BUSINESS AND GOVERNMENT

Speech opening the Republican campaign for the Middle West, delivered at Chicago, September 22, 1906, in answer to Mr. Bryan's proposition of government ownership made in his Madison Square Garden speech in New York.

THE people's government should do no business that

the people can do better themselves; the people's government should own no business that the people can better own themselves.

But the people's government should control and regulate industries owned by some of the people and of a magnitude so great as to affect the welfare of all of the people.

The people, through their government, should not permit individuals or associated individuals to practise business methods that will be unjust to all. But the people's government should not own any industry which private enterprise can efficiently manage and whose abuses government regulation can prevent.

Government ownership of nation-wide business is the European theory of industry. Government regulation of nation-wide business is the American theory of industry. I am for the American theory and against the European theory. Government control of railways, but not government ownership of railways.

The great organizations of industry came because they

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were necessary; so it follows that on principle they are good. It is in their practice that they are sometimes bad, and it is that they shall be as good in practice as in theory that the principle of government control comes into play.

So long as the managers of these mighty corporations manage them as trustees of the people whom they serve and whose money is invested in them, government control is not needed; but when these managers treat their trusts as their private affairs to be conducted for their individual profit alone and not also for the welfare of the people, government regulation is needed — government regulation, but not government destruction; government regulation, but not government ownership unless government regulation fails.

And government regulation will not fail if these captains of industry do their duty. Government regulation will never be felt by the managers of great business enterprises who conduct business as trustees of the people, just as criminal laws are not felt by the citizen who attends to the duties of citizenship.

Liberty is realized only by him who obeys those common rules of action called laws by which alone liberty lives.

I repeat that the modern development of organized industry is not only necessary but that it is good. Take as a single illustration the railways. Without them Chicago would still be a frontier town; the farmers of Iowa could not get their cattle and grain to market; merchants would be without either customers or stock; the daily newspaper could not be served to the country districts. Without them the Nation would fall asunder. They make the man who lives on the Atlantic the

neighbor of him who lives on the Pacific and all Americans brothers. They are the greatest element in creating that common Americanism which makes the Republic's eighty millions a compact, homogeneous people. They are highways of commerce, avenues of intelligence, agencies of patriotism - they are all this and more if managed, not as a private business, but as a public trust.

Or take the Beef Trust. Without the organization of the meat industry the food requirements of the American. people could not be satisfied. If the Beef Trust would act not exclusively as a machine for private profits alone, but also as the trustee of the people which it serves and from which it gets its profits it would be one of the most beneficent forces in the industrial world.

Just as the organization of American industry developed out of changed conditions, so the principle of government regulation develops out of the action of these organizations themselves. Just as the old methods of private business are utterly inadequate in the new conditions, so the old principle of arbitrary private management is utterly inapplicable to the new methods. And so it is that the new principle of regulation by the government of all the people, over business so great that it affects all the people, has developed from the very same causes that produced those great businesses themselves.

For example, railway rates are in the last analysis a tax on every human being in the Republic. They affect the prices of all commodities. They directly touch every variety of business in the Nation that of every farmer who ships a bushel of grain, of every wholesale merchant who ships goods and every retail merchant who receives them, of every factory that ships its products, of every

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mine that ships its ore. They touch every man, woman and child who travels from town to town.

It is necessary that these rates shall be just; and the justice of those rates can not be left exclusively to the managers of the railways whose immediate purpose is the greatest possible profits. If those profits were disposed of for the equal good of all stock-holders, it might be different; but they are often juggled for the advantage of a few stock-holders, as witness the recent surprise in Union and Southern Pacific dividends and the results that followed. "Open and above-board" must henceforth be the motto of American business.

The throat of one shipper should not be cut and his blood given to another shipper; and this can not be left to the railroad manager alone, because his immediate purpose is the largest profits and he might find greater profits in treating one shipper better than others; as witness the facts disclosed by the investigation of the Pennsylvania Railroad, some of whose officers were found to be stock-holders in shipping companies which therefore got cars denied to other shippers of the same products.

It ought not to be left to the railroad managers exclusively, because they might be coerced by powerful shippers to treat unfairly less powerful shippers; as witness the coercion of railways by the Standard Oil Company, the Beef Trust and other powerful concerns which conducted their business not as a public trust for the public good, but solely as a private system for private gain alone.

Therefore it becomes necessary that the people whose savings are invested in these very railways; the people

from whom the railways derive their revenues; the people whom the railways serve and who serve the railways, should have a voice in their management. So it is necessary that the railways whose rates are a tax upon all the people, whose operation directly affects all the people, should be controlled and regulated by the government of all the people.

This is the reason for the railway rate law passed by the present congress.

That law may not be very effective at the beginning; and that is not greatly important, for it will be effective in the end. I think it crude and expect little from it as it stands. But the important thing is that for the first time in our history the railway rate law puts into practical operation the principle of government control of railways.

Where experience shows that that law is defective it will be amended until finally the law will grow into a statute of perfect regulation, railway abuses will be ended, railways managed with an honest profit to their owners and faithful and impartial service to the people. And that is the only way laws should develop. Laws that are mere creations are not beneficent seldom workable. But laws that are developments from changing conditions, laws that are written by the wisdom of experience, are always beneficial. Laws that are enacted as creations are usually the products of an enthusiast's brain laws that are growths of a principle from the soil of every-day practice are the developments of a people's instructed wisdom.

It was thus our financial system grew; thus our industrial system developed; thus our Constitution itself was