^, mmmmmmmmmmm |MK| 1W«WK>"'-1 L i JyiMyyi/lJi-'y^ oii:h%B L- THE LABORER AND THE CAPITALIST BY FREEMAN OTIS WILLEY PUBLISHED BT THE NATIONAL ECONOMIC LEAGUE 13 AsTOR Place NEW YORK Copyright, i8g6 FREEMAN OTIS WILLEY OmRSHY OF SOUTHERN CALIFORNIA uBl CONTENTS PART I. CHAPTER I. Page Development of the Subject. The Tribune on Unrest — A Glance into the Past - 2 What the Unrest Means . . - . . 5 The Labor Leader ----.-- 7 Rev. Heber Newton — Methodist Conference - - 11-12 M. Deschanel — The Chaplain's Prayer ... 13-14 Congressman Colquitt — Judge Gresham - - - 15-16 Bishops Potter and Spaulding — Ingalls - - - 16-17 The Growth of Socialism — The Issue - - . 18-19 CHAPTER II. How Shall We Meet the Issue? Political Conditions — Necessity for Education • - 19-23 Popular Opinion — Labor's Soliloquy - - - 24-25 CHAPTER III. Monopoly. Judge Brewer — Arguments Advanced . - = 27-29 " Special Privileges" — Large and Small — Monopolies 30-34 CHAPTER IV. Plutocracy. Definitions — Election Influences - - - - 35-36 Universality of Plutocracy 37-38 Contents. — Continued. CHAPTER V. Page The Wider View. Monopoly a Natural Principle ----- 40-41 Webster — Power the Inheritance of the Few - 41-42 CHAPTER VI. Do Corporations Concentrate Wealth? Rev. Dr. Strong — The Cause of Prejudice - - - 43-44 Corporations a Necessity of Civilization - - - 44 The Standard Oil Company— The Many Benefited - 46-51 Massachusetts Corporations — Female Stockholders - 52-53 CHAPTER VII. Riches and Honesty. Dr. Strong and Others on the Danger of Riches, etc. 54-55 Are the Rich Dishonest? 59-62 CHAPTER VIII. The Growth of Socialism. First Principles — The Extent of Socialism - - - 64-66 Judge Brewer — Dr. Strong — Dr. Mc Arthur - - 67—68 Herbert Spencer on the Coming Revolution - - 69 CHAPTER IX. Arguments for Socialism. The Coming Nation's Plea for Argument - - - 11-72 The Socialists and the Popidists — Judge Brewer again 73-74 Change of Ownership of Soil — Equalization of Condi- tions in Europe and America - . - - 75-76 Speaker Reed — Wilson and Sovereign on Concentra- tion 78-79 Contents. — Continued. Pagb The Repuhlic on the Relation of Property to Man — Summary -------- 80-81 CHAPTER X. The Division Between Man and Man. Rev. Dr. McLane on Unjust Distribution - - - 82 The Diversity in Human Nature and Ambition - 84-85 The Laws of Distribution, Exchange, and Mutual De- pendence -..-..-- 86-89 Why Some Grow Rich — Reciprocity of Trade - 90-92 The Value of Vanderbilt to the Community - - 93 CHAPTER XI. The Division Between Capital and Labor. Mr. Sovereign — Mr. Whitworth on Land Monopoly - 95-96 Who are Benefited ? — Loan Associations - - 98 Growth of Building and Loan Associations - - 99 Are Millions Wrung from the Poor ? ... 100 The Test of the Profits of Capital - - - - 104 CHAPTER XIL The Gulf Between Capital and Labor. Dr. Strong on Machinery and the Division of Labor - 106 Machinery Helpful 109 Where is the Gulf? 112 Do the Rich Stand in the Way of the Poor? - - 114 CHAPTER XIII. Is Wealth Concentrating ? The Commercial Advertiser on the Social Problem - 117 Astor and Pulitzer— The Diffusion of Benefits - 121-122 CoNTEN TS. — Continued. Page Extravagance of the Rich no Detriment to the Poor - 125 The Need of the South 126 The Division of Profits 127 CHAPTER XIV. Has Wealth Concentrated? The Tendency of Land to Diffuse . - - - 132 Interest on Money — Who Bears the Burden? - 135-137 Property less Immigrants - - - - - -140 CHAPTER XV. The Blamed and the Pitied 143 The Advertiser on Cleveland . - - - 144 Hewitt on the Duties of Rich Men . - - - 149 Poverty and the Soup House . - - - 150 The Press on Suicides - - - - - 152-153 CHAPTER XVI. The Blamed and the Pitied (Continued). Dr. Rainsford on the Tenements - - - - 154 What is Spent for Drink - - - - - 161 PART II. CHAPTER I. Child Labor. Dr. Strong on Child Labor - - . - - 164 Foreign Population in Cities- . - - - 166 iv Contents. — Continued. Page Working Children of Illinois - - - - -167 Savings Banks ------- 173 CHAPTER 11. Does Labor Receive a Just Share ? Walter B. Harte on the Rich and Poor of Boston - 183 The Journal of Commerce ----- 185 The National Watchman ----- 188 The Gospel of Work 190-193 The Treatment of the Destitute - - - - -199 Who are Capitalists ?----.-- 201 Large Concerns versus Small Traders - - - 203 CHAPTER III. Millionaires and the People. A Campaign Document — ^The Tribune's Census - - 205 A Proposition for the Workman - - - - 211 CHAPTER IV. Recapitulation. Rev. Thos. Dixon on the Two Kingdoms — Mr. Shear- man's Estimate - - - - - - -213 The Herald on New York Real Estate Owners - 215 A Comparison of New York Real Estate, 1840 and 1894 222 Distribution of Railroad Earnings - - - - 226 Banks, Corporations, and Estates - - - - 228 CHAPTER V. A New Book. Dr. Spahr on the Distribution of Wealth — Senator Chandler 230 Common Observation - 232 Contents. — Continued. Page Massachusetts Labor Bureau on Savings-bank Depositors, 236 New York and Brooklyn Savings Banks ... 242 CHAPTER VI. Surrogate Argument 244 Savings-bank Accounts in the Surrogate Court - 245 CHAPTEE VII. The Surrogate Argument as Applied to Property other than Savings-bank Accounts . . . . 250 Property Owners in New York City — Female Property Owners -------- 251 CHAPTER VIII. The Country at Large. New York Counties ------- 254 Small Holdings — Dr. Spahr's Estimate for the Country at Large -------- 258 Report of Massachusetts Labor Bureau on Probated Estates. Remarks thereon ----- 259 Inventoried Estates of Massachusetts — Henry Gannett's Estimate of the Distribution of Wealth - - 261-263 CHAPTER IX. Railroads and Farms 265 Is Wealth Concentrating in Railroads ? - - - 265 CHAPTER X. Rented Farms. Who Rent Farms? - - - - . - - 269 VI Contents. — Continued. Page Farmers versus Money Loaners, Manufacturers, and Merchants 270 CHAPTER XI. , The Fall of Wages. Y The Interdependence of Labor and Capital - - 271 CHAPTER XII. The Poor in Cities. Dr. Spahr on Poverty in Cities ----- 272 Classification of Immigrants . _ _ _ 273 The Proportion of Foreign Population in Large Cities — Intemperance - - - - - - -274 CHAPTER XIII. Taxes. Thos. G. Shearman on " Concentration " - - - 276 Inflated Values 278 Loss by Failures - - - - - - -279 CHAPTER XIV. Tax-lists Compared. Boston Tax-list for 1888 Compared with that of 1821 281-282 Tax-lists of 1845 and 1888 Compared - - - 284 CHAPTER XV. Millionaires. Mr. Shearman's Estimate and the Tribune's List - 285-286 A Deduction from the Massachusetts Surrogate Records 287 CHAPTER XVI. The Way Incomes are Estimated. Dr. Spahr on Boston Rentals . . , . - 288 vii Contents. — Continued. CHAPTER XVII. Pagb Farms and Cities. Dr. Spalir on Cities versus Farms and Villages - 291 The Interdependence of Farm and City - - - 292 Farms versus all Other Industries - - - 294 An Analysis of City Wealth - - - - - 298 Mr. Debs's Commonwealth ----- 300 How Profits Diffuse 301 Comparative Growth of Different Sections of the United States 302 CHAPTER XVIII. Who Become Rich? .------ 303 The Cost of Intoxicants and Who Pay - • • 304 CHAPTER XIX. Tenement Houses. Boston, 1845 and 1890— Why Some Occupy Bad Tenements -------- 306 Wright on Intemperance - - - - - 307 A Comparison of Surrogate Records, Massachusetts, 1830-1890 - - ■ 309 vni The Laborer and the Capitalist. CHAPTER I. DEVELOPMENT OF THE SUBJECT. Not a few of the works written upon economic subjects in recent years are one-sided. Most of them were not in- tended to he so ; hut the authors have generally had very strong convictions before they began to write, and naturally enough they have looked for facts and figures to demon- strate that those convictions had a soHd basis; that is, taking the premises for granted, and having perfect confi- dence in the justice of the cause they were promoting, they have conscientiously ignored much that ought to have been taken into account, and innocently placed before the public many statements which a more searching analysis would have shown to be entirely without foundation, or to need a great deal of modification. This is as true of one side of the controversy as of the other, as applicable to my own earlier writings as to those of other authors. This is an attempt to state the position of the laborer and that of the capitalist with equal clearness, and to present the argu- ments for and against both without catering to either. Many of the leading facts that follow were found while search was beino; made for data to demonstrate conclusions the very opposite to those that were finally forced upon me by careful investigation. I have violated modern practice in the frequent use of the pronouns "I" and "We"; in short, I have made no THE LABORER AND THE CAPITALIST. attempt in this work to conform to tlie rules of polished literature. I have sought to make my meaning plain and to use such language as all can understand. And now the one favor asked is that no reader will condemn until he has read all the chapters. An extract from an editorial which appeared in one of our metropolitan journals shall introduce the subject which constitutes the title to this volume (see New York Tribune, January 1, 1893), as follows: " The year closes with fresh indications of the increasing social unrest of the world. A dynamite explosion in the French capital is the responsive echo to despairing unreason in Dublin. Russia, Italy, and the continental nations are seething with social discontent. . . " Great Britain has emerged from a troublous year of commercial depression and political excitement with an incongruous coalition of parties and factions held together by the genius of one man ; and the distinguishing characteristic of the situation is unrest. " If dynamite explosions, anarchistic plotting, and socialistic propagandism were the only symptoms of this unrest, eyen the most easy-going optimist would be unable to find compensations for what would be a malignant social disorder ; but in the recent history of Europe and America such outbreaks of lawlessness play an insignificant part. It is in the thorough and systematic organ- ization of all forms of labor; in combinations for securing legisla- tion and recognition for class grievances and interests, and in the increased determination of the working forces of the world to have tLeir questions taken up and settled, that the feverish pulse of the times is now most strongly felt." Referring to the great political change which took place in the United States in November, 1892, the Tribune said: THE LABORER AND THE CAPITALIST. "If the revolt against Republicanism and protection had occurred in hard times, when trade was stagnant and employment scarce, the results of the general election would have caused little surprise ; but what has happened is the complete reversal of the economic and business policies of the Nation in a most pros- perous year, when trade was never better, industrial enter- prise never greater, and labor never so fully employed or so well rewarded. . . . Possibly the true explanation of the political revolution lies in a conviction or hallucination in the minds of great masses of voters that American prosperity, while unexampled in modern history, is more unequally distributed than it ought to be. But however the proposition may be formulated, nothing less than social discontent and restlessness offers an adequate reason for a radical political reaction in the most prosperous of recent Ameri- can years." The article closed as follows : ''Whether all this social discontent, which is throbbing in Amer- ica as intensely as it is beating in Europe, will make the world better or worse, is the secret of another century." Before we comment upon this remarkable statement of the Tribune, let us glance a moment into the past. A hundred and twenty years ago the American ship of state was launched upon the surging sea of national destiny. Three thousand miles from the war-swept and turbulent Old World, she started on her course under conditions that promised rewards more tempting, and winds more helpful than had yet breathed upon a human govern- ment. THE LABORER AND THE CAPITALIST. Eighty-five years of marvelous progress had apparently justified the highest hopes and fulfilled the wildest proph- ecies of her friends, when the war of the great rebellion burst upon her. The gale was fearful, and the surge tre- mendous. The producing cause was chattel slavery ; slavery was stricken down, the storm ended, the stars and stripes waved over a union saved, and the well-tried ship sped on her God-appointed way, stronger, prouder, freer than before. Those who had feared for the safety of the great repub- lic were no longer anxious, and the friends of liberty every- where rejoiced in the glorious prospects of the American nation, now free from the thraldom of human slavery. I shall not soon forget the glad look of a patriotic old gen- tleman in New Hampshire in 1866, when he spoke substantial- ly as follows : " Our one dangerous enemy since Great Brit- ain withdrew her troops from American soil has been negro slavery. That enemy is conquered, and conquered forever. Now all we have to do is to behave ourselves and enjoy peace and prosperity for all time to come." The old man undoubtedly voiced public opinion at that time, which seemed to be well grounded. For although the war had cost us fearfully, and sorrow still lingered at the Nation's hearthstone, yet commercial enterprise was won- derfully active and financial prosperity dwelt among us as never before. Labor troubles, such as now afflict the country, had not been dreamed of, and so far as human vision could then reach there stretched before us a broad highway of peace and prosperity. THE LABORER AND THE CAPITALIST. But the rosy hopes of those days soon faded. Eight years brought us to the ever memorable 1873. Disorder and riot came into our midst, and we felt the advance waves of the eddjdng current upon which the Old World had been tossed and whirled for centuries. Twenty years later (1893) the New York Tinhune tells us (truth- f idly too) that discontent is throbbing as intensely in Amer- ica as it is beating in Europe. And the present year (1896) Chauncey M. Depew voiced the sentiment of thoughtful minds when he declared our civilization a paradox, and stated that although the fathers had founded a government every way calculated to bring prosperity and contentment, yet the present unrest exceeded anything the world had before known. Now let us take a seat before this extraordinary proposi- tion, this marvelous phenomenon, and sit there until we feel sure we comprehend its meaning. It is surprising what a circumscribed view some of our leading citizens have of the present political and industrial situation. There are distinguished pohticans (some of them are called statesmen) who are of the opinion that currency and tariff legislation have bred all the discontent we need to feel concerned about, and that when these issues are settled according to sound political ethics (which, of course, means according to tlieii'- ethics) industrial contentment will reign, and the dispute between capital and labor will be practi- cally ended. The Tribune is of the opinion, however, that "the conviction or hallucination in the minds of voters, that American prosperity is not fairly distributed," is the THE LABORER AND THE CAPITALIST. primal cause of the universal discontent it describes. This is tlie larger, and indeed the only view of the case at aU consistent with the facts that bear upon it. Business is often disturbed by legislation threatened as well as by legislation accomplished. It is also true that when business is disturbed the masses are more restless, and party supremacy more shifting. Nor can it be doubted that the tariff and currency questions are becoming power- ful elements in the problems we have to solve in our own country. Nevertheless, the world-wide belief that the re- sults of a common industrial effort are not being fairly divided is the one all-sufficient reason why, to use the lan- guage of the Tribune f " the feverish pulse of the times is now so strongly felt." April 9, 1892, the Labor Leader, a worthy labor journal pubhshed in Boston, contained a speech by one Michael Lynch, from which the following is copied : '*In a land whose bowels teem with all the varieties of natural wealth men are naked, homeless and starving ; you who bear the burden of an extravagant, a wanton, and a barbaric luxury, and yet have not wherewith to appease your hunger, starved, impris- oned, tortured into subjection, " Pinkertoned " to death ; you who from your miserable hovels can see the palaces of your masters rising around you ; who can behold their luxurious equipages, and yet must trudge on foot yourselves ; you can read of their ocean greyhounds, their trips to Europe, their Newports, their Saratogas, and deprived yourselves of air and light, with no vacations, few amusements, and less rational enjoyment, will you not see all this, when you know that all this lofty fabric of luxury and ease springs from your labor ? " THE LABORER AND THE CAPITALIST. May 14, 1892, the same journal had an article entitled : " Millionaires as Bellamy Sees Them." The following was given as Mr. Bellamy's language : '*If a small boy should be found with a roll of $1,000 in his pos- session, the presumption would be that he could not possibly have earned so large a sum — he must have stolen it ; and he would be immediately and unceremoniously taken by the collar and made to give an account of how he came by the money. We respectfully submit that when a grown man is found with $1 ,000,000 in his possession it is equally safe to assume that he did not come by so large a slice of the national wealth by any proper means, and that society should therefore take him by the scruff of the neck and make him give an account of how he secured what he has. We undertake to say that no man can justify his possession of $1,000,- 000 on sound ethical grounds. It is as much out of the power of a grown man fairly to earn that sum as it is beyond a boy's power to earn a thousandth part of it." The extract below is copied from an editorial which ap- peared in the same journal October 31, 1891 : *'As to " luck," no one has ever fully and satisfactorily defined that term, but taking it to mean what is usually accepted as its significance, I unhesitatingly declare that of all the enormously wealthy men in this country, only some who have become so through " luck " can successfully defend themselves against the charge of robbery." At a labor conference held in New York (see New York World, December 20, 1892), a committee reported the fol- lowing; : *' Multi-millionaires are gradually becoming billionaires, while the masses of the people of the United States are being trans- THE LABORER AND THE CAPITALIST. formed into a dependent class, with conditions similar to those under which the European pauper and wage slave toils, suffers, and dies." Mr. Lynch believes that the luxuries which the few enjoy represent the earnings of the many, for which a fair equiv- alent has not been rendered. Mr. Bellamy believes it impossible for one man to acquire a million dollars honestly, and that our millionaires should be made to divulge the means by which they acquired their wealth. The editor of the Labor Leader thinks that except in rare cases of lucky venture our very wealthy people may be justly charged with having committed robbery. Those who assembled at the Labor Conference seem to have been imbued with the idea that through the accumu- lation of large fortunes in the hands of a few, the poorer classes of the United States are being reduced to a condi- tion of servitude very like that which is understood to exist in some parts of the Old World. Collectively considered, the utterances of these laborers and labor leaders amount to a resolute and positive protest against what they regard as the robbery and oppression of labor by capital ; and an earnest appeal to the masses to dethrone the power which, according to their belief, is weighing them down. Labor is blamed, more or less, for muttering and threat- ening and striking. Nevertheless, let any of us, let a moral or Christian cap- italist, for example, one who is happy in the belief that he THE LABORER AND THE CAPITALIST. desires to do that which is nearest right for all concerned, ask himself the question: "If I were in the ranks of labor, and really believed that capital was constantly gath- ering my earnings to itself, thereby rendering me more and more dependent upon the good graces of the rich for a livelihood for myself and family, would I not mutter? would I not threaten? would I not strike? Indeed, would I not do whatever seemed necessary to my own independ- ence, and to the independence of those who have natural claims upon me, for at least an opportunity to keep for their own use that which their hand and brain honestly earn?" It is plain that from the workingman's standpoint he has the highest possible motive for the energy he is putting forth to gain a larger share of the joint efforts of capital and labor. Through this he sees, or thinks he sees, not only a benefit for himself, but a larger industrial freedom and a smoother path for his posterity than his own weary feet have ever trod. It is not to be wondered at, therefore, that labor is per- fecting organization, national and international, and mak- ing attempts more and more powerful to control legislation. This does not necessarily foreshadow the bloody revolu- tion and reign of terror that some are looking for; but it makes it very plain that the world is confronted with a new economic problem that must not be ignored. The truth of this proposition will be more forcibly felt if we stop to consider the moral aid and the number of strong recruits coming to the support of labor from those who are not laborers. THE LABORER AND THE CAPITALIST. It has been many times stated that were it not for a few shriekers among those who do not own their homes, who have not sufficient property or income to render them decently independent, who are obliged to sell their services in the market for any price offered, labor would be con- tented and peaceful. We have writers and speakers who have gone so far as to say that the quarrel with the present regime, the industrial discontent, and the sociahstic propa- gandism now going on have resulted mainly from the efforts of anarchists from the Old World, who have been joined here by disappointed pohticians and such badly balanced individuals as have been unsuccessful in other directions, and that the adherents of their doctrines are composed largely of the lazy, the dishonest, and the shiftless poor. It is important that we have the truth in regard to this matter early in the discussion. Let us have all the factors in the case. If labor is being stirred by a general impulse, who besides laborers are creating that impulse? If laborers are con- vinced that capital is robbing them, do they stand alone in that behef ? If socialistic ideas are being propagated, are there respectable propagators outside of the labor ranks ? Never had I so realized the magnitude of the capital and labor question, and felt the nearness of a great crisis, as when the full truth dawned upon me regarding a force not identified with labor, but which can and does (in conse- quence of its high character and exceptional intelligence) influence the outside world against the present regime a thousand times more than those in the ranks of labor could 10 THE LABORER AND THE CAPITALIST. possibly do. It is due to the laborer that this fact be made to stand out clear as against the accusation that only the dependent and the dishonest, etc., share his opinions. On the 18th of October, 1891, the Rev. Dr. R. Heber Newton preached a sermon, concerning which the New York World of the next day reported as follows : "He said he agreed with a potentate who was frank enough to admit that we had gone wrong in not holding mineral resources in fee for the spread of education. Lines of travel should be con- trolled by the government. Then he concluded ; " In a cross and grumbling mood Carlyle once said that the ideal before the American people was to place a turkey in the pocket of every poor man. Not a wholly ignoble idea, considering what was there before. If, instead of a bone, a breast of a chicken can be carried, so much the better. The vast mass of men are born into the most pitiful circumstances. You and I know the trouble of living under adverse conditions. What is to be done, then, when from the cradle to the gTave it is only a struggle for a crust of bread ? " This distinguished and justly popular divine thinks that government ought to control mineral resources — gold, sil- ver, copper, iron, tin, lead, coal, etc., and the lines of travel as well. He evidently believes that placing the vast wealth of mines and lines of travel under the control of govern- ment, instead of allowing it to remain in the hands of in- dividuals, would improve the condition of the masses. Whether Dr. Newton's theory be sound or otherwise, the principle his words suggest is that of socialism ; indeed, government ownership of mines, lines of travel and com- 11 THE LABORER AND THE CAPITALIST. munication, is advocated by socialists as the first necessary step toward government control of all industries now yield- ing a profit to private capital. A few weeks prior to the Presidential election of 1892 there appeared in the New Nation (Bellamy's paper) an account of a Presbyterian Conference held in Boston. It stated that one of their prominent preachers declared that socialism was a Christ principle, therefore it had come to stay. If the remark provoked any opposition in the meet- ing, it was not reported. In a synopsis of the proceedings of the New York Methodist Conference, the World, April 4, 1892, said : "Rev. Dr. North presented the report of the Committee on the question of the relation of the Church to Socialism. The report was in part as follows: " A new political economy is now growing up among us, which must be recognized. The conviction is certainly growing that many of the existing evils of society should be cured. No more important question can occupy the attention of the Church than the problem called Socialism. " The Methodist Episcopal Church, having given so much atten- tion to slavery, intemperance, and ignorance, should also devote some time to another great evil — the alleged alienation of the poor from the church. We believe that this prodigious inequality in the ownership of property is a frightful evil." Observe the language used by these gentlemen of edu- cation and culture : " A new political economy is growing up among us which must be recognized. . . . No more important question can occupy the attention of the 12 THE LABORER AND THE CAPITALIST. church than the problem called Socialism. . . . We believe that the prodigious inequality in the ownership of property is a frightful evil." Whether these people are right or wrong in their con- clusions regarding Socialism and the ownership of prop- erty, they are, nevertheless, powerful molders of pubHc opinion, and they belong to an intelligent and highly respected class of citizens whose name is legion. M. Paul Deschanel, of the French Chamber of Deputies, was sent by his government to this country in 1891 to study the Socialistic and labor problem. Prof. J. R. Bu- chanan quotes him in the Arena as follows: "I do not doubt at all that the civilized world is rapidly ap- proaching, if it has not already reached, a period which will give birth to such a crisis as was the French Revolution, or perhaps to even a greater crisis. It is because we recognize the gravity of the situation that such men as myself are making our strongest efforts to understand the rights and the wrongs of the laboring classes, with the view of giving them at least a measure of what is their due and so averting the terrible disaster which would result should they arise in their might and renew the scenes of terror and bloodshed by which their ancestors wrested their rights from the aristocracy which had trodden upon them, as the Social- istic orators of to-day declare that the classes they represent are being trodden upon.'' Not long since a chaplain of the American Congress prayed as follows : **Give ear, O God of Jacob, and awaken us to see the danger which threatens the civilized world, a revolution more tremendous 13 THE LABORER AND THE CAPITALIST. than any of whicn history tells, in which the scenes of the Reign of Terror may be enacted in every capital in Europe and America. For, long, the few have mastered the many because they under- stood the open secret, the tools to them that can use them; but now they have learned the secret of organization, drill, and dyna- mite. Rouse the rich of the world to understand that the time has come for grinding, selfish monopoly to cease, that corporations may get souls in them with justice, honor, conscience, and human kindness. Teach the rich of this country that great fortunes are lent them by Thee for other purposes than to build and decorate palaces, to found pi'ivate collections of art, to stock wine-cellars, to keep racing studs and yachts, and find better company than hostlers, grooms and jockeys, pool-sellers and bookmakers. Teach them, O God, that it is Thee who has given them power to get these fortunes ; that it is to prove them, to know what is in their hearts, whether they will keep thy commandments or no, and that these commandments are " Thou shalt love the Lord thy God with all thy heart, and thy neighbor as thyself"; that if the rich men of our land keep these commandments, the poor wall follow the ex- ample, and we at least will be saved from the days of tribulation that are fast coming on all the world. Help us, O God, and save us." One Congressman asked unanimous consent that this prayer be printed in the Record', another objected on the ground that it was an incendiary speech. Call the prayer what you please, the sentiments expressed by the chaplain have been matched and overmatched again and again in our national legislature within the last few years by men of all parties. Instance the speech of Con- gressman Colquitt {Congressional Record, Dec. 1, 1890, to Jan. 8, 1892, page 452) as follows : 14 THE LABORER AND THE CAPITALIST. *'In the iron trend of centralized power and the corruption of gigantic wealth, shall we drift back into the reality of a mo- narchical regime, with but the semblance of freedom ? . . . "I turn to the social chasm, ever widening by the false distribu- tion of wealth. The disparity is enormous. Consider the cost of a dollar to the poor. . . . Consider the ease and luxury of the rich. "T see the driven masses of the world's workers, the delver in the coal mine, on his side crawling to his dark task, lamp in his hand, lying down, no room to stand ; the plodding farmer, with his hoe at noonday in the burning sun ; the grim smith, wielding wearily his ponderous hammer ; the brawny engineer, in his mid- night vigils, with his strong hand upon the throttle of his pulsing monster ; and the other multitudinous toilers. *' Trace the earning of the dollar that pays these pressed labor- ers. See the sewing-woman's mite and the beast of prey that absorbs it. . . . "To the laborer belongs the fruit of his toil ; but does he get it? Is there no predatory class standing by, ready to seize upon it ? See the poor, overworked wight, so abject and pitifid. Has any one the heart to plunder him? The ever- widening social chasm answers the question too well. " Consider the temper of the producing classes. They will not always bear submissively. . . . History is full of their des- perate uprisings for relief." Mr. Colquitt believes that the false distribution of wealth is rapidly widening the gulf between capital and labor; and that capital is practicing so intolerable a tyranny over the working-people that a continuance of the same will sooner or later result in a general and possibly a violent uprising. 15 THE LABORER AND THE CAPITALIST. According to the New York World, June 27, 1892, Judge Walter Q. Gresham was asked by a reporter what abuses he thought threatened to disturb pubhc tranquillity, and he answered as follows : ''I would say that the control of elections and legislation by the corrupt use of money more than anything else menaces popular government and the public peace. If these abuses are not speed- ily checked the consequences are likely to be disastrous. If the people are convinced that they cannot rely on the ballot as a means of expressing their choice of men and measures, there will be a revolt the like of which the country has not yet witnessed. . . . The most insidious of all forms of tyranny is that of plutocracy." It is possible to imagine that a Republican may suggest that Colquitt was a Southerner, and might have been moved by jealousy of Northern wealth and political power, and that Judge Gresham was a member of a Democratic cabinet. If we assume that Mr. Colquitt and Judge Gresham spoke from unworthy motives, or that they were blinded by Dem- ocratic or Southern sympathies, then what shall we say of the Methodist Conference, which was composed largely of Republicans, with Northern sympathies? In the August number of the Arena, 1890, Prof. J. R. Buchanan quoted Bishop Potter as saying that our pluto- crats were dangerous alike to liberty and religion. The same author quoted Bishop Spaulding as using the follow- ing language : "Our rich men — and they are numerous, and their wealth is great — their number and their wealth will increase ; but our rich men 16 THE LABORER AND THE CAPITALIST. must do their duty or perish. I tell you, in America we will not tolerate vast wealth in the hands of men who do nothing for the people." In conversation with a distinguished lawyer and military officer who had command of troops at Homestead after the riot which took place in the summer of 1892, he said that he had been very much astonished at the extent and warmth of the sympathy for the strikers, and the sources from which it came. A judge of one of the courts had said to him in private conversation that property was altogether too un- equally divided, and that a leveling-up must take place sooner or later, but that just how it would be brought about he could not tell. Dr. Lyman Abbott says that the great problem of politi- cal economy in the past has been how to get wealth, but that the great problem of political economy in the future will be how to distribute wealth. This is a mild way of saying that the product of the joint efforts of capital and labor is not being fairly divided. In a lecture delivered in Chickering Hall, New York, that distinguished orator and logician Prof. Felix Adler ex- pressed the hope that the time was near when labor would receive a larger and juster share of the product of industry. About two years ago ex-Senator Ingalls, one of the most brilliant of American orators, delivered a lecture at Glen Echo, District of Columbia, to a vast audience composed largely of religious and well-to-do people. He expressed a doubt as to whether a hundred thousand dollars were ever honestly earned by one man. The cheering of this senti- 17 THE LABORER AND THE CAPITALIST. ment was hearty and almost unanimous. It is not too much to say that the same sentiment would be as heartily ap- proved by any popular audience in Christendom. This feeling among the masses Edward Bellamy would call Socialism, the growth of which he thinks is clearly indicated by the immense sale of his book. He believes that had " Looking Backward" been pubhshed twenty years ago it would have fallen dead from the press. It is proba- ble that at that time the work would not have paid the cost of printing. But the increasing unrest and growing desire to study economic subjects have given Bellamy's book a wide sale ; but what is more significant is the fact that, although the work is in the hands of all classes of people, adverse criticisms have been very few, and not one-tenth part as widely read as the book itself. The first to call the writer's attention to that now famous work was a wealthy citizen of Massachusetts, a manufacturer, and a banker as well. He thought it contained more sound philosophy than the world had yet dreamed of, and gave it as his opinion that as an author Edward Bellamy had come to stay. However, call it Socialism, or give it some other name, the fact remains that an overwhelming majority of the world's inhabitants, good and bad, learned and unlearned, are of the opinion that the product of industry is not being divided with any approach to fairness; (hat the colossal fortunes we see all around us have not been honestly earned by the heads and hands that now control them ; that the laws are dictated by plutocrats in the interest of plutocrats ; that the richer the few become, the harder it is for the 18 THE LABORER AND THE CAPITALIST. many to make themselves comfortable, and that the duty of the hour is to so change social and economic methods that each and every one shall have the full results of his own efforts. This is an honest ambition for labor and its friends under the belief they now hold. It is contrary to man's nature to rest quietly while he is being robbed, or while he thinks he is being robbed ; and the still more im- portant fact is that it matters not whether the aforesaid belief be founded in truth or whether it be an hallucination — it means unrest, dynamite, and nobody knows what else, until either a fair division of the product of industry shall have been assured or the hallucination regarding it shall have been destroyed. CHAPTER 11. HOW SHALL WE MEET THE ISSUE? On the 28th of January, 1891, one of the leading New York daihes (the -Press) had the following : "We notice that some of our contemporaries pretend to poke fun at the Farmers' Alliance. The movement is one that, how- ever faulty some of its aims and questionable the methods of cer- tain promoters, deserves respectful attention, and that the Press proposes to give it. Whatever the essential wrong may be that has aroused a vast body of toilers to an emphatic political protest, it is the duty of the Republican party to ascertain that wrong and provide a remedy." What this journal assumes to be the duty of the Repub- 19 THE LABORER AND THE CAPITALIST. lican party is unquestionably the duty of all parties in all lands. The unrest is universal, which proves that the cause is also universal ; and there can be no rational doubt that that cause is the unequal distribution of wealth. This being true, it matters not how much the masses are misinformed regarding the issue they urge — our first duty is to prepare to meet it wisely. And if we do meet it wisely and in a way to win a peacef id solution, it will be because we are conscious of the nature, magnitude, and disposition of the forces with which we have to grapple and show a disposition to deal fairly with all concerned. The distribution of the product of industry constitutes a problem reaching deeper and extending farther than any that has ever before confronted the race. Religious ques- tions and controversies have rarely extended beyond the limits of one or two countries — oftener they have been con- fined to parts of countries ; but the question of the dis- tribution of the results of toil knows no religion, no coun- try, nor stops at the boundary line of any State. Then, too, it is rugged and obstinate from long years of steady development. It is as old as the wage system. It was born when it became evident that some were accumulating vastly more than others, with apparently no more effort and no more economy. Many attempts have been made to strangle it and stop its progress. But on, straight on, it travels, with heavier tread and more hurrying pace, leaping mountains, deserts, seas, pushing other issues aside, as the mighty glacier pushes the smaller cakes of floating ice that chance to lie in its pathway. 20 THE LABORER AND THE CAPITALIST. It is gratifying to see the people becoming so much inter- ested in political economy. It promises more happiness and safety for all, through a clearer understanding of the rights and duties of all. Yet jjolitical conditions are bewildering. Capitalists have their political schemes wliich they wish to promote; they also have the bulk of the money, which, even when legiti- mately used, contributes powerfully toward the success of parties. The laboring people also have their pohtical schemes, together with a majority of the votes to be cast, and danger lurks in the fact that after all both the laborer and the cap- italist may rely more upon their power at the polls to achieve immediate success than upon the better education of all in the science of economics. A gentleman of some distinc- tion recently complained that our legislators were making statutes according to an unreasoning popular demand. Sev- eral States, he said, had already passed anti-trust laws, etc., that were clearly unconstitutional, and likely to do harm ; but he thought going into the courts and there demonstrat- ing the unconstitutionality of such laws would remedy the evil. He believed the people were wrongly informed regard- ing the effect of trusts and corporations, but did not think it worth while to go back of legislatures and courts to edu- cate pubHc opinion. "We will," said he, "plant our bat- teries upon the hill-tops and defend our position from the higher level, and not skirmish in the woods and byways below." This view of the case fails to grasp the situation ; it sees not the issue j it does not recognize the power and temper 21 THE LABORER AND THE CAPITALIST. of the j^eople at this most extraordinary juncture in human affairs. Public opinion is often wrong for a time ; nevertheless, it always thinks it is right ; and in these days of general sus- picion, no sooner is a legal decision obtained contrary to that opinion (especially by a corporation) than foul play is suspected. If the court has not actually been bribed, cor- rupting influences are believed to have been brought to bear somewhere in the case. At any rate, concentrated wealth is supposed to have succeeded in thwarting the ends of justice, and the masses are less friendly toward associated capital than before the decision was rendered. Our people are law-abiding, and respect the decisions of courts up to a certain point, but nothing has been more clearly demonstrated in American experience than that a law, to be practically operative, must be backed by public sentiment. The fugitive-slave law was believed to be constitutional, even by Danial Webster and Henry Clay, and the famous Dred Scott decision by our Supreme Court certainly did not contradict the letter of the Constitution, but both the law and the decision contradicted public sentiment, and everj' attempt to enforce or defend them only exasperated the people, and rendered the destruction of slavery more swift and certain. The popular belief is that an emergency is here, and the people are defending what they believe to be their rights with an energy, a fortitude, and an independence worthy of free citizens. They are very Httle concerned about what 22 THE LABORER AND THE CAPITALIST. the courts have said, are saying, or are likely to say, regard- ing, not the wisdom, but the constitutionality of, here and there, a legislative enactment. They are looking deeper and their vision sweeps a broader field. They are con- sidering the rights of man abstractly, and trying to measure the extent of his natural relation to the State, which they believe is greatly interfered with by existing statutes and poHtical methods. And while it is safe to say that no considerable portion of our people have a thought of violating any statute or disre- garding legal decisions, yet they realize as never before that they are the tribunal of last resort, the sovereign power in the land, the final arbitrators of all questions relating to the public welfare. While courts are trpng individual causes the people are trying the courts. In short, all estab- Hshed methods of procedure — legislative, judicial, economic, or what not — are being brought to the common throne of reason and the bar of pubUc conscience. Monopoly, plu- tocracy, tariff, socialism, etc., etc., must here plead, and here stand or fall. Say what you will and do what you will, the general rule of conduct to be followed and the laws that must finally be obeyed will be such as the great public see fit to dictate. Whether these rules and laws are to be just or unjust, whether they hinder or facilitate progress, whether they promote peace or stir up strife, will depend entirely upon how wisely public sentiment is educated. In short, it is self-evident that the one possible perma- nent remedy for the unsatisfactory conditions that now 23 THE LABORER AND THE CAPITALIST. environ the laboring and capitalistic world — the one safe way to meet the issue before us — is through a better edu- cated pubHc mind regarding the natural relation of capital and labor, and the economic principles that must sooner or later bind them both. Labor began to mutter and organize in good earnest in the United States in 1869, when every person had employ- ment that wanted it, and the purchasing power of wages was vastly greater than the world had before known, and nearly double what it was prior to 1860. Thus the question is not one of prosperity, but of the distribution of prosperity. Not long since, near Central Park, New York, one of the wealthiest and most distinguished capitalistic lawyers in the country addressed the writer substantially as follows : "Mr. Willey, there are two sides to the capital and labor ques- tion. There is something wrong somewhere when two men, ap- parently equal in intelligence, in energy, and in the practice of economy, begin business at the same time and place, but at the end of, say, twenty years one counts his wealth by the million, while the other remains in poverty. This is taking place constantly. We see it all around us, and I tell you that while a few live in palaces and sweep through Central Park and along our main thorough- fares in costly equipages, with train and attendant, so to speak, the great mass of hard-working people can never be made to be- lieve that there has been a fair division of earnings, and the clamor for a more equal distribution of the good things of life will not cease while such conditions continue." This statement is especially valuable as coming from a 24 THE LABORER AND THE CAPITALIST. rich man. Then, too, it suggests ideas which are exceed- ingly important at this time. It reminds us that there is constantly before the laboring-man what to him is an ir- refragible argument in support of the theory that he is being robbed and his opportunities for material advancement destroyed. He casts his eyes abroad and beholds mammoth ships on the sea and countless trains on the land ; rich dwell- ings and costly business structures tower high in air and look contemptuously down upon homeless poverty below. He gazes upon these huge piles of wealth and soliloquizes : " The great God made the earth and the raw material therein for the equal benefit of all his children who are willing to do honest work. These bricks have been molded from clay, this iron dug from the mines, this lumber culled from the forest, these stones cleft from the quarry, brought hither and placed in their present proud position by the sons of toil, who now own but an insignificant part. Even the land, especially that of the cities, is held by the few, and the many are excluded. Surely this is not right ; the divi- sion between capital and labor has not been just; and if ever equal opportunities existed, these vast accumidations of wealth have destroyed them and created a gulf between capital and labor, between rich and poor, that is becoming harder and harder to cross." Such are the convictions of labor, and such are the con- victions of not a few of the well-to-do and some of the very rich. There are capitalists who will take all they can legally get without regard to the effect upon labor. There are 25 THE LABORER AND THE CAPITALIST. laborers who would deal just as mercilessly with capital. But I believe that in the main both capital and labor desire that each shall prosper as they deserve. The trouble is they do not see clearly as to what really is deserved, therefore each finds it difficult to judge of the motives that govern the conduct of the other ; and a long step will have been taken in the direction of lasting peace and a more extended brotherly love when it is generally under- stood that an honest conviction cannot be suppressed — only hindered. The opposition to trusts and large aggregations of wealthy etc., involves an idea, and the only way to down an idea is to argue it down. If it cannot be conquered in that way, it is because it is true, and therefore hath eternal life. If monopoly, plutocracy, and large fortunes actually stand across the people's pathway of advancement, as many beUeve, their destiny is oblivion sooner or later. It is not more im- possible to stop the march of the mighty river which, fed by countless streams, leaps Niagara on its way to the broad ocean, than to stay the tide of human progress toward a larger liberty and a more perfect happiness, the desire for which dwells in a greater or less degree in every human bosom, in every land, and on every sea. Let us, therefore, clear the road by honest thought and by fearless, consider- ate, non-partisan debate. 26 THE LABORER AND THE CAPITALIST. CHAPTER III. MONOPOLY. Judge David Brewer, of the United States Supreme Court, delivered a speech July 4, 1893 (see New York Independent, July 14, 1893), from which the following- is copied : "A capital combine may, as is claimed, produce better, cheaper, and more satisfactory results in manufacture, transportation, and general business ; but too often the combine is not content with the voluntary co-operation of such as choose to join. It grasps at monopoly, and seeks to crush out all competition. If any indi- vidual prefers his independent business, however small, and refuses to join the combine, it proceeds to assail that business. With its accumulation of wealth it can afford for a while to so largely un- dersell as to speedily destroy it. It thus crushes or swallows the individual, and he is assaulted as though he were an outlaw. "So it is with organizations of labor ; the leaders order a strike ; the organization throws down its tools and ceases to work. No individual member dare say, " I have a family to support ; I pre- fer to work," but is forced to go with the general body. Not con- tent with this, the organization too often attempts by force to keep away other laborers. It stands with its accumulated power of numbers, not merely to coerce its individual members, but also to threaten any outsiders who seek to take their places. Where is the individual laborer who dares assert his liberty, and act as he pleases in the matter of work ? where is the individual con- tractor or employer who can carry on his business as he thinks best? . . . "It is true that there is a commendable effort constantly being 27 THE LABORER AND THE CAPITALIST. made to secure the liberty of the individual; but are we forever to be calling out the militia to protect property from the hands of strikers ? are the Pinkertons to become a constant factor in our civilization ? Is it not time that the dormant energies of our na- tion were aroused and a speedy and summary stop put to every such trespass on any man's liberty ? Are we going to drift along until this contest ends in a bloody struggle? Must our children pay for securing the real liberty of each individual the price that the nation paid a score of years ago to abolish human slavery?" These words of the distinguished jurist are full of serious inquiry and solemn import, and all the more so because the author is removed from the temptations that so often bias the opinion of the politician and the citizen out o£ office. Judge Brewer has practically a life lease of one of the high- est offices within the gift of the nation, and a guaranty of a salary sufficient to more than meet any financial demand that is likely to be made upon him. It cannot be denied that the conditions exist as he describes them, and that the lib- erties of the individual appear at first glance weUnigh crushed. Here and there is an employer opposed to trusts and combines : but over him hanjrs the tremendous weio-ht of a vast amount of accumulated wealth ready to crush him if he dare assert his individuality. Again, there are workingmen who object to combines in their ranks; but they are confronted with an overwhelm- ing majority of their kind. In fact, a large preponderance of the very energy, capitalistic and laboring, which Judge Brewer would summon to break the force of the combines, 28 THE LABORER AND THE CAPITALIST. has already joined the combines or is co-operating with them. Then, too, the combines are not without argument to support their position and defend their practices, and not a few of these arguments are based upon lofty humanitarian principles and flow from the purest reason. For example, some of the excuses offered for the rigid labor code, and the apparently cruel treatment of non-union men by their brother-workmen and by labor organizations, is that the labor market is so overstocked, and the tendency of a certain class to accept wages that will not afford a com- fortable living for respectable Avorkmen is so great, that severe measures are indispensable to the good of the whole. If this argument is not satisfactory to the fullest extent, there is, nevertheless, a part that cannot be overthrown. The principle that the few must not be allowed to stand in the way of the progress of the many is fundamentally correct. Regarding capitalistic combines : The capitalists say that the fact that more than thirty per cent, of those who engage in business on their own account do not succeed, and the multitudinous failures among men with established business reputation and once large property resources, proves that the margin on capital invested in trade and manufacture is ruinously small, and that the trust and com- bine are necessary to prevent the fierce competition that has so shrunk profits that the equilibrium of commerce and in- dustry is everywhere disturbed, and the continued progress of business enterprise seriously threatened. If these are not valid arguments in favor of capitalistic combines, they are certainly very plausible excuses. 29 THE LABORER AND THE CAPITALIST. However, in the present state of the public mind, what- ever of tyranny is practiced by labor organizations is gen- erally looked upon as a matter of necessity that has grown out of the avaricious conduct of monopolies and the merci- less treatment of the employee by the employer, while the combinations of capital are popularly regarded as entirely unjustifiable — and their growth looked upon as dangerous monopoly. Most of those who have achieved financial success claim that their present wealth, or that the foundation for the same, was the result of self-denial and a careful saving of earnings at a time when more hours were required for a day's work and the wage paid to labor was from 50 to 200 per cent, below what it is at the present time. As a rule these men are the leading monopoHsts of to-day, and, hke the laborer, they are jealous of what they beheve to be their rights. They feel that their efforts have not lessened the opportunities of the masses, but increased them through the opening up of new avenues of trade and by creating new demands for labor. Naturally enough, then, they regard a great many of the complaints made against monop- oly and large fortunes as without excuse and calculated to lead to a reckless fanaticism and an unreasoning crusade against the rights of property. The laborer and the capitalist can be brought to an un- prejudiced discussion of the subject of monopoly only after a distinct understanding has been reached regarding what monopoly is and who are really concerned in it. The gist of Webster's definition of monopoly is that it is 30 THE LABORER AND THE CAPITALIST. " a special privilege," but this definition scarcely touches monopoly as it exists in the United States. In olden times, in other countries, special privileges were often granted, but a higher civilization has greatly reduced the number — indeed, they are rapidly disappearing, even in the Old World. In our own country there never have been special privi- leges worth considering except such as are granted to au- thors and inventors. Charters for railroads, banks, joint- stock companies, etc., etc., are granted practically without limit and for a sum that is merely nominal. What our people look upon as monopoly relates not so much to the enjoyment of a special privilege as to the amount of ivealth that is gathered and controlled by indi- viduals and corporations. A thousand privileges might be granted, but if they did not result in more than an ordinary amount of wealth they would not be thought of as monop- olies. Again, so far as there is any monopoly in this country it flourishes as well under the ordinary grants of privilege, such as deeds, etc., as under charters. A. T. Stewart be- came as much a monopolist in trade without being incorpo- rated as Vanderbilt in transportation with his charters from State governments. Indeed, there is usually greater opportunity to practice monopoly under the ordinary grants of privilege than under charters, since charters almost invariably carry with them restrictions not common to other conveyances. So far as it relates to privilege the peanut vendor Avith 31 THE LABORER AND THE CAPITALIST. legal permission to control a stated portion of the sidewalk has a monopoly no less than the Vanderbilts with their railroads. The privilege granted the peanut vendor does not prevent others from obtaining like privilege on another sidewalk, or on another part of the scmie sidewalk, for that matter; neither does the privilege granted the Vanderbilts prevent others from obtaining the right to plant railroads wherever such privilege has not already been granted. In fact, the only material difference in the monopoly of the peanut vendor and that enjoyed by the Vanderbilts is in size, not in kind; in extent, not in principle. Grocers, lawyers, shoemakers, etc., are to all intents and purposes monopolists. They have a legal and exclusive right of possession of a specified property, and under and through such legal right they monopolize their respective lines of business up to the limit of their abiHty. Who does more or less than this? The New York World, April 11, 1892, used the follow- ing language : "What the country needs is an honest, earnest movement against all monopolies and the enactment of laws by Congress and State Legislatures that will effectually kill and bury the evil." Suppose we join the New York World, the good chap- lain (previously quoted, who thinks "grinding, selfish mo- nopoly must cease"), and others holding the same opinion (I doubt not they constitute a vast majority of all the people) for the purpose of destroying monopoly. Where 33 THE LABORER AND THE CAPITALIST. will we commence ? Where does " grinding, selfish monop- oly" begin, and where does it end? Let us see; the wealth of earth, equally divided, will amount to somewhere in the neighborhood of $200 to each inhabitant. Now, if no one individual possessed more than $200 of value, what we call monopoly would have no ex- istence. The starting-point of monopoly, therefore, is where one begins to hold more than an equal share of the world's property. The existing condition is that Jones is holding $1,000, Brown $5,000, Thompson $10,000, Snyder $20,000, Gordon $50,000, Higgins $100,000, Cartwright $1,000,000, and somebody else $10,000,000. All these are monopolizing vastly more than an equal share of the world's wealth. Now, where shall we draw the line, and say that those above are harmful and those below are not? If large monopoHsts grind and oppress, the same must be true of the smaller. Human nature is the same every- where, and business methods differ but very little. There- fore, if monopolists are crushing the peoiDle, ten small ones will crush as many below them as one ten times larger will crush below it. Where, then, is the logical stopping-place in the destruction of mono^^olj, until no one person is al- lowed to hold more property than another ? While our means are yet limited and we cut but a small figure in the commercial world we are not conscious of being monopolists ; yet, if we are not monopolists, what are we ? We practice the principle as vigorously as the richest cor- poration on earth. In fact, we are precisely where the 33 THE LABORER AND THE CAPITALIST. great monopolists of to-day once were ; controlling a smaU business, enlarging it as rapidly as possible, and indulging the hope that sooner or later our possessions will rank among the largest in the land. There is a sublime sentiment in Whittier's poem entitled " What the Voice Said," which seems to me to apply to our case so far as it relates to monopoly. This is it : "Earnest words must needs be spoken When the warm heart bleeds or burns With its scorn of wrong, or pity For the wronged, by turns. But, by all thy nature's weakness, Hidden faults and follies known, Be thou, in rebuking evil, Conscious of thine own." The reader will observe that I have not undertaken to discuss the merits of monopoly. I have simply been look- ing for the real root and substance of the thing, and trying to ascertain our own relations and the relations of all men to it. If we have found that, although we inveigh against monopoly, we are nevertheless practicing monopoly, it will naturally stimulate us to look deeper into the subject, and, if we find the principle to be wrong, I trust we shall be all the more careful to exercise the precaution suggested by the poet — "Be thou, in rebuking evil, Conscious of thine own. " 34 THE LABORER AND THE CAPITALIST. CHAPTER IV. PLUTOCRACY. Let US now glance at that twin brother of monopoly, called plutocracy. What is it ? Webster's Unabridged gives the following as the defini- tion of plutocracy : "A form of government in which the supreme power is lodged in the hands of the wealthy classes alone ; government by the rich ; also a controlling or influential class of rich men.'''' Of course nobody claims that we have a plutocratic form of government; therefore when we speak of plutocrats or plutocracy in the United States, we mean rich men who are inclined to use the power of their wealth and position to control the masses, especially in the realm of politics and to shape legislation according to their own notion. One very important fact necessary to consider in this connection is that neither money nor wealth necessarily constitutes one a plutocrat. Some of the most influential poKticans (politi- cal plutocrats) in the United States possess comparatively little property. And in the poorer districts are found men who cannot command a hundred dollars, yet their pluto- cratic power among their fellows is almost absolute ; in fact, plutocracy is everywhere. Let us suppose, for the sake of argument, that the laboring people undertake to organize a party of their own, ignoring all other parties and excluding plutocrats. How will they go about it ? The leaders will first council together ; but, then, these leaders are plutocrats, they dictate the political action of the rest. They are to their 35 THE LABORER AND THE CAPITALIST. fellows what tlie wealthier political plutocrats are to theirs ; and when their org-anization is complete orders will issue from headquarters and pass down the line from plutocrat to plutocrat, and the rank and file will begin their campaign march, keeping step to the music of wage-earning plutocracy. We are so unfortunate as to have a class of men among us who are unprincipled enough to sell their vote and poHt- ical influence for money, and the popular behef is that large fortunes are almost the sole progenitors of trading political plutocracy. Take notice, campaign funds are not contributed entirely by the very rich ; far from it ; indeed, it is often complained that the rich are more niggardly in their contributions for such purposes than those of smaller means ; and, mark you> the less wealthy contributors do not insist that their dona- tions shall be honestly used any more than do the richer class ; therefore, so far as political funds are used for cor- rupt purposes, the small plutocrat is as guilty as the larger. Again, the creatures who will sell their vote or political influence for money will be governed in their action by the " amount going around," as common parlance has it ; that is, when but little money is to be had they will sell for less, so that if the larg-e fortunes did not exist smaller ones would have the same plutocratic power. The corruption in politics, then, is not due to the larger fortunes, but to im- morality and want of manhood. In the popular mind of to-day, the word rich and the word plutocrat mean about the same ; to wit, tyranny and oppression. 