the immense mass of men and women who owned small investments or had small savings in the banks and trust companies. Mr. Morgan and his associates were of course fighting hard to prevent the loss of confidence and the panic distrust from increasing to such a degree as to bring any other big financial institutions down; for this would probably have been followed by a general, and very likely a worldwide, crash. The Knickerbocker Trust Company had already failed, and runs had begun on, or were threatened as regards, two other big trust companies. These companies were now on the fighting line, and it was to the interest of everybody to strengthen them, in order that the situation might be saved. It was a matter of general knowledge and belief that they, or the individuals prominent in them, held the securities of the Tennessee Coal and Iron Company, which securities had no market value, and were useless as a source of strength in the emergency. The Steel Corporation securities, on the contrary, were immediately marketable, their great value being known and admitted all over the world–as the event showed. The proposal of Messrs. Frick and Gary was that the Steel Corporation should at once acquire the Tennessee Coal and Iron Company, and thereby substitute, among the assets of the threatened institutions (which, by the way, they did not name to me), securities of great and immediate value for securities which at the moment were of no value. It was necessary for me to decide on the instant, before the Stock Exchange opened, for the situation in New York was such that any hour might be vital, and failure to act for even an hour might make all subsequent effort to act utterly useless. From the best information at my disposal, I believed (what was actually the fact) that the addition of the Tennessee Coal and Iron property would only increase the proportion of the Steel Company’s holdings by about four per cent, making them about sixty-two per cent instead of about fifty-eight per cent of the total value in the country; an addition which, by itself, in my judgment (concurred in, not only by the Attorney-General but by every competent lawyer), worked no change in the legal status of the Steel corporation. The diminution in the percentage of holdings, and production, has gone on steadily, and the percentage is now about ten per cent less than it was ten years ago.
The action was emphatically for the general good. It offered the only chance for arresting the panic, and it did arrest the panic. I answered Messrs. Frick and Gary, as set forth in the letter quoted above, to the effect that I did not deem it my duty to interfere, that is, to forbid the action which more than anything else in actual fact saved the situation. The result justified my judgment. The panic was stopped, public confidence in the solvency of the threatened institution being at once restored.
Business was vitally helped by what I did. The benefit was not only for the moment. It was permanent. Particularly was this the case in the South. Three or four years afterwards I visited Birmingham. Every man I met, without exception, who was competent to testify, informed me voluntarily that the results of the action taken had been of the utmost benefit to Birmingham, and therefore to Alabama, the industry having profited to an extraordinary degree, not only from the standpoint of the business, but from the standpoint of the community at large and of the wage-workers, by the change in ownership. The results of the action I took were beneficial from every standpoint, and the action itself, at the time when it was taken, was vitally necessary to the welfare of the people of the United States.
I would have been derelict in my duty, I would have shown myself a timid and unworthy public servant, if in that extraordinary crisis I had not acted precisely as I did act. In every such crisis the temptation to indecision, to non-action, is great, for excuses can always be found for non-action, and action means risk and the certainty of blame to the man who acts. But if the man is worth his salt he will do his duty, he will give the people the benefit of the doubt, and act in any way which their interests demand and which is not affirmatively prohibited by law, unheeding the likelihood that he himself, when the crisis is over and the danger past, will be assailed for what he has done.
Every step I took in this matter was open as the day, and was known in detail at the moment to all people. The press contained full accounts of the visit to me of Messrs. Frick and Gary, and heralded widely and with acclamation the results of that visit. At the time the relief and rejoicing over what had been done were well-nigh universal. The danger was too imminent and too appalling for me to be willing to condemn those who were successful in saving them from it. But I fully understood and expected that when there was no longer danger, when the fear had been forgotten, attack would be made upon me; and as a matter of fact after a year had elapsed the attack was begun, and has continued at intervals ever since; my ordinary assailant being some politician of rather cheap type.
