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GIFT OF 
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SCIENTiriC COMMERCIAL 
 STANDARDS 
 
 A LECTURE 
 
 DELIVERED BEEORE THE SOUTHERN 
 
 ACADEMY OF SCIENCES, SEPT. 7, 1903 
 
 ALVIN H. LOW 
 TTTTORNCY-AT-LAW AND AUTHOR 
 
 or 
 
 " riashcs rrom The Anvil of Thought" 
 " Common Sense on Money," etc., Etc. 
 

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Scientific Commercial 
 Standards 
 
 Mr. President : , Ladies and Gentlemen : 
 
 A standard measure, like a standard of morals, is meas- 
 ured by itself "because there is none greater. " 
 
 The difficulty of finding anything on earth or in the uni- 
 verse for that matter, that is so fixed and certain in its prop- 
 erties that it can be selected and established as an unvariable 
 standard of length, of weight or of value, has baffled the skill 
 of philosophers and scientists for all time past, and the war 
 of the standards is as heated and merciless today as ever before. 
 The proof of this is found in the accumulated literature on 
 weights an measures, in our public and private libraries, and in 
 the laws of the various states and nations of the world. 
 
 I doubt if the great mass of mankind, even those actively 
 engaged in trade and commerce, realize the stupendous im- 
 portance of the subject the laws governing it, like the law of 
 gravitation, acting so silently and often played with so stealth- 
 fully by those whose interests are not alw/ays identical with 
 the public good, that all may be affected powerfully without 
 perceiving the real cause of disturbance. 
 
 The importance of this subject was recognized by the 
 f ramers of our National Constitution ; for there in paragraph 5 
 of section 8 of article 1 of that great charter of our liberties 
 it is provided that "The Congress shall have power to coin 
 money, regulate the value thereof and of foreign coin and fix 
 the standard of weights and measures." 
 
 The importance of fixed standards and the necessity for 
 rigid conformity to them, is pointed out and emphasized in our 
 earliest literature. Cheating in weights and measures was for- 
 bidden among the first laws given to the children of Israel 
 while yet roaming in the wildernesss, and before reaching the 
 promised land where trade and commerce were to become na- 
 tional characteristics. 
 
 "Thou shalt not have in thy bag divers weights, a great 
 and a small. Thou shalt not have in thine house divers meas- 
 
 380043 
 
** > * 1 * **^ > A* * " * V * > 
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 ures, a great and a small. But thou shalt have a perfect and 
 just weight, a perfect and a just measure shalt thou have." 
 
 What matter now what was the origin of their cubit or of 
 their ephah ? The length of the human foot as a unit of length 
 was, I suppose, of later adoption and is an example of the uncer- 
 tainty of a standard since no two human feet are of exactly 
 the same length and the measure by that name could at most 
 only approximate the average length of human feet; to ascer- 
 tain which to absolute certainty is utterly impossible. However, 
 the origin of this measure is attributed to Greece, and is sup- 
 posed to have been the exact length of the foot of the god 
 Hercules. The purely scientific origin or equivalent of this 
 measure, therefore, I cheerfully leave for others to find. The 
 Olympic foot was, according to the best authorities, equivalent 
 to 12.14 English inches. Not less than 292 variations have 
 existed at various times in the use of this standard. 
 
 But what of the inch into which the foot is divided? The 
 inch is quite as traditional a measure as the foot; though one 
 historian assigns it to Roman origin, and its length at some 
 time has been equivalent to the combined lengths of three 
 grains of barley. The scientific certainty of this length being 
 only approximated by the average of the lengths of a large 
 number of grains. 
 
 The learned Scotch astronomer Piazzi Smyth, in his clever 
 work "Our Inheritance in the Great Pyramid," labors to show 
 that that stupendous structure was erected under divine inspi- 
 ration for the sole purpose of passing on to this and future 
 generations a scientific standard of weights and measures, and 
 that the inch corresponding closely with the British inch and 
 equivalent to one five hundred millionth of the length of the 
 earth's axis of rotation was the unit of length used in the 
 building of the Great Pyramid. Smyth's theory, concurred in 
 by some other scientists and investigators, is that a complete 
 system of weights and measures is outlined by the Great Pyra- 
 mid, based upon dimensions of the earth, its motions and dis- 
 tance from the sun. 
 
 The value of these conclusions is to me somewhat modified 
 by the fact that they were promulgated during a heated con- 
 troversy between the advocates of traditional standards, of 
 which the British (and American) system is the epitome, and 
 those of the French metric system, which its enemies de- 
 nounced as atheistic in its conception and not even as scien- 
 tific in its foundation as was claimed for it. 
 
 It is useless to burden this lecture with historical details of 
 the variations in standards, further back than a hundred years, 
 or about the beginning of the Nineteenth Century, more than 
 
to point out the fact that at that time the inconvenience of the 
 ruling standards, because of their great variety, and the in- 
 justice of them because of their instability, led to the invention 
 of the metric system; initiated by the French government at 
 the suggestion of Prince Talleyrand, the Bishop of Autun in 
 1790. "He recommended the length of the pendulum, beat- 
 ing seconds in latitude 45 deg. as a suitable linear basis and 
 introduced into the National Assembly of France a decree em- 
 bodying this proposition." 
 
 This led to the convening of an international commission 
 composed of representatives of several European nations to de- 
 termine the exact length of such pendulum. Later the system 
 was further matured by a committee of the French Academy 
 of Sciences. "Their report dated March 19, 1791, after con- 
 sidering the comparative fitness as a standard of length; of 
 the pendulum and of the earh itself in some one of its natural 
 dimensions; decided in favor of the latter and recommended 
 as the standard unit of linear measure one-10,000,000th of the 
 quadrant of a terrestrial meridian. ' ' 
 
 But this was only the beginning of the work; for it took 
 seven years of arduous and skillful labor of two eminent sur- 
 veyors to measure an arc of the meridian selected that pass- 
 ing through Paris and extending from Dunkirk to Barcelona; 
 the object being to ascertain with the greatest exactness the 
 length of the linear base called the "meter." This having been 
 done, a complete system was inaugurated, having the meter as 
 the fundamental standard. Prototypes of the standards of 
 length, capacity and weight were carefully constructed and 
 placed for safe keeping in the public archives of France, June 
 22, 1799. A later international commission assembled at Paris 
 in 1870, in -which the United States was represented by Mr. 
 Washburne, took further precautions towards the establish- 
 ment and perpetuation of the system in pursuance of wthich 
 a set of standards for the metric system were deposited in the 
 International Burea of Weights and Measures at the Pavillion 
 de Brsteuil near Sevres. These consist of a meter, defined by 
 the length at the melting point of ice between two lines drawn 
 on a bar of platiniridium together with units of capacity and 
 weight. 
 
 Prior to the Revolution the American colonies had gen- 
 erally made use of the same standards as those of the mother 
 country, and which are in use still by sufferance; no positive 
 law having been enacted by Congress prescribing a single and 
 complete system of either weights and measures or of value. 
 In these matters the several States have exercised a jurisdic- 
 tioneach as an independent sovereignty, not contemplated 
 
by the Constitution, if not in violation of its express provis- 
 ions; for when in its first article above quoted, the right was 
 conferred on Congress, the duty of exercising that right was 
 also imposed, from the very necessity of the case. 
 
