What Profiteth It a Nation?


By WOOD NETHERLAND, Vice President, Mercantile-Commerce Bank and Trust Company, St. Louis, Missouri, before the State Bank Division, 65th Annual Convention, American Bankers Association, Seattle, Wash., September 25, 1939

Vital Speeches of the Day, Vol. 5, pp. 752-755.

THE Four Horsemen of the Apocalypse ride again. Once more, back and forth through air and land swings the long engaging scythe of death—this time with increasing tempo.

Again tens of thousands of the flower of youth, friend and foe alike, are blanded in one great red burial. Little children, whose pinched faces blanch at the roar of new monsters of the air, are scuttled into underground holes like so many rats. Behold man at his worst!

Surely He who wept over the city of Jerusalem must now be bowed down in grief.

As we stand helpless and aghast, and contemplate the destruction that may be wrought before the world concludes this struggle and current civilization lies desolate and prostrate from its effects, we somehow sense its utter uselessness.

With our progress in science and invention, with a productive plant capable of supplying an abundance of life and happiness to every family on the globe, we grow sick at thethought that the strife which now engulfs the world may end in such a crucifixion of mankind that the resurrection may be a matter of centuries.

Faced with such an imponderable, and seeking to grope our way out of the depths that threaten us, would it not be well to recheck our figures, to retrace our steps, to examine the route along which we have come, to re-read the markers past which we have driven too fast, so that if possible we may discover how, when and where we have lost our way?

So it is, in a spirit of reason and logic, that I am attempting now to go back to origins to find some light on the question, if I can, as to why man, conscious of the oneness of the human race, even after centuries of experience and the lessons of history, seems unable to work out and accept either a moral or legal code which will enable him to enjoy in peace that abundance of life which is so freely at his disposal.

Currently we hear much of Nazism and Communism supposed to be new and opposing ideologies which offer a complete solution to the manifold difficulties that confront the human race. As a matter of fact, both are no more or no less than the modern version of an ancient doctrine advocated by many philosophers, including Spinoza, Bentham, and especially the German philosopher George Friedrich Hegel, over a hundred years ago. His philosophy was but a restatement of the doctrine of absolute and supreme power of the state over the individual, as opposed to the democratic theory that man is older that the state and possesses certain personal or inalienable rights as so forcibly stated in the Declaration of Independence by the American colonies.

According to Hegel, the state is an impersonal supreme being, possessing absolute power. It is the highest form of the universal reason and will, and all dutiful citizens must live and act according to its needs and demands. Hegel says, "The state is the realized ethical idea or ethical spirit. It is the objective spirit, and the individual has his real existence and ethical status only in being a member of it." In short, the individual has no rights whatever, even the right to live, unless the state so decrees. Thus it may be observed that the present National Socialist regime in Germany presents nothing essentially new insofar as this brand of philosophy is concerned, but represents a social theory that appears to be inherent in the German nation. Obviously such a doctrine opens the door to absolutism and tyranny, cuts its people off from any right of appeal, and depreciates the value of human life. The full answer to such a doctrine is found in the famous encyclical letter on the reconstruction of the social order by the late Pope Pius XI, whose whole life was devoted to the uplifting of the proletariat, and who yet had a fine conception of the necessity for harmony among all ranks in the social order. Keenly conscious of the obligation of men of wealth toward society, especially as regards their superfluous income, he nevertheless strongly condemned the contention of socialists that economic production must necessarily be carried on collectively. "Society therefore," he said, "as the Socialist conceives it, is on the one hand impossible and unthinkable without the use of compulsion of the most excessive kind, on the other it fosters a false liberty since in such a scheme no place is found for true social authority."

As opposed to the theory of absolutism is the doctrine embraced by most civilized nations, democracies in particular, that the individual possesses certain rights that cannot be surrendered at all, even to his own government. These are called inalienable because they cannot be taken away from the individual without doing violence to his personality. They include the right to live, the right of self defense and religious liberty. From this point of view a human being is valuable for himself apart from any other human being or the stateitself. In a democracy, "A human being retains his value because it is intrinsic to him. The reason . . . is to be sought in certain inner endowments. . . . These endowments are the powers of intelligence and free choice. They are the endowments of a human person, whose principal element is a spiritual soul.

