HB 
 
 ni 
 
 ^- ECONOMICS 
 
 /or Upper Grades 
 
 DOLE 
 
 D. C. HEATH & CO. 
 
Class JdB-nx- 
 
 Book t^ 
 
 CopigiitN" -Ji (o. 
 
ECONOMICS FOR 
 UPPER GRADES 
 
 BY 
 
 CHARLES F. DOLE 
 
 WITH INTRODUCTION BY 
 
 ALBERT SHIELS 
 
 RECENTLY SUPERINTENDENT OF SCHOOLS 
 LOS ANGELES, CALIFORNIA 
 
 D. C. HEATH & CO., PUBLISHERS 
 
 BOSTON NEW YORK CHICAGO 
 
0^ 
 
 5' 
 
 Copyright, 191 8 and 1920 
 By Charles F. Dole 
 
 2EO 
 
 ©C;i,A570539 
 
 JUL -2 1820. 
 
INTRODUCTION 
 
 The war has stirred mightily the hearts of men. Exal- 
 tation, sacrifice, and service have suffered their inevitable 
 reaction. The development of industry has brought new 
 alignments, and though these would have confronted us in 
 any case, yet now, in the reaction from a great emotion, the 
 world that meets them is a troubled, a hesitant, a disappointed 
 world. Old conceptions, some of them as old as the nation, 
 which were once accepted as we accept the sunrise or the rule 
 of three, are called upon to prove their own vaUdity. De- 
 mocracy is no longer a question of a constitution or a code 
 of laws ; it is enmeshed in problems of wages and costs and 
 distribution. We cannot understand our politics unless we 
 study our economics. Perhaps it is as well that Americans 
 are being compelled to analyze the truth of principles they 
 so long have taken for granted, if for no other reason than 
 that they have accepted them too casually, and too in- 
 dolently. The political heritage of a people will not endure 
 neglect. Such things as representative government, the 
 rule of the majority, the liberty of opinion, obedience to law, 
 were gained by painful effort, and only painful effort will 
 retain them. 
 
 These ideas and others akin to them are the sacred things 
 of the Republic. In the Egypt of the ancients, it was the 
 duty of a priesthood to preserve the traditions of the people. 
 Education and those engaged in education are the priesthood 
 of the modern time. 
 
 They it is who must keep the torch ahght and through the 
 children pass it to succeeding generations. And because 
 
 iii 
 
iv INTRODUCTION 
 
 at this time not only the defects of our democracy, but its 
 principles as well, are being subjected to criticism, and to 
 assault, because any intelligent discussion of these questions 
 must hinge on economic as well as on political principles, 
 the schools are charged, as no other institution is, with the 
 mission of imparting sound knowledge and right guidance. 
 
 Governments, like other human institutions, are modified 
 from time to time, as are the conditions that influence them. 
 New policies are adopted, new duties undertaken. But, 
 as in every evolution, principles continue, and only their 
 applications change. If these principles of our people are 
 misunderstood, or if some of them are attacked through 
 ignorance or passion or lust of gain, then imperatively must 
 they be recognized and reestablished, not for themselves, 
 — for they are imperishable — but for the safety of society. 
 As in other ages, so now education must reflect the needs of 
 the period. 
 
 In popular conception, economics is a dry, even a depress- 
 ing science. Sometimes, alas, writers develop an infinite 
 capacity to make interesting things forbidding. For there 
 are very useful and very fundamental truths of economics, 
 as of politics, that as they touch the life of every citizen in 
 a very realistic fashion, are, for that reason, of peculiar 
 interest to him. Such truths lend themselves to a wealth 
 of illustration familiar even to the very young. A boy or 
 girl need not wait for the high school to know the difference 
 between money and wealth, th^ absurdity of trying to create 
 by legislation things that can be produced only by good hard 
 work, the difference between liberty and license, the need 
 of the expert worker in the expert's job, the inherent fairness 
 of keeping faith on a contract freely made, — which is only 
 a demand of decency that a man keep his promise, — the 
 reasons both ethical and prudential why a citizen should 
 consider the public welfare, the need of tolerance, the folly of 
 
INTRODUCTION V 
 
 hysterical suspicion and wild accusation against any one not 
 of his race or nation. Th^se are not things that need really 
 be learned, for their truth and justice even the wayfarer 
 knows, — rather they are to be related to the life of the 
 people in this nation and at this time. Especially must 
 our pupils feel deeply, as well as understand, the wickedness 
 of any type of rule which would compel the tyranny of 
 a minority, whether of birth or of wealth, or of a proletariat, 
 or of any group whatever. 
 
 A teacher who will use this text not as an added ''subject" 
 but rather as a comment and a method of adjustment of 
 present conditions made vivid by direct local references, who 
 will apply some of it to the life in the classroom and the 
 school, will find a ready means of enriching the composition, 
 the arithmetical problem, the reading period, the discussion 
 of current events. 
 
 An appreciation of history, and in some degree of geography, 
 can be facihtated by the use of this text material ; for train- 
 ing in ethics and civics, the value of political and economic 
 reference is obvious. 
 
 Economics as a science has infinite applications, some of 
 them exceedingly complex, and not a few of the subject 
 disagreements among economists themselves. But it is 
 only with simpler relations that our children need be con- 
 cerned. As they learn the fundamental principles and be- 
 come accustomed to apply them not only to school problems, 
 but to those that are now demanding the attention of all of 
 us, they will begin to interpret the repubhc not as document 
 or a declaration, but as a place where men and women may 
 live safely and happily only as they are willing to work 
 together and to give some of their own thought and effort 
 to welfare. For a society like ours cannot indefinitely 
 continue to survive in an atmosphere of suspicion, of doubt, 
 of class antagonism, and of individual aggrandizement. 
 
vi INTRODUCTION 
 
 It is possible to conceive that the schools of an autocracy 
 might be indifferent to matters poHtical, social, or economic. 
 This cannot hold true of a democracy. For the life of a 
 democracy depends upon intelligent teamwork. A man's 
 first business cannot be to feather his own nest, or to take 
 care of his own- health, or to provide for the enjoyment of 
 his own leisure. These are all proper purposes in the edu- 
 cational scheme, and all useful for the making of better 
 citizens. But they do not in themselves insure good citizen- 
 ship. The first business of the public school is to give to 
 pupils that knowledge and understanding, and to inspire 
 them with those motives which will make good citizens. 
 A pupil cannot be a good citizen unless he believes that he 
 must seek his own welfare only through the welfare of the 
 group of which he is a part, and unless he acts upon his 
 belief. It is not wholly a matter of good will: it requires 
 understanding. To repeat, the important business of the 
 school is to make the good citizen. This first, and all other 
 
 things may come after. 
 
 Albert Shiels. 
 
 May, 1920. 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 I. What Wealth Is i 
 
 II. The Conditions of Wealth 7 
 
 III. To Whom Wealth Belongs, and How it is Divided i 5 
 
 IV. The Institution or Property 25 
 
 V. Honest Money 34 
 
 VI. Capital, Credit, and Interest 41 
 
 VII. Labor and Competition 50 
 
 VIII. The Grievances of the Poor 59 
 
 IX. The Abuses and the Duties of Wealth ... 65 
 
 X. Buyers and Sellers; or, The Mutual Benefit 74 
 XL Employers and the Employed: Their Interest 
 
 in Each Other 83 
 
ECONOMICS FOR UPPER 
 GRADES 
 
 CHAPTER I 
 WHAT WEALTH IS 
 
 " Wealth " has two meanings. The larger mean- 
 ing comprises everything which makes men '' well off." 
 Thus, a man's health, his home, his children, the 
 salubrious climate, the air and the rain, the beautiful 
 scenery of his country, are a part of his wealth. In this 
 broad sense the man who enjoys life most amply, whether 
 he has much or little property, is the most wealthy. 
 In this sense, indeed, his best wealth may not have any 
 money or market value. 
 
 In the narrower sense, wealth is everything which has 
 a market value, that is, which can be bought and sold. 
 Houses, ships, lands, wheat, cattle, furniture, books and 
 pictures, gold, silver, iron — such things constitute visi- 
 ble wealth, which we can see and touch. If they were 
 added together wherever they could be found, they 
 would make the wealth of the Nation. 
 
 Natural wealth. — There is much that is often called 
 wealth which has no present market value. The fish 
 on our shores, the wild lands, the timber in Alaska, the 
 ores in the mines — these things of unknown value may 
 sometime be wealth, but they are not wealth until they 
 can be bought and sold. 
 
2 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 In the strict sense of the word, man always creates 
 wealth — sometimes by his labor, as when he produces 
 wheat or builds a house; sometimes by bringing a thing, 
 Kke wild fruit, to market and offering it for sale; and 
 again merely by claiming it as his own, as when a man 
 fences off a piece of land in the wilderness, or discovers 
 a mine. 
 
 The public wealth. — That is not always wealth which 
 costs money. Thus, a city may spend millions of dol- 
 lars in building sewers or constructing streets. But 
 the sewers and streets are not strictly wealth, since 
 after they are constructed no one would pay anything 
 for them. There may be pubKc works also, like jails 
 and almshouses, in which wealth is sunk. The need of 
 such things is a pubHc misfortune, and indicates the 
 presence of poverty and crime. A nation that had 
 quite outgrown the necessity for jails and almshouses 
 would be far richer than a nation that had many costly 
 buildings of this sort. A well man, who has no need of 
 medicines, is better off than a lame or sick man who has 
 to keep a supply of crutches and drugs. 
 
 Wealth is likewise sunk in fortifications and war- 
 ships. The nation would be richer if it had no need of 
 them, as a man is better off if he needs no pistols to 
 defend himself. 
 
 Wealth in men. — There is wealth in horses or mules, 
 because they can work, and can therefore be bought and 
 sold, or hired. There was also wealth in men, for the 
 same reason, under the system of slavery. A large part 
 of the property of a slave State was in men. This kind 
 of wealth did not disappear when the slaves were made 
 free; free men own themselves instead of being owned 
 
WHAT WEALTH IS 3 
 
 by masters. They can hire or sell their labor, their 
 skill, or their knowledge. A man without owning any 
 visible wealth may possess qualities in himself, such as 
 experience and integrity, which will bring thousands of 
 dollars a year. A State which has a plenty of such men 
 will have all the visible wealth that it needs. Although 
 wealth in men, that is, their labor and skill, can be 
 bought and sold, so that a man with no money and a 
 good trade is richer than an ignorant man with a thou- 
 sand dollars, yet this kind of wealth is not generally 
 counted. It is not shown in the census reports; in 
 fact, it is not easy to measure it in money. Who can 
 tell how much a bright boy or girl is worth ? 
 
 Wealth in paper. — A man may have large wealth and 
 never see it. Some of it may have been lent to farmers 
 or to help build warehouses in a distant city. Some of 
 it may have helped a company of men to build a mill, 
 or a line of steamers, or a railroad, in a new State. Some 
 of it may have been put into a bank, and then lent 
 with other money all over the country. Some of it may 
 have been lent to the government. Can you tell where 
 it now is? While the rich man may not see anything 
 that he owns, he has papers which show the amount 
 of his wealth. Some of these papers are notes, signed 
 by men who promise to pay so many dollars; or mort- 
 gages on the farmer's house and land; or railroad bonds, 
 which are notes of the railroad company; or certificates 
 of so many shares in the mill or the bank; or bonds of 
 the government, which are really a sort of mortgage 
 upon all the property of the people; or paper bills, 
 which promise so many dollars in gold or silver. 
 
 This paper wealth, these bonds and notes and certifi- 
 
4 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 cates, may be bought and sold in the market, but they 
 have no value in themselves; the country would not be 
 poorer if they were burned. Yet they are often counted 
 as so much wealth. Thus, the State of New York is 
 said to have so many billions of dollars in visible wealth, 
 and so many billions more in paper wealth. In this way 
 the same wealth is often counted twice. The railroad-is 
 counted once for its visible value in land, rails, stations, 
 and cars; and then it is counted again for the paper 
 bonds and shares, which merely show who its owners 
 are. 
 
 So with the mortgage on the farmer's land. It shows 
 that for the present some one else owns part of the farm. 
 Perhaps a savings bank has the mortgage, in which case 
 the depositors in the bank have a share in the farm. 
 We have seen that the government often attempts to 
 tax the same property, first as visible and again as paper 
 wealth. 
 
 The wealth in paper may sometimes mean an addition 
 to the real wealth of a State. Thus the people of Great 
 Britain own a vast amount of wealth all over the world 
 in lands and mines, etc. The bonds and paper certifi- 
 cates show that the people in other countries are so 
 much in debt to the people in Great Britain. So, also, 
 the people of Philadelphia may hold paper bonds and 
 shares in stores and mills in cities in the West, and the 
 people oi other cities may own land and buildings in 
 Philadelphia in the same way. 
 
 False wealth. — There may be wealth, or things which 
 can be bought and sold in the market, which harm the 
 persons who use them. Thus, if ardent spirits hurt and 
 degrade a community, the distilleries and saloons used 
 
WHAT WEALTH IS 5 
 
 by the liquor business lessen the wealth of the people. 
 Although, therefore, the national census of wealth may 
 add hundreds of millions for the distilleries and saloons, 
 a true estimate would subtract this value, since that 
 cannot really be wealth which does not in some way 
 make men better off. It is Kke a vicious animal which 
 destroys every year more than his value. 
 
 How wealth varies. —That which is wealth in one place 
 may not be wealth in another. An acre of land in New 
 York City may be worth milHons of dollars, but an acre 
 of land in Greenland is worthless. What is a picture 
 worth in Patagonia? Wealth depends on a market, 
 or on the desire of men to buy and sell. Even the same 
 market may change from one year to another. Thus 
 London and New York are the markets of the world, 
 where all sorts of things are continually bought and sold. 
 But, in case of a great disaster, men's desire to buy and 
 sell may suddenly be checked. In that case the value 
 of many kinds of wealth falls, though the things them- 
 selves remain. 
 
 Robinson Crusoe's lands and goats, though precious to 
 him, were not strictly wealth till other men appeared to 
 purchase them, that is, to make a market. Even gold 
 is not wealth on a lonely island, for one man alone has 
 no use for it. 
 
 Wealth is constantly being destroyed, or used up, or 
 worn out. Some kinds, like food, are good only for im- 
 mediate consumption. Clothing lasts a little longer, 
 but soon has to be renewed. Houses and buildings at 
 last go to decay. The gold and iron wear out. Per- 
 haps one eighth of all the wealth in a country is used 
 up in a single year. Among a poor or barbarous people 
 
6 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 the proportion is larger. The land is the one thing 
 which remains the same; but its fertility may be ex- 
 hausted, while the demand for it is constantly changing. 
 
 The increase of wealth. — Although wealth is con- 
 stantly being destroyed or worn out, it is also being re- 
 created. The harvests of each year renew it; the labor 
 and skill of millions of persons change the raw products 
 into new and higher values, as in the case of a steel 
 watch-spring, worth many times the cost of the crude 
 iron ore. Even the land may increase in value by being 
 tilled, or the growth of a city may give each square foot 
 of land a greater value than an acre possessed before the 
 city was built. Possibly half of the wealth of people 
 who Hve in cities consists merely in the land upon which 
 stores and houses are crowded together. The greater 
 the city, the more the value of this land. 
 
 The wealth of a people is thus like the body of a man. 
 It is in a state of constant change or flux. It is always 
 being renewed or made over. How much can you find 
 that has lasted over fifty years? Thus, again, we find 
 that the skill, the learning, the energy, the character, 
 the ideals, and the purpose of a people — in other 
 words, what education gives — constitute their real 
 wealth. 
 
CHAPTER II 
 THE CONDITIONS OF WEALTH 
 
 If a household of children were rude and destructive, 
 or had not learned how to use toys or articles of furni- 
 ture, it would be impossible to keep anything of value; 
 they would have no wealth. So with a savage people. 
 As long as men were barbarous, the duties of business 
 and property were extremely simple. The land be- 
 longed to the whole family or tribe. There was little 
 furniture in the rude tents or huts where the people 
 lived together in alternate plenty and want. There 
 was little or no barter or exchange of goods, and no 
 shops or merchants, and for a long time there was no 
 coined money. The chiefs lived much like the common 
 people, as is still the case among the American Indians. 
 As men came to live in cities, life grew less simple: all 
 sorts of luxuries were demanded; various trades arose; 
 and there became everywhere a wealthy class, living 
 differently from their neighbors. The growth of cities 
 brought travel, and therefore more trade, as the 
 people of one place learned to desire the things which 
 another place produced. There came to be great trad- 
 ing cities, like Tyre and Carthage, which sent their 
 ships beyond the Mediterranean Sea. 
 
 Unfavorable conditions. — There were serious ob- 
 stacles, however, in early times in the way of industry 
 and commerce and the amassing of wealth. Some of 
 these obstacles continue. 
 
 7 
 
8 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 War. — There was almost constant war. A rich city 
 was always Hable to be pillaged and burned. The cara- 
 vans of merchants were likely to be attacked by robbers. 
 Men had to defend themselves, or to obey ambitious 
 kings, and they lived close to the line of famine. 
 
 Piracy. — The seas were infested with pirates, - who 
 saw no harm in seizing merchant ships, and selling their 
 crews for slaves. Ships driven on shore by storm were 
 mercilessly plundered. 
 
