Why, then, should a people which rightly discountenances monopoly and rightly believes in the principles of competition, enlarge the operations of governmental agencies further than is required for the recognized purposes which a free government is meant to serve? In saying this, I do not fail to recognize that, certainly during the period of reconstruction, and probably more or less permanently, both here and in Europe, the scope of state activities is bound to increase and must concern itself with, and intercede in, matters which heretofore were left entirely to private enterprise. But this concern and intercession should be such as not to eliminate or lame private enterprise, but to make it more effective. In this respect we might learn from the enemy, through a careful study of the methods followed in Germany before the war, some of which are worthy of adaptation, while others must be rejected as being in contrast with our conception of right and morality. Nor do I fail to recognize, but on the contrary I welcome unreservedly, the prospect that in the times which will follow the profound upheaval of the war, the standard by which men will be judged and rewarded will be, more strictly, exactingly, and far-reachingly than heretofore, that of work done, duty performed, service rendered. The world will have no place for idlers and social slackers. Rank will reside not in birth or wealth, neither, I trust, will it reside in an office-holding caste, but in useful achievement. The tremendous event of the war will not leave the world as it found it. It will never be quite the same again. To the extent that social and economic institutions, however deep and ancient their roots, may be found to stand in the way of the highest achievable level of social justice and the widest attainable extension of opportunity, welfare, and contentment, they will have to submit to change. mit to change. And the less obstructive and stubborn, the more broadminded, co-operative, and disinterested those who pre-eminently prospered under the old conditions will prove themselves in meeting the spirit of the new day and the reforms which it may justly call for, the better it will be both for them and for the community at large. All extremes meet, as the French saying is. From governmental paternalism to socialism is not a very long step. To enter into a discussion of the fallacies of socialism or of its limited form, known as state socialism, would take far more time than even kindly indulgence would grant me. Suffice it to say that the discoverer of the socialistic creed was a German, and that it bears all the earmarks of the German passion for cataloguing and scheduling and ordering men and things in a rigid and cast-iron way. It is characteristic of the German trait of looking upon human beings mainly as state material, of failing to appreciate and respect the passion for freedom among men and nations, and of the German's fundamental lack of enlightened insight into the currents of human nature, especially non-German human nature, which national defects are amongst the principal actuating causes that led Germany to look upon this war as a winning venture, instead of recognizing it as the colossal crime which it was, and the equally colossal folly which it was bound to be for Germany in its ultimate consequences, even if it had ended in victory instead of in defeat. It would be futile to deny that some of the credit for the advance which has been made in the last half century, through legislation or otherwise, towards social justice and towards the amelioration of conditions which the conscience of the world ought never to have tolerated, belongs to socialist suggestion and agitation. To the extent that aims and measures advocated by socialism may still be found to make for the promotion of public welfare as distinguished from selfish and narrow and ill-conceived class interest, they will not fail to achieve recognition. It would be equally futile to shut our eyes to the fact that not a few of the dangerous and insidious fallacies of socialism have taken root amongst sections of the American people, which are far from subscribing to its program as a whole. These fallacies present an issue which will have to be squarely met, and I believe can be successfully met, as the kindred fallacy of free silver was squarely and successfully met. But I am convinced that we are not now confronted with the serious pos sibility of the approval by the American people of the tenets and the program of regular socialism, as expounded by the recognized leaders whom the test of war has exposed as utterly un-American, to say the least. It is true that a good many-indeed too many-of the fraternity of "intellectuals," for a variety of reasons, some deserving of respect and some less so, are flirting with or have suc cumbed to socialism, and that too many of our youth in institutions of learning have surrendered to its seductive appearance, but the bulk of our people recoil from it, and the large majority of those composing our labor unions, under the leadership of Mr. Gompers, have recognized it for the outlandish thing it is and have rejected its blandishments. As Mr. Gompers finely said in one of his speeches a number of years ago: "I want to tell you socialists that I have studied your