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The issue of government has always been whether individual men and women will have to serve some system of government or economics, or whether a system of government and economics exists to serve individual men and women.

This question has persistently dominated the discussions of government for many generations. On questions relating to these things men have differed, and from time immemorial it is probable that honest men will continue to differ.

The final word belongs to no man; yet we can still believe in change and progress. Democracy, as Meredith Nicholson has called it, is a quest, a never-ending seeking for these things and striving for them. There are many roads to follow. If we take their course we find there are only two general directions in which they lead. The first is toward government for the benefit of the few, the second is toward government for the benefit of the many.

The growth of the national governments of Europe was a struggle for the development of a centralised force in the nation, strong enough to impose peace upon ruling barons. In many instances the victory of the central government, the creation of a strong central government, was a haven of refuge to the individual. The people preferred the great master far away to the exploitation and cruelty of the smaller master near at hand.

But the creators of national government were perforce ruthless men. They were often cruel in their methods, though they did strive steadily toward something that society needed and very much wanted—a strong central State, able to keep the peace, to stamp out civil war, to put the unruly nobleman in his place and to permit the bulk of individuals to live safely.

The man of ruthless force had his place in developing a pioneer country, just as he did in fixing the power of the central government in the development of the nations. Society paid him well for his services toward its development. When the development among the nations of Europe, however, had been completed, ambition and ruthlessness, having served its term, tended to overstep the mark.

There now came a growing feeling that government was conducted for the benefit of the few who thrived unduly at the expense of all. The people sought a balancing—a limiting force. Gradually there came through town councils, trade guilds, national parliaments, by constitutions and popular participation and control, limitations on arbitrary power. Another factor that tended to limit the power of those who ruled was the rise of the ethical conception that a ruler bore a responsibility for the welfare of his subjects. The American colonies were born during this struggle. The American Revolution was a turning point in it. After the Revolution the struggle continued and shaped itself into the public life of this country.

There were those who, because they had seen the confusion which attended the years of war for American independence, surrendered to the belief that popular government was essentially dangerous and essentially unworkable. These thinkers were, generally, honest and we cannot deny that their experience had warranted some measure of fear.

The most brilliant, honest and able exponent of this point of view was Hamilton. He was too impatient of slow-moving methods. Fundamentally, he believed that the safety of the Republic lay in the autocratic strength of its government, that the destiny of individuals was to serve that government and that a great and strong group of central institutions, guided by a small group of able and public-spirited citizens, could best direct all government.

But Jefferson, in the summer of 1776, after drafting the Declaration of Independence, turned his mind to the same problem and took a different view. He did not deceive himself with outward forms. Government with him was a means to an end, not an end in itself; it might be either a refuge and a help or a threat and a danger, depending on the circumstances. We find him carefully analysing the society for which he was to organise a government:

“We have no paupers—the great mass of our population is of labourers, our rich who cannot live without labour, either manual or professional, being few and of moderate wealth. Most of the labouring class possess property, cultivate their own lands, have families and from the demands for their labour are enabled to extract from the rich and the competent such prices as enable them to feed abundantly, clothes above mere decency, to labour moderately and raise their families.”

These people, he considered, had two sets of rights, those of “personal competency” and those involved in acquiring and possessing property. By “personal competency” he meant the right of free thinking, freedom of forming and expressing opinions and freedom of personal living, each man according to his own lights.

To ensure the first set of rights a government must so order its functions as not to interfere with the individual. But even Jefferson realised that the exercise of the property rights must so interfere with the rights of the individual that the government, without whose assistance the property rights could not exist, must intervene, not to destroy individualism, but to protect it.

We are familiar with the great political duel which followed; and how Hamilton and his friends, building toward a dominant, centralised power, were at length defeated in the great election of 1800 by Jefferson’s party. Out of that duel came the two parties, Republican and Democratic, as we know them to-day.

So began, in American political life, the new day, the day of the individual against the system, the day in which individualism was made the great watchword in American life. The happiest of economic conditions made that day long and splendid. On the Western frontier land was substantially free. No one who did not shirk the task of earning a living was entirely without opportunity to do so. Depressions could, and did, come and go; but they could not alter the fundamental fact that most of the people lived partly by selling their labour and partly by extracting their livelihood from the soil, so that starvation and dislocation were practically impossible. At the very worst there was always the possibility of climbing into a covered wagon and moving West, where the untilled prairies afforded a haven for men to whom the East did not provide a place.

