PRESIDENT URGES
NEW LEGISLATION
IN HOT MESSAGE
|
I
BIG CORPORATIONS SCORED BE
CAUSE OF ATTITUDE TO
WARD GOVERNMENT.
*
EMPLOYERS’ LIABILITY LAW
Chief Executive Declares Act Needs
Immediate Revision—Righting
of Injunction Abuses Is
Urged.
To the Senate and House of Represen
tatives: The recent decision of the su
preme court in regard to the employers'
liability act. the experience of the inter
state Commerce Commission anti of the
department ol' justice in enforcing the in
terstate commerce and antitrust laws,
and the gravely significant attitude
toward the law and its administration
recently adopted by certain heads of
great corporations, render it desirable
that there should be additional legisla
tion as regards certain of tlie relations
between labor and capital, and between
the great corporations and the public.
The supreme court has decided the em
ployers' liability law to be unconstitu- i
tional because its terms apply to em
ployes engaged wholly in intrastate com
merce as jvell as to employes engaged in
interstate commerce. By a substantial
majority the court holds that the con- j
gross has power to deal with the ques- j
tion in so far as interstate oJ^merce j
Is concerned.
As regards the employers’ liability law. j
I advocate its immediate- reenactment,
limiting its scope so that it shall apply I
only to the class of cases as to which the j
court says it can constitutionally apply, ,
but strengthening its provisions within f
this scope. Interstate employment being
tlvus covered by an adequate national j
law. the field of intrastate employment ,
will he left tci the action of the several
states. With this clear definition of i
responsibility the states will undoubtedly j
give to the performance of their duty j
within their field the consideration the
importance of the subject demands.
Compensation for Employes
Hurt in Government Service
I al«o very urgently advise that a com
prehensive act he passed providing for
compensation by the government to all
employes injured in the government ser
vice. l7nder the present lav. an injured
workman in the employment of the gov
ernment lias no remedy, and the entire
burden of the accident falls on the help
less man. his wife, and his young chil
dren. This is an outrage. It is a matter '
of humiliation to the nation that there !
should not he on our statute books a pro- ;
vision to meet and partially to atone for J
cruel misfortune when it comes upon j
a man through no fault of his own while (
faithfully serving the public. In no oth
er prominent industrial country in the
world could such gross injustice occur;
for almost all civilized nations have en
acted legislation embodying the complete,
recognition of the principle which places
the entire trade risk for industrial acci
dents (excluding, of course, accidents
due to willful misconduct by the em
ploye). on the industry as represented
bv the employer, which in this case is i
the government. In all these countries
the principle applies to the government
just as much as to th£ private employer.
T'nder no circumstances should the in
jured employe or his surviving depend
ents be required to bring suit against the
government, nor should there be the re
quirement that in order to insure re
covery negligence in some form on the
part of the government should be shown
Our proposition .is not to confer a right
of action upon the government employe,
but t«> secure him suitable provision
against injuries received in the course
of his employment. The burden of the
trod* risk should be placed upon the
government. Exactly as the workingman
is entitied to his wages, so he should be
entitled to indemnity for the injuries sus
tained in the natural course of Ids labor.
The rates of compensation and the regu
lations for its payment should be speci
fied in the law. and the machinery for
determining the amount to be paid should
in each case be provided in such manner
that the employe is properly represented
without expense to him. In other words,
the compensation should be paid auto
matically. while the application of the
law in the first instance should be vested
in the department of commerce and labor.
The law should apply to all laborers, me
chanics. and other civilian employes of 1
the government of the United States. J
including those in the service of the i
Panama canal commission ami of the in- |
sular governments.
The same broad principle which
should apply to the government 1
should ultimately lie made aopli
cable to all private employers. When,
the nation has the power it should
enact laws to tnis effect. Where, the j
states alone have the power they should j
enact the laws. It is to be observed j
that an employers’ liability law does not
really mean mulcting employers in dam- :
ages. Tt merely throws upon the ein- j
plover the burden of accident insurance '
against injuries which are sure to occur.
Tt requires him either to bear or to dis- |
tribute through insurance the loss which
can readily be borne when distributed, j
but which, if undistributed, bears with :
frightful hardship upon tiie unfortunate !
victim of accident. In theory, if wages ]
-Were always freely and fairly adjusted. !
they would always include an allowance j
ns against the risk of - injury, just as !
certainly is the rate of interest for nnrn- '
ey includes an allowance for insurance I
against the risk of loss. In theory, if j
employe? were ail experienced business i
men. they would employ that part of
their wages which is received because of
the risk of injury to secure accident
Insurance. But as a matter of fact, it
Is not practical to expect that this will
be done by tlie great bodv of employes.
An employers’ liability law makes it
certain that it will be dime, in effect,
by the employer, ami it will ultimately
Impose no real additional burden upon
ihim.
There is a special bill to which T call
vour attention. Secretary Taft has ur
gently recommended the immediate pas
sage of a law providing for compensation
to employes of the government injured
In the work of the Isthmian canal, and
that $100,000 be appropriated lor this pur
pose each vear. 1 earnestly hone this will
be done; and that a snecial bill be passed
covering the case of Yard master Banton.
wlm was ir.iured nearly two years ago
while doing his duty. He is now help
less to support his wife and his three i
little boys.
