Speech Transcript:

 To the Senate and House of Representatives:

The people of this country continue to enjoy great prosperity.
Undoubtedly there will be ebb and flow in such prosperity, and this
ebb and flow will be felt more or less by all members of the
community, both by the deserving and the undeserving. Against the
wrath of the Lord the wisdom of man cannot avail; in time of flood or
drought human ingenuity can but partially repair the disaster. A
general failure of crops would hurt all of us. Again, if the folly of
man mars the general well-being, then those who are innocent of the
folly will have to pay part of the penalty incurred by those who are
guilty of the folly. A panic brought on by the speculative folly of
part of the business community would hurt the whole business
community. But such stoppage of welfare, though it might be severe,
would not be lasting. In the long run the one vital factor in the
permanent prosperity of the country is the high individual character
of the average American worker, the average American citizen, no
matter whether his work be mental or manual, whether he be farmer or
wage-worker, business man or professional man.

In our industrial and social system the interests of all men are so
closely intertwined that in the immense majority of cases a
straight-dealing man who by his efficiency, by his ingenuity and
industry, benefits himself must also benefit others. Normally the man
of great productive capacity who becomes rich by guiding the labor of
many other men does so by enabling them to produce more than they
could produce without his guidance; and both he and they share in the
benefit, which comes also to the public at large. The superficial fact
that the sharing may be unequal must never blind us to the underlying
fact that there is this sharing, and that the benefit comes in some
degree to each man concerned. Normally the wage-worker, the man of
small means, and the average consumer, as well as the average
producer, are all alike helped by making conditions such that the man
of exceptional business ability receives an exceptional reward for his
ability. Something can be done by legislation to help the general
prosperity; but no such help of a permanently beneficial character
can be given to the less able and less fortunate, save as the results
of a policy which shall inure to the advantage of all industrious and
efficient people who act decently; and this is only another way of
saying that any benefit which comes to the less able and less
fortunate must of necessity come even more to the more able and more
fortunate. If, therefore, the less fortunate man is moved by envy of
his more fortunate brother to strike at the conditions under which
they have both, though unequally, prospered, the result will
assuredly be that while danger may come to the one struck at, it will
visit with an even heavier load the one who strikes the blow. Taken as
a whole we must all go up or down together.

Yet, while not merely admitting, but insisting upon this, it is also
true that where there is no governmental restraint or supervision
some of the exceptional men use their energies not in ways that are
for the common good, but in ways which tell against this common good.
The fortunes amassed through corporate organization are now so large,
and vest such power in those that wield them, as to make it a matter
of necessity to give to the sovereign--that is, to the Government,
which represents the people as a whole--some effective power of
supervision over their corporate use. In order to insure a healthy
social and industrial life, every big corporation should be held
responsible by, and be accountable to, some sovereign strong enough
to control its conduct. I am in no sense hostile to corporations.
This is an age of combination, and any effort to prevent all
combination will be not only useless, but in the end vicious, because
of the contempt for law which the failure to enforce law inevitably
produces. We should, moreover, recognize in cordial and ample fashion
the immense good effected by corporate agencies in a country such as
ours, and the wealth of intellect, energy, and fidelity devoted to
their service, and therefore normally to the service of the public,
by their officers and directors. The corporation has come to stay,
just as the trade union has come to stay. Each can do and has done
great good. Each should be favored so long as it does good. But each
should be sharply checked where it acts against law and justice.

So long as the finances of the Nation are kept upon an honest basis
no other question of internal economy with which the Congress has the
power to deal begins to approach in importance the matter of
endeavoring to secure proper industrial conditions under which the
individuals--and especially the great corporations--doing an
interstate business are to act. The makers of our National
Constitution provided especially that the regulation of interstate
commerce should come within the sphere of the General Government. The
arguments in favor of their taking this stand were even then
overwhelming. But they are far stronger today, in view of the
enormous development of great business agencies, usually corporate in
form. Experience has shown conclusively that it is useless to try to
get any adequate regulation and supervision of these great
corporations by State action. Such regulation and supervision can
only be effectively exercised by a sovereign whose jurisdiction is
coextensive with the field of work of the corporations--that is, by
the National Government. I believe that this regulation and
supervision can be obtained by the enactment of law by the Congress.
If this proves impossible, it will certainly be necessary ultimately
to confer in fullest form such power upon the National Government by
a proper amendment of the Constitution. It would obviously be unwise
to endeavor to secure such an amendment until it is certain that the
result cannot be obtained under the Constitution as it now is. The
laws of the Congress and of the several States hitherto, as passed
upon by the courts, have resulted more often in showing that the
States have no power in the matter than that the National Government
has power; so that there at present exists a very unfortunate
condition of things, under which these great corporations doing an
interstate business occupy the position of subjects without a
sovereign, neither any State Government nor the National Government
having effective control over them. Our steady aim should be by
legislation, cautiously and carefully undertaken, but resolutely
persevered in, to assert the sovereignty of the National Government
by affirmative action.

This is only in form an innovation. In substance it is merely a
restoration; for from the earliest time such regulation of industrial
activities has been recognized in the action of the lawmaking bodies;
and all that I propose is to meet the changed conditions in such
manner as will prevent the Commonwealth abdicating the power it has
always possessed not only in this country, but also in England before
and since this country became a separate Nation.

