LIBRARY 
 
 UNIV6WITY OF 
 CALIFORNIA 
 
 SAN DIEGO 
 
 JOHN SCUDDER M^LAIN
 
 THE UNIV'SIP' ' IBRARY 
 UNIVERSITY Of C -it SAN DIKfl 
 
 IA JOLIA, CALIFORNIA ",20 3 SO C
 
 nf 
 
 CURRENT PROBLEMS 
 
 NUMBER 9 
 
 ECONOMIC ADDRESSES 
 
 BY 
 
 WILLIAM WATTS JpLWELL, LL.D. 
 *s 
 
 Professor of Political Science Emeritus in the University of Minnesota 
 
 MINNEAPOLIS 
 
 Bulletin of the University of Minnesota 
 July 1918
 
 COPYRIGHT 1918 
 
 BY THE 
 UNIVERSITY OF MINNESOTA
 
 CONTENTS 
 
 The Ethics of Business 3 
 
 Trusts 31 
 
 The Single Tax 49 
 
 Socialism True and False 73 
 
 The New Economics. . . .91
 
 THE ETHICS OF BUSINESS
 
 THE ETHICS OF BUSINESS 
 
 The following address was prepared for and used as one of a series 
 of lectures offered by the University Extension Department of the 
 University of Chicago, in the winter of 1905. It was given in Des 
 Moines, Iowa; Kansas City and St. Joseph, Missouri; Saint Paul and 
 Minneapolis, Minnesota. It was later delivered before various audiences. 
 
 For a discussion which must close before bedtime, a speaker 
 may not follow the example of Diedrich Knickerbocker, who 
 began his famous History of New York with the creation of 
 the, world. We are obliged to assume that some things have 
 been settled. I will ask that these four be so assumed: 
 
 First, the institution of private property; second, the right 
 and duty of organized society to control that institution; third, 
 the advantages, individual and social, of the division of labor; 
 fourth, the advantages, individual and social, of exchange. These 
 granted, it is evident, or will be after a little reflection, that 
 at some time in the social evolution the trader must appear. 
 
 Before the trader, however, came the market. The re- 
 searches of Sir Henry Maine and others have revealed the origin 
 of the market, for the Aryan or Indo-European family of man- 
 kind at least. Within those primitive village communities into 
 which our remote ancestors were grouped, the exchange of prod- 
 ucts was merely a matter of neighborly accommodation. This 
 man had fish, a kinsman had game, to spare. They exchanged. 
 Both were gratified; neither thought of an advantage gained 
 over the other. Doubtless custom, which in primitive commu- 
 nities stands for law, moderated the trifling transactions. 
 
 Exchanges, however, arose between adjoining communities 
 and a custom grew of resorting to convenient gathering places 
 on the common border line the mark they called it. Here on 
 the mark the market came to be held at customary times and 
 seasons. Here the dealings were no longer those of fellow 
 tribesmen, but of strangers; and, among all primitive men, 
 stranger and enemy were the same. To get the better of the 
 bargain was not merely allowable, it was meritorious. Un- 
 mitigated competition was the rule of the market, and abso- 
 lute title passed to every article which changed hands. 
 
 "The general rule of law [the common law of England], is that all 
 sales and contracts of any thing vendible in fairs and markets overt,
 
 4 WILLIAM WATTS FOLWELL 
 
 [that is, open], shall not only be binding between the parties, but also be 
 binding on all those that have any right or property therein." 1 
 
 But, the gathering of the clans for purposes of barter could 
 not continue indefinitely. That meant the suspension of in- 
 dustry, absences from home, and weary marches. It meant 
 great loss of time and anxiety while demanders waited on the 
 market for suppliers who should possess the specific goods 
 desired, and themselves be wanting the articles offered by the 
 parties of the first part. Long delays occurred while the parties 
 were pairing off and often the sun would go down on many 
 who had waited in vain. 
 
 Plato in his Republic has perfectly described the remedy for 
 such a state of things. 2 The merchant the marketman 
 appeared. Pitching his tent or booth at some ford or cross- 
 roads he announced himself as a general receiver and distrib- 
 uter of commodities. Had he come bare-handed his adver- 
 tisement ^iould have been mere wind. He did not come empty- 
 handed. He brought two bags, which gave him a power be- 
 yond that of any magician a bag of money, and a bag of 
 weights and measures. Standing behind his pile of coin, with 
 his balances and weights and cubit measure, he could do busi- 
 ness. He could buy of all sellers, and sell to all buyers, in . any 
 desired quantities. Did the trader invent these tools of his 
 craft, measures and weights; and coins, which are a species of 
 weights? This question is disputed. My guess is that he did. 
 If so, how great a debt is due him! Can you think of any 
 invention of greater moment to humanity, except that of 
 language ? 
 
 Because the primitive market was open only on certain days, 
 probably determined by phases of the moon, the early mer- 
 chant was itinerant and journeyed from market to market. 
 He took with him his two bags, and such merchandise as he 
 might expect to sell or exchange at the next stand. Here we 
 have the origin of the mercantile fairs of the Middle Ages, of 
 which we have notable survivals still in the book fair of Leipsic 
 and the great general fair at Novgorod in Russia. Although 
 the local market place and day, and the traveling merchant 
 continued in existence much longer than most of us would 
 suppose, they have disappeared. Every city, village, and hamlet 
 is a market place; all days but Sundays are market days; and
 
 ECONOMIC ADDRESSES 5 
 
 merchants are resident. Substantially the whole civilized world 
 is a market all the time. Some five millions of our country- 
 men are employed in the handling, the moving, and sale of 
 goods, about sixteen and one-half per cent of the working 
 population. 
 
 The establishment of the market, with its coin, weights, and 
 measures, was one of the great landmarks in the history of man, 
 and its development and extension have set the pace for the 
 march of civilization itself. Doubtless Adam Smith was cor- 
 rect when he said "it is the trucking disposition which originally 
 gave occasion to the division of labor," having already argued 
 that it fs the division of labor "which occasions . . . that 
 universal opulence" 3 which exists in modern society. One 
 might safely say that the market created industry. Where 
 there is a market, continuous and universal, goods are made 
 to sell. Barter with its exasperating limitations as to place, 
 time, the parties and their needs, disappears. Industry goes 
 on every day and steady streams of products flow like rivers 
 to the all-receiving ocean. 
 
 We have spoken as if money accompanied by weights and 
 measures was used by the primitive trader as a mere tool only, 
 an intermediary commodity to facilitate exchanges, a "medium 
 of exchange." He and his clients, however, found another use 
 for money, of equal account, at least. It served as a guide and 
 norm to the judgments and estimations of buyers and sellers. 
 Money became a "standard of value" a phrase convenient, if 
 not quite exact. Accordingly, the phenomenon the outward 
 fact of price appeared, and along with price the comprehend- 
 ing idea of value which pervades not only the market, but all 
 society. Value is only and always an idea, a thing of the 
 mind. 
 
 I submit the suggestion that price and value have no prac- 
 tical sense, unless in connection with a market, and merchants 
 trading there. The fact of price and the idea of value emerge 
 in the field of exchange, not in that of production. It is a 
 socialist heresy their fundamental one that Labor produces 
 value, Capital, none. "Hence," says the socialist, "capitalists 
 are parasites, if not robbers." The truth is, that Labor and 
 Capital, cooperating on and with Nature, transform raw mate- 
 rials into consumable goods and transport them to consumers.
 
 6 WILLIAM WATTS FOLWELL 
 
 Whether value shall be attributed to them, and price appear, 
 will depend on what happens in the market. If nobody wants 
 the goods, the producer only makes a laughing stock of him- 
 self by clamoring about the labor he has undergone; and the 
 capitalist, bewailing a lost investment, is equally ridiculous. 
 If a change of fashion crowds the market with buyers, the labor 
 cost "cuts no figure" in making price, as everybody knows. 
 
 It is in the market then, and not in the field or the shop, 
 that prices are made. The determination of "just price" was 
 a problem which allured and defied theologians of the Middle 
 Ages. In vain their prayers, exhortations, and excommunica- 
 tions; their canons and decretals. The market resisted and ruled. 
 Legislators have in many ages presumed to establish prices 
 by statute and ordinance, whether for commodities, or labor, 
 or the use of capital, mostly to no purpose, or worse than 
 none. Laws may declare prices; they can not make prices. 
 Our modern usury laws furnish abundant illustration of this. 
 Forces mightier than statutes make prices. These forces meet 
 and contend in the market, and contending they cooperate. 
 We call them, for shortness, demand and supply. 
 
 These familiar terms are not always used in their proper 
 sense. By demand the political economist means a body of 
 persons appearing in a market, desiring to obtain goods or 
 services for which they have something to offer in exchange; 
 by supply, another company who offer goods or services, desir- 
 ing to receive their equivalent in exchange. Under a money- 
 economy, demand is a requisition on the market for goods or 
 services by those who have money to buy with; supply is the 
 offer on the market of goods or services in exchange for money. 
 Demand brings money to take away goods. Supply brings 
 goods to carry off money. Mere desire or need of things does 
 not amount to demand; the mere possession of goods does not 
 constitute supply. 
 
 The Silverites of 1896 insisted that there is a universal and 
 unlimited demand for money, because people everywhere like 
 to have money. Logically they should have contended for a 
 correspondingly universal and unlimited supply of money. They 
 were not so absurd they asked only for some more. Only those 
 demand money, who have something to give in exchange for 
 money. Demand and supply, as thus explained, make prices in
 
 ECONOMIC ADDRESSES 1 
 
 the proper sense of the word. A rate, a stipend, a tariff, may 
 for a time be set up by some political or other authority. But 
 let the matter get into the market, and demand and supply 
 will promptly supersede authority, establish economic equa- 
 tions, and exhibit prices and wages proper. 
 
 Price, then, the market equation of social valuations, is the 
 outcome of successive and expected scrimmages between teams 
 of demanders and suppliers, and the merchant is umpire of the 
 game. He moderates between the exalted expectations of pro- 
 ducers, and the grudging concessions of consumers. It is his 
 function" to ascertain the probable amount of goods on, or to 
 come on, the market, and the probable amount which con- 
 sumers will take on terms satisfactory to producers. The effect 
 is to attract and maintain in the market a normal supply of 
 all desirable commodities. The merchant thus plays the part 
 of a prudent ship captain who husbands the provisions accord- 
 ing to the exigencies of the voyage. 
 
 The continuous and perennial performance of this function 
 has resulted in the establishment of what is variously called 
 "market price," ''customary price/' "normal price," or a 
 "general level of prices." Thanks to the moderating offices 
 of the market, producers are constantly retiring from enter- 
 prises less remunerative, to engage in others promising larger 
 returns, constantly aiming to supply the market with desired 
 goods in such quantities as will yield the highest profit. The 
 market thus becomes an economic balancing force. It con- 
 tinually directs industry into ever more profitable channels, 
 and at the same time warns against over-production in any 
 line. The market is the barometer of industry. 
 
 The further and natural result is a certain stability of prices 
 which, familiar as it is, is a truly wonderful economic phenom- 
 enon. Whoever will examine the market statistics of any con- 
 siderable period for which they exist, will be surprised, if, for 
 the first time, he notes the remarkable uniformity of price in 
 any and all staple articles of human use, and the generally 
 gradual shifting of price level. He will, it is true, find epochs 
 of revolution, but they are not frequent. Stability is the rule; 
 great and sudden fluctuation, the exception. The waves of the 
 market, like those of the ocean, do not disturb the general level.
 
 8 WILLIAM WATTS FOLWELL 
 
 Every modern taxing system presumes a general and stable 
 level of prices. Without that the burden would be intolerable. 
 
 "Stable prices are a necessary condition of social progress," says 
 Professor Simon N. Patten. 4 
 
 This stability of prices is as beneficent as it is wonderful. 
 Without it, modern great production and commerce would be 
 impossible. With it, the producer may plan and work in rea- 
 sonable expectation of reward, and the consumer may adjust 
 his expenditure to his income. The economic relations of men, 
 of associations, and of states become rational and orderly. 
 Indeed the stable prices of civilized countries may be taken 
 as a chief mark of their distinction from semi-civilized and 
 savage peoples. This statement just made in regard to stabil- 
 ity of price will be supported by any one present who has had 
 occasion to make a purchase in an oriental bazaar, spending 
 a morning in higgling and then paying three to five times the 
 local price. The time-saving consideration of prices and price 
 uniformity is of immense importance. "Money," said Carey 
 (he should have said "money in a market") "saves millions of 
 billions of minutes." With good reason, then, does the daily 
 newspaper give its page to market reports; the weekly and 
 monthly trade journals condense and compare the daily figures; 
 and annual and decennial quartos tabulate and sum up for 
 their respective periods. 
 
 I have thought it worth while to trace the development of 
 the petty fair of the full moon into the great world market of 
 modern times, and the transformation of the primeval huck- 
 ster into the resident merchant. I have not described, and can 
 not, the vast apparatus for packing, storing, and transporting 
 the countless millions of tons of merchandise constantly appear- 
 ing on the market, nor of the monetary and credit facilities 
 indispensable to trade. 
 
 These taken with market transactions, constitute business, 
 as distinguished from -industry. It is with business that we are 
 just now concerned. We need not seriously entertain the con- 
 tention formerly heard in certain political discussions that the 
 middleman is superfluous and ought to be eliminated. We 
 have been arguing and, I trust are agreed, that the middleman 
 is an indispensable social agent, without whom civilization
 
 ECONOMIC ADDRESSES 9 
 
 would be impossible. We can not, therefore, consent to abol- 
 ish the trader. Let socialists do that. 
 
 But it will be said, the business man is a bad man, and needs 
 reformation. This is no new insinuation. The records of 
 antiquity are full of testimony to his ill-repute. "The Persians," 
 says Herodotus, 5 "held trade in extreme contempt. Shops were 
 not allowed in public parts of towns. Only the lowest of people 
 were traders." A Greek prince might be a carpenter but not 
 a merchant; a pirate was much more reputable. 6 Aristotle held 
 trading and usury alike in great contempt, and advised that 
 traders -be compelled to reside and do their business in a special 
 forum, separate from that in which the public assemblies were 
 held. 7 Spite of the fact that a strong mercantile class existed 
 among the Romans, that people had no higher appreciation of 
 it than had the Greeks. Cicero declared the gains of mer- 
 chants to be mean and illiberal and merchandising itself a 
 badge of slavery. 8 
 
 "Those who buy to sell again as soon as they can are to be accounted 
 as vulgar; for they make no profit except by a certain amount of false- 
 hood. . . . Commerce, if on a small scale, is to be regarded as vulgar; 
 but if large, importing much from all quarters, and making extensive 
 sales without fraud, it is not so very discreditable." 
 
 The Hebrew prophet, Hosea, 9 voices the judgment of his 
 people and day: "He is a merchant; the balances of deceit 
 are in his hand; he loveth to oppress." And another Hebrew 
 prophet, Amos, 10 denounces those who make "the ephah small 
 and the shekel great" and falsify "balances by deceit," so as to 
 "buy the poor for silver and the needy for a pair of shoes." 
 When Jesus drove out the buyers and sellers from the temple, 
 and overturned the tables of the money-changers, He declared 
 to them that they had made the house of prayer a den of thieves. 
 English "society" still shuts its door to all who live by trade. 
 
 Such extreme denunciations as these are rarely if ever heard 
 in modern times; but is it not true that society is permeated with 
 a feeling that commercial success and strict integrity are hardly 
 compatible? Is not the trader expected to be "sharp" to the 
 verge of falsehood and fraud ? This is certainly an awful arraign- 
 ment. It squarely raises the 'question involved in the topic 
 assigned us for to-night's discussion "The Ethics of Business."
 
 10 WILLIAM WATTS FOLWELL 
 
 Ethics is a name of Greek derivation, for one of the oldest 
 of sciences, the science of conduct, closely allied to law, 
 the other side of law in fact, which early became a study by 
 civilized men. Hindoo, Hebrew, Egyptian, Greek thinkers, to 
 their great credit, inquired into sanctions of conduct and sought 
 for guiding principles of life. Middle- Age schoolmen kept 
 up the quest, and handed it on to modern philosophers, who, 
 divided into opposing camps, are still bombarding one another 
 with a fury akin to that of contending religionists. Intuitionists 
 clash with empiricists, hedonists oppose themselves to ration- 
 alists, and evolutionary utilitarians draw the fire of all parties 
 with unwelcome propositions of compromise. 
 
 Happily for our purpose we have not to arbitrate nor com- 
 pose the perennial contentions of moral philosophers. All 
 schools agree in these three things: (1) that all human 
 beings do form judgments as to conduct; (2) that they are con- 
 strained by feeling to govern conduct according to such judg- 
 ments; (3) that they do so govern conduct. All further consent 
 that men know that they do these three things. All developed 
 languages have a word which comprehends and connotes the 
 three. In English it is the word Conscience. It is a comfort- 
 ably elastic term perfectly suited to the every-day use of the 
 wayfaring man, and worries nobody but philosophers. To re- 
 peat the essence of conscience is (1) conscious judgment as to 
 conduct; (2) the rising of the appropriate emotion; (3) the reso- 
 lution of will to 'do the thing which ought to be done, or leave 
 undone the thing which ought not to be done. 
 
 At the risk of tedium it is important to remark that the word 
 conduct has no practical meaning for the individual man. The 
 preposition "con" suggests the social man. Conduct is the 
 guidance of human action in mutual "life and conversation." 
 Our actions on things without life, have no moral quality. 
 There is no right or wrong in physics or chemistry. Towards 
 men, all actions have an ethical aspect, for we live and move 
 and have our being in social groups. 
 
 The whole world for all time has been a training ground for 
 the practice of conduct. The moral judgments of men have 
 been embodied in habit and custom, in tradition and proverb. 
 Rights and correlative duties have been recognized, and sched- 
 uled, and sanctioned by the power of the state. They form the
 
 11 
 
 substratum of law. The cardinal obligations of men were graven 
 by the Divine Finger on imperishable stone, and published to 
 Israel, not as just, because commanded ; but commanded, because 
 just. All these tradition, the law, the decalogue, witness to 
 the moral law written forever in the hearts of men. 
 
 Rarely has it been suggested that any man or class ought to 
 be exempt from this law. Machiavelli proposed that the 
 prince 11 as the head of the state, should be free to do wrong if 
 the interests of the state seemed to require; and Machiavelli 
 is infamous. Napoleon claimed to be an exceptional character, 
 free from moral constraint and the claim has not added to 
 that chieftain's glory. 12 I have never heard it claimed that the 
 mercantile class ought to be set apart and permitted to regulate 
 conduct on exceptional principles. To the credit of that class 
 it must be said it has never claimed exemption. The veriest 
 cheat who ever sanded sugar or palmed off the wooden nutmeg 
 has had his extenuation ready. 
 
 The much derided milkman is by no means without conscience, as 
 witness this from Harper's Bazar: "James," said the milkman to his new 
 boy, "d'ye see what I'm doin' of?" "Yes sir," replied James, "you're 
 a-pourin* water in the milk." "No, I'm not, James, I'm a-pourin' milk 
 in the water. So, if anybody asks you if I put water in my milk, you 
 tell 'em, 'No.' Allers stick to the truth, James." 
 
 There is a profound if recondite truth in the French proverb, "Qui 
 s'excuse, s'accuse." He who excuses himself, accuses himself. Any 
 apologist confesses. 
 
 . Many an amiable shopkeeper justifies himself in floriated 
 and extravagant advertisements by a feeling that somehow, in 
 Paddy's happy phrase, "the truth don't fit." Whether the trad- 
 ing class has any notable eminence in departures from rectitude 
 is a question for the jury and this audience may, if it so please, 
 take that part. My counsel is to deliberate patiently before 
 declaring your verdict. 
 
 We shall do well if we remind ourselves at once of certain 
 cautions to be observed when we come to forming moral judg- 
 ments. Voluntary actions only, as already suggested, come 
 within the sphere of ethics. No one can be held responsible for 
 action which is enforced, or prompted by insane delusion. 
 Allowance has always to be made for pardonable ignorance, 
 for surprise, for overmastering temptation, and for bad educa- 
 tion and example.
 
 12 WILLIAM WATTS FOLWELL 
 
 The trader occupies an exposed and critical position. A 
 little while ago I spoke of him as the umpire in a game of 
 exchanges, played by producer and consumer. That statement 
 needs correction. The trader is not a disinterested moderator 
 of the sport ; he has a deep interest in the game, and it is adverse 
 to those of both parties. He gains on one hand by lowering 
 price to the producer, and on the other by raising it on the 
 consumer. He thus stands a good chance of getting the ill- 
 will of both. As an intermediary proprietor he must assure 
 himself of the measure and quality of goods acquired, and 
 stand responsible to customers to deliver what he has bargained 
 to them. It is not always the merchant's fault that shoddy and 
 brummagem are brought to market. He may of course con- 
 nive in the fraud. Herbert Spencer's fearful catalogue of ras- 
 cality in his essay on The Morals of Trade is chiefly devoted to 
 an enumeration of the shams and adulterations prepared by 
 manufacturers in the expectation that traders of easy virtue 
 will work "them off on a public which prefers cheapness to 
 honest goods. 13 
 
 The merchant's calling is indeed a precarious one. The 
 shrewdest natural talent for merchandizing, exercised with un- 
 sleeping vigilance, does not suffice to avert losses and even 
 collapse. He must expect, and so far as possible, provide 
 against loss from undue extensions of credit, from sudden 
 avalanches of goods onto the market, from freaks of fashion 
 which may leave shelving and storage crammed with valueless 
 stuffs, from the irruption of new competitors, from the under- 
 selling of piratical "combines," and from disturbances in the 
 money market, arising in distant cities, and possibly, in foreign 
 lands. We count those men of business fortunate, who out- 
 ride the waves of one of our great periodic commercial crises. 
 
 I can not believe the oft-repeated estimate, that ninety- 
 five or ninety-six out of every one hundred men who engage in 
 business, fail, to be anywhere near the truth. It is, however, 
 the exaggeration of a truth, that some large proportion does 
 succumb to the risks of trade. Modern bankruptcy laws indi- 
 cate a public opinion that business failures must be numerous, 
 are inevitable, and are not generally due to dishonesty. From 
 all this it is to be inferred that if the trading class is less honest 
 than others, it is to mighty little profit. On the main question
 
 ECONOMIC ADDRESSES 13 
 
 David Harum would do well to preserve a discreet silence, and 1 
 the manufacturers of oleomargarine, filled cheese, and mixed flour 
 had better throw no stones. It might turn out that the mer- 
 chant merely improves his more frequent and insidious oppor- 
 tunities for crookedness. 
 
 And the newspaper man, breaking a commandment of the Decalogue 
 and a statute of the state more than fifty times a year, has he any good 
 ground from which to arraign his neighbor for sharp practice in trade? 
 