 Slavery. - — Slavery also obstructed industry and busi- 
 ness. The slaves did less work than free men could do, 
 and the latter were less wilhng to work. There came 
 to be a class of idle and unemployed people. 
 
 Caste. — In some countries also, as in India to-day, 
 there were castes, that is, classes of people, the mem- 
 bers of which could not change their occupation. The 
 son of a tanner had to be a tanner. Thus bright men 
 in the lower castes were kept from rising. Ambition 
 and invention were checked, and warriors were thought 
 to be better than workers. 
 
 Privileges and monopolies.^ — ^ Suppose a single fam- 
 ily owned the only spring of water in a town and charged 
 the others for the use of the water. This would be a 
 monopoly. The old world was full of monopolies. The 
 man who owns a valuable copper mine has a monopoly. 
 He and the other owners of copper mines possess the 
 privilege, since every one must have copper, of taxing 
 all the people. In other words, they have a power and 
 source of wealth which others lack. So the owner of 
 valuable land, whose grandfather secured a title from 
 the King of England, may do nothing himself, but live 
 by the rent of his land. When a country has many 
 
THE CONDITIONS OF WEALTH 9 
 
 people who possess privileges or monopolies which the 
 rest of the people cannot enjoy on equal terms, there 
 must be more or less hindrance to free industry and 
 therefore to the growth of wealth. A few may be very 
 rich, but the many may have to work for the few. This 
 has long been the condition of England, Prussia, and 
 other countries where land has been largely in the hands 
 of the few. Monopoly of land is already a danger in 
 the United States. 
 
 The physical conditions of wealth ; the climate. — 
 Certain countries, so far as we know, have never had 
 any wealth. In the arctic regions, where the energies of 
 man are nearly exhausted in the fight with winter, there 
 could never be a rich civilization. Civilization has not 
 flourished in the heart of Africa or under the equator. 
 On the contrary, the richest nations dwell in temperate 
 regions. The climate of a country is one of the condi- 
 tions that help or hinder the wealth of a people. 
 
 Natural resources. — Certain countries are poor by 
 nature. The soil may be sterile, fuel may be scarce, 
 the supplies of valuable minerals may be scanty. Other 
 countries enjoy rich lands, ample forests and coal fields, 
 vast water power, good harbors, and inexhaustible mines. 
 The United States is thus magnificently endowed with 
 the materials of wealth. China is another such coun- 
 try which supports a vast population of industrious 
 people. 
 
 The spur of necessity. — Why is it that the beautiful 
 islands of the Southern Pacific Ocean have Httle wealth ? 
 The people are too comfortable to need to labor. The 
 abundance of fruit contents them; the mild climate re- 
 quires little clothing and makes unnecessary the build- 
 
lO RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 ing of permanent houses. We find few of the arts, or 
 books, until men learn to work, and few would learn to 
 work unless there were some necessity. 
 
 As soon, however, as the conditions of living become 
 harder — when fruits have to be cultivated; when cold 
 and wet demand clothes for men's bodies; when men 
 require shelter and permanent houses — wealth begins 
 through the spur of necessity. Necessity teaches men 
 to work, and all work requires more work to perfect and 
 secure it. The field once tilled has to be fenced or pro- 
 tected from wild creatures; the house has to be en- 
 larged and improved; appliances are invented to save 
 labor, and the inventions in turn demand new kinds of 
 labor and new appliances, that is, more wealth. The 
 introduction of the telephone into a town requires an 
 increased force of men and women to manage the busi- 
 ness, and the increasing numbers require more houses 
 and more telephones. Even the effort to save labor 
 presently calls for new- forms of labor and produces 
 more wealth. 
 
 The necessity to labor at first seems to be a misfor- 
 tune. The long, cold winter requires fuel and hay, 
 and more labor to supply these necessaries. A consid- 
 erable portion of all wealth consists in wood, coal, hay, 
 and substantial buildings, which the rigor of the climate 
 demands. 
 
 Everything that men esteem precious thus arises from 
 some kind of necessity, either real or imaginary. The 
 need of bread or shoes or tools stirs them to work to 
 overcome the need, and thus to grow rich. Would you 
 not rather live in the United States and have to work 
 fo]' your living, than to live a lazy life in Tahiti? 
 
THE CONDITIONS OF WEALTH ii 
 
 Intellectual conditions ; enterprise or energy. — There 
 are some races, and certain persons in every race, who 
 are more easily contented or more indolent than others. 
 They do not keenly feel the spur of necessity. One 
 condition of wealth, therefore, is energy or enterprise 
 or will. The enterprising farmer will work more hours 
 in a day, take better care of his cattle, provide warmer 
 buildings, fertilize his land, and grow rich by his labor. 
 The joy of life consists largely in doing things, in crea- 
 tion, in working out plans. 
 
 Intelligence. — An ignorant people have few wants, 
 and therefore little wealth. An ignorant people could 
 not have invented the steani engine, neither would they 
 have felt the need for the articles which the steam 
 engine helps to produce. It is only when the intelH- 
 gence of a people rises to demand a vast supply of many 
 things, that the new necessity urges inventors to harness 
 the forces of nature to help them in shops, mills, and 
 railroads. The single invention of the steam engine, 
 called forth by intelligence, has increased the wealth of 
 the world in a century more than it had grown in a 
 thousand years. Science constantly brings to view new 
 sources of wealth. 
 
 Taste. — A certain portion of wealth is for enjoyment 
 or decoration. Pictures, statues, beautiful buildings, 
 instruments of music, the products of the various arts, 
 constitute this kind of wealth. It arises from higher 
 kinds of need, as men want satisfaction for their sense 
 of beauty. As soon as a people have learned how to 
 provide a sufficient quantity of food and clothing, a 
 larger number of their skilled workmen are set free to 
 produce and to cheapen the articles of taste. 
 
12 RIGHTS AND, DUTIES OF BUSINESS AND LABOR 
 
 A multitude now have pictures, books, and pianos, 
 which once the few rich people could hardly obtain. 
 The more taste people have, the larger is the produc- 
 tion of this form of wealth. The call for works of art, 
 taste, comfort, and luxury requires more shops and 
 houses, that is, greater wealth of other kinds. Even 
 the taste for natural scenery adds a new value to rocky 
 hills and wild shores, for which persons without taste 
 would see no use. 
 
 Moral conditions: honesty. — There are certain moral 
 conditions of wealth. There will be little wealth if 
 thieves and robbers are abroad. For men will not labor 
 and gather abundance, if their riches are immediately 
 snatched away from them. Neither will they have the 
 heart to work, if the government is dishonest and takes 
 their savings ruthlessly, as most governments used to do. 
 
 Good faith or trust. — Wealth is daily changing hands. 
 A vast portion of business consists in trade. Wool, cot- 
 ton, and wheat must be brought from distant States and 
 manufactured articles returned. But trade is impos- 
 sible unless men trust each other. Trade is carried on 
 in the faith that men will do as they promise, that they 
 will pay for what they buy, that they will furnish arti- 
 cles . as good as they promise. Even a few men who 
 break their word injure business, cause distrust, and 
 compel higher prices which the honest have to pay. 
 On the other hand, if all men keep their word, more 
 business can be donej at cheaper rates, and every one 
 can have more wealth. We all gain or suffer together. 
 
 A state of peace. — When the early colonists were at 
 war with the French and Indians, their cornfields and 
 towns were often burned and their ships captured. 
 
THE CONDITIONS OF WEALTH 13 
 
 They could not make wealth in time of war. But as 
 soon as peace returned, the French and the Indians 
 helped them to get more wealth. The Indians brought 
 them furs, and took cloth and iron in return. Their 
 ships sailed to France, and both the French and the 
 Americans profited by trading together. The Ameri- 
 cans sold their furs and salt fish, of which they had 
 more than they needed, and bought from France silk 
 and other articles, such as they could not make so well 
 as the Frenchmen. Trade made more wealth in both 
 countries, but trade depended on the nations being at 
 peace. 
 
 Courage. — Sometimes vast amounts of wealth are 
 suddenly swept away, as by a fire or a flood. These 
 are the occasions for courage, not only at the time, but 
 afterwards, when men must go to work to repair the 
 damage or to rebuild a new and better city from the 
 ruins, as the men of Chicago did after the great fire of 
 187 1. In various industries, in the management of 
 steam and electricity, on railroads and on ships, there 
 is daily demand for the same kind of daring to take 
 necessary risks and even to brave death, as used to be 
 called for in the hazards of battle. 
 
 In general, when men are friendly with each other, 
 when their ships sail freely into all seas and foreign 
 nations welcome each other to their ports; when many 
 travelers go from one country to another and see what 
 others can do better than they, this friendly travel and 
 interchange help to make wealth. Men who see beau- 
 tiful works of art return home with fresh zest for their 
 own work. Men desire foreign fruits and products, — 
 tea and coffee, pineapples and bananas — and bring 
 
14 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 them to our markets. New ships and steamers must be 
 built to carry the trade of the world; new warehouses 
 must be erected to accommodate the growing trade; 
 more fields must be tilled and more mills built to make 
 things with which to pay the people over the sea for 
 what they send us. Wealth not only rests upon good 
 faith and friendliness, but the getting of wealth brings 
 distant peoples together, and teaches them to trust 
 each other rather than to fight. We see thus how the 
 whole world may some day become a cooperative Com- 
 monwealth. 
 
CHAPTER III 
 
 TO WHOM WEALTH BELONGS, AND HOW 
 IT IS DIVIDED 
 
 Labor alone does not make wealth, as some think. 
 Wealth is partly natural, as the land, the fisheries, and 
 the ores in the mines. Intelligence, skill, and taste are 
 also necessary in creating and managing it. Public 
 order is necessary; honest, industrious, and faithful men 
 are necessary. If reHgion enhances the worth of human 
 life, or furnishes motives for noble conduct, it also shares 
 in creating wealth. Property is worth more in the 
 United States, with its schools, benevolent institutions, 
 and churches, than in Morocco or Siberia. 
 
 The usefuL — If a colony of persons were to settle for 
 the first time m a new country, and take up land and 
 build towns, their wealth would rightfully belong to all 
 who had been in any way useful to the colony. None 
 of it would strictly belong to the idle, to the wasteful, to 
 the injurious, if such were among the colonists. There 
 are in every community various divisions of the useful, 
 who ought to share in the wealth according to the part 
 which they play in making it. 
 
 Discovery or invention. — In a new colony there are 
 certain persons who go out as pioneers or scouts to 
 discover the natural wealth, the fertile lands, the fruits, 
 the minerals, the springs, and waterfalls. If they do 
 nothing but discover, and tell others where to go, they 
 
 15 
 
1 6 RIGHTS AND, DUTIES OF BUSINESS AND LABOR 
 
 deserve their share in the weahh which results from the 
 discovery. 
 
 The inventors are like the discoverers. Whoever shows 
 a new use to which iron or copper can be put is as useful 
 as if he discovered a new mine. Whoever invents a proc- 
 ess or a machine to save labor, that is, to set workmen 
 ree to do something else, to shorten the working-day, 
 or to enhance the enjoyment of men's leisure, may be 
 more useful than a thousand workmen. 
 
 Production. — The largest part of the working-force of 
 the community must be employed in producing food and 
 all kinds of supplies. There must be farmers, black- 
 smiths, carpenters and operatives in shops and mills, to 
 make boots and shoes, clothing, tools, etc. Whoever 
 produces something useful for the community ought to 
 have a share in the wealth. Artists and painters belong 
 under this head, if they add to the happiness of the com- 
 munity. The domestic work done by women comes 
 under the same head. The woman who cooks the 
 man's food, or repairs his clothing, is as useful as the 
 farmer who reaps the wheat. 
 
 We observe various degrees of usefulness in men, from 
 those who work by thousands with their hands to the 
 highly skilled artisans, of whom there are never enough 
 in a town. So among the workers of each kind we see 
 difference of usefulness and worth, from those who labor 
 awkwardly or without any interest, who waste the ma- 
 terial and spoil the tools, up to the intelligent, effective, 
 and enthusiastic men and women, one of whom can do 
 three times as much in a day as his neighbor does. 
 
 The work of distribution. — It often happened in the 
 old times that there would be plenty of food in one 
 
THE DIVISION OF WEALTH 17 
 
 place, while men were starving a hundred miles away. 
 The farmer had no good roads over which to take his 
 produce to market. In a civilized country, thousands of 
 persons do nothing else but help distribute suppKes. 
 The grocers do this on a small scale in every village. 
 The great merchants do it by wholesale in the cities. 
 Their agents travel up and down through the country, 
 buying and selHng. 
 
 Transportation. — Railroads and steamships, together 
 with hosts of teamsters and draymen, distribute "the 
 vast products of the Nation. Our railroads carry more 
 than a billion tons of freight in a year. Express com- 
 panies handle the more precious or perishable goods; 
 the parcel post helps to bring butter and eggs to city 
 homes. The farmer need not now stop working in 
 order to go to market with his wheat. Milhons of 
 passengers must also be carried, chiefly to their work 
 and business, but also for pleasure. An army of men 
 are detailed for conductors and brakemen, who also 
 deserve to share in the wealth of the country. Horses 
 and stables, automobiles and garages, must be kept and 
 more men employed to take care of them. 
 
 Protection. — The duty of protecting against violence 
 and fire cannot be altogether committed to the govern- 
 ment. There must be private watchmen in stores and 
 mills. There must be patrols on the railroads to pre- 
 vent accident. Whoever prevents injury ought to share 
 with those who produce the wealth. The physicians 
 and nurses, who defend us against disease, claim a right- 
 ful share. 
 
 Administration and accounts. — The business of the 
 community needs a certain class of skilled men to manage 
 
1 8 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 and direct. The able management of a first-rate en- 
 gineer, architect, or superintendent may save the labor 
 of hundreds of men, while poor and shiftless management 
 daily causes enormous loss. The administration of 
 business needs also a force of accountants, stenographers, 
 and bookkeepers in offices, factories, banks, and ware- 
 houses. There must be trained heads to superintend 
 accounts and make a multitude of figures tell the truth, 
 or else, through error or fraud, injustice will somewhere 
 be done, or supplies will not be properly distributed. 
 
 Economy; savings. — Economy is the care of values. 
 There are numberless holes or leaks through which 
 wealth is wasted by ignorance or carelessness. Whoever, 
 therefore, saves wealth, whoever stops the leak, whoever 
 keeps what another would lose, becomes a helper to the 
 Nation. A housekeeper, for instance, may save enough 
 food, which another would throw away, to feed one or two 
 mouths. This is the same as producing the food. The 
 larger one's responsibility is, the greater the opportunity 
 for wise economies, saving perhaps billions in value to the 
 Nation and making every one better off. This is con- 
 servation. 
 
 Instruction. — There must be plenty of persons de- 
 tailed to the service of education. Whoever teaches, or 
 waits on the teacher, or learns the facts of nature or 
 history, or makes books, helps make wealth and deserves 
 a share in it. There must also be libraries and museums 
 with their attendants. So too, whoever teaches the 
 laws of faithful conduct, or the principles of a humane 
 religion, so as to help men become more just, patient, 
 brave, and friendly, is a worker and sharer with the direct 
 producers of wealth. 
 
THE DIVISION OF WEALTH 19 
 
 Comfort. — A man who has a comfortable house or 
 lodgings will do more work than if he is badly housed. 
 In a civilized country numerous appHances exist purely 
 for comfort. A large part of woman's work is to promote 
 and increase comfort. In general, whoever can help 
 make men more comfortable at their work, or in their 
 homes, whoever can lessen drudgery and render labor 
 more pleasant, deserves a share in the wealth. 
 
 Recreation. — Every one needs, not merely rest, but 
 sometimes amusement or play. Men who work hard, 
 like children who study, need vacation; they will do 
 more if they have it. Here is the need of another body 
 of workers, some of them to carry on work while the first 
 set have their rest; others to entertain and amuse. 
 Extra cars and steamboats must be run for holidays and 
 picnics; we must have musicians, singers, and actors; 
 there must be hotels and restaurants. The producers 
 must turn out a larger supply of goods so as to share with 
 those who give them recreation. 
 
 Personal and domestic service. — There are persons 
 who need help and service. Some of them are sick or 
 aged, and cannot help themselves. Others are tired or 
 overworked and require temporary assistance. In many 
 households extra help is needed for the little children. 
 There are also those whose time is extremely valuable 
 in behalf of the nation. Would you have a great en- 
 gineer like de Lesseps, a scientist like Darwin, an in- 
 ventor like Edison, a wonderful painter or singer, the 
 President of the United States, wasting his time and 
 strength in sawing wood or shoveling coal ? We are glad 
 to allow certain persons extra service, provided they need 
 it, or by reason of the superior value of their work. 
 
20 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 We grudge this kind of help, however, where it is not 
 needed or deserved. We grudge it to a young person who 
 had better wait on himself than be waited on by another. 
 We grudge it to the indolent, who are harmed by it. In 
 the new colony which we have imagined, in which we 
 should need every skillful hand, we cannot see why an 
 idler or his valet should share in the wealth created by 
 the useful people. 
 
 Luxuries. — There are articles like sweetmeats or 
 jellies of which there are not enough to go around, or at 
 least not for common use. Because they are compara- 
 tively scarce they are more costly than the necessaries or 
 comforts, of which there may be enough for all. Many 
 luxuries depend upon the cultivation of people's fancy or 
 taste, and are not luxuries at all to those whose taste is 
 not cultivated. A gem or a work of art might not be a 
 luxury to a savage. There are luxuries which seem suit- 
 able for a feast, when we entertain friends, which would 
 not be wholesome for ordinary use. There are other 
 luxuries which we set apart for the sick or the aged, the 
 use of which might be enervating for the young and 
 healthy. 
 