Action Urged to Right
Abuses of the Injunction
I again cail your attention to the need
of some action in connection with the
abuse of injunctions in labor cases. As
regards the rights and wrongs of labor
and capital, from blacklisting to boycot
ting the whole subject is covered in ad
mirable fashion by the report of the
Anthracite Coal Strike commission,
which report should serve as a chart for
the guidance of both legislative and exec
utive officers. As regards injunctions. I
can do little hut repeat what I have said
in my last message to the congress Even
though It were possible. 1 should con
sider it most unwise to abolish the use
of the process of injunction, it is neces
sary in order Hint the courts may main
tain their own dignity and in order that
they may ill effective manner check
disorder and violence. The Judge who
uses it cautiously and conservatively, but
Sffio when the need arises, uses it fear
lessly confers Hie greatest service upon
'^Tnennle and his preeminent useful
ness as a public servant should be hearti
"y recognized. But there is no question
!n my m!nd that it has sometimes been
used heedlessly and unjustly, and that
some of the injunctions issued inflict
grave and occasionally irreparable wrong
upon those enjoined.
It is all wrong to use the injunction
to prevent the entirely proper and legiti
mate actions of labor organizations in
their struggle for industrial betterment,
or under the guise of protecting property
rights unwarrantably to invade the fun
damental rights of the Individual, it is
futile to concede, as we all do, the right
and the necessity of organized effort on
the part of wage-earners and yet by in
junctive process to forbid peaceable ac
tion to accomplish the lawful objects for
whitli they are organized and upon
wTi'ch their success depends. The fact
that the punishment for the violation
of an injunction must, to make the order
effective, necessarily be summary and
without the intervention of a jury makes
its issuance in doubtful cases a danger
ous practice, and in itself furnishes a
reason why the process should be sur
rounded with safeguards to protect in
dividuals against being enjoined from ex
ercising their proper lights. Reasonable
notice should be given the adverse party.
This matter is daily becoming of graver
importance and 1 can not too urgently
recommend that the congress give care
ful consideration to the subject. If some
way of remedying the abuses is not found
the feeling of indignation against them
among large numbers of our citizens will
tend to grow so extreme as to produce
a revolt against the whole use of the
process of injunction. The ultra-conserv
atives who object to cutting out the
abuses will do well to remember that if
the popular feeling does become strong
many of those upon whom they rely to
defend them will be the first to turn
against them. Men of property can not
afford to trust to anything save the spirit
of justice and fair play: for those very
public men who, while it is to their in
terest. defend all the abuses committed
by capital and pose as the champions of
conservatism, will, the moment they
think their interest changes, take the
lead in just such a matter as this and
pander to what they esteem popular feel
ing by endeavoring, for instance, ef
fectively to destroy the power of the
courts in matters of injunction: and will
even seek to render nugatory the power
to punish for contempt, upon which pow
er the very existence of the orderly ad
ministration of justice depends.
It is my purpose as soon as may be to
submit some further recommendations in
reference to our laws regulating labor
conditions within the sphere of federal
authority. A very recent decision of the
supreme court of the United States ren
dered since This message was written,
in the case of Adair vs. United States,
seemingly of far-reaching import and
of very serious probable consequences,
has modified the previously entertained
views on the powers of the congress in
the premises to such a degree as to make
necessary careful consideration of the
opinions therein filed before it is pos
sible defintely to decide in what way to
call the matter to your attention.
Asks Federal Supervision
of Interstate Carriers
Not only should there be action on cer
tain laws affecting wage-earners; there
should also be such action on laws bet
ter to secure control over the great busi
ness concerns engaged in interstate com
merce, and especially over the great com
mon carriers. The Interstate Commerce
Commission should be empowered to
pass upon any rate or practice on its
own initiative. Moreover, it should l>e
provided that whenever the commission
has reason to believe that a proposed ad
vance in a rate ought not to be made
without investigation, it should have au
thority to issue an order prohibiting the
advance pending examination by the
commission.
I would not Ik* understood as expressing
an opinion that any or even a majority
of these advances are improper. Many
of the rates in this country have been
abnormally low. The operating expenses
of our railroads, notably the wages paid
railroad employes, have greatly in
creased. These and other causes may in
any given case justify an advance in
rates, and if so the advance should he
permitted and approved. But there may
be, and doubtless are. cases where this
is not true; and our law should he so
framed that the government, as the rep
resentative of tile whole people, can pro
tect the individual against unlawful ex
action l'or the use of these public high
ways. The Interstate Commerce Com
mission should be provided with the
means to make a physical valuation of
any road as to which it deems this valu
ation necessary. In some form the fed
eral government should exercise super
vision over the financial operations of
our interstate railroads. Iri no other way
can justice be done between the private
owners of those properties and the pub
lic which pay their charges. When once
an inflated capitalization has gone upon
the market and has become fixed in
value, its existence must be recognized.
As a practical matter it is then often
absolutely necessary to take account of
the thousands of innocent stockholders
who lmvc purchased their stock in good
faith. The usual result of such inflation
is therefore to impose upon the public
an unnecessary but everlasting tax.
while the innocent purchasers of the
stock are also harmed and only a few
speculators are benefited. Such wrongs
when once accomplished can with dif
ficulty be undone; but they can be pre
vented with safety and with justice.