 The newspaper man, I am bound to add, by the way, has an apolo- 
 gist in the person of a near relative of Mr. Dooley, the well-known Chicago 
 saloon keeper who has lately enriched the literature of American humor. 
 Says this unknown apologist of the much-maligned newspaper man, 
 "Shaughnessy, I'm ashamed of your stupidity. Do youse not know 
 that the newspaper man is both seduced and intimidated. It's foorced 
 he is by an irresistible public demand, including reverend clergy and 
 ruling elders and by pew-holders galore who would reduce the whole 
 printing office to original molecules if they couldn't get their fill of Sunday 
 advertising. The Christian publisher is foorced to get out the Sunday 
 edition, to prevent the devil from occupying the whole field. And 
 there's the more, that the Christian matron must and will have the 
 comic supplement to keep the children from raising ould Cain and dis- 
 turbing their father while she is lingering in the sanctury wid her seal 
 sacque and picture hat. Let me hear no more of yer nonsense. What's 
 the additional fifteen per cent and more of business profits, but a just and 
 reasonable compensation for the violence done to the conscience of the 
 poor newspaper man foorced to go ferninst his conscience?" 
 
 This levity may be misplaced, but the newspaper man is entitled 
 to his hearing and the public is bound to take its full share of responsi- 
 bility for broken law, if any there be. 
 
 It was long a wonder to me how a society permeated with 
 falsehood and covetousness, could cohere and remain in exist- 
 ence. On a late visit to one of our island possessions I found 
 the secret, and I don't mind . confiding it to you. It is this: 
 where everybody lies, nobody is deceived. I might have learned 
 the same lesson nearer home. A New York City statesman 
 remarked that he could not understand the old story about 
 Diogenes hunting around with a lantern for an honest man. 
 "Are you surprised that honest men were so scarce in Athens?" 
 he was asked. "Naw. Wat I don't see is, w'at he wanted 
 wit 'im." 
 
 A merchant of Rhodes held the whole remaining stock of 
 wheat there and the price had been forced to an enormous 
 figure. He alone knew that in three days vessels would arrive
 
 14 WILLIAM WATTS FOLWELL 
 
 from Alexandria with full cargoes. Query : What was his duty ? 
 Was it to reveal his knowledge and sell his corn at the ordinary 
 price ? Cicero, the heathen, says "Yes" ; certain Christian philos- 
 ophers have answered "No." 
 
 "In my opinion then . . . the corn merchant at Rhodes . . . 
 ought not to have kept his buyers in the dark. As to silence being no 
 concealment, it becomes so, if for your own profit you keep others in the 
 dark as to things that you know, and at the same time concern them to 
 know." 14 The high-minded heathen adds in the next chapter, "Now can 
 there be doubt of the nature of concealments of this sort, and of the 
 character of those who practice them? They surely are not consistent 
 with that of an open, well-meaning, generous, honest, worthy man; but 
 of the crafty, the sneaking, cunning, deceitful, wicked, sly, juggling, 
 and roguish." 
 
 For my part I side with the Roman for the reason that the 
 man should outweigh the merchant. But I meant to give only 
 a single illustration of the awful strain put upon a trader. The 
 merchant njay well say a loud amen to the prayer, "Lead us 
 not into temptation." 
 
 We have now unconsciously drifted to the position that the 
 business class, all things considered and allowed, is no better 
 and no worse in point of morality than the rest of us. But I 
 think it but justice to add that it is among bankers and mer- 
 chants in the great centers of business where a nod nails a con- 
 tract for millions, that the most glorious illustrations of integrity, 
 fair dealing, and honor which this world knows, are to be found. 
 
 "Perhaps there are no two men living in the world to-day who 
 would make an oral contract involving a billion dollars except J. Pierpont 
 Morgan and Andrew Carnegie. These spirits, each courageous, daring, 
 confident, entered into such a contract." The necessary papers were not 
 executed till some days after. 15 
 
 As to the morals of general society, there is room for dis- 
 crimination between the statements of political speakers and 
 religious teachers. The stump orator, bowing to the "majesty 
 of the people," never tires of assuring them that they are wise, 
 incorruptible, and capable of deciding all questions of state. 
 The preacher, magnifying his office, and desirous to show us 
 our true "state and standing in the world," assails our reluc- 
 tant ears with such passages as, "there are none righteous, no, 
 not one;" we are all gone out of the way; sinners by nature and 
 more so by practice, "there is no health in us." Neither the
 
 ECONOMIC ADDRESSES 15 
 
 preacher nor the politician expects his statements to be taken 
 in their bald literalness, and we certainly do not so take them. 
 Still we do well to trust the demagogue so far as he expects us 
 to, and to give heed to the warnings of the preacher, even if we 
 do not believe in total depravity. 
 
 The problem of moralizing business then, is but part of the 
 larger problem of moralizing general society. Trite and hack- 
 neyed as the word is, I can find no other which comprehends 
 all means of solving both the greater problem and the less than 
 the word education education in schools, in the family, and the 
 social circle, by law and by gospel, by history and biography, 
 and by the example of living men. Turning to the smaller 
 problem, that of moralizing business, it is important to note 
 how tardy the business world has been to call for the assistance 
 of the teacher and school. The physician and the lawyer long 
 ago made their standing in the learned world. The chemist 
 and the engineer have won their citizenship in the republic of 
 learning. The farmer has got his foot over the threshold. But 
 the man of business has raised no clamor for more light and 
 more science in our country. I have nothing to say which 
 might discourage the business schools or colleges already found 
 in all our considerable towns. They are doing a useful service 
 and have won their way with little sympathy, and often against 
 the resistance of the merchants. But there is need of a higher 
 and wider schooling than they have yet aspired to give. They 
 are concerned with the mere tricks of trade with the mechan- 
 ical routine of the counting room, the warehouse, and the bank. 
 The business college itself calls for, and society needs, a more 
 generous education, one which opens out on the great world, 
 past, present, and future, which shall develop and train the 
 intellectual powers, and inform and inspire the moral faculty. 
 There is no reason why the merchant should not hold up his 
 head with all learned doctors. 
 
 Here I need not argue. Already a few of our more enter- 
 prising universities have opened their doors to the higher com- 
 mercial education. The fashion will spread, and we shall pres- 
 ently get the hang of the new pedagogy. A recent gift to one 
 of these institutions was made with a condition that business 
 honor and morality shall be illustrated and inculcated. In the 
 next generation we should have a body of business men trained
 
 16 WILLIAM WATTS FOLWELL 
 
 in languages and history, in geometry and many sciences, in 
 political economy, in transportation and public finance, and 
 in business law. The Germans have been for some years train- 
 ing young men for world-business, and the graduates of their 
 schools are called to London and New York to fill high positions 
 in great houses. May we not rightly expect at length to find 
 in the market greater wisdom and a higher moral tone? Men 
 trained in the schools I hope for, will know that fraud does 
 not pay and honesty is something else than a policy. 
 
 Meantime there are betterments of trade morals going on, 
 which are both a cause and a consequence of trade customs. 
 The one-price plan, may be mentioned, which places all cus- 
 tomers on an equality. In my boyhood the making of ordi- 
 nary purchases at a store was called "trading." The customer 
 expected to haggle, and hoped to get a lower price than his 
 neighbor. The adroit salesman counted for much in those 
 times. Ttti custom of wholesaleing by samples shown by com- 
 mercial travelers, speaks loudly for the integrity of merchants. 
 Goods so sold rarely, unless by some accident, fail to correspond 
 to the samples. The extended use of trade marks and brands 
 gives confidence to consumers, and encourages honest manu- 
 facture. The Pillsburys could not afford to market a single 
 barrel of the "Best" flour not up to standard. The virtue of 
 manufacturers and dealers in goods marketed in cans and car- 
 tons has been greatly supported by the pure food laws enacted 
 in late years. What a commentary* on our Christian civiliza- 
 tion that such laws are necessary! The public grading of grain, 
 meats, and dairy products makes for good morals in business. 
 Ought not all staples of consumption to be standardized under 
 public inspection? All such customs are moralizing. There is 
 great need of reform in advertising, especially in print, which 
 costs the American consumer so many hundreds of millions a 
 year, and the government a good round sum for virtually free 
 postal distribution. It is but just to say that there has been 
 great reform, but there is room for more. 
 
 We need not pursue the special education of the business 
 class. That will at length take care of itself. Meantime the 
 general moralization of all classes must go on, and serve as an 
 atmosphere in which the moral improvement of any class may be 
 possible. Here comes the amiable socialist to say that the moral-
 
 ECONOMIC ADDRESSES 17 
 
 ization of general society is impossible where competition exists. 
 Only in the collectivistic state, where there will be no buying 
 and selling, where profit will be impossible, where private owner- 
 ship will be so curtailed that nobody will be covetous, and 
 where greed must shrivel and vanish, can men be truly moral 
 in their economic relations. I blame no socialist for his dream 
 and longing for a heaven on earth. If we could be sure that 
 Socialism could perform a tithe of what it promises we should 
 be without excuse if we did not vote it in to-morrow. But the 
 doubt about that and the certainty that no great state will or 
 can undertake the experiment of state socialism, within any 
 period which can be estimated, may justify us in politely shut- 
 ting the door on the seductive Marxian, "charm he never so 
 wisely." We must grind along in the old rut of individualism, 
 moderated by social control, and I suspect that our ethics will 
 be of a robuster sort than that of a collectivistic state from' 
 which the struggle for existence would be mostly eliminated. 
 
 Next comes the churchman to claim his immemorial right to 
 educate. There is no genuine morality, he claims, unless found- 
 ed on the orthodox faith and sanctioned by penalties reserved 
 in a future world. The moral education, he contends, is of such 
 overwhelming importance that the subordinate intellectual train- 
 ing ought not to be separated from it, and both should be under 
 ecclesiastical direction. There are many who hold to this 
 tradition. To the churchman, as to the socialist we are obliged 
 to say "We can not wait for you. The triumphant unity and 
 purification of the church is too far away. Meantime internal 
 dissension exhausts her powers and disenables her from the 
 task of educating the whole people." 
 
 And there are those who traverse the plea of the church and 
 allege that moral, as well as intellectual, training can be more 
 effectively given on the foundations of science and experience, 
 than on that of any religion. However that may be, general 
 society which has undertaken the education of the intellect, will 
 be constrained to essay that of the conscience. We may resent 
 the claim of the ecclesiastic that he alone should be entrusted 
 with the training of our children, and at the same time concede 
 his major premise that training in morals must go on along with 
 secular instruction. The truth is, the two are inseparable. 
 Every schoolroom is a forum in which conduct is illustrated.
 
 18 WILLIAM WATTS FOLWELL 
 
 No teacher can help being a guide of life to his pupils. I must 
 not fail here to commend for the instruction of young school 
 pupils the book of the late President Emerson E. White, espe- 
 cially Part Two entitled Moral Train-ing. Also the book of 
 Dr. Felix Adler on Moral Instruction. For grown-up students 
 and all adults Cicero's treatise entitled De Officiis has not been 
 surpassed. It was written for his son when a university student 
 at Athens. Translations are plentiful. That of Dr. Peabody 
 of Harvard is excellent. 
 
 It is perfectly practicable for the teacher, without trenching 
 on sectarian preserves, to expound and illustrate the conduct 
 which is noble and just, and show how character is built up by 
 good habits. What is more, he may constantly reinforce con- 
 science by alliance with taste, our aesthetic nature, and thus 
 demonstrate "the beauty of holiness." The daily walk and con- 
 versation of every teacher should be a continuous object lesson, 
 more effectrVe than any preachment of those cardinal virtues 
 scheduled by Plato, and inculcated by every moral philosopher 
 who has since lived: Temperance, Courage, Kindness, Wisdom, 
 Justice. 
 
 In a democracy there is no education of so great importance 
 as that which leads to the recognition of rights, and of the duties 
 which of necessity correspond to rights. The concession of 
 rights and the discharge of duties form, if not the whole of con- 
 duct, one half or one third of it. I have long been of the opin- 
 ion that excellent moral instruction can be given out of our 
 civil penal codes. The youngest child in the grammar school 
 can be taught what courses of conduct the law denounces as 
 crimes or misdemeanors, and why the state has provided punish- 
 ments for them. The school master need by no means confine 
 himself to the criminal law; the civil law abounds in material 
 for his use in teaching right conduct. Let us take two illustra- 
 tions. The first shall be that law of the person which guarantees 
 to every American citizen the dearest of his rights the right of 
 personal liberty. I mean the "Habeas Corpus Act" as the 
 English term it, which defines and sanctions "the privilege of 
 the writ of Habeas Corpus." Under this law any person who 
 is restrained of his liberty may apply to the courts for an im- 
 mediate inquiry into the reasons for his detention. If none is 
 found, the applicant is entitled to immediate release. A heavy
 
 ECONOMIC ADDRESSES 19 
 
 penalty awaits judge or sheriff who fails in his duty. Without 
 this right of "summary appeal for immediate deliverance from 
 illegal imprisonment," our bills of rights would be waste paper. 
 
 The Minnesota Habeas Corpus Statute forms Chapter 81 of the 
 General Statutes of 1913. The essential provisions are: 
 
 Every person imprisoned or otherwise restrained of his liberty, 
 (except persons duly committed or convicted) may prosecute a writ of 
 Habeas Corpus. 
 
 The form of the writ is: 
 
 The State of Minnesota to the sheriff of etc. 
 
 You are hereby commanded to have the body (habeas corpus it was 
 in old law Latin), of C.D. by you imprisoned and detained, as it is said, 
 .... by whatsoever name the said C.D. shall be called or charged, 
 
 before judge of the court, at on 
 
 the day of to do and receive what shall be then and 
 
 there considered concerning the said C.D. And have you then and there 
 this writ. Witness etc. 
 
 The penalty for wilful refusal by a judge to grant the writ when 
 legally applied for is $1*,000. A sheriff who refuses or neglects to produce 
 C.D. and return the writ may be committed to jail till he complies. 
 It is the duty of the judge immediately after return of a writ to examine 
 into the facts, and if no legal cause for imprisonment is found, to discharge 
 the prisoner. For neglect or refusal the judge is liable to impeachment, 
 and upon conviction to removal from office. A sheriff or other officer 
 neglecting to discharge a prisoner, whose release has been ordered is 
 liable to a fine of $1,000 and special damages as shown. 
 
 Our second illustration shall be "The Statute of Frauds,'"' 
 found in the law of property of all our Anglo-American states. 
 The object of this famous statute is to require all contracts of 
 serious importance, or extending over considerable periods of 
 time to be committed to writing and vouched by signature : so 
 that neither party, if disappointed in his bargain, may claim 
 there was no bargain, or if there were one, its terms were such 
 as he may dictate. In our day and country we are so wonted 
 to the beneficent operation of this law that we have become 
 unconscious of it. In proof that I do not exaggerate its im- 
 portance, let me give the opinion of that great American jurist, 
 Chancellor Kent. "The English Statute of Frauds and Per- 
 juries carries its influence through the whole body of our juris- 
 prudence, and is in many respects the most comprehensive, 
 salutary, and important legislation on record, affecting the 
 security of private rights." 16
 
 20 WILLIAM WATTS FOLWELL 
 
 The Minnesota Statute of Frauds forms Chapter 68 of the General 
 Statutes, 1913. The essential provisions are: 
 
 1. All conveyances of land real estate must be by deed in writing. 
 
 2. Contracts for the sale of personal property are void, unless 
 
 a. In writing signed by the party charged, 
 
 b. Or goods delivered in whole or part, 
 
 c. Or purchase money paid in whole or part. 
 
 3. There are certain oral agreements which are not declared void, 
 but for which no prosecutions are tolerated. These are 
 
 a. Agreements running for more than one year, 
 
 b. Agreements to answer for the debt, default, or doings of 
 another, 
 
 c. Agreements in consideration of marriage. 
 
 Any intelligent boy or girl of twelve could grasp the main 
 purposes and benefits of these laws, and the knowledge would 
 be far more useful, and quite as interesting as the history of 
 the Ancient Persians, the solution of cubic equations, or the 
 scanning of iambic pentameters. I can think of no solider 
 foundation $pr the inculcation of practical morality than such 
 laws. 
 
 Other materials there are in abundance for the use of the 
 teacher of morals. I can mention only literature especially 
 the literature of song, of parable, and of proverb, all crowned 
 by the treasures of the English Bible. I trust that we have 
 kept in mind the truth that morality is not a matter of the 
 heart alone that it takes right knowing to awaken the right 
 feeling which in turn can rouse right willing. 
 
 There is another education of the whole society most neces- 
 sary an economic education. I am not about to recommend 
 that political economy be introduced into our common and 
 graded schools. That may wait till political economists come 
 to an agreement as to what that science embraces, and I sus- 
 pect that agreement will have the same date as the complete 
 unification of theologians as to the content of the orthodox 
 faith. No, I mean something simpler, and practical an eco- 
 nomic training of children in both school and family. Our chil- 
 dren should be early taught the qualities and merits of eco- 
 nomic goods, of houses and their furniture, of domestic animals, 
 of clothing, foods, and merchandise of many kinds. They 
 should learn to distinguish the genuine from the spurious, the 
 tasteful from the tawdry. They should be entrusted with 
 money and sent to the market to buy, and encouraged to form
 
 ECONOMIC ADDRESSES 21 
 
 sound opinions as to prices. Fortunate are those children whose 
 parents can give them opportunity to earn money by labor. 
 The boy who has earned a dollar by the sweat of the brow has 
 a sense of value and utility impossible to the one who has not 
 labored. The man who has not labored has not been educated 
 and knows neither himself nor the world. 
 
 All children should be taught to postpone the good of to- 
 day for the better of to-morrow. They should be trained to 
 the saving habit, and to make it a matter of conscience to pro- 
 vide against the rainy day, against old age, and possible earlier 
 incapacity for work. 'The postal savings banks now being 
 established contribute to the economic education we are con- 
 sidering. Abstinence from useless and injurious luxuries should 
 be inculcated in every family and every school. Thanks to a 
 crusade preached by a body of brave earnest women, the laws of 
 many states already require instruction in the effects of alcohol 
 on the human system. We are still concerned with the eco- 
 nomics of a species of luxurious consumption which costs the 
 country much more than a billion dollars a year, with nothing 
 substantial to show for it. Shall we include in our scheme absti- 
 nence from tobacco and other narcotics ? Logically we ought to, 
 but what is the use of preaching when the public men of the 
 country neutralize it all by their example? I have long been 
 accustomed to say to my men students: Smoke tobacco if you 
 like it and think it shows you manly. I have so far shunned 
 the habit, but I can not believe the practice wholesome or 
 cleanly. But please yourselves; I have no sermon to preach 
 to you, so long as the governor of the state, the bishop of the 
 diocese, and the president of the university set you the example. 
 
 Nevertheless the General Statutes of Minnesota under the 
 head of "Crimes against morality, decency, etc.," provide that 
 every school pupil under age who shall smoke or use cigars, 
 cigarettes, or tobacco in any form in any public place shall be 
 guilty of a misdemeanor, and be punished for each offense by a 
 fine of not more than ten dollars, or by imprisonment in the 
 county jail for not more than five days. And any person who 
 furnishes a minor pupil with tobacco in any form is guilty of a 
 misdemeanor, and may be punished by a fine of fifty dollars or 
 thirty days imprisonment. 17
 
 22 WILLIAM WATTS FOLWELL 
 
 Finally, the art of bookkeeping should be taught to all along 
 with writing and arithmetic. This system of personal and 
 domestic statistics is certainly of importance to every member 
 of society. The practice of account-keeping begets frugality, 
 keeps peace between neighbors, checks extravagant expendi- 
 ture, and keys up honesty all round. Albert Gallatin thought 
 a Secretary of the Treasury would do well to understand book- 
 keeping. 18 
 
 Such economic training of children would do much towards 
 moralizing society and the market. 
 
 But, training is not enough. Sound judgment must be 
 reinforced by adequate knowledge. That would be an ideal 
 market where large numbers of demanders and suppliers resort- 
 ed, each and all perfectly informed as to all conditions affect- 
 ing values. It would then be equally impossible to gull sellers 
 with suggestions of glut, or deceive buyers with insinuations of 
 scarcity. ^Such a market there has never been, and the trader 
 has been to a degree to blame for it. The articles of appren- 
 ticeship in vogue for centuries have bound merchants to instruct 
 their apprentices in "the art and mystery 1 ' of merchandizing. 
 The merchant has ever studied how to involve his transactions 
 in mystery. He does not take the public into his confidence, 
 and the public, apathetic and incurious, remains in deep igno- 
 rance of the qualities of goods, the range of supply, the cost of 
 production, ancj other conditions which affect price-making. 
 
 The ideal market will, of course, never exist on this planet; 
 but there may at length be something like it. Thanks to the 
 market reports of the daily and periodical press already men- 
 tioned, we are on the way to it. The casual newspaper reader 
 thirsting for "scare" news, little appreciates the immense social 
 and economic importance of those repulsive pages. As already 
 suggested, they contribute towards that stability of prices which 
 is so great a desideratum. But market reports are prepared 
 and published in the interest of business men. We need an 
 apparatus which at all seasons shall keep the whole people in- 
 formed upon the state of industry and commerce the world 
 over. No private agency can be trusted with that eminently 
 public service. The call is for a great public economic intelli- 
 gence office, for the National Department of Statistics which is 
 to be and has begun to be. In the perfected state of the future,
 
 ECONOMIC ADDRESSES 23 
 
 when jails and prisons and penal codes shall have become un- 
 necessary, when wars shall have ceased, and the nation can save 
 the three hundred and fifty millions now annually spent on war 
 preparations and war consequences, the department of statistics 
 will be the leading one in the national, state, and local govern- 
 ments. When, through its agency, the whole people shall be 
 promptly and constantly informed of all market conditions (so 
 far as men can foresee them), no trader can deceive his cus- 
 tomers, no clique of speculators can rig the market. What a 
 support to virtue will such knowledge be! 
 
 But knowledge is not enough. It must be crowned with 
 wisdom, that wisdom which is better than the merchandise 
 of silver and more precious than rubies. If our people or any 
 people are to attain to that high plane of living where wisdom 
 is the principal thing, they must quench the wild, insane pas- 
 sion for riches which now possesses them and cease from mam- 
 mon-worship. They must cease from envying and imitating 
 the insane luxury of some millionaires, and must learn that the 
 idle-rich are useless and contemptible parasites. We need, all 
 of us, to put into practice a truth we all profess, that the pos- 
 session of wealth imposes obligations to society under whose 
 beneficent guardianship the rights of property are guaranteed. 
 Wealth is no charter to prodigality, or idleness, or lust. Sound 
 political economy and religion alike make wealth a trust, and 
 its owners, trustees. Slow as the process is, we can and must 
 hope for a day when our whole society will be moralized. Then 
 the merchant can no more say that it is impossible to do busi- 
 ness and speak truth with his neighbor. 
 