 We have spoken of the need of extra personal services, 
 in order to save valuable time or life. There are other 
 luxuries, like travel abroad, or big houses, or horses and 
 carriages, or costly dress, which we cheerfully allow to 
 men and women whose lives are specially useful, who 
 require spacious rooms for study and books, who repre- 
 sent the hospitality of a city to distinguished strangers, 
 or whose services may be prolonged by extra care. In 
 other words, there may. be lives for which the com- 
 munity does well to make special provision and give 
 
THE DIVISION OF WEALTH 2i 
 
 ample salaries, as we give particular care to rare, valuable, 
 or delicate tools. What shall we say, however, of those 
 who are lavish in their use of luxuries, when the neces- 
 saries of Hf e are scarce and costly ? The empire of Rome 
 was on the way to ruin while the rich rioted in luxury and 
 the poor starved. 
 
 The family. — A considerable part of woman's work 
 must be directly for the family, and particularly in the 
 nurture of children. The health, the morals, and the 
 working power of a people are high or low in proportion 
 to the character, the care, and the wisdom of its mothers. 
 Whoever takes care to make the children stronger or 
 better deserves a share of the wealth. The saving of a 
 single dehcate child, like Sir Isaac Newton, may con- 
 tribute to the State more than money can pay for. 
 
 The divrsion of labor. — In a poor or unciviHzed coun- 
 try the same person carries on various kinds of work. 
 The farmer is his own carpenter and blacksmith; spin- 
 ning and weaving go on in the same house. As fast as 
 men learn to help one another, they divide their work 
 into trades and professions, so that each shall do what 
 he can do best. Thus each useful worker fits into his 
 proper place and the total product is increased. 
 
 It is possible to carry this division of labor too far. 
 We do not live to produce wealth, but we produce wealth 
 in order to live better, that is, more happily. It cannot 
 be good for a man to become a machine and to do 
 nothing all day but poKsh the heads of pins. If he does 
 this for part of the day, give him also opportunity to 
 work in his garden and to see his fruit and flowers grow. 
 
 The division of wealth. — We have seen that wealth 
 ought strictly to belong to all who are useful to the 
 
2 2 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 community. How shall we apportion it exactly ? Some 
 men are more useful than others. Some are useful for 
 a time and less useful afterwards. Some have greater 
 needs than others. An artist, a student, an architect 
 has needs different from a farmer. We cannot tell 
 precisely how useful one is as compared with another. 
 A distiller of strong drink may not be useful at all. A 
 skillful teacher may be more useful than anyone knows. 
 Good fortune may increase or lessen the usefulness of 
 the farmer or the fisherman. No tribunal of men is wise 
 enough justly to divide the income or the wealth of a 
 people. It would not be fair to divide equally, for all do 
 not work equally hard, or need the same amount. Even 
 at the same table one eats more than another. It would 
 not be just to let each take what he wishes; for many, 
 like young children, are greedy and wasteful. If a city 
 or country contrived to divide its income equally among 
 its citizens, what should in fairness be done with the 
 people who would immediately flock in from poorer 
 or barbarous countries to share in the wealth of the 
 richer place ? 
 
 The law of supply and demand. — The way in which 
 wealth is now roughly apportioned is according to the 
 rule of supply and demand. If, for example, coal is 
 scarce, and the demand for coal is great, the natural 
 rule is that a man must work more hours, that is, pay 
 more to get his share of the coal. If flour is abundant, 
 less labor wifl buy it and there wifl be more time to pro- 
 vide other things. If carpenters are numerous and 
 farmers are few, the carpenters' pay will be small; that 
 is, they can have less flour or coal, or whatever else they 
 need. If, on the other hand, there are few carpenters, 
 
THE DIVISION OF WEALTH 23 
 
 and every one wants their work, they will have large 
 pay. 
 
 The law of supply and demand works on the play- 
 ground as well as in the market. If there are few boys 
 to play on the school team, even poor players are wel- 
 come; if there are plenty of boys, the poorer players 
 have to stand aside, or make up a team by themselves. 
 
 The law of supply and demand discovers some articles 
 to be more useful or valuable than others, and certain 
 men and women to be more useful than others. It works 
 to bring the less valuable things within reach of every 
 one, but makes the scarcer things, like luxuries, expen- 
 sive. It gives to the many persons whose work is less in 
 demand, or less useful, whose places could readily be 
 filled, less of the wealth, and more of it to those who are 
 specially necessary to create the wealth. Men have not 
 yet found any other rule than this by which to divide 
 wealth. 
 
 The law of supply and demand is a law of things, not 
 of men. Like the fire or the steam, it makes no allow- 
 ance for men's feehngs and needs. The law of gravita- 
 tion does not protect a falhng body from hurt; so the 
 law of supply and demand by itself does not save men 
 from starving. It works out only a rude kind of justice. 
 But mere justice, without sympathy, pity, consideration, 
 and friendHness, is harsh and often cruel. 
 
 " Laissez faire,'' — These French words mean: " Let 
 things take their course," or " Let the law work itself 
 out." Thus hard-headed men say, "Let the rule of 
 supply and demand alone; do not meddle with it." 
 But we do not let a river take its course; we try to con- 
 trol it. We construct airships and fly in the face of 
 
24 RIGHTS ANt> DUTIES OF BUSINESS AND LABOR 
 
 gravitation. So we cannot bear to let the law of supply 
 and demand work out starvation for our neighbors. We 
 have to learn to use and control it. In fact men interfere 
 with it constantly for selfish ends. They pass tariff 
 laws and inheritance laws which prevent the natural 
 working of the law of supply and demand. Government 
 exists to help and protect its weaker members, not to 
 help the strong to get or keep more than their share. 
 The modern commonwealth therefore proposes to supple- 
 ment the law of supply and demand by a watchful 
 humanity. 
 
 As on the ball ground the better and stronger fellows 
 try to make room for the poorer and younger, and to 
 teach them to play better, so it is part of the business of 
 the abler and stronger men in a State to make room for 
 the less capable and intelligent and to enable all to 
 prosper. We shall speak further of supply and demand 
 in another chapter. 
 
CHAPTER IV 
 THE INSTITUTION OF PROPERTY 
 
 We can imagine a people holding their wealth in com- 
 mon, as a club of schoolboys own their bats and balls 
 together. Among a savage people like the North Ameri- 
 can Indians, a considerable part of the wealth is common. 
 The tribe holds the cornfields. When game is taken, all 
 the villagers share; a number of families will often live 
 in the same house. As long as anyone has food, his 
 neighbors, or even strangers, will come and eat. 
 
 Difficulties in holding wealth in common. — There 
 can never be much wealth in a savage tribe. There is 
 little encouragement to enterprising members of the 
 tribe to work hard and lay up stores of provisions, where 
 the lazy and improvident come in freely to devour and 
 waste. Few would build new and better houses, or take 
 the trouble to have a nice garden, or to plant orchards, 
 unless they could hope to enjoy the reward of their work. 
 Men who hold things in common are like children playing 
 with blocks. No child can build up while the others 
 pull down. No considerable work can be carried on 
 where people have no sense of responsibiKty. Now, the 
 best way to learn responsibiKty is to trust to each his 
 own task or ofhce or tools or garden. 
 
 The beginnings of property. — Property is that which 
 is one's own, which no other person has a right to take 
 away. Property begins even among savages, as it begins 
 among children. Thus one's clothes are one's own. It 
 
 25 
 
26 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 would be inconvenient for more than one person to claim 
 the same clothes. So of one's implements and weapons, 
 the axe or the bow and arrows, especially such as one 
 makes himself. So of the ornaments and decorations, 
 the shells or gems, or bits of metal that one finds. 
 " These are mine," says the child, and every one recog- 
 nizes the child's right to them. So of the Arab's horses, 
 which he has reared and tended, or the flocks which he 
 pastures. 
 
 Differences of men in tastes and capacity. — Property 
 grows out of our differences of taste and capacity. One 
 is fonder than another of shells or bright colors, and 
 takes more trouble to collect them. One cares more 
 than another for horses or cattle, and has better success 
 in raising them. One is fond of ornaments, and carves 
 a beautiful handle for his axe or knife, while another does 
 not think the carving worth while. The ornamented 
 axe is the property of the man who had the taste and skill 
 to make it. One man loves books and pictures, and is 
 wilHng to work a longer day to obtain them. They 
 ought to be his, rather than another's who does not care 
 for them. 
 
 Property by earning. — Suppose that a man enjoys 
 working for some one else who will direct his work. A 
 man with a herd of cattle hires him to help take care 
 of them, and pays him in cattle or skins or money. 
 Here is property in what a man earns by his labor or 
 skill. It rightly belongs to the man who has worked for 
 it, and not to others who have not worked. Would it 
 not promote laziness in the men who did not work, if the 
 cattle or the money for which another had worked were 
 shared with them? 
 
THE INSTITUTION OF PROPERTY 27 
 
 Property by exchange. — Suppose the man with the 
 herd of cattle exchanges some of his steers, or some gems 
 that he has found, for a supply of wheat. This, too, is 
 his property. It could not rightly belong to others who 
 sat still and did not help pay for the wheat. It would 
 hurt their character to claim what they had not helped 
 to produce. 
 
 Property by gift or inheritance. — It is surely fair for 
 the man who has wheat or horses to make a gift to his 
 friend or his son. The gift then becomes the property 
 of the friend, and not of anyone else. Much wealth is 
 thus handed down from parents to children, and belongs 
 to the children by inheritance. May it not, however, 
 be possible that our laws give extravagant protection to 
 property of this sort? 
 
 Property by natural genius. — Suppose a man has 
 genius to invent a useful machine, or to write a valuable 
 book, or he has a beautiful voice, or he plays the vioHn. 
 What anyone can make or do is his property in the same 
 way as his eyes or his hands are his own. It would not 
 be right for the family or the Nation to claim this man's 
 genius, or compel him to write books, or to sing for them 
 whenever they pleased. The rewards or the pay which he 
 receives in return for his genius are fairly his. Others 
 have no claim to compel him to divide with them. 
 Nor would it be honorable to make such a claim. On 
 the other hand, would it not be shameful in him to with- 
 hold the gifts of his genius, or to extort unreasonable 
 pay? 
 
 Property by accident or good fortune. — If a fisherman 
 has a lucky catch, we say it is his. The unlucky fisher- 
 men, or those who do not go fishing, have no claim to 
 
28 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 share his good fortune. Let them take their turn at 
 fortune another time. Men enjoy their fishing better, 
 and they are more watchful and daring than they would 
 be if their fish were taken from them and divided among 
 the neighbors. 
 
 Suppose, however, the man finds a gold mine. Ought 
 it wholly to belong to him ? He merely found what he 
 never created. Is it not enough if we make good to him 
 for his lucky discovery, and then take the mine for the 
 use of the State ? Would not a good citizen prefer this 
 disposal of the mine ? 
 
 What, now, if a man has property, such as wheat, or 
 bank stock, which rises suddenly in value. We call this 
 increase his property, although he may have done nothing 
 to earn it. Since he has to bear the loss when his wheat 
 or his stock falls in value, it is right that he should enjoy 
 the exceptional advantage when the value rises. In the 
 long run, he is apt to lose as much as he gains in this way. 
 
 Suppose, however, a man's land rises steadily in value, 
 while he does nothing to add to its usefulness? This 
 happens in a growing town or a new commonwealth. 
 People pour into the town who need land and farms. 
 The land owes its increase of value to the coming of 
 these new people. Does a good citizen wish to grow 
 rich in this lazy way, without giving any service for what 
 he gets, or sharing the increased value with his fellow 
 townsmen ? 
 
 Property by possession. — Suppose one found some of 
 Captain Kidd's treasure : it would be impossible to re- 
 store it to its rightful owners; it would, therefore, be 
 the property of its discoverer rather than of any other 
 man. So, also, in case one had inherited property 
 
THE INSTITUTION OF PROPERTY 29 
 
 from an ancestor, who had made his money by fraud, 
 or by the African slave trade. It would still be the man's 
 property, since no others could rightly claim it. Would 
 it not, however, be fair if the Government levied a heavy 
 tax on such pieces of property as these ? 
 
 Property in land. — Such property as may be removed 
 — clothes, furniture, ornaments, cattle, produce, money, 
 etc. — is called personal property. This includes paper 
 and certificates of property, such as bonds and bank 
 shares. The most important kind of property is land. 
 The land and the buildings upon it constitute '' real 
 estate." What gives anyone a private right to own the 
 land? It is not property that is, a man's own, in the 
 same sense that the things which he has created are 
 his. 
 
 When Robinson Crusoe came to his lonely island, al- 
 though savages sometimes roamed over it, they were not 
 using it, and did not rightly own it. Crusoe accord- 
 ingly took what he needed for pasture or for tillage and 
 garden. Suppose that another ship were wrecked on 
 the island, and its crew came ashore. It would not 
 be fair for him to claim the whole island, and to make 
 them pay him for the wild land ; nor, on the other hand, 
 would it be fair for them to take from him the land 
 that he was using. The land was his to hold and use, 
 but not to own against the welfare of others. 
 
 Suppose, after the best land had been taken up, 
 another company of men came ashore. It seems hard 
 that they should not have as good land as the earlier 
 comers; but it would not be right to demand the 
 fields already occupied, cleared, and improved. When 
 strangers come late to the table at the hotel, it will be 
 
30 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 friendly in those who are seated to move closer and 
 accommodate the later ones, but otherwise must they 
 not wait for the second and possibly poorer table ? 
 
 As long as there is plenty of wild land, as there once 
 was in the United States, there is little difficulty about 
 the ownership of it. So, if every one used his land, 
 having got it fairly in the first place, there might not be 
 any question about its rightful ownership. But suppose 
 the land was acquired in war or by violence; or by 
 injustice, as when the Highland lords in Scotland dispos- 
 sessed the clansmen of land which rightfully belonged to 
 all the tribe; or by a fiction, as when the king of England 
 granted or sold vast lands in America which did not 
 belong to him. 
 
 The laws and custom have allowed men to take up and 
 hold more land than they can use, and to keep it unem- 
 ployed when others need it. This cannot be right. 
 
 When wrongs have been done, it is hard to right them 
 at once without doing more wrong. For the present own- 
 ers of the lands that were once wrongly acquired may 
 have honestly paid for them, and may really use them. 
 We do not wish to take anything which our fellows have 
 paid for without making compensation, or to change the 
 laws about holding and taxing the land, except with 
 regard to the welfare of the whole people. Here is a 
 great question to think about. Is our custom of per- 
 mitting unlimited property in land a public advantage 
 or not? Suppose there is more enterprise and better 
 care of the land when men are free to acquire and use it 
 as they please; even so, it can never be right that in- 
 dividuals shall hold great tracts of land as their exclusive 
 domain, while millions of others have no land. 
 
THE INSTITUTION OF PROPERTY 
 
 31 
 
 The right of eminent domain. — Property in land is 
 in fact always held subject to the needs of the State. 
 Thus, if the government requires a piece of land for 
 public buildings, if a new street or a railroad needs to 
 be laid out through a man's farm, the individual cannot 
 keep his land in the face of a public necessity. He is 
 simply entitled to fair compensation so as to save him 
 from actual loss. 
 
 Corporate and common property. — There is much 
 wealth owned by persons in common. Thus, several 
 farmers may own a threshing-machine or a creamery. 
 A number of persons may unite in establishing a savings 
 bank or a factory; they constitute a corporation. All 
 the people of a town or city own the public buildings 
 and schools, the parks and the streets. Every new- 
 comer who is enrolled as a citizen, and every child born 
 in the city, becomes a sharer in this property on equal 
 terms with the rest. So with the property of the State, 
 in which every citizen is a sharer. So with the property 
 of the Nation, including great tracts of lands and forests 
 and water power in the Territories. Our Government 
 claims such lands as belonging to the American people, 
 and not to people in Asia or Africa, because the land 
 is within our boundaries; as a farmer claims land for 
 which he holds a title. The Nation thus becomes re- 
 sponsible for the care and proper use of this public 
 domain, poHces it, and provides against fire and other 
 kinds of waste. 
 
 All may too become sharers in the knowledge, the 
 inventions, the discoveries, by which each generation 
 inherits the labor and thought of all previous time. The 
 value of this common knowledge is immeasurable. 
 
32 RIGHTS AND, DUTIES OF BUSINESS AND LABOR 
 
 Property and the public interest. — We respect private 
 property for two reasons. One reason is our regard for 
 the individual. We respect his claims to his various be- 
 longings and earnings as we wish our own claims to be 
 considered by him. A second reason is the public good. 
 There will be more work, industry, energy, and thrift, if 
 individuals have freedom to own and use and give away 
 their property, than if we forbid them to have anything 
 of their own. This is the experience of mankind. It is 
 the same in a nation as in a family. The whole family 
 will have more- if each member can make and hold his 
 own things, than if no one can call anything his own. 
 So the community will create and possess more wealth, 
 and all will therefore be likely to be better off, if each is 
 reasonably free to acquire and hold property, than if all 
 the property were held in common. We presume, how- 
 ever, that the individual gets his property honestly and 
 not at the loss of others. To get property honestly 
 means usually to get it by some kind of useful service. 
 