When combinations of interstate railways
must obtain government sanction: when
it is no longer possible for an interstate
railway to issue stock or bonds, save in
the manner approved by the federal gov
ernment; when that government makes
sure that the proceeds of every stock
and bond issue go into the improvement
of the property and not the enrichment
of some individual or syndicate; when,
whenever it becomes material for guid
ance in the regulative action of the gov
ernment. the physical value of one of
these properties is determined and made
known—there will he eliminated from
railroad securities that * lenient of un
certainty which lends to them their spec
ulative quality and which has contributed
much to the financial stress of the re
cent past.
Would Permit Pooling
of Railroad Interests
In this connection I desire to repeat my
recommendation that railways be per
mitted to form traffic associations for the
purpose of conferring about ami agree
ing upon rates, regulations, and practices
affecting interstate business in which the
members of the association are mutually
interested. This does not mean that tliev
should be given the right to pool their
earnings or their traffic. Tie* law re
quires that rates shall be so adjusted as
not to discriminate between individuals,
localities, or different species of traffic.
Ordinarily, rates by all competing lines
must be the same. As applied to prac
tical conditions, the railway operations
of this country can not be conducted ac
cording to law without what is equivalent
to conference and agreement. The articles
under which such associations operate
should he approved by the commission:
all their operations should be open to
public inspection; and the rates, regula
tions. and practices upon which they
agree should be subject to disapproval by
the commission.
I urge this last provision with the same
earnestness that l do the? others This
country provides its railway facilities by
private capital. Those facilities will not
be* adequate unless the capital employed
is assured of just treatment and an ade
quate return. In fixing the charges of
our railroads. I believe that, considering
the interests of the public alone, it is bet
ter to allow too liberal rather than too
scanty earnings, for, otherwise, there is
grave danger that our railway develop
ment may not keep pace with the demand
for transportation. But the fundamental
idea tliat these railways are public: high
ways must be recognized, and they must
be* open to the whole public upon equal
terms and upon reasonable terms.
In reference to the Sherman anti-trust
law. I repeat the recommendations made
in my message at the opening of the pres
ent congress, as well as in my message
to the previous congress. The attempt
in this law to provide in sweeping terms
against all combinations of whatever
character, if technically in restraint of
trade as such restraint has been defined
by the courts, must necessarily be either
futile or mischievous, and sometimes
both. The present law makes some com
binations illegal, although they may be
useful to the country. On the other hand,
as to some huge combinations which are
both noxious and illegal, even if the ac
tion undertaken against them under the
law by the government is successful, the
result may l>e to work but a minimum
benefit to the public. Even though the
combination be broken up and a small
measure of reform thereby produced, the
real good aimed at t^n not be obtained,
.. • . .. ’ (\v
! for such real good can come only by a
thorough and continuing supervision over
■ the acts of the combination in all its
j parts, so as to prevent stock watering,
i improper forms of competition, and, in
; short, wrongdoing generally. The law
j should correct that portion of the Sher
j man Act which prohibits all combinations
j of the character above described, whether
they be reasonable or unreasonable; but
this should be done only as part of a
general scheme to provide for this ef
fective and thoroughgoing supervision by
the national government of all the oper
ations of the big interstate business con
cerns.
I do not know whether it is possible,
but if possible, it is certainly desirable,
that in connection with measures to
restrain stock watering and overcapital
ization there should be meacures taken
j to prevent at least the grosser forms of
j gambling in securities and commodities,
j such as makmg large sales of what men
do not possess and ‘cornering*’ the mar
! ket. legitimate purchases of commodi
j ties and of stocks and securities for in
| vestment Iiave no connection whatever
; with purchases of stocks or other securi
ties or commodities on a margin for
I speculative and gambling purposes.
, There is no moral difference between
gambling at cards or in lotteries or on
' the race track and gambling in the stock
| market. One method is just as perni
; clous to the body politic as the other in
• kind, and in degree the evil worked is
i far greater. But it is a far more difficult
i subject with which to deal. The great
! bulk of the business transacted on tiie
; exchanges is not only legitimate, but is
necessarv to the working of our modern
| industrial syklem, and extreme care
; would have to be taken not to interfere
! with this business in doing away with
; the * bucket shop” type of operation. We
i should study both tiie successes and the
; failures of foreign legislators who. not
i ably in Germany, have worked along this
line, so as not to do anything harmful.