 Up to this point in our discussion we assumed an ordinary 
 course of things and have taken no note of the changes and 
 chances of this mortal life. Of these chances, men of business 
 may not be so careless. Stationed on the economic watch 
 towers, they must be unceasingly alert to note the effects of 
 wet and dry; of heat and frost; of foes, vegetable and animal, 
 to the growing crops at home and in distant continents; of the 
 discovery of new mines and deposits, especially of the money 
 metals; or the exhaustion of old ones; of strikes and lockouts 
 in the labor field; of new customs as to hours of toil and limits 
 on output ; of pestilences and famines ; of monetary contraction 
 or expansion, and commercial crises which in recent times are
 
 24 WILLIAM WATTS FOLWELL 
 
 frequent and perhaps periodic; and above all, of those changes 
 of fashion of which there is no science nor prevision. Long ex- 
 perience and trained powers' of observation may enable them to 
 estimate the force and directions of ordinary winds and cur- 
 rents and to trim their sails accordingly. Still, in all business 
 there must ever remain a big element of uncertainty. The 
 trader must ever be taking great risks, and all right-minded 
 people will concede him generous compensation, wages for his 
 labor, interest for his capital, profit for his risk and respon- 
 sibility. 
 
 How far from the minds of speaker and audience was the thought 
 that within a decade our peaceful country would be raising an army of 
 two millions of soldiers and expending twenty billions of money in a 
 single year of preparation for a war on another continent. The effect 
 on business is too obvious for remark. 
 
 But there are mingled with honorable men of business, those 
 who are no looking for mere legitimate gains. Such are not in 
 business for service but for plunder. We call them speculators. 
 This is a word of Latin derivation and from a root meaning to 
 see or behold: hence to watch or lie in wait for. The figure is 
 that of the eagle who watches for the fish-hawk rising from the 
 water, with his food, and swoops down to rob him. The specu- 
 lator exists in many varieties; one deals in actual commodities 
 and gains by cornering or overloading the market ; another trades 
 in fictitious commodities, with no expectation that any goods shall 
 change hands ; still another capitalizes hope and hot air. Except 
 in form hardly in that speculation as we now describe it, does 
 not differ from gambling the brutal, selfish, unsocial, demoral- 
 izing vice, everywhere and always condemned by right-thinking 
 people. To get something for nothing is a species of robbery, 
 even with the other party's consent. If it be asked here "Can 
 anybody draw the line between legitimate trading and gambling ?" 
 I am ready to answer: As a matter of casuistry it is difficult; 
 it may be impossible; but, as a matter of common sense and 
 practice, if any man sincerely desires to be on the right side of 
 the fence, he need not lose the flash of a fire-fly in getting there. 
 I think it but just, however, to our speculator to say that he 
 is often under awful temptation, when willing lambs without 
 number are waiting to be shorn.
 
 ECONOMIC ADDRESSES 25 
 
 Another assumption .has been tacit in this discussion, that 
 competition has been free, between man and man. Such com- 
 petition we have assumed to be essential to a true market, in 
 which an economic democracy exchanging freely, may establish 
 just prices through the natural interplay of economic interests. 
 To engross or forestall the market has always been a crime; and 
 to monopolize it, infamous. It has been the policy of our 
 American commonwealths, following ancient examples, to per- 
 mit the united action of citizens in industry and trade by incor- 
 poration into single quasi- personal associations. Up to the 
 middle of the nineteenth century such permission was granted 
 by special legislative acts called charters. When the railway 
 and steam machinery had made "large production" profitable 
 in many lines, the demands for charters became so numerous 
 and the danger of granting excessive powers so great, that 
 general corporation laws were enacted. The privilege of incor- 
 poration now came to be regarded as a right. With super- 
 fluous generosity, as I believe, our states, while granting liberal 
 powers to corporations, have relieved them of the responsibilities 
 which individuals and partners are, and ought to be, subject to; 
 thus giving them an advantage, which they have not been slow 
 to turn to account. 
 
 One of the incidental consequences of the war of the slave- 
 holders' rebellion was, that it served as an object lesson in or- 
 ganization on a great scale. The most conspicuous illustration 
 was the formation of "combines" for transportation and industry 
 which began within the decade after the war. We can not at 
 this hour enter upon the interesting story of their evolution, 
 from the original trust proper to the last phase of the holding 
 company and the merger. We are only concerned with the 
 last development, the object of which is to guarantee profits by 
 control of markets. The trust has extended its activity from 
 the field of production into that of exchange. Its adventures 
 are mercantile, not merely industrial. Massing a sufficient 
 number of establishments, and operating on a scale resulting 
 in virtual monopoly, the management undertakes to dictate 
 prices to material men, to impose its own rates of wages for 
 labor, and to figure its profits according to what the traffic will 
 bear. In some cases the supply of material has been acquired 
 or brought under control. In many cases the retailer, working
 
 26 WILLIAM WATTS FOLWELL 
 
 under a factor's agreement, is no better than a hired agent with 
 iron-clad instructions. The question which concerns us, is what 
 is to be the effect of the trust on the market? I submit this 
 answer. In so far as the trust can establish and maintain a 
 monopoly, it obliterates the market. Where there is but one 
 seller who may dictate prices, there is no market. Prices become 
 rates or tariffs and assimilate to taxes. There is no equating 
 of social valuations. 
 
 It may be suggested here that by reason of economies in 
 production and exchange the trusts can afford to undersell pri- 
 vate operators, and from purely selfish interest will refrain from 
 extortion; that they will be content with moderate, because un- 
 failing, profits, and will bless the world with straight goods and 
 low prices. Grant this if you will, but note that in the absence 
 of a market in which competition rules, you have no gauge of 
 prices. In the grip of a beef trust, how can you tell what steaks 
 and roasts^are worth? 
 
 This excerpt from an Associated Press dispatch may illustrate my 
 statement: Pittsburg, Pennsylvania, January 23. "The Standard Oil 
 Company has created a sensation by declaring that hereafter it will fix 
 the daily price of petroleum regardless of quotations on the oil exchanges. 
 . . . The principal buyer for . . . the Standard Oil Company has 
 issued the following notice: 'Buyers: the small amount of dealings in 
 certificate oil on the exchange renders the transactions there no longer a 
 reliable indication of the value of the product. . . . Daily quotations 
 will be furnished you from this office.' " 
 
 Grant that all our "combines" are and are to be conducted 
 by just and generous men, ambitious to play the role of princely 
 benefactors, will it be well for the people to surrender to them 
 the making of prices? In politics we have learned by imme- 
 morial experience that no one class can stipulate for another, 
 and that neither monarchs nor oligarchs, though they claim 
 to be inspired from heaven, can be trusted to rule without con- 
 stitutional guaranties. I can not therefore sympathize with the 
 declaration of a Christian railroad president to the Pennsyl- 
 vania coal miners: "The rights and interests of the laboring 
 men will be protected and cared for by the Christian men to 
 whom God in His infinite wisdom has given the control of the 
 property interests of the country." 19 How absurd and futile is 
 all such talk! Does any sane man believe that American la-
 
 ECONOMIC ADDRESSES 27 
 
 borers are going to place themselves under the watchful care 
 of any oligarchy of propertied men, however sincerely Chris- 
 tian? 
 
 In some way and at some time the American people will 
 regain and perpetuate the open market, germane to their de- 
 mocracy, where competition is between man and man. There 
 real prices may be made, and kept stable. Then equity may 
 prevail and virtue be supported. Do you think monopoly can 
 exalt the standard of business morality? Give me the ethics 
 of the open market. 
 
 A decade and a half has passed since this paper was written. That 
 effective competition has ceased in some industries is known to all. Many 
 think it can never be restored. Suggestions toward government price- 
 making abound. Still I am not disposed to retract or materially to 
 modify any of the foregoing statements. Governments can not make 
 prices in any proper sense of the word. They can establish rates and 
 stipends, but not prices or wages. Every proposition that I have heard 
 of for government intervention looks to the fixing of rates according to 
 value of services or cost of production. What determines value of services 
 and cost of production? Is it any decree or fiat? A revelation from 
 heaven might possibly do it. The only earthly way to ascertain values 
 is in the open market. Let government assure us liberty and justice in 
 the market and prices will make themselves. That government may 
 determine rates for public service corporations enjoying public franchises, 
 and for monopolizing industrial concerns, whether individual' or corporate, 
 on the basis of cost as ascertained in the open market, is a feasible and 
 reasonable proposition.
 
 NOTES 
 
 Blackstone, Commentaries 1 :49. 
 2 Plato, Republic 3:117. Jowett translation. 
 
 Works 3:51. Jowett translation. 
 
 ' Wealth of Nations bk. 1, ch. 3; bk. 3, ch. 1. 
 
 4 Publications of the American Economic Association 3:422. 
 The whole essay is commended to the reader. 
 
 5 Herodotus 1:153; 2:167. Rawlinson ed. 
 
 6 Thucy^des I bk. 1, ch. 5. Jowett ed. 
 
 7 Aristotle, Politics 1:19. Jowett ed. 
 
 8 Cicero, De Officiis. 
 >Hosea 12:7. 
 
 10 Amos 8:5,6. 
 11 11 Principe ch. 18. 
 
 " J. R. Seeley, Short History of Napoleon the First p. 254 el seq. Boston. 1901. 
 13 H. Spencer, Essays, Scientific, etc. 3:113. 
 Cicero, De Officiis bk. 3, ch. 12. 
 
 "Statement of Representative Stanley before House Committee on Rules, April 9, 
 1911 p. 8. 
 
 16 Kent, Commentaries 2:494. 12th ed. 
 
 17 General Statutes of Minnesota, 1913 sees. 8674-76. 
 
 '8 Writings of Albert Gallatin 1:72. Philadelphia. 1879. 
 
 " Attributed by newspapers to the president of the Reading Railroad system. Not 
 denied so far as known.
 
 TRUSTS
 
 TRUSTS 
 
 This paper was first read before the Minneapolis Board of Trade 
 in the winter of 1900. 
 
 It is the modern fashion to study institutions genetically in 
 order to ascertain their nature by learning how they came to be, 
 and to be what they are. The trust is a recent efflorescence 
 from seeds sown, some say by the enemy, in a soil which had 
 been long fitting to receive them. The preparation of that soil 
 began with the application of steam to manufacture not long 
 before the close of the eighteenth century. In the first third 
 of the nineteenth century, machine production and the factory 
 system had broken in upon, and extensively ousted, the domes- 
 tic and little shop industries which had been practised through 
 immemorial ages. But the factories of that time were small 
 and local because their markets were local. Large production 
 came in with the railroad, itself a conspicuous illustration of 
 that principle. The railroad extended the market from county 
 to county, and state to state, to embrace at length the whole 
 country, and at length to pass its frontiers. To-day our great 
 productive establishments demand nothing less extensive than 
 the market of the world, and boldly claim an international right 
 of access thereto. But the railroad was not the sole cause and 
 condition of the evolution of large production. That evolution 
 was the result of a complex of cooperating causes, from which 
 such elements as the following may be selected for enumeration, 
 but not for elaborate consideration in this paper. 
 
 1. Great and increasing wealth, the product of intelligent 
 industry applied to virgin soil, and deposits practically un- 
 limited; free land to any, and all, who would even promise to 
 settle and cultivate. 
 
 2. The capitalizing of constantly increasing increments of 
 this wealth and the development of banking institutions to col- 
 lect the small rills of personal savings and turn them into the 
 great channels of production. 
 
 3. The development among the people generally, of the in- 
 vesting habit, and the gradual extension of production in ex- 
 pectation of demand, at length making all large production 
 necessarily speculative.
 
 32 WILLIAM WATTS FOLWELL 
 
 4. The expanding enterprise and ability of men desirous to 
 wield the power of great wealth and to obtain the social consider- 
 ation attaching to great establishments. 
 
 5. The perfection of the art of organizing men and matter, 
 which reached its culmination in the last years of the slave- 
 holder's rebellion, or not much later. 
 
 6. The enactment in many states, beginning about 1850, of 
 general corporation laws, making it easy for a few enterprising 
 men to obtain the use of other people's money through exag- 
 gerated, though not necessarily untruthful, suggestions of large 
 dividends, and also making it easy to elude that responsibility 
 which private persons have to bear. 
 
 7. Steam transportation and electric communication opening 
 remote sources of material and distant markets for products. 
 
 8. The "protective tariff system" expressly planned and 
 operated to nourish nascent industries. 
 
 9. Rekiarkable developments in applied science, especially 
 in chemistry and mechanical physics, giving rise to numerous 
 inventions and discoveries available for, and specially advan- 
 tageous to, large operations. 
 
 The foregoing are outside causes. There were also inside 
 considerations which made large production profitable and 
 swelled its development. 
 
 10. Before all else, the harnessing of the forces of nature, by 
 means of water and steam, and other motors, and the utiliza- 
 tion of this power by means of machines, reaching its highest 
 form in the special machine and systems of interchangeable 
 mechanism. 
 
 11. The division of labor, assigning functions according to 
 strength, skill, and discretion, ever increasing in importance 
 with the multiplication of machines. 
 
 12. The utilization of by-products, as in the case of petro- 
 leum refining where three hundred by-products are said to be 
 successively eliminated. 
 
 13. Location of establishments with reference to power, labor 
 supply, raw material, marketing, and monetary facilities. 
 
 14. The credit system of doing business, giving obvious advan- 
 tages for the purchase of material in quantity, for the mainte- 
 nance of long and costly productive processes, and for carrying 
 the product until the time is ripe for sale.
 
 ECONOMIC ADDRESSES 33 
 
 15. The evolution of banking through many costly experi- 
 ments, into an effective, though still imperfect system, for the 
 custody, and transmission of moneys, the discount of commer- 
 cial paper, and the financing of large operations, public and 
 private. 
 
 The close of the forty years period, ending with the panic 
 year 1873, saw large production everywhere intrenched and 
 triumphant. The little shop, store, and factory had disappeared. 
 The roadside artisan had been transformed into the operative, 
 or had degenerated into the cobbler, the tinker, or the busheler. 
 The economy of large production had been completely demon- 
 strated, and was universally understood and acknowledged. 
 No new institution nor organism was needed to further incul- 
 cate or illustrate this economy. 
 
 The cataclysm of 1873 awoke the country to a new fact, 
 that large production had been overdone, that the productive 
 power of our motors and machines, engineered by men who 
 vainly trusted that the consumer could never fail, had been 
 turning out more goods of many kinds than the people would 
 pay for and consume. In the twenty years 1850-1870, the num- 
 bers of manufacturing establishments and of hands employed 
 a little more than doubled, the capital and product quadrupled; 
 census 1 in round figures shows; 
 
 1850 1870 
 
 Number of establishments 122,000 252,000 
 
 Employees 945,000 2,000,000 
 
 Capital 527,000,000 2,000,000,000 
 
 Product 1,000,000,000 4,000,000,000 
 
 The point to be emphasized here is that this vast and por- 
 tentous development of large production, accompanied by in- 
 finitesimal division of labor and processes, the multiplication of 
 special machines and interchangeable mechanism, and the utili- 
 zation of by-products, had taken place before the invention of 
 the trust. This being so, it is not open to apologists to insist 
 that the trust is simply an extention of a necessary and inevit- 
 able economic evolution, whose progress can no more be stayed 
 than that of the hurricane or tidal wave. So far as production 
 is concerned, the trust has introduced no new principle, no new 
 meliorations. The trust is not then an evolution, but a revolu- 
 tionary institution, in the field of exchange.
 
 34 WILLIAM WATTS FOLWELL 
 
 Let us trace its growth out of the soil prepared for it, 
 starting from the convenient epoch of 1873. Too much labor 
 and capital in machine production, cut-throat competition, and 
 rate-cutting had brought about a state of things which was in- 
 tolerable. Laissez-faire had gone to seed. The first experiment 
 toward relief was cooperative. Three stages are distinguishable. 
 
 1. Mere occasional conferences of operators in some line of 
 business frequently accompanied by festivity. Notes were com- 
 pared, suggestions interchanged, and a general understanding 
 come to. 
 
 2. Stated and periodical meetings of operators, resulting in 
 rate sheets, fee bills, price lists, and other devices for main- 
 taining common prices. 
 
 3. Compactly organized federations, undertaking to give re- 
 lief from the effects of competition, by (a) dividing the business 
 or (b) dividing territory, or (c) dividing receipts according to 
 agreed proportions. These associations soon came to be called 
 "pools" and frequently attempted to reward the faithful of their 
 members by premiums, and to visit the delinquent with penal- 
 ties. There was, however, no actual sanction to the pool, and 
 human virtue gave way when business could be attracted by 
 cutting a rate or price. When at length the judiciary declared 
 pooling to be "in restraint of trade" and therefore "illegal" 
 there were few to mourn at the funeral. 
 
 We are now about the end of the 70's. The old evils 
 persist : excessive competition, unstable prices, men utterly worn 
 out with the fight in the industrial arena. The second experi- 
 ment begins on a principle new to the generation, but not to 
 history. There were times in the course of the feudal system, 
 when many small proprietors were unable to protect their homes, 
 their fields, and their retainers against raids and forays of so- 
 called robber-barons. In such times some powerful noble would 
 come forward, and say to his weaker brothers, "Swear fealty to 
 me, give over your lands, array yourselves under my banner, and 
 I will be your protector." Then arose that custom known as 
 "commendation" under which independence was sacrificed to 
 security. The original trust seems to me closely analogous to 
 "commendation." I think it safe to declare that in every case 
 there was a "promoter" sharp, enterprising, not over scrupulous, 
 the counterpart of the great land protector under early feudal-
 
 ECONOMIC ADDRESSES 35 
 
 ism. Individual operators were just as keen to put themselves 
 under his leadership, as was he for the glory and profit of a grand 
 enterprise. Storm-tossed on the sea of competition, they longed 
 for a quiet haven wherein to rest. The trust proper was thus 
 born. Its essence, a small body of men (called trustees) domi- 
 nated by a promoter, to whom individual proprietors assigned 
 their plants, and stockholders their shares, receiving in exchange, 
 so-called trust-certificates. A large majority of existing estab- 
 lishments, sometimes rising to eighty per cent, were taken into 
 the fold, and the remainder, the less vigorous, were left to a 
 fate easy to foresee, and which they soon met. These trustees 
 managed the whole industry as if they were proprietors although 
 they had not a shadow of legal title to the properties; they 
 regulated output, assigned territory, and fixed prices, and held 
 them fixed by factors' agreements. They closed many establish- 
 ments embraced in the scheme; the sugar trust needed but one 
 fourth of the existing plants to supply the whole United States 
 with refined sugar, the whiskey trust shut up sixty-eight out of 
 eighty distilleries. Here this remark, however, is in point, that 
 had no trust been formed, many of these concerns would have 
 succumbed in the competitive struggle. 
 
 The trust was immediately, silently, and remorselessly effec- 
 tive. Production in many great lines was reduced to accord 
 with demand, and prices were held up to a level on which very 
 satisfactory dividends could be distributed. Extortion was not 
 necessary, and trust managers did not commonly resort to it. 
 Nevertheless the trust was obnoxious. The small operators 
 who had been "frozen out" raised a storm of denunciation. 
 Clamor ibat ad coelum and the sympathy of the people responded 
 to their appeals. Monopolies are always odious, and these trust 
 monopolies, because secret and irresponsible, were especially so. 
 It was rare that a public man wished, or dared, to stand up in 
 defence of a trust. Attorneys-general in many states found 
 plenty of common law precedents for attacking them, and legis- 
 latures multiplied statutes. About the beginning of the 90's 
 the courts became persuaded that trusts were illegal, and a few 
 such decisions as those in The Chicago Gas Trust Case, 2 New 
 York v. North River Sugar Refining Co., 3 and Ohio v. Standard 
 Oil Co. 4 brought trust managers generally to the same opinion. 
 Trusts in their original and proper form disappeared like the
 
 36 WILLIAM WATTS FOLWELL 
 
 morning dew, only to reappear in the new form of giant corpo- 
 rations. Because the change was not known, nor understood 
 by many, nor because the same concerns under the same 
 direction, and with the same agents and apparatus, seemed to 
 be going on, the old name of "trust" was held on to, and 
 still persists in our discussions. Von Halle observes that in 
 some instances, individuals owning trust certificates were 
 hardly aware of the change of organization, and much less 
 did they understand the nature of the change. Giant corpo- 
 rations have replaced the illegal and obnoxious "trust," but 
 the people, perhaps unjustly, delight to refer to them by 
 the old and obvious name. There are many variants in 
 the organization of these corporations, but one feature is 
 never lacking, that a small clique controls the central body, 
 and through it all its satellites. Where newly-formed, and not 
 merely reorganized trusts, they pursue the same policy of taking 
 in a large majority of previously independent concerns and leav- 
 ing the remainder to their fate. The result is practical monop- 
 olization of the particular industry. As if to render such or- 
 ganization and policy easy, certain states have enacted general 
 corporation laws of extraordinary liberality. New Jersey took 
 the lead in generous hospitality. Her laws require but one 
 resident director ; place no limits on capitalization ; exempt stock- 
 holders from liability for corporate debts; authorize stock issues 
 on the basis of property and rights of action; confer such latitude 
 of powers that ultra vires may be impossible; call for no publica- 
 tion of reports, and impose the lowest taxes (charter one fiftieth 
 of one per cent of capital, annual tax one tenth of one per cent 
 of capital). 5 The state of Delaware has very lately modified 
 her corporation laws, to make them even more liberal than 
 those of New Jersey. A company organized to promote and 
 assist incorporations in Delaware, allege the following advan- 
 tages of that state over those offered by New Jersey: 
 
 1 . Original fee twenty-five per cent less than in New Jersey. 
 
 2. Annual tax only half of that of New Jersey. 
 
 3. Meetings of stockholders and directors may be held any- 
 where. (New Jersey stockholders must meet in New Jersey.) 
 
 4. Stock and transfer book may be kept anywhere. 
 
 5. Difficult for intermeddlers to examine books. 
 
 6. Liability of stockholder absolutely limited.
 
 ECONOMIC ADDRESSES 37 
 
 7. Stock may be issued for services as well as property. 
 
 8. Certain classes of corporation specially favored, railroad, 
 telegraph, steam, heat, power, etc. 
 
 9. Annual report need not reveal secrets of corporation. 
 
 10. No record of amount of stock held by any incorporator. 6 
 Under the comity between states, guaranteed by the National 
 Constitution, corporations legally incorporated in any state may 
 pursue their lawful business anywhere. It is not, therefore, 
 strange that New Jersey, in particular, has become the home of 
 corporations, piratical and other. 
 
 It is reported that some fifteen thousand combinations with 
 an aggregate capitalization of eight billion dollars have been 
 organized under her laws. Of this number one hundred twenty 
 four, all having the character of trusts, with a capitalization of 
 three billion dollars were incorporated in the fiscal year which 
 ended September 28, 1899. At least two hundred New Jersey 
 corporations with a capital of five billion dollars have the char- 
 acter of trusts. It is under the liberal provisions of New Jersey 
 corporation law, that the Northern Securities Company has been 
 recently formed for the express purpose of taking over the own- 
 ership and control of the Northern Pacific, the Great Northern, 
 and the Burlington systems. There is no better illustration of 
 what is called in this paper, a trust-corporation. Its legality 
 has been attacked by the attorneys-general of Minnesota, and of 
 the United States. Minnesota's complaint is, that the "merger" 
 is violative of the statute forbidding the purchase of parallel 
 railway lines within her territory. The complaint of the 
 United States is, that the consolidation is a violation of the so- 
 called Sherman Anti-Trust Law. It would be a reckless thing 
 to guess at the outcome of the litigation, which will be looked 
 for with greater interest than any since the Dred Scott case. 
 Should the Northern Securities Company be forced to dissolve, 
 the properties of the three systems will still be in the control of 
 the persons who are now its stockholders. 
 