philosophy; read your works upon economics, and not the meanest of them; studied your standard works both in English and German-have not only read but studied them. I have heard your orators and watched the work of your movement the world over. I have kept close watch upon your doctrines for thirty years; have been closely associated with many of you, and know how you think and what you propose. I know, too, what you have up your sleeve. And I want to say that I am entirely at variance with your philosophy. I declare it to you, I am not only at variance with your doctrines but with your philosophy. Economically, you are unsound; socially, you are wrong; industrially, you are an impossibility." No lightning will come, I socialism for the present. believe, out of the thundercloud of real The menace, however, of bureaucratism and semi-socialistic paternalism, with their insidious effect upon the very fibre and marrow of our race, confronts us now, and it is none too early to take a stand against their perpetuation in times of peace. Our British business comrades have pointed the way. Let me quote the following passages from a public pronouncement recently issued in London: "The sure and certain result of the present policy, if persisted in, will be neither more nor less than the utter ruin of the established business of a very consiaerable section of the community, a section noted for its energy and enterprise, and the jeopardizing of our whole foreign commerce by the deliberate scrapping of the organizations of proved efficiency and adaptability through which it has hitherto been conducted, and the substitution for these of an immense bureaucratic organization, which will certainly kill all individual initiative and enterprise. The iron, steel, tinplate, and metal merchants of this country, recognizing the serious state into which the nation's trade is surely drifting, have formed themselves into a federation. invite the other classes of the merchant trading community to form similar federations with the same objects. They consider that these government departments, which were set up for war conditions only (and which would not otherwise have been tolerated for a week), desire, if possible, to perpetuate their existence, and if they are allowed to have their own way now, they will wreck the whole system upon which our world-wide trade has been built up and established." It may be stated as an axiom that while bureaucracy and efficiency may go together under an autocratic regime, it is impossible in the very nature of things for bureaucracy to go together with efficiency in a democracy. Nor, indeed, can paternalism and liberty exist side by side. They What are the elements which compose our governmental agencies, executive, legislative, and administrative, including those instruments of government which of late years have become more and more numerous and important, i. e., commissions and boards? Far be it from me to wish to reflect upon the ability, the character, and the motives of our public servants in general. Indeed it is my conviction that, generally speaking, their standard of capacity, industry, devotion to duty, and conscientious effort to seek the right and to promote the people's welfare is deserving of a good deal more recognition than is usually accorded to it. But surely no candid estimate would claim that acquaintance with, and experience in, handling large business affairs-let alone international business affairs-are prevalent in normal times among those in executive, legislative, and administrative positions in our country. Now, you and I, who are trained in business, have all we can do to conduct our respective concerns and personal affairs with a fair measure of success. On what ground, then, can it be assumed that by becoming endowed with the dignity of a governmental appointment, men of average or even much more than average ability will develop the capacity to run successfully the huge and complex business undertakings which the devotees of paternalism would place in their charge? I know of course the arguments of the preachers and prophets. of governmental assumption of divers functions heretofore belonging to private enterprise. I know their denunciation of what they consider the selfishness, the greed, the oppression, the economic waste and social injustice of the established order of business, and the sweeping conclusions they draw from the scandals or abuses which, from time to time, in sporadic cases, have unfortunately demeaned the conduct of such business. But granting some, for argument's sake, many, or even all of their allcgations, would a regime of paternalism and bureaucracy afford the remedy? Do they find support in history, ancient and modern, for their plea? Have our city administrations, for instance (and to run a city is essentially little different from running a business organization) been such as to show superiority over, or equality with, private enterprise? Has the management of our postal department, which is purely a business proposition and an easy one at that? Is it conceivable that an army of government clerks such as a bureaucracy would have to create, with its deadening routine and its absence of incentive, could come anywhere near equalling in efficiency and initiative the private employees