Moreover, there is a spec ial difficulty in
dealing with this matter by the federal
government in a federal republic like
ours. But if it is possible to devise
a way to deal with it the effort should be i
made, even if only in a cautious and j
tentative way. It would seem that the
federal government could at least act !
by forbidding the use of the mails, tele
graph and telephone wires for mere j
gambling in stocks and futures, just as 1
it docs in lottery transactions.
santa i-e ^resident Mad
Guilty Knowledge of Rebating
I inclose herewith a statement issued
by the chief of the bureau of corpora- !
tions (Appendix 1). in answer to certain !
statements (which 1 also inclose), made
by and on behalf of the agents of the
Standard Oil corporation (Appendix 2),
and a letter of the attorney-general ( Ap
pendix 2). containing an answer to cer
tain statements, also inclosed, made by
the president of the Santa Fe Railway
Company (Appendix A). The Standard
Oil corporation and the railway company
have both been found guilty by the
courts of criminal misconduct: both have
been sentenced to pay heavy lines: and
ea< h lias issued and published broadcast
these statements, asserting their inno
cence and denouncing as improper the
action of the courts and juries in con
victing them of guilt. These statements
are very elaborate, are very ingenious,
and are untruthful in important par
ticulars. The following letter and in- t
closure from Mr. Honey sufficiently illus- ;
trate the methods of the high officials of j
tilt- Santa Fe and show the utter falsity j
of their plea of ignorance, the similar ;
plea of the Standard Oil being equally !
without foundation:
“Department of Justice. Office of the ,
United States Attorney. District of Ore
gon.
“Portland. January 11. 190$. j
“The President. Washington. D. ('.
“Dear Mr. President: ! understand that
Mr. Ripley, of the Atchison. Topeka &
Santa Fe Railway system, has comment- I
ed with some severity upon your attitude
toward the payment of rebates by certain
transcontinental railroads and that he
has declared that he personally never
knew anything about any rebates being
granted by his road. .1 in- j
close you herewith copy of a letter from j
Edward Chambers, general freight traffic
manager of the Atchison. Topeka & San
ta Fe Railway system, to Mr. G. A.
Davidson, auditor of the same company, ;
dated February 27. 190s. . . .
“This letter does not deal with inter
state shipments, but the constitution of
the state of California makes the pay
ment of rebates by railroads a felony,
and Mr. Ripley has apparently not been
above the commission of crime to secure
business. You are at liberty to use
tins inclosure in any way that you think ;
it c an be of service to yourself or the [
public.
, “Sincerely yours, i
“FRANCIS J. HENEY.”
“San Francisco. February 27. lf«»7.
“Dear Sir: l hand you herewith a tile
of papers covering the movement of fuel
oil shipped by the Associated Oil Com
pany over our line from January 1. 190*1,
up to and including November 1.". 19c*;.
“We agreed with the Associated Oil
Co.’s negotiations with Mr. Ripley. Mr. j
Wells and myself, that in consideration
of their making us a special price on oil
for < ompany use. which is covered by a
contract, and the further consideration!
that we would take a certain quantity,
thev would in turn ship from Bakersfield
over our line to San Francisco Bay •
points a certain minimum number of bar
rels of fuel oil at rate of 2." cents per
barrel from Bakersfield, exclusive of the
switching c harge.
“These statements cover the movement
except that they have included Stockton,
which is not correct, as it is not a bay .
point and could not be reached as con
veniently by water. We have paid them
on account of this movement $7,239 which
should be deducted from the total of \
movement shown in the attached papers.
“I wish you would arrange to make up i
a statement, check the same, and refund ,
to the Assoc iated Oil Company down to
the basis of 2.** cents per barrel from Ba
kersfield where they are the shippers, re
gardless of who is consignee, as all their
fuel oil is sold delivered. The reason
for making this deal in addition t«> what j
I have stated is that the Associated Oil
Company have their own boats and carry
oil front fields controlled by themselves
along the c onst near San Luis Obispo to |
Fan Francisco at a much lower cost than
the special rate we have made them and
in competition with the Union OiF ('om
pany and the Standard Oil Company, it
was necessary for thorn to sell at the ,
Fan Francisco Bay points on the basis i
of the* cost of water transportation from
the roast fields. They figured they c ould
only afford to pay us the 2."» cents per
barrel if by doing this they sold our |
company a certain amount of fuel oil. j
otherwise the business covered by the '
attached papers would have come in by
! boat from the coast fields.
! “I am writing this up completely so
that there may be in the papers a history
of the reasons why this arrangement was
made. I wish you would go ahead and
make the adjustment as soon as possible,
as the Associated Oil Company are very
anxious to have the matter closed up.
The arrangement was canceled on No
! vember 15th at a conferenc e between Mr.
I Ripley, Mr. Wells, Mr. Porter, and my
i self.
tours t ru iv .
•EDWARD CHAMBER?.”
"Shipments-Associated Oil Company,
“Mr. O. A. Davidson.
“Auditor. Dos Angeles." |
The attacks by these great corporations i
on Hie administration's actions have been |
given a wide circulation throughout the ,
countrv. in the newspapers and other
wise, by those writers and speakers who. j
consciously or unconsciously, act as the i
representatives of predatory wealth—of j
the wealth accumulated on a giant scale
by all forms of iniquity, ranging front j
the oppression of wageworkers to unfair |
and unwholesome methods of crushing
out competition, and to defrauding the
public by stock jobbing and the manipu
lation of securities. Certain wealthy men
of this stamp, whose conduct should be i
abhorrent to every man of ordinarily de- j
cent conscience, and who commit the
hideous wrong of teaching our young
men that phenomenal business success
must ordinarily be based on dishonesty,
have during ttie last few months made
it apparent that they have banded to
gether to work for a reaction. Their en
i deavor is to overthrow ami discredit all
I who honestlv administer the law, to pre
vent any additional legislation which
would check and restrain thorn, an.l to
secure if possible a freedom'from all re- j
stralnt which will permit every unscru- i
pulous wrongdoer to do what ho wishes !
unchecked provided lie has enough mon- i
ey The only way to counteract the
movement in which these men are en
gaged is to make clear in tae public just !
what thev have done in the past and just ;
what they arc seeking to accomplish in ;
the present. *
The administration and those who sup
port itc views are not only not engaged
in an assault on property, but are stren
uous upholders of the rights of property.
