 | Addresses and presidential messages of Theodore Roosevelt, 1902-1904 |  |
XVIII
AT MILWAUKEE, WISCONSIN, APRIL 3, 1903
Mr. Toastmaster, gentlemen:
To-day I wish to speak to you on the question of the
control and regulation of those great corporations which
are popularly, although rather vaguely, known as trusts;
dealing mostly with what has actually been accomplished
in the way of legislation and in the way of enforcement
of legislation during the past eighteen months, the period
covering the two sessions of the Fifty-seventh Congress.
At the outset I shall ask you to remember that I do not
approach the subject either from the standpoint of those
who speak of themselves as anti-trust or anti-corporation
people, nor yet from the standpoint of those who are
fond of denying the existence of evils in the trusts, or
who apparently proceed upon the assumption that if a
corporation is large enough it can do no wrong.
I think I speak for the great majority of the American
people when I say that we are not in the least against
wealth as such, whether individual or corporate; that we
merely desire to see any abuse of corporate or combined
wealth corrected and remedied; that we do not desire the
abolition or destruction of big corporations, but, on the
contrary, recognize them as being in many cases efficient
economic instruments, the results of an inevitable process
of economic evolution, and only desire to see them regulated
and controlled so far as may be necessary to subserve
the public good. We should be false to the historic
principles of our Government if we discriminated, either
128
man because of either his wealth or his poverty. There
is no proper place in our society either for the rich man
who uses the power conferred by his riches to enable him
to oppress and wrong his neighbors, nor yet for the
demagogic agitator who, instead of attacking abuses as
all abuses should be attacked wherever found, attacks
property, attacks prosperity, attacks men of wealth, as
such, whether they be good or bad, attacks corporations
whether they do well or ill, and seeks, in a spirit of ignorant
rancor, to overthrow the very foundations upon
which rest our national well-being.
In consequence of the extraordinary industrial changes
of the last half-century, and notably of the last two or
three decades, changes due mainly to the rapidity and
complexity of our industrial growth, we are confronted
with problems which in their present shape were unknown
to our forefathers. Our great prosperity, with its accompanying
concentration of population and of wealth, its
extreme specialization of faculties, and its development of
giant industrial leaders, has brought much good and some
evil, and it is as foolish to ignore the good as wilfully to
blind ourselves to the evil.
The evil has been partly the inevitable accompaniment
of the social changes, and where this is the case it can be
cured neither by law nor by the administration of the law,
the only remedy lying in the slow change of character
and of economic environment. But for a portion of the
evil, at least, we think that remedies can be found. We
know well the danger of false remedies, and we are
against all violent, radical, and unwise change. But we
believe that by proceeding slowly, yet resolutely, with
good sense and moderation, and also with a firm determination
not to be swerved from our course either by
foolish clamor or by any base or sinister influence, we
can accomplish much for the betterment of conditions.
Nearly two years ago, speaking at the State Fair in
Minnesota, I said:
It is probably true that the large majority of the fortunes
that now exist in this country have been amassed, not by
injuring our people, but as an incident to the conferring of
great benefits upon the community, and this, no matter what
may have been the conscious purpose of those amassing them.
There is but the scantiest justification for most of the outcry
against the men of wealth as such; and it ought to be unnecessary
to state that any appeal which directly or indirectly leads
to suspicion and hatred among ourselves, which tends to limit
opportunity, and therefore to shut the door of success against
poor men of talent, and, finally, which entails the possibility
of lawlessness and violence, is an attack upon the fundamental
properties of American citizenship. Our interests are at bottom
common; in the long run we go up or go down together.
Yet more and more it is evident that the State, and if necessary
the Nation, has got to possess the right of supervision and
control as regards the great corporations which are its creatures;
particularly as regards the great business combinations
which derive a portion of their importance from the existence
of some monopolistic tendency. The right should be exercised
with caution and self-restraint; but it should exist, so that it
may be invoked if the need arises.