It has been a misfortune that the National laws on this subject have
hitherto been of a negative or prohibitive rather than an affirmative
kind, and still more that they have in part sought to prohibit what
could not be effectively prohibited, and have in part in their
prohibitions confounded what should be allowed and what should not be
allowed. It is generally useless to try to prohibit all restraint on
competition, whether this restraint be reasonable or unreasonable;
and where it is not useless it is generally hurtful. Events have
shown that it is not possible adequately to secure the enforcement of
any law of this kind by incessant appeal to the courts. The Department
of Justice has for the last four years devoted more attention to the
enforcement of the anti-trust legislation than to anything else. Much
has been accomplished, particularly marked has been the moral effect
of the prosecutions; but it is increasingly evident that there will
be a very insufficient beneficial result in the way of economic
change. The successful prosecution of one device to evade the law
immediately develops another device to accomplish the same purpose.
What is needed is not sweeping prohibition of every arrangement, good
or bad, which may tend to restrict competition, but such adequate
supervision and regulation as will prevent any restriction of
competition from being to the detriment of the public--as well as
such supervision and regulation as will prevent other abuses in no
way connected with restriction of competition. Of these abuses,
perhaps the chief, although by no means the only one, is
overcapitalization--generally itself the result of dishonest
promotion--because of the myriad evils it brings in its train; for
such overcapitalization often means an inflation that invites
business panic; it always conceals the true relation of the profit
earned to the capital actually invested, and it creates a burden of
interest payments which is a fertile cause of improper reduction in
or limitation of wages; it damages the small investor, discourages
thrift, and encourages gambling and speculation; while perhaps worst
of all is the trickiness and dishonesty which it implies--for harm to
morals is worse than any possible harm to material interests, and the
debauchery of politics and business by great dishonest corporations
is far worse than any actual material evil they do the public. Until
the National Government obtains, in some manner which the wisdom of
the Congress may suggest, proper control over the big corporations
engaged in interstate commerce--that is, over the great majority of
the big corporations--it will be impossible to deal adequately with
these evils.

I am well aware of the difficulties of the legislation that I am
suggesting, and of the need of temperate and cautious action in
securing it. I should emphatically protest against improperly radical
or hasty action. The first thing to do is to deal with the great
corporations engaged in the business of interstate transportation. As
I said in my message of December 6 last, the immediate and most
pressing need, so far as legislation is concerned, is the enactment
into law of some scheme to secure to the agents of the Government
such supervision and regulation of the rates charged by the railroads
of the country engaged in interstate traffic as shall summarily and
effectively prevent the imposition of unjust or unreasonable rates.
It must include putting a complete stop to rebates in every shape and
form. This power to regulate rates, like all similar powers over the
business world, should be exercised with moderation, caution, and
self-restraint; but it should exist, so that it can be effectively
exercised when the need arises.

The first consideration to be kept in mind is that the power should
be affirmative and should be given to some administrative body
created by the Congress. If given to the present Interstate Commerce
Commission, or to a reorganized Interstate Commerce Commission, such
commission should be made unequivocally administrative. I do not
believe in the Government interfering with private business more than
is necessary. I do not believe in the Government undertaking any work
which can with propriety be left in private hands. But neither do I
believe in the Government flinching from overseeing any work when it
becomes evident that abuses are sure to obtain therein unless there
is governmental supervision. It is not my province to indicate the
exact terms of the law which should be enacted; but I call the
attention of the Congress to certain existing conditions with which
it is desirable to deal, In my judgment the most important provision
which such law should contain is that conferring upon some competent
administrative body the power to decide, upon the case being brought
before it, whether a given rate prescribed by a railroad is
reasonable and just, and if it is found to be unreasonable and
unjust, then, after full investigation of the complaint, to prescribe
the limit of rate beyond which it shall not be lawful to go--the
maximum reasonable rate, as it is commonly called--this decision to
go into effect within a reasonable time and to obtain from thence
onward, subject to review by the courts. It sometimes happens at
present not that a rate is too high but that a favored shipper is
given too low a rate. In such case the commission would have the
right to fix this already established minimum rate as the maximum;
and it would need only one or two such decisions by the commission to
cure railroad companies of the practice of giving improper minimum
rates. I call your attention to the fact that my proposal is not to
give the commission power to initiate or originate rates generally,
but to regulate a rate already fixed or originated by the roads, upon
complaint and after investigation. A heavy penalty should be exacted
from any corporation which fails to respect an order of the
commission. I regard this power to establish a maximum rate as being
essential to any scheme of real reform in the matter of railway
regulation. The first necessity is to secure it; and unless it is
granted to the commission there is little use in touching the subject
at all.

Illegal transactions often occur under the forms of law. It has often
occurred that a shipper has been told by a traffic officer to buy a
large quantity of some commodity and then after it has been bought an
open reduction is made in the rate to take effect immediately, the
arrangement resulting to the profit of one shipper and the one
railroad and to the damage of all their competitors; for it must not
be forgotten that the big shippers are at least as much to blame as
any railroad in the matter of rebates. The law should make it clear
so that nobody can fail to understand that any kind of commission
paid on freight shipments, whether in this form or in the form of
fictitious damages, or of a concession, a free pass, reduced
passenger rate, or payment of brokerage, is illegal. It is worth
while considering whether it would not be wise to confer on the
Government the right of civil action against the beneficiary of a
rebate for at least twice the value of the rebate; this would help
stop what is really blackmail. Elevator allowances should be stopped,
for they have now grown to such an extent that they are demoralizing
and are used as rebates.

The best possible regulation of rates would, of course, be that
regulation secured by an honest agreement among the railroads
themselves to carry out the law. Such a general agreement would, for
instance, at once put a stop to the efforts of any one big shipper or
big railroad to discriminate against or secure advantages over some
rival; and such agreement would make the railroads themselves agents
for enforcing the law. The power vested in the Government to put a
stop to agreements to the detriment of the public should, in my
judgment, be accompanied by power to permit, under specified
conditions and careful supervision, agreements clearly in the
interest of the public. But, in my judgment, the necessity for giving
this further power is by no means as great as the necessity for giving
the commission or administrative body the other powers I have
enumerated above; and it may well be inadvisable to attempt to vest
this particular power in the commission or other administrative body
until it already possesses and is exercising what I regard as by far
the most important of all the powers I recommend--as indeed the
vitally important power--that to fix a given maximum rate, which
rate, after the lapse of a reasonable time, goes into full effect,
subject to review by the courts.

