The Future of Democratic Capitalism [Reprint 2016 ed.] 9781512813999

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T H E BENJAMIN FRANKLIN LECTURES OF THE

UNIVERSITY OF PENNSYLVANIA

SECOND SERIES 1949

Lecture

Committee

Clark M. Byse Edgar B. Calc W . Rex Crawford Eleanor M. Moore S. Howard Patterson David M. Robb George O. Seiver Robert E. Spiller Irven Travis Arthur P. Whitaker John M. Fogg, Jr., Chairman

Editorial

Committee

Clark M. Byse Robert E. Spiller S. Howard Patterson,

Chairman

The Future of Democratic Capitalism

T H E BENJAMIN FRANKLIN

CHANGING IN A M E R I C A N

LECTURES

PATTERNS CIVILIZATION

by Dixon Wecter, F. O. Matthiessen, Detlev W . Bronk, Brand Blanshard and George F. Thomas Preface by Robert E. Spiller

THE FUTURE OF DEMOCRATIC

CAPITALISM

by Thurman W . Arnold, Morris L. Ernst, Adolf A. Berle, Jr., Lloyd K . Garrison and Sir Alfred Zimmern Introduction by S. Howard Patterson

The Future of Democratic Capitalism by T h u r m a n W . Arnold, Morris L . Ernst, A d o l f A. Berle, Jr., L l o y d K . Garrison and Sir Alfred Z i m m e r n Introduction by S. Howard Patterson

Philadelphia UNIVERSITY

OF

PENNSYLVANIA 1950

PRESS

Copyright

1950

UNIVERSITY OF PENNSYLVANIA PRESS Manufactured

in the United

States of

America

L O N D O N : GEOFFREY CUMBERLEGE OXFORD UNIVERSITY PRESS

Contents Chapter

Page

Introduction S. Howard

ix Patterson

I. The Preservation of Competition

. . .

ι

II. The Preservation of Civil Liberties . . .

15

Thurman

W.

Arnold

Morris L. Ernst

III. Corporations and the Modern State .

.

.

35

Adolf A. Berle, Jr.

IV. Organized Labor in a Free Society . . . IJoyd

K.

V . The International Community in a Peaceful World Sir Alfred

63

Garrison

Zimmern

91

Introduction HE theme of the second series of the Benjamin Franklin Lectures of the University of Pennsylvania is the future of democratic capitalism. This challenge to speakers, listeners, and readers is as difficult and dangerous as it is vital in character. Indeed, the title of the series is another way of asking what are the chances of survival for America's present economic and political way of life. If capitalism and democracy are to survive, how, and in what f o r m ? What are their interrelationships? On one side of the world stands totalitarian communism, proclaimed by the Union of Soviet Socialist Republics of Russia, and propagandized by the Comintern and, later, by the Cominform. On the other side—this side—stands the democratic capitalism of the United States, which is being attacked from within as well as from without; it is undergoing such serious, rapid changes that its fundamental nature has been altered within a single generation. Between these two extremes, institutional, ideological, and geographical, stand the democratic and socialistic nations of Western Europe, including the so-called "welfare state" of Great Britain under its present Labour Government. Appraisals and prophecies should rest on sound analyIX

χ

INTRODUCTION

scs. Consequently, the best approach to the uncertain future of democratic capitalism seems to be through a better understanding of the chief institutions of our present economic order. Limits of time and space permit an examination only of those features which seem most characteristic, and of those phases which are currently regarded as most important. O f the many pertinent issues pressing for solution, or at least for presentation, the Committee could select only a few topics. Each topic presents a special but a significant part of the general theme. T o put it differently, each lecture may be regarded as a different instrument in the whole orchestra, or as a particular movement in the entire politico-economic symphony, which demands our close attention, and which, let us hope, is not too discordant or pessimistic for the reader of this volume to follow with some personal satisfaction. Of the many outstanding authorities and prominent persons in public life, well qualified by their rich experiences to speak in these various fields, the Committee was fortunate in receiving acceptance from those whose names appear in the preceding table of contents. T o these distinguished lecturers and to the large and enthusiastic audiences in attendance at the second series of the Benjamin Franklin Lectures, the Committee takes this opportunity to express its appreciation. S . HOWARD PATTERSON

