retrogression. Invention and a patent system that will stimulate invention are therefore required even if all other considerations are favorable.

But there are special reasons of a serious character why it is at the present time more necessary than ever before that the progress of invention and the promotion of the useful arts should be stimulated.

Up to a recent time our situation in all respects has been such as to promote industrial development. We have had as a background for it an enormous amount of free land which was open to cultivation. This has now been practically exhausted. This circumstance affects our industrial situation disadvantageously; but it had to come. We must use every weapon to neutralize the loss of this asset.

Again, up to recent years (to repeat in part what has already been said) public opinion, the trend of legislation and of the law and what seemed to be the settled ideas and principles of our social organization were distinctly favorable to our industries and conspired to promote them.

The relations between capital and labor were such that while the workingman received a larger return for his effort than came to him in any other part of the world, the margin of profit to the capitalist and manufacturer was such as to encourage him to strenuous efforts. We have had, rightly or wrongly, a tariff system that to some extent protected manufactures against foreign competition. We have had a public sentiment which crystalized on the proposition that nothing was so important as industrial prosperity and gladly gave what may now be regarded even as excessive encouragement to industrial effort. Lawmakers and the courts, publicists, newspapers and writers generally were all on the side of business expansion.

As a result of the conditions under which business was carried on, we developed men of the highest administrative capacity, who organized industries, opened and exploited new fields, trained labor and in every way enthusiastically promoted the expansion of industrial and commercial effort. These industrial leaders were admired and encouraged because of the extraordinary re

sults of their efforts. If it had not been for this admiration and encouragement they would never have accomplished or undertaken to accomplish their great work. It was their pride of achievement and the consciousness that they were appreciated by the community, far more than the prospect of gain, that inspired them.

Such men are now the object of popular criticism and there can be no reasonable doubt that, because of such criticism they are becoming disheartened to such an extent as to lose at least a part of their capacity for serving the community.

These conditions, so favorable to industrial growth, have largely disappeared. The prevailing popular sentiment of today and the new laws and new interpretation of old laws based upon that sentiment are such as to require a definite readjustment of business and of business methods in all their relations. It may well be that it is a social necessity that such a readjustment should take place, that the monopolistic tendencies of business and of business men should be restrained, and that industrial methods and practices should be reformed, whatever may be the consequences. It may be essential that individualism should be checked and society reorganized on a basis that will insure a different distribution of wealth and of the fruits of productive effort. With that end in view it may be that we should go still farther with legislation which operates to reduce the productive capacity of labor, and should accept as proper the reduced efficiency arising from the principles of trade unionism. It may be that there should no longer be the element of protection in our tariff. It may be that distrust of business men and of business methods is a healthy sign of a sounder moral insight. It is not impossible that when we have lived through this era of change we shall be a stronger, better, happier and more prosperous community. But the process of readjustment will surely be one of shock to our industries. They will endure, even if they could never have grown to their present proportions had the ideas of today prevailed fifty years ago. It is, however, clearly a time in which we should hold on to any feature of our social organization that is right, and honest, and able to sustain our indus

tries during a period of stress. It is no time to reduce the encouragement to invention afforded by our patent system. As far as the matter of increased returns to labor is concerned, it is absolutely clear, that we have been able to progress to so great an extent in this direction only because of our inventions. They have reduced cost at least as rapidly as it has been increased by the higher wages and shorter hours of our workingmen.

We must not forget that, from this time on, the question of foreign competition is sure to be more serious every year. Today, except for the artificial protection of tariff laws, the whole world, because of improvements in transportation facilities due to invention, is in immediate competition. No industry can thrive in any country unless that country has peculiar advantages, either natural or acquired, so as to be able to produce at such low cost as to meet the competition of other countries in that industry. The natural advantages of the United States are great in some directions, but are by no means altogether controlling. In our competition with foreigners we are hampered in many ways. In our cost of production we are embarrassed by the high cost of our labor as compared with that of other countries; for there is no doubt whatever that, whether measured in money or in commodities, our wages, as we desire to have them, are higher than in any other country in the world and much higher than in many of the manufacturing countries which are our sharpest competitors. We have in the past more than held our own in international competition, partly because we have surpassed all other countries in shop and business organization, but chiefly because of our superiority as inventors and in the quick and comprehensive adoption of inventions.

While it is true that the rest of the world may and does take our inventions freely, as we may and do take theirs, foreign countries have been for the most part a long distance behind us in the adoption of new ideas and methods, and we have been able to maintain our advantage by the rapidity with which, with us, improvements have succeeded each other. But if the process of continuous improvement is checked, we shall lose this advantage and there will be no alternative except the destruction of some

or many of our most important industries or a reduction in the wages and standard of living of our workmen. It is clear that the latter would be most disastrous and might well lead not only to industrial but to social crises of a most disturbing character. An important consideration, often overlooked, is that the opportunity for improvements based upon invention is in many branches of industry growing less every year. There is no longer room for the striking advances in agricultural machinery, machinery for making fabrics and shoes, electrical and other power apparatus and machinery employed in the production and working of wood and metals and in other great departments of industry that there was a few years ago. It may almost be said that many of the arts are already developed almost to the point of saturation. It is not so easy as it was to find out how they can be improved and to improve them. This does not mean that there is not opportunity even in such industries for an infinite number of relatively small improvements, and occasionally for a larger invention, which, if we can make them, will be of the greatest value in the increase of efficiency and economy and the improvement of quality. But the conditions are clearly such that it is of the utmost importance that there should be adequate encouragement to make these inventions, and particularly that there should be every possible incentive to seek out and to develop an incessant series of the minor improvements which may in the aggregate afford great possibilities of advancement. The latter are of a kind that especially requires encouragement, for they do not greatly appeal to the imagination and the direct returns from any one of them are not likely to be large. They are not often developed except by definite and strenuous work, intelligently applied. Close and careful study and scientific effort, carried on persistently, systematically and at great expense, are generally required.

There are of course some arts of great importance in which development has not much more than begun. There is no limit to the inventions that may be made in chemistry, where the scientific men are constantly revising their theories as the result of persistent study; and every revision of a theory may lead to

new and most astonishing practical applications. It is not impossible that agriculture and the production of food products may be revolutionized during the coming century by chemical inventions. In other fields there is room for many great and important improvements, which cannot be realized unless our patent system affords the requisite encouragement.

There are other conditions and so-called "tendencies" of the times which surely operate to check industrial development, and may do so to a destructive extent. I call attention to a few only of them.

There can be no doubt that our present inordinate national, state and municipal expenditure, which is constantly increasing and which is largely borne by our industries, imposes on them a most serious burden and thereby hampers their sound development. Much of this expenditure is wasteful, much of it is unproductive, but there seems no hope that it will be checked. The present uncertainty as to our monetary, banking and currency system may continue for a long time. While it lasts, it depresses industry. Uncertainty as to the law and as to new legislation which may be passed affecting our commercial and industrial activities, seems likely to be a chronic evil, for many years. It surely embarrasses and checks industrial enterprise. Individual extravagance is as marked as that of our governing bodies. From this our industries suffer. The inclination for amusement, rather than for work, which seems to prevail as never before among all grades and classes of those who are engaged in industrial pursuits, must in the long run seriously affect their efficiency. It may well be that we are using up and perhaps wasting our natural resources to such an extent that in a comparatively short time our industries will suffer.

If such unstable conditions, affecting business at the present time, exist to anything like the extent which seems to me probable, it must be of vital importance that there should be no slackening of invention among our people. More than ever, when there are causes at work which depress enthusiasm and hold back development, should inventive effort be promoted and the inventive spirit fostered. It would seem to be no time for the