Under no circumstances would we
countenance attacks ifpon law-abiding
property, or do aught but condemn those
who hold up rich men as being evil men
because of their riches. On the contrary,
our whole effort is to insist upon con
duct, and neither wealth nor property nor
any other class distinction, as being the
proper standard by which to judge the
actions of men. For the honest man of
great wealth we have a hearty regard,
just as we have a hearty regard for the
honest politician and honest newspaper.
But part of the movement to uphold hon
esty must be a movement to frown on
dishonesty. We attack only the corrupt
men of wealth, who find In the purchased
politician the most efficient instrument of
corruption and in the purchased newspa
per the most efficient defender of cor
ruption. Our main quarrel is not with
these agents and representatives of the
interests. They derive their chief power
from the great sinister offenders who
stand behind them. They are but pup
pets who move as tiie strings are pulled.
It is not the puppets, but the strong pun
ning men and the mighty forces working
for evil behind and through the puppets,
with whom we have to deal. We seek to
control law-defying wealth; in the first
place to prevent its doing dire evil to
the republic, and in the next place to
avoid the vindictive and dreadful radi
calism 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; ami such attacks
become inevitable if decent citizens per
mit those rich men whose lives are cor
rupt 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 re
specters of persons. If a labor union
does wrong, we oppose jt as firmly as
we oppose a corporation which dots
wrong; and we stand equally stoutly for
the rights of the man of wealth and fof
the rights of the wage-worker. We seek
to protect the property of every man who
ads honestly, of every corporation that
represents wealth honestly accumulated
and honestly used. We seek to stop
wrongdoing, and we desire to punish the
wrong doers only so far a** is necessary
to achieve this end.
Campaign of Lawbreakers
Against Government's Policy
Then- are ample material rewards for
those who serve with fidelity the mam
mon of unrighteousness: but they are
dearly paid for by tin* people who per
mit their representatives, whether in pub
lic life, in the press, or in the colleges
where their young men an* taught, to
preach and to praetiee That there is one
law for the rich and another for the poor.
The umoont of money the representatives
of certain great moneyed interests are
willing to spend can be gauged by their
recent publication broadcast throughout
the papers of this country, from the At
lantic to the Pacific, of huge advertise
ments attacking with envenomed bitter
ness the administration's policy of
warring against successful dishonesty,
and by their circulation of pamphlets and
hooks prepared with the same object;
while they likewise push the circulation
of tin* writings and speeches of men who.
whether because they are misled, or be
cause. seeing the light, they yet are will
ing to sin against the light, serve these
their masters of great wealth to the cost
of the plain people. The books ami
pamphlets, the controlled newspapers, the
speeches by public or private men to
which 1 refer, are usually ami especially
in the interest of the Standard Oil Trust
and of certain notorious railroad com
binations. but they also defend other in
dividuals and corporations of great
wealth that have been guilty of wrong
doing. It is only rarely that the men re
sponsible for the wrongdoing themselves
speak or write. Normally they hire oth
ers to do their bidding, or tind others who
will do it without hire. From the rail
road-rate law to the pure-food law. every
measure for honesty in business that lias
been passed during the last six years has
been opposed by these men on its pas
sage and in its administration with every
resource that bitter and unscrupulous
craft could suggest and the command of
almost unlimited money secure. But for
the last year the attack has been made
with most bitterness upon the actual ail
ministration of the law. especially
through the department of justice, but
also through the Interstate Commerce
Commission and the bureau of corpora
tions. The extraordinary violence of the
assaults upon our policy contained in
these speeches, editorials, articles, ad
vertisements. and pamphlets, and the
enormous sums of money spent in these
•various ways, give a fairly accurate
measure of the anger and terror which
our public actions have caused the cor
rupt men of vast wealth to feel in the
very marrow of their being. The attack
is sometimes made openly against us for
enforcing the law, and sometimes with a
certain cunning, for not trying to en
force it in some other way than that
which experience shows to be practic al.
One of the favorite methods pf the lat
ter class of assailant is to attack the ad
ministration for not procuring the im
prisonment instead of the fine of offend
ers under, these anti-trust laws. The man
making this assault is usually either a
prominent lawyer or an editor who takes
his policy from the financiers and his
arguments fron their attorneys. If the
former, lie has defended and advised
many wealthy malefactors, and he knows
well that, thinks to the advice of lawyers
like himself a certain kind of modern
corporation lias been turned into an ad
mirable instrument by which to render it
well-nigh impossible to get at the head
of the corporation, at the man who is
really most guilty. When we are able
to put the real wrongdoer in prison, this
is what we strive to do. tills is what we 1
have actually done with some very
wealthy criminals, who. moreover, repre
sented that most baneful of all alliances,
the alliance between the corruption of
organized polities and the corruption of
high finance This is what we have done
in the Gaynor and Greene case, in the
ease of the misapplication of funds in
connection with certain great banks in
' .11" ■■***'* * * v* '•**■*• " 11 1
as in otlnr cases likewise, neither the
highest political position nor the posses
sion of great wealth, has availed to sav«
the offenders from prison. The federal
government does scourge sin: it does hid
sinners fear: for it has put behind the
bars with impartial severity, tin* powerful
financier* th powerful politician, the rich
land thief, tin- rich contractor—all. no
matter how high their station, against
whom criminal misdeeds can be proved.
