PROGRESS <iuf PLENTY 
 
Progress (S, Plenty^ 
 
 cADVOCATES THE SINGLE TAX 
 A SCIENTIFIC CURRENCY 
 A MINIMUM WAGE TO 
 ABOLISH POVERTY 
 UNEMPLOYMENT 
 
 JAMES S. PATON 
 
 BOSTON 
 
 THE CHRISTOPHER PRESS 
 1913 
 
CONTENTS 
 
 CHAPTER I 
 Introductory 9 
 
 CHAPTER II 
 
 The Cause of Low Wages 17 
 
 High rent and high interest are both causes of 
 low wage , Competition fixes the rate of 
 wages, bv.t is not the cause of low wages. 
 Monopoo of land and capital the cause of 
 low wages, as it leaves the laborers helpless, 
 and forces them to accept whatever wages 
 are offered. 
 
 CHAPTER III 
 
 Henry George's Laws of Distribution 31 
 
 Mr. George's theory that high rent lowers both 
 interest and wages admitted, but his theory 
 that high interest is a cause of high wages 
 is denied and disproved. George claimed that 
 laws of distribution were laws of proportion; 
 his failure to discover the law of wages 
 caused by not sticking to this rule. Two rea- 
 sons why wages are low, George discovered 
 one. Supply and demand, or Competition, the 
 true law of distribution. 
 
 271907 
 
CHAPTER IV 
 
 Henry George's Remedy 55 
 
 Private property in land may be defended upon 
 the same grounds as chattel slavery but upon 
 no other. George's remedy for an unjust 
 system of distribution is to substitute rent 
 for taxes. Rent and interest almost identical. 
 Money reform and land reform related. 
 
 CHAPTER V 
 
 Money Reform * . . 60 
 
 National Citizens' League for a Reformed Bank- 
 ing system. Resolutions adopted by National 
 Board of Trade. A National Reserve needed, 
 but money should be issued when required 
 by the Government. More money required 
 whenever interest rises, and less when inter- 
 est falls. 
 
 CHAPTER VI 
 
 Some Principles of Money 65 
 
 Teachings of Alexander Del Mar. Essence of 
 money limitation. Volume of currency should 
 be kept at constant ratio to volume of ex- 
 changes. 
 
 CHAPTER VII 
 
 An Automatic Currency 71 
 
 Can be secured by the Government supplying 
 the demand for money at a fixed rate of 
 interest. Private parties will prevent infla- 
 tion by lending money on better terms than 
 the Government when there is enough in 
 circulation, and Government loans will only 
 be called for when more money is really 
 needed. 
 
CHAPTER VIII 
 
 Government Control of the Currency 78 
 
 An article on Banking Reform criticized. 
 
 CHAPTER IX 
 
 The Multiple Standard 94 
 
 CHAPTER X 
 
 Direct Legislation 100 
 
 Quotations from "Equity." 
 
 CHAPTER XI 
 
 Socialist Political Economy 110 
 
 Principles of Socialism, Civil Liberty, and Social 
 Justice. No detailed plan generally endorsed. 
 If Socialism comes it must come by install- 
 ments, as necessity for reform arises. Mis- 
 use of word "value" cause of confusion. 
 
 CHAPTER XII 
 
 Reformers Must Unite to Win 123 
 
 Must have a sound economic platform before 
 it is possible to unite. 
 
 CHAPTER XIII 
 Conclusion . 130 
 
CHAPTER I 
 
 INTRODUCTORY 
 
 My reason for writing this book is, that I 
 am not satisfied with any book that has yet 
 been written on the subject of Political Econ- 
 omy. Political Economy is a science in the 
 making, and although it has made great pro- 
 gress in this generation, it is still far from 
 perfect. I have studied Henry George's writ- 
 ings more than any other, and accept his teach- 
 ings in regard to land, but not in regard to 
 the relations between labor and capital. I 
 accept the teachings of Alexander Del Mar 
 on the science of Money; and the teaching 
 of Wm. Blissard on the Ethics of Interest. 
 I do not agree with writers who think there is 
 an irreconcilable difference between individu- 
 alists and Socialists. We are all individuals, 
 and as such have certain rights. We are all 
 members of society, and as such have certain 
 duties. We should all be interested in main- 
 taining our individual liberties where they do 
 not conflict with the welfare of society, and 
 we should all consider the welfare of society 
 of the first importance. 
 
10 PROGRESS AND PLENTY 
 
 The interests of the workers are identical. 
 They want conditions that will give high wages 
 and employment for all. The only obstacle 
 that keeps Socialists and Individualists apart 
 is ignorance, and the ignorance is not all on 
 one side, neither is the knowledge. 
 
 I see some truths that have been overlooked 
 by reformers and hope to present them in such 
 a way that reformers who are now opposing 
 each other may be brought to work in har- 
 mony. It is my purpose to review the teach- 
 ings of the different schools of Political Econ- 
 omy in regard to the distribution of wealth, 
 accept truth, and reject error, no matter how 
 many endorse it. As I agree with Henry 
 George more than with any other writer I will 
 follow his argument in regard to the distribu- 
 tion of wealth. He saw that previous writers 
 failed to state the laws of distribution scien- 
 tifically. He saw also that the laws should 
 harmonize, and came so near discovering them 
 that when his mistakes are seen it is very easy 
 to see what the true law is. 
 
 The writers he criticises considered Rent 
 and Interest so exactly similar in their nature 
 that they included land with capital, and rent 
 with interest. George saw that considering 
 land as capital was a mistake that was sure 
 to lead to confusion, and in trying to correct 
 this mistake he went to the other extreme and 
 tried to prove that rent and interest affected 
 
PROGRESS AND PLENTY 11 
 
 wages differently; that the effect of high rent 
 was to lower wages, but that the effect of high 
 interest on wages was to raise them. This 
 theory is so contrary to common knowledge 
 that few, even of his followers, accept it. It 
 was this theory that prevented Henry George 
 from seeing that labor needed a remedy to 
 prevent capitalists from oppressing laborers 
 as well as a remedy to prevent the oppression 
 of laborers by landlords. I purpose pointing 
 out where George's reasoning was false, and 
 correcting his mistakes ; then I will show that 
 there is a remedy for the oppressions of capi- 
 tal similar to George's remedy for landlordism. 
 
 The true reformer owes allegiance to no 
 man or party. He follows the truth wherever 
 it leads, and is loyal to it alone. The great 
 trouble with reform movements is that so 
 many think they must stick to their party, right 
 or wrong, and allow some one who knows more 
 than they do to do their thinking. No man is 
 perfect, yet all know something. You may 
 see the mistake of a person who knows more 
 than you do, and you may be able to correct it. 
 
 I once heard a Socialist lecturer say that 
 Socialism would come by instalments, and he 
 was glad of it, as in that way we would get 
 rid of the rubbish. Now we are all ready for 
 Socialism minus the rubbish, the trouble is 
 that we cannot all agree as to what is rubbish 
 and what is useful. We want to learn to 
 
12 PROGRESS AND PLENTY 
 
 distinguish truth from rubbish. We want a 
 science of Political Economy free from rub- 
 bish. There is nothing true in Socialism that 
 will not harmonize with what is true in any 
 other reform movement; and when we learn 
 the true principles of Government we will soon 
 learn to apply them. 
 
 Henry George tried his best to prevent his 
 followers from following him blindly. He 
 accepted nothing on authority himself, and 
 always gave his reasons for his belief, but most 
 men are inclined to follow a leader and think 
 they are bound to defend all his teachings, 
 right or wrong; and George has many follow- 
 ers of that kind. It is of more importance 
 to understand the true principles of Political 
 Economy than to uphold any man's opinions. 
 
 Although I have criticized Mr. George more 
 than any other reformer, I admire his char- 
 acter more than that of any other writer; and 
 consider his solution of the land problem the 
 best offered. I intend to show that the prin- 
 ciples taught by him have a wider application 
 than he gave them; that as other Political 
 Economists teach, rent and interest are almost 
 identical in their nature, and that to apply the 
 same principles to money reform which George 
 applied to land reform, will give us a money 
 system as far superior to any system ever 
 tried as George's land policy is superior to 
 any other system of land tenure. Socialism, 
 
PROGRESS AND PLENTY 13 
 
 today, is not what it was twenty years ago. 
 Socialists are progressive, and although their 
 plan may still be far from perfect, their pro- 
 gram for legislative action in the near future 
 is pretty good. It may resemble the first 
 machine invented for some particular purpose 
 in being too complicated, and it is my pur- 
 pose to show how a simpler plan will give bet- 
 ter results. 
 
 Socialists call our present system of pro- 
 duction the competitive system. No socialist 
 writer, as far as I know, has followed the 
 methods of other economic writers, and tried 
 to discover the natural laws that govern the 
 distribution of wealth; and many of their pro- 
 posed reforms do not harmonize with natural 
 laws. 
 
 According to orthodox political economy, 
 there are three factors in production, land, 
 labor, and capital. These are reduced to two, 
 by calling land capital. 
 
 Henry George starts in with the same three 
 factors, but before he gets through he says 
 there are really only two factors, that: "In 
 truth the primary division of wealth is dual, 
 not tripartite. Capital is but a form of labor, 
 and its distinction from labor is in reality but 
 a subdivision, just as the division of labor into 
 skilled and unskilled would be." 
 
 Now I purpose to show that there are three 
 factors in production, labor, the active factor, 
 
14 PROGRESS AND PLENTY 
 
 and land and capital, the passive factors. 
 That the natural order is for the laborer to 
 apply himself to the production of wealth by 
 using land and the tools and other capital 
 produced by labor to assist him in producing 
 more wealth. Where the laborer has access 
 to free land, and has capital of his own, he 
 gets all he produces; but if he must give a 
 part of his produce to a landlord for the use 
 of land, or to a capitalist for the use of capi- 
 tal in any form, his wages must be lowered 
 by as much as the landlord or capitalist receive. 
 In a case where the capitalist enables him to 
 produce more wealth his wages will not depend 
 upon what he produces, but upon what he has 
 left after paying interest, just as they depend 
 upon what is left after paying rent, where he 
 has rent to pay. 
 
 Mr. George attaches great importance to 
 the fact that capital is produced by labor, and 
 argues from that fact that the relations be- 
 tween labor and capital must be harmonious. 
 I do not consider his argument sound. It is 
 of no consequence where capital comes from, 
 as long as the laborer does not own it, and has 
 to pay a capitalist for its use. The majority 
 of mankind are helpless, because they are 
 deprived of their right to the use of the earth; 
 and also because they are deprived of such a 
 large portion of what they produce by those 
 who own capital. Land being monopolized 
 
PROGRESS AND PLENTY 15 
 
 by a part of society the rest must compete for 
 its use. Competition for land fixes the share 
 of the landlord. Other forms of wealth that 
 are required to assist in the production of 
 wealth are also monopolized by a part of the 
 people. The necessities of the rest force them 
 to compete for capital. The landlord gets a 
 part of what they produce for allowing them 
 to use suitable land, whether farm, mine, or 
 factory site. The capitalist also gets a part 
 for allowing them to use tools, machinery, 
 stocks of goods, etc. What each gets depends 
 upon the intensity of competiton, or upon sup- 
 ply and demand. Competition is the law of 
 distribution. It is natural for selfish men to 
 compete, and evolution has not carried us 
 beyond that stage yet. We cannot in the near 
 future abolish competition; but we can con- 
 trol conditions, so that competition instead of 
 enriching the few will benefit the masses and 
 raise wages. I intend in the following pages 
 to show how it may be done. As to the pro- 
 duction of wealth, the problem is being solved. 
 Poverty and low wages are not caused by our 
 inability to produce sufficient for all, but by 
 unjust laws that prevent the mass of man- 
 kind from supplying their wants by their labor, 
 without paying a toll for the privilege in the 
 shape of rent and interest; or accepting low 
 wages. As that is the case I will not take up 
 the question of production, but begin with the 
 
16 PROGRESS AND PLENTY 
 
 law of distribution, and after reviewing what 
 economic writers teach upon that subject, I 
 will proceed to discuss remedies. 
 
CHAPTER II 
 
 THE CAUSE OF LOW WAGES 
 
 Why are wages low? One third of a cen- 
 tury has passed since Henry George at- 
 tempted to answer that question by the meth- 
 ods of Political Economy, and discover why 
 laborers do not receive a just share of the 
 wealth which they produce; and why their 
 share of the product does not increase as their 
 labor becomes more effective through im- 
 proved methods. His explanation was: That 
 wages do not increase with increase in pro- 
 ductive power, because the price of land and 
 rent does; and the landlord receives the whole 
 increase. 
 
 The fact that the rate of interest has fallen 
 of late years seemed to him to prove that the 
 capitalist was getting less. The share of the 
 capitalist in the production of wealth does not 
 depend upon the rate of interest entirely; 
 unless he is simply a money lender. There 
 are other ways by which capitalists manage 
 to get a large portion of what labor produces, 
 that do not depend upon the rate of interest, 
 and I think we will find that Mr. George did 
 
18 PROGRESS AND PLENTY 
 
 not attach as much importance to these as he 
 should. 
 
 As land, labor, and capital are the only fac- 
 tors in production, the whole product must be 
 divided between these three factors. The 
 term rent covers the whole of the dividend 
 that goes to the landowner. The term wages 
 covers the whole share of the laborer. But 
 the term Interest does not as commonly used 
 cover the whole share of the capitalist. As 
 Henry George used it to denote the share of 
 the capitalist, and sometimes used the word 
 in its narrow sense, it is not surprising that 
 he came to the conclusion that the capitalist 
 does not receive too large a share of the pro- 
 duct. 
 
 A low rate of interest indicates that plenty 
 of money is in circulation and offered to loan. 
 A capitalist may borrow money, pay rent, 
 wages, and interest, and make a profit. Some 
 will contend that the entrepreneur is really a 
 laborer and that what he makes he earns by 
 his labor in superintending and managing the 
 enterprise. While that is at least partly true, 
 it is also true that it is to his interest to keep 
 wages low, and that one reason why wages 
 are low is that such men get so much. The 
 profits of the entrepreneur depend upon the 
 price he receives for the goods he produced, 
 and not upon the rate of interest on money. 
 I mean that the price he gets for the goods 
 
PROGRESS AND PLENTY 19 
 
 is the main thing. Of course his profits do 
 depend upon getting low rates on rent, wages, 
 and interest, for he trys to make a profit on 
 all three factors. 
 
 Henry George claimed that there was no 
 real conflict between labor and capital, and 
 that capital was the friend of labor. Now that 
 is strictly true, and it is just as true that there 
 is no conflict between land and labor, or be- 
 tween land and capital and that land is the 
 friend of labor. When a laborer owns what 
 land and capital he requires, he receives the 
 whole product of his labor and whether he gets 
 it as wages, rent, or interest is not a matter of 
 any consequence to him, as he gets it all in 
 either case. But when he has to accept low 
 wages on account of high rent, or high interest, 
 the case is quite different. Although there is 
 no conflict between labor and capital, there are 
 often conflicts between laborers and capitalists. 
 When a capitalist hires laborers his profits de- 
 pend partly upon the wages he pays them, and 
 partly upon the rent he pays for the land they 
 use. He generally owns the land as well as 
 the capital, and in that case there is no conflict 
 between landlord and capitalist, for as they 
 are combined in one person or corporation, 
 they get the whole product except wages and 
 consequently landlord and capitalist are gen- 
 erally combined to keep wages low, and rent 
 and profits high. When rent, wages, and inter- 
 
20 PROGRESS AND PLENTY 
 
 est go to three different persons each one is op- 
 posed to the other two. If a man owns capital, 
 and pays rent and wages, he wants low rent 
 and low wages. If he owns more capital and 
 land than he can use himself, he is only inter- 
 ested in keeping wages low; for as he gets all 
 except wages, it does not matter to him 
 whether he gets it as a landowner or as a cap- 
 italist. Nor does it matter to the laborer 
 whether the portion of his product taken from 
 him goes to a landowner, or to a capitalist. 
 The capitalist stands in the same relation to the 
 laborer as the landlord, and Mr. George's 
 theory that capital is the friend of labor is only 
 true when the laborer either owns the capital 
 or does not have to pay too much for its use. 
 He may pay too much for its use, either by 
 paying high interest on borrowed capital, or 
 by accepting low wages. 
 
 There is seldom any conflict between land- 
 lord and capitalist, because a capitalist may 
 become a landlord by buying land, or a land- 
 lord may become a capitalist, either by selling 
 part of his land or by saving part of his rent, 
 and they are generally combined in the same 
 person. No matter how efficient a laborer may 
 be, he is utterly helpless and dependent, with- 
 out the other two factors. If he has enough 
 land and capital to apply his own labor effect- 
 ively, in the calling of his choice, he is inde- 
 pendent. If he must look to others to supply 
 
PROGRESS AND PLENTY 21 
 
 him with land and capital, he is dependent, 
 more or less, according to the terms he can 
 make with landlord and capitalist. If his ser- 
 vices are in great demand, that is if a great 
 many who are able to pay for them, require 
 them, and if there are no other laborers offer- 
 ing to perform the labor he can do, his wages 
 will be high. If, on the other hand, there are 
 a great many more laborers offering to per- 
 form the services he can render than there are 
 employers able and willing to pay for them, 
 then his wages will be very low, and he will be 
 often unemployed. It is competition that fixes 
 the rate of wages. 
 
 The plan adopted by organized laborers to 
 raise wages is to refuse to work unless they 
 can secure what they consider a fair wage. It 
 is the plan adopted by all laborers, for that 
 matter. Employers combine to resist the de- 
 mands of laborers for higher wages, and often 
 to offer less. A better plan is needed for sev- 
 eral reasons : In the first place, it is to be hoped 
 that the conflict between capitalist and laborer 
 over wages will be permanently settled ; and it 
 never can be in that way. Then it is an un- 
 equal contest, for it is not possible for laborers 
 to refuse to work until the employers are com- 
 pelled to give in. They may cause the capital- 
 ists to lose considerable wealth and the capital- 
 ists sometimes give in rather than to suffer 
 loss and inconvenience; but the laborers are 
 
22 PROGRESS AND PLENTY 
 
 soon facing starvation and can never hope to 
 bring the capitalists to that point. When the 
 laborers win in a strike it is not only at the 
 expense of all their savings, and suffering and 
 poverty besides, but the financial loss they 
 cause their employers to sustain, is an indirect 
 injury to themselves. Wealth is required to 
 produce wealth, or they would not have to 
 work for wealthy people, and at the end of a 
 long strike the employers are not able to em- 
 ploy as many laborers as they were at the be- 
 ginning. 
 
 Under present conditions, laborers are often 
 forced to strike for self-preservation. It is 
 time that conditions were changed so that 
 strikes will be unnecessary. The remedy is a 
 problem that should interest the whole peo- 
 ple, as all suffer more or less indirectly from 
 strikes. Competition is considered by many 
 to be the cause of low wages, and many wish to 
 abolish it. It will be well to analyze competi- 
 tion and see how it works, and find out whether 
 it is really the cause of low wages or not. All 
 men must consume more or less wealth every 
 day of their lives, and most of them want more 
 of it than they can get. Laborers are seldom 
 satisfied with their wages, landlords always 
 want higher rent, and capitalists more profits 
 on their investments. A person who has no< 
 land or capital of his own, is generally com- 
 pelled to offer his services to others for wages.,, 
 
PROGRESS AND PLENTY 23 
 
 and tries to get as high wages as possible. But 
 he must sooner or later accept the terms of- 
 fered. 
 
