This book is DUE on the last date stamped below 
 
 MyiR 2 7 1925 
 
 3 1 1930 
 
 JAN 9 194S 
 RECO UMiRQ 
 
 
 r 
 
 Form L-9-15wi-8,'24
 
 Property
 
 1859 — J 920
 
 ^Qu 'est~ce que la propriete? 
 La propriete, c'est le vol." 
 
 — PROUDHON 
 
 PROPERTY 
 
 By 
 
 Arthur Jerome Eddy 
 
 Author of "The Law of Combinations," "The 
 New Competition," Etc., Etc. 
 
 CHICAGO 
 
 A. C. McCLURG & CO. 
 
 1921 
 
 58584
 
 Copyright 
 
 A. C. McCLURG & CO. 
 
 1921 
 
 Published July, 1921 
 
 M. A. DONOHUE a CO., PRINTERS AND BINDERS, CHICAGO
 
 J 
 
 Hf3 
 
 CONTENTS 
 
 PAGE 
 
 hr 
 \ 
 
 ^ I Introduction 1 
 
 ^v II The Average Fortune 28 
 
 vv"^ III An Economic Fiction 35 
 
 IV Only for Life 64 
 
 V The Russell Sage Fortune 83 
 
 ^ VI The Marshall Field Fortune . . . .118 
 
 -H. VII The Carnegie Fortune 147 
 
 ^ VIII Wealth in Possession ...... 167 
 
 IX Land 174 
 
 X Luxuries 201 
 
 XI A Logical Consequence — Who Pays Taxes ? 245
 
 I3r ^u\)nt gierome €DDr 
 
 " The Law of Combinations." 
 *' Two Thousand Miles on an Automobile.'- 
 ''Delight, the Soul of Art." 
 ''Recollections and Impressions 
 
 of James A. McNeill Whistler." 
 "Ganton&Co." 
 "Tales of a Small Town." 
 ' ' The New Competition. ' ' 
 * ' Cubists and Post-Impressionism. ' '
 
 PREFACE 
 
 The manuscript of the following pages was 
 completed and prepared for publication just 
 before the death of the author, which occurred 
 in New York on July 21, 1920. 
 
 Any man who is concerned with the funda- 
 mentals of thought in any department — whether 
 in philosophy, morals, politics, religion, the 
 physical sciences, or art — grows weary of the 
 multitude of books which only thresh over 
 again the straw of old ideas, and contribute 
 nothing of vitally new suggestion toward solv- 
 ing the problems of our life. But now and 
 again it happens that one comes upon a book 
 which bears the impress of really independent 
 vision and original thought. Then one knows 
 that one has found a teacher, a leader. 
 
 Such a teacher and intellectual leader was 
 Arthur Jerome Eddy. The originality of his 
 ideas is as surprising as the ease and clear- 
 ness with which he expressed them, and the 
 number of fields in which he was a master. 
 
 His leading quality was a certain alert open- 
 ness of soul, a youthful responsiveness to the 
 challenge of new ideas, new experiments, new
 
 Preface 
 
 valuations. His writings are full of tliis spirit 
 of generous acceptance, balanced by a splendid 
 sanity, wliich never allowed the enthusiasm of 
 welcome to overbear a sound critical judgment. 
 
 So intensely individual is his method of 
 analysis that the reader feels as though he 
 were seeing for the first time the subject of 
 which the author treats. His books on eco- 
 nomic and social problems, and their ethical 
 implications, carry to the mind of every in- 
 structed reader the conviction of their large 
 and lasting significance. 
 
 In The New Competition, and in this boo"k 
 on Property, Mr. Eddy recognizes many evils 
 that the conservative is usually unwilling to 
 admit. He condemns many existing practices 
 in business as being immoral, inhuman, and 
 at the same time uneconomic, inefficient, and 
 unnecessary. He would probe the conscience 
 of the man of business. He will not tolerate 
 the perpetuation of the standards of the jungle, 
 nor permit men to defend them by the parrot- 
 cry that struggle is the law of life. But 
 instead of counselling the destruction of the 
 entire competitive system and the substitution 
 of some new and inherently unworkable
 
 Preface 
 
 scheme, woven out of the large inexperience of 
 the utopist, Mr. Eddy challenges the existing 
 order to do ivhat it claims to do, and to show 
 its capacity for self-reformation. 
 
 His remedy for many of the underhanded 
 tricks that still prevail in the industrial world 
 is simply open competition — honorable rivalry 
 on the basis of full exchange of information 
 among the competitors and their customers 
 and employees. He would move in the opposite 
 direction to that which the law so unfortu- 
 nately followed when it undertook, by the Sher- 
 man Act and subsequent legislation, to perpet- 
 uate competition of the jungle type, and 
 prevent, in ordinary businesses, that rational 
 cooperation which the law itself has since been 
 compelled to establish among the railroads. 
 
 The underlying principle of Mr. Eddy's theo- 
 ries of competition and property is this — that 
 all business exists for the service of the com- 
 munity. Certain great human needs must be 
 met, either by the voluntary labor and cooper- 
 ation of individuals, or by the action of the 
 community through the state. The socialist 
 would have the state do everything. His 
 opponent maintains that the community is bet-
 
 Preface 
 
 ter served by what is called ' ' private enter- 
 prise," because, in tlie latter, those who under^ 
 take the service assume the risk. Their own 
 success or failure is inexorably bound up with 
 that of their undertakings. The blunders and 
 miscarriages of the state do not involve the 
 loss and failure of the officials responsible for 
 them. The money used in state undertakings 
 is not the property of those who handle it. 
 That is why they are, in general, careless, lax, 
 and wasteful in their dealings with it. 
 
 Mr. Eddy is at his best in dealing with the 
 alleged ' ' natural right ' ' to property. His 
 criticism of Henry George's attempt to estab- 
 lish a distinction between property in land and 
 property in things is, to my thinking, unan- 
 swerable. There is no ' ' natural right ' ' to 
 property of any description. The right to any 
 property whatsoever is conferred by society. 
 Its basis is not in nature, but in social expedi- 
 ency. The community permits each of us to 
 enjoy exclusive control over certain parcels of 
 land and things because — and only because — it 
 gets more efficient service out of such land and 
 things than it otherwise could. 
 
 Mr. Eddy's strength, and that which con-
 
 
 Preface 
 
 stitutes his clearest title to a hearing, is the 
 fact that, being an idealist, he was also a man 
 of immense practical experience. A lawyer by\ 
 profession — declared by the highest authorities 
 to have been one of the most brilliant at the 
 American bar — he had devoted years of work , 
 to the organization of great business undertak- / 
 ings. He pointed out the path on which 
 advance is actually taking place. He was no 
 unpractical radical theorist. 
 
 His finest insight is his clear perception that 
 the evils which afflict society are, after all, due 
 not to external conditions, but to unpurged / 
 defects in human nature itself. He is well' 
 aware that these defects would produce similar 
 or worse evils in any system that could con- 
 ceivably be substituted for the present one. 
 Deceit, unfair competition, stupidity, under- 
 handed dealing, inhuman lack of consideration 
 for one's neighbor — these are faults inher- 
 ent in human nature, not in ' ' capitalism. ' ' They 
 are not produced by the profit-seeking motive, 
 nor are they remedied by merely taking that 
 motive away. Human nature, with its faults and 
 virtues, is vastly independent of its surround- 
 ings. It makes them ; it is not made by them. It
 
 Preface 
 
 can vitiate or ennoble any social, industrial, 
 or political order. Expellas furcd — even the 
 fiirca of communism or socialism — tamen 
 usque recurret. 
 
 The appreciation of Mr. Eddy's teachings, 
 and his fame as a constructive thinker, will 
 continue to increase as his thought — so far in 
 advance of his time — conquers the attention to 
 which its worth entitles it. 
 
 To all who knew him, Mr. Eddy's death was 
 an inexpressible personal loss; to his country 
 it was the loss of a great intellectual and moral 
 asset. From such radiant spirits as his we 
 catch the faith that makes progress possible. 
 
 Horace J. BRmoES. 
 Chicago, June, 1921.
 
 Property
 
 PROPERTY 
 
 I 
 INTRODUCTION 
 
 *' Qu 'est-ce que la proprietef '^ (AMiat 
 is property?) 
 
 '^ La propriete, c'est le vol." (Prop- 
 erty is theft.) >) 
 
 Proudhon''s famous question and answer are 
 at tlie basis of modern communistic theories. 
 
 If it be true that property is theft, then 
 property rights should be abolished. 
 
 But, the historical fact is that the develop- 
 ment of property rights has steadily accom- 
 panied the progress of mankind. 
 
 Communities, peoples, nations have attained 
 strength and prosperity precisely to the extent 
 they have extended the rights of the individual 
 to control not only the fruits of his own labors, 
 but — in the sense of guiding and managing — 
 the fruits of the labors of others. 
 
 If '* property is theft," progress is based on 
 injustice. 
 
 The extreme socialist, communist, or anar- 
 1
 
 2 Property 
 
 chist, does not shrink from this conclusion — 
 that progress and our entire civilization are 
 based upon injustice/ 
 
 But, how can justice come out of injustice? 
 How can progress come out of wrong? 
 
 The very terms of the question force the con- 
 clusion that we are deceived regarding either 
 the ivrong or the progress. 
 
 If there has been true progress its basis has 
 been right; if the fundamental institution of 
 society — property — is really wrong then there 
 has been no true progress. 
 
 There are three ways out of the dilemma: 
 
 1. Property is right and progress real. 
 
 2. Property is wrong and progress unreal. 
 
 3. Property is both right and wrong; 
 progress is both real and unreal. 
 
 Most men argue so strongly in favor of the 
 first proposition that property rights are held 
 
 * It should be noted and conceded in passing that the 
 debate often turns on the definition and conception of the 
 word " progress " — one side taking it in its mere material 
 sense, the other in its more cultural and ideal sense, deny- 
 ing the world has spiritually and ideally progressed not- 
 withstanding its apparent material prosperity; obviously 
 that debate admits of no definite conclusion, it being a 
 conflict of sentiments, opinions, convictions.
 
 Introduction S 
 
 by them to be sacred, almost as sacred as a 
 man's right to his life. 
 
 Comparatively few men argue in favor of 
 the second proposition ; even Proudlion was 
 obliged to admit that though he considered 
 property theft, still it was an institution that 
 could not be disturbed suddenly. 
 
 An increasing number of thinkers hold that 
 while the institution of property has been on 
 the whole a vital factor in the progress of man- 
 kind it is by no means perfect, and, like every 
 social institution, is open to criticism and cor- 
 rection, 
 
 ♦> ♦ ♦ 
 
 In short, property is not the evil it is said to 
 be, otherwise progress would not be so real as 
 it imdoubtedly has been. 
 
 On the other hand true progress may have 
 been checked because of imperfect or over- 
 recognition of property rights. 
 
 All of which leads to the conclusion that the 
 first duty of the man who would reform society 
 is to clear up his ideas regarding property. 
 
 It is easy enough to say, ** Property is 
 theft," but difficult to prove the assertion.
 
 4 Propertfj 
 
 It is easy enough to say, ** Property is 
 sacred," but equally difficult to prove it so. 
 
 The truth probably lies between the two ex- 
 treme positions — property is neither theft nor 
 sacred, it is just human, and, like all things 
 human, imperfect. 
 
 ♦ ♦ ♦ 
 
 To say "Property is theft," is like saying 
 ** Law is crime." But every paradox contains 
 some truth. 
 
 ♦ ♦ ♦ 
 
 At the very outset of any consideration of 
 the matter of accumulation and distribution of 
 wealth, we are met by prejudices that stand in 
 the way of cool, patient, and thorough investi- 
 gation. 
 
 The greatest of these prejudices is that of 
 the man who has less against the man who has 
 more simply because Tie has more. 
 
 The names of Rothschild and Rockefeller are 
 sweet morsels in the mouth of the ranting 
 socialist, communist, and anarcliist; the phdl- 
 osopMcal socialist, communist, and anarchist 
 should be above that sort of thing, but even he 
 cannot refrain from pointing to some huge for-
 
 Introduction 
 
 tune as if mere size of some man's fortmie 
 added force to Ms argument. 
 
 Logically speaking whether a man has a bil- 
 lion, or a million, or ten thousand matters not 
 so long as he has more than the average. 
 
 In fact a billion in the United States may 
 mean less to the community than a hundred 
 thousand in a remote colony. 
 
 The story is told that one day a man rushed 
 up to Rothschild and exclaimed angrily: 
 
 ** You have a million pounds." 
 
 **Welir' 
 
 ** You've no right to so much money." 
 
 *' Who should have it?" 
 
 ** The people." 
 
 *' Of England or the world? " 
 
 "Of — of the world," the man faltered. 
 
 *'A11 right, take your share out of this and 
 distribute the balance where it belongs," and 
 the banker handed the man a penny. 
 
 ♦ ♦ ♦ 
 
 Rockefeller's alleged billion distributed 
 among the people of the United States would
 
 6 Property 
 
 give each man, woman, and child, less than ten 
 dollars. 
 
 That would not go far toward eliminating 
 poverty. 
 
 Then, too, by what right would the people of 
 the United States exclude other nations and 
 races from participating in the distribution? 
 The money of the Standard Oil Company has 
 been drawn from the four quarters of the globe. 
 
 And if the people of the United States may 
 exclude other nations and races from partici- 
 pating, why may not the people of Ohio, where 
 the company started, exclude the people of 
 Illinois, Alaska, Hawaii? 
 
 ♦ ♦ ♦ 
 
 In the United States some cities and some 
 states are far richer than others. In the world 
 some nations and some lands are far richer 
 than others. 
 
 If there is to be an equalization of wealth 
 where shall the distribution end? 
 
 The people of New York State make their 
 money with the aid and cooperation of not only 
 all the other states but of Canada, Europe, and 
 more distant countries.
 
 lutrodnction 
 
 The people of the United States aecumulate 
 wealth by the direct cooperation of all other 
 peoples to the remotest races of darkest Africa. 
 
 Whatever our v/ealth, it is due to the exer- 
 tions and sacrifices of others as well as our- 
 selves. 
 
 It follows, therefore, that a perfectly just 
 distribution cannot be made within the con- 
 fines of a single nation, any more than within 
 the confines of a single state, city, or village. 
 The thorough-going communist must be con- 
 sistent; he must urge the white farmers and 
 workmen of the northern states to share their 
 homes and farms with the ten million negroes 
 of the South. 
 
 Between the existing distribution with all its 
 inequalities and any scheme of distribution 
 that falls short of taking into consideration all 
 mankind the result would be simply a differ- 
 ence in the degree of injustice. 
 »*• <>*• «** 
 
 The most thorough-going communist is will- 
 ing to divide his neighbor's goods, he may even 
 be willing to divide his own — if he has any, 
 but he is thoroughly selfish when it comes to
 
 8 Propcrtjj 
 
 sharing his country's goods with the rest of 
 the world, with the millions of Asia and 
 
 j Africa, not to overlook the Esquimaux and 
 South Sea Islanders, who are also our brothers 
 
 j in theory if not in law. 
 
 Communism, and most other projects for re- 
 form, begin and stop at home. 
 
 ♦ ♦> ♦ 
 
 While the suggestion to distribute equally 
 the wealth of the United States among the peo- 
 ple of the United States may arouse some — 
 not much as a matter of fact — interest among 
 those who have less than the per capita aver- 
 age, it arouses no enthusiasm whatsoever 
 among those who have more; while the sug- 
 gestion that the distribution should be carried 
 to its logical extreme and the wealth of this 
 country be cast in one common fund for dis- 
 tribution to the entire world, would arouse 
 simply ridicule. 
 
 In short it may be human nature to like to 
 share the fortunes of others, but it is not 
 human nature to cheerfully relinquish to stran- 
 gers and enemies what we consider our own.
 
 Introduction 9 
 
 Ask the average farmer if he would favor 
 dividing up Rockefeller's fortune among those 
 who have less, and he might answer, '' Yes." 
 
 Ask him if he would favor sharing his farm 
 with those who have nothing and he would 
 surely reply, ** No." 
 
 This human weakness in favor of despoiling 
 the other fellow is illustrated in the provisions 
 of the income tax laws of this and other coim- 
 tries, wherein small incomes are exempt or sub- 
 jected to low taxes, and large incomes are pro- 
 gressively seized by ingeniously devised sur- 
 taxes. 
 
 Suggestions are made to so increase the sur- 
 taxes on incomes and estate or inheritance 
 taxes as to practically confiscate large incomes 
 and large fortunes. In other words to utilize 
 the taxing power to equalize fortunes. 
 
 Most of these suggestions are opposed by 
 reasoning that is far more fallacious than that 
 urged in support of them. They are denounced 
 as demagogical, which is true, but that charge 
 is cheap, easily made and has nothing to do 
 with the merits, if any, of the suggestions.
 
 10 Property 
 
 They are opposed as revolutionary, radical, 
 socialistic, etc., etc., but these epithets simply 
 obscure the real issue ; they settle nothing. 
 
 Not a few objections are based upon a denial 
 of the government's right to confiscate all or a 
 portion of a man's income, but that position is 
 hopelessly untenable. If the government can 
 collect a graduated income ta,x, increasing from 
 one to sixty per cent, it can mal^e the gradua- 
 tion from one to one hundred per cent. There 
 is no limit to the rigM. 
 
 Constitutional objections might be urged in 
 this country, but such objections at most would 
 simply mean the amending of constitutions, 
 and the definite assertion of rights denied. 
 
 The power resides in the people and they 
 may do as they please with laws and constitu- 
 tions.^ 
 
 * Here again is a generalization that would require a 
 small volume to qualify properly. Profoundly speaking it 
 is far from true to say " the power resides in the people 
 to do as they please with laws and constitutions." It is 
 even truer to say " the people are poiverless to do as they 
 please with laws, constitutions, institutions," as powerless 
 as they are to alter their language, habits, modes of 
 thought, etc., overnight. V/e live under governments and 
 social conditions that have slowly developed through the 
 centuries. We may jostle them by revolutions, we rnay
 
 Introduction 11 
 
 / 
 
 The man who asserts his right to hold either 
 all or any part of his property, on the ground 
 the community has no right to interfere with 
 him, destroys the basis of his argument in that 
 he takes away the very foundation of all rights 
 the assent of the conununity. 
 
 If no better arguments can be urged in favor 
 of large incomes, then those who have them 
 might just as well make up their minds to lose 
 them. But the reason why large incomes have 
 not been confiscated long ago is because there 
 are economic reasons for their existence, and 
 these reasons have controlled throughout the 
 ages, though — curiously enough — they have 
 never been systematically set forth. 
 ♦ ♦ ♦ 
 
 If ' ' swollen fortunes ' ' — as the phrase goes 
 — are an economic evil it is clumsy and ineffec- 
 tive to attempt to remedy the evil by such 
 crude devices as inheritance and income taxes ; 
 
 modify them by wise action, but to say they are subject 
 to our will, our caprice, is to say what is obviously not so. 
 However, for the purposes of the argument in this book 
 it may be conceded the people have the power to do as 
 they please with laws, constitutions, institutions, that they 
 may do what they please regarding all so-called property 
 rights.
 
 IS Property 
 
 as clumsy and ineffective as if the state at- 
 tempted to remedy 'piracy, not by suppressing 
 it, but by taking part of the plunder. 
 
 The " swollen fortune " is a fact in our eco- 
 nomic development. 
 
 There may be but one hilUonaire but there 
 are any number of millionaires, thousands of 
 Jiundred-thousandaires and hundreds of thou- 
 sands ten-tJiousandaires. 
 
 From the point of view of the man who has 
 nothing, an American farmer with ten thousand 
 has a " swollen fortune," and it is swollen far 
 beyond the farmer's pro rata share of the 
 country's wealth. 
 
 The " swollen fortune " is not a thing of ab- 
 solute magnitude, but entirely a matter of com- 
 parative size. 
 
 ♦ <8» ♦ 
 
 To repeat: 
 
 Inequality in the distribution of wealth is a 
 fact, a very stubborn fact, in the economic de- 
 velopment of all mankind. 
 
 There has never been a time in the history 
 of the human race w^lien some individuals did 
 not have more than others.
 
 Introduction 13 
 
 To find anyilamg lilve a theoretical holding of | . 
 things in common one must resort to the insect ^ 
 world, and even there and in the animal king- 
 dom there is a more or less well-defined asser- 
 tion of ownership by the individual or the col- 
 ony to the exclusion of others, even to the kill- 
 ing and slaughtering of others. 
 
 Even a theoretically pure commujiism could 
 not avoid the follo^\dng inequalities in the dis- 
 tributions of the accumulated wealth of the 
 community : 
 
 A. The wealth of one community as com- \ 
 pared with the wealth of other nations, 
 peoples, and races. 
 
 B. The greater wealth of some localities j 
 as compared with that of others. 
 
 C. Inequalities in the distribution of com- 
 munity advantages, such as public 
 buildings, properties, industries neces- 
 sarily localized, railroads, highways, 
 universities, museums, etc., etc. 
 
 In short the most abstractly ideal conmaunity 
 could not surround each individual with pre- 
 cisely the same convenience and comforts. How 
 to deal with those individuals who do the hard
 
 14 Pro pert]] ^^ 
 
 and dirty work and place them on a plane of 
 equality with those who do the light and pleas- 
 ant has troubled every philosopher who has 
 ever tried to devise a utopia ; if you give them 
 larger returns inequality immediately results 
 — the adjustment would be impossible. 
 
 ♦ ♦> ♦!♦ 
 
 If the ideal community should make its capi- 
 tal or any one city more attractive than an- 
 other, or should indulge in a single expense for 
 the purpose of making life more agreeable in 
 any locality, or more agreeable for one man, 
 woman, or child than for another there is in- 
 equality of distribution of advantages which is 
 practically the same as, and theoretically, more 
 unjust than, inequality in the distribution of 
 private property. 
 
 All dreams of great and glorious communi- 
 ties, states, commonwealths, wherein private 
 property does not exist, and everything is held 
 in common, involve inequalities in the distribu- 
 tion of advantages and pleasures that are fully 
 as great as any that now exist. 
 
 That is to say, the greater the glories of the 
 Utopia the greater the concentration of advan-
 
 Introduction 15 
 
 tages in favored localities — in the spotlights 
 of the dream. A ntopia with no concentration 
 of advantages, no great cities, no great build- 
 ings, monuments, museums, pleasure resorts, 
 theaters, orchestras, etc., etc., would not be a 
 Utopia to fire the imagination. 
 
 It must not be forgotten that to the man in 
 the coal mine, to the man ploughing the field, 
 to the negro in the cotton fields, to the miner 
 in Alaska, to the sailor, the fisherman, the 
 stoker in the hold, the collector of garbage, all 
 the gorgeous and beautiful buildings, amuse- 
 ments, and enterprises of the Utopian common- 
 wealth would be as remote and unrelated as 
 are the buildings and pleasures of existing 
 states and commonwealths ; they would read of 
 them but never enjoy them. 
 
 Furthermore it must not be forgotten in this 
 connection that inequality is the law of life. 
 
 Perfect equality, if attainable, would mean 
 stagnation, death; a placid, rippleless sea; a 
 currentless, motionless air; a still and silent 
 universe.
 
 16 Property 
 
 The sliglitest action, change, growth, devel- 
 opment, means disturbance of equality. 
 
 It is idle to talk of equality between youth 
 and age, men and women, race and race, the 
 feeble and the strong, the fool and the wise 
 man. 
 
 The truth is two human beings cannot be 
 found w^ho are equal in all respects, equal in 
 physical and mental equipment; in desires, 
 emotions, impulses; above all in those subtle 
 qualities that go to make up what we call 'per- 
 sonality. 
 
 Thinking men who admit this seek refuge 
 from the consequences of the admission by say- 
 ing that what is meant by ''equality" is 
 '' equality before the laiv," a sounding phrase 
 that is used to discourage further inquiry and 
 analysis, but wliich means nothing. 
 
 Men are no more equal before the law than 
 in other respects, and to the extent the law 
 treats them as equal, recognizes no distinction 
 between the weak and the strong, the stupid 
 and the intelligent, the confiding and the crafty, 
 to that extent is the law both blind and defi- 
 cient.
 
 Introduction 17 
 
 The law commits its most frightful errors 
 when it fails to take into consideration the per- 
 sonal equation. 
 
 *** »*• •** 
 
 The men who are most virulent against in- 
 equality of wealth are usually quite complacent 
 toward inequality of authority; many of them 
 claim and exercise the most despotic authority 
 over their followers; all of them are most in- 
 tolerant of opinions that differ from their own. 
 
 Karl Marx, for instance, w^as so intolerant 
 of opposition or rivalry that when his control 
 of the International Working-men's Association 
 was threatened he deliberately wrecked the As- 
 sociation. 
 
 As between inequality measured in dollars 
 and inequality measured in authority, the lat- 
 ter has probably done the world incomparably 
 more harm — and good. 
 
 The power of the man of money over the 
 man who has none is nothing as compared with 
 the power of the man who has will-power over 
 the man who has none — the latter is the blind 
 and helpless slave of the former, to the doing 
 of murder.
 
 18 Property 
 
 Of all dogmatic and tyrannical teachers of 
 men, the socialists, anarchists, and radical re- 
 formers generally, have ever been and are the 
 most intolerant and despotic. 
 
 Leaders of labor unions exercise powers that 
 few generals on a battle field possess, for 
 troops may hang back or run, but unionists 
 seldom fail to strike, fight, and starve at the 
 command of their leaders. 
 ♦ ♦ ♦ 
 
 The point of all this is that inequality is not 
 confined to the distribution of wealth ; it exists 
 everyivliere^^ in the family, the school, the 
 church, the city, the state; in politics and in 
 every profession ; some men get on faster than 
 others, and the great majority in every walk of 
 life is ever looking up to and following a small 
 minority, and, it is a curious fact, in every walk 
 of life except that of making money, the ma- 
 jority is proud of the achievements of the 
 minority — proud of the inequality that dis- 
 tinguishes the leaders. 
 
 ^&' 
 
 The unlmown doctor, lawyer, minister, pro- 
 fessor, does not desire the levelling of the
 
 Introduction 19 
 
 famous members of his profession ; his one am- 
 bition is to achieve something of their success. 
 
 The workman in a factory does not desire \ 
 the levelling of the foreman, the superintendent, 
 the men who are above him by reason of their 
 ability to direct; on the contrary he is ambitious 
 to advance to their positions. 
 
 Government employees range in rank from 
 the president down to the humblest janitor, but 
 not a soul in the employ of the government 
 dreams of the possibility of the levelling of all 
 ranks, of the arbitrary placing of the janitor 
 on the same level of pay and authority with the 
 president ; on the contrary the normal ambition 
 of all is to rise from rank to rank — in short to 
 systematically perpetuate the scheme of in- 
 equality. 
 
 No socialistic community has ever been sug- 
 gested wherein there would not be the same 
 gradations of office and authority, the same 
 inequalities between man and man, and the 
 same rivalry and strife to advance in rank and 
 authority.^ 
 
 ^ The late Czar exercised no such despotic power as that 
 wielded by Lenine and Trotsky. And so far from abolishing 
 classes, the Russian revolution hag simply created an interest-
 
 20 Property 
 
 At most the socialist and communist would 
 simply level some of the inequalities of wealth. 
 
 Well, inequalities of wealth are among the 
 least of the world's troubles. 
 
 Inequalities of wealth alone have never pro- 
 duced a revolution, never overturned a govern- 
 ment, never caused a war/ 
 
 Inequalities of rank, power, privilege, are 
 the inequalities that stir men to revolution and 
 bloodshed. Inequalities of wealth may, and 
 usually do, accompany these other inequalities ; 
 but not always and necessarily, and never as a 
 cause. 
 
 Inequalities of rank, power, privilege, are 
 inherent in men, in church and state, in labor 
 unions and political parties, in sports and 
 wars,Jand it is this personal equation that leads 
 to inequalities in the distribution of wealth, 
 and not vice versa. 
 
 In short, were it possible to correct today, by 
 some magic stroke, all the inequalities in the 
 distribution of material things — wealth — those 
 
 ing assortment of new ones. 
 
 ' To this generalization — true as regards wealth gen- 
 erally — must be noted the exception of gross inequalities 
 in land ownership, they do cause discontent of revolu- 
 tionary magnitude.
 
 Introduction 21 
 
 otlier inequalities would instantly begin anew 
 the work of redistribution, the stronger appro- 
 priating more or less of the pro rata share of 
 the weaker; just as the head of any body — say 
 the leader of a labor union — is paid more, and 
 has more than any one of his followers, because 
 Lis services are worth more and it is economy 
 to make it an object to him to devote all his 
 time to the organization. 
 
 It sometimes happens a great leader is will- 
 ing to devote his energies to the state, to his 
 organization, to a cause for the glory there is 
 in the work and with no greater compensation 
 than that of a day laborer, but these instances 
 are few and as a rule his followers will not per- 
 mit it; they instinctively recognize the truth 
 that the power and efficiency of the leader 
 depends not a little upon appearances, that he 
 can do better work if he does not live as a day 
 laborer, but keeps somewhat aloof. In other 
 words a general's uniform is a time-saving 
 device; without it the general would have to 
 demonstrate his right to leadership to every 
 new recruit. The policeman's badge saves a 
 lot of questions.
 
 ^2 Property 
 
 The American people pride themselves on 
 being democratic, yet they would not consider 
 it wise or economical to have their President 
 live in a three-room shack on the banks of the 
 Potom^ac, or even in a six-room flat on one of 
 the side streets of Washington, though in 
 either case he might be consuming far more 
 than his fro rata share of the wealth of the 
 country. 
 , Perhaps it is fortunate for those who enjoy 
 inequalities of rank, power, privilege, that the 
 minds of the people are diverted to the discus- 
 sion of inequalities of wealth, for so long as 
 only inequalities of wealth are assailed, the 
 unjustly poiverful are safe. 
 
 It is amusing to see how Congress and 
 political bodies generally are quick to divert 
 public attention from their own shortcomings 
 by springing investigations of rich corpora- 
 tions and individuals. 
 
 No, the problem is prof ounder than the mere 
 distribution of dollars. 
 
 ♦ ♦> ♦ 
 
 The fatal defect of every utopian com- 
 munity devised by philosopher or dreamer is
 
 Introduction 23 
 
 that it is based on the assumption of physical, I 
 mental and emotional equality of individuals, /' 
 whereas the truth is that men and women are 
 all born helpless and many grow up so helpless 
 and incompetent that as against them the 
 others must assert authority over their food, 
 clothing, property, even their persons. So that 
 in even the ideal community the rights of indi- 
 viduals to participate in the control and distri- 
 bution of property depend first of all upon age; 
 secondly, upon a development of physical, 
 mental and moral strength — three vital fac- 
 tors, concerning which the judgment of the 
 active majority is conclusive. 
 ♦ ♦ ♦ 
 
 Rights, then, are of practical origin and 
 development rather than of theoretical. . 
 
 It is easy to lay down abstract propositions » 
 of great beauty and seeming truth, but men 
 differ so widely in their physical, mental and 
 moral attributes that the abstract propositions 
 do not fit. 
 
 Imagine a community wdierein all persons 
 were of the same physical, mental and moral 
 development, possessed the same rights — equal .
 
 24 Property 
 
 to no rig'lits at all; wherein there was no need 
 for government, because of no human weak- 
 nesses and shortcomings; wherein there were 
 no strifes, struggles, failures, successes, but 
 life was one long, bright June day — life in 
 such a conmiunity would be so deadly monoto- 
 nous it would not be worth living. 
 ♦ ♦ ♦ 
 But, though we assume that on account of 
 man's imperfections inequality of fortune is an 
 economic condition that is essential to economic 
 progress, it by no means follows that such 
 inequality is a good thing to be encouraged j on 
 the contrary as it is the direct outcome of the 
 weaknesses and imperfections of mankind it 
 should be minimized, or at least confined within 
 as narrow limits as human imperfections admit. 
 Private property, with its resulting inequality 
 in the distribution of wealth, is essentially a 
 ^ human institution in the same sense govern- 
 ( ment is a human institution, and like the degree 
 of government its development depends entirely 
 upon human necessities. There is nothing 
 sacred about it, it is subject to the •will of man, 
 \u and the very fact that man has not abolished it
 
 Introducfion 25 
 
 long ago, notwithstanding the railings and 
 arguments against it, is proof positive that he 
 knows of no better device to take its place. 
 
 Private property is not a popular institution 
 from the point of view of the masses, but it is 
 inevitable, and even the masses have their 
 property rights which they would not surrender 
 without a fight. 
 
 ♦ ♦ ♦ 
 
 We have, then, this curious condition, one of 
 the basic institutions of society is denounced as 
 responsible for most of the miseries of life. 
 