Last fall, in speaking at Cincinnati, I said:
The necessary supervision and control, in which I firmly
believe as the only method of eliminating the real evils of the
trusts, must come through wisely and cautiously framed legislation,
which shall aim in the first place to give definite control
to some sovereign over the great corporations, and which shall
be followed, when once this power has been conferred, by a
system giving to the Government the full knowledge which is
the essential for satisfactory action. Then, when this knowledge—one
of the essential features of which is proper publicity
—has been gained, what further steps of any kind are necessary
of power to deal with the subject, and of a thorough knowledge
of what should and can be done in the matter. We need
additional power, and we need knowledge, . . . Such
legislation—whether obtainable now or obtainable only after
a constitutional amendment—should provide for a reasonable
supervision, the most prominent feature of which at first
should be publicity—that is, the making public, both to the
Government authorities and to the people at large, the essential
facts in which the public is concerned. This would give
us exact knowledge of many points which are now not only in
doubt but the subject of fierce controversy. Moreover, the
mere fact of the publication would cure some very grave evils,
for the light of day is a deterrent to wrong-doing. It would
doubtless disclose other evils with which, for the time being,
we could devise no way to grapple. Finally, it would disclose
others which could be grappled with and cured by further
legislative action.
In my message to Congress for 1901 I said:
In the interest of the whole people the Nation should, without
interfering with the power of the States in the matter,
itself also assume power of supervision and regulation over all
corporations doing an interstate business.
The views thus expressed have now received effect by
the wise, conservative, and yet far-reaching legislation
enacted by Congress at its last session. In its wisdom
Congress enacted the very important law providing a
Department of Commerce and Labor, and further providing
therein under the Secretary of Commerce and
Labor for a Commissioner of Corporations, charged with
the duty of supervision of, and of making intelligent
investigation into, the organization and conduct of corporations
engaged in interstate commerce. His powers
to expose illegal or hurtful practices and to obtain all
information needful for the purposes of further intelligent
and proper for public purposes is satisfactorily guaranteed.
The law was passed at the very end of the session
of Congress. Owing to the lateness of its passage
Congress was not able to provide proper equipment for
the new Department; and the first few months must
necessarily be spent in the work of organization, and the
first investigations must necessarily be of a tentative
character. The satisfactory development of such a system
requires time and great labor. Those who are intrusted
with the administration of the new law will assuredly administer
it in a spirit of absolute fairness and justice and
of entire fearlessness, with the firm purpose not to hurt
any corporation doing a legitimate business—on the contrary,
to help it—and, on the other hand, not to spare
any corporation which may be guilty of illegal practices,
or the methods of which may make it a menace to the
public welfare. Some substantial good will be done in
the immediate future; and as the Department gets fairly
to work under the law an ever larger vista for good work
will be opened along the lines indicated. The enactment
of this law is one of the most significant contributions
which have been made in our time toward the proper
solution of the problem of the relations to the people of
the great corporations an-d corporate combinations.
But much though this is, it is only a part of what has
been done in the effort to ascertain and correct improper
trust or monopolistic practices. Some eighteen months
ago the Industrial Commission, an able and non-partisan
body, reported to Congress the result of their investigation
of trusts and industrial combinations. One of the
most important of their conclusions was that discriminations
in freight rates and facilities were granted favored
shippers by the railroads and that these discriminations
clearly tended toward the control of production and
prices in many fields of business by large combinations.
That this conclusion was justifiable was shown by the
disclosures in the investigation of railroad methods pursued
in the fall and winter of 1901–1902. It was then
shown that certain trunk lines had entered into unlawful
agreements as to the transportation of food products
from the West to the Atlantic seaboard, giving a few
favored shippers rates much below the tariff charges imposed
upon the smaller dealers and the general public.
These unjust practices had prevailed to such an extent
and for so long a time that many of the smaller shippers
had been driven out of business, until practically one
buyer of grain on each railway system had been able by
his illegal advantages to secure a monopoly on the line
with which his secret compact was made; this monopoly
enabling him to fix the price to both producer and consumer.