 One who has land and capital can engage in 
 some industry on his own account. If he has 
 more land than he requires himself, he can 
 rent the surplus to others or he can hire others 
 to help him to use his land. In either case he 
 keeps as much as possible for himself. The 
 laborer cannot remain idle very long, and if 
 his wages are very low, he must have steady 
 employment. 
 
 A capitalist or a landlord may sometimes 
 require assistance very much, but never to the 
 same extent that a laborer requires work. One 
 of the principal functions of Governments in 
 former times was to keep the slaves or laborers 
 in subordination, and it is still so. The rich 
 live on the wealth produced by the poor, and 
 try to keep them in a helpless condition, know- 
 ing that if the laborers were free it would be 
 impossible to appropriate so much of their 
 earnings. Three things are necessary to our 
 present mode of production and distribution 
 to enable the rich to live on the earnings of the 
 workers. The workers must be kept from 
 using land on easy terms, and they must be 
 kept from accumulating capital, and they must 
 be forced to compete. Under favorable condi- 
 tions competition raises wages, but when the 
 laborer has nothing to fall back on, when he 
 
24 PROGRESS AND PLENTY 
 
 must either accept the wages offered, or starve, 
 then competition may bring wages down to a 
 bare subsistence. In a new country, with 
 plenty of rich land, and opportunities for the 
 investment of capital, but with few laborers, 
 land being plentiful is cheap. Immigration 
 sets in, laborers with a little capital can employ 
 themselves, and those wishing to hire laborers 
 find them scarce. They compete for laborers 
 and wages rise. Laborers ask for higher wages 
 and get them, as some of the employers can- 
 not find as many laborers as they wish to hire, 
 and can only get them by paying higher wages, 
 than other employers. Those who are engaged 
 in the most profitable industries, or own the 
 best land, can afford to pay the highest wages, 
 and by competing can secure the help they re- 
 quire, while those on less productive land or 
 engaged in less profitable occupations are short 
 of help. 
 
 Capital is also in demand, and interest high 
 for the same reason that wages are high; it is 
 scarce, and competition for its use forces inter- 
 est up. Where such conditions exist wealth is 
 fairly divided. The land owners, although 
 paying high wages and interest are not com- 
 pelled to pay too much, for they need not un- 
 dertake more than they can do themselves. 
 
 Conditions gradually change with the in- 
 crease of population. There is soon a man for 
 every job, and sometimes men who cannot find 
 
PROGRESS AND PLENTY 25 
 
 employment at high wages. Employers find 
 that they can offer less wages and still secure 
 all the help they require. As time goes on the 
 condition of the wage earners gradually 
 changes until they are forced to accept very 
 low wages. They even take the places of those 
 who are employed by offering to work for less. 
 There is nothing in this examination to show 
 that competition is to blame for the low wages 
 of the latter period, as competition had a fa- 
 vorable effect upon wages at the start and 
 would have continued to keep wages high if 
 conditions had remained favorable. The prin- 
 cipal change that affects wages as a new coun- 
 try settles up, is the rise in the price of land. 
 While land is free or cheap laborers are con- 
 tinually leaving employment for wages, to 
 work for themselves, and landowners get very 
 little of the product of labor for their share, 
 unless they contribute by working themselves. 
 But when population increases and land goes 
 up in price, fewer laborers leave the labor mar- 
 ket, and landowners receive a large share of 
 what is produced, as rent for their land, with- 
 out contributing any labor themselves. The 
 wage workers of the early days are now mostly 
 landlords and capitalists in a small way at 
 least but the laborer of late years has small 
 chance to become either, though a few always 
 manage to gain financial success either by ex- 
 ceptional ability or favorable circumstances. 
 
26 PROGRESS AND PLENTY 
 
 The wealth per capita is now much greater 
 than in the days of the first settlers, but it is 
 not so evenly divided. Landlord and capital- 
 ist both continue to prosper. The two are 
 generally combined in the same person so their 
 relations are harmonious. The rate of interest 
 has fallen, but the capitalist has more money 
 invested, and what with interest on the larger 
 amount, profits on monopolies of one kind or 
 another, he and the landlord get a far larger 
 portion of the wealth produced than formerly. 
 Land and capital being interchangeable keeps 
 landlord and capitalist on an equal footing; 
 as wages fall the laborer comes to be looked 
 upon as an inferior. Deprive a wealthy man 
 of both land and capital and he is still on an 
 equal footing with the laborer. Land and cap- 
 ital both give him an advantage over the la- 
 borer. In the struggle for high wages, the 
 laborer can only obtain them by refusing to 
 accept low wages, and he cannot refuse low 
 wages very long, especially if there are many 
 unemployed in his neighborhood. 
 
 This study of competition has shown that 
 under favorable circumstances competition 
 will raise wages but that the laborer is not 
 upon an equal footing with the landlord and 
 capitalist, and that he can only secure high 
 wages when there is a demand for more labor- 
 ers than can be secured at low wages. 
 
 To abolish competition when conditions are 
 
PROGRESS AND PLENTY 27 
 
 favorable to laborers would prevent wages 
 from rising. To abolish competition when 
 conditions were unfavorable would prevent 
 wages from falling and those who had employ- 
 ment would keep their jobs, but it would not 
 help the unemployed. It is not competition 
 that causes low wages, but wrong conditions. 
 Low wages are caused partly principally, I 
 should say by the monopoly of the land. 
 There are other things that stand in the way 
 of high wages for all. In his book "The 
 Economic and Social Problem," Michael Flur- 
 schiem states the matter very nicely; he says: 
 "The great social problem is: First, the ques- 
 tion why a growing number of workers have 
 to go without necessaries and luxuries, though 
 only too anxious to produce them for each 
 other; and, Second, what are the obstacles 
 interposed against the exertion of their pro- 
 ductive power?" He shows that want is not 
 owing to the inability of the workers to pro- 
 duce an abundant supply for all; but to the 
 unjust division of the wealth produced, caused 
 by the monopoly of the land and capital. He 
 uses an illustration to explain the problem 
 something like this: Crusoe has to work hard 
 for a bare living on his Island (for he claims 
 the whole island) until Friday arrives, then 
 his lot is somewhat improved, as Friday has 
 to give him a portion of what he produces as 
 rent. More laborers arrive and Crusoe lives 
 
28 PROGRESS AND PLENTY 
 
 in luxury and idleness, but the workers only 
 get a bare living. A ship arrives and Crusoe 
 supplies his tenants with improved tools. 
 Then they all live in luxury for a time. After 
 a while Crusoe raises the rent and also charges 
 high interest for the use of his capital. Then 
 the tenants only get a bare living and Crusoe 
 cannot consume his share. The consequence 
 is overproduction, laborers are discharged and 
 there is soon hunger and destitution on the 
 island although there is plenty for all, if high 
 wages had only divided the wealth so that it 
 could be consumed. 
 
 Those who live on rent and interest cannot 
 consume their share of the wealth produced, 
 and those who produce it do not get their just 
 share; the consequence is overproduction ac- 
 companied by hard times and destitution, an 
 utterly unnatural state of affairs. It does not 
 matter whether the laborers on the island are 
 slaves, as Flurscheim's illustration supposes 
 them to be, or free laborers, as I have stated 
 the case; nor does it matter whether they 
 compete or not, as long as Crusoe has a mon- 
 opoly of the land and capital. The remedy 
 for the evils on the island is for Crusoe to 
 reduce rents, and interest, and raise wages. 
 I think it will be as well to carry this illus- 
 tration a little farther while I am at it, and 
 illustrate the remedies I advocate. 
 
 We will suppose that Crusoe is a good 
 
PROGRESS AND PLENTY 29 
 
 fellow and wants to have a prosperous island. 
 We will suppose that he got a copy of Pro- 
 gress and Poverty and decided to use all his 
 rent for the public good, instead of for his 
 own private gain, and do away with taxes. 
 The island was soon very prosperous, but 
 Crusoe had a lot of interest on hand and the 
 thought came to him that he might use it in 
 the same way as he used the rent. Popula- 
 tion was increasing and money was needed to 
 carry on commerce. Crusoe issued notes and 
 loaned them to all who had good security, at 
 4% interest. After some time no one on the 
 island would think of paying more than four 
 per cent for a loan of money, for they knew 
 that they could always get it from Crusoe at 
 that rate. Those who had money to lend soon 
 found that if they wanted to keep their money 
 invested they would have to offer it on just a 
 little better terms than Crusoe. Then some 
 of the Islanders came to Crusoe and wanted 
 him to lend them money for less than 4%, but 
 he said: No, if I lower the rate of interest 
 more money will be called for and our cur- 
 rency will depreciate in value. Whenever 
 you can borrow money from private parties 
 at less than my rate, do so ; but whenever you 
 cannot, come to me and I will let you have all 
 you need. In this way we will always have 
 as much money as we require on our island, 
 and we will never have any more, for when- 
 
30 PROGRESS AND PLENTY 
 
 ever there is a surplus in circulation it can be 
 borrowed at less than the rate I charge and 
 will be taken up quickly to return my 4% 
 loans. After that there was never a money 
 panic on the island, wages were always high 
 and no country in the world had such good 
 schools or so many public works. 
 
CHAPTER III 
 
 HENRY GEORGE'S LAWS OF DISTRIBUTION 
 
 Mr. George was an earnest seeker after the 
 truth. He really wanted to discover why 
 wages do not rise with the increase of wealth, 
 and he always stated his reasons for his be- 
 lief plainly and fearlessly. 
 
 He differs from all other writers on political 
 economy in his theory of the laws of distribu- 
 tion. He maintains that as land, labor, and 
 capital are the three factors in production, 
 land cannot be considered as capital, but must 
 be kept separate, otherwise there are but two 
 factors; and if we want to discover what de- 
 cides the share of each in the wealth produced 
 we must keep each factor by itself. I agree 
 with Mr. George in that, and in my attempt 
 to state the laws I have kept the three factors 
 separate. Mr. George claims that wages fall 
 as rent rises; that interest (the share of the 
 capitalist in production) also falls as rent rises, 
 and that wages and interest always rise and 
 fall together. Other writers hold that : Wages 
 fall as interest and profits rise. This seems 
 to directly antagonize Mr. George's theory; 
 but as they include land with capital, they 
 
82 PROGRESS AND PLENTY 
 
 must include rent with interest ; so their state- 
 ment really means that: Wages fall as rent 
 and interest rise. That is undoubtedly the 
 truth; for if the combined shares of landlord 
 and capitalist rise there must be a smaller 
 share left for the laborer. But where the 
 three shares are kept separate it is not true 
 that any two shares always rise and fall to- 
 gether. An increase in the share of any one 
 of the factors leaves less to be divided between 
 the other two; and a fall in the share of one 
 leaves more for the other two to divide. Mr. 
 George saw this clearly at the beginning of 
 his investigation, for he says: "The laws of 
 the distribution of wealth are obviously laws 
 of proportion, and must be so related to each 
 other that any two being given the third may 
 be inferred. For to say that one of the three 
 parts of a whole is increased or decreased, is 
 to say that one or both of the other parts is 
 reversely decreased or increased. If Tom, 
 Dick and Harry are partners in business, the 
 agreement which fixes the share of one in the 
 profits must at the same time fix either the 
 separate or the joint shares of the other two. 
 To fix Tom's share at forty per cent is to 
 leave but sixty per cent to be divided between 
 Dick and Harry. To fix Dick's share at 
 forty per cent and Harry's share at thirty- 
 five per cent is to fix Tom's share at twenty- 
 five per cent." Now, I agree with Mr. George 
 
PROGRESS AND PLENTY 33 
 
 in that, entirely, and have worked out the 
 laws of distribution in harmony with it. Mr. 
 George began his investigation in harmony 
 with it, and found that rent increased with the 
 advance of civilization; and that the increase 
 in rent left less to be divided between laborer 
 and capitalist. He found that as population 
 increased, and improved methods of produc- 
 tion and machinery enabled people to use more 
 land, competition for its use raised its price, 
 and its rent. He found that under such con- 
 ditions there would be more wealth produced, 
 but that most of the increase would go to the 
 landlord. 
 
 Then he tried to discover how the capitalist 
 and laborer divided what was left. He saw 
 that capital assisted labor to produce more 
 wealth and that the more they produced the 
 more they would have to divide. Now, while 
 that is all quite true, it is not the problem he 
 was trying to solve. He found under what 
 conditions the landlord received a large or a 
 small share of what was produced. He then 
 should have tried to find under what condi- 
 tions the laborer received a large, and under 
 what conditions he received a small share of 
 what the landlord left. This Mr. George 
 never did. He did not stick to the rule he 
 laid down in his illustration of the three part- 
 ners, Tom, Dick and Harry. This mistake 
 prevented him from seeing the importance of 
 
34 PROGRESS AND PLENTY 
 
 preventing capitalists from getting too large 
 a share, and caused him to concentrate all his 
 energy against landlordism. His object in 
 trying to discover the laws of distribution was 
 to find why wages did not rise with the pro- 
 ductive power of labor. There are two rea- 
 sons, and George only discovered one. 
 
 Wages can only depend upon what the land- 
 lord leaves, if the laborer gets all that the 
 landlord leaves; but he has to divide with the 
 capitalist. What the landlord leaves might 
 make very high wages if the laborer got it 
 all, and yet under certain conditions the capi- 
 talist may get so much that wages may be very 
 low. We will see as we get on that Mr. 
 George's laws of distribution are not complete, 
 but they appear to harmonize. His law of 
 wages is product minus rent; his law of in- 
 terest is product minus rent; they are both 
 the same thing, the undivided shares of capital 
 and labor. If the laborer received all that 
 the landlord left, the rise in rent would explain 
 why wages remain low. But wages are only 
 a part of what the landlord leaves, and until 
 we know under what conditions the capitalist's 
 share is large or small we do not know the 
 law of wages. Returning to Mr. George's 
 illustration: finding that Dick receives 40% 
 does not explain why Tom's share is only 25%, 
 but when we learn that Dick receives 40% 
 and also that Harry receives 35% then we 
 
PROGRESS AND PLENTY 35 
 
 can understand why Tom's share is only 25%. 
 
 In trying to discover the law of wages, Mr. 
 George should have tried to discover under 
 what conditions the capitalists would receive 
 a large share, and not under what conditions 
 they would have more or less to divide, for 
 that is a problem of production, and not of 
 distribution. 
 
 He found that when land was scarce the 
 landlord gets a large share, and we all know 
 that when capital is scarce the capitalist can 
 get a large share. Mr. George saw that the 
 laws of distribution should correlate and mutu- 
 ally bound each other; but he did not see that 
 only one law was required. 
 
 All Political Economists agree that supply 
 and demand regulate prices, not only of goods 
 but of land and labor as well. The law of 
 supply and demand, or competition, explains 
 the conditions under which land, labor, or 
 wealth of any kind brings a high or a low 
 price. 
 
 Business men know that when several peo- 
 ple offer an article for sale that very few 
 people want, the price will be low. They 
 know that if there are many good salesmen 
 out of employment, they can hire one at a low 
 salary, and they know that they will have to 
 pay more for a desirable lot, or business site 
 that several people want, than for one where 
 several sites are unoccupied and offered for 
 
86 PROGRESS AND PLENTY 
 
 sale. Why Political Economists should puz- 
 zle their brains looking for three laws of dis- 
 tribution when only one is required, and they 
 all know what that one is, is more than I can 
 tell. Mr. George came very near seeing that 
 only one law was needed. He says: "In no 
 politico-economic treatise that I know of are 
 these laws of distribution brought together so 
 that the reader can take them in at a glance 
 and recognize their relation to each other." 
 Again he says: "Let us then seek the true 
 laws of the distribution of the produce of labor 
 into wages, rent and interest. The proof that 
 we have found them will be in their correla- 
 tion that they meet and relate and mutually 
 bound each other." Competition explains 
 how wages will be high when plenty of land 
 is offered for use and capitalists are want- 
 ing to hire more men than offer their ser- 
 vices; and that with these conditions reversed 
 wages will be low. It explains that rent will 
 be high when labor and capital require more 
 land than is offered; and low when more land 
 is available than required. It also explains 
 how the capitalist gets the largest share, when 
 landlords and laborers require more capital 
 than is offered for use, and the smallest share 
 when more capital is offered for use than re- 
 quired. Here is a perfectly harmonious ex- 
 planation of hw wealth is iividei that I 4* 
 think any *ne can dispute. Although 
 
PROGRESS AND PLENTY 37 
 
 economic writers have not stated it just that 
 way, I think that most of them really appre- 
 hend the law. Mr. George accepted Ricardo's 
 law of rent, and saw that what labor and cap- 
 ital got to divide between them was only what 
 they could earn at the margin of production; 
 that all above this went to the landowner; but 
 he never got any farther. His method of 
 finding the law of wages was to leave capital 
 out of consideration, and consider only the 
 effect of rent upon wages. Now, how could 
 he expect to find the law of wages in that way? 
 How could he expect to divide an apple be- 
 tween Tom, Dick and Harry unless he gave 
 them each a share? But that is what he tries 
 to do. 
 
 His law of wages is: "Wages depend upon 
 the margin of cultivation, falling as it falls 
 and rising as it rises." I deny that wages 
 depend upon the margin of cultivation except 
 where the laborer either works without capital 
 or gets the use of capital free; and even then 
 wages are generally much higher than at the 
 margin of cultivation. Wages at the margin 
 of cultivation are the lowest point that under 
 the most adverse circumstances laborers can 
 ever be forced to accept. Wages depend upon 
 competition. Competition can never force 
 them below the margin of production; and 
 it seldom forces them that low. 
 
 The law *f wages must ntt nly explain the 
 
38 PROGRESS AND PLENTY 
 
 lowest possible wages but also the highest, and 
 all wages. To prove that Mr. George's law of 
 wages does not always explain high wages, let 
 us take an illustration: Two men, A and B, 
 went in search of gold, a long way from 
 civilization. A found a piece of land that 
 would pay $20 per day, and took possession. 
 B could only produce $5 a day on the best 
 land he could find. Now, according to Mr. 
 George's theory, B would work for A for $5 
 per day. I think he would be very foolish if 
 he did. When A would come to him and 
 offer him $5 per day he would probably tell 
 him that he could do that well working on 
 his own account, which he much preferred, 
 that A could well afford to pay $10 or $15 
 per day and that he would not work for him 
 for less, and the chances are that he would 
 get his price. 
 
 Now, if there were several men with valua- 
 ble claims, wanting B's services, he might get 
 close to $20 per day; and on the other hand, 
 if there were several men working on $5 
 claims some of them might hire for little more 
 than $5 per day. That is the way competi- 
 tion always works; but in some places there 
 is no land to be had free, and still when work- 
 men are scarce wages are high. Unemployed 
 laborers must find employment at some wage. 
 They are often forced by necessity to com- 
 pete with one another for work, sometimes 
 
PROGRESS AND PLENTY 39 
 
 even to try to take work from other workmen 
 by offering to work for less wages. 
 
 When there is much capital idle, the rate of 
 interest is forced down, just as wages are when 
 workmen are idle. 
 