 The appeal of the demagogue, of the socialist, 
 of the economist, of the utopian philosopher is 
 based upon a denunciation of private property. 
 To be sure no two of these men agree in their 
 arguments, their conclusions, or their remedies, 
 but all agree in the assertion that there is 
 something wrong with the institution of private 
 ownership. 
 
 Where so many different thinkers are of one 
 mind regarding a given institution it is only 
 fair to concede there may be some foundation 
 for their con\dction, and if there is anything
 
 \y- 
 
 26 Property 
 
 wrong with private ownership that wrong 
 should be discovered and remedied. 
 
 There is, however, this alternative, the insti- 
 tution of private property may not he tJior- 
 oughly understood; it may be charged with 
 faults that do not exist, with evils for which it 
 is not responsible. 
 
 ♦ ♦ ♦ 
 
 The prejudice against private property rests 
 upon the assumption that one man has more 
 than he ought to have, that in some way he 
 owns and makes use of the fruits of the labors 
 of others, for his own benefit or pleasure. 
 
 It is easy to stir the resentment of men who 
 have nothing against men who have, by telling 
 the former they have been robbed. 
 
 It is easy to sow hatred in a community by 
 telling those of small means they would have 
 more if the wealth of the few were fairly 
 distributed. 
 
 Those have been the stock arguments of 
 the demagogue throughout the ages, and it goes 
 without saying, if the arguments were sound, 
 private property would have disappeared long 
 ago — or rather it never would have come into
 
 Introduction 27 
 
 existence as a normal factor in social evolution. 
 One might just as well argue against the 
 institution of government, of organized society. 
 In spite of the strongest theoretical objections 
 government and organized society are the best 
 devices of the ages to meet and cope with 
 human imperfections and dependencies. 
 ♦ ♦ ♦ 
 
 Taking private property as it is established 
 and protected in all civilized communities, and 
 especially in the United States, the object of 
 this little book is to try and find out what it 
 really is, and ivhat is ivrong ivith it.
 
 II 
 
 THE AVERAGE FORTUNE 
 
 Mr. John D. Rockefeller is said to have a 
 fortune of a billion dollars. That is probably 
 an exaggeration, but whether he has a billion 
 or half a billion answers as well for the pur- 
 poses of the argument. 
 
 According to the Census Bureau the average 
 wealth of each man, woman, and child in the 
 United States in 1910 was $1,300. 
 
 Mr. Rockefeller $1,000,000,000 
 
 Average person 1,300 
 
 Such statistical comparisons are easily and 
 often made for the express purpose of arousing 
 discontent and resentment, but — as will be 
 found on analysis — the figures are quite mis- 
 leading. 
 
 •;♦ ♦;♦ ♦;♦ 
 
 A distinguished political leader is quoted as 
 having said, ''A man may fairly earn a million 
 dollars." 
 
 The ideal millionaire $1,000,000 
 
 Average person 1,300 
 
 28
 
 The Average Fortune 29 
 
 What is the difference between Mr. Kocke- 
 feller and the ideal millionaire"? 
 Simply a difference in degree. 
 
 ♦ ♦ ♦ 
 
 The political leader referred to is said to 
 have accumulated a fortune of over one hun- 
 dred thousand dollars. 
 
 Leader $100,000 
 
 Average person 1,300 
 
 ♦ ♦ ♦ 
 
 The disparity is still enormous. 
 To recapitulate: 
 
 Mr. Kockefeller $1,000,000,000 
 
 Ideal millionaire 1,000,000 
 
 Political leader 100,000 
 
 Average person 1,300 
 
 It may be said once for all that names are 
 used in this book solely for the purpose of mak- 
 ing the argument more vivid and with no 
 thought of reflecting upon any man. 
 
 The point of importance here is the simple 
 statistical proposition that to the extent any 
 individual in the country has a fortune of more
 
 30 Property 
 
 than $1,300, to that extent must others have 
 less — hence the seeming extremes of wealth 
 and poverty. 
 
 The word "seeming'' is used advisedly for if 
 the extremes of wealth and poverty were 
 actually such as those indicated on the face of 
 the statistics this country would be in the midst 
 of a social upheaval such as the world has 
 never known. 
 
 Or, to state the matter differently, it is incon- 
 ceivable that a community of intelligent, self- 
 governing people should tolerate social and 
 economic conditions that permit one man to 
 accumulate and absolutely control a million or 
 a thousand times as much as another who is 
 equally industrious and equally honest, but who 
 may lack in executive ability. 
 
 Granting that executive ability, rare genius 
 for invention or organization, is entitled to its 
 reward, that it pays the community to encour- 
 age the exercise of such ability for the sake of 
 the good reaped by the entire community, the 
 proposition that such reward should be carried 
 to the extent it seemingly is on the face of the 
 statistics violates one's sense of justice.
 
 Tlie Average Fortune 31 
 
 If the apparent extremes of great wealth and 
 abject poverty sliocli every man's sense of 
 ivhat is fair, why has the community tolerated 
 the development of those seeming extremes'? 
 
 And why does not the community remedy 
 conditions which on their face seem so out- 
 rageously inequitable? 
 
 There are two possible answers to those 
 questions : 
 
 1. The inequalities are as real as the figures 
 indicate, but the community is too apathetic 
 and slothful to remedy the wrong. 
 
 2. Inequalities exist, but by no means to the 
 extent indicated on the face of the figures ; the 
 community is restless and eager for social and 
 economic reform, but is not revolutionary and 
 anarchistic in its demands because it feels 
 without fully comprehending that somehow the 
 figures are misleading and it sees that the 
 actual inequalities between the rich and the 
 poor are not so great as indicated. 
 
 ♦ ♦ ♦> 
 
 Of the two hypotheses the first may be dis- 
 missed at once as not in keeping with the 
 intelligence of this or any other civilized
 
 32 Property 
 
 people. Inequalities in the distribution of 
 wealth anything like those indicated on the 
 face of the statistics would be remedied by 
 revolution. 
 
 The very fact that nations pursue the fairly 
 even tenor of their ways century after century 
 is proof positive to the social philosopher that 
 while things may be far from right they are not 
 j so wrong as the radical socialist, communist, or 
 anarchist, would have us believe. 
 
 Therefore it must he that the inequalities 
 complained of are more apparent than real, 
 and to the extent they ought not to exist the 
 community is slowly but surely remedying 
 them. 
 
 This last hypothesis is the only one that is 
 consistent with our respect for the intelligence 
 of mankind and with any plausible theory of 
 the gradual evolution of all things social. 
 
 The very fact that social unrest in most coun- 
 tries, conspicuously in the United States, falls 
 short of revolution is proof that the inequali- 
 ties fall short of revolutionary magnitude. Per 
 contra at the present moment the unrest in 
 other countries since the World War, notably
 
 The Average Fortune 
 
 in Russia, has resulted in revolutions wherein 
 the attempt is made to correct the inequalities 
 of both wealth and power. 
 
 If the inequalities in the distribution of 
 wealth were actually as great as indicated on 
 the face of the figures quoted then Bolshevism 
 not only would be, but should be rampant in the 
 United States. 
 
 But if the conclusions regarding the real as 
 distinguished from the apparent, or seeming, 
 control and distribution of wealth are sound 
 then it is certain that Bolshevism and the entire 
 revolutionary propaganda — in so far as it 
 attempts a redistribution of property — will 
 subside after turning the limelight on many 
 real evils, and after working many real reforms. 
 
 The man of philosophic mind watches with 
 unprejudiced eye the spread of Bolshevism — 
 i. e., radicalism — knowing that its vitality is 
 measured by the truth it contains, and when 
 that truth is exhausted — i. e. applied, demon- 
 strated — the revolution, the movement, will 
 necessarily come to an end. 
 
 The difference between the Bolshevik and 
 the Menshevik — the radical and the moderate
 
 'y 
 
 84 Property 
 
 — lies in the extent to which each would go in 
 overturning existing institutions. 
 
 The Bolshevik sees little good in laws and 
 institutions as they are and would overturn 
 nearly everything. The Menshevik sees more 
 good and would overturn less. It is idle to 
 attempt to meet the arg-uments of either by 
 denunciation. The only effective way is to 
 listen dispassionately and analyze coolly but 
 searchingly. 
 
 ^ 4j» <3» 
 
 So far as inequalities in the distribution of 
 wealth are concerned the Bolshevik — the radi- 
 cal, the revolutionist — would seem to have it 
 all his own way on the face of the statistics. 
 
 A billion, or a million, or even a hundred 
 thousand to the average of thirteen hundred is 
 not a comfortable comparison; while a billion 
 or a million to nothing is a direct incentive to 
 revolution. 
 
 ♦ * * 
 
 Do these figures accurately reflect the true 
 conditions? 
 
 That is another of the questions we are going 
 to try to answer.
 
 Ill 
 
 AN ECONOMIC FICTION 
 
 Let us view the distribution of wealth from 
 another angle. 
 
 Statistically and legally one man is a mil- 
 lionaire while another may have little or 
 nothing. 
 
 The inequality between a million and one 
 hundred or nothing is enormous, so enormous 
 that only a mind accustomed to large figures 
 can grasp it. 
 
 ♦ 4> ♦ 
 
 While the statistical inequality between a 
 million and a few hundred is enormous, is it 
 true that the inequality in real life between the 
 man who ' ' o^,\ais ' ' a million and the man who 
 has but a hundred or even nothing is as enor- 
 mous as the figures indicate? We have already 
 committed ourselves to the proposition that if 
 it were there would be instant revolution; which 
 is equivalent to saying that social conditions 
 would not tolerate the development of such 
 monstrous conditions. 
 
 35
 
 36 Property 
 
 In a profound sense the '^ millionaire " is an 
 economic fiction; one of the illusions incidental 
 to economic progress. He exists in theory 
 rather than in fact ; he is a legal entity, rather 
 than a living and breathing mass of gold, or 
 wheat, or actual wealth of any kind. 
 ♦ * * 
 
 Take the present instant, the particular 
 moment you — the reader — are reading this 
 paragraph. 
 
 Pause and think. 
 
 All the people in the United States are doing 
 something, most of them working hard. 
 
 Imagine yourself seated on a cloud taking a 
 bird's-eye view of this country of ours. 
 
 Would it not resemble an ant-hill in activity? 
 Would it not be true that the idlers, the 
 wasters, the fools and criminals, who loom so 
 large and make such an impression when close 
 to us, would be so few they would be lost in the 
 mass of workers'? 
 
 Look more closely and try to distinguish, if 
 you can, the millionaire from the thousandaire. 
 
 You do see that some dress better and live 
 better than others, but these differences are
 
 An Economic Fiction .IT 
 
 measured not by millions but by a few hun- 
 dreds annually. 
 
 The best buildings you find are public build- 
 ings, and some of those who have thousands 
 per year are public servants ; nearly all of the 
 gorgeous uniforms, and many of the most 
 extravagant entertainments, receptions, balls, 
 parades, celebrations, etc., etc., are public func- 
 tions, so that it is apparent the country — i. e., 
 the conmaunity — not only countenances but 
 estahlislies great inequalities in rank, power, 
 office, salaries, comforts, luxuries, appearances, 
 pleasures. 
 
 If you are of a reflective turn of mind you 
 may ask yourself whether it may not be true 
 that in these respects individuals simply ape 
 the examples of states. 
 
 ♦ ♦ ♦ 
 
 Surveying from your seat on the cloud the 
 hiiman ants, who are, as a body, working so 
 hard to accumulate wealth which each genera- 
 tion must leave behind, you notice all the 
 economic inequalities in distribution and enjoy- 
 ments above mentioned, and on the human side 
 you observe physical, moral, intellectual differ- 
 
 58584
 
 38 Propertij 
 
 ences which make certain economic inequalities 
 inevitable. And the closer you look the more 
 surprising it strikes you that individuals who 
 differ so, one from another, in physical, moral 
 and intellectual strength can get along so well 
 together in one community. 
 
 4» ♦ * 
 
 Now turn from the living units to the results 
 of their labors, to the total accumulated wealth 
 of the connnunity from seed in the ground to 
 finest finished products; from a path in the 
 forest to an elaborately developed railway sys- 
 tem ; from a log cabin to the White House. 
 
 Your first and absolutely correct impression 
 is that all this wealth belongs to the community 
 — to the human ant-hill. You see that indi- 
 viduals are born and die, generations come and 
 go, but the economic progress and accumula- 
 tions of the community go on without inter- 
 ruption; it is all an essentially community 
 proposition, differing only in degree and not in 
 kind from the accumulations of the ant-hill and 
 the beehive; a more complex and elaborate 
 development of the tribal stage of manldnd.
 
 An Economic Fiction 39 
 
 As a philosopher — particularly if a logical 
 evolutionist — you conclude at once that — 
 whatever the inequalities between individuals, 
 the economic system followed has been well 
 adapted to attain the results achieved. Given 
 any material changes in rights and incentives 
 it goes without sajdng the results would be 
 materially different — whether better or worse 
 no man can say, though the relentless logic of 
 evolution requires you to argue that the results 
 achieved are the best possible with an imper- 
 fect human factor ; as the human factor gains 
 in physical, moral and intellectual strength, 
 material results will vary accordingly. If the 
 intelligence of some of the ants were doubled 
 the proportions of the hill would be changed. 
 ♦ ♦ ♦ 
 
 On closer study you find that individual mem- 
 bers and groups of the community assert claims 
 to particular portions of the community wealth. 
 
 First of all the conmaunity itself is broken up 
 into many divisions and subdivisions, political, 
 religious, educational, industrial (such as pub- 
 lic enterprises like gas, waterworks, irrigation 
 schemes, harbors, etc.) and that each of these
 
 40 Propertif 
 
 divisions asserts a claim to its special portion 
 of the total wealth. 
 
 This assertion of claims by the community 
 and by its various subdivisions, political and 
 industrial, does not alter the fact that every 
 building is used by and every public enterprise 
 run by individuals. 
 
 4> ♦ ♦ 
 
 By searching the records you ascertain the 
 legal fact that the White House is '' owned'* 
 by the nation, instead of by its occupant, but 
 this legal title does not alter the social fact it is 
 the home and office of an individual, the Presi- 
 dent, just as a house on Fifth Avenue may be 
 the home and office of a well-kno^vn physician. 
 The legal title to the house on Fifth Avenue 
 may be in the physician, or in his father, or in 
 a stranger, or a trust company, or in the City 
 of New York ; it may change any moment with- 
 out the physician knowing or caring, the 
 economic fact remains that the house is a part 
 of the sum total of community wealth and it is 
 occupied by a certain individual unit as a con- 
 venient place to best serve the community.
 
 An Economic Fiction 41 
 
 After ascertaining the curious — from your 
 bird's-eye point of view — fact that the com- 
 munity as a whole, and many divisions of the 
 community, claim legal title to portions of the 
 community wealth, even to hundreds and hun- 
 dreds of millions of gold stored in public 
 vaults, you probe deeper and find : 
 
 That, follomng the example of the com- 
 munity, individuals and groups of individuals 
 — from partnerships of two up to corporations 
 with thousands of security holders — claim 
 legal title to particular portions of the total 
 wealth. 
 
 In short you find that : 
 
 1. The all-important and fundamental facts 
 are, the production, use, and control of all 
 ivealth are by individuals ivorhing in harmony. 
 
 2. But, there are of record certain documents 
 which give (a) the community, (b) political, 
 religious, educational subdivisions of the com- 
 munity, (c) public corporations and enter- 
 prises, (d) semi-public corporations, (e) cor- 
 porations, (f) associations of all kinds, (g) 
 partnerships, (h) individuals, legal title to such
 
 42 Property 
 
 portions of the total wealth as they produce or 
 use, or ** own " as the phrase goes. 
 
 ♦!♦ ♦!♦ ♦» 
 
 This is a very curious and highly artificial 
 condition for it is at once apparent that if 
 every legal record were burned and no attempt 
 made to ascertain and restore the legal titles 
 not a penny of actual wealth would be affected, 
 and the only occupations of individuals that 
 would be affected would be those which had to 
 do with the preservation of these legal con- 
 ditions and records. Aside from people engaged 
 in these occupations the work of every indi- 
 vidual in the community would remain pre- 
 cisely the same for a time. 
 
 You naturally ask, * ' Why not, then, wipe out 
 this cumbersome legal machinery, and permit 
 the community to go along simpler economic 
 lines?" 
 
 The answer is twofold: 
 
 1. From the evolutionist's standpoint, it is 
 
 / p^ain that cumbersome scheme of legal title, of 
 
 ** o^\^lership " as distinguished from actual use 
 
 and control, would not have developed unless 
 
 there was good reason for it. All civilizations
 
 An Economic Fiction 43 
 
 seem to have progressed in proportion to the 
 extent they recognized and protected these 
 paper property rights ; the more elaborate the 
 scheme of paper property rights the higher the 
 civilization, and vice versa. 
 
 History proves the truth of this; it also 
 shows that the recognition of rights — par- 
 ticularly political — may be carried so far the 
 system totters and falls either by its own 
 weight or by revolutions. 
 
 2. Aside from the cold materialistic conclu- 
 sions of the evolutionist, it is apparent — the 
 more you probe the matter — that this legal 
 notion of ownership is the most powerful incen- 
 tive to individual effort ever devised. 
 
 Possession is the most powerful incentive 
 known to the brute mind, but the human has 
 made a great advance over the brute in that it 
 separates the idea of oivnership from the hald 
 fact of possession, and thereby multiplies in- 
 definitely incentives to effort. 
 ♦ ♦ ♦ 
 
 The brute can possess but one or two things 
 at a time; the human can '' own " — have legal 
 title — to many.
 
 44 Property 
 
 True, the human does not possess — occupy, 
 or physically control — more than one or two, 
 or at most a few, but because the laiv — i. e. the 
 ingenious device of the community — says he 
 may " own *^ more, and gives him the right to 
 take possession (though often under great 
 difficulties and restrictions), he is satisfied and 
 goes on working feverishly to accumulate 
 paper titles to things other individuals possess 
 and use. 
 
 Were it not for this invention of paper 
 rights, all incentive to production and ac- 
 1 cumulation would end near the brute level, 
 namely with the production and accumulation 
 of only so much as each individual could 
 physically hold to the exclusion of others. 
 
 With the recognition — the invention — of 
 paper titles the incentive to produce and ac- 
 cumulate is extended indefinitely. 
 
 *•* *•* *2* 
 
 A most ingenious scheme to keep men at 
 
 ^ work. It is a direct appeal to the speculative 
 
 instinct which is so powerful in — and peculiar 
 
 to — mankind. It fosters and encourages the 
 
 spirit of accumulation, permitting men to think
 
 A71 Economic Fiction 45 
 
 they accumulate for themselves and their 
 families, whereas in last analysis they simply 
 swell the total accumulations of the community 
 — the ant-hill. 
 It is a great game. 
 
 ♦ ♦> ♦> 
 
 The total actual wealth of the community is 
 one thing, the legal or paper wealth is quite 
 another. 
 
 Take a farm, for instance ; there it is with its 
 improvements and buildings. From your cloud 
 loerch you see every foot of the land, you see a 
 family living in the house and several men 
 working in the fields; it is all quite plain — as 
 plain as an ant dragging food to its hill — these 
 individuals are working a given piece of land 
 for their o"wn living and profit and thereby add- 
 ing to the sum total of the wealth of the com- 
 munity. 
 
 Adjoining this farm is another, then another 
 and another ; then come forests, and mines, and 
 factories, all worked by individuals who die 
 and are succeeded by other individuals, and 
 meanwhile the improvements go on, the sum 
 total of the community wealth steadily in-
 
 46 Property 
 
 creases until farms and mines and factories 
 are exhausted then the individuals cannot pro- 
 duce so much during their lifetimes and the 
 total wealth decreases. 
 
 All this is quite plain, but when you inquire 
 closely why the individuals work so hard, why 
 they try to produce so much more than each 
 one consumes you hear of this scheme of 
 ^' oivnership " this legal device which permits 
 a man to say he ' ' owns ' ' what others actually 
 possess and use. 
 
 The farm you first looked at is not ** owned " 
 by the family or the men on it, it is ^* owned " 
 by a man two thousand miles away, but while 
 he — A — has the legal title paper; another 
 man, B, has a mortgage paper of ten thousand 
 dollars on the land and buildings; C has a 
 chattel mortgage paper on the macnines used ; 
 D has a contract for purchase paper; while E, 
 the man with the family in the farmhouse, has 
 a lease paper. 
 
 These are some of the ramifications of paper 
 ownership — all legal creations as distinguished 
 from economic. 
 
 Add together the various values placed upon
 
 An Economic Fiction 4*7 
 
 these various interests and the sum total would 
 far exceed the actual value of the farm and its 
 improvements. 
 
 Theoretically the two totals should coincide, 
 but in practice they do not, as is amply demon- 
 strated in almost every foreclosure where all 
 the legal interests are merged by actual sale of 
 property; there is usually a radical scaling 
 down of paper values, and individuals who 
 thought they were rich find themselves poor. 
 
 ♦ ♦ ♦ 
 
 Look at this great railroad running from 
 New York to Chicago with its many tracks, 
 stations, warehouses, cars, locomotives, etc. It 
 is all in the actual possession of the thousands 
 of employees, from president to flagman, who 
 operate it. 
 
 Not one of those who actually control and 
 operate the road could tell who the ''owners " 
 are, nor do they care so long as the owners do 
 not interfere with efficient operation. 
 
 ♦ ♦ ♦ 
 
 On inquiry you find that the road is legally 
 '' owned '' by thousands of stockholders and, 
 ahead of the stockholders, thousands of bond-
 
 48 Property 
 
 holders, many of whom have never seen any 
 part of the line, and many of whom are women, 
 children, banks, insurance companies, and other 
 corporations, all of whom have pieces of paper 
 which are their evidences of title. 
 
 All these pieces of paper could be burned 
 without destroying a penny of actual wealth 
 and without affecting in the slightest degree 
 the daily duties of a single man or boy actually 
 engaged in working the road — excepting, of 
 course, those whose duties have to do with the 
 issuing, signing, transferring of the pieces of 
 paper — they would suddenly find themselves 
 with nothing to do — but every other employee 
 would go about his work just the same. 
 
 Just the same? 
 
 Not quite, for sooner or later they would all 
 know that private ownership of the property 
 had been abolished, that no more pieces of 
 paper would be issued, and the entire service 
 would take on the atmosphere of state service, 
 an atmosphere of listlessness and indifference, 
 the atmosphere of routine, of work with no 
 expectations save that of slow advancement by 
 seniority.
 
 An Economic Fiction 40 
 
 When you add together all the issues of 
 stocks, bonds, notes, and other forms of in- 
 debtedness, evidenced by outstanding pieces of 
 paper, the total is so enormous the question at 
 once arises, ''Is it possible the railroad is worth 
 that much?" 
 
 Probably not, or if it is, it is due to the 
 increased value of its franchise, right of way, 
 terminals — land values — due to increase of 
 population along the line rather than to actual 
 labor and money put into the property, and 
 besides much depends upon how "value" is 
 defined, and by what rule " valuing" is done. 
 
 But whether the road is worth less or more 
 than all its outstanding pieces of paper, the 
 fact is obvious that there before your eyes is 
 the physical property, the lines of rail, the sta- 
 tions, warehouses, cars, locomotives, etc., and 
 there are the workers in actual possession. 
 
 In the hands of others, stockholders, bond- 
 holders, banks, etc., are pieces of paper which 
 are bought and sold as valuable. One small 
 stock certificate for two hundred shares may 
 sell for more than a locomotive. 
 
 And because these pieces of paper do sell at
 
 50 Propcrtij 
 
 high prices there is a constant temptation to 
 print more and more and more until confidence 
 is shaken and the great structure of credit and 
 inflation collapses. A drastic period of reor- 
 ganization and readjustment follows. For- 
 tunes and savings invested in the pieces of 
 paper are lost. People are impoverished. But 
 the road goes on just the same. Not a wheel 
 ceases to turn, not an employee is laid off. It 
 often happens that during these periods of 
 destruction of paper values the road is reha- 
 bilitated and operated better than ever before. 
 While paper values are tumbling, actual values, 
 represented by labor spent upon the property, 
 are increasing. 
 
 ♦ ♦ ♦ 
 
 We are so accustomed to paper evidences of 
 wealth that we habitually confound them with 
 actual wealth. 
 
 To the farmer the wheat stored in an ele- 
 vator means more than the ivareJiouse receipt 
 issued against it, but to the banker the piece of 
 paper, the receipt, means more than the wheat. 
 The banker could not use a bushel of the wheat,
 
 An Economic Fiction 51 
 
 but lie will loan thousands of dollars on the 
 piece of paper. 
 
 ♦ ♦ ♦> 
 
 So it is with notes, stocks, bonds, mortgages, 
 the pieces of paper take the place of the real 
 properties in all commercial and financial trans- 
 actions, and the world comes to look upon them 
 as if they were actual wealth. 
 
 ♦ ♦ ♦ 
 
 THEY ARE EEAL IN THEIR WAY. 
 
 ♦ ♦ ♦ 
 
 That is the most important economic truth to 
 get clearly in mind at the very outset of any in- 
 vestigation of real or apparent inequalities in 
 the distribution of wealth. 
 
 »> ♦!♦ 
 
 There are enormous inequalities in the dis- 
 tribution of paper wealth. 
 
 The inequalities in the distribution of actual 
 wealth are slight in comparison. 
 
 We are getting close to the heart of the prob- 
 lem of the distribution of wealth. 
 
 The distribution of actual wealth is one 
 thing.
 
 52 Property 
 
 The distribution of paper wealth is quite a 
 different thing. 
 
 There are thousands and thousands of paper 
 millionaires. There may be even a paper bil- 
 lionaire. 
 
 There is not and never has been an actual 
 millionaire — except 
 
 A. In land 
 
 B. In luxuries 
 
 Both of which exceptions are fully consid- 
 ered in chapters ix and x. 
 
 It is a physical possibility for a man to 
 ''own" and have in his exclusive possession 
 paper representing millions — hence he is a 
 millionaire on paper. 
 
 It is — with the exception of land and lux- 
 uries — a physical impossibility for a man to 
 "own" and have in his exclusive possession 
 more than a few hundreds of thousands in 
 actual wealth — hence he is not a millionaire 
 when it comes to actual use and control of 
 wealth to the exclusion of others. 
 ♦ ♦ ♦ 
 
 The cry of the agitator, the argument of the 
 socialist and communist are directed against
 
 An Economic Fiction 53 
 
 the paper millionaire. 
 
 Little or no attention is paid to the actual — 
 1. e., the land or luxury millionaire. 
 
 It seems to be assumed that if a man is a 
 paper millionaire he will also be a land or 
 luxury (or both) millionaire. 
 
 It by no means follows. 
 
 If we exclude land millionaires who are in 
 an economic class by themselves the luxury 
 millionaires are comparatively few in numbers, 
 so few they are very conspicuous in the cities 
 where they live. 
 
 Most paper millionaires live in modest homes 
 and are kno^\Ti only as exceptionally hard 
 workers. They go on all their lives accumulat- 
 ing these pieces of paper or enlarging their en- 
 terprises, spending little on themselves and 
 their homes. 
 
 ♦ * ♦ 
 
 The trouble is not in the distribution of 
 paper wealth but in the distribution of actual. 
 
 True, inequalities in the distribution of paper 
 wealth may and often do lead to inequalities in 
 the distribution of actual, since paper wealth 
 is power over actual, but this power is not exer-
 
 54< Property 
 
 cised nearly so often as the agitator and the 
 socialist think. 
 
 It is exercised so seldom that the cause of 
 social, industrial, and commercial ills must be 
 sought elsewhere. 
 
 And first of all in human nature itself. 
 
 That is the first great source of all our 
 troubles — the weaknesses and vices of man- 
 kind. 
 
 Our institutions are no better than we are. 
 
 That is not quite true, for happily in a sense 
 they are. Men preach better than they prac- 
 tice. Bad as they seem to be at times public 
 — publicly professed — morals are always bet- 
 ter than private. We profess and upJiold 
 higher standards than we attain. In politics 
 and business we condemn practices we secretly 
 follow. 
 
 Every community has hundreds of laws it 
 cannot enforce, laws against drunkenness and 
 prostitution, laws against unfair business 
 methods, against cheating, deceiving, and 
 fraud ; pure food laws, laws for safety, hygiene, 
 protection of women and children, and so on 
 endlessly.
 
 An Economic Fiction 55 
 
 These laws are never enforced as fully as 
 they should be — why ? 
 
 Because the community cannot triumph over 
 the ingenuity and inherent waywardness of its 
 individual members. 
 
 '^ 'Sf ^ 
 
 Every evil known to society has its origin in 
 and derives its strength from the individual. 
 
 When employers and employees are in violent 
 conflict, each side asserting the rigJitness of its 
 cause and conduct, the thinking man knows 
 that each side is made up of men equally 
 greedy, equally unscrupulous, equally quick to 
 fight, kill, burn — in short of men of the same 
 day and generation, just average human 
 heings; no white and spotless angels among 
 them. 
 
 ♦ ♦ ♦ 
 
 Conceding that the great source of all our 
 troubles, ethic as well as economic, is our own 
 imperfect human nature, still it does not follow 
 that we should fold our hands and sit supine. 
 On the contrary w^e have two tasks : 
 First, to hammer away with all our strength 
 at the weaknesses of our hum.an nature, and
 
 56 Propertij 
 
 make ourselves better, so we may live up to 
 our standards — that is the ethic, and, if you 
 please, the physiologic task. 
 
 Second, to investigate profoundly and impar- 
 tially social and economic conditions with a 
 2. view to understanding and remedying them in 
 so far as imperfect human beings can remedy 
 inequalities that are so largely due to inherent 
 human imperfections — that is the economic 
 and sociologic task. 
 
 ♦> ♦ ♦ 
 
 Inasmuch as these two fundamentally dis- 
 tinct conditions are at the base of all our 
 troubles it goes without saying that the re- 
 former who promises his hearers perfection as 
 the result of the adoption of his economic or 
 social theories is promising something that 
 cannot he. 
 
 The socialist who draws a picture of social 
 contentment and happiness providing his sug- 
 gestion of state ownership of capital, be adopted 
 ignores completely the human factor, ignores 
 the physical, mental, moral, differences that 
 exist between man and man, nation and nation, 
 race and race.
 
 An Econoynic Fiction 57 
 
 His argument assumes that the adoption of 
 an economic reform would instantaneously 
 make imperfect men perfect. To bring the 
 argument down to earth, it assumes that the 
 moment the government takes over a given 
 railway every employee instantly becomes an 
 miselfish altruistic being whose sole thought is 
 the welfare of humanity. 
 
 The hard cold fact is that labor unions in 
 control of government enterprises are more 
 selfish, more militant, more arbitrary, more 
 aggressive than in privately conducted enter- 
 prises — as the recent experiment of govern- 
 ment control of the railroads in this country 
 has convincingly demonstrated. 
 ♦ ♦ ♦ 
 
 We have reached the conclusion that while 
 the nominal or legal wealth of an individual 
 may be very large,, the actual wealth controlled 
 or consumed by him may be relatively small. 
 
 A man may be nominally a millionaire or 
 even a billionaire, and actually control and con- 
 sume less wealth than a railroad president who 
 has little besides his salary. 
 
 In fact the railroad president may actually 
 
 //
 
 58 Property 
 
 control and manage 'productively the wealth 
 that is nominally and legally the property of 
 the millionaire. 
 
 Take the extreme case of the millionaire who 
 belongs to the "idle rich," who does nothing 
 but amuse himself in ways that are productive 
 of no good to the community. 
 
 This is an extreme hypothesis because even 
 the most worthless and dissolute millionaire 
 may build houses, improve estates, build yachts, 
 buy fine homes or automobiles, and in his very 
 extravagance unintentionally encourage the 
 production of useful and beautiful things. 
 
 But take the extremest of extreme cases — 
 the man whose very existence is a nuisance to 
 the community and whose death would be a 
 relief to family, friends, and the city in which 
 he lives. The moral harm he does by his mode 
 of life may be great, but that is a consideration 
 by itself and applies to the poor man as well 
 as the rich. 
 
 His economic cost to the community is the 
 money he wastes on himself and others. 
 
 It would be interesting to analyze this term 
 ** waste," for it would be found that a certain
 
 An Economic Fiction 59 
 
 percentage of the money spent in the most 
 wasteful manner is not lost, but directly or 
 indirectly benefits others. The moral evil of 
 the expenditures may far overshadow the inci- 
 dental economic benefit, but the benefit may be 
 there just the same. 
 
 To state the proposition more baldly; 
 
 A rich man might take a cargo of wheat and 
 sink ship and cargo in the middle of the 
 ocean. That would be total loss to him and the 
 community — absolute waste. 
 
 If instead of so doing he spent the value of 
 the ship and wheat — say $200,000 in the wild- 
 est sort of riotous living, the moral example 
 would be so bad the notoriety and shock might 
 result in good; but some of the money would 
 percolate back into productive channels; it 
 would not be all lost as if the wheat were sunk 
 in the ocean. 
 
