PEACE 
 AND PROSPERITY 
 
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PEACE 
 AND PROSPERITY 
 
 VIA 
 
 Justice and Practical Sense 
 
 "The square deal." Roosevelt. 
 "Honesty is the best policy." Franklin. 
 "Godliness is profitable." Bible. 
 "Who would be free, himself must strike the blow." 
 "Speech without action is a moral dearth, and to 
 advance the world is little worth." See "P. S." 
 
 Copyright, 
 
 JOHN B. ALDEN, Publisher, 
 
 NESHANIC, N. J. 
 
PREFATORY 
 
 Most of the important problems of statesmanship are 
 simple ones, readily understood by any man of ordinary 
 intelligence; and right action, and wise action, "boiled 
 down," are matters of simple right and justice, and of 
 common sense directness to the end aimed at. 
 
 Of the world's economic problems two of the most 
 vital, far reaching far and big almost beyond imagina- 
 tion are finance and transportation. 
 
 This little book deals in outline, only, with transporta- 
 tion, but the just and "sense" foundation is clear; the 
 superstructure can be comparatively simple; the "Men 
 Who Pay the Freight," and the "Labor" that will do the 
 work, will "automatically," given opportunity, work out 
 the details. 
 
 The financial problem is dealt with more at length. 
 Most, if not all, that is essential is easily within the com- 
 prehension of almost anyone who will give the matter 
 study. 
 
 The right solution of these problems means freedom, 
 prosperity, culture, the essentials of "wealth" for the 
 masses. 
 
 The wrong solution means commercial antagonism, 
 never-ending economic war, ''chains and slavery" (sub- 
 tile, but binding, killing, as the web of the spider to the 
 fly) for the millions means luxury, enervating, demora- 
 lizing, corrupting, boundless wealth for the few. 
 
 J. B. A. 
 
 NESHANIC, N. J., 1919. 
 
CONTENTS 
 
 PAGE 
 
 Transportation: National Ownership; Private Op- 
 eration 5 
 
 Will the U. S. Automatic R.R. Regulator Work?. . 12 
 
 Text of Bill Before Congress 13 
 
 Transportation Incidentals 19 
 
 Water and Air Transportation . . . .... .21 
 
 Financial Justice and Industrial Savings .... 23 
 
 The Industrial Savings Act 26 
 
 Senator Sheppard's Argument . . , . ... 52 
 
 Is "Silence" the Only Answer? 58 
 
 A Big Issue for Nineteen Hundred and Twenty? . 59 
 
 The Nutshell of It All 62 
 
 Sample $10 Bill Postal Savings Bank "Money" . . 63 
 Land-Rent, Money-Rent and Rural Credits ... 65 
 
 A Tremendous Mistake 67 
 
 A Square Deal in Milk 68 
 
 Milk "Tanks" . 72-90 
 
 Financing a Square Deal in Milk . . ,,. ... 77 
 
 Working Capital Fund 81 
 
 Other Ways and Means 85 
 
 Local Transportation . . . UJ 86 
 
 A River of Milk 88 
 
 Why Stop at Milk? tfj . . m . 92 
 
 "Beat the Meat Trust" M . . 92 
 
 The Economic Millenium 92 
 
 Self -Help the Best Kind. . . . ., . . . .93 
 Post Scriptum 95 
 
THREE CENTS WORTH OF PATRIOTISM? 
 
 Have you that much? "Sure thing?" 
 
 A 3-cent postage stamp will do a lot ! Your Congress- 
 man wants and needs to hear from you. The Grafters 
 the "Interests" "hearts right there" (song of "Tip- 
 perary") are with him every day, and one of them is 
 liable to loom larger in his eyes than a hundred (or a 
 thousand?) farmers, or other "common voters" unless 
 he hears from them once in a while. Just a postal card 
 like this: 
 
 "Dear Congressman Blank. I vote to unshackle 
 the Postal Savings Bank. Make it free as the Post 
 Office and universal open to the intelligent and 
 thrifty American, as well as to the ignorant, timid 
 "Dago." And loan the money to any honest man 
 who will give good security and pay the most inter- 
 est not to bankers only, at a ridiculous 2*4 per 
 cent." 
 
 That postal card will "touch the spot." He wants it 
 needs it. Send it quick better, of course, write in your 
 own way and language. 
 
 A "PEACE" ARMY OF EIGHTY MILLIONS 
 
 Even the "shackled" Postal Savings Bank has, already, 
 over 600,000 depositors, with over $140,000,000 to their 
 credit. (See latest official report.) 
 
 "Unshackle" the bank, and make every P. O., every 
 letter carrier, its servants, as they now serve for money 
 orders, registered letters and Parcel Post, and there would 
 in a few months be an "army" of eighty million deposi- 
 tors. 
 
 Existing Savings Banks (see World Almanac) have 
 now over llJ/3 million depositors, nearly $500 each, aver- 
 age that ratio would give the "unshackled" Postal Bank 
 about forty billion dollars. 
 
TRANSPORTATION 
 
 National Ownership; Private Operation 
 
 "Uncle Sam's Automatic Railroad Regulator" 
 
 Will not the plans following give us economic peace 
 and prosperity instead of incessant economic war, or 
 commercial antagonism, such as we have had these many 
 years always since railroads were invented? 
 
 Take the railroads out of politics altogether? 
 
 Give practically unlimited financial strength, and least 
 possible cost of capital? 
 
 Give efficiency of operation in the utmost degree? 
 
 Give immaculate justice to investors? 
 
 Give equal justice, together with the lowest possible 
 cost of transportation, to the Man Who Pays the 
 Freight ? 
 
 Give the greatest possible measure of contentment, and 
 of zeal in service, to railroad employees? 
 
 Give justice and economic service in the highest con- 
 ceivable measure to all producers and all consumers 
 whose cost of living, and compensation for labor, are in- 
 timately and always affected by transportation cost and 
 service ? 
 
 We start with things as they are : 
 
 Approximately twenty billion dollars of capital now 
 invested in railroads, costs under present conditions has 
 cost, always, on the average over 6 per cent, per annum 
 (possibly over 8 per cent.?) over twelve hundred million 
 
 5 
 
6'' ~ : ''$EACE A^D PROSPERITY VIA 
 
 dollars a year. This cost, inevitably, is passed along, 
 through the man who pays the freight, to producer and 
 consumer. 
 
 Incidental, with this excessive cost of capital, we have 
 always had always will have a large degree of finan- 
 cial demoralization uncertainty, poverty, bankruptcy, 
 manipulation by capitalists and speculators, resulting, 
 to smaller, innocent, ill-informed investors, in loss to 
 them, and gradual transfer of their capital holdings to 
 big financiers building up multi-millionaires. 
 
 Let Uncle Sam supply all this twenty billion dollars 
 capital by government ownership {not "government 
 operation" see further on) and abundant capital can 
 be had at a cost not to exceed 3 per cent, per annum, a 
 saving of fully six hundred million dollars a year in 
 capital-cost, such saving, not for benefit of "capitalists," 
 but for producers and consumers, in reduced cost of 
 transportation. Probably the saving would be near, if 
 not quite, a billion dollars a year at least one-half of 
 present capital-cost. 
 
 "Money for 3 per cent.?" Yes, at that, or less, all 
 Uncle Sam can find profitable use for certain as gravi- 
 tation not by "fiat," but by common-sense, square-deal, 
 free trade in finance ; justice to thrift and industry. Un- 
 shackle our present Postal Savings Bank and in less than 
 one year it will have over eighty million depositors, with 
 such resulting stimulus to thrift, industry and enterprise 
 as the world has never seen, with scores of billions of 
 dollars in deposits. For particulars as to this see "The 
 Industrial Savings Act" already before Congress, with 
 speech of Senator Sheppard explaining and illustrating 
 how and why. 
 
 This "Postal Bank" reference is not essential to the 
 "Automatic Railroad Regulator" idea. If you choose to 
 let "Money Interests" finance government ownership at a 
 higher rate, it can be done and still save one-half in the 
 
JUSTICE AND PRACTICAL SENSE 7 
 
 cost of capital, but such excess cost is needless, and un- 
 justly fastens that much more perpetual tax on cost of 
 transportation. 
 
 With government ownership (not operation), thus, 
 would come the greatest conceivable financial efficiency 
 and strength. 
 
 Now let follow the highest conceivable efficiency of 
 interested, alert, intelligent personal initiative, Private 
 Operation, under a one-unit system and universal con- 
 trol in manner as follows: 
 
 Private Operation, not by "capitalists," inevitably in- 
 terested to get in "dividends," and by direct and indirect 
 ways, devious and otherwise, all that can be made out 
 of transportation, but: 
 
 Private Operation by those "Who (now and always 
 will) Pay the Freight" (human, included) and whose 
 vital interest it is to secure the highest possible effi- 
 ciency of service at the least possible cost. 
 
 These Men Who Pay the Freight include the great 
 mass of the ablest business men of the nation, manufac- 
 turers, merchants, farmers men who are always "on 
 the spot," at every great terminal, at every small country 
 station always with eyes open to know what ought to 
 be done and how to do it, "self -interest" always "prod- 
 ding" them, "keying them up" to "get results" at least 
 cost meaning for them, highest profit. 
 
 Organize these Men Who Pay the! Freight precisely 
 as stockholders are always organized, giving each a vote 
 in control and operation according to the amount of his 
 interest a vote for EACH $100 in freight he pays annu- 
 ally ( smaller patrons might have one vote). 
 
 These Men Who Pay the Freight, automatically and 
 vitally interested to secure best results, would elect (com- 
 monly elect the men now in service thereafter inter- 
 ested to serve Freight-Payers instead of Capitalists) 
 would elect: 
 
8 PEACE AND PROSPERITY VIA 
 
 (a) Local Transportation Boards (say of three 
 tor five) at each station or city. 
 
 (b) Line, or Division Boards of Directors, chosen 
 by patron Freight Payers on that line. 
 
 (c) General Board of Directors, having control 
 over all roads and interests the nation over. 
 
 These Boards of Directors would employ and direct 
 and control as similar Boards do now. 
 
 But these new Boards are under the "Men Who Pay 
 the Freight," and are interested to SERVE, to reduce 
 cost, not to get "dividends" "profits" for capitalists. 
 
 The only "Capitalist" interested is Uncle Sam (the 
 "genus" name for Liberty Bond Holders and of the 
 eighty million or more Depositors in the Unshackled 
 Postal Savings Bank) and "Uncle" wants a "dividend" 
 of only 3J/2 per cent. ( l / 2 per cent, above the 3, cost, the 
 same as the Allies pay). Freight charges must inevit- 
 ably be high enough to cover cost of operation and of 
 up-keep, and this small dividend. Any Railroad Earn- 
 ings above these essentials would come back to Freight 
 Payers, in reduced cost of freight and thus come to all 
 Producers and all Consumers in increased price for pro- 
 ducts, or in reduced Cost of Living. 
 
 So organized, the entire National Transportation ser- 
 vice would be One Unit, one management, no waste or 
 superfluity of equipment in one place, poverty, strangu- 
 lation in another no cut-throat competition between 
 Lines, no favoritism to special shippers, no opportunity 
 for "graft," no "side" Refrigerator, Express, Despatch 
 or other vampire "systems." 
 
 The eyes of Men Who Pay the Freight are every- 
 where, watching for waste, steals, blunders, inefficiency 
 or watching to reward and promote Efficiency. 
 
 Every manufacturing shipper, every merchant who 
 has something to sell, seeking larger market, each with a 
 pro rata vote in control according to his railroad patron- 
 
JUSTICE AND PRACTICAL SENSE 9 
 
 age, will be interested to extend railroad lines into new 
 territory, to double-track, or quadruple track, improve 
 terminals, wherever such improvements or extensions 
 can be made to earn over 3y 2 per cent on additional capi- 
 tal, which Uncle Sam is always ready and able to supply 
 when it can be of service to his people. 
 
 "Increase Uncle Sam's debt another twenty billion dol- 
 lars and "then some more" ! Not necessarily this 
 amount pay the just value of the property a different 
 problem to be solved when we come to it. 
 
 It will not, in fact, be any real "increase" of debt at 
 all practically a big decrease because these Men Who 
 Pay the Freight now, virtually owe it and are daily pay- 
 ing it to railroad stockholders and bondholders in the 
 form of freight charges; the form of debt is changed, 
 only, to Uncle Sam practically cut in half my reducing 
 one-half the interest-cost. There is "solid" money-earn- 
 ing asset for every dollar 'of this debt. 
 
 "Out of politics !" Completely out of politics. 
 
 We all know how sinister and dominating the influence 
 of railroads in politics has been in the past. "All the 
 traffic will bear." "The public be damned." Bribery and 
 blackmail, favoritism, secret rates, cut-throat, wrecking 
 competition, strangulating regulation. 
 
 With the railroads completely turned over to "Gov- 
 ernment ownership and operation" with so-called 
 "statesmen," politicians, in charge, and with about two 
 million employees, to help "regulate" the roads, (or 
 regulate politics and the Government) what riot of 
 inefficiency and disservice, might we not anticipate? 
 
 The "national ownership" here purposed has for one 
 of its special, most important objects the forestalling and 
 preventing the inefficient, demoralizing kind of "govern- 
 ment ownership" which threatens to come, if it is to be 
 a choice between that and the "exploitation" of all com- 
 merce by "capitalists." 
 
10 PEACE AND PROSPERITY VIA 
 
 Don't talk of "regulation" by government! We have 
 had enough of it incessant, endless "war," the "inter- 
 ests" regulating government, or vice versa, meantime 
 commerce suffering! 
 
 But, with Government simply owning the roads, re- 
 ceiving its "first lien" 3^ per cent, dividends, and the 
 "self-interest" of "Men Who Pay the Freight," the mass 
 of the ablest business men of the nation supervising the 
 "OPERATION," there would naturally result absolute 
 economic peace and prosperity utmost efficiency of ser- 
 vice, least possible cost of service. 
 
 The same principles apply, obviously, to telegraph, tele- 
 phone and other public service utilities, though these may 
 not be equally instant with the transportation problem. 
 
 The nation, state, or municipality can "finance" (no 
 "subsidy" nothing akin, self-support being assumed) 
 the patrons (who always do pay, directly and indirectly, 
 the bills, and pay dividends on capital) controlling "oper- 
 ation," each patron with a vote having weight in propor- 
 tion to patronage, thus "automatically" guaranteeing the 
 utmost efficiency of service, and utmost economy in cost 
 of service. 
 
 Even milk service in big cities, the city financing, milk- 
 users controlling as one unit the buying and distribution, 
 might easily cut cost of milk to babies and all others fully 
 one-fourth, probably one-third, possibly nearer one-half. 
 
 What about Labor in relation to this transportation 
 problem ? 
 
 Can it also be made to "automatically" serve efficiency 
 and economy in railroad operation ? 
 
 Let us try. 
 
 Labor is "worthy of its hire" according to scripture. 
 
 It pays to have Labor at least contented pays better 
 to have it interested enthusiastic. 
 
JUSTICE AND PRACTICAL SENSE 11 
 
 Under this plan, Labor would be serving millions of 
 "Freight-Payers," neighbors whom they know and re- 
 spect, instead of serving a limited few "Capitalists" who 
 (they think) seek to exploit Labor, and there would 
 naturally be less tendency to antagonism. 
 
 Let us organize the "self-interest" and power of 
 Labor precisely the same as we have organized the self- 
 interest and power of the Men Who Pay the Freight. 
 
 Give every employee a vote with weight in proportion 
 to his earnings as stockholders always have weight in 
 proportion to investment as freight payers are given in 
 present plans weight in proportion to the freight they 
 pay; so will a man have influence in some measure in 
 proportion to his merit, growing influence as he grows, 
 which will interest and stimulate him to grow. 
 
 Let Labor elect at least one advisory representative to 
 each Board that has to do with railroad operation, and so 
 always be consulted the "higher up" men of the future 
 are the "small" men of today. Give them a chance to 
 "grow," and watch them grow fast! 
 
 And from the lowest section hand to the highest 
 "Manager" or President let every employee have at least 
 some compensation contingent on time of service, faith- 
 fulness, efficiency, success, as shown by results. All this 
 is necessarily a question of detail, to be largely learned 
 and developed by experience. The free, continual con- 
 sultation of Labor will help enormously to wise solu- 
 tions of these problems. 
 
12 PEACE AND PROSPERITY VIA 
 
 WILL "U. S. AUTOMATIC R. R." WORK? 
 
 It will work, certainly as gravitation ! 
 
 It mobilizes to the full the power of "self-interest" 
 and personal initiative, and puts to the front, in charge, 
 the best brain and energy of the mass of business men of 
 the nation. 
 
 "The Men Who Pay the Freight" are of practically 
 unlimited resource of capital and skill they are the sort 
 of men who "find a way or make it." 
 
 "Big Business" is in the "same boat" with "little busi- 
 ness/' the one with no possibility of advantage over the 
 other "pull together" is inevitable, and "get there" is the 
 goal for all. 
 
 Of course no "machine" was ever made, the "first trial" 
 of which did not show room for improvement some 
 "adjustment" here and some "oil" there. The "School of 
 Experience" is the "best ever" for teaching the way to 
 success, and here we have the school of experience. 
 
 "The Men Who Pay the Freight" are "practical" men, 
 who take hold of "things as they are." Railroad Trans- 
 portation is "a going business" and the men now in charge, 
 heretofore representing, working for, the "owners" who 
 have not yet been paid for the property, but will be paid, 
 fairly, the value they can help to prove to be in the prop- 
 erty. The "owners' self-interest" makes sure their "help" 
 and not hindrance in this "private operation." The work- 
 ers' "self-interest" urges all to "make good" and hold 
 their positions, or win promotion to better ones. The 
 new Board of Directors elected by the Men Who Pay the 
 Freight take over the "machine" as it is, with practical, 
 experienced "crews" in charge, and will simply "speed 
 up" and adjust, improve, strengthen, enlarge, multiply as 
 "practical men" know how to do, continuing existing 
 management, present employees, except as experience 
 shows change desirable. 
 
JUSTICE AND PRACTICAL SENSE 13 
 
 TEXT AND COMMENT THEREON OF 
 A BILL 
 
 To secure the utmost financial strength, and utmost 
 economy in capital-cost, by National Ownership of Rail- 
 roads and other means for freight and passenger trans- 
 portation, by land, water, or air, together with the utmost 
 efficiency and least possible cost of service by means of 
 Private Operation of the same. 
 
 NOTE. This Bill as presented is meant to be sug- 
 gestive, rather than final; some points are even tenta- 
 tive. Committees of Senate and House should natu- 
 rally improve some details. 
 
 It is prepared especially with the hope that it may 
 be put before "practical" men, merchants, manufactur- 
 ers, farmers all "Men Who Pay the Freight," pay for 
 up-keep and waste, interest on R.R. bonds, all divi- 
 dends on capital stock, whose vital business suffers 
 when service is poor, or prospers when service is effi- 
 cient who of necessity pass along to producer and 
 consumer, with some additions, all excess cost of trans- 
 portation. Surely these are the men qualified to discuss 
 and solve the transportation problem. Why not put 
 this before the "Men Who Pay the Freight" and give 
 them a chance to talk and suggest ? 
 
 Sec. 1. There is hereby created the U. S. National 
 Transportation Corporation, the capital stock of which 
 shall be measured and limited only by the need of service 
 and the ability to use profitably, all said capital stock to 
 be subscribed for, owned and permanently held by the 
 U. S. Treasury. 
 
 NOTE. National credit is to be used in very large 
 amount, but in place of other credit already existing, 
 vastly more expensive to taxpayers ; every dollar of debt 
 
14 PEACE AND PROSPERITY VIA 
 
 will represent live assets earning substantial profit for 
 the national treasury. 
 
 Sec. 2. All the members of the Cabinet of the President 
 of the United States shall, ex oficio, be directors of said 
 corporation, hereinafter referred to as ownership direc- 
 tors. 
 
 (fl) Said ownership directors shall by majority vote 
 have veto power concerning any matter relating to the 
 business of the corporation, and by unanimous vote shall 
 have initiative power and final authority to order, in any 
 such matter. 
 
