EFFECTIVE INDUSTRIAL REFORM DAVID C. REID UNIVERSITY OF CALIFORNIA SAN DIEGO I Effective by DAVID C. REID Pastor of the Congregational Church Stockbridge, Mass. FIRST THOUSAND PRESS OF THE EAGLE PRINTING AND BINDING COMPANY PITTSFIEL.D, MASSACHUSETTS 1909 COPYRIGHT CONTENTS INTRODUCTORY STATEMENT PART I. THE PRESENT CRISIS Chapter I. Justice Dethroned 1 II. The New Despotism Its Rise 12 III. The New Despotism Its Might 18 IV. The New Despotism Its Evil Fruit 43 PART II. METHOD OF EFFECTIVE REFORM. Chapter V. Our General Plan of Reform... 77 VI. Fundamental Features First Group 89 VII. Fundamental Features Sec- ond Group 109 VIII. Rules Governing Invest- ments 113 " IX. Fundamental Features Third Group 128 PART III. RESULTS FROM THE ADOPTION OF THIS PLAN Chapter X. The People Supreme and Jus- tice Enthroned 141 XI. Efficiency Attained and The Universal Welfare Promoted.. 152 PART IV. CONCLUDING TOPICS Chapter XII. The True Socialistic Program. 168 XIII. The Labor Union and In- dustrial Reform 203 " XIV. The American Farmer and Industrial Reform 203 XV. Questions and Answers Method of Promoting the Reform 213 " XVI. Responsibility of the Church for Industrial Reform 245 XVII. A Final Word of Encourage- ment and Warning 265 APPENDIXES Appendix I. The Forces Promoting Immigration. 275 II. The Wages of Immigrant Labor. 277 III. Distribution of Wealth under our Plan 279 IV. Method of Recording Investors in the order or their Turn by the Card- catalogue System 281 INDEX. INTRODUCTORY STATEMENT The object of this book is not to stir up hatred and strife between the rich and the poor, nor to incite work- ingmen to revolt against those who employ them, nor to condemn the men who have attained to wealth, le- gitimately, by the present system a system for which we all are responsible, but to move all classes to join together in remedying the defects of our present indus- trial and commercial organization. The evils of the industrial world today are simply insufferable. A manly self-respect, as well as a wise philanthropy and the love of justice demand that they be removed. The supreme conflict to-day is not between capital and labor, nor between the smaller corporations and the larger corporations, but between that new Despotic Power, which has established itself over us, and the whole people of these United States. The object of this book is to show how the domination of an irresponsible and all- powerful oligarchy can be overthrown, the people made supreme, Industrial warfare abolished, and justice and efficiency established within our whole industrial and commercial life. The plan of industrial reform unfolded in this book was wrought out prior to 1897. The searching ques- tions which have followed many addresses given on the subject, have enabled me to perfect the plan in detail and meet objections. Here I desire to thank the kind friends who have aided me in the publication of this book. DAVID C. REID. Part I. The Present Crisis. CHAPTER I. JUSTICE DETHRONED. The conviction is taking possession of all minds that we are approaching a crisis in the development of our industrial and commercial life in America indeed, in the whole world, which imperatively demands a re- form, or a new forward step in our industrial evolution. For two important indictments are made against our present system. The first is that justice as a governing principle has been abolished from the industrial and commercial world and in its place has been enthroned the law of the might of the strongest, or, that might makes right. The second is that there has arisen in the free re- public of these United States a new despotic power, greater than that of the Caesars of old, a power which threatens to reduce the whole people to a condition of common subjection to a most oppressive tyranny. I refer to the irresponsible Business Corporation. Both of these indictments are true; and both evils which they represent originated historically in a common source, the failure on the part of the people, at the beginning of their national history or, at the proper time in the course of their industrial and com- mercial evolution, to assume resolute, collective control over their industrial and commercial life. It is these two evils, in their origin and results that I intend to discuss in the first Part of this book. Z EFFECTIVE INDUSTRIAL REFORM. In the explanation of any system of human society and the diagnosis of its ills, it is important to know What is the character of the principle lying at its root. Now it is a simple fact that the very principle which lies at the root of our present industrial system is essen- tially vicious and of necessity leads to injustice, spolia- tion, and the birth of despotic power. Before our government was formed, our fathers had become wearied with governmental monopoly and special privilege granted in the industrial and com- mercial world, by old-time despotic authority. In order to raise a revenue, it was customary for previous governments to grant to different individuals, special monopolies on different articles of industry and com- merce, the government of course would receive a large percentage of the profits or a large sum, paid outright for the privilege granted. Now, our fathers had become wearied with this despotic policy. And when they founded the Ameri- can government, by a natural law of reaction, they went to the opposite extreme, and repudiated all con- trol over the industrial and commercial realm. Knowing nothing of collective control on the part of the people, they said, "Away with all governmental interference of every kind in the industrial world. Throw every man onto his own feet. Let competition be free. And intrinsic merit will win, justice will be done, and all will be well." They thus turned the whole industrial and com- mercial world over to the free exploitation, the ambi- tion, the warfare of individual men. They called this JUSTICE DETHRONED. 3 a policy of liberty. But it was liberty without law, liberty with no organized co-operation or general con- trol. It was a policy of pure anarchism,* identical with the policy advocated by German and Russian anarchism to-day. And this is the policy which now lies at the root of our whole industrial and commercial life. And out of this policy has come all our trouble. Justice Dethroned. Its first effect has been to de- throne justice as a governing principle in the business world and enthrone the law that "might makes right." To one who has always revered the present com- petitive system as something divine and infallible, this indictment may appear startling and untrue. And yet a little examination proves that it is fully sustained by facts. For that laissez-faire, anarchistic policy issued im- mediately in just what might be expected. It precipi- tated the members of society, at once, into an intense individualistic struggle and compelled each man, even when inclined to fair-play, to adopt for his motto the uncompromising law of, " Every man for himself." It was as if the wealthy owner of a rich treasure- house should throw the doors of the house open to a crowd of men and say, "All these treasures are yours. Now every man for himself. To the strongest belong the spoils." We can well imagine the violent scramble that would ensue. All sense of justice would be forgotten. There would be pushing and hauling and shouting. Blows would be struck. Some would be fortunate and grasp *The term anarchism means "no government control." 4 EFFECTIVE INDUSTRIAL REFORM. much; others, crowded out, would gain nothing at all. Combinations would be formed by the strong to beat the weak. And last of all, a few men would, in time, combine to get possession of the whole treasure-house and guard all its wealth for their own special use. This is just what has taken place in the industrial world during the little more than one hundred years of our national history. These United States constitute a rich treasure-house whose treasures are ever increasing in value and quan- tity. There are its rich lands and fertile soil, its vast forests of lumber, its mines of ore and coal; and every new industry is a new and vast treasure, rich in divi- dends, to be exploited for human gain. At the very beginning of our national history, the government said in effect to the people of these United States, "We assume no control over your industrial life. All these treasures are yours. They belong to every body. Let each man plunge in and get all he can." The result has been the creation of an intense in- dividualistic scramble. In the general struggle all justice has been forgotten. Each contestant, even when inclined to fair play, has been compelled, as I have said, to adopt the motto of: "Every man for himself." Thus a deadly struggle has been precipitated be- tween man and man, corporation and corporation, and class and class. And the general law forced upon all is, "Let him take who hath the power And let him keep who can." JUSTICE DETHRONED. 5 This dethronement of justice as a governing prin- ciple in the industrial world, and this plunging of society into a mad scramble for wealth, was emphasized and justified by a strange error into which our fathers fell. Having abolished all governmental interference and adopted the policy of free competition, they believed that justice would be self-acting. "Let us throw every man onto his own feet and keep competition free," they said, "and the law of supply and demand, oper- ating with intrinsic merit, will issue in even-handed justice everywhere." "If wages get too high com- petition will quickly bring them down. If they get too low, the absence of competition, which will inevitably follow a reduction, will force them up again." The same law, they said, will regulate prices, divi- dends, and investments. Thus they argued that under the operation of free competition, justice would be self- acting and justice would always be done. In the reaction against governmental monopoly and special privilege, our fathers looked upon free compe- tition as the new principle that would bring in justice everywhere. They gave it the most exaggerated power. They exalted it as the heaven-ordained law that must in no wise be interfered with. Obey it and justice would prevail. But if under free competition justice was self-acting, what was the logical conclusion as to the use of con- science? The conclusion was that conscience was en- tirely unnecessary in the industrial and commercial world. Its use would be the injection of an artificial and, therefore, disturbing factor, disturbing to justice 6 EFFECTIVE INDUSTRIAL REFORM. itself. "If," they said, "you want justice in the indus- trial and commercial world, pay no attention to con- science, but give free scope to the operation of com- petition." "Buy at the cheapest market, sell at the dearest." "Pay the wages that competition calls for." "Do not bother yourself about right and wrong, and this natural, self-acting, law will bring about even handed justice for all." Thus it is a simple fact that justice was, from the very first, deliberately and rigidly banished as a deter- mining factor from the industrial and commercial world. It was banished, indeed, not because our fathers did not believe in justice, but because they believed that that system which they had adopted, in the place of the old, would, by a natural and inevitable process, bring justice of itself. Thus conscience was drugged, put to sleep, by this utterly false conviction. The result was that men en- tirely ceased from asking what is just and right in any business transaction. They only asked, what is the market price? Or, what does competition compel me to pay? And one reason why we cannot persuade men to-day to consider questions of justice in relation to wages, prices, or the distribution of wealth, is because they are still under the domination of the conviction, utterly false, that our present system works out, and must work out, even-handed justice. And there- fore any interference on our part will be an artificial and disturbing influence. But with justice banished from the industrial world, what was the law that took its place? It was the law JUSTICE DETHRONED. 7 that "Might makes right." And from that moment, wages and salaries, opportunities to work and to invest and enter business, were never left to the arbitrament of justice rationally determined, but to the issues and arbi- trament of the general struggle, to the arbitrament, in short, of the relative strength of the parties concerned. What is it that to-day fixes the price of wheat paid to the farmer? What but the relative ability of the farmer to demand, and of the capitalist buyer to pay, what he will? What determines the compensation or wages paid to the laborer? What, but the relative ability of the laborer to demand, and the capitalist employer to pay, what he pleases? When corporations hire men, do they ask, "What wages does justice demand?" or - "For what price can we get the men?" What determines the compensation which the con- sumer shall pay for food, clothing, coal, rent, gas, or freight? What but the relative ability of the con- sumer, on the one hand, to pay, and the capitalist seller to demand, what price he will? If the laborer can, at any time, force from his employer an unjust wage, he considers it his good fortune and gladly embraces the opportunity. Or if the employer can force the laborer down to starvation wages, he considers it his right to avail himself of the opportunity which "Providence" has thrown into his hands. Considerations of justice never enter industrially into any of the above transactions. Organized Robbery. But not only was the prin- ciple of justice deliberately banished from the industrial 8 EFFECTIVE INDUSTRIAL REFORM. world, but the policy which our fathers adopted invited dishonesty and created the predatory spirit. It inevita- bly justified and enthroned organized robbery, and made it a regular factor in the industrial and commer- cial world. When men are engaged in fierce competitive battle, the temptations to dishonesty are very great. It is inevitable that each man will come to believe that all other men are trying to beat him, and, hence, in order to win he must try to beat them. The result is that very soon, everywhere, men strive to get some special advantage over the rest, so as to compel them to pay their price. This is done, at first, it may be, in self- defense. But what is done at first in self-defense is soon done from the mere greed of gain. The result is that to organize a hold-up over the people comes to be a regular factor in the game and is regarded as perfectly justifiable, in view of prevailing conditions. And when great interests are at stake, men do not hesitate to bribe legislatures, violate every law and even commit great crimes in order to win. This is just what has come to pass in these United States. Organized robbery has come to be a regular factor in the game. Hence, our present indus- trial system says to the capitalist, "Send your ships to Europe, fill the country with immigrants to compete with American Labor. Get a high tariff on your goods, but keep immigration free. Then engage men to work at the lowest wages that hunger, dependent families and fierce competition shall force them to take. And even to these young girls Who otherwise should arouse JUSTICE DETHRONED. 9 all your sense of chivalry, show no mercy. For that is business, and our present system can do no wrong." It says to every set of men who have the power to organize, for example, a gas trust or an electric light monopoly, "Go ahead. Organize. Beat down com- petition.. Buy up the city council. Get a 'cinch' on the public. Then charge as high a price for your product as you please. It is your industrial right to do this. Everyone else would do it if he could. You are acting only upon the law recognized by all." It says to the Coal baron, who is really rendering to the public in this great co-operative society no greater service than the farmer or the mechanic, " Get posses- sion of all the coal fields in the country at a mere song. Pay taxes on coal lands, worth $25,000 an acre, as if they were cheap farm lands worth only $4 an acre. Engage labor at the lowest wage. And if you are able to mine the coal so that the whole cost of the coal to you is less than $1.00 a ton and then sell it to the public for from $5 to $10 a ton, it is your industrial right to do so. You are acting as everybody else would act in your place, in harmony with the law which every body has freely adopted. For "To the strong belong the spoils, and to the power- ful belong the fruits of toil." Our present system says to the Business Promoter, "Organize a new business concern. Put into the business watered stock equal to, or double and triple, the actual capital invested. And then cause the public to pay you profits on this watered stock so that you 10 EFFECTIVE INDUSTRIAL REFORM. can realize a dividend of 30, 40, 50, or even 100 per cent on the original capital. For this is business. "Or if you prefer, when you have thus watered the stock to twice its value, sell the water to the innocent public, and when all their money is safely secured in your own pocket, squeeze the water out, leaving it in the possession of the duped public. For that is business." In the formation and administration of every large business, one of the normal, organic features entering into it, is not merely to produce a needed article of commerce, but to organize at the same time, if possible, a "hold-up" over the people, while defending one's self against being held up by some other organi- zation. The one supreme concern of the Standard Oil trust, and every other monopoly, is to destroy all com- petition so as. to bring the public into their grip and then dictate prices and wages, undeterred by any principle of justice or fair play. Prof. Edward W. Bemis was informed by those who know that "if a man should go to Wall Street to float some new industrial enterprise, demanding sev- eral millions of dollars, the questions which capitalists would ask are, "Have you a patent granting you the exclusive use of some important machinery or have you a special tariff protection or, have you a secret railroad rate giving you an assured advantage over all competitors, or, have you a corner on some limited source of necessary raw material, as, a mine, or limited timber lands, or, have you special rates of taxation or special methods of evading taxes? If you have any of these, we are willing to consider your enter- JUSTICE DETHRONED. 11 prise, but if not, we can have nothing to do with it." In relation to the same matter, it should be said that certain directors of the Standard Oil trust affirmed that they would give almost any price for a monopoly, but would pay only the cost of re-duplication for a com- petitive business. Thus our industrial and commercial system has been converted into an agent of organized robbery. The members of society, plunged into a mad strug- gle for wealth, have flung the last shred of conscience to the winds. Justice has been completely dethroned. Strong men deliberately rise to the top by ruthlessly trampling on the necks of those below them. The members of society have been plunged into a con- dition of merciless war. Man struggles with man and corporation with corporation. And last of all the in- dustrial world has been rent asunder into two mercilessly warring bodies, Capital and Labor, each of which knows no law but the mad determination to beat the other, at whatever cost to themselves and injury to society, while the farmer is crushed under the heavy heel of both. CHAPTER II. THE NEW DESPOTISM ITS RISE. But the evil fruits of that anarchistic policy inno- cently adopted by our fathers, did not stop with the evils narrated in the preceding chapter. The unprin- cipled warfare of man with man and class with class, always gives birth to that portentous thing, the organ- ized tyranny of the Man and the gang at the top, who grasp at all power and rule all with relentless sway. This is just what has taken place in these United States. When our government was formed, the people, as I have before declared, repudiated all collective control over their industrial and commercial activities. But no people can repudiate collective control over their own affairs, and escape the fate of subjection to despotic power. For if the people will not take firm control over their own affairs, sooner or later some irresponsible combination of men will take firm control for them and rule them with despotic sway. As I have shown in the preceding chapter, the first effect of repudiation of all collective control over in- dustrial affairs, was the plunging of society into a con- dition of industrial and commercial war, from which every consideration of justice was abolished. There was and is simply a fierce competitive struggle for wealth, in which the weak are ruthlessly trampled down by the strong, and there is no such thing as justice in regard to opportunity to work, wages, salaries, income, and opportunity to invest. 2-3 * .. to M- d) O O ill - ce-s a S'S S o.2 a> -u "^3 111 - 2 .s 5 00 '[* f ' t-c -|J . 11 05 &< O" M w"* ^ "^ OQ H ^ oj K g > * S s "-^ B r'-u ^ o3 S I ri (H ( 01 O iw O a^ *- (-1 A VILLA IN THE BERKSHIRES. THE WESTINGHOTJSE SUMMER RESIDENCE. This villa overlooks Laurel lake and is surrounded by extensive grounds of many acres, kept beautiful and in perfect repair by companies of working men. Many of the estates in the Berkshires embrace hundreds of acres, abounding in beautiful groves, artificial ponds, drives, meadows, secluded walks, and mountain forests. THE NEW DESPOTISM ITS RISE. 13 But the evil did not end here. While the people have been warring with each other, man with man and class with class, a strong group of men have been quietly laying hold of every source of power. They have gotten possession of this vantage ground and of that; of this commanding industry and that citadel of commercial supremacy; they have quietly consolidated their power until, to-day, they actually or practically hold possession of the whole industrial and commercial activities and oppor- tunities of the country. The agent through which they have consolidated and now wield this Imperial power is the modern, ir- responsible Business Corporation. The business corporation is no new thing in the world. Like civil government it has existed in essence ever since the beginning of civilization. For wherever two or more men have joined together for co-operative effort in the industrial and commercial world, there was the business corporation in essence. But while the business corporation is very old in essence, its modern form and vast magnitude are entirely new. In former years, when everything was manufactured by hand, when transportation was slow and communi- cation difficult, the stock company, the business cor- poration, was necessarily small and insignificant. But with the evolution of the vast factory system and the development of our vast railways, telegraphs and tele- phones, the business corporation has assumed a magni- tude and a power comparable with, if not greater than, that of civil government. For the business corporation 14 EFFECTIVE INDUSTRIAL REFORM. has come to be in the business world what civil govern- ment is in the political world; it is the agent through which all industrial and commercial activities are con- solidated and brought under the control of one unified power. And as all political power in the United States has become unified and concentrated under one civil government which rules from the Atlantic to the Pacific, so all the industrial and commercial activities in the United States have become, actually or practically, consolidated and unified into one vast Business System or corporation, which wields a power greater than government itself. Now, it is evident, that such a power, so vast, so potent for good or evil, should be directed and control- led only by the sovereign will of the people. But it is a simple fact that, however accomplished, the control of the Business Corporation is held in the strong grasp of a few irresponsible men a small group whose membership, indeed, is ever changing but whose despotic control is continuous and ever increasing in magnitude. They rule the whole business world with almost unrestricted sway. They hold positions of almost ab- solute power, and yet are responsible to no man, either for the exercise of that power or its duration. They wield a power greater than Tamerlane's, and the people are utterly helpless in their grasp. In utter contempt of the people's rights, they aim at nothing short of obtaining absolute ownership and control, of the whole wealth and Industrial power of the country, indeed, of the world, making the whole minister to their will. THE NEW DESPOTISM ITS RISE. 15 They have dared to invade the sacred halls of legis- lation, in city, state and nation, and they have cor- rupted and bribed law-makers regularly, in the interests of corrupt corporations. The people's liberties have been threatened. For while having the form of popular government, yet government is prostituted to the in- terests of the few; and through the necessities for food and clothing owned by the few the rest of the people are brought into a condition of subjection to those who have thus grasped all power. An article appeared in 1906 in " The World's Work" describing political conditions in Venezuela. From the moment that one enters the harbor of La Guayra, every- where he feels the presence of "the Man and the Gang" at the top, says the writer. Their creatures are every- where and at every turn he has to pay toll. This Man with his associates though he gives himself high- sounding titles and talks of patriotism and all that, is but the head of a band of plunderers, fattening at public expense. And he will remain in power until another man with another gang appears able to thrust him out. But whatever changes may take place, it is always the Man and the Gang that are in control, and it is the people who are ruthlessly plundered. The same condition prevails in the United States in the industrial realm. We have long ago discovered the man and the gang in the political realm. But we are coming to see that these are but the creatures of a larger Man and a stronger combination, whose exist- ence has been only recently discovered. For wherever we go, into whatever department of industrial life we 16 EFFECTIVE INDUSTRIAL REFORM. enter, we feel everywhere the presence, the absolute power of the Man and the combination of men who control all. A certain writer says that there are 450 trusts in the United States, which control nearly all our indus- trial life. But as a matter of fact, these 450 trusts are coming to be but different ramifications of one great trust under the control of the same industrial magnates. For the same men are largely in all these trusts. "Mr. Stuyvesant Fish in an address, pointed out that while there are thousands of directors in the great corpora- tion of the United States, yet the number of men who bear the majority of the directorates is very small. The trustees of three great life insurance corporations alone held more than one thousand four hundred direc- torates."* Chauncey M. Depew at the time of the uncov- ering of the Insurance scandals was director in 79 different corporations. The men who are at the head of Stand- ard Oil, are also manipulators of Amalgamated Copper; and the men in Amalgamated Copper are interested in the mines, and own the railroads; and the men who own the railroads will be found interested in the Beef trust. And so it is. All our industries are in the con- trol of the same group of irresponsible financiers. And though there sometimes arise quarrels among the mem- bers of the group, yet they have learned the necessity of keeping their quarrels out of sight and combining to fleece the people. Thus we see that our industrial policy, beginning historically in a competitive individualism, has issued *See World's Work, July number 1904, page 1772. THE NEW DESPOTISM ITS RISE. 17 in an overtowering plutocracy, which all history shows is essentially vicious and leads inevitably to oppression and spoliation. For all history shows that there is no evil against which the people should be more alert than the insidious encroachments of despotic power. For despotic power not only despoils its victims, but de- prives them of all power of resistance. It gradually destroys freedom of speech, it degrades the mind and thrives on the degradation of the people. It destroys all virility of character. And unless its encroachments are speedily resisted, it soon so reduces its victims that all successful resistance is impossible. Such are the effects which we are already beginning to experience as a result of the operation of that despotic power which has fastened itself upon us. CHAPTER III. THE NEW DESPOTISM ITS MIGHT. It is difficult for the people of this free republic, accustomed to regard themselves as supreme over their own affairs, to be convinced that such a despotic power as I have described has arisen among them. And yet that this new Imperialism is terribly real and wields a rjower comparable with that of the Caesars of old, is seen upon a little consideration of the facts in the case. FIRST ELEMENT OF ITS POWER. In the first place, it can be seen that this new power fixes all wages and salaries, indeed, the income of all classes with despotic sway and gives its favorites the lion's share. In proof of this wrong, one has but to compare the income of the Trust magnate and promoter, with the wages and salaries of the working man or the income of the farmer and others. Figures are generally uninteresting things, but the following list of the salaries paid to the presidents of some of our big corporations should be carefully weighed. In weighing them, it should be borne in mind that every dollar paid to these men must come out of the common earnings of the people ; and if one class re- ceives more than its share of these common earnings, another class must receive less than its share. If there are six apples to be divided between two boys, and one boy appropriates four of the six, then the other boy can receive only two. MORRIS K. JESSUP VILLA, LENOX, MASS. Morris K. Jessup (now deceased) was president of the New York Chamber of Commerce. His charitable and religious benefactions were widely known. THE NEW DESPOTISM ITS MIGHT. 19 SALARIES OF SOME BIG CORPORATIONS. 1. Insurance Societies. The New York Mutual Life $150,000. The Equitable 100,000. The New York Life 100,000. NOTE. These were the salaries before the investi- gation in 1904. They have been reduced since. But they were reduced only under the strong pressure of public sentiment. 2. Big Railroad Presidents Pennsylvania Railroad Co $75,000. Chicago Rock Island and Pacific Ry. Co 50,000. Pennsylvania & Reading Ry. Co 50,000. New York Central & Hudson River Ry. Co. ... 50,000. Great Northern Ry. Co 50,000. Southern Ry. Co 50,000. Erie Ry. Co 40,000. Lehigh Valley Ry. Co 40,000. Atchison System (Sante Fe) 40,000. Chicago and Northwestern Ry. Co 40.000. 3. Express Companies Adams Express Co 50,000. United States Express Co 50,000. American Express Co 50,000. 4. Bank Presidents National City Bank, New York 60,000. First National Bank, Chicago 40,000. Aggregate salary of 18 men $1,085,000. 20 EFFECTIVE INDUSTRIAL REFORM. Does any one believe that these men earn these vast salaries? 2170 men have to be taxed $500 apiece to pay those 18 men their salaries. Do we not believe that if we had public ownership, by some appropriate method, we could engage men to do their work at a less price ? The president of the Bank of London receives only $10,000 a year. Why should we pay to the president of the National City Bank of New York a salary of $60,000? The talents, business ability, and tact needed to run a large university are probably as great as those requiring to run a railroad, and yet the salary paid to the president of Harvard University is only $7,130 and house.* But the salaries paid to these men in high finance do not by any means represent all their income, paid to them by the public. The salaries of these men are often concealed. They are sometimes designedly made very small in order to deceive the people. But they come back to the officials in the form of commissions, dividends, graft, and other profits. In order, there- fore, to learn the compensation of many of these men we must bring before our minds their whole income and even the earnings of a life time. Let us for a moment compare the compensation of the farmer with that paid by the country to a well- known Steel magnate. *The salaries of some college presidents are as follows: Harvard $7,130 Yale 7,500 Wisconsin State University 7,000 The smaller colleges less than 5,000 Compare these with the salaries of the corporations. THE NEW DESPOTISM ITS MIGHT. 21 A young man who begins life to-day as a farmer and is industrious and skillful does well, if after 30 years of- the severest toil, he is worth $6,000. That means that to the farmer who supplies bread and meat and milk to the community, we pay for his services besides his living which is a meager one the compensation of $200 a year for 30 years. This embraces wages and dividends. Not a very exorbi- tant reward for all the toil and service which he renders. But what did we pay to the Steel magnate for his work of running a Steel Bridge company and organiz- ing the Steel Trust? It is said that this Steel king was worth when he went out of the business some $300,000,000. Let us assume that he made that sum during the last thirty years of his business career. Then, according to -this rough estimate, we, the people of these United States, paid, in effect, this Steel magnate annually for his ser- vices in the iron business on an average, the sum of ten millions ($10,000,000) and paid this every year for thirty years. This of course included his salary, dividends and other profits. It is almost impossible to grasp this sum as compared with the $200 paid every year to the farmer. Suppose, therefore, that we think of it in terms of the salary which we paid to the President of the United States. For however great be the services rendered by the Steel magnate, we hardly think that any one will say that they were greater in value, or required a larger complement of powers, than those of our President. 22 EFFECTIVE INDUSTRIAL REFORM. We paid our President in those years for his vast and varied services as head of this nation $50,000* per year, what do or did we pay to the Steel king? Two hundred times $50,000 or $10,000,000 a year. In order to grasp what this means, we must obtain a visual representation of these different sums. If we should place a $50,000 bill in the left hand to represent the president's salary, we would have to pile two hundred $50,000 bills in the other hand to represent the yearly income of the Steel king. Or if we should write the amount, $50,000 on one page to represent the president's salary, we would have to write the same symbol two hundred times on the oppo- site page to represent the Steel king's yearly income. Thus, Salary of the President of the United States: $50,000 Paid every year for four or eight years. Compare this now with what we paid the Steel king for his yearly services as given on the next page. *This was the president's salary prior to 1909, when it was raised to $75,000 a year. THE NEW DESPOTISM ITS MIGHT. 23 Average Yearly Income of the Steel King. $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50.000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 200 times $50.000. Paid in effect every year for thirty years. These astounding figures are not exaggerations. They have been gathered from the most reliable sources. We challenge any one to show that they are not strictly true. Indeed, these figures do not tell the whole story; for there are men of wealth, whose aggregate income is three and four times that of the Steel King just cited, or from $30,000,000 to $40,000,000 a year. 24 EFFECTIVE INDUSTRIAL REFORM. As we look at these figures, can we not easily learn why nine-tenths of the people are in poverty while the rest are fabulously rich? Can we not readily under- stand why young girls in our cities must work for most meager wages and the locomotive -driver, the mechanic, all artisans, and all teachers must labor on a barely living wage or salary? Can we not understand why prices are rising higher and higher? Is it not because we pay such immense sums to these princes of high finance and their families that there is little left for the working man, the working girl, the teacher, the scien- tist, and the college Professor? Dr. Charles B. Spahr declares that one-eighth of the families in America receive more than one-half of the aggregate income, and the richest one per cent receives a larger income than the poorest 50 per cent.* And whence arises this vast injustice in relation to wages and incomes? It arises from the simple fact that the Industrial magnates in control of the Corporation, fix all wages and salaries with despotic power and take to themselves the lion's share. For who is it that to-day determines the wages paid to both skilled and unskilled labor? It is the irresponsible corporation. Who is it that by determining all prices received by the farmer for his wheat, cattle, cotton and tobacco, -fixes the in- come of the farmer? Again, it is the irresponsible corporation. Who is it that by setting the price, fixes indirectly, the salary of the school teacher, the college professor, and the minister of the Gospel? and who is it *See Spahr's Present Distribution of Wealth in the United States THE NEW DESPOTISM ITS MIGHT. 25 that determines the salary and other perquisites of the Magnates themselves and their henchmen? It is a simple fact, as every intelligent man knows, that all these wages and incomes received by these different classes are fixed, and fixed with despotic power by the magnates themselves who are in control of the corpora- tion, and they fix all to their own profit and advantage. There are two sources of this power. FIRST All jobs, or nearly so, are in control of the corporation; and SECOND Immigration is practically free. For every job there stands a man or a woman from the old world depressed by ages of tyranny, ready to take the job at any price. The result is that the in- dustrial magnate can say to every American, "Take this job at my price or leave it." And though in America to-day, we are doing industrial team-work, and every man should have the right to be heard equally with every one else as to what wages should be, yet in the presence of the industrial magnate he is utterly helpless. And the most serious thing to be considered in this matter is this fact that this difference in wages and sal- aries is fixed by despotic power and the people have no means of effective protest. For if this despotic power continues where will spoliation end? Will not this reduction of the wages of working men, these low prices paid to the farmer and the small incomes received by other classes, continue until all the people, working men, farmers, and others are reduced to the level of the depressed peasantry of Europe and there will be no redress? 26 EFFECTIVE INDUSTRIAL REFORM. Here, then, is the first element of this new Imperial power. It fixes all wages and salaries with despotic sway. The possession of this power alone is sufficient to condemn the present system as destructive of justice and tending to reduce the people to complete servitude. For whosoever is able to fix despotically the wages and salaries of the people, holds the very life of the people at his mercy. No man nor any group of men should be allowed to hold such power. And yet such is the power that is held and exercised to-day by the Irre- sponsible Corporation. But this does not tell the whole story of this new Despotism. SECOND ELEMENT OF ITS POWER. In the second place this new despotic power is able to determine with unrestricted sway, who shall work and who shall not work, who shall enter into busi- ness and who not, and who shall mount to positions of influence and power in the business corporation and who remain at the bottom. As I have already intimated, all jobs are held in the control of the corporation. If a man wants work in the shoe factory or the paper-mill or in the cotton factory, he must seek it at the door of the corporation. He may be engaged or turned down at its pleasure, and for him there is no redress. The corporation may turn off a whole army of working men whose labors have built up the business, and it may bring in a whole army of immigrants for no other purpose than to force wages, already depressed, to a still lower level. The despotic THE NEW DESPOTISM ITS MIGHT. 27 corporation cares nothing for the welfare of the immi- grant or the rights of the working man already here. It sets the one in competition with the other and there- by despoils both. If those in control are dissatisfied with any man for his political views or socialistic ten- dences, they can discharge him and give no reason therefor, except their own will that he should go. And these men at the head of the corporations, elect themselves to office, dictate their own salaries and other perquisities, and hold their positions at their own will. When the panic in 1907-8 occurred, the corporations turned off hundreds of thousands of men. But not one word was said about turning off some of those high officials whose mismanagement, dishonesty and graft had caused the panic. They were immune. The wages of hundreds of thousands of working men were reduced , although they were then receiving wages far below the demands of justice. But nothing was said about re- ducing the salaries of those men in high finance, though some of them were receiving as high as $75,000 a year. These princes of high finance hold their positions at their own will, however incompetent, corrupt, and pre- daceous they may be. But the people are taken on or turned off to starve with no voice whatsoever in the matter. But the power of the corporation in this matter does not end here. No man to-day can enter into any large business enterprise except on the permission of the large corporation. A young man in the East with sufficient capital proposed to his uncle, who was well experienced in the 28 EFFECTIVE INDUSTRIAL REFORM. West, that he (the young man) should establish a bank in some Western town. But the uncle warned him to be careful what he did. "For," said he, "Eastern capitalists now have their agents in all the West who keep their eyes upon all the places favorable for banking, and unless you have a strong backing they will wait until you get your plant established, and then they will, by their superior capital, run you out and ruin you. They mean to hold all such fields open to themselves alone." A young man,* in a small town in Massachusetts, well acquainted with a certain wire needed in the manu- facture of Card-clothing, resolved to go into the manu- facture of that particular wire. He felt that by his knowledge of the wire needed and the methods of its manufacture, he could produce it at a lower cost than any other establishment. He, therefore, bought his machinery and began to build his plant. But there was a large Wire Corpora- tion in the neighboring city which, although worth millions, was determined to hold all the wire business for its own particular benefit. They, therefore, quietly waited until the young man had his plant established. Then the large corporation immediately placed its price on that particular wire at such a low figure that the young man could not manufacture it except at a loss. They thus drove him out of the business. And in the end the improved machinery, for which the young man had paid twenty thousand dollars, was sold to the *The writer is personally acquainted with the persons included in this transaction, and knows the facts. And it is typical. THE NEW DESPOTISM ITS MIGHT. 29 Trust that had crushed him for the nominal sum of two thousand dollars. A few years afterward the two men who owned the Trust sold out to the United States Steel Company for $8,000,000 cash. Here we see that, although making their eight millions, yet they would allow no one else to share in the same profitable enterprise. They wanted it all. And with uplifted club they said to every man who should presume to go into the wire business, "Enter if you dare." So it is with every other business. It is under the absolute control of the men who are in power in the industrial world. The door of opportunity is open only to themselves and those whom they elect to enter. Finally. In every corporation, it is taken for granted that the son or other near relative of those in control is to be advanced over all others to positions of influence and profit. And this is done again and again to the in- jury of the industry concerned. But the whole story of the Despotic Corporation has not yet been told. THIRD ELEMENT OF ITS POWER The irresponsible Business Corporation fixes, to its own profit with ^despotic power, all prices and the quality of commodities paid for. If the people should have justice in relation to wages and salaries, they should also have justice in relation to prices and the quality of the goods received. Now it is a simple fact that all prices on meat, flour, coal, cotton and woolen goods and all other commodities are 30 EFFECTIVE INDUSTRIAL REFORM. fixed, either directly or indirectly, by the business mag- nates in control and this to their own advantage. They thus extort a tribute from the people every time that any one buys a pound of meat, or a barrel of flour, or a gallon of oil, or a ton of coal. The result is that prices in the aggregate have risen to an appalling height within the last few years. It is estimated that the cost of meat since the formation of the Beef Trust in 1903 has increased from 30% to 50%; while the price paid to the cattle raiser has de- creased from 20% to 30%.* And the general cost of living has increased from 40% to 50%. Even where there has been a lowering of prices, the decrease has not kept pace with the decreased cost in its production and the increased demand in its consumption. And prices are frequently raised by the corporation arbi- trarily for no reason except the greed of gain. When the War between Russia and Japan broke out in 1903, the price of flour was immediately advanced $1.00 a barrel, and that for no reason except that the war gave the magnates the power to make the demand. They said to the people of the United States, "Pay our price or we will send the flour across the Pacific." Now is it right for any class of men to hold such des- potic power? Is it right for the people to be thus rob- bed after the manner of the stage coach by the high- way robber? And then there is the dishonest adulteration of goods, and all to the profit of the bandit gentlemen in con- *See Greatest Trust in the World, Chap. X. by Chas. E. Rus- sell. H S p > I rS M I "a? O O ^ ^ o H >, 2 o S *? O s 5 1 I 03 " 6C O l-g 1 1 t, *G x> -*-* *-i J 03 O K , .J " W) cS (M a 3 .2 "2 ^ a o _ bd bO o3 3 a 73 -a 43 a ,J5 J3 > T. 141 3 J-g * THE NEW DESPOTISM ITS MIGHT. 31 trol. There is adulterated tea, and adulterated coffee, adulterated sugar and adulterated kerosene oil. There is the raising of inferior beef and the selling of it for the prime article. There is shoddy cloth, and all wool goods whose material never saw the sheep's back. And there are shoes made of shoddy leather, which fall to pieces as soon as they are worn in the rain. And all this is done to the profit of the Corporation. It is not infrequent for the manufacturers of some first class article made and kept first class until the confidence of the public is estab- lished, to suddenly adulterate or deteriorate the ma- terial of which the article is made and thereby reap hundreds of thousands of dollars in a single output, or in a single year. Thus, by fixing the prices of all commodities, with despotic sway, these men in high finance are able to extort a tribute from the people every time that they buy any article, however small. And they thereby wield a power of spoliation equal if not greater than that of the Caesars of old. And for the people there is no redress so long as the present system shall last. FOURTH ELEMENT OF ITS POWER The Business Corporation holds irresponsible power over all sources of Investment; it influences and, in a large measure, determines with despotic sway, to its own profit, the rise and fall of stocks, the price to be paid for stocks, the dividends to be earned by capital and holds practically all the savings of the people at its mercy. 32 EFFECTIVE INDUSTRIAL REFORM. Next to the right to receive a just compensation for service rendered, and obtain commodities at a fair price, is that of investing one's savings where they shall be safe and at the same time earn a just and equal divi- dend to the investor. And this right should be most jealously guarded by the people. Now I maintain that our country's industries are able to afford, and in a wise providence are designed to afford, this opportunity to invest to the people. And they ought to afford it to the whole people alike. All should be able to invest their savings with equal safety, profit, and permanency. Every man's dollar invested in these industries should earn as large a dividend as any other man's dollar. And if there is anything in the present constitution of our industrial and commer- cial world, making the exercise of this right impossible, then our industrial and commercial system should be changed and justice should be done. Now I maintain that it is right here where this new Despotism exercises its most terrible power. (1) Unjust Dividends. For, in the first place, the princes of high finance in control of the Corporation, hold all the great sources of Investment in their exclu- sive grasp and reap enormous dividends to the spoliation of the people. Take Standard Oil. According to the investigation in 1908, the original capital invested in that industry was only about $69,000,000. And yet in the year 1907 its net earnings were $80,000,000, or, 116%* on the actual capital invested. And of this, it actually *See Report of Investigation in N. Y. Times, Nov. 21, 1908. THE NEW DESPOTISM ITS MIGHT. 33 paid to the investors, $39,000,000 or about 56% on the original capital, holding the rest in reserve. Here then is a vast industry belonging by moral right to the whole people of the United States, whose energies created it and 'now support it, earning a dividend of more than 100%, or $100 yearly on every $100 invested; and yet it is held within the powerful grasp of a few irresponsible men who hold it to their own exclusive profit. Take the Beef Trust. A careful estimate by an expert shows, that this industry must realize a divi- dend of at least 43%* and that on stock doubtlessly heavily watered. Suppose that it realizes 50% on the actual capital; what does that mean? It means that another great industry built by the energies of the whole people and supported by their trade and labor, is paying a net dividend of $50, at the very least, on every $100 invested. And yet this industry like Standard Oil is held in the grip of a small group of men who hold all to their exclusive aggrandisement. Take the Railroads and Express companies. The World's Work for June 1908 quotes Thomas F. Ryan as saying, and saying correctly, that the stock in all the Railroads built prior to 1885, was 95% water. That means that the original investors paid only about $5 per share. Now when we bear in mind that these roads are quoted at, from 100 to 150, and at this quo- tation pay a dividend from 4% to 6%, we can easily see that the railroads are paying the enormous divi- dend of from $80 to $100 on every $100 originally *See The Greatest Trust in the World Chas. E. Russell, p. 162. 34 EFFECTIVE INDUSTRIAL REFORM. invested in them. And yet these great transportation systems, whose every dollar earned comes out of the labor of the people, these vast sources of profit, are owned and held in the grasp of a few irresponsible men who hold all to their exclusive advantage. There are woolen factories and other industries in New England which are known to earn a net profit on the actual capital of from 100% to 200% and even more. Then take the Banking system. A banker in New England informed the writer of this book that the Chemical bank of New York City (1907), paid an annual dividend of 150%. It was able to do this owing to having, in addition to its capital of $300,000, a surplus of $400,000. Another bank of New York, having paid large annual dividends for years, paid, in 1908, an as- tonishing surplus dividend of 1900%. This was done by paying to the stock-holders the surplus accumulated through a few previous years. Thus we perceive that the large industrial and com- mercial enterprises of this country are paying enormous dividends on the actual capital invested. And this is not to be wondered at. Owing to the multiplication of vast labor-saving machinery, the cheapness of immi- grant labor, the new methods of business, the correla- tion of part with part, and the integration of correlated industries into one whole, all our industrial activities are enormously productive. And yet all these vast sources of wealth and power, are held within the exclusive grasp and to the^exclusive profit of the few irresponsible men in control. THE NEW DESPOTISM ITS MIGHT. 35 The injustice of these enormous dividends gouged out of the earnings of the people is especially apparent when we compare them with the dividends earned by the people. For what is the percentage paid to the people on their investments? If the people place their money where it is safe in a good Savings bank or safe Industrial, they can earn generally only from 3% to 4% or from $3 to $4 on each one hundred invested, which is only about one-tenth or one-twentieth of the dividend earned by the princes of high finance on the same amount. Is this Just? But some innocent person asks, "Cannot the people invest in these large industries also if they choose? Are not stocks always for sale?" Yes, these stocks are for sale. But the price upon them is placed so high by the princes in control as to make their purchase prohibitory or so as to destroy all great profit in the dividends. Standard Oil stock, which cost the investors only about $70 a share, could not be bought in December 1908 for less than $660 a share. Railroad stocks, which cost the original investors only $5 a share cannot be bought now for less than from $100 to $150 a share. In many a profitable Electric corporation and Woolen Mill, stocks cannot be bought practically at any price. It is, therefore, a fact that all these profitable sources of investment are held in the exclusive grasp of the irresponsible men in control. And the people are simply kept out. It is sometimes argued by people who are either very innocent or very crafty, that the enormous risk, 36 EFFECTIVE INDUSTRIAL REFORM. which the promoters of vast, new enterprises under- take, makes it right for them to reap an enormous profit when the enterprise proves to be successful. But this argument is utterly unjust. For, first, it is we may say never the promoter's money, but the people's money, borrowed by the pro- moter, or received through the sale of stock which is put at stake in these new enterprises. Secondly, these promoters always charge and take out of the people's money an enormous commission for their services; and this commission, often amounting to $75,000 a year, is taken out before a dollar is spent in the new enterprise. Hence, as all history of modern business shows, when a new enterprise fails, it is the people who loose everything, while the business promoter comes out of the affair a wealthy man. When Amalgamated Copper, in 1901, failed to realize all its glowing promises, it was the people who lost everything. It was the promoters who nevertheless made $100,000,000. When the Metropolitan street rail- way of New York city went into the hands of the re- ceivers in 1907, it was the thousands of innocent in- vestors who lost all, while the promoters came out of it multi-millionaires. (2) . Grasp and Hold all Profitable Sources of Invest- ment. These princes of high finance owing to the superior knowledge which their position gives, are able to learn, and acquire possession of all the safe and profitable sources of investment, leaving the poor invest- ments to the people; they are able to obtain control Country Club in the Berkshires. o o H THE NEW DESPOTISM ITS MIGHT. 