conomic development is compelling men to turn from the owners' society
of the present day to a producers' society, organized by the producing
groups and functioning in those cases where the single group of
producers finds effective function impossible.

4. _Federation as a Way Out_

Experience has shown that the best way to secure co-operation among a
number of groups having more or less divergent interests is through a
federated or federal system of organization, under which each of the
constituent groups retains control over those matters which relate
exclusively to the affairs of that group, while all matters affecting
the well-being of two or more groups are handled through the central
organization or federation.

The United States of America is an association of sovereign states, each
of which retains the right to decide those matters which are of
importance to that state alone, while all questions of interstate
concern are automatically referred to the Federal Government. At the
same time, matters of common concern to all of the states such as the
coinage of money, relations with foreign governments, the regulation of
commerce with other nations and between the states, and the like, are
also under exclusively federal jurisdiction. By this means, those
questions which are of local moment may be settled within the state in
which they arise, while all questions affecting the interests of more
than one state, and those having to do with the common interests of all
the states, fall within the jurisdiction of the Federal Government.

The organization of business has followed similar lines of federation.
During the early years of capitalism there was a strong tendency to
concentrate all of the power of a given business at one point, and in
the hands of one man. With the growth of large enterprises, however,
such centralization became unworkable. Instead of a single
generalissimo, business organized the general staff. The corporation
with its board of directors (executive committee) helped to make the
transition, and when the United States Steel Corporation was formed, at
the peak of the period of American trust organization, its constituent
companies were given large scope for individual initiative and activity.
The tendency toward departmental autonomy in large businesses is also
very marked. Bitter experience with "one man" concerns and top-heavy
organizations convinced business men that the road to success lay