So great were our natural resources that we could offer this relief not only to our own people, but to the distressed of all the world. We could invite immigration from Europe and welcome it with open arms.

When a depression came a new section of land was opened in the West. This became our tradition. So even our temporary misfortune served our manifest destiny.

But a new force was released and a new dream created in the middle of the nineteenth century. The force was what is called the industrial revolution, the advance of steam and machinery and the rise of the forerunners of the modern industrial plant. The dream was that of an economic machine, able to raise the standard of living for everyone; to bring luxury within the reach of the humblest; to annihilate distance by steam power and later by electricity, and to release everyone from the drudgery of the heaviest manual toil.

It was to be expected that the force and the dream would necessarily affect government. Heretofore, government had merely been called upon to produce conditions within which people could live happily, labour peacefully and rest secure. Now it was called upon to aid in the consummation of this new dream. There was, however, a shadow over it. To make the dream real required use of the talents of men of tremendous will and tremendous ambition, since in no other way could the problems of financing and engineering and new development be met.

So manifest were the advantages of the machine age, however, that the United States fearlessly, cheerfully and, I think, rightly accepted the bitter with the sweet. It was thought that no price was too high for the advantages which we could draw from a finished industrial system.

The history of the last half-century is accordingly in large measure a history of financial titans, whose methods were not scrutinised with too much care and who were honoured in proportion as they produced the results, irrespective of the means they used. The financiers who pushed the railways to the Pacific, for example, were always ruthless, often wasteful and frequently corrupt, but they did build railways and we have them to-day. It has been estimated that the American investor paid for the American railway system more than three times over in the process, but despite this fact the net advantage was to the United States.

As long as we had free land, as long as population was growing by leaps and bounds, as long as our industrial plants were insufficient to supply our own needs, society chose to give the ambitious man free play and unlimited reward, provided only that he produced the economic plant so much desired.

During the period of expansion there was equal economic opportunity for all, and the business of government was not to interfere but to assist in the development of industry. This was done at the request of the business men themselves. The tariff was originally imposed for the purpose of “fostering our infant industry,” a phrase which the older among our readers will remember as a political issue not so long ago.

The railways were subsidised, sometimes by grants of money, oftener by grants of land. Some of the most valuable oil lands in the United States were granted to assist the financing of the railway which pushed through the South-west. A nascent merchant marine was assisted by grants of money or by mail subsidies, so that our steam shipping might ply the seven seas. . . .

We do not want the government in business. But we must realise the implications of the past. For while it has been American doctrine that the government must not go into business in competition with private enterprises, still it has been traditional for business to urgently ask the government to put at private disposal all kinds of government assistance.

The same man who says he does not want to see the government interfere in business—and he means it and has plenty of good reasons for saying so—is the first to go to Washington to ask the government for a prohibitory tariff on his product. When things get just bad enough—as they did in 1930—he will go with equal speed to the United States Government and ask for a loan. And the Reconstruction Finance Corporation is the outcome of that.

Each group has sought protection from the government for its own special interests without realising that the function of government must be to favour no small group at the expense of its duty to protect the rights of personal freedom and of private property of all its citizens.

In retrospect we can see now that the turn of the tide came with the turn of the century. We were reaching our last frontier then; there was no more free land and our industrial combinations had become great uncontrolled and irresponsible units of power within the State.

Clear-sighted men saw with fear the danger that opportunity would no longer be equal; that the growing corporation, like the feudal baron of old, might threaten the economic freedom of individuals to earn a living. In that hour our anti-trust laws were born.

The cry was raised against the great corporations. Theodore Roosevelt, the first great Republican Progressive, fought a Presidential campaign on the issues of “trust-busting” and talked freely about malefactors of great wealth. If the government had a policy it was rather to turn the clock back, to destroy the large combinations and to return to the time when every man owned his individual small business. This was impossible. Theodore Roosevelt, abandoning his idea of “trust-busting,” was forced to work out a difference between “good” trusts and “bad” trusts. The Supreme Court set forth the famous “rule of reason” by which it seems to have meant that a concentration of industrial power was permissible if the method by which it got its power and the use it made of that power were reasonable.

The situation was seen more clearly by Woodrow Wilson, elected in 1912. Where Jefferson had feared the encroachment of political power on the lives of individuals, Wilson knew that the new power was financial. He saw, in the highly centralised economic system, the despot of the twentieth century, on whom great masses of individuals relied for their safety and their livelihood, and whose irresponsibility and greed (if it were not controlled) would reduce them to starvation and penury.