 The worst economic effect of the wasteful 
 spending would be to divert men and women 
 for the time being from useful employments to 
 the idle or vicious employments demanded by 
 the spender. 
 
 There would be, however, at least some sup-
 
 60 Property 
 
 port and stimulation of occupations, trades, and 
 industries of economic value to the community. 
 The reckless buying of high-priced automobiles 
 would be largely waste, but at the same time 
 this reckless encouragement of automobile 
 makers to exercise all their ingenuity to turn 
 out more perfect, faster, and more elaborate 
 cars, would stimulate the production of better 
 cheap cars, just as the time and money formerly 
 wasted in this country in horse racing was not 
 wholly wasted since it helped perfect the breeds 
 of horses for all purposes. 
 
 The yearly account of the worthless rich man 
 with the community would stand as follows : 
 To the sum total of all the wealth 
 
 consumed and spent — say $200,000 
 
 By so much of that amount as 
 directly or indirectly advances use- 
 ful employments — say 25,000 
 
 Annual cost to the community $175,000 
 
 That is the item the community is interested 
 
 in. 
 
 He may be "worth" ten million dollars. 
 
 Suppose he inherited that amount. His in-
 
 An Economic Fiction 61 
 
 \ 
 
 come at only five per cent would be $500,000, 
 three hundred thousand dollars of which he 
 invests in more stock and bonds, because he 
 cannot spend more than two hundred thousand 
 dollars. 
 
 The public disapproves his way of living and 
 rightly looks upon him as a nuisance, and be- 
 cause he is a vicious member of the community 
 and spends lavishly he brings all millionaires 
 into disrepute. The fault of the individual is 
 attributed to his wealth, yet he is not touching 
 a penny of his ten million dollars. Every dol- 
 lar is productively engaged in the hands of 
 others. If his fortune consists of railroad 
 stocks his very existence may be unknov.Ti to 
 the men running the roads; if it consists of 
 government bonds whether he lives or dies is 
 immaterial to the government, all his money is 
 devoted to public uses just the same as if the 
 government confiscated it and stopped interest 
 on its bonds. 
 
 Not only is the principal of ten million dol- 
 lars productively engaged, but $300,000 of the 
 income goes back into productive uses. 
 
 Therefore 50 Jong as he continues to squander
 
 62 Property 
 
 only $200,000 per year, twenty-five thousand 
 dollars of which is not wasted, his economic 
 cost to the commnnity is $175,000 per year; his 
 wealth of ten million dollars is a legal fiction. 
 It is very much as if the community gave him a 
 pension of $175,000 per year to squander. 
 ♦ ♦ ♦ 
 
 We have taken an extreme case. There are 
 many men and women, young and old, with 
 large incomes who spend viciously and fool- 
 ishly large percentages of their incomes ; men 
 and women who are veritable nuisances to 
 themselves, their families, their cities — to 
 civilization itself. 
 
 But the number is not actually so large as is 
 commonly supposed; and with those the per- 
 centage of income absolutely wasted is not so 
 great as coimnonly reputed. 
 
 It is said that one swallow does not make a 
 summer, but it is pretty nearly true that one 
 fool makes a winter. 
 
 One monl^ey dinner, one dog luncheon, 
 heralded by the press, prejudices the entire 
 country not only against a large class, but 
 against a city.
 
 An Economic Fiction 63 
 
 The rich — the richer — man is everj^where, 
 the rich farmer, merchant, mannfacturer, 
 banker. 
 
 And the overwhelming majority of rich men 
 — of men who have more than the average — ■ 
 whether farmers or merchants, and w^hether 
 worth ten thousand or ten millions continue to 
 ivorh in one w^ay or another for the good of the 
 community. If they ' ' retire ' ' from more 
 active work it is to take up something else, 
 some hobb}^, that may be of even greater benefit 
 to the community.
 
 IV 
 
 ONLY FOR LIFE 
 
 '' We brought nothing into this ivorld and it 
 is certain we can carry nothing out." 
 
 So said Saint Paul and trul}''. 
 
 The rich man dies like the poor man, of all 
 his wealth he takes not a penny with him. 
 
 At most therefore private property is but a 
 life estate. 
 
 AVhat a man does not actually consume dur- 
 ing his lifetime he must leave behind for others 
 to enjoy. 
 
 One moment he is said to be ' ' worth ' ' a 
 million dollars, the next he breathes his last 
 and is " worth " nothing. 
 
 The food we are eating may be said to be 
 our own in the most absolute sense inasmuch 
 as we are actually consuming and absorbing it. 
 
 The clothes w^e wear may be said to be our 
 own, but in not quite so absolute a sense since 
 our sudden death would leave them behind for 
 others to use. 
 
 Others have a still greater reversionary in- 
 terest in our houses, and so on. 
 
 64
 
 0}tJu for Life 65 
 
 The rich man spends a million dollars on a 
 great estate in the country. He is said to 
 '* own " it, and so he does in a legal sense. The 
 law — which is simply the custom of society as 
 at present constituted — sa^^s he may have 
 exclusive possession of the estate^ during his 
 lifetime, may sell it, lease it, dispose of it by 
 will, and if he does not dispose of it by will the 
 law names the heirs to whom the estate shall go 
 on the " owner's " death, and if there are no 
 heirs then the law says the estate shall go to 
 the state, to the community, in which event the 
 legal fiction of that particular private property 
 vanishes in thin air. 
 
 ♦ ♦ ♦ 
 
 In tribes it is the custom, and in civilized 
 states it is the laiu, that on a man 's death title 
 to his property shall pass to certain persons, 
 usually members of his family ; if he leaves no 
 famil}^ or relatives the tribe or the state may 
 take his property, and the tribe or the state 
 
 ^ Always subject to the superior rights of the community 
 such as the right of eminent domain, control for purposes of 
 sanitation, etc., which need not here be enumerated but which 
 very materially modify that absolute control which is popu- 
 larly supposed to go with private property.
 
 66 Property 
 
 usually takes a portion as a matter of custom 
 or under succession and inheritance tax laws. 
 
 Furthermore the character of the property 
 makes a great difference in its disposition. 
 
 Every community recognizes the distinction 
 between ownership of realty and personalty. 
 
 The land a man owns passes under certain 
 special provisions of the law, while his per- 
 sonal property passes under separate and more 
 or less different provisions. 
 
 In no two countries and in no two states of 
 this country are the succession laws and in- 
 heritance taxes precisely the same, and in 
 every country and every state these laws are 
 undergoing changes at the will of the com- 
 munity. 
 
 For instance the laws of England and Scot- 
 land regarding the descent of real property are 
 very different, and again in both countries the 
 distribution of personal property is governed 
 by entirely different regulations. 
 
 In England as regards lands the Eules of 
 Inheritance apply, while as regards personal 
 property the Statute of Distribution governs. 
 
 Until 1890 this last named statute provided
 
 Only for Life 67 
 
 that where a man died without a will, leaving a 
 widow and no children or next of kin, the 
 widow took one-half the personal estate while 
 the other half went to the Crovv^l. 
 
 In the United States some of the states follow 
 the Roman law, some the Common law, while 
 others like California, Louisiana, and Texas 
 follow French and Spanish law. 
 
 To add to the confusion it is generally the 
 rule that the descent of real property is gov- 
 erned by the laws of the country or state where 
 the property is situated, the distribution of 
 personal property is governed by the laws of 
 the country or state wherein the owner was 
 domiciled — had his residence. 
 
 So that a man by buying a residence across 
 a street, if that street happens to mark the line 
 between two countries or states may without 
 knowing it change materially the rights of his 
 widow and relatives in the distribution of his 
 personal estate, he m-ay even limit his own 
 power to dispose of that estate by will. 
 ♦ ♦ ♦ 
 
 The manner in which tribes from the most 
 primitive states through to the most highly
 
 68 Property 
 
 civilized have treated succession to property 
 demonstrates clearly the purely human and 
 social character of all property rights, and the 
 community's absolute control over same. 
 
 <^ ^ r?4 
 
 Now why have savage tribes by custom and 
 civilized states by laiv given certain persons, 
 family, and relatives, the right to succeed to — 
 that is enter into possession of — either all or a 
 portion of the dead man's property? 
 
 ♦ ♦ "> 
 
 First — for the obvious reason that when a 
 man disappears, or is incapacitated by illness, 
 or dies, someone must take possession of his 
 property. 
 
 If no parties are designated by custom or 
 law then there will be a scramble and the death 
 of each individual would be awaited — perhaps 
 accelerated — by all near at hand in order that 
 they might seize his possessions. 
 
 These conditions have actually prevailed in 
 whole or in part with the result that even 
 primitive tribes find it necessary to follow cus- 
 toms whereby either the chief, or the relatives
 
 Only for Life 69 
 
 of the dead man, quietly assume possession of 
 his property. 
 
 ♦:♦ ^ ♦:♦ 
 
 A custom or law of succession is necessary to 
 prevent strife and ivaste. 
 
 There is no question of abstract right in- 
 volved. 
 
 A son has no more right to succeed to his 
 father's property than a daughter, or a brother, 
 or a cousin, or a stranger. His right is estab- 
 lished by custom or law and may be curtailed 
 or abolished by custom or law. 
 
 It is so generally the custom for children and 
 near relatives to inherit that most people labor 
 under the impression they have a peculiar, 
 almost * ' sacred ' ' right. It is highly important 
 to realize that no such abstract right exists. •'' 
 
 ♦> ♦:« 
 
 The foundation of the right of succession 
 and inheritance is purely practical. 
 
 True, the heirs or successors may prove 
 incompetent, but even at the risk, where there 
 is no will, of turning the property of the dead 
 man over to incompetent children or relativeSi } 
 experience has demonstrated it is wiser for the
 
 70 Property 
 
 community to liave fixed lav;s of succession 
 than it would be for the conuuunit}^ to attempt 
 to investigate in each instance the competency 
 of the heirs and distribute the estate accordingly 
 — a course ideally desirable but 'practically 
 impossible. 
 
 ♦ ♦ ♦ 
 
 The entire question of inheritance and suc- 
 cession is therefore a purely economic ques- 
 tion. 
 
 The sole object of every inheritance or suc- 
 cession law should be to secure to the com- 
 munity the highest degree of efficiency in the 
 management of the property abandoned by the 
 man who has disappeared, died, or become 
 incapacitated by illness or other causes. 
 
 ♦ ♦ ♦ 
 
 Yvliether existing inheritance and succession 
 laws accomplish this object is a subject by 
 itself. 
 
 The points we wish to impress here are ; 
 ' Property is so essentially sl community cre- 
 ation that individuals — poor and rich — come 
 and go without lessening the wealth of the com- 
 '\i munity by so much as a penny.
 
 Only for Life 
 
 If Mr. Rockefeller should die tomorrow tlie 
 wealth of the country and the world would not 
 be increased or decreased by a single farthing. 
 There would be a shifting of titles under the 
 law, but that is all. And if it so happened the 
 law could find no children or relatives to in- 
 herit and no will disposing of the estate, then 
 the community would take it all. 
 
 We might put the matter this way ; the com- 
 munity would first do all it could to find a will 
 disposing of the estate; failing to find a will I 
 the community would then do all it could to I 
 find relatives to inherit; failing to find rela- ' 
 tives the community would reluctantly take 
 over the vast fortune and try to do the best it 
 could with it. 
 
 Yvliy do we say " reluctantly, " when most 
 people would say the public vrould be mighty 
 glad to get the fortune % 
 
 We say ^'reluctantly" because that is the 
 real attitude of the community toward succes- 
 sion generally. This is demonstrated by the 
 fact that every com.munity does provide by 
 law that every effort shall be made to find 
 individuals to take the property and manage it./.
 
 72 Property 
 
 If experience of both tribes and civilized 
 peoples had not demonstrated that this is the 
 wiser economic course, communities long ago 
 would have established the custom of com- 
 munity succession. " 
 
 As regards a given fortune the unthinking 
 portion of the public might be glad if no rela- 
 tives could be found, but that would not be the 
 true and logical attitude of the community; the 
 feeling of satisfaction in the particular case 
 would be diametrically opposed to the spirit of 
 the inheritance laws. 
 
 «s» '•♦ ^ 
 
 Grovernments the world over are interfering 
 more and more with private control of prop- 
 erty, to the extent of limiting and even abolish- 
 ing it. On one pretext and another govern- 
 ments are appropriating, not to say confiscat- 
 ing, larger and larger percentages of estates 
 (t) j and possessions. From a stamp tax on a deed 
 2- ' to an inheritance or succession tax ; from a suc- 
 2- cession tax to the appropriation of the entire 
 estate where there are no heirs and no will, it 
 is but a matter of degree in the assertion of the. 
 superior rights of the community — the asser-
 
 Only for Life 73 
 
 tion of the real ownershix) as against tlie 
 nominal. 
 
 In Germany, even prior to the World War, 
 the need of public revenue was so great that 
 imperial right of succession {Reicliserbreclit) 
 was seriously advocated. 
 
 One form of the proposition was that first of 
 all the tax on inheritance should be heavy; sec- 
 ondly that beyond brothers and sisters no col- 
 lateral relations should inherit unless specifi- 
 cally provided for by will, but that all property 
 now passing by law to such distant relations 
 should pass to the state. 
 
 It was estimated^ that this change in the 
 laws of succession would yield the state over 
 five hundred millions of marks. 
 
 If it did not jdeld sufficient revenue, obvi- 
 ously the next step along the same line would 
 be for the state to take the place of brothers 
 and sisters, or take one-half that goes to 
 children, and so on to the taking of all a man 
 leaves. 
 
 Granting the power and the right of the state 
 
 • Bernhardi, Germany and the Next War, pp. 269-271,
 
 74 Property 
 
 so to do, the vital question is the economic 
 expediency. 
 
 Up to certain limits of appropriation by the 
 state the individual might not be discouraged. 
 Beyond certain limits the incentive to the in- 
 dividual to put forth his best efforts all his life 
 long, would diminish. 
 
 ♦ ♦ ♦ 
 
 In the United States the powers of Congress 
 and the various state legislatures to deal 
 arbitrarily with property rights are limited by 
 the federal and state constitutions. 
 
 The constitutional restrictions upon the 
 powers of legislatures have led the American 
 people to believe there is something sacred in 
 property rights, something that is above and 
 beyond the power of the coimnunity to do with 
 it as it pleases. 
 
 There is nothing in this notion. 
 
 / The community as a whole is all-powerful to 
 regulate its internal affairs according to its 
 
 . best judgment. 
 /' This truth is recognized in the United States 
 by the power in the people to change their con- 
 
 , stitutions as they please.
 
 Only for Life 75 
 
 While the present constitutions stand, cer- 
 tain rights — such as certain property rights 
 — are above the powers of legislatures to cur- 
 tail. But in constitutional conventions the 
 people can create and suppress rights to suit 
 themselves. They can abolish constitutions \ 
 and establish any form of socialism or com- 
 munism they desire. They can limit the rights 
 of the individual in any manner they deem best. 
 
 A man's right to what he has depends wholly 
 upon the attitude of those about him. He has 
 no right beyond social — i. e. commercial recog- 
 nition. If the community wants what the in- 
 dividual has, it will take it away from him, and 
 he will never think of asserting a rigJit against 
 the overwhelming voice of the community. 
 
 But if the community recognizes the fact 
 that it is better for all that the individual's 
 dominion be recognized within greater or lesser 
 limits, then private property — i. e. private con- 
 trol — begins and is established. 
 
 For instance a man may " ov.ai " for miles 
 the land on both sides of a navigable stream, 
 but the community does not permit him to as- 
 sert any ownership over the stream. I
 
 76 Property 
 
 Again a man may * ' own ' ' a large ranch and 
 all the roads through it. The connnunity de- 
 velops to a point where it wants the roads so 
 it appropriates them, and it may cut others 
 and allow railroads to condemn rights of way, 
 etc., etc. 
 
 *** *** *♦* 
 
 Everybody recognizes the right of the com- 
 munity to pass the most stringent law^s affect- 
 ing personal liberty, affecting the right of the 
 individual to do things ; it goes without saying 
 that the right of the community to pass laws 
 affecting the right of the individual to own 
 things is even clearer. 
 
 It is all a matter of conduct anyway. In 
 one case it is a matter of our conduct w^ith rela- 
 tion to others; in the other case it is a matter 
 
 of our conduct with relation to things. 
 »> *;« »;* 
 
 A dog ' ' owns ' ' a bone so long as he is 
 strong enough or fleet enough to prevent other 
 dogs from taking it. 
 
 Man " owns " a bone in a more highly devel- 
 oped sense because it has come to be the sense, 
 the custom, and so the laiv of the community
 
 Only for Life 
 
 that it is to tlie interest of the community that 
 the individual should not be compelled to light 
 to keep what he has fairly gotten. 
 
 It is even believed to be to the interest of 
 the community in the long run that the posses- 
 sion of the individual should not be disturbed 
 in many cases where he got control unfairly. 
 
 The community bars the rightful owmer after 
 a certain length of time by statutes of limita- 
 tion, saying in effect, "Unless you claim your 
 bone within reasonable time, you cannot dis- 
 turb him who has it." 
 
 <s» ♦> ^ 
 
 In short the recognition of private property 
 is nowhere absolute. It differs in every coun- 
 try. 
 
 Just noY>^ violent assaults are beinsr made 
 upon private 0A\Tiership ot large estates in / 
 countries so widely different as Eussia, Great 
 Britain, and Mexico. 
 
 From the land-owners go up cries of hard- 
 ship, injustice, confiscation, robbery, etc., etc. 
 
 Whether any given proposition of appropria- 
 tion or confiscation is unfair is a nice question 
 and turns upon the extent to which a eommu-
 
 78 Property 
 
 nity by certain laws lias encouraged tlie in- 
 dividual to do certain things, and then by sud- 
 den reversal of those laws deprived the in- 
 dividual of the fruits of his labors. 
 
 Precisely this sort of a question arises with 
 every proposed reduction of a protective tariff, 
 every proposed law prohibiting the manufac- 
 ture or sale of alcoholic liquors, and in lesser 
 degrees regarding the enforcement of pure 
 food laws, etc. 
 
 A community develops along certain lines, 
 under certain laws. Capital and labor are at- 
 tracted to certain industries. 
 
 Suddenly the community experiences a 
 change of heart, laws are passed that virtually 
 destroy entire industries, possibly entire cities 
 and sections. 
 
 There is no doubt about the riglit, the power 
 of the community to do these things, the only 
 question is one of economic expediency — will 
 the proposed measures be beneficial to the en- 
 tire community in the long run? If so then the 
 so-called right of the individual must give way ; 
 or rather as against the welfare of the com- 
 munity the individual has no rights. His true
 
 Only for Life 79 
 
 riglits will be found to coincide with the ad- 
 vancement of the whole. 
 
 ♦ ♦ ♦ 
 
 Those who believe in private property and 
 defend it will make more headw^ay if they 
 frankly concede at the outset there is nothing 
 sacred about it and that the community is free 
 to do as it deems best with it — strengthen, 
 modify, or totally abolish it. ^ 
 
 Starting with those premises the discussion 
 becomes dispassionate and scientific, the sole 
 question being to what extent is the recogni- 
 tion of private rights over things necessary to 
 the advancement of the community? 
 
 The world is getting restless ; it challenges in 
 a manner it never did before. It will not be 
 silenced by a ^ ' Thou shalt not. ' ' It demands 
 to know the reason why. 
 
 Men of property are becoming more liberal. 
 True, the great, the overwhelming majority 
 still accept their lands and their wealth — as 
 the Kaiser accepted his throne — as if granted 
 from on High, as possessions so peculiarly and 
 sacredly their own that for others to interfere 
 is sacrilegious. But there is a very intelligent
 
 80 Property 
 
 minority composed of men who would rather 
 tliinh than make money, who would rather be 
 rigid than rich; this minority are also asking 
 U" / the reason why — why and how private rights 
 I over things have come to be what they are, and 
 whether as they are, they are essential to the 
 economic, intellectual, and spiritual advance- 
 ment of the community, or whether on the 
 other hand some form of socialism or commun- 
 ism would not be better. 
 
 ♦j» 4» ♦!» 
 
 A great many teachers, professors, minis- 
 ters, writers, are also asking the reason why. 
 
 The world is an animated interrogation 
 mark. 
 / Not alone private property, but every social 
 and economic institution is under investigation. 
 Time-honored theories and explanations are 
 going by the board. Men will accept no man's 
 say-so. Authority is challenged. People are 
 bent upon getting to the root of things. 
 
 That is why the academic notions regarding 
 private property are having such a hard time. 
 
 That is why the land-owner, and the bond- 
 holder, and the stockholder are worrying. 
 
 ^
 
 Only for Life 81 
 
 They don't know what is about to happen. All 
 they know is that the socialists are increasing 
 in numbers, that communists and anarchists 
 are found on every street corner, and the man , 
 with money is pointed out as a public enemy. / 
 
 On first impression it would seem as if the 
 cyclone cellar is the place for the unhappy 
 millionaire, but that would be the flight of the 
 coward and moreover he could not take his 
 millions with him. 
 
 If ever the rich man needed to stand out in 
 the open and justify his economic value he 
 needs to now. 
 
 It is no time for dillydallying. If the people 
 cannot be convinced that the rich man is at 
 least as important and valuable a factor in the 
 development of the community as the poor man 
 then he will have to go. 
 
 It is not a question whether lie, as an in- 
 dividual, has a riglit to his wealth; the sole, 
 question is whether it is a good thing for the 
 community to permit him to exercise that 
 right; whether the results in the long run are 
 better than if the community took over in some 
 way part or all of his rights.
 
 
 82 Property 
 
 It is precisely this very practical question 
 that has not been fully and fairly considered 
 and answered because the true nature of pri- 
 \\vate property has not been fully understood. 
 
 It is always assumed that it is a question of 
 the community on the one side with little or no 
 control over the property, and the individual 
 on the other Avith practically absolute powers 
 of disposition. 
 
 // it were true that a man with a million or 
 ten millions owned it in such a way that the 
 community had little or no enjojTuent thereof, 
 then the argument for private property would 
 be weak indeed — only the sacred theory would 
 sustain it. 
 
 But if it should be found to be true that the 
 individual ' * owning ' ' a million virtually sim- 
 ply holds the nominal title for life, the real en- 
 joyment of practically the entire fortune being 
 in the community, then a very different aspect 
 to the problem is presented, and it is this as- 
 pect that has not been discussed in the litera- 
 ture on the subject.
 
 THE RUSSELL SAGE FORTUKB 
 
 Kussell Sage was famous in New York for his 
 parsimony and his shrewdness. He lived very 
 simply and devoted his entire time to loaning 
 and investing his money. 
 
 Because he was not a lavish spender^ and he- 
 cause he loaned and invested always with a 
 view to getting the highest returns for his 
 money, he was not popular. 
 
 Let us put it more directly, he was not popu- 
 lar because he was thrift^/ and frugal to a 
 marked degree. 
 
 Curious, is it not? — that men who spend or 
 waste wealth with reckless prodigality are usu- 
 ally popular, even though they go bankrupt 
 and cause losses to thousands, while men who 
 save and carefully invest productively are 
 looked upon as ** closefisted " — miserly — and 
 are unpopular. 
 
 * When the elevated roads were first operated in New 
 York the fare was ten cents except during the " rush " 
 hours morning and evening, A friend who knew Sage says 
 he often saw him standing in line waiting for the five-cent 
 hour. 
 
 83
 
 84i Fropcrtij 
 
 It is because people do not stop to think 
 whose money is being wasted. The common 
 impression is that the millionaire who spends 
 extravagantly is simply wasting his wealth, 
 that while he may go bankrupt others in the 
 community get some benefit. Whereas the 
 truth is that every dollar wasted is community 
 wealth, the individual simply has the 'power — 
 the legal " right " — to w^aste. 
 
 It does not matter whether the money is 
 
 spent on ugly monuments, yachts, worthless 
 
 pictures, fast horses, castles, dinners, balls, 
 
 etc. ; every dollar so spent is community ivealth. 
 
 ♦ ♦ ♦ 
 
 Why, then, should a man like Eussell Sage, 
 who saves all his life be unpopular while an- 
 other who recklessly spends the fortune he has 
 made or inherited be popular? 
 
 The obvious ansv/cr is that the public does 
 not understand the economic ivorth of the fru- 
 gal man and the economic worthlessness of the 
 foolish spender. 
 
 But there is another side — a curious psy- 
 chological side. The public — like the Lord — 
 'Moveth a cheerful giver." From time im-
 
 The Russell Sage Fortune 85 
 
 memorial people have thoughtlessly applauded 
 the man who seemed to care so little about 
 money he threw it right and left. His reck- 
 less freedom and generosity have obscured his 
 economic and other sins. 
 
 ♦ ♦ ♦ 
 
 The attitude of the public toward spending 
 will surely change as it begins to understand 
 that the wealth wasted is its wealth, made by 
 it, accumxulated by it, though the recognition of 
 certain property rights has given the in- 
 dividual the potver to do with it as he pleases. 
 
 ♦I* ♦> 
 
 From an economic point of view Russell 
 Sage should have been highly valued by the 
 people of New York, inasmuch as he was 
 quietly, and at ? loiv cost to the community, 
 loaning, reloaning, and reinvesting many mil- 
 lions of money, and it was a matter of com- 
 ment that he exercised more sagacity and fore- 
 sight than almost any banker in the city. 
 
 He may have been '' closefisted," '* miser- 
 ly," a hard man to deal w^ith; he may have 
 exacted a high rate of interest ; may have called 
 for his *' pound of flesh " when due; but these
 
 86 Property 
 
 arc all economic traits, the traits of a relent- 
 less trustee of public funds. 
 
 He did not permit his sympathies or his 
 imagination to swerve his business judgment. 
 Seemingly his one aim in life was to keep 
 every dollar he could get 'productively em- 
 ployed. 
 
 ♦ ♦ ♦ 
 
 While he w^as a rich man in the popular sense 
 'of the term he lived all his life as simply as 
 many men working on fairly modest salaries. 
 
 His entire wealth tvas in the possession and 
 control of others. 
 
 ♦ ♦ ♦ 
 
 He had no children. When he died in 1906 
 he left by will $650,000 to some twenty-nine 
 relatives; the entire residue, over $60,000,000, 
 he left to Mrs. Sage to do with as she pleased. 
 
 ♦ ♦ ♦ 
 
 His fortune when he died consisted of; 
 
 Cash — $612,619. 
 
 This represented, no doubt, his bank bal- 
 ances ; money paid in faster than he could loan 
 it out. But, if in bank, it would be produc- 
 tively engaged through bank loans.
 
 The Bussell Sar/e Fortune 87 
 
 Forty pieces of real estate — $1,945,500. 
 
 His investments in real estate were not 
 large. It is worth noting in passing that his \ 
 household furniture in his very unpretentious 
 home, No. 632 Fifth Avenue, was appraised at 
 only $8,052. 
 
 There were some twenty-three open accounts 
 — money due him from various people; and 
 fourteen mortgages. 
 
 The bulk of the estate consisted of some 152 
 loans to bankers, brokers, partnerships, cor- 
 porations, individuals, etc. This was his spe- 
 cialty, loaning money to men in need of it, and 
 the greater their need the greater his oppor- 
 tunity. He would often make loans at times 
 and under conditions when banks hesitated. / 
 Naturally he would exact his compensation for 
 the risk, and the very men benefited would 
 often denounce him as a usurer. But because 
 his fortune was ^' his own," that is to say be- 
 cause he was loaning "his own" money in- 
 stead of the money of depositors he could take 
 risks banks could not take, and it was an eco- 
 nomic advantage to the community to have
 
 88 Projx'rtij 
 
 Eussell Sage's millions available in emergen- 
 cies. 
 
 One has simply to look over tlie list of loans 
 outstanding at the time of his death — loans 
 ranging from $500,000 doY\ai — to appreciate 
 the great variety of individuals, partnerships 
 and companies he aided. 
 
 In addition to his loans he left stocks and 
 bonds of over eighty steam and street rail- 
 roads, and some sixty industrial companies; 
 stocks in six banks ; also city and state bonds. 
 ♦ ♦ ♦ 
 
 / He performed the functions of a bank except 
 that instead of receiving deposits and loaning 
 the money of others he had quite enough to do 
 loaning and investing his own. 
 
 That he met an economic need and was a val- 
 uable economic factor in the development of 
 the community was demonstrated by the price 
 the community was glad to pay for his services. 
 
 He may have had personal characteristics 
 which made him unpopular, but for that matter 
 most banks are not popular institutions — that 
 is there is a popular feeling against bankers as 
 compared with merchants and manufacturers.
 
 Tlte Bussell Sage Fortune 89 
 
 In the popular mind the manufacturer is 
 looked upon as a 'producer like the farmer; the 
 merchant is looked upon as a necessary and 
 useful factor in distribution; but the popular 
 mind fails to grasp the economic importance 
 of the banker because it looks as if he simply 
 juggled with money, producing nothing, dis- 
 tributing nothing. 
 
 The thinking man knows the banker per- 
 forms just as useful services as the manufac- 
 turer or the merchant; the banker is an eco- 
 nomic necessity in order that the farmer, the 
 manufacturer, the merchant may develop and 
 make the most of his opportunities. 
 
 As we approach the utopia the need for 
 bankers and money-loaners as we know them 
 may lessen, but if so it will be because of some 
 more scientific and economical method of per- 
 forming the services they now perform. 
 
 One thing is certain the economic utopia will 
 be attained — if ever — only along the lines of 
 increasing mobilit}^ of wealth. Economic prog- 
 ress is in direct ratio to the ductility of wealth, 
 to the safety, ease, and rapidity with which it 
 flov/s from point to point, from enterprise to
 
 90 Propertij 
 
 entGrx)rise. At present tliis ductility depends 
 almost entirely upon the services of bankers 
 and of individuals, like Sage, who perform 
 services akin to those of bankers. 
 *♦* *•* *♦♦ 
 
 What happened after his death? 
 , The fortune was steadily withdrawn from 
 productive uses and devoted to charitable and 
 philanthropic purposes. 
 
 Naturally Mrs. Sage had neither the desire 
 nor the ability to go on investing and reinvest- 
 ing in order to accumulate more. That is a 
 man's work. 
 
 Her interests and inclination were in other 
 directions, in the direction of distribution 
 rather than accumulation. 
 
 It is as if he and she had formed a life part- 
 nership wherein it was agreed that he should 
 devote all his life to accumulation, and on his 
 death she should undertake the far more diffi- 
 cult task of distribution. He took the hard, 
 economic, unpopular work, leaving to her the 
 generous, philanthropic, popular task. 
 
 Each may be a valuable factor in the life 
 and development of the community.
 
 The liiisseU Sage Fortune 91 
 
 But the risk to the commmiity began after 
 his death, when the work of tvitJidrawing and 
 spending the fortune began. 
 ♦ ♦ ♦ 
 
 During his lifetime he had only pieces of 
 paper, his fortune was a potentiality, it did not 
 exist except on paper. 
 
 After his death the fortune began to emerge, 
 so to speak, to materialize as piece after piece 
 of paper w^as disposed of, as interest and divi- 
 dends were held and spent instead of being- 
 reinvested productively. 
 
 Much of the fortune still exists in paper, is 
 still engaged productively, but year by year 
 Mrs. Sage drew out large amounts and spent 
 the same for philanthropic and public objects. 
 
 So far as the community is concerned it is 
 as if the state had inherited the fortune and 
 was steadily devoting it to the same uses, only 
 the cost -of distribution is very different. 
 
 The cost to the community of distributing 
 the Sage fortune — up to the date of Mrs. 
 Sage's death — was what Mrs. Sage spent on 
 herself and what she paid her advisers — prob- 
 ably not a large amount all told.
 
 92 Property 
 
 f If the state had inherited the fortune, every- 
 one knows that a large portion of it would have 
 been wastefully used in the sux^port of offices 
 and office-holders. 
 
 The public would rather leave the distribu- 
 tion of these millions to a woman and her 
 trusted advisers, people wiiose sole thought is 
 to do all the good they can, than leave it to 
 either the State House in Albany or the City 
 Hall in New York. 
 
 Mrs. Sage and her advisers may have made 
 mistakes, but they were honest mistakes of 
 heart and judgment. They did not plunder 
 the estate or spend a dollar for political ad- 
 vantages. 
 
 One of the greatest defects of our governing 
 and administrative mechanism is that the com- 
 munity has practically no machinery for the 
 \ spending of money except political. 
 
 It is a common knowledge that a man may 
 be a very good legislator and a very poor busi- 
 ness man or philanthropist. 
 
 It is a fatal defect so far as efliciency and 
 disinterestedness are concerned to permit Con-
 
 The Russell Sar/e Fortune 93 
 
 gress or any legislative body to have anything 
 to do with the manner in which money shall be 
 spent by the spending departments. 
 