All private-car lines, industrial roads, refrigerator charges, and
the like should be expressly put under the supervision of the
Interstate Commerce Commission or some similar body so far as rates,
and agreements practically affecting rates, are concerned. The
private car owners and the owners of industrial railroads are
entitled to a fair and reasonable compensation on their investment,
but neither private cars nor industrial railroads nor spur tracks
should be utilized as devices for securing preferential rates. A
rebate in icing charges, or in mileage, or in a division of the rate
for refrigerating charges is just as pernicious as a rebate in any
other way. No lower rate should apply on goods imported than actually
obtains on domestic goods from the American seaboard to destination
except in cases where water competition is the controlling influence.
There should be publicity of the accounts of common carriers; no
common carrier engaged in interstate business should keep any books
or memoranda other than those reported pursuant to law or regulation,
and these books or memoranda should be open to the inspection of the
Government. Only in this way can violations or evasions of the law be
surely detected. A system of examination of railroad accounts should
be provided similar to that now conducted into the National banks by
the bank examiners; a few first-class railroad accountants, if they
had proper direction and proper authority to inspect books and
papers, could accomplish much in preventing willful violations of the
law. It would not be necessary for them to examine into the accounts
of any railroad unless for good reasons they were directed to do so
by the Interstate Commerce Commission. It is greatly to be desired
that some way might be found by which an agreement as to
transportation within a State intended to operate as a fraud upon the
Federal interstate commerce laws could be brought under the
jurisdiction of the Federal authorities. At present it occurs that
large shipments of interstate traffic are controlled by concessions
on purely State business, which of course amounts to an evasion of
the law. The commission should have power to enforce fair treatment
by the great trunk lines of lateral and branch lines.

I urge upon the Congress the need of providing for expeditious action
by the Interstate Commerce Commission in all these matters, whether in
regulating rates for transportation or for storing or for handling
property or commodities in transit. The history of the cases
litigated under the present commerce act shows that its efficacy has
been to a great degree destroyed by the weapon of delay, almost the
most formidable weapon in the hands of those whose purpose it is to
violate the law.

Let me most earnestly say that these recommendations are not made in
any spirit of hostility to the railroads. On ethical grounds, on
grounds of right, such hostility would be intolerable; and on grounds
of mere National self-interest we must remember that such hostility
would tell against the welfare not merely of some few rich men, but
of a multitude of small investors, a multitude of railway employes,
wage workers, and most severely against the interest of the public as
a whole. I believe that on the whole our railroads have done well and
not ill; but the railroad men who wish to do well should not be
exposed to competition with those who have no such desire, and the
only way to secure this end is to give to some Government tribunal
the power to see that justice is done by the unwilling exactly as it
is gladly done by the willing. Moreover, if some Government body is
given increased power the effect will be to furnish authoritative
answer on behalf of the railroad whenever irrational clamor against
it is raised, or whenever charges made against it are disproved. I
ask this legislation not only in the interest of the public but in
the interest of the honest railroad man and the honest shipper alike,
for it is they who are chiefly jeoparded by the practices of their
dishonest competitors. This legislation should be enacted in a spirit
as remote as possible from hysteria and rancor. If we of the American
body politic are true to the traditions we have inherited we shall
always scorn any effort to make us hate any man because he is rich,
just as much as we should scorn any effort to make us look down upon
or treat contemptuously any man because he is poor. We judge a man by
his conduct--that is, by his character--and not by his wealth or
intellect. If he makes his fortune honestly, there is no just cause
of quarrel with him. Indeed, we have nothing but the kindliest
feelings of admiration for the successful business man who behaves
decently, whether he has made his success by building or managing a
railroad or by shipping goods over that railroad. The big railroad
men and big shippers are simply Americans of the ordinary type who
have developed to an extraordinary degree certain great business
qualities. They are neither better nor worse than their
fellow-citizens of smaller means. They are merely more able in
certain lines and therefore exposed to certain peculiarly strong
temptations. These temptations have not sprung newly into being; the
exceptionally successful among mankind have always been exposed to
them; but they have grown amazingly in power as a result of the
extraordinary development of industrialism along new lines, and under
these new conditions, which the law-makers of old could not foresee
and therefore could not provide against, they have become so serious
and menacing as to demand entirely new remedies. It is in the
interest of the best type of railroad man and the best type of
shipper no less than of the public that there should be Governmental
supervision and regulation of these great business operations, for
the same reason that it is in the interest of the corporation which
wishes to treat its employes aright that there should be an effective
Employers' Liability act, or an effective system of factory laws to
prevent the abuse of women and children. All such legislation frees
the corporation that wishes to do well from being driven into doing
ill, in order to compete with its rival, which prefers to do ill. We
desire to set up a moral standard. There can be no delusion more
fatal to the Nation than the delusion that the standard of profits,
of business prosperity, is sufficient in judging any business or
political question--from rate legislation to municipal government.
Business success, whether for the individual or for the Nation, is a
good thing only so far as it is accompanied by and develops a high
standard of conduct--honor, integrity, civic courage. The kind of
business prosperity that blunts the standard of honor, that puts an
inordinate value on mere wealth, that makes a man ruthless and
conscienceless in trade, and weak and cowardly in citizenship, is not
a good thing at all, but a very bad thing for the Nation. This
Government stands for manhood first and for business only as an
adjunct of manhood.

