Date: January 22, 1923
Location: Chicago, IL
Context: Coolidge speaks to the morality of America’s economic system
This gathering represents an important industry which ranks high in the quantity and quality of its production. It is honored with great antiquity. The working of metals and minerals into articles of personal adornment has been a characteristic of every race and a custom at every stage of development. It is commended, not only by its age but by the character of the men who have engaged in it, not only because of their trade but by reason of the estimation in which they were held. For this reason the silversmiths of times gone by were not only manufacturers and merchants, but became bankers. Into their keeping was entrusted the jewels and precious metals of others. They became a class of great responsibility in the then world of finance.
It is not only as an industry but as an art that this trade today ministers to a fundamental requirement of all civilization. Its real mission is not to appeal to vanity or to provide the means of mere ostentation, but to give expression to the ennobling sentiment of a love of beauty which lies at the foundation of creative art. To provide the people with treasure in inspiring form is not to serve a bare desire for gain, but is to aid the cause of refinement, culture, and humanity. Such a purpose and such a service are worthy of the best that there is in mankind.
Beyond its financial return, there ought to be a pride in every calling, a source of satisfaction in every commercial enterprise. The practice has developed in this country of attempting to measure business entirely in terms of money, and on that basis to set limits to its activity with little regard to the other elements which enter into its conduct. The results of commerce cannot be disposed of in so many ounces of silver and so many pennyweight of gold. The final sum, which represents the entire transaction, has to be cast up in the ledger of life. Commerce is not confined to dealing in commodities, it is a dealing with men. The important production of manufacture is not fabric, but character.
It is this which gives warrant and meaning and life to commerce. Men have found little advantage, little progress, and little satisfaction in a life which only supplied their own wants from the products of the field. It was only when they began to produce to supply the wants of others, when there became an exchange, not only of commodities but of ideas, that there began the rise of that civilized society which found its nourishment and support in commerce.
Out of the ever-increasing needs of trade there were built up systems of transportation by caravans on land and by ships on sea, by canal and by railroad. The need of a medium of exchange and of credit facilities brought the coinage of precious metals and the establishment of banking houses. Invention was stimulated, manufacturing output increased, a greater and greater capacity to create gave greater and greater ability to gratify desires, until life, which began narrow and mean and uncultured, expanded into a life that is broad, rich and enlightened. Under this inspiration the arts have flourished, science has advanced, education has been cherished, and the humanities have developed.
It is not from commerce that we derive our ideals, it is from religion, from education, from the aspirations of the soul; but, it is from commerce that there is derived the power to minister to these ideals and to carry them into effect. Commerce has stimulated and increased production, giving the opportunity to an enlarging proportion of the population to expand and broaden its activities beyond those fields which are required by the bare necessities of existence. It is from this source that there has been provided the means for investigating the laws of nature, for the founding of universities and the construction of schoolhouses, for the creation of literature, sculpture and painting, for the endowment of charitable institutions and the building of places of religious worship.
This is the real purpose and meaning of all the industrial activity of our nation. As a necessary and inevitable result, it is a broadening out of life, the raising of the standard of human existence which reaches to every hearthstone in the land. It is true that these great privileges may be ignored, that these great powers may be misused, that the possession of money, especially if it be too easily secured, may be used, not to create, but to destroy, not to ennoble but to debase. But the evidence is all about that this is not the purpose to which the stupendous resources of our country are devoted. Here and there are examples of wanton prodigality and dissipation, but they represent nothing save their own certain destruction, while the mass of wealth of the country, is not always successfully, is honestly and conscientiously used to give to the people of the nation a more abundant life. Men of the greatest wealth have dedicated their stupendous fortunes almost in their entirety in faith, in hope, and in prayer to this high calling. In all the nation there is not a mature community which is not devoting its resources, which is not already filled with monuments, to this purpose.
Under the present method of organization and conduct of business the results of its success or failure are very far-reaching. It is not confined to the mere matter of profits and loss to a few individuals, it is a question of maintaining the life and nourishing the progress of the nation. The questions of sound conditions of production, of credit facilities, of serviceable transportation, and of adequate markets, become matters of public concern. State and national governments are required to assist in maintaining these commercial necessities in a condition of open opportunity and efficient service.
