taught a lesson in wise kindliness and charity; an indispensable lesson to us of to-day, for if we approach the work of reform in a spirit of vindictiveness—in a spirit of reckless disregard for the rights of others, or of hatred for men because they are better off than ourselves—we are sure in the end to do not good but damage to all mankind, and especially to those whose especial champions we profess ourselves to be. Violent excess is sure to provoke violent reaction; and the worst possible policy for our country would be one of violent oscillation between reckless upsetting of property rights, and unscrupulous greed manifested under pretense of protecting those rights. The agitator who preaches hatred and practices slander and untruthfulness, and the visionary who promises perfection and accomplishes only destruction, are the worst enemies of reform; and the man of great wealth who accumulates and uses his wealth without regard to ethical standards, who profits by and breeds corruption, and robs and swindles others, is the very worst enemy of property, the very worst enemy of conservatism, the very worst enemy of those "business interests" that only too often regard him with mean admiration and heatedly endeavor to shield him from the consequences of his iniquity.

Now, the object we seek to achieve is twofold. A great democratic commonwealth should seek to produce and reward that individual distinction which results in the efficient performance of needed work, for such performance is of high value to the whole community. But hand in hand with this purpose must go the purpose which Abraham Lincoln designated as the "amelioration of mankind." Only by an intelligent effort to realize this joint process of individual and social betterment can we keep our democracy sound. We all admit this to be true politically; but we have not paid much heed to the question from its economic side. The wageearner primarily needs what it is pre-eminently to the interest of our democratic commonwealth that he should obtain that is, a high standard of living, and the oppor tunity to acquire the means whereby to secure it. Every power of the Nation should be used in helping him to this end; taking care, however, that the help shall

be given in such fashion as to represent real help, and not harm; for the worst injury that could be done him or any other man would be to teach him to rely primarily on "the State" instead of on himself. The collective power of the State can help; but it is the individual's own power of self-help which is most important.

Now, I am well aware that demagogues and doctrinaire reformers of a certain type may try to turn such use of the powers of the State into an abuse. We should set our faces like flint against any such abuse. We should make it fully understood by the workingmen-by the men of small means—that we will do everything in our power for them except what is wrong; but that we will do wrong for no manneither for them nor for any one else. Nevertheless, the fact that there are dangers in following a given course merely means that we should follow it with a cautious realization of these dangers, and not that we should abandon it, if on the whole it is the right course.

It is just so with personal liberty. The unlimited freedom which the individual property-owner has enjoyed has been of use to this country in many ways, and we can continue our prosperous economic career only by retaining an economic organization which will offer to the men of the stamp of the great captains of industry the opportunity and inducement to earn distinction. Nevertheless, we as Americans must now face the fact that this great freedom which the individual property-owner has enjoyed in the past has produced évils which were inevitable from its unrestrained exercise. It is this very freedom-this absence of State and National restraint-that has tended to create a small class of enormously wealthy and economically powerful men whose chief object is to hold and increase their power. Any feeling of special hatred toward these men is as absurd as any feeling of special regard. Some of them have gained their power by cheating and swindling, just as some very small business men cheat and swindle; but, as a whole, big men are no better and no worse than their small competitors, from a moral standpoint. Where they do wrong it is even more important to pun

ish them than to punish a small man who does wrong, because their position makes it especially wicked for them to yield to temptation; but the prime need is to change the conditions which enable them to accumulate a power which it is not for the general welfare that they should hold or exercise, and to make this change not only without vindictiveness, without doing injustice to individuals, but also in a cautious and temperate spirit, testing our theories by actual practice, so that our legislation may represent the minimum of restrictions upon the individual initiative of the exceptional man which is compati ble with obtaining the maximum of welfare for the average man. We grudge no man a fortune which represents merely his own power and sagacity exercised with entire regard to the welfare of his fellows. But the fortune must not only be honorably obtained and well used; it is also essential that it should not represent a necessary incident of widespread, even though partial, economic privation. It is not even enough that the fortune should have been gained without doing damage to the community. We should only permit it to be gained and kept so long as the gaining and the keeping represent benefit to the community. This I know implies a policy of a far more active governmental interference with social and economic conditions than we have hitherto seen in this country; but I think we have to face the fact that such increase in governmental activity is now necessary. We should work cautiously and patiently and with complete absence of animosity, except toward the individuals whom we are certain have been guilty of flagrant evil; but we should also work firmly to realize the democratic purpose, economically and socially as well as politically. We must make popular government responsible for the betterment both of the individual and of society at large.