 (b) Said ownership directors shall employ and com- 
 pensate in its discretion such service as it deems neces- 
 sary, including the service of the existing U v S. Com- 
 merce Commission, for the adequate oversight of all mat- 
 ters affecting the corporation and the performance of du- 
 ties, compensation for such service to be at the expense 
 of the U. S. Government. 
 
 (c) It shall be the special duty of said ownership di- 
 rectors to see that charges for Freight and Passenger 
 Transportation shall be maintained adequately high to 
 cover all expense of operation, of up-keep, and to pay into 
 the U. S. Treasury a semi-annual dividend of one-half 
 of one per cent, per annum in excess of the cost to the 
 U. S. of money borrowed for investment in the capital 
 stock of the corporation. 
 
 (d) Said ownership directors shall cause to be issued 
 and sold to the U. S. Postal Savings Bank, or otherwise, 
 on the best terms possible, U. S. bonds ample to buy, 
 build, equip and supply all legitimate capital needs for the 
 most efficient and profitable transportation service of the 
 nation. 
 
 (e) It shall be the further special duty of said owner- 
 ship directors to see that charges for transportation shall 
 be uniform and just to all shippers and passengers, with- 
 
JUSTICE AND PRACTICAL SENSE 15 
 
 out favoritism to any individual or to any locality; also 
 to see that all purchases and contracts having to do with 
 buying, building, equipping, maintaining or operating shall 
 be in like manner without favoritism or special advantage 
 to any one. 
 
 Sec. 3. The operation of the entire transportation sys- 
 tem provided for by this Bill shall be as one unit, and 
 not as many competing or co-operating lines or systems, 
 and shall be in charge of Boards of Directors, subject to 
 the oversight of the ownership board as already provided, 
 to be chosen as provided in Sec. 4 hereof, as follows : 
 
 (a) A National Executive Board in control over all, 
 hereinafter called the Operating Board. 
 
 (b) Division Boards in charge of such lines or divisions 
 as the Operating Board may for convenience and effi- 
 ciency in operation designate. 
 
 (c) Local Boards in charge of each station, city or lo- 
 cality as the Operating Board may designate. 
 
 (d) The powers, duties and compensations of the Divi- 
 sion Boards and Local Boards, and the number in each, 
 not less than three, shall be such as the Operating Boards 
 may fix. 
 
 Sec. 4. The members of each of said Operating Boards, 
 Division Boards and Local Boards shall be chosen by 
 election in January of each year, as follows : 
 
 (a) The Ownership Directors shall first cause to be 
 ascertained and recorded as accurately as practicable, 
 from the records of local railroad stations, and by notices 
 and advertisements to railroad patrons, the names and 
 addresses of all who in the calendar year 1918 have 
 paid freight or passenger transportation in excess of $10 
 each, and the amount so paid, the same to be claimed as 
 having been paid by the payor, and allowed as paid by the 
 local transportation authorities, such payors of transpor- 
 
16 PEACE AND PROSPERITY VIA 
 
 tation to be referred to hereinafter as Men Who Have 
 Paid the Freight. 
 
 (b) Such Men Who Have Paid the Freight shall each 
 be allowed one vote, and an additional vote for each $100 
 additional transportation paid in said calendar year 1918. 
 and after January 1, 1920, each of the Men Who Have 
 Paid the Freight shall have votes in like manner accord- 
 ing to the amounts paid in the preceding calendar year. 
 
 (c) All votes of Men Who Have Paid the Freight, and 
 all votes of members of said Operating Boards, Division 
 Boards and Local Boards shall be in writing or printing, 
 by written signature, and may be by mail, and inability 
 to write shall be deemed waiver of the right to vote, and 
 all records of votes shall be preserved at least one year. 
 
 (d) Men Who Have Paid the Freight may each vote 
 for his choice of three (or more, if so designated) per- 
 sons to act as Local Directors, or may concentrate his 
 several votes on one person. The persons so chosen as 
 Directors shall each have weight of vote in his Board 
 according to the number of votes by which he is chosen. 
 If more than three (or the designated number) have 
 been so chosen as Directors, those so chosen shall bal- 
 lot repeatedly among themselves till the properly re- 
 duced number of Directors is reached, and the weight of 
 vote of each Director ascertained by the number of 
 votes concentrated upon him. 
 
 (e) Local Boards of Directors thus chosen, all of 
 them along the line of the division of which they are a 
 part, shall thereafter meet at some central point which 
 the Operating Board, or in first instance the Owner- 
 ship Board, may designate, and shall in a similar man- 
 ner ballot for and elect a Division Board, the number 
 of members of which shall be determined by themselves, 
 till finally determined by the Operating Board. Each 
 member of said Division Board shall have weight of 
 
JUSTICE AND PRACTICAL SENSE 17 
 
 vote according to the number of concentrated votes he 
 has received. 
 
 (/) All the various Division Boards so chosen shall 
 thereafter meet as appointed by the Operating Board, or 
 Ownership Board, and shall in a similar manner elect 
 Directors of an Operating Board, each member of which 
 shall have power and weight of vote according to the 
 number of votes concentrated in his election. 
 
 NOTE. This choosing of Directors is a simpler 
 matter than describing it. It is a mathematically exact 
 way of placing power in the hands of those whom the 
 voters esteem the most capable and trustworthy. The 
 plan is based on the principle of the "proxy" and of 
 "weight" according to "money invested," common in 
 corporate business generally. The result will be that 
 dominant "natural leadership" will lead; two or three 
 men, or possibly even one, will sometimes have more 
 "power" or "weight" than all the other members of 
 the Board because voters have so willed it. But 
 "minority representation" is there, also, with its due 
 proportionate influence. 
 
 Sec. 5. The Operating Board shall have, subject to the 
 superior powers of the Ownership Board, as specified, 
 complete power of control and management of every- 
 thing relating to the functions of the U. S. National 
 Transportation Corporation, shall employ, direct, and 
 compensate in its discretion all service necessary. It 
 shall have the fullest power of eminent domain which 
 this Act can legally convey, to take over land, water and 
 ether property important to the corporation, with rea- 
 sonable promptness thereafter justly paying therefor 
 with capital supplied by the Ownership Board. This is 
 intended to include the right to take coal, iron and other 
 mines and water power, rolling mills and other factories 
 necessary or important to the best economic transporta- 
 tion service of the nation, but not for exploitation of 
 
18 PEACE AND PROSPERITY VIA 
 
 such property. It shall have the right to fix and alter 
 charges for transportation, without favoritism to any, 
 with equal rights to all patrons, without unjust advantage 
 to one locality over another, or to one class of freight 
 over another; provided, however, especially that trans- 
 portation charges shall always be maintained adequately 
 high to provide for up-keep of all the property of the 
 corporation and for paying semi-annually into the U. S. 
 Treasury of a dividend of one-half of one per cent, in 
 excess of the cost to the U. S. Treasury of the money 
 invested in the capital stock of the corporation. 
 
 Sec. 6. In the event of the death or disability of a 
 member of the Operating Board, Division Board or Lo- 
 cal Board, the remaining members may choose his suc- 
 cessor to act during incapacity or till the next annual 
 election. 
 
 Sec. 7. The existing Railroad Administration shall con- 
 tinue until the Director General shall receive notice from 
 the Operating Board that it is ready to take charge, when 
 the property shall be as promptly as possible turned over 
 to it. 
 
 Sec. 8. As soon as practicable after taking over the 
 property as specified in Section 7, the Operating Board 
 shall proceed to carefully inventory and estimate the 
 value thereof, and the former owners shall also estimate 
 its value, and the two opposing interests shall attempt to 
 agree upon value, and failing to agree each interest shall 
 choose a referee and those two referees shall agree upon 
 a third, and the majority shall determine the value. In 
 case the two referees shall fail to agree upon a third, the 
 President shall make such choice. Upon the value being 
 so determined and the decision being approved by the 
 Ownership Board, said Ownership Board shall cause to 
 be issued and marketed U. S. Bonds and make payment 
 to the original owners. In the meantime rental shall be 
 paid to the original owners in accordance with existing 
 
JUSTICE AND PRACTICAL SENSE 19 
 
 contracts made by the railroad administration, from the 
 operating income of the railroads. 
 
 TRANSPORTATION INCIDENTALS AND OBSERVATIONS 
 
 The greatest of all the forces that "do things" in hu- 
 man life are "self -interest" and "individuality" the one 
 "does it," the other "does it differently," and contrast and 
 competition of the "different" incite men to "get there" 
 lively. 
 
 Nine-tenths of the world's work, if not nearer ninety- 
 nine-hundredths of it, is thus done by self-interest life's 
 luxuries and necessities brought to our doors without 
 hurry or worry on our part. 
 
 Mixed with all this thought of "self" there may be, 
 and is much of thought of justice and honor, and of the 
 spirit of "altruism" which, if strongly impregnate 
 about doubles the "horse power" of the "ego" but the 
 prime force that never ceases to inspire and push is 
 "self-interest." 
 
 Here "hitched up" with the strongest financial re- 
 sources and power the world has ever seen the meas- 
 ureless credit of "Uncle Sam," we have the "self-interest" 
 and "individuality" of the great mass practically all 
 of the business men of the LL S., manufacturers, mer- 
 chants, farmers. Each is compelled by the nature of the 
 "hitch," when he works for "self-interest" to work also 
 for the interest of all. 
 
 The aim is necessarily the most efficient transportation 
 service, the least possible cost and all benefit, no pos- 
 sible favoritism, to individual, to locality, to class of 
 freight. 
 
 Local Boards of Directors, of villages or larger towns, 
 or great terminal cities, are chosen by the local patrons, 
 Men Who Pay the Freight chosen from among them- 
 selves, neighbors who know each other. Those most 
 interested, alert, the men who "get things done," inevita- 
 
20 PEACE AND PROSPERITY VIA 
 
 bly come to the front, and each is given power measured 
 by the confidence he commands, not "equal powers'* (al- 
 ways fiction, not fact, for some one "dominates" in al- 
 most any effective board). 
 
 In small places the Local Board will probably be 
 three and a dominating alert one will do most of the 
 work, or have oversight of it. In larger places Boards 
 will be larger. Their numbers, their powers, duties, com- 
 pensations will be decided by the great Operating Board 
 of the National Organization, which controls and orders 
 everything, as a General Staff controls a great army. 
 
 Once a year all the Local Board members meet to- 
 gether and elect a superior Division Board (which will 
 be under the National Operating Board) each mem- 
 ber being given "weight of vote" according to the con- 
 centrated "weight of votes" he receives. And these 
 various Division Boards likewise meet and elect in the 
 same manner, with same "accumulated weight of vote," 
 the National Operating Board, the number of members 
 and the compensation being fixed by vote of the Division 
 Board members. The National Operating Board powers 
 and duties are fixed by the law organizing the corpora- 
 tion. 
 
 Each Local and Division Board inevitably has its 
 "interests" to get the most and best service at the least 
 practicable cost for its locality or line. It is always 
 "on the spot," has knowledge and initiative and "can 
 get anything it wants" in reason, when it shows that 
 "what it wants" will "pay" the cost of the capital "what 
 it wants" involves, and "something more" for safety of 
 "Division" and for the national system. 
 
 If capital costs (say) 3 l / 2 per cent, and a local ele- 
 vator, cotton, or potato warehouse, a gigantic hay press, 
 a creamery, a new "feeder" trolley freightrpassenger line 
 anything that will bring business to the road, enlarge 
 markets for shippers if any or all can be made to 
 
JUSTICE AND PRACTICAL SENSE 21 
 
 "earn" 10, or 7, or even 4 per cent, (perhaps) "Uncle 
 Sam is rich enough" to give us all we want if it pays! 
 
 And the records show "what pays." While the whole 
 national system is "one unit," accounts are kept so it is 
 easy to tell where and how much "income" exceeds cost 
 of investment, or vice versa. 
 
 At the great city terminals, of course, is where the 
 "one unit" idea counts most and shows most effectually 
 no more "competition," all one "happy family" seeking 
 the best possible "least-cost service" of commerce and 
 travel. 
 
 No more "vampire" "inside," express, refrigerator 
 or other "systems," no favored "contractors" for better- 
 ments, extensions, to suck the life-blood profits from 
 Uncle Sam's Railroad. The national Operating Board 
 has its own engineers, a great army of tested officers who 
 can organize and superintend forces that can do anything 
 that can be done by "somebody else at a profit" for the 
 Corporation. If sometimes the Corporation buys, "out- 
 side," locomotives, rails, or anything else, it knows from 
 its own "cost records" in its own shops what it buys is 
 worth, and will buy for its own "convenience" and not 
 as a "favor" to a big "client" or "capitalist." 
 
 WATER AND AIR TRANSPORTATION 
 
 Of course the "Men Who Pay the Freight" want all 
 possible profitable economic facilities for transportation 
 wherever freight or passengers want to go, and river and 
 canal will be used heavily, all as "one unit" with the rail- 
 roads including coast and Panama Canal and why not 
 also allow Cuba, West Indias generally and South 
 America and why stop even there ? 
 
 For foreign transportation generally a separate "Amerr 
 can-Foreign Transportation Corporation" might well be 
 organized along the same lines as that of this Inter-State 
 Corporation, to be "financed" by the nation and "operated" 
 
22 PEACE AND PROSPERITY 
 
 by the "Men Who Pay Foreign Freight" vitally inter- 
 ested to secure the greatest possible efficiency of service, 
 and least possible cost of service small shippers (com- 
 paratively) having the same benefit of low cost as the 
 large shippers who transport millions of tons low cost, 
 obviously being passed on for benefit of producer and con- 
 sumer. 
 
 As "ships and more ships" under its own control are to 
 be counted as vital for the future prosperity and PEACE 
 of "Uncle Sam" and the world generally, this "American- 
 Foreign Transportation Corporation" might (with per- 
 haps independent private American Citizen transporta- 
 tion) be given the monopoly of one-half the total foreign- 
 American transportation, the other one-half fairly being 
 left open to competition of the other nations of the world. 
 
 Air transportation is, of course, a matter of future 
 development. The "experimental part" of it will doubt- 
 less be pressed at the expense of the U. S. Army, Navy, 
 and Post Office ; the U. S. A. A. R. will "take a hand in 
 the game" only to the extent that it can be done with 
 early anticipated profit in view. 
 
FINANCIAL JUSTICE AND 
 INDUSTRIAL SAVINGS 
 
 "For Uncle Sam and World Peace." 
 "UnsJiackle the Postal Savings Bank." 
 
 The first quotation above was the title of a portion of 
 this paper issued as an appeal to immeasurably help win 
 the world war by a bit of plain financial justice to indus- 
 trial patriots. The war is won but "godliness is profit- 
 able" for time of peace as well as time of war, so we still 
 give the quotation place. 
 
 To get anywhere we must always "start where we are" 
 start with things as they ire. 
 
 We now have a Postal Savings Bank we start with 
 that. 
 
 Every other savings bank in the world makes the pre- 
 tense, at least, of security for depositors the largest prac- 
 ticable returns for their money, with absolute security, 
 and perfect availability. Uncle Sam's Postal Savings 
 Bank is "shackled" by the opposite rule it attempts to 
 get as much money as possible from depositors for the 
 least interest possible. 
 
 There were at one time about seven hundred thousand 
 depositors, almost entirely limited to poor, but provident, 
 ignorant, timid foreigners so limited by the fact that no 
 intelligent American will deposit in the Postal Bank under 
 present dishonorable restrictions. 
 
 These seven hundred thousand timid, ignorant deposi- 
 tors have placed about one hundred and forty million dol- 
 lars in the Postal Bank, for which they get the ridiculous 
 
 23 
 
24 PEACE AND PROSPERITY VIA 
 
 (wicked) rate of two per cent, (only) interest. What is 
 done with their money? Instead of giving Uncle Sam 
 the benefit of the money, the benefit of the low two per 
 cent., ninety-five per cent, of the money is turned over to 
 bankers for two and a quarter per cent. and the bankers 
 loan it to Uncle Sam for four and a half, or loan it, pos- 
 sibly, to farmers or others for productive purposes at 6 
 per cent, or MORE, plus commissions to somebody. 
 
 Is this the "square deal"? Is this, if technically "hon- 
 est," honorable? Is it "godly"? 
 
 Shall you and I "stand by consenting," like Saul at 
 Stephen's stoning, while such wrong is done? And if a 
 bank accepts the benefit of this "2-per-cent. money," does 
 it not more than "hold the clothes of them that stoned" 
 hold some of the contents of the clothes of then* that} 
 are stoned? Do editors, who join the "conspiracy of 
 silence," speaking no word of protest, or of exposure of 
 wrong are they guilty of "hush money" in accepting 
 "financial advertising" and "keeping still"? One hesi- 
 tates to believe honorable bankers and editors consciously 
 "guilty" "they know not what they do" is sad truth 
 often applying. 
 
 And what about the "wrong" (and the economic 
 folly!) of excluding from any use of the Postal Savings 
 Bank the scores of millions of intelligent, thrifty, patrio- 
 tic Americans by limiting interest to 2 per cent, and by 
 limiting the right to deposit at all more than a petty sum 
 instead of inviting "without limit" as commercial banks 
 always do? "Limit 2 per cent.," when the market price 
 for money is from twice to five times two ! 
 
 We now propose : 
 
 "A Bill to amend the Law relating to the Postal Sav- 
 ings Bank, in the interest of justice to depositors, also 
 in the interest of farmers, and other small industrial bor- 
 rowers of money, and in the interest of the nation at 
 large." 
 
JUSTICE AND PRACTICAL SENSE 25 
 
 In the interest of depositors of borrowers of the 
 nation at large; is there any other, any special limited 
 class, or favored few, whose "interests" shall dictate and 
 distort the plan and purpose of the law of the Postal 
 Savings Bank ? Patriotism says no ! 
 
 Justice stupendously stimulates patriotism. "Hyphen- 
 ated" depositors in, and producing borrowers from, an 
 unshackled Postal Savings Bank would be few, and 
 quickly, "automatically" cured! 
 
 In the interest of Depositors : 
 
 The "Unshackled" Postal Bank we are attempting to 
 rebuild on a basis of mathematically exact justice. The 
 first man to rightly claim "justice" from it and all con- 
 cerned, is the man who has the money the depositor, 
 whether he has brought his hard-earned hoard of $10 or 
 $1,000,000. He is "inalienably" entitled to get for the 
 use of that money the most that anybody will give for it, 
 with ample security, just as the farmer is entitled to get 
 the same for his wheat, or the workman for his labor. 
 
 In the interest of Borrowers: 
 
 The man who wants to borrow money has no "rights'" 
 in the case till he is able to offer satisfactory security, then 
 the borrower who will give the most, whether he is bank- 
 er, barber, butcher or farmer, has the right to get it the 
 amount he will pay for its use is, presumably, the legiti- 
 mate measure of his need, or of his ability to use at high 
 profit. 
 
 But, given a "square deal" to both depositor and bor- 
 rower, no fear but in this rich nation, there will be plenty 
 of money to "go round," at a fair rate of interest both 
 better and fairer than either (average man) gets now. 
 
 "Cheap money" never can exist, as it is imagined by 
 many, except as it is made cheap by some "hocus pocus" 
 and injustice to somebody, in the end the taxpayer, which, 
 ultimately means more the man who labors than anybody 
 else. 
 
26 PEACE AND PROSPERITY VIA 
 
 The "cheapest money" possible will come about pre- 
 cisely as will cheap wheat or cheap shoes by the pro- 
 ducer's increasing ability to get larger "crops" for his 
 labor. When we "all get rich" (or more of us) money 
 will go begging for borrowers at a fraction of present 
 rates of interest. 
 
 The "justice for the farmer" (and all who labor) 
 we seek via an unshackled Postal Savings Bank is that 
 he shall have the right and ability to borrow money as 
 cheaply as anybody, even the banker, on equal security. 
 
 Here is provided the "square deal" so universally 
 popular with patriotic Americans "free trade" in finance, 
 money, and credits, not special privilege to bankers, farm- 
 ers, or any other class. 
 