The Preservation of Competition Thurman

Arnold

HE profession of an economic prophet of things to come, which lawyers and economists seem to be adopting today, is a difficult one. But in a time when no one is satisfied with the present, this is the role into which the speakers on this program are forced. My prophecy should begin with an examination of just what part the economic prophet is playing in our history and in our contemporary thought. The economist has two roles. One is that of the historian; the other role is that of a prophet— a necessary activity in every modern government. The role of the economist as an economic prophet is one which in other governments has been performed by priests, medicine men, and augurs. Today we judge the beneficial or dangerous tendencies of legislation and the trends of the age toward socialism, communism, or capitalism by scientific data which ranges from statistics to broader economic principles. The Romans did not use statistics. T h e function which the economist performs today was performed in Rome by a college of augurs who

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studied the flight of birds and examined the entrails of geese. If objectionable laws were proposed by one of the Roman proconsuls, the collegc of augurs would decide that the auguries were bad for the legislation. Conservative economists during the Roosevelt Administration voiced similar warnings. They were disguised as a scientific analysis of economic principles. Actually these economists were performing the same function that medicine men have performed since time immemorial. They were warning people in terms of their own phobias and prejudices. This is not a criticism of the economic prophet. He is necessary for our spiritual comfort and to preserve our beliefs in our traditional institutions. But in times of change, when older traditions do not seem to meet present needs, there will always be great clamor and conflict among the medicine men of the time, who today happen to be the economists. The guesses of economic prophets, like the guesses of the ancient medicine men, are nearly always wrong. For example, prior to the end of the war both the Wall Street journal and Henry Wallace agreed on one thing, that there would be enormous unemployment following the war. Henry Wallace wanted the government to provide for sixty million jobs. The Wall Street Journal replied that such action would be socialistic in its tendencies. But the two were agreed in their prediction as to unemployment, and their opinion was shared by nearly all of the learned men who studied the economic trend. They were both wrong. Instead of unemployment we developed the

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3

greatest shortage of labor after the war that is known in our history. Since that time our best thinkers of the right wing have been constantly predicting a depression which has not yet arrived. T h e economist as a prophet can protect himself only by delphic utterances which can be interpreted either way. Sometimes economic philosophers have understood current world trends sufficiently to foresee a broad picture of what is to come, but even then they are usually wrong in their appraisal. K a r l Marx predicted eventual socialization of Germany. H e was proved to be right except that he did not realize the result of the concentration of government power implicit in a successful socialist revolution. He thought that elimination of the profit motive would bring about the withering away of the state. Instead it brought about a dictatorship. Adam Smith, still the economic prophet of Western capitalism, held the firm conviction that human freedom was the greatest of social values. And to him human freedom meant freedom not only to think and to worship, but to enter into the competitive commercial field. And he further believed that without commercial freedom, that is freedom of movement of goods and people, no other freedoms could survive. H e was a moral philosopher who believed in freedom for its own sake and also that the world would be richer if commercial life were free. Adam Smith was a critic of the world he saw before him, a world where neither goods nor people could freely move. H e predicted that the wealth of nations depended

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on the elimination of these restrictions. He attacked the prevailing philosophy of his time, mercantilism—a philosophy that a nation could become rich by selling without buying, a philosophy that is still an obsession in American business. Adam Smith wrote on the eve of the American Revolution and before the French Revolution. None of the things he advocated happened during his lifetime. It was not until the nineteenth century that his ideal became the dominant one. He made a good guess as to the wealth that England could produce, once a free market was established. Adam Smith wrote in 1776. The industrial revolution of the eighteenth century came to fruition seventy-five years later, after a series of wars and revolutions. In 1820 England stood on the verge of the greatest industrial expansion which the world had ever known. The period of expansion which followed for all its faults was unequaled in human progress measured in the capacity to produce goods and raise human standards. Today, in 1949, we are again on the verge of a new industrial revolution. My belief is that this revolution will be as great an advance over the nineteenth century as the steel age was over the bronze age. We have an unlimited capacity to produce. That rapacity is now bottled up by the lack of free markets, by roejriabilityofje^^ tojnoye frcely__oyer_ STe-acea^vhich we regard as representing Westernj-iyijization^^ -ft is difficult indeed to predict just how and by what type