37 of all the new and profitable industries ; and to discover and corral all the new resources of the country. A real estate corporation can easily learn by virtue of its business position where all the land around our cities and all real estate within them will increase in value. And quietly watching its opportunity it can get all these sources of wealth within its possession and hold them until, by the growth of the city, it can reap millions, gouged out of the earnings of the people. By the same process the business men at the head of the large concerns are able to learn and get control of all the opportunities to start new and profitable industries, in electric light, street railways, and man- factures. By the same process they are able to corral and have already largely corralled all the vast resources of this country in Timber, Coal, Oil, mines of Gold and so forth, and that for a mere song. And they hold all to their own profit. And the superior knowledge which these men possess is not owing to the fact that they are in any wise superior to the rest of the people, or because they possess superior talent in any way, but solely to the fact that the position which they hold in the accident of birth or business position gives them an enormous advantage over all the rest. And these men in high finance are able to obtain possession of nearly every invention and use it to their own profit. It is the custom now in many corporations to pay the man in their employ who reveals especial ingenuity, an increase of wages say of 50 cents a day, with the agreement that all the fruits of his inventive genius shall be given to the corporation for which he 38 EFFECTIVE INDUSTRIAL REFORM. works. Thus, these men in control obtain possession of new inventions for a mere song, which yield them often hundreds of thousands of dollars. The inventor is helpless; for every industry is in the control of the corporation and he must sell the fruits of his brain to them at their price. Often the inventions of the people are used to drive the people themselves out of employ- ment and to bring in a lower class of labor to take their place. Thus all good investments, all resources, all new industries and all inventions, the fruit of the people's ingenuity, are ruthlessly seized by the irresponsible oligarchy at the top, and held to their exclusive profit and for the spoliation of the people. (3). Despoil of Both Capital and Dividends. These princes of high finance are able, by virtue of their high position and the necessities of the people, to win the confidence of the people and then despoil them of both capital and dividends without mercy. Widows with little children, laborers who by severe denial have saved a meagre pittance, school teachers, and others, feel often that they simply must obtain a larger dividend on their savings than that paid by the savings bank. Predaceous gentlemen in the business world will often quietly increase the earnings of the stock in an apparently safe railroad or industrial. Then when the confidence of the people is established, large amounts of stock are sold to them at an advanced price. But no sooner is the people's money safe in the pockets of these bandits than the dividends are rapidly decreased, the value of stock rapidly decline and the people, fear- THE NEW DESPOTISM ITS MIGHT. 39 ing that their whole capital is going, sell back their holdings at a greatly reduced figure to the very gentle- men from whom they purchased the stock. The rob- bers of course pocket the difference. This game is a constant practise in the business world. A new business is often started or an old one re- organized* for the sole purpose of robbing the people. The new business is largely advertised. Names great in the business world are cited as standing sponsor for the new deal. The capital invested is quoted far above the actual amount. Enormous dividends are promised. Statements are made fitted to deceive the very elect. The confidence of the people is carefully worked up. Then at the right psychological moment the stocks are launched onto the public. The people thinking here is a good thing, pour the savings of a life-time into the new enterprise. But no sooner is the money safe in the pockets of the bandit promoters, than the boom bursts. Stocks decline, and the people are robbed. In the Amalgamated copper dealf of 1901, in which ap- peared men in Standard Oil and other large industrials, the people were gouged out of over $100,000,000. When the owners of some old but hitherto paying business see that it is threatened with a decline, owing to the invention of a new machine, throwing all power into a rival concern, or to the loss of the timber supply *Reorganization for new robberies is now one of the normal processes of business. See story of Metropolitan system in Mc- Clure's, from Nov. 1907, to Jan. 1908; in particular McClure's Jan. 1908, p. 323. "Great American Fortunes," Burton J. Hendrick. fSee Current Literature, May 1904 or The Truth About Trusts, by John Moody. 40 EFFECTIVE INDUSTRIAL REFORM. or some other cause, they quietly sell the stock right and left, before the decline can be known to the people. And when they have thus unloaded onto the innocent public, they quickly withdraw. The business goes to pieces. And with the capital of the people in ' their pockets, the robbers enter into some new enterprise more prosperous than before. Thus there is no justice or safety for the people in the matter of investments in the great industrials and other utilities of the country. By the processes just named, widows, school-teachers, and millions of laboring people, are fleeced again and again and there is no redress. (4). Graft. By their position in the corporation they are able to devise and practice, undetected, stupen- dous schemes of graft. This is done by payment of commission, by making corrupt bargains with them- selves as directors of different corporations. Mr. Rus- sell in The Greatest Trust in the World (p. 27) intimates that the Red Line, and Blue Line and White Line are " chromatic devices by which stockholders are defrauded by railroad officials, and private hoards increased." But I cannot dwell in the many ways of graft here. The evil is notorious.* (5) . Monopolize All Industries. By their command of all the great markets and all the great utilities, the irresponsible corporation is beginning to force the people out of every industry and all investments that still remain to them. *See The Greatest Trust in the World Chapter V and XIII. by Chas. E. Russell. See also The Story of Life Insurance by B. J. Hendrick in a series of Articles in McClure's, beginning Mav, 1906. THE NEW DESPOTISM ITS MIGHT. 41 The time is coining when all our village stores, even, will be sold out to the big corporations and owned by them to their own profit. The time is coming when all houses in city and vil- lage shall be owned by these lords of finance; and whosoever rents and that will mean all the people will be obliged to rent of the big corporation at its price. The time is coming when all the farm lands shall be' owned by the industrial magnate. Already prices are so depressed that the farmer finds it more profitable to sell his farm to the magnate and hire out to him on a small yearly salary and house rent, than to farm it independently. Thus, if the present system continues, without doubt the time is rapidly coming when all the land, all the homes, all industries, all the transportation systems and every other utility and source of wealth, shall be held in the absolute ownership of the predaceous Oli- garchy in control. And the people, reduced to a con- dition of absolute subjection to the new Imperialism, will be absolutely helpless. (6). Consolidating Imperial Control. Finally, those in control are seizing every means available to complete and consolidate this work of imperial power. They have laid hold of the government. They systematically corrupt and control city councils, state legislatures and the federal government in their in- terests. Defended by their unprincipled henchmen, the corporation lawyers, they violate all law with impunity. They have thus created for themselves a power greater 42 EFFECTIVE INDUSTRIAL REFORM. than all civil courts, greater than the government, greater than all other authority whatsoever. The policy of pensioning the employees by the corporation, is but an astute device, to reduce the working man to entire subjection to the oligarchy in control.* And they are determined that the people shall not be enlightened as to the terrible peril that threatens them. The irresponsible corporation, by its vast patronage, exercises a controlling influence, over many of the news- papers in the country. Very few dare to offend this new Imperial Power. It exercises a dominating in- fluence over colleges, schools and churches. No person unfriendly to it can hope to rise to any position of in- fluence in school or college or Church or State. They have their henchmen in all the large factories, who loyally aim to keep the people in subjection. They aim to call in the most ignorant people of the old world and to mingle antagonistic races in such a way as to make combination among working men out of the question. Thus every effort is being made to extend and con- solidate the power of this new DESPOTISM which has fastened itself upon us. *See Chapter XVII. "SHADOWBROOKE" FORMERLY THE STOKES VILLA. This villa overlooks Stockbridge Bowl, a beautiful Berkshire lake. This picture gives no conception of the extensive grounds, surrounding the house, kept in repair by companies of men, and made as beautiful as nature and art can achieve. NOTE. The horses, cattle and poultry on these wealthy estates in our country, are far better housed, far better fed, and better cared for, when sick, than the wives and children of common working people and farmers in these United States. CHAPTER IV. THE NEW DESPOTISM ITS EVIL FRUIT. The evil effects of this abolition of moral law as a governing principle from the business world and, espec- ially, this enthronement of despotic power are most marked and fast becoming insufferable. In the first place, it can be seen from the proceeding pages that they have resulted in annihilating all jus- tice and equality of opportunity in every realm of the industrial and commercial world and converted our industrial system into an instrument of injustice and oppression. In order to have justice in the great complex organiza- tion of human society, we must have justice and equal opportunity in each of the three great functions of our Industrial and Economic system. First, we must have justice and equal opportunity in relation to the vocations of life, that is, we must have equal opportunity to enter into every vocation or position which human society offers, and each man must receive a just compensation a just wage, for the work which he performs. And he should have equal opportunity with every one else to say what wages justice demands. Second, we must have equal opportunity to buy all commodities at a fair price, and we must have ample protection from adulteration of goods. And, third, we must have equal opportunity to in- vest our savings with safety, profit and permanency. 44 EFFECTIVE INDUSTRIAL REFORM. In the establishment of justice and equal opportun- ity in these three great economic functions, lies the foundations of individual and national wealth. I am aware that the first essential factor in making a living and acquiring wealth is the man himself and the degree of skill and thrift which he possesses. And I advocate a new school system to train the people vocationally. But I maintain that there is another necessary factor, which we have largely overlooked, and yet which is equally essential, if the individual is to acquire wealth in the present day, namely, a just and efficient Industrial and Economic system. For no man to day can make a living or acquire wealth all by himself. He is born within a system, within the organization of human society. When our country was young, a man might, indeed, go with his wife into some unoccupied part of the new country and, provided he could protect himself against the In- dians, he might make a living practically all by himself. He could take up a new piece of land, build his own house and become his own employer and his own hired man. He could supply himself with all commodities, and invest his capital wholly in his own property in the land he cultivated and the cattle he raised. In such a condition, we may say that the man's ability to make a living and acquire wealth was wholly depend- ent upon, and determined by, himself alone. Outside of nature's forces, he was the only factor concerned. But today another factor enters in, a factor of equally dominating power, namely, the Industrial aud Commer- cial system within which each man is born. o K O Some houses of the foreigner who builds our railroads, factories and other utilities. To compete with the foreigner, under the present system, the American working man must be willing to live in homes like these; for both foreigner and American are at the mercy of the prince of finance. THE NEW DESPOTISM ITS EVIL FRUIT. 45 No man today can make a living by himself or be- come his own employer or his own hired man. The whole earth with all its resources has been seized by, and come into the possession of human society. And human society has become organized into a single great plant called the plant of civilization, or into a single great, quasi corporation which we may call the Corpora- tion of Humanity. Hence, today, no man can supply himself with work, as in the case just cited, outside of the corporation of human society. He must obtain it as the gift of the great corporation or system in which he is born. And he must become the employee of this system. The head of a railroad corporation is morally no more his own "boss" or employer than the brakeman who works under him. Both are in reality the hired men of the great corporation of human society. And the compen- sation which each receives comes not from himself but out of the aggregate earnings of all the workers within human society. And no man today, in reality, buys anything of himself. For no man today produces, all by himself, the things that he uses. Everything we use is the pro- duct of the combined labor of human society. The millionaire coal-baron, sitting in his luxurious home on a winter's evening, cries, " what is there that I possess and have not produced myself?" And yet as a matter of fact, nothing that he possesses, not even the coal that has come out of his own mine and now burns in his own grate, was produced by himself. And if he were deprived of everything that has been created by 46 EFFECTIVE INDUSTRIAL REFORM. other hands than his own, he would stand in a desert as naked and helpless as on the day of his birth. Thus it is true that everything we use must be purchased of this great corporation called Human society, and we must pay the price which this corporation or some one in control within it, dictates. The same law holds in regard to Investments and Dividends. No man today can invest his savings, to any extent, in his own property. His savings, if in- vested at all, must be invested in this great plant of Human society and especially in the great Industries of the land, in its Railroads, Factories, and material resources. And the proportion of the aggregate divi- dends which each man receives will be determined by those in control of this great industrial and commercial plant. We see, therefore, that in the present day there are two essential factors, each equally important, that enter into the making of a living and the acquisition of indi- vidual wealth. The first is the ability, the thrift of the man himself, and the second is the character of the great Industrial and Economic System, of which we all are a part, and from which none of us can escape. Those, therefore, who say that the only factor in the acquisition of individual wealth, is individual com- petency and thrift are utterly wrong. We must have also a just and efficient Industrial and Commercial system. Indeed, the whole Plant of Civilization must be founded in justice and efficiency. And I care not how skillful and thrifty a people may be, nor how well trained in industrial schools, if their industrial system is inefficient, THE NEW DESPOTISM ITS EVIL FRUIT. 47 and, especially, if it is unjust, if it grants special privilege or special advantage to some one class or some one vocation, if it gives one class the power to exploit the rest, then it will be simply impossible for the rest to rise above the condition of severe poverty. They may work hard and toil long and late, but their severe toil, their very skill and thrift, will go only to the advantage of the plunderers at the top. Now such is the condition of our Industrial System today. And, the first evil result flowing from the de- fects of our Industrial system is that justice and equality of opportunity have been absolutely abolished from every function of that system. There is no justice today in the matter of wages and opportunities to work and enter business. It is reported that before Mr. Taft went into politics, he earned or at least received an income of $50,000 a year from the profession of law. Now, that is a pretty large income for one man to take out of the aggregate earnings of the country. But how much do we pay to the teacher in our public schools ? From $500 to $5000 a year. Now it is a fair question to ask, and it implies no disrespect to Mr. Taft to ask, Were Mr. Taft's services to this country as a lawyer worth that much more than the services of the teacher? Or did he get his big income because his calling gave him power to compel the country to pay it? In short, does this difference in income arise from the fact that the lawyer's profession gives its holder the power to gouge while the profession of the teacher does not? Does justice or something else determine this vast difference in the 48 EFFECTIVE INDUSTRIAL REFORM. compensation received by different men for the service which they render? The great mass of so-called common laborers are not incompetent neither are they thriftless. There are some among them, even as there are some among those at the top, who are incompetent and wasteful. But the greater number of common working men are earnest, hard-working people. And they .are skilled in their particular vocations. They love to take care of horses and cattle, to plow the land and make things grow; they love to work before the machines that make boots and shoes and other utilities. And yet while the men at the top receive a salary of from $50,000 to $150 000 a year, these common workers receive only from $1.50 to $2 a day; and their wives must forsake their homes and their little children, for the factory, or their wealthy neighbor's wash-tubs, or to do a man's work on the farm, in order to eke out a miserable living.* *The census reports of 1900 gives the average weekly wage of men, women and children as follows: Textile Trades, 661,451 workers: Men, $7.63 per week; Women, $5.18 per week; Children, $2.15 per week. Iron Workers Trades, 222,607 workers: Men, $10.46. Boot and Shoe Trades, 142,922 workers: Men, $9.11; Women, $6.13; Children, $3.40. Men's Clothing Trades, 120,950 Workers: Men, $10.90; Women, $4.88; Children, $2.61. See The Church and Modern Life, p. 142. .143, by Washington Gladden, 1908. Read also the valuable report by Prof. Robert Coil Chapin of Beloit College on " The Standard of Living among Working Men's Families in New York City. ' The general conclusion is that wages are too low for families to live in comfort. This conclusion is con- firmed by reports of conditions of wage-earners in Pittsburg pre- pared by several experts, published in the January, February and March (1909) numbers of The Survey. It shows that a family in- come of two dollars per day is miserably insufficient for the essentials of American living while present prices are maintained. THE NEW DESPOTISM ITS EVIL FRUIT. 49 Now it requires no microscopic analysis nor keeness of judgment to see that this vast inequality is most un- just; or to see that as long as the present system endures there is no hope for the lower ranks of labor. No matter how skilled or thrifty they may become, they can never receive the large bounties of life nor lay up anything for old age. And this stupendous injustice and wrong arises from the two sources which I have described in the preceding Chapters. First, we have repudiated justice as a governing principle or standard from our whole indus- trial and commercial life; and, second, the whole plant of civilization has been seized by a small financial oli- garchy* who control all to their own profit. Justice cannot exist under such conditions. There is, therefore, no such thing as justice in the rel- ative salaries or compensation received by the different workers of hand and brain in the United States. There is everywhere injustice and spoliation. And this is true, both of the immigrant who has just come and the older worker in the land. Both are despoiled and oppressed. The same indictment can be brought against prices and the quality of the goods paid for. Owing to the fact that we have no method of fixing prices, except the relative individual power to charge and demand from others what he will, and since all our great industries have come into the possession of des- potic power, as I have shown, the fixing of prices has been simply converted into a conscienceless agent of extortion, or the means of exacting tribute. The price of Coal, Oil, Clothing, Rents, are simply extortionate. *See "Our Financial Oligarchy," by Sereno S. Pratt, World's Work, p. 6704-6714. 50 EFFECTIVE INDUSTRIAL REFORM. And were there no other injustice but this in relation to prices, there would still be no hope for the lower half of the race. Finally, there is no justice in relation to Investments, the earning of Dividends and the acquisition of wealth. Three things are desired in relation to Investments, safety, profit, and permanency. But there is no such thing as justice in any one of these directions. Take the element of safety. The exploiters at the top can invest their money and keep it invested with almost perfect safety, for it never passes out from their control. But the common people's money is never safe because the moment that they invest it, it passes completely into other hands into the hands of the irresponsible oligarchy whose deliberate purpose- it is to plunder the people. The great mass of the people are simply shut out from investing in the great industries of the country for the simple reason that to invest means to imperil if not lose one-half or one-third and perhaps all their capital. And along with this, is constant anxiety and suffering. Then take the element of profit. If the mass of the people can earn a small dividend of 3K% or 4% on their money in a Savings Bank, they do well. But the princes of finance reap, as I have shown, from 50% to 100% and even 200% on their investments. Is this just ? Then take the element of permanency. The pro- moter's money is in for life, if he desires; and he hands his investments down to his children and children's children. These princes of finance thus hand down a (Courtesy of Pittsfield Journal.) Children in Day Nursery while the mothers are at work. Pittsfield, Mass. THE NEW DESPOTISM ITS EVIL FRUIT. 51 perpetual income of millions to their children so that they live all their lives without one thought of work or economy. They are given a perpetual income of thousands upon thousands to spend in absolute, irrespon- sible luxury and idleness. But the people's savings can be invested only for a limited time for three, or five, or ten years and, then, there is all the anxiety of re- investing it ; and often several hundreds and even thous- ands are lost in the process. Indeed, as I have shown, the princes of finance are waiting to despoil the people of both capital and dividends at every opportunity. Thus it is a fact that there is no justice and no equality of opportunity in any part of the industrial and commercial world. Justice as a determining factor has been completely dethroned. Despotic power holds the scepter of control. The very law of competition, which our fathers extolled as the instrument of justice, has been seized by despotic power and converted into the most powerful agent of spoliation and oppression. In the divine Providence, the purpose of industrial and commercial organization is to greatly increase the facility and the power of individuals to make a living and acquire wealth. And the object of this is to increase the happiness of the whole people, and free them from the slavery of toil that their minds may become occupied with higher achievements. But this whole beneficent purpose of Pro.vidence is thwarted by our defective system, which has been converted, instead, into a huge engine of injustice and oppression; and for the people there is no redress so long as the present system endures. 52 EFFECTIVE INDUSTRIAL REFORM. 2. Second Evil Fruit of this New Despotic Power the Unjust Concentration of Wealth. In the second place, this new despotic power has resulted, as was inevitable, in making the few enormously rich and powerful and the many desperately poor and helpless. It has unjustly concentrated the wealth and power of the country into a few hands. Mr. Cleveland Moffet, approved by R. G. Dunn and Co. has given a list of some of America's great fortunes. This list should be carefully studied and its significance carefully weighed. While studying it, it should be borne in mind that the wealth of this country is not the product of the energies of any one man, nor of any one brain. The wealth of this country is the product of the com- bined energies of the whole people. One man works in his little place and another in his; but we are all work- ing together. One man works chiefly with his hands, another works chiefly with his brains ; one man concen- trates his energies in a single department, another superintends many departments; but we form all to- gether a single vast industrial and commercial organiza- tion for the most efficient production and the just dis- tribution of wealth. It is true that one man's work is worth more than another's. There are expert workmen and good work- men and poor workmen. All therefore should not receive the same reward. But however expert a man may be, however high his position, he should not, thereby, be justified in seizing possession of the whole wealth of the country, nor should he reap . the THE NEW DESPOTISM ITS EVIL FRUIT. 53 product of the combined labor of the whole people. What the world demands to-day is Justice in the distribution of the fruits of our combined toil. Now in the light of this demand the following table implies a condition of injustice and peril which is appalling. Mr. Moffet's list, approved by R. G. Dunn & Co. 1. Ten richest men in the U. S. (1907) John D. Rockefeller $1,000,000,000 Andrew Carnegie 300,000,000 Marshall Field (died in 1906) 150,000,000 W. K. Vanderbilt 120,000,000 John Jacob Astor 100,000,000 J. P. Morgan 100,000,000 Russell Sage (died in 1906) 60,000,000 J. J. Hill 60,000,000 William A. Clark 50,000,000 William Rockefeller 50,000,000 2. Number of Fortunes. 10 aggregating 2,000,000,000 490 " 3,000,000,000 4500 " 10,000,000,000 5000 $15,000,000,000 This list is ominous. It shows that one man John D. Rockefeller owns one one-hundredth part of the aggregate wealth of this country. In other words, if there were only one hundred men in the United States, this man would possess only his normal share. But America possesses 54 EFFECTIVE INDUSTRIAL REFORM. one-fourth of the wealth of the earth. It follows, therefore, that if there were only four hundred men in the world, John D. Rockefeller would have only his share. It shows that 5000 men' own one-seventh of all the wealth of this country. In other words, if there were but 35,000 men in the United States, these 5000 men would own only their normal portion. Then think of the enormous incomes which these men must receive. If John D. Rockefeller receives only 3% on his wealth, his income is $30,000,000 a year, or counting 300 days in the year, $10,000 a day. Does he earn that amount? 60,000 men have to be taxed $500 a year to pay him his income. At 3%, the income of these 5000 wealthiest men in the United States (as given in the list), amounts to the enormous total of $450,000,000. 900,000 men have to be taxed $500 apiece to pay this income. And these enormous incomes are not turned back into the industries of this country to be usefully em- ployed in the welfare of the people. It is largely wasted in most extravagant living, including the building of costly yachts, automobiles, and marble palaces.* The extravagance of these wealthy classes outrivals that of the king and nobility of France in the days of Louis XIV which brought France into abject poverty and brought on the French revolution. It outrivals the wasteful expenditures of the aristocracy of ancient Rome which ruined the Roman empire and civilization. *See "The Woman of Millions How she spends her money," in Woman's Home Companion, March 1907. See also "Burning Money," by I. D. Marshall in The Boston Herald (Sunday) July 23, 1905. THE NEW DESPOTISM ITS EVIL FRUIT. OO And the large part of this wealth is not spent even in this country. The families of these wealthy men migrate to Europe, their daughters marry impecunious European noblemen and their enormous incomes are spent not in America but across the sea, and often in luxuri- ous and immoral ways that are a disgrace to civilization. When in 1908 an American heiress married a cer- tain European nobleman, her fortune was reported to be $20,000,000. At 3%, her yearly income on this fortune is $600,000. 1,200 men have to be taxed $500 a year to pay it. And this whole income probably has to be sent across the sea to be spent in Europe. When in 1906, another American heiress married a member of the English aristocracy, in London, her father settled on her $150,000 a year as "pin-money." 300 men have to be taxed $500 a year to supply this fair American with spending money. And yet it all goes to England across the sea. This aggregation of wealth in the hands of the few means the plunging of the people into abject pov- erty and suffering. Dr. Charles B. Spahr writing in 1892-4, divided the population of America into four classes, the wealthy, the well-to-do, the middle class, and the poorer class. And he showed that while the wealthy class embraced only 125,000 families or one per cent of the entire population, yet they owned more than one-half of the aggregate wealth of the country, and that their average wealth was $264,000 per family. The well-to-do classes embraced 1,375,000 families or one-tenth of the population, and they possessed about $16,000 to a family. 56 EFFECTIVE INDUSTRIAL REFORM. The middle classes embraced 5,500,000 families or nearly one-half of the population, and averaged about $1500 to a family. The poorer classes numbered 5,500,000 families or nearly all of the lower half of the population and aver- aged only $150 to a family. These figures are ominous. Charles B. Spahr wrote in 1892-4. Conditions are worse to-day. The aggregate wealth of the country then was estimated at $65,000,000,000. In 1908, it was estimated at the astounding aggregate of $118,000,- 000,000. And yet it is certain that the average wealth of the poorer classes is no greater, if it is not even less, than in 1904.- All this marvelous increase in wealth has gone to enrich the exploiting classes. As we study these figures it is not hard to see where the earnings of American industries largely go. Neither is it hard to see why the wages of working men are so small nor why one-third of the American people live in hardship and poverty nor why some 1,250,000 chil- dren must go under-fed and under-clothed, nor why the public school teachers in all our cities and in the country can be paid for their valuable and most trying services only barely sufficient to pay for their board and clothes, nor why the work of our churches at home and in the mission field languishes for lack of support. During the strike of 1904, the papers published a copy of the photographs of some of the daughters and coming wives of the laboring classes in the weaving factories of Lowell. It was my intention to republish them in this book. No one could see these pictures or THE NEW DESPOTISM ITS EVIL FRUIT. 57 be acquainted with the girls themselves and not say that they were just as womanly and noble in mind and heart as any of the daughters of the millionaires, no one could know them and not say that they were just as worthy of possessing leisure for recreation and culture, and that they were just as worthy of the com- forts and advantages of wealth as the daughters and wives of the rich. And yet just because such girls are the daughters of the laboring class, they are compelled before mar- riage to work six days in the week at the loom on a mere pittance of six or seven dollars a week. They have no time for healthful outdoor recreation. And when they become wives and mothers they will be com- pelled to do their own work. They will have to labor hard and struggle hard on limited means every day. They will never know the pleasure of listening to de- lightful music, of witnessing the exhibition of our nob- lest dramas. Constant toil will be their portion. By the time that they are forty the bloom will be off the cheek and they will be hopeless so far as their ever being anything else than drudges all the days of their life. Many will be obliged to continue to work in the factory after becoming wives and mothers. And they will have to endure all this in order that the daugh- ters and wives and often degenerate sons of the million- aire may live in idleness and luxury, spending often in a single day more than a working girl can earn in a life of toil. Compare for a moment the homes of the working man with the palatial residence of the millionaire on 58 EFFECTIVE INDUSTRIAL REFORM. Jekyl Island off the coast of Georgia, his winter home. This island is owned by the Millionaire's Club, of which, as its name indicates, only a millionaire can be- come a member. It costs $15,000 to be admitted into this Club, and $15,000 more to buy a lot on the Island. Three hundred men are employed the year round caring for the Island and keeping it in condition for the residence of these millionaires for three months in the year. During the season of residence, there are two thousand servants ministering to the wants and luxuries of these few millionaires and their families. They have a Club-house in which they can take dinner together, and in which are the recreation halls and parlors. They go there "to rest," and spend the time idling and sleeping through the day and in visiting and playing cards and bowling in the evenings. The whole Island is brought under the hands of the landscapers and made as beautiful as nature and art can render it. Now, is it right that one portion of society should enjoy all these extravagant luxuries, while the wives and daughters of another part, who are just as womanly and render to society a far greater service, are acquainted only with hardship, privation and hopeless toil? It is not infrequent among the wealthy to use $4,000 in a single evening's entertainment or ball, and even $45,000* has been spent in a single dinner and enter- tainment by a society woman. *"Mrs. Cornelius Vanderbilt spent $45,000 for five hours of pleasure and Newport did not think it so remarkable either. "- See "The Woman of Millions How she spends her money" in Woman's Home Companion, March 1907. THE NEW DESPOTISM ITS EVIL FRUIT. 59 In the month of April, 1906, in a sermon preached in the Church of the Epiphany, New York, Dr. Peters ar- raigned the fairer sex for their wasteful extravagance, saying that a leading dressmaker "declares that we have one hundred women who spend every year on dress $30,000 each, one thousand who spend $15,000 each, and five thousand who spend $5,000 each 6,100 women, spending an aggregate of $43,000,000 a year on dress alone."* "And this, "he added, "is in a city where upward of twenty per cent of the population are at some time during the year dependent upon charity for their daily bread, where one out of every ten is buried in the Potter's Field, where more than twenty thousand evictions occur each year in the Borough of Manhattan alone, and where seventy thousand children go to school every morning inadequately fed." Now when we reflect that society is a great organ- ized whole, all mutually inter-dependent, and remem- ber that one part cannot enjoy all these luxuries except at the cost of the poverty and destitution of the rest, we are impressed with the great injustice of our present industrial system which makes such inequalities in the distribution of the products of our common toil possible. All this Wealth Wasted, And here should be made an important observation. It is frequently affirmed that the money which the opulent spend in costly *"Miss Guila Morosini, daughter of former partner of Jay Gould, confesses that she spends $200,000 a year on clothes alone." See "The Woman of Millions How she spends her money," in Woman's Home Companion," March 1907. 60 EFFECTIVE INDUSTRIAL REFORM. dinners, entertainments and other vanities is not wast- ed because it goes to the poor for work. No greater fallacy was ever uttered. All this money is wasted and wasted irretrievably. To prove this let us assume that two men have each $50,000 to spend in giving work to 100 men out of employment. Both agree that this money should not be given outright but as a reward for work. The first man accordingly orders the men to carry a large pile of bricks across the street and back again; and he keeps them at this useless work all the summer. And at the end of the summer he pays them each $500 for his services. Now what has that man actually done with his $50,000? He has, it is true, kept the men in work; he has paid them $500 apiece or $50,000 in all. But their labor has been absolutely thrown away. It has produced nothing useful to them or anyone else. But let us look at the other man. He engages, like the first, 100 men in labor. But he sets them to work constructing dwelling houses for laboring men and says, -"all that you create this summer by your labor shall be yours." So they go to work. But when the Sum- mer is done, what have they produced by their labor? Or rather what has the second benefactor produced by the expenditure of his $50,000? Like the first man, he has kept 100 men in work and paid them $50,000. But in addition to this, these men have created ten beautiful cottages each worth $5000 in which as many families can live in comfort, for generations to come. The first benefactor therefore, we maintain, has flung his money away. He has it is true furnished 100 men THE NEW DESPOTISM ITS EVIL FRUIT. 61 with work for the summer. But he has engaged them in useless labor. He has paid them $50,000 but their work $50,000 worth of work, has been absolutely wasted as if it had been burnt up in the fire. So also when a society woman spends $50,000 in an evening's entertainment of five hours, she cannot claim that the money is not wasted because forsooth it is paid to the poor for labor. For it is paid to the poor for useless labor. She has supplied, it is true, many hundreds of people with work for several months. But all their labor has been wasted in gratifying the vanity of three or four hundred idle people, for five or six hours. Their labor has been thrown away as if burnt in the fire. Ever since the building of the pyramids in ancient Egypt down to the present time, despotic power has been seized with the mania of building costly palaces and of keeping up vast estates whose chief end is to minister to the pride and vanity of their possessors. All know how, in the time of Louis XIV, all the nobility were seized with the ambition to build the most costly structures, and how Louis the king sought to excel them all. And it is a historical fact that while billions of dollars were thus spent in erecting the most costly palaces and in maintaining the most costly estates which were of use to nobody except to minister to the pride of the aristocracy, the people were living in wretched hovels, and mothers, dead from starvation, were seen lying by the roadside with their emaciated infants still tugging at the breast which could no longer give them nourishment. 62 EFFECTIVE INDUSTRIAL REFORM. Do we not see the same thing taking place in this country to-day? Is not the labor of millions of men to-day wasted in building costly palatial residences in which their owners dwell only two or three months and often not at all during the year, wasted in caring for vast estates and keeping alive blooded horses f blooded stock and fancy poultry which are of no use except to minister to the pride of their possessors, while vast multitudes of the people must go inadequately housed, inadequately fed and inadequately clothed? I maintain therefore that the assertion is true that the money spent in giving work to men who build these costly structures and maintain these vast estates and in ministering to the entertainment of the rich, is wasted. The money is thrown away. It is spent in ministering to pride and vanity when it ought to go to build homes for the people and in producing for them bread and clothing and other necessaries of life. 3. Third Evil Fruit of this New Despotic Power Des- troys Efficiency of Production. Our present system like every other despotic power, is destructive of efficiency in Production. Our boast that, whatever be the defects of the present system, it promotes the greatest efficien- cy, is untrue. For first, in order to secure the most efficient produc- tion, it is evident that there should exist the heartiest peace and good-will between capital and labor. But our present system has thrown capital and labor into deadly antagonism resulting not only in deadly strikes and THE NEW DESPOTISM ITS EVIL FRUIT. 63 lock-outs, but in driving labor to handicap itself with labor rules and to handicap capital also. It is esti- mated by good authority that the city of Chicago lost $80,000,000 in a single year through strikes and threats to strike. Second. In order to the most efficient production the working man needs the inspiration of a personal interest in his work so that he will do his best. Said Homer three thousand years ago, "Jove fixed it certain, the self-same day, Makes man a slave takes half his worth away." Now it is a fact that the workman to-day, often ignorant and depressed by previous generations of oppression and having no personal interest in the busi- ness is little better or more efficient than the slave. He shirks when the back of the boss is turned, he wastes material as well as time. All inventive genius is dead and the man cannot do his best. Third. In order to the greatest efficiency, it is all important that the most efficient men be selected to serve as directors and managers of each industry. It is coming to be more and more a pronounced fact that the present system with its favoritism does not elect the best men to the highest positions in the industrial and business world. Fathers desire their sons to succeed them in business; but the sons, fre- quently spoiled by the very wealth of the fathers, are utterly incapable. Many a good thriving business on which the welfare of a whole community depends is wrecked, simply because its management went by in- 64 EFFECTIVE INDUSTRIAL REFORM. heritance to a rich but incompetent fool. Then it not infrequently happens that a bold bad man succeeds by his wealth to vault into control. And his whole en- deavor is first to loot the business and then sell the sal- vage for more than the sound business is worth. Again a disunited and warring management comes into power. And there is a most bitter rivalry. There is waste and neglect and disorder. All of which could be prevented if the people had the electing of the directors. It is a fact that owing to a bad management, thriv- ing industries have been wrecked again and again. And as a result whole villages have been ruined. All property in real estate has declined and working men, obliged to move to places where work can be found, have lost all. Fourth. In order to the most efficient production, all our industrial and commercial activities should be correlated and integrated into one whole. But under the present system this too is impossible. Two factors prevent it. First, the rivalry of industrial barons themselves and their constant struggle for power. For no sooner is any industry apparently integrated under one vast monopoly or Trust, than weakness creeps in, opposition and rivalry organize from without, and soon Trust is followed by Trust, just as in the States of South America, government follows government, and revolu- tion follows revolution. Thus, there is no permanent and abiding co-ordination and integration. Then, secondly, the people, suspicious of Trusts, are opposed to any such integration of our industrial activi- THE NEW DESPOTISM ITS EVIL FRUIT. 65 ties in view of the present control of all industries by the few. Hence we have laws against such co-ordina- tion and integration, making anything like a full inte- gration of our industrial life an impossibilty. There are other evils of the gravest kind of a gen- eral character, which hinder, and at times, almost arrest active production. To these I can only refer. First. The constant importation of ignorant, cheap labor makes it impossible even with a vocational school system, to maintain a generally skilled workmanship. And while this cheap labor serves the ends of plutocracy, yet it makes it impossible ever to make American in- dustries the most productive. It means a terrible impoverishment of production in the aggregate. Second. Certain American Industries are greatly enfeebled and even destroyed, in certain localities, by the greed of the corporations. The Beef trust by the destruction of the local slaugh- ter-houses and the low prices which it pays to the cattle raiser, has virtually annihilated cattle raising for beef in the East and has driven multitudes out of the business in the West. The result is an actual scarcity of beef in the country.* The Trusts pay such low prices to the farmer for his products, and yet charge such high prices for their own products sold to him, and Labor organizations have so raised wages, that the American farmer can scarcely live. The result is that the American farmer is being depressed into a peasant class. Many Ameri- *See Greatest Trust in the World by C. E. Russell, Chap. VI. "Blight of a Greedy Monopoly." 66 EFFECTIVE INDUSTRIAL REFORM. can farms, especially in the East, which could be run at a profit were it not for the greed of the Trust, are abandoned. Many local industries could be started and run at a profit, were it not for the tyranny of the Trusts which holds the club over every enterprising man and says "Go into this industry at your peril." It is also a fact that many a railroad and other in- dustry is handicapped and even made prostrate, for a time, because looted by those in control. Again. The greed of plutocracy has largely de- stroyed a good portion of the home-market for our com- modities. In order to have a home market, the people must have money with which to buy. In order to have money with which to buy, the people must be paid a just wage. But plutocracy, by depriving the people of their just wages, makes it impossible for the people to buy. The home market is thus destroyed. And we have periodically granaries filled with grain which the people cannot buy, though starving for bread. We have store-houses filled to the roof with clothing which the people, though naked, cannot purchase. The result is an arrest of production, while the people are hungry, naked, and without shelter . Finally. In the mad struggle for immediate wealth, in the rash fever of speculation, the pushing up of ficti- tious values, the wild extension of credit, the looting of Industries, the failure to make good the promises most solemnly made, there comes the periodic panic. And with the loss of all confidence, there follows a prostration of all business, from which recovery is very THE NEW DESPOTISM ITS EVIL FRUIT. 67 slow. In the meanwhile there is anxiety, suffering and frequent deaths by suicide. With these conditions prevailing, who will say that our American industries are the most productive pos- sible? Is not our boasting in this matter utterly un- founded? Not until we overthrow the power of organ- ized plutocracy, root and branch; not until we find some effective way by which to introduce organized co-operation, directed by the sovereign will of the people, in its. place; not until we are able to secure and perpetuate the most efficient management; give every working-man a personal interest in the work in which he is engaged; banish the terrible strife now pre- vailing between capital and labor, on the one hand, and between capitalist and capitalist, on the other hand; not until we can co-ordinate and integrate all our industries into one grand whole, and, we may add, place all in the direct control of the people, can pro- duction attain to its highest level. But there is still more to follow. 4. Fourth Evil Fruit of this New Despotic Power Des- truction of American Civilization. Our present system, with its gross injustice and arrogant plutocracy, is fast destroying American civilization and American liberty; it stands in the way of all progress ; it is overthrowing the sovereignty of the people in these United States and is driving us fast toward social war. For first. Our present system is one of the might- iest agents working for the elimination of the best and the perpetuation of the worst elements of society. 68 EFFECTIVE INDUSTRIAL REFORM. For the one law standing at the door of every job in the gift of the corporation is " to the man who will work the cheapest." In short, whosoever is willing to sink himself the nearest to the level of the brute gets the job. Competition among working people is chiefly a competition in self-degradation. The skilled worker underbids the skilled worker and forces the wages of both down to that of common labor. And common laborer underbids common labor and forces both down to starvation wages. The result is that working people are ever thrust downwards to an ever lower standard of living without knowing what is the agent that is thrusting them down. The increasing prevalence of rural degeneracy and the constant increase of the slum population in our cities are both the product chiefly of evil industrial conditions. But this is not all. Our present system calls in the most depressed classes, by immigration, from the old world. For here too the law is that the job is given to the immigrant who will work the cheapest. The result is that our present system calls in and finds work chiefly for the most ignorant. The labor saving machine of today takes the place of intelligence in the worker. One intelligent man can direct fifty or a hundred un- intelligent. Hence, wave after wave of the most de- pressed people of the old world pours into this country and reinforces the depressed classes already here. But if our present system perpetuates and calls in the weaker classes, it is also a most powerful agent in eliminating, by race suicide, the best. TYPICAL, COMMON WORKING MAN'S COTTAGE IN A BERKSHIRE VILLAGE. Double Cottage. Rent for half cottage on left no bath $100. Pay of common workman $540 Rent for half cottage. $100 Water tax paid to corporation 15 Coal, six tons at $7.50 45 Total $160 Amount left for food, clothing, doctor bills, etc $380 With such an income the wife must work out or take in work to live. NOTE. Investigation shows that thousands of tenements in our cities, which are fair without and charge an enormous rent are the abode of destitution and poverty because of the low pay of the worker. A large part of the wretchedness caused by our present evil system is thus kept out of sight. THE NEW DESPOTISM ITS EVIL FRUIT. 69 For intelligent young people, both native and foreign born, refuse to marry and bring children into the world under the arduous conditions created by a greedy plutocracy.* And for any race to rise in intelli- gence and standard of living means its quick melting away by race suicide, like snow before the sun of spring. Around Shawmut Avenue Congregational Church, Boston, is a population of about 35,000 souls which represents the aspiring middle classes, native and foreign. And yet among all that number, I have been told by good authority that there is scarcely a single home. That vast population is a population of lodgers who are either unmarried, or if married, largely childless. And that section of Boston is typical of large areas in all our cities. | The people who marry and bear children are the thoughtless depressed classes in the slums. Now, these facts alone mean in time the destruction of American civilization. For, first, the most backward classes from the old world keep pouring in and, filling our villages and cities, make up the bulk of the population. They pour in far faster than it is possible to achieve their trans- formation by school and church. And since to elevate any class means its quick elimination by race-suicide and its displacement by a lower class or race, the schools and churches fight a losing battle. The population of the country becomes increasingly ignorant, degenerate and un-American. *See Races and Immigrants in America, p. 202-204, by Prof. John R. Commons. fSee The Lodging House Problem in Boston, by Albert Ben- edict Wolfe, Ph.D. 70 EFFECTIVE INDUSTRIAL REFORM. Second, this elimination of the best and perpetuation of the worst means to fight a losing battle with the saloon and other social evils. For while the voters for the saloon are constantly reinforced by race propagation and immigration, the voters against the saloon and other vices are ever melting away by race-suicide. For the same reason we are fighting a losing battle against ignorance, lawlessness, crime and political corruption. Third. For the same reason, American schools and churches are fighting a losing battle in the moral and religious realm. The great principles of true religion are truth, jus- tice, and mercy with faith in God and the life eternal. True religion means an intelligent manhood and woman- hood, a knowledge of one's rights and courage to maintain them, it means also a respect for the rights of others, and a determination to defend them equally with one's own. True religion means love for all men and all that that implies. It means a large united, national spirit and life and reverence for God. Now it is the grand aim of American civilization to imbue and elevate the whole nation with the spirit of these truths and to bring all the people under one public school system and into one pure and free church. But it is a simple fact that the constant coming in of ignorant populations, by immigration, and the elimi- nation of the best by race-suicide make it well nigh impossible to realize this aim. Not only are the incoming populations increasingly ignorant but alien schools and churches brought in with the tide of immigration, are un-American, and THE NEW DESPOTISM ITS EVIL FRUIT. 71 build a wall of separation around their members shut- ting them out from the great uplifting educational and religious forces of the land, and prevent the develop- ment of a common elevated moral and religious life. The result is that the population in our cities, in- stead of being gradually uplifted, becomes increasingly ignorant and even criminal. And our American schools and churches cannot reach them. Impassable barriers are reared all around them. And they either remain as densely ignorant and servile in mind as when they came, or, if uplifted, they melt away by race-suicide, and other more ignorant peoples come in to take their place. As a result, in large sections of our cities, American civilization, distinctively so called, with its free schools and high religious ideals, has been destroyed ; and every where it is threatened, if not with destruction, at least with arrested development, unless these evils created by our industrial system can be removed. And no mere restriction of immigration however desirable for certain reasons, will save us. England, Belgium, France, Italy, Spain, are not overwhelmed by an alien immigration, and yet their condition is worse even than ours. What we need is not a new immigration law although that might help us but a New Industrial System; a system that will grant jus- tice to all and be governed not by a greedy plutocracy but by the sovereign will of the people; a system that will call in not the worst but the best of the old world immigration and old-world religion; a system that will grant justice to both Immigrant and American-born 72 EFFECTIVE INDUSTRIAL REFORM. alike; a system that will fix wages not according to the present brutal law of supply and demand but according to each man's individual worth. When this is done the evils of Immigration and race-suicide will be largely self-corrective as can be readily shown. But so long as the present evil system endures a system which cares neither for the good of the country, the welfare of the immigrant, nor the rights of the people already here; a system in which greed sits enthroned and whose only aim is to get labor as cheap as hunger, dependent families and brutal competition can force human souls to take so long as this system endures, there is little hope for American religion and American civilization. 