 I hope I have made it plain that the division 
 of wealth between landlord, laborer and capi- 
 talist depends upon the relative scarcity of 
 the three factors in production, land, labor and 
 capital. Laborers cannot refuse to accept the 
 offer of low wages when all the best jobs are 
 taken and they have nothing to fall back on; 
 but when they have free land to fall back on, 
 or when there are more jobs offered than 
 there are laborers to accept, then only the best 
 jobs are taken and wages rise. Landlords 
 cannot put up the price of land unless there 
 is a demand for more land than is offered for 
 sale, nor can capitalists make large profits 
 when opportunities for investment are scarce, 
 any more than laborers can raise wages when 
 there is an over supply of laborers. I think 
 I have made it plain that competition is the law 
 of distribution. It explains under what con- 
 ditions the price of either land, labor, or cap- 
 ital, will be high or low. In other words, it 
 explains under what conditions each factor 
 gets the large, intermediate, or small share of 
 the product. If Mr. George had stuck to the 
 idea that the laws of distribution are laws of 
 proportion as he explained in his illustration 
 
40 PROGRESS AND PLENTY 
 
 of Tom, Dick, and Harry, which I quoted, he 
 must have discovered the law, but in studying 
 the relation between laborer and capitalist, he 
 took a different point of view. He refers to 
 the illustration in these words: "This natural 
 relation between interest and wages this 
 equilibrium at which both will represent equal 
 returns for equal exertions may be stated in 
 a form which suggests a relation of opposition; 
 but this opposition is only apparent. In a 
 partnership between Dick and Harry, the 
 statement that Dick receives a certain propor- 
 tion of the profits implies that the portion of 
 Harry is less or greater as Dick's is greater or 
 less; but where, as in this case, each gets only 
 what he adds to the common fund, the increase 
 of the portion of the one does not decrease 
 what the other receives." I reply to that ar- 
 gument: A relation of opposition is the way 
 it must be stated if we are to discover under 
 what conditions wages will be high or low. It 
 is the way Mr. George said it should be stated 
 in his illustration of Tom, Dick, and Harry. 
 He says: "To fix Tom's share at 40% is to 
 leave but 60% to be divided between Dick and 
 Harry. To fix Dick's share at 40% and 
 Harry's share at 35%, is to fix Tom's share 
 at 25%." According to that statement, each 
 one is opposed to the other two, and that is 
 evidently the truth, for it is treating all the 
 shares in the sense of proportion; while to say 
 
PROGRESS AND PLENTY 41 
 
 that each gets what he adds to a common fund 
 is a statement which he never proved, and it 
 is a statement very easily disproved. 
 
 In the first place, if labor and capital each 
 get what they add to the common fund, it can 
 only be at the margin of production, where 
 they get all they produce, for on land that 
 yields rent the landlord gets a share without 
 adding anything to the common fund. Con- 
 sequently upon land yielding rent they do not 
 get what they each produce to divide. So if 
 the statement is true in any case it can only 
 be true where labor works with the assistance 
 of capital upon free land. I will now use an 
 illustration to prove that even upon free land 
 capital cannot claim all it adds to the product. 
 
 A laborer is working on free land with prim- 
 itive tools. A capitalist comes along and says : 
 I am sorry to see you working so hard and pro- 
 ducing so little. I will furnish you with up- 
 to-date machinery and you can then produce 
 a great deal more wealth, and I am willing to 
 take for my share just what I enable you to 
 make above what you are now making without 
 my help. Would any laborer be so foolish as 
 to accept such a proposal? I think not. The 
 laborer would reply: That is not a fair bar- 
 gain. Your capital will earn nothing unless I 
 use it, and still you want all it adds to the 
 product of my labor. You offer me no induce- 
 ment to use your capital, and I will not accept 
 
42 PROGRESS AND PLENTY 
 
 it on those terms. I am willing to use your 
 capital on conditions that will benefit us both, 
 but not for your sole benefit. I will use your 
 capital on condition that I keep as much as 
 I could make without its use, and one-half 
 of what your capital adds to the product. In 
 that way we will both be gainers. Without 
 competition that is probably the agreement 
 they would arrive at ; but with several laborers 
 competing for a small amount of capital, the 
 laborers would offer considerably more for its 
 use. Of course competition works both ways, 
 and if several capitalists were offering to sup- 
 ply the laborers with more capital than they 
 needed, the capitalists would compete for la- 
 bor and the laborers would get the capital 
 they required for a very small part of what 
 they produced. Does not this prove that in- 
 terest does not depend upon what capital adds 
 to the product of labor, but upon competition 
 upon the supply of and demand for capital? 
 
 This is not a new theory. It was held by 
 some economic writers before Progress and 
 Poverty was written; and is still held by some 
 writers. 
 
 Mr. George gives his reason for not accept- 
 ing it. He says: "The effect of all the cir- 
 cumstances which give rise to the differences 
 between wages in different occupations may be 
 included as supply and demand, and it is per- 
 fectly correct to say that the wages in different 
 
PROGRESS AND PLENTY 43 
 
 occupations will vary relatively according to 
 the differences in the supply and demand of 
 labor meaning by demand the call which the 
 community as a whole makes for services of a 
 particular kind; and by supply the relative 
 amount of labor which, under the existing con- 
 ditions, can be determined to the performance 
 of those particular services. But though this is 
 true as to the relative differences of wages, 
 when it is said, as is often said, that the general 
 rate of wages is determined by supply and de-. 
 mand, the words are meaningless. For supply 
 and demand are but relative terms. The sup- 
 ply of labor can only mean labor offered in 
 exchange for labor or the produce of labor, and 
 the demand for labor can only mean labor or 
 the produce of labor offered in exchange for 
 labor. Supply is thus demand and demand 
 supply, and in the whole community one must 
 be co-extensive with the other." 
 
 Mr. George seems to have overlooked the 
 fact that wanting an article does not create 
 a demand for it, unless the person wanting it 
 has something that other people want to offer 
 in exchange. If supply is demand and de- 
 mand supply, there could never be unemployed 
 men, with wants unsupplied looking for work 
 and failing to find it. But such is not the case. 
 There are times when thousands of destitute 
 men are without employment and cannot find 
 an opportunity either to produce the things 
 
44 PROGRESS AND PLENTY 
 
 they need, or other goods to exchange for 
 them. At such times there is an over supply of 
 goods, not because people do not want them, 
 but because the wages of the great majority 
 have been so low that they could not buy them, 
 and there were more produced than those with 
 means to buy could consume. At such times 
 there are so many seeking employment and 
 competing for the few jobs offered, that wages 
 fall very low. The demand for laborers at 
 such times does not equal the supply. There 
 should be a demand for labor as long as there 
 are laborers with wants unsupplied, and with 
 high wages there will be. Supply and demand 
 are, as Mr. George says, relative terms; but 
 not in the narrow sense he stated. Competi- 
 tion is not only amongst laborers for employ- 
 ment, but supply and demand affects the 
 whole three factors according to their relative 
 scarcity, as I pointed out before. Conse- 
 quently the share of each factor depends upon 
 the relative scarcity of land, labor, and capi- 
 tal. Under certain conditions landlords and 
 capitalists compete for laborers, that is when 
 laborers are scarce. When conditions change 
 and some laborers cannot find employment, 
 then, instead of capitalists competing for la- 
 borers, laborers compete for work, so supply 
 and demand does not only determine wages 
 between different occupations, but all wages. 
 Competition does not divide the shares of 
 
PROGRESS AND PLENTY 45 
 
 the different factors in production, according 
 to what each factor contributes; but gives the 
 small share to the factor that is compelled by 
 necessity to accept it. If the three factors can- 
 not agree on terms there is a strike. There 
 is never a strike between landlord and cap- 
 italist because land and capital can be ex- 
 changed and a revenue derived from either 
 without labor on the part of the owner, as long 
 as enough laborers can be kept dependent 
 upon them. We hear a good deal about gov- 
 ernment of the people by the people and for 
 the people; but such a government has never 
 existed. It may be almost in sight, but so 
 far it has always been the rich who governed, 
 and their main object has been to keep a suffi- 
 cient number of people dependent to enable 
 themselves to live in luxury without doing any 
 physical labor. That being the case, there is 
 no occasion for dispute between landlord and 
 capitalist. If a capitalist finds that it pays 
 better to be a landlord he can buy land, and if 
 a landlord wants to become a capitalist he can 
 do so either by selling land or saving rent. 
 They are generally combined in the same per- 
 son and belong to the wealthy class. 
 
 On the other hand, there are always large 
 numbers of laborers entirely dependent upon 
 the owners of land and capital for subsistence. 
 They can only refuse to accept low wages until 
 their savings are consumed, and in a strike 
 
46 PROGRESS AND PLENTY 
 
 must always suffer more than their employ- 
 ers. Strikes and lockouts can never perma- 
 nently settle the war between capitalists and 
 laborers over the question of wages; and a 
 better plan must be adopted before there will 
 be plenty of work and high wages for all. 
 
 At the time Progress and Poverty was writ- 
 ten there was probably no work on political 
 economy where the laws of distribution were 
 brought together so that their relation could 
 be recognized at a glance. But a book writ- 
 ten since then, "Introduction to Economics," 
 by Henry R. Seager, does this. He says: 
 "The general law of competitive distribution 
 for a society allowed to attain the state of nor- 
 mal equilibrium is, then, that each factor in 
 production has assigned to it a share in dis- 
 tribution corresponding to what it itself pro- 
 duces. If rent, wages and interest be defined 
 as the prices paid respectively for services to 
 production of pieces of land, workmen, and 
 capital goods, the law may be stated to be, 
 that competition tends to put a price on the 
 services of each of the factors of production 
 corresponding to the price which attaches to 
 its particular contribution to the product." 
 
 Here he claims what I have been trying to 
 prove: that supply and demand or competi- 
 tion assigns to each factor its share, and also 
 claims, what I have been trying to disprove, 
 that each gets what it adds to the product. 
 
PEOGRESS AND PLENTY 47 
 
 Henry George agrees with him as to labor 
 and capital dividing their joint share accord- 
 ing to what each produces at the margin of 
 production, but does not admit that supply 
 and demand decides what each receives. 
 
 George would also disagree with him as to 
 land getting what it adds to the product, and 
 on the merits or demerits of our land system, 
 George declaring it to be iniquitous, and 
 Seager weakly defending it. 
 
 Perhaps I can make it clear why we hold 
 such different views. I can at least explain my 
 point of view by using an illustration: A few 
 men settle on a small island and divide it 
 equally amongst themselves. To make the 
 case as simple as possible, we will suppose 
 that there are only two qualities of land, and 
 that the best will yield double what the poor 
 land will yield to labor. 
 
 We will also suppose that each settler has 
 double the amount of land that he can use him- 
 self. We will suppose also that the men on 
 the poor quality of land can make two dollars 
 per day by their labor; and those on the good 
 land can earn four. 
 
 Now, according to political economists gen- 
 erally, the men on the poor land the men at 
 the margin of cultivation would work for the 
 men on the good land for two dollars per day. 
 I claim that they will not work for the others 
 without some inducement, and in this case 
 
48 PROGRESS AND PLENTY 
 
 there is none. I claim that the men on the 
 poor land would prefer to employ themselves 
 to working for others for the same wages that 
 they could earn for themselves; and that if 
 they would form a union and set a price for 
 labor at three dollars per day, or even higher, 
 they would probably get it; because the men 
 on the good land could afford to pay it, and 
 the men on the poor land having an independ- 
 ent income could never be starved into accept- 
 ing any terms whatever. 
 
 Now if the land had been justly divided at 
 the start, they could all have made four dollars 
 a day by their labor supposing, of course 
 that they were all equally capable. The men 
 on the good land have, by securing title to all 
 the good land, forced wages down from four 
 to two dollars per day, for that is all that the 
 men on the poor land can make when working 
 for themselves ; and the men on the good land 
 have done nothing to entitle them to more than 
 an equal share. 
 
 Mr. Seager says: "Each factor in produc- 
 tion has assigned to it a share in distribution 
 corresponding to what it itself produces." He 
 does not complain of the injustice of land mo- 
 nopoly. The raw material for all wealth is 
 produced on land, but it is not the land, but 
 the owner of land who gets the rent. What 
 does he do as owner to entitle him to a share 
 of the wealth produced by other laborers? He 
 
PROGRESS AND PLENTY 49 
 
 is entitled to the use of as much land as other 
 people, but no more. He contributes nothing 
 whatever to production, but he does prevent 
 wealth from being produced to some extent by 
 appropriating more land than he needs. If we 
 can produce more wealth without the landlord 
 than with him, and if he has neither made the 
 land nor done anything for it, except keep 
 others from using it, why continue him in 
 power? If the men on the good land on the 
 island held it for ten years, and at the end of 
 that time were compelled to give up their sur- 
 plus land should they be paid for it, or should 
 they be required to pay the men on the poor 
 land for keeping them from using good land 
 so long? Did not the men on the good land 
 confiscate property rightfully belonging to 
 others when they claimed more land than they 
 needed? Henry George's plan for restoring 
 equal rights to all in the use of land, is to re- 
 lieve all from taxation and take rent for pub- 
 lic revenues. 
 
 I will discuss that question farther on when 
 considering remedies, but we must get a clear 
 understanding of the natural laws governing 
 distribution, before we deal with remedies. I 
 think I can safely say that our industrial sys- 
 tem is faulty, that wealth is not justly divided 
 between the three factors, and that labor does 
 not get its just share. I think that these facts 
 are established, first that competition is the 
 
50 PROGRESS AND PLENTY 
 
 law of distribution, and that competition gives 
 the largest share to the scarcest factor and the 
 smallest share to the most plentiful one. Sec- 
 ond. That as competition under favorable 
 conditions raises wages, it is not necessary to 
 abolish competition in order to have high 
 wages, but that conditions must be changed 
 and our system of industry adjusted in such 
 a way that competition will raise wages in- 
 stead of lowering them. Third, our industrial 
 system gives a share to one factor, the land- 
 lord, who is not entitled to anything and also 
 gives special privileges and consequently too 
 large a share, to the capitalist besides. 
 
 I believe that the laborer is entitled to more 
 than he can earn at the margin of cultivation 
 without the use of capital, even if land was 
 not monopolized. I believe that competition 
 under normal conditions will give him more. 
 It is the province of Political Economy to dis- 
 cover what are normal or natural conditions 
 and show how to change our institutions and 
 customs that are unjust. Mr. Seager agrees 
 with me in that, he says: "In actual industrial 
 society, as has already been pointed out, eco- 
 nomic relations fall far short of this competi- 
 tive ideal. Monopoly influences intervene to 
 secure monopoly profits for some entrepre- 
 neurs at the expense of the shares assigned to 
 wages and interest. Changes occur to throw 
 the whole mechanism of production out of ad- 
 
PROGRESS AND PLENTY 51 
 
 justment and to occasion profits or losses to 
 other entrepreneurs which must in time be dis- 
 tributed among all participants. Special ob- 
 stacles prevent certain groups, especially 
 among the laboring population, from getting 
 the full benefit of the influence of competition, 
 and make their earnings less than they ought 
 economically to be. Full account must be 
 taken of these and other influences when it is 
 attempted to make practical application of 
 economic theories, as in the later chapters of 
 this book. Notwithstanding them, the law of 
 competitive distribution which has been ex- 
 plained is the norm, to which actual relations 
 tend always to adjust themselves. Its mas- 
 tery is preliminary, not only to a thorough un- 
 derstanding of prevailing conditions, but to 
 any intelligent effort towards improving those 
 conditions as they affect the mass of men." 
 The mistakes made by writers on political 
 economy as taught in the schools, are caused 
 mostly by their considering unnatural condi- 
 tions as normal. They consider the problems 
 they discuss from the point of view of the en- 
 trepreneur instead of from the point of view 
 of the independent laborer who makes a living 
 at the margin of cultivation which I consider 
 the normal condition. Mr. Seagar holds to two 
 theories that do not harmonize. He believes 
 that competition, or supply and demand, de- 
 cides what each factor in production receives. 
 
52 PROGRESS AND PLENTY 
 
 He also holds that competition gives to each 
 of the factors what it itself contributes to the 
 product. One of these theories may be cor- 
 rect, but they cannot both be, for they are an- 
 tagonistic. Let me illustrate : A man is work- 
 ing on free land without machinery. Along 
 comes a man with a machine and offers to lend 
 it to the laborer. With the machine the laborer 
 can do twice as much, and the capitalist de- 
 mands one-half. The machine will earn 
 nothing unless the laborer uses it, but the la- 
 borer can earn as much without it as he will if 
 he accepts the capitalist's offer. Why should 
 he accept? He would not accept on those 
 terms. He would probably want one-half of 
 the increase at least ; and as the machine would 
 make nothing unless it is used, the capitalist 
 would probably accept. In this case the la- 
 borer would get more than he added to the 
 product and the capitalist less, but there has 
 been no competition. Now let us see what 
 difference competition will make. If there 
 were other capitalists with idle machines some 
 of them would offer to take still less, for the 
 use of their machines. But if there were sev- 
 eral laborers working without machines and 
 seeing the man with the machine earning so 
 much more than themselves, they would all 
 want machines in order to make higher wages. 
 As there was only one machine to be had, they 
 would offer more for its use than the man using 
 
PROGRESS AND PLENTY 53 
 
 it was giving. But, as their object in wanting 
 the machine was to earn more wealth, none of 
 them would offer all that the machine would 
 add to the product. This shows that the cap- 
 italist under the most favorable circumstances 
 cannot claim the full earnings of capital, and 
 that Mr. S eager is mistaken in claiming that 
 competition gives to each share in distribution 
 what the corresponding factor adds to the 
 product. What laborers can earn at the mar- 
 gin of production without capital is the least 
 that laborers can be forced to accept under 
 the most adverse circumstances, and is not the 
 law of wages. What the use of capital adds 
 to the product is more than the capitalist can 
 claim under the most favorable circumstances, 
 and is not the law of interest. Now I think I 
 have demonstrated that competition is the law 
 of distribution, and that high wages depend 
 upon low rent accompanied by low interest, 
 and small profits for capital. Also that com- 
 petition gives the large share to the scarce fac- 
 tor, and the small share to the factor that is in 
 excess of the demand. If economic writers do 
 not know that such is the case, laborers and 
 business men do. 
 
 We can now consider what reforms are nec- 
 essary to abolish poverty and give employment 
 at high wages to all. There are plenty of la- 
 borers able and willing to produce, an abund- 
 ance for all, plenty of good land upon which 
 
54 PROGRESS AND PLENTY 
 
 to produce it, and plenty of capital to enable 
 labor to obtain the best results; or if anything' 
 is lacking, labor only needs the opportunity to 
 supply it, and it will soon be forthcoming. 
 
CHAPTER IV. 
 
 HENRY GEORGE'S REMEDY. 
 
 Mr. George saw that the power of the land- 
 owner is identical with the power of the slave 
 owner. If the land is all owned, landless men 
 are forced by necessity to accept the terms of 
 the landlord or starve. Under these condi- 
 tions, a slave owner has no more power over 
 his slaves than the landlord over his tenants. 
 Where there is free land, men are not abso-' 
 lutely dependent, and if the margin of culti- 
 vation is so high that laborers can make a com- 
 fortable living on free land, then the laborers 
 are free. The private ownership of land can 
 be defended upon the same grounds as the 
 ownership of men, and upon no other. The 
 same arguments are available in both cases 
 and are as strong for the one institution as for 
 the other. All men have a right to life. If 
 they have, they have a right to live on the earth 
 without buying the privilege from any indi- 
 vidual, for there is no other place they can 
 live. All men have a right to liberty. If so 
 they have a right to land, for they cannot be 
 free on land owned by another. Mr. George 
 
56 PROGRESS AND PLENTY 
 
 says: "There is nothing strange in the fact 
 that, in spite of the enormous increase in pro- 
 ductive power which this century has wit- 
 nessed, and which is still going on, the wages 
 in the lower and wider strata of industry 
 should everywhere tend to the wages of slav- 
 ery just enough to keep the laborer in work- 
 ing condition. For the ownership of the land, 
 on which and from which a man must live, is 
 virtually the ownership of the man himself, 
 and in acknowledging the right of some indi- 
 viduals to the exclusive use and enjoyment of 
 the earth, we condemn other individuals to 
 slavery as completely as though we had for- 
 mally made them chattels." 
 