36 THE LABORER AND THE CAPITALIST. But who are the rich? and where do they reside? Mark you, rich and poor are relative terms, and whether one is rich or otherwise depends more upon where he is located than upon the number of dollars he can command. For example : A man is probably richer in the rural dis- tricts of New Hampshire with fifty thousand dollars than he would be in Boston or New York with a million. The greater cost of living and other larger necessary expenses would probably consume the million in either city in less time than the smaller expenses would consume the fifty thousand in the rural district. Forty years ago, in that part of the country where I spent most of my boyhood, twenty thousand dollars was an immense fortune ; a man with ten thousand was considered rich ; while one with five hundred was not counted poor. One is comparatively richer, and so far as plutocracy can affect political results for good or ill he can probably ac- complish as much, with one hundred thousand dollars in the State of Mississippi, for example, as he can with a much larger sum in the State of Massachusetts, the reason being that human nature is the same in both States, while the average wealth is very much less in Mississippi than in Mas- sachusetts. Therefore, supposing the citizens to be equally honest and equally intelligent, a given number of dollars will nat- urally bring much larger results of any kind in the former than in the latter State. Or, to state substantially the same proposition in another way, the lesser capital of the South can control as much in- 37 THE LABORER AND THE CAPITALIST. fluence, political or what not, in the South, as the larger capital of the North can control in the North. Therefore, it necessarily follows that there is as powerful a plutocracy (if you see fit to call it by that name) in the South as in the North — in one part of the country as in another. Rich plutocrats are few, while plutocrats possessing small fortunes are very numerous ; and who can say that one class is less to blame for whatever of wrong comes from plutoc- racy than the other ? Again, if to be rich is to be plutocratic or hurtful to the masses, how many are there, even among reformers, who are not putting forth their best efforts to become rich, which, according to the logic of the hour, will render them injurious to their poorer neighbors ? In short, is it really anti-plutocracy that is fighting plu- tocracy ? or is it the smaller plutocrat fighting the larger ? — the unsuccessful complaining against the successful ? " We have tried as hard as yourselves, we have employed the same business methods, but you have outstripped us in the race for wealth ; you have become rich — we have failed ; therefore you are a dangerous plutocrat." This statement of the case might, without further ex- planation, look as if the writer intended to charge those who oppose the present regime with h3rpocrisy and ungen- erous conduct toward their competing brothers who have gained more property or influence than themselves. Such is not intended, however. The statement is made simply to show the universality of plutocracy. 38 THE LABORER AND THE CAPITALIST. Those who are agitating against plutocracy and monopoly are not necessarily dishonest, nor do they mean to be un- generous toward others. It should be stated, however, that the masses have not gone far enough into the subject of plutocracy to comprehend its reach, the ground it covers, and the logic their position involves, and especially do they fail to realize how far they are willing to practice, and in fact do practice in business and in politics, the very prin- ciple which they so earnestly condemn as plutocratic and wicked. There are many wrongs to be righted, but let it be re- membered that whoever attempts to pluck the mote from his brother's eye while the beam yet remains in his own cannot succeed. CHAPTER V. THE WIDER VIEW. The essence of plutocracy is found in monopoly, and for the sake of convenience we will, for the time being, consider both as expressed in the term Monopoly. Whoever takes the larger view of monopoly cannot fail to be mipressed with the thought that the masses in all civilized countries are freer, wiser, more refined, and possess more property than they did a century ago ; and that all this has come to them, notwithstanding the existence of monopoly. It may be fairly claimed that institutions and things that 39 THE LABORER AND THE CAPITALIST. stand in the way of human progress cannot endure. Pesti- lential diseases, once the terror of every clime, are dis- appearing before the march of science, and human Ufe lengthens as the years roll on : famine, with its long train of himian woes, and religious intolerance, with its merciless fagot, are retiring to more benighted fields ; peaceful arbi- tration is taking the place of war, so that that bloody relic of barbarism, unable to stand the light of modern civilization, is taking up its march to join the retreating plagues of a more ignorant and despotic past. Not so with monopoly. As wisdom, goodness, refinement, and liberty have increased, so has monopoly. Now, since all these have flourished side by side from century to century, without the first visible sign of decay in either, each witnessing progress in the other corresponding to its own growing greatness, may it not be that a harmony exists hetween the principle of monopoly and the commonly accredited elements of human progress, hitherto undiscov- ered by the multitude ? That some friendly relationship does exist between mo- nopoly and the higher development of our race seems to be clearly indicated in the fact that that which we call mo- nopoly begins under the protection of law, whicli is the in- evitable result of civilization, the natural outgrowth of cultivated mind. It cannot be denied that these statutes are spurs to im- provement and noble endeavor. The son of the forest leaves his savage haunts and his home in the wood and submits to the more rigorous discipline of civilized life 40 THE LABORER AND THE CAPITALIST. largely on account of the protection it affords him. Here he may monopolize the results of his own labor; he may fence in the land from which he digs a Hvehhood. He toils, accumulates, and beautifies under the promise that he shall not be obhged to yield up his possessions to whoever may chance to command a swifter arrow or wield a more deadly tomahawk. If we reason from effect back to cause we find that monopoly flows from a principle irrevocably estabHshed in the very heart of nature and exemplified in a greater or less degree in every son and daughter of earth. The average man dwindled and dwarfed in the majestic presence of Daniel Webster. The common debater went down before his logic and eloquence. Before high tribu- nals, where ordinary talent dared not venture, Webster's career was a conquering march. Many a lawyer fell by the wayside, while Webster went on cleaving his way through courts and Senates. All this was the necessary outgrowth of extraordinary talent centered in a single human being by an infinite creative Power. In other words, Webster was one of nature's great monopolists in the domain of intellect. His talent and stamp of mind led him to pre-eminent success in one direction; the same de- gree of what is called financial talent would have led him to success correspondingly great in commercial enterprises. This means what? It means that, as a rule, large accumu- lations of mental power and learning and large accumula- tions of material wealth may be equally the product of nature, both originating in the constitution of the 41 THE LABORER AND THE CAPITALIST, human mind and in surrounding conditions not created by man. Or, to state the fact in another way, Webster's ability to monopolize the attention of the world, secure the most im- portant cases before the courts, and frequently to control public events beyond most other men, was the result of forces which he did not generate. The results that followed were not pleasing to some of the lesser lights, because Webster monopolized so much of a kind of practice and consideration which they coveted. Nevertheless, other lawyers were not hindered by Webster's success; the light of his mighty intellect shone in every direction, and those below him became more successful practitioners in consequence. The power to generate great ideas, the power to command great armies, the power to make great discoveries in the fields of science, the power to move the world with tongue or pen, the power to originate and conduct great industrial enterprises and accumulate large fortunes, — always has been and always will be the inheritance of the few. The popular belief is that such men, in originating and controUing great enterprises, corporations, etc., become pow- erful centralizing forces, destroying the opportunities of the many. This question will be the subject for discussion in the next chapter. 42 THE LABORER AND THE CAPITALIST. CHAPTER VI. DO CORPORATIONS CONCENTRATE WEALTH? The Rev. Josiah Strong, D.D., General Secretary of the Evangelical Alliance for the United States, has written a very interesting book entitled " Our Country." It is gain- ing a very wide circulation ; clergymen are quoting it ex- tensively. The introduction is from the trenchant pen of Prof. Austin Phelps, D.D. In the chapter entitled " Perils of Wealth," pages 174—175, appears the following : "It is the tendency of our civilization to destroy easy gradation from poor to rich, which now exists, and to divide society into only two classes — the rich and the comparatively poor. In a new country almost any one can do business successfully, and broad margins will save him from the results of blunders which would elsewhere be fatal. But with growing population and increasing facilities of communication, competition becomes severe, and then a slight advantage makes the difference between success and fail- ure. Accmmdated capital is not a slight but an immense advan- tage. " To him that hath shall be given." TJiere will., there- fore^ he an increasing tendency totoard the centralization of great wealth in corporations^ which will simply eat up the small dealers. As the two classes of rich and poor grow more distinct they will become more estranged, and whether the rich, like Sydney Smith, come to regard poverty as " infamous " it is quite certain that many of the poor will look upon wealth as criminal." Dr. Strong's idea is that corporations are destroying " the opportunities to pass from the lower grade of society to the higher," and that " there will he an increasing tendency toward the centralization of great wealth in corporations.''^ 43 THE LABORER AND THE CAPITALIST. A gentleman informed me that while he was a member of a Western Senate his constituents kept his desk piled high with letters warning him not to jeopardize his own and their interests by yielding to the demands of associated capital. " Beware of corporations " was the cry from every point of the compass. The prejudice against corporations has arisen mainly from their supposed tendency to concentrate wealth in the hands of a few, and to lessen the opportunities of the many to enter business on their own account, or to obtain a fair share of the results of the joint efforts of capital and labor. The public mind has been so deeply engrossed with this theory that it has not taken sufficient time to consider the subject of corporations thoroughly. Corporations are a necessity of our civilization. In fact, they have aided civiHzation, and civilization has aided them. Indeed, corporations were born of civilization, and nothing less than associated capital as it appears in corporations could have produced the magnificent results Ave see all around us. Scarcely a mine has been opened, a ship launched, a mountain tunneled, a railroad built, a factory reared, or a telegraph wire suspended in the air that has not been accomplished, directly or indirectly, through cor- porations. Why, then, should they make it harder for the people to rise to a more independent position ? Why should they centraHze the results of toil ? In other words, what interest has a corporation that is not common to everybody ? It is ordained that an infinite variety of dispositions, as- pirations, and capabilities should exist together in the hiunan 44 THE LABORER AND THE CAPITALIST. family, but tlie infinite beneficence and wisdom of tlie Author of nature lias linked the interests of all in one end- less chain of universal brotherhood. One man can walk faster than another, because he has longer, stronger, or more nimble Hmbs. The lightning calculator can out- reckon the average mathematician, because he has greater mathematical talent. One can accumulate wealth more rap- idly than another, because he has more financial ability or more favorable opportunity. But the interest of one always remains the interest of the whole. To illustrate : In a certain neighborhood there are three physicians. It is safe to say that one of these does as much as the other two combined. In other words, one physician monopolizes one-half of the practice of the neighborhood, and it may be added that he does it just as effectively as if the govern- ment had granted him the exclusive privilege. There are traders in the same locaHty equally successful in their line. They outstrip their competitors, and at the same time treat their customers just as well or better. These men, and men like them, soon possess more prop- erty than the average citizen. They are quick to see busi- ness openings. It may be that a new railroad promises the best results. They combine their surplus capital, procure a charter, and build the road. Their interests are no less interwoven with the interests of the people now than before. As physicians and merchants, in order to secure the best results for themselves, they were obliged to locate where they were the most needed. Then, in order to be secure them- selves and to make headway against those who were already 45 THE LABORER AND THE CAPITALIST. competitors, or liable to become so, they were obliged to treat the public justly and kindly. The same consider- ation of self-interest will necessarily govern these men in planting and operating their railroad. For their own gain, they will locate where the people most need it, and carry as cheaply as possible to avoid the danger of compe- tition. There is, therefore, no natural reason why corporations should not promote the interests of rich and poor alike. Here comes to mind a conversation with a Wall street lawyer who had been employed to prosecute the Standard Oil Company in a case, the particulars of which he did not relate. I inquired concerning the business methods of that famous corporation. He thought the concern very cruel, and gave it as his opinion that whoever undertook to defend it would land on the lee shore. I told him I had not the slightest desire to defend the Standard Oil Company, since I had never had any con- nection with it. I was after the economics of the concern. It would probably be as difficult to justify all the busi- ness conduct of the Standard Oil or any other corporation as it would be to furnish a complete defense for all the business schemes of individuals. As has been stated in a previous chapter, the people do not regard themselves as at all connected with what they call monopolies (corporations). On the contrary, they look upon whatever wrong, or apparent wrong, these institutions 4G THE LABORER AND THE CAPITALIST. are guilty of as entirely the fault of capital — they caU it the greed of capital. Therefore they are not in a frame of mind to treat the subject with the candor it deserves. A just and dispassionate consideration of the subject of capital and labor in all its bearings can be had only when the masses fully realize the logic of their OAvn position toward large aggregations of wealth and the perfect blend- ing of their interest with that of capital, and how exactly like the large capitalist the small capitalist is. Members composing large corporations are not more avaricious than the world of people about them ; but, for the sake of the argument, and for the purpose of bringing into a clearer light an important principle, we will suppose the Standard Oil Company, for example, to be composed entirely of avaricious people. Now, how does it monopo- lize so much of the oil trade ? A friend, who has been trying to produce oil in a small way answers the question. He says he cannot succeed owing to the fact that the Standard Oil Company sells its product at so low a rate. For this he blames the company. Why not blame the people as well? The company offers oil at a price which the people know will crush small dealers, yet they purchase at that figure. On the principle that the receiver is as bad as the thief, if the company is guilty the people are not innocent. Or, to state the substance of the matter in another way, the com- pany sells at a low price to control the trade and to make money ; the people buy at a low price to save money. Both are lookino- out for themselves, and leavins^ the small dealer 47 THE LABORER AND THE CAPITALIST. to look out for himself. If the company is cruel, what shall we say of the people ? Or, if " avarice " is the word to use, who will say that the Standard Oil monopoly is not as much the result of the avarice of the people as of the company, since the people do not come to the rescue of the small dealers by offering them a higher price for oil? But, leaving all this out of the question, does the Stand- ard Oil Company concentrate wealth in the hands of a few? Imagine the American people contracting for ten million barrels of oil. A hundred small firms can furnish one hundred thousand barrels each at a certain figure ; but the Standard Oil Company, owing to its greater wealth and larger facilities, can afford to discount the offer of the small firms, say twenty cents on a barrel. This will save the people $2,000,000 on their purchase. Now, is it not just and humane — in other words, will not the greatest good come to the greatest number, and will not wealth be more diffused — through letting the contract to the Standard Oil Company? If we patronize the hundred small firms we must pay a higher price for kerosene. Can we afford it? Can the people, for the sake of keeping the small firms in existence, afford it? Such a course would please the small firms, since it would lodge $2,000,000 of the people's money in their pockets, but is it not better for the people to keep this money in their own pockets? Now, the popular question will be. Shall we allow the one concern such power of monopoly, and thus permit the profits 48 THE LABORER AND THE CAPITALIST. o£ the on trade to center in the hands of one great corpora- tion? The public does not consider that by patronizing the Standard Oil Company we practically distribute (leave un- collected) the ^2,000,000, more or less, which the company discounts among sixty millions of people, instead of col- lecting and concentrating it in the hands of small firms. Neither has it dawned upon the masses that a great many more individuals with small means are interested in the oil trade on account of the Standard Oil Company than could possibly be interested if the business was in the hands of private firms. The machinery and other things necessary to produce oil in any considerable quantity cost no small sum, and a man's wealth must reach well into the thousands in order for him to engage in the production of oil on his own account with any prospect of success ; but about one hundred and eighty dollars will give one an interest in the Standard Oil Company at the present time. The small amount of money required to purchase a share of stock has given an opportunity to people of very Hmited means to share in the profits of the oil trade, and has placed the prop- erty of the Standard Oil Company in the hands of a great many people (about four thousand). Hence, whatever of profit we pay to that corporation is more widely distributed than if we paid it to private firms, while not a single laborer less is employed in the oil business. In short, this subject may be summed up as follows : The Standard Oil Company supplies us with oil at lower rates than small manufacturers can afford; it offers the smaller 49 THE LABORER AND THE CAPITALIST. capitalists an opportunity to invest and share its profits ; it employs all the labor that can be employed in the business, whether the oil is furnished by few or many firms, and it diffuses wealth more generally than private firms can. What is true of the Standard Oil Company, so far as it relates to the distribution of wealth, is true of corporations generally. But the fact that private firms have sometimes been driven out of business by the larger concerns has so riveted the attention of the public and so aroused popular sympathy for the small dealers, that the co-operative and distributive nature of corporations is almost entirely over- looked. The popular feeling and method of reasoning regarding this matter are well illustrated in a few words by the Rev. Dr. Strong, which I requote from his statement on page 43, as follows : "In a new country almost any one can do business successfully, and broad margins will save liim from the result of blunders which would elsewhere be fatal." Dr. Strong's theory is that because accumulated capital as it is found in corporations is a great advantage to the wealthy, and has the effect to reduce margins (profit), it therefore has the further effect to lessen the opportunities of individuals of small means to enter business and realize profits for themselves. This is generally regarded as tyr- anny natural to corporations, which means the destruction of liberty sooner or later unless something extraordinary is done to prevent it. 60 THE LABORER AND THE CAPITALIST. But the all-important fact in the case is that the difference in the larger profit from trade and manufacture which ruled before the days of great corporations, and the smaller profit now received, goes to the people instead of to the traders and manufacturers, as it formerly did. To illustrate : We will go back thirty years, during which time the growth of corporations has been the most rapid, and say, without attempting to be accurate, that the average business of the country has been thirty billions per annum, and that the average profit to manufacturers and traders would have ordinarily been ten per cent., or three biUions per annum — ninety bUHons in thirty years — but the growth and competitive power of corporations have reduced those profits, say twenty per cent., or eighteen billions in thirty years. These eighteen billions, then, represent the amount which the people have retained of the profits of industry, which would have gone into the pockets of manufacturers and traders but for the severe competition of corporations, which Mr. Strong and so many intelligent and cultured people like himself think are eating up the results of toil. All this vast sum of money has passed through the peo- ple's hands for food, clothing, homes, etc., etc. And, mark you, no less labor has been employed, and a higher rate of wages has prevailed. How then do great corporations concentrate wealth? Why do they not benefit rich and poor alike ? Indeed, if statistics can prove anything, then it is proved that cor- porations do benefit rich and poor alike. Let us see if this is not correct. 51 THE LABORER AND THE CAPITALIST. On pages 102 and 103 of the statistics of Massachusetts Manufacturers, issued by the Labor Bureau, for 1887 and 1888 appears the following : "In 1887 the number of corporations represented in one thou- sand and twenty -seven (1,027) establishments compared, is but 31.45 per cent, of the total number of establislunents, and only 45.83 per cent, of the number of private firms; yet, these corpora- tions represent the interests of 49.07 per cent, of the total number of investors, and the number of stockholders is more ihaiuffteen times the number of partners.'''' These data prove beyond cavil that the tendency of cor- porations is not to concentrate the profits of industry in the hands of a few, but to diffuse them among the many. Or, to state the same fact in another way, the corpora- tions in question have increased the opportunities of the people to become manufacturers and sharers in the profits of business, fifteen-fold over a proportionate number of private firms. The report continues as follows : "In the manufacture of cotton goods, the 30 private firms rep- resent only 58 persons, while the 81 corporations have their capital stock diffused among 13,901 persons.'' Mark you, thirty private firms represent only 58 owners, while 81 corporations represent almost 14,000 owners. Here is an appropriate place for a statement by a lady writer. (See American Wommt's Journal for October, 1893, page 72, as follows :) "Four hundred years ago, when Columbus came to America, the 52 THE LABORER AND THE CAPITALIST. squaw toiled for her dusky chief; to-day our women drudge for aliens and soulless corporations." This represents the idea prevalent among very many in- telligent women, at least so far as it relates to the relation o£ corporations to the female portion of our population ; but the report from which I have just quoted shows a state of facts which, when they come to be understood, will reverse that opinion. For example, it is there shown that in 708 private firms 29 of the investors were females, while in only 319 establishments conducted by corporations, there were over 6,000 female investors. In other words, where the manufactories were in the hands of private firms, there was only one female owner to about fifty male, while in the corporations there were almost half as many female as male owners. Therefore these corporations have increased the oppor- tunities, not only of poor men, but poor women, to invest their small earnings and become sharers in the profits of business on the whole more than fifteen-fold. The fact that corporate organizations throughout the country are a means by which the profits of industry are more evenly distributed cannot be questioned any more than in the case of the Massachusetts cotton manufactories. It is a matter of figures and a thing of record. The price of the shares of stock and the number of investors are a mathematical demonstration that does not admit of doubt. Therefore we know to a mathematical certainty that the tendency of corporations is not to concentrate, but to dif- 53 THE LABORER AND THE CAPITALIST. fuse, the results o£ industrial energy; not to lessen the opportunities o£ the many, but to increase them. CHAPTER VII. RICHES AKD HONESTY. In the chapter on " Perils o£ Wealth/' pages 174—5 of Dr. Strong-'s work before quoted, appears the following : ''Superfluity on one hand and dire want on the other — the mill- ionaire and the tramp — are the complement of each other. The classes from which we have most to fear are the two extremes of society — the dangerously rich and the dangerously poor ; and the former are much more to be feared than the latter." Following this statement of the learned D.D., and on the same page, the distinguished Dr. Crosby is quoted as follows : "The question which threatens the uprooting of society, the dem- olition of civil institutions, the destruction of liberty, and the desolation of all, is that which comes from the rich and powerful classes in community." On page 173, same chapter, appears the following : **We have indeed some rich men who are an honor to our civiH- zation ; but the power of many millions is almost certain to find its way into strong and unscrupulous hands." Note the words following the last semicolon — " hut the power of many millions is almost certain to find its laay into strong and unscrupidous hands." Again, note the 54 THE LABORER AND THE CAPITALIST. first sentence in the quotation from Dr. Strong : " Super- jiuity on one hand and dire want on the other — the villi- ionaire and the tramp — are the complement of each other." The beUef that generally the larger fortunes are in the hands of those who are unscrupulous and selfish above or- dinary mortals has given rise to a great deal of unpleasant, not to say violent, feeling. It moved a member of the Wo- man's Convention at Washington, D. C, in 1892, to declare that she would follow the capitalist from the banks of Wall street to the gates of hell. It made the Masonic Temple, Twenty-third street. New York, resound with applause when Hugh 0. Pentecost declared that " a drop of blood must flow for every tear that had washed the cheek of toil." Now, it is no answer to the laborer and his friends to call them fanatics, etc., etc. Dr. Strong believes that the tramp exists because the miOionaire exists; that is, the million has been taken from the laborer, which has made him a tramp ; and Dr. Strong is not a fanatic. He is an able and considerate person. Ex-Senator Ingalls does not beheve that a hundred thousand dollars were ever honestly earned by one man ; and Mr. Ingalls is not a fanatic. He is simply brilliant and full of generous impulses. The editor of the Labor Leader, before quoted, believes that most of our very rich men may be justly accused of having committed robbery ; yet when I met that editor in Boston he appeared like an intelligent, sincere man, not given to fanaticism. The principle I desire to most emphasize at the present 55 THE LABORER AND THE CAPITALIST. moment is explained by historical facts concerning three distinguished individuals, as follows : A New York divine lately said : "We read in history that in May, 1775, George Washington on his way to Congress met the Rev. Jonathan Boucher in the middle of the Potomac. While their boats paused the clergyman warned his friend that the path on which he was entering might lead to a sej^aration from England." " If you ever hear of my joining in any such measure," said Washington, " you have my leave to put me down for everything wicked." George Washington was a very great man, yet he was not among the earliest to see the approaching revolution which was then so near, and he was much later than many of his illustrious contemporaries in feeling the necessity for an independent government for the colonies. But Wash- ington Avas honest as well as great, and when he saw the right he embraced it, and the world will never forget how bravely and uprightly he walked in his newly discovered path of duty. Benjamin Franklin was a very honest man, and as to in- telligence it is the opinion of the writer that rarely, if ever, has a mind appeared in history whose march through the universe of knowledge was more majestic and sweeping, and at the same time powerfully searching, than that of Franklin. Yet near the close of his illustrious career, when asked for his opinion on some intricate subject, the great philosopher replied : " Really, I am loth to give an opinion, I have been obliged to change my mind so often." 56 THE LABORER AND THE CAPITALIST. In the ever memorable debate between Webster and Hayne in the United States Senate, Hayne attempted to weaken the force of Webster's argument by referring to what he regarded as a great inconsistency in his poHtical career, to wit : He had once been a free trader, but now he was found advocating a protective tariff. Webster admin- istered a few words of scathing rebuke to the theory that consistency demanded that one should always be found sup- porting the same policy, and then vindicated himself with the words : " I saw reason to change my mind." The more intelligent and progressive a man is — the more determined he is to be right — the further he wp.des out into the great ocean of facts and figures and mystery, the oftener he comes into contact with larger truths and sterner difficulties, and the more frequently he is obliged to change his course. Show me a man who has never found himself on the wrong road, and I will show you a man who has always tarried very near the spot where he was born, and whose fund of knowledge corresponds very nearly to the small area within which his footsteps have been confined. Some one has well said : "A wise man changes his mind ; a fool never." The moral inculcated is not that the opinions of great men should be disregarded. But all history, and all ex- perience with the frailties and blunderings of even the purest and most reliable of human beings, bid us to think for ourselves. There is a vast deal of right reasoning from wrong premises, and very much harm has come to the world from that source. 57 THE LABORER AND THE CAPITALIST. Men, distinguished for talent and goodness, liave ad- vanced theories ; the lesser lights have taken them up and heralded them abroad, and the masses have embraced them, not because they have reasoned them out for themselves, but on account of their respectable origin ; and hate and carnage and misery have many times followed, when scrutiny under the light of a fearless and cultivated reason, would have led to very different results. The sincerity and ability of those quoted regarding the dishonesty, etc., of the rich have been freely admitted; and I am encouraged to frankness in the turther discussion of the subject by the thought that I am dealing, not with a class of cranks (al- though there are cranks among them as there are in all classes), but with men and women, not a few of whom are found among the most learned and intelligent of earth, and whose moral sensibilities are so highly developed by disin- terested thinking that they feel the sufferings of others more keenly than the average individual, and fly earlier to the defense of the wronged and to the support of the weak. But it is human to err, and even the wisest and best can- not always avoid mistakes. This chapter is not intended to be an exhaustive discussion of the comparative honesty of the rich, or of the rich and the poor; only to throw out a few hints and establish cer- tain facts necessary to an unprejudiced consideration of the chapters that follow. In the first place, if we assume that the very rich have necessarily robbed to get their wealth, we are immediately perplexed by the question previously discussed, to wit, 58 THE LABORER AND THE CAPITALIST. Who are the very rich, and where do they reside? A million is not so very rich for New York, while fifty thousand is an immense fortune in some other towns. And the former sum may be as easily won in New York as the latter sum in some other localities. Where, then, shall we draw the line and say that all, or even a large percentage, or any number, for that matter, of the fortunes above a certain amount are the result of dishonesty, while those below are not ? Ordinarily this question alone would make clear the impossibility and irrationality of at- tempting to establish a man's character for either honesty or dishonesty by the size of his fortune. However, the belief that most men of great wealth are necessarily dishonest is based upon the further belief that it is not in the power of any one man to honestly earn what to-day is called a large fortune in our leading cities, for example. It will be remembered that ex-Senator Ingalls was cheered by a very large rehgious audience when he ex- pressed a doubt as to whether any one man ever honestly earned a hundred thousand dollars. Mr. Bellamy infers that because a small boy would be suspected of having come dis- honestly by a thousand dollars, should that sum be found in his possession, it therefore follows that a man found with a million has got more or less of what belongs to others. But where is the parallel ? Should you meet a bright boy, whom you knew had been in business quite a length of time, with a splendid oppor- tunity to make money, you would not think it strange if he had a thousand dollars on hand. 59 THE LABORER AND THE CAPITALIST. Most of our very rich men have been doing an immense business for from 20 to 50 years. Therefore Mr. Bellamy's argument does not reach the case. You may select men among the most distinguished in their respective callings, say the Vanderbilts in railroading, the Rockefellers in the oil trade, Wanamaker in dry goods, Dolan in the woolen industry, Carnegie in the iron, and as many others like them as you please, and, as a rule, their fortunes will be found to represent a smaller profit in pro- portion to the amount of business transacted than does that of the average trader whose property is valued at say twenty thousand dollars. Capital stands guard over capital and will not allow rich business men to rob the public for any great length of time. Have you ever seen two men angling for trout and not noticed the anxious look of one when the other has drawn a fine speckled fellow from the sparkling stream ? If a second is caught in the same place, the less successful an- gler is sure to cast his hook there also. The same is true of capitalists. Where one succeeds, another is bound to try. Money is seeking investment, and the hour that cap- itaHsts can see how they can pay the present rate of wages, and at the same time undersell or treat the public in a man- ner that will take business from our commercial giants, they will try it on, as the saying is, and the present leaders in trade and traffic will be obliged to change their methods or step down and out. Millions are sometimes dishonestly won, so are smaller amounts, even pennies, for that matter. Again, some men GO THE LABORER AND THE CAPITALIST. blunder into wealth — boring for water, they strike oil ; digging" for clams, they find gold — but, as a rule, large fortunes are the result of business energy and sagacity above the average, and they are usually gained with an advantage to the people corresponding to their size. To illustrate : Jones stands before a mountain rich with ore, but he is timid and doubtful ; the opportunity looks like a good one, but he does not feel quite certain. He attacks the mountain, but not resolutely. He employs, say, ten hands, pays each $2 per day, and reaHzes a profit of twenty cents on each hand. At the end of twenty years he is worth twelve thousand dollars. You attack the same mountain at the same time, but you are resolute and daring ; you see your opportunity, and doubt not. You engage a thousand hands, pay each $2 per day, and if the mine yields as well for you as for Jones, your profit will be two hundred dollars per day. At the end of twenty years you will be worth more than a million dollars. Now how can it be said that you have not earned your million as honestly as Jones has earned his twelve thousand ? You have paid the same rate of wages. The difference in wealth simply represents the difference in courage, in en- terprise, in sagacity, and in the number of hands employed. Therefore, should society take hold of your neck, as Bel- lamy suggests, and ask you to account for having a hun- dred times more wealth than Jones, you can answer that you have transacted a hundred times more business, and employed a hundred times more labor, or done a hundred times more for wage-earners, which means the same. 61 THE LABORER AND THE CAPITALIST. A very large majority of our rich men come under this head. The wealth they accumulate is not, as a rule, out of proportion to the business they transact for themselves, and create for the world, and the employment they give to labor. Our own every-day experience and observation, if we will but stop to think, must lead us to the conviction that the rich are as honest as the poor, and that millions are as fairly gained as thousands. When the noble founder of the New York Tribune passed from earth he had acquired, from first to last, and had he seen fit might have had on hand as the result of his talent and energy, more than one million dollars. He left his children above a hundred thousand. Was he dishonest? I do not believe a man lives, or has ever hved, less likely to accept a, dollar not honestly earned than this disinterested friend of the poor and dauntless champion of equal rights. Peter Cooper acquired wealth, so that after he had scat- tered with a Hberal hand among the poor, given bounti- fully to numerous enterprises for the good of his own and coming generations, reared and endowed with princely munificence that grand institute known as the Cooper Union, he had more than two million dollars left. This is a fortune twenty times larger than Senator Ingalls and his vast audi- ence thought could be honestly earned by one man. Was the great philanthropist dishonest? There is no reason to question the honesty of Socialists, yet where in all their ranks can be found one possessing more of that priceless gift than did grand old Peter Cooper? 62 THE LABORER AND THE CAPITALIST. I will not undertake to say who has obtained his property honestly, whether he has much or little ; but large and small fortunes are won by the same business methods. And certain it is that no natural or scientific reason can be given why miUions are not, as a rule, as honestly earned as thousands. CHAPTER VIII. THE GROWTH OF SOCIALISM, When the masses are considered in the clear light of principle — the business methods they employ, apparently without scruple, the ambition they display in pursuit of gain, and the treatment they bestow upon their fel- lows when their own pecuniary interests are at stake — there is no general or material difference between the average among those who are now assailed as monopolists and pluto- crats and the average among the masses, except in the degree of success that has attended their financial efforts. It has been shown that monopoly and plutocracy do not abide with the rich alone, nor with any one political party, but that they dwell equally with all parties and pervade all localities, the rural and sparsely settled school district not less than the densely populated metropolis. Also has it been shown that monopolistic and plutocratic power cannot be divided, and one portion called large and the other smaU, one strong and the other weak, one harmless and the 63 THE LABORER AND THE CAPITALIST. other dangerous, — for the all-sufficient reason that one divis- ion cannot accomplish anything large without the assist- ance of the other. These facts are an argument against some of the leading claims of existing political parties and factions, and they show a degree of very harmful inconsistency in many po- Htical speeches and essays, which the authors thereof have not yet discovered, hut which the calmer second thought will reveal to their understanding. There needs to be cultivated a more general disposition to discoun- tenance hasty denunciation, and to search more carefully for first principles, lest our preaching and practice clash when we are not aware, and our well-meant efforts for good become unavailing. And above all must this great question of capital and labor be lifted out of the mire of party politics into the broader field of nonpartisan debate and the purer atmosphere of disinterested judgment. The socialistic party is the only organization which know- ingly and openly declares against the private ownership of property. It is, therefore, the only organization which accumulated and accumulatins: wealth has to fear as a finality, and it is the only organization which proposes any form of government differing very materially from such as now exists in the United States. Therefore the ques- tion as to whether the element of Socialism is growing stronger or weaker, and what the arguments are that give it hfe and power, is important. In Germany the ballots cast by the Socialist party num- bered 780,000 in 1887, and 1,800,000 in 1893. That was 64 THE LABORER AND THE CAPITALIST. a tremendous increase in the Socialist vote of Germany. In Germany, however, Socialism has been greatly persecuted. Therefore, when an opportunity is offered it acts more as a unit, and the increase in the vote cast shows approximately the growth of the Socialistic sentiment in the country. Not so in all countries, however. Where persecution has been less severe. Socialistic elements have not formed the habit of coalescing and acting together. Neither is the sentiment as radical and ripe (except with a small faction) in most other countries as it is in Germany. But the feel- ing in favor of an associated effort on the part of the masses, including vast numbers in the learned professions and in the higher walks of life, to secure government interference in the interest of labor as against capital, is making as rapid headway in other countries as in Germany. The Morning Press (before quoted) December 17, 1893, had an account of a debate among some of the leading cler- gymen of England, as follows : "The Bishop of Rochester and Rev. Scott Holland, famous rep- resentatives of the Estabhshed Church ; Rev. Hugh Price Hughes, the leading Dissenting preacher of Great Britain since the death of Spurgeon ; and Dr. Dykes, representing the Established Presby- terian Church of Scotland, agreed in advocacy of the resolutions that " the principle of the maintenance of a standard of decent living should be recognized as an essential condition of the settle- ment of labor disputes." Fearing the resolution would be adopted, the Dean of Westminster refused to let it be put to the vote, but the expressions in its behalf were so many and so strong as to show a widespread belief in the description of it given by the 65 THE LABORER AND THE CAPITALIST. Rochester bishop as " merely setting up the greatest of Christian principles." There is no mention of Socialism in this account. But it shows the trend of religious opinion in England. Of course, the result contemplated by these clergymen would be expected to be reached through government interference in behalf of labor. The favor with which the proposition for the government purchase of the coal mines was received is another straw showing which way the tide is setting, even in the conser- vative old commonwealth of Great Britain. But clearer yet, and more to the point, are the recent remarks of the Tribune Association in London. (See New York Tribune, January 7, 1894, as follows :) *' London, Jan. 6. — The tremendous set of politics toward labor is again visible this week. It may equally well be called the sub- ordination of political to social questions. Mr. Fowler's bill for the reorganization of local government throughout England is a distinct and avowed effort to put power into the hands of the labor, ing classes not political only or mainly, but social, economical, fis- cal, and much else. The compulsory power of taking land for al- lotments is an example of the spirit in which the rights of property are dealt with. It is not the spirit of confiscation, for compensa- tion must be paid at the market price, but it is the new spirit of State Socialism, not yet openly avowed as a principle, but acted on in details. " If these Englishmen who have been acting State Social- ism in details, as the Tribune Association expresses it, were obliged to answer yes or no to the question " Are you 66 THE LABORER AND THE CAPITALIST. Socialists?" a large majority would answer, "No," and the answer would be correct. They are not Socialists as they understand it. Indeed, most of them have not con- sidered what relation their conduct has to Socialism ; they have not studied the theory of Socialism. Nevertheless, they have come to favor a more paternal social and economic system, the present government to the contrary notwith- standing. What is this but the beginning of Socialism? In the United States we observe the same tendency to- ward a more paternal government and a new social system. I had thought of dealing at considerable length with statistics and other arguments, to show how rapidly the be- lief is growing in the United States that, as the Methodist Conference expressed it, " the present inequality in the OAvnership of property is a frightful evil," and that the gov- ernment ought to somehow interfere to prevent it. But considerable has been said upon that point in the opening chapters, and I now feel that there is no necessity for an extended effort to demonstrate a proposition so palpably true. I will, therefore, quote a very few opinions, and let them suf&ce. A statement by Judge Brewer, of the United States Supreme Court, is to the point. (See Fourth of July oration cited in a previous chapter.) The Judge said : ** Through the land the idea is growing that the individual is nothing, and that the organization, and then the State, are every- thing." This opinion is valuable, not only as coming from a man of learning and sound judgment occupying a position not affected by either capital or labor, but as the statement of 67 THE LABORER AND THE CAPITALIST. one who is a careful observer of events and a ripe student of the times. On page 142 of Dr. Strong's work, before quoted, I find as follows : "As to the number of Socialists in the United States we have no exact knowledge. Their press is numerous and is increasing. They now have nineteen journals, whose combined circulation is about 80,000. These papers are wholly devoted to the propaga- tion of Socialism, and there are many others which are more or less socialistically inclined." On page 144 Dr. Strong says : "At the last election (1890) in Berlin the Socialists cast 126,. 622 votes, over 20,000 more than all other parties. Professor Fawcett, in opening his present course of lectures at Oxford (1880), said that, if the growth of the Socialistic political vote progressed in Germany and the United States for the next fifty years as it had for the last fifty, capital can do nothing effective against Socialism. '' Note the following from so conservative a divine as Dr. McArthur, of New York. See New Nation, December 10, 1892, as f oUows : "It does not take a prophet or the son of a prophet to predict a revolution inside of the next twenty-five years which will modify the whole social fabric. Editors, professors, philanthropists, and many blatant demagogues are now crying for State Socialism — for the control by the people of the railroads, telegraphs, and the like." The following is copied from the New York morning Press, July 19, 1894: 68 THE LABORER AND THE CAPITALIST. HERBERT SPENCER SATS WAR. "Herbert Spencer has written the following letter to James A. Skilton, General Secretary of the World's Congress of Evolution- ists:" "Dear Mr. Skilton: In the United States, as here and else- where, the movement toward dissolution of existing social forms, and reorganization on a Socialistic basis, I believe to be irresisti- ble. We have bad times before us, and you have still more dread- ful times before you — civil war, immense bloodshed, and eventually military despotism of the severest type. Yours truly," "Herbert Spencer." I do not expect the bloody war and military despotism predicted by the great English scientist ; but that there is a growing tendency toward the dissolution of existing social forms, to reorganize on a more Socialistic basis, is true be- yond all question. CHAPTER IX. ARGUMENTS OF SOCIALISM. If we assume that the Socialistic sentiment is growing faster than any other political theory, faster than the voting population, the question as to what the arguments of Social- ism are becomes very important. As I cast my mind over the subject with a view to an- swering this question, I am reminded of a certain rule of conduct adhered to by Abraham Lincoln which is very ap- plicable to the present case. 69 THE LABORER AND THE CAPITALIST. Into whatever debate lie entered he never understated the cause or the arguments of the opposing party. The more important the question at issue, the more pains he took to state the opposite side clearly. In the practice of the legal profession it not infrequently happened that he placed the law and evidence, which had been supposed to contra- dict his theory of the case, before the court and jury in a stronger light against himself than even his adversaries had thought of or were capable of doing. This course was not only generous toward others, but it was a winning card for himself, for the reason that when he came to state the still stronger logic of his own side, the justice of his cause was all the more clearly seen. If ever there was a time when all the arguments on both sides of a great question needed to be clearly stated and carefully considered, that time is now, in the present con- troversy between conservative capital and the rapidly grow- ing; sentiment of Socialism. Socialism, like all other isms, good and bad, has three sets of arguments. One has to do with the fundamentals and the beauties of its own theory ; another with the er- rors and inconsistencies of such other theories as it wishes to break down ; and the third consists largely of generali- ties, the glorious prospects of its own future, and the a^^ul doom awaiting those who from neglect to study or from other causes are blind to the situation. The latter set of arguments are not necessarily fallacious, neither are they always the least effective, especially after a movement is known to be making headway. 70 THE LABORER AND THE CAPITALIST. The Coining Nation, a labor paper published in Indiana, September 30, 1893, has an argument of this character, which it is well to notice briefly before taking up the more fundamental and intricate. I copy as follows : "When any widespread dissatisfaction exists against any sys- tem that system is doomed. Years ago a few thinkers, by mental analysis, convinced themselves of the wrongs of chattel slavery. Slavery had existed from immemorial time, but that did not deter these men from denouncing it and showing its fundamental injus- tice. Chattel slavery is no more with us. For years a sentiment has been growing stronger and stronger each year against the sys- tem of wage slavery, which, in its finality, is worse than chattel slavery, for it has less of sympathy and care for the workers. The fact that you, my okl-party brother, have not been noticing this ferment or inquired into its economics does not alter the fact that the sentiment is here and widespread — world-wide, in fact. In the antislavery agitation but comparatively few understood the situation or the forces behind it. It was this fact that plunged the country into a bloody revolution, while ignorance and preju- dice of the masses on both sides became a prey to the ambition of ignorant leaders until wise and unwise were thrown into the vor. tex, and reason could not assume control until the fire of passion had exhausted itself in carnage. With this severe lesson fresh in the mind, how can you be so blind as to repeat tlie folly ? Why will you not study up the economics of so important a question — one holding in its solution not only the wealth of the nation, but the lives of its citizens ? If this growing sentiment is wrong, that can be easily demonstrated by convincing logic, and, having a great majority of the press, you \\dll have no difficulty in holding the people out of it or weaning them back. But you cannot ex- 71 THE LABORER AND THE CAPITALIST. plain to the reformers they are wrong except by reading the books they have read and pointing out the errors. Otherwise your ar- guments will not touch the mind where it has been influenced. You cannot combat it without reading it. If on reading it you find it is truth and justice, of course it will be to your interest to go with it. But let me impress you with one thing that is be- yond all doubt or cavil — the tnovement is here, and will as cer- tainly sweep this country as the sun shines unless you do read up and show its fallacies. Assertions are not arguments, and will have no force. You m/iist analyze and demonstrate in clean, clear, logical, truthful statements its fallacies. Failing to do this it is not many years when your "peculiar institution" of wage slavery, with its poverty, crime, and woe, will be classed among the ' has beens,' and a new era, radiant with joy, peace, plenty, and love, will be ushered into existence, bringing in that for which Chi-ist prayed, " in earth as it is in heaven." **Come, help us if we are right, or lead us to the right." While this article may be said to consist of generalities and unverified assertions, like many of the quotations in the early part of this volume, yet it represents a widespread sentiment, and the italicized words are especially worthy of thought. The failure to discuss the fundamental theories of a rapidly growing political economy, and the ignoring of those who ask for State Socialism, except to call them cranks, mugwumps, etc., are made a telling argument among the masses against the position of capital, and the course pursued by some leading journals which jDopular re- formers are denouncing as the subsidized, capitaHstic press of the country. 72 THE LABORER AND THE CAPITALIST. The statement in the quotation that assertions prove nothing is correct ; and if the arguments now being put forth against the present regime are sound, and the philos- ophy of the wage system cannot be sustained by clear, truthful argument, all honest people will want to helj) de- stroy it as soon as something better can be found to take its place, whether that something be SociaHsm or what not. Sociahsts are proud and happy in the behef that they are building upon a rock, and that their arguments are first principles. Now let us imagine that we have a Socialist before us ready to explain to the capitalist in every-day phraseology his theory of reform, his platform of principles, and his opinion of the situation ; in, short, to plead his own cause as he sees fit, or as Sociahsts do plead their cause in their talks to the public and with their neighbors. We will have the capitaKst address him as follows : " Mr. Socialist, I wish to call your attention to a state- ment by Judge Brewer, of the United States Supreme Court (see Fourth of July oration before quoted). Referring to the Populists he said : "I know that the great body of these people are moved only by a conviction of the injustice of present law and social conditions, and are striving to compel a more equal distribution of the good things o£ earth. "With sympathy for the purpose which actuates them, I am con- vinced that their ignoring of the lessons of history is a step to- ward Socialism and the destruction of the liberty that the toil of centuries has achieved." 73 THE LABORER AND THE CAPITALIST. " You will observe, Mr. Socialist, that the distinguished Judge regards the PopuHsts as honest, hut believes they have taken a step toward Socialism, which he thinks is dangerous to liberty. What have you to say o£ the matter? Socialist, answering : " As I see it, Mr. CapitaHst, the masses are heading toward Socialism, but most of them are not aware of it. They are trying to secure a inore equal distribution of the good things of earth, as Judge Brewer has remarked, and the opinion is more or less prevalent in all parties that monop- oly and plutocracy are giants blocking the pathway that leads to that glorious result. " The platforms of other parties declare as strongly as ours against the centralization of power, resulting from large aggregations of wealth. The difference in opinion as to the best means for accomplishing the same end is the divid- ing line between the Socialist party and all other parties. As a rule, the PopuUst is nearer to the Socialist camp, so to speak, than are the adherents of the older j)arties; that is, he has made more progress toward the larger idea, which is to govern the world sooner or later, and I beUev^e much sooner than most people dream, — I mean the idea of a co- operative commonwealth. " But while the Populist has taken a long stride in the right direction, yet he is illogical in that he has not re- nounced the private ownership of property, which is the fundamental cause of more than 90 per cent, of all the wrongs we complain of. This the Populist will see sooner or later. The small monopoly is the beginning of the 74 THE LABORER AND THE CAPITALIST. larger. Tolerate the infant, and full-grown men, even giants, will appear. Tolerate the private ownership of property, which means individual fortunes, and huge mon- opolies will flow from them, as naturally as rivers wiU gather force from springs and small streams. " If you would put an end to large monopolies, you must prevent the smaller from coming into existence. We Social- ists regard the old maxim that an ounce of prevention is worth a pound of cure, and we see no sense in propping a superstructure which, owing to a wrong foundation, is des- tined to fall sooner or later and carry the props down with it. "As a Socialist, replying to Judge Brewer's assertion that a step toward Socialism is a step toward the destruction of liberty, I will call attention to an editorial which appeared in the New York Times, August 12, 1877, as follows : ** *Is there deliverance? There seems to be but one remedy, and it must come — a change of ownership of the soil and a creation of a class of landowners on the one hand and of tenant farmers on the other — something similar in both cases to that which has long existed, and now exists, in the older countries of Europe. . . . Everything seems ripe for the change ; half the farms in the coun- try are ready to be sold, if buyers would only appear, and hundreds that can now be bought for less than their value of twenty or thirty years ago. 