in such a way as to prevent the misuse of these
powers. Corporations, and especially combinations
of corporations, should be managed under public



6io Presidential Addresses

regulation. Experience has shown that under our
system of government the necessary supervision can
not be obtained by State action. It must therefore
be achieved by national action. Our aim is not to
do away with corporations; on the contrary, these
big aggregations are an inevitable development of
modern industrialism, and the effort to destroy them
would be futile unless accomplished in ways that
would work the utmost mischief to the entire body
politic. We can do nothing of good in the way of
regulating and supervising these corporations until
we fix clearly in our minds that we are not attacking
the corporations, but endeavoring to do away with
any evil in them. We are not hostile to them;
we are merely determined that they shall be so
handled as to subserve the public good. We draw
the line against misconduct, not against wealth. The
capitalist who, alone or in conjunction with his fel-
lows, performs some great industrial feat by which
he wins money is a welldoer, not a wrongdoer, pro-
vided only he works in proper and legitimate lines.
We wish to favor such a man when he does well.
We wish to supervise and control his actions only
to prevent him from doing ill. Publicity can do no
harm to the honest corporation ; and we need not be
overtender about sparing the dishonest corporation.
In curbing and regulating the combinations of
ca])ital which are or may become injurious to the
public we must be careful not to stop the great
enterprises which have legitimately reduced the cost
of production, not to abandon the place which our



And State Papers 6ii

country has won in the leadership of the interna-
tional industrial world, not to strike down wealth
with the result of closing factories and mines, of
turning the wage-worker idle in the streets and leav-
ing the farmer without a market for what he grows.
Insistence upon the impossible means delay in achiev-
ing the possible, exactly as, on the other hand, the
stubborn defence alike of what is good and what
is bad in the existing system, the resolute effort to
obstruct any attempt at betterment, betrays blindness
to the historic truth that wise evolution is the sure
safeguard against revolution.

No more important subject can come before the
Congress than this of the regulation of interstate
business. This country can not afford to sit supine
on the plea that under our peculiar system of gov-
ernment we are helpless in the presence of the new
conditions, and unable to grapple with them or to
cut out whatever of evil has arisen in connection
with them. The power of the Congress to regulate
interstate commerce is an absolute and unqualified
grant, and without limitations other than those pre-
scribed by the Constitution. The Congress has con-
stituted authority to make all laws necessary and
proper for executing this power, and I am satisfied
that this power has not been exhausted by any legis-
lation now on the statute books. It is evident, there-
fore, that evils restrictive of commercial freedom
and entailing restraint upon national commerce fall
within the regulative power of the Congress, and
that a wise and reasonable law would be a necessary



6i2 Presidential Addresses

and proper exercise of Congressional authority to the
end that such evils should be eradicated.

I believe that monopolies, unjust discriminations,
which prevent or cripple competition, fraudulent
overcapitalization, and other evils in trust organiza-
tions and practices which injuriously affect interstate
trade can be prevented under the power of the Con-
gress to "regulate commerce with foreign nations
and among the several States" through regulations
and requirements operating directly upon such com-
merce, the instrumentalities thereof, and those en-
gaged therein.

I earnestly recommend this subject to the con-
sideration of the Congress with a view to the pas-
sage of a law reasonable in its provisions and ef-
fective in its operations, upon which the questions
can be finally adjudicated that now raise doubts as to
the necessity of constitutional amendment. If it
prove impossible to accomplish the purposes above
set forth by such a law, then, assuredly, we should
not shrink from amending the Constitution so as
to secure beyond peradventure the power sought.

The Congress has not heretofore made any appro-
priation for the better enforcement of the anti-trust
law as it now stands. Very much has been done
by the DqDartment of Justice in securing the en-
forcement of this law, but much more could be done
if the Congress would make a special appropriation
for this purpose, to be expended under the direction
of the Attorney-General.

One proposition advocated has been the reduction



And State Papers 613

of the tariff as a means of reaching the evils of the
trusts which fall within the category I have de-
scribed. Not merely would this be wholly ineffec-
tive, but the diversion of our efforts in such a di-
rection would mean the abandonment of all intelli-
gent attempt to do away with these evils. Many of
the largest corporations, many of those which should
certainly be included in any proper scheme of regu-
lation, would not be affected in the slightest degree
by a change in the tariff, save as such change inter-
fered with the general prosperity of the country.
The only relation of the tariff to big corporations as
a whole is that the tariff makes manufactures profit-
able, and the tariff remedy proposed would be in
effect simply to make manufactures unprofitable. To
remove the tariff as a punitive measure directed
against trusts would inevitably result in ruin to the
weaker competitors who are struggling against
them. Our aim should be not by unwise tariff
changes to give foreign products the advantage over
domestic products, but by proper regulation to give
domestic competition a fair chance ; and this end
can not be reached by any tariff changes which
would affect unfavorably all domestic competitors,
good and bad alike. The question of regulation of
the trusts stands apart from the question of tariff
revision.