All their wealth and power can not pro
tect them. But it often happens that the
effort to imprison a given defendant is
certain to be futile, while it is possible
to fine him or to fine the corporation of
w hich he is head; so that. In other words,
the only way of punishing the wrong is
by fining the corporation, unless we are
content to proceed personally against the
minor agents. The corporation lawyers
to whom I refer and their employers are
the men mainly responsible for this
state of things, and their responsibility is
shared with all who ingeniously oppose
the passing of just and effective laws, or
who fail to execute them when they have
been put o.i the statute books.
Much is said, in these attacks upon
the policy of the present administra
tion. about the rights of “innocent
stock holders.’* That stockholder is
not innocent who voluntarily purchases
stock in a corporation whose methods
and management he knows to be cor
rupt; and stockholders are bound to
try to secure honest management, or
else are estopped from complaining
about the proceedings the government
finds necessary in order to compel the
corporation to obey the law'. There has
been in the past grave wrong done in
nocent stockholders by overcapitaliza
tion. stock-watering. stock -jobing.
stock manipulation. This we have
sought to prevent, first, by exposing the
thing done and punishing the offender
when any existing law had been vio-t
lated; second, by recommending the pas
sage of laws which would make unlaw
ful similar practices for the future.
The public men. lawyers and editors
who loudly proclaim their sympathy for
the “innocent stockholders" u'hen a
great law-defying corporation is pun
ished. are the first to protest with fran
tic vehemence against all efforts by
law' to put a stop to the practices which
are the real and ultimate sources of t
damage alike to the stockholders a*J
the public. The apologists of success
ful dishonesty always declaim against
any effort to punish or prevent it. on
the ground that any 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 se
’curing, by speech, editorial, book, or
pamphlet, the defense by misstate
ments of what they have done; and
yet when public servants correct their
‘misstatements by telling the truth they
declaim against them for breaking
silence, lest “values be depreciated.
They have hurt honest business men.
honest working men. honest farmers;
and nowr 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 well ex
pressed in brazen protests against any
effort for the moral regeneration of the
business world, on the ground that it is
unnatural, unwarrantetd and injurious,
and that business panic Is the neces
sary penalty for such effort to secure
business honesty. The morality of
such a plea is precisely as great as if
made on behalf of the men eaugnt In
a gambling establishment when that
gambling establishment is raided by
the police. If such words mean any
thing they mean that those whose sen
timents they represent stand against
the effort to bring about a moral re
generation of business, which will pre
vent a repetition of the insurance,
banking and street railroad scandals in
New York; a repetition of the Chicago
Alton deal; a repetition of the com
bination between certain professional
politicians, certain professional labor
j leaders, and certain big financiers,
from the disgrace of which San Fran
cisco has just been rescued; a repeti
tion of the successful effort by the
Standard Oil people t«» crush out every
competitor, to overawe the common
carriers, and to establish a monopoly
which treats the public with a con
tempt which the public deserves so
long as it permits men of such prin
ciples and sentiments to avow and act
on tin in with impunity. The outcry
against stopping dishonest practices
among wrongdoers who happen to be
wealthy is precisely similar to the out
cry raised against every effort for
cleanliness ami decency in ity gov
ernment. because. forsooth, it will
“hurt business.” The same outcry is
made against the department of jus
tice for* prosecuting tin* heads of colos
sal corporations that has b*-en made
against the men who in San Francisco
have prosecuted with impartial sever
ity the wrongdoers among business
rm-n. public officials and labor leaders
alike. The principle is tin* same in
the two cases. Just as the blackmail
er and bribe giver stand on the same
evil eminence of infamy, so the man
who makes an enormous fortune by
corrupting legislatures ami municipal
ities and fleecing his stockholders and
tht* public, stands on the same moral
level with the creature who fattens on
the blood money of the gambling house
and the saloon. Moreover, in the last
analysis, both kinds of corruption are
far more intimately connected than
would at first sight appear; the wrong
doing is at bottom tht same. Corrupt
business and corrupt politics act and
react with ever increasing debase
ment, one on tile other; the corrupt
head of a corporation and the corrupt
labor leader are both in the same de
gree the enemies of honest corpora
tions and honest labor unions; the re
bate taker, the franchise trafficker,
the manipulator of securities, the pur
veyor and protector of vice, the black
mailing ward boss, the ballot-box staff
er. the demagogue, the mob leader, the
hired bully, and man-killer—all alike
work at the same welt 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 tiie 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. The special plead
ers for business dishonesty, in denounc
ing the present administration for en
forcing the law against the huge and
corrupt corporations which have defied
the law. also denounce it for endeavor
ing to secure sadly needed labor legis
lation. such as a far-reaching law mak
ing employers liable for injuries to
their employes.