2. But this is not all. Our present system creates conditions in the lower half of the population in which character cannot grow. The necessary home maker is the wife and mother. And her place is in the home. But for the lower five millions of families in these United States, in city and country, the wife and mother is compelled by dire necessity to be a worker in the factory, or in the field, or in the homes of the wealthy as wash-woman; or, when she stays at home, she must take in work far beyond her strength which commands all her time. The mother at work in the factory will work up to within two or three days of her baby's birth and will begin work again two or three days after its birth. The baby therefore receives no proper care. Hastily nursed by the mother in the morning before the mother goes to her day's work, it is left to the careless charge NOTE. (1) In the Carnegie Steel Plants in Pittsburg, Pa. (1909) the vast majority of the men are paid only from one to two dollars a day, for 12 hours work. This pay is sufficient to support a single man, but not a man with a family. The wife and mother, therefore, must become a wage-earner to live. (2) The result is that in Pittsburgh, there are more than 22,000 women at work for wages, and many more going out by the day or taking in work or boarders. The pay of 60% of these women is only from 50 cents to one dollar a day. And yet no woman can support herself properly on less than $7 a week. The result is that thousands of girls are under-fed or under- clothed or forced into immoral lives, and many thousands of babies are not properly mothered. See the Pittsburgh Survey in the Jan., Feb. and March numbers (1909) of The Survey. THE NEW DESPOTISM ITS EVIL FRUIT. 73 of an older child. Again it is hastily nursed at noon, again left, and again nursed at night when the mother returns. The result is that there is constant indiges- tion and suffering on the part of these innocent victims of plutocracy. And large numbers of the babies of the poor perish before they reach five years of age. Thosa children who survive this period grow up in the streets. The boys form themselves into gangs and early learn to drink and gamble. The girls grow up untrained only to repeat the arduous lives of their mothers before them. The result is that church and school in the words of General Booth "are fighting a losing battle." Under such conditions character has no chance to grow. Crimes are committed in our cities which we once thought belonged only to the misgoverned country of Italy of three generations ago. Men talk of the ignor- ance of the wives and mothers of the lower classes and of the vicious habits of the men. But this ignorance on the part of the motherhood and this vicious char- acter sometimes seen in the manhood of the poor are the direct and inevitable product chiefly of the greed of that plutocracy whose iron heel is on all our necks. Pay the lower classes a just wage and both ignorance and viciousness will disappear. 3. But this is not all. The curse of plutocracy is not only on the poor but on the rich. For it is an appalling fact that the immorality fast increasing among the wealthy classes is such as we should expect only among the most degraded. Shameless licentious- ness, extravagant waste of wealth by people who never lifted a finger to earn it, that mad jealousy the fruit of 74 EFFECTIVE INDUSTRIAL REFORM. which is open homicide and which goes without punishment are the frequent deeds of the idle rich. These statements are not too severe for those who read the papers and know the facts.* 4. Worst of all, those customs and high ideals which civilization has labored painfully, through thous- ands of years, to establish, many of the wealthy class are ruthlessly breaking down, and this, because of that pride of unlimited power which makes them fear neither God nor man. They disdain obedience to any law ex- cept their own self-will and pleasure. And their exam- ple corrupts the whole nation and makes progress im- possible. 5. In the meantime plutocracy controls the govern- ment and has practically destroyed the sovereignty of the people. And that terror which plutocracy inspires in all dependent on it for bread amounts to a real sup- pression of liberty of speech and act. 6. All these evils especially the anxieties and the sufferings of the people which are fast becoming intol- erable, are creating a spirit of discontent, of despera- tion, which throws over us the terrible menace of social war. Wherever I go, even among the farming class, I fre- quently hear the. bitter words " We must have a change or there will be war." *The frequent divorce suits among the wealthy The case of a certain American heiress and her two husbands abroad, The shoot- ing of one man by another in a theatre and the revelations made in connection therewith The shooting of another man, at a certain club-house by a jealous husband and the scandalous relations dis- closed are recent illustrations of the truth of the above statement. THE NEW DESPOTISM ITS EVIL FRUIT. 75 Out in Colorado we have had conditions and these conditions still persist in fact verging upon real social war. Down in Kentucky (in 1908) and in three other States, farmers met, read the Bible, (especially those passages calling on God to avenge the oppressed), and then with hymns on their lips went forth to burn the ware- houses of the Trust that oppressed them, to punish recal- citrant members of their own class, and even to hang or shoot down the corporation lawyer and another henchman of the Trust. These men and women, made desperate by their sufferings, believed that they were fighting in as noble a cause as our fore-fathers who spilled the tea in Boston harbor and shot down British regulars behind stone walls. All this is incipient social war. And in our cities are not only a vast hungry suffer- ing class without work and without bread, but there are such bodies as the Cicilian black-hand which wreck many storied buildings with dynamite; and in case of a popular uprising would inject into the conflict terrible violence and bloodshed. These signs are ominous. Only the criminally blind can fail to read them. And yet just as it was before our civil war, just as it was before the French revolu- tion, the people disregard all these tokens and say peace, peace. Some say that the superior intelligence of the Amer- ican people will never permit war. But it is the superior intelligence of the American people, and the existence of the public school, that intensifies the menace of social war. For it is not the most ignorant but the most intelligent classes who refuse to submit to the crushing 76 EFFECTIVE INDUSTRIAL REFORM. heel of despotic power. It is the existence of an intelli- gent class who know their rights and dare maintain them, that constitutes the chief threat of war when despotic power becomes enthroned, and peaceful remedies fail. These things declare unmistakably that we are approaching a crisis in American history. A crisis, when the people must decide whether they will resolutely arouse all their powers and work out a reform of present conditions or drift with increasing rapidity out toward the tossing sea of utter disorder, riot, and social war. And let not those who are now intrenched in wealth and power think that they shall escape. "Unchanging law together binds Oppressor and oppressed. Though sundered far in rank and pride, They march to fate abreast." Which then shall we choose riot and revolution, or peaceful and yet effective Industrial reform ? The leaders of reform are counseling patience on the part of the people. Their appeal is to reason and the ballot; and by this sign they hope to conquer. But if the reform is delayed too long, until patience is exhausted and the people become desperate, who can tell what scenes of blood and what confusion and war may be enacted? In the following Chapters, I shall unfold the way by which to escape confusion and war and achieve Effec- tive Industrial Reform. ADDENDUM TO PART I. Five pictures illustrating the evil fruits already produced by the competitive Industrial system in Europe. The first of Five Cuts Illustrating the Effect of Our Industrial System in Europe, especially among women. This woman, in Holland, and her husband own their own boat. But their pay is so small that they can live only by her doing the work of a mule on the tow-path. This and the four following cuts were supplied by courtesy of the Woman's Home Companion, copyrighted by the Crowell Pub- lishing Company, 1907. V * _ 05 ^ c c^ For twelve hours a day this Belgian girl, only twenty years old, works at brick making, the very hardest work in the world. She is paid from 16 to 25 cents a day. The wages of the women in these cuts were learned by inquiries of native Europeans. One out of every three wage workers in factory and on farm in Belgium is a woman. 1 f - ^ o O) $ "Q> * Q) 03 53 0^ O I " S ^ o -M OH Women are cheaper than oxen in Russia. Here is a team of fourteen women, harnessed to the plow. They are paid from 5 to 10 cents a day. Many die of starvation during the winter. Will women in America become the drudges that they are in Europe? The inevitable tendency is in that direction. For, first, the law of competition, with easy migration, must reduce all below the Capitalist class to the same level in both Eu- rope and America. Second, already the wages of men in America are so reduced that for the lower half of society the wife and mother must be- come a wage earner to live. Third, already there are five million women wage earners in the United States (census 1900). This means a million wives and mothers taken from their homes and sent into the factories. It means two or three million children not properly mothered. It means a million girls engaged in work prejudicial to the health of growing girlhood. It means another million girls underpaid and tempted to im- moral lives. Finally, in all our cities, and on the truck farms and berry farms in the South and other places, woman has already reached the level of her sisters in Europe. See The Survey, Aug. 7, 1909. Part II. Method of Effective Reform CHAPTER V. OUR GENERAL PLAN OF REFORM. What is the general method of our plan of reform? We shall never reform present evils in the industrial and commercial world merely by a "revival of piety" among the people, or a return to the "religion which father had." All such advice by diverting the mind away from the root of the evil is but the Judas kiss which betrays humanity. It was not the loss of piety which brought on present wrongs; and no mere re- vival of piety will cure them. Neither will we cure present evils by impressing the mind of the Oligarchy in control with a "high sense of Christian stewardship." All such counsel utterly ignores the cause of present wrongs. One might as well think of curing the troubles of Russia by teaching the Tzar a "higher sense of Christian stewardship." Neither will we cure present evils by maintaining the private ownership of the corporation with strict government control. This is the Rooseveltian remedy. Mr. Roosevelt advocated the election of Mr. Taft on the ground that his experience and abilities fitted him to enter into the offices of the big Corporations and dictate, wages, prices and dividends so as to bring justice to all parties concerned. But does any sane man believe for 78 EFFECTIVE INDUSTRIAL REFORM. a moment that any government official will have the ability or the courage to go, Caesar-like, into the offices of these big corporations and say what wages they shall pay, what prices they must charge, and what dividends they shall be permitted to earn? Besides such an act is absolutely unconstitutional. If these corporations are private copcerns, and they certainly are, the President of the United States has no more right to enter into their offices and dictate wages, prices and dividends, than to go onto the land of the farmer and say what wages he shall pay, what prices he must charge and what profits he shall be permitted to earn. And should our president attempt such a thing in relation to the big corporations, he will be commanded in the name of the constitution and the rights of private property to keep out. Neither will we remedy present wrongs by abolish- ing the corporation and turning our industrial and commercial activities over to governmental ownership and governmental control as these terms are now used. The prevailing tendency of popular sentiment is, in- deed, in this direction. But I am convinced that all such tendencies are a mistake and will end only in making conditions worse than now. For, in the first place, in order to secure and main- tain an efficient economic system, it can be shown, that we must keep economics and politics entirely dis- tinct. We must have one agent to run the govern- ment and another agent to run our industrial and com- mercial activities. To mix the two, or combine them OUR GENERAL PLAN OF REFORM. 79 under one system, will inevitably result in confusion, graft, and inefficiency in both. Second. In order to secure and maintain efficiency in our economic system, it must be based upon, and grow out of, an intensified sense of individual respon- sibility and individualized self-help. And it must make it impossible for the idle and shiftless classes to load themselves undetected onto the industrious and efficient. Now it can be shown that government 'ownership will largely destroy the factor of individual responsibility and make it easy for the idle and shiftless to load them- selves onto the industrious and efficient and not be found out. When six men pull a coach together, it is easy for one man to shirk his duty and escape detection. Such will be inevitably the case with government ownership. Government ownership means commun- ism, and communism will not work. Third. In order to meet all economic needs, we must have an economic system that will not destroy, but serve as the agent of the whole people, in the ac- quistion of individual wealth and gain. Our new eco- nomic system must be subordinate to the acquisition, not of communistic, but individual wealth. Every economic system adequate for the needs of man must achieve three functions. First. It must provide work for all the people at just wages. Second. It must supply commodities at a fair price. Third and crowning all it must provide a place where the people can invest their increasing savings, earn divi- dends, and accumulate individual wealth and gain. And this last function must in no case be omitted 80 EFFECTIVE INDUSTRIAL REFORM. or exscinded. It is the supreme, and in some ways most important function of all. We must have, it is true, combination and co-oper- ation in the production of wealth; but we must have individualization in its distribution. No communistic system in relation to the possession of wealth will work or meet the needs of man. But it is a simple fact that all forms of direct government ownership exscind this crowning function of our economic life, and make im- possible the individual acquisition and ownership of wealth. Suppose, for example, that we should turn all our industries over to government ownership and con- trol, as exemplified in the United States Mail raising the capital by taxation and, of course, paying no divi- dends what would be the result in our economic system? It would, as can be seen at once, cut off forever all possibility of any one's investing his savings any where, it would cut off all earning of dividends and all acquisition of individual capital and individual wealth. But such a system is essentially communistic. It will not work nor meet the needs of man. I shall speak of this again. No form, therefore, of governmental ownership, properly so-called, will meet the needs of the case. Government ownership will result only in confusion, graft, the weakening of individual responsibility and individual self-help, and, worst of all, in the destruction of all acquisition of individual wealth. And all attempts to reform present evils by political methods chiefly, are, I believe, essentially wrong, and will result in disappointment and failure. Industrial OUR GENERAL PLAN OF REFORM. 81 reform, whatever it may be, must, without doubt, be introduced and maintained by the sovereignty of law. But the reform proper must be essentially, not political, but economic. What we need and what we must have, is not a new political, but a new, economic system, a new economic system that will overthrow despotic power, make the people supreme, and bring justice and equal opportunity into our whole industrial and commercial life. 2. Where shall this reform begin? In order to effect a lasting remedy of present wrongs we must go right back to that point where we made our initial fail- ure. The cause of present evils lies, as I have shown, in the fact that the people in earlier years failed to as- sume resolute collective control over their growing industrial and commercial life, and the consequent coming in of injustice and despotic power. In order, therefore, to cure present wrongs, we must go right back to that point where we made our initial failure and do two things. First, we must overthrow, root and branch, the power of a despotic oligarchy and assume resolute collective control over our whole industrial and commercial system. No other policy will avail. So long as despotic power is enthroned in the industrial and commercial world, unspeakable injustice and wrong will continue and will increase more and more. For all history shows that human nature is too weak to hold despotic power for any length of time without abusing it. Besides, there 'is something in the possession of such power 82 EFFECTIVE INDUSTRIAL REFORM. which exalts the holder of it in pride and makes him incapable of appreciating either the ability or the rights of others. Justice shall come only when the sovereign will of the whole people is enthroned. But this is not all. We must also make it our law to bring justice and equal opportunity to the whole people. There are those who would have a reform that will bring justice to their own class, but they do not want justice to descend to those below them. But in the Providence of God and the evolution of our industrial activities, we have reached a condition when it is simply impossible to bring justice to any one class without bringing it to all. If, therefore, we would cure present evils, we must not only overthrow, root and branch, the power of a despotic oligarchy, and make the people supreme, but we must aim to bring justice, equal opportunity, education, refinement and every other good thing to every class alike. Any aim short of this will only end in failure. Whosoever, therefore, desires justice for only a part of the race, or desires to see opportunity for graft and special privilege and cun- ning robbery, to continue as an organic factor in our in- dustrial system, will find little satisfaction in the scheme which we are to unfold. What, then, we ask again, is that new economic method by which we must achieve effective industrial reform ? 3. The fundamental factor in the modern industrial and commercial world is the STOCK-CORPORATION. This agent is to the business world to-day what civil OUR GENERAL PLAN OF REFORM. 83 government is to the political world. It is the grand instrument, the organization, through which men com- bine in co-operative effort in the production and dis- tribution of wealth. Its primary aim had nothing to do with spoliation. It aimed merely to prevent that waste and loss which inevitably result from disorgan- ized effort and competitive strife and war. It aimed to unite its members in co-operative effort so as to achieve the greatest efficiency in production and secure justice in the distribution of wealth among its mem- bers. And if the Corporation has become the agent of spoliation and despotic power and it certainly has it is owing to the fact that while the people have been asleep or warring with each other a few strong men have quietly seized possession of the Corporation and prostituted it to evil ends. The stock-corporation, therefore, is not essentially evil in itself. On the con- trary, when properly controlled, when, as we shall see. it becomes the agent of the whole people for the acquisi- tion of wealth, it will be the most efficient instrument for the production and just distribution of wealth, that has ever been conceived by man. And the- Stock-corporation like civil government, "has come to stay. No power on earth can abolish it. All our industrial and commercial activities are destined to be, if they are not already in fact, organized under it and brought under its immediate control. And like civil government, it is destined to become one of the noblest and most beneficent institutions on earth. In order, therefore, to achieve industrial reform, it is foolish to think of abolishing the Stock-corporation. 84 EFFECTIVE INDUSTRIAL REFORM. That is equally unnecessary and impossible. In order to reform present evils, the thing to do, and the only thing to do, is for the community to own and control the Business Corporation and make it the agent of the whole people for the acquisition of individual wealth. But how shall we achieve this result? How shall we come to own and control the business corporation and transform it into an agent of the whole people for the acquisition of individual wealth? We shall never own nor control the Business Cor- poration, from without by a vigorous use of the "big stick" in enforcing the Sherman anti-trust law. The efforts made in this direction by so vigorous a president as Mr. Roosevelt prove the utter futility of such efforts to curb despotic power. If the people mean to own and control the Business Corporation, and make it the agent of the whole people for the ac- quisition of wealth, they must own and control it, as they do civil government, from within. In other words, the people must themselves be the Corporation. In no other way can they overthrow despotic power, assume sovereign control over their whole industrial and com- mercial life, and transform the Business Corporation into an agent of the whole people for the acquisition of wealth with justice toward all. How then shall we reform our present industrial sys- tem? We shall reform our present industrial system by organizing the whole people of each community and ul- timately of the whole nation, by law, into a single, efficient BUSINESS CORPORATION modeled essentially after the private stock-corporation, but with every man as a OUR GENERAL PLAN OF REFORM. 85 shareholder and responsible agent in it for the ownership and control of our whole industrial and commercial life. If we carefully examine the stock-corporation, we find that it embraces two fundamental factors. In the first place, there is the organization of a group of men into a single business corporation for the collective ownership of the plant and for co-operative effort in the production and distribution of wealth. In the second place, there is the individual subscrip- tion and ownership of the capital, the earning of divi- dends and the subordination of the whole to the acquisi- tion of individual wealth and gain. Thus while we have combination and co-operation in the production of wealth, we have, nevertheless, in- dividualization in its distribution. If now, a small group of men can thus combine into a single corporation for co-operative effort in the pro- duction and just distribution of wealth if they can do this without annihilating the factor of individual responsibility, and without destroying the acquisition of individual wealth why cannot a larger group of men, why cannot, in short, a whole community, in town, city, state, or nation, combine by law into a single vast corporation, a single producing firm, for the same ends and with like results? If a few persons can form themselves, for example, into a Beef trust or corporation, for the collective ownership of the beef industry, and yet make the whole subordinate to the acquisition of individual wealth and gain, why cannot all the people form one great Beef Trust or Corporation for the same ends? The profits 86 EFFECTIVE INDUSTRIAL REFORM. flowing from the Beef industry are immense. And they result in large part from the use of the wonderful mechanical inventions of the present age, from improved methods of operation, from the correlation and com- bination of individual effort. Now if a few men can combine and cause those immense profits to flow into their own pockets, why cannot all the people form them- selves by law into a still larger combination, and cause these immense profits to flow back into the pockets of the whole people instead of the pockets of the few alone ? This I maintain we can do and this we shall do. There is no reason under the sun why the people of each community cannot constitute themselves by law into a single producing firm or Business Corporation for the co-operative production and just distribution of wealth. And there is no reason, why, as we shall show, the people cannot individually subscribe and own the capital, just as in the private corporation and on this capital thus subscribed, earn dividends and so make the general business corporation the agent of the whole people for the acquisition of individual wealth. But this Business Corporation shall be no voluntary affair. It shall be established by law, and embrace the whole people like civil government. But this shall be explained later. Here then is the general plan of our scheme of In- dustrial reform the Business Corporation but the Business Corporation expanded, by law so as to embrace the whole people and enable them to co-operate in the most efficient production and the just distribution of wealth. OUR GENERAL PLAN OF REFORM. 87 Of course, there are many problems to be consid- ered in detail in unfolding this scheme of reform. And these shall be considered in the following Chapters. But we have said enough to make clear what is our general plan. My plan of reform, therefore, is not fundamentally political but economic. Although my scheme, shall be introduced and maintained by act of law, yet it is in no sense, government ownership as that term is used. It is not at all my purpose to turn our industrial and commercial activities over to government administra- tion. What I advocate is a new' economic system and yet a system that is an organic evolution out of the present system. I advocate, to repeat, the taking of the present powerful and efficient Business Corpora- tion, as our model, and expanding that by law so as to embrace the whole people, constitute the whole people by law into a single business organization, to own and control their own industries, and enable them to co- operate in the efficient production and the just distri- bution of wealth. The only essential difference between this Public Business Corporation which we shall form, and the private corporation which now exists shall be in that whereas in the latter only a few persons are members of it and reap the profits, in the public corporation, all the people shall be members of it and members of it by law, by right of birth and demands of industrial obligation, and the whole people shall reap the profits. By this method, and by this method alone, I believe that we shall not only overthrow despotic power, make 88 EFFECTIVE INDUSTRIAL REFORM. the people supreme, and bring justice and equal opportunity into our whole industrial and commercial life, but we shall also emphasize and intensify the sense of individual responsibility and make our whole indus- trial system subordinate to, and serve as the agent of, the whole people in the production and acquisition of individual wealth and gain. In the next Chapter, I shall unfold and illustrate this plan in detail by outlining its fundamental features. 1 3 o H JS 1 8 I O =2 O 02 O I CHAPTER VI. FUNDAMENTAL FEATURES FIRST GROUP. A slight study of the private Business-Corporation, shows that it embraces several fundamental features. First. There is the organization of a group of men into a single industrial or commercial corporation for co-operative effort in the production and just distribu- tion of wealth among its members. There is the collec- tive ownership of the plant. Second. There is the individual subscription of the capital by each member of the group or corporation. Third. There is the earning of dividends on the capital invested and the acquisition of individual wealth. Fourth. There is the gradual enlargement of the business for the increased acquisition of wealth. Such are the primary features of the private business corporation. The Public Business Corporation which we contemplate shall embody the same fundamental features. Let us briefly unfold them. 1 First Fundamental Feature. The first fundamental feature of our plan demands that each community (in town, county, city, state, and nation), shall con- stitute itself, by law, into a single BUSINESS COR- PORATION, with every citizen as a sovereign, respon- sible agent in it, to own and control its own industries and to secure co-operative effort on the part of the whole community in the production and just distri- 90 EFFECTIVE INDUSTRIAL REFORM. bution of wealth. We shall thus secure the collective ownership of the plant. This Public Corporation shall be no charity organi- zation. It shall be constituted by law after strictly business principles. Its aim shall be to achieve the most efficient production and just distribution of the fruits of our industrial and commercial activities. It shall be no communistic organization, as we shall see. For it shall emphasize and be based upon individ- ualized responsibility and its aim, like the private cor- poration, shall be the efficient acquisition and just distribution of individual wealth. In order to introduce this feature, two steps are necessary. First, a law would have to be passed by the state or nation, permitting each community to organize itself into a public business corporation as this plan contemplates. Then, secondly, each community would have to adopt this plan for itself by a majority vote, and take the proper steps for its organization as the plan contemplates; and the work would be done. Suppose, for example, that the City of Chicago con- templated the adoption of this new scheme of reform and the application of it at first to its Street-car lines. What are the steps by which to proceed? First, a law would probably have to be passed by the legislature at Springfield, unless the present law is adequate, permitting the City to introduce our plan. Second. Then the City would have to adopt it by a majority vote and take steps for the proper acqui- sition of the Road. When this is done, the first work necessary to the introduction of our plan would be FUNDAMENTAL FEATURES FIRST GROUP. 91 complete. The City of Chicago shall have organized itself by law into a business corporation to own and control its own industries, and one of these industries, its Street-car lines, shall have come into its possession and under its control. We shall thus secure the Public Ownership of the plant. 2. Second Fundamental Feature the Subscription or the Needed Capital, Individually, by the Whole people. The crucial question concerning every form of co- operative ownership proposed is How shall we raise the required capital? The answer given to this question determines the character of every new scheme which we seek to introduce, whether it shall be communistic or individualistic, and whether it shall meet all our eco- nomic needs or not. How then, we ask, shall we raise the needed capital in our plan of reform? In our plan, we shall raise the needed capital just as in the private business corporation. In the private corporation we require each member of it to subscribe his quota. We say to each man, "If you expect to be a member of this corporation and reap your share of its dividends you must bear your share of its burdens. Responsibility must be commensurate with the hope of reward. You, therefore, must sub- scribe your quota of the capital, bear your share of the responsibility and stand or fall with the rest." We shall adopt the same law in the Public Corpora- tion which we shall form and we shall call upon and, if need be, require each citizen, by law, to subscribe, pay 92 EFFECTIVE INDUSTRIAL REFORM. in and own his quota of the needed capital and thereby become a sovereign responsible factor in the Corpora- tion. Just as we tax the people, individually, to cap- italize our schools and other public works, for this is what we do when we tax the citizens for public school buildings and other public utilities, so, I would tax each man, individually, to capitalize our public indus- tries. But the money thus raised shall not be a mere tax, but a required subscription of capital. And the capital which each man shall thus subscribe shall be credited to him as so much capital invested by him in his coun- try's industries and owned by himself. While, there- fore, we shall have the collective ownership of the plant, we shall nevertheless have the individual subscription and ownership of the capital. When, in the introduction of this scheme of reform, certain citizens are unable to pay in at once their quota, the government shall let them pay down what they can > as, say five or ten dollars, or more. Then the govern- ment shall give its bond for the rest, or pay it in cash from the Public Bank, which we shall institute, and then allow each citizen to make up his deficit in weekly or monthly installments as he is able. After this plan is fully introduced, the government could reserve from each man's weekly or monthly wages, a sufficient amount to make up by the end of the year his full required annual subscription. All such installments to be credited, of course, to each man as so much capital invested. /Thus the capital shall be subscribed individually by the whole people. Each man's duty to subscribe shall be equally enforced and FUNDAMENTAL FEATURES FIRST GROUP. 93 each man's right to invest and earn dividends shall be equally protected. To illustrate this method of raising the capital, let us suppose that Chicago has acquired public ownership of its Street-car lines after our plan and contemplates the raising of the capital, how shall it proceed? The amount needed to capitalize the Chicago roads free from water, is say, $30,000,000. Exclusive of paupers, there are in round numbers, say, 300,000 voters in the city all of whom are able to subscribe something toward the capitalization of the roads. Here we may remark that we would allow women to subscribe if they choose. In order to raise the needed capital all at once, the sum of $100 per capita would be required. Now we would call upon every man to subscribe that amount. And if each man was able to pay in this amount the whole capital would be raised and each citizen would have his $100 invested in the business. But doubtlessly owing to poverty, caused chiefly by present conditions, many even worthy people could not pay down all at once even that sum. How then would we proceed. In that case, the government need not call upon each man to pay in his whole subscription at once, but only such part of it as he is able. Then let the government pay the remainder, or give its bond for it and then allow each man to pay up his deficit as he is able. Thus, doubtlessly, a group of 50,000 citizens could pay down $10. Another group of 50,000, $20. Another similar group, $30. Another, $40. Another, 94 EFFECTIVE INDUSTRIAL REFORM. And still another, $100, making all together, $14,000,- 000. Then let the government give its bond for $16,- 000,000, or let this amount be subscribed by individuals through the Public Bank, and the roads have come fully into the possession of the people as the following table will show: 50,000 pay $10 down making $ 500,000 50,000 20 1,000,000 50,000 " 30 " 1,500,000 50,000 " 40 " 2,000,000 50,000 " 80 " 4,000,000 50,000 " 100 " 5,000,000 300,000 pay all together $14,000,000 Government gives its bond for, or Public Bank subscribes, $16,000,000 Whole amount $30,000,000 Thus the roads would come at once into the hands of the public corporation. And, when, by means of monthly installments, each citizen shall have paid in his full quota, the whole capital shall be raised. Each man shall have subscribed and shall own his $100, and shall be a sovereign capitalistic factor in the public Business Corporation into which the people have formed themselves by law. There are evidently numberless modifications of this plan of raising the needed capital. Such is our method of raising the capital at the in- troduction of our plan. But when the plan is once fully introduced and each citizen has become an em- (Suggested Subscription Blank filled by John Brown, who is able to pay down only a part of the full quota.) Chicago, III., June 1, 1909. THE INDUSTRIAL DEPARTMENT. CHICAGO STREET CAR LINES. To Mr. ... JoAn 38*om Statement, Aggregate Capital required $30,000,000 No. of Voters 300,000 Maximum stock for each voter $100 Minimum dividends guaranteed 5% (and as much more as the Roads can pay) Minimum subscription required from you, June 1, 1910. (proportionate to income) Penalty for non-payment, opportunity to invest forfeited for one year, or wages or property attached. SUBSCRIPTION. I hereby subscribe $50 towards Capitaliz- ing the Chicago Street car lines, to be paid on or before Jan. 1, 1910- I promise to pay $5 in monthly install- ments until my full quota ($100) is paid. I desire to subscribe* $ toward the Indus- trial Bond, if such Bond-\ is needed. (The Bonds receive the same dividends as the subscribed capital) Signed >A *If need be, the government can require the people to subscribe, towards its Bonds proportionately to their income. My plan goes on the principle that it is the duty of the people to capitalize their own industries, and the govern- ment has the power to enforce the duty. When the people have subscribed the needed capital, they are privilged to make as large a dividend as they are able; but they must subscribe the needed capital. tStock investments are for life, if desired; Bonds for only so long as the Ad- ministration may need them. (Suggested Subscription Blank filled by John Smith, who is able to subscribe more than the full quota for each.) Chicago, III., June 1, 1909. THE INDUSTRIAL DEPARTMENT. CHICAGO STREET CAR LINES. To Mr foAn Xmd - Statement, Aggregate Capital required $30,000,000 No. of Voters 300,000 Maximum stock for each voter $100 Minimum dividends guaranteed 5% (and as much more as the Roads can pay) Minimum subcription required from you, June 1, 1910. (proportionate to income) Penalty for non-payment, opportunity to invest forfeited for one year, or wages or property attached. SUBSCRIPTION. I hereby subscribe. /-/CO- towards Capitaliz- ing the Chicago Street car lines, to be paid on or before Jan. 1, 1910. / promise to pay $ in monthly install- ments until my full quota is paid. I desire to subscribe $50 toward the Indus- trial Bond, if such is needed. Signed 4^ FUNDAMENTAL FEATURES FIRST GROUP. 95 ployee of the public corporation, the government could reserve from each man's wages or salary, weekly or monthly, a sum sufficient to make up his full annual quota of the needed capital. These amounts would, of course, be immediately credited to him as so much capital invested, and on these amounts he would at once begin to earn dividends, as we shall see. And every industrious man will be able to pay in his full quota. For when our plan is fully inaugurated, labor shall be so much better trained than now and the wages of the lowest shall be so elevated, that, however great be the weekly or monthly quota required from each, every man will be able to pay in his full amount and still have, I believe, an income double what such men receive to-day. And this capital which he shall thus pay in, will not be a mere tax, swallowed up in the general fund. It will continue to be his private property, just the same as if he had subscribed it in a private corporation ) or invested it in his own business. And on it he is to earn dividends. And when he reaches forty-five years of age, his dividends will be sufficient to support him the rest of his days without work if he should so choose. But this brings us to the consideration of the next great feature of our plan. 3. Third Fundamental Feature af Our Scheme. The Payment of Dividends. In our plan, we shall pay divi- dends to each investor to the full earning capacity of the plant concerned, guaranteeing a minimum dividend of, say, 5%. 96 EFFECTIVE INDUSTRIAL REFORM. In this important feature, our plan differs essential- ly from Marxian socialism and, indeed, from every other form of public ownership. As I have already intimated, every industrial sys- tem, in order to meet the demands of humanity, must seek to do three things, First, to supply all with productive labor at just wages. Second, to supply the community with all needed commodities at a fair price. Third, to provide a place where the people can in- vest their savings and earn a just dividend. And this last function must in no case be omitted. It is the function that crowns and perfects the other two. Now our plan will aim to perform, and, inevitably, it will perform, far more perfectly than the present sys- tem, all three of the above functions, and the last as emphatically as either of the other two. Hence, in our plan, we shall pay dividends on all the capital in- vested. And since the subscription of this capital is required, we shall guarantee to each man a dividend of at least 5%, and as much more as by careful man- agement and skillful labor, we can make the plant pay. And this rule would apply not only to the fourteen millions which the people have individually subscribed, but also to the sixteen millions for which the govern- ment would give its bond, or which the Public Bank would subscribe. (See Appendix IV.) What would this mean in the case of the Chicago street car lines? It would mean, in the first place, that every investor would be sure of a dividend of at least 5% on his in- vestment. And this would be a better dividend than FUNDAMENTAL FEATURES FIRST GROUP. 97 he could earn in the savings bank. He would be sure of this dividend and his capital would also be absolutely safe, for the government would be behind both. The whole wealth of the city would be surety for both prin- ciple and dividend. And the Corporation could easily pay this 5% divi- dend. For, if necessary, after all economies were made, it would be perfectly legitimate for the Corporation to increase the fare. For every legitimate business has the right to raise the price of its commodities so as to pay a dividend on the actual capital of at least 5%. But each investor would do much better than this. For he would be allowed to receive as great a dividend as he and his fellow investors could make the plant earn. What would this mean in the case of the Chi- cago street railway? The Chicago street railways, I have been informed, earn, on the actual capital invested, free from water, 43%. Now if public ownership were adopted it might be thought best to increase wages and pay less divi- dends. But let us suppose that wages are satisfac- tory and that the roads continue to pay, say, 40%, what would that mean to each investor under our plan? It would mean that under our plan, each investor would receive not only the guaranteed dividend of 5%, but a surplus dividend of 35%. And this would mean that under our scheme each man with only $10 invested in the street railway, would receive in dividends, at the end of the very first year, $4. And when he and all the others had paid in their full $100 as required, each 98 EFFECTIVE INDUSTRIAL REFORM. would receive a dividend of $40, a very nice little sum to earn on only $100 invested. In this illustrative example, I do not wish to be understood as implying that if the people would adopt public ownership after our plan that they would always earn 40% on the actual capital invested. The secrecy which business men resolutely maintain regarding their business to-day makes it impossible to learn what are their profits on the actual capital. It may be that, as some pessimistic minds say, we could not earn more than ten per cent, or eight, or even six per cent. And yet, I cannot but ask, If this is all that present capitalists make on their money invested, how does it come about that they all so speedily become millionaires? If they do not make money in the form of dividends, then they make it through graft. But in either case the results are the same. The business earns an immense profit. And I cannot escape the conviction that if the people had public ownership after our plan, they could make a good large dividend, say from 10% to 20% and still pay good wages and ask low prices. But suppose that the people could not earn more than eight or even six per cent., that would be far better than the present system which pays them only 3X% or 4% in a Savings bank. But whatever be the possible earnings of the Rail- ways or of any other industry, the point which I am making now is that in every case, whatever be the in- dustry concerned, under our plan each man's invest- ment, though required of him, is his own private capital and on it he is to earn dividends to the full paying FUNDAMENTAL FEATURES EIRST GROUP. 99 capacity of the plant municipalized. And thus the whole earnings of our industrial life, above the cost of wages and salaries, shall be paid back to the people, and not as now into the pockets of the Few alone. But suppose that after we have introduced every economy and done our best, a certain business simply does not earn a net 5% dividend as the law requires, what then? In that case, we shall raise the price, as we have already implied, on the commodity produced. If the plan concerned be a railway, we shall simply raise the fare high enough to give us at least a 5% divi- dend. To do this would be perfectly right; for every plant ought to pay, at least, a 5% dividend on the capital invested. But suppose that even after raising the price, we fail to make, in the introduction of our plan, our 5% dividend, what shall we do? In that case, we shall vote either to tax the wealth of the country to make up the deficit or to close up the plant and go out of that particular business. 4. Fourth Fundamental Feature. This People's Busi- ness Corporation shall gradually acquire and collectively own, every plant, every utility, which the welfare or profit of the whole people may demand. And we shall constantly enlarge our business and thereby increase the opportunities of the people to invest and acquire wealth- The purpose of the re-organization of our industries, as this plan contemplates, is to make money, to produce and acquire wealth for the whole people, with efficiency 100 EFFECTIVE INDUSTRIAL REFORM. and with justice toward all. This earth was not de- signed to exist for the benefit of the few alone. Its re- sources belong to all. Hence, when our plan is intro- duced, wherever there is a dollar to be made for the benefit of the whole people, there we shall go and ac- quire possession. Of course, in the introduction of our scheme, we must proceed cautiously and gradually. We ought to acquire possession, at first, of those monopolies with which the people are most familiar and which afford the greatest promise of success. We, therefore, should probably begin with such utilities as Street-car lines, Electric lights, Telephones, and so forth. But ultimate- ly we should acquire possession of every utility in which there is a dollar to be made for the whole people. In the acquisition of these established utilities we would pay for them only the cost of reproduction. We would not pay a dollar for watered stock, that is for water in the stock. And in acquiring possession of these utilities, there would not be necessarily involved any change in the working force or present management of the road. There would be no cessation, even temporary, of the operation of the utility. There would be simply a trans- fer of the whole business with its men and management over to the People. And, henceforth, the Directors in control would be elected by the people and be responsi- ble to the people, instead of as now to the despotic Few. And, henceforth, the profits would flow, not into the pockets of the few alone, but into the pockets of all the people. FUNDAMENTAL FEATURES FIRST GROUP. 101 By thus expanding our business and entering upon new enterprises, we shall provide a place for the invest- ment of the ever increasing savings of the people. We shall institute, as we have implied, a Public Bank in connection with the Industrial Department. To this we shall invite all the people to bring their savings. And then by enlarging our plants, and tak- ing up new enterprises, we believe that all the increas- ing savings of the people can easily find investment and earn large dividends. See how the trusts are to-day expanding their indus- tries and not only increasing the demand for capital but multiplying the productive power of capital many times over. Why cannot the people collectively do the same? They certainly can and they certainly shall. Here is a Gas trust. It begins with the manufacture of gas alone. But after awhile it adds to this the manufacture of gas-fixtures and other supplies. Then it goes into gas ranges, and, in short, into all that belongs to the use of gas whether for lighting, warming or cook- ing purposes. Why cannot the people do the same ? Suppose that we had public ownership of the street-car lines. Why could we not, in time, add to that business the work of manufacturing cars and to this, the manufacturing of rails and all railroad supplies ? And this is what we shall do. We shall add in dustry toindustry, plant to plant, utilizing all the inventive skill of the country, until all our capital is invested and is earning good dividends. What would this mean? Even if the wealth of the country was not increased, it would mean that, each in- 102 EFFECTIVE INDUSTRIAL REFORM. dustrious man could acquire from $10,000 to $12,000 by the time that he was forty-five years of age; and on this, he could be earning a dividend of at least 10% . In other words, each family could be receiving an income from $1,000 to $1,200 a year, over and above the daily wages of the husband and father, and this would mean inde- pendence. It would mean the abolition of poverty so far as poverty is the result of industrial wrong. It would mean that wives and mothers would no longer be compelled to work in the factory and on the farm. They could remain at home with their children and all those evils recounted in a preceding Chapter would be abolished. These affirmations are no invention of the imagination. They shall be substantiated in a succeed- ing Chapter. And under this new plan, our capital and dividends shall be safe. The whole country shall stand behind them. There will be no possibility of one man's rob- bing another. The embezzeler shall be hunted from the earth. And that eternal vigilence which now ab- sorbs all our energies and makes life a burden, will be unnecessary. Thus our bread shall be certain and our waters secure. And we shall be able to lay the head upon the pillow at night without that haunting fear that some one will do us while we sleep. And when that energy which is now wasted in protecting ourselves against each other's insidious attacks, is directed into productive channels, how greatly shall our wealth be increased ? And it is right here that our plan differs from all other schemes of public ownership which have been FUNDAMENTAL FEATURES FIRST GROUP. 103 proposed. And it is here that the attractiveness and justification of our scheme lies. For all other schemes generally promise good occupations with good wages and good commodities at a fair price. That is all. They destroy, as I have said, all possibility of investing savings for the earning of dividends, and all use of the public corporations for the acquisition of individual wealth and gain. Such schemes are communistic in character and are not attractive to more substantial minds. Neither are they adequate. For one of the chief objects for which men go into business is to be able to invest their savings and earn dividends. This is the chief end of the private corporation. It ought, therefore, to be the chief end of the public corpora- tion. For the very object for which we go into the public corporation is to make our industrial activi- ties achieve all industrial-econpmic functions, as in the private corporation, and achieve them in a far better way than the private corporation. Hence, in the public corporation, we must make it one of the functions of capital to earn dividends and to earn far better dividends than the private corporation. And if, by wise management, our Industries can be made to pay 10%, or 20% or even 50% in short, whatever in this wonderful age of inventive skill, capital can be made to earn, that shall be paid to each investor on his actual capital invested. And when we shall have correlated and integrated our industries into one great whole, who can tell what shall be the individual wealth that each can accumulate under the operation of this new plan ? There never was a time when the earnings of 104 EFFECTIVE INDUSTRIAL REFORM. labor and capital were so great as to-day. Under this new method, all this wealth and gain will flow back into the pockets of the people and not as now into the pockets of the few alone at the top. 6. I have now unfolded the first four fundamental features of what I believe to be the true method of effective industrial reform. Before passing on to other features of this plan, let us make a few important ob- servations regarding the features just unfolded. The peculiar character of our plan lies in that we shall constitute the people into a single business cor- poration; and while we shall secure the collective ownership of the plant, yet we shall require the whole people individually to subscribe the needed capital, and on this we shall pay dividends equal to the full earning capacity of the plant. We shall thus make the People's Corporation subordinate to the acquisition of individual wealth. Our reasons for raising the capital in this way are several. First. We raise the capital in this way in order to individualize responsibility, place it where it properly belongs, and necessitate each man's bearing his share of the burden, if he is to reap his share of the reward. The great danger connected with every form of co- operative effort, is the ease with which it enables some men to shirk responsibility and reap the fruits of others toil. When ten men pull a coach together it is easy for one or two not to pull at all and yet receive full pay. Now our plan will prevent all this. For we shall call FUNDAMENTAL FEATURES FIRST GROUP. 