The problem of how these may best be provided is one which is ever present and of fundamental importance. It ought, in the first place, to be considered as a public problem and divested of prejudice. Hatred and envy and uncharitableness are not productive either of sound economic conditions or of good citizenship. The general results of commerce and industry, their great benefits, which have been pointed out, are inevitable. It cannot be that those who are engaged in them, who have had the vision, the courage, and the ability to organize, manage, and lead them, are proper subjects for constant public condemnation. The large enterprises of our country have been created, almost without exception, not by men who were born to the purple, but those who came into life under very meagre circumstances. In a country where the measure of a man is not who he is but what he can do, this may not be of much importance, but it is one fact in the evidence which points to the inescapable conclusion that the makers and builders of America have been and are the people.
It is not always true that those who perform a large public service meet with financial success, but it is true, almost without exception, that those who achieve great financial success do so by the performance of a great public service. It needs to be realized that they have worked with the people and through the people, and that the great instruments of commerce and industry which they have created are for the people. The service which they render can go on expanding to meet the ever-increasing needs of the people so long as it is profitable and no longer. The manufacturing plant, bank, railroad, steamship, the merchant and the distributor, are entitled to have a just appreciation of the services which they render and the cooperation and good will of the people. The business of the nation is not a selfish and ignoble enterprise, it represents the highest effort of the best type of manhood which this world has produced. Only a public enemy could wish to see it torn by dissension and discord and destroyed by envy and malice. Every well-wisher of our country, everyone desirous of the welfare of the people, wants to see it maintained, strengthened and prosperous through more cooperation, better understanding, mutual forbearance, and good will. Unless this foundation is thoroughly established, all other efforts will be in vain.
There is no more destructive agency in our national life than that which undertakes to arouse the jealousy of one section against another, to stir up dissension between employer and employed, promote unjustifiable discord between public service corporations and the communities which they serve, and generally to array one part of the productive and business life of the nation against another part. Of course, the blame for such a condition, when it arises, is never confined to one side. Generally, it has its basis in ignorance of the facts involved. Oftentimes there is too little frankness on the part of some charged with the management and too much suspicion on the part of some of the public. The business of the country is not conducted for the purpose of cheating the people. It could not be done even if some of its directors attempted it. Nor do the people wish to oppress anyone, to despoil anyone, or to have the use of property without rendering a just compensation. Nothing would so conduce to an increasing and profitable production, to adding to the welfare of the people, to advancing every art of civilization, as to be rid of all these quarrels and dissensions and work together in peace and harmony under the existence of mutual respect and confidence.
Nothing has been so changed as a result of modern science and invention as the method and conduct of business. It has brought into complete play the division of labor and the entire supremacy of the factory system. This has even reached down into agriculture which was once characterized by its diversity and independence, but now dedicates large areas of land to a single variety of crop, or to the raising of one kind of animal. This has changed the condition of the individual. He is no longer working for himself, but for others. It is not to supply his own needs that millions and millions of acres of land are used for the raising of agricultural products, that billions and billions of dollars are invested in the building and equipment of hundreds of thousands of miles of railroads, or that enormous mills and factories are erected. The farmer is not trying merely to feed himself, the railroad man is not trying merely to bring home his own freight, the manufacturer is not trying merely to supply his own wants. All of these great business activities are carried on for the purpose of serving the people. It is this which has given to all of them their public aspect. Of the billions of dollars which are paid to the farmer, the railroad, and the manufacturer, each retains for his personal service and interest on investment but a small percentage. The great bulk of the income goes out for expenses. It is returned to the people. If there be any method of robbing the public, the great business interests of the nation appear to be either unable or unwilling to put it into effect. They are making a great contribution of enterprise and a great investment of capital for only a moderate return.
This is the general condition of the commerce of the country. Exceptions exist. Everyone knows that there are some profiteers, but they are greatly outnumbered by philanthropists. Everyone knows that there have been combinations in restraint of trade which have exacted more than was just, but they are much surpassed by those who have not received a fair return or have even operated at a loss. The demands of the business of the country, as a whole, are only fair, its returns are only moderate. It consists of the effort of one part of the community in attempting to serve another part. It ought to be looked on with favor, promoted, stimulated, and assisted. There is nothing which our country desires more than prosperity. If we are to enjoy that advantage, it will not be confined to a few, it will and must be general. There is no such thing as prosperity for the people unless the great enterprises, organizations, and businesses of the country prosper. We cannot have the absurdity of prosperity for the country without prosperity for individuals. We might as well face the fact that either economic progress and the increase of the wealth of the nation are wrong, or else it is right for individuals and organizations of individuals to make money. We cannot succeed by approving the general principle, striving for it, and legislating for it, and then condemning the person who accomplishes it. Along with more good will we need the candor to face facts and the honesty to acknowledge consequences.