The question of transportation lies at the root of all industrial
success, and the revolution in transportation which has taken place
during the last half century has been the most important factor in
the growth of the new industrial conditions. Most emphatically we do
not wish to see the man of great talents refused the reward for his
talents. Still less do we wish to see him penalized but we do desire
to see the system of railroad transportation so handled that the
strong man shall be given no advantage over the weak man. We wish to
insure as fair treatment for the small town as for the big city; for
the small shipper as for the big shipper. In the old days the highway
of commerce, whether by water or by a road on land, was open to all;
it belonged to the public and the traffic along it was free. At
present the railway is this highway, and we must do our best to see
that it is kept open to all on equal terms. Unlike the old highway it
is a very difficult and complex thing to manage, and it is far better
that it should be managed by private individuals than by the
Government. But it can only be so managed on condition that justice
is done the public. It is because, in my judgment, public ownership
of railroads is highly undesirable and would probably in this country
entail far-reaching disaster, but I wish to see such supervision and
regulation of them in the interest of the public as will make it
evident that there is no need for public ownership. The opponents of
Government regulation dwell upon the difficulties to be encountered
and the intricate and involved nature of the problem. Their
contention is true. It is a complicated and delicate problem, and all
kinds of difficulties are sure to arise in connection with any plan of
solution, while no plan will bring all the benefits hoped for by its
more optimistic adherents. Moreover, under any healthy plan, the
benefits will develop gradually and not rapidly. Finally, we must
clearly understand that the public servants who are to do this
peculiarly responsible and delicate work must themselves be of the
highest type both as regards integrity and efficiency. They must be
well paid, for otherwise able men cannot in the long run be secured;
and they must possess a lofty probity which will revolt as quickly at
the thought of pandering to any gust of popular prejudice against rich
men as at the thought of anything even remotely resembling
subserviency to rich men. But while I fully admit the difficulties in
the way, I do not for a moment admit that these difficulties warrant
us in stopping in our effort to secure a wise and just system. They
should have no other effect than to spur us on to the exercise of the
resolution, the even-handed justice, and the fertility of resource,
which we like to think of as typically American, and which will in
the end achieve good results in this as in other fields of activity.
The task is a great one and underlies the task of dealing with the
whole industrial problem. But the fact that it is a great problem
does not warrant us in shrinking from the attempt to solve it. At
present we face such utter lack of supervision, such freedom from the
restraints of law, that excellent men have often been literally forced
into doing what they deplored because otherwise they were left at the
mercy of unscrupulous competitors. To rail at and assail the men who
have done as they best could under such conditions accomplishes
little. What we need to do is to develop an orderly system, and such
a system can only come through the gradually increased exercise of
the right of efficient Government control.

In my annual message to the Fifty-eighth Congress, at its third
session, I called attention to the necessity for legislation
requiring the use of block signals upon railroads engaged in
interstate commerce. The number of serious collisions upon unblocked
roads that have occurred within the past year adds force to the
recommendation then made. The Congress should provide, by appropriate
legislation, for the introduction of block signals upon all railroads
engaged in interstate commerce at the earliest practicable date, as a
measure of increased safety to the traveling public.

Through decisions of the Supreme Court of the United States and the
lower Federal courts in cases brought before them for adjudication
the safety appliance law has been materially strengthened, and the
Government has been enabled to secure its effective enforcement in
almost all cases, with the result that the condition of railroad
equipment throughout the country is much improved and railroad
employes perform their duties under safer conditions than heretofore.
The Government's most effective aid in arriving at this result has
been its inspection service, and that these improved conditions are
not more general is due to the insufficient number of inspectors
employed. The inspection service has fully demonstrated its
usefulness, and in appropriating for its maintenance the Congress
should make provision for an increase in the number of inspectors.

The excessive hours of labor to which railroad employes in train
service are in many cases subjected is also a matter which may well
engage the serious attention of the Congress. The strain, both mental
and physical, upon those who are engaged in the movement and operation
of railroad trains under modern conditions is perhaps greater than
that which exists in any other industry, and if there are any reasons
for limiting by law the hours of labor in any employment, they
certainly apply with peculiar force to the employment of those upon
whose vigilance and alertness in the performance of their duties the
safety of all who travel by rail depends.

In my annual message to the Fifty-seventh Congress, at its second
session, I recommended the passage of an employers' liability law for
the District of Columbia and in our navy yards. I renewed that
recommendation in my message to the Fifty-eighth Congress, at its
second session, and further suggested the appointment of a commission
to make a comprehensive study of employers' liability, with a view to
the enactment of a wise and Constitutional law covering the subject,
applicable to all industries within the scope of the Federal power. I
hope that such a law will be prepared and enacted as speedily as
possible.

The National Government has, as a rule, but little occasion to deal
with the formidable group of problems connected more or less directly
with what is known as the labor question, for in the great majority of
cases these problems must be dealt with by the State and municipal
authorities, and not by the National Government. The National
Government has control of the District of Columbia, however, and it
should see to it that the City of Washington is made a model city in
all respects, both as regards parks, public playgrounds, proper
regulation of the system of housing, so as to do away with the evils
of alley tenements, a proper system of education, a proper system of
dealing with truancy and juvenile offenders, a proper handling of the
charitable work of the District. Moreover, there should be proper
factory laws to prevent all abuses in the employment of women and
children in the District. These will be useful chiefly as object
lessons, but even this limited amount of usefulness would be of real
National value.

There has been demand for depriving courts of the power to issue
injunctions in labor disputes. Such special limitation of the equity
powers of our courts would be most unwise. It is true that some
judges have misused this power; but this does not justify a denial of
the power any more than an improper exercise of the power to call a
strike by a labor leader would justify the denial of the right to
strike. The remedy is to regulate the procedure by requiring the
judge to give due notice to the adverse parties before granting the
writ, the hearing to be ex parte if the adverse party does not appear
at the time and place ordered. What is due notice must depend upon the
facts of the case; it should not be used as a pretext to permit
violation of law or the jeopardizing of life or property. Of course,
this would not authorize the issuing of a restraining order or
injunction in any case in which it is not already authorized by
existing law.

I renew the recommendation I made in my last annual message for an
investigation by the Department of Commerce and Labor of general
labor conditions, especial attention to be paid to the conditions of
child labor and child-labor legislation in the several States. Such
an investigation should take into account the various problems with
which the question of child labor is connected. It is true that these
problems can be actually met in most cases only by the States
themselves, but it would be well for the Nation to endeavor to secure
and publish comprehensive information as to the conditions of the
labor of children in the different States, so as to spur up those
that are behindhand and to secure approximately uniform legislation
of a high character among the several States. In such a Republic as
ours the one thing that we cannot afford to neglect is the problem of
turning out decent citizens. The future of the Nation depends upon the
citizenship of the generations to come; the children of today are
those who tomorrow will shape the destiny of our land, and we cannot
afford to neglect them. The Legislature of Colorado has recommended
that the National Government provide some general measure for the
protection from abuse of children and dumb animals throughout the
United States. I lay the matter before you for what I trust will be
your favorable consideration.