“Business” Hurt by Movement
for Honesty Should Be Crushed
It is meet and tit that the apologists
for corrupt wealth should oppose every
effort to relieve weak and helpless peo
ple from crushing misfortune brought
upon them by injury in the business
from which they gain a bare livelihood.
The burden should be distributed. 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 disfig
ured for life, it is a moral wrong that
the whole burden of the risk necessarily
incidental to the business should be
placed with crushing weight upon her
weak shoulders, and all who profit by
her work escape scot-free. This is
what opponents of a just employers’
liability law advocate; and it is con
sistent that they should usually also
advocate immunity for those most dan
gerous members of the criminal class
—the criminals of great wealth.
Our opponents have recently been
bitterly criticising the two judges re
ferred to in the accompanying commu
nications from the Standard Oil Com
pany and the Stata Fe railroad for hav
ing imposed heavy fines on these two
corporations: and yet these same crit
ics of these two judges exhaust them
selves in denouncing the most re
spectful and cautious discussion of
the official action of a judge which re
sults in immunity to wealth and power
ful wrongdoers, or which renders nuga
tory a temperate effort to better the
conditions of life and work among
those of our fellow countrymen whose
need is greatest. Most rertainlv it be
hooves us all to treat with the utmost
respect the high office of, judge; and
our judges, as a whole, are brave and
upright men. Respect for the law
must go hand in hand with respect for
the judges; and as a whole, it is true
now as in the past, tfiat the judges
stand in character and service above
all other men among their fellow
servants of the public. There is all
the greater need that the few who fail
high standard of integrity, of wisdom,
of sympathetic understanding and of
courage, should have their eyes opened
to the needs of their oountrvmen -V
judge who on the bench either truckles
to the moll and shrinks from sternly
repressing violence and disorder, or
hows down before a corporation: who
fails to stand tip valiantly for the
riglits of property on the one hand, or
on the other by misuse of the process
of injunction nr by his attitude toward
all measures for the betterment of the
conditions of labor, makes the wage
worker feel with bitterness that the
courts are hostile to him; or who fails
to realize that all public servants in
their several stations must strive to
stop the abuses of the criminal rich_
such a man performs an even worse
service to the body politic titan the
legislator or executive who goes wrong
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 great
er respect; and if he is a true servant
of the people, if he is upright, wise and
fearless, he will unhesitatingly disre
gard even the wishes of the people if
they conflict witli the eternal princi
ples of right as against wrong He
must serve the people; hut he must
serve Ids own conscience first All
honor to such a judge.
Tiie opponents of tile measures we
champion single out now one and now
another measure for especial attack, and
speak as if the movement in which we
are engaged was purely economic. It lias
a large economic side, but it is funda
mentally an ethical movement, it is not
a movement to be completed In one year
or two or three years; it is a movement
which must be presevered In until the
spirit which lies behind it sinks deep
into the heart and the conscience of the
whole people. Tt is always important
to choose the right means to achieve our
purpose, but it is even more important
to keep this purpose clearly before us;
and this purpose Is to secure national
honesty in business and in polities. We
do not subscribe to the cynical belief that
dishonesty and unfair dealing are essen
tial to business success, and are to be
condoned when the success is moderate
and applauded when the success is great.
The methods by whlah the Standard Oii
people and those engaged in the other
combinations of which I have spoken
above have achieved great fortunes can
only be justified by the advocacy of a
system of morality which would also
justifv everr form of criminality on the
part of a labor nftifon, and every form
of violence, corruption, and fraud, iron*
murder to bribery apd ballot-box stuff
ing in politics. We are trying to secure
equality of opportunity for all; and fie
! struggle for honesty is the same whether
j it is made on behalf uf one set of men
! or of another.
Laws Must Continue to Be
Administered with Even Hand
The laws must in the future be ad
ministered as they are now being ad
ministered, so that the department or
justice may continue to be. what .t now
is. in very fact the department ot jus
tice, where so far as our ability permits
justice is meted out with an even hand
to great and small, rich and poor, weak
and strong. Moreover, there should be
no delay in supplementing the laws now'
on the statute books by the enactment of
turtljer legislation as outlined in th»*
message I sent to congress on its assem
bling. I’nder the existing laws, much,
very much, has been actually accom
plished during the past six years, and it
has been shown by actual experience*
that they can be enforced against the
i wealthiest corporation and the riches:
i and most powerful manager or ruanipu
1 lator of that corporation .as rigorously
! and fearlessly as against the humblest
i offender. Above all. they have been
j enforced against the very wrongd*»ers
I and agents of wrongdoers who have for
; so many years gone scot free and flouted
the laws with impunity, against great
: law-defying corporations of immense
\ wealth, which, until within the last hair
1 dozen years, have treated themselves and
have expected others to treat them as
I being beyond and above all possible*
; check from law.
Tt is especially necessary to secure to
i the representatives of the national g**\
i eminent full power to deal with the great
j corporations engaged in interstate com
I men e. and above all, with the great in -
> terstate common carriers. Our people
; should clearly recognize that while then*
an* difficulties in any course ot conduct
to be followed in dealing with these great
corporations, these difficulties must
ia< ed. and one of three courses followed.