'Few farmers can hope to provide their sons with farms of their own, and there is no place for these young men in the overcrowded cities. Those farmers who are land-poor must sell and become tenants, in place of owners, of the soil. The hoarded, idle capital must be invested in these lands, etc' " 75 THE LABORER AND THE CAPITALIST. " Now, Mr. Capitalist, you cannot be ignorant of the fact that the sure road to the destruction of Uberty is through the impoverishment of the many, so that they become de- pendent upon the few for the means of subsistence. You are also aware that while the farmers were being reduced to where they were ready to sell their homes for less than their value twenty years before, wealth had been accumulat- ing in the hands of the few, who, according to the New York Times, were abundantly able to purchase the farmer's home. In other words, while the hope of the farmer's son to own a farm of his own was being blasted, and his father reduced to the condition of a tenant, at the mercy of a land- lord, capital had grown correspondingly independent and powerful. " When Judge Brewer shows that Socialism can exceed this twenty-years movement toward the destruction of lib- erty by our present economic system he may consistently charge us with despotic tendencies, but not till then. " But, Mr. Capitalist, I have another statement from a leading New York daily, to which I ask your attention. "It appeared in the New York World, January 11, 1877, as foUows : "The changes which have been wrought in this coimtry since 1860 have all tended to equalize the conditions of life as between Europe and America, and these conditions have approached each other more nearly than Americans twenty years ago ever expected to see them do, and much more nearly than the vast majority of Americans are yet aware. The American laborer must make up his mind henceforth not to be so much better off than the European 76 THE LABORER AND THE CAPITALIST. laborer as his father was, and that it will be harder for him than it was for his father to cease to be a laborer and become an em- ployer of labor. A man hereafter will have more of a struggle in this country to escape from the place in which he was born." "We Socialists have been accused of saying many un- pleasant and discouraging things to the laboring people, but what Socialist has ever drawn a more disheartening pic- ture, or prophesied a darker doom for the wealth-creators of our country, than the last-quoted journals have done, one at that time supporting the Republican, the other the Democratic, party, and neither of them supposed to be especially interested in labor ? " I question, Mr. Capitalist, whether the Times or the World would think it wise to make the same statement at the pres- ent time, though they believe it never so strongly. The social and industrial world is very much more disturbed and very much more in earnest than it was seventeen years ago, when these opinions were published. " However, Mr. Capitalist, I have two or three statements of recent date from important sources, which I wish to submit to your further consideration. " During the recent tariff discussion in Congress one of the distinguished leaders of the Republican party, Thomas B. Reed, February 2, 1894, said : "Whether the universal sentiment in favor of protection as ap- plied to every country is sound or not I do not stop to discuss. Whether it is best for the United States of America alone con- cerns me now, and the first thing I have to say is that after thirty years of protection, undisturbed by any menace of free trade, up 77 THE LABORER AND THE CAPITALIST. tx) the very year now last past, this country was the greatest and most flourishing nation on the face o£ the earth." " Mr. Wilson (the father of the Wilson bill) replied to Mr. Reed's argument as follows : ' You can't prevent the accumulation of wealth in this country, but you can take wealth from men who make it and bestow it upon others who have not earned it. In a speech on March 10, 1850, Daniel Webster said that five-sixths of the property of the North belonged to workingmen of the North. Can any Representative from the Commonwealth of Massachusetts make such a glorious boast to-day? There is a statement in the last census report of the United States that calls on every citizen to pause and ponder as to whether it is a sign of growing prosperity or a sign of grow- ing and dangerous decadence. It appears in that report that of all the men occupying farms in this country to-day one-third of them are tenants living on farms of others. It appears that of all people occupying homes other than farms two-thirds live in rented houses. If that is a sign of general prosperity, then the protective system is entitled to the credit of it, because that it is in a large measure due to that system.' " You Avill take notice, Mr. Capitalist, that Mr. Reed attrib- utes the marvelous growth of the country in the last thirty years to a high tariff. Mr. Wilson admits the increase of wealth claimed by Mr. Reed, but infers that that wealth has lodged in the hands of a few, since the census reports show that a larger and larger percentage of the farmers of the country are becoming tenants, working land not their own, while the percentage of the whole population owning homes is growing smaller and smaller. 78 THE LABORER AND THE CAPITALIST. " Or, to state the substance of the arguments of these gen- tlemen in another way, Reed says : ^ See how v/onclerf ully the wealth of the country has been increasing under a high tariff.' Wilson says : ' This is true of the few, but behold how rapidly the many are becoming dependent and homeless.' " We SociaHsts look upon the arguments of both of these men as failures, since neither proves that his system of tariff ever has, or ever can, secure a just distribution of the residts of toil. The inequality in the ownership of property is as great in free trade as in protected countries ; wealth cen- tralizes as rapidly under a low as under a high tariff. The tariff question undoubtedly affects the business of the coun- try at the present time. It is an important incident in the march of greater events. "But the thought and theory that stirs philanthropy, makes our Socialistic party grov/ so rapidly, and shakes the foundation of old ideas regarding the natural relationship of State and people are embodied in a statement by the newly elected Master Workman of the Knights of Labor. (See Missouri World, January 24, as follows) : ' A republic that will deliberately squeeze the manhood out of 200,000 tramps to make a Vanderbilt, a Gould, or an Astor, and abrogate the birthrights of millions of God's deserving children that a few may hold titles to a million homes which they cannot occupy and aid the private monopoly of natural bounties and the great agencies of distribution, is a disgrace to the name it bears and the flag it floats. ' In this republic the wild brutes, birds, and fishes live and en- joy life without labor ; yet civilized and intelligent man labors 79 THE LABORER AND THE CAPITALIST. and starves. But worse still is the fact that one man produces much and enjoys little, and another produces little and enjoys much,' " I am content, Mr. Capitalist, to offer no comment on this statement of the Master Workman of the Knights of Labor, further than to say that what he complains of is the neces- sary and logical result of the working of the economic sys- tem under which the people groan and have groaned for centuries ; and the present ferment in the social and indus- trial world is the instinct of self-preservation becoming cul- tivated and intensified by education. " These, Mr. Capitalist, are our every-day arguments clothed in every-day phraseology, and the fact that we can sustain our attacks upon the present economic system with an abun- dance of testimony from authorities not supposed to have the least sympathy with Socialism adds greatly to our suc- cess in proselyting. Nevertheless, I am not willing to take my leave of the subject, Mr. Capitalist, until I have offered a brief extract from our more condensed and better pre- pared argument on the subject of the private ownership of property. Find in the Republic (previously quoted), October 14, 1893, as follows : ' Property is the throne on which Mammon now sits ruling the world. ' The ideal relation of property to man is that of servant to mas- ter. As long as Mammon remains enthroned and goads his illu- sioned with the fear of want and the hope of idleness, property will not become the servant of humanity. ' The solid basis of Mammon's logic is that the want which is 80 THE LABORER AND THE CAPITALIST. feared can only come through others making a profit greater or les8 from the labor of him who possesses the fear, and that the hope of idleness is only to be realized through making a profit from the labor of others. These two things are only too true. But examine the point around which they revolve — think while on the relation of profit to the slavery which Mammon imposes from his throne of property. If profit were removed from the problem — if you could hope for no unhealthy idleness from others' labor, and fear no want from others' profit on your labor, and the same were true of them — what becomes of Mammon's throne ? Is it not demolished, and does not property, freed from Mammon's incubus, become at once the servant ? ' Here, then, is the avenue of progress : Property, as well as commerce and industry, must be administered, not for profit, but in terms of brotherhood through the co-operative commonwealth.' " We Socialists regard this position as ethical and impreg- nable ; but we do not for this reason regard all other polit- ical issues as unimportant ; for example : " We Socialists vote more or less with other parties as a temporary expedient; but we are grounded in the faith that nothinof short of o^overnment control of the forces of production and distribution can prevent the shrewder and more unscrupulous from absorbing the earnings of the many and monopolizing most of the good things of earth, which is constantly taking place, and must ever take place under a competitive system of government. " And this, Mr. Capitalist, is all I would say for the present in defense of Socialism. " Within the last quarter of a century these arguments of the SociaHsts have impressed in no small degree the pulpit 81 THE LABORER AND THE CAPITALIST. of Christendom. They have their adherents in every civil- ized legislative body on the globe. They have attracted and are now occupying more of the attention of men of learning, of conscientious thinkers, of earnest philanthro- pists, to say nothing of the shifting multitude, than any other political argument or set of arguments have done before, and I have the satisfaction of feeling that I have endeavored to state these arguments as frankly and as clearly, in the present chapter, as I hope to state my own arguments against them in the chapters that are to follow. CHAPTER X. THE DIVISION BETWEEN MAN AND MAN. The following is copied from the New York Herald: **New Haven, Conn., Feb 24, 1891. — Much comment has been aroused by the remarks of the Rev. Dr. W. W. McLane, pastor of the College Street Congregational Church, at the Washington birthday celebration yesterday. ' The time will come,' he said, ' under a democratic form of government, when the wealth of the country will not be gathered in the hands of a few, when every man will have an honest and just portion of the goods he produces.' "Here some of his auditors applauded and others hissed." 'If there is a millionaire out there hissing,' exclaimed the speaker with great warmth, ' let him hiss. I say this not to win applause, but because it is God's truth. Millions of men have been ground down by kings and millionaires, but the spirit of 82 THE LABORER AND THE CAPITALIST. honest patriotism will not stand it forever, and that spirit will progress until the sources of wealth are held by the government. Hiss if you will, but it will surely come, not by revolution, I hope, but come it will in some manner, for it must.' However widely I may differ from Dr. McLane in opin- ion, I can but respect his manhood. He believes that the present system of exchange does not award to each man a just portion of the goods he produces, and I infer from his words that he has embraced the popular theory that the one great hindrance to a more equitable distribution of goods produced is the millionaire (rich man). This, being his conviction he has the courage to say so, even to an aristo- cratic church audience in aristocratic New Haven; and more than that, he suggests a remedy which necessarily in- volves the destruction of the economic methods which have resulted in the accumulation of the very money that now supports him in his pulpit. One sermon or lecture from such a man will influence the public mind more than a hundred speeches from the average politician. But all this does not make his theory sound. He would have the soiu'ces of wealth pass under the con- trol of government, to the end that the few may not be- come rich in goods which the many have produced. To establish his position. Dr. McLane must first demon- strate that the few do become rich in the goods so pro- duced without a corresponding benefit accruing to the many as a result ; and also must he demonstrate that government control of the sources of wealth will result in a more nat- ural and righteous exchange between man and man, and 83 THE LABORER AND THE CAPITALIST. therefore contribute more to human progress and happiness than the present system. This he does not undertake to do. He assumes — but then everybody once assumed that our earth was flat, but that did not make it so. Proof is wanted in this case, as in many others where assumption is allowed to stand as the basis of popular movements. Let us try to investigate this deep and momentous sub- ject without reference to what may or may not have been previously said or assumed regarding it. Let us go down to first principles as nearly as possible. We will begin with the universally accepted proposition that no two human be- ings are constituted exactly alike. It therefore follows that no two can always think exactly the same thoughts, nor are they affected exactly the same by environment. We can- not all occupy the same spot of earth at the same time, nor strike the same vein of success. Some are born in the centers of education and refinement, others amid ignorance and barbarism ; some are rugged, others are frail. In short, our mental capacities are not equal, our physical strength is not equal, and our opportunities are not equal. Some must be wiser than others, some richer, and some both wiser and richer, etc. This is in perfect accord with natural law. The differ- ence in the results we behold are based upon the difference in constitutions. To change this basic principle, or the re- sults that flow from it, would destroy human happiness, since we know and appreciate only through differences (con- trast). If all were as tall as the*^ tallest there would be no 84 THE LABORER AND THE CAPITALIST. tall people ; if all were as short as the shortest there would be no short people ; if all were as wise as the wisest there would be no wise people ; if all were as happy as the hap- piest there would be no happy people. If there were no difference in color we would know no color ; if there were none of that which we call evil we could not appreciate the good ; in fact, without evil it would be impossible to give good a name that could be understood. Therefore, if dif- ferences were stricken out, greatness, goodness, variety, indeed all that we admire, appreciate, and love, would be gone, and a monotony would reign a million times more cruel to beings constituted as we are than any differences we have ever known in the conditions of life that now environ us. Of course, extremes exist everywhere and in everything. Some are richer, for example, than there is any need of, and there is more severe poverty than ought to be. However, the ambition of human Hfe is to move onward and upward — to achieve, to conquer. It is the fiat of In- finite Wisdom that it shall be so. We now propose to show that it is also the fiat of Infinite Wisdom that, as a rule, the greater success of one shall mean the greater success of all. To illustrate : Some are a thousand times more success- ful in gaining that priceless thing we call knowledge than others. But after they have gained it, even their most selfish motives compel them to distribute it. If we would have others further our ends and gratify our desires, if we have gained new ideas which, spread 85 THE LABORER AND THE CAPITALIST. abroad, will advance our own interests and gratify our own ambition, we must make others see and understand as we see and understand. To accomplish this our knowledge touching the matter in question must be demonstrated. When this is done, others possess the knowledge as well as ourselves. Therefore the community as a whole receive a benefit corresponding to that which we receive as indi- viduals. It is a self-evident proposition that, as a rule, those who become wise increase the opportunities of others to become wise also. Here methinks I hear it said : '^ 0, if the same beneficent law only governed the getting and using of wealth that governs the getting and using of knowledge, what a happy world this would be ! If Infinite Wisdom had so ordained that while we were accumulating wealth for ourselves we were necessarily making it easier for others to accumulate, and the more we succeed in accumulatinof the more the world gained in consequence, peace and contentment would reign in every land." "But," you say, "such is not the case. Those in pursuit of wealth are so selfish ! Their zeal leads to oppression, and their increasing hoards are ac- cumulating proofs that labor is being robbed of its hard earnings." Is there not some mistake in the popular understanding of this matter ? Is it true that those who are successful in the pursuit of wealth are selfish above all others? And can it be truthfully said that the efi^orts of the successful financier are not as helpful to the financial world as are 86 THE Lx\BORER AND THE CAPITALIST. the efforts of the scholar to the world of science and let- ters? Let us see. Many noble souls have been glad to gather and use both wealth and knowledge solely for the good of humanity. Many are doing so at the present time. But they are few when compared to those who prefer to gather and use for other purposes. As a rule one's own comfort, his own power among men, his own distinction before the world, in short, self-aggrandizement, is the common main- spring to both learning and wealth, and one is as selfishly acquired and as selfishly manipulated as the other. Those who have the good fortune to possess learning above the average are no more willing to use it for the ben- efit of others without a consideration than are the possessors of material wealth wilHno- to use their hoards for the benefit o of others without some sort of remuneration. The miner in the earth finds a nugget of gold of more value than the average earnings of a lifetime. He de- mands the highest market price before he is willing to allow others the full right to use it. The inventor, or the delver in the mines of science and philosophy, may suddenly grasp a new principle, or, rather, an old principle, but which to the world is new. He calcu- lates the value of his discovery, gets it patented or copy- righted, and then offers it in market, precisely as the gold miner offers his product. Now, if those Avhose talent and good luck have enabled them to gather sufficient knowledge to give them promi- nence in the world of science and letters are pubHc benefac- 87 THE LABORER AND THE CAPITALIST. tors, whether they will or no, why should not those whose financial ability and good luck have led to distinction in the world of trade and commerce be public benefactors, whether they are charitably disposed or not? Or, to put the question in another way, if it is ordained that in the gathering and using of knowledge we are com- pelled to benefit others in order to reap a benefit for our- selves, is it not reasonable that the same law should govern the getting and using of wealth ? We may rest assured that Infinite Wisdom has not en- dowed one with talent above another, and then left him free to use it exclusively for his own aggrandizement, and his fellow-mortals reap no benefit therefrom, whether the talent be in the direction of finance or of philosophy. To the end that financial talent shall redound to the pub- lic good, nature has ordained that we shall buy of and sell to others, precisely as others buy of and sell to us ; so that in the long run the benefits arising from the exchange are shared by all. This fundamental and almost universally overlooked truth may be illustrated as follows : Jones is a shoe manufacturer; you are the people. Jones manufactures shoes ; you (the people) purchase them of him at market price and pay the money. Now, what will Jones do with the money? He can neither eat, drink, nor wear it. He must turn around and pay every cent back to you (the people) for the f)roducts of your labor. He must pay you the market price, mark you, as you have paid him the market price. Now, Jones has bought of you (the people) precisely as THE LABORER AND THE CAPITALIST. much as you have bought of him (the manufacturer) ; and, both having made your exchanges according to prices rul- ing in the general market, it necessarily follows that you (the people) have gained as much as Jones (the manufac- turer). This is the result of an infinite and irrevocable law of exchange and mutual dependence which unites all interests in one and strikes a just balance between capital and labor, between capital and capital. On one occasion a distinguished lawyer, now in the em- ploy of one of the largest corporations in the world, op- posed my theory regarding the effect of the law of exchange and mutual dependence, and in doing so he used substan- tially this language : " Mr. Willey, money is only a medium of exchange, and the trade of the world is simply the people swapping goods with one another. Now, if when we trade we give value equal to that which we receive, where does the profit come in, and how does one man become so much richer than an- other?" The fact that under the law of exchange we give value equal to that which we receive, does not prevent us in the least from making a profit on what we sell, nor does it hin- der one from becoming richer than another. Farmer H. takes one hundred bushels of wheat to mar- ket, and sells it for one hundred dollars (one dollar per bushel). But it cost him only ninety cents per bushel to produce it. His profit is, therefore, ten dollars on the hundred bushels. He wants to buy a horse. Farmer G. 89 THE LABORER AND THE CAPITALIST. has one to sell; the price is one hundred dollars, but the cost of raising' has been only ninety dollars. However, Farmer H. purchases the horse for one hundred dollars, which is the market price for that grade of animals. Far- mer G. takes the hundred dollars which he has received for his horse and invests it in lumber. Now, Farmer H. has practically swapped his wheat for a horse, and Farmer G. has swapped his horse for lumber, Both have paid the market price for what they have bought, and received the market price for what they have sold, and each made a gain of ten dollars. Or, to state the same truth in another way, both men have given value equal to that which they received, and gained in wealth all the same. But, you may say, v/e have shown how each of the two farmers gained ten dollars by giving and receiving equal value, but have not shown how one man can become vastly richer than another by the same method of exchange, or by continuing the same practice with all people and on all oc- casions. Let us see. If we produced exactly the same quantity of goods as yourself and had exactly the same quantity to sell, and yours were exactly what we wanted and ours were exactly what you wanted, with the cost of production and expense of living the same in both cases, and we exchanged with each other exclusively, it Avould be impossible for one to accumulate more wealth than the other. But no such condition exists, nor will it ever exist. Money is a medium of exchange, and trade is the people 90 THE LABORER AND THE CAPITALIST. swapping goods, as our legal friend has stated ; but no two men produce the same quantity of goods ; neither do they consume the same quantity of what they do produce. There- fore no two have the same quantity to spare or to give in exchang-e for what the other has to sell. It may have been the good fortune of one farmer, for example, to have hit upon soil vastly more productive than his neighbor's soil five miles away. He will therefore have a great deal more of value for the market — two horses, say, to his neighbor's one. This will give him two dollars' gain for every one his neighbor can realize. This difference in- vested and compounded annually for twenty-five years is liable to make the property of one worth many times that of the other at the end of the period. This is presuming that both men are equal in industry and financial talent. Now, when we consider the difference that exists in talent and industry, as well as in locality, or luck, whichever you please to call it, it is not hard to account for the difference in the wealth of individuals upon the basis of each giving value equal to that which he receives. Of course, we do not claim that no one man ever got rich at the expense of another. Such a thing has often taken place. In the stock exchange, for example, many risk all they have and lose it, while occasionally a large fortune is won without rendering an equivalent. Again, through technicalities in law, through misrepre- sentation, in fact in a great many ways, one will get posses- sion of property that rightfully belongs to others. If we meet a stranger with a hundred thousand dollars, 91 THE LABORER AND THE CAPITALIST. we do not know that lie got it honestly. If we meet a stranger with only one dollar, we are not sure that it right- fully belongs to him. But my proposition is that, whether people try to ac- cumulate by honest methods or not, the law of exchange and mutual dependence holds them so firmly to the Infinite plan of equal reward for equal effort, that a sufficient num- ber cannot break from it to materially affect the fortunes of the rest. If one man becomes vastly richer than another, he must, as a rule, do vastly more business, which, of course, employs vastly more labor. No man can become very rich in busi- ness using nothing but his own hands. He must employ others ; and the more hands he employs, the more he pays to labor, and the more labor has with which to purchase goods, and, of course, more trade and more general prosperity are the result. There is not a case in a thousand in which men of great wealth have not been exceptionally beneficial to the commu- nity, v/hether they have been charitably disposed or not. How can it be otherwise ? When we see a rich clothier, for example, his wealth does not consist in money, but in commodities purchased from the people — houses, lands, animals, clothing, etc., etc. This has given others the opportunity to sell all these things. The reciprocity in the case is this : When the clothier has sold a million dollars' worth of his own product to the people, he pays the million dollars to the people again for their product which is the product of labor. Thus, the 02 THE LABORER AND THE CAPITALIST. more wealth he has gained, the more labor he has employed, and the more he has bought of the people's products. Therefore, his increasing hoard is not accumulating proof that he is robbing the community, but that he is employing the labor and increasing the trade thereof. The people are paying him the market price for his goods ; he is paying them the market price for theirs. He must, therefore, in- crease the wealth of the people as a whole, according as he increases his own as an individual. This is the law of exchange and mutual dependence. This law made it impossible for Vanderbilt to gain $100,- 000,000 without benefiting the world at least another $100,- 000,000. He was forced to buy as much of the people as they bought of him. He was compelled to increase the trade of others precisely as much as he increased his own. He could not purchase of himself; he could not sell to him- self ; the people were his customers and he was theirs. So far as Vanderbilt's energy, financial ability, and material success were above the average, so far was he bound to in- crease the business of the world above the average. It was better for the people to have Cornelius Vanderbilt at the head of a great transportation enterprise than a thousand others of only average caliber. In fact, he ac- compHshed the very things for himself and the country that other capitaHsts would have hked to accomplish, but who lacked, not the money, but the sagacity and energy. Mr. Vanderbilt cheapened transportation greatly and brought the market much nearer to the people. Whether he did this of his own free will or through fear of compe- 93 THE LABORER AND THE CAPITALIST. tition or from a desire to monopolize more of the carrying trade, is not material to this discussion ; suffice it to say he was a powerful factor in the reduction of the cost of trans- portation while he Hved. Then, too, every dollar that he had in his possession from the first to the last day of his career went to buy the products of other people's labor. Everything his own hands produced, and everything his brain stimulated the hands of others to produce, was so much added to the world's wealth. As a rule he was able to retain only such share of profit as others retained who exchanged the prod- ucts of their hands and brains for the products of his. Therefore, if $100,000,000 lodged in the hands of Van- derbilt another $100,000,000 necessarily lodged in the hands of the people as a consequence. Therefore the Vanderbilt fortune does not stand for goods or value wrung from the community without compensation, but it represents services rendered, with an advantage to the people fully equal to the price they paid. CHAPTER XI. THE DIVISION BETWEEN CAPITAL AND LABOR. In the preceding chapter I have discussed the law of ex- change and mutual dependence, more especially as it affects people in trade or those swapping goods. Of course, the law that governs in those cases reaches the wage-earner as 94 THE LABORER AND THE CAPITALIST. well, and what has been said concerning one applies with equal force to the other. Nevertheless, I will devote a chapter to the consideration of the relation of wage-earners to wage-payers, with some mention of those with small homes or very moderate means, who do not work for wages and do not pay wages. I will begin by requoting the state- ment of the newly elected Master Workman of the Knights of Labor — Mr. Sovereign — as follows : *'A republic that will deliberately squeeze the manhood out of 200,000 tramps to make a Vanderbilt, a Gould, or an Astor, and abrogate the birthrights of millions of God's deserving children, that a few may hold titles to a million homes which they cannot occupy, and aid the private monopoly of natural bounties and the great agencies of distribution, is a disgrace to the name it bears and the flag it floats. In this republic the wild brutes, birds, and fishes live and enjoy life without labor, yet civilized and intelligent man labors and starves. But worse still is the fact that one man produces much and enjoys little, and another produces little and enjoys much." In reading the complaints which labor makes against cap- ital, you wiU observe that the monopoly of natural bounties is among the leading charges. The buying up of land, for example, is counted as one of the principal methods em- ployed by the rich to produce little and get much. A friend has placed in my hands a copy of a nonsec- tarian paper [The Itelicjio-Philosophical Journal) which probably represents the f eeHng among that class of people (Freethinkers, they call themselves) to as great an extent as the Methodist conference, before quoted, represents the 95 THE LABORER AND THE CAPITALIST. feeling among tliose who are intimately connected with the churches. The aforesaid journal contains an article entitled " The Robhery of Labor." The author signs himself W. Whit- worth, Cleveland, 0. He says: *'In this limited article I can only point out a few of the plun- dering methods by which the laborer is robbed of his earnment. First, the infamous plundering of the laborer by means of land monopoly. Here in Cleveland was a tract of land secured for a few hundred dollars ; a portion was given to a railway company for the planting of their shops thereon and lots sold to workmen at a cheap rate." This paragraph, evidently sincere, and written with no inconsiderable ability, is, nevertheless, misleading and with- out value as an economic proposition. It ignores the very truths necessary to a correct understanding of the princi- ple involved. The author states that a portion of this land was sold to the poor workmen at a cheap rate ; he omits to state the important fact, however, that these poor workmen are sharers in the rise which has taken place in the value of the land in question. The complaint against the whole scheme appears to rest upon the idea that land ought to be common property. The writer should have stated, therefore, that the poor workmen owning a share are no less robbers than those who own a larger portion, since, according to his own theory, they have gained wealth without effort of their own. Again, when it is alleged that a robbery has taken place 96 THE LABORER AND THE CAPITALIST. which has greatly impoverished the people, the extent of the impoverishment ought to be clearly set forth. For the sake of the argument let us suppose that the afore- said land was taken by the rich without any consideration whatsoever. Now, what was the extent of the robbery ? If land is common property by natural right, of course it belongs to all the people. If the present value of the lot in question be $1,000,000, for example, an equal division of the loss would result in less than two cents to each in- habitant of the United States. If this value has been fifty years in accumulating, the loss to each inhabitant would have been a cent once in twenty-five years, about the cost of one whiff from a cigar per annum. Of course, this does not justify the taking of land Avithout rendering an equiva- lent therefor, but the transaction cannot have done much toward impoverishing the people, in any event. The writer continues thus : "In like manner every rod of the city has been manipulated by this infamous robber method of building up millionaires at the eost of crushed workmen. Not a farm for miles in the outskirts that is not laid off into " allotments " for the homes of laborers at from ten to twenty times the cost of purchase given by the vam- pire horde of land speculators. . . . The farmer and work- man carry the whole grievous burden." This is according to the popular method of computing the losses which the many are supposed to suffer through the purchasing of land by the few ; but there are certainly some mistakes in Mr. Whitworth's calculation. It cannot be said that the workmen who received their 97 THE LABORER AND THE CAPITALIST. land before the rise took place are being burdened ; on the contrary, the advancing price is putting wealth into their pockets. It should also be remembered that these farms which are being divided into allotments, etc., have been sold by their former owners at a greatly enhanced price, and that the value of all adjoining farms has been increased by the same transaction. Indeed, the value of all farms is enhanced by the very process complained of by Mr. Whitworth. How, there- fore, can he say that farmers are being burdened thereby? And as to the laborers, have their wages ever been reduced by the division of farms into allotments and the rearing of cities thereon ? Indeed, when and where has such a process gone on that the demand for labor has not increased and wages raised ? In the sweeping charges which the writer makes against capital, building associations come in for a share. He says : "The Shy lock greed of loan and building associations, levying 6 per cent, interest on a ten-years' purchase, etc." I am not certain whether Mr. Whitworth intends to con- demn building associations altogether, or whether the rate of interest they charge is the issue he makes. At all events, he appears to have entirely overlooked the fact that the interests of building associations, like those of all other forms of associated capital, are one with the inter- ests of the people. If these associations charge a burden- some rate of interest, they will sell less property, for the all-sufficient reason that the people will be obliged to pur- chase less. You cannot increase your own income by ren- 98 THE LABORER AND THE CAPITALIST. dering would-be customers less capable of buying your goods. Again, when Mr. Whitworth asserts that the building and loan associations charge 6 per cent., and stops there, he omits the most important element in the problem, to wit : the payer's rent is practically deducted from this 6 per cent; that is, when one has secured a home through a building association, he immediately moves in and J)ays no rent. As a rule the sum ordinarily paid for rent, if invested in a building association in monthly installments instead of handing it over to the landlord, will make one the owner of a home in about 144 months — twelve years. In any event, the interest cost to the purchaser — that is, the difference in the interest and the amount usually paid for rent — must be very small, certainly less than 3 per cent. Building associations in the United States date back fifty years or more. They have been coming into existence very rapidly of late, however, so that their average age is about six years. They have secured to the American people about one million homes, sheltering a population larger than that of Ireland, and nearly as large as that of the State of New York. They had their beginning in Philadelphia. They have built about 75,000 homes there, and saved about another 25,000 to the people by liquidating mortgages and giving the owners longer time to complete their payments. Building associations have made the population of Phil- adelphia more generally home-owners than that of any other city on the globe. If this is the kind of robbery the 99 THE LABORER AND THE CAPITALIST. "greedy Sliylocks" are doing, may the hours fly and the days hasten till the whole earth is robbed in the same way ! To more perfectly illustrate the lesson Mr. Whitworth would inculcate, we copy the following from his further statement : "There is no test so good as experience. I came to this country fifty years ago, a plain workman. During the greater portion of that period I have wrought at the bench as a skilled mechanic. Had I gone into the grab game of speculative gambling or money lending I could easily have become a millionaire long ago. I feel thankful to God that I kept on in the honest role of earning all I gained, because to attain millions I must inevitably have wrimg it from the hard-earned production of others." These words sound honest and earnest, and they may thrill the great heart of labor, but truth compels us to state that they are illogical, and cannot perform any useful office for industry anywhere. We have already demonstrated that millions are as hon- estly earned as smaller amounts, and that those who gain the larger fortunes usually render mankind the greater ser- vice. Now let the laborer grapple with the following propo- sition and learn the lesson it teaches. If the course which Mr. Whitworth claims to have pur- sued had been pursued by the people whom we now find rich among us, who would have employed the labor of the country, and what would have been the fate of the poor ? People are born without homes ; to get homes they must receive wages ; therefore it seems to us that the greatest 100 THE LABORER AND THE CAPITALIST. benefactors of this age are those who have had the dispo- sition and energy to acquire wealth, which has compelled them to employ labor and pay wages, a thing which our honest friend Whitworth has not done. We cannot say whether or not more land was donated to the railroad company mentioned by Mr. Whitworth than was necessary to induce it to locate car shops in Cleveland. Certain it is, however, that whether the donation was large or small, or whether it was made by public or private au- thority, it was in anticipation of reaping a greater benefit than appeared likely to accrue from any other disposition the donating power knew how to make of it. Before our honest friend asserts that labor has been robbed in consequence of the disposition which has been made of the aforesaid land, he should show that the gain which has resulted therefrom would have employed more labor through other hands than it has employed through the hands of the railroad corporation and others who have received the profits he complains of. This he cannot do ; neither can he show that laborers have been excluded from said land. On the contrary, they have been brought there and provided with employment in largely increasing numbers ; and to-day they share the ben- efits which unquestionably result to the whole community from the accumulation of wealth which has taken place on the land in question. I rejoice in the discussion now going on in the ranks of labor. It is the one safe and peaceful road to the redress of grievances and the solution of the problem before it. 101 tWfVERSnY OF SOUTHERN C/ILIFORWIA ^\W Sk THE LABORER AND THE CAPITALIST. Labor must learn the science of its own progress and act from a positive knowledge of its relation to the world about it, and not depend upon outside advice. Labor has had the misfortune to have been sadly misled in several important particulars by some of its staunchest and most intelhgent friends. Not many years since a Pres- ident of the United States (Gen. Grant) declared that wages were always first to fall and last to rise. There was an abundance of authority for such a statement ; that is, if it be proper to call hearsay evidence authority. Thousands of distinguished men (friends of labor) had believed and said the same thing. In fact, we find this opinion expressed all through eco- nomic hterature. This, of course, leads the laborer to beHeve that when anything bad happens to the industrial world he suffers first and suffers longest. Nevertheless, such is not the case. When depressions come, capital and labor suf- fer equally ; but capital receives the first shock. There is never any general cutting of wages till after capital has suffered a loss of profits. Capital may not be any too good to cut wages, but when an employer has his factory filled with hands, trained to his work and accustomed to his methods, he hesitates to cut wages lest he lose his hands. Nine-tenths of the failures in business could be prevented if employers of labor were to promptly cut wages when prices begin to fall and profits shrink. But when this takes place, employers wait, and wait on, expecting a rise in prices and an increase of profits, which are always followed by 102 THE LABORER AND THE CAPITALIST. more or less scarcity of help when trained hands are hard to get. Therefore, employers, as a rule (for sheer business reasons), continue the same rate of wages long after their profits have begun to shrink, and many of them until they are overtaken by bankruptcy. But wages are the last to rise. The reason is very plain. When, after a fall in the price of goods, a rise takes place, the employer feels justified in allomng wages to remain un- changed, because through higher prices and larger profits he is recovering the loss he sustained while prices were fall- ing. Then, too, he is more or less selfish, and does not volunteer to raise wages, but awaits a demand from the labor market, precisely as the workman awaits a demand from the employer to receive smaller wages when prices are falling. So wages do not fall first and rise last, but fall last and rise last. This is as it should be. Labor does not get a rise as early as capital, but when the rise does come, it very justly lingers for a time after the profits of capital have begun to dwindle. How wonderfully does Nature make one hand wash the other, how unerringly she maintains a just balance between all her forces ! She has not made labor a necessity and then left it at the mercy of capital — labor's own child. But, you say, how about the rates of wages — are they just ? No. In many cases the rate of wages is far from just, and so are the profits of capital, and it is plain that this world would be vastly benefited morally, and much 103 THE LABORER AND THE CAPITALIST. grief could be assuaged, if rich and poor would practice that rule (more than golden) which enjoins the doing by others as you would have others do by you. This would have every employer of labor pay all the wages he could afford, and every employee take care to earn all the wages he received. Of course, one is as apt to neglect this duty as the other. Some employers get their help for too small an outlay, precisely as some employees receive more wages than they actually earn. However, the law of mutual dependence makes it for the interest of all to be just. If the laborer is found not to earn his wages for any great length of time he is dis- charged; therefore the necessity for employment compels him as a rule to try to earn what he has agreed to receive. On the other hand, the desire for gain will as a rule move the employer to pay all the wages he can afford. To illus- trate : John Diamond is a manufacturing capitalist. He is on the alert to make money. I enter his factory. There are benches not manned, positions not occupied. I say, " Look here, Mr. Diamond, why is your factory not filled with hands ? " " Well," he answers, " it's because it don't pay to fill my factory with hands. I am employing all I can afford to employ at the present rate of wages." "Are you sure you are right about this, Mr. Diamond?" " Why, yes. You know I am anxious to make money ; and if you will convince me that I can increase my profits by employing more hands I will engage them at once; I will man all my empty benches. I have never professed to be 104 THE LABORER AND THE CAPITALIST. much of a philanthropist, yet I would like to give men employment. Some are idle; they need work; their fami- Hes need the comforts it would bring- ; but, above all, I would like to make a profit on their labor. So when you see a vacant position in my factory you may know it is because I cannot make anything by paying the present rate of wages to fiU it." This illustrates an important principle in economics, and refutes the popular theory concerning wages and the profits of employers. Here are capitalists all over the wide world, hungry for profit, and there are more or less unoccupied positions in every country and in every industry, which proves that capital cannot afford to keep these positions filled at the present rate of wages. The never-failing test of the profits of capital is the employment of labor. To say that capital can afford, as a rule, to pay higher wages when, at the same time, men are idle, is to contradict hu- man nature. It is an unfortunate fact that strikes are more frequent and employers most blamed when manufacturing capital is yielding its smallest profit. CHAPTER XII. THE GULF BETWEEN CAPITAL AND LABOR. Socialism flourishes because of the belief that the present regime does not, and never can, result in a fair division of 105 THE LABORER AND THE CAPITALIST. the results of industry, and that a gulf does, and necessar- ily must, exist between capital and labor. In Dr. Strong's work, pages 145-6-7, there appears the following : "Equality is one of the dreams of Socialism. It protests against all class distinctions. The development of classes, therefore, in a republic, or the widening of the breach between them, is provoca- tive of Socialistic agitation and growth. Among the far-reaching influence of mechanical invention is a tendency, as yet unchecked, to heighten differences of condition, to establish social classes, and erect barriers between them. In a sense classes do and must exist wherever there are resemblances and differences ; but so long as the individual members of social classes easily rise or fall from one to the other by virtue of their own acts, such classes are neither unrepublican nor unsafe. But when they become practi- cally hereditary, differences are inherited and increased, antipathies are strengthened, the guK between them is widened, and they harden into castes which are both unrepublican and dangerous. Now the tendency of mechanical invention, under our present industrial system, is to separate classes more widely, and to render them hereditary. ''Before the age of machinery, master, journeymen, and appren- tices worked together on familiar terms. The apprentice looked forward to the time when he should receive a journeyman^ s wages^ and the journegman might reasonably hope some day to have a shop of his own. Under this system there was little opportunity to develop class distinctions and jealousies. *' Tools were not so expensive but that the workman might own them. And if he did not like his employer he could leave, taking with him the means of earning a livelihood. If he did not easily find another employer he could somewhere set up for himself. lUG THE LABORER AND THE CAPITALIST. This single fact of owning his tools made him independent. But the introduction of machinery changed all this. It could not be carried from place to place like a kit of tools. It was too ex- pensive for the workman to own. Without the machinery, owned by the employer, he was helpless. If he found himself out of a job he could not set up for himself. He has lost his independ- ence. Thus machinery has developed a dependent class, "Moreover, machinery has rendered it vastly more difficult to rise from the condition of an employee to that of an employer, thus separating these classes more widely. Once they were only a step apart. That step could be taken by a workman's employing another. They worked side by side until the business demanded another "hand," and then another, until the little shop had grown into a large one. Thus gradually the workman acquired capital — a course open to every mechanic. ''But since the introduction of machinery a considerable capital is necessary to make a beginning. It is found that, other things being equal, the small factory cannot compete with the large one, hence fortunes are massed and factories become immense. A mechanic, hy some Jiapi^y invention or through 7'emarkahle abili- ties, may yet become a capitalist and an employer^ but the con- dition of the average operative to-day is separated from that of his employer by an almost impassable gulf" On page 150 Dr. Strong further says : "It is easier to arouse the discontent of the workman now than it once was, among other reasons because the introduction of ma- chinery and the division of labor have made a large proportion of work monotonous and void of all interest. Formerly in every trade there was a great variety of work. A blacksmith, for instance, was not master of his trade until he could make a 107 THE LABORER AND THE CAPITALIST. thousand things^ from a nail to an iron fence. There was relief from tnonotony and scope for ingenuity and taste. But ma- chinery is introduced, and with it important changes. It is dis- covered that the subdivision of labor both improves and cheapens the product. And this double advantage has stimulated the ten- dency in that direction until a single article that was once made by one workman now passes through perhaps three score pairs of hands, each doing a certain part of the work on every piece. Manchester workmen, complaining of the monotony of their work, said to Mr. Cook : " It is the same thing day after day, sir ; it's the same little thing ; one little, little thing, over and over and over." If there is really a gulf between capital and labor, cer- tainly aU good people will be anxious to know its exact location and to bend their energies to the noble work of de- stroying it. And what can be more convincing to the general public than the arguments just quoted ? However, in a previous chapter I have recommended that each individual shall test all aro-uments in the crucible of his own reason. Let us apply this principle to the propositions of Dr. Strong. He says that before the introduction of machinery, " the apprentice looked forward to the time when he should re- ceive a journeyman's wages." The good Doctor also states that formerly in every trade there was a variety of work; that a blacksmith, for instance, " was not master of his trade until he could make a thousand things, from a nail to an iron fence "; but that now the workman is confined to the monotony of making one thing day after day, over and over. The result of all this, according to Dr. Strong, has 108 THE LABORER AND THE CAPITALIST. been to develop huge manufactories and to open almost an impassable guK between capital and labor. Without the slightest thought of reflecting upon the candor or ability of Dr. Strong, I must say that the very elements most needed to give the reader a clear under- standing of the subject are not taken into account in his argument. He admits that it has been discovered that the present system (the subdivision of labor) both improves and cheap- ens the product, but his accompanying comment, to wit : " The introduction of machinery and the subdivision of labor have made a large proportion of work monotonous and void of all interest," is calculated not to enlighten the workman, not to make him philosophic, but to befog him, and to over-intensify the restless spirit of the masses. A certain kind of unrest is natural. Some one has wisely characterized unrest as divine. Make the human race con- tented, and progress would stop, and great discoveries and new inventions would no longer attract attention nor cheer the world with the prospect of a happier future. I be- lieve in restlessness, but it should be considerate and phil- osophic. Why not try to make the workingman feel the all-im- portant truth that the new system of manufacture should not be regarded as more monotonous than the old, because, as a matter of fact, it is not. The custom shoemaker of the present day, for example, who makes every part of the shoe as he formerly did, is quite as restless and complains as much of his situation as the factory hand whose work is 109 THE LABORER AND THE CAPITALIST. narrowed down to tlie driving of the nail, the tnmming of the heel, or the making of the edge. Again, why not state the fact that the better and cheaper product of the new system is greatly to the advantage of the workingman, since it has made it possible for him to have a thousand things that only the rifh could enjoy he- fore the introduction of machinery. Again, why not show forth the almost incalculable ad- vantage which the new system has over the old in that one who desires to become a mechanic does not have to give the best part of his hf e to the learning of a trade ? He is not obHged to look through seven long, dreary years of appren- ticeship to a journeyman's wages, but walks straight to the factory, as it were, and receives his wages at once, and thus at least one-third of the most active period of his life is saved to the workman — a sufficient length of time to acquire the foundation for a large fortune, if that be his aim, or to possess himself of an education which was entirely beyond the reach of the apprentice under the old system, which demanded that one should learn to do a thousand things in order to earn a mechanic's wages. Dr. Strong makes a very unfortunate mistake when he falls into the common error " that machinery has rendered it vastly more difficult for an employee to rise to the position of an employer," and " that it is harder for the workingman to acquire capital." The latter proposition cannot be true, since wages are vastly higher and the necessaries of life much cheaper. And the former statement is mathematically refuted in our chapter on corporations, in which it is shown 110 THE LABORER AND THE CAPITALIST. to a certainty tliat rapidly growing associations of capital are opening the door wider and wider to small investors, and that through this avenue the people are employing one another as never before. What is this but the employee rising to the position of an employer more easily than for- merly ? Let these facts be made clear as they exist, and alto- gether a new feeling will take possession of the masses, for it is not truer that light emanates from the sun than it is that the modern methods of manufacture described by Dr. Strong as naturally calculated to make the masses dis- satisfied and unhappy, ought to have the very opposite effect, and will when rightly understood. However, the central subject for discussion in this chap- ter is the gulf between capital and labor. Dr. Strong thinks that it exists and is almost impassable. The idea of a gulf between capital and labor is old, and the existence of this cruel chasm has been talked about and believed in from time immemorial ; but, so far as we know, nothing has been said or written upon the subject from which one can draw any definite conclusion regarding its location, etc., except that it is where the larger portion of the human race tarry and toil and suffer, while the smaller portion go on pros- perous and happy, encountering but very little hardship. It is getting to be the popular belief that this merciless condition is to exist until government takes the matter in hand, and our present economic system is swallowed up in a co-operative commonwealth or Socialism. If there is a gul£ between capital and labor, where does 111 THE LABORER AND THE CAPITALIST. it begin, and who has created it? Of course the popular theory is that the capitaHsts have created it. We never heard it said that laborers were creating any gulf between capital and labor, or that they stood in the way of any- body's success. Of course, then, the capitaHsts have opened the fearful chasm. Very well, when we say that capitaHsts are the guilty ones, what capitalists do we mean ? Remember, we are all capitalists, pursuing the same end and employing the same business methods. We differ only in the "size of our pile," as the saying is. Now, it so happens that more than one-third of the labor of the country is employed by comparatively small capital- ists, many of them very small. Most farmers employ labor, and the average value of farms is not above three thousand doUars. Custom shoemakers, custom tailors, tinners, plumb- ers, carpenters, blacksmiths, etc., are small capitalists; but, like farmers, they are numerous, and although each employs but little labor, the aggregate amounts to a great deal. These capitaHsts work side by side with their help. Their hands are as horny and their clothes as ordinary as those of their employees. It will not be pretended that these peo- ple are creating a gulf between capital and labor. Nobody thinks of them as standing in the way of the better success of anybody. Then, of course, the gulf is the work of the larger capitalists. Let us see. As a rule, the larger capitaHsts pay higher wages than the smaller. They sell goods at lower rates 112 THE LABORER AND THE CAPITALIST. and they employ more help. Now, if employing more help, paying higher wages, and selling goods cheaper are open- ing a guK between capital and labor and hindering the people, then, in the name of common-sense and for the sake of humanity, tell us what will help the people. Whether a fortune is measured by hundreds or thou- sands, or whether it reaches into milUons, is not material. Those who live under the same government buy and sell in substantially the same market, and pay and receive sub- stantially the same price for labor and whatever else is re- quired to make a fortune. Therefore, if the acquiring of a million has hindered anybody, it has hindered him who has acquired half a million ; a half a million has hindered a quarter of a million ; a quarter of a million has hindered a hundred thousand ; a hundred thousand has hindered fifty thou- sand ; fifty thousand has hindered twenty-five thousand ; twenty-five thousand has hindered ten thousand; ten thousand has hindered five thousand ; five thousand has hindered one thousand; and upon the same prin- ciple one who has acquired a thousand dollars has hindered him who has acquired five hundred, and so on down to the smallest difference. Again, when we come to wage-earners and those whom we call salaried people, the principle applies to their case with equal force. If Chauncey M. Depew's salary of fifty thousand a year hinders anybody, it hinders the man who receives twenty-five thousand ; that man hinders him who receives ten thousand ; that man hinders him who receives 113 THE LABORER AND THE CAPITALIST. five thousand; that man hinders him who receives two thousand ; that man hinders him who receives twelve hun- dred; that man hinders him who receives six hundred; and upon the same principle, the man who receives a salary of six hundred dollars a year hinders all who receive less. Where, then, is room for a gulf between any two classes that does not exist all along the line, from the lowest paid laborer to tlie wealthiest capitalist? The wage-earner receiving the smaller salary thinks his would be larofer if those receivino- more were out of the way or were paid less. The same is true of all classes, from the richest to the poorest, from the smallest income to the largest. The president of a corporation, with a salary of only ten thousand a year, beholds a great gulf between himself and Depew v/ith a salary of fifty thousand. The capitalist