The new conditions, the new method, new organization, by which modern business is transacted has imposed upon us new duties. It has been said that liberty is the currency with which we pay for progress. A man absolutely alone is absolutely free. As soon as he is associated with others, there is necessarily required a common adjustment. Then a division and sharing of food, clothing, and shelter are required. A division of labor takes place, one person supplying one part and another person supplying another part of the common needs. If one fails in doing his share, it is little matter, the others can easily supply it.
But when population becomes very dense, when under the division of labor millions of people are assigned to one trade and millions to another, which often require a long training and much technical skill for their performance, while the general efficiency is increased many fold, each individual comes into the possession and enjoyment of a variety and a richness of production which would be otherwise impossible, yet some of his liberty, some of his right of action, has been surrendered in order to secure this result. It matters a great deal now whether the component parts do their share. By common consent society has adopted this mode of life. We are all in the enjoyment of the great advantages which it creates. Having received those advantages, we have no right to withhold our part of the services which are required for their maintenance. There is a moral obligation on the part of each division and trade to maintain its service, because the dislocation of one part dislocates the whole. The failure to secure any part of the raw material or service stops the entire production. The individual may leave it and turn to something else, but the trade, the occupation which provides its part of what is necessary for the conduct of the business of the people, under these new methods, is charged with a new moral obligation to maintain its service. We cannot prosper unless each division recognizes its prime duty to stay on the job.
This, in turn, requires just compensation. But this is a result, not a cause. Work is not done because wages are paid, wages are paid because work is done. If the service be rendered, the compensation will be forthcoming. If the service be not rendered, there is no power that can long enforce payment. The rate of wages in the industrial world will be fixed by one main factor, and that is the amount that is earned. The amount of production, in the long run, always determines the amount of compensation. More and more emphasis is going to be placed on this end of the problem, as it is better and better understood that our real economic condition depends not so much on the amount of wages paid throughout the country as the amount of goods produced. It will always be necessary to supply along with honesty and candor and good will a large amount of hard work. The nation will seek in vain for any substitute for an honest purpose and honest work.
Considering the absolute necessity that economic success is to the higher life of the nation, it is but natural that the government should give a great deal of attention and effort to promoting and securing it. The government can provide some of the elements, but it cannot provide them all. It can furnish opportunity, but the vision, the initiative, the courage, the uprightness, the application, and the enterprise to grasp it and profit by it must come from the people themselves.
The main function of government is to maintain order, preserve liberty, and administer justice, but even these simple and elementary requirements cannot be met without the cooperation and the support of the people. This duty is not performed by mere passive acquiescence, it needs the active, energetic and concerted action of an aroused and earnest citizenship. The business of the people will not be done unless they go to do it. They cannot leave their elections to the dictation of a few. Voluntarily, informedly, advisedly, they must go to the ballot box. They cannot leave the holding of office merely to self-seekers. They must be prepared to make the sacrifice, to endure the discomfiture and the misrepresentation, the loss of business opportunity required by being a candidate for and holding public office. They cannot even leave the administration of justice to itself, they must serve on the grand jury. They must sit in the jury box at the trial of causes, civil and criminal. All of this costs something. It may seem irksome to the business man, but it is a price which we must pay. After all, there is no business quite so important as the public business, and no other business which can succeed if that fails.
The business men of the nation have been too prone to abdicate at the first appearance of hostile criticism. They must always expect to be criticized, nobody who accomplishes anything escapes it. It seems to accompany success in geometrical progression. Business cannot sit silent, it must justify itself by word and deed, but it is not to be pre-judged. Under our free institutions the achievement of success carries with it a presumption of a fair and honorable public service. Unless those who have a stake in the country, who have a real interest in it, are willing to go down into the public arena and unselfishly bear their share in the contests which are never without wounds and scars, they are not worthy of the institutions which have made them what they are, and have no right to complain of a lack of wisdom in the legislature, or a lack of justice in the courts. It is not enough for them to send, they ought to go. It is not their money that is wanted, it is their personal service. They ought to be among the people, knowing and sharing their burdens, not in their old effort to supplant the people but working for them by working with them, exemplifying their common interests. Such is the meaning of American democracy.
While the government cannot supply those necessary fundamental qualities of ability, honesty, industry and character necessary for business prosperity, it can and does encourage enterprise and create conditions favorable to industry. In this respect our own country is more fortunate than any of the other great nations. Gradually emerging from the shifting, changing conditions of a war period, we have been reaching a position of stability. This is apparent in the financial condition of the government. More than one-seventh of the national debt has been paid. A very large reduction has been made in the enormous tax burden. The Federal expenditures have been very greatly decreased. The cost of the war must be met. The service for the veterans will be maintained. That item alone is about half the former outgo of the Government. But the encouraging fact is that we are making progress.