 If we discover any kind of property — turnpikes, 
 bridges, waterworks, or railways — which, in view of the 
 common welfare, individuals or companies had better 
 not continue to hold privately, the individuals, in such 
 case, ought to consent to let the public acquire it, in such 
 a way as to do no injustice to the present owners. 
 
 Responsibility for property. — We have seen in gov- 
 ernment that an official does his work best when he is 
 directly responsible for his conduct. So, a reasonable 
 regard for private property works to make each person 
 responsible for what he has. He learns about values, 
 and what wealth is for, and how much effort it costs to 
 earn a dollar. If the boy has his own clothes and hat, 
 
THE INSTITUTION OF PROPERTY 33 
 
 he and no one else will be bound to take care of them. 
 If he has his allowance, he will be bound to keep account 
 of it, and not to waste or lose it. So if a man has his 
 own property, he learns to use and save it. If he has his 
 own land, he is responsible for the care he takes of it; he 
 will take pleasure in tending and beautifying it; he will 
 be likely to put permanent improvement upon it, in 
 clearing and draining it; he can afford to build a sub- 
 stantial house, where an Arab would only set up a tent. 
 To respect a man's property is thus to make him respon- 
 sible for it; and responsibility develops his character 
 and makes him more of a man. If he is a good steward 
 for his own property, he learns to be a good steward for 
 the pubhc property. Whereas if he is too slovenly to 
 take care of his own, he would be unlikely to take good 
 care of the common property. 
 
CHAPTER V 
 HONEST MONEY 
 
 Men do not trade together long before they invent 
 something to measure the value of wealth. Money is 
 that by which they make such measurement, as they 
 measure distance by the length of a pole, or by a yard- 
 stick. They begin with rude kinds of money, such as 
 wampum or beads or cattle. Thus an American Indian 
 would sell a valuable package of furs for strings of wam- 
 pum. The precious metals, and especially silver and 
 gold, have been the chosen forms of money among 
 civiHzed nations for thousands of years. In early times 
 the money was weighed. Afterwards it was coined; that 
 is, a bit or piece of a certain weight was stamped by the 
 sovereign or the government. 
 
 Changes in the value of money. — It would be con- 
 venient if one kind of metal had always had uniform 
 value. But there is no such metal. The supply of gold 
 or silver, like the supply of other things, varies from one 
 time to another. The opening of new mines and fresh 
 discoveries of precious metals tend to lower their value, 
 as a large harvest lowers the price of wheat. On the 
 other hand, increasing trade causes a demand for more 
 money, and tends to absorb the supply. Ignorant 
 people, as in the Orient, often hoard or hide their 
 money; this money " goes out of circulation." There is 
 a changing demand also for gold and silver for other 
 
 34 
 
HONEST MONEY 35 
 
 purposes besides money, as for articles of ornament or 
 luxury; thus much coin is melted down every year and 
 ceases to be money. For various reasons the same 
 amount or weight of gold or silver will not, therefore, buy 
 as much at one period as at another. Probably a dollar 
 in gold never bought so little food or paid for so little 
 work as now. 
 
 The double or single standard of value. — It has been 
 common to use both gold and silver money, though un- 
 fortunately the two metals vary with respect to each 
 other, like all other values. Thus, gold is estimated to 
 have been worth eleven times as much as silver in the 
 fifteenth century, fifteen times as much at the close of 
 the eighteenth century, and more than eighteen times 
 as much in 1879. There have been further changes since. 
 Thus, the silver in a dollar may not now buy one hundred 
 cents' worth of labor or produce. 
 
 A moral question. — When the Government stamps a 
 coin and makes it " legal tender," that is, good money 
 to pay debts, the stamp is a guarantee or pledge that 
 the coin has as much value as it says on its face. Thus, 
 the gold eagle says, " I carry two hundred and fifty eight 
 grains of gold." But if the Government should make 
 eagles with one-fifth less gold than before, and still mark 
 " ten dollars " on them, they would not tell the truth. 
 Every one who had promised to pay a thousand dollars 
 could use the cheaper coin to pay his creditor. But sup- 
 pose, when the debt is due, the gold coin is a fifth harder 
 to procure than when the promise was given; ought the 
 creditor to be willing to accept fewer dollars? This may 
 happen, without the interference of a government, but 
 by a slow change in conditions of business. 
 
36 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 The money of commerce. — Governments coin money, 
 but the commerce of the world fixes its value. For 
 commerce, in her great markets, like London and New 
 York, where the business of the world meets and is 
 settled, asks of all commodities, and the coins of every 
 nation, What is their worth ? A government may put a 
 false mark on a coin or mix alloy with the metal, but 
 commerce weighs and tests the coin, and will not give 
 more than it is worth. 
 
 For the present, the standard of commerce seems to be 
 gold. This is because the great commercial nations use 
 this metal in settling their accounts. Even when they 
 use silver coinage along with the gold, as a matter of fact, 
 they refer their values to the gold basis. Thus the 
 United States counts values, not in silver dollars, worth 
 in weight of silver less than a dollar, but in gold dollars 
 corresponding to the pound sterhng of London. When 
 money has to be sent back and forth between nations, 
 the gold is more convenient, being less bulky. 
 
 Paper money. — Although a dollar means a certain 
 weight of precious metal, most of the money in use con- 
 sists of paper bills. There is, in fact, risk and inconven- 
 ience in carrying coin, and especially in doing a large 
 business with it. If all the wheat and cotton of the West 
 and South had to be paid for in metallic money, there 
 would be great cost and loss, merely in sending the vast 
 weight of coin thousands of miles. CiviKzed men have 
 therefore invented paper money of various kinds as a 
 substitute for coin. A large part of the paper money in 
 use is issued by the National Government. 
 
 Bank bills. — A bank bill is really a printed promise 
 or order for coin. The bank will pay you the coin if 
 
HONEST MONEY 
 
 37 
 
 you prefer it to the paper. As long as men believe that 
 the bankers will keep their promises, and pay the coin 
 when requested, they do not care for the coin, but find 
 bills more convenient. In order that the people may be 
 protected from loss, it is the custom for the Govern- 
 ment to superintend the banks which issue bills. They 
 are not allowed to issue too many bills ; that is, to make 
 more promises than they are able to keep. A great 
 system of Reserve Banks estabhshed by act of Congress 
 holds the banks together and helps to keep the credit of 
 each bank sound. 
 
 Checks and drafts. — Besides bank bills there are mil- 
 lions of money in private paper orders which are sent by 
 mail, or pass from hand to hand. Thus, a merchant in 
 New York, instead of sending a great roll of bills to pay 
 for lumber or iron, deposits the money in a banlc, and 
 writes a check or order upon the bank for the amount of 
 his debt. If the merchant is honest, the check is the 
 same as money, and another bank in Michigan or Ten- 
 nessee will accept it from the lumber or iron dealer. Or, 
 a merchant in New York, wishing to pay for his goods in 
 Bordeaux, will get a draft or order for so much money 
 from a banker in his own city upon a banker in Paris or 
 London. This draft upon a well-known and honorable 
 bank will be as good as money anywhere in the world 
 where ships go. Thus orders for money become them- 
 selves a kind of money. The orders may even be sent 
 by telegraph over the continent or under the ocean. 
 Thus a bank in Chicago, which is known in Rome or 
 Petrograd, may telegraph an order to pay some American 
 student money which the boy's father had deposited in 
 his bank at home. 
 
38 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 Government and paper money. — The Government of 
 the United States borrowed on an enormous scale to pay 
 the expenses of the Civil War. Besides other methods 
 of borrowing, hundreds of millions of dollars in bills were 
 issued. These bills were the promises or pledges of the 
 Government to pay as many dollars in coin as was printed 
 on the face of the bill. The bills were used to pay for 
 supplies and the wages of soldiers. The Government, 
 however, was not able for a time to keep its promises and 
 to pay specie, that is, the coined money of commerce, to 
 merchants and others who wanted it. On the contrary, 
 the quantity of paper notes was so great that some feared 
 lest, as in the case of the continental currency of the 
 Revolutionary War, the bills would never be paid. It 
 happened finally that almost three paper dollars were 
 required to get the value of one gold dollar. The value 
 of the paper dollar varied with every victory or defeat of 
 the national arms. The gold and silver were hoarded 
 away or sent abroad to pay the merchant's debts. 
 This was because the paper dollar no longer told the 
 truth. 
 
 Specie payments. — After the Civil War, as soon as 
 confidence was restored that the Government could keep 
 its promises, the paper money rose in value. The yard 
 of cloth that had sold for nearly three dollars could now 
 be had for, perhaps, a dollar and a quarter. At last the 
 Government resolved to make the paper dollar tell the 
 truth again. It was announced that anyone who wished 
 might have gold coin at the Treasury in exchange for the 
 paper bills. But very few persons now desired to draw 
 the bulky gold, since the paper dollar at once became as 
 good as the gold to buy the yard of cloth. 
 
HONEST MONEY 39 
 
 Gold and silver certificates. — Besides the notes of the 
 Government, or its promises to pay, other bills or certifi- 
 cates have been issued which entitle the holder to so many 
 gold dollars, and again another class which entitle the 
 holder to so many silver dollars, deposited in the Treasury 
 vaults. These certificates are also as good as money, and 
 much more convenient. 
 
 A national danger. — Our Government has, first, gold 
 dollars which correspond to the money of commerce, 
 containing the precise value marked on the face of them ; 
 second, silver dollars, stamped by the Government, but 
 containing less than their value; third, silver and nickel 
 currency, used merely for convenience, but not contain- 
 ing nearly the worth stamped upon it ; and, fourth, paper 
 notes and certificates, worth nothing in themselves, but 
 guaranteed by the wealth and honor of the Nation. 
 These different kinds of money circulate together as long 
 as the Government honestly keeps in its vaults sufficient 
 gold coin — the money of commerce — to enable every 
 one who has silver or paper dollars to come and get an 
 equal number of gold dollars, if he needs them, to pay for 
 goods abroad. If, however, at any time, the Govern- 
 ment should refuse to give the merchant the real value in 
 gold in exchange for the silver or the paper, the same 
 thing would happen as in the Civil War : the silver dollar 
 and the paper would cease to tell the truth; the yard of 
 cloth would rise in price; all values would change. 
 
 It would be precisely as if the Government, like the 
 despots of old times, clipped the coin or mixed alloy with 
 it, so as to make a new dollar of less worth. The true 
 dollars, such as the commerce of the world buys and sells 
 with, part company with the false or debased dollars, and 
 
40 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 disappear from the hands of the people whose govern- 
 ment does not keep its faith or make its money tell the 
 truth. 
 
 We see here how war tends to unsettle values. While 
 multitudes of men are drafted away from the usual in- 
 dustries, the labor of others becomes scarce and prices 
 rise. While immense sums of money are borrowed and 
 spent, the dollar cannot buy as much as before. 
 
CHAPTER VI 
 CAPITAL, CREDIT, AND INTEREST 
 
 Suppose a number of men go on a fishing voyage. 
 It is not enough to possess skill and strength; they need 
 boats, fishing tackle, and a stock of provisions to live 
 on while they are gone. The wealth required to begin 
 an enterprise, or to carry work through, is called capital. 
 Thus a farmer, if his land were given him, would still need 
 farming tools, cattle, and provisions enough to support 
 him till he got his first harvest. He would presently 
 need capital to build a new barn. In the case of a great 
 enterprise, a factory or a railroad, an enormous capital 
 must often be laid out to purchase materials and hire the 
 labor of a large body of men before any return is made to 
 those who expend their capital. 
 
 A poor or barbarous people make Httle progress, be- 
 cause they have no wealth or capital with which to buy 
 material and tools or to feed and clothe workmen. 
 Where every one is poor, men have to supply their own 
 daily necessities. There must at least be an accumula- 
 tion of food before great works can be undertaken. 
 
 The accumulation of capital. — Whoever produces or 
 saves more than he consumes accumulates capital; for 
 example, a farmer may produce food enough for a dozen 
 families, or a shoemaker can make shoes enough for 
 a neighborhood. Wherever men labor, their industry 
 accumulates capital, or produces and lays up a supply of 
 produce or material to be drawn upon for further work. 
 
 41 
 
42 RIGHTS AND DUTIES OF BUSINESS AND LABOR' 
 
 In the most simple society, the harvest of each year is 
 the capital to provide against the needs of another year. 
 
 The use of machinery, and especially of steam, water, 
 and electric power, enables a few workmen to do the 
 work of armies of men, and so to accumulate capital on 
 a grand scale. 
 
 Credit. — A man does not always need to have accu- 
 mulated capital himself. If he can work and is honest, 
 he may find some one willing to make him a certain 
 advance of money or provisions on the expectation that 
 he will do work or business enough to repay. The 
 amount of this advance is called his credit, and depends 
 upon his ability and character. If he is a skillful fisher- 
 man, he may find some one who will lend him a boat. If 
 he has at the same time a piece of property, a house, or a 
 lot of land, his credit will be greater; some one may trust 
 him with money to build a larger boat. Perhaps an in- 
 dustrious shoemaker, who has saved a thousand dollars, 
 thus becomes a silent partner with the fisherman, and 
 both get on better by this cooperation. 
 
 So, a farmer owning his land and buildings may not 
 only work his farm, but through his credit obtain addi- 
 tional capital to make improvements and increase his 
 products. Or the owner of a mill may go to the bank 
 and get money to buy raw material or to expend in wages 
 to his men till his returns come back from the sale of his 
 goods. All this is made possible by credit, or the trust 
 which men repose in one another's good faith in keeping 
 their promises. The more honest men are, the more 
 credit there is and the more work can be done. 
 
 Corporations. — Many individuals, each with small 
 earnings or savings, often combine together, and trust 
 
CAPITAL, CREDIT, AND INTEREST 43 
 
 their capital to directors or trustees who manage for all as 
 they would for themselves. Thus masses of capital may 
 be employed to better advantage than a small capital, 
 in using machinery and paying many workmen, so as to 
 produce more and to effect greater economy. Railroads, 
 gas companies, cotton mills, savings banks, and many 
 other corporations are formed by this kind of union 
 among many individuals. These corporations for mass- 
 ing and using capital are only made possible where there 
 is a considerable number of able and honorable men, who 
 can be trusted to hold and manage the money of others. 
 
 Profits. — In most kinds of industry — in farming, for 
 example — our labor produces more than its bare equiv- 
 alent. There is a natural increase besides the cost of 
 production. We call this surplus the profit. It arises 
 from our putting into the enterprise something more than 
 the mediocre average of our energy, brains, and skill. It 
 is the encouragement which nature gives when man be- 
 gins to work. Thus a farmer ought to be better off at 
 the end of the year than he was at the beginning. There 
 will be an increase of cattle and sheep and fowls. The 
 amount of this increase will depend, not only upon his 
 skill and intelligence, but also upon the capital which he 
 has at his disposal. If he has money enough, he can 
 employ extra labor to drain his boggy land; he c^n fer- 
 tilize his fields; he can buy machinery, and harvest larger 
 crops. Nature, by showers and sunshine and the fertile 
 soil, will always add something to encourage his enter- 
 prise; on the other hand, if he is lazy and dull, nature will 
 prod him with various discomforts to urge him to labor 
 and to learn. 
 
 So in other kinds of industry. Besides barely enough 
 
44 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 to support life, the patient and skillful fisherman will 
 bear home a profit which he can dispose of to enable him 
 to add to his capital. If he already has capital enough to 
 buy the best sails and fishing tackle, and intelligence to 
 direct a number of men, he can increase the profits of 
 his whole crew. 
 
 The merchant, likewise, who contrives to bring sup- 
 plies of goods to the points where men need them most — ■ 
 from the farms where the owners have been known to 
 burn the corn for fuel to the towns where, without the 
 corn, people would starve — will get more than the bare 
 cost of his business and his living. He will " make 
 money " in helping others to make money. 
 
 In short, the whole community, if intelligent and in- 
 dustrious, will do better than merely to live; it will be 
 enriched by the increase or profit which nature, cooper- 
 ating with man, gives for labor wisely expended. This 
 profit will be larger in proportion to the skill, education, 
 patience, industry, and integrity of the people. It will 
 tend to come to those who show these qualities, but will 
 be reduced wherever the people are dull, dishonest, shift- 
 less, or lazy. 
 
 Rent and interest. — Suppose that a skillful young 
 fisherman borrows a boat and tackle of a widow whose 
 husband has been drowned, and goes fishing. When he 
 returns, he shares his catch of fish with the men who went 
 with him, and with the woman who owns the boat. This 
 is her interest in the fishing, on account of her boat. This 
 would be the simplest form of interest. It would be the 
 same, in fact, if the fisherman, instead of paying a share 
 of his catch in fish, engaged to pay her a fixed sum for the 
 use of the boat. 
 
CAPITAL, CREDIT, AND INTEREST 45 
 
 It would still be the same in case the fisherman, in- 
 stead of hiring the boat, borrowed from the widow the 
 value of the boat in money. The young fisherman could 
 then buy a boat for himself, and pay her for the use of her 
 money the same sum which he might have paid for the 
 boat. 
 
 Likewise, if the widow has a farm which her husband 
 has cleared and drained, or which he has paid for out of 
 his earnings, some one might like to borrow the farm, and 
 pay her a share of his harvest. He might thus do better 
 for himself than if he took up wild land. Or he might 
 borrow in another way. The woman might have sold 
 the farm outright for money; he could then borrow the 
 money, and buy a farm, and pay her so much every year 
 for the use of the money, instead of paying for the use 
 of the land. 
 