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5

of institution the free market of the twentieth century will eventually assert itself. Yet the period in many respects is not unlike the end of the Napoleonic Wars. Today we are faced with a debt which according to previous standards would have meant national bankruptcy. Similarly, England in 1820 was bankrupt according to eighteenth-century conceptions. Napoleon had set out to bankrupt England. He thought he had accomplished it. He never understood why the expected results of English bankruptcy did not occur. Today we are taxed to an extent which would previously have been thought sufficient to destroy all business initiative. But England in 1820 was also faced with an intolerable burden of taxation. Today we have become a welfare state with responsibility for the livelihood of every man, woman, and child. But England in 1820 was responsible for the livelihood of all her workers under laws which added to the wages of workmen according to the number of individuals they had to support, a program which was bankrupting the counties of England. Today we are afraid of the industrial development of Russia. But England in 1820 was afraid of the use of the English industrial techniques on the continent as a threat to her power. Today we are prosecuting communists. England in 1820 prosecuted Jacobins. The Congress of Vienna, which made the peace treaty after the Napoleonic Wars, was an attempt to restore the security that Europe had known in the eighteenth century. In that century monarchies had preserved what peace and order there was. And so the Congress of Vienna

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restored monarchies in every appropriate place. These monarchies were bound together by a holy alliance not much different in conception from the United Nations of today, with pretensions of unity but an absolute veto power. Today in our plan for the United Nations we are trying to restore the international set-up of the nineteenth century. We have been trying to stabilize the national sovereignties which under the leadership of England gave us the peace we used to know in the nineteenth century. Man always dreads change and tries to restore the past. And it was natural when we set up the United Nations that we should attribute the failure of peace in the twentieth century to the absence of an appropriate agreement between the national sovereignties of the past. W e sought to supply the deficiencies in international organizations first by the symbol of the Nuremberg Trials. Here was a sort of Supreme Court of the world penalizing any nation which by aggressive action disturbed the security of the restored nineteenth-century international pattern. Then we thought that an international bank would give financial unity to the United Nations. At Breton Woods we worked out the outlines of such a bank. And finally, just after the war closed, we gave Great Britain a loan which was supposed to restore her influence and leadership. Thus we gained the illusion of nineteenth-century security, and thought we had returned to that haven of refuge. Bolstered by that illusion, Congress cut taxes, withdrew our troops from Europe, and settled back into the peace which we

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thought would automatically follow. T h e illusion is now gone. The cold war with Russia has made us realize that this world is still an area of rivalry and an arena of struggle, in which the sovereignties of the nineteenth century are no longer able to play the political or economic role that we expected of them at the end of the war. Out of the Russian revolution have come two revolutionary ideas against which conservatives have been fighting a long time, but which stern necessity has compelled us to accept. The first is that our economic boundaries not only include the Western Hemisphere but reach up to the edge of Russian influence. W e have a new frontier which we must develop or we shall lose it to Russia. The nineteenth-century forces which permitted us to live in isolation are gone. W e have recognized these hard facts by adopting the Marshall Plan. That revolutionary project, once rejected as a crazy scheme to give a bottle of milk to every Hottentot, is now debated only with respect to the extent of the aid we are to provide. It is no longer considered a charitable obligation. It has become a contribution necessary for our self-preservation. Yet the nineteenth-century idea of the sanctity of independent sovereignties still exists to impede our progress. We are unwilling to permit the free flow of goods and people even over the areas that we identify with ourselves as belonging to the same culture and economy and that we are trying to make self-sustaining. People cannot move freely over national boundaries, nor has America rid itself