If I were on a sail-boat, I should not ordinarily meddle with any of the gear; but if a sudden squall struck us, and the main sheet jammed, so that the boat threatened to capsize, I would unhesitatingly cut the main sheet, even though I were sure that the owner, no matter how grateful to me at the moment for having saved his life, would a few weeks later, when he had forgotten his danger and his fear, decide to sue me for the value of the cut rope. But I would feel a hearty contempt for the owner who so acted.
There were many other things that we did in connection with corporations. One of the most important was the passage of the meat inspection law because of scandalous abuses shown to exist in the great packing-houses in Chicago and elsewhere. There was a curious result of this law, similar to what occurred in connection with the law providing for effective railway regulation. The big beef men bitterly opposed the law; just as the big railway men opposed the Hepburn Act. Yet three or four years after these laws had been put on the statute books every honest man both in the beef business and the railway business came to the conclusion that they worked good and not harm to the decent business concerns. They hurt only those who were not acting as they should have acted. The law providing for the inspection of packing-houses, and the Pure Food and Drugs Act, were also extremely important; and the way in which they were administered was even more important. It would be hard to overstate the value of the service rendered in all these cases by such cabinet officers as Moody and Bonaparte, and their outside assistants of the stamp of Frank Kellogg.
It would be useless to enumerate all the suits we brought. Some of them I have already touched upon. Others, such as the suits against the Harriman railway corporations, which were successful, and which had been rendered absolutely necessary by the grossly improper action of the corporations concerned, offered no special points of interest. The Sugar Trust proceedings, however, may be mentioned as showing just the kind of thing that was done and the kind of obstacle encountered and overcome in prosecutions of this character.
It was on the advice of my secretary, William Loeb, Jr., afterward head of the New York Custom-House, that the action was taken which started the uncovering of the frauds perpetrated by the Sugar Trust and other companies in connection with the importing of sugar. Loeb had from time to time told me that he was sure that there was fraud in connection with the importations by the Sugar Trust through the New York Custom-House. Finally, some time toward the end of 1904, he informed me that Richard Parr, a sampler at the New York Appraisers’ Stores (whose duties took him almost continually on the docks in connection with the sampling of merchandise), had called on him, and had stated that in his belief the sugar companies were defrauding the Government in the matter of weights, and had stated that if he could be made an investigating officer of the Treasury Department, he was confident that he could show there was wrongdoing. Parr had been a former school fellow of Loeb in Albany, and Loeb believed him to be loyal, honest, and efficient. He thereupon laid the matter before me, and advised the appointment of Parr as a special employee of the Treasury Department, for the specific purpose of investigating the alleged sugar frauds. I instructed the Treasury Department accordingly, and was informed that there was no vacancy in the force of special employees, but that Parr would be given the first place that opened up. Early in the spring of 1905 Parr came to Loeb again, and said that he had received additional information about the sugar frauds, and was anxious to begin the investigation. Loeb again discussed the matter with me; and I notified the Treasury Department to appoint Parr immediately. On June 1, 1905, he received his appointment, and was assigned to the port of Boston for the purpose of gaining some experience as an investigating officer. During the month he was transferred to the Maine District, with headquarters at Portland, where he remained until March, 1907. During his service in Maine he uncovered extensive wool smuggling frauds. At the conclusion of the wool case, he appealed to Loeb to have him transferred to New York, so that he might undertake the investigation of the sugar underweighing frauds. I now called the attention of Secretary Cortelyou personally to the matter, so that he would be able to keep a check over any subordinates who might try to interfere with Parr, for the conspiracy was evidently widespread, the wealth of the offenders great, and the corruption in the service far-reaching–while moreover as always happens with “respectable” offenders, there were many good men who sincerely disbelieved in the possibility of corruption on the part of men of such high financial standing. Parr was assigned to New York early in March, 1907, and at once began an active investigation of the conditions existing on the sugar docks. This terminated in the discovery of a steel spring in one of the scales of the Havemeyer & Elder docks in Brooklyn, November 20, 1907, which enabled us to uncover what were probably the most colossal frauds ever perpetrated in the Customs Service. From the beginning of his active work in the investigation of the sugar frauds in March, 1907, to March 4, 1909, Parr, from time to time, personally reported to Loeb, at the White House, the progress of his investigations, and Loeb in his turn kept me personally advised. On one occasion there was an attempt made to shunt Parr off the investigation and substitute another agent of the Treasury, who was suspected of having some relations with the sugar companies under investigation; but Parr reported the facts to Loeb, I sent for Secretary Cortelyou, and Secretary Cortelyou promptly took charge of the matter himself, putting Parr back on the investigation.
