Private Fortunes and the Public Future


WE have been hearing a good deal during recent months regarding the virtues and the defects of 'rugged individualism,' so called, and 'private initiative,' so called. The champions of both are apparently unaware of the fact that in a country which has written constitutions, courts, and majority rule neither 'rugged individualism' nor 'private initiative' flourishes uncontrolled to greater or lesser extent by public interest. To take a single instance, the 'rugged individualists' apparently forget that the Interstate Commerce Law, passed in the Cleveland Administration and subsequently modified and enlarged, has made the existence of another Jay Gould an absolute impossibility, just as believers in private initiative forget the outrageous abuses which led to the enactment of the law. Similarly, believers in private initiative may fail to remember that state and municipal governments have set up standards in health, industry, education, and other fields, to which individuals must conform. On the one hand, uncontrolled individualism is an anachronism; on the other hand, private beneficence still has large scope.

Inasmuch as, at the present time, regulation by the central government at Washington and the prevention of abuse by the central government at Washington have become so prominent, it is perhaps worth while to point out some of the things that have been accomplished by private initiative as well as some of the things which we cannot in America here and now accomplish by extreme centralization of power. The outcome, as I see it, under our present economic system, is certainly for a long time to come a middle path which will allow and encourage opportunity for individual development and expression and yet prevent abuses which grow up unless somewhere there resides the power to expose and to check greed or folly.

Let me begin by giving an example of something that has been accomplished by wise, devoted, and farsighted individuals in their capacity as private citizens, which would probably never have been done by a central government itself and for the achievement of which the particular individuals in question could not have been drafted by governmental agencies.

Quite recently a large assembly gathered in the City of New York to celebrate the fiftieth anniversary of the founding of the Montefiore Hospital for Chronic Diseases. This institution was established fifty years ago by a group of devoted and grateful men and women and by them dedicated to the relief of suffering humanity. It took its name from a wise and great philanthropist whose whole life had been devoted to human welfare. The institution began inconspicuously in a small house with accommodations for some twenty-odd chronic patients. In the half century since it was established it has so grown that it is now no longer a home for hopeless incurables but a hospital to which chronic sufferers are sent in the hope and expectation that they will receive either relief or cure. From its small and inconspicuous beginning it has come to be the largest hospital in the world for the care, treatment, and study of chronic diseases. Its patients are no longer merely bedridden men and women, but human beings chronically but by no means all hopelessly ill, ranging in age from two or three up to ninety or even higher. It contains laboratories for the study of chronic diseases directed by one of the most distinguished experimental pathologists in this country. Its medical and surgical services are under the most expert direction obtainable in Greater New York. From the score of beds in the little house in which it began, it has expanded until it now cares for upwards of one thousand patients in comfort. Attached to it is a school for the younger patients, and in the country a convalescent home to which those who have been measurably benefited may be sent for further convalescence.

Montefiore Hospital is a costly undertaking. Its costs are high, not only in respect to money, but in respect to devotion and interest. The money, the devotion, the interest, come from those who are grateful for their own good fortune in life or who wish to perpetuate the memory of friends and relatives who have passed away. Its current conduct is in the hands of unremunerated men and women who seek nothing for themselves, not even prominence or thanks, who desire nothing more than the satisfaction of consecrating as much of their time and energy and thought and means as possible to the realization of a beneficent purpose.

This institution is only one of hundreds — hospitals, schools, universities, museums, orchestras, and various associations — which relieve the state of part of its burden, and which, I venture to say, as a general rule carry on more economically and more effectively than similar institutions which are managed by public authorities. I do not say this in criticism of the work of public authorities; but it is obvious that, if public authority is burdened by the mass of its responsibilities, in consequence of the mere mass of responsibilities more or less red tape must be employed, and that the diversion of responsibility into private hands not only relieves the state but tends to establish ideals which are stimulating to those entrusted with public responsibility. Centralization of some kind is in a country like ours, and indeed in every modern country, inevitable, indispensable, and desirable; but if one studies the history of higher education or philanthropies in the United States one observes that almost invariably the standards were set, in the first place, by institutions under private control, and that when these institutions have proved what is feasible the task of public authorities in establishing and enforcing these standards everywhere has been made enormously easier. On the other hand, both the state and the private organizations can do and have done much to expose and remedy abuses in industry and philanthropy, so called.