The Department of Commerce and Labor should also make a thorough
investigation of the conditions of women in industry. Over five
million American women are now engaged in gainful occupations; yet
there is an almost complete dearth of data upon which to base any
trustworthy conclusions as regards a subject as important as it is
vast and complicated. There is need of full knowledge on which to
base action looking toward State and municipal legislation for the
protection of working women. The introduction of women into industry
is working change and disturbance in the domestic and social life of
the Nation. The decrease in marriage, and especially in the birth
rate, has been coincident with it. We must face accomplished facts,
and the adjustment of factory conditions must be made, but surely it
can be made with less friction and less harmful effects on family
life than is now the case. This whole matter in reality forms one of
the greatest sociological phenomena of our time; it is a social
question of the first importance, of far greater importance than any
merely political or economic question can be, and to solve it we need
ample data, gathered in a sane and scientific spirit in the course of
an exhaustive investigation.

In any great labor disturbance not only are employer and employe
interested, but a third party--the general public. Every considerable
labor difficulty in which interstate commerce is involved should be
investigated by the Government and the facts officially reported to
the public.

The question of securing a healthy, self-respecting, and mutually
sympathetic attitude as between employer and employe, capitalist and
wage-worker, is a difficult one. All phases of the labor problem
prove difficult when approached. But the underlying principles, the
root principles, in accordance with which the problem must be solved
are entirely simple. We can get justice and right dealing only if we
put as of paramount importance the principle of treating a man on his
worth as a man rather than with reference to his social position, his
occupation or the class to which he belongs. There are selfish and
brutal men in all ranks of life. If they are capitalists their
selfishness and brutality may take the form of hard indifference to
suffering, greedy disregard of every moral restraint which interferes
with the accumulation of wealth, and cold-blooded exploitation of the
weak; or, if they are laborers, the form of laziness, of sullen envy
of the more fortunate, and of willingness to perform deeds of
murderous violence. Such conduct is just as reprehensible in one case
as in the other, and all honest and farseeing men should join in
warring against it wherever it becomes manifest. Individual
capitalist and individual wage-worker, corporation and union, are
alike entitled to the protection of the law, and must alike obey the
law. Moreover, in addition to mere obedience to the law, each man, if
he be really a good citizen, must show broad sympathy for his neighbor
and genuine desire to look at any question arising between them from
the standpoint of that neighbor no less than from his own, and to
this end it is essential that capitalist and wage-worker should
consult freely one with the other, should each strive to bring closer
the day when both shall realize that they are properly partners and
not enemies. To approach the questions which inevitably arise between
them solely from the standpoint which treats each side in the mass as
the enemy of the other side in the mass is both wicked and foolish.
In the past the most direful among the influences which have brought
about the downfall of republics has ever been the growth of the class
spirit, the growth of the spirit which tends to make a man subordinate
the welfare of the public as a whole to the welfare of the particular
class to which he belongs, the substitution of loyalty to a class for
loyalty to the Nation. This inevitably brings about a tendency to
treat each man not on his merits as an individual, but on his
position as belonging to a certain class in the community. If such a
spirit grows up in this Republic it will ultimately prove fatal to
us, as in the past it has proved fatal to every community in which it
has become dominant. Unless we continue to keep a quick and lively
sense of the great fundamental truth that our concern is with the
individual worth of the individual man, this Government cannot
permanently hold the place which it has achieved among the nations.
The vital lines of cleavage among our people do not correspond, and
indeed run at right angles to, the lines of cleavage which divide
occupation from occupation, which divide wage-workers from
capitalists, farmers from bankers, men of small means from men of
large means, men who live in the towns from men who live in the
country; for the vital line of cleavage is the line which divides the
honest man who tries to do well by his neighbor from the dishonest man
who does ill by his neighbor. In other words, the standard we should
establish is the standard of conduct, not the standard of occupation,
of means, or of social position. It is the man's moral quality, his
attitude toward the great questions which concern all humanity, his
cleanliness of life, his power to do his duty toward himself and
toward others, which really count; and if we substitute for the
standard of personal judgment which treats each man according to his
merits, another standard in accordance with which all men of one
class are favored and all men of another class discriminated against,
we shall do irreparable damage to the body politic. I believe that our
people are too sane, too self-respecting, too fit for self-government,
ever to adopt such an attitude. This Government is not and never shall
be government by a plutocracy. This Government is not and never shall
be government by a mob. It shall continue to be in the future what it
has been in the past, a Government based on the theory that each man,
rich or poor, is to be treated simply and solely on his worth as a
man, that all his personal and property rights are to be safeguarded,
and that he is neither to wrong others nor to suffer wrong from
others.

The noblest of all forms of government is self-government; but it is
also the most difficult. We who possess this priceless boon, and who
desire to hand it on to our children and our children's children,
should ever bear in mind the thought so finely expressed by Burke:
"Men are qualified for civil liberty in exact proportion to their
disposition to put moral chains upon their own appetites; in
proportion as they are disposed to listen to the counsels of the wise
and good in preference to the flattery of knaves. Society cannot exist
unless a controlling power upon will and appetite be placed somewhere,
and the less of it there be within the more there must be without. It
is ordained in the eternal constitution of things that men of
intemperate minds cannot be free. Their passions forge their
fetters."

The great insurance companies afford striking examples of
corporations whose business has extended so far beyond the
jurisdiction of the States which created them as to preclude strict
enforcement of supervision and regulation by the parent States. In my
last annual message I recommended "that the Congress carefully
consider whether the power of the Bureau of Corporations cannot
constitutionally be extended to cover interstate transactions in
insurance."

