Economic regulation

“ The question of the play of economic forces thus generally reduces itself to a problem which may be thus stated: What are the conditions of industrial equilibrium? How must prices, rates of wages, and profit be related in order that the various classes concerned may receive such proportions of produce as are compatible with the maintenance of the existing system of organisation? If any specified change occurs, if production becomes easier or more difficult, if a tax be imposed, or a regulation of any kind affects previous conditions, what changes will be necessary to restore the equilibrium? ”

“ People who opposed some long-overdue measure of State regulation believed themselves to be justified by the eternal verities of economic law, and this claim even the advocates of the measure seldom ventured to dispute. They took refuge rather in a conception of economic law as a dangerous monster, whose claws must be clipped in the interests of the higher good. ”

“ CONTROL OF ECONOMIC INTERESTS.—The more recent state constitutions provide in considerable detail for the regulation of economic interests within the state. The activities of industrial organizations are often narrowly restricted. In many states the constitution provides for a corporation commission with large powers in the regulation of rates and charges, as well as general supervision of corporate business. Many recent constitutions specify the conditions under which women and children may be employed in industrial establishments. ”

“ Wherever the conditions, obtaining in the case of railroad and public service corporations, are duplicated in that of an industrial corporation, a genuinely national economic system would demand the adoption of similar measures. How far or how often these measures would be necessarily applied to industrial corporations could be learned only after a long period of experimentation, and during this period the policy of recognition, tempered by regulation under definite conditions and graduated taxation of net profits would have to be applied. ”

“ Under the power to regulate commerce, they assume indefinitely that also over agriculture and manufactures, and call it regulation to take the earnings of one of these branches of industry, and that too the most depressed, and put them into the pockets of the other, the most flourishing of all. ”

“ Economic conditions require readjustment, important matters of trade must be regulated, vital questions of finance and taxation must be handled, in fact, the whole country must settle down to production, manufacture, distribution of merchandise, and the transaction of the nation’s regular business. ”

“ The workers in a given industry should all be combined in one autonomous unit, and their work should not be subject to any outside control. The state should fix the price at which they produce, but should leave the industry self-governing in all other respects. In fixing prices, the state should, as far as possible, allow each industry to profit by any improvements which it might introduce into its own processes, but should endeavor to prevent undeserved loss or gain through changes in external economic conditions. ”

“ The Government took to itself, by defence regulation, specific powers to requisition stocks of goods and materials, to pay manufacturers on the basis of cost and a fair profit, to license dealers, to enforce priorities of distribution, and in other ways to establish State control over trade. ”

“ And this concern and the policy based upon it * * * has expression * * * in a well-known national enactment. * * * competition, not combination, should be the law of the trade."
And so is established the proposition that the Statutory and Common Law, in relation to public policy, is that the public welfare is best served by giving the power and liberty of price fixing as to commodities to the whole body of our people, worked out through competition, and protected from control by any lesser group or groups, or even the Government itself. ”

“ They who wish the destruction of that balance, and would fain by arbitrary regulation decree that defective production should not be compensated by increased price, directly lay their axe to the root of production itself. ”

“ A regulation of money, is always a regulation of prices, and an interposition by law, in the economy of individuals. It covers effort and competition in every shape, and combines in a mass the several evils which would flow from distinct legal prices, for each separate object of human industry. ”

“ Fair exchange above laws.—Under perfect freedom of exchange, the general law of supply and demand already illustrated is more effective than any laws can be in adjusting wages or profit to efforts in production, and in adjusting interest or rent or both to the capital employed or to other means of production controlled. ”

“ Accordingly, such only are the regulations to be found in the laws of the United States; whose objects are to give encouragement to the enterprise of our own merchants, and to advance our navigation and manufactures.
And it is in reference to these general relations of commerce, that an establishment which furnishes facilities to circulation, and a convenient medium of exchange and alienation, is to be regarded as a regulation of trade. ”

“ It is not for courts to determine the course of the Nation's economic development. Economists may recommend, the legislative and executive branches may chart legal courses by which the competitive forces of business can seek to reduce costs ad increase production so that a higher standard of living may be available to all. ”

“ A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies. It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.
A regulation which enables those of the same trade to tax themselves, in order to provide for their poor, their sick, their widows and orphans, by giving them a common interest to manage, renders such assemblies necessary. ”

“ The mechanical interest can have no aversion to it, when they are informed that an efficient government will protect and encourage commerce, which is the very soul of mechanism. ...Nor can the honest farmer have any objection; the increase of commerce will naturally increase the demand for such articles as he may have for sale; he will be enabled to pay his taxes and, if economy shakes hands with industry, increase his farm and live independent of troublesome creditors. ”

“ A government would, by prohibitory laws, put a stop to the importation of some commodity; and when by this it had caused the commodity to be produced at home, it would plume itself upon having enriched the country with a new branch of industry, would parade in statistical tables the amount of produce yielded and labour employed in the production, and take credit for the whole of this as a gain to the country, obtained through the prohibitory law. ”

“ Much could be added to show the impossibility of replacing any body, any government or governmental agency as a successful substitute for all the peoples of the world, acting jointly and by means of free competition, as the price fixers of non-monopolistic commodities. ”