105 upon each man individually to subscribe his quota of the required capital. And if he will not subscribe, he will receive no dividends. " No capital subscribed, no dividends received," will be our law. And we shall thus place the responsibility of raising the needed capital where it properly belongs, namely upon the individual. Men are crying out, and justly crying out, today for equal opportunity in the acquisi- tion of wealth. But if we are to have equal opportunity in the acquisition of wealth, we must have equal re- sponsibility in bearing the burden of its production. If men desire to earn good wages, they must be willing to perform their share of efficient labor; and if they desire to reap their quota of the dividends accruing from the business corporation, they must subscribe also their quota of the needed capital. And again we say " No capital subscribed, no dividends received." Hence, we shall call upon, and if need be, require each man to subscribe and own his proper quota of the invested capital. Again. We raise the capital, in this way, because in no other way can we create the sense of honest acquisition. Many people seem to have a vague feel- ing that public ownership is a method by which the people can, in some way, come into possession of vast utilities, without paying anything for them. But the only way by which any man can become morally a part owner in his country's industries is by stepping up like a man and paying in, directly or indirectly, his share of the needed capital. No mere act of law can make any man rightfully a share-holder in our great utilities. It is the man's actually paying for what he 106 EFFECTIVE INDUSTRIAL REFORM. receives that makes him, by right, a share-holder in the wealth of the country. Now the only way by which we can be sure that each man pays for what he receives is by requiring each to come up and pay in his full quota directly. And when a man has done this, he will feel that he really owns what he owns, and that he has paid for it himself, and has not filched it out of some body else. And this method will create, in the minds of all, a healthy conviction that no enterprise can be under- taken without the people's raising the capital. Under the ordinary methods of public ownership, thousands of men will vote for the public acquisition of any utility under the .sun without one thought as to where the money is to come from. But if we require each man to subscribe individually his quota, no man will vote for any utility without first asking himself whether he and the rest of the people are able to put their hands into their pockets and subscribe the needed capital. We shall thus evoke that caution that is necessary to deter the people from engaging in foolish and waste- ful enterprises. We raise the capital in this way because it will keep the whole people alert to elect the best men to the board of directors and hold them to efficient service. It will make graft and corruption impossible. For no men are so alert in looking after a business as those who have their capital invested and their dividends at stake. Now in our plan every voter will have his own capital invested and his own dividends at stake. He will therefore, see to it that the best men are elected to FUNDAMENTAL FEATURES FIRST GROUP. 107 office and that graft and corruption are abolished. We adopt this method of raising the capital in order to develop independence of character and enable the people to prove their full ability to manage their own affairs. The constant taunt of those who desire to perpetuate present conditions is that the people can never manage their own industrial interests. "They are incompetent for it." Now it is time for the people to repudiate and disprove this taunt with scorn. And the way to do this is by showing to the world that they can take care of themselves and can manage their own utilities. Now it is our purpose to give the people the opportunity to do this by throwing upon the whole people individu- ally the responsibility of subscribing the needed capital. And I have no fears as to the result. Finally and chiefly, we adopt this method of raising the capital in order to make the people's corporation, which we shall create, subordinate to the acquisition of individual wealth, and because it will make each fami- ly financially independent by middle life. While it is most important to secure co-operation in the production of wealth, yet we must also secure individualization in its distribution. The social, industrial, organization must be subordinate to the in- dividual's need. Now this is what we shall achieve in our plan. For while we shall have the collective ownership of the plant on the part of the whole com- munity, yet each man shall subscribe and own his quota of the capital, just as in the private corporation. And on this capital, he shall earn and receive dividends 10S EFFECTIVE INDUSTRIAL REFORM. to the full earning capacity of the plant. And this capital will be his own, to convert into an annunity or leave to his heirs, or utilize in other ways, as in the private corporation. Thus, the people's corporation, which we contemplate, will become the agent of the whole people in the acquisition of individual wealth. And, as I have said, it will lift every industrious man and family into financial independence by middle life and it will make poverty, resulting from industrial wrongs, a thing of the past. We shall now proceed, in the next Chapter, to unfold other fundamental features in our plan of reform. NOTE. Mr. Carnegie advocates* organizing employers and employees in one corporation to own and control each plant. He quotes with favor John Stuart Mill "The form of association, however * * which must in the end predominate, is not that which can exist between capitalist as chief and working people without a voice in the management, but the association of the laborers themselves in terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves." (Mill's Political Economy, People's Edition, p. 645.) If Carnegie will advocate associating employer, employee and consumer in short the whole community in one Business Cor- poration, by law, to own and manage their own industries, he will be advocating my plan. *See "Problems of To-day," p. 66, by Andrew Carnegie. 03 _g S 'n. O O ^ C 0) .SP to a> 0) u c I M 03 . 60 a 191 * l be aJ C ^^ :>^ '^^ The last century saw our Industries consolidated into one whole. This was a most important step in our Industrial evolution. But in achieving this consolidation, the Industrial organizer concentrated all power into his own hands, and made himself the people's autocrat. The next step consists in the transfer of this supreme power from the Industrial organizer into the hands of the people by making them the Business Corporation by law. When this is done, our Industrial evolution shall be complete. CHAPTER VII. FUNDAMENTAL FEATURES SECOND GROUP. This plan of reform, like every other, has its prob- lems. These problems relate chiefly to administration. Among them are, How shall we secure justice in relation to wages and salaries, how shall we elect our board of directors, how prevent injustice from creeping in and how prevent a return of despotic power, and other problems. These problems of administration cause an- other group of fundamental features to arise which we shall now take up. 1. Fifth Fundamental Feature of the new Plan of Reform. We shall secure justice in relation to Wages and Salaries, by having them fixed rationally according to justice by a Board of Commissioners, chosen annually by the people, to that end. This Board shall fix the relative wages and salaries to be received by workmen and officers during the year. We shall also have an Arbitration Committee in each shop to settle disputes as to justice in individual cases between workers and superintendent. Thus, we shall give every man, indirectly, a voice in saying what justice demands. The voice of the whole people, in short, shall determine what the relative com- pensation of the different callings shall be. And justice shall be done. For this Board of Commissioners shall represent not a small, despotic clique, but the whole people. And the aim shall be, not to find the men, who driven by poverty, will work for the lowest wage, 110 EFFECTIVE INDUSTRIAL REFORM. but what each occupation ought in justice to receive, and, then, to find the best man for the occupation. Thus there will be competition; but it will be competi- tion not in the ability to live cheap and work for less than one is worth, but in skill and capacity to do the work. Such competition will not tend to the rapid degradation but the highest elevation of the working man. We shall also distinguish between the expert, the good, and the poor workman; and fix wages accordingly. This will inspire every man to do his best. 2. Sixth Fundamental Feature, The Election of Direc- tors. We shall achieve the most efficient administra- tion of each plant by throwing the responsibility of electing the Directors or Superintendent as the case may be, directly upon the actual investors, and there- fore, upon the whole people giving each his due voting power. In no case, shall we turn the appointment of the directors over to the government. No private cor- poration would think of doing such a thing. And why should we? The proper persons to elect the directors of a business are those most vitally interested in the success of the business those whose capital is invested and whose dividends are at stake. But in the Public Corporation which we contemplate this would mean the whole people, except paupers and a few other shiftless and drunken persons. Shall we give each citizen just one vote, or more according to amount invested? Experience alone can settle this detail. We might give each man one vote FUNDAMENTAL FEATURES SECOND GROUP. Ill and an additional vote for every $2000 invested by him no one to have more than five additional votes. In the introduction of our plan, when the maximum investment is only $100, we might grant an additional vote for each $20 invested, and increase this standard proportionately as the maximum investment increased. But, whatever rule we shall finally make in relation to this matter, the point to be noticed here is that the direc- tors are to be elected by the direct vote of the inves- tors. And since the investors will have their capital and dividends at stake, each man will be led to vote only for the best man. Furthermore, I would make it a law, that no man should be a candidate for the office of directorate in any business unless he could show a certificate of adequate educational training in our schools of Technology and Business, and had served suc- cessfully for a term of years in lower industrial or com- mercial positions. Thus the very best management will be elected, and the most efficient administration secured. 3. Seventh Fundamental Feature. We shall pay each man's capital back, dollar for dollar, in cash, to his heirs at his death; or, he may at his option, convert it at any period during his life into an annuity to be paid to himself (or wife or child) until death. Thus every man shall receive back every dollar that he invests. To illustrate. Suppose that a man has reached forty-five, and is possessed of $12,000. Now he can do one of two things. He can either continue to re- ceive his ordinary dividends and at death let his money go to his heirs; or, if he prefers, he can convert it into 112 EFFECTIVE INDUSTRIAL REFORM. an annuity, to be paid to himself during the rest of his life. Or, he may divide it into two parts and buy an annuity for himself with one part, and an annuity for his wife with the other part. Or if he prefers he may invest a part of it in an annuity for a crippled child. But while each man's capital shall thus go back to himself, or his heirs at his death, yet the stock for which his money was paid shall go back to be redistributed among the incoming generation as the next feature of our plan will explain. 4. Eighth Fundamental Feature. The members of each new generation shall be listed in the order of their ages. And each one, as he comes of age, or reaches, say, the age of twenty, shall be required to subscribe his quota of the capital like the generation preceeding him. The members of the incoming generation shall thus become in turn responsible sovereign factors in the business corporation, and take the place of those going out through the gate of death. After this plan is fully introduced, the government could reserve from each man's weekly or monthly wages or salary a sum sufficient to make up his required quota at the end of the year, all such amounts to be credited, of course, to his account as so much capital invested by him in his country's industries. While the members of each generation shall thus come and go, each in turn becoming a sovereign, responsible agent in the industrial and commercial life of the country, yet the capital shall ever remain the same, un- disturbed by the coming and going of generations. S s j w > 3 c o -g ^ QH (5 3 < Cfi ^ 0) IS _f^ O c O j ^. *"* ^ IT i I j - W j^ W O H c3 O2 JD m m i < h O H fc j PH CHAPTER VIII. RULES GOVERNING INVESTMENTS. Ninth Fundamental Feature of Our Plan. We shall secure justice and fair-play in the opportunity to invest and earn dividends, by appropriate laws made by the sovereign will of the people. There are those who say that it will be very easy to have justice at the beginning of this new plan, but when it gets established, the old evils will gradually creep in. A few men will find ways of acquiring control. The strong will get their money in and the many will be crowded out. There will be stock-gambling and water- ing of stocks, and all the other evils which exist to-day. But I am persuaded that this pessimistic view is entirely incorrect. For by the very structure of the public corporation as we have outlined it, aided by a few simple Rules governing Investments, all specula- tion in stocks, all watering of stocks, all stock-gambling, and all crowding out of the weak by the strong shall be impossible. To explain, and specify how this will be. (I). No buying and selling of stocks between man and man shall be allowed whatsoever. Each man shall subscribe his quota and that shall be the end of the matter. If he is unable to subscribe his full quota, the Public bank shall subscribe it in his place. But no individual citizen shall come into possession of it. (II). Stocks shall always be exactly at par. There will consequently be no watering of stocks, no deprecia- tion and no premiums. And, therefore, there will be 114 EFFECTIVE INDUSTRIAL REFORM. no gambling in stocks whatsoever. Every man will be 'credited with every dollar that he puts in and debited with every dollar that he takes out. And every dollar that he has invested will go to himself in the form of an annuity or to his heirs in the form of cash. (III). We shall have all the citizens listed in the order of their ages, and we shall keep open every man's opportunity to invest equally with every other man. The chief danger to be guarded against in any plan of reform is the crowding out of the weaker by the stronger and more thrifty, in the matter of investments. But this shall be utterly impossible under our plan. For under our plan we shall have two classes or methods of investments. First, subscriptions of stock, directly in the public Industries; Second, subscrip- tions or Investments in the Public Bank. Now in order to protect each man's right to invest equally with every other, we shall have the citizens listed ac- cording to age, and no person shall be permitted to subscribe or own directly of the public stocks more than the maximum average quota, which shall be deter- mined by a commission chosen by the people. The commission on wages and salaries might be also the com- mission on Maximum investment. The present wealth of the country being what it is, the maximum stock allowed to each man in justice to the rest would be about $400 a year or about $10.000 when he was forty-five or older. Hence we would make it a rule that no man would be allowed to invest directly in the public stock more than this maximum amount, until the wealth of the country was increased. RULES GOVERNING INVESTMENTS. 115 The wealth of the country, however, is rapidly increas- ing and, hence, this maximum amount allowed, would rapidly increase also. But some one asks, Could not a wealthy person go and buy stocks from another in the streets and so come into possession of more than his share? No, for there would be no buying and selling of stocks in the streets or anywhere else between man and man, permitted. All the people in the community, being listed in the order of their ages, as the members of the new genera- tion come of age, they shall, as we have said, come up and subscribe their due amount and no more. And this they will do from year to year and that will be the end of the matter. But will not the law of inheritance interfere with this law of distribution and bring to some persons more than their share? No, for when a man shall die, his capital shall be paid in cash to his heirs, but the stock will go to the new generation of investors. But how about the difference in dividends earned by different plants, will not this create injustice and trouble? No, for the dividends of all the utilities of each community and ultimately of the United States shall be pooled. And the percentage paid to each man will be the average percentage or dividends earned by all the utilities of the community. Thus it will be im- possible for any one to come into possession of more than his due proportion of the public stock. And since stocks will always be kept exactly at par, it follows from the preceeding rules that all watering of stock, or speculation in stock, or gambling in stock, will be forever impossible. 116 EFFECTIVE INDUSTRIAL REFORM. But suppose that a man is unable to subscribe his full quota, will that not necessitate his stock's going to someone else, and will he not thereby lose his oppor- tunity to invest his full quota? No, for in.case a person does not or cannot subscribe his full quota, his stock shall not go to any private investor. On the contrary, it shall be taken up by the public Bank; and the man shall be allowed to pay for it gradually until his whole quota has come into his possession. Of course, the dividends of that portion of his stock held by the bank shall go to the depositors until it is paid. The same rule shall apply to men who are intempe- rate and thriftless. Their quota unsubscribed, shall be taken and held by the public bank. And when they shall reform their ways and come with their money to the bank, their stock shall be re-assigned to them. The same course will be pursued, when a man shall with- draw a portion of his investment from the stocks of his country. For we shall allow a man at any time to withdraw his capital, providing there is money in the bank sufficient to supply his place. But when a man shall so withdraw his capital, it will be the public bank that will hold his stock. And when he shall return and desire to regain his stock, he shall be able to do so by paying in its par value. Thus every man's oppor- tunity to invest in the stocks of his country's industries shall be fully protected. (IV). We shall authorize the Public Bank which we shall establish to receive and invest, in addition to the direct stock subscribed, all the surplus savings of the people as opportunity shall offer. RULES GOVERNING INVESTMENTS. 117 In our attempt by the preceding rule to protect the weak against being crowded out by the strong there is danger of wronging the strong and more competent. For there are men who are more capable and thrifty than others. These will save more than others and desire to invest more than the maximum quota. And it will be right for them to invest all that they can legitimately save, providing they do not crowd out others. How shall their rights be protected? We will protect their rights by means of the Public Bank which shall be an organic feature of our plan. For we shall establish such a Public Bank; and we shall invite all, who desire, to deposit their surplus savings with this Bank. And then the community can so add to, and enlarge the industrial and commercial enterprises of the country as to afford, as we intimated in a preceding page, a place where all the surplus savings of the people can be invested and made to earn dividends equally with the other capital of the country. The only differ- ence between investing money by direct subscription of stock and by depositing it in the Public Bank will be that in the former case the money will be invested perm- anently for life (unless the investor himself should desire to draw it out), while in the latter case the money shall be invested for life only on condition and in such amounts as the business of the country and the rights of other investors shall warrant. But with that enterprise which marks the people of the United States, I believe that it would be easy so to enlarge our business as to keep all this surplus money fully invested. The larger part of it could be kept earning dividends equal with 118 EFFECTIVE INDUSTRIAL REFORM. the invested stocks of the country and every dollar could be made to earn something. Thus while protecting every man's right to invest equally with every other, we shall not deprive the more competent of the opportunity to get all their sur- plus savings invested also. And so justice shall be done. 6. (V). The requirement to invest shall not be made oppressive nor be unjustly enforced. Our grounds for making the investment of the capital compulsory, if need be, are first, because if the people are to form themselves successfully into a busi- ness corporation to own their own utilities, they must be able to command the capital when needed. Secondly, because it is good for the individual to feel, a little, the spur of compulsion in the matter and so make him more certain to invest for his own good. Thirdly, by making the subscription of stock compulsory we shall prevent any man's getting up a faction to thwart the people in this plan of reform. But this exaction of capital shall not be unjust nor oppressive. (1). For we shall require from different men not necessarily the "same amount down but a sum propor- tionate to the income and ability of each to subscribe. Suppose for example that there was a man who for some reason simply could not, even when given time, pay the required quota needed of him to capitalize the Chicago Street-car roads, what would we do ? We simply would not require it of him. But how would the deficit in NOTE. Long distance transmission of power by means of electricity, gives almost every water-fall immense value. In the future, in all except the prairie country, transportation, travel, lighting, manufacturing, even the routine duties of the housewife, will be done by electricity from water-power. After the first cost of building the dams and equipping them with electric dynamos, the expenses will be small and the profits immense. Mr. Smith, commissioner of Corporations, says that an embryonic water-power trust, headed by the General Electric and Westing- house companies, is rapidly seizing possession for a mere. song of all the water-power of the country. See World's Work, June 1909, p. 11638 and especially McClure's Magazine, May 1909 "The National Water-Power Trust," by J. C. Welliver. RULES GOVERNING INVESTMENTS. 119 his case and others like him be made up? It would be made up by the public Bank, and, if need be, by a call for money sufficient to make up the required amount. (2). We would not require any man to subscribe after a certain age was reached. The question is asked, for how long shall a man be required to invest in his country's industries? Shall it be as long as he lives? And what is the aggregate quota that he will be called u*pon to invest year by year? It is evident that since the wealth of our country is limited, there is a limit to the aggregate quota which each man has a right to subscribe and ought to sub- scribe. And there should be a definite sum that a man shall be called upon to invest year by year. Further, when a man has subscribed his aggregate quota, and has enough to support himself the rest of his days, he should not be required to continue to subscribe down to the end of life. What rule, then, regarding this matter shall we make ? It is evident that a man ought to have his full quota subscribed by the time that he is, say, forty-five. We shall, therefore, make it a law, when our system is established, that no man shall be required to subscribe in his country's industries after he reaches forty-five years of age or after his full quota is subscribed. But how much shall we require each man to sub- scribe year by year before that time? It is evident that a young man should subscribe year by year an amount sufficient to make up the aggregate quota due from him when he is forty-five years of age. The 120 EFFECTIVE INDUSTRIAL REFORM. present wealth of the country remaining what it is, the aggregate quota due from every man when he is forty-five is about $10,000. (See Appendix III.) In order to reach this amount at forty-five, each man should subscribe on the average $400 a year. This, therefore, is the amount that each man would have the right to subscribe and which the government shall call upon him to subscribe year by year, when our plan is fully inaugurated. But when a man had reached his $10,000 limit, would the government still allow him to invest, if he so desired? Certainly it would, providing all below him had invested their full quota or all they desired and there was still more capital required. But as I have said, he would be required to bring his money to the Public Bank and invest it through that as he had op- portunity. To explain. It is evident that all young men on arriving at 21 years, would be allowed to invest and would be called upon to invest $400, and to keep investing $400 a year until their full aggregate quota was reached. This would mean that all young men at, say, 30 years would have the right to have in $4000. All at 40, would have the right to have in $8000. And all at 45, to have in $10,000. Now, if, after all the younger men have subscribed, their full quota, accord- ing to age, there should be still more capital needed, the older men or those having in the full aggregate quota of $10,000 would be permitted to invest still more, pro- portionately to the surplus capital needed. In other words, the only limit that we shall put to any man's RULES GOVERNING INVESTMENTS. 121 investing, is the limit of the aggregate capital needed and the rights of his fellowmen to an equal chance with himself. It is evident that as the wealth of the country increases, (and it is increasing with great rapidity), the aggregate quota of each will be increased and the quota required from each, year by year, will also be increased. And in any case a man can bring his surplus savings to the Public Bank to be invested as opportunity affords. And in an energetic community, I believe that there will always be new enterprises demanding capital and making it possible to keep all the surplus savings of the people invested. (3). We shall allow men to withdraw their money with such restrictions only as the good of the public and the individual may demand. A question which occurs to most minds when they consider this new scheme of reform for the first time is: When a man has invested his quota will he be obliged to keep it in forever, that is, until death, or will he be allowed on certain conditions to withdraw it ? Our scheme of reform goes, indeed, on the theory that each man is to build himself as a permanent or- ganic factor into his country's industries, by subscrib- ing his quota of the aggregate capital, and keeping it subscribed as long as life shall last. It views his capi- tal and his place in the industrial system, like his place in the political system, as something sacred and inaliena- ble. Hence, our plan excludes all speculation in stocks f and all possibility of speculation either within or with- out the industrial office. Stocks are, as we have said, 122 EFFECTIVE INDUSTRIAL REFORM. to be always at par; every man is to invest in his turn and in his proper quota; and hence, every man is expected to stay in as a permanent organic factor in his country's industrial activities. And yet a certain degree of liberty in this matter perhaps ought to be allowed. Men may hesitate to adopt a scheme of reform, if, when they put their money in, there is absolutely no possibility, under any condition, of getting it out. We shall, therefore, grant the following privileges in this matter of Investments. First, When a citizen shall remove his residence permanently from a certain community, city, state or nation, he shall be allowed to withdraw his stock from the local industries providing there is some one else, especially a resident citizen, ready to take his place, or providing there is money in the Public Bank sufficient to take his stock. Under our plan our indus- tries shall be classified into Local, State, National, and International. Local industries shall be those in- dustries confined to a local community, as those of a city. Now it is evident that a citizen ought to have the right to remove his place of residence from one city to another, if he so desires. It is also evident that he should not be compelled to keep his capital invested in the city which he has left, if he should desire, say, to get it invested in the new community or state to which he has come. Whenever, therefore, a citizen shall permanently remove his place of residence to a new city, he shall be allowed to withdraw his capital from the Local industries of the place, providing of RULES GOVERNING INVESTMENTS. 123 course, there is some one else, some new resident, wil- ling to buy, or providing the public Bank is able to take his stock. This privilege shall be granted in justice to each citizen. Second. Whenever a citizen shall permanently remove his residence to a new community, in city, state, or nation, the community from which he goes, may if it chooses, compel him to withdraw his capital invested in its local industries that those who remain may take his place. This law should be made in jus- tice to each community and to those who remain. Third. We would recommend that each commun- ity fix upon a certain minimum sum or proportional part of each man's quota, which he should be required to keep invested, and then allow each to offer all be- yond that to the Public Bank, if at any time he should so desire. How great this minimum amount should be, we leave to each city, state, or nation, to decide for itself. Experience must be the final teacher in this matter. Some may argue that the liberty of with- drawing on removing one's residence, is all that any one needs. "If a man does not desire to invest in the industries of a locality, let him withdraw his residence, and take his capital with him. But if he will remain in a place, let him subscribe his full quota of its needed capital and bear his share of its burdens and reap his share of its rewards." And yet there may be condi- tions when a man ought to be allowed to withdraw all, or at least, a part of his quota, as when a young man should desire to use his capital in finishing a col- lege education, or when a man had met with a severe 124 EFFECTIVE INDUSTRIAL REFORM. accident, or when a man has reached extreme old age and needs for a time to draw on his capital. All these cases should be considered and provided for. But the chief ground for granting this privilege of withdrawing at least a portion of one's capital stock providing the funds or deposits in the public Bank would permit it, is that men love liberty; and though few, I am convinced, would care to use the privilege to any great extent, yet men will feel easier, if they know that they can withdraw their capital at any time should they so desire. Many persons might refuse, indeed, to vote for the new scheme unless this privilege was al- lowed. And I believe that while a very few ne'er-do- wells might abuse the privilege, yet each man's self- interest and other influences, would all tend to cause each one to keep in his full quota and so make and keep himself a full organic factor in his country's- industrial life. But by whom would this stock in every case be taken? It would in every case, as I have intimated, be taken, and held by the Public Bank, at par. And the dividends would go to the individual investors. The Public Bank would hold this stock in its posses- sion or care, until the man who sold it desired to buy it back, or until his death; in which event it would be redistributed among the living. The object of having the Public Bank thus in every case take the stock, when men desire to withdraw, would be chiefly, in order to preserve for each man the opportunity to buy his stock back should he, at some future time, desire to do so. If his stock was given to some private individual, this would make it impossible, RULES GOVERNING INVESTMENTS. 125 without some most complex arrangement, to plan so that he could ever get it back. On selling his stock, therefore, to some private individual his opportunity to invest that portion of his savings would be gone forever. But if the Public Bank should hold his stock, then he could at any time buy it back at par and so recover his opportunity to invest. Thus in every case, when any man, through im- providence or drunkenness or misfortune or ill health should fail to make his investment at the proper time, we shall make it a law for the Public Bank to make it for him so that, if at any time, the man should reform, or recover his health and desire to recover the oppor- tunity lost, he could do so. This law would also prevent, absolutely, every per- son from getting possession of more than his proper quota of the stock in his proper time. By this provision it would be possible also for any man at any time to get his money out of the Public corporation, if he should so desire, and yet he would not lose the opportunity of putting it back in again, later if he should desire to do so. And the use of this privilege would in no wise endanger the object for which our scheme of reform is adopted. For no per- son could, by the exploitation of this privilege, ever get possession of more than his share of the stock. The only possible evil that could come from granting the privilege to withdraw one's stock would be the pos- sibility that the ne'er-do-wells would abuse it to their own harm, that is to the loss of their opportunity to invest and obtain a support for old age. Whether, for 126 EFFECTIVE INDUSTRIAL REFORM. the sake of these ne'er-do-wells, we should never allow any person to withdraw his stock, experience alone can determine. (VI). Finally, these rules can be modified or amended at any time by the people as justice may demand. It is impossible before a system has been put to the test to provide for every contingency. And certain rules adopted beforehand may prove to be im- perfect. The framers of the constitution of the United States did not provide for everything with the first draft of that document. To provide for all imperfec- tions, they gave the people the power to amend.- We shall have the same power in forming our industrial constitution. If, at any time, we find that new rules are needed or that the old are imperfect, amendments can be made and so justice be done. But such amend- ments shall become law only when adopted by the majority referendum vote of the people. I have now unfolded the chief laws governing In- vestments. Reviewing these laws the following af- firmations can be made. First. The right of each man to invest equally with every other shall be absolutely secure. There will be no possibility of any one's taking it from him. The only person who, under our plan, can injure any man, will be the man himself. If a man will drink, or will be lazy if a man simply will not work and will not invest, then the Industrial Board will be obliged to allow his capital to be subscribed by the Public Bank and allow his dividends to go to the depositors. But it will be the man himself and no one else who will Copyrighted by Underwood and Underwood, N. Y. THE NEW YORK STOCK EXCHANGE (1909). Office of J. P. Morgan on Corner at left. NOTE. THE NEW YORK STOCK EXCHANGE. In the past decade the average annual sale of shares in the New York Stock Exchange have involved an annual turn over of nearly $15,000,000,000; and Bond transactions have averaged about $800,000,000. But only a small part of these sales were of an investment character; the larger part was virtual gambling.* When my scheme is established the Stock Exchange and kin- dred institutions, as the Produce Exchange, will disappear. *See Report of Mr. Hughes' Committee on Speculations in Se- curities and Commodities. June 7, 1909. RULES GOVERNING INVESTMENTS. 127 deprive him of his right in the matter. Furthermore, our plan will allow the man to repent, reform, and recover his stock if he will. Second. Our plan will abolish all speculation in stocks, all watering of stocks, and all stock-gambling of every kind whatsoever. Hence, every man's Capi- tal shall be absolutely safe, as safe as the wealth of the whole country can make it; for the wealth of the whole country will be behind it. His dividends shall be safe and equal to every one else's; that is, he will reap the same percentage on his capital as any one else. And his capital shall be invested permanently; it shall be in for life, unless he should be so foolish as to draw it out himself, should the state permit it. Third. Our plan, by encouraging enterprise, will so enlarge the business of the country as to provide a place for the investment of all the savings of the people, and it will enable each citizen to build himself right up into the industrial life of the country and become a sovereign responsible factor there. It will constitute each community into a great industrial and commercial democracy with the rights of all adequately protected. Finally, we see that under our plan the stock and produce exchange and all similar institutions, with all their evil speculation and gambling, will be abolished forever. The Public Bank will take their place in all legitimate exchange of stocks. WORKS OF THE GENERAL ELECTRIC The General Electric Company, like many other large corpora- tions, has an "Inventions Department." It embraces the fifty engineers in the various departments, one of whose duties is to be on the alert for all possible improvements, each of which when perfected is patented and owned by the corporation. In the year 1907, 615 ideas, the products of the inventive genius of 300 men, were patented by the corporation. Thus the Corpora- tion corrals all useful inventions to its own profit (p. 37) and the defeat of competitiors. See World's Work, June 1905, p. 6296- 6298. COMPANY, SCHENECTADY, N. Y. The plants of the General Electric and Westinghouse companies should be acquired by the people, and with these we should equip our water-falls. It is these two companies that lead in the monopoly seeking to acquire possession of all water power sites. (See note opp. page 119.) Already many of the best water-power sites in the country have been quietly seized by this national water power syndicate. See "The National Water-Power Trust," by J. C. Welliver, Mc- Clure's Magazine, May, 1909. CHAPTER IX. FUNDAMENTAL FEATURES THIRD GROUP. In the two preceding chapters, I unfolded the special features of organization and administration in our plan by which to secure the greatest efficiency and fair-play in the industrial and commercial world under our new scheme. But there is another important group of factors which we should notice and which are needed to crown the whole new system and make it complete. 1. Tenth Fundamental Feature of our Plan. We shall make such needed changes in the training of the young in our public schools as to fit them for life's vocations and make our plan of reform a success. In short, we shall correlate our school system with the demands of in- dustrial reform. As I have implied in a previous chapter, (p. 44) in order to remedy present evils, we need not only a new industrial system, but also a more intelligent and a more efficient manhood and womanhood. To specify. (i) In order to perfect our system of industrial re- form, we need, first, a manhood and womanhood, trained vocationally, that is trained for the necessary callings of life. The needs of human life have given rise to a multi- tude of distinct vocations or callings, industrial, political, medical and religious. Now that boy or girl who would succeed in life, must be specially trained for some one of these vocations and fitted to fill it with intelligence and efficiency. FUNDAMENTAL FEATURES THIRD GROUP. 129 Our school system to-day fails to do this work and then we blame the boy and the girl for their incapacity and lack of intelligence. Now, in our plan of reform, our first work shall be to see that each calling is properly remunerated, and, then, to see to it that each boy is fitted for some one vocation, and is able to serve society with intelligence and efficiency and make a good living for himself and family. We shall also train the boys and the girls in the virtues of indi- vidual and domestic thrift, economy and frugality. (2) We shall also train the young in Social econo- mics, or Political Economy, as it is called. We shall take care not only to train each boy and girl in the laws relating to the production of wealth and the winning of an income, but also in the methods by which the people are despoiled by the industrial baron in the present system, and how by industrial cooperation, under law, these evils can be averted. (3) We shall train the young morally, that is, in the love of justice and humanity; they shall be made to see the evil and wickedness of the predaceous spirit which now rules the industrial world, and to see the beauty and the economic necessity of justice, coopera- tion and the square deal in human society. (4) But we shall not stop with education. It shall be our resolute policy, to search out the causes of those fetters of body and mind that spring from an evil in- heritance. Is it not a fact that multitudes of pregnant mothers, overworked and insufficiently nourished, bring into the world children handicapped for life by a dulled intellect and nerveless body? And how many children 130 EFFECTIVE INDUSTRIAL REFORM. are fettered for life by weaknesses entailed from the ignorance and vices of ancestors. Now it shall be our policy, to remove these evils of inheritance so far as they can be by a new educational system and a new and better scheme of industrial and commercial life. We shall aim, in short, to give every child an unfettered start in life, and then by a wise education and training make him equal with the very best. This policy relating to education and inheritance, we shall pursue because it is dictated not only by the largest philanthropy, but by the wisest self-interest also. And we shall pursue it as an essential part of our new industrial scheme, and we shall demand that it be faithfully carried out. 2. Eleventh Fundamental Feature of our Plan. It shall be the supreme aim and purpose of this scheme of reform to perform every economic function with justice, efficiency and in subordination to the welfare of the whole people. It should be repeated again and again that there are three important functions which it is imperative for every industrial system to perform if it would be adequate to meet all industrial needs. The first relates as I have said to work and wages; the second to com- modities and prices, and the third, to opportunity to invest one's savings, earn dividends and increase one's wealth. Now it shall be the pronounced aim of our scheme to perform all three of these imperative functions and to perform them far more effectively than the present system and with justice toward all. FUNDAMENTAL FEATURES THIRD GROUP. 131 First, it shall be the law of the new plan to develop, utilize and organize all the creative energies of labor in the country, both of hand and brain, and thereby, not only increase the power of the country to create wealth, but also to supply every industrious person with productive, remunerative labor. And we shall see that each man is paid a just wage or salary proportionate to his worth. Second, it shall be our law to provide the whole people with all useful commodities and all needed ser- vice at a just price. And we shall not be governed in this matter like our present system by mere motives of profit but the needs of the whole people. And people who dwell in the country and those who dwell in the city will be supplied as far as possible with all desirable utilities. Third, we shall, as we have been saying all along, aim to utilize all the savings of the people, in short, utilize and organize all the energies of the capital saved by the people, and thereby not only increase the coun- try's wealth, but open the way for the investment of all the people's savings to the advantage of all and to the increase of individual wealth. These three functions, we shall make it our law to perform. And since the whole people shall be supreme, these three functions shall inevitably be carried out. And they shall be carried out with justice toward all and in subordination to the welfare of the whole people. All needed laws relating to the proper location of fac- tories, hours of labor, sanitation, child-labor, woman's labor, and so forth shall be made as the welfare of the people shall demand. ' 132 EFFECTIVE INDUSTRIAL REFORM. 3. Twelfth Fundamental Feature of our Plan. This scheme of reform shall be embodied in constitutional law, and it shall be the duty of certain officials elected for the purpose to see that the plan is properly carried out. For while our plan is not government ownership as that term is commonly understood, yet it is a form of Public Ownership established and enforced by law. It follows, therefore, that the whole scheme must be em- bodied in constitutional law. When our fathers contemplated self-government, they saw the importance of a written constitution em- bodying its fundamental features. This constitution they Saw would serve ever to hold up before the people the great principles upon which their government was established; it would ever keep them in the path along which they must travel. Capable of amendment, it could never enslave them, and yet it would keep them from hasty departure from the great principles of jus- tice and liberty. And it would protect the minority from despotic measures on the part of the majority. Now when the people contemplate constituting the community into a single producing firm in the form of a vast stock-corporation, with every one as a respons- ible agent in it, when they contemplate thereby creat- ing their own utilities and performing their own indus- trial functions, with justice toward all, it is imperative that they embody their plan in constitutional law, which though capable of amendment, shall hold them to the great principles which they have adopted, and protect every one in his industrial rights. FUNDAMENTAL FEATURES THIRD GROUP. 133 Now this is what we shall do in our plan. We shall have the different features which we have unfolded, embodied in forms of constitutional law and so made a part of the fundamental law of the land. For the efficient execution of these functions, we shall create a new Public Department called the Indus- trial Department of Public Service, with a central In- dustrial office, including a Public Bank. But this new Department shall be entirely distinct from the other Public departments and it shall be strictly autonomous. The agents through which the people act authorita- tively are the various Public Departments. And we believe that the Departments of Public Service should be greatly enlarged. But each department should be kept distinct and autonomous. The department of Law and Order or government proper should be kept distinct from that of Education; and the department of Industry and Commerce should be kept distinct from both. so that if all other departments should be des- troyed, the Industrial Department would remain. We would, therefore, have the directors of each plant elected directly by the people and made responsible directly to the people. They should not be bound to consult the mayor or in any way be subordinate to him. The Mayor should be supreme in the maintenance of law and order; the Directors should be supreme in managing the business of the people and making it a success. Both Mayor and Directors should be each sovereign in his own sphere, but independent of each other, and autonomous, and both directly responsible to the people whose agents they are. Of course, if an 134 EFFECTIVE INDUSTRIAL REFORM. official, in the Industrial Department, is guilty of wrong, he can be indicted and tried before the courts of law. But, otherwise, he shall not be interfered with, by government officials. It shall be the duty of the government, however, to perform certain functions. First of all, it shall see that the proper Industrial Department is created according to law and the needed Public Bank established. It shall take care that commissioners are appointed by the people at the proper time, according to law, for the acquiring of public possession of any industry as the people may elect, or for the starting of a new in- dustry. And it shall give its bonds when necessary for the payment of any industry. It shall require the people to subscribe the required capital for each new industry, for which it shall issue its guaranteed bonds, at par value, for the money sub- scribed. And in case of a deficit it shall require the people to make up the deficit according to law. It shall guarantee a minimum dividend of say 5 %. It shall arrange for the election of the directors of each industry by the qualified subscribers of the capital according to law. It shall arrange for the election of Commissioners of Wages and Salaries according to law and it shall see that Arbitration Committees are appointed for each industry as needed. It shall see that the Industrial office is kept open for recording the names of subscribers and the amount of their subscribed stock; for effecting exchanges of -S 05 _ | "&. ^ s - c =* ^ tl-4 -S o X <*H H ^ FUNDAMENTAL FEATURES THIRD GROUP. 135 stock as desired by individuals and as permitted by law; for receiving from the directors reports of their service and the condition of the business as required by law; and lastly for paying to the shareholders the dividends earned by the industries of the land. It shall pass all laws and regulations necessary to the efficient achievement of every economic function with justice toward all, providing that no enactment shall become law until adopted by a majority referen- dum vote of the people. By these rules and regulations embodied in the law of the land, we shall reduce all business to subjection to law, to constitutional law, and thereby secure jus- tice to all. Our Industrial activities will thus become institutionalized, that is, incorporated in industrial institutions, controlled by law. 4. I have now unfolded the several features of what I believe to be the true method of effective industrial reform. Let us review the ground which we have trav- ersed and obtain in brief the grand outlines of our scheme. First Group Fundamental Principles. First. Each community (town, county, city, state, nation), shall constitute itself by law into a single Business Corporation with every citizen as a responsible sovereign agent in it, to own and control its own proper utilities, industrial and commercial, as far as the in- terests of the people may demand. This business cor- poration is to be no charity organization. It is to be based upon strictly business principles. And it is to 136 EFFECTIVE INDUSTRIAL REFORM. be the agent of the whole people for the acquisition of individual wealth with justice toward all. Second. Each citizen shall subscribe and pay in by law his proper quota of the needed capital, the gov- ernment shall reserve from each man's weekly or monthly salary a sum sufficient for this purpose. The amount thus reserved shall be credited to each man's account as so much capital invested and owned. Third. The government shall guarantee to each investor a minimum dividend of say 5%, and as much more, as by wise management, the community can make the business pay. Fourth. The people shall acquire and own collec- tively every plant which the interests of the people may demand. Wherever money is to be made or wealth to be created, there we shall go and acquire possession. Second Group Administration. Fifth. The relative wages and salaries of workmen and officials, shall be fixed by a commission chosen by the people to that end. We shall thus secure justice in the matter of wages and salaries. Sixth. The Directors shall be chosen by the people and be made responsible to the people. Each director to be nominated at least one month before election. Seventh. Each man's capital shall be paid in cash to his heirs at his death; or he may, at his option, convert it into an annuity, at any period during his life, to be paid to himself (or wife or child), until death. Thus every man or his heirs is to receive back every dollar that he invests. FUNDAMENTAL FEATURES THIRD GROUP. 137 Eighth. The members of each generation, as they become of age, are to subscribe their quota of the capital by law like the generation preceding them, and so become in turn capitalistic, responsible, and sov- ereign factors in the business corporation and take the place of those going out through the gate of death. Ninth. Each man's opportunity to invest equally with every other, to be protected by adequate rules. The strong shall not crowd out the weak, nor the weak the strong, and the requirements to subscribe capital shall not be oppressive. There shall be no buying and selling of stocks and stocks shall be always at par. Third and Last Group. Tenth. The people shall be adequately educated morally, economically, and vocationally, so as to protect themselves against spoliation and fit themselves for life. Eleventh. This business corporation shall perform all the three economic functions, in relation to work and wages, commodities and prices, and in securing op- portunity to invest savings and earn dividends and so accumulate individual wealth. Twelfth. The whole scheme shall be embodied in constitutional law and carried into execution by a special Public Department created to that end. 5. Such are the grand features of our plan as unfolded in the preceding pages. They can be reduced to four distinctive principles as follows: I. The public Ownership and Sovereign Control of 138 EFFECTIVE INDUSTRIAL REFORM. each plant by the whole people organized by law into an Efficient Business Corporation for that end. II. The required Individual Subscription of the Capital, the Individual Ownership of the Stock and the earning of Dividends, just as in the private corporation. III. The Subordination of the whole to the acqui- sition of Individual Wealth, just as in the private cor- poration, but with efficiency and justice toward all. IV. The application of this plan to every industry just so fast as the welfare of the people demand it until the whole industrial and commercial realm is brought under the same Efficient Business Corporation, directed by the sovereign will of the people. 6. For the successful operation of this scheme, we shall throw the entire responsibility upon the people them- selves. Our plan of reform does not contemplate the forcing of riches upon anybody. It does not seek to make men wealthy whether they work or not. Our plan differs from the present system in that it will constitute the people into a single Business corpora- tion and give to the people, individually and collec- tively, the supreme ownership and control of all their industrial activities; it will free them forever from exploitation and industrial oppression. It will take away individualistic strife and war, and unite the people in sincere co-operative effort. It will protect every man in all his industrial rights, and grant to each equal opportunity with every other man. And it will inspire every man to do his best. FUNDAMENTAL FEATURES THIRD GROUP. 139 But having done this, it will throw the whole re- sponsibility of making the scheme a success upon the people individually and collectively. And it will throw upon each man the responsibility of using all the oppor- tunities and encouragement that our plan offers, for the acquisition, for himself, of individual wealth and gain. And we believe that inspired by the sense of justice and fair treatment which each man will receive and led onward by the hopes and prospects held out by this plan, each man will do his best except the physically and mentally unsound, which shall be an ever decreas- ing number under our plan, and all will attain to a competence by the time that middle age is reached and poverty will disappear. 7. This scheme I would commend to every city, vil- lage, and state in the United States and ask each to put it to the test of actual experience. Not that I would apply it to all industries at once. I am in favor of no sudden revolution. Neither do I believe it pos- sible to reform social conditions, out of hand, by any sudden method. But no sudden method is needed. We shall begin our reform by persuading some city or village to adopt and apply our scheme to some one industry as its Electric lighting plant or its Street-car lines. Several cities might do this and so put the scheme to the test. Then, if successful in these initial experiments, other cities could take up the experiment, and other Indus- tries could be municipalized. 