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CAPITALISM

of the notion that wc can sell without buying. A s Senator Connally recently said about the English effort to increase their dollar supply by competing with American oil for the markets of the world, "While we're handing them dollars they [the British] are doing their best to undercut us in selling oil . . . if she [Britain] is going to wage economic war against the United States, then I'm not in favor of giving her another dollar." Our situation with respect to rehabilitating Europe without permitting the free movement of people may be put in clearer focus by assuming what would happen if New York, Philadelphia, and Chicago had been destroyed by a foreign enemy. It would, of course, be necessary for the West and South, which hitherto had been economic colonies of the industrial East, to rehabilitate the industrial East. Such an effort would not make the West and South poorer. On the contrary, it would produce the greatest expansion of industry in the West and South that these areas had ever known. But suppose that during that period when the West and South were rehabilitating the industrial East they refused to let anyone move from New Y o r k , Philadelphia, or Chicago. In such a case the attempt would bankrupt the West and South and would never put the industrial East back on its feet. There would be no end to the contributions the West and South would have to make if they sought to maintain employment in the industrial East and at the same time prevented people and goods from moving.

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9

There would be no limit to the power of labor in the West and South protected by such artificial restrictions. The Marshall Plan is operating under that kind of handicap. For that reason there seems no end in sight to our contributions. It is apparent that today Europe would collapse without our help. We cannot stop that aid because of fear of Russia. On the other hand, we do not see how we can continue it indefinitely unless Europe pays for it. And the principal source of wealth which Europe could give us in payment for the Marshall Plan is the labor which we now exclude. And thus nineteenth-century habits of thought clash with twentieth-century necessities, and we have insecurity in the midst of plenty. I would predict that between these two contradictory ideals the one favoring a free market will eventually prevail. Yet I can understand how Russians, observing the economic confusion of today, might think that the capitalistic system was going to be destroyed by its inherent contradictions. Of course, labor is not the only import we refuse to take. But I would predict that the free movement of people will precede the free movement of goods. If the labor of the world is allowed to flow to the place where it is most needed, the population of the United States may well expand to a point where we shall become a have-not country. If this happened it might break down our resistance to imports. In such a situation we should need those imports to feed our people instead of being plagued with surplus potatoes and eggs as we are today. That was our economic

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policy during the time of our greatest expansion, expressed in the famous verse on the Statue of Liberty: Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore, Send these, the homeless, tempest-tossed, to me: I lift my lamp beside the golden door.

America has excelled every other nation in mass production. The principal reason for that progress has been that we have had the greatest free-trade area in the world in which to distribute the products of mass production. Mass production without a vast free-trade area only produces surpluses. The techniques of the twentieth century have made our present free-trade area too small. Inexorable economic forces are pushing us to unite Europe and the Western Hemisphere with the United States in a new free-trade area. I would expert those forces to win over all the conflicting pressures which now confuse our purpose. I am not afraid of present trends toward socialism. In my view the present dominant role of government in business exists only because we do not have the expanding free-trade area necessary for competitive capitalism in an age of mass production. Where free markets do not exist, government has to distribute. England, for example, appears to have gone socialistic. But I suggest this was perhaps the answer to the stern necessities of the times and that it is unlikely to survive once the western world becomes an area of economic opportunity for competing industry.

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Just as the monarchies of the eighteenth century were destroyed by the French Revolution, the Napoleonic Wars, and the minor revolutions which followed, so the national states of the nineteenth century are being changed and molded by the Russian Revolution and the cold war which now challenges us. Traditional ideas are leading us backward; economic necessity is pushing us forward into unfamiliar fields which as yet only government can enter. We are prosperous, yet we have little faith in the future. The scene is one of confusion. If our present colossal taxes, immense debt, universal pension schemes, crazy patchwork of fixed prices, and restricted production had been described to an economist ten years ago he could have easily proved that no economy could survive under such a regime. Yet we must face the astonishing fact that in spite of the violation of every principle heretofore considered sound, America is more prosperous than it has ever been before. No wild inflation has occurred. In spite of crazy restrictions we are producing more than ever before. Perhaps it cannot continue. Certainly we are going to have our periods of drastic readjustment. Yet few responsible experts seem to think we are going to have another depression like the last one. The demands on our economy are too great. We have the skill and the productive capacity to meet those demands. Somehow or other our business institutions are blundering through—even gaining confidence. Predictions of disaster are less frequent. Predictions of future economic stability are becoming common in business circles. And