 On March 14, 1904, the Supreme Court of the United States by a 
 vote of five judges to four affirmed the decree of the Circuit Court dis- 
 solving the Northern Securities Company and on the ground of its 
 disobedience to the Sherman Anti-Trust Act of July 2, 1890. If that 
 organization did not in terms declare its intention to abolish competi- 
 tion its New Jersey charter was drawn in a way to grant opportunity
 
 38 WILLIAM WATTS FOLWELL 
 
 and power to do so, and the court presumed that under existing circum- 
 stances advantage would be taken of the opportunity. "The combina- 
 tion is," said the court, "within the meaning of the act, a trust." 7 
 
 The action of the United States Government in 1918 asking for 
 "continuances" in the cases of the United States Steel Corporation and 
 some others is a most notable emergence and leaves the citizen at a loss 
 what to expect. 
 
 Having thus ascertained the genesis of the trust, and de- 
 scribed its successive phases of evolution, we are ready for an 
 inquiry into its nature. A clear understanding of the character 
 of trust corporations is absolutely necessary in this discussion. 
 It is glibly remarked by their members and friends, that, as 
 already stated, the trust is simply a new advance along a line of 
 economic progress, as steady, and certain as the stars in their 
 courses; that it is 'the outcome of the operation of certain "laws 
 of trade" whose wheels will grind to powder all men and institu- 
 tions, which do not promptly get out of the way. Not to engage 
 in any sfrife about words, it may be conceded that the trust- 
 corporation is the outcome of an evolution; still it must be con- 
 tended that its development is not in the extension of the line 
 along which large production took place. Cheap production by 
 means of motors and machines, science, assorted labor, and 
 expert management had, as we have argued, culminated before 
 the trust was born. The trust had its origin, and its develop- 
 ment has been, in the field of distribution. The market, not 
 the shop, has been its sphere of action. The trust is an eco- 
 nomic institution sure enough. Its great end and aim is gain for 
 the proprietors, and what is more, sure gain; a profit "incor- 
 ruptible, undefiled, and that fadeth not away." 
 
 To ensure this profit, two means are employed; the first, 
 monopolization, practical monopolization of the whole plant, 
 and apparatus of an industry, of the regulated product, and 
 the agencies of distribution; also, in some cases, of the 
 supply of raw material. Ancillary to this is the destruction of 
 all competition in the purchase of material, the employment of 
 labor, and the sale of product. With such a dam across the 
 stream of an industry, it is easy to maintain a level of prices, 
 as sure as anything in this world can be, to show a balance on 
 the right side of the ledger, and take physical shape, in private 
 cars, and villas, and yachts, and I must add, in magnificent 
 endowments of hospitals, museums, libraries, and universities.
 
 ECONOMIC ADDRESSES 39 
 
 So far as its line of things is concerned the trust abolishes the 
 market. 
 
 The second means of gain is speculation. In some instances 
 this may not have been a part of the original scheme; but the 
 present almost universal issue and sale of common stock, by 
 trust corporations, make it safe to assert that speculative oper- 
 ations are expected, and certainly they are going on as any 
 daily newspaper will show. The trust corporation is organized 
 and operated to exploit the produce of industry rather than to 
 develop new facilities of production. 
 
 There remains the question, what, if anything, is to be done 
 with this institution still so youthful, but so gigantic and tre- 
 mendous? With some, the answer is ready. Trusts are mo- 
 nopolies, down, down with them on the spot. They quote Malus 
 usus abolendus est. A long continued series of outrages per- 
 sisted in by the trusts might so incense and arouse the people, 
 as to result in constitutional legislation for their utter destruc- 
 tion. This will not happen. The managers of trusts, being 
 children of the world, are wise in their generation. Assured 
 in their expectations of unfailing profit, they are the less desirous 
 of excessive returns. Extortion does not in the long run, pay. 
 They know their own interests too well to invite destruction, 
 and it may be admitted that the sudden annihilation of trust- 
 corporations might bring public and private damage far more 
 mischievous than all the injury they have thus far actually 
 wrought. Corporations in some form are absolutely necessary 
 to existing civilization. Capital must be aggregated, under ex- 
 pert management, possessing what Blackstone calls a "kind of 
 legal immortality." 8 There is danger that attempts at up- 
 rooting of the trust corporation may undermine the fabrics of 
 corporations which do not monopolize, and whose agency is 
 indispensable to society. The problem of the day is then, not 
 how to annihilate, but how to restrict and control the trust- 
 corporation. And the solution of this problem is not to be 
 facilitated by wild declamation, nor any amount of newspaper 
 reviling. The limits of the occasion do not permit a serious 
 attack upon the problem of regulating trust -corporations. I 
 will only ask leave to summarize what has been presented, and 
 to add some suggestions excluded from the discussion thus far, 
 for the sake of clearness.
 
 40 WILLIAM WATTS FOLWELL 
 
 1. The trust did not give rise to large production, and its 
 accompanying economics, but succeeded to that regime. 
 
 2. The prime object of the trust is to monopolize, which 
 implies the exclusion of competition, the obliteration of the 
 market, and the closing of the doors of opportunity to capital 
 and labor, which, were the field free, would offer their services 
 to the public. 
 
 3. The secondary object is exploitation, i.e., greedy specula- 
 tion. The speculative characteristic means, that by over-capi- 
 talization and waiting, the promoters intend to take possession 
 of any unearned increment of value which may accrue from 
 monopoly, and demand from the public continuing dividends 
 thereon. 
 
 4. The temptations to which institutions thus constituted 
 are exposed are: 
 
 a. To impoverish material men, or to squeeze them out 
 
 completely, and seize and engross the original deposits 
 
 b. To depress wages 
 
 c. Reduce quality of goods or services 
 
 d. To restrict output 
 
 e. To extort excessive prices 
 
 f. To subordinate service to exploitation, and regulate the 
 volume of production so as to "bull" or "bear" the stock 
 market 
 
 g. To use wealth, influence, and talent to corrupt legislators, 
 judges, commissioners, and taxing authorities. 
 
 The last item may be dismissed with the remark that it 
 affects individuals, partnerships, and associations of many sorts. 
 Trust managers have no monopoly in the lobby. They may have 
 exceptional influence, however. Here come certain admirable 
 persons, comfortable bodies, who do not feel responsible for the 
 universe, with the assuring suggestion that there is no need of 
 alarm, neither of any political gymnastics. "If," they say, 
 "the trust proprietors are riding too high, the laws of trade 
 will presently bring them low. They know their own interests 
 far too well, to undertake to fleece, or to deceive, the public. 
 They will never dare to refuse the demands of organized labor. 
 Their interests run with those of the public." There is force in 
 these suggestions. To hold their monopoly intact, trust cor- 
 porations will, for a time at least, forego excessive and open
 
 ECONOMIC ADDRESSES 41 
 
 extortion, and exert themselves to render good service and sell 
 honest goods, so far as they are directed by wise and honest men. 
 There are some who hold to the conviction that a trust can 
 never so stifle and suppress competition as to maintain air-tight 
 and continuing monopolies. This is the view of Professor John 
 Bates Clark, known to many here as standing in the fore-front 
 of American economists. "Potential competition," said Professor 
 Clark, at the late Chicago conference, "potential competition 
 will clip the wings of any trust which soars too high." 9 For 
 myself, I can not take this serene and comfortable view, however 
 devoutly I could hope it might prove to be the true one. To 
 have our great industries carried on by benevolent fraternities, 
 desiring only moderate recompense for the best service, living 
 the austere lives of anchorites, and devoting their surplus 
 income to art, education, charity, and religion, is an ideal not 
 to be approximated in our day. The trust-corporations are 
 engineered by men of like passions with ourselves, eager for 
 the power and consideration which flow from great wealth. 
 They are under the stress of great temptations, and feel them- 
 selves justified by the ancient and economic creed of "the devil 
 take the hindmost." They need the moderating hand and 
 voice of the law to keep them in the paths of virtue. The 
 state must control the trusts or the trusts will dominate the 
 state. The state will control them. There is plenty of good 
 doctrine and principle to justify her interference. It is ancient 
 and elementary in law, that corporations are created by law 
 "when it is for the public advantage." The common law, for 
 ages, has abhorred monopolies. Equally venerable is the doc- 
 trine that whenever property is affected by a public interest, 
 it ceases to be sui juris, and may be regulated by law. I sub- 
 mit that whenever a trust-corporation has completely monopo- 
 lized an industry, or the supply of material, and the machinery 
 of distribution, it may be considered, and treated, as having 
 become, by its own act, a public institution and agency, in an 
 eminent sense. It is within the just powers of government 
 to attach any requisite conditions not only to the creation 
 of corporations, but to their continuance. In spite of Dart- 
 mouth College decisions, the American people need not, and 
 they will not, consent that their rights may be indefinitely 
 chartered or contracted away by the government of a day.
 
 42 WILLIAM WATTS FOLWELL 
 
 How wisely to apply these principles is the task of our younger 
 economists and statesmen, less fettered than those passing off, 
 by the traditions of laissez-faire economics. Among the propo- 
 sitions now before the public are such as these: 
 Enlarged liability of stockholders 
 Large responsibility of directors and officials 
 Prohibition of over-capitalization and stock-watering 
 Reduction of tariff when industry is monopolized 
 Change in legal character of labor-contract 
 Progressive taxation on income and dividends 
 Prohibition of buying and selling their own stocks 
 Limiting the magnitude of corporations 
 Public ownership of all natural monopolies, mines, railroads, 
 gas and water works, wharves and docks, etc., thus obliterating 
 the corresponding corporations 
 
 Abolition of all private corporations 
 
 United States Government license (with visitation) of all 
 corporations for interstate business 
 
 These I do not enter upon. The difficulty of applying such 
 remedies under our comity of state, and New Jersey, hospitality 
 is apparent. There is a proximate remedy, which I have com- 
 mended to my students for many years and now widely men- 
 tioned, summed up in the phrase "sunlight of publicity." The 
 right of visitation of corporations, lodged in the British Crown, 
 the chancery and parliament, inherited by the state in America/ 
 though greatly impaired in our country, has never fallen into 
 complete neglect. In our own state, inquiry into the affairs of 
 corporations, may be made by the legislature, the governor, the 
 attorney-general, the public examiner, the superintendent of 
 schools, the insurance commissioner, and perhaps other officials. 
 This immemorial right of visitation might well be reinvigorated, 
 and applied to monopolizing corporations, and with even greater 
 propriety, to such as enjoy any public franchise. The affairs of 
 such institutions are public affairs, and the public is entitled to 
 complete knowledge of them. This principle is operated with 
 vigor in the supervision of national banks by the Treasury, and 
 the inspection of our state banks of Minnesota by the public 
 examiner. 10 Such inspection would greatly brace up the virtue 
 of directors and officials, and would quiet many injurious sus- 
 picions, harbored in the minds of people.
 
 ECONOMIC ADDRESSES 43 
 
 But this knowledge of the doings and dealings of corpora- 
 tions is not enough. If the monopolizing corporations render 
 a service to the public in maintaining stable prices, and for 
 this they are much commended, it is because of the knowledge 
 which their managers have, or may have, of the state of their 
 trade. Through their experts they know the cost of material, 
 the cost of production, the cost of selling, and the probable 
 demand for their goods. As long as they have such knowledge, 
 and the public have it not, the corporations will be likely to 
 exploit the public. From time immemorial, all trades have 
 been each an art and mystery, concealed as much as possible 
 from the world of consumers. To keep sacredly the secrets of 
 the craft was part of the education and duty of the craftsman 
 and merchant; and this tradition has been perpetuated, with 
 the result that in fixing prices, the cost of production and 
 distribution is subordinated and, as much as possible, kept out 
 of sight. Prices, therefore, are fixed on the principle of what 
 the traffic will bear in competition with dealers. In our 
 ignorance of true costs, the trust, which can suppress compe- 
 tition, has the public by the throat. In the public economy of 
 the future, the gathering and dissemination of economic facts 
 and knowledge will be the prime function of government. 
 The department of statistics at state and national capitals will 
 overshadow every other, and the knowledge of products, their 
 costs and uses ought to be so general that no dealer can deceive, 
 and no clique can rig the market. 11 In regard to a few great 
 staple products, the public may already know in a general way, 
 the ordinary supply and demand, the cost of production, and 
 other facts affecting price. As our state and national statistical 
 bureaus are extended and perfected, such knowledge will be- 
 come more exact, and will be extended to embrace other prod- 
 ucts, until finally the whole market may be an open book to 
 all men who have eyes to see with. The time should soon come 
 when no clique of speculators can possibly be better informed 
 as to the state and prospects of the market than the people at 
 large, through their public statistical agencies. The people 
 perish for lack of knowledge. Some day we shall be using our 
 higher schools to diffuse economic knowledge. In place of the 
 ablative absolute and Sturm's theorem, of the lists of French 
 kings, and Mariotte's law, our children's children will be taught
 
 44 WILLIAM WATTS FOLWELL 
 
 the nature and properties of cereals, coal, ores and metals, tex- 
 tile plants, tea, coffee, fruits, spices, and the things made from 
 them, where all these come from, how they are produced, and how 
 they are interchanged between continents, states, and communi- 
 ties. When the public come to be fully informed they will be 
 likely to be alert. "Combines" will not long be able to exploit 
 the social industry. The remedy of President Hadley, the turn- 
 ing up of noses, and giving the cold shoulder to speculators and 
 engrossers, which has provoked a great deal of mild sarcasm, 
 mostly undeserved, will become operative and efficient. In the 
 face of intelligent, resolute, and unanimous public denunciation, 
 few men will have the courage or the willingness to endure the 
 odium that will rest on those who would live and thrive by 
 exploitation. 
 
 It is now more than a quarter of a century since the enactment of 
 the Sherman Anti-Trust Law. While certain combinations, such as 
 the North^fn Securities Company, and the Tobacco and Sugar trusts 
 have been forced into dissolution because held to be "in restraint of 
 trade," the cases of other combinations such as the United States Steel 
 Corporation, the International Harvester Company, and the United 
 Shoe Machinery Company still remain pending in the courts. Within a 
 few months the Government has asked for a suspension of proceedings 
 on the ground that should dissolution be decreed (and this would 
 seem to be taken for granted by the Government) the resulting private 
 financing might injuriously interfere with the floatation of its war loans. 
 There have been from the beginning, statesmen whose opinions are 
 entitled to respect, who believe that the act should never have been 
 passed. Great combinations, they hold, are inevitable in an era of 
 large production, and they ought to be regulated, not abolished. 
 There are those who believe that the act can never be fully and im- 
 partially enforced.
 
 NOTES 
 
 >U. S. Census Reports, 1850 and 1870. 
 Round numbers are used. 
 
 * 130 Illinois 268, 1859. 
 121 New York 528, 1870. 
 4 490 Ohio 137, 1892. 
 
 * For a partial list see Von Halle, Trusts p. 328. 1895. 
 
 Ely, Monopolies and Trusts p. 277. 
 
 i 193 United States 197-411. Printed as Senate Document 232, 58th Congress, 2d session. 
 
 Commentaries bk. 1, ch. 18. 
 
 J. B. Clark, Modern Distribution Process p. 6. Boston. 1888. 
 
 10 By sec. 3, Laws of 1909 the supervision of State banks was transferred to the 
 superintendent of banks whose office was then established. 
 
 11 The reader will perhaps observe that the author has again paraded this, his 
 favorite hobby.
 
 THE SINGLE TAX
 
 THE SINGLE TAX 
 
 On the evening of January 3, 1899, Mr. Henry George spoke in 
 the Lyceum theatre in Minneapolis, Minnesota, to a large and interested 
 audience on his favorite theme, "The Single Tax." Returning from the 
 lecture on a street car the writer was asked by some of his students to 
 speak in reply. "Hire a hall, and I will try," was the response. That 
 was done. His address was delivered on the evening of January 31, 
 1899. On request of the Minnesota Legislature it was repeated in the 
 hall of the House of Representatives. The following pages contain the 
 address substantially as written out in intervals of exacting duties. While 
 the speaker has not materially changed his views, he would, if writing 
 anew, endeavor to improve his diction, and would probably suppress 
 some passages that border on levity. 
 
 When Mr. Henry George appeared in this hall some days 
 ago, all present were instantly charmed with his personality. 
 His well-set figure, and massive head, his gracious eye and kind- 
 ly face bespoke him at once, as one of those persons, "who" to 
 use a happy Emersonian phrase "who are to be considered." 
 He is a man very much in earnest. He is full of that "enthu- 
 siasm of humanity" which inspires reformers. Mr. George cares 
 for his fellowmen and desires with all his heart to see liberty 
 and comfort everywhere increased. Let us follow his excellent 
 example of going at once to the business in hand. 
 
 First : the question which meets us is, do existing conditions 
 and circumstances permit the consideration of the single tax, 
 so-called, as a practicable working scheme in these United States ? 
 Granting for the moment all that Mr. George claims for it as 
 an ideal plan of taxation, can it be worked, as men and things 
 now are in this country? To this question I answer "No": for 
 these reasons: first, it is of the essence of this scheme of taxa- 
 tion that it be single and exclusive. Its advocates expressly, 
 and with great emphasis, insist on the abolition and abandonment 
 of all other taxes, because, adopting Mr. George's phrase "either 
 stupid or unjust or both." They believe and declare that exist- 
 ing taxes amount to fines levied upon labor and capital and 
 Mr. George insinuated that they are intended so to operate. 
 
 All existing plans and ways of collecting revenue, national, 
 state, and local, are then to be cleared away, before the single 
 tax can go into effect. Let us suppose that the whole ninety 
 millions of us should be converted to the gospel of the single
 
 50 WILLIAM WATTS FOLWELL 
 
 tax in the course of the calendar year now passing, I think it 
 ought to take about a generation to make the change of systems. 
 A state is' a vast and complicated thing, and a revenue system 
 is a large element in a state. Said Burke, in a happy but jus- 
 tifiabje hyperbole, "The Revenue of the State is the State." 1 
 By pursuing for years and ages a certain public policy, govern- 
 ment clothes citizens with rights, claims if you prefer the word, 
 as against the state. She invites citizens to form settlements, 
 to employ capital and labor in certain industries, and enters in- 
 to covenant of quiet enjoyment. 
 
 At the beginning of the present government of the United States, 
 we established and have since maintained, a revenue system expressly 
 devoted to inducing citizens to embark in manufactures, and we have 
 endowed transportation with untold millions. 
 
 Governments are, therefore, in the practice of sane and just 
 men, estopped from sudden economic revolutions. Especially 
 is this tnie of proposed revolutions of the land-laws of a people, 
 for these* laws prescribe and predetermine the very nature of 
 the state. Grant to a legislature the power to fix the tenure 
 and descent of lands, and in the words of Tocqueville, it "may 
 rest from its labors. The machine once put in motion will go 
 on for ages, and advance as if self-guided, toward a given 
 point." 2 Primogeniture will develop an aristocracy, partible 
 inheritance moves towards democracy. No nation of ninety 
 millions can or ought to make a great and radical revolution 
 in its housekeeping, in the time it takes the legislative clerks 
 to call the roll. But not to make too much of this phase, let 
 it be granted that this nation could skip from its old revenue 
 system to a new one as easily as Harlequin shifts his jackets and 
 masks; provided the American people had undergone the neces- 
 sary change of heart, and had resolved to leave off compelling 
 themselves to pay unjust and stupid taxes and tariffs, operating 
 as fines. Let this be granted, we meet the question are the 
 American people likely to be suddenly and presently converted? 
 It is demanded specifically that the tariff must go to make 
 room for the single tax. Do you think the protective system 
 is about to fade away suddenly like the grass ? Where have you 
 been hiding since the kalends of November? It was a square 
 issue between protection and free trade.
 
 ECONOMIC ADDRESSES 51 
 
 The reference was, of course, to the presidential campaign of 1898, 
 in which Cleveland was defeated by Harrison on a clean tariff issue. 
 
 Every possible argument, pro and con, was blazoned from 
 the stump and spread out in the columns of the pamphlet, book, 
 and newspaper press. There were no distracting side-issues. 
 The day of trial came. Did you hear it ? Did you hear the voice 
 of the people on the sixth of November? 
 
 "It came as the winds come when forests are rended; 
 It came as the waves come when navies are stranded," 
 a complete triumphal approval and ratification of the protective 
 principle and system. No matter what any one's private opin- 
 ion may be, every one will admit this result as a cold, solid fact. 
 
 I am but a moderate protectionist, and free trade ideals are 
 dear to my heart; what I fear is that it will be impossible to 
 obtain in the present generation those modifications and reduc- 
 tions of tariff, which protectionists of the reasonable sort, de- 
 mand. Abolish protection? Abolish indirect taxation by im- 
 posts on imported goods in one day? It will take a Joshua 
 mightier than the commander of Israel to roll back the wheels 
 of protection. 
 
 To work the single tax, the taxes on franchises of every sort 
 and the license taxes on liquor selling must go. Is there any- 
 thing in the present state of the public mind on these subjects, 
 to indicate an early abandonment of these forms of taxation? 
 The internal revenue taxes on whiskey and tobacco must go; 
 and, because (along with all other existing means of taxation) 
 they are "stupid and unjust," the nation must be forever de- 
 barred from reestablishing any similar internal revenue system, 
 no matter what dangers threaten within or without. Will the 
 nation disarm? 
 
 The speaker might have remarked that under the single tax regime, 
 the nation, the state, and all municipalities would be debarred from 
 levying taxes for the restraint of monopolies, the discouragement of 
 vice and immorality, the abolition of impure foods, the preservation of 
 game, and "social purposes" generally. 
 
 Further, we have not merely to deal with particular existing 
 statutes and machinery for collecting public revenue, but with 
 ideas, prejudices, and customs so ancient that "the memory of 
 men runneth not to the contrary"; with ideas and doctrines 
 running back to the time of Aristotle at least. There is an
 
 52 WILLIAM WATTS FOLWELL 
 
 idea that as all forms of property are protected by the state, 
 they may all be rightly subjected to taxation if the public needs 
 require. The single tax men know but one kind of property, 
 which may be justly taxed, and that, they are proposing to 
 abolish. There is the idea that as all persons are under the pro- 
 tection of the state, so all persons may, if the public needs re- 
 quire, be called upon to contribute to the support of the govern- 
 ment and its reasonable purposes. The single tax doctrine is not 
 to touch persons, as such, but only as they are receivers of the 
 public, of the rents and profits of land. Again there is the idea 
 that as all industries and employments are protected by the 
 state, the government may, if public needs demand, collect some 
 fraction of the returns and profits of industry and incomes of 
 well-paid employees and professional people. 
 