 The following Bill, here slightly amended, has already 
 been presented to Congress, in two successive sessions, 
 introduced by Senator Morris Sheppard of Texas. It 
 will be again introduced, in Senate and House, till it gets 
 consideration. As its plans are much broader in scope 
 than those of the original Postal Savings Bank, it is 
 given the title 
 
 THE INDUSTRIAL SAVINGS ACT. 
 
 "Section 1. Be it enacted by the Senate and House of 
 Representatives of the United States of America in Con- 
 gress assembled, That the 'short title of this act shall be 
 The Industrial Savings Act." 
 
 "Sec. 2. All the members of the President's Cabinet 
 shall, ex oficio, constitute a board of trustees for the ad- 
 ministration of this act, hereinafter to be referred to as 
 the Industrial Savings Board." 
 
 These officials broadly represent all the basic economic 
 interests of the nation. They are appointed by the Presi- 
 dent and confirmed by the Senate. They guide and shape 
 the policy of the bank established by this bill, within the 
 
JUSTICE AND PRACTICAL SENSE 27 
 
 very definite limits which it provides. They will not have 
 time for the work in detail, but they will fashion general 
 policies, choose and supervise competent heads and prin- 
 cipal employees, who will do the work, under the safe, 
 businesslike rules of the Civil Service Commission. 
 
 'Sec. 3. For the proper and efficient organization and 
 conduct of the business of the Industrial Savings Board 
 it shall appoint, under the rules of the Civil Service Com- 
 mission, a first chief, a second chief, and a third chief, 
 having such powers and duties as the board may desig- 
 nate ; also such other assistants, attorneys, and other em- 
 ployees as the board may consider necessary. The com- 
 pensation of the persons so appointed and other expenses 
 of operation under this act shall be such as the Industrial 
 Savings Board may authorize, and shall be paid from the 
 profits of the Postal Savings Bank." 
 
 This section takes the Postal Savings Bank out of poli- 
 tics, and provides that expense of operation shall be paid 
 from the profits of the bank by depositors and borrowers, 
 instead of being taken from the pockets of taxpayers by 
 appropriations from the Treasury. The wisdom and fair- 
 ness of this section would seem to be beyond question. 
 
 "Sec. 4. The Industrial Savings Board shall, as soon as 
 possible, take over the control of the existing Postal Sav- 
 ings Bank, the details of its administration to continue in 
 connection with the post offices throughout the country, 
 under the direct supervision of the Postmaster General 
 acting for the board. 
 
 "Sec. 5. As soon as arrangements can be made therefor 
 every post office, postmaster, and all letter carriers and 
 other post office employees shall hereafter be made to 
 serve the people through the Postal Savings Bank as they 
 now serve them for letters, money orders, registered let- 
 ters and parcel post, without limitation, the manner of 
 such service being as in this act provided, and all limita- 
 
28 PEACE AND PROSPERITY VIA 
 
 tions on the amount of deposits in the Postal Savings 
 Bank are hereby removed. 
 
 "Sec. 6. Postmasters and other employees in the service 
 of the Postal Savings Bank at the time of the transfer of 
 said bank to the Industrial Savings Board shall continue 
 in office until it is found from experience that any one of 
 them is inefficient, when such employee may be removed 
 according to rules and regulations which the board shall 
 establish, with the approval of the Civil Service Commis- 
 sion, and the successors of those who may be removed 
 shall be appointed under the rules of the Civil Service 
 Commision." 
 
 The Post Office Department is already one of the most 
 enormous, best organized, best equipped, and best con- 
 ducted business plants in the world. In connection with 
 the enlarged Postal Savings Bank it is proposed almost 
 to double, or more than double, its utility at an increase 
 of expense remarkably small when results are considered. 
 This act will establish within the Post Office Department 
 the largest, strongest and mose useful financial institution 
 in the world. 
 
 There is to be no limitation as to the amount anyone 
 may deposit. Letter carriers, rural and city, must accept 
 deposits for the Postal Savings Bank, and deliver receipts 
 as they must accept and deliver letters, money orders and 
 parcels. Also they may, if desired, take certificates of 
 deposit and checks to the bank, cash them, and return the 
 proceeds to the owner. They are agents both of the bank 
 and the people. What a service this will be to the masses 
 of the people, who need not leave their homes or other 
 places of business in order to deposit their savings or draw 
 funds as they may need them! The Government thus 
 maintains a perpetual open door to thrift and economy, 
 the great permanent foundation of general prosperity. 
 See also Section 18. 
 
 Every existing bank in the United States, in good 
 
JUSTICE AND PRACTICAL SENSE 29 
 
 standing, as well as every post office and letter carrier, 
 may receive deposits and make payments, and the banks 
 may make loans, for the Postal Savings Bank, as provided 
 further on in this bill. 
 
 Taking our population in 1910 (now, of course, largely 
 exceeded) and the deposits in the existing Savings Banks 
 of the State of Connecticut (which are far from being 
 "unshackled" as here provided), as a basis of comparison, 
 the nation would have in the Postal Savings Bank 54,- 
 074,000 depositors (instead of a beggarly 600,000 as 
 now) and $27,987,000,000 deposits instead of only about 
 140 millions as now. 
 
 These big figures are, in fact, less than half as large 
 as should be the reality, for reasons which will appear 
 further on. 
 
 Note that, incidentally, here is legitimate "government 
 guaranty of deposits," simply because "Uncle Sam" is 
 "custodian," as he is for money-order money, and one is 
 "dead sure" of getting out what is put in. No "runs" on 
 "Uncle Sam's" Postal Savings Bank "for fear," as is 
 possible with all other banks. 
 
 "Sec. 7. Of the funds which are now or may hereafter 
 be deposited in the Postal Savings Bank, not to exceed 
 25 per cent, of the balance of deposits at any time, may, 
 in the discretion of the Industrial Savings Board, be in- 
 vested in the bonds of the United States, bearing 3 per 
 cent, interest, or bought in the open market at the lowest 
 obtainable price or bought at such price from the Treas- 
 urer of the United States. Any portion of said bonds 
 may, in the discretion of the board, be sold in the open 
 market at the highest obtainable price or sold to the 
 United States Treasury at such price. In times of war 
 the bond investment specified may be increased in any 
 amount up to 90 per cent, of the balance of deposits, and 
 the rate of interest on bonds increased to 4 per cent., or in 
 the discretion of the Industrial Savings Board." 
 
30 PEACE AND PROSPERITY VIA 
 
 This section affords financial preparedness for the na- 
 tion on a scale hitherto unparalleled. The investment in 
 United States bonds is an opportunity, not a requirement. 
 The Postal Savings Bank will naturally tend to absorb 
 all available United States bonds on the market, and thus 
 tend to reduce the interest rate the United States will 
 have to pay for loans. The right to sell any portion of 
 the bank's United States bonds in case of need provides 
 a liquid reserve power that is not excelled, if indeed it is 
 equalled, in the financial world, since the bonds of the 
 United States have a world market well-nigh without 
 limit. 
 
 While the sale of U. S. bonds will be, as now, open 
 to individual buyers, and such sale should be in amounts 
 of billions of dollars, it is here contemplated that the 
 great mass of small buyers will prefer that their own 
 Postal Savings Bank shall buy and hold the U. S. bonds 
 for them, their personal individual holdings being Certifi- 
 cates of Deposit in the Postal Savings Bank, which are 
 always instantly available at par (as deposits in solvent 
 banks always are available) and which pay depositors ap- 
 proximately the same rate of interest as the U. S. bonds. 
 
 Indeed, Certificates of Deposit in the Postal Savings 
 Bank should earn depositors even higher rates of interest 
 than do the U. S. bonds, because much of the bank de- 
 posits, being loaned "to highest bidders" offering good 
 security, will command higher rates of interest than the 
 U. S. need, or should pay. 
 
 "Sec. 8. No other investment of the funds deposited 
 shall be made, but with the exception of a working re- 
 serve, the amount of which shall be determined by the 
 Industrial Savings Board, the balance of the funds shall 
 be loaned at the highest obtainable rate of interest on 
 what, in the discretion of the Industrial Savings Board, 
 is considered as adequate security, in manner as follows 
 and as in this act further provided: 
 
JUSTICE AND PRACTICAL SENSE 31 
 
 (a) Preference shall be given 
 
 (1) To small loans over large loans. 
 
 (2) To short-time loans over long-time loans. 
 
 (3) Loans adequately secured by readily market- 
 
 able collateral over loans on real estate or 
 other less-readily marketable security. 
 
 (b) In accordance with the above the board shall, from 
 time to time fix the rate of interest to be charged accord- 
 ing to the supply of and the demand for loanable funds, 
 the profit and security of the depositors being the basis 
 of decision, the maximum rate for loans not to exceed 5 
 per cent, per annum. 
 
 (c) The borrower shall always be required to protect 
 the market value of his collateral, as is customary with 
 other banks making similar loans, either reducing the 
 loan or providing additional security in case of falling 
 market. 
 
 "Sec. 9. That the Industrial Savings Board shall give 
 clear and ample publicity to its rulings as to character of 
 securities required for loans and the terms of such loans, 
 under the following limitations : 
 
 (a) Loans not to exceed 95 per cent of the market 
 value of United States bonds or the bonds of States. 
 
 (b) Not to exceed 90 per cent, of the market value of 
 such other securities as are now admissible investments 
 under the existing laws of New York or Massachusetts 
 for savings banks or as are estimated by the Industrial 
 Savings Board as of equivalent good standing. 
 
 (c) Not to exceed 85 per cent, of the market value of 
 wheat, cotton, or other non-perishable products, so called, 
 in safe, adequately insured public storage, under regula- 
 tions as the board may prescribe. 
 
 (d) Loans against marketable collateral shall be made 
 at any Bank of Issue and Redemption provided for un- 
 
32 PEACE AND PROSPERITY VIA 
 
 der Section 15 of this act, in accordance with rules and 
 regulations made by the Industrial Savings Board." 
 
 These sections contain conservative and practical pro- 
 visions insuring the safe and proper conduct of the bank. 
 The borrower must protect the market value of his col- 
 lateral, and no collateral is accepted at its full market 
 value. All borrowers are on an equal footing the bank- 
 er, the merchant, the farmer, the millionaire, the man of 
 limited means. If any preference is shown at all, it is to 
 the small loan over the large one. The farmer is enabled 
 to borrow money on non-perishable products, properly 
 stored, to the extent of 85 per cent, of their value. 
 
 "No other investments shall be made." The bank is to 
 take no risks on rise or fall of market prices. It will loan 
 only against good security, the borrower taking all mar- 
 ket risks. 
 
 The laws of New York and Massachusetts are referred 
 to above merely as examples of laws defining security. 
 All the provisions of these laws may not be found applic- 
 able to the Postal Savings Bank, especially those relating 
 to local bonds. The savings bank laws of all the States 
 and of foreign countries should be studied and their best 
 features adopted and covered by rulings of the board. 
 
 "Sec. 10. Not to exceed 50 per cent of the deposits in 
 hand at any time may be loaned for such length of time, 
 not to exceed 50 years, as the Industrial Savings Board 
 may specify in its regulations, and with or without amor- 
 tization, payments, as the borrower may prefer, to an 
 amount not to exceed one-half the appraised value, on 
 unencumbered real estate in States and Territories where 
 laws for the protection of creditors are by the Industrial 
 Savings Board deemed adequate and fair, in manner as 
 follows : 
 
 (a) Through any national bank or other incorporated 
 bank or corporation whose business is dealing in or guar- 
 anteeing real estate mortgages and which is subject to the 
 
JUSTICE AND PRACTICAL SENSE 33 
 
 examination and control of the United States Treasury 
 or of the banking department of any State which in the 
 estimation of the Industrial Savings Board adequately 
 protects depositors, loans may be made to an amount at 
 one time outstanding not to exceed ten times the capital 
 and surplus of the bank or corporation, which shall be 
 required to guarantee the prompt payment of the princi- 
 pal and interest of the loans made through said bank or 
 corporation. 
 
 (b) The bank or corporation shall be entitled to a com- 
 mission of 5 per cent of the interest paid on such loan by 
 the borrower (or such less per cent as the board may pre- 
 scribe), who shall not be subject to any other charge ex- 
 cept the necessary expense of examination of title and 
 drawing papers, which charge may be fixed by rules of 
 the Industrial Savings Board, all terms and commissions 
 to be uniform throughout the United States." 
 
 Note that loans on real estate are to be made through 
 banks and other financial institutions of established stand- 
 ing which guarantee principal and interest, .for a small 
 commission on the interest paid. The borrower pays the 
 expense of examining title, drawing papers, and so forth. 
 Savings banks generally lend more than 50 per cent of 
 their deposits on real estate, while building and loan asso- 
 ciations invest in this way nearer 100 per cent of their 
 funds. The banks through which real estate loans may 
 be made have established machinery and facilities for 
 making loans. They have the necessary knowledge of 
 local conditions and personalities. Self-interest will pre- 
 vent them from making excessive or risky loans, and they 
 can probably do this business at less expense than that 
 with which the Postal Bank could itself organize and 
 conduct a safe loan board. If they are compelled to fore- 
 close, they will be entitled to such costs and fees as the 
 courts allow. 
 
 The commission in the great cities allowed agents for 
 
34 PEACE AND PROSPERITY VIA 
 
 collecting rents is from 1 to 5 per cent of the rent 
 commonly 2 per cent for large buildings. The monthly 
 collection of rents is certainly more onerous and expen- 
 sive than the collection of interest on mortgages once or 
 twice a year. Interest is the rent of money. The com- 
 mission runs during the life of the loan and is payable 
 annually. 
 
 Let us illustrate. A bank with $100,000 of capital will 
 first loan its own funds to such extent as it pleases, under 
 legal limits ; then it may loan for the Postal Bank to any 
 amount not exceeding $1,000,000. Interest on loans of 
 $1,000,000 at 5 per cent is $50,000 a year ; 5 per cent com- 
 mission on such interest is $2,500 a year. Thus its loans 
 for the Postal Bank produce a perpetual income of $2,500 
 a year, with trifling, if any, additional rent or clerk hire. 
 How many times, under present conditions, are the banks 
 compelled to quit lending because of lack of loanable 
 funds? Here there will never be such lack. 
 
 Note further that this commission of 5 per cent is 
 double that allowed for dealings on the New York Stock 
 Exchange, and still further that it is annually renewed 
 during the life of the loan, instead of being paid but once, 
 as on the New York Stock Exchange. 
 
 "Sec. 11. Personal loans without requirement of col- 
 lateral security by the Postal Savings Bank may be made 
 in manner as follows: 
 
 (a) The borrower to make written statement showing 
 his assets and liabilities ; the amount of loan not to exceed 
 $1,000; the length of time, which shall not exceed one 
 year ; the purpose for which the loan is to be used, which 
 shall be in accordance with the stated purpose of this act; 
 which statement shall be attached to the borrower's ne- 
 gotiable note. 
 
 (b) The principal and interest of the loan to be guar- 
 anteed prompt payment by a bank or corporation, as in 
 
JUSTICE AND PRACTICAL SENSE 35 
 
 Section 10 of this act, which shall be entitled to a com- 
 mission of 5 per cent of the interest paid thereon, or less, 
 as the board may direct, the borrower being subject to 
 no other charge, and the total of such loans at one time 
 outstanding not to exceed five times the capital and sur- 
 plus of the guarantor. 
 
 (c) The limit of the loans specified in (a) of this sec- 
 tion, if after two years' trial is deemed too small for the 
 best results, may be extended by the board from time to 
 time to larger specified sums, the terms to be uniform 
 throughout the United States." 
 
 These personal loans are to be made without collateral 
 through the banks, other financial institutions, and so 
 forth, which guarantee principal and interest, for an an- 
 nual commission of 5 per cent on the interest. The bank 
 through which the loan is made may exact what security 
 it pleases. 
 
 These personal loans should amply meet the wants of 
 small farmers, mechanics and even merchants, for short- 
 time loans to provide for planting and marketing crops, 
 or other temporary needs. 
 
 Here is the possibility of $1,250 additional income a 
 year for the bank with $100,000 capital. Remember that 
 the bank has the opportunity first to utilize its own capi- 
 tal on the "pick" of the loans. So we have an annual 
 profit for the bank in question of $3,750 for handling the 
 funds of the Postal Bank, the borrower getting his funds 
 at 5 per cent or less. Now observe further, that this 
 profit may be doubled by the commission received by the 
 bank on the deposits it receives and maintains for the 
 Postal Bank under Section 20. 
 
 As agents for the loan of Postal Bank funds there 
 will be legitimate profit for commercial banks of prob- 
 ably $100,000,000 a year in return for honorable, highly 
 useful economic service. 
 
 If the Postal Bank can earn its depositors 4 per cent, 
 
36 PEACE AND PROSPERITY VIA 
 
 commercial banks, with greater initiative, and warrant 
 to take risks, which the Postal will not take, can earn 
 their depositors even more and they can always serve 
 the worlds of commerce and manufacture as the Postal 
 Bank can never do. 
 
 Nothing is more profitable economically profitable 
 than simple, even-handed justice, which is here proposed 
 for depositors and patrons of the Postal Savings Bank, 
 and for the benefit of the nation in times of war or of 
 peace. 
 
 "Sec. 12. To induce the largest possible savings and 
 serve the greatest possible convenience, security and 
 economy of use to depositors and to the Postal Savings 
 Bank, the Industrial Savings Board shall cause to be pre- 
 pared and issued certificates of deposit of the size and 
 form, but different in color and appearance, of customary 
 bank currency, the said certificates being of the following 
 tenor and in manner indicated: 
 
 (a) Issued (year?) January, February, March, 
 April, May, June, July, August, September, October, 
 November, December. 
 
 Day 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 
 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31. 
 
 The United States Postal Savings Bank has received 
 from (here the depositor will write his signature or not, 
 as he pleases, thus identifying his signature on the back 
 when he passes the same) $10 (or other specified sum) 
 and will pay the same, together with all net interest 
 earned hereon, the interest compounded semi-annually, 
 on surrender hereof properly indorsed. If no signature 
 is written, payment shall be to bearer. Interest shall be- 
 gin on the first day of the month indicated by cancella- 
 tions in the margin, and shall terminate the last day of 
 the month preceding payment, also shall terminate five 
 years after date of issue, but any certificate may at any 
 
JUSTICE AND PRACTICAL SENSE 37 
 
 time be surrendered in exchange for a new issue of 
 current date. 
 
 Issued and payable at Washington, D.C., but pro- 
 curable or cashable through any post office or authorized 
 bank. 
 
 (b) Certificates in this form shall be issued in denomi- 
 nations of $1, $2, $5, $10, $50, $100, $1,000, and larger, 
 as the Industrial Savings Board may order. 
 
 (c) Certificates similar, but bearing no interest, shall 
 be issued in denominations of $1, $2, and $5 and $10. 
 
 (d) To encourage the beginning of deposits, and also 
 serve the convenience of those who desire them in pref- 
 erence to coin money, certificates payable to bearer, with- 
 out interest, shall also be issued in denominations of 5 
 cents, 10 cents, 25 cents, and 50 cents, of size and form 
 similar to United States fractional currency issued in 
 1862 and later. 
 
 (e) An additional form of Certificate of Deposit of 
 similar purport to (a) shall be a Registered Certificate, 
 issued in multiples of $100, the principal payable at any 
 time on surrender, properly indorsed, the interest to be 
 remitted semi-annually, all details, including manner of 
 registration, being according to regulations of the Indus- 
 trial Savings Board. 
 
 (/) Simple printed instructions for their use may ap- 
 pear on the front or back of each of the various certifi- 
 cates. 
 
 (g) These certificates shall not be legal tender nor in 
 any way indicated as "money/' but may pass from hand 
 to hand by mutual agreement as is done in the case of 
 "certified" or other bank checks. 
 
 (h) Checking accounts may also be permitted by de- 
 positors who carry an average balance over $500, at 
 cities designated and in accordance with regulations made 
 
38 PEACE AND PROSPERITY VIA 
 
 by Industrial Savings Board, interest on daily balances 
 to be paid on such accounts semi-annually." 
 