 By the use of the woman's capital, the fisherman or 
 the farmer increases his product; without it he could 
 not have made so much. He, therefore, in fairness, 
 shares with the owner of the capital. This bargain 
 is good for both parties in it. If one borrows a thing, 
 a piece of property, or land, the share that he gives 
 for its use is called the rent. But if he borrows money, 
 the return upon it is called interest. We have seen that 
 money is practically an order to pay for things or prop- 
 erty. The borrower of money really borrows the things, 
 whether boats, supplies, provisions, or materials, that he 
 purchases with the money. The farmer who borrows 
 money to improve his barn or buy stock really borrows to 
 buy fertilizers or cattle. The money is merely a conven- 
 ience in making the exchanges. When at the end of the 
 year he realizes larger harvests on account of these im- 
 
46 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 provements, he owes a share as interest to the person 
 whose labor or whose saving has enabled him to have the 
 use of the money. 
 
 So with the mill that has borrowed money to buy cot- 
 ton to make into cloth. Part of the returns must go to 
 the bank, that is, to the persons who, instead of spending 
 their money, saved it and put it into a bank to be used as 
 capital for new enterprises. Do not these bank deposi- 
 tors deserve their share of the products of the mills, as well 
 as the workmen who furnished the labor, or the superin- 
 tendent who managed with the use of his brains to make 
 the mill a success ? 
 
 The rate of interest. — It might be agreed that the in- 
 terest or rent should depend upon the amount of the 
 product, whether more or less, of the fishing-boat or tlie 
 farm. The lender should have a certain share, large or 
 small, and the workman another share, and the manager 
 who borrowed the capital still another. This is done in 
 some cases. All then share in the risks and in the profits. 
 Some years they would make good profits; again they 
 might lose. 
 
 But suppose the man who lends the boat or the money 
 prefers to take a small fixed rent or interest rather than 
 to share in the risks of the business, and sometimes fail 
 to get anything. This is usually the case. A savings 
 bank lends its money at, for instance, six dollars a year 
 for every hundred. The borrower gives security, per- 
 haps a mortgage upon his house, and takes all the risks. 
 The bank then gets a regular return for its money to 
 divide among the persons who have trusted their savings 
 to its care. The borrower has all the profits, after paying 
 his interest and other costs. 
 
CAPITAL, CREDIT, AND INTEREST 47 
 
 How interest is fixed. — The amount of interest upon 
 money, or the rent of capital, varies Hke all other prices. 
 It depends upon the amount of money to be lent, whether 
 it is plenty or scarce; upon the times, whether they are 
 peaceful or stormy; upon the demand for money, whether 
 few or many want to borrow; upon the security that can 
 be given, whether there is much or Httle risk of repay- 
 ment; upon the prosperity of the community where the 
 money is used, whether the profits of business there are 
 large or small. Thus the same money which will only 
 bring three to five per cent when loaned to the Govern- 
 ment might bring six per cent or more if loaned to a 
 private person; or, sent to a new growing country like 
 the State of Washington, it might get ten per cent or 
 more. If the lender shares in the risk, he also shares 
 justly in the larger profits. If he wishes perfect security, 
 and the borrower takes all the chances, he must be con- 
 tent with a small regular share. In the long run the 
 people who take risks, expecting to "make money" 
 without labor or trouble, make less than their neighbors 
 who put their money into the savings banks. 
 
 In general, and except in war, the rate of interest upon 
 good security tends to diminish. This is because civih- 
 zation produces such large capital and vast credit that 
 reasonable enterprises can get what they need. 
 
 If interest is low, other things are Hkely to be low; and 
 no one has to pay so much for hiring his house or for the 
 cost of Uving. But if the interest is high, every one who 
 has a dollar in the savings bank or a single share in a 
 corporation shares in the increase. This is because the 
 community is linked together, so that whatever affects 
 the whole affects each one. 
 
48 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 Usury. — Interest means the price paid for the use of 
 capital ; but it once had a bad name — usury. For in old 
 times, before the science of money was understood, many 
 thought it wrong to exact interest upon money, though 
 no one saw any harm in taking interest as rent for property 
 or land or boats. Money was scarce, and many lenders 
 were extortionate, and took cruel advantage of their 
 debtors. Laws were therefore often passed, forbidding 
 more than a certain rate of interest. To take higher 
 interest than the law allowed was called usury. But 
 these laws, like the laws which governments have passed 
 to fix the prices of other things, did Httle good. In some 
 States such laws may still remain, though they are con- 
 stantly disregarded. 
 
 The fact is, that all prices of money, land, labor, or 
 products depend upon ''the law of supply and demand." 
 Ten per cent may be as fair interest on the Pacific coast, 
 where the demand is great, as five per cent is in New 
 York. In New York, too, money may be better worth 
 six or seven per cent in a good year of business than five 
 per cent in a very dull year. Neither can any legislature 
 compel a man to lend his money or his land unless a fair 
 return is offered him. 
 
 Foolish borrowing. — Wise borrowing proposes some 
 increase of useful effort. Like honest labor, it produces 
 for the community more than would otherwise be gained. 
 But what if the man borrows for things thsit he cannot 
 afford — an automobile for pleasure, or diamonds for his 
 wife, or to speculate with? What if a man borrows, not 
 to increase the efficiency of his work, but to spend for 
 his living expenses? What if he borrows to relieve 
 sickness or poverty? The truth is that most of us had 
 
CAPITAL, CREDIT, AND INTEREST 49 
 
 better pay as we go, and lay by a little if possible, so as 
 not to need to borrow and to be able on occasion to help 
 a friend. 
 
 Farmers' banks. — An interesting plan enables farmers 
 to use capital upon their farms. The National Govern- 
 ment provides for the estabhshment of banks in different 
 sections of the country and lends its credit to start them. 
 Investors of money are given the opportunity, safely 
 guarded, to put their savings into these banks. The 
 farmers give security for the amount of the loans and the 
 money helps them to raise more produce than they 
 otherwise could. The farmers of a neighborhood are 
 associated together in procuring and using this money. 
 They are given time in which to repay their loans and 
 they pay a lower interest rate than if each farmer 
 by himself had to find a money lender. This is what 
 cooperation does to help people to help themselves. In 
 many countries, for instance, in Denmark, there are 
 immense systems of such cooperation. 
 
CHAPTER VII 
 LABOR AND COMPETITION 
 
 The law of life. — The general rule is that men must 
 work for their living. The amount of work required may 
 vary with men's wants, or with the cHmate in which they 
 Hve. A native of Saon^ may get all the breadfruit and 
 cocoanuts that he needs with little effort. But the 
 higher the standard of civilization, the m^ore things men 
 want; and the more labor therefore becomes necessary. 
 
 The use of machinery, with the forces of steam and 
 electricity, does not serve to change the general law. 
 The more men use machines, the more their needs in- 
 crease, so that the demand for labor still continues. 
 Thus, when cloth could only be woven slowly by hand, 
 men could have little cloth. But now that water power 
 or steam can be made to weave cloth, every one wants so 
 much more, that men and women still have to work for 
 their clothing. 
 
 The law that men must work for their living at first 
 seems severe. Is it not, however, a kindly law? Thus 
 on the playground, those who join in the play not only 
 are stronger, but surely enjoy more than those who only 
 look on and watch the others. The physicians tell us 
 that this is the law of health. 
 
 Labor and wages. — If any large group of people, the 
 iron founders, for instance, stop working, the supply of 
 iron for the Nation is cut down at once. Every one pres- 
 ently suffers. On the contrary, the larger the number of 
 
 so 
 
LABOR AND COMPETITION 5 1 
 
 the workers is, the more regularly they work, the more 
 they accomplish, and the fewer the drones in the 
 hive, the greater is the product, and the more on 
 the whole every one has; wages therefore tend to rise. 
 It is the same with a nation as it is with a farmer's 
 household. If all his children work they have produce 
 to sell and grow prosperous. Why are wages higher in 
 the United States than in Europe? It is because our 
 product is greater. 
 
 Labor and wealth. — Moreover, besides the increase of 
 men's needs and wants, there is a constant increase in 
 the number of the population, requiring new lands to be 
 opened, new houses to be built, and new mills to saw 
 lumber or weave cloth. If all the wealth of the richest 
 nation were divided equally, it would last but a short 
 time before men would have to go to work to make more 
 wealth. The richest nation is only in the condition of a 
 farmer who has on hand a rather better supply of tools, 
 stock, and farm buildings than his neighbor. But be- 
 cause he has this better supply, more care is required to 
 keep it in order, and more labor is needed to use it. 
 Thus, though the richer farmer lives better than his 
 slovenly neighbor, he must still work equally hard or 
 even harder, like the winning crew in a race. 
 
 A common fallacy. — It is sometimes imagined that it 
 would be better for those who work if their numbers could 
 be restricted. They fancy that they could then have 
 better pay. Or it is thought that the workmen would be 
 better off if they worked fewer hours a day. There are 
 exceptional cases where this seems true for a while. Our 
 point here is that the fewer the laborers are and the less 
 they work, the less must be the production of the Nation. 
 
52 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 If only half as many men make shoes, there will be fewer 
 shoes for all. If ten milHon men work, and five milHon 
 are idle, the latter will have to be fed by the others, with 
 less food to go around. In short, the more intelligent 
 and industrious the workmen are and the greater the 
 number who are employed, the greater the product is 
 which all at last share. 
 
 The reduction of the hours of labor. — On the other 
 hand, there is a limit beyond which men do not work 
 efficiently. They will not work to advantage if wearied, 
 oppressed, or discontented. Free men will do more 
 work in eight hours, putting their good will or interest 
 into their work, than in ten or twelve hours of slavish 
 labor. Of course there are times, as in the harvest, when 
 men must rush things and rest afterwards. 
 
 The general duty of labor. — It follows that every one 
 must contribute his share somehow toward the sum of 
 the product of the Nation. For if anyone only eats and 
 drinks and enjoys, but does not labor, he makes the Na- 
 tion poorer. To work is not merely a necessity, it is 
 an honorable obligation. That a man is rich gives him 
 no right to consume or lessen the wealth of the Nation. 
 On the contrary, his wealth, like the richer farmer's tools 
 and stock, is an added reason why he should do a larger 
 share for the good of all. 
 
 Different kinds of laborers. — The word laborer prop- 
 erly covers all kinds of service in behalf of the household 
 or the community. In the larger sense not only the 
 miner, the stevedore, the farmer, or the blacksmith, but 
 also the clerk, the bookkeeper, the teacher, the super- 
 intendent of the mill, the president of the bank, the 
 trustees of property, are laborers or workmen. Socrates 
 
LABOR AND COMPETITION 53 
 
 the philosopher, and Tennyson the poet, Macaulay the 
 historian, and Darwin the naturahst, all have each added 
 in his way to the resources of mankind. Even a child who 
 shows an obHging temper makes the work of older people 
 easier, like the oiler who keeps the machinery running. 
 
 Disturbances in industry. — It is impossible to divide 
 the labor of the Nation exactly, so that each shall do his 
 fair share. Some are more willing or more capable than 
 others. Some are quicker in finding their proper places. 
 Some like to work and others do not. If any part of the 
 body fails to take its share of the burden, strain comes 
 upon the rest. Moreover, if the body is exposed to 
 sudden change, the circulation is checked and one suffers 
 a chill. So, in a great industrial society, any sudden 
 change of conditions is hkely to cause disturbance. 
 Thus there are frequent changes in the demands for 
 labor. There may be a sudden need of wheat, or of boots 
 and shoes, and many will start wheat-farms, or go into 
 the shoe shops, till presently there is more wheat or there 
 are more boots and shoes than are called for at once. 
 Every invention or improvement, however beneficial in 
 the long run, is apt for a time to cause disturbance and 
 inconvenience. Thus, if the farmer buys a reaping- 
 machine, he will not need to hire so many men, who 
 may not at first find a new employment. The use of 
 steam has multiplied the power of the world, but it has 
 also caused disturbance to the old-fashioned industries 
 worked by hand. 
 
 The requirements of commerce also vary. A scarcity 
 of food in Europe may force a demand on the American 
 food supply, or the change of a foreign tariff may shut out 
 our goods from the use of millions of people. 
 
54 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 There may be too many men trying to get a living in 
 the cities, where expenses are greater than in the country. 
 Or there may be more lawyers or architects than the 
 Nation now needs, and the extra lawyers must find some- 
 thing else to do. This irregularity in employment causes 
 inconvenience and trouble and often serious suffering. 
 
 Business crises. — It is said that '' there are tides in 
 the affairs of men." So business and work have their 
 high and low tides. This is partly because men have not 
 yet learned to see far enough ahead to provide the exact 
 amount of wheat, iron, and other materials that they 
 need. There are not Hkely to be too many people to 
 work, but there may be too many workers in certain in- 
 dustries and too few in others. The law of supply and 
 demand acts in such cases to cut down profits and wages, 
 and to turn men from employments where they are less 
 needed to those where they are more needed. Mean- 
 while, during the process of change, work stops, men are 
 thrown out of employment, less wealth is created, busi- 
 ness becomes dull, merchants fail, the mills which are not 
 well managed go into bankruptcy, and new enterprises 
 are checked. Thus, whenever men work blindly in any 
 direction, a period of reaction is likely to set in till the 
 balance is readjusted; as when one uses certain muscles 
 to exhaustion those muscles must be rested and other 
 muscles brought into play. 
 
 The free system. — Whenever men are free to get a 
 living or to pursue wealth as each chooses, the usual 
 result is competition. Competition really means free 
 industry. Thus, one may choose his trade or profes- 
 sion, or if he does not like it, he may change. He is free 
 to work hard or not; he may make his own bargains and 
 
LABOR AND COMPETITION 55 
 
 set his price upon the value of his labor or his products. 
 He is free to acquire property to any extent, or to part 
 with it. He is free to invest his money wherever he 
 thinks that it will bring him the largest return, in the 
 land or on the sea; or to hoard it, if he can afford to be so 
 foolish. If anyone by working harder, or by his skill, 
 or by intelligence, can make better wages than his neigh- 
 bor, he is free to live better or he can Hve simply without 
 working so hard. His neighbor is free to follow his ex- 
 ample and to learn to excel him in turn. If one has 
 genius, as Rothschild had, for handling and managing 
 money, he is free to exercise this genius, as another is free 
 to handle his tools. 
 
 The law of free industry. — Anyone is free to work 
 when and where he chooses and at such terms as he can 
 make for himself, provided he does not interfere with 
 other men's rights. He is not free to snatch what belongs 
 to them, or, being stronger, to push them aside, or trip 
 them up, or hinder their freedom. He must not interfere 
 with them by force, nor oppress them by fraud, or by 
 getting laws passed to the disadvantage of others; the 
 rule of the playground that all the boys are free to play 
 as they like, only so as not to interfere with each other, 
 holds good for industry. 
 
 The good side of freedom. — The freer men are to 
 choose their work and to use and enjoy its results, the 
 more work they are willing and happy to do. Their 
 energy and enterprise are called out, their wits are 
 sharpened, their hopes are stirred. At its best work 
 becomes like play, an exercise of skill and power. If any- 
 one wins unusual success, others are encouraged to try 
 the better methods. If anyone enjoys his money, his 
 
S6 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 neighbors are urged to work harder, that they and their 
 children may have the same enjoyment. Thus every 
 one accomplishes more work in a condition of freedom, 
 and the Nation is richer than if bad customs, like slavery 
 and caste, or hard and fast rules fetter and restrict men 
 and compel them to work. Do not children enjoy their 
 sports better when left to themselves, than they do when 
 the teacher meddles and makes rules for them ? 
 
 Wherever men are really free to work, to earn, and to 
 save or use their earnings as they please, the capable, the 
 industrious, the temperate, and the intelhgent tend to 
 rise to prosperity. A considerable and increasing class 
 become '' capitalists " by the value of their houses or 
 shops, or the amount of money in the bank. The skillful 
 are always in demand, and generally at good wages. 
 
 The moral side. — Moreover, when men labor, earn, 
 and save or spend with freedom, they develop patience, 
 self-reliance, self-sacrifice, venturesomeness, integrity, re- 
 spect for others' rights, generosity. The slaves of the 
 kindest master could not develop these qualities. If a 
 committee or government of the wisest men could man- 
 age and make rules for the rest, and provide for every 
 one's necessities, men would not learn the sterling qual- 
 ities of manhood so well as by being thrown upon their 
 own resources. In fact, the strongest characters have 
 been worked out through patient effort amid difficult 
 circumstances. 
 
 Certain evils of the free system. — If some are free 
 to work hard and earn more, others must be free to 
 work less and earn little; as, if boys race, some will come 
 in behind. What if they become jealous and suspicious 
 of the more successful ones, and, instead of trying again 
 
LABOR AND COMPETITION 57 
 
 and doing better, grow discontented and sulky? But 
 the worst trouble is that the energetic and fortunate 
 people too frequently grow hard, proud, and selfish. 
 Sometimes they are the beneficiaries of privileges and 
 monopolies which they fear to lose. Even in a free 
 land the laws do not secure complete freedom. No 
 man is quite free as long as he is dependent upon another 
 man, his employer, to secure work and a Kving for his 
 family. 
 