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so Amcrica with many backward steps and countless inconsistencies is gradually assuming the role of leadership in integrating economies of western nations. This is the first revolutionary idea that has been forced upon us by the cold war. It is creating an effective demand for our goods and it is a stimulus to constantly increasing production which was entirely lacking during the dark days of the depression. The second revolutionary idea of the modern age is the notion that society owes every individual the opportunity for employment during his working life, and security of pensions in his old age. During the depression it was thought that such a program would ruin the characters and destroy the initiative of Americans. Today no one seems to think so. It is becoming recognized that if private industry is unable to provide such security, the state must step in. The immediate effects are alarming. Pension schemes crazier than anything Dr. Townsend ever dreamed of are being forced on the dying coal industry through collective bargaining. Farmers are getting economic security by price-fixing devices which require the production and subsequent destruction of millions of tons of potatoes and the storing of dried eggs in caves. Gigantic industrial concerns are achieving protection through the exercise of monopoly power. In the field of air transportation existing companies are receiving protection through the refusal of certificates of convenience and necessity to competing companies. In the field of foreign trade we are on the one hand trying to build up the economies of west-

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ern Europe so that they can export more goods, and on the other hand trying to prevent those exports in order to protect markets for American goods. When, and how, is the present conflict between the nineteenth-century habits of thought and twentieth-century economic necessities going to be resolved? Is it going to be done through the reading of books of liberal economists and the rejection of the ideas of reactionary ones—in other words, through the process we call education? I think not. Vigorous societies have a very mysterious way of creating the organizations which enable them to expand and prosper. England in 1820 was as confused as we are today. But in 1848 they were becoming the economic leaders of the world. Was this because the British industrialist who had ousted the Tories from control reasoned the thing out for England's good ? Was Jeremy Bentham, with his cruel scheme to make poverty a crime, on the theory that this would produce the greatest good for the greatest number, responsible? Was the fourteen-hour day for children under ten years old in the British textile mills the result of sound economic thinking? I doubt if thinking had anything to do with the movement away from restrictions and toward the free markets of the nineteenth century. It was the blind and cruel expansion not tempered by humanitarianism until the twentieth century. But it did give the world the greatest aid that it had yet known. There is reason to hope that the expansion of the twentieth-century industrial revolution may be more humanitarian. This not so much because men have become less

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selfish, but becausc there are more goods to distribute. Our new mass production cannot exist without the markets which are created by recognizing that the security and welfare of every individual is a natural right. This is perhaps a religious idea, yet human selfishness and desire for profit are the dynamic force which will take this idea out of the church and put it to work in the market place. There is still validity in the fundamental premise of Adam Smith. And so I expect that out of the confusion of the present times the industrial energy of private American organization will again become dominant, utilizing government powers or their protection, but no longer controlled by the government. The reason for that guess is that this is our traditional way of doing things. I do not think that America can succeed under any other idea. And I do not think that America will fail in meeting this great challenge.

T h e Preservation of Civil Liberties Morris L. Ernst N 1787, fifty-five youngsters gathered together for four months in this city to form a more perfect union. They were youngsters in the sense that their average age was forty-one; six of them were under thirty years of age. Although various forms of government were debated, little was said among them about freedom of speech and of the press. At that time the thirteen colonies were fearful and jealous of each other and were not concerned with national patterns of freedom of speech, press, or thought. Each state wanted to keep to itself—and away from the newly organized United States—the power to exercise these controls over the individual liberties of its citizens. It was only in the first ten amendments to the Constitution that our Bill of Rights came into existence. T h e First Amendment, with which these remarks are concerned, is in essence the greatest single contribution to the history of government that this country will ever make.