 Let us see now what Congress has done towards fulfilling 
 its duty in this behalf. By act of Congress of May 19, 1828, 
 it was provided that that certain brass troy pound weight 
 procured by the Minister of the United States at Lori -on, in 
 the year 1827, should be the standard troy pound of the United 
 States for use in the mint for coinage purposes. By resolution 
 June 14, 1836, it directed the Secretary of the Treasury to 
 cause a complete set of all the weights and measures 
 "adopted" as standards and then made or in process of manu- 
 facture for the use of custom houses and for other purposes, 
 to be furnished to the Governor of each State in the Union, 
 etc., "to the end that an uniform standard of weights and 
 measures may be established throughout the United States." 
 
 The Legislature of Pennsylvania had by an act of April 
 15, 1834, adopted the troy pound above referred to and also 
 enacted that the positive standards then in use should for ver- 
 ification be referred to "natural invariable standards." Thus 
 the length of the standard yard to be compared with that of 
 the pendulum vibrating seconds, etc., and that of weight to be 
 compared to that of 100 standard cubic inches of: water at its 
 maximum density and at convenient atmospheric pressure, etc. 
 
 By an act of July 28, 1866, Congress legalized the metric 
 system throughout the United States not however making it 
 compulsory and declared what the equivalents of the terms of 
 the weights and measures then in use in the United States were 
 in the metric system. By act of February 12, 1873, Congress 
 substantially re-enacted the law of May 19, 1828, relating to 
 the troy pound for the regulation of coinage. By act of July 
 11, 1890, Congress provided for the repair of the standard 
 sets. By act of March 3, 1891, it established the National 
 Bureau of Standards. By act of July 12, 1894, it defined and 
 established units of electrical measure, and by act of August 
 18, 1894, it provided for replacing lost sets of standards. 
 
 Now, aside from our electrical standards, what systems 
 of weights and measures have we in use in the United States 
 and what claims have they upon science for their characters? 
 
 That no one system is compulsory is obvious from the fact 
 that there are at least three distinct and independent systems 
 of weights (not counting apothecary's weight) now in daily 
 use, to-wit: the troy, the avoirdupois and the metric. A grain 
 of wheat is the fundamental scientific (?) unit of the first two 
 and a subdivision of the polar circumference of the earth, call- 
 
ed the meter, is that of the third. The grain is also the fun- 
 damental unit of length in the old systems where the standard 
 unit of length is the yard of 36 inches ; since the inch when re- 
 ferred to its fundamental scientific (?) basis is the length of 3 
 barley corns or grains of barley. 
 
 But what matters it whether the fundamental unit of 
 weights and measures consists of a natural or an artificial ob- 
 ject? The question suggests its own answer. Fixity is the 
 primary consideration. The difficulties in the adoption of a 
 terrestrial dimension either of circumference or diameter, or of 
 its mass or attractive force operating upon the pendulum are 
 disclosed by Sir John Herschel in his interesting lecture on 
 "The Yard, the Pendulum and the Meter/' read at a meet- 
 ing of the Leeds Astromical Society October 27, 1863. 
 
 It is a matter for profound meditation that though we go 
 to the ends of the earth or to the center thereof, there is noth- 
 ing so absolute and fixed in dimension that it may be referred 
 to as an absolute standard of length, but that with all the sci- 
 ence and skill of the twentieth century every measurement has 
 some element of variability in itself or in the means of its adop- 
 tion as a standard. I apprehend, however, that our inconven- 
 ience from this fact at this time is more imaginary than real; 
 as for practical use, the metric system as now established, is 
 adequate for all purposes of measurement of distance, dimen- 
 sion, capacity and weight, except perhaps as applied to the 
 stellar universe. It is a decimal system and far more conven- 
 ient in reckoning than any of the old forms which it has well 
 nigh displaced in all civilized countries except Great Britain 
 and the United States. 
 
 If any of the nations of the earth will approximate the 
 precautions provided by the International Commission of 1870 
 to preserve copies of the standards then provided, there 
 will never be occasion for a resort to the actual length of a 
 meridian of the globe to determine the length of the standard 
 meter. 
 
 How long must it be before Congress will exercise its sov- 
 ereign function in this behalf and abolishing and forbidding 
 the use of every other system, establish the metric as the sole 
 and only lawful system? Why should not Congress say to the 
 people of the United States what the great law-giver did to the 
 Israelites, "thou shalt not have in thy bag divers weighs, a 
 great and a small. Thou shalt not have in thy house divers 
 measures, a great and a small. But thou shalt have a perfect 
 and a just weight and a perfect and a just measure shalt thou 
 have." 
 
 The people of the United States are far behind the an- 
 
cients in this matter, for we have in daily use an avoirdupois 
 pound equal to 7,000 grains ; a troy pound equal to 5,760 grains 
 and a kilogram equal to 15,432.2 grains. Also a yard equal to 
 36 inches as a standard unit of length and a meter equal to 
 39.37 inches as another standard unit of length. Similar con- 
 fusion exists among the other weights and measures growing 
 out of these. It is obvious therefore that Congress has some- 
 thing yet to do in this matter. 
 
 But there is still another measuring system that I have 
 thus far but little more than metioned, which in importance 
 transcends all the others, inasmuch as it is used more than any 
 or all of them combined that of money. 
 
 From the earliest history of commerce, a standard of value 
 has been as interesting and important a subject as that of 
 length, aye, vastly more so; and though the diversity of 
 weights and measures has been as great as that of tongues at 
 the Tower of Babel, the variety of standards of value both as 
 to quality and quantity exceeds them all, and to this very hour 
 the crudest, most antiquated and unscientific measuring sys- 
 tem in use is that for determining commercial values. I say 
 commercial value to distinguish the values under discussion 
 from intrinsic values in general; embracing in the former only 
 such values as are possessed by objects which are limited in 
 supply and in demand for use. 
 
 It is needless to say, except for illustration, that iron, cat- 
 tle, leather, shells, beads, tobacco, skins and doubtless many 
 other things, as well as copper, silver and gold, have at one 
 time or another and in one country or another, been used as 
 a medium of exchange and standard of value. Gradually one 
 thing has been succeeded by another, until at last gold has 
 superseded all other materials in the greater commercial coun- 
 tries, and with the exception of silver it has displaced all oth- 
 ers throughout the civilized world. 
 
 The superiority of its qualifications over those materials 
 which it has displaced as a standard for money, is only in de- 
 gree. It is more limited in supply than iron; more divisible 
 than the ox; more durable than leather; more beautiful than 
 tobacco; more useful than shells or beads, and less ebundant 
 than copper or silver. It is of great use in the arts. Between 
 gold and silver there is still a struggle for the mastery; one 
 must win and that upon its merits. It is obvious to me that 
 two separate and distinct standards of value cannot exist har- 
 moniously and on equal footing in any country at the same 
 time. It is impractical and scientifically and absolutely im- 
 
possible. No man can serve two masters and love and serve 
 them both equally. No more will a people hold in exactly the 
 same estimation any given quantity of two metals upon which 
 the law of supply and demand is constantly acting, with vary- 
 ing supply and demand of each, having no fixed relationship 
 to the supply or demand of .the other. 
 
 It is my conviction at this time, that where gold has be- 
 come the sole standard of value, as in the United States and 
 mt>st other great commercial countries, a change from a gold 
 to a silver standard would work immeasurably more injustice 
 and wrong than will be done by perpetuating it. Changing 
 from one standard to another is practically the same in its in- 
 jurious effects as increasing or diminishing the amount of the 
 standard material of which the unit of the money system is 
 composed. 
 
 My audience needs no enumeration of instances in which 
 incalculable injustice has been perpetrated upon a people by 
 each of these methods no less in our own country than those 
 of others; and the injustice is none the less, whether the per- 
 petration was through ignorance or design. 
 