Recent events have emphasized the importance of an early and
exhaustive consideration of this question, to see whether it is not
possible to furnish better safeguards than the several States have
been able to furnish against corruption of the flagrant kind which
has been exposed. It has been only too clearly shown that certain of
the men at the head of these large corporations take but small note
of the ethical distinction between honesty and dishonesty; they draw
the line only this side of what may be called law-honesty, the kind
of honesty necessary in order to avoid falling into the clutches of
the law. Of course the only complete remedy for this condition must
be found in an aroused public conscience, a higher sense of ethical
conduct in the community at large, and especially among business men
and in the great profession of the law, and in the growth of a spirit
which condemns all dishonesty, whether in rich man or in poor man,
whether it takes the shape of bribery or of blackmail. But much can
be done by legislation which is not only drastic but practical. There
is need of a far stricter and more uniform regulation of the vast
insurance interests of this country. The United States should in this
respect follow the policy of other nations by providing adequate
national supervision of commercial interests which are clearly
national in character. My predecessors have repeatedly recognized
that the foreign business of these companies is an important part of
our foreign commercial relations. During the administrations of
Presidents Cleveland, Harrison, and McKinley the State Department
exercised its influence, through diplomatic channels, to prevent
unjust discrimination by foreign countries against American insurance
companies. These negotiations illustrated the propriety of the
Congress recognizing the National character of insurance, for in the
absence of Federal legislation the State Department could only give
expression to the wishes of the authorities of the several States,
whose policy was ineffective through want of uniformity.

I repeat my previous recommendation that the Congress should also
consider whether the Federal Government has any power or owes any
duty with respect to domestic transactions in insurance of an
interstate character. That State supervision has proved inadequate is
generally conceded. The burden upon insurance companies, and therefore
their policy holders, of conflicting regulations of many States, is
unquestioned, while but little effective check is imposed upon any
able and unscrupulous man who desires to exploit the company in his
own interest at the expense of the policy holders and of the public.
The inability of a State to regulate effectively insurance
corporations created under the laws of other States and transacting
the larger part of their business elsewhere is also clear. As a
remedy for this evil of conflicting, ineffective, and yet burdensome
regulations there has been for many years a widespread demand for
Federal supervision. The Congress has already recognized that
interstate insurance may be a proper subject for Federal legislation,
for in creating the Bureau of Corporations it authorized it to publish
and supply useful information concerning interstate corporations,
"including corporations engaged in insurance." It is obvious that if
the compilation of statistics be the limit of the Federal power it is
wholly ineffective to regulate this form of commercial intercourse
between the States, and as the insurance business has outgrown in
magnitude the possibility of adequate State supervision, the Congress
should carefully consider whether further legislation can be bad. What
is said above applies with equal force to fraternal and benevolent
organizations which contract for life insurance.

There is more need of stability than of the attempt to attain an
ideal perfection in the methods of raising revenue; and the shock and
strain to the business world certain to attend any serious change in
these methods render such change inadvisable unless for grave reason.
It is not possible to lay down any general rule by which to determine
the moment when the reasons for will outweigh the reasons against
such a change. Much must depend, not merely on the needs, but on the
desires, of the people as a whole; for needs and desires are not
necessarily identical. Of course, no change can be made on lines
beneficial to, or desired by, one section or one State only. There
must be something like a general agreement among the citizens of the
several States, as represented in the Congress, that the change is
needed and desired in the interest of the people, as a whole; and
there should then be a sincere, intelligent, and disinterested effort
to make it in such shape as will combine, so far as possible, the
maximum of good to the people at large with the minimum of necessary
disregard for the special interests of localities or classes. But in
time of peace the revenue must on the average, taking a series of
years together, equal the expenditures or else the revenues must be
increased. Last year there was a deficit. Unless our expenditures can
be kept within the revenues then our revenue laws must be readjusted.
It is as yet too early to attempt to outline what shape such a
readjustment should take, for it is as yet too early to say whether
there will be need for it. It should be considered whether it is not
desirable that the tariff laws should provide for applying as against
or in favor of any other nation maximum and minimum tariff rates
established by the Congress, so as to secure a certain reciprocity of
treatment between other nations and ourselves. Having in view even
larger considerations of policy than those of a purely economic
nature, it would, in my judgment, be well to endeavor to bring about
closer commercial connections with the other peoples of this
continent. I am happy to be able to announce to you that Russia now
treats us on the most-favored-nation basis.

I earnestly recommend to Congress the need of economy and to this end
of a rigid scrutiny of appropriations. As examples merely, I call your
attention to one or two specific matters. All unnecessary offices
should be abolished. The Commissioner of the General Land Office
recommends the abolishment of the office of Receiver of Public Moneys
for the United States Land Office. This will effect a saving of about
a quarter of a million dollars a year. As the business of the Nation
grows, it is inevitable that there should be from time to time a
legitimate increase in the number of officials, and this fact renders
it all the more important that when offices become unnecessary they
should be abolished. In the public printing also a large saving of
public money can be made. There is a constantly growing tendency to
publish masses of unimportant information. It is probably not unfair
to say that many tens of thousands of volumes are published at which
no human being ever looks and for which there is no real demand
whatever.

Yet, in speaking of economy, I must in no wise be understood as
advocating the false economy which is in the end the worst
extravagance. To cut down on the navy, for instance, would be a crime
against the Nation. To fail to push forward all work on the Panama
Canal would be as great a folly.

In my message of December 2, 1902, to the Congress I said:

"Interest rates are a potent factor in business activity, and in
order that these rates may be equalized to meet the varying needs of
the seasons and of widely separated communities, and to prevent the
recurrence of financial stringencies, which injuriously affect
legitimate business, it is necessary that there should be an element
of elasticity in our monetary system. Banks are the natural servants
of commerce, and, upon them should be placed, as far as practicable,
the burden of furnishing and maintaining a circulation adequate to
supply the needs of our diversified industries and of our domestic
and foreign commerce; and the issue of this should be so regulated
that a sufficient supply should be always available for the business
interests of the country."

Every consideration of prudence demands the addition of the element
of elasticity to our currency system. The evil does not consist in an
inadequate volume of money, but in the rigidity of this volume, which
does not respond as it should to the varying needs of communities and
of seasons. Inflation must be avoided; but some provision should be
made that will insure a larger volume of money during the Fall and
Winter months than in the less active seasons of the year; so that
the currency will contract against speculation, and will expand for
the needs of legitimate business. At present the Treasury Department
is at irregularly recurring intervals obliged, in the interest of the
business world--that is, in the interests of the American public--to
try to avert financial crises by providing a remedy which should be
provided by Congressional action.