During the investigation Parr was subjected to all sorts of harassments, including an attempt to bribe him by Spitzer, the dock superintendent of the Havemeyer & Elder Refinery, for which Spitzer was convicted and served a term in prison. Brzezinski, a special agent, who was assisting Parr, was convicted of perjury and also served a term in prison, he having changed his testimony, in the trial of Spitzer for the attempted bribery of Parr, from that which he gave before the Grand Jury. For his extraordinary services in connection with this investigation Parr was granted an award of $100,000 by the Treasury Department.
District-Attorney Stimson, of New York, assisted by Denison, Frankfurter, Wise, and other employees of the Department of Justice, took charge of the case, and carried on both civil and criminal proceedings. The trial in the action against the Sugar Trust, for the recovery of duties on the cargo of sugar, which was being sent over the scales at the time of the discovery of the steel spring by Parr, was begun in 1908; judgment was rendered against the defendants on March 5, 1909, the day after I left office. Over four million dollars were recovered and paid back into the United States Treasury by the sugar companies which had perpetrated the various forms of fraud. These frauds were unearthed by Parr, Loeb, Stimson, Frankfurter, and the other men mentioned and their associates, and it was to them that the people owed the refunding of the huge sum of money mentioned. We had already secured heavy fines from the Sugar Trust, and from various big railways, and private individuals, such as Edwin Earle, for unlawful rebates. In the case of the chief offender, the American Sugar Refining Company (the Sugar Trust), criminal prosecutions were carried on against every living man whose position was such that he would naturally know about the fraud. All of them were indicted, and the biggest and most responsible ones were convicted. The evidence showed that the president of the company, Henry O. Havemeyer, virtually ran the entire company, and was responsible for all the details of the management. He died two weeks after the fraud was discovered, just as proceedings were being begun. Next to him in importance was the secretary and treasurer, Charles R. Heike, who was convicted. Various other officials and employees of the Trust, and various Government employees, were indicted, and most of them convicted. Ernest W. Gerbracht, the superintendent of one of the refineries, was convicted, but his sentence was commuted to a short jail imprisonment, because he became a Government witness and greatly assisted the Government in the suits.
Heike’s sentence was commuted so as to excuse him from going to the penitentiary; just as the penitentiary sentence of Morse, the big New York banker, who was convicted of gross fraud and misapplication of funds, was commuted. Both commutations were granted long after I left office. In each case the commutation was granted because, as was stated, of the prisoner’s age and state of health. In Morse’s case the President originally refused the request, saying that Morse had exhibited “fraudulent and criminal disregard of the trust imposed upon him,” that “he was entirely unscrupulous as to the methods he adopted,” and “that he seemed at times to be absolutely heartless with regard to the consequences to others, and he showed great shrewdness in obtaining large sums of money from the bank without adequate security and without making himself personally liable therefor.” The two cases may be considered in connection with the announcement in the public press that on May 17, 1913, the President commuted the sentence of Lewis A. Banks, who was serving a very long term penitentiary sentence for an attack on a girl in the Indian Territory; “the reason for the commutation which is set forth in the press being that ‘Banks is in poor health.’ “
It is no easy matter to balance the claims of justice and mercy in such cases. In these three cases, of all of which I had personal cognizance, I disagreed radically with the views my successors took, and with the views which many respectable men took who in these and similar cases, both while I was in office and afterward, urged me to show, or to ask others to show, clemency. It then seemed to me, and it now seems to me, that such clemency is from the larger standpoint a gross wrong to the men and women of the country.
