St. Louis, Missouri
November 2, 1928
I propose tonight to discuss the constructive side of government. I propose to outline something of the principles which must underlie the relation of government to the constructive tasks which confront us. A few nights ago in New York I had occasion to discuss these principles in application to matters which the government should not undertake. Tonight I discuss them in connection with matters which the government should and must undertake. Government is only in part a negative function. Its purpose is not merely to stand as a watchman over what is forbidden; government must be a constructive force.
The Unique American System
Our country has a political, social and economic system that is peculiarly our own. It is the American system. It grew out of our revolt from European systems and has ripened with our experience and our ideals. We have seldom tried to express it or define it. It has been the moving force of our progress. It has brought us into the leadership of the world.
The founders of our republic under Divine inspiration set up not alone a great political system of self-government, but they set up also a revolutionary social system in the relation of men toward men.
Our political system is unique in the world. It is unique because of its decentralization of self-government and its checks and balances which safeguard ordered liberty and freedom to each individual. Our social system is unique in the world. It is unique because it is founded not only upon the ideal that all men are created equal and are equal before the law, but also upon the ideal that there shall be equal opportunity among men. We have no frozen classes or stratification of caste in our country. We allow nothing to prevent the ride of every boy and girl to the position to which their initiative and talents will carry them. We have no titles except the descriptions of our jobs.
From our unique political and social ideals we are evolving a unique economic system. We have discarded the original European theory that there is a class struggle between the capital of the few and the labor of the many. Under that theory it was held that labor was a commodity and the laborer in general could never rise far above bare existence, for if he did so the supply of labor would increase and thus constantly pull him back into the cesspool of inevitable poverty.
We Americans have proved this conception wrong. By what amounts to a revolution in ideas and methods, we have developed a new economic system. The dominating idea of that system is that labor on the one hand and capital, which in America means the savings of the people, on the other hand, by joint effort can steadily increase the efficiency of production and distribution. In other words, we find that by join effort we can steadily increase the production of goods by each individual and we can at the same time decrease the cost of goods. As we increase the volume of goods, we have more to divide, and we thereby steadily lift the standard of living of the whole people. We have proved this to be true, and by this proof we have laid away the old theory of inevitable poverty alongside the theory of human slavery.
These three revolutionary American ideas, political, social, and economic, are interlocked and intermeshed. They are dominated and cemented by the ideal and practice of equal opportunity. They constitute one great system protecting our individualism and stimulating initiative and enterprise in our people. This is the American system. One part of it cannot be destroyed without undermining the whole. For us to adopt other social conceptions, such as federal or state government entry into commercial business in competition with its citizens, would undermine initiative and enterprise and destroy the very foundations of freedom and progress upon which the American system is built…
There are three potential fields in which the principles and impulses of our American system require that government take constructive action. They comprise those activities which no local community can itself assume and which the individual initiative and enterprise of our people cannot wholly compass. They comprise leadership of the government to solve many difficult problems.
The first of these fields includes the great under-takings in public works such as inland waterways, flood control, reclamation, highways, and public buildings.
The second of these is necessary interest and activity of the Federal Government in fostering education, public health, scientific research, public parks, conservation of national resources, agriculture, industry, and foreign commerce.
The third great field lies in broadening the assistance of the government to the growing efforts of our people to co-operation among themselves to useful social and economic ends.
This administration has recognized the public necessity of Federal Government contribution to the creation of a definitive system of modern interstate highways. This program is far from completion, and I stand for its continuance. Congress has lately authorized a large program of much-needed public buildings. And there are other important public works of less immediate interest to the Midwest to which I have referred upon other occasions. The whole comprises the largest engineering construction ever undertaken by any government. It means an expenditure of nearly a billion of dollars in the next four years, or nearly four times the outlay on the Panama Canal. As I have said before, these undertakings are justified by the growth, the need, and the wealth of our country. The organization and administration of this construction is a responsibility of the first order. For it we must secure the utmost economy, honesty, and skill. These works, which will provide jobs for an army of men, should, so far as practical, be adjusted to take up the slack of unemployment if it should occur.
A Federal Farm Board
In addition to the tariff and cheaper waterway transportation in assistance to agriculture, the Republican Party proposes to go farther. It proposes to set up an institution which will be one of the most important institutions in our government, designed to meet not only the varied problems which confront us today but those which may arise in the future. We propose to create a Federal Farm Board composed of men of understanding and sympathy for the problems of agriculture; we propose that this board should have power to determine the facts, the causes, the remedies which should be applied to each and every one of the multitude of problems which we mass under the general term “the agricultural problem.”