At various times I have instituted investigations into the
organization and conduct of the business of the executive
departments. While none of these inquiries have yet progressed far
enough to warrant final conclusions, they have already confirmed and
emphasized the general impression that the organization of the
departments is often faulty in principle and wasteful in results,
while many of their business methods are antiquated and inefficient.
There is every reason why our executive governmental machinery should
be at least as well planned, economical, and efficient as the best
machinery of the great business organizations, which at present is
not the case. To make it so is a task of complex detail and
essentially executive in its nature; probably no legislative body, no
matter how wise and able, could undertake it with reasonable prospect
of success. I recommend that the Congress consider this subject with
a view to provide by legislation for the transfer, distribution,
consolidation, and assignment of duties and executive organizations
or parts of organizations, and for the changes in business methods,
within or between the several departments, that will best promote the
economy, efficiency, and high character of the Government work.

In my last annual message I said:

"The power of the Government to protect the integrity of the
elections of its own officials is inherent and has been recognized
and affirmed by repeated declarations of the Supreme Court. There is
no enemy of free government more dangerous and none so insidious as
the corruption of the electorate. No one defends or excuses
corruption, and it would seem to follow that none would oppose
vigorous measures to eradicate it. I recommend the enactment of a law
directed against bribery and corruption in Federal elections. The
details of such a law may be safely left to the wise discretion of
the Congress, but it should go as far as under the Constitution it is
possible to go, and should include severe penalties against him who
gives or receives a bribe intended to influence his act or opinion as
an elector; and provisions for the publication not only of the
expenditures for nominations and elections of all candidates, but
also of all contributions received and expenditures made by political
committees."

I desire to repeat this recommendation. In political campaigns in a
country as large and populous as ours it is inevitable that there
should be much expense of an entirely legitimate kind. This, of
course, means that many contributions, and some of them of large
size, must be made, and, as a matter of fact, in any big political
contest such contributions are always made to both sides. It is
entirely proper both to give and receive them, unless there is an
improper motive connected with either gift or reception. If they are
extorted by any kind of pressure or promise, express or implied,
direct or indirect, in the way of favor or immunity, then the giving
or receiving becomes not only improper but criminal. It will
undoubtedly be difficult, as a matter of practical detail, to shape
an act which shall guard with reasonable certainty against such
misconduct; but if it is possible to secure by law the full and
verified publication in detail of all the sums contributed to and
expended by the candidates or committees of any political parties,
the result cannot but be wholesome. All contributions by corporations
to any political committee or for any political purpose should be
forbidden by law; directors should not be permitted to use
stockholders' money for such purposes; and, moreover, a prohibition
of this kind would be, as far as it went, an effective method of
stopping the evils aimed at in corrupt practices acts. Not only
should both the National and the several State Legislatures forbid
any officer of a corporation from using the money of the corporation
in or about any election, but they should also forbid such use of
money in connection with any legislation save by the employment of
counsel in public manner for distinctly legal services.

The first conference of nations held at The Hague in 1899, being
unable to dispose of all the business before it, recommended the
consideration and settlement of a number of important questions by
another conference to be called subsequently and at an early date.
These questions were the following: (1) The rights and duties of
neutrals; (2) the limitation of the armed forces on land and sea, and
of military budgets; (3) the use of new types and calibres of military
and naval guns; (4) the inviolability of private property at sea in
times of war; (5) the bombardment of ports, cities, and villages by
naval forces. In October, 1904, at the instance of the
Interparliamentary Union, which, at a conference held in the United
States, and attended by the lawmakers of fifteen different nations,
had reiterated the demand for a second conference of nations, I
issued invitations to all the powers signatory to The Hague
Convention to send delegates to such a conference, and suggested that
it be again held at The Hague. In its note of December 16, 1904, the
United States Government communicated to the representatives of
foreign governments its belief that the conference could be best
arranged under the provisions of the present Hague treaty.

From all the powers acceptance was received, coupled in some cases
with the condition that we should wait until the end of the war then
waging between Russia and Japan. The Emperor of Russia, immediately
after the treaty of peace which so happily terminated this war, in a
note presented to the President on September 13, through Ambassador
Rosen, took the initiative in recommending that the conference be now
called. The United States Government in response expressed its cordial
acquiescence, and stated that it would, as a matter of course, take
part in the new conference and endeavor to further its aims. We
assume that all civilized governments will support the movement, and
that the conference is now an assured fact. This Government will do
everything in its power to secure the success of the conference, to
the end that substantial progress may be made in the cause of
international peace, justice, and good will.