Stability of economic policy must always be the
prime economic need of this country. This stability
should not be fossilization. The country has acqui-
esced in the wisdom of the protective-tariff principle.



6i4 Presidential Addresses

It is exceedingly undesirable that this system should
be destroyed or that there should be violent and radi-
cal changes therein. Our past experience shows
that great prosperity in this country has always
come under a protective tariff and that the country
can not prosper under fitful tariff changes at short
intervals. Moreover, if the tariff laws as a whole
work well, and if business has prospered under them
and is prospering, it is better to endure for a time
slight inconveniences and inequalities in some sched-
ules than to upset business by too quick and too radi-
cal changes. It is most earnestly to be wished that
we could treat the tariff from the standpoint solely
of our business needs. It is, perhaps, too much to
hope that partisanship may be entirely excluded from
consideration of the subject, but at least it can be
made secondary to the business interests of the
country — that is, to the interests of our people as a
whole. Unquestionably these business interests will
best be served if together with fixity of principle as
regards the tariff we combine a system which will
permit us from time to time to make the necessary
reapplication of the principle to the shifting national
needs. We must take scrupulous care that the re-
application shall be made in such a way that it will
not amount to a dislocation of our system, the
mere threat of which (not to speak of the perform-
ance) would produce paralysis in the business ener-
gies of the community. The first consideration in
making these changes would, of course, be to pre-
serve the principle which underlies our whole tariff



And State Papers 615

system — that is, the principle of putting American
business interests at least on a full equality with in-
terests abroad, and of always allowing a sufficient
rate of duty to more than cover the difference be-
tween the labor cost here and abroad. The well-
being of the wage-worker, like the well-being of the
tiller of the soil, should be treated as an essential in
shaping our whole economic policy. There must
never be any change which will jeopardize the stand-
ard of comfort, the standard of wages of the Ameri-
can wage-worker.

One way in which the readjustment sought can
be reached is by reciprocity treaties. It is greatly to
be desired that such treaties may be adopted. They
can be used to widen our markets and to give a
greater field for the activities of our producers on
the one hand, and on the other hand to secure in
practical shape the lowering of duties when they
are no longer needed for protection among our own
people, or when the minimum of damage done may
be disregarded for the sake of the maximum of
good accomplished. If it prove impossible to ratify
the pending treaties, and if there seem to be no
warrant for the endeavor to execute others, or to
amend the pending treaties so that they can be rati-
fied, then the same end — to secure reciprocity —
should be met by direct legislation.

Wherever the tariff conditions are such that a
needed change can not with advantage be made by
the application of the reciprocity idea, then it can
be made outright by a lowering of duties on a given



6i6 Presidential Addresses

product. If possible, such change should be made
only after the fullest consideration by practical ex-
perts, who should approach the subject from a busi-
ness standpoint, having in view both the particular
interests affected and the commercial well-being of
the people as a whole. The machinery for providing
such careful investigation can readily be supplied.
The executive department has already at its dis-
posal methods of collecting facts and figures : and if
the Congress desires additional consideration to that
which will be given the subject by its own com-
mittees, then a commission of business experts can
be appointed whose duty it should be to recommend
action by the Congress after a deliberate and scien-
tific examination of the various schedules as they
are affected by the changed and changing conditions.
The unhurried and unbiased report of this com-
mission would show what changes should be made
in the various schedules, and how far these changes
could go without also changing the great prosperity
which this country is now enjoying, or upsetting its
fixed economic policy.

The cases in which the tariff can produce a mo-
nopoly are so few as to constitute an inconsiderable
factor in the question; but of course if in any case
it be found that a given rate of duty does promote
a monopoly which works ill, no protectionist would
object to such reduction of the duty as would equal-
ize competition.

Tn my judgment, the tariff on anthracite coal
should be removed, and anthracite put actually,



And State Papers 617

where it now is nominally, on the free list. This
would have no effect at all save in crises; but in
crises it might be of service to the people.

Interest rates are a- potent factor in business activ-
ity, 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 com-
merce, and upon them should be placed, as far as
practicable, the burden of furnishing and maintain-
ing 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 al-
ways available for the business interests of the
country.