 A business department such as the post office 
 should not have its headquarters at Washing- 
 ton, The gross impropriety of the railroads 
 of the country maintaining headquarters in 
 Washing-ton has been demonstrated, yet if the 
 government bought the railroads the head- 
 quarters would be at once established within 
 the shadow of the capitoP with the inevitable 
 result, the railroads would become a part of 
 the huge political machine. 
 
 We are beginning to see why all advanced 
 people instinctively uphold property rights and 
 extend them after the death of the individual. 
 
 First of all it is because fortunes that exist \) 
 on paper are in reality more efficiently engaged ) 
 in production than if the community had the ;' 
 title. 
 
 Secondly^ when those who have accumulated 
 or inherited the fortunes begin spending and 
 giving, as a rule they do it with less waste and , 
 less cost, and with finer foresight and imagina- j 
 
 • As has been the case during the war.
 
 / 
 
 94 Property 
 
 Hon than if the community seized and spent the 
 fortunes. 
 
 ♦ *> ♦ 
 
 Mrs. Sage died November 4, 1918, leaving a 
 v^ill vrhich made a final distribution of the Sage 
 fortune. 
 
 During the twelve years she survived her 
 husband she gave away between thirty and 
 forty millions of dollars, in part as follows : 
 
 rOE CHAKITABLE INSTITUTIONS 
 
 An endowment fund of $10,000,000 to the 
 Russell Sage Foundation, the income to be 
 used for the betterment of social and living 
 conditions. 
 
 To the Eussell Sage Institute of Pathology, 
 an endowTuent fund of $300,000. 
 
 For the Association for Eelief of Respect- 
 able, Aged, Indigent Females, an addition to 
 its building on 104th Street, $25,000. 
 
 Adirondack Cottage Sanitarium, $25,000. 
 
 Working Girls' Home on East Twelfth 
 Street, $25,000. 
 
 To the Young Men's Christian Association, 
 for a new building for the International 
 Committee, on Twenty-eighth Street, New 
 York, $350,000. 
 
 For addition to Y. M. C. A. Building at 
 Brooklyn Navy Yard, about $340,000. For
 
 The Russell Sage Fortune 95 
 
 building at Fort McKinley, Philippines, $25,- 
 000; for Long Island Railroad Branch, new 
 building at Long Island City, $100,000; for 
 new building at Fort Slocum, $50,000. 
 
 EDUCATIOXAI. INSTITUTIONS 
 
 Rensselaer Polytechnic Institute, Troy, $1,- 
 000,000. 
 
 Troy Female Seminary, (Emma Willard 
 School), $1,000,000. 
 
 Harvard University, a new dormitory. 
 
 Yale Universit}^, the Hillhouse property, con- 
 sisting of thirty acres, at a cost of about 
 $650,000. This constitutes what is now known 
 as the Pierson-Sage Campus. 
 
 Princeton University, dormitories and tower. 
 New York University, for the purchase of 
 additional land about $300,000. 
 
 Northfield Seminary, a memorial chapel. 
 
 Gifts to Syracuse University, Idaho Indus- 
 trial Institute, Lincoln University, Girls' 
 School at Constantinople, and the Berry 
 School at Rome, Georgia. 
 
 To the Metropolitan Museum of Art, the 
 Bolles Collection of American Colonial fur- 
 niture and household art. 
 
 FOR NATIONAL OR CITY PURPOSES 
 
 Constitution Island, opposite West Point, 
 purchased and presented to the United States 
 Government.
 
 96 Property 
 
 The City Hall in New York, as respects the 
 rotunda and the governor's room, restored 
 under the direction of the Art Commission. 
 
 Large plantations of rhododendrons, at a 
 cost of about $60,000, for Central Park. 
 
 Libraries of technical books to each of the 
 258 fire houses in New York City. 
 
 For Sag Harbor, Long Island, a public li- 
 brary, including land, building, books, and 
 endowment, a new public school, and an ex- 
 tensive playground. 
 
 A bird refuge in southern Louisiana, known 
 as Marsh Island, consisting of about 70,000 
 acres. 
 
 By her will she distributed the balance of the 
 estate. Aside from a bequest of eight millions 
 to her brother and other personal bequests 
 amounting to about two hundred thousand dol- 
 lars the entire fortune then in her hands, esti- 
 mated at over forty millions, was given away. 
 
 On the face of the will the residue w^ould be 
 
 distributed approximately as follows: 
 
 Eussell Sage Foundation $5,600,000 
 
 Troy Female Seminary 1,600,000 
 
 AVoman's Hospital in the State of 
 
 New York 1,600,000 
 
 Board of Plome Missions of the 
 Presb3i;erian Church of America 
 (Woman's Executive Committee). 1,600,000
 
 The Russell Sage Fortune 97 
 
 Woman's Board of Foreign Mis- 
 sions of the Presbyterian Church. 1,600,000 
 New York City Mission and Tract 
 
 Society 1,600,000 
 
 American Bible Society 1,200,000 
 
 New York Bible Society 400,000 
 
 Children's Aid Society 1,600,000 
 
 Charity Organization Society 1,600,000 
 
 Presbyterian Board of Eelief for 
 Disabled Ministers and the Wid- 
 ows and Orphans of Deceased 
 
 Ministers 800,000 
 
 Metropolitan Museum of Art. . . . . 1,600,000 
 American Museum of Natural His- 
 tory 1,600,000 
 
 New York Botanical Garden , 800,000 
 
 New York Zoological Society 800,000 
 
 New York Public Library 800,000 
 
 Troy Polytechnic Institute 800,000 
 
 Union College, Schenectady 800,000 
 
 Syracuse University 1,600,000 
 
 Hamilton College, Clinton, N. Y.. . 800,000 
 
 New York University 800,000 
 
 Yale University 800,000 
 
 Amherst College 800,000 
 
 Williams College 800,000 
 
 Dartmouth College 800,000 
 
 Princeton University 800,000 
 
 Barnard College 800,000 
 
 Bryn Mawr College 800,000 
 
 Vassar College 800,000 
 
 Smith College 800,000 
 
 Wellesley College 800,000 
 
 TusKegee Normal and Industrial 
 Institute 800,000
 
 98 Property 
 
 New York Infirmary for Women 
 
 and Children 800,000 
 
 Presbyterian Hospital in the City 
 
 of New York 800,000 
 
 State Charities Aid Association. . . 800,000 
 
 Hampton Institute 800,000 
 
 Troy Female Seminary 50,000 
 
 Association for the Belief of Re- 
 spectable, Aged, Indigent Females 
 
 in the City of New York 125,000 
 
 Woman's Hospital in the State of 
 
 New York 50,000 
 
 Board of Home Missions of the 
 Presbyterian Church of the United 
 States of America (Woman's Ex- 
 ecutive Committee of Home Mis- 
 sions) 25,000 
 
 Woman's Board of Foreign Mis- 
 sions of the Presbyterian Church. . 25,000 
 New York City Mission and Tract 
 
 Society (Woman's Board) 20,000 
 
 New York Female Auxiliary Bible 
 
 Society 10,000 
 
 Children's Aid Society of the City 
 
 of New York 10,000 
 
 Charity Organization Society of 
 
 the City of New York 20,000 
 
 First Presbyterian Church of Syra- 
 cuse 10,000 
 
 First Presbyterian Church of Sag 
 
 Harbor 10,000 
 
 Society for the Relief of Half-Or- 
 phan and Destitute Children of the 
 City of New York 25,000
 
 The Russell Sage Fortune 99 
 
 New York Institute for the Deaf 
 
 and Dumb 25,000 
 
 Home for the Friendless 100,000 
 
 New York Excliano-e for Women's 
 
 Work 25,000 
 
 Woman's National Sabbath Alli- 
 ance 25,000 
 
 Ladies' Christian Union of the City 
 
 of New York 100,000 
 
 Working Women 's Protective 
 
 Union 10,000 
 
 Servants of Relief for Incurable 
 
 Cancer 25,000 
 
 Salvation Army 25,000 
 
 Park College 100,000 
 
 Idaho Industrial Institute 200,000 
 
 Old Ladies' Home at Syracuse. . . . 25,000 
 Northlield Schools ( Northfield 
 Seminary and Mount Hermon 
 
 Boys' School) 100,000 
 
 Middlebury College 100,000 
 
 Eutgers College 100,000 
 
 Y. M. C. A. of the City of New York 100,000 
 
 Y. W. C. A. of the City of New York 100,000 
 
 Mount Sinai Hospital 100,000 
 
 Syracuse Universitv 100,000 
 
 Hampton Institute ' 100,000 
 
 In the twelve years since the death of Russell 
 Sage the benefactions of Mrs. Sage reached a 
 total estimated to be between $35,000,000 and 
 $40,000,000, so that, during her life and after 
 her death, her gifts for public uses make up a
 
 100 Pyopertij 
 
 sum between $75,000,000 and $80,000,000. The 
 philanthropies of John D. Rockefeller and An- 
 drew Carnegie are the only ones believed to 
 have been greater. 
 
 Mrs. Sage had used a part of the capital as 
 well as the income of the estate for her phi- 
 lanthropies, so that the property she leaves is 
 less by several millions than that which was 
 left to her. She received from her husband's 
 estate $64,153,800.91. 
 
 ♦ ♦ ♦ 
 
 The first and obvious comment is that a 
 woman of ninety could not possibly have ascer- 
 tained the needs of all the institutions and 
 objects named. 
 
 She was guided by either her mere impulses 
 or by her advisers. If by her advisers then 
 they and not she distributed the fortune and 
 as they are not named publicly and assume no 
 responsibility the net result is the arbitrary 
 withdrawal of millions from productive em- 
 ployment and the distribution of same by men 
 — her advisers — who are not named and not 
 called upon to justify their judgment. 
 
 No doubt the institutions and objects named
 
 The Bussell Sage Fortune 101 
 
 will make good use of the bequests and to the 
 extent they do, the money may be productive of 
 social good in a finer sense than if left in com- 
 merce and industries. 
 
 The thought we have in mind here is the 
 chance the community runs when it permits and 
 even encourages elderly individuals to arbi- 
 trarily transfer their fortunes from invest- 
 ments — -productive employment — to a long- 
 list of objects, the needs of which cannot be 
 accurately ascertained by them. 
 
 The community may be immensely benefited 
 by the foresight, the imagination, the construc- 
 tive genius of the giver ; per contra it may be 
 economically injured by the folly, the egotism, 
 the ignorance of the giver. 
 ♦ ♦ ♦ 
 
 The following editorial from a leading New 
 York daily is a fair sample of the press com- 
 ments on the final distribution of the Sago 
 fortune : 
 
 It would be difficult to dispose of a great estate 
 more sagaciously and justly than Mrs. Russell Sage 
 has done by her will. She leaves some forty millions 
 for educational, philanthropic and charitable pur- 
 poses. Colleges, libraries, hospitals, the Metropolitan
 
 II 
 
 102 Property 
 
 ifuseum of Art and the American Museum of Natural 
 History, the Children's Aid Society, the Charity Or- 
 ganization Societ}^ the Infirmary for "Women and 
 Children, and many other institutions are splendidly 
 remembered. There are specific legacies to many or- 
 ganizations. To name only Mount Sinai Hospital, 
 Hampton Institute, the Salvation Army, the Working 
 Woman's Protective Union, the New York Institution 
 for the Deaf and Dumb, the Home for the Friendless, 
 is to illustrate faintly the scope of Mrs. Sage's bene- 
 factions. The most cynical social sorehead and 
 growler at philanthropy will be pleased by her re- 
 membrance of her old servants. 
 
 In the twelve years from the time of Mr. Sage's 
 death Mrs. Sage gave for public uses betw^een thirty- 
 five and forty millions. By will she has given away 
 forty millions more. The greater part of the fortune 
 accumulated hy Mr. Sage has been returned to the 
 puhlic. It is the fashion for light-brained, envious 
 folk, amateur socialists or budding Bolsheviki, to 
 abuse "wealth" and gnash tlieir teeth at "the rich." 
 I Yet how swiftly the great fortunes melt; in a genera- 
 tion or two they generally come hack to the public. 
 It took only twelve years to scatter most of Mr. 
 Sage's, or, rather, to invest it forever in trust for good 
 objects. As a rule the Americans who get notably 
 rich make the people their heir. 
 
 This sort of praise is both thoughtless and 
 mischievous. 
 
 Attention is called especially to the idea 
 conveyed in the lines italicised by the writer,
 
 The Russell Sage Fortune 103 
 
 the statement the fortune has at last ''been 
 returned to the 'public," as if in some manner 
 — by inference more or less reprehensible — 
 the public had been deprived of the fortune i 
 during Sage's lifetime. / 
 
 Almost precisely the reverse was true. 
 
 It was during the accumulation of the for- 
 tune that the public enjoyed full possession and 
 use, and if Russell Sage the day before his 
 death had burned every note, every bond, every 
 share of stocks, every account-book — in short 
 every piece of paper evidencing his legal title 
 to his fortune so that no one, not even the state, 
 could trace and draw out a dollar of his for- 
 tune, the public would have been far more 
 materially served than by the attempts made 
 to draw out from productive uses his millions 
 and devote them to educational, philanthropic, 
 and charitable uses. .// 
 
 The question of ultimate value to society 
 would depend upon the balance that would have 
 to be struck between the value of a fortune of 
 sixty or eighty millions continuing undisturbed 
 in industrial, commercial, banking, railroading, 
 and other productive pursuits, and the value of
 
 104 Property 
 
 the same fortune withdrawn and devoted to 
 educational, charitable, and philanthropic pur- 
 poses. 
 
 Such a balance can never be straek in figures. 
 The wise and far-seeing expenditure of a mil- 
 lion dollars in some commercially unproduc- 
 tive manner, such as the founding of a library, 
 a school, an art museum, a settlement house, 
 and so on, may be of incomparably greater 
 value spiritually, aesthetically, socially, and 
 ultimately economically, than leaving the mil- 
 lion in a steel plant or a railroad. Everything 
 depends upon the wisdom and, above all, the 
 fine imagination of the giver. 
 ♦ ♦ ♦ 
 
 The point here is that before the giving 
 ' begins the fortime is unquestionably in the pos- 
 session of the public, and not a dollar can be 
 given away except the dollar is first taken from 
 those using it productively. Whether the pub- 
 lic ever again gets the benefit of the dollar 
 depends upon the wisdom of the donor and the 
 social necessity of the object, philanthropic or 
 otherwise, to which the money is devoted.
 
 The Bussell Sage Fortune 105 
 
 Mrs. Sage was seventv-eiglit when lier hus- 
 band died. She was ninety when she died. 
 Generally speaking men and women between 
 eighty and ninety are not capable physically 
 or mentally of suddenly undertaking the giving 
 away of large amounts of money. 
 
 Even if they are mentally quite vigorous they 
 lack the phj^sical strength to make the proper 
 inquiries and investigations, and critically fol- 
 low results. 
 
 Therefore, generally speaking, laws and insti- 
 tutions w^hicli give the extremely aged such 
 powers call for critical comment to say the 
 least, and indiscriminate praise of such giving 
 as a " return to the public," is hased on a 
 fundamental misconception. 
 
 These conclusions are so diametrically op- 
 posed to popular impression they will bear 
 restating. 
 
 ♦♦♦ *:♦ ♦;♦ 
 
 So long as a man is industriously engaged 
 in accumulating his fortune by fair and honor- 
 able means the community is a gainer, because 
 by his productive efforts he is steadily adding 
 to the sum total of actual wealth, while at the
 
 /I 
 
 106 Property 
 
 same time lie is increasing his nominal wealth 
 — i. e., his legal right to withdraiv and divert 
 some to other uses when he pleases. 
 
 ♦ ♦ ♦ 
 
 So long as the fortune of an individual is left 
 in a business, the economic effect from year to 
 year is precisely as if the community owned 
 the fortune. The community gets the services 
 of the individual at the cost of what he draws 
 out for living and other personal expenditures. 
 
 ♦ ♦ ♦ 
 
 / The danger of loss and interruption of pro- 
 ductive processes begins when the individual 
 begins to assert his ownership — when he 
 begins to withdraw his fortune and devote it to 
 other purposes. 
 
 ♦> ♦> 
 
 And the danger lies in the possibility he will 
 spend it or give it away in such a manner that 
 it will do the community less good than if the 
 money were left in the particular business or 
 industry. 
 
 ♦ ♦ ♦> 
 
 The general impression is that while a man 
 is accumulating he is engaged in a purely
 
 The Russell Sage Fortune 107 
 
 selfish pursuit, and that when he stops accumu- 
 lating and begins distributing he is engaged in 
 a noBly unselfish pursuit. 
 
 ♦ ♦ ♦ 
 
 In a profound sense the reverse is true. 
 
 The term ' ^ selfish ' ' is much abused. It 
 suffers a largely undeserved odium. 
 
 In a fine sense everything we do that is worth 
 doing is done from purely selfish motives. 
 
 AMien we start out to do things iwofessedly 
 for the benefit of others, we usually make a 
 failure unless at the same time we gratify our- 
 selves in a high degree, and the greater the 
 benefit toothers — the more seemingly unselfish 
 our conduct — the more noble the self-gratifica- 
 tion ; if not then there is something wrong with 
 our conduct. 
 
 The most unselfish act the mind of man could 
 devise would be at the same time the most 
 purely selfish. 
 
 *!* *I* *S* 
 
 The very foundation of faith, hope, charity, 
 love, is selfishness — interest in the gratifica- 
 tion, the development, the future, of one 's own 
 self.
 
 108 Property 
 
 The familiar test of everyday life is whether 
 a man in what he does thinks first of himself 
 and secondly or remotely of others ; or whether 
 he forgets himself in his efforts to do things 
 that benefit others. 
 
 Judged by these tests it is quite apparent a 
 man not only may, but usually does, forget 
 himself more when he is absorbed in his work 
 of building np a business or industry; often 
 forgets himself to the undermining of his 
 health and the sacrifice of his life. 
 
 "When it comes to giving away his money a 
 man rarely forgets himself. Few men sacrifice 
 either their lives or their comfort in the service 
 of charity or philanthropy. 
 
 So far from forgetting themselves men gen- 
 erally court publicity — love to see their names 
 in print and on buildings and monuments — the 
 really selfish — in an objectionable sense — 
 period of their lives begins. 
 
 "When a man begins to spend his fortune the 
 community is vitally interested in the question : 
 Is he spending or giving ivisely or foolishly,
 
 The Russell Sage Fortune 109 
 
 not from liis individual point of view, but from 
 the communitj^'s ? 
 
 •I* ♦> ♦> 
 
 The accumulation of wealth is one thing, its 
 consumption is quite diiferent. 
 
 As a factor in accumulating, a man may be 
 a most valuable citizen. As a director of dis- 
 tribution and consumption he maj^ be a costly 
 failure. 
 
 During the better part of his life he may be 
 productively engaged in adding to the total 
 wealth of the community, as well as in increas- 
 ing his o'WTi fortune. 
 
 During the latter portion of his life he may 
 be destructively engaged in withdrawing his 
 fortune from the productive wealth of the com- 
 munity and using that fortune in ways that do 
 the community little or no good. 
 
 On the other hand he may be constructively 
 engaged in performing an invaluable service 
 in devoting his fortune to works and objects of 
 practical, scientific, aesthetic value which would 
 not be created or encouraged were it not for 
 his taste, his foresight, his imagination, his
 
 110 Pro pert 7j 
 
 ambition to do something of great and lasting 
 
 good. 
 
 ♦ ♦ ♦ 
 
 The value of the rich man to the community 
 may be twofold; 
 
 1, As a producer and an accumulator. 
 
 2. As a distributor. 
 
 ^ As a producer he is so valuable an economic 
 factor that every community that has attained 
 any degree of advancement has found it a 
 good, practical, business proposition to permit 
 men to retain for themselves large control over 
 what they produce as an incentive to work 
 harder. 
 
 A man may call the wealth he is producing 
 ''his own." The community instinctively 
 knows that both he and his wealth belong to 
 ji the community. 
 
 ♦ ♦ ♦ 
 
 As a distributor of his wealth the rich man 
 may prove of even greater value to the com- 
 munity than as a producer. 
 
 As a producer he may be simply one of 
 tliousands equally industrious and equally 
 efficient.
 
 Tlie Fiissell Sage Fortune ill 
 
 As a distributor he may display both genius 
 and imagination. 
 
 He may do things for the public that the pub- 
 lic would not do for itself for generations. 
 
 He may endow educational institutions, 
 establish scientific research bodies, build art 
 galleries, museums, libraries; he may support 
 orchestras, theaters, enrich hospitals — all with 
 the same executive ability that marked the 
 accumulation of his wealth. 
 
 And all these things he may do long before 
 any city or state would do them, and do them 
 incomparably more brilliantly and efficiently. 
 
 ♦ ♦> ♦ 
 
 In the matter of investment and reinvestment 
 the individual performs an economic service 
 that cannot be done as well by public bodies, 
 chiefly for the reason the individual delights in 
 taking rishs no public body is permitted to take. 
 
 ♦ ♦ ♦ 
 
 The speculative element is strong in man. 
 The sure thing does not appeal to the man of 
 imagination. The love of danger, of risk, is 
 deeply implanted in human nature. 
 
 Investing one's money in safe ** gilt-edged '*
 
 il2 Property 
 
 bonds is a cold-blooded proposition that arouses 
 no large degree of enthusiasm. Accumulating 
 wealth in that fashion is a deadly proposition ; 
 it withers the soul. The man who does it is a 
 valuable economic factor, but he is like a timid 
 banker who loans only on gilt-edged collateral 
 — of no use when it comes to financing some 
 business or enterprise the outcome of which is 
 doubtful, but which, if successful, will be of 
 great benefit to the community. The great 
 banker takes chances on the personality of his 
 borrower, on the human equation. 
 
 The great rich man in reinvesting his money 
 instinctively loves to take chances not only on 
 / men but on the future of the country; he takes 
 long chances in the construction of railways 
 into uninhabited territory because he believes 
 the people v/ill follow and sojne day the roads 
 will pay; and if he never gets his money back 
 he will have had the satisfaction of attempting 
 a big thing for the country. 
 
 lie builds waterworks, gasworks, electric- 
 light and power plants, street-car lines, long 
 before the to^\^ls would build them. He puts 
 his money into them freely, recklessly. In
 
 The Biissell Sage Fortune 113 
 
 endeavoring to get his money out, to make a 
 profit, the companies he organizes may do 
 things that exasperate the public, but it must 
 never be forgotten that nearly all of these pub- 
 lic works are started by men who would have 
 accumulated wealth faster by investing in surer 
 things ! 
 
 Because here and there unprincipled men 
 make millions out of public enterprises by 
 methods that are corrupt and criminal does not 
 alter the fact that individual initiative is back 
 of practically every great work, big and little. 
 
 Individual initiative built the Suez Canal; 
 individual initiative started the Panama Canal. 
 
 Into these and other public enterprises rich 
 men and poor men pour their savings like 
 water — why ? 
 
 Because the investments are safe ? Not at 
 all. Rather because they are unsafe, because 
 there is a vague promise of large profits in 
 return for the great risks. 
 
 Appeal to the rich man — to any man, for 
 that matter — through his imagination and he 
 is the most gullible person on earth. 
 
 Whether it is in founding an orchestra, erect-
 
 114 Property 
 
 ing a library, establishing an art museum, or 
 building a railroad, the enthusiasm that enables 
 him to carry the work to completion depends 
 upon the streng-th of the appeal to his imagi- 
 nation. 
 
 Without knowing it many of our rich men 
 after working hard for years to accumulate 
 their wealth turn poets and dreamers in spend- 
 ing it, and because they are poets and dreamers 
 they inspire others, even carry the entire pub- 
 lic with them, often to the attempting of some- 
 thing beyond the strength of both themselves 
 and the public. Just as De Lesseps, the poet 
 and dreamer, rather than De Lesseps, the 
 engineer, carried the French public off its feet 
 in the disastrous attempt to build the Panama 
 Canal. 
 
 A rich man who has gained his wealth by 
 corruption and who is unscrupulous in his 
 methods may also be a poet and a dreamer in 
 his enterprises; he may spend his wealth in 
 ways that almost make the public forget and 
 forgive the manner of its accumulation. 
 
 The facts and arguments, pro and con, con- 
 tained in this chapter indicate one conclusion
 
 The Russell Sage Fortune 115 
 
 which should be more clearly outlined, and that 
 is; 
 
 It is the spending of a fortune that calls for \ 
 supervision. 
 
 A fortune is accumulated by investing and 
 reinvesting, by keeping it at all times produc- 
 tively employed in the hands of others. The 
 man who ' ' owns ' ' the fortune may confine his 
 activities to a small desk in a small office. As 
 the years go by the pieces of paper in his 
 safety-vault box increase in number. As a mat- 
 ter of fact he does not control or in any way 
 attempt to interfere with the way the proper- 
 ties represented by those pieces of paper are 
 used, the men running the properties probably 
 do not know of his existence. 
 
 So long as he lives the life of a careful and 
 shrewd investor the community is beyond ques- 
 tion a gainer by his judgment. 
 
 But when at seventy or eighty, or by will, he 
 takes it into his head to realize on his pieces of ! 
 paper and spend his fortune, the community j 
 should become immediately and vitally inter- 
 ested. 
 
 And possibly this interest should extend to
 
 116 Property 
 
 some sort of supervision of the transfer of 
 millions from unquestionably productive uses 
 to uses that may be either far more or far less 
 productive. 
 
 ' In other words should an old man be per- 
 mitted to spend '' his " fortune capriciously, or 
 take it to a foreign country — in short to do 
 '' as he pleases " with it I 
 
 The fortune while nominally and legally 
 ** his "is so fundamentally the property of the 
 community where it is productively employed 
 that the ' ' right ' ' of the individual to do what 
 he wills with it, regardless of consequences, is 
 a " right " that calls for consideration and pos- 
 sibly some curtailment of a supervisory char- 
 actor — curtailment that will permit a wide 
 play to the individual imagination, insight, and 
 foresight, but at the same time secure the com- 
 munity against the waste that so often attends 
 mere giving — indiscriminate giving. 
 
 Perhaps the supervision cannot be exercised 
 without depriving the community of precisely 
 those benefits that result from the individual's 
 impulsive and arbitrary indulgence of his 
 dreams, his aspirations, his beliefs, and in the
 
 Tlie Russell Sage Fortune 117 
 
 long run it may be better for the community to 
 go along as it does and take the chance referred 
 to, but the subject of supervision is suggested 
 — not advocated — because it must occur to 
 every man who gives the matter serious 
 thousrht.
 
 VI 
 
 THE MARSHALL FIELD FORTUIvrE 
 
 The late Marshall Field of Chicago started 
 life in a New England town "with nothing. 
 
 He became the greatest dry-goods merchant 
 the world has known, and died leaving a for- 
 tune officially inventoried as follows: 
 
 Personal property $58,473,292.55 
 
 Real estate 24,985,739.83 
 
 Total $83,459,032.38 
 
 The real estate consisted of: 
 
 His home on Prairie Avenue in the city of 
 Chicago, occupying a frontage of 163 feet and 
 improved with a three-story dwelling-house, so 
 quiet and modest in appearance the entire place 
 is hardly distinguishable from that of hun- 
 dreds of men of moderate means. 
 
 Lots and parcels of land in many different 
 states, some improved, others unimproved; 
 also some farm lands, and some contracts for 
 the purchase of real estate. 
 
 With the exception of his home all these 
 
 118
 
 Tli6 Marshall Field Fortune 119 
 
 items of real estate, amounting to twenty-five 
 millions of dollars, were investments for profit, 
 investments made with the expectation that 
 advancing values in the different neighborhoods 
 would yield him a profit, even though he did 
 nothing but hold the pieces and pay taxes on 
 them. 
 
 This sort of investment is fundamentally 
 different from investments in productive enter- 
 prises, and stress is here laid upon the real 
 estate part of the Field fortune because for- 
 tunes in real estate will be discussed farther on. 
 
 For the moment we are interested in the per- 
 sonal property he accumulated. 
 
 The official inventory showed only $58,473,- 
 292.55, but in this inventory all stocks and 
 bonds were taken at par — at face value. 
 
 Stocks that had a market — an actual — value 
 of $200 or $300 per share were inventoried at 
 their par value of $100. ^ 
 
 * It must be understood there was nothing illegal or im- 
 proper in so doing. In making an inventory it is quite 
 correct to list stocks, bonds, notes, etc., and all pieces of 
 property by their description. The official appraisers take 
 the inventory and appraise the actual value regardless of 
 the par or nominal value.
 
 / 
 
 120 Property 
 
 For instance he held 34,000 shares of the 
 stock of Marshall Field & Co. — the greatest 
 mercantile firm in the world — and these were 
 taken in the inventory at their par, $100 per 
 share, a nominal total for his controlling inter- 
 est in that great business, of only $3,400,000. 
 
 No one can estimate the actual value of his 
 interest in that very profitable business, but it 
 would be nearer $50,000,000 than $3,000,000.^ 
 His fortune was probably not less than $150,- 
 000,000. 
 
 ♦ ♦ ♦ 
 
 In addition to his interest in Marshall Field 
 & Co., Mr. Field left the following items : 
 
 Money in box, $4,134.90. 
 
 Special attention is directed to this item for 
 — aside from his home and personal belong- 
 ings — it represents practically his entire 
 ivealtJi in possession. ^ 
 
 He had less than five thousand dollars in cash 
 
 ' The par value of Mr. Carnegie's stock in the Carnegie 
 Steel Company was $100 per share. He received for it 
 *1,500 per share. 
 
 ' Even then only in so far as the money was in gold — 
 probably not a dollar. For paper money is simply 
 promises to pay, notes.
 
 The Marshall Field Fortune 121 
 
 idle. And the astonishing thing is that he had 
 so much. He was not a man to keep a penny 
 idle. Sudden siclmess and death (from pneu- 
 monia, away from home) probably caught him 
 before this cash could be deposited in bank or 
 invested. 
 
 Money on deposit in various banks — $4,295,- 
 378.76. 
 
 This represents the current accumulation of 
 profits and interest from all his investments. 
 Naturally as money poured in from his busi- 
 ness and from various investments he would 
 deposit it in different banks, and invest it as 
 fast as he could in many different ways — as 
 sho^^^l by the inventory of his estate. 
 
 Money in bank is not idle. As already noted 
 a bank is but a mechanism for keeping the 
 monej'' of individuals invested productively. It 
 takes your money and mine, keeps a small per- 
 centage on hand to honor our checks, and loans 
 the balance to mechanics, farmers, manufac- 
 turers, business men — to anybody who needs 
 money and whose credit or security is good. 
 
 Deposited in bank Marshall Field's $4,000,- 
 000 were placed where the community could use
 
 122 Property 
 
 them by paying to the banks the current rate 
 of interest, which interest the banks would 
 divide with Marshall Field by allowing him 
 probably two per cent on his daily balance. 
 
 Inasmuch as he could get only two per cent 
 on his daily bank balances the incentive was 
 always strong to get the money out of the 
 banks and into stocks and bonds or other 
 investments that would jdeld more, and that is 
 what he did. 
 
 He not only ran — personally supervised and 
 huilt up — his great mercantile business until 
 it was literally one of the commercial wonders 
 of this great commercial country, but he also 
 exercised his keen judgment in investing his 
 profits. 
 
 He would pour all he could back into his own 
 business, then invest the surplus wherever it 
 seemed most needed. 
 
 ♦ ♦ ♦ 
 
 The official inventory showed the following 
 items : 
 
 Stocks of 23 railroads $8,99.3.600.00 
 
 Stocks in 5 street railroads 194,700.00 
 
 Stocks in 17 banks 781,760.00
 
 Tlie Marshall Field Fortune i^^ 
 
 Stocks in 27 industrial and mis- 
 cellaneous companies 7,001,950.00 
 
 Bonds of 30 railroads 5,659,500.00 
 
 Bonds of 9 industrial and mis- 
 cellaneous companies 1,903,500.00 
 
 Subscriptions to various enter- 
 prises 1,835,470.00 
 
 Notes of industrial companies 
 
 and others 2,207,971.26 
 
 Money loaned Marshall Field 
 
 & Co 8,486,607.23 
 
 It is the character of a man's investments, 
 not their amount, which determines his 
 economic value to the community. 
 
 Whether the market value of any particular 
 stock is above or below par does not alter the 
 fact that the investment was made for pro- 
 ductive purposes. 
 
 The market value — i. e. the price — of the 
 stock, on any given day is an index of the 
 opinion of the market regarding the produc- 
 tivity — the earning power — of the industry, 
 and that may be large one year and small the 
 next, or it may fail entirely, thereby discredit- 
 ing the judgment of the men who invested in it. 
 
