While supervision and control of big business is essential, the trend has been in the direction of interference and in many instances inhibition.

While both political parties, and all administrations, profess great friendship for business, the treatment that both political parties have accorded business is well illustrated by the fable of the elephant that, in going through the jungle, stepped on a mother bird. When the elephant saw the havoc she had wrought, she called the orphaned chick and said: “This is deplorable. I did not intend to kill your mother. I am a mother myself and have the mother instinct. But the deed has been done and is past recall. Being unable to restore your mother I shall give my efforts to the task that your mother would perform if she were living.” So the elephant sat down on the chicks.

The American people have shown great aptitude and achieved unparalleled success in two distinct fields—baseball and business. During the period of development and successful prosecution of these two great national games, the rules of the game were made by experts in the respective games. Practical bankers made the rules of banking, experienced traffic men made rules governing transportation, and expert baseball players formulated the rules of that game. Business has suffered because of modern methods, and baseball will go where business had gone prior to the war, should the same policy be pursued and the committee that is to make the rules of baseball be selected under the direct primary system, from among those who never play the game, and seldom see it played, upon a platform demanding that strenuous playing shall cease, and that the score must be a tie regardless of errors.

Instead of permitting practical bankers to apply fundamental banking principles, we have forty-nine distinct sets of statutory rules, one for each state and one for the union of states, enacted by men some of whom have no more knowledge of banking than they have of aeronautics, and frequently administered by those whose tenure of office depends upon the amount of trouble they can make.

We legislate to prevent monopolies and for the ostensible purpose of encouraging competition, but the rules of banking are well nigh prohibitive of the creation of new competitive concerns. The president of one of the largest banking institutions in the United States, whose operations extend into every state, told me that he had refused a loan to Phil Armour except upon collateral that could be sold on the stock exchange of any city, and in the same conversation said there was not a loan in his institution except upon listed collateral. Only big concerns can furnish that class of security.

Suppose you were to build a packing house costing one million dollars and should make a bond issue of five hundred thousand dollars so as to have collateral. The officers of no bank would care to lend on those bonds. To do so would be to rely upon their judgment, and some little bank examiner would report that the bank had loaned on collateral that had no market value. Thereupon the Banking Department would write criticising the loan and directing that the letter be read to the board and a certain number of directors sign a reply. The course of least resistance is to refuse all loans except to monopolies or upon stock exchange collateral.

Not long ago a friend applied to one of the large banking institutions in New York City for a loan upon unlisted securities. The president took from his desk a certificate of stock of a certain railroad and said: “I do not believe this stock worth the paper it is printed on, but I will lend money upon it. I believe your securities are absolutely good but I will not lend a dollar upon them.”

The reason was sensible, and the banker was wise when banking laws and the rules of banking departments are considered. The railroad stock was listed and dealt in every hour. Hence the public assumed it had value, and it could be sold on the stock exchange for a price that fluctuated little. Its intrinsic value, if any, was problematic, but it did have a market value. The security offered was not listed. In the opinion of the banker it had abundant intrinsic value, but since it did not have a market value on the stock exchange, he did not feel justified in inviting criticism from the Banking Department by relying upon his judgment. It is difficult for a new concern to get credit and without credit no concern can live.

To a greater or less degree, the same policy has been applied to nearly all important branches of business. The rules for the operation of railroads and insurance companies are both complex and conflicting. The books have to be kept to conform to the legislative requirements of every state in which the concern does business.

A certain express company formerly employed one attorney at two thousand dollars a year. It now maintains a legal department occupying an entire floor of an office building, and the officers of the company are in daily consultation lest they violate some state or federal statute and go to the penitentiary.

The president of an insurance company told me that if he did in Missouri what he was required to do in Texas, the penitentiary would await him, while if he omitted it in Texas, his punishment would be equally modest.

Severity of punishment in the United States has not yet reached the limit witnessed in France late in the eighteenth century when direct government was carried to its logical extreme. At that time the death penalty was prescribed for those who took food products out of circulation and kept them stored without daily and publicly offering them for sale. Failing to make a true declaration of the amount of goods on hand for eight days, and retaining a larger stock of bread than was necessary for daily wants, were punishable by death. Death also awaited the farmer who did not market his grain weekly and the merchant who failed to keep his shop open for business. We may or may not go to this extreme in America. I do not at the moment recall any punishment at the present time in this country more severe than six months in jail and a fine of five hundred dollars for spitting on the sidewalk.