 I do not accept either of these propositions, protection of property, 
 or protection of persons, as the ultimate ground of the taxing power. 
 They are iiidental considerations. Here I am only insisting that the 
 ideas are ancient, traditional, and everywhere accepted. 
 
 There is no possible room or justification for an excise, in- 
 heritance, or income tax, under the single tax regime. 
 
 Second; there is another idea, which has played a great part 
 in the history of the Anglo-Saxon race, embodied in an epigram, 
 as familiar to every English-speaking man as the immortal 
 rhymes cf Mother Goose "no taxation without representation." 
 Now let this doctrine be as absurd as the romance of Peter Wil- 
 kin, grant that it was never anything more than an airy and im- 
 practicable revolutionary rallying cry, still no man in his senses 
 will deny that "no taxation without representation" is stamped 
 across every page of his political history. 
 
 Our American colonists objected to being taxed by a foreign legis- 
 lature, in which they had no representation. The cry "no representa- 
 tion" had no reference to tax-paying as a qualification for voting. It is 
 a novel and strained use of the phrase by advocates of suffrage extension, 
 when they claim that all persons owning taxable property should have the 
 right to vote. 
 
 Defiance of this immemorial tradition cost one of the Stuart 
 kings his crown, and another his crown and head to boot. "No 
 taxation without representation" was the cry which nerved the 
 hearts and steadied the aim of the embattled farmers at Lex- 
 ington and Concord. It may have been a miserable mocking
 
 ECONOMIC ADDRESSES 53 
 
 delusion, but the same sentiment bore up the courage of the 
 soldiers of the Revolution from Lexington to Yorktown, and 
 cemented into one national union Roundhead of New England, 
 Virginian Cavalier, Quaker of Pennsylvania, Catholic of Mary- 
 land; English, Dutch, German, Swede, all faiths, all bloods, and 
 all interests. In obedience to sentiment universal at the time, 
 the framers of the national constitution provided that "direct 
 taxes and representation shall be apportioned according to 
 population, and not according to property or values of any 
 kind." Taxation and representation, are in the national code, 
 coextensive and inseparable. 
 
 The doctrines I have enumerated are embodied in every one 
 of our state constitutions. The Minnesota Constitution fur- 
 ther provides that all taxes shall be "equal" as nearly as may 
 be, and it will be sometime before the people of this state shall 
 be persuaded that "equal" means laying all taxes on some one 
 class, or some one kind of property. 
 
 The new section to Article 9 of the Minnesota Constitution, adopted 
 November 6, 1906, empowers the legislature to select classes of "subjects" 
 for taxation, and requires that taxes shall be "equal upon the same class 
 of subjects." Up to this time no material changes have been made in 
 the system. 
 
 Third; the single tax scheme, alone and exclusive, is also 
 impracticable because of our complicated American government. 
 We have three systems of taxation, working side by side, and 
 two or more independent agencies of tax administration. We 
 have a national system of indirect taxation by means of imposts 
 on imported merchandise, and by internal revenue excises on 
 certain selected manufactures. We have also state taxes, and 
 local taxes administered by mixed agencies of state and local 
 officials. The single taxers do not inform us what agency they 
 propose to employ. There would be no sense in using two or 
 three agencies for administering a single tax system. Some one 
 of these existing jurisdictions, national, state, or local must be 
 made the primary agent for obtaining the single tax revenue, 
 and be required to pay over to the other two their respective 
 shares. Do you expect the state governments will subordinate 
 themselves to their creatures, the town and city authorities, and 
 exist by their sufferance? Far more likely it is that the power 
 of local taxation by cities and towns would vanish away and the
 
 54 WILLIAM WATTS FOLWELL 
 
 municipalities content themselves as best they could with such 
 moneys as the state legislature should dole out to them. Local 
 government, the pride of American and Anglo-Saxon free men, 
 would of consequence disappear. But how would the state 
 governments fare when it came to the question whether they or 
 the national government should be primary collectors of the 
 single tax revenue? Does not every schoolboy know that we 
 changed the government of the United States in 1789 from a 
 confederation to a national union, chiefly, almost exclusively, 
 because the states would not collect and pay over the "quotas" 
 imposed by Congress? Schoolboys may not know, but grown 
 men ought to know, what kind of tax it was that the old Con- 
 gress of the Confederation tried in vain for years to extort from 
 the reluctant states. Some of us may have forgotten, so let 
 me remind you that it was a single tax on improved lands after 
 an idea imported from France along with other political bric- 
 a-brac. The framers of the constitution of 1789 applied them- 
 selves to make a national government which should not need the 
 interposition of any state, to raise and collect its revenue. They 
 put into that document a power to raise revenue, absolute, un- 
 assailable, irrevocable. And this power has been defined and 
 supported by a long course of supreme adjudication. With a 
 standing army, and a navy which we now talk of making the 
 most formidable that ever ploughed the seas, do you think the 
 national government will surrender her unquestioned, traditional, 
 unlimited, supreme power of taxation? It is absurd to expect it. 
 
 I think it much to be feared that a people so martial in character 
 as the Americans would wish to raise and maintain a standing army of 
 500,000 men and a navy of 200 battleships with all necessary accompani- 
 ments. As this volume goes to press the United States Government 
 with the full and hearty approval of the people is engaged in raising an 
 army of two millions, and a navy of innumerable bottoms. And it is 
 predicted by some persons whose judgment may prove to be sound that 
 we shall in the coming three years increase the army to five millions. 
 How charming a contrivance for raising the billions of money would the 
 single tax be! 
 
 The single tax scheme if worked at all, must be engineered 
 by the general government and its agents, and the states and 
 all municipalities through the states will enjoy only such rev- 
 enues as Congress shall see fit to apportion and pay over. Under 
 such a scheme the forms of democracy, might, indeed, survive,
 
 ECONOMIC ADDRESSES 55 
 
 but the state and the government would, in essence be imperial. 
 Of all tyrants the many-headed tyrant is the one most to be 
 dreaded. 
 
 For these reasons: (1) the impossibility of clearing away 
 existing taxes; (2) the persistence of ancient custom and indus- 
 tries; (3) the peculiar and complicated nature of our American 
 government; for these reasons, which are by no means all, as 
 stated and discussed, I submit the conclusion, that the single 
 tax, the exclusive tax on land values, has no claim to considera- 
 tion as a practicable working plan, in this country, in our day. 
 
 Let us next examine the single tax scheme as a mere doctrine, 
 as an ideal thing. It is a grateful and indeed not an unfruitful 
 exercise to let our minds play freely on great and serious mat- 
 ters; to let the imagination soar a little skyward; nay 'tis well 
 to dream betimes, of Utopias and blessed isles. What do these 
 dreamers say? First of all, that all taxes except the proposed 
 single tax on land value are, "either stupid or unjust or both," 
 and I hear no exceptions made on account of stress of war or 
 famine or other calamity. They assume, then, a state of con- 
 tinuous and universal peace. Does the history of this nation 
 or of any nation warrant any such exceptions ? Must a nation, 
 beleaguered and invaded, lay down its arms, and accept the terms 
 of the foe, at the point where the revenue from single tax, on 
 land values shall have been exhausted ? Were that the doctrine 
 of the world, one single nation, not so scrupulous about collect- 
 ing taxes from persons, chattels, incomes, franchises, and so on, 
 would soon dictate the conditions of existence to all the rest. 
 The single tax, as advocated, endangers, if not denies, the right 
 and power of nations to maintain their organized existence. 
 The old common law theory suits me better, that a free and 
 a brave people may "rob the cradle and the grave" to recruit 
 their defensive forces and throw the last dollar they can wring 
 from the orphan and the widow into the military chest. 
 
 These dreamers assume the continuous and universal advance- 
 ment of society; population always on the increase and evenly 
 so, wealth increasing, intelligence and virtue always abounding 
 more and more. The world does move, has moved, but never 
 on any continuous line of advance by steady and unbroken 
 march. The lot of civilized man in general has been painful 
 and stormy. The progress of particular nations has been by
 
 56 WILLIAM WATTS FOLWELL 
 
 fits and starts, periods of depression succeeding as by a kind 
 of rhythm, to epochs of advance. There have been times in 
 the history of this country when the rental value of land would 
 hardly have paid the salaries of the town clerks. Fortunately, 
 unjust and stupid taxes on imports, on incomes, and property 
 of many kinds saved us from political marasmus. The progress 
 of wealth and population is not uniform in different parts of the 
 country. Population shifts and industries migrate. Rents go 
 down in New England and go up in Dakota. One New York 
 county, with which I have been acquainted, declined in popu- 
 lation from 1860 to 1870 and again in the decades 1880 and 1890. 
 That county was on the whole, probably richer in the admin- 
 istration of John Quincy Adams than it has been since. I 
 should like to know if any provision will be made by the single 
 taxers to reimburse the Seneca county farmers for so much rental 
 value as has been already taxed out of them in excess of jus- 
 tice? Irfsuch counties the revenue from a single tax on land 
 values would be sometimes a minus quantity. 
 
 The old farm on which the speaker grew up has lately been sold for 
 $25 an acre. The soil is excellent, the buildings substantial; the distance 
 to New York is three hundred miles, and there is a railroad station on 
 one corner. 
 
 However, it may be expected by the single tax apostles that 
 the great national taxing machine would equalize such things. 
 
 The enthusiasts again, make no allowances for those dis- 
 asters which in every generation wreck cities, dismantle prov- 
 inces, and even involve continental areas in vast loss and ruin. 
 Famine is chronic in India and China. 3 In the latter empire 
 only last year one million five hundred thousand people were 
 left homeless and starving from the overflow of a single great 
 river. Would the single tax on land be convenient for those 
 poor worms of the dust? If no other tax could, without injus- 
 tice, be collected, would the government of that province be 
 able to bury the dead? A very few years ago, several counties 
 lying within a half day's journey of this spot, larger in aggre- 
 gate area than any one of several considerable nations, were 
 desolated for three seasons by the red-legged grasshopper. The 
 surface of the land was swept as clean of vegetation as the pave- 
 ments of our streets. The governor of this state locked his office 
 door for many days and hastened to see what might be done for
 
 ECONOMIC ADDRESSES 57 
 
 the stricken people. What he did as an official is a part of the 
 history of the state; what he did as a man, is known only to 
 himself, his wife, and the recording angel. How distressing it 
 is to reflect that at this time the single tax doctrine had not been 
 revealed. How might the suffering farmers have been comforted 
 by that sweet doctrine of the unearned increment and the single 
 tax on rent, which would relieve them of the last burden, their 
 farms themselves. 
 
 Would a single tax on the unearned increment of city lots 
 have been a convenience and a boon to the people of New Ulm 
 and Rochester and Sauk Rapids, after the tornado had got in 
 its work in those towns? States, like men, do wisely not to 
 carry all their eggs in one basket. It is a principle of taxing 
 systems to distribute the burden so that no one class, nor any 
 kind of property or industry shall be ruined in case of disaster. 
 There is no safety valve to the single tax boiler. 
 
 Again, these devotees of a mere theory assume that land is 
 the only thing which increases in value, as population and wealth 
 increase, if they do increase; and which derives value from com- 
 munity labor and social demand. It is a hackneyed truism that 
 increasing demand is the prime force in raising values of all 
 products (farms and gardens are products) and all services. 
 An abounding population, if it swells demand, normally occa- 
 sions a general increase of prosperity and wealth. According 
 to single tax philosophy the community ought to appropriate 
 to the common good whatever moiety or scintilla of value may 
 have been caused by social order, protection, education, con- 
 servation, or other contribution. Let us take a single instance, 
 Mr. George's late speech. The language and most of the senti- 
 ments of that ingenious and captivating address are and have 
 for a long and indefinite time been the property of the whole 
 people. He spoke with a degree of ease and confidence to in- 
 dicate that speaking was rather a pleasure than a toil for him. 
 He got, let us presume, $100, a hundred ounces of silver, for that 
 performance, and carried the same off with him to the Standard 
 office. Now what gave that speech its selling value ? Would the 
 Comanches, or the Patagonians, or the natives on the left bank of 
 the Niger, all of them actual practitioners of the philosophy which 
 Mr. George is commending to the people of these United States, 
 would they have paid their currencies to hear that speech?
 
 58 WILLIAM WATTS FOLWELL 
 
 "A fortiori, we might on the same principle (as that land is limited) 
 insist on a division of human wit; for I have observed that the quantity 
 of this has been even more inconveniently limited. Mr. George himself 
 has an inequitably large share of it." 4 
 
 Let us analyse the conditions which give value to such things 
 as Mr. George's orations. First, Mr. George enjoys a mo- 
 nopoly of a certain kind of reasoning which I trust will remain 
 his exclusive property. I allow something for that. 
 
 Next, there are a lot of people in this town. These people 
 are civilized and possess a great body of inherited arts and 
 industries which have long been common property. They have 
 had themselves educated according to the best learning of all 
 time and they have maintained at great expense a costly appa- 
 ratus for the cultivation of religion and morality. I submit that 
 the cash value of that speech and of all speeches and sermons and 
 orations is given by the numbers, the labor, the saving, the vir- 
 tue, and^prder of the people, and that Mr. George has, accord- 
 ing to his own philosophy, robbed this city of a good round 
 sum of money. In the next place, I dissent from the fundamen- 
 tal assumption of the single tax optimists, that all land belongs 
 to everybody. The statement is a vague and glittering gener- 
 ality, or perhaps better stated, it is the exaggeration and cari- 
 cature of a doctrine true, but only true within reasonable limi- 
 tations, and as understood by reasonable persons, who know 
 and feel the inadequacy of language to express all that is in the 
 minds of men. We assert the equality of all men and we under- 
 stand those words in a certain reasonable way. We say that 
 governments derive their just powers from the consent of the 
 governed, and the statement is true, but only true in a reason- 
 able sense. The words do not import that any individual or 
 clique or party may withdraw his or their consent, refuse to pay 
 taxes or serve on juries, or that resident aliens, minors, paupers, 
 and idiots may vote. The state in a certain true sense owns all 
 its territory, but the state's "eminent domain" does not con- 
 flict with the right of citizens to own lands by allodial tenure. 
 The doctrine that the land of the world belongs to God's children 
 is a harmless truism. What is it good for in actual politics? 
 Nothing. It is a mere unworkable sentiment, void of all effi- 
 ciency; "Void" as lawyers phrase it, "void for uncertainty." 
 Only a limping, one-legged philosophy of property can bolster up
 
 ECONOMIC ADDRESSES 59 
 
 such a vagary, that all mankind taken collectively owns all the 
 soil and waters of the planet. 
 
 This doctrine may never have been stated in clearer terms than by 
 that distinguished apostle of temperance and anti-slavery, Gerrit Smith, 
 in his speech in Congress on February 15, 1854, and in resolutions offered 
 by him on January 16. The resolutions read: , 
 
 "Whereas all the members of the human family, notwithstanding all 
 contrary enactments and arrangements, have at all times, and in all 
 circumstances, as equal a right to the soil, as to the light and air, because 
 as equal a natural need of the one as of the other; and whereas, this in- 
 variably equal right to the soil leaves no room to buy, or sell, or give it 
 away; therefore, 
 
 1. Resolved, that no bill nor proposition should find favor with Con- 
 gress which implies the right of Congress to dispose of the public lands, 
 or any part of them, either by sale or gift. 
 
 2. Resolved, that the duty of civil government in regard to public 
 lands, and indeed to all lands, is but to regulate the qccupation of them; 
 and that this regulation should ever proceed upon the principle that the 
 right of all persons to the soil, to the great source of human subsis- 
 tence, is as equal, as inherent, and as sacred as the right to life itself." 
 
 In his speech Mr. Smith demanded in the name of justice that gov- 
 ernment should cease from selling or giving away what it can not own, 
 the soil, and said, "Vacant land belongs to all who need it. It belongs to 
 the landless of every clime and condition." 
 
 Gerrit Smith antedated Mr. George a whole generation. 
 
 Property right is an institution, an immemorial inheritance, 
 not a theory. Rights, practical, reasonable, legal, rights do not 
 descend from the clouds; they have grown up out of human 
 experience and the nature of things. 
 
 These dreamers fall into another error, after the example of 
 the socialists. They confuse value and utility. They talk of 
 value where no exchanges take place, and of labor and capital 
 producing value. Value appears only on the field of exchange, 
 not in that of production. Much labor is not simply negatively 
 useless, but positively destructive, as for example that employed 
 on perpetual motion devices, in gambling, in the manufacture 
 and sale of intoxicants, and the culture of tobacco. In their 
 discussions they get themselves into such a tangle with their 
 values land-values, rental-values, real-values, selling-values, 
 real selling-values, speculative values, that the ordinary intellect 
 can not follow them, and political economists retire in despair. 
 
 Finally (under this head) these amiable proselytes neglect to 
 take any account of probable political consequences of their
 
 60 WILLIAM WATTS FOLWELL 
 
 scheme, provided it were possible to clear the way for it. It is 
 a common experience of nations that changes in their economic 
 institutions are followed by totally unexpected consequences; so 
 short is the sight of the wisest men. But there is one consequence 
 of the scheme under discussion which experience may warn us 
 from risking. Put all your taxes on any one class of persons, 
 and you at once consolidate the members of it .into a compact 
 body ready either to embarrass and oppose the government or 
 to take possession of the powers of the state and dictate the 
 laws. I hardly know which of these inevitable alternatives is 
 more to be feared. If the class selected be the landholding 
 people, and they embrace a large majority of the voters I think, 
 all experience teaches that they will surely and rapidly establish 
 themselves as the ruling class in the state. In this day of large 
 production when the fashion of large farms worked by machin- 
 ery is coming into vogue, I am persuaded you would not have 
 long to .wait before a landed aristocracy showed its powerful 
 grip upon your legislative department, placed its best men in 
 your executive chairs and filled the bench of your supreme tri- 
 bunals with judges whom it could depend upon. Mr. George 
 himself suggests the best reason of all for expecting this result 
 when he says, "The tax on land values is the only tax of any 
 importance that does not distribute itself. It falls upon the 
 owners of the land and there is no way in which they can shift 
 the burden upon any one else." 5 
 
 Mr. George does not propose to dispossess landlords, and reduce 
 them to the condition of tenants of the state or municipality.' 
 
 He was thinking as an economist not as a politician. Lay 
 the taxes on landlords and you may trust the real estate lawyers 
 to find them a political way of escape from excessive burdens at 
 least. It is with difficulty the people now submit to direct taxa- 
 tion in amounts sufficient to support those institutions which 
 modern states must needs maintain. The public schools are ill- 
 equipped, the teachers poorly paid. The university lags half a 
 century behind the point to which she might advance in ten 
 years if the money could be voted. Do you think. things would 
 be bettered if you placed the fortunes of the state in the hands 
 of the landholding class ? That class would name the assessors, 
 and dictate the rates and the valuations, or human nature will
 
 ECONOMIC ADDRESSES 61 
 
 have undergone a new creation. From class government, good 
 Lord, deliver us, evermore. I submit therefore that the single 
 tax on land values as a theory fails to answer to the require- 
 ments of a reasonable system of taxation considered at large 
 in the abstract. 
 
 Mr. George makes great account of the irregularities which 
 attend the taxing systems in vogue, and he says much that is 
 worth while. The science of government and in particular the 
 economics of government are not far advanced. In the past 
 the science has been cultivated by a few philosophers only. 
 Economics has of late become, or is becoming, the science of the 
 people, and there is ground for hope that valuable truths will be 
 brought forth and useful devices invented to make government 
 more efficient and its burdens lighter. I must say, however, that 
 the suggestions and the reasonings of the school I am now deal- 
 ing with are discouraging. Because nine ways are bad it does 
 not follow that a tenth will certainly be good. Because the 
 household pet of the Dutchman's story is utterly worthless in 
 all known respects it is not safe to conclude that he will be infal- 
 lible as a "coon dog" till you have tried him. The collecting of 
 taxes on moneys and credits may be very unsatisfactory, but we 
 may not conclude from that that a single tax on land values will 
 be satisfactory. And these men make the radical mistake of all 
 enthusiasts, in presuming that the adoption of their one idea will 
 mend all matters. Criss-cross, hocus-pocus, presto change, now 
 you see it and now you don't see it, and the miracle is done. 
 "We believe," says Mr. George, in substance 7 "that in this 
 simple measure of the single tax lies the remedy for the great 
 social and political evils of our time." This is not the language 
 of truth and soberness, it is the wild exclamation of the devotee 
 of one idea. 
 
 Before I had gone far in this matter I was inclined to think 
 that the single tax might work in some petty state, some remote 
 and happy isle, some secluded mountain gorge, (whence popu- 
 lation could escape only by the golden stairs) and where the pas- 
 sions of men would not be stirred by the storms that sweep over 
 great nations. With regret I am forced to abandon this amiable 
 conceit, because nature is against it and humanity is now inca- 
 pable of the virtues it implies. For the realization of their dream 
 I can only point our single tax friends to some heavenly consum-
 
 62 WILLIAM WATTS FOLWELL 
 
 mation, to some "Happy land, Far, far away, Where saints in 
 glory stand, Bright, bright as day." Again my good nature gets 
 the better of my judgment; in the celestial country there can 
 be no single tax, or double tax, no mortgages to be sworn off, no 
 personal chattels or credits to be listed, no tax on conscience 
 there. Oh, sweet and blessed country, Where taxes ne'er shall 
 be ! Perish the thought which rises here like Banquo's ghost and 
 will not down at my bidding. There is but one other place where 
 population is ever on the increase and whence emigration is im- 
 possible. Perhaps in that unmentionable realm the unearned 
 increment of land may form a common fund sufficient for all 
 social needs. No one can object to the experiment there. 
 
 In the first division of this address I undertook to show that 
 the single tax, can not be put in operation in our country and 
 time. In the second, that, resting on unfounded assumptions, 
 it has no merit as an ideal plan of taxation. In the few minutes 
 remaining at my disposal I propose to show that the single-tax 
 plan is not a plan of taxation at all in the proper sense of the 
 word, and further that Mr. George did not originally propose the 
 scheme as a scheme of taxation proper. What, let me ask, are 
 taxes in free states ? When the English commons were debating 
 the question of taxing the colonies, Lord Chatham answered this 
 question and settled it for English speaking freemen, for all 
 time. Taxes in free states are not impositions on the people 
 by outside and superior powers, they are the contributions of 
 the citizens for public uses. The idea that taxes are a burden 
 let down onto the people, is a survival from the great conquering 
 empires of antiquity. It ought to have no place in the minds 
 of intelligent modern thinkers. There two ideas inhere in the 
 word tax, or rather two phases of one idea. The word at bot- 
 tom, means to set in order, to arrange; and we have on the one 
 hand the principle that taxes must be proportioned to the 
 public needs, and on the other apportioned equitably among 
 the persons who are to contribute. 
 
 . The ultimate root is tag, to which may be traced the words task, 
 touch, the Latin tangere, and the Greek tasso. 
 