 The question with us now is, can we set up any barrier to 
 a repetition of these crimes against unsuspecting or otherwise 
 helpless humanity? 
 
 As I think I have clearly shown, Congress has been woe- 
 fully derelict of duty in failing to fix the standard of weights 
 and measures. It has been doubly so in failing to fix the stand- 
 ard of value. The clause of the Constitution before quoted 
 says "The Congress shall have power to coin money, regulate 
 the value thereof and of foreign coin and fix the standard of 
 weights and measures." I hold that therein is embodied au- 
 thority over the money system of a two-fold nature, either of 
 which is ample and if properly exercised, as contemplated by 
 the mind that inspired the framing of that article, we may have 
 a money system having as scientific a basis, and answering the 
 purpose for which it is designed, as perfectly as the metric 
 system of weights and measures. In this matter, as in the 
 other, Congress has entered upon its duty and done something 
 perhaps we may say much for at an early day it established 
 a mint and entered upon the duty of coining metal money, and 
 this right and duty too it exercises exclusively. Congress has 
 also in 1873 adopted a standard of security, a unit of value, 
 consisting of 23.22 grains in weight of gold, coined with 
 alloy into a one-dollar piece weighing 25.8 grains. This after a 
 period of nearly a hundred years, during which time commerce 
 had struggled under the incubus of a double standard in the- 
 ory at least while in fact preference has alternately shifted 
 
from silver to gold and from gold to silver, as the ratios be- 
 tween supply and demand for the two metals has varied. 
 
 It is a debatable question whether, owing to the limited 
 supply of both gold and silver, a standard of security and unit 
 of value consisting of an alloy of gold and silver might be 
 adopted which would answer the needs of commerce better 
 than one consisting of either of them singly, and which would 
 endow both metals with the dignity of the standard without 
 the distracting complications resulting from the preposterous 
 attempt to use two distinct and separate standards at the same 
 time ; but I do not wish here to more than offer the suggestion 
 as a subject for future consideration. 
 
 I have mentioned gold as the standard of security in this 
 country. Gold as such is not money. Coining it, stamping it 
 as directed by law, endows it with a function which it does not 
 otherwise have. As coin, it is money, a lawful medium of ex- 
 change and compulsorily receivable in payment of debts a 
 legal tender. 
 
 We have also silver coins, the alloyed unit of which con- 
 tains 412% grains, but these silver coins are only a legal ten- 
 der where not otherwise expressed in the contract and the se- 
 curity they carry is less in dignity than that of the gold coins 
 inasmuch as the difference between the bullion value of the 
 silver in the coin and its nominal value is made up of the credit 
 of the government its ability and willingness to redeem the 
 silver coins by receiving them in payment of debts to the gov- 
 ernment at their nominal value or by exchanging gold coin for 
 them. And this is about the extent to which Congress has gone 
 in assuming and exercising this sovereign prerogative, the es- 
 tablishment and maintainance of the money system of the 
 country. 
 
 It has, however at divers times caused the credit of the 
 government to be coined into paper money, of which the so- 
 called greenback is the most popular example, but it has 
 farmed out to private corporations this inestimable prerogative 
 of its sovereignty to such an extent that a large proportion of 
 our current money is issued by these corporations for their 
 personal and exclusive advantage and with baneful results to 
 all the other branches of business fully commensurate with 
 the motive. 
 
 As reported in the daily papers, President Roosevelt, in 
 his speech at Quincey, 111., on April 29, 1903, described the un- 
 satisfactory working of our currency system and pointed to 
 results still to be striven for, with a clearness characteristic of 
 the man, and which I will quote as a starting point for the next 
 division of my subject. He says: 
 
 10 
 
"Our currency laws have been recently strengthened to 
 secure permanency of values, but this does not imply that 
 these laws may not be still further improved and strengthened. 
 It was well nigh universally admitted that our currency sys- 
 tem is wanting in elasticity; that is, the volume does not re- 
 spond to the varying needs of the country as a whole, nor to 
 the varying needs of different localities. Our people scarcely 
 need to be reminded that grain raising communities require a 
 larger volume of currency at harvest time than during the sum- 
 mer months. The same principle applies to every industry, to 
 every community. Our currency laws need such modification 
 as will insure the parity of every dollar coined or issued by the 
 government and such expansion and contraction of our cur- 
 rency as will promptly and automatically respond to the vary- 
 ing demands of commerce. Permanent increase would be 
 dangerous. Permanent contraction is ruinous, but the needed 
 elasticity must be brought about by provisions which will per- 
 mit both contraction and expansion as the varying needs of 
 the several communities and business interests may require. " 
 
 "The Congress shall have power to coin money, regulate 
 the value thereof * * * and fix the standard of * 
 * * * measures." 
 
 Money is the measure of value. Congress has declared what 
 the material and the quantity thereof shall be the unit of 
 value, but it has not declared what the value of that unit shall 
 be nor provided means for regulating it nor the standard 
 money of which it is the touch stone. 
 
 Webster defines value to be "the property or properties of 
 a thing which render it useful, or the degree of such property 
 or properties." And this is the sense in which the word value 
 is used in money, as in all other things of commerce. A stand- 
 ard in the sense in which we are using the word means a thing 
 with which other things of its kind are compared. It is the ulti- 
 mate and last resort in determining distance, weight, capacity 
 or value, as the case may be. 
 
 It is written that in His promise to Abraham, God swore 
 by himself because there was none greater. So also is a fixed 
 standard measured by itself, because there is none of greater 
 authority. In regulating the value of money, the States, now 
 forty-five of them, to say nothing of the territories, each for 
 itself, has exercised the prerogative of regulating (or disturb- 
 ing) the value of money; for each State has, without any pro- 
 test from Congress, but rather with its sanction and approval, 
 established a maximum rate of interest, which is lawful to 
 
 ii 
 
charge, by the money-lender or creditor, although in some 
 States the rate in matters of contract is purely a subject of 
 mutual agreement. 
 
 Congress has never established an exclusive and uniform 
 rate of interest ; on the contrary, in enacting the law relating to 
 national banks it expressly provides that in matters of interest 
 the banks may charge the rates aiiow'ed by the laws of the 
 States and territories in which they may be severally located, 
 and 7 per cent, where no other rate is established. 
 
 Now what is interest, and what has it to do with our sub- 
 ject? Interest is the premium paid for the use of money. 
 Money, like every other useful thing, is subject in its value to 
 the law of supply and demand, and interest on money denotes 
 the ratio between the supply of and demand for money, and as 
 applied to our unit of value, it means, for example, that with 
 interest at 7 per cent, per annum for the use of $100 for one year 
 the borrower will pay the lender, together with the principal, 
 $7 more in gold coin or its equivalent in money of the same 
 value. There is no fixed rate of interest in this country, nor 
 in any other that I know of, and no fixed value to our standard 
 unit of value. There should be, and if our money system ever 
 reaches even the scientific exactness of the metric or any other 
 of the prevailing measuring systems there must be further 
 legislation to that end. If gold or even gold and silver were 
 the only elements that netered into our currency it would be 
 practically impossible to establish and maintain a rate of in- 
 terest that would not be violated in commercial transactions. 
 The supply being limited and the material composing the cur- 
 rency being subject to corners and monopoly, any demand for 
 money exceeding that indicated by the legal rate of interest 
 would be taken advantage of by money lenders and those need- 
 ing the use of borrowed money would be forced to pay the ex- 
 cessive and usurious rate or go to the wall in their business. 
 