Let me repeat once more that, while such responsible governmental action is an absolutely necessary thing to achieve our purpose, yet it will be worse than useless if it is not accompanied by a serious effort on the part of the individuals composing the community thus to achieve each for himself a higher standard of individual betterment, not merely material but

spiritual and intellectual. In other words, our democracy depends on individual improvement just as much as upon collective effort to achieve our common social improvement. The most serious troubles of the present day are unquestionably due in large part to lack of efficient governmental action, and cannot be remedied without such action; but neither can any remedy permanently avail unless back of it stands a high general character of individual citizenship.

But

This governmental improvement can be accomplished partly by the States, in so far as any given evil affects only one State, or one or two States; in so far as a merely local remedy is needed for a merely local disease. But the betterment must be accomplished partly, and I believe mainly, through the National Government. I do not ask for over-centralization; but I do ask that we work in a spirit of broad and far-reaching nationalism when we deal with what concerns our people as a whole. I no more make a fetish of centralization than of decentralization. Any given case must be treated on its special merits. Each community should be required to deal with all that is of merely local interest; and nothing should be undertaken by the Government of the whole country which can thus wisely be left to local management. those functions of government which no wisdom on the part of the States will enable them satisfactorily to perform must be performed by the National Government. We are all Americans; our common interests are as broad as the continent; the most vital problems are those that affect us all alike. The regulation of big business, and therefore the control of big property in the public interest, are preeminently instances of such functions which can only be performed efficiently and wisely by the Nation; and, moreover, so far as labor is employed in connection with inter-State business, it should also be treated as a matter for the National Government. The National power over inter-State commerce warrants our dealing with such questions as employers' liability in inter-State business, and the protection and compensation for injuries of railway employees. The National Government of right has, and must exercise,

its power for the protection of labor which is connected with the instrumentalities of inter-State commerce.

The National Government belongs to the whole American people; and where the whole American people are interested that interest can be effectively guarded only by the National Government. We ought to use the National Government as an agency, a tool, wherever it is necessary, in order that we may organize our entire political, economical, and social life in accordance with a far-reaching democratic purpose. We should make the National governmental machinery an adequate and constructive instrument for constructive work in the realization of a National democratic ideal. I lay emphasis upon the word constructive. Too often the Federal Government, and above all the Federal judiciary, has permitted itself to be employed for purely negative purposes—that is, to thwart the action of the States while not permitting efficient National action in its place. From the National standpoint nothing can be worse-nothing can be full of graver menace-for the National life than to have the Federal courts active in nullifying State action to remedy the evils arising from the abuse of great wealth, unless the Federal authorities, executive, legislative, and judicial alike, do their full duty in effectually meeting the need of a thoroughgoing and radical supervision and control of big inter-State business in all its forms. Many great financiers, and many of the great corporation lawyers who advise them, still oppose any effective regulation of big business by the National Government, because, for the time being, it serves their interest to trust to the chaos which is caused on the one hand by inefficient laws and conflicting and often unwise efforts at regulation by State governments, and, on the other hand, by the efficient protection against such regulation afforded by the Federal courts. In the end this condition will prove intolerable, and will hurt most of all the very class which it at present benefits.

The continuation of such conditions would mean that the corporations would find that they had purchased immunity from the efficient exercise of Federal regulative power at the cost of being submitted to a violent and radical

local supervision, inflamed to fury by having repeatedly been thwarted, and not chastened by exercised responsibility. To refuse to take, or to permit others to take, wise and practical action for the remedying of abuses is to invite unwise action under the lead of violent extremists.

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

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

Corporations are necessary to the effective use of the forces of production and commerce under modern conditions. We cannot effectively prohibit all combinations without doing far-reaching economic harm; and it is mere folly to do as we have done in the past-to try to combine incompatible systems—that is, to try both to prohibit and regulate combinations. Combinations in industry are the result of an imperative economic law which cannot be repealed by political legislation. The effort at prohibiting all combination has substantially failed. The only course left is active corporate regulation—that is, the