 You give the Postal Bank $10 in gold, or what will 
 get the gold, and you prefer this certificate to gold be- 
 cause this earns compound interest. Printed tables will 
 tell you its value at 4 per cent or other interest for 
 any number of days, months, or years. The bank loans 
 your gold, "on call," on security of municipal bonds, at 
 4 per cent ; or on wheat or cotton for a month or a year 
 at 5 per cent; or on farm mortgage, 5 years, at 5 per 
 cent, to the highest bidder in each case. Whoever gets 
 the gold, of course, deposits it again in the Postal Bank 
 and takes a certificate like yours, and the bank of course 
 loans the gold again, and so on, perhaps ten times over, 
 so that $10 gold is earning possibly 50 per cent per an- 
 num, and the Postal Bank still has that gold to loan to 
 the next man! This shows how banks have got rich in 
 the past ; how depositors will hereafter get, not rich, but 
 each what his money fairly earns. Nobody wants to keep 
 that gold any more than you want the man's yardstick 
 when you buy 10 yards of muslin. If you get certificates 
 of deposit, drawing no interest on their face, the bank 
 loans the gold, just the same, and so earns increased in- 
 terest on your $10, $100 and $1,000 certificates. 
 
 This "automatic money mobilizer" does away with all 
 necessity for the clumsy, antiquated "individual ac- 
 counts" bookkeeping methods, and will reduce bank ex- 
 penses in that respect to one-fourth or one-tenth of 
 present cost and be far more convenient for depositors, 
 and just as safe as present clumsy method. 
 
 Instead of clipping coupons twice a year as in U. S. 
 bonds, the depositor simply pays out part of his hold- 
 ings, those he retains growing in compound-interest 
 value. 
 
 These certificates of deposit, each virtually a "certified 
 check" (certified by Uncle Sam) will be good anywhere 
 in the U. S. just as gold certificates are good anywhere, 
 
JUSTICE AND PRACTICAL SENSE 39 
 
 though the gold is in the U. S. Treasury vaults. Thus 
 they will serve "for exchange" and tend to do away with 
 the present cumbersome and vastly expensive "exchange" 
 system. 
 
 Postal Banks will almost never pay out real "money" 
 at all, but pay out, instead, because preferred, only its 
 own certificates of deposit, which serve every possible 
 purpose of real money, and every dollar of which earns 
 interest for depositors every day it is outstanding. 
 
 These certificates will make the money in your pockets, 
 cash drawer, or safe, draw interest for you while you 
 hold them, for the next man when you pay them over 
 will buy anything which gold will buy will buy gold 
 itself. Nobody, but bankers (as basis for larger credits, 
 and for foreign exchange) wants gold, which in posses- 
 sion earns no interest, but will prefer these certificates 
 which in possession do earn compound interest. 
 
 Everybody, even pro-Germans and pacifists, will gladly 
 turn over to the Postal Bank, in exchange for these cer- 
 tificates, every dollar he has, every dollar he gets in the 
 future, that it may earn him 4 per cent or other interest 
 all will "flock" to deposit earnings in the Postal Bank 
 as hungry men coming to a feast (no need for "Barnum 
 circus" advertising methods, semi-hysterical, undignified 
 appeals to patriotism to buy "Liberty Bonds," buy "War 
 Savings Stamps") which by approval of all Postal Bank 
 depositors will have preference to the extent of Uncle 
 Sam's need for Postal Bank investments. 
 
 Every banker knows, as do most of the well-informed, 
 that of all the so-called "money" in existence, nearly 
 one-half of it is not at one time in any bank. Some of 
 it is foolishly "hoarded" by those "afraid of banks," but 
 most of it is just "idle money," in your pocket and mine, 
 earning nothing, "no good" at all till we pay it out for 
 something we want. Ever since banks were invented 
 bankers have been trying to "corral" this elusive outside 
 money, "going to waste" just as much as water running 
 
40 PEACE AND PROSPERITY VIA 
 
 over the dam instead of through the turbine is wasted 
 (dam foolishness?). This simple device of a negotiable 
 Postal Bank certificate of deposit will naturally and 
 certainly as the law of gravitation, as the law of mag- 
 netism draws bits of iron, "chase" this "money" out of 
 your pocket and mine, even out of knot-holes, stockings, 
 tin cans and other hiding places, into existing banks, ap- 
 proximately doubling the foundation resources of banks. 
 There it will be loaned, redeposited and loaned again, in 
 a way bankers know how, till the near two and a half 
 billion dollars of now "idle money" is multiplied to 
 thirty or more billions of available useful "credits" 
 perfectly good, not so much because always "pay- 
 able in gold," as because based on solid property 
 assets, earning or growing into money or what brings 
 money. This will practically nearly "double the money 
 crop," and as doubling the crop of wheat, or cotton tends 
 to "cut the price," so should this tend to reduce interest 
 (the "price" of money) to Uncle Sam, when he wants 
 to borrow money to fight with, or to you and me if we 
 want to borrow to build a silo, buy a farm tractor, or 
 build a home. 
 
 Obviously a feature of infinite value incidental to this 
 plan is its incitement to thrift and saving universal, 
 far-reaching. 
 
 The present gold basis of all money will in no way be 
 altered. Of course, actual gold will be called for only 
 as limited commercial exigencies compel its use, because 
 gold in possession earns no interest, while certificates of 
 deposit in the Postal Bank in possession earn compound 
 interest. 
 
 Take emphatic note that nothing is here suggested in 
 the line of "fiat money" nor even of "inflation" of cred- 
 its. 
 
 Every bit of paper is to be on "a parity with gold" 
 certificates of deposit are made so good they are to be 
 preferred to gold. 
 
JUSTICE AND PRACTICAL SENSE 41 
 
 The essence of "inflation'' that is vicious, is so-called 
 "money" not based on reality, or credits not based on 
 solid security, but on "speculative" values, rather than 
 on the earning, creating power in the investment made. 
 
 Here is proposed only ("inflated"?) credit to Uncle 
 Sam, based on his power of taxation of over 100 mil- 
 lions of patriotic, money-earning, wealth-creating Ameri- 
 cans and loans to such "creators" of wealth only as are 
 wanted for legitimate use and to borrowers who are able 
 adequately to secure the loan by, for instance, the 
 pledge of Liberty Bonds, or of wheat, or cotton, or 
 farms, or other things that are safely, on the average, 
 fire, flood, and earthquake proof. 
 
 "Sec. 13. The Secretary of the Treasury is authorized 
 hereafter to deposit any money in the Treasury, in the 
 Postal Savings Bank (without requiring security there- 
 for) as he does in other banks of deposit, and shall, so 
 far as practicable to do so, make disbursements from the 
 Treasury in the form of certificates of deposit in the 
 Postal Savings Bank." 
 
 "No security" is required for deposits of Treasury 
 funds, because in the Postal Bank they are in the cus- 
 tody of the Government the same as when in the Treas- 
 ury itself. 
 
 Thus the U. S. Treasurer need not (but may do so) 
 any more offer bonds for sale, but can simply issue them 
 to the Postal Bank in exchange for certificates of de- 
 posit which he will pay out the workman will prefer 
 them to money for wages, the farmer for grain or stock, 
 the mine owner for coal, and so on. 
 
 The U. S. Treasury may continue to deal with com- 
 mercial banks the same as now, but with the Postal Bank 
 also. 
 
 "Sec. 14. All banks in the U. S. may hereafter de- 
 posit their funds in the Postal Savings Bank, and certi- 
 
42 PEACE AND PROSPERITY VIA 
 
 cates of deposit issued therefor may be counted as part 
 of their legal reserve." 
 
 Of course banks may continue so far as they desire 
 to carry gold and other "reserves," and those having 
 foreign relations, especially, may naturally do so to an 
 extent, but these certificates of deposit represent such 
 assets in the Postal Bank, and therefore serve the same 
 end, and they earn interest for the depositing bank, while 
 the gold they carry in reserve earns nothing. 
 
 Thus the Postal Savings Bank becomes a gigantic 
 "ally" rather than competitor of existing savings and 
 commercial banks becomes one vast "reservoir" (not 
 many thousand separate, competing banks) into which 
 everybody, other banks included, pour deposits, and 
 draw them out again, with interest, as wanted. 
 
 "Sec. 15. That at the county seat of every county in 
 the United States, or similar civil divisions otherwise 
 called, and in, such other cities as the Industrial Savings 
 Board may specify, post offices shall be designated as 
 Postal Savings Banks of Issue and Redemption. 
 
 (a) Such banks of issue and redemption shall issue 
 and record as required by the Industrial Savings Board 
 certificates of deposit as described in Section 12 hereof, 
 in exchange for bankable funds as per regulations made 
 by said board, and may redeem the same, whether issued 
 by itself or by other similar banks of issue and redemp- 
 tion, either in money or in new certificates of deposit, 
 as the applicant may desire. 
 
 (b) Each depositor in said banks shall record his sig- 
 nature and address in duplicate with the bank on a rec- 
 ord provided, as is customary in commercial banks, so 
 that indorsements of signatures on backs of certificates 
 may be verified when desired. 
 
 (c) These banks of issue and redemption shall supply 
 minor post offices in their region, and letter carriers, with 
 
JUSTICE AND PRACTICAL SENSE 43 
 
 facilities for serving all who desire to do business with 
 the Postal Savings Bank, requiring such security as may 
 be necessary from those handling the funds of the bank 
 or its patrons. 
 
 "Sec. 16. The Industrial Savings Board shall desig- 
 nate 12 or more districts covering the United States, in 
 a central city of each of which it shall cause to be organ- 
 ized a district bank which shall act as clearing and re- 
 serve bank for all the banks of issue and redemption 
 within the district, in accordance with rules and regula- 
 tions of the Industrial Savings Board. 
 
 "Sec. 17. The Industrial Savings Board shall further 
 cause to be organized in the city of Washington, D. C., 
 in the Post Office Department, a national central Postal 
 Savings Bank, which shall act as clearing and reserve 
 bank for the 12 district banks, and may have direct deal- 
 ings with and oversight of all tha county banks of issue 
 and redemption as the Industrial Savings Board shall 
 order. 
 
 "Sec. 18. Every smaller post office and every letter 
 carrier may, in accordance with regulations made by the 
 Industrial Savings Board (adequate bonds for safety be- 
 ing required), as convenient, keep in hand limited 
 amounts of certificates of deposit, secured from the local 
 county banks of issue and redemption, to be given to 
 known applicants in exchange for bankable funds to be 
 forwarded to the county bank of issue and redemption, 
 and may also redeem small certificates of deposit as can 
 conveniently be done. Such post offices and letter carriers 
 shall also give proper receipts, to applicants, for bank- 
 able funds or for certificates of deposit, to be sent to 
 the county bank of issue and redemption to be exchanged 
 for money or other certificates of deposit, and deliver 
 the same to said applicant in exchange for their own re- 
 ceipt originally given to the applicant. 
 
44 PEACE AND PROSPERITY VIA 
 
 "Sec. 19. Each county bank of issue and redemption 
 and each district bank shall keep in hand such working 
 balance as the Industrial Savings Board shall direct, the 
 county bank forwarding any surplus to its district bank, 
 and the district bank any surplus to the national central 
 bank, and each of said banks shall make loans as author- 
 ized by the Industrial Savings Board, the county bank 
 drawing for funds when necessary on its district bank 
 and the district bank drawing on the national central 
 bank, as the Industrial Savings Board may direct." 
 
 Briefly, these sections provide that Postal Banks shall 
 be established in every county seat, other post offices in 
 the county to be branches of tke county-seat bank, under 
 regulations of the board. The United States is to be 
 divided into 12 or more districts, with a central Postal 
 Bank for each district, which shall act as a clearing and 
 reserve bank for the banks in the district and which may 
 have supervision over the county banks. 
 
 "Sec. 20. Existing savings and other banks in the 
 United States which desire and will submit to satisfac- 
 tory examination and supervision of the Industrial Sav- 
 ings Board and are found of standing satisfactory to 
 the board, may be made agents of the Postal Savings 
 Bank, to receive deposits and pay certificates in accord- 
 ance with regulations made by the board, and shall be 
 allowed as compensation for such service a commission 
 to be authorized by the board and not to exceed 5 per 
 cent of the net earnings of the deposits, for which regis- 
 tered certificates (only) are issued, which said existing 
 bank secures through its agency, such commissions to be 
 uniform throughout the United States." 
 
 The provisions of this and other sections permitting 
 any bank in the United States in good standing to be- 
 come a deposit and loan agent of the Postal Bank would 
 tend to strengthen rather than to injure by competition 
 
JUSTICE AND PRACTICAL SENSE 45 
 
 any and every such bank. Their depositors would not 
 leave them for the postal, because they can supply the 
 postal certificates when preferred to their own. As pri- 
 vate enterprise and initiative have certain advantages 
 over public institutions, due to more accurate knowledge 
 of local conditions and opportunities and better means 
 of keeping in touch with them, the agents by offering 
 slight additional interest inducement may secure en- 
 larged deposits for themselves. To applicants for loans 
 the agent may always loan his own funds instead of 
 loaning the postal funds if he desires. 
 
 Note the profit to existing banks in this connection, 
 illustrated in note under Section 11. Commissions for 
 deposits are allowed only on those for which registered 
 certificates of deposit are issued, as it would be too com- 
 plicated and difficult to keep accounts in connection with 
 other deposit certificates. It is believed depositors gen- 
 erally will prefer the registered certificates for all larger 
 and long standing balances, and agent banks will of 
 course work particularly to secure such deposits. 
 
 "Sec. 21. In lieu of the principle of amortization 
 (which may be applied when the borrower desires) loans 
 secured by real estate or other collateral may be made 
 as follows: 
 
 The mortgage or other paper shall be drawn to secure 
 any sum due from the borrower not exceeding the 
 amount named therein for any time not longer than the 
 longest time therein specified, the borrower thus being 
 permitted to adjust the amount of his loan from time to 
 time according to his needs and opportunities/' 
 
 Under this plan, while the borrower would naturally 
 make application for the largest loan which the pledged 
 property would be sufficient to secure, his certificate 
 being passed, he would actually borrow not the most, but 
 the least, sum that would serve him, and borrow only as 
 
46 PEACE AND PROSPERITY VIA 
 
 it was actually needed, and would repay it as fast as he 
 could, so as to stop interest, knowing that he could at 
 any time borrow again if he should have need or find 
 profitable use for the money. This elasticity of loans 
 would be of almost incalculable value to the borrowers, 
 to the bank, and to the community, stimulating enter- 
 prise, thrift, economy, providence, and would certainly 
 be more desirable than iron-clad, unalterable amortiza- 
 tion loans. 
 
 "Sec. 22. The Industrial Savings Board shall test the 
 safety and practicability of making small and short-time 
 loans to farmers and other producers in manner as fol- 
 lows, and in accordance with such other regulations as 
 may be specified by the board: 
 
 (a) After the total balance of deposits in the Postal 
 Savings Bank shall have reached the sum of not less 
 than $1,000,000,000. 
 
 (b) The board shall select not to exceed 10 counties in 
 various parts of the United States to make trial for a 
 period of not less than one year, after which time, if in 
 the opinion of the board the plan is successful, the 
 method may be extended to many or all other counties. 
 
 (c) All persons desiring to borrow, without collateral 
 security, any sum not to exceed $500 for a time not to 
 exceed one year, each shall make a statement showing 
 the amount of his assets and liabilities with their nature, 
 in form and manner specified by the board, the amount 
 of the loan desired, its length of time, and the purpose 
 for which it is to be used, in accordance with this act, 
 which statement shall be attached to the applicant's ne- 
 gotiable note. 
 
 (d) These applications shall be referred for approval 
 or rejection to a committee of three persons elected by 
 the applicants for such loans within the county and also 
 to a committee of three persons elected by the deposi- 
 
JUSTICE AND PRACTICAL SENSE 47 
 
 tors in the Postal Savings Bank within the county hold- 
 ing registered certificates in manner provided here fol- 
 lowing: Loans to be allowed must be approved by not 
 less than two-thirds of the weight of vote of each com- 
 mittee and also approved by one or more experts ap- 
 pointed by the Industrial Savings Board. 
 
 (e) The two said committees to be elected in manner 
 as follows: The postmaster to prepare printed ballots 
 and send the same with return envelope to himself and 
 send to each applicant for loan, and to each depositor in 
 the county bank of issue and redemption having then, 
 and three months previously, outstanding registered cer- 
 tificates of deposit. Each such elector, applicant, or de- 
 positor, shall be entitled to three votes, which he may 
 cast for three, two, or one person of his choice. The 
 persons so chosen, each having weight of vote according 
 to the number of vote by which he is chosen, shall upon 
 notice of the postmaster meet and choose three of their 
 number to act as the committee, such electors balloting 
 repeatedly as may be necessary to reduce the number to 
 three. The committee thus elected, each member shall 
 have weight of vote according to the cumulative number 
 of votes by which he is chosen. 
 
 (/) The members of the committee chosen shall have 
 compensation for services in passing on loans at the rate 
 of 20 cents an hour, the time to be approved by the 
 county seat postmaster. 
 
 (g) Applicants whose loans are accepted shall give 
 the bank negotiable notes for the amounts and time 
 approved, the same to be discounted by the bank at 10 
 per cent per annum, the applicant being given the pro- 
 ceeds less his pro rata of all expense of passing on the 
 loans. After the end of one year, when all of the loans 
 shall have matured, any profits to the bank on the total 
 of the loans in excess of 5 per cent per annum shall be 
 paid as provided by the board in rebate to those \\ho.~e 
 
48 PEACE AND PROSPERITY VIA 
 
 loans shall have been promptly and fully paid, so that the 
 net cost of the loan to the borrower may possibly be re- 
 duced to approximately the same as the interest rate on 
 secured loans. 
 
 (h) If after ample test such method of loaning is 
 found safe and profitable, the amount to be loaned to 
 each applicant may, by rule of the Industrial Savings 
 Board, be increased beyond $500, the increase to be uni- 
 form throughout the United States, and not to exceed 
 $1,000. If some counties prove to be habitually un- 
 profitable, while other counties prove to be habitually 
 profitable, the board may withhold, temporarily, or 
 longer, permission to make such loans from the unprof- 
 itable counties." 
 
 This section, as it specifies, is intended to be tentative 
 and experimental. It is believed that generally through- 
 out the United States practically all deserving wants of 
 borrowers will be amply taken care of under Sections 
 10 and 11. But the possibility of use being made of this 
 section will have a healthy influence on banks acting as 
 loan agents under said sections, and this plan of passing 
 on loans, the depositors approving or rejecting, the bor- 
 rowers assuming limited mutual responsibility, may in 
 time be extended to real estate and other secured loans. 
 
 "Sec. 23. Commercial and savings banks may make 
 deposits in and draw upon county banks of issue 
 and redemption to such extent as said county banks may 
 be able conveniently to serve them, but may, without 
 limitation, deal direct with the district banks and na- 
 tional central bank as per regulations of Industrial Sav- 
 ings Board, and certificates of deposit in the Postal Sav- 
 ings Bank may be counted as part of the legal reserve 
 of all depositing banks." 
 
 If any bank should prefer to keep gold or other form 
 
JUSTICE AND PRACTICAL SENSE 49 
 
 of so-called money as a reserve, it can do so; if such 
 other form of reserve than certificates of the Postal 
 Bank makes it any stronger, then it will have what ad- 
 vantage there may be in the increased strength. 
 
 Certificates of deposit in the Postal Bank are not 
 legal tender but each is a certified check, certified by the 
 United States Government, and is good anywhere. Cer- 
 tified checks of banks are not legal tender, but do they 
 not serve amply every commercial want except in rare 
 technical legal quibbles? If what is offered is good 
 as gold is recognized as good even when not coined it 
 does not need to be legal tender. If it is not good 
 accepted by custom it is at best a promise and com- 
 monly in some measure a deception, and in the end the 
 man who labors is the man who loses most by the fraud. 
 Of course, the law of inviolability of contract will con- 
 tinue, and the debtor must always make good according 
 to his contract, whether it is formal or by implication. 
 Postal Bank deposits will always be good while the 
 United States Government is good. These certificates 
 legitimately meet the popular demand for "guaranteed 
 bank deposits," because "Uncle Sam" is custodian of the 
 deposits, as he is for money-order funds. 
 