140 EFFECTIVE INDUSTRIAL REFORM. Then, some state might be persuaded to try it in relation to its railways and coal mines and other indus- tries. Thus the people could advance in the application of this method of reform, step by step, just as fast as it could be made successful, until all industries were owned by the public. We would apply this plan ulti- mately even to the United States Mail; for that is a productive industry and ought to pay a dividend. Besides, its affairs would be administered much more efficiently and with less corruption than now, and it would no longer be the agent of special privilege, to powerful corporations. We would thus cause every city, village, state, and nation, and ultimately the whole world to become or- ganized into one vast industrial Corporation with every man, as a shareholder and a responsible agent in it, and subordinate the whole industrial system of the earth to the acquisition of individual wealth, with justice toward all. < fe s : aj ^ PH 'So tf o o to g A COUNTRY STORE. A Large Group of Utilities which the people should own and in the profits of which all should share is all Stores. By consolidating all stores in city and village, a vast saving in running expenses could be made. Prices would be lowered and handsome dividends realized. If the people do not do this the Corporations will. The United Dry Goods Co. incorporated May 1909 with a prospective capital- ization of $51,000,000 looks in this direction. NOTE TO PART III. The pictures on the preceding pages call attention to a few of the Industries owned by the Trust. There are many more. Sereno S. Pratt in The World's Work, 1907, gives the following list of the Industries, already owned or controlled, at that date, by the Irresponsible Corporation. Banking Railroads Iron and Steel Telegraph Coal Cable Gas Telephone Electric Light Traction Shipping Express Oil Mining Beef Sugar Insurance Tobacco Copper Coffee Cotton Wool Hardware Machinery Real Estate Building Dry Goods Paper Agricultural Implements Food Products The profits on all these Industries are enormous. They should all be owned and controlled by the people, constituted by law into a Stock-Corporation to that end. Our duty as citizens and as stewards of the wealth of this coun- try, and the protection of our rights and the rights of our children, demand that we do this. *See "Our Financial Oligarchy" by Sereno S. Pratt, in the World's Work, Vol. 10, p. 6504. Part III. Results From the Adoption of This Plan. CHAPTER X. THE PEOPLE SUPREME AND JUSTICE EN- THRONED. We are not among those who imagine that all the ills of society can be cured by any one reform. And we do not imagine that the millenium will come with the adoption of Public Ownership with an Individually owned Capital, unless certain other reforms go along with it. But we do believe that the adoption of that system will cure the radical defects of our present industrial system and make America a new world. It will create industrially a new heavens and a new earth, and indirectly affect most favorably human character and every institution of human life. In the first place, the adoption of our plan will overthrow forever that despotic power which now rules the industrial world and for the first time in human history the people will be supreme within the industrial realm and all will co-operate for the efficient acquisition of wealth. The truth of this affirmation can be seen at a glance. For when once the community shall have organized itself by law into a single Business Corporation and thereby acquired ownership and control of its own industrial and commercial life, the despotic power of the few shall be overthrown forever and the control of 142 EFFECTIVE INDUSTRIAL REFORM. each plant shall be given entirely and forever into the hands of the people. For 'in very deed and truth, the people will collectively own each plant ; they will choose by ballot their own directors and determine their salar- ies ; they will fix their own wages and make their own laws. Where then will there be any room for despotic power? And it will not be possible for any man or any com- bination of men to regain control. For by what method could they do this? They cannot regain control by acquiring possession of a majority of the stock. For since no man will ever be allowed to subscribe for more than his quota, and since every man shall be required to own at least a minimum amount, the stock will always be too widely distributed to allow any combi- nation to come into power. And besides, if a few men should come into possession of a large proportion of the stock (which is impossible), this concentration of power would soon be broken, for, on the death of one of the members, his stock would not be retained by the combination, but would go back and be redistributed among the rising generation. Thus under our plan there will be a constant redistribution of the stock, making all permanent concentration of wealth in a few hands impossible. And no combination of men could acquire control through the Industrial officials. For the Industrial officials shall be chosen by the people; their salaries shall be fixed by the people; and they shall be directly responsible to the people. The officials will, therefore, strive with all their might to please, not some combi- nation of men, however powerful, but the people. RESULTS THE PEOPLE SUPREME. 143 And no group of men can control the wages and salaries of the people. For the people, through their own Commission, chosen directly by themselves, will fix all wages and salaries as public sentiment shall demand. And, finally, the people will make all laws, by ad referendum vote, and determine all methods, and so keep all power within their own hands. Where then, will there be any place for despotic power? Besides, the Australian ballot shall be employed, no man can vote by proxy, and with every man having his capital in- vested and dividends at stake, the people will be in- capable of bribery and will be ever on the alert to pre- vent all usurpation of power and keep their own will supreme. And our plan will abolish forever the old principle of a competitive and predaceous individualism which now lies at the root of our system, and it will substitute in its place the new principle of organized co-operation directed by the sovereign will of the people. The truth of this affirmation is seen at a glance. For when once all the people come to be organized into the same vast producing firm into a single Business corporation, where will there be any place for that predaceous individualism which says, "every man for himself?" And while every man's interests shall be individualized, and the sense of individual responsi- bility will be preserved and intensified, while each man will own his own capital in the form of stock, neverthe- less, all being in the same vast corporation, organized co-operation shall be inevitable. It will become the supreme law governing the action of each and all to- 144 EFFECTIVE INDUSTRIAL REFORM. gether. Thus a new principle will be introduced into the industrial world at its very foundation. And our plan will abolish forever all warfare between capital and labor and all strife between corporation and corporation and class and class. The truth of this affirmation is also seen at a glance. For, first, when once all the people own their own industries, and, according to our plan, each man shall become both capitalist and laborer, employer and em- ployee, where will there be, then, any room for strife between the two? No man will go to war with himself. The "binding link" between capital and labor is the union of both factors in the same man and in every citizen. And such will be the binding link created by the adoption of our scheme of reform. And there can be no longer warfare between corpora- tion and corporation. For there will be only one great corporation and that will embrace all the people. And the warfare which marks every large business to-day, caused by the inside syndicate of capitalists seeking to rob the employer, the consumer and the outside investor, will cease. For there can be no in- side syndicate under our scheme. All the people will have their capital equally invested according to age or practically so, every man will possess equal power with every other. There will, therefore, be no sepa- ration of the people into warring groups as indicated by the terms "inside syndicate" and "outside inves- tors." All will be equally inside and equally outside, if those terms can have any meaning under our plan. And since all men will be both capitalist and em- RESULTS THE PEOPLE SUPREME. 145 ployee, and all, both producer and consumer, all strife between these classes will forever cease. When once our plan is fully inaugurated, an Industrial peace will settle forever upon the world. And organized co- operation, directed by the sovereign will of the people, will be the new principle enthroned for the first time in human history. For the people organized for the first time into a single producing firm, with every man as a responsible, capitalistic and sovereign factor in it, will vigorously co-operate in the production of all utili- ties and in the acquisition of individual wealth and gain. And the motives to vigorous effort, will be as great then as now and far more widely felt. For ALL will have their dividends and their future wealth at stake. And all will strive to do their best. And what a transformation this change in our industrial system will produce in human society and especially in relation to human happiness. All that terrible warfare that now marks the industrial world shall cease. The terrible anxiety and sense of insecur- ity shall be taken away and the human soul shall for the first time in human history experience industrial security and peace. Second Result Justice and Equal Opportunity Es- tablished. The adoption of the new order will bring evenhanded justice and fair-play between man and man within the whole industrial realm. First. It will establish justice in relation to wages and salaries. For under our plan, a few high officials will no longer be allowed to fix their own salaries and take to themselves the lion's share. And the law of 146 EFFECTIVE INDUSTRIAL REFORM. supply and demand, the ability of one man to under- bid another, shall have nothing to do in the matter. Wages and salaries shall be fixed under our plan by a commission chosen by the people to that end. Hence wages and salaries shall be determined by the law of REASON and JUSTICE before a single man is engaged. And the voice of the whole people, collectively expressed, the only legitimate authority in this matter shall say what Reason and Justice demand. And so Justice shall be inevitable. For when, under our plan, each man shall have become a sovereign, capitalistic factor in the single producing firm of the people, the universal demand shall be that justice be done. And the one question which all shall ask will not be How cheap can we get the men, but, what is each man's services worth in this great co-operative whole of which we all are members? What does each man produce? What is he worth relatively to the rest? And compensations for the various vocations shall be fixed according to Justice. Each man shall be able to make effective protest against every wrong and demand that his own rights and the rights of his neighbors be properly re- garded. Not that justice shall come all at once. A sudden revolution in wages and salaries would be unwise. Time and experience shall be necessary to learn exactly what justice demands. Without doubt the enormous salaries now paid to high officials shall be cut in two, and cut in two several times over. But the wages of the great mass of the people shall be changed little by little. The mind of the whole people shall be concen- RESULTS JUSTICE ESTABLISHED. 147 trated on the problem. The relative value of various kinds of labor shall be carefully analysed and compared with each other. And little by little a just judgement shall be attained and little by little justice shall be done. And the obstacles in the way of coming to a just decision shall be removed. To-day one great obstacle in the way of a just judgement is the element of "risk" borne by the capitalist. A man's wages to-day may be small, but he bears no risk in the business. His wages must be paid whether the capitalist makes anything or not. On the other hand, every capitalist runs more or less of a risk all the time. The coming of a com- petitor, a change in population, the failure of some other firm, may at any time plunge him into ruin. This element of risk may wax and wane but it is always present. Now under present conditions capitalists argue, and argue justly, that they need some compensation for bearing this element of risk. And the question comes up, How much of a compensation does this element of risk demand? But that question no man can an- swer, for no man can tell how great the risk is. To-day one's business may seem to be most secure; to-morrow, conditions may arise compelling him to fight for his very life. The result is that every capitalist adopts the law to engage men at the lowest wages possible and take all the rest himself. He must make hay while the sun shines. But under our plan, this disturbing factor shall be removed. When all the people become one great pro- ducing firm, this element of risk will largely disappear, 148 EFFECTIVE INDUSTRIAL REFORM. and in any case, it will be borne by all the people equally. Hence, it can be entirely eliminated from the problem of the relative value of different vocations. And in the new order, we shall come to correctly appreciate many vocations which we now despise. To-day many regard the work of the scavenger and the cleaner of sewers, as "menial" and contemptible. And we regard the men engaged in these callings as little above oxen, worthy of an ox's reward. But when we shall have transformed each community into a single producing firm, doing its own work, when the digger of ditches and other workers in these "menial" callings shall become capitalists with an authority to speak equally with that of every other man, then we shall correctly appreciate these "lower" callings. Let any service be unjustly compensated with low pay and at once we begin to regard it as menial and of little worth. There was a time when the writer of books and the work of the trader, both of which are so honored to-day were regarded as contemptible; and they were so regarded because they were poorly rewarded and inadequately protected. And who knows but that the time may come when the work of cleaning sewers and destroying microbes and so making the city sweet and healthy, shall be regarded with as much honor and viewed as requiring as much skill and training as the work of the physician who cleans out our digestive tract or the dentist who cleans and fills a decayed tooth? At any rate when our plan shall be fully in- augurated, every calling shall be brought before the clear and unbiased judgment of the people, its true RESULTS JUSTICE ESTABLISHED. 149 worth shall be determined and justice shall be done. To what extent the wages and salaries of skilled and common labor shall be increased, how much the salaries of teachers and others shall be raised, we can- not prophesy. Charles B. Spahr affirmed in the book before quoted, that one-eighth of the people in the United States received one-half of the aggregate in- come. This would mean that on the introduction of the new order, there will be a radical paring down of the incomes at the top of society and a large lifting up of incomes at the bottom. Farthermore, under the operation of our scheme, working men will be immeas- urably elevated in intelligence and skill. Labor-saving machinery will be applied to many callings now per- formed by manual labor; and the compensation of labor shall be greatly increased. By the term "labor" we mean not only working men, but the farmer and other producers of raw material who are now so poorly compensated. But whatever be the wages of the people in the future, justice shall be done. And for the first time in human history exact and even-handed justice shall rule the Industrial and Commercial world. Farthermore the introduction of our plan will establish equality of opportunity to each man according to his worth, in obtaining work and mounting to high posi- tions. For when the whole people are supreme, and our school system is reformed, all influences shall tend to create the demand that Justice shall be done in this matter also. Second. Justice shall be done in the matter of prices and the quality of commodities paid for. For it is 150 EFFECTIVE INDUSTRIAL REFORM. evident that the one law governing the people under our plan will be to make prices as low as good wages and fair dividends will allow. Third. It can be seen that the new order will bring absolute justice and equal opportunity in the matter of investments and dividends and the acquisition of indi- vidual wealth. For in the first place, with justice in the matter of wages and salaries and with every man's opportunity to invest fully protected, every man shall be able to invest his full quota when his turn to invest shall, from time to time, arrive. And with dividends always equal to all in rate percent, with all graft and watering of stocks abolished, with stocks always at par, and every man's right to continued investment amply protected, the opportunity of each man to save, invest, and acquire wealth will be kept equal with that of every other man and justice shall reign supreme. Thus, under the operation of the new order, our great industrial activities, organized into one whole, shall become the agent of the whole people for the acquisi- tion of individual wealth with justice toward all. Finally. It should be noted that the plan in this book will issue in the just distribution of that wealth which results from the growth of cities and other changes and is not the product of the labor of the possessor. Mr. Carnegie in Problems of To-day speaks of a farmer, able to give each of his two sons a farm, one in the center of Manhattan Island, the other beyond Harlem. Both are of equal value and the sons cast lots for the farms. Both men are equally good and industrious men. But the growth of the city of New RESULTS JUSTICE ESTABLISHED. 151 York northward makes the children of the younger son millionaires, without their doing any work whatever. The community created the millionaires wealth. But the children of the other son remain simple farmers in comfortable "circumstances. Thus, says Mr. Carnegie the wealth of the millionaire is often created without any labor, at least on his own part. Now I maintain that the great wealth of many a man is created in this way. And on the other hand many a man gradually loses everything simply by a reverse process entirely beyond his agency or control, through the gradual moving of business away from his neighborhood. Thus great injustice is done. For I maintain that for a few drones to gradually come into possession of millions created indirectly by the labor of the com- munity, while others who created the wealth remain poor, is unfair. Now my plan will remedy this injustice. For, to return to the illustration, let us suppose that in the case cited, all the real estate in the city and in the whole State was owned by all the people collectively, and that each citizen had his quota of the capital in- vested in it. Then when land at any place increased in value through the growth of the city or any other cause, the profit from the increase would go to all the people alike. In like manner when through any cause a business declined all would share the loss. Thus my plan will bring justice amidst all the rise and fall of values in different places. And yet all will gradually grow richer as the general wealth of the country increases. CHAPTER XI. EFFICIENCY ATTAINED AND THE UNIVERSAL WELFARE PROMOTED. But we have not yet completed our view of the beneficial effects resulting from the introduction of our scheme of reform. In the preceding Chapter, I unfolded the organic results wrought by it in our industrial con- stitution and its moral effects in the realm of Distri- bution, and I showed how it will enthrone justice and fair-play in the whole Industrial and commercial world. We come now to its effect on Production and our whole human life on earth. Efficient Production. Under the new order, produc- tion will become most efficient and the wealth of the country shall be greatly increased. In order to efficiency of production, several condi- tions must be established. First. All warfare between capital and labor, and all strife between corporation and corporation, and class and class, must cease. Second The whole people must become vitally interested in every industry and every plant. Third. The best men must be elected as directors of each plant. Fourth. Officials and workmen must feel the stimulous of a vital interest in their work and the success of the business in which each is engaged. Fifth. The inventive genius of men, both in creating new machinery and developing new methods, must be encouraged. And, Sixth the whole Industrial world must be correlated in all its parts and all so integrated as to form one organized and efficient whole. a * PC 8 PS C5 J3 -s II o *c 5 g EFFICIENCY ATTAINED. 153 Now under the operation of our plan, and under our plan alone, all these conditions will be fully realized. For as we have before shown, all warfare between capital and labor, with all the attendant evils, will cease, and all strife between corporations and classes shall disappear. And since every man shall have from $400 to $10,000 invested, according to age, and since wages and prices and dividends shall be always at stake, every man, young and old, will be vitally inter- ested in the success of every plant and shall demand that each be made successful. For the same reason the people will be careful to elect only the most efficient men to the directorate of each plant. It will be only men who have grown up in the business and whose ability and skill have been tried and proven, that will be chosen. And since every working man and every official will also be a capitalist with dividends at stake, each man and each official will not only strive to do his best but also demand that all others do their best. And the idle and inefficient will be compelled either to do better work or take less pay or be discharged. And every man's inventive genius and his ability to devise new and better methods will be fully aroused and encouraged. For all such skill and ability will be gladly welcomed by all; and the benefits will not be appropriated as now by a despotic plutocracy, but they shall accrue to the advantage of all the people; and each inventor shall be amply rewarded. And under our plan, provision can be made for the opera- tion of individual enterprise by daring souls, acting for a time independent of the people as a whole. The 154 EFFECTIVE INDUSTRIAL REFORM. government can permit and encourage such enterprise with the understanding that when made successful, the enterprise shall be taken over by the people and the promoters amply rewarded. And when every muni- cipality or district, every State, every nation, and when all nations of the earth shall be constituted into a single producing firm according to our plan, it will be possible to correlate and integrate the whole indus- trial activities of each nation and indeed of the whole earth and so achieve the most efficient production and secure the welfare of all the people. Thus it is inevita- ble that under the operation of our scheme of reform, our industrial activities will gradually attain to an ever increasing efficiency to which the imagination can place no limit. And the introduction of the new order will greatly increase the aggregate wealth of the country and make every family well-to-do and even wealthy by the time that middle life is reached. For not only will effi- ciency of production be increased a hundred-fold, not only will the evils of over-production and those financial crashes that periodically come through rash speculation, inflated credit, and the waste of predaceous wealth, be abolished, but a new home-market shall be created which will revolutionize trade and increase wealth in leaps and bounds. Let me explain. In order to sell goods we must have a people able to buy. In order to have a people able to buy, we must have a people who are not only industrious but who are paid the full value of their labor. But to-day from one-half to two- thirds of the people are robbed of their just compen- EFFICIENCY ATTAINED. 155 sation. They are paid barely sufficient to sustain life. And the money which should be paid to them, is wasted in the follies of the rich. What is the result? The result is that we destroy the Home-Market for our goods. We produce but cannot sell. And we have the appalling experience of seeing our granaries filled to overflowing with wheat which we cannot sell and yet the great mass of the people are hungry for bread. We see our store-houses filled to the roof with clothing which we cannot sell, and yet the great mass of the people go naked. We see our carpenters and other workmen going idle unable to get work and yet the great mass of the people are inadequately housed. Thus through the greed of the plunderers at the top, who rob the people of the just remuneration of their toil, we destroy our home-market and arrest the ac- quisition of wealth. Now the adoption of our scheme will change all this. For, first, our plan will cause every man to receive the full remuneration of his labor. And this will mean the doubling and tripling of the incomes of the people. And this will mean the doubling and tripling of the ability of the people to buy. In other words, we shall create a new home-market for our goods such has never existed before, or rather which has been annihilated by the greed of predatory wealth. But what will be the effect of this on the creation of wealth? Its effect will be to double the wealth of the country in a very short time. For with the creation of this vast home-market, there will be a vast revival of industry and a vastly increased demand for capital 156 EFFECTIVE INDUSTRIAL REFORM. and labor, to meet the demand. But this will mean a new call for capital to be invested and a new earning of dividends. In other words, it will mean, immediately a new increase in the aggregate wealth of the country. But the process will not stop here. It will in short never stop. For this increase of wealth under our plan will be distributed among all the people. This will mean a still farther increase in the ability of the people to buy. And this will mean a still farther increase in the demand for goods. This will mean a new demand for capital and labor with new opportunities to invest. And this will again mean a new increase in the aggre- gate and distributed wealth of the land. Thus, under the operation of our plan, the creation and increase of wealth can never be arrested by pre- daceous power. When the wealth which the people create shall come back to the people themselves, there will be no limit to its increase. The people, freed from all trammels and robbery, will be able to create all that they please. And the aggregate and distributed wealth of the country will be doubled again and again. And what will this mean? The aggregate wealth of this country in 1900 was one hundred billions of dollars. It had just doubled itself in thirty years between 1865 and 1895. Now when our plan is adopted the wealth of the country must soon leap to two hundred billions and then to three hundred billions. And what will this mean in relation to the wealth of each man? If the aggregate wealth of the country was now justly distributed after our plan, it would give AGRICULTURAL NATIONAL BANK, PITTSFIELD, MASS. When we have effective Industrial Reform, every industrious man can have at the age of 45 from $10,000 to $12,000 invested in his country's industries, with a guaranteed dividend of $500 or $600 and a surplus making in all, an income of $1000 or $1200, a year, besides his wages (p. 157). EFFICIENCY ATTAINED. 157 to each family when middle life is reached, at least, $10,000.* But when under the operation of our plan the aggregate wealth of the country is doubled or increased again and again, the wealth possessed by each family by middle life will leap to $20,000 and even $30,000. In short, we can set no assignable limit to the wealth that each family may enjoy, when once the people own their own industries and, untrammelled by robbery, create their own products and produce their own wealth. And if on this wealth the people can earn a dividend of 10%, the yearly income of each family above wages and salary shall be from $1000 to $3,000. And here we should observe that the adoption of our plan will do away with all necessity for the perni- cious pension system now advocated by many and in some cases adopted. The pension system, viewed as a remedy for indus- trial wrongs, I am convinced is a perilous mistake. And yet many people are thoughtlessly advocating it; and many capitalists are cunningly advocating and adopting it, f as a preventive of all real industrial reform. Our cities are pensioning their policemen and some pen- sion their teachers in the schools. And certain states- men advocate pensioning all members of the United States civil service. England has recently (1907), passed a measure pensioning all the aged poor. This pension system is most unjust. For either these pensioned classes do or do not receive already the full compensation due their work. If they do, then it is robbery of the people to pay them a pension in addi- *See Appendix III. fSee Chapter XVII. 158 EFFECTIVE INDUSTRIAL REFORM. tion to what they now receive. If they do not, then the people are robbing them and ought to pay them a larger salary. In either case a pension is unjust and out of place. Again, the pension system tends to create a semi- parisitic and a semi-predaceous class, from whom all independence of character and all patriotism has fled, whose only aim will be to load themselves onto the public and secure an increase of pension. However much the English people may deplore the awful poverty of the lower classes, they are not resort- ing to the right method of relieving or curing it. On the contrary, I am convinced that it will work immense harm in destroying independence of character, rapidly developing the pauper spirit, and it will in the end greatly increase the misery it seeks to relieve. The only way to relieve the poverty of the English people is to institute a new industrial system that will lift the heel of Industrial oppression and wrong and give to the people the full earnings of their labor. Then every man shall be able to pension himself, and so be an independent, self-respecting, and self-reliant man. Now the adoption of our scheme of reform will make all resort to the pension system forever unneces- sary. It will aim to educate and train every man for some useful calling. It will aim to employ all the crea- tive energies of labor both of brain and hand and so supply every person with work. It will pay a just wage. It will not despoil men by high prices. It will call upon each man to subscribe his quota of the country's capital and so become a capitalistic and sovereign EFFICIENCY ATTAINED. 159 agent in his country. And on this capital he will re- ceive as large a dividend as he and his fellow citizen can cause the business of the country to earn. Every man will thus be thrown onto his own responsibility. He will feel that the income, the dividends which he receives, he has earned himself. And he will become a self-reliant, self-respecting citizen. Thus our plan will do away with all necessity for that debauching and degrading pension-system which every self-respect- ing man ought to abominate and every wise Statesman despise. 2. And what will all these changes in the Industrial world have on Individual character, home-life, politics, education and religion, and we may add on the happi- ness and welfare of man? We believe that the effect of these changes in all these directions will be simply incalculably for good. In the first place, all poverty and the evils of poverty shall disappear. Moses declared that if the people would be obedient to God's law of justice and mercy, "there would be no poor among them." Jesus affirmed the same thing "Seek ye first the kingdom of God and his righteousness" that is be obedient to the divine law of justice and mercy "and all these things" houses, lands, education, wealth, "shall be added unto you." In the past we have been endeavoring to per- suade individuals to build their lives on the foundations of justice and truth, but we have not endeavored to found society and social institutions on these principles. While we have been exhorting men to be honest in all 160 EFFECTIVE INDUSTRIAL REFORM. their business relations, we have maintained an indus- trial and commercial system that is founded in wrong and builded in iniquity and has issued in organized robbery. Now with the adoption of our plan, for the first time in human history, we shall have an industrial and commercial system founded in exact and even- handed justice with co-operation between man and man. The whole element of individual and organized plunder shall be swept out of it, root and branch, and the rights and responsibility of every man shall be fully recognized and protected. And when each man shall become a capitalist, by law, in our industrial system, then, all poverty, with all its heart-aches, its repression of the mind, its bitter trials and temptations shall be swept away forever. And the promise of the word of God shall be fulfilled. And under our plan, riches will cease to exercise that baleful and degenerating influence which marks so generally the possession of wealth to-day. Wealth that is gotten by honest toil and is gotten co-operatively with a real respect for others' rights, is rarely abused by its possessor. On the contrary, knowing the value of wealth and its beneficent uses, men will employ it as the agent of good to the whole people. It is wealth gotten by plunder, and, especially, wealth inherited by those who never know the burden of toil that causes harm. It is those who are reared in luxury and have every want supplied, that are ruined by wealth and grow up effeminate, selfish, immoral and degenerate. Now the introduction of our plan, will deprive wealth of this baleful influence. For under the operation of I EFFICIENCY ATTAINED. 161 the new order, every man will bear the yoke of toil and severe endeavor while young, and thereby learn to appreciate the cost and the value of wealth and so learn to make a right use of it when it is attained. For under the operation of our plan, society will no longer be divided into a small parasitic class, on the one hand, and on the other, a large working class who know nothing but toil and poverty from the cradle to the grave. But every one will work while young and so learn to appreciate the value of wealth and to use and not abuse it, when, in middle life, wealth is attained. Thus under the operation of the new plan, wealth will be possessed by all and it will become the means of immeasurable good and an unmixed blessing to all the race. The new order will work for the constant, immeas- urable, elevation of individual character. No one can deny that many among the working people to-day are dull, spiritless, and unaspiring. But this is the result largely of ages of oppression and poverty and their deprivation of all part in the indi- vidual and social responsibilities of life. The masses have not had that training, therefore, which the bear- ing of large responsibility brings. Now the adoption of our scheme of reform, will change all this. The chief objection which some make to our plan is the fact that it will throw upon the people individually the respon- sibility of subscribing each his quota of the required capital and of bearing his share of the burdens of the business. But it is in this very element that the chief virtue of our plan lies not only in stimulating produc- 162 EFFECTIVE INDUSTRIAL REFORM. tion but in elevating the character of all working men. Why is the business man to-day so alert, and far-seeing, why is he so interested in legislation, why is he so responsible and capable? It is because the success of his business demands these qualities. It is because his personal interests are vitally connected with legis- lation and all social conditions. Now when we make every man a capitalist, when we throw upon every citizen the responsibility of subscribing his quota of the world's capital, when his capital and dividends are at stake, and his prosperity is dependent upon correct legislation and all other social conditions, we shall make the working man over new. We shall develop in him an alertness of mind, an active looking ahead, an interest in all legislation and social conditions that will be simply incalculable in its effects upon the soul. And the evil influence of the present system through immigration, by calling in the people of the lowest and most degraded type of character, because they will work cheap and underbid all the better classes, its effect in causing race-suicide among all the better classes (See Chapter IV), shall be changed. For when we once begin to fix wages, not according to the ability of men to work cheap and to degrade themselves to the level of the brute, but according to the principle of justice, it will no longer be possible for the low and unaspiring to underbid and drive out the intelligent and aspiring classes. And competition will no longer be a struggle in brutality but in skill and true elevation of character. H O O + a s K 9 n to a g B S3 E i g I? g -^ O oo EFFICIENCY ATTAINED. 163 And the adoption of our plan will destroy the bale- ful influence which business life now has upon the capitalist. Our present system, based as it is upon the principle of organized plunder, compelling men to resort to bribery and deceit and cunning, tends to destroy, in the princes of high finance, all patriotism, and true public spirit; it tends to make them in busi- ness mercilessly cruel, and violaters of all law. These charges are not too strong. Now the adoption of our scheme of reform, by eliminating forever from our in- dustrial system the element of plunder, and introducing, and making supreme, the law of organized comradship and co-operation, will completely reverse this evil influence and make for a true and living patriotism, for sterling uprightness of character and conduct, for re- spect for law, and every human right, and it will unite all men in a true comrade-ship and sympathetic and vital brotherhood that will be divine. And every one can see that the adoption of our plan will transform, in time, the homes of the poor. The slums will disappear. Our cities and villages will be immeasurably elevated in comfort, in sanitation, and in artistic character. And that poverty and ignorance and that constant toil in the homes of the poor, which now place such an obstacle in the way of the best effects of education, shall be removed. Mothers, no longer compelled to work in the factory, nor to take in work, to make a living, will give their time and strength to the care of their children and the neglected child, the street gang, and all its evil consequences will be a thing of the past. 164 EFFECTIVE INDUSTRIAL REFORM. Those evil influences in the political world, resulting from the existence of a vast ignorant irresponsible class at the bottom and a predaceous corporation at the top, will be entirely eliminated and our political life shall be purified. Finally, the establishment of the new order will exert a vast direct and indirect influence upon religion and the Church. In the first place, it will bring true religion and our industrial system, for the first time in human history, into essential and complete harmony. To-day they are directly opposed to each other, and no man can be loyal to the one and obey the behests of the other. True religion says "love your neighbor as yourself." And this is to be not a mere empty emo- tion but a law lying at the very basis of institutions and laws. But the present industrial system says, "Do your neighbor while he sleeps." "Mount the steeps of wealth by trampling on the necks of those below you." And this law is no empty thing. It is a stern command which every man must obey if he would succeed. Now, the introduction of our plan will introduce into the Industrial realm that sovereign law, that grand principle, which lies at the root of true religion, the sovereign law of love. And the adoption of our plan will tend indirectly to purify religion of its many imperfections of its spiritual despotism which still prevails, its sectarian division, and its emphasis of non-essentials. And it will tend to unite the whole race in one living Church, whose creed shall be Truth, Justice, and Mercy, with EFFICIENCY ATTAINED. 165 faith in God, and whose aim shall be to unite the whole race in One great family, bound together by the law of love and co-operation and establish on earth a uni- versal peace. 3. In conclusion, I would say that it can be shown that this plan of economic reform, which we shall apply to the Industrial world, can be applied, to advantage, step by step to every other realm until the whole plant of civilization is brought under the management of the same efficient Business Corporation directed by the sov- ereign will of the people. That this plan could be thus applied to every other realm is seen at a glance. For when once the people shall have organized themselves, by law, into a Business Corporation to own and manage their industrial affairs, they could easily vote, to assume ownership and con- trol over Medicine and Sanitation, by voting to build, own, and equip their own hospitals and provide for them- selves their own corps of physicians and nurses. These should be placed on a salary all fees going into the public treasury and they should constitute an expert Board of Health for the community. The funds needed to build and equip these public hospitals could be secured by appropriations, or they could be incorporated with the funds needed to capital- ize the industrial world and so raised by subscription. The people could vote to bring the legal profession under the same plan, converting the lawyer into a public official. He would then be placed on a salary; and his function should be, not to prove this side or that, in 166 EFFECTIVE INDUSTRIAL REFORM. any given case, to be true, but to find and so present the evidence, on both sides, that the Jury could render a just judgment. All fees should go into the public treasury. The people could vote to apply the same plan to the public school and to government by capitalizing them, if desirable, and fixing all salaries, by the same method as in the industrial world. And here I desire to say, in parenthesis, that politics and statesmanship should be elevated into a profession. Schools should be created fitting men for such a profes- sion and no man should be permitted to be a candidate for any high office in city, state, or nation, unless he could show a certificate of a three or four years' course of study in these schools and had passed a satisfactory examination at the close. We require an eductional qualification of all candidates for teaching, medicine, law and preaching. Much more should such a quali- fication be required of every candidate for city council, state or federal legislature and every other important government office. In no other way can we make government truly representative and efficient. Finally, when the moral and religious ideas and aims of the people are sufficiently elevated and unified to enable the people to organize themselves by law into one church Universal, to teach, not this religion nor that, but Righteousness and the fear of God, even the Church could be brought under the same great plan. This would mean that the churches should be capital- ized and all salaries paid, by the same method as in the industrial world. But I cannot enlarge on this now. EFFICIENCY ATTAINED. 167 If my plan were thus applied to the whole plant of Civ- ilization, it would result in immeasurable good for the race. For, first, it would abolish all despotic power from the earth, make the people supreme, and enthrone democracy in everything. It would abolish taxation, and instead, it would cause the whole plant of Civilization to be capitalized by calling upon the people individually to subscribe and invest each his quota of the required amount. And on the capital, thus subscribed, we would pay dividends to the full earning capacity of the plant of Civilization. It would make all workers of hand and brain in every vocation, both employers and employees of the same public Corporation. It would place all on a salary fixed by the public commissioners on wages and salaries. Hence, all gouging on the one hand, and all underpaying on the other, would cease; and all men in every vocation would enjoy equal opportunity to ac- quire wealth. Finally, it can be shown that this universal appli- cation of my plan would bring efficiency into every realm to which it was applied into Medicine and Sanita- tion, Education, Government and Morality and Religion. But I cannot discuss these themes in this book. Suffice it to say that the fact that this plan can be applied to advantage to the whole plant of civilization, the fact that it will bring efficient Democracy, the grand goal of human progress, into every social function, is an additional reason why we should introduce it now into the industrial world and make it a success there. T3 g > fl -fj ell 4-t "*"* ^ C X o | | | "Eo O3 B B "E-Ss 03 ^ CQ ll 03 "^ || ih II o -v > a Soo *" <*H >> O - O i ^O Part IV. Concluding Topics. CHAPTER XII. THE TRUE SOCIALISTIC PROGRAM. One of the marvelous and yet least understood movements of modern times is socialism. Although the socialistic party is still small in the United States, yet the principles of socialism are spreading everywhere and are destined to conquer the world. In the study of socialism, we must distinguish be- tween the principles for which it stands and those crude notions and often violent measures which ac- company it. Already the crudities which attended its birth are falling away and socialism is beginning to appear before the world in grand simplicity as one of the strongest and best movements for the amelioration of human wrongs and the development of human society that has ever appeared in human history. It seems to be the final effort which the race is to make to over- throw every wrong and to establish universal justice and good will on earth. Viewed as a reform movement, socialism means organized co-operation on the part of the people, in constructing a just society on earth and all that that im- plies. Its aim is identical with that of the Mosaic and Christian faith, only it operates from the standpoint of reason, they from the standpoint of religion, if it is proper to make such a distinction. Viewed as a regulative and constructive law operat- ing within society, socialism means organized co-opera- THE TRUE SOCIALISTIC PROGRAM. 169 tion on the part of the people directed by their own sovereign will, in maintaining justice between man and man, in promoting the welfare of all, and performing our common functions. It believes that if men would unite and work together by some adequate method, for the common good, there is scarcely any limit to be set to human development and happiness. Socialism, therefore, embraces two grand principles, First, a belief in justice and every other good thing, prosperity, wealth, education, refinement and religion, for the whole people. And, second, the belief that these things can be attained only through a wise and efficient Democracy. These principles are not new. Socialism differs from all movements that have gone before, in the intensity with which it has grasped these principles, the importance which it attaches to them, and the abandon with which it has staked all on their accept- ance. Socialism believes that justice for the whole people is dictated not only by the principles of moral- ity but the highest self-interest. It believes with ter- rible intensity, that there can be no permanently safe and prosperous condition of society except as it is founded on the law of justice, education and equal opportunity for the whole people. It believes that for any society to build on any other principle is to build on sand and such a society must come quickly to ruin. It believes, in the second place, that the only instrument adequate to attain these ends is a thorough-going Democracy, or the organized co-operation of the whole people direct- ed by their own sovereign will. 170 EFFECTIVE INDUSTRIAL REFORM. It is equally opposed to anarchism, on the one hand, and to despotism, on the other. It believes that the only safe guardians of the people's rights are the people themselves, but the people organized by law into a single co-operative body. It believes that whenever any institution or social organization makes for injustice, or fails to promote the welfare of the whole people, it is the duty of the people, to introduce such a reform as in their judge- ment will promote justice and the happiness of all. Socialism believes that to-day our industrial system in these United States does not make for justice nor for the good of the whole people; and, therefore, that it must be transformed into something that will more perfectly work for these ends. Standing for these principles, socialism is, indeed, the greatest and best movement in modern times. It seems to have come to call Christianity back to its original and divinely given aim. And Christianity shall stand or fall according as it does or does not ally itself with socialism. Socialism is no new thing in the world, and especially in the United States, though it has for the first time come to self-consciousness. Socialism, as a matter of fact, is a principle lying at the foundation of every good thing in American civilization. The American government, based upon the affirma- tion of the equal rights of man, maintained by organ- ized Union and co-operation, directed by the sovereign will of the whole people, is political socialism of the CHARLES EDWARD RUSSELL A widely-read Magazine writer. Author of "The Greatest Trust in the World," and other books. An active socialist. ROBERT HUNTER. Lecturer and Writer. Author of two important books- " Poverty" and "Socialists at Work." An active socialist. THE TRUE SOCIALISTIC PROGRAM. 171 purest and simplest kind. And our Educational sys- tem, recognizing the right of every child to an adequate education, maintained by the co-operation of all the peo- ple, directed by the sovereign will of the people, is the very embodiment of organized socialism in the realm of Education. And our Mailing system is pure social- ism in its foundation. And now socialism is seeking with indomitable energy to introduce its principles into the industrial and commercial world. When it shall have accom- plished this, it believes that the millenium will be nigh and the sorrows of the people, arising from oppression and wrong will be nearly over. But socialism, here faces a great problem, which I do not think it has yet solved: It is this. What is the method by which the whole industrial realm can be properly reconstructed and socialized? What is the true socialistic program or method in the Industrial world ? It is this problem which I shall now discuss. 2. When industrial socialism began, it sought by mere voluntary co-operation by the formation of co-opera- tive stores, factories and so forth, to attain the end which it desired. But after repeated trials, great dis- appointments and heartaches, it found that such methods were impracticable and it wisely discarded them. Then came the great book of Karl Marx Das Kapital which has become the Bible of the European socialist. He showed that in order to cure present wrongs the people must operate through the govern- 172 EFFECTIVE INDUSTRIAL REFORM. ment and organize themselves by law, into a great industrial commonwealth. His principles were rapidly accepted by nearly the whole socialistic party. And a certain method was developed by his disciples based upon the principles which he taught, which may be appropriately called, the method of Marxian Socialism. But is this method correct? Does it discover the key by which to organize the people into a great indus- trial commonwealth under forms of law? Does it present the true socialistic program? Now while Marx made a great advance upon his predecessors and was right in affirming that public ownership, in order to be successful, must embrace all the people and must be introduced and maintained by law, nevertheless the details of the method which his followers have advocated, are crude and imprac- ticable and can never obtain the general assent of the people. Indeed it is the crudity of these methods iden- tified with Socialism that stands to-day as the chief obstacle in the way of the complete triumph of the socialistic movement. Let us then briefly unfold the essential features of the Marxian method of industrial reform. Marx diagnosed the cause of present industrial wrongs as lying in the use of capital, or, in "capitalism." For the fundamental doctrine of Marx was that capital was essentially and necessarily predaceous. It was always a device used for spoliation. Hence all inter- est, profits, rents, and dividends were but the plunder which capital exacted from labor. Marxianism also affirmed that the wage system was the daughter of THE TRUE SOCIALISTIC PROGRAM. 173 capital and was used also as the instrument of spolia- tion; for it was employed by capital to enable it to pay labor barely sufficient to keep the laborer from starvation and then appropriate the surplus in the form of dividends or rents or profit. Hence, Marx affirmed that the only cure of the evils of the present system lay in the abolition of all use of capital, or, the principle of "capitalism," with its daughter the wage system, from the industrial world. And he constantly endeavored to construct a system from which the use of capital would disappear, root and branch. His system, in its purity, embraced the following factors. First, the collective ownership of all the agents of production, or, the public ownership of each industrial and commercial plant. This was the fundamental factor in his scheme. Then, to escape all exploitation in the matter of wages, he adopted the plan of paying labor in time-checks, common labor being the unit and skilled labor being paid in multiples of common labor. His next feature was the payment of all commodities in these time-checks, the price of each thing being fixed by the amount of labor used in its production. Thus he would escape all exploita- tion and plunder in the matter of prices. Finally, all use of capital in the future was to be abolished. But how was this to be achieved? How, without the use of capital, was the public to come into possession of all the agents of production now owned by individuals, and how was it to make repairs and engage in new enterprises in the future? The reply of Marxianism to this inquiry was very simple. Since all private owner- 174 EFFECTIVE INDUSTRIAL REFORM. ship of the instruments of production has been the product of plunder, the people have the right simply to take possession of them without paying anything for them, just as a slave has the right to acquire his freedom without paying his master any price for his liberty. When repairs had to be made or new enter- prises inaugurated in the future, men would be set to work to make them, and they would be paid for their services in time-checks to be exchanged for the com- modities of the country. Thus all use of capital would be abolished and, with it, all injustice and wrong. The laborer, the sole producer, would receive for the first time in history the full product of his toil. Such are the fundamental principles of Marxianism, which its adherents declare to be pure socialism. They call the present industrial system a "capitalistic" system, and say that it must ultimately be displaced by Marxianism or socialism. The followers of Marx have seen that these prin- ciples could not be fully introduced at once if at all. There has been also an unconscious modification of some of these factors. And the following may be given as expressing the present concrete program which Marxianism advocates. First, the public ownership of the plant, just as I have maintained in this book. Second, the capital to be raised where necessary out of the wealth of the country or by taking it out of the business as we go along. Wise tactics may dictate the paying of the present owners for their "property," when we acquire public ownership of it. But the THE TRUE SOCIALISTIC PROGRAM. 