 Mr. George proposed a very effectual way 
 to restore men to liberty, which is becoming 
 popular the world over, and has been partly 
 adopted in several places. He proposed tak- 
 ing the unimproved value of the land (eco- 
 nomic rent) for public revenues instead of 
 taxes, which he proposed to abolish. Of 
 course, if the ground rent was not enough for 
 public needs, the deficiency must be raised in 
 some other way; but Mr. George and most 
 of his followers think it would be sufficient. 
 Public revenues are a good deal like individ- 
 ual incomes. If we have very little to spend 
 we try to get along with little, and make the 
 best of it, and if we have a great deal and have 
 intelligence we can still put it to a good use. 
 
PROGRESS AND PLENTY 57 
 
 It is the same with public incomes. If we can 
 raise a large public fund, we can find plenty 
 of good ways to use it. Any progressive com- 
 munity could, and generally does, spend more 
 than it can raise by taxation. There is no ques- 
 tion but what Mr. George's plan would give 
 us a higher margin of cultivation, by forcing 
 unused land on the market. A higher margin 
 of cultivation would give us higher wages and 
 freer men. 
 
 Other plans have been proposed to restore 
 the earth to all, but I consider Mr. George's 
 the simplest, most practical, and effectual. I 
 cannot improve upon his proposal for land 
 reform. We not only have his works, but nu- 
 merous books by his followers, and there is no 
 occasion for me to take up much space repeat- 
 ing arguments with which every one is familiar. 
 Mr. George's failure to work out the laws of 
 distribution prevented him from seeing the im- 
 portance of reforms that would make it easier 
 for laborers to obtain capital and reduce the 
 profits of capital that are at the expense of 
 high wages. 
 
 Interest is paid for the use of capital to as- 
 sist in the production of wealth. Rent is paid 
 for the use of land for the same purpose. A 
 person renting improved land really pays both 
 rent and interest, although we speak of the 
 whole payment as rent. Economic rent is only 
 what is paid on the value of the bare land; 
 
58 PROGRESS AND PLENTY 
 
 what we pay for the use of the improvements is 
 interest, but interest and rent are so nearly 
 identical in their nature that we call the whole 
 payment rent. Interest is paid for the use of 
 money. Our money system is almost as bad 
 as our land system perhaps worse and an 
 improved system of currency would do as much 
 to raise wages as an improved land system. 
 Mr. George showed how to improve our sys- 
 tem of land tenure by taking rent for public 
 uses, and the thought occurred to me several 
 years ago that if taking rent for public use 
 would solve the land problem, taking interest 
 for public use ought to solve the money prob- 
 lem. How well it will do it the following pages 
 will show. Others have seen that the money 
 question and the land question were related. 
 I will quote from "Our Monetary System," by 
 Mary E. Hobart: 
 
 In an open letter to Henry George, she 
 says: "In all your arguments in your letter 
 to the Pope against land monopoly I noticed 
 none which might not with equal force and jus- 
 tice be used against money monopoly. That 
 which is true of one is true of the other. . . . 
 Our land system and money system as today 
 organized are so interlocked, and so interde- 
 pendent upon each other, that it is difficult to 
 analyze their relations and separately establish 
 the evils which arise from each." 
 
 I found that the same principles applied ta 
 
PROGRESS AND PLENTY 59 
 
 both problems, and discovered how they could 
 be applied so as to give us a scientific system 
 of currency. I believe my solution of the 
 money problem equals Henry George's solu- 
 tion of the land question, and my principal rea- 
 son for writing this book is to bring it before 
 the public. I think one of the strongest pos- 
 sible arguments for taxing land values is that 
 the same plan with slight variation will give us 
 a scientific money system. 
 
CHAPTER V 
 
 MONEY REFORM 
 
 A year or so ago a pamphlet came to me 
 entitled: "The National Citizens' League for 
 the Promotion of a Sound Banking System. 
 The Origin of the League." I opened the 
 pamphlet and read: "The Origin of the 
 League." As a result of the panic of 1907 the 
 country became concerned for the commercial 
 safety of its future. This anxiety so pressed 
 upon Congress that the Aldrich-Vreeland 
 Currency Bill of 1908 was passed. This bill 
 was recognized purely as a temporary meas- 
 ure, and the National Monetary Commission 
 was created to investigate the problem of 
 banking reform. At the meeting of the Na- 
 tional Board of Trade held in Washington 
 on January 25, 26, and 27, 1910, the follow- 
 ing resolutions were unanimously adopted: 
 "Whereas, we assume that a plan for the 
 revision of our currency system will be for- 
 mulated after the National Monetary Com- 
 mission has made its final report ; and Where- 
 as, a revision of our currency system upon 
 a permanently sound and scientific basis is 
 of vital importance to all interests and should 
 be accomplished as soon as practicable." Re- 
 
PROGRESS AND PLENTY 61 
 
 solved, "That the National Board of Trade 
 favors the adoption of a currency system 
 which will be based upon the following funda- 
 mental principles and insure the following 
 results : 
 
 First Be absolutely fair to all interests and 
 to all localities. 
 
 Second Insure at all times an adequate 
 supply of properly safeguarded currency. 
 
 Third The volume of said currency to au- 
 tomatically expand and contract in response 
 to the normal demands of the manufacturing, 
 commercial, agricultural and other legitimate 
 interests of the country. 
 
 Fourth Said system to be absolutely free 
 from domination or control by political or any 
 other favored interests. 
 
 Resolved, That the National Board of 
 Trade calls upon all its constituent bodies to 
 carefully study the fundamental principles of 
 banking and currency, in order to intelligently 
 aid the enactment of such legislation as will 
 best conserve the interests of the entire coun- 
 try." 
 
 I think those resolutions the best I ever read. 
 I was delighted to see such a set of resolutions 
 come from a meeting of business men. My 
 second thought was, the bankers will never 
 allow such a system to be carried out, for they 
 have had control of the currency too long to 
 give it up, if they have money enough to pre- 
 
62 PROGRESS AND PLENTY 
 
 vent such a reform. We cannot expect them 
 to favor anything that will take the control out 
 of their hands. On reading farther, I found 
 that the pamphlet proposed the formation of a 
 National Reserve Association composed of all 
 the banks, and that the bankers were to co-op- 
 erate, combine and retain control of the cur- 
 rency. The resolutions were a joker. The 
 bankers will oppose such a system. Their in- 
 terests and the peoples' interests are opposed. 
 They make their money by lending, and want 
 interest to be high, which depends upon money 
 being scarce, while it is to the interest of the 
 common people to have money plentiful, and 
 interest low. They (the people) want to bor- 
 row money upon terms that will leave a large 
 portion of what they produce in their own 
 hands. They want just such a money system 
 as the resolutions call for. 
 
 The National Citizens' League proposes to 
 form a National Reserve Association which is 
 to be a co-operative agency for all the banks. 
 It is to do no discounting for the general pub- 
 lic, but will discount the paper of subscribing 
 banks at a uniform rate. It is to be a bankers' 
 bank, which will treat all of the associated 
 banks alike, and will enable the banks to get 
 credits or money on better terms than now. 
 It proposes to give the bankers a fair system 
 for themselves, but to leave the people in their 
 power. It will be a great help to the bankers 
 
PROGRESS AND PLENTY 63 
 
 and may not be as bad as the present system 
 for the people. But it is nothing like the sys- 
 tem that the National Board of Trade resolu- 
 tions call for. Up to a certain point the inter- 
 ests of all the people are alike, they all want to 
 see business flourishing. Even pirates like to 
 see trade brisk; so usurers must leave the peo- 
 ple some of the profits of their industry or else 
 they will kill the goose that lays the golden egg, 
 or in other words, paralyze trade. The banks 
 are always under temptation to charge too 
 high a rate of interest if they have the power. 
 We must have a system of currency that will 
 give the control of the volume of money in cir- 
 culation to the Government, and it must have 
 a fixed principle, and rule to work by, or we 
 cannot have a scientific system. The present 
 system allows financial pirates to inflate or 
 contract the currency at pleasure, and that 
 must be stopped. Bankers naturally want as 
 large a share as possible of the profits of busi- 
 ness, and what they get lessens the profits of 
 their customers, consequently a system that 
 will please the bankers will give them large 
 profits, and will not be in the interest of the 
 rest of the people. Our present money system 
 is so bad that it does not please either the bank- 
 ers or the business community, and the Na- 
 tional Reserve Association may be better for 
 both than what we have, but it is not the best 
 possible plan for the people, by a long way. 
 
64 PROGRESS AND PLENTY 
 
 The National Citizens' League is a mis- 
 nomer. If it is not controlled by the bankers it 
 certainly is working for a plan that will give 
 the banks too much power. There should be a 
 real citizens' league formed to advocate a plan 
 that will harmonize with the Board of Trade 
 resolutions, quoted. 
 
 The proposed National Reserve Association 
 would give the banks control of the currency, 
 which is contrary to the resolutions, and would 
 not give us a scientific currency that would ex- 
 pand and contract automatically with the re- 
 quirements of commerce. 
 
 I believe that the principle of a National Re- 
 serve is sound, but that the Federal Govern- 
 ment instead of the bankers should control the 
 reserve. The officials who issue the reserve 
 must have strict rules to guide them; they must 
 only issue money when the good of the country 
 requires it, and there is an unfailing sign to 
 guide them. The unfailing sign is the rate of 
 interest. 
 
CHAPTER VI 
 
 SOME PRINCIPLES OF MONEY 
 
 I consider Alexander Del Mar the best qual- 
 ified teacher of the science of money. If he is 
 not so considered by the usurers it is because 
 he has told things that they do not want people 
 to know. He was a teacher of Political Econ- 
 omy, but became disgusted with its sophistries 
 and gave it up. He then became a mining en- 
 gineer in California. He made some discover- 
 ies there that upset the theory that the value 
 of gold depended upon the average cost of its 
 production, and he saw that a good deal of the 
 teaching of political economy in regard to 
 money was false. He then went to Europe and 
 spent several years studying the history of 
 money in both ancient and modern times, and 
 wrote several books on both the history, and 
 the science of money. I will give a few quota- 
 tations which I consider the cream of his writ- 
 ings. 
 
 The first is not very complimentary to writ- 
 ers on Political Economy as taught in the 
 schools. He says: "It should be remembered 
 in this place that it is upon these same acts and 
 
66 PROGRESS AND PLENTY 
 
 upon these acts alone that rests the whole mod- 
 ern school of Political Economy, with its con- 
 fused and sophistical arguments, its dismal con- 
 clusions, its execrable jargon, and its unmeas- 
 ured conceit and impudence. Proceeding upon 
 the obvious postulate that exchange is neces- 
 sary to social existence, and that money is nec- 
 essary to exchange, Political Economy falsely 
 argues that money is and must be a commod- 
 ity, and ignorantly and impudently assumes 
 that this commodity has been, is being, and 
 must be valued at the average cost of its cur- 
 rent production, assumptions that are repudi- 
 ated by history, and belied both by the opera- 
 tion of mines, and the everyday transactions 
 of commerce. Upon this rotten foundation 
 has been reared a tottering superstructure of 
 sophistry, which, masquerading through the 
 world in the false guise of science, has filled 
 the schools, and the legislative halls, of every 
 modern state with doctrines which bear about 
 the same relation to societary life that medieval 
 astrology did to the heavens." He says of the 
 power and importance of money: "Money is 
 perhaps the mightiest engine to which man 
 may lend an intelligent guidance. Unheard, 
 unfelt, unseen, it has the power to so distribute 
 the burdens, gratifications and opportunities of 
 life, that each individual shall enjoy that share 
 of them to which his merit or good fortune may 
 entitle him, or contrariwise, to dispense them 
 
PROGRESS AND PLENTY 67 
 
 with so partial a hand as to violate every prin- 
 ciple of justice and perpetuate a succession of 
 social slaveries to the end of time." 
 
 Del Mar saw the effects of an unjust money 
 system. George saw the iniquity of an unjust 
 land system. They are twin evils and must 
 hoth be abolished, and just systems substituted 
 before labor will secure its just reward. Again 
 Del Mar says: "Value is not a thing nor an 
 attribute of things, it is a relation, a numerical 
 relation which appears in exchange." In 
 speaking of what the value of money depends 
 on, he says: "The number of the symbols 
 (coins) may be limited but rudely, the limit 
 may even though it should not be left to 
 the chances of mining discoveries, still repeated 
 experiments prove that it is the number of the 
 symbols that definitively measures values, not 
 the quantity, quality, or merit of the materials 
 of which they may be composed. A ready 
 proof that it is the numbers and not the ma- 
 terial of money which measure values is this: 
 If the sum or integer of the symbols is altered, 
 so will be the expression of value (price) of all 
 things; whereas the material may be altered, 
 e. g., from gold to silver, or from both to un- 
 convertible paper without at all affecting the 
 expression of value provided that the com- 
 bined denominations or sum and legal func- 
 tions of the symbols remain unchanged. These 
 principles of money namely, that money is a 
 
68 PROGRESS AND PLENTY 
 
 measure and must be of necessity an institute of 
 law, that the Unit of Money is All Money 
 within a given legal jurisdiction, that the prac- 
 tical essence of money is limitation, and that 
 coins and notes alike are symbols of money; 
 are fully discussed and illustrated in my Sci- 
 ence of Money." 
 
 He says of free coinage: "The. Acts of 1666, 
 and 1679, while they reserved to the state the 
 unimportant and expensive privilege of fab- 
 ricating coins and making good their loss by 
 abrasion, robbed it of that most essential of all 
 prerogatives, the right to emit the coins and to 
 stop their emission. As the law stands, any- 
 body may hand metal into the mints and de- 
 mand coins for it. Anybody may emit these 
 coins and so swell the volume of money and 
 measure of value, anybody may deface or melt 
 these coins and so curtail the measure of value, 
 and anybody may again and again take this 
 same metal to the mints and alternately mone- 
 tise and demonetise it till the end of time and 
 without either loss, expense, or fear of punish- 
 ment. Over the measures of length, of weight, 
 of liquid volume, etc., governments exercise 
 the most jealous supervision. In each case 
 they prescribe a specific and accurate standard 
 which they lock up and carefully guard from 
 alteration. But over the measure of value 
 which is far more important than all the others 
 combined, they renounced all supervision 
 
PROGRESS AND PLENTY 69 
 
 whatever, from the moment they adopted the 
 English mint law of 1666 or the French mint 
 law of 1679 in other words, when they adopt- 
 ed what is euphemistically known as free coin- 
 age. Under this practice the unit of value 
 which in point of fact is not one coin, but all 
 the coins and notes circulating within the ter- 
 ritory of a given state is subjected to the 
 hazards of mining, the legislation of foreign 
 countries, and the operations of intriguants, 
 who may alter it whenever it suits their pur- 
 poses. Free coinage does not deserve the 
 name of a policy, it is too idiotic. It was 
 adopted at the best, with the narrow motive 
 of attracting from Spain those precious metals 
 which she had discovered and endeavored to 
 monopolize, but which even without this legis- 
 lation she never could have retained. 
 
 The tremendous mischief to France which 
 followed its enactment was indeed susceptible 
 of mitigation by means of paper notes, but 
 these paper notes were unfortunately emitted 
 with as great ignorance of the necessity of 
 limiting the measure of value as had charac- 
 terized the enactment of free coinage itself." 
 
 I will quote one more passage from "Money 
 and Civilization." I consider it the most im- 
 portant passage in Del Mar's works. 
 
 "He showed that therefore money was re- 
 lated to equity, or to the maintenance of equit- 
 able relations between capitalists and labor- 
 
70 PROGRESS AND PLENTY 
 
 ers; that like other measures the most neces- 
 sary arid essential characteristic of money was 
 scientific limitation. In other words, that to 
 measure with precision and with justice, THE 
 WHOLE SUM OF MONEY MUST BE 
 FIXED AT SOME MORE OR LESS 
 CONSTANT RATIO TO THE VOL- 
 UME OF EXCHANGES." 
 
 That is the most important fact connected 
 with the science of money; and it is because I 
 firmly believe that I can show how the whole 
 volume of currency can be fixed at a constant 
 ratio to the volume of exchanges, that I am 
 writing this book. 
 
 Several people, like those who passed the 
 National Board of Trade resolutions, have 
 seen that a system of currency was desirable 
 that would expand and contract automatically 
 with the requirements of commerce, but I have 
 never heard of a plan being presented that 
 would do it. 
 
 Rent and interest being so much alike the 
 thought occurred to me that the land question 
 and the money question might be settled in 
 much the same way. If taking rent for pub- 
 lic purposes would settle the land question a 
 scientific solution of the money problem might 
 be obtained by controlling the rate of interest. 
 
CHAPTER VII. 
 
 AN AUTOMATIC CURRENCY. 
 
 The resolutions passed by the National 
 Board of Trade call for a currency system 
 that will be absolutely fair to all interests and 
 to all localities, give at all times an adequate 
 supply of properly safeguarded currency, the 
 volume of which must automatically expand 
 and contract with the normal demands of the 
 manufacturing, commercial, and other legiti- 
 mate interests of the country. 
 
 Why by an automatic expansion and con- 
 traction of the currency? 
 
 There can only be one answer to that ques- 
 tion. The National Board of Trade must 
 have known that if a scientific currency was 
 possible it must expand and contract auto- 
 matically. When there is a legitimate demand 
 for more money it must respond to the de- 
 mand. When there is an over supply it must 
 contract. The resolutions give no hint of how 
 to establish such a currency. They must have 
 thought such a system possible as they were 
 practical men and would not ask for what 
 
72 PROGRESS AND PLENTY 
 
 could not be granted. My plan is the only one 
 that I ever heard of that would fully comply 
 with that demand, though of course there may 
 be others. There is an infallible sign to indi- 
 cate when more money is required, it also in- 
 dicates when less is required. When more 
 money is needed the rate of interest always 
 rises, and when the currency becomes inflated, 
 the rate of interest always falls. If the cur- 
 rency was always kept at the same ratio to the 
 volume of exchanges the rate of interest would 
 never vary. I do not think any business man 
 will dispute these facts. 
 
 If the government was to fix on a certain 
 rate of interest as the most desirable, and issue 
 more money whenever the rate rose above that 
 rate and contract the currency whenever it 
 fell below that rate we would have a currency 
 that would have almost a steady value, but it 
 would not be automatic. I just mention that 
 to illustrate the principle. There is a better 
 way. 
 
 Interest fluctuates with a fluctuating cur- 
 rency and it stands to reason that if we had a 
 currency that never fluctuated in value the 
 rate of interest would never change. It is a 
 poor rule that does not work both ways. It 
 would be hard to adapt the quantity of money 
 in circulation to the demand so exactly that 
 interest would never vary, but it would be very 
 easy to fix the rate of interest, and leave the 
 
PROGRESS AND PLENTY 73 
 
 amount of money in circulation free to adapt 
 itself to the rate of interest. 
 