 At the time of his death the great majority 
 of Mr. Field's stocks and bonds were above 
 par, and worth more than when he invested,
 
 l£4 Property 
 
 thereby demonstrating his economic value as a 
 factor in wisely distributing his (the com- 
 munity's) wealth where it was most needed 
 for productive purposes. 
 
 ♦ ♦ ♦ 
 
 The net result to the community of his life, 
 from a purely economic view, was: 
 
 1, The devotion of exceptional executive 
 genius to the development and organization of 
 a great mercantile business, which not only 
 served the public well, but also served as 
 a model for similar establishments the world 
 over. What he did for the country in 
 advancing the science — the art if you please 
 — of merchandising can hardly be overesti- 
 mated in dollars and cents. So perfect and 
 advanced in methods was his organization that 
 in effect it was akin to a revolutionizing 
 invention. 
 
 The great, the enterprising, the original 
 business man, manufacturer, lawyer, doctor, is 
 as much an inventor as the man who takes out 
 patents on his ideas. 
 
 In fact the successful man in any walk of 
 life must be an originator, an inventor, through-
 
 Til 6 Marshall Field Fortune 125 
 
 out his active career, and his success is meas- 
 ured by his originality, his daring, his inno- 
 vations. 
 
 2. In addition to his executive ability as a 
 great merchant the community had the benefit 
 of Mr. Field's keenness of judgment in invest- 
 ing his earnings. He not only invested his 
 money in railroads, banks, industries, etc., but 
 he gave of his time and energies; he served 
 as director with many companies, and his serv- 
 ice was never perfunctory. He was not a 
 ' ' straw director. ' ' 
 
 ♦ ♦ * 
 
 Now, what did all this cost the community 
 up to the time of his death ? 
 
 The comparatively small amount he spent on 
 himself. His home was very unpretentious, 
 and he lived so simply and inexpensively it was 
 a matter of comment by those who knew him 
 best. 
 
 Look at it this way, take every dollar he 
 spent on himself and for his family, double 
 that amount, would not the city of Chicago say 
 the total was a small amount to pay for the
 
 126 Property 
 
 development of the one mercantile enterprise, 
 Marshall Field & Co.T 
 
 Is it conceivable that at so low a cost any 
 commission, or any socialistic community could 
 develop so successful and economically valu- 
 able an establishment ? 
 
 The growth of this great business from small 
 beginnings is one proof of the economic value 
 of the liberal recognition of personal property 
 rights. 
 
 Without such recognition as an incentive no 
 man would work all his life accumulating. Why 
 should he accumulate if his control, his author- 
 ity over the accumulations are denied 1 His 
 efforts would naturally and inevitably cease at 
 the point where his control ceased. He would 
 consume w^hat he earned from year to year. 
 He would not deny himself a single luxury for 
 the sake of dying and leaving a fortune to the 
 state. 
 
 His fortune may go to the state if he leaves 
 no relatives and no will, but that possibility 
 does not trouble him for every man expects to 
 leave at least a will, and whether he does or 
 not he labors on that assumption.
 
 The Marshall Field Fortune 127 
 
 The item in the inventory : ' ' Syndicate sub- 
 scriptions — $1,835,470.00 " leads to an explana- 
 tion how men both rich and poor invest their 
 profits, incomes and savings in productive 
 enterprises. 
 
 Take an enterprise already estahlished which 
 needs money for further development. It may 
 be a railroad, a coal-mining company, a lumber 
 company, a packing-house, or any other in- 
 dustry. 
 
 An estimate is made of the amount of money 
 needed and the company proposes to issue 
 stocks, or bonds, or both for the amount. 
 
 On first impression the simplest and easiest 
 way would seem to be to offer the securities to 
 the public generally, but up to the present time 
 that has not been found the practical and 
 expeditious way in this country, for the reason 
 the public generally has no knowledge of the 
 particular industry and no means of forming 
 an estimate of the value of the securities 
 offered, and there would be few or no sub- 
 scribers. 
 
 Sometimes issues of bonds or new stock are 
 quickly subscribed by stockholders of the com-
 
 128 Property 
 
 pany because they know the earning power of 
 the company and have confidence in its future, 
 but the public can know very little about a new 
 enterprise. 
 
 Hence it is common practice for the men 
 engaged in an industry that needs more money, 
 or who are organizing a new enterprise, such 
 as a street railway, waterworks, electric-light 
 company, etc., etc., to formulate their plans and 
 lay them before bankers and other exj)erts. 
 
 If the bankers and experts are favorably 
 impressed with the plans, they organize a 
 syndicate to subscribe for all of the new securi- 
 ties, and each member of the syndicate, whether 
 a bank or an individual, signs for the amount 
 opposite his name — just as Mr. Field sub- 
 scribed for certain amounts in the syndicates 
 referred to. This insures the furnishing of the 
 money. 
 
 After the sjmdicate subscription is filled the 
 next step is to offer the securities to the public. 
 If the public, as often happens, subscribes for 
 the entire issue then the syndicate members 
 get no securities at all on their syndicate 
 subscriptions.
 
 The Marshall Field Fortune 129 
 
 But if the public, as also often happens, takes 
 only a part of the securities, then the unsold 
 balance must be taken by the s^nidicate mem- 
 bers, distributed in proportion to their sub- 
 scriptions. 
 
 A syndicate agreement is, therefore, a guar- 
 anty to the new — or old — enterprise that the 
 money it needs will surely be forthcoming at a 
 given date whether or not the public takes any 
 stock or bonds. 
 
 This guaranty is of value because it enables 
 the men engaged in the industry to go ahead 
 with their plans without waiting the slow and 
 uncertain outcome of a popular subscription. 
 
 The syndicate has — or rather should have — 
 another value; it signifies to the public that 
 experts have looked into the enterprise and 
 reported favorably, otherwise bankers and keen 
 business men would not take the risk of guar- 
 anteeing the new capital. 
 
 For this service — this insurance — the syn- 
 dicate usually receives a commission. If the 
 public takes cdl the new securities then the 
 members of the syndicate are relieved of their 
 guaranty, they get no stocks or bonds, but they
 
 ISO Property 
 
 get as compensation the commission agreed 
 upon. 
 
 The fact that many syndicate transactions 
 and commissions have been of a character to 
 call for condemnation, does not alter the truth 
 that generally speaking the syndicate method 
 of raising new capital is not only useful, but 
 seemingly necessary in many cases. 
 
 <3» <j» «j» 
 
 Another and very common way of securing 
 new capital is for the individual or corporation 
 to sell its bonds direct to one or more banks or 
 trust companies, which, in turn, sell them to 
 their depositors and customers. 
 
 Banks and trust companies do not buy bonds 
 with the expectation of holding them, but with 
 the expectation of selling them at a profit, so 
 as to be able to repeat the transaction. 
 
 It is plain that it makes little difference to 
 either the company issuing the bonds or to the 
 public that ultimately gets them for invest- 
 ment, whether a syndicate subscribes for them 
 or a bank buys them. As a matter of fair cal- 
 culation the profit of the bank that buys out- 
 right ought to be a little higher than that of the
 
 The Marshall Field Fortune 1^1 
 
 sjmdicate which only guarantees, and in the 
 end may not be called upon to take any. 
 
 The syndicate method of securing capital 
 ought to be less expensive. 
 ♦ ♦•♦ »> 
 
 From the foregoing explanation it is plain 
 that the signing of a sj-ndicate subscription 
 involves no immediate investment or expendi- 
 ture. 
 
 No member of a syndicate invests or puts up 
 a dollar until called upon by the sj^dicate man- 
 agers, and if the public takes the entire issue 
 of securities the syndicate members receive 
 their commission and are released without the 
 investment of a penny. 
 
 Herein is where men of wealth — like banks 
 — perform a valuable economic service. 
 
 Their credit is such that their r.iere agree- 
 ment to do certain things is accepted and serves 
 the same purpose as if they actually deposited 
 gold with their subscriptions. 
 
 Suppose it were necessary for S3mdicate sub- 
 scribers to put up in gold the full amounts of 
 their subscriptions, that would mean the with- 
 dravjvn,g of so much money from productive
 
 1S2 Propertji 
 
 uses, and holding it idle in vaults until the 
 transaction was brought to a conclusion. It 
 would make the raising of new capital more 
 difficult and therefore more expensive. The 
 result would be a checking of industrial and 
 commercial development, a positive burden on 
 the prosperity of the country. 
 
 ♦ * ♦ 
 
 The fact that there are banks, trust compa- 
 nies, insurance companies, etc., and also large 
 numbers of individuals whose credit is such 
 that their mere agreement takes the place and 
 for a time performs the work of actual wealth, 
 means much in the economic development of 
 the community. It enables villages, cities, 
 states, as well as individuals and corporations 
 to go ahead immediately with i)ublic works and 
 improvements as if the actual gold dollars 
 were tied up idle in the treasury, because every- 
 body knows that from time to time as th(-- 
 money is needed it will be forthcoming, and 
 until it is needed it will remain productively 
 employed in other ways.
 
 The Marshall Field Fortune 133 
 
 The day laborer who has a hundred dollars 
 in a bank is an essential factor in tliis mighty 
 credit machinery. 
 
 He, too, participates in s^Tidicates. He does 
 not sign the agreement liimself, but it is his 
 deposit together with others that enables the 
 bank to agree to take bonds. 
 
 A bank and a rich man perform very much 
 the same economic functions. Both are rich, 
 both have credit. 
 
 The rich man accumulates his wealth by 
 individual savings and investments. 
 
 The resources of the bank are made up 
 principally of deposits, secondly of profits. 
 
 Through the operation of the bank wherein 
 he has his small deposit the poor man is a 
 capitalist, a bondholder, a sjmdicate member, 
 and so on. He is doing his share toward the 
 development of the country, he is keeping his 
 surplus earnings productively employed. 
 ♦ ♦ ♦ 
 
 The law governing postal savings — deposits 
 in post offices — wisely provides that the post 
 offices shall deposit the money in banks. "\Miy? 
 Because while it is easy enough for post-
 
 134 Property 
 
 masters to receive money it is not practicable 
 for them to loan and invest it. 
 
 The ivise loaning and investment of money 
 requires expert knowledge and judgment of the 
 highest character, therefore the government re- 
 ceives the money of the people but iimnediately 
 deposits it in banks so that it may be loaned, 
 invested, and kept productively employed. 
 ♦ <> *j 
 
 On first impression it may not be entirely 
 clear to the casual reader that when a man or 
 a bank buys stocks, bonds, notes, mortgages, 
 that have been first purchased by others the 
 money is invested productively. 
 
 True the farmer who gave the note or the 
 company that issued the bonds gets no more 
 money as note and bonds are resold and change 
 ow^nership from time to time; the economic 
 effect of the change is that one owner of the 
 securities takes the place of another owner, and 
 the money the seller had invested is released 
 for other purposes; he may invest it produc- 
 tively or waste it, that is a new transaction, the 
 investment in the old remains the same, it is 
 represented by the note or bond, or share of
 
 The Marshall Field Fortune 135 
 
 stock and whoever oa\tis that is the actual 
 investor in that particular enterprise. 
 »^ <{> <^ 
 
 All his life Marshall Field did three things : 
 
 He worked very hard. 
 He spent very little on himself. 
 He invested his savings and income as rap- 
 idly as possible. 
 
 He was a very efficient human machine for 
 the production of wealth. As such he was an 
 exceedingly valuable member of society, so 
 valuable that any socialistic community could 
 afford to pay him for his services a salary 
 much larger than the amount he annually spent 
 on himself. 
 
 But it will be urged that, conceding his 
 genius as a merchant and his value to society 
 as an organizer, the fortune he made was out 
 of all proportion to his worth, that a fortune 
 of one hundred and fifty millions is so grossly 
 excessive as to demonstrate on its face that 
 something is w^rong with the machinery of 
 distribution.
 
 136 Property 
 
 All of which brings us back to where we 
 started, namely an analysis of this fortune to 
 ascertain just how much of it was really his 
 when he died, for it must not be overlooked 
 that when we speak of the death of a rich man 
 we always say, " He left so many millions." 
 
 *'Left" them where? At the edge of the 
 grave ? In his pocket-book ? 
 
 Why, no. 
 
 He left his millions exactly v/here they had 
 been for months or years, in the hands of 
 others who are using them productively. 
 
 His ownership was the legal right to draw 
 from his business and investments (a) each 
 year his entire income and at any time, (b) the 
 entire principal, and (theoretically) do with 
 both income and principal as he pleased. 
 
 "When he died he left ten millions to the Field 
 Museum in Chicago and a f ev/ other compara- 
 tively small bequests. Almost his entire for- 
 tune he tied up in trust for many years for his 
 grandsons. In short he did all he could legally 
 to continue his fortune in the same productive 
 enterprises. He did not propose to permit his 
 descendants, relatives, or anyone else to with-
 
 Tlie Marshall Field Fortune 137 
 
 draw liis fortune; he did not want them to bo 
 in a position where they could exercise any 
 actual oivnership, only legal rights over his 
 investments. 
 
 The trust he created by will prevents his 
 grandsons from inheriting the property and 
 exercising any real control over the business 
 of Marshall Field & Co. until they are fifty 
 years of age. This successful attempt to " tie 
 up " property so shocked the legislature of the 
 state of Illinois, it immediately passed a law 
 limiting the power of an individual to create 
 by deed or will a trust for longer than the 
 limited period named in the statute. Such a 
 law may be sound, but not for the reasons com- 
 monly urged in support of it. A very good 
 argument could be made in favor of encourag- 
 ing the individual to *' tie up '' his fortune in 
 the productive industries in which it is em- 
 ployed, and curtail the power of his heirs to 
 withdraw it and spend it. 
 
 Press and public thoughtlessly applauded 
 the disposition of the Sage fortune — its with- 
 drawal from productive uses and devotion to 
 philanthropic; they equally thoughtlessly con-
 
 138 Property 
 
 denmed the Field will which kept the Field for- 
 tune productively employed. 
 
 As said in passing the creation of long-time 
 trusts is open to objections from an entirely 
 different angle, but that is a discussion outside 
 the scope of this book. 
 
 ♦ * ♦ 
 
 Socialists and communists take the legal 
 proposition that a man may do as he pleases 
 with his own — which proposition as a matter 
 of fact and law has its limitations- — and they 
 base their objections to private ownership of 
 capital upon the assumption that men habit- 
 ually exercise that supposed right and actually 
 withdraw and consume what the law says be- 
 longs to them. 
 
 If this were true the world would not be 
 where it is, but somewhere back in the Bronze 
 or Stone Age. If men from the very beginning 
 had not been in the habit of leaving most of 
 what they produce in their industries little 
 progress would have been made in wealth or 
 civilization, and the more a man produces, the 
 greater his genius for organization and produc- 
 tion, the more he invests and reinvests his
 
 The iMarshall Field Fortune 189 
 
 earnings — the smaller and smaller the per- 
 centage he spends on himself. 
 ♦ ♦ ♦ 
 
 It will be urged that, assuming most men do 
 leave their earnings in their business, and let 
 their wealth accumulate for the most part on 
 paper, drawing out and using very little, the 
 time will come when some son, or relative, ^Aill 
 see fit to exercise his legal rights and spend 
 his income, possibly his principal, so that after "Vi 
 all he proves to be the real owner, not the 
 public. J' 
 
 No — the conclusion does not follow. 
 
 If a man arbitrarily shuts down and wipes 
 out of existence the business he owns, destroy- 
 ing everything of value connected with it, he 
 would thereby demonstrate his real ownership, 
 but in so demonstrating his legal right to do as 
 he pleased with his own, it is obvious, he would 
 ipso facto destroy the right itself, since the 
 legal right has no existence theoretically or 
 actually save in connection with the property 
 being destroyed, as that disappears the right 
 disappears. 
 
 Furthermore, long before he would succeed
 
 140 Property 
 
 in fully demonstrating liis absolute ow^iership 
 the public vrould intervene either on its own 
 motion or at the request of relatives and 
 appoint guardians or conservators to preserve 
 the property. 
 
 Only an insane man would set out to demon- 
 strate his absolute ownership of property by 
 destroying it. 
 
 ♦ ♦ ♦ 
 
 Ordinarily the demonstration takes one of 
 two forms — sometimes both: 
 
 1. The improvident son or relative begins to 
 Y/ithdraw the income and principal and use it 
 in luxurious living, spending recklessly and 
 extravagantly for his o%vn enjojTnent. The 
 industry of business may be cramped, even 
 crippled as capital is withdrawn, it may even 
 fail, but ordinarily it passes into the hands of 
 others and continues. 
 
 This form of assertion of private ownership 
 is the most obnoxious ; it is, as already noted, 
 the form that does so much to bring private 
 property into disrepute ; it furnishes the social- 
 ist and the communist with striking illustra- 
 tions for arguments that are fundamentally
 
 The Marshall Field Fortune 1^1 
 
 unsound. And it is this form of assertion of 
 private ownership that will be curbed some day 
 without disturbing rights that are incentives to 
 productive effort and beneficial to the com- 
 munity' . 
 
 2. For the most part private ownership of 
 capital is asserted by withdrawing income and 
 principal from one enterprise and investing in 
 another. For instance instead of leaving all 
 its earnings in the dry-goods business, Mr. 
 Field would take a large share of his income 
 from that source and invest it in other enter- 
 prises ; if he bought railroad stocks or bonds it 
 meant that his money was used to develop 
 facilities for transportation, etc. 
 ♦ 4» *> 
 
 But suppose there comes a time when some- 
 one of less sagacity withdraws income and 
 principal from productive enterprises and in- 
 vests in unproductive — the community is a 
 loser. 
 
 " The community would not have done that 
 if it had been really the owner," someone 
 urges. 
 
 Possibly — yet the community is not a loser
 
 142 Property 
 
 in the sense it is when the money is wasted in 
 riotons living. An entire fortune may be lost 
 in unproductive enterprises, in sinking oil wells 
 that never flow, in opening mines that contain 
 no gold, in starting factories that do not pay; 
 the individual may transfer his hundred mil- 
 lions to others in these different ways, and the 
 community may be the loser to the extent that 
 labor and capital are consumed in ways that 
 ^ield no return ; but it may be a gainer to the 
 extent the vast expenditure teaches certain les- 
 sons, demonstrates the uselessness of doing 
 certain things in certain places or in certain 
 ways. It goes without saying that every pro- 
 gressive community — whether socialistic or 
 individualistic — must spend vast sums in ex- 
 periments that prove unproductive, in develop- 
 ing inventions and ideas that turn out worth- 
 less, in searching for iron, oil, coal, in places 
 where there is none; in starting factories in 
 localities where they will not succeed. Not to 
 do all these things would imply the prescience 
 of the Almighty. 
 
 As it is, this work is largely done by men 
 whose incomes are so large they are willing to
 
 The Marshall Field Fortune 14)3 
 
 take chances. The socialistic commimity would 
 have to make the same experiments, take at 
 least some of the same chances, or stand still. 
 The individual is a much better and more reck- 
 less gambler with Fortune than any socialistic 
 community would be, hence the unparalleled 
 exploitation of, the earth, and production of 
 wealth, under private ownership. 
 
 The fortune a man accumulates by leaving 
 all his earnings in enterprises that are highly 
 productive, may be dissipated in a generation 
 by attempts — and wise attempts at that — to 
 open up new oil fields, new enterprises, that in 
 the end prove unproductive. 
 
 It is not infrequently the case that these new 
 investments prove unproductive only long 
 enough to bankrupt the man who starts them, 
 but after his millions are all in and lost to him, 
 tlie enterprises in the hands of others and with 
 additional capital prove highly productive. 
 Many a railroad in this country has lost every 
 dollar its first stockholders put in, to make, 
 after foreclosure and reorganization, fortunes 
 for its second lot of owners.
 
 144 Property 
 
 The wealth of the United States is estimated 
 
 at one hundred and thirty billions of dollars, 
 
 most of which is *' private property." 
 
 I The annual increase is over two billions — 
 
 ■^ \ $2,000,000,000. That is our net annual income 
 
 \ — the sum total of the net incomes of all in- 
 
 \ dividuals. 
 
 That is the amount the nation is laying up 
 annually after all waste, all foolish and reck- 
 less consumption of wealth is taken care of. 
 It is derived from private enterprises — from 
 the farms, the mines, the factories, the rail- 
 roads, of the country ; nominally it is nearly all 
 privately owned, in reality it is as much 
 engaged in the service of the community as if 
 the legal title were in the community, and the 
 service is far more efficient, far more progres- 
 sive, far more venturesome — because the in- 
 centive to individual initiative and effort is 
 1 ' ? greater — than if all capital were actually con- 
 trolled by public employees. 
 \ In 1910 there were 210,262 manufacturing 
 
 \ establishments turning out over fourteen bil- 
 \ lions of dollars worth of products. 
 
 These establishments are privately owned,
 
 The Marshall Field Fortune 145 
 
 and theoretically the o\\Tiers have the legal 
 right to shut down every one and stop in a day 
 the production of the fourteen billions of goods, 
 but they never have done that and never will; 
 they never have exercised and never will exer- 
 cise their legal right ; if they attempted to the 
 community would instantly intervene and deny 
 the right, just as it now intervenes in coal 
 strikes and denies the right of coal companies 
 to do as they please, just as in the near future 
 the community will intervene in every threat- 
 ened strike and deny the right of both em- 
 ployers and employees to do as they please. 
 
 There are over six millions of farms in the 
 United States with a value — land and build- 
 ings — of over thirty-five billions of dollars. 
 
 All this is nominally owned by individuals, 
 and legally each man is commxOnly supposed to 
 have the right to destroy his buildings and let 
 his farm go to waste, but that is an idle asser- 
 tion of a *' right " that does not exist except in 
 the imagination. It is a ** right" to juggle 
 with in socialistic and communistic denuncia-
 
 146 Property 
 
 ^— ^^^"^^^^ ■■■ ■ I ■■ ^^»M— I^IM 1 ^^-^^^—^—■— — ■1 ■■■III IM ■■■ I i* ■ III ■ 
 
 tion, but it is a ' * thing of straw ' ' easily bat- 
 tered to cliaff. 
 
 One generation of farmers succeeds another, 
 and each works, not to spend on itself, but to 
 accumulate for the succeeding. 
 
 Here and there a farmer, like a manufac- 
 turer, or a merchant, may assert his private 
 ownership, his ** right to do as he pleases with 
 his OAMi," and spend recklessly until penniless, 
 but these exceptions are so rare they are con- 
 spicuous and attract attention out of all pro- 
 portion to their numbers. 
 
 The overwhelming majority of farmers, like 
 men in all other walks of life, work for the 
 future, work for the generations to come, work, 
 in short, for the community far more untiringly 
 and unselfishly than they would if all their 
 lands and buildings were owned by the com- 
 \ munity and they were simply so many em- 
 ployees.
 
 VII 
 
 THE CARNEGIE FORTUNE 
 
 When Andrew Carnegie sold the interests he 
 controlled in the Carnegie Company to the • 
 U. S. Steel Corporation he received $303,000,- 
 000 in bonds. 
 
 Assuming the bonds were issued, as usual, in 
 amounts of $1,000, he received three hundred 
 and three thousand pieces of paper. 
 
 What actually happened at the moment of 
 transfer was that Mr. Carnegie retired from 
 active interest in the steel business and others 
 took his place — let us say he then and there 
 died to the steel business — that was all. 
 
 Not a dollar of actual Vv^ealth was disturbed. 
 Not a pound of metal was affected. / 
 
 Whether his successors have operated the 
 business as well and as productively as he did 
 is a practical but entirely different question. 
 
 We are here interested in the effect of the 
 sale upon the distribution of wealth. 
 
 Obviously the printing of the bonds created 
 no new tangible wealth. The actual wealth of 
 the Carnegie Company, its mines, its furnaces, 
 
 147
 
 148 Property 
 
 its mills, etc., were not affected by tlie bond 
 issue. 
 
 But, not long after the transaction things 
 began to happen that did and do affect the 
 community. 
 
 During his long connection with the Car- 
 negie Company, Mr. Carnegie devoted prac- 
 tically all his time and all his earnings and 
 profits to developing the industry. He was 
 literally a slave to the business. 
 
 So long as his profits and earnings were 
 reinvested in the industry, the cost to the com- 
 munity of his exceptional services and abilities 
 was simply the comparatively small amount he 
 spent each year upon himself and family. 
 
 To be sure his fortune was increasing rap- 
 idly ; that is the value of his stock in the com- 
 pany — represented by certificates, pieces of 
 paper — was increasing, but so long as his for- 
 tune remained invested in the business and so 
 long as he drew out only a small amount for 
 living expenses he was ricJi only in the sense 
 that he had the legal right to take his interest
 
 Tlie Carnegie Fortune 14-9 
 
 — i. e., a certain amount of actual wealth — out 
 of the industry and do with it as he pleased.^ 
 
 If, instead of selling out, Mr. Carnegie had 
 retired in favor of a son, leaving his interest in 
 the business, and the son had gone on devoting 
 all his energies to the industry, the net result 
 to the country would be first the services of 
 the father, then the services of the son, all at 
 the cost of what both drew out to spend on 
 themselves. 
 
 And this might go on from generation to gen- 
 eration until the family decided to ivithdraw its 
 investment, whereupon both the industry and 
 the coinmunity would be very materially 
 affected. 
 
 ♦ ♦ ♦ 
 
 One reason why so many English firms and 
 companies operate at a low cost and are on 
 such sound footing, is because the families who 
 
 ' This " as he pleased " is always with certain limitations. 
 As already noted the community at the request of rela- 
 tives, friends, or even on its own initiative is quick to inter- j 
 fere if a man shows a disposition recklessly to squander i 
 his fortune. The interference is always on the ground that ' 
 the man is not competent to manage " his own " affairs — a 
 very distinct assertion of the superior right of the com- 
 munity.
 
 150 Property 
 
 *' own" them work for them generation after 
 generation, drawing out only sufficient for 
 what an American would consider very meager 
 living expenses. 
 
 These families say they ** own" the indus- 
 tries. In reality the industries own them. 
 
 I have in mind one of the large establishments 
 in England that has been in one family many 
 generations. The present generation lives 
 more simply and feels poorer than the last be- 
 cause they pour more and more of their profits 
 into extensions and improvements and draw 
 out less and less. In short the nation is paying 
 this family less and less to manage this one 
 large enterprise. 
 
 ♦ ♦ * 
 
 Comparatively few American industries pass 
 through periods so short as ten or twenty years 
 without upheavals and disorganizations due to 
 unexpected and arbitrary withdrawals of 
 capital by either estates or men who ** retire " 
 and spend or invest their money elsewhere. 
 ♦> ♦ ♦ 
 
 The interest on Mr. Carnegie's $303,000,000 
 at 5 per cent amounts to $15,150,000 each year.
 
 The Carnegie Fortune 151 
 
 In addition to the interest the Steel Corpo- 
 ration is obliged by the terms of the bonds to 
 set aside a certain amount each year as a sink- 
 ing fund with which to pay the principal of the 
 bonds at maturity. 
 
 The total charge on the industry, therefore, 
 is the interest plus sinking fund which must be 
 paid out of earnings on account of Mr. Car- 
 negie's withdrawal before any money is devoted 
 
 to extensions and improvements.^ 
 ♦ ♦ ♦ 
 
 From the foregoing it is clear that the 
 immediate effect upon the industry, and there- 
 
 ' Estimates of Mr. Carnegie's wealth put it at possibly 
 $500,000,000. When he retired in 1901 he sold his securi- 
 ties of the Carnegie Steel Company to the United States 
 Steel Corporation for $303,450,000 in bonds of that com- 
 pany. He was possessed of large interests in addition to 
 those bonds. When he started in 1901 to endow his great 
 benefactions he made inroads into his capital for several 
 years in gifts to libraries, for peace propaganda, and to 
 other philanthropic causes. 
 
 The fortune of $303,450,000 in 5 per cent bonds, if 
 allowed to increase by the accumulation of interest and 
 reinvestment since 1901, would amount to about a billion 
 dollars today, but his enormous benefactions prevented 
 this according to financial authorities; hov/ever, the iron- 
 master's ambition to die poor was not realized and, despite 
 the number of his philanthropies, it was believed that his 
 fortune was at his death as large as it ever was. — {News- 
 paper report.)
 
 152 Pro pert ij 
 
 fore upon the community, when an owner re- 
 tires and ivitJidraivs his investment for use 
 elsewhere is hurdensome. 
 
 There are cases where the individual owner, 
 because unprogressive, on account of age, or 
 for other reasons becomes an actual handicap 
 to the business, and greater progress can be 
 made if he is gotten rid of even at the incon- 
 venience of having him withdraw his invest- 
 ment. 
 
 While such instances are fairly common they 
 do not affect our argument, inasmuch as the 
 economic effect on the business of the with- 
 drawal of capital is the same irrespective of 
 the reason for the withdrawal. 
 ♦ ♦ * 
 
 Furthermore whether a man sells his inter- 
 est to his partners, his associates, or to 
 strangers, his capital is ivithdrawn just the 
 same, and the immediate economic effect is the 
 same, though the ultimate result may be to 
 interest '' fresh '* or '' young blood " — as the 
 phrase goes — so that the stimulus resulting 
 from the new energy and enthusiasm more than 
 offsets the temporary loss of capital, but,
 
 The Carnegie Fortune 153 
 
 again, this result due to the human equation 
 does not alter the economic effects of changes 
 in investment. 
 
 * * ♦ 
 
 When a man sells his interest in a business 
 he usually: 
 
 1. Invests his money in some other business 
 in wliich he takes a more or less active interest ; 
 or 
 
 2. Invests it in securities, such as mort- 
 gages, stocks, and bonds, in order to live out of 
 his income and invest the surplus in more 
 securities. 
 
 The economic effects upon the community 
 of these two courses are essentially different. 
 
 In the first case it is simply a transfer of 
 investment from one industry or set of indus- 
 tries to another, together with the investor's 
 active efforts. The loss in the one set of indus- 
 tries may be balanced by the gain in the new; 
 the community may not suffer any loss. 
 Though, as a rule, these more or less arbitrary, 
 often capricious changes, are attended with 
 actual loss to the community because the man's 
 lack of knowledge of the new enterprise may
 
 154 Property 
 
 lead to foolish expenditures of both time and 
 money, if not actual loss. 
 
 "When a man retires from active business and 
 devotes himself to the investment and reinvest- 
 ment of his fortune and income the community 
 loses the man's active services in the industry 
 he leaves, but it gains the benefit of his experi- 
 ence and judgment in the distribution of his 
 fortune, i. e., a certain amount of community 
 capital — in other directions. 
 ♦ ♦ ♦ 
 
 While all men make some foolish invest- 
 ments, and all the investments of some men 
 turn out badly, generally speaking there is no 
 better known way to invest and reinvest the 
 capital of the community than to leave it to 
 the best judgment of individuals who suffer the 
 loss in the first instance if the investments turn 
 out unsound. 
 
 For instance every advanced community 
 finds it wise to allow bankers pretty wide dis- 
 cretion in the making of loans and selecting 
 investments, and it must not be forgotten that 
 in doing this bankers are simply acting as the 
 economic agents of the community in trans-
 
 The Carnegie Fortune 155 
 
 f erring capital — i. e., wealth — from one indi- 
 vidual or enterprise to another for productive 
 purposes. 
 
 The law limits and supervises the discretion 
 of hankers to a certain extent because bankers 
 handle the money of depositors. 
 
 The community does not limit or supervise 
 to the same extent the individual's discretion 
 in investing ' ' his o\\ti ' ' money, because it is 
 supposed to be in an undefined sense **his 
 o^\Ti," but in the last analysis the individual 
 fortune is just as much community wealth. as 
 are the deposits in a bank, and the individual 
 in losing '*his o^^^l " fortune loses a part of 
 the community fortune just the same as does 
 the banker when he makes a losing investment. 
 
 So that in time communities may come to 
 exercise some supervision over the discretion 
 of the individual as well as the banker. 
 
 The disadvantage of state supervision is, of 
 course, the lessening of individual initiative. 
 
 The state has little imagination. 
 
 The state bank examiner must check up loans 
 in a heartless manner and reject relentlessly^ 
 While the individual usually derives his great-
 
 156 Property 
 
 est satisfaction from loans to penniless men 
 who *' make good." 
 
 ♦ * ♦ 
 
 Mr. Carnegie did not retire from the Car- 
 negie Company to engage actively in some 
 other business. 
 
 Neither did he retire for the purpose of in- 
 vesting his fortune and his income productively. 
 
 He retired with the publicly avowed intention 
 of spending his entire fortune in his lifetime. 
 *i* '%'> *i* 
 
 " The man ivho dies rich dies disgraced." 
 When Mr. Carnegie made public that statement 
 unthi^iking people applauded it as a great 
 sentiment. 
 
 In truth it is about as senseless and dema- 
 gogic a combination of seven words as ingenu- 
 ity could devise. 
 
 ♦♦♦ *J* ♦•* 
 
 A man does not choose the hour of his death. 
 