 "Sec. 24. The board shall cause to be prepared and 
 printed for the general public simple tables showing the 
 value of $10 or other sums at compounded interest for 
 days, months, and years at various rates of interest, such 
 as will be useful to depositors." 
 
 This will be a matter so simple that any intelligent 
 person can know the value of the certificates he owns. 
 What are the net earnings of the Postal Bank will 
 quickly be known, will be steadily the same, or only 
 slightly or gradually varying from month to month, and 
 will be published continually in papers and periodicals. 
 
 Of course, it will be the smaller certificates, $10 and 
 
50 PEACE AND PROSPERITY VIA 
 
 less, which do not on their face bear interest and are al- 
 ways worth par, which will mainly pass from hand to 
 hand. Larger interest bearing certificates will pass prin- 
 cipally in the same manner as the ownership of United 
 States bonds passes, the market value of which is known 
 every day. 
 
 "Sec. 25. Needless expensive records and statistics 
 shall be avoided, but the Industrial Savings Board shall 
 provide for such as may materially serve the interest of 
 depositors and enable the board to annually report to 
 Congress such information and recommendations as may 
 be of service to Congress." 
 
 "Sec. 26. To the extent that the mails shall be used 
 in facilitating the business of the Postal Savings Bank, 
 either by the bank itself or by its patrons, the In- 
 dustrial Savings Bank, shall provide special stamps for 
 free use of the mails, keeping records so that approxi- 
 mately the actual cost of such postal service shall be paid 
 by the Postal Savings Bank to the Post Office Depart- 
 ment." 
 
 These provisions are matters of simple sense and jus- 
 tice, and encourage the most liberal use of the Postal 
 Bank. Such use will be principally local, or within the 
 county, and the actual cost of postal service for each 
 transaction nearly infinitesimal ; but whatever the cost is 
 it will be paid by the bank at the expense of the bene- 
 ficiaries, the depositors, and borrowers, and not of the 
 taxpayers in general. This principle is maintained 
 throughout the Industrial Savings Act. 
 
 "Sec. 27. The sum of $1,000,000 is hereby appropri- 
 ated for any necessary expense, in the discretion of the 
 Industrial Savings Board, in the rapid development of 
 the Postal Savings Bank, the sum used to be considered 
 only as an advance and to be repaid to the Treasury, with 
 
JUSTICE AND PRACTICAL SENSE 51 
 
 interest thereon at 3 per cent per annum from the profits 
 of the Postal Savings Bank, which is to be made self- 
 sustaining without subsidy or other charge against tax- 
 payers/' 
 
 "Sec. 28. All provisions of an act to establish postal 
 savings, etc., approved June 25, 1919, and of amendments 
 thereto not inconsistent with this present act, shall con- 
 tinue in force, and all other provisions are hereby modi- 
 fied or repealed, as are all other acts of Congress incon- 
 sistent herewith." 
 
 "Sec. 29. To the extent that certificates in Postal 
 Savings Banks crowd out of use forms of paper money 
 now in use, causing the depreciation of the market price 
 of bonds of the United States used to secure their circu- 
 lation, below par, the Treasurer of the United States 
 shall purchase or redeem such bonds at par, issuing, so 
 far as may be necessary to do so, other bonds of the 
 United States bearing higher rate of interest and market- 
 able at or above par." 
 
 This provision also is a matter of simple justice to 
 bankers who have invested in such bonds because of the 
 currency advantages they gave. The United States re- 
 ceived par for the bonds and the consideration for the 
 use having in part terminated, the Government should 
 pay par for them. 
 
 Never have justice, patriotism, necessity, and business 
 sense united more emphatically than in this Industrial 
 Savings Act. It establishes a new and immense reservoir 
 of capital on which all people and all institutions posses- 
 sing requisite security may draw on terms of exact equal- 
 ity a reservoir from which fresh streams of credit will 
 issue to expand and multiply the channels of production, 
 manufacture and distribution. The element of personal 
 rivalry will not be known. A man, although he may 
 offer perfect security, will not be told at the Postal Bank 
 
52 PEACE AND PROSPERITY VIA 
 
 that he can not be accommodated, because he has not 
 been depositing there or does not belong to a certain 
 business clique. The fact that this tremendous volume 
 of credit is loanable at not more than 5 per cent will 
 bring down and regulate interest charges everywhere. 
 It will mean the economic independence of the American 
 masses. The American people possess the means of cre- 
 ating this beneficent institution. They should demand 
 its immediate erection. 
 
 Unshackle the Postal Savings Bank. Let the people's 
 bank serve the people. 
 
 SENATOR SHEPPARD'S ARGUMENT 
 
 In the U. S. Senate, August 14, 1917, Hon. Morris 
 Sheppard of Teaxs presented the "Industrial Savings 
 Act," with the illustrative and explanatory notes (both 
 here slightly revised and somewhat extended) and the 
 following introductory argument: 
 
 "No step could be more vital to the successful conduct 
 of the war than the conservation of the financial re- 
 sources of the nation. The nations engaged in the pres- 
 ent world conflict are straining every energy to obtain 
 funds with which to continue the struggle. The most 
 powerful aid yet rendered by the United States to its 
 allies has been in the way of enormous loans. 
 
 As a part of its war program the United States Gov- 
 ernment recently called on its people for a loan of $2,000,- 
 000,000 at 3^2 per cent. Another loan is to follpw and 
 still another as the war goes on. To-day no one may see 
 the end. Congress has already authorized the Govern- 
 ment to negotiate loans to the extent of $7,000,000,000. 
 In addition, taxes are being imposed which reach into 
 the billions and these are to be followed by others as 
 the necessities of the most stupendous war of history 
 develop. Furthermore, the cost of living has soared to 
 appalling heights. 
 
JUSTICE AND PRACTICAL SENSE 53 
 
 Any method, therefore, by which the financial re- 
 sources of the American people or the American Gov- 
 ernment may be husbanded and multiplied will be of infi- 
 nite value. In fact, it will be one of the determining 
 weapons of the war. Men say that the aeroplanes will 
 win the day, but behind the aeroplane must be money. 
 Men say we must have modern guns and an ample sup- 
 ply of munitions and other equipment of the latest and 
 most effective type. Behind all these must be money. 
 Men say, and say properly, that our soldiers must be 
 carefully equipped and properly fed ; but before this can 
 be done money must be had and in quantities never be- 
 fore realized by the human mind in this connection. 
 Hand in hand with man power goes dollar power. In 
 fact, at every stage in the prosecution of the war a sup- 
 ply *of funds is an essential prerequisite. 
 
 Now, it is a well-recognized fact that the principal 
 form of money to-day, both in war and peace, consists 
 in paper evidences of credit, based on the confidence of 
 ultimate payment in metallic money mainly gold. The 
 existing banking system, in mobilizing metallic money 
 and in erecting thereon a tremendous structure of credit, 
 has made modern civilization and development possible 
 and is rendering a service to the world as indispensable 
 as it is valuable. Efficient as it is, however, the present 
 banking system in the United States had mobilized only 
 about half the actual money in the United States at the 
 opening of the present war. Since the war began about 
 $1,000,000,000 in gold has been driven to the United 
 States to aid in financing the enormous purchases made 
 here by other countries. Most of this billion dollars will 
 be attracted back to these countries after the close of the 
 war by the higher premiums which they will pay for the 
 means of reconstruction. This makes it all the more 
 necesary that we should mobilize all the actual money 
 in the United States, or as much of it as possible, in or- 
 der to be the better prepared to meet the strain on our 
 
54 PEACE AND PROSPERITY VIA 
 
 credit system which will undoubtedly follow the disap- 
 pearance of this foreign gold. Since it came here our 
 credit system has expanded in the usual proportion. That 
 proportion is about 7 cents of gold to every dollar of 
 credit. When it goes, part of our credit structure will 
 lose, and perhaps suddenly lose, its foundation. Therein 
 lies danger. 
 
 In permitting about two billions of actual money to 
 remain outside the banks, outside the channels of credit, 
 we are allowing a Niagara of power to be wasted. 
 
 How may that money be drawn from the hiding places 
 and made to serve the country by enormously increasing 
 its credit facilities and its financial power? The banks 
 have failed to get it, although our American bankers and 
 financiers are among the earth's ablest and best. Evi- 
 dently some other form of banking must be tried, in addi- 
 tion to, and in connection with, that we already have. 
 Banking in one sense is the manufacturing of credit, and 
 credit in the modern, practical sense means a promise to 
 pay, based on metallic money, chiefly gold. 
 
 The answer is, let the United States become a perma- 
 nent banker for the American people. Unshackle the 
 Postal Savings Bank. Let the people's bank serve the 
 people. 
 
 Recently the United States asked the people to lend 
 it $2,000,000,000 at 3y 2 per cent. The response was im- 
 mediate and inspiring. The people deposited that amount 
 at once with the Government, because of absolute confi- 
 dence in the safety of the transaction. Why not keep 
 the Government depositary open permanently to the peo- 
 ple? Instead of paying $ l / 2 per cent interest on multiplied 
 billions at stated periods, why not give all the people, so 
 desiring, an opportunity to redeposit the interest due 
 them, and thus to a great extent stop a drain on the 
 Treasury and on taxation that promises to be tremen- 
 dous? Most of the subscribers to the war loan will re- 
 deposit the interest in some bank, anyway. 
 
JUSTICE AND PRACTICAL SENSE 55 
 
 Do you say that this is putting the Government into 
 the banking business ? The Government has already en- 
 tered the banking business. Since we established the 
 Postal Savings Bank only a few years ago, 700,000 de- 
 positors have placed therein $125,000,000 (since grown 
 to over $140,000,000) . And this has been done in spite 
 of the fact that these depositors get only 2 per cent in- 
 terest, while the ordinary private savings bank pays 3 per 
 cent, and sometimes more in spite of the fact that a 
 number of restrictions are thrown around the postal de- 
 posit which the private banks do not impose at all in 
 spite of the fact that the Government redeposits these 
 $125,000,000 in the commercial banks at 2% per cent, 
 the banks lending it to the people at anywhere from 6 
 to 12 per cent, and at times more. 
 
 The Government practices an enormous injustice on 
 its (near) 700,000 depositors. It pays them only 2 per 
 cent for what is worth at least twice that much, keeping 
 in mind the average interest rate on money. But the 
 Government has demonstrated two facts of lasting sig- 
 nificance. It has shown that the cost of mobilizing money 
 through the Postal Bank is not more than one- fourth of 
 1 per cent, and it has earned in this way over $2,000,000 
 of profit on the limited business already done. 
 
 Nearly half of the population of the State of Victoria, 
 Australia, is represented by depositors in the Govern- 
 ment savings bank of that State. Over half of the peo- 
 ple of the State of Connecticut is represented by deposi- 
 tors in the savings banks of that State. It is not un- 
 reasonable to suppose that the same or a greater ratio 
 would be maintained as to depositors in a United States 
 Postal Savings Bank offering 3^ to 4^ per cent interest. 
 This means that the unshackled Postal Savings Bank of 
 the United States would have from forty-five to fifty-five 
 million depositors, and with the same ratio of deposits 
 as is maintained by the savings banks of New York 
 City to its population, the United States Postal Savings 
 
56 PEACE AND PROSPERITY VIA 
 
 Bank would have deposits of anywhere from twenty- 
 seven to forty billions of dollars. Incidentally let it be 
 remarked here that with deposits of forty billions the 
 United States Postal Bank could have financed the entire 
 $7,000,000,000 bond issue recently authorized by Con- 
 gress by an investment of less than one-fifth of its de- 
 posits, an operation that would have been considered 
 entirely safe and conservative under the strictest stand- 
 ards. At the same time the Government would be earn- 
 ing the interest due the people with the money they had 
 deposited, and would be paying them a higher return than 
 they must now pay by onerous taxation. What kind of 
 business judgment is it that prevents us from taking a 
 step so simple, so just, so logical as that of unshackling 
 the present Postal Bank? 
 
 Savings banks in the United States easily earn 3, 3^, 
 and 4 per cent for depositors. Their loans are made in 
 accordance with laws specifying the nature of the secu- 
 rity with such minuteness that the duty of making the 
 loans is almost a purely ministerial one simply that of 
 tracking the law. Shall it be said that similar laws could 
 not be enacted for the United States Postal Banks? 
 
 Are not the 700,000 depositors of $140,000,000 in the 
 Postal Savings Bank entitled to what this money will 
 earn on security recognized and defined by law security 
 recognized as of the safest sort such security as every 
 savings bank gets for loans, earning an interest rate twice 
 as high and more than that now paid the depositors in 
 the Postal Bank? 
 
 At this point let us summarize what has gone before: 
 
 1. The response to the call for the recent Liberty Loan 
 shows the readiness with which the people will deposit 
 funds with the United States. It is also an encourage- 
 ment of the savings habit that will be worth as much to 
 the people as the amount of the loan. 
 
 2. Why not make the opportunity of depositing with 
 
JUSTICE AND PRACTICAL SENSE 57 
 
 the United States permanent and unlimited? The peo- 
 ple would then have a depositary which could never fail, 
 which would hold their absolute and lasting confidence. 
 A perpetual encouragement of thrift and saving among 
 the people would then be offered the most powerful that 
 could be imagined. 
 
 3. Existing banks have gathered for use in the de- 
 velopment of the country only about half the actual 
 money in the United States. Allow deposits to any amount 
 in the United States Postal Savings Bank, and the 
 remaining billions of money now scattered throughout 
 the land in private and secret places would be assembled 
 and would form the basis of a mightier credit structure 
 than has yet been dreamed. The resulting impetus to 
 business, to economic advancement, and to general pros- 
 perity could not be estimated. 
 
 4. Let the deposits thus assembled be loaned under 
 laws defining the security, as is now so successfully done 
 in the mutual savings institutions of the various States. 
 Let the interest thus earned be returned to depositors, 
 less expense of management, which expense has already 
 been shown to be not more than one-fourth of 1 per cent. 
 
 5. Money at 3^, 4, and 4j/ 2 per cent would then be 
 comparatively plentiful, where first-class security could 
 be furnished. Interest rates throughout the country on 
 funds for necessary and legitimate processes of produc- 
 tion and growth would fall. Rural-credit systems would 
 be made possible. A new reservoir of mobilized money 
 would be added to that already established by existing 
 banks, and the financial resources of the country would 
 be developed to the highest point. Existing banks may 
 utilize this reservoir by making loans of a portion of the 
 funds comprising it, which loans they guarantee, receiv- 
 ing a small commission on the interest, and by acting as 
 agents for receipt of deposits. 
 
 6. The nation would be prepared not only for finan- 
 
58 PEACE AND PROSPERITY VIA 
 
 cing the war, for financing the people on the lowest pos- 
 sible terms, for securing to them an adequate and safe 
 return on their savings, but for the problems that will 
 follow the war, for the shock which the withdrawal of 
 immense quantities of basic money will produce. 
 
 7. Why should not a citizen receive for his savings all 
 that such savings will earn when loaned on the best se- 
 curity? Why should not a citizen, possessing proper 
 security, have ready and fair access to the assembled 
 savings of the people for the essential processes of home 
 building and production of life's necessities? These pro- 
 cesses, properly safeguarded, afford in themselves the 
 best security known to men. 
 
 With these preliminary observations I now direct at- 
 tention to the bill I have introduced for the unshackling 
 of the Postal Savings Bank." 
 
 Is not Senator Sheppard's argument, above presented, 
 and even more fully in the notes accompanying the bill, 
 here reprinted, absolutely convincing unanswerable? 
 
 No attempt, or pretense, has ever been made in the 
 Senate or elsewhere, to make intelligent answer to it. The 
 committee to which the bill was referred has never given 
 it any hearing or consideration it has been simply 
 "buried" "pigeonholed" ! 
 
 "Silence" seems to be recognized as the only "safe" 
 way of opposing it. Discussion must certainly result in 
 victory for justice to industrial wealth-creators : the "man 
 with the hoe" and the tractor, the plane, the hammer, etc. 
 
JUSTICE AND PRACTICAL SENSE 59 
 
 A BIG NINETEEN HUNDRED AND TWENTY 
 ISSUE? 
 
 "Hindsight," Foresight, Shortsight 
 
 How near will be the "fit" to 1920 election will be the 
 following, most of which appeared in a national paper 
 just after the election of 1916? 
 
 It would be next to "silly" to point to a fundamental 
 error of both parties in the recent election campaign were 
 it not that doing so points to the wise course for the 
 future. 
 
 Instead of keeping the country on the ragged edge of 
 uncertainty for several days, one party winning, the 
 other losing by a narrow margin, either party, had it been 
 guided by the courage of statesmanship instead of largely 
 by the cunning of partisanship either party could have 
 won victory overwhelmingly by the adopting and hon- 
 estly, vigorously exploiting one little neglected "plank" 
 the shortest, strongest to carry voters ever forming a 
 part of a political platform: "Unshackle the Postal Sav- 
 ings Bank" ! 
 
 Not one voter in one hundred (perhaps one thousand 
 could be safely said) knows what that means, but nine 
 voters out of ten, when obvious facts are pointed out 
 justice, the square deal on one side, wrong, cunning, 
 short-sighted greed on the other nine voters out of ten, 
 if not nearer ninety-nine out of one hundred, would 
 stand on, stand by and fight for that "plank." 
 
 Those five words point not only to an economic issue 
 of prime importance, larger, more far-reaching, infinitely 
 more beneficent than even the Federal Reserve Bank bill 
 
60 PEACE AND PROSPERITY VIA 
 
 (not antagonistic to that), but they point also to a moral 
 issue one of plain equity for benefit of millions and 
 "the people" are always unhesitatingly, vigorously right 
 when a moral issue is plainly put before them. 
 
 Here is an issue that appeals to both conscience and 
 pocket of every man whose "profit" is not in "chaos" 
 (there are some such) rather than in general prosperity. 
 
 We now have a Postal Savings Bank a puny, sickly, 
 "ham-strung" thing which some would like to see 
 "killed," but it is so strongly guarded by the good will 
 of the people that no "politician" much less a "states- 
 man" would dare propose the law's repeal. 
 
 The heads of this Postal Bank occasionally issue a 
 "bragging" bulletin telling of the great "success" of the 
 bank nearly 600,00 depositors, approaching $100,000,000 
 deposits covering the entire United States, this! 
 
 Two, single, almost "unknown" savings banks of New 
 York City each has larger deposits over $100,000,000 
 and the total savings deposits of that one city are about 
 $2,000,000,000 (two billion). "Success!!" 
 
 What does our present (our you and I voters are 
 "partners' in this ignominious "use" made of "Uncle 
 Sam!") Postal Bank "do to" its depositors? 
 
 It pays them two per cent interest (the last Congress 
 ignobly provided that no interest should be paid on some 
 millions of deposits!). And it cunningly, plausibly 
 "manipulates" those deposits so that 95 per cent of them 
 are turned over to bankers only for two and one-quarter 
 per cent interest to bankers only, who loan that money, 
 commonly at six per cent, on the average to farmers at 
 over eight per cent ! 
 
 An "unshackled" Postal Savings Bank would, accord- 
 ing to precedent of one such state bank (in Australia), 
 have about 45,000,000 depositors, instead of a petty 600,- 
 
JUSTICE AND PRACTICAL SENSE 61 
 
 000, as now, and instead of less than $100,000,000 depos- 
 its now, would have over $40,000,000,000, according to 
 actual precedent in New Ybrk City and many a smaller 
 city. 
 
 Don't imagine that an "unshackled" Postal Savings 
 Bank is "antagonistic" to bankers, or to any worthy body 
 or imagine that bankers generally are charged with the 
 "iniquity" of "manipulating" the present "shackled" Pos- 
 tal Bank law. 
 