 These principles are reasonable and in our day beyond dis- 
 pute. No free people will for a moment consent that their 
 agency, the government, may assess and collect taxes ad libi-
 
 ECONOMIC ADDRESSES 63 
 
 turn without regard to the purposes and duties of government. 
 Nor will a wise people, by imposing the burdens of the state on 
 any one class, lay the foundation for a claim by that class to 
 rule the state. 
 
 Exactions of money, goods, or services not proportioned to 
 public uses and not apportioned to private ability and interest 
 are not, in any just sense of the word, taxes. Keeping this in 
 mind let us examine Mr. George's position. The disciples of 
 this teacher are insistent in season and out of season in com- 
 mending the book Progress and Poverty as containing the whole 
 gospel according to Saint George. It is, indeed, a notable 
 book. The author has a happy art of elucidating abstruse 
 economic doctrine by ingenious statement and happy illustra- 
 tion. His literary style is forceful, graphic, and generally chaste. 
 The best qualities of the man, his ardent love of humanity and 
 his burning desire to be of present service to all who toil and 
 moil, shine on every page, but, I am forced to add, these merits 
 only throw into strange relief the fallacy of his reasoning. One 
 can not but regret the mistaken direction of splendid gifts. 
 The fundamental assumption of this book is the one suggested 
 by the title that human progress, under existing conditions, is 
 necessarily accompanied by poverty, deepening, widening, irre- 
 mediable poverty. This point we will not argue now. We will 
 grant it for the moment. After laboring through several chap- 
 ters with technical discussions of wages, interest, capital, and 
 the population question to clear his way, Mr. George at length 
 offers us the sole reason why poverty keeps pace with progress; 
 that rent (i.e., land value) is always on the increase at the 
 expense of wages. Landlords must always, if present institu- 
 tions continue, be growing richer at the expense of labor. Well 
 I will not now contend about this. We may agree that evils 
 exist, and disagree as to remedies. 
 
 Addressing himself to the question of remedies our genial 
 apostle argues in detail that the following proposed remedies 
 are of no avail, against the impoverishment of the people. 8 
 
 1. Greater economy in government 
 
 2. Better education, and improved habits 
 
 3. Combinations of workmen 
 
 4. Cooperation of labor and capital 
 
 5. Governmental direction and interference
 
 64 WILLIAM WATTS FOLWELL 
 
 6. More general distribution of land 
 
 To these remedies, proposed by men as wise and philan- 
 thropic, perhaps as Mr. George, he will allow no efficacy, not 
 even a modifying or mitigating efficacy. They block the way, 
 he declares, to the bringing in the sole and single remedy for 
 poverty and its attending misery and crime, which he carries 
 in his medicine case. On page 295, he states this remedy 
 frankly in loud italic type "We must make land common 
 property." This is the bottom doctrine of the single tax men. 
 This is the gospel according to Saint George. 
 
 In book seven, the author of Progress and Poverty proceeds 
 to argue: 
 
 1. that private property in land is unjust; 
 
 2. that its ultimate result is the enslavement of laborers; 
 
 3. that private land owners have no claim on society for 
 compensation for lands they pretend to own, because they are 
 either robbers, or the successors and grantees of robbers. 
 
 On page 322, he says, "Private property in land is a bold, 
 bare, enormous wrong like that of chattel slavery." Unsub- 
 stantial as such propositions may be, I can not turn from my 
 present purpose to deal with them. Private property in land 
 is, in Mr. George's opinion, the sole cause of (I quote) 
 
 "Want and suffering .... among working classes .... 
 
 "Industrial depression" 
 
 "Scarcity of employment . . . ." 
 
 "Stagnation of capital" 
 
 "The tendency of wages to the starvation point." 9 
 
 For these vast, complicated, perennial, and appalling evils 
 he sees but one remedy; a panacea, a patent ointment, a wiz- 
 ard oil, and that "Common property in land." How then 
 shall we compass it? he feels bound to inquire. I quote from 
 his reply "We should satisfy the law of justice, we should meet 
 all economic requirements, by at one stroke abolishing all private 
 titles, declaring all land public property, and letting it out to 
 the highest bidders in lots to suit, under such conditions as 
 would securely guard the private right to improvements." 10 
 "But such a plan, though perfectly feasible, does not seem to 
 me," Mr. George continues, "the best, or rather I propose to 
 accomplish the same thing, in a simpler, easier, and quieter 
 way than that of formally confiscating all the land and formally
 
 ECONOMIC ADDRESSES 65 
 
 letting it out to the highest bidders I do not propose 
 
 [he proceeds] either to purchase land or to confiscate private 
 property in land. The first would be unjust; the second, need- 
 less. Let the individuals who now hold, still retain if they want 
 to, the possession of what they are pleased to call their land. 
 Let them continue to call it their land. Let them buy and sell, 
 and bequeath and devise it. We may safely leave them the 
 shell, if we take the kernel. It is not necessary to confiscate 
 land; it is only necessary to confiscate rent." 11 Here we have 
 it, the core and essence of the single tax philosophy. Confisca- 
 tion, frankly and boldly, confiscation, Mr. George proclaims to 
 be his aim. 
 
 Now confiscation and taxation are not the same thing, they 
 are diverse and irreconcilable things. Taxation implies pro- 
 portionment to public uses and apportionment to private ability 
 and interest. Confiscation means forfeiture, transfer by force 
 and arms to the public treasury, without any reference to, or 
 regard for, the public needs. Mr. George will be personally 
 content with proximate confiscation of rent, because he knows 
 it leads to ultimate confiscation of land. He does not like racket 
 and disturbance, and personally chooses the simple, easy, and 
 quiet way of confiscating rent instead of an honest, thorough, 
 rough-and-ready plan of universal eviction. A very important 
 question arises here. It has many times happened in the his- 
 tory of evolutions that the early leaders, alarmed at impending 
 consequences, unexpected, at some crucial moment, shrink from 
 the logic of their premises, turn conservative and the command 
 passes to less scrupulous men. Mr. George seems to be such a 
 leader. He is now engaged with all the passion of a saint and 
 a devotee, in persuading the poor, that their poverty proceeds 
 from the private ownership of land. He tells wage workers, 
 that landlords are robbing them and will go on robbing them 
 to eternity, unless they smash the institution of private prop- 
 erty in land. He is earnest, eloquent, continuing instant in 
 his holy crusade. Suppose Mr. George to be successful in rally- 
 ing to his cross and banner enough thousands of the working 
 men of America to carry his revolution at the polls. Does Mr. 
 George offer us any guaranty that he will then be able to con- 
 trol the wild spirits which will surround and support him ? Will 
 he be able to curb their wild ardor and persuade them to adopt
 
 66 WILLIAM WATTS FOLWELL 
 
 the easy, simple, and quiet way of doing the deed? The history 
 of great social revolutions offers no hope of such a consumma- 
 tion. When you break the dam and let the waters loose, no 
 human power can stay their course. But Mr. George not only 
 desires to spare his fellow countrymen the unpleasantnesses 
 which would attend the turning of everybody out of doors and 
 putting all our homes up at auction, he is so tender and amiable 
 that he will not even scare the good people with a naughty word. 
 That word confiscation, a truly horrid malodorous word, he 
 hastens to suppress, by another which can hold up its head in 
 any respectable circle. Hear these comfortable words: "What 
 I, (Henry George) therefore propose, as the simple, yet sover- 
 eign remedy, which will 
 
 raise wages 
 
 increase the earnings of capital 
 
 extirpate - pauperism 
 
 abofrsh poverty 
 
 give remunerative employment to whoever wishes it 
 
 afford free scope to human powers 
 
 lessen crime 
 
 elevate morals, and taste, and intelligence 
 
 purify civilization to yet nobler heights 
 is to appropriate rent by taxation" 
 
 Is it honest, Mr. George, to say taxation when you mean 
 confiscation? Can you fool the four million farm owners of 
 this land and get them to make believe they own those home- 
 steads after your confiscating machine shall have knocked all 
 exchange value out of land? Will they not understand as well 
 as you do that "this simple device of placing all taxes on the 
 value of land" will "be in effect putting up the land at auction 
 to whoever'' will "pay the highest rent to the state?" 13 
 
 Mr. George's disciples in this region are now laboring to 
 show that confiscation and taxation do not differ, that the state 
 confiscates, when it taxes. Have they lost the power of under- 
 standing ordinary language? In all this fine talk about appro- 
 priating rent by taxation, there is no suggestion of limiting the 
 collections to the public needs. The proposition is to confiscate 
 the whole rental value. I quote: "In every civilized country, 
 even the newest, the value of land taken as a whole is sufficient 
 to bear the entire expenses of government. In the better devel-
 
 ECONOMIC ADDRESSES 67 
 
 oped countries it is more than sufficient. Hence it will not be 
 enough merely to place all taxes on the land. It will be nec- 
 essary, when rent exceeds the present governmental revenues, 
 to commensurately increase the amount demanded in taxation, 
 and to continue this increase as society progresses" . . . this 
 is "understood in the proposition to put all taxes on the value 
 of lands." 14 Call you this, taxation? The arming your gov- 
 ernment with power to collect from year to year sums of money 
 in excess, to begin with, of the present public uses, and increase 
 from year to year and generation to generation? "There would 
 be a great and increasing surplus revenue," adds the author of 
 Progress and Poverty, "from the taxation of land values, for 
 material progress . . . would tend constantly to increase rent. 
 This revenue arising from the common property could be applied 
 to the common benefit, as were the revenues of Sparta. We 
 might not establish public tables, they would be unnecessary" 
 (query?) "but we could establish public baths, museums, libra- 
 ries, gardens, lecture rooms, music and dancing halls, shooting 
 galleries, play grounds, gymnasiums, etc. . . . We should 
 reach the ideal of the socialist .... Government would change 
 its character and would become the administration of a great 
 cooperative societv. 15 
 
 The government will never exist, I submit, which any free 
 people will entrust with a power to raise surplus revenue increas- 
 ing annually to all eternity. 
 
 The language of Mr. George's addresses in this vicinity, 
 though ingenious and guarded, is entirely consistent with that 
 of his book. He used no such naughty word as confiscation; 
 that would have shocked people. But he spoke of a tentative 
 and entering wedge, and dropped mysterious suggestions of a 
 theoretic perfection to be at length attained to. His theoretical 
 perfection "we now understand to be the actual or the virtual 
 confiscation of land and making it the common property of the 
 state." As reported in the daily papers, Mr. George also said, 
 "No one ought to be permitted to hold land that has a value" 
 and "I think it necessary to take the entire rent value of land 
 in order to fully carry out the justice of the single tax." 
 
 I trust I have made good my promise to show that the scheme 
 of a so-called single tax on land values, as proposed and advo- 
 cated by Mr. George is not in the proper sense of the word a
 
 68 WILLIAM WATTS FOLWELL 
 
 scheme of taxation, but is simply a device to work the destruc- 
 tion of the institution of private property in land, to change the 
 character of our government, and work a revolution in society, 
 whose consequences no human intelligence can foresee. These 
 purposes Mr. George boldly avows. I wish all his followers had 
 equal courage and better sense. 
 
 The hour is passing. There is no space to enter on a defense 
 of private property, nor am I now called upon to apologize for 
 ownership of homes and farms, and gardens and orchards. Pri- 
 vate property in land is an ancient and venerable institution of 
 gradual historic development. It is not a theory, but it has a 
 foundation on solid facts and reasonable principles. Mr. George 
 is half right, that is all wrong, in basing property right on human 
 labor alone. Men own what they make ; and this means to him 
 the same thing with men may not own what they do not make. 
 Men make canoes, plows and looms; therefore they may own 
 canoes, iplows and looms. Men do not make land; therefore 
 they may not own land. What kind of logic is this? Let us 
 try some more examples: 
 
 I love my wife and children; therefore I hate all the rest of 
 mankind. 
 
 A tax on land is a good tax; therefore all other taxes are bad. 
 
 There is dishonesty in working the personal property tax; 
 therefore there will be none in working the single land tax. 
 
 All teachers, preachers, statesmen, and philosophers have 
 failed to abolish sin and wrong; therefore Henry George can do it. 
 
 These open and apparent fallacies are of a piece with Mr. 
 George's logical jingle; arguments just as valid, as his. 
 
 Ownership is a fact founded partly on individual claim, 
 partly on social claim. Men own what they make if the laws 
 allow. Some counterfeiters make, i.e., create, very beautiful 
 plates for printing national banknotes, and the impressions are 
 only distinguishable by reason of their superior elegance. The 
 United States marshal takes possession for all that, and brings 
 the makers to answer at the criminal bar. Property law sup- 
 ports private right, in the act of asserting coordinate social 
 right. For ages the institution of property in land has made 
 its way. Its origin marked the emergence of men out of bar- 
 barism into civilization. Savages and barbarians everywhere 
 are communists in land. Hunting, fishing, and pastoral life
 
 ECONOMIC ADDRESSES 69 
 
 make them nomadic. Civilized men settle on the land, and 
 live by cultivation. The state begins when settlements begin. 
 Long experience has shown that secure tenure is essential to 
 good cultivation. Tenants at will rob the soil and impoverish 
 the state. Owners in fee plow deep and beautify for posterity. 
 Land lying remote and waste is, of course, without value. 
 Land, appropriated, enclosed, subdued, and tilled becomes by 
 the union of private effort with society's magical potency the 
 dearest wealth of man. The very soil becomes the depository 
 of our earnings and savings. This is a priceless blessing to 
 humanity. I care not what the brisk young men, who are 
 shouting for the single tax, may think about this. I will speak 
 for myself and I believe I speak for the great body of men who 
 live upon what they earn. Over in a part of this city there is a 
 little homestead. It stands for the earnings of man and boy, 
 for the little daily self-denials and economies of the wife. It 
 holds the savings of fifty years, a sacred deposit under the con- 
 stitution of our country, and the immemorial custom of our 
 race, for the shelter and support of a family, should death or 
 disaster overtake its now happy owner. If that owner shall 
 ever in any moment of folly raise his voice, or lift his hand, 
 or cast a vote, which shall knock the value out of that little 
 homestead, may his right hand forget her cunning, and may his 
 tongue cleave to the roof of his mouth. I am not here to apolo- 
 gize for abuses of property or the imperfection of our existing 
 ways and means of taxation. They need reform. Every serious 
 proposition to that end deserves our hospitality. I do not 
 therefore regret the agitation, now becoming extensive, begun 
 by Mr. George. I have no fears that the American people will 
 take the back track towards barbarism. The agitation will stir 
 the air of stagnant public opinion, and lift the fog, and let the 
 daylight in.
 
 NOTES 
 
 Works 3:260. Boston. 1889. 
 
 But Burke was anticipated in the Hilopadesha by many centuries. 
 1 Alexis de Tocqueville, De la Democrat ie en Amerique 1:76. Paris. 1864. 
 
 * Annual Register 1887 p. 323; 1889 p. 360. 
 4 J. R. owell. Essay on Democracy. 
 
 * H. George, Progress and Poverty p. 384. New York. 1882. 
 *lbid. 364. 
 
 ' Ibid. 296. 
 
 *lbid. 269-70. 
 
 /Wd. 362. 
 "Ibid. 
 
 "Ibid. 364. 
 JWd. 
 
 "Ibid. 392. 
 
 /W<*. 365. 
 
 7W</. 410.
 
 SOCIALISM TRUE AND FALSE
 
 
 SOCIALISM TRUE AND FALSE 
 
 Proudhon, the French socialist, challenged the quiet citizens 
 of his day with the audacious inquiry "What is Property?" 
 To this question he was ready with the more audacious reply, 
 "Property is robbery." 1 The socialists of the Proudhon school 
 held that ownership is always and everywhere unjust. No man 
 can, in their view, acquire title to anything on earth other than 
 that got by the spectator in a theatre-; the right to sit and see 
 the show and then depart. 2 Property survived this attack. 
 
 Again in our day new assaults hardly less alarming are made 
 upon property. The disciples of Karl Marx demand the aboli- 
 tion of private ownership in land, raw materials, and machines; 
 i.e., all the instruments of production. The state should be 
 sole owner of these, and so the sole capitalist. A body of Amer- 
 ican agitators led by Henry George, the Englishman, are con- 
 tent to deny the rightfulness of property in land; and propose 
 by means of a scheme of "confiscation of rent" to abolish pov- 
 erty, extirpate crime, and raise humanity to a lofty level of 
 intelligence and virtue. 3 Such attacks may not seem so alarm- 
 ing as the bolder one of the French socialist, Proudhon, but 
 they really raise the same central question; the property ques- 
 tion. The questions "Who may own?" And "What may be 
 owned?" can only be settled after determining why anybody 
 may own anything 
 
 The immemorial right of private ownership is thus called in 
 question by so many people, of such respectability, and with 
 such emphasis and ingenuity, that we are forced to deal with it 
 as an open question. Some phase of socialism is sure to be 
 "up" in every social meeting, every public discussion. A num- 
 ber of ministers of the gospel, by no means small, and eminent 
 for learning and devotion are preaching socialism, the socialism 
 of Jesus and the early church as they conceive it. Some of 
 them avow themselves converts to some form of Marxism. 
 An aspiring political party has demanded our votes from a 
 platform of socialistic planks, many in number, and of great 
 social and economic import. 
 
 The series of "planks" of the platform adopted by the Omaha Con- 
 vention of the Peoples' Party, July 4, 1892, included:
 
 74 WILLIAM WATTS FOLWELL 
 
 The free coinage of silver, 
 The abolition of national banks, 
 An elaborate sub-treasury scheme, 
 A graduated income tax, 
 Government paper money in liberal amounts, 
 Government ownership of railroads, telegraphs, and telephones, 
 Prohibition of alien land-holding, 
 Direct election of United States senators, 
 Limitations of revenues to expenses, state and national, 
 Eight hour working day, 
 Postal banks, 
 
 Liberal pensions to sailors and soldiers, 
 Regulation of immigration. 
 Nine planks were borrowed from that of the Socialist Party. 
 
 If you examine the questions thus raised you will find them, 
 without exception, property questions. I propose, therefore, 
 that we devote a part of the hour we are to spend together to 
 an examination of the central question, "What is property and 
 how has it come to be what it is?" Here, no smart, evasive, 
 question-bagging epigram, like Proudhon's "Property is rob- 
 bery/' is of any avail, as a means of reaching the truth. 
 
 Let us start with the simple proposition, which the uttermost 
 socialist can not deny, that Property is an institution. Property 
 is an institution. Let us be sure we know just what we mean 
 here. There is plenty of loose talk about institutions; "our free, 
 glorious, time-honored, blood-bought, consecrated institutions" 
 and the like, with but little clear sense, I fear of what that fine 
 word may mean. The word institution comes from a root 
 sta common to all the languages of the Aryan or Indo-European 
 stock, and the meaning of that root is simply to stand. From 
 this root by an intensive prefix in and a causative affix tu we 
 get the verb to institute, with the meaning, to cause to stand, 
 to set up, to establish. The addition of another syllable tion 
 gives us the word institution, which, in its intransitive sense, 
 means simply that which has been made to stand, that which 
 has been and remains established; with many shades of mean- 
 ing according to its application; such as to a body of laws, like 
 those of Solon or Lycurgus; to some religious ceremonial like 
 the eucharist or baptism; or a permanent establishment for the 
 diffusion of knowledge, like the Smithsonian Institution. 
 
 Institutions are to society what habits are to individuals, 
 and much more, they are the very bond and cement of society.
 
 ECONOMIC ADDRESSES 75 
 
 But for institutions, men would have remained mere wandering 
 savages, contending for life and subsistence with the tiger, the 
 wild boar, and the wolf. To the institutions of language, the 
 family, the church, and the state, we owe all that is meant by 
 the word civilization. Do we ? No, we must add the institution 
 of property, and then our broad assertion may stand. 
 
 Let us not here make the mistake of supposing that institu- 
 tions are necessarily good, or that they must necessarily con- 
 tinue to stand forever, when once made to stand. As men form 
 bad habits, so communities set up bad institutions, and both are 
 sometimes slow to die. Fortunately some do die; and polyg- 
 amy, cannibalism, the murder of captives, slavery, absolute 
 despotism, are institutions which have mostly disappeared. 
 There are other institutions which we can spare, such as the 
 saloon and the bucket shop, the "machine," and the spoils 
 system in politics. These are hard to kill because they are 
 institutions. Fortunately, however, institutions are not neces- 
 sarily immortal. 
 
 We do not then make the blunder of assuming that institu- 
 tions are to be preserved, simply because they are institutions. 
 We grant that all institutions are to be judged of, and approved 
 or condemned according to their fruits. The socialists bring the 
 institution of property to bar and demand judgment. That is 
 their privilege, but let them remember what it is they attack; 
 an ancient and venerable institution, established before the 
 dawn of history, spreading into all known lands and regions, 
 adapting itself to every form and stage of society, and through 
 all recorded time, keeping step with the advance of civilization. 
 An institution thus ancient, universal, and adaptable, we might 
 presume to be just and useful. But the socialists retort, war, 
 slavery, priestcraft are also ancient and universal. Presump- 
 tions do not count. Agreed. Let us waive presumptions and 
 go to the merits of the question, insisting at present on this 
 only: that property as a fact, is an institution, ancient, universal, 
 perennial. Whether we like it or not, at some time we shall 
 be forced to the question, is there any rationale of property? 
 Is that institution in its nature good or bad? 
 
 There will be no better time for us than this present hour. 
 The institution of property is attacked in many quarters, but its 
 friends and enemies are still on "praying grounds and interceding
 
 76 WILLIAM WATTS FOLWELL 
 
 terms." The day may possibly come when arguments will 
 be drowned in the tumult of civil strife. The question is not 
 an easy one, and there is much to discourage one who attacks 
 it. The philosophers from Aristotle to Herbert Spencer have 
 touched it, but with little vigor and unsatisfactory results; all 
 there is to show is a half-dozen theories of property. Let me 
 very briefly name and characterize these theories. 
 
 1. The labor theory: That men make things their own by 
 putting work into them. This puts the cart before the horse. 
 Men take possession of fruits, wood, metals, land, before putting 
 work into them. They own, before they work. 
 
 2. The occupancy theory. That men own what they find or 
 seize. But the question is, On what right are occupancy and 
 capture founded? Here we have merely a restatement of the 
 question. 
 
 3. The contract theory. That at some early time the mem- 
 bers of Society made a contract or agreement establishing indi- 
 vidual property rights on a basis of preexisting communism. 
 As to this there is no record or tradition even, of any such trans- 
 action; and further, if there ever was such a compact, the gen- 
 eration which made it could not bind all nations forever to abide 
 by it. 
 
 4. The positive law theory : That property rests solely on the 
 authority of legislating bodies. This theory leaves the question 
 just- where it finds it. We are still looking for the reason why 
 legislation can rightly establish property. What ought the law- 
 giver to decree, not what has he decreed, is the question. 
 
 5. The theory of economic necessity so-called'. That unless 
 men can own, they will not work nor save. A glance at exist- 
 ing society disproves this necessity. Ownership is indeed a 
 powerful stimulus to labor, but it is not the cause of labor. 
 Men work to live, not to own. 
 