whose wealth amounts to only a hundred thousand dollars beholds a still wider gulf between himself and the man with a million. The man with a million looks hopelessly at the apparently intraversable distance between himself and a Rockefeller. Therefore, it would seem that this much-talked-of gulf is a creature of the imagination. It is always just ahead, yet has no permanent abiding-place. It is between every man and the position he desires to reach. The theory that the rich stand in the way of the better success of the poor is not sound. Let us illustrate : On yonder height, perchance by the sea, stands a magnificent dwelhng. It occupies the finest lU THE LABORER AND THE CAPITALIST. site in all that region of country. Of course, nobody can be blamed or praised for the site, for the reason that nature created it. One site is more beautifid. than another every- where, and all cannot occupy it at the same time. Some- body must take a back seat when it comes to beautiful building sites. However, the rich man owns the one in question, and the palatial structure that stands upon it. Of course he holds all this at the exclusion of the poor, but he holds it at the exclusion of the rich also. Remember, the rich all want that site as well as the poor; therefore, so far as any are excluded, rich and poor fare the same. However, a poor man once owned this beautiful spot and cultivated it with his own hands. Now consider that when the poor man occupied the site where now stands the stately dwelling all the rest of the poor were excluded. The owner employed no help, so of course he was of no assistance to his wage-earning neighbors; they were left out in the cold so far as this spot of earth was concerned. But a rich man came and bought the poor man out. This did not hurt the poor man. He received pay for his improvements and whatever rise had taken place in the value of his property in consequence of settle- ments round about and near by. Of course the rich man had to have a costly house and costly surround- ings. To accomplish this he was obliged to call for labor, and he employed more the first year in creat- ing one building than would have been employed in ten, yea, fifty, years, had this same land been left 115 THE LABORER AND THE CAPITALIST. in the hands o£ the poor man. Not only did the rich man employ more labor the first year, but he must continue to employ more. It requires constant help, and a good deal of it, to cultivate lawns, hedges, care for teams, and do the work of a rich man's household. Turn that renowned thoroughfare in New York City known as Fifth, avenue back into wheat-fields, potato patches, etc. (the condition it was in when in the hands of the comparatively poor), and ten men will cultivate it from end to end; while now, it is safe to say that ten thousand are employed there, with salaries more than a hundred per cent, higher than had been dreamed of before most of those costly dwellings were built. In short, the rich have come, not to open a gulf between capital and labor, but to employ more help and pay higher wages. CHAPIER XIII. IS WEALTH CONCENTRATING? Nothing is more generally believed than that the wealth of the United States is being rapidly concentrated. Reader, have you ever asked yourself the question, "Is it true?" Probably it has never entered your mind to doubt a proposition so universally admitted, preached, and acted upon. Great and good men say that the wealth of 116 THE LABORER AND THE CAPITALIST. the country is coueentrating and the freedom of the people is thereby endangered ; everybody else seems to beheve it, and you behold a colossal fortune here and a goodly num- ber of poor people near by, and it appears perfectly plain that wealth is concentratino- in the hands of a few to the o woe of the many. And then follows the question : " Where and how shall we begin to remedy the evil?" The Comraercial Advertiser, New York, March 2, 1894, has an editorial pertinent to this point, as follows : " 'In a multitude o£ counselors,' said the wisest of mortal men, ' there is wisdom.' No one man or set of men knows it all. "The Morning Advertiser had adopted the expedient of calling upon its readers for their views upon the most important question of the day, the Social Problem. To this subject individual think- ers have addressed themselves for ages, striking a ray of light here, stamping out a fallacy there, and eliciting an imperishable truth elsewhere. Something has been done, indeed, and the world is ripe for the next advance. The enormous success of Mr. Bellamy's book, "Looking Backward," proves that the thought of the day is centered upon the practical working out of the prob- lem. "Who knows but one of our own readers possesses, unsuspected even by himseK or herself, the key to the problem which, once applied to human affairs, will make all things clear. "Therefore, if you have any views, any convictions at all on this subject, no matter how commonplace they may seem to you or how radical they may appear to others, put them on paper and send them to the Morning Advertiser," Undoubtedly there have been a great many responses to the generous invitation to the pubhc to discuss the Social 117 THE LABORER AND THE CAPITALIST. question througli the columns of the Advertiser, and it is highly probable that a very large majority, i£ not all, of those respondents have proceeded with the discussion upon the theory that wealth is concentrating, and that such con- centration is against the pubHc weal. These premises being admitted, the rich man is very naturally discussed as the wicked progenitor of a great evil, since he is unquestiona- bly the concentrating power. In the first place, what do we understand by the word concentration as applied to wealth ? For wealth to concentrate, according to popular under- standing, it must move from the possession of the many to the possession of the few, without a fair equivalent. There are large accumulations of wealth, but if the the- ory I have advanced regarding the law of exchange, which I claim compels each one to give value equal to that which he receives, be sound, there has been no general accumula- tion of wealth in the hands of a few without an equivalent havinof been rendered. The reason that the working- of this law is not more readily seen is largely owing to the fact that the popular gaze is so fixed on the exceptions, which are common to all rules. The people are trading, rich and poor ; goods are being exchanged for labor and labor for goods, according to the general market price, which represents the best judgment of the people at large as to the value of goods. This is evident from the fact that the people at large have estab- hshed the market price and that, as a rule, they base their contracts upon it. 118 THE LABORER AND THE CAPITALIST. If Socialism were in the ascendancy, and the government were to divide the products of labor between man and man, how could it do better than to order the exchanofes made according to the best judgment of the whole community, which is now represented in the general market price of goods and of labor as well. As we have previously stated, the world is doing its trad- ing, exchanging goods for labor, and labor for goods, upon the theory that the general market price is the best rule to go by as to how much money shall be received in exchange for a given quantity of goods or a day's work, or how much of one kind of commodity shall be received for a stated quantity of another. I feel warranted in saying that Sociahsm has not, neither can it invent, a system for the distribution of the results of industry that can ap- proach in fairness the one aheady in vogue. Neither can one be imao-ined that will stimulate honest effort to a hisfher degree. But here comes an unprincipled individual, or a trust, perhaps, and undertakes to raise or depress the mar- ket. They sometimes succeed for a time ; but the trans- action generally proves disastrous in the long run, even to the operators. It almost invariably follows that when the price of one or more kinds of goods is unnaturally inflated, they fall as far below the hue of honest profit as they have been raised above, so that the promoters of schemes for controlling the market usually lose as much from one extreme of price as they gain from the other. But how seldom do these things take place when we con- sider them in comparison with the vast volume of trade 119 THE LABORER AND THE CAPITALIST. that moves along unceasingly and undisturbed by such interference. This must not be taken to mean, however, that I justify unnatural interference with prices by individuals or corpo- rations ; neither do I say that such things ought to be per- mitted. I simply wish to show that, on the whole, it is not a money-making business, even for those who engage in it, and that such interference does not argue against the the- ory that the system of exchange I am defending is the best that can be devised, any more than the gullying of lands by floods and the occasional uprooting of trees here and there by the wild wind argue against the general util- ity of the Infinite plan for watering the earth with rain storms. But the attention of the world is so fixed upon the unusual occurrences that the harmony of the general plan receives but little attention. Then, too, these colossal for- tunes on one hand and widespread poverty on the other are constantly before the eye and in the mind. " K there has been no concentration of wealth, how can such differences come ? " is the anxious, unceasing inquiry the world over. I have already discussed this matter in a general way, but a few pointed illustrations will, I trust, make the principle more easily understood. For example : Astor is said to have built several thou- sand houses. Of course, it will not be denied that the building of the first helped the community and added to the wealth of others as well as to that of Astor. If this be true, the same result has necessarily followed the building of the last house and all the intermediate ones. Why not ? 120 THE LABORER AND THE CAPITALIST. But, according to popular theory, Astor has built too many houses. He ought to have let others build more. Has Astor prevented others from building houses ? And if others had built the same houses that Astor has built, vrould they have employed more helj) ? Or would they have bought more material from the people than Astor has bought ? If not, what would have been the advantage to the general public in having others direct those building operations in- stead of Astor ? But it must not be supposed that others would have built those houses if Astor had not. Others have not built less because Astor has built more. On the contrary, every ad- ditional house built by him, or built through his energy, has created a market for more of the jDeople's labor and material. This has necessarily increased the opportunities of others, not only to build houses, but to engage in whatsoever other enterprises they saw fit. Astor is reputed to be the largest real-estate owner in the country, Pulitzer the richest printer. According to the popular idea both are great monopolists. Should you desire to read a rating and berating of Mr. Pulitzer by a labor publication, see The Twentieth Century , October 12, 1893. However, Mr. Puhtzer has lately reared the most valuable structure of its kind on the globe. It is the most costly home a newspaper ever had. It is a comphment to the business talent of its owner, and an ornament to the city above which it towers so grandly. I watched it while it was in process of erection ; I heard the sound of the trowel 121 THE LABORER AND THE CAPITALIST. and the hammer ; I was glad as, day by day, it mounted skyward, still skyward, till the gilded dome almost touched the clouds. And when it was finished I wished that its owner might build a thousand like it, since every pound of stone, every pane of glass, every foot of lumber, every brick, every nail, every drop of paint, etc., would have to be bought of labor. And then, every dollar received for rent would be used to purchase labor, or goods produced by labor, so that after Pulitzer shall have passed from earth the building he has reared will continue to administer to the wants of the human kind. The benefits accruing to the general public from the ef- forts of great financiers are less understood and appreciated, owing to the fact that what they (the financiers) gain for themselves as a rule remains largely in one locality, where everybody can see it, while that gained by others as a result of the efforts of the financiers, is scattered. Let us illustrate the principle by a reference to the two men just discussed — Pulitzer and Astor. New York is the seat of their business. Jones has per- formed labor for them. The money panl him he has taken to a far-away State to use in the purchase of a home. Smith has sold them paint, glass, etc.; the brickmaker has sold them brick; the quarryman has sold them stone; the lumberman, lumber. With the profits realized from such sales, these merchants and laborers have employed other labor, erected buildings in other cities, or, perchance, built ships that now float on distant seas. In other words, what- ever PuHtzer and Astor gain is piled up in New York, 122 THE LABORER AND THE CAPITALIST. where it is created, while that which has been gained by the great number who are now and have been employed by them, and who have enjoyed their trade, has been carried in fractional parts to the east, to the west, to the north^ to the south, and has become so mixed and interwoven with gains from other sources that it cannot be pointed out as having been helped into existence by the energy of Pulitzer and Astor. But it has, nevertheless ; it exists as a result of their wealth which we see piled up in New York; so that their energy has not centralized wealth in the sense of taking without rendering an equivalent. On the contrary, their efforts have helped others precisely as they have helped Pulitzer and Astor, for the all-sufficient reason that they have been obliged to buy as much of others as others have bought of them. This is a beneficent law of nature, against which the selfishness of men cannot prevail. In the absolute sense, the capitalist is as much the em- ployee of the laborer, as the laborer is the employee of the capitalist. The laborer is employed and prospers precisely as the capitalist buys his labor ; the capitalist is employed and prospers precisely as the laborer purchases his goods. Or, to state the same fact in another way, that which the capitalist pays out to the people for their labor and products is precisely that which the people pay back to him for his labor and products. One exactly balances the other, no more, no less. How, therefore, can one flourish at the ex- pense of the other, or how can one be made to suffer with- out involving the other? Infinite Wisdom has made labor a necessity, and provided 123 THE LABORER AND THE CAPITALIST. accordingly. We can neither eat, drink, nor wear our money ; we must spend it or cease to exist upon the earth. And the precious fact is that, however unwisely we spend it, labor is sure to get the benefit. If the rich found private collections of art, as the good chaplain, before quoted, complains, it costs money, and every farthing of that money goes to labor, not to any par- ticular class, but to every variety of labor. The money paid for a picture is received by the artist in the first instance. He, like everybody else, being unable to eat, di'ink, or wear it, must lay it out for something which other laborers produce. If the rich stock their cellars with wines and liquors, the money paid goes to the merchant, from the merchant to the brewer, from the brewer to the farmer for corn, rye, grapes, or whatever has entered into their composition, and from the farmer to his help, etc. In short, the money that stocks the rich man's wine cellar finds its way to every in- dustry and to every toiler. This by no means justifies one in buying that which is not for his own highest good ; but if he will indulge in wine and luxurious living the money so expended is as certain to find its way to the pockets of the good and frugal through that channel as through any other. Every additional servant employed by the rich takes a laborer from other fields, bettering the condition of all. If they build a yacht, the money paid reaches not only the yacht builder, but the lumberman, painter, nail and sail maker, etc. 124 THE LABORER AND THE CAPITALIST. Let them build their pleasure boats and rear their palaces to the skies ; let them have their rich pianos and gaudy trappings — the more numerous and costly the things they buy the better it is for the skilled laborer who must be em- ployed to produce them. When I was casting about for a stenographer to whom I wished to dictate the contents of this volume, I came across an intelligent gentleman of that profession, who, in the course of the conversation, asked some questions with regard to the nature of the work I had in hand. I told him it was a work in which I thought of discussing monopoly. " Will you undertake to defend monopoly ? " he asked. I answered that I would not defend anything that was wrong in monopoly. " Why," said he, " you will not insist that it is right for one man to have a hundred millions, while his next door neighbor is without a dollar, will you? " This gentleman's mind is a fair index to the popular mind regarding such matters. Now the question, and the all-important question, in the case is this : Are the rich man's neighbors poorer on account of his wealth ? Have they had fewer opportunities because he became rich ? There is not a toiler on the soil of America whose opportunities to have dollars, if you please, have not been increased by the business energy of the rich man. The men he has employed could not have been employed without him. " Now, hold on," says one, " if the rich man had not carried on that railroad business, somebody else would." Very well, but it would have 126 THE LABORER AND THE CAPITALIST. called that somebody else from fields where he is now employing other labor. The truth is, every human being that comes into the world, fills a niche that no other being or beings can fill. When one passes from earth another may step into his shoes, as the saying is, and continue the same business with, perhaps, equal success, but could the former have re- mained at his post the latter would have been left free to exert his energy in other directions and to employ labor in other enterprises. It is a self-evident truth that, as a rule, whatever any one human being plans or executes, whatever he accomphshes with head or hand, is so much added to the sum total of what before existed, or to what could have existed without him. But why prolong the argument ? There is a way to set- tle the question as to whether our great financiers concen- trate wealth or diffuse it ; whether they are a hindrance to the poor or a benefit. If weeds are found in the corn- field, remove them, and the corn grows faster. Allow the weeds to grow again and the corn immediately becomes choked, and shows the effect in slower and less satisfactory growth. Now, if the rich men are weeds, if they choke and hinder the financial and moral growth of the people, the Southern States ought to be the poor man's Eden. There are very few rich men and corporations there with their cruel factories overworking women and children, as weU as men, and underpaying everybody. The thing most needed in the generous and hospitable South is a larger number of rich men and more great corporations. 126 THE LABORER AND THE CAPITALIST. The question is often asked : Why do not these rich men give their help some of the advantages resulting from their great business talent? Why do they selfishly put all they gain in their own pockets ? This is a very important question, and one that stirs a deep feeling in the heart of labor. It calls many an angry expression from the Ups of employees ; but a principle is here involved which the popular gaze has not reached. No laborer will ever ask the same question after he has learned the effect of what he calls the selfish pocketing of profits by great financiers. Imagine Rockefeller ahd Vanderbilt, for example, calling the working people of the country together and address- ing them as follows : " Wage earners, we are employing a great many thou- sand hands. We are paying them as much wages as others are paying who employ a smaller number. Our wealth is increasing rapidly, and all we gain we are using to extend our business. We build a house or factory here, a depot there, a railroad somewhere else, and so on. All of which compels us to hire more and more labor. But we have concluded that we are rich enough ; so from this on, we will divide our profits among our hands. Wage earners, what do you think of it ? " The hands in their employ would say, " We like it." But all outside would say : " Now, gentlemen, please don't do it. You are paying the market price for hands at the present time. Why should you raise their wages and make them so much better off than the rest of us ? Why not 127 THE LABORER AND THE CAPITALIST. continue them as they are and use your surplus profits to extend your business and hire more hands, and thus give the rest of us an opportunity to share the results of the talent which our common Parent has given you ? " The two men just discussed do not use all their profits to extend their own business ; far from it. They are gen- erous supporters of charitable enterprises ; but to divide their accumulating surplus among their " hands " would not be wise charity, since it would concentrate the results of their business energy in the hands of their present em- ployees, while to reinvest it would diffuse it among a much larger number. Thus we see that the continual saving and reinvesting does not necessarily centralize wealthy though it makes some men very rich. CHAPTER XIV. HAS WEALTH CONCENTRATED ? (CONTINUED.) Great confusion and many wrong conclusions regarding the centralization of wealth have arisen from a lack of thor- oughness in the study of principles underlying the distribu- tion of benefits arising from increasing values. The fol- lowing, copied from the Press, before quoted, December 2, 1893, will help to illustrate our idea : "The present site of Chicago was sold by the Indians for three cents an acre. Taking the most valuable corner lot in the busi- ness part of the city as a criterion, the value has increased 130,- 128 THE LABORER AND THE CAPITALIST. 000,000 per cent. In ] 830, when there were fifty people scat- tered around Fort Dearborn, a quarter of an acre of land in what is known as the " heart of Chicago " could have been purchased for 120. ''In the past sixty-three years there were only two years in which the city did not show an increase in population over the previous year. But there were thirteen years during that time when this quarter of an acre of land showed a decrease in value, according to the real estate appraisement. "The greatest increase per cent, recorded was in 1835, when it rose in value 400 per cent, over the value of the previous year. With our latest knowledge of real estate " booms "it is easy to picture the vision the owner must have had of the future glory of Chicago when he raised the price of his corner lot from $200 in 1834 to $5,000 in 1835. To-day the lot is assessed at $1,200,000." This fact will generally be taken to mean that such an increase in the value o£ land in a single city means a tre- mendous concentration of wealth in the hands of a few, which will necessarily work hardship to the many. But, that such is not the case, is proven by the fact already mentioned in another chapter, to wit : When the value of one lot increases, the value of the adjoining lots increase also, and so on. When city lots increase in value, it is in consequence of a growing population aud larger trade, which calls for more of the products of the soil and enhances the value of the farmers' land as well everywhere. A great many are of the opinion that the first purchasers of land, whether corporations or indi\aduals, reap a benefit for which they render no equivalent, and in this way wealth 129 THE LABORER AND THE CAPITALIST. is concentrated. . I refer, of course, to the rise in the value of land which it is claimed results, not so much from the energy of the first purchasers, as from the energy of those who come later. It cannot be denied that large fortunes have been real- ized through sudden advances in the value of land, con- sequent upon rapid settlement. Those who have had the energy and courage to invest early have sometimes reaped a rich reward ; but have not such men quite as often failed ? How many fortunes have been sunk through investing in land in anticipation of a rise, which either did not come, or came too late to save the investor from bankruptcy and ruin. Failures among land speculators are as frequent, in proportion to the number engaged, as in any other depart- ment of trade. Can it be shown that, as a rule, the early investors in New York, for example, have reaped a benefit not shared by the later investors? In other words, is the present value of New York city more the result of the efforts of the later than of the earlier settlers ? Let us see. Brown settled there first; then Jones came, which in- creased the value of Brown's property; but it increased the value of Jones's property also. Then, too, taxes and other expenses increased as the number of settlers increased. So that by the time the population of New York city had reached a million Brown and Jones had paid an enormous price for their possessions and an immense income was necessary to maintain them upon the very lots they had purchased long years before for a small sum. 130 THE LABORER AND THE CAPITALIST. Here is involved a principle of economics, which those who complain that the private ownership of land concen- trates wealth appear to have overlooked. I refer to the actual cost of land to the owners. If we reckon the usual rate of interest and the taxes paid and other expenses consequent upon the ownership of land, we shall find that the first purchase price, and in many instances the present value of every foot of land between Central Park and the Battery, has been paid by owners over and over ao-ain. A real estate agent lately stated that not long since he sold a piece of land in the city of New York for a gentle- man who had owned it forty years, and who was very happy over the price he was receiving. The agent sug- gested that he compute the interest on the money invested, the taxes, and other incidentals, and see what the expense had been from the first to last. When this was done, lo and behold, the land had cost the owner almost four times what he was receiving for it. How can it be said that, as a rule, the earher settlers have not contributed their share toward the present value of the whole city ? Take notice, if one-half of the wealth of New York city, say the half that has been accumulated by the later settlers, were to be taken away, the value of the remaining half would be greatly diminished, but no more than the value of the later accumulations would be diminished by the re- moval of the earlier. Therefore, the present value of the city is no more the result of the presence of the later than of the earher ; no 131 THE LABORER AND THE CAPITALIST. more the coining of the last man than the first. And, of course, what is true of New York city is true of all cities and all lands. Much bad feeling has arisen regarding the ownership of land and landed corporations, owing to the supposed ten- dency of land to center in the hands of a few people. The popular belief is that the land of the country is falHng into the hands of the rich in larger and larger quantities, and that the poor are being excluded therefrom. Such is not the case, however. Neither is it the tendency of land to concentrate in the hands of a few. In countries where the law of primogenitiu'e and entail prevails, land, once in the hands of a few, is kept there by the force of statute law; but in the absence of that law the tendency of land in the long run is to diffuse. There has been a time when Man- hattan Island, upon which the great city of New York now rests, was probably owned by less than fifty persons. It is now in the hands of many thousands. Thirty years ago a very few owned the land upon which the city of Chicago now stands; what a great number own it at the present time ! As it is with cities, so it is with larger areas. Sixty years ago a few thousand people owned the States of New York and Illinois ; now their owners are counted by the hundred thousand. The government has granted large tracts of land to rail- road corporations, in consideration of their building roads through certain sections of country — perhaps too much has been granted. Nevertheless, the interest of these corpora- tions now is to seU this land in the smallest possible quanti- 133 THE LABORER AND THE CAPITALIST ties to actual settlers, since the result will be a denser population ; and, therefore, more business and larger gains for the raihoads. A corporation has bought a large tract of land in eastern Tennessee, mainly from settlers owning all the way from ten to several hundred acres. At first glance this looks like a concentration of land in the hands of a few. In fact, it is a concentration in the first instance, but it hardly need be stated that in less than five years that land will be diffused among a population ten times larger than owned it before the corporation took it in hand. The government statistics show incontestably that land is diffusing. In the State of New York, from 1870 to 1880, the acreage under cultivation increased only 7.2 per cent, while the number of farms increased 11.5 per cent. In Connecticut acreage increased 3.8 per cent. ; number of farms increased, 20 per cent. In Rhode Island acreage increased 2.5 per cent. ; number of farms increased, 15.8 per cent. In Massachusetts, and indeed in all the older States, the land is diffusing in about the same ratio as in those mentioned. In some of the newer States, however, there is a slight difference the other way, owing to the fact that so many immense cattle ranches have been established and reckoned as farms. But as civihzation approaches and settlements draw near, it will not be profitable to hold these large tracts of land for pasturage, and they too -wall diffuse among the people. If from any cause, some of those who now own large tracts of land sell at a great profit, we know that those 133 THE LABORER AND THE CAPITALIST. adjoining are better off also. Nothing can enhance the vahie of large estates that will not at the same time en- hance the value of the smaller ones in the same ratio. Where, then, is the concentration ? In other words, how can it be shovv^n that the larger are taking from the smaller ? Foreign syndicates have bought large tracts of land in this country, and in some instances they are leasing to a class of imported farmers, whose habits of living enable them to become dangerous competitors for our American- born farmers. I do not believe that that kind of land monopoly results in the good of all. The matter should be looked into, and our agricultural interests protected. This cannot injure the imported farmer, since whatever pro- tection is extended to the American-born farmer, will reach the imported farmer as well. However, the cases in question are exceptions. As a rule, landed corporations are a blessing to the people, for the great reason that their interests are one with the interests of those needing homes. They have bought large tracts of land in different parts of the country. To increase the value of this land, so as to make it yield a profit for the present owners, there must be settlers. And, in order to secure these settlers, the corporations must employ labor to make roads, to dig ditches, to build houses, etc., etc. They must also sell portions of the land here and there at low rates. They are after gain, and in the end they usually get it. Nevertheless, poor people are aided in getting homes and share the profits resulting from the increasing value of all the property. 134 THE LABORER AND THE CAPITALIST. But, it may be asked — what about interest on money ? Does not that lodge the earnings of the many in the pockets o£ a few ? Does not interest concentrate wealth ? A very argumentative book on the subject of capital and labor was written by Edward Kellogg, revised by his daugh- ter, and pubKshed by Lovell & Co. in 1883. On page 189 appears the following : '"In all ages and nations the rates of interest maintained have been so high as continually to concentrate the wealth in a few hands." On page 187 I find as follows : "Although the rates of interest in all old countries are much lower than in new countries, yet they are sufficiently high continu- ally to centralize the wealth and to increase more and more the number of the poor." On page 189 the author says : "When the wealth of a nation becomes thus centralized the pro- ducers and distributers who are destitute of property are compelled to borrow. Etc." The opinion of this author regarding the effect of interest is being shared more and more every year by the populace and by writers as well. Mr. Kellogg does not advocate the abolition of interest entirely, as many do, only a reduc- tion of the rates to one or two per cent. I once behoved in this theory, and advocated it to the best of my ability. In fact, my effort to so master the philosophy that I could present it in a way to make it irre- sistible was precisely what led me to the discovery of its fal- lacy. Let us place Mr. Kellogg's arguments under scrutiny. 135 THE LABORER AND THE CAPITALIST. In the first place, when he assumes that those " without property are forced to borrow," he overlooks the fact that people without property could not borrow if they would. Only those with sound property security can borrow money to any considerable extent. Usually real estate security is required. You might stand in a New York city bank, for example, for a whole month, and you would not see a sin- gle poor man come to borrow money. It is safe to say that 90 per cent, of all the money borrowed is by men of large means. The borrower must be understood to possess sub- stantial property or he will not be granted a loan of any considerable amount. Therefore, if interest hurts the borrower, the rule wiU be that those are hurt who are best able to stand it. But the question may be asked : " Do not those borrow- ing money to use in business add the interest to the price of whatever they sell, and in this way shift the biu*den from their own shoulders to the shoulders of others ? " Others, of course, means labor. Right here, many think they see interest robbing labor and centralizing wealth. If this theory be correct, that is, if those who borrow compel others to pay the interest, of course the borrowers get the use of this money without cost to themselves. Therefore, interest does not hurt the borrowers — only those Avho are not borrowers. Already, we begin to see something wonderfully incon- sistent in popular logic regarding this matter of shifting the burden of interest. If one class of borrowers can shift the burden of interest, 136 THE LABORER AND THE CAPITALIST. another can. As it is with the merchant and manufacturer, so it is with the farmer. Why, therefore, should any of these borrowers concern themselves about the rate of interest, since somebody else has to pay it ? Let us test this theory of burden shifting. CapitaHsts engaged in farming, mining, etc., produce what is called raw material, all of which is sold to the manufacturer. Suppose this class of capitalists to hire money : add the in- terest to the selling price of their raw material, and the manufacturing capitalists pay it. So far, the producers of raw material appear to have shifted the burden of interest to the shoulders of the manufacturers. But it so happens that these producers of raw material buy this same product right back again in the shape of manufac- tured goods. The manufacturers, of course, add the amount of their interest to the selling price of their goods and the producers of raw material pay it. Now the burden of interest appears to have come back to the producers of raw material. If this be true, then as often as the manu- facturer of goods and the producer of raw material ex- change products, which is once a year, to the full extent of aU they have to spare, just so often the burden of interest is shifted from one to another, back and forth, back and forth. Therefore, the burden has not shifted at all, since it does not remain with either class. But, you may ask, " Do not all these capitalists charge this interest up to labor, and in this way compel labor to bear the burden of interest ?" Let us see. 137 THE LABORER AND THE CAPITALIST. If tlie wage-earner pays interest, the capitalists pay him the wages that pay that interest, which is the very money the wage-earner would otherwise use to purchase goods of the capitalist. How, therefore, can it help capital to charge interest up to labor, since the more interest labor pays, the less goods it can buy of capital. It would be just as impossible for capitalists to benefit themselves by beating and murdering the people, as by throwing a burden upon labor. Every blow dealt injures a customer; every person killed loses them a patron. A careful analysis of the subject will reveal the fact to the humblest understanding, that if interest were a burden added to the selling price of goods, everybody would be obliged to bear a share, since everybody is obliged to buy goods. Men will not (barring rare exceptions) borrow money ex- cept they see an opportunity to reahze more from it than they promise to pay for the use of it. Or, to state the same principle in another way, the loaner cannot, as a rule, find a market for his money at a rate of interest that will not allow the borrower to reahze a profit from the use of it. The interest of no business is more closely related to the interests of the people than that of the money loaner. No sooner does the price of commodities faU than rates of interest fall. When prices rise, interest rises. When business stagnates the people use less cui-rency and the money flows back to the banks, where it lies X38 THE LABORER AND THE CAPITALIST. unused, yielding the banker no profit. Money loaners have no power to strike the people a blow that will not react upon themselves. However, at the beginning of the preceding chapter it was asked, "Has wealth concentrated?" The ques- tion is not yet answered. I have been considering the different methods and systems which are supposed to concentrate wealth. But so far none has been discov- ered that appears to lead to that result. The facts relied upon to establish beyond all cavil the theory that wealth has concentrated and is still concentrating are the government statistics referred to in the speech of Mr. Wilson in reply to Mr. Reed (both gentlemen quoted in the chapter entitled "Growth and Argu- ments of Socialism"). I will requote Mr. Wilson as follows : "March 10, 1850, Daniel Webster said that five-sixths of the property of the North belonged to the workingnien of the North. Can any representative from the commonwealth of Massachusetts make such a glorious boast to-day?" Mr. Wilson then referred to the census report, as you will remember, and asked that every citizen pause and pon- der, as to whether it indicated a growing prosperity or a dangerous decadence, and then said: "It appears in that report that of all the men occupying farms in this country to-day one-third of them are tenants, living on farms of others. It appears that of all the people occupying homes, other than farms, two-thirds live in rented houses.'* 139 THE LABORER AND THE CAPITALIST. These statistics are quoted everywhere, by the sin- cerest of people as well as by the wily politician. They are made to tell fearfully against the present regime. The fact that the figures are not of partisan origin, but government statistics, gives them great convincing power. I realize their force all the more because I was once influenced by them. Now, suppose these statistics to be correct (and there can be no doubt of it), how much do they mean in the present case? Do I exaggerate when I say that, with the tremen- dous immigration to this country, the number of home- less and farmless has been increased at least two hundred per cent, beyond what it would have been without immi- gration ? Of what value, then, are statistics showing that a larger percentage of our people are living on rented farms and in tenement houses, etc., at the present time, than in 1850? No rational division of profits could have made it otherwise. Poor people have come here from other countries without shelter until they have packed to overflowing the tenement houses in the lower wards of nearly every city in the Union. They have come landless, and hired farms, more than a million. They have filled our factories and manned our railroads and ships, until American workmen and wage- earners are becoming the exception instead of the rule as forty-five years ago. Now, if reliable figures can be produced showing that THE LABORER AND THE CAPITALIST. native Americans — that is, those who wrought before the period of rapid immigration commenced — do not as gener- ally own property and as much of it as they did in 1850, then it will be time to inquire whether it is due to concen- tration of wealth or to some other cause. But this cannot be done; such figures do not exist. Therefore the statistics quoted by Mr. Wilson have not the slightest meaning in reference to the concentration of wealth. They indicate nothing, except the effect of immigration. And I have investigated the subject suffi- ciently to feel assured, that when the searchlight of public scrutiny is turned full upon the proposition under discussion, it will be found that if a reasonable allow- ance is made for the influx of poor foreigners, it wiU turn out that our people are more generally property owners than they were forty-five years ago, when the great Massachusetts Senator made his glorious boast. How can it be otherwise, when the average rate of wages paid to the individual laborer will purchase nearly, and in most cases a hundred per cent, more property than it would at that time? CHAPTER XV. THE BLAMED AND THE PITIED. I find the following in the New York Press (before quoted), June 28, 1894: 141 THE LABORER AND THE CAPITALIST. "Albany, June 27. — " The anarchy of capital is abo-v 3 and beyond the law, and it seems to be the tendency of coui*ts and legislatures to cater to the power of wealth and to the detriment of the wealth- maker, the workingman. The uncertainty of court decisions has always been to the detriment of the people. We do not want to see the laboring man galled to desperation, leaving the paths of law and taking justice in his own hands. But it will come to that. We don't want to have it come to that pass that men will have to go about protected by a bodyguard. We are for evolution rather than revolution, but if the first cannot come the second will. We are not conspirators. We are law-abiding citizens. We do not want to strike, but he who would not strike, when the bread and butter of his family are at stake, is not a man, but a coward." **Thus spoke Samuel Gompers, President of the American Federa- tion of Labor, to-night before the joint committees on prisons and industries of the Constitutional Convention. It was a speech that bordered on socialism and anarchism." The Evening Post, June 27, 1894, had the following : "As the world now stands, we hold it to be the solemn duty of all writers, preachers, professors, who are engaged in the work of reform, to refrain from denunciations of the existing society and social arrangements. Reform is possible without this, by simply acting on the lines of human nature. The common practice among Christian and other Socialists and Utopians of abusing nearly everybody who succeeds in life as an enemy of the human race, and the existing constitution of society as an engine of fraud and op- pression, has undoubtedly done much to produce the " militant Anarchist," and give a sort of moral justification to his attacks on life and property." The Morning Advertiser quoted the foregoing para- graph from the Post and then commented as follows : 142 THE LABORER AND THE CAPITALIST. "This is nothing less than an appeal to all varieties of snarling and hare-brained economic fault-finders, Mugwumps included, to become sane and rational." In the same article the Advertiser quoted President Cleveland as follows : ''But the communism of combined wealth and capital, the out- growth of overweening cupidity and selfisliness, which insidiously undermines the justice and integrity of free institutions, is not less dangerous than the communism of oppressed poverty and toil, which, exasperated by injustice and discontent, attacks with wild disorder the citadel of rule." The Advertiser followed this statement of President Cleveland's with these comments : "This is not the language of Herr Most, or Justus Schwab, or Waite of Colorado, or even of that piebald political freak, Tom Johnson of Ohio. It is an extract from a message sent to Con- gress in December, 1888, by Grover Cleveland, then, as now, President of the United States. Does not the I^ost feel inclined to smile at the feebleness of its proposed remedy ? Has any dem- agogue among us done more to widen the gulf between the rich and the poor than its friend in the White House?" "If we are hard upon an era of anarchy and bloodshed, Grover Cleveland cannot skidk out of his share of responsibility in bring- ing it about. Nor will the people permit him to do so." I do not think that, as a rule, people are inclined to blame where it is not deserved, but one's faith in the wis- dom of his own course often makes him a little hasty in his conclusions regarding the course of others. 143 THE LABORER AND THE CAPITALIST. Suppose one were to reply to the Advertiser, as they might, with quotations just as strong from prominent Re- publicans as it has quoted from Democratic sources. Quote, say, the celebrated remark of Garfield, substantially as follows: "The barons of the middle ages were not more powerful and tyrannical than the rich men and corporations of the United States at the present time." Or the statement of Judge David Davis of Illinois, so often quoted, that he looked forward with anxiety to the coming struggle between the people and overgrown monop- olies. President Lincoln declared that had it not been for labor capital would not have existed, " therefore labor de- served much the higher consideration." I have referred to these statements near the close of my essay for the purpose of bringing before the reader's mind again, and as vividly as possible, the important fact previously set forth, to wit: That the complaint against existing conditions was confined to neither party, nor creed, nor demagogue, my object being to show the magni- tude and seriousness of the question we have in hand, which is apparent from the character of many of those who have done and are now doing so much to set the people thinking upon the capital and labor question. The day is one of tumult and controversy, and the need of the hour is that capital and labor shall come together and each have a fair hearing at the judgment seat of the other. Both have grievances that can be settled only by arbitra- tion, and the arbitrating committees must always be those who are aggrieved. Outsiders cannot arbitrate for capital 144 THE LABORER AND THE CAPITALIST. and labor, for the all-sufficient reason that everybody is either a laborer or a capitalist (and ninety-five one-hun- dredths of our people are both) and every dispute in- volves a principle that interests the whole. This means that the community at large, the capitalist and the laborer, must study economics, each in his own mind, as they exist now and here. The one way out of the confusion and contradiction in which the world is now wandering- is for people to stop and think. No general and well-directed effort has been made to institute a sober discussion of the relations of capital and labor with a view to bringing the question home to every mind. What have I to do with this matter, and how far is my present opinion the result of my own disinterested inquiry, and how far is it the result of hearsay evidence, which may or may not have a scientific basis ? But, you say, we busy and comparatively uneducated people cannot solve the mighty social and political prob- lems that now confront the world. They puzzle even the scholar, the statesman, and the philosopher. It is true that scholars, statesmen, and philosophers differ as widely as the masses, and the leaders of labor are dis- puting among themselves, and so are the leaders of capital. What is left for you and for me, then, but to make diligent and careful research, and follow our own reason? If this course does not enable us to solve the whole problem, it will certainly lead to more light ; it will help us to settle upon some things as true or false which we are now in doubt about. 145 THE LABORER AND THE CAPITALIST. The great and good Lincoln thought that labor deserved more consideration than capital, and the world is with him. But suppose the distinguished martyr were upon the earth in these troublous times, and that he had authority to send you forth to pour oil upon the troubled waters, and he should tell you to go and counsel with capital and labor and use your best efforts to have them come together and effect an amicable settlement of their differences, but that you should always bear in mind that labor deserves much the higher consideration. Now, it occurs to you that in your journeyings you may be asked why it is that labor de- serves a higher consideration than capital, and you put the question to Mr. Lincoln : " Why does labor deserve a higher consideration than capital ? " He answers that the reason is fundamental. That is, labor is the father of capital. In other words, capital owes its existence to labor. Therefore, labor deserves the higher consideration. This may satisfy you for the moment, but if you take time to analyze ilie proposition, you will discover that if labor deserves the higlier consideration because it produced capital, then the father deserves a higher consideration than the son, the caterpillar than the butterfly, the cloud than the rain, since the latter could not have existed if the former had not first existed. By this time you will begin to conclude that priority of existence, or the fact of one being the producer, and the other the thing produced, has very Httle to do with the consideration that belongs to either. However, the beHef 146 THE LABORER AND THE CAPITALIST. that labor deserves a higher consideration than capital, is old, widespread, and deep-rooted, and nothing short of absolute proof to the contrary can change that belief. Very well, try the question in the light of your own experi- ence. You worked and earned fifty dollars ; therefore, your labor created fifty dollars of capital. You then paid the fifty dollars out for labor ; that is, you employed fifty dollars' worth of labor that would not have been employed had you kept your fifty dollars in pocket. Why, then, is it not as correct to say that capital creates labor, as it is to say that labor creates capital, since the labor would not have been employed without the use of the fifty dollars or its equiva- lent in some other kind of capital ? The principle here involved is illustrated in what is called the game of " teetering," such as most of us enjoyed in our boyhood. A board or plank is placed across the fence, and a boy gets upon either end. One presses his feet upon the ground, and sends himseK into the air ; then the other does the same, and the result is a pleasant motion, and an enjoyable season for both. But a dispute arises as to which deserves the most praise for all this. One boy says : " I deserve the most praise for the reason that I kicked the ground first and set the whole thing in motion." " How is that," says the other boy. " If you kicked the ground first at one movement, I kicked it first the next, and during the hour we teetered, I set the thing in motion as many times as you did, and, really, I do not see that either of us deserves any very great praise, since both worked for 147 THE LABORER AND THE CAPITALIST. our own happiness, but owing to a natural law, which we did not create, each was obliged to give the other a bound upward in order to get one for himself." This illustrates the relationship of capital and labor. One cannot teeter unless the other teeters at the same time, and not one whit more of consideration belongs to one than be- longs to the other. But, you say, the laborer is weak, the capitalist is strong, and to help the weak is our first duty. Very well, I am discussing capital and labor as economic principles ; and I would not knowingly say that which would tend to lessen public sympathy for the poor. I com- mend a statement by Abraham Hewitt as appropriate to the present time and condition. In the New York Herald, September 24, 1893, Mr. Hewitt is reported as follows : ''Now as to these very rich men, and as to this very poor class, this wretchedly poor stratum, is there not a duty, is there nothing indicated by such a picture as I have suggested of this fringe at the top of the social sphere — this fringe of social wealth and this stratum of poverty, of want, of utter helplessness at the bottom ? **Yes, it is an ethical question; it is a moral question; it is a question of conscience; it is a question of religion. These very rich men have duties. This poor and hopeless seething mass at the bottom have rights, and the rich man who is not busy thinking how he may mitigate the sufferings of that mass at the bottom and how he may lift it, is unworthy of possession of the fortune which has been put in his hands whether by accident or industry." This sentiment is just, and will find an answering chord 148 THE LABORER AND THE CAPITALIST. in the bosom of the thoughtful and humane. It is a noble appeal from one of New York's richest men, in behalf of the suffering poor. But it is worth our while to see to it that we make no mistake as to who the greatest sufferers are ; for if we err in this, we are liable to overlook important duties and to be betrayed into a narrowness of view that will greatly interfere with our usefulness. 0, well, you say, what is the use to talk about that ? Of course the greatest sufferers are those who work for insuf- ficient wages and those who are out of employment. I frankly admit that there are a great many sufferers among such as these, but are they as numerous as is gen- erally believed ? and are their sufferings more severe than those of any other class of our people ? The following, clipped from the Morning Press, Dec. 23^ 1893, is to the point: "Chicago, Dec. 22.— Only about 450 out of 2,000 "hungry" men, who have been eating free soup at the Lake Side Kitchen for the last week, accepted the invitation given by the Central Relief Association yesterday to work on the streets long enough each day to pay for their subsistence. All the others sneaked away as soon as their soup-bowls were '^empty. When they returned last evening without tickets from the foreman of the street gang they were invited to seek their living elsewhere." One looking over that crowd of the two thousand people eating their soup at only one dispensing station, would have said : What a vast number of hungry people there must be in all this great city. But when the test was applied, however, it turned out that more than three-fourths of these 149 THE LABORER AND THE CAPITALIST. people had other resources. At any rate, their hunger was not so intense, but that they refused to earn food by working on the streets. Who doubts but that the same test applied to New York and other cities would have revealed about the same state of facts. I learn through the Rev. J. W. Wilds, pastor of the Seventh Presbyterian Church, corner of Ridge and Broome streets in New York, where the population is very dense, and where there is about as much poverty as any- where in the city, that the number of the really destitute is much less than the popular estimate. Our informant is very active in charitable work and knows whereof he affirms. He spoke of the discouraging effect, upon charitably dis- posed people, of the numberless cases where investigation had shown that the help asked for was not needed. However, there is much suffering in such localities that ought not be allowed to exist. There are ignorance and filth there that should not be allowed to continue. It is not bred in our country ; it was imported. Not one in fifty of the destitute, or supposed destitute, upon whom the popular gaze is so fixed, were born in this country, and very rarely is one found who can speak English sufficiently well to be easily understood by one who has not lived among such people, or been in the habit of dealing with them. Nevertheless, those people are here, and when they need help it should be given none the less freely because they were not born in the United States. And I here take oc- casion to say that I respect neither the culture nor the hu- manity of people who do not feel the force of this truth. 