“ That regulating agency, whatever its nature, must be paid for—must involve a deduction from the total proceeds of the labor regulated. The present system is one under which the share of the total proceeds that goes to pay for regulation is considerable; and, under better systems to be expected hereafter, there will doubtless be a decrease in the cost of regulation. But, for the present, our comparatively-costly system has the justification that it alone succeeds. Regulation is costly because the men to be regulated are defective. ”

“ Every practical economic problem that confronts us calls in some degree for the exercise of state activity. It is necessary for us then, if we are to render sound judgment on these questions, to have a clear opinion as to the proper sphere of government action, as to how far the State should interfere in the economic activities of private individuals. We cannot do better than to state first the main functions of a modern state. The modern industrial system, as we saw in the first section, is based upon certain fundamental institutions—personal liberty, competition, and private property. ”

“ The State, acting independently or through the Trade Unions, shall check all disloyal competition in the realms of production, as well as those activities that hamper the normal development of the national economy, and shall encourage, on the other hand, all efforts aimed at improving the national economy. ”

“ The government has pursued a moderate program of economic reform and privatization, resulting in a gradual lifting of state controls over economic activity and a shifting of assets into the private sector. Nevertheless, government control over key sectors of the economy remains strong. ”

“ Is it a regulation of commerce or mutual intercourse, which is proposed? Who does not see, that the agricultural, the manufacturing, and the navigating states, may have a real or supposed difference of interest in its adoption. If a system of regulations, on the other hand, is prepared by a general government, the inequalities of one part may, and ordinarily will, under the guidance of wise councils, correct and meliorate those of another. The necessity of a sacrifice of one for the benefit of all may not, and probably will not, be felt at the moment by the state called upon to make it. ”

“ No pretext of developing resources, diversifying industry, fostering weak interests, or protecting labor, could be made an excuse for commercial restrictions. It was ordained that business shall be left to voluntary enterprise, to the spontaneous impulses of private effort, and to stand upon the stable basis of its natural laws rather than upon the artificial support of regulative State legislation. ”

“ In the survey of the economic interests of the members of the Federal Convention, given below, it is shown that a few leading men were directly connected with industrial concerns, although it is not apparent that the protection of industries was their chief consideration, in spite of the fact that they did undoubtedly contemplate such a system. ”

“ If the State can wrench the control of the prices of commodities from the hands of all the people exercising their inalienable right of pursuit through the means of free competition pursued at their free discretions, it is, of course, inevitably fixing the compensation for their services and labors. ”

“ Where an industry producing articles of common consumption or materials necessary to industries producing articles of common consumption cannot be at once publicly owned, State control over such industries should be retained. ”

“ By protective duties and bounties on exportation, by subsidies of all sorts to manufactures and national navigation, by the acquiring of transmarine colonies, by the creation of privileged commercial companies, by the inspection of manufacturing processes, by the perfecting of means of transportation and the suppression of interior custom-houses, every state strives to increase its means of production, to close its market to its competitors, and to make the balance of trade incline in its favor. ”

“ Let the farmer who groans beneath the weight of direct taxation seek relief from a government whose extensive jurisdiction will enable 294it to extract the resources of our country by means of imposts and customs. Let the merchant, who complains of the restrictions and exclusions imposed upon his vessels by foreign nations, unite his influence in establishing a power that shall retaliate those injuries and insure him success in his honest pursuits by a general system of commercial regulations. ”

“ COMBINATIONS OF CAPITAL. We declare our opposition to all combinations of capital, organized in trusts or otherwise, to control arbitrarily the condition of trade among our citizens; and we recommend to Congress and the state legislatures, in their respective jurisdictions, such legislation as will prevent the execution of all schemes to oppress the people by undue charges on their supplies or by unjust rates for the transportation of their products to market. We approve the legislation by Congress to prevent alike unjust burdens and unfair discrimination between the states. ”

“ The Realm may further legislate, in case of urgent necessity and in the interest of the national economy, to oblige business undertakings or associations to combine, on the basis of self administration, with a view to securing the co-operation of all the productive forces of the nation, to associating employers and employed in the administration, and to regulating production, manufacture, distribution, employment, prices, as also import and export of goods on principles of public economy. ”

“ Under the rule of an unrestricted commercial intercourse throughout the world, the principle of supply and demand would control the movements of commerce without the aid of legislation; and, when once fully established, it would give stability and security to production everywhere. The products of the world entering into commerce would localize themselves where they naturally belong—where most could be produced with the least labor; and, population obeying the laws of equalization, would adjust itself to the demands of the respective interests of productive labor. ”

“ Such laws as the franchise-tax law in this State, which the Court of Appeals recently unanimously decided constitutional- such a law as that passed in Congress last year for the purpose of establishing a Department of Commerce and Labor, under which there should be a bureau to oversee and secure publicity from the great corporations which do an interstate business--such a law as that passed at the same time for the regulation of the great highways of commerce so as to keep these roads clear on fair terms to all producers in getting their goods to market--these laws are in the interest not merely of the people as a whole, but of the propertied classes. For in no way is the stability of property better assured than by making it patent to our people that property bears its proper share of the burdens of the State; ”