This program further provides that the board shall have a broad authority to act and be authorized to assist in the further development of co-operative marketing; that it shall assist in the development of clearing-houses for agricultural products, in the development of adequate warehousing facilities, in the elimination of wastes in distribution, and in the solution of other problems as they arise. But in particular the board is to build up, with initial advances of capital from the government, farmer-owned and farmer-controlled stabilization corporations which will protect the farmer from depressions and demoralization of summer and periodic surpluses.
It is proposed that this board should have placed at its disposal such resources as are necessary to make its action effective.
Thus we give to the Federal Farm Board every arm with which to deal with the multitude of problems. This is an entirely different method of approach to solution from that of a general formula; it is flexible and adaptable. No such far-reaching and specific proposal has ever been made by a political party on behalf of any industry in our history. It is a direct business proposition. It marks our desire for establishment of the farmer’s stability and at the same time maintains his independence and individuality.
This plan is consonant with our American ideals to avoid the government operation of commercial business, for it places the operation upon the farmer himself, not upon a bureaucracy. It puts the government in its real relation to the citizen—that of co-operation. Its object is to give equality of opportunity to the farmer. I would consider it the greatest honor I could have if it should become my privilege to aid in finally solving this, the most difficult of economic problems presented to our people, and the one in which by inheritance and through long contact I have my deepest interest…
The Principle of Co-operation
…We have in the past quarter of a century evolved a higher sense of organized co-operation than has ever been known before. We have ten thousand examples of this conscious co-operative development in the enormous growth of associational activities. Civic associations, chambers of commerce, trade associations, professional associations, labor unions, trade councils, farm organizations, farm co-operatives, welfare associations—these are so all-embracing that there is scarcely an individual in our country who does not now belong to one or more of them. They represent every phase of our national life both on the economic and on the welfare side. They constitute a vast ferment toward conscious co-operation. They have become a part of the very fabric of American life. While some of them engage in highly objectionable attempts to wrongly influence public opinion and the action of government, the majority of them recognize a responsibility to the public as well as to themselves; and a large part of them are founded solely on public interest.
Wherever these associations undertake high public purposes I wish to see active co-operation by the government with them. Without intrusion the government can serve to bring together discordant elements and to secure co-operation between different industries and groups. It gives great hope of a new basis of solution for many of our problems and progressive action in our people. It should be the response of government to our new economic conceptions. It is consonant with the American system. It is a method that reinforces our individualism by reducing, and not increasing, government interference in business and the life of our citizens.
Such co-operation strengthens the whole foundations of self-government and serves to maintain equality of opportunity and constructive leadership.
This co-operation can take two distinct directions. It can assist in the promotion of constructive projects of public interest on one hand, and it can assist in the cure of abuses by the voluntary establishment of a higher code of ethics and a stricter standard in the conduct of business.
First, I may review a case of assistance to labor and business. In 1923, under my chairmanship, there was organized a series of committees representing the manufacturers, contractors, engineers, real estate men, and labor in the building trades. Its purpose was to reduce the loss of time due to the seasonal character of these industries. As a result of the organization set up, the average winter unemployment in these trades has been reduced from about one hundred days to about half that number. There has been no decrease in daily wages. The annual income of the workers in these trades has been substantially increased by the decrease in idle days, and the business given greater stability.
Another instance of action of fundamental importance to the farmer, the businessman, and the worker consists of the measures taken in co-operation between the government and business agencies to mitigate the violence of the so-called business cycle. Booms and slumps have occurred periodically for one hundred years. No one suffers more from these periodic hard times, with their hideous unemployment, decrease in wages, and bankruptcy in business, than both labor and the farmers. Time forbids a discussion of the intricate problems involved and the remedies which have been inaugurated. The proof of the effectiveness lies in the fact that we have had a far longer period of stability in industry and commerce, far greater security in employment, and larger buying power for farm products than ever before in our history. The solution of this question was just as intricate as those which we face in agriculture…
Avoidance of Unnecessary Regulation
An illustration of another direction of these activities has been in eliminating abuses in a particular industry without resort to legislation and regulation. For a great many years legislation had been debated in Congress providing for the regulation of the lumber industry somewhat on the lines of the pure food laws, in order to protect the honest manufacturers and dealers and the public. In 1923, however, we created a series of committees amongst associations in the lumber industry at their request. In the course of a gradual extension over five years we finally perfected a system for the grading of lumber and for the guaranteeing of those grades to the public, which is now carried out wholly within and by the lumber industry itself. Consequently during these last few years there has been no suggestion of such legislation from Congress. The savings to the public in the elimination of waste and fraud have been estimated by the industry as upwards of two hundred and fifty million dollars a year. This is a clear case where by co-operative methods we have avoided the necessity of regulation with the bureaucracy and interference that flow from it. It is also a dear case of building up of self-government.…
In this broad field of co-operation by government lie potentialities which have been barely touched. The government can give leadership and co-operation. It can furnish scientific research. It can give prestige and influence. All of these call for but trivial expenditures. They require no increased bureaucracy. They are of first importance to every branch of American life.