150 THE LABORER AND THE CAPITALIST. I regard him as undeveloped, as not having grown to the stature o£ true manhood, whose sympathies canuot cross the threshokl of any home, or fly beyond any sea, at the call of human suffering. And I am glad to be able to say, Avithout fear of successful contradiction, tiiat a prouder record was never made by any class of people than our wealthy citizens have made, and are making, by their gen- erous conduct toward the poor foreigners now living in American cities. Free lectures, free night schools, free kindergartens, free dispensaries are being planted, and rapidly, too, in the poorer districts. Indeed, these insti- tutions are being estabhshed as fast as the ignorant populace can be induced to patronize them. Most of these are supported by the donations of the rich. In- deed, I heard Dr. Coit, the founder of the " Neighbor- hood Guilds" in New York, say in a public speech, that he had never asked in vain for means to carry on his work of educating and bettering the condition of the poor in the great metropolis, but that he had always found her wealthy citizens Avilling to donate generously whenever and wherever it appeared plain that substantial good would result. What I have said with reference to foreigners, and concerning the unprincipled, who apply for aid when they have other resources, has not been to belittle the cause of the worthy poor among them, but I have taken this course that I might the more surely turn the reader's attention to another class of sufferers who are rarely noticed in the popular discussions of the capital and labor 151 THE LABORER AND THE CAPITALIST. question. I refer to capitalists who employ labor, business men who have started in the world with no better opportunities than those I have just discussed, but who, through self-denial, economy and diUgence, have come to cut a figure in business circles, and then been reduced through losses and other misfortunes to poverty and humiliation. The following, from the Morning Press, January 14, 1894, is to the point : " In periods of great financial stringency the number of suicides always increases," said Dr. Tracy, the registrar of vital statistics of the Board of Health. " The details of the last quarter of 1893 have not been tabulated yet and will not be for several weeks, but I think they will show that self-murder has increased until a record has been made which was never equaled in New York be- fore. This increase of suicides comes from the better class of people almost entirely. That is, from among those who are supposed to be pretty well situated in life, such as business men prominent in large concerns. Here is what a subordinate in the Health De- partment said on that point: " You will find if you read the last month's newspaper accounts of suicides that the greater portion of this winter's suicides does not come from the ranks of the desperately poor. In hard times it is the proud, self-respecting man, who would scorn to fail if he were in business, or accept charity if he has been an employee, that suffers in secret till he can bear it no longer and then picks up his pistol and blows out his brains. There never has been so many of these eases as in the past few months." I can add nothing to this statement that will increase its convincing power. It demonstrates with the certitude of 163 THE LABORER AND THE CAPITALIST. mathematics that in hard times the keenest of suffering is not always where the pubhc looks oftenest and pities most. The moral I would inculcate is not that the employee be less cared for, but that it be not forgotten that the inter- ests of the employer and the employee are one, and that when we find the wage-earners in trouble it is often because the wage-payers are in sorrow. Let us be just to all, and take good care lest we cast blame where it does not belong. CHAPTER XVI. THE BLAMED AND THE PITIED (cONTINTJEd). The result of thoughtlessly and innocently casting blame where it does not belong, or, perhaps, I had better say, faiHng to include all the blameworthy, is most disastrous to the cause of good feeling and stable government. Very little is being written upon the social and economic problem that does not either directly or indirectly, or by inference, cast most of the blame upon the rich for what- ever is hard in the conditions of life. The Labor Leader, January 6, 1892, copied from Harper^ s Weekly the following : IN THE TENEMENTS. *' Roughly speaking, there are 10,000 tenement houses in New York City, and o£ these about 500 are very bad, and should be and must be pulled down. One of the troubles with tenement- 153 THE LABORER AND THE CAPITALIST. house property is, it is good property for tke landlord. It yields immense returns, and the landlord who is content to take 4 per cent, for his money instead of 12, and by so doing give a chance to his poorer brother to live as well as exist, while he is present with us, is still rare. Some readers of Harper's may be startled to know that even on poor streets east of the Bowery floor space is worth double what it is in such apartments as the " Dalhousie " overlooking the Park, and if, instead of measuring the floors, you took the cubic contents of the rooms in these quarters, and in such splendid flats as this to which I have referred, a cubic foot of space is worth in these hovels nearly three times what it is in those overlooking the Park. "How can the poor head of a family, an unskilled laborer, or, for that matter, even the poorly paid skilled laborer, whose wages do not average the year round more than eight to twelve dollars a week, how can he afford to pay for space enough in which to bring up his children in necessary decency ? "One thing seems certain, if the children of the city are to be saved from vice, their environment must be improved." This contribution to Harper'' 8 Weekly is from the pen of Dr. Rainsford, one of the deservedly popular preachers of New York, a fair minded and capable gentleman. I believe in publishing far and wide everything that is calculated to let all humanity know how each part is situated, and how the whole is affected by each part. But, in my judgment, this article by Dr. Rainsford, if not too strong against the landlord, fails to state the other side of the question ar^ fully as it ought. The first proposition, briefly stated, is this : Tenement houses yield immense return <^, and landlords ought to be 154 THE LABORER AND THE CAPITALIST. content to receive 4 per cent, on their investment instead of 12. The readers o£ Harper'' s Weekly, and the readers of the Labor Leader, will multiply this statement a thousand times, and it will intensify the impression already wide- spread, that landlords are receiving- about 12 per cent, net on money invested in tenement-house property ; while the actual truth is, when water rents, taxes, vacant rooms and repairs are taken into account, the profit accruing to the landlord does not reach an average of 6 per cent. Think a moment. How long would it require capital to cover the continent with tenement houses, could they real- ize a profit of 12 per cent, on their investment ? It is hardly necessary to repeat what has been before stated in substance, to wit, that the very avarice of capital will not permit investment in any one direction to yield a profit larger than ordinary for any great length of time. Would intelligent bankers, for example, be found loaning their money for from 2 to 6 per cent, as they are doing, if they could reahze 12 per cent, by investing in tenement-house property ? The gist of the second proposition in Dr. Rainsford's article is that the poorer people east of the Bowery are obliged to pay very much more per foot for room in those un- comfortable houses than is charged in the splendid flats overlookinsr the Park. This is true, but what of it ? Does it follow that the rich are to blame as will naturally be in- ferred from the writer's statement? Not at all; the smaller but very comfortable flats in the vicinity of the Park, and 155 THE LABORER AND THE CAPITALIST. there are many of tliem (three and four rooms), are let at a lower rate than those east of the Bowery. Why don't the Bowery people move up there ? Again, all around those tenement houses east of the Bowery, and indeed the first story of many if not most of them, is occupied for business purposes by men who cannot be counted poor ; some of them are rich. They, too, have to pay a higher price per square foot for room than those who occupy business houses near the Park. Therefore, rich and poor stand upon the same footing in this matter of higher rent east of the Bowery, and lower rent in the vicinity of the Park. A higher price is charged for room near the Bowery, be- cause the location is nearer the business center. But, mark you, all this talk about discriminating against the helpless poor east of the Bowery and through that part of the city is not without some reason. There is discrimination in those locahties, and sweatshops are there also. That is, places where people are forced to work for wages cruelly low and pay rents enormously high. Most of it comes in this way : Poor foreijxners who are accustomed to work on clothing, for example, and who cannot speak Enghsh, are met on their arrival in this country by better informed foreigners, and are engaged by them at wages far below the average rate usually paid for such work in the United States. These employers hire tenements and sub-let them to their more ignorant brothers at enormous prices, sometimes crowding a large family into a single room. The 15G THE LABORER AND THE CAPITALIST. newcomer cannot speak English, therefore he cannot go out among Americans to look for work, so there he stays and sweats. I heard Mr. Colin, a Socialist editor in New York, relate these facts in a public speech. Seth Low, the philanthropist and distinguished President of Columbia College, was present at the time and made some remarks, declaring his willingness to do all in his power to remedy the evil. Mr. Low is rich. I will state the next proposition in Dr. Rainsf ord's own language, as follows : "One thing seems certain ; if the children of the city are to be saved from vice, their environment must be improved." Every conscientious well-wisher of the human Idnd will agree with Dr. Rainsford that the surroundings of the poor tenants of New York, and, indeed, everywhere for that matter, ought to be improved. But why not state the fact that they are being improved, and why not let the world know who are most active and powerful in mak- ing the improvements ? Who but the rich furnished the means to carry out Felix Adler's plan for improving ten- ement houses ? The Constitution Club of New York was brought into existence by rich men ; the Thurbers and other millionaires were among its founders. This club has taken great pains to send physicians and others through the tenement houses of New York for the purpose of ascertaining the real con- dition of the inmates, etc. Other institutions, mainly un- der the control of the rich, have done the same. The facts have been laid before the representatives of the 157 THE LABORER AND THE CAPITALIST, people, and legislation asked for. The result is tliat the building of tenement houses not well lighted, not well ven- tilated, and not provided with improved modern sanitary arrangementSjis forbidden by statute law. However, the one error in Dr. Rainsford's article capa- ble of more mischief than all the rest is a very common one. It is entertained not more generally by the ignorant than by people who, like Dr. Rainsford, are exceptionally intelligent and well educated. The error to which I refer is stated in the following words : "One of the troubles with tenement-house property is it is good property for the landlord." This statement involves the popular error which is at the bottom of much of the present strife between capital and labor, to wit : that large profits can come to the world of capital without bringing corresponding benefits to the world of labor. If Dr. Rainsford had used the word bless- ing instead of trouble, that is^ if, instead of saying " the trouble is that tenement-house property is good prop- erty for landlords," he had said " the blessing is that tene- ment-house property is good property for landlords," he would have stated a grand economic principle. To illustrate : An association owning land in the neigh- borhood of 116th street. New York City, voluntarily built an elevator for the elevated railroad at that station. This land is situated in one of the finest portions of the great metropolis, near Morningside Park, Central Park, and River- side Park. The land association believed that an elevator at 116th 158 THE LABORER AND THE CAPITALIST. street would be an inducement for capitalists to build costly dwellings and reside there. But, owing to the fact that tenement-house property is profitable for the land- lord, capital has covered this land, and hundreds of acres of other land in that locality, with beautifully finished flats of all sizes, into which tens of thousands of the poor and those of moderate means have moved. In short, because tenement house property is good prop- erty for the landlord, the poor people are coming to rejoice in better homes and finer locations. I do not say that the wages received by the people referred to by Dr. Rainsford are as high as I wish they were ; neither do I feel that these people can afford to hire all the room they ought to have in which to rear their families ; but the encouraging fact ought to be stated in the same connection, that the wages mentioned by Dr. Rainsford are from 50 to 100 per cent, higher, and will purchase at least that much more of the necessaries of life, and procure that much more room for family purposes than they would fifty or even thirty years ago. This shows a progress which no other period of history of equal length can duplicate ; and all this has taken place while large fortunes have been accumulating. But, you will say, the fact remains that the situation of these people is still far from satisfactory. This is a truth which ought to be stated and discussed everywhere, and the blame made to rest where it belongs. The following figures, copied from a kindergarten text- book, which claims to have taken them from the Census 159 THE LABORER AND THE CAPITALIST. Report of 1880, are of great importance to the subject of poverty and destitution : "Cost of liquor, Grist-mill products, School property, Men's clothing, Woolen goods, Expense of public schools, Agricultural implements, Bakery products. Confectionery, Toys, .... $900,000,000 505,000,000 211,000,000 209,000,000 160,000,000 79,000,000 68,000,000 65,000,000 25,000,000 1,000,000" Dr. Strong, before quoted, has placed the cost of liquor consumed in the United States in 1890 at over a billion dollars. That the rich use much more of this com- modity than they really need, there can be no question; but if they were to drink all they could, and, I had almost said, use it for bathing purposes as freely as they now use water, they could not appropriate one-tenth part of the liquor that is consumed in the United States. It is safe to say that at least $800,000,000 is annually spent by the poor people for intoxicating drink, say $700,000,000 more than can possibly be good for them. This is more than double what they spend for clothing, or for schools, or for bread, and much more than they spend for rent. This money, saved and put at interest at 6 per cent, for twenty years, would purchase every farm m the United States. It would build houses sufficient to shelter all the people of the country, independent of the rich landlords 160 THE LABORER AND THE CAPITALIST. who are now accused of oppression. It would purchase all the large factories in the United States. In short, it would drive destitution from the land. Now, if the rich do not do as much for the poor as they ought, do the poor do as much for themselves as they might ? The Rev. Thomas Dixon, before quoted, complained that the rich were airing their poodle dogs and amusing them- selves on Fifth avenue, while the people were unemployed and hungry at the other end of the city. This was true. But why not mention another fact just as important, to wit: The poor were airing their dogs at the same time (they are quite as likely to keep dogs as the rich) and the theaters in the Bowery and on Third avenue were filled to overflowing with laboring people, while their brothers were unemployed and hungry all about them. Not long since I was standing on a street corner in Orange, N. J. Near me were gathered a number of unemployed men, and their look was downcast. A coach passed by fiUed with laboring men and women. The songs they were singing told that they were happy ; indeed , some of them were hilarious. They had been to the Orange Moun- tains for an outing. They needed it, God bless them ! But they heeded not those on the street corner, who lacked the money to defray the expense of such a trip. It is not an uncommon thing to see the rich on their way to spend their dollars for that which can do them only harm, instead of using it to help the needy ; but along the same thoroughfare travels the poor man to spend his dimes 161 THE LABORER AND THE CAPITALIST. in the same selfish manner, though his brother hunger for bread. Whoever will give this subject the attention it de- serves will discover that whatever blame there is for the hard conditions that environ human hfe, attaches as much to the poor as it does to the rich, to the laborer as much as to the capitahst. [Q'i THE LABORER AND THE CAPITALIST. PART II. CHAPTER I. CHILD-LABOR AND HOME-OWNERS. Since the foregoing' chapters were written my attention has been called to a particular portion of Dr. Strong's trea- tise (before quoted) as containing irrefragable statistical ar- guments against the theory promulgated in this work re- garding the condition and prospects of the masses under the existing economic regime. The proposition by Dr. Strong appears on page 147 of his work as follows : "In Massachusetts, where statistics of labor are the most elabo- rate published, the average workingman is unable to support the average workingman's family. In 1883 the average expenses of workingmen's families in that State were $754.42, while the earn- ings of workmen who were heads of families averaged $558. G8. This means that the average workingman had to call on his wife and children to assist in earning their support. We accordingly find that in the manufactures and mechanical industries of the State in 1883 there were engaged 28,714 children under sixteen years of age. Of the average workingman's family 32.44 per cent, of the support fell upon the children and mother. I am not aware that the condition of workingmen is at all exceptional in Massachusetts." My attention has also been called to this further propo- sition, same work, page 153 : ''We have already seen that the average workingman in Massa- 163 THE LABORER AND THE CAPITALIST. chusetts and Illinois is unable to support his family. At that rate how long will it take him to become the owner of a home? Of males engaged in the industries of Massachusetts in 1875, only one in one hundred owned a house. When a workingman is un- able to earn a home, or to lay by something for old age, when sickness or the closing of factories for a few weeks mean debt, is it strange that he becomes discontented ?" These propositions differ from those previously quoted from Dr. Strong and others holding substantially the same views on the capital and labor question only in that they refer specifically to the employment of women and children in factories as indicating a deplorable and discouraging condition of the masses in Massachusetts and throughout the country. Dr. Strong's inferences are drawn from figures which appear to show that 32.44 per cent, of the support of work- ingmen's families is furnished by members other than the male head, and that 28,000 children under sixteen years of age are employed in the manufactures and mechanical in- dustries of Massachusetts, and also that only one in one hundred of the males in her industries owns a house. Twenty-eight thousand are a great many children to be employed in the factories and mechanical industries of a single State at so tender an age. Take notice, however, on pages 180-181 of his work Dr. Strong says : "A census of Massachusetts, taken in 1885, showed that in 65 towns and cities of the State 61.1 per cent, of the population was foreign by birth or parentage. " 164 THE LABORER AND THE CAPITALIST. This is an important element in the problem of child- labor. Most of the manufacturing- is carried on in towns and cities where the foreign element predominates, and it is safe to assume that of the 28,000 children under 16 years of age employed in the factories and mechanical industries of Massachusetts in 1883, at least 90 per cent, were colored or of foreign birth or parentage; and the same is undoubtedly true in the factories throughout the United States. It is not to the discredit of these colored people and foreigners that they work in factories. Great numbers of the noble sons and daughters of New England had worked there before the present occupants came, and they worked more hours for less pay. By this it is not intended to deny the fact that many children are employed in factories and in the mechanical industries of Massachusetts and other States who ought to be in school. Parents are too often forgetful of their duty to children in this respect, and manufacturers are not spotless above other people. Then, too, many famiHes are in a measure dependent upon the efforts of their children for support, not only in the manu- facturing and mechanical industries, but in all industries. This is the case now ; it always has been the case ; it is not necessarily due to low wages however. The too large increase in the membership of families through the birth of children, often causes an abnormal increase in livino- expenses, which in many cases becomes more than the male head can meet, and then other members of the family are called upon for assistance. 1G5 THE LABORER AND THE CAPITALIST. Just how often this proves to be against the interest of the children so born, it is not easy to determine. Certain it is, however, that Franklin, Webster, Greeley, Lincoln, and indeed thousands whose names bloom in history and who have stamped their thought upon the age in which they lived, were early thrown upon the world, not only to support themselves, but were compelled to contribute to the support of parents and younger brothers and sisters. And it may be added, that scarcely a man of such experience has been known who did not in his mature years, rejoice that poverty had been the lot of his boyhood, and that his daily bread had been earned by hard work, born of necessity. Valuable data appear in an article in The Arena, June, 1894, by Alzina Parsons Stevens, Assistant Factory In- spector for Illinois, as follows : "February, 1894, the total number of children examined in the Inspector's office was 46. In answer to the question : " What is your father's occupation?" in 15 cases the reply set down was, "Out of work." To the question: "Is your father living or dead?" the answer in 6 cases was, "Dead." "Here were 21 families out of 46 without the natural bread win- ner. In only one instance was the child the only one in the fam- ily; but in 16 cases the child was the only member of the fam- ily at work. In 18 cases the number of members in the family > parent or parents included, was 6 or more than 6. The highest number was a family of 16 persons, for whom one 14-year-old girl is at present the only provider. The nativity of these children is divided as follows: Born in the United States, 11, all of for- eign parents; in Germany, 10; in Poland, 9; in Bohemia, 9; in lG(i THE LABORER AND THE CAPITALIST. Russia, 4 ; in Hungary, Austria, and Canada, 1 each. Twelve of the children spoke very broken English, or none at all. Of the entire 46, onlj^ 3 were found in really normal condition." Take notice : Every child examined by the factory in- spectors of Illinois in February, 1894, was a foreigner by birth or parentage, but few could speak good English, and some of them none at all. In 18 cases the number of members in the family was 6 or more, 16 being" the hio-h- est. Has it been shown, can it be shown, that the afore- said children would be better off without factory employ- ment than they are with it ? Would their physical health be better cared for? Would their moral training be bet- ter? In short, would the temptation to indulgences that weaken both body and mind be lessened by closing the fac- tories against them ? Y/liat would be their occupation and teaching at home and in the ctreets during the hours they are now employed in the fuctories? All these questions have to do with the problem of child-labor. In the same article in The Arena are found answers by teachers touching the question of the employment of chil- dren in factories. Of the effect one teacher says : ''Most pernicious. Most children at an early age are hardened. And yet the home influence is terrible to contemplate. They are unfortunately handicapped from birth ; the home pushes them down, the streets aid, and the mill adds its influence. It is a wonder if any are good.'^ These children are " handicapped from birth. The home pushes them down," says the teacher. Now, if the factory and street do not raise them, it does not follow that they 1G7 THE LABORER AND IHET CAPITALIST. would become more elevated without factory emplo3rment. The condition in which these children are found is very largely bred in foreign lands, and must bear more or less fruit when transplanted to other soil, be that soil ever so pure. It is wise and well to make all possible haste to eliminate the evils that attend the emplo3nnent of children in facto- ries, but let us be careful that we trace the wrong to the proper source and cast the blame where it belongs. American capital and avarice are popularly regarded as the wicked cause of most of the crooked spines, pallid coun- tenances and tattered garments found among children in our factories. What would be said of American capital should it refuse to employ these unfortunate children? "0 well," you say, "let capital pay wages to the male adults sufficient to enable them to maintain and educate their families without making wage slaves of their wives and children." This is the popular demand ; but as a matter of fact, how far can wages be made to fit the case in question ? Here are the indigent families, very large in most cases, as has been shown, some numbering as high as sixteen ; if the male head is to be paid wages sufficient to support and educate all these, what will be the size of the pay-roll of the average manufacturer, and what price will he be obliged to put upon his goods in order to meet such an enormous outlay ? And will the community be willing to bear the increased burden of higher prices, which such a proceeding would surely involve ? 1G8 THE LABORER AND THE CAPITALIST. This question reaches beyond the manufacturer, and the effect o£ higher wages circles right around to the laboring man in the greater cost of what he consumes. Again, if our economic system is to be adjusted with reference to the number of children parents may bring into the world, then the least educated of the colored people, and the most ignorant of the foreigners, and those who are incompetent to perform any but the commonest kinds of wprk, but who outstrip all others in the production of children, will require wages far above the more intelligent, educated, and skilled artisans and clerks, etc., whose families are much smaller. Again, if wages ever so high were to be paid the people in question, would they use the money so received in the interest of education, of cleanhness, and of morality? It is plain that in this matter of overworked, immoral and un- educated children in factories, etc., we have a question, not so much of capital and labor, as of moral and religious teaching, of ethics, and, above all, of immigration. Of the whole number of children employed in the factories of Massachusetts, 6 per cent, are white Americans, 16 per cent, are colored, and the balance, or 78 per cent., are foreign by birth or parentage. But after all, the whole number is insignificant when compared to the population of the State, and still more insignificant appears the number of factory-employed children when considered in relation to the population of the whole country. The census of 1890 places the whole number of children employed in the factories of the United States at 121,494, 169 THE LABORER AND THE CAPITALIST. which is less than one child to every 175 families. This does not sound so terrible for the young children of the country. Massachusetts being- so exclusively a manufactur- ing State, her case is an exceptional one ; but, then, her factory-employed children number only one to every thirteen of her families. Regarding the treatment these children are receiving, Mrs. Kelly, prominently connected with reformatory move- ments, and whom Mrs. Parsons quotes as good authority, and who, like Mrs. Parsons, is decidedly the working chil- dren's friend, writes inThe Arena, before quoted, as follows : "Of all the States in the nation, Massachusetts is best equipped with legislation against child-labor. This legislation, moreover, is rigidly enforced, so rigidly, in fact, that Chief Wad< , of the District Police, declares it as his conviction that the evil has been practically extirpated in this commonwealth. So confi- dent is he of this, and so anxious is he to enforce the law to the letter, that he would regard it as a favor to have any one report to him a single case in which the law is violated." This testimony renders it reasonably certain that most of the evils which have at some time attended the employment of children in the factories of Massachusetts are destroyed. What Massachusetts has done, other States can do. Indeed, other States are following rapidly in her footsteps. The laws of Illinois forbid children to work more than eight hours per day in her factories, and provide for a rigid in- spection of the same. In New Jersey, Rhode Island, Con- necticut, Pennsylvania, New York, and, in fact, in the manu- facturing districts throughout the country, legislation and THE LABORER AND THE CAPITALIST. other methods are being brought into play to extend pro- tection to factory-employed children, and, indeed, to all working- children. The census of 1890 places the wage-earning children in the United States in all occupations at 1,118,258. If we assume the number of children now earning- wasres in the United States to be 1,500,000, which is probably a high estimate, and if we further assume the average wages paid to children to equal the average wages paid to adults, it would still follow that less than 7 per cent, of the whole wage is received by the younger class. Therefore, they could not, if they would, furnish 32 per cent, of the support of families, as assumed by Dr. Strong. But it is well-known that the rate of wages paid to this younger class is not equal by a great deal to that which is paid to older employees. Probably not 1 per cent, of the wages paid in the United States is received by the class in question ; therefore, the share of support ren- dered to families by childi'en, although very great and very important in individual cases, appears, and, in fact is, almost infinitesimal when considered with reference to the vast simi which goes to support all the families in the United States. It would be sad indeed, if Dr. Strong were right in the assumption that the prudent and industrious workingmen of Massachusetts and throughout the United States were unable to earn a home, or to lay by something for old age; but does such a condition exist ? Has it ever existed, except in momentar}'^ crises, as it were, when the profits of capital had disappeared, or so dwindled, that it could not employ 171 THE LABORER AND THE CAPITALIST. labor without destroying itself? Has the condition de- scribed by Dr. Strong existed during the years from which he has quoted his figures ? I have before me a statement regarding Savings Banks in 1887, by Henry V. Poor, editor of " Poor's Manual for the Railroads of the United States." It goes a long way toward revealing the true situation of the classes in question in the State of Massachusetts and in other leading States as well. The foUowina: is Mr. Poor's statement: * Classification of accounts of the Massachusetts Savings Banks. NUMBER AMOUNT •Whole number. 944,778 Of $50 or less 344,640 $5,023,400.25 Exceeding ?59 and not more than $100 91,072 6,535,392 .08 ExceedingSlOOaudnot more than $200 113,671 15,989.821.29 Exceeding S200 and not more than $500 155,547 51,109,495.61 Exceeding $500 and less than §1,000 129,111 92,474,535.90 Of $1,000 or more 110,737 131,779,298.73 To the credit of women, both adult and mmor 458,376 146,402,3,34.53 To the credit of guardians 5,920 2,812.590.84 To the credit of religious and charitable associations 7,147 3,997,107.15 In trust 86,803 31,059,015.67 The number of Savings Banks in the State in 1887 was 173 ; the average percentage of earnings to total assets equaled 4.82 ; the average rate of interest paid to depositors equaled 4.06 ; the amount of dividend paid equaled $11,155,440 ; the whole amount of profits equaled $15,286,193. The num- ber of withdrav/als during the year, including dividends, 004,415. The amounts withdravm equaled $58,861,246: number of accounts opened, 150,274 ; number closed, 107,738. The expenses of man- agement of all the banks the pa.st year equaled $747,295. The following statement will show the amount of deposits of Savings Banks in the United States, with the number of their depositors and the average amount due to each, by States, in 1886 and 1887 : 1886 1887 STATES Number of Depositors Amount of Deposits Average to each Depositor Number of Depositors Amount of Deposits Average to each Depositor 109,398 121,216 49,453 848,787 116,381 256,097 1,208,072 91,681 143,645 $35,111,600 47,231,919 11,723,675 274,998,413 51,816,,390 92,481 ,425 4.57,0*, 250 25 3.35,780 37,530,370 $320.95 389 65 237.07 323.99 445.23 301.12 378.33 276.35 261.27 114,691 132,714 53,810 900,039 119,159 206,888 1,264,535 98,137 156,722 12,744 59,565 8,245 377 41,059 9,933 28,038 39,6.38 15 474 90,245 $37,215,071 50,822,762 15,587,050 291,197,900 53,284,821 97,424.820 482,486,730 27,482.135 42,219,099 2,771,392 19,020,962 834,524 11,307 15,065,659 2,312.013 14,061,258 9,969.019 3,402,950 70,077,899 $324.47 New Hampshire 382.94 289 67 Massachusetts Rhode Island Connecticut New York 321.40 447.18 365.04 381 55 New Jersey Pennsylvania 2S0.O4 209.39 217 46 Maryland Diat. of Columbia. . . 77.212 7,605 30,542,992 793,943 395.57 104.40 319.33 101.22 30 00 Ohio 34,553 12,823,374 371.12 366 93 232.75 501.51 25150 Minnesota ... California 14,361 80,489 3,054,528 60,435,919 254 48 750.86 219.91 776 52 Totals 3,158,9.50 1,141,530,578 361.36 3,418,013 1,235,247,371 361.30 The total amount of deposits in all the Savings Banks in the United States in 1865 equaled $242,619,382; in Massachusetts, $59,930,482; in New York, $115,47;i,506. The increase of de- posits in all the banks has equaled very nearly $1,000,000,000, the rate of increase eoualing 500 per cent." 172 THE LABORER AND THE CAPITALIST. According to Mr. Poor, the deposits of all the savings banks in New England in 1886, equaled in round niunbers $545,000,000. The loans and discounts of all the other New England banks equaled $325,000,000. In other words, the savings banks held about $220,000,000 more than all the rest of the banks of New England. Concerning the banks of New York, Mr. Poor says: *'The deposits in the savings banks of the State of New York in 1886, equaled $482,686,730. The loans and discounts of all the National banks in the State equaled, in 1886, only $354,841,070, the savings banks lending more ready money than the National banks by the sum of $125,445,660," It appears from this that the savings banks of New England are loaning more money than all the rest of the banks of New England, and in New York the savings banks are loanino- more than the National Banks. Where o does this money come from ? The answer is : It comes largely from the wage-earners and people of small means, usually called poor. In Massachusetts the number of depositors equal more than two and a half persons to erich family in the State. If we strike from the list of depositors all the guardians, religious associations, and trustees, and all others whose deposits amount to a thousand dollars and upward, there will stiU be left more than three depositors for every two families, or 420,000 in the aggregate. If all the rich famihes in the State of Massachusetts were counted, they would not equal one-tenth of the number of depositors in her savings banks. lu short, in no way can the "eports of 173 THE LABORER AND THE CAPITALIST. the savings banks be studied, that they will not demonstrate that a very large preponderance o£ the money they hold is the property of wage-earners and those who are usually denominated the common people. The average amount due depositors was $321.40 in 1887; in 1892 it was still larger, while the number of de- positors had increased 186,425. The value and bearing of these facts will perhaps be more clearly seen if we consider that the number of people opening accounts with the sav- insfs banks of Massachusetts between 1887 and 1892 was greater than the combined population of two of her prom- inent cities, to wit: Lowell and Worcester; and the addi- tional deposits of these people, which amounted to $78,- 320,486, would have purchased the real estate of Florida or Delaware, or nearl}^ one-half of that of Vermont at its assessed valuation in 1890. If we deduct from the moneys held by the savings banks of Massachusetts all that is deposited by guardians and by reliofious and charitable associations before mentioned, and all held in trust, and one-liaK of that owned by those whose deposits amount to a thousand dollars and upward, there will still be left an average of $400 to each family in the State. Another fact v/ith much meanino" in Massachusetts is that more than one-half of the individual depositors in her savings banks are females. The amount of their deposits is $146,402,334.53. Dr. Strong might have said of these that not one in one hundred owned a house, but the facts woidd have remained that the income from their bank de- posits would build 3,000 houses per annum at a cost of 174 THE LABORER AND THE CAPITALIST. $2,000 each. Or, if tliey saw fit to withdraw their deposits and invest them in that way, the result would be nearly 75,000 houses ; allowing five dwellers to each house, they would furnish homes for 365,000 people, v/hicli is more than the city of Boston contained in 1880, and is more than equal to one-half of the adult female popidation of Massachusetts at the present time. This does not look as if the fairer sex of the Bay State had been doomed to poverty, without power to own a home, or to lay by something for old age. And, of course, no argument is needed to prove that any relation which the female population may sustain to homes, or whatsoever prep- aration they are able to make for the necessities of future years, the same is true of the male population. One sex does not accumulate and the other fall behind. The lots of the two sexes are cast together, and their condition and prospects are necessarily the same; especially is this true where opportunities are equal ; and it cannot be said that the opportunities of males to accumulate wealth are not equal to those of females in any of the United States. It is plain, therefore, that, as a rule, the industrious, in- telligent, and frugal individuals of both sexes, and the fam- ilies of Massachusetts can, if they will, secure a home and independence for old age. And it is an eneoiu-aging fact that the conditions which prevail in Massachusetts are being duplicated more or less throughout the country, and especially in the manufacturing districts; see Tribune Almanac, 1894, page 154, as follows • 176 THE LABORER AND THE CAPITALIST. SAVINGS BANKS' DEPOSITS AND DEPOSITORS. State and Territories. Maine New Hampshire Vermont Massachusetts Rhode Island ("onnecticut New York New Jersey Pennsylvania Delav/are Maryland District of Columbia. West Virginia North Carolina South Carolina Georgia Florida Alabama Louisiana Texas , .. Arkansas Tennessee Ohio Indiana Illinois Michif^an Wisconsin . . . Iowa Minnesota Nebraska Colorado California New Mexico Utah Washington Total 1890-'91. 140, 166, 72, 1,083, ISl, '305, 1,477, 135, 236, 10, 135, lo: *5, 17, 2, 1 1 4, 11, 78, U, *61, 150, *30, 20, •136, *1, 4,533,211 3 ° o cs, $47,781,160 69,531,024 21,620,303 353,592,9.37 63,719,491 116,406,675 574,669,972 32,462,603 0;J,150,c93 3,602,469 38.916,597 703,2ti6 375,440 264,348 3,286,155 477,487 181,630 65,816 1,420,798 384,183 1,445,834 31,258,086 3,552,099 16,362,303 29,887,761 94,687 20,821,495 7,688,677 3,508,751 114,164,523 165,426 1,083,040 8;M,815 $1,623,079,749 $340.02 418.19 297.:« 336.24 483.99 380.58 388.86 258.55 263.00 215.05 288.20 68.73 37.94 45.31 187.84 188.50 ]r.8.49 37.18 S25A'^ 89.16 129.44 396.24 238.65 267.78 198.82 130.42 364.35 3.53.99 130.45 8.36.39 1.55.76 210.41 121.87 $358.04 1891-'92. 146.668 169.949 80,740 l,131,'.i03 136,648 317.925 1,516,389 131,739 248,471 17,318 142,135 1,303 8,428 6,247 21,397 4,509 170 1,698 5,5,57 1,950 258 * 1 6,392 84,779 1.5,41« *73,872 180,391 948 *71,687 35,123 *31,215 * 167,667 900 *13,59o 8,955 » o o a, $50,278,452 72,439,660 24,674,742 369,520,386 66,276,157 122,583,160 588,435,421 33,807,634 65,233,993 3,626,319 41,977,868 60,178 473,848 282,425 4,225,459 572,5^3 31,912 220,040 1,695,732 279,783 51,854 1,293,913 33,895,078 3,754,623 21,106,369 36,959,573 1.38,926 26,115,384 8,786,979. 2.893,276 127,313,088 149,449 2,427.9,".0 1,193,967 4,781,605 $1,712,769,026 S <" o > o ^ $312.80 426 &4 .305 60 33'). 67 485.01 385.57 .388,07 2,56.62 262.5'1 209.39 295.34 46.18 56.^2 45.21 197 48 125.30 187.73 129.59 .305.15 14;3.48 200.10 78.87 399.80 243.52 28.-).72 204.8.5 146.69 364.29 250.17 136.38 750.32 166.05 178.58 133.38 $358.20 •Partially estimated. Times have been hard for the j)ast few years. Capital and labor have both suffered, and are still suffering. The accumulations of other years are being drawn upon for the support of business, as well as families and individuals ; 176 THE LABORER AND THE CAPITALIST. but the condition of the savings banks for at least three decades contradicts, and when carefully studied will annihilate the popular theory concerning the power of the masses to secure a home and something for old age. If we select from the last quoted report from among the prominent manufacturing States, say Massachusetts, New York, Cali- fornia, Connecticut, Pennsylvania, Rhode Island, and Illinois, we find the increase in the amount of smaU savings in those States from 1887 to 1892 to have been $309,710,- 047, and the increase in the number of depositors 760,649. That is to say, the increase in small savings and in the number of depositors in those States in the last five years has been greater than the increase in the population by more than 100 per cent., and the increase in the amount of savinors has been even laro-er than in the number of depositors. The deposits in the savings banks in all tlie States in 1892 amounted to the stupendous sum of $1,712,769,026, and averaged $358.20 to each depositor. The total num- ber of depositors was 4,781,605. Here is a mathematical proposition for those who contend that our laboring people cannot own homes, to wit: If we say that one-third of the money deposited in sav- ings banks belongs to a class of people already well to do, and this is certainly an over-estimate, the fact will still re- main that 4 per cent, annual interest on the deposits belong- ing to the wage-earners and the poorer class (at the aver- age rate of increase for the last ten years) will build many more homes at a cost of two thousand dollars each than 177 THE LABORER AND THE CAPITALIST. ■would be required to shelter the total increase in the popu- lation of the United States, from year to year, the immi- grants included. Now, let us look at this matter of home-owning in an- other way. As has been stated in a previous chapter, ordinarily the male heads of families are the home-owners ; as a rule, only these are expected to own homes. The latest census re- ports show that there are more than eight milHon home- owners in the United States. Of course, these are very largely male heads of families. If we reckon five persons to each family, it follows that about forty million of our people are practically housed beyond the danger of being dispossessed for non-payment of rent. This leaves about twenty-tv, o million paying rent or living under conditions where the heads of famihes are paying rent. These heads of families number in the neighborhood of four and one- half million. It is probably sale to estimate that not more than five million families at the very outside are paying rent in the United States at the present time. This does not look as if our people were in a wofuily homeless condi- tion, since about two-thirds of the natural home-owners al- ready ovi^n homes. But what oun-ht to be said concernino;' the one-third of the heads of families not sheltered beneath their own roofs ? Is it owing to a wrong distribution of wealth that these people do not own the tenements they occupy ? If so, the reason is not apparent. On the other hand, the reasons why the pres- ent distribution of wealth is not responsible are very plain. 178 THE LABORER AND THE CAPITALIST. In the first place, as previously stated, more than one- half of our homeless population are colored people and foreigners, not many years removed from environments which were by no means well calculated to develop those faculties of the mind which lead to home-making and the accumulation of wealth. When these classes of people are counted out, so to speak, then of all the families in the United States which could reasonably be expected to have secured homes under any condition of prosperity or through any rational distribution of profits, there remain less than three miUion. Of these there are a large number living in rented houses, but who could, if they saw fit, purchase and pay for a house of their ov/n. A very large majority of those engaged in business in New York City and in the larger cities throughout the country do not own the tene- ments they occupy with their families. They prefer a flat tenement, with rooms all on one floor, and janitor service free, to li\nng in a house, with long flights of stairs for their famihes to climb and a great deal of extra help, w.iich is not only annoying, but expensive. A respectable city residence costs from fifteen to twenty-five thousand dollars, and most manufacturers and trading men find it more prof- itable to use that amount of money in business than to in- vest it in a home. But the class of people which has given rise to at least nine-tenths of modern tenement-house discussion, and which is (blamelessly perhaps) at the bottom of no small percent- age of the existing prejudice against accumulated wealth, is yet to be considered. I refer to a certain class of foreigners, 179 THE LABORER AND THE CAPITALIST. of -w-liom it is said that they are living in squalor and rags, with their apartments swarming mth vermin. It is proper to state that the class in question are not recognized as associates by the larger proportion o£ our foreign-born cit- izens. These people have crowded themselves and been crowded by a few of their better-informed foreign countrymen into our cities, where they have made filthy dens of tenements once clean. Landlords are not blameless. It is the moral duty of house-owners to see to it that their property is not let to those who have no regard for cleanHness. It is said that these filthy people do not receive wages sufficient to enable them to live in decency. It is true that many of them are being sweat and oppressed, more or less, not by Americans, as already shown, but by their own countrymen, bred within the same environments. There is no question but that, as a rule, the wages paid to this unfortunate class of foreigners are too low. Never- theless, in that part of New York City where most of these people reside, there is a saloon to every 191 of the popula- tion. That is to say, every 38 families of these poorly-paid laborers find money to support a liquor saloon, which proba- bly requires an average daily outlay of not less than fifteen dollars, or about 37 cents per day, for each family. If, in- stead of wasting this 37 cents per day for liquor, each of these families would save and place it at compound inter- est at 6 per cent., in 20 years it' would amount to about five thousand dollars. Or, reckon the interest at 4 per cent., which is about the usual rate paid by savings banks, and 180 THE LABORER AND THE CAPITALIST. the amount of money they are now expending for liquor would, in fifteen years, build them good homes in the sub- urbs of any American city, or it would purchase the tene- ments they now occupy. Can it be truly said, therefore, that the power to own a home in the United States does not, as a rule, extend even to our poorest paid laborer ? At all events, it is very plain that the fragment of Massachusetts statistics, quoted by Dr. Strong, however truthful as far as they go, are nevertheless insufficient in themselves. Indeed, they are misleading when detached from her larger data, bearing directly and indirectly upon the same subject. This being true of Massachusetts, of coiu-se, the figures have no such meaning for the whole country as Dr. Strong has assumed. In short, his position is rendered absolutely untenable by statistics covering the whole ground. The savings banks reports show incontestably that our wage-earners and people of small means are not only saving more and more as individuals, but that the number of savers is increasing out of all proportion to the increase in popula- tion. If these people think it more profitable to loan their money to industries through the savings banks than to in- vest it in homes, it is their pri^dlege to do so ; but the fact remains that the interest on the money they have saved in the last few years, is swelling their income at the rate of probably not less than $40,000,000 per annum. We cannot, therefore, look upon the condition of a cer- tam class of people, confined mainly to the lower wards of the larger cities, as indicating a general wrong division of 181 THE LABORER AND THE CAPITALIST. profits, and a growing dependency on the part o£ our gen- erally industrious, cleanly, intelligent, and frugal j^opulace. CHAPTER II. DOES LABOR RECEIVE A JUST SHARE ? In Tlie Arena (a magazine published in Boston), for June, 1894, appeared an article written by Walter Blackburn Harte entitled " The Back Bay : Boston's Throne of Wealth." The following are some of Mr. Harte's remarks concerning this avenue and its residents : "On either side of this magnificent avenue . . . are the mansions of those fortunate ones who graciously permit the millions to toil for them uj)on their own terms and conditions, and for such length of time as they see fit, and then dividing the proceeds, hand over to the workers enough to keep breath in them so long as they are needed." There are a great many people who indorse Mr. Harte's proposition. They reason that capitalists have an abun- dance, and can afford to wait, but that labor is poor, stand- ing on the very threshold of hunger, and cannot waitj that capitalists knowing this have fixed the rate of wages at a point where workers caii barely exist, " enough to keep breath in them," as Mr. Harte expresses it. But our ov/n every-day observation cannot fail to convince us, if we stop to think, that the rate of wages is not fixed with the slightest reference to the cost of existence. I know of 182 THE LABORER AND THE CAPITALIST. two salesmen, for example, one receives f 30 per week, and the other $50, and the cost of living is greater with the one receiving the smaller salary, since he has a wife while the other has not. Here and there is seen an employer selfishly taking advantage of the necessities of an individual, and getting service for less than the service is worth, and this has given a wrong coloring to the whole subject. But that these are isolated and exceptional cases, and do not materially effect the general rate of wages or the final division between capital and labor, is demonstrated by the fact that wages differ more than a thousand per cent, with different individuals, while the cost of bare existence is about the same for all men. The same fact is also demonstrated by the general opposite movement of the rate of wages and the cost of the necessaries of life. If the amount paid to workers was determined by the cost of the necessaries of life, it would certainly follow that, as the cost of these necessaries fell, so would wages fall ; but exactly the opposite has taken place, and that too, in a very marked degree, to wit : The rate of wages in most industries has doubled in the last fifty years, while the cost of the necessaries of life has decreased by at least 30 per cent. Thus rendering it mathe- matically certain that neither the cost of bare existence, nor the cost of any other kind of existence, for that matter, determines the rate of wages, or the laborer's share in the rewards of industry. The following was published by the New York Press, 183 THE LABORER AND THE CAPITALIST. November 6, 1894, as the language of the Journal of Com' merce the day before: * 'Reviewing, in the light of facts, the positions of capital and labor respectively, for the last half generation, it is thus evident that, relatively, labor has had much the best of it in the co-part- nership of the two interests." This is the first time I have seen it even hinted in print that in the general division of the results of industry capital had failed to get more than a rightful share. Yet, it not infrequently happens that capital, as a Avhole, overpays labor, very much. And here is involved one of the most important principles of industrial science ; yet, it seems not to have attracted the attention of our economists. It will be remembered that in a preceding chapter of this work it is stated that a great many failures could be pre- vented by promptly cutting Avages when prices begin to fall and profits dwindle ; but that in many cases of shrinking prices and dwindling profits, employers continued to j)ay the same rate of wages, until they were overtaken by bank- ruptcy. This is a fact plain to all who will take the trouble to look into the matter ; and it is one of the ways in which labor receives more than its rig-litf ul share. In the failures that have taken place in the United States within the last thirty years, the liabilities, that is, the un- paid debts at the time of failure, have amounted to about five billion dollars ; a sum larger than the assessed value of Maine, New Hampshire, Vermont, Connecticut, Rhode Island, and Massachusetts. According to the best authority (Bradstreet) about 11 184 THE LABORER AND THE CAPITALIST. per cent, of these defaulters went through the faiUng proc- ess to make money. A small portion of the rest have finally squared their accounts with their creditors. Many of these, however, have done so through a loss to themselves of their investment and all the profits of their business years. But, in all cases, or so nearly all that the exceptions are not worth considering, the help employed by the faiHng parties received their pay. So that no small percentage of the liabilities reported represents money paid by capital to labor, over and above what capital could safely spare. Now if we except the failures where, strictly speaking, the failing concerns did not employ labor to any very great ex- tent, then no reckoning that can pretend any approach to fairness will place the aggregate unpaid debts in question be* low three billion dollars ; a sum larger than the assessed valua- tion of all New England, omitting Massachusetts. What has become of the money representing this huge pile of debt ? The creditors have not received it. The failing capitalists have not received it. Labor is the only party concerned that has received full pay. Had labor understood the situation and allowed capital a safe profit, business would have continued active where stagnation has many times reigned. In short, it has often occurred that through labor getting too large a share of the results of industry, employers have lost the capital they once had, and their employees lost the employment they might have had. Concerning a particularly fine house on Commonwealth 185 THE LABORER AND THE CAPITALIST. Avenue, and the poor people living not far away, Mr. Harte writes as follows : "This great pile of stones is devoted to the sheltering of two not extraordinarily indispensable persons. Within thirty minutes' walk of this mansion are men and women huddled together, some- times as many as seven or ten people in a cellar, without heat, without food, with but a bundle of rags to serve all as bed. . " The aggregate cost of the mere luxuries of the table consumed in this one street (meaning Commonwealth Avenue), would be sufficient to properly house the poor, stifling, and degraded in the filthy tenements of Boston. . . . " Referring to the churches on Commonwealth Avenue and around about, and the remedy for the evils complained of, Mr. Harte submits these propositions : "These churches, as much as the mansions which surround them, are built with blood-money, at the cost of blighted human lives and human souls. "The remedy does not lie in any appeal to humanity. That never served any cause yet. It lies in breaking the bonds of slavery through the ballot." This statement regarding the buildings and residents of Commonwealth Avenue, however well intended, is, never- theless, calculated to give the laborer an incorrect impression of his interest in the matter. From Mr. Harte's representa- tion, the laborer might infer that the costly structures of Com- monwealth Avenue represent labor unrewarded, or at least but poorly rewarded. While as a matter of fact it cannot be shown that the labor represented in the buildings on this avenue, or on any other avenue for that matter, has not been 186 THE LABORER AND THE CAPITALIST. fairly rewarded. In fact nothing can be more clearly dem- onstrated than that labor has, on the whole, received a fair share of a common industrial elTort, whether it be represented in buildings or what not, and the workman may look upon the structures that rise on every side as labor paid for, and he may think of the money he received, not as tied up in the building, so to speak, but as still passing from hand to hand, paying labor for building other structures and performing such other services as the necessities of our civihzation de- mand. Yea, more ! No inconsiderable portion of the build- ings we behold are mortgaged by their owners for the very money that is now doing the business of the country, and keeping labor employed. So that instead of the workman looking upon the costly structures of our cities as repre- senting unpaid labor, he should regard them, not only as labor paid for, but as a guaranty for his continued employ- ment. Since the foregoing statements by Mr. Harte came to hand another has been brought to notice, which may be profitably considered in connection therewith. It appears in the National Watchman, November 2, 1894, as follows : "The strnoftrle of the masses for a fair share in the values created by the labor means much more than a mere increase of a money return. It means a great social advancement ; it means the rising of the workers to a higher social plane. It means higher educa- tion, greater refinement, improved social conditions, general mental development. It means the starting of the people of the nation upon a new stage in the march of national progress. It means the elevation of the race. It means that after the industry of the 187 THE LABORER AND THE CAPITALIST. nations has provided the viands and the luxuries for the feast of civilization, all shall sit down at the board, groaning with the creations of their skill and labor, and enjoy the repast; and that the workers shall not creep off like dogs to their kennels, while the feast they have prepared is enjoyed by the drones of society." It is hardly necessary to state that these quotations con- tain the gist of popular belief concerning present condi- tions, as well as the expectations of a great many people regarding what is to be in the good time coming. That is, the possessions of the rich are wrung from the poor, blight- ing their souls and ruining their earthly prospects; and when the bonds of wage slavery shall have been broken through the ballot, as they express it, and a system of gov- ernment inaugurated under which a few will not get rich, nor any remain in poverty, the tables of all are to groan under the weight of choice viands ; the costly garments of the masses will glitter in the sunlight, and the toiling mill- ions bound swiftly up the now slow and difficult ladder to broad culture, scientific attainment, and freedom from anx- iety concerning the material necessities for coming years. We have tens of thousands of good people who are highly cultivated and well provided for, so far as their physical necessities are concerned, yet they feel the privations of the poor more keenly than the poor themselves. They would banish poverty from the earth and place the human race where no child could be born doomed to drudgery, nor the fear of dependence and destitution haunt the dreams of honorable old age, as it sometimes does under the present regime. 188 THE LABORER AND THE CAPITALIST. A lofty purpose this, so far as motive is concerned; but is it possible of accomplishment? Can drudgery, for example, be abolished? With all our progress in invention in every department of industry, has drudgery been really and absolutely lessened? There has probably been as much improvement in the culinary department as in any other. The closed fire has taken the place of the torturing blaze on the hearth, over which the housewife formerly bent, and the trim iron range with appliances to regulate the heat with great nicety has taken the place of the awk- ward hole in the huge brick chimney of olden time. Yet, is cooking any the less a drudgery? That is, do the damsels of 1894 engage in kitchen work with better relish than did the damsels of 1844 ? The farmer once cut his grain with a sickle, and when he had reaped one acre he had performed a good day's work. Now his horses reap, while he rides upon a spring seat, and ten acres is a day's work. But, do the young- men of to-day take to the cultivation of the soil more readily than did the young men of fifty years ago? Has the sewing-machine made it less a drudgery to make a gar- ment for either male or female? With our modern im- provements we can produce a larger quantity of anything in a given time, but a larger quantity is demanded. Our wants have kept even pace with the multiplied means of production, and the increasing purchasing power of our income, so that the drudgery of supplying the necessities (or what we call necessities) of life, is as great as ever — yea, greater ; and our discontent is greater also. The ser- 189 THE LABORER AND THE CAPITALIST. vant girl of to-day makes a shorter week by at least thirty hours than did the servant girl of fifty years ago, and not infrequently she owns jewelry that cost more money than our grandmothers could afford to spend for a wedding dress; yet she feels that she is a poorly paid drudge, and prays to be delivered from such bondage. The same state of facts exists with a majority of the male employees of our time. A skilled workman can pay for a home in fifteen years such as only the rich could own half a century ago, and yet he chafes as never before over his low wages and houseless condition. Indeed, with higher wages and shorter hours, and a thousand more privileges and advantages, the laborer is becoming more and more dis- contented. For this he is complained against as lacking in appreciation. But, are the rest of us any more philosophic or consistent than the wage-earner ? Do we appreciate the progress of the age, and the privi- leges and advantages we enjoy that once appeared beyond our reach ? Our houses are far superior in size, in elegance, in convenience, and sanitary arrangement to those we once occupied, yet they do not suit us, the principal reason being that somebody else has one still superior to ours. We have accumulated a fair amount of wealth, yet somebody else has accumulated more. We can afford to wear richer clothing than formerly, but some of our neighbors can outdo us. Machinery has made it possible to accomphsh vastly more work, but it has not made it easier for either the rich or the poor to satisfy their wants, and we all drudge — or think we do — if not in one way, we do in another. 190 THE LABORER AND THE CAPITALIST. Rich women, for example, do not drudge in the same way as poor women, but in a manner quite as irksome to them. The late wealthy Cortlandt Palmer said substan- tially in a public speech that the labor performed by the rich on account of coachmen, house-servants, butlers, etc., and in keeping thoroughly informed regarding the rules of etiquette and changes in methods of cooking, etc., etc., was to them drudgery hard to endure, and in many cases very injurious to health. It cannot be doubted that the task of performing the duties and going through the almost end- less ceremonies demanded by what is called high life, tries the nerves, exhausts the energies, and deprives those women of more real happiness than do the tasks ordinarily imposed upon any other class of females, excepting a few of the really destitute. We are not content with what is really best calculated to promote health and comfort from a truly dignified and thoroughly practical standpoint. We want as much and as costly as anybody else has. We are led by whims. We do not cidtivate individuality, and most people act as though they had no respect for it. The poor ape the rich, and the rich ape the richer. While labor has brouofht far or-reater rewards within the last thirty years than ever before, it was never so shunned as it has been during that same period ; and not one whit more is this true of the rich than of the poor and the com- paratively poor. Too generally are we imbibing loore notions of nobility and real worth. While labor now, does as it ever has and ever must, lie at the foundation of all 191 THE LABORER AND THE CAPITALIST. true and lasting success, and give birth to every substantial achievement, it is rarely honored as it should be. Nothing can so develop the youth of either sex in the direction o£ real, wholesome beauty and sturdy vigor, physically and mentally, as plenty of reasonably hard vt^ork. And especi- ally is this true when such work is necessary to the maintenance of the individual, and the continuance of the same is made to depend upon skillful and faithful perform- ance. Yet very few of those Vv^hose children have been thus developed would be found willing to place them before the world, at any age, as brown and sinewy examples of what hard, necessary work can do for the human body and mind. They would conceal it, rather. A milhon mothers toil through the long day and far into the night that the hands of their daughters may not lose their whiteness, nor carry the marks of needle and kitchen into a kind of ball- room they had better never entered, and among a class of gentry who have not been taught the sublime lesson that in labor there is strength, dignity and virtue, and that idleness is the parent of mental and physical weakness and the forerunner of moral decadence. So long as necessary work is regarded as a task to be shunned, or a drudgery to be ashamed of, or until the fundamental and God-ordained truth is admitted and acted upon that it is as necessary, and therefore as hon- orable, to lay the foundation of the arch as it is to adjust the keystone, to dig the cellar as to build the superstructure, and until our struggle to gather and hold property is governed more by our real necessities and less 192 THE LABORER AND THE CAPITALIST. by a desire to satisfy a vitiated taste and to keep step with frivolous and unreasoning fasliion, we may rest assured that unwelcome toil will be our lot, and a f eeHng of poverty our constant companion. Very few are so rich that they do not fear that want may some time steal or rush in upon them; and a still smaller number are so circumstanced in life that at times they do not feel something akin to poverty, especially when they measure their own fortunes with the larger possessions of others. In short, when all the facts and forces which have and do now contribute to the disturbed condition of society, and distrust of existing economic methods are duly considered, only one conclusion is logical, to wit, the harmonious on- ward march of the race, the rich and the poor, the few and the many, cannot begin except through a changed way of viewing things, a wider sweep of vision over fields where lie the duties and responsibilities of life; a deeper searching for the springs of human action, not to say a dif- ferent rating of good and evil, of high and low, of what constitutes good and bad society, etc. In other words, without a change in our mental and physical habits, eco- nomic changes can bring but very little lasting good ; as, for example, if, with the marvelous increase in production and in the purchasing power of wages and incomes, discontent is becoming more and more intense, it stands to reason that still higher wages and larger incomes cannot, in and of themselves, bring the peaceful rest and satisfaction we so much desire. 