"These powers of intelligence and freedom of choice are possessed by man alone, and are not found in any being in the world outside of man. These possessions invest man with the quality of intrinsic value. By means of them he is enabled to act intelligently and freely in deciding between right and wrong. Obviously, he could not merit happiness if he did not understand what he was doing, or if he were not free in his actions. Because of his intrinsic value, every person possesses the quality of inviolability. This quality forbids others to harm or injure his person in any way."

Wars will not cease until governments acknowledge and respect the inviolable nature of the individual, whether he be friend or foe. These exists no moral law under high heaven which gives a nation the right to take human life of other nationals for material considerations.

Now, the transition from a form of government which confines its prerogatives to the protection of these rights to a form of government which imposes a planned economy on its nationals may be quite as unnoticeable as it is insidious. Although at its climax it may break forth in the form of revolution, it is brought about often with the full, though unwitting cooperation of the people themselves. It has its genesis usually in the necessity of some economic crisis within the state, or by the fear of war from without. In either case, realizing that prompt action is necessary against a common foe, citizens of a democracy intrust their leaders with certain emergency powers "to provide for the common defense" —and thus in a spirit of patriotism voluntarily forego rights which under normal circumstances they reserve sacredly unto themselves At the time of this foregoing there is no thought of giving up inherent natural rights indefinitely, but usually, to use the stock phrase, it is "for the duration of the emergency." The grave danger of this departure from these basic tenets of a free people is that either the laws voted in an emergency are seldom repealed, or the period of the emergency is so prolonged that the restrictions which tend to stifle fundamental rights become a permanent and accepted part of our political economy. This unfortunately provides legal processes whereby an ambitious administration actually may vest in itself certain dictatorial powers which the electorate never intended should be lodged permanently in any one branch of the government.

Moreover, the regimentation to which we have been subjected in the past few years arises from the idea just mentioned as to the divine right of the state, which theory, it seems, unfortunately must be tried and disapproved at frequent intervals in the history of nations. This condition invariably has for its basis the concept of reformers, who would have us believe that government should occupy not only the position of arbiter or umpire, but also should enter into the game as quarterback. This is graphically illustrated by the National Labor Relations Board, which becomes prosecutor, as well as judge and jury. Such a government, impressed with its own omniscience, becomes intolerant and vindictive, and all too often must use force to impose its will upon its citizens—and gradually its people pass from the status of free men to that of slaves.

A president, legislator, or government bureau executive is, after all, merely a human being like his fellow men. Of himself, he has no right to oblige others to do things which they prefer not to do. All human beings are essentially equal, for each has the same intrinsic worth and importance asevery other. Hence a public official in his personal capacity, has no right to bind the wills of his fellow men, and can do so only as they have, through statute, clearly and unmistakably given him the official right to do. Under our concept of government where this right is not positively and affirmatively given, such a right is specifically reserved either to the individual or to the several states. The manner of administration of the National Labor Relations Act presents a dangerous threat to freedom of contract, and in my judgment will in the end prove to be unworkable. Its machinery is too intricate, too detailed, and will never prove an effective substitute for tolerance and understanding between employers and employees. Morality cannot be established by government fiat.

This is not to say that the state should not be concerned with respect to the economic welfare of all its citizens, particularly the low income groups, nor to say that capital should be permitted to reduce labor to a condition of economic servitude. The story of the factory women and children of the first dark days of the industrial revolution pictures a situation which should be avoided now—machines had been perfected, steam had come in, coal was at a premium, hand labor was doomed and hand laborers were starving. No regulation of labor, no protection, no homes prepared, no concern for physical or spiritual welfare. Children worked from six in the morning to seven at night. A generation of factory women grew up who had never been in a home, could not cook, sew, or keep clean. The bodies of the poor were exploited for dividends without regard to the future. Time and education have cured much of this, as has the formation of labor unions capable of collective bargaining, so every government, whatever its form, is to be regarded as an agency to supplement the efforts of its citizens. If a government attempts to do more than supplement or assist, and assumes to do for its citizens what they themselves could do better, it becomes paternalistic and stifles natural initiative, the life blood of national welfare. If a government does less than supplement or assist, and shows itself indifferent to injustice or oppression, it opens the door to anarchy and its own destruction.