 Bankers with brains, foresight, conscience and patriot- 
 ism (generous supply of all four cordially recognized) 
 will, it is believed, see, not antagonism but co-operation 
 and help in the unshackled Postal Bank. Bank prosper- 
 ity goes naturally with industrial prosperity, which this 
 will enormously stimulate. "Patriotism" this will pro- 
 vide resources of probably $5,000,000,000 to $10,000,000,- 
 000 for the United States Government at 3 per cent, in 
 case of need, without perceptibly trenching on commer- 
 cial funds. "Conscience" it is not believable that honor- 
 able bankers approve of the way the Government is 
 "used" to take advantage of the timidity and ignorance 
 of trusting citizens (present or prospective) by loaning 
 their petty savings at two and one-quarter per cent (as 
 now under present Postal Bank law) when thousands of 
 individual bankers would be glad to handle the whole of 
 them, adequately secured, at nearly double that interest. 
 
 For those who have assumed the recent "Federal Farm 
 Loan Act" sufficient financial legislation in that line, these 
 points are made: 
 
 (a) This act will "mobilize the money" necessary for 
 the success of that act. 
 
 (b) However efficient (many doubt) that act may be, 
 it does not at all obviate the moral necessity of wiping 
 out the ignominy and shame of "manipulating" the petty 
 
62 PEACE AND PROSPERITY VIA 
 
 savings of about 600,000 present depositors in the Postal 
 Bank, so that they receive only about one-half the inter- 
 est their money is worth in the open market. 
 
 (c) Nor does it right the wrong and injustice to prob- 
 ably 80,000,000 would-be depositors in or borrowers from 
 the Postal Bank, now excluded from it by their very in- 
 telligence they "know too much" to be "fooled" by a 
 contemptible "two per cent." 
 
 THE NUTSHELL OF IT ALL 
 
 Make every post office, every letter carrier, servants 
 of the Postal Savings Bank, as they now serve for money 
 orders, registered letters and parcel post equally as open 
 to all, without limit, as for letters and parcels. 
 
 Of course the Postal Savings Bank will give deposi- 
 tors, not the ridiculous two per cent interest, as now, 
 but whatever the deposits can be safely made to earn, as 
 in other savings banks three and a half to four per cent 
 or possibly nearer to seven per cent, as in average 
 building and loan associations. 
 
 Of course the Postal Bank will loan its deposits, not to 
 bankers only, as now, at the wicked two and one-quarter 
 per cent interest, but to whoever (for legitimate use) will 
 give adequate security, and the most interest, as in other 
 banks. 
 
JUSTICE AND PRACTICAL SENSE 63 
 
 Sample "$10 Bill" of proposed Postal Savings Bank 
 "Money," provided for in Industrial Savings Act, the 
 words "For Uncle Sam and World Peace" being printed 
 in large type, over the face of the bill size and form of 
 ordinary currency. 
 
 (Face of Bill) 
 Issued 1918 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. 
 
 THE UNITED STATES POSTAL SAVINGS BANK 
 
 HAS RECEIVED FROM 
 
 (Here the depositor will write his signature, or not, as he pleases, this 
 identifying his signature on the back when he indorses and passes it.) 
 
 TEN DOLLARS 
 
 (or another specified sum) 
 
 and will pay the same, together with interest earned 
 (probably 4 per cent, per annum or more), the interest 
 compounded semi-annually, on surrender hereof properly 
 indorsed. 
 
 If no signature is written on face, indorsement is needless and pay- 
 ment will be to bearer. Interest shall begin from the first day of the 
 month indicated by cancellation in margin and shall terminate the last 
 day of the month preceding payment; also shall terminate five years 
 from date interest begins, before which time this may be exchanged for 
 a new issue of current date. For other details, see the other side. 
 
 Issued at Washington, D. C., but procurable or cashable at any Post 
 Office or authorized Bank. Signed by authorized representative of 
 
 "TNCLH SAM." 
 
64 PEACE AND PROSPERITY VIA 
 
 (Back of |10 Bill. Poatal Bank "Monty") 
 
 If you have written your signature on face hereof, for payment or 
 transfer, indorse it here as you do a back check. 
 
 You may get certificates like this, in exchange for any 
 bankable funds, wherever you can get postage stamps ; get 
 any denominations wanted: 25 cents, $1, $5, $10, $50, 
 $100, $1,000 or larger; you can cash them at any post 
 office or wherever you can cash bank checks ; but you do 
 not need cash, for this will buy anything gold will buy, 
 or buy gold itself is better than gold because it makes 
 your money, in pocket, cash drawer or safe, draw interest 
 for you while you hold it, for the next man when you 
 pay it over. 
 
 Money deposited in Postal Savings Bank, for these cer- 
 tificates, will be loaned : 
 
 In times of peace not to exceed 25 per cent of balance of depoait*, to 
 the U. S., if wanted, at 3 per cent per annum. 
 
 In times of war any part, or all. up to 90 per cent, if wanted, to the 
 U. S., at 4 per cent per annum. 
 
 Otherwise, loaned to anybody Riving good security, satisfactory to 
 U. 8. Treasurer, always to the highest bidder, preference being given 
 to the smaller borrowers, $100 to $10,000. 
 
 Certificates similar hereto, of denominations of $5 and 
 under, but drawing no interest, will be issued, and re- 
 issued, if desired though they earn the holder no inter- 
 est, on their face, they do earn interest, for all depositors 
 holding interest-bearing Certificates, because the money 
 they represent is loaned for interest. 
 
 These certificates LEGITIMATELY meet the popular demand for 
 "guaranteed bank deposits," because "Uncle Sam" is custodian of the 
 deposits, as he is for money-order funds, and thus 
 
 This Unshackled Postal Savings Bank will have over 
 80 million depositors loyal backers of "Uncle Sam" ; 100 
 billion dollars or more, for war or peace justice, econ- 
 omy, efficiency far beyond Liberty Bonds (marketable 
 only at a discount! no discount ever on these Certifi- 
 cates) or W. S. S. 
 
JUSTICE AND PRACTICAL SENSE 65 
 
 LAND-RENT, MONEY-RENT AND RURAL 
 CREDITS 
 
 Land-rent is the annual price a tenant pays for the 
 use of another man's farm or other real estate. 
 
 Money-rent is the annual price (interest) a man pays 
 for the use of another man's money. 
 
 When a man rents a farm and he deals, not with the 
 owner, but with an agent or broker, the agent gets a fee 
 or commission of, possibly, 5 per cent of the first year's 
 rent. In the big cities, for big high-rent buildings the 
 agent gets, commonly, only 2 per cent of the rent we 
 have heard of as low as 1 per cent instead of 5 per cent. 
 
 The Federal Farm Loan Act provides for twelve banks 
 to act as "agents" in "renting money" for farmers. These 
 banks are to get a "commission" for their services, as fol- 
 lows, under terms of the law as originally enacted : 
 
 If the bank gets the money at 4 per cent, the farmer is 
 to pay 5 per cent that is 1 per cent commission, which 
 is 25 per cent added to the cost of the "money-rent" ; not 
 of the first year only, but a perpetual annual commission 
 during the entire life of the loan, whether five years or 
 thirty-five years. When the banks get money at 3 per 
 cent, as they will in normal times (after the war), the 
 farmer will pay a perpetual yearly "fee" of one-third 
 the "money-rent" during the entire life of the loan. 
 
 In the "Robber Lair" of Wall Street, on the Stock 
 Exchange, a broker will get for you $10,000 in railroad 
 bonds for a commission of one-eighth of 1 per cent, or 
 $12.50 not annual or perpetual, but just one payment of 
 $1.25 per $1,000. 
 
 The Federal Farm Loan Act (for short F. F. L. A. 
 herein) is here; it actually improves conditions as they 
 were and it is wise to "make the best of it." We have 
 heard of no Congressman, or other friend of the act, 
 
66 PEACE AND PROSPERITY VIA 
 
 who considers it as "final" or "ideal," only the "best 
 that could be got at the time." This paper is not to an- 
 tagonize, but to suggest improvement. 
 
 The Industrial Savings Act proposes to give the bank 
 acting as "agent" in "renting money" for farmers, not 
 25 per cent or 33^ per cent, but not to exceed 5 per cent 
 of the interest; and the "Board" which is to administer 
 the act may reduce that but may not increase it. The 
 chief reason for the difference in "commissions" to banks 
 under the two acts is that the F. F. L. A. establishes 
 special banks which can do no other business, whereas 
 the Industrial Savings Act uses the facilities of all exist- 
 ing banks in good standing to which the 5 per cent com- 
 mission becomes mostly that much extra "income" with 
 almost nominal "outgo." 
 
 In "mobilizing" money" for farmers, the Industrial Sav- 
 ings Act uses the facilities of existing banks and those 
 of the entire Post Office Department. It unshackles the 
 Postal Savings Bank and according to precedent in New 
 York City and many another smaller city, that alone would 
 soon mobilize probably over $40,000,000,000 ample to 
 finance farmers and oil all wheels of industry and com- 
 merce. 
 
 Study the Industrial Savings Act and see the many 
 ways in which it improves on supplements the Federal 
 Farm Loan Act, which it does not antagonize, but will 
 help by mobilizing the money necessary to its success. 
 
 Another point of very great importance in regard to 
 the Industrial Savings Act is that it is in no respect 
 "class legislation" but serves equally all classes workers 
 of every kind, merchants, manufacturers everybody. 
 
JUSTICE AND PRACTICAL SENSE 67 
 
 A TREMENDOUS MISTAKE! 
 
 The greatest mistake, probably, made by the majority 
 of the worthy host of those who seek human betterment, 
 is the assumption that ''legislation is necessary." 
 
 It is rarely true! 
 
 Without one new law to be passed by the nation or 
 any state, honest workers have it now in their power to 
 work their economic will, within the limits of what is 
 wise and right. It is one particular object of this book 
 to demonstrate this. 
 
 Just ORGANIZE ! Standard Oil and the Steel Trust 
 exist in spite of, not because of, legislation. Organize as 
 they do, not "for talk," but for "business." "Conven- 
 tions" and "Leagues," for agitation and "hot air," not 
 their method. 
 
 Farmers and consumers, when they will, can equitably, 
 wisely, legally organize strength far beyond the power 
 of those giant forces. 
 
 "A Square Deal in Milk" is "a practical parable" 
 showing one way to organize. 
 
 Emphasizing the thought "legislation not necessary," 
 it may seem out of keeping to put in the very front the 
 demand for honest legislation for the Postal Savings 
 Bank, and legislation for "Transportation : National Own- 
 ership ; Private Operation." 
 
 It is not necessary in the case of the Postal Bank, for 
 "A Square Deal in Milk" shows plainly one way of "mo- 
 bilizing money" and utilizing credit possibly fully as 
 effectual it is "not necessary" but it is RIGHT, and 
 the people are entitled to have it and it is in their power 
 to exact it, when they will to do so by the means of even 
 "three cents worth of patriotism" for each. Read on, 
 and you will so admit. 
 
68 PEACE AND PROSPERITY VIA 
 
 A SQUARE DEAL IN MILK 
 Evolution of the Industrial Republic 
 
 (Both Producer and Consumer of all products of in- 
 dustry should note that the details of this "milk deal" 
 illustrate what is practical in other lines as well. Milk 
 prices quoted were prevailing prices at the time paper 
 was written, and illustrate principles as well as would 
 current quotations.) 
 
 About two hundred New Jersey farmers center about 
 a village railroad station forty miles from New York 
 City. The great suburban cities of Elizabeth, Newark, 
 Jersey City, and others, lie nearer, and Philadelphia is 
 a little farther away. Their milk product goes to all of 
 them, selling to consumers rarely as low as 8 cents a 
 quart, generally for 9 cents, or even more. 
 
 In the month of June the farmers are receiving only 
 2 l / 2 cents a quart, in July 2^4 cents, in May and August 
 3 cents. The cost of freight is under l /^ cent a quart. 
 To these farmers the extraordinary difference between 
 the price to the producer and the price to the consumer 
 seems out of reason, and they decide to make an effort 
 to reach a direct SQUARE DEAL WITH CONSUM- 
 ERS in manner as follows: 
 
 A "Producer and Consumer Corporation" is organ- 
 ized, which we call "The New Jersey Industrial Repub- 
 lic." The farmers subscribe the necessary capital stock 
 to start the business, $10.00 up to $100.00 or more each; 
 50% of the capital stock is set aside to be sold to con- 
 sumers when they want it, the ownership of stock being 
 strictly a "privilege" and not a "requirement'' from 
 either producer or consumer. The corporation sells to 
 consumers at the customary retail price, 8 or 9 cents, 
 more or less. Any profits are divided monthly between 
 
JUSTICE AND PRACTICAL SENSE 69 
 
 producer and consumer after allowing 10% per annum 
 dividend on capital stock. 
 
 To illustrate: A farmer producing 80 quarts of milk 
 a day, or 2,400 a month of thirty days, at the price of 
 3 cents a quart, gets $72.00 a month. Two hundred far- 
 mers with that average is 480,000 quarts, and $14,400 
 monthly for the farmers, wholesale price. A consumer 
 using 2 quarts a day at 9 cents pays $5.40 a month, and 
 there are 8,000 customers of that average to use the 
 product, paying $43,200 monthly retail price. Assuming 
 the average price to be 3 cents wholesale, 9 cents retail, 
 and expense of delivery 3 cents (it is believed that 
 the cost can be reduced to less than this), leaves 3 cents 
 a quart profit to be divided, or $14,400 dividend, monthly. 
 
 Allowing 10% per annum on $20,000 capital equals 
 $166.67, and leaves $14,233.33 monthly to be divided 
 between producer and consumer, which is a little under 
 25% on the gross business done, or $17.78 extra a 
 month, $213.36 a year, for the 80-quart farmer; $1.33 a 
 month, $16.00 a year, for the 2-quart consumer. While 
 the increase to the farmer is only about 24 cent a quart, 
 it adds probably at least 100% to his profits indeed it 
 is unlikely he makes 1/4 cent on 3-cent milk. The con- 
 sumer "rebate" gives him a price of about 6^4 cents a 
 quart instead of 9 cents. If cost of delivery can be 
 reduced to 2 cents a quart, or even less, as thought pos- 
 sible, increase of profits, or savings, is substantially more, 
 for both producer and consumer. 
 
 The capital stock "privilege" figures out in a similar 
 way. As the corporation sells strictly for cash, $20,000, 
 possibly even $10,000, working capital, is thought ample 
 for the business, which, to begin with, the farmers have 
 to supply, an average of $100.00 each. As the capital 
 stock is to have a dividend of 10% per annum before 
 any dividends to producers or consumers, its ownership 
 (with proportionate voice in control, of course) will be 
 a "privilege" all right, to those who know it, and that 
 
70 PEACE AND PROSPERITY VIA 
 
 privilege will be in proportion to the business each does 
 with corporation; a 40-quart-a-day farmer will have 
 a right to own one-fifth as much stock as a 200-quart 
 farmer. A consumer who pays $5.40 a month for miik 
 will have a "right" to own stock in similar proportion 
 to the farmer who gets $72.00 a month for milk. But 
 the small consumer's "right" is for so small an amount 
 of stock that few of them are likely to "claim" it more 
 of them would be likely to invest if the stock could be had 
 in blocks of $100.00 or multiples. So in practice the capi- 
 tal stock is likely to be mostly in the hands of the farmers 
 until the business is well established. 
 
 If $20,000 working capital is not ample, and $40,000 
 is required, please note from the foregoing monthly 
 "dividend" illustration that only about $167.00 goes to 
 capital compared with over $14,200 to producer and con- 
 sumer. 
 
 If the necessary capital is not taken in small amounts, 
 it may be sold in larger (10% dividend-paying stock will 
 not go begging) , but : 
 
 It is an essential fundamental principle, guaranteed 
 by its original charter and printed on the shares of 
 stock, that the corporation always reserves the right 
 to buy at par at the close of any fiscal year from the 
 holder any portion of his own shares in excess of what 
 he has a "right" to own by reason of his dealing with 
 the corporation. 
 
 Example: If total capital stock is $50,000, and the total 
 amount paid producers, plus the total amount received 
 from consumers, is $500,000, that is a ratio of ten to one, 
 and a producer of $800 worth of milk would be entitled 
 to own, by purchase, at par, $80.00 in capital stock ; a con- 
 sumer of $60.00 worth of milk would be entitled to own 
 $6.00 in stock, and so on. Any shares in "excess" of that 
 ratio the corporation has a right to buy, at the close of any 
 
JUSTICE AND PRACTICAL SENSE 71 
 
 fiscal year, and to sell at par to those who own less shares 
 than they are entitled to purchase. 
 
 This provision will inevitably keep the power of con- 
 trol of the corporation in the hands of producers and 
 consumers, making the "cornering" of capital stock 
 and control and manipulation of the business by "capi- 
 talists" impossible. 
 
 Also, the large 10% dividend to capital guarantees its 
 ample supply, and is no detriment to the producer or 
 the consumer who has a right to own his just pro rata 
 of stock; he simply pays from his one pocket into his 
 other pocket that handsome 10 per cent. 
 
 Organization being completed and capital paid in or 
 subscribed and subject to call, the first move is to buy 
 or build a suitable creamery, and thoroughly modern and 
 scientific equipment, and to put it in charge of a compe- 
 tent, experienced manager. Milk will be "tested" for 
 solids, cream and cleanliness, and must reach specified 
 standards to be accepted at all, and receive the lowest 
 wholesale price. For tests showing product above the 
 necessary standard, graduated premiums will be paid, 
 milk above a specified high standard to be kept separate 
 and retailed as "certified" (or under other special name) 
 at a higher price. As the corporation will sell only for 
 cash, farmers will receive their pay when they want it, 
 instead of the middle of the month, for the previous 
 month, only, as is customary under existing conditions. 
 
 As the "two hundred farmers" are the only patrons of 
 an existing creamery, they naturally buy it, instead of 
 building a new one, probably taking over the present em- 
 ployees possibly also making an equitable and mutually 
 satisfactory co-operative capital-and-sales arrangement 
 with the present creamery owner. 
 
 The next move is to get the milk to the consumer at 
 the least expense possible and get his money (of course 
 
72 PEACE AND PROSPERITY VIA 
 
 it already has a market, which is taken over). Let us 
 see if modern, "scientific management" can not greatly 
 improve upon existing methods. Now, the usual way is 
 for a man and a one or two horse wagon to spend a large 
 part of a day in distributing possibly 80 quarts, or even 
 200 quarts, driving "miles and miles," crossing and re- 
 crossing the tracks of dozens or scores of other milk 
 men, delivering "on credit" in most cases, collecting, if 
 he can, monthly, or when he can and paying the farm- 
 ers (sometimes) once a month. 
 
 The N. J. Industrial Republic Corporation, though it 
 may to an extent temporarily continue antiquated meth- 
 ods, will invest soon in modern, scientifically equipped 
 motor milk trucks. A milk tank is built on the principle 
 of a gigantic thermos bottle (in different shape), except 
 that instead of the vacuum the space between the inner 
 and outer walls will hold ice water. The tank will be 
 divided into three compartments, one large, for standard 
 milk, two smaller for cream and certified milk its total 
 capacity will be at least a ton of milk, probably over 2,000 
 quarts. There will be an air pump, worked by the motor, 
 which will put air pressure into the milk tanks (scientific 
 equipment will wash and cool the air) which will con- 
 tinually aerate the milk, forcing, to the last drop, the milk- 
 through accurate-measuring meters and faucets. The 
 outside air and dust has no possible access to the milk. 
 The tanks are of course cleansed with scalding steam, 
 then cooled with ample running water whenever the milk 
 supply is renewed. On top of the tank an ice-chest will 
 serve to keep cold the cold water with which the between- 
 walls space is filled when the milk supply is taken in 
 the ice water entering by a tube at the bottom, the warm- 
 er water gradually being drawn out at the top. 
 
 Two men and a boy will be the "team" to run the 
 equipment, a chauffeur, a man to draw the milk and take 
 the pay, and the boy to expedite service of customers. 
 The truck will be almost continually on the move, high 
 
JUSTICE AND PRACTICAL SENSE 73 
 
 gear or low gear as need to be, serving every house it 
 passes, instead of one house in ten or forty as do the 
 one-horse wagons from early morn till late eve. It 
 will have a regular route, and time so accurate, that cus- 
 tomers will know when to expect, and be prepared to 
 be promptly served 'they will know it is to be prompt 
 service or "get left." The corporation will supply metal 
 or printed milk checks, $1.00 ( ?) value at a time, giving 
 with each $1.00 value a "dividend check" to be redeemed 
 in cash or in milk checks once a month. 
 
