Final answer:
President Roosevelt believed that the federal government should regulate trusts, differentiating between 'good' and 'bad' trusts and aiming to promote competition and prevent monopolies through legal action and collaboration with business leaders.
Step-by-step explanation:
President Roosevelt believed that the federal government should adopt a policy of regulating trusts. As President, Roosevelt saw the government as an arbiter to ensure fairness in the economic sphere, particularly between capital and labor, without showing favoritism. While he was known as the 'Trustbuster', he distinguished between 'good trusts', which were thought to benefit consumers through efficiency and lower prices, and 'bad trusts', which exploited their market positions for private gain. Roosevelt's actions involved initiating anti-trust suits to promote competition and prevent monopolies, all under the notion that some regulation could be compatible with a healthy capitalist economy.
Roosevelt's administrative approach to trusts was not aimed at breaking up all trusts but rather at discerning and dismantling those that were harmful to the public interest. He believed in working collaboratively with business leaders and stirring them toward regulation through government agencies, rather than employing nationalization or promoting unfettered market control. The establishment of the Department of Commerce and Labor was a clear indication of his approach – preferring negotiation and regulation over more extreme measures.
The aim was to strike a balance between business autonomy and public welfare, operating under the principle that government intervention in the economy should ensure justice and efficiency.