It would be both unwise and unnecessary at this
time to attempt to reconstruct our financial system,
which has been the growth of a century ; but some
additional legislation is, I think, desirable. The
mere outline of any plan sufficiently comprehensive
to meet these requirements would transgress the
appropriate limits of this communication. It is sug-
gested, however, that all future legislation on the
subject should be with the view of encouraging the
use of such instrumentalities as will automatically
supply every legitimate demand of productive in-

10— Vol. XIV



6i8 Presidential Addresses

dtistries and of commerce, not only in the amount,
but in the character of circulation ; and of making
all kinds of money interchangeable, and, at the will
of the holder, convertible into the established gold
standard.

I again call your attention to the need of passing
a proper immigration law, covering the points out-
lined in my Message to you at the first session of
the present Congress; substantially such a bill has
already passed the House.

How to secure fair treatment alike for labor and
for capital, how to hold in check the unscrupulous
man, whether employer or employee, without weak-
ening individual initiative, without hampering and
cramping the industrial development of the country,
is a problem fraught with great difficulties and one
which it is of the highest importance to solve on
lines of sanity and far-sighted common-sense as well
as of devotion to the right. This is an era of federa-
tion and combination. Exactly as business men find
they must often work through corporations, and as
it is a constant tendency of these corporations to
grow larger, so it is often necessary for laboring
men to work in federations, and these have become
important factors of modern industrial life. Both
kinds of federation, capitalistic and labor, can do
much good, and as a necessary corollary they can
both do evil. Opposition to each kind of organiza-
tion should take the form of opposition to whatever
is bad in the conduct of any given corporation or un-



And State Papers 619

ion — not of attacks upon corporations as such nor up-
on unions as such ; for some of the most far-reaching
beneficent work for our people has been accomphshed
through both corporations and unions. Each must
refrain from arbitrary or tyrannous interference
with the rights of others. Organized capital and
organized labor alike should remember that in the
long run the interest of each must be brought into
harmony with the interest of the general public ; and
the conduct of each must conform to the fundamen-
tal rules of obedience to the law, of individual free-
dom, and of justice and fair dealing toward all. Each
should remember that in addition to power it must
strive after the realization of healthy, lofty, and gen-
erous ideals. Every employer, ever wage-worker,
must be guaranteed his liberty and his right to do as
he likes with his property or his labor so long as he
does not infringe upon the rights of others. It is
of the highest importance that employer and em-
ployee alike should endeavor to appreciate each the
viewpoint of the other and the sure disaster that will
come upon both in the long run if either grows to
take as habitual an attitude of sour hostility and dis-
trust toward the other. Few people deserve better
of the country than those representatives both of
capital and labor — and there are many such — who
work continually to bring about a good understand-
ing of this kind, based upon wisdom and upon broad
and kindly sympathy between employers and em-
ployed. Above all, we need to remember that any
kind of class animosity in the political world is, if



620 Presidential Addresses

possible, even more wicked, even more destructive
to national welfare, than sectional, race, or religious
animosity. We can get good government only upon
condition that we keep true to the principles upon
which this Nation was founded, and judge each man
not as a part of a class, but upon his individual mer-
its. All that we have a right to ask of any man,
rich or poor, whatever his creed, his occupation, his
birthplace, or his residence, is that he shall act well
and honorably by his neighbor and by his country.
We are neither for the rich man as such nor for the
poor man as such : we are for the upright man, rich
or poor. So far as the constitutional powers of the
National Government touch these matters of general
and vital moment to the Nation, they should be exer-
cised in conformity with the principles above set
forth.

It is earnestly hoped that a secretary of commerce
may be created, with a seat in the Cabinet. The
rapid multiplication of questions affecting labor and
capital, the growth and complexity of the organiza-
tions through which both labor and capital now find
expression, the steady tendency toward the employ-
ment of capital in huge corporations, and the
wonderful strides of this country toward leadership
in the international business world justify an urgent
demand for the creation of such a position. Sub-
stantially all the leading commercial bodies in this
country have united in requesting its creation. It
is desirable that some such measure as that which



And State Papers 621

has already passed the Senate be enacted into law.
The creation of such a department would in itself
be an advance toward dealing with and exercising
supervision over the whole subject of the great
corporations doing an interstate business; and with
this end in view, the Congress should endow the
department with large powers, which could be in-
creased as experience might show the need.

I hope soon to submit to the Senate a reciprocity
treaty with Cuba. On May 20 last the United
States kept its promise to the island by formally
vacating Cuban soil and turning Cuba over to those
whom her own people had chosen as the first officials
of the new republic.