 IT CAN BE DONE. It can be done in 
 this way. The government coins all metallic 
 money and prints all notes as it is, and can 
 easily issue it in sufficient quantities and lend 
 it to the people at a fixed rate of interest to 
 all who wish to borrow, and have acceptable 
 security to offer. It can loan it to the people 
 directly, or, if the banks would act as agents 
 and handle the reserve with less expense than 
 by the government loaning it directly, it might 
 be done in that way. The government can al- 
 ways keep a sufficient supply of printed notes 
 on hand to supply the demand. It should 
 issue no more than demanded at the fixed rate. 
 Now there is no question but what this system 
 would furnish plenty of money, the currency 
 would undoubtedly expand with the needs of 
 commerce. But how about contracting, when 
 less money was required? If the government 
 did not interfere with private loans the cur- 
 rency would also contract automatically. All 
 parties who had money to loan (except the 
 government) would compete, and interest 
 would fall whenever too much money was 
 circulating. Government reserves would not 
 be called for, but money would be borrowed at 
 lower rates of interest than the government 
 rates to repay the government loans. The 
 reserve fund would really be issued by those 
 
74 PROGRESS AND PLENTY 
 
 who borrowed it and would only be called for 
 when they could not get money on better terms 
 from others. 
 
 As to the security, it would not do to be 
 reckless. Only such security as was consid- 
 ered undoubtedly safe should be taken to be- 
 gin with. But it is to the advantage of the 
 whole country that every one should be en- 
 abled to employ himself, profitably at all 
 times, and experiments in a small way should 
 be made to find how far we could go towards 
 supplying every one with a working capital. 
 
 In New Zealand the government loans 
 money to settlers, to improve their land, and 
 to farmers to start co-operative creameries, 
 etc. In Denmark, the government so I have 
 heard will lend a small amount to laborers to 
 enable them to buy a few acres and asks no 
 security except the signatures of two responsi- 
 ble men who simply vouch for the character of 
 the borrower. If such experiments have 
 proved successful in other countries they prob- 
 ably will in this. Now is not the system I have 
 presented practical, and does it not harmonize 
 with the National Board of Trade resolutions? 
 It would be absolutely fair to all interests and 
 to all localities, for all could get money on the 
 same terms. It would provide at all times an 
 adequate supply of properly safeguarded cur- 
 rency. The security and the interest would 
 safeguard it, for no one would offer good 
 
PROGRESS AND PLENTY 75 
 
 security and pay interest on more money than 
 he needed, or borrow from the government 
 when he could get it for less interest from 
 others. It would expand and contract auto- 
 matically with the demand of trade. The sys- 
 tem would be as free as any system could be 
 from domination by political or any other 
 favored interests, because the persons in 
 charge of the currency would have fixed rules 
 to go by. 
 
 The rate of interest would be fixed by Con- 
 gress and would seldom if ever be changed. I 
 offer this plan to the National Board of Trade 
 and to all others interested in a reformed cur- 
 rency, as the system that will best conserve 
 the interests of the entire country. This sys- 
 tem would not only give us the kind of cur- 
 rency the Board of Trade asks for, but it has 
 other advantages besides. It would furnish a 
 large revenue for the government and lower 
 the rate of interest that most people have to 
 pay. It would do what no usury laws have 
 ever done prevent interest from rising above 
 a fixed rate. It would raise wages, for it 
 would make it easier for laborers to get capital 
 and employ themselves, and in that way les- 
 sen competition for work. In fact it is a com- 
 panion reform to the taxation of land values, 
 and as a source of public revenue has every 
 advantage that the taxation of land values 
 would have. I will quote a passage from 
 
76 PROGRESS AND PLENTY 
 
 Progress and Poverty that applies with as 
 much force to my proposed reform of the cur- 
 rency as to the taxation of land values. 
 
 "The laws of the universe are harmonious. 
 And if the remedy to which we have been led 
 is the true one, it must be consistent with jus- 
 tice; it must be practical of application; it 
 must accord with the tendencies of social de- 
 velopment, and must harmonize with other 
 reforms." 
 
 "All this I propose to show. I propose to 
 meet all practical objections which can be 
 raised, and to show that this simple measure is 
 not only easy of application, but that it is a 
 sufficient remedy for all the evils which, as 
 modern progress goes on, arise from the 
 greater and greater inequality in the distribu- 
 tion of wealth that it will substitute equality 
 for inequality, justice for injustice, social 
 strength for social weakness, and will open the 
 way for grander and nobler advances of 
 civilization." 
 
 There is one statement I object to in the 
 above quotation. If I considered a tax on 
 land values a sufficient remedy for all the evils 
 resulting from our unjust system of govern- 
 ment, I would not be advocating other re- 
 forms. I do think that the taxation of land 
 values, and a scientific system of currency are 
 the two most important reforms, and that 
 when we get those two we will have a better 
 
PROGRESS AND PLENTY 77 
 
 government than any nation has ever enjoyed. 
 But as we progress our ideals rise, and there 
 will still be plenty of work for reformers for 
 thousands of years, after all the reforms for 
 human betterment so far proposed, have been 
 carried out. 
 
CHAPTER VIII. 
 
 GOVERNMENT CONTROL OF THE CURRENCY. 
 
 Democratic governments are organized to 
 administer public affairs in such a way that 
 all the inhabitants of a state may enjoy as 
 much liberty as possible. It is certainly a 
 function of government to provide equitable 
 institutions and prevent injustice. A just 
 distribution of wealth depends as much upon 
 how the currency is issued as upon any one 
 thing, and the people have suffered and are 
 still suffering from a miserable money system. 
 Some people who see the bribery and corrup- 
 tion of our legislatures favor leaving the con- 
 trol of the currency in the hands of the bank- 
 ers. If Congress has been bribed in the past 
 to favor the bankers it certainly will not help 
 matters to give the control of the currency to 
 the bribers instead of the bribed. 
 
 I have just received the last issue of "Bank- 
 ing Reform," a monthly paper published by 
 "The National Citizens' League for the Pro- 
 motion of a Sound Banking System," dated 
 September 2, 1912. It criticizes the cur- 
 rency plank of the Progressive Party, in an 
 article under the following headlines: "THE 
 
PROGRESS AND PLENTY 79 
 
 ISSUE OF CURRENCY IS A FUNC- 
 TION OF BANKING, NOT OF THE 
 GOVERNMENT." 
 
 "Progressive Party's Monetary Plank Reflects a Popu- 
 lar Misconception Arising from Our Unscientific Banking 
 
 System." 
 
 I am not an admirer of Colonel Roosevelt, 
 nor am I a member of the Progressive Party, 
 but I do endorse the money plank criticized, 
 and I think I can show that the argument 
 against the Government issuing all money 
 would not apply to the system that I pro- 
 pose. I will give the whole article, in "in- 
 stallments:" 
 
 "The currency plank of the Progressive Party's plat- 
 form is an interesting pronouncement, because it was 
 intended to reflect, and apparently does reflect, the trend 
 of untutored public sentiment as to banking reform. 
 The platform says: 
 
 "We believe the present method of issuing notes 
 through private agencies is harmful and unscientific. 
 The issue of currency is fundamentally a government 
 function.' 
 
 "One inaccuracy here is the implication that the pres- 
 ent method of issuing bank notes is 'harmful and un- 
 scientific' because it is done 'through private agencies,' 
 that is, the national banks, whereas the harm and lack 
 of science are due, not to the fact that the issue is 
 through private agencies, but to the government's in- 
 terference with the note-issuing functions of these 
 private agencies. This interference has been carried 
 beyond the point of supervision or regulation, exercised 
 in the interest of safety, stability and justice to all, to 
 the point of control or restriction of note issues. 
 
 "Another inaccuracy is the statement that 'the issue 
 of currency is fundamentally a government function,' 
 whereas the issue of currency is not fundamentally or 
 exclusively a government function at all. It is a bank- 
 ing function." 
 
80 PROGRESS AND PLENTY 
 
 It is generally admitted that the value of 
 money depends upon its limitation. It is true 
 that no currency ever issued whether privately 
 or by government has ever been issued scien- 
 tifically, and no doubt some bad effects have 
 been caused by interference with banking by 
 the government. But if we are to have a cur- 
 rency fair to all interests it must be controlled 
 by the people's representatives and not by any 
 special interest, which makes a profit by lend- 
 ing money. Even in this paper of the so-called 
 Citizens' League, it states: "The need is im- 
 perative for a quasi-public institution to hold 
 the final banking reserves of the country." 
 Why quasi-public? Give the banks and 
 usurers full control and we will have a worse 
 state of affairs than they have in any country. 
 No one would think of giving such power to 
 any set of men who make their wealth by loan- 
 ing money. The government must have full 
 control of the currency. If the government 
 is liable to abuse the power necessarily en- 
 trusted to it, the remedy is to give the people 
 more control of the government. The people 
 want a system that will always give plenty of 
 money of steady value and a low rate of in- 
 terest. Such a system will not suit the bank- 
 ers and it will not do to give the power to 
 issue money to a class whose interests conflict 
 with the interests of the people. If the issue 
 of currency is a function of banking then the 
 
PROGRESS AND PLENTY 81 
 
 government must do the banking, but I do not 
 consider that point proved. 
 
 "In exercising supervision over the circulating me- 
 dium governments have usually taken account of the 
 fact that banks serve a commercial purpose and are, 
 therefore, the best instruments through which a cir- 
 culating medium can be provided. In his opinion up- 
 holding the constitutionality of the act incorporating 
 the second United States Bank, Chief Justice Marshall 
 said: 
 
 " 'The currency which it circulates by means of its 
 trade with individuals is believed to make it a more 
 fit instrument for the purposes of government than it 
 could otherwise be. * " The court has already stated 
 its conviction that without this capacity to trade with 
 the individuals the bank would be a very defective 
 instrument when considered with a single view to its 
 fitness for the purposes of government.' 
 
 "The Progressive platform's statements take no heed 
 of the rule that 'without the capacity to trade with 
 individuals the bank w r ould be a very defective instru- 
 ment.' If the government undertakes to issue cur- 
 rency, but has no capacity 'to trade with individuals,' 
 it will be a defective instrument for that purpose. The 
 capacity to trade with individuals brings banks into 
 touch with business, makes them respond to the de- 
 mands of business and therefore gives elasticity to their 
 note issues. It is the lack of capacity to trade with 
 individuals which forbids the government's getting into 
 touch with business or learning its needs, and so denies 
 elasticity to government-issued currency." 
 
 The government has the capacity to trade 
 with individuals if necessary. If the govern- 
 ment can collect taxes it can collect interest. 
 
 It is possible for the government to control 
 the volume of money in circulation without 
 lending directly to the people. It can lend 
 directly to the people without doing a general 
 hanking business, as it is only necessary for it 
 to hold the reserve and issue money when 
 
82 PROGRESS AND PLENTY 
 
 more is required, which will be when there is 
 a demand for money at the government's fixed 
 rate of interest. 
 
 But if the choice lies between the govern- 
 ment either doing the whole business of bank- 
 ing, or allowing the banks to issue money un- 
 controlled by the government, by all means 
 let us have government banking. 
 
 "Currency issued by banks, like checks and drafts, 
 is created by the transaction which gives rise to the 
 need of it. Currency issued by the government is the 
 product of an arbitrary ruling by Congress or of an 
 opinion by some official that it should be issued. 
 
 "If the government undertakes to issue currency to 
 meet the demands of business, the government must 
 exercise the other functions of banking deposit and 
 discount. It must accept deposits and make loans to 
 business men on commercial paper. Except the Social- 
 ists, those who thoughtlessly advocate government- 
 issued currency make no proposal that the government 
 engage in general banking. 
 
 "The most glaring inaccuracy in the platform pro- 
 nouncement is the implication that an efficient means 
 of issuing currency is the solution of the whole mone- 
 tary and banking problem. This view is so commonly 
 entertained as to be excusable. There has been frequent 
 elucidation in this journal of the fact that elasticity 
 of bank credit is the question of fundamental impor- 
 tance. A proper reserve system underlies this problem. 
 A currency that will expand and contract automatically 
 with the expansion and contraction of the volume of 
 business 'is only a part of the problem.' " 
 
 There is nothing in this section of the article 
 to show that the issue of currency is not a gov- 
 ernment function. Currency issued by the 
 government need not depend upon an arbi- 
 trary ruling of Congress. It can be issued as 
 I have pointed out, to supply the demand at a 
 
PROGRESS AND PLENTY 83 
 
 fixed rate of interest, or it could be issued in 
 harmony with the multiple standard, only 
 when prices were rising. According to the 
 last quotation the two most important objects 
 to be accomplished by a reformed currency, 
 are a proper reserve system, and a volume of 
 money expanding and contracting with the 
 requirements of commerce. 
 
 The plan I propose will supply both re- 
 quirements and it will not matter how much 
 or how little gold is in the treasury, it will 
 supply as much and only as much money as 
 is needed. The government can issue the re- 
 serve without exercising the other functions of 
 banking deposit and discount. If the gov- 
 ernment cannot control the volume of cur- 
 rency without going into the banking business, 
 by all means let it undertake banking; but I 
 think it is only necessary to control the reserve, 
 and meddle just as little with the banks as 
 possible. The reserve should only be called 
 on when the rate of interest reached a certain 
 point, and that point should not be high. If 
 the banks would agree to loan out the reserves 
 when needed on commission they might be 
 allowed to do so. As long as they had private 
 funds to loan at the government rate or less 
 of course they would lend them first, and 
 when they ran short of other funds they would 
 always have the government reserve to fall 
 back on. Their customers would know that 
 
84 PROGRESS AND PLENTY 
 
 they could always get a loan from the reserve 
 at the government rate, and that would pre- 
 vent the banks from asking more for private 
 loans. If the banks would handle the reserves 
 and charge the government a small commis- 
 sion it would probably be the cheapest and 
 easiest way to issue the reserves, but I do not 
 claim to be an expert in that line. If my pro- 
 posal attracts enough attention to cause dis- 
 cussion, and there is a better way, it will likely 
 be brought out. 
 
 "In his speech at Providence, Colonel Roosevelt elab- 
 orated and modified the platform pronouncement. 
 Again was a popular misapprehension reflected in his 
 remarks. He said: 
 
 " 'We must have a currency that will meet the re- 
 quirements of the whole country. It must have elas- 
 ticity. It must be absolutely beyond question in char- 
 acter, ranking with the best in the world. The issue 
 of currency should be a government function, and 
 therefore the currency issue should every dollar be as 
 good as gold, and this it can only be if issued against 
 assets so good that the general business sense of the 
 community will unhesitatingly accept them as being as 
 good as gold.' 
 
 "Here are singular contradictions and inconsistencies 
 and both singularly in accord with the foggy views of 
 the public. Perhaps they are not unnatural considering 
 the country's monetary experiences and habits. The 
 demand for elasticity is repeated, and yet there is a 
 plea for government issue which makes elasticity im- 
 possible. 
 
 "No one will deny the general truth that every dol- 
 lar of currency should be as good as gold, but we may 
 question the soundness of the implication that unless 
 the government stamps every note issued with its 
 mark, the business sense of the community will reject 
 it as having a value less than gold." 
 
PROGRESS AND PLENTY 85 
 
 There are neither contradictions nor incon- 
 sistencies in the quotation from Mr. Roose- 
 velt's speech. The government can issue a 
 currency that will not only be as good as gold 
 but a great deal better. All students of the 
 money question admit that gold fluctuates in 
 value and that a money system based on gold 
 must fluctuate in value with the fluctuations 
 in the value of gold. Under the free coinage 
 system money does not measure the value of 
 gold, but the quantity, and the value of all 
 other commodities as compared with a certain 
 quantity of gold, which fluctuates in value ac- 
 cording to supply and demand, like every 
 other article of commerce. It is claimed by 
 the advocates of a gold standard that the value 
 of gold does not change very much because 
 the supply of gold in the world does not 
 change very fast. While that is true, it is only 
 one half of the truth. The demand may in- 
 crease or decrease suddenly and that will af- 
 fect the value of gold just as much as a change 
 in the supply. Every issue of silver or paper 
 money in the world affects the value of gold. 
 "The fluctuations of money escape our notice. 
 Our whole education leads us to look at the 
 dollar as absolutely invariable. It is like the 
 earth. We do not see it move. The sun and 
 stars appear to move around the world, and 
 commodities appear to move while gold stands 
 still; whereas in both cases the actual fact is 
 
86 PROGRESS AND PLENTY 
 
 the reverse of appearances." (Prof. S. New- 
 comb). 
 
 What makes the value of gold appear to 
 remain steady is making the dollar a measure 
 of quantity for gold. If gold was demonitized 
 and every coin replaced by a paper note of the 
 same denomination, prices would not change, 
 and if at the same time the United States 
 made the current rate of interest permanent 
 by supplying the demand for money at that 
 rate, the average price of commodities would 
 remain steady. The fluctuations in the value 
 of gold would then be measured by money the 
 same as changes in the value of other goods. 
 When that is done every dollar in circulation 
 will be much better than gold, for it will have 
 a steady purchasing power and measure the 
 value of all commodities, including gold, with 
 precision, which is something that gold money 
 has never done. 
 
 "This seems to be another reflection of a popular no- 
 tion, due entirely to habits of thought produced by an 
 unscientific and defective monetary system. We have 
 all been taught from the cradle that the government's 
 credit and the government's promises are of a superior 
 order. Government bonds are customarily regarded as 
 of higher quality than other evidences of debt. As a 
 matter of fact, government bonds have no peculiar 
 standing so far as their own merits are concerned. 
 They have been given a fictional value that has noth- 
 ing in particular to do with the government's power 
 to pay. They do not stand on their own merits as 
 investments. They represent a measure of monopoly. 
 Their ownership by a national bank carries with it not 
 only the privilege of note issue against them as secur- 
 
PROGRESS AND PLENTY 87 
 
 ity, but national banks are required by law to invest 
 a certain percentage of their capital in interest-bearing 
 government bonds. Over 80 per cent of the govern- 
 ment's interest-bearing debt is in the form of bonds 
 owned by national banks and deposited with the United 
 States Treasurer as security for circulation and deposits 
 of public money. 
 
 "A market for the bonds was made by law. Purchase 
 of the bonds carries with it a monopoly of note issue. In 
 this way the bonds are given a value that is fictional. 
 The proposal of the National Monetary Commission to 
 retire national bank notes uncovered the fiction, or 
 made it more emphatic. It raised the question of how 
 the privilege bond ownership carried could be de- 
 stroyed without causing great loss to the bond owners. 
 It is admitted that these bonds, if marketed on their 
 investment desirability, would sell down to about 70. 
 The withdrawal of the circulation privilege and com- 
 pulsory investment in them by national banks would 
 involve a loss of at least 30 per cent to the present 
 owners of the bonds, or it would necessitate refund- 
 ing by the government at a higher rate of interest, and 
 so cause a corresponding loss to the government 
 
 "Government bonds have no special or even senti- 
 mental value as compared with other bonds. 'As good 
 as a government bond' is an empty expression. Eng- 
 land's credit is as good as that of the United States. 
 English consols, bearing 2% per cent interest, are now 
 selling around 75. Germany's credit is as good as that 
 of the United States. German Imperial 3s are selling 
 around 79. The credit of France is of the highest class. 
 French rentes, bearing 3 per cent interest, are selling 
 around 93. But none of them carries the circulation 
 privilege and in none of them are the banks of those 
 countries compelled to invest part of their capital. 
 European bankers are better pleased to hold bankers' 
 bills arising out of commercial transactions. Such 
 security is held superior to that of British, French or 
 German bonds in desirability for banking purposes and 
 in convertibility into cash. United States bonds, mar- 
 keted on their merits, might sell as low as 60, and the 
 fact that they are government obligations does not dis- 
 proportionately increase their desirability for invest- 
 ment purposes. In short, 'the business sense of the 
 community' will not unhesitatingly accept them as be- 
 
88 PROGRESS AND PLENTY 
 
 ing as good as gold. The business sense of the com- 
 munity accepts government bonds at a valuation fixed 
 by their investment desirability. 
 