I have tried here to suggest the line of demarcation between personal liberties and civil liberties, in the full realization that this line of demarcation is an intangible and abstract boundary which changes constantly with progress. But America in its beginning instituted a system of checks and balances designed to redefine this boundary from time to time, insofar as it is humanly possible to do, and he who would destroy this system, however cumbersome it may be, strikes at the heart of this republic. That is the danger inherent in any proposal that the executive, legislative, or judicial branch of our Government has an undue influence on either or both of the other branches. That is the danger inherent in any proposal that States shall continue to yield their sovereignty to the Federal Government. That is the compelling reason why the American dual banking system must be preserved lest there be a further creation of instruments of power in Washington, and the ultimate end of state autonomy, toward which we are drifting slowly but surely.

Since the advent of the Federal Reserve System and the Federal Deposit Insurance Corporation some state banking departments have surrendered their independence of thought and action. Yet, so long as both the state and national banking systems exist, they serve as a check on each other and at the same time co-operate in their work. Grant, for the sake of argument, that we might have a more economical and sufficient banking system by consolidating all supervisory and regulatory authority in one agency, we would provide the most powerful weapon for economic and political control thatcan possibly be imagined. While the F.D.I.C. machinery is a step in the direction of concentrated power, yet so far it has been splendidly managed and, so long as a bank may, if it meets certain requirements, convert from the state to the national system, and vice versa, and membership in the Federal Reserve System is voluntary for state banks, a measure of checks and balances is maintained. What little is left certainly should be preserved.

I have said that the transition from a form of government which limits its interference with private initiative, to one which dictates a planned economy, often steals upon us ere we are aware. You are too familiar with the history of our past few years for me to detail the various specific measures that have been enacted which have tended to weaken gradually States' rights and lodge more and more power in our national government, nor can anyone fail to note the proportions to which the power of the executive branch of the Government has expanded, while that of both the legislative and judicial branches has declined. This does not augur well. Its repercussions have been somewhat mitigated by the prodigious and lavish expenditure of money from the public treasury, and yet we found ourselves this spring with more unemployed than we had in 1932, and facing a debt of forty-four and one-half billions by the end of the fiscal year of 1940— with an annual interest charge, even at low rates, of over one billion dollars. This one item is more than three times the amount of the entire cost of the annual budget in the administration of President Wm. McKinley. Some four to six million people are directly or indirectly indebted to the Federal Government through its labyrinth of leading agencies. Thus either through legal or economic means the Federal Government becomes more and more dominating.

Nor am I one of those who believe that all of the blame for our difficulties attaches to those in high places, for in a democracy at least leaders are usually responsive to popular demands. But the fault, it seems to me, lies with the average citizen who has forgotten, or who has not yet learned to think in terms of the general welfare. No better proof of this could be manifested that the attitude almost generally shown in our country with respect to the so-called recovery measures which have been initiated during the past seven years. While holding to the view that indiscriminate spending and large deficits are both dangerous and ineffective—a view now substantially proven by experience—most of us have at one time or another joined pressure groups in demanding of the administration local expenditures or costly activities which only added to the mounting debt we so bitterly assailed at the same time.

A favorite news release, and unfortunately a most effective one by a member of Congress standing for re-election, is a recapitulation of the expenditures which the Federal Government has made in this district, and a favorable comparison of them with the amount of taxes collected therein. I do not need to enumerate to you the many instances wherein the citizens of this country have either supported, or have been adamant with respect to unwise and fantastic proposals simply because they themselves were the beneficiaries. As one member of Congress so aptly suggested, what we need, and what we must have if we are to retrieve our position, is representatives in Congress who can think in terms of "my country" rather than in terms of "my district," and constituents who will approve their stand. Moral rearmament cannot begin at the top. It must first find its place in the heart of the individual citizen.