 The men at the bottom. — We have learned in ordi- 
 nary times to feed and clothe the population. We do not 
 mean to let anyone starve in the face of plenty. But 
 the risk of occasional suffering still remains, especially 
 among the unskillful and the newcomers who cannot 
 speak our language. They cannot find emplo3anent as 
 fast as they come to the country; they accept work for 
 a meager pittance; the wages of others are kept down. 
 This is because men are free to seek a Hving where they 
 please, but not free enough to get away at once from 
 where they are not needed to another place where their 
 services would be in demand. If they were not free to 
 come and go, fewer could crowd into the city. But if 
 men choose to be free, they must sometimes bear the 
 consequences of their freedom. Would any system 
 work well if the people remained ignorant and careless ? 
 
 Two kinds of competition. — There are two kinds of 
 competition. One is that of brutes that struggle with 
 each other. So there are brutal or thoughtless men, 
 who try to get as much as they can for themselves by 
 pushing and crowding the others. They seek, like robber 
 barons, to make their living at the expense, or by the 
 losS; or out of the labor, of others. We have plenty of 
 
58 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 laws to restrain oppression and fraud, but good laws are 
 of no use unless the people are behind them. Better 
 than laws is a new public opinion against men who 
 seek to live by getting away the property of others. 
 The boys and girls in our schools can help in making 
 this new pubHc opinion. 
 
 The competition of men : emulation. ^- The competi- 
 tion of brutes is to get away what the others possess. 
 The competition of men is to do more and better work; 
 it is to economize material and power; it is to add to 
 the sum of human wealth and enjoyment. In the com- 
 petition of men every one in the end becomes better off; 
 some excel, while the level is raised and the opportuni- 
 ties of all are enlarged. The object of intelKgent men 
 now is not to snatch the food from the table, but to 
 heap the table with larger and more varied suppHes. 
 
CHAPTER VIII 
 THE GRIEVANCES OF THE POOR 
 
 Two extremes in society. — The condition of man- 
 kind in barbarous times was that of constant peril from 
 disease and famine. Men frequently did not know 
 where their bread would come from. Our present civil- 
 ization has not yet raised all men above the chronic 
 dangers in which our forefathers lived. There are 
 many, especially in the cities, whose meager wages 
 ba:rely keep them from actual want. They cannot 
 always get work. Frequently their wages are cut 
 down, or they are thrown suddenly out of employment. 
 
 There are thus two extremes in society — those who 
 live in luxury and have more than they need or deserve, 
 and others whose toil seems hopeless. Justice and 
 humanity alike raise the question, how this unequal 
 distribution of wealth can be kept from working cruelty. 
 
 Social discontent. — In most industrial countries 
 many people are bitterly discontented about these things. 
 These are the socialists; they believe that something 
 must be wrong in a community which allows a few to 
 grow rich while many remain in abject want. 
 
 The discontented are divided into various classes. 
 Some of them have suffered so cruelly from bad govern- 
 ment, as in Russia, that they favor revolution. Some, 
 the anarchists, do not beHeve in governments with armies 
 and poHce to enforce laws, but think that men would 
 behave better if they were free of the control of the State. 
 
 59 
 
6o RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 Some go to the opposite extreme, and believe that the 
 government should own all the capital, and furnish every 
 one with work and suppKes. Others think it a great 
 abuse that individuals can own all the land and make 
 others pay rent for it. They would have the land so 
 held by the community that no one could have land 
 which he did not use. Every one should then pay a 
 fair rent to the government, that is, to all the people, 
 to be expended for the benefit of all. Some people 
 wish to fix the tax system (the single tax) so that every 
 one can enjoy only as much land as he would actually 
 use; for this use he should pay rent to the State. 
 
 Many also claim that the government should own the 
 railroads, the telegraph, the gas and water-works, and 
 perhaps also the mines and factories, and other prop- 
 erty, now worked by great companies. The govern- 
 ment could then furnish employment to laborers with 
 just wages and fair hours of work. 
 
 In general, whoever wishes to add to the kinds of 
 wealth which the people own together is so far a social- 
 ist. In a free and civihzed country most men are partly 
 socialists, inasmuch as they favor common schools, 
 parks, public buildings, sewage, water- works, and the 
 post office, and, in fact, a common government. 
 
 The men and the system. — One cause of men's pov- 
 erty and distress lies in the fact that the people who 
 make up society are still very imperfect. The body 
 cannot be sound and well unless the parts are sound. 
 
 The inefficient. — There is everywhere a class of 
 ne'er-do-well people, feeble in body or mind, and lacking 
 in energy or skill. Their misfortune is not so much 
 that they are poor, as that they lack health and 
 
THE GRIEVANCES OF THE POOR 6 1 
 
 energy. If many of a people are inefficient, as in cer- 
 tain tribes of savages, the whole community must be 
 poor. 
 
 The ignorant. — What if a large proportion of people 
 are ignorant? The ignorant not only cannot earn or 
 produce as much as the intelligent, but they also waste 
 food, fuel, money, and Kfe itself in a thousand ways. 
 If an ignorant people or a single ignorant household 
 were given the best arrangements possible, they would 
 not prosper. 
 
 The idle. — How many idle or lazy people do we 
 know, who do not care to study or read, or even to play, 
 who prefer to watch others play, who do not desire to 
 work? The more of these there are, the harder must 
 others work. However excellent our social arrange- 
 ments were, the idle people would drag upon us. Their 
 needs now urge them to work at least part of the time. 
 Should we use the arm of the law and compel them to 
 work, or should we let them Hve on the community? 
 Neither course would be good for them or make them 
 happy. 
 
 The unfortunate. — There are many who, without 
 being imbecile or inefficient, are rendered helpless 
 through sickness, accidents, losses, and the death of 
 friends. Among these are widows and orphans who 
 may be permanently unable to earn their living. All 
 these lower the average of the prosperity of the commu- 
 nity. Others must cheerfully work the harder in order 
 to make good for their misfortunes. No mere change 
 in the arrangement of property will remove this class. 
 But we can largely reduce their number by preventing 
 and removing the causes of accidents and diseases. 
 
62 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 The vicious. — Besides the cost of prisons and police, 
 the labor of the community has to bear the constant 
 burden of the vices which waste property, destroy health, 
 and ruin character. Drunkenness alone has hitherto 
 been the cause of a large proportion of the poverty. 
 
 On the other hand, vice, and especially drunkenness 
 and idleness, prevail wherever there is injustice or op- 
 pression; no one behaves at his best unless he beheves 
 in the fairness of his government, his employer, his 
 teacher. 
 
 A problem. — We who make up human society are 
 more or less imperfect, more or less educated, more or 
 less successful or happy. How can any social plan 
 work well till we, the individuals, are better? How 
 can a crew win a prize in the best of boats, unless the 
 rowers are strong and skillful? Can we contrive any 
 improvement by which all can possess and enjoy more? 
 
 The objects of society. — One object is material, that 
 is, an abundant supply of all sorts of products. Does 
 anyone think we have a sufhcient supply now? Sup- 
 pose we have enough now to give an average of three 
 dollars a day for each person? How can we all have 
 more? One way is to contrive to produce more, either 
 by working harder, or by better management, or (what 
 comes to the same thing) by good care not to waste 
 our dollars when we get them. 
 
 Justice. — We organize and make laws to secure as 
 much justice as possible. Can we ever get perfect 
 justice? Should we be content if we got it? Who 
 knows that his father or his employer gives him his 
 exact dues? Suppose a boy thinks his lesson worth 
 more than the teacher marked him. Suppose a man 
 
THE GRIEVANCES OF THE POOR 63 
 
 values his work too much, Can we ever make such 
 men contented? Can society, that is, all of us together, 
 do this better than teachers or parents do it? Some 
 now have more and others less than they deserve. 
 Should we prefer to share alike, without asking how 
 much anyone did? Is any man, or any number of 
 men, wise and good enough to award perfect justice ? 
 
 Suppose now that every one who wants justice tries 
 to do it; the parents try and the children try too; the 
 teacher tries, and the pupils; the employers and the 
 employed people try; in all our deahngs every one tries 
 hard to do justice to every other. Who would not 
 choose to do justice, and a Httle more, now and then, 
 and possibly be wilKng to suffer an injustice once in a 
 while, rather than to try so hard to get justice for our- 
 selves as sometimes to do injustice to others? 
 
 Freedom and manhood. — The greatest object to be 
 gained by human society is manhood or character. 
 Give us men and women who think for themselves, 
 unafraid of what others say or do, with plenty of hearty 
 good will and sympathy for each other. Find us some 
 new system to increase our supplies if you can, but 
 unless it will also make our people more energetic, 
 capable, generous, and high-minded, we will not ac- 
 cept it. 
 
 Faith or trust in men. — Human society is bound 
 together by confidence. We trust, on the whole, that 
 our fellow-men will do right; they and we are more 
 alike than we are different. We trust, if we show them 
 what is wrong, that they will be fair and correct it for 
 us, as we would do for them. If men cannot be trusted 
 in the long run to do right, no laws or systems can be 
 
64 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 trusted. For men make and enforce the laws. But if 
 men can be trusted, the fewer laws we make to com- 
 pel them, the better they behave. Who of us likes to 
 be forced to do right? Who of us is not pleased to be 
 trusted? Society ought to be like the model school, 
 where rules are least needed. 
 
 Summary. — However much we desire to cure injustice, 
 or to bring rehef to the poor, we must preserve freedom. 
 We must get justice by doing it; we cannot cure 
 one kind of injustice by doing another. If we knew 
 that some one had more wealth than he deserved, would 
 this make it right for us to appropriate his wealth? 
 
 It is probable that the permanent common wealth 
 will largely increase, at least in the form of school- 
 houses, hospitals, museums, public grounds, and build- 
 ings. No one can foresee sufficiently to be sure that 
 various services, now performed by great corporations 
 of individuals, may not sometime be advantageously 
 performed by the whole body of the people. 
 
 The fact is, when all are faithful and honest enough 
 to be trusted to act fairly as individuals, all can then 
 be trusted to act justly together. Neither can all act 
 together, doing each other no injustice, unless the indi- 
 viduals first learn to be just; as the boys of a club 
 cannot play well together till its members are each 
 willing to do their share of the work, free of jealousy, 
 and happy to see each other succeed. 
 
CHAPTER IX 
 THE ABUSES AND THE DUTIES OF WEALTH 
 
 The significance of property. — Property gives its pos- 
 sessor a lien more or less on the produce of the world. 
 Besides the share which his work or skill buys, he is 
 also entitled to an extra share representing his property. 
 He may even do nothing, and yet draw from the world 
 an income equal to the value of the labor of hundreds 
 of men. It is as if the world carried a mortgage upon 
 its shoulders. If one tliinks of the products of the 
 world as put into a vast pile, a certain part of the pile 
 must be given to the owners of property. On the other 
 hand, is not the pile larger on account of the property 
 which has been used as capital? The owners of prop- 
 erty have furnished the necessary tools, machinery, and 
 materials. The property-owners have often made the 
 tools by their skill, or invented the machinery, or gath- 
 ered the material by their frugahty. So far as this has 
 been the case, no one grudges them their larger share 
 in the products. Nor is anyone poorer because they 
 have more. 
 
 The rich. — A few rich men in a community often 
 possess a disproportionate share of the property. This 
 is true on a small scale in a fishing village or among 
 farmers. It is partly on account of good fortune, by 
 which one man out of a hundred finds the school of 
 fish or the nugget of gold. It is partly the result of 
 training and character, since few know how^ or care^ 
 
 65 
 
66 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 to manage and keep their property. It is partly also 
 because property, like a snowball, after it has been 
 rolled up to a certain size, tends to grow bigger and 
 bigger. 
 
 Besides those who are rich through the ownership of 
 property, such as houses and lands, there is a consid- 
 erable class of people who are rich through the in- 
 comes which genius, special ability, or skill enables 
 them to draw. The voice of a great singer, the acumen 
 of a great lawyer, the insight of a physician, or the 
 rare administrative ability of a railroad superintendent 
 brings the same sort of exceptional income as the pos- 
 session of visible property, and gives its possessor 
 " money power." Rare skill or genius, like good for- 
 tune, is a natural inequality, making one man to differ 
 from another. We find such differences in a school or 
 family. They make life interesting. But we do not 
 always love or value most those who possess exceptional 
 ability. 
 
 The rich who do no service. — The custom of man- 
 kind has not only allowed men to enjoy the advantage 
 of their fortune or exceptional abihty, but also to give 
 their property to others, and especially to their children. 
 Many are rich who have dorie no more service them- 
 selves for the enrichment of mankind than if they had 
 not been born. Sometimes the law has let children in- 
 herit fortunes which the fathers had acquired by fraud. 
 As long as we permit the good and deserving to grow 
 rich, and to transmit their wealth to their children, the 
 dishonest will sometimes do the same. 
 
 Different uses of wealth. — Suppose one of the chil- 
 dren in a family takes better care of his toys than the 
 
THE ABUSES AND THE DUTIES OF WEALTH 67 
 
 others, or is ingenious and makes playthings for him- 
 self, and so possesses more than the rest. The whole 
 household has more resources than if he had less. So, 
 if one can make the pile of the products of the world 
 larger, every one else will be better off. Thus, if a 
 milHonaire lays out his income in building houses, al- 
 though he may grow richer by the rent, the city also will 
 be richer, and every one may have better and cheaper 
 shelter. So if he builds a mill, gives work to a thousand 
 men, and makes flour or cloth. 
 
 But suppose the rich man uses the power of his 
 wealth to get away what others possess; suppose that 
 he buys all the houses and charges higher rent; or sup- 
 pose he and others with him own a railroad and refuse 
 to take corn to market unless the farmer pays ruinous 
 freight bills; or suppose rich men could buy all the 
 water power and tax every one in the country for its 
 use. Such conduct creates a monopoly. 
 
 Monopolies, good and bad. — It is a monopoly when 
 one or a few hold and control the use of any valuable 
 thing. But a monopoly is not always bad or unfair. 
 Jenny Lind's voice was a sort of natural monopoly. It 
 gave her the opportunity to become rich. The laws 
 confer a monopoly upon an inventor or author. No 
 one can use the invention or publish the book without 
 paying the man who holds the patent or copyright. 
 The laws even give the inventor the right to charge 
 more than is fair, if he chooses to be so foolish. Many 
 monopoHes are plainly oppressive. If Robinson Crusoe 
 had secured the only spring of water upon his island, 
 and had refused to let new colonists have water without 
 working for him, this would have been cruelty. So it 
 
68 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 is when men buy up some article of universal necessity, 
 like rice, coffee, or quinine, in order to get their own 
 price out of others' pockets; or, again, when they get 
 laws passed which compel us to use the product of 
 their mines or their mills rather than goods made else- 
 where. 
 
 The limit of monopolies. — The great moral laws 
 which govern the world limit monopolies. If the mo- 
 nopoly is abused, it checks or kills itself. The great 
 singer may ask too large a price; the author or the in- 
 ventor may charge so much as to stop his sales. The 
 railroad will not make so much money by high rates as 
 by carrying more goods at fair rates; or, if its rates are 
 exorbitant, another road may be built. The salt or 
 the sugar must not cost too much, or people will send 
 abroad to get their supplies. This holds true if the mo- 
 nopoly is not protected by force or by law. But if the 
 laws make the monopoly, giving advantages to one or 
 to the few, or to a class of nobles or rich men, the rem- 
 edy lies in making the laws equal for all. 
 
 Land monopoly. — We have already said that land 
 is like no other property; no man created it as men 
 create houses and ships. Moreover, there is a Hmit 
 to the land in a country, but there is no limit to the 
 things that men create. Does it not seem as if the 
 laws governing the holding of land ought to be quite 
 different from the laws that control other property? 
 
 The holding of land is now especially subject to abuse. 
 For instance, it sometimes happens in a city that one 
 man or a few, owning land needed for building houses,, 
 hold it so as to keep it out of the market and arrest the 
 growth of the city, or they ask an unreasonable price. 
 
THE ABUSES AND THE DUTIES OF WEALTH 69 
 
 This makes a monopoly. The idle owners may finally 
 lease their land for other men to use, and so draw a 
 large income for themselves from the prosperity of the 
 city. 
 
 So when men get control of great tracts of fertile land, 
 or of timber, or of mines: the time comes when these 
 men have a monopoly, and can demand their own price 
 for the land. This price has to come out of other 
 men's pockets. For the men who hold the land mo- 
 nopoly do not add to the wealth of the world, or confer 
 any benefit by holding their property out of the market. 
 
 The cure of land monopolies. — The laws may be 
 made either to encourage monopoKsts of land or to dis- 
 courage them. It rests largely with the assessors of 
 taxes to see that the men who hold more land than 
 they use, hoping to make money by keeping it, shall 
 pay as much into the treasury as if the land were sold 
 to put buildings upon it or to cultivate it. 
 
 The rivalry of the rich. — Kings used to be foolish 
 enough to fight with each other to extend their domain; 
 so rich men sometimes ruin each other's property in the 
 hope of winning more at others' loss. Fortunes some- 
 times change hands on Wall Street as at a gambling- 
 table. Men contrive to injure the trade or the business 
 of their rivals, to make it unprofitable to run their 
 mills, and to drive them into bankruptcy. This sort 
 of struggle does not make the pile of the product of 
 the world larger, but lessens the general wealth and 
 produces hardship as in time of war. 
 