 "There are still a few countries in which currency 
 is issued by the government. Russia is one. Probably 
 San Domingo, Nicaragua, Venezuela and their neigh- 
 bors have well-oiled printing presses which turn out 
 currency as the exigencies of the dictators demand. 
 But the financial experience of stable governments has 
 taught that the business sense of the community will 
 unhesitatingly accept currency as equal in value to 
 gold only when, in addition to a reserve of gold behind 
 it, there is liquid commercial paper. Commercial paper, 
 which evidences the existence of goods in process of 
 transfer from producer to consumer, is the highest 
 type of security when there is at hand some means of 
 converting it into gold or an equivalent. Such paper is 
 secured by the necessities of the consumer and the 
 capacity of the consumer to pay. If it can be made a 
 live asset, that is, if a means for rediscounting it can 
 be provided, it is the security which the business sense 
 of the community unhesitatingly accepts as equal to 
 gold. If currency is issued against such assets under 
 a banking system scientifically devised, the currency 
 is as good as gold, and it is the only kind that is so 
 accepted. It is the only kind that is elastic, because 
 it is the only kind that in its fluctuations keeps exact 
 step with the fluctuations in the volume of business. 
 It is necessarily issued by a bank because only banks 
 Rave such assets. When government does anything but 
 devise the system, regulate its operation and exercise 
 supervision in the interest of safety and equity, it de- 
 feats the purpose which currency issues are designed 
 to serve." 
 
 Michael Flurschiem, speaking of National 
 Banks, says: "A special institution of this 
 country organized on the plan of keeping your 
 pudding and still eating it. These banks de- 
 posit in the United States Treasury, bonds 
 whose interest they pocket, and on the 
 
PROGRESS AND PLENTY 89 
 
 strength of these bonds they obtain money, 
 almost interest free, which they lend out at 
 high interest." A nice institution for the peo- 
 ple to uphold, is it not? Is it not about time 
 to do away with the National banks? I can 
 see no great obstacle in the way of abolishing 
 their special privileges- The U. S. govern- 
 ment can either issue notes and redeem the 
 bonds at par and require the National Banks 
 to redeem their notes ; or, what would be bet- 
 ter, the government could call in the National 
 bank notes and replace them with its own 
 notes. When that is done the bonds are paid 
 for, unless the National bank notes in circula- 
 tion do not equal the amount of the bonds. 
 In that case of course the government should 
 pay for the bonds that exceeded the notes. 
 National bank notes do not represent wealth 
 earned by any one. The government simply 
 gave the National banks the privilege of is- 
 suing these notes on condition that they buy 
 the bonds. When the government printed the 
 National bank notes and turned them over to 
 the National banks it really paid them for the 
 bonds although it continued to pay interest on 
 the bonds. It can either cancel the bonds and 
 redeem the notes, or it can cancel the notes 
 and redeem the bonds. There is no reason 
 why it should be required to redeem both 
 notes and bonds. It will not inflate the cur- 
 rency in the least to replace the National bank 
 
90 PROGRESS AND PLENTY 
 
 notes with government notes, and it will re- 
 imburse the National banks for all the capital 
 they invested in government bonds. 
 
 The system of currency I propose would 
 supply the country with just such a currency 
 as the country needs, and is just what the 
 National Citizens' League is working for, ex- 
 cept that the amount of money issued would 
 be controlled by the government instead of by 
 the banks. It would be secured "by the neces- 
 sities of the consumer, and the capacity of the 
 consumer to pay." It would have the best 
 possible backing a steady purchasing power. 
 It would buy gold as it would buy everything 
 else at its market value, established by the 
 higgling of the market, and be of a far steadier 
 value than any currency based upon the gold 
 standard. I do not think it likely that the 
 gold standard will be given up very soon, as 
 so many people still have the gold worshiping 
 superstition. But the plan I propose could be 
 carried out without even repealing the free 
 coinage law, unless great quantities of gold 
 were discovered. In that case, free coinage 
 would have to be stopped, or the value of 
 money would fall with the value of gold, no 
 matter what system we have. I object to the 
 statement in the last quotation that: "When 
 government does anything but devise the sys- 
 tem, regulate its operation and exercise super- 
 vision in the interest of safety and equity, it 
 
PROGRESS AND PLENTY 91 
 
 defeats the purpose which currency issues are 
 designed to serve." 
 
 The government cannot "exercise super- 
 vision in the interest of safety and equity" 
 without retaining the power to issue money 
 when it is needed and stop its issue when there 
 is enough in circulation. But if the govern- 
 ment will give us an automatic self-regulating 
 currency as I propose, it can leave the banks 
 to manage their own affairs with very little 
 interference. 
 
 Del Mar makes it quite clear that in order 
 to regulate the measuring quality of money, 
 the government must regulate the issue, and 
 issue enough to keep prices from fluctuating, 
 and this is the most important function in re- 
 gard to money that the government has to 
 exercise; as the unit of value is not a certain 
 coin but all the money circulating within the 
 jurisdiction of the government. 
 
 When we consider some of the idiotic regu- 
 lations the government has made with regard 
 to money, and especially in regard to the gold 
 reserve, it is not to be wondered at that some 
 people object to giving it the responsibility of 
 regulating the currency. Here is a quotation 
 from Banking Reform that reminds me of the 
 old lady who starved to death with thousands 
 of dollars put away for safe keeping which she 
 had not sense enough to use : 
 
 "George E. Roberts, Director of the Mint, 
 
92 PROGRESS AND PLENTY 
 
 pointed out in a recent speech that during the 
 panic of 1907 the United States had to borrow 
 gold from England, although this government 
 at the time had about six times as much gold 
 as the Bank of England had. He said in part : 
 
 ' 'No wonder the London Economist, re- 
 viewing the record in its number of March 1, 
 1908, said : "The crisis showed, much to the re- 
 lief of experienced bankers, that the raising of 
 the bank rate is as effective a device as ever it 
 was, in attracting gold." 
 
 ' 'It is a humiliating record for us and a 
 convincing proof of the inferiority of our re- 
 serve system that the Bank of England, carry- 
 ing a reserve of only $150,000,000 for all 
 the bank credits of England, was able to 
 furnish relief to the United States, which held 
 a reserve of over $900,000,000 in government 
 vaults and more than that scattered in banks. 
 That is the superiority of a consolidated bank- 
 ing reserve over a government reserve, which 
 belongs to nobody in particular, plus banking 
 reserves which the banks dare not use. 
 
 " 'In a crude and costly way, by the blind 
 operation of events, the same influences are 
 eventually set in motion with us which else- 
 where are scientifically directed. Where we 
 set out to acquire gold we can get it by the 
 sheer weight of our resources and the sacrifices 
 we are able to make. When all the banks in 
 the United States are "loaned up" tight the 
 
PROGRESS AND PLENTY 93 
 
 expansion of credits is stopped ; sometimes the 
 process seems a little abrupt, but we have 
 never had any other way, and we are like 
 the old lady who took her first railroad trip on 
 a train that was wrecked, and supposed they 
 always stopped the trains that way.' ' 
 
 It is a good thing that there was some mate- 
 rial in the world that was available to make 
 money out of or we would have had to return 
 to barter. If all the gold in the world had 
 been in the treasury and Congress kept it 
 there it would not have relieved the situation. 
 And if there had not been a single ounce of 
 gold in the treasury, but plenty of either gold 
 or paper money in circulation, there would 
 have been no crisis. The only reserve the 
 country needs is to reserve the right to stop 
 the issue of money when prices generally are 
 rising and interest falling, and to issue money 
 when prices are falling and interest rising. 
 
CHAPTER IX. 
 
 THE MULTIPLE STANDARD. 
 
 One thing I like about the discussion of the 
 money question going on at present, is that 
 there are fewer disputes in regard to the prin- 
 ciples of money than formerly. If a plan is 
 proposed to reform our money system that 
 harmonizes with these principles it will be 
 more difficult than ever before for those seek- 
 ing special privileges to make a plausible de- 
 mand for them. The bankers and economic 
 writers have admitted so much that is true in 
 regard to the principles of money that they 
 are going to find it pretty hard to make a 
 strong argument against a plan that will be 
 fair to all, if it also harmonizes with economic 
 principles. Michael Flurschiem has written 
 several books on economic subjects, and has 
 also had practical experience in banking and 
 commerce. He is widely known as a reformer 
 and advocate of the multiple standard of value 
 for money. I am going to give some quota- 
 tions from his book "The Economic and Social 
 Problem," for I think that what he has writ- 
 ten supports my plan for a scientific money 
 system. My plan is much the simplest, but 
 
PROGRESS AND PLENTY 95 
 
 they are both founded on the same principles, 
 and either plan would give us a better system 
 than any country possesses. He quotes 
 Ricardo as saying: "The whole charge for 
 paper money may be considered as seignior- 
 age. Though it has no intrinsic value, yet by 
 limiting its quantity, its value in exchange is 
 as great as an equal denomination of coin or 
 of bullion in the coin. It is not necessary that 
 paper money should be payable in specie to 
 secure its value, it is only necessary that its 
 quantity should be regulated." ...... "A 
 
 regulated paper currency is so great an im- 
 provement in commerce that I should greatly 
 regret if prejudice should induce us to return 
 to a system of less utility." 
 
 "The introduction of the precious metals for 
 the purposes of money may with truth be con- 
 sidered as one of the most important steps to- 
 wards the improvement of commerce and the 
 arts of civilized life. But it is no less true that 
 with the advancement of knowledge and 
 finance we discover that it would be another 
 improvement to banish them again from the 
 employment to which, during the less enlight- 
 ened period, they have been so advantageously 
 applied. John Ruskin says: "The use of sub- 
 stances of intrinsic value as the material of a 
 currency is a barbarism, a remnant of the con- 
 ditions of barter, which alone renders com- 
 merce possible among savages." 
 
96 PROGRESS AND PLENTY 
 
 "There is only one way to find the value of 
 money: It is to obtain the prices of goods and 
 services. In other words, the value of money 
 is its purchasing power. There is no other 
 gauge; just as money measures the value of 
 merchandise, so merchandise measures the 
 value of money." 
 
 "The relation between the quantity of 
 money offered for goods and the quantity of 
 goods supplied for money in other words, the 
 law of supply and demand determines not 
 only the price of goods, but also, at the same 
 time, the price or the value of money." 
 
 "Can we blame the gold fanatics if they stick 
 to their gold standard as long as experience 
 justifies them in the belief that gold, with all 
 its fluctuations of value, is after all not subject 
 to such excesses in this direction as most of the 
 paper currencies on record? But they leave 
 out of sight the fact that not a single case is 
 known in modern history where an inconvert- 
 ible paper money was issued under normal 
 conditions, for the purpose of providing a 
 better money than metal coins. Invariably 
 such money was issued in times of wars or 
 revolutions, or at least as the result of acute 
 financial distress. Under such conditions it 
 could hardly be expected that the issue would 
 conform to rules adapted to maintain a fixed 
 standard of value for the paper, which in no 
 way proves that such rules might not be 
 
PROGRESS AND PLENTY 97 
 
 devised. On the contrary, a closer investiga- 
 tion will show us the feasibility. A perfect 
 standard of value for money is reached when 
 the average price of merchandise does not 
 vary, and this can only be obtained where the 
 quantity of the money supply in the market 
 adapts itself to the demands of the market; 
 where more money appears when prices tend 
 to go down, and where the surplus disappears 
 when the tendency is in an upward direction. 
 This is impossible in the case of metal money, 
 whose supply depends on the good will of 
 those who control the bullion market; but it 
 is within the reach of possibility in the case of 
 paper money, which can be supplied to any 
 amount at the shortest notice, whose issue can 
 be adapted to the market's exigencies, more 
 money being issued when prices fall, and 
 money being retired when prices rise. Thus, 
 while our present law fixes the price of gold, 
 the new task is to fix the average price of 
 goods through a regulation of the money 
 circulation." 
 
 I think this plan practicable, but that to 
 supply the demand at a fixed rate of interest 
 would bring about the same result automat- 
 ically and save the work of a corps of statisti- 
 cians. Flurschiem would try to keep prices 
 from fluctuating by the government keeping 
 "A small corps of statisticians who would re- 
 ceive and tabulate the current market prices 
 
PROGRESS AND PLENTY 
 
 for each day. When they found that prices 
 were f jailing, they would lower the rate of in- 
 terest, more money would be borrowed and 
 prices would rise. On the other hand if they 
 found that prices were rising, they would raise 
 the rate of interest, less money would be bor- 
 rowed, the currency would soon contract and 
 prices fall." 
 
 I think all who have made a study of the 
 money question will agree that the theory of 
 the above plan is sound. I find no fault with 
 the principles of Mr. Flurschiem's plan, but I 
 think there is a better way of carrying them 
 out. If raising the rate of interest causes less 
 money to be borrowed and prices to fall, and 
 if lowering the rate of interest causes more 
 money to be borrowed and prices to rise, we 
 can prevent prices from either rising or falling 
 by fixing on a permanent rate of interest and 
 supplying the demand at that rate as I have 
 pointed out. My plan seems to me to be the 
 only really scientific plan that has ever been 
 proposed. If no more money was ever issued 
 than enough to supply the needs of commerce 
 at present prices, interest would never fall, 
 nor the average price of goods rise. Interest 
 only rises when more money is needed, and is 
 not forthcoming, and only falls when less 
 money is required to maintain the average 
 price of all things unchanged. If that is the 
 case, and if the government supplied the de- 
 
PROGRESS AND PLENTY 99 
 
 mand of solvent people for money at the cur- 
 rent rate of interest, money could never get 
 any scarcer, and the average price of goods 
 could never rise. When less money was re- 
 quired than what was in circulation there 
 would be people with money on hand which 
 they could not invest at the government rate, 
 and who would offer to take less. As long as 
 money could be borrowed for less than the 
 government rate government loans would not 
 be called for, but the cheaper money would be 
 borrowed to return the government loans. 
 With this system in operation government 
 loans would only be called for when more 
 money was really needed, and in that case it 
 would always be forthcoming in sufficient 
 quantities. Instead of watching prices and 
 raising and lowering interest, as prices fell or 
 rose, I would simply supply the demand at a 
 fixed rate of interest, knowing that if that was 
 done prices would remain steady without look- 
 ing after. 
 
CHAPTER X. 
 
 DIRECT LEGISLATION. 
 
 Of all proposed reforms, the most important 
 and the most popular is the demand for direct 
 legislation, or the Initiative, Referendum and 
 Recall. These three measures will enable the 
 people to propose any law they want enacted, 
 and have it referred to a vote of the people. 
 The people can initiate good laws and repeal 
 had laws and recall any public official who is 
 false to his trust. In order that the people 
 may become self-governing it is necessary that 
 they have the power to propose any law they 
 wish. It is also necessary that if the legisla- 
 ture refuses to pass a law that the people can 
 have a chance to pass on it themselves, that is : 
 have the law referred to a direct vote of the 
 people. In that way they can not only get the 
 reforms they want, but repeal laws which they 
 do not want. 
 
 The Initiative gives the citizens the right to 
 have any desired reform measure brought be- 
 fore the legislature upon presenting a petition 
 from a certain percentage of the voters. 
 
 The Referendum requires the legislature to 
 
PROGRESS AND PLl'NTY 
 
 submit any bill demanded by petition of a cer- 
 tain percentage of the people, to a direct vote. 
 It gives the people the power to veto any act 
 of the legislature, or to enact any law they 
 want in spite of the legislature, as any bill 
 submitted to a vote of the people becomes a 
 law if a majority of the votes are in its favor. 
 Fourteen states have already passed bills nom- 
 inally giving the citizens these reforms, but 
 only seven of them have passed bills that are 
 of any practical use. I will quote some pas- 
 sages from "Equity," a little magazine pub- 
 lished in the interest of Direct Legislation, to 
 show what the enemies of Direct Legislation 
 are doing to prevent the rule of the people. 
 There are "seven states which will vote this 
 fall upon the adoption of an initiative and 
 referendum system which has been submitted 
 to them. SLv will vote on amendments which 
 have wicked jokers, are incomplete, or are 
 
 worse than nothing The real fight from 
 
 now on will be to get workable amendments/' 
 
 Here are some of the jokers which the op- 
 ponents of direct legislation are getting into 
 the amendments to make them impracticable: 
 
 "Here, briefly stated, are the principal 
 * jokers' which have been found to render in- 
 effective the Initiative and Referendum in 
 those states where they have been in use. This 
 article is intended to put students and workers 
 for Direct Legislation on their guard against 
 
102 PSCimESS AND PLENTY 
 
 the plausible talk about * safeguards and re- 
 strictions.' Every 'joker' has for its object 
 the limitation of the power of the voters in 
 legislation. We must expect this sort of thing 
 from the politicians, but there is no excuse for 
 the friends of Direct Legislation falling into 
 traps set under the specious plea of 'protecting 
 the Initiative and Referendum from being 
 abused.' 
 
 " JOKER No. 1. Limiting the Initiative to 
 statute laws and prohibiting the voters from 
 proposing and adopting amendments to the 
 state constitution. 
 
 "The Constitutional Initiative is the most 
 vital part of any amendment. It is denied to 
 the people of South Dakota, Utah, Montana 
 and Maine. Also, it is omitted from the 
 amendments proposed in Washington and 
 Idaho. 
 
 " JOKER No. 2. To require an improbable 
 or impossible majority necessary to enact or 
 reject measures submitted to the voters. 
 
 "Oklahoma requires a 'majority of all votes 
 cast in said election' necessary to enact any 
 measure submitted either by the legislature or 
 by Initiative petition. No measure submitted 
 at a regular election since 1907 has been 
 adopted, although five important ones did 
 receive a large majority of the votes cast 
 'thereon.' Twelve states have for years had 
 this requirement for the adoption of constitu- 
 
PROGRESS AND PLENTY 103 
 
 tional amendments, and in those states it has 
 been found practically impossible to change 
 the constitution, no matter how necessary* 
 Every measure voted on should be decided by 
 the votes cast thereon. 
 
 "JOKER No. 3. To require large petitions, 
 or to render it difficult to secure them,, no mat- 
 ter what per cent is required. 
 
 "The proposed Wyoming amendment re- 
 quires 25% petitions, which is absurd. Mon- 
 tana has the standard percents, 5 for the Ref- 
 erendum, 8 for the Initiative. But to suspend 
 the operation of a law until the vote is taken, a 
 Referendum petition must be signed by 15% 
 of the voters in a majority of the counties. 
 For other petitions it is provided that 'two- 
 fifths of the whole number of counties of the 
 state' must furnish as signers of said petition 
 the required per cent of the legal voters in 
 such county. This joker has been incorpor- 
 ated into the Nebraskan amendment. It ap- 
 pears in the Missouri amendment so modified 
 as to require the percentages to be secured in 
 'each of two-thirds of the congressional dis- 
 tricts of the state.' The signature of any 
 voter in the state should count, regardless of 
 residence. 
 