Many of the great packing-house concerns were
shown to be in combination with each other and with
most of the great railway lines, whereby they enjoyed
large secret concessions in rates and thus obtained a practical
monopoly of the fresh- and cured-meat industry
of the country. These fusions, though violative of the
statute, had prevailed unchecked for so many years that
they had become intrenched in and interwoven with the
commercial life of certain large distributing localities;
although this was of course at the expense of the vast
body of law-abiding merchants, the general public, and
particularly of unfavored localities.
Under those circumstances it was a serious problem to
determine the wise course to follow in vitalizing a law
which had in part become obsolete or proved incapable
of enforcement. Of what the Attorney-General did in
enforcing it I shall speak later. The decisions of the
courts upon the law had betrayed weaknesses and imperfections,
some of them so serious as to render abortive
efforts to apply any effective remedy for the existing
evils.
It is clear that corporations created for quasi-public
purposes, clothed for that reason with the ultimate
power of the State to take private property against the
will of the owner, hold their corporate powers as carriers
in trust for the fairly impartial service of all the public.
Favoritism in the use of such powers, unjustly enriching
some and unjustly impoverishing others, discriminating
in favor of some places and against others, is palpably
violative of plain principles of justice. Such a practice
unchecked is hurtful in many ways. Congress, having
had its attention drawn to the matter, enacted a most
important anti-rebate law, which greatly strengthens the
interstate-commerce law. This new law prohibits under
adequate penalties the giving and as well the demanding
or receiving of such preferences, and provides the preventive
remedy of injunction. The vigorous administration
of this law, and it will be enforced, will, it is hoped,
afford a substantial remedy for certain trust evils which
have attracted public attention and have created public
unrest.
This law represents a noteworthy and important advance
toward just and effective regulation of transportation.
Moreover, its passage has been supplemented by
the enactment of a lav/ to expedite the hearing of actions
of public moment under the anti-trust act, known as the
Sherman law, and under the act to regulate commerce,
at the request of the Attorney-General; and furthermore,
additional funds have been appropriated to be expended
under the direction of the Attorney-General in the enforcement
of these laws.
All of this represents a great and substantial advance
in legislation. But more important even than legislation
is the administration of the law, and I ask your attention
for a moment to the way in which the law has been administered
by the profound jurist and fearless public
servant who now occupies the position of Attorney-General,
President that he shall take care that the laws be faithfully
executed, and under this provisron the Attorney-General
formulated a policy which was in effect nothing but the
rigid enforcement, by suits managed with consummate
skill and ability, both of the anti-trust law and of the
imperfect provisions of the act to regulate commerce.
The first step taken was the prosecution of fourteen suits
against the principal railroads of the Middle West, restraining
them by injunction from further violations of
either of the laws in question.
About the same time the case against the Northern
Securities Company was initiated. This was a corporation
organized under the laws of the State of New Jersey
with a capital of four hundred million dollars, the alleged
purpose being to control the Great Northern and the
Northern Pacific railroad companies, two parallel and
competing lines extending across the northern tier of
States from the Mississippi River to the Pacific Ocean.
Whatever the purpose its consummation would have resulted
in the control of the two great railway systems
upon which the people of the Northwestern States were
so largely dependent for their supplies and to get their
products to market, being practically merged into the
New Jersey corporation. The proposition that these independent
systems of railroads should be merged under
a single control alarmed the people of the States concerned,
lest they be subjected to what they deemed a
monopoly of interstate transportation and the suppression
of competition. The governors of the States most deeply
affected held a meeting to consider how to prevent the
merger becoming effective, and passed resolutions calling
upon the National Government to enforce the anti-trust
laws against the alleged combination. When these resolutions
were referred to the Attorney-General for consideration
and advice, he reported that in his opinion the
mentioned was a combination in restraint of trade
and was attempting a monopoly in violation of the
national anti-trust law. Thereupon a suit in equity,
which is now pending, was begun by the Government to
test the validity of this transaction under the Sherman law.
At nearly the same time the disclosures respecting the
secret rebates enjoyed by the great packing-house companies,
coupled with the very high price of meats, led
the Attorney-General to direct an investigation into the
methods of the so-called beef trust. The result was that
he filed bills for injunction against six of the principal
packing-house companies, and restrained them from combining
and agreeing upon prices at which they would sell
their products in States other than those in which their
meats were prepared for market. Writs of injunction
were issued accordingly, and since then, after full argument,
the United States Circuit Court has made the
injunction perpetual.