 Is it not clear that the corporation can by such equip- 
 ment and methods supply better milk, give more satis- 
 factory service, and at a fraction of the cost of delivery, 
 than is possible by old methods ? 
 
 How and where to find "consumers" to serve in a 
 "compact body" instead of by present "scattering" and 
 "guerilla" methods, is the next question. 
 
 It would seem natural to begin as near the producer's 
 home ~s possible, with the county town, and gradually 
 move toward the larger cities as the ground is thoroughly 
 covered, and the corporation resources grow. 
 
 The county town of about 8,000 population say 1,600 
 families, estimating 2 quarts of milk a day to the family, 
 requires say 3,200 quarts a day. They are now served 
 by probably thirty or forty or more men, most of them 
 producing their own milk, the marketing of the milk 
 rather than the value of the "milk route" being the prime 
 consideration. Two or three of the corporation's "milk 
 trucks" (instead of forty wagons) can cover the ground 
 and do it better. The natural and expedient thing would 
 seem to be for the corporation to buy out those forty 
 "milk routes," the forty owning farmers coming into the 
 corporation as "partners" with the original two hundred 
 "charter members." The forty will be so greatly advan- 
 taged by the improved efficiencies and economies of the 
 corporation, that small, if any, "bonuses" for "good will" 
 will be necessary to buy the "milk routes." 
 
74 PEACE AND PROSPERITY VIA 
 
 Evidently the "county town move" by the program 
 outlined makes small market for the product of the 
 original two hundred "charter members" it is simply 
 necessary, in order to get that market, to "move on" to 
 one or more of the big cities, and start ten or fifteen more 
 milk trucks to market their 16,000 quarts of milk a day 
 developing from the corporation's existing market. In- 
 deed, moving to the county town not only takes in the 
 forty local milk-dealer farmers, but by the "efficient" ex- 
 ample incites several hundred other milk producing farm- 
 ers centering about the town to want to join the corpora- 
 tion. And there is no reason why they should not join, 
 but every reason why they should. The absolute equity 
 and common-sense of the plans of the corporation serv- 
 ing mutually all parties in interest, makes it natural and 
 reasonable that all producers and consumers within 
 tributary territory centering about great cities should 
 join the corporation. One great corporation, on the sim- 
 ple, equitable plans indicated, would be far better than 
 scores or hundreds of smaller corporations, which would 
 almost necessarily to some extent compete with each 
 other, and overlap, as do the one-horse milk men now. 
 
 When the corporation does enter the big cities, it 
 should always be done systematically, completely cover- 
 ing such territory as it covers at all, at least offering 
 to buy out on fair terms any "milk routes" in the terri- 
 tory to be covered. The consumers' right of "rebate" 
 of an equitable share of the profits on the milk he buys, 
 and 10% dividend on any capital stock he chooses to 
 own, makes every customer an active ally, to influence 
 other customers to come in and obviously an approxi- 
 mate "monopoly" of all business within certain territory 
 is essential to the least cost of delivering the milk which 
 is now a larger item than the original cost of the milk 
 itself. 
 
 The one, practically sole, object of the "two hundred 
 farmers" was to market their milk product at better prices 
 
JUSTICE AND PRACTICAL SENSE 75 
 
 possibly a few of them might have "dreamed," with a 
 faint warming glow in the region of the heart, of altru- 
 istic service of certain city consumers, giving them better 
 milk, and helping them to "cut the cost of living." 
 
 But if the corporation can serve them so well in the 
 matter of milk, why stop at milk ? Why not buy as well 
 as sell? Feed (to make milk) in car-load lots, would be 
 the first, natural step then fertilizers the same way 
 then farm and home supplies generally. To make the 
 largest possible purchases, and consequently the lowest 
 possible cost for each, the "milk consumers" will natu- 
 rally join the milk producers, in buying supplies, which 
 all alike use. The natural consequence is that the cor- 
 poration not only buys and runs the local creamery, but 
 it buys the leading local general store, probably putting 
 the merchant himself in charge, gradually buying other 
 stocks of the other local stores, cutting out wasteful com- 
 petition, vastly reducing by "monopoly" for the benefit of 
 all, the cost of all farm and home supplies. 
 
 By this arrangement (the local merchant now "har- 
 ried" by endless competition of little stores, now inter- 
 ested, fairly compelled to get from customers the highest 
 possible prices for all they buy) the corporation, and 
 every member and patron of it, makes it to the interest 
 of the local mercliant to secure for them the least cost 
 possible, and the best and most economical service pos- 
 sible for everything they buy. The merchant-manager's 
 compensation, , and that of every assisting employee, 
 should be, in part, a small commission on the total 
 amount of business done, also a small per cent on any 
 saving in expense of doing the business thus stimulat- 
 ing all to do the largest business possible at the least 
 possible expense. 
 
 And gradually by similar co-operative common-sense, 
 "efficient" methods, the farmers will market all their 
 products as well as milk and serve equally well the city 
 consumers with all the products of the farm and both 
 
76 PEACE AND PROSPERITY VIA 
 
 producer and consumer uniting in the purchase of enor- 
 mous quantities of the products of the factories will get 
 them as well as milk at least possible cost. 
 
 As the producers have for their convenience and econ- 
 omy their own local general store which will serve sub- 
 stantially all their local wants for supplies of all sorts, 
 so they and the consumers within the "compact" terri- 
 tory where milk is supplied, will naturally establish their 
 general store, in this the local consumers probably hav- 
 ing dominating control of details as the farmers prob- 
 ably have at the country end. Here all kinds of farm 
 produce will be supplied, and also substantially all sorts 
 of other supplies for home consumption. Of course, the 
 "country store'* and the "city store" (the scores and 
 hundreds of such stores which will naturally in time 
 be established) will buy their merchandise together, thus 
 using such enormous quantities that they will be able to 
 get lowest possible cost prices often taking the entire 
 product of factories. The milk product of two hundred 
 farmers, average eighty quarts a day ; consumers averag- 
 ing two quarts of milk, 8,000 families are served. As- 
 suming an average of $400.00 a year to a family, the 
 8,200 families require $3,280,000 a year in "home sup- 
 plies." Of course that group of two hundred farmers 
 soon multiplies to two thousand or twenty thousand, and 
 the consumers grow proportionately to eighty thousand 
 or eight hundred thousand, and the "supplies" wanted to 
 $32,800,000 or $328,000,000. 
 
 Notice that the distinguishing characteristic of this 
 proposed Industrial Republic Corporation is, that it is 
 not organised to make money out of "outsiders" but to 
 sen>e "insiders" and save waste among themselves. 
 
 All "outsiders" have opportunity, and urgent induce- 
 ment to become "insiders" on the same terms as the origi- 
 nal organizers thus doing away with the inevitable 
 
JUSTICE AND PRACTICAL SENSE 77 
 
 stimulus to "competing" organizations, which prosperity 
 always incites, under existing conditions. 
 
 Thus a "Square Deal in Milk" and a combination of 
 business common sense, equity, and "scientific efficiency" 
 will naturally lead to a general very great "cutting of the 
 cost of living" besides many other incidental benefits 
 which will logically follow as it is proposed to show in 
 other pages. 
 
 FINANCING A SQUARE DEAL IN MILK 
 
 We have all heard of the man who "lifted himself by 
 his boot straps." Never mind the joke on "self help"; 
 if there is to be an "uplift" of the producers and the 
 consumers, they are the ones to do the lifting and they 
 are abundantly able to do it, without outside help, as 
 we shall see by applying a little common sense to the 
 matter of financing this milk deal. 
 
 It always requires some capital to conduct any busi- 
 ness. It is estimated that $10,000 capital will be ample 
 to launch this enterprise successfully, after which fur- 
 ther capital will naturally be attracted to it for the 
 growth of the business to any extent desired. 
 
 Take note of the leading facts : 
 
 The two hundred farmers produce an average of 80 
 quarts of milk a day each, which equals 16,000 quarts a 
 day, 5,840,000 quarts a year (cows do business Sundays 
 and holidays) which at 3 cents a quart to the farmers 
 brings them $480 a day, $175,000 a year. 
 
 Consumers averaging 2 quarts a day, 8,000 families 
 use the product which at 9 cents a quart taxes them 
 $1,440 a day, $525,000 a year. 
 
 This business is now actually being done, but through 
 several hundred "middle-men" in several different cities, 
 in which consumers are widely scattered. By "bunching" 
 the consumers, and dealing direct, it is estimated at least 
 
78 PEACE AND PROSPERITY VIA 
 
 3 cents a quart can be saved in expense of delivery, which 
 equals $480 a day, $175,200 a year. 
 
 Instead of 3 cents saving, estimate even 2 cents and 
 there is $116,800, over ten times the required capital, 
 saved in a year, the $10,000 in less than five weeks. 
 
 Another present fact: when farmers sell, as they do 
 now, to dealers, it is the custom for them to get their 
 pay (sometimes) on July 15th for the month of June, 
 only, and so through the year giving dealers 45 days 
 ''credit," down to one day, an average of 22 l / 2 days. Call 
 it 20 days only at $480 a day, which equals $9,600, pretty 
 close to $10,000 capital the farmers now actually supply 
 in form of credit to dealers. But if they sell direct to 
 consumers, farmers get cash; estimate even 6 cents a 
 quart (above expense of delivery) and $19,200 is accu- 
 mulated (as good as "capital") even in 20 days. 
 
 It is evidently a very simple matter to raise the neces- 
 sary capital ! This is on the basis of the farmers supply- 
 ing all the capital, which they would have to do till con- 
 sumers are "shown" (like the "man from Missouri") 
 when they will certainly demand their "right to their 
 share" of the capital stock the ownership of capital 
 stock, to have "10 per cent dividends" being a "privi- 
 lege" and not a "requirement." 
 
 The natural way of raising the $10,000 capital would 
 be as follows: 
 
 The milk product is 16,000 quarts a day ; capital want- 
 ed $10,000. That is in the ratio of 16 quarts of milk a 
 day to $10 capital. So the farmer who produces 80 
 quarts a day would subscribe for $50 in capital stock, 
 and all other farmers do the same in the same ratio of 
 milk and dollars. Each would simply deliver milk and 
 let the corporation collect and keep the money until the 
 subscribed capital is paid for; in less than half a month, 
 at 6 cents a quart, the capital would be paid in, and the 
 farmers from that time on would get their money as often 
 
JUSTICE AND PRACTICAL SENSE 79 
 
 as they choose to collect, instead of part of it at the end 
 of forty-five days. 
 
 If some farmers were ''too poor" to put up their little 
 proportion of capital, their "right to purchase" capital 
 shares would go to other farmers (or to outsiders) who 
 could spare the money and would be glad to get the 10 
 per cent dividends. 
 
 If "10 per cent" dividends is thought "paying too 
 high" for money, it may be answered it is only "from 
 one pocket into the other," if each invests his share 
 as he has a right to do whenever he is ready to do it. 
 Further, 10 per cent on $10,000 capital is only $1,000 a 
 year, while the yearly dividend to producers and con- 
 sumers of 16,000 quarts a day is estimated (3 cents a 
 quart) at $175,200 so the "10 per cent" dividend "cuts 
 a very small figure!" If capital is to be $20,000, or 
 even $50,000, ratio would be increased accordingly. 
 
 Let us look at some other facts and figures of interest 
 to producer and consumer. 
 
 Each of these two hundred farmers buys every year, 
 of stock, feed, fertilizers, farm machinery, etc. make a 
 very low estimate of $300 a year, which equals a total 
 of $60,000. He buys also of home supplies, food, cloth- 
 ing, etc., say $400 a year, which equals a further total 
 of $80,000 or gross $140,000. 
 
 The 8,000 families of milk consumers buy also, of 
 home supplies, say $400 each, or a total of $3,200,000 a 
 year. 
 
 As in previous pages noted, it is most natural common 
 sense for these producers and consumers who find co- 
 operation in milk so satisfactory, that they co-operate 
 also in regard to other home supplies. 
 
 The consequence is, that the farmers establish a co- 
 operative store to handle that $140,000 a year of needed 
 things for themselves (and possibly two or three times 
 as much for their neighbor farmers) and the cor- 
 poration also establishes for the 8,000 consumers' fam- 
 
80 PEACE AND PROSPERITY VIA 
 
 ilies possibly as many as eight stores, one for each 1,000 
 families, convenient of access. These nine stores, serv- 
 ing 8,200 families, buying a total of $3,340,000 a year, 
 will naturally buy together, and divide purchases among 
 the several stores, thus getting for each the lowest pos- 
 sible cost. (These stores could deliver a large portion 
 rf the milk at a good profit, even for a margin of one cent 
 a qnart.) 
 
 Of course these nine stores each requires some capital 
 to carry stock of standard goods such as are daily want- 
 ed, say $2,000 each, for small stock, or $5,000 if capital 
 is plenty, which equals $18,000 to $45,000 for store 
 capital. This capital may be raised in same manner as 
 the milk money capital, each producer or consumer hav- 
 ing the "right to subscribe" in proportion to his dealings 
 with the corporation. 
 
 But let us look ahead a little bit : 
 
 After one, or two, or three years it is the most natural 
 thing in the world that the 200 farmers and 8,000 con- 
 sumers have grown by gradual accretion from one 
 pleased neighbor to another, to 1,000 farmers and 40,000 
 consumers, and indefinite expansion may be anticipated. 
 
 So it may be sensible to expand the capital stock of 
 the Producer and Consumer Corporation from $10,000 
 to $100,000 or even more. It does not need to be paid in 
 except as wanted, or is expedient to use. 
 
 But the prime object of the organization is not to earn 
 big dividends on big capital, but to save producers 
 and consumers in the cost of their purchases save their 
 legitimate earnings from the wasting clutches of need- 
 less "middle men." So instead of trying to attract capi- 
 tal by offering big "10 per cent" dividends, let us see if 
 we cannot find a better way, and get capital for the cor- 
 poration as cheaply as we can. 
 
 Start in the natural way with the two hundred farmers 
 
JUSTICE AND PRACTICAL SENSE 81 
 
 whose milk the corporation buys, and who have not been 
 used to getting their pay daily but used to getting a 
 part of their due at the end of forty-five days and 
 even of that money most of them have saved a little 
 and it is lying in bank unused, and drawing no interest 
 as banks usually do not pay interest unless money is 
 left some months, and each farmer knows he is "liable 
 to want to use" the money, and so deposits subject to 
 call, and gets no interest. It is a low estimate that these 
 two hundred farmers average $200 each of "idle money" 
 in banks and pockets, which equals $40,000 "idle money." 
 And the 8,000 milk consumers will perhaps average as 
 much ($1 .500,000 more idle money) , though more of them 
 will have savings banks accounts, where, however, only 
 "undisturbed" balances draw interest and they get less 
 interest than this corporation can earn for them. 
 
 Let the corporation instead of keeping expensive and 
 laborious "ledger accounts" with each farmer who de- 
 livers milk, pay them daily in Profit Sharing Certificates 
 in form similar to following (we give idea, not technical 
 words) : 
 
 FRONT OF WORKING CAPITAL FUND CERTIFICATE 
 
 "There is due of 
 
 for supplies, cash, or other value received by the 
 corporation the sum of 
 
 TWO DOLLARS (or as specified) 
 
 with annual interest, compounded semi-annually, as 
 follows: after one month from date, 3 per cent; 
 after three months, 4 per cent; after six months, 5 
 per cent; payable on surrender hereof properly in- 
 dorsed, on conditions printed on the back hereof. 
 Signed by president and treasurer of the corporation 
 and countersigned by clerk issuing this certificate." 
 
82 PEACE AND PROSPERITY VIA 
 
 BACK OF WORKING CAPITAL FUND CERTIFICATE 
 
 "The other side is on following conditions: On 
 presentation, properly indorsed, it is payable from 
 the assets of the corporation (only) in advance of 
 any dividends to capital stock, or of any profits to 
 producers or consumers; certificates payable in or- 
 der of presentation ; the corporation has the right to 
 defer payment temporarily, in an emergency." 
 
 The farmers put these in their pockets the same as 
 money; when they want money they present certificates, 
 and get it; or they pay them, instead of money, for 
 goods at the corporation store; or they pay to any one 
 they have occasion to pay, and he collects, or pays out 
 in the same way. Whoever has a certificate that is twenty 
 days old is likely to hold it, if convenient, ten days more 
 and get the 3 per cent it has earned (a small matter, but 
 that much, and "many littles make the muckle," which 
 gratifies human nature) ; a certificate that has been held 
 two months is likely to be held another and then get its 
 4 per cent; and so on. By this means the $40,000 or 
 more "idle money" of the farmers will gradually accu- 
 mulate in these Profit Sharing Certificates. 
 
 To the extent the corporation can use "capital" to ad- 
 vantage, it may sell these certificates to any of its pro- 
 ducer-consumer members who have "idle money," little 
 or much, in sums to suit $10, $100, or $1,000; if 
 "takers" choose to invest, for a definite time, making 
 them payable after three months, or after one year, from 
 date, the corporation may well pay */ 2 per cent more 
 interest on them. Thus the consumers' $1,600,000 "idle 
 money" will gradually accrue in this form. 
 
 The corporation's many thousand little sources of in- 
 come aggregate a large total, and while the big city banks 
 will not pay interest on the petty balances of individuals, 
 the corporation on its large aggregate balance can read- 
 
JUSTICE AND PRACTICAL SENSE 83 
 
 ily get 3 to 4 per cent from some of the big solid city 
 trust companies on its daily balances. 
 
 But it can do better than that, on most of its money, 
 for itself and for its producer-consumer constituents. 
 Instead of their paying (through the corporation) "10 
 per cent" dividends for the use of capital, they will pay 
 an average of probably less than 4 per cent to their pro- 
 ducer-consumer patrons, for the many thousand dollars 
 the corporation invests in "store" stocks carried, and 
 selling thousands of dollars a day, in its several producer- 
 consumer stores. 
 
 To the extent the corporation gets "capital" in this 
 way beyond its need to use, as above, it may invest a 
 part of it, such as experience shows to be safe from be- 
 ing "called for," in more permanent form, where it will 
 earn 6 per cent or more which earnings go, of course, 
 to increase the "monthly dividends" to producer-con- 
 sumer patrons. 
 
 For instance, if farmers are to get 4^ cents for milk 
 instead of 3 cents, as now, a farmer who has eight cows 
 (his own, paid for) is very likely to want to increase his 
 herd to twelve or fifteen cows. The extra cows at $75 
 each will call for $300 or $600. A "15 quart cow" is 
 ready sale, any day, at auction for about $75 ; a 20 quart 
 or a 30 quart cow commands price in proportion. He 
 buys his eight extra cows, then sells the whole herd of 
 sixteen to the corporation for a price safely below real 
 value (to make the corporation absolutely secure) say 
 for $800, with the right to keep them, to feed and care 
 for them, at his own cost, and re-purchase them, paying, 
 say by two cents a quart on their milk product which he 
 delivers to the corporation, the re-purchase price netting 
 the corporation its investment plus 6, or other, per cent 
 per annum, which the "highest bidder" will pay for 
 money supplied in this way. 
 
 Not one farmer in ten now has a silo, which is a great 
 promoter of milk production, and a great source of 
 
84 PEACE AND PROSPERITY VIA 
 
 economy in production, so that every farmer wants a 
 silo, and could well afford to pay even 10 per cent per 
 annum for money to build rather than do without, and 
 the majority of them want and need larger and better 
 buildings and other farm improvements that would earn 
 them big interest on the cost. Probably our "two hun- 
 dred charter member" farmers could profitably borrow, 
 and give good land mortgage or other security for 
 $100,000, possibly $200,000 or more. 
 
 And without doubt many of our "eight thousand char- 
 ter member" milk consumers are situated so they could 
 use an aggregate of great sums of money, profitably, for 
 which they could give good security. 
 
 In this form of certificates for ''idle money" the petty 
 sums of thousands of individuals are made always ''avail- 
 able" because largely invested in "liquid" assets and 
 solid securities, or are in bank drawing interest, and yet 
 earn, or save, producers and consumers more than they 
 get now better, all things considered, than savings 
 banks, or building and loan associations do or can pay 
 them. 
 