 Waste by the rich. — A great fortune may be like a 
 reservoir in which the water is stored to irrigate the 
 fields. But suppose the man uses his income for his 
 
yo RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 own indulgence, for his whims and fancies, like the 
 famous mad king of Bavaria. Suppose he spends it in 
 costly banquets, or locks it up in private pleasure- 
 grounds. Even so he cannot spend without giving some 
 of his money back, through the goods he pays for and 
 the men whom he hires. Nevertheless, his waste and 
 extravagance become a pubHc loss. For while the in- 
 vestments of income in new buildings or railroads 
 cheapen prices and rents, the expense for extra service 
 and luxuries makes prices higher. The evils of gigantic 
 wealth might be such that the community "would be 
 forced to erect some limit or safeguard against the abuse 
 of money — as we have to do when a man wastes his 
 earnings and starves his children. 
 
 Capitalists. — The poor man begins to be rich as soon 
 as he has acquired any kind of property, as tools or 
 land, or more than he needs to use at once for himself. 
 He then becomes a capitaHst. He may be an owner of 
 shares in the great railroad for which he works. The 
 bank or railroad in which he is an owner may possess 
 more property than any man in the State. Like the 
 rich man's fortune, so the company composed of many 
 little capitalists is a reservoir for accumulating and 
 using money. It has also some of the same dangers of 
 wasting its resources, or of using its power to fight with 
 others, or of making monopolies, or even of controlling 
 legislation. It is not, therefore, the rich who are to be 
 feared so much as wasteful, reckless, or unscrupulous 
 men, whether they have much or little. 
 
 The duties of wealth. — The possession of wealth is 
 not merely a legal right which certain ones enjoy, or a 
 luxury of which a few accidentally may have more than 
 
THE ABUSES AND THE DUTIES OF WEALTH 7 1 
 
 their share. Wealth imposes certain duties upon its 
 possessor. 
 
 Trusteeship. — There are in the United States thou- 
 sands of milHonaires, holding the titles to a large pro- 
 portion of the land, banks, railroads, mines, and factories. 
 Their actual or personal services to the community 
 cannot generally have been worth as much money as 
 they possess. They may, therefore, justly be consid- 
 ered as so many trustees, having for the time the care 
 and management of the accumulation of the wealth of 
 the whole community. This great fund, as we have 
 seen, is partly the product of human labor and thought, 
 and partly the bounty of nature. It is morally sacred 
 for purposes of good. The fact that this obligation is 
 not legal, but moral, makes it more honorable. The idea 
 of trusteeship does not apply merely to millionaires. 
 Every person is responsible for what he uses or spends. 
 
 So far as rich men acknowledge and act under this 
 obhgation of trusteeship, there may be little pubhc 
 injury in their acquiring and holding as much wealth as 
 they please. Moreover, if anyone is a foolish or in- 
 capable trustee, the rule is that his wealth goes out of 
 his hands, as power disappears from one who does not 
 know how to use it. 
 
 Service. — Does the possession of property ever give 
 anyone a right to lead a useless or idle hfe? On the 
 contrary, the more one inherits or accumulates, the 
 more he is bound to the universal duty of some kind of 
 service in making the world better, richer, or happier. 
 The more wealth one possesses, the meaner he is, like a 
 selfish older brother in the household, if he does no good 
 with his money, or if he becomes only a bigger drone 
 
72 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 in the hive. Does anyone imagine that happiness is 
 gained by being mean and grasping? 
 
 Sharing. — The trusteeship of property makes it 
 shameful for any inteUigent person to lavish luxuries 
 upon himself. Shameful, too, is unnecessary exclusive- 
 ness, especially with regard to grounds, paintings, and 
 works of art. What can we think of a man who fences 
 off from the pubKc a great forest, or appropriates for 
 himself alone a tract of the seashore? How can a man 
 forget the principles of honor and kindliness which hold 
 in every home and schoolroom ? We let a child own his 
 knife or football and make him responsible for it, but 
 we expect him willingly to share its use with the others 
 and not to lock it up for his own pleasure. We do not 
 need laws for this purpose; our public opinion makes 
 the law. 
 
 Public munificence. — It was the custom of the Athe- 
 nians to expect their richer men to undertake certain 
 special kinds of public expense, as the fitting out of a 
 trireme, or the cost of a festival. So in our times we 
 expect no rich man to live and die without public bene- 
 factions. It is not merely generosity to give; it is the 
 return of a debt. Much of the accumulated wealth of 
 the world has arisen from the toil and effort of the men 
 of the past, from whom we all inherit property, ideas, 
 and inventions. Are we not bound to keep good what 
 we have inherited, in special provision for the future — 
 for public works and buildings, for schools and colleges, 
 for art and music? The more property one has, the 
 larger is his debt to the past for the sake of the future. 
 Should we not be ashamed if our generation left the 
 world poorer than it had been before we were born? 
 
THE ABUSES AND THE DUTIES OF WEALTH 73 
 
 The ideal city. — What kind of town would you Kke 
 best to live in ? Not one where every one has precisely 
 the same income as every one else; this would not be 
 just. Not where the State holds everything and each 
 individual must obey the rules of a great Central Bureau 
 at the capital. Will not the largest prosperity come 
 where the laws give free scope to the skill and energy of 
 the people in the creation of wealth; where no hurdles 
 are put in the way of those who are willing to work; 
 where least money is wasted and squandered; where 
 every one is respected for his worth as a man; where 
 citizens are accustomed to work happily together; where 
 the wealth which all help to earn flows naturally to 
 those who show most industry, good sense, integrity, 
 and capacity in making and using it? In such condi- 
 tions, the wiser and more able people, being also friendly 
 and considerate, no one could fall into grievous poverty, 
 and no man could use his wealth for oppression. Thus, 
 the free system of acquiring and holding wealth works 
 out justice and happiness, as fast as individuals learn 
 the democratic idea — to respect one another and to 
 do to others as they wish others to do to them. But 
 unless there are plenty of such fair-minded and demo- 
 cratic citizens, there can be no happiness or prosperity 
 enforced by rules, whether made by a sovereign, Kke the 
 German Emperor, or by the majority of a republic. 
 
CHAPTER X 
 
 BUYERS AND SELLERS; OR, THE MUTUAL 
 BENEFIT 
 
 There are two theories of the conduct of business. 
 One theory is that each party in trade aims to get an 
 advantage over his neighbor: one should try to get as 
 much and give as httle as possible. If goods are de- 
 fective, the seller should conceal the fact. The only 
 rights which this theory of business recognizes are legal 
 rights. One must not overreach far enough to come 
 within the penalties of the law. Otherwise, so far as 
 the law does not prescribe, the other party to a bargain 
 must look out for himself. 
 
 The notion underlying this theory of business is that 
 whatever one makes, the other loses. As in gambhng, 
 the gain of the winner means that others must lose, so in 
 business it is sometimes supposed that the successful 
 merchant grows rich at the expense of his neighbors. 
 Business is thus only a game in which every one is try- 
 ing to win other people's money. The laws are the 
 rules of the game. 
 
 The idea of business. — The fact is that buyers and 
 sellers perform a mutual service not only to each other, 
 but for the benefit of the pubhc. Mercantile business 
 is not a game, but an industry, like farming or manu- 
 facturing. The merchant increases the value of goods 
 by bringing them to market. He therefore deserves 
 wages or salary for the service which he renders in col- 
 
 74 
 
BUYERS AND SELLERS; OR, THE MUTUAL BENEFIT 75 
 
 lecting and distributing his goods. He receives his 
 wages in the form of the surplus of his sales over their 
 cost. The larger his sales and the greater his skill, — • 
 that is, the more valuable his services, — the greater 
 his income deserves to be. The law of supply and 
 demand regulates this. The income of merchants is 
 not, however, uniform. Sometimes it is less than the 
 equivalent of the work and cost which they have spent, 
 and sometimes it is much more. It involves risk and 
 forethought and attention to numerous details. In the 
 long run, the merchant's income is nearly the same as 
 equal labor, skill, and experience would produce in any 
 other industry. 
 
 It follows that what the merchant honestly makes is 
 not at anyone's expense or loss. The wheat gathered in 
 the warehouses is actually worth more than when in the 
 farmers' granaries. Neither the farmer, therefore, nor 
 anyone else has lost by the merchant's fair profit in the 
 purchase and sale of the wheat. So with other prod- 
 ucts. 
 
 The rights of buyers and sellers. — The earliest kind 
 of trade was barter. In barter each party was both 
 buyer and seller. In fair barter each shared the advan- 
 tage of the exchange; for example, a pack of skins was 
 exchanged for a sack of wheat. So in modern trade, 
 which is only a more complicated kind of barter. In a 
 fair sale the buyer and seller divide the value of a mutual 
 advantage between them; each, therefore, ought to be 
 better off than before. If a dealer, as a rule, got for 
 himself the whole advantage of his bargains, it would 
 be the same as getting what did not belong to him. 
 In fact, business could not go on in this way. In the 
 
76 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 long run the advantage must be mutual in men's bar- 
 gains. 
 
 It follows that overreaching, even though the laws 
 do not specify it, is an attempt to get what belongs to 
 another. The sale of goods which are defective or 
 below the standard — the adulteration of food or the 
 watering of milk — is not trade, but an attempt to get 
 what belongs to others. So, too, if purchasers seek to 
 beat prices down to less than the cost of goods, they 
 try to get what belongs to others, and they tempt men 
 to cheat them. 
 
 Is honesty the best policy? — It is not only just that 
 buyers and sellers shall share in the mutual advantage 
 of their bargains, it is also for their interest. This is 
 the meaning of the proverb, ^^ Honesty is the best 
 policy.'^ Business is best when every class gets full pay 
 for its services. If the farmers do not get their share of 
 the proceeds of their labor, they will have less money to 
 spend and in the end the merchants will feel the loss in 
 the slackening of their business. Men who have been 
 cheated in a trade cannot so well afford to trade again; 
 on the other hand, men appreciate just treatment and 
 tend to treat the other man likewise. In a community 
 where men aim to share generously, values increase and 
 there is more wealth to share. Better yet, it is a pleas- 
 ure to be sure that the other man with whom we deal 
 is satisfied. 
 
 Legitimate business. — It follows that only those 
 kinds of business are righteous which result in benefit to 
 the public. Who wants to engage in a business which 
 does no good, or which results in harm and loss to the 
 community ? 
 
BUYERS AND SELLERS, OR, THE MUTUAL BENEFIT 77 
 
 The law of supply and demand, or competition in 
 buying and selling. — We can imagine all the cattle of 
 the country to be in the hands of a few families, who 
 have cattle and nothing else. They must therefore have 
 wheat and other supphes from the farmers. They be- 
 gin by exchanging with the nearest farmer at his own 
 price, which gives him a large profit. A second farmer 
 presently appears and offers his wheat for less; and the 
 first farmer, rather than not sell, reduces his price. 
 Thus, after a time, by competition, the farmers fix a 
 price as low as they can afford. Thereafter the ex- 
 change of cattle and wheat regulates itself according to 
 the plenty or scarcity of the one product and the other. 
 If the cattle men have a good year, they can afford to 
 furnish cattle at a lower price; if wheat is scarce, it 
 must be dearer. 
 
 In some such way as this the prices of all sorts of 
 things are fixed. The more valuable or the rarer a 
 thing is — in other words, the more work it costs to 
 obtain it — the higher its price. A great demand for 
 any article sets many fresh hands at work to supply it, 
 and it presently becomes plentiful; or, if the demand 
 faUs, the price is lowered accordingly. Thus, iron was 
 once scarce and costly, till men learned to produce it on 
 a great scale; then, all sorts of ironware became cheap. 
 There was once immense profit in trading with China 
 and India; there were also great risks. Now the mer- 
 chants make so small profits in tea and indigo that it 
 hardly pays any better to build ships for the Eastern 
 trade than to build houses at home. 
 
 Selling in '* the dearest market.'' — Suppose that a 
 farmer raises fruit and vegetables, which few of his 
 
78 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 country neighbors care to buy. A few miles away, in the 
 town, many people need his products. Their demand, 
 being active, allows the farmer a good price. This is 
 because he brings his fruits where they are most wanted. 
 If he sends his goods to a great city, and furnishes 
 superior fruit to persons who demand the best, he will 
 receive still better prices. The " dearest market " is 
 wherever the demand or need is greatest. Whoever takes 
 the pains to meet such a demand will be well paid. 
 The dearest market also is usually, though not always, 
 where people can afford to pay a higher price. Thus, the 
 dearest market for the farmer and fisherman is in the 
 city, where most of the money is. It is of mutual ad- 
 vantage to buyer and seller when goods are brought to 
 the dearest markets. By and by competition will bring 
 the prices down so that every one can have enough at 
 reasonable cost. 
 
 Buying in the cheapest market. — The cheapest market 
 is where the supply is most abundant. The cheapest 
 market for fish is on the shore where fishing-boats come 
 in. Here is the place to buy to best advantage. The 
 place to buy clothing most cheaply is in the great shop 
 where clothing is piled on the shelves. Whoever will 
 buy where goods are abundant and therefore cheap, ac- 
 commodates the seller, who wants money for his goods. 
 Thus, every one gains when purchasers buy in the 
 cheapest market. If, however, too many purchasers 
 crowd into the cheap market so that the goods become 
 scarce, it is fair to all to raise the prices. In this case 
 those buy the goods who need them or care most for 
 them; but those who can get along without them do 
 not buy, or they purchase something else, or they seek 
 
BUYERS AND SELLERS; OR, THE MUTUAL BENEFIT 79 
 
 a cheaper, that is, more plentiful, market. Meanwhile, 
 as soon as prices rise, men set to work to provide a 
 cheaper market again; in other words, to furnish a 
 fresh and larger supply. 
 
 Freedom in trade. — In barbarous times it was so 
 perilous and costly to travel, and roads were so bad, 
 and transportation of goods was so risky on account of 
 pirates and shipwrecks, that men often starved within 
 a few miles of a cheap market. For many centuries 
 troublesome tolls were collected of merchants, and cus- 
 tomhouses stood on the border of every httle State, so 
 that men could not afford to bring their supplies to the 
 markets. For want of free trade there was poverty 
 and suffering, as when tight cords restrict the flow of 
 blood to the limbs. 
 
 Civilization cuts the cords and gives the body freedom 
 to act. It makes free turnpikes and bridges; it unites 
 little states into nations and removes the barriers be- 
 tween them; it builds great lines of railway. In the 
 United States there is perfect freedom of trade among 
 the States and Territories. When, therefore, the crops 
 fail in one section, supplies flow freely in from other 
 quarters to meet the demand. Famine, the scourge of 
 ancient times, is rendered almost impossible, except in 
 time of prolonged war. The farmer in Dakota, with his 
 great wheatfields, is brought close to the needy markets 
 of New England. This is because every one in the 
 Nation is free to buy in the cheapest market and to sell 
 in the dearest. 
 
 Freedom in trrde ; what harm it may do. — While 
 freedom in trade works well on the whole, it some- 
 times does harm^ Just as laws which work well for the 
 
8o RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 many may seem to do injustice to individuals. Thus, it 
 is good for the Nation that we can buy corn in the cheap- 
 est market, which is in the West ; but this at first was 
 hard for the Eastern farmer, who could not raise corn so 
 cheaply. It is good, on the whole, that the Vermont 
 farmer can sell his eggs and chickens in the dearest mar- 
 ket, which is Boston or New York, but this makes eggs 
 and chickens dearer for the people in Vermont. We know 
 that when there is demand in the brain for nourishing 
 blood, it is drawn away for a time from the extremities. 
 
 The two sides. — Competition in trade may be selfish 
 and cruel, if a neighbor outbids another or undersells 
 him, on purpose to get rid of him and to control his 
 business; or if a great firm seeks to crush its rivals. 
 When there is a great snow blockade, cutting off a city 
 from its supphes, it is selfish and cruel if the milkmen 
 exact extortionate prices because of the needs of suffer- 
 ing children. 
 
 But competition or freedom of trade need not be sel- 
 fish. A class of boys may aim each to get the most 
 perfect mark of excellence; so every man who sells, if 
 he be honorable and high-minded, may aim at furnish- 
 ing the best quality of articles on the most favorable 
 terms which he can afford; so purchasers may, and 
 sometimes do, scorn to exact unreasonable advantage 
 from the necessities of the seller. There is no need, 
 because a man carries on business, to forget that he 
 deals with men like himself. If the laws allow mean- 
 ness and extortion, enlightened public opinion, not to 
 speak of religion, calls the louder for humanity and 
 friendliness, and brands as shameful the competition 
 which forgets the man in the bargain. 
 
BUYERS AND SELLERS; OR, THE MUTUAL BENEFIT 8 1 
 
 Paying one's debts. — Men are debtors and creditors 
 in turn, according as they owe money to others or others 
 owe them. If, now, a man's debtors put off payment or 
 do not pay at all, there will be difficulty in his paying 
 his creditors as he has promised, and again, in their 
 paying others. As the failure of any link in the chain 
 weakens the whole, so whenever a promise is broken there 
 will be suffering and loss. If many do not pay, money 
 will be hard to obtain, and business in general will suffer; 
 whereas prompt payment by one gives the means of pay- 
 ment along a whole line of men. The money which be- 
 fore failed to circulate, moves on freely and makes more 
 business, as well as the means of happiness, every time 
 it is promptly paid. 
 