175 money used for this purpose shall be raised by a tax on the wealth of country. In no case shall any man be allowed to subscribe it or in any wise earn a dividend or interest or rents or profit out of the public industries. Indeed, should Marxianism be fully adopted, no man would be able anywhere to invest his savings for the earning of dividends or profit of any kind. All men would be reduced to the level of capitalless working men. Let Marxianism be once fully introduced and immediately every man would be compelled to with- draw all his savings from the savings bank and ever other place where he had invested them. He could lay them by in his stocking, if he chose, but he could never invest them for the earning of dividends. It follows, therefore, that in the Marxian system the whole earnings of our industrial activities will be paid, (after taking out the necessary reserve fund for repairs and new enterprises), in the form of wages to labor. All distinction between the wages earned by labor and the dividends earned by capital will disappear. The whole income coming to each man will come in the form of wages, and of wages alone. It follows that the moment that a man at any time quits work his whole income will cease. No matter how hard a man may have worked through all his earlier years, the moment he stops work his income ceases. It will not be possible for a man, no matter how hard he may work, to save and invest his savings for a future income. Third. Marxianism has seen with others that in abolishing all possibility of earning an income except 176 EFFECTIVE INDUSTRIAL REFORM. as the immediate fruit of work, it has destroyed the possibility of any man's making any provision for extended sickness, or severe accident, or old age, say nothing about leisure in after life. How, then, has Marxianism proposed to provide for these contingences? Marxianism has always been somewhat vague and uncertain in speaking on these points. But two methods have been proposed ; the first is that of pensions for old age; the other is that of compulsory insurance for sickness and accidents, and compulsory annuities for old age. The old age pension recently voted by parliament in England is the fruit of this Marxian prin- ciple. It is a Marxian measure. Such are the essential principles of Marxian social- ism and such are the essential features of its program of industrial and commercial reform. It is easy to grasp its grand outlines and see what it is like. Marxianism is identical in structure with govern- ment ownership as exemplified in the United States Mail. For the United States mail is pure government ownership, and it performs, economically viewed, two functions and two only. First, it provides work for the people at a fair or just wage. At least it can do this. Secondly, it supplies the people with a needed utility or service, at a fair price. But this is all that it does. It does not provide the people with a place where they can invest their savings and earn a dividend. It does not aim to per- form this function. Hence, the capital used in the United States mail is not raised by the individual THE TRUE SOCIALISTIC PROGRAM. 177 subscriptions of the people. It is raised, by taking it indirectly from the people, by taking it, in short, "out of the business." Thus all investment of savings in the United States mail for the earning of dividends is entirely cut off. Now Marxianism would organize our whole indus- trial and commercial activities after the same plan. All would be turned over to the government a special autonomous department would be created for the pur- pose. And all our industries Manufacturing, Agricu- ture, Transportation, Telegraphs and Telephones, would be placed upon the same basis as the United States Mail. The capital would be raised, in every case, by "taking it out of the business." And while they would supply all with work at a just wage, and provide all with all needed utilities at a just price, yet all possibility of investing one's savings anywhere for the earning of dividends and, therefore, all acquisition of individual wealth, would be forever cut off. And it will cut off this possibility, deliberately, on the ground that all investment of savings for dividends is wrong. 3. If now we have a just conception of the Marxian plan of reform, we are prepared to ask, Will it work? Will it meet all our economic needs? Is it the true Socialistic program? Karl Marx was right in his fundamental affirmation, that all our industrial and commercial activities must be owned and controlled by the sovereign will of the people, that the mere voluntary co-operative efforts of the earlier socialism were inadequate. He was right in 178 EFFECTIVE INDUSTRIAL REFORM. saying that the great instruments of production, the great industrial plants, must be owned collectively by the whole people. He was right in his condemnation of the method of determining wages and salaries by competition. He was right in saying that every man should receive the full product of his labor, and that, therefore, the wages, so-called, of each man should be fixed rationally according to the principle of justice. In all these affirmations he laid the foundations of a true Socialism. But his system in other respects was marked by grave errors. And these must be corrected before we can have the true Socialistic method. In the first place, Marx was fundamentally wrong in his conception of the nature and use of Capital. And this led him into error in regard to dividends, profits and rents. Karl Marx viewed Capital as essentially predatory. It was to him the instrument used only to exploit labor. Hence, his constant aim was to devise a system by which as he hoped, but vainly hoped, as we shall see, to abolish all use of capital or "capitalism" as it was called from the Industrial world. But Capital or "Capitalism" is not a device always used to exploit labor. Neither is it possible to abolish it. Marx's system creates and employs capital as much as any other system. For Capital is nothing more than a utility saved to aid labor in the production of other utilities in vaster quantities and with less effort than is possible by the use of labor alone. And the use of capital lies at the very basis of all civilization and human progress. THE TRUE SOCIALISTIC PROGRAM. 179 The first man on earth who, instead of eating all the wheat he had gathered in its wild state, saved a portion of it and sowed it in the earth to produce a new crop for him, was a capitalist. The grain which he saved and sowed in the earth and thereby made it work for him was his capital. The primitive man who, instead of killing and eating the cow which he had captured, corralled her and made her work for him by producing milk and butter and calves for his use, was a capitalist. The cow which he saved and used was his capital; it was the product of past toil, and it was saved for the purposes of gain. The man who first cut down a tree and hollowed it out into a boat and flung up a sail against a mast making the winds work for him, was a capitalist. The labor put into his boat and sail was his capital, and he was using it for future profit. This power to acquire capital and invest it or use it for future gain is one of the fundamental rights of man and lies at the very foundation of civilization. A man has no right to enslave his fellow men and force them to work for him without adequate compensation. But he has the right to master the forces of nature to their fullest extent, and make them work for him to their full capacity. It is entirely incorrect, there- fore, to say that Capitalism is in itself wrong. Capi- talism, or the use of capital, like civil government, may be right or wrong according to the use that is made of it. Civil government may be made the instrument of a grinding tyranny, and it may be made the instrument by which a free people can defend their liberties pro- 180 EFFECTIVE INDUSTRIAL REFORM. mote the general welfare and preserve peace. So also the use of capital, when owned and exploited by a few irresponsible despots, may be used as the agent of a grinding despotism, but it can also be used, when owned by all the people, as the agent for the cure of poverty and for the acquisition of individual wealth with justice toward all. What we want, therefore, in order to reform present abuses is not the abolition of capital but such a collective control of our vast utilities as to bring justice to all. . But if it is not wrong to save and use capital for the production of wealth, it is not, therefore, wrong to earn a just interest or divi- dend on one's capital. Neither is it wrong to earn a just rent on the use of one's house or land. What is wrong in this matter is to get control of some one else's capital and rob him of his dividends; or to get posses- sion of some one else's house and rob him of his rent. Or to get such a grip upon the poor as to charge an un- just interest or an unjust rent. 4. Furthermore, not to pay dividends is robbery. To make this point perfectly plain, let us make use of an illustration. Let us suppose that Mr. Brown and Mr. Smith go into business together that of raising beeves. Mr. Brown and Mr. Smith represent the public. And let us suppose that by faithful labor they can raise and add to their stock each year, twelve beeves per man. Then it is evident that one beef per month is exactly what each man's labor is worth. And if each man is to receive "the full product of his labor," then each REV. JOHN D. LONG. Pastor of Parkside Church, Presbyterian, Brooklyn, New York. Active leader in the Christian Socialist Fellowship Movement. MR. GEO. H. STROBELL. Elder in the Presbyterian Church. Business man of Newark, N. J. Author of An Address "A Christian View of Socialism," and active in the Christian So- cialist Fellowship Movement. THE TRUE SOCIALISTIC PROGRAM. 181 man's wages should be just one beef per month. Let us suppose that this wage is settled upon and they go to work on that basis. It is evident that each man should receive just one beef for every month of work. And if he works twelve months in the year, he should receive twelve beeves for his years work. But let us now make another supposition. Let us suppose that it requires only ten beeves to support a man and. his family each year. Then it is evident that each man by working a whole year can earn two beeves more than he consumes, and these can, if he so chooses, be saved up for a rainy day or old age. Let us suppose that Mr. Brown does this. He works a whole year but consumes only ten beeves; and at the end of the year he says, "I will not take out my two remaining beeves now, but will let them remain in the herd until a later date." Let us suppose that he does this for twenty years, working twelve months each year but taking out of the stock only ten beeves, or the pay for the ten month's labor, how much then does the stock concern, the public, owe him at the end of the twenty years? At the end of the twenty years the Public owes him, of course, (1) the forty head of cattle which he has not taken out ;. but it owes him also (2) all the natural increase on these cattle over and above the cost of caring for them. Now after paying for all the direct and indirect labor of caring for these cattle, at the rate of one beef per month to each man so employed, which is, we have agreed, a full wage for labor, the natural 182 EFFECTIVE INDUSTRIAL REFORM. increase on these cattle will be about that of doubling themselves every four or five years. At this rate the natural increase on these head of cattle which he has saved, year by year, will amount at the end of the twenty years, to say 300 heads, worth, say $12,000. I hold, therefore, that what the stock-corporation or the Public owes this man at the end of the twenty years, is not only the forty heads which he has saved from his wages, year by year, but these 30J3 heads besides, or, the natural increase on his savings, making all together 340 heads. And yet Marxian Socialism would pay the man only his forty heads, leaving a surplus to the public of 300 heads, which are really his, indeed as truly his as the 40 heads which have been given to him. Marx- ian Socialism therefore instead of doing as it aims and claims to do, namely to pay each man the full propor- tion of his earnings, would in reality be robbing him of 300 heads of cattle or $12,000. And this would be as real a robbery as is now committed by the plutocrat against labor. But Marxianism, perhaps, replies, that this surplus or increase would be paid back to each man in the form of an increase of wages or a pension. But this would not save the injustice of the transaction, unless every man worked equal time and with equal efficiency with every other. For let us assume that Mr. Brown labors during the full twelve months each year for the twenty years; but let us suppose that Mr. Smith works only ten months and therefore consumes all that he earns as he THE TRUE SOCIALISTIC PROGRAM. 183 goes along, what will be the result? The result will be that the only surplus saved at the end of the twenty years will be the surplus resulting from Mr. Brown's savings or the 300 head of cattle arising from his in- crease. But Marxianism will divide this sum year by year or at the end of the 20 years equally between Mr. Brown and Mr. Smith. Hence Mr. Brown will receive only 150 plus 40 heads at the end of the twenty years, while Mr. Smith will receive 150 heads alone, or nearly as many as Mr. Brown. In other words while Mr. Smith has never worked more than ten months in the year and has consumed all that he has earned as he went along, yet at the end of the twenty years he re- ceives one-half or $6,000 of Mr. Brown's savings. What is this but robbery? And whatever method or com- bination we may pursue injustice will result. In truth, there are three economic factors entering into every man's economic relations. They are, First, The amount of work which he performs for the public. Second, the amount of commodities which he consumes. And third, the amount of capital which he invests in his country's industries. These three factors enter into every man's indus- trial-economic life. Now the only way to insure justice to each man is by keeping a rigidly separate account of each- -of these factors that is, a rigidly separate account of each man's labor, a rigidly separate account of the amount that he consumes, and a rigidly separate account of the amount of the capital which he invests. And then pay each man in full for all the work that he per- 184 EFFECTIVE INDUSTRIAL REFORM. forms, charge him justly for all that he consumes, and pay him just and equal dividends on all the capital that he has invested. Now this is what we shall do in our plan. We shall in the first place keep a strict and separate account of the amount and the value of each man's work and pay him a full compensation for all that he earns and no more. Second, we shall keep an account of all that he consumes and have him pay for all that he consumes and no more. And, lastly, we shall keep a strict ac- count of all that he invests and pay him dividends equal in percentage to that paid to every other man ; indeed we shall pay to him all that he and his fellow-citizens can make our common industries earn. We shall thus bring justice into our whole industrial life and make our industrial organization the instrument of the in- dividual acquisition of wealth. But Marxianism refuses to do this. It refuses to recognize in any way the existence of capital. It recognizes the existence of labor alone and demands that all the product of labor and capital be combined and paid to labor alone in the form of wages. But in doing this, whatever be the method pursued, it will result only in injustice and failure in meeting the needs of man. 5. Again Marxianism is wrong in saying that Capital- ism, or "the individual investment of savings for pri- vate gain," is the cause of present evils. Marxianism seeks to justify itself in depriving all of the right to invest savings for the earning of dividends, THE TRUE SOCIALISTIC PROGRAM. 185 by saying that it is this individual investment of sav- ings for gain that is the cause of all present evils. But this I am convinced is an entirely incorrect diagnosis of the case. The cause of present evils lies not in the fact that individuals invest their savings for gain, but in the fact that there is no general co-operation in the management of the utilities in which savings are in- vested. One man or one set of men invest in one thing and another man or set of men invest in another thing, and still another man or set of men invest in still some- thing else and then each man or set of men strives to beat all the rest. The result is that society is plunged into a state of industrial war and, as a result of this, the few, the strong, attain to positions of influence and power, and oppress and rob the rest. And to cure this evil it is not necessary to deprive the individual of the right to save and invest for gain; but we must combine all the people into one vast cor- poration in such a way as to destroy this antagonism of individual interests, take away the unjust power of the few over the many, and enable all the people to work together in one single producing firm in maintaining jus- tice and promtoing the good of all. This is Socialism. But can this be achieved without annihilating the investment of individual savings for individual gain? It certainly can as we have seen. It is done every day all around us on a small scale. Every corporation where a number of men are combined in business is an example of it. Here is a vast shoe concern in which twenty men are combined in business. Now there we have an example of a group of men pooling their com- EFFECTIVE INDUSTRIAL REFORM. mon interests, working together for their common pro- fit. And yet each man retains the power of individual investment of savings for legitimate gain. For each man has his individual capital invested in the com- mon business; and on his individual capital he receives his proper dividends. But if a small group of men can thus combine and co-operate to their common advantage and yet not destroy the individual power of each to invest for gain, why cannot all the people thus combine in one vast business concern or corporation for the purpose of efficiency in production and justice in the distribution of wealth, and yet allow each man to retain his individ- ual capital, invest it in the common business and reap his proportionate share of the dividends? They cer- tainly can, as we have shown. In order, therefore, to achieve public ownership and give all the people the supreme control of their whole industrial life, it is not necessary, at all, to annihilate the power of the individual to invest his savings for the purpose of gain. For as each member of the private corporation invests his capital for gain, so all the citi- zens in the public corporation can invest their savings in this public concern, as we have shown, for individual gain. Indeed this is our plan. Marxianism, therefore, in depriving the individual of the right of investing his savings for dividends, does so on no adequate grounds, indeed on no grounds at all. In doing so, therefore, it commits a great wrong. The Marxianism method of curing present evils is like the conduct of the mother, who because her boys THE TRUE SOCIALISTIC PROGRAM. 187 quarrel over a cake which she has given them, says "Since you quarrel over this cake I will not allow you to have any of it at all," and straightway de- prives them of the cake. What the world wants is not to be deprived of the power of individual investment for purposes of gain, but to have the power of each amply protected so that each shall have equal power to invest with every one else and shall win his full share of the dividends earned in our common industrial life. But this is not achieved by Marxianism. Marxianism, therefore, does not offer the true solution of present evils. 6. In the next place, the Marxian method will greatly weaken, if not destroy, the essential factor of individ- ualized responsibility and individual self-help which we have declared to be so important to any successful Industrial system. For Marxianism by annihilating all individual ownership of the capital and all earning of dividends, reduces all men to the condition of capital- less working men, like those irresponsible members at the bottom of society to-day. It thereby cuts the chief nerve of individual responsibility and destroys the chief stimulous to individual energy and enterprise. It is a fact that the chief factor in the business world creating a sense of responsibility and carefulness in voting, is capital invested and dividends at stake. Let a man have the savings of years invested in a busi- ness and he is going to look after that business. If he has any power of voting in connection with it, he will be careful how he votes. But Marxianism annihilates 188 EFFECTIVE INDUSTRIAL REFORM. this whole factor. It calls upon no one to subscribe a cent towards the capital, and allows no one to earn a cent of dividends from the business. Men will, there- fore, feel little more interest or responsibility in the industrial affairs of the community, than they feel today in our mailing system, and that is practically nothing. This evil will be greatly emphasized by the pension system which Marxianism advocates. It will cut the knot of individual responsibility for the future. For let us look at the system for a little. Marxianism, hav- ing rigidly abolished all investment of private capital and all earning of dividends, and having thereby ren- dered it impossible for any one to make any provision for future needs or for old age, has substituted in their place the policy of pensioning everybody after a cer- tain age has been reached or after a certain term of labor. And in order to escape the interminable frauds which have always accompanied the pension system it will rigidly pay to everyone the same fixed amount, as say $500 a year. This pension will be paid in time- checks. Now let us pause and think for a moment what will be the inevitable effect of such a system? It will no doubt prevent any man's becoming a millionaire by robbing someone else? But what will be its effect upon labor? What upon the people generally? Here are a number of young men just coming of age, active, aspiring and eager to win for themselves a competence for the future? But as they eagerly seek to realize their aim, Marxianism comes to them THE TRUE SOCIALISTIC PROGRAM. 189 and says "Stop. We do not allow you to engage in a single enterprize for your individual gain or for the gain of anybody else. The Government has already provided for your future. You are to work until you reach the age of forty-five. When you arrive at that age the government will pay you a pension of $500 a year ; or rather it will give you time-checks representing 2000 hours of work per year. And this is every cent that you will be allowed to receive. We do not allow you to do anything whatsoever to increase or diminish this sum. To attempt to do so will be a misdemeanor to be punished as crime. So beware!" What system could be better calculated to destroy all individual en- terprise and ambition than this? And what will be the effect of this pension system on the indolent and inefficient? Here are a company of such just coming of age and reluctantly contemplat- ing the years of labor before them. But soon a com- forting thought occurs to them. "All we have to do," say they "is to manage somehow to work out our twenty years, no matter how. It is of no concern of ours whether we earn our salt or not. Let us only succeed in getting in our time, and then at the end of twenty years, we become the wards of the government, able to shuffle it with the best of them. And then there will be no more thought and no more care. All we will have to do will be to draw our pensions and enjoy life with no more responsibility than the birds." Was there ever a system invented better fitted to encourage deliberate indolence, shirking and ineffi- ciency than this ? 190 EFFECTIVE INDUSTRIAL REFORM. But some one asks "Will not the fact that the value of future pensions will be somewhat affected by the quality of labor now, stimulate men to earnest toil? This will no doubt stimulate the more industrious and far-sighted? But it will result in great injustice. For suppose that the industrious few do work hard and thereby cause an increase in production who will bene- fit by the increase? The indolent will benefit by it as fully as those whose labor has produced it. And the indolent and inefficient can cunningly continue in their idleness, knowing that the active and enterprising will work rather than starve, and that they the indolent and inefficient can therefore, live upon the toil of the active and industrious. For every product of the toil of the few must be evenly shared with the idle and shiftless classes. 7. In conclusion, I would say that Marxianism, is de- fective in that it fails to meet, and erroneously refuses to meet-, the crowning economic need of man. It is, therefore, unattractive, and cannot obtain acceptance from more than a minority of the race. The crowning economic need of man is the oppor- tunity to acquire Individual wealth and earn dividends. While we may have co-operation, socialization, in the production of wealth, yet we must have individualiza- tion in its distribution. Every economic system, therefore, that would meet the economic needs, and observe the economic rights, of man, must grant to each not only the right to work and earn just wages and the power to buy all needed REV. ALEXANDER F. IRVINE. Associate pastor of the Church of the Ascension, New York (Episcopal). Eloquent preacher and lecturer. Active Socialist. REV. EDWIN ELLIS CARR. One of the founders and editors of the CHRISTIAN SOCIALIST. THE TRUE SOCIALISTIC PROGRAM. 191 commodities at a fair price, but also the right to invest his increasing savings, earn dividends, and thereby ac- quire an income independent of present toil. And men will never suffer themselves to be deprived of this right as Marxianism proposes. Neither will they suffer their dividends to be put in a common pot to be shared in the form of pensions with the idle and inefficient as Marxianism necessitates. Just as every industrious man demands that a distinct account be kept of his work and that he be paid a just price for all that he performs, as he demands that a distinct account be kept of what he consumes and that he pay a fair price for only what he buys, so he demands that a distinct account be kept of all that he invests and that he be paid a just dividend on all that he has invested. He demands in short that wealth in its distribution be individualized, and that whatever he owns, he shall own distinctly and fully, and that it be entirely his. But Marxianism deprives men of this right. It is therefore, defective and unattractive and cannot obtain the acceptance of more than a small part of the race. 8. What, then, we may ask, is the true socialistic method? The true socialistic method, it seems to me lies in the scheme which I have unfolded in this little book. Industrial socialism means, as I have said, co-opera- tion in the production of wealth, but individualization in its distribution. It must have for its object the same end as the present system, namely, the acquisi- tion of individual wealth. 192 EFFECTIVE INDUSTRIAL REFORM. Now it is a fact that my scheme, and my scheme alone, will embody all these principles and efficiently achieve all these and other necessary ends. It there- fore embodies the true socialistic program. For in the first place, my plan will achieve the ful- lest and most efficient co-operation in the production of wealth. For it will organize the people into one business corporation for the ownership and most effi- cient operation of every utility. And yet secondly, it will secure the most perfect individualization in the distribution of wealth. For it will perform every economic function and serve as the agent of the people in the acquisition of individual wealth. It will make every man wealthy at forty-five. And my plan will secure justice in relation to every function. It will keep a strict account of every man's work and pay him a just wage. It will keep a strict account of all that he consumes and charge him only a just price. And it will keep a strict account of all that he invests, and pay him a just and equal dividend on all his capital invested. And, finally, it will grant to all equal opportunity to work, to buy, to invest one's savings, earn dividends and accumulate wealth. It will achieve the highest efficiency. For it will not weaken but intensify the sense of individual respon- sibility on the part of all. It will stimulate labor to do its best, it will elect the best management. It will so correlate and integrate our industrial and commercial activities that the most efficient production must result. Our plan, farthermore, gets rid of all use of the humiliating and pauperizing pension system as proposed THE TRUE SOCIALISTIC PROGRAM. 193 by Marxianism. Our plan establishes a true organic connection between the capital which each man invests and the income which he shall receive. Instead of having one method of raising the capital and another method of caring for its people in old age, it establishes a vital connection between the two, as it should. It says to each man, You shall subscribe your quota of the needed capital, and then on this capital you will be paid your quota of the dividends earned by the aggre- gate capital of the country. And so you will be able not only to pension yourself but to earn for yourself a competence so that, when middle life is reached, you will be independent of the slavery of toil. And my plan will make and keep the people supreme over their whole industrial and commercial life, so that justice and efficiency shall always prevail. The plan of industrial reconstruction propounded in this book embodies, therefore, the true socialistic program. In the beginning of this Chapter, I said, that Marx's method was an advance upon the older methods of voluntary co-operation. The plan advocated in this book is, I believe, an advance upon the Marxian method and carries Industrial socialism up to its perfect evolu- tion. Marx's plan is a system of communistic capital- ism; and such a system will not work. My plan is a system of democratic capitalism and that will work, and that is true socialism. When our nation began its history its industries were individualistic, and, there- fore, anarchistic and unorganized. Then came, as inevitably must come, Industrial despotism. The next 194 EFFECTIVE INDUSTRIAL REFORM. step is Industrial democracy; and that is my plan. And that is true socialism. In this place I would say, that my criticism of Marx's method springs from no hostility towards Marx- ianism, but from a desire to aid true socialism in its speedy introduction into, and control over, our whole industrial and commercial life. All intelligent and fair- minded men whether they know it or not, are social- ists in spirit. One has but to state the fundamental aims and principles of socialism to a fair-minded man to have them at once accepted. What the world is waiting for is some practicable method by which to embody the principles of a true socialism in industrial action. This book is a contribution to the solution of this problem. In conclusion, I would say that I believe that this new scheme lies in the direction which Industrial re- form is already unconsciously taking. For already the idea of a universal business corpora- tion seems to be groping its way into the world. The American Steel corporation encourages all its workmen to buy stock in the corporation at a certain fair rate as it claims. And not a few corporations seek to per- suade as many people as possible to invest in them, for the very purpose of making them to some extent a public, a universal, institution. I am told that a group of Socialists in Northern Italy have organized themselves into a corporation and built a railroad, a small one indeed, but it is a railroad built by socialists. Are they not, in this very enterprise, indicating the direction which socialism must ultimately take? Let THE TRUE SOCIALISTIC PROGRAM. 195 them advocate organizing the whole people by law into a business corporation for the ownership of all indus- tries and they will be advocating the plan unfolded in this book. And everywhere the deep-seated desire of the people is not to annihilate the great corporations, but to con- trol them and so control them that they shall become the agents of wealth for all the people. Why not then meet this great desire of humanity, by constituting the people themselves, the whole public, into one universal business corporation after our plan? We shall thus bring every one into the single producing firm amply protected, and able thereby to acquire wealth equally with every other man. This will give us organized co- peration, which is true socialism, indeed, a socialism based upon individual responsibility and subordinate to the acquisition of individual wealth. And this plan can be made universal throughout the earth. It can be introduced into France, Italy, Germany, and every other country as well as the United States. But why cannot the United States lead the way by first adopt- ing it here? "Time rewards the pioneer Who clears a higher path for man." Why cannot the people of the United States, be that pioneer in clearing the way for Effective Industrial Re- form? CHAPTER XIII. THE LABOR UNION AND INDUSTRIAL REFORM. The organization of working men in Labor Unions, can scarcely be viewed as a reform movement; for it was not introduced in order to change our present system. Yet it was formed in order to remedy the wrongs of a certain class. And working men certainly view the labor union as a means of obtaining higher wages and shorter hours, in a word, as a method of ob- taining justice for laboring men. It is all-important, therefore, to ask Will the Labor Union bring justice even to the working class? The Labor Union has been and still is of great value viewed as a fighting organization on the side of labor; and it should never be given up nor dissolved so long as present industrial conditions prevail. For, in the first place, the Labor Union has, in many cases, elevated wages and stood as a mighty break- water against the incoming tide of capitalistic aggression. It has shortened hours of labor and introduced bet- ter conditions in factories. It has led to the enactment of laws limiting and abolishing child-labor. It has helped to limit and, to some extent, drive out the sweat-shop. But above all it has kept before the world the in- sufferable evils of our industrial system and educated the vast body of working men into a consciousness of soli- darity that will make reform, if not by the labor union, then by some other method, possible. For not until working men have learned the lesson of united action YARD ENGINE, STOCKBRIDGE, MASS. HOISTING ENGINE Building an elevated crossing over the New Haven railroad. THE LABOR UNION AND INDUSTRIAL REFORM. 197 for the general weal is reform of present evils attainable. For reform, when it comes, will come largely through the support, if not the. leadership, of working men. But while the Labor Union may be good, viewed as a fighting organization for the working class, yet it will achieve no ultimate cure of present wrongs. (1). In the first place, it is a fact patent to all who know the situation, that the Labor Union does not bring just proportional wages even to the different classes of labor. It is a notorious fact that certain close labor organiza- tions are able to demand very high wages; but others that cannot form a strong organization obtain much smaller pay. Compare for example the wages of bricklayers and plumbers with those of machinists and other working men whose skill is as great as that of the bricklayer and plumber. In Boston the wages of bricklayers in 1907 ran from 55 to 65 cents per hour. In New York from 65 to 75 cents per hour. While machinists earned only from 25 to 35 cents per hour. In short, the least examination of the labor schedule will verify the statement that the different wages of different working men are relatively unjust. And this is owing to the fact that certain Unions have the power of forming a closer organization than others. In other words, in our labor unions, it is still largely the law that might makes right; and might, not jxistice is the law determining the relative wages received by different classes of men. And I doubt whether this injustice can ever be changed by the Labor Union alone. (2). But there is another fact, scarcely noted here- tofore, of great significance on which all laboring men 198 EFFECTIVE INDUSTRIAL REFORM. should ponder. It is this. In almost no case does the Labor Union obtain any advantage at the expense of the princes of finance. In almost every case where an apparent advantage is gained, whether it be in the direction of an increase of wages or a shortening of hours, the advantage is obtained only at the cost of some equivalent loss in some other direction, or by increasing the burdens of some other plundered class. For example when the strike occurred for better wages and better hours on the street Railways of Boston in 1900, the strikers had the sympathy of the public and apparently won the victory. And yet the writer has been assured by working men on the road, by motor- men and conductors, that the advantage was only ap- parent. For the capitalists, while seemingly granting an increase of wages, yet by means of certain new rules and arrangements, the rise in wages was in reality nulli- fied and some men really received less than before. There may have been a small portion of the strikers benefited by the strike, but, if so, it was at the expense, not of the capitalist, but of other laboring men whose wages were really lowered thereby. The common way by which the Capitalist prevents all increase in wages from coming out of his own pockets and at the same time punishes the public for its sym- pathy with the strikers is by increasing the price de- manded of the consumer. When the strike occurred in the anthracite region of Pennsylvania in 1902-3, the strikers finally won. But later investigation showed, I am told, that by the increase of price which the owners of the mines put upon Coal, they not only recouped their THE LABER UNION AND INDUSTRIAL REFORM- 199 losses and paid the increase of wages, but realized a handsome profit besides. In other words, the whole advantage gained by the strikers, the cost of the strike, and the handsome profits which came to local dealers, who charged $15 a ton for coal during the strike, all came out of the pockets of the consumer already bur- dened beyond endurance. Many a strike has been followed by the ruin of a business and nearly the ruin of the village in which the plant was placed. But while the laboring man suffers and the town suffers and smaller dealers suffer, yet in almost every case we find the millionaire at the top somehow coming out ahead and going into business somewhere else better off than before. After the expo- sure of the methods of the Beef Trust, the prices of meat bounded up still higher. Thus the trust punished the people for giving heed to Upton Sinclair's revela- tions and recouped their own losses. Finally, we would say that a rise of wages for any one trade is nearly always secured at the expense of a loss of wages or an increase of rents paid by another class- When the Bricklayers and Stone Masons of Boston and vicinity made a demand in May 1906 for an increase of wages on and after June first 1906, demanding that the wages for ordinary work be raised from 55 to 60 cents per hour and that work on sewers be raised from 65 to 70 cents, the large Contractors sent out to Real Estate Owners and Prospective Builders a statement in which they said in substance that while they thought that the demand made by the Unions was excessive, as compared with the wages received by other working 200 EFFECTIVE INDUSTRIAL REFORM. men, nevertheless they were willing to grant the in- crease, providing the Real estate Owners and Prospec- tive Builders were willing to grant it. In other words, the Contractors had no objection to paying the increased demand, providing it did not come out of their own pockets. And what was the reply of the Real Estate Owners and Prospective Builders ? It was substantially the same as that of the Contractors, namely, that they did not object to the increase, providing it could be gotten out of somebody besides themselves, providing, in short, that it could be gotten out of the tenant, who pay rents and out of the poor who are seeking homes for themselves. In other words, the demand of the Bricklayers and Stone Masons was to be granted on condition that the people who pay rents and are bur- dened now beyond endurance could be forced to foot the bill. And it is a fact that rents in the spring of 1907 immediately advanced one and two dollars a month on each apartment. It is a simple fact, that the increase of wages which Bricklayers and Stone Masons now enjoy, have been obtained, not by lessening the plunder of plutocracy, but by causing plutocracy to increase the burdens of the poor. They have unintentionally helped to drive out of business the small contractor, they have increased the burdens of tenants and they have not advanced the cause of justice a single step. They have increased their own pay, indeed, but it is a case of Peter robbing Paul and not of any true reform. They have uninten- tionally become only a new Trust, adding to the burdens already borne by the poor and helpless. THE LABOR UNION AND INDUSTRIAL REFORM. 201 (3). Finally, even though the Labor Union might be able to control wages and so bring justice in that direction yet this we must remember is only one realm in which a despotic Oligarchy rules and despoils the people. How about extortion in the realm of prices? How about the wrongs connected with Investments and Dividends ? Can the Labor Union bring justice in these two realms ? Has it any power over these two realms at all? And whatever victories the Union may win in the realm of wages and hours of work, cannot all such ad- vantage be nullified by increased extortion on the part of Capital in the realm of Prices and Dividends? Owing to these and other considerations, I maintain that the Labor Union can never achieve a final cure for present wrongs, nor remedy the evils of our present industrial system. The Oligarchy now in control has every advantage. Labor has every disadvantage. The only cure for present wrongs lies in the adoption of a new system that will overthrow, root and branch, the power of a despotic Oligarchy and make the people supreme. And such a system is that unfolded in this book. We can never remedy persent wrongs by a perpetual warfare between Capital and Labor. We must have a new system that will unite Capital and Labor in each man and so make all battle between the two unneces- sary and impossible. And this will be achieved by the adoption of our system. While, therefore, I would urge the laboring man to maintain his union, yet I would urge him also to bend every energy to introduce some reform like that advocated in this book. If all working 202 EFFECTIVE INDUSTRIAL REFORM. men would unite and put half the energy which they now put into the Union, into introducing such a reform, our industrial system would be speedily so changed as to make the union no longer needed. For justice would then come to all classes. J 1 _ ' a I CHAPTER XIV. THE AMERICAN FARMER AND . INDUSTRIAL REFORM A few years ago the most independent and on the whole the most prosperous and contented class in America was the American farmer. He was then one of the most respected classes, and one of the supreme factors in the industrial world. He was sovereign over his own business and no one could get a " cinch" upon him. For, in the first place, he could secure plenty of labor to assist him on the farm at a fair price. He could command a good price in the market for his produce. And there was no monopoly on the things he had to buy. If one merchant charged him too high a price he could go to another. And the farmer loved his independence; he loved his business; he thought it the best on earth; and he desired nothing better for his son than to marry some thrifty farmer's daughter and settle on a farm near the old home. The farmer was a shrewd business man and an intense individualist. He had great admiration and reverence for men like A. T. Stewart, who accumulated a fortune of $70,000,000. He believed that such men could do no wrong. Hence, when the warfare between capital and labor began, the American farmer's sym- pathies were wholly with the capitalist and he looked upon the labor union as an attempt on the part of the shiftless and incompetent to increase wages and shorten hours for no just cause. 204 EFFECTIVE INDUSTRIAL REFORM. Hence, when certain theories of public ownership were first promulgated, they met with hostility from the American farmer. The great princes of finance, who had already conceived the idea of enslaving the world, shrewdly counted upon the American farmer to form the great bulwark against- all those forces that would oppose their nefarious schemes. And it is a fact, that in the past, the American farmer has been the unyield- ing supporter of those plutocratic forces that have been enslaving us all. But to-day the American farmer is beginning to get his eyes open and to change his attitude. For he is beginning to feel the crushing weight of the shrewd business men whom he so much admired and so loyally defended. He is beginning to see that the multi-milion- aire makes his millions only by crushing all the people, working man, common business man, and the farmer alike under his iron heel. For first, as a result of the battle between capital and labor, the farmer can no longer pay the wages demanded by labor. The laboring man disdains the low pay, the long hours, and the drudgery of the farm. And this alone means the slow ruin of the farmer. But secondly, the farmer can no longer control the market for his produce. The shrewd business man, whom the farmer once so greatly admired, has corralled the farmer's market. The farmer can no longer sell to the highest bidder. He must take that price which the Trust is pleased to offer or "leave it." And all trans- portation is also in the control of the same irresponsible THE AMERICAN FARMER AND INDUSTRIAL REFORM. 205 Power. The farmer is at the mercy of these princes of finance. And this alone means also slow ruin. But thirdly, the farmer finds that these shrewd business financiers have also corralled the manufacture and sale of all the things that the farmer must buy, whether it be machinery for his farm or furniture for his household. And the farmer must pay the price which the trust demands or "leave the goods." Thus, at every point, the American farmer has lost his independence. At every point in the game, he is at the mercy of both labor and capital. A new world has grown up around him and he no longer belongs to the dominant forces. On the contrary, the American farmer is being slowly reduced to the level of the peasant class of Europe. The American farm, in many places, is being abandoned, or it is sold to the foreigner, who by putting his wife or daughter behind the hoe and the plow making her do the severe work of a hired man, is able to make a living. Or else the farm is sold to the millionaire landlord and the farmer becomes his dependent, thus building up, in America, a landed aristocracy on the one hand, and a landed peasantry on the other as in Europe. Many are blind to the change, but it is slowly taking place. J. A. Everitt, founder of the American Society of Equity says, "The census of 1900 shows that taking all the farmers together, the average income per family was during the census year only $643, a little over $2 a day. "Two and one-third millions families had a yearly income of less than $200. And four millions had less 206 EFFECTIVE INDUSTRIAL REFORM. than $400." "Only one family in eight had an income of more than $800." " Are farm prices equitable, when two-thirds of the families on the farms are limited to an income of less than $400 a year?" (J. A. Everitt.The Third Power, p. 112.) And this injustice he attributes to the power of or- ganized Capital which fixes prices with despotic sway, (p. 114.) "The farmer," he says "does not drive a nail, use a pin, lift a hoe or spade, coil a rope or turn a furrow, but he pays tribute to some one of the numerous armies arrayed against him." In the dedication of his book entitled " The Third Power'' he calls the farmer, "The largest class, the most dependent class, the hardest working class, the poorest paid class of people in the world." Finally, J. P. Roberts, for thirty years Dean of Ag- riculture of Cornell University, writing in the Outlook (May 8, 1909) says, "A large number of farmers I believe a majority of them are now, and for the last twenty-five years have been selling many staple crops at a real loss." "By this I mean, that if the farmer's time is charged up, to his wheat bill for instance, at the wages of com- mon laborers, ($2.00 to $2.50 per day), and if there be .added the other items in the cost of production, as the cost of fertilizers and so forth, the selling price of the crop will not balance the account." "Astounding as the statement is, it is a fact that many grain and hay farmers are working for 50 cents or less a day and boarding themselves." THE AMERICAN FARMER AND INDUSTRIAL REFORM. 207 "Had it not been for that vast expanse of virgin soil which until now awaited the migrant cultivator, the American farmer would long since have fallen to the condition of a peasant." Do we wonder in the light of these facts that young men are abandoning the farms ? And yet while young men are rushing from the farm because of these hopeless conditions, some of our parlor economists are urging the "turning of a much larger proportion of working men to agricultural pursuits," to relieve the congestion and poverty of the cities! What is the remedy of this unjustice? Some say Introduce agricultural instruction into our schools. Make the farmer a more intelligent tiller of the soil and thereby increase his profits. Now I am in favor of agricultural instruction in the schools. But so long as our present despotic industrial system pre- vails, this will only increase the plunder of the oligarchy at the top. For the extent .to which the farmer shall be plundered will be limited only by the amount that he has to be plundered of. The oligarchy in control has the power to take and will take all. But another remedy is suggested. Mr. J. A. Everitt referred to above, says that there are three factors in the industrial world Land, Labor, and Capital. Now says Mr. Everitt, Capital is organized, Labor is organized, but Land "the Third Power," is unorganized. Hence the American farmer is ground under the feet of both Labor and Capital. The remedy, therefore, which Mr. Everitt recom- mends is the organization of the American farmer into 208 EFFECTIVE INDUSTRIAL REFORM. a sort of Union a " Society of Equity " and, by mutual agreement and cooperative action, put the price on his products up to that level which justice and equity demand. It was under the leadership of Mr. Everitt and his Society of Equity that the Tobacco and Cotton producers in Kentucky, Tennessee and other southern States were organized against the Tobacco Trust and the Cotton Trust. And it was from the attempt to carry out his methods that night-riding sprang. Now the question arises, Will this remedy, the Organization of the farming population into a single body, A Third Power advance the prices on farm products and bring justice to the American farmer? Our answer to this inquiry is an unqualified, No. For, First, the farmer isolated and tied to the duties of his farm simply cannot form a strong enough organiza- tion, to control the prices of the products even of the farm. Every attempt of this kind has in the end met with signal failure. What have the farmers in Ken- tucky, Tennessee and other states been able to effect against the tobacco trust and the cotton trust? Noth- ing permanent. And yet in their determination to effect something, they brought on a condition of in- cipient social war. Second. Even if the farmer could combine so as to control the price of his own products this would not bring justice. For there are several other avenues through any one of which this advantage could and would be completely nullified. For first, Labor could imme- diately increase its price, so that the farmer would have to pay in increased wages all that was gained by CHICAGO STOCK YARDS. When the people own the Beef Plants, the farmer will not only share in the profits of the plants, but receive a higher return for his cattle on the hoof. When the people own the Railroads, the farmer will not only share, as a stockholder, in the dividends, but the profits on his pro- duce will not be swallowed up by excessive freight charges. When Edward H. Harriman, the railroad magnate, died (1909), he left $150,000,000 to his wife, a fortune gouged out of the earn- ings of the people, and no small part came from the farmer. THE AMERICAN FARMER AND INDUSTRIAL REFORM. 209 putting Up the price on his own products. Or second the owners of the Railroads could increase freight charges and so nullify all the advantage gained; or, lastly, the manufacturer of Farm Machinery could increase his prices, and so eat up all that the farmer had made. Thus the farmer would still be at the mercy of both labor and capital and would fight a losing battle. Besides, I add, how can any group of sensible men expect that justice can ever come, when human society is divided into three antagonistic classes, as Land, Labor and Capital, and all engaged like three angry bull- dogs in perpetual battle with each other? What then is the remedy of the wrongs of the Amer- ican farmer? First, the American farmer must come to realize that human society forms one great industrial and commercial whole. Second, that we are all being ground under the heel of the same atrocious despotic power. Then, third, he must join with the rest of society in organizing the people into a single Business Corpora- tion to overthrow this despotic power, root and branch, and so make the people supreme. There is no other way by which to bring justice to every class. By adopting this method justice is certain. For let us suppose that the community should adopt the plan proposed in this book and suppose that the farmer would join with the rest of the people in acquiring possession of the railroads after our plan, what would be the effect on the farmer? The effect would be not only that the farmer would become a capitalist 210 EFFECTIVE INDUSTRIAL REFORM. in the Railroad and reap his share of the profits but he would become one of the sovereign capitalist factors in their control and could demand that his produce be carried to the market at .a just price. Suppose again that with the rest of the people he should acquire ownership and control over the great emporium or markets, for his and all other products of the land, what effect would that have upon him? The effect would be that he would not only reap his share of the dividends earned in the business of the country, but he would become one of the sovereign capitalist factors fixing prices and he could demand that a just price be paid to him for his produce and so justice would inevitably be done. Suppose that, in the same way, he should join with the rest of the people in owning and running the great monopolistic manufactures of farm machinery, household furniture, pianos, paper and so forth. Here too he would not only reap a handsome profit, but he would become a sovereign capitalist factor in determin- ing prices which he and others would have to pay for these utilities and so justice would be done even in the things which he had to buy. Thus under the operation of our plan the farmer will regain at every point that independence and power which he has lost. And he will again become a sovereign capitalistic factor in the industrial and commercial world. And the industry of farming will be lifted to its true place and become attractive to the young as one of the means of making a success in life. But some one asks, " But does not your plan con- template acquiring possession of the land by public THE AMERICAN FARMER AND INDUSTRIAL REFORM. 