 Suppose Mr. Carnegie had died suddenly 
 while living modestly in Pittsburgh and while 
 he was devoting all his energies to the develop- 
 ment of the iron and steel industry, would lie 
 have '' died disgraced " simply because his
 
 The Carnegie Fortune 157 
 
 interest in the business was worth ten or 
 twenty or Miy millions ? 
 
 ♦!♦ »I* 
 
 Thomas Edison has amassed a fortune from 
 his inventions and by his capacity for work. 
 What he is ''worth" he probably does not 
 know, or care, because he is absorbed in his 
 work and his great aim in life is to invent and 
 devise useful products and processes. 
 
 If he should die today his estate would prob- 
 ably show a fortune of several millions, but 
 would he ''die disgraced f " 
 
 On the contrary he would die one of the most 
 honored of men. 
 
 ♦ *!♦ ♦ 
 
 It is characteristic of American business men 
 to hury themselves in their industries and 
 enterprises, to work day and night to build up 
 and increase their business — not their for- 
 tunes. 
 
 The banker wants to make his bank the big- 
 gest in the city. The merchant wants to make 
 his shop the biggest in town. The manufac- 
 turer wishes to surpass all rivals. They accu- 
 mulate fortunes but they pour all their profits
 
 158 Property 
 
 into their business. Tliey even curtail their 
 household and living expenses. Many a mil- 
 lionaire complains bitterly if his wife buys a 
 new hat. Why? Because he wants to increase 
 his fortune ? 
 
 Not at all, but because he hates to take 
 money out of his business, because all his life 
 he has been pouring all his earnings, from his 
 first wages, into his business and he has formed 
 the habit of frugality, of saving in order to 
 grow. 
 
 •> <» ^ 
 
 Of all the rich men in the country compar- 
 atively few have sold out and retired. The 
 great majority are slaves to their business and 
 the fortunes of the great majority are engaged 
 productively in business. 
 
 When one dies the public, and often the 
 family, learn for the first time what he was 
 << worth." 
 
 Does a man ** die disgraced " because he did 
 not sell out, withdraw his fortune from pro- 
 ductive uses, and spend the balance of his life 
 in giving it away ?
 
 The Carnegie Fortune 159 
 
 AVhether a man dies disgraced depends upon 
 what lie has done in his lifetime, not upon the 
 moment of his death which ordinarily cannot 
 be foreseen. 
 
 If a man has accumulated his fortune fairly 
 and honorably, there is no disgrace in dying 
 before he spends it. 
 
 * ♦ ♦ 
 
 In fact we all know that men are most highly 
 esteemed while they are working day and night 
 in building up their businesses — i. e. accumu- 
 lating their fortunes. 
 
 They are looked upon with disfavor when 
 they ' ' retire ' ' and live lives of luxury, spend- 
 ing their fortunes. 
 
 ♦ ♦ 4» 
 
 "When Mr. Carnegie sold out and retired, his 
 action affected the industry and the community 
 in the following ways: 
 
 1. Loss of his personal service in the indus- 
 try. 
 
 2. Gradual withdrawal of his fortune from 
 the industry.
 
 160 Property 
 
 These disadvantages are real. Tliey are 
 equally real in the case of every active man 
 Vv^ho retires and devotes his time and fortune 
 to philanthropic or similar purposes. 
 
 On the other hand Mr. Carnegie promised 
 the community the following advantages as the 
 result of his retirement and giving : 
 
 1. The devotion of his time and ability to the 
 selection of ivorthy objects for which to 
 spend his fortune. 
 
 2. The systematic expenditure of his fortune 
 for the objects chosen. 
 
 ♦ <» 4» 
 
 As regards the first promised advantage 
 there is obviously the important question 
 whether Mr. Carnegie made as sound and keen 
 a philanthropist as he was a steel man ; in short 
 whether the expenditure of his fortune was as 
 wise and beneficial as was its investment in the 
 iron and steel industry. 
 
 That is alivays the big economic question 
 when a rich man retires from the business he 
 knows and embarks upon a career of spending 
 for purposes about which he knows little or 
 nothing.
 
 ( The Carnegie Fortune 161 
 
 As regards the second advantage he devoted 
 a large part of his fortune in three ways; 
 (a) the building of public libraries; (b) certain 
 educational purposes; (c) the promotion of 
 peace by conferences, international tribunals, 
 etc. "What he did in these directions cost him 
 over two hundred millions of dollars. 
 
 PRTlSrCIPAL BENEFACTIONS 
 
 Carnegie Corporation (education) .$125,000,000 
 
 Libraries (3,000) 65,000,000 
 
 Carnegie Institute, Pittsburgh. . . . 25,000,000 
 Carnegie foundation for advance- 
 ment of teaching 15,000,000 
 
 Carnegie Research Institute, Wash- 
 ington 10,000,000 
 
 Carnegie peace endowment 10,000,000 
 
 Carnegie educational fund, Scot- 
 land 10,000,000 
 
 Carnegie hero fund 5,000,000 
 
 Employees' pension and relief fund 4,000,000 
 
 Carnegie Music Hall, New York. . . 2,000,000 
 
 Allied engineering societies 2,000,000 
 
 All are in a high degree ivorthy objects. 
 
 We say "cost him" two hundred millions. 
 What we should say is, cost the community, for 
 while Mr. Carnegie pays out what is legally his 
 own, he is actually taking from the steel indus- 
 try that much money and spending it on the
 
 162 Property 
 
 projects named. It is very much as if the 
 government levied a special tax upon the steel 
 industry to do those things. 
 ♦ ♦ ♦ 
 
 It follows, therefore, that the rich man who 
 is actively and honorably engaged in building 
 up his business runs no risk of "dying dis- 
 graced " if he dies in the midst of his business 
 activity, no matter what his fortune may prove 
 to be. 
 
 But he does rnn the risk of *' dying dis- 
 graced " through follies or mistakes of judg- 
 ment, if he retires from active work and de- 
 votes his life to spending his fortune on him- 
 self, or in giving it away. 
 
 Both are primarily selfish objects. 
 
 Carefully analyzed Mr. Carnegie 's motive in 
 giving his fortune for public libraries was as 
 selfish as that of the rich man who squanders 
 his in riotous living. 
 
 It was Mr. Carnegie's pleasure to give in the 
 ways he did. 
 
 It is another rich man's pleasure to spend on 
 race horses, yachts, etc., etc. 
 
 We are not comparing the two objects, for
 
 The C arnegie Fortune 163 
 
 the objects of the latter are frivolous and per- 
 haps beneath contempt while the objects of the 
 former are beneficial and praiseworthy, but the 
 moving spirit is fundamentally the same in 
 both men — personal gratification. 
 
 Both men may have made any number of 
 sacrifices in accumulating their fortunes; 
 neither makes any sacrifices in spending. 
 
 Mr. Carnegie's taste ran to public works 
 such as libraries and educational foundations. 
 
 The other man's taste runs to fast horses 
 and yachts. 
 
 Each spends his hundred millions in the 
 manner that gives him the greatest amount of 
 pleasure. 
 
 ♦ ♦ ♦ 
 
 Mr. Rockefeller's greatest dissipation is a 
 game of golf. He shuns publicity as much as 
 Mr. Carnegie courted it. He, too, is giving 
 away hundreds of millions, but as quietly as 
 possible and in a very systematic way. That 
 is his greatest pleasure. 
 
 * ♦ ♦ 
 
 The public ^ is always impressed by the mil- 
 lions given by these very rich men, it overU)oks
 
 164 Property 
 
 the much larger sum total given by millions of 
 poorer and poor men. 
 
 Everybody gives something for some pur- 
 pose. 
 
 Whether the gift is large or small it is nec- 
 essarily a diversion of wealth. 
 
 That is the point, a diversion of ivealth. 
 
 "Whether it is the government collecting a 
 tax, or a poor man contributing a dime to char- 
 ity, fundamentally the economic proposition is 
 the same, it is a diversion of wealth from where 
 it is usefully employed to purposes that may 
 or may not be as valuable to the community. 
 
 That is always the question, whether the 
 objects for w^hich the government spends the 
 money it collects, and those for which Mr. Car- 
 negie and others spend the money they accu- 
 mulate are as valuahle to the community as are 
 the productive enterprises from which the 
 money is withdrawn. 
 
 ♦ ♦ ♦ 
 
 That question should be asked and answered 
 with regard to every object for which the gov- 
 ernment or the individual proposes to spend 
 money.
 
 The Carnegie Fortune 165 
 
 If asked it would be found, first of all, that 
 the government is the most reckless and waste- ,, 
 ful spender of money, that it spends its money // 
 "like a drunken sailor" in ways and on ob-'' 
 jects that will not stand investigation. 
 
 Secondly it would be found that many char- 
 itable, philanthropic, and other organizations 
 spend wastefully. 
 
 Thirdly it would be found that many indi- 
 viduals spend extravagantly and viciously. 
 
 But it would also be found that most indi- 
 viduals who give money for public or philan- 
 thropic purposes do so with greater foresight, 
 sounder judgment, and finer imagination than 
 any government, local or national. 
 
 Compare, for instance, the shrewd manner 
 in which Mr. Carnegie caused to be erected 
 library buildings all over the country, with the 
 log-rolling methods of Congress in building 
 post offices and other pulilic buildings, where 
 the expenditure of the piihlic money is the 
 prime object and the erection of a suitable 
 building at lowest possible cost is the last thing 
 thought of. 
 
 In the hands of the government and devoted
 
 166 Property 
 
 to the same purpose Mr. Carnegie's millions 
 would not have accomplished half the results. 
 
 Therefore, it follows, that if the country is 
 in need of public library buildings, the com- 
 munity has saved money — literally many mil- 
 lions — by having a Mr. Carnegie instead of 
 the government distribute the money. 
 
 But the iron and steel industry pays for the 
 libraries, not Mr. Carnegie.
 
 VIII 
 
 WEALTH IN POSSESSION 
 
 It has been clearly shown that private prop- 
 erty as we find it in all communities that have 
 passed the most primitive stage of develop- 
 ment embraces tivo entirely distinct kinds of 
 oivnersJiip. 
 
 1. Wealth in actual possession or enjoy- 
 ment. 
 
 2. Wealth not in actual possession or en- 
 joyment. 
 
 Wealth not in possession is represented by 
 pieces of paper of many and various forms, 
 which are legal evidences of property rights. 
 In highly organized communities, such as the 
 leading nations of today, these legal rights are 
 both numerous and complex. In fact the com- 
 mercial and industrial development of any 
 given nation is measured by — develops with 
 — the variety and complexity of legal titles 
 created and recognized. 
 
 The actual, the material wealth of a nation 
 increases comparatively slowly, but the paper, 
 the title wealth, may increase rapidly and in
 
 168 Property 
 
 times of inflation and extraordinary expansion 
 of credit it may increase by leaps and bounds, 
 to decrease equally rapidly in times of defla- 
 tion and panic. Against a certain industry one 
 set of men issues a million dollars in stocks and 
 bonds. The company is reorganized — legiti- 
 mately or speculatively — and another set of 
 men with greater vision, enthusiasm, or reck- 
 lessness, issues five millions in stocks and 
 bonds against precisely the same properties. 
 
 A farm is worth today fifty dollars an acre 
 and outstanding in the community are, say, two 
 pieces of paper, (a) title deed; (b) a mortgage 
 for a thousand dollars. 
 / Oil is found on the farm, a company is or- 
 ganized, and before any money to speak of is 
 spent in drilling wells, paper is issued against 
 the farm to the extent of hundreds of thou- 
 sands in stocks and bonds. Several com- 
 panies are frequently organized based on the 
 one piece of property : 
 
 1. An owning company that takes the title 
 deed and issues millions in stocks and bonds; 
 
 2. A leasing company that leases all or 
 parts of the property, and on the strength of
 
 Wealth in Possession 169 
 
 its lease issues millions in stocks and bonds; 
 
 3. A royalty company that actually oper- 
 ates and pays so much per barrel to the leasing 
 company, and this royalty company capitalizes 
 its rights in millions of stocks and bonds — 
 and so on. 
 
 All these issues and transactions may tnrn 
 out profitably if the farm turns out to be a rich 
 oil field; or they may prove valueless if the 
 field is unproductive. 
 
 Meanwhile the farm as a farm remains as 
 it was before — less some actual damage in 
 sinking wells. The immense superstructure of 
 paper wealth is based on beliefs and hopes, and 
 made possible only in communities with highly 
 developed financial and commercial organiza- 
 tions. 
 
 Whether or not the creation of paper wealth 
 should be restricted is a large practical ques- 
 tion that cannot be discussed here. 
 
 The point in our argument is that the stage 
 of commercial and industrial development of 
 every great modern nation, such as England, 
 or such as the United States, may be gauged 
 by the variety of paper wealth in use. Eng-
 
 170 Property 
 
 land's supremacy in foreign trade is largely 
 due to the fact that she makes better and more 
 abundant use of certain forms of international 
 paper-credit wealth than do the people of the 
 United States; she offers the people who deal 
 with her easier and cheaper facilities for the 
 paperizing of their resources than we oifer. 
 
 Crudely speaking we demand more nearly 
 the actual goods, while she accepts the various 
 forms of paper issued against the goods. 
 
 The distinguishing characteristic of title 
 wealth is — as we have clearly shown — that 
 it leaves the actual possession and control in 
 the hands of others. The legal owner may 
 never see, nor exercise, the slightest control 
 over the property he "owns." Those in pos- 
 session, the real workers, may never see nor 
 know the legal owner. 
 
 But aside from the pieces of paper a man 
 may own, he may also actually possess, or con- 
 trol to the exclusion of others two distinct 
 forms of wealth: 
 
 1. LAND 
 
 2. LUXURIES 
 
 A man's real wealth is measured by the
 
 WeaJtli in Possession 171 
 
 things — food, clothing, houses, land, etc. — 
 that he controls for hwiself to the exclusion of 
 others. 
 
 The only inequalities in the distribution of 
 wealth that are of any irritating significance 
 are those of enjoyment to the exclusion of 
 others. 
 
 That idea must be clearly comprehended. 
 
 If a multi-millionaire like Eussell Sage lives 
 as simply as a workingman, obviously he is not 
 a millionaire in the sense of a man like William 
 Waldorf Astor who buys estates in England 
 and spends enough money socially and politi- 
 cally to get himself created a peer. 
 
 Aesthetically and socially Astor may be a 
 useful factor, but economically Sage was in- 
 comparably more valuable. 
 ♦ ♦ ♦ 
 
 In land and luxuries there is a large control 
 to the exclusion of the masses, and it is this 
 exclusion that furnishes the real basis for 
 whatever discontent there is over the distribu- 
 tion of wealth. 
 
 The nominal basis is the statistical — that is 
 the enormous disparity there seems to be be-
 
 172 Property 
 
 tween the man who has only his wages or his 
 salary and the man who has a million or a 
 billion, but the man who has a good salary may 
 spend more on himself than the man who has 
 a million in stocks and bonds. 
 ♦ ♦ ♦ 
 
 We will proceed now to the consideration of 
 the two forms of wealth that men commonly 
 do control to the exclusion of others, and try 
 to see to what extent this control should be 
 limited. 
 
 This theoretically true proposition will clear 
 the way: 
 
 If all control of wealth to the exclusion of 
 others were abolished so that all individuals 
 were on a footing of substantial equality as 
 regards food, clothing, houses, surroundings, 
 advantages, pleasures, etc., no one would have 
 the slightest concern regarding the accumula- 
 tion and distribution of paper titles. A man 
 might have a million or a billion in stocks and 
 bonds, but so far as any material or other ad- 
 vantage to him or his children over the rest of 
 the community is concerned, he would have 
 none.
 
 Wealth in Possession 173 
 
 The trouble starts when a man begins to 
 turn his paper wealth into forms of property 
 and pleasures that others cannot have or en- 
 joy — concrete inequalities begin to appear.
 
 IX 
 
 LAND 
 
 Private property in land is an incentive and, 
 like private property in moveables, its only 
 justification is that it is an incentive to pro- 
 duction and progress. 
 
 In so far as it ceases to be an incentive to 
 precisely that extent does it cease to be justi- 
 fiable. 
 
 The average man — in fact nearly every 
 writer on the subject — is quick to admit a 
 man's "right" to the fruits of his labor, to 
 what he grows, gathers, or makes with his own 
 hands, while many men and many writers deny 
 a man's ''right" to the exclusive possession 
 of the soil or other natural advantages. They 
 may admit its expediency usually under the 
 excuse of social conditions more or less imper- 
 fect, but they deny the ' ' right. ' ' 
 
 « « 4» 
 
 So far as either abstract or concrete ** right " 
 is concerned, there is no distinction between 
 the right to own and hold land and the right 
 to own and hold what one grows on the land, 
 
 174
 
 Land 175 
 
 or makes from natural products and materials. 
 
 In both classes of property the " right " is 
 neither more nor less than social convention 
 guarded by law on the theory that such rights 
 best promote social welfare. 
 
 The "rights" are not precisely the same. 
 Society in its laws and customs recognizes and 
 establishes many distinctions between personal 
 property rights and real property rights. Gen- 
 erally speaking the latter are more restricted 
 — less absolute, so to speak. The two classes 
 of rights are so distinct the law student is 
 obliged to take two courses of study, one de- 
 voted to realty, the other to personalty, and 
 even then he will know little or nothing regard- 
 ing the law of timber, mineral oil, and water 
 power rights — all important variations of land 
 ownership. 
 
 ♦ * ♦ 
 
 Land rights are personal-property rights 
 in another important feature. 
 
 They are evidenced by paper titles, ' 
 
 One man may occupy and work a piece of 
 land that is " owTied " by another. The so-/ 
 called * ' owner ' ' simply holds the paper titlej7
 
 176 Property 
 
 The '* absentee " landlord who is so bitterly 
 denounced in many quarters, is the "absentee" 
 stockholder in another guise — or rather the 
 same man holding differently printed pieces 
 of paper. 
 
 ^ « ♦ 
 
 Once get and keep clearly in mind that all 
 property rights are recognized and established 
 simply as incentives, simply and solely on the 
 theory that they best promote individual and 
 social welfare, our attitude toward them 
 changes immediately, and we are in a position 
 to discuss each right, not as a burning outrage 
 against mankind, but on its merits as an 
 expedient that may be modified or abandoned 
 at will, and that is certain to undergo modifica- 
 tions in time. 
 
 Looking at the broad subject of private prop- 
 erty in land and natural resources in a dispas- 
 sionate manner, it does differ in certain impor- 
 tant characteristics from private property in 
 moveables. 
 
 ♦ * ♦ 
 
 It is possible under existing laAvs and condi- 
 tions for anv individual to '* own " and hold to
 
 Land 177 
 
 the exclusion of others, land to the value of 
 many millions. 
 
 An individual may own and hold without 
 working thousands and thousands of acres of 
 farming, timber, coal, oil, and mineral lands. 
 
 A man may be an actual millionaire in land, 
 but land is the only form of wealth that may be 
 held to the exclusion of others without deterior- 
 ation in value.* 
 
 Without any effort on his part a man may 
 
 become a millionaire by the mere increase in 
 
 value — the unearned increment — of vacant 
 
 city property, or of farming land, or of timber, 
 
 coal, oil, and mineral properties. 
 »♦♦ »:♦ ♦•♦ 
 
 In so far as private property in land is an 
 
 'A man might hoard many thousands in gold, or even 
 in coal or wheat, to the exclusion of others, letting the 
 gold lie idle and the wheat and coal perish, but this course 
 would be so unusual, .his family or the state would inter- 
 fere on the ground he was not sane. Furthermore if any 
 number of rich men did such things laws would be speed- 
 ily passed to prevent the withdrawing of actual wealth 
 from productive uses, and hoarding it; in other words the 
 millionaire is permitted the satisfaction of thinking him- 
 self rich so long as he does not attempt to withdraw his 
 wealth from where it is productively employed by others. 
 He can accumulate his pieces of paper undisturbed so 
 long as others — and through them the community — have 
 the real use and enjoyment of his wealth.
 
 178 Property 
 
 incentive to greater productive effort it is a 
 benefit, but when it fails to act as such incen- 
 tive it should be limited accordingly. 
 
 It is significant how often and at how many 
 different angles we come against property in 
 land as the one stuhhorn proposition in every 
 attempt to work out a solution of the problem 
 of the just distribution of wealth. 
 
 It is the most stuhhorn factor in social 
 economy, and until it is understood and rightly 
 dealt with, it will block every effort toward 
 reform of economic conditions. 
 ♦♦♦ ♦♦♦ ♦♦« 
 
 The proposition that, aside from land- 
 owners, there are few actual millionaires, may 
 seem startling, but it is true. 
 
 However widely this little book may be read, 
 not a reader will be able to name a man — aside 
 from land-owners — who has at any given 
 moment the actual and exclusive possession of 
 a million dollars of wealth. 
 
 If you name a man who ** owns " an immense 
 factory, the factory is in the actual possession 
 and control of his employees, they are oper- 
 ating it primarily for their own benefit, second-
 
 Land 179 
 
 arily for his, in reality for the coimnunity. If 
 he dies suddenly the factory goes on the same. 
 If the government should buy or confiscate it, 
 work would go right on. If he sells, the em- 
 ployee may not know it for weeks or months. 
 ♦ ♦ ♦ 
 
 If you point to a rich man's home, it is true 
 it may have cost a million dollars, but in just 
 what sense is it hisf 
 
 The labor of the community built and fur- 
 nished it, just as it built the public library in 
 the next block. 
 
 Assume for the sake of the argument the 
 two buildings in outward appearance are exact 
 duplicates and equally ornamental to the street, 
 then so far as improvement of the street is 
 concerned one is as valuable to the community 
 as the other. 
 
 True the library is incomparably the more 
 useful, but the millionaire does not live alone, 
 nor does he exclude the public entirely. 
 
 His house is occupied by many servants and 
 employees and it is kept in condition by 
 plumbers, painters, decorators. 
 
 If there is a lawn it is kept in order almost 
 
 \
 
 180 Property 
 
 wholly for the pleasure of those who pass, just 
 as the park across the street is kept in order 
 to please the public. 
 
 Of the actual cost of the house itself a large 
 percentage was spent upon the outside, upon 
 its appearance to make it attractive to others. 
 
 All its costly contents, furniture, rugs, pic- 
 tures, have been gathered from all over the 
 world, not that the " owner " may enjoy them 
 to the exclusion of others, but in order that 
 others may see them. 
 
 In a sense the house is a small museum. It 
 is not open to the public generally but it is 
 open to a large number. As the '' collection '* 
 of pictures, bric-a-brac, curios, etc., increases, 
 the '* owner " almost invariably seeks to have 
 it seen and enjoyed by larger and larger num- 
 bers; he either throws his house open on cer- 
 tain days, thereby making it for the time being 
 a public museum, or he loans and, often, finally 
 gives his collection to a public institution. 
 ♦ ♦ ♦ 
 
 / The real incentive to build a costly home is 
 the interest and applause of the public. 
 
 The owner may have been moved by motives
 
 Land 181 
 
 of vulgar ostentation, by the desire to " outdo " 
 his neighbors, in short to splurge and display 
 his wealth. 
 
 But a man cannot be ostentatious, cannot 
 splurge without a public, any more than a the- 
 atrical manager or the governing body of a 
 museum. 
 
 The nation splurges in its public buildings 
 and makes some sad failures. 
 
 There is a strong tendency in this country 
 to require that buildings on certain streets shall 
 conform to certain standards of size and beauty. 
 This is in the interest of the community. It 
 means that the individual who builds on the 
 street must build a fifty or a hundred-thousand 
 dollar building, even though he himself would 
 be content to live in a cottage. / 
 
 If Fifth Avenue is lined with costly resi- 
 dences and business blocks it is because the 
 standards set by the community call for large 
 expenditures on a street so important to the , 
 life of the city. 
 
 If a man should erect a cheap garage on 
 Fifth Avenue the entire city would resent it. 
 Manufacturing is barred from certain blocks.
 
 182 Property 
 
 If we keep this proposition clearly in mind 
 — that property in all its forms is neither more 
 nor less than so many different kinds of con- 
 trol, encouraged, permitted, limited by the 
 community for its welfare — we have paved the 
 way for a dispassionate discussion of the ad- 
 vantages and disadvantages of any particular 
 form of property — such, for instance, as that 
 in land. 
 
 * <► ♦ 
 
 Land by reason of its more permanent char- 
 acter and definite quantity, is sharply dis- 
 tinguished from all forms of property that are 
 created by human effort. 
 
 But private property in land developed like 
 all other rights to meet and better conditions. 
 
 Every attempt to distinguish fundamentally 
 between rights to land and natural resources 
 on the one hand and rights to personal prop- 
 erty on the other, leads to confusion worse con- 
 founded since it necessarily assumes something 
 sacred or indisputable in the latter rights, and 
 this assumption obviously blocks all attempts 
 on the part of the community to limit those 
 rights.
 
 Land 183 
 
 In fact the assnmption necessarily denies the 
 slow evolution of those rights; for if they 
 evolved to meet community needs, increasing 
 in number and complexity as society advances,^ 
 it is plain they may devolve to meet reverse 
 conditions. 
 
 «♦ «« 
 
 The literature of communism, socialism, and 
 radical economics generally is filled with argu- 
 ments to the effect that private ownership of 
 land is in some way fundamentally distinguish- 
 able from private ownership of personal prop- 
 erty, and is an outrage upon mankind. 
 
 Be it said to the credit of the logical com- 
 munists that is not their contention; they 
 denounce personal property rights as vigor- 
 ously as real. / 
 * ♦ ♦ 
 
 Henry George^ lays down the following 
 proposition : 
 
 What constitutes the rightful basis of property? 
 
 A man belongs to himself, so his labor when put in 
 concrete form belongs to him. 
 
 For this reason, that which a man makes or pro- 
 duces is his own, as against aU the world — to enjoy, 
 
 ^Progress and Poverty, Book vii, chap. i. 
 
 o
 
 184 Property 
 
 or to destroy, to use, to exchange, or to give. No one 
 else can rightfully claim it, and his exclusive right 
 to it involves no wrong to anyone else. Thus there 
 is to everything produced by human exertion a clear 
 and indisputable title to exclusive possession and 
 enjoyment, which is perfectly consistent with justice, 
 as it descends from the original producer, in whom 
 it vested hy natural law} 
 
 It would be difficult to embody in so few 
 terse rhetorical lines, more false premises and 
 false logic. 
 
 As matters of fact : 
 \ 1. A man does not belong to hims-elf. Bio- 
 logically he belongs in part first of all to 
 woman; secondly, to his offspring; thirdly, to 
 his tribe or people. 
 
 A man no more belongs to himself than a 
 woman belongs to herself, a babe to itself. 
 
 The proposition is mere sounding rhetoric, 
 but it has worked no end of harm throughout 
 the ages. It is at the basis of the individual's 
 fight against restraint, against the reign of law 
 and order that has made him what he is. 
 / 2. The fruits of a man's labor do not belong 
 \ to him. 
 
 ' Italics are the writer's.
 
 Land 185 
 
 They belong to his mate, his offspring, his 
 tribe, without whose cooperation there would 
 be no * ' fruits ' ' or property of any kind. 
 
 3. A man's rights to the fruits of his labor 
 are not vested by natural law. 
 
 As here used "natural law'^ is simply 
 rhetoric. We live in the midst of natural laws, 
 both utilizing and struggling against them, but 
 there is no ' ' natural law ' ' that gives me a 
 right to the pen I hold or the clothes I wear, 
 the house I live in, or the land it stands on. 
 All these rights are established by human laws 
 and institutions, and each one may be modified 
 or abolished; as a matter of fact not one re- 
 mains precisely the same from generation to 
 generation. 
 
 *> *> *> 
 
 It would be difficult to condense into the same 
 number of words more inconsequential reason- 
 ing than the following: 
 
 The pen with which I am writing is justly mine. 
 No other human being can rightfully lay claim to it, 
 for in me is the title of the producers who made it. 
 It has become mine, because transferred to me by the 
 stationer, to whom it was transferred by the importer, 
 who obtained the exclusive right to it by transfer from
 
 186 Property 
 
 the manufacturer, in whom, by the same process of 
 purchase, vested the rights of those who dug the mate- 
 rial from the ground and shaped it into a pen. Thus, 
 my exclusive right of ownership in the pen springs 
 from the natural right of the individual to the use of 
 his own faculties.^ 
 
 Here is a description of a series of rights, 
 every one of which is created by, and rests 
 upon, the laws and institutions of a highly 
 organized society, and not one of which is in 
 any sense " vested " by any natural law. The 
 price paid for the pen is distributed back along 
 a long line of individuals from the stationer at 
 the corner, to the miner at the mine. At per- 
 haps every point in the line labor loudly com- 
 plains it does not get its fair share of the re- 
 turn for the immediate process. Theoretically 
 speaking, labor cannot possibly — any more 
 than capital — get its exactly correct share. In 
 what sense, then, do I ** own" a pen in the pro- 
 duction of which any man has put either more 
 or less labor than he was paid for? 
 
 The simple fact is I have in my possession a 
 pen — it may have been given me; I may have 
 paid half-price at a bankrupt sale; or I may 
 
 ^Progress and Poverty, Book vii, chap. i.
 
 Land 187 
 
 have paid an excessive price as the result of a 
 mistake or of extortion on the part of the 
 dealer. 
 
 The law recognizes and protects my posses- 
 sion; it creates what is called my *'o^vnership/' 
 and it is often quick to cancel or modify that 
 ownership to the extent of my paying over 
 again, if it finds my title is not legal. Or it 
 may compel me to devote a part of the value of 
 the pen (included as it is in the sum total of 
 my wealth) to the support of my wife and 
 children, the lajdng of a walk or a pavement, 
 etc. The community is deaf to my plea that my 
 right to the pen and other personal property is 
 ** vested by natural law." 
 
 ♦ ♦ ♦ 
 
 George goes on to say: 
 
 This right of ownership that springs from labor 
 excludes the possibility of any other right of owner- 
 ship. 
 
 The right to the produce of labor cannot be enjoyed 
 without the right to the free use of the opportunities 
 offered by nature, and to admit the right of property 
 in these is to deny the right of property in the prod- 
 uce of labor. 
 
 Whatever may be said for the institution of private
 
 ( 
 
 188 Property 
 
 property in land, it is therefore plain that it cannot 
 be defended on the score of justice. 
 
 The equal right of all men to the use of land is as 
 clear as their equal right to breathe the air^ — it is a 
 right proclaimed by the fact of their existence. 
 
 ♦ ♦ ♦ 
 
 These propositions sound convincing, and 
 unhappily they do convince and stir the dis- 
 contented and the superficial to the point of 
 revolution and rebellion against authority. 
 
 ♦ ♦ ♦ 
 
 If the matter were so plain as George claims, 
 private property in land M^ould have ended long 
 ago; in fact it is difficult to see how it could 
 have evolved and gained so strong a foothold 
 the world over. 
 
 Yet here it is, one of the basic institutions of 
 social advancement. The logical economist 
 and social philosopher can reach but one con- 
 clusion, the institution must have been an 
 economic necessity. It may not be perfect; it 
 may call for material modification; but the 
 same may be said of all personal property 
 rights, for like them it is the product of 
 economic and social evolution. 
 
 George goes on to demonstrate by a long
 
 Land 189 
 
 revue of primitive societies^ that land and 
 natural resources were the property of the 
 tribe- — precisely as might be expected. 
 
 The smaller, the simpler, and cruder the 
 social organization, the fewer the rights of all 
 kinds, especially exclusive rights to the occu- 
 pation of tracts of land, large or small. Con- 
 ditions rendered such rights of little value to 
 the individual and possibly inconvenient to the 
 tribe. Fifty years ago in our sparsely settled 
 western territories exclusive rights to vast 
 grazing lands were imperfectly recognized; 
 sheep-owners and cattle-owners would fight 
 over them, since sheep spoil the grazing for 
 cattle. But as the territories became more 
 densely populated rights to the use and occupa- 
 tion of natural resources became more clearly 
 defined and more complex. 
 *i* *tf ^ 
 
 George rather naively confesses the futility 
 of his labored demonstration in these two sum- 
 mings up: 
 
 The general course of the development of modern 
 civilization since the feudal period has been to the 
 
 '^Progress and Poverty, Book VII, chap. iv.
 
 190 Property 
 
 subversion of these natural and primary ideas of 
 collective ownership. 
 
 The reason, I take it, that with the extension of 
 the idea of personal freedom has gone on an exten- 
 sion of the idea of private property in land, is that as 
 in the progress of civilization the grosser forms of 
 supremacy connected with land ownership were 
 dropped, or abolished, or became less obvious, atten- 
 tion was diverted from the more insidious, but really 
 more potential forms, and the land-owners were 
 easily enabled to put property in land on the same 
 basis as other property. 
 
 The importance of this paragraph lies in the 
 admission of fact that with the development of 
 society, private rights in land developed par- 
 allel with rights in other property. 
 