 In fact these are conditions existing this very hour in 
 thousands of places and have been so at all times and at various 
 places ever since money was invented; although during the 
 past few hundred years a substitute for metal money has been 
 in use in company with metal money of such excellence and 
 adaptability that without it commerce would lapse into a state 
 of barbarism I mean coined credit or so-called paper money. 
 Without this it would be idle to talk of fixing the rate of in- 
 terest or regulating to any adequate degree the value of money. 
 With it the field is clear and the way open. Money, as I have 
 said, is subject in its value to the law of supply and demand. 
 The demand for money at some rate could not be goverened 
 by human legislation and ought not to be if it could. 
 
 12 
 
It is in the supply of money currency that the means 
 lie for not only regulating, but fixing the value of money. As 
 I have said of standards of weights and other measures, abso- 
 lute fixity is seemingly impossible in anything; but with the 
 value of money as with the length of the meter, there is a pos- 
 sibility of such fixity as will render money at least approxi- 
 mately as perfect a standard of value as the meter is that of 
 length. As stated by the President in the speech before quoted, 
 our currency system is wanting in elasticity. That is what has 
 been the chief ailment of our money system from the very 
 first. The justification of the government for authorizing 
 private banks of issue is and has always been to provide elasti- 
 city to the currency, ad it has done so admirably for the bene- 
 fit of the money lenders, but a sorry substitute for government 
 regulation and control; as is demonstrated in the fact that 
 money is never supplied to meet the demand at the same rate of 
 interest in two places at the same time, and not so in any place 
 for any considerable length of time. Money on call in New 
 York at 4 and 6 per cent today; last fall it rose to 100 per 
 cent. While the great farming country of the West was be- 
 ing reclaimed by the pioneers, money loaned readily at from 
 25 to 50 per cent, and throughout the entire country the rate 
 of interest has always been like the freight rate on the rail- 
 roads ''all the trade would bear." 
 
 It was only last fall that the Secretary of the Treasury 
 deemed it his duty to strain every authority conferred on him 
 by law to avert a money panic, which had it come, would only 
 have been one more in the catalogue of panics which have 
 broken upon the commercial world to the cost of untold misery, 
 injustice and ruin. To depend upon such means to regulate 
 our money values is as foolish as to try to dam the Mississippi 
 river to avert a flood. To say nothing of the inconsistency and 
 injustice of granting to private persons or corporations the 
 exclusive right of issuing money charging interest on what 
 they owe it is vain to expect or hope for a supply of money 
 from that source that will properly meet the demands of the 
 other branches of commerce at a just or at any rate of interest. 
 It is contrary to the laws of nature ; for the law of supply and 
 demand is as much a natural law as that of gravitation, and self 
 love is at the bottom of every voluntary human action. There 
 is no motive but that of self-love or selfishness that moves the 
 money lender to part with the use of his money and the 
 despotism and tyranny of Shylock is ingrain in human nature, 
 daily manifesting itself in varying degrees, but nowhere more 
 conspicuously than in the issue and manipulation of paper 
 money. 
 
 13 
 
Fixing the rate of interest is but one step necessary to- 
 ward an elastic currency. There must be provision made for 
 issuing, coining paper money to meet the demand at that rate. 
 What hope have we or can we have of private so-called National 
 Banks providing such facilities? None whatever. It is puerile 
 to say that the government can authorize to be done by another 
 that which it cannot do by itself; and it seems to me little less 
 than treasonable for Congress to give to private persons or 
 corporations the sovereign function of issuing money, which 
 in the very naure of man, cannot be exercised by them other 
 than for their private advantage at the expense of the rest of 
 the community. The government should reclaim this ab- 
 dicated power as inhering inalienably in the people and using 
 the same or similar machinery as now employed by the banks, 
 take upon itself the duty of issuing all the money by loading 
 it as the banks now do on proper security and on demand, but 
 at a fixed rate of interest. By this method the demand for 
 money would alone cause an increase or a lessening of the 
 volume and commercial prosperity would depend upon the de- 
 mand for and supply of the other commodities of use, and not 
 upon the manipulation of the money market. The invention 
 of coined credit was an inestimable boon to mankind. Let it 
 continue to be such and not alternately a blessing and a curse. 
 "Were it not that the value of gold is immensely enhanced by 
 its use as money and that by the same power that authorizes 
 the use of coined credit, there would be no means of regulating 
 or fixing its value, but since paper money simply supplies the 
 currency so far and only so far as the supply of gold and silver 
 money is inadequate, it is within the power of Congress, meas- 
 urably, at least, and with the co-operation of other gold-stand- 
 ard countries, substantially to fix its value by fixing the rate 
 of interest and providing credit money of the same value to 
 meet the demands of commerce at that rate. 
 
 What such legislation and such a money system would 
 mean to all industries can scarcely be measured by the imagina- 
 tion, and what a just rate of interest would mean to the wage 
 earner is a theme worthy of a more extensive consideration 
 than can properly be given here and now. Knowledge grows 
 and as we see our present systems of weights and measures 
 and of money are the outgrowth of cruder and more cumber- 
 some beginnings, let us hope that the first quarter (may I say 
 decade?) of the twentieth century will see in this country, at 
 least, one exclusive system of weights and measures and a 
 money system based upon scientific standards that do not vary, 
 to the end that justice and righteousness may prevail among 
 men. 
 
SOME STARTLING STATISTICS 
 AND THEIR WARNING 
 
 BY ALVIN H LOW 
 
 Author of "Land, Money and Highways: Evils and Remedies," "Leaves from 
 My Note Book, 9 ' "The War and Economic Justice," Etc., Etc. 
 
 It has been, well said, "Figures don't lie, but you can lie with figures." 
 
 The writer is not responsible for the accuracy of the statistics given below, 
 
 as they are copied from the U. S. Statistical Abstract. 
 
 "Statistical Record of the Progress of the United States, 1800 to 1915." 
 Note "True value of real and personal property; the figures are those 
 
 of the Bureau of the Census, Department of Commerce, relate to continental 
 
 United States, and cover census years." 
 
 Year 1850 Total wealth, $ 7,135,780,000; per capita, $ 307.69 
 Year 1860 Total wealth, $ 16,159,616,000; per capita, $ 513.93 
 Year 1870 Total wealth, $ 30,068,518,000; per capita, $ 779.83 
 Year 1880 Total wealth, $ 43,642,000,000; per capita, $ 870.20 
 Year 1890 Total wealth, $ 65,037,091,000; per capita, $1,035.57 
 Year 1900 Total wealth, $ 88,517,307,000; per capita, $1,164.79 
 Year 1904 Total wealth, $107,104,212,000; per capita, $1,318.11 
 Year 1912 Total wealth, $187,739,071,000; per capita, $1,965.00 
 
 The foregoing figures indicate an abnormal increase from 1900 to 1912. 
 On consulting Table No. 347, we find that the total increase of value of Real 
 property from 1900 to 1912 was $58,139,704,907. 
 
 These figures seem to show that by 1900 we had reached the limit of free 
 land; that is, land that is most desirable for useful purposes, and that for the 
 future, land values will continue to rise, by virtue of the law of supply and 
 demand, just about as population increases. 
 
 The intrinsic value of Land does not change. An acre of land responded 
 to the labor of man in 1492 as generously as a like acre responds to like treat- 
 ment in 1917. The available land of the Earth is limited in supply. Measured 
 by the money standard, the value of a given area will increase with increased 
 domand due to increase of population and improved methods of cultivation. 
 
 In round numbers, the population of Continental United States in 1850 
 was twenty-three million; in 1900 it was seventy-six million, and in 1915 it was 
 one hundred million. 
 