 The sum of it all is: Producers and consumers have 
 their own "economic fate" in their own hands, whenever 
 they choose to exercise the little common sense and will-^ 
 power needed to "get together." No need whatever to 
 wait for "legislation" which often only muddles and 
 "mixes things up" and makes them worse makes sal- 
 aries and jobs for politicians and "favorites" always 
 distracts from efforts at "self help," which is already 
 simple and easy. No need whatever to growl and whine 
 about the "35 cent dollar" and the rapacious "middle- 
 man." Just reach out and take the 100-cent dollar, pro- 
 ducer and consumer "shaking hands" direct and "snak- 
 ing" the needless "middleman" so far as we do not em- 
 ploy him as "chauffeur" to deliver milk, as store-keeper, 
 clerk, etc., etc. Don't worry about what the "middle- 
 man" will do; he has shown his ability to take care of 
 
JUSTICE AND PRACTICAL SENSE 85 
 
 himself he will turn producer, and "hustle out" some 
 of the shiftless farmers and mechanics by his industry, 
 vigilance, skill and general "get there" ability. 
 
 OTHER WAYS AND MEANS 
 
 The details of this Square Deal in Milk are, of course, 
 capable of almost infinite variation and possible improve- 
 ment. 
 
 For instance: Instead of limiting dividends on capital 
 to 10 per cent, all the profits might equitably be distrib- 
 uted in that manner, in which case, if retail prices were 
 maintained as now, and " working capital co-operative 
 fund" heavily built up at possibly 4 per cent, average, 
 dividends on capital might mount to several hundred per 
 cent. As each patron has the "right to own" capital stock 
 in proportion to his patronage, the amount of capital 
 stock would be so minutely divided there would be only 
 a petty amount for each, and each, if at all inclined to 
 "thrift," could easily own his share, so there would be 
 no injustice to anybody only dividends from one pocket 
 into the other pocket. 
 
 But instead of maintaining needlessly high retail prices 
 and turning consequent profits back in dividends, retail 
 prices might, in preference, be lowered, or prices to 
 "producers" might be correspondingly increased. 
 
 After the Industrial Republic Corporation has devel- 
 oped to so large a growth as to be a virtual "monopoly" 
 (for the benefit of all, therefore no hurt or wrong to 
 anyone) in its field, instead of itself being regulated by 
 "supply and demand" market prices, a natural way to 
 fix prices to both producers and consumers would be as 
 follows : 
 
 A producers' committee (say of three "too many 
 cooks spoil the broth") could be elected by votes of all 
 who sell to the corporation, each with a vote having 
 
86 PEACE AND PROSPERITY VIA 
 
 weight in proportion to his sales, as in the case of capi- 
 tal stock ownership. 
 
 Also a consumers' committee could be similarly chosen 
 by votes of all who purchase from the corporation. 
 
 These two committees could fix prices to both pro- 
 ducer and consumer by majority vote, or in a case of ?.. 
 "tie" could appoint referees in the usual manner. 
 
 LOCAL TRANSPORTATION 
 
 It is a present custom of our two hundred milk-pro- 
 ducing farmers, that once a day each hitches up a one- 
 or two-horse wagon and drives to the station with his 
 milk. Sometimes two or more farmers "club" and haul 
 with one team. But it is a general rule that from one to 
 two or three hours of a busy day is "spoiled" by carting 
 milk. Two hundred farmers X l l /2 hours = 300 hours at 
 25 cents an hour = $75 a day, counted in milk, even at 
 3 cents a quart = 2,500 quarts of milk "spilled!" 
 
 Instead of this the corporation will invest in the neces- 
 sary number of (2-ton?) motor milk trucks, built for the 
 purpose, which will be run all day (perhaps double-shift, 
 two "teams" of men the truck does not get tired, 
 16 or 20 hours) which will not only collect the milk 
 which is shipped to the city twice a day, at least, but will 
 carry to the farmers their feed, fertilizers, store supplies, 
 meat from butcher, etc., and even their mail from the 
 post office, two or three times a day the vaunted R. F. 
 D. is "child's play," and outrageously expensive, com- 
 pared with this "self-service" of the corporation! (Some 
 people seem to think that somebody else "Uncle Sam" 
 pays for the expensive R. F. D. carrier. Of course 
 it comes out of the taxpayer, especially the small tax- 
 payer.) 
 
 Experience would soon show what is the cost of run- 
 ning the motor truck, per hour, and per mile. Each pa- 
 tron's distance from station is measured and known, and 
 
JUSTICE AND PRACTICAL SENSE 87 
 
 a tariff of rates is made safely profitable, per package, 
 per 100 pounds, extra time off the road, or for needless 
 waiting, etc., so that each patron will pay his just share. 
 And as the corporation does this "cartage," not for 
 "profit," but for "service," a systematic account is kept 
 of receipts and cost of running, and once a year a divi- 
 dend of such profits as the "Truck Service" shows is 
 divided between the "chauffeurs" (for keeping down cost 
 of gasoline, tires, etc.) and the patrons, in equitable por- 
 tions based on what each has paid or done. 
 
88 PEACE AND PROSPERITY VIA 
 
 A RIVER OF MILK 
 The Big-City End of "A Square Deal in Milk" 
 
 How big a "river of milk" would three million quarts 
 a day make, flowing at two miles an hour (fair speed 
 for a river) ? Quite a stream ! New York City ought 
 to have for its health, perhaps would have if cost, de- 
 livered, were what it should be, nearer twice three mil- 
 lion quarts a day. 
 
 Without stopping at all to "bewail" and pity the milk- 
 starved, dying babies, or to criticize the semi-idiotic (not 
 to say cruel, wicked) business methods now used to 
 serve city milk consumers, let us read once more "A 
 Square Deal in Milk" and get familiar with the country 
 end, and then proceed to make rational plans to get : 
 
 The best milk 
 
 at least cost 
 
 to all city consumers. 
 
 Start with the fundamental principles and plans of 
 "Uncle Sam's Automatic Railroad Regulator" ; as the 
 nation "finances" the railroads, and the Men Who Pay 
 the Freight "operate" the roads, for "utmost efficiency 
 and least cost," so let the city finance a 
 
 NEW YORK CITY MILK CONSUMERS CORPORATION 
 
 and organize, also in a similar way, the Milk Consumers 
 to "operate" the business, thus putting in charge the ex- 
 haustless, resourceful power of "self-interest" to "get 
 results" right and cheap. 
 
 Start with one million dollars capital, all to be held by 
 the city, the members of the "Board of Estimate" acting 
 c.v officio as "Ownership Board" of Directors, similar in 
 plan to "Ownership Board" in railroad plans. 
 
 Then let the milk consumers of the city, each family 
 
JUSTICE AND PRACTICAL SENSE 89 
 
 having one vote, and an additional vote for each addi- 
 tional $100 a year paid for milk let these meet once a 
 year in each election district and each vote for his per- 
 sonal choice for one director for the Milk Corporation. 
 The best business men of the city would be candidates. 
 
 Hotel men, restaurant men, using thousands of dollars 
 a year worth of milk, would naturally be specially ac- 
 tive to see good men elected. The result would be 
 several hundred, possibly several thousand, "directors" 
 would be chosen. Let each of these men have weight of 
 vote in proportion to the number of votes by which he 
 is elected, and let these men meet and ballot repeatedly 
 among themselves, as may be necessary, until the num- 
 ber of directors is reduced to (say) seven, each of whom 
 will have power and weight of vote in the New York 
 City Milk Corporation Board of Directors according to 
 the "cumulative" number of votes by which he is elected. 
 This would put in absolute charge of the corporation 
 business, subject to the "veto" power of the "Ownership 
 Directors," the ablest business men of the city, the really 
 dominating minds, as estimated by the milk consumers, 
 in control, "minority representation" being also present 
 in equitable proportion. 
 
 These seven Operating Directors, with the fullest pow- 
 ers of any business board of directors, subject only to 
 the "veto" power of the Ownership Directors, will or- 
 ganize and "district" the city and employ one first class 
 business manager, with ample salary to warrant "the 
 best," and such assistant managers and other employees 
 as will be necessary to conduct the gigantic business 
 3,000.000 quarts a day, even at 10 cents a quart, would 
 be $300,000 a day, over one hundred million dollars a 
 year. 
 
 Note that none of these men will be of "political" 
 standing. They will be put there by the "self-interest" 
 of milk consumers, to secure best possible milk service 
 at least possible cost, and there will be no temptation to 
 
90 PEACE AND PROSPERITY VIA 
 
 pay extravagant salaries and give "sinecure" positions to 
 "favorites." 
 
 The Milk Corporation will have a right to the absolute 
 monopoly of milk service of the city, but may, and will, 
 permit such other service as will not conflict with the best 
 service of the public generally. The "going milk busi- 
 ness" will necessarily be taken over as it is, and "make 
 the best of the situation." 
 
 The first, temporary, move will be to "district" the en- 
 tire city and "license" and temporarily contract with, the 
 milk men now serving so that each shall serve exclusively 
 within the district he contracts for, supplying milk of 
 specified quality at specified price, amoly and promptly, 
 to all wanting service. This arrangement should at once 
 "cut out" probably fully one-half the present labor and 
 expense of delivery and cut the cost to consumers from 
 two cents to five cents a quart. "Licensed stores," only, 
 should be allowed to sell milk on conditions and at prices 
 specified, each having such ample territory as would war- 
 rant and compensate "best" service. 
 
 "Permanent plans" of the Milk Corporation should 
 be a vast improvement on this temporary arrangement, 
 and should still further reduce cost and improve service. 
 
 "Rome was not built in a day" and "scientific, up-to- 
 date service," and "scientific management," could pos- 
 sibly come about only gradually, but rapidly. 
 
 The present big sterilizing plants would be taken over 
 as soon a possible, altered, improved, enlarged as neces- 
 sary for most perfect service. Present owners would, of 
 course, be justly compensated. The present vastly ex- 
 pensive and clumsy "bottling methods" (to be retained 
 perhaps in a limited way) would mostly be replaced by 
 better and far less expensive methods. 
 
 Some hundreds (thousands before through with) of 
 gigantic "thermos-bottle" automobile milk trucks, 2-ton 
 to 5-ton capacity (2,000 to 5,000 quarts, or over) would 
 be built see general plans under "A Square Deal in 
 
JUSTICE AND PRACTICAL SENSE 91 
 
 Milk" (page 72). These purified at intervals by scald- 
 ing steam and cooled by ample water and ice, would 
 have the various grades of milk and cream "piped" into 
 them at the sterilizing plants. The big trucks, especially, 
 would serve hotels, restaurants and stores, "piping," un- 
 der washed and cooled air pressure, required supplies 
 into similar "thermos-bottle tanks," not on wheels, at 
 the stores, etc. There, each local plant, being equipped 
 with power and heat, streams of water and ice, would 
 "faucet" or "pipe" the milk to patrons in suitable recep- 
 tacles of glass, aluminium or tin. Cleanliness and sani- 
 tation would be perfect, cost of service greatly reduced. 
 The smaller milk trucks would serve households direct, 
 taking the place of the clumsy and ridiculously expensive 
 milk-wagon service. 
 
 Next, to get the milk from the distant farms, of best 
 possible quality and at "just price." Necessarily we must 
 start with things as they are, and gradually improve upon 
 them. 
 
 Gradually introduce into the country at the creameries 
 the "gigantic thermos-bottle" idea, also into the cars for 
 transportation, instead of the clumsy, far more expensive 
 "40-quart milk cans." Thus milk could always be piped, 
 aerated, cooled, far more rapidly, more cleanly, less ex- 
 pensively, reducing cost to consumers, while improving 
 service. 
 
 "The price of milk at the farms/' what of that? A 
 just, even liberal price must be paid, or adequate supply 
 cannot possibly be maintained. It is ridiculous folly on 
 both sides to have "milk strikes" in city or country. 
 
 To KNOW what "just price" is, and to help promote 
 adequate, quality, economic, milk production, the Milk 
 Corporation should directly own and conduct a number 
 of "experimental farms" under varying conditions, and 
 should "tempt" individual enterprising farmers to "test" 
 plans and "show results" by "prize" or "premium" offers. 
 It can especially "finance" some of them, helping to en- 
 
92 PEACE AND PROSPERITY VIA 
 
 large or improve herds, build silos, buy land for pastures, 
 drain, develop, improve, in any direction that may pos- 
 sibly benefit milk supply. 
 
 The Milk Corporation starts with a million dollars 
 capital and the city supplies further as "need" and "re- 
 sults" warrant. Whatever "per cent" that capital costs 
 the city (certainly less than half the average cost to in- 
 dividual enterprises) the Milk Corporation must charge 
 milk consumers such price as will pay all expense of ser- 
 vice, up-keep of plant, and such "dividend" to capital as 
 the city pays in interest. No "subsidy," no "charity" is 
 desirable in connection with the New York City Milk 
 Corporation "River of Milk." 
 
 Cost of milk delivery through "licensed stores" should 
 certainly be under 1 cent a quart, and delivery by 2-ton 
 milk trucks serving every house and apartment they pass 
 should be under 2 cents a quart; these items added to 
 wholesale price to farmers should bring highest cost to 
 consumers, even under present "war conditions," down 
 to 12 cents and near 10 cents, and when "normal times" 
 come again, prices would of course be still lower. 
 
 "WHY STOP AT MILK?" 
 
 "One thing at a time and that well done leads to ex- 
 cellence" is a good, wise old "copy-book" motto! 
 
 Make a "thorough job" of the milk program and when 
 that is done, just change the one word "milk" in the title 
 of our corporation and make it "New York City Com- 
 modities Corporation" and buy and supply all farm pro- 
 ducts in the same way, build mammoth "abattoirs" and 
 supply the city's meat and "beat the meat trust" and the 
 foolishly expensive "private meat shop" methods (bad 
 as present milk methods), and so on with all "commodi- 
 ties" in universal use. 
 
 The "economic millenium" is not yet here, and will 
 never come by "just talk," but it is easily within the 
 reach of ordinary mortals by "practical sense" effort. 
 
JUSTICE AND PRACTICAL SENSE 93 
 
 SELF-HELP THE BEST KIND OF HELP 
 
 A famous poet credits an ancestor of the writer with 
 the wise saying (not original, evidently, as he quotes 
 it): 
 
 "If you would be well served, 
 Serve yourself, and do not leave it to others." 
 
 Newspapers of all classes Republican, Democratic, 
 Progressive, Religious, Agricultural are "chock full" of 
 complaining, arguing, prodding, etc., because of economic 
 and other conditions, and seemingly nearly everybody 
 looking to Congress and legislatures to "set right" the 
 "time . . . out of joint." 
 
 But is there, in fact, a cloud or other trouble in the 
 economic sky which it is not now, without further legis- 
 lation, easily within the power of those who are inter- 
 ested to "get together" and dispel, or overcome, far bet- 
 ter than there is hope for legislators to do for them in 
 the next hundred years ? 
 
 As an example take the greatest, latest "achievement," 
 the Parcel Post, against which nothing need be said, 
 except to point out the easy practicability of something 
 else infinitely better. 
 
 Here are the facts: 
 
 After years of clamor by "the people," Congress has 
 provided that we may ship the little limit of 20 pounds 
 (the original law) 300 to 600 miles for the sum of a little 
 over 4 cents a pound = $4.15 per 100 pounds. 
 
 Before us lies a routine freight quotation, 100 pounds 
 400 miles for 28 cents (instead of $4.15) or the same 
 in "carload lots" for 13 cents per 100 pounds, and there 
 is no 20-pound "limit" as to weight of package. Here is 
 "bloated monopoly" railroad service at about one-thirty- 
 second the cost of Government service! 
 
 The only advantage the Government gives is "local 
 
94 PEACE AND PROSPERITY 
 
 delivery." It would be a "cinch" to contract for such 
 local delivery, an average of three miles, at the railroad's 
 charge for 400 miles, and thus "deliver," including 
 freight, for one-sixteenth the charge made by beneficent 
 "Uncle Sam" ! "Uncle," it is expected, will do the job 
 "at a loss" ! 
 
 And it would be hard to name an article in general 
 use which it is not easily practicable to have brought into 
 any community within 400 miles of New York at "car- 
 load lot" cost of freight shipped with other goods, of 
 course, to the local stores of the "Industrial Republic" 
 coming, now, in that quantity every day in the week, to 
 merchants. Thus with the "self-help" of co-operation 
 Parcel Post becomes almost entirely needless, the self- 
 help being "on the spot" and far-away the cheaper. 
 
 Are we a lot of impotent imbeciles that we can not 
 get together and serve ourselves, when the service de- 
 sired is a nearly universal want, and the matter is so 
 simple as handling packages? 
 
 Why not "stop howling" awhile and get together and 
 serve ourselves? 
 
PEACE AND PROSPERITY VIA 
 
 POST SCRIPTUM 
 
 "Profitable Patriotism"?! Words of reproach? Op- 
 probrious possibly, sometimes. It depends on the thing 
 done. 
 
 Again such patriotism is glorious highest honor. 
 For, not only is "godliness profitable" in the religious 
 sense, but also in the economic sense, and so also is "pa- 
 triotism profitable," to the nation, the state, the com- 
 munity to the patriot's children, though he may have 
 suffered in body and estate. 
 
 This book can hardly be "profitable" to the writer, in 
 money will probably take dollars where it brings dimes 
 nor is it desired that it sould "pay." It has given him 
 "big" pleasure trying to be of service to other "patriots," 
 the mass of American people. 
 
 And "there's billions in it" of real "dollar profits" 
 (laws of logic and immutable mathematics demonstrate 
 it) for the "Men Who Pay the Freight." Scores of bil- 
 lions of dollars for honest, thrifty Savings Bank deposi- 
 tors, when they force "statesmen," by public opinion, to 
 give depositors justice, to "unshackle the Postal Savings 
 Bank," as herein proposed. 
 
 We have yet to hear from an editor, economist, legis- 
 lator, or common "man of sense," in disapproval of any 
 essential herein proposed (of course, details may be 
 varied and improved will be), with "any reason why 
 not that will hold water better than a sieve" ! 
 
 But you "haven't noticed" newspaper pages "ablaze 
 with the fire of agitation for a good cause" for right 
 and justice? A few editors have spoken out in hearty 
 commendation not one against. 
 
 Most editors seem "afraid," want first the "consent of 
 the governing" financiers and politicians want to see, 
 first, "which way the cat will jump" ! 
 
JUSTICE AND PRACTICAL SENSE 
 
 Editors widely print and laud the bragging bulletins of 
 our present shackled Postal Savings Bank, which is hard- 
 ly short of a "contemptibly small iniquity" as compared 
 to the "real thing" an unshackled Postal Savings Bank 
 would be. 
 
 "A conspiracy of silence" reigns over editors and legis- 
 lators generally perhaps no wonder, since "silence" is 
 the only safe answer to our argument. 
 
 "W. S. S." (War Savings Stamps) are "boomed" 
 abundantly (properly, justly so) but no mention is made 
 of an unshackled Postal Savings Bank (which would pro- 
 duce $10 to $50 where W. S. S. produce $1) to which 
 scores of millions of depositors would flock like hungry 
 men to a feast, were opportunity given, without need of 
 being "prodded" to patriotic saving! 
 
 Now it is "up to you" to help "wake up" editors and 
 Congressmen. Write and ask them "why not?" Tell 
 them: 
 
 "I vote for an unshackled Postal Savings Bank." 
 
 "I vote for Uncle Sam's Automatic Railroad Regula- 
 tor." 
 
 Get others to do the same. 
 
 The "powers that be" v/ill "get busy" when you get 
 busy ! 
 
 J. B. A. 
 
 If you want this book, or any printed matter we have, 
 to distribute, you can have! at bare cost thereof. 
 
THIS BOOK IS DUE ON THE LAST DATE 
 STAMPED BELOW 
 
 AN INITIAL FINE OF 25 CFISITQ 
 
 /SJJ 
 
 9Apr'59GM 
 
 28Nov59RHt 
 ; LD 
 
 (,0V 17 1959 
 
 i.n II. .v>, 
 
IB '197/6