I cannot within the limits of this paper enumerate the institutions privately endowed, supported, and managed which have long played and still play a leading role in American philanthropy and American education, but I can perhaps bring the point home to my readers if I specify Harvard, Yale, Columbia, the University of Chicago, Princeton, the Boston Museum of Fine Arts, the Metropolitan Museum of Art, the American Museum of Natural History, the Huntington Library and Art Gallery, the Philadelphia Museum, the Philharmonic Symphony Society, great hospitals like the Johns Hopkins, the Peter Bent Brigham, Mount Sinai, the Presbyterian, the New York, and the Michael Reese, the adult education movement, and similar institutions and activities situated, managed, and privately maintained in every city and in every state of the Union. I do not for a moment forget that the nation, the several states, and cities have made and are making splendid contributions to philanthropy and education; I wish only to call attention to the fact that we in America cannot afford to overlook the important roIe played by voluntary effort in setting up higher standards in education, in public health, in the practice of medicine, in the development of art, and in social welfare by institutions which would probably never have existed but for private initiative and voluntary effort.

We happen to be living in an era when, in consequence of human gullibility and fallibility, the world has been overtaken by panic and distress such as private initiative alone cannot cope with. To an extent that could previously never have been expected the cities, the states, and the central government have been compelled to undertake to provide relief where voluntary agencies have been unequal to the task. I have no criticism to make on this score. It is a splendid and inspiring thing that at a time of great social crisis the American nation has found itself possessed of a form of government which can relieve the poor, clothe the naked, and provide support for the unemployed; but at this very moment when the government is doing all that it can humanly do in these various directions it behooves us to remember the essence of our tradition of private effort and benefaction. There is not a country in the world that does not envy us the spirit which led the first settlers of New England to found Harvard College on their own initiative, and which from that day to this has led to the creation and support of one great institution after another devoted to the cultivation of science and art or to the pursuit of some form of organized philanthropy. The energy and devotion which have for three hundred years been applied to private philanthropy are, under our American system of government, largely unavailable for public life. The men and women who quietly and unostentatiously have built up the institutions which I have named have no relish for the rough-and-tumble of public life under democratic conditions. Shall this courage and this devotion still find an adequate means of expression, or shall they be allowed to run largely to waste as they do run to waste in so many countries in the Old World?


Let me give a concrete example of the way in which, in this country, private initiative not only has performed enormous social service, but has enabled government itself to incorporate social service thus achieved in the very substance of our body politic. There was in America, in 1890, no medical school which could by any possibility be compared with the leading medical faculties of the Germany of that date and subsequently. There were, however, in this country and in Canada, one hundred and fifty-five medical schools, almost all of them totally without the facilities or the ideals which at the same period prevailed in Germany. These were mainly private undertakings uncontrolled by law or public opinion — a fine example of one sort of thing that uncontrolled private institutions may do. Sporadic efforts had been made during the previous half century in various places and by various organizations to effect radical improvements in medical education. Viewed in the light of what has been accomplished since 1890, these sporadic efforts accomplished very little indeed. But about 1890 an epoch-making event took place. With funds provided by a simple, farseeing Baltimore merchant, the Johns Hopkins Medical School and the Johns Hopkins Hospital were established as integral parts of a university, itself the first of its kind in this country. Private initiative did something in Baltimore at that time that neither the central federal government nor a state government nor a municipal government could possibly have accomplished then or now. Private initiative, furnished with funds by a great benefactor, set up out of hand a hospital and a medical school, to the faculty and staff of which the best-trained men obtainable in the whole world were called, neither local pull nor local influence playing the slightest part: Dr. Welch, who had been trained in Breslau and Strassburg; Dr. Osler, who had been trained in the great London hospitals, in Paris, and in Germany; Dr. Halsted, who had been trained in Switzerland and in Germany; Dr. Kelly, who had been trained in Germany; Dr. Mall, Dr. Abel, Dr. Howell, and others who brought to this country from abroad ideals up to that time unknown. Modestly and inconspicuously, they gathered about themselves a small group of disciples eager to develop scientific medicine. Many of the students of that era are now themselves occupied in the conduct of great scientific enterprises in medicine. The example set in Baltimore spread like an epidemic. The men trained in Baltimore were medical missionaries who carried into our great universities new ideals of medical teaching, medical research, and hospital organization.