This renders it proper at this time to say something as to the
general attitude of this Government toward peace. More and more war
is coming to be looked upon as in itself a lamentable and evil thing.
A wanton or useless war, or a war of mere aggression--in short, any
war begun or carried on in a conscienceless spirit, is to be
condemned as a peculiarly atrocious crime against all humanity. We
can, however, do nothing of permanent value for peace unless we keep
ever clearly in mind the ethical element which lies at the root of
the problem. Our aim is righteousness. Peace is normally the
hand-maiden of rightousness; but when peace and righteousness
conflict then a great and upright people can never for a moment
hesitate to follow the path which leads toward righteousness, even
though that path also leads to war. There are persons who advocate
peace at any price; there are others who, following a false analogy,
think that because it is no longer necessary in civilized countries
for individuals to protect their rights with a strong hand, it is
therefore unnecessary for nations to be ready to defend their rights.
These persons would do irreparable harm to any nation that adopted
their principles, and even as it is they seriously hamper the cause
which they advocate by tending to render it absurd in the eyes of
sensible and patriotic men. There can be no worse foe of mankind in
general, and of his own country in particular, than the demagogue of
war, the man who in mere folly or to serve his own selfish ends
continually rails at and abuses other nations, who seeks to excite
his countrymen against foreigners on insufficient pretexts, who
excites and inflames a perverse and aggressive national vanity, and
who may on occasions wantonly bring on conflict between his nation
and some other nation. But there are demagogues of peace just as
there are demagogues of war, and in any such movement as this for The
Hague conference it is essential not to be misled by one set of
extremists any more than by the other. Whenever it is possible for a
nation or an individual to work for real peace, assuredly it is
failure of duty not so to strive, but if war is necessary and
righteous then either the man or the nation shrinking from it
forfeits all title to self-respect. We have scant sympathy with the
sentimentalist who dreads oppression less than physical suffering,
who would prefer a shameful peace to the pain and toil sometimes
lamentably necessary in order to secure a righteous peace. As yet
there is only a partial and imperfect analogy between international
law and internal or municipal law, because there is no sanction of
force for executing the former while there is in the case of the
latter. The private citizen is protected in his rights by the law,
because the law rests in the last resort upon force exercised through
the forms of law. A man does not have to defend his rights with his
own hand, because he can call upon the police, upon the sheriff's
posse, upon the militia, or in certain extreme cases upon the army,
to defend him. But there is no such sanction of force for
international law. At present there could be no greater calamity than
for the free peoples, the enlightened, independent, and peace-loving
peoples, to disarm while yet leaving it open to any barbarism or
despotism to remain armed. So long as the world is as unorganized as
now the armies and navies of those peoples who on the whole stand for
justice, offer not only the best, but the only possible, security for
a just peace. For instance, if the United States alone, or in company
only with the other nations that on the whole tend to act justly,
disarmed, we might sometimes avoid bloodshed, but we would cease to
be of weight in securing the peace of justice--the real peace for
which the most law-abiding and high-minded men must at times be
willing to fight. As the world is now, only that nation is equipped
for peace that knows how to fight, and that will not shrink from
fighting if ever the conditions become such that war is demanded in
the name of the highest morality.

So much it is emphatically necessary to say in order both that the
position of the United States may not be misunderstood, and that a
genuine effort to bring nearer the day of the peace of justice among
the nations may not be hampered by a folly which, in striving to
achieve the impossible, would render it hopeless to attempt the
achievement of the practical. But, while recognizing most clearly all
above set forth, it remains our clear duty to strive in every
practicable way to bring nearer the time when the sword shall not be
the arbiter among nations. At present the practical thing to do is to
try to minimize the number of cases in which it must be the arbiter,
and to offer, at least to all civilized powers, some substitute for
war which will be available in at least a considerable number of
instances. Very much can be done through another Hague conference in
this direction, and I most earnestly urge that this Nation do all in
its power to try to further the movement and to make the result of
the decisions of The Hague conference effective. I earnestly hope
that the conference may be able to devise some way to make
arbitration between nations the customary way of settling
international disputes in all save a few classes of cases, which
should themselves be as sharply defined and rigidly limited as the
present governmental and social development of the world will permit.
If possible, there should be a general arbitration treaty negotiated
among all the nations represented at the conference. Neutral rights
and property should be protected at sea as they are protected on
land. There should be an international agreement to this purpose and
a similar agreement defining contraband of war.

During the last century there has been a distinct diminution in the
number of wars between the most civilized nations. International
relations have become closer and the development of The Hague
tribunal is not only a symptom of this growing closeness of
relationship, but is a means by which the growth can be furthered.
Our aim should be from time to time to take such steps as may be
possible toward creating something like an organization of the
civilized nations, because as the world becomes more highly organized
the need for navies and armies will diminish. It is not possible to
secure anything like an immediate disarmament, because it would first
be necessary to settle what peoples are on the whole a menace to the
rest of mankind, and to provide against the disarmament of the rest
being turned into a movement which would really chiefly benefit these
obnoxious peoples; but it may be possible to exercise some check upon
the tendency to swell indefinitely the budgets for military
expenditure. Of course such an effort could succeed only if it did
not attempt to do too much; and if it were undertaken in a spirit of
sanity as far removed as possible from a merely hysterical
pseudo-philanthropy. It is worth while pointing out that since the
end of the insurrection in the Philippines this Nation has shown its
practical faith in the policy of disarmament by reducing its little
army one-third. But disarmament can never be of prime importance;
there is more need to get rid of the causes of war than of the
implements of war.

I have dwelt much on the dangers to be avoided by steering clear of
any mere foolish sentimentality because my wish for peace is so
genuine and earnest; because I have a real and great desire that this
second Hague conference may mark a long stride forward in the
direction of securing the peace of justice throughout the world. No
object is better worthy the attention of enlightened statesmanship
than the establishment of a surer method than now exists of securing
justice as between nations, both for the protection of the little
nations and for the prevention of war between the big nations. To
this aim we should endeavor not only to avert bloodshed, but, above
all, effectively to strengthen the forces of right. The Golden Rule
should be, and as the world grows in morality it will be, the guiding
rule of conduct among nations as among individuals; though the Golden
Rule must not be construed, in fantastic manner, as forbidding the
exercise of the police power. This mighty and free Republic should
ever deal with all other States, great or small, on a basis of high
honor, respecting their rights as jealously as it safeguards its
own.

One of the most effective instruments for peace is the Monroe
Doctrine as it has been and is being gradually developed by this
Nation and accepted by other nations. No other policy could have been
as efficient in promoting peace in the Western Hemisphere and in
giving to each nation thereon the chance to develop along its own
lines. If we had refused to apply the doctrine to changing conditions
it would now be completely outworn, would not meet any of the needs of
the present day, and, indeed, would probably by this time have sunk
into complete oblivion. It is useful at home, and is meeting with
recognition abroad because we have adapted our application of it to
meet the growing and changing needs of the hemisphere. When we
announce a policy such as the Monroe Doctrine we thereby commit
ourselves to the consequences of the policy, and those consequences
from time to time alter. It is out of the question to claim a right
and yet shirk the responsibility for its exercise. Not only we, but
all American republics who are benefited by the existence of the
doctrine, must recognize the obligations each nation is under as
regards foreign peoples no less than its duty to insist upon its own
rights.

That our rights and interests are deeply concerned in the maintenance
of the doctrine is so clear as hardly to need argument. This is
especially true in view of the construction of the Panama Canal. As a
mere matter of self-defense we must exercise a close watch over the
approaches to this canal; and this means that we must be th