One of the former special assistants of the district-attorney, Mr. W. Cleveland Runyon, in commenting bitterly on the release of Heike and Morse on account of their health, pointed out that their health apparently became good when once they themselves became free men, and added:
“The commutation of these sentences amounts to a direct interference with the administration of justice by the courts. Heike got a $25,000 salary and has escaped his imprisonment, but what about the six $18 a week checkers, who were sent to jail, one of them a man of more than sixty? It is cases like this that create discontent and anarchy. They make it seem plain that there is one law for the rich and another for the poor man, and I for one will protest.”
In dealing with Heike the individual (or Morse or any other individual), it is necessary to emphasize the social aspects of his case. The moral of the Heike case, as has been well said, is “how easy it is for a man in modern corporate organization to drift into wrongdoing.” The moral restraints are loosened in the case of a man like Heike by the insulation of himself from the sordid details of crime, through industrially coerced intervening agents. Professor Ross has made the penetrating observation that “distance disinfects dividends”; it also weakens individual responsibility, particularly on the part of the very managers of large business, who should feel it most acutely. One of the officers of the Department of Justice who conducted the suit, and who inclined to the side of mercy in the matter, nevertheless writes: “Heike is a beautiful illustration of mental and moral obscuration in the business life of an otherwise valuable member of society. Heike had an ample share in the guidance of the affairs of the American Sugar Company, and we are apt to have a foreshortened picture of his responsibility, because he operated from the easy coign of vantage of executive remoteness. It is difficult to say to what extent he did, directly or indirectly, profit by the sordid practices of his company. But the social damage of an individual in his position may be just as deep, whether merely the zest of the game or hard cash be his dominant motive.”
I have coupled the cases of the big banker and the Sugar Trust official and the case of the man convicted of a criminal assault on a woman. All of the criminals were released from penitentiary sentences on grounds of ill health. The offenses were typical of the worst crimes committed at the two ends of the social scale. One offense was a crime of brutal violence; the other offenses were crimes of astute corruption. All of them were offenses which in my judgment were of such a character that clemency towards the offender worked grave injustice to the community as a whole, injustice so grave that its effects might be far-reaching in their damage.
Every time that rape or criminal assault on a woman is pardoned, and anything less than the full penalty of the law exacted, a premium is put on the practice of lynching such offenders. Every time a big moneyed offender, who naturally excites interest and sympathy, and who has many friends, is excused from serving a sentence which a man of less prominence and fewer friends would have to serve, justice is discredited in the eyes of plain people–and to undermine faith in justice is to strike at the foundation of the Republic. As for ill health, it must be remembered that few people are as healthy in prison as they would be outside; and there should be no discrimination among criminals on this score; either all criminals who grow unhealthy should be let out, or none. Pardons must sometimes be given in order that the cause of justice may be served; but in cases such as these I am considering, while I know that many amiable people differ from me, I am obliged to say that in my judgment the pardons work far-reaching harm to the cause of justice.
Among the big corporations themselves, even where they did wrong, there was a wide difference in the moral obliquity indicated by the wrongdoer. There was a wide distinction between the offenses committed in the case of the Northern Securities Company, and the offenses because of which the Sugar Trust, the Tobacco Trust, and the Standard Oil Trust were successfully prosecuted under my Administration. It was vital to destroy the Northern Securities Company; but the men creating it had done so in open and above-board fashion, acting under what they, and most of the members of the bar, thought to be the law established by the Supreme Court in the Knight sugar case. But the Supreme Court in its decree dissolving the Standard Oil and Tobacco Trusts, condemned them in the severest language for moral turpitude; and an even severer need of condemnation should be visited on the Sugar Trust.