Within fifteen years or less a distinct cleft appeared; there were on the one side institutions struggling to reproduce the spirit and the effort characteristic of the Johns Hopkins Medical School, and there were on the other side institutions upon which this spirit had made no impression. But soon professional as well as public opinion began to be interested. The eyes of state legislators were opened. Instead of the low standards under which it had previously been possible for both private initiative and state universities to conduct medical education and medical practice, a concerted effort was suddenly made which almost in the twinkling of an eye transformed both; the schools that had learned little or nothing began to shrivel and die away. The states which had formerly licensed illiterates, who had merely listened to didactic lectures, now began to limit the practice of medicine to those who had been properly prepared and properly trained. Within a decade our one hundred and fifty-five medical schools shrank to little more than fifty, and the total resources applied to the conduct of medical schools and hospitals increased from a relatively insignificant sum to hundreds of millions. All this was, in the first place, the result of private effort, private initiative, and private gifts. One individual alone contributed fifty millions of dollars to the general cause of improving medical education and perhaps as much to the creation of an institution for medical research.

A new ideal had been created and realized in Baltimore. It was at first voluntarily taken over in Boston, in New York, in Philadelphia, in Chicago, in St. Louis, in Nashville, in Rochester, and elsewhere. At length the universities maintained by the states realized that they must participate in this same movement. Something very substantial had already been accomplished, to be sure, in Michigan and in Wisconsin under the leadership of a Johns Hopkins graduate, but there was no general movement on the part of the state universities beyond the necessary elevation of the standards of medical practice until in 1922 — only thirteen years ago — the State of Iowa, whose medical school had up to that time been practically worthless, joined a private foundation in raising $5,000,000 for the building of an entirely new medical school and hospital and increased the state support of the medical school and hospital from something like $50,000 a year to a sum exceeding $1,000,000 a year. It was private effort and private money and private devotion and private initiative that in this instance set the pace, and it is this same private effort and private initiative and private devotion and private means that have created, maintained, and elevated the other institutions I have mentioned.

But the story I have just told is something more than a story of private beneficence, for it was, as I have pointed out in passing, unrestrained and unregulated private effort that led to the outrageous conditions which private effort so largely corrected. How did private effort correct its own excesses and abuses? It corrected them by setting an example, by stimulating emulation, and then by governmental action on the part of the several states which incorporated in statutory form standards of efficiency that had been worked out largely by private institutions after the abuses of unrestrained and uncontrolled private institutions had been mercilessly exposed. In reference, therefore, to private beneficence and philanthropy itself, government has a very distinct service to perform, for, as social standards are elevated and refined, laws can be made arid must be made which will place behind the highest types of effort the authority of the state. Our federal form of government fosters emulation and initiative. Thus private effort and public effort are in no wise incompatible. There is no inconsistency between the existence of institutions under private initiative, support, and control and the existence of publicly maintained institutions of the same character and of equal quality. On the contrary, state and private efforts are complementary. Unless private means continue to exist, the role hitherto played in our history by private enterprise in education, in art, and in philanthropy is doomed to shrink in importance and perhaps ultimately to disappear.


A closely parallel example also can be cited. As long ago as 1865, Matthew Arnold — and later others in their capacity of private individuals, though Arnold held office as a school inspector — began a devastating criticism of secondary education in England. Little of a fundamental nature was accomplished by either private or governmental agencies between 1865 and 1895, when Robert (later Sir Robert) Morant entered the Board of Education, as it was then constituted. Morant, who was one of the really great British civil servants, thereupon began an exhaustive and detailed study of the chaotic conditions prevailing in elementary and secondary education in Great Britain. He was a man of the highest ideals and enormous driving power. It is no secret that the revolution in English education which took place between 1895 and 1902, in the face of terrific opposition from both dissenters and churchmen, was due to the skillful parliamentary management of Mr. Balfour, who relied absolutely upon Morant for, the details and the strategy which he evolved in presenting a bill, that transformed elementary and secondary education in Great Britain. In this instance we witness a movement started by private individuals and then taken up by a democratic government which placed all its power behind a far-reaching educational reorganization. To-day elementary and secondary education in Great Britain is admirably conducted by both voluntary and governmental agencies, inspected, supervised, and in part financially sustained by the general government. It would probably be impossible to find a better example of the successful outcome of cooperation between private individuals and government than is exemplified in the great educational reform which will always be associated with the name of Sir Robert Morant and which may well prove to be the most lasting achievement of Mr. Balfour in the sphere of statesmanship.

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