 " JOKER No. 4. To so frame the 'emergency 
 clause* that the legislature may annul the Ref- 
 erendum whenever it chooses. 
 
 "The usual language employed is, 'The 
 
104 PROGRESS AND PLENTY 
 
 Referendum may be ordered, except as to laws 
 necessary for the immediate preservation of 
 the public peace, health or safety * * *.' The 
 courts have held that the legislature is the 
 judge as to what constitutes an emergency, 
 and so it becomes a simple matter for a ma- 
 jority, or even a two-thirds majority, to 'ex- 
 cept' any law from the possibility of a vote of 
 the people. At least a two-thirds majority of 
 all members of each house should be required 
 to declare an emergency, and such vote should 
 be on a separate section setting forth the rea- 
 sons for the emergency. 
 
 " JOKER No. 5. To put an arbitrary limit 
 upon the number of measures which may be 
 submitted to the people at any one election. 
 
 "This is an old scheme which has worked 
 great hardship to the people of several states 
 where a limit has been set to the number of 
 proposed amendments to the constitution the 
 legislature could submit at any one time. In 
 Kansas, Arkansas and Montana, only three 
 amendments can be submitted at a legislative 
 session. In Illinois only one article of the 
 constitution can be amended at an election, 
 etc. When grave emergencies arose and the 
 people demanded important changes opposed 
 by the interests, the legislature has quickly 
 filled the ballot with trivial proposals, and 
 made it impossible for the important measures 
 to be voted upon. This same scheme can be 
 
PROGRESS AND PLENTY 105 
 
 worked when the Initiative is in operation. 
 It is a great and growing danger. The excuse 
 will be made that the ballot must not be 'over- 
 loaded.' But when a large number of ques- 
 tions appear upon the ballot of any state, it is 
 an evidence that the legislature is not doing 
 its duty. The real thing that troubles the poli- 
 ticians and their masters is the presence on 
 the ballot of important measures which they 
 do not want enacted by the people. Place no 
 limits on the voters. This is their government 
 and they can take care of themselves. 
 
 " JOKER Xo. 6. Failing to provide an ade- 
 quate and efficient method of informing the 
 voters concerning the measures submitted to 
 them . 
 
 "The only safety for the political machine is 
 to keep the people in ignorance. Hence, every 
 effort by stump speakers and venal news- 
 papers to distort and misrepresent vital pro- 
 pbsals made through the Initiative or sent 
 back to the voters by the Referendum. News- 
 paper advertising is of little value, is very ex- 
 pensive, and is open to political graft. The 
 Oregon Publicity Pamphlet is the thing." 
 
 The politicians have discovered that they 
 cannot defeat bills for the Initiative and 
 Referendum directly, so they are pretending 
 to favor direct legislation, and at the same 
 time they are working all manner of under- 
 hand methods to defeat the will of the people. 
 
106 PROGRESS AND PLENTY 
 
 In several of the states the bills passed are 
 worthless. Men who have been working for 
 direct legislation for years are often forced 
 to oppose the bills presented. It costs a good 
 deal to get up a petition of 5% of the voters 
 even when a large majority are in favor of 
 the measure; but when the law requires a 
 petition of 25% of the voters to have the law 
 referred to a vote of the people, it is better 
 not to have the bill passed, as it could seldom 
 be used even when urgently needed. I can- 
 not do better than to quote part of an article 
 from Equity: 
 
 "In addition to the work of informing our 
 readers upon the progress of Direct Legisla- 
 tion and warning the workers concerning the 
 dangers from abortive Initiative and Refer- 
 endum provisions, we have been arousing the 
 friends of the movement in the states of 
 Idaho, Florida and Wyoming to the necessity 
 of defeating at the polls the fraudulent 
 amendments which are pending adoption and 
 will be voted upon in those states November 5. 
 
 "As a result of our efforts the Democratic 
 County Central Committee at Boise, Idaho, 
 adopted a strong resolution against the pro- 
 posed Idaho amendment, which has been sent 
 to all Democratic central committees through- 
 out that state. The resolution condemns the 
 requirement that a majority of 'all votes 
 cast' is necessary to enact a law under the 
 
PROGRESS AND PLENTY 107 
 
 Initiative, and that all other details are left 
 for legislative action. A movement is on foot, 
 headed by Hon. Victor O. Johnson, of Sho- 
 shone, to establish at once a Direct Legislation 
 League to fight the proposal at the polls and 
 pledge candidates for the legislature to submit 
 a workable, honest provision at the next 
 session. 
 
 "In Florida, articles from the editors of 
 Equity, stating reasons for the rejection of 
 the Florida proposition, have appeared in 
 the American Eagle, published by A. H. 
 Andrews, at Estero, Fla., and the work is 
 being prosecuted of arousing the live wires to 
 the danger of blocking I. and R. progress in 
 that state for years by the adoption of the 
 proposed amendment, which requires 25% 
 petitions. 
 
 "In Wyoming, which has the worst pend- 
 ing amendment of all, it has been difficult to 
 get action, but the State Federation of Labor 
 is responding and we hope for results from 
 that source. This proposed amendment re- 
 quires 25% petition and also has the majority 
 'of all votes cast' joker. An article covering 
 the common 'jokers' which destroy the power 
 of any amendment appears in the September 
 issue of The Federationist, the official organ 
 of the American Federation of Labor. 
 
 "The work of Equity is against bad amend- 
 ments, as well as for good amendments. 
 
108 PROGRESS AND PLENTY 
 
 "Several magazines of nation-wide circula- 
 tion, like Collier's, The Public, etc., have given 
 notice to the valuable summary of the 'Pres- 
 ent Status of the Initiative and Referendum/ 
 which appeared in the July issue of Equity, 
 and repeated in this issue, and other editors 
 have used the material furnished by this mag- 
 azine in writing valuable articles upori the 
 subject. 
 
 "In addition, work has been begun in 
 Pennsylvania and a large amount of educa- 
 tional literature is going out of the office to 
 the right sources. The Editor believes that 
 the time has come when there is a good hope 
 for the submission of an amendment by the 
 legislature and its adoption by the people of 
 the Keystone state. 
 
 "We invite your help in extending the cir- 
 culation and influence of this magazine. It 
 is a patriotic undertaking published at a con- 
 stant loss, and supplies a need which no other 
 publication does. You can make no greater 
 mistake than to suppose that the Initiative 
 and Referendum is safe, now that it is en- 
 dorsed by so many political parties and plat- 
 forms. The truth is that we were never in so 
 great danger as now. The 'progressive' poli- 
 ticians of all stripes and parties are espousing 
 this cause for the purpose of getting elected 
 to office. They have favored and will favor 
 * jokers' which render the I. and R. of na 
 
PROGRESS AND PLENTY 109 
 
 value. Now is the time to stand for the real 
 thing and not sit supinely by and wake up 
 later to the fact that a worthless I. and R. 
 amendment 'safeguarded' by politicians is 
 worse than none at all." 
 
CHAPTER XL 
 
 SOCIALIST POLITICAL ECONOMY. 
 
 When we get the Initiative, Referendum, 
 and Recall adopted in every State in good 
 practical working laws, the self-seeking, 
 grafting, politicians will lose their power to 
 prevent good laws from being passed, or bad 
 laws from being repealed. Then we will not 
 need political parties, and if they still exist it 
 will be principally for educational work. If 
 for instance the Socialist Party elected their 
 candidates to office they could not put a single 
 law on the statute books that a majority of 
 the people opposed; and without gaining a 
 single office they could have any law passed 
 that a majority of the people did want. A 
 great deal of nonsense has been written in the 
 name of Socialism in the past, and we may 
 find that some of their political economy is 
 not scientific yet; but for all that we may 
 learn as much from the Socialists as from any 
 other school of political economy. One of the 
 good reforms they advocate is Direct Legisla- 
 tion, and it is evident from the following quo- 
 tation that they understand the cause of pov- 
 
PROGRESS AND PLENTY 111 
 
 erty, and the doctrine of the survival of the 
 fittest. The following is from "The Prin- 
 ciples of Scientific Socialism" by Rev. C. H. 
 Vail: "Is there any one who does not see that 
 the poverty of the many is caused by the rob- 
 bery and waste of the few? So long as we 
 have a privileged class who shirk their duty 
 and compel others to do their work, so long 
 will there be degradation and poverty. But 
 why do laborers submit to this condition? 
 Simply because the privileged class has gained 
 a monopoly of the means of production which 
 is necessary to labor. The laborer being un- 
 able to employ himself is obliged to submit to 
 the conditions imposed upon him. The first 
 step in the abolition of poverty is the abolition 
 of the parasite class. Poverty will be impos- 
 sible when every man is obliged to live by his 
 own labor, instead of the labor of others. At 
 present, between the waste of labor-power in 
 mere idleness and its waste in unproductive 
 work, but a small part of the people are pro- 
 ductively employed. Were all usefully em- 
 ployed and the waste of our competitive sys- 
 tem eliminated, but a few hours' work would 
 be required to produce an abundance for all. 
 Abolish class robbery and the problem is 
 solved. 'Whereas it has been known and 
 declared,' says Ruskin, 'that the poor have no 
 right to the property of the rich, I wish it also 
 to be known and declared that the rich have 
 
112 PROGRESS AND PLENTY 
 
 no right to the property of the poor.' Give 
 to every man the full product of his lahor and 
 he will be able to live in decency and plenty. 
 
 "But it is said that the poor are poor be- 
 cause they are not fitted to be anything else; 
 that the fittest survive and that this is the in- 
 exorable law of nature. Let us look at this law 
 of the survival of the fittest. What does it 
 mean? It simply means that a plant, animal, 
 or man that is best fitted to survive under 
 certain conditions will survive. It has noth- 
 ing whatever to do with the quality of the 
 conditions. According to this law the man 
 who succeeds in a certain society is best fitted 
 to that kind of environment. Thus, under 
 certain conditions, one type of man will be 
 best fitted to survive, while under different 
 conditions, a different type will succeed. In 
 the early days, when physical strength was 
 king, the man best fitted to survive was the 
 one with physical strength and endurance. 
 Today when commercialism is king, the man 
 who succeeds does not require strength of arm 
 so much as cunning and clearness of head. A 
 John L. Sullivan is the type of man best fitted 
 to survive in ancient society; a Rockefeller in 
 modern society. But neither one of these 
 types touches the moral qualifications. Evi- 
 dently then, the fittest has nothing to do with 
 morality. The poor, then, are poor simply 
 because they are not fitted or have not the 
 
PROGRESS AND PLENTY 113 
 
 opportunity to succeed in the acquisition of 
 wealth under present conditions. It does not 
 follow that they are not worthy of a decent 
 livelihood or that they might not succeed un- 
 der different conditions. The survival of the 
 fittest, under present conditions, does not 
 secure the survival of the noblest and best, 
 but rather the reverse. Commercialism, like 
 physical combat, is a war, in which cunning 
 in one instance and brute force in the other 
 succeeds. In commerce Jesus Christ would 
 have been no match for Rockefeller; in 
 physical combat Buddha would have stood no 
 show with Sullivan. Now which is the best 
 condition of society, that which gives the low- 
 est type of humanity the pre-eminence, or the 
 highest type? If the highest type should suc- 
 ceed, ought not society to be so reconstructed 
 that the noblest and best qualities shall have 
 full play? We have no objection to the sur- 
 vival of the fittest, only we desire that society 
 shall be so organized that the real fittest shall 
 survive. We desire such a condition that the 
 law shall work for good instead of evil. 
 
 "The law as we have noted, insures the sur- 
 vival of those best adapted to the conditions 
 under which it works. If the conditions are 
 such that the unscrupulous and unjust are 
 given an advantage, then these are the ones 
 best adapted to succeed. We object to the 
 present industrial and social conditions for 
 
114 PROGRESS AND PLENTY 
 
 the reason that it makes the basest best fitted 
 to survive. We wish to establish an economic 
 and social environment under which all will 
 be 'fit' and all will 'survive.' We would so 
 organize society that none would be pushed 
 to the wall, and that while each would suc- 
 ceed in accordance with his fitness, still the 
 success of one would not mean the failure of 
 another. Socialism would reorganize society 
 on such a basis as would guarantee the sur- 
 vival of all its members. It would abolish 
 forever this hell of poverty that results from 
 special privilege." 
 
 I think very few can object to anything in 
 the above quotation, and if Socialists could 
 offer a plan for correcting the evils of our 
 social system that would be practical and that 
 would not interfere with individual rights, 
 Socialism would advance much faster than it 
 is doing. But so far different writers on 
 Socialism, although agreeing on general prin- 
 ciples, have not been able to present a prac- 
 tical plan for carrying them out. There is 
 one general plan advocated by F. M. Sprague 
 and others that certainly is practical as far as 
 it goes, and if Socialism is ever brought about, 
 it will probably be done in that way. They 
 see that Socialism requires too great a change 
 from existing institutions to be accomplished 
 at once, or even in a short time. Therefore 
 they would bring it about by degrees, meeting 
 
PROGRESS AND PLENTY 115 
 
 the problems one at a time, and crossing the 
 bridges, so to speak, as we come to them. 
 The only objection I can see to such a plan is 
 that it may never lead to the kind of Socialism 
 that some Socialists dream of; but we can 
 apply democratic principles to industry, bring 
 about a state of social justice, and fraternal 
 equality, better, and more quickly in that way 
 than in any other. And, as a Socialist lec- 
 turer said: "In that way we will get rid of the 
 rubbish." 
 
 Mr. Sprague says: "We examine the prin- 
 ciples on which the new ship is constructed, 
 and finding them to be civil liberty, fraternal 
 equality, and social justice, we are logically 
 bound to accept them without regard to the 
 particular manner in which the ship may be 
 rigged. In other words, Socialists may logi- 
 cally insist on the adoption of these principles, 
 leaving their application to future contin- 
 gencies. The eternal, political, and moral 
 verities on which our republic is founded were 
 rightly regarded by our fathers as sufficient 
 ground for the Revolution and guarantee for 
 democracy. Questions of administration, the 
 relations and reciprocal duties of citizens, 
 States, and nation, the numerous details of 
 the constitution, the particulars of legislation, 
 repeals, amendments and experiments in 
 short, the entire modus operandi involved and 
 required in the successful working of a re- 
 
116 PROGRESS AND PLENTY 
 
 publican form of government, were outlined 
 but dimly, if at all, when the logic, none the 
 less sound and conclusive, of Concord, Lex- 
 ington, and Bunker Hill was applied in the 
 name of Justice, Liberty and Equality. 
 Those who would discuss details, or the work- 
 ings of a proposed theory in order to deter- 
 mine the principle of action, assume that the 
 principle is one solely of expediency. A 
 moral question admits of no such determina- 
 tion. Socialism is essentially a moral ques- 
 tion, and herein lies the secret of its strength, 
 the hope of its friends, and the terror of its 
 
 enemies Distrust of these principles is 
 
 pessimism. Their judicious application de- 
 pends upon the exigencies of time and circum- 
 stances, and affords abundant room for the 
 theories of philosophers, philanthropists, and 
 statesmen. He who insists upon any arbi- 
 trary or invariable application of them, 
 whether a Socialist or individualist, is a 
 fanatic or a crank. The details of the Social- 
 istic state, as outlined by certain Socialists, 
 are not essential to its existence and successful 
 working. On the contrary, they are wholly 
 gratuitous. When therefore, they are refuted 
 by an opponent, let him not imagine that 
 Socialism is thereby overthrown. Other de- 
 tails or application of the principles of Social- 
 ism are not only possible but probable." 
 There are thousands who believe in the 
 
PROGRESS AND PLENTY 117 
 
 above principles, who cannot accept the de- 
 tailed plan of any Socialist party and who 
 therefore cannot join a Socialist party, who 
 are nevertheless ready to vote for any practi- 
 cal measures that will carry out these princi- 
 ples. It is to be hoped that when we get 
 direct legislation, the members of the Socialist 
 party will vote for measures that harmonize 
 with these principles, even when advocated by 
 other parties. If they do we will carry these 
 principles by larger majorities, and have them 
 adopted more quickly than if we have to wait 
 for either the Socialist or some other reform 
 partjr to come into power. 
 
 Socialists differ on a very important point 
 the law of wages. Vail in his "Principles of 
 Scientific Socialism," puts the cart before the 
 horse and says : 
 
 "The cost of the laborer is the cost of his 
 living, and other things being the same, his 
 living is determined by the number of his 
 habitual needs." 
 
 He quotes Ricardo and Marx to maintain 
 his theory, and disproves it by admitting that : 
 "In each country the average cost of living 
 constitutes a social standard, or socially ac- 
 cepted standard, of living, and this at any 
 given period, regulates the rate of wages. It 
 is the social standard of living that regulates 
 the general rate of wages, and wages regulate 
 the individual standard of living. When the 
 
118 PROGRESS AND PLENTY 
 
 standard is established, the price of labor 
 power, being affected by demand and supply, 
 will vibrate above and below its natural value. 
 If the supply is excessive, the price of labor 
 power, like other commodities, falls, and if 
 the supply continues in excess of the demand 
 a new social standard will be established 
 around which, as from a centre, the price of 
 labor power will oscillate. The value of labor 
 power both rises and falls in accordance with 
 this law." Does not that prove that it is sup- 
 ply and demand and not the standard of liv- 
 ing, which is the law of wages? Mr. Sprague, 
 in "Socialism" says: "Adam Smith mentions 
 five causes which determine wages, but not 
 one of them is the 'standard of living.' ' 
 Again he says: "So far from the truth is it 
 that wages depend on 'the standard of living' 
 that the exact opposite is truer; namely, that 
 the standard of living depends on wages and 
 changes with every variation in wages." 
 
 Although he does not pretend to know what 
 the law of wages is, he really states it in the 
 following: "We may not be able to say what 
 determines wages. If we were to sell labor, 
 we would get the most possible ; if we were to 
 buy it, we would pay the least possible, for 
 the simple reason that while we abhor the sys- 
 tem that makes competition necessary, any 
 other course, under individualism would soon 
 compel us to take up our march 'over the hill 
 
PROGRESS AND PLENTY 119 
 
 to the poorhouse.' ' Socialists use the word 
 "value" in so many ways that they can 
 scarcely be said to attach any meaning to the 
 word at all. Whenever more than one mean- 
 ing is given to a word in economic discussion 
 it is sure to lead to confusion. Socialists avoid 
 this to some extent by using a qualifying 
 word, but in nearly every case the qualifying 
 word can be used to express the meaning 
 without using the word "value" except when 
 they are speaking of "exchange value" and in 
 that case, if they only used the word "value" 
 in its true sense the word exchange would not 
 be necessary. While this is true of other 
 words and other schools of Political Economy, 
 and although "value" is often misused by all, 
 still there is no stumbling block in the Socialist 
 philosophy that compares with "value." 
 "Useful" expresses the same meaning as "use 
 value" and in the latter expression "value" is 
 of no "use." A Socialist, after hearing a lec- 
 ture on Political Economy, did not understand 
 it very well, because the lecturer "never told 
 what kind of values he was talking about." 
 