193 THE LABORER AND THE CAPITALIST. While the motives of such as would revolutionize our economic system, so as to banish poverty and equalize con- ditions, merit respect because of their sincerity, yet, could these people bring about the change they so much desire, it would render impossible the very blessings they are pray- ing for, as well as a great many we are now receiving. It is the fiat of nature's God that variety shall exist everywhere, and that all happiness and all progress shall be the learning of differences, while all knowledge can be nothing more nor less than differences learned. Again, it is a principle of nature, written on every page of human history and declared in every forward step of the race, that the most perfect understanding and appreciation of differences must come through experience and close contact with the things to be compared, studied, or in any way dealt with. As, for ex- ample, one who had never felt the fire uncomfortably near, could not fully appreciate the gratitude of one suddenly relieved from the terrible smarting of a burn. The poor shepherd boy experiences great joy at the sight of shoes that are to protect his torn feet from the fall stubble and frost and the winter's snow. But when spring has thrown her soft, warm carpet over the earth, and the more direct rays of the sun are beginning to be felt, these same shoes become burdensome, and the encumbered lad flings them away as gladly as he put them on a few months before ; but in both changes he has experienced a pleasure comparatively unknown to those whose feet never wandered unprotected over autumn fields, nor, shoeless, toughened on the naked ground. 194 THE LABORER AND THE CAPITALIST. Variety and change is largely the solace o£ life, and often renders pleasant that which would otherwise be counted burdensome. One reared in a level country loves to climb mountains. Upward, still upward, he joyously struggles, as each succeeding step reveals more and more of the vastness and beauty of the world below. His pleasure is in passing from one height to another, and he rests not satisfied while his strength lasts and a single peak remains unexj)lored. Level mountains ; soften climates ; place an abundance where all can have it by the mere taking ; remove all anxiety concerning the necessities of old age ; in short, banish competition and so change conditions that the now thrifty, energetic, aspiring, knowledge-loving American will have no more occasion to plan and hoard for the future than does the South Sea Islander, and he will very soon begin a backward and downward march to the level of that ig- norant and slothful son of the Cannibal Isles. By this it is not intended to carry the idea that con- ditions are never too hard, but the all-important fact must not be overlooked that the two great forces which unite to make us progressive beings are desire and necessity; one beckoning, the other forcing, us along the pathway of improvement and up the hill of knowledge to loftier and broader views of life and creative energy. How far we can go in the direction of destroying competition and re- moving impediments to an easy, comfortable living, without at the same time weakening these forces, is a very serious question. 196 THE LABORER AND THE CAPITALIST. And as to drudgery, it cannot be abolished unless we re- fuse to recognize necessary work as drudgery. To one who does not comprehend the divinity and nobility of labor, four hours per day is as irksome and distasteful as eight, provided he has never worked the eight, but is abso- lutely obliged to work the four. A certain amount of labor will always be indispensable to health, strength, cleanhness, sustenance, etc., and if we count it drudgery, the more energetic and aspiring one is, the more will he drudge, because the better care he takes of himself and the more he tries to accomplish the more labor he must perform, either physically or mentally, or both. But let us pause for reflection. This moralizing and philosophizing is well, yea, it is indispensable to a thorough and rational understanding of the position of the laborer and the capitalist. The masses, and, indeed, all classes, will sooner or later study the subject from a moral, phil- osophic and, if you please, a scientific standpoint. But now a theory is prevalent which greatly hinders unbiased and searching reasoning. This theory, if allowed to stand, means great and sudden social and political revolutions and wild attempts to accomplish the impossible. It is not an uncommon remark that two hours' work per day, or four at the most, with the results divided according to merit, which means according to the amount of labor performed, would enable the whole people to live luxur- iously. This is substantially the view taken by Mr. Harte and the JVational Watchman, quoted at the beginning of this chapter. 196 THE LABORER AND THE CAPITALIST. Mr. Harte thinks that the cost of the mere table luxuries of Commonwealth Avenue alone would comfortably house and feed those who live in the bad tenements of Boston. He does not attempt to show, he appears not to think it worth his while to consider as a part of the capital and labor problem, how large a percentage of the degraded and filthy people he describes might have been comfortably and even luxuriously housed and fed had they practiced the same industry, economy, temperance, and cleanliness that in a majority of cases brought wealth and luxury to the dwell- ers on Commonwealth Avenue. It is safe to assume that many a man now living in a fine house in Boston's Back Bay laid the foundation for his present fortune by the sav- ing of a smaller daily sum than many of those now de- graded and filthy famihes have been accustomed to spend, especially in good times, for liquor and tobacco. If Mr. Harte believes that the rich of Commonwealth Avenue can and ought to make the needy poor of Boston comfortable by donating the mere cost of their table lux- uries, he certainly ought to remember that the money spent for liquor by the poor of Boston amounts to not only more than do the table luxuries of Commonwealth Avenue, but more than the cost of all the luxuries of the whole city. Why not rail at these people for indulging so unreason- ably and wastef uUy in dangerous luxury, while some of their neighbors are sleeping on beds of damp rags in unheated tenements ? But, passing this by for the moment, what would Mr. Harte do with these destitute and, according to his account, 197 THE LABORER AND THE CAPITALIST. filthy people? He certainly would not be so unwise as to give them a large amount of money. The most he could think of doing would be to relieve the necessity of the moment, and then agitate and consider, and induce others to consider with reference to the next step to be taken. This is precisely what is being done, and it is safe to say that nine-tenths of the reform in that direction is resulting from the efforts of rich and well-to-do people. Felix Adler and his rich co-workers built beautifully arranged and well li^-hted tenement houses in New York and filled them mth the kind of people in question, but they would not be cleanly and make the most of their opportunities; in fact, in almost every particular they have disappointed the hopes of their would-be benefactors. Not distant from the aforesaid tenement houses is a free kindergarten, supported by the rich. At one time the teacher was beginning to instil temperance ideas into the minds of the scholars. Very soon parents began to find fault ; some even visited the school and informed the teacher that she must desist, or the children would not be allowed to attend. The teacher did desist. Of course there is no reasonable excuse for the undevel- oped and avaricious capitalist who allows his j)roperty to be used as it often is in the poorer districts of our cities, simply because it is bringing him dollars. But I repeat substan- tially what I have said in a previous chapter, to wit : The question, " What is to be done with the filthy occupants of filthy tenements?" is a thousand times more a question of morals, of education, of temperance, and of immigration 198 THE LABORER AND THE CAPITALIST. than of wages, altliougli many of tliem are paid too small wages. The popular demand is that there shall be such a division of the results of industry, that the great mass of the world's people shall perform much less work than has been their custom, and at the same time have all the luxuries of life. If such a result is possible of accompHsh- ment, the demand is reasonable and just. That is, if it be true that enough is produced for all to fare sumptuously, and that the same would be true, even with much less work than is now being performed, it is but just and reasonable that the masses should have their full share of the benefits. But can it be accomphshed? Let us see what light reliable statistics can throw upon this subject. Of course calculations cannot be made with perfect ac- curacy in a case like this, but an approximation can be reached that will be sufficient for all practical purposes. The road I propose to travel to the proposition, in its final- ity, is not very direct, but it will be found to reach the ob- jective point at last. Let us first ascertain as nearly as possible, what share of the results of industry capital actually receives. This cannot be determined with perfect exactitude ; nevertheless, the average rate of interest and dividends show very nearly what percentage of the product of in- dustry goes to capital. The average rate of interest and dividends paid during the last year has not been far from 6 per cent, on invested capital. Thus capital has received about 6 per cent, and labor about 94 per cent, of the joint earnings of capital and 199 THE LABORER AND THE CAPITALIST. labor for the year 1894. This calculation will appear very wild at first glance to those who have so long held the opin- ion that capital gets an immensely preponderating share of the product of a common industrial effort. Yet, how absurd it is to insist that capital gets a larger percentage of the results of industry than the average rate of interest and dividends. Indeed, capital is constantly in the market, seeking an opportunity to engage with labor in any prom- ising business, and receive for its share 6 per cent, on the sum invested, and often only 4 per cent, and sometimes as low as three per cent, will secure the investment and co-operation of capital in commercial and industrial enterprises. In short, as a rule, capital only asks and only expects 6 per cent, for its share. Why should it be claimed that it gets more? But, for the sake of the argument, let us assume that invested capital does get more than 6 per cent.; or, suppose that the income of capital rises to 50 per cent, per annum. Who wiU be benefited ? You say, " Capital will be benefited." Very well, let us assume for the moment that the bene- fit would accrue to the capitalists only. The next logical question then is : Who are the capitahsts ? Ah, here is the rub. This question means much, yea, it means everything to the capital and labor controversy. Where shall we draw the line and say that all above are capitalists and all below are not, since almost every adult person has capital; the difference being that some have more than others? But, you say, when we speak of capitalists, we mean very rich 200 THE LABORER AND THE CAPITALIST. people, millionaires, for example. Very good, but it would be inconsisient to claim that millionaires would be bene- fited by an increase in the income of capital, unless it be admitted that all other capitalists would be correspondingly benefited ; for there is no law, statutory or economic, under which millionaires can receive a benefit from the investment of capital that the less wealthy capitahsts are not certain to share. It is very illogical to complain that millionaires have become more plentiful of late, and at the same time charge that the opportunity to accumulate wealth has been growing less ; for how do more men attain millions, if the road to millions is not easier ? How can a larger and larger number gain the mountain top, year after year, except it be that more and more are making headway toward that point ? In other words, it is impossible that there be a greater number of the very rich, unless there be a greater number of the comparatively rich, or to state the same fact in still another way the increase of millionaires impHes that there are more men worth nine hundred thousand and so on down the line. This is a very plain truth if we stop to consider that when a million dollars yields a profit, great or small, each dollar produces one-millionth part of it. In other words, the total gain is the gain of each and every dollar gathered into one sum. And is there any good reason why a dollar invested by a small capitaHst should not jdeld as large a profit as one invested by a larger capitalist? Of course the popular theory is that the richer capitahsts do business on so large a scale and sell so cheap that small 201 THE LABORER AND THE CAPITALIST. capitalists cannot compete with them. I have discussed this proposition in a preceding chapter, but it is so little understood, and yet so important, that some further illus- trations may be necessary. It is not difficult to see that if it be true that the larger business concerns undersell the smaller the masses are ben- efited by it, because they get their goods cheaper, which must leave a larger opportunity for saving. But, you say, this crushes the small trader. Suppose it does ? We want to benefit the many working people rather than the few traders. What right has the small trader to ask that the people pay a higher price for goods, or that we be compelled to run all over town among a hun- dred small establishments to get, perhaps, not more than a dozen articles, when the larger concern places them all before us under one roof at lower rates ? But all this does not satisfy the masses that rich people do not rob them of their earnings, neither does it convince the small trader that the larj^e a^'g'resi'ations of wealth are not against his interest, and the whole blame is laid at the door of the rich. But, as a question of fact, how much do the rich have to do with it ? In other words, if large ag- p^resfations of wealth have rendered it harder for the orio^inal proportion of small traders to do business single handed, is it really the rich that are causing it ? Are not smaller in- vestors the very persons most powerful in bringing about the condition complained of ? As, for example, suppose a very small dealer cannot compete successfully with that old and powerful concern in Boston known under the firm 202 THE LABORER AND THE CAPITALIST. name of Field, Bulerant & Field. Who is it that stands most in the way? The small dealer says it is the rich, and he looks upon Field, Bulevant & Field as his especial enemies, crushing him with their wealth. I cannot speak authoritatively regarding* the wealth of either Field, Bulevant, or Field. It is not necessary that I should. The important fact is that the concern hearing their names is owned by about fifty individuals. This renders it abso- lutely certain that whatever crushing is being done under the firm name of Field, Bulevant & Field is the work not entirely of three rich men, but of fifty persons, many of whom are necessarily small investors. In short, it is highly probable that the large business in question is being carried on by individuals, most of whom have less money invested than have a majority of the small outside traders who com- plain that they are being crushed by the rich. All large business houses, however, have not as many owners as the one just discussed, but it is John Doe & Co., Samuel Jones & Co., and corporations everywhere, and the investors therein are legion. Indeed, the number of in- vestors in the bvisiness of the country, and especially in the large concerns, is so great, and the invested capital so largely in the hands of the many, that the very rich are controlling but a very small percentage of the business of the country. Nevertheless, this view of the case is so de- cidedly contrary to the old and popular one that nothing short of a mathematical demonstration wiU be generally accepted as proof. Such evidence will be found in the following chapter. 203 THE LABORER AND THE CAPITALIST. CHAPTER III. MILLIONAIRES AKD THE PEOPLE. A document circulated in New York City by a labor can- didate for Congress in 1893 contained the following : "Two hundred and forty thousand people in New York City alone, at this very hour, famishing for bread: 165,000 persons evicted from their homes in this city in a single year, five times more than were ever rack-rented in Ireland in a similar period. "Seventy thousand miles of railroads passing into the receivers' hands in less than two months. "Over 125 banks suspend in six months. "Twenty-six thousand persons own over half the wealth of the United States. *' Fifty men own and control every avenue of possible wealth." In 1892 the New York Tribune instituted a census of the country for the purpose of ascertaining the number of millionaires. The result was the discovery of 4,047 per- sons reputed to be worth a million dollars or more. The following is copied from page 4 of the Tribune's report : "No attempt has been made to estimate the exact wealth of the persons who are named in these lists. The fact is, no one can tell exactly how much any man is worth until after he has passed away and his executors have paid his debts and settled up his estate. A man's profits, or his opportunities, or his style of liv- ing, sometimes lead to the popular belief that he is worth many millions. But no one knows about his losses, or whether he really took advantage of his opportunities, or what sums of money he 204 THE LABORER AND THE CAPITALIST. has given away to public institutions or his relatives ; or what sums of money he is owing for. Popular estimates of the exact wealth of different persons are exceedingly wide of the truth, most of the time, and it would be so difficult, expensive, and, in fact, inquisitive to obtain expert estimates, that it is better not to go into that branch of the subject at all. A case in point will show how mistaken is the popular idea of some people's wealth. The president of one of the great railroads of the country was lately mentioned in a published list of a few hundred "millionaires" as worth the enormous sum of 120,000,000. If this upright, able, and honorable man had actually taken advantage of the opportun- ities he has had of operating for his own benefit, he might possi- bly have accumulated the sum of money named. But he has al- ways managed the road in the interest of its stockholders, and he is actually worth not more than a million, if, indeed, he is worth that. Some of the men reported a year ago, when this investiga- tion first began, as worth a million, have died since then, and their estates have been found far below the million mark. It is hard, therefore, to say, who is actually worth a million." I will not suggest that the real value o£ the property of the 4,047 reputed millionaires is as much below the popular estimate as is that of the one referred to by the Tribune, whose reputed wealth of $20,000,000 turns out to be only one million, or less. But if the reader will take the results of his own observations, as a basis to calculate from, he will reduce the popular estimate of the wealth of the afore- said 4,047 individuals at least one-half. How many rich men have you ever known whose wealth was not over-estimated by their neighbors — not slightly over-estimated, but a great deal? It is not often that a 20O THE LABOR.ER AND THE CAPITALIST. very rich man's neighbors guess nearer the actual value of his property than did those of the late Mayor Harrison of Chicago. They were estimating him worth from three to four million, when his death revealed the fact that he had less than $900,000. It is doubtful, to say the least, whether the property of the aforesaid 4,047 reputed mill- ionaires would this day sell in market for a price that would leave the owners one-half of the sum they are reputed to be worth. Such men are usually very large borrowers, and their decease almost invariably reveals heavy demands against them. Then, too, ranch property, milhng enterprises, tunneHng schemes, and mining ventures, etc., in which so many of such men are apt to have large investments, are by no means certain to yield the residts they appear to promise; and scarce a week passes that more than one reputed mill- ionaire or very wealthy concern does not turn out to be bankrupt. But, for the sake of the argument, let us assume that the aggregate wealth of the 4,047 individuals in question reaches the amount guessed by Tribune informants, or, say, to make it an even number, $4,000,000,000. Well, what of it? It is probable that more than nine-tenths of the people of all classes are of the opinion that enough is produced to make everyone well off, if it was properly distributed, but that the few get it and the many suffer on in poverty. Let us see. There were millionaires in the country a3 far back as 1830. But we will assume that the four 2oa THE LABORER AND THE CAPITALIST. billion dollars worth of property in question lias been only sixty years in accumulating; and let us also assume, for tbe moment, that every dollar of it has been wrongfully taken from the masses ; how much has the individual lost each day? Of course, this question cannot be accurately answered, but then, we do not need to be accurate in this case, nor is it necessary to make many figures in order to dissipate the popular delusion and annihilate the common theory that the people have been handicapped in their movements, or that they have fewer homes or less clothing, or that their tables are less luxuriously furnished on account of what the milHonaires have gained. To begin with, we will place the average population of the country for the last sixty years at forty millions. We will then estimate that two generations have come and gone during that time. The accumulations of the country then for the last sixty years have resulted from the labor of eighty millions of people. In sixty years there are 21,900 days. Now, upon the theory that the millionaires have taken their four billion from the people, each citizen has contributed about one-fifth of one cent per day. How much can one luxuriate on one-fifth of a cent per day ? How much of the good things of life will it buy ? Or, to submit sub- stantially the same proposition in other words : If the masses had had each day the percentage of the products of industry that has gone to the four thousand very wealthy men, would it have loaded their tables with rich viands, built them costly houses, covered their bodies with finer 207 THE LABORER AND THE CAPITALIST. clothing than they now wear, and at the same time relieved them of any considerable proportion o£ the so-called drudgery they have been performing ? There comes to mind the story of a peasant who com- plained to one of the Rothschilds that he was cruel in with- holding his vast wealth from the people when they needed it so much. The peasant was asked if he thought there ought to be an equal division ; he answered yes. Mr. Roths- child immediately drew a very small piece of money from his pocket and handed it to the peasant with the remark : " Here, sir, is your share." A thorough mastery by the people of the principle here involved is one of the pressing needs of the hour. A few years since a great multitude of poor people formed in line and marched by the Lord Mayor's house in London. They probably believed that the accumulations of the Lord Mayor were in some degree responsible for their poverty, and that he might help them, if he would. Undoubtedly, many a one in that procession deserved better things than had hitherto fallen to his lot, and many a wealthy man had passed by on the other side instead of drawing near to help his less fortunate brother. But unless the Lord Mayor possesses more of this world's goods than most people who are counted rich, his entire property would not purchase each member of that procession a respectable hat. And if the said Lord Mayor's property could have fallen into the hands of the members of the procession, an equal amount going to each individual, day by day, while it was being produced and accumulated, it would probably have amounted 208 THE LABORER AND THE CAPITALIST. to scarcely more than the cost of a single kernel of coffee to each of them. Think a moment ! The wealth of England is made up of profits resulting from her commerce with the whole world. It is safe to say that the trade of England has been carried on with an average of two hundred millions of people for the last three hundred years. During this time more than eight generations have come and gone, so that the property now visible on the British Isles is in no small decree the result of the efforts of more than three billions of people from first to last, the amount to each individual would be but a very small fraction of a cent a day, which is too insignificant a sum to materially effect the fortunes of any- body. Substantially the same facts obtain with regard to the United States. Our wealth is the product of more than six generations of Americans, together with the vast number of citizens of other countries with whom we have dealt for more than two hundred years. The amount that remains of the product of American labor, had it been equally divided while it was being produced, would not have added enough to the income of each individual to have supported a canary bird ; no, nothing near it ; it would not have bought a decent meal once in a year. Consider the wealth of the world, the length of time it has been accumulating, and the pro- digious number of hands that have been engaged in its production. If it were true that it had all been taken from the people wrongfully, it could have affected their condition 209 THE LABORER AND THE CAPITALIST. only as a drop of water affects the ocean. The amount to each individual is simply infinitesimal. It is not true, therefore, that a system of distribution that would turn to the many that which now goes to the few, would make any material difference in the hours of neces- sary labor, or in the power of the poor to surround them- selves with the necessaries or the luxuries of life. But the glorious truth has been abundantly proven in previous chapters that the possessions of the few have not been wrung from the many ; but that, on the contrary, the energy and fortunes of the few have been a priceless blessing to the many. As a rule, the more one hurries to get rich, the more rapidly he calls for hands, and, right here, is where the wage- earner gets his increased employment and his rise in wages. Let the workman consider this proposition, and then ask himself the questions, " Have not my opportunities been in- creased by the rapid accumulation of wealth in this country, and what would have been the present condition of labor without the pushing energy of the men who have won large fortunes or fortunes above the ordinary. Now, a word with regard to the statements of the New York World and the Times, quoted by Socialist, on pages 75 and 76 of this work. The opinion of the World that henceforth it would be harder for the workins^man to rise to a condition of independence, or to escape from the condition in which he was born, is absolutely refuted by the fact that the purchasing power of wages has already advanced con- siderably beyond what it was at that time, and again by the further fact that the increase in corporations and joint-stock 210 THE LABORER AND THE CAPITALIST. companies is rapidly multiplying the opportunities of wage- earners to invest their small savings and receive a share of the profits of business. How can this do other than make the road to independence easier for the workingman ? Now as to the statement by the New York Tiines, that half of the farms were ready to be sold, and the argument by the Socialist, that while the farmers were being driven into ten- antry the capitalist had been getting into a condition where he could buy those farms if he would, etc., is quite as wide from the mark, as the statement in the World just discussed. At the time the farmer was hard pressed the other capitalists of the country were in the same condition. In- deed, the condition that existed in 1877 when the World and the Times made the statements quoted, was like that which existed in 1893, as for example : The force that had lowered the value of the farm had placed the moneyed capital- ist where it was harder for him to buy; even the labor candidate's own statement, quoted on first page of this chapter, that 125 banks had suspended in six months, and that railroads and other large corporations were failing in frightful numbers, proves that whatever caused the calam- ity, it fell upon the rich as well as upon the poor. CHAPTER IV. RECAPITULATION AND CONCLUSION. Since I wrote the early chapters of this volume, in which I gave it as my opinion that harmony could not exist THE LABORER AND THE CAPITALIST. between laboring and capitalistic forces, while so many earnest people held the behef that capital was robbing- labor, I have seen much to confirm me in that opinion. An unusual number of great strikes have occurred in this country and in Europe, including that against the Pullman Company. Some violence has been used, and a great deal threatened. Labor organizations have gained rapidly, while public sympathy for the working man has not diminished. I feel the weight of the fact that my theory regarding the distribution of wealth- — which is the real bone of conten- tion — antagonizes the theories now being put forth, not only by the laboring world, but by many in the religious, literary and scientific fields as well. Nevertheless, as I scrutinize the preceding pages the behef that I am right does not weaken. And to the end that the opposing theories and opinions in question may be more conveniently analyzed by the reader, I will restate the substance of some of the more important, and compare their logic in a few pages of recapitulatory discussion. The feehng of the masses and the issues supposed to be involved, are fairly well stated by the Rev. Thomas Dixon as follows : " It is now the kingdom of money against the kingdom of the common people. " The masses are restless. " The classes are blind. " The hour is ripe for action. " The issues involved are tremendous. 212 THE LABORER AND THE CAPITALIST. " What are these issues ? " The stake mvolved for the conservative forces of society cer- tainly inchides : " First — The present economic order. Let the men of wealth and privilege understand it clearly. There can be no mistaking the meaning of this movement of the world's masses. The object of attack is the foundation of the present scheme of competitive society. " The conviction has grown so strong that it has become a prin- ciple of action — that the present order of society is responsible for the unequal distribution of wealth, the extremes of poverty and luxury, the opportunities for injustice and oppression, the creation of gigantic monopolies and the consequent impoverishment of the millions. They — the people — believe that if things remain as they are, within fifty years there will be billionaires in America. Right or wrong, they believe that millionairism is unjust, and that a billionaire would be a crime against humanity. " Mr. Thomas G. Shearman in his famous article in The Forum shows that in America three-tenths of one per cent, of the popula- tion control seventy per cent, of the property. In other words, in the distribution of national wealth one man in three hundred re- ceives $70 out of every SI 00, and two hundred and ninety-nine men receive $30, which, if averaged, would give them about ten cents each. The wealth of CrcBsus was $8,000,000. This is less than the annual income of more than one American millionaire. Mr. Shearman says : ' Several non-speculative estates have increased five-fold in less than forty years. Counting only four per cent, increase, the present fortune of $200,000,000 will become $1,000,. 000,000 in less than forty years.' " In justice to Mr. Dixon I will quote from his remarks directed especially to the working people. He said : 213 THE LABORER AND THE CAPITALIST. "The hour calls for the earnest and sacrificing thought of the workingman. His life hangs upon the movement of the next decade. He cannot afford to bhmder. He must think. He must read. He must organize. He must federate. Your revolution must be a bloodless one to be a successful one. Anarchy is an insanity. It was born in the wrongs of our social order, but it can never cure them. " It is the delusion of the dethroned reason. It will destroy friend and foe alike if allowed the opportunity, and over the wreck cut its own throat. " In proportion as violent councils have prevailed among the lead- ing movements of the masses, their cause has been set back, and the day of emancipation postponed. You are now endowed for the first time with the ballot and the free use of your brains. Use these resistless powers." As I have often stated in this volume, from the laborer's standpoint he has a tremendous ease against the capitalist. As he sees it, the concentration of wealth is enormous, and his own hard earning-s are immensely in the hands of the rich, who are using them to oppress him. But if my the- ory of the law of exchange and mutual dependence be cor- rect there has been no concentration of wealth except in a few individual cases, which does not, nor cannot, materially affect the fortunes of the masses. An article appeared in the New York Herald, August 19, 1894, in which are tabulated 183 names of indi- viduals whom the writer says own $474,000,000 of the $1,562,000,000 of the real estate value of New York City. This article is well calculated to have great 214 THE LABORER AND THE CAPITALIST. influence. The follomng are some of the statements accompanying these figures: " One of the most interesting chapters in the history of New York is the manner in which the real estate of the city is being gradu- ally absorbed by a few wealthy residents, who are continually making additions to the property they have been accumulating for years. " Researches made by the Herald demonstrate that the number of small property owners and landlords is steadily diminishing. By the Comptroller's receipts for 1893 it is shown that of the total taxes on real estate, valued at 11,562,582,393, those on property worth 8474,085,000 were paid by 177 private individuals and estates. This number does not include some estates whose hold- ings are mainly of a leasehold character, nor properties owned by corporations. " From this it will be readily seen that real estate in the city is largely controlled by the landed gentry." How can the masses read these statements and not be convinced that it is their solemn duty to attack the present scheme of "competitive society"? Couple Mr. Shearman's statement that three-tenths of 1 per cent, of our people own 70 per cent, of the wealth of the country, with the calculation quoted from the Herald, that 177 individuals own ^474,085,000 out of $1,562,582,393 of the real estate wealth of New York City, and they appear to have a meaning which at first glance borders on the awful. But when the two propositions are put under scrutiny, we discover that they are absolutely valueless, so far as re- lates to the question of the concentration of wealth. The 215 THE LABORER AND THE CAPITALIST. data they furnish regarding the present distribution of wealth is compared with no data of a former period, which alone can determine whether wealth is concentrating or not. If three-tenths of 1 per cent, of the population controlled 70 per cent, of the wealth in 1890, for example, what percentage of the population controlled 70 per cent, of the wealth in 1840, or fifty years ago ? If 177 individuals owned $474,000,000 of the real estate wealth of New York City in 1890, how much of the wealth of New York City did the same percentage of her population own in 1840 ? These questions answered, and we have positive knowledge regarding the great question of the concentration of wealth in New York City and in the country at large. We have no data at hand ; indeed, it would require a great length of time and much painstaking to obtain figures covering the whole country, but I feel that candid and well- informed minds will readily concede that if wealth has con- centrated anywhere, it has been in the city of New York. It is often said that " when a man becomes very rich he hies to the city." This is especially true of New York. It is the metropolis of the nation and the greatest natural trade center in the world. Its growth must be steady and per- manent. This, capitalists understand, and thither they go in large numbers with their wealth. There the poor go also from every clime. More than one-half of the population of New York City is of foreign birth or foreign parentage. It would seem to be quite natural, therefore, that with the constant inflow of the very poor and the very rich, one should stand out against the 216 THE LABORER AND THE CAPITALIST. other in the very strongest light. That the fortunes of the very rich should overbalance more and more, year after year, the accumulations of the very poor and the moderately well-to-do, is at first glance a natural conclusion. And, by the way, here is where the greatest difficulty lies in the settlement of the capital and labor controversy, to wit : Writers follow the impression resulting from the first glance. They do not search for all the elements in the problem. In other words, they stop short of the whole truth — not intentionally, as a rule — but here are huge piles of wealth, and near by are the poor. Rich people are more plentiful than formerly, and so are the indigent. Why reason further ? It appears plain that one is the concom- itant of the other, and that the few are consuming the goods that belong to the many. Thomas G. Shearman says that several non-speculative estates have increased five-fold in less than forty years. This is probably true, but without a further explanation it is absolutely and dangerously misleading. The natural in- ference is that the estates in question, together with the accumulations of rich individuals, are absorbing the great city. The Rev. Dr. Dixon has taken this view of the case from Mr. Shearman's statement, and thundered it forth to one of the largest congregations in New York City. The press has taken it up and spread it broadcast over the land. The Herald is reasoning in the same vein, and has pro- duced figures which, at first glance, appear to confirm not only the figures, but the inference natural from Mr. Shear- man's statement. ^17 THE LABORER AND THE CAPITALIST. Now let us look to the very bottom of the question of the concentration of wealth in New York City. Accompanying the figures in the Herald is the follow- ing: " It is, of course, impossible to give a complete list of persons owning property in New York worth 11,000,000 or more. The compilation of such a table would require an accurate knowledge of every ownership in the city, together with the ability to appraise each parcel at its exact value ; and this latter, it is safe to say, no one man possesses. "An attempt to gather up the information in unofficial quarters must have inevitably ended in disaster. Over-estimates of value, mistakes as to present holders, and a thousand other errors would have rendered a list made up outside of the public records worth- less. "So the list given below was taken from books showing the re- ceipts of taxes in the office of the Comptroller. It errs only in that the amounts placed opposite the names are in most cases very much below the wealth in real estate possessed by the individuals and estates named. This under-estimate arises from two facts: "The Tax Commissioners of this city assess property at about 60 per cent, of what they consider its market value to be, and oftentimes the valuation falls much below that figure. An en- deavor has been made in compiling the table to correct this. "The second cause for the under-estimate is to be found in the practice in vogue of having the lessees of ground and houses jjay the taxes as part of their rent. Where this is done the real owner of the property does not appear on the books of the Receiver of Taxes at all. Thus, for instance, the Astor estates have many tenants, from the lessees of their big hotels down to the occupants of their small dwellings, who pay the yearly taxes as part of their 218 THE LABORER AND THE CAPITALIST. rent. The amount of property credited to the Astors on the tax books and reproduced after revision in the accompanying table is therefore but a portion, though a goodly one, of their holdings. "While the table does not set forth all the owners whose posses- sions run into seven figures, it contains the names of the great majority of the landed gentry in New York. The figures are ac- curate as far as they go, and if wealth is under-estimated, as it is in most cases, the change from the usual habit of exaggeration shoidd be welcomed. "The figures have been compiled with great care, and only after much labor. They show the amount of money upon which the land-rich pay taxes. The totals opposite each name would not correspond with those in the Tax Assessor's books, which are ad- mittedly low. The revision of these tax figures has simply been undertaken with a view to bringing the values in touch with cur- rent market quotations." I have copied thus lengthily from the Herald to show the sincerity of the author, and how well calculated the article is to produce a deep impression upon the commun- ity. But I wish to call special attention to the language of the fourth paragraph, to wit : " The Tax Commissioners of this city assess property at about 60 per cent, of what they consider its market value to be, and oftentimes the valuation falls much below that figure. An en- deavor has been made in compiling the table to correct this." You see reader, the figures have been compiled with great care and much labor, yet the amount of property set down opposite each name does not correspond to the figures in the tax hooks. The reason given by the writer for this discrep- ancy is that "the revision of these tax figures has been 219 THE LABORER AND THE CAPITALIST. undertaken with a vievr to brinofins: the values in touch with cuiTent market quotations." By this, of course, is meant that the vvriter has added a sufficient amount to the official fisfnres to brino" the value up to the present market price of real estate. How else coidd he manage to bring " the values " (as he expresses it) in touch with current market quotations. Therefore 40 per cent, must have been added to the assessed value of the property in question, since no other sum would bring " it in touch with current market quota- tions." But why add any sum lohatever to the assessed value of the land of the rich without addins: the same ratio to the land of others, since to do so is to make a difference ajjpear which really does not exist. To illustrate : If Jones's land is assessed at ^1,000, and Hooper's at $500, the difference is one-half. But if we add 40 per cent, to Jones's without adding any to Hooper's, the differ- ence appears to be nearly two-thirds. This is exactly what has been done (though without wrong intention, I be- lieve) in the communication to the Herald. Now since 40 percent, has been added to the assessed valuation of the real estate of the very rich, and nothing to that of others, we will strike out that 40 per cent. All the real estate will then stand assessed at 60 per cent, of its market value, and we have a basis for calculating the difference in the value of the real estate holdings of the very rich and that of their neighbors. When this reduction is made, §284,451,000 represents 220 THE LABORER AND THE CAPITALIST. the true sum for comparison. The Herald reporter in ref- erence to the Astor holdings says : " The amount of prop- erty credited to the Astors on the tax books, and reproduced after revision in the accompanying table, is therefore but a portion, though a goodly one, of their holdings." Let us take it for granted that the table in question rep- resents not all, but a very large majority of the real estate holdings of what the compiler calls the landed gentry of New York City. We will say the same, and apply the same rule to the individuals representing the landed gentry of New York City in 1840. I have gone through the tax books of that year in a very cursory manner. A goodly number of the names which appear in the tax books I did not trace through more than eleven of the seventeen wards which constituted the city at that time. The names of property-holders were not alphabetically arranged in the tax books of those days, consequently the labor of tracing an individual name through seventeen volumes so as to find the full amount of his taxable property is very great. I went far enough, however, to become convinced that the real estate of New York City was very much more concentrated in 1840 than it is at the present time. To illustrate : I found twenty-five names and estates as- sessed for $32,000,000 of real estate. These twenty-five individuals and estates then owned about 18 per cent, of the assessed value of the real estate of the whole city, which at that time was $174,000,000. In 1894 the assessed valuation of the real estate of the whole city was $1,562,582,393. The compiler of the 231 THE LABORER AND THE CAPITALIST. figures in the Herald says that 177 individuals and estates own $474,085,000 of this amount, but I find that instead of 177 names and estates, 183 are tabulated in that com- munication, and their wealth all computed to make the total claimed. Then I find, as before shown, that the compiler has added 40 per cent, to the larger holdings and nothing to the smaller. Let us base our calculation upon the assessed valuation of all, which is as fair for one class as for the other. The result will then be that in 1894, 183 individuals and estates were worth $284,451,000 of the assessed value of the real estate of the city, which amounts to about 18 per cent, of the whole. The fact then is, that twenty-five individuals and estates owned as much of the real estate of the city of New York in 1840 as 183 own at the present time, or in 1894. The population of New York City was 312,710 in 1840, and 1,891,300 in 1894. The assessed value of the real estate of the city in 1840 amounted to about $550 for each resident. Therefore, the $1,280,000, which was the average wealth of the aforesaid larger holders in those days, was equal to that of about 2,327 of the smaller holders. In 1894 the assessed value of the real estate amounted to about $825 to each resident; therefore, the $1,554,000, which is the average real estate wealth of the aforesaid 183 larger holders at the present time, is only equal to that of about 1,883 of the smaller. 222 THE LABORER AND THE CAPITALIST. That is, while each of the larger holders of 1894 are able to purchase the holdings of only 1,883 of the smaller, each of the larger holders of 1840 were able to purchase the hold- ings of 2,327. Difference, 444. These figures do not accurately represent the relative value of the largfer and smaller estates and holdina^s of 1840 and those of 1894, but they approximate it, and, therefore, have a very important meaning. The fact that twenty-five individuals and estates owned a larger proportion of the city of New York in 1840 than a proportionate number of the present population own ; in other words, it being true that each of the larger real estate holders of 1840 could have bought the real estate possessions of 444 more of their neighbors than each of the 183 of the present larger holders can buy, proves that the real estate wealth of the great city is more evenly distributed at the present time than it was fifty years ago. Let us suppose that Mr. Shearman's estimate as quoted by Mr. Dixon is correct, and that " several of the non-spec- ulative estates have increased five-fold in less than forty years." What of it? Suppose the entire 183 individual holdings and estates reported in the Herald to have increase five-fold in forty years. Does that prove that the few are absorbing the real estate wealth of the city? Not at all. For the all-im- portant and all-sufficient reason, that while the value of the individual property and estates in question has in- creased about five-fold the wealth of the city has increased about nine-fold. So that instead of it being true that 233 THE LABORER AND THE CAPITALIST. a few wealthy residents are absorbing the real estate of the city, the increase in the value of their possessions is not kee]3ino' pace with the increase in the value of the whole by nearly one-half. How many years will it require for the few to absorb the many at this relative rate of in- crease ? And what is true of New York City, is true of the country generally. In 1792 General Washington's property, of a little less than $1,000,000, was equal to the property of a larger percentage of the people ; and Washington could have purchased the possessions of more Virginians at that time than any five residents of the same State can purchase at the present time. What Washington's million could have accomplished in Virginia when he lived Girard's $9,000,000 could have accompUshed in Pennsylvania in 1840. In 1848 John Jacob Astor's $25,000,000 was a larger slice of the nation's wealth, and he could have purchased the possessions of a much larger percentage of the popula- tion of the country than John D. Rockefeller or any other rich American can purchase at the present time, and that, too, if we place the property of our wealthier citizens at the very highest popular estimate, which is unquestionably far above the true figure. These facts cannot be disputed. They are mathematical conclusions. The per capita wealth and the valuations of property as they appear in the census report is a demonstration of the truth of the aforesaid proposition. Now let u^ turn again to the statement of the Rev. Thomas Dixon, based upon the figures of Thomas G. Shear- man. He says : " In the distribution of national wealth 224 THE LABORER AND THE CAPITALIST. one man in three hundred receives |70 out of every §100, while two hundred and ninety-nine men receive only $30, which, if averaged, would amount to about ten cents each." Now, instead of it being true that $70 go to the few, while only $30 go to the many, very much more than $70 go to the many, while very much less than $30 go to the few. A statistical statement by H. V. Poor, concerning the in- come of raih'oads, is a good illustration of how small a per- centage of income from business lodges in the hands of the few. See ^^ Poor's Manual for the Railroads " for 1887, as follows : " The rate per ton per mile for all the roads in the United States for 1865 equaled 3.06 cents, assuming the average rate of all to be that of the thirteen roads taken as representative lines. Had such rate been charged in 1887, the earnings of all from freight would have equaled $1,213,214,727 greater than the amount actually received. . . . An addition of one mill per ton per mile upon the movement of 1887 would have increased the earn- ings from freight by more than 160,000,000." These two propositions, by the distinguished railroad statistician, are full of meaning. They absolutely annihilate the theory that the larger proportion of the income from corporations and heavy business concerns (Monopolies as they are called) lodges in the hands of a few. If the addi- tion of one mill per mile on each ton of freight moved by the railroads would increase the income of the corporations more than $60,000,000 in a single year, the addition of two mills per mile, would, of course, increase the income 225 THE LABORER AND THE CAPITALIST. of the railroads more than $120,000,000 per annum, which is more than the net profit of all the railroads of the United States. It is demonstrated, therefore, that when the railroads charged three cents per mile for moving freight there re- mained permanently in their own hands less than two-tenths of one cent. In other words, out of every $30 earned by the railroads $2 went to the few and $28 to the many. Now for the other proposition by Mr. Poor, to wit : The difference in the cost of freight in 1865 and in 1887 reached a total of more than $1,200,000,000 in a single year. But let us assume that the average difference since 1865 has been only $500,000,000 per annum. The saving to the people has therefore been about $15,000,000,000, a sum larger by 50 per cent, than the present wealth of all the raikoads in the United States. What is true of railroads is true of corporations and large aggregations of wealth employed in the multitudinous bus- iness enterprises of the country. They are pouring wealth into the pockets of the many and increasing the opportun- ities of the masses to improve their condition. It will be remembered that the compiler of the figures in the Herald said in substance that his estimate did not include corporations, but that it did include most of the larger estates. The inference natural from his statement is, that had he included corporations, the enormous concen- tration of wealth would have been all the more apparent. Let us see. 236 THE LABORER AND THE CAPITALIST. Had he considered banking corporations, for example, he would have found the number in the whole city to be one hundred and thirty-one. These are great moneyed in- stitutions, but they are owned by 19,994 individuals — one hundred and fifty-two to each bank. That is, 19,994 indi- viduals have come together and agreed to loan money to the people. This is not a concentration of wealth in the hands of a few. It is a combination of capital for busi- ness purposes. It is nothing more nor less than a co-oper- ative association. Had the writer for the Herald seen fit to have included corporations other than banks in his table he would have found in the whole city 1,387. Assuming the number of shareholders for each of these corporations to correspond to the number of shareholders for each bank (one hundred and fifty-two), the total number of shareholders in the 1,387 corporations would be 210,814, which, added to the 19,994 bank owners, makes a total of 230,808 owners for the 1,518 corporations. Is this a concentration of wealth ? Now for the estates ! Of the 183 holdings tabulated in the Herald, 63 are estates. Some of them are quite large ; but can it be truly said that these estates represent wealth concentrating in the hands of a few? On the contrary, they are wealth dis- tributing among the many. To illustrate : While the Astors have multiplied less rapidly than most famiHes have, there are, nevertheless, more than fifty heirs to the estate. So that if the value of their whole property be really up to the popular estimate, the Astors are practi- 227 THE LABORER AND THE CAPITALIST. cally worth little more than a million dollars each. And, comparatively speaking, that is, in power to purchase the holdings of neighbors, great and small, the richest Astor of to-day is no approach to the Astor of 1848. If it be assumed that each of the other 62 estates tabulated by the Herald has as large an heirship as the Astors, they are practically the property of 3,100 individuals, whose average share of the estates in question falls below twenty thousand dollars. How much more widely then, is the wealth of these es- tates distributed than it was when the death of those who first controlled them took place. An All-wise Creator has made it natural for wealth to ac- cimiulate, and He has made it just as natural for wealth to scatter. Up and down and over the earth constantly travels the grim and irresistible messenger — Death. He strikes down rich and poor ahke, and divides their hoards, great and small, among the living. The wealth of the orig-inal Vanderbilt has been divided into about eighty parts. In twenty-five or thirty years the same great Leveler will subdivide it many times ; and in half a century the colossal fortune of Cornehus Vanderbilt will be known only in history. The same will be true of most of the other laro e fortunes o of to-day. Nevertheless, more will come into existence, serve their purpose, and follow those that have preceded them as one generation follows another. 