 Aside from land, there are two factors or things that contribute to the 
 value (usefulness) of things: live labor, and dead or crystallized labor which 
 we call capital. There is a relentless, never-ceasing war between the possessors 
 of these two factors of production; always has been, is now, and the end is not 
 yet in sight. 
 
 The purpose of this inquiry is, to ascertain as nearly as possible, by the 
 use of facts and figures, what share or proportion of the increase of wealth 
 in this Country, has gone and is going to each factor of its production. When 
 we have solved this problem, we will be able to adjust our legislation to it, 
 so as to insure justice to each of these two contending forces; that done, it 
 will follow as of course, that if we establish justice for either one of them, 
 justice will, by the same process, be established for the other. 
 
 Now, discarding smaller fractions, and computing by decades, from 1850 
 to 1900, we find that the average increase of wealth in the United States was 
 as follows: 
 
 From 1850 to 1860, 12.6 per cent; 1860 to 1870, 8.6 per cent; 1870 to 1880, 
 4.5 per cent; 1880 to 1890, 4.9 per cent; 1890 to 1900, 3.6 per cent; and from 
 1900 to 1904 it was 5.3 per cent and from 1904 to 1912 it was 9.4 per cent. 
 
 Other things being equal, and reckoning a family of five persons is the 
 
unit of well organized society, each family in the periods above mentioned 
 should have possessed wealth as follows: 
 
 In 1850, $1,538; in 1860, $2.570; in 1870, $3,899; in 1880, $4,351; in 1890, 
 $5,178; in 1900, $5,824; in 1904, $6,591; in 1912, $9,825. Unfortunately for the 
 purposes of this inquiry, we have no authentic statistics up to the year 1913 
 from which to calculate the rate at which the wealth of this country has been 
 centralized, exploited or pilfered from the many into the possession of the few, 
 as it surely has been, as demonstrated by the Personal incomes accounted for 
 by the sworn statements of individuals in their returns to the Federal Govern- 
 ment for the years 1913, 1914, 1915 and 1916, as per the report of the Com- 
 missioner of Internal Revenue, which is as follows: 
 
 For the year 1913, out of the one hundred million or more people in the 
 United States, only 357,598 returned net incomes of over $3,000 per year. Of 
 these, 84 persons had net incomes of $300,000 or over; 44 had net incomes of 
 $400,000 or over; 91 had net incomes of $500,000 or over; and 44 had net incomes 
 of $1,000,000 or over; the record stops there. In the year 1914 the number of 
 returns fell to 357,515 while the larger incomes increased and were as follows: 
 
 There were 147 net incomes of $300,000 or over; 69 of $400,000 or over; 
 114 of $500,000 or over and 60 of $1,000,000 or over. 
 
 In 1915 the total number of returns of over $3,000 fell still more to 336,652 
 while the larger incomes had risen in numbers and were as follows: There 
 were 254 net incomes of $300,000 or over; 122 of $400,000 or over; 209 of 
 $500,000 or over; and 120 of $1,000,000 or over. 
 
 In the year 1916, while the total number of returns over $3,000 rose (prob- 
 ably due to some increase in salaries), to 437,036, the number of swollen in- 
 comes rose still higher and were as follows: There were 469 net incomes of 
 $300,000 or over; 245 of $400,000 or over; 376 of $500,000 or over, and 206 of 
 $1,000,000 and over. Of these 206, ten had net incomes of five million dollars 
 and over! It is said to be a safe guess, that as late as 1860 not more than one 
 man in the United States possessed one million dollars worth of property, 
 much less a yearly income of that amount; and today it is popularly believed 
 that many single individuals here have net incomes of from five to fifty mil- 
 lion dollars annually. 
 
 On the other hand, Government statistics of the industries show that the 
 average wages of the American laborer does not exceed $500 per year. And 
 this is his gross income. He has no net income, and for many years he has 
 been drawing on his previous savings to pay his current and necessary 
 expenses. 
 
 With these undeniable facts staring us in trie face, and which almost stag- 
 ger our credulity, is it not high time that our statesmen and our scholars, our 
 philanthropists and our philosophers, and our citizens generally, begin to look 
 into these matters and try to find a way to check the current of our economic 
 life, and turn it into channels of safety? 
 
 As a further verification of the statements made, take the facts disclosed on 
 page 692 of the same Abstract. This table shows the total number of persons 
 employed in the "Manufactures of the United States," at the periods men- 
 Honed, and the total amount of wages paid; which divided by the total num- 
 ber brings the following results: 
 
 The average wages for each wage-earner per year was: In 1850, $247; in 
 1860, $239; in 1870, $477; in 1880, $347; in 1890, $445; in 1900, $426; in 1905, 
 $437; in 1910, $518. 
 
 In the same industries, as shown by the same table, the average salaries 
 paid to "officials, clerks, etc.," were as follows: In 1890, $850; in 1900, $1,045; 
 in 1905, $1,106; in 1910, $1,188. 
 
 Now, what of Transportation, Agriculture, and Mercantile pursuits? In 
 1910 the railroads paid $1,143,725,300 to 1,699,420 persons in salaries and wages, 
 which is equal to an average of $673 to each. 
 
 In 1910 the total number employed in Manufacturing and Railroading was 
 9,104,733. In 1910 there were 12,659,203 persons engaged in Agriculture. This 
 loaves 16,403,396 people "engaged in gainful occupations" to be accounted for 
 and the Government statistics give us little or no light as to their yearly in- 
 comes, but there is good ground for estimating that they fall far short of those 
 wr, have specified. The annual wages of farm laborers are proverbially low, 
 
and yet, if the average farmer charged up to the account with his farm, wages 
 of himself and family, and the current rate of interest on the value of his 
 investment, were it not for the nominal increase in the value of his land, at 
 the end of the year he would find himself "in the hole." Since, then, our in- 
 dustrious population, generation after generation, have received of the fruits 
 of their toil, barely sufficient to enable them to live and propagate the species, 
 to whom has gone the increase of wealth of which we boast, if not to the ex- 
 y.loiters of the race, revealed to us by the Income Tax law, and whom that 
 law has uncovered and made to stand out in all their hideousness? 
 
 The logical and inevitable conclusion from the contemplation of the facts 
 presented is, that there is a power latent in crystallized labor Capital which, 
 while in the hands of private monopolists, must be regulated and controlled by 
 the Government, if we would abolish the slavery now existing, and which, if 
 neglected, will lead to a revolution as much more terrible than that in France 
 in 1789, as the education of the masses here is more general than it was there 
 at. that time. 
 
 At this stage of our investigation, the logical question, "What is the 
 remedy?" forces itself upon us. Fault-finding is futile and is often carried to 
 criminal lengths, when the one who complains, with vision however clear, has 
 no practical remedy to suggest. It is much easier to see things as they exist, 
 than as they ought to be. 
 
 For the past thirty years the writer has thought he saw the remedy and has 
 advocated it untiringly, which, if it had been applied even twenty-five years 
 ago, would have prevented much of the injustice which has been perpetrated 
 upon the workers of this country, and caused the great disparity between the 
 few very rich and the many very poor, which has almost reached its climax 
 aiid must be arrested soon, if we are to avert the impending crisis and revulsion. 
 
 That remedy was and is, that Congress determine, through the services of 
 a Federal Interest Commission, or otherwise, what is a just and equitable rate 
 of interest and profit for money loaned, payments deferred, and capital in- 
 vested, and to enact that as the legal rate and make that rate normal by pro- 
 viding a supply of money to meet the demand at that rate. 
 