211 ownership and so will you not ultimately drive the farmer from his farm? In reply to this question, we would say, that no doubt that ultimately, the people will acquire possession of the land and so make farming or agriculture, one of the public Industrial functions. But in doing this, we will not drive the farmer off of the farm nor lessen his income. On the contrary, we shall elevate farming into a still larger and freer calling. We shall join many small farms into one. And on the large farm thus created we shall place the skilled farmer to take control like the president of the railroad, and we shall pay him a far larger income than he now receives, and he will have less hardship, more help, and a freer life. He will still be one of the sovereign capitalistic factors in the world. He will still own the farm, but in co-partnership with the rest of the people whom he shall serve, even as they shall be in-co-partnership with him and serve him. Thus whatever changes may occur under the gradual evolution of our scheme of reform, every one's rights shall be strictly guarded and justice shall be done. And we are sure that the farmer, under our plan, will not lose in position and independence. For now he is master only of his little farm. But under the new scheme, he will be master, with others, of the whole Plant called Civilization, and he will be equal in wealth and power with every one else. We appeal, therefore, to the American farmer to join with us in introducing this great reform, through which alone justice can come. The farmer too often feels hostility toward American Labor, as if the working man was the cause of all his 212 EFFECTIVE INDUSTRIAL REFORM. trouble. But the farmer must throw away this hostility ; and, joining with working men and other classes, must overthrow that greedy despotic power which is crushing both farmer and working man and smaller capitalist under its feet. TENNIS COURT AND CLUB HOUSE IN THE BERKSHIRES. GOLF TOURNAMENT WATCHING A DRIVE. GOING TO THE NEXT HOLE. NOTE. When we have the reform advocated in this book, the farmer will be able to spend a month with his family playing golf in the Berkshires, if he so desires. CHAPTER XV. QUESTIONS AND ANSWERS METHOD OF PRO- MOTING THE REFORM. To those who for the first time contemplate the scheme of reform advocated in this book, certain ques- tions and objections naturally arise. Let us consider some of these. 1. "Are the people competent to own and direct their own industrial and commercial activities as this scheme contemplates? "Are they financially and, especially, intellectually capable of doing this?" They are certainly financially capable, as I have already shown. For, as we have seen, although it would require at least $30,000,000 to capitalize the Chicago street railways, yet the citizens are easily capable of raising the capital by the method which I illustrated. But if the citizens of Chicago can capitalize their street Railways, they can by the same method capitalize any other industry which our scheme may demand. And the same affirmation can be said of all the citizens in the United States. For we do not con- template acquiring possession of every industry all at once. We shall take them up one by one as we are able. But are the people competent intellectually to own and control their own industries as this scheme contemplates ? I am firmly convinced that they are. The one fallacious plea of despotic power in all ages has been the alleged incapacity of the people to take care of themselves. 214 EFFECTIVE INDUSTRIAL REFORM. Partly from honest conviction, but chiefly from love of plunder, the self-appointed teachers and leaders of the people, instead of instructing the people and fitting them to be self-reliant, have systematically taught the people from infancy that they are utterly incompetent to take care of themselves. "It is not safe," they said "for you to do your own thinking. You are free from danger only when you permit us to do your thinking for you." "You are incompetent for self-government. Sub- mit yourselves to us, your heavenly ordained rulers, and all will be well." And now the last plea in justification of desoptic power is that of the incompetence of the people in the industrial world. "A few men," it is affirmed, "now own all the wealth of the world. It always has been so; it always will be so. For you, the people, are utterly incom- petent to capitalize and manage your own industrial activities. Submit yourselves wholly to our paternal care. And if we, the heaven-born, industrial magnates, systematically grind you to the earth, pray God to convert us to a more sacred conception of Christian stewardship. But do you never call us to account, nor question our divine right to absolute power and to own all. Above all never harbor the thought that you yourselves might better own and direct your own in- dustrial affairs; for that would mean ruin." Now the time has come for the people to repudiate with scorn this whole imputation of incompetence in the industrial world. The men who to-day run our BUILDING AN ELEVATED CROSSING ALL ITALIANS. The son of foreman (man with hand on stone) is a graduate of Har- vard and is now a student member of the U. S. Ambassadorial Staff in Constantinople. THIS MAN WORKS THE CRANE IN PICTURE ABOVE. He works three engines at once. Immigrants like these supply the very best material out of which to construct Industrial Democracy. QUESTIONS AND ANSWERS. 215 industrial affairs are not one whit more competent or more brainy as a class than the rest of the people. There are men in every calling some of them earning not more than a thousand a year, who are just as brainy as the men in the corporations. The greater wealth of these men is due not to their superior brain, but to the tremendous advantage which their position creates. Give the men in any vocation the superior external ad- vantage, which is given to the men in the corporations, and, with no addition to their brain power, they would accumulate wealth like the industrial magnates to-day. This may seem like a strong statement to those who cravenly bow before the God of mammon. But it is strictly true. To-day the people of America resent the idea that they cannot govern themselves, or take care of them- selves in the political world, or that they need the services of some irresponsible despot to rule over them. They proudly affirm not only that they can rule them- selves, but that they can maintain a better government, and a better condition of society than any irresponsible despot or oligarchy ever maintained. And all history makes good this affirmation. Indeed, just in propor- tion as despotic power obtains in any country, in that proportion does injustice, inefficiency, poverty and failure enter in. But just in proportion as the people become supreme, justice, efficiency, liberty, and pros- perity have been enthroned and permanently enthroned. I confidently maintain, therefore, that the people of the United States are more capable of owning, wisely controlling and fully capitalizing, every industry ac- 216 EFFECTIVE INDUSTRIAL REFORM. cording to our plan, than any industrial baron or group of commercial magnates that ever lived. And if the people will but organize themselves into a single pro- ducing firm as I have outlined, they will make their industries more productive, and they will achieve greater justice, than has ever been realized by any private corporation under the sun. All that the people need is a little encouragement from those teachers and leaders that are really friendly to them. We must appeal not to the people's weak- ness, but to the people's strength. We must evoke the spirit, not of dependence and fear, but of self-reliance and courage. And the vast majority of the people will nobly respond and make of the new scheme a grand success. Of course, the people will not be able to sub- scribe as much capital at first, as others, and they will need leadership. But with each new industry socialized, there will come increased financial power, and with experience, will come wisdom, until the people shall attain to perfect competence in owning and directing their whole industrial and commercial activities. 2. Why do you make the subscription of the capital compulsory, why not allow it to be voluntary? We make the subscription of the capital compul- sory and make this, indeed, fundamental in our scheme, because, first, Industrial reform, in order to be effective, must embrace the whole people, all must be in it and stan'd or fall together. Second. Because in no other way can we have the capital when needed- For suppose for a moment that the subscription of the QUESTIONS AND ANSWERS. 217 capital was voluntary. What would be the inevitable result ? The result would be that even persons in favor of the reform would forget to have the money at hand when it was required; and others would fail all together. And some would refuse to subscribe at all. If the people are going into business together, the capital must be on hand when needed. But to cause it to be on hand when needed, it must be required by law. Third. We require each citizen to subscribe his quota, in order to prevent persons of an antogonistic spirit from working up a faction to draw off when some enterprise is pro- posed, and so defeating the enterprise and even destroy- ing the new plan. To prevent these evils we shall call upon, and, if need be, require each maif to subscribe his quota of the capital. We shall thus consolidate the people into one organized whole. And so make all to stand or fall together. And so justice shall be done. 3. But another question is asked, Will men be wil- ling to adopt this scheme? Will they be willing to vote for the public ownership of an industry when to do so will require them to subscribe the needed capital? I have no fears but that they will be willing to do this when once the proposition is fairly presented to them. For suppose once that the municipality of Chicago, should guarantee to the people a 5% dividend and as much more as they can, by their combined effort, make the Street railways pay, suppose that it should offer them the option of investing their capital in an annuity, or of receiving it back at death in a cash 218 EFFECTIVE INDUSTRIAL REFORM. payment to their heirs, can we believe that the people would be unwilling to adopt our scheme? And espe- cially, when they once grasp the evils of the present system on the one hand and all the benefits flowing from the adoption of our scheme, on the other the making of every man a capitalist in his country's in- dustries and every man well-to-do by the time that he is forty-five years of age, we have no fears but that they will be overwhelmingly willing to adopt our plan of reform. Indeed, it is not the people who to-day oppose public ownership, but the princes in high finance, who are determined not to surrender their present power to plunder. 4. But another question is asked, Will it be right to require the people to subscribe, each his quota, towards the capitalization of these public utilities?" Will it be right to require the minority to yield to the will of the majority and stand or fall with them? In view of each man's relation to each industry and in view of the present situation, it certainly will be right to do this, as I have already indicated. For in the first place, each man is as vitally depend- ent upon the existence of each industry as any other man; it is as much his duty therefore to see to its proper capitalization as any other man. Take the industry of farming. Is not Mr. Smith as fully depen- dent upon the products of the farm for life and happi- ness as any other man? What right then, has he to say, "Let Mr. Brown go into farming if he will; I will having nothing to do with it. There is not profit QUESTIONS AND ANSWERS. 219 enough in it for me." "Not profit enough in it for him!" What right has any man to say "Let my neighbor run the business that has little profit in it, while I run the business that yields fabulous profits," if both industries are equally necessary to the life and happiness of both men, as they certainly are? But this is not all. In the evolution of human so- ciety, certain forces or conditions of evil may arise which inflict unspeakable wrong upon certain classes, and those classes may be utterly unable of themselves to right those wrongs. It may be possible to right those wrongs only by the united effort of the whole people. Now, when such evil forces or conditions arise, it is the duty of everybody to join in one collective organiza- tion of the people for the utter overthrow of those wrongs. And no person can refuse to join in the work on the ground that his own rights have not been in- vaded and that the affair does not concern him. The affair does concern him. He is responsible for the cure of every organized wrong in the society of which he is a member and he can be compelled to do his part in the great whole for the righting of these particular wrongs. Now we have seen in the preceding pages that great wrongs have arisen in connection with our whole indus- trial system, wrongs in relation to wages, prices and investments, that are simply insufferable. And we have seen that these wrongs can be cured only by organizing the people into a single business corporation, with every man as a shareholder and 220 EFFECTIVE INDUSTRIAL REFORM. responsible agent in it. But this means that each man shall subscribe his quota of the needed capital. I hold, therefore, that it is not only right, but it is the duty of the people to organize themselves into a great stock-corporation according to some such a scheme as we have outlined in this book, and to require each citizen to subscribe his proper quota of the needed capital and become a responsible agent in this general corporation. The truth is that the present industrial situation with its perils, resulting from the evolution of the stock-corporation, on the one hand, and the rise of a merciless industrial despotism, on the other, has caused a new order of moral and social obligations to emerge, obligations of the most imperative character. The first is the obligation resting upon the whole people collectively, to create or take possession of, and capital- ize and administer all their monopolistic and quasi pub- lic activities. To suffer any man or any group of men to own and control our industrial life, in its present in- tegrated form is to commit a crime like that of allow- ing our country to fall under the absolute, despotic power of the Tzar of Russia. The second imperative ob- ligation is the duty resting upon each man individually to subscribe and own his share of the capital needed to establish each plant, the duty to bear his share of sovereign responsibility in its management, and to reap his share of the reward. In short, it is the imperative duty of each man to become a sovereign, capitalistic, factor in our whole industrial life, to bear his share of the burden and stand or fall with the rest. METHOD OF PROMOTING THE REFORM. 221 And the performance of this duty can be, and ought to be, enforced by law. The right to require each man to subscribe his quota of the capital in the single produc- ing firm, the people's corporation, which we contem- plate, rests upon the same moral grounds, and is as imperative, as the right to tax each man to support the government or the public school. 5. But is your plan within the limits of constitutional law? If it is not, of course we shall be compelled to secure an amendment of the State constitution in order to introduce our scheme. And this can be done. But I am convinced that there is no feature of this new plan that is not clearly within the limits of state and national constitutional law. It has already been decided by supreme authority that the public ownership of public utilities is clearly within the limits of the constitutions of the several states and of the United States. Our plan, therefore, viewed as a form of public ownership is clearly consti- tutional. But how about your peculiar method of raising the capital, paying dividends and guaranteeing a 5% divi- dend? In regard to these things, it can be said that the capital, which each man pays in, may be viewed in some three ways, each of which is clearly constitutional. First, it may be viewed as a tax assessed upon each citizen to capitalize a needed public utility. Hence, 222 EFFECTIVE INDUSTRIAL REFORM. it is perfectly within the limits of constitutional law to require each to subscribe and pay in his quota. Second, the capital paid in, by each, may be viewed as a loan made by the citizen to the government to capitalize a public industry. Hence, it is perfectly within the limits of constitutional law for the govern- ment to guarantee a minimum dividend of 5%, more or less. It is a fact that the government of Massachu- setts has put its credit behind the Metropolitan district around Boston to the extent of about $62,000,000 (1908). It has, in short, borrowed and turned over to the use of the Metropolitan district this vast sum, trusting in the district to pay up the several bonds of the issue as they become due. Now, if it is within the limits of constitutional law to guarantee the payment of bonds to the extent of $62,000,000 for the Metro- politan district, it surely is within the limits of consti- tutional law for the government of any county, city, or state, or the nation, to guarantee a 5% dividend to the investors in a public utility which such county, city, state, or the nation may acquire. Third, the capital may be viewed as a private in- vestment in a business corporation for the earning of dividends. Hence, it is perfectly within the limits of constitutional law to allow each citizen to earn as large a dividend- above 5%, as he with his fellow citizens may enable the plant to pay. Of course, it is to be admitted that our scheme of public ownership is different from any other plan of public ownership yet proposed. Nevertheless, I am firmly convinced that all its features are clearly within QUESTIONS AND ANSWERS. 223 the restrictions of constitutional law both of state and nation. And to secure its adoption would require only the enactment of such laws as are demanded for the adoption of any other form of public ownership, already introduced in many cities and states and even in the United States. What is the Panama canal but a form of public ownership of a quasi public utility? If such an undertaking is constitutional, certainly the plan un- folded in this book is constitutional. 6. But some one asks, Is not your system based upon compulsory co-operation, and is not compulsory co- operation always wrong? Is it not un-American? It must be admitted in reply, that the new system does, indeed, involve compulsory co-operation so far as the minority are concerned. For we contemplate or- ganizing the whole people into one single producing firm or corporation, by law, with every citizen in it as a share-holder and responsible agent. And this im- plies that the minority will have to fall into line with the majority, in the assumption of ownership of each plant, and stand or fall with the rest. But I deny that such compulsory co-operation is wrong. On the contrary, when such compulsory co- operation is necessary for the common welfare and safety it is right. For example suppose that a storm should arise at sea, and the efforts of all the male pas- sengers, as well as the sailors, were required to save the ship. But suppose that some of the passengers should refuse to co-operate with the rest. Suppose that they should even purpose to take possession of the 224 EFFECTIVE INDUSTRIAL REFORM. boats and escape, leaving the rest with the women and children to perish. Would it not be perfectly right in that case to compel these passengers to remain in the ship and co-operate with the rest for the common safety ? Would it not be right to say to these men, "The safety of all, especially of the women and children, demands that all co-operate and remain with the ship. You shall not therefore, at your pleasure, abandon the others in this extremity. You must remain with the ship, and survive or perish with the rest." Certainly in this and in all other cases where the common weal demands co-operation and union, co-oper- ation and union can and must be preserved, if need be, by compulsion. And when, in human society, such co-operation and union are necessary to defend human rights and pro- mote the general welfare, such co-operation and union directed by the sovereign will of the people, are not only, not wrong, but they are gloriously right and justifiable. And this compulsory co-operation is no new thing in America, neither is it un-American, nor contrary to the American spirit. On the contrary, all that is best in our American institutions and civilization, is based upon the exercise of this principle. Our civil govern- ment, which is the freest and best on earth, is based upon this principle of compulsory co-operation directed by the sovereign will of the people. For every person born within the United States, is born, without his consent, a citizen of this Republic. And he is born not only under its privileges but also under its responsi- bilities. And he is compelled to pay taxes, and even QUESTIONS AND ANSWERS. 225 to enlist and fight in its defense in case of need. And no State can go out of the Union except with the con- sent of the rest and that consent will never be given. When the South attempted to secede from the Union, the people rushed to war to compel them to stay in. What is this but compulsory union and co-operation of the strongest kind. And yet our government is, as we have just said, the best and the freest on earth. And our public school system is based upon the principle of compulsory co-operation. The majority in these United States says to the minority, "We can- not individually give to our children, that education which it is their right to receive and which the safety of the state demands. We must, therefore, all join together, and you must join with us, in maintaining a public school adequate to meet the needs of the chil- dren and the state." The United States mail, is a material Industry as truly as the carrying of express or freight. And yet it is based upon compulsory co-operation. The same thing can be said of our system of Sanitation, and, indeed, of every form of Public ownership that has been proposed. Public ownership of every form is compulsory co-operation. Hence, whatever objection can be brought against our scheme, on this ground, can be brought with equal and even greater force against every other scheme of public ownership that has been or ever can be proposed. If compulsory co-operation as a principle is in itself wrong, if the minority is never to be constrained by the majority to secure co-operative action, then our system of government is wrong and 226 EFFECTIVE INDUSTRIAL , REFORM. all government is wrong, our public school . system is wrong, and no public school system can be devised that is not wrong. Our Mailing system is wrong. And we had no right to undertake the digging of the Panama canal. In short, if all compulsory co-operation is, in itself, wrong, then all government, all law and order, all general co-operative effort, all public education are simply impossible, and anarchy must rule the world. The mere fact, therefore, that the system proposed in this book is based upon, or necessitates, compulsory co-operation, does not condemn it of itself. Neither, we may add, does this fact make it un-American. On the contrary the fact that this scheme involves compulsory co-operation, directed by the sovereign will of the people, in the interest of justice, is not only greatly in its favor, but gives it complete justification. It is this feature that places it in direct line with our civil govern- ment, our system of education, and all that is best and most valuable in our American institutions. Whether, therefore, the system proposed in this book, with its fundamental principle of compulsory co- operation, enforced by the sovereign will of the whole people is justifiable or not, is to be determined wholly by the question as to whether that system is needed or not, and whether its fruits will be good or bad. But this question has already been answered in the preceding pages in the most emphatic and decisive way. The adoption of this scheme is not only neces- sary to overthrow the terrible despotism that reigns at present, but it will bring in a new heavens and a new earth wherein shall dwell righteousness. It will give QUESTIONS AND ANSWERS. 227 us a society founded in Justice. The scheme proposed in this book, therefore, is necessary and justifiable. And it is in perfect accord with the very spirit and genius of American Institutions and civilization. 7. But someone asks, How about the worthless and drunken classes in your system, will the active and industrious be willing to enter into forcible partnership with the shiftless and incompetent? In answer to this question, it can be said, first, that society always is, and always must be, in fact, in a sort of industrial partnership with the shiftless and worthless classes. We are in partnership with them to-day, and we are just as much in partnership with them now as we shall be when our new plan is adopted. For these shiftless classes are here on this earth and we are obliged in some measure to care for them, and often to provide them with work when their work is scarcely needed. The problem of the worthless and drunken classes always has been, and always shall be a problem, hard to solve. But it will be no more of a problem under our plan than it is under the present system. But some one asks, "Will not the shiftless and worthless be able under your plan to forcibly load them- selves onto the active and industrious?" To this ques- tion must be given for answer an unqualified No. For how can they under the new plan load themselves onto the active and industrious any more than to-day? Will it be by receiving dividends which they do not earn? Certainly not. For in the new order no man will re- 228 EFFECTIVE INDUSTRIAL REFORM. ceive dividends except on the actual capital which he himself invests. Will they be able to buy food and clothing without paying for them? No. For every man will be called upon to rigidly pay for all that he consumes. Will the shiftless and worthless be able to hold jobs and receive wages for work which they never perform? No. For it will be a rigid law that the best jobs and best places will be given to the best men; these will also receive the best pay. The worst men will be given the worst jobs and the poorest pay. And the worthless men will be given no work at all and no pay. And this will hold true, whether each man has any money invested in our country's industries or not. The truth is that in the new order the whole country will demand most imperatively of every superintendent that he make his plant the most productive possible and that no shirk nor dead-beat be favored in any way. The result will be that every shirk and dead-beat will be compelled either to work or get out. But some one asks, Suppose that these shiftless and worthless classes refuse to invest in our country's industries, what then? What then? Why, we will just go ahead with our new plan and leave them out. Is the car of progress to be stopped and the prosperity of the whole country to be arrested because a few shirks refuse to step with the rest of us within the traces and help pull the car along? In conclusion of this subject it should be said that I believe that under my plan the number of the shiftless and worthless will be far less than to-day. For the existence of these classes is due in large measure, indi- QUESTIONS AND ANSWERS. 229 rectly, to present evil industrial conditions. But with the introduction of our plan these evil conditions would largely disappear and hence, these shiftless and worth- less classes would gradually pass away. I maintain, therefore, that the existence of a shiftless and worthless class affords no objection to the adop- tion of this scheme of reform, and it affords no obstacle to the highest operation of it. The new scheme will tend to lift up everybody. It will place an open door before every soul and make justice possible for all. But if some men and women refuse to be helped, or refuse to use the opportunities opened up to them, if a few shiftless people refuse to enter into the new scheme, the scheme will not thereby be made a failure. For under the operation of the new plan, the shiftless and worthless classes can injure only themselves. The active and industrious can still press on and reap the advantages flowing from the adoption of the new order. 8. But will not your scheme destroy that valuable factor of individual initiative, the individual initiative of great minds, which is so important an element in human progress? "There are in every country," it is justly said "a few great minds which step outside the beaten track and initiate new and great enterprises. It is these men who make our country great. Now these men must be given liberty to act. They cannot and must not be held down by rules of co-operation or anything else." It is, therefore, important to inquire whether our system, which we propose in this book, will dis- 230 EFFECTIVE INDUSTRIAL REFORM. courage the spirit of individual, initiative, especially, on the part of great men? Or, to put the question dif- ferently, Which, we may ask, will most encourage the spirit of individual initiative, the present system or the one which, we propose? It cannot be denied that the present system does encourage individual initiative of a certain kind. It encourages individual initiative in the organization of vast schemes of public robbery. It raises up every year a vast crop of conscienceless schemers and plunder- ers in politics and in business. It is giving birth to great men, in spirit like Alexander the Great, or Julius Caesar, or Peter the great, who, indeed, form new, vast industrial combinations; but they are combina- tions which give to their authors absolute despotic power and crush the people into the dust. But is this the sort of individual initiative which we desire to en- courage? Of what value is it to the people that new and vast organizations are formed for the exploitation of their timber lands, their coal mines, their beef in- dustry, if those new organizations only raise prices higher and higher, thrust the people out of every prom- ising vocation, and reduce them to dependency? But this is not all. When the present despotic movement has finished its course, and all things have been brought under the control of a few men, what will become of individual initiative then? Is it not a fact that despotic power always crushes out all individual initiative and ends by placing mediocrity and incom- petency on the throne ? And then does not ruin come ? Is not this the history of Russia? Was it not the his- QUESTIONS AND ANSWERS. 231 tory of France before the Revolution? Is not this the history of not a few vast industrial organizations to-day in our own land? First, there was the strong men who built up the business, but they built it up in the form of a vast despotism; then individual initiative was shut out, then mediocrity took the reins, and then came the financial crash. And when all our in- dustrial activities are organized under the despotic authority of a few men, will not all individual initiative be destroyed? Will not all aspiring young men be discouraged and will not mediocrity mount the throne; and, then, later will not the universal crash come? But when the system proposed in this book is intro- duced, and the people are sovereign in the whole indus- trial world, will not every strong man be placed before an open door, will not individual initiative be given the freest play, and will it not always work for the public good? For when, under our new system, all the people are hungering for good wages, fair prices, and good dividends, must it not inevitably follow that the best men will be placed at the heads of departments? And will not the people inevitably give them a free hand to work out new and better methods of organization and production? Will not the directors be selected from among the most enterprizing men, from among those men who by new methods and larger organization can make the business more productive ? And will not these be the ones who shall be retained in control? Farthermore, the new plan can encourage and pro- tect inventors and so stimulate inventive genius in a way that is impossible under the present system. 232 EFFECTIVE INDUSTRIAL REFORM. And the way can be and shall be left open for any man or any group of men to launch out into new and untried enterprises in which the whole people might be unwilling at first to engage ; and when these pioneers of the new enterprise have made and proved it to be successful, the people can then take it up and reward the original promoters. Our plan does not at all con- template preventing or even discouraging private in- dustrial enterprise in blazing out the way of new methods and new undertakings. Thus under our plan, all the most enterprising young men will be inevitably encouraged. Individual initiative on the part of the most capable will be evoked. And under no system will strong men be given a freer hand than under the one advocated in this book. One reason why we ought to adopt this plan, is because it will place the best men in control, evoke all their high- est powers, and enlist them always in favor of the public good and the welfare of all. I have not space fully to discuss this point here, but I am certain that a little consideration of the facts in the case, will verify the foregoing conclusion.. 9. Will not the adoption of your plan destroy the spirit of daring enterprise in great men, and bring in a con- dition of mediocrity and inaction? This is the objection which W. H. Mallock brings against socialism. He says, in effect, that vast enter- prises, like the building of railroads, factories, and min- ing enterprises, must be undertaken by great minds. But that great minds will not incur the risk involved QUESTIONS AND ANSWERS. 233 in such enterprises unless they are encouraged by the hope of great rewards, that is, the hope of becoming millionaires. But socialism will destroy all possibility of reaping such rewards on the part of a few men. Hence, with the coming in of socialism, all enterprise will cease. Is this objection valid? It is certainly not valid when applied to my plan. On the contrary, the adop- tion of my plan will awaken the spirit of enterprise in far vaster force than has ever been experienced in human history before. .. For, first, all history shows that there is no condition of society so stimulative of true enterprise as demo- cracy. And there is no body of men so enterprising and capable as the whole people when organized into one sovereign power. The days of the greatest enterprise in ancient Greece and Rome were days of the most pro- nounced democracy. In modern times, the .birth of democracy and modern enterprise are synchronous. No sooner did Japan throw off despotic power than the nation leaped forward in the race of progress and the highest achievement. When the corporations failed to dig the Panama canal, it was the people of the United States that took it up with vigor and will easily press it to a successful conclusion. It is the United States which introduced one of the most effective mailing systems in the world. And it is the people of the United States who have created the best system of education ever seen and the best government on earth. And I am confident that if we should adopt the plan of industrial reform unfolded in this book, enterprises 234 EFFECTIVE INDUSTRIAL REFORM. now waiting for support would be quickly undertaken and successfully completed. Take Wireless Telegraphy in 1908. The establish- ment of that enterprise was hindered by difficulties in raising the required capital, by the rivalry of competing powers, and by the opposition of corporations owning electric lines and cables. But suppose that our plan had been established, and suppose that the promoters of Wireless telegraphy had come to the people and said "Here is a new method of national and international communication for you to adopt. It will, when estab- lished, bring you easily 10% on your capital besides greatly increasing .the value of other enterprises and making travel safer by sea." How quickly the people would have adopted it. And how easy for the people to have raised the money. If each voter had been requir- ed to subscribe only one dollar, that would have given $15,000,000 to begin with. And then unhampered by rival corporations, the best men could have been placed in control of the new enterprise, and it would soon have been thoroughly established and tested. So would it be with every other good enterprise. Take an enterprise like the building of the McAdoo tunnels. The chief obstacle in the way of that under- taking was not in the rock underneath the feet of the workers and the mud and river overhead, but in the determination of the street car lines in New York to prevent the promoters of the tunnels from obtaining proper terminals and extensions in that city. Now suppose that all our industries had been owned by the people after our plan, and suppose that Mr. McAdoo QUESTIONS AND ANSWERS. 235 had appealed to the people and said, " Here is another enterprise which has a fair promise of success. When complete it will earn you a dividend of at least 10% besides greatly aiding other industries," what would the people have done? They would have taken up the enterprise with vigor and with none of the vexatious opposition from New York Street-car lines or any other source, they would have quickly put the enterprise through. Mallock's criticism of Socialism assumes several errors. First, that only a few men are enterprising; when, as a matter of fact, no body of men are so enter- prising as the whole people when once they are made supreme over their own affairs. Second, it assumes that when the people become sovereign, all great men will be thrown out of commission. But, as a matter of fact, great men will be more in commission then than now. But they will then be the leaders, and not, as now, the oppressors of the people. And the people, led by these men, and these men, sustained by the people, will engage in enterprises far vaster than today. Third, Mallock assumes that with the coming of social- ism the financial motive will be destroyed. This would no doubt be to a large extent the case, if Marxian social- ism were adopted. But it will not be the case with my plan. For my plan is a money making scheme just as truly as the private corporation. Only my plan appeals to everybody. Hence, the whole people will be aroused by every new scheme that offers a real substantial promise of increasing the wealth of the people. And everybody will be enthusiastic for it. 236 EFFECTIVE INDUSTRIAL REFORM. But some one asks, Will not graft and incompetency flourish under your plan? No. The cause of graft and incompetency, in public enterprises to-day, has been startingly shown to lie chiefly in the existence of private corporations, on the one hand, and in the communistic character of our present public methods, on the other. In all public works to-day the method of procedure is communistic, in that the .capital is raised indirectly and there is no individual subscription of the capital and no earning of dividends. Such is the character of the United States Mail and the digging of the Panama canal. But under my plan, no private corporations will exist to corrupt legislatures and, secondly, since every man will have his own capital invested and his dividends at stake, every man will be on the alert and no such thing as graft, will be possible. Suppose, for example, that the digging of the Panama canal was undertaken after my plan, and suppose that every citizen had been called upon to invest his quota of the needed capital, and had before him the hope of earn- ing, when the canal is complete, at least a 10% divi- dend on his money, what would occur in such a case? In such a case, every man would be alert against graft and would demand that the canal be dug as economic- ally as possible, that the dividends ultimately accruing might be the greater. Finally, it should be observed that the element of risk to which Mr. Mallock refers and makes so great, will under my plan be wholly or largely eliminated, or it will be spread over the whole people so as to be scarcely felt by each one individually. QUESTIONS AND ANSWERS. 237 Take the case of wireless telegraphy. The sole risk we may say in the way of any private corporation's undertaking and introducing that enterprise was the opposition of other private corporations. So it is with every new enterprise. Suppose that some skillful man should find an improved method of pumping and refining kerosene oil, where would the risk lie in estab- lishing the new method? It would lie in the opposition of the great Standard oil monopoly. And it would lie there alone. And it would be so great as to make the enterprise impracticable, unless he could persuade Stan- dard oil to adopt his method at its own price. But if my plan was adopted in relation to all indus- tries, all risk from this source would be eliminated and the whole people could engage in any enterprise that they desired undeterred by fear from this source. And the risk arising from uncertainty in the enterprise itself would be so widely distributed as to make it negligible. Take again the case of wireless telegraphy. A required subscription of $1 per voter would give a capital of $15,000,000. And yet if from some unforeseen cause, the enterprise should prove a complete failure, the loss would be, therefore, only one dollar per man, a loss entirely negligible. I am confident, therefore, that if any thinking per- son will once bring before his mind what the adoption of my plan means, how it will consolidate the whole people into one vast business corporation, into a vast wealth-producing and money-making organization, in which the interests of all the people will be equally protected and promoted, he will be convinced that no 238 EFFECTIVE INDUSTRIAL REFORM. scheme can be devised that will so arouse the spirit of universal enterprise as the one unfolded in this book. And there will be no limit to the ability of the people, to achieve great things when thus consolidated into one grand industrial and commercial whole. They will be able to achieve everything that they shall under- take. For the capital of the whole country will be behind each enterprise and all the energies of the people will be engaged in its accomplishment. With, the activities and energies of the people thus consolidated and stimulated, I believe that the wealth of the people will increase, as I have said in a previous Chapter,' in leaps and bounds. And the time will speedily come when each industrious man will be able to acquire a small fortune of from $20,000 to $40,000 by the time that he shall reach 45 years of age, and on this he can receive a dividend of, at least, 10%, giving him an income, over and above his earnings by labor, from $2000 to $4000 a year. 10. "But," some zealous Christian asks, "must we not rely on the Gospel to save the world?" We must rely on the Gospel to save the individual soul, but we need a just industrial organization an organization in harmony with the Gospel, to save so- ciety. And if, while we preach the Gospel to individual souls, we permit our industrial system to be founded in iniquity and to serve as the agent of a merciless des- potism, we need not be surprised if the influence of the Gospel is largely nullified, and it ceases to be the power of God unto salvation to this nation. To preach the QUESTIONS AND ANSWERS. 239 Gospel of justice and mercy and then resolutely main- tain an industrial system of injustice and cruelty is to mock God. Unless we carry the Gospel resolutely into our institutions and laws, the Gospel will cease to pene- trate individual life and God will utterly reject us from being his people. And this is what is taking place to-day. We have rejected God's law of justice, co-oper- ation and mercy from our industrial system and God is rejecting us. And unless we repent and reform, this nation will sink into a condition of irreligion, anarchy and slavery. We talk about a revival of religion, But, we say to ministers and evangelists, "do not touch upon the industrial question." We might as well talk about a revival of religion and yet forbid our preachers to touch upon the subject of sin. For the chief seat of sin in America and in all Christiandom to-day is in our industrial system and the chief root of sin is our greed for gold. We have sold ourselves body and soul to the god of Mammon, and we forbid our ministers to point out where our sin lies or call the na- tion to repentance or point out the way of reform. And yet we talk about a revival of religion. Now, one object of this book is to point out to the lovers of true religion where our sin lies ; its object is to call the people to repent; and point out the way of reform. We believe that the next revival of religion must be mark- ed by a fearless assault upon our industrial system, that great citadel of iniquity, that modern instrument of oppression and spoliation. And we must call upon the people of God to come out from the midst of her. We must assault her again and again until the present 240 EFFECTIVE INDUSTRIAL REFORM. evil system is overthrown, all her iniquities are destroyed as by fire, and a new system founded in righteousness shall rise above her ruins. When the people of America do this, then we shall have a revival ot true religion and God will pour out upon us a blessing such that there shall not be room to receive it. This language is not too strong. It is not strong enough to depict the true situation everywhere in the industrial world, and the imperative demand for reform. 11. "But after all is said, even though your plan is gradually introduced, is it not a radical and daring undertaking?" Yes, I admit that it is. Although I can see no great risk in it. But I admit that the change, which it con- templates of overthrowing the power of industrial des- potism and placing the ownership and control of our whole industrial life into the hands of the people, is a radical and, in a way a daring thing to do. But are not daring and radical remedies sometimes needed for daring and radical evils? Has not society again and again, in the past, done most radical and daring things in uprooting deeply intrenched wrongs? Did not the English people do a radical and daring thing when, in 1649, they overthrew the Monarchy and established the sovereign rule of the people? Did not our fathers attempt a radical and daring thing, when they repudiated the tyranny of the English king and established their independence? Are not the people of Russia attempt- ing a radical and daring thing to-day in demanding the overthrow of absolutism and setting up the sovereign METHOD OF PROMOTING THE REFORM. 241 rule of the people? Radical and daring things must often be done in order to uproot daring and deeply seated wrongs. And when have there been greater and more radical wrongs in society than those that afflict us to-day? And must we not expect to do great and daring things to overcome them? 12. What method would you advise for introducing the reform ? I would urge the Socialist party to advocate this re- form as the true socialist methods, and let it take the lead in securing its adoption by each community, be- ginning with some one industry as the street car lines. It may be wise also to form a non-partizan Indus- trial Reform League or Committee to promote the reform and secure the enactment of such laws as are necessary to make it effective. If we can succeed in persuading a single city to adopt this reform and make it a success, its adoption by other cities and ultimately by the several States and the nation will be very rapid. 13. How long will it take for the people to introduce this reform? The people of America can have the reform advo- cated in this book, or any other reform, as soon as they awake and come to know their power. Our govern- ment today is in structure pure democracy. It is pure political socialism. In America, the one sole political authority which we recognize is the sovereign will of 242 EFFECTIVE INDUSTRIAL REFORM. the people. And if the people are not sovereign and supreme, it is because, they are asleep, or they allow themselves to be outwitted by the cunning plunderers at the top, and so the scepter of sovereignty falls from their nerveless grasp. Democracy, Socialism, does not have to reform the government in America, in order to achieve its will. 'The people here are already surpeme. All that the people need to do is to devise some definite, concrete plan of reform, some plan that offers a fair prospect of curing present evils, and then by united action, and the resolute exercise of that sovereign authority and power which they already possess, through the ballot, put that definite concrete plan into action and the work of reform is done. If the plan is not perfect, it can be modified later as experience may demand. But the people will never accomplish anything by mere inac- tion, by lying down and suffering industrial despotism to put its iron heel on all our necks. Now, the scheme unfolded in this book, offers the people a definite, con- crete plan of action and it offers a fair prospect of curing present industrial wrongs. Furthermore, it is capable, after adoption, of modification, if modification is needed. Why not, then, settle upon this plan as our present tentative program, and unitedly go forward, resolutely put it into action, and so press on to the desired goal. And does not wisdom dictate that we should under- take this reform NOW! Is there not a tide in human affairs in favor of reform, which when taken at the flood leads on to victory? And is not that time the present? METHOD OF PROMOTING THE REFORM. 243 Besides, why should we doom humanity to suffer longer? From the beginning of the world down to the present time, humanity has been divided into two great classes, oppressor and oppressed. The cry of the poor and the oppressed has gone up to God. The people can reform these evils at any time when they awake and come to know their power. The supreme' power is in their hands. Why, then, should we not adopt the plan unfolded in this book? And why not adopt it now and press resolutely forward, trusting that the same courage that animated our fathers in their hour of struggle will animate us, and that the same God who sustained them and gave them the victory will go with us and give us like results. And will not some man of wealth, rich also in busi- ness experience, give himself in leadership of the people for the successful introduction of this great reform? He who to-day seeks to relieve distress and discontent by giving millions in charity, is not the man of vision, neither does he understand the cause of present wrongs, nor will he be gratefully remembered by coming gene- rations. What the people want is not charity, but justice, equal opportunity, and above all sovereign power over their own industrial and commercial activi- ties. Charity they disdain. What would our revolu- tionary fathers the Adamses, Washington, and Patrick Henry, have said if, when British aggression had begun, the British people had voted millions in charity to the colonies while still retaining despotic power? Would not our fathers have repudiated such charity with contempt and said, "What we want is not charity 244 EFFECTIVE INDUSTRIAL REFORM. but justice and sovereign control over our own affairs?" And such is the demand of the people to-day. It is he who sees this that is the man of vision and is the true friend of the people. And that man who will lead the people successfully up to victory in this struggle for justice and sovereign power in the industrial and com- mercial world, is the man who will be gratefully remem- bered by coming generations and will place his name beside that of Washington and Lincoln. THE PUBLIC SCHOOL. In the new era, the aim of education will be to perfect each boy and girl individually, and yet to train each also as a member of organized society, responsible for the well-being of all. CHAPTER XVI. RESPONSIBILITY OF THE CHURCH FOR INDUSTRIAL REFORM. The church has not always grasped the largeness of her mission nor felt the full measure of responsibility laid on her by her Founder. The aim of Christ was evidently to transform, not only the individual, but also human society. For man in all his higher powers is a social being and reaches perfection only when he comes under social obligations and enters into social relations. The divine ideal of a perfect man is not one living by himself; but one who has a wife by his side, a group of children dependent upon him ; and who lives in frater- nal and co-operative relations with the whole human race. And the divine ideal of perfected humanity is not a number of individuals, each living by himself with no social relationship with others; but it is a group of men and women, united in bonds of mutual interest and affection, and organized for the most effic- ient performance of their common functions. And such a society is not created merely by aggre- gating together a group of perfected men and women. They must also come into right social relationships and under a right social organization. For it is conceivable that a group of men and women, pure minded and individually perfect, might come together and, ignorant of social law or misled by false teachers, they might found the family on the basis of polygamy, their industrial system on the relationship 246 EFFECTIVE INDUSTRIAL REFORM. of master and slave and their political system on the basis of an absolute autocracy. But would a group of men and women, however perfect individually, consti- tute a perfect society under such social relations? No, for history declares that polygamy, the relation of master and slave, autocracy, result in unspeakable wrong and the utter degredation of the race. And this leads to the affirmation that it is impossible to develop and maintain a perfect manhood and woman- hood without a perfect social organization. Defective institutions create a soil and an atmosphere in which individual character cannot grow. It follows, therefore, that when Jesus contemplated saving the world, he aimed not only to transform the individual man and woman, but also the family, the industrial world, civil government, the school, the church itself, in short, the whole of human society in its institutions and laws. The great principles of justice, equality, fraternity and co-operation which he taught, were designed to be the foundations not only of individ- ual character and conduct, but also of communities and nations. And he designed to so permeate the great plant called civilization with his spirit and principles that justice and good-will should rule in every part, and humanity should form one divine family of Man. 2. The same conclusion is reached by approaching the subject from another standpoint. Jesus bore on his heart the griefs and the sorrows of the world, and he resolved to remove them. But the sorrows and the griefs of the world are of two classes. First, those METHODIST EPISCOPAL CHURCH PITTSFIELD, MASS. One of the most important functions of the Church is to inves- tigate those sources of wrong that lie hidden in institutions and laws. This investigation should be as rigid as fate and as impartial as the j udgment of the Almighty. RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 247 arising from individual errors; and, second, those arising from social wrongs. Now, Jesus evidently bore both classes of wrongs on his heart and aimed to remove both. He saw for example not only wives and children suffering from ill-treatment inflicted by bad husbands and fathers, and aged parents suffering from the in- gratitude and cruelty of children, but also the burdens heaped upon men by organized oppression, by wars created by ambitious leaders, and by merciless tax- gatherers, who were the agents of despotic power. And his aim doubtless was to remove both forms of wrong. When Jesus took the little children in his arms and blessed them, he evidently thought not only of the wrongs heaped upon childhood by the ignorance of parents, but also by a greedy industrial system which forced them to labor in their tender years, deprived them of a mother's care, and often sold them into hope- less slavery. And he doubtlessly aimed to remove both forms of wrong until childhood, as well as man- hood and womanhood, would he amply protected. But to remove these larger organized wrongs, it is necessary to transform human society itself. We must often introduce radical reforms ; we must construct new systems, industrial, political and religious. And this, without doubt, was Christ's ultimate aim. Before his mind there evidently arose a vision of a perfected hu- manity, embracing not only regenerated men and women, but also perfected institutions and laws. And this perfect humanity was not to be something rigidly fixed, but a living growing organization, ever changing 248 EFFECTIVE INDUSTRIAL REFORM. in the process of growth, but always embodying and work- ing out the same great principles of justice and mercy. And Christ's vision embraced the whole of humanity. His love was not restricted to any one class or race. It embraced every human soul ; it sought to bring to every one the rich bounty and the good favor of God, and to lift every human soul into right organic relations of sovereignty and power with the rest of the race. 3. Again Christ's words to love one's neighbor as ones- self implies the moral obligation to cure those sources of wrong that lie in institutions and laws. In no other way can love so prove its reality and confer such last- ing benefits on mankind. The man who prior to 1861 helped a slave to freedom did an act of kindness; but Abraham Lincoln, who signed the Emancipation Procla- mation, performed a far greater act of love, for he de- stroyed slavery itself and freed a race. To love one's neighbor does not mean merely to exercise a kindly sen- timent toward him, but to renounce every unjust ad- vantage, and to right every wrong. If the Czar of Rus- sia loved his neighbor as himself he would renounce autocracy, that great source of oppression and blood > and proclaim at once a democracy and so give his peo- ple equal sovereignty with himself. And if in America we loved our neighbor as ourself , we would renounce the present industrial system, which is unjust and despotic, and create a new industrial system that would bring justice and equal sovereign power to every class. That spirit of Despotic Power which in various forms and ways seeks to dominate over, and despoil humanity, the RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 249 Bible calls by the significant title of "the Beast." And all who partake of the spirit of domination and are willing to live by taking an unjust advantage over others, are the children of the Beast and have his mark in their fore- heads. It is these who constitute the real " lower classes" of society. While the true nobility, the true higher classes, are those in every rank, found in large numbers among mill-hands and the very poor, who are governed by the spirit of justice and fair play, and seek to bring justice and equal sovereign power to every soul. 4. But some one asks is it not a fact that Jesus con- fined his work to individuals, and is it not true that he refrained from attacking the social wrongs of his time? Where do we hear, for example, a word from his lips against human slavery or the amphitheatre, or that political despotism, which marked his day? In reply to this question the following explanation must be made. Jesus in introducing his work had to begin at the very beginning. And this of necessity consisted merely in going from man to man and im- parting to them his great idea, and often even in less than this. It consisted often merely in discipling men to himself making them pupils, learners at his feet in order that later, when their minds were sufficiently developed, they might then grasp his great idea. Had Christ attempted more than this at that time, he would have jeopardized his whole work. But while Jesus was laying the foundations, he had in mind a vision of all humanity redeemed, a vision of perfected men 250 EFFECTIVE INDUSTRIAL REFORM. and women organized into a perfect society, and so constituting a divine family of man. Since this was Christ's great aim, such should also be the aim of the church. And the church should appreciate the moral grandeur of her mission and feel the moral obligation of achieving it. It follows, therefore, that the church should, like her Lord, bear upon her heart the great burden of the sin and the wrongs of humanity. No human soul should be so insignificant as to escape her love and care. Her vision, like that of her Lord, must embrace the whole of human society. Her aim must be to reach all, to redeem all, to right the wrongs of every class, to cure those sources of wrong that lie in institutions and laws, and to make every soul an equal sovereign factor in the great whole of Human Society. And the church should especially espouse the cause of the oppressed. The Old Testament Preacher said, " So I returned and considered all the oppressions that are done under the sun and behold the tears of such as were oppressed, and they had no comforter: and on the side of their oppressor there was power; but they had no comforter." (Eccl. 4:1.) Now Jesus, himself the friend of the oppressed, de- signed that so long as his church should endure the op- pressed should have in her a friend and a comfortor. God has created all men potentially equal, but all are not equally developed. Many individuals, and cer- tain races are backward in development. And this backwardness is often the fruit of ages of oppression. RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 251 It often results from bad training in childhood, or from poverty caused by a bad system. But though men are actually unequal yet they are potentially equal, and under right conditions, all classes will in .time rise to the same level. But the forces of greed deny this truth and would make the world believe that certain classes are inherently and forever inferior. And they would make this alleged inferiority a plea in justification of oppression. Instead of lifting up the weak, they would make them the ser- vants, the slaves of the strong, and so plunge them into greater weakness and inferiority. But all this is contrary to the spirit of Christ. Hence, it is the divine mission of the church ever to proclaim the inherent equality of man with man. There is a difference in degree of development, but equality of inherent power. And she should say to the forces of oppression. " Hands off. You shall not take advantage of the backward condition of certain classes, to oppress them and plunge them into greater weakness and incapacity." " The weak shall be given a chance to grow strong, and the belated classes to catch up with the rest of the race in every attainment." And she should demand that human society shall be so organized as not to plunge the weak into greater weakness, but to evoke that intellectual strength, that virility of char- acter that exists potentially in every soul and so make all men actually, even as now they are potentially, equal. This should ever be her ideal and aim. And in consecrating herself to this task the church should remember that, like her Master, she has come 252 EFFECTIVE INDUSTRIAL REFORM. not to be ministered unto but to minister and give her life a ransom for the many. If the Church fails in this her grand work, there is no other institution to take .her place. The function of civil government is to maintain law and order in obedience to the will of the people. The work of the public school is to train the intellectual faculties, teach scientific truth, and develop the constructive and creative powers of hand and brain. But the function of the Church is to train the world in Righteousness, to defend the weak, and create a perfect Humanity. If she fails in this her great function, no other institution can be found to take her place. 