However, all the trusts and big corporations against which we proceeded–which included in their directorates practically all the biggest financiers in the country–joined in making the bitterest assaults on me and on my Administration. Of their actions I wrote as follows to Attorney-General Bonaparte, who had been a peculiarly close friend and adviser through the period covered by my public life in high office and who, together with Attorney-General Moody, possessed the same understanding sympathy with my social and industrial program that was possessed by such officials as Straus, Garfield, H. K. Smith, and Pinchot. The letter runs:
January 2, 1908.
My dear Bonaparte:
I must congratulate you on your admirable speech at Chicago. You said the very things it was good to say at this time. What you said bore especial weight because it represented what you had done. You have shown by what you have actually accomplished that the law is enforced against the wealthiest corporation, and the richest and most powerful manager or manipulator of that corporation, just as resolutely and fearlessly as against the humblest citizen. The Department of Justice is now in very fact the Department of Justice, and justice is meted out with an even hand to great and small, rich and poor, weak and strong. Those who have denounced you and the action of the Department of Justice are either misled, or else are the very wrongdoers, and the agents of the very wrongdoers, who have for so many years gone scot-free and flouted the laws with impunity. Above all, you are to be congratulated upon the bitterness felt and expressed towards you by the representatives and agents of the great law-defying corporations of immense wealth, who, until within the last half- dozen years, have treated themselves and have expected others to treat them as being beyond and above all possible check from law.
It was time to say something, for the representatives of predatory wealth, of wealth accumulated on a giant scale by iniquity, by wrongdoing in many forms, by plain swindling, by oppressing wage- workers, by manipulating securities, by unfair and unwholesome competition and by stock-jobbing,–in short, by conduct abhorrent to every man of ordinarily decent conscience, have during the last few months made it evident that they are banded together to work for a reaction, to endeavor to overthrow and discredit all who honestly administer the law, and to secure a return to the days when every unscrupulous wrongdoer could do what he wished unchecked, provided he had enough money. They attack you because they know your honesty and fearlessness, and dread them. The enormous sums of money these men have at their control enable them to carry on an effective campaign. They find their tools in a portion of the public press, including especially certain of the great New York newspapers. They find their agents in some men in public life,–now and then occupying, or having occupied, positions as high as Senator or Governor,–in some men in the pulpit, and most melancholy of all, in a few men on the bench. By gifts to colleges and universities they are occasionally able to subsidize in their own interest some head of an educational body, who, save only a judge, should of all men be most careful to keep his skirts clear from the taint of such corruption. There are ample material rewards for those who serve with fidelity the Mammon of unrighteousness, but they are dearly paid for by that institution of learning whose head, by example and precept, teaches the scholars who sit under him that there is one law for the rich and another for the poor. The amount of money the representatives of the great moneyed interests are willing to spend can be gauged by their recent publication broadcast throughout the papers of this country from the Atlantic to the Pacific of huge advertisements, attacking with envenomed bitterness the Administration’s policy of warring against successful dishonesty, advertisements that must have cost enormous sums of money. This advertisement, as also a pamphlet called “The Roosevelt Panic,” and one or two similar books and pamphlets, are written especially in the interest of the Standard Oil and Harriman combinations, but also defend all the individuals and corporations of great wealth that have been guilty of wrongdoing. From the railroad rate law to the pure food law, every measure for honesty in business that has been pressed during the last six years, has been opposed by these men, on its passage and in its administration, with every resource that bitter and unscrupulous craft could suggest, and the command of almost unlimited money secure. These men do not themselves speak or write; they hire others to do their bidding. Their spirit and purpose are made clear alike by the editorials of the papers owned in, or whose policy is dictated by, Wall Street, and by the speeches of public men who, as Senators, Governors, or Mayors, have served these their masters to the cost of the plain people. At one time one of their writers or speakers attacks the rate law as the cause of the panic; he is, whether in public life or not, usually a clever corporation lawyer, and he is not so foolish a being as to believe in the truth of what he says; he has too closely represented the railroads not to know well that the Hepburn Rate Bill has helped every honest railroad, and has hurt only the railroads that regarded themselves as above the law. At another time, one of them assails the Administration for not imprisoning people under the Sherman Anti-Trust Law; for declining to make what he well knows, in view of the actual attitude of juries (as shown in the Tobacco Trust cases and in San Francisco in one or two of the cases brought against corrupt business men) would have been the futile endeavor to imprison defendants whom we are actually able to fine. He raises the usual clamor, raised by all who object to the enforcement of the law, that we are fining corporations instead of putting the heads of the corporations in jail; and he states that this does not really harm the chief offenders. Were this statement true, he himself would not be found attacking us. The extraordinary violence of the assault upon our policy contained in speeches like these, in the articles in the subsidized press, in such huge advertisements and pamphlets as those above referred to, and the enormous sums of money spent in these various ways, give a fairly accurate measure of the anger and terror which our actions have caused the corrupt men of vast wealth to feel in the very marrow of their being.