 That done and current legislation is tending in that direction the Gov- 
 ernment should require an accounting of all Big Business from that of bankers 
 to bakers, and take by taxation, as in the case of the Federal Reserve banks, 
 all excess of the profits above that rate. There is a motive (generally selfish) 
 for every voluntary human act. The law suggested, would leave no motive for 
 oppression by low wages or extortion by high prices, and where there is no 
 wrong motive there will be no wrong committed. 
 
 The feeble action of the Government in taxing "excess" profits and swollen 
 incomes simply as a foreign war necessity, should be applied more vigorously, 
 and as a preventive of injustice, and as a much needed domestic war measure; 
 for no foreign war can be more worthy of patriotic solicitude than the war 
 between Capital and Labor, which is waging in every civilized country and 
 most intensely in this, by Nature, the most favored one on Earth; and which 
 must and will continue until Justice has been established in our economic and 
 industrial system. Let us continue to a successful issue our fight for world 
 democracy, lest all liberty be lost for a thousand years; at the same time let 
 us legislate for political equality and industrial justice at home. 
 
 Address: Alvin H. Low, 1417 S. Hoover St., Los Angeles, Cal. 
 
Citizen Print Shop ^^*> 203-205 New High St. 
 
Standardize Capital, Not Wages 
 
 BY ALVIN H. LOW 
 
 Attorney-at-Law, and Author of "Land, Money and Highways: Evils and 
 Remedies"; "Poverty, Interest and Wages" ; "The War and Economic Jus- 
 tice" ; "Some Startling Statistics and Their Warning," Etc., Etc. 
 
 Seeing in a daily paper, the name of Senator Warren G. Harding among 
 the thirteen who voted against the "Overman" bill April 29, 1918 (the vote 
 standing 63 to 13), recalled to the writer's mind the statement of that gentle- 
 man, in his opening campaign address in June, 1916 : in which he stated: 
 "We are willing to standardize the wages of the world"; which statement 
 was the inspiration of an article in the "National Jeffersonian" of June 24, 
 J916, and here revised and enlarged to meet the present-day occasion 
 
 This sentence sounds to the writer like the echo of the "Hazzard Circular," 
 sent by the bankers of Europe to the money-lenders of America during the 
 Civil War, practically proposing to substitute wage slavery for chattel slavery, 
 as the more economical system for those in control of capital the money 
 system. 
 
 Adam Smith, whose "Wealth of Nations" is to the science of Political 
 Economy what Sir William Blackstone's "Commentaries" is to the Common 
 Law, said: "Labor, like commodities, may be said to have a real and a nom- 
 inal price. Its real price may be said to consist in the quantity of the neces- 
 saries and conveniences of life, which are given for it; its nominal price in 
 the quantity of money. The laborer is rich or poor, is well or ill rewarded 
 in proportion to the real, not the nominal price of his labor." 
 
 Now, measured by this great writer's standard, there were, just prior to 
 the outbreak of our war with Prussian Autocracy, millions of our sovereign 
 American citizens and their dependents, who were in more abject slavery 
 and squalid want, than were the four million chattel slaves in 1860; and all 
 this was the outgrowth of some fifty years of strictly partisan control of the 
 political government since that time. There are two ways to standardize 
 wages; the one by statute law, the other by the law of supply and demand. 
 Three instances of the former method will suffice here the other we have 
 with us. After the plague known in history as the Black Death, in England, 
 in the year 1349, from which nearly one-half of the laboring class died of 
 the plague, Parliament enacted "the statute of laborers," in which the prices 
 to be chargeoTiaborers for their services, were specified, and severe penal- 
 ties were prescribed for charging or receiving more. As might have been 
 expected, the great injustice of this law caused a loud protect, anfl finally an 
 uprising of the laborers, which came near to the overthrow of the govern- 
 ment. The second example is that of the law of the Massachusetts Bay 
 Colony in 1633, which, by the action of the general court, made it a rule that 
 wages in a long list of trades and occupations should, not be more than a 
 price or wage fixed by the court. "The rates of inferior workmen," says the 
 historian, "were to be fixed by the constable " The third and most modern 
 method of standardizing wages is that in vogue in the Southern States, prior 
 to 1863, and known as chattel slavery, where either by statute law or by 
 the common consent and decree of the Masters, the laborers were paid or 
 allowed sufficient food, clothing and shelter, to keep them in good health 
 and able to work and breed, with the same tender care, and for the same 
 reason, as was given to the domestic horse or ox 
 
 It is immaterial to the purpose of this article, what specific price or 
 wage was fixed upon in any of these cases: the point of emphasis being, 
 that wages were standardized by statute law. 
 
 Popular sovereignty, even as incomplete as we know it today, was not 
 known or even thought of in those days. The political power was in the 
 keeping of the rich, and hardly questioned by the poor or laboring classes. 
 
 Standardizing wages by law, is saying what specific part of the proceeds 
 
of a business shall go to the laborers employed. What is left of the gross 
 proceeds, after the payment of wages and other expenses, if any, goes to the 
 capitalist a part as his wages for superintendence, and the balance as profit 
 or compensation for the use of his capital. If the wages fixed by law, how- 
 ever, will not leave a profit to the capitalist there will be no business, for 
 that would leave no motive for him to engage ,in or to continue the business. 
 
 As we have seen, under the system of standardization of wages by law, 
 the laborer must subsist and prosper, if at all, on his specific wage; and if 
 he is ever to become a capitalist, he must pinch off a surplus and lay it 
 by out of his wages, for he has no chance for a profit over and above that, 
 while he is simply a wage-earner; and the possibility of his doing more than 
 live and propagate his kind is dubious, since his wage is prescribed by the 
 capitalist in control of the legislation. 
 
 Now we come to the other method of "standardizing" wages the method 
 in vogue in this country, and elsewhere throughout the world. 
 
 This method is inaugurated and conducted by the capitalists the employ- 
 ing class without the use of, or in direct violation of statute law. They 
 recognize and are familiar with the law of supply and demand, and conform 
 to it with scrupulous respect. 
 
 For many years we have had a "protective tariff," for the exclusive p r o- 
 tection of American manufacturers, fixed and maintained by the manufacturers 
 themselves, but under the false pretense of its being for the benefit and pro- 
 tection of American Labor; while all the time that tariff has been in force, 
 the doors of this country have stood wide open for the immigration or im- 
 portation of oppressed laborers of other countries who have come in swarms 
 and glutted our labor markets, so that there has not been one year in fifty, 
 up to the commencement of the present war, that there has not been two 
 or more laborers competing with each other for every job in consequence 
 of which, wages have been forced down and down, until the gross income 
 of the head of the average family of five persons did not exceed five hundred 
 dollars per year in gold; and a given amount of gold today is less in exchange- 
 able value than ever before in the history of the world. Apply this fact to 
 the standard set by Adam Smith above quoted, that "the laborer is rich or 
 poor, is well or ill rewarded in proportion to the real, not to the nominal 
 price of his labor," and it will be seen that the American wage-earner is as 
 much a victim of "standardized" wages as though his wages were fixed by 
 statute law. 
 
 The trades and labor unions are the only influential organizations at 
 work with any degree of power, against this tendency to force down and 
 keep down the wages of labor to the very least that the wage-earner can 
 subsist on, without even, a decent regard for the comfort of himself and 
 family. 
 
 While Union labor has done much in certain quarters and in certain 
 branches of industry, through a limited control of the labor supply, it has 
 been and is too weak to cope with the whole capital and labor problem, 
 because capital can always survive unemployment longer than can labor; and 
 with the hosts of the unemployed swarming our labor markets, the wonder is 
 that the unions have been able to do as much for the interests of the wage- 
 earner as they have. 
 