 6. The natural right theory. That man was made by ( the 
 Creator to appropriate from the storehouse of nature, as a 
 condition of life and development. I think this theory to be 
 true, but it is, as I hope to show, but half the truth. 
 
 A single grain of wheat in many barrels of chaff, is all that 
 remains. At best we have only a half-truth. I know it is a 
 presumptuous thing for any man to propose anything novel in 
 philosophy, and I hasten to say that in the following brief_ex-
 
 ECONOMIC ADDRESSES 77 
 
 position I hope merely 'to arrange accepted doctrines in such a 
 way as to support and correct one another. Our patent right, 
 if it shall be accorded, covers merely the combination of the 
 elements, heretofore left in fruitless isolation. 
 
 Here are we, a company of serious-minded people, sitting 
 down together to reason about one of the greatest interests of 
 mankind. This very fact, this mutual invitation, involves, pos- 
 tulates, logicians would say, another fact, which we, at least, 
 can not question. In saying to one another, "Come let us 
 reason together," we concede, each to all the others, the right 
 to be, or if you like the statement better, each of us relinquishes 
 all claim to deny the right of any other to live, as long at least, 
 as the debate may continue. Any proposition to discuss prop- 
 erty postulates, concedes the right of the parties to remain in 
 existence. Otherwise there would be no occasion for interchange 
 of views. You must grant that the man you are arguing with 
 has the right to live and to continue living. Here we have a bit 
 of solid ground under our feet, the indisputable right of men 
 generally, of reasoning men, to live. This concession carries a 
 great deal with it. It means a right to standing room on the 
 earth, the right to reach out and seize for the support of the 
 human body some amount of various solid, liquid, and gaseous 
 substances. Man to live must have air, drink, and food. These 
 do not commonly all exist in one place. Hence there must be a 
 right of locomotion, for a man to go where these substances or 
 some of them can be obtained. In the planetary economy but 
 few kinds of food are furnished by nature in a form fit for use. 
 They must be cultivated, gathered, threshed, shelled, skinned, 
 refined, cooked, and served. From the fleeces of animals, the 
 bolls of the cotton plant, from the stalks of the flax, and from 
 many other sources, must be gathered the ultimate fibres which 
 when spun and woven and fashioned into garments clothe our 
 bodies. The materials for our housing must be extracted from 
 the rocks, from beds of ore and clay, and from the forest. They 
 must be assembled, and transformed in many ways by art and 
 man's device. Hence the right to exert the physical powers and 
 members in all such processes can not be denied. This means 
 the right to labor, and the right to labor follows (not precedes) 
 the right to appropriate.
 
 78 WILLIAM WATTS FOLWELL 
 
 A late French philanthropist, M. Godin, has said, "In hu- 
 manity the coefficient of life is labor. Life and labor are the 
 supreme law for man, for life and labor are one. Man has life 
 wherein to labor; and to labor is to accomplish the law of life." 4 
 This enthusiastic statement though exaggerated it may be in 
 expression, is, I believe, essentially true. The human powers 
 and faculties are meant for use; and man has the right to exer- 
 cise them, a mere empty right unless preceded by the right to 
 appropriate. Further, in consequence of the fact that our 
 earth whirls daily on an axis aslant to that of the sun, while 
 circling yearly around that central luminary, we have the 
 alternation of day and night, the succession of the seasons, and 
 the establishment of great climatic zones. Clothing and shelter 
 are accordingly "generally necessary" to human life. The vicis- 
 situdes of wind and weather impel men to lay by in store, and 
 we call the goods so appropriated and housed up "provisions" 
 things foreseen. It is necessary in almost any zone to lay by 
 in store for nights and winters, and even for periods of stormy 
 weather. Some of the brutes do this, and it is interesting to 
 observe here, that the institution of property finds its proto- 
 type, if not its very beginnings, in the provident economy of 
 the ant and the bee, the squirrel, and even the lowly angle- 
 worm. If men then, are to live, and we who have agreed to 
 reason together, can not deny that, if men are to live, they are 
 to take and to keep. "Property" to use a lawyer's phrase, 
 property "runs with" life. Into the mouth of Shylock in the 
 Merchant of Venice, our great dramatist puts these words: 
 "You take my house when you do take the prop 
 That doth sustain my house; you take my life 
 When you do take the means whereby I live." 5 
 Here the philosophers of the natural right school stop, content 
 to rest the right of property on the right of the individual to 
 appropriate. 
 
 If correctly reported, Cardinal Manning in his last years, 
 gave his adherence to this theory, but I am loth to believe that 
 he would have conceded to any individual the right to appro- 
 priate, under all circumstances, according to his own judgment 
 of his necessities. This would be anarchy pure and simple. 
 Let us be careful not to stop at a half-way house and content 
 ourselves with a half truth. Let us go back to our starting
 
 ECONOMIC ADDRESSES 79 
 
 point, a company of serious men reasoning together: and we 
 may observe that the existence of the individual man is im- 
 possible except as a member of society. The human species 
 exists in families, tribes, clans, states. The individual man 
 does not exist by himself. In our little society of philosophers 
 each member conceded to all others the right to live and inci- 
 dentally to take and keep physical substances and to do all 
 acts and functions necessary to life. There are as many rights 
 as there are persons, and these rights are qualitatively equal. 
 No one partner may arrogate so much subsistence as may 
 endanger the life of his fellows. The community now appears 
 asserting its common right to control appropriation. This right, 
 the individual must and does concede. The extreme operation 
 of this principle may be observed in beleaguered fortresses, storm- 
 stayed ships, companies of emigrants, ancient and recent. For 
 an individual in such circumstances to draw more than his 
 allowance from the common store is a crime for which but one 
 penalty is appropriate, because it is a kind of murder. In the 
 execution by Lieutenant Greely 6 of a member of his crew for 
 taking a few ounces of shoe leather from the store of food, we 
 have an extreme example of the awful but probably just appli- 
 cation of our principle. 7 This right of society to control indi- 
 vidual appropriation, this is the nucleus of socialism in its good 
 sense. 
 
 Here we have two undeniable and apparently irreconcilable 
 truths, standing over against each other like fate and free will: 
 The right of the individual to appropriate; the right of society 
 to control appropriation. Like predestination and free moral 
 agency, these two principles do stand opposed, eternally irrec- 
 oncilable it may be in the forum of metaphysics, but as we 
 hope to show, forever coalescing and resolving one another in 
 the world of life. "I take and keep," says the individual man, 
 "because I need to live." "You may take and keep such things 
 and so much only," says the community, because we all need to 
 live. "My house is my castle, let no man enter without my 
 leave," says the citizen. "The fire is sweeping this way, we 
 must level this house," says the fire-marshal of San Francisco; 
 and a charge of dynamite lays the mansion with its furniture 
 and plate, its gallery of paintings and statuary and all the bric- 
 a-brac of two continents, in a common ruin. "This land is
 
 80 WILLIAM WATTS FOLWELL 
 
 mine," says a farmer, "and has been tilled by my fathers for 
 generations." "True," say the town officers, "but a school 
 house is needed, and yours is the best corner for the site. We 
 must take your land, whether you like it or not. The town will 
 pay you a fair compensation, for your improvements and inter- 
 est, though it may not allow anything for wounded feelings and 
 damaged associations." Thus these two principles, individual 
 right and society right ever at war, like plus and minus terms 
 in algebra, combine in a result of some actual value. And, 
 these two principles are equally necessary; annul either, and 
 society dissolves, and men revert to the condition of brutes or 
 something worse. "It is the right of property," says Bentham, 
 "which has overcome the natural aversion of man to labor, 
 which has bestowed on men the empire of the earth, which has 
 led nations to give up their wandering habits, which has created 
 a love of country and of posterity." 8 
 
 But ^0 this should be added, "It is the right of society to 
 control property, which has kept the few from engrossing the 
 natural gifts of this earth, and from enslaving their fellow men." 
 Slavery was but a phase of the property question. 
 
 These two principles, individual claim, and social rule, are 
 eternally wedded. Alone, either could wreck society. And 
 whoever, be he cardinal or anti-property apostle, undertakes to 
 establish anything on either principle alone, will find his struc- 
 ture tumbling about his ears. Like man himself, property by 
 which he lives, stands on two feet. 
 
 Now let me ask you to recur to my rather tedious discussion 
 near the opening of this paper, upon property as an institution. 
 I had a definite purpose in that exposition. I wished to be 
 understood when I should come to the point where we now are, 
 when I should come to say as I now do, that the institution of 
 property has been developed or evolved by men in the long 
 course of ages as they have been moved and guided by both 
 these principles, individual right and social right. 
 
 It is important to observe that the operation of these prin- 
 ciples is, however, diverse. The principle of individual appro- 
 priation is always at work silently but indefatigably. Each 
 man is always getting, on the plan of Eggleston's old woman 
 in the Booster Schoolmaster, "when you're a-gittin', git a plenty." 
 But social regulation works spasmodically and intermittently.
 
 ECONOMIC ADDRESSES 81 
 
 While society, like the lion in the fable, slumbers, the tireless 
 hunters weave a network of toils around her. At length she 
 awakes with a roar and tremendous gymnastics to burst the 
 rope yarns which were meant to enslave her. Such outbreaks 
 are always alarming. Timid property owners see vested rights 
 threatened and the state itself in danger. Sometimes there 
 ought to be alarm. Vested rights in hoarded magazines of 
 food, in human flesh and bones ought to be in danger. Is it 
 not now easy to see that there is another socialism than that 
 we began with, a better socialism which consists in the exercise 
 at suitable emergencies, by proper agents, under proper forms 
 and safeguards, of the immemorial right of society to control 
 the institution of property? In a good sense, we are all "social- 
 ists." Any society is necessarily "socialistic." 
 
 This exercise of the -right of the community is far more 
 frequent and extensive than we commonly think. What, let 
 me ask, is the whole body of our property law, but the defini- 
 tion and exercise of this right? Let us illustrate by reference 
 to some of the laws relating to real estate. 
 
 The Constitution of Minnesota declares the dominion of the 
 landowner to be absolute, and not that of a feudal tenant. 9 But 
 ownership in land is nothing without title. The owner must be 
 prepared to exhibit his chain of conveyances or the public record 
 thereof, as prescribed by law. If an owner wishes to transfer 
 his land by sale or gift, the law requires him to make and de- 
 liver a deed in proper form. If an owner die without disposing 
 of his lands, the law prescribes to whom they shall descend. 
 If he please to make a will, he must conform to the technical 
 requirements of the law as to signature, witnesses, and per- 
 petuities. The illustrations of the social regulation of prop- 
 erty in the domain of personality are so numerous one hardly 
 knows how to choose. In general we enjoy under our con- 
 stitution, wide liberty in the ownership of chattels, and the 
 owner has absolute dominion. But there are some forms, such 
 for instance as dies for printing United States notes, which no 
 private person may possess. There are others, such as gam- 
 bling utensils and intoxicating liquors, which may be freely 
 owned, perhaps, but which can be exchanged and dealt in only 
 under stringent public regulation.
 
 82 WILLIAM WATTS FOLWELL 
 
 We have on our statute book a law known to lawyers as the 
 "Statute of Frauds," which has for its principal object to deter- 
 mine and prescribe how contracts shall be vouched and ratified. 
 Contracts to convey lands are absolutely void unless in writing. 
 Sales of chattels over $50, are also void without writings, unless 
 consummated by immediate delivery of goods or payment of 
 price in whole or part. 
 
 These are simple and familiar provisions, but Chancellor 
 Kent in his Commentaries says of this Statute of Frauds, that 
 "it carries its influence through the whole body of our juris- 
 prudence and is in many respects, the most comprehensive, 
 salutary, and important legislation on record." At every turn 
 the law governs transactions in personal property. Whether 
 you wish t,o lend or to borrow; to appoint an agent or act as 
 one; to enter into a partnership; to buy or sell; to insure your 
 'house or life; to ship goods by rail or water; to draw a promis- 
 sory note or a bill of exchange; or do almost any act or thing 
 relating to- personal property, the state as the agent of society 
 steps in and regulates your action. If you find lost personal 
 property, the law regards you as a trustee, and holds you respon- 
 sible as such. 
 
 Penal Code of Minnesota recites, "A person who finds lost property 
 under circumstances which give him knowledge or means of inquiry as 
 to the true owner, and who appropriates siich property to his own use, 
 or to the use of another person who is not entitled thereto, without 
 having first made every reasonable effort to find the owner and restore 
 the property to him, is guilty of larceny." 10 
 
 The law will not allow you to abandon your property and 
 run away from it, if the stuff abandoned creates a nuisance, or 
 causes public or private damage. Property means responsi- 
 bility to society. Owners are trustees. When private prop- 
 erty is "affected by public interests it ceases to be privati 
 juris" said Lord Chief Justice Hale two hundred years ago. 11 
 
 And the Roman law lays down this definition "Dominium est jus 
 utendi el abutendi re sua, quaetenus juris ratio patitur." "Dominion is 
 the right of using or abusing one's own, so far as the reason of the right 
 extends," and society decides upon that question. 
 
 Property, it is hardly going too far to say, is a trust, and 
 society is its guardian. 
 
 Shall we not now agree that the social regulation of property
 
 ECONOMIC ADDRESSES 83 
 
 is as real, as necessary, and as much to be desired as the equally 
 real and necessary right of the individual to acquire property? 
 Shall we not stand by the institution of property, as the out- 
 come of the interplay of contending individualistic and social- 
 istic forces through many ages? As in the past, so in the fu- 
 ture, this institution will be molded and adjusted to suit chang- 
 ing historic conditions. When in the past the state has unduly 
 extended her control over property, a democratic revolution has 
 restored the equilibrium. When individual activity has pressed 
 too far, the law has been invoked to repress it. 
 
 We are at this moment in the very article of one of these 
 epochs of adjustment. The last century has been one in which 
 individualism has had a scope, perhaps unequalled in all pre- 
 vious history. The steam engine, the power loom, the spinning 
 mule, the steamboat, the railway, the telegraph, the magneto- 
 electric machine, and many minor inventions have given man 
 a mastery over space, time, and the elements, beyond the dreams 
 of Paracelsus or any reader of the stars. To apply these tre- 
 mendous agencies on a great scale, modern governments have 
 created artificial persons, called corporations, and conceded to 
 them powers and franchises of untold value. During the last 
 century, society has been calling out to men, "Go out into all 
 lands, dig and delve, buy and sell, invent machines, gather gold 
 and silver, seize on provinces. All, all you can find or get shall 
 be yours and your children's forever." All this is a petulant 
 reaction from the policy of the preceding centuries to limit and 
 repress individual action and enterprise. We have just awakened 
 to find ourselves in the toils woven round society during a long 
 and unsuspecting sleep. We awake to see corporations stronger 
 and richer than states and cities, buying up legislatures and city 
 councils as we hire men to grub and shovel; great fortunes won 
 by merely setting traps and weirs in the stream of social indus- 
 try, to catch the earnings of other men. We have syndicates 
 and trusts engrossing great lines of industry and commerce, and 
 imposing arbitrary prices on consumers, destroying, without pity, 
 any who attempt competition. We have stock and produce 
 exchanges for gambling in securities and products, conforming 
 so exactly to the customs of legitimate trade that courts and 
 legislatures can not come upon them. Artisan laborers have 
 become a proletariat, as the French express it, to be exploited
 
 84 WILLIAM WATTS FOLWELL 
 
 by a small body of employers who control the means of pro- 
 duction. The self-employing master workman who has worked 
 his way up to a situation of economic and social independence 
 is a rare spectacle, and the arts of his class have been lost in 
 the drudgery of machine-tending. The idea of steady accumu- 
 lation by industry has almost faded out of modern life. For- 
 tunes in our day are to be won by tricks of trade, by cornering 
 of markets, by seizure of natural deposits, by real estate gam- 
 bling, and by the promotion of salted mining schemes. 
 
 It is high time for socialism in the good sense of the word to 
 assert itself. It is high time for society to put a check on stock 
 and produce gambling, on mining monopoly, on timber thiev- 
 ing, on land grabbing, on trusts and "combines" of every sort, 
 and to commend to the lips of the purse-proud millionaire that 
 cup of damnation, poured out by him for the public. It is high 
 time for society to assert her claim to some just proportion of 
 the wealtn acquired by the use of her lands, mines, forests, water 
 powers, fisheries and rights of way which she has blindly allowed 
 individuals and corporations to engross and monopolize. 
 
 True socialism, then, admits these evils, and demands the 
 readjustment of the institution of property to the circumstances 
 of the age. To effect this readjustment it plants itself on the 
 immemorial right of society to control that institution. On this 
 everlasting foundation it will rebuild the old fabric to suit the 
 wants of modern men. 
 
 Already has the work of exploration and clearing begun. 
 The Inter-State Commerce Commission, our State Railroad and 
 Warehouse Commission, our Bureaus of Labor and Statistics are 
 collecting data according to which plans for rebuilding may at 
 length be drawn. 
 
 An epoch in the history of America was opened when the Conservation 
 Congress of governors of states and others, assembled in the East room 
 of the White House at Washington, D. C., May 13, 1908, pursuant to 
 a call by President Roosevelt. The President opened the conference 
 with an address, sufficient in itself to place him in the highest rank of 
 patriots and statesmen. The discussions, which lasted three days, 
 covered the judicious use and preservation of our mineral, water, forest, 
 and arable resources. Incidentally the need of government control, 
 and limitation of unrestrained and unregulated private activity was 
 brought into view. A large volume of proceedings and papers was 
 published. An admirable re'sume' of the subject may be found in the
 
 ECONOMIC ADDRESSES 85 
 
 book of Dr. Charles Richard Van Hise, president of the University of 
 Wisconsin, entitled, The Conservation of Natural Resources in the United 
 States. (New York, 1910) 
 
 But the false socialist false in the sense of mistaken (many 
 of them are the most amiable of men) the absurd, the imprac- 
 ticable, the lop-sided socialists, are those who, supposing the 
 wealth of the world to be much greater than it is, believe that 
 everybody would be rich and happy if it were only evenly dis- 
 tributed ; who seeing the fool rich, swelling and parading in grand 
 array, and the poor, as they think, sinking into hopeless indus- 
 trial slavery, lose their heads, and conclude that property itself, 
 and not the abuse of property, is the cause of these evils. "The 
 ship is unseaworthy," they cry, "let us jump overboard." And 
 it's afloat they are, on stormy waters. The one point, the 
 radical point, on which the wild socialists agree is the denial 
 in whole or in part of the right of private property, and the 
 committal of all capital to the custody of society. 
 
 The state socialists, our best example, demand the abolition 
 of private ownership of land, raw materials, and machines. 
 They would leave nothing to be owned by individuals, but such 
 shares of subsistence as might finally be apportioned to them 
 by the distributing officers of the industrial state. 
 
 With this ultimate aim in view, moderate state socialists 
 (some of them please to call themselves Fabian socialists) come 
 forward with proposals for approximate reforms, which may 
 reasonably challenge attention. They point to the post office, 
 and say "Let the state also own and manage the telegraphs 
 and the railways." The) 7 point to the city water and gas supply 
 and propose that the city likewise furnish fuel and ice and free 
 street cars. They observe the supply of school books at public 
 expense, and suggest that the children also have dinners and 
 jackets. 
 
 Low-priced luncheons are now served to school children in many 
 American cities. 
 
 They find the public school system itself a thoroughly social- 
 istic establishment. "Very good," they say "let us have also 
 free public hospitals where all the sick may be treated, and free 
 graves and funeral rides for all." They find that in many foreign 
 countries mines and forests are owned and worked by the gov- 
 ernment. It is time, they say, to confiscate to the public use
 
 86 WILLIAM WATTS FOLWELL 
 
 the deposits and wood lands to which individuals have been 
 allowed to set up a false and utterly unjust title. They see the 
 government operating a vast and complicated military and 
 naval apparatus. By means of appropriate bureaus and de- 
 partments the government can, they claim, likewise take charge 
 of all the manufactures of iron and steel, wool, cotton, and silk. 
 And I. suppose this proposition is far from being impracticable. 
 But all these things the extreme state socialists propose on 
 the ground that it is wrong per se for individuals to own any 
 means of production. With some of these particular proposi- 
 tions, a good citizen may agree. He may admit that the gov- 
 ernment might wisely and profitably take charge of the tele- 
 graph and at length gradually of the railway, that a national 
 forestry system should be established, which would actually or 
 virtually annul private ownership over wide forest areas, that 
 all the mines and deposits in the country should be made the 
 property^-of the state and worked under public oversight or 
 management. All these and more he might advocate but not, 
 not for the reasons of the state socialists, that property is rob- 
 bery, and ownership a sin, but on the solid ground of public 
 right to control private property for public good. 
 
 Postmaster-General Hitchcock in his annual report for 1911 has 
 proposed the acquisition and subsequent operation of all the telegraph 
 and telephone lines in the country; and the proposition is received by 
 the public without alarm and in some quarters it is heartily welcomed. 
 There is the same argument for government ownership operation of these 
 agencies of communication as for those of the postal establishment. 
 
 The state is already armed with all the constitutional au- 
 thority necessary to such reforms in the control of property as 
 wise and reasonable men may desire. What is needed is wise 
 application of old principles to new circumstances, not de- 
 structive revolution; not to scuttle the old ship because there 
 are mutineers and thieves aboard. We are all socialists in a 
 good sense, and can not help being such, and I wish that good 
 socialism may increase and grow in us; the socialism of the 
 golden rule and the common law. We may all accept, espe- 
 cially those of us who profess and call ourselves Christians, 
 may gladly adopt, the motto of the Knights of Labor, "An 
 injury to one is the concern of all." More than ever before 
 in history, are men members one of another. The minute divi- 
 sion of labor has made class more dependent on class than ever.
 
 ECONOMIC ADDRESSES 87 
 
 All great industry has become essentially cooperative. Em- 
 ployers and employees are partners, willing or unwilling, in 
 every business. 
 
 Being then socialists, because we are human, let us recognize 
 and practice the good there is in socialism. Let us stand for 
 our social right to control the institution of property for the 
 good of each and all. But while doing this we are not to forget 
 nor ignore the equally fundamental right of each one of us as 
 individuals to draw from the storehouse of nature and to take 
 and to keep what is necessary to life and its purposes. 
 
 But we must not forget that the social right is subordinate 
 and ancillary to the individual right, because society having 
 served its purpose of forming the environment in which the 
 individual may exist and develop, will at length disappear. A 
 great philosopher has said, "Human societies are born, live, and 
 die upon the earth, there they accomplish their destiny. But 
 they contain not the whole man, . . . We, individuals, each 
 with a separate and distinct existence, with an identical per- 
 son, beings endowed with immortality, we have a higher des- 
 tiny than states." 12 
 
 Society, and the state, belong to this world, and shall perish 
 with it. The man belongs to the universe, and can npt be 
 destroyed. Whoever holds to any such noble and true view of 
 the human soul and its destiny, can be in no danger of putting 
 in jeopardy that institution of property which guarantees the 
 existence and development of the individual, which offers a 
 field and a motive for the employment of the human powers, 
 which gives to the individual the ability and the means to serve 
 his fellowmen. Property is the mother of frugality, of indus- 
 try, of independence. And these are the basis of social virtue. 
 Property inculcates respect for rights, for equal rights, and is 
 the core of true socialism. Mine is mine because yours is yours 
 and all is ours. The right of each is the guaranty of all. This 
 is the essence of true democracy, and the ultimate guaranty of 
 liberty. Men will continue to mold and modify the institution 
 of property but they can never abolish it. It "runs with" life 
 itself. As in the old time before us, so to the end of the world 
 the decalogue will both teach and sanction its eternal justice. 
 "Thou shalt not covet thy neighbor's house . . . nor anything 
 which is thy neighbor's." Thou shalt not kill; thou shalt not 
 steal: life and property run together.
 