The man thus attacking us is usually, like so many of his fellows, either a great lawyer, or a paid editor who takes his commands from the financiers and his arguments from their attorneys. If the former, he has defended many malefactors, and he knows well that, thanks to the advice of lawyers like himself, a certain kind of modern corporation has been turned into an admirable instrument by which to render it well nigh impossible to get at the really guilty man, so that in most cases the only way of punishing the wrong is by fining the corporation or by proceeding personally against some of the minor agents. These lawyers and their employers are the men mainly responsible for this state of things, and their responsibility is shared with the legislators who ingeniously oppose the passing of just and effective laws, and with those judges whose one aim seems to be to construe such laws so that they cannot be executed. Nothing is sillier than this outcry on behalf of the “innocent stockholders” in the corporations. We are besought to pity the Standard Oil Company for a fine relatively far less great than the fines every day inflicted in the police courts upon multitudes of push cart peddlers and other petty offenders, whose woes never extort one word from the men whose withers are wrung by the woes of the mighty. The stockholders have the control of the corporation in their own hands. The corporation officials are elected by those holding the majority of the stock and can keep office only by having behind them the good-will of these majority stockholders. They are not entitled to the slightest pity if they deliberately choose to resign into the hands of great wrongdoers the control of the corporations in which they own the stock. Of course innocent people have become involved in these big corporations and suffer because of the misdeeds of their criminal associates. Let these innocent people be careful not to invest in corporations where those in control are not men of probity, men who respect the laws; above all let them avoid the men who make it their one effort to evade or defy the laws. But if these honest innocent people are in the majority in any corporation they can immediately resume control and throw out of the directory the men who misrepresent them. Does any man for a moment suppose that the majority stockholders of the Standard Oil are others than Mr. Rockefeller and his associates themselves and the beneficiaries of their wrongdoing? When the stock is watered so that the innocent investors suffer, a grave wrong is indeed done to these innocent investors as well as to the public; but the public men, lawyers and editors, to whom I refer, do not under these circumstances express sympathy for the innocent; on the contrary they are the first to protest with frantic vehemence against our efforts by law to put a stop to over-capitalization and stock-watering. The apologists of successful dishonesty always declaim against any effort to punish or prevent it on the ground that such effort will “unsettle business.” It is they who by their acts have unsettled business; and the very men raising this cry spend hundreds of thousands of dollars in securing, by speech, editorial, book or pamphlet, the defense by misstatement of what they have done; and yet when we correct their misstatements by telling the truth, they declaim against us for breaking silence, lest “values be unsettled!” They have hurt honest business men, honest working men, honest farmers; and now they clamor against the truth being told.