The concentration of financial power had not proceeded as far in 1912 as it has to-day, but it had grown far enough for Wilson to realise fully its implications. It is interesting now to read his speeches. What is called “radical” to-day (and I have reason to know whereof I speak) is mild compared to Wilson’s Presidential campaign.

“No man can deny,” he said, “that the lines of endeavour have more and more narrowed and stiffened; no man who knows anything about the development of industry in this country can have failed to observe that larger kinds of credit are more and more difficult to obtain unless you obtain them upon terms of uniting your efforts with those who already control the industry of the country, and nobody can fail to observe that every man who tries to set himself up in competition with any process of manufacture which has taken place under the control of large combinations of capital will presently find himself either squeezed out or obliged to sell and allow himself to be absorbed.”

Had there been no World War—had Wilson been able to devote eight years to domestic instead of international affairs—we might have had a wholly different situation at the present time. However, the then distant roar of European cannon, growing ever louder, forced him to abandon the study of this issue. The problem he saw so clearly is left with us as a legacy; and no one of us of whatever political party can deny that it is a matter of grave concern to the government.

Even a glance at the situation to-day only too clearly indicates that equality of opportunity as we have known it no longer exists. Our industrial plant is built. That hardly requires more proof than we see about us constantly. Nevertheless, let us look at the recent history and the simple economics, the kind of economics that you and I and the average man and woman talk.

In the years before 1929 we know that this country had completed a vast cycle of building and inflation; for ten years we expanded on the theory of repairing the wastes of the war, but actually expanded far beyond that, and also far beyond our natural and normal growth. During that time the cold figures of finance prove there was little or no drop in the prices the consumer had to pay, although those same figures prove that the cost of production fell very greatly; corporate profit resulting from this period was enormous; at the same time little of the profit was devoted to the reduction of prices. The consumer was forgotten. Little went into increased wages; the worker was forgotten, and by no means an adequate proportion was paid out in dividends—the stockholder was forgotten.

Incidentally, very little was taken by taxation to the beneficent government of those days.

What was the result? Enormous corporate surpluses piled up—the most stupendous in history. These surpluses went chiefly in two directions: first, into new and unnecessary plants, which now stand stark and idle; second, into the call money market of Wall Street, either directly by the corporations or indirectly through the banks.

Then came the crash. Surpluses invested in unnecessary plants became idle. Men lost their jobs; purchasing power dried up; banks became frightened and started calling loans. Those who had money were afraid to part with it. Credit contracted. Industry stopped. Commerce declined, and unemployment mounted.

Translate that within your own knowledge into human terms. See how the events of the past three years have come home to specific groups of people. First, the group dependent upon industry; second, the group dependent upon agriculture; third, that group made up in large part of members of the first two—the “small investors and depositors.” Remember that the strongest possible tie between the first two groups, agriculture and industry, is the fact that the savings and to a degree the security of both are tied together in that third group—the credit structure of the nation. We know what has happened to that.

But go back again to the main fact before us to-day—that equality of opportunity, as we have known it, no longer exists. Pick up the next tragically obvious economic question—where is opportunity? We must dismiss that historic one which has heretofore been our salvation.

Our last frontier has long since been reached, and there is practically no more free land. More than half our people do not live on farms or on lands and cannot derive a living by cultivating their own property. There is no safety valve in the form of Western prairie to which those thrown out of work by the economic machines can go for a new start. We are not able to invite the immigrants from Europe to share our endless plenty. We are now providing a drab living for our own people.

Our system of constantly rising tariffs has at last reacted against us to the point of closing our Canadian frontier on the north, our European markets on the east, many of our Latin-American markets to the south and a large proportion of our Pacific markets on the west, through the retaliatory tariffs of these countries. It has forced many of our great industrial institutions, who exported their surplus production to such countries, to establish plants in those countries, within the tariff walls. This has resulted in the reduction of the operation of their American plants and of opportunity for employment.

Opportunity in business has further narrowed since Wilson’s time, just as freedom to farm has ceased. It is still true that men can start small enterprises, trusting to their native shrewdness and ability to keep abreast of competitors; but area after area has been pre-empted altogether by the great corporations, and even in the fields which still have no great concerns the small man starts under a handicap. The unfeeling statistics of the past three decades show that the independent business man is running a losing race. Perhaps he is forced to the wall; perhaps he cannot command credit; perhaps he is “squeezed out,” in Wilson’s words, by highly organised corporate competitors, as your corner grocery man can tell you.

