NATIONAL CONTROL OF CORPORATIONS[49]
Theodore Roosevelt
When this government was founded there were no great individual or corporate fortunes, and commerce and industry were being carried on very much as they had been carried on in the days when Nineveh and Babylon stood in the Mesopotamian Valley. Sails, oars, wheels—those were the instruments of commerce. The pack train, the wagon train, the row boat, the sailing craft—those were the methods of commerce. Everything has been revolutionized in the business world since then, and the progress of civilization from being a dribble has become a torrent. There was no particular need at that time of bothering as to whether the nation or the state had control of corporations. They were easy to control. Now, however, the exact reverse is the case. And remember when I say corporations I do not mean merely trusts, technically so-called, merely combinations of corporations, or corporations under certain peculiar conditions. For instance, some time ago the Attorney General took action against a certain trust. There was considerable discussion as to whether the trust aimed at would not seek to get out from under the law by becoming a single corporation. Now I want laws that will enable us to deal with any evil no matter what shape it takes.
I want to see the government able to get at it definitely, so that the action of the government cannot be evaded by any turning within or without federal or state statutes. At present we have really no efficient control over a big corporation which does business in more than one state. Frequently the corporation has nothing whatever to do with the state in which it is incorporated except to get incorporated; and all its business may be done in entirely different communities—communities which may object very much to the methods of incorporation in the state named. I do not believe that you can get any action by any state, I do not believe it practicable to get action by all the states that will give us satisfactory control of the trusts, of big corporations; and the result is at present that we have a great, powerful, artificial creation which has no creator to which it is responsible. The creator creates it and then it goes and operates somewhere else, and there is no interest on the part of the creator to deal with it. It does not do anything where the creator has power; it operates entirely outside of the creator's jurisdiction.
It is, of course, a mere truism to say that the corporation is the creature of the state, that the state is sovereign. There should be a real and not a nominal sovereign, some one sovereign to which the corporation shall be really and not nominally responsible. At present if we pass laws nobody can tell whether they will amount to anything. That has two bad effects. In the first place, the corporation becomes indifferent to the lawmaking body; and in the next place, the lawmaking body gets into that most pernicious custom of passing a law not with reference to what will be done under it, but with reference to its effects upon the opinions of the voters. That is a bad thing. When any body of lawmakers passes a law, not simply with reference to whether that law will do good or ill, but with the knowledge that not much will come of it, and yet that perhaps the people as a whole will like to see it on the statute books—it does not speak well for the lawmakers, and it does not speak well for the people either. What I hope to see is power given to the national legislature which shall make the control real. It would be an excellent thing if you could have all the states act on somewhat similar lines so that you would make it unnecessary for the national government to act; but all of you know perfectly well that the states will not act on similar lines. No advance whatever has been made in the direction of intelligent dealing by the states as a collective body with those great corporations.
I am not advocating anything very revolutionary. I am advocating action to prevent anything revolutionary. Now if we can get adequate control by the nation of these great corporations, then we can pass legislation which will give us the power of regulation and supervision over them. If the nation had that power, I should advocate as strenuously as I know how that the power should be exercised with extreme caution and self-restraint.
FOOTNOTE:
[49] From a speech delivered at Symphony Hall, Boston, August 25, 1902.