 George wonld have his readers believe that 
 personal property rights are ** vested by 
 natural law ' ' and are jnst ; while real prop- 
 erty rights are contrary to natural law and 
 unjust, yet both have evolved along the same 
 lines and attained substantially the same de- 
 gree of complexity. 
 
 ♦ ♦ * 
 
 With far less heat and rhetoric Herbert 
 Spencer ^ reached the same conclusions regard- 
 
 ^ Social Statics, chap. ix.
 
 Land 191 
 
 ing private property in land and printed them 
 when Henry George was a young man of 
 twenty, and thirty years before Progress and 
 Poverty was published. 
 
 Spencer's reasoning is as follows: 
 
 1. Given a race of beings having like claims 
 to pursue the objects of their desires — given 
 a world adapted to the gratification of those 
 desires — a world into which such beings are 
 similarly born, and it unavoidably follows that 
 they have equal rights to the use of this world. 
 For if each of them *'has freedom to do all 
 that he wills provided he infringes not the 
 equal freedom of any other, "^ then each of 
 them is free to use the earth for the satisfac- 
 tion of his wants, provided he allows all others 
 
 * This purely theoretical proposition is at the basis of 
 Spencer's reasoning and conclusions in Social Statics. It 
 is printed in italics as his first •principle — see chapter ix. 
 It is the fundamental basis of Individualism, of a social 
 philosophy that views society primarily and practically 
 solely from the standpoint of the individual; it starts out 
 with an abstract and hypothetical individual — aloof from 
 all family, tribal, social ties — and assumes that individual 
 possessed certain " natural " rights, which he relinquishes 
 in part as he becomes a member of society. The old 
 Rousseauan — contrat social — state of nature, etc., the- 
 ories over again.
 
 192 Property 
 
 the same liberty. And conversely, it is mani- 
 fest that no one, or part of them, may use the 
 earth in such a way as to prevent the rest from 
 similarly using it, since that to do this is to 
 assume greater freedom than the rest, and con- 
 sequently to break the law. 
 
 Equity, therefore, does not permit private 
 property in land. 
 
 Briefly reviewing the argument, we see that 
 the right of each man to the use of the earth, 
 limited only by the like rights of his f ellowmen, 
 is immediately deducible from the law of equal 
 freedom. We see that the maintenance of this 
 right necessarily forbids private property in 
 land. On examination all existing titles to such 
 property turn out to be invalid, those founded 
 on reclamation, inclusive. It appears that not 
 even an equal apportionment of the earth 
 amongst its inhabitants could generate a 
 legitimate proprietorship. We find that if 
 pushed to its ultimate consequences, a claim to 
 exclusive possession of the soil involves a land- 
 owning despotism.^ We further find that such 
 
 * Here it is worth while to remark that it is only an 
 abstract and purely theoretical proposition that can " be
 
 Land 193 
 
 a claim is constantly denied by the enactment 
 of our Legislature.^ And we find lastly, that 
 the theory of the co-heirship of all men to the 
 soil, is consistent with the highest civilization; 
 and that, hovv'ever difficult it may be to embody 
 that theory in fact equity sternly commands it 
 to be done. 
 
 ♦ ♦ * 
 
 '\\niat is the remedy Spencer proposed? 
 Ownership by the Nation. / 
 
 The change required would simply be a change of 
 landlords. Separate ownerships would merge into 
 the joint-stock ownership of the public. Instead of 
 being in the possession of individuals, the country 
 would be held by the great corporate body — society. 
 
 pushed to its ultimate consequences." As for instance, 
 Henry George's proposition that personal property rights 
 are vested by natural law can be pushed to the most ex- 
 treme and absurd conclusions. The practical proposition 
 that all property rights are in no sense abstract, but 
 wholly the result of human and social relations, develop- 
 ing and changing, with changing social conditions, and 
 at all times subject to the will of the community, cannot 
 be pushed to extreme or absurd conclusions. 
 
 ' Here Spencer recognizes the practical fact that private 
 property in land is nowhere absolute, that the everyman's 
 right to real estate is at all times subordinate to the will 
 and welfare of the community. Hence the logical infer- 
 ence is that the community considers it to be for the best 
 interests of all to maintain and protect precisely the rights 
 — both real and personal — the law now recognizes.
 
 194 Property 
 
 Instead of leasing his acres from an isolated pro- 
 prietor, the farmer would lease them from the nation. 
 
 Exceedingly simple in statement, but in 
 practice ! 
 
 One objection is sufficient to topple the house 
 of illogical cards. 
 
 His conclusion and final proposition is to 
 vest the ownership in the nation, but all his 
 premises and reasoning require the ownership 
 to be in mankind irrespective of tribes and 
 nations. 
 
 The land-o\vners of England are deprived of 
 their titles and required to lease from the state. 
 How about the land-owners of Scotland and 
 Ireland? of Denmark, Sweden, Norway, the 
 Continent, and so on? 
 
 Their rights to enjoy the soil of England are 
 as sacred, as " natural," as those of the people 
 of England, and they may object to the terms 
 dictated by the new landlord — the English 
 government, just as Japanese and Chinese 
 object to the exclusion and other restrictive 
 immigration laws made by the American gov- 
 ernments, federal and state. 
 
 When we begin to talk about the individual's
 
 Lnncl 195 
 
 inalienable rights to access to the soil, to light, 
 air, etc., one cannot see why those rights should 
 either end or change at the imaginary geo- 
 graphical line that divides one nation from 
 another. 
 
 Suppose each nation on the Continent takes 
 title to all lands within its boundaries, and 
 does with those lands as it pleases, the result 
 would be as many different landlords as there 
 are nations. 
 
 Theoretically just and universal distribution 
 and enjojTiient of land privileges would be as 
 far off as ever. 
 
 George's famous single-tax plan is directly 
 suggested in the paragraph from Social Statics 
 before quoted. 
 
 •> ♦ ♦ 
 
 Happily for George his single-tax propo- 
 sition does not stand or fall by his long argu- 
 ment against ownership of land. He says : 
 
 I do not propose either to purchase or to confiscate 
 private property in land. The first would be unjust ; 
 the second, needless. Let the individuals who now 
 hold it still retain, if they want to, possession of what 
 they are pleased to call their land. Let them continue 
 to call it their land. Let them buy and sell, and
 
 198 Property 
 
 /bequeath and devise it. We may safely leave them 
 the shell, if we take the kernel. It is not necessary to 
 confiscate land; it is only necessary to confiscate rent. 
 Nor to take rent for public uses is it necessary that 
 the state should bother with the letting of lands, and 
 assume the chances of favoritism, collusion, and 
 corruption that might involve. It is not necessary 
 that any new machinery should be created. The 
 machinery already exists. Instead of extending it, all 
 we have to do is to simplify and reduce it. By leav- 
 ing to land-owners a percentage of rent which would 
 probably be much less than the cost and loss involved 
 in attempting to rent lands through state agency, and 
 by making use of this existing machinery, we may 
 without jar or shock, assert the common right to land 
 by taking rent for public uses.^ 
 ♦ ♦ ♦ 
 
 Rather a lame and impotent conclusion after 
 the eloquent demonstration of the iniquity and 
 fundamental injustice of any private owner- 
 ship of natural resources. 
 
 Private ownership is to continue ! 
 
 Why? 
 
 Because the state could not fairly, honestly, 
 and efficiently act as landlord ! 
 
 But the state is to go in partnership with the 
 land-owner and take all of the profits except 
 
 ^Progress and Poverty, Book viii, chap. ii. 
 
 (
 
 Land 197 
 
 just sufficient to induce the landlord to run the 
 business — Pv sort of partnership that seldom 
 means lower rents for the tenant; any more 
 than heavy income and profit taxes mean that 
 those who pay them will make lower prices on 
 their goods or services. 
 
 *** *«♦ ♦♦♦ 
 
 Everything that can be said in favor of a 
 single-tax on land can be said without raising 
 a question regarding the justice or injustice of 
 private ownership of land. Just as the ques- 
 tion of a tax on personal property, or a tax 
 upon incomes does not necessarily, or even 
 incidentally, involve any question regarding 
 the right of a man to own property at all, or 
 his right to earn an income. 
 
 It is, of course, possible to discuss all these 
 questions in one volume but the attempt would 
 not prove very helpful toward the answering 
 of anyone. 
 
 As a revenue proposition the writer has a 
 great deal of sympathy with the single-tax plan 
 — almost any definite plan would be an 
 improvement upon the hodge-podge of revenue 
 laws, state and federal, in force in this country.
 
 198 Property 
 
 And George is right in urging a sclieme of 
 taxation on land so arranged as to discourage 
 the holding of vacant and undeveloped prop- 
 erties to the exclusion of others to reap the 
 unearned increment. 
 
 Not only tax laws, but inheritance laws, and 
 laws governing conveyances can be used to dis- 
 courage, even prevent altogether, the accumu- 
 lation of fortunes in unoccupied land. 
 
 Property in land — i. e. individual control of 
 
 land and natural resources, need not be abol- 
 
 '■ ished altogether. The end in view is a maximum 
 
 of welfare to the community at the least cost 
 
 and inconvenience.^ 
 
 ♦ ♦ ♦ 
 
 The only argument that can be logically 
 urged in favor of broad, private, or corporate 
 ownership — control — of land and natural re- 
 sources is that development follows more 
 rapidly. 
 
 Generally speaking this is true. Limit the 
 ;\ ownership and the incentive is gone. 
 
 But it is also true that private ownership 
 may be carried so far that the individual is 
 encouraged to gamble on the future, to sit
 
 Land 199 
 
 ** tight" and wait for the community and 
 others to make his land valuable; this sort of 
 ownership should be restricted to the vanish- 
 ing point. 
 
 Needless to say it is difficult to draw the line, 
 and still more difficult to devise the ways and 
 means, but the point we are endeavoring to 
 drive home is that nothing can be done until 
 there is a much clearer understanding of the 
 so-called ''rights" of the individual and the 
 real rights of the community. 
 ♦ ♦ ♦ 
 
 The one great objection to abolishing private 
 ownership and control of landed property in 
 any or all of its forms in favor of the state, is 
 the poor and inefficient use the state makes of 
 its opportunities. 
 
 State ownership is so wasteful, so inefficient, 
 and often so corrupt that most thinking — and 
 instinctively many unthinking — men are op- 
 posed to it.^l "^ 
 
 In short the evils of private OAvmeiship are 
 believed to be less than those of the state. The 
 individual may make a poor landlord, but it is 
 notorious that the state or city makes a worse
 
 200 Property 
 
 so far as getting real value out of the property 
 for the community. The state either does 
 nothing or is badly victimized in trying to 
 utilize its properties. 
 
 All this may change as people think more on 
 the subject, and there can be no change for the 
 better until they do think more. 
 
 When they think long enough and hard 
 enough either to abolish or greatly curtail pri- 
 vate oA\Tiership of land, they will probably think 
 far enough to perfect the machinery of state 
 control. 
 
 ♦> ♦ ♦ 
 
 At all events the limitation of private owner- 
 ship of land — especially unused land — would 
 probably go further toward pacifying mankind 
 and allaying discontent than any other one 
 social or economic reform. 
 
 The means ivherehy would require a small 
 volume ; this book must be content to point out 
 the logical whereto — the inevitable end.
 
 X 
 
 LUXURIES 
 
 Luxuries — a word in everyday use, yet ex- 
 ceedingly difficult to define. 
 
 What are luxuries to one age are necessaries 
 to another ; what are luxuries to one man, one 
 people, one race, are necessaries to another. 
 
 All such statements are little more than 
 familiar truisms. They do not help us on our 
 way save as they demonstrate the impossibility 
 of an}^ hard and fast definition of the term.^ 
 
 Every nation and every age considers everything 
 as superfluous which they do not habitually use. 
 Holinshed, in his chronicle, groans over the ultra- 
 refinement of the English in his times (1577), because 
 they were everywhere introducing chimneys, instead 
 of allowing the smoke to escape through cracks in 
 the roof, and were using vessels of earthenware, or 
 even of tin, in place of the old wooden bowls and jugs. 
 Another author of the same period, Slaney, " On 
 Rural Expenditure," is indignant that oak should be 
 used in building, instead of willow. " Formerly," he 
 exclaims, " houses were of willow and men were of 
 
 * The Century dictionary quotes Cowper's lines : 
 First Necessity invented stools, 
 Convenience next suggested elbow chairs, 
 And Luxury th' accomplish'd Sofa last. 
 
 201
 
 202 Property 
 
 oak, now-a-days, houses are of oak and men are of 
 willow. ' ' In the IMiddle Ages linen was so rare that 
 princesses would make a present of a shirt to their 
 betrothed, and it was the general custom on going to 
 bed to take off even this first garment. It would be 
 considered today the very extreme of misery to be 
 reduced to dispensing with this. When flowered cot- 
 tons and muslins first were introduced from India, 
 wealthy ladies only could wear them, now, working- 
 men's wives despise them.^ 
 
 As the luxuries of one generation become the 
 comforts and necessities of the next, new lux- 
 uries are devised, and so on from generation 
 to generation. Each feverishly seeks new 
 things, new pleasures, new sensations, and these 
 new things and pleasures are luxuries so long 
 as they are novel and comparatively rare — 
 that is enjoyed by the comparatively few. 
 
 This demand for the new, the novel, the rare, 
 the unusual, is inherent in human nature. It is 
 closely allied to, or springs from curiosity. 
 
 It is part of the primitive love of ostentation, 
 the desire to excel others in strength, achieve- 
 
 ' Emile de Laveleye, Luxury, pp. 5 and 6. This little 
 book or essay, is more of a sermon than discussion.
 
 Luxuries 203 
 
 ment, adornment. It is part of tlie natural 
 desire to excel in the eyes of the opposite sex, 
 to do things, wear things, have things that will 
 make the opposite sex take notice and admire. 
 
 "SVhen we talk of the '* love of luxury," that 
 is only superficially correct. The true phrase 
 would be the "love of the admiration — or 
 envy, or notoriety — that luxuries and luxuri- 
 ous living arouse." 
 
 It is idle to condemn luxuries or luxurious 
 living as such. If luxuries and luxurious liv- 
 ing are wrong then we must seek and eradicate 
 the instincts and desires that create luxuries. 
 
 When Vv^e seek these instincts and desires we 
 find we are dealing with the most fundamental 
 impulses of human nature, with the impulses 
 that perpetuate the species and lead to all 
 progress. 
 
 The impulse to excel is one of the most valu- 
 able to the race. It may appear ruthless in 
 some of its consequences, but without it there 
 can be no progress of any kind — spiritual or 
 material. 
 
 The impulse to out-do, out-shine, out-talk, 
 out-sing, out-show, out-eat, out-dress, out-
 
 204 Property 
 
 noise, out-anything, is simply the impulse to 
 excel in its many guises. 
 
 How tame, stagnant, and impossible the 
 world w^ould be if no man had any desire to do 
 things or have things better than his neighbor. 
 
 ♦ ♦ •> 
 
 It will be urged that there are good ways and 
 bad v.^ays of outdoing. Granted, but w^hether 
 a man outdoes, or outowns his neighbor in a 
 good way or a bad way the inequality in pos- 
 session or enjoyment is there just the same; 
 the luxury is, so to speak, statistically the same. 
 
 So far as the term is concerned the man who 
 pays five thousand dollars for a fine painting, 
 or toward the support of a fine orchestra in- 
 dulges in a '' luxury " as much as the man who 
 spends the same amount for the hideous deco- 
 ration of a room, or the support of a garish 
 and vicious burlesque show, or upon a banquet, 
 or dance. 
 
 In effect upon the community there is all the 
 difference in the world between the man who, 
 with sure taste, gathers about him beautiful 
 things, and the man who spends his mofiey fool- 
 
 **^.
 
 Lujcurics 205 
 
 ishly and lavishly on things that are not elevat- 
 ing. But who is to be the judge, who is to draw 
 the line? More people may — usually do — 
 actually enjoy the poor painting, the poor 
 music, than the good. The poor, the cheap, the 
 ostentatious may actually lift the masses more 
 than the fine, because the appeal is more 
 elemental. 
 
 The big, showy, tinselly theatrical produc- 
 tion may give real pleasure to hundreds of 
 thousands, where the fine fails to attract more 
 than a few. 
 
 It is easy enough to condemn luxuries, but it 
 is not so easy to designate just what luxuries 
 any particular people at any particular time 
 should dispense with. 
 
 It would be difficult to take any people in 
 any particular historical period and designate 
 those luxuries they might have dispensed with 
 to our benefit. 
 
 Athens and Rome — especially Rome — ^in- 
 dulged in excesses in living no man would 
 attempt to justify, but aside from some of the 
 famous excesses, stories of which have come 
 down to us, the life of the Romans generally
 
 206 Property 
 
 set high standards as compared with the lives 
 and customs of peoples about them. 
 
 With all their excesses and shortcomings the 
 modern world is better off for the human 
 experiment of Athens, Rome, Paris, London. 
 ♦ ♦ ♦ 
 
 So much for the reason, for the justification 
 of luxuries generally. We will now return to 
 our line of argument, to the statement that a 
 man may be a millionaire in luxuries, as in 
 land. 
 
 And it is because an individual may possess 
 and actually control to the exclusion — if he so 
 desires — of others thousands and millions of 
 dollars worth of rare and beautiful — also of 
 rare and ugly, things that the masses murmur.^ 
 
 Much of social unrest and discontent, of class 
 envy and hatred, is due to the distribution and 
 enjoyment of so-called luxuries — in short to 
 what may be summed up as luxurious living. 
 
 It does not matter much to the masses who 
 have little that a man has paper w^ealth to the 
 
 * We have pointed out — page 180, that men owning 
 luxuries do not, as a matter of fact, hold them to the 
 exclusion of others. In a profound sense a luxury ceases 
 to be a luxury if others do not view it as such.
 
 Luxuries 207 
 
 extent of a million or a hundred millions, pro- 
 viding they see him working hard and living 
 simply. 
 
 It is when he begins to realize on a part of 
 his paper wealth and build a costly home, buy 
 costly things, and indulge expensive tastes that 
 the multitude takes notice and murmurs, and 
 all the more so if his lavish expenditures take 
 the form of foolish or vicious extravagances. 
 He may be spending but a fraction of his in- 
 come, leaving the balance and the entire prin- 
 cipal in productive pursuits, yet he arouses dis- 
 content, because he accentuates the great 
 inequalities in the actual enjoyment of wealth. 
 
 It is safe to say that if every rich man, when 
 he came to assert his ownership of any part of 
 his fortune by spending it for his own gratifica- 
 tion, spent it only on objects the public approved, 
 there would be very little discontent over sta- 
 tistical inequalities in the distribution of 
 wealth, however great they might be. 
 
 ♦> ♦ ♦ 
 
 A superficial view of the way ci^^lized peoples 
 live leads irresistibly to the conclusion that in
 
 208 Property 
 
 their actual possession and enjoyment of things 
 and services some classes and many individuals 
 have altogether too much as compared with 
 others whose lives, surroundings and enjoy- 
 ments are exceedingly poor and mean. 
 
 This superficial impression is so strong that 
 many earnest men and women become violent 
 social reformers, not a few advocating a the- 
 oretically pure commxmism in which all would 
 be on an equal footing as regards things con- 
 sumed and enjoyed. 
 
 But may there not be serious practical diffi- 
 culties in the way of attaining anything like 
 that equality? 
 
 Is it not possible that in the utopian or com- 
 munistic community the inequalities in con- 
 sumption and enjojTnent would still be great? 
 
 Exact equality in the distribution of com- 
 forts and luxuries is absolutely unattainable, 
 either practically or theoretically. 
 
 Hence the differences in the distribution of 
 comforts and luxuries between the most mil- 
 lennial state the mind of man can picture, and 
 present conditions of private ownership are 
 differences in degree and not in kind; the
 
 Luxuries 209 
 
 inequalities are there, but perhaps not so ac- 
 centuated — perhaps more so in some respects. 
 
 <s» ♦!♦ •;<» 
 
 Conceding at the outset that the lives of a 
 certain percentage of every community are 
 depressingly lacking in comforts, to say nothing 
 of luxuries, the practical question is how to pro- 
 vide the things and enjoyments needed and 
 induce those ivlio lack them to use them. 
 
 The health officer, the expert, the social 
 reformer, may feel sure of the need of extensive 
 improvements in food, housing, modes of liv- 
 ing, etc., but unless the class to be lifted can be 
 induced to help lift itself, little can be done. 
 
 It is easy to tax those who have to provide 
 everything necessary for those who have not — 
 just as easy to get the money in this way as to 
 take it from the common fund in a communism. 
 The trouble begins when the attempt is made 
 to arbitrarily change the habits of the mass to 
 be affected. 
 
 ♦ * ♦ 
 
 The average American workingman insists 
 upon comforts and conveniences the European
 
 2io Property 
 
 wage-earner not only knows nothing of, but 
 cares nothing for. 
 
 Landlords of tenement houses in this country 
 often have no end of trouble with foreign ten- 
 ants who use the bathtubs to hold coal and 
 refuse, for any and every purpose except for 
 bathing. 
 
 Many and costly are the disappointments of 
 builders of model houses and tenements be- 
 cause those who live in them treat them as 
 hovels. It takes generations to change the 
 habits of peoples, to make them cleaner and 
 more sanitary. 
 
 People indulge in luxuries before they appre- 
 ciate them or know how to use them. 
 
 The average American passes through the 
 '' East Side " in New York on a hot summer 
 day or evening and wonders how people can 
 live so, seemingly on the streets or packed in 
 and sweltering. 
 
 The average social reformer is for imme- 
 diately uplifting the entire mass by law. The 
 dreamy communist would remedy the situation 
 by some more or less violent redistribution of 
 wealth so the " East Side " would have enough
 
 Luxuries 211 
 
 to buy the things it ought to have — ' ' ought to 
 have " in the average American mind. 
 
 Now, it may be well within the truth to say 
 that the *' East Side " as a whole earns and 
 makes enough money to live quite as com- 
 fortably as the average American worker — if 
 not better, but the " East Side " lives as it has 
 lived for generations in the Old Country and 
 in this, according to its many racial and na- 
 tional characteristics. AMien it wants to live 
 better it moves into other neighborhoods and 
 other cities — often, however, carrying strong 
 flavors of the " East Side " mth it. 
 
 The '^ East Side " is perhaps the most inde- 
 pendent and self-reliant section of New York, 
 it is quite sufficient unto itself and when it 
 wants more bedrooms and bathtubs it can 
 afford them. 
 
 The same may be said of the workers in the 
 Chicago Stock Yards district and in the great 
 steel mills of the country. Year in and out 
 they earn enough to live in far more com- 
 fortable rooms and houses than those we see 
 surrounding those great industries. 
 
 Gaze from a train at the average American
 
 212 Property 
 
 farmhouse, bare of trees, shade, flowers, lawii ; 
 fences often half down, houses and out-build- 
 ings out of repair, steps rotting, porches 
 sagging, lack of paint, care, and pride in ap- 
 pearance. Seldom a stone, brick, cement or 
 board walk to roadway or barns, just paths, 
 muddy with every rain. 
 
 The inside corresponds to the out. 
 
 There are notable and conspicuous excep- 
 tions here and there — smart, attractive houses 
 that one would like to live in in summer and 
 winter but they are conspicuous because they 
 are so few. 
 
 This condition is not due to poverty but to 
 indifference. Many of the conditions could be 
 helped by just a little effort, and practically 
 no expense, and any^vay the average farmer 
 can afford what it would cost to keep his home 
 incomparably more attractive and livable. 
 
 The trouble is he has always lived in such 
 houses and gives the matter little or no 
 thought. Just as he allows expensive 
 machines to rust in fields and barnyards. 
 
 He will buy an automobile before he will fix 
 up his house. He can do both, and the man
 
 Luxuries 213 
 
 who has a nice attractive home is sure to have 
 an automobile and keep it clean and in work- 
 ing order at less expense than the man who 
 has a neglected home. 
 
 ♦ •!♦ ♦ 
 
 No theory of communism, no ntopia has ever 
 been suggested that did not contemplate the 
 creation of practically all the luxuries now 
 enjoyed by mankind, but the ownership was 
 to be in the public. 
 
 All the illusive attractiveness, all the iri- 
 descent hues of the communistic dream center 
 about the luxuries the community will create 
 and maintain for the enjojTnent of all. 
 
 But while the title to luxuries is to be in the 
 state rather than in the individual, individuals 
 — though appointed by the state — v/ill neces- 
 sarily have the care and custody, and control 
 of all luxuries, and they will necessarily be 
 housed and restricted very much as they are 
 now, not in privately owned buildings, but still 
 in buildings to Vv^hich only a limited number of 
 the entire population can have access.^ 
 
 * Conditions in Russia under the Bolsheviki are in point. 
 No end of money is spent to dazzle and amuse the masses
 
 214 Property 
 
 Suppose this country by a sudden revolu- 
 tion became, overnight, a pure conununism and 
 it were decreed that every private house and 
 building containing any luxury the people 
 should enjoy should be open to the public cer- 
 tain hours each day; at first the public might 
 rush to take advantage of the new privilege, 
 
 in the large cities. There is a Commissariat of Educa- 
 tion and Art, headed by Lunacharsky. An eyewitness 
 writes of what he does in Moscow — more than the Czar, 
 or old regime, ever did: 
 
 " In the realm of art, on the other hand, which is, or 
 should be, far removed from the torn and troubled region 
 of politics, Lunacharsky has initiated free entertainments, 
 theaters, operatic performances, and cinematographs for 
 the working classes and scholastic institutions. The the- 
 aters are thus kept thoroughly occupied. Very few new 
 works are performed, for the members of the theatrical 
 profession perform their duties very much like those other 
 members of the intelligentsia who contribute to the main- 
 tenance of the Bolshevik regime by working in govern- 
 ment institutions. They work automatically, by force of 
 inertia, and because they must be engaged in some oc- 
 cupation to earn a living. The repertoire, both of theater 
 and opera, consequently consists of the same old classical 
 rut of the last fifteen or twenty years. The few new 
 works which are produced are chiefly of a revolutionary, 
 and consequently propagandist character, and are per- 
 formed for this reason rather than for any intrinsic 
 value of their own. Among this number are some of 
 Lunacharsky's own plays. 
 
 " The Bolsheviki fully realize the value of the theater as 
 an instrument of propaganda to popularize their regime. 
 They keep the theaters open at all costs, and with this
 
 Luxuries 215 
 
 but after a time probably few more than now 
 would visit what bad been private collections. 
 The state would assume the care and expense 
 of them with little compensating advantage, 
 and in time the production of luxuries, of 
 ever5i:hing that tends to make life more beau- 
 end in view give very advantageous terms to the theatrical 
 personnel. The latter, besides being better paid, receive 
 larger food rations than the general population. Actors 
 and musicians are also exempted from military service 
 and these two factors serve to make this category of the 
 population readily submit to the Bolsheviki regime, which 
 thus affects them but slightly. 
 
 " The conservatoires continue to function, but the aboli- 
 tion of entrance examinations, all tests, the diploma, and, 
 indeed, of any educational norm, has sadly reduced the 
 standard of musical education in the conservatoires of 
 Petrograd and Moscow, which v/ere form.erly of such high 
 standing. The object of the changes is said to be to 
 proletarianize these institutions. Education in the con- 
 servatoires and universities is now universally free, as 
 was often the case under the old regime for indigent stu- 
 dents. Glazunoff is still director of the Petrograd Con- 
 servatoire, but is producing no new work. Composition, 
 except of topical revolutionary music, is at a standstill. 
 
 ** The administration of all m.usical affairs under the 
 Commissariat of Education and Art is in the hands of 
 Arthur Lourier, a pianist of extreme modern tendencies 
 who was unknown before the Bolshevik revolution. Luna- 
 charsky has repeatedly offered this post to the popular 
 musician and conductor, Alexander Siloti. I was unable 
 to meet Siloti in Petrograd, but I was told he has per- 
 sistently refused to accept any post under the Bolshevik 
 regime."
 
 216 Property 
 
 tiful, would fall off; the community would 
 
 become more and more dreary and monotonous. 
 
 ♦ ♦ ♦ 
 
 Again attention must be called to the fact 
 that however great the efforts of the com- 
 munistic state to enable all to enjoy equal 
 advantages, in the very nature of things all 
 could not. 
 
 If luxuries or advantages of any kind are 
 permitted they will be m^ore convenient for 
 some of the people than for others. 
 
 Natural and artificial advantages will enable 
 some to eat better, dress better, live better than 
 others. Unless we are to picture in our mind's 
 eye the people of the United States — for 
 instance — living in community buildings, every 
 one alike in size, comforts, conveniences; and 
 all eating practically similar meals; and all 
 dressing practically alike; and all having 
 the same luxuries such as they are; the 
 only alternative is to picture them very much 
 as they are now but with some of the inequal- 
 ities of the present softened. 
 
 The truth is every Utopian, every com- 
 munistic dreamer, has in mind cities, public
 
 Luxuries 217 
 
 buildings, houses, parks, improvements, etc., 
 etc., as they now are, only finer, but in some 
 mysterious way all the people are to have equal 
 enjojonent of and access to these advantages. 
 That is a physical, as well as a theoretical im- 
 possibility. 
 
 ♦ ♦ «> 
 
 To return to the main line of our argument 
 after this digression regarding luxuries gen- 
 erally. 
 
 The actual distribution of wealth is measured 
 by consumption — using the word in a large 
 sense, the sense of withdrawal of wealth for 
 personal support and gratification. 
 
 The actual appropriation of wealth to the 
 exclusion of others begins with (1) the food 
 we eat; (2) the clotlies we wear; (3) the houses 
 we live in. 
 
 To these three prime necessities must be 
 added (4) the luxuries we indulge in. 
 Luxuries enter into each of the three first items 
 and also constitute a class by themselves. 
 
 Only savages far down in the scale of devel- 
 opment eat only the raw foods nature pro- 
 vides, or wear only such coverings as are
 
 218 Property 
 
 absolutely essential to preserve life, or live in 
 caves and Avoods with no attempts at adapta- 
 tion for comfort or adornment for pleasure. 
 
 In fact no such primitive savages are knoA\Ti. 
 The most degraded prepare their food, cover- 
 ings, and shelters with the exi3enditure of con- 
 siderable labor for physical, religious, cere- 
 monial gratifications, and all such gratifica- 
 tions partake of the nature of luxuries, in pre- 
 cisely the sense a banquet or a cathedral is a 
 luxury. 
 
 It is impossible to probe the term " luxury '* 
 without seeing how closely it is allied to the 
 term "necessity." To a profoundly religious 
 people a church or a cathedral is the most 
 necessary thing they know, essential to their 
 spiritual life on earth and their eternal salva- 
 tion. To a profoundly ceremonial people robes 
 of state, a crown, a throne, a palace are neces- 
 sary to their national existence, they are sym- 
 bols of authority, of the state itself, just as 
 the elaborate paraphernalia of Freemasonry 
 are essential to its activities. 
 ♦ ♦ ♦ 
 
 As regards food the inequalities are not and
 
 Luxuries 219 
 
 cannot be very great between man and man, 
 even though one man drinks only water and 
 another drinks the most expensive wines, one 
 eats very plain food and another very rich. 
 
 Those inequalities in actual consumption 
 trouble very few — except the individuals 
 themselves who eat and drink too much. 
 
 As a matter of fact most millionaires live 
 rather simply. Experience teaches them that 
 they work best on simple foods and no stimu- 
 lants. 
 
 However excesses in eating and drinking are 
 fairly well distributed through all classes, from 
 the humblest wage-earner to the capitalist. 
 One of the greatest sinners in extravagant eat- 
 ing and drinking is the public itself in its pub- 
 lic banquets and entertainments. 
 
 The point is, that whatever these excesses 
 may be in the consumption of food they are 
 not of revolutionary or even disquieting mag- 
 nitude. 
 
 ♦I* **♦ *♦♦ 
 
 As regards the second item clothes, in- 
 equalities in actual consumption are greater, 
 for the simple reasons that clothes can be kept
 
 220 Property 
 
 longer than food and tliey lend themselves bet- 
 ter to display. 
 
 Here again the greatest inequalities in 
 clothes and personal adornment are found in 
 community-oivned uniforms, and robes and cos- 
 tumes for public and ceremonial occasions. 
 
 Individuals, especially women, may have far 
 more clothes than they need or can use, and 
 in this respect the inequalities are marked, but 
 still so insignificant as to occasion little dis- 
 content. The conmiunist is against the mil- 
 lionaire on account of his nominal, his paper 
 wealth not because he has twenty suits of 
 clothes. 
 