238 THE LABORER AND THE CAPITALIST. CHAPTER V. A NEW BOOK. I had tliouglit to let this volume close with the preced- ing chapter, but my attention has just been called to a new publication, the character and method of which has deter- mined me to write the following criticism. The publication referred to is written by Prof. Charles B. Spahr, and bears the title, " The Present Distribution of Wealth in the United States." It is one of twelve works on Political Economy pubhshed by the Library of Economics and Poli- tics, edited by Richard T. Ely, Ph.D., LL.D., Professor of PoHtical Economy and Director of the School of Economics, Political Science and History in the University of Wiscon- sin. Dr. Spahr has been employed by Columbia and other institutions of learning to lecture upon the general subject of Political Science. A book coming from so responsible a source will of course attract public attention. I notice that Dr. Spahr is lengthily and confidingly quoted in a goodly number of recent publications. In fact the work has been brought prominently before the country by a dis- tinguished Republican senator (see Hon. Wm. E. Chandler's speech, Congressional Record, February 16, 1897, page 1,984), as follows : " The writer of a recent essay on ' The Present Distribution of Wealth in the United States,' Prof. Chas. B. Spahr, sums up his conclusions as follows : There is constantly going forward in this 229 THE LABORER AND THE CAPITALIST. country a concentration of wealth in the cities to the impoverishment of the country districts, and that in the cities there are forces con- stantly working toward a yet narrower concentration of wealth — as much more concentrated as it is greater than the wealth in the coun- try. He asserts that, taking the whole country, the great body of the small property holders, embracing seven-eighths of the property- holding families, hold of the national wealth only one-eighth, while the wealthy classes hold five-eighths ; that one family out of every hundred holds as much wealth as the other ninety-nine ; that the average wealth of the families in the country districts is $3,250, while in the cities it is $9,000 ; but that the wealth of the East, including foreign holdings, with but 30 per cent, of the popula- tion of the country, amounts to thirty-one thousand five hundred millions of dollars, while the wealth of the West and the South, with 70 per cent, of the popidation, is thirty- three thousand five hundi-ed millions. He says, in connection with incomes, that two- fifths of the product of industry goes to capital ; that one-tenth of the families have as much income as the nine-tenths ; that 1 per cent, of the families, the richest, at the top, have as much income as the 50 per cent., the poorest, at the bottom. In other words, that one-eighth of the families have more than one-half of the whole income of the people. ... If these conclusions are to be relied upon — and they are carefully set forth and gravely de- fended — while it may not be patriotic to ajDpeal for the votes of the poor against the rich, yet it will certainly be wise for the gov- erning classes of this country to devote themselves, in hard and distressing times, to the alleviation of the burdens of the poorer classes." The nature and drift of Dr. Spahr's work is sufficiently explained in the foregoing remarks of Senator Chandler, and the power of his arguments is well attested by the fact 230 THE LABORER AND THE CAPITALIST. tliat the Senator's practical indorsement of them before the highest legislative body in America called forth no protest from the distinguished Senators and economists who were present. All of which goes to confirm my earher position that the belief that the results of a common industrial ef- fort are centerinof more and more in the hands of a few o permeates all classes of society, legislative bodies not ex- cepted. I will pave the way to an analysis of some of Dr. Spahr's leading arguments by quoting the preface to his book, which reads as follows : " This volume is written chiefly for the instruction of the in- structed classes. The conclusions reached respecting the present distribution of propert}'' and incomes are in the main those which common observation has forced upon thoughtful men and women in the ordinary walks of life. The writer has learned, and hojjes to teach, that, npon matters coming within its field, the common observation of common people is more trustworthy than the statistical investigations of the most unprejudiced experts. Indeed he has come to believe that social statistics are only trust- worthy when they show to the world at large what common obser- vation shows to those pt^^^ons familiar with the conditions described." Dr. Spahr has written his book under the conviction that, to use his own words, " the common observation of the common people is more trustworthy than the statistical investigations of the most unprejudiced experts." No considerate mind wiU question the value of common observation, but how frequently Ave find it at fault. As, for example, the common observation of the older class of 231 THE LABORER AND THE CAPITALIST. the community, and indeed of all classes, is that human life averages less years now than it did in the days of plainer living, simpler tastes, fewer factories, and the more vigorous outdoor exercise of a hundred years ago, yet our vital statistics compel us to admit that the very opposite is true. Common observation would lead us to believe that our globe is flat, and that the sun travels around the earth in- stead of the earth around the sun, but the tremendous reach of the telescope, the science and skill of the mathe- matician, and the carefully prepared figures of the astrono- mer force us to a different conclusion. More or less failures have taken place every day from time immemorial. At some periods they have come upon the business world like an avalanche ; one following the other so swiftly that the community has stood aghast and somebody — probably reckoning from common observa- tion data — started the story that these failures amounted to 95 per cent, of all who engaged in business, and the world has so believed for many many years. But the Bradstreet Commercial Agency (see page 2, Bradstreet's Commercial Keport, 1895) instituted a statistical investigation, requiring, to use their own words, the examination and re-examination of more than 1,300,000 indi\adual firms and corporations throughout the country repeatedly, and the service of more than 125,000 correspondents at 78,809 cities, towns, and postoffices in the United States and Canada, and from this investigation we learn, to our very great surprise, that, of all who have entered business, the percentage of failures has only been about one-third of what we had supposed it 232 THE LABORER AND THE CAPITALIST. to be, to wit — 30 instead of 95 per cent. In other words, a careful statistical investigation has demonstrated that, re- garding the percentage of failures to the number of per- sons entering business, common observation has been about 60 per cent, wrong, and might have remained so through all time, for aught we know, had not a statistical investigation dispelled the illusion. While I drew my conclusions from common observation, I believed that the door of advancement was being closed in the face of the poor. I looked upon the costly struc- tures in our large cities, for example, as wealth piled up to some day menace liberty, if, indeed, it was not already doing so. So far as I could gather, from glancing around, so to speak, the wealth of the country was concentrating in the hands of a few, but a careful statistical investigation made me know that " the common observation " of myself and the rest of the common people regarding the distribution of wealth was absolutely wrong. All this has not made other important questions — cur- rency, tariff, etc. — appear any the less important. But I have come to think that the question of the distribution of wealth and the true relation of the laborer and the capital- ist, and the part each is performing in the work of life and the forward movement of the race, needs to be better under- stood, before an unprejudiced discussion can be had upon any other economic subject of great and general import- ance. And I must say, in all candor, that books written by men of unquestionable ability and integrity, but who assume certain premises to be correct, and as I have said 233 THE LABORER AND THE CAPITALIST. in the first chapter of this work, conscientiously disregard, or pass lightly over, so many facts, which a more search- ing analysis would show to be truths of tremendous im- portance, even vital, are great hindrances to a speedy and amicable settlement of the main differences between the laborer and the capitalist. Dr. Spahr does not dispense with statistics by any means ; indeed, he quotes them freely when they suit his side of the case, but ignores or dismisses them very unceremoni- ously when they do not support popular opinion, or, to use his own words, "when they do not show to the world what common observation shows," etc. I can but feel that through this behef dominating Dr. Spahr's mind, he has reasoned so loosely, and drawn conclusions from data so in- complete and untrustworthy, as to render his elaborate essay worse than valueless as an economic work. This is strong language to use against an authority so lately cited by a dis- tinguished legislator before a Senate that seemed not to ques- tion the conclusions quoted. Nevertheless let us examine : — When I discussed the savings banks, on pages 173-4—5 of this work, I felt that I had illustrated an encouraging, but not generally understood, truth regarding the power of the thrifty toiler to save. And also did I feel that the savings- bank statistics there tabulated were a complete refutation of the theory advanced by Dr. Strong, whose arguments I was then criticising. Why was I not right ? The number and aggregate amount of savings bank accounts are increas- ing much more rapidly than the number of very rich peo- ple or the percentage of their wealth. This being true, 234 THE LABORER AND THE CAPITALIST. now can it be said that the rich are getting a larger and larger share of the national income ? However, here we encounter one of Dr. Spahr's leading arguments, which he introduces early in his essay. See page 58 of his work, as follows : — " The conclusions reached by the Massachusetts Labor Bureau, under General OHver, are incontrovertible. Great as are the benefits conferred by the savings banks upon the more thrifty wage-earners, the bulk of the de- posits belong to a comparatively small class of the rich and well-to-do citizens." Here I find a foot-note referring to a report by the Labor Bureau of Massachusetts for 1872-3, in which Dr. Spahr writes as follows : " The conclusions especially indorsed are the following (Report 1873, p. 228): 1. That persons not wage-earners are depositors to at least one-half of the total amount deposited. 2. That, as a rule, wage labor deposits average under $50 at one time. 3. Manufacturers, traders, and lawyers use these banks instead of banks of deposit. 4. That capitalists, persons living on their in- comes, use these banks to escape taxation and the care necessi- tated by other investments." To these statements Dr. Spahr appends the following : "The deposits made (at onetime) in ninety savings banks were classified as follows : " Deposits under $50 at one time, . . . 167,601 Aggregate, 13,375,379 Deposits between $50 and 1300 at one time, . 70,002 Aggregate, 18,597,877 Deposits over $300 at one time, .... 16,426 Aggregate, ; $11,793,256" 235 THE LABORER AND THE CAPITALIST. Dr. Spalir thinks the money deposited in savings banks by the rich and well-to-do classes amounts to more than one- half of the whole, and he has submitted the table just quoted as proof ; the argument being, of course, that the wage-earner and the common people cannot possibly com- mand such large sums as are there shown to have been de- posited at one time. Let us inquire. The reader will observe, if he analyzes the table, that the ^3,375,379 deposited by 167,601 persons amounted to an average of $20.13 to each depositor. The $8,597,877 de- posited by 70,002 persons amounted to an average of $122.80 to each depositor. The $11,973,256 deposited by 16,426 persons amounted to an average of $728 to each depositor. In other words, speaking in round numbers, 167,000 individuals deposited less than $50 at one time, 70,000 individuals deposited between $50 and $300 at one time, while only 16,000 individuals deposited more than $300 at one time. During a recent conversation with a real estate dealer he pointed out a beautiful ridge of land where upward of a hundred lots had been surveyed and sold. Of these lots a very large majority were bought a few years ago by poor men. In fact, the agent stated that more than 90 out of 103 had been sold to poor and com- paratively poor people ; some of them clerks, but wage- workers nevertheless. A few had built upon their land, while others had sold at an advance. It is not uncommon for a poor man to purchase a lot for from one to threfe hundred dollars, pay for it in weekly or 230 THE LABORER AND THE CAPITALIST. monthly installments, and sell it for from five hundred to a thousand at the end of five years, more or less. Therefore, we see that a great many wage-earners neces- sarily have $300 and a $1,000 or more to deposit in sav- ings banks at one time. Again, consider hov/ few of these larger deposits are required to make up the proportion tabu- lated by Dr. Spahr, there being in round numbers only six- teen thousand of the larger, against two hundred and thirty- seven thousand of the smaller. Dr. Spahr says that manufacturers, traders, and lawyers use the savings banks. If there is a grain of truth in this, it is a very small one. The amounts deposited, even the larger class, average altogether too small to indicate any considerable use of the savings banks by the rich, whether they be manufacturers, traders, lawyers, or what not. So far as manufacturers, traders, and lawyers use the savings banks, they are very generally of the poorer classes ; and these probably own a great majority of the larger one- time deposits. In the line of manufacturers may be men- tioned such persons as custom shoemakers, tailors, milliners, harness-makers, men engaged in cabinet-making in a small way, etc., who either work alone or employ a hand or two. There are of these a great many. They are found all through our cities and towns. They probably occupy a greater number of small business places than the rich oc- cupy of the larger. They are a thrifty, intelligent class of people ; most of them are comparatively poor, some are poorer than many of the wage-earners. Nevertheless, as a THE LABORER AND THE CAPITALIST. rule, they aspire to independence, some to large fortunes. It will not be denied that a goodly number of these people, if not abeady paying- for a home, are saving money for that purpose. As a class they are sure to use the sa\dngs banks, more or less. Then consider the poorer class of traders, shop-keepers, people who buy and sell goods on a small scale. The busi- ness places occupied by these trading, and in a sense speculative, men and women, probably equal the larger in the point of numbers ; at any rate, there are a great many of them; and all that has been said of the small manu- facturers can be as truthfully said of the small traders. They are, as a rule, intelligent and thrifty ; they are edu- cating their children, accumulating property, and hopefully aspiring to larger quarters and a more extensive business. In short, they are where most of our distinguished business men were twenty or thirty years ago. Couple these with the small manufacturers already described, and we have two large classes of people whose savings-bank deposits are not confined to fifty, three hundred, nor even a thousand dollars. And how few of these people need to deposit above $300, or as high as $728, to equal the number of larger one-time deposits held by the savings banks. Then consider the lawyers. Rich lawyers may have de- posited money in savings banks, but that they have done so to any considerable extent is not true, as we shall see further on. The lawyers who patronize the savings banks are generally of the younger class, many of whom have struggled through college, largely on their own earnings THE LABORER AND THE CAPITALIST. derived from teaching, clerking, and the like. Of the more than fifty thousand towns and cities in the United States, there are very few that do not contain at least one of this class of lawyers, and the larger cities have a great many of them. Not a few of these men have a home or some other property in view which they wish to purchase, and they are saving money for that purpose. One conducts a law suit, for example, wins his case, and a hundred or a thousand dollars, more or less, is the pecuniary reward, and the sav- ings bank is generally the first receptacle. Now, when we consider the great number constituting the three classes just described, to wit, the small manufac- turers, the small traders, the younger and poorer lawyers, and consider the nature of their business transactions, the sums of money they are liable to handle, and, in f aet, are known to handle, is it not a rational presumption that they are capable of depositing, and, indeed, have deposited, the bulk of the larger one-time deposits in the savings banks ? But fortunately for the great principle involved in the savings bank question, we are not obliged to dismiss this subject without more reliable evidence. There is expert testimony at hand, which ought to settle the question as to who owns the bulk of savings bank deposits. I refer to the testimony of bank managers. Should you ask a savings bank officer : Who owns the bulk of money in your bank ?, his answer would be, the poor and comparatively poor. If you ask how he accounts for so many large one-time deposits, he will ask what you mean by so many large one- 239 THE LABORER AND THE CAPITALIST, time deposits, since the records show that only about six persons have deposited about $300 at one time, while about ninety-four persons have deposited from $300 down. Again the banker will tell you that a goodly number of his larger one-time deposits result from deaths in families where the husband, or the wife, or both, have been deposi- tors, and at the same time carried a life insurance policy. The decease of either of these naturally brings one of the larger one-time deposits to the savings bank. Again, owing to statutory restrictions placed upon savings banks, those institutions do not want rich people's money. The statutes of the State of New York, for example, forbid the savings banks to pay interest on sums above $3,000 deposited by one person, Avhether said sum be deposited in larger or smaller amounts. The Bowery Savings Bank, which, by the way, holds the largest amount of money in deposit of any savings bank in New York, or in the world, for that matter, refuses to receive above $500 in one year from any one person. The savings banks are very much restricted in their operations, and their existence depends upon their complying with the statutes. In the first place, they are forbidden to purchase the bonds of any state which has within the last ten years defaulted on any part of its indebtedness. And even the best of improved real estate cannot be received by savings banks as security for loans at more than 50 per cent, of its market value, and unimproved real estate at not more than 40 per cent. Then, too, the savings banks are not allowed to hold a cash 240 THE LABORER AND THE CAPITALIST. surplus of more than 10 per cent. (I am referring to the New York savings banks) ; that is, they must keep their money loaned out so as not to have more than 10 per cent, of the total deposits remaining in bank. Thus it is seen that the kind of security they are obliged to seek, and the necessity of keeping their money loaned, compel the savings banks to exercise great care in receiving deposits. Remove these restrictions, and savings banks would very soon become commercial institutions like other banks. The leading facts regarding the banks in question were concisely stated by a controlling officer in one of the New York savings institutions, when he spoke to me substantially as follows : "I do not doubt that rich people have some money scattered in savings institutions. They sometimes deposit under names other than their own ; but we have all we can do to loan what money the poor people deposit with us on such security as the law com- pels us to demand. If we were to allow the rich to deposit their surplus money in our banks, it would very soon render it impos- sible for us to pay such rates of interest as would make it desir- able to deposit money with us. Thus, you see, we do not want the rich and the rich do not want us." The facts I have here set forth, regarding the ownership of savings bank deposits, are corroborated by the very best authorities in New York and Brooklyn ; among which are : The East River Savings Institution, chartered 1848. Amount due depositors January 1, 1897, $12,540,814.10. The Dime Savings Bank of Brooklyn. Amount due depositors January 1, 1897, $21,772,848.17. 241 THE LABORER AND THE CAPITALIST. The Brooklyn Savings Bank, incorporated 1827. Amount due depositors July 1, 1896, $30,339,066.39. The German Savings Bank, New York, opened July 1, 1859. Amount due depositors July 1, 1896, 137,025,309.84. The Immigrant Industrial Savings Bank, New York. Amount due depositors January 1, 1896, $49,649,731.86. The Bank for Savings, New York, chartered 1819. Amount due depositors January 1, 1896, $51,254,883.10. The Bowery Savings Bank, New York, chartered 1834. Amount due depositors January 1, 1897, $57,556,106.66. Ill conversing with an officer in one of these institutions regarding the fact that rich men are apt to give their wives, daughters, and sons pin money, so to speak, sometimes a hun- dred dollars, sometimes a thousand or more, and that the recipients are likely to deposit these sums in savings banks, where they will draw interest for a time, the bankers admitted that such was the case, but said that the sum total of such deposits amounted to very little, when compared to the total deposits coming from other sources. To the question, *' Is it not possible that one-fourth of the sum total of savings bank deposits belongs to the rich and well-to-do classes ?," the general and prompt reply was, " No, not one-tenth." One banker said it might be possible that one-fourth of the de- posits of some savings banks belonged to the rich and well- to-do classes, but that he had never known of such an instance. He thought that one-tenth would more than cover the average amount of savings bank deposits owned by the rich and well-to-do. Therefore as regards the ownership of moneys deposited in savings banks I can but regard Dr. Spahr's position as 242 THE LABORER AND THE CAPITALIST. absolutely demolished by facts showing that there are plenty of people capable of making and likely to make the larger one-time deposits without crediting the bulk, or any con- siderable amount, to the rich ; and again by the restrictions under which savings banks exist and are compelled to do business. And last, but not least, is Dr. Spahr's position overthrown by the expert testimony of disinterested wit- nesses — those who have direct knowledge concerning the matter in dispute- — in fact, the only persons absolutely qualified to testify in the case. I refer to savings bank of&cers, who have nothing to gain, pecuniarily or otherwise, by suppressing or misrepresenting the facts. CHAPTER VI. SURROGATE ARGUMENT. Dr. Spahr does not rest his case against our savings bank theory with his larger one-time deposit argument; far from it ; he produces Surrogate Court records and he makes them count more for his side than all the rest of his data. In fact, if the Surrogate Court argument was stricken from Dr. Spahr's essay, the strongest prop would be gone from one of the most skillfully written and danger- ously misleading books I have ever read. I use the word " dangerously " because a book emanating from such a source that furnishes unusually plausible argument in support of the theory that an exceptionally powerful class of citizens are receiving a share of the general income which is out of all 243 THE LABORER AND THE CAPITALIST. honest and safe proportion to the benefits the public are re- ceiving from them, can but inflame the pubhc mind more or less, however scholarly and pleasantly such book may be written. It cannot be said of Dr. Spahr, however, that he makes the sHghtest effort to incite disorder. He simply writes Hke one deeply imj)ressed with the justice of his cause, and supports his common observation theory with data which those who have not studied the subject searchingly (and that means a large majority of the people), will regard as perfect proof of the soundness of his position ; hence the danger of his book. The data to which I refer, are of course, the Surro- gate Court reports. On pages 57-8, after stating that two- thirds of the families in New York City are without prop- erty. Dr. Spahr writes as follows : " This conclusion, though it is that which common observation has forced upon every one familiar with the east side of New York, shows how utterly fallacious is the savings bank argument, so fre- quently employed by conservative statesmen and economists. In JVeio York City the number of savings haiik accounts is nearly twice as great as the number of families. Generally speaking^ every savings hank account must pass through the Surrogate Court on the death of its owner, yet two-thirds of the families not only possess no savings hank account, hut no registered property of any description.^^ On page 55 of his work Dr. Spahr says he selected three months, ending December, 1892, and procured re- ports for those months from the clerks of the Surrogate Courts in various parts of the State of New York. And 244 THE LABORER AND THE CAPITALIST. on page 56, lie refers to what took place in New York City within that time as follows : " During the three months 2,600 men over twenty-five years of age died. If they owned any registered personalty, even the smallest amount in a savings hank^ their estates had to pass through the Surrogate's Court before reaching the heirs. Yet, the whole number of estates entered was less than one thousand, and the whole number of estates left by males was barely six hun- dred. In other words, only one-fourth of the men who died left any property whatever, except their clothing and household furniture." What can be more convincing' to the general public than the Surrogate records, as Dr. Spahr has presented them ? The averaore reader will reason that while a man is still alive he may quibble about his wealth, or conceal the facts to escape taxation, etc., but that after death has overtaken him an inventory of his effects takes place, and his savings bank account, if he has any, must pass to the heirs through the Surrogate courts ; and that the number and amount of the accounts there found upon the records must indicate the number and amount of the accounts remaining amono- the people, precisely as the number and amount of the es- tates there recorded might be supposed to indicate the number and amount of the estates remainino- among- the people. There can be no mistaking the author's meaning. He intends to have his readers feel that substantially all savings bank accounts of deceased persons reach the heirs throuo-h the Surroo-ate courts, and that said savinofs do not exist among the masses in any such sum or sums as appear to be indicated by the bank and government reports. 245 THE LABORER AND THE CAPITALIST. Does Dr. Spahr doubt the existence of savings bank ac- counts as reported by the banks and by the government ? What object have the officers of banks in reporting the nrvHies, residences, etc., and crediting sums of money to parsons Vvho have not deposited it in the bank ? And why should the bank commissioner, an officer of the State, and the government statistician, report accounts that do not exist ? People may, and will, draw such conclusions from the number and amount of savings bank deposits reported, as their varying judgment and meager knowledge of facts and circumstances may dictate ; but as to the number and total amount of savings bank accounts the official reports can no more be questioned than the number and location of the banks themselves can be questioned. It must be, therefore, that if Dr. Spahr's investigation of the Surrogate books of New York City has not revealed a sufficient niun- ber of savings bank accounts to justify the belief that such accounts exist among the people, both in number and in amount according to the reports, there must be some reason or reasons for it, which he has either overlooked or does not understand. Let us look into the matter. In the first place Dr. Spahr has confined his figures to persons over twenty-five years of age, and whoever will stop to think must know that thousands and hundreds of thousands of savings bank deposits are made by people under twenty-five years of age. We also know that more or less of these people die. Yet Dr. Spahr has entii'ely omitted them from his fist j he passed them by when he 246 THE LABORER AND THE CAPITALIST. canvassed the Surrogate records for inventoried estates. One reason, then, why he found so few savings-bank ac- counts passing through the Surrogate Courts in New York City was because he took no note of those who, taken together, probably constitute a larger number than any other one class of savings-bank depositors, to wit : Persons under twenty-five years of age. Again, no one pretends, or at least no one ought to pre- tend, that New York City people alone have savings-bank accounts numbering nearly two to each family. Tens of thousands of the savings-bank accounts in New York City belong to people living in outside districts, who would rather risk their savings in the older and larger banks of New York City than in the newer and smaller institutions in their own neio-hborhood. Of course, the estates of these people are never probated in New York City. Here, then, is another powerful reason why Dr. Spahr found so few savings-bank accounts upon the Surrogate records of New York City. Again, the savings-bank accounts that appear upon the Surrogate records of New York City cannot be taken to indicate even the number or amount of such accounts re- maining in the hands of the people of that city, for the all- sufficient reason that no mortal man has any idea, nor is there any data that can inform him concerning the per- centage of the savings-bank accounts of deceased persons that do not pass through the Surrogate Courts. As for example, savings-bank depositors, being poor or comparatively so, are very liable to have their savings 247 THE LABORER AND THE CAPITALIST. heavily drawn upon, if not entirely consumed, during a sickness of any considerable length. At all events, when a savings-bank depositor dies, the chances are many that his or her savings are withdrawn and disposed of, or that such other provision has been made that what remains in bank is paid over to some duly authorized agent of the de- ceased without the trouble and expense of court proceed- ings. In short, the rational inference from all the facts is, that a very small percentage, even of the sa^dngs-bank ac- counts of deceased depositors, are ever known to Surrogate Courts. Here, then, we have a third powerful reason why Dr. Spahr found so few savings-bank accounts recorded in the Surrogate Courts of New York City, while her savings institutions were rejoicing over a marvelous number, aggre- gating an amount that might be truly called prodigious. What meaning can the Surrogate records of New York City, or, indeed, of any other city or locaHty for that matter, have concerning savings-bank accounts in the country at large ? In Massachusetts, in 1887 (see page 173, this work), 150,274 persons opened savings-bank accounts, while 107,415 persons closed their accounts. And if we refer to the savings banks of the whole country, we find that the proportion of new accounts to the whole amounts to 15.9 per cent, per annum, while the accounts closed amount to 11.4 per cent, per annum of the total number of accounts; the difference in the number of accounts opened and the number closed was therefore 4^ per cent. The number of savings-bank accounts in the whole coun- 248 THE LABORER AND THE CAPITALIST. try in 1896 was, in round numbers, about 5,000,000. If we take the percentage o£ accounts closed with the savings banks of Massachusetts as a basis, we find that the accounts closed in 1896 amounted to about 570,000. The death rate for the cities of the country, where most of the depositors re- side, averages a Httle less than two per cent. ; therefore, if the death rate was normal, about 100,000 of our savings- bank depositors died during the year (1896). If all of these 100,000 accounts had passed through the Surrogate Courts, there would stiU be left approximately 470,000 ac- counts that disappeared in a single year, but which did not, nor could not, and in fact never can, pass through the Sur- rogate Courts, for the all-sufficient reason that they have been closed and the money withdrawn by the owners and invested in business or otherwise disposed of without any reference to Surrogate Courts. This fact demonstrates, even to a mathematical certainty, that at least eighty-three out of every 100 savings-bank accounts do not pass through the Surrogate Courts, and from this we know that the Surrogate records, as presented by Dr. Spahr, do not indicate even approximately the number or the total amount of savings in the hands of the people, rich or poor. CHAPTER VII. THE SURROGATE ARGUMENT AS APPLIED TO PROPERTY OTHER THAN SAVINGS-BANK ACCOUNTS. We have seen how the Surrogate records fail to illus- trate the facts regarding the distribution of savings-bank U9 THE LABORER AND THE CAPITALIST. accounts. Let us now inquire whether or not they indicate the distribution of property other than savings-bank accounts. On page 57 of Dr. Spahr's work, he says : " If the death rate was normal during the period covered, the returns indicated about one hundred and ten thousand property- owning famihes. The whole number of families in the city (meaning New York) was three hundred and thirty thousand. In other words, two-thirds of the families are, in a strict sense of the word, property less." That the reader may be able to judge the more intelli- gently regarding the value of Dr. Spahr's basis for cal- culating the general distribution of wealth, I wiU quote (although I have quoted it before) a portion of his remarks, on page 56 of his work, as follows : " During the three months 2,500 men over twenty-five years of age died. . . . Their estates had to pass through the Surro- gate's Court before reaching the heirs. Yet, the whole number of estates entered was less than one thousand, and the whole number of estates left by males was barely six hundred. In other words, only one-fourth of the men who died left any property whatever except their clothing and household furniture." It will be observed that this calculation concerning the property-owning families in New York City is based upon the probated estates of males without any reference to fe- males. This appears to me very strange, not to say reckless, for on page 177 of Dr. Spahr's own work he has tabulated the inventoried estates in Massachusetts from 1859 to 1861, and those tables show that of the whole number of the estates 250 THE LABORER AND THE CAPITALIST. probated during those years, females owned more than one- third — to wit: males, 5,103; females, 1,819. I have shown that the corporations of Massachusetts have a great many female shareholders. And it will be remembered (see page 173 this work) that more than half {50^ per cent.) of the total amount of savings-bank de- posits in Massachusetts were owned by females. In a recent conversation with Mr. Joseph Brooks, 127 Broadway, New York, who is the Vice-Manager of the celebrated Sherman Park property in the suburbs of that city, he told me that at auction and other sales of real estate in New York nearly one-half of the buyers are fe- males. But what is still more conclusive, and to the point, are the figures which appear in another part of Dr. Spahr's own book. In a foot-note on page 56, regarding the Surrogate records of New York City, he writes as follows : " For the entire year, 1893, more exact statistics can be given. The number of estates (testate and intestate) admitted to pro- bate, was 4,892. Of these 62 1-2 per cent., or 3,047, belonged to men." Take notice: 62^^ per cent, of the estates that passed through the Surrogate Court of New York City in 1893 belonged to men. Of course then the other 37^ per cent, belonged to women. Or, to state the same proposition in another way, the year that witnessed the death of 3,047 property-owning males, witnessed the death of 1,845 property-owning females. And the question arises, if these deceased male property owners indicate about 110,000 property-owning families, as claimed by Dr. Spahr, how 251 THE LABORER AND THE CAPITALIST. many property-owning families do the deceased females indicate ? In other words, why is not a female property owner as likely to indicate a property-owning family as a male ? Or, does the sex make a difference ? Now, if we take the property-owning females into account (and, pray, why should we not ?), the Surrogate's records indicate not 110,000 property-owning famihes in New York City, but 176,000, which is 11,000 more than one-half, instead of about one-third, as estimated by Dr. Spahr. Let us reason a moment at this point. Suppose, for the sake of the argument, that the estates, great and small, of all deceased persons passed through the Surrogate Court. It would then follow that the size and number of the estates there recorded would indicate the size and number of the estates remaining in the hands of the living. As, for ex- ample — if when one thousand of the inhabitants of a county have died, it is found that five hundred estates have passed through the Surrogate Court, we have a right to infer that half of the people who are still living in that county have registered property also, for the very good reason that one- half of those who have died are shown by the Surrogate records to have had registered property. But then : if we offer such records as indicating the proportion of the popu- lation owning registered property, it must be understood that such records have been correctly kej)t. Or, if we offer a copy in evidence, it must be an exact duplicate of the original. For, if the copy contains more names than the original, it then f oUows that persons owning registered prop- erty are thereby made to appear too many. On the other 252 THE LABORER AND THE CAPITALIST. hand, if the copy contains less names than the original record, persons owning registered property are made to ap- pear too few, and the latter is precisely what results from Dr. Spahr's presentation of the Surrogate records. The copy he offers in evidence, and upon which he estimates the number of property-owning families in New York City, contains 37 j^ per cent, fewer names than the original records contain. By not taking the female property owners into account, out of every five deceased property owners he omits two. Out of every 100 he omits thirty-seven. Therefore, Dr. Spahr's handling of the Surrogate records for America's great metropolis exaggerates the number of poor, and makes the property-holding class appear very much smaller than it really is. In short, the data omitted by Dr. Spahr render his calculation absolutely valueless so far as it relates to the distribution of wealth in the city of New York. CHAPTER VIII. THE COUNTRY AT LARGE. To ascertain the general distribution of wealth. Dr. Spahr rehes upon certain localities, which he regards as typical of the whole country. Regarding his canvass of thirty-six counties in the State of New York in 1892, he writes (see pages 62-3 of his work) as follows : " The Surrogate records in many of these are most incomplete. Where every one knows to whom real estate belongs, it is not so 253 THE LABORER AND THE CAPITALIST. essential that estates containing only realty shall pass through the Probate Court in order that the title of the heirs may be unques- tioned. Furthermore, in some of these counties it was found that no statement had been required of the value of the realty in the estates which were brought into the courts. Fortunately, how- ever, in a few farming counties, the records were in good condi- tion, and the best brought out clearly what the others indicated. The returns were as follows for five typical counties, containing no city and no village of over 4,000 people : " RECORD FOR MADISON, HERKIMER, WYOMING, CHENANGO, AND SCHOHARIE COUNTIES, OCTOBER TO DECEMBER, 1892. Number. Realty. Personality. Total. $50,000 and over 3 $ 56,000 1195,000 $251,000 150,000 to 15,000 60 334,475 288,688 623,163 Under $5,000 149 243,525 221,733 465,258 202 $634,000 $705,421 $1,339,421 " As the number of families was but 38,000, the record showed that nearly three- fourths of them owned registered property." This calculation makes it appear that, in the five counties named, there are only three estates to every four families. But, fortunately, we have data that clearly demonstrate the fallacy of that proposition. Let us examine. The death rate in the community where the estates were probated must be relied upon to test the accuracy of Dr. Spahr's calculation. The annual death rate in the cities of New York and Brooklyn was, according- to the eleventh census, 27.55 to every one thousand of the population, or 2 3-4 per cent. In New York State, outside of the cities of New York and Brooklyn, the annual death rate was 16.08 254 THE LABORER AND THE CAPITALIST. to every one thousand o£ tlie population, or 1 6-10 per cent., and in the nation at larg-e the animal death rate was 14.10 to every one thousand of the population, or 1 4-10 per cent. The counties selected by Dr. Spahr, viz., Madison, Herkimer, Wyoming', Cheiiang-o, and Schoharie, are, as he says, purely agricultural, containing no city or village of over 4,000 inhabitants. These counties are also healthful above the average, therefore the death rate is low; undoubtedly lower than in the State at large, where all the cities are included. However, we will place the death rate in the aforesaid counties at 16.08 to each thousand of the population, or 1 6-10 per cent., which cor- responds to the average death rate in New York State out- side of the cities of New York and Brooklyn. The population of the aforesaid five counties, according to the State enumeration made in 1892 (see World Almanac, 1896, p. 373), was 187,3325 which, divided by five, gives us 37,466 families, which is 534 less than Dr, Spahr's estimate of 38,000. However, we will let his estimate stand for the families of the five counties. If the death rate was normal (1 6-10 per cent.), the year 1892 witnessed the death of 3,012 persons in the five coun- ties. If 202 estates were probated in three months, or 808 during the year, as Dr. Spahr's table indicates, the number of probated estates was to the number of deaths as 1 to 3 72-100, or, allowing five persons to a family, the number of estates to the niunber of families would be as 5 to 3 72-100, or 51,075 registered estates to 38,000 families. Therefore, instead of it being true that the probate records 255 THE LABORER AND THE CAPITALIST indicated that the number of registered estates in the afore- said counties were one-fourth less than the number of f ami- Hes, they indicated that the number of estates was one-third greater than the number of famihes. Or, to state the same proposition in still another way, Dr. Spahr's deduction from the Surrosrate records is that the five counties named have only 29,500 registered estates, while I deduce from the same records that these counties have 51,075 registered estates. Difference in calculations, 21,575, or about 73 per cent. The difference in our calculations results from the difference in estimating the death rate. Dr. Spahr must have figured, undoubtedly through oversight, the death rate for those counties at about 27 40-100 to every 1,000 of the population, which is approximately the rate in New York City and Brooklyn. But it is 73 per cent, too high for the rural districts of New York State. This, you see, must throw him 73 per cent, out of the way in his estimate of the number of property holders indicated by the estates probated. In other words, by reckoning the death rate 73 per cent, too high, he has estimated the registered estates 73 per cent, too low. But, suppose Dr. Spahr had estimated the death rate cor- rectly, what would have been the result of his figures? What has been the result of my figiu'es ? Have I learned sufficient about the number of estates to be able to form a satisfactory opinion regarding the comparative amount of property in the hands of the different classes of people in the counties named ? Not at all ; I have learned that Dr. Spahr's estimate of the number of property holders is too 256 THE LABORER AND THE CAPITALIST. low. But the element in the problem — the one set of figures that would lead to positive knowledge or enable me to ap- proximate the comparative holdings o£ the different classes of people in the aforesaid counties — is entirely absent from the Surrogate records. I refer to the estates of deceased per- sons that do not pass through the Surrogate Courts. Unless I have a tolerably perfect knowledge of the number and total amount of these. I have no index to either the whole num- ber of estates or the proportionate value of property held by the two classes commonly denominated rich and poor. A word from Dr. Spahr shall introduce the remainder of my arguments upon the Surrogate record theory. On pages Qt4r-5 of his work, he has written as follows : " The small holdings of real estate should be increased about one- half, because of the failure to record real estate in rural counties. It is chiefly the small holdings of realty that fail to be recorded." The fact that small holdings are not as generally pro- bated as the larger has a meaning of very great importance, which I shall consider more at length further on. On page 69 of his work Dr. Spahr writes as follows : " Less than half the families in America are propertyless. Nevertheless seven-eighths of the families hold but one-eighth of the national wealth, while one per cent, of the families hold more than the remaining ninety-nine." Following the above statement is a foot-note, in which the doctor says : " Since the completion of this study, a volume has appeared which must set at rest all question as to the extreme moderation of the estimates reached." 257 THE LABORER AND THE CAPITALIST. The volume referred to by Dr. Spahr, and which he thinks must set at rest all question as to the extreme mod- eration of his estimates, is the report of the Massachusetts Labor Bureau. He quotes from Part II of the Report of that Bureau for 1894, showing the number of estates pro- bated in the three years 1889, 1890, and 1891, to have been 14,608, and the value thereof $155,558,788. My claim is not that the Surrogate records are false in themselves, or that they do not seuve the purpose for which they are kept, viz., to establish the validity of claims, as for example : When an owner of an estate dies, with or without a will, if the estate be of the larger class, the heirs naturally desire such a public record of the way the prop- erty is divided, that their legal claim to a specified portion or piece thereof cannot be questioned in the future. AVith the smaller estates, a public record is not so important ; in fact, it is as Dr. Spahr has stated, in substance (see quotation, page 258). Owing to the lesser amount involved, the heirs are more likely to settle matters among themselves, and the Surrogate Courts are less frequently employed. Then, too, consider how many estates are disposed of by deed, etc., when death is supposed to be nearing. Within the last few days a New York physician remarked of a pa- tient that he had transferred his property in anticipation of his demise. Of the great number of estates disposed of in this way, the Surrogate Courts have no record. This fact, coupled with the further fact that the smaller estates fail to be probated much oftener than the larger, is suffi- cient to show the worthlessness of the Surrogate records in 258 THE LABORER AND THE CAPITALIST. a discussion like this. Yet the following argument will be useful as a mathematical demonstration, to wit : We knovr from unquestioned and unquestionable statistics that the average length of life in the United States is about 33 1-3 years, which means that death compels all the wealth of the country to pass from owners to heirs approximately once in the course of every 33 1-3 years. This is at the rate of 3 per cent, per annum for all property. Now, the value of the State of Massachusetts in the years named by Dr. Spahr was, according to the census of 1890, $2,803,645,447 (see abstract 11th census, page 192). Ac- cording to Dr. Spahr, there passed through her Surrogate Courts during these three years the sum of $155,558,788; or, $51,852,929 per annum. But mark you, death dis- tributed to heirs in Massachusetts during these same three years the sum of $252,328,090, or $84,109,363 per annum. Therefore, we see that about 38 per cent, of the value of the estates in question was not probated. In other words, for every ten thousand dollars of the property of deceased persons that passed to the heirs through the Sur- rogate Courts of Massachusetts during the three years named there were about six thousand two hundred and twenty dollars that reached the heirs without passing through the Surrogate Court ; thus demonstrating even to a mathematical certainty, that only a little more than three- fifths (62 per cent.) of the property of deceased persons passes through the Surrogate Courts, even in the sturdy and thoroughgoing old commonwealth of Massachusetts. Now, when we thoughtfully consider this fact, together 259 THE LABORER AND THE CAPITALIST. with the further fact that the property that fails to be re- corded in the Surrogate Courts is very generally the hold- ings of the poorer classes, we are not left to guess, or con- jecture ; we know that the Surrogate Courts which have no account of either the number of estates, or the proportion of the people's property that is never probated, cannot be relied upon to indicate the comparative amount of wealth now in the hands of the different classes of American citi- zens. However, as a chncher for his Surrogate argument, Dr. Spahr has quoted a table from the report of the Massachu- setts Labor Bureau. It is the report previously referred to which he regards as certain to set all question to rest as regards the moderation of his estimates. It appears on page 69 of his work as follows : "INVENTORIED ESTATES IN MASSACHUSETTS, 1889-1891. Number. Value. Under $5,000, . . . 10,152 116,889,479 15,000 to 50,000, . . . 3,947 53,489,893 50,000 and over, ... 509 85,179,516 14,608 $155,558,788" The most important part of Dr. Spahr's remarks concern- ing this table are as f oUows : " The estates of $50,000 and over aggregated 55 per cent, of the total amount of property ; while estates less than $5,000 ag- gregated but 11 per cent, of the total. Additional value is given to this Massachusetts report by the fact that a similar investiga- tion was made of the probate records for the years 1879-1891, 1859-1861, and 1829-1831, and the results pubhshed." 260 THE LABORER AND THE CAPITALIST. Take notice the records quoted by Dr. Spahr are, accord- ing to his understanding, rendered more important by the fact that similar investigations have taken place before, and the facts pubhshed. Candidly, reader, of what value are such reports, since the records investigated have no data concerning at least 38 per cent, of the property of deceased persons. Nevertheless, Dr. Spahr has made his calculation for the distribution of wealth throughout the entire country from precisely this kind of data. On page 66 of his work he writes as follows : " The proportion holding over $50,000 is exceptionally great in large cities, and exceptionally small in the country districts, but the proportion in the intermediate territory selected may be safely assumed for the entire nation. The table for the nation at largfe would therefore read : Number of Aggregate Famihes. Wealth. $50,000 and over, . 125,000 $33,000,000,000 $50,000 to $5,000, . . 1,375,000 23,000,000,000 Under $5,000, . . 11,000,000 9,000,000,000 12,500,000 $65,000,000,000" Of course, this table does not take into account, as his former tables have failed to recognize, the 38 per cent, of the property of deceased persons that does not appear upon the Surrogate records. Then, too, it makes a wonderful difference with the appearance of results where the separat- ing points are placed. Let us now have a table with the 38 per cent, added, less |1,221,011, which we will allow to the larger estates, some 2GL THE LABORER AND THE CAPITALIST. of which may also fail to be probated. This addition will change the ratio of property between the larger and smaller holders amazingl}^ Also let us place the separating points nearer together, and then study the results in comparison with Dr. Spahr's final calculation. I offer the following table as approximating the present distribution of wealth in the United States : Under $10,000 $32,500,000,000 50 per cent $10,000 to $50,000 10,400,000,000 16 " " 50,000 to 100,000 4,875,000,000 7 1-2 " " 100,000 to 200,000 4,875,000,000 7 1-2 " " 200,000 to 500,000 6,175,000,000 9 1-2 " " 500,000 to 1,000,000 2,275,000,000 3 1-2 " " 1,000,000 and above. 3,900,000,000 6 « " $65,000,000,000 100 ])er cent These figures absolutely reverse Dr. Spahr's table, but it is simply and entirely the result of recognizing data which he has unfortunately overlooked, and of placing the separat- ing points where he has not. In other words making the divisions and allotting to each class what surely belongs to it, so that the reader gets a true and not a false or exag^ gerated idea of the distribution of wealth among the prop- erty holding people. Instead of the masses owning so much less, as one would infer from Dr. Spahr's table, they own eight times more than the very richest class, fourteen times more than the second richest class, four times more than the third richest class, nearly seven times more than the fourth richest class, and we wiU let the story end with 262 THE LABORER AND THE CAPITALIST. the repetition o£ the glorious truth that that class o£ our people whose individual estates amount to ten thousand dollars and less, own a share of the national wealth, aggre- gating, to say the least, as much as the wealth of all other classes combined. Those Yv'ho are sufficiently awake to the situation to reahze the possible consequences of the increasing unrest arising from the belief that the masses are poorer because a few are rich, will be glad to know that our calculation regard- ing the distribution of wealth does not differ very ma- terially from a calculation by the Chief Engineer of the Geological Survey for the eleventh census. I refer to Henry Gannett. In his work, " The Building of a Nation," he computes the wealth of the United States in 1890 at $62,600,000,000 which he says is in the hands of the dif- ferent classes of our people, as follows : Millionaires ....... 5 per cent. 1100,000 to 11,000,000 . . . . 27 " « 10,000 to 100,000 .... 25 « « 1,000 to 10 000 .... 37 " " 1,000 and less 6 " « It win be observed that Mr. Gannett's calculation shows those owning less than one thousand dollars to possess more wealth in the aggregate than the very rich (the millionaires), while only 32 per cent, is found in estates above one hun- dred thousand dollars. In fact, if Mr. Gannett had made seven divisions of his table, as we have done, it would have read nearly the same as ours, which was made without any reference to his. 263 THE LABORER AND THE CAPITALIST. Now as to Mr. Gannett's calculation and that of Dr. Spahr's — one is based upon the Census reports rendered by officers o£ the Government, sworn to canvass every citizen of the United States and learn the value of all property ; the other is based upon Surrogate records, which as a rule have no account of a very important percentage of the smaller holdings. CHAPTER IX. RAILROADS AND FARMS. On page 40 of Dr. Spahr's work I find the following : " The financial legislation and the tax legislation of the Na- tional Government have, however, been but two of the three great causes which have operated for the concentration of wealth during the present generation. Prior to the Rebellion, the railroads counted next to nothing in the national stock-taking. The greater part of the property of the country was still upon the farms. To-day the railroads alone count for half as much property as the farms ; and their securities are held exclusively in the cities." Wealth is concentrating in railroads at the expense of the rural districts, is Dr. Spahr's understanding of the case. Numerous other writers are advancing the same ideas, and the masses are as a rule indorsing them. Rail- road property is increasing rapidly, while the farming in- dustry languishes, is the verdict of common observation. For the sake of convenience, we will state figures in round nimibers in the following propositions. In 1860 the value of the railroads of the United States 204 THE LABORER AND THE CAPITALIST. was about two billion. I£ the ratio of their indebtedness was then what it has been for the last twenty years (about one-half) the railroad property of 1860 was about one billion clear of debt. In 1890 the railroads were valued at about eight billion (abstract of eleventh census, page 193) ; but their indebt- edness amounted to about five billion, leaving the railroads of 1890 worth about three biUion clear of debt; an in- crease from 1860 to 1890 of about 200 per cent. The farm property of the country in 1860 amounted to about seven biUion clear of debt. In 1890 farm property amounted to about fourteen bilHon clear of debt. In other words, while the railroads gained two biUion clear, the farms gained seven billion. But the fact must not be overlooked that a tremendous war had taken place, which had resulted in great financial loss, for the time at least, to a large section of the country, which is almost exclusively agricultural. The year 1870 found the South with $3,300,000,000 less property than it had in 1860. From 1850 to 1860, the South had gained in wealth at exactly the same rate as the rest of the country ; therefore, had it not been for the war, her gain from 1860 to 1870 would have been $6,200,000,000. Instead of that, how- ever, she gained nothing, but lost $3,300,000,000, making a difference against the South of nine and one-half bilHon, If we allow one and a liaH billion of this to Southern cities, eight billion are left to be added to the property of 265 THE LABORER AND THE CAPITALIST. the rural districts, which would make a clear of debt increase of $14,800,000,000, or 213 per cent. In other words, all other things being* equal and nothing extraordi- nary happening to either, the net increase in farms and farm property during the thirty years in question, has been about 13 per cent, greater than in that of railroad property. No pretension is made to accuracy in this calculation, yet it approximates the truth very closely. There has been stock watering among the railroads, sometimes justly, some- times unjustly, and money has found its way into the wrong pockets, and no doubt some men have become wealthy in that way. Yet, as a rule, railroads have not been exception- ally profitable to their owners, to say the least, while in very many cases they have been exceedingly dis- astrous. And when it is claimed that railroads, as a rule, are getting an undue proportion of the general income, the claim is not only unsupported by any reliable data, but it is absolutely contradicted by the experience of more than half a century. To those who insist that the railroads are absorbing the wealth of the country, I will submit the fol- lowing from the most distinguished statistician of modern times. I refer to Mulhall. On page 500 of his Dictionary, he writes as follows : " It may be roughly estimated that railroads, as a rule, have caused a saving to the public of each country equal to at least 10 per cent, per annum on the cost of construction." Take notice : The total cost of construction of railroads in the United States up to 1896, has amounted to about 1 9,861 ,000,000. And the 10 per cent, annual saving to 266 THE LABORER AND THE CAPITALIST. the people amounts to $986,000,000 per annum ; which in the course o£ every ten years equals the total value of all the railroads. Again, when we consider all the business transacted by the railroads and the profits accruing to them thereon, as we deduce them from "Poor's Manual of Railroads," we find that the stockholders of those roads receive profits of one cent for carrying a passenger seven miles, while a ton of freight is moved seventeen and a half miles for a profit of one cent, the balance of the prodigious sum of money paid by the people to the railroads for freight and fares going to pay fixed charges, and to defray expenses of one kind and another. And finally it ought to be stated that the highest dividends ever declared by the American rail- roads was in the year 1892, when they amounted to $95,- 662,412. In other words, in the most prosperous year our railroad owners have ever known, their efforts and invest- ments resulted in a gain of $10 to the public for every $1 that went into their own pockets. If this is concentrating the wealth of the country, farms or what not, in the hands of railroad owners, I confess I have not the ability to see it. CHAPTER X. RENTED FARMS. Dr. Spahr has emphasized the familiar rented-farm ar- gument by quoting competent authority (government sta- tistics) showing the growing increase in the number of rented farms, and of farm tenants. Rented farms furnish 267 THE LABORER AND THE CAPITALIST. a plausible and convincing argument for those who insist that the condition of the masses is growing less and less hopeful as compared with that of the capitalists. There are more tenant farmers than formerly, but it is important to consider that the greater the number who come to desire farms, and the more successful in saving money farm hands become, the larger the number who will sooner or later become tenant farmers, not permanently of course, but then, a rented farm is a stepping-stone to the ownership of a farm. Again, consider that about fourteen per cent, of our immigrants are farmers from the old world, Avho, as a rule, are obliged to be tenants before they can become owners; and right here, mark you, is where we get a very large per- centage of our modern tenant farmers. Immigration amounted to nearly as much in the ten years from 1880 to 1890 as it had the preceding twenty years. In fact, if no other arguments were offered, the influx of foreign farmers, who are unable to buy in the first instance, would nearly, if not entirely, account for the increase of tenant farmers in the United States. Note what a great number of Vermont and New Hampshire farms are being let every year to people from across the Canada line, for example ; and who is not famihar with the fact (if he has taken the trouble to observe and think) that a very great majority of the tenant farmers of the West are comparatively fresh from the farms of other countries. However, the popular tenant-farm argument is totally annihilated by the fact that the increase in the number of 268 THE LABORER AND THE CAPITALIST. farm owners more than keeps pace with the increase in the farming population (Census, 1890), which proves to a mathe- matical certainty that if more farms are rented, it is not be- cause former farmers are becoming tenants, but because more people are demanding farms or engaging in the farm- ing business, who have not yet gathered sufficient means to purchase for themselves, but have enough to enable them to become part owners, at least, in the stock of a farm, its machinery, etc. Therefore, generally speaking, a rented farm in this country indicates not that the occupant has been reduced from proprietor to tenant, but that he is mak- ing headway toward the ownership of a farm. I was once powerfully affected by the rented-farm argu- ment. I Hved in the West and saw many farms pass into the hands of money-loaners, and it seemed to me perfectly clear that capitalists were absorbing the wealth of the masses ; that of farmers especially. But when I resorted to a statistical investigation, as before explained, I soon dis- covered that a larger percentage of money-loaners, bankers, etc., were failing than of farmers. This was a great reve- lation to me, and an incentive to continue my investiga- tion, through which I discovered that the percentage of failures was also much greater among manufacturers and merchants than among farmers. And from this I know, that whatever of disaster or failure has come upon the business of the country, the farmers are stenmiing the tide as successfully, to say the least, as any other class of our people, manufacturers, merchants, and money-loaners not excepted. 269 THE LABORER AND THE CAPITALIST. CHAPTER XI. THE FALL OF WAGES. I must here repeat what I have so often said in this work, to wit : The one great cause of the existing differences between the laborer and the capitahst is the lack of knowl- edge regarding the economic relations of one to the other, and the omission of data by honest but misled writers that would certainly lead to opinions very different from those which now dominate the public mind. It wiU not be amiss to also repeat that this lack of knowledge appears to be about as general in one class of the community as in another; among competent writers as among those who could not write if they tried. Take notice : Dr. Spahr remarks that wages have fallen within a certain period, and he also comments on the fact that labor is not well employed at the present time. He introduces these arguments to prove that labor is getting a smaller and smaller share of the general income. I think he estimates the falling off in the income of labor from these causes in recent years to be about twenty per cent. He omits to state, however, that the profits of capital and the rates of interest have fallen in quite as large a ratio. How could it be otherwise when the income of capital and labor are, as a whole, and in the long run, absolutely dependent upon each other. Where does labor get employment, as a whole, if capital does not furnish it ? How can capital flourish as a whole except labor buys its goods ? 