5. Now the signs of the time indicate that the period has come when the church must realize her great aim and begin this work of social reconstruction. For the world is fast ripening for such reconstruction and re- form. Every where the insistent demand is made that humanity shall at once arise to her best, and that the hideous wrongs, that have filled the ages with woe shall be abolished. And the world is looking to the church for leadership in this great reform. If she fails to give it, she will reap the curses and the contempt of mankind, just as she has again and again in the past when she has espoused the side of oppression and wrong. Farthermore, the church seems to have accomplished all that can be accomplished by work merely in the individual man. And unless she now resolutely ad- vances to the next phase of her work, she will lose the ground already gained. ST. CHARLES ROMAN CATHOLIC CHURCH, PITTSFIELD, MASS. That church which resolutely demands a rigid investigation of present Industrial conditions, with a view to their reformation, hears God's call. RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 253 When ten thousand persons on the last great night of the Chapman meetings in Boston, in 1909, stood and covenanted with one another to do everything in their power toward purifying political and industrial life, they took a step in the right direction. And religious revivals must do this kind of work more and more in the future, if they are to accomplish the aim of Christ. Human progress can never stop when half way up the steep. Only when the summit is reached can we pause and take breath. And the summit to which the church must attain is a renovated and redeemed Society. Assuming, then, that social reconstruction is im- perative, and that the Church must take it up, where is the chief point of attack in America, to-day? The chief point of attack in America is our Indus- trial and Economic System. For the evils of our Indus- trial and Economic system underlie and give support to every other wrong. For first our defective industrial system is the chief cause of poverty and all the ignorance and injustice that accompany it. They are wrong who say that intemperance and lack of thrift are the chief causes of the poverty of the poor. For the great majority of the poor do not drink; they do not waste their money, and they work hard. Of the millions of women in our fac- tories, nearly all are the wives of men who work hard and have sober habits. The women who take in wash- ings or go out to work, are wives of hard working, sober men. Let those who make the foregoing charge do a little investigation and see if I am not stating the exact truth. 254 EFFECTIVE INDUSTRIAL REFORM. And if we should abolish every saloon, establish vocational schools and postal savings banks, the terrible poverty of the poor would continue and increase as now. In Belgium where the present evil system has reached perfection the people have postal savings banks and industrial schools, and they have developed wonderful skill and thrift. And yet they remain unspeakably poor, simply and solely because of the merciless greed of the millionaire Capitalists who despoil them. (See Chap. IV.) And such is the chief cause of poverty in America. And for the people to be more thrifty, will only increase the amount of which they shall be despoiled. Second. Until we reform our Industrial and Econ- omic System the church will fight a losing battle with the slums, with rural degeneracy and with immorality and intemperance. Summing up the essence of Mr. Charles Booth's volumes in "Life and Labour of the Poor of London," a certain person says: "Multitudes of Christian men and women are fighting a losing battle with the sin and indifference of a vast city, and so absorbed in the des- perate strain of conflict as not to perceive that the day is going against them." It is little short of terrible said the late Charles Cuthbert Hall* to hear so earnest and so useful a man as Canon Hensley Henson declare: " We rise from a study of Mr. Booth's gloomy but fascinating volumes with the suspicion, which, might even grow into conviction that Christianity must ap- proach the masses indirectly, by reforming their con- ditions of existence before offering them its spiritual message." RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 255 In these words of Canon Henson we have the key to the situation. Our defective industrial system creates conditions which destroy the home in all the lower ranks of society and this breeds vice, ignorance, intemperance, immorality and the slums. Individuals here and there rise out of the very lowest ranks, but an increasing number sink into the slums and haunts of crime. The terrible fact that our present industrial system tends to eliminate the higher classes by race-suicide, and to call in and perpetuate the lower classes by giving them the job means to fight a losing battle with the saloon, the slums and every form of vice. If we visit one of our paper mills or our cotton or woolen factories, we shall be struck with the large number of women working there. And if our attention is called to it, we will be equally astonished at the number of women among the poor who go out every day to do washing or housework for their wealthier neighbors. Many more take in work which occupies time and strength. It is said that in Belgium one out of every three workers in factory and on the farm is a woman. We are ap- proaching a similar condition in this country. Do we ever think why so many women are thus doing man's work'? It is because of the terrible pressure of an unjust economic system, which pays such low wages to the men that the wives and mothers must become wage earners to support life. Do we think what this means in relation to the 256 EFFECTIVE INDUSTRIAL REFORM. home? It means the destruction of the home among the lower one-third or one-half of human society. It means the creation of a soil in which human character cannot grow. It means the growing up of children on the streets, with no mother's care or uplifting influence surrounding them; it means the creation of idlers and drunkards; it means the creation of the saloons and the slums. And so long as the present industrial system exists, we shall fight a losing battle against these evils. If any clergyman is reading these lines I would like to ask him to put himself in the place of these lowly work- ers among the poor; and I would say to him " Imagine yourself earning an income of only $500 a year or less, and with absolutely no friend, no generous parishioner, to help you out. Imagine your wife compelled to work in the factory or to go out every day and wash for a dollar or a dollar and a half a day. Imagine your chil- dren, from the infant two days old up to the child of ten, left alone at home all day with no one to watch over them. And how much joy would you get out of life, and what hope would you have that your chil- dren would grow up to an intelligent, aspiring and pure manhood and womanhood? Would you not feel it inevitable that some of your boys would grow up to be idlers in the streets, intemperate, and some of them even criminal?" Would you not exclaim, " Children must have a mother's care? How can I expect my children to amount to anything, if they run uncared for in the streets, while their mother is compelled to work in the factory or over her neighbor's wash tub?" RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 257 And yet such are the conditions under which, per- haps one third of the children of the United States grow up. And those conditions are created by our unjust, despotic, Industrial system in which greed sits enthroned. Not until we reform our industrial system, there- fore, can we fight anything but a losing battle against poverty, ignorance, idleness, the slums and the vices of intemperance and immorality. But let us once adopt the system unfolded in this book and thereby release these wives and mothers from work in the factory. Let them go where their hearts are, and where they of right ought to be into their own homes with their own children; and all these evil conditions will be changed. These mothers in the factory love their children as truly as any other mothers. And they will bring them up as carefully, if we but give them the chance. The adoption of our plan will give them this chance and so change the face of society. Again it is the Industrial and Economic Problem which lies behind and controls the problem of Immigra- tion, one of the most vital problems affecting the life and civilization of America. For the forces promoting Immigration are at present the forces of greed which care neither for the good of the immigrant, the rights of the people already here nor the welfare of the country. And so long as our industrial system is what it is, we can not touch the problem. But let us once become masters of the industrial situation, let us once adopt the system proposed in this book and then we shall be masters of the problem of Immigration also. 258 EFFECTIVE INDUSTRIAL REFORM. The Industrial and Economic Problem lies behind the important problems of the lodging house and its out- growth the house of prostitution. The Industrial and Economic problem lies also be- hind the problem of political corruption. For so long as a despotic oligarchy rules the industrial world, and so long as it is the interest of that oligarchy to put cor- rupt men into office to guard their corrupt interests, the people will be helpless. Preachers may preach and reforms may agitate and at times a few bad men may be brought to trial as in St. Louis, in 1906 and San Francisco in 1908. But after each reform corruption will inevitably return, and we shall see no appreciable lessening of the evil. But let us once adopt the plan unfolded in this book and let us become master's of the Industrial system and we shall be in control of the political situation also, and our cities shall be purified. The Industrial and Economic problem lies behind the religious problem. The condition of religion and religious institutions in America is simply chaotic, and we are descending with appalling rapidity to a lower and still lower level. Sooner or later the religious prob- lems must be faced by the most intelligent men of all religious beliefs. As I have said, our religion and relig- ious institutions determine the peoples ideals and mould human character for good or for evil. And these simply cannot be ignored. I cannot discuss this question here; but it is a simple fact that so long as the present industrial system en- dures, with its destructive effect upon all Christian ideals, RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 259 with its perpetual elimination of the best and calling in and perpetuation of the worst elements of society, there is no hope of religious reform and reconstruction in America. Our religious condition will only grow more and more chaotic and inefficient and positively evil. Finally it is the Industrial and Economic problem that lies behind the great problem of the moral degen- eration of the times. There is a spirit abroad in society to-day which repudiates all moral obligation and en- thrones the law of one's own will or pleasure. This evil has its sources in the Industrial and Commercial world. For human life cannot permanently enthrone moral obligation in one realm and repudiate it in an- other. The whole of human life must become either all moral or all immoral. " Ye cannot serve God and Mammon." Now in the industrial world, we have repudiated the supremacy of moral obligation. We justify everything that will win the almighty dollar. When a certain trust was on trial and it was proven that its officials had corrupted legislatures in its behalf, the judge asked the official of the trust, if he thought such conduct to be justifiable. The official replied that he did. And yet at that very time that man was in good standing in a Christian church and superin- tendant in its Sunday School. But we cannot repudiate conscience, patriotism and all moral obligation in one realm without repudiat- ing them in all others also. And this is the tend- ency in the United States today. Men seem to have forgotten how to take any moral or religious obligation seriously. And whatever one's ambition or pleasure, or 260 EFFECTIVE INDUSTRIAL REFORM. even one's envy or hate may demand, that is made the law. And this repudiation of moral and religious ob- ligation is sweeping all through society, and even through the church of God. And this evil tendency has its source and center in our immoral industrial system which has repudiated all justice, all patriotism and all religion and subor- dinated everything to the greed of gain. Now the only way by which to counteract this evil tendency is to go right back to its source and destroy it there. The people must dethrone the power of a conscienceless, despotic oligarchy and, by means of some such plan as I have unfolded in this book, they must assume supreme control over their whole industrial life. They must enthrone the law of justice and moral obligation there. Doing this, we shall check this evil tendency in its very source. And again conscience, justice, right will become supreme through- out the whole of human life. We see, then, that it is true that this problem of Industrial and economic reconstruction lies, indeed, behind every other problem. I am aware that we shall never have a renovated America until we shall reform the drink habits of the people, and above all, reform the religious life and institutions of America. But these re- forms cannot be achieved so long as the present indus- trial system endures. To reform our industrial and economic system, there- fore, is supremely important and should command the foremost attention of the church and all good men. Nay, more, in view of the appalling conditions of in- a gp H ^ o H m B 5 o s x Bj P c 7 0^ O J H < s H ci 3 1 " I I RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 261 justice that prevail, we may ask whether the church or any Christian man can refuse to enter upon industrial reform and escape guilt in the sight of God? The merciful Christ on whose heart was borne the burden of the world's sorrows, affirmed that not only the man who caused the wrong but he who selfishly refused to rectify it, should be condemned in the day of judgment. And by his word, embodying, as it does, the Voice of Eternal Justice, we must stand or fall. "For we must all appear before the judgment seat of Christ." 6. Assuming that the church appreciates the moral obligation resting upon her and that she hears the voice of God calling her to this great reform, what steps should she take? First Step to Investigate the Facts in the Case. The first step of the Church should be to meet and, in conference assembled, with resolute determination, appoint experts to get the facts in the case. These 'experts should be asked to go through all our shops and factories and learn the exact wages paid to the men from the lowest to the highest; the num- ber of women especially wives and mothers at work, the condition of the homes from which these mothers are taken, what the children are doing during the day while the mother is absent, in short, they should learn all the facts as to the justice or injustice of our present system and its effect on every class. And these experts should study the lives of the rich and see whether 262 EFFECTIVE INDUSTRIAL REFORM. they are any more worthy of leisure and luxury than their humbler neighbors whose lives are filled with toil. When we thus have gotten at the facts let the church study them and absorb them until they become a vital force in the mind. This is the first step. The Second Step, to Find the Right Method of Reform. When the church has thus possessed herself of the facts, the next step is, relying upon the promise that "if we ask we shall receive and if we seek we shall find," to seek for the solution of the great problem of In- dustrial and Economic reform. And if we seek for it as for hidden treasures, the right solution will surely come. The trouble with the church to-day is its indif- ference, its lack of courage, its lack of faith. In seeking for the true solution, the church should call before her councils, expert men. She should give her ear also to- the suggestions of humbler minds, to those even outside the church. The best reformers have often come from men of obscurity. Doing this, in a short time, the right solu- tion of the problem will come. Third Step Agitation. Having obtained the facts and found the solution the next step is for earnest men to agitate and continue to agitate until the new system shall be adopted and the reform shall be introduced. And here it should be said that the church must guarantee to each minister of the Gospel liberty of speech in this matter. I do not say that ministers should RESPONSIBILITY OF CHURCH FOR INDUSTRIAL REFORM. 263 preach theories in the pulpit, but they should be per- mitted to advocate industrial reconstruction outside of the pulpit without prejudice or loss of position. And the persistent attempt on the part of a despotic plutoc- racy to repress every minister who ventures to declare sympathy with reform should be rebuked by the church and all free American citizens with no uncertain sound. Such is the method of procedure to be adopted, by the church or any part of the church or any other body or group of men who would reform the present indus- trial and economic system. 7. In conclusion, I would appeal to all lovers of human- ity, to all lovers of justice and fair-play, to all patriots, to all Christians, and all believers in every religion whatsoever, and say " Will you not join heart and soul in the achievement of this great Reform?" And to the strong men in the industrial and commercial world, even to the men who profit by the present evil system, I would say, " Will you not be the -first to lead in this great Reform? Is it not true that the real gentleman is the man who, when he learns that he has inadvertently trespassed on the rights of another, is glad to be informed of the wrong, and is quick to apologize and rectify the wrong? And is not he the honest man who, when he learns that his line fence stands on his neighbors land, thanks the man who in- forms him and is the first to ask that the fence be moved?" Will not you who stand at the head of our vast industrial system show the same nobility of heart and 264 EFFECTIVE INDUSTRIAL REFORM. mind? Assuming that it be true that your profits spring from a system that is unjust, a system that annihilates home-life, deprives little children of a mother's care and destroys throughout society the spirit of moral obligation, will you not prove your nobility of mind by being among the first to call for a search- ing investigation of the facts, and demand a reform? Can you do less than this and escape condemnation in the presence of that Eternal Justice, before whom all must stand or fall ? And I would appeal to the women among the wealthy classes and say to them, " Will you not prove your nobility of mind by investigating these things? And when you find that your riches are largely, as they surely are, the product of the unjust toil of your humbler sisters, will you not too be among the first to say "Let this evil system be changed?" And will you not offer your wealth to bring in a reform that will establish justice and equal opportunity throughout the world? Can you do less than this and escape guilt for the thousands of little children that perish every year through industrial and commercial wrong? Can you do less and hope to meet your Redeemer face to face in Heaven? Christian people often sing " I will go where you want me to go, Dear Lord." Will you go forth to the work of sociological Reform until the last refuge of injustice and wrong is swept away? MRS. RUSSELL SAGE. Who gave ten millions in the Russell Sage Foundation to in- vestigate the causes of poverty. That man only is truly converted to God who so loves his neighbor that he will resolutely seek to investigate social conditions and right every wrong. MRS. WILLIAM K. VANDERBILT, SR. Who gave one million dollars in a Model Tennement enterprise for the cure of tuberculosis among the poor in New York City. Will not some lover of humanity give $20,000 or more to pro- mote the reform unfolded in this book and thereby strike at the root of poverty and disease? CHAPTER XVII. A FINAL WORD OF ENCOURAGEMENT AND WARNING. I cannot close this book without a word of encour- agement and warning to the friends of reform. First, a word of warning. While believing firmly in the ultimate coming of re- form, the people must be on their guard against measures that will be utterly fruitless, and prove an obstacle to true reform. One such measure, is that of government pensions. I refer, of course to industrial pensions. Many people seem to think that to adopt a general pension system, is at least, a step toward the cure of present wrongs. And already certain cities pension their policeman and teachers. And Mr. Taft has recommended the pension- ing of other Government employees. But I am confident that such a system will effect no cure of present evils either under our present indus- trial system or when that system is reformed. It will work only harm. In the first place, the pension system will not cure present evils so long as the present industrial system exists. For the gift of a pension will serve as an excuse to the present oligarchy to decrease wages and increase prices. For they will argue, "With this pension com- ing to the working man, he does not need as large wages as before, and he can afford to pay higher prices." And the gift of a pension will be followed very speedily by a decrease in wages and a rise in prices. And even 266 EFFECTIVE INDUSTRIAL REFORM. if the present industrial despotism should be overthrown the pension system would still prove disastrous. For the pension system appeals not to the spirit of self-help but to the predaceous and parasitic spirit. It awakens the hope of living without effort, by loading one's self onto the government. And this prospect is very seductive to many minds. The result will be that the moment that any class shall be placed on the pen- sion list, its members will be converted into a semi- parasitic and semi-robber class making ever increasing demands on the public treasury. They will take no interest in industrial reform. But they will form them- selves into an organization for the ostensible purpose of caring for their members, but in reality to protect and ever increase this special privilege of drawing money from the public treasury. And no person will dare lift his voice against the system, or against the frauds committed under its protection. For the vast pension organization will silently mark every politician, every statesman, and every preacher who dares to discuss even in the fairest spirit their pension privileges. Besides, the pension system destroys individual responsibility for one's self; it is destructive of all independence of character and energy of mind. Let a man once be placed upon the free pension system, and he ceases to be an energetic and independent factor in our national life. The only way to develop strength of character, is to make each man responsible for himself, and to stand or fall by his own efforts. What we want in our industrial system is equal and fair opportunity for each soul. We must make conditions such that A FINAL WORD OF ENCOURAGEMENT AND WARNING. 267 for every persevering man, there is a sure reward. But having done this, we must throw each man onto his own feet and make each responsible for himself. He who wins riches, by his own effort will not be ruined by them. But a small pension, coming as a result of no effort of one's own, makes the pensioner inactive, unaspiring, parasitic. But there is another kind of a pension system which is rapidly and yet silently introducing itself, against which the people should be most seriously warned. I refer to the pensioning of employees by the Corporations. It is not generally known, perhaps, that the great corporations are rapidly adopting the policy of pension- ing their employees. Standard Oil has long since adopted this policy. Said W. R. King, general sales agent for the Standard Oil company of New York, to special Examiner Franklin Ferriss, in the government's suit again Standard Oil company in 1908, "When a man is 60 years old and has been twenty years in our employ, he may retire and for ten years get half of his average salary for his last ten years service. After that he gets 25% of his average salary for the rest of his life." (New York Times May 28, 1908.) The Railroads are adopting the same policy. The Grand Trunk railroad which has its eastern terminus in Portland Maine, put into effect Jan. 1st 1908, a pen- sion system embracing every employee in the United States and Canada. The railroad finances the whole scheme, not levying any assessment on the employees. " Under the new rule a compulsory retiring age is fixed 268 EFFECTIVE INDUSTRIAL REFORM. at 65, while any employee who has served the com- pany 15 years or more will be entitled to a pension on a graduated scale. A minimum pension has been fixed at $200 while there is no maximum." " In addition to this, provision has been made for employees who have been disabled in the company's service and also for men dismissed without cause under 65, but have not served over 15 years." Several railroads and other corporations have adopted this policy of pensioning their employees. This policy is wrong and perilous in the extreme. First, the system is unjust. If these men do not earn the amount of their pensions, they ought not receive it. If they do, then the amount should be paid to them in the form of wages as they go along. Besides, where will all this money come from? It is either taken in the form of an indirect tax out of the laboring men, or, as an indirect tax, out of the public. For the railroad will never take it out of its already bloated earnings. It follows, therefore, that either the laboring men or the public will be taxed without their consent for a measure, of which they may entirely disapprove. Again. The measure is destructive of all independ- ence of character. For here is a vast corporation pre- suming to take care of many hundreds of thousands of men, to provide for their future, in part at least, without asking their consent, and without requiring them to exercise any forethought in the matter. They are thus made, without their consent, the wards of a private corporation as if they were mere children or slaves incapable of caring for themselves. What is that but A FINAL WORD OF ENCOURAGEMENT AND WARNING. 269 paternalism of the most vicious kind? What policy can be more destructive of self-reliance and of all independence of character? Again this system will not, in the end, increase at all, the aggregate earnings of labor. For the corpora- tion will sooner or later make the gift of the pension a plea for a reduction of wages. And it will open the way to favoritism and special privilege. Large pensions will be given to their own favorites and relatives. But very small pensions will be given to the common working people. For the corporation will have despotic power in the matter. But the greatest evil connected with this system is that while having the appearance of benevolence, it is only a new chain with which to enslave the people. For take the case of Standard Oil. Here is a man receiving a salary say, of $1200 a year. At the age of 60 he retires on a pension of $600 a year for ten years, and of $300 a year for the rest of his life, providing he is svbservient to the corporation. Now the hope of such a pension will act not only as a bribe, but it will ultimately serve as a chain to bind the man body and soul in allegiance to the corporation. The corporation will become, like the mediaeval baron, his overlord, to whom he will owe supreme allegiance. And when the interests of the country and the cor- poration conflict, the pensioner will vote for the cor- poration every time. Men who get their bread and but- ter from the corporation and are looking for a pension from it will not vote against it, however corrupt the corporation may be. The corporation will be to them 270 EFFECTIVE INDUSTRIAL REFORM. their country, the authority to whom they will owe supreme allegiance. And when the people are seeking to liberate themselves from the grasp of the corporation, these pensioners, and all others hoping for a pension, will oppose every effort at reform, will nullify every expression of the people's will, and help drag all down into a common slavery to despotic power. The people have become familiar with the power of the railroads through the distribution of free passes and other means. The Literary Digest July 7th, 1907, abridging Mr. Sullivan's article in Collier's Weekly says, " A recently carefully considered statement signed by the Episcopal bishop of the State (New Hampshire) , an ex-judge, of the Supreme Court, and a professor of Dartmouth College, asserts that the State (New Hamp- shire), is held in a form "of slavery." By means of passes, Mr. Sullivan states, the newspapers and the lawyers of the State are "retained," in the interests of the Boston and Maine. This evil was so great that a law was passed by Congress forbidding the giving of pass and reduced rates to any special class. But it is to be doubted whether the evil has been at all abated. Under the form of a contract for services rendered, the evil continues as great as before. Now all recognize the evil of rebates and free passes. And we all know how by special favors, it is still pos- sible for great corporations and political leaders to make certain influential classes subservient to their interests. Now this pensioning of employees by the corpora- tions is a still greater evil. A FINAL WORD OF ENCOURAGEMENT AND WARNING. 271 If there should be a law against rebates and passes, there should be, even more, a strict law against any private corporation's pensioning its employees. If wages are not high enough, let them be raised. But do not degrade and enslave our laboring men and de- stroy our liberties, by pensions. This policy of the corporations reveals the astute- ness of their cunning and the imperative demand that we shall speedily adopt some wise form of public owner- ship that the people may be supreme and the pernicious power of the despotic corporation be overthrown root and branch. To conclude. Let the people be on their guard against every measure which increases the power of plutocracy and destroys the independence of the voter. Let the people have faith in themselves, and in their power to take care of themselves, and let them demand, not charity nor any paternal system which is disguised slavery, but the sovereign power to own and control their own industries and so take care of themselves. Organized self-help on the part of the whole people con- stituted by law into a single vast Business Corporation, owned and controlled by themselves, must be the watchward of the new order. 2. Finally, let no one feel discouraged at the greatness of the task set before us. Our cause is just and justice though delayed, must prevail. If plutocracy has the advantage of wealth and position, remember that every- where the mighty forces of a new ideal and a new religious faith are laying hold of the world. Witness the 272 EFFECTIVE INDUSTRIAL REFORM. uprising of the people in Turkey and other lands. And the whole civilized world is awaking and asking Why should the present industrial regime continue when we can have something far better at any time that we demand it? America scorns to use the old wooden stick to plow the earth when she can have the modern steel-pointed plow. And she will soon scorn to retain the present inadequate, unjust industrial system, when she can have a new well-organized plan, that will bring wealth and comfort, with justice to all. Then there is the rising tide of modern democracy. The people are coming to know their power. They have long been hoodwinked by cunning men. They have been made to believe that it was not safe to trust in themselves. They have been depressed and trodden under foot. But they are coming to know their power to demand their rights and their ability to manage their own affairs. They already possess the ballot. And some fine day they shall awake and sweep the whole intoler- able system of injustice, fraud and arrogant power, forever away. Furthermore, the people are coming to believe everywhere in organized co-operation, directed by the sovereign will of the people. And this spirit is destined to sweep away the present system of individ- ualistic disorder and strife, and bring in a new heaven and a new earth. It is, therefore, the part of all lovers of justice, to ag- itate and still to agitate until the people arise and come into their own. What the people need is faith, a belief that no obstacles can stand in the way of Eternal Jus- tice and the sovereign will of the people. Said the TOWN HALL. In America, the people are supreme. When the people declare, by majority vote, for Industrial reform, Industrial reform will come and it will prove a success. A FINAL WORD OF ENCOURAGEMENT AND WARNING. 273 Teacher of Galilee, "// ye have faith and doubt not, and shall say to this mountain be thou removed and be thou cast into the sea, IT SHALL BE DONE." THE END. APPENDIXES. APPENDIX I. THE FORCES PROMOTING IMMIGRATION (See p. 119). From "Poverty," p. 273, BY ROBERT HUNTER. "It should be realized that the forces promoting immigration are selfish forces caring neither for the welfare of the country nor for the welfare of the immi- grant. Whenever a bill comes before Congress to re- strict immigration, every effort is made by these private interests to prevent its passage. A few years ago the following letter was sent out by a general agent of the North German Lloyd Steamship Company to their many agencies in all parts of this country: 'Immigration bill comes up in the House Wednes- day. Wire your congressman, our expense, protesting against proposed exclusion and requesting bill be de- feated, informing him that vote in favor means defeat next election. (Signed) H. CLAUSSENIUS & Co.' "Similar intimidating telegrams were sent to every newspaper in which the steamship companies adver- tised. Official testimony also shows that bribery in the form of passes, given to the editors and proprietors of newspapers, has helped to create newspaper opposi- tion to restrictive legislation. "The class of large employers most active in pre- venting the restriction of immigration have usually been those paying the smallest wages. A representa- tive of the Southern Pacific Railroad, appearing before 276 APPENDIXES. the Committee of the United States Senate on Immi- gration in 1902, for the purpose of opposing restriction, claimed that the railroad was unable to get sufficient workmen. The Commissioner General of Immigration, knowing well the wages and conditions of railway workmen, said, "Let it pay living wages and it will have laborers enough." The wages paid by the South- ern Pacific, as shown before the same committee, were from $1.16 to $1.39 a day, or, in other terms, from $350 to $425 a year. Those employers who use every means, fair or foul, to obtain an over supply of laborers, and, in this way, to force wages down to the lowest possible limit, should be classed among the dangerous elements of any country. "In order to keep wages down and prevent the growth of 'trade unions, many employers advocate un- limited immigration,' and the mixing of men of dif- ferent nationalities. Where there is an over-supply of laborers of many different nationalities, it is almost impossible to organize the workers until suffering makes the men realize the necessity of union In this way the selfish interests create serious social problems by pro- moting excessive immigration." APPENDIX II. WAGES OF IMMIGRANT LABOR (See p. 120) From "Poverty," p. 277-8, By ROBERT HUNTER. "During the year of the investigation (made by the Department of Labor at Washington, in the investi- gation of the Italians in Chicago) the Italian work- man was actually employed on an average but little more than four months out of the twelve. The average wage of the Italian workman was less than $6 a week, and, in the most unskilled trades, it fell in one class to $5, and in another as low as $4.37. These wages and these long months of unwilling idleness, mean wretched poverty. They mean starvation, insanity, and tuberculosis. The local doctor will tell that there is great prevalence of rickets among the Italian children, a disease due to malnutrition; the settlement worker will tell you that the child is taken at the earliest hour from the school and sent to work; the woman is taken from her children and set to work; the neglected children are left to the vice and crime taught by the street gang; the policeman will tell you, if you ask, that the Italians of the poorest class obtain their food to a large extent from the garbage boxes. He will also tell you that the fighting and the drunkenness result naturally from unwilling idleness." "The wages given above do not, however, represent the extent of their poverty. The padrone must get his commissions and profits out of these poverty- stricken people. By organization under a padrone, for the padrone's benefit, the men work for wages, the amount of which they often do not know; but when 278 EFFECTIVE INDUSTRIAL REFORM. there is work, they get it, because the sort of slavery which they are willing to suffer and the standard of life which they are willing to accept is most satisfac- tory to those contractors who desire to get labor at the cheapest possible rates. The padrone is a parasite. He lives and grows rich by fleecing ignorant immigrants from his own country. He helped the steamship com- panies to stimulate immigration. He gets his commis- sion for bringing tenants to a vile tenement. He farms out laborers to railroad and other employers. When they are working he supplies them with food at exces- sive prices. It is said that he is sometimes the owner of the Italians, and that they are actually his slaves." "These conditions of poverty are not peculiar to the Italians." APPENDIX III. DISTRIBUTION OF WEALTH UNDER OUR PLAN. (See p. 254.) Total wealth of the country in 1908, $118,000. millions. " number of voters, 15.5 Voters under 45 years of age, 7.5 millions " over " " " " 7.5 " Aggregate wealth to be distributed to voters under 45 years of age, $39,333. Aggregate wealth to be distributed to voters over 45 years of age, $78,666. Average wealth to be distributed to each voter or family in which the father is 45 years of age or over, $10,000. Average amount to be invested by each man for 25 years is $400. If a young man would invest this sum when he is twenty-one and put the same amount in every year until 45 years were reached he would have at that age just $10,000 invested in his country's industries. And this investment would be perfectly safe. It would be placed where moth could not corrupt nor thieves break through and steal; for the wealth of the whole country would be hihind it. And if on the capital of the country we could earn a dividend of 10%, then the first dividend of the young investor would be just $40. But when he had invested his full $10,000 his dividends would be $1000 a year. With the rapid increase of the wealth of the country these amounts would also rapidly increase. Age NAMES OF INVESTORS Max. Quota 30 29 28 27 26 25 24 23 22 21 4000 3600 3200 2800 2400 2000 1600 1200 800 $400 A B CARD CATALOGUE OF INVESTORS APPENDIX IV. METHOD OF RECORDING INVESTORS IN THE ORDER OF THEIR AGES, BY THE CARD-CATALOGUE SYSTEM. On the opposite page we have a diagram illustrating a method of recording the names of the citizens of a community in the order of their several ages, and the amounts invested, according to our plan. The diagram embraces places for the names of persons from the age of 21 to that of 30. Of course, we shall have places for persons of all ages who are allowed to invest. The figures at the left indicate the age of the investor. The figures on the right indicate the maximum amount of stock that each person of a given age is allowed to buy and own. Thus the young man 21 years of age would be allowed to invest $400 in the stock- capital of his country's industries; when he is 22, he could invest $400 more, or, $800 in all. When he arrives at 30 years, he could invest $4000. The spaces within the diagram indicate where the cards bearing the names of the several investors are to be placed. The left hand spaces are for those who have invested less than their full quota; the right hand spaces, for those who have invested their full amount. Thus a young man, 21 years of age, who has invested less than $400, would be placed in space A. The young man of 21 who has invested the full quota of $400 would be placed in space B. By arranging the cards alphabetically, the name of each citizen could be quickly found. As each man passed from one year to another his 282 EFFECTIVE INDUSTRIAL REFORM. card would, of course, be moved to the space next above. As new men came of age, their names and the amounts they invested would be recorded on cards and placed in the space marked 21. When men die, their names would be taken out of the case and their capital paid to their heirs. As soon as a man should invest any capital, it would begin earning dividends. Hence, if dividends were 10%, the young man who had invested his $400, would, at the close of his 21st year, receive a dividend of $40. When 30 years of age, his dividend would be $400. Of course, as the aggregate wealth of the country increased, the maximum quota, which each should be allowed to invest, would be correspondingly increased Farthermore, each man will be allowed and encour- aged to deposit his surplus earnings beyond his regular investments, in the public Bank, where it will draw a dividend to the full earnings of the Bank. FINAL NOTE. Groups of Utilities to be owned by the people, when organized into a stock-corporation after the plan unfolded in this book. I. Electric Street Railways, Lighting Plants, Telephones, Water-works. II. Railways. III. Coal mines. Iron ore and other Metals, Oil, Forests. IV. Steel Plants. V. Water Power sites, and All Power-plants. VI. Plants Manufacturing Electric Motors, Dynamos and so forth. VII. Beef Trust and other Food Plants. VIII. Manufacture of Farm Machinery, Household Fur- niture and so forth. IX. Textiles, Boots and Shoes, Paper. X. All Stores. XI. All Real Estate. XII. Ultimately I would have the whole plant of Civilization owned and capitalized by the whole people, constituted into a single- vast stock-corporation to that end. INDEX American Government pure Political Social- ism 170 American School System pure Educational So- cialism 171 Anarchistic Character of present industrial Sys- tem 3 B Banks Dividends earned by some 34 A Public Bank an essen- tial feature of our Plan .....133-134 Bemis Edward, on special advantages demanded by Busi- ness Promoters 10, 11 Beef Trust, The 33 Business Corporation, The, no new thing.. 13 Its vast power 14-17 Is Legitimate when properly controlled 83 Has come to stay.. 83 The People must be the Corporation 83 Church, The and In- dustrial Reform,Chap. XVI _ 245 The Church has not grasped the large- ness of its mission.. 245 Aim of Christ to transform both the In- dividual and Society 245 Church, The and Industrial Reform, ,(cont.) The Law to Love one's Neighbor implies the obligation of social reform 248 The World looking to the Church for so- cial reform 252 What the Church ought to do 261 Conscience drugged by present System 6 Concentration of Wealth 52-59 Competition, most per- nicious under present System 8 Will be transform- ed under the new Plan 110 Corporation, the Irre- sponsible Its Rise, Chap. II, 12 Its Might, Chap. Ill 18 Its Evil Fruit, Chap. IV 43 D Despotic Power, the in- evitable product of present Industrial System 12 Despotism, The New, Its Rise, Chap. II 12 Its Might, Chap. Ill .. 18 Dictates Wages and Salaries 18-26 Dictates who shall work and who not.... 26 Dictates who shall go into Business 27-29 Fixes all Prices.- . 29-31 INDEX. Despotism, The New (cont.) Determines rise and fall of Stocks 31ff Holds all Savings and Investments of the People at its mercy 31ff Reaps enormous dividends on actual capital 32 Controls all Profit- able sources of Invest- ment 36 Despoils Investors of Dividends and Cap- ital 38 Power of Graft 40 Monopolize all In- dustries 40 Increasing in Power. 41 Despotism, the New, Its Evil Fruit, Ch. IV 43 Annihilates Justice in Relation to Wages.. 43-47 to Prices 49 to Dividends 50 Concentrates a 1 1 wealth in few hands 52-59 Destroys efficiency of Production 62-67 Destructive of American Civilization 67-76 Despotism, the New, Will be overthrown by new Plan 141 Dividends My Plan will pay dividends guar- anteeing 5% and as much more as plant can earn 95-99 Dividends on actual capital very great 32-36 E Evils of Present Indus- trial System, see Despotism, the New. Farmer, the American, and Industrial Reform Chap. XIV 203 Is more wronged than Labor 204-207 Not Possible to form Farmer's Union 208 Farmers must ad- vocate reform of this Book ... 209-212; G 53. Great Fortunes, list of .. Government Control of Trusts will not avail.. Government Ownership will not avail .. 78-81 77 Immigration , Forces Promoting it Appen- pendix I. Indictments, Two, Against Present Sys- tem 1 Industrial Reform. Im perative Demand for.. 76, How Achieved, See Method of Indus- trial Reform Investments No safety in, under present Sys- tem 50ff But perfectly safe under the new Plan. Justice Wrongly sup- posed to be Self-act- ing under present Sys- tem . 5. Dethroned in pres- ent System 3. INDEX. Justice (cont) Enthroned under the new System 145ff Labor cannot do its best under present System 63 Will do its best un- der new Plan 153 Labor Union and In- dustrial Reform, Chap XIII 196 It has done good .... 196 But cannot remedy present evils 197-202 Listing of Investors un- der new Plan, Appen- dix IV M Marxian Scheme 171-177 Marxian Scheme Com- munistic Capitalism, not true Socialism .... 193 Method of Effective Re- form, Part II 77 Model of Plan 77-78 Fundamental Feat- uresChap. VI, VII, VIII, IX. (I) Community Organi- zed into Business Cor- poration to own Plant 89-91 (II) Capital Subscribed by people Individually 91-95 (III) Pay dividends Government guarantee 5% Dividend 95-99 (IV) Gradually Acquire Ownership of every Profitable Plant 99-104 (V) Wages and Salaries Fixed by Commission 109-1 10 (VI) Directors Elected by Investors 110-111 PAGE Model of Plan (cont) (VII) Capital Converted into an Annuity or Paid to Heirs in Cash 11 1-1 12 (VIII) New Generation to Subscribe as they Come of Age 112 (IX) Laws to Protect Equal Opportunity to Invest 113-128 (X) Education to be Moral, Vocational and Economic 128-130 (XI) Shall Perform every Economic Function... .130-1'31 (XII) The new Plan to be Embodied in Con- stitutional Law 133-135 Summation of Fun- damental Features 135-137 Pensions, Industrial, ....157-159 Baleful Influence of Government Industrial Pensions 265-267 Corporation Pen- sions 267-271 Prices not fixed by Justice in Present System but by relative Power to Demand 7 fixed by Irresponsi- ble Corporation 29 Production, not most efficient under present System 62 Made most 'efficient by new Plan..'. 152-154 Public Ownership Groups of Utilities to be acquired by the People 282 (1) Electric Street Rail- ways, Lighting Plants, Telephones 139 INDEX. Public Ownership (cont.) (2) Railroads 140 (3) Coal Mines, Iron ore, Oil, Forests n. opp. 96 (4) Steel Plants 140 (5) Water Power Sites n.opp. 1 19 (6) Electric Motors and Machinery Plants ... .n. fol. 127 (7) Beef Trust and other Food Plants n. opp. 134 (8) Farming Machinery, Household Furniture and so forth cut opp. 135 (9) Textiles, Boots and Shoes, Paper cut opp. 140 (10) Stores 2d cut fol. 140 (11) Land, Real Estate.. 211 Questions and Answers, Chap. XV 213 Are people Compe- tent for new Plan? 213-216 Why make Subscrip- tion Compulsory? 216-217 Will People be will- ing to Adopt? 217-218 Will it be Right? ..218-221 Is new Plan Consti- tutional? 221-223 Is not Compulsory co-operation un-Ameri- can ? 223-227 Worthless and indo- lent Classes in new Plan 227-229 Individual Initiative in new Plan? 229-232 Daring Enterprise in new Plan? * 232-238 Must we not rely on Gospel ? 238-240 Is not new Plan a radical and daring thing? 240-241 Questions and Answers (cont.J How Introduce the Reform? 241 How Long to Intro- duce it ? 241-244 R Race-Suicide , Produced by present System .... 68-70 Reform, Industrial, See Method of Indus- trial Reform. Results from adoption of new Plan, Part III 141 Overthrow Despotic Power 141-143 Abolish baleful Com- petition and Preda- ceous Individualism.... 145 Bring Justice in Wages and Opportuni- ty to Work 145-149 Justice in Prices 9 Bring equal Oppor- tunity to Invest and equal dividends 150 Bring Efficiency of production and great increase of Wealth ....152-157 Pensions not be needed 157-159 Perfect Individual and Social Characterl59-165 Reform other realms adopting same Plan.... 165-167 Richest men, Ten, in America 53 Robbery, Organized, justified bv present System .'. 7-10 Salaries, high, of officials in Corporations 19ff INDEX. PAGE Standard Oil, Divi- dends in 1907 .. 32 PAGE W Price of Stocks in 1908 35 Wages and Salaries, Fixed by Irresponsible Stocks in our Plan, no buying and selling 113 Stock Yards,Chicago cut opp 208 Socialism, What it is, Fundamental principl. 168-1 71 Marxian Socialism de- fined . ..171-177 Wages to the Immigrant Appendix III. Withdrawal of Capital in our Plan, allowed 112-117 Wealth, greatly in- creased under the new Plan 156157 Defects of 177-191 True Socialistic Method 191-195 Distribution under the new Plan. Appen- dix III T Trusts in United States 16 Waste of Wealth in Dresent System ... 59-62 11^353 UC SOUTHERN REGIONAL UBRARYFACILIT CENTRAL UNIVERSITY LIBRARY University of California, San Diego UMI C UUC JUL2E 1976 JUN23 RECD CI39 UCSD Libr.