 On the contrary the people, the masses, like 
 to see men, and more particularly women, 
 attractively dressed, just as they like to gaze 
 in shop windows and watch parades and 
 spectacles. There may be a good deal of envy 
 in the breasts of some individuals, but even that 
 envy has its origin in the desire to be in- 
 dividually as gorgeously clothed, and not at 
 all in a desire that the entire community dress 
 alike on one dead level like Quakers, nuns, and 
 priests. And in a sense it is this very envy
 
 Luxuries 221 
 
 that spurs the envious person to greater e:fforts 
 so he or she may dress as iineiy. 
 
 ♦ ♦ ♦ 
 
 Much of what has been said regarding 
 clothes, might be repeated with equal force 
 regarding the third item, homes. 
 
 Homes are more perm^anent than clothes. 
 Being more permanent and not being limited 
 to the small dimensions of the human frame, 
 much greater opportunity is afforded for ex- 
 penditure of wealth to gratify our tastes and 
 fancies. 
 
 More money can be spent on an estate than 
 on a suit of clothes, hence the obvious in- 
 equalities in homes are greater than the 
 inequalities in what we wear. 
 
 But again these inequalities are most con- 
 spicuous in community owned grounds and 
 buildings, and they would become accentuated 
 in a pure communism. It is a part — and a 
 most essential part — of the dream of the 
 thorough-going communist that as the in- 
 dividual is deprived of the opportunity to 
 spend for luxuries beyond the reach of all, the
 
 si 
 
 222 Property 
 
 state will more than supply things artistic and 
 beautiful, it will so far outdo the millionaire 
 that the masses will be dazzled by the glory. 
 If conmiunism does not hold out that promise, 
 it holds out nothing. / 
 
 No theory of social betterment contemplates 
 the abolition of luxurious homes and estates, 
 but in some way the state is to " o\vn ' ' and 
 control them. But if the state builds all 
 houses, all buildings, one thing is certain, the 
 world will lose those infinite variations in style 
 and structure due to individual preferences 
 and taste — or lack of taste. 
 
 So long as it is conceded that portions of 
 the wealth of the community must be with- 
 drawn, from materially productive use and 
 devoted to houses, factories, hotels, office 
 buildings, etc., etc., may it not be better for 
 the community not only to permit, but encour- 
 age the individual to make the experiments ? 
 
 The rich man who builds a home on Fifth 
 Avenue and furnishes it at the cost of a mil- 
 lion dollars, or who develops a vast estate in 
 the country like a great park, at the cost of 
 several millions cannot take either with him
 
 Luxuries 223 
 
 when he dies. If a Mr. Carnegie or a Mr. 
 Frick has simply dra^\^l from the U. S. Steel 
 Corporation funds enongh to do these things 
 — in a sense he has directed the corporation to 
 do it — in a still profounder sense, by reason 
 of his paper title to wealth he has compelled 
 the community to do it. 
 
 The prime object, let ns assume, is selfish, 
 the house is built, the estate developed for per- 
 sonal gratification, and it all seems like a 
 luxury — one part home, nine parts luxury. 
 
 But there can be no personal gratification 
 without the cooperation of the public. There 
 must be a public to see, praise, and enjoy, else 
 the house would not have been built. Even if 
 the prime motive is to outdo the house next 
 door, the idea is to outdo it in the estimation 
 of the public. 
 
 Imagine how we would dress, and the places 
 we would live in, if we knew no living soul 
 would ever see us. 
 
 The broad question for the communist and 
 social reformer to consider dispassionately is 
 whether the community would in the long run 
 give the public as great variety and perfection
 
 224) Propc7'ty 
 
 in homes, buildings, estates, as is enjoyed 
 under so-called private ownership. 
 
 No one can answer that question definitely 
 or authoritatively, and the debate resolves 
 itself into a matter of personal feelings and 
 preferences. My owtl conviction is that, not- 
 withstanding all the waste undeniably inci- 
 dental to the present system, it is better than 
 community control and initiative would be. It 
 is my conviction that community enterprise 
 would be attended with more waste, extrava- 
 gance, and failures, than individual. 
 »> ♦ ♦ 
 
 The rich man fills his home with beautiful 
 things — or things he thinks beautiful — appar- 
 ently to enjoy them himself, but not so. Every 
 rug, every piece of furniture, every picture, is 
 bought to he seen by others, and this motive 
 is often so conspicuous a man is accused of be- 
 ing ostentatious. 
 
 The net result of the building of the home 
 is first of all the encouragement of architec- 
 ture and builders; then the encouragement of 
 decorators, craftsmen, and artists ; thirdly the 
 stimulation of guests and visitors.
 
 Luxuries 225 
 
 The particular house may have failed in 
 every respect save that of pleasing an owner 
 who was without taste or discrimination; it 
 may be an *' eyesore " on the street, but it must 
 ever be borne in mind that without these ex- 
 periments public taste and appreciation would 
 never advance. Under an absolute com- 
 munism the experiments would have to be 
 made unless the conununity was prepared to 
 sink to a most deadly monotony in clothes, 
 homes, buildings, life. 
 
 In Athens and Rome the public buildings 
 were conspicuously successful, but so were the 
 private buildings in a more modest way. 
 
 In other countries where despotic rulers 
 could impose their taste on the public the 
 temples and buildings were great monuments. 
 
 But generally speaking the attractiveness of 
 a city or a country depends upon the oppor- 
 tunity for private initiative and originality. 
 
 The cities of the world have been built in 
 the main by the individual, now and then, here 
 and there, ornamented, crowned, by the expen- 
 ditures of the community, or some large sec- 
 tion of the community such as a religious body.
 
 226 Property 
 
 The cities of America are as they are, beau- 
 tiful or otherwise in effect, as the result of 
 individual initiative and effort. 
 
 Unless the people as a whole are prepared 
 to take from individuals all control over 
 clothing, building, furnishings, then the present 
 system must continue. 
 
 Imagine the appearance of the streets in any 
 town or city if the community, as a commu- 
 nity proposition, laid out the streets and built 
 all the buildings ! 
 
 The community could not justify the 
 elaborating of one street, or block, or tene- 
 ment, as compared with others. Why should 
 a home on Fifth Avenue be any larger or better 
 than a home on Second? 
 
 AVhy should one house have any more bath- 
 rooms or conveniences than another housing 
 the same number? 
 
 Why should brick, stone, or marble ever be 
 used if the cheapest and average material is 
 cement ? 
 
 Why should any family be permitted a rug 
 or a carpet unless all can have the same? 
 
 "W^y should any man be given a picture or
 
 Luxuries 22T 
 
 a piece of sculpture or a piano or a lot of 
 books unless all can have the same, or the 
 equivalent — and what official board could de- 
 termine the equivalence between a painting and 
 a piano 1 
 
 And if in some way a city with fairly good 
 buildings did spring up as the capital of the 
 community, or about a seaport, what right 
 would the community have to say to the 
 farmer, the coal miner, and others outside the 
 city, they must forever remain outside and be 
 deprived all their lives of the pleasures, com- 
 forts, and advantages of the city? 
 
 And the instant any superior right to 
 pleasanter surroundings is recognized in one 
 man or class, that moment distinctions are cre- 
 ated that are precisely akin to those occasioned 
 by the recognition of property rights. 
 
 The moment the community gives the dwel- 
 ler in the city a right to keep his dwelling for 
 a day, a year, or for lifetime — the length of 
 time matters not — as against all other men 
 either in or out of the city, at that moment a 
 private right is created which is, in effect, a 
 property right.
 
 228 Property ^^ 
 
 It is impossible to conceive a community, 
 however Utopian, that would not necessarily 
 assert and protect the rights of individuals to 
 the food they must eat, the clothes they are 
 required to wear, and the houses they occupy 
 even though temporarily. And all such rights 
 would be essentially property rights. 
 
 The community might ** owti " every build- 
 ing, but when it authorizes certain individuals 
 or families to occupy certain buildings to the 
 exclusion of others, for the time being those 
 individuals or families in reality own that 
 building, as absolutely as under existing pri- 
 vate ownership, and the police and tribunals of 
 the community would take the same steps to 
 protect the control and possession. 
 
 So that the abolition of real private owner- 
 ship as distinguished from nominal is incon- 
 ceivable in any communitj^ And the practical 
 questions are the extent and character of the 
 ownership that will best promote community 
 welfare. 
 
 ♦ * ♦ 
 
 One man may be *' rich " in luxuries, an- 
 other **poor" but the distinction is less one
 
 Luxuries 229 
 
 of ownership tlian of actual control. 
 
 It is a matter of indifference, not wholly, 
 but practically, to the public, whether a picture 
 gallery is ' ' owned ' ' by the city or by a cor- 
 poration organized to maintain the gallery (the 
 situation in most American cities with art col- 
 lections) or by an individual so long as the 
 public has the same freedom to visit. In no 
 case would the public have entire freedom to 
 do as it pleased. / 
 
 But it is rare the public can visit a private 
 collection as often as it can a public, or quasi- 
 public, hence the prejudice — such as it may be 
 — against private 0A\Tiership of luxuries. 
 
 The question, however, is again one of ex- 
 pediency, of incentive. 
 
 Does the community, the world, gain more 
 in the long run by not only permitting, but 
 encouraging this "private ownership" even 
 to the point of permitting by law the selfish 
 exclusion of the public? 
 
 The instinct of ownership, of exclusive con- 
 trol is so strong that man will make great sac-
 
 S30 Property 
 
 rifices to gather and control works and 
 products of all kinds. Human effort in any 
 line is powerfully stimulated by this demand 
 from competing individuals. 
 
 The undeniable fact that unintelligent de- 
 mand leads to the production of many ugly 
 things and to useless, idle, vicious efforts, may 
 call for close scrutiny and revision of laws 
 which may permit too great latitude, but does 
 not necessarily condemn the entire system of 
 private ownership of luxuries and luxury 
 effects. 
 
 ♦ ««» * 
 
 The late Henry C. Frick is a case in point. 
 
 He planned and built his home on Fifth 
 Avenue to leave to the public as a museum. 
 
 Measured by the cost in dollars and cents 
 the house and all its contents were luxuries to 
 him while he lived and owned them. 
 
 Under his will they pass eventually to the 
 public. Do they cease to be luxuries the in- 
 stant they pass to the public? 
 
 Reduce the question to a concrete example. 
 He paid five liundred thousand dollars for a
 
 Luxuries 231 
 
 painting by Eembrandt — a luxury by every 
 known definition of the term. 
 
 The painting passes to the public. Does it 
 cease to be a luxury, and if so how and why? 
 
 The time and labor devoted by Eembrandt 
 to the painting of the picture were and ever 
 remain a fixed quantity. Was the painting a 
 luxury to the community Eembrandt worked 
 in? 
 
 Every communistic, socialistic, and Utopian 
 dream tries to provide for the production of 
 works of art as essential to the happiness and 
 advancement of mankind, more essential in 
 a sense than wheat or corn. 
 
 Without the development of literature, 
 music, painting, sculpture, architecture — the 
 adornments and graces of life, life would re- 
 main in primitive barbarism. 
 
 Hence it is conceded there are more and 
 greater necessities than bare food, clothing, 
 and shelter — those are the least of man's 
 necessities. 
 
 ♦»♦ ♦•♦ ♦♦♦ 
 
 It may seem like the wildest extravagance 
 to pay five hundred thousand dollars for a
 
 232 Property 
 
 painting/ but so far as the world is concerned 
 it is merely the shifting of that much wealth 
 from one country or place to another in return 
 for the painting. 
 
 Both Frick and Carnegie lived on Fifth 
 Avenue. If Mr. Frick had bought the paint- 
 ing of Mr. Carnegie, the sum total of the wealth 
 of the country would not have been altered one 
 iota. The effect would have been the same as 
 if Mr. Frick had made Mr. Carnegie a present 
 of five hundred thousand dollars in money or 
 in the stock or bonds of the Steel Corporation. 
 The transfer of the painting from the Carnegie 
 home to Mr. Frick 's would have amounted to 
 no more than the passing of a paper receipt 
 for the money. 
 
 If the painting is bought in England the 
 effect is materially different. Five hundred 
 thousand dollars of American products must 
 
 ^In the opinion of the writer it is, because it is simply 
 the bidding of rich men for an object that cannot be 
 duplicated, and the price has no relation to the aesthetic 
 value of the object but it is determined wholly by the size 
 of private fortunes at the time. As good and better 
 pictures can be bought for a thousand dollars if buyers 
 will seek out the living Rembrandts who are struggling as 
 he did for recognition.
 
 Luxuries 233 
 
 ultimately go to England in return for the 
 painting. The sum total of the world's wealth 
 is not increased or diminished ; that could only 
 be done if we had commercial relations with 
 Mars and could send a half million dollars 
 worth of products to Mars in exchange for a 
 painting. 
 
 ♦ ♦ ♦ 
 
 It may be argued v/ith a strong show of rea- 
 son that for Americans — which really means 
 America — to pay high prices in American ex- 
 ports to other countries for works of art in 
 those countries, is indulging in useless extrava- 
 gance, in luxuries, that cannot be justified. 
 
 Why send to England five hundred thousand 
 bushels of American wheat to pay for a paint- 
 ing that is just as well off in England? Why 
 take it from the people of England? 
 
 A reasonable distribution of the beautiful 
 things of the world is a good thing for mankind. 
 It is a good thing for the Western World to 
 have examples of the art of the East, just as 
 it is important for the Western World to know 
 something of the literature of the East. 
 
 Hence it follows it is a good thing for every
 
 234 Property 
 
 country to exchange some of its material 
 products for some of the art works of other 
 countries. America can well afford to export 
 some of its wheat, corn, iron, steel, for beau- 
 tiful things produced in Europe and Asia; it 
 is the quickest way for us to progress intel- 
 lectually and aesthetically — to catch up — so 
 to speak — with older peoples, to accomplish in 
 a generation what would otherwise take 
 centuries to achieve — to go on from where 
 they left off. 
 
 ♦ ♦ ♦ 
 
 If it be conceded that it is a good thing for 
 this country to export some of its material 
 wealth for works of art, it matters little, in 
 one sense, whether that exchange is made by 
 individuals or by states. 
 
 The advantages on the side of the individual 
 are his initiative and willingness to back his 
 judgment and take risks — the personal equa- 
 tion. The state — like governing bodies of art 
 museums — is a slow, conservative buyer, buy- 
 ing only when artists have " arrived." 
 
 The individual takes chances, supports the 
 unknown, the radical, the struggling artist,
 
 Luxuries 236 
 
 often when art critics and the entire academic 
 and official world laugh and ridicule. 
 
 The disadvantage with individual buying lies 
 in his reckless bidding up of prices and his in- 
 satiable desire to " owoi " for the time being 
 a work of art that other men of wealth and 
 national collections covet. Against such com- 
 petition the rich individual bids a half million 
 or more for a painting that may have been 
 sold by the artist for the equivalent of twenty- 
 five dollars. 
 
 ♦ ♦ ♦ 
 
 If deemed desirable this reckless bidding for 
 works of art could be checked and controlled 
 eitker by direct prohibition or by prohibitive 
 taxes. 
 
 ♦I* ♦!♦ ♦!♦ 
 
 But if all luxuries were kept do^vn in price 
 to a level where they ceased to shock and amaze 
 as extravagances, the problem of "luxuries," 
 as such, would not be solved, for nearly all 
 so-called luxuries are incentives. 
 ♦j» ♦ ♦ 
 
 The pernicious side of extravagance is not 
 its cost in time, labor, money, or resources, but
 
 236 Property 
 
 its example. It accentuates and magnifies the 
 gulf that divides the masses who cannot afford 
 those things from the individual who can. 
 
 Furthermore, as our argument has demon- 
 strated, when an individual spends ten thou- 
 sand dollars on an evening's entertainment, he 
 is nominally spending "his own money;" in 
 reality he is taking that much from productive 
 enterprises and spending it in a few hours on 
 entertainment that may be worse than unpro- 
 ductive-— vicious; or it may he so beautifully 
 and finely done that the community may derive 
 a pleasure and profit. 
 
 The number of wholly vicious extravagances 
 are comparatively few — so few they are 
 startlingly conspicuous even in our largest 
 cities. Outside of our largest cities there is 
 almost none. 
 
 ♦ ♦ ♦ 
 
 Let us approach Luxuries at another angle. 
 
 So far we have considered them almost en- 
 tirely from the standpoint of the individual 
 possessing or enjojdng them. Let us view 
 them from the standpoint of the community — 
 the state, the nation, the entire civilized world,
 
 Luxuries 237 
 
 it matters not, the same considerations apply. 
 But for the sake of clarity keep in mind some 
 one nation — say these United States of ours. 
 
 *•* *** ^2* 
 
 Men cannot live without 
 
 1. Food 
 
 2. Clothing 
 
 3. Shelter 
 
 To these three prime essentials may be 
 added very appropriately, 
 
 4. Amusements 
 
 Any one of these four essentials of life may 
 be either a necessity- or a luxury, and it is 
 obvious that the distinction does not lie in the 
 thing itself. 
 
 If every member of the community has, or 
 can have a woolen suit or a sealskin coat, then 
 woolen suits and sealskin coats are not 
 luxuries. But if only a few of those who want 
 sealskin coats can have them then they are 
 luxuries enjoyed by the few "who have the 
 money or power to secure them. 
 *> ♦ * 
 
 If every member of the community who 
 wants it can have champagne, then champagne
 
 238 Property 
 
 is not a luxury. But if only a few have the 
 means, power, or opportunity to secure it then 
 it is a luxury. 
 
 If all members of the community have pre- 
 cisely equal opportunity to enjoy a particular 
 fine musician, theater, actor, singer, then that 
 form of amusement is not a luxury to any soul 
 in the community; it is a pleasure equally ac- 
 cessible to all, no one pays or gives anything 
 for any special privilege. 
 
 If all members of the community have equal 
 opportunity to enjoy a particular park, 
 museum, or public building of any kind, then 
 such place is not a luxury, it is part of the 
 daily life and pleasure of all. But if only a 
 few can enjoy it freely and others are obliged 
 to pay, or sacrifice time and money in travel 
 to enjoy it, then as to them it is a luxury main- 
 tained for the benefit of the few in tke vicinity. 
 ♦ ♦ ♦ 
 
 In short the definition of ' ' Iuxubj ' ' turns 
 less upon the nature of the thing itself than 
 upon the opportunities of all to use or enjoy it. 
 
 A man or a class may be so accustomed to 
 certain foods, clothing, shelter, amusements,
 
 Luxuries 239 
 
 that they consider them necessary to their 
 existence, but to the masses who cannot afford 
 them they are in the truest sense of the term, 
 luxuries — luxuries to be enjoyed either rarely 
 or never at all. 
 
 Pursuing this line of reasoning to its logical 
 conclusion, it follows that if a community 
 would get rid of luxuries it must direct its pro- 
 ductive and distributive efforts in such a way 
 that ALL 
 
 Food 
 
 Clothing 
 
 Shelter 
 
 Amusements ; 
 
 shall be equally accessible to ALL. 
 
 No individual must have any form of food, 
 clothing, shelter, amusement, that is not 
 equally available to every other individual. 
 The nation, the state, the city must build noth- 
 ing, support nothing that gives any particular 
 locality any greater attraction or desirability 
 over other localities. The location of the 
 capitol, the maintenance of a university, or a 
 trade school, the support of a museum in a par- 
 ticular city is a direct discrimination against
 
 240 Property 
 
 other cities, a direct conferring of advantages 
 on a selected spot, in short the giving to the 
 people of the vicinity a very great luxury. 
 
 The extension of a railway to a particular 
 place is a great discrimination in favor of that 
 place. The establishing of a nation-owned 
 industry in a particular locality is likewise a 
 discrimination in favor of that locality. The 
 location of a government building, a post office 
 in a particular block in a city is a discrimina- 
 tion in favor of those in the immediate vicin- 
 ity, and against those who have to spend time 
 and money to use the building. 
 *s* ^ ^ 
 
 To eliminate — theoretically — all luxuries, 
 we are forced to the conclusion that a tlieoreti- 
 cally pure communism which demands absolute 
 equality of enjoyment and opportunity, would 
 be obliged to forbid the production of any kind 
 of food, clothing, shelter, amusements, that can- 
 not be enjoyed by all on a footing of equality. 
 
 If even the slightest departure from this rule 
 is conceded luxuries appear and inequality re- 
 sults. 
 
 Consider for a moment what this rigid
 
 Luxuries S41 
 
 elimination of luxuries would do in — let us say 
 — so productive a country as ours. 
 
 It would take out of the market all those 
 food-products the production of which is in- 
 sufficient to supply the desires of all. All 
 clothing materials, forms and styles, would be 
 reduced to such as all could have. Forms and 
 styles of shelter would be restricted to such 
 as all could enjoy on conditions of absolute 
 equality. Likewise all forms of recreation and 
 amusements. Neither an orchestra nor a base- 
 ball nine could be supported out of community 
 funds because only a few would be able to 
 enjoy either — even though the attempt were 
 made to give any locality of any size its own 
 orchestra and its own nine. The very attempt 
 to segregate and support a large body of 
 musicians and ball players would make of them 
 a privileged class, and would arouse envy and 
 discontent. Musicians and would-be ball play- 
 ers barred from the state organizations would 
 complain bitterly. 
 
 ♦ ♦ ♦ 
 
 But, assuming for the moment, a productive 
 country like the United States, manages to get
 
 S42 Property 
 
 its production and distribution on a tJieoreti- 
 • cally pure communistic basis, so that no forms 
 of food, clothing, shelter, amusements, are pro- 
 duced that are not equally open to all, the re- 
 sults would be a certain even standard of en- 
 joyment in all four essentials. This ideal — 
 theoretical — includes, possibly, white or wheat 
 bread for all — though by no means in un- 
 limited quantities. 
 
 Now, how about the countries of the world 
 where white bread is a luxury? 
 
 How about Mexico, for instance, and the 
 peoples of Central and South America? 
 
 If they are included in one theoretically pure 
 communistic scheme of production and distri- 
 bution, the standard of living in this country 
 would be lowered materially. If the peoples of 
 Japan and China are included the standard 
 would take a drop below that of the poorest 
 families in this country. 
 
 <» ♦ <> 
 
 The glamour of the ideal communism disap- 
 pears when the communistic distribution of 
 goods is made to include foreign and poorer 
 peoples. In fact on this test the communistic
 
 Luxuries 245 
 
 fabric, so fascinating when its vague and glit- 
 tering fancies are confined to us, collapses. It 
 cannot stand the test of thorough-going logical 
 application; at heart it is as supremely selfish 
 as any individualistic scheme. 
 
 « «> 4» 
 
 The net result of the foregoing is the con- 
 clusion that luxuries are inevitable in human 
 progress. This is conceded by every utopian 
 dreamer. In fact utopian writers and dream- 
 ers dwell almost entirely upon the pleasures of 
 their Utopias, upon the leisurely lives of their 
 people, and upon the beautiful things all will 
 enjoy. Instead of levelling palaces in some 
 way they are to be made more numerous and 
 more wonderful by the community itself. 
 
 But no Utopian theorist or communistic 
 writer gets down to hard facts, to details and 
 demonstrates how all this can be done without 
 favoring some as against others; they slur 
 this part of their argument 
 «s» ♦ ♦ 
 
 If luxuries are not only incidental but essen- 
 tial to human progress, then it is a fairly debat- 
 able question whether the present individual —
 
 244 Property 
 
 competitive one might say — scheme of pro- 
 duction and distribution does not achieve bet- 
 ter results than any communistic plan, and 
 until the communistic plan gets down to detail 
 and shows how luxuries can be produced and 
 distributed fairly and satisfactorily by the 
 community, the world must be content with the 
 present competitive organization, hut with such 
 modifications and improvements as will dull 
 the sharp corners and smooth the rough places.
 
 XI 
 
 A LOGICAL CONSEQUENCE 
 
 Who Pays Taxes? 
 
 Not only the average man, but speakers and 
 writers upon taxation, assume that the burden 
 of taxation rests on the shoulders of the man 
 who pays the taxes. 
 
 The assumption is false and mischievous be- 
 yond calculation. It is at the basis of more 
 radical and vicious social and economic experi- 
 ments and propaganda than almost any other 
 erroneous economic theory. 
 ♦ ♦ « 
 
 Taxes are paid, 
 
 A. By check 
 
 B. By paper currency 
 
 C. By coin 
 
 D. In produce or goods — very rarely 
 in highly civilized communities. 
 
 But while in advanced communities taxes are 
 seldom paid directly in goods or produce, it is 
 plain on final analysis, that all taxes are paid 
 in services, produce, and goods. 
 
 245
 
 246 Property 
 
 The use of money, or a check, is a mere con- 
 venience — a token handed the government to 
 enable the government to go out and get the 
 
 services and products it needs. 
 
 ♦ ♦ ♦ 
 
 Whether the government issues a billion dol- 
 lars in bonds (or any other form of paper 
 promises to pay), or a billion dollars in paper 
 tax receipts (still paper, but not promises to 
 repay) the result as regards consumption of 
 services and goods is precisely the same. 
 
 Both bonds and tax receipts are issued to 
 buy services and goods needed noiv. 
 
 So far as the industrial economy of the 
 country is concerned for both classes of paper 
 it is called upon to furnish within the fiscal 
 year services and products to the value of, say 
 
 one billion dollars. 
 
 ♦ ♦ ♦ 
 
 It is a popular notion — fallacious — that the 
 issuing of bonds instead of a tax levy, some- 
 how shifts both the financial and industrial 
 burden to future generations. 
 
 The economic burden cannot he shifted. 
 
 If the government needs a million bushels of
 
 A Logical Consequence 247 
 
 wheat or a million yards of cloth the supply 
 must he drawn from the wheat and cloth of 
 today; there is no magic whereby it can be 
 drawn from that of a year hence. 
 
 If the government needs a million men for 
 its armies they must be drawn from the men 
 of today, and be equipped, supported, and paid 
 by the services and products of today. 
 
 During the World War the several nations 
 issued thousands of tons of paper — paper 
 money, paper bonds, paper promises to pay 
 in many forms. These paper promises and re- 
 ceipts amounted to not simply billions, but 
 hundreds of billions of dollars. 
 
 But did all this paper shift the burden of the 
 war from the men and women of today to 
 future generations ? 
 
 Not a single penny's worth.* 
 
 ^ Except in so far as one country gave its bonds or 
 other promises to pay to another country in return for 
 goods. To that extent one country may receive now the 
 goods it needs today in return for the paper promise to 
 return those goods or their equivalent — twenty or thirty 
 years hence. For the purpose of our argument interna- 
 tional borrowing may be ignored. In immediate economic 
 effect it simply induces the other nation — neutral or allied 
 — to carry a share of the daily war burden, and for the 
 time being the neutral nation is in reality an ally to the
 
 248 Property 
 
 It was the boast of our government that 
 nearly one-third of every dollar spent on the 
 war was raised by taxes, and only about two- 
 thirds by borrowing. 
 
 That fooled not only the people but financiers 
 and writers. 
 
 As a matter of fact every cent of every 
 dollar needed came from the people each year. 
 
 The government required in services and 
 goods, let us say, twenty-four billions of dol- 
 lars the last year of the war. 
 
 To get the twenty-four billions it issued 
 eight billions paper tax receipts and sixteen 
 billions paper bonds. 
 
 In a profound sense the printing of these 
 cleverly worded pieces of paper and giving 
 
 /them to the people in return for services and 
 goods, is a mere juggling with hard facts, so 
 that the truth may be concealed. 
 Every cent's worth of the twenty-four bil- 
 
 extent it furnishes services and goods in return for paper 
 promises to pay — promises that may not be kept, depend- 
 ing upon the outcome of the war. Industrially and eco- 
 nomically the people of the United States were the allies 
 of the Allies from the outset of hostilities in 1914, as they 
 would have been economic supporters of Germany if the 
 channels of trade had been open.
 
 A Logical Consequence 249 
 
 lions of services (men in service and all em- 
 ployees), and goods, is supplied by the men, 
 women, and children of today, and supplied 
 from day to day as needed. 
 
 If a government had the wisdom and the 
 strength not a single bond or other promise to 
 pay need be issued to carry on any war — only 
 paper tax receipts. 
 
 But financing a war, or any other large gov- 
 ernment need, is a fine art, a species of legerde- 
 main, whereby billions of paper values are cre- 
 ated to be juggled with for years and perhaps 
 generations to come. 
 
 Psychologically this legerdemain may be 
 necessary. Without it the people might real- 
 ize just where the burdens of vast expenditures 
 fall, and they might rebel. 
 
 The average man is quick to vote for a bond 
 issue when he w^ould violently protest if it 
 should be proposed to increase taxes to secure 
 the money. 
 
 Yet in the end the money and all the cost of 
 borrowing must be covered hy taxes. 
 
 ♦ ♦ ♦!♦ 
 
 It matters not how the problem is ap-
 
 250 Property 
 
 proaclied the fact remains that every dollar 
 collected by the government, whether by issu- 
 ing paper tax receipts, or paper promises to re- 
 pay, comes from the community in the form 
 of services and goods. 
 
 This being so it follows that the man who 
 (a) pays the taxes, or (b) loans the money, 
 is only a means to an end. He does not in 
 reality render the government either services 
 or goods except his small share as an individual 
 like other individuals similarly situated. 
 
 To illustrate, a doctor in practice, happens 
 to be a ''rich" man. He has a million dol- 
 lars in bonds which yield him an income of 
 thirty thousand a year. As he earns from his 
 practice more than he spends, he invests each 
 year his entire thirty thousand in other bonds — 
 i. e., loans it and receives more pieces of paper. 
 
 The government in a war or other emer- 
 gency sees fit to levy a tax taking all unearned 
 incomes. 
 
 The doctor no longer receives his thirty 
 thousand a year in interest coupons ; or rather 
 he cuts tliem from his bonds and immediately 
 turns them over to the government; in effect
 
 A Logical Consequence 251 
 
 the goveriiment lias appropriated the interest 
 on the bonds. If the doctor held any railroad 
 bonds the railroad would go on paying the 
 interest just the same but to the government 
 instead of to the doctor; the railroad would 
 not know the difference. 
 
 Has the government in reality taxed the 
 doctor? Has it called upon him for either 
 goods or services? 
 
 Not at all. His daily work is not affected 
 in the slightest degree — save as discontent 
 may affect it. His professional income re- 
 mains the same. 
 
 Not until one of two things happens is he 
 really taxed — i. e., called upon to contribute 
 goods or services. 
 
 If the government calls upon him for (a) 
 actual services, as it did during the war, or 
 (b) takes from him a part of his professional 
 earnings, as it now does under the income tax, 
 then he is in reality contributing services and 
 goods, and either contribution may seriously 
 affect his productive power, in short his eco- 
 nomic value as a productive factor in the com- 
 munity.
 
 252 Property 
 
 A farmer may be substituted for a doctor 
 and the argument made still more vivid. 
 
 ♦ ♦ ♦ 
 
 f Let us assume the government decides on a 
 
 capital tax levy. To illustrate lei us assume 
 
 it confiscates in form of taxation, all ** private 
 
 fortunes." Who pays the tax? 
 
 Nominally the individual who has a thousand 
 bonds in his safety-deposit box, but as a mat- 
 ter of fact he has simply handed to the tax 
 collector a thousand pieces of paper, and the 
 government takes those pieces of paper and 
 goes to the railroad and industrial companies 
 that issued them and demands payment of 
 either interest or principal. 
 
 The entire economic and industrial fabric 
 of the community is disturbed by the shifting 
 of paper titles, because the government is never 
 thrifty, it always wants its money, and always 
 spends it wastefully. Never, like the hypo- 
 thetical doctor, does it carefully invest the in- 
 terest and reinvest the principal. 
 ♦ ♦ ♦ 
 
 To the socialist, the communist, and to the 
 radical agitator generally the proposition to
 
 A Logical Consequence 253 
 
 confiscate private fortunes — private property 
 — sounds good, and is received with applause. 
 
 Men of that class never pause to think far 
 enough to see that the ''private fortune" is 
 largely a myth, a legal fiction, maintained not 
 for the benefit of the individual, but as a de- 
 vice for the advancement of the community. 
 
 If this ingenious fiction in its many ramifica- 
 tions is unsound then plainly it would be bet- 
 ter to modify or abolish it directly than to en- 
 courage it and at the same time abolish it by 
 confiscation in whole or in part. 
 
 On the other hand if the legal fiction of 
 ''private property" is an indispensable factor 
 in social progress then society should be ex- 
 ceedingly careful about attacking it indirectly 
 by taxes which confiscate — abolish — in whole 
 or part. 
 
 * ♦ ♦ 
 
 In a profound sense a tax on unearned in- 
 come is not a tax on the individual at all, but 
 is rather a deprivation — a cancellation of 
 ''property rights," a modification of the the- 
 ory of private property. 
 
 A tax on earned income is a tax on the in-
 
 ^54 Property 
 
 dividual — a real demand for a portion of his 
 services or the products of his services. 
 
 The arguments for and against the one have 
 no logical connection with the arguments for 
 and against the other.
 
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