The keynote of all these attacks upon the effort to secure honesty in business and in politics, is expressed in a recent speech, in which the speaker stated that prosperity had been checked by the effort for the “moral regeneration of the business world,” an effort which he denounced as “unnatural, unwarranted, and injurious” and for which he stated the panic was the penalty. The morality of such a plea is precisely as great as if made on behalf of the men caught in a gambling establishment when that gambling establishment is raided by the police. If such words mean anything they mean that those whose sentiments they represent stand against the effort to bring about a moral regeneration of business which will prevent a repetition of the insurance, banking, and street railroad scandals in New York; a repetition of the Chicago and Alton deal; a repetition of the combination between certain professional politicians, certain professional labor leaders and certain big financiers from the disgrace of which San Francisco has just been rescued; a repetition of the successful efforts by the Standard Oil people to crush out every competitor, to overawe the common carriers, and to establish a monopoly which treats the public with the contempt which the public deserves so long as it permits men like the public men of whom I speak to represent it in politics, men like the heads of colleges to whom I refer to educate its youth. The outcry against stopping dishonest practices among the very wealthy is precisely similar to the outcry raised against every effort for cleanliness and decency in city government because, forsooth, it will “hurt business.” The same outcry is made against the Department of Justice for prosecuting the heads of colossal corporations that is made against the men who in San Francisco are prosecuting with impartial severity the wrongdoers among business men, public officials, and labor leaders alike. The principle is the same in the two cases. Just as the blackmailer and the bribe giver stand on the same evil eminence of infamy, so the man who makes an enormous fortune by corrupting Legislatures and municipalities and fleecing his stockholders and the public stands on a level with the creature who fattens on the blood money of the gambling house, the saloon and the brothel. Moreover, both kinds of corruption in the last analysis are far more intimately connected than would at first sight appear; the wrong-doing is at bottom the same. Corrupt business and corrupt politics act and react, with ever increasing debasement, one on the other; the rebate-taker, the franchise-trafficker, the manipulator of securities, the purveyor and protector of vice, the black-mailing ward boss, the ballot box stuffer, the demagogue, the mob leader, the hired bully and mankiller, all alike work at the same web of corruption, and all alike should be abhorred by honest men.
The “business” which is hurt by the movement for honesty is the kind of business which, in the long run, it pays the country to have hurt. It is the kind of business which has tended to make the very name “high finance” a term of scandal to which all honest American men of business should join in putting an end. One of the special pleaders for business dishonesty, in a recent speech, in denouncing the Administration for enforcing the law against the huge and corrupt corporations which have defied the law, also denounced it for endeavoring to secure a far-reaching law making employers liable for injuries to their employees. It is meet and fit that the apologists for corrupt wealth should oppose every effort to relieve weak and helpless people from crushing misfortune brought upon them by injury in the business from which they gain a bare livelihood and their employers fortunes. It is hypocritical baseness to speak of a girl who works in a factory where the dangerous machinery is unprotected as having the “right” freely to contract to expose herself to dangers to life and limb. She has no alternative but to suffer want or else to expose herself to such dangers, and when she loses a hand or is otherwise maimed or disfigured for life it is a moral wrong that the burden of the risk necessarily incidental to the business should be placed with crushing weight upon her weak shoulders and the man who has profited by her work escape scot-free. This is what our opponents advocate, and it is proper that they should advocate it, for it rounds out their advocacy of those most dangerous members of the criminal class, the criminals of vast wealth, the men who can afford best to pay for such championship in the press and on the stump.