 NOTES 
 
 1 P. J. Proudhon, Works. English translation 1:12. Princeton, Mass. 1870. 
 
 1 Cicero, De Finibus bk. 3, ch. 20. 
 
 1 See forgoing address. 
 
 Godin, Social Solutions p. 139. New York. 1886. 
 
 5 Merchant of Venice act 4, scene 2. 
 
 Afterwards General Greely. 
 
 7 Report of the Proceedings of the United States Expedition to Lady Franklin Bay 1 :363. 
 
 Jeremy Bentham, Works 1:309. Edinburgh. 1869. 
 But Bentham draws from Beccaria, the Italian philosopher. 
 
 Article 1, sec. 15. 
 
 i* Penal Code of Minnesota, 1885 sec. 425. 
 See ante. Page 41. 
 
 11 Guizot, History of Civilization in Europe New York. 1891. (citing De Royer 
 Collard).
 
 THE NEW ECONOMICS
 
 THE NEW ECONOMICS 
 
 The Fifth Annual Meeting of the American Economic Association 
 was held at Chatauqua, New York, August 23 to 26, 1892. The president 
 for the year was Professor Charles F. Dunbar of Harvard University. 
 Ill-health and absence prevented him from performing the duties which 
 devolved on the author, one of the vice-presidents. For the opening 
 address, here in part reprinted, he chose a subject in which he was at 
 the time much interested. 1 Readers will observe that although in the 
 .course of the quarter-century which has elapsed his expectations have 
 been in some degree realized, problems of first importance in such lines 
 as taxation, transportation, forest and mining policies, public finances, 
 etc. await solution. 
 
 It is a common remark that the young man emerging from 
 college needs first of all to throw his books on political economy 
 to the dogs, before he can judge and act with practical sense 
 upon the economic problems which at once present themselves 
 to him as a citizen. "Theory, mere theory, and idle specula- 
 tion," is the popular estimation of our science, as we fondly 
 call it. 
 
 How extreme and unjust this view is we all know, but we 
 must, I think, still admit that there is some color for it. If 
 political economists are brushed aside as visionary and un- 
 practical speculators, there must be a show of reason or excuse 
 for it. Such excuse is not far to seek, for men of three score, 
 who. in the mid-century days, were studying the political econ- 
 omy taught in American schools as a branch of, or attachment 
 to, the department of philosophy. We stood up in our places 
 and recited the text to respectable ecclesiastical professors, who 
 "held the book and looked after." The system made a fair 
 show in the flesh. Its doctrines were marshaled in imposing 
 hierarchical fashion, and followed on in a sequence of parts, 
 books, chapters, sections, and paragraphs. For examination 
 purposes the subject was almost as convenient as geometry, or 
 the syntax of the Greek moods. The most deep and general 
 impression left on the mind of those students was that there 
 were certain "laws of trade," analogous to the laws of physics, 
 which governed things economic with invariable and omnipotent 
 sway. These laws, if they were embodied and could speak, 
 might say of themselves: "Men may come, and men may go; 
 but we go on forever."
 
 92 WILLIAM WATTS FOLWELL 
 
 I am far from believing or saying that there was not a 
 central core of truth in that teaching but the mischief lay in 
 the tacit assumption that these "laws of trade" operated on 
 men like the laws of gravity, from without. The economic 
 atom was afloat in the stream, and could move only in the 
 direction of the current. It was an obvious corollary that the 
 results of these "laws" might easily be foreseen and foretold. 
 Above all, it was left to be understood, when not dogmatically 
 inculcated, that the economic atoms must be careful not to 
 rebel against the omnipotence of the laws of trade. No molec- 
 ular combinations or arrangements could be of any use. 
 Laissez faire, laissez oiler, the protest of the French merchants 
 against excessive government steering, became the last word in 
 an economic philosophy, or rather the negation of a philosophy. 
 
 Laissez faire had gone to seed, and its fruit was ashes. The 
 political economy which began with Adam Smith to consider of 
 the "wefcjth of nations" had degenerated into speculations upon 
 the probable conduct of hypothetical economic atoms, under the 
 operation of forces beyond their control. 
 
 "The war notifies us that laissez faire is dead. The nation that 
 killed it now threatens to build world empire on the others that did not 
 know it." 2 
 
 I do not need to inform this audience that upon this dark- 
 ness a day star has already risen, and that a new political 
 economy has been born, of which we may cherish moderate, but 
 well-grounded hopes. 
 
 The new political economy is not a branch of moral philoso- 
 phy; it is a branch and constituent of sociology the science of 
 the social man. The location of political economy in the 
 province of sociology involves consequences of the greatest 
 moment. 
 
 At the first glance the object of economic investigation is 
 seen to be the actual behavior of human society as it passes 
 before us, posted at the economic standpoint, in historical 
 review; not the possible behavior of abstract economic atoms 
 acting under supposed conditions, which may never have existed. 
 
 There is no longer any concern about "the economic man," 
 there being no economic man separated from the living human 
 creature as he stands in actual relations to the social and political 
 groups in which he exists and to the natural world about him.
 
 ECONOMIC ADDRESSES 93 
 
 The springs and motions of economic activity lie, then, in 
 the whole complex life of a people. Subject to the conditions 
 of nature, men do and get what they desire to do and get. 
 The primary question in economics is, What are the needs, 
 wants, and desires of a people? In the new economy that has 
 begun to be, the topic of consumption, by Mill entirely shut 
 out of the science, and by most unduly subordinated, will have 
 the leading chapters. 
 
 "Consumption," said Jevons, prophetically, "is the dynamics 
 of political economy." To write political economy without 
 founding it on a discussion of the needs, wants, and desires of 
 men, is like "making watches without mainsprings," to borrow 
 a figure which Lowell applied to socialism. 
 
 The assignment of economics to the domain of social science 
 has a decisive effect on the choice of method. 
 
 It will be admitted here that the deductive method was 
 overworked by those early economists who regarded and taught 
 their science as a branch of moral philosophy, and it is no 
 slander to say that most of their successors have followed their 
 example. The political economy which undertakes to account 
 for any part of the activities of human society can not begin 
 with postulates nor continue by deduction. It must begin with 
 observation and record. Hypothesis must succeed hypothesis 
 until generalizations are reached which, satisfy the under- 
 standing. 3 
 
 The social sciences can flourish and develop only on a soil 
 prepared by the statistician. Sir William Petty and Arthur 
 Young understood and appreciated the importance of "political 
 arithmetic" as clearly as any of their successors, but only 
 meagre collections were possible in their times. So long as 
 observations were of men and things in the lump and on the 
 wing, generalizations were, and had to be, casual and uncertain. 
 
 A modern free state must, of course, and from the first, 
 establish and put into operation its revenue, administrative and 
 police functions. The very next thing, in my judgment, should 
 be the organization of its statistical establishment. The people 
 should demand the opening of a great people's intelligence 
 office, to collect and diffuse the results of their economic history 
 as it is made from day to day, for the advantage of all. There 
 ought to be no delay on the part of Congress in merging existing
 
 94 WILLIAM WATTS FOLWELL 
 
 elements into a national department of statistics, and placing at 
 the head of it the one man, whose name is already on your lips, 
 and whose life will, I trust, be spared to train more than one 
 disciple fitted to carry on the work which he has pioneered. 4 
 
 I turn now to another consequence of the assignment of 
 economics to the domain of sociology, which is cardinal. The 
 discussion I desire to offer will be in some degree corrective of 
 statements already made, whose immediate effect I hesitated to 
 weaken by limitation and concession. 
 
 In a brief paper which was accorded a reading at a previous 
 meeting of this Association, the suggestion was made that the 
 relations of human society fall into three natural subdivisions, 
 the social, the industrial, and the jural or political. This triple 
 analysis seems to be exhaustive, and each category logically 
 exclusive of the other two. Still, it needs ever to be borne in 
 mind that in the world of fact these relations blend, and interlace, 
 and interfuse interminably. 5 
 
 The economist, donning the philosopher's magic spectacles, 
 seeks to isolate from the maze the industrial relations. The 
 wonderful glasses do enable him to do this, but only to show 
 them on a background of the other relations; and this back- 
 ground, if I may be permitted to work the optical figure with 
 some freedom, is double, according as the industrial group is 
 tinted on the one hand by the social, on the other by the jural 
 or political. The field of view exhibits, therefore, two limbs or 
 hemispheres the socio-economic and the politico-economic. 
 
 This dichotomy seems to me to be fundamental in political 
 economy. 
 
 The history of economic doctrine shows these two hemi- 
 spheres to have been recognized, but alternatively or succes- 
 sively, not as co-existing and uniting on a median line to form a 
 complete body. 
 
 My contention is for the recognition and development of a 
 science of public economy. 
 
 It is time to suffer our eyes, so long color-blinded, to behold 
 the politico-economic hemisphere, which has all the while lain 
 before them, but unseen. It is this one-sided development of 
 economics which has placed its devotees at a disadvantage, and 
 so often rendered them unwise for counsel and helpless for 
 action, in public affairs.
 
 95 
 
 Since the close of the formative era of our national life, say 
 with Monroe's administration, alt the great national issues have 
 been economic. Such were the tariff, the slavery question, at 
 bottom, and the various monetary questions that have arisen, 
 culminating in the "silver question" of to-day. 
 
 Such issues multiply upon us. The platform of a reform 
 party lately contained more than twenty planks, all but two or 
 three economic planks. The issues of the pending campaign are 
 purely economic in their nature, and it is indeed pitiable that our 
 science is in such a state and in such repute that it can con- 
 tribute but slightly to the decision. 6 
 
 The claim which the country has upon her economists may 
 be sufficiently illustrated by two special and one general con- 
 sideration, to which I will but briefly refer. The first is that of 
 land. The public land policy of the nation has had for its 
 central idea that of getting the arable lands of the country into 
 the possession of small holders, themselves the cultivators. To 
 this policy is due, without doubt, in great part, the wealth, 
 intelligence, and happiness of our rural people. But there is a 
 cloud hardly as big as a man's hand now rising on this peaceful 
 horizon the beginning of a process which tends to supplant the 
 traditional American small holding by the bonanza farm, owned 
 by a corporation, and worked by hirelings. The "promoter" 
 is already showing his skillful hand in the exploitation of capital 
 and labor upon land. The danger referred to is all the more 
 threatening in view of the revolution which electricity is likely 
 to work in agriculture. 
 
 The bonanza farms then in mind, of hundreds or thousands of acres, 
 often including alternate sections of railroad lands, have turned out to 
 be ephemeral, because of the rapid exhaustion of the soil by continuous 
 single cropping. But large farming by means of machines still looms as 
 a danger. It is much to be hoped that the cheap but effective tractors 
 propelled by interior-combustion engines, not thought of twenty-five 
 years ago, may enable the small farmer to survive. When our rural 
 population becomes more homogeneous, and less migratory, cooperation 
 may render small farming the more profitable, and J. S. Rankin's dreams 
 may come true. 
 
 Our public land policy has made but slight account of lands 
 not arable. The vast mineral deposits of the country vast 
 beyond imagination were simply left to be the prey of the 
 adventurous and lucky prospector. That simple plan served
 
 96 WILLIAM WATTS FOLWELL 
 
 well enough when it applied to the inconsiderable deposits of 
 the Atlantic sea-board, before stone coal had been utilized for 
 fuel. It is not working so equitably in these days when a few 
 millionaires, under protection of laws adapted to a state which 
 knew not millionaires, nor corporations, nor promoters, are 
 permitted to seize, and without rendering any substantial 
 equivalent, to engross the untold wealth stored up in the prim- 
 itive formations which environ Lake Superior and form the 
 mountain masses of the great West of to-day. 
 
 There was a railway belonging to Wright and Davis, Michigan 
 lumber men . . . they owned somewhere in the neighborhood of 
 25,000 acres, that were particularly well situated on the range . . . 
 We bought the whole outfit [for $4,050,000] ... It became my 
 property .... About a year after I turned them over to the Lake 
 Superior Company . . . for the benefit of the stockholders of the 
 Great Northern Railway Company ... I was paid back the money 
 that I had paid for these properties with 5 per cent interest. All the 
 available^ore on the American continent that I know of, ... is owned 
 by people" ... I think . . . the explorations [of the Wright and 
 Davis purchase with some additional acquisitions] have shown some- 
 thing over 400,000,000 tons . . . There are 1,300,000,000 according to 
 the tax commissioner's report ... I should say 300,000,000 were 
 held by outside owners; 400,000,000 by us; and [the remainder by] The 
 United States Steel Corporation. 7 
 
 The "laws of trade" are a stale and exasperating joke to the 
 millions of people, using the anthracite coal of the Alleghanies, 
 when they know that the price of such fuel is or may be fixed 
 for them by a clique of a half dozen "magnates." 
 
 The same kind of thing is going on with our remaining 
 forest lands. Under the operation of laws intended to protect 
 and foster actual settlement and the establishment of homes and 
 home industries, the lumbering corporations are acquiring title 
 to vast provinces of timber lands, and have already formed 
 the combinations which enable them to dictate prices to con- 
 sumers. 
 
 "The remaining supply of standing timber in continental United 
 States (excluding Alaska) is now about 2,800,000,000,000 board feet of 
 which 2,200,000,000,000 board feet is privately owned. . . . Three 
 holdings (The Southern Pacific Company, The Weyerhaeuser Timber 
 Company, and the Northern Pacific Railway Company) include no less 
 than 1 1 per cent of the privately owned timber of the entire country . . . 
 The eight largest holdings together own approximately 15.4 per cent of 
 the total privately owned timber in the country . . . three hundred 
 and eighty-five holders control 55 . 6 per cent." 8
 
 ECONOMIC ADDRESSES 97 
 
 A further instance of the operation of the land policy, adapted 
 to out-grown conditions, is found in the arid lands of the great 
 West. These lands are not infertile; they only need the water 
 now running to waste down the mountain ravines and canyons 
 to produce with an abundance and a regularity marvelous in the 
 eyes of the eastern farmer, whose rainfall may fail him when 
 failure is ruin, or drown out his crops with ill-timed generosity. 
 The law of supply and demand does not offer any promising 
 solution of the problem of impounding and distributing these 
 life and wealth-giving waters. A statute of the state of Mon- 
 tana, granting title to the man who first dams up and leads away 
 for irrigating purposes the waters of a stream, has already begot- 
 ten a wilderness of law suits, to the great comfort of Montana 
 attorneys, but also to the sorrow and cost of Montana farmers. 9 
 
 I can barely mention here, as an item of kindred interest, 
 the engrossing of vast ranges of pasture lands in the western 
 mountain regions by "combines" of ranchmen, who buy up 
 slight fringes of lands along the water courses. 
 
 Need more be said to show that a new and juster public 
 policy of land must be devised and established ? 
 
 Next to the land policy (and perhaps next above, rather 
 than next below) stands the labor policy of the nation. Laissez 
 faire was good enough and simple enough forty years ago, when 
 "labor" meant the single hired man of the small farmer, or the 
 little group of journeymen and apprentices, who wrought side 
 by side with their master in the little shop of a small manu- 
 facturer; and when "capital" meant the savings and pinchings 
 of years of toil and self-denial. 
 
 The arrival of large production, and the massing of vast 
 capitals by exploitation, and the enormous increase of the labor 
 force of the country from foreign sources, has changed that 
 idyllic state of things. 
 
 In the changed condition of our industrial state, the relation 
 of the individual workman to the great employing corporation 
 I venture to suggest is not simply that of contract termin- 
 able at the caprice of either party. The conditions of free con- 
 tracting fail; freedom of movement, wide and active competition 
 for labor between employers, the possession of a complete art or 
 trade by the artisan. This is a hard proposition to demonstrate, 
 but its substantial truth is felt deep in the hearts of thousands
 
 98 WILLIAM WATTS FOLWELL 
 
 of toilers and earnest friends of "labor," viewing the disadvan- 
 tageous situation of the modern artisan in large establishments, 
 endeavor to characterize it by the striking but extravagant term 
 "wage-slavery." For protection and mutual aid labor long since 
 resorted to its ancient device of combination, and the trades 
 union came to stay as long as large production and large capitals 
 shall last. No one who understands the history of economic 
 movements can deny the great service wrought by labor organi- 
 zation. But for it "wage-slavery" would have become a fact, as 
 it is now only a tendency. Nor will it, on the other hand, be 
 denied that this service has been rendered at the cost of enor- 
 mous self-caused sacrifices, and suffering among the laboring 
 people, and great inconvenience and damage to general society. 
 Shall we not make every effort which ingenuity may suggest 
 to work out a public policy of industry, which shall establish 
 justice between the working man and his employer, and also 
 ensure ^ society domestic tranquillity? In some of our states, 
 laws have been passed to regulate the party caucuses, thus 
 bringing party politics under the operation of the law. 10 On the 
 same principle may not the law interpose to regulate trades 
 unions and to restrain them within proper limits ? There is no 
 more sense in the stoppage of traffic on railway systems, because 
 of disagreements as to working hours and wages than there 
 would be in leaving steamers to drift in mid-ocean, because the 
 crews did not like the flavor of their dunderfunk. 
 
 "Ninety-four per cent of the 400,000 railroad workers voted for a 
 strike if the carriers should fail to grant their demands. . . . The 
 president appealed to the brotherhood heads to have the strike order for 
 Labor day rescinded, but was told that the order was beyond recall. 
 The impending strike was averted September 2 by the passage of the 
 Adamson eight-hour bill. . . . The Adamson eight-hour bill passed 
 the House September 1, 1916 by a vote of 239 to 56, and the Senate 
 by a vote of 43 to 28. ... In both houses the measure was signed 
 within a few minutes after the final vote in the Senate, and it was at 
 once sent to the White House where President Wilson signed it at 7:30 
 o'clock Sunday morning . . . Three hours after the measure passed 
 the Senate the heads of the four great railroad brotherhoods cancelled 
 the strike orders which were to have taken effect on September 4, 19 16." 11 
 
 Trades unions will at length come under the law and will be 
 all the more beneficent for so doing. The suggestion, which is 
 heard of late, that in some lines at least, membership be made 
 obligatory, seems worthy of serious consideration. In working
 
 ECONOMIC ADDRESSES 99 
 
 out a public policy of labor, the beginning might properly be 
 made with some of those industries which have been engrossed 
 by capitalistic combines, or are natural monopolies. Whenever 
 a combination seizes upon such an industry, acquiring the 
 natural deposits of material, the only right of way, and the 
 whole plant of the business, rendering .competition impossible, 
 it has by those very acts ceased to be a private concern. It has 
 made itself agent and trustee of the public, and subjected itself 
 to public visitation and control. This is good common law. 
 
 There is a large body of most earnest souls who despair of 
 the economic amelioration of humanity on its present line of 
 advance. Freedom of contract has, they say, found its logical 
 outcome in the corporation and trust, which annul competition. 
 Individualism in things economic has wrought the devil's own 
 ruin, and must give way give way to socialism, by which they 
 mean the collectivistic state, which state is to be sole proprietor, 
 sole capitalist, sole employer. 
 
 Could such a state be organized and operated it would 
 establish a most galling, suffocating, deadening slavery. But it 
 will never exist, except in the romances of amiable enthusiasts. 12 
 
 For all that, there is good in socialism, when tempered and 
 moderated by due admixture with individualism. The social- 
 istic principle is capable of far wider application in human affairs 
 than has yet been made, and will in the future be given a de- 
 velopment in institutions which, could we foresee it, would 
 surprise, perhaps alarm, us all. The modern division of labor 
 makes classes and individuals more dependent on one another 
 than ever before. The problem for the economist of the future 
 is that of so conserving public interests as not to paralyze private 
 energy; to gain for -society all the advantages of brotherhood 
 without sapping and withering manhood. Brotherhood on the 
 basis of manhood, the burden of Burns' glorious song, is both 
 the guiding principle and the final but we must fear very dis- 
 tant goal of human progress. 
 
 "Then let us pray, that come it may 
 
 As come it will for a' that; 
 That sense and worth, o'er a' the earth, 
 
 May bear the gree, and a' that, 
 For a' that, and a' that 
 
 It's comin' yet for a* that. 
 When man to man the world o'er 
 
 Shall brothers be for a' that."
 
 NOTES 
 
 1 American Economic Association Publications 8:19-40. 
 
 2 American Economic Review 8:15. Presidential address of Professor John R. Com- 
 mons at the Thirtieth Annual Meeting of the American Economic Association, 1917. 
 
 3 See W. S. Jevons, Principles of Political Economy, London, 1911, pp. 16-22 and 
 Theory of Political Economy, London, 1911, p. 39. 
 
 4 Colonel Carroll D. Wright, for many years United States Commissioner of Agriculture 
 and charter member of the American Economic Association. 
 
 * American Economic Association, Publications 4:383. 
 
 Fields Sciences 
 
 : Ethical, . ' . "Social Science" 
 (PRIVATE 
 Industrial, . ' . ECONOMICS { 
 
 (PUBLIC 
 Jural, . ' . Politics 
 
 * Platform of the People's Party adopted at the convention held in Omaha, Nebraska, 
 July 4, 1892. See any large city daily of the time. 
 
 7 Hearings before the Committee of Investigation of United States Steel Corporation, 
 House of Representatives, 1912. Testimony of James J. Hill, 4:3155, 3160, 3162, 3168-9, 
 3106, 3206, 3236. The facts illustrate the colossal stupidity of our national mining policy, 
 as well as Mr. Hill's magnanimity. On page 3194 the holdings of the Steel Corporation 
 were placed by Mr. Hill's attorney at 700,000,000 of tons. 
 
 8 Department of Commerce and Labor, Bureau of Corporations, Part I. The Timber 
 Industry, 1913, 1:12-13. See Chapter VI, Public Land Policy a Primary Cause of 
 Consolidation of Timber Ownership, 215-271. 
 
 9 See John R. Commons' address as cited ante, page 14, for unanticipated evils growing 
 out of the Government Reclamation Policy. 
 
 10 See The General Statutes of Minnesota, 1913, sections 335 and following for the existing 
 law providing for "Nominations by Direct Vote." It was first enacted in 1905 and has been 
 repeatedly amended. Although it has been severely criticized no legislature has yet ventured 
 to reinstall the "machine" which it was intended to abolish. 
 
 11 Information Annual, 1916, p. 481. 
 
 12 Herbert Spencer, Coming Slavery.
 
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