It is by these means of co-operation by the government that we contribute mightily toward business stability and greater productivity in industry. And it is stability that every business man needs that he may thus work out for himself his own destiny without those ill tides over which he has no control.
It is by means of the sort of co-operation from the government that we may contribute greatly to the very foundations of economic progress, that is, to provide continuous and full employment. General employment comes not only with sound policies of government but equally from vigorous co-operation by the government to promote economic welfare. It is by these means that we build such organization of our economic system as to provide a job for all who have the will to work.
Equality of Opportunity
Government has the definite and manifest obligation of giving constructive leadership to the people. In doing so it must not lessen their initiative and enterprise, upon which we must rely for the progress of the race and of the nation. Our system has been built upon the ideal of equality of opportunity. For perhaps a hundred years after the foundation of the Republic, the opportunities of a moving frontier preserved that equality of opportunity. Now with the settlement of the country and with the astonishing speed and intricate complexity of industrial life, the preservation of equality of opportunity becomes yearly and yearly more difficult, and for that very reason is of higher and higher importance. If we would maintain America as the land of opportunity, where every boy and girl may have the chance to climb to that position to which his ability and character entitle him, we shall need to be on increasing guard. If I could drive the full meaning and importance of maintained equality of opportunity into the very consciousness of the American people, I would feel I had made some contribution to American life. It is the most precious of our possessions that the windows of every home shall look out upon unlimited hope. Equality of opportunity is the right of every American, rich or poor, foreign or native born, without respect to race or religion. By its maintenance alone can we hold open the door of full achievement to every new generation and to every boy and girl? Only from confidence that this right will be upheld can flow that unbounded courage and hope which stimulates each individual man and woman to endeavor and to accomplishment. By this principle we should test every act of government, every proposal, whether it be economic or political. I insist upon the most strict regulation of public utilities, because otherwise they would destroy equality of opportunity. I object to the government going into business in competition with its citizens because that would destroy equality of opportunity. And equality of opportunity is the flux with which alone we can melt out full and able leadership to the nation.
The first step to maintained equality of opportunity amongst our people is, as I have said before, that there should be no child in America who has not been born, and who does not live, under sound conditions of health; who does not have full opportunity for education from the kindergarten to the university; who is not free from injurious labor; who does not have stimulation to ambition to the fullest of his or her capacities. It is a matter of concern to our government that we should strengthen the safeguards to health. These activities of helpfulness and of co-operation stretch before us in every direction. A single generation of Americans of such a production would prevent more of spirit and of progress than all of the repressive laws and police we can ever invent—and it would cost less.
The American Home
I have said often before in this campaign that we need always to interpret our discussions of economic and material proposals by how they affect the peace, the happiness, and the security and prosperity of every American home. I have tried to interpret to my fellow-countrymen what government means to that home. I stand for a prosperous country because I want good homes. You cannot divide those things that are seen from those that are unseen. The things that we call material are the foundation stones upon which we build the temple of those things that we call spiritual.
Prosperity, security, happiness, and peace rest on sound economic life. Many of the subjects with which we have had to deal are intricate and complex. We must support the maintenance of peace amongst nations, economy in government, the protective tariff, the restriction of immigration, the encouragement of foreign trade, the relief of agriculture, the building of waterways, and a score of other great governmental policies which affect every home in our land. Solution of these questions is not always easy. Only the inexperienced can be positive in offering solutions of great problems. The first necessity in handling of such problems is the assembling of the facts in their proper perspective. The truth must be forged from the metal of facts.