It is difficult to speak about the judges, for it behooves us all to treat with the utmost respect the high office of judge; and our judges as a whole are brave and upright men. But there is need that those who go wrong should not be allowed to feel that there is no condemnation of their wrongdoing. A judge who on the bench either truckles to the mob or bows down before a corporation; or who, having left the bench to become a corporation lawyer, seeks to aid his clients by denouncing as enemies of property all those who seek to stop the abuses of the criminal rich; such a man performs an even worse service to the body politic than the Legislator or Executive who goes wrong. In no way can respect for the courts be so quickly undermined as by teaching the public through the action of a judge himself that there is reason for the loss of such respect. The judge who by word or deed makes it plain that the corrupt corporation, the law-defying corporation, the law-defying rich man, has in him a sure and trustworthy ally, the judge who by misuse of the process of injunction makes it plain that in him the wage-worker has a determined and unscrupulous enemy, the judge who when he decides in an employers’ liability or a tenement house factory case shows that he has neither sympathy for nor understanding of those fellow-citizens of his who most need his sympathy and understanding; these judges work as much evil as if they pandered to the mob, as if they shrank from sternly repressing violence and disorder. The judge who does his full duty well stands higher, and renders a better service to the people, than any other public servant; he is entitled to greater respect; and if he is a true servant of the people, if he is upright, wise and fearless, he will unhesitatingly disregard even the wishes of the people if they conflict with the eternal principles of right as against wrong. He must serve the people; but he must serve his conscience first. All honor to such a judge; and all honor cannot be rendered him if it is rendered equally to his brethren who fall immeasurably below the high ideals for which he stands. There should be a sharp discrimination against such judges. They claim immunity from criticism, and the claim is heatedly advanced by men and newspapers like those of whom I speak. Most certainly they can claim immunity from untruthful criticism; and their champions, the newspapers and the public men I have mentioned, exquisitely illustrate by their own actions mendacious criticism in its most flagrant and iniquitous form.
But no servant of the people has a right to expect to be free from just and honest criticism. It is the newspapers, and the public men whose thoughts and deeds show them to be most alien to honesty and truth who themselves loudly object to truthful and honest criticism of their fellow-servants of the great moneyed interests.
We have no quarrel with the individuals, whether public men, lawyers or editors, to whom I refer. These men derive their sole power from the great, sinister offenders who stand behind them. They are but puppets who move as the strings are pulled by those who control the enormous masses of corporate wealth which if itself left uncontrolled threatens dire evil to the Republic. It is not the puppets, but the strong, cunning men and the mighty forces working for evil behind, and to a certain extent through, the puppets, with whom we have to deal. We seek to control law- defying wealth, in the first place to prevent its doing evil, and in the next place to avoid the vindictive and dreadful radicalism which if left uncontrolled it is certain in the end to arouse. Sweeping attacks upon all property, upon all men of means, without regard to whether they do well or ill, would sound the death knell of the Republic; and such attacks become inevitable if decent citizens permit rich men whose lives are corrupt and evil to domineer in swollen pride, unchecked and unhindered, over the destinies of this country. We act in no vindictive spirit, and we are no respecters of persons. If a labor union does what is wrong, we oppose it as fearlessly as we oppose a corporation that does wrong; and we stand with equal stoutness for the rights of the man of wealth and for the rights of the wage-workers; just as much so for one as for the other. We seek to stop wrongdoing; and we desire to punish the wrongdoer only so far as is necessary in order to achieve this end. We are the stanch upholders of every honest man, whether business man or wage-worker.
I do not for a moment believe that our actions have brought on business distress; so far as this is due to local and not world- wide causes, and to the actions of any particular individuals, it is due to the speculative folly and flagrant dishonesty of a few men of great wealth, who now seek to shield themselves from the effects of their own wrongdoings by ascribing its results to the actions of those who have sought to put a stop to the wrongdoing. But if it were true that to cut out rottenness from the body politic meant a momentary check to an unhealthy seeming prosperity, I should not for one moment hesitate to put the knife to the cancer. On behalf of all our people, on behalf no less of the honest man of means than of the honest man who earns each day’s livelihood by that day’s sweat of his brow, it is necessary to insist upon honesty in business and politics alike, in all walks of life, in big things and in little things; upon just and fair dealing as between man and man. We are striving for the right in the spirit of Abraham Lincoln when he said:
“Fondly do we hope–fervently do we pray–that this mighty scourge may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondsmen’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said, ‘The judgments of the Lord are true and righteous altogether.’
“With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to