I

When the First A m e n d m e n t was written, it did not guarantee full rights. It merely stated, in effect, that this 15

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new federal government—the United States—should keep its hands off the civil rights of its citizens. The Constitution of the United States provides merely that the Congress shall not limit freedom of speech and thought. The states could impose their own limitations as each one saw fit. The states did so and continued to do so for more than a century and a quarter. In many states, for example, for thirty or forty years no Jew was allowed to hold public office. It was not until 1925 that the United States Supreme Court indicated for the first time that there should be a national pattern of freedom of speech, press, and thought, and that no state could curtail those fundamental freedoms without violating the Fourteenth Amendment, to be read in conjunction with the First Amendment. This is an enormous gamble that we have taken. The gamble is that we believe that truth will win out in a free, open market place of thought. There is no scientific proof of this statement anywhere on this planet or in the whole known history of man. The First Amendment, therefore, is a sheer act of faith. But I like acts of faith and I believe that they often work out better than conclusions reached by scientific slide rules and mathematical formulas. Originally, the Founding Fathers thought, in a rather limited way, that freedom of speech was for the benefit of the speaker, for the editor, and for the publisher. Nevertheless, the literature of Locke and Montesquieu, on which they relied, implied that the gospel of freedom arose from a vague idea that all men have a natural right to freedom.

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Not until more than a century later did Justices Holmes and Brandeis reappraise these concepts. They said, in effect, that the purpose of this freedom was not primarily to benefit the speaker or the editor, but to benefit the reader and the listener. Thus, they converted the theory underlying this act of faith into a gospel by making it a defense of the right to hear, the right to see, and the right to read. They went further by indicating that if truth is to win out in the market place of thought, we must have a regard for the market place itself. Truth cannot win out where there is no diversity of thought; truth cannot win out where there is a monopoly over the mind of man, on a hamlet level, a national level, or an international level. We are ready now for a reappraisal of the place of the individual in his exercise of his right to search for truth. This requires some historical background. At the time the Founding Fathers were concerning themselves with freedom, there were only one hundred newspapers in the United States, all weekly gazettes with an average circulation of less than one thousand, so that the people knew the names of the owners of the newspapers. Moreover, literacy was then rare. Out of America's four million inhabitants in 1787, between five and six hundred thousand of them were Negro slaves, all illiterate. Of the remainder of the population, one-half, or about 1,700,000 people, were thought totally unfit for higher learning. I refer to women, whose education in that period fitted them only to play the spinet and wield the needle.

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Two tools are nccessary for the matching of wits by which the truth can be reached. One tool is literacy. At that time, less than one-quarter of the people in the thirteen colonies could read or write their own names. (I am estimating the figure since no census of literacy in that period has been discovered.) Records found in Williamsburg, Virginia, which was the sophisticated Deauville of America, show that of the jurors of that era, less than 25 per cent could read or write their own names. So the tool of literacy was absent. The second tool is a good means of communication, which also was lacking. It took six weeks in the winter to go from Salem, Massachusetts, to Richmond, Virginia. To go from New York to Philadelphia in 1781, one would take a boat at the Murray Street Wharf in Manhattan, wind and weather permitting, arrive at New Brunswick after a long voyage, sleep there and drive the next day to Trenton, then spend the following day on Mersereau's "Flying Machine," a stage coach, at a cost of $3.50 per head (with blanket) reaching Philadelphia in three days from New York City. President Roosevelt once asked me to study China in relation to a unified governmental national policy. I urged that we send a couple of broadcasting stations and twenty thousand loud-speakers to China instead of airplanes. Without an informed public there can be no nation, and without literacy and communication there must be a dictatorship. That does not mean that literacy and communication will prevent people from being enslaved.