 Sprague says: "Labor is the source of all 
 value," meaning that labor is the source of 
 all wealth. Value is simply a relation between 
 two or more things. "It is neither a thing nor 
 an attribute of things." Nothing has value 
 until it is compared with something else, and 
 then its value depends upon the relative sup- 
 
120 PROGRESS AND PLENTY 
 
 ply of and demand for the articles compared. 
 
 It is true that the amount of labor required 
 to produce an article affects its value because 
 the laborer must be paid for making it, and if 
 the demand for an article does not cause its 
 price to cover the cost of production includ- 
 ing the cost of labor fewer of such articles 
 will be made until the reduced supply causes 
 the price to rise enough to cover the cost of 
 production. This encourages laborers to pro- 
 duce the things that people want the most, 
 because by so doing they will get the highest 
 wages or profits; and it discourages them 
 from making what people do not want, be- 
 cause it does not pay. 
 
 It may seem to some that there is no mate- 
 rial difference between my theory and Mr. 
 Sprague's. He claims that the value of an 
 article depends upon the time required by 
 laborers to produce it, but admits that supply 
 and demand (or competition) may cause the 
 price either to rise above or fall below the cost 
 of production. While I claim that the value 
 of all things depends upon competition, but 
 admit that labor will not be directed to mak- 
 ing goods unless there is sufficient demand 
 for them to cause their price to at least equal 
 the cost of production. But in problems of 
 this kind a slight mistake in the premises may 
 lead to altogether unwarranted conclusions, 
 and I think it the different meanings we attach 
 
PBOGRESS AND PLENTY 121 
 
 to the word "value" and our different ideas of 
 what causes value, that has made us differ 
 entirely as to what is required to make wages 
 high. Believing that the price of labor de- 
 pends upon supply and demand I naturally 
 come to the conclusion that if we regulate 
 competition so that there will always be a de- 
 mand for all the labor offered, wages will then 
 be high. Sprague, believing that the value of 
 goods depends upon the time labor requires 
 to produce them, comes to the conclusion that 
 competition must be abolished. Mr. Vail, be- 
 lieving that wages depend upon the cost of 
 living, would abolish the wage system. 
 
 Del Mar speaks of the execrable jargon of 
 the writers of the capitalist school of political 
 economy, and I am sure the Socialist jargon 
 is far worse and some new terms are necessary 
 to avoid the use of some words in more than 
 one sense. 
 
 Whether the co-operative commonwealth is 
 necessary to the reign of social justice or not, 
 is a question that may be left open until we 
 get some other reforms that are more pressing 
 and easier to apply. A reformed system of 
 currency is the most pressing question at pres- 
 ent, as it is before Congress now. The plan 
 I advocate is in harmony with the Socialist 
 platform and it may even suit the bankers, 
 except that they will be sure to want the rate 
 of interest charged for government loans fixed 
 
122 PROGRESS AND PLENTY 
 
 at a high rate so as not to interfere with their 
 profits. 
 
 The taxation of land values is gaining in 
 popularity with the Socialists as well as with 
 other reformers, in fact the forces of Democ- 
 racy are gradually drawing together. Social- 
 ists are becoming more democratic and Demo- 
 crats more Socialistic, and if the tendency 
 continues they must finally meet and unite. 
 When that time comes the reign of social jus- 
 tice will be very near. Direct Legislation, 
 land and money reform, are the three most 
 important steps towards a higher civilization, 
 and when we get them the less important re- 
 forms will soon follow. The public ownership 
 of capital is altogether unnecessary. Give the 
 government control of the currency and the 
 people loans at a low rate of interest, and the 
 capitalists' power to oppress labor is gone. A 
 tax on land values will free labor from the 
 oppression of the landlord. These two re- 
 forms will bring us very close to the Socialist 
 ideal, and although many other reforms are 
 desirable, they are not really necessary. 
 
CHAPTER XII. 
 
 REFORMERS MUST UNITE TO WIN. 
 
 If land reformers, money reformers, and 
 Socialists, could all unite, they could soon 
 overcome all opposition, and we would soon 
 have an improved industrial system. The 
 principal obstacle to union is that their pro- 
 posed remedies do not all harmonize with nat- 
 ural law. When reformers all realize that: 
 "The laws of the universe are harmonious," 
 that economic laws are no exception, and 
 when a plan for an improved industrial sys- 
 tem is presented, with all the proposed 
 changes harmonizing not only with natural 
 law but with one another, there is scarcely a 
 doubt but what such a plan will bring reform- 
 ers together. The followers of Henry George 
 must be shown his mistake; they must learn 
 that man's right to the use of the earth, and 
 his right to exchange his wealth with whom- 
 soever he will, are not the only natural laws 
 that are infringed by our industrial system. 
 They must learn that in order to employ them- 
 selves effectively laborers require capital ; that 
 the easier it is for them to obtain capital, the 
 
124 PROGRESS AND PLENTY 
 
 greater will be the number of laborers who can 
 employ themselves profitably, consequently, 
 less competition for work and higher wages. 
 They have also to learn that government is 
 simply organized society, and that it should 
 work for the common good. If the majority 
 decides that the government should enter the 
 industrial field, there is no good reason why it 
 should not. It can do so without interfering 
 with the rights of capitalists, and by so doing 
 it can free the laborers from dependence upon 
 capitalists. We can adjust our social system 
 to the law of competition in such a way that 
 wealth will be justly distributed, or we can 
 adjust it so that competition will give most 
 of the wealth produced to a few. 
 
 Our legislators have understood natural law 
 pretty well but have worked for the latter 
 result and have been quite successful. I like 
 the way Mr. Blissard states the case in his 
 "Ethics of Usury and Interest." He says: 
 "A fixed rate of lawful interest was an empiric 
 remedy and failed. In unreformed parlia- 
 ments no scruples were ever shown as to inter- 
 fering with economic laws so as to benefit the 
 legislators. Wages were fixed by act of Par- 
 liament. The importation of Irish cattle was 
 prohibited for the benefit of English land- 
 lords, just as the importation of foreign corn 
 was handicapped by a duty. The doctrine of 
 Laissez-faire inaugurated later, was not so 
 
PROGRESS AND PLENTY 125 
 
 much a policy as an interregnum between two 
 policies. It succeeded a system of violent in- 
 terference of the civil law against economic 
 forces. It should precede a system of direct- 
 ing these forces into channels of social useful- 
 ness." That is just it. We cannot prevent 
 these forces from working, but we can, if we 
 understand them, adapt our institutions to 
 them in such a way that they will benefit the 
 whole people. Now that is just what reform- 
 ers are trying to do. The Single Tax move- 
 ment is an attempt to direct natural forces in 
 such a way as to benefit the whole race, by 
 restoring the right to the use of the earth to 
 all. The Socialist propaganda is for the same 
 purpose. They not only intend restoring the 
 earth to all men, but they intend to enable 
 every man to apply his labor effectively, by 
 supplying him with the necessary capital. If 
 they understood natural law better they would 
 try to harmonize their proposed reforms to 
 these laws. They see the bad effects of rent, 
 interest, and competition, and propose to abol- 
 ish them. Our system of commerce and in- 
 dustry has been adjusted to these laws in such 
 a way as to enslave the masses and keep them 
 dependent upon the rulers, or those who con- 
 trol the land and the money. Social justice 
 can be established without abolishing any of 
 these. Rent and interest can both be taken 
 for the common good and competition can be 
 
126 PROGRESS AND PLENTY 
 
 prevented from forcing wages down or from 
 having any other bad effect. Our industrial 
 system based on monopolized land and cap- 
 ital, forces people to compete and to be far 
 more selfish than they would be under condi- 
 tions that would enable them to get land and 
 capital on easier terms. Under better condi- 
 tions competition certainly will not be so keen, 
 and as people become less selfish, may grad- 
 ually die out, at least the bad phases of it will. 
 It did not require any man-made law to start 
 the competitive system, and it does not require 
 any special law to abolish it. We can guide 
 competition into channels of social usefulness. 
 Systems may be adopted that will prevent 
 competition from doing harm. For instance: 
 taxing land values will prevent competition 
 for land from forcing rent as high as it does 
 under the present system; and the reform 
 which I propose for the currency would pre- 
 vent competition for money from forcing in- 
 terest above the government rate. Laws have 
 been passed to prevent usury by forbidding 
 people to charge more than a certain rate of 
 interest; such laws generally do more harm 
 than good, as it is often better to pay a high 
 rate of interest than not to secure a loan. 
 The government, by forbidding people to 
 charge more than a certain rate of interest, 
 causes less money to be loaned, and borrowers 
 are often forced either to evade the law or to 
 
PROGRESS AND PLENTY 127 
 
 get along without the loan. Now if instead of 
 forbidding people to ask more than a certain 
 rate, the government had offered to furnish 
 loans at a certain rate whenever the borrowers 
 could not obtain money at that rate, it would 
 prevent high interest without causing any 
 hardship to borrowers. The same principle 
 can be applied to wages. 
 
 The government has no right to compel 
 employers of labor to pay more than the com- 
 petitive price, but the people have a perfect 
 right to hire all the unemployed at as high 
 wages as they can afford to pay. So if in- 
 stead of asking for a law compelling all who 
 hired laborers, to pay at least the wages fixed 
 by law, the people should require the govern- 
 ment to hire all the unemployed at a minimum 
 wage, then employers could not hire any 
 laborers for less than the minimum wage and 
 competition could only raise wages above the 
 government rate, and there would be no un- 
 employed. On the other hand to compel em- 
 ployers to pay more than the competitive wage 
 would cause more to be unemployed than there 
 would be without a fixed minimum wage. 
 
 If that plan was carried out the government 
 would get all the inefficient workers in the 
 country and suitable employment would have 
 to be furnished for them. We have reached 
 a state of civilization where there should be 
 no unemployed. It is a disgrace to our coun- 
 
128 PROGRESS AND PLENTY 
 
 try that there is a person in the land able and 
 willing to work, who cannot find an opportu- 
 nity at fair wages. We should not only find 
 employment at high wages for all who can 
 work, but we should also feed, clothe and 
 shelter all who can not. If we were to pay a 
 minimum wage to all who applied for it, 
 whether they could work at all or not, the 
 minimum wage might take the place of the 
 proposed old age pensions, and in fact almost 
 all other kinds of charity, besides finding em- 
 ployment for all able workers who could not 
 find employment at higher wages, 
 
 I do not mean that the government should 
 pay able-bodied men a minimum wage unless 
 they worked, but that those who applied for 
 the minimum wage should get it although un- 
 able to work. Speaking of the unemployed, 
 is there a more idiotic plan possible for keep- 
 ing people unemployed than the army? Until 
 the army is disbanded altogether the soldiers 
 should be put to work at some useful occupa- 
 tions, and their wages raised. They might be 
 drilled one day in the week and earn enough 
 to be self-supporting at much higher wages 
 than they are getting. If we raised all public 
 revenues by taxing land values and supplying 
 the people with money at a low rate of inter- 
 est, a minimum wage would probably not be 
 necessary for able-bodied men, as there would 
 probably be work for all at high wages, and 
 
PROGRESS AND PLENTY 129 
 
 when child labor is prohibited there will be 
 plenty of easy work for those unable to do 
 hard work. 
 
 One object I had in mind when starting to 
 write this book was to present a plan upon 
 which all reformers could unite. I have not 
 appealed to either passion or prejudice. I 
 have tried to be fair to all parties, to admit the 
 truth, no matter who advocated it, and also to 
 expose economic error wherever I could detect 
 it. Whether I have presented the truth in 
 acceptable form or not remains to be seen. I 
 have appealed only to reason, and leave it to 
 the readers to judge if I have made a reason- 
 able appeal. 
 
CHAPTER XIII. 
 
 CONCLUSION. 
 
 I have attempted to correct some economic 
 fallacies, and to substitute true for false prin- 
 ciples. There is no principle advocated in this 
 book that has not been accepted by a large 
 number of people, still there is no book advo- 
 cating the same set of principles. I have 
 found some truth that has not been generally 
 accepted in all schools of political economy, 
 and I have found error in the teachings of all 
 the works I have examined. To me, my phil- 
 osophy seems perfectly harmonious ; but I do 
 not forget that Mr. George's philosophy 
 seemed harmonious to him, and still seems so 
 to some of his followers. It must be so with 
 all writers. If we could see our own mistakes 
 we would not make them. Of course a person 
 may advance arguments for a theory that he 
 cannot fully prove, but I have not attempted 
 to disprove anything without having what I 
 considered conclusive evidence that it was 
 false; nor have I attempted to prove anything 
 unless I believed the evidence justified me in 
 accepting it. If I have expressed no doubts 
 
PROGRESS AND PLENTY 131 
 
 on any of the points I have tried to make, it is 
 because I have seen no reason to doubt the 
 correctness of my position. 
 
 Although no Political Economist states that 
 competition, or supply and demand, is the law 
 of distribution, yet they all admit it either 
 directly or indirectly. As to Mr. George's 
 theory that high rent lowers wages while high 
 interest raises them, the facts are so plain and 
 so generally accepted that I must apologize 
 for taking up so much space refuting it. My 
 excuse is that a great many of Mr. George's 
 followers still believe in that doctrine, and it 
 not only prevents them from taking up other 
 needed reforms, but weakens the Single Tax 
 cause. In other respects the Single Tax 
 theories are ahead of any other economic theo- 
 ries, and its advocates are among the ablest 
 and most earnest reformers. It is of vital im- 
 portance that all reformers should see that 
 high interest must have the same effect upon 
 wages that high rent has that is to lower 
 them. Any one who accepts Mr. George's 
 statement that: "The laws of distribution are 
 laws of proportion," must surely recognize the 
 fact, that if wages are lessened by the landlord 
 getting a large share of the product they must 
 also be lessened by the capitalist getting a 
 large share. A person who does not see that 
 cannot come to right conclusions as to the re- 
 lation of capitalists and laborers. He must 
 
132 PROGRESS AND PLENTY 
 
 attach too much importance to the effect of 
 rent upon wages, and he must fail to see the 
 pernicious effect of high interest or large 
 profits. No one who does not understand the 
 true law of Distribution can be a consistent 
 worker for reform. The most conspicuous 
 example which I can think of is the late Tom 
 L. Johnson. He was a sincere, earnest worker 
 for a just division of wealth, but his accept- 
 ance of Mr. George's theory that high interest 
 accompanied high wages caused him to advo- 
 cate a system of currency actually worse than 
 the one we have, and that is saying a good 
 deal. While in Congress he presented a bill 
 to have the government issue 3% bonds. The 
 owners of the bonds were to have the privilege 
 of exchanging their bonds for money, or their 
 money for bonds, whenever they chose. Such 
 a plan would prevent inflation, and would 
 contract the currency automatically, as the 
 bondholders would be sure to turn their money 
 into the treasury whenever they could not get 
 more than three per cent for it. When money 
 was scarce the bondholders could present their 
 bonds, and withdraw their money from the 
 treasury, and put it in circulation. So the 
 plan would be automatic as long as the bond- 
 holders allowed the law of supply and demand 
 to take its course. The objections I see to 
 Johnson's plan are that the bondholders 
 would have it in their power to control the 
 
PROGRESS AND PLENTY 133 
 
 currency as they wished. As the law stands, 
 financiers sometimes keep money hoarded in 
 order to keep interest high. In New Zealand, 
 before the government passed the "Loans To 
 Settlers" act, the bankers used to send money 
 to Australia and invest it at a lower rate of 
 interest than they could get in New Zealand 
 in order to keep interest high at home. A 
 combination of financiers can often afford to 
 keep part of their money idle without loss as 
 they can get higher interest on what is in- 
 vested by so doing; and it often pays them to 
 do so in order to affect prices. How much 
 more temptation they would have to keep their 
 money idle when it was needed in circulation 
 if the people were taxed to pay them three per 
 cent on their idle money? Then capitalists 
 are very often timid and prefer low interest 
 on government bonds to considerably higher 
 on other security, and many of them would 
 hold the bonds when they could get higher 
 interest by loaning their money. His plan is 
 founded upon the same principles as mine ex- 
 cept that his plan was devised to keep interest 
 high, while mine would prevent interest from 
 rising, and even hoarding money could not 
 affect the rate of interest, with my plan in 
 operation. 
 
 His plan was to tax the people to keep 
 money idle when too much was in circulation, 
 and he seems to have taken it for granted that 
 
134 PROGRESS AND PLENTY 
 
 financiers would not interfere with the law of 
 supply and demand. While his plan would 
 tax the people to pay interest on bonds, mine 
 would furnish a large revenue by supplying 
 the people with money at a lower rate of in- 
 terest than they would otherwise have to pay. 
 His plan would make it possible for the finan- 
 ciers to control the currency more completely 
 than at present, except that they could not in- 
 flate it to such an extent that interest would 
 fall below 3%. Then I do not think he had 
 any plan for limiting the amount of bonds to 
 be issued. He would pay capitalists for put- 
 ting their money into the treasury. I would 
 make them pay for drawing money from the 
 treasury. 
 
 I can only see one reason why Mr. Johnson 
 could have proposed such a plan, and that is 
 that he accepted Mr. George's theory that 
 "wages and interest rise and fall together." 
 
 All reformers who wish to raise wages must 
 have a clear understanding of economic laws, 
 or, like Mr. Johnson, they will be advocating 
 measures on the one hand that will raise 
 wages, and offset all the good they do by ad- 
 vocating measures that will raise interest and 
 lower wages. 
 
 Henry George understood the law of dis- 
 tribution as far as it affected the landlord on 
 one side, and the undivided shares of laborer 
 and capitalist on the other. His remedy for 
 
PROGRESS AND PLENTY 135 
 
 the evils and injustice of landlordism is the 
 best and most practical ever offered and is 
 gaining steadily in popularity. It is being 
 partly applied in several countries, and no 
 doubt it will continue to gain until the right of 
 every man to the use of the earth is recognized 
 the world over. Most Socialists favor the 
 Single Tax, but have been kept from joining 
 the Single Taxers by the false theories the 
 latter hold in regard to the relations of labor 
 and capital. If I have been successful in 
 pointing out the true laws of distribution, and 
 also in showing how the ideals of the Socialists 
 can be realized by a practical method that does 
 not interfere with economic law, the obstacles 
 are removed that keep these two schools of 
 reformers separate. If my solution of the 
 money problem is accepted by the advocates 
 of money reform, the way it harmonizes with 
 Single Tax principles should make it easy for 
 money reformers to accept the other reforms 
 I propose. With the land and money prob- 
 lems both solved there would be work at high 
 wages for all; but to make it a certainty we 
 can substitute work for all at a minimum wage 
 for charity. Even the dullest can understand 
 that if the government was prepared to hire 
 all who applied for work at a minimum wage 
 that the problem of the unemployed is solved. 
 Even if the minimum wage was very low at 
 first, it could be increased as the increasing 
 
136 PROGRESS AND PLENTY 
 
 prosperity, sure to follow the adoption of the 
 other two reforms, brought more money into 
 the treasury. It would be a start towards the 
 co-operative commonwealth of the Socialist, 
 and if the government ever proved itself more 
 capable than individuals at managing indus- 
 try, the co-operative commonwealth would 
 evolve naturally from that start; but unless 
 the government proved itself the more capa- 
 ble, industry would continue to be carried on 
 by individuals. 
 
 Now, Reader, do you approve of my plan, 
 and are you ready and willing to help to carry 
 it out? If a number approve, we should or- 
 ganize to carry it out. I would like to hear 
 from you anyway, whether you approve or 
 not; and a card or letter addressed to the 
 author at Fairhope, Alabama, will find me. 
 
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