This is reflected in a general state of prosperity. Unemployment has disappeared, wages are tending to increase, railroads are operating at capacity. Production and consumption of the great staples are at a very high level. The banking position is sound and strong. Our exports are running at a rate of one-third larger than the previous year, and nearly twice the pre-war amount.
The modern economic fabric is exceedingly delicate. It is chiefly sustained by confidence. It is destroyed by any lack of security. It is necessary to have absolute assurance of order and the general observance of the law. It is on this side that the solid and substantial element of the community is always found, and it is on this side that the real welfare of the people always lies. Such security means not only tranquility at home but peace and good understanding abroad.
In order to establish our foreign relations on a more permanent and secure basis the Arms Conference at Washington was held. It had in mind, in the first instance, promotion of peace by the only reliable method which has ever been discovered, the removal of those misunderstandings which might lead to war. How very great the accomplishments were in that direction the public has never yet come fully to realize. The people representing the Far East went home entirely relieved of fear and suspicion that they were in peril of any wrong or oppression from the United States. Having established that mutual basis of understanding, the way was open for a common agreement limiting the amount and size of naval armaments. This had a very desirable economic effect on the peoples concerned. It has not only caused an immediate reduction of public expenditure, but have given the assurance that such expenditure will not be required in the future. Great amounts of capital and great numbers of men have been released from the destructive pursuits of war to become engaged in the productive pursuits of peace.
All of this illustrates the constructive power of good will, whether exhibited in local and national affairs, or whether disclosed in international relations. Dissension is always an agency of destruction. It is only in harmony that there is found creative power. A limitation of armaments in our economic life might well be adopted with profit to all concerned.
This is not a doctrine of passive submission. It is not only good government but sound business to provide for the ample protection of every right which the citizen has both at home and abroad. Society is bound to resist all lawlessness and all disorder. Every self-respecting government guarantees to its citizens the defense of their lawful rights wherever they may be. For these purposes there must ever be adequate police and military power, but as private differences are no longer decided by force of arms, so public differences are yielding to adjustment both by conference and the judgment of international courts. This has given to business an opportunity which it never before possessed. Into it goes that effort formerly required in military preparation.
The American conception of business is that it is the means of ministering to the welfare of all the people. It is from this conviction that it secures its maintenance and support. Whenever and wherever it fails of this main purpose either it should be changed and corrected or it should cease to exist. There would be little regard in our country for a prosperity which did not reach to the people. It may not begin there, but certainly it must end there. The power and strength of the people of this nation is beyond comprehension. Whatever they want they can have, on the single condition that they furnish it themselves. There is no limit to what they can take, provided they are willing to pay the price.
Destiny has laid before them an opportunity which never came to any other people. By a continued exercise of these virtues which have been manifested in our past, they have the power to provide an abounding prosperity out of which to minister to the requirements of science and art, of education and religion. This destiny has been achieved through the business genius of the nation. It has had its great leaders, its captains, and its subalterns. It has had a rank and file touched with the same fire, inspired by the same spirit. The work which they have done speaks for them, the sound and substantial achievements of earnest, rugged manhood, not without faults, but not without faith.
The business of the country, the government of the country, are going to continue to be conducted by human beings with all their frailties, but also with all their strength. If there were any way in which this could be changed, any way that we could put ourselves in all respects, both private and public, under the jurisdiction of beings who had attained perfection, I feel warranted in asserting that there is not a high official charged with the management of any of the great business organizations of the country, or entrusted with the conduct of public office at Washington who would not gladly surrender their power and place to secure for themselves and others such an ideal condition. But the world and all the works thereof are in the hands of plain human beings. They are maintaining their ideals, they are realizing their destiny, they are working out their salvation. We could not, if we would, place ourselves in any other hands. Those who hold to the delusion that larceny is easier than industry would not change their character whether they came into power by the action of stockholders, or by the result at the ballot box. We shall go on making mistakes and making progress. We shall not succeed by following vain promises. We shall accomplish infinitely more good by possessing ourselves with patience, by maintaining a helpful and charitable attitude, by utilizing and perfecting to their limit the instrumentalities of business and government already at hand, than by a continual and supercilious criticism and a ceaseless demand for change. It is with the constructive forces of life that we must join our action. They are all about us, they are strong, they are ample, they are overpowering. “Be not overcome with evil, but overcome evil with good.”
Citation: Vermont Historical Society Archives, view the original document
The Coolidge Foundation gratefully acknowledges the volunteer efforts of Mitch Rushing, who prepared this document for digital publication.