 Bankruptcy. — It often happens that merchants and 
 others fail to pay their obligations. No one then will 
 trust them longer, and they may have to stop their 
 business. This is a hardship not only to them, but also 
 to others who depend upon them — their employees, as 
 well as those who have been giving them credit. The 
 greatest suffering often falls on those who are turned 
 out of employment. 
 
 Bankruptcy sometimes happens through the failure of 
 others; but most often it comes about through the ex- 
 travagance, the folly, the unskillfulness, and even the 
 fraud of those who have charge of the business. 
 
 Bankruptcy laws. — When men fail to pay their debts, 
 there are often many creditors, all of whom ought fairly 
 to share in the assets or property of the debtor, so far 
 as he has anything left. It may be that the debtor, if 
 the creditors will agree to give him time to settle his 
 affairs, will contrive to pay them more than if they 
 
82 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 seized and divided his property at once. It may be 
 fair, too, if the debtor honestly gives up all that he has, 
 for his creditors to release him from further payment 
 and leave him free to go on in business, provided he 
 can find merchants to trust him again. Bankruptcy 
 laws provide through the proper courts for the protec- 
 tion of the interests of both debtors and creditors. 
 Whereas once a debtor could be cruelly imprisoned by 
 a hard-hearted creditor, the debtor is now given a fair 
 opportunity to make up his losses. 
 
 Sometimes creditors live in different States. The 
 Constitution of the United States gives to Congress the 
 power to make bankruptcy laws for the Nation and so 
 to treat creditors in a distant State as fairly as if they 
 lived where the failure took place. 
 
 As men abuse other laws, so the dishonorable some- 
 times use the bankruptcy laws to wrong their creditors 
 and to secure a release for themselves without giving 
 up their property. On the other hand, men of honor 
 sometimes do more than the law requires, and after 
 being released from their creditors, insist, as soon as 
 they are able, upon pa3dng the full amount of their 
 debts. If every one carried on business in this way 
 there would be few failures. 
 
CHAPTER XI 
 
 EMPLOYERS AND THE EMPLOYED: THEIR 
 INTEREST IN EACH OTHER 
 
 All men are either employers of labor or employees. 
 Most men are at the same time both employers and 
 laborers. 
 
 The rights of employers ; fidelity. — Fidelity is to do 
 another's work, or the public work, as well as possible, 
 or as well as if it were one's own. The truth is, that the 
 workman sells something, namely, his work, whether of 
 his hands or his brain; and, like everything else sold, 
 he wishes it to be of standard quality. Is the duty of 
 faithful service lessened if the employer pays insufhcient 
 wages or salary? No. An honest man can never do 
 less than honest work; nor is the service merely for 
 the employer; the whole community is poorer for every 
 wasted hour or blundering piece of work. Worse yet, 
 the man who performs unfaithful service has become 
 degraded and demoralized. Fidelity includes honesty, 
 sobriety, and punctuahty. Courtesy and kindly man- 
 ners are also due to the employer, as they are due to 
 every one. How can we keep friendly relations with 
 others if we are rude and uncivil? 
 
 The rights of employees ; wages or salary. — Who- 
 ever sells his work or skill is entitled to its fair price no 
 less than if it were corn or cloth. Fair pay is not only 
 a righteous amount, but it includes punctuality in pay- 
 ment. Fair pay means reasonable and humane hours 
 of work and vacation or holiday time. We are learning 
 
 83 
 
84 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 that the rule of humanity is the rule of effectiveness. 
 Every one can do more and better work if he is treated 
 kindly. 
 
 Respect. — The employer has not discharged his duty 
 in paying a man; he owes him also courtesy and friendly 
 respect. How can he forget that the other is a man 
 like himself? 
 
 Honest management. — Employees are not only en- 
 titled to fair wages; in a certain sense they are partners 
 with the employers. If the management must keep 
 clear of speculative hazards which risk the capital of 
 the stockholders, so it must not imperil the employ- 
 ment of its workmen. Loyal employees are the greatest 
 asset of an enterprise. The management needs to keep 
 them together, and to find work for them in dull times. 
 
 The labor market. — In one view, labor, like every- 
 thing valuable, is subject to the law of supply and 
 demand. The men who have their labor to sell will 
 bring it to the dearest market, that is, wherever labor 
 is most needed. It will there get the best pay. On the 
 other hand, those who wish to hire labor will go to the 
 cheapest market ; that is, where labor is plentiful. Thus, 
 if a company wish to build a factory, they will consider 
 where they can get workmen to the best advantage. 
 They could not build their factory in Alaska so well as 
 in Ohio, because the latter State is a better market for 
 labor. Meanwhile, wherever they build their factory, 
 workmen will flock there. It is of advantage to both 
 employers and the employed to buy labor in the cheap- 
 est market and to sell it in the dearest. On the whole, 
 work is thus distributed where it is most needed and 
 where the best pay can be given it. If any considerable 
 
EMPLOYERS AND THE EMPLOYED 85 
 
 number of workmen are getting small wages, an oppor- 
 tunity is afforded to get better wages wherever a larger 
 demand is made for their help. Employment offices are 
 now often provided by the State to help place men where 
 they are most needed. 
 
 A difficulty : the human element. — Labor is not 
 simply valuable as a commodity. It is human also. 
 When corn is plenty, or inferior in quality, it is no great 
 hardship if it brings a low price, or does not sell at all. 
 But the workman must Kve; he may have a family de- 
 pendent upon him; even if he is an inferior workman, he 
 must still be housed and fed as a man. Moreover, the 
 laborer cannot easily be transported, like corn or commod- 
 ities, wherever the demand and the pay are greater. 
 Many circumstances may render it costly or impossible for 
 him to move to a place where his labor will be in demand. 
 
 Low wages ; the limit of decency. — While at times 
 the number of workmen may be far greater than the 
 demand, there is a limit below which it is not the custom 
 to let wages fall. This limit is fixed by men's consid- 
 eration of humanity.. The more high-minded employ- 
 ers are, and the stronger public opinion is, the higher is 
 this limit of wages to which a man's work entitles him, 
 on the ground that he is a man. The labor unions have 
 helped immensely to establish a public opinion which 
 works toward better standards of Hving for all workers. 
 Certain excellent laws protect them from overwork, for- 
 bid factory work for children, and seek to prevent em- 
 ployers from hiring people below a decent or sufficient 
 wage. This is often called the minimum wage, and it 
 means just enough to support the worker in health. Of 
 course, this varies constantly. 
 
86 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 Employees who cannot help themselves. — In years 
 of good harvests and prosperity there is more money 
 than usual to spend, and there is more employment in 
 all industries for men able and willing to work. But bad 
 years come when there is less to divide and to spend, 
 and therefore less work is called for. The inferior or 
 unskilled workmen are the first to suffer for want of 
 employment. Moreover, the conditions of civihzed Hfe 
 require costly tools and machinery: no civilized man 
 can easily work alone, as the savage can; he needs the 
 cooperation of others. A man cannot even till the 
 soil without assistance or capital. The law of supply 
 and demand works after a while to correct disorders 
 of industry, and to set men again to work where 
 they will be needed, but this law has to be supplemented 
 by constant sympathy and humanity to prevent the 
 helpless from suffering. For the whole body of the 
 community is bound up with the welfare and prosperity, 
 or the loss and misery, of any portion. If individuals, 
 then, cannot provide employment for their neighbors 
 who wish to find work, it may be the duty of the State 
 or the city to provide public works, such as the conserva- 
 tion of forests and lands, the building of streets, and other 
 improvements. We may hope that better education will 
 also train a larger proportion of the children to such skill 
 and faithfulness as will give them permanent employment 
 at all times. 
 
 Employers who cannot help themselves. — We have 
 seen that the number of workmen may sometimes be 
 greater than can be employed; or business may be dull 
 and unremunerative; or certain factories may have 
 greater expenses in rent and interest than others, and 
 
EMPLOYERS AND THE EMPLOYED 87 
 
 SO cannot afford to pay sufficient wages to go on making 
 their goods. Unless the employers are successful and 
 can accumulate some capital, and keep their plant in 
 good repair, they cannot weather the storms which 
 sometimes threaten the financial and industrial world. 
 The poorly managed shops and factories are often 
 obHged to stop. This is not because employers are 
 unwilKng to keep their workmen, but because they have 
 no money to pay them. 
 
 Industrial warfare ; strikes and lockouts. — It some- 
 times happens that employers and employees disagree 
 and quarrel. This may be on account of some fooHsh 
 misunderstanding, or the bad and arrogant temper of 
 one man. In some cases the men, who perhaps belong 
 to a union, vote to quit work until their demands for 
 better hours or an increase in wages are granted. This 
 is called a strike. Like war, it means loss of time and 
 money on both sides, and often great suffering to the 
 workmen's families. It ought to be justified only by 
 urgent necessity. It might, Hke war, almost always be 
 prevented. 
 
 The employers may make war upon their workmen by 
 shutting down their works and stopping wages till the 
 men accede to their wishes. This is called a lockout. 
 It results not only in hardships at the time, but, as in 
 war, in the loss of good feeling afterwards. 
 
 Trade unions. — The world was never so full as it 
 is now of all kinds of societies, associations, and clubs 
 in which men and women cooperate for mutual enjoy- 
 ment or the protection of their interests. Among the 
 most important and powerful of these societies are the 
 trade or labor unions. Thus, the printers, the teleg- 
 
88 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 raphers, and other skilled men form unions among them- 
 selves, and later various groups of trades join in a 
 greater Federation of Labor. Meanwhile, groups of 
 employers also form associations for their common in- 
 terest. At last in many industries the fixing of prices, 
 hours of work, and other conditions comes to be a process 
 of bargaining between the representatives of the unions 
 on the one side and of the employers on the other. 
 The individual workman who might seek in vain by 
 himself to secure fair treatment from a big corporation, 
 now has the support of a great organization with expe- 
 rienced officers at their service and with money in their 
 treasury. The trade unions are also friendly and benefit 
 societies, pledged to help their members in times of sick- 
 ness and unemployment. 
 
 The open and the closed shop. — Not all the men in 
 a trade choose to belong to a union. There are various 
 reasons why some prefer to remain outside. The rules 
 for entrance sometimes prove to be a barrier against new 
 men. For the men in a union are reluctant to admit 
 members for whom they cannot see plenty of regular 
 employment. In some cases they hold a certain monop- 
 oly of skill, and, like most monopolists, they do not like 
 to be disturbed. There are also men who prefer to 
 be free of the rather military discipline of the unions. 
 Suppose the majority order a strike to which the minority 
 object as unfair. Ought a faithful member of a union 
 ever to act against his union? Some men doubtless 
 think that they ought. But there are always men and 
 women outside of any union. Some of them are poor 
 or shiftless workmen. The non-unionists have to find 
 places in ''open shops," that is, where employers run 
 
EMPLOYERS AND THE EMPLOYED 89 
 
 their business as they choose and prefer to have non- 
 union help. They may pay less or even more than 
 union wages. But they do not bargain with the unions. 
 At the same time they may cheerfully employ members 
 of unions, without asking the question whether a man 
 belongs to the union or not. 
 
 On the other hand, the unions desire, whenever they 
 become strong enough, to control the "help" of a mill 
 or a mine, so as to have no workers in it except members 
 of the unions. This makes the ''closed shop." A non- 
 union man cannot get work in it, unless he enters one 
 of the unions. Sometimes the unions go so far as to 
 forbid their men handling goods which have been manu- 
 factured in an open shop. The unions have sometimes 
 imitated the unfriendly and autocratic methods which 
 employers have too often used in deahng with their 
 workmen or other employers. All such actions on one 
 side or the other are like war. They lead to reprisals, 
 retahation, and violence, and they leave an ugly temper 
 which spoils honest work and splits people of the same 
 nation into hostile camps. 
 
 Arbitration. — When men differ, or even when they 
 suffer injustice, there is a more sensible method than to 
 fight. This better method is called arbitration. In arbi- 
 tration both parties agree to submit their case to an 
 impartial committee, or board, and to abide by its deci- 
 sion. In some cases each party chooses one member of 
 the committee, and the two choose a third. Sometimes, 
 as in Massachusetts, the State keeps a standing Board 
 of Arbitration. In New Zealand the law provides the 
 means of arbitration and requires employers and em- 
 ployees to settle their differences peaceably, without 
 
go RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 compelling all the people in their town to suffer in their 
 quarrel. As employers and their employees become 
 more intelKgent and humane, arbitration in some form 
 may be expected to prevent the waste and ill-feeling 
 always occasioned by strikes and lockouts. Quarreling 
 is stupid business. 
 
 The interests of employers and the employed together. 
 — Of course, employers need nothing so much as thor- 
 ough workmen. Even though they must be paid high 
 wages, good workmen are the most economical, just as 
 goods of standard quality are cheaper in the end than 
 inferior goods. The employer with skilled and willing 
 men may easily afford to pay the best wages and yet 
 produce goods which will sell at a profit. 
 
 The success of the employer is generally to the in- 
 terest of the workmen. His success means permanence 
 in work, whereas the less successful shop will often have 
 to be closed. His success means the abiHty to pay 
 better wages, and to continue to pay them through dull 
 seasons. The successful employer will have large capi- 
 ital and credit, and will be able to keep men employed 
 even at times when he makes no profits himself. The 
 employers and the employed ought not to pull apart, 
 but to pull together. They are engaged in two sides of 
 the same v/ork. 
 
 Cooperation and profit-sharing. — Enterprises are 
 often undertaken in which all who have part in the 
 work share in the profits. This used to be done in the 
 fisheries, where perhaps a group of neighbors owned 
 and fitted out the vessel. It has been done in certain 
 manufactories and on plantations. It has been done on 
 a great scale in England (the Rochdale stores) and in 
 
EMPLOYERS AND THE EMPLOYED QI 
 
 Belgium in the business of distributing goods, and in Den- 
 mark and Ireland among the farmers. The best form 
 of all is that which gives the workers a vote in the 
 conduct of the business and a voice also in the election 
 of the managers. Why should not every business be a 
 democracy in itself? Why should it not have directors 
 to represent the workers as well as directors for the capi- 
 tal? If it is a business that serves the public like a 
 railway system, why should it not have directors to 
 represent the interests of the people who use the road? 
 Why should there not be at suitable times free discus- 
 sion of the subjects which concern those who work, and 
 those who superintend, and the people whom the busi- 
 ness serves? Let all sides understand each other and 
 so learn to work together better. 
 
 All kinds of business, however, are really more co- 
 operative than men think. For the payment of regular 
 salaries and wages (which are apt to rise in good times, 
 and fall in poor times) is simply a method of sharing the 
 profits of business with those who are concerned in 
 carrying it on. On the whole, a man's share depends 
 upon how useful or necessary he is. Moreover, many 
 great corporations, like the Pennsylvania Railroad, ad- 
 vance their wages according to the length of faithful 
 service, and give pensions to aged workmen. It is often 
 possible for employees to invest their savings in the 
 shares of the company for which they work. Of course, 
 however, those who share the profits of their work must 
 also share the losses. 
 
 Men who have been the employees of others some- 
 times combine and establish a business or an industry 
 of their own. The new enterprise, like any other cor- 
 
92 RIGHTS AND DUTIES OF BUSINESS AND LABOR 
 
 poration, is then subject to the usual conditions of 
 success, namely, the energy, prudence, and honesty of 
 its managers. 
 
 Women's work and wages. — How about women's 
 wages? Ought they to be the same as men's? We 
 have seen that wages follow the law of supply and 
 demand; but when they become very low, humanity 
 interposes, and forbids paying less. As a rule, this 
 limit to which wages fall is lower for women than for 
 men. This is partly because of the survival of bar- 
 barous ideas as to the worth of women. It is partly 
 because certain employments are beyond women's 
 strength, while the number of women seeking work 
 constantly increases. Many women who live at home 
 are glad to earn a little money at wages lower than 
 they could afford if they had wholly to support them- 
 selves. Employers who find willing hands at a dollar a 
 day cannot easily pay more to other women, no more 
 skillful, who need two dollars a day. 
 
 Moreover, the wages of women are allowed to be 
 lower than in the case of men, even for the same work, 
 on the ground that a man must have enough to support 
 a family, while a woman more often has only herself 
 to support. This custom frequently works hardship, 
 but its service is to keep famihes together. Men's work, 
 as a rule, is also for life; whereas when working women 
 marry their work is apt to change to meet the calls of 
 domestic life. 
 
 The industrial democracy. — We are used to the idea 
 of a political democracy in which every man is a citizen, 
 with the opportunity to fit himself for any service in 
 the State. The industrial democracy, or the Common- 
 
EMPLOYERS AND THE EMPLOYED 93 
 
 wealth of labor, is now coming into view. Here, too, we 
 cannot have any servile class, but every man and his 
 labor must bear the hall mark of worth. Every one is 
 respected for his character and for the value of his con- 
 tribution to the common product. The Commonwealth 
 cannot afford to allow its famiHes to live meanly. It 
 proposes to give every child the education and the fair 
 chance to make his way up to a useful and honorable 
 place, to ''make good" for all that he has cost, and 
 to leave the world somewhat better off. In this Com- 
 monwealth human society is a grand order, L'ke the 
 human body, made up of millions of Hving cells. The 
 interests of each are the interests of all, and all are 
 partners. FriendHness is the rule and not the excep- 
 tion. Whoever makes human life richer, happier, or 
 nobler belongs to this Commonwealth.