 Let it not be forgotten that this is the wage -system which has had the 
 "protection" of one Political party for so many years, and which party is, 
 according to its distinguished spokesman, Senator Harding, "willing to 
 standardize for the world." What about capital in the mean time? Is that 
 to remain free, as heretofore, to reap all the profits of the industries? 
 
 How long will the enlightened citizens of the United States stand for 
 this system? How long will we continue to trust leaders who have, through 
 avarice or ignorance, betrayed us so long? 
 
 The astounding disclosures of recent Income tax returns, showing the 
 colossal fortunes owned by our "captains of industry" all of which have 
 been acquired within the past fifty years, together with their natural ac- 
 companiment of poverty, squalor and suffering of a great mass of our popu- 
 lation, is an indefensible indictment of our industrial system. It has long 
 been the theory of the author, that the principal bone of contention between 
 
Capital and Labor, and which demands immediate consideration, is the profits 
 derived from their combined employment in the several industries; and that 
 there is not, and never has been, a uniform, scientific, practical or just stand- 
 ard established by law or otherwise, whereby a just division of such profits 
 must be made; and he presumes to suggest and urge the establishment of 
 such a standard. 
 
 THE BETTER WAY 
 
 Congress should ascertain, by every means available, through the services 
 of a Federal Interest Commission, if necessary, what are just rates of interest 
 for the use of money loaned and payments deferred, and of profits for the 
 use of capital invested, and establish the same by a general law. 
 
 It should be obvious to the most superficial student, since there are only 
 these two factors of production and distribution, that if the standard, fixed 
 lor one of them is just, it must be equally so to the other. Fixing an arbi- 
 trary standard for wages has never been and never can be just, when applied 
 to Labor alone; but by fixing the standard for Capital, Labor will derive its 
 just benefits automatically: for, what is left of the surplus after Capital 
 has received its just si. are, will go to Labor as a matter of course, and be 
 equally a just share. 
 
 Such law, to be practical and just, must be accompanied by a supply of 
 money sufficient to meet the demand for money and capital at such rates. 
 
 Congress alone has the constitutional power and right to establish such 
 rates and to provide such supply. Will it do so? The legislation enacted 
 during the present Administration in the interest of Labor, inspires the 
 hope that the good work will be carried on, until the goal outlined above is 
 reached. 
 
 While we must not for one moment, slacken our prosecution of the war 
 against the German government, we should lose no time or opportunity in 
 adjusting our industrial system at home, so that when we shall have achieved 
 world -wide democracy politically, we may set the pace in the establishment 
 of Social and Economic Justice. 
 
 Just laws for the taxation of Inheritances, Incomes and excess-profits, 
 will amply serve the purpose of making normal the standards adopted. 
 
 To foretell the beneficent effect of such a system, would require another 
 leaflet; the author prefers, therefore, for the present at least, to leave thus 
 much to the imagination of the thoughtful reader. 
 
 Criticism and correspondence solicited. 
 
 Address: Alvin H. Low, 1417 S. Hoover St., Los< Angeles, Cal. 
 
 May 4, 1918 
 
Citizen Print Shop 
 
 203 New High St. 
 
THE WAR AND ECONOMIC 
 JUSTICE 
 
 By ALVIN H. LOW 
 
 Author of "Land, Money and Highways: Evils and Remedies," Etc. 
 
 The science of political economy is 
 getting some valuable object lessons 
 in the measures employed by the sev- 
 eral Governments engaged in the in- 
 ternational war now waging, which, 
 it is devoutly to be hoped, will enable 
 mankind to solve the problem pre- 
 sented by Labor and Capital in their 
 perennial strife over the profits of 
 the industries, for in its last analysis 
 that is the one bone of contention be- 
 tween Capital and Labor, and is re- 
 flected in the wars between nations, 
 economic supremacy being the goal 
 sought in the one case no less than 
 in the other the world over. 
 
 Political economy has been well de- 
 fined by one of its eminent professors 
 as "the science of national house- 
 keeping," and that nation is least 
 prepared to direct the order of in- 
 ternational housekeeping whose own 
 house is not in order. 
 
 It seems to be a popular opinion 
 that the natural law of supply and 
 demand has been abrogated or else 
 was never more than a myth, anyway. 
 The basis of this misunderstanding is 
 found in the operations of monopolies, 
 which, by their power, due to cen- 
 tralization of wealth and executive 
 ability, destroy free competition and 
 fix wages and prices as arbitrarily and 
 despotically as the completeness and 
 magnitude of their organization en- 
 ables them to exercise, and always to 
 the one end the exploitation of the 
 community at large for the aggran- 
 dizement of the few. 
 
 The law of supply and demand, be- 
 ing a natural law, is no more repeal- 
 able than the law of gravitation. The 
 monopolist and his skilled attorney 
 know this, and avail themselves of 
 their knowledge by conforming to that 
 law, by addressing themselves to the 
 supply factor, the demand being be- 
 yond their control. 
 
 A monopoly may place the price 
 of a commodity within its control so 
 high that there is no apparent demand 
 for it, but if it is a commodity known 
 
 to be useful, capable of contributing to 
 human happiness there will be a 
 demand, though only latent, not rising 
 to the price fixed by those in control 
 of the supply. A price fixed higher 
 than the trade will bear is simply 
 prohibitive, and that prices under 
 "free competition," no less than under 
 monopoly, will, on the average, be 
 held at all the trade will bear goes 
 without saying. Competition aims at 
 monopoly, and though trade be started 
 with free competition, nominally, it 
 soon becomes apparent that the bat- 
 tle is to the strong, and the weaker 
 gradually yield, and the survival of 
 the fittest, as among the lower ani- 
 mals, is the survival of the strongest 
 and most cunning, no ethical element 
 entering into the contest. 
 
 Now, it should be obvious to the 
 most obtuse that if one of the factors 
 of the production of supplies receives 
 more than a just return in profits, an 
 unreasonable and inequitable net in- 
 come, it inevitably follows that either 
 the other factor is receiving less than 
 its just share, or else the community 
 from which comes the demand and is 
 being exploited in the name of service 
 is paying too dearly for its supplies. 
 
 In every commercial country com- 
 petition at its best is only an unequal 
 struggle between weak individuals and 
 stronger combinations, whose advan- 
 tage too often consists in superior 
 system and greater economy, which, if 
 left without Government restraint, 
 become masters of the field, with all 
 the abuse of power which that mastery 
 implies; therefore, it becomes impera- 
 tively necessary to a political de- 
 mocracy founded on justice that the 
 Government which is the greater and 
 should be the most powerful monopoly, 
 in which every citizen is, potentially, 
 a stockholder should so regulate and 
 control all other combinations and as- 
 sociations of a monopolistic character 
 in a way to preserve all the economies 
 and just advantages of "Big Business" 
 and to eliminate all the wrongs and 
 
injustice certain to exist in the ab- 
 sence of such restraint. 
 
 Let us examine briefly recent acts 
 of our own Government, and some of 
 those of other countries, in the nature 
 of regulation and control of "Big 
 Business," pointing toward the goal 
 which it should be the object of every 
 nation to reach. The question which 
 first presents itself is: 
 
 "What is a just rate of interest or 
 profit (almost synonymous term) for 
 the use of wealth employed as capi- 
 tal?" 
 