270 THE LABORER AND THE CAPITALIST. We are now passing through a business crisis and labor is not as well employed, neither does it receive as large an income as usual. But what of it? When capital is all em- ployed, labor is all employed, and it must therefore follow that whatever percentage of labor is unemployed has resulted from a like percentage of capital being unemployed, which can have no other effect than to lesseu the income of capital. Therefore, instead of the falling off in the earnings of labor proving that capital is getting a larger share of the general income, it only proves that capital is suffering equally with labor. This proposition is absolutely unquestionable from the fact, before explained, that the laborer is never idle when the capitalist can see any profit in employing him. CHAPTER XII. THE POOR IN CITIES. On page 50 of Dr. Spahr's work, I find the following : " That the cities to-day, like the Southern States a generation ago, are the centers of extreme poverty as well as of extreme wealth, is a matter of common observation." That our cities contain great wealth and much poverty is very certain. The radical school of economists attribute the cause to a wrong economic system, through which the few rob the many. I attribute the cause, as before explained, mainly to the influx of immigrants from the poorer districts of the old world. Some writers have made an attempt to show that foreigners are as generally property-owners as native Americans. This proposition, however, is too palpably 271 THE LABORER AND THE CAPITALIST. inconsistent to need arguing. It is unquestionably true, tliat no insignificant proportion of our citizens of foreign parentage are property-holders and compare favorably with native Americans in intelligence and in all the essential qualities of good citizenship ; but to claim that, as a rule, the foreigners are as generally property-holders as the natives, is to assume that they are naturally very much the superior of Americans in industry, in economy, and in calculation. For certain it is, that, for the most part of their lives, a large majority of our foreign population have had no such opportunity to acquire wealth as the native Americans have had. And the same is true of a large majority of our colored citizens ; they are comparatively new from a kind of life which was by no means calculated to develop property-gaining talent. In the census of 1890 the occupations of immigrants are classified as follows : "Professional occupations . . 1 per cent. Traders and dealers ... 3 per cent. Farmers 14 per cent. Household servants ... 9 per cent. Skilled labor . . . . 20 per cent. Unskilled labor . . . .53 per cent." It will be observed that if we throw the farmers entirely out of the wage-earning class, there remains 82 out of every 100 immigrants practically without property. Ac- cording to same census, out of every 57 of the paupers of the country, 9 were colored, 9 were born of foreign parents, 30 were born in foreign countries, and but 9 were native white Americans. 272 THE LABORER AND THE CAPITALIST. From this we see that 84 out of every hundred paupers in the United States are either colored, foreign born, or born of foreign parents. Again, the eleventh census says that in New York and Chicago practically four-fifths of the population in 1890 were of foreign parentage ; 80.46 per cent, for New York ; 77.90 per cent, for Chicago. In Milwaukee the proportion of foreign population was still greater, being 86.36 per cent. In Philadelphia it was 71.40 per cent. ; Brooklyn, 67.46 per cent. ; Boston, 67.95 per cent. Seventeen of our principal cities have an average of over 75 per cent. It would be a low estimate to say that more than three-fourths of the population of twenty-five of our largest cities is made up of colored people and those born of foreign parents. But the greatest cause of poverty in cities as I have be- fore shown is due to intemperance. There are 218,874 sa- loons in the United States, or one saloon to every 310 of the population. These saloons are principrJly in the cities. New York has one saloon to every 236 of the population. Some of the poorer parts of the city have a saloon for every 175 of the population, or one for every thirty-five families, and it appears almost superfluous to repeat what I have said before and what is so generally understood, to wit, that not a few of the patrons of these saloons are spending more money for liquor than they spend forfood,rent, and clothing. The treatment given this subject in the earlier part of this work renders it unnecessarv to 2:0 into detail here, yet it woidd be little less than criminal to omit a statement made by the Massachusetts Labor Bureau, 1893. This bu- 273 THE LABORER AND THE CAPITALIST. reau made a special investigation of the localities in Boston where the poorer tenement-houses are located, one of the objects being to learn, as far as possible, " why the tenants of the poorer houses remain in undesirable conditions." Waldron's Hand Book, page 31, refers to the table com- piled by the aforesaid bureau as follows : '♦ The . . . table shows, as a result of the inquiry, that more than 42 per cent, of these people live in bad tenements primarily because of intemperance." The tremendous facts above quoted tell their own story. And may I not ask in the name of common sense, and com- mon honesty, if, when we consider that more than 85 per cent, of the foreign and colored element (outside of the Southern States) is confined to our cities, and to this add the further fact that 42 per cent, of those Hving in the poorer tenement houses confess their poverty to be due to intemperance ; when we combine all these facts, I say, have we not abundant reason for the great number of poor people in our cities, without attaching even the shghtest blame to our economic system ? CHAPTER Xin. TAXES. There is another production on the concentration of wealth which I feel disposed to notice in this essay. Like Dr. Spahr's work, it has been quoted approvingly in the National Legislature and by not a few of oar speakers and literary pubhcations. I refer to an article by Thomas G. 274 THE LABORER AND THE CAPITALIST. Shearman on pages 269-270 of the Forum for November, 1889. The tremendous rate at which Mr. Shearman thinks he sees the wealth of the country concentrating in the hands of a few through the tax or draft made upon labor by capital, may be imagined from a statement by him in the aforesaid magazine. He says : "Within thirty years, the present method of taxation being continued, the United States of America will be substantially owned by less than 50,000 jjersons, constituting less than one in five hundred of the adult male population." In another part of Mr. Shearman's article he writes as follows : " The wealth of the very rich is always more imderestimated by assessors than that of men in moderate circumstances. Assess- ments of $400,000 and over are therefore multiplied in the next table by two and one-half, while those below that hue are only doubled." Mr. Shearman has started out to prove the concentration of wealth, and he begins to lay his foundation by assuming that the property of the rich is estimated exceptionally lov,^ by assessors. He therefore multiplies the assessor's esti- mates by two and one-half, etc., as he has explained in the above quotation, and upon this basis he figures out a con- centration of wealth that is truly startling. The under- valuation of the rich man's property by assessors, is a very general complaint among men of Mr. Shearman's way of thinking, and very serious complaints are brought against property holders on that ground. They are accused of ^75 THE LABORER AND THE CAPITALIST. bribing assessors and o£ employing other disbonorable means to shift the burden o£ taxation from their own shoulders to the shoulders of their neighbors. That there are wealthy individuals who would and who do accomplish just that thing, I do not doubt ; and that there are assess- ors guilty of knowingly underestimating property, I feel to be unquestionable. Indeed, some are now before the courts of New York charged with that offense. However, it would be very diffi.cult for assessors to generally under- estimate the property of the wealthier class of people, and not be detected and punished, for the very good reason that everybody knows that when his neighbor's property is assessed too low, the burden falls that much heavier on him, and he watches the tax list and assessments with a jealous eye. Again, the general undervaluation of the larger proper- ties of the country could not result in a general saving to their owners, for the all-sufficient reason that as assess- ments are crowded down, tax rates are bound to rise, as for example : New York City is obliged to raise thirty-five mill- ions of dollars more or less, annually, to defray city ex- penses, and the tax rate is, say, two per cent. But the property holders induce assessors to estimate their holdings fifty per cent, lower than last year, or below what it ought to be — the tax rate must then be raised to four per cent., for the city must collect a certain amount of money from her citizens, and by as much as the rate of assessment is lowered, by precisely that much must the tax-rate be raised. A.S a whole, capital can no more gain by crowding assess- 276 THE LABORER AND THE CAPITALIST. ments down than a man can lift himself into the air by pulHng at his bootstraps. But leaving this all out of the question. What right has Mr. Shearman to assume that the property of the very rich is more generally underestimated than that of the moder- ately rich or the comfortably well-to-do ? A tax assessor recently told me that he had found that people of compari- tively small means were just as anxious to conceal their property or to report it low (so as to be obliged to pay the smallest possible amount of tax) as the richer were. Why should they not be ? A hundred or a thousand is as pre- cious to the possessor of small means as greater amounts are to the possessors of larger means. But, strange as it may appear at first glance, there is a very decided reason why the wealth of rich people is more generally over-esti- mated than that of those whose possessions are smaller. I will introduce my first argument upon this point with a quotation from a work, " The Distribution of Wealth," by J. R. Commons, Professor of Economics and Social Science, Indiana University (1893). On page 257, Professor Com- mons quotes Mr. F. C. Waite, special agent of the Eleventh Census in charge of " True Wealth," as follows : " The monopolistic value of land, i.e. : — the unearned increment, equaled in 1890 about $25,000,000,000. This enormous land value is largely made up of inflation, resulting from the fact that owners and buyers expect to continue pihng increase on increase year after year. In some sections almost every dollar of these in- flated values are liable to vanish when a great commercial crisis, like that now brewing, sweeps across our continent." 277 THE LABORER AND THE CAPITALIST. This statement of the special agent of the eleventh cen- sus reoardinof true wealth is full of meaninar. No small proportion of the estimated wealth of the rich consists of just such inflated land values as Mr. Waite has described. Not only this, but mines, ranches, bonds, and mortgages based upon fictitious values are held by the reputed rich in immense amounts. I notice that the savings banks of the one State of New Hampshire, notwithstanding the great care they take, and are obliged by law to take, in the selec- tion of their securities, have lately lost over four millions through investing in bonds and mortgages, the value of which was supposed to be real, but which proved to be largely imaginary. Again, consider the lesson taught by the failure of re- puted wealthy men and business firms. In the last seven years the liabilities from failures have amounted to ^1,288,- 000,000. More than one-half of this is dead loss to failing capitalists ; and if we go back twenty-five years, the actual loss, or deficit, has amounted to a sum equal to the value of the State of Massachusetts, with her immense factories, her rich cities, her ships, her railroads ; in fact, all the ac- cumulations of her industrious sous and daughters since the landing of the Pilgrims on Plymouth Rock. This vast sum has been credited to our rich and comparatively rich men, manufacturers and traders, but really these people were not v^orth it. If they ever possessed it, it had been paid to labor for services performed in one way or another, as be- fore explained. As a matter of fact we generally overesti- mate the value of our wealthier neighbor's property, espe- THE LABORER AND THE CAPITALIST. eially if they are doing a large business. And not a few of these people have allowed themselves to be assessed for more capital than they had for the sake of the credit it gave them in business circles. Of course, it cannot be conjec- tured how much such overvaluation amounts to as a whole. Nevertheless the history of failures has given us a hint worth noting, and it may be added that Bradstreet's Report for 1895 says that 27 per cent, of all who failed in 1893 and 1894 had been reported in good standing ; that is, 27 out of every 100 failing firms and individuals have been estimated, even by the careful agents of Bradstreefs, as worth very much more than they really were. This fact alone ought and will, if properly considered, do much to rid the public mind of a great fallacy. In short, I regard the foregoing facts and history as sufficient to warrant the conclusion that the property of the reputed rich is more generally overestimated than that of any other class of people. CHAPTER XIV. TAX LISTS COMPARED. Mr. Shearman, after having estimated American wealth upon the basis of English statistics, writes as follows : " Objections will doubtless be made to any estimates based upon British statistics. Fortvmately Massachusetts furnishes a purely American basis for estimates of the distribution of American wealth. A list of the largest individual tax-payers in Boston, published this year, including all (exclusive of corporations and executors) v^ho paid more than $1,000 in taxes, and who were 279 THE LABORER AND THE CAPITALIST. therefore assessed at more than 175,000 (the tax being 1 1-3 per cent.) showed the following results : BOSTON TAX LIST, 1888. Individual Tax Payers. Number. Amount of Tax. Average Assessed Wei 2 $50,000 to 75,000 $4,600,000 4 40,000 to 50,000 3,205,450 3 30,000 to 40,000 2,732,570 8 20,000 to 30,000 1,840,000 39 10,000 to 20,000 930,000 133 5,000 to 10,000 500,000 1,065 1,000 to 5,000 160,000" Following this table, Mr. Shearman says : " It may be safely assumed that every one who is assessed at ),000, is really worth one million, etc." He proceeds with his reckoning and deductions upon that basis. Nevertheless, since he takes Boston tax lists for his basis, he will undoubtedly admit that Boston tax lists are likely to be as reliable at one time as at another. It will be readily seen, therefore, that a comparison of the lists of the later period with that of an earlier will show whether or not wealth has really concentrated. I am glad to be able to state that I have carefully ex- amined the Boston tax list for 1821, and taken account of the individual holdings and the taxes paid by the citizens of Boston in that year, and with the following results, as compared with Mr. Shearman's tax lists for 1888. 280 THE LABORER AND THE CAPITALIST. Before the comparison is made, however, we need to note an explanation which appears on page 60 o£ the ap- pendix to the Boston census of 1845, as follows : "In 1842 the tax was first assessed upon the full valuation. For many years previous to that, the valuation was entered upon the assessor's records at half its real value, and the taxes assessed on that amount. To present the facts uniformly in this table the valuation has been doubled and the rate of taxation halved, in the years before 1842." Boston is now assessed at its full valuation, but it will be seen by this explanation that in 1821 Boston was assessed at one-half, instead of its fuU valuation. And from this we see that in order to get a just comparison between any date previous to 1842 and a later period, the prior assessment should be doubled, as explained in the assessors, note above quoted. In 1888, the two largest tax payers heading Mr. Shear- man's Hst, their wealth averaging $4,600,000 each, owned 1.14 per cent, of the assessed valuation of the city of Boston, while in 1821 the two largest tax payers, their wealth averag- ing $513,400 each, owned 2.54 per cent, of the city of Boston. In other words, the two richest men of Boston in 1821 owned 123 per cent, more of the city than was owned by the two richest men in 1888. Or if we select the nine richest individuals whom Mr. Shearman has placed at the head of his list, comprising all above $2,250,000, we find that they owned 3.75 per cent, of the assessed valuation of the city of Boston in 1888, while in 1821 the nine richest individuals, comprising all 281 THE LABORER AND THE CAPITALIST. above $280,000,owned 8.52 per cent, of the value of Boston. Or if we take fifty-six of Mr. Shearman's richestjCompris- ing all over $750,000 each, we find that in 1888 these fifty-six individuals owned 10.08 per cent, of the city of Boston's assessed valuation, while in 1821 the fifty-six richest men owned 19.90 per cent, of the assessed valuation of the city. Or to state the same proposition in still another v^diy, fifteen of Boston's richest citizens owned a larger proportion of her wealth in 1821 than was owned by i\\Q fifty -six richest citizens whose wealth is tabulated in Mr. Shearman's list for 1888. This does not look as if the property of Boston was rushing into the hands of a few. On the contrary, it shows that the wealth of the city was very much more generally diffused in 1888 than it had been in 1821. Dr. Spahr has made reference to a Boston tax list of another date which I am glad to notice. On page 33 of his work, he says : "The Boston tax lists for 1845 show two hundred and seven- teen holdings of more than one hundred thousand dollars worth of property (real and personal)." Not doubting the correctness of Dr. Spahr's statement regarding the holdings of the richest 217 citizens of Boston in 1845, I quote for the purpose of making a comparison of the larger holdings of that date with those of 1888, the year selected by Mr. Shearman. I have not the Boston tax fist for 1845 before me. In fact, I do not need it, since I rely upon Dr. Spahr's data, but I have that of 1851. Taking the proportions of wealth 282 THE LABORER AND THE CAPITALIST. then existing as a basis, Dr. Spahr's list of 217 individuals worth over ^100,000 each would indicate 333 individuals worth over $75,000 in 1845, averaging- $163,976 to each individual and aggregating $54,604,712, the same being 39.77 per cent, of Boston's wealth. The hst of 1888, ac- cording to Mr. Shearman, shows 1,254 individuals worth $75,000 and over, averaging $253,756, aggregating $318,- 109,510, or 39.48 per cent, of the city's wealth. That is, the same proportion (.00291) of population owned a larger proportion of the city's wealth in 1845 than in 1888, or to state the same blessed truth in a way more easily under- stood, 333 of the richest citizens of Boston owned more of her aggregate wealth in 1845 than 1,254 of her richest citizens owned in 1888. Sunrise is not more certain than is the fact that wealth is very much more evenly distributed among the people at the present time than at any previous date within the last seventy years. 283 THE LABORER AND THE CAPITALIST. CHAPTER XV. MILLIONAIRES. While the question of millionaires has already been dis- cussed in this work, yet I have discovered certain other facts which impel me to take another brief notice of the subject. In his Forum article previously quoted, Thomas G. Shearman has produced a table in which a certain num- ber of people are credited with property as follows : "200 persons at 120,000,000 each 14,000,000,000 400 " '' 10,000,000 " . 4,000,000,000 1,000 « 5,000,000 « 6,000,000,000 2,000 2,500,000 " . 6,000,000,000 6,000 " " 1,000,000 " 6,000,000,000 124,000,000,000^' It will be observed that Mr. Shearman has estimated that 9,600 men are worth an average of f 2,500,000 each, or a total of $24,000,000,000. In a previous chapter of this work I estimated, or rather I conceded, that there might be four thousand individuals in the country, averag- ing one million each, and aggregating $4,000,000,000. Mr. Shearman's estimate of millionaires and their holdings are five hundred per cent, higher than mine. Yet I now be- lieve that I then conceded too much, and that there are not four thousand millionaires in the United States whose aggregate wealth amounts to $4,000,000,000. Now, reader, how shall we settle this question ? If you 284 THE LABORER AND THE CAPITALIST. wanted to ascertain the number o£ millionaires in the United States, and you knew that there were two political parties disputing over the matter, and one o£ these parties should send a broad challenge in every direction for the purpose of locating the millionaires, and publishing the list of the names received week after week for several months, always asking that the reports be corrected or new names for- warded from any quarter or locality, and finally pubHshing the Hst, publicly asserting that no more millionaires could be found ; and the opposing party, always on the alert to criticise, should fail to contradict or to suggest a single ad- ditional name, would you not conclude that about all the millionaires had been reported? The history of the course of the New York Tribune in this matter, and the results obtained, are well known (or ought to be well known) throughout the country. As al- ready stated, four thousand and forty-seven reputed million- aires were found. The same journal has since said, in sub- stance, however, that later reports, and the death, bank- ruptcy, etc., of several of those who had been reported as millionaires, but who proved to be comparatively without property, indicated that the Tribune list contained more names than the country had millionaires. But the most satisfactory evidence I have been able to find, and that which has convinced me beyond all doubt that when I conceded 4,000 millionaires with property ag- gregating $4,000,000,000 I was conceding too much, ap- pears in the Surrogate Records of Massachusetts, quoted by Dr. Spahr. As I have already stated, large estates 285 THE LABORER AND THE CAPITALIST. almost invariably pass through the Surrogate Courts. And while the absence of the smaller estates from the Surrogate records, and the lack of data concerning their number and total value, render Surrogate figures valueless so far as re- lates to the comparative amounts of property held by the rich and poor, yet those records are a tolerably good index to the number of large estates. The records quoted by Dr. Spahr show that during the three years 1889-1890-1891, estates of $500,000 and over, numbering thirty, aggregating $23,841,879, passed through the Surrogate Courts of Massachusetts. A simple arith- metical calculation demonstrates that no more than seven- teen holders of the above-mentioned thirty estates could have been millionaires — the number of estates, and the aggregate amount, settle that question. It foUows, there- fore (reckoning from the same basis), that Massachusetts had, in the years 1889-91, not to exceed one hundred and eighty-nine millionaires — that is, if we allow each to possess one million and no more. This, mark you, is one hundred and seven fewer millionaires than " common observation " reported to the Tribune from that State. In other words, the Tribune^ s estimate of the number of millionaires in the State of Massachusetts was at least 56 per cent, higher than the number indicated by her Surrogate records. The same proportions appHed to the country at large would indicate the number of millionaires in the United States to be 2,585, instead of 4,047, as per the guess of the Tribune^ s corre- spondents. Think of it, reader ! If this estimate is true, or if it ap- 286 THE LABORER AND THE CAPITALIST. proximates the truth, it annihilates the popular miUionaire theory, which has been one of the principal causes of so much hard feeling against large property holders, and given socialism such a tremendous impetus in this country. Nevertheless I submit the foregoing data v/ithout the slightest fear that it will ever be successfully attacked. CHAPTER XVI. THE WAY INCOMES ARE ESTIMATED. While I have given several examples of the way incomes are estimated by those who hold to the common observation theory, yet I have another illustration at hand which ought not be omitted. On page 122 of his work, referring to the results of an investigation previously made by the Labor Bureau of Massachusetts, Dr. Spahr says : "While 6,000 families occupied dwellings worth $150,000,000, 60,000 families occupied dwellings worth 190,000,000. On Leroy Beaulieu's basis, that the poorer and middle classes devote one-sixth of their income to their dwellings and the wealthiest one- ninth, this signified that in Boston, as in foreign cities, seven per cent, of the families receive half of the aggregate income." It will be observed that if Dr. Spahr is right in assuming that Leroy Beaulieu is right in assuming that the poorest and middle classes devote one-sixth of their income to their dwellings, and the wealthier classes one-ninth, it then fol- lows that a certain few families have an income so immense 287 THE LABORER AND THE CAPITALIST. as to render it certain that the division is wrong and the poorer classes robbed. However, at the end of the above quotation I find reference to a foot note which is intended to sfive more definite information and reads as follows : " The rentals and incomes of the 85,000 families in Boston would stand as follows : Apartments. Assessed Value of Rental Number. Property Occupied. Rental. Income. Under $300 60,000 $91,000,000 (at 10 p. e.) $9,000,000 $54,000,000 $300 to $900 19,000 112,000,000 (at 9 p. c.) 10,000,000 60,000,000 Above $900 6,000 153,000,000 (at 8 p. c.) 12,400,000 113,000,000 85,000 $227,000,000" It should be stated that Dr. Spahr does not assume that the sum that ajDpears under the title of Rental represents rent actually paid, but that those sums would ordinarily represent rental values, and from this he assumes that men occupying such houses would ordinarily be worth a certain amount of property, from which an income would be re- ceived approximately as tabulated in fifth column under the title Income. Following this table Dr. Spahr has made a statement that gives us a basis, from which we can de- termine with some degree of accurac}^ as to the correctness of his estimates. Referring to the richest 2,334 families in Boston, he writes as follows : " As they pay local taxes on $300,000,000 of real estate, an income of 175,000,000 would be about 7 per cent, on their proba- ble wealth. It is certain that these families receive at least one- third of the aggregate income." This gives us the data from which Dr. Spahr deduces the 288 THE LABORER AND THE CAPITALIST. incomes tabulated in the last column of the foregoing table, to wit: $75,000,000 is 7 per cent, on the wealth of the richest 2,334 families. In the foregoing table, however, he has tabulated the richest 6,000 Boston families, which, reckoning from his data, are worth ^1,614,285,714, which is about 90 per cent, more than the total valuation of the whole city at that date. Upon the same basis the next class below, numbering 19,000 f amihes, income $60,000,000, were worth a total of $857,142,857, which about equals the total wealth of Bos- ton at that time. While the third or poorest class, num- bering 60,000 families, with an income of $54,000,000, were upon the same basis worth $771,428,571, which sum is nearly equal to the total valuation of Boston at that date. Think it over. Dr. Spahr has made his calculations from a basis which, carried to its logical conclusion, and certain mathematical end, credits the citizens of Boston with wealth aggregating $3,242,857,142, which is nearly four times the city's wealth, and $440,000,000 more than the wealth of the entire State of Massachusetts. Every thoughtful reader will see how utterly fallacious such calculations are. Ac- cording to Dr. Spahr's third and last calculation, the 60,000 smallest rent payers in Boston are receiving $3 per day for every working day in the year. I think it would be diffi- cult to make Bostonians believe that 60,000 of their small- est rent payers are receiving an income of $3 per day. 289 THE LABORER AND THE CAPITALIST. CHAPTER XVII. FARMS AND CITIES. Probably no other set of facts is so generally and effectu- ally used to prove the concentration of wealth as that the rich are more numerous, and their fortunes larger, in the cities than in the rural districts. These, coupled with the no less notable fact that our cities are growing in wealth and population much faster than the country at large, has done much to generate the idea in the popular mind that there is a great disproportion of income in favor of the few. On page 46 of his work Dr. Spahr says : " The people on the farms and in the villages in the East have shared no more in the advancing wealth of the past quarter of a century than the people on the farms and in the villages of the South and West." On page 49, same work, a statement appears as follows : " We can hardly escape the conclusion that the average wealth of the families in the country districts does not exceed $3,250, while the average wealth of the families in the cities does exceed $9,000. When American political parties shall again divide upon issues vitally affecting the distribution of wealth, the clearly marked line of division will not be between East and West, but between city and country." The fact that the average wealth of the city is so much greater than that of the country districts is looked upon by Dr. Spahr as so strikingly indicative of a great inequality in the distribution of wealth and income, that he expects 290 THE LABORER AND THE CAPITALIST. the line of political controversy in the future conflict between capital and labor (so generally looked for by men of his faith) to be sharply drawn between the urban and rural population. That is, the time will come when the farming districts will say to the great cities : " Thou shalt rob and impoverish us no longer." Now it seems to me that if ever a theory was advanced and generally beheved that was bottomless, sideless, top- less — in fact, to use a homely but expressive term, " moon- shine " — it is the theory that cities are gaining wealth at the expense of the country, or that it is possible for the busi- ness and growth of the city to in any way antagonize the business and growth of the country. In the first place, every ounce and every farthing's worth of material that builds a city and sustains life therein, is bought and brought from the rural districts. It must fol- low, therefore, that the more wealthy and more populous the city becomes, the more she is obliged to purchase from the rural districts. Pray tell me, then, how the growth of a city can have any other effect upon the rural districts than that of promoting their growth and prosperity. If a large city, with its many factories and dense popu- lation, could be dropped down in one of the Gulf States about this time, to purchase all its sustenance from the rural districts, would it retard, or would it promote the financial well-being of the country round about ? To state this proposition is to argue it ; to ask the question is to answer it. The human understanding has no power to re- sist the conclusion that the estabhshment of one city, or 291 THE LABORER AND THE CAPITALIST. any number of cities, for that matter, would result in a great financial benefit to any region of country. TI18 average wealth of families in the country is certainly less than that of families in the city. Let us suppose for the sake of the argument that the difference is approximately two-thirds, as claimed by Dr. Spahr. What of it ? It is not necessary to think more than once in order to realize that, all things considered, the difference is greatly in favor of the average country fortune. A family with no other source of income than the aver- age fortune could not long exist on nine thousand dollars, for example, in one of our large cities, while a three-thou- sand-dollar farm in the country would support an ordinary family any length of time. In other words, a man is richer with 1 3,000 in the country than with $9,000 in the city. If you suggest that if my theory were right the city people would flock to the country rather than remain in the city, since it is human nature to seek the safest and most profit- able locality, I answer that the social instinct leads many people to the city, that would be much better off, pecun- iai'ily and otherwise, did they remain in the country. The theater, the dance hall, the thousand and one places of amusement, as well as lectures, music, schools, etc., etc., attract and hold tens of thousands in the city, who, finan- cially speaking, would be very much better off in the rural districts. Cities are one of the natural and necessary results of higher civilization, and their growth is the growth of a great variety of industries as compared with the single 202 THE LABORER AND THE CAPITALIST. industry of agriculture. And if the profits accruing to city industries were individually, so to speak, below the profits accruing to agriculture, yet so numerous are these city industries that their profits, though individually smaller, would, nevertheless, aggregate vastly more than those of the rural districts, and the increase in the value of the cities as a whole would necessarily be very much more rapid than that of the country outside of cities. It would be marvelously strange if a great number of important industries could not, or did not, increase faster as a whole than any single industry considered alone, be it farming or what not. The one true way to ascertain whether the agricultural interest is receiving a just proportion of the increase from all industry is to compare the profits on capital therein invested with the average profit on capital invested in other industries. When this is done, the grand average must be about the same, for the all-sufficient reason, explained in previous chapters, to mt : Capital will hasten to invest in industries yielding the larger percentage of income, until the profits of such industries are reduced to a level with those of others. When a new industry comes into existence, the prospects of large profits (and indeed the profits are often large in new industries) attract capital, and the growth of such in- dustries (if we use the percentage as a criterion) is almost' sure to outstrip the older for a time, although it may not continue to do so, as generally they cannot. The reason for this is plain, when we consider that after, say one dol- 293 THE LABORER ANb THE CAPITALIST. lar nas been invested in a new industry, the investment of another dollar means a hundred per cent, increase. As for example : When there was but one farm, the addition of another made an increase of a hundred per cent. Of course that rate of increase could not long continue. Some of our leading industries, in their infancy, increased a hundred per cent, per annum and even more. But had it been possible for any one of these larger industries to have continued that percentage of increase, it would have absorbed the capital and population of the earth long ago. A hundred per cent, annual increase in our farming in- dustry would in a very few years leave no more land to be occupied, and I might add that the increase that has al- ready taken place in American agriculture within the last three decades, has brought into use nearly all of our vast public domain, which was once looked upon as practically inexhaustible. And the time is near, indeed it now is (in a large degree), when if a man engages in farming he is obliged to hire land. And, mark you, this rapid exhaustion of our available farming lands has no little to do with the recent increase in the number of farm tenants. Why should it be assumed that the more rapid growth and greater wealth of the cities is owing to the robbery of one class by another, when, as a matter of fact, manufac- turers and their employees, for the sake of convenience, nearness to railroads, etc., have settled in cities, and the effect upon cities has been precisely what it would have been upon any other part of the country had they settled there, to wit : A great increase of wealth and population. 294 THE LABORER AND THE CAPITALIST. The location of any considerable number of factories in a rural district will create a new city, the increase in wealth and population of which will be more rapid than that of the surrounding country, and for the very good reason that it will embrace a greater number of industries. Never- theless it will not lodge the wealth in fewer hands, but it will bring the property of more indi^dduals into one locality, and draw more workmen together for a common purpose. Under such circumstances, laborers and capitalists will leave the country more or less and go to the city. Every one that does this, however, ceases to be a competitor of his former neighbor in the country, to become his patron in the city. When farmers thus exchange competitors for customers, it makes the cities grow, but does it make the city a robber of the rural district? Does it render the farmer's income smaller or his opportunities less ? We have compared the growth of a single industry (the railroad) with that of agriculture. Before we pass to the consideration of other important factors in the farm and city problem, let us compare the growth of factories with that of agriculture. According to census reports (see Mulhall, North American Review, June, 1895) from 1850 to 1890 our factories grew from $520,000,000 to $3,059,- 000,000, or 5.88 times. The farms during the same period grew from $3,967,000,000 to $15,982,000,000. Adding the $8,000,000,000 lost by the rural districts of the South during the war, as before explained, carries the value of the farms in 1890 to 6.04 times their value in 1850. In 295 THE LABORER AND THE CAPITALIST. otlier words, all other things being' equal, the farming industry since 1850 has at least held its own with manu- factures, and so it must continue to do in the long run — per- haps not in the total percentage of growth, however, but in average profit on each dollar invested, it must for the reason already explained: That competition, resulting from the desire for gain on the part of capital, will reduce all profits to a common level sooner or later. It is not easy to understand how the idea originated that the city was flourishing at the expense of the country. So far as independence is concerned, the country can live without the city, while the city cannot live without the country ; but as regards the division of income resulting from the efforts of both — as a whole, and in the long run, one can no more get too large a share than capital or labor can get too large a share. They are the employers of each other and the patrons of each other. They buy and sell, back and forth. Whatever the city receives from the coun- try, for which it renders no equivalent, precisely that much less will the country have with which to purchase from the city. In other words, by wrongfully taking from the coun- try, the city will lose that much of country trade sooner or later. Where is the permanent gain ? Whoever will study this subject as searchingly as it de- serves, will discover that gains resulting from a wrong divi- sion of income are exceptional and not general j temporary and not permanent. Again, if the great cities are getting too large a proportion of the general income, the same must be true of the smaller cities, since they are doing 296 THE LABORER AND THE CAPITALIST. business upon the same basis as the larger. Yet we never hear the farmer complain of a neighboring village (a city in embryo) which is a better market for his butter and eggs for the very reason that it, in turn, has a still larger mar- ket in the more distant city. I apprehend that the wrong impression gone abroad from the great cities is largely due to the fact that they are credited with and assessed for a vast deal of wealth which is, to all intents and purposes, the property of the country at large. There are millions upon millions of wealth in ocean transportation, from the majestic steamship and stately sailer to the tug and lighter ; the docks, the wharves, the warehouses, etc., etc., all employed, in no small degree, in moving hither and thither across the waters the products and necessities alike of farm and factory. Then there are the terminals of the great railroads, reaching far into the millions ; they, too, constitute a part of the machinery, so to speak, of transportation for both city and country. Then, there are the buildings and hundreds of miUions of other assets of insurance companies, but whose real owners are scattered throughout the land. All this paraphernalia of shipping, of inland transporta- tion, of fire and life insurance, etc., etc., etc., is as neces- sary an adjunct to the farm as to the city, and which, if removed from the city, would reduce its apparent wealth immensely, possibly one-haK, and vanquish at once and for- ever the ghost of city concentration which now haunts the dreams of so many of our intelligent and patriotic citizens. But this prodigious wealth, this handmaid of industry 397 THE LABORER AND THE CAPITALIST. and commerce, cannot be taken from the cities. It has been placed there by the necessities of our civilization. It means economy and saving for the whole population, and no 'more for one class than for another. The handlers and transporters of farm, and indeed all products, the insurance companies, the numerous printing and publishing houses, the commission merchants, the captains of the great fac- tories, have found that they could serve the interest of others, and consequently their own interests, best, by locat- ing in the city, and operating from a common center. The practice of locating in the cities and operating from a com- mon trade center is as natural as is the system by which the extremities of the human body are reached from the heart center. " But," say our opponents " see how it makes the cities grow and how it concentrates wealth in the hands of a few." I deny that it concentrates wealth. When certain among the most enterprising in the rural districts have gained a suf&cient amount of property to warrant their engaging in business on a larger scale than their own locality demands, then they pack off to the city with their capital. Owing to the large amounts generally required to engage in city enterprises, they are often obHged to associate themselves with others of their class. Then it not infrequently happens that to finally secure the desired amount they must become a corporation, and issue stock in j shares ranging from one to a hundred dollars of par value. Here the door of advancement is opened wide and the general public invited in, as it were, to share the profits of 298 THE LABORER AND THE CAPITALIST. its own industry. All this has not resulted from the philanthropy of capital. It has come froni the fact that immense asfSTreo-ations of wealth have become so numerous, and large concerns produce at so small a profit, that the average capitalist, or say one who thirty years ago would have ranked as a large capitalist lacks the means to success- fully compete with them, and therefore has been obliged to invite his poor neighbors to come in with their smaller amounts. Therefore that which our radical friends call the concen- tration of wealth has made it possible for the poorer classes to become interested in business with the larger capitahsts, and has resulted, and is resulting, in a wonder- ful diffusion of wealth among the masses. I read in our leading joiu*nals that Mr. Debs and his co- workers are about to organize a very great movement among the laboring classes, the object of which is to insti- tute a new economic system. He expects to make the first great settlement in a Western State, a part of his object presumably being to get as far as possible from the money- loaning centers of the East, which are supposed to be tak- ing to themselves a larger percentage of the earnings of the people than the money they loan creates for the peo- ple. Undoubtedly Mr. Debs shares the opinion expressed by Dr. Spahr in his work, to wit : Capital gets two-fifths and labor three-fifths of the results of human energy. With all deference to the intelligence of these men and a high regard for the motives that actuate them, I nevertheless submit, as I have already done in substance, that, as a mat- 29y THE LABORER AND THE CAPITALIST. ter of fact, capital does not get over six per cent, of the re- sults of a common industrial effort. One great reason per- haps is that capital charges only six per cent, for the ser- vice it renders. But the still greater reason is the rapidity with which capital multiplies itself and creates profits for others as it moves on through the channels of trade and industry. As for example: John Doe invests a certain sum in manufacturing. This calls for certain kinds of raw material, and the products of this material sell to the manufacturer at a profit. The carriers (teams, railroads, etc.) move the raw and finished material to and from the place of manufacture at a profit. The manufacturer sells it to the wholesale dealer at a profit ; the wholesale dealer seUs to the retail dealer at a profit, and the retail dealer sells it to the people at a profit. Thus we see that while the manufacturers get one profit, four profits go to other classes of people, all of which increases the demand for labor, since, generally speaking, all profits go to employ labor, directly or indirectly. Capital is not doing this from philanthropic motives ; it is forced to it by the laws of trade and the eternal princi- ple of mutual dependence, explained in previous chapters. It may be safely assumed that, as a rule, when our men called capitahsts have realized a profit of, say, six per cent, on their investment, it does not amount to an average of more than one-fourth of one per cent, on the sum total of their transactions. In other words, when capital, money loaned, for example, has received a profit of 6 per cent. 300 THE LABORER AND THE CAPITALIST. for itself, it has created 25 per cent, for the people at large. Had this not been true, the East, which has been loaning its money to the South and West in immense amounts for the last half century, would have substantially owned those sections years ago. Let us see what the result has been. (See Mulhall, North American Review, June, 1895, page 649.) So far as the South is concerned, of course it fell back, as before explained, and as might be expected, during the decade from 1860 to 1870. Her fields were devastated by war and her products confiscated by hostile armies, but since 1880 the per capita wealth of the South has increased 24 per cent., while that of the Eastern and Middle States has increased but 1 9-10 per cent. At the same time the per capita wealth of the Middle Western States increased 21 per cent., and that of the Mountain and Pacific States increased 74 per cent. Or, if we draw the line between the strictly Eastern States, the more jnonej-Iocming States, and the prairie States of the West, which are more especially the vcLonej-horroioing States, we find that those prairie States have increased their per capita wealth eleven times faster than the Eastern States. This being true, the radi- cal claim regarding the profits of capital, and the further assumption that the Eastern money-loaners are impoverish- ing the West, are absolutely without foundation. CHAPTER XVm. In this work I have made no attempt to justify the pres- 301 THE LABORER AND THE CAPITALIST. ent condition of trade and industry, nor have I intimated that great improvement is not possible. I have labored to establish the fact that the interests of labor and capital are one and the same. And that the remedy for our po- litical and financial ills, whatever they may be, is not in a more sociahstic government, but in a more thorough edu- cation of the people in first principles, from the richest to the poorest and from the highest to the lowest. Very rich people, that is, millionaires, or those whose fortunes approach that sum, are so few as to require Httle thought. But a competency and security for old age is of very great importance. And, generally speaking, the one sure road to that goal is through industry, temperance, self-denial, and economy. As a rule, he who does not practice these virtues cannot be rich. In a recent conver- sation with a shoe manufacturing concern in the city of New York, one of the firm informed me that they had a hand in their employ to whom they were paying six dollars per day. They had paid him that price in war times, when the purchasing power of a dollar was less than half what it is at the present time, and he being an excellent workman they had not reduced his wages. But, said my informant, he made both ends meet then, and he does no more now. He lives up to his income now as he did then. Continued the employer, if this workman had been con- tent to Hve as he lived in war times, he could have saved an average of three dollars per day for the last thirty years, which, loaned at a fair rate of interest or invested where it would have yielded him a moderate profit, would 302 THE LABORER AND THE CAPITALIST. have made him worth more than any member of this firm, and probably he could have bought and paid for the entire concern. I took occasion to make inquiry in fifty of what I considered average retail business estabhshments in one of our Eastern States, for the purpose of learning as near as possible what then- average daily savings had been for the last twenty years. One had cleared $60,000, or an average of $10 per day. Of course he had con- ducted a large business. A large majority had gained little or nothing above a hving, while several had fallen behind ; but the average for the whole fifty had not ex- ceeded 80 cents for each working day. The government statistics show that the growth of the country in wealth amounts to a saving of only twelve cents a day for each inhabitant. The saving of twenty-five cents per day for twenty-five years, compounded semi-annually, will insure the average individual against the danger of dependence or want in old age. If we deduct from the reputed wealth of the country the $25,000,000,000 which the Special Census Agent, before quoted, says are inflated values, it ^\dll not leave the average gain or savings of the country more than $700,000,000 per annum for the last fifty years. It is a fact which I would reiterate and which must not be lost sight of, that the money spent for liquor in the country amounts at the pres- ent time to at least $1,000,000,000 per annum. In other words, the liquor drinkers of America spend 40 per cent, more each year for intoxicating drinks than the average annual savings of the whole population of the country 303 THE LABORER AND THE CAPITALIST. during the past fifty years. It is hardly necessary to add that this prodigious amount of money has not been spent by the five miUion who now have savings bank accounts ; nor by the four out of five million of farmers who own farms ; nor by the nearly two million who have money invested in building and loan associations ; nor by the two million, more or less, of the successful business men of the country, because neither of these classes of people could have accomplished what they have and at the same time drunk liquor to any considerable extent. A very large preponderance of the money spent for intoxicating drinks is spent by the class of people 40 per cent, of whom admitted to the agents of the Massachusetts Labor Bureau that they were occupying the bad tenement houses because of intemperate indulgences. CHAPTER XIX. TENEMENT HOUSES. As I read of, and in fact observed, what multitudes of people swarmed the tenement houses, it appeared plain enough to me that the avarice of capital was leaving less and less room for the masses in the cities. But when I observed that the wealthy were taking to the tenement- house plan, an inquiry followed which soon opened my eyes to the fact that a large majority of our rich and compara- tively rich citizens were tenants. And as to the room oc- cupied by families, the Boston Census for 1845 (page 54) shows that, as far back as 1845, the number of persons to 304 THE LABORER AND THE CAPITALIST. a dwelling averaged 10.57, while in 1890 they averaged but 8.52. In this connection it is important to consider, as I have previously stated in the body of this work, that the tenement houses of to-day are better provided with sanitary arrangements, and I estimate that the amount of space aUowed to each family is at least 30 per cent, greater than it was fifty or even thirty years ago. Again, such knowledge as has been lately communicated to me regfardinof the more crowded tenement houses of our cities ought to be communicated to the general pubhc. A rehable real estate agent in New York said to me substan- tially as follows : " In a majority of cases with the occupants of the poorer tene- ment houses of New York, it is a matter of choice ^vith them. They are from the poverty-stricken districts of the Old World, and therefore not accustomed to much room ; and as to the more perfect sanitary arrangements, they don't want them ; and above all, they don't want to occupy quarters where they will be obliged to observe the ordinary rules of cleanliness." When we add to this the further fact that 40 per cent, of the occupants of the bad tenements of Boston confessed to the Labor Bureau that they were there on account of intem- perance, it appears to me that an element a thousand times more powerful than what is called the avarice of capital is present in the tenement-house problem, to wdt, the saloon. It is well to add, however, that what is true of Boston re- garding the number of persons to a dwelling is true of a very large majority of our leading cities. The people are getting more and more and better and better room. 305 THE LABORER AND THE CAPITALIST. Referring to the woeful condition of some of our very poor people, Carroll D, Wright wrote as follows : " So far as my own observation goes, drunkenness was at the bottom of the misery, and not the industrial system or the indus- trial conditions surrounding the men and their families." (See Waldron's work, page 39.) I do not doubt for one moment, neither do I believe any candid student of the subject can doubt, but that the solv- ing of the temperance, or rather the intemperance, problem will largely solve the problem of poverty. Mr. Debs and other distinguished advocates of the labor cause would improve the condition of labor by establishing a colony and inaugurating a new economic system in a sparsely settled section of the country. Their efforts are most needed in the more densely populated cities. Work there ! Change the habits, rectify the morale, and enlighten the minds of the masses in those densely popu- lated localities, and it can hardly be doubted that our pres- ent system of economics will be as satisfactory as any that can be devised. We have no reason to blame the rich for present condi- tions, only as the rest of us are to blame for not doing all we might for our fellow-men and ourselves. Our wealthy citizens are engaged in business almost to a man, and, as a rule, one dollar invested creates at least six dollars of new business. A man with a plant worth a million usually trans- acts about six milHons of business every twelve months. This means that his investment passes through the hands of the people once every sixty days. And can you think of any 306 THE LABORER AND THE CAPITALIST. set o£ men who have the energy and power, or who would be Hkely under any circumstances to send millions whirHng round and round through the hands of the great pubUe more rapidly than do those who now control those millions ? If Mr. Debs will stop to weigh the matter carefully, and think down to the bottom of the subject, he will discover that, if he is to succeed in any movement requiring the co- operation of any considerable number of people, he must pick his men. He cannot find a spot under the canopy of heaven where he could succeed with a majority of his colony, or even a large percentage of it, composed of peo- ple whose habit it is to spend more for liquor than they could be induced to spend for food and education. If Mr. Debs would successfully fight the strongest foe that labor and good government ever had, let him not flee from the enemy's country, where his services are most needed. Labor has much to contend with, but no more than capi- tal. Labor often suffers, but no more than capital. When an employing capitaHst becomes bankrupt his employees are thrown out of work and lose days, and sometimes months, of valuable time. But it should not be forgotten that the bankrupt employer has lost his fortune, which rej)- resented the earnings and savings of a lifetime. It is sad to think that labor has to endure the sweatshop, which not infrequently forces him to work for lower wages. But the laborer should remember that the cheaper goods turned out by the cheap labor of the sweatshop compel the competing capitahst to sell at lower rates, which shrinks his profits. The sweatshops should be aboHshed, but to accompHsh this 307 THE LABORER AND THE CAPITALIST. capital and labor must combine, as they finally will, because their interests are equally concerned. There is yet one more argument that must not be omitted. I refer to the Surrogate records quoted by Dr. Spahr : The only way, however, that .our Surrogate records can be made useful to the general economic discussion now going on among the people is through proportions, — that is, if a certain proportion of estates of varying wealth have passed through the court for the past three years, for exam- ple, it may be assumed that something near the same pro- portion is passing through year after year, and by comparing one series of years with another, we can deter- mine which period found the largest share of the nation's w^ealth in the hands of the very rich, whose estates are very generally probated. Dr. Spahr has furnished us with an excellent oppor- tunity to make such a comparison. On pages 176 and 179 he has introduced Massachusetts Surrogate records for the years 1829-30-31 and for the years 1889-90-91. One of these records shows that during the former period (1829-31) only two estates valued at more than $500,000 were probated, and that they aggregated only $1,267,817. The other record shows that during the latter period (1889-91) thirty estates above $500,000 were pro- bated and that their aggregate value was $23,841,879. The presentation of this record by Dr. Spahr is as much as to say : " Behold how fearfully wealth has concentrated 308 THE LABORER AND THE CAPITALIST. during those sixty years." The masses, the legislators, indeed the people everywhere, are reading these and similar statements, and wondering what is to come of it all. If Dr. Spahr would prove that the wealth of the country has been concentrating during the sixty years in question, his records must show that a given proportion of estates comprised a larger proportion of the nation's wealth in the years from 1889 to 1891 than they did in the years from 1829 to 1831. Do his records show it, is the question? These are the facts. While the two largest holdings pro- bated during the former period, aggregated, as before explained, only ^1,267,817, they nevertheless constituted 8.75 per cent, of the total amount probated during that period, while $4,962,325, which represents the value of a proportionate nimiber of the largest estates probated from 1889 to 1891, amounted to only 3.19 per cent, of the total probates during that period. In other words, according to the Surrogate records, the two largest deceased holders had possessed 161 per cent, larger share of the property of Massachusetts in the years from 1829 to 1831 than the same proportion of the largest holders had held in the years from 1889 to 1891. Moving down Dr. Spahr's table, I select for the next class of estates for comparison all above $100,000 in 1829- 31. The records of that date contain eleven of these hold- ings, and they aggregate $3,128,715, or 21.58 per cent, of the total probates. Taking the increase in the number of probates for a basis (3.13 times), the proportionate number of largest estates for 1889-91 show an aggregate of $25,- 309 THE LABORER AND THE CAPITALIST. 847,179, or 16.61 per cent. o£ the total amount probated, which means that 29.92 per cent, larger proportion of wealth was in the hands o£ the richer class in 1829-31 than in 1889-91. Still moving" down Dr. Spahr's table, I select for com- parison all above $50,000 in the older table. There were thirty-six of these estates, and their aggregate value was $4,957, 862, or 34.20 per cent, of the total amount pro- bated. The proportionate number of estates (112.68) in the years 1889-91 aggregated $38,747,138, or 24.90 per cent, of the total amount probated, the same showing 37.35 per cent, greater proportion of wealth in the hands of the few in 1829-31 than in 1889-91. Not long since, I saw in a work published in 1850, re- ports of two canvasses of Massachusetts, by different agen- cies, for the purpose of ascertaining the number of wealthy people then residing in the State, and the amount of their holdings. The reports were not official, therefore I do not quote them, but it may be remarked that they indicated what the official records I have presented prove, to wit: — those whom we call " the few " held a much larger propor- tion of the property of the old Bay State in those days than a corresponding proportion of the population hold at the present day. John Quincy Adams was credited with $400,000. We think of our National lawmakers as being rich now- adays, and many of them are, but then the same was true of the legislators who served in the early days of the Repub- hc. The v/ealth of our present Senate is not as great for 310 THE LABORER AND THE CAPITALIST. this day as was that of the Senate of 1800 for that day. With the present state of feeling toward rich people, it would be impossible to elect a man to the Presidency own- ing as large a share of the National wealth as Washington or Adams owned. FINIS. yf/IOSITy OF SOUTHERN CALlFOWUft N9 1162 AGO