control of corporations for the common good-the suppression of the evils that they work, and the retention, as far as may be, of that business efficiency in their use which has placed us in the forefront of industrial peoples. I need waste no words upon our right so to control them. The corporation is the creature of government, and the people have the right to handle it as they desire; all they need pay attention to is the expediency of realizing this right in some way that shall be productive of good and not harm. The corporate manager who achieves success by honest efficiency in giving the best service to the public should be favored because we all benefit by his efficiency. He realizes Abraham Lincoln's definition which I have quoted above, because he works for his own material betterment and at the same time for the "amelioration of mankind," and he should be helped by the Government because his success is good for the National welfare. But a man who grasps and holds business power by breaking the industrial efficiency of others, who wins success by methods which are against the public interest and degrading to the public morals, should not be permitted to exercise such power. Instead of punishing him by a long and doubtful process of the law after the wrong has been committed, there should be such effective Government regulation as to check the evil tendencies at the moment that they start to develop. Overcapitalization in all its shapes is one of the prime evils; for it is one of the most fruitful methods by which unscrupulous men get improper profits, and when the holdings come into innocent hands we are forced into the uncomfortable position of being obliged to reduce the dividends of innocent investors, or of permitting the public and the wage-workers, either or both, to suffer. Such really

effective control over great inter-State business can come only from the National Government. The American people demands the new Nationalism needful to deal with the new problems; it puts the National need above sectional or personal advantage; it is impatient of the utter confusion which results from local legislatures attempting to treat National issues as local issues; it is still more impatient of the National impotence which springs from the

over-division of governmental powers; the impotence which makes it possible for local selfishness, or for the vulpine legal cunning which is hired by wealthy special interests, to bring National activities to a deadlock.

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

In the Inter-State Commerce Commission and in the Federal Bureau of Corporations we have bodies which, if their powers are sufficiently enlarged after the right fashion, can render great and substantial service. The average American citizen should have presented to him in a simple and easily comprehended form the truth about the business affairs that affect his daily life as consumer, employee, employer, as investor, as voter. The issue of securities should be subject to rigorous Government supervision. There are concrete instances of unfair competition that can be reached under the Federal criminal legislation, and they should be attacked and destroyed in the courts. But the laws should be such that normally, and save in extraordinary circumstances, there should be no need of recourse to the courts. What is needed is administrative supervision and control. This should be so exercised that the highways of commerce and opportunity should be open to all; and not nominally open, but really open, a consistent effort being made to deprive every man of any advantage that is not due to his own superiority and efficiency, controlled by moral purpose. The National Bureau of Corporations has not been given the powers or the funds

to develop its full usefulness, and yet it offers one of the prime means at the disposal of the people of keeping them fully acquainted with all the facts about corporation control. We have a right to expect from this Bureau and from the InterState Commerce Commission a very high grade of public service. We should be as sure of the proper conduct of inter-State railways and the proper management of inter-State business as we are now sure of the conduct and management of the National banks, and we should have as effective supervision in one case as in the other.

Not only as a matter of justice and honesty, but as a matter of prime popular interest, we should see that this control is so exercised as to favor a proper return to the upright business manager and honest investor. In the matter of railway rates, for instance, it is just as much our duty to see that they are not too low as that they are not too high. We must preserve the right of the railway employee to proper wages and the right of the investor to proper interest as scrupulously as we preserve the right of the shipper and the producer and the consumer. We cannot afford to do injustice, or suffer it to be done, to any of these. But in order to do justice we must have full knowledge. We must have the right to find out every fact connected with the business of the railway, so as to base our judgment, not on any one fact, but on all taken together. Inasmuch as it is so often impossible to punish wrongs done in the past, and to prevent the consequences of the wrongs thus committed being felt by one innocent class, without shifting the burden to the shoulders of another innocent class, we ought to provide that hereafter business shall be carried on from its inception in such a way as to prevent swindling. Incidentally, this will also tend to prevent that excessive profit by one man, which may not be swindling, under exist ing laws, but which nevertheless is against the interest of the commonwealth. To know all the facts is of as much interest to the investor and the wage-worker as to the shipper, the producer, the consumer. Full knowledge of the past helps us in dealing with the future. If we find that 1h rates are due to overcapitalization

in the past, or to any kind of sharp practice in the past, then, whether or not it is possible to take action which will partly remedy the wrong, we are certainly in a better position to prevent a repetition of the wrong.

For this reason

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

I have tried to set before you my creed. I believe in property rights, but I believe in them as adjuncts to, and not as substitutes for, human rights. I believe that normally the rights of property coincide with the rights of man: but where they do not, then the rights of man must be put above the rights of property. I be lieve in shaping the ends of government to protect property; but wherever the alternative must be faced, I am for man and not for property. I am far from underestimating the importance of dividends, but I rank dividends below human character. I know well that if there is not sufficient prosperity the people will in the end rebel against any system, no mat