The first course is to abandon all ef
fort to oversee and control their actions
. in the interest of the general public
■ and to permit a return to the utter lack
i of control which would obtain if they
; were ieft to the common law. I do not
i for one moment believe that our people
! would tolerate this position. Tire ex
traordinary growth of modern industrial -
j ism has rendered the common law. which
grew up under and was adapted to deal
vvth totally different conditions, in many
j respects inadequate to deal with the new
conditions. These new conditions make it
necessary to shackle cunning as in the
| past we have shackled force. The vast
individual and corporate fortunes, the
vast combinations of captal. winch have
marked the development of our industrial
i system, create new conditions, and neces
sitate a change from the old atUtud** «•(
; the state and nation toward tin* rules
■ regulating the acquisition and untrarn
meled business use of property. In order
both that property may be adequately
: protected, and that at the same time
l those who hold it may be prevented from
I wrongdoing.
have the regulation undertaken either
; by the nation or by the states. Of
course in any event both the national
government and the several state gov
ernments must do each its pari. an«l
I each can do a certain amount that th**
j other cannot do. while the only really
satisfactory results must be obtained
by the representatives of the national
and state governments working heart
ily together within their respe. tive
spheres. But in my judgment
thoroughgoing and satisfactory « on
. trol can in the end only lie obtained by
; the action of the national government.
! for almost all the corporations of
enormous wealth—that is. the corpora
, tions which it is especially desirable to
: control—are engaged in interstate com
merce. and derive their power and
their importance not from that por
i tion of their business which Is intra
state. but from the interstate business
It is not easy always to decide just
where the line of demarcation between
tiie two kinds of business falls. Ti;i»
line must ultimately be drawn by the
federal courts. Much of the efTort t*»
secure adequate control of the great
, corporations by state action has been
wise and effective, but much of it has
been neither; for when tlie effort i
made to accomplish by the action of
tlie state what can only be accom
plished by the action of the nation, th**
result can only be disappointing, and in
the end the law will probably be de
i dared unconstitutional. So. likewise.
! in the national arena, we who b» lieve
j in the measures herein advocated .ire
; hampered and not aided by the extrem
i ists who advocate action so violent
. that it would either be useless or else
would cause more mischief than it
would remedy.
We have just passed through two
months of acute financial stress. At any
| such time it is a sad fact that entirely
innocent people suffer from no fault
of their own; and every one must feel
the keenest sympathy for the large
body of honest business men. of hon
• est investors, of honest wageworkers.
who suffer because involved in a crash
j for which they are in no way respon
sible. At such a time then* is a natu
; ral tendency on the part of many men
j to feel gloomy and frightened at tin
outlook; but there is no justification
for this feeling. There is no nation so
absolutely sure of ultimate sue • ss
| as ours. Of course we shall suc
ceed. Ours is a nation of masterful
energy, with a continent for it- d*»
; main, and it feels within its veins th**
thrill which comes to thos** who know
| that they possess the future. We are
I not cast down by the fear of failure.
; We are upheld by the confident hope
I of ultimate triumph. The wrongs that
1 exist are to be*corrected; but they in no
! way justify doubt as to the final out
i come, doubt as to the great mat- rial
prosperity of the future, or of th* |.»ft>
spiritual life which is to be built- upon
that prosperity as a foundation No
misdeeds done in the present must be
permitted to shroud from our eyes the
glorious future of the nation; hut be
cause of this very fact it behooves us
never to swerve from our resolute pur
pose to cut out wrongdoing and uphold
what is right.
I do nut for a moment believe than, the
actions of this administration .have
brought on business distress, so far as
this is due to local and not world-wide
causes, anu ut me actions or any par
ticular individuals, it is due to thesp,-, il
lative folly and flagrant dishonest! of a
few men of great wealth, who seek to
shield themselves from the effects to their
own wrongdoing 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 rotten
ness from tile body politic meant a mo
mentary check to an unhealthy s,-eming
prosperity. I should not for one moment
hesitate, to put the knife to tile corrup
tion. 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 tilings and in
little things; upon just and fair dealing
as between man and man. Those who de
mand this are striving for tile right in
the spirit of Abraham I-incoln when he
said;
“Fondly do we hope, fervently do we
pray, that this mighty scourge mav pass
away. Yet. if God wills that it continue
until ail the wealth piled by the bonds
men's two hundred and fifty years of un
requited 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 1m- said Th .
judgments of the laird are true and
righteous altogether.' - a
"With malice toward none; with charity
for all; with firmness in tile right as G,sl
gives us to see the right, let us strive on
to finish tlie work we are in ’’
In the work we of this generation are
in. there is, thanks be to the Aimighiv
no danger of bloodshed and no use for
the sword; but there is grave need of
those stern qualities shown alike bv the
men of the nortli and the men of the
south in the dark days when each val
‘ant'y, l,a>tied for the light as It was given
each to see tile light. Ttieir spirit should
be our spirit, as we strive to bring nearer
shalf'he^tramph-d* un^etT’
tha?6exalteth 5a‘ n£loZ** -
THE IVHITEHOuSf RO°SEVELT.
January 31, ISOS.