The cotton interests of the South, including growers,
buyers, and shippers, made complaint that they were
suffering great injury in their business from the methods
of the Southern railroads in the handling and transportation
of cotton. They alleged that these railroads, by
combined action under a pooling arrangement to support
their rate schedules, had denied to the shippers the right
to elect over what roads their commodities should be
shipped, and that by dividing upon a fixed basis the cotton
crop of the South all inducement to compete in rates
for the transportation thereof was eliminated. Proceedings
were instituted by the Attorney-General under the
anti-trust law, which resulted in the destruction of the
pool and in restoring to the growers and shippers of
the South the right to ship their products over any road
they elected, thus removing the restraint upon the freedom
of commerce.
In November, 1902, the Attorney-General directed
that a bill for an injunction be filed in the United States
Circuit Court at San Francisco against the Federal Salt
Company—a corporation which had been organized under
the laws of an Eastern State, but had its main office and
principal place of business in California—and against a
number of other companies and persons constituting
what was known as the salt trust. These injunctions
were to restrain the execution of certain contracts between
the Federal Salt Company and the other defendants,
by which the latter agreed neither to import nor buy
or sell salt, except from and to the Federal Salt Company,
and not to engage or assist in the production of salt west
of the Mississippi River during the continuance of such
contracts. As the result of these agreements the price
of salt had been advanced about four hundred per cent.
A temporary injunction order was obtained, which the
defendants asked the court to modify on the ground that
the anti-trust law had no application to contracts for purchases
and sales within a State. The Circuit Court overruled
this contention and sustained the Government's
position. This practically concluded the case, and it is
understood that in consequence the Federal Salt Company
is about to be dissolved and that no further contest
will be made.
The above is a brief outline of the most important
steps, legislative and administrative, taken during the
past eighteen months in the direction of solving, so far as
at present it seems practicable by national legislation or
administration to solve, what we call the trust problem.
They represent a sum of very substantial achievement.
They represent a successful effort to devise and apply
real remedies; an effort which so far succeeded because it
was made not only with resolute purpose and determination,
but also in a spirit of common-sense and justice,
as far removed as possible from rancor, hysteria, and
will continue to be enforced. Not only is the legislation
recently enacted effective, but in my judgment it was
impracticable to attempt more. Nothing of value is to
be expected from ceaseless agitation for radical and extreme
legislation. The people may wisely, and with
confidence, await the results which are reasonably to be
expected from the impartial enforcement of the laws
which have recently been placed upon the statute books.
Legislation of a general and indiscriminate character
would be sure to fail, either because it would involve all
interests in a common ruin, or because it would not really
reach any evil. We have endeavored to provide a discriminating
adaptation of the remedy to the real mischief.
Many of the alleged remedies advocated are of the unpleasantly
drastic type which seeks to destroy the disease
by killing the patient. Others are so obviously futile
that it is somewhat difficult to treat them seriously or as
being advanced in good faith. High among the latter I
place the effort to reach the trust question by means of
the tariff. You can, of course, put an end to the prosperity
of the trusts by putting an end to the prosperity
of the nation; but the price for such action seems high.
The alternative is to do exactly what has been done during
the life of the Congress which has just closed—that
is, to endeavor, not to destroy corporations, but to regulate
them with a view of doing away with whatever is of
evil in them and of making them subserve the public use.
The law is not to be administered in the interest of the
poor man as such, nor yet in the interest of the rich man
as such, but in the interest of the law-abiding man, rich
or poor. We are no more against organizations of capital
than against organizations of labor. We welcome
both, demanding only that each shall do right and shall
remember its duty to the Republic. Such a course we
consider not merely a benefit to the poor man, but a
when we require him to obey the law. On the contrary,
if he is a man whose safety and well-being depend in a
peculiar degree upon the existence of the spirit of law
and order, we are rendering him the greatest service when
we require him to be himself an exemplar of that spirit.
| Addresses and presidential messages of Theodore Roosevelt, 1902-1904 | |