The Complete Works. Henry Cabot Lodge
only, or indeed the main, end in view. Our aim should be a policy of construction and not one of destruction. Our aim should not be to punish the men who have made a big corporation successful merely because they have made it big and successful, but to exercise such thoroughgoing supervision and control over them as to insure their business skill being exercised in the interest of the public and not against the public interest. Ultimately, I believe that this control should undoubtedly indirectly or directly extend to dealing with all questions connected with their treatment of their employees, including the wages, the hours of labor, and the like. Not only is the proper treatment of a corporation, from the standpoint of the managers, shareholders, and employees, compatible with securing from that corporation the best standard of public service, but when the effort is wisely made it results in benefit both to the corporation and to the public. The success of Wisconsin in dealing with the corporations within her borders, so as both to do them justice and to exact justice in return from them toward the public, has been signal; and this Nation should adopt a progressive policy in substance akin to the progressive policy not merely formulated in theory but reduced to actual practice with such striking success in Wisconsin.
To sum up, then. It is practically impossible, and, if possible, it would be mischievous and undesirable, to try to break up all combinations merely because they are large and successful, and to put the business of the country back into the middle of the eighteenth century conditions of intense and unregulated competition between small and weak business concerns. Such an effort represents not progressiveness but an unintelligent though doubtless entirely well-meaning toryism. Moreover, the effort to administer a law merely by lawsuits and court decisions is bound to end in signal failure, and meanwhile to be attended with delays and uncertainties, and to put a premium upon legal sharp practice. Such an effort does not adequately punish the guilty, and yet works great harm to the innocent. Moreover, it entirely fails to give the publicity which is one of the best by-products of the system of control by administrative officials; publicity, which is not only good in itself, but furnishes the data for whatever further action may be necessary. We need to formulate immediately and definitely a policy which, in dealing with big corporations that behave themselves and which contain no menace save what is necessarily potential in any corporation which is of great size and very well managed, shall aim not at their destruction but at their regulation and supervision, so that the Government shall control them in such fashion as amply to safeguard the interests of the whole public, including producers, consumers, and wage-workers. This control should, if necessary, be pushed in extreme cases to the point of exercising control over monopoly prices, as rates on railways are now controlled; although this is not a power that should be used when it is possible to avoid it. The law should be clear, unambiguous, certain, so that honest men may not find that unwittingly they have violated it. In short, our aim should be, not to destroy, but effectively and in thoroughgoing fashion to regulate and control, in the public interest, the great instrumentalities of modern business, which it is destructive of the general welfare of the community to destroy, and which nevertheless it is vitally necessary to that general welfare to regulate and control. Competition will remain as a very important factor when once we have destroyed the unfair business methods, the criminal interference with the rights of others, which alone enabled certain swollen combinations to crush out their competitors—and, incidentally, the "conservatives" will do well to remember that these unfair and iniquitous methods by great masters of corporate capital have done more to cause popular discontent with the propertied classes than all the orations of all the Socialist orators in the country put together.
I have spoken above of Senator Davis's admirable address delivered a quarter of a century ago. Senator Davis's one-time partner, Frank B. Kellogg, the Government counsel who did so much to win success for the Government in its prosecutions of the trusts, has recently delivered before the Palimpsest Club of Omaha an excellent address on the subject; Mr. Prouty, of the Inter-State Commerce Commission, has recently, in his speech before the Congregational Club of Brooklyn, dealt with the subject from the constructive side; and in the proceedings of the American Bar Association for 1904 there is an admirable paper on the need of thoroughgoing Federal control over corporations doing an inter-State business, by Professor Horace L. Wilgus, of the University of Michigan. The National Government exercises control over inter-State commerce railways, and it can in similar fashion, through an appropriate governmental body, exercise control over all industrial organizations engaged in inter-State commerce. This control should be exercised, not by the courts, but by an administrative bureau or board such as the Bureau of Corporations or the Inter-State Commerce Commission; for the courts cannot with advantage permanently perform executive and administrative functions.
Appendix B.
THE CONTROL OF CORPORATIONS AND "THE NEW FREEDOM"
In his book "The New Freedom," and in the magazine articles of which it is composed, which appeared just after he had been inaugurated as President, Mr. Woodrow Wilson made an entirely unprovoked attack upon me and upon the Progressive party in connection with what he asserts the policy of that party to be concerning the trusts, and as regards my attitude while President about the trusts.
I am reluctant to say anything whatever about President Wilson at the outset of his Administration unless I can speak of him with praise. I have scrupulously refrained from saying or doing one thing since election that could put the slightest obstacle, even of misinterpretation, in his path. It is to the interest of the country that he should succeed in his office. I cordially wish him success, and I shall cordially support any policy of his that I believe to be in the interests of the people of the United States. But when Mr. Wilson, after being elected President, within the first fortnight after he has been inaugurated into that high office, permits himself to be betrayed into a public misstatement of what I have said, and what I stand for, then he forces me to correct his statements.
Mr. Wilson opens his article by saying that the Progressive "doctrine is that monopoly is inevitable, and that the only course open to the people of the United States is to submit to it." This statement is without one particle of foundation in fact. I challenge him to point out a sentence in the Progressive platform or in any speech of mine which bears him out. I can point him out any number which flatly contradict him. We have never made any such statement as he alleges about monopolies. We have said: "The corporation is an essential part of modern business. The concentration of modern business, in some degree, is both inevitable and necessary for National and international business efficiency." Does Mr. Wilson deny this? Let him answer yes or no, directly. It is easy for a politician detected in a misstatement to take refuge in evasive rhetorical hyperbole. But Mr. Wilson is President of the United States, and as such he is bound to candid utterance on every subject of public interest which he himself has broached. If he disagrees with us, let him be frank and consistent, and recommend to Congress that all corporations be made illegal. Mr. Wilson's whole attack is largely based on a deft but far from ingenuous confounding of what we have said of monopoly, which we propose so far as possible to abolish, and what we have said of big corporations, which we propose to regulate; Mr. Wilson's own vaguely set forth proposals being to attempt the destruction of both in ways that would harm neither. In our platform we use the word "monopoly" but once, and then we speak of it as an abuse of power, coupling it with stock-watering, unfair competition and unfair privileges. Does Mr. Wilson deny this? If he does, then where else will he assert that we speak of monopoly as he says we do? He certainly owes the people of the United States a plain answer to the question. In my speech of acceptance I said: "We favor strengthening the Sherman Law by prohibiting agreements to divide territory or limit output; refusing to sell to customers who buy from business rivals; to sell below cost in certain areas while maintaining higher prices in other places; using the power of transportation to aid or injure special business concerns; and all other unfair trade practices." The platform pledges us to "guard and keep open equally to all, the highways of American commerce." This is the exact negation of monopoly. Unless Mr. Wilson is prepared to show the contrary, surely he is bound in honor to admit frankly that he has been betrayed into a misrepresentation, and to correct it.
Mr. Wilson says that for sixteen years the National Administration has "been virtually under the regulation of the trusts," and that the big business men "have already captured the Government." Such a statement as this might perhaps be pardoned as mere rhetoric in a candidate seeking office—although it is the kind of statement that never under any circumstances