Illustrative of what I mean, I often recall a visit I had at the close of the last war with my good friend, the late Senator Joe Robinson, who unfortunately like the rest of us some years later became charmed with the emotions andlargess of the New Deal. After a separation of some two years during a part of which I had been completely out of touch with what was going on in this country, I called to pay my respects as we were then both citizens of the same state. During the conversation I shared with him the pride he evidenced as he told me of the sacrifices and self-denials Arkansas had made during the war in the conservation of sugar, flour, and other commodities called for by the food administrator, and other economies the state had practiced in order to help carry through in the emergency. Other states showed a similar spirit of self-denial. This was then the badge of honor, and I say to you that when the time comes that we can revive that which is the soul of America, think a little more about our duty and what sacrifices we as citizens can make for the sake of national recovery, rather than what we can get from the national treasury while recovery is being attempted, then we will begin to construct a way out of this confusion and avoid this unmistakable trend toward concentration of power before it is too late.

I have also said that the transition from a democratic form of government to one which dictates a planned economy, usually makes it greatest strides during periods of national emergency. A pertinent case in point is the necessity for national unity now confronting us as a result of the war in Europe. No one of us desires to criticize or to hamper the President unduly in discharging the tremendous responsibilities that are his in this difficult and critical situation, and thus normally or would be quite willing to forego many of our personal rights in the interest of collective defense and security. We would be less than frank, however, if we failed to say that the complete confidence which should obtain in such a situation does not now exist. It will be difficult for those substantial elements of our population who have been the victims of Mr. Roosevelt's bludgeoning, and on whom he must now rely for assistance, to trust him implicitly with sufficient power to deal with the critical issues that now confront him. Because of his record, he is now faced with the necessity of convincing a large segment of the population that such additional powers as may be granted him will not be abused, and that these powers will not be permanently appropriated after the emergency has passed. Only time and Mr. Roosevelt himself can create an atmosphere of confidence so necessary to the best interests of the United States in the present condition of world affairs.

It seems to me we have gone a long way on this transitionfrom our original conception of a free government to one which dictates a planned economy, and that it is high time we pull over to the side of the road, shut off the engine for a while, and have a look at our compass. I feel confident that the appalling tragedy in other lands will bring us back to our senses and draw us closer together than we have been for a decade. If, as one writer has suggested, the Angel of Humility will but wing his way through the White House and bring the realization that no one has a monopoly on patriotism in this country, "the moral and political atmosphere in the United States would be instantly transformed. There would come to the people a feeling of confidence altogether lacking today, and they would face the future without anxiety, in a calm spirit and cool courage." I have the feeling that the recalcitrant members of Congress who declined to repeal the neutrality legislation at the last session, did so not because they objected so much to repeal itself, but because they have reached the end of their tether in risking the dangers of a one-man government. If this be true, it is a happy omen, for whatever may be the emergency, there is none so important that it justifies further trends in the direction of autocratic power.

As other men have emotional experiences, so I have mine, and not the least of these occur at times when I am privileged to visit the City of Washington. It is always an inspiration to stand for a few moments in silence beside the tomb of the unknown soldier at Arlington. From there I like to return to a spot some hundred yards from the Capitol and observe Crawford's statue of Freedom, which mounts the dome of the building. As I stand there in reverie, I am oblivious to all about me, and through the mist before my eyes the events of our history pass in review. It is not the great figures in our national life that I see, but rather visions of my forebears, simple folk who led unostentatious lives and were motivated by love of country. I see them with Washington at Yorktown, with Grant and Lee at Appomattox. They were silent companions in that somewhat nebulous late venture to make the world safe for democracy. Unconsciously, almost audibly, I murmur, "This is my own, my native land," and as I go from that spot a voice invariably leaves with me the words of a great thinker, which I would like to leave with you—

"Freedom has a thousand charms to show,

Which slaves, howe'er contented, never know."