stimulated by the inevitable and never-ceasing search and demand for capable men which is bound to bring the ablest to the top in private business and to reward them with position and compensation? Has our civil service brought men to cabinet or other leading positions as the great majority of our leading men in business have risen from the ranks? Has the state anywhere or at any time produced results comparable with the best of those produced by private effort, taking into account both efficiency and economy? Have its officials shown themselves amenable to new ideas? Have they encouraged or even recognized new inventions? Have they fostered initiative? I do not wish to weary you with a string of similar questions, which could be prolonged to almost infinite length, and the answer to all of which is emphatically "no." Bureaucracy is either wasteful, stagnant and inefficient, or, when it is efficient, as in Germany, ruthless in its methods, obnoxious in its spirit, and morally poisonous in its effects. Bureaucracy resents progress, vision, and innovation, because these are disturbing and antagonistic to the very essence of its being, routine. An English writer has pointed out the characteristic fact that Columbus was disbelieved, turned down, and sneered at by all the bureaucracy of his day and country, and that it was two private patrons who enabled him to realize his vision. Bureaucracy has hardly changed since then in its essentials. In our own case the soil for the growth of the noxious weeds which spring from the seeds of bureaucracy is particularly fertile, for a variety of reasons. One of them consists in the fact that our capital city is not, as are the other principal capitals of the world, a great commercial city, but is located on a back-water, so to speak, away from the great and fast flowing currents of commerce and industry and their attendant activities, and out of contact with the doers of things. The result is that Washington is heavy with the atmosphere of politics and pervaded, as no other capital I know, with the spirit and the very odor of things governmental. We are all more or less creatures of our surroundings, and in stances will occur to most of you of the changes which the atmosphere of Washington has wrought upon men whose mental processes and tendencies of thought and action we thought we knew thoroughly well and whom we believed proof against such influences. Another thing, more or less peculiar to our political ways and fatal to the attainment of governmental efficiency of a high order, is the custom of changing officials with a change of administration. Of course, a great many government employees are protected in their tenure by civil service rules, but a considerable number, and those the most important ones, are not. Moreover, because of the lack of scope for their ambitions, the insufficiency of material incentive, the vexations of red tape, and because of sundry other reasons, it is a well-known fact that, generally speaking, except in the army and navy, many of our best men do not remain in the government's service for any great length of time, while the less competent, and particularly the least competent ones, hang on forever, snugly fixed in a governmental berth. It is precisely the reverse of the ways of private business, these ways being continuity of direction and policy, incentive and reward and permanency of tenure for the man of ability, and weeding out of the incompetent ones. A characteristic instance of the protean changeableness of governmental bodies is afforded by the Federal Trade Commission. This institution, which was created but four years ago, is charged with functions for the effective fulfillment of which stability of personnel and consistency of policy and program are absolutely essential. Yet not a single one of the original appointees remains today on the commission. Its policy, methods, and conceptions have been utterly and radically reversed in the space of a few years. Under its original chairman, it had the confidence, good will, and respectful following of the business community in its constructive and helpful work. What the sentiments of the business. community are, in respect of the activities and personnel of the commission as now constituted, is plainly set forth in the recent memorandum on this subject addressed to President Wilson by the Chamber of Commerce of the United States. An American bureaucracy, if paternalism were to be permitted to strike root in our country, having the center of its being in Washington, would be apt, therefore, to become a most characteristic sample of the foibles, defects, and drawbacks which the bureaucratic species is heir to. Even under existing conditions, with the quickening effect of war upon administrative activity, the time and effort spent by business men in traveling to what for the present has become the center of all dispensations-Washington-in hanging around departmental bureaus, seeking the man or the committee authorized to make decisions, trying to get attention and action, and so forth, amounts to an appalling total of lost energy. A recently published report by one of the Senate committees contains the following passages, descriptive of the workings of bureaucracy: "Functions, ill-defined, conflicted with or overlapped each |