Cuba lies at our doors, and whatever affects her
for good or for ill affects us also. So much have
our people felt this that in the Piatt x\mendment we
definitely took the ground that Cuba must hereafter
have closer political relations with us than with any
other power. Thus in a sense Cuba has become a
part of our international political system. This
makes it necessary that in return she should be given
some of the benefits of becoming part of our eco-
nomic system. It is, from our own standpoint, a
short-sighted and mischievous policy to fail to
recognize this need. Moreover, it is unworthy of
a mighty and generous nation, itself the greatest
and most successful republic in history, to refuse to
stretch out a helping hand to a young and weak
sister republic just entering upon its career of inde-



622 Presidential Addresses

pendence. We should always fearlessly insist uix)n
our rights in the face of the strong, and we should
with ungrudging hand do our generous duty by the
weak. I urge the adoption of reciprocity with Cuba
not only because it is eminently for our own inter-
ests to control the Cuban market and by every means
to foster our supremacy in the tropical lands and
waters south of us, but also because we, of the giant
republic of the north, should make all our sister na-
tions of the American Continent feel that whenever
they will permit it we desire to show ourselves dis-
interestedly and effectively their friend.

A convention with Great Britain has been con-
cluded, which will be at once laid before the Senate
for ratification, providing for reciprocal trade ar-
rangements between the United States and New-
foundland on substantially the lines of the conven-
tion formerly negotiated by the Secretary of State,
Mr. Blaine. I believe reciprocal trade relations will
be greatly to the advantage of both countries.

As civilization grows warfare becomes less and
less the normal condition of foreign relations. The
last century has seen a marked diminution of wars
between civilized powers; wars with uncivilized
powers are largely mere matters of international
police duty, essential for the welfare of the world.
Wlierever possible, arbitration or some similar
method should be employed in lieu of war to settle
difficulties between civilized nations, although as yet



And State Papers 623

the world has not progressed sufficiently to render
it possible, or necessarily desirable, to invoke arbi-
tration in every case. The formation of the inter-
national tribunal which sits at The Hague is an
event of good omen from which great consequences
for the welfare of all mankind may flow. It is
far better, where possible, to invoke such a perma-
nent tribunal than to create special arbitrators for
a given purpose.

It is a matter of sincere congratulation to our
country that the United States and Mexico should
have been the first to use the good offices of The
Hague Court. This was done last summer with
most satisfactory results in the case of a claim at
issue between us and our sister republic. It is
earnestly to be hoped that this first case will serve
as a precedent for others, in which not only the
United States but foreign nations may take ad-
vantage of the machinery already in existence at
The Hague.

I commend to the favorable consideration of the
Congress the Hawaiian fire claims, which were the
subject of careful investigation during the last
session.

The Congress has wisely provided that we shall
build at once an Isthmian Canal, if possible at Pana-
ma. The Attorney-General reports that we can un-
doubtedly acquire good title from the French Pana-
ma Canal Company. Negotiations are now pending
with Colombia to secure her assent to our building



624 Presidential Addresses

the canal. This canal will be one of the greatest
engineering feats of the twentieth century ; a greater
engineering feat than has yet been accomplished
during the history of mankind. The work should
be carried out as a continuing policy without re-
gard to change of Administration ; and it should
be begun under circumstances which will make it
a matter of pride for all Administrations to continue
the policy.

The canal will be of great benefit to America,
and of importance to all the world. It will be of
advantage to us industrially and also as improving
our military position. It will be of advantage to
the countries of tropical America. It is earnestly
to be hoped that all of these countries will do as
some of them have already done with signal suc-
cess, and will invite to their shores commerce and
improve their material conditions by recognizing
that stability and order are the prerequisites of suc-
cessful development. No independent nation in
America need have the slightest fear of aggression
from the United States. It behooves each one to
maintain order within its own borders and to dis-
charge its just obligations to foreigners. When
this is done they can rest assured that, be they strong
or weak, they have nothing to dread from outside
interference. More and more the increasing inter-
dependence and complexity of international, politi-
cal, and economic relations render it incumbent on
all civilized and orderly powers to insist on the
proper policing of the world.



And State Papers 625

During the fall of 1901 a communication was
addressed to the Secretary of State, asking whether
permission would be granted by the President to
a corporation to lay a cable from a point on the
California coast to the Philippine Islands by way of
Hawaii, A statement of conditions or terms upon
which such corporation would undertake to lay and
operate a cable was volunteered.

Inasmuch as the Congress was shortly to convene,
and Pacific-cable legislation had been the subject of
consideration by the Congress for several years, it
seemdd to me wise to defer action upon the ap-
plication until the Congress had first an opportunity
to act. The Congress adjourned without taking
any action, leaving the matter in exactly the same
condition in which it stood when the Congress con-
vened.

Meanwhile it appears that the Commercial Pacific
Cable Company had promptly proceeded with prep-
arations for laying its cable. It also made applica-
tion to the President for access to and use of
soundings taken by the U. S. S, Nero, for the
purpose of discovering a practicable route for a
trans-Pacific cable, the company urging that with
access to these soundings it could complete its cable