Recently a careful study was made of the concentration of business in the United States. It showed that our economic life was dominated by some six hundred-odd corporations, who controlled two-thirds of American industry. Ten million small business men divided the other third.

More striking still, it appeared that, if the process of concentration goes on at the same rate, at the end of another century we shall have all American industry controlled by a dozen corporations and run by perhaps a hundred men. Put plainly, we are steering a steady course toward economic oligarchy, if we are not there already.

Clearly all this calls for a reappraisal of values. A mere builder of more industrial plants, a creator of more railway systems, an organiser of more corporations, is as likely to be a danger as a help. The day of the great promoter or the financial titan, to whom we granted everything if only he would build or develop, is over.

Our task now is not discovery or exploitation of natural resources or necessarily of producing more goods. It is the soberer, less dramatic business of administering resources and plants already in hand, of seeking to re-establish foreign markets for our surplus production, of meeting the problem of under-consumption, or adjusting production to consumption, of distributing wealth and products more equitably, of adapting existing economic organisation to the service of the people.

Just as in older times the central government was first a haven of refuge and then a threat, so now, in a closer economic system the central and ambitious financial unit is no longer a servant of national desire, but a danger. I would draw the parallel one step further. We do not think, because national government became a threat in the eighteenth century, that therefore we should abandon the principle of national government.

Nor to-day should we abandon the principle of strong economic units called corporations merely because their power is susceptible to easy abuse. In other times we dealt with the problem of an unduly ambitious central government by modifying it gradually into a constitutional democratic government. So to-day we are modifying and controlling our economic units.

As I see it, the task of government in its relation to business is to assist the development of an economic declaration of rights, an economic constitutional order. This is the common task of statesmen and business men. It is the minimum requirement of a more permanently safe order of society. Happily, the times indicate that to create such an order is not only the proper policy of government, but is the only line of safety for our economic structure as well.

We know now that these economic units cannot exist unless prosperity is uniform—that is, unless purchasing power is well distributed throughout every group in the nation. That is why even the most selfish of corporations, for its own interest, would be glad to see wages restored and unemployment aided, and to bring the farmer back to his accustomed level of prosperity, and to assure a permanent safety for both groups. That is why some enlightened industries endeavour to limit the freedom of action of each man and business group within the industry in the common interest of all. That is why business men everywhere are asking for a form of organisation which will bring the scheme of things into balance, even though it may in some measure qualify the freedom of action of individual units within the business.

I think that everyone who has actually entered the economic struggle—which means everyone who was not born to safe wealth—knows in his own experience and his own life that we now have to apply the earlier concepts of American government to the conditions of to-day. The Declaration of Independence discusses the problem of government in terms of a contract. Government is a relation of give and take—a contract, perforce, if we would follow the thinking out of which it grew. Under such a contract rulers were accorded power, and the people consented to that power on consideration that they be accorded certain rights. The task of statesmanship has always been the re-definition of these rights in terms of a changing and growing social order. New conditions impose new requirements upon government and those who conduct government.

The terms of the contract are as old as the Republic and as new as the new economic order. Every man has a right to life, and this means that he has also a right to make a comfortable living. He may by sloth or crime decline to exercise that right, but it must not be denied him. Our government, formal and informal, political and economic, owes to every man an avenue to possess himself of sufficient for his needs through his own work. Every man has a right to his own property, which means a right to be assured to the fullest extent attainable, in the safety of his earnings. By no other means can men carry the burdens of those parts of life which in the nature of things afford no change of labour—childhood, sickness, old age. In all thought of property, this right is paramount; all other property rights must yield to it. If, in accordance with this principle, we must restrict the operations of the speculator, the manipulator, even the financier, I believe we must accept the restriction as needful, not to hamper individualism, but to protect it.

The final term of the high contract was for liberty and the pursuit of happiness. We have learned a great deal of both in the past century. We know that individual liberty and individual happiness mean nothing unless both are ordered in the sense that one man’s meat is not another man’s poison. We know that the old “rights of personal competency”—the right to read, to think, to speak, to choose and live a mode of life—must be respected at all hazards. We know that liberty to do anything which deprives others of those elemental rights is outside the protection of any compact, and that government in this regard is the maintenance of the balance of justice for all.

We shall fulfil our present-day governmental obligations, as we fulfilled the obligations of the apparent Utopia which Jefferson imagined for us in 1776 and which Jefferson, Theodore Roosevelt and Wilson sought to bring to realisation. We must do so lest a rising tide of misery, engendered by our common failure, engulf us all.