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Certainly they were under Hitler's rule and are today under Stalin's. But, by and large, an informed public opinion makes for democracy and militates against despotism. In 1787 America had an important institution of intellectual freedom in the town meeting where people stood up, dug their heels in the ground, and said: "Here we are and this is what we think." That was pure democracy and direct communication of ideas in small face-to-face groups. Since that time, however, communication has been disturbed by the invention of two new instruments, radios and movies. As a result, we are using the mass media of technology for getting at the mind of man. However, we now have only four radio networks and only three press associations. We have lost one thousand daily newspapers in the last two decades, and what is more important than the dailies, twenty-five hundred weeklies in the small towns of America have disappeared. I am more frightened about the disappearance of these weeklies than I am about the dailies, because democracy is a "grass roots" process, and the nation's democracy cannot rise above the level of diversity of opinion within the smallest hamlet. On investigation, I once discovered that there were over one hundred cities where there was only one newspaper remaining, and that newspaper owned the only radio station. To which I ask: What price democracy? What is the possibility of an individual in that area getting the necessary clash of ideas and matching of wits

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from which alone truth has a chancc to arise? There is a state in this country where one ownership controls more than one-half of all the independent newspapers. I say: How long do we wait? Do we get exercised only when and where one man owns all the newspapers? I am not talking about individual devils or heroes; I do not talk in terms of right or wrong, virtue or sin, Republican or Democrat. I am talking about our great gamble; namely, that truth can win only by a matching of ideas in the mad and wondrous mind of man. This cannot be done where there is control over, or a combination of, the common agencies of communication. Today five motion picture companies dominate the screen diet of the American people. T h e Supreme Court has declared that these are antisocial corporations, insofar as they have restrained communication in violation of our monopoly statutes. It has also been said that the Associated Press similarly restrains freedom of thought in America. The Supreme Court likewise has held that the three big radio networks are in violation of the Sherman Law in putting restraint on what ideas can go over the air. Such important issues are scarcely mentioned on the radio of America or in the press of our land. W e face an obstacle, a serious bottleneck, in seeking to improve the market place of free thought when the main pipelines to the minds of most men are owned by a few people who have been said by our highest court to be restraining the only priceless commodity known to man—the precious freedom of ideas.

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The atom bomb is a puny weapon compared to that which warps or dwarfs the mind of man. In fact, the communication of ideas to men's minds is the only weapon that can protect us from the atom bomb. It can control atomic fission so that it will be an implement for increased production and leisure rather than an instrument of destruction and terror. The President's Committee on Civil Rights discussed many controversial issues, such as the poll tax, fair employment practices, and an anti-lynch bill. A unanimous recommendation of that commission, which has scarcely been mentioned in the press or over the radio, is that we must look at our market place of thought with respect to its possible distortion through stealth and anonymity. We are living in a very busy world. No one has time enough to look into the merits of all the important issues on which he should make up his mind. Since we cannot dig into innumerable research files, we are forced to rely on the names of authorities. I will confess, for example, that I was concerned about a fair trial for Sacco and Vanzetti. I first made up my mind that the trial had not been a decent American trial when I read Felix Frankfurter's book on that subject. Long after Sacco and Vanzetti had been electrocuted, I read the original records of the case, published in six volumes through the generosity of the Rockefellers, with a foreword by John W. Davis and others who thought the complete records should be preserved for future study. My first opinion on the SaccoVanzetti issue was thus based on a book written by a man

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whose judgment I respected. All of us similarly accept the views of others on many issues instead of making up our own minds from firsthand information. Through the increased use of mass media, postmen carry millions of pamphlets and other printed matter designed to persuade people to adopt certain views. I am opposed to anything that would give the government power to censor what goes into the mail pouches because I believe that the American people, not their executives, should decide on issues. But I do suggest, as the President's Committee on Civil Rights proposed, that in order to prepare our market place for clear thinking, the public should have the right to know who is behind those pamphlets. Let me give you some examples of propaganda from anonymous sources. I was stopping at the White House when a picket line was there protesting American preparedness against Hitler. Y o u remember the picket lines when Stalin and Hitler were in bed together, and England was holding the fort of freedom alone. That picket line vanished suddenly when Hitler and Stalin fell out, and the Germans invaded Russia. I would defend the right of anybody, for any purpose, to picket the President's home, but I should like to know by whom such pickets are employed. When I crossed the picket line one day, I talked to a picket about the procedure. I found out that it cost fifty thousand dollars a year to run that picket line. There were twelve pickets organized in three shifts, paid five dollars a day each,