 Every State and Territory in the 
 American Union has, as a necessity, 
 in the absence of Congressional ac- 
 tion, assumed the right and duty to 
 prescribe a legal rate of interest, not- 
 withstanding the fact that none of 
 them has the constitutional power to 
 coin money or supply the same, or 
 fix the value thereof, a right reserved 
 exclusively to Congress. The lack of 
 uniformity of such rates is proof suffi- 
 cient that there is no standard rate 
 fixed by Federal (the only competent) 
 authority. The nearest approach to 
 fixing a rate by Congress is found in 
 the law relating to National banks, 
 which prescribes that, in the absence 
 of a State law fixing a rate, wherever 
 a bank is located, the legal rate shall 
 be 7 per centum per year. 
 
 Judicial legislation has been 
 equally fickle and indefinite. As 
 familiar examples we have the de- 
 cision; of the United States Supreme 
 Court, rendered January 9, 1909, in 
 the suit of the City of New York and 
 others against the Consolidated Gas 
 Company, where it was held that a 
 service rate fixed by law which will 
 yield the company a net profit of 6 
 per cent a year on its business is not 
 confiscatory. 
 
 In the suit of Simpson vs. Shepard, 
 the celebrated "Minnesota Rate" case, 
 decided June 9, 1913, quoting briefly 
 from the text: "Nor, in the absence 
 of Federal action may we deny effect 
 of laws of the State enacted within 
 the field which it is entitled to occupy 
 until its authority is limited through 
 the exertion by Congress of its para- 
 mount constitutional power." 
 
 Now, quoting the syllabus: "13. A 
 State may not fix the intrastate rate 
 of an interstate carrier so low that 
 the carrier's entire revenue from all 
 its business in a State, both inter- 
 
 state and intrastate, after paying only 
 operating expenses and taxes, amounts 
 to only about 4 per cent on the value 
 of its property in the State." 
 
 It is in rendering the decision of 
 the court (prepared by Justice 
 Hughes) that the court assumes the 
 prerogative of determining what is a 
 "reasonable" rate of profit. 
 
 It is the failure of Congress to exert 
 its paramount authority and to per- 
 form its obvious duty to fix a standard 
 rate of interlest, and declare a just 
 and reasonable rate of profit, which 
 has made it necessary for the States 
 to do so, resulting in the confusion 
 and instability of those matters, to 
 the great detriment of commerce and 
 perpetuating the strife between Capi- 
 tal and Labor. 
 
 So far as is known to the writer, 
 no government has determined and 
 fixed a rate of interest and profit as 
 the result of scientific investigation. 
 Every act of government on the sub- 
 ject has been arbitrary and in de- 
 fiance of the law of supply and de- 
 mand, and correspondingly abortive 
 from the standpoint of justice. 
 
 Section 7 of the "Federal Reserve 
 Act" is the most conspicuous at- 
 tempt of government to limit the 
 profits of "Big Business," in the pro- 
 vision limiting the annual dividends 
 of stockholders to 6 per cent, and tak- 
 ing the excess, if any, by the Govern- 
 ment as a franchise tax. These stock 
 holders, however, are the member 
 banks. That provision, therefore, is 
 only "a gentlemen's agreement" that 
 the banks will not exploit each other 
 to exceed 6 per cent, but in their 
 dealings with the general public they 
 remain unrestrained as to the profits 
 they may extort. 
 
 The international war has caused 
 the enlargement or extension of the 
 principle discovered in that Regional 
 Bank provision, and not only the 
 United States, but each of the other 
 belligerents in response to the obvi- 
 ously just demand that property as 
 well as men shall be subject to the 
 draft has levied a tax on "excess 
 profits" and swollen incomes, without, 
 however, curbing the methods of 
 acquiring those excess profits and un- 
 righteous incomes. 
 
 It must be obvious to anyone who 
 thinks that no part of the money taken 
 by taxation from excess profits or 
 
swollen incomes is ever restored to 
 the persons or communities from 
 whom it was originally extorted. 
 
 To have excess, there must first be 
 a normal. A normal profit or income 
 should be just and ethical. The war 
 has brought excess profits so conspicu- 
 ously to the public view as to create 
 a demand for drastic legislation as a 
 deterrent, and the pity of it is, the 
 Government, as yet, has made no ef- 
 fort to abridge the process of acquir- 
 ing excess and unrighteous profits and 
 incomes, but has contented itself with 
 exacting a share of the loot, which is, 
 in essence, compounding or winking 
 at a damnable wrong which it is in 
 duty bound to brand a felony. 
 
 Recent income returns and labor 
 statistics for many years (see U. S. 
 Statistical Abstract) disclose startling 
 facts, which ought to make every 
 American citizen look well to his civic 
 duties, as a matter of self-preserva- 
 tion. For example: In the year 1913 
 of the one hundred million people in 
 the United States only 357,598 had 
 net incomes of over $3000. Of these, 
 84 persons had net incomes of $300,- 
 000; 44, over $400,000; 91 over $500,- 
 000, and 44, over one million dollars. 
 The record stops there. 
 
 In the year 1914 the number of re- 
 turns fell to 357,515, but the larger 
 incomes rose in number as follows: 
 There were 147 in the first, 69 in the 
 second, 114 in the third and 60 in the 
 fourth class, respectively. 
 
 In the year 1915 the total num- 
 ber of returns fell to 336,652, and the 
 larger incomes increased in number 
 as follows: There were 254 in the 
 first, 122 in the second, 209 in the 
 third, and 120 in the fourth class 
 respectively. 
 
 To speak of the net income of the 
 average American wage-earner is a 
 mockery. 
 
 At and for a long time previ- 
 ous to the outbreak of the Euro- 
 pean war the yearly gross in- 
 come of the average American 
 laborer did not exceed $400, and 
 today it does not exceed $500, all 
 of which is an appalling object 
 less in wealth centralization. 
 
 These facts and figures ought to 
 suffice to show how imperative is the 
 duty of Congress to inform itself as 
 to what would constitute a normal, 
 ethical and just rate of interest and 
 profit and to legislate to establish that 
 rate, and then the tax on excess profits 
 and swollen incomes would take the 
 entire excess, not as a dividend of a 
 flourishing but unrighteous enterprise, 
 but as one of the penalties for ex- 
 tortion and unmerciful exploitation, 
 the final object of every private 
 monopoly. 
 
 The necessity for establishing such 
 just rate will be made more obvious 
 by the report of the Interstate Com- 
 merce Commission, now engaged in 
 taking account of the physical value 
 of the railroads of the country, to be 
 used as a basis for computing service 
 rates, otherwise that arduous work 
 will have been useless, and the Gov- 
 ernment be left to the unscientific 
 method of regulating freight and pas- 
 senger rates now and heretofore in 
 vogue. 
 
 If it requires the labors of a Federal 
 Interest Commission, which seems 
 probable, to determine what is a just 
 and normal rate of profit and in- 
 terest, not a day should be lost in 
 creating such commission. When such 
 rate is once determined, it will be 
 the duty of Congress to declare it, 
 and to see to it that a sufficient sup- 
 ply of money and capital is provided 
 to run the legitimate business of the 
 country upon such normal and equi- 
 table basis which will go to promote 
 peace betwen Capital and Labor and 
 be a precursor of peace among the 
 nations. 
 
 Let us prosecute, with all our might 
 to a successful issue, the war against 
 the despotism of our foreign foe, 
 otherwise the liberty to shape our 
 own destiny and to promote a truer 
 democracy will be lost for a thousand 
 years ; but while we fight irresponsible 
 tyranny abroad, let us legislate for 
 greater liberty and economic justice 
 at home. 
 
 H. IX 
 
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Citizen Print Shop ^>203 New High St 
 
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 Syracuse. N. Y 
 
 MF J*N. 21. 1908 
 
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 UNIVERSITY OF CALIFORNIA LIBRARY