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given food and lodging—the equivalent of fifty thousand dollars a year. I asked government agencies to inform me of the names of the men or women who financed the pickets. If they have the right to put up that money, haven't we, in turn, the right to know for whom those paid pickets are speaking? I received the names, but I can't make them public yet. When he was head of the Communist Party in America, Earl Browder asked me if I was interested in the Scottsboro case. I replied, "Yes, I've looked into that record. They have not had a fair American trial. I don't know whether they are innocent or guilty and, frankly, I don't care. I am interested solely in their getting a decent hearing in the United States. What do you want of m e ? " Mr. Browder said, "We've run that mine dry. We've raised one million dollars and we can't raise another nickel." He then asked if I would form a united front committee to go on with the defense. I said that I would. Subsequently, I called into my office the leaders of the Methodist and Episcopal churches, officers of the Y.M.C.A. and the Y.W.C.A., Norman Thomas, and members of the American Civil Liberties Union. I laid down the single condition that there be a public accounting of all monies raised for this defense. Finally, I discovered from the chief counsel for the defense—now Judge Liebowitz—that it cost sixty thousand dollars to handle the Scottsboro case and that one million dollars had been raised. I take the position that the Communists had the right to raise one million dollars and the further

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right to spend only sixty thousand dollars on the cause for which the money was raised. Indeed, they may have had the right to put the difference, over nine hundred thousand dollars, into anything they wanted. But I insist that the contributors and the general public have the right to know who put up the money and what was done with it. When John L. Lewis spoke on the radio during one of President Roosevelt's campaigns, his broadcast cost fifty thousand dollars. He made it clear that it was not the mine workers' money that was paying for the network time. Six months later it developed that a Mr. Davis, an oil man, who had been in touch with Hitler trying to work out peace terms, had financed that particular broadcast. Davis had the right to put up that money, and Lewis had the right to take it for that purpose. The network also had the right to do what it did, but I believe that Lewis should have been compelled to name the man for whom he was speaking. The Federal Communications Commission now has regulations to prevent that kind of deception by stealth, anonymity, and omission. Let's look at the Waldorf Conference, because such conferences are valuable skirmishes in the great battle for freedom. Since we can't go to Russia for that contest, we might as well fight it out here, insofar as they will come over. Here is the story of this one. Professor Harlow Shapley was asked, " W h o put up the money, and will you show a statement?" He telegraphed back, "Our books are open." But when someone asked the treasurer of the commit-

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tee for the statement, he replied, " D o n ' t be silly. W e ' r e not going to show our financial records. But we will tell you that toward the end of February we had two hundredodd dollars in the bank and we owed over fourteen thousand dollars. That is all we will tell you." I did some further digging into this particular situation. As a result, I am convinced that it took a minimum of fifty thousand dollars to run that show and to get its story to the people. I think it is important that we know who were the main contributors and what happened to the money that was raised at Madison Square Garden, where the deposit for hiring the hall alone is six thousand dollars. T o go beyond that, I should like to know who invited Shostakovich

to come to America. Finally, I

should like to know who picked the Rumanian and English delegates. I resent the fact that our government wouldn't let all the delegates come. T o the extent that we excluded certain delegates, we were stooping to the level of Stalin. W e were testifying to our own insecurity, and we were giving evidence to the people of the world that we were really not so sure that truth would eventually win out. On that same philosophy of freedom of thought, I have defended more than one hundred books attacked by censors over a period of years. In this connection, I wish to commend to you Judge Curtis Bok for writing what is to date, by all odds, the greatest single contribution that has been uttered from any bench in America on freedom from censorship.

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CAPITALISM

In this decision, Judge Bok has applied to problems of obscenity censorship a test more nearly resembling